Audit 51531

2022-001 Programs: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution CFDA Number: 93.498 Federal Agencies: U.S. Department of Health and Human Services Passed-Through Entities: N/A Award Number: N/A Award Year: Various Compliance Requirement: Reporting Questioned Costs: None Criteria: As required by the Provider Relief Fund General and Targeted Distribution Post-Payment Notice of Reporting Requirements, issued on June 11, 2021, when referring to revenues from patient care for the purposes of the calculation of lost revenues attributable to COVID-19 patient care was defined as: ??Patient care? means health care, services, and support, as provided in a medical setting, at home/telehealth, or in the community. It should not include non-patient care revenue such as insurance, retail, or real estate revenues (exception for nursing and assisted living facilities? real estate revenues where resident fees are allowable); prescription sales revenues (exception when derived through the 340B program); grants or tuition; contractual adjustments from all third-party payors; charity care adjustments; bad debt; and any gains and/or losses on investments.? Condition and Context: The Medical Center elected to use the Lost Revenues Reporting Method of comparing 2019 actual revenue to 2020 actual revenue. When preparing the calculation, the Medical Center excluded certain reimbursement settlement accounts. Cause: The Medical Center erroneously omitted the related settlement general ledger accounts when financial data by payor was compiled for the lost revenue calculations. Effect: The Medical Center has misstated the lost revenues when reporting the revenues within the Health Resources and Services Administration ("HRSA") reporting portal. However, the Medical Center does have sufficient expenditures and compliant lost revenues to recognize all funding received in the reporting period. Recommendation: Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information. Management should also consider adjusting lost revenue calculations in future HRSA reporting periods. View of Responsible Official: The Medical Center agrees with this finding.

2022-002 Programs: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution CFDA Number: 93.498 Federal Agencies: U.S. Department of Health and Human Services Passed-Through Entities: N/A Award Number: N/A Award Year: Various Compliance Requirement: Allowable Costs / Cost Principles Questioned Costs: None Criteria: The terms and conditions of the Provider Relief Fund state that funds are not to be used to reimburse expenses or lost revenue that have been reimbursed from other sources or that other sources are obligated to reimburse. Condition and Context: During the process of identifying expenses that were incurred to prevent, prepare for or respond to the COVID-19 pandemic, the Medical Center accumulated expenses related to prescription drugs used to treat COVID-19 patients. However, the cost of the prescription drugs was not reduced by amounts reimbursable from other sources, specifically reimbursed through third-party payors. Cause: The Medical Center incurred significant costs when treating COVID-19 patients that was not fully reimbursed through third-party payors. However, management reported in the HRSA reporting portal the full amount of the costs of the prescription drugs used to treat COVID-19 patients, including portions that were reimbursed through third-party payors instead of performing an analysis and claiming only the incremental cost related to COVID-19 treatments that were in excess of the reimbursed amounts. Effect: Expenses reported in the PRF reporting portal have not been reduced by amounts reimbursable from other sources, specifically reimbursements received from third-party payors. However, the Medical Center does have sufficient other expenditures and compliant lost revenues to recognize all funding received in the reporting period. Recommendation: We recommend that management continue to monitor and enhance its internal controls over federal award compliance to ensure that only eligible costs are included in amounts expended and that the same expenses are not reimbursed by other sources. Additionally, we recommend that management consider adjusting lost revenues in a future HRSA reporting period to deduct the unallowable costs to avoid "double dipping". View of Responsible Official: The Medical Center agrees with this finding.

2022-001 Programs: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution CFDA Number: 93.498 Federal Agencies: U.S. Department of Health and Human Services Passed-Through Entities: N/A Award Number: N/A Award Year: Various Compliance Requirement: Reporting Questioned Costs: None Criteria: As required by the Provider Relief Fund General and Targeted Distribution Post-Payment Notice of Reporting Requirements, issued on June 11, 2021, when referring to revenues from patient care for the purposes of the calculation of lost revenues attributable to COVID-19 patient care was defined as: ??Patient care? means health care, services, and support, as provided in a medical setting, at home/telehealth, or in the community. It should not include non-patient care revenue such as insurance, retail, or real estate revenues (exception for nursing and assisted living facilities? real estate revenues where resident fees are allowable); prescription sales revenues (exception when derived through the 340B program); grants or tuition; contractual adjustments from all third-party payors; charity care adjustments; bad debt; and any gains and/or losses on investments.? Condition and Context: The Medical Center elected to use the Lost Revenues Reporting Method of comparing 2019 actual revenue to 2020 actual revenue. When preparing the calculation, the Medical Center excluded certain reimbursement settlement accounts. Cause: The Medical Center erroneously omitted the related settlement general ledger accounts when financial data by payor was compiled for the lost revenue calculations. Effect: The Medical Center has misstated the lost revenues when reporting the revenues within the Health Resources and Services Administration ("HRSA") reporting portal. However, the Medical Center does have sufficient expenditures and compliant lost revenues to recognize all funding received in the reporting period. Recommendation: Policies and procedures over federal grant reporting should be modified to ensure reports are prepared using complete and accurate information. Management should also consider adjusting lost revenue calculations in future HRSA reporting periods. View of Responsible Official: The Medical Center agrees with this finding.

2022-002 Programs: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution CFDA Number: 93.498 Federal Agencies: U.S. Department of Health and Human Services Passed-Through Entities: N/A Award Number: N/A Award Year: Various Compliance Requirement: Allowable Costs / Cost Principles Questioned Costs: None Criteria: The terms and conditions of the Provider Relief Fund state that funds are not to be used to reimburse expenses or lost revenue that have been reimbursed from other sources or that other sources are obligated to reimburse. Condition and Context: During the process of identifying expenses that were incurred to prevent, prepare for or respond to the COVID-19 pandemic, the Medical Center accumulated expenses related to prescription drugs used to treat COVID-19 patients. However, the cost of the prescription drugs was not reduced by amounts reimbursable from other sources, specifically reimbursed through third-party payors. Cause: The Medical Center incurred significant costs when treating COVID-19 patients that was not fully reimbursed through third-party payors. However, management reported in the HRSA reporting portal the full amount of the costs of the prescription drugs used to treat COVID-19 patients, including portions that were reimbursed through third-party payors instead of performing an analysis and claiming only the incremental cost related to COVID-19 treatments that were in excess of the reimbursed amounts. Effect: Expenses reported in the PRF reporting portal have not been reduced by amounts reimbursable from other sources, specifically reimbursements received from third-party payors. However, the Medical Center does have sufficient other expenditures and compliant lost revenues to recognize all funding received in the reporting period. Recommendation: We recommend that management continue to monitor and enhance its internal controls over federal award compliance to ensure that only eligible costs are included in amounts expended and that the same expenses are not reimbursed by other sources. Additionally, we recommend that management consider adjusting lost revenues in a future HRSA reporting period to deduct the unallowable costs to avoid "double dipping". View of Responsible Official: The Medical Center agrees with this finding.