The Health Resources and Services Agency (HRSA) is requiring select healthcare providers to complete a single audit beginning this year following Provider Relief Funding (PRF) issuance in wake of the Covid-19 virus.  Below we will outline the general expectations to assist your team in preparations.

Applicability

Foremost, determine if your practice is expected to complete an audit by assessing the eligibility criteria.  Those required to complete a single audit include practices that used over $750,000 of federal government funding within a 12-month period.

By way of background, PRF reporting requires practices who received $10,000 or more during a given period to report any level of usage. Even if you are not subject to complete a Single Audit but received funding from the PRF, you may be asked to complete a HRSA-required audit – which could involve significant data requests

Audit Specifications

The HRSA audit process, whether Single Audit or otherwise, helps the government determine if your organization was justified in receiving federal funding as a result of Covid-19.  Your practice must be prepared to show and justified the use of received funds to support lost revenues and/or Covid-19 related expenses.  When examining the revenue side, HRSA will review the general ledger (GL) as well as other sources.

For expenses, HRSA will need to not only look at the GL, but also invoices and payments.  The general ledger will serve as a primary point of reference so it is important to make sure you have all the necessary details listing itemized expenses reimbursed with PRF payments as well as revenues supported by patient collections and any other sources – broken down on a quarterly basis.

In general, any audit performed by HRSA will involve significant documentation which should have already been set aside for financial reporting requirements.  In addition to the GL, some of the relevant items that should be readily available for a possible audit include:

• Itemized expenses that were reimbursed with PRF payments (placed in specified categories)
• Itemized expenses reimbursed with the other sources of assistance and a list of all sources
• Listing of patient care revenue by payer
• Detailed inventory listing of IT supplies
• If applicable, formal budget from CEO/CFO and board minutes of budget approval prior to March 27, 2020
• Documentation of lost revenue methodologies – likely, on a quarterly basis
• Audit financial statements, if applicable
• If applicable, CMS cost reports for Medicaid/Medicare
• Any additional supporting documentation

If you are unable to provide one or more above, you may be required to contact applicable vendors for documentation.  As a general rule, practices and providers will be responsible for partial or full repayment of PRF funds if used improperly or for failing to provide proper documentation of usage during the audit.

Preparation

Complaints most often relay a lack of resources that allow for appropriate preparation.  The audit will likely be extensive, and many practices do not have the available personnel or time to search for and organize everything needed.  When factoring in that an audit is covering items from over two years ago, it becomes increasingly difficult to know that your practice has provided all relevant document.  Here are three steps to take to ensure that your practice is ready:

1. Delegate one person to your organization’s audit preparation to reduce the likelihood of overlooking something.
2. Gather and keep all PRF report filings and any supporting documentation on hand and in a single location.
3. Perform a gap analysis to identify what additional support your organization may need from an outside professional.

The HRSA audit process can seem daunting, but with the right resources and preparation your organization can expect a smooth process and an optimal outcome for the financial health of your practice.  Should you need any assistance with your PRF reporting, Single Audit preparation, or with a HRSA requested audit, please reach out to our WR Healthcare Services Group.