Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Day Kimball Hospitalís Controls to Ensure Accuracy of Wage Data Used for Calculating Inpatient Prospective Payment System Wage Indexes," (A-01-05-00506)

November 4, 2005

Complete Text of Report is available in PDF format (342 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


This is the first in a series of reviews on the accuracy of hospitalsí fiscal year (FY) 2003 wage data, which CMS will use in developing FY 2007 wage indexes.  Our objective was to determine whether the hospital complied with Medicare requirements for reporting wage data in its FY 2003 Medicare cost report.  The hospital did not fully comply with reporting requirements.  Specifically, the hospital reported unallowable Part B physician salaries, other unallowable costs, severance payments, and understated contract labor services.

We recommended that the hospital:  submit a revised FY 2003 Medicare cost report to correct the wage data overstatement totaling $2,013,174 and 23,221 hours, and implement review and reconciliation procedures to ensure that the wage data reported on future Medicare cost reports are accurate, supportable, and in compliance with Medicare requirements.  The hospital concurred with our findings and recommendations.