VHA fails on improper payments targets

Several Veterans Health Administration programs are experiencing error rates of 12 percent to 24 percent, exceeding the maximum error limits allowed under a recent law, according to a new report from the Office of Inspector General.

“We concluded that VA did not fully comply with IPERA (Improper Payments Elimination and Recovery Act of 2010) requirements,” wrote Belinda Finn, assistant inspector general for audits and evaluations, in the March 14 report. To comply with the law, agencies must keep their error rates at 10 percent or below.

The Veterans Health Administration programs that rose above that maximum level included:

• State Home Per Diem Grants, 13.7 percent error rate;
• Supplies and materials, 13.6 percent error rate;
• Non-VA care fee, 12.4 percent error rate.

In addition, the inspector general’s office recalculated the error rate for the health administration’s “Other Contractual Services” account at 24 percent. That was significantly higher than the VA’s estimated error rate for that account.

“VHA’s estimation methodology needed improvement and our method gives a more accurate improper payment rate estimate,” the report said.

Overall, the Veterans Health Administration reported a payment error rate of 11.5 percent on payments of $9.7 billion.

The Veterans Benefits Administration, by comparison, had a much lower rate of reported payment errors, only 1.2 percent errors on payments of $80 billion.

Veterans health officials cited documentation and administrative errors as cause of most of the errors. For example, the health agency said the majority of the errors for Other Contractual Services occurred because payments were not charged to the appropriate cost center.

Finn recommended that the VA’s under secretary for health establish controls to ensure that programs meet their targets for reducing improper payments, along with several other improvements. Department officials agreed with the findings and recommendations.