OBJECTIVE

The objective of our review was to confirm that disproportionate share hospital (DSH) payments to St. Vincent Charity Hospital and St. Luke’s Medical Center (collectively, the Provider) during Federal fiscal year 2000 did not exceed the DSH payment limits imposed by the Omnibus Budget Reconciliation Act of 1993.

SUMMARY OF RESULTS

The Ohio Department of Job & Family Services calculated the Provider’s DSH limit in accordance with the State plan. However, we found that the Provider’s DSH payments exceeded the hospital specific limits imposed by the Omnibus Budget Reconciliation Act of 1993. We found that the Provider included patient charges totaling $849,596 that did not qualify as uncompensated care in its Medicaid cost reports. The charges included:

• unsupported charges totaling $652,560,

• duplicate charges of $109,768,

• charges for patient bad debt recoveries totaling $38,160,

• overstated charges due to an accounting error of $24,619,

• inflated charges for billing adjustments totaling $17,609, and

• charges for unallowable items and services totaling $6,880.

The costs associated with the unallowable charges were included in the calculated DSH limits and resulted in DSH overpayments to the Provider. Approximately $407,000 of the $849,596 had been allocated into the “non-Medicaid uninsured” cost reporting categories. Ohio calculated the costs of uncompensated care by converting the reported charges to costs through the application of cost-to-charge ratios. When converted from a charge basis to a cost basis, the $407,000 reflects DSH overpayments of about $197,000 ($115,000 Federal share).

RECOMENDATIONS

We recommend that the Ohio Department of Job & Family Services recalculate and recover the DSH overpayment to the Provider of about $197,000 ($115,000 Federal share) and redistribute this amount through its payment distribution formula to other hospitals that may have been underpaid as the result of this overpayment.

OHIO COMMENTS

In written comments to the draft report, the Ohio Department of Job & Family Services requested details showing where charges were reported on Schedule F of the Provider’s cost report, itemized by location (inpatient or outpatient), and by eligibility type (disability assistance, uncompensated care above 100 percent of the Federal poverty level, or uncompensated care equal to or below 100 percent of the Federal poverty level). Ohio indicated that it would then work with the Provider to recalculate and recover any DSH overpayments.

OFFICE OF INSPECTOR GENERAL RESPONSE

We have attached a schedule to the report, as Appendix A, that shows the necessary adjustments, by location and eligibility type, to Schedule F of the Provider’s cost report.

TABLE OF CONTENTS

INTRODUCTION

• BACKGROUND
  • Disproportionate Share - General Program OverviewOhio DSH Program – General Hospitals
  • Hospitals Selected for Review
• OBJECTIVE, SCOPE, AND METHODOLOGY
  • ObjectiveScope
  • Methodology

RESULTS OF REVIEW

• COMPLIANCE WITH HOSPITAL SPECIFIC LIMITS
  • Criteria – Federal Requirements and CMS Policy
  • Condition – DSH Payments Exceeded the DSH Limits
    • Unsupported Charge
    • Duplicated Charges
    • Charges for Patient Bad Debt Recoveries
    • Overstated Charges Due to Accounting Errors
    • Inflated Charges for Billing Adjustments
    • Charges for Unallowable Items and Services
  • Cause – Provider DSH Limits Were Overstated Due to Unallowable
    • Reported Charges
  • Effect – Provider DSH Overpayment
• STATE PLAN CONSIDERATIONS
• RECOMMENDATION
• OHIO COMMENTS
• OFFICE OF INSPECTOR GENERAL RESPONSE

APPENDICES

A – Unallowable Charges and Costs Included on Schedule F of Provider’s Cost Report

B – Ohio Department of Job & Family Services Written Comments