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093180 1 (1971-02-01)

handle is hein.gao/gaobacxaz0001 and id is 1 raw text is: 




             UNITED STATES GENERAL  ACCOUNTING OFFICE
                         REGIONAL  OFFICE
                  ROOM 1903 JOHN P KENNEDY FEDERAL BUILDING
                          GOVERNMENT CENTER
                    BOSTON, MASSACHUSETTS 02203


                                            February  1, 1971

Mr  Millard P  Nute
Regional Representative, Bureau of Health Insurance
Social Security Administration
Department of Health, Education, and Welfare
Boston, Massachusetts, 02203

Dear Mr  Nute

     In order to ascertain the manner in which Massachusetts Blue
Cross, a fiscal intermediary under the provisions of Title XVIII
of the Social Security Act, has been determining the reasonable-
ness of cost of hospital services furnished to Medicare patients,
we reviewed the procedures and practices used by Blue Cross in
arriving at final settlements with hospitals and audited the
statements of reimbursable costs of three selected hospitals
Questions raised during our review of the cost statements for
two of the selected hospitals, the Mount Auburn Hospital and the
Cambridge Hospital, were discussed in our letter to you dated
March 10, 1970

     This letter is to advise you of certain questionable cost
items found during our review of the cost statements of the
Massachusetts General Hospital  (MGH) in Boston, Massachusetts,
for the year ended September 30, 1967   Based on our examination
of hospital documents and records and the Blue Cross audit work-
papers, we believe that costs charged to the Medicare program
totaling about $319,600 appear to be questionable

     The MGH is a privately incorporated non-profit teaching
hospital that receives funds for patient care from patients and
from third-party insurers, both governmental and commercial   The
hospital also receives funds through Government research grants
and private contributions and endowments.  About 27 percent of
MGH costs are related to research and other non-patient care
activities

     MGH has about 1,070 beds   For the fiscal year ended September 30,
1967, the hospital reported 367,874 inpatient days of which 108,021
or about 29 percent were for Medicare patients   The cost statement
submitted by MGH for the same period showed net costs applicable
to Medicare patients of about $7 7 million.  The net effect of
adjustments made by the Blue Cross audit staff together with the
use of later statistical data resulted in increased costs of about
$200,000 as follows




                     50TH  ANNIVERSARY   1921-1971

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