After more than two years since the initial Provider Relief Fund (“Fund”) disbursement, hospices are beginning to see audits of their Fund expenditures by the U.S. Department of Health & Human Services (“HHS”) Office of the Inspector General (“OIG”). The audits may have been triggered, in part, by OIG’s report issued in September 2022 titled “HHS’s and HRSA’s Controls Related to Selected Provider Relief Fund Program Requirements Could Be Improved.” In that report, the OIG found that HHS and the Health Resources and Services Administration (“HRSA”) did not have the following procedures in place that would have helped to ensure Funds were expended appropriately:
- requesting and reviewing providers’ supporting documentation to verify the estimated revenue losses in March and April 2020;
- subtracting the automatic payments made to providers’ subsidiaries when certain nonautomatic payments were calculated; and
- specifying a deadline for providers to return rejected payments.
HHS also found that procedures that were in place had weaknesses.
Regarding the specific audits OIG is performing, reporting indicates that they are targeted based on location and amount of Funding received and are focused on Phase 1 Funds. OIG’s requests have included payment and attestation data and narrative descriptions from hospices regarding how Funds were expended. As a reminder, all Fund disbursements required the recipient to attest to acceptance of the Terms and Conditions, which include terms related to auditing. For example, the first set of Terms and Conditions stated:
The Recipient shall maintain appropriate records and cost documentation including, as applicable, documentation described in 45 CFR § 75.302 – Financial management and 45 CFR § 75.361 through 75.365 – Record Retention and Access, and other information required by future program instructions to substantiate the reimbursement of costs under this award. The Recipient shall promptly submit copies of such records and cost documentation upon the request of the Secretary, and Recipient agrees to fully cooperate in all audits the Secretary, Inspector General, or Pandemic Response Accountability Committee conducts to ensure compliance with these Terms and Conditions. (emphasis added).
The hospice industry should expect more audits of Funding use, especially for subsequent phases of funding (including Targeted Funds, if applicable) and of providers that received significant amounts of Funding. These providers should review their recordkeeping with respect to Funding and make sure expenditures were appropriately linked to a valid loss or expense, as defined by HRSA.
For more information, please contact AGG Healthcare attorneys Jason Bring or Alex Foster.