NORTHWELL HEALTH, INC.Non-Profit

Information on the federal program Grantor: Department of Health and Human Services, Health Resources and Services Administration Program Name: COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured Award period: February 4, 2020 through December 31, 2020 Federal Assistance Listing Number: 93.461 Criteria or specific requirement (including statutory, regulatory or other citation) A. Activities Allowed or Unallowed ? Activities allowed include required primary health services as described in the terms and conditions of the award for uninsured individuals, including: - Reimbursement for COVID-19 testing and testing-related items for individuals who do not have coverage through an individual or employer-sponsored plan, a federal healthcare program, or the Federal Employees Health Benefits Program at the time the services were rendered. - Reimbursement for treatment of uninsured individuals when COVID-19 is the primary reason for treatment. E. Eligibility ? Services must be for individuals who at the time the services were provided were uninsured as described in the terms and conditions of the award. Title 2 U.S. Code of Federal Regulations, Part 200.303 states the following regarding internal control: ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? Health and Human Services (HHS) ? Health Resources and Services and Administrative (HRSA) issued Terms and Conditions for Participation in the HRSA COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured Program outlining requirements that recipients of funding from the HRSA COVID-19 Uninsured Program must comply with including the following sections: Testing Services, Treatment Services and Vaccine Administration, and General Provisions in FY2020 Consolidated Appropriations. Condition Certain claims submitted to the Health Resources and Services Administration (HRSA) for reimbursement were not in compliance with the program?s terms and conditions for participation. Certain claims were submitted for an insured individual or for services rendered that were unrelated to COVID-19. Cause Management?s review control to verify whether claims submitted to HRSA were in accordance with the terms and conditions of the award was not consistently performed. As a result, management?s control did not detect the errors identified above and the claims were submitted to HRSA. Effect or potential effect The inconsistent application of management?s control over these compliance requirements resulted in noncompliance including questioned costs. Questioned costs Questioned costs of $639 were identified, representing payments received from HRSA on claims for which Northwell did not comply with the terms and conditions of the program. The total sample value tested was $9,600 and total program expenditures in 2020 were approximately $10.8 million. Context In a sample of 60 claims, four claims were found to be noncompliant with the program?s terms and conditions: - Three COVID-19 testing claims were identified as having active insurance coverage. - One claim for physician services was submitted to HRSA that did not have a positive COVID-19 diagnosis. All claims described above were submitted to, and reimbursed by, HRSA. Identification as a repeat finding, if applicable N/A Recommendation Prior to claim submission, management should review the services rendered to ensure claims for reimbursement to HRSA are submitted for services rendered related to COVID-19 and in line with the terms and conditions of the program. Management should also refine its control to ensure that claims are being fully assessed for insurance coverage, utilizing insurance records on hand, prior to submitting claims to HRSA. Views of responsible officials Since the inception of the HRSA COVID-19 Uninsured Program in 2020, management has improved its processes and internal controls through additional staff training and enhanced claim reviews to help ensure only eligible claims are submitted for services to uninsured patients related to the treatment of COVID-19 at Northwell?s hospitals or by its employed physicians, or for COVID-19 lab testing or vaccine administration. Such processes include an insurance verification process to help ensure that claims are for patients without insurance coverage and other eligibility requirements checks. In addition, it is management?s understanding that the vendor administering the program on behalf of HRSA also runs submitted claims through its own insurance verification process and may also be checking to ensure claims are for COVID-19 treatment, testing or vaccine administration before paying. Northwell refunded the four claims mentioned above in the findings and to the extent Northwell has become aware of any other erroneous payments received under the program, it has returned the funds to HRSA.

Information on the federal program Research and Development Cluster Federal Agency: U.S. Army Medical Research Acquisition Activity CFDA Number, CFDA Name, Direct Award Number/PTE Number and Award period: 12.420 Military Medical Research and Development W81XWH-17-1-0657 and W81XWH-15-1-0614 9/30/17 ? 9/29/20 and 9/30/15 ? 9/29/20 Federal Agency: National Institute of Health CFDA Number, CFDA Name, Direct Award Number/PTE Number and Award period: 93.855 Allergy and Infectious Diseases Research 5UM1AI110498-05 1/1/17-10/31/19 93.859 Biomedical Research and Research Training R01GM121102 8/1/17-4/30/21 Criteria or specific requirement (including statutory, regulatory or other citation) I. Procurement, Suspension and Debarment In December 2013, the Office of Management and Budget (OMB) issued Title 2 U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance or 2 CFR 200) effective for awards issued on or after December 26, 2014. The Uniform Guidance changes included revised procurement requirements for direct cost expenditures under federal awards. Due to the complexity and significance of the changes to the procurement standards, the OMB established a three-year grace period for the implementation. As such, for Northwell Health, Inc. (Northwell), the effective date of the new procurement standards was January 1, 2018 for procurements of direct costs made under federal awards that are subject to Uniform Guidance. 2 CFR section 200.303 requires that a non-federal entity establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Under the new procurement standards, there are five methods of procurement based on dollar thresholds and the nature of the expenditures with prescribed documentation requirements for each. One of the procurement methods is ?small purchases? which are purchases greater than $10,000 (the Micro Purchase Threshold) but less than $250,000 (the Simplified Acquisition Threshold). In accordance with 2 CFR section 200.320(b) ?Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.? Generally, receiving price or rate quotations from more than one source would satisfy the small purchase requirements. In accordance with 2 CFR section 200.320(f), another procurement method is procurement by noncompetitive proposals, which is procurement through solicitation of a proposal from only one source and may be used in certain circumstances (e.g., if the item is available only from a single source). Condition In order to test internal controls established by Northwell and to test Northwell?s compliance with the procurement requirements under the research and development cluster for activity during the year ended December 31, 2019, we selected a sample of 30 procurement-related expenditures totaling $140,117 from a population of 6,486 procurement-related expenditures totaling $2.7 million. In our sample we noted four procurement transactions which were subject either to the small purchase requirements or procurement by noncompetitive proposals (totaling $108,872). For these selections, at the time of purchase, Northwell did not have evidence of obtaining price or rate quotations in accordance with the small purchase requirements or evidence that the item was only available from a single source at the time of purchase. Management informed us that a cost or price analysis was performed. Cause Northwell?s formal procurement policy which incorporated the new Uniform Guidance procurement requirements was not approved until July 18, 2019 and not implemented until September 6, 2019. Effect or potential effect Northwell was not in compliance with the Uniform Guidance procurement requirements. The best price or rate may not be obtained if Northwell does not obtain the supporting price quotes or evidence of a single source at the time of purchase. However, in these instances, during our testing procedures, subsequent to purchase, management obtained and provided supporting documentation to support the price or rate quotations or evidence of a single source for these procurement transactions. Questioned costs None. Context Procurement-related expenditures for the research and development cluster totaled $2.7 million for the year ended December 31, 2019 representing 9% of the major program?s federal expenditures of $28.6 million. Identification as a repeat finding, if applicable This is a repeat finding. The prior year finding reference is 2018-001. Recommendation Northwell should adhere to and evaluate its compliance with its revised procurement policy adopted in September 2019 and evaluate whether it appropriately follows the necessary provisions of the new procurement standard as outlined in 2 CFR sections 317 ? 326, including the requirements to retain price and rate quotations for small purchases and appropriate documentation of a single source. Views of responsible officials Northwell?s updated procurement policy for federally sponsored programs was formally approved by Northwell?s Policy and Procedure Committee and implemented in September 2019. The Grants Management Office (GMO) has advised faculty and grant administrators of the revised policy and has incorporated a process whereby the GMO will reject any purchase requisitions forwarded to its attention prior to the generation of purchase orders, that do not meet the requirements of the revised procurement policy which conforms to the requirements of 2 CFR 200 317 ? 326.

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