Review of Outpatient Psychiatric Services Provided by Hollywood Pavilion Hospital for Fiscal Year Ending June 30, 1998

EXECUTIVE SUMMARY:

This final audit report points out that significant numbers of outpatient psychiatric claims by Hollywood Pavilion Hospital for Fiscal Year 1998 did not meet Medicare reimbursement requirements. Specifically, many outpatient psychiatric services were not documented according to Medicare requirements or were not reasonable and necessary. We estimated, based on a statistical sample, that the hospital overstated billings to Medicare for outpatient psychiatric services by $2.4 million for the above period. We also identified $721,388 in other unallowable expenses included on the cost report that were improperly allocated or not reimbursable. We recommended financial adjustments. We further recommended that the hospital strengthen its procedures to ensure charges for outpatient psychiatric services are covered and properly documented in accordance with Medicare requirements. Finally, we recommended that the hospital develop procedures to exclude unallowable costs from its Medicare cost report and properly allocate costs.