Finding Text
2023-002
Programs: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
CFDA Number: 93.498
Federal Agencies: U.S. Department of Health and Human Services
Passed-Through Entities: N/A
Award Number: N/A
Award Year: Various
Compliance Requirement: Allowable Costs / Cost Principles
Questioned Costs: None
Criteria: The terms and conditions of the Provider Relief Fund state that funds are not to be used to reimburse expenses or lost revenue that have been reimbursed from other sources or that other sources are obligated to reimburse.
Condition and Context: During the process of identifying expenses that were incurred to prevent, prepare for or respond to the COVID-19 pandemic during Reporting Periods 1-3, the Medical Center accumulated expenses related to prescription drugs used to treat COVID-19 patients. However, the cost of the prescription drugs was not reduced by amounts reimbursable from other sources, specifically reimbursed through third-party payors.
Cause: The Medical Center incurred significant costs when treating COVID-19 patients that was not fully reimbursed through third-party payors. However, management reported in the HRSA reporting portal during Reporting Periods 1-3 the full amount of the costs of the prescription drugs used to treat COVID-19 patients, including portions that were reimbursed through third-party payors instead of performing an analysis and claiming only the incremental cost related to COVID-19 treatments that were in excess of the reimbursed amounts.
Effect: Expenses reported in the PRF reporting portal during Reporting Periods 1-3 were not reduced by amounts reimbursable from other sources, specifically reimbursements received from third-party payors. However, the Medical Center does have sufficient other expenditures and eligible lost revenues to recognize all funding received in the reporting period.
Recommendation: We noted that management discontinued capturing prescription drugs as reimbursable expenses under the Provider Relief Fund during Reporting Period 4. However, the lost revenue calculations were not adjusted to deduct the unallowable costs to avoid reimbursement for the same expenses or lost revenue. We recommend that management update the internal calculation of lost revenues to deduct the unallowable costs to demonstrate and support that there is no reimbursements for the same expenses or lost revenue. In the event the Medical Center receives a request from the federal agency or another party to audit the use of the funds, the most accurate and up-to-date information should be available.
View of Responsible Official: The Medical Center agrees with this finding.