PRF Compliance Audits: Special Tests and Provisions Testing Requirement Removed from Compliance Supplement


The Federal Register was updated on April 8, 2022 and “Special Tests and Provisions over out-of-network patient out-of-pocket expenses” was removed from the July 2021 Compliance Supplement. This update effectively removes this testing requirement for auditors, therefore, this procedure is no longer required in an audit of Provider Relief Funds (PRF) under Uniform Guidance.

What is the Compliance Supplement?

The July 2021 Compliance Supplement outlines procedures effective for audits of federal programs for fiscal years beginning after June 30, 2020 under Uniform Guidance. It supersedes the 2020 Compliance Supplement (dated August 2020) and its Addendum (dated December 2020).

This Compliance Supplement included guidance over the Department of Health and Human Services (HHS) PRF. Among the various compliance requirements considered likely to have a direct and material effect on this program was “Special Tests and Provisions over out-of-network patient out-of-pocket expenses.”

What Does This Mean for Provider Relief Fund Uniform Guidance?

Under the terms and conditions of received relief funds, the recipient certifies that they will not seek to collect from a patient out-of-pocket expenses in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider. This applies to patients with presumptive or actual case of COVID-19 from January 31, 2020 through the end of the Public Health Emergency.

The suggested audit procedures included testing a sample of out-of-network patients with a presumptive or actual case of COVID-19 to determine whether the patient was assessed an out-of-pocket charge for services and ascertain if the charge was in compliance with terms and conditions of the award.

Once this guidance was released, auditors of the PRF program noted numerous concerns over the proposed procedures, including:

  • The procedure noted above requires a population of out-of-network claims for presumptive or actual COVID cases from which to test. While presumptive or actual COVID cases can by tracked by certain billing codes, there is generally no standardized tracking of out-of-network claims within electronic health record systems or through remittance advices. Many providers have a process to attempt insurance verification during registration and can identify certain out-of-network plans during this process. Others are identified during the revenue cycle process through claim adjudication.

    Unfortunately, even more are not identified because they are adjudicated by the payor without comment. Accordingly, obtaining a complete population of out-of-network patients with actual or presumptive cases of COVID-19 was very difficult for providers and auditors.
  • Should a complete population actually be obtained, the second obstacle was determining the in-network amount for an out-of-network patient. The in-network and out-of-network amounts are really only known by the patient’s insurance company.

    Many providers will use similar contracts to estimate the amounts. When this is tested in a compliance audit, however, the auditor cannot obtain adequate information to ensure a patient isn’t billed an amount greater than that patient would have otherwise been required to pay if as an in-network patient without obtaining information directly from the insurance company.

This hang-up on many PRF compliance audits potentially resulted in a modification of the auditor’s opinion due to a scope limitation. The decision to remove this test from PRF compliance audits should ease the burden on providers and auditors and allow for completion of these audits without the above noted issues.

During January 2022, the HHS Office of Inspector General (HHS-OIG) updated its Work Plan to include testing of this provision of the PRF program. Accordingly, providers still need to be cognizant of this provision of the PRF program and ensure safeguards are in place to prevent balance billing of patients with presumptive or actual case of COVID-19. A review of historical claims may be necessary to ensure any excess billings to patients are resolved appropriately.

Next Steps in Healthcare Billing Compliance

These matters do highlight the continued concerns and struggles associated with the No Surprises Act. If your organization has not identified this regulation as a high risk, we encourage you to review the act and internal processes and policies designed to maintain compliance.

At a high level, the No Surprises Act, although separate from the Terms and Conditions of the PRF program, has similar balance billing prohibitions for specific types of healthcare service provided in certain healthcare facilities. This applies for participants, beneficiaries, and enrollees in group health plans and group and individual health insurance coverage.

Additionally, this Act requires a Good Faith Estimate (GFE) be provided to uninsured and self-paying individuals for certain services provided in specific healthcare settings.

Our Provider Relief Fund team has developed expertise in guiding healthcare leaders through PRF reporting and compliance.

This article is provided for general informational purposes only. It is not legal, accounting or other professional advice, as it does not address any individual facts, circumstances or concerns. Before making personal or business related decisions, please consult with appropriate legal, accounting or other qualified professionals.

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