Report Summary

Title: Audit of VHA's Consolidated Patient Account Center Controls To Prevent Improper Billings for Service-Connected Conditions
Report Number: 16-00589-264 Download
Issue Date: 8/9/2017
City/State: Asheville, NC
Orlando, FL
Lebanon, PA
Leavenworth, KS
Madison, WI
Nashville, TN
VA Office: Veterans Health Administration (VHA)
Office of Information and Technology (OIT)
Report Author: Office of Audits and Evaluations
Report Type:
Release Type: Unrestricted

In March 2015, OIG received an allegation that Veterans Health Administration Consolidated Patient Account Centers (CPAC) inappropriately billed veterans and third-party payers for treatment of service-connected (SC) conditions and used an automated system designed to bill by default. We determined whether CPAC controls ensured veterans and third-party payers were not billed for treatment of SC conditions. We substantiated the allegation that CPACs improperly billed veterans and third-party payers and used an automated system that billed by default. Of about 15.4 million bills VHA issued during FY 2015, we estimated approximately 1.7 million (11 percent) were improper bills for treatment of SC conditions. Of the 1.7 million bills, approximately 623,000 were sent to veterans and approximately 1.0 million were sent to third-party payers. This occurred because CPACs did not provide billing staff access to Veterans Benefits Management System, establish procedures to review prescriptions, conduct comprehensive quality assurance reviews of SC determinations, and provide consistent training to VA medical facility staff. We estimated that VHA improperly issued bills totaling about $15 million to veterans and approximately $295.6 million to third-party payers for treatment of SC conditions. We also estimated VHA inappropriately collected approximately $13.9 million from veterans and at least $13 million from third party payers for the improper bills. We recommended the Under Secretary for Health statistically sample bills of SC veterans and assess other means to identify and refund erroneous bills. We also recommended the Under Secretary ensure CPAC billing staff receive read only access to VBMS, review prescriptions for service connection, revise quality assurance reviews, and monitor changes and provide training for medical providers. The Under Secretary for Health concurred, or concurred in principle, with our recommendations and provided action plans. We considered the plans acceptable and will follow up on their implementation.