Community Care Network Outpatient Claim Payments Mostly Followed Contract Rates and Timelines, but VA Overpaid for Dental Services

The OIG examined whether the Veterans Health Administration (VHA) provided effective oversight of its two third-party administrators (TPAs), Optum and TriWest, to make sure VHA made accurate and timely community care payments for outpatient healthcare and dental services. The OIG estimated that VHA accurately paid Optum for outpatient healthcare services 98.6 percent of the time, totaling $5.1 billion for 33.1 million transactions, and accurately paid TriWest 99.8 percent of the time, totaling $4.4 billion for 25 million transactions. Review periods varied, and although error rates were small, the combined estimated errors resulted in overpayments of about $178.5 million because VHA did not charge the correct Medicare rate or applicable VA fee rate, sometimes because these rates were not available. VHA has made some overpayment recoveries, but others still need to be completed.

Community providers, VHA, and the TPAs generally met contract requirements for payment timeliness. Review periods varied. For Optum, the on-time rates were the following: providers submitting claims to the TPA, 99.8 percent; the TPA paying the provider, 97.8 percent; and VHA reimbursing the TPA, 92.5 percent. For TriWest, these on-time rates were, respectively, 99.9 percent, 98.2 percent, and 97.4 percent.

The OIG estimated that VHA paid over $900 million more to both TPAs combined than the TPAs paid community providers for dental services. This occurred because the contracts for four of the five community care regions did not limit VHA’s reimbursement payments to TPAs to the amount the providers invoiced to the TPAs.

VHA officials concurred with six of the OIG’s seven recommendations; they concurred in principle with recommendation 3.