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HRSA Starting Audits for COVID-19 Testing

More of the long-promised enforcement actions related to COVID-19 pandemic relief and healthcare programs have started to unfold. This time it is demands from the Health Resources and Services Administration (“HRSA”) that providers repay funds they have received for providing COVID-19 testing to the uninsured during the pandemic.

As part of the response to the COVID-19 pandemic, Congress provided funding for testing of patients without health insurance. The funding of testing for the uninsured was overseen by HRSA under the COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured Program. HRSA contracted with Optum to administer the program directly. Generally referred to as “HRSA funding” for testing of the uninsured, this system functioned as a claims reimbursement program wherein eligible healthcare providers submitted claims to HRSA/Optum for reimbursement, made certain attestations, and Optum reimbursed providers’ claims.

Recently, healthcare providers who billed and received reimbursements under this program have begun to receive “assessment” letters from HRSA. HRSA has generally insisted that these are not “audits,” but “assessments.” These letters generally indicate that HRSA made payments to the provider in error and demand that the provider make immediate repayment. The letters generally do not provide denial reasons or explain the nature of the “error,” and do not contain allegations of fraud. They simply demand repayment. The letters also generally do not provide for an appeal process. Where a provider receives a letter, HRSA generally also suspends payment to the provider, pending the completion of an assessment.

The reason for the letters is not clear. Some have speculated that, because HRSA has not alleged any deficiency on the part of the provider, that Optum processed claims or payments incorrectly. The reluctance on the part of the HRSA to call these “audits” may also signify technical issues in the claims processing system. Another possibility stems from the primary attestation that providers were required to make when billing the program. To receive this reimbursement for COVID-19 testing, providers had to attest that the patient was uninsured. HRSA’s guidance to providers on what steps they must use to determine insurance status has not been clear and some providers may have inadvertently and in good faith billed HRSA for testing of patients who in fact had insurance. HRSA may have begun to use an insurance verification tool to check coverage status and to demand repayment where it finds that providers have billed its uninsured program for testing of individuals who have insurance.

Whatever the reasons for these new audits, providers have strongly pushed back against HRSA’s failure to explain why it is demanding repayment and its failure to provide an appeal process. Further, these likely signal further scrutiny of payments made by the COVID-19 uninsured programs by HRSA and other federal agencies.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding the healthcare regulatory landscape. If you or your healthcare entity has any questions pertaining to COVID-19 testing or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or


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