Federal gumshoes will be turning their investigative eyes to hospital sales to determine if Medicare is being shorted on its share of profits.
The strategy was outlined in a report last week on the work plans of the HHS inspector general's office for 1997.
The office also intends to focus on hospital skilled-nursing facilities to determine if patients are being transferred to SNFs to maximize Medicare reimbursements.
The report details 16 separate areas of review relating to hospitals, five relating to long-term-care providers, four to physicians and 14 in the area of Medicare managed-care plans.
The decision to review the sale of hospitals comes at a time when state officials also are asking questions about the value of hospitals and other healthcare organizations that convert from not-for-profit to for-profit status. In addition, two recent reports indicate hospital closures are on the rise, in part because hospitals or systems are buying facilities and then closing them (See story, this page).
According to the inspector general's work plan, "concerns have been raised that sales are being artificially structured to report losses or to minimize profits."
Under current law, Medicare shares in profits or losses for any amount over the original value of the hospital less the value of depreciation. The process is known as "recapture."
Donald Yesukaitis, a partner with the consulting firm Arthur Andersen in Washington, said the issue "has come up on (the inspector general's) radar screens because of the pace at which consolidations are occurring."
The SNF issue has been the subject of congressional hearings. According to the inspector general, "hospitals are thought to be collecting fixed prospective payment system payments for a treatment period as short as possible and then transferring patients to their own SNFs to collect additional cost-based reimbursement."
Other areas of review by the inspector general's office include:
A continuation of the review of teaching hospitals relating to billing by supervising physicians.
Outpatient services provided to patients within 72 hours of admission. Under Medicare rules, all services provided within a 72-hour window of admission are to be included in the inpatient payment.
An expansion of a Florida investigation into the use of unallowable or fraudulent billing codes by nursing homes. Five more states will be scrutinized.
Whether home health agencies are maximizing reimbursements by locating billing sites in high-reimbursement areas.