Audit report for the year ended June 30, 1997, St. Mary's Hospital Long Term Care Facility, Medicaid provider no.00140126A, Nursing Facilities Services Program

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DEPARTMENT'qF Aun:rrsA'.NnACCQUNTS . .Medic~id and Locaf Govetntt1entAudits

. . .... . . . . . AUDIT REPORT

YEAR FOR THE

ENDED SEPTEMBER30,l997

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MARY'S 11,0.SPITAL

LONG TERM CARE FACILITY

. , MEDICAID PROVIDERNUl\lBER 00140126A,

NURSING FACILITY SERVICES PROGRAM

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TABLE OF CONTENTS
. LETTER OF TRANSMITTAL 1
INTRODUCTION.................................................................................. 1
FINDINGS AND RECOMMENDATIONS ......................................... 6 Summary of Audit Findings Affecting Allowable Costs and Patient Day Statistics ......... 11 Schedule of Allowable Costs and Patient Day Statistics ........ 13

Report Prepared By:
State ofGeorgia Department ofAudits and Accounts Medicaid and Local Government Audits Division 254 Washington Street, S. W., Suite 322
Atlanta, Georgia 30334-8400 (404) 656-2006
'Michael A. Plant, Director

RUSSELL W. HINTON
STATE AUDITOR

DEPARTMENT OF AUDITS AND ACCOUNTS
MEDICAID AND LOCAL GOVERNMENT AUDITS
254 Washington Street, S.W., Suite 322 Atlanta, Georgia 30334-8400
Telephone (404) 656-2006 Facsimile (404) 656-7535

.MICHAEL A. PLANT
DIRECTOR

August 4, 1999

Members of the Board of Community Health, and The Honorable Russ Toal, Commissioner Georgia Community Health 2 Peachtree Street, N.W., 40th Floor Atlanta, Georgia 30303
Ladies and Gentlemen:
Th.is report provides the results of our audit of St. Mary's Hospital Long Term Care Facility, provider number 00140126A, a participant in the Nursing Facility Services Program for the year ended September 30, 1997. Th.is report is intended to be used solely in connection with the administration of the Georgia Department of Medical Assistance Nursing Facility Services Program and is not to be used or relied upon for any other purpose.
Respectfully Submitted,
9"4M< a2 (j. 41:..is. Russell W. Hinton State Auditor
RWH/tt/ds

1998 Audit Report: St. Marv's Hospital Long Term Care Facility

1

INTRODUCTION

General Information

The Georgia Medical Assistance Program (Medicaid) is administered
by the Georgia Department of Medical Assistance and is jointly funded by the State of Georgia and the federal government. Medicaid
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pays health care providers for furnishing health care services to
individuals or families with low income and limited resources. The Department of Medical Assistance has established specific payme~t guidelines and limitations for each covered medical service.

Through the Nursing Facility Services Program, Medicaid pays for care in institutional settings for recipients who are unable to remain at home or in the community. Nursing homes are paid for this service using rates calculated from Nursing Home Cost Reports submitted by each provider. These cost reports include financial, patient census, and other information. Information included in the Nursing Home Cost Report is subject to audit by the Department of Medical Assistance or its agents. In an agreement with the Department of Medical Assistance, the Department of Audits and Accounts has accepted the responsibility of auditing Medicaid providers.

Provider Information

St. Mary's Hospital Long Term Care Facility, a 120-bed long-term health care facility located in Athens, Georgia, is a provider enrolled in the Georgia Medicaid Nursing Facility Services Program. The facility provides both skilled and intermediate care services to resident patients. The facility is owned and operated by St. Mary's Health Care System, Inc., which operated both St. Mary's Hospital and St. Mary's

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Nursing Facility Services Program

Hospital Long Term Care Facility in separate physical facilities during the year under review.

Audit Objectives

The purpose of this audit was to determine whether St. Mary's Hospital Long Term Care Facility maintained adequate documentation to support the allowable costs and patient day statistics reported in its Nursing Home Cost Report for the year ended September 30, 1997; and to determine whether St. Mary's Hospital Long Term Care Facility complied with the federal and state laws, regulations, policies and procedures for the Nursing Facility Services Program in effect for that period. The specific objectives of this audit were to:



determine if allowable costs reported in the Nursing

Home Cost Report are reasonable and allowable, in

all material respects, in accordance with federal and

state laws, regulations, policies and procedures

governing the Georgia Nursing Facility Services

Program;

compare patient day statistics included in the cost report to provider records to determine if the patient day statistics are accurately reported; and



determine if the provider meets the requirements for

classification as a hospital-based nursing home

outlined in DMA Policies and Procedures for

Nursing Home Facility Services, Section 1002.l(g);

and

1998 Audit Report: St. Mary's Hospital Long Term Care Facility

3

recommend appropriate action based on the results of our audit.

Scope and Methodology

To accomplish these objectives, we performed a limited review of the provider's internal control structure to the extent necessary to plan our audit. We interviewed provider personnel and examined records and documentation to determine the adequacy of amounts and disclosures included in the Nursing Home Cost Report. We also reviewed, on a test basis, evidence supporting these amounts and disclosures and assessed the accounting principles used and significant estimates made by management. We evaluated the tested transactions and accounts for compliance with cost reporting principles included in the Health Care Financing Administration Provider Reimbursement Manual (HCFA Pub. 15-1) and DMA Policies and Procedures for Nursing Facility Services.
In accordance with Section 1002 of Policies and Procedures for Nursing Facility Services, the Department of Medical Assistance has calculated the payment rate for St. Mary's Hospital Long Term Care Facility using a method often called the "Dodge Index system". Under the Dodge Index system, reasonable construction and asset acquisition costs are used in calculating the payment rate rather than the actual costs incurred by the nursing, home for property costs such as depreciation and amortization; capital-related interest expense; and lease expense. Because these property costs are not considered by the Department of Medical Assistance when calculating the payment rate for St. Mary's Hospital Long Term Care Facility, our audit did not include a review of these costs. However, because property taxes and