Finding Text
Finding 2025-001 Special Tests and Provisions Significant Deficiency Health Center Program Cluster 93.224, 93.527 U.S. Department of Health and Human Services Federal Award Identification: H80CS00542, with multiple Notice of Awards issued during the year ended December 31, 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: Year ended December 31, 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 2 instances in which the SFDS was not applied in accordance with established requirements. These instances included the incorrect application of the sliding fee scale and the failure to apply the discount when required. As a result, certain patients were undercharged or overcharged for services received. Context: The control deficiency was identified during audit testing of patient encounters subject to sliding fee discount requirements for the Health Center Program Cluster. Cause: The Center did not consistently execute the internal control procedures designed to ensure proper application of the SFDS. 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 December 31, 2025. Recommendation: The Center should strengthen controls over the sliding fee discount process by implementing system validations to support accurate SFDS application and performing periodic supervisory reviews to ensure consistent compliance with Section 330 requirements. Views of responsible officials: Management agrees with the finding. The Center has policies and procedures in place and has developed additional processes to ensure compliance.