Eleven of Thirty Selected Hospitals Did Not Comply With Terms and Conditions and Federal Requirements for Expending Provider Relief Fund Payments, A-02-22-01003
What This Document Is
This OIG audit report from U.S. Department of Health and Human Services Office of Inspector General examines Provider Relief Fund through the source document titled "Eleven of Thirty Selected Hospitals Did Not Comply With Terms and Conditions and Federal Requirements for Expending Provider Relief Fund Payments". Congress appropriated $178 billion to HHS for the Provider Relief Fund (PRF), which provided reimbursement to eligible providers for health care-related expenses or lost revenue attributable to COVID-19. HHS was responsible for initial PRF program oversight and policy decisions, and HRSA administered the PRF program.
Factual Summary
The source reports these central findings: Of the 30 selected hospitals we reviewed, 10 hospitals claimed a total of $63 million of unallowable PRF expenditures and 2 hospitals inaccurately reported $645.6 million of lost revenues. These hospitals (11, including 1 hospital that had more than 1 deficiency) received a total of $3.8 billion in PRF payments. The remaining hospitals used PRF funds for allowable expenditures and lost revenues.
Recommendation or agency-response note: We made two recommendations to HRSA, including that it require the selected hospitals to return any unallowable expenditures and lost revenue amounts to the Federal Government or ensure that the hospitals properly account for these expenditures and lost revenues. HRSA concurred with our recommendations.
Key Facts
- Document title: Eleven of Thirty Selected Hospitals Did Not Comply With Terms and Conditions and Federal Requirements for Expending Provider Relief Fund Payments.
- Report number: A-02-22-01003.
- Document date shown in source front matter: June 2025.
- Issuer/court: U.S. Department of Health and Human Services Office of Inspector General.
- Document type: OIG audit report.
- Program(s): Provider Relief Fund.
- Review purpose: Congress appropriated $178 billion to HHS for the Provider Relief Fund (PRF), which provided reimbursement to eligible providers for health care-related expenses or lost revenue attributable to COVID-19. HHS was responsible for initial PRF program oversight and policy decisions, and HRSA administered the PRF program.
- Primary source finding: Of the 30 selected hospitals we reviewed, 10 hospitals claimed a total of $63 million of unallowable PRF expenditures and 2 hospitals inaccurately reported $645.6 million of lost revenues. These hospitals (11, including 1 hospital that had more than 1 deficiency) received a total of $3.8 billion in PRF payments. The remaining hospitals used PRF funds for allowable expenditures and lost revenues.
- Recommendation/status note: We made two recommendations to HRSA, including that it require the selected hospitals to return any unallowable expenditures and lost revenue amounts to the Federal Government or ensure that the hospitals properly account for these expenditures and lost revenues. HRSA concurred with our recommendations.
Source Caveats
- Use the PDF for exact quotations, pagination, tables, figures, appendices, and agency-response language.
- Where the source uses samples, surveys, snapshots, or selected files, do not generalize beyond the scope stated in the report.
- Document type
- compliance
- Date
- 2020-03-13
Cite this document
“Eleven of Thirty Selected Hospitals Did Not Comply With Terms and Conditions and Federal Requirements for Expending Provider Relief Fund Payments, A-02-22-01003.”
Original at oig.hhs.gov, dated 2020-03-13. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2020-03-13-eleven-of-thirty-selected-hospitals-did-not-comply-with-terms-and-conditions-an/
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June 2025 | A-02-22-01003
Eleven of Thirty Selected Hospitals
Did Not Comply With Terms and
Conditions and Federal
Requirements for Expending
Provider Relief Fund Payments
OIG.HHS.GOV
June 2025 | A-02-22-01003
Eleven of Thirty Selected Hospitals Did Not Comply With Terms and
Conditions and Federal Requirements for Expending Provider Relief
Fund Payments
Why OIG Did This Audit
• Congress appropriated $178 billion to HHS for the Provider Relief Fund (PRF), which provided
reimbursement to eligible providers for health care-related expenses or lost revenue attributable to
COVID-19. HHS was responsible for initial PRF program oversight and policy decisions, and HRSA
administered the PRF program.
• Providers receiving PRF payments were to ensure that the payments were: (1) used to prevent,
prepare for, or respond to COVID-19; (2) used for health care-related expenses or lost revenues
attributable to COVID-19; (3) not used to cover expenses or losses reimbursed by other funding
sources; and (4) not used to pay salaries in excess of a certain threshold or to pay for certain prohibited
activities.
• This audit is part of a series reviewing PRF payments to various provider types. Specifically, this audit
assessed whether 30 selected hospitals expended taxpayer funds in accordance with Federal and
program requirements.
What OIG Found
• Of the 30 selected hospitals we reviewed, 10 hospitals claimed a total of $63 million of unallowable
PRF expenditures and 2 hospitals inaccurately reported $645.6 million of lost revenues. These
hospitals (11, including 1 hospital that had more than 1 deficiency) received a total of $3.8 billion in
PRF payments. The remaining hospitals used PRF funds for allowable expenditures and lost revenues.
• These deficiencies occurred because although hospitals attested to the PRF terms and conditions and
HRSA provided continuously updated guidance to PRF recipients, the hospitals made clerical errors in
their reporting of expenditures and did not always correctly interpret HRSA guidance, maintain
documentation to support reported expenditures, or have procedures to verify the accuracy of lost
revenue calculations.
What OIG Recommends
We made two recommendations to HRSA, including that it require the selected hospitals to return any
unallowable expenditures and lost revenue amounts to the Federal Government or ensure that the hospitals
properly account for these expenditures and lost revenues. HRSA concurred with our recommendations.
OIG.HHS.GOV
TABLE OF CONTENTS
INTRODUCTION ............................................................................................................................... 1
Why We Did This Audit ....................................................................................................... 1
Objective ............................................................................................................................. 2
Background ......................................................................................................................... 2
The Provider Relief Fund......................................................................................... 2
HHS’s and HRSA’s Oversight of the Provider Relief Fund Program ........................ 3
Requirements for Hospitals That Received Provider Relief Fund Payments.......... 4
How We Conducted This Audit ........................................................................................... 6
FINDINGS ......................................................................................................................................... 7
Some Hospitals Used Provider Relief Fund Payments for Unallowable Expenditures and
Inaccurately Calculated Lost Revenues ............................................................................ 8
Salary Costs Exceeded the Federal Executive Level II Salary Limit ......................... 8
Costs Not Adequately Supported ........................................................................... 9
Costs Charged but Not Incurred ............................................................................. 9
Duplicate Expenses ................................................................................................. 9
Inaccurate Lost Revenue Calculations .................................................................. 10
Causes of Unallowable Expenditures and Inaccurately Calculated Lost Revenues.......... 10
RECOMMENDATIONS ................................................................................................................... 11
OTHER MATTERS ........................................................................................................................... 11
HEALTH RESOURCES AND SERVICES ADMINISTRATION COMMENTS AND OFFICE OF
INSPECTOR GENERAL RESPONSE ............................................................................................... 12
APPENDICES
A: Audit Scope and Methodology ..................................................................................... 14
B: Related Office of Inspector General Reports................................................................ 17
C: Provider Relief Fund General and Targeted Distribution Payments ............................ 18
D: Options for Calculating Lost Revenues......................................................................... 20
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003)
E: Selected Hospitals’ Reported Use of CY 2020 Provider Relief Fund Payments ............ 21
F: Summary of Sampled Hospitals’ Unallowable Expenditures and Inaccurately
Calculated Lost Revenue Amounts ............................................................................. 22
G: Other Matters – Potential Savings Calculations........................................................... 24
H: Health Resources and Services Administration Comments ......................................... 26
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003)
INTRODUCTION
WHY WE DID THIS AUDIT
On March 13, 2020, the President declared the COVID-19 outbreak a national emergency. In
response, Congress passed three bills, which the President signed into law. These Federal laws
appropriated to the Department of Health and Human Services (HHS) a combined $178 billion
in funds, which HHS used to establish the Provider Relief Fund (PRF). 1 The PRF provided
payments to eligible hospitals and other health care providers (collectively referred to as
“providers”) for: (1) health care-related expenses or lost revenues (e.g., due to canceled
elective services) attributable to COVID-19, (2) COVID-19 testing and treatment for uninsured
individuals, and (3) the administration of vaccines. HHS distributed PRF funds, in part, as direct
payments to providers in a series of PRF General and Targeted Distributions. 2 As of October
2024, the Health Resources and Services Administration (HRSA) had distributed $145.9 billion of
the PRF to providers. 3
This audit assessed selected hospitals’ compliance with terms and conditions and Federal
requirements for expending PRF payments. It is one of several Office of Inspector General
(OIG) audits of various aspects of PRF payments, including: (1) HHS’s and HRSA’s controls
related to the requirements for submitting revenue information and attesting to the
acceptance or rejection of PRF payments, (2) HHS’s and HRSA’s controls over PRF payment
calculations and provider eligibility determinations, and (3) claims for COVID-19 testing and
treatment services for uninsured individuals. See Appendix B for a list of related OIG reports.
1
Specifically, the Coronavirus Aid, Relief, and Economic Security Act, P.L. No. 116-136, signed into law on Mar.
27, 2020, appropriated $100 billion; the Paycheck Protection Program and Health Care Enhancement Act, P.L. No.
116-139, signed into law on Apr. 24, 2020, appropriated $75 billion; and the Consolidated Appropriations Act, 2021,
P.L. No. 116-260, signed into law on Dec. 27, 2020, appropriated $3 billion.
2
Under the General Distributions, PRF payments were distributed in four phases (Phases 1, 2, 3, and 4). For
example, under the Phase 1 General Distribution, PRF payments were distributed to eligible Medicare providers
that billed Medicare fee-for-service (Medicare Parts A or B) in calendar year (CY) 2019. Under the Targeted
Distributions, PRF payments were made to eligible providers or specific provider types to address added COVID-19
challenges, such as high-need populations, including nursing facilities and providers serving individuals in rural
areas and safety net hospitals.
3
This dollar figure is based on latest PRF distribution data provided by HRSA. As of June 2023, with the passage of
the Fiscal Responsibility Act of 2023, P.L. No. 118-5, Congress rescinded unobligated PRF funds, notwithstanding
limited funding Congress directed be used for program oversight and administration. In response, HRSA stopped
making PRF payments to providers.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 1
OBJECTIVE
Our objective was to determine whether selected hospitals that received PRF payments
complied with terms and conditions and Federal requirements for expending PRF funds.
BACKGROUND
The Provider Relief Fund
As a result of the COVID-19 public health emergency, many States ordered health care facilities,
physicians, and other providers and professionals to delay elective or nonurgent procedures to
conserve personal protective equipment and free up staff and facilities for COVID-19 patients.4
Hospitals throughout the Nation reported that ceasing elective procedures and other services
decreased revenues while their costs increased as they prepared for a potential surge of
patients.5 Many hospitals reported that their cash reserves were quickly depleted, which could
have disrupted ongoing hospital operations. Additionally, all types of hospitals, and especially
small rural hospitals, requested financial assistance, including loans and grants. Smaller,
independent hospitals, such as rural hospitals and critical access hospitals, reported that they
were at greater financial risk than those in larger systems and faced more financial uncertainty.
In response to the public health emergency, the PRF was established to provide funds to
eligible providers for health care-related expenses or lost revenues attributable to COVID-19. 6
HHS received a combined $178 billion in funding, of which $145.9 billion was distributed via PRF
payments to providers. 7 PRF funds were distributed as direct payments to providers in a series
of General and Targeted Distributions.
The Exhibit on the next page details the PRF distributions to health care providers. For further
details on how PRF payments were distributed, see Appendix C.
4
On Jan. 31, 2020, the Secretary of Health and Human Services declared the COVID-19 outbreak a public health
emergency. Then, on Mar. 13, 2020, the President declared the COVID-19 outbreak a national emergency. Both
the COVID-19 public health and national emergencies ended on May 11, 2023.
5
OIG, Hospital Experiences Responding to the COVID-19 Pandemic: Results of a National Pulse Survey March 23–
27, 2020 (OEI-06-20-00300), April 2020.
6
Providers had up to the end of the quarter in which the public health emergency ended (June 30, 2023) to use
PRF payments for any health care-related expenses or lost revenues attributable to COVID-19, if any.
7
Congress also appropriated $8.5 billion of COVID-19-related relief for rural providers enrolled in Medicare or
Medicaid programs (American Rescue Plan Act of 2021, P.L. No. 117-2). This funding was administered by HRSA
and had similar limitations and requirements as the PRF but is not part of the PRF.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 2
Exhibit: Provider Relief Fund Distributions to Health Care Providers
Notes: Amounts for the Targeted Distributions do not add to $57.5 billion due to rounding. CHIP stands for the
Children’s Health Insurance Program.
HHS’s and HRSA’s Oversight of the Provider Relief Fund Program
The HHS Office of the Secretary was responsible for initial PRF program oversight and policy
decisions. The HHS Office of the Secretary’s direct responsibility for the PRF allowed HHS to
meet its mission to expedite the establishment of the PRF and the distribution of funds as
quickly as possible for providers’ health care-related expenses or lost revenues attributable to
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 3
COVID-19. Within HHS, HRSA was responsible for providing day-to-day oversight and managed
all aspects of the PRF program. 8
HRSA provided various resources to providers on the proper use and reporting of PRF
payments, including issuing a collection of evolving Frequently Asked Questions (FAQs), and
other guidance on allowable expenses and lost revenues calculations.9 HRSA also conducted
technical assistance webinars on the reporting process. In addition, HRSA engaged external
audit firms to conduct risk-based audits for a sample of providers to ensure that providers used
PRF payments in accordance with PRF terms and conditions.
Requirements for Hospitals That Received Provider Relief Fund Payments
Providers, including hospitals, may have been eligible to receive PRF payments from multiple
distributions. For example, a hospital could have received PRF payments through the General
Distribution as well as the Targeted Distribution for high-impact areas and rural providers.10, 11
Hospitals that received PRF payments had to comply with certain provisions of the Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards (45 CFR
part 75). Specifically, the hospitals had to comply with 45 CFR § 75.302 (Financial management
and standards for financial management systems) and 45 CFR §§ 75.361 through 75.365
(Record retention and access).
As a condition of receiving PRF payments, providers agreed to the PRF terms and conditions,
including meeting eligibility criteria; filing expenditure reports; and ensuring that payments
were: (1) used to prevent, prepare for, or respond to COVID-19; (2) used for health care-related
8
HHS and HRSA, PRF General & Targeted Distribution Cycle Memo, dated Sept. 30, 2020, and Sept. 30, 2021.
9
HRSA, Provider Relief Programs: Provider Relief Fund and ARP Rural Payments Frequently Asked Questions (PRF
FAQs). Accessed on Mar. 26, 2025. HRSA, Provider Relief Fund Distributions and American Rescue Plan Rural
Distribution Post-Payment Notice of Reporting Requirements (PRF Reporting Requirements). Accessed on Mar. 26,
2025.
10
PRF payments were distributed to providers based on providers’ taxpayer identification numbers (TINs).
Hospitals and other providers were required to report on their PRF payments if they received $10,000 or more
during a specified timeframe (i.e., payment period). For providers to meet this requirement, HRSA established
reporting periods, which specified when providers had to report on the use of PRF payments and were based on
the payment period(s). For example, reporting periods 1 and 2 covered PRF payments received during CY 2020.
We use the term “hospital” to refer to a hospital reporting entity. A hospital reporting entity may have registered
its TIN through the PRF Reporting Portal to report to HRSA on the use of PRF payments received by that TIN and
TINs associated with the entity’s subsidiary entities (e.g., individual hospitals). A hospital may be a stand-alone
hospital, a hospital group, or a parent organization.
11
For details on General and Targeted Distribution payments, see Appendix C. In addition to PRF payments,
hospitals may have received COVID-19-related assistance from other sources such as the Federal Emergency
Management Agency, the Department of the Treasury, and the Small Business Administration, as well as from
grants and donations from other local and State governments or private sources.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 4
expenses or lost revenues (i.e., patient care revenues) attributable to COVID-19; 12 (3) not used
to reimburse expenses or losses already reimbursed from other funding sources; and (4) not
used to pay salaries in excess of a certain threshold or to pay for certain prohibited activities
(e.g., lobbying). 13
Provider Relief Fund Expenditures and Lost Revenues
For reporting purposes, HRSA established periods during which providers were required to use
and report on PRF payments.14 Providers, including hospitals, were required to report on their
use of PRF payments in broad categories (i.e., lost revenues, health care-related expenses, or
general and administrative expenses). For expenses, hospitals were required to report their
use of PRF payments for health care-related expenses (e.g., expenses for purchasing equipment
such as ventilators and sanitizing supplies for infection control) and general and administrative
expenses (e.g., salaries, utilities, rent), including expenses incurred prior to receipt of PRF
payments (i.e., pre-award costs dated back to January 1, 2020). 15 Hospitals were required to
follow their basis of accounting (cash or accrual basis) to determine expenses and only use PRF
payments for eligible expenses or lost revenues during what is known as the period of
availability.16
For lost revenues, hospitals could apply their PRF payments toward lost revenue amounts
during a period of availability calculated using one of the following three options:
1. the difference between actual patient care revenues from 2019 and actual patient care
revenues during the period of availability,
2. the difference between budgeted patient care revenues (approved by hospital officials
prior to March 27, 2020) and actual patient care revenues, or
12
Patient care means health care, services, and supports as provided in a medical setting, at home, via telehealth,
or in the community. Items not considered patient care revenue include nonpatient care dining services, grants,
bad debt, any gains or losses on investments, and contractual adjustments.
Recipients were not allowed to use PRF payments to pay any salary at a rate in excess of Executive Level II, which
13
was set at $197,300 for 2020 and $199,300 for 2021.
14
HRSA required all providers that received PRF payments exceeding $10,000 in the aggregate during any of these
periods to report on their use of the payments during the applicable reporting period.
15
HRSA, PRF Reporting Requirements.
16
The period of availability ends 1 year after the end of the quarter or semiannual period in which the payment
was received. The first payment receipt period was Apr. 10, 2020, through June 30, 2020. Subsequent payment
receipt periods were 6 months.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 5
3. any reasonable method of estimating revenues. 17
HRSA guidance for the treatment of unallowable or ineligible expenditures of PRF funds stated
that providers were allowed to replace unallowable or ineligible expenditures allocated to PRF
payments in a closed reporting period with unreimbursed lost revenues in subsequent
reporting periods. Providers are not required to return PRF payments used for unallowable
purposes (e.g., lobbying) to the Federal Government if they have sufficient unreimbursed lost
revenues to offset unallowable amounts. See Appendix D for a detailed description of how
providers could choose to calculate lost revenues.
HOW WE CONDUCTED THIS AUDIT
Our audit covered $6.6 billion in PRF payments and related interest to a nonstatistical sample of
30 hospital taxpayer identification numbers (TINs) during calendar year (CY) 2020.18 (We refer
to these sample units throughout the report as “hospitals.”)19 The selected hospitals reported
that they used $3.8 billion of their PRF payments to offset lost revenues, $1.6 billion for general
and administrative expenses, and the remaining $1.2 billion for health care-related expenses. 20
Appendix E contains details on how the selected hospitals used PRF payments issued in CY
2020.
We selected hospitals based on an analysis that considered the amount of PRF payments
received, geographic location (i.e., areas most impacted by COVID-19, urban and rural areas),
and organizational structure (e.g., hospital groups and stand-alone hospitals). 21 We reviewed
the hospitals’ PRF payments used to offset lost patient care revenues or cover general and
administrative and health care-related expenses. Specifically, for each of the selected hospitals
that reported expenditures, we reviewed a nonstatistical sample of expenses that we selected
17
For payments received in Periods 5, 6, or 7, the period of availability to use PRF payments for lost revenues
attributable to COVID-19 ended June 30, 2023, the end of the quarter in which the COVID-19 public health
emergency ended (HRSA, PRF Reporting Requirements).
18
Some hospitals kept their PRF payments in an interest-bearing account and included interest in the amounts
reported on expenditure reports submitted to HRSA.
19
The sampling frame consisted of 649 hospitals that received and kept 1 or more PRF payments totaling
approximately $23.1 billion. PRF payment recipients had 90 days to return a payment to HHS, otherwise the
recipient was deemed to have accepted the terms and conditions. Our sample included hospitals that received PRF
payments issued in CY 2020 and for which hospitals attested to the payment terms and conditions or were deemed
to have accepted the terms and conditions.
20
Hospitals reported these amounts on expenditure reports submitted to HRSA for reporting periods 1 and 2.
21
Our sample unit was a hospital that reported the use of PRF General and Targeted Distribution payments. Each
sampled hospital could be a stand-alone hospital or part of a parent-subsidiary system that may include a parent
company and various provider types (e.g., hospitals, clinics, urgent care facilities, and physician groups). The 30
selected hospitals each received more than $10 million in PRF payments during CY 2020 and are located in 9 States.
Three of the hospitals are stand-alone hospitals and 27 are part of hospital systems.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 6
based on materiality and expense descriptions (e.g., salaries, supplies, equipment). For the
selected hospitals that reported lost revenues, we reviewed the hospitals’ lost revenues
calculations.22
We conducted this performance audit in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions
based on our audit objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
Appendix A describes our audit scope and methodology.
FINDINGS
Of the 30 selected hospitals, 19 used the funds for allowable general and administrative and
health care-related expenditures and to offset lost revenues attributable to COVID-19.
However, the remaining 11 hospitals did not comply with Federal requirements. Specifically, 10
hospitals used PRF payments for unallowable expenditures and 2 hospitals inaccurately
calculated lost revenues.23 These deficiencies occurred because although hospitals attested to
the PRF terms and conditions and HRSA provided continuously updated guidance to PRF
recipients, the hospitals made clerical errors in their reporting of expenditures and did not
always correctly interpret HRSA guidance, maintain documentation to support reported
expenditures, or have procedures to verify the accuracy of lost revenue calculations.
As a result of these deficiencies, 11 of the 30 selected hospitals used PRF payments for
unallowable expenditures totaling $63 million and inaccurately calculated lost revenues totaling
$645.6 million. These funds could have been used to offset allowable lost revenues or to
support other activities related to the COVID-19 public health emergency, including preventing,
preparing for, and responding to COVID-19.
Appendix F contains a summary of our audit results for the sampled hospitals.
22
Of the 30 hospitals, 23 hospitals reported both expenses and lost revenues, 5 hospitals reported only lost
revenues, and 2 hospitals reported only expenses.
23
The total number of hospitals with deficiencies exceeds 11 because 1 hospital had more than 1 deficiency.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 7
SOME HOSPITALS USED PROVIDER RELIEF FUND PAYMENTS FOR UNALLOWABLE
EXPENDITURES AND INACCURATELY CALCULATED LOST REVENUES
Salary Costs Exceeded the Federal Executive Level II Salary Limit
The PRF terms and conditions specified that PRF recipients could not use PRF payments to pay
the salary of an individual at a rate in excess of Executive Level II salary levels. 24 The Federal
Executive Level II salary level was $197,300 in CY 2020 and $199,300 in CY 2021.
Four hospitals used PRF payments for salary for executives and other employees that exceeded
the Executive Level II salary levels for CYs 2020 and 2021 by a total of $4.6 million. 25
Specifically, one hospital used PRF payments to cover salary and fringe benefit costs for 33
executives and 16 employees based on a methodology tied to monthly percentages of
COVID-19 discharges or COVID-19 patient days. As a result, the hospital charged salary and
associated fringe benefit costs for the executives and employees that exceeded the Executive
Level II salary levels for CYs 2020 and 2021 by a total of $2.9 million.26 Another hospital used
PRF payments to cover salary costs for certain employees who worked more than 2,080 hours
(the equivalent of a full-time appointment) in CY 2020.27 As a result, the hospital reported
salaries for these employees that exceeded the Executive Level II salary level by $1.6 million.
The remaining two hospitals used PRF payments to cover salary costs for certain employees
whose salaries exceeded the Executive Level II threshold for CYs 2020 and 2021. As a result, the
hospitals reported salaries for these employees that exceeded the Executive Level II salary level
by $80,349. 28
24
PRF General and Targeted Distribution payments terms and conditions.
25
This amount included fringe benefit costs (e.g., health insurance, group-life insurance, retirement plan)
associated with unallowable salary amounts. We excluded COVID-19-related incentive payments (e.g., hazard pay,
retention and hiring bonuses) to calculate the unallowable amount.
26
For example, one hospital employee’s annual salary for 2020 was $365,709. Their biweekly pay amount was
$13,659 for the pay period ending Apr. 23, 2020. The COVID-19 patient discharge rate at the hospital for April 2020
was 63 percent. Based on this rate, the hospital charged $8,585 (63 percent of $13,659) of the employee’s salary
to PRF. If the hospital based its calculation on the Federal Executive Level II for 2020, which was $197,300, the
employee’s biweekly pay amount charged to PRF for this employee would have been $4,781.
27
A full-time appointment is 2,080 hours per year. (HRSA, “External Grants Policy Bulletin – 2020 Salary Cap
Limitation” [2020-03E]. Accessed on Mar. 26, 2025.) In its calculation of salary cap amounts, the hospital
incorrectly increased the Executive Level II salary level for employees who worked more than 2,080 hours. For
example, if an employee worked 2,264 hours in CY 2020, the hospital calculated a ratio by dividing an employee’s
actual hours worked (2,264 hours) by 2,080 hours, then multiplied the resulting ratio by the Executive Level II salary
level to calculate the employee’s salary cap. As a result, the hospital calculated an employee’s salary cap to be
$214,753, which was higher than the applicable salary cap of $197,300 for CY 2020.
28
During our audit, one hospital indicated that it had incorrectly used PRF payments for $65,497 of salaries that
exceeded the Executive Level II salary level. The hospital stated that it would replace the unallowable amount with
unreimbursed lost revenues in the subsequent reporting period.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 8
Costs Not Adequately Supported
PRF recipients must comply with certain Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for HHS Awards (45 CFR part 75). The financial management system of
each PRF recipient must provide accurate, current, and complete disclosure of the financial
results of each Federal award or program. The PRF recipient’s records must identify the source
and application of funds for federally funded activities and be supported by source
documentation (45 CFR §§ 75.302(b)(2) and (3)).
Three hospitals did not maintain adequate documentation to support the use of PRF
payments to cover salary and fringe benefit costs totaling $52.5 million. Specifically, two
hospitals used PRF payments totaling $52.1 million to cover salary and fringe benefit costs
for which the hospitals did not provide payroll records. 29 The remaining hospital used PRF
payments to cover $364,405 in salary costs without underlying work hours inputted into the
hospital’s timekeeping system. The hospital stated that it should not have used PRF
payments for these costs.
Costs Charged but Not Incurred
PRF recipients must comply with certain Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for HHS Awards (45 CFR part 75). The financial management system of
each PRF recipient must provide accurate, current, and complete disclosure of the financial
results of each Federal award or program. The PRF recipient’s records must identify the source
and application of funds for federally funded activities and be supported by source
documentation (45 CFR §§ 75.302(b)(2) and (3)).
Three hospitals used PRF payments for $143,881 in costs that were not incurred. Specifically,
two hospitals used PRF payments to cover expenses based on amounts detailed in purchase
orders; however, the actual invoices and payment amounts were $100,448 less than the
amounts detailed in the purchase orders. The remaining hospital used PRF payments to cover
fringe benefit costs that exceeded actual costs by $43,433 because it used an incorrect
percentage to calculate fringe benefit costs.30
Duplicate Expenses
PRF recipients must comply with certain Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for HHS Awards (45 CFR part 75). The financial management system of
each PRF recipient must provide accurate, current, and complete disclosure of the financial
29
The two hospitals are part of the same parent-subsidiary system. One of the hospitals is the parent organization.
The hospitals stated that they provided OIG all the available supporting information.
30
The hospital stated that, due to a clerical error, it used an incorrect fringe benefit rate of 62 percent instead of 47
percent, which was its actual fringe benefit rate.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 9
results of each Federal award or program. The PRF recipient’s records must identify the source
and application of funds for federally funded activities and be supported by source
documentation (45 CFR §§ 75.302(b)(2) and (3)). Additionally, PRF payments may not be
applied to the same expenses and lost revenues that were reported on in prior reporting
periods. 31
Two hospitals used PRF payments to cover duplicate expenses totaling $5.8 million.
Specifically, one hospital used PRF payments to cover expenses (i.e., personnel, supplies, and
equipment) totaling $5.7 million during PRF reporting period 2 that it already reported in
reporting period 1. The other hospital used PRF payments to cover employee salary deductions
totaling $105,675 that it also included in its gross salaries charges.
Inaccurate Lost Revenue Calculations
PRF payment amounts not fully expended on health care-related expenses attributable to
COVID-19 may be applied to lost revenues. Lost revenues can be calculated by one of three
options, including determining the difference between actual 2019 patient service revenues
and actual patient care revenues during the period of availability.32, 33 In addition, HRSA’s
guidance for lost revenues calculations provided recipients flexibility in the reconciliation of lost
revenues among parent entities and subsidiaries. However, HRSA’s FAQs stated that expenses
and lost revenues may not be duplicated, and payments may not be applied to the same
expenses and lost revenues that were reported on in prior reporting periods.
Two hospitals inaccurately calculated and reported lost revenues totaling $645.6 million.
Specifically, one hospital (a parent hospital) reported lost revenues totaling $643.2 million that
were also reported by four of its subsidiary hospitals. 34 The other hospital overstated its lost
revenues by $2.4 million because the hospital used incorrect 2019 actual patient service
revenues as the baseline to calculate its 2020 lost revenues.
CAUSES OF UNALLOWABLE EXPENDITURES AND INACCURATELY CALCULATED LOST REVENUES
These deficiencies occurred because although hospitals attested to the PRF terms and
conditions and HRSA provided continuously updated guidance to PRF recipients, the hospitals
made clerical errors in their reporting of expenditures and did not always correctly interpret
31
HRSA, PRF FAQs.
32
HRSA, PRF Reporting Requirements.
33
HRSA, “How to Calculate Lost Revenues for PRF and ARP Rural Reporting.” Accessed on Mar. 26, 2025.
34
The parent hospital calculated lost revenues on a consolidated basis totaling $1.2 billion. That total included lost
revenues for four of its subsidiary hospitals that had separately calculated and reported lost revenues totaling
$643.2 million that duplicated the parent hospital’s reported lost revenues.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 10
HRSA guidance, maintain documentation to support reported expenditures, or have procedures
to verify the accuracy of lost revenue calculations.
Further, in the context of extraordinary challenges from the COVID-19 public health emergency,
HRSA’s operational objective at the beginning of the public health emergency was to rapidly
disburse PRF payments to support providers facing severe economic hardship. In addition,
some hospitals indicated they had a lack of staffing resources and unusually high staff turnover.
These and other unprecedented challenges of the pandemic may have contributed to clerical
errors when reporting PRF expenditures or caused staff to misinterpret HRSA’s guidance.
In addition to the recommendations below, key stakeholders and decisionmakers should use
the information included in this report when determining lessons learned from administering
PRF distributions during the COVID-19 public health emergency and look for additional ways to
safeguard Federal funds when rapidly disbursing assistance payments to providers in response
to future public health emergencies.
RECOMMENDATIONS
We recommend that the Health Resources and Services Administration:
• require the 10 hospitals that we determined as having used PRF payments for
unallowable expenditures totaling $63 million to return the unallowable amounts to the
Federal Government or ensure that the hospitals properly replace the unallowable
expenditures with allowable unreimbursed lost revenues or eligible expenses, if any,
and
• require the 2 hospitals that we determined as having inaccurately calculated and
reported lost revenues totaling $645.6 million to identify and return to the Federal
Government any PRF payments used to offset inaccurately calculated lost revenues or
replace them with allowable unreimbursed lost revenues or eligible expenses, if any.
OTHER MATTERS
PRF payment amounts not fully expended on health care-related expenses attributable to
COVID-19 may be applied to patient care lost revenues. As noted previously, recipients could
choose to apply PRF payments toward lost revenues using one of the following three options:
1. the difference between actual patient care revenues from 2019 and actual patient care
revenues during the period of availability,
2. the difference between budgeted patient care revenues (approved by hospital officials
prior to March 27, 2020) and actual patient care revenues, or
3. any reasonable method of estimating revenues.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 11
HRSA’s guidance allowed recipients to calculate lost revenues as a stand-alone quarterly
calculation and consider only those quarters with lost revenues to determine total loss amounts
for each reporting period. 35 Option 3 provided reporting entities additional flexibility in the
reconciliation of lost revenues among parent and subsidiary entities, including the application
of lost revenues as the reporting entity saw fit.
Twenty-eight of the thirty selected hospitals reported lost revenues totaling $6.9 billion. For
these hospitals, we recalculated lost revenues to determine what these amounts would have
been on an annual basis under option 1 (i.e., comparing 2019 actual patient care revenues to
2020 and 2021 actual patient care revenues). 36 Based on our analysis, we determined that the
methodologies prescribed by HRSA resulted in hospitals reporting higher lost revenue amounts
and did not always result in an efficient use of PRF payments.
If HRSA had required reporting entities to use option 1 and annualize their revenues, 27 of the
28 selected hospitals would not have been able to report a total of $3.5 billion in lost revenues
and would not be able to apply PRF payments to offset this amount. For any PRF payments
applied against these excess lost revenue amounts, the PRF payments could have been used for
other purposes that supported hospitals’ activities (e.g., upgrading HVAC systems, purchasing
cleaning supplies and personal protective equipment) related to the COVID-19 public health
emergency. In addition, instead of refunding the PRF payment amounts used for unallowable
expenditures, HRSA allowed hospitals to offset unallowable amounts against amounts
calculated for lost revenues. 37 For further details, see Appendix G.
HEALTH RESOURCES AND SERVICES ADMINISTRATION COMMENTS AND
OFFICE OF INSPECTOR GENERAL RESPONSE
In written comments on our draft report, HRSA concurred with our recommendations and
indicated that it will review the relevant records and seek repayment, as appropriate.
Regarding our Other Matters section, HRSA noted that it was legally required to allow providers
to use “any reasonable” method to determine revenue losses, and OIG’s analysis and
conclusion were at odds with flexibilities afforded to providers.
35
HRSA, PRF FAQs.
36
The PRF expenditure reports for the payment period ending June 30, 2020, were due on Sept. 30, 2021, with a
grace period ending on Nov. 30, 2021. The expenditure reports for the payment period ending Dec. 31, 2020, were
due on Mar. 31, 2022. Therefore, actual patient care revenues for CY 2020 would have been available prior to the
PRF report due dates.
37
In its FAQs, HRSA indicated that the reporting entities could replace unallowable expenses with unreimbursed
lost revenues.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 12
We acknowledge that certain flexibilities were available to providers for lost revenue
calculations. However, we maintain that calculating revenue losses by comparing year-over-
year actual patient service revenues would have resulted in a more efficient use of PRF
payments.
HRSA also provided technical comments, which we addressed as appropriate. HRSA’s
comments, excluding the technical comments, are included as Appendix H.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 13
APPENDIX A: AUDIT SCOPE AND METHODOLOGY
SCOPE
We identified 4,725 hospitals that received and kept 1 or more PRF payments totaling
approximately $74.1 billion during CY 2020. We selected for audit a nonstatistical sample of 30
hospitals that received PRF payments from General and certain Targeted Distributions totaling
$6.6 billion during CY 2020. 38 We selected hospitals based on a risk analysis that included
geographic location (i.e., COVID-19 high-impact areas, urban and rural areas), total PRF
payment amounts, and organizational structure (hospital groups and stand-alone hospitals). 39
We reviewed the selected hospitals’ use of PRF payments received from General and certain
Targeted Distributions, including COVID-19 high-impact, rural, and safety net hospital
distributions.
We limited our review of HRSA’s and the selected hospitals’ internal controls to those
applicable to our audit objective. We did not assess HRSA’s or the hospitals’ overall internal
control structure. Specifically, we reviewed HRSA’s policies and procedures for reviewing
expenditure information submitted by providers and its guidance to providers on the use and
reporting of PRF payments. We also reviewed selected hospitals’ policies and procedures for
monitoring, tracking, and expending PRF payments.
We established reasonable assurance of the authenticity and accuracy of the PRF payment data
by reconciling it with PRF expenditure reports submitted by the hospitals through HRSA’s PRF
Reporting Portal.
We conducted our audit from November 2021 through December 2024.
METHODOLOGY
To accomplish our objective, we:
• reviewed applicable Federal laws, regulations, and guidance, including the PRF terms
and conditions and HRSA’s FAQs related to providers’ use of PRF payments;
38
The sampling frame consisted of 649 hospitals that received and kept 1 or more PRF payments totaling
approximately $23.1 billion. PRF payment recipients had 90 days to return a payment to HHS, otherwise the
recipient was deemed to have accepted the terms and conditions. Our sample included hospitals that received PRF
payments in CY 2020 for which hospitals attested to the payment terms and conditions or were deemed to have
accepted the terms and conditions.
39
COVID-19 high-impact area payments were made to hospitals that had large numbers of COVID-19 inpatient
admissions. In addition, using publicly available data from USAFacts.org and HRSA websites, we identified 45 urban
and 5 rural counties with the highest per capita number of COVID-19 cases as of Dec. 31, 2020. These counties are
located in 19 States.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 14
• met with HRSA officials to gain an understanding of the PRF’s payment terms and
conditions, reporting requirements, and HRSA’s monitoring and oversight activities;
• reviewed HRSA’s policies and procedures related to its oversight of recipients’ reporting
on the use of PRF funds and compliance with the terms and conditions for PRF
payments;
• obtained from HRSA a list of hospitals that received a payment through Targeted
Distributions, including COVID-19 high-impact, rural, Tribal, safety net hospital, and
children’s hospital distributions;
• obtained PRF payments data for General and Targeted Distributions;
• compiled a list of hospitals that received PRF General and Targeted Distributions; 40
• created a list of hospitals41 in areas most impacted by COVID-19 that received PRF
payments from General Distributions and certain Targeted Distributions, including
COVID-19 high-impact, rural, and safety net hospital distributions;
• selected a nonstatistical sample of 30 hospitals that received PRF payments based on
the amount of PRF payments received, geographic locations (areas most impacted by
COVID-19, urban and rural areas), and organizational structure (hospital groups and
stand-alone hospitals); 42
• for each hospital selected for audit, interviewed hospital officials; reviewed its
expenditure reports submitted to HRSA and a nonstatistical sample of expenses based
on materiality and expense descriptions; and analyzed supporting accounting,
personnel, and other records to determine whether:
o payments were used only to prevent, prepare for, and respond to COVID-19;
o payments were used for health care-related or general and administrative
expenses or were applied to offset eligible lost revenues attributable to
40
We obtained from HRSA lists of TINs associated with hospitals that received PRF payments from the Targeted
Distributions; we then extracted PRF payments (from the General and Targeted Distributions) for these TINs from
the PRF payments attestation file provided by OIG’s Division of Data Analytics.
41
To create a comprehensive list of hospitals in areas most impacted by COVID-19, we also used the following
datasets: (1) a list of hospitals registered with Medicare, (2) hospital revenue report data for fiscal years 2017 and
2018 from Acumen (a consulting firm that HRSA had engaged for the development and construction of certain PRF
payment files), and (3) a hospital COVID-19 coverage report from the HealthData.gov website.
42
The sampling frame consisted of 649 hospitals that received and kept 1 or more PRF payments totaling
approximately $23.1 billion.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 15
COVID-19, and whether the amount for any lost revenues applied toward PRF
payments was accurately calculated; 43
o payments were not used to pay for expenses or losses reimbursed or eligible for
reimbursement from other funding sources (e.g., reimbursements from the
Federal Emergency Management Agency, Medicare/Medicaid or commercial
health insurance, the Paycheck Protection Program, and assistance from State or
local government agencies); and
o payments were not used to pay salaries at a rate in excess of certain thresholds
or for other prohibited activities.
• discussed the results of our audit with HRSA officials.
We conducted this performance audit in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions
based on our audit objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
43
We recalculated lost revenue amounts using the same option that the entity used for determining lost revenues.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 16
APPENDIX B: RELATED OFFICE OF INSPECTOR GENERAL REPORTS
Report Title Report Number Date Issued
Selected Home Health Agencies Complied With Terms
and Conditions and Federal Requirements for Provider A-01-22-00503 11/26/2024
Relief Fund Payments
Seven of Thirty Hospices Reviewed Did Not Comply or
May Not Have Complied With Terms and Conditions
A-02-22-01014 11/8/2024
and Federal Requirements for Provider Relief Fund
Payments
HRSA Made Some Potential Overpayments to
Providers Under the Phase 2 General Distribution of A-09-22-06001 3/4/2024
the Provider Relief Fund Program
The Provider Relief Fund Helped Select Nursing Homes
Maintain Services During the COVID 19 Pandemic, but OEI-06-22-00040 12/12/2023
Some Found Guidance Difficult To Use
HHS’s Oversight of Automatic Provider Relief Fund
Payments Was Generally Effective but Improvements A-02-20-01025 10/30/2023
Could Be Made
HRSA Made COVID-19 Uninsured Program Payments
to Providers on Behalf of Individuals Who Had Health
A-02-21-01013 7/13/2023
Insurance Coverage and for Services Unrelated to
COVID-19
Targeted Provider Relief Funds Allocated to Hospitals
Had Some Differences With Respect to the Ethnicity OEI-05-20-00580 7/12/2023
and Race of Populations Served
HHS’s and HRSA’s Controls Related to Selected
Provider Relief Fund Program Requirements Could Be A-09-21-06001 9/26/2022
Improved
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 17
APPENDIX C: PROVIDER RELIEF FUND GENERAL AND TARGETED DISTRIBUTION PAYMENTS
As of October 2024, HRSA distributed $145.9 billion of the $178 billion appropriated to HHS for
the PRF. Of the $145.9 billion, $88.4 billion was distributed in General Distributions and
$57.5 billion was distributed in several Targeted Distributions. A portion of the remaining $32.1
billion was distributed or allocated for HRSA’s program for uninsured individuals, the COVID-19
Coverage Assistance Fund, and Phase 4 General Distribution payments. 44
General Distributions
HRSA made General Distributions in four phases to health care providers, including Medicare
providers; providers participating in Medicaid, Children’s Health Insurance Program (CHIP), or
Medicaid managed care plans; dentists; assisted living facilities; and behavioral health
providers.
• Phase 1 General Distribution: HRSA distributed $48.5 billion to providers in two rounds
under the Phase 1 General Distribution for eligible providers that billed Medicare fee-
for-service. These funds were allocated proportional to providers’ share of annual
patient service revenues.
• Phase 2 General Distribution: HRSA distributed $5 billion in the Phase 2 General
Distribution to Medicaid, CHIP, and dental providers, as well as assisted living facilities
and certain Medicare providers who did not receive a Phase 1 General Distribution
payment equal to 2 percent of their total patient care revenue or had a change in
ownership in 2019 or 2020. Providers were required to apply for funding and included
in their applications certain financial information related to documenting revenue
necessary to determine the amount that a facility would receive.
• Phase 3 General Distribution: HRSA distributed $19.3 billion in the Phase 3 General
Distribution to providers that had not received funding in prior distributions (i.e.,
because they were new or because they were behavioral health providers not included
in a prior allocation). Providers that had previously received PRF payments but had not
received the full 2 percent of their annual patient revenue in PRF assistance were also
eligible to apply for additional funds. Providers were required to apply for these funds.
• Phase 4 General Distribution: HRSA distributed approximately $15.6 billion in the Phase
4 General Distribution to providers based on changes in revenues and expenses, as well
as the amount and type of services provided to Medicare, Medicaid, and CHIP patients.
Providers were required to apply for these funds.
44
As of June 2023, with the passage of the Fiscal Responsibility Act of 2023, P.L. No. 118-5, Congress rescinded
unobligated PRF funds. In response, HRSA stopped making PRF payments to providers.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 18
Targeted Distributions
HRSA also distributed PRF funds to certain types of providers that had high needs due to
COVID-19. These included the following:
• COVID-19 High-Impact Area Providers: HRSA distributed nearly $22 billion in COVID-19
high-impact area payments to hospitals that had large numbers of COVID-19 inpatient
admissions.45
• Safety Net Hospitals and Children’s Hospitals: HRSA distributed $13.3 billion to safety
net and acute care hospitals and $1.1 billion to children’s hospitals.
• Rural Providers: HRSA distributed $11.2 billion in rural payments to rural hospitals,
including rural acute care general hospitals and critical access hospitals; rural health
clinics; and Federally Qualified Health Centers located in rural areas, including specialty
rural hospitals, urban hospitals with certain rural Medicare designations, and hospitals
in small metropolitan areas.
• Tribal Hospitals, Clinics, and Urban Health Centers/Indian Health Service Providers: HRSA
distributed $540 million in relief funds to Tribal hospitals, clinics, and urban health
centers. These payments were based on operating expenses.
• Skilled Nursing Facilities and Nursing Homes: HRSA distributed $4.9 billion in skilled
nursing facility distribution payments. Additionally, to help combat the devastating
effects of COVID-19, HRSA distributed $4.5 billion to skilled nursing facilities and nursing
homes nationwide, which included payments for infection control and quality incentive
payments to nursing homes that created and maintained safe environments for their
residents.
45
Hospitals that treated 100 or more COVID-19 patients between Jan. 1 and Apr. 10, 2020, were eligible for the first
round of high-impact distributions. Hospitals that treated more than 160 COVID-19 patients between Jan. 1 and
June 10, 2020, were eligible for the second round of high-impact distributions.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 19
APPENDIX D: OPTIONS FOR CALCULATING LOST REVENUES
Providers, including hospitals, could use one of the following options to calculate their lost
revenues.
Lost Revenues
Option 1 Option 2 Option 3
Options
The difference
between actual
patient care
The difference between Any reasonable
revenues from
Definition of Option budgeted and actual method of estimating
2019 and actual
patient care revenues revenues
patient revenues
during the period
of availability
PRF Reporting 2020 Budgeted Alternate Reasonable
2019 Actual Revenue
Portal Option Revenue Methodology
Base Period for
2019 2020 or 2021 Not prescribed
Calculation
Actuals vs. Actuals
Calculation Method (e.g., Q1 2020 vs. Budget vs. Actuals Not prescribed
Q1 2019)
Frequency of
Quarterly Quarterly Quarterly
Calculation
Each quarter during the
Duration of Lost Each quarter during the Each quarter during the period of availability in
Revenues Period period of availability period of availability which lost revenues were
determined
Service Lines To All patient care services
All patient care
Include in All patient care services (as appropriate for
services
Revenues methodology)
Budget Approval
Not applicable Before March 27, 2020 Not prescribed
Date
Source: HRSA, Provider Relief Fund Lost Revenues Guide – Reporting Period 1. Accessed on Mar. 26, 2025.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 20
APPENDIX E: SELECTED HOSPITALS’ REPORTED USE OF CY 2020 PROVIDER RELIEF FUND
PAYMENTS
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 21
APPENDIX F: SUMMARY OF SAMPLED HOSPITALS’ UNALLOWABLE EXPENDITURES AND
INACCURATELY CALCULATED LOST REVENUE AMOUNTS
Unallowable
Expenditures
and
Inaccurately
Sample Total PRF Payments Calculated Lost Reason(s) for Unallowable Expenditures
Hospital Hospital Reported in Revenue and Inaccurately Calculated Lost Revenue
No. Periods 1 and 2 Amount Amount
1 $1,197,231,926 $91,948 Costs charged but not incurred
2 $633,073,890 -
3 $467,977,273 $2,901,904 Salary costs exceeded Federal salary limit
4 $408,913,562 -
5 $317,447,996 -
6 $90,027,314 $10,718,789 Costs not adequately supported
Costs not adequately supported
7 $673,336,086 $684,577,381*
Inaccurately calculated lost revenues
8 $198,859,422 $43,433 Costs charged but not incurred
9 $124,871,770 -
10 $35,744,177 -
11 $183,018,381 $1,625,133 Salary costs exceeded Federal salary limit
12 $173,227,425 -
13 $135,083,813 -
14 $45,472,721 -
15 $313,670,033 -
16 $288,615,514 $14,853 Salary costs exceeded Federal salary limit
17 $31,100,000 -
Salary costs exceeded Federal salary limit
18 $325,817,736 $429,902
Costs not adequately supported
19 $231,167,516 $2,368,313 Inaccurately calculated lost revenues
20 $66,058,129 -
21 $36,715,276 -
22 $124,260,647 -
23 $99,508,592 -
24 $169,916,040 -
25 $80,421,707 $105,675 Duplicate expenses
26 $63,500,000 -
27 $20,263,721 -
28 $14,085,765 -
29 $63,027,573 -
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 22
Unallowable
Expenditures
and
Inaccurately
Sample Total PRF Payments Calculated Lost Reason(s) for Unallowable Expenditures
Hospital Hospital Reported in Revenue and Inaccurately Calculated Lost Revenue
No. Periods 1 and 2 Amount Amount
Duplicate expenses
30 $16,123,028 $5,713,487
Costs charged but not incurred
Total $6,628,537,034† $708,590,817†
* We reviewed the hospital’s total lost revenues calculation for periods 1 and 2, which exceeded the
total PRF payments the hospital reported for the same periods. These inaccurately calculated revenues
could be used to offset PRF payments in future reporting periods.
† Amounts do not add up to the total due to rounding.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 23
APPENDIX G: OTHER MATTERS – POTENTIAL SAVINGS CALCULATIONS
(A) (B) (C) (D) (E) (F) (G) (H)
OIG Option Total PRF Total Lost Total PRF Total Lost Recalculated Total Potential
Sample Hospital Payments Revenues Hospitals Payment Revenues Lost Revenues Savings if
Number Used To Hospital Calculated and Hospitals Remained After if Hospitals Hospitals Used
Calculate Reported in Reported Applied To Reporting Used Option 1 Option 1 and
Lost Periods 1 and 2 Offset Lost Periods 1 and 2 and Annualized Annualized Loss
Revenues Revenues in Loss Calculation Calculation
(1, 2, 3, Periods 1 and (D) - (E) = (F)
or N/A) 2 (D) - (G) = (H)
1 N/A $1,197,231,926 Did not use PRF to $0 $0 $0 N/A
offset lost revenues
2 3 $633,073,890 $1,214,923,000 $633,073,890 $581,849,110 $688,791,000 $526,132,000
3 3 $467,977,273 $737,679,709 $448,997,381 $288,682,328 $335,272,000 $402,407,709
4 3 $408,913,562 $422,345,167 $401,423,682 $20,921,485 $118,770,000 $303,575,167
5 1 $317,447,996 $378,426,396 $26,687,322 $351,739,074 $267,165,428 $111,260,968
6 2 $90,027,314 $470,585,010 $63,863,461 $406,721,549 $306,264,556 $164,320,454
7 2 $673,336,086 $1,199,282,186 $611,795,195 $587,486,991 $746,154,066 $453,128,120
8 1 $198,859,422 $155,958,173 $70,475,628 $85,482,545 $108,456,095 $47,502,078
9 3 $124,871,770 $148,437,554 $48,684,686 $99,752,868 $31,354,529 $117,083,025
10 2 $35,744,177 $41,469,203 $35,744,177 $5,725,026 $0 $41,469,203
11 1 $183,018,381 $101,900,792 $101,155,593 $745,199 $22,968,349 $78,932,443
12 3 $173,227,425 $179,286,726 $173,227,425 $6,059,302 $0 $179,286,726
13 1 $135,083,813 $137,364,825 $55,659,185 $81,705,640 $130,445,369 $6,919,456
14 1 $45,472,721 $69,261,731 $17,249,015 $52,012,717 $57,189,953 $12,071,778
15 1 $313,670,033 $156,108,037 $156,108,037 $0 $0 $156,108,037
16 1 $288,615,514 $213,859,580 $10,547,761 $203,311,819 $56,826,157 $157,033,423
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 24
(A) (B) (C) (D) (E) (F) (G) (H)
OIG Option Total PRF Total Lost Total PRF Total Lost Recalculated Total Potential
Sample Hospital Payments Revenues Hospitals Payment Revenues Lost Revenues Savings if
Number Used To Hospital Calculated and Hospitals Remained After if Hospitals Hospitals Used
Calculate Reported in Reported Applied To Reporting Used Option 1 Option 1 and
Lost Periods 1 and 2 Offset Lost Periods 1 and 2 and Annualized Annualized Loss
Revenues Revenues in Loss Calculation Calculation
(1, 2, 3, Periods 1 and (D) - (E) = (F)
or N/A) 2 (D) - (G) = (H)
17 N/A $31,100,000 Did not use PRF to $0 $0 $0 N/A
offset lost revenues
18 3 $325,817,736 $352,311,522 $180,718,246 $171,593,276 $39,956,880 $312,354,641
19 3 $231,167,516 $231,167,516 $231,167,516 $0 $201,427,464 $29,740,052
20 1 $66,058,129 $107,447,792 $56,416,214 $51,031,578 $59,330,035 $48,117,758
21 1 $36,715,276 $42,556,357 $33,488,663 $9,067,694 $13,046,610 $29,509,747
22 1 $124,260,647 $100,110,853 $84,192,914 $15,917,939 $100,110,853 $0*
23 3 $99,508,592 $140,617,742 $87,187,793 $53,429,949 $49,215,436 $91,402,306
24 3 $169,916,040 $71,541,904 $71,541,904 $0 $0 $71,541,904
25 3 $80,421,707 $70,342,667 $70,342,666 $1 $27,095,799 $43,246,868
26 2 $63,500,000 $52,023,235 $52,023,234 $1 $0 $38,523,235
27 3 $20,263,721 $34,754,947 $20,263,721 $14,491,226 $6,019,151 $28,735,796
28 1 $14,085,765 $11,086,294 $6,211,061 $4,875,233 $1,688,489 $9,397,805
29 1 $63,027,573 $64,527,315 $37,740,382 $26,786,933 $0 $64,527,315
30 3 $16,123,028 $26,950,100 $4,713,054 $22,237,046 $4,713,054 $22,237,046
Total $6,628,537,034† $6,932,326,333 $3,790,699,806 $3,141,626,527† $3,372,261,273 $3,546,565,060
* The hospital used option 1 and suffered revenue losses in all eight quarters.
† Amounts do not add up to totals due to rounding.
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 25
APPENDIX H: HEALTH RESOURCES AND SERVICES ADMINISTRATION COMMENTS
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 26
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 27
Hospitals’ Compliance With Provider Relief Fund Requirements (A-02-22-01003) 28
Report Fraud, Waste,
and Abuse
OIG Hotline Operations accepts tips and complaints from all sources about
potential fraud, waste, abuse, and mismanagement in HHS programs. Hotline
tips are incredibly valuable, and we appreciate your efforts to help us stamp
out fraud, waste, and abuse.
TIPS.HHS.GOV
Phone: 1-800-447-8477
TTY: 1-800-377-4950
Who Can Report?
Anyone who suspects fraud, waste, and abuse should report their concerns
to the OIG Hotline. OIG addresses complaints about misconduct and
mismanagement in HHS programs, fraudulent claims submitted to Federal
health care programs such as Medicare, abuse or neglect in nursing homes,
and many more. Learn more about complaints OIG investigates.
How Does It Help?
Every complaint helps OIG carry out its mission of overseeing HHS programs
and protecting the individuals they serve. By reporting your concerns to the
OIG Hotline, you help us safeguard taxpayer dollars and ensure the success of
our oversight efforts.
Who Is Protected?
Anyone may request confidentiality. The Privacy Act, the Inspector General
Act of 1978, and other applicable laws protect complainants. The Inspector
General Act states that the Inspector General shall not disclose the identity of
an HHS employee who reports an allegation or provides information without
the employee’s consent, unless the Inspector General determines that
disclosure is unavoidable during the investigation. By law, Federal employees
may not take or threaten to take a personnel action because of
whistleblowing or the exercise of a lawful appeal, complaint, or grievance
right. Non-HHS employees who report allegations may also specifically
request confidentiality.
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Contact Us
For specific contact information, please visit us online.
U.S. Department of Health and Human Services
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Email: Public.Affairs@oig.hhs.gov
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- oig.hhs.gov