Audit of California's Medicaid Inpatient Disproportionate Share Hospital Payments for University of California, San Diego Medical Center, San Diego, California, State Fiscal Year 1998

EXECUTIVE SUMMARY:

This final report points out that the California Department of Health Services made Medicaid disproportionate share hospital (DSH) payments to the University of California, San Diego Medical Center (UCSDMC) that exceeded by $8.0 million (federal share) the hospital specific limit for DSH payments as mandated by the Omnibus Budget Reconciliation Act of 1993. This problem occurred primarily because the state:  (1) used projected amounts instead of actual expenses and payments, (2) did not limit total operating expenses to amounts that would be allowable under Medicare cost principles, (3) included bad debts as additional operating expenses, and (4) double counted some charges and included charges for services provided to inmates. We recommended financial adjustments and procedural corrections. The state generally disagreed with our findings and recommendations.