The Department of Veterans Affairs Office of Inspector General (OIG) released an audit on Thursday, Sept. 6 revealing over $101 million in overpayments during a one-year period to two contracted third party administrators under the Veterans Choice Program: Health Net Federal Services and TriWest Healthcare Alliance Corporation.
An executive summary issued by the VA OIG attributed the failure to recognize erroneous claims submitted by the contractors to “the ineffective internal controls” associated with the bulk payments process.
It was discovered that the two VA contractors submitted over 250,000 duplicate payments on approximately 4.8 million claims. Over five percent of the claims were duplicate payments made from the Office of Community Care (OCC) from March 2016 to March 2017.
From the OIG 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 OIG estimated errors in ten percent of payments submitted by the contractors, including payment rate, other health insurance and pass-through. These oversights amounted to $66 million in duplicate payments and $35 million in other payment errors for a grand total of $101 million in overpayments.
Just last year, in September of 2017, the OIG reported in a letter to the Secretary of Veteran Affairs that Health Net and TriWest collected approximately $89 million in duplicate payments. The administrators acknowledged the processing errors as overpayments and are obligated to return them to the VA, according to the letter.
The letter read, in part:
“Our Audit staff has attributed these errors to the lack of an appropriate payment process for Choice claims and an ineffective internal control system for that payment process.”
A similar statement about the reasoning behind the millions in overpayments appeared in Thursday’s audit on the bulk payment process:
“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.”
According to azcentral reporting, CEO and President of Triwest David McIntyre responded saying the system has improved remarkably in the last 18 months and the overpayments were due to “mechanical errors on both sides.”
To date, Health Net has repaid the VA $41 million.
For the full audit, visit the Department of Veteran Affairs, OIG site.
For more on past VA overpayment, read azcentral’s article.