Auditors Estimate $53 Million in Claims Wrongfully Denied or Rejected by VA

Auditors Estimate $53 Million in Claims Wrongfully Denied or Rejected by VA

Pressure to meet deadlines and decrease a massive backlog of claims for reimbursement for non-VA emergency care contributed to how Veterans Affairs staff erroneously denied or rejected claims, according to an audit by the Office of the Inspector General.

The auditors found an estimated 31% of denied or rejected non-VA emergency care claims for reimbursement were inappropriately processed – about $716 million of potential financial risk to about 60,800 veterans, according to the audit.

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The audit, which was released Aug. 6, includes 11 recommendations for the VA to improve its accuracy of claims filed for non-VA emergency care reimbursement. VA officials began implementing improvements during the auditing process, including regular training for staff and reviewing denial and rejections reasons on clinical decisions.

“VA is reviewing the sample claims related to other health insurance highlighted in the report and will notify affected veterans regarding their options for corrective payments and/or financial reporting revisions,” said VA spokeswoman Susan Carter. “Prior to the report’s release, VA had self-identified the majority of the IG’s concerns, starting with numerous efforts to fix them more than a year ago.”

Those efforts, Carter said, are changing claims processing guidance to enable greater accuracy and quality and initiating nationwide quality and accuracy reviews on denied and rejected claims to assess processing accuracy and identify additional staff training needed.

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The audit was triggered in September 2017 after former Rep. Tim Walz (D-Minn.), now Minnesota’s governor, expressed concern about processors denying veterans’ non-VA emergency care claims to meet production goals, as well as receiving incentives, such as high performance ratings and bonuses.

That's when the audit team conducted a nationwide review and found that an estimated 31% of denied or rejected non-VA emergency care claims for reimbursement were inappropriately processed.

The billed amount of inappropriately processed claims for reimbursement from April 1 through September 30, 2017 was an estimated $716 million, affecting about 60,800 veterans, according to the audit. Of those claims, auditors estimated $53.3 million for about 17,400 veterans should have been approved.

If the VA had not corrected errors for processing claims for reimbursement, it could spiral to total more than $533 million in improper underpayments to veterans filing claims over the next five years, according to the auditor's report.

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Claims are processed by personnel in the Claims Adjudication and Reimbursement Dictorate in the VA’s Office of Community Care. Personnel told auditors there was an emphasis placed speed over accuracy, which stemmed from a massive backlog of claims older than 30 days.

Auditors found although incentives were tied to staff who completed claims, that was not a driving factor to inappropriately process claims. Personnel who met production standards were eligible for bonuses up to $500 and telework opportunities, according to the audit.

Auditors also noted some of the backlog of claims was so old by the time the veterans received it, it was too late to resubmit or appeal.

Since fiscal year 2017, the office that processes non-VA emergency care has experienced several leadership changes, including three directors. Auditors said the lack of stability in key leadership positions provided context as to how problems were allowed to continue.

Amanda Dolasinski is MOAA’s staff writer. She can be reached at Follow her on Twitter @AmandaMOAA.

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Amanda Dolasinski
Amanda Dolasinski

Dolasinski is a former staff writer at MOAA.