Finding 1159684 (2025-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2025
Accepted
2025-10-01

AI Summary

  • Core Issue: There are significant deficiencies in internal controls over compliance with the Sliding Fee Discount Schedule, leading to potential undercharging of patients.
  • Impacted Requirements: Compliance with Section 330 of the Public Health Service Act, which mandates accurate application of the sliding fee discount based on patients' ability to pay.
  • Recommended Follow-Up: Management should improve system configurations, enhance staff training on eligibility procedures, and implement readiness checks for new fee schedules to prevent future issues.

Finding Text

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being undercharged and indicate control deficiencies in the process to apply the SFDS, as follows: • 1 encounter - Outdated system configuration resulted in incorrect or waived charges. • 2 encounters - Services were billed using outdated fee schedules.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.

Corrective Action Plan

Summary of finding: Five out of 40 charts reviewed by the auditors’ showed exceptions to the Sliding Fee Discount Schedule (SFDS) that are not supported by policy or documentation. Findings were identified in three primary categories: inconsistent collection and scanning of documents at registration, Electronic Health Records (EHR) not operating as expected for one line of the SFDS and error not caught and corrected, and a significant process change from percentage to fixed fee SFDS causing inconsistent application during transition and training period. Planned corrective action: System Configuration:  Leaders for all service lines and Billing Department will work with EHR Support Team and vendor to review and test all possible SFDS options to verify rules are functioning as expected and as outlined in the SFDS policy.  Annual review and testing of EHR rules governing SFDS to validate ongoing compliance. Contact person: Jennifer Velez, Revenue Cycle Director Completion date for action: 10/31/2025 Staff Training and Documentation:  All staff responsible for registration and income verification in all service lines, programs, and sites will receive a review of income eligibility assessment, documentation, and application.  Registration Program Manager and EHR Trainers will work with Learning and Development Department to develop competency standard for income eligibility assessment, documentation, and application for all staff responsible for registration and income verification in all service lines, programs, and sites. All identified staff will be required to demonstrate competence annually using the Learning Management System (LMS).  The Center will audit 5 patient records for FPL (Federal Poverty Level) documentation per site or program two times annually during C-Qual (the Center’s internal audit process). This will result in 180 charts each year.  Site Managers or Department Administrators will review front office dashboard in monthly management meetings and develop site specific action plans if exceptions are identified. This was added to the standing agenda for the Primary Care Clinic Managers (PCCM) meeting in September 2025. Contact person: Angela Hurley, Director of Operations Completion date for action: 12/31/2025 Implementation Controls:  Update SFDS policy to include review and verification of EHR alignment with fee schedule following any update or change approved by the Board of Directors.  Develop checklist for roll-out of changes in SFDS that prompts change management and training team to review readiness and validation procedures before going live with changes. Contact person: Angela Hurley, Director of Operations Completion date for action: 9/30/2025

Categories

Internal Control / Segregation of Duties Special Tests & Provisions Subrecipient Monitoring Eligibility Significant Deficiency

Other Findings in this Audit

  • 1159683 2025-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.224 Health Center Program (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $8.50M
93.493 Congressional Directives $1.54M
93.526 Covid-19: Grants for Capital Development in Health Centers $797,787
93.110 Maternal and Child Health Federal Consolidated Programs $84,752
93.217 Family Planning Services $56,900
21.027 Coronavirus State and Local Fiscal Recovery Funds $54,737
93.137 Covid-19: Community Programs to Improve Minority Health $23,379
93.527 Covid-19: Grants for New and Expanded Services Under the Health Center Program $15,756
93.268 Immunization Cooperative Agreements $8,390
93.318 Covid-19: Protecting and Improving Health Globally: Building and Strengthening Public Health Impact, Systems, Capacity and Security $7,066