Review of Duke University Medical Center's Reported Fiscal Year 2006 Wage Data

EXECUTIVE SUMMARY:

Duke University Medical Center (the Hospital) overstated its wage data by $9,283,606 and 50,857 hours in its fiscal year (FY) 2006 Medicare cost report.  Correcting the Hospital's errors decreased the average hourly wage rate from $31.51 to $30.96.  Under the acute-care hospital inpatient prospective payment system, CMS adjusts the Medicare base rate paid to participating hospitals by the wage index applicable to the area in which the hospitals are located.  CMS updates the wage indexes annually based on hospitals' reported wage data.

We recommended that the Hospital submit a revised FY 2006 Medicare cost report to the fiscal intermediary to correct the wage data overstatements and implement review and reconciliation procedures to ensure that the wage data reported in future Medicare cost reports are accurate, supportable, and in compliance with Medicare requirements.

The Hospital agreed with most of our findings but disagreed, in part, that it had included in its wage data unsupported costs for Part B services provided by nurse practitioners.  Because the Hospital provided additional information on these costs, we revised this finding.

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