EXECUTIVE SUMMARY:
This final audit report points out that, based on a statistical sample, the New Center claimed an estimated $1.1 million for partial hospitalization program (PHP) services to Medicare patients that were not reasonable, necessary, or appropriate for the patients' conditions as determined by medical review personnel, and $71,478 for noncovered items in its Fiscal Year 1997 cost report. We recommended financial adjustments totaling approximately $1.2 million. We also recommended that New Center work with the fiscal intermediary to: (1) establish policies to ensure that PHP services provided to Medicare beneficiaries meet Medicare requirements, and (2) establish nonreimbursable cost centers or otherwise exclude costs related to noncovered items from its cost reports.