Finding 7519 (2023-001)

Identification: 93.498 United States Department of Health and Human Services, Provider Relief Fund and American Rescue Plan Rural Distribution; Noncompliance Finding/Significant Deficiency; Activities Allowed or Unallowed Compliance Requirement Criteria: Provider Relief Fund (PRF) and American Rescue Plan Rural Distribution was established under the Coronavirus, Aid, Relief, and Economic Security Act (Pub. L. No. 116‐136, 134 Stat. 563) and the Coronavirus Relief and Response Supplemental Appropriations Act (Pub. L. No. 116‐260) and the American Rescue Plan Act of 2021 (Pub. L. No. 117-2). The PRFs are to be used to prevent, prepare for, and respond to coronavirus. The PRFs are to reimburse recipients only for healthcare related expenses or lost revenues that are attributable to coronavirus. The PRF funds may not be used to reimburse expenses or losses that have been reimbursed by other sources or that other sources are obligated to reimburse. Condition: The Medical Center is cost reimbursed from Medicare for certain services provided to Medicare beneficiaries. The Medical Center claimed expenses attributable to coronavirus and reduced such expenses by an estimate of the amount Medicare would reimburse. In reviewing this estimate we noted that overall Medicare reimbursement is higher per Medicare cost reports than the percentage estimated by the Medical Center. Cause: The Medical Center used judgment in estimating the amount reimbursed however this estimate was lower in comparison to actual Medicare reimbursement for the periods in which the COVID-19 expenditures occurred. Effect: The potential for costs to be claimed that have been reimbursed by other sources or that other sources were obligated to reimburse. Questioned Costs: $161,695. Perspective Information: Questioned costs were estimated by taking the total amount of PRF expenditures multiplied by the Hospital's internally calculated Medicare reimbursement rate based on filed Medicare cost reports. Repeat Finding: N/A Recommendations: We recommend the Medical Center estimate the reimbursement from Medicare to be based on Medicare cost report reimbursement percentages from recent cost report filings. Views of Responsible Officials: The Hospital agrees with this finding. See separate auditee document for planned corrective action.