A recent audit by the U.S. Department of Health and Human Services’ Office of Inspector General (OIG) has revealed that one-third of a sample of nursing homes may have misused or failed to properly account for federal Provider Relief Fund (PRF) payments received during the COVID-19 pandemic.
The audit, titled “Ten of Thirty Selected Nursing Facilities Did Not Comply or May Not Have Complied With Terms and Conditions and Federal Requirements for Expending Provider Relief Fund Payments,” reviewed 30 nursing facilities that received over $370 million combined in PRF funds. Of those, 10 facilities were found to have potentially misspent or mismanaged $2.6 million—about 0.7% of the total.
The PRF, established by Congress through a $178 billion appropriation to HHS, was intended to help healthcare providers respond to COVID-19 by covering healthcare-related expenses and lost revenues. Specific restrictions barred use of funds for previously reimbursed expenses, excessive executive salaries, or unrelated costs.
The audit found a range of issues:
- Duplicated healthcare expenses ($29,328 across 3 facilities)
- Legal expenses for civil/administrative proceedings ($386,743)
- Expenses reimbursed by other grants ($289,657)
- Excess executive salary payments ($91,076)
- Overpayments ($37,592)
- Landscaping costs ($15,000)
- Clerical and accounting errors ($713,706)
While some discrepancies may stem from reporting confusion or unclear federal guidance, the report underscores the importance of transparency and accountability—particularly in facilities entrusted with the care of vulnerable residents.
Nursing home abuse and neglect attorney Donna MacKenzie of Olsman MacKenzie Peacock commented on the findings, stating “The fact that some nursing homes misused pandemic relief funds—or failed to track them properly—raises serious concerns about their priorities. These funds were meant to protect residents and improve care during a national crisis, not pad legal budgets or executive salaries. Residents and families deserve better.”
The OIG has recommended that the Health Resources and Services Administration (HRSA) require repayment of the disallowed funds or allow the facilities to retroactively correct their records with eligible expenses. HRSA agreed with the recommendations.
This audit is part of a broader effort to review PRF distributions across different healthcare sectors. While the majority of nursing homes in this sample followed the rules, the report highlights how even limited misuse can erode trust in an already scrutinized industry.
If you or a loved one suffered harm in a nursing home, contact us today. Our team at Olsman MacKenzie Peacock is committed to holding facilities accountable and protecting residents’ rights.