Finding 21784 (2022-002)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2023-05-29
Audit: 19457

AI Summary

  • Core Issue: Incorrect reporting of net patient service revenue (NPSR) for Commercial Insurance and Medicare A+B in the Period 3 Provider Relief Fund Report.
  • Impacted Requirements: Compliance with Section 200.303 of the Uniform Guidance, which mandates effective internal controls for accurate federal award management.
  • Recommended Follow-Up: Enhance internal controls and implement peer reviews to ensure precise reporting of NPSR in future PRF Reports.

Finding Text

Finding 2022-002 ? Reporting Identification of the federal program: Federal Grantor: United States Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) Assistance Listing No.: 93.498, COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Provider Relief Fund Reporting Entity: Northwestern Memorial HealthCare Group Tax Identification Number (TIN): 364724966 Period of Availability: 01/01/2020?06/30/2022 (Period 3) Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? The terms and conditions of the award require the recipient to submit reports as the secretary of HHS determines are needed to ensure compliance with the conditions that are imposed on the payment, and such reports shall be in such form, with such content, as specified by the secretary of HHS in future program instructions directed to all recipients. Condition: The amounts reported for net patient service revenue (NPSR) by payer for calendar year 2022 Quarter 1 (Q1 2022) and Quarter 2 (Q2 2022) were incorrect for Commercial Insurance and Medicare A+B for Northwestern Memorial HealthCare Group TIN?s Period 3 Provider Relief Fund (PRF) Report. Cause: Management?s review of out-of-period adjustments made to NPSR was not sufficiently precise to detect that the incorrect amounts were included in management?s lost revenue calculation workbook used to prepare the Period 3 PRF Report for Northwestern Memorial HealthCare Group?s reporting TIN. Effect or potential effect: NPSR by payer was incorrectly reported for Q1 2022 and Q2 2022 for Commercial Insurance and Medicare A+B. The total NPSR was correct as reported, and there was no impact on resulting lost revenues. Questioned costs: None. Context: We tested five of 10 Periods 2 and 3 PRF Reports submitted to HRSA. For one of the five reports tested, the NPSR amounts reported by payer for two of the six financial classes were incorrect for Q1 2022 and Q2 2022 for Northwestern Memorial HealthCare Group?s reporting TIN as follows: Total Revenue/Net Changes from Patient Care (2022 Actuals) ? As Reported (See Schedule of Findings and Questioned Costs for chart/table) Total Revenue/Net Changes from Patient Care (2022 Actuals) ? Corrected (See Schedule of Findings and Questioned Costs for chart/table) Total Revenue/Net Changes from Patient Care (2022 Actuals) ? Increase/(Decrease) (See Schedule of Findings and Questioned Costs for chart/table) There was no impact on lost revenues reported for these quarters. Federal expenditures for Assistance Listing 93.498 totaled $199,865,192 for the year ended August 31, 2022. Identification as a repeat finding, if applicable: The finding is not a repeat finding from the prior year. Recommendation: The Company should ensure that internal controls over the review of PRF Reports are enhanced to include sufficient precision to allow for accurate reporting of NPSR by payer. Views of responsible officials: While there was no impact on lost revenues reported in the Northwestern Memorial HealthCare Group?s TIN Period 3 PRF Report, we agree that the amounts used for out-of-period adjustments were incorrect. Going forward, we will provide additional peer review of PRF Reports to confirm accuracy.

Corrective Action Plan

Finding 2022-002 ? Reporting Information of the federal program: Federal Grantor: United States Department of Health and Human Services, Health Resources and Services Administration (HRSA) Assistance Listing No.: 93.498, COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Provider Relief Fund Reporting Entity: Northwestern Memorial Healthcare Group Tax Identification Number (TIN): 364724966 Federal Award Period of Performance: 01/01/2020?06/30/2022 (Period 3) Views of responsible officials and planned corrective actions: Management will add additional peer review for the out of period adjustments to ensure reported amounts align with financial reporting for net patient service revenue. Responsible Official: Paal Braathen, Finance Director Completion date: May 17, 2023

Categories

Reporting Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 21783 2022-001
    Significant Deficiency Repeat
  • 598225 2022-001
    Significant Deficiency Repeat
  • 598226 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.498 Covid-19 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $199.87M
93.461 Covid-19 Hrsa Covid-19 Claims Reimbursement for the Uninsured Program and the Covid-19 Coverage Assistance Fund $2.91M
32.006 Covid-19 Telehealth Program $1.00M
93.958 Block Grants for Community Mental Health Services $528,753
93.323 Covid-19 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $456,904
97.036 Covid-19 Disaster Grants - Public Assistance (presidentially Declared Disasters) $325,773
93.959 Block Grants for Prevention and Treatment of Substance Abuse $301,966
93.994 Maternal and Child Health Services Block Grant to the States $231,787
20.600 State and Community Highway Safety $217,654
93.965 Coal Miners Respiratory Impairment Treatment Clinics and Services $199,586
93.155 Covid-19 Rural Health Research Centers $174,451
93.353 21st Century Cures Act - Beau Biden Cancer Moonshot $117,031
21.027 Covid-19 Coronavirus State and Local Fiscal Recovery Funds $50,087
93.395 Cancer Treatment Research $23,142
93.889 Covid-19 National Bioterrorism Hospital Preparedness Program $15,000
93.301 Small Rural Hospital Improvement Grant Program $11,722
93.110 Maternal and Child Health Federal Consolidated Programs $9,555
93.393 Cancer Cause and Prevention Research $9,194
93.173 Research Related to Deafness and Communication Disorders $6,712
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research $1,656