Federal Reports

Our review determined that the purchase card program does not pose a high risk to the Department and an audit of the program was not necessary. We found that the Department has policies and procedures that address applicable purchase card internal control requirements. We also noted that the Department has adequate monitoring procedures to reduce the risk that illegal, improper, or erroneous purchases are made within its purchase card program. Further, we found that the Department implemented our suggestions from prior assessmentsto coordinate with its Office of Human Resources regarding the required reporting of data to the Office of Management and Budget on disciplinary actions.

Vidant Medical Center (the Hospital), in Greenville, North Carolina, complied with Medicare billing requirements for diagnosis codes 261 and 262 for 11 of the 100 claims that we reviewed. However, the Hospital did not comply with Medicare billing requirements for the remaining 89 claims. For two of these claims, the medical record documentation supported a secondary diagnosis code other than 261 or 262, but the error resulted in no change to the diagnosis-related group or payment. For the remaining 87 claims, the billing errors resulted in net overpayments of $402,000. These errors occurred because the Hospital used diagnosis code 261 or 262 when it should have used codes for other forms of malnutrition or no malnutrition diagnosis code at all. On the basis of our sample results, we estimated that the Hospital received overpayments of at least $1.4 million over 2 1/2 years.