Review of Medicare Disproportionate Share Hospital Payments for Methodist Hospital - Memphis for Fiscal Year 1999

EXECUTIVE SUMMARY:

The objective of this review was to determine if Methodist Hospital's (Hospital) claim for Medicare disproportionate share hospital (DSH) reimbursement was in compliance with Medicare reimbursement criteria.  The hospital claimed $22,059,968 in Medicare DSH reimbursement.  Our review focused on the Medicaid eligible days and the Supplemental Security Income (SSI) ratio used by the hospital to support its claim.  We found that the Hospital's Medicare DSH claim included $3,057,727 that was unsupported and/or otherwise unallowable.  The unallowable claim occurred because the Hospital overstated the Medicaid eligible days and the supplemental security income ratio used in its revised DSH calculation.  We found 9,522 of the 67,068 Medicaid eligible days included in the Hospital's claim to be either unsupported or non-allowable.  The Hospital's SSI ratio was incorrect because the Hospital improperly combined two SSI ratios in its DSH calculation.  The Hospital used a blended SSI ratio of 15.62 percent, while the correct ratio for FY 1999 was 15.335 percent.  We recommended that the Hospital reduce the amount claimed for Medicare DSH by $3,057,727.  We also recommended that the Hospital improve its procedures for verifying Medicaid eligibility.