Department of Veterans Affairs 

Office of Inspector General 

Healthcare Inspection 

Alleged Mismanagement of the Fee Basis 

Program 

VA Connecticut Healthcare System, 

West Haven, Connecticut 

Report No. 09-01219-141 June 3, 2009
 VA Office of Inspector General 

Washington, DC 20420 
 

 

 

To Report Suspected Wrongdoing in VA Programs and Operations 

Telephone: 1-800-488-8244 between 8:30AM and 4PM Eastern Time,

 Monday through Friday, excluding Federal holidays

 E-Mail: vaoighotline@va.gov 
 

 

 Alleged Mismanagement of the Fee Basis Program, VA Connecticut Healthcare System, West Haven, CT 

Executive Summary 

The purpose of this inspection was to determine the validity of allegations regarding the 

mismanagement of the Fee Basis Program at the VA Connecticut Healthcare System (the 

system), West Haven, CT. We substantiated that the pre-authorization process for feebased care was flawed. However, managers initiated new procedures to improve the 

process prior to the inspection. We did not substantiate that VA physicians self-referred 

VA patients through the affiliate hospital or benefited financially from fee basis claims 

paid to the affiliate hospital. We did not substantiate that the system inappropriately 

utilized the affiliate hospital as a sole source referral center rather than putting scarce or 

complex medical services through a bidding process. 

We concluded that there was an overall lack of oversight of the program by Business 

Office and Compliance and Business Integrity (CBI) managers; and ultimately, by senior 

managers, and this had a causal effect on the appearance of self-referrals and conflict of 

interest. We concluded that the absence of formal agreements, such as contracts, sharing 

agreements, or memoranda of understanding (MOUs) also contributed to the appearance 

of conflict of interest and may have resulted in some overpayments to the affiliate 

hospital. Additionally, we concluded that CBI managers needed to conduct regular audits 

of fee basis claims and ensure compliance with VA regulations. 

We recommended improved oversight of the fee basis program and an assessment of 

services currently being paid through fee basis to determine if formal agreements for 

those services should be considered. Additionally, we recommended that Business 

Office managers provide trended program data to senior managers and that CBI managers 

conduct regular audits of the program and develop processes to ensure issues identified 

are monitored until they are resolved. We also recommended enhanced training for 

physicians regarding VA regulations governing self-referral and conflict of interest and 

that the training be documented. 

VA Office of Inspector General i 
 

 

Alleged Mismanagement of the Fee Basis Program, VA Connecticut Healthcare System, West Haven, CT 

DEPARTMENT OF VETERANS AFFAIRS
 

Office of Inspector General 

Washington, DC 20420 

TO:	 Director, VA New England Healthcare Network (10N1) 

SUBJECT:	 Healthcare Inspection – Alleged Mismanagement of the Fee Basis 

Program, VA Connecticut Healthcare System, West Haven, Connecticut 

Purpose 

The VA Office of Inspector General (OIG), Office of Healthcare Inspections (OHI) 

reviewed allegations regarding mismanagement of the Fee Basis Program1

 at the VA 

Connecticut Healthcare System (the system), West Haven, CT. The purpose of the 

inspection was to determine the validity of the allegations. 

Background 

The system consists of two divisions located in West Haven and Newington, CT. The 

West Haven division provides medical, surgical, mental health, and long-term care 

services through a full range of inpatient and outpatient programs. The Newington 

division is an ambulatory care center that provides primary and specialty care services 

and is the site of the system’s Fee Basis Program. The system is academically affiliated 

with Yale University School of Medicine and the University of Connecticut School of 

Medicine and School of Dentistry. 

The complainant contacted OIG’s Hotline Division on October 9, 2008 alleging that: 

•	 The system’s pre-authorization process for fee based care was flawed. 

•	 Physicians on staff at the system and who also had clinical privileges at Yale New 

Haven Hospital (YNHH) referred patients for care to YNHH and then provided the 

care (known as self-referral). The complainant also alleged that the system paid these 

physicians professional fees for providing the services. The complainant specifically 

1

 Fee basis allows VA to authorize veterans’ medical care in the community when VA cannot provide all of the 

necessary care and services. Pre-authorization is required for both inpatient and outpatient fee based care. 

VA Office of Inspector General 1 
 

 

Alleged Mismanagement of the Fee Basis Program, VA Connecticut Healthcare System, West Haven, CT 

identified sleep studies;2 ear, nose, and throat (ENT) procedures; and 

Electrophysiology (EP) procedures.3 

•	 The system utilized YNHH as a sole source referral center rather than putting scarce 

or complex medical services through the bidding process. 

The complaint was forwarded to OHI February 11, 2009. Additionally, inspectors 

followed up on a related allegation that a part-time VA ENT physician who was also part 

time with Yale Medical Group (YMG) was referring patients to YNHH for audiology 

studies that could be performed by the system’s Audiology Department. 

Scope and Methodology 

Inspectors interviewed the complainant by telephone on February 17 and conducted the 

initial site visit February 23–26, with a follow-up visit April 21–22. Inspectors 

interviewed the complainant, senior managers, the compliance officer, the Chief of 

Surgical Service, clinicians, and other employees pertinent to the complaint. They also 

reviewed a sample of fee basis claims provided by the complainant. In addition, they 

conducted telephone interviews with the Veterans Integrated Service Network (VISN) 

Business Office Manager and VA Central Office Deputy Chief Business Officer for 

Purchased Care. Inspectors also reviewed a sample of medical records related to the fee 

basis claims. 

Inspectors conducted the inspection in accordance with Quality Standards for Inspections 

published by the President’s Council on Integrity and Efficiency. 

Inspection Results 

Issue 1: Pre-authorization Process 

Inspectors substantiated that the pre-authorization process for fee-based care was poorly 

defined and difficult to track. Increased oversight of the Fee Basis Program began 

around September 2008 when the system’s business office manager (BOM) became 

aware that there was a backlog of several months of unpaid claims. The BOM and other 

business office employees said that when payment claims were submitted for fee based 

care, they frequently could not establish who authorized the care. The process seemed to 

be that a clinician would request fee based care, the request would go to the Chief of Staff 

(COS) for approval, and the COS would sign an approval form (VA Form 10-0114A). 

Apparently, the approval was communicated to the requesting physician, but the form did 

not become part of the computerized patient medical record, and it was not forwarded to 

the Fee Basis Program. In fact, when asked what happened to the forms, no one seemed 

to know. 

2

 A sleep study is a multiple-component test that electronically transmits and records specific physical activities 

while the patient sleeps. The recordings are analyzed by a specialist to diagnose various sleep disorders. 3

 Specifically, pacemaker and cardioverter-defibrillator implants. 

VA Office of Inspector General 2 
 

Alleged Mismanagement of the Fee Basis Program, VA Connecticut Healthcare System, West Haven, CT 

This process created a dilemma for fee-basis personnel who had a VA performance 

measure to pay fee basis claims within 30 days. They frequently had to conduct timeconsuming chart reviews or searches for documents that showed that the billed services 

were authorized and were actually provided. This prevented them from meeting the 

performance measure and contributed to the backlog of unpaid claims. Inspectors 

verified the difficulty of finding pre-authorization and proof that services were performed 

by doing medical record reviews from a sample of the fee basis claims provided. Not 

only could inspectors not tell who authorized the care, but it was sometimes difficult to 

find documentation to support that the care was provided. 

In October, the BOM brought the issues with the pre-authorization process to the 

attention of the system Director and proposed using the computerized consult package to 

document pre-authorization for fee based care, making the process transparent and easily 

traceable. Senior and clinical managers approved the process and implementation took 

place approximately 2 months prior to the February visit. The system Director asked the 

BOM to monitor compliance with the process; but the data provided were not trended in 

a meaningful way, such as by clinical section, requested service, or requesting provider. 

Issue 2: VA Physicians Self-Referred and Received Professional Fees. 

Sleep Studies 

Inspectors did not substantiate that a full-time VA physician made self-referrals to the 

Yale Center for Sleep Disorders (YCSD) and then collected professional fees for 

interpretation of the studies. Sleep studies have two components, the test that is 

performed in a specially equipped sleep laboratory by trained technicians, and the 

interpretation of the test by a physician. The system performed sleep studies in its own 

sleep laboratory, but the demand for the studies became more than the system could 

manage. Consequently, the system began referring patients to the YCSD and to another 

community sleep center. Inspectors were told that YCSD could accommodate a higher 

volume of patients, so the majority of the studies were referred to that facility. However, 

the YCSD did not always provide the interpretation of the study, but sent the study back 

to the referring VA physician for interpretation. The BOM provided inspectors several 

claims for payment for sleep studies performed at YCSD. These claims were identified 

as demonstrating self-referral and payment for professional fees to the VA physician 

because the VA physician was named as the referring physician and the physician who 

provided the service. 

Initially, inspectors were under the impression that these bills were for professional fees 

only and that the Fee Basis Program received separate bills that represented technical fees 

(use of the laboratory, equipment, and technicians). However, after further investigation, 

it was found that the claims included both professional and technical fees. 

VA Office of Inspector General 3 
 

 

 

Alleged Mismanagement of the Fee Basis Program, VA Connecticut Healthcare System, West Haven, CT 

The medical record review showed that the VA physician was the interpreting physician 

for several of the studies, giving the appearance that the physician was benefiting 

financially from the referral of patients to YCSD. However, inspectors determined that 

YCSD sent one bill that combined the technical fees and professional fees. There was a 

special designation on the bill that allowed fee basis clerks to determine that the bill 

included both technical and professional fees. Depending on the Current Procedural 

Terminology (CPT®)4

 code for a sleep study, the professional fee might be $191.52 or 

$205.71. Also depending on the CPT® code, the total amount paid for each study was at 

the Medicare rate and ranged from $933.87 to $1,207.14. This showed that the largest 

portion of the payment went toward technical fees. When asked why, based on the fee 

basis clerks review of claims, the professional fees were not deducted prior to payment; 

inspectors were told that the clerks were unaware that the physician named as the supplier 

of services was a VA physician. Inspectors determined that even though professional 

fees were included in the bills from YCSD, the VA physician did not receive those 

professional fees and the entire amount was received by YCSD. This actually resulted in 

overpayments to YCSD. The investigation also showed that a lack of oversight of the 

Fee Basis Program and the weak pre-authorization process for fee based services had a 

direct causal effect on the perception of self-referral. 

Ear, Nose, and Throat Procedures 

Inspectors did not substantiate that part-time VA ENT physicians referred patients to 

themselves at YNHH for ENT procedures or that the physicians referred patients for 

studies that could be performed by the system’s Audiology Department. Inspectors 

reviewed 35 ENT consult and fee basis claims. The claims listed a part-time VA 

provider as being both the referring physician and the provider performing the services. 

With the exception of two claims, the services were for diagnostic audiology5

 studies for 

patients exhibiting dizziness and loss of balance. As with sleep studies, specially trained 

technologists (audiologists) perform these studies. The studies also require specialized 

equipment. The Chief of Surgery confirmed that the audiology studies identified in the 

consults and claims could not be performed by the system’s Audiology Department due 

to the lack of proper equipment; therefore, had to be performed at YNHH. The part-time 

VA ENT physician reviewed the results of the studies and initiated appropriate treatment. 

As with the sleep studies, the claims sent from YNHH were for both professional and 

technical fees, and there was no evidence to support that the physician directly benefited 

financially from the payments to YNHH. The Chief of Surgery also confirmed that there 

was no contract, sharing agreement, or memorandum of understanding (MOU) between 

the system and YNHH for audiology services. Thus, the overall lack of oversight of the 

Fee Basis Program, the weak pre-authorization process, and the lack of a formal 

agreement with YNHH for ENT services contributed to the perception of self-referral. 

4

 CPT® codes are the most widely accepted medical nomenclature used to report medical procedures and services 

under public and private health insurance programs. 

5

 Audiology: the science of hearing, especially diagnostic testing.
 

VA Office of Inspector General 4 
 

 

Alleged Mismanagement of the Fee Basis Program, VA Connecticut Healthcare System, West Haven, CT 

Electrophysiolgy Procedures 

Inspectors did not substantiate that VA physicians made self-referrals for EP services 

performed at YNHH then inappropriately received payment for the performance of those 

services. The physicians named by the complainant were under contract and not VA 

employees. They were employees of the YMG affiliated with Yale University School of 

Medicine and YNHH. These contracted physicians conducted EP clinics one day per 

week at the system, and the contract was for specific CPT codes related to EP procedures, 

primarily pacemaker and cardiac defibrillator insertions. 

Inspectors reviewed 16 claims for EP services that occurred over the past year. The 

BOM identified these claims as examples of self-referral. The actual consult process for 

EP services was that either the head of the cardiology clinic or the cardiology nurse 

practitioner would refer patients who they assessed to need EP procedures to the EP 

clinic. If the EP specialist concurred with that assessment, he/she would schedule the 

procedure. When the contract was negotiated in June 2006, the plan was that the 

procedures would be performed in the system’s newly constructed cardiac catheterization 

laboratory; however, due to construction delays, the catheterization laboratory is still not 

operational, necessitating that the procedures be performed at YNHH. 

Because the referral and pre-authorization process was not clearly defined, the claims 

coming from YNHH erroneously listed the contracted physicians as the referring 

physicians and the providers of the services, giving the appearance of self-referrals and 

conflicts of interest. The Inspection did reveal that the contract physicians were paid 

through the fee basis program rather than the contract and that the BOM was unaware of 

the EP contract. However, the differences between the fee basis and contract fees were 

minor. Inspectors concluded that more vigilant management oversight at the Business 

Office and senior management levels would have prevented payment through fee basis 

rather than the contract. By the time of the April visit, managers had taken action to pay 

for EP procedures under the contract. 

Issue 3: Sole Source Referral 

Inspectors did not substantiate that the system inappropriately referred medical services 

to YNHH. VHA regulations6

 state that sole source awards with affiliates should be 

considered the preferred option whenever education and supervision of graduate medical 

trainees is required because training programs are direct contributors to a facility’s 

productivity. An affiliation is a relationship between VA and an educational institution 

or other health care facility, such as YNHH for the purposes of enhanced education and 

patient care. The same regulations address conflict of interest guidelines for employees 

who have certain relationships with non-VA parties involved with procurements. The 

6 VA Directive 1663, Health Care Resources Contracting – Buying, Title 38 U.S.C. 8153, August 10, 2006. 

VA Office of Inspector General 5 
 

 

Alleged Mismanagement of the Fee Basis Program, VA Connecticut Healthcare System, West Haven, CT 

regulations require VA employees to sign an acknowledgement that they understand the 

conflict of interest rules. However, the inspection showed that this form was not 

routinely used and there was no training in place to ensure that physicians were aware of 

the potential for conflict of interest. 

Other Issues 

At the time of the February visit, inspectors found that the system’s Compliance and 

Business Integrity (CBI) Office did not have processes in place to evaluate the system’s 

fee basis practices as required by VA regulations.7

 The first fee basis audit was dated 

January 2008 and concluded that controls for the program were in place and determined 

that conflict of interest did not exist for referring clinicians. The second audit, dated 

December 2008 was performed after the BOM brought the concerns about self-referral 

and the payment of professional fees to VA physicians to the system Director’s attention. 

This audit focused only on the claims provided by the BOM and did find the appearance 

of self-referral and conflict of interest in 37 of 51 (73 percent) of the bills reviewed. 

According to the CBI Officer’s position description, the CBI Officer “will use audits 

and/or other evaluation techniques to monitor compliance and to assist in the reduction of 

identified problem areas,” and develop and implement “regular effective education 

training programs” for employees. While the CBI Officer was in that position since 

2003, the first audit did not occur until January 2008. Additionally, while some CBI 

information was provided during new employee orientation, there was no process in 

place to specifically address conflict of interest issues with physicians; and physicians 

were not required to sign an acknowledgement attesting that they received and 

understood the regulations. During the April visit, we found that the system began to 

address these issues. 

The inspection also showed that processes to track and trend fee basis practices for the 

purpose of identifying opportunities to improve those practices was lacking in both the 

CBI office and the business office. Even though the system Director asked the BOM to 

provide trended data; for example, to assess the effectiveness of the newly implemented 

pre-authorization process; there was no evidence that this was done. Also, the CBI and 

business office managers did not appear to have the type of collaborative relationship 

conducive to the timely identification of potential or real compliance issues and the 

implementation of corrective actions. 

Conclusions 

We concluded that the pre-authorization process for fee-based services was weak and not 

transparent. However, we also concluded that VA physicians were not self-referring or 

benefiting financially from claims paid to YMG or YNHH through the Fee Basis 

Program. We did determine that there was an overall lack of oversight of the Fee Basis 

7

 VHA Handbook 1030.01, Compliance and Business Integrity (CBI) Program Administration, July 31, 2006. 

VA Office of Inspector General 6 
 

Alleged Mismanagement of the Fee Basis Program, VA Connecticut Healthcare System, West Haven, CT 

Program by the BOM, the CBI officer, and ultimately senior managers, which had a 

causal effect on the appearance of self-referrals. We also concluded that between the 

February and April visits, system managers began to put processes in place to improve 

oversight of the fee basis program; however, there needs to be a mechanism to ensure that 

this oversight is sustained. 

We concluded that the absence of formal agreements also contributed to the appearance 

of conflict of interest and may have resulted in some overpayment to YNHH and/or 

YMG. The BOM needs to provide the system Director with trended data regarding high 

volume services currently paid through fee basis that might be better provided through 

such agreements. Other trended data necessary to ensure compliance with VA 

regulations needs to be identified through a collaborative effort by the Business Office, 

the CBI office, and senior managers. 

The CBI Office needs to conduct regular audits of fee basis claims and ensure 

compliance with VA regulations. The claims should be chosen in such a manner that 

samples of all services paid for through the program are eventually represented. This 

office also needs to ensure that providers, especially those VA providers who have 

privileges at community facilities, receive information regarding VA regulations 

governing self-referral and conflict of interest; and those providers need to attest in 

writing that they received and understand the regulations. 

Recommendations 

Recommendation 1. We recommended that the VISN Director ensure that the System 

Director requires improved oversight of the Fee Basis Program and the development of 

processes that will ensure that oversight is sustained. 

Recommendation 2. We recommended that the VISN Director ensure that the System 

Director requires an assessment of services currently being paid through the Fee Basis 

Program to determine if contracts, sharing agreements, or MOUs for those services 

should be considered. 

Recommendation 3. We recommended that the VISN Director ensure that the System 

Director requires the BOM provide trended Fee Basis Program data, the CBI Officer 

conducts regular audits of the Fee Basis Program, and processes are developed to ensure 

that issues identified are monitored until they are resolved. 

Recommendation 4. We recommended that the VISN Director ensure that the System 

Director requires physicians receive information regarding VA regulations on selfreferral and conflict of interest, that physicians attest to their understanding in writing, 

and that the signed attestation be placed in providers’ training or credentialing and 

privileging files. 

VA Office of Inspector General 7 
 

Alleged Mismanagement of the Fee Basis Program, VA Connecticut Healthcare System, West Haven, CT 

OIG Comments 

The VISN and Healthcare System Directors agreed with the findings and 

recommendations of the inspection and provided acceptable action plans. (See 

Appendixes A and B, pages 9–13, for the full text of the Directors’ comments). We will 

follow up on the planned actions until they are completed. 

 (original signed by:) 

JOHN D. DAIGH, JR., M.D. 

Assistant Inspector General for 

Healthcare Inspections 

VA Office of Inspector General 8 
 

 

 

Alleged Mismanagement of the Fee Basis Program, VA Connecticut Healthcare System, West Haven, CT 

Appendix A 

VISN Director Comments 

Department of 

Veterans Affairs Memorandum 

Date: May 29, 2009 

From: Director, VA New England Healthcare Network (10N1) 

Subject: Healthcare Inspection – Alleged Mismanagement of the Fee 

Basis Program, VA Connecticut Healthcare System, West 

Haven, Connecticut 

To: Regional Director, Office of Healthcare Inspections (54BN) 

The Network concurs with each of the four (4) recommendations, 

concurrences, and the action for correction within the narrative summary 

for each. 

 (original signed by:) 

MICHAEL F. MAYO-SMITH, MD, MPH 

VA Office of Inspector General 9 
Alleged Mismanagement of the Fee Basis Program, VA Connecticut Healthcare System, West Haven, CT 

Appendix B 

System Director Comments 

Department of 

Veterans Affairs Memorandum 

Date: May 29, 2009 

From: Director, VA Connecticut Healthcare System (689/00) 

Subject: Healthcare Inspection – Alleged Mismanagement of the Fee 

Basis Program, VA Connecticut Healthcare System, West 

Haven, Connecticut 

To: Regional Director, Office of Healthcare Inspections (54BN) 

Thank you for the opportunity to respond to the findings of this Healthcare 

Inspection. We found the assessment to be thorough, fair and collaborative 

and we thank Katherine Owens for her professionalism and collegiality 

throughout the process. Below you will find concurrence on all four (4) 

recommendations and supporting narrative for the efforts that VA 

Connecticut Healthcare System has taken to begin to create meaningful 

controls to the Fee Basis Program. 

VA Office of Inspector General 10 
Alleged Mismanagement of the Fee Basis Program, VA Connecticut Healthcare System, West Haven, CT 

Director’s Comments 

to Office of Inspector General’s Report 

OIG Recommendations 

Recommendation 1. We recommended that the VISN Director ensure that 

the System Director requires improved oversight of the Fee Basis Program 

and the development of processes that will ensure that oversight is 

sustained. 

Concur. 

In order to assure that there was consistency of process in place, the 

Medical Center Director established a Fee Basis Oversight Committee, 

chaired by the Chief Fiscal Officer. The charge of this interdisciplinary 

committee (composed of representatives from the Chief of Staff, 

Compliance, Business, Care Coordination and Director’s Offices, 

respectfully) is to establish regular metrics that will be tracked over time to 

assure that processes are sustained and appropriately monitored according 

to the applicable rules and regulations of Fee Basis Care. The committee 

starts out by reviewing the prior month’s authorization and the historical 

trend to establish if there is a need to consider an MOU, sharing agreement 

or contract if there has been a significant amount of fee basis by service. 

This is followed by a report from the COS office regarding MOUs, sharing 

agreements or contracts that are in progress. Next, the committee reviews 

business office data to establish if bills have been paid, if there were any 

perceived conflicts of interest and to understand the timeliness of claim 

payments. Finally, the committee reviews monthly audits from the 

compliance office as a check and balance of the aforementioned process. 

All of this information is collected into meaningful minutes, coordinated by 

Quality Management and submitted through the chairperson to the Medical 

Center Director for approval, concurrence and, if necessary, action. It is our 

belief that this committee structure provides a robust, organized framework 

to assure that oversight is clear and sustained over time. 

Recommendation 2. We recommended that the VISN Director ensure that 

the System Director requires an assessment of services currently paid for 

through the Fee Basis Program to determine if contracts, sharing 

agreements, or MOUs for those services should be considered. 

VA Office of Inspector General 11 
 

 

 

 

Alleged Mismanagement of the Fee Basis Program, VA Connecticut Healthcare System, West Haven, CT 

Concur. 

A comprehensive assessment has begun to understand which services paid 

for through the Fee Basis program that warrants a contract, sharing 

agreement and/or MOU for those services. This is accomplished at the 

monthly Fee Basis Oversight Committee where the Fee Basis Care 

Coordinator and COS office bring cogent, trended data on the services that 

are being fee based as well as status of contracts, MOUs and sharing 

agreements. Pursuant to this OIG review, several considerations have been 

made. To date, a contract has been drafted for endoscopy services and 

MOHS procedures as suggested by the OIG inspection team. Additionally, 

an MOU is in draft format for ENT services. We are still in the process of 

understanding if an MOU is needed for sleep studies or if this issue has 

resolved itself with the elimination of backlog for this service. 

Recommendation 3. We recommended that the VISN Director ensure that 

the System Director requires the BOM provide trended Fee Basis Program 

data, the CBI officer conducts regular audits of the Fee Basis Program, and 

processes are developed to ensure that issues identified are monitored until 

they are resolved. 

Concur. 

Several controls have been put into place by the BOM and Compliance 

Officer to assure that trended, meaningful data are presented on the status 

of the Fee Basis Program (BOM) and this is validated through Fee Basis 

program audits (Compliance). For the business office, daily data for those 

claims that were not authorized appropriately began on March 1, 2009 and 

has been provided to the Facility Director and compliance officer daily. 

This process has now been expanded to an aggregated report presented 

monthly to the Medical Center Director through the Fee Basis Oversight 

Committee. This new process began May 1, 2009 and identifies the patient, 

provider, date the claim received and the scope of the services with trends 

over time. For the compliance office, this program has also been 

strengthened with the first random audit was completed on May 18th as well 

as the first concurrent Business Office audit completed on questionable 

bills on March 30th and reported to the Fee Basis Committee. The 

compliance office will continue Monthly Fee Basis Random audits using 

RAT-STATS methodology until December 2009 then twice a year 

thereafter. The Business Office Concurrent Audit on questionable bills will 

also continue monthly on any questionable bills as they are provided. 

VA Office of Inspector General 

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Alleged Mismanagement of the Fee Basis Program, VA Connecticut Healthcare System, West Haven, CT 

With these strengthened controls in place, this information is brought to a 

newly established Fee Basis Oversight Committee, chaired by the Chief 

Fiscal Officer with minutes and data being presented immediately after to 

the Medical Center Director for approval, concurrence and if necessary, 

action. 

Recommendation 4. We recommended that the VISN Director ensure that 

the System Director requires that physicians receive information regarding 

VA regulations on self-referral and conflict of interest, that physicians 

attest to their understanding in writing, and that the signed attestation be 

placed in providers’ training or credentialing and privileging files. 

Concur. 

VA Connecticut Healthcare System has created a 2-pronged approach to 

this recommendation. Proactively, the compliance office has implemented 

three interventions to assure that physicians have been educated on VA 

regulations on self-referral and conflict of interests. These are: 

1. Education on self referrals and Fee Basis Consults was given during 

the regular All Physician Meeting on March 20, 2009. 

2. The Assistant Chief of Staff has a Physician Brief flyer for all newly 

reporting Attending Physician’s started on May 18, 2009. 

3.	 The Compliance Officer will meet and discuss Self Referrals and 

Ethics with all newly reported Physicians as appointments can be 

made. The physicians will attest to the training and a copy of the 

attestation will be kept in the physicians’ competency file at the 

service level. The originals will be kept in the compliance office. 

This training cycle will start during the week of May 26. The 

training will also be reported at the Fee Basis Committee. 

Reactively, the committee looks at any perceived conflicts of interest or 

self-referral and makes recommendations to how an issue will be corrected 

after a service has been rendered. This process was initiated on May 15, 

2009. To date, no additional conflicts of interest or self referrals have been 

identified by the Fee Basis office. 

VA Office of Inspector General 

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Alleged Mismanagement of the Fee Basis Program, VA Connecticut Healthcare System, West Haven, CT 

Appendix C 

OIG Contact and Staff Acknowledgments 

OIG Contact Katherine Owens, MSN, Regional Director, Office of
 

Healthcare Inspections (603) 222-5871 

Acknowledgments Anthony Murray Leigh, CPA, CFE 

VA Office of Inspector General 

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Alleged Mismanagement of the Fee Basis Program, VA Connecticut Healthcare System, West Haven, CT 

Appendix D 

Report Distribution 

VA Distribution 

Office of the Secretary 

Veterans Health Administration 

Assistant Secretaries 

General Counsel 

Director, VA New England Healthcare Network (10N1) 

Director, VA Connecticut Healthcare System (689/00) 

Non-VA Distribution 

House Committee on Veterans’ Affairs 

House Appropriations Subcommittee on Military Construction, Veterans Affairs, and 

Related Agencies 

House Committee on Oversight and Government Reform 

Senate Committee on Veterans’ Affairs 

Senate Appropriations Subcommittee on Military Construction, Veterans Affairs, and 

Related Agencies 

Senate Committee on Homeland Security and Governmental Affairs 

National Veterans Service Organizations 

Government Accountability Office 

Office of Management and Budget 

U.S. Senate: Christopher J. Dodd, Joseph I. Lieberman 

U.S. Representative: Rosa L. DeLauro 

This report is available at http://www.va.gov/oig/publications/reports-list.asp. 

VA Office of Inspector General 

15