“Hundreds of millions” of mismanaged federal Provider Relief Fund dollars should be recouped and distributed to assisted living providers, Argentum said Wednesday.
The Department of Health and Human Services did not “establish procedures to verify reported losses,” potentially leading to fraudulent payments to other providers, Argentum said, pointing to the results of a congressionally mandated audit of the PRF by HHS Office of the Inspector General.
For Phase 1 payments, for which assisted living providers were not eligible, HHS did not require supporting documentation to verify financial losses when applying for relief, Argentum Vice President of Government Relations Paul Williams said.
“This opened the door to fraud and overpayments,” he told McKnight’s Senior Living.
The OIG also found that HHS did not subtract automatic payments made to multiple providers’ subsidiaries from provider calculations, resulting in $46.5 million in overpayments. And another $50 million has not been repaid by 118 providers who rejected their relief payments because HHS did not ask for it back, the oversight office said.
“Such lack of accountability and potential for fraud and abuse could have resulted in hundreds of millions of dollars in inappropriately allocated funds,” Argentum Senior Vice President of Public Policy Maggie Elehwany said in a news release. “To learn this at a time when assisted living frontline caregivers continue to face steep financial struggles because of the inequitable PRF funds received is beyond frustrating.”
Despite caring for approximately the same number of older adults as skilled nursing facilities, assisted living providers received about one-twelfth of the financial relief from the PRF compared to skilled nursing providers, Argentum argued. The association previously estimated that assisted living providers incurred more than $30 million in pandemic losses and expenses but received just $627 million in PRF dollars.
Although assisted living providers were eligible for Phase 2 funds, HHS only distributed $5.1 billion of the $18 billion available, according to the OIG report.
“The application was onerous and only covered losses for a narrow period of time, resulting in assisted living providers being unable to access the full $18 billion of relief in Phase 2,” Williams said. “Providers closed their doors because they needed that withheld relief in the middle of the pandemic.”
The findings in the OIG report, Argentum said, are “potentially just the tip of the iceberg” since the report only examined one-fourth of distributions and focused on payments made between April and December 2020. The association called such audits “critical tools” to ensure accountability and secure relief “owed to frontline caregivers in senior living communities.”
Future reports are likely to uncover “additional mismanagement and associated inequities,” Williams said.
“The mismanaged funds identified in this report must be recouped and equitably distributed to assisted living frontline caregivers,” Elehwany said.