Audit 12146

2023-001 Programs: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution CFDA Number: 93.498 Federal Agencies: U.S. Department of Health and Human Services Passed-Through Entities: N/A Award Number: N/A Award Year: Various Compliance Requirement: Reporting Questioned Costs: None Criteria: As required by the Provider Relief Fund Distributions and American Rescue Plan Rural Distribution Post-Payment Notice of Reporting Requirements, when referring to revenues from patient care for the purposes of the calculation of lost revenues attributable to COVID-19 patient care was defined as: ““Patient care” means health care, services, and supports, as provided in a medical setting, at home/telehealth, or in the community. It should not include non-patient care revenue such as insurance, retail, or real estate revenues (exception for nursing and assisted living facilities’ real estate revenues where resident fees are allowable); prescription sales revenues (exception when derived through the 340B program); grants or tuition; contractual adjustments from all third-party payors; charity care adjustments; bad debt; and any gains and/or losses on investments.” Condition and Context: The Medical Center elected to use the Lost Revenues Reporting Method of comparing 2019 actual revenue to 2020-2022 actual revenue. When preparing the calculation, the Medical Center excluded certain reimbursement settlement accounts during 2020-2021. This was corrected beginning January 2022 and forward, but previous quarters were not adjusted. Cause: The Medical Center erroneously omitted the related settlement general ledger accounts when financial data by the payor was compiled for the lost revenue calculations for 2020 and 2021. Effect: The Medical Center has misstated the lost revenues when reporting the revenues within the Health Resources and Services Administration ("HRSA") reporting portal. However, the Medical Center does have sufficient expenditures and eligible lost revenues to recognize all funding received in the reporting period. Recommendation: Management should adjust the internal lost revenue calculations to address the item noted above. In the event the Medical Center receives a request from the federal agency or another party to audit the use of the funds, the most accurate and up-to-date information should be available to support the use of the funds. View of Responsible Official: The Medical Center agrees with this finding.

2023-002 Programs: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution CFDA Number: 93.498 Federal Agencies: U.S. Department of Health and Human Services Passed-Through Entities: N/A Award Number: N/A Award Year: Various Compliance Requirement: Allowable Costs / Cost Principles Questioned Costs: None Criteria: The terms and conditions of the Provider Relief Fund state that funds are not to be used to reimburse expenses or lost revenue that have been reimbursed from other sources or that other sources are obligated to reimburse. Condition and Context: During the process of identifying expenses that were incurred to prevent, prepare for or respond to the COVID-19 pandemic during Reporting Periods 1-3, the Medical Center accumulated expenses related to prescription drugs used to treat COVID-19 patients. However, the cost of the prescription drugs was not reduced by amounts reimbursable from other sources, specifically reimbursed through third-party payors. Cause: The Medical Center incurred significant costs when treating COVID-19 patients that was not fully reimbursed through third-party payors. However, management reported in the HRSA reporting portal during Reporting Periods 1-3 the full amount of the costs of the prescription drugs used to treat COVID-19 patients, including portions that were reimbursed through third-party payors instead of performing an analysis and claiming only the incremental cost related to COVID-19 treatments that were in excess of the reimbursed amounts. Effect: Expenses reported in the PRF reporting portal during Reporting Periods 1-3 were not reduced by amounts reimbursable from other sources, specifically reimbursements received from third-party payors. However, the Medical Center does have sufficient other expenditures and eligible lost revenues to recognize all funding received in the reporting period. Recommendation: We noted that management discontinued capturing prescription drugs as reimbursable expenses under the Provider Relief Fund during Reporting Period 4. However, the lost revenue calculations were not adjusted to deduct the unallowable costs to avoid reimbursement for the same expenses or lost revenue. We recommend that management update the internal calculation of lost revenues to deduct the unallowable costs to demonstrate and support that there is no reimbursements for the same expenses or lost revenue. In the event the Medical Center receives a request from the federal agency or another party to audit the use of the funds, the most accurate and up-to-date information should be available. View of Responsible Official: The Medical Center agrees with this finding.

2023-001 Programs: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution CFDA Number: 93.498 Federal Agencies: U.S. Department of Health and Human Services Passed-Through Entities: N/A Award Number: N/A Award Year: Various Compliance Requirement: Reporting Questioned Costs: None Criteria: As required by the Provider Relief Fund Distributions and American Rescue Plan Rural Distribution Post-Payment Notice of Reporting Requirements, when referring to revenues from patient care for the purposes of the calculation of lost revenues attributable to COVID-19 patient care was defined as: ““Patient care” means health care, services, and supports, as provided in a medical setting, at home/telehealth, or in the community. It should not include non-patient care revenue such as insurance, retail, or real estate revenues (exception for nursing and assisted living facilities’ real estate revenues where resident fees are allowable); prescription sales revenues (exception when derived through the 340B program); grants or tuition; contractual adjustments from all third-party payors; charity care adjustments; bad debt; and any gains and/or losses on investments.” Condition and Context: The Medical Center elected to use the Lost Revenues Reporting Method of comparing 2019 actual revenue to 2020-2022 actual revenue. When preparing the calculation, the Medical Center excluded certain reimbursement settlement accounts during 2020-2021. This was corrected beginning January 2022 and forward, but previous quarters were not adjusted. Cause: The Medical Center erroneously omitted the related settlement general ledger accounts when financial data by the payor was compiled for the lost revenue calculations for 2020 and 2021. Effect: The Medical Center has misstated the lost revenues when reporting the revenues within the Health Resources and Services Administration ("HRSA") reporting portal. However, the Medical Center does have sufficient expenditures and eligible lost revenues to recognize all funding received in the reporting period. Recommendation: Management should adjust the internal lost revenue calculations to address the item noted above. In the event the Medical Center receives a request from the federal agency or another party to audit the use of the funds, the most accurate and up-to-date information should be available to support the use of the funds. View of Responsible Official: The Medical Center agrees with this finding.

2023-002 Programs: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution CFDA Number: 93.498 Federal Agencies: U.S. Department of Health and Human Services Passed-Through Entities: N/A Award Number: N/A Award Year: Various Compliance Requirement: Allowable Costs / Cost Principles Questioned Costs: None Criteria: The terms and conditions of the Provider Relief Fund state that funds are not to be used to reimburse expenses or lost revenue that have been reimbursed from other sources or that other sources are obligated to reimburse. Condition and Context: During the process of identifying expenses that were incurred to prevent, prepare for or respond to the COVID-19 pandemic during Reporting Periods 1-3, the Medical Center accumulated expenses related to prescription drugs used to treat COVID-19 patients. However, the cost of the prescription drugs was not reduced by amounts reimbursable from other sources, specifically reimbursed through third-party payors. Cause: The Medical Center incurred significant costs when treating COVID-19 patients that was not fully reimbursed through third-party payors. However, management reported in the HRSA reporting portal during Reporting Periods 1-3 the full amount of the costs of the prescription drugs used to treat COVID-19 patients, including portions that were reimbursed through third-party payors instead of performing an analysis and claiming only the incremental cost related to COVID-19 treatments that were in excess of the reimbursed amounts. Effect: Expenses reported in the PRF reporting portal during Reporting Periods 1-3 were not reduced by amounts reimbursable from other sources, specifically reimbursements received from third-party payors. However, the Medical Center does have sufficient other expenditures and eligible lost revenues to recognize all funding received in the reporting period. Recommendation: We noted that management discontinued capturing prescription drugs as reimbursable expenses under the Provider Relief Fund during Reporting Period 4. However, the lost revenue calculations were not adjusted to deduct the unallowable costs to avoid reimbursement for the same expenses or lost revenue. We recommend that management update the internal calculation of lost revenues to deduct the unallowable costs to demonstrate and support that there is no reimbursements for the same expenses or lost revenue. In the event the Medical Center receives a request from the federal agency or another party to audit the use of the funds, the most accurate and up-to-date information should be available. View of Responsible Official: The Medical Center agrees with this finding.