Finding 404702 (2023-001)

2023-001 Provider Relief Fund Lost Revenue Reporting Cluster: Not applicable Grantor: Health Resources and Services Administration Award Name: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Award Year: PRF Period 4 of Availability from January 1, 2020 to December 31, 2022 Award Number: Not applicable Assistance Listing Number: 93.498 Criteria Step 8 of the Steps on Reporting on Use of Funds section of the April 22, 2024 Provider Relief Fund (PRF) General and Targeted Distribution Post-Payment Notice of Reporting Requirements requires recipients that apply PRF payments toward lost revenues, calculated as the difference between actual patient care revenues, to submit revenues from patient care in the PRF Reporting Portal by quarter from January 1, 2019 to December 31, 2022, the end of the Period 4 period of availability. Condition UMass Memorial Health – Harrington, Inc. and Affiliates (Harrington), a wholly controlled subsidiary of the System, understated patient care revenues reported in the PRF Reporting Portal for the third and fourth quarters of calendar year 2021 by approximately $6.2 million. Specifically, Harrington Hospital, Inc. (HMH) and Harrington Physician Services (HPS) reported incorrect values for patient care revenues in these quarters resulting in an understatement of patient care revenues in the PRF Reporting Portal by approximately $5.7 million and $0.5 million, respectively. This is a recurring finding that was identified as part of the Harrington program-specific standalone audit for the year ended September 30, 2022. Cause Harrington did not have an effective control in place to ensure a sufficient review was performed over the accuracy of revenues from patient care used as inputs to the lost revenue calculation prior to completing the PRF Period 4 Reporting Portal submissions. Effect While revenues from patient care were inaccurately reported in the PRF Period 4 Reporting Portal Submission, Harrington had sufficient lost revenues and unreimbursed COVID-19-related expenses to support the amount of Period 4 PRF funding received. Questioned Costs None identified. Recommendation We recommend that management ensure there is an effective control in place whereby a detailed review is performed and evidenced of the lost revenue calculation detail prior to PRF Reporting Portal submissions. Management’s Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report after the summary schedule of prior audit findings and status.