Finding 507785 (2024-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2024-11-13
Audit: 328268
Organization: Petaluma Health Center, Inc. (CA)
Auditor: Moss Adams LLP

AI Summary

  • Core Issue: There is a significant deficiency in internal controls over compliance with federal regulations, specifically regarding the application of sliding fee discounts for patients.
  • Impacted Requirements: Compliance with 2 CFR Part 200 is not being met, leading to inconsistent billing practices that do not align with the sliding fee discount schedule.
  • Recommended Follow-Up: Ensure the IT service provider configures the electronic health record system correctly, provide staff training, and conduct regular system reviews to maintain compliance.

Finding Text

Finding 2024-001 – Special Tests and Provisions – Significant Deficiency in Internal Control over Compliance Federal Program: U.S. Department of Health and Human Services Health Center Program Cluster (Federal Assistance Listing # 93.224/93.527) Federal Agency: U.S. Department of Health and Human Services Award Year: 2023-2024 Criteria: The recipient is required to comply with specific federal regulations and provisions outlined in 2 CFR Part 200, particularly those related to special tests and provisions for the Health Center Program Cluster. This includes maintaining an effective internal control environment to ensure sliding fee discounts are applied to patient charges consistent with the recipients sliding fee discount schedule. Condition/Cause: During the audit, it was identified that the implementation of the new electronic health record system significantly impacted the Organization’s control environment. As a result, the control system did not consistently apply the appropriate sliding fee discounts for patients based on qualification criteria. Effect: Certain patients were billed amounts less than the amounts defined by the sliding fee discount schedule due to the control system inconsistencies. Questioned costs: None since patients were billed amounts less than the sliding fee discount schedule. Context: We selected a sample of 25 patient visits from a statistically valid population of patients potentially eligible for benefits under the sliding fee schedule during the fiscal year ended June 30, 2024. In 11 out of 25 samples tested, the Organization’s system limitations resulted in patients being billed less than the amounts defined by the sliding fee discount schedule. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Organization ensures its third-party IT service provider appropriately configures its electronic health record system for compliance with federal award requirements, and that staff using the electronic health record system are provided comprehensive training of the system to ensure that the sliding fee scale is accurately applied to all qualifying program participants. Additionally, we would recommend the Organization perform regular reviews to ensure there are no issues with the system. Views of responsible officials: The Organization has started conversations with its third-party IT service provide who facilitated the implementation of its electronic health record system, to address concerns regarding the system’s current configuration. It plans to collaborate with the provider to rectify the identified limitations within the system, as well as update its policies and procedures to include regular system reviews to ensure the system is effectively operating.

Corrective Action Plan

Finding 2024‐001 – Special Tests and Provisions – Significant Deficiency in Internal Control over Compliance It was identified that the implementation of a new electronic health record system significantly impacted the control environment as it relates to compliance with federal awards. As a result, the control system did not consistently apply the appropriate sliding fee discounts for patients based on qualification criteria and certain patients were billed amounts less than the sliding fee discount schedule. To address the finding related to system limitations that resulted in patients being billed amounts lower than those specified in the sliding fee discount schedule, the Organization will implement a comprehensive corrective action plan. First, a thorough review of the electronic health record system will be conducted to identify specific limitations as it relates to data capture of federal poverty level at time of patient registration. This has already been completed. Second, the Organization will modify the set-up of its electronic health record to systematically seek approved and active documentation related to sliding fee discounts and will modify the system to not allow sliding fee discounts without the presence of said documentation. The Organization is in the process of setting a meeting to modify its system build, which it expects to be finalized in 30 calendar days. To ensure ongoing compliance, regular monitoring procedures will be established to review data capture accuracy, with the Chief Financial Officer overseeing this effort and the first review scheduled for 30 calendar days from the date on which the electronic health record system fix is implemented. Finally, thorough documentation of all corrective actions taken, including system changes and monitoring results, will be maintained. The Chief Financial Officer will report findings to management on a monthly basis, with the first report due one month from date on which the system fix is implemented. Through these measures, the Organization aims to enhance billing accuracy, ensure compliance with federal requirements, and prevent future discrepancies.

Categories

Internal Control / Segregation of Duties Special Tests & Provisions Significant Deficiency

Other Findings in this Audit

  • 507786 2024-001
    Significant Deficiency
  • 507787 2024-001
    Significant Deficiency
  • 507788 2024-001
    Significant Deficiency
  • 507789 2024-001
    Significant Deficiency
  • 1084227 2024-001
    Significant Deficiency
  • 1084228 2024-001
    Significant Deficiency
  • 1084229 2024-001
    Significant Deficiency
  • 1084230 2024-001
    Significant Deficiency
  • 1084231 2024-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund $3.66M
93.493 Congressionally Directed Spending for Construction Projects $203,824
93.247 Advanced Nursing Education Grant Program $174,664
93.526 Fip Verification $98,910
93.527 Affordable Care Act (aca) Grants for New and Expanded Services Under the Health Center Program $94,844
93.958 Block Grants for Community Mental Health Services $39,972
21.027 Coronavirus State and Local Fiscal Recovery Funds $35,523
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $23,556
93.224 Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $17,500