National Review of General and Administrative and Fringe Benefit Costs At Hospitals

EXECUTIVE SUMMARY:

This final report presents the results of our audits of the general and administrative (G&A) and fringe benefit (FB) costs at 19 specific hospitals and 2 hospital corporations' home offices that participate in the Medicare program. Our audits identified unallowable G&A and FB costs of $50.7 million included in the Fiscal Year 1991 Medicare cost reports of these providers. We also identified $3.5 million of costs which we have labeled as "costs for concern" because of their tenuous relationship to patient care. We have issued audit reports to the providers included in the national review, making recommendations to resolve the local issues that we identified. In this report, we are recommending that the Health Care Financing Administration revise the Provider Reimbursement Manual to provide additional clarification on the allowability of specific types of G&A and FB costs.