Medicaid overpaid Chattanooga’s Orange Grove Center by nearly $200,000, state audit finds

NASHVILLE — A new audit from the Tennessee Comptroller has eight findings about Medicaid costs and other issues at Orange Grove Center, the nearly 70-year-old Chattanooga nonprofit that serves adults and children with intellectual and developmental disabilities.

Auditors estimate that as a result, the state Medicaid program overpaid the facility by $197,282 from October 1, 2020 through September 30, 2021. The result is that the center will see lower Medicaid reimbursements for a period of time to repay the state Medicaid program.

Officials involved in the review told the Times Free Press that the findings — key ones include questions about allowable spending, underreporting of Medicaid days for clients, and the resulting impact on daily reimbursement rates. – are not unusual.

No allegation of willful misconduct was made by the auditors.

“To be frank with you, these are common findings in long-term care facilities,” Regina Robinson, accountant in charge of the audit, told The Times Free Press in a telephone interview Thursday. “There was nothing particularly unusual here that you don’t find at other facilities.”

Orange Grove offers residential services that include supportive housing, rehabilitation residences and intermediate care facilities for people, many of whom have developmental disabilities.

Asked about the audit, the center’s director of development, Heidi Hoffecker, said in a phone interview that “these are auditors, and we understand that the public and the government have a right to account for how dollars are spent Orange Grove is doing the best that we do just as we are supposed to do these things.

“We agreed with some of their conclusions. And we didn’t necessarily entirely agree with some of their other conclusions.”

In one of their key findings, the auditors said Orange Grove included $72,922 in ineligible expenses in its Medicaid cost report.

This included $32,642 of non-patient care costs and an additional $15,115 of unsupported costs as well as $15,195 of “unsupported amortization expenses”.

The center said in its response: “Expenses reflect reimbursements [Intermediate Care Facility] expenses, but some receipts were not sufficient because they were handwritten, faded or could not be found.”

Hoffecker said many of the receipts the center receives to document expenses are heat-treated and can fade over the course of a year if they’ve been highlighted or taped over. She said if a receipt was issued in 2019 and included in a 2021 report, it might not be easily read.

“We are not going to accept that we charge this expense inappropriately,” Hoffecker said. “We’ll agree you can’t read it, so you’ll reject it. But we’re not going to say it was inappropriate.”

Another finding is that Orange Grove underreported 292 Medicaid days in 2020. Of that number, 219 were paid vacation days that were inadvertently omitted, while auditors said an additional 73 days were found in the census report, but the facility did not include them on its cost report.

The auditors said the center should maintain an “adequate system” for reporting and accounting for resident days while providing adequate and accurate statistical data needed to properly report on Medicaid costs.

Orange Grove did not dispute this, noting in its written response that there had been a “miscalculation [that] resulted in an error in the cost report, and we have corrected the calculations for the year ended June 30, 2021.”

Some of the state’s questions were about Medicaid funding and fees for clients who end up being transferred to hospitals.

“If you think about it very fundamentally, you would take your program costs and divide them by days, so the fewer the days, the more cost would be allocated to each day,” Robinson said. “So if they didn’t allocate enough days, which they didn’t in this case, it would increase the cost per day. So that’s basically how it happened. They didn’t haven’t reported enough days.”

Another finding was that Orange Grove had not maintained a bond on behalf of the resident trust fund. He had a “dishonesty bond” of $25,000 to pay for loss or damage to money, securities or property suffered in the event of theft by an identified employee. But auditors say it does not adequately cover the average daily Trust Balancing balance totaling nearly $1 million in August 2021.

In its response, Orange Grove said it was unaware the bond needed to be higher, but noted that “we got the extra bond.”

Another ding was that Orange Grove did not deposit excess funds from or on behalf of a resident into an interest-bearing account. The band said this was new to them but they would fix it.

Another finding involved having five resident trust fund balances in excess of the $2,000 Medicaid resource limit. Orange Grove said it will ensure they no longer go over the limit or that the group will not bill the Medicaid program for services rendered.

And auditors questioned the billing of $1,977 for three days of hospital leave while operating below the 85% occupancy requirement for the period at one of his group homes. The center said it was the result of a clerical error and a ‘reminder’ was sent to employees about the importance of accurate attendance records.

Contact Andy Sher at [email protected] or 615-255-0550. Follow him on Twitter @AndySher1.

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