Finding Text
2022-002: Incorrect lost revenue option selected for the HHS Portal submissions Cluster: Not applicable Federal Agency: Department of Health and Human Resources - Health Resources and Services Administration Federal Program Name: COVID-19 Provider Relief Fund ("PRF") and American Rescue Plan ("ARP") Rural Distribution Assistance Listing Number: 93.498 Federal Award Number: Not applicable Federal Award Year: Reporting Period 4 Criteria Step Six of the Steps on Reporting on Use of Funds section of the June 11, 2021 PRF General and Targeted Distribution Post-Payment Notice of Reporting Requirements requires recipients that apply PRF payments toward lost revenues to use one of the following three options for calculating lost revenues: ? Option (i): difference between actual patient care revenues and actuals for each quarter during the period of availability. ? Option (ii): difference between budgeted (budget approved prior to March 27, 2020) and actual patient care revenues for each quarter during the period of availability; or ? Option (iii): any reasonable method of estimating revenues. Additionally, Reporting Entities that acquired or divested of related subsidiaries (change of ownership) during the period of availability must indicate the change in ownership, providing certain data points for each relevant Taxpayer Identification Number (TIN) within the reporting portal. Condition The Company submissions for each TIN within the Health Resources & Services Administrator (HRSA) reporting portal for Period 3 and Period 4, attested to the calculations of lost revenue at the individual TIN submission level. For one TIN, within the Reporting Period 4 submission, the Company attested to calculating lost revenues using Option (i); however, this particular entity ceased operations at the end of the third quarter of 2021, and did not report revenues for the second and third quarters of 2021. As a result, total lost revenues calculated within the Reporting Period 4 submission were incorrect. Additionally, for the same TIN and Reporting Period 4 submission, the Company selected ?No?, but should have selected ?Yes? to the following question within the reporting portal: Did you acquire or divest subsidiaries that are ?eligible health care providers? during the period of availability of funds? Cause Management?s understanding of the guidance was that including actual revenue for applicable TIN entity prior to cessation of operations at the end of the third quarter of 2021, was appropriate under Option (i), and mistakenly excluded the second and third quarter 2021 revenues from the reporting submission. Additionally, management inadvertently answered the following question as ?no? within the reporting portal: Did you acquire or divest subsidiaries that are ?eligible health care providers? during the period of availability of funds? Effect Option (iii) should have been utilized. Using Option (iii) would have required reporting additional information to the U.S. Department of Health and Human Services (HHS), including a narrative explaining the Company?s methodology and why it was preferable, but would not have resulted in a different conclusion that the receipt of the HHS funds was supported with lost revenue. Questioned Costs None noted. Recommendation Management of Highmark Health should update its controls over the review of reporting portal submissions to ensure information is reported accurately. Management?s Views and Corrective Action Plan Refer to Management?s Views and Corrective Action Plan at the end of the report.