Audit of King City Rehab & Living Center's Medicaid Cost Report for Fiscal Year Ended June 30, 2000

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EXECUTIVE SUMMARY:

King City Rehab & Living Center (King City) is a nursing facility in Tigard, Oregon operated by Avamere Health Services, Inc. (Avamere).  For the fiscal year ended June 30, 2000 (FY 2000), Avamere included $62,394 on the Medicaid cost report for King City that was unallowable under Federal and State requirements.  These unallowable costs were claimed because Avamere did not have adequate policies, procedures, and controls to ensure compliance with Federal and State Medicaid program requirements.  We recommended that Avamere (1) submit a revised FY 2000 Medicaid cost report, and (2) improve existing policies, procedures, and controls to ensure that costs on the Medicaid cost report are allowable, classified in the proper accounts, and related to patient care.  Avamere concurred with $46,974 of the $62,394 considered unallowable.  Also, Avamere stated that it did not plan to file an amended cost report but instead would send a copy of the final adjustments to the State.