Department of Health and Human Services
Office of Inspector General -- AUDIT
"Review of Vendor Rebates Paid to Hospitals, Option Care, Inc., Buffalo Grove, Illinois" (A-05-07-00045)
August 10, 2007
Complete Text of Report is available in PDF format (337 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.
The objective of our review was to determine whether Option Care, Inc. (the provider) reduced costs reported on its fiscal year 2003 Medicare cost report by the $173,805 vendor rebate it received. For the $173,805 rebate reviewed, the provider did not reduce costs reported on its 2004 Medicare cost report by $43,451, contrary to Federal regulations and CMS guidance.
We recommended that the provider (1) revise and resubmit its 2003 Medicare cost report, if not already settled, to properly reflect the $43,451 portion of the rebate as a credit reducing its health care costs and (2) consider performing a self-assessment of its internal controls to ensure that future vendor rebates are properly credited in its Medicare cost reports. The provider disagreed with our finding and recommendations.