OIG Work Plan Update Adds Audits of CARES Act Provider Relief Funds

In its May update of its Work Plan, the Department of Health and Human Services Office of the Inspector General (HHS OIG) announced it will examine the effectiveness of HHS controls over the awarding and disbursement of $50 billion in Provider Relief Fund (PRF) payments to hospitals and other providers.

The funding was included in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). It reimburses eligible healthcare providers for expenses and lost revenue that can be attributed to COVID-19.

The OIG updates its Work Plan monthly and sets forth various projects including OIG audits and evaluations that are underway, or planned to be addressed, during the fiscal year and beyond.

The OIG said it will obtain data and interview program officials to gain an understanding of how PRF payments were calculated and review PRF payments for compliance with CARES Act requirements. Among other things, OIG said it will seek to determine whether HHS controls over PRF payments ensured that payments were correctly calculated and disbursed to eligible providers.

Although statutory language in the CARES Act called for HHS to review applications before the funds were sent out, it appears that HHS disbursed a significant portion without requiring a formal application or review.

The first $30 billion of the $50 billion was delivered between April 10 and April 17 and was based on historical share of Medicare revenue. At the time, HHS Secretary Alex Azar noted that the goal was to “get the money from the Provider Relief Fund out the door as quickly as possible while targeting it to those suffering the most from the pandemic.â€

On April 24, HHS began to distribute the other $20 billion to providers based on their share of 2018 net patient revenue.

Not long after the monies were distributed, it was reported that some hospitals that did not request grants, and in fact were not even operational, had received grants.

In addition to the Work Plan, the OIG also issued a strategic plan titled “Oversight of COVID-19 Response and Recovery” in which the government watchdog sets forth four goals: to protect people, protect funds, protect infrastructure, and promote effectiveness of HHS programs now and into the future.

With respect to the protection of funds, OIG said it would prevent, detect and remedy waste or misspending of COVID-19 response and recovery funds by:

• Conducting audits and evaluations of HHS’s oversight, management, and internal controls for awarding, disbursement, and use of funds.
• Auditing fund recipients to assess whether they met use, reporting, and other requirements, and, where appropriate, recommend recovery of misspent funds.
• Participating on, and coordinating closely with, the PRAC to prevent and detect fraud, waste, abuse, and mismanagement, and to mitigate major risks that cut across program and agency boundaries.

Although the urgency of the situation required quick action to allow for the nation’s healthcare community to respond appropriately, that does not mean that those intent on engaging in fraudulent activities will not be caught. Even those without the intention to commit fraud could face the prospect of an audit. Having policies and procedures in place with regard to how to respond is an important first step.

The Health Law Offices of Anthony C. Vitale has extensive experience representing clients in audits and overpayments and we can represent your interests through all of the stages of the process. In addition, if you find yourself the target of a fraud investigation, our team can assist you every step of the way.