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Volume 22.11

In September 2022, the Department of Health and Human Services Office of Inspector General (“OIG”) released a report entitled “HHS’s and HRSA’s Controls Related to Selected Provider Relief Fund Program Requirements Could Be Improved” (“Report”).  The OIG’s objective was to determine whether HHS’s and HRSA’s controls ensured that providers received the correct payments from the Phase 1 general distribution.

The Report concludes that certain procedures were not established.  Specifically:

  1. Requesting and reviewing providers’ supporting documentation to verify the estimated revenue losses in March and April 2020,
  2. Subtracting the automatic payments made to providers’ subsidiaries when certain nonautomatic payments were calculated, and
  3. Specifying a deadline for providers to return rejected payments.

The Report further identified weaknesses in procedures including:

  1. Payment thresholds for manual review of information submitted by providers were set at a level that resulted in only two percent (2%) of providers undergoing manual review, and
  2. The process to open and view the data file containing subsidiaries’ taxpayer identification numbers (“TINs”) led to an error that caused the use of incorrect subsidiary TINs when payments were calculated.

Recommendations to HRSA included:

  1. Perform post payment quality review of selected provider,
  2. Review 189 providers that were identified for manual review,
  3. Seek repayment of overpayment to providers,
  4. Collect payments for those providers electing to return their payments, and
  5. Conduct a cost-benefit analysis for the manual review of additional providers.

The Report can be secured at HHS’s and HRSA’s Controls Related To Selected Provider Relief Fund Program Requirements Could Be Improved, A-09-21-06001.

The Report acknowledges that, initially, the primary objective of Phase 1 distributions was to disburse funds as quickly as possible to providers facing economic hardship during the COVID-19 PHE.  The quick payment was prioritized over making improper payments.

The Report, in our opinion, missed one significant weakness.  This weakness is the inability of the provider to amend report filings in the reporting portal.   Reporting errors could take a variety of forms; however, we are certain that many filings may be improved if a mechanism were available to amend filings.

The OIG audit of providers has been initiated.  Hopefully, providers will share the results of any audits.