In May 2020, the United States Department of Health and Human Services (HHS) Office of Inspector General (OIG) updated its Work Plan to include a planned audit of the $50 billion disbursed by HHS to hospitals and other health care providers under the Public Health and Social Services Emergency Fund (Provider Relief Fund, or PRF). The PRF reimburses eligible health care providers for expenses and lost revenue due to the COVID-19 pandemic.
CARES Act/PRF
The Coronavirus Aid, Relief, and Economic Security (CARES) Act appropriated $175 billion to the PRF to help health care providers that were financially impacted by COVID-19. Under the CARES Act, HHS was to review applications prior to disbursement of the fund, but in order to get money quickly to recipients, HHS mostly disbursed the funds without requiring a formal application or review. As long as certain terms and conditions are met, the money distributed through PRF will not need to be repaid. Providers who are unable to meet the terms and conditions, but still received and accepted the funding, must be able to certify – among other requirements – that it was eligible to receive the funds and that the funds were used in accordance with allocable purposes. Non-compliance with any of the terms and conditions will be considered grounds for HHS to recoup some or all of the payments made to the provider.
The $50 billion covered by this audit was allocated to Medicare facilities and health care providers affected by COVID-19. PRF payments have been disbursed via “General” and “Targeted” distributions – this audit covers the General distributions.
The PRF was originally $30 billion that was automatically distributed in mid-April in proportion to providers’ Medicare fee-for-service payments in 2019. It was distributed to nearly 320,000 providers who bill for Medicare fee-for-service.
Then, in late April, HHS distributed an additional $20 billion to providers based on their share of 2018 net patient revenue – automatically for providers that file annual cost reports with the government and by application for other eligible providers. That money was allocated to nearly 15,000 providers who bill for Medicare fee-for-service.
The Audit
The PRF audit will be done by OIG’s Office of Audit Services, which routinely performs audits examining the performance of HHS programs and/or grantees and are intended to provide HHS with an independent assessment of the HHS programs and operations.
For the audit, OIG will obtain data and interview HHS/PRF program officials to understand how PRF payments were calculated and then review actual PRF payments for compliance with CARES Act requirements. OIG will also review whether HHS’ controls over PRF payments ensured that payments were calculated correctly and disbursed to eligible providers.