Audit 370272

Finding 2025-001 Federal Award Finding Significant Deficiency in Internal Control over Compliance Noncompliance over Special Tests and Provisions (Sliding Fee Discount Schedule) Assistance Listing Numbers 93.224 & 93.527 - Health Center Program Cluster Criteria / Requirement: Under Section 330 of the Public Health Service Act, health centers must prepare and apply a sliding fee discount schedule (SFDS) to ensure that amounts owed for health center services by eligible patients are adjusted (discounted) based on the patient's ability to pay. This requirement is intended to ensure access to care for underserved populations. Condition / Context: During testing of 40 encounters, we identified 5 instances of noncompliance with the SFDS compliance requirements, which resulted in patients being undercharged and indicate control deficiencies in the process to apply the SFDS, as follows: • 1 encounter - Outdated system configuration resulted in incorrect or waived charges. • 2 encounters - Services were billed using outdated fee schedules. • 2 encounters - No documentation was available to support income eligibility determinations. Cause: The Center transitioned from a percentage-based fee schedule to a nominal fee schedule during the fiscal year. The implementation of the fee schedule change presented challenges. We noted: • System updates were delayed and/or improperly configured. • Procedures for verifying income eligibility were not consistently followed. • Staff training and oversight efforts did not prevent errors. Effect: Patients may have been undercharged, or not assessed the required nominal fees. These control deficiencies increase the risk of undetected and uncorrected noncompliance with program compliance requirements. Questioned Costs: None. Recommendation: We recommend the following to management for consideration: • System Configuration - Management should review and correct system configurations to ensure alignment with the current fee schedule and ongoing accuracy. • Staff Training & Documentation - Staff should be retrained on income eligibility procedures. Management should implement monitoring controls to detect and correct issues (internal audit function). • Implementation Controls - When introducing new fee schedules or processes, management should establish readiness checks and validation procedures to ensure controls are operating effectively before going live. Management’s Response: Management concurs with this finding and will establish controls to ensure proper system configuration, staff training, and documentation of the sliding fee discounts. Management will also establish controls to ensure proper implementation of changes to the sliding fee scale prior to going live with those changes. Please refer to the corrective action plan.