Finding No.: 2022-010 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program Federal Award No.: 1 H8DCS36516-01-00, 4 H8DCS36516‐01‐01, 6 H80CS02467-35-03, 1 H8FCS41190-01-00, 6 H80CS02467-36-08, 3 H80CS02467‐36‐01, 5 H80CS02467‐37‐00 Area: Special Tests and Provisions – Sliding Fee Discounts Questioned Costs: $1,357 Criteria: In accordance with the 2022 OMB Compliance Supplement, Part 4, Agency Program for ALN 93.224, Section III-N: Special Tests and Provisions – Sliding Fee Discounts, health centers must prepare and apply a sliding fee discount schedule (SFDS) so that the amounts owed for health center services by eligible patients are adjusted (discounted) based on the patient’s ability to pay as follows: a. Sliding fee discounts are applied to fees for health center services provided to all individuals and families with annual incomes at or below 200 percent of the Federal Poverty Guidelines (FPG). b. A full discount is applied to fees for health center services provided to individuals and families with annual incomes at or below 100 percent of the FPG, or the health center applies only a nominal charge. c. Fees for health center services are discounted based on gradations in family size and income for individuals and families with incomes above 100 and at or below 200 percent of the FPG. d. No sliding fee discount is applied to fees for health center services provided to individuals and families with annual incomes above 200 percent of the FPG. Condition: a. The sliding fee discount schedule used by the Republic is the Ministry of Health’s Sliding Fee Scale, which is not in accordance with Federal requirements, and has not been updated since January 2006 as shown below. The discounts were applied and determined based on whether the patient is a resident or a nonresident, tourist or non-tourist, with insurance or none, senior citizen, and behavioral health patient. Family Size Ministry of Health Sliding Fee Schedule 2022 Federal Poverty Guidelines Percentage of Maximum Charge based on Family Income & Size 20% 30% 40% 50% 60% 70% 100% 200% 1 0-5,700 5,701-10,050 10,051-12,600 12,601-14,100 14,101-17,500 >17,500 $13,590 $27,180 2 0-6,600 6,601-13,500 13,501-16,300 16,301-19,000 19,001-21,800 >21,800 18,310 36,620 3 0-7,400 7,401-17,000 17,001-20,500 20,501-23,900 23,901-27,500 >27,500 23,030 46,060 4 0-8,500 8,501-20,600 20,601-24,800 24,801-28,900 28,901-32,500 >32,500 27,750 55,500 5 0-9,700 9,701-24,200 24,201-29,000 29,001-33,800 33,801-38,700 >38,700 32,470 64,940 6 0-10,700 10,701-27,700 27,701-33,200 33,201-37,500 37,501-43,000 >43,000 37,190 74,380 7 0-11,500 11,501-31,200 31,201-37,400 37,401-43,700 43,701-46,000 >46,000 41,910 83,820 8 0-12,600 12,601-34,700 34,701-41,600 41,601-48,600 48,601-55,600 >55,600 46,630 93,260 9 0-14,800 14,801-38,300 38,301-45,900 45,901-53,600 53,601-65,000 >65,000 51,350 102,700 10 0-16,600 16,601-41,800 41,801-50,200 50,201-58,500 58,501-70,000 >70,000 56,070 112,140 11 0-18,900 18,901-45,300 45,301-54,400 54,401-63,400 63,401-75,000 >75,000 60,790 121,580 12 0-23,500 23,501-48,800 48,801-58,600 58,601-68,400 68,401-85,000 >85,000 65,510 131,020 b. For 51 (or 85%) of the 60 invoices tested, $1,960 out of $1,037,361 in total billed amounts, patients were not properly billed in accordance with the FPG. A full discount was not applied to fees for health center services provided to individuals and families with annual incomes at or below 100% of the FPG, or a nominal charge. No. Encounter No. Invoice Number Payor Family Size Payor Income Bill Charge Audit Calculation Overbilled / (Underbilled) 1 754877 733395 4 $7,488 $11 $– $11 2 781518 759290 3 – 6 5 1 3 776395 754269 1 5,093 3 – 3 4 722461 707096 1 – 45 43 2 5 715155 700604 2 11,338 13 – 13 6 749290 728071 1 8,566 52 – 52 7 736712 717063 1 – 23 10 13 8 723144 707747 3 – 19 10 9 9 726603 711146 5 12,195 58 – 58 10 731023 715830 1 – 34 25 9 11 722752 707357 5 19,231 18 5 13 12 774214 752121 2 1,200 38 29 9 13 769428 747435 1 4,344 98 39 59 14 723611 708224 3 – 6 – 6 15 766923 745041 4 – 35 5 30 16 779565 757371 1 – 20 12 8 17 727345 711861 1 3,702 51 18 33 18 769371 747360 1 10,927 27 10 17 19 767654 745740 1 – 13 10 3 20 731034 715563 1 – 50 29 21 21 740365 719508 2 8,122 13 – 13 22 714110 699086 3 17,478 118 34 84 23 712029 697030 1 7,306 18 5 13 24 776827 754683 1 – 12 10 2 25 738228 717403 1 – 39 5 34 26 754313 732878 1 – 73 30 43 27 749494 728248 1 – 60 17 43 28 714372 699352 1 – 82 6 76 29 770602 748538 1 204 13 10 3 30 768935 746954 2 – 17 15 2 31 712849 697933 4 – 7 5 2 32 749370 728205 3 $– $3 $– $3 33 786662 764376 3 – 96 94 2 34 728123 712628 4 – 43 – 43 35 786837 764570 1 9,996 48 – 48 36 755679 734248 1 11,947 25 – 25 37 724867 709483 1 – 109 – 109 38 754765 733308 1 – 12 11 1 39 782259 760033 1 12,308 48 5 43 40 774749 752638 3 11,050 22 – 22 41 747768 726722 2 – 1 – 1 42 785311 763047 2 3,775 52 12 40 43 714852 699863 1 – 54 10 44 44 763221 741361 4 12,571 18 5 13 45 760077 738373 4 14,123 23 10 13 46 748797 727743 1 – 201 201 47 746736 725464 2 6,000 8 5 3 48 751147 729789 1 – 20 20 49 745654 724406 2 15,825 42 25 17 50 769401 750456 3 – 52 39 13 51 724470 709093 2 560 11 – 11 Subtotal: $1,960 $603 $1,357 c. For 1 (or 1%) of 60 invoices tested, $117 of $1,037,361 in total billed amount, patients were not properly billed based on the FPG. The fees for health center services were not properly discounted based on gradations in family size and income for this individual with income above 100 and at or below 200% of the FPG. No. Encounter No. Invoice Number Payor Family Size Payor Income Bill Charge Audit Calculation Overbilled / (Underbilled) 1 716428 701344 1 $25,532 $117 $104 $13 d. For 1 (or 1%) of 60 invoices tested, $84 of $1,037,361 in total billed amount, patients were not properly billed based on the FPG. The sliding fee discount was applied to fees for health center services provided to this with annual income above 200% of the FPG. No. Encounter No. Invoice Number Payor Family Size Payor Income Bill Charge Audit Calculation Overbilled / (Underbilled) 1 732587 716990 1 $50,000 $84 $97 ($13) Grand Total: $2,161 $804 $1,357 Cause: Republic of Palau Public Law (RPPL) 7-13 Section 19, which amends RPPL 5-7, requires Palauan citizens and their spouses to be charged hospital fees at a subsidized rate compared to non-Palauans. Accordingly, the Ministry of Health implemented its sliding fee schedule policy in 2006 in accordance with RPPL 7-13. The community health centers program adopted its fee schedule policy based on income and family size. However, this policy cannot be implemented without the support of the Olbiil era Kelulau (National Congress). Effect: The Republic is in noncompliance with applicable special tests and provisions requirements for sliding fee discounts. The reportable questioned cost is $1,357. Identification as a Repeat Finding: Finding 2021-007 Recommendation: We recommend that the Republic implement policies related to the sliding fee discount based on family income and size, in accordance with the aforementioned criteria. Views of Responsible Officials: The Republic’s Corrective Action Plan does not indicate disagreement and provides planned corrective action.