Florida Medicaid Paid Hundreds of Millions in Unallowable Payments to Jackson Memorial Hospital Under Its Low Income Pool Program

Submitting OIG:

Department of Health & Human Services OIG

Report Description:

As part of its Research and Demonstration Waiver for Medicaid reform (the waiver), Florida established the Low Income Pool (LIP) program to compensate hospitals for providing care to low-income patients. During State fiscal years (SFYs) 2010 through 2014, hospitals received a total of $5.1 billion in LIP funds. Jackson Memorial Hospital (the Hospital) received $1.8 billion of this total.

Date Issued:

Friday, August 30, 2019

Agency Reviewed / Investigated:

Department of Health & Human Services

Submitting OIG-Specific Report Number:

A-04-17-04058

Component, if applicable:

Centers for Medicare & Medicaid Services

Location(s):

Agency-Wide

Type of Report:

Audit

Questioned Costs:

$411,932,576

Number of Recommendations:

View Document:

Attachment	Size
41704058.pdf	4.32 MB

Additional Details Link:

https://oig.hhs.gov/oas/reports/region4/41704058.asp

Recommendation Number	Recommendation Status	Significant Recommendation
267354	Open	No
We recommend that the State agency refund $411,932,576 to the Federal Government, consisting of: o $64,382,543, representing the Federal share of net Hospital self-reported LIP overpayments for the audit period and o $347,550,033, representing the Federal share of LIP cost limits calculated by the Hospital that did not comply with Federal and State requirements as identified in this audit.
267361	Open	No
We recommended that the State agency revise its LIP instruction manual to instruct participant hospitals to perform the following steps when preparing the LIP cost-limit calculations: o exclude the cost of non-emergency care for undocumented aliens; o exclude the cost of caring for prisoners in other than an inpatient setting; o review section 6 costs for allowability based on the RFMD; o distribute low-income patient days and ancillary charges to cost centers consistent with the Medicare cost report; o review the calculations for clerical errors and ensure that they exclude noncompliant items; and o reduce calculated costs by all payments received including: ¿- Medicaid payments that do not relate to specific claims; ¿- the portion of Medicare cost report settlements, direct graduate medical education, bad debts, and organ acquisition cost payments that relate to Medicare dual-eligible patients.
267362	Open	No
We recommended the State agency improve its oversight of the LIP program by establishing policies and procedures for: o providing additional training to its staff members on the RFMD and STCs for the waiver; o providing training to participating hospital personnel on LIP program compliance and preparing the cost-limit calculations; and o monitoring hospital LIP calculations to verify that they comply with the RFMD and STCs including: ¿- reconciling hospital cost-limit calculations to the finalized Medicare cost reports; ¿- reviewing hospital low-income data to verify that it does not include data for undocumented aliens; ¿- reviewing hospital low-income data to verify that it does not include data for prisoners in other than an inpatient setting; ¿- testing or verifying the accuracy and completeness of the data being used by hospitals in their LIP cost-limit calculations; ¿- reviewing hospital cost-limit calculations to verify that the hospitals properly incorporate observation days and charges into the calculations, as prescribed by the RFMD; ¿- reviewing organ acquisition costs to verify that hospitals use the RFMD-required methodology and to verify the accuracy of the data used in the calculations; ¿- establishing electronic edits in the cost-limit calculation template to detect distribution errors in which low-income costs exceed total costs for individual cost centers; and ¿- reviewing section 6 costs claimed by hospitals to verify allowability based on the RFMD.

Recommendation Number

Recommendation Status

Significant Recommendation

Additional Details

267354

Open

We recommend that the State agency refund $411,932,576 to the Federal Government, consisting of: o $64,382,543, representing the Federal share of net Hospital self-reported LIP overpayments for the audit period and o $347,550,033, representing the Federal share of LIP cost limits calculated by the Hospital that did not comply with Federal and State requirements as identified in this audit.

267361

Open

We recommended that the State agency revise its LIP instruction manual to instruct participant hospitals to perform the following steps when preparing the LIP cost-limit calculations: o exclude the cost of non-emergency care for undocumented aliens; o exclude the cost of caring for prisoners in other than an inpatient setting; o review section 6 costs for allowability based on the RFMD; o distribute low-income patient days and ancillary charges to cost centers consistent with the Medicare cost report; o review the calculations for clerical errors and ensure that they exclude noncompliant items; and o reduce calculated costs by all payments received including: ¿- Medicaid payments that do not relate to specific claims; ¿- the portion of Medicare cost report settlements, direct graduate medical education, bad debts, and organ acquisition cost payments that relate to Medicare dual-eligible patients.

267362

Open