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Government Audit Insider: California fails to make claims for reimbursement

Healthcare Auditing Weekly, January 29, 2007

Results from a recent OIG audit of additional reimbursement for distinct-part nursing facilities of public hospitals in California were both positive and negative, the OIG reported this month.

The state's Department of Health Services (DHS) properly established eligibility for additional reimbursement for selected facitilities, but it did not claim additional reimbursement amonts for two facilities in accordance with state and federal requirements, the audit found.

The errors occurred because DHS did not provide adequate instructions to the facilities to properly calculate the certified public expenditures used to support additional reimbursement amounts. Also, the department did not have adequate monitoring procedures to ensure that the facilities properly calculated their reported Medicaid days and expenditures. The improper calculations resulted in an overpayment of more than $3.6 million.

The OIG recommended that DHS refund $3,609,267 to the government, review additional reimbursement amounts paid to the selected facilities subsequent to the audit period and refund any overpayments, provide adequate instructions to all facilities to ensure that the certified public expenditures used to support additional reimbursement amounts are properly calculated, and strengthen monitoring procedures to ensure that all facilities' reported Medicaid days and expenditures are properly calculated.

The State agency disagreed with the OIG's findings related to the overstatement of one facility's estimated quarterly costs, however, it agreed with the remaining findings and recommendations.

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