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Audit (A-07-09-02746)

Review of Geographic Classification of Marion General Hospital for Medicare Operating Disproportionate Share Hospital Payment

Executive Summary

Geographic classifications used by AdminaStar Federal, Inc. (AdminaStar Federal), to calculate the Medicare operating disproportionate share hospital (DSH) adjustments resulted in an overpayment at one hospital. Of the operating DSH adjustments totaling $2.9 million that Marion General Hospital (Marion) claimed on its cost reports for the fiscal years ending June 30, 2003, and June 30, 2004, $438,000 was excessive because AdminaStar Federal calculated the operating DSH adjustments as if the hospital was urban for the entirety of the two consecutive cost reporting periods. However, Marion was rural for the period October 1, 2002, through September 30, 2003. This resulted in an operating DSH overpayment of $438,000.

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