FAC Explorer

Audit 293955

FY End
2022-06-30
Total Expended
$1.32M
Findings
6
Programs
2
Organization: Maryland Emergency Medicine Network Inc. (MD)
Year: 2022 Accepted: 2024-03-07
Auditor: Rsm US LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
374349 2022-004 Significant Deficiency - L
374350 2022-003 Material Weakness - AE
374351 2022-005 Significant Deficiency - L
950791 2022-004 Significant Deficiency - L
950792 2022-003 Material Weakness - AE
950793 2022-005 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
93.498 Provider Relief Fund $1.07M Yes 1
93.461 Covid-19 Testing for the Uninsured $252,762 Yes 2

Contacts

Name Title Type
WRJAJCLTEQH6 Alain Viaud Auditee
6672142051 Matthew Hemelt Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. For the U.S. Department of Health and Human Services (HHS) awards related to the Provider Relief Fund program, HHS has indicated the amounts on the Schedule be reported corresponding to reporting requirements of the Health Resources and Services Administration (HRSA) Provider Relief Fund reporting portal. Payments from HHS for the Provider Relief Fund are assigned to ‘Payment Received Periods’ (each, a Period) based upon the date each payment from the Provider Relief Fund was received. Each Period has a specified period of availability and timing of reporting requirements. Entities report into the HRSA Provider Relief Fund reporting portal after each Period’s deadline to use the funds (i.e., after the end of the period of availability). The Schedule includes $1,070,320 received from HHS between July 1, 2020 through December 31, 2020. In accordance with guidance from HHS, these amounts are presented as Period 2. Such amounts were recognized as Other income in the Company’s financial statements during the year ended June 30, 2021, but are included in the Schedule for the period ended June 30, 2022 in accordance with HHS guidance. De Minimis Rate Used: N Rate Explanation: The Company has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Maryland Emergency Medicine Network, Inc. and Subsidiaries (the Company) under programs of the federal government for the year ended June 30, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Company, it is not intended to, and does not, present the financial position, results of operations, changes in net assets or cash flows of the Company.
Title: Subrecipients Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. For the U.S. Department of Health and Human Services (HHS) awards related to the Provider Relief Fund program, HHS has indicated the amounts on the Schedule be reported corresponding to reporting requirements of the Health Resources and Services Administration (HRSA) Provider Relief Fund reporting portal. Payments from HHS for the Provider Relief Fund are assigned to ‘Payment Received Periods’ (each, a Period) based upon the date each payment from the Provider Relief Fund was received. Each Period has a specified period of availability and timing of reporting requirements. Entities report into the HRSA Provider Relief Fund reporting portal after each Period’s deadline to use the funds (i.e., after the end of the period of availability). The Schedule includes $1,070,320 received from HHS between July 1, 2020 through December 31, 2020. In accordance with guidance from HHS, these amounts are presented as Period 2. Such amounts were recognized as Other income in the Company’s financial statements during the year ended June 30, 2021, but are included in the Schedule for the period ended June 30, 2022 in accordance with HHS guidance. De Minimis Rate Used: N Rate Explanation: The Company has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Company did not provide federal awards to any subrecipients.
Title: Federal Loans and Donated Personal Protective Equipment Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. For the U.S. Department of Health and Human Services (HHS) awards related to the Provider Relief Fund program, HHS has indicated the amounts on the Schedule be reported corresponding to reporting requirements of the Health Resources and Services Administration (HRSA) Provider Relief Fund reporting portal. Payments from HHS for the Provider Relief Fund are assigned to ‘Payment Received Periods’ (each, a Period) based upon the date each payment from the Provider Relief Fund was received. Each Period has a specified period of availability and timing of reporting requirements. Entities report into the HRSA Provider Relief Fund reporting portal after each Period’s deadline to use the funds (i.e., after the end of the period of availability). The Schedule includes $1,070,320 received from HHS between July 1, 2020 through December 31, 2020. In accordance with guidance from HHS, these amounts are presented as Period 2. Such amounts were recognized as Other income in the Company’s financial statements during the year ended June 30, 2021, but are included in the Schedule for the period ended June 30, 2022 in accordance with HHS guidance. De Minimis Rate Used: N Rate Explanation: The Company has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Company did not have any federal loan programs during the year ended June 30, 2022. The Company did not receive any donated Personal Protective Equipment during the year ended June 30, 2022.
Title: Summary of Significant Accounting Policies for Federal, State and Local Award Expenditures Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. For the U.S. Department of Health and Human Services (HHS) awards related to the Provider Relief Fund program, HHS has indicated the amounts on the Schedule be reported corresponding to reporting requirements of the Health Resources and Services Administration (HRSA) Provider Relief Fund reporting portal. Payments from HHS for the Provider Relief Fund are assigned to ‘Payment Received Periods’ (each, a Period) based upon the date each payment from the Provider Relief Fund was received. Each Period has a specified period of availability and timing of reporting requirements. Entities report into the HRSA Provider Relief Fund reporting portal after each Period’s deadline to use the funds (i.e., after the end of the period of availability). The Schedule includes $1,070,320 received from HHS between July 1, 2020 through December 31, 2020. In accordance with guidance from HHS, these amounts are presented as Period 2. Such amounts were recognized as Other income in the Company’s financial statements during the year ended June 30, 2021, but are included in the Schedule for the period ended June 30, 2022 in accordance with HHS guidance. De Minimis Rate Used: N Rate Explanation: The Company has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. For the U.S. Department of Health and Human Services (HHS) awards related to the Provider Relief Fund program, HHS has indicated the amounts on the Schedule be reported corresponding to reporting requirements of the Health Resources and Services Administration (HRSA) Provider Relief Fund reporting portal. Payments from HHS for the Provider Relief Fund are assigned to ‘Payment Received Periods’ (each, a Period) based upon the date each payment from the Provider Relief Fund was received. Each Period has a specified period of availability and timing of reporting requirements. Entities report into the HRSA Provider Relief Fund reporting portal after each Period’s deadline to use the funds (i.e., after the end of the period of availability). The Schedule includes $1,070,320 received from HHS between July 1, 2020 through December 31, 2020. In accordance with guidance from HHS, these amounts are presented as Period 2. Such amounts were recognized as Other income in the Company’s financial statements during the year ended June 30, 2021, but are included in the Schedule for the period ended June 30, 2022 in accordance with HHS guidance.

Finding Details

Finding 2022-004
Criteria: The Provider Relief Funds are required to be reported through the Required Relief Funds Reporting Portal and include key items for Provider Relief Fund expenses and calculation of lost revenues. Condition: While management’s calculation of lost revenues for 2020 was determined to be accurate, as the 2019 and 2020 reported numbers in the portal submission reconciled and agreed to the Company’s audited net revenue amounts for those periods, the calculation of lost revenues for 2021 was not accurate. The reported amounts of net revenue from fiscal year 2021 and fiscal year 2022 (partially from calendar year 2021) did not reconcile or agree to the audited amounts of net patient revenue from these periods. Effect: The reporting in the portal inaccurately reported total lost revenues for each subsidiary’s portal submission. However, there were no questioned costs, as the 2020 reported lost revenues that were determined to be accurate, exceeded any amounts received from the Provider Relief Fund in the period under audit, and the cumulative receipts of Provider Relief Funding in all periods. Cause: The Company’s reporting over patient service revenue that was utilized in the compilation of the portal submission was inaccurate, and did not agree to the final 2021 audited amounts. In addition, there was no evidence that a secondary member of management reviewed the information prior to its submission. Recommendation: We recommend that management implement procedures and controls to ensure that all reporting and submissions to federal agencies are accurate and are sufficiently reviewed by another member of management prior to the submission. Repeat finding: No Views of responsible officials and planned corrective actions: See attached letter. Reportable questioned costs: None
Finding 2022-003
Criteria: The HRSA COVID-19 Uninsured Program, ALN 93.461, allows for reimbursement for COVID-19 testing and testing-related items, as well as for COVID-19 treatment for individuals who were either uninsured or under-insured at the time services were rendered. The guidance for this program provides specific diagnostic coding and treatments that are allowable to be reimbursed under this program. Condition: HRSA’s website indicated that the Company had received $1,222,565 of funds under this program for the period from July 1, 2019 through June 30, 2022. However, management was initially unaware that they had received funding from this program and could not provide an underlying detail of the patient visits that were reimbursed under this program. Management worked with both of the Company’s third-party billing providers, and after several months, provided a detail from July 1, 2019 through June 30, 2022 that totaled $905,771, which resulted in an initial, unreconciled difference of $316,794. Further, during testing procedures of the billing detail provided, which consisted of a sample of 120 items, we noted 47 instances where the patient visits did not appear to meet the allowable activities under the program. As a result, we identified total factual misstatements of $14,578, which projected to additional misstatements of $411,291. Effect: Due to the initial detail variance and the projected misstatements from testing, an audit adjustment of $742,663 was recorded, which reduced net patient service revenue and recorded a liability back to HRSA. Cause: The staff of the Company oversees and administers physician services within the emergency departments of nine area hospitals. The hospitals' personnel are assigned the task of patient registration, ensuring the precise entry of patients' insurance data into the medical records system. Subsequently, an error occurred as some patients were inaccurately marked as eligible for the HRSA uninsured program by the hospital staff. Consequently, this led to unintended discrepancies in the submission of claim reimbursements by the Company's third-party billing vendors to the program, some of which were not in accordance with the related compliance regulations. Recommendation: We recommend that management implement procedures and controls to ensure that they are fully aware of all federal funds that are being received, and that the Company’s policies and corresponding activities are in accordance with the related federal compliance guidelines, including discussions with the local area hospitals. Repeat finding: No Views of responsible officials and planned corrective actions: See attached letter. Reportable questioned costs: None Views of responsible officials and planned corrective actions: See attached letter.
Finding 2022-005
Criteria: Under 45 CFR Part 75, the Uniform Guidance requires that audits are submitted by the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. Condition: The Company did not complete and submit their audit to the federal clearinghouse until February 2024. Effect: The late filing could potentially impact future funding from government agencies. Cause: Significant delays stemming from Finding 2022-003 related to the Uninsured Program caused the required audit procedures and the ultimate completion date to extend beyond the defined deadlines. Recommendation: We recommend that management implement procedures and controls to ensure future audits are filed timely with the federal clearinghouse. Repeat finding: No Views of responsible officials and planned corrective actions: See attached letter. Reportable questioned costs: None
Finding 2022-004
Criteria: The Provider Relief Funds are required to be reported through the Required Relief Funds Reporting Portal and include key items for Provider Relief Fund expenses and calculation of lost revenues. Condition: While management’s calculation of lost revenues for 2020 was determined to be accurate, as the 2019 and 2020 reported numbers in the portal submission reconciled and agreed to the Company’s audited net revenue amounts for those periods, the calculation of lost revenues for 2021 was not accurate. The reported amounts of net revenue from fiscal year 2021 and fiscal year 2022 (partially from calendar year 2021) did not reconcile or agree to the audited amounts of net patient revenue from these periods. Effect: The reporting in the portal inaccurately reported total lost revenues for each subsidiary’s portal submission. However, there were no questioned costs, as the 2020 reported lost revenues that were determined to be accurate, exceeded any amounts received from the Provider Relief Fund in the period under audit, and the cumulative receipts of Provider Relief Funding in all periods. Cause: The Company’s reporting over patient service revenue that was utilized in the compilation of the portal submission was inaccurate, and did not agree to the final 2021 audited amounts. In addition, there was no evidence that a secondary member of management reviewed the information prior to its submission. Recommendation: We recommend that management implement procedures and controls to ensure that all reporting and submissions to federal agencies are accurate and are sufficiently reviewed by another member of management prior to the submission. Repeat finding: No Views of responsible officials and planned corrective actions: See attached letter. Reportable questioned costs: None
Finding 2022-003
Criteria: The HRSA COVID-19 Uninsured Program, ALN 93.461, allows for reimbursement for COVID-19 testing and testing-related items, as well as for COVID-19 treatment for individuals who were either uninsured or under-insured at the time services were rendered. The guidance for this program provides specific diagnostic coding and treatments that are allowable to be reimbursed under this program. Condition: HRSA’s website indicated that the Company had received $1,222,565 of funds under this program for the period from July 1, 2019 through June 30, 2022. However, management was initially unaware that they had received funding from this program and could not provide an underlying detail of the patient visits that were reimbursed under this program. Management worked with both of the Company’s third-party billing providers, and after several months, provided a detail from July 1, 2019 through June 30, 2022 that totaled $905,771, which resulted in an initial, unreconciled difference of $316,794. Further, during testing procedures of the billing detail provided, which consisted of a sample of 120 items, we noted 47 instances where the patient visits did not appear to meet the allowable activities under the program. As a result, we identified total factual misstatements of $14,578, which projected to additional misstatements of $411,291. Effect: Due to the initial detail variance and the projected misstatements from testing, an audit adjustment of $742,663 was recorded, which reduced net patient service revenue and recorded a liability back to HRSA. Cause: The staff of the Company oversees and administers physician services within the emergency departments of nine area hospitals. The hospitals' personnel are assigned the task of patient registration, ensuring the precise entry of patients' insurance data into the medical records system. Subsequently, an error occurred as some patients were inaccurately marked as eligible for the HRSA uninsured program by the hospital staff. Consequently, this led to unintended discrepancies in the submission of claim reimbursements by the Company's third-party billing vendors to the program, some of which were not in accordance with the related compliance regulations. Recommendation: We recommend that management implement procedures and controls to ensure that they are fully aware of all federal funds that are being received, and that the Company’s policies and corresponding activities are in accordance with the related federal compliance guidelines, including discussions with the local area hospitals. Repeat finding: No Views of responsible officials and planned corrective actions: See attached letter. Reportable questioned costs: None Views of responsible officials and planned corrective actions: See attached letter.
Finding 2022-005
Criteria: Under 45 CFR Part 75, the Uniform Guidance requires that audits are submitted by the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. Condition: The Company did not complete and submit their audit to the federal clearinghouse until February 2024. Effect: The late filing could potentially impact future funding from government agencies. Cause: Significant delays stemming from Finding 2022-003 related to the Uninsured Program caused the required audit procedures and the ultimate completion date to extend beyond the defined deadlines. Recommendation: We recommend that management implement procedures and controls to ensure future audits are filed timely with the federal clearinghouse. Repeat finding: No Views of responsible officials and planned corrective actions: See attached letter. Reportable questioned costs: None