jurisdiction: US

text: b' Report No. DODIG-2013-135\n\n\n\n\n I nspec tor Ge ne ral\n U.S. Department of Defense\n\n SEPTEMBER 18, 2013\n\n\n\n\n The Department of Defense\n and Veteran Affairs Health Care\n Joint Venture at Tripler Army\n Medical Center Needs More\n Management Oversight\n\n\n\n\nI N T E G R I T Y \xef\x82\xab E F F I C I E N C Y \xef\x82\xab A C C O U N TA B I L I T Y \xef\x82\xab E X C E L L E N C E\n\x0c I N T E G R I T Y \xef\x82\xab E F F I C I E N C Y \xef\x82\xab A C C O U N TA B I L I T Y \xef\x82\xab E X C E L L E N C E\n\n\n\n\n Mission\n Our mission is to provide independent, relevant, and timely\n oversight of the Department of Defense that: supports the\n warfighter; promotes accountability, integrity, and efficiency;\n advises the Secretary of Defense and Congress; and informs\n the public.\n\n\n Vision\n Our vision is to be a model oversight organization in the federal\n government by leading change, speaking truth, and promoting\n excellence; a diverse organization, working together as one\n professional team, recognized as leaders in our field.\n\n\n\n\n Fraud, Waste and Abuse\n HOTLINE\n 1.800.424.9098 \xe2\x80\xa2 www.dodig.mil/hotline\n\n\n\n\nFor more information about whistleblower protection, please see the inside back cover.\n\x0c Results in Brief\n The Department of Defense and Veteran Affairs Health\n Care Joint Venture at Tripler Army Medical Center\n Needs More Management Oversight\n\n\nSeptember 18, 2013 Findings Continued\n\nObjective reimbursement requirement of Section 8111, Title 38, United States\n Code, \xe2\x80\x9cSharing of Department of Veterans Affairs and Department\nOur audit objective was to determine whether of Defense Health Care Resources.\xe2\x80\x9d Furthermore, without a mutual\nthe Master Sharing Agreement (MSA) and Joint solution between DoD and the Department of Veterans Affairs\nPolicies governing claims and reimbursement to address these longstanding problems, the burden of about\nbetween Department of Veterans Affairs $26.2 million in delinquent debt, $3.7 million in unbilled claims,\n(VA) and DoD for health care services at and $3.7 million in uncompensated care will continue to grow.\nTripler Army Medical Center (TAMC) were (See Appendix E for details on potential monetary benefits.).\noperating effectively.\n\n Recommendations\nFindings\n Among other recommendations, we recommend TAMC request the\nThe MSA and Joint Policies were not effective required waiver from the Under Secretary of Defense (Comptroller)\nto obtain timely reimbursement for health and elevate issues to U. S. Army Medical Command (MEDCOM);\ncare services provided. Specifically, the MEDCOM request DoD/VA Program Coordination Office to review\nMSA and Joint Policies did not comply with the reimbursement policy; and Assistant Secretary of Defense\nDoD Regulations, deliver an adequate (Health Affairs) require the DoD/VA Program Coordination Office\nauthorization process, or provide an effective present the issues cited to the appropriate levels within the Health\nmodification process to revise local policies. Executive Council for resolution.\nThese conditions contributed to $26.2 million\nout of $73.2 million in medical services\nprovided to Veterans Affairs Pacific Islands Management Comments\nHealth Care System beneficiaries from The Assistant Secretary of Defense (Health Affairs) comments\nFY 2009 through FY 2012 not being were partially responsive to the one recommendation. The Chief\nreimbursed, $3.7 million in claims not billed of Staff, MEDCOM, responding on behalf of the Commander,\nin accordance with DoD regulations, and MEDCOM, and Commander, TAMC, comments were responsive\nanother $3.7 million in uncompensated care. to 9 of 10 recommendations and partially responsive to 1 of 10\n recommendations. We request that the Secretary of Defense (Health\nThis occurred because DoD management did\n Affairs) and Chief of Staff, MEDCOM, provide revised comments to\nnot provide adequate oversight governing this\n the final by October 18, 2013. Please see the Recommendations\nJoint Venture. As a result of the ineffective MSA\n Table on the back of this page.\nand Joint Policies governing the interagency\nagreement, TAMC cannot ensure that the\nmilitary treatment facility can meet the\n\n\n\n\nVisit us on the web at www.dodig.mil\n\n\n DODIG-2013-135 (Project No. D2012-D000DA-0190.000) \xe2\x94\x82 i\n\x0c Recommendations Table\n Recommendations No Additional\n Management Requiring Comment Comments Required\n Assistant Secretary of Defense (Health Affairs) 3\n Commander, U.S. Army Medical Command 2.a, 2.b\n 1.a, 1.b, 1.c, 1.d, 1.f,\n Commander, Tripler Army Medical Center 1.e 1.g, 1.h\n\n\n *Please provide comments by October 18, 2013.\n\n\n\n\nii \xe2\x94\x82 DODIG-2013-135 (Project No. D2012-D000DA-0190.000)\n\x0c INSPECTOR GENERAL\n DEPARTMENT OF DEFENSE\n 4800 MARK CENTER DRIVE\n ALEXANDRIA, VIRGINIA 22350-1500\n\n September 18, 2013\n\nMEMORANDUM FOR ASSISTANT SECRETARY OF DEFENSE (HEALTH AFFAIRS)\n\t AUDITOR GENERAL, DEPARTMENT OF THE ARMY\n\nSUBJECT: The Department of Defense and Veteran Affairs Health Care Joint Venture at\n\t Tripler Army Medical Center Needs More Management Oversight\n\t (Report No. DODIG-2013-135)\n\nWe are providing this report for your review and comment. DoD management did not provide\nadequate oversight governing the Joint Venture at Tripler Army Medical Center. As a result,\nwithout a mutual solution between DoD and the Department of Veterans Affairs to address the\nlongstanding problems, the burden of about $26.2 million in delinquent debt, $3.7 million in\nunbilled claims, and $3.7 million in uncompensated care will continue to grow. During the audit,\nwe identified $33.6 million in potential monetary benefits that could be used to meet future\nrequirements. We considered management comments on a draft of this report when preparing\nthe final report.\n\nDoD Directive 7650.3 requires that recommendations be resolved promptly. The Assistant\nSecretary of Defense (Health Affairs) comments for Recommendation 3 were partially\nresponsive. Although we did redirect this recommendation, we request additional comments\non this recommendation by October 18, 2013. The Chief of Staff, U.S. Army Medical\nCommand, responding on behalf of the Commander, U.S. Army Medical Command, and\nCommander, Tripler Army Medical Center, agreed with recommendations 1.a, 1.b, 1.c, 1.d,\n1.f, 1.g, 1.h, and 2.a; however; comments on Recommendations 1.e were only partially\nresponsive. Although the Chief of Staff, U.S. Army Medical Command did not agree with\nrecommendation 2.b, we deemed his response on actions to be taken responsive. Therefore we\nrequest additional comments on Recommendation 1.e by October 18, 2013.\n\nIf possible, send a PDF file containing your comments to audcolu@dodig.mil. Copies of your\ncomments must have the actual signature of the authorizing official for your organization.\nWe cannot accept the /Signed/ symbol in place of the actual signature. If you arrange to\nsend classified comments electronically, you must send them over the SECRET Internet\nProtocol Router Network (SIPRNET).\n\nWe appreciate the courtesies extended to the staff. Please direct questions to me at (703) 601\xe2\x80\x915945\n(DSN 329-5945).\n\n\n\n\n\t Lorin T. Venable, CPA\n\t Assistant Inspector General\n\t Financial Management and Reporting\n\n\n\n DODIG-2013-135 \xe2\x94\x82 iii\n\x0c Contents\n Introduction\n Objective__________________________________________________________________________________________1\n Background_______________________________________________________________________________________1\n Review of Internal Controls_____________________________________________________________________3\n\n Finding. Inadequate Oversight of Policies Has\n Resulted in Rising Delinquent Interagency Debt_______________4\n Master Sharing Agreement and Joint Policies Contributed to Rising\n Delinquent Debt, Unbilled Claims, and Uncompensated Care _______________________________5\n Additional Management Oversight Is Needed_______________________________________________ 16\n Impact of Insufficient Oversight _____________________________________________________________ 19\n Management Comments on the Finding and Our Response________________________________ 20\n Recommendations, Management Comments, and Our Response__________________________ 21\n Management Comments on the Potential Monetary Benefits and Our Response_________ 29\n Management Comments on Internal Control Weaknesses_ ________________________________ 29\n\n Appendixes\n Appendix A. Scope and Methodology _ ______________________________________________________ 30\n Use of Computer-Processed Data _______________________________________________________ 32\n Use of Technical Assistance______________________________________________________________ 32\n Prior Coverage ___________________________________________________________________________ 33\n Appendix B. Tripler Army Medical Center Memo to\n Pacific Regional Medical Command Requesting Assistance________________________________ 34\n Appendix C. Pacific Regional Medical Command Memo to\n U.S. Army Medical Command Requesting Assistance_______________________________________ 35\n Appendix D. U.S. Army Medical Command Memo to\n Assistant Secretary of Defense (Health Affairs) Requesting Assistance___________________ 36\n Appendix E. Summary of Potential Monetary Benefits_____________________________________ 37\n\n Management Comments\n Assistant Secretary of Defense (Health Affairs) Comments________________________________ 38\n U.S. Army Medical Command Comments_____________________________________________________ 42\n\n Acronyms and Abbreviations______________________________________________ 48\n\niv \xe2\x94\x82 DODIG-2013-135\n\x0c Introduction\n\n\n\n\nIntroduction\nObjective\nOur objective was to determine whether the Master Sharing Agreement (MSA) and\nJoint Policies governing claims and reimbursement between Department of Veterans\nAffairs (VA) and DoD for health care services at Tripler Army Medical Center (TAMC)\nwere operating effectively. See Appendix A for the scope and methodology and prior\ncoverage related to the audit objective.\n\n\nBackground\nTripler Army Medical Center and the Joint Venture With\nthe Department of Veterans Affairs Pacific Island Health\nCare System\nTAMC, home of the Pacific Regional Medical Command (PRMC), is the only Federal\ntertiary care hospital in the Pacific Basin. TAMC supports 264,000 local active duty\nand retired military personnel, their families, and veteran beneficiaries. TAMC supports\nan additional 171,000 military personnel, family members, veteran beneficiaries,\nresidents of nine U.S. affiliated jurisdictions, and forward-deployed forces in more than\n40 countries throughout the Pacific.\n\nIn 1992, the Under Secretary of the Army signed the initial Joint Venture agreement\nbetween TAMC and Veterans Affairs Pacific Islands Health Care System (VAPIHCS).\nThe vision for the Joint Venture agreement is to be the model DoD/VA integrated\ncomprehensive health care system in the 21st century. According to the agreement,\nTAMC billed VAPIHCS for medical services totaling $18.7 million for FY 2009,\n$21.0 million for FY 2010, $18.2 million for FY 2011, and $15.3 million for FY 20121.\n\n\nRequirements for Health Care Resources\nSection 8111, Title 38, United States Code, \xe2\x80\x9cSharing of Department of Veterans Affairs\nand Department of Defense Health Care Resources,\xe2\x80\x9d January 5, 20092, states that the\nSecretary of VA and the Secretary of Defense will enter into agreements and contracts\nfor the mutually beneficial use or exchange of the health care resources of the VA\n\n\n\t1\t\n The values billed to VAPIHCS represent net billings as of October 1, 2012. An additional $2.8 million for FY 2011 through\n FY 2012 was billed to VAPIHCS for professional fees; however VAPIHCS was not required to pay these bills, pending\n resolution. Professional fees are categorized as charges for attending physicians, consulting physicians, or both.\n\t2\t\n The January 3, 2012, version of Section 8111, Title 38, United States Code contains the same language as the\n January 5, 2009, version.\n\n\n\n\n DODIG-2013-135\xe2\x94\x82 1\n\x0cIntroduction\n\n\n\n and DoD. The goal is to improve the access to, and quality and cost effectiveness of,\n the health care provided by the VA and the Military Health System to the beneficiaries of\n both Departments.\n\n Furthermore, reimbursement under any sharing agreement entered into is based\n on a methodology on which the two Secretaries agree. The methodology should\n provide appropriate flexibility to the heads of the facilities concerned, to take into\n account local conditions and needs and the actual cost to the providing agency\xe2\x80\x99s facility\n of the health care resources provided. Facilities that provided the care or services will\n receive the reimbursed funds. According to the agreements, an agency will be\n reimbursed for the cost of the health care resources provided. Furthermore, the rate\n for such reimbursement will be determined in accordance with the methodology on\n which the two Secretaries agree.\n\n\n DoD/VA Program Coordination Office\n The DoD Veteran Affairs Program Coordination Office (DVPCO) serves as the\n central entity within Health Affairs/TRICARE Management Activity to monitor all\n VA/DoD Health Care Resource Sharing activities, to include Health Information\n Management/Technology, Financial Management, Clinical Activities, National Level\n Interagency Agreements, TRICARE/VA Contractor Relationships, Joint Ventures, and\n Health Systems Studies. As of FY 2013, there were 10 Joint Ventures.\n\n\n National Agreements for Inpatient and Outpatient Billing\n Between DoD and VA\n Two memorandums establish the current national agreement between VA and DoD\n for inpatient and outpatient reimbursement rates. Both \xe2\x80\x9cDepartment of Veterans\n Affairs-Department of Defense Health Care Resource Sharing Rates\xe2\x80\x85\xe2\x80\x93\xe2\x80\x85Billing\n Guidance for Inpatient Services,\xe2\x80\x9d August 2006, and \xe2\x80\x9cOutpatient Billing Guidance for\n Department of Defense/Veterans Affairs Direct Sharing Agreements for Health Care,\xe2\x80\x9d\n August 2009, provide guidance on billing rates to be used for VA and DoD sharing\n agreements. Facilities are to bill services provided under the sharing agreements at\n the TRICARE/Civilian Health and Medical Program of the Uniformed Services\n maximum allowable charge rates less 10 percent, when a rate is available. Both\n memorandums further identify TAMC as a facility that can negotiate rates other\n than the 10-percent discount to reflect the value of nonmonetary contributions\n such as shared space or staff.\n\n\n\n\n2 \xe2\x94\x82 DODIG-2013-135\n\x0c Introduction\n\n\n\nMaster Sharing Agreement Between TAMC and VAPIHCS\nThe intent of the MSA effective January 1, 2008, through December 31, 2013, is to\nprovide an instrument for sharing all health care resources between VAPIHCS and\nTAMC where demand and capability exist, provided such sharing does not delay or\ndeny care to the primary population of each agency. The sharing agreement defines\neligibility for care, types of services available, responsibilities of both parties, and\nprocedures for development or modification of joint policies. Both the Commanding\nGeneral of TAMC and the Director of VAPIHCS signed and dated the sharing agreement.\n\n\nDoD Financial Management Regulation, Volume 4,\nChapter 3, \xe2\x80\x9cReceivables\xe2\x80\x9d\nDoD Regulation 7000.14-R, \xe2\x80\x9cDoD Financial Management Regulation\xe2\x80\x9d (DoD FMR),\nvolume 4, chapter 3, requires that \xe2\x80\x9creceivables must be recognized when corresponding\nrevenue is earned and collected when due.\xe2\x80\x9d In addition, regarding intragovernmental\nreceivables, DoD performing activities will not perform reimbursable work for another\nFederal Agency that is 90 days or more in arrears in payment of previous reimbursable\nbillings. The Office of the Under Secretary of Defense may waive this restriction if doing\nso is in the national interest.\n\n\nReview of Internal Controls\nDoD Instruction 5010.40, \xe2\x80\x9cManagers\xe2\x80\x99 Internal Control Program (MICP) Procedures,\xe2\x80\x9d\nJuly 29, 2010, requires DoD organizations to implement a comprehensive system of\ninternal controls that provides reasonable assurance that programs are operating\nas intended and to evaluate the effectiveness of the controls. We identified internal\ncontrol weaknesses associated with the MSA and Joint Policies governing claims and\nreimbursement between the Department of VA and DoD for health care services in\naccordance with DoD Instruction 5010.40. Commander TAMC, Commander U.S. Army\nMedical Command (MEDCOM), and Director DVPCO did not comply with regulations\nand policies to obtain timely reimbursement for health care services provided to\nVAPIHCS beneficiaries. We will provide a copy of the report to the senior official\nresponsible for internal controls in the Department of the Army.\n\n\n\n\n DODIG-2013-135\xe2\x94\x82 3\n\x0cFinding\n\n\n\n\n Finding\n Inadequate Oversight of Policies Has Resulted in Rising\n Delinquent Interagency Debt\n The MSA3 and Joint Policies governing claims and the reimbursement methodology\n were not effective to obtain timely reimbursement for health care services provided to\n VAPIHCS beneficiaries. Specifically, the MSA and Joint Policies did not:\n\n \xe2\x80\xa2\t comply with the DoD FMR,\n\n \xe2\x80\xa2\t deliver an adequate authorization process, or\n\n \xe2\x80\xa2\t provide an effective modification process to revise local policies.\n\n These conditions contributed to $26.2 million out of $73.2 million in medical services\n provided to VAPIHCS beneficiaries from FY 20094 through FY 2012 not being\n reimbursed, $3.7 million in unbilled claims, and $3.7 million in uncompensated\n care. This occurred because prior and current management at TAMC, MEDCOM, and\n DVPCO did not provide adequate oversight governing this joint venture. As a result,\n the policies governing the interagency agreement at TAMC have not ensured that\n the military treatment facility can meet the reimbursement requirement of\n Section 8111, Title 38, United States Code, \xe2\x80\x9cSharing of Department of Veterans Affairs\n and Department of Defense Health Care Resources.\xe2\x80\x9d Furthermore, without a mutual\n solution to address longstanding problems, the burden of about $26.2 million in\n delinquent debt, $3.7 million in unbilled claims; and $3.7 million in uncompensated\n care will continue to grow,5 which adversely affects TAMC\xe2\x80\x99s financial ability to\n continue providing the best quality care. Although the delinquent debt is still an\n issue, MEDCOM stated that VA had paid down the delinquent debt to $13.3 million as of\n March 15, 2013.\n\n\n\n\n 345\n\n\n\n \t3\t\n We examined the current MSA, effective from January 1, 2008, through December 31, 2013. We did not examine any\n earlier MSAs.\n \t4\t\n We chose to start our review with FY 2009 claims because it coincided with the implementation of Enhanced-Document\n and Referral Management System (E-DR).\n \t5\t\n As of February 19, 2013, TAMC reported $4.5 million in FY 2013 delinquent debt, with no payment to a FY 2013 claim\n made, and $611,409.83 in professional fees (see definition on page 14) that TAMC is required to bill, but VA is not required\n to pay, pending resolution.\n\n\n\n\n4 \xe2\x94\x82 DODIG-2013-135\n\x0c Finding\n\n\n\nMaster Sharing Agreement and Joint Policies\nContributed to Rising Delinquent Debt, Unbilled\nClaims, and Uncompensated Care\nThe MSA and Joint Policies were not effective to obtain reimbursement of health care\nservices provided to VAPIHCS beneficiaries from FY 2009 and FY 2012. The agreement\nintended to share health care resources between VAPIHCS and TAMC where demand\nand capacity exist, provided such sharing did not delay or deny care to the primary\npopulation of each agency. Joint policies such as Joint Policy #08-016, \xe2\x80\x9cClaims and\nPayments between TAMC and VAPIHCS,\xe2\x80\x9d March 2008; Joint Policy for Reimbursement\nFY 2012; and Joint Policy #08-020, \xe2\x80\x9cAuthorization Guidelines for Outpatient Care,\xe2\x80\x9d\nMarch 2008 supplement the MSA and act as the standard operating procedures of the\nJoint Venture. However, the MSA and the joint policies did not comply with DoD FMR,\ndeliver an effective authorization process, or provide an effective modification process.\n\n\nJoint Policy Compliance With DoD Financial\nManagement Regulation\nJoint Policy #08-016 was not effective to obtain timely reimbursement of $26.2 million\nor bill $3.7 million in health care services provided to VAPIHCS beneficiaries;\ntherefore, Joint Policy #08-016 did not comply with DoD FMR. Two systemic instances\nof noncompliance with DoD FMR policy existed within the Joint Policy and claims\nprocessing. First, the TAMC claims process was not in compliance with DoD FMR\nvolume 4, chapter 3, \xe2\x80\x9cReceivables\xe2\x80\x9d guidance regarding the requirement for payment\nfrom another Federal agency within 90 days. Second, TAMC did not record receivables\nappropriately. DoD FMR volume 4, chapter 3, \xe2\x80\x9cReceivables,\xe2\x80\x9d subsection 030102\nstates that receivables must be recognized when corresponding revenue is earned and\ncollected when due.\n\nJoint Policy #08-016 and the FY 2012 Joint Policy for Reimbursement require the\nprocessing of claims to start the day of patient discharge. Claims should then be\nsubmitted within 45 days and then paid within 90 days of submission; however this\nprocessing of claims did not occur for millions of dollars in services rendered. See\nFigure 1 for a claims processing timeline.\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 5\n\x0cFinding\n\n\n\n Figure 1. Claims Processing Timeframe\n\n\n Day 1: Patient Discharged\n\n\n\n\n Day 45: Claim should\n have been submitted\n\n\n\n\n Day 135: Payer will validate\n and certify Explanation of\n Bene\xef\xac\x81ts and submit payment\n\n\n\n Claims Were Not Reimbursed in a Timely Manner\n TAMC continued to provide services to VAPIHCS beneficiaries even though millions\n of dollars in reimbursements were in arrears. For claims from FY 2009 through\n FY 2011, TAMC\xe2\x80\x99s management provided documentation showing past due balances\n as of October 1, 2012, of $1.3 million for FY 2009, $4.6 million for FY 2010, and\n $9.0 million for FY 2011. These past due balances were all beyond the 90-day\n payment requirement within the DoD FMR. Total amount unpaid for FY 2012 was\n $11.3 million. Table 1 shows TAMC\xe2\x80\x99s account for VAPIHCS delinquent debt by\n fiscal year.\n\n Table 1. VAPIHCS Delinquent Debt as of October 1, 2012 (millions)\n Fiscal Year Net Billed Net Paid Unpaid\n FY 2009 $18.7 $17.5 $1.3\n FY 2010 21.0 16.3 4.6\n FY 2011 18.2 9.1 9.0\n FY 2012 15.3 4.0 11.3\n Totals $73.2* $46.9 $26.2\n\n *The total does not sum because of rounding.\n\n\n For the FY 2012 data provided, 15,207 unpaid claims valued at $6.1 million were more\n than 90 days in arrears as of October 11, 2012.\n\n\n\n\n6 \xe2\x94\x82 DODIG-2013-135\n\x0c Finding\n\n\n\nPaid claims were not reimbursed in a timely manner. For FY 2012,\nTAMC did not receive its first payment, valued at $25, Receipt of\nfrom VAPIHCS for services provided until May 2012, despite payments from\nbilling VAPIHCS for $9.4 million up to that point. We these 15 claims\n from VAPIHCS took\nreviewed fifteen paid claims valued at $575,336, and receipt\n an average of\nof payments for these 15 claims from VAPIHCS took an 159 days.\naverage of 159 days. For example, TAMC transmitted\nclaim 0052-12-0020751 to VAPIHCS on December 27, 2011.\nHowever, TAMC did not receive the $33,686 payment until August 10, 2012, 227 days\nafter transmittance.\n\nAs a result, TAMC was not in compliance with DoD FMR by continuing to perform\nreimbursable work for another Federal agency that was 90 days or more in arrears.\nTAMC management was aware of these unpaid balances and in the interest of\npatient safety knowingly disregarded the DoD FMR volume 4, chapter 3, requirement\nto terminate service because of payments in arrears to VAPIHCS. However,\nTAMC management stated that it was unaware of the requirement to obtain a waiver\nfrom the Office of the Under Secretary of Defense. TAMC management did not\nprovide adequate oversight in resolving this problem. TAMC management should\nrequest the waiver from the Office of the Under Secretary of Defense to continue\nproviding service to another agency more than 90 days in arrears and working\nwith VAPIHCS to resolve the delinquent debt in a reasonable amount of time.\n\n\nBilling and Recording Receivables\nTAMC management identified more than 14,000 claims for FY 2012, valued at\n$3.7 million, which had yet to be billed and recorded as a receivable in accordance with\nthe DoD FMR. TAMC personnel described these claims in two ways: claims containing\nbilling or coding errors and claims that were unauthorized. Table 2 illustrates\nthese claims.\n\nTable 2. FY 2012 Unbilled Claims\n Type Claims Amount*\n Unbilled \xe2\x80\x93 billing and coding errors 3,197 $ 242,475\n Unbilled \xe2\x80\x93 unauthorized 11,034 3,449,918\n Total 14,321 $ 3,692,392\n\n*The amounts are estimates, because the actual value of the claim cannot be computed until the\nclaim is recorded as a \xe2\x80\x9creceivable\xe2\x80\x9d and all applicable discounts are applied. The total does not sum\nbecause of rounding.\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 7\n\x0cFinding\n\n\n\n We reviewed 30 of the 14,321 claims; these 30 claims were valued at an estimated\n $1 million. We identified three problems with recording claims as a receivable when\n revenue was earned. First, TAMC management was not reviewing and correcting\n claims containing billing or coding errors in a timely manner. Second, TAMC\n management erroneously believed a VA authorization was a prerequisite to recording\n a receivable. Third, TAMC personnel disagreed internally about who was responsible\n to research and resolve claims containing authorization errors.\n\n Timely Review of Claims Containing Billing and Coding Errors. TAMC management\n did not adequately oversee the unbilled claims containing billing or coding errors,\n resulting in $242,474 in claims not being recorded as receivables in accordance\n with DoD FMR volume 4, chapter 3. We reviewed 15 claims, valued at $103,717,\n containing billing or coding errors. TAMC management stated that after our request to\n review the 15 claims, it assigned staff to begin researching, reviewing, and recording\n some of the claims as receivables. As Figure 1 shows, a claim should be submitted\n within 45 days of patient discharge. However, for these claims, the correction and\n recording of a receivable was performed in an untimely fashion. For example,\n Claim 0052-12-0018075 contained a discharge date of December 12, 2011. The claim\n was initially created on December 15, 2011, and was not recorded as a receivable\n until October 26, 2012, 316 days later. The claim, valued at $1,123, had an error code\n tied to it.\n\n Although TAMC had begun reviewing and correcting some of these errors for claims\n before our site visit, the reviewing and correcting were not performed in a timely\n fashion. The remainder of the claims containing billing or coding errors should be\n reviewed, researched, and correctly recorded as receivables.\n\n Recording Unauthorized Claims. TAMC management did not adequately oversee\n the unbilled unauthorized claims, resulting in $3,449,918 in claims not recorded as\n receivables in accordance with DoD FMR volume 4, chapter 3. We reviewed 15 claims,\n valued at $922,676, containing authorization errors. TAMC management stated that\n it misinterpreted a 2009 MEDCOM policy that stated that the accounts receivable\n will become recognizable when the bill or claim is invoiced. TAMC management\n erroneously believed that VA authorization was required to record a receivable.\n\n\n\n\n8 \xe2\x94\x82 DODIG-2013-135\n\x0c Finding\n\n\n\nInternal Disagreements. Furthermore, TAMC personnel\ndid not agree whether the billing department or The claim\n was initially\nthe authorization center was responsible for\n created on December\nresearching, reviewing, and correcting the claims 28, 2011, and as of our\ncontaining authorization errors. As a result of the site visit, October 30,\nmisinterpretation of guidance and internal 2012, a date 307 days\n later, had not yet been\ndisagreement, the claims remained unrecorded as recorded as a\na receivable. For example, Claim 0052-12-0023663 receivable.\ncontained a discharge date of November 15, 2011.\nThe claim was initially created on December 28, 2011, and\nas of our site visit, October 30, 2012, a date 307 days later, had not yet been recorded\nas a receivable. The claim, valued at $171,207, had an authorization error tied to it.\n\nInadequate management oversight caused claims to remain unbilled for extensive\nperiods of time. TAMC management needs to review, research, and record the\nunauthorized claims as receivables; revise the claims processing policy to comply\nwith DoD FMR; and identify the roles and responsibilities associated with the\nprocessing of claims.\n\n\nAuthorization Process Hinders Processing and Reimbursement\nThe joint policies did not deliver an adequate authorization process to perform\ntimely processing and reimbursement of claims for services provided to VAPIHCS\nbeneficiaries. Specifically, 11,034 claims, valued at $3.45 million, were unauthorized in\nFY 2012 as of October 11, 2012, because of missing authorizations or data quality\nproblems, which delayed reimbursement.\n\nIn September 2008, VAPIHCS awarded a contract to provide the Enhanced-Document\nand Referral Management System (E-DR) to both the VAPIHCS and TAMC. This system\nis composed of five modules, two of which are the Referral Management module and\nthe Billing Module Accounts Receivable Management System-Professional (ARMS-Pro).\nTAMC personnel use the ARMS-Pro module as their primary system to bill VAPIHCS\nbeneficiaries. The award not only granted VAPIHCS contract oversight over E-DR,\nwhich also included contract oversight over TAMC\xe2\x80\x99s billing module ARMS-Pro, but\nalso provided only VAPIHCS personnel and not TAMC personnel the administrative\nprivileges to approve authorization numbers needed to process claims within\nARMS-Pro. E-DR provides a method to match each VA authorization number or referral\nto the appointment. This process provides the users in both agencies increased\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 9\n\x0cFinding\n\n\n\n visibility to determine status of a particular claim, to include the proper authorization.\n E-DR reconciles patient information from the ARMS-Pro billing module against the\n E-DR Referral Management module to accurately account and bill VAPIHCS claims.\n Without a valid VAPIHCS authorization tied to a claim, claims failed to clear TAMC\xe2\x80\x99s\n E-DR ARMS-Pro billing module. See Table 3 for a detailed description of the reasons\n claims remained unauthorized.\n\n Table 3. FY 2012 Claims Remaining Unauthorized as of October 11, 2012\n Authorization Failure Code Number of Claims Amount (in millions)\n Missing Authorization Number 7,536 $1.35\n Data Quality 3,414 1.87\n Other 84 0.22\n Total 11,034 $3.45*\n\n *Total does not sum because of rounding.\n\n Claims Missing Authorizations\n For FY 2012, 7,536 claims valued at about $1.35 million were missing authorizations\n as of October 11, 2012. These claims encompassed outpatient care, urgent/emergent\n care, and inpatient care. Specific examples follow:\n\n \xe2\x80\xa2\t Outpatient Claims Were Missing Authorizations. For FY 2012,\n 5,470 outpatient claims, valued at $858,192, were missing an authorization as\n of October 11, 2012. Joint Policy #08-020 provides guidance and establishes\n procedures for obtaining authorization for care of eligible VAPIHCS\n beneficiaries referred for, or seeking, outpatient treatment at TAMC. The\n policy states that TAMC will provide outpatient care6 on a space-available\n basis to VA beneficiaries when referred and preauthorized. Furthermore,\n the Joint Policy for Claims and Payment between VAPIHCS and TAMC\n indicated that TAMC will bill services rendered on VA beneficiaries within\n 45 days of discharge. The E-DR subcontractor stated that outpatient claims\n that are missing an authorization primarily occur for the following two\n reasons: because the date of service falls outside the validity period for\n the authorization or because the clinic that provided treatment was not\n authorized. For example, control number 0052-12-0099217 identified\n a VAPIHCS beneficiary with an open authorization for cancer treatment\n\n\n \t 6\t\n Outpatient care is medical care or treatment that does not require an overnight stay in a hospital or medical facility, to\n include patients triaged as \xe2\x80\x9curgent\xe2\x80\x9d or \xe2\x80\x9cemergent.\xe2\x80\x9d\n\n\n\n\n10 \xe2\x94\x82 DODIG-2013-135\n\x0c Finding\n\n\n\n from December 2011 through May 2012. The next authorization began\n October 17, 2012; however, a pharmacy claim was identified on\n July 19, 2012, which fell outside the validity period for each authorization.\n As a result, the claim remained outstanding because TAMC officials\n indicated that VAPIHCS refused to back-date the authorization and\n reimburse TAMC for the pharmacy claim totaling $6,854.40. As of\n May 7, 2013, this claim remained unauthorized and not reimbursed.\n\n\xe2\x80\xa2\t Urgent/Emergent Claims Were Missing Authorizations. For FY 2012,\n 1,949 urgent/emergent claims, valued at $202,995, were missing an\n authorization as of October 11, 2012. Joint Policy #08-020 states that\n VA beneficiaries seeking emergency care at a TAMC clinic will be treated\n and that VAPIHCS will be notified within 5 business days through the\n TAMC VA Referral Center of the encounter. The VA Referral Center will\n seek retrospective authorization from VAPIHCS for services rendered.\n VA beneficiaries seeking emergency care at TAMC will be triaged by the\n emergency room physician. TAMC management provided data from\n January 2010 to August 2012 showing that receiving the retrospective\n authorization took on average 111 days. Whether TAMC failed to notify\n VAPIHCS of the emergency encounter or VAPIHCS failed to provide the\n authorization remains in question; however, the untimely authorizations\n negatively affected TAMC reimbursement for urgent/emergent services\n rendered to VAPIHCS beneficiaries.\n\n\xe2\x80\xa2\t Inpatient Claims Were Missing Authorizations, Because No Formal\n Requirement To Obtain Such Authorizations Existed. For FY 2012,\n 117 inpatient claims, valued at $292,263, were missing an authorization\n as of October 11, 2012. Unlike established guidance for outpatient\n services, established guidance to discuss inpatient services did not exist.\n Although no written guidance existed requiring a VAPIHCS authorization for\n inpatient care, the E-DR system required an authorization for a claim to be\n processed. As such, inpatient claims did not clear the E-DR authorization\n because one was not provided.\n\n\xe2\x80\xa2\t Claims for Services Rendered Missing Authorizations Were\n Deleted. In addition to the 7,536 claims missing authorizations,\n E-DR ARMS-Pro contractor, Benefit Recovery Inc., provided us with a list\n of an additional 617 claims from FY 2010 through FY 2012, worth about\n $56,267, which were deleted from E-DR. TAMC officials indicated that\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 11\n\x0cFinding\n\n\n\n VAPIHCS refused to provide an authorization for the services. As a result,\n TAMC management decided to delete these claims, despite service\n being rendered.\n\n To address the lack of authorizations for outpatient care, urgent/emergent care, and\n inpatient care, TAMC should request administrative privileges within E-DR to generate,\n adjust, or amend an authorization so that fewer claims would fall outside or between\n authorization periods and thereby elude reimbursement. These examples also present\n the possibility of endangering the patient\xe2\x80\x99s safety and health at TAMC because the\n burden of uncompensated care as a result of an ineffective authorization process limits\n resources and threatens TAMC\xe2\x80\x99s ability to care for all patients.\n\n TAMC should also not be expected to absorb the costs of care rendered in good faith and\n associated with treating VAPIHCS beneficiaries. TAMC management needs to revise the\n authorization policies to allow TAMC the ability to properly bill VAPIHCS for services\n rendered to beneficiaries, regardless of whether VAPIHCS provides an authorization.\n\n TAMC Management needs to reinstate the deleted claims and request from VAPIHCS\n an authorization, and if no authorization is received, bill VAPIHCS after 45 days for the\n services rendered.\n\n\n Data Quality Concerns Prevented Timely Processing of Thousands of Claims\n In FY 2012, of the 11,034 claims with authorization errors, 3,414 claims valued at\n $1.87 million contained data quality errors resulting in authorization failures as of\n October 11, 2012. These claims for services rendered to VAPIHCS beneficiaries contained\n data quality problems that prevented the claims from clearing the E-DR ARMS-Pro\n billing module and TAMC from receiving reimbursement. Examples of these errors\n include the following:\n\n \xe2\x80\xa2\t Missing Appointment Internal Entry Number Caused Authorization\n Failures. 2,354 urgent/emergent claims worth $78,632 resulted\n in authorization failure illustrated in E-DR as \xe2\x80\x9cInvalid Search Criteria\xe2\x80\x9d\n as of October 11, 2012. These authorizations failed to process the\n E-DR ARMS-Pro billing module because claims were missing the\n required appointment Internal Entry Number. According to TAMC officials,\n for the authorization to link all medical procedures performed on the\n patient during the approved authorization period, TAMC requires\n an appointment Internal Entry Number when building claims. TAMC\n Management stated that these errors occurred because TAMC Clinical\n\n\n\n\n12 \xe2\x94\x82 DODIG-2013-135\n\x0c Finding\n\n\n\n staff are not linking an appointment Internal Entry Number to the\n appropriate appointment. However, TAMC management did not research\n or correct these errors. TAMC Management needs to review these\n authorization failures more timely to ensure that the required Internal Entry\n Number is properly linked to the appointment.\n\n \xe2\x80\xa2\t Level of Care (LOC) Authorization Failures. TAMC failed to identify how\n LOC mismatch authorization errors7 negatively affected TAMC\xe2\x80\x99s ability to\n collect on inpatient episodes of care for 908 claims worth about $1.8 million\n in FY 2012 as of October 11, 2012. TAMC management indicated that\n LOC authorization failures occur for the following two reasons: either billing\n methodologies supplied by TAMC and VAPIHCS-Utilization Management\n nurses differ for each specific inpatient episode of care, or, because\n of inconsistent methodologies, the E-DR system provides inaccurate\n information when a patient transfers between different LOCs at TAMC.\n TAMC officials provided a system change request, dated October 28, 2010,\n approved in December 2011, to correct this calculation in E-DR. These\n situations occurred because Joint Policy #08-020 for authorizations failed\n to standardize a shared methodology. TAMC Management needs to\n establish a standardized shared methodology when calculating inpatient\n LOC days under the interagency sharing agreement.\n\n \xe2\x80\xa2\t Social Security Number and Date of Birth Errors. We identified 152 claims\n as of October 11, 2012 that remained outstanding, totaling $33,759, because\n of social security number and date of birth errors, resulting in authorization\n failures. TAMC Management was not able to determine why such errors\n remained unprocessed in the ARMS-Pro billing module; however, TAMC\n Management indicated that these errors may occur from TAMC personnel\n making transposition errors when entering patient information in their\n systems. TAMC Management needs to review these authorization failures\n more timely to ensure the data input accuracy and correct the 152 errors for\n social security number and date of birth\n\nModification Process To Revise Local Policies\nThe MSA and joint policies did not provide an effective policy modification process,\nwhich prevented timely reimbursement for care provided to VAPIHCS beneficiaries.\nThe MSA outlines the process to modify existing joint policies. TAMC officials must\n\n\n\t 7\t\n LOC mismatch authorization errors occur when the sum of the individual duration of Levels of Care do not add up to the\n total stay.\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 13\n\x0cFinding\n\n\n\n submit, in writing and with an accompanying justification, all modification requests\n to the TAMC Joint Venture Office. TAMC personnel stated that the responsibility to\n maintain, update, and modify the MSA and joint policies, on behalf of TAMC, resides\n with the TAMC Joint Venture office. The Joint Venture Office Coordinator facilitates\n revisions on updates before presenting the requests to the Joint Business Working\n Group and to the Joint Venture Steering Group8 for their approval. The modification\n becomes effective after the Joint Venture Steering Group approves and receives\n signatures from both agencies. However, when the two parties have not agreed, the\n results have been delays in modification, no changes at all, and sometimes, unfair\n financial advantage for VAPIHCS.\n\n Disagreements between TAMC and VAPIHCS have prevented necessary modifications\n and changes to the reimbursement methodology and have contributed to $3.7 million\n in uncompensated care. An example of a repeatedly delayed and poorly negotiated\n policy at the center of disagreement between TAMC and VAPIHCS is the Joint Policy\n for Reimbursement. The Joint Policy for Reimbursement is to be updated annually\n between the two agencies and is intended for the purpose of tracing the financial\n obligations relating to the provision of patient care and other services exchanged\n between VAPIHCS and TAMC. Table 4 illustrates the delays in reimbursement\n methodology approval from the start of fiscal years.\n\n Table 4. Delays in Reimbursement Methodology Approval\n Fiscal Year Date Approved Days Since Start of FY (Oct 1)\n FY 2009 February 20, 2009 142\n FY 2010 December 15, 2009 75\n FY 2011 June 21, 2011 263\n FY 2012 December 27, 2011 87\n Not Approved as of\n FY 2013 231\n May 20, 2013\n\n\n The delays are proving costly for TAMC. TAMC\xe2\x80\x99s Joint Venture Office Coordinator\n has recently attempted to revise portions of the policy for FY 2013 to remove what\n TAMC management felt were unfair financial benefits to VAPIHCS. Changes included\n revising the requirement to bill and not pay professional fees, establishing definitive\n policy regarding medical coding, and removing the Fee Based Claims System (FBCS)\n through which VAPIHCS is processing TAMC claims. Specifically:\n\n\n \t8\t\n Both the Joint Business Working Group and Joint Venture Steering Group are composed of representatives from both TAMC\n and VAPIHCS management.\n\n\n\n\n14 \xe2\x94\x82 DODIG-2013-135\n\x0c Finding\n\n\n\n\xe2\x80\xa2\t Professional Fees. Beginning in FY 2010, the Reimbursement Methodology\n stated, \xe2\x80\x9cprofessional charges for attending and/or consulted physicians\n will be billed but not be required to be paid by VAPIHCS pending resolution\n between the TAMC Chief of Staff and the VAPIHCS Associate Director.\xe2\x80\x9d TAMC\n Management was able to quantify for FY 2011 through FY 2013 the cost of\n professional charges at $3.7 million, while still awaiting resolution. For the\n Draft FY 2013 Reimbursement methodology, however, TAMC management\n revised the statement, removing the \xe2\x80\x9cnot required to pay\xe2\x80\x9d portion.\n\n\xe2\x80\xa2\t Medical Coding Disagreements. Many times, the Draft FY 2013\n Reimbursement Methodology, identifies that DoD follows the Military\n Health System Guidelines for coding inpatient and outpatient care. Although\n not able to quantify how many claims have been denied by VAPIHCS\n because of medical coding disagreements, TAMC management expressed\n concernswith the differences in the coding methodologies that the\n joint partners use. Specifically, TAMC management shared a VAPIHCS\n report that stated a lack of confidence in TAMC\xe2\x80\x99s coding abilities and\n its reluctance to pay claims without prior review. Furthermore, the\n TAMC Joint Venture Coordinator stated that VAPIHCS management\n stated that TAMC was engaging in fraudulent billing practices.\n\n\n In response to VAPIHCS, TAMC requested that MEDCOM perform a coding\n review. The review found no patterns or trends to support fraudulent billing\n practices. Also, VAPIHCS did not use the Military Health System Coding\n guidelines as binding guidance for the review, which is stipulated in the\n sharing agreement.\n\n\xe2\x80\xa2\t Claims Subject to FBCS. Within the Draft FY 2013 Reimbursement\n Methodology, TAMC management attempted to add a section stating,\n \xe2\x80\x9cfor Joint Venture claims from TAMC, all claims will be processed and paid\n without being subject to FBCS edits. Reconciliation of claims and application\n of these audits will be performed post payment.\xe2\x80\x9d TAMC personnel stated\n that FBCS is a new system through which VAPIHCS processes claims;\n however; FBCS was never approved within the Joint Venture. Although not\n able to quantify the dollar value of claims denied by VAPIHCS processing\n claims through FBCS, TAMC staff expressed numerous concerns with this\n system. These concerns included the numerous denials FBCS is producing\n because of VA processing errors and the waste of resources occurring when\n denials are printed and sent through the U.S. Postal Service instead of using\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 15\n\x0cFinding\n\n\n\n the E-DR contracted system. Figure 2 illustrates the denials that TAMC\n has received from FBCS at the time of our site visit on October 30, 2012, and\n a photo provided by TAMC personnel as of February 27, 2013 (estimated\n to now be more than 5,000).\n\n Figure 2. FBCS Denials Mailings\n\n\n\n\n As of October 30, 2012 As of February 27, 2013\n\n\n\n The TAMC Joint Venture Office Coordinator stated that because of these proposed\n changes, among others, VAPIHCS will not sign the draft into current policy and the\n prior year (FY 2012) Joint Policy for Reimbursement remains in effect. As a result, the\n financial benefits of professional fees that are billed but not paid favor VAPIHCS and\n are at a cost to TAMC of about $3.7 million. In addition, VAPIHCS is inappropriately\n denying thousands of claims because of medical coding concerns and a new processing\n system. Because of the magnitude of problems identified in FY 2012 and FY 2013,\n TAMC management needs to immediately elevate to MEDCOM and Health Affairs a\n request to review this reimbursement policy regarding the additional financial benefits\n provided to VAPIHCS, coding disagreements, the use of FBCS in denying TAMC claims,\n and the delays in achieving approval by both parties.\n\n\n Additional Management Oversight Is Needed\n The MSA and Joint Policies for reimbursement, claims and payment and authorizations\n were ineffective to obtain timely reimbursement for services rendered to VAPIHCS\n beneficiaries. This occurred because the Commander at TAMC, Commander at\n MEDCOM, and Director of DVPCO did not provide adequate oversight to the\n Joint Venture relationship. Management at these levels had been aware of the many\n problems presented within this report and the rising delinquent debt since 2010\n without adequately attempting to resolve the longstanding problems with VAPIHCS.\n\n\n16 \xe2\x94\x82 DODIG-2013-135\n\x0c Finding\n\n\n\nOversight Was Insufficient by Prior TAMC Leadership\nThe prior Commanding General of TAMC was also the Commanding General of the\nPRMC. He oversaw operations at TAMC and PRMC from May 25, 2010, through\nOctober 3, 2012. During his tenure, both he and his staff were made aware of these\nlongstanding problems. Also, they implemented inadequate policies, as well as had\nopportunities presented to them by staff to resolve these problems and potentially\nimprove processes. As of October 1, 2012, TAMC management reported that VAPIHCS\nwas delinquent by $26.2 million for services provided from FY 2009 through FY 2012.\nTAMC management has, without success, routinely tried to resolve these issues at the\nlowest levels to properly be reimbursed for services rendered.\n\n\nLack of an Operational Dispute Resolution Process at TAMC\nThe dispute resolution process is not working effectively for the Joint Venture.\nJoint Policy #08-16 lays out a seven-level dispute resolution process to be used to resolve\nclaims when they are not paid or when there is a question about the payment amount.\nThe policy requires that problems not resolved in a timely manner be elevated from\nTAMC management up to the Commander, MEDCOM, and Assistant Secretary of\nDefense (Health Affairs).\n\nThe inadequate oversight of the dispute resolution process at TAMC has allowed\nmillions of dollars in claims to remain unresolved, despite years of promises by\nVAPIHCS personnel that the problems would be solved. Examples of the claims\nthat remained in dispute include claims denied because of coding errors and claims\nbeing processed and denied within the FBCS system. The prior Commanding General\nat TAMC did not take timely action to elevate these concerns in accordance with local\nJoint Policy. After the prior commanding general\xe2\x80\x99s departure, TAMC and PRMC\nofficially elevated these concerns to MEDCOM (see Appendixes B and C), despite years\nof communication regarding the delinquent debt. TAMC management must elevate\nconcerns in a timelier manner in accordance with Joint Venture policies.\n\n\nMissed Opportunity To Improve the Authorization Process\nThe authorization process under the interagency sharing agreement allowed\nVAPIHCS to manipulate TAMC reimbursements. This occurred because VAPIHCS\nmaintained oversight of the E-DR contract, which allowed VAPIHCS the authority\nonly to generate an authorization number for each episode of care. As a result of this\nsituation, TAMC lacked the authority to obtain reimbursement from VAPIHCS when\na VAPIHCS-approved authorization number remained untimely or absent. TAMC\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 17\n\x0cFinding\n\n\n\n management previously attempted to take appropriate action to bring the\n E-DR ARMS-Pro billing module in house by submitting a contract request. Bringing\n the E-DR ARMS-Pro billing module in house would have allowed TAMC to generate\n the necessary authorizations, along with providing oversight to a DoD process,\n while saving $126,400 annually.9 The request was approved on behalf of the\n commanding general in FY 2012; however, the decision was never implemented.\n TAMC management was unable to explain why the contract request was never\n fulfilled. TAMC management must work withMEDCOM to obtain contract oversight\n over the ARMS-Pro billing system with E-DR, thus allowing TAMC the needed\n administrative privileges over a DoD process\n\n\n U.S. Army MEDCOM Oversight by Prior Leadership\n U.S. Army Medical Command serves as the Major Command for both the PRMC and\n TAMC, and level seven in the dispute resolution process. MEDCOM should have elevated\n these concerns to achieve resolution between TAMC and VAPIHCS.\n\n U.S. Army Medical Command personnel have long been aware of the problems\n presented by TAMC. MEDCOM provided a timeline of its actions regarding the delinquent\n debt dating back to 2008, but those actions have not been sufficient to resolve the\n problems. When we addressed these concerns to the Chief of Staff at MEDCOM, he\n stated that he should have done more to intervene and resolve these problems. During\n the course of our review, the Chief of Staff took official action in December 2012 to send\n a memo to the Assistant Secretary of Defense (Health Affairs) requesting assistance\n with the VAPIHCS billing problems. (See Appendix D.) On March 15, 2013, MEDCOM\n stated that VA had paid down the delinquent debt to $13.3 million.\n\n Although these are steps in the right direction, MEDCOM did not take appropriate\n actions to assist in a timely manner and must continue elevating these concerns until all\n delinquent debt, unbilled claims, uncompensated care, and denial issues are resolved.\n\n\n TRICARE Management Activity Oversight\n One of the objectives of the DVPCO is to serve as the central entity within Health Affairs/\n TRICARE Management Activity to monitor all VA/DoD Health Care Resource Sharing\n activities, to include Financial Management and Joint Ventures. The DVPCO provides\n administrative and operational support to the Health Executive Council, which is\n\n \t9\t\n The TAMC Uniform Billing Office identified a contract savings of $126,400 by streamlining its ARMS-Pro billing services with\n existing services already provided to Korea and Japan.\n\n\n\n\n18 \xe2\x94\x82 DODIG-2013-135\n\x0c Finding\n\n\n\ncomposed of senior officials (to include Assistant Secretary of Defense [Health Affairs],\nSurgeon General of the Army, and Deputy Assistant Secretary of Defense [Health Budgets\nand Financial Policy]), whose responsibilities include overseeing working groups\nand identifying opportunities to enhance mutually beneficial coordination.\n\nThe Health Executive Council oversees the Financial Management Working Group, whose\nresponsibilities include reviewing reimbursement policies and identifying policies\nrequiring modification and clarification, developing recommendations for improving\nfinancial processes and practices, and resolving billing and\nreimbursement problems.\n\n The Director\nThe Director of DVPCO referred to these problems as DVPCO \xe2\x80\xa6 stated that\n\xe2\x80\x9clocal Army problems\xe2\x80\x9d that his office will not resolve his office has been aware\nbecause these problems are not seen as systemic of the issues at TAMC for\n quite some time, but because\nacross all Joint Ventures. He also stated that\n no one has \xe2\x80\x9cformally\xe2\x80\x9d\nhis office has been aware of the problems at TAMC requested the office\xe2\x80\x99s\nfor quite some time, but because no one has assistance, his office has\n\xe2\x80\x9cformally\xe2\x80\x9d requested the office\xe2\x80\x99s assistance, not intervened.\nhis office has not intervened. The current billing\nand reimbursement problems date back to 2008. For\nyears, TAMC management has been requesting help from MEDCOM and DVPCO.\nTAMC staff provided documentation showing it has attempted to elevate the\nbilling problems to DVPCO starting in 2010. There is no requirement for a \xe2\x80\x9cformal\xe2\x80\x9d\nrequest to be a prerequisite of DVPCO involvement when the two agencies cannot\nagree. DVPCO management consistently maintained that these are local problems\nand refused to engage, despite billing and reimbursement problems being a\nresponsibility of the Health Executive Council Financial Management Working Group.\nThis is an example of the need for proactive management by DVPCO. DVPCO should\npresent billing and reimbursement problems to the Health Executive Council Financial\nManagement Working Group for resolution and develop and action plan to improve\ntimely reimbursements for TAMC.\n\n\nImpact of Insufficient Oversight\nWith the lack of sufficient oversight from the former TAMC Commander, Chief of Staff\nMEDCOM, and Director DVPCO, the burden of about $26.2 million in delinquent\ndebt, $3.7 million in unbilled claims, and $3.7 million in uncompensated care will\ncontinue to grow. Furthermore, the policies governing the Joint Venture and the\ndelinquent debt have not ensured that the military treatment facility can meet the\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 19\n\x0cFinding\n\n\n\n reimbursement requirement of Section 8111, Title 38, United States Code, which\n states that an agency will be reimbursed for the cost of health care resources provided.\n TAMC needs to initiate action to submit the $3.7 million in unbilled claims, $3.7 million\n in billed professional fees, and $56,267 in deleted authorization claims. MEDCOM and\n the DVPCO must take immediate action to resolve the longstanding issue of TAMC not\n being reimbursed for the medical care provided to VAPIHCS beneficiaries.\n\n\n Management Comments on the Finding and\n Our Response\n Management Comments\n The Assistant Secretary of Defense (Health Affairs) generally concurred with the report\xe2\x80\x99s\n findings and conclusions. However, he submitted general comments stating that it\n was unclear how the delinquent debt will continue to grow because VA has reduced\n the debt by 50 percent during the course of the audit. Additional comments also\n included the DVPCO did identify and work within its means to identify resolutions for\n TAMC reimbursement issues by identifying improvements in the Consolidated DSS\n Final Report dated July 2008, which was provided to the Health Executive Council. He\n also stated that the Health Executive Council is separate and above the DVPCO, which\n provides administrative and operational support to the Health Executive Council.\n And finally, the Assistant Secretary of Defense (Health Affairs) stated that the DVPCO\n has limited authority to involve itself in the operational issues occurring at the unit\n level to resolve the reimbursement issues at TAMC.\n\n\n Our Response\n We considered the Assistant Secretary of Defense (Health Affairs) general comments\n to the final report. We did revise the statement within the report to note the DVPCO\n provides administrative and operational support to the Health Executive Council. With\n regards to his other general comments, the following are our comments. Although\n VA has paid down debt, the paying down of debt does not mean that the weaknesses\n that contributed to the debt, from both DoD and VA, have been resolved. Implementation\n of the recommendations made to TAMC and MEDCOM will help resolve some of\n these concerns; however department level assistance will be required to resolve the\n longstanding problems between TAMC and VAPIHCS.\n\n\n\n\n20 \xe2\x94\x82 DODIG-2013-135\n\x0c Finding\n\n\n\nThe Consolidated DSS report in reference is from July 2008, before the implementation\nof E-DR. A subsequent solution was developed through the use of E-DR; however, issues\nidentified within this report stem from the system and contract. Furthermore, the\nrising delinquent debt reviewed in the report was from 2009 through 2012 and does\nnot support improvements made to the revenue cycle process between the joint venture\npartners since 2008.\n\nFinally, we agree with the importance of the military chain of command; however,\nneither MEDCOM nor TAMC have authority over VAPIHCS. When joint venture\npartners reach impassable roadblocks, the issues need to be elevated to the DVPCO for\nassistance, and possibly presented to the Financial Management Working Group.\nMEDCOM provided evidence to show attempts to get assistance from the DVPCO,\nwith no resolution/assistance provided as such issues continue to be problematic, and\ndelinquent debt continues to rise.\n\n\nRecommendations, Management Comments, and\nOur Response\nRedirected Recommendation\nAs a result of management comments, we redirected Recommendation 3 to the\nAssistant Secretary of Defense (Health Affairs) which has the authority to implement\nthe recommendation.\n\n1. We recommend the Commander, Tripler Army Medical Center:\n\n a.\t Request the required waiver from the Office of the Under Secretary\n of Defense in accordance with DoD Financial Management Regulation\n volume 4, chapter 3.\n\nManagement Comments\nThe Chief of Staff, MEDCOM, responding for the Commander, TAMC, agreed, stating\nthe waiver will request permission for TAMC to continue to provide services to\nVA beneficiaries even through reimbursements continue to be in arrears. Submission of\nthe waiver will commence August 1, 2013.\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 21\n\x0cFinding\n\n\n\n Our Response\n Comments from the Chief of Staff, MEDCOM, were responsive. Command did provide\n a copy of the waiver request, initially submitted on May 1, 2013. No further\n comments are required.\n\n b. Review, research, and correct the unbilled claims containing billing\n and coding errors and claims containing authorization errors to\n comply with DoD Financial Management Regulation volume 4,\n chapter 3, by recording the unbilled claims as receivables.\n\n Management Comments\n The Chief of Staff, MEDCOM, responding for the Commander, TAMC, agreed, stating\n that TAMC\xe2\x80\x99s Uniform Business Office is identifying billing discrepancies, correcting\n computer logic, and reprocessing claims of all prior years. Currently, the focus is on\n FY 13 claims. Staffing shortages and furlough will significantly impact the timeline for\n both the Joint Venture Office and Uniform Business Office. Review and correction of\n FY 13 bills should be complete by December 31, 2013, and the remainder by\n September 30, 2014.\n\n\n Our Response\n Comments from the Chief of Staff, MEDCOM, were responsive. No further comments\n are required.\n\n c.\tRevise the Joint Policy #08-016 for Claims and Payment to comply\n with DoD Financial Management Regulation volume 4, chapter 3.\n\n Management Comments\n The Chief of Staff, MEDCOM, responding for the Commander, TAMC, agreed, stating\n that on July 10, 2013, the Joint Business Working Group discussed Joint Policy #08-016\n for Claims and Payment and agreed on the importance of updating the policy. TAMC\n will request assistance and guidance from MEDCOM if problems are encountered during\n the update process. A draft policy is anticipated to be submitted to the Joint Venture\n Steering Group on August 20, 2013, and a final version will be sent to MEDCOM by\n September 30, 2013.\n\n\n\n\n22 \xe2\x94\x82 DODIG-2013-135\n\x0c Finding\n\n\n\nOur Response\nComments from the Chief of Staff, MEDCOM, were responsive. Command stated\nthe Coding and Billing subgroup requested an extension to present the draft policy,\nwhich was granted. Therefore, it will be presented at the next monthly meeting.\nNo further comments are required.\n\n d.\tEstablish written procedures on roles and responsibilities for staff to\n research, review, and correct claims containing errors.\n\nManagement Comments\nThe Chief of Staff, MEDCOM, responding for the Commander, TAMC, agreed, stating\nthat TAMC will develop staff roles and responsibilities related to the revenue cycle,\nincluding VA Referral center contact representatives/utilization management\nregistered nurses (authorization/consult approval); clinical frontline medical service\nassistants; coders; and Uniform Billing Office and Accounts Receivable staff. This\ninformation will be included in a Standard Operating Procedure to be presented to the\nTAMC Center Joint Venture working team for approval on October 7, 2013. Additionally,\nTAMC instituted quarterly training on how to identify dual-eligible patients and a\nVA referral, as well as tips for booking the beneficiaries and entering the authorization.\n\n\nOur Response\nComments from the Chief of Staff, MEDCOM, were responsive. No further comments\nare required.\n\n e.\t Update the Joint Policy #08-020 for Authorization to:\n\n (1)\tGrant administrative privileges within Enhanced-Document and\n Referral Management System to Tripler Army Medical Center\n management to generate, adjust, or amend an authorization.\n\n (2)\tAllow Tripler Army Medical Center the ability to properly bill\n Veterans Affairs Pacific Islands Health Care System for services\n rendered to its beneficiaries, regardless of whether Veterans Affairs\n Pacific Islands Health Care System provides an authorization.\n\n (3)\tStandardize a shared methodology when calculating inpatient\n Level of Care days under the interagency sharing agreement.\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 23\n\x0cFinding\n\n\n\n Management Comments\n The Chief of Staff, MEDCOM, responding for the Commander, TAMC, disagreed,\n stating that TAMC is unable to grant administrative privileges within the E-DR because\n that function is controlled by VAPIHCS. TAMC will request VAPIHCS to grant\n administrative privileges to TAMC management personnel, but cannot ensure\n agreement from VAPIHCS. The request will be made during an August 2013\n Joint Business Working Group meeting.\n\n In addition, it is inconsistent with regulatory guidance to allow TAMC to bill\n VAPIHCS for services rendered without proper authorization. Army Regulation 40-400,\n paragraph 3-23a(2) states that Army Military Treatment Facilities will furnish medical\n care to a veteran on the basis of an authorization for treatment from the field station\n having jurisdiction. Reimbursement will not be made by the VA for medical care\n furnished before the effective date of the authorization, except in emergency\n medical care.\n\n Finally, the shared methodology for calculating inpatient LOC days has been\n implemented. The contractor indicated that the most current business rules are loaded\n in the VA Authorization Check Web Service, which pulls data from the Referral\n Management Inpatient Module of E-DR and performs the LOC duration calculations.\n\n\n Our Response\n Comments from the Chief of Staff, MEDCOM, were partially responsive. If VAPIHCS\n refuses to grant administrative privilege, TAMC\xe2\x80\x99s ability to properly bill VAPIHCS\n can be achieved only from actions taken from MEDCOM\xe2\x80\x99s response to\n Recommendation\xe2\x80\x842.b. Therefore if actions taken in Recommendation\xe2\x80\x842.b are\n implemented, this needs no further action.\n\n Based on Army Regulation 40-400, TAMC has the ability to (1) deny services to VAPIHCS\n beneficiaries when an authorization for such care has not been received, or (2) collect\n locally from the veteran concerned. TAMC officials stated that the political fallout\n associated with denying services or locally billing VAPIHCS beneficiaries did not serve\n in the best interest of the sharing agreement. We agreed with this logic and believe\n these expectations were overstated and not viable options that served in the best\n interest of the sharing agreement. The goal is to improve access, quality, efficiency, and\n effectiveness of health care provided by the Military Health System and Veterans Health\n Administration to their respective beneficiaries as outlined in DoD Instruction 6010.23,\n \xe2\x80\x9cDoD and Department of Veteran Affairs (VA) Health Care Resource Sharing Program,\xe2\x80\x9d\n\n\n\n\n24 \xe2\x94\x82 DODIG-2013-135\n\x0c Finding\n\n\n\ndated January 23, 2012. Therefore, we ask the Chief of Staff, MEDCOM, to provide further\ndetail in response to the final report, on how to improve the authorization process\nbetween VAPIHCS and TAMC by October 18, 2013.\n\nComments from the Chief of Staff, MEDCOM, were responsive regarding LOC days\nunder the sharing agreement. No further comments are required.\n\n f.\tReinstate the deleted claims and process the claims to Veterans\n Affairs Pacific Islands Health Care System for reimbursement of\n services rendered.\n\nManagement Comments\nThe Chief of Staff, MEDCOM, responding for the Commander, TAMC, agreed, stating\nthat the Joint Venture Office requested a list from the billing contractor and will review\nthe list of claims deleted for straight K61 beneficiaries (straight K61 beneficiaries are\nVA beneficiaries) and reprocess valid claims. VAPIHCS indicated that it will not process\nany retrospective authorizations for any period of time until it receives guidance from\nthe Veterans Integrated Service Network. TAMC will request assistance and\nguidance from MEDCOM, if necessary, but anticipates action will be complete by\nDecember 31, 2013.\n\n\nOur Response\nComments from the Chief of Staff, MEDCOM, were responsive. No further comments\nare required.\n\n g.\tReview authorization failures more timely to ensure \xe2\x80\x9cInternal Entry\n Number\xe2\x80\x9d is properly linked to the appropriate appointment and the\n accuracy of data input. Claims containing authorization errors need\n to be resolved and processed.\n\nManagement Comments\nThe Chief of Staff, MEDCOM, responding for the Commander, TAMC, agreed, stating\nthat TAMC is reviewing options to address this recommendation, including hiring\nadditional staff or making changes to E-DR to automate linkage of authorizations to the\ninternal entry number to address this issue. Because of sequestration, we anticipate\naction will be complete by December 31, 2014.\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 25\n\x0cFinding\n\n\n\n Our Response\n Comments from the Chief of Staff, MEDCOM, were responsive. No further comments\n are required.\n\n h.\tElevate to U.S. Army Medical Command a request to review the\n reimbursement policy regarding the additional financial benefits\n provided to Veterans Affairs Pacific Islands Health Care System,\n coding disagreements, the use of Fee Based Claims System in denying\n Tripler Army Medical Center claims, and the delays in achieving\n approval by both parties. Additionally, Tripler Army Medical Center\n must elevate all unresolved recommendations (1.a to 1.h) in a timely\n manner to the U.S. Army Medical Command if Tripler Army Medical\n Center and Veterans Affairs Pacific Islands Health Care System\n management fail to achieve a negotiated solution.\n\n Management Comments\n The Chief of Staff, MEDCOM, responding for the Commander, TAMC, agreed, stating that\n TAMC will elevate to MEDCOM requests to review the reimbursement policy regarding\n additional financial benefits and unresolved recommendations in a timely manner.\n He also stated VAPIHCS controls the Fee Based Claims System and informed TAMC\n that VA Central Office denied a request to bypass the system for Joint Venture\n claims. TAMC will elevate this issue to MEDCOM. These actions will be completed by\n December 31, 2013.\n\n\n Our Response\n Comments from the Chief of Staff, MEDCOM, were responsive. No further comments\n are required.\n\n 2. We recommend that the Commander, U.S. Army Medical Command\n\n a.\t Elevate to DoD/Veterans Affairs Program Coordination Office a\n request to review the reimbursement policy regarding the additional\n financial benefits provided to Veterans Affairs Pacific Islands Health\n Care System, coding disagreements, the use of Fee Based Claims System\n in denying Tripler Army Medical Center claims, and the delays in\n achieving approval by both parties.\n\n\n\n\n26 \xe2\x94\x82 DODIG-2013-135\n\x0c Finding\n\n\n\nManagement Comments\nThe Chief of Staff, MEDCOM, responding for the Commander, MEDCOM, agreed,\nstating that as a follow up to the December 17, 2012, memorandum to the Assistant\nSecretary of Defense (Health Affairs), MEDCOM will request further assistance from\nAssistant Secretary of Defense (Health Affairs) to resolve the remaining TAMC-VAPIHCS\nbilling issues. Numerous meetings did occur between January and March 2013,\nand although some progress occurred, Department-level assistance is still required and\nwill be requested by August 31, 2013.\n\n\nOur Response\nComments from the Chief of Staff, MEDCOM, were responsive. No further comments\nare required.\n\n b.\tDirect Tripler Army Medical Center obtain contract oversight over\n the Accounts Receivable Management System-Professional billing\n system with Enhanced-Document and Referral Management System.\n This authority would allow Tripler Army Medical Center the needed\n administrative privileges over a DoD process.\n\nManagement Comments\nThe Chief of Staff, MEDCOM, responding for the Commander, MEDCOM, disagreed,\nstating that TAMC cannot unilaterally obtain oversight for the current contract\nwithout obtaining consent from VAPICHS. However, MEDCOM will direct TAMC to\nofficially request administrative privileges for the ARMS-Pro and E-DR.\n\nHe further stated that if the VAPIHCS will not allow access, MEDCOM will direct\nU.S. Army Pacific Regional Medical Command to execute a contract line item number\nunder the current contract for ARMS-Pro used in Korea and Japan. Executing the\ncontract line item number will enable TAMC to recognize receivables when\ncorresponding revenue is earned in accordance with DoD FMR, Volume 4,\nchapter 3. Additionally, executing the contract line item number will be an\ninterim solution until deployment of the Armed Forces Billing and Collection\nUtilization Solution. Once deployed, the Armed Forces Billing and Collection Utilization\nSolution will be the Army\xe2\x80\x99s billing platform, and TAMC will be required to use the\nArmed Forces Billing and Collection Utilization Solution billing process. Full deployment\nof the Armed Forces Billing and Collection Utilization Solution is expected by\nDecember 31, 2014.\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 27\n\x0cFinding\n\n\n\n Our Response\n Comments from the Chief of Staff, MEDCOM, were responsive. Although the Chief\n of Staff, MEDCOM, did not agree with the recommendation, the actions to be taken\n would be sufficient to meet the intent of the recommendation. Therefore, no further\n comments are required.\n\n 3. We recommend that the Assistant Secretary of Defense (Health Affairs) require\n the Director DoD/Veterans Affairs Program Coordination Office, present these\n billing and reimbursement problems to the Financial Management Working\n Group, which reports to the Health Executive Council, for resolution and develop\n an action plan to improve reimbursements.\n\n\n Management Comments\n The Assistant Secretary of Defense (Health Affairs) partially agreed with\n Recommendation 3. He stated that the Director, TRICARE Management Activity,\n whom the recommendation was originally directed to, is dual-hatted as the\n Assistant Secretary of Defense (Health Affairs), and as such is the DoD Co-Chair of\n the Health Executive Council. Therefore, the recommendation should be directed to\n the Assistant Secretary of Defense (Health Affairs). The Financial Management Working\n Group reports to the Health Executive Council, not the DVPCO. He recommended\n rewording the recommendation.\n\n\n Our Response\n We consider the Assistant Secretary of Defense (Health Affairs) comments partially\n responsive. We have revised the recommendation to incorporate the suggested\n redirection; however, comments did not address how to ensure that the appropriate\n offices are brought together to assist the Financial Management Working Group, when\n these meetings would occur, or the subsequent action plan to improve reimbursements.\n Therefore, we ask the Assistant Secretary of Defense (Health Affairs) to provide further\n detail in response to the final report by October 18, 2013.\n\n\n\n\n28 \xe2\x94\x82 DODIG-2013-135\n\x0c Finding\n\n\n\nManagement Comments on the Potential Monetary\nBenefits and Our Response\nManagement Comments\nThe Chief of Staff, MEDCOM, agreed with the potential monetary benefits, stating\nactual monetary benefits will be confirmed during the follow up process to ensure that\nthe recommendations were effectively implemented.\n\n\nOur Response\nComments from the Chief of Staff, MEDCOM, were responsive. No further comments\nare required.\n\n\nManagement Comments on Internal\nControl Weaknesses\nThe Chief of Staff, MEDCOM, acknowledged our identification of internal control\nweaknesses and the intent to provide a copy of the report to the senior official\nresponsible for internal controls in Department of Army. Actions taken in response\nto the recommendations should correct these weaknesses.\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 29\n\x0cAppendixes\n\n\n\n\n Appendix A\n Scope and Methodology\n We conducted this performance audit from July 2012 through September 2013 in\n accordance with generally accepted government auditing standards. Those standards\n require that we plan and perform the audit to obtain sufficient, appropriate evidence\n to provide a reasonable basis for our findings and conclusions based on our audit\n objectives. We believe that the evidence obtained provides a reasonable basis for our\n findings and conclusions based on our audit objectives.\n\n We interviewed personnel from TAMC, VAPIHCS, MEDCOM, and DVPCO through both\n site visits and teleconferences to obtain information and source documentation on\n health care services provided by TAMC to VAPIHCS beneficiaries. During the site visits\n to TAMC and MEDCOM, we observed daily procedures performed by personnel and\n examined key documents related to audit objectives. We also reviewed and analyzed\n claims data in the ARMS-Pro computer system.\n\n We obtained, reviewed, and analyzed Federal, DoD, Army, and local regulations,\n instructions, and guidance related to health care services between VA and DoD. We\n focused our review on the Joint Policy for Authorizations (signed March 2008), the\n Joint Policy for Claims and Payment (signed March 2008), and the FY 2012\n Reimbursement Methodology (signed December 2011). We compared actions\n being performed by personnel at TAMC, VAPIHCS, MEDCOM, and DVPCO to what the\n Federal, DoD, Army, and local regulations, instructions, and guidance requires.\n\n Our review was only of the DoD involvement with the authorization and claims process\n for the Joint Venture between FY 2009 and FY 2012 for TAMC and VAPIHCS. We\n chose to start our review with FY 2009 claims because FY 2009 coincided with the\n implementation of E-DR. We nonstatistically selected for review 50 authorizations\n to understand the authorization process, along with compliance with Joint Policy\n authorization guidelines, and 60 claims to understand the claims and payment process,\n along with compliance with the DoD FMR volume 4, chapter 3, and local Joint Policy.\n In selecting the authorizations and claims, we reviewed the higher dollar items from\n each category. We derived all sampled claims from the E-DR ARMS-Pro billing system.\n\n We selected the 50 authorizations from a universe of 8,745 authorizations valued\n at $20.9 million, which represented both inpatient and outpatient authorizations\n from data provided as of October 11, 2012. Of the 50 authorizations, we\n\n\n\n\n30 \xe2\x94\x82 DODIG-2013-135\n\x0c Appendixes\n\n\n\nreviewed 17 inpatient authorizations valued at $1,070,667, from the 905 inpatient\nauthorizations; and 33 outpatient authorizations valued at $177,322, from the\n7,840 outpatient authorizations. Table 5 identifies the authorizations and the universe\nfrom which they were selected.\n\nTable 5. Authorizations Selected for Review\n Authorizations Amount Total\n Type Total Amount\n Reviewed Reviewed Authorizations\n Inpatient 17 $1,070,667 905 $15,267,934\n Authorizations\n Outpatient 33 177,322 7,840 5,665,037\n Authorizations\n Total 50 $1,247,989 8,745 $20,932,971\n Authorizations\n\n\nWe reviewed FY 2012 information in the E-DR ARMS-Pro billing systems and identified\n11,034 claims, valued at $3.45 million, not reimbursed because they remained\nunauthorized by VAPIHCS. With TAMC and contractor personnel support, we were\nable to identify the reason why each claim remained unauthorized, based on coded\ndata in the E-DR ARMS-Pro billing system; we used the coded data as the basis of the\nauthorization discussion in the report.\n\nThe 60 claims selected for review from data provided as of October 11, 2012, were\nvalued at $2.5 million. Of the 60 claims, we reviewed 30 from the unbilled category\nthat TAMC management identified as claims not yet recorded as accounts receivable.\nWe reviewed 15 claims valued at $103,718, from the 3,917 claims identified as\nunbilled, containing billing or coding errors; in addition, we reviewed 15 claims valued at\n$922,677 from 11,034 claims identified as unbilled unauthorized. We selected another\n15 claims valued at $575,336 from the 5,935 claims identified as fully paid. Finally,\nwe selected 15 claims valued at $953,995 from the 26,606 claims identified as unprocessed\n(and therefore unpaid). Table 6 identifies the claims reviewed and the universe from\nwhich they were selected.\n\nTable 6. Claims Selected for Review\n Amount\n Type Claims Reviewed Total Claims Total Amount\n Reviewed\n Unbilled \xe2\x80\x93 billing\n and coding errors 15 $103,718 3,197 $242,475\n\n Unbilled \xe2\x80\x93 15 922,677 11,034 3,449,918\n unauthorized\n Fully Paid 15 575,336 5,935 3,706,758\n Unprocessed 15 953,995 26,606 12,578,056\n\n\n DODIG-2013-135 \xe2\x94\x82 31\n\x0cAppendixes\n\n\n\n We also reviewed 10 denial letters from the FBCS system. Because FBCS was not\n an approved Joint Venture system, these letters and subsequent denials do not appear\n in the E-DR ARMS-Pro system. Accordingly, these denials were mailed to TAMC, not\n transmitted electronically, and therefore these denials were not available for review\n from the E-DR ARMS-Pro system. We reviewed these letters to identify the FBCS denial\n code along with validate TAMC management concerns regarding claims being denied\n outside the span of control of TAMC.\n\n We did not assess overall contractor performance with the E-DR ARMS-Pro billing\n system because the contract is a VA contract. Additionally, recommendations cannot\n be made outside the Department of Defense. We referred to the VA OIG any\n VA processes or actions that we observed that may be contributing to the rising\n delinquent debt and ineffectiveness of the policies. We requested assistance from\n VA OIG to help with the audit or possibly perform a joint audit early in the audit;\n however, VA OIG personnel stated that other projects would take precedent and could\n not provide assistance in the matter at that time.\n\n\n Use of Computer-Processed Data\n We relied on computer-processed data to support our findings and conclusions.\n Specifically, we relied on management reports generated from the E-DR ARMS-Pro billing\n system to select the authorization and claims samples used to complete this audit.\n\n To assess the reliability of this data, we reviewed source documentation related to the\n transactions, obtained information from TAMC management and contractor support\n regarding system processes, and reviewed various system reports. Based on this\n information, we determined that the data were sufficiently reliable for the purposes of\n this report.\n\n\n Use of Technical Assistance\n The Quantitative Methods Division reviewed audit documents and advised us on the\n validity of the nonstatistical sample selected. Also, the Quantitative Methods Division\n reviewed Appendix A: Scope and Methodology, for technical clarity and defensibility.\n\n\n\n\n32 \xe2\x94\x82 DODIG-2013-135\n\x0c Appendixes\n\n\n\nPrior Coverage\nDuring the last 5 years, the Government Accountability Office (GAO) and the\nDepartment of Veterans Affairs Office of the Inspector General (VA OIG) have\nissued three reports discussing topics related to VA and DoD\xe2\x80\x99s Joint Venture for\nhealth care services. Unrestricted GAO reports can be accessed over the Internet\nat\xe2\x80\x84http://www.gao.gov. Unrestricted VA OIG reports can be accessed at\nhttp://www.va.gov/oig/publications/default.asp.\n\n\nGAO\nReport No. GAO-12-992, \xe2\x80\x9cVA and DoD Health Care: Department-Level Actions Needed\nto Assess Collaboration Performance, Address Barriers, and Identify Opportunities,\xe2\x80\x9d\nSeptember 2012\n\nReport No. GAO-08-399, \xe2\x80\x9cVA Health Care: Additional Efforts to Better Assess Joint\nVentures Needed,\xe2\x80\x9d March 2008\n\n\nVA OIG\nReport No. 09-01643-170, \xe2\x80\x9cCombined Assessment Program Review of the VA Pacific\nIslands Health Care System Honolulu, Hawaii,\xe2\x80\x9d July 29, 2009\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 33\n\x0cAppendixes\n\n\n\n\n Appendix B\n Tripler Army Medical Center Memo to Pacific Regional\n Medical Command Requesting Assistance\n\n\n\n\n34 \xe2\x94\x82 DODIG-2013-135\n\x0c Appendixes\n\n\n\n\nAppendix C\nPacific Regional Medical Command Memo to U.S. Army\nMedical Command Requesting Assistance\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 35\n\x0cAppendixes\n\n\n\n\n Appendix D\n U.S. Army Medical Command Memo to Assistant\n Secretary of Defense (Health Affairs) Requesting\n Assistance\n\n\n\n\n36 \xe2\x94\x82 DODIG-2013-135\n\x0c Appendixes\n\n\n\n\nAppendix E\nSummary of Potential Monetary Benefits\n Recommendation Type of Benefit* Amount of Benefit Account\n 3 Economy and Total benefit, $33.6 97 0130 1881 (DHP\n Efficiency. VAPIHCS million. ($13.4 million O&M)\n reimbursement for was paid during the\n healthcare services course of the audit.10\n rendered by TAMC to An additional $13.3\n VAPIHCS patients. million in delinquent\n debt, $3.7 million\n in unbilled claim,\n and $3.7 million in\n uncompensated\n care must still be\n reimbursed by\n VAPIHCS.)\n\n*Note: Potential monetary benefits are funds put to better use or questioned costs.\n10\n\n\n\n\n\t10\t\n On March 15, 2013, U.S. Army Medical Command provided documentation showing the delinquent debt had risen to\n $26.7 million; VA paid $13.4 million toward the debt, reducing the amount owed to $13.3 million. Therefore, the debt rose\n from the $26.2 million as of October 1, 2012, to $26.7 million. The total benefit calculation is derived from the\n $26.2 million delinquent debt during our review, $3.7 million in unbilled claims, and $3.7 million in uncompensated care.\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 37\n\x0cManagement Comments\n\n\n\n\n Management Comments\n Assistant Secretary of Defense (Health Affairs)\n Comments\n\n\n\n\n38 \xe2\x94\x82 DODIG-2013-135\n\x0c Management Comments\n\n\n\nAssistant Secretary of Defense (Health Affairs) Final Report\nComments (cont\xe2\x80\x99d) Reference\n\n\n\n\n Revised/Redirected\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 39\n\x0cManagement Comments\n\n\n\n Assistant Secretary of Defense (Health Affairs)\n Comments (cont\xe2\x80\x99d)\n\n\n\n\n40 \xe2\x94\x82 DODIG-2013-135\n\x0c Management Comments\n\n\n\nAssistant Secretary of Defense (Health Affairs) Final Report\nComments (cont\xe2\x80\x99d) Reference\n\n\n\n\n Revised\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 41\n\x0cManagement Comments\n\n\n\n U.S. Army Medical Command Comments\n\n\n\n\n42 \xe2\x94\x82 DODIG-2013-135\n\x0c Management Comments\n\n\n\nU.S. Army Medical Command Comments (cont\xe2\x80\x99d)\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 43\n\x0cManagement Comments\n\n\n\n U.S. Army Medical Command Comments (cont\xe2\x80\x99d)\n\n\n\n\n44 \xe2\x94\x82 DODIG-2013-135\n\x0c Management Comments\n\n\n\nU.S. Army Medical Command Comments (cont\xe2\x80\x99d)\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 45\n\x0cManagement Comments\n\n\n\n U.S. Army Medical Command Comments (cont\xe2\x80\x99d)\n\n\n\n\n46 \xe2\x94\x82 DODIG-2013-135\n\x0c Management Comments\n\n\n\nU.S. Army Medical Command Comments (cont\xe2\x80\x99d)\n\n\n\n\n DODIG-2013-135 \xe2\x94\x82 47\n\x0cAcronyms and Abbreviations\n\n\n\n\n Acronyms and Abbreviations\n ARMS-Pro Accounts Receivable Management System-Professional\n DoD FMR DoD Financial Management Regulation\n DVPCO DoD Veterans Affairs Program Coordination Office\n E-DR Enhanced-Document and Referral Management System\n FBCS Fee Based Claims System\n LOC Level of Care\n MEDCOM U.S. Army Medical Command\n MSA Master Sharing Agreement\n PRMC Pacific Regional Medical Command\n TAMC Tripler Army Medical Center\n VA Veterans Affairs\n VAPIHCS Department of Veterans Affairs Pacific Island Health Care System\n\n\n\n\n48 \xe2\x94\x82 DODIG-2013-135\n\x0c Whistleblower Protection\n U.S. Department of Defense\nThe Whistleblower Protection Enhancement Act of 2012 requires\nthe Inspector General to designate a Whistleblower Protection\nOmbudsman to educate agency employees about prohibitions on\nretaliation, and rights and remedies against retaliation for protected\ndisclosures. The designated ombudsman is the DoD IG Director for\nWhistleblowing & Transparency. For more information on your rights\nand remedies against retaliation, go to the Whistleblower webpage at\n www.dodig.mil/programs/whistleblower.\n\n\n\n\n For more information about DoD IG\n reports or activities, please contact us:\n Congressional Liaison\n Congressional@dodig.mil; 703.604.8324\n\n DoD Hotline\n 800.424.9098\n\n Media Contact\n Public.Affairs@dodig.mil; 703.604.8324\n\n Monthly Update\n dodigconnect-request@listserve.com\n\n Reports Mailing List\n dodig_report-request@listserve.com\n\n Twitter\n twitter.com/DoD_IG\n\x0cD E PA R T M E N T O F D E F E N S E \xe2\x94\x82 I N S P E C T O R G E N E R A L\n 4800 Mark Center Drive\n Alexandria, VA 22350-1500\n www.dodig.mil\n Defense Hotline 1.800.424.9098\n\x0c'