VHA’s Fiscal Year 2015 Claims Processing Was Significantly Less Timely Than Medicare’s and TRICARE’s, and VHA Has Generally Not Paid Interest Penalties on Late Payments

		VHA’s Claims Processing and Payments Were Significantly Less Timely Than Medicare’s and TRICARE’s in Fiscal Year 2015, and VHA’s Data Likely Overstate VHA’s Performance

In fiscal year 2015, VHA’s processing of claims for VA care in the  community services was significantly less timely than Medicare’s and  TRICARE’s claims processing. VHA officials told us that the agency’s  fiscal year 2015 data show that VHA processed about 66 percent of  claims within the agency’s required timeframe of 30 days or less. In  contrast, CMS and DHA data show that in fiscal year 2015, Medicare’s  and TRICARE’s claims processing contractors processed about 99  percent of claims within 30 or fewer days of receipt. Specifically, VHA’s data likely overstate the agency’s claims  processing timeliness because they do not account for delays in scanning  paper claims, and VHA officials told us that paper claims account for  approximately 60 percent of claims for VA care in the community  services. However, our analysis of the non-generalizable sample of 156 claims for  VA care in the community services from the four VHA claims processing  locations we visited suggests that it may have taken about 2 weeks, on  average, for staff to scan the paper claims in our sample into FBCS. However, the observations from  our most recent review of a new sample of claims at four other claims  processing locations suggest that VHA had not monitored the operational  effectiveness of their corrective actions to address our recommendation. VHA officials said that when they became aware of our more recent  findings, they began requiring managers at their claims processing  locations to periodically certify in writing that all incoming paper claims  have been date-stamped and scanned on the day of receipt. As a result, this documentation must be scanned into FBCS, which  delays claims processing, according to VHA staff. FBCS cannot automatically adjudicate claims. In addition to the technological issues described above, VHA officials  and staff also told us that staffing shortages have adversely affected  VHA’s claims processing timeliness. VA Care in the Community Providers Cite Administrative Burden, Lack of Notification, and Problems with Poor Customer Service

The 12 community providers and 12 state hospital association  respondents who participated in our review told us about various issues  they had experienced with VHA’s claims processing system. Almost all of the community providers we  interviewed (11 out of 12) and all of the state hospital association  respondents that participated in our review described the  administrative burden of submitting claims and medical  documentation to their respective VHA claims processing locations. Issues with telephone-based provider customer service. While VHA Has Implemented Interim Measures, the Agency Does Not Expect to Address All Claims Processing Challenges until Fiscal Year 2018 or Later

		VHA Has Recently Eliminated Certain Medical Documentation Requirements, Filled Staff Vacancies, and Taken Other Steps to Improve Claims Processing Timeliness

In the course of our work, VHA officials reported that they implemented  several measures in fiscal year 2015 and early fiscal year 2016 that were  intended to improve the timeliness of VHA’s payments to community  providers and the TPAs. In its October 2015 plan, VHA stated that it expects it will significantly  increase its reliance on community providers to deliver care to veterans in  the coming years. To date, VHA has not communicated to Congress or other external  stakeholders a plan for modernizing its claims processing system that  clearly addresses the components of a sound plan identified above. That VHA has not yet communicated a detailed plan but has stated that it  expects to deploy a modernized claims processing system as early as  fiscal year 2018 is cause for concern, especially given VA’s past failed  attempts to modernize key information technology systems. Recommendation for Executive Action

To help provide reasonable assurance that VHA achieves its long-term  goal of modernizing its claims processing system, the Secretary of  Veterans Affairs should direct the Under Secretary for Health to ensure  that the agency develops a sound written plan that includes the following  elements: a detailed schedule for when VHA intends to complete development  and implementation of each major aspect of its new claims processing  system;  the estimated costs for implementing each major aspect of the  system; and  the performance goals, measures, and interim milestones that VHA  will use to evaluate progress, hold staff accountable for achieving  desired results, and report to stakeholders the agency’s progress in  modernizing its claims processing system. Condition meets the prudent layperson standard of an emergency  A VA or other federal medical facility was not feasibly available to provide the  needed care, and an attempt to use either would not have been considered  reasonable by a prudent layperson  The services were rendered before the veteran was stable enough for  transfer to a VA or other federal medical facility and before the VA or other  federal medical facility agreed to accept the transfer  Veteran was enrolled in the VA health care system  Veteran had received care from a VA clinician within the 24 months preceding  the emergency care episode  Veteran is financially liable to the community provider of the emergency care  Veteran has no entitlement under another health plan contract (such as  Medicare or a private health insurance plan)
Veteran has no recourse against a third party that would wholly extinguish his  or her liability to the community provider (e.g., motor vehicle insurance or  workers’ compensation)

Appendix III: Veterans Health Administration’s (VHA) Steps for Processing Claims for the Department of Veterans Affairs’ (VA) Care in the Community Services as of March 2016

Appendix III: Veterans Health Administration’s  (VHA) Steps for Processing Claims for the  Department of Veterans Affairs’ (VA) Care in  the Community Services as of March 2016 VHA has numerous programs through which it purchases VA care in the community services, and  these programs have varying rules governing payment rates and requirements for claims processing.
Why GAO Did This Study

Due to recent increases in utilization of VA care in the community, VHA has had difficulty processing claims in a timely manner.
Congress included a provision in law for GAO to review VHA's payment timeliness and to compare it to that of Medicare and TRICARE. This report examines, among other objectives, (1) VHA's, Medicare's, and TRICARE's claims processing timeliness; (2) factors that have impeded VHA's claims processing timeliness and community providers' experiences; and (3) VHA's recent actions and plans to improve its claims processing timeliness. GAO obtained fiscal year 2015 data on VHA's, Medicare's, and TRICARE's claims processing timeliness. GAO also visited 4 of 95 VHA claims processing locations (selected based on variation in geographic location, performance, and workload); reviewed VHA documents and 156 claims from the 4 locations; and interviewed officials from VHA, Medicare, TRICARE, and selected community providers and state hospital associations. Results from GAO's analysis cannot be generalized to all VHA claims processing locations or community providers.

What GAO Found

To help ensure that veterans are provided timely and accessible health care services, the Veterans Health Administration (VHA) of the Department of Veterans Affairs (VA) has purchased care from non-VA community providers through its care in the community programs since as early as 1945. VHA's agency-wide data show that in fiscal year 2015, it processed about 66 percent of claims within the agency's required time frame of 30 days or less, whereas data from Medicare and TRICARE (the Department of Defense's health care system) show that their contractors processed about 99 percent of claims within 30 days or less. However, VHA's data likely overstate its performance because they do not account for delays in scanning paper claims, which officials say account for approximately 60 percent of claims. GAO's analysis of 156 claims from four VHA claims processing locations indicated that it took an average of 2 weeks for VHA staff to scan paper claims into VHA's claims processing system, and GAO observed multiple bins of paper claims that had been awaiting scanning at one site for over a month. In a 2014 report, GAO recommended that VHA take action to ensure that all of its claims processing locations comply with its policy of scanning claims into VHA's claims processing system upon receipt. While VHA agreed with this recommendation and attempted to reiterate the policy through various means, GAO's more recent findings suggest that VHA did not monitor the operational effectiveness of these corrective actions. VHA officials said that they have since begun requiring managers at their claims processing locations to periodically certify in writing that all incoming paper claims have been date-stamped and scanned on the day of receipt.
VHA officials and claims processing staff from the four locations GAO visited indicated that technology limitations, manual processes, and staffing shortages have delayed VHA's claims processing. For example, VHA's claims processing system lacks the capacity to automatically adjudicate claims. VHA staff instead must rely on manual processes, which they say delay payments to community providers. In addition, community providers and state hospital association respondents who participated in GAO's review said they had experienced various issues with VHA's claims processing system. For example, almost all providers described the administrative burden of submitting claims and related medical documentation to VHA and a lack of responsiveness from VHA's claims processing locations when the providers contacted them to follow up on claims.
While VHA has recently implemented interim measures to address challenges that have delayed claims processing—such as eliminating certain medical documentation requirements and filling staff vacancies—the agency does not expect to deploy solutions to address all challenges until fiscal year 2018 or later. VHA is currently examining options for modernizing its claims processing system but has not yet communicated to Congress or other external stakeholders a sound plan that clearly addresses the components identified in past GAO work (such as a detailed schedule, estimated costs, and measures of progress). This is concerning, given VA's past failed attempts to modernize key information technology systems. While the agency expects to significantly increase its reliance on community providers to deliver care to veterans in the future, it risks losing their cooperation if it does not improve its payment timeliness.

What GAO Recommends

GAO recommends that VA develop a written plan for modernizing its claims processing system that includes a detailed schedule, costs, and performance measures. VA concurred with this recommendation and plans to address it through the planned consolidation of its VA care in the community programs.