The OIG examined whether the Veterans Health Administration (VHA) provided effective oversight of its two third-party administrators (TPAs), Optum and TriWest, to make sure VHA made accurate and timely community care payments for outpatient healthcare and dental services. The OIG estimated that VHA accurately paid Optum for outpatient healthcare services 98.6 percent of the time, totaling $5.1 billion for 33.1 million transactions, and accurately paid TriWest 99.8 percent of the time, totaling $4.4 billion for 25 million transactions. Review periods varied, and although error rates were small, the combined estimated errors resulted in overpayments of about $178.5 million because VHA did not charge the correct Medicare rate or applicable VA fee rate, sometimes because these rates were not available. VHA has made some overpayment recoveries, but others still need to be completed.
Community providers, VHA, and the TPAs generally met contract requirements for payment timeliness. Review periods varied. For Optum, the on-time rates were the following: providers submitting claims to the TPA, 99.8 percent; the TPA paying the provider, 97.8 percent; and VHA reimbursing the TPA, 92.5 percent. For TriWest, these on-time rates were, respectively, 99.9 percent, 98.2 percent, and 97.4 percent.
The OIG estimated that VHA paid over $900 million more to both TPAs combined than the TPAs paid community providers for dental services. This occurred because the contracts for four of the five community care regions did not limit VHA’s reimbursement payments to TPAs to the amount the providers invoiced to the TPAs.
VHA officials concurred with six of the OIG’s seven recommendations; they concurred in principle with recommendation 3.
Open Recommendations
Recommendation Number | Significant Recommendation | Recommended Questioned Costs | Recommended Funds for Better Use | Additional Details | |
---|---|---|---|---|---|
01 | No | $0 | $0 | ||
The OIG recommended the under secretary for health make sure the Office of Integrated Veteran Care develops contract language and/or maximum allowable rates to limit reimbursements that do not have a Medicare or VA fee schedule rate for Community Care Network claims. | |||||
02 | No | $0 | $0 | ||
The OIG recommended the under secretary for health ensure the Office of Integrated Veteran Care improves oversight of healthcare claim payments to prevent, identify, and recover overpayments in a more timely manner. | |||||
03 | No | $0 | $0 | ||
The OIG recommended the under secretary for health, in conjunction with the chief acquisition officer and principal executive director for the Office of Acquisition, Logistics, and Construction, ensure the Office of Integrated Veteran Care and the Office of Acquisition, Logistics, and Construction, collaborate to extend the contracting officers representatives designated responsibilities to include monitoring of healthcare invoices. | |||||
04 | No | $0 | $0 | ||
The OIG recommended the under secretary for health make sure the Office of Integrated Veteran Care considers including dental contract reimbursement language in the current and/or future contracts that is consistent with other contract healthcare reimbursement methodology to limit dental contract reimbursements, not to exceed the amount the third-party administrators pay the providers. | |||||
05 | No | $0 | $0 | ||
The OIG recommended the chief acquisition officer and principal executive director for the Office of Acquisition, Logistics, and Construction make certain the Office of Procurement, Acquisition, and Logistics develops sufficient oversight and internal controls over the contract modification process to prevent program overpayments. | |||||
06 | Yes | $0 | $0 | ||
The OIG recommended the under secretary for health, in conjunction with the chief acquisition officer and principal executive director for the Office of Acquisition, Logistics, and Construction, require the Office of Veteran Integrated Care and the Office of Acquisition, Logistics, and Construction to collaborate to explore potential recovery of dental payments to Optum. | |||||
07 | No | $0 | $0 | ||
The OIG recommended the under secretary for health, in conjunction with the chief acquisition officer and principal executive director for the Office of Acquisition, Logistics, and |