Finding 1218822 (2025-001)

Finding Number: 2025 001 Finding Type: Nonmaterial Noncompliance and Significant Deficiency in Internal Controls Over Compliance related to Special Tests and Provisions Information on the Federal Program: Program Name: Health Center Program Cluster (93.224/93.527) Federal Awards Project Title: Health Center Program Award Period: January 1, 2025 – December 31, 2025 Award Number: H80CS06658 Agency: U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) Criteria: In accordance with Section 330(k)(3)(G) of the Public Health Services Act (42 U.S. Code § 254b), as an FQHC, the Organization must have a sliding fee discount program in which the Organization’s fee schedule is discounted based on a patient’s ability to pay. Condition: Through testing a statistically valid sample of 25 individual patient balances, we noted one instance in which the sliding fee discount applied was inconsistent with the Organization's policy. Specifically, a contracted third-party billing company incorrectly applied a sliding fee discount to a patient account, resulting in a discount that was not consistent with the Organization's sliding fee discount policy. Cause: The Organization utilizes a contracted third-party billing company to perform certain billing functions, including the application of sliding fee discounts. Although management performs monitoring procedures over the sliding fee discount program, those procedures were not adequately designed or consistently performed to detect errors made by the third-party billing company. Specifically, monitoring was performed only quarterly, included a limited sample of transactions, was not formally documented within the Organization's sliding fee discount policy, and was not consistently performed throughout 2025. As a result, the incorrect application of a sliding fee discount was not identified through the Organization's monitoring procedures. Effect: Sliding fee discounts may not be consistently applied in accordance with policy, resulting in potential noncompliance with federal program requirements if errors are not timely identified and corrected. Questioned Costs: None Repeat Finding: No Recommendation: We recommend that the Organization strengthen its oversight and monitoring procedures over the sliding fee discount program, including activities performed by the contracted third-party billing company. Management should evaluate the frequency and scope of monitoring activities to ensure a sufficient number of transactions are reviewed throughout the year to identify potential errors in the application of sliding fee discounts. In addition, the Organization should update its sliding fee discount policy and related procedures to reflect current monitoring practices, assign responsibility for performing and reviewing monitoring activities, including oversight responsibilities for third-party billing vendors, and document the results of reviews and any corrective actions taken. Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding and will develop and implement the recommendations above.