HRSA Audits

We Assist Grant Recipients with Conducting HRSA Audits and Responding to Adverse Findings

**Attorney Nick Oberheiden**
HRSA Audits Team Lead

**Wade McFaul**
Medicare Audit & Appeals Consultant
Former HHS-OIG Assistant Special Agent-in-Charge

The U.S. Health Resources & Services Administration (HRSA) awards grants to qualifying healthcare providers and other commercial organizations. As a condition of accepting grant money from the HRSA, providers and other organizations must comply with its audit processes and procedures.

Understanding Organizations’ Obligations (and Risks) Related to HRSA Audits

Under these processes and procedures, most grant recipients that expend more than $750,000 must submit a Single Audit report to the HRSA annually. Smaller grant recipients are exempt from the Single Audit requirement, but must have records available for audit upon request. “Commercial organizations,” including for-profit institutions, organizations, partnerships, and limited liability companies that receive HRSA grants have the option of submitting a Single Audit report or a financial audit report that complies with the Government Auditing Standards.

Regardless of a provider’s or other organization’s specific obligations, conducting an HRSA audit and preserving all pertinent documentation requires careful planning and an in-depth understanding of the HRSA audit requirements. As a result, avoiding miscues—and mitigating the risk of HRSA scrutiny—requires experienced legal representation. We have extensive experience advising healthcare providers and other organizations in all areas of federal healthcare compliance, and we routinely represent clients in HRSA audits and other federal healthcare audits as well.

Our HRSA Audit Services

Compliance with the HRSA’s audit requirements is essential for grant recipients. If recipients do not timely submit their audit reports to the HRSA, they can face penalties including drawdown restrictions, withholding of a percentage of their federal funds, suspension of federal funds, reimbursement obligations, and even termination of their federal grants.

Even when providers and other organizations timely submit their audit reports as required, they can still face scrutiny from the HRSA. Reviews of grant recipients’ Single Audit and financial audit reports are common, and many recipients find themselves dealing with the HRSA’s audit resolution process.

We assist healthcare providers and other organizations with submitting compliant audit reports and protecting themselves during the audit resolution process. Our HRSA audit services include:

Advice for Healthcare Providers and Other Organizations During HRSA Audits

Under federal regulations, grant recipients are subject to several specific requirements when conducting audits and submitting their audit reports to the HRSA. While grant recipients will typically work with outside auditors during the process, it is also essential for providers and other organizations to work with a law firm that represents clients in the areas of federal healthcare compliance and audit defense.

With our lawyers’ in-depth knowledge of the HRSA’s audit requirements, we help to streamline the audit process while also minimizing our clients’ risk of having to deal with the HRSA’s audit resolution process. We do this by:

Assisting with the identification of all documents and files that are subject to review;
Advising healthcare providers, other organizations, and their auditors regarding the HRSA’s specific audit requirements and expectations;
Preparing corrective action plans (CAPs) to include with grant recipients’ audit reports when necessary;
Preparing new and strengthened policies and procedures to submit to the HRSA with grant recipients’ audit reports when necessary; and,
Reviewing our clients’ audit reports before submission to the HRSA to ensure compliance and identify (and proactively address) any areas of potential concern.

Too often, we see situations where healthcare providers and other organizations do not give due consideration to the HRSA’s audit requirements. They assume that submitting a Single Audit report or financial audit report is a formality, and they do not take the risk of facing scrutiny from the HRSA seriously. But, the risk of facing scrutiny is a very real concern—and, as the HRSA and other federal agencies continue their efforts to crack down on healthcare fraud, it is a concern that is unlikely to abate any time soon.

Representation During the HRSA Audit Resolution Process

If the HRSA identifies areas of concern with a grant recipient’s Single Audit or financial audit report, it will conduct a grant review utilizing its audit resolution process. The audit resolution process presents substantial risks for healthcare providers and other organizations, as findings of overbilling, double-billing, and other forms of fraud can lead to substantial penalties.

Once the HRSA initiates a grant review, the recipient under review should engage counsel promptly. When we are engaged in this role, we provide services including:

Conducting an Attorney-Client Privileged Risk Assessment – When facing scrutiny from the HRSA, it is crucial to know what (if anything) its inspectors are going to find. By conducting an attorney-client privileged risk assessment, we can proactively identify any areas of concern and prepare to deal with them effectively.
Determining What Remedial Measures (if Any) Are Necessary – As noted above, when guiding clients through the HRSA audit process, we will often assist them with proactively preparing CAPS and updated policies and procedures. If these steps are not taken proactively, taking them during the audit resolution process may be necessary.
Communicating with the HRSA on Our Client’s Behalf – We communicate with the HRSA on behalf of our clients throughout the audit resolution process. Once we have a clear understanding of the circumstances at hand, we can build and execute an audit defense strategy focused on protecting your grant (and your business) to the fullest extent possible.
Addressing Issues As They Arise During the Audit Resolution Process – Various issues can arise during the audit resolution process. These range from the HRSA’s misinterpretation of grant recipients’ financial data to errors made by recipients’ outside auditors. Our lawyers can address these issues as they arise to ensure that they do not lead to unnecessary consequences.
Steering the Audit Resolution Process Toward a Favorable Outcome – Ultimately, our role as audit defense counsel is to steer the HRSA’s audit resolution process toward a favorable outcome. Whether this involves avoiding penalties entirely or mitigating the consequences of past mistakes will depend on the circumstances involved. In any case, an informed and strategic approach is critical when facing an HRSA grant review, and this starts with engaging experienced outside counsel.

Not only can HRSA audit reviews lead to grant-related penalties, but they can also lead to audits and investigations conducted by other federal authorities in some cases. The U.S. Department of Health and Human Services’ Office of Inspector General (DHHS OIG) and other federal authorities share responsibility for uncovering and prosecuting healthcare-related fraud; and, while inadvertent billing errors can lead to civil monetary penalties (CMP), allegations of intentionally defrauding the federal government can lead to criminal prosecution.

Dr. Nick Oberheiden

Founder

Attorney-at-Law

Lynette S. Byrd

Former DOJ Trial Attorney

Partner

Brian J. Kuester

Former U.S. Attorney

Hon. Kevin McCarthy

55th Speaker, U.S. House of Representatives (ret.)

Government Consultant

Mike Pompeo

Of Counsel

Former U.S. Secretary of State

John W. Sellers

Former Senior DOJ Trial Attorney

Linda Julin McNamara

Federal Appeals Attorney

Nicholas B. Johnson

Former Prosecutor

Roger Bach

Former Special Agent (DOJ)

Chris J. Quick

Former Special Agent (FBI & IRS-CI)

Michael S. Koslow

Former Supervisory Special Agent (DOD-OIG)

Ray Yuen

Former Supervisory Special Agent (FBI)

FAQs: What Grant Recipients Need to Know About HRSA Audits

Does the HRSA Review Grant Recipients’ Single Audit Reports?

Yes, the HRSA regularly reviews grant recipients’ Single Audit reports. The HRSA has a formal audit resolution process that it utilizes to assess grant recipients’ compliance with their federal billing, reporting, and recordkeeping requirements. Thus, not only must grant recipients ensure that they timely submit accurate Single Audit reports annually, but they must also ensure that their reports (and all supporting documentation) meet all applicable legal and regulatory requirements.

What Should I Do if the HRSA is Reviewing Our Grant Audit Report?

If the HRSA is reviewing your practice’s or organization’s grant audit report, you should engage outside counsel promptly. HRSA audit reviews present substantial risks (up to and including grant termination); and, if the HRSA’s inspectors uncover apparent evidence of intentional billing fraud, they can refer grant recipients to the DHHS OIG and/or other federal law enforcement agencies for further scrutiny. Depending on the allegations at issue, this has the potential to lead to charges for healthcare fraud and other federal crimes.

What Is the HRSA Looking for During Its Audit Resolution Process?

During the audit resolution process, the HRSA is looking for any evidence that a grant recipient has improperly billed the federal government or otherwise failed to comply with the terms of its grant. Broadly, the HRSA examines compliance in three main areas: (i) management findings (i.e., deficiencies in internal controls or material non-compliance with applicable federal laws or regulations); (ii) monetary findings (i.e., questioned costs cited in the audit report); and, (iii) repeat findings (i.e., failure to adequately address issues identified in a previous audit report).

What Happens After an HRSA Audit Review?

What happens after an HRSA audit review depends on what the HRSA’s inspectors uncover during the process. While it is possible to successfully resolve an HRSA audit review without consequences in some cases, providers and other organizations can also face grant-related penalties as well as additional scrutiny from other federal authorities.

Do I Need to Engage Outside Counsel for HRSA Audit Resolution?

Due to the complexity of the issues involved and the risks at hand, grant recipients should engage outside counsel promptly upon learning that the HRSA is reviewing one of their audit reports. At Oberheiden P.C., we represent healthcare providers and other organizations in HRSA audits nationwide, and we can get to work on your organization’s HRSA audit review immediately if necessary.

Discuss Your HRSA Audit with a Lawyer at Oberheiden P.C.

If you would like more information about our firm’s HRSA audit practice, we invite you to get in touch. Please call 888-680-1745 or contact us online to schedule a complimentary consultation today.