Review of Condell Medical Center'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 Condell Medical Center (the hospital) complied with Medicare regulations and guidance for reporting wage data in its FY 2003 Medicare cost report.  We found that the hospital did not fully comply with Medicare regulations and guidance for reporting wage data in its FY 2003 Medicare cost report.  Specifically, the hospital reported wage data that included: (1) total salaries without related hours in the amount of $34,881; (2) overstated total hours of 3,322; (3) overstated total hours of 14,488 attributable to excluded cost centers; and (4) understated wage-related benefit core costs totaling $251,798.  These errors occurred because the hospital did not sufficiently review and reconcile wage data to ensure that all amounts reported were accurate and supportable, and in compliance with Medicare regulations and guidance.  We recommended that the hospital: (1) revise the FY 2003 cost report to reflect the understated salary wage data by $216,917 and overstated hours by 17,810 and (2) strengthen financial reporting controls by implementing procedures to ensure that the wage data reported on the hospital's Medicare cost report are accurate and supportable, and in compliance with Medicare regulations and guidance.  The hospital concurred with the findings presented in the report.