BIG HORN HOSPITAL ASSOCIATION

2021-007 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 Material Noncompliance (Modified Opinion) 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 PRF funds were used to pay interest and payoff principal on the outstanding Series 2018A Revenue Bonds. These Bonds were issued with the payment source intended to be generated from fund raising and other philanthropic activities. Context: The Hospital used PRF payments to fund a total of $54,910 in interest, and $2,164,583 in principal on the Series 2018A Bonds, when other sources were obligated to reimburse for these payments. Cause: Due to the coronavirus the Hospital was not able to conduct fund raising activities to generate the necessary funding to make the debt service payments. Effect: Big Horn Hospital Association used a total of $2,219,493 of PRF payments to pay interest and principal in full on the 2018A Series Bonds when others funds not related to patient care services were obligated to pay this debt service. Recommendation: We recommend reviewing other expenses incurred or lost revenues from coronavirus to determine if the Hospital has sufficient expenses or lost patient care revenue to offset the amounts used for the Series 2018A Revenue Bonds. If there is insufficient expenses or lost patient care revenues to offset amounts paid for the Series 2018A Revenue Bonds, we recommend contacting the Health Resource Services Administration (HRSA) to discuss potential refund of the amounts in question. Views of responsible officials: When coronavirus hit our community, our ability to pursue the necessary funds through fund raising activity was no longer a possibility. Faced with no other means to cash flow the debt service payments on the Series 2018A Revenue Bonds, Big Horn Hospital Association management and board of directors sought consulting advice on the appropriate use of the PRF payments we received, and if using them to pay these bonds off would be allowable. We believed the guidance was not clear that this wouldn?t be an allowable use of PRF payments, or was uncertain at best. As a result, in order to ensure the health care facility would remain open to serve our community and meet the health care needs during the pandemic management made the decision, and the board approved using PRF payment to payoff the debt.

2021-07 Provider Relief Funds ? Assistance Listing No.93.498 Recommendation: We recommend reviewing other expenses incurred or lost revenues from coronavirus to determine if the Hospital has sufficient expenses or lost patient care revenue to offset the amounts used for the Series 2018A Revenue Bonds. If there is insufficient expenses or lost patient care revenues to offset amounts paid for the Series 2018A Revenue Bonds, we recommend contacting the Health Resource Services Administration (HRSA) to discuss potential refund of the amounts in question. Explanation of disagreement with audit finding: When coronavirus hit our community, our ability to pursue the necessary funds through fund raising activity was no longer a possibility. Not only was the possibility of public events impossible, but the staff also that would facilitate such events had to turn their focus to patient care activities. This staff became involved inpatient care issues such as direct patient care, COVID-19 testing, infection control, and compliance reporting. The biggest example of this shift is the fact that our Foundation Director was also the Public Health Director and coordinated Big Horn County?s response to COVID-19. Faced with no other means to cash flow the debt service payments on the Series 2018A Revenue Bonds, Big Horn Hospital Association management and board of directors sought consulting advice on the appropriate use of the PRF payments we received, and if using them to pay these bonds would be allowable. We believed the HRSA guidance at the time of this decision allowed this as an appropriate use of the funds. Without this action BHHA would not have been able to remain financially stable enough to remain open and would therefore have not been able to care for patients affected by COVID-19. BHHA further felt this was an appropriate use of the funds as the major portion of the remodel was for the Emergency Department. The remodel allowed us to properly care for covid patients, isolate when needed and maintain our capacity to deliver healthcare to our county. As a result, to ensure the health care facility would remain open to serve our community and meet the health care needs during the pandemic management made the decision, and the board approved using PRF payment to pay off the debt. Action taken in response to finding: No actions taken as BHHA feels this was an appropriate use of the PRF funds. Name(s) of the contact person(s) responsible for corrective action: Roxie Cain, Kristi Gatrell & Paula Small-Plenty Planned completion date for corrective action plan: N/A