NASHVILLE - A new Tennessee comptroller's audit contains eight findings with regard to Medicaid charges and other issues at Orange Grove Center, the nearly 70-year-old nonprofit Chattanooga organization that serves adults and children with intellectual and developmental disabilities.
Auditors estimate as a result, the state's Medicaid program overpaid the facility by $197,282 from Oct. 1, 2020, through Sept. 30, 2021. The result is the center will see lower Medicaid reimbursements for a time to repay the state's Medicaid program.
Officials involved with the examination told the Times Free Press that the findings - the main ones include questions about allowable expenses, under-reporting of Medicaid days for clients and the resulting impact on daily reimbursement rates - aren't unusual.
No allegations of intentional wrongdoing were made by auditors.
"To be frank with you, these are common findings in long-term care facilities," Regina Robinson, an accountant who was manager of the audit, told the Times Free Press in a telephone interview Thursday. "There was nothing particularly unusual here that you don't find in other facilities."
Orange Grove provides residential services that include supported living, residential rehabilitation and intermediate care facilities for individuals, many of whom have intellectual disabilities.
Asked about the audit, the center's director of development, Heidi Hoffecker, said in a phone interview that "they're auditors, and we understand that the public and government is entitled to accountability for how dollars are spent. Orange Grove does its very best that we do everything the way we're supposed to do those things.
"We did concur with some of their findings. And we didn't necessarily completely agree with some of their other findings."
In one of their main findings, auditors said Orange Grove included $72,922 of nonallowable expenses on its Medicaid cost report.
That included $32,642 in costs unrelated to patient care and another $15,115 in unsupported costs as well as $15,195 in "unsupported depreciation expense."
The center said in its response, "Expenses did reflect reimbursable [Intermediate Care Facility] costs, but some receipts were not sufficient because they were handwritten, faded or could not be located."
Hoffecker said many of the receipts the center gets to document expenditures are heat treated and can fade over the course of a year if they have been highlighted or have tape covering them. She said if a receipt was issued in 2019 and it's included in a 2021 report, it may wind up not being easily read.
"We're not going to agree we were charging that expense improperly," Hoffecker said. "We will agree that you can't read it, so you're going to disallow it. But we're not going to say it was improper."
Another finding was that Orange Grove underreported 292 Medicaid days in 2020. Of that number, 219 were paid leave days that were inadvertently omitted, while auditors said another 73 additional days were found on the census report, but the facility failed to include them on its cost report.
Auditors said the center should maintain an "adequate system" to report and account for resident days while providing adequate and accurate statistical data needed for proper completion of its Medicaid cost report.
Orange Grove didn't take issue with that, noting in its written response there had been a "mistaken calculation [that] resulted in a cost report error, and we have corrected calculations for the fiscal year ended June 30, 2021."
Some of the state's questions involved Medicaid funding and charges for clients who wind up being transferred to hospitals.
"If you think about it very basically, you would take your costs of the program and divide it by the days, so the fewer days the more cost that 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 make it inflated cost per day. So that's basically how that came to be. They didn't report enough days."
Another finding was that Orange Grove failed to maintain a surety bond for the resident trust fund account. It did have a $25,000 "dishonesty bond" to pay for loss of or damages to money, securities or property loss sustained in the event of theft by an identified employee. But auditors say it doesn't adequately cover the average daily balance of the trust balancing 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 have obtained the additional surety bond."
Another ding was that Orange Grove didn't deposit funds in excess coming from a resident or on behalf of a resident in an interest-bearing account. The group said that was new to them but would correct that.
Yet another finding involved having five resident trust fund balances exceeding the Medicaid Resource Limit of $2,000. Orange Grove said it will ensure they no longer exceed the limit or the group will not bill the Medicaid program for services rendered.
And auditors questioned the billing of $1,977 for three hospital leave days while operating below the 85% occupancy requirement for the period at one of its group homes. The center said it was the result of a clerical error and a "reminder" was issued to employees on the importance of accurate attendance records.
Contact Andy Sher at email@example.com or 615-255-0550. Follow him on Twitter @AndySher1.