Federal workers’ union wants Congress to investigate VA Choice contractors

The American Federation of Government Employees (AFGE) in a letter to congressional committee leaders urged the committees to investigate two private contractors operating the Veterans Affairs Choice Program.

The Choice Program, created by the Veterans Access, Choice, and Accountability Act of 2014, privatizes some VA health care services.

In its letter, the union accuses the two contractors TriWest Healthcare Alliance and Health Net Federal Services of defrauding the government.

The accusation stems from the results of an audit of the Choice Program. The audit uncovered “tens of thousands of duplicate cases” and inflated reimbursement claims resulting in overcharges of more than $89 million.

The contractors’ overcharges “have directly harmed veterans and undermined the capacity of the VA health care system to provide them with the exemplary care that they have earned with their service,” states the union’s letter.

The audit, which began in March 2017, was conducted by the VA’s Office of the Inspector General after it was discovered that the Choice Program’s funds were running low.

The results of that audit were published in a September 2017 memorandum from the inspector general to the Secretary of Veterans Affairs.

The audit found that TriWest and Health Net had been over paid because of their questionable billing practices and because of the VA’s lack of oversight.

TriWest and Health Net were selected by the VA in 2014 to operate the new Choice Program, which diverts some veterans seeking VA health care services to private health care providers.

The two companies’ responsibilities include referring veterans to private health care providers and paying claims resulting from these referrals.

The companies are then reimbursed by the VA for the claims they pay.

According to the inspector general’s memo, “our audit work to date demonstrates the existence of tens of thousands of duplicate payments.”

According to the memo, the companies began submitting duplicate claims after convincing VA management that the VA wasn’t paying the companies’ claims quickly enough.

In order to speed up payments, the VA agreed to forego its customary review of claims and allow the companies to submit their claims in bulk with only a cursory review.

“Information obtained from the (companies) during our audits indicates that neither has effective processes for preventing duplicate payments,” states the inspector general’s memo.

Another questionable practice involved overcharging the VA for reimbursement.

The VA’s contract with the two companies says that reimbursement payments will be based on the Medicare reimbursement rate.

But in some instances, the companies negotiated deals with health care providers to accept payments below the Medicare reimbursement rate.

The companies then submitted reimbursement claims based on the higher Medicare rate to the VA.

The VA’s inspector general isn’t the only one that has taken an interest in the Choice Program’s billing practice.

The Arizona Republic reports that TriWest, a Phoenix-based company, is the subject of a federal grand jury investigation concerning irregularities in the Choice Program.

According to the Republic, the grand jury is investigating TriWest for “possible wire fraud and misuse of government funds” in two VA-administered health care programs.

When asked by the Republic if TriWest committed fraudulent billing practices, David McIntyre, TriWest’s CEO and a former aide to Sen. John McCain, replied, “absolutely not.”

But the Republic also reports that TriWest in 2011 paid $10 million to settle allegations by the Justice Department that the company defrauded TRICARE, the US Defense Department’s health care plan for the military, military members’ dependents, and military retirees.

Law 360 reports that the Department of Defense in 2012 decided to drop TriWest as a TRICARE contractor “just months after TriWest agreed to pay $10 million over fraudulent billing.”

Health Net also has had its problems.

Sen. Debbie Stabenow of Michigan told the Detroit News that Health Net’s performance running the Choice Program in Michigan has been “a disaster.”

She said that she has received a number of calls from veterans complaining of long waits when seking medical treatment through the Choice Program and that Michigan health care providers are having problems with delayed payments or not getting paid at all.

Some rural clinics in Michigan have stopped participating in the Choice Program because of Health Net’s payment problems, said Stabenow.

Health care providers in Alabama, Florida, and Wyoming also have stopped participating the Choice Program because of payment problems with Health Net.

In its letter to members of Congress, AFGE noted that “despite overwhelming evidence of abusive practices by both contractors, . . . the VA gave them contract extensions through September 30, 2018.”

The letter urges the committees with oversight responsibilities to take action before the companies are awarded further extensions.

The committees must act “to protect veterans and taxpayers from these improper and wasteful practices,” concluded the union’s letter.