Corporate Compliance

Gov't audit insider 2/24/04: OIG takes a look at one facility's cost report

Healthcare Auditing Weekly, February 24, 2004

Albuquerque Manor Nursing center recently opened its Medicaid cost report to an Office of Inspector General (OIG) audit. The OIG examined Manor's fiscal year (FY) 2000 report to determine whether costs were allowed and in accordance with requirements on both the state and federal level. The OIG zeroed-in on Medicaid charges that were not related to patient care, or those unsupported by documentation.

To meet audit objectives, the OIG did the following:

  • Reconciled the cost report to Manor's trial balance and general ledgers

  • Studied the flow of payroll costs from the payroll company to Manor's ledger

  • Reconciled salary expenses in the cost report to the payroll company's earnings distribution reports

  • Tested approximately $1.4 million out of $13.4 million in various charges including administrative costs and general expenses from the cost report

  • Tallied questioned costs that did not appear to be allocations to related companies for operations-related expenses like housekeeping or accounting services.

    The OIG found $518,492 in costs that were not patient related, or supported in cost documentation. This amount also included charges for services from related companies that were not reduced to cost or documented as required by New Mexico's Medicaid requirements, and other costs not allowable by the state's Medicaid program.

    Manor did not keep its internal controls and policies in accordance with state regulations. Find out if your skilled nursing facility is up to date with state staffing, cost report, and other compliance regulations.

    Click here to view the OIG audit, called "Audit of Albuquerque Manor's Medicaid Nursing Facility Cost Report."

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