State audit finds 2 East Tennessee nursing homes overcharged residents

KNOXVILLE, Tenn. (WATE) - A state audit of two East Tennessee nursing homes found the facilities inappropriately charged residents for Medicaid-covered services.

The Tennessee Division of State Audit examined Summit View of Rocky Top and Summit View of Farragut and found several discrepancies in their billing.

According to the report filed May 25, the 134-bed Rocky Top facility included $48,978 of nonallowable expenses on their cost report for the 2011-212 fiscal year. Because they included these expenses, the Medicaid Program overpaid the facility an estimated $15,579.

Additionally, the audit found Medicaid residents were charged for haircuts, totaling $1,784 for 55 residents. Haircuts are covered by Medicaid.

The facility also found other discrepancies, including the improper management of credit balances, improper billing of resident leave days and a failure to safeguard Medicaid residents' trust funds.

In total, the Rocky Top facility owes $16,971 to the state and $2,467 to its residents.

At the Farragut facility, which has 113 beds, auditors found the facility had overcharged 76 Medicaid residents a total of $5,106 for haircuts. In addition, the facility included $48,595 of nonallowable expenses on their FY 2011-2012 report, resulting in an overpayment of $3,321.

The report also found the nursing home failed to properly safeguard Medicaid residents' trust funds.

The facility must repay $3,321 to the state and $5,106 to residents.