Government Seeks to Get Back Improperly Collected $784M From Healthcare Providers

Nearly $784 million was paid out in error to healthcare providers by a pandemic program that gave hospitals and clinics funds for testing and treatment of COVID-19 in patients without health insurance. Now, the government is seeking to get it back.

The Health Resources and Services Administration (HRSA) spent over $4 billion in 2020 on the COVID-19 Uninsured Program (UIP) to pay for diagnostics and treatment for over 19 million individuals without insurance. The HHS OIG looked into a portion of these reimbursements.  

An audit by the OIG found that nearly 20% of the money HRSA provided for about 3.7 million individuals was improper because the patients already had health insurance, received services unrelated to COVID-19, or never received the services at all.

In the audit report, OIG said, “We understand that HRSA’s operational objective for the UIP was to rapidly disburse funds for COVID-19 testing and treatment to ensure uninsured individuals were receiving vital health care services and to prevent the spread of COVID 19. However, if HRSA or another HHS agency administers any programs of a similar nature in the future, the agency should consider the information included in this report.” 

Healthcare Provider Audit Reveals Improper Payments

• OIG conducted an audit of 300 individuals, reviewing their medical records, bills, and Medicare/Medicaid coverage.
• The audit uncovered inappropriate payments totaling $294,294, affecting up to 58 patients.
• OIG recommends that HRSA (Health Resources and Services Administration) conduct further investigations to identify potentially hundreds of millions of dollars in other wrongful payments.
• Corrective action is advised to address the improper amounts found within the 300-person group and recover the overpayments.

HRSA indicated in its written comments that it either wholly or partially agreed with the findings and suggestions made by the OIG. It is important to note that HRSA stated it has already taken steps to tackle the problem of recognizing and recouping incorrect payments made by providers. As part of a more comprehensive examination plan, the HRSA stated that it began gathering and examining pertinent information from providers in March 2022. 

If HRSA concludes that a provider filed claims for insured persons or treatments that were not medically required in line with the enabling legislation and [COVID-19 Uninsured Program] Terms and Conditions, then the agency will take corrective action, which may include demanding repayment, it said.

HRSA also agreed with the OIG’s suggestions to tighten its processes in case more programs like the COVID-19 UIP are deployed in the future. The OIG and other independent policy analysts have recently been quite critical of the government’s rushed rollout of pandemic relief financing initiatives.

The OIG issued a study of targeted Provider Relief Fund allocations the day before the uninsured payments audit, drawing attention to inequalities in distributions based on the racial and ethnic makeup of hospital communities.

Another examination of hospitals’ net operating margins revealed that relief payments may have been greater than what was required to prevent the majority of institutions from falling into financial hardship.