Hospital Executive Pay Caps to Be Studied for Medicare Cost Impact

FierceHealthFinance.com is reporting that the HHS Office of the Inspector General has included an examination of hospital executive salaries in its 2014 work plan. This is the work plan description for the project:

“We will review data from Medicare cost reports and hospitals to identify salary amounts included in operating costs reported to and reimbursed by Medicare. We will determine the potential impact on the Medicare Trust Fund if the amount of employee compensation that could be submitted to Medicare for reimbursement on future cost reports had limits. Context—Employee compensation may be included in allowable provider costs only to the extent that it represents reasonable remuneration for managerial, administrative, professional, and other services related to the operation of the facility and furnished in connection with patient care. (CMS’s Provider Reimbursement Manual, Part 1, Pub. No. 15-1, Ch. 9 § 902.2.) Medicare does not provide any specific limits on the salary amounts that can be reported on the hospital cost report.”

The study is currently underway with results to be released in FY2015.

Sources:

Shinkman R. OIG to examine hospital executive pay caps; study will determine how measure impacts Medicare cost reports. FierceHealthFinance.com, Feb. 13, 2014. http://www.fiercehealthfinance.com/story/oig-examine-hospital-executive-pay-caps/2014-02-13

Office of the Inspector General. Work plan for fiscal year 2014. US Dept. of Health and Human Services, undated, pg 18 [as numbered in pdf format]. http://oig.hhs.gov/reports-and-publications/archives/workplan/2014/Work-Plan-2014.pdf

Posted by AHA Resource Center (312) 422-2050, rc@aha.org