These copayment charges were related to  approximately 9.8 percent of the total of approximately 576 million VHA  medical services provided. Statistical Tests of VHA’s Fiscal Year 2010 Copayment Charges Found That an Estimated 96 Percent Were Accurate

Based on our tests of a probability sample of billed copayment charges,  we estimate that 96 percent of VHA’s fiscal year 2010 copayment  charges were accurate and 4 percent were inaccurate or erroneous. In fiscal year 2010, more than 90 percent of VHA’s medical services did  not result in billed copayment charges. Our tests of 100 unbilled medical services found that VHA correctly  determined that each of the medical services should not have resulted in  a veteran copayment charge—a 100 percent accuracy rate for this  probability sample. Copayment errors identified  in both the probability sample and the case study test work mostly  involved overbillings, including errors resulting from VHA’s incorrect  handling of third-party insurance reimbursements. VHA Does Not Monitor Its Systemwide Copayment Error Rates

While various activities performed by VHA staff involve examining or  reviewing the accuracy of some individual veteran copayment charges,  we found that those activities do not provide VHA with systematic VHA- wide information on the accuracy of copayment charges needed to  effectively monitor—over time—the rates of and causes for copayment  errors. As a result, it was not clear how  the copayment charge error rates we observed in our probability samples  would compare to rates of error VHA would consider acceptable or  whether corrective action needs to be taken to reduce the error rates to  lower levels. In addition, without procedures to periodically assess the  accuracy and completeness of its copayment charges, VHA does not  have the information needed to determine whether changes in its  accuracy rates are occurring over time.   Targeted reviews of certain copayment charges. Conclusions

Our tests of a probability sample of VHA copayment charges found  copayment errors which we estimate to be 4 percent or approximately 2.3  million of VHA’s 56.5 million fiscal year 2010 copayment charges. We believe that it is important for  VHA to establish a performance measure for the copayment accuracy  rate it wants to achieve in billing copayment charges to veterans and,  once it is established, to periodically assess—on a systematic basis—the  accuracy and completeness of its copayment charges. Recommendations for Executive Action

To provide VHA with the information needed to adequately monitor the  accuracy of copayment charges VHA-wide and to assess and respond to  the causes of copayment errors, the Secretary of Veterans Affairs should  direct VHA to take the following two actions:     establish an accuracy performance measure or goal for copayment  charges billed to veterans and    establish and implement a formal process for periodically assessing— VHA-wide—the accuracy of veteran copayment charges and taking  corrective actions as necessary. Appendix I: Objectives, Scope, and Methodology

Pursuant to a request from members of the Subcommittee on Health,  House Committee on Veterans’ Affairs, we reviewed the Veterans Health  Administration’s (VHA) copayment billing practices to determine (1) the  accuracy rate for VHA copayment charges, including causes for any  under- and overbilling errors, and (2) whether VHA had systems and  processes in place to adequately monitor the accuracy of copayment  charges billed to veterans. After checking billing records, we excluded any sampled  medical services that resulted in a copayment charge. We did not  test the medical determinations (i.e., diagnosis and whether the  service was related to a veteran’s service-connected conditions or  special treatment authority) of the medical service provider (including  the pharmacist, doctor, nurse, or other medical staff);  test the determinations made as a result of the adjudication process at  VBA to determine the veteran’s service-connected conditions and  related disability rating percentages;  test VHA’s ability to record all of the medical services in the medical  center–level VistA system, or VHA’s ability to transfer all the medical  services to the appropriate data warehouse; and  confirm through outside sources (including contacting applicable  veterans) the accuracy or completeness of veteran-specific  information relied on by VHA as part of its decision to not bill for  tested medical services.
Why GAO Did This Study

In fiscal year 2010, the Department of Veterans Affairs' (VA) Veterans Health Administration (VHA) billed veterans millions of medical copayment charges totaling more than $1 billon. Witnesses at a 2009 Subcommittee on Health, House Committee on Veterans' Affairs, hearing raised concerns about inappropriate copayment charges, including some associated with veterans' service-connected conditions. As a result, members of the Subcommittee asked GAO to review (1) VHA copayment charge accuracy, including error rates and related causes, and (2) VHA efforts to monitor copayment charge accuracy. To assess the accuracy of VHA's billed copayment charges, GAO evaluated samples of fiscal year 2010 billed and unbilled medical services to determine copayment error rates and related causes. GAO also reviewed VHA practices related to monitoring the accuracy of copayment charges..

What GAO Found

Of the more than 56 million fiscal year 2010 veteran copayment charges billed by VHA, GAO estimates, based on its test of a probability sample of copayment charges, that 96 percent (or approximately 54.2 million) of the copayment charges were accurate and 4 percent (or approximately 2.3 million) were inaccurate. GAO's tests of a separate probability sample of the approximately 519 million VHA medical services that did not result in copayment charges showed that each of those VHA determinations was accurate. These and other estimated percentages are based on test results of probability samples and are subject to sampling error. Appendix I of this report contains additional information on the samples and the 95 percent confidence intervals for the estimates contained in this report. (1) Since the errors identified in GAO's probability sample all involved copayment overbilling, GAO estimates that 4 percent of the copayment charges involved overbilling of veterans. The errors GAO found were due to various factors, including inadequate review of previously billed copayment charges following retroactive changes in a veteran's service-connected conditions and the incorrect application of related medical reimbursements received from veterans' third-party insurance. (2) In tests GAO performed on another probability sample to identify underbilling errors in the approximately 519 million medical services that did not result in copayment charges, GAO found that VHA correctly determined that each tested service should not have resulted in a copayment charge. As a result, GAO tests showed that VHA accurately did not bill copayment charges for these services, which made up more than 90 percent of the approximately 576 million medical services provided during fiscal year 2010. While VHA performed various activities that involved reviewing the accuracy of some individual billed copayment charges, these activities do not constitute a systematic process for providing VHA-wide information on the accuracy and completeness of its copayment charges over time. In addition, GAO found that VHA had not established a performance measure for the accuracy level it wants to achieve in billing copayment charges. Without such a measure, it is not clear how the error rates GAO found would compare to error rates that VHA would consider acceptable, or if VHA would determine whether corrective actions need to be taken to reduce the error rates to lower levels. In addition, without a performance measure and periodic, systemwide information on the accuracy of its copayment charges, VHA cannot monitor changes in error rates and related causes over time. VHA also does not have meaningful performance information that it can provide to interested stakeholders when questions or concerns are raised concerning the accuracy of VHA's copayment charges billed to veterans.

What GAO Recommends

GAO makes two recommendations to the Secretary of Veterans Affairs to (1) establish a copayment accuracy performance measure and (2) establish and implement a formal process for periodically assessing the accuracy of veteran copayment charges VHA-wide. In written comments on a draft of this report, VA agreed with GAO's recommendations.