GLENCOE REGIONAL HEALTH SERVICESNon-Profit

2021-002 Federal agency: U.S. Department of Health and Human Services Federal Program Title: Provider Relief Funds Assistance Number Listing: 93.498 Type of Finding: Material Weakness in Internal Control Over Compliance and Questioned Costs Criteria or Specific Requirement: As outlined in the Terms and Conditions, Provider Relief Fund (PRF) payments may be used to prevent, prepare for, and respond to coronavirus, and for related expenses or lost revenues from health care services attributable to coronavirus. PRF payments cannot be used when another source has reimbursed or is obligated to reimburse those expenses or losses. Condition: During our testing we noted COVID-19 expenses were not reduced or offset by the estimated cost based reimbursement the Hospital receives from Medicare due to being a Critical Access Hospital (CAH) prior to being reported to Health Resources and Services Administration (HRSA) in the Hospital?s Period 1 report. Context: The Hospital used PRF payments to pay for a total of $1,291,522 of COVID-19 identified expenses that should have been reduced by about 52%, the Hospital?s cost-based reimbursement percentage. Cause: Due to changing requirements, Hospital management was not aware of the requirement to reduce COVID-19 identified expenses by the cost-based reimbursement received as a CAH. Effect: Reported expenses in the Hospital?s Period 1 Report are overstated by approximately $671,500. However, the Hospital has excess lost revenue that would have been eligible to use PRF for had a lower expense number been reported, so there is no net effect on reported amounts in the SEFA. Recommendation: We recommend taking into consideration the cost-based reimbursement the Hospital will receive as a CAH prior to reporting those expenses to HRSA in future reporting periods. Views of responsible officials: Due to the changing requirements, management overlooked this requirement but agrees with the finding, and will implement the recommended changes in future reporting periods.

2021-003 Federal agency: U.S. Department of Health and Human Services Federal Program Title: Provider Relief Funds Assistance Number Listing: 93.498 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: When reporting lost revenues Providers had the option to select from 3 different options to quantify lost patient revenue as a result of COVID-19. Option 1 was to use 2019 actual revenue as the baseline, Option 2 was to use budgeted revenue, and Option 3 was to use some alternative reasonable methodology. If Option 2 was selected, the budget used must have been approved prior to March 2020. Condition: The Hospital selected Option 2 to report lost revenue in its Period I and Period 2 reports to HRSA. However, the Hospital was not in compliance with this method as the budgeted net patient revenue used in the baseline calculation for the first two quarters of 2021 was not approved prior to March 2020. Context: As a result of selecting Option 2 for reporting lost revenues the Hospital?s internal controls over compliance were not operating effectively. However, there is no questioned costs as the calculation would have been allowed under Option 3. Cause: Hospital management selected Option 2 for lost revenue thinking Budgeted 2020 revenue would serve as the baseline for the lost revenue calculation for 2020 and the first two quarters of 2021. Management didn?t realize the Budgeted 2021 revenues would be used as the baseline for calculating 2021 lost revenue. Effect: There is no effect. Recommendation: We recommend reviewing and understanding the reporting requirements for quantifying lost revenue due to COVID-19 during the respective reporting periods. Views of responsible officials: Management calculated lost revenues using an acceptable option but failed to select the correct option on the report itself. This will be corrected in future reporting periods.