Review of Rehability Health Services, Incorporated's Medicare Cost Report for the Outpatient Rehabilitation Facility Program in Texas for the Fiscal Year Ended September 30, 1998

This final report points out that of $28.6 million of allocable expenses reported in Rehability Health Services' (RHS) Fiscal Year 1998 Medicare cost report, $18.4 million was questioned primarily because RHS did not provide documentation to support costs claimed, and certain clinic extension sites were not Medicare certified to provide services to Medicare beneficiaries. As a result, a material portion of the $5.5 million in Medicare payments to RHS for FY 1998 was not reimbursable. We are providing Mutual of Omaha, the fiscal intermediary for RHS, with the necessary information so it can apply the appropriate adjustments to RHS' cost report, recompute the costs of provider services, and determine the overpayment amount for final settlement of the cost report. However, RHS voluntarily withdrew from participation in the Medicare program, and along with its parent corporation, has filed for Chapter 11 bankruptcy.