Audit 402865

2025-001 – Special Tests and Provisions – Sliding Scale – Noncompliance and Significant Deficiency in Internal Control Over Compliance Federal program information: Funding agency: U.S. Department of Health and Human Services Title: Health Center Program Cluster Assistance listing numbers: 93.224 and 93.527 Award year and number: 2025; 6 H80CS00205‐24‐08; 4 H8NCS53926-01-02; 6 H2ECS45598-02-03; 5 H8KCS49758-02-00; 1 Q8JCS54522-01-00 Criteria: According to 42 USC 254(k)(3)(E), (F), and (G) and Health Resources and Services Administration (HRSA) regulations, health centers are required to develop and implement a sliding fee discount schedule that adjusts service charges for eligible patients in accordance with their ability to pay. Condition: Documentation supporting income verification for eligible patients was obtained and maintained in patient files; however, income frequency entered into the software by customer access representatives (CARs) was not always consistent with the frequency reflected on the supporting documentation. As a result, income amounts were incorrectly calculated by the system and did not agree to the amounts that should have been used to determine eligibility and apply the sliding fee discount schedule. Specifically, income documented as weekly, biweekly, bimonthly, monthly, or annual was in some instances entered under an incorrect pay frequency, resulting in miscalculated annualized income and the application of an incorrect sliding fee discount. In addition family size was entered incorrectly in the system for one patient, which resulted in the patient being placed in the wrong sliding fee discount category. Known Questioned Costs Exceeding $25,000: None. Context: Of a sample of 25 patients who received sliding fee discounts, four had documentation of income that was inaccurately computed when determining their applicable sliding fee discount. Of the same sample of 25 patients, one additional patient had an inaccurate family size used when determining the sliding fee discount. Cause and Effect: Patient income and family size information entered into the system used to calculate annual income and determine the applicable sliding fee discount was not always recorded accurately. These errors were attributable to human error during the data entry and eligibility determination process. As a result, sliding fee discounts were calculated using inaccurate household income or family size information, which could cause patients to receive discounts for which they do not qualify. This increases the risk of lost program revenue and noncompliance with HRSA sliding fee discount requirements. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as finding 2024-001 in the 2024 report. Recommendation: We recommend management strengthen controls over the sliding fee discount program by implementing technology-based validation and documentation procedures, along with enhanced staff training and continued internal audits. Specifically, PMS should utilize system controls that flag incomplete and incorrect amounts before a sliding fee discount can be approved. In addition, management should provide formal initial and refresher training to staff responsible for determining eligibility, with emphasis on HRSA sliding fee discount requirements and proper inputs of household income and family size. Management should also consider supervisory review and continue performing periodic quality control testing of sliding fee discount determinations to ensure compliance and reduce the risk of errors resulting from staff turnover. Management’s Response: Management has taken corrective action to strengthen compliance with Sliding Fee Discount Program requirements. Actions include targeted staff training, revisions to patient intake forms to standardize income calculations, and implementation of monthly audits throughout 2026. Clinics with error rates of 10% or higher are subject to focused retraining and continued monitoring. Audit results are reported to leadership to support accountability, and two mandatory training sessions for CARs, AR staff, and administrators are being conducted to reinforce consistent and compliant implementation.