Audit 413305

2025 – 001 Internal Control over Sliding Fee Discounts Federal Agency: Department of Health and Human Services Federal Program Name: Health Center Program Cluster Assistance Listing Number: 93.224 & 93.527 Award Period: 01/01/2025 – 12/31/2025 Questioned Costs: None Type of Finding: Significant Deficiency in Internal Control over Compliance Condition: Three instances were identified in which the sliding fee discount applied to patient encounters did not correspond to the sliding fee scale level determined by the Clinic based on the applicable patient provided information. Criteria or Specific Requirement: Under Compliance Requirement N, Special Tests and Provisions, for Assistance Listing Nos. 93.224 and 93.527, health centers are required to prepare and apply a sliding fee discount schedule (SFDS) so that amounts owed for health center services by eligible patients are adjusted, or discounted, in accordance with the applicable schedule. Effect: The absence of an effective after-the-fact review and documentation process resulted in incorrect sliding fee discounts being applied to patient encounters. As a result, there is an increased risk that eligible patients may be charged amounts that are inconsistent with the Clinic’s approved sliding fee discount schedule. Cause: Controls were not operating effectively to ensure that sliding fee discount determinations were reviewed, errors were identified, and necessary corrections were made before the discount was applied to the patient encounter. Repeat Finding: No. Recommendation: CLA recommends that the Clinic strengthen its review process over sliding fee discount determinations by implementing procedures to verify that each patient application is evaluated using current eligibility information and that the corresponding sliding fee scale level is accurately applied. CLA further recommends that the Clinic document evidence of review and approval before discounts are applied to patient encounters and establish a process for timely identification and correction of any discrepancies. Views of responsible officials and planned corrective actions: Management is reviewing and strengthening Heritage Health’s Sliding Fee Discount Program procedures to ensure that sliding fee eligibility determinations are completed and documented consistently in accordance with the organization’s board-approved policies.