Finding Text
2022-003 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution ? Assistance Listing No. 93.498U.S. Department of Health and Human ServicesCriteria or Specific Requirement ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623) and Reporting (45 CFR 75.342)Condition ? Within the Provider Relief Fund Reporting Portal for Period 1, the Organization reported other Provider Relief Fund (PRF) expenses and lost revenues calculated using option iii. The financial records utilized by management in the preparation of the Period 1 report contained a material error.Questioned Costs ? NoneContext ? The Period 1 PRF report was tested. The Organization calculated lost revenues based on the financial records available during the PRF reporting window; however, during the preparation of the Organization?s Missouri Medicaid cost report for the fiscal year ended May 31, 2021, which was after the PRF reporting window closed, it was determined that those financial records contained a material understatement of patient service revenue.Effect ? Lost revenues attributable to coronavirus, as reported in the Period 1 PRF report, were overstated.Cause ? The process of calculating the Missouri Medicaid cost report settlement is complex. Further, effective July 1, 2020, reimbursement for services to Missouri Medicaid beneficiaries enrolled in managed care changed, allowing the Organization to submit requests for interim payments throughout the year. Errors in these requests led the Organization to being entitled to more reimbursement through the Medicaid cost report than initially expected. Management?s valuation of patient service revenue at the time of preparing the Period 1 PRF report did not consider the errors in interim payment requests or the extent increased costs, which resulted in a material increase to patient service revenue and reduction to lost revenues attributable to coronavirus. This increase did not impact PRF payments used for lost revenues in Period 1.Identification as a repeat finding, if applicable ? Not a repeat finding.ReferenceNumber Finding2022-003 (Continued) Recommendation ? The Organization should strengthen controls surrounding the preparation of financial reports required to be prepared and submitted for federal grants to ensure they are prepared using complete and accurate financial information.Views of responsible officials and planned corrective actions ?