Finding Text
2020-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (prior two years 2019-103 and 2018-006) (initially reported 2014)
Assistance Listing Number: 93.224
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care)
Compliance Requirement: Special Tests and Provisions – Sliding Fee Discounts
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020)
Finding Type: Material Weakness in Internal Control
Known Questioned Costs: $0
Condition: The Organization lacks consistently applied processes and procedures related to the application of the sliding fee scale. The Organization also lacks a clear review process related to the sliding fee scale to identify errors quickly to allow for corrections to be made in a timely manner.
Of twenty-seven encounters reviewed, we identified the following deficiencies and noncompliance with applicable requirements associated with application of the sliding fee scale.
- Six of the twenty-seven encounters sampled were related to a program the Organization has in place with the local school district in which they provide services to students. The agreement specifically does not allow the Organization to obtain information related to household size and income as needed to appropriately place the family on the sliding fee scale. The agreement also indicates no amounts can be collected from the students, except when that student has insurance which allows the Organization to bill the insurance company for a portion of the fees.
- One of the twenty-seven encounters sampled was related to the disaster recovery bus program that did not charge the patients for services.
- Seven of the twenty-seven encounters sampled had the wrong sliding fee scale applied based on information obtained about the patient’s family size and income.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Health centers must prepare and apply a sliding fee discount schedule, so that the amounts owed for health center services by eligible patients are adjusted based on the patient's ability to pay ( 42 U.S.C 254b(k)(3)(G)(i)). The patient's ability to pay is based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services (42 U.S.C 9902(2)).
Cause: Failure to apply the sliding fee correctly, as noted in seven of the encounters above, was due to improper staff training or failure to properly monitor the process. Failure to obtain the required documentation associated with the six encounters above is due to the requirements of the agreement with the local school district, and one is due to procedures applied to the disaster recovery bus program that does not follow the written procedures of the Organization for use of the sliding fee scale.
Effect: The Organization could be incorrectly billing for services and maintaining customer account balances at incorrect amounts.
Recommendation: Staff should be consistently trained in how patients should complete the intake forms, including the sliding fee scale application, and require patients complete the form appropriately, including refusal to provide information, if applicable. Staff should also be consistently trained on what documentation is considered sufficient to support income identified as well as verify the application is consistent with the documentation and, when needed, clearly document the reasons for inconsistency. Staff should make every effort to obtain documentation of patient income in accordance with internal policies and procedures.
Patients should be billed the usual and customer billing rates for all services until all documentation is received or policies are adjusted to allow for self-determination by patients in certain situations. A process should be put in place to track patients in order to attempt further collection of the necessary data that would allow for adjustment of the bill after the fact when necessary. These exceptions should be tracked each month with the monthly review by the regional operations managers. The reviews by the regional operations managers should be documented and retained including the results and corrective action of the follow-up on deficiencies noted.
The Organization should discuss with HRSA what could be done to either adjust policies and procedures used during the school visits to be compliant or obtain a waiver from HRSA to indicate their knowledge and approval of the school visits and disaster bus program visits not being compliant with the application of the sliding fee scale requirements.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Organization’s policies for the sliding fee scale were recently updated during fiscal year 2022, by management, based on findings during the monitoring by HRSA performed in 2022, but management will consider discussing potential improvements to their policy with the grantor to potentially update it to allow for certain exceptions. The Organization will also consider discussing the agreement with the local school district in more detail with the grantor to either structure their policies to allow for these visits to have different requirements or to see if the grantor would be willing to provide a waiver with regards to theses visits not being technically in compliance with other regular clinic visits. The planned corrective action for this finding is currently in the process of development, approval, and implementation. The Organization expects to have the corrective action implemented by March 1, 2023. The Organization will continue to engage the consulting services of the professional certified accounting firm to assist in this process through completion.