Review of Healthcare Services Contracts at VA Pittsburgh Healthcare System in Pittsburgh, Pennsylvania

The OIG reviewed three separate physician contracts awarded by VA Pittsburgh Health Care System (VAPHS) to University of Pittsburgh Physicians, Inc. (UPP). The OIG found that VAPHS did not have an adequate system or process to monitor contract performance and cannot be sure that VAPHS received all the hours invoiced by UPP. Because of the inadequate review of invoices, we found that VA was being billed twice the hours and FTE level than the contract requirements for one of the contracts. We also found that VA was reimbursing UPP 100 percent of the call-back hours for a dual appointed physician even though his call-back hours should have been pro-rated based on his dual employment status. We also found that VAPHS awarded administrative and overhead expenses on all three contracts without appropriate supporting documentation as required in VA Directive 1663. We recommended that VAPHS implement a process to adequately administer the performance for all its physician contracts, consult with Regional Counsel concerning the billed call-back hours for the dual appointed physician, and ensure future sole-source physician contracts that contain administrative and overhead costs are compliant with VA Directive 1663. Management concurred with our findings and recommendations.