Results of Survey and Certification Review

EXECUTIVE SUMMARY:

The primary objective of this review was to determine whether survey and certification costs were properly allocated between Medicare, Medicaid, and State licensing programs.  We found that, rather than establishing an equitable basis for allocating costs among benefitting programs, the allocation of survey and certification costs was based on predetermined historical percentages. During the budgetary process for each State, the percentages were developed by the Centers for Medicare & Medicaid Services (CMS) staff based on their knowledge and expertise of Federal and State program requirements. Since these allocation percentages were established years ago, there was no supporting documentation to substantiate these percentages.  We recommended that CMS consider requiring States to develop and implement a system which will provide assurances that survey and certification costs are equitably allocated among benefiting programs.