VAOIG report indicates a tip-off: "Managers initiated new procedures to improve the process prior to the inspection."

by Larry Scott, VA Watchdog dot Org

Every now and then a report from the VA's Office of Inspector General (VAOIG) sends off alarm bells that won't quiet down.

This is such a report:

Healthcare Inspection Alleged Mismanagement of the Fee Basis Program VA Connecticut Healthcare System, West Haven, Connecticut -- Report Number 09-01219-141, 6/3/2009 | Summary | Report (PDF)

The report summary states:

The purpose of this inspection was to determine the validity of allegations regarding the mismanagement of the Fee Basis Program at the VA Connecticut Healthcare System (the system). We substantiated that the pre-authorization process for fee-based care was flawed. However, managers initiated new procedures to improve the process prior to the inspection. We did not substantiate that VA physicians self-referred VA patients through the affiliate hospital or benefited financially from fee basis claims paid to the affiliate hospital. We did not substantiate that the system inappropriately utilized the affiliate hospital as a sole source referral center. However, we concluded there was a lack of oversight of the Fee Basis Program and the absence of formal agreements contributed to the appearance of conflict of interest and may have resulted in the overpayments for care to the affiliate hospital. We recommended improved oversight of the program, an assessment of services paid through the program to determine if formal agreements should be considered, regular audits of fee basis claims, and enhanced physician training on VA regulations governing conflict of interest.

However, reading the fine print in the report we find something interesting.

...business office employees said that when payment claims were submitted for fee based care, they frequently could not establish who authorized the care. The process seemed to be that a clinician would request fee based care, the request would go to the Chief of Staff (COS) for approval, and the COS would sign an approval form (VA Form 10-0114A). Apparently, the approval was communicated to the requesting physician, but the form did not become part of the computerized patient medical record, and it was not forwarded to the Fee Basis Program. In fact, when asked what happened to the forms, no one seemed to know.

This would seem to indicate that the claim in the summary that "We did not substantiate that VA physicians self-referred VA patients through the affiliate hospital or benefited financially from fee basis claims paid to the affiliate hospital," cannot be proven.  If VAOIG couldn't determine who authorized fee basis care and the paperwork is gone, then the issue of self-referral is still very much alive.

VAOIG goes on to explain in detail about "technical fees" and "professional fees" being paid in error to the organization  providing services.  This looks like an overpayment because they only should have received "technical fees."  But, what VAOIG leaves out is what the organization did with the "professional fees" which are usually paid to a physician and not left on the books as "extra" money.

There are too many questions left unanswered in this report.

And, if I had to make a bet, given all the possibilities for fraud with this messed-up fee basis system, this really was a case of self-referral and VAOIG blew it.

And, did West Haven know that the VAOIG was coming?  Yes.  My take is that the "complainant" complained too loudly and gave people time to prepare and / or get rid of incriminating paperwork.

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TOPICS: veterans, veterans' benefits, VA, Department of Veterans' Affairs, VAOIG, West Haven, fee basis