Corporate Compliance

GOV’T AUDIT INSIDER: Incorrect wage data reporting in Connecticut

Healthcare Auditing Weekly, May 31, 2005

Windham Hospital in Willimantic, Connecticut incorrectly reported wage data by $404,402 for the Medicare fiscal year (FY) 2000 cost reporting period, according to an OIG audit report. Because of the overstated wages, the Connecticut statewide rural wage index for FY 2004 is overstated by about 1%. Also, average payment is overstated by about $24 per hospital discharge to the two hospitals in the Connecticut statewide rural area and to 17 additional hospitals in two Connecticut urban metropolitan statistical areas. The OIG recommends that the hospital strengthen financial reporting controls.

During the audit, the OIG did the following:

  • Reviewed applicable laws and regulations

  • Obtained an understanding of the hospital's control procedures for reporting wage data

  • Verified that wage data on the hospital's trial balance reconciled to its audited financial statements

  • Reconciled the total reported wages on the hospital's FY 2000 Medicare cost report to its trial balance

  • Reconciled the wage data from selected cost centers to detail support such as payroll registers or accounts payable invoices

  • Tested a sample of personnel from payroll registers and verified hours to timesheets

  • Held discussions with the hospital staff regarding the sample of personnel

  • Reviewed fiscal intermediary audit reimbursement adjustments made to the hospital wage data as reported on its FY 2000 Medicare cost report

    Click here to read the audit report, "Review of Windham Hospital's Controls to Ensure Accuracy of Wage Data Used for Calculating Inpatient Prospective Payment System Wage Indexes," (A-01-04-00511), issued April 27.

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