Finding Text
2024-002 – Significant Deficiency in Internal Control and Noncompliance with Special Tests and
Provisions in Application of Organization's Sliding Fee Discounts Policy
Identification of federal
program: 93.224 and 93.527 – Health Center Program Cluster
Criteria: Health centers must prepare and apply a sliding fee discount schedule
(SFDS) so that the amounts owed for health center services by eligible
patients are adjusted (discounted) based on the patient’s ability to pay.
Condition: The Organization has approved a SFDS policy that is consistent with
requirements based on federal poverty guidelines and which requires
eligible patients to pay a nominal fee as outlined in a Sliding Fee Co-
Payment schedule. During the year, the control that was designed
failed to ensure the proper application of slide adjustments to patient
accounts, which resulted in some patients paying amounts that were
not in accordance with the SFDS. Cause: There was turnover during the year where individuals processing the
adjustments may not have understood the policy and did not properly
apply it to the patient. Additionally, the Organization changed the
application form during the year and did not properly monitor and
test to ensure that correct rates were being applied.
Effect or potential effect: The Organization was not in compliance with special tests and
provisions during the year. Misapplication of the policy could result in
eligible patients being charged in excess of what is permitted by the
SFDS, and conversely, excess discounts of patient balances over the
adopted policy could result in financial losses to the Organization.
Questioned Costs: N/A
Context: During review of the SFDS and the eligibility application utilized by
the Organization as a part of their process of determining and
documenting the discounts applicable, the auditor reviewed the
application completed for 40 patient accounts, in which it was noted:
One instance where an approved eligibility application was not
filed and retained but the discount was still applied.
Four instances where the application was backdated to the
date of service, rather than an application being completed on
the date of service.
Five instances where staff review and approval of the
application was not documented in the “For Office Use Only”
section but the discount was still applied.
Five instances where the old version of the eligibility
application was utilized, and the date of service occurred after
the new application was to have been implemented.
Seven instances where the amount charged to the patient was
not in accordance with the SFDS co-payment fee schedule.
Identification of Repeat
Finding: Repeat of finding 2023-002.
Recommendation: We recommend the Organization improve processes to ensure that
the patient’s application is appropriately reviewed and documented
approval on the form by trained staff personnel, and that all
documentation be retained. Additionally, ensure that the staff
processing patient billings and slide adjustments understand the policy
and the system application to patient accounts to ensure accuracy and
that correct rates and discounts are being used in accordance with the
approved copayment fee schedule.
Views of Responsible
Officials: See Corrective Action Plan.