Audit of VHA's State Home Per Diem Program

The Veterans Health Administration’s (VHA) State Home Per Diem Program reimburses State Veterans Homes (SVHs) to defray the costs of providing veterans care. During 2009, VA Medical Centers (VAMCs) reimbursed 131 SVHs in 48 States and Puerto Rico a total of about $590 million. We conducted this audit to evaluate whether VAMCs reimbursed SVHs accurately for providing care to eligible veterans and provided access to care for veterans denied admittance to SVHs. VAMCs accurately reimbursed SVHs for veteran nursing home care. We reviewed VAMC 2009 reimbursements to 40 SVHs totaling about $173 million and concluded $172 million (99 percent) of the reimbursements were accurate. However, we found that two states were denying care to eligible veterans and none of the eight VAMCs we visited had strengthened their outreach efforts to ensure veterans denied access to SVH nursing home care obtained access to care from other VA sources. This occurred because VAMCs did not provide SVHs information on VA nursing home care options for distribution to veterans. VAMCs need to improve their oversight of SVHs to reduce risks of veterans receiving inappropriate nursing home care. Of 400 sampled veterans, VAMCs did not properly document or ensure timely SVH submission of eligibility determinations for 126 (32 percent) veterans and medical care approval requests for 218 (55 percent) veterans. This occurred because of ineffective VHA policies and procedures, insufficient oversight, and inadequate staff training. As a result, increased risks exist that veterans will not receive needed nursing home care, and SVHs will not provide appropriate medical care. We recommended the Under Secretary for Health require VHA to provide fact sheets on VA nursing home care options to SVHs for distribution to eligible veterans, determine the SVHs that have denied eligible veterans access to care, and develop and initiate a plan to conduct specific and targeted outreach activities. We also recommended VHA notify SVHs that VAMCs will provide eligible veterans access to specialty medical care. Further, we recommended VHA revise policies and procedures, ensure Veterans Integrated Service Networks establish oversight procedures, and provide training to VAMC staff responsible for SVH oversight. The Under Secretary for Health agreed with our findings and recommendations and plans to complete all corrective actions by September 2011. We consider these planned actions acceptable, and will follow up on their implementation.