VA Health Care
Guidance Needed for Determining the Cost to Collect from Veterans and Private Health Insurers
Gao ID: GAO-04-938 July 21, 2004
During a May 2003 congressional hearing, questions were raised about the accuracy of the Department of Veterans Affairs' (VA) reported costs for collecting payments from veterans and private health insurers for its Medical Care Collections Fund (MCCF). Congress also had questions about VA's practice of using third-party collections to satisfy veterans' first-party debt. GAO's objectives were to determine: (1) the accuracy of VA's reported cost for collecting first- and third-party payments from veterans and private health insurers, and (2) how VA's practice of satisfying first-party debt with third-party payments affects the collections process.
VA has not provided guidance to its Chief Business Office and Veterans Integrated Service Networks (VISN) for accounting for the costs associated with collecting payments from veterans and private health insurers. As a result, GAO found that the Chief Business Office and VISNs excluded some costs associated with collecting first- and third-party payments. In addition, GAO found inconsistencies in the way VISNs allocate these costs. Consequently, VA's reported costs to collect are inaccurate. VA's practice of satisfying--or paying for--first-party, or veterans' copayment debt, with collections from third-party insurers has resulted in a reduction in overall collections and increased administrative expenses due to the reconciliation process. VA has taken the position that payments made from third-party insurers should be used to satisfy veterans' first-party debt. The law and legislative history are not clear on whether third-party collections can be used for this purpose.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
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GAO-04-938, VA Health Care: Guidance Needed for Determining the Cost to Collect from Veterans and Private Health Insurers
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Report to the Chairman, Subcommittee on Oversight and Investigations,
Committee on Veterans' Affairs, House of Representatives:
United States Government Accountability Office:
GAO:
July 2004:
VA Health Care:
Guidance Needed for Determining the Cost to Collect from Veterans and
Private Health Insurers:
GAO-04-938:
GAO Highlights:
Highlights of GAO-04-938, a report to the Subcommittee on Oversight and
Investigations, Committee on Veterans‘ Affairs, House of
Representatives
Why GAO Did This Study:
During a May 2003 subcommittee hearing, questions were raised about the
accuracy of the Department of Veterans Affairs‘ (VA) reported costs for
collecting payments from veterans and private health insurers for its
Medical Care Collections Fund (MCCF). The subcommittee also had
questions about VA‘s practice of using third-party collections to
satisfy veterans‘ first-party debt. GAO‘s objectives were to determine:
(1) the accuracy of VA‘s reported cost for collecting first- and
third-party payments from veterans and private health insurers, and (2)
how VA‘s practice of satisfying first-party debt with third-party
payments affects the collections process.
What GAO Found:
VA has not provided guidance to its Chief Business Office and Veterans
Integrated Service Networks (VISN) for accounting for the costs
associated with collecting payments from veterans and private health
insurers. As a result, GAO found that the Chief Business Office and
VISNs excluded some costs associated with collecting first- and
third-party payments. In addition, GAO found inconsistencies in the
way VISNs allocate these costs. Consequently, VA‘s reported costs to
collect are inaccurate.
Inconsistencies in VISN Allocation of Costs by Revenue Cycle Activity,
May 2004:
[See PDF for image]
[End of figure]
VA's practice of satisfying”or paying for”first-party, or veterans‘
copayment debt, with collections from third-party insurers has resulted
in a reduction in overall collections and increased administrative
expenses due to the reconciliation process. VA has taken the position
that payments made from third-party insurers should be used to satisfy
veterans‘ first-party debt. The law and legislative history are not
clear on whether third-party collections can be used for this purpose.
What GAO Recommends:
GAO recommends that the Secretary provide guidance for standardizing
and consistently applying across VA the accounting of costs associated
with collecting payments from veterans and private health insurers.
GAO believes its previous suggestion to Congress”that it consider
clarifying the cost recovery provisions of title 38 of the U.S. Code to
direct VA to collect copayments from patients regardless of any amounts
recovered from private health insurance except in instances where the
insurer pays the full cost of VA care”is still valid. In commenting on
a draft of this report, VA concurred with our recommendation.
www.gao.gov/cgi-bin/getrpt?GAO-04-938.
To view the full product, including the scope
and methodology, click on the link above.
For more information, contact Cynthia A. Bascetta at (202) 512-7101.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Lack of Guidance Results in Inaccurate Reporting of Costs:
Satisfying First-Party Debt with Third-Party Payments Limits Overall
Collections:
Conclusions:
Recommendation for Executive Action:
Agency Comments:
Appendix I: Scope and Methodology:
Appendix II: Medical Care Collections Fund Revenue Cycle Activities:
Related GAO Products:
Figures:
Figure 1: VA's MCCF Revenue Cycle for Third-Party Collections:
Figure 2: Inconsistencies in VISN Allocation of Costs to the Field
Office Cost Center for Selected Revenue Cycle Activities, May 2004:
Abbreviations:
MCCF: Medical Care Collections Fund:
PFSS: Patient Financial Services System:
VA: Department of Veterans Affairs:
VISN: Veterans Integrated Service Nework:
United States Government Accountability Office:
Washington, DC 20548:
July 21, 2004:
The Honorable Steve Buyer:
Chairman Subcommittee on Oversight and Investigations:
Committee on Veterans' Affairs:
House of Representatives:
Dear Mr. Chairman:
The Department of Veterans Affairs (VA) pays and provides for the
service-connected and nonservice-connected health care needs of
eligible veterans. In general, for nonservice-connected care, that is,
for disabilities that are not a result of injuries or illnesses
incurred or aggravated during military service, VA bills and collects
copayments from veterans. Additionally, some veterans maintain other
health insurance and VA bills and collects funds from these insurers
for nonservice-connected care. Health care costs recovered from
veterans (first-party collections) and insurers (third-party
collections) totaled about $682 million and $804 million, respectively,
in fiscal year 2003. These payments were VA's largest source of revenue
to supplement its $25.5 billion medical care appropriation in that
year.
During your May 2003 hearing on VA's third-party collection efforts you
expressed concern about the accuracy of reported costs for collecting
payments from veterans and private health insurers for VA's Medical
Care Collections Fund (MCCF).[Footnote 1] You also had questions about
VA's practice of using third-party collections to satisfy--or pay for-
-a veteran's first-party debt. Our objectives were to determine: (1)
the accuracy of VA's reported cost for collecting first-and third-party
payments from veterans and private health insurers, and (2) how VA's
practice of satisfying first-party debt with third-party payments
affects the collections process.
To conduct our review, we examined VA's collections data for fiscal
year 2003; reviewed relevant VA documents, such as MCCF organizational
and flow charts; interviewed financial officers for large private
sector hospital systems; and consulted with the Healthcare Financial
Management Association to identify industry practices for calculating
the cost for collecting first-and third-party payments. We also
interviewed officials in VA's central office and all of its Veteran
Integrated Service Networks (VISN)[Footnote 2] to better understand the
resources expended to collect first-and third-party revenue and the use
of third-party revenue to satisfy first-party debt. Our work was
performed from June 2003 through June 2004 in accordance with generally
accepted government auditing standards. For more details on our scope
and methodology, see appendix I.
Results in Brief:
VA's reported cost for collecting first-and third-party payments is
inaccurate. VA has not provided guidance to its VISNs for accounting
for the costs associated with collecting payments from veterans and
private health insurers. As a result, we found inconsistencies in the
way VISNs allocate these costs, which have led in some cases to the
exclusion of costs in VA's reported cost to collect first-and third-
party payments. For example, VISN 2's (Albany, New York) estimated
$470,000 contract for collecting third-party payments is not included
in VA's reported cost. Also not included in VA's reported cost is
$635,000 incurred by VISN 8 (Bay Pines, Florida) to assist veterans
with questions about bills they receive and, if necessary, the
arrangement of payment plans.
VA's practice of satisfying first-party debt with collections from
third-party insurers has resulted in reduced overall collections and
increased administrative expenses due to the reconciliation process. VA
has taken the position that payments made by third-party insurers
should be used to satisfy veterans' copayment debt. However, the law
and the relevant legislative history are not clear on whether third-
party collections can be used for this purpose. Consequently, we
believe that that the action we previously suggested to Congress--that
it consider clarifying the cost-recovery provisions of title 38 of the
U.S. Code to direct VA to collect copayments from patients regardless
of any amounts recovered from private health insurance except in
instances where the insurer pays the full cost of VA care--is still
valid. We are also making a recommendation to improve VA's process for
accounting for its cost for collecting first-and third-party payments.
In commenting on a draft of this report, VA concurred with our
recommendation.
Background:
VA operates one of the nation's largest health care systems to provide
care to approximately 5.2 million veterans who receive health care
through 158 VA medical centers (VAMC) and almost 900 outpatient clinics
nationwide. The VA health care system also consists of nursing homes,
residential rehabilitation treatment programs, and readjustment
counseling centers.
In 1986 Congress authorized VA to collect payments from third-party
health insurers for the treatment of veterans with nonservice-connected
disabilities, and it also established copayments from veterans for this
care.[Footnote 3] Funds collected were deposited into the U.S. Treasury
as miscellaneous receipts and were not made specifically available to
VA to supplement its medical care appropriations. The Balanced Budget
Act of 1997 established a new fund in the U.S. Treasury, the Department
of Veterans Affairs Medical Care Collections Fund, and authorized VA to
use funds in this account to supplement its medical care
appropriations.[Footnote 4] As part of VA's 1997 strategic plan, VA
expected that collections from first-and third-party payments would
cover the majority of the cost of care provided to veterans for
nonservice-connected disabilities. VA has determined that some of these
veterans, about 25 percent of VA's user population in fiscal year 2002,
were required to pay a copayment because of their income
levels.[Footnote 5]
In September 1999, VA adopted a fee schedule, called "reasonable
charges," which are itemized fees based on diagnoses and procedures.
This schedule allows VA to more accurately bill for the care provided.
To implement this, VA created additional bill-processing functions--
particularly in the areas of documenting care, coding the care, and
processing bills for each episode of care.
To collect from health insurers, VA uses a four-function process with
13 activities to manage the information needed to bill and collect
third-party payments--also known as the MCCF revenue cycle (see fig.
1). First, the intake revenue cycle function involves gathering
insurance information on the patient and verifying that information
with the insurer as well as collecting demographic data on the veteran.
Second, the utilization review function involves precertification of
care in compliance with the veteran's insurance policy, including
continued stay reviews to obtain authorization from third-party
insurers for payment. Third, the billing function involves properly
documenting the health care provided to patients by physicians and
other health care providers. Based on the physician documentation, the
diagnoses and medical procedures performed are coded. VA then creates
and sends bills to insurers based on the insurance and coding
information obtained. Finally, the collections, or accounts receivable,
function includes processing payments from insurers and following up on
outstanding or denied bills. See appendix II for a description of the
activities that take place within each of the four functions.
Figure 1: VA's MCCF Revenue Cycle for Third-Party Collections:
[See PDF for image]
[A] Reviewing clinical information and obtaining payment authorization
from third-party insurer for continuation of care.
[B] Reviewing outstanding claims sent to third-party insurers and
identifying amount of payment due to VA for collection follow-up work.
[C] Referring delinquent first-party debt to the U.S. Treasury for
collection against any future government payment to the veteran, such
as reducing an income tax refund by the amount of the first-party debt.
[D] Receiving notification of partial or nonpayment from the third-
party insurer, reviewing documentation, initiating an appeal to the
third-party insurer for payment, and following up for appropriate
payment.
[End of figure]
VA's Chief Business Office utilizes a performance measure--an
efficiency rating it refers to as "cost to collect"--that reflects VA's
cost to collect one dollar from first-and third-parties.[Footnote 6] To
calculate the efficiency rating VA divides the costs of generating a
bill and collecting payments from veterans and private health insurers
by the actual revenue received from these sources. To measure the cost,
cost data are extracted from two financial accounts, or cost centers,
which are intended to capture field office costs and central office
costs.[Footnote 7] Specifically, cost centers are used for classifying
costs related to each of the 13 functional activities and the
organizations that support these activities.
According to an official with the Healthcare Financial Management
Association,[Footnote 8] because business practices differ among
entities, there are many variables that entities include in their
calculations of the cost for collecting funds from first and third
parties. Thus, a comparison of collection efficiency--the cost to
collect one dollar--between different entities would be difficult.
However, according to the official, it is reasonable to expect that
business practices within the same organization such as the VA can be
standardized, which would facilitate such a comparison internally.
The VA health care system has unique rules and regulations governing
its billing practices. For instance, VA is generally not authorized to
bill Medicare or Medicaid for care provided to Medicare-or Medicaid-
eligible veterans. VA must pay for all inpatient and outpatient care
associated with a service-connected disability--it cannot collect
copayments or bill third-party insurers for this care.
VA uses third-party collections to satisfy veterans' first-party debt.
Specifically, if VA treats an insured veteran for a nonservice-
connected disability, and the veteran is also determined by VA to have
copayment responsibilities, VA will apply each dollar collected from
the insurer to satisfy the veteran's copayment debt related to that
treatment.[Footnote 9] As we stated in a previous report to
Congress,[Footnote 10] the statutes governing VA recoveries from
private health insurers and veteran copayments do not clearly specify
the relationship between the two provisions. In the absence of
definitive guidance in the law, VA's General Counsel has determined
that insurance recoveries should be used to satisfy veterans' copayment
debt. The law and the relevant legislative history are not clear on
whether third-party collections can be used for this purpose.
Lack of Guidance Results in Inaccurate Reporting of Costs:
VA has not provided guidance to the Chief Business Office or VISNs for
accounting for the costs associated with collecting payments from
veterans and private health insurers. As a result, we found that VA's
Chief Business Office and VISNs did not allocate certain costs
associated with activities related to collecting first-and third-party
payments to the two cost centers used in the calculation of cost to
collect.[Footnote 11] In addition, we found inconsistencies in the way
VISNs allocated these costs to the field office cost center.
Consequently, reported costs to collect are inaccurate.
We found that some costs incurred by VA's central office as part of its
efforts for collecting first-and third-party payments were not
allocated to the central office cost center. For example, the following
activities are costs incurred by organizations that support the Chief
Business Office, but are not included in the central office cost
center:
* Staff at the Health Eligibility Center spend a portion of their time
determining veterans' copayment status.
* Staff at the Health Revenue Center processed first-party refunds
resulting from a settlement with a third-party payer regarding claims
submitted from January 1995 through December 2001. VA reported that
about 15 full-time staff members are dedicated to this effort.
* Staff assigned to Health Informatics assisted with contractor-
developed software to review third-party claims for accuracy.
Some costs incurred by field locations also were not always allocated
to the field office cost center. Cost allocation differences occur
because VA does not provide guidance to its field locations on which
costs to allocate to specific cost centers. Thus, each of VA's health
care VISNs makes a determination as to which cost center to use when
allocating costs for specific revenue cycle functions--such as patient
intake and registration and utilization review. Figure 2 shows
inconsistencies among VISNs in the way they allocate costs to some of
the activities within the revenue cycle functions. For example, for
precertification and certification activities within the utilization
review function, 13 VISNs allocated all of the cost, 3 VISNs allocated
some costs, and 5 VISNs allocated none of the cost to the field office
cost center. In addition, the following are examples of costs that are
related to collection activities but were not included in the costs for
collecting payments:
* A veteran call center in VISN 8 (Bay Pines, Florida)--staffing
resources valued at about $635,000 designed to assist veterans with
questions about bills they receive and, if necessary, the arrangement
of payment plans.[Footnote 12]
* Two service contracts in VISN 2 (Albany, New York)--approximately
$470,000 in contract expenses for collecting third-party payments and a
service contract estimated at $104,000 for insurance verification.
* Two service contracts in VISN 10 (Cincinnati, Ohio)--approximately
$100,000 in contract expenses to use a software package that reviews
claims sent to third-party insurers for technical accuracy. Also not
included was an estimated $425,000 to license the use of insurance
identification and verification software.
Figure 2: Inconsistencies in VISN Allocation of Costs to the Field
Office Cost Center for Selected Revenue Cycle Activities, May 2004:
[See PDF for image]
[End of figure]
In an attempt to standardize how MCCF staff carry out the revenue cycle
functions and to instill fiscal discipline throughout its entire health
system, VA is piloting the Patient Financial Services System (PFSS) in
VISN 10 (Cincinnati, Ohio). PFSS is a financial software package that
contains individual patient accounts for billing purposes. According to
the Chief Business Office, the system is a key element to standardize
MCCF operations throughout the entire VA health care system. PFSS is
expected to improve first-and third-party collections by capturing and
consolidating inpatient and outpatient billing information. However,
PFSS is not currently designed to capture the cost of staff time for
these activities--a key element for assessing the efficiency of VA's
collection efforts.
Satisfying First-Party Debt with Third-Party Payments Limits Overall
Collections:
VA's practice of satisfying veterans' copayment debt with collections
from third-party insurers has reduced overall collections and increased
administrative expenses. VA does not quantify the lost revenue from
veterans' copayments that is not collected and could be used to
supplement its medical care appropriation. Based on interviews with
network officials and site visits to individual medical facilities, we
did not discover any locations that track the volume of first-party
debt that is not collected and its relative dollar value. Hence, the
exact dollar value of first-party revenue that was not collected is
unknown.
Seventeen of the 21 network officials we interviewed stated that
considerable administrative time is dedicated to the process required
to satisfy first-party debt with third-party collections--resources
that could be invested elsewhere if the practice did not exist. One
facility official estimated that approximately 5 full-time equivalent
staff are used to satisfy first-party debt. Furthermore, one VISN
official estimated that its medical facilities use approximately 11
full-time equivalent staff on this process.
Collections staff routinely receive insurance payments that include
voluminous reports that detail each claim. For example, one medical
center provided us with a report that contained approximately 1,000
line items, each representing a pharmaceutical reimbursement. Staff at
the medical center must sort through each line item and manually match
it to a claim in the veteran's file to determine if the veteran was
charged a copayment for the pharmaceutical. In those cases where VA
receives a reimbursement and the veteran was charged a copayment, VA
will issue a credit or refund to the veteran--in the case of
pharmaceuticals this amount can be up to $7.
VA will delay billing copayments to veterans with private health
insurance for 90 days to allow time for the insurer to reimburse VA.
However, when insurers reimburse VA after the 90-day period, VA must
absorb the cost of additional staff time for processing a refund if the
veteran has already paid the bill.
In our 1997 report, we discussed that VA's practice of satisfying
copayment debt with recoveries made from third-party insurers has
resulted in reduced overall cost recoveries and increased
administrative expense.[Footnote 13] In the report we suggested that
Congress consider clarifying the cost recovery provisions of title 38
of the U.S. Code to direct VA to collect copayments from patients
regardless of any amounts recovered from private health insurance
except in instances where the insurer pays the full cost of VA care.
Conclusions:
VA does not provide guidance to its Chief Business Office and VISNs for
accounting for the costs associated with collecting payments from
private health insurers and veterans. As a result, VA's Chief Business
Office and VISNs did not allocate certain costs associated with
activities related to collecting first-and third-party payments to the
two cost centers used by the Chief Business Office in its calculation
of cost to collect. In addition, we found inconsistencies in the way
VISNs allocated these costs to the field office cost center.
Consequently, VA's reported cost-to-collect measure is inaccurate.
Furthermore, VA has determined that it should use collections from
private health insurers to satisfy veteran copayment debt. The law is
silent on this point. VA's determination has resulted in increased
administrative expenses and reduced overall collections, thus making
fewer dollars available for veteran health care. We believe our
previous suggestion to Congress--that it consider clarifying the cost
recovery provisions of title 38 of the U.S. Code to direct VA to
collect copayments from patients regardless of any amounts recovered
from private health insurance except in instances where the insurer
pays the full cost of VA care--is still valid. Such action would reduce
the administrative burden on VA staff, reduce VA administrative
expenses, and allow VA to maximize collections to help meet its costs
for providing health care.
Recommendation for Executive Action:
To accurately determine and report the cost to collect first-and third-
party payments, we recommend that the Secretary of Veterans Affairs
direct the Under Secretary for Health to provide guidance for
standardizing and consistently applying across VA the accounting of
costs associated with collecting payments from veterans and private
health insurers.
Agency Comments:
We provided a draft of this report to VA for comment. In oral comments,
an official in VA's Office of Congressional and Legislative Affairs
informed us that VA concurred with our recommendation.
We are sending copies of this report to the Secretary of Veterans
Affairs, interested congressional committees, and other interested
parties. We will also make copies available to others upon request. In
addition, this report will be available at no charge on GAO's Web site
at http://www.gao.gov/.
If you or your staff have any questions about this report, please call
me at (202) 512-7101 or Michael T. Blair, Jr., at (404) 679-1944.
Michael Tropauer and Aditi Shah Archer contributed to this report.
Sincerely yours,
Signed by:
Cynthia A. Bascetta:
Director, Health Care--Veterans' Health and Benefits Issues:
[End of section]
Appendix I: Scope and Methodology:
To do our work, we reviewed our prior work and Department of Veterans
Affairs (VA) Office of Inspector General reports on VA's first-and
third-party revenue collection for the Medical Care Collections Fund
(MCCF). We obtained and reviewed copies of VA policies and regulations
governing these collection activities. Also, we reviewed statements by
the Federal Accounting Standards and Advisory Board on managerial cost
accounting concepts and standards for the federal government.
We interviewed officials at VA's Chief Business Office, which provides
policy guidance to MCCF field staff, and obtained information on what
they consider to be direct expenses of collecting first-and third-party
revenue and documentation on how they calculate the cost to collect
first-and third-party revenue. This information was validated through
telephone interviews of key officials at each of VA's 21 networks and
site visits to 4 medical facilities. Also, we obtained information on
the organizational structure for each network and its medical
facilities and obtained the views of VISN and medical facility
officials on the accuracy of the Chief Business Office's cost
reporting. In addition, we obtained information from the Healthcare
Financial Management Association on other health care industry
practices for reporting the cost to collect first-and third-party
payments.
Regarding the practice of satisfying first-party debt with third-party
revenue, we reviewed past opinions and decisions by VA's Office of
General Counsel, applicable laws and regulations, and existing GAO
matters for consideration. We also discussed the implementation of VA's
Office of General Counsel's decisions with staff from VA's Chief
Business Office and medical facilities.
[End of section]
Appendix II: Medical Care Collections Fund Revenue Cycle Activities:
In 1986, Congress authorized VA to collect payments from third-party
health insurers for the treatment of veterans with nonservice-connected
disabilities, and it also established copayments for this care. Funds
collected were deposited into the U.S. Treasury as miscellaneous
receipts and not made specifically available to the VA to supplement
its medical care appropriations. The Balanced Budget Act of 1997
established a new fund in the U.S. Treasury, the Department of Veterans
Affairs Medical Care Collections Fund, and authorized VA to use funds
in this account to supplement its medical care appropriations. To
collect from health insurers, VA uses a four-function process with the
following 13 activities to bill and collect third-party payments.
1. Patient Registration: Collecting patient demographic information,
determining eligibility for health care benefits, ascertaining
financial status, and obtaining consent for release of medical
information.
2. Insurance Identification: Obtaining insurance information from
veteran, spouse, or employer.
3. Insurance Verification: Confirming patient insurance information and
contacting third-party insurer for verification of coverage and benefit
structure.
4. Precertification and Certification: Contacting third-party insurer
to obtain payment authorization for VA-provided care.
5. Continued Stay Reviews: Reviewing clinical information and obtaining
payment authorization from third-party insurer for continuation of
care.
6. Coding and Documentation: Reviewing and assigning appropriate codes
to document diagnosis of patient ailment and treatment procedures and
validating information documented by the physician.
7. Bill Creation: Gathering pertinent data for bills; authorizing and
generating bills; and submitting bills to payers.
8. Claims Correspondence and Inquiries: Providing customer service for
veterans, payers, Congress, and VA Regional Counsel.
9. Establishment of Receivables: Reviewing outstanding claims sent to
third-party insurers and identifying amount of payment due to VA for
collection follow-up work.
10. Payment Processing: Reviewing, posting, and reconciling payment
received.
11. Collection Correspondence and Inquiries: Following up with payers;
resolving first-party bankruptcies, hardships and waivers; processing
refund requests, repayment plans, and returned checks; referring claims
to utilization review; and generating probate action.
12. Referral of Indebtedness: Referring delinquent first-party debt to
the U.S. Treasury for collection against any future government payment
to the veteran, such as reducing an income tax refund by the amount of
the first-party debt.
13. Appeals: Receiving notification of partial or nonpayment from the
third-party insurer, reviewing documentation, initiating an appeal to
the third-party insurer for payment, and following up for appropriate
payment.
[End of section]
Related GAO Products:
VA Health Care: VA Increases Third-Party Collections as It Addresses
Problems in Its Collections Operations. GAO-03-740T. Washington, D.C.:
May 7, 2003.
VA Health Care: Third-Party Collections Rising as VA Continues to
Address Problems in Its Collections Operations. GAO-03-145. Washington,
D.C.: January 31, 2003.
VA Health Care: VA Has Not Sufficiently Explored Alternatives for
Optimizing Third-Party Collections. GAO-01-1157T. Washington, D.C.:
September 20, 2001.
VA Health Care: Third-Party Charges Based on Sound Methodology;
Implementation Challenges Remain. GAO/HEHS-99-124. Washington, D.C.:
June 11, 1999.
VA Medical Care: Increasing Recoveries From Private Health Insurers
Will Prove Difficult. GAO/HEHS-98-4. Washington, D.C.: October 17,
1997.
FOOTNOTES
[1] The Balanced Budget Act of 1997 established VA's Medical Care
Collections Fund. The fund includes veteran copayments, payments from
third parties, and other funds collected in connection with the
provision of care, services, or medications to veterans. Such funds may
be used to provide additional care and services to veterans and to pay
for costs related to the identification, billing, auditing, and
collection of amounts owed for medical care and services. See 38 U.S.C.
§1729A(2000).
[2] The management of VA's 158 hospitals and other health care
facilities is decentralized to 21 regional networks referred to as
Veterans Integrated Service Networks.
[3] Pub. L. No. 99-272, 100 Stat. 372, 373, 383.
[4] 38 U.S.C. §1729A(c)(1)(A).
[5] VA uses a financial means test that examines the income and net
worth of the veteran to determine ability and requirement to pay
copayments.
[6] The Chief Business Office was established in May 2002 to provide
guidance for VA's collection activity.
[7] The specific cost centers that the Chief Business Office uses in
its cost model are stated in VA Handbook 4671.1 as MCCF Field Stations
and CBO-Business Policy. In this report we refer to the MCCF Field
Stations cost center as the field office cost center and the CBO-
Business Policy cost center as the central office cost center.
[8] The association comprises about 32,000 healthcare financial
management professionals organized to improve financial management of
healthcare institutions and related healthcare organizations. Its goals
include increasing knowledge in financial management, establishing and
promulgating principles relative to financial management, and promoting
and encouraging financial management standards of performance for
individuals and institutions in the various areas of financial
management.
[9] Among the veterans receiving this benefit are certain veterans who,
according to the VA, are capable of satisfying their copayment
obligations.
[10] See U.S. General Accounting Office, VA Medical Care: Increasing
Recoveries From Private Health Insurers Will Prove Difficult, GAO/
HEHS-98-4 (Washington, D.C.: Oct. 17, 1997).
[11] While we found costs that were excluded from the calculation,
there could be costs that were allocated to the two cost centers that
are not associated with collecting first-and third-party payments.
[12] At the time of our review, this cost was allocated to a cost
center other than the one used by the Chief Business Office in its
calculation for the field cost center, entitled "Miscellaneous Benefits
and Services, Administrative Programs." VA Handbook 4671.1, January 16,
2003.
[13] See GAO/HEHS-98-4.
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