You Have Received a PRF Audit or Repayment Notice. Now What?

After more than a dozen distributions and nine reporting periods, program funding under the Provider Relief Fund (PRF) was rescinded as the public health emergency ended in June 2023. But with the conclusion of the PRF saga presumably in sight, a new era began for audits, notices of repayment and debt collection by the Health Resources and Services Administration (HRSA).

Health care providers may be required to repay PRF funds under two circumstances: failure to comply with the terms of funding and findings from an audit of the awarded funds.

Failure to Comply with Funding Terms

Providers who received funds through any PRF distributions were required to attest to the terms and conditions of each distribution. This included submitting a report detailing the use of funds received in excess of $10,000. Any provider that rejected the terms and conditions or failed to submit the required reporting resulted in repayment. The entities that expended more than $750,000 in federal funds, including PRF funds, were required to have a single audit or program-specific audit conducted.

This was a new, and often painful, process for many health care providers that had not received significant government funding prior to the pandemic. Therefore, completing the reporting process and a separate compliance audit likely created a welcome sense of closure. Then HRSA began conducting their own audits, resulting in additional repayments for some providers.

The first scenario is fairly straightforward — failure to comply with the preliminary acceptance of funds and/or reporting, after multiple reminders and make up periods offered by HRSA, requires the amounts to be repaid. Conversely, the repayment demands resulting from audits is a little more complex.

Who is Selected For an Audit

Organizations selected to undergo an audit by HRSA are determined through a few methods including random selection or a “red flag” identifier in the reporting. Some scenarios commonly identified as triggering an HRSA audit include but are not limited to reporting lost revenue under option three, which is “any reasonable method of estimating revenues,” providers involved in a merger or acquisition during the PHE and targeted distributions transferred to a parent health system.

What to Do If You Receive a Notice of Audit

If your organization receives a notice that HRSA is conducting an audit, contact your accounting firm Review previous findings from single audits or financial statement audits, and gather support as the process and requests will likely be very similar. The key focus areas are centered around identifying the impacts of the pandemic on the organization, controls over the tracking of funds and reporting and determination of lost revenue, personnel costs and the purchase of fixed assets.

Should the HRSA audit result in a repayment demand, providers have an opportunity to dispute by requesting a decision review and providing support for their position. HRSA will either uphold the finding and repayment or offer the provider an opportunity to come into compliance. The results of the decision review are considered final. If the repayment demand is not disputed, providers have 60 days to return the funds or enter into a payment plan with HRSA.

Contact us if you would like information about the HRSA’s notices of repayment for health care providers or how to respond.

Authored by Katharine Johnston and Anna Stevens.

©2023