Finding 1179626 (2025-001)

Finding 2025-001 – Special Tests and Provisions – Significant Deficiency in Internal Control over Compliance Federal Program: U.S Department of Health and Human Services Health Center Program Cluster (Federal Assistance Listing # 93.224/93.527) Federal Agency: U.S. Department of Health and Human Services Award Year: 2024-2025 Criteria: The recipient is required to comply with specific federal regulations and provisions outlined in 2 CFR Part 200, particularly those related to special tests and provisions for the Health Center Program Cluster. This includes maintaining an effective internal control environment to ensure sliding fee discounts are applied to patient charges consistent with the recipients sliding fee discount schedule. Condition/Cause: While the Organization successfully implemented system-level enhancements within their electronic health record system to consistently apply appropriate sliding fee discounts (previously a noted deficiency), the internal control environment remains inconsistently applied. During the audit, it was identified that the Organization’s front office staff had improperly applied the sliding discounts for patients based on qualification criteria. In some instances, the front office staff applied sliding fee discounts without appropriate qualification criteria or qualification criteria which expired. This is primarily due to administrative lapses and high staff turnover, which have hindered the full implementation of training protocols and eligibility documentation requirements. Effect: As a result, certain patients were billed incorrect amounts inconsistent with the sliding fee discount schedule or received discounts without proper documentation to support eligibility. Questioned costs: No questioned costs are identified because the improper application of sliding fee discounts affects patient billing amounts but does not result in the misappropriation of federal funds. Context: This is a repeat finding from the prior year. In the current period, a sample of 25 patient visits was selected from a statistically valid population of patients potentially eligible for sliding fee discounts during the fiscal year ending June 30, 2025. In 6 of the 25 samples tested, the Organization’s internal controls failed to ensure compliance with the sliding fee discount schedule, resulting in improper billing despite enhancements to the functionality and configuration of the Organization’s electronic health record system. This indicates that while the technical cause has been remediated, the administrative and oversight causes remain unaddressed or ineffective. Repeat Finding: This is a repeat finding from the prior year. Recommendation: We recommend the Organization formalize administrative oversight to complement recent enhancements of the Organization’s electronic health record system by implementing a mandatory training and competency program for all eligibility staff to mitigate the impact of departmental turnover. Additionally, the Organization should establish a monthly internal monitoring process such as utilizing standardized eligibility checklists to ensure income documentation is consistently retained and that sliding fee discounts are applied accurately in accordance with federal policy. Views of responsible officials: The Organization is actively developing and delivering targeted training for front office staff on the application of sliding fee discounts. The Organization also plans to update policies and procedures to incorporate monthly internal monitoring, reviews, and administrative oversight of sliding fee discount application to strengthen internal controls.