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Audit (A-09-08-00033)

1-28-2010
Review of OneLegacy's Reported Fiscal Year 2006 Organ Acquisition Overhead Costs and Administrative and General Costs

Executive Summary

OneLegacy did not fully comply with Medicare requirements for reporting selected organ procurement organizations (OPO) overhead costs and administrative and general costs in its fiscal year (FY) 2006 Medicare cost report. Of the $3.2 million of costs we reviewed, $2.6 million was allowable. The remaining $531,000 represents $291,000 of unallowable costs and $240,000 of unsupported costs. As a result, OneLegacy overstated its Medicare reimbursement in the FY 2006 Medicare cost report by an estimated $297,000.

We recommended that OneLegacy (1) submit a revised FY 2006 Medicare cost report to the fiscal intermediary to correct the estimated Medicare overstatement of $297,000 and (2) develop and implement procedures to ensure that costs reported in future Medicare cost reports are allowable, supportable, and in compliance with Medicare requirements. In its comments on our draft report, OneLegacy partly agreed and partly disagreed with our findings. OneLegacy stated that it was unable to implement the first recommendation because the fiscal intermediary has never allowed OPOs to reopen closed reports. OneLegacy agreed with the second recommendation.

After reviewing OneLegacy's comments and the additional documentation that OneLegacy provided, we revised our findings and modified our first recommendation. Nothing in OneLegacy's comments and additional documentation caused us to revise our other findings. The fiscal intermediary informed us that it could reopen the cost report at the provider's request.

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