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The objective of this audit was to determine whether organ acquisition costs claimed on the calendar year (CY) 1998 Medicare cost report by the University Hospital of Brooklyn for its kidney transplant program were allowable. The University Hospital of Brooklyn did not comply with certain Medicare laws, regulations, and guidelines for claiming organ acquisition costs in the preparation of its Medicare Part A cost report, and received excess Medicare reimbursement for organ acquisition activities. The University Hospital of Brooklyn claimed $343,272 in unsupported costs. The estimated Medicare overpayment was $263,888. The unsupported costs did not comply with Medicare’s documentation requirements for reimbursement. We recognize that some portion of the unsupported costs may have related to organ acquisition activities and would have been allowable if documented properly. We recommended that the Medicare intermediary recover that portion of the estimated Medicare overpayment that the University Hospital of Brooklyn is unable to support; review organ acquisition costs claimed in subsequent years for unsupported costs similar to those identified for CY 1998, and recover any Medicare overpayments; monitor future claims to ensure compliance with Medicare requirements; and instruct the University Hospital of Brooklyn to develop and maintain adequate time-and-effort reporting and accounting controls, and to provide clear direction to personnel as to Medicare requirements for claiming and documenting organ acquisition costs.