NORTHLAND HEALTH PARTNERS COMMUNITY HEALTH CENTERNon-Profit

Significant Deficiency – Sliding Fee Discount Program Information on Federal Program: U.S. Department of Health and Human Services – Health Center Program Cluster AL# 93.224 and 93.527 Criteria Section 42 USC 254b(k)(3)(E), (F), and (G); 42 CFR sections 51c.303(e), (f), and (g); and 42 CFR sections 56.303(e), (f), and (g)) requires that health centers provide discounted fees for individuals and families with incomes above 100% and at or below 200% of the federal poverty guidelines. Condition For the year ended January 31, 2025, we requested the supporting documentation for a sample of patient visits with discounted fees under the sliding fee program to support that patients were eligible for the discount and that it was applied in accordance with the Center’s internal policies and procedures. In a sample of 40 patient visits, we noted one patient visit where discounted fees were applied incorrectly and one where the SFS audit form was incomplete. Cause Internal controls, while designed appropriately, were not implemented consistently to allow for the detection and correction of these types of errors. Effect or potential effect The sliding fee discount program may not be operating in accordance with federal regulations causing a potential loss of funding. Questioned costs None noted. Context One patient visit had the sliding fee discount applied to their account at a higher level than what they qualified for based on their income and family size. One patient’s SFS audit form was completed incorrectly with the income verification not fully supported based on the Organization’s policy. Repeat finding This is a repeat finding of finding 2024-003 from the prior year. Recommendation The entity should revisit their current internal control policies and provide additional training for staff to ensure compliance with documented controls. Additional research should be done into the cause of the incorrectly applied sliding fee discounts to determine if this was a system issue to determine the best course of action. If this is determined to be a manual adjustment done incorrectly, we recommend additional training be provided to staff as well as additional controls to review the manually applied discounts for accuracy.

2024 – 003: Significant Deficiency – Sliding Fee Discount Program Information on Federal Program: U.S. Department of Health and Human Services – Health Center Program Cluster AL# 93.224 and 93.527 Criteria – Section 42 USC 254b(k)(3)(E), (F), and (G); 42 CFR sections 51c.303(e), (f), and (g); and 42 CFR sections 56.303(e), (f), and (g)) requires that health centers provide discounted fees for individuals and families with incomes above 100% and at or below 200% of the federal poverty guidelines. Condition – For the year ended January 31, 2024, we requested the supporting documentation for a sample of patient visits with discounted fees under the sliding fee program to support that patients were eligible for the discount and that it was applied in accordance with the Center’s internal policies and procedures. In a sample of 40 patient visits, we noted two patient visits where discounted fees were applied incorrectly and one where the SFS audit form wasn’t completed correctly. Cause – Internal controls, while designed appropriately, were not implemented consistently to allow for the detection and correction of these types of errors. Effect or potential effect – The sliding fee discount program may not be operating in accordance with federal regulations causing a potential loss of funding. Questioned costs – None noted. Context – One patient visit had the sliding fee discount applied to their account at a higher level than what they qualified for based on their income and family size. One patient had sliding fee discounts applied to their charges after their previous application had expired and another application was not completed. One patient’s SFS audit form was completed incorrectly not supporting the SFS calculation in the file. Repeat finding – This is a new finding. Recommendation – The entity should revisit their current internal control policies and provide additional training for staff to ensure compliance with documented controls. Additional research should be done into the cause of the incorrectly applied sliding fee discounts to determine if this was a system issue to determine the best course of action. If this is determined to be a manual adjustment done incorrectly, we recommend additional training be provided to staff as well as additional controls to review the manually applied discounts for accuracy.

Criteria The Organization must follow procurement policies in accordance with Uniform Guidance 2 CFR 200.318. Condition The Organization did not follow their procurement policy for the purchase of a van. Cause Oversight by management and breakdown of controls for monitoring compliance. Effect The Organization is not incompliance with Uniform Guidance 2 CFR 200.318. Recommendation The Organization should review their current procurement policy for updated thresholds and compliance with Unform Guidance and implement controls to ensure compliance. Views of Responsible Officials and Planned Corrective Actions Management has implemented process and controls to adhere to procurement process or produce adequate documentation as to why it was not followed. Indication of Repeat Finding None.

2019-003: Material Weakness - Program Income / Application of SFS Discount Criteria The Organization is required to have a schedule of fees or payments for the provision of their health services consistent with locally prevailing rates or charges and designed to cover their reasonable costs of operation. The corresponding schedule of discounts applied and adjusted should be based on the patient?s ability to pay. The patient?s ability to pay is determined based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services. Condition During our testing of the Sliding Fee Schedule (SFS), we noted the Organization properly has an SFS schedule whereby the basis of the patient?s ability to pay is based upon the patient?s income, using the federal poverty guidelines as a basis for the percentage of the SFS discount. However, in three of the forty patient files tested, the SFS discount was improperly applied and the patient should have paid more. Cause The Organization is not following policies and procedures set in place to ensure the SFS discount is correctly determined and applied to patient accounts. Effect The SFS discount applied is incorrect. Recommendation We recommend management correctly apply the SFS discount. Management should review policies and procedures regarding the SFS program with staff that is responsible for determining the SFS discount. Views of Responsible Officials and Planned Corrective Actions Management will correctly apply the SFS discounts to all patient accounts and review all current accounts for proper SFS discounts. Management will train and guide Patient Services to verify income status and assure SFS are applied correctly. Indication of Repeat Finding This is a repeat finding in the current year.

2019-003: Material Weakness - Program Income / Application of SFS Discount Criteria The Organization is required to have a schedule of fees or payments for the provision of their health services consistent with locally prevailing rates or charges and designed to cover the reasonable costs of operation. The corresponding schedule of discounts applied and adjusted should be based on the patient?s ability to pay. The patient?s ability to pay is determined based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services. Condition During our testing of the Sliding Fee Schedule (SFS), we noted the Organization properly has an SFS schedule whereby the basis of the patient?s ability to pay is based upon the patient?s income, using the federal poverty guidelines as a basis for the percentage of the SFS discount. However, in three of the forty patient files tested, the SFS discount was incorrectly calculated based on income and one file where the Organization did not follow their internal controls policy regarding the SFS discount. Cause The Organization is not following policies and procedures set in place to ensure the SFS discount is correctly determined and applied to patient accounts. Effect The SFS discount applied is incorrect. Recommendation We recommend management correctly apply the SFS discount. Management should review policies and procedures regarding the SFS program with staff that is responsible for determining the SFS discount. Views of Responsible Officials and Planned Corrective Actions Management will correctly apply the SFS discounts to all patient accounts and review all current accounts for proper SFS discounts. Management will train and guide Patient Services to verify income status and assure SFS are applied correctly. Indication of Repeat Finding This is a repeat finding of finding 2018-003 in the prior year.

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