Review of Medicaid Disproportionate Share Hospital Payments Made by Virginia's Department of Medical Assistance Services to the Medical College of Virginia Hospitals for the Fiscal Years Ending June 30, 1997 and June 30, 1998

EXECUTIVE SUMMARY:

This final report points out that the Medical College of Virginia Hospitals (MCVH) overstated its uncompensated care costs (UCC) in state fiscal year 1997 by including unallowable coats consisting of physician practice plan costs incurred by a related entity. As a result, disproportionate share hospital (DSH) payments exceeded UCC costs by $12.2 million ($6.3 million federal share).  We also found that MCVH included in UCC an undetermined amount of costs of patients with insurance coverage and costs related to services provided in prior periods.  Finally, MCVH claimed costs to treat inmates of the Virginia Department of Corrections.  We recommended a financial adjustment for $6.3 million and procedural corrections.  State officials generally disagreed with our findings and recommendations.