A biweekly publication from the Healthcare Group at Feeley & Driscoll, P.C.
Please visit us at our website: www.fdcpa.com/healthcare.htm. This OIG Update is also accessible from the F&D website, by visiting www. fdcpa.com/oig.updates.htm.
In this Issue:
1. Medicaid Hospital Outlier Payments in Virginia for State Fiscal Years 2001 Through 2003 (A-03-04-00212)
2. Virginia Rebase Process Used to Calculate Medicaid Rates for State Fiscal Years 2001 Through 2003 (A-03-05-00205)
1. Medicaid Hospital Outlier Payments in Virginia for State Fiscal Years 2001 Through 2003 (A-03-04-00212)
OIG’s objective was to determine whether Virginia’s method of computing inpatient hospital cost outlier Medicaid payments resulted in reasonable payments. It did not. The State used an outdated cost-to-charge ratio in its calculations. If Virginia had applied a more current cost-to-charge ratio to convert billed charges to costs, it could have saved approximately $5.8 million ($3.0 million Federal share) at the three hospitals reviewed.
OIG recommended that Virginia should consider revising the State Medicaid outlier policy to use the cost-to-charge ratio from the most recently settled (tentative or final) cost report and retroactively adjust provider payments for each year based on the actual cost-to-charge ratio calculated for that year. Virginia stated that it did not disagree with OIG’s finding but did not concur with the specific recommendations. Although Virginia’s actions differ from the audit recommendations, the State has taken administrative steps to reduce the possibility of using cost-to-charge ratios with material misstatements in its rebasing.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region3/30400212.pdf
2. Virginia Rebase Process Used to Calculate Medicaid Rates for State Fiscal Years 2001 Through 2003 (A-03-05-00205)
OIG’s objective was to determine whether Virginia used allowable cost report data to establish rates used to calculate Medicaid diagnosis-related group (DRG) base and outlier payments to the two State-owned teaching hospitals during State fiscal years (FY) 2001 through 2003. Virginia did not use allowable cost report data to establish rates used to calculate Medicaid DRG base and outlier payments to State-owned teaching hospitals. Instead, Virginia used as-filed cost report data, which included overstated bed days and other unallowable costs, to develop the hospital-specific operating rates per case and cost-to-charge ratios. If Virginia had used tentatively settled cost report data it would have reduced payments to the two State-owned teaching hospitals by $18,088,512 ($9,351,348 Federal share) during State FYs 2001 through 2003.
OIG recommended that Virginia consider amending its State plan to revise the operating rates per case and cost-to-charge ratios when material misstatements in a hospital’s base-year cost report data are identified after the State rebases. Virginia did not concur with the specific recommendation. However, Virginia stated that it has taken steps to reduce the possibility of using cost-to-charge ratios with material misstatements in the context of the rebasing process.
To access the full article, click here: http://oig.hhs.gov/oas/reports/region3/30500205.pdf
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http://oig.hhs.gov/fraud/exclusions/listofexcluded.html
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If you have any questions or would like to discuss any of these issues with one of Feeley & Driscoll’s healthcare specialists, please contact us at (617) 742-7788 or via e-mail at info@fdcpa.com. |
