Examination – Fiscal Year Ended June 30, 2022

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Report Summary

Background

The Office of Auditor of Accounts (AOA) presents an examination of the Disproportionate Share Hospital (DSH) Payments Program for the Delaware Psychiatric Center and the Saint Francis Hospital facility for the fiscal year ended June 30, 2022 including internal controls over financial reporting and tests of its compliance with certain provisions of laws, regulations, contracts, and grants.  

For states to receive Federal Financial Participation for DSH payments, federal law requires states to submit an independent certified audit and an annual report to the Secretary describing DSH payments made to each DSH hospital.

The State of Delaware, Department of Health and Social Services (DHSS), Division of Medicaid and Medical Assistance (DMMA) administers the Disproportionate Share Hospital (DSH) payments to qualifying hospitals that serve a large number of Medicaid eligible and uninsured individuals. This program is regulated by the federal government. The States that receive federal funding must certify on an annual basis that they are in compliance with the six verifications under the federal regulations 42 CFR, Parts 447 and 455 and meet the requirements of the State of Delaware’s Medicaid State Plan Section 4.19A. Management of the Program are responsible for complying with these requirements including design, implementation, and maintenance of internal controls.

This examination engagement was conducted in accordance with attestation standards established by the American Institution of Certified Public Accountants and Government Audit Standards issued by the Comptroller General of the United States of America. 

This engagement was conducted in accordance with 29 Del. C. §2906.

Key Information and Findings

The Disproportionate Share Hospital (DSH) Payments Program for the Delaware Psychiatric Center and the Saint Francis Hospital facility have complied, in all material respects, with the above-mentioned criteria therefore receiving a clean opinion.

However, the audit did find a deficiency in internal control over financial reporting resulting in the following:

1. The errors resulted in a decrease in the Medicaid bed days from 9,076 to 8,863 (as corrected).
2. The errors resulted in an increase in the total annual inpatient days from 28,321 to 28,501 (as corrected). 

The report used by DPC to calculate Medicaid inpatient days contained patients that were not present at the facility during the time covered by the report. DPC management was unable to determine the cause of this error and manually reconstructed the report at the Auditor’s request.