Review of the Saint Francis Hospital's Controls to Ensure Accuracy of Wage Data Used for Calculating Inpatient Prospective Payment System Wage Indexes

EXECUTIVE SUMMARY:

The objective of our review was to determine whether Saint Francis Hospital (the hospital) complied with Medicare requirements for reporting wage data in its fiscal year (FY) 2003 Medicare cost report.  The hospital did not fully comply with Medicare requirements for reporting wage data in its FY 2003 Medicare cost report.  The hospital overstated its salaries by $310,562 and understated its hours by 10,940. 

We recommended that the hospital (1) submit a revised FY 2003 Medicare cost report to the fiscal intermediary and (2) implement review and reconciliation procedures to ensure that the wage data reported on future Medicare cost reports are accurate, supportable, and in compliance with Medicare requirements.  The hospital concurred with four of our findings, but disagreed with our finding on unfunded pension and postretirement benefit costs.