U.S. Department of Health and Human Services Assistance Listing Number 93.224 Health Center Program Cluster Program Year 2025-2026 Criteria or Specific Requirement – Special Tests and Provisions: Sliding Fee Discounts Per 42 U.S.C. § 254b(k)(3)(G)(i), Federally Qualified Health Centers (FQHC) must prepare a schedule of fees or payments and a corresponding schedule of discounts adjusted on the basis of the patient’s ability to pay. Implementing regulations at 42 CFR § 51c.303(f) and 42 CFR § 56.303(f) require health centers to establish a schedule of discounts adjusted on the basis of patients’ ability to pay, with nominal charges for individuals and families with annual incomes at or below 100% of the Federal Poverty Level (FPL), and discounts for those with incomes between 100% and 200% of FPL. Additionally, 42 U.S.C. § 254b(k)(3)(F) and 42 CFR § 51c.303(e) and § 56.303(e) prohibit denying services to any patient due to inability to pay. Condition – During our testing of patient encounters, we identified instances where patients did not receive sliding fee discount adjustments in accordance with the Organization’s sliding fee schedule and the requirements of 42 CFR § 51c.303(f) and §56.303(f). Specifically, three (3) of twenty-five (25) patient encounters tested did not reflect the appropriate sliding fee discount based on the patient’s documented income and family size relative to FPL guidelines. Cause – The Organization’s internal controls over the application of sliding fee discounts were not operating effectively to ensure compliance with its sliding fee policy. Effect or Potential Effect – Patients may have been charged amounts inconsistent with their eligibility for sliding fee discounts. Questioned Costs – None Context – A sample of 25 patients was tested out of the total population of 3,000 encounters. Three patients did not receive the proper sliding fee adjustments. The sampling methodology used is not and is not intended to be statistically valid. Identification as a Repeat Finding – No Recommendation – We recommend management ensure all personnel understand the sliding fee scale policy and adhere to the requirements and guidelines set forth in the policy. Procedures should be implemented to ensure eligible patients receive discounts in accordance with the sliding fee scale. Views of Responsible Officials and Planned Corrective Actions – The Organization concurs with the finding, and management has continued to implement procedures to ensure that eligible patients receive discounts in accordance with the sliding fee scale. Management and all personnel involved will review and determine the appropriate sliding fee discount in order to be in compliance with federal regulations. All patients will be offered an application to participate in the sliding fee discount. Information will be entered into the system as declined or appropriate to arrive at the sliding fee category. The application will then come to Hampton where a billing clerk will review the application for accuracy. The CHC and Insurance tab will reflect the correct sliding fee category. Corrections to the patient account will be made if there are any inaccuracies found. Education will be provided to those making the error and corrective action taken if continued omissions. In the Organization’s PMS, the slide is setup as an insurance, if no other insurance is primary the adjustment is automatically made. The PMS has been checked for accuracy of slide categories, adjustment codes and insurance types. The Organization’s Billing and Collections staff will be re-educated on the entire process of sliding fee; from application to ensuring adjustments are made correctly. Reviews will be made by the CIO on a quarterly basis to assure the correct adjustment has been made.
U.S. Department of Health and Human Services Assistance Listing Number 93.224 Health Center Program Cluster Program Year 2025-2026 Criteria or Specific Requirement – Per 2 CFR §200.305(b) and (b)(1) and §200.302(b)(6), non-federal entities must maintain or demonstrate the willingness to maintain both written procedures that minimize the time elapsing between the transfers of funds and disbursement by the recipient. Advance payments must be limited to the minimum amounts needed and timed to be in accordance with the entity’s actual, immediate cash requirements. Condition – During testing of cash management requirements, we selected a federal cash draw of $150,000 made on April 15, 2025. The draw was supported by payroll expenditures for the periods April 1, 2025 through April 15, 2025 and April 16, 2025 through April 30, 2025, which were not disbursed until April 30, 2025 and May 15, 2025, respectively. As a result, federal funds were drawn approximately 15 and 30 days prior to the related payroll disbursements, indicating the draw may not have been limited to the Organization's immediate cash needs as required. Additionally, the Organization was unable to provide sufficient documentation demonstrating the basis for the draw request and compliance with federal cash management requirements. Cause – The Organization did not have adequate procedures and review controls in place to ensure Federal cash draws were supported by eligible expenditures and requested only for actual, immediate cash needs. In addition, supporting documentation for cash draw requests was not consistently maintained and reviewed. Effect or Potential Effect – Without adequate documentation and controls over the timing of federal cash drawdowns, the Organization may be unable to demonstrate that funds were drawn only for actual, immediate cash requirements and disbursed as close as administratively feasible to receipt. This could result in excess federal cash on hand, liability for interest earned on advance funds, required repayment of unsupported or prematurely drawn amounts, and other federal corrective action. Questioned Costs – None Context – A sample of four federal cash draws were tested from a population of 37 draws. The sampling methodology used is not and is not intended to be statistically valid. The exception identified related to one of the draws selected for testing. Identification as a Repeat Finding – No Recommendation – We recommend the Organization implement formal policies and procedures requiring federal funds to be drawn only for actual, immediate cash needs and as close as administratively feasible to the related disbursements. The procedures should also require personnel to verify that expenses supporting each draw are allowable, properly documented, and recorded in the correct accounting and federal award period. Draw requests should be reconciled to the underlying expenditures and independently reviewed and approved before submission. Views of Responsible Officials and Planned Corrective Actions – The Organization concurs with the finding and is developing and implementing formal cash management policies and procedures to ensure federal draw requests are supported by allowable expenditures, requested only for immediate cash needs, and properly documented. Management will require reconciliation of draw requests to supporting expenditures, implement independent review and approval procedures, and monitor compliance with the new controls.