WAKE FOREST BAPTIST

Finding No. 2021-001: Allowability Federal Program: COVID-19 ? HRSA COVID-19 Uninsured Program (CFDA 93.461) Federal Award Year: February 4, 2020 through June 30, 2021 Federal Award Agency U.S. Department of Health and Human Services Criteria or Requirement Per the terms and conditions of the award, the recipient certifies that the patients identified on the claim form were uninsured individuals at the time the services were provided. Providers may submit a claim for uninsured individuals before Medicaid eligibility determination is complete; however, if the provider learns that the individual is retroactively enrolled in Medicaid as of the date of service, the provider must return the payment to Health Resources and Services Administration (HRSA). Per 2 CFR 200.303, the nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Found, Including Perspective For 2 out of 40 patients sampled, the patient had Medicaid insurance coverage that was applied subsequently, for the time-period of services provided. While management identified the subsequent insurance coverage and adjusted the HRSA coverage in the patient?s file, the refund had not been processed prior to our audit. The refund for both claims were issued on 4/11/2022 and Medicaid coverage was approved on 12/20/2020 and 2/18/22, respectively, for the two claims. The amount paid on the claims was $62,152 and the sampled population was $700,889. Possible Cause and Asserted Effect Wake Forest Baptist?s internal controls identified the Medicaid coverage but failed to return the funds upon identification of the coverage and therefore, the patient claim was reimbursed by HRSA and not refunded until the audit process began for the fiscal year. Questioned Costs $62,152 Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding in the Prior Year Yes, finding 2020-001 Recommendation We recommend Wake Forest Baptist enhance the precision of the control around refunding HRSA, in a timely manner, once they learn that the individual is retroactively enrolled in Medicaid as of the date of service of the previously paid claim. Views of Responsible Officials We concur with the auditor?s assessment, and we have taken steps to ensure HRSA is refunded timely for any payments made when retroactive Medicaid approvals are received.

Finding No. 2021-002: Allowability Federal Program: COVID-19 ? Provider Relief Fund (CFDA 93.498) Federal Award Year: January 1, 2020 through June 30, 2021 Federal Award Agency U.S. Department of Health and Human Services Criteria or Requirement Per the terms and conditions of the award, payments may not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. Per 2 CFR 200.303, the nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Found, Including Perspective For the reporting entities, North Carolina Baptist Hospital, Wake Forest Baptist Medical Center, and WRMC Hospital Operating Corporation, there was a total of $25,017,119 diagnosis-related group reimbursement (DRG) costs and $2,076,075 of equipment costs that were claimed as expenses; however, based on the nature of the expenses there are other sources that have reimbursed the entities for these costs. Possible Cause and Asserted Effect Wake Forest Baptist?s internal controls identified costs that were incurred to respond to coronavirus. Based on their interpretation of the guidance in conjunction with the provider reporting portal requirements for lost revenues, these identified costs were not offset with other funding sources that were reimbursing the entity for a portion of those expenditures. Therefore, the expenses were reported to support the proceeds received by HRSA for the program. Questioned Costs $27,093,194 Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding in the Prior Year No. Recommendation We recommend Wake Forest Baptist change their interpretation of the provider relief guidance, reconsider the type of expenses claimed against the HRSA proceeds, and consider utilizing more of the lost revenues in support of the provider relief funds received. The lost revenues appear to be sufficient to cover the proceeds received. Views of Responsible Officials When making our conclusions on computing coronavirus expenses, Wake Forest Baptist management considered the HRSA provider relief guidance concerning ?Other Assistance Received,? the options provided by HRSA to report ?lost revenues,? and the input requirements of ?lost revenues? in the provider relief portal. Management recognized that if coronavirus costs were to be netted with patient reimbursement, then the lost revenues calculation would also need to exclude these funds, otherwise Wake Forest Baptist would be double counting offsetting revenue reported in the portal. According to the FAQs, patient revenues were not to be reported as ?Other Assistance Received? within the cost section of the portal and the portal does not allow for lost revenues to be adjusted to account for this coronavirus reimbursement; therefore, management concluded the reporting of total gross costs was required in order to align with the reporting of lost revenues. Wake Forest Baptist management is currently working with HRSA to determine the most appropriate process to update the provider relief portal if required in conjunction with this different interpretation of the HRSA guidance. Additionally, it should be noted that even if these costs in question are disallowed, as coronavirus expenses, lost revenues will increase and are sufficient to cover the proceeds received, indicating that Wake Forest Baptist was not overpaid.

Finding No. 2020-001: Allowability Federal Program: COVID-19 - Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured (CFDA 93.461) Federal Award Year: February 4, 2020 through June 30, 2020 Federal Award Agency U.S. Department of Health and Human Services Criteria or Requirement Per the terms and conditions of the award, the recipient certifies that the patients identified on the claim form were uninsured individuals at the time the services were provided. Per 2 CFR 200.303, the nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Found, Including Perspective For 1 out of 40 patients sampled, the patient had Medicaid insurance coverage that was applied subsequently, for the time-period of services provided. Wake Forest Baptist did not refund Health Resources and Services Administration (HRSA) for the amount that was paid on this claim. The amount paid on this claim was $21,779 and the sampled population was $791,708. Possible Cause and Asserted Effect Wake Forest Baptist?s internal controls identified the Medicaid coverage but failed to prevent it from being added as secondary coverage to HRSA and therefore, the patient claim was submitted to and reimbursed by HRSA and not refunded. Questioned Costs $21,779 Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding in the Prior Year This finding is not a repeat of a finding in the immediately prior audit. Recommendation We recommend Wake Forest Baptist enhance the precision of the control around timely identification of coverages added subsequent to the normal control process (but applies to earlier dates of service) which would require a refund to the agency. Views of Responsible Officials We concur with the auditors? assessment, and we have taken steps to rectify billing and ensure HRSA is refunded for any payments made when retroactive Medicaid approvals are received.