Report Summary

VA has a right to recover community care treatment costs for conditions unrelated to military service from veterans’ private health insurers. The VA Office of Inspector General (OIG) audit was conducted to determine how effectively the Veterans Health Administration (VHA) billed private insurers. Prior OIG work has shown that VHA has missed opportunities to recover funds that could be used to help finance care for other veterans.

VHA’s Office of Community Care (OCC) manages community care programs and bills private insurers when needed. OCC must submit reimbursement claims before insurers’ deadlines are reached, or they may be denied.

The OIG found OCC did not establish an effective process to ensure staff billed veterans’ private health insurers as required. An estimated 54 percent of billable community care claims paid between April 20, 2017, and October 31, 2020, were not submitted before filing deadlines expired. As a result, OCC did not collect an estimated $217.5 million that should have been recovered, a figure that could grow to $805.2 million by September 30, 2022, if problems are not corrected.

OCC’s billing and revenue collection process also was not synchronized with insurers’ filing deadlines, and claims information was not always available for billing. Also, pending workload volume and staff shortages hindered effective billing. Although OCC was broadly aware of challenges to its process to bill and collect revenue from private insurers, its responses were not sufficient to correct these issues.

VHA concurred with the OIG’s recommendations to develop procedures that prioritize processing to meet insurers’ filing deadlines and strengthen its information system controls to ensure information needed to process bills for reimbursement is complete and accurate. VHA should also assess staff resources and workload to make certain they are sufficiently aligned to process the anticipated volume of claims to be billed.