Health Law Daily Wrap Up, AUDITS AND MONITORING—OIG REPORTS: HHS conducts audit of Indian Health Service and Rural Providers, (Mar 5, 2026)

By David Yucht, J.D.

According to HHS Office of Inspector General (OIG), 14 of 30 selected Indian Health Service and rural providers did not comply or may not have complied with terms and conditions and federal requirements for expending provider relief fund payments,

The HHS Office of Inspector General (OIG), released a report regarding its audit of expenditures of 30 selected Indian Health Service and rural providers during the period from April 10, 2020, through June 30, 2021. The OIG found that 14 of the 30 selected providers did not comply or may not have complied with terms and conditions and federal requirements for expending provider relief fund payments (OIG Report, A-09-23-01001 (Feb. 23, 2026)).

Purpose of review. Congress appropriated $178 billion to help eligible providers with health care-related expenses or lost revenues caused by the COVID-19 pandemic. Providers receiving Provider Relief Fund (PRF) payments were to ensure that the payments were: (1) used to prevent, prepare for, or respond to COVID-19; (2) used for health care-related expenses or lost revenues attributable to COVID-19; (3) not used to cover expenses or losses reimbursed by other funding sources; and (4) not used to pay salaries in excess of a certain threshold or to pay for certain prohibited activities. The OIG audited 30 selected Indian Health Service (IHS) and rural providers to see if they expended taxpayer funds in accordance with program requirements.

Scope of audit. According to the OIG, this audit covered nearly $1.56 billion in PRF payments to a nonstatistical sample of 30 IHS and rural provider taxpayer identification numbers during the period from April 10, 2020, through June 30, 2021 that reported lost revenues and expenditures. The selected providers reported that they used $1 billion of their PRF payments to offset lost revenues, $376.2 million for general and administrative expenses, and the remaining $142.7 million for health care-related expenses. The providers were selected based on an analysis that considered the amount of PRF payments received, geographic location, and organizational structure. OIG reviewed the providers’ PRF payments used to offset lost patient care revenues or cover general and administrative and health care-related expenses.

OIG findings. Based upon its audit, OIG found that of the 30 selected providers, 14 providers claimed a total of $70.6 million in unallowable PRF expenditures, and 2 of those providers also inaccurately calculated or could not support $19.7 million of lost revenues. These 14 providers received a total of $570.8 million in PRF payments. The remaining 16 providers used PRF payments for allowable expenditures and lost revenues. According to the OIG, these deficiencies occurred because although providers attested to the PRF terms and conditions and the Health Resources and Services Administration (HRSA) provided continuously updated guidance, some providers made clerical errors in their reporting of expenditures and did not always correctly interpret HRSA guidance or maintain documentation to support reported expenditures.

OIG recommendations. The OIG recommended that HRSA require the 12 providers that were determined to have used PRF payments for unallowable expenditures totaling over $70,500,000 to return the unallowable amounts or ensure that the providers properly replace the unallowable expenditures with allowable unreimbursed lost revenues or eligible expenses, if any. Additionally, HRSA should require the two providers that were determined to have inaccurately calculated and reported lost revenues totaling nearly $20,000,000 to identify and return any PRF payments inappropriately used to offset lost revenues or replace the amounts with allowable unreimbursed lost revenues or eligible expenses. Moreover, OIG recommended that HRSA work with the two providers that were identified as having used PRF payments totaling $382,656 for expenditures that may have been unallowable to determine which amounts should have been allocated and require the providers to return unallowable amounts or ensure that the providers properly replace these unallowable expenditures with unreimbursed lost revenues or eligible expenses, if any.

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