The HHS Office of Inspector General is evaluating whether caps on hospital executive salaries and compensation could offer substantial Medicare savings.
According to the OIG's 2014 Work Plan, released last month, government health officials will review hospital data and Medicare cost reports to determine how executive salaries fall within the organization's operating costs. Hospitals can include executive compensation in their provider cost reports, reimbursable by Medicare, but that compensation must be "reasonable remuneration for managerial, administrative, professional and other services related to the operation of the facility and furnished in connection with patient care," according to the OIG.
Medicare does not have limits on how much of an executive's salary can be included in hospital cost reports. By 2015, the OIG expects to release information on how salaries are included in hospital cost reports and if reportable compensation will have caps.
Hospital executive compensation has been one of the most highly discussed topics in the healthcare sector during the past few years. The feds are not alone in their scrutiny, as several state governments, like Massachusetts and New Hampshire, have put executive pay under the microscope.
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