Report Summary

The VA Office of Inspector General (OIG) audited the Veterans Health Administration’s (VHA’s) Office of Community Care (OCC) to determine the accuracy of bulk payments made to third party administrators (TPAs) under contracts that include care provided through the Veterans Choice Program. The OIG found about $66.1 million in duplicate payments and $35.3 million in three other payment error types, for a total of $101.4 million in estimated overpayments to the TPAs from March 4, 2016, to March 31, 2017.

The Veterans Choice Program allows veterans to obtain care within their community and is administered under contracts with two TPAs, Health Net Federal Services and TriWest Healthcare Alliance Corporation. The TPAs perform a variety of administrative services, including paying claims from healthcare providers.

In 2016, the OCC implemented a method to process health care claim payments to TPAs on an aggregated basis, referred to as bulk payments. This process did not have effective internal controls in place to detect improper claims. Because of ineffective internal controls, the OCC failed to identify improper claims being submitted by the TPAs.

The OIG recommended that VHA continue to support processes to prevent duplicate payments and ensure that controls are in place to prevent duplicate payments to TPAs through all current and future payment methodologies for community care. The OIG further recommended that OCC and VA’s Office of General Counsel continue to work collaboratively with all relevant government authorities to determine a process for reimbursement of overpayments by TPAs.

This is the second OIG report on OCC’s process for paying claims under the Veterans Choice Program. The prior audit report, Audit of the Timeliness and Accuracy of Choice Payments Processed Through the Fee Basis Claims System (Report No. 15-03036-47, December 21, 2017), addressed claims processed through the Fee Basis Claims System.