Review of Vendor Rebates Paid to Hospitals - Grandview Hospital, Dayton, Ohio

EXECUTIVE SUMMARY:

The objective of our review was to determine whether Grandview Hospital (the provider) reduced costs reported on its fiscal year 2003 Medicare cost report by the $15,468 it received for two vendor rebates. Of the $15,468 in rebates, the provider did not reduce costs reported on its fiscal year 2003 cost report by $5,732 for one of the two rebates, contrary to Federal regulations and Centers for Medicare and Medicaid Services guidance. 

We recommended that the provider (1) revise and resubmit its 2003 Medicare cost report, if not already settled, to properly reflect the $5,732 rebate as a credit reducing its health care costs; and (2) consider performing a self-assessment of its internal controls to ensure that future vendor rebates are properly credited on its Medicare cost reports. The provider agreed with our recommendations.