Finding 404908 (2021-004)

Significant Deficiency

Requirement

Questioned Costs

Year

2021

Accepted

2024-07-01

Audit: 311307

Organization: Iroquois Memorial Hospital (IL)

Auditor: Wipfli LLP

AI Summary

Core Issue: The Hospital misused Provider Relief Funds by claiming expenses without accounting for Medicare reimbursements, violating federal guidelines.
Impacted Requirements: Noncompliance with the allowable costs criteria set by the U.S. Department of Health and Human Services.
Recommended Follow-Up: Management should review all submitted expenses and lost revenues for compliance and update internal reporting to avoid future issues.

Finding Text

Finding 2021.004 Program Name/CFDA Title: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs Condition: The Hospital did not meet its requirements to use the funds to prevent, prepare for, and respond to coronavirus and that the payment shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. Criteria: The Provider Relief Funds were provided under the Coronavirus Aid, Relief, and Economic Security Act (Pub. L. No. 116-136, 134 Stat. 563) and are to be used to prevent, prepare for, and respond to coronavirus and that the funds shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus.Context: During the audit, it was determined that there were a number of expenditures claimed as allowable COVID-19 expenses on the submission of expenses to the Health Resources and Services Agency (HRSA) without deducting for cost-reimbursement received from the Medicare program for the same items. The full amount of these expenditures are not an allowable COVID-19 expense under the Department of Health and Human Services guidelines for the use of Provider Relief Funds until after other applicable payor sources, such as Medicare program cost-reimbursement for being a Critical Access Hospital and Rural Health Clinic are accounted for. In addition, there are a minor amount of expenses with the submission of allowable expenses to HRSA which were included in duplicate or non-allowable based on other terms and conditions of the U.S. Department of Health and Human Services Provider Relief Funds. However, in review of all of these findings in the aggregate, it was noted that there was more than adequate amounts of lost revenue which could have been used in place of these expense items. The net of all of these items would have resulted in no recoupment by HRSA related to allowable COVID-19 expenses, but the reporting categories and tracking by management should be updated. Cause: Management oversight. Effect: The Hospital is not in compliance with federal regulations and guidelines surrounding the use of the Provider Relief Funds. Recommendation: We recommend that management review all the submitted expenses and lost revenue amounts for allowability under the criteria provided by the U.S. Department of Health and Human Services, and update its internal HRSA reporting as this may impact the ability to claim future expenses and/or lost revenues related to future Provider Relief Fund amounts received.

Corrective Action Plan

The CFO and accounting team at Iroquois Memorial Hospital and Resident Home worked with its financial statement auditors and the HRSA audit support desk for Provider Relief Funds to identify a plan to update its documentation as well as update its internal records to reflect allowable costs under the program. One of the updates included utilization of additional lost revenue to cover nonallowable expenses under the first phases of reporting for Provider Relief Funds due to elimination of some expenses and reduction for Medicare cost reimbursement against expenses. Management developed a more detailed expense log and review those against current terms and conditions prior to any future portal submissions and took into account the use of additional lost revenue. The worksheets were mocked up internally as if these were submitted in the portal in Phase I reporting so that in the future for the next phases of reporting, these lost revenues are not utilized toward future Provider Relief Funding. One additional control being added for this reporting is that the CEO and CFO will be also completing a detailed review of the spreadsheets for entry into the portal and comparing this to the Compliance Supplement which governs the use of the Provider Relief Funds as to allowable costs as well as the Frequently Asked Questions (FAQs) available on HRSAs website. This may impact future reports, so management will ensure to take these updates into account on any future provider relief funds are they are released or future grant receipts if the Organization receives new grants in the future.

Other Findings in this Audit

404909 2021-005

Significant Deficiency
981350 2021-004

Significant Deficiency
981351 2021-005

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
93.498	Provider Relief Fund	$4.54M
97.036	Disaster Grants - Public Assistance (presidentially Declared Disasters)	$265,595
93.697	Covid-19 Testing for Rural Health Clinics	$197,846
93.461	Covid-19 Testing for the Uninsured	$118,028
93.301	Small Rural Hospital Improvement Grant Program	$84,090
93.889	National Bioterrorism Hospital Preparedness Program	$47,811
21.019	Coronavirus Relief Fund	$21,331