Audit of the Medical Care Collection Fund Billings for Non-VA Care

We conducted this audit to determine the extent to which the Veterans Health Administration’s (VHA) Medical Care Collection Fund (MCCF) Program bills third-party health insurers for non-VA care. VHA increasingly relies on non-VA care, often referred to as “fee care,” to provide medical services to veterans who cannot easily receive care at VA medical facilities. We wanted to identify potential opportunities for VHA to increase third-party revenue. We found VHA missed opportunities to increase MCCF revenue by not billing third-party insurers for 46 percent of billable fee care claims. This occurred because VHA did not have an effective process to identify billable fee claims and also lacked a system of controls to maximize the generation of MCCF fee care revenue. VA medical facilities used two processes for identifying billable fee claims and we concluded both processes were ineffective and unreliable. We also found two of the eight VA medical facilities we reviewed did not routinely review fee claims to identify billable fee care. Furthermore, we determined medical facilities that are a part of a regional Consolidated Patient Account Center (CPAC) were no more successful in identifying billable fee claims than facilities that have not yet transitioned to the CPAC model. As a result, we estimate that with an improved process and system of controls VHA could increase third-party revenue by $110.4 million annually or by as much as $552 million over the next 5 years. We recommended the Under Secretary for Health reengineer and implement a standardized business process for identifying billable fee claims and publish management policies and procedures to support the business process. We also recommended the Under Secretary for Health provide training to fee and revenue staff on how to use the business process, establish separate collection goals for fee care third-party revenue, and monitor third-party billing for fee care. The Under Secretary for Health agreed with our recommendations and potential monetary benefits. All corrective actions are planned to be complete by March 31, 2012. We consider these planned actions acceptable and will follow up on their implementation.