Debate Over Federal Hospital Funding Could Cost Kern Medical Center $14.2M
A debate over the way California runs a federal program to reimburse hospitals that care for a significant portion of indigent patients could result in Kern Medical Center repaying the federal government $14.2 million, the Bakersfield Californian reports. The debate centers on the formula the state uses to distribute funds from the federal disproportionate share hospital program, which provides additional funds to private hospitals that provide uncompensated care to indigent patients. The HHS Office of Inspector General has been auditing hospitals that receive funds through the program. Last month, federal officials released an audit of KMC for fiscal year 1998 that found that the hospital had been overpaid by $38.7 million and owed the federal government $14.2 million. Peter Bryan, CEO of KMC, said that federal inspectors used a "completely different set of rules" in their audit than the state-mandated rules the hospital followed. "We're doing everything according to the state plan as it has been approved by the federal government," Kern County Supervisor Barbara Patrick said. Stan Rosenstein, assistant deputy director for the state Department of Health Services, said that the state formula "has its faults" but argued that the federal government approved the formula on "several occasions" and "doesn't have the right to retroactively change its mind," the Californian reports. The OIG would not comment on the audit but has "stood by its report" and is recommending the federal government collect the full $14.2 million from KMC. Officials at CMS, which runs the federal program, will make the final decision on whether KMC must repay the federal government. According to the Californian, CMS officials have not commented on what action the agency plans to take. In addition to KMC, several other California hospitals are being targeted by the OIG audits, according to state officials (Terwilleger, Bakersfield Californian, 10/23).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.