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Two VA contractors received $100 million in overpayments, audit finds

VA Medical Center (Veterans Health/Flickr)
September 07, 2018

Two major healthcare contractors who serve the federal government’s Veterans Choice Program received more than $100 million in overpayments during 2016-2017 due to double billing and other mistakes.

This information was discovered during an audit by the VA Office of Inspector General and released on Thursday. The report on the audit said: “Because of ineffective controls, OCC (the VA Office of Community Care) failed to identify improper claims,” AZ Central reported.

TriWest Healthcare Alliance Corp, out of Phoenix and Health Net Federal Services of California, received $66.1 million in over payments by means of duplicate bills and $35.3 million in miscellaneous errors.

In November, the Office of Inspector General found the two contractors had received at least an additional $89 million in overpayments.

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Congress authorized $10 billion to pay for private medical appointments for veterans who were unable to get appropriate treatment through the VA.

This followed the launch of the Veterans Choice Program in 2015 as an answer to the VA health care catastrophe that plagued many VA Medical Centers but was first learned about at the Phoenix VA Medical Center.

Across the country, tens of thousands of patients died, and many others suffered from a faulty system that delivered incorrect data and resulted in an accumulation of non-processed appointments.

TriWest and Health Net were contracted and responsible for setting up provider networks, booking appointments and processing payments.

TriWest President and CEO David McIntyre said overpayments were a product of past “mechanical errors on both sides,” but the system has been markedly improved over the past 18 months.

The problem originated in 2015, when VA moved to a “bulk payment” system for TriWest and Health Net, after owing them hundreds of millions of dollars that they were unable to pay.

The problem with the bulk payment system is there is very little assessing of the billing process and during the audit, inspectors found that mass bills were “improperly submitted.”

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Out of 4.8 million medical charges that were inspected, more than five percent were duplicates submitted by Health Net. Another 10 percent had other errors and were submitted by TriWest.

The audit report stated that Health Net has repaid $41 million of those errors and is working out a plan to reimburse the estimated remaining $50 million.

McIntyre defended TriWest by stating that in many cases the problem wasn’t overpayment or error but the fault of VA who didn’t identify TriWest discounts.

He added that TriWest has spent $10 million trying to resolve audit issues with the inspector general and Department of Justice.

The VA currently employs about 350,000 and serves around 9,000,000 veterans, with an estimated annual cost of close to $200 billion.

The VA system is in a state of chaos with the move by the Trump Administration to overhaul private-care options. In the interim, President Trump signed the VA Mission Act, which includes consolidating and creating a more streamlined and clear procedure for Veterans Choice and other community-care programs.

Health Net’s contract with VA expires this month, and TriWest is in the process of finalizing a two-year extension of its contract.