VA Health Care

Verifying Veterans' Reported Income Could Generate Millions in Copayment Revenues Gao ID: HRD-92-159 September 15, 1992

Each year, the Department of Veterans Affairs (VA) provides medical care to about one million veterans whose disabilities are unrelated to military service. Among these veterans, those classified as having "higher incomes" must copay for any treatment they receive. GAO found that VA may have incorrectly determined the copayment status of more than 100,000 of these veterans in 1990. Although tax records revealed that these veterans had incomes above the threshold levels, VA relied solely on income reported by veterans to determine their copayment status. Had VA verified those amounts with other sources, it could have billed as much as $27 million for the health care it provided that year. VA cited database and staffing limitations as the main barriers to using tax records. In addition, VA may have lost as much as $120 million in copayment revenues because it could not implement an income verification system before its tax record authorization expired in September 1992. Copayment losses in 1991 and 1992 may greatly exceed the estimated 1990 losses because of significantly lower income thresholds and higher copayment rates in those years. Despite this wasted opportunity to verify veterans' incomes, Congress should extend VA's authority to use tax records.

GAO found that: (1) the Veterans Health Administration (VHA) misclassified 109,230 veterans as not owing copayments, but tax records showed incomes that exceeded income thresholds; (2) misclassified veteran incomes totalled over $4.7 billion from such sources as employment, pensions, investments, and miscellaneous sources; (3) most veterans had incomes that exceeded copayment threshold levels by $5,000 or more, including over 2,500 veterans who had total incomes of $100,000 or more; (4) the majority of the misclassified veterans were married and had no dependents, but their spouses' income often placed them over the income threshold; (5) misclassification of copayment status greatly reduced potential copayment revenues in 1990; (6) VHA could have billed as much as $27 million in copayments for care provided to the misclassified veterans; and (7) VHA missed an opportunity to reduce copayment losses because it did not implement an income-verification system, using tax records.


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