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089413 1 (1971-12-22)

handle is hein.gao/gaobacvkb0001 and id is 1 raw text is: 'UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 LM089413 CIVIL DIVISION December 22, 1971 Dear Mr. Ball: We have made a review of the reasonableness of selected(Medicare cost reimbursements to extended care facilities_(ECPV) in the State of New York During the review we examined into the extent that ECFs rent their facilities from organizations in which their owne'rs or administrators have a financial or other interest. We also examined into the adequacy of the intermediary's application of the Medicare reimbursement principle pertaining to related organizations. We noted that: t --some degree of relationship existed between the ECFs and the lessors of four of eight facilities included in our test, and --the Social Security Administration's guidelines for determining whether a relationship exists between a provider and a seller or renter of goods or services did not appear to be sufficiently definitive to assure uniform treatment of situations involving apparent affiliated relationships. MEDICARE REIMBURSEMENT PRINCIPLE PERTAINING TO RELATED ORGANIZATIONS HEW Medicare reimbursement regulations (20 CFR 405.427(a)) provide that: ...Costs applicable to services, facilities, and supplies furnished to the provider by organizations related to the provider by common ownership or control are includible in the allowable costs of the provider at the cost to the related organization... The regulations go on to define related to the provider as meaning: ...that the provider to a significant extent is associated or affiliated with or has control of or is controlled by the organization furnishing the services,facilities or supplies. ...Control exists where an individual or an organization has the power, directly or indirectly, significantly to influence or direct the actions or policies of an organization or institution. (underscoring supplied) 50TH ANNIVERSARY 1921-1971

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