LADD MEMORIAL HOSPITAL, INC.

Finding 2021.004 Program Name/CFDA Title: Provider Relief Fund Federal Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Type of Finding: Significant Deficiency Compliance Requirement: Reporting Condition: The Medical Center indicated it was reporting ?Lost Revenue? under Reporting Option 2 ? Budget. The Medical Center should have indicated it was reporting "Lost Revenue" under Reporting Option 3 - Alternate Reasonable Methodology. Criteria: PRF payment amounts (excluding Nursing Home Infection Control Distribution payments) may be applied to patient care lost revenues. The PRF Reporting guidance allows for three options to use in calculating lost revenue. 1. Option 1 ? Actual is a comparison of actual revenues from 2019 to actual revenues from 2020 and 2021. 2. Option 2 ? Budget is a comparison of budgeted revenues to actual revenues during calendar years 2020 and 2021. This method may be used if the following three criteria are met. -An approved budget prior to March 27, 2020, which covers the entire period of availability -Budgeted revenues that are comparable to 2020 and 2021 actual revenues (i.e., apples-to-apples) -An executive-level attestation that the budget was approved prior to March 27, 2020. 3. Option 3 ? Alternate Reasonable Methodology is any reasonable method. This method allows providers to account for their unique circumstances, particularly where Options 1 or 2 may not appropriately capture their situation. Context: The Medical Center used the budget for the year ended December 31, 2020, as the baseline comparison period for the four quarters in 2020 and the budget for the year ended December 31, 2021, as the baseline comparison period for the first two quarters of 2021. The 2020 budget was approved prior to March 27, 2020, but the 2021 budget was approved after March 27, 2020. Since the Medical Center?s budget for the year ended December 31, 2021, was approved after March 27, 2020, it was not eligible or appropriate to use in the calculation of lost revenue under Option 2 - Budget. The Medical Center should have indicated it was reporting under Option 3 ? Alternate Reasonable Methodology and explained the reason for using the 2021 budget for the two quarters in 2021 of the reporting period. Cause: Management was not aware that it should have indicated it was reporting under Option 3 ? Alternate Reasonable Methodology and explained the reason for using the 2021 budget for the two quarters in 2021 of the reporting period. Effect: The description of the method utilized to calculate lost revenue was not appropriately reported in the HHS Provider Relief Fund Portal. Recommendation: We recommend management appropriately report the allowable reporting method used for calculating lost revenue in any future HHS Provider Relief Fund reporting. View of Responsible We will appropriately report the allowable reporting method used for calculating lost Officials: revenue in any future HHS Provider Relief Fund reporting

Ladd Memorial Hospital will appropriately report the allowance reporting method used for calculating lost revenue in any future HHS Provider Relief Fund reporting.