HHSOIG - A-04-17-04058 - 267361

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.