Review of Cost Report Settlements by Mutual of Omaha (Mutual) for Medicare Inpatient Acute Care Providers Receiving Disproportionate Share (DSH) Payments

EXECUTIVE SUMMARY:

The objective of our review was to determine whether Mutual, at cost report settlement, had correctly calculated providers' disproportionate share hospital (DSH) payments.  We found that Mutual incorrectly calculated DSH payments for two of 45 providers we reviewed, and made other minor settlement errors for one of the two providers with a DSH payment error.  Consequently, Mutual made a net Medicare underpayment of $2,345.  These payment problems occurred because of insufficient supervisory review of cost report settlements.  We brought this to Mutual's attention.  They indicated the cost reports would be reopened and adjusted.  We recommend that the Centers for Medicare & Medicaid Services (CMS):  (i) monitor Mutual's reopening of the cost reports for the two providers with settlement errors identified in our review; and, (ii) ensure that Mutual establishes sufficient supervisory review procedures for cost report settlements.