1. ATTITUDE*KNOWLEDGE*ACTION Alabama Primary Health Care Association September 21, 2016 Presenter: Adrienne Hurtt

2. NEVAEH Healthcare Revenue Management 2 Adrienne Hurtt, CEO NEVAEH Healthcare Revenue Management

3.  Understand HRSA 19 Program Requirements  Implementing Internal Controls  Financial Risks and Need for Regular Assessment  Implementation of Appropriate Controls  Overview of Corporate Compliance 3 NEVAEH Healthcare Revenue Management

4.  In general, compliance means conforming to a rule, such as a specification, policy, standard or law. Regulatory compliance describes the goal that organizations aspire to achieve in their efforts to ensure that they are aware of and take steps to comply with relevant laws and regulations.  Due to the increasing number of regulations and need for operational transparency, organizations are increasingly adopting the use of consolidated and harmonized sets of compliance controls.[1] This approach is used to ensure that all necessary governance requirements can be met without the unnecessary duplication of effort and activity from resources. 4 NEVAEH Healthcare Revenue Management

6. NEED- Program Requirement #1 Needs Assessment Health center demonstrates and documents the needs of its target population, updating its service area, when appropriate. (Section 330(k)(2) and Section 330(k)(3)(J) of the PHS Act) 6 NEVAEH Healthcare Revenue Management

7. SERVICES – Program Requirement #2  Required and Additional Services  Health center provides all required primary, preventive, enabling health services and additional health services as appropriate and necessary, either directly or through established written arrangements and referrals. (Section 330(a) of the PHS Act)  Note: Health centers requesting funding to serve homeless individuals and their families must provide substance abuse services among their required services. (Section 330(h)(2) of the PHS Act) 7 NEVAEH Healthcare Revenue Management

8. Staffing Requirement- Program Requirement #3  Health center maintains a core staff as necessary to carry out all required primary, preventive, enabling health services and additional health services as appropriate and necessary, either directly or through established arrangements and referrals. Staff must be appropriately licensed, credentialed, and privileged. Section 330(a)(1), (b)(1)-(2), (k)(3)(C), and (k)(3)(I) of the PHS Act) NEVAEH Healthcare Revenue Management 8

9.  Accessible Hours of Operation/Locations – Program Requirement #4  Health center provides services at times and locations that assure accessibility and meet the needs of the population to be served. (Section 330(k)(3)(A) of the PHS Act NEVAEH Healthcare Revenue Management 9

10.  After Hours Coverage- Program Requirement #5  Health center provides professional coverage for medical emergencies during hours when the center is closed. (Section 330(k)(3)(A) of the PHS Act and 42 CFR 51c.102(h)(4)) NEVAEH Healthcare Revenue Management 10

11.  Hospital Admitting Privileges and Continuum of Care-Program Requirement # 6  Health center physicians have admitting privileges at one or more referral hospitals, or other such arrangement to ensure continuity of care. In cases where hospital arrangements (including admitting privileges and membership) are not possible, health center must firmly establish arrangements for hospitalization, discharge planning, and patient tracking. (Section 330(k)(3)(L) of the PHS Act) NEVAEH Healthcare Revenue Management 11

12.  Sliding Fee Discounts – Program Requirement #7  Health center has a system in place to determine eligibility for patient discounts adjusted on the basis of the patient’s ability to pay.  This system must provide a full discount to individuals and families with annual incomes at or below 100% of the Federal poverty guidelines (only nominal fees may be charged) and for those with incomes between 100% and 200% of poverty, fees must be charged in accordance with a sliding discount policy based on family size and income.  No discounts may be provided to patients with incomes over 200 % of the Federal poverty guidelines.  No patient will be denied health care services due to an individual's inability to pay for such services by the health center, assuring that any fees or payments required by the center for such services will be reduced or waived.(Section 330(k)(3)(G) of the PHS Act, 42 CFR 51c.303(f), and 42 CFR 51c.303(u)) NEVAEH Healthcare Revenue Management 12

13.  Quality Improvement/Assurance Plan –Program Requirement #8  Health center has an ongoing Quality Improvement/Quality Assurance (QI/QA) program that includes clinical services and management, and that maintains the confidentiality of patient records. The QI/QA program must include:  A clinical director whose focus of responsibility is to support the quality improvement/assurance program and the provision of high quality patient care;  Periodic assessment of the appropriateness of the utilization of services and the quality of services provided or proposed to be provided to individuals served by the health center; and such assessments shall:  Be conducted by physicians or by other licensed health professionals under the supervision of physicians;  Be based on the systematic collection and evaluation of patient records; and  Identify and document the necessity for change in the provision of services by the health center and result in the institution of such change, where indicated (Section 330(k)(3)(C) of the PHS Act, and 42 CFR 51c.303(c)(1-2)) NEVAEH Healthcare Revenue Management 13

14. MANAGEMENT AND FINANCE  Key Management Staff- Program Requirement #9  Health center maintains a fully staffed health center management team as appropriate for the size and needs of the center. Prior approval by HRSA of a change in the Project Director/Executive Director/CEO position is required. (Section 330(k)(3)(I) of the PHS Act, 42 CFR 51c.303(p) and 45 CFR 75.308(c)(2)(3) NEVAEH Healthcare Revenue Management 14

15.  Contractual/Affiliation Agreements- Program Requirement #10  Health center exercises appropriate oversight and authority over all contracted services, including assuring that any subrecipient(s) meets Health Center program requirements. (Section 330(k)(3)(I)(ii), 42 CFR 51c.303(n), (t), Section 1861(aa)(4) and Section 1905(l)(2)(B) of the Social Security Act, and 45 CFR 75) NEVAEH Healthcare Revenue Management 15

16.  Collaborative Relationships-Program Requirement #11  Health center makes effort to establish and maintain collaborative relationships with other health care providers, including other health centers, in the service area of the center. The health center secures letter(s) of support from existing health centers (section 330 grantees and Look-Alikes) in the service area or provides an explanation for why such letter(s) of support cannot be obtained. (Section 330(k)(3)(B) of the PHS Act and 42 CFR 51c.303(n)) NEVAEH Healthcare Revenue Management 16

17.  Financial Management and Control Policies- Program Requirement #12  Health center maintains accounting and internal control systems appropriate to the size and complexity of the organization reflecting Generally Accepted Accounting Principles (GAAP) and separates functions appropriate to organizational size to safeguard assets and maintain financial stability. Health center assures an annual independent financial audit is performed in accordance with Federal audit requirements, including submission of a corrective action plan addressing all findings, questioned costs, reportable conditions, and material weaknesses cited in the Audit Report. (Section 330(k)(3)(D), Section 330(q) of the PHS Act and 45 CFR 75.300-309, Subparts E and F. NEVAEH Healthcare Revenue Management 17

18.  Billing and Collections- Program Requirement #13  Health center has systems in place to maximize collections and reimbursement for its costs in providing health services, including written billing, credit and collection policies and procedures. (Section 330(k)(3)(F) and (G) of the PHS Act) NEVAEH Healthcare Revenue Management 18

19.  Budget- Program Requirement #14  Health center has developed a budget that reflects the costs of operations, expenses, and revenues (including the Federal grant) necessary to accomplish the service delivery plan, including the number of patients to be served. (Section 330(k)(3)(D), Section 330(k)(3)(I)(i), and 45 CFR 75.308 and 45 CFR 75 Subpart E NEVAEH Healthcare Revenue Management 19

20.  Program Data Reporting Systems-Program Requirement #15  Health center has systems which accurately collect and organize data for program reporting and which support management decision making. (Section 330(k)(3)(I)(ii) of the PHS Act and 45 CFR 75.342) NEVAEH Healthcare Revenue Management 20

21.  Scope of Project- Program Requirement #16  Health center maintains its funded scope of project (sites, services, service area, target population, and providers), including any increases based on recent grant awards. (45 CFR 75.308) NEVAEH Healthcare Revenue Management 21

22. GOVERNANCE – Program Requirement #17  Board Authority  Health center governing board maintains appropriate authority to oversee the operations of the center, including:  Holding monthly meetings;  Approval of the health center grant application and budget;  Selection/dismissal and performance evaluation of the health center CEO;  Selection of services to be provided and the health center hours of operations;  Measuring and evaluating the organization’s progress in meeting its annual and long-term programmatic and financial goals and developing plans for the long-range viability of the organization by engaging in strategic planning, ongoing review of the organization’s mission and bylaws, evaluating patient satisfaction, and monitoring organizational assets and performance; and  Establishment of general policies for the health center. (Section 330(k)(3)(H) of the PHS Act and 42 CFR 51c.304)  Note: In the case of public centers (also referred to as public entities) with co-applicant governing boards, the public center is permitted to retain authority for establishing general policies (fiscal and personnel policies) for the health center. (Section 330(k)(3)(H) of the PHS Act and 42 CFR 51c.304(d)(iii) and (iv)) NEVAEH Healthcare Revenue Management 22

23.  Board Composition- Program Requirement #18  The health center governing board is composed of individuals, a majority of whom are being served by the center and, this majority as a group, represent the individuals being served by the center in terms of demographic factors such as race, ethnicity, and sex. Specifically:  Governing board has at least 9 but no more than 25 members, as appropriate for the complexity of the organization.  The remaining non-consumer members of the board shall be representative of the community in which the center's service area is located and shall be selected for their expertise in community affairs, local government, finance and banking, legal affairs, trade unions, and other commercial and industrial concerns, or social service agencies within the community.  No more than one half (50%) of the non-consumer board members may derive more than 10% of their annual income from the health care industry.  Note: Upon a showing of good cause the Secretary may waive, for the length of the project period, the patient majority requirement in the case of a health center that receives a grant pursuant to subsection (g), (h), (i), or (p).(Section 330(k)(3)(H) of the PHS Act and 42 CFR 51c.304) NEVAEH Healthcare Revenue Management 23

24.  Conflict of Interest Policy- Program Requirement #19  Health center bylaws or written corporate board approved policy include provisions that prohibit conflict of interest by board members, employees, consultants and those who furnish goods or services to the health center.  No board member shall be an employee of the health center or an immediate family member of an employee. The Chief Executive may serve only as a non-voting ex-officio member of the board.(45 CFR 75.327 and 42 CFR 51c.304(b)) NEVAEH Healthcare Revenue Management 24

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26. http://bphc.hrsa.gov/programrequirements/ draftcompliancemanual/index.html http://bphc.hrsa.gov/programrequirements/ draftcompliancemanual/index.html 26 NEVAEH Healthcare Revenue Management

27.  The Bureau of Primary Health Care (BPHC) has released a draft Health Center Program Compliance Manual (the Compliance Manual) for public comment. The Health Center Compliance Manual serves as a web-based policy resource to assist in understanding and demonstrating compliance with Health Center Program requirements. 27 NEVAEH Healthcare Revenue Management

28. Introduction Chapter 1: Health Center Program Eligibility Chapter 2: Health Center Program Oversight Chapter 3: Needs Assessment Chapter 4: Required and Additional Services Chapter 5: Clinical Staffing Chapter 6: Accessible Locations and Hours of Operation Chapter 7: Coverage for Medical Emergencies During and After Hours Chapter 8: Continuity of Care and Hospital Admitting Chapter 9: Sliding Fee Discount Program Chapter 10: Quality Improvement/Assurance Program Chapter 11: Key Management Staff Chapter 12: Contracts and Sub awards Chapter 13: Conflict of Interest Chapter 14: Collaborative Relationships Chapter 15: Financial Management and Accounting Systems Chapter 16: Billing and Collections Chapter 17: Budget Chapter 18: Program Monitoring and Data Reporting Systems Chapter 19: Board Authority Chapter 20: Board Composition Chapter 21: Federal Tort Claims Act (FTCA) Deeming Requirements Appendix A: Health Center Program Non-Regulatory Policy Issuances Which Remain in Effect Glossary 28 NEVAEH Healthcare Revenue Management

29.  Make EHB one of your best friends  Be sure the accounting controls for GAAP are implemented at your organization  Be sure multiple signatures are required from ordering to check signing  Be sure no one person does it all 29 NEVAEH Healthcare Revenue Management

31. The American Health Lawyers Association (Health Lawyers) sent out a survey designed to explore the relationship between general counsel and compliance officer in different health care organizations. Health Lawyers sent the survey to 1964 in-house counsel and 2490 healthcare personnel, many of whom work as compliance officers. 429 recipients responded to the survey. The survey included 9 questions for all respondents to answer. It then asked respondents to answer several questions applicable to their particular organizational and reporting structure. The survey included questions for respondents at organizations where the general counsel serves as the compliance officer; where the compliance officer reports to the general counsel; and where the compliance officer does not report to the general counsel. The responses to the survey provide Board members, CEOs, counsel, compliance officers, and others interested in health care management with insights into the different structures that health care organizations use to manage their compliance activities. The diversity of compliance management structures and reporting relationships reinforce the conclusion that effective Boards will receive regular information and analysis on how their health care organizations manage their compliance activities 31 NEVAEH Healthcare Revenue Management

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44.  Onsite Contact  Legal Counsel  Policies and Procedures  Training  Documentation  Other Suggestions 44 NEVAEH Healthcare Revenue Management

46.  Standard Monthly  Contract oversight report (sub-recipients and contracting agencies), critical indicator expectations/projections to actual experience, monthly and year to date  Annual operating plan goals and objectives, projections to actual experience, current month and year to date  Balance sheet and revenue and expenditure report, summary level and breakout by clinic site, department and/or program – current month and year to date  Budget variance reports, budget to actual, by clinic site, department and/or program – current month and year to date  Number of days cash on hand  Federal drawdown, current month and year to date  Encounters, budget to actual, by clinic site, department and/or program; and, new patient encounters – current month, year to date, comparison to prior year  Aged accounts receivable  Aged accounts payable 46 NEVAEH Healthcare Revenue Management

47.  Standard Quarterly  Long range goals and objectives, projections to actual experience, current quarter and year to date  Payor mix – aggregate and by clinic location/department, budget to actual  Percent of revenues from patient services versus grants, budget to actual  Denial rate by payor source – aggregate, by clinic site, department and/or program, by provider  Appointment experience – total volume, missed/canceled and walk-in experience by time of day and day of week  Productivity by provider – encounters by provider per hour, per month and year-to-date and number of RVUs associated with monthly encounters compared to budget 47 NEVAEH Healthcare Revenue Management

48.  Financial Ratios and Other Performance Indicators  Current Ratio  Debt Management Ratio  Working Capital  Ratio of provider to other staff, current month and year to date  BPHC Performance Indicators/UDS site specific and state rollup  Coding levels for new and established patient office visits, by provider and aggregate for the center, compared to national norms  Charges by provider  Net revenue by provider  Claims denials by provider  Ratio of collections to salary dollars by provider  Cost and average revenue per encounter, aggregate and by clinic location/department  Cost per RVU, current month and year to date 48 NEVAEH Healthcare Revenue Management

50.  Background on the federal law governing nonprofit audits  The government passed the Single Audit Act of 1984 to ensure that those organizations receiving substantial federal funds use the funds in compliance with the federal government’s funding requirements. The Act refers to a “single audit” because one of the objectives of the law is to replace the need for the federal government to audit the same non-governmental organization multiple times. The stated purpose of the law is to promote sound financial management of government funds by non-federal organizations, promote uniform guidelines for audits, and reduce burdens on government and nonprofits by promoting “efficient and effective use of audit resources.” The OMB explains it this way: "A single audit is intended to provide a cost-effective audit for non-Federal entities in that one audit is conducted in lieu of multiple audits of individual programs." (Source: White House Office of Management and Budget) NEVAEH Healthcare Revenue Management 50

51.  Subpart F, Audit Requirements, applies to audits of non- Federal entity fiscal years beginning on or after December 26, 2014 (the first fiscal year that begins after December 26, 2014). For a calendar year end entity, these requirement become effective for December 31, 2015 year end audits. A full comparison of audit requirements under OMB Circular A-133 and Uniform Guidance Subpart F can be found here: Audit Requirements Comparison Chart (Source: COFAR). - See more at: https://www.councilofnonprofits.org/nonprofit-audit- guide/federal-law-audit- requirements#sthash.2D2kIZtI.dpuf NEVAEH Healthcare Revenue Management 51

52.  The requirement for a nonprofit to conduct a Single Audit is triggered when a nonprofit receives federal funds from either one or several government funding sources (whether in the form of a government contract or a grant) AND when that nonprofit expends $750,000 or more in federal funding in a single year. Federal funding means either money that originated directly from the federal government, or funds that came to the nonprofit from a “pass-through entity,” such as a state or local government agency. This is called a sub-recipient relationship. In determining the total amount of federal funds expended, funds directly from federal agencies, as well as those federal funds received from pass-through entities, such as state government or other non-federal recipients, are included. NEVAEH Healthcare Revenue Management 52

53.  How is a single audit different from a regular independent audit? What is its scope?  A single audit covers the entire scope of the organization’s financial operations, ensuring that:  The financial statements are presented fairly;  The organization has an adequate internal control structure, and that;  The organization is in compliance with any special government regulations/laws that apply to the specific type of federal funding the audit covers. NEVAEH Healthcare Revenue Management 53

54. A Single Audit is significantly more detailed than a regular independent audit.  Compliance with the Single Audit Act requires nonprofit organizations and their auditors to conduct an audit in accordance with the new Uniform Guidance.  Auditors performing Single Audits are required to receive a heightened level of certification in order to perform such audits.  There are specific and higher levels of testing that must be done on expenses to ensure that the federal funds have been used properly, as well as documented and reported correctly in the nonprofit's financial statements.  Additionally, auditors are required to verify compliance with regulations specific to the program or grant for which funds were expended. NEVAEH Healthcare Revenue Management 54

55.  In order to be certain all federal funds are accounted for in determining whether you meet the threshold for a single audit, your auditor should obtain documentation from pass-through entities sufficient to determine whether any of the funds you received as payment for services were federal, and if so how much.  The single audit must be completed and submitted in machine-readable format to the Federal Audit Clearinghouse either 30 days after receiving the auditor’s report, or nine months after the end of the nonprofit’s fiscal year, whichever comes earlier.  The single audit also must be submitted to any pass- through entity, if applicable, and  Copies of the audit report must be made available to the public. NEVAEH Healthcare Revenue Management 55

56.  CFR Section 200.514(b) requires that a Single Audit must include a determination of whether the financial statements of the auditee are presented in accordance with generally accepted accounting principles. The costs of auditing the financial statements are allowable in-direct costs for non-federal entities subject to the requirements of the Single Audit Act. NEVAEH Healthcare Revenue Management 56

57.  CEO/CFO team oversight  Finance Committee  Multiple Signatures/Authorizers  Authority Thresholds/Levels  Policies and Procedures  Audit  Fraud and Employee Theft Protection  Internal audits on regular basis  Other suggestions 57 NEVAEH Healthcare Revenue Management

58.  Medicare (MC) Credit Balance Report  Progress Reports  Grant Quarterly Reporting  Foundation Reporting  Annual Reports 58 NEVAEH Healthcare Revenue Management

60. Adrienne Hurtt Email: adriennehurtt@msn.comadriennehurtt@msn.com NEVAEH Healthcare Revenue Management 60