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Lack of Adequate Controls for Choice Payments Processed through the Plexis Claims Manager System

Report Information

Issue Date
Report Number
19-00226-245
VA Office
Veterans Health Administration (VHA)
Report Author
Office of Audits and Evaluations
Report Type
Audit
Report Topic
Community Care
Major Management Challenges
Stewardship of Taxpayer Dollars
Recommendations
8
Questioned Costs
$0
Better Use of Funds
$0
Congressionally Mandated
No

Summary

Summary
The OIG examined whether the VA Office of Community Care accurately reimbursed third-party administrators under the Veterans Choice Program for payments made to community healthcare providers for services to veterans during the audit period. This is the third OIG report on healthcare claims payments under the Choice program. It focuses on claims processed through the Plexis Claims Manager system that were paid from February 21, 2017, through December 31, 2018. The audit team found that the Office of Community Care reimbursed third-party administrators at rates higher than what was typical for the same or similar medical services in a given geographic area. The office could have saved approximately $132.1 million during the period audited if it reimbursed third-party administrators at verifiable usual and customary rates, as required by the governing contract. Additionally, the Office of Community Care did not fully implement prior OIG recommendations to develop effective payment and internal control processes for the Choice program. As a result, the office made about $73 million in overpayments to Choice third-party administrators for medical services provided under the program. These errors were made because the appropriate payment rate was not used. The OIG will continue to monitor all recommendations. The OIG made eight recommendations to the Office of Community Care in this report to prevent and address payment errors under current and future contracts (as the Choice program has ended and other community care programs continue).

Open Recommendation Image, SquareOpenClosed and Implemented Recommendation Image, CheckmarkClosed-ImplementedNot Implemented Recommendation Image, X character'Closed-Not Implemented
No. 1
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the VA deputy under secretary for health for the Office of Community Care Define the terms “verifiable usual and customary charges that are billed to payers other than VA” for the PC3/Choice contract claims.
No. 2
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the VA deputy under secretary for health for the Office of Community Care ensure future community care programs have applicable definitions and guidance for claims without a Medicare or VA fee schedule rate to avoid reimbursements that pay at “billed charges.”
No. 3
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the VA deputy under secretary for health for the Office of Community Care create a master usual and customary rate schedule to be used for reimbursement of community care claims without a Medicare or VA fee schedule rate to control program costs.
No. 4
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the VA deputy under secretary for health for the Office of Community Care provide parties responsible for reimbursing PC3/Choice and future community care program claims with usual and customary rate price schedules and a formal written policy on the proper application of those rates.
No. 5
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the VA deputy under secretary for health for the Office of Community Care establish controls for verifiable usual and customary rate payment methodology and establish a payment review process to ensure usual and customary rates are properly applied to the PC3/Choice and future community care program payments.
No. 6
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the VA deputy under secretary for health for the Office of Community Care ensure payment-rate schedules used by the Plexis Claims Manager and future payment systems to support the PC3/Choice and future community care contracts are current, accurate, and complete to prevent overpayments.
No. 7
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the VA deputy under secretary for health for the Office of Community Care ensure that the Office of Community Care determines an appropriate reimbursement process for the identified pass-through errors in this report.
No. 8
Closed and Implemented Recommendation Image, Checkmark
to Veterans Health Administration (VHA)
The OIG recommended the VA deputy under secretary for health for the Office of Community Care ensure the Office of Community Care establishes formal policies and procedures to identify and recover overpayments from PC3/Choice third-party administrators for improperly billed claims.
Total Monetary Impact of All Recommendations
Open: $ 0.00
Closed: $ 205,100,000.00