Finding Text
Federal Award Identification: Multiple Notice Of Awards were issued during fiscal year ended June 30, 2025 Federal program: Health Center Program Cluster Assistance listing number: 93.224, 93.527 Federal agency: U.S. Department of Health and Human Services Pass-through Entity: Not applicable - direct award Award year: Fiscal year ended June 30, 2025 Criteria: Under Section 330 of the Public Health Service Act, health centers must prepare, approve, and consistently apply a sliding fee discount schedule (SFDS), supported by documented income verification, to ensure patient charges are adjusted based on the patient’s ability to pay. Condition: During our audit, testing of 40 patient encounters identified 9 instances in which the sliding fee discount schedule was not applied in accordance with established requirements. These instances included incorrect application of the sliding fee scale, failure to apply the discount when required, billing and coding errors resulting in write offs, and missing income verification documentation. As a result, certain patients were undercharged or overcharged for services received. Context: The deficiency was identified during audit testing of patient encounters subject to sliding fee discount requirements for the Health Center Program Cluster. Cause: Wallace did not consistently execute, or document control procedures designed to ensure proper application of the sliding fee discount schedule. Control activities relied on manual processes without sufficient system validation or supervisory review to detect and correct errors prior to billing. Effect: As a result, patient charges were not consistently calculated in accordance with sliding fee discount requirements. While the instances identified did not result in questioned costs, the deficiency increases the risk of noncompliance with the Special Tests and Provisions requirements, if not corrected timely. Known questioned costs: None. Repeat finding status: This is a new finding for the year ended June 30, 2025. Recommendation: Wallace should strengthen controls over the sliding fee discount process by implementing system validations to support accurate SFDS application, requiring documented income verification prior to billing, and performing periodic supervisory reviews to ensure consistent compliance with Section 330 requirements. Views of responsible officials: Management agrees with the finding. Management acknowledges that certain sliding fee schedule-related controls and documentation were not consistently performed in accordance with established policies during the audit period. While the issue was procedural in nature and did not result in questioned costs, management views this finding as an opportunity to formalize and update policies and procedures and enhance monitoring to promote consistent compliance with Section 330 requirements going forward.