Finding 1237934 (2025-005)

Finding 2025-005: Sliding Fee Discount Applications Not Updated Annually – Significant Deficiency and Instance of Noncompliance Federal Program: Health Center Program (Assistance Listing 93.224) Criteria: Health centers are required to establish and implement a board-approved sliding fee discount program. Consistent with the organization's policy, patients seeking a sliding fee discount are required to complete and update their sliding fee discount application annually to support continued eligibility for discounted services. Condition: During testing of four patient selections receiving services under the sliding fee discount program, we noted that 2 of 40 selections did not have a sliding fee discount application completed within one year of the date of service. As a result, the organization did not maintain current eligibility documentation supporting the discounts provided to these patients in accordance with its board-approved policy. Cause: Controls were not operating effectively to ensure sliding fee discount applications were renewed annually and updated documentation was obtained prior to providing discounted services. Effect: Failure to obtain updated sliding fee discount applications increases the risk that discounts may be provided to individuals without current eligibility documentation and that the sliding fee discount program may not be administered in accordance with the organization's board-approved policy. Questioned Costs: None. Context: We tested 40 patient selections receiving sliding fee discounts under the Health Center Program. Of the 40 selections tested, 2 did not have a sliding fee discount application completed within one year of the applicable date of service. These exceptions indicate that controls designed to monitor the timely renewal of sliding fee discount applications were not operating effectively. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management strengthen controls over the sliding fee discount program by implementing procedures to track application expiration dates and ensure updated applications are obtained prior to providing discounted services. Management should also perform periodic monitoring of patient records to verify compliance with the annual renewal requirement established in its board-approved policy. Management Response: Management concurs with the finding. The Organization acknowledges that controls intended to ensure annual renewal of sliding fee discount applications were not consistently operating as intended. Management is strengthening monitoring procedures by implementing tracking mechanisms to identify expiring applications and requiring verification of eligibility documentation prior to continued application of discounts, consistent with the requirement under Section 330(k)(3)(G) of the Public Health Service Act (42 U.S.C. 254b(k)(3)(G)) that health centers establish systems for sliding fee eligibility determination. In addition, management will provide additional training to all billing and front-desk staff on the sliding fee discount program, including eligibility determination, income and household-size documentation requirements, application renewal procedures, and the proper application of discounts in the practice management system. Periodic supervisory reviews will be performed to ensure compliance with the Board-approved sliding fee discount policy, consistent with the internal control requirements of the Uniform Guidance (2 CFR 200.303). Management will also review the sliding fee discount schedule on a regular basis, no less than annually, and will update it in a timely manner whenever necessary, including upon publication of the annual Federal Poverty Guidelines, so that discounts continue to be adjusted on the basis of each patient’s ability to pay as required by 42 CFR 51c.303(f), with all updates presented to the Board of Directors for approval and communicated promptly to billing staff. Documentation of staff training, schedule reviews, and Board approvals will be retained to demonstrate compliance with HRSA Health Center Program requirements, including Chapter 9 (Sliding Fee Discount Program) of the HRSA Health Center Program Compliance Manual.