"Review of Vendor Rebates Paid
to Hospitals - Kaiser Foundation Hospitals and Health Plans, Inc., Oakland,
June 4, 2007
Text of Report is available in PDF format (566 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 Kaiser Foundation Hospitals
and Health Plans, Inc.
(the provider) reduced costs reported on its fiscal year 2003 Medicare cost
report by the $35,438 vendor rebate it received. The
provider did not reduce costs reported on its fiscal year 2003 Medicare cost
report by the $35,438 rebate, 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
$35,438 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 on its Medicare cost
reports. The provider agreed with our recommendations.