Corporate Compliance

Auditing against the OIG's Compliance Program Guidance for Hospitals

Healthcare Auditing Weekly, December 27, 2005

This week, we'll conclude our four-part discussion of reviewing the claim development and submission process when auditing against the OIG's Compliance Program Guidance for Hospitals. This week, we'll discuss cost report policies.

Cost report policies should include procedures that seek to ensure full compliance with applicable statutes, regulations, program requirements, and private-payer plans. Determine whether hospital procedures ensure that

  • costs are not claimed unless they are based on appropriate and accurate documentation

  • allocation of costs to various cost centers are accurately made and supported by verifiable and auditable data

  • unallowable costs are not claimed for reimbursement

  • accounts that contain both allowable and unallowable costs are analyzed to determine the unallowable amount that should not be claimed for reimbursement

  • costs are properly classified

  • FI prior-year audit adjustments are implemented and are either not claimed for reimbursement or are claimed for reimbursement and clearly identified as protested amounts on the cost report

  • all related parties are identified on Form 339 submitted with the cost report, and all related party charges are reduced to cost

  • requests for exceptions to Tax Equity and Fiscal Responsibility Act of 1982 limits and the routine cost limits are properly documented and supported by verifiable and auditable data

  • the hospital's procedures for reporting bad debts on the cost report are in accordance with federal statutes, regulations, guidelines, and policies

  • allocations from a hospital chain's home-office cost statement to individual hospital cost reports are accurately made and supported by verifiable and auditable data

  • procedures are in place and documented for notifying the FI promptly of errors discovered after submitting the cost report and, where applicable, after the submission of a hospital chain's home-office cost statement

      The above tip is an excerpt from the book "Hospital Auditing and Monitoring: Sample Programs for Key Risk Areas." Copyright 2004 by HCPro, Inc. This book is a step-by-step, practical manual that offers sample audit programs for the most troublesome areas that a hospital must audit. The binder and CD-ROM are filled with actual audit programs used by auditors and compliance officers in the field. Click here for more information or to order your copy today.

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