VA Health Care: Actions Needed to Improve Monitoring and Oversight of Non-VA and Contract Care
Released: 2015-06-01T00:00:00


Highlights: section_title: Why GAO Did This Study
paragraphs: VA uses both the Non-VA Medical Care Program and clinical contracts to augment its delivery of care to veterans. GAO has previously highlighted weaknesses in the monitoring and oversight of both non-VA medical care and clinical contracts that remain unresolved.

This testimony is based on three GAO reports issued in 2013 and 2014 and addresses the extent to which VA monitors and oversees its (1) Non-VA Medical Care Program and (2) clinical contracts and contracted non-VA providers working in VA facilities. For all three reports, GAO reviewed relevant requirements and visited a total of 14 VA facilities. For its May 2013 report on the oversight and management of the Non-VA Medical Care Program, GAO reviewed non-VA medical care data from fiscal year 2008 through fiscal year 2012. For its October 2013 report on clinical contract monitoring and oversight, GAO administered a data collection instrument to CORs and reviewed 12 selected clinical contracts. For its March 2014 report on non-VA emergency medical care for veterans' non-service connected conditions, GAO reviewed 128 denied claims.

section_title: What GAO Found
paragraphs: GAO's recent work has found significant weaknesses in the Department of Veterans Affairs' (VA) monitoring and oversight of its Non-VA Medical Care Program. Through this program, care is provided to veterans by non-VA providers in non-VA facilities. As GAO reported in May 2013, VA did not collect data on wait times veterans face in obtaining care from non-VA providers. Having data on wait times for veterans referred to non-VA providers would help VA better determine if veterans are receiving comparable access to non-VA providers and VA-based providers. In addition, GAO found that VA was unable to analyze non-VA medical care data on all services and charges for an episode of care, which is the combined total of all care provided to a veteran during a single office visit or inpatient stay. As a result, VA cannot ensure that non-VA providers are billing VA appropriately for care or determine whether delivering care through non-VA providers is more cost-effective than augmenting its own capacity in areas of high utilization of non-VA medical care. Moreover, in March 2014 GAO reported that crucial limitations existed in VA's monitoring and oversight of non-VA medical care claims processing. Specifically, VA lacked automated processes for (1) determining whether claims met VA's criteria for payment and (2) notifying veterans when their claims were denied. Instead, these processes relied largely on the judgment and diligence of VA facility-based claims processing staff. For example, GAO found several non-VA medical care claims that were inappropriately denied because VA facility-based claims processing staff processed the claims under the wrong payment authority. Moreover, GAO found that VA's oversight was lacking in key aspects of the claims review process, a factor that allowed inappropriate denials and notification issues to persist.

GAO's recent work has also found significant limitations in VA's monitoring and oversight of clinical contracts and contractors—a method VA uses to bring non-VA providers into VA facilities. As GAO reported in October 2013, contracting officer's representatives' (COR) heavy workloads and inadequate training compromised VA's monitoring of contractor performance. CORs are responsible for monitoring the work of non-VA providers working in VA facilities under a contract once the contract is in place. CORs for 8 of the 12 contracts GAO reviewed in depth reported that the demands of their primary positions at the VA facility have at times prevented them from fully monitoring contract providers' performance. Six of these CORs stated that they could not complete certain elements of their COR responsibilities—such as adequately monitoring contract costs—due to limited time and resources. Robust VA oversight would better ensure that the contract providers deliver high quality care to veterans and fulfill the responsibilities of their contracts. In addition, CORs from the four VA facilities GAO visited noted weaknesses in VA's COR training and GAO's analysis confirmed these limitations. Specifically, GAO found this training focused on teaching CORs to develop contracts that purchase goods and not clinical services. The primary examples in this course included discussions of the contracting process for replacing carpet and making a large computer purchase. In addition, COR training included little information on how CORs should engage in post-award monitoring of clinical contractors.

section_title: What GAO Recommends
paragraphs: GAO made 22 recommendations to VA in its prior three reports related to improving (1) data on wait times and cost-effectiveness of non-VA medical care; (2) VA's oversight and monitoring of claims processing; and (3) VA's monitoring of clinical contractors. VA agreed with these recommendations, and has taken action on some, but has yet to fully implement many of them.

section_title: Letter
paragraphs: I am pleased to be here today to discuss our work on the Department of  Veterans Affairs’ (VA) delivery of care through both its Non-VA Medical  Care Program and clinical contracts. The majority of veterans enrolled in  the VA health care system receive care in VA-operated medical facilities,  such as VA medical centers and community-based outpatient clinics.  However, in order to meet the needs of the veterans it serves, VA is  authorized to obtain health care services from non-VA providers through  both the Non-VA Medical Care Program and clinical contracts. These  two mechanisms for accessing non-VA providers help to augment VA’s  delivery of services to veterans in different ways. The Non-VA Medical  Care Program allows VA to deliver care to veterans in non-VA facilities,  such as physicians’ offices and hospitals in the community, and pay for  this care using a fee-for-service arrangement. Clinical contracts are used  by VA to bring non-VA providers—such as physicians, pharmacists, and  nurses—into VA facilities to provide services to veterans. These contracts  can be used to fill vacancies for clinicians in specialties that are difficult to  recruit, supplement existing VA capacity by providing additional clinicians  in high-volume areas, or fill critical staffing vacancies on a long- or short- term basis. According to VA, every VA facility has at least one clinical  contract in place to help supplement the number of providers working in  VA medical facilities.

VA’s spending on the Non-VA Medical Care Program and the number of  veterans receiving care from non-VA providers have both risen  significantly in recent years. From fiscal year 2008 to fiscal year 2013, VA  spending on non-VA medical care rose from about $3 billion to about   $4.8 billion. Since 2013, VA has added two new components to its Non- VA Medical Care Program—the Choice Program and Patient-Centered  Community Care (PC3). With the addition of these new components, it is  anticipated that the number of veterans seeking care through the Non-VA  Medical Care Program will continue to grow. As such, it is increasingly  important for VA to incorporate robust oversight and accountability into  the administration of the program to address inefficiencies in non-VA  medical care delivery highlighted in recent reports by GAO and others.

VA’s oversight of clinical contracts used throughout the VA health care  system has also been shown to be limited. Previous studies highlighted  challenges VA has faced developing and administering its clinical  contracts. In recent years, for example, the VA Office of the Inspector  General highlighted challenges VA faces in developing its clinical  contracts and found systemic weaknesses in the process VA uses to  award contracts. These weaknesses were attributed to VA’s decentralized oversight of the initial stages of the contracting process  before a contract is awarded to a contractor. In an October 2013 report,  we found that VA’s oversight of clinical contractors is inadequate once a  contract is awarded and contract providers begin caring for veterans in  VA facilities.

Today, I will summarize the results of recent GAO work examining  weaknesses in the oversight of VA’s Non-VA Medical Care Program and  clinical contracts. Specifically, I will address the extent to which (1) VA  monitors and oversees its Non-VA Medical Care Program and (2) VA  monitors and oversees clinical contracts and the work of contracted non- VA providers working in VA facilities. we issued in March 2014 and May 2013 examining the Non-VA Medical  Care Program, and October 2013 examining clinical contracts.

My comments are based on reports  For the March 2014 report, which focused on VA’s administration and  oversight of emergency care for conditions not related to veterans’  service-connected disabilities provided under the Veterans Millennium  Health Care and Benefits Act (Millennium Act) and delivered to veterans  by non-VA providers, we reviewed the law, its implementing regulations,  and applicable VA policies and guidance to identify applicable  requirements for processing these claims. We then visited four VA facilities that were selected on the basis of fiscal year 2012 spending  totals and geographic location and reviewed VA documents—including  128 emergency care claims for veterans with non-service connected  conditions that these four facilities had denied in fiscal year 2012. We  also interviewed officials from VA, non-VA providers, and veterans’  service organizations.

Because the Choice Program and PC3 are recently-added components to VA’s Non-VA  Medical Care Program and we have not reviewed them, this statement will be confined to  discussing existing non-VA medical care delivery mechanisms that existed prior to 2013.  To date, Choice Program and PC3-related claims represent a small portion of the   $4.8 billion VA currently spends on non-VA provider care.

For the May 2013 report, which focused on VA’s management and  oversight of non-VA medical care spending and utilization, we reviewed  relevant laws and regulations, VA policies, and spending and utilization  data on non-VA medical care from fiscal years 2008 through 2012. We  also interviewed VA officials and examined the non-VA medical care  operations at six selected VA facilities that varied in size, services offered,  and geographic location. The results of both of these studies cannot be  generalized to all VA facilities, but illustrate the serious weaknesses in  various aspects of the Non-VA Medical Care Program.

For the October 2013 report, which focused on VA’s monitoring and  oversight of clinical contracts and contractors, we reviewed relevant laws,  regulations, and VA policies. We also interviewed VA officials and  examined clinical contract monitoring efforts in place—including an in- depth review of 12 clinical contracts—at four selected VA facilities that  varied in the types of clinical contracts used and geographic location. The  results of this study cannot be generalized to all VA facilities, but  illustrates serious weaknesses in VA’s monitoring and oversight of non- VA providers caring for veterans in VA facilities through clinical contracts.

We have made 22 recommendations to VA in these previous reports, and  VA concurred with all of them. We are not making any new  recommendations at this time. From January to May 2015, we periodically  met with VA officials to discuss the status of VA’s implementation of the  recommendations in these three reports.

The work this statement is based on was conducted in accordance with  generally accepted government accounting standards. Those standards  require that we plan and perform the audit to obtain sufficient, appropriate  evidence to provide a reasonable basis for our findings and conclusions  based on our audit objectives. We believe that the evidence obtained  provides a reasonable basis for our findings and conclusions based on  our audit objectives. The reports cited provide additional information on  our scope and methodology.
subsections: section_title: Background
subsections: section_title: Non-VA Medical Care Program
paragraphs: There are two main non-VA medical care delivery methods— preauthorized care and emergency care—that are approved using two  different processes. The first, preauthorized care, is approved in advance  by VA facility officials. VA may authorize veterans to seek care from non- VA providers for a number of reasons, including when (1) wait times for  appointments at VA facilities exceed VA standards; (2) the distance  veterans must travel to VA facilities is impractical for the veteran; and   (3) VA facilities do not offer the medical services the veteran needs.  Preauthorized care accounts for the majority of spending and utilization  (about 60 percent of spending and about 88 percent of utilization) for the  Non-VA Medical Care Program. The second, emergency care, is not  typically approved in advance by VA facility officials and has certain  criteria that must be met in order for VA to approve reimbursement for the  non-VA provider. (See table 1.)

Preauthorizing non-VA medical care involves a multistep process  conducted by the VA facility that regularly serves a veteran. The  preauthorization process is initiated by a VA provider who submits a  request for non-VA medical care to the VA facility’s non-VA medical care  unit, which is an administrative department within each VA facility that  processes VA providers’ non-VA medical care requests and verifies that  non-VA medical care is necessary. Once approved by the VA facility’s  Chief of Staff or his or her designee, the veteran is notified of the approval  and can choose any non-VA provider willing to accept VA payment at  predetermined rates. (See fig. 1.)

section_title: VA Clinical Contracting
paragraphs: Both acquisition and clinical staff at VA work together to plan, execute,  and monitor clinical contracts at VA. On the acquisition side, contracting  officers (CO) are responsible for planning, awarding, and administering  contracts on behalf of the federal government. Each CO is authorized to  obligate federal funds up to a specified limit and a CO must formally  approve all clinical contracts at VA. Common tasks of a CO include  developing acquisition planning documents used to begin a clinical  contract, conducting market research to determine pricing and availability  for a clinical contract, and completing the formal competitive or non- competitive solicitation process for contracts. Each CO works within a  network contracting office and is overseen by managers within that office  who report directly to VA Central Office. There are 21 network contracting  offices throughout VA’s health care system that manage all the  contracting activities of a single VISN.

For each VA clinical contract, the CO responsible for the contract  designates a contracting officers’ representative (COR) at the VA facility  to help develop the clinical contract and monitor the contract provider’s  performance once the provider begins work. Common tasks delegated to  the COR include providing input on the performance requirements for the  clinical contract, determining how the contract provider’s performance will  be measured and monitoring performance once work has begun,  validating the contract provider’s invoices to ensure their accuracy,  managing contract modifications, and assisting the CO in resolving any  issues that may arise with the contract provider. At VA, CORs are  commonly administrative personnel responsible for managing the  operations of a specialty care line at a VA facility—such as primary care  and surgery—where the contractor will be working. CORs are responsible  for maintaining the official record of the contract provider’s performance  and providing official performance assessments to the CO.

VA Central Office has primary responsibility for overseeing network  contracting offices and manages clinical contracting activities through the  Veterans Health Administration (VHA) Procurement and Logistics  Office. There are five primary offices within the VHA Procurement and  Logistics Office that are responsible for overseeing various aspects of  clinical contracting activities and report to VHA’s Deputy Chief  Procurement Officer. (See fig. 3.)

Medical Sharing Office. The Medical Sharing Office is responsible for  providing guidance to network contracting offices regarding the content  and structure of solicitations for clinical contracts and for reviewing  several types of clinical contracts. The Medical Sharing Office reviews  solicitations of all competitive clinical contracts valued at over $1.5 million,  all non-competitive clinical contracts valued at over $500,000, and all  organ transplant contracts.

All Medical Sharing Office reviews are  conducted before a solicitation is issued to ensure that all the necessary  provisions are in place prior to any competition or award.

Procurement Operations Office. The Procurement Operations Office is  responsible for providing ongoing guidance and monitoring of the COR  population at VA. The Procurement Operations Office conducts reviews  of COR files and publishes a COR newsletter.

Procurement Audit Office. The Procurement Audit Office is responsible  for ensuring compliance with VA policies and procedures related to  contracting. This office conducts internal compliance audits of contracts,  including clinical contracts, once they are executed to ensure that all  required documentation was included in the final contract and audits the  activities of network contracting offices and Service Area Offices (SAO) to  ensure their compliance with VA policies and regulations.

Procurement Policy Office. The Procurement Policy Office is  responsible for providing guidance to VA’s acquisition workforce in  network contracting offices and SAOs. This office produces and updates  standard operating procedures for CORs and COs.

Service Area Offices. SAOs are the regional contract management  entities created to oversee the activities of the 21 network contracting  offices and the COs and supervisors that work within them. VHA created  three SAOs—East, West, and Central—to manage the contracting  activities of six to eight VISNs each. SAOs review solicitations for most  clinical contracts during their initial stages to ensure that all necessary  provisions are in place prior to any competition or award.

section_title: Significant Weaknesses Exist in VA’s Monitoring and Oversight of Non-VA Medical Care
subsections: section_title: VA Lacks Critical Data on Wait Times and Cost- Effectiveness of Non-VA Medical Care
paragraphs: As our recent work has found, critical data limitations related to the wait  times veterans face in obtaining care from non-VA providers and the cost- effectiveness of such services hinder VA’s efforts to oversee the Non-VA  Medical Care Program in an effective manner.

VA does not collect data on how long veterans must wait to be seen by  non-VA providers. We previously found that the amount of time veterans  wait for appointments in VA facilities influenced VA’s utilization of non-VA  medical care. For example, in our May 2013 report, VA officials from all  six facilities we reviewed reported that they routinely referred veterans to  non-VA providers to help ensure that veterans receive timely care and  their facilities meet performance goals for wait times for VA facility-based  care. Officials from one of these VA facilities explained that veterans  needing treatment in several specialties—including audiology, cardiology,  and ophthalmology—were referred to non-VA providers for this reason.

In fiscal year 2012, VA performance goals for wait times for care in VA  facilities called for veterans’ primary care appointments to be completed  within 7 days of their desired appointment date and veterans’ specialty  care appointments to be scheduled within 14 days of their desired  appointment date. However, since VA did not track wait times for non-VA  providers, we found that little was known about how often veterans’ wait  times for non-VA medical care appointments exceeded VA facility-based  appointment wait time goals. Officials from one VA facility we reviewed  explained that non-VA providers in their community also faced capacity  limitations and may not be able to schedule appointments for veterans  any sooner than the VA facility.

We recommended in May 2013 that VA analyze the amount of time  veterans wait to see non-VA providers and apply the same wait time  goals to non-VA medical care that have been used to assess VA facility- based wait times. VA concurred with this recommendation and detailed its  plan to create a national consolidated monthly wait time indicator to  measure performance for non-VA medical care referrals. In February  2015, VA reported that this monthly indicator had been developed and  rolled out as a part of the Non-VA medical care coordination initiative.  This monthly indicator tracks the number of veterans whose appointments  with a non-VA provider are scheduled within 90 days—including  generating the veterans’ authorization to receive the care, scheduling the  appointment with the non-VA provider, and receiving the veterans’  medical records from the non-VA provider after the appointment is held.  However, this indicator only partially implements our recommendation  because it does not use the same wait time measures for non-VA medical  care as are used for VA facility-based care.

section_title: VA Cannot Analyze the Cost-Effectiveness of Non- VA Medical Care
paragraphs: Our recent work found that limitations in the way VA collects non-VA  medical care data did not allow the Department to analyze the cost- effectiveness of non-VA medical care provided to veterans. As we  reported in May 2013, we found that VA lacked a data system to group  medical care delivered by non-VA providers by episode of care—a  combined total of all care provided to a veteran during a single office visit   For example, we reported that during an office visit to  or inpatient stay.an orthopedic surgeon for a joint replacement evaluation, an X-ray of the  affected joint may be ordered, the veteran may be given a blood test, and  the veteran may receive a physical evaluation from the orthopedic  surgeon. The non-VA provider would submit a claim to VA for the office  visit and the radiologist that X-rayed the affected joint and the lab that  performed the veteran’s blood test would submit separate claims.  However, VA’s non-VA medical care data system was not able to link the  charges for these three treatments together. We found that this left VA  without data for comparing the total non-VA medical care costs for  various types of services with the VA facility-based alternative.

Without cost-effectiveness data, we concluded that VA is unable to  efficiently compare VA and non-VA options for delivering care in areas  with high utilization and spending for non-VA medical care. Two VA  facilities we reviewed had undertaken such assessments of whether  services should be provided through non-VA medical care or through an  expansion of facility-based care, despite the limitations of current data.

Officials at one facility reported that they expanded their operating room  capacity to reduce their reliance on non-VA surgical services, saving an  estimated $18 million annually in non-VA medical care costs. Similarly,  officials from the second facility reported that they were able to reduce  their reliance on non-VA medical care by hiring additional VA staff and  purchasing additional equipment to perform pulmonary function tests, an  effort that reduced related non-VA medical care costs by about $112,000  between fiscal years 2010 and 2012. We also found that the lack of non- VA medical care data available on an episode of care basis prevents VA  from efficiently assessing the appropriateness of non-VA provider  reimbursement. Specifically, VA officials cannot conduct retrospective  reviews of VA facilities’ claims to determine if the appropriate rate was  applied for the care provided by non-VA providers.

We recommended in May 2013 that VA establish a mechanism for  analyzing the episode of care costs for non-VA medical care. VA  concurred with this recommendation and noted that the Department  agrees that analyzing episode of care costs is an important part of its  non-VA medical care monitoring activities. In February 2015, VA reported  that a mechanism to analyze non-VA medical care costs on an episode of  care basis would not be instituted until a planned redesign of the  Department’s non-VA medical care data systems is completed in fiscal  year 2016. As a result, this recommendation remains unimplemented.

section_title: VA Lacks Automated Processes for Monitoring Non-VA Medical Care Claims Processing and Has Limited Oversight Mechanisms for Validating VA Facility Actions
paragraphs: Our recent reports have found that crucial limitations exist in VA’s  monitoring and oversight of non-VA medical care claims processing.  Specifically, VA does not have automated systems to help VA facility- based claims processing staff determine whether a non-VA medical care  claim is eligible for payment or notifying veterans that their claims have   In addition, VA’s oversight mechanisms—including field  been denied.assistance visits to VA facilities processing non-VA medical care claims  and audits of VA facilities’ claims determinations—are limited due to  weaknesses in their execution.

As we reported in March 2014, we found that there were no automated  processes for determining whether a claim for non-VA medical care  meets criteria for payment or ensuring that veterans are notified when a  claim is denied.and diligence of VA facility-based claims processing staff reviewing each  claim and their adherence to VA policies. We found that there were a  number of steps in the claims review process that were susceptible to  errors that could lead to inappropriate denials of non-VA medical care  claims. For example, we found nine instances where a veteran’s claim  was denied under VA’s emergency care authority for non-service  connected conditions, but should have been paid under VA’s  preauthorized non-VA medical care authority because a VA clinician had   Instead these processes rely largely on the judgment  referred the veteran to the non-VA provider. We found that in eight of  these nine cases, VA facility-based personnel failed to complete critical  steps in the non-VA medical care authorization process that impacted the  information available to claims processing staff later in the process and  without an automated process to prompt these claims processing staff to  check for additional information, these claims were inappropriately  denied.

In addition, according to VA policy, the Department must notify veterans  in writing about denied claims and their appeal rights. However, as we  reported in March 2014, we found that one VA facility we visited could not  produce documentation of veteran notification for any of the 30 denied  claims we reviewed. We concluded that when veterans are not informed  that their claims for non-VA medical care have been denied and VA has  inappropriately denied the claims, veterans could become financially  liable for care that VA should have covered. Under such circumstances,  veterans’ credit ratings may be negatively affected and they may face  personal financial hardships if they are unable to pay the bills they receive  from non-VA providers. Taken together, the absence of systematic  processes for completing these actions significantly reduces the  assurance VA Central Office has that VA facility-based claims processing  staff can consistently make accurate determinations about whether or not  to pay non-VA medical care claims and notify veterans of their appeal  rights in the case of denials.

In March 2014, we made six recommendations aimed at improving VA’s  processing of non-VA medical care claims, specifically emergency care  claims for conditions not related to veterans’ service-connected  disabilities. These recommendations directed the Department to establish  or clarify its policies and take other actions to improve VA facilities’  compliance with existing policy requirements. VA concurred with these six  recommendations. Based on updates we have received on VA’s  implementation of these recommendations, we believe VA has fully  implemented two of the six recommendations related to properly dating  incoming claims and verifying that claims are submitted to the correct VA  facility. However, we believe that for the remaining four of these  recommendations, additional steps are needed to revise VA policies on  claims processing roles and responsibilities. These unimplemented  recommendations are related to VA’s non-VA medical care policies and  procedures for processing claims and notifying veterans when claims are  denied.

One of VA’s primary methods for monitoring its facilities’ compliance with  non-VA medical care claims processing requirements is field assistance  visits. As we reported in March 2014, we found a number of limitations in  their use as an oversight mechanism. First, we found that VA’s criteria for  selecting facilities for field assistance visits may not direct VA to those  facilities most in need of this oversight because VA does not take into  account the accuracy of claims processing activity when selecting  facilities for review. Instead, we found that VA selected the 30 VA facilities  that received a field assistance visit in fiscal year 2013 based on their  claims processing timeliness. With a limited focus on the timeliness of  claims processing and without attention to the accuracy of claims  decisions, we concluded that VA Central Office does not have the  opportunity to assist VA facilities in making accurate decisions that may  impact veterans financial well-being. Second, we found that the checklist  VA uses for its field assistance visits does not examine all practices that  could lead VA facilities to inappropriately deny claims. For example, VA’s  checklist does not examine VA facilities’ practices for determining  whether veterans are enrolled at a different VA facility and whether they  have been seen by providers at another VA facility in the last 24  months—a critical criterion for determining whether veterans are eligible  for emergency care coverage for non-service connected conditions.  Finally, we found that VA does not hold facilities accountable for  correcting deficiencies identified during these visits, and it does not  validate facilities’ self-reported corrections to deficiencies identified during  these visits. Specifically, in our review of fiscal year 2012 and 2013 field  assistance visit data, we found that some VA facilities had unresolved  problems in their fiscal year 2013 field assistance visit that had originated  and were identified during their fiscal year 2012 field assistance visit.

In March 2014, we made two recommendations aimed at revising the  scope of field assistance visits and ensuring that deficiencies identified  during these visits are corrected. VA concurred with both of these  recommendations. VA has made some progress in implementing these  recommendations as of May 2015 by expanding the topics covered  during field assistance visits and updating their standard operating  procedures. However, we believe that VA needs to undertake additional  actions to sufficiently address them. Specifically, VA needs to ensure field  assistance visits include a review of a sample of processed claims in  order to determine whether staff are complying with claims processing  requirements.

Our recent work has also found that VA has no systematic process for  auditing claims to ensure that they were appropriately approved or  denied. VA officials stated that they recommend, but do not require, that  managers of VA facility-based non-VA medical care claims processing  units audit samples of processed claims—including both approved and  denied claims—to determine whether staff processed claims  appropriately. However, in March 2014 we found that VA did not know  how many VA facilities conducted such audits and none of the four VA  facilities we visited reported conducting them.

Therefore, in March 2014, we recommended that VA institute systematic  audits of the appropriateness of claims processing decisions. VA  concurred with this recommendation and has made some progress  implementing it as of May 2015 by instituting audits of some paid claims.  However, we believe that to fully implement this recommendation, VA  needs to undertake additional action. Specifically, VA needs to establish  systematic audits of claims processing decisions—including both  approvals and denials—made by VA facility-based claims processing  staff.

section_title: Significant Limitations Exist in VA’s Monitoring and Oversight of Clinical Contracts and Contractors
subsections: section_title: Contract Monitoring Is Limited by Heavy COR Workloads and Inadequate Training
paragraphs: As we reported in October 2013, we found that CORs cited two  challenges that may compromise VA’s monitoring of contractors’  performance—the heavy workload associated with the COR position and  the lack of adequate training for CORs.

Relating to workload, CORs at the four VA facilities we visited for our  2013 review consistently reported facing significant challenges in  effectively carrying out their COR responsibilities for monitoring clinical  contractors. One challenge cited by the majority of CORs we met with  (37 of 40 that completed our data collection instrument) was the  assignment of the COR role as a collateral duty. Many of these CORs’  primary positions require them to manage staff, maintain budgets, and  oversee other clinical providers. We found that the average COR spends  about one-quarter of his or her time monitoring approximately 12  contracts, according to estimates provided by the CORs; however, some  of these CORs were responsible for overseeing significantly more  contracts. For example, we found that 6 of these 40 CORs managed  nearly 190 of the 452 (41 percent) contracts in place at the four VA  facilities we reviewed and told us they estimated spending at most   30 percent of their work time on their COR duties. In addition, we found  that the CORs responsible for managing the 12 contracts we reviewed in  depth frequently did not have the time to effectively monitor the  performance of contract providers. Specifically, CORs for 8 of the 12  contracts reported that the demands of their primary positions had at  times prevented them from fully monitoring contract providers’  performance. In addition, CORs for 6 of these 12 contracts stated that  they could not complete certain elements of their COR responsibilities— such as adequately monitoring contract costs—due to limited time and  resources.

VA guidance requires VA facilities to provide CORs with the time to  complete their responsibilities and ensure that contract compliance is  managed by a knowledgeable COR. Specifically, VA’s standard operating  procedure for CORs requires VA facilities to provide CORs with the time  and resources necessary to complete required training and fulfill their  duties as a COR. In addition, to monitor clinical contracts effectively,  CORs are required to perform a number of key functions—including  completing quarterly reports on contract progress, quality assurance, and  invoice audits. However, we found that VA’s guidance related to COR  responsibilities did not include any information on how VA facilities are to  determine the feasibility of whether a COR’s workload—including both  COR and primary position responsibilities—will allow them to carry out  their tasks as CORs for monitoring contract provider performance. The  COR standard operating procedure also did not provide any guidance for  determining when COR duties should be assigned as a collateral duty or  a full-time responsibility. We concluded that without clear guidance on  how to determine a COR’s workload, VA facilities can unintentionally  assign COR duties to a staff member who does not have the time  available to properly monitor clinical contractors. If CORs’ workloads  prevent proper monitoring of clinical contracts, VA risks missing the  opportunity to proactively identify and correct performance issues with  contract providers and to recognize patient safety concerns potentially  resulting from contract providers’ actions. By failing to identify  performance concerns with contract providers, VA could unknowingly be  receiving sub-standard service from these contractors, continue to  receive services from these contract providers that do not meet the needs  of the VA facilities, and risk patient safety problems when these contracts  are extended for additional years.

In October 2013, we recommended that VA revise its standard operating  procedures for CORs to provide guidance on the number of contracts,  based on size and complexity, each COR should manage to ensure that  all CORs maintain a workload that allows them to fulfill their duties as a  COR and their primary position responsibilities. VA concurred with this  recommendation and detailed plans to revise existing COR standard  operating procedures to include guidance on the number of contracts,  based on size and complexity, that each COR should manage to ensure  that all CORs maintain a workload that allows them to fulfill their duties as  a COR and their primary position responsibilities. However, in April 2015,  VA Central Office officials informed us that the Department no longer  plans to revise these standard operating procedures in this manner, and  plans instead to place language in the COR nomination letter that states  that the COR and their supervisor discussed their workload and  determined they could effectively serve as the COR for the contract. We  believe that to fully implement our recommendation, VA needs to provide  guidance to CORs and their supervisors through a revision to the COR  standard operating procedures that provides guidance on the number and  type of contracts each COR should manage to ensure that VA facilities  and CORs can better make these determinations.

Relating to training, CORs from the four VA facilities we visited noted  weaknesses in VA’s COR training courses and our own analysis of these  courses confirmed these limitations. Specifically, over half of the 40  CORs from the four VA facilities we visited for our October 2013 review  responded that either their COR training did not prepare them for their  role as a COR or were neutral on whether or not this training was helpful  preparation. In addition, CORs for 8 of the 12 contracts we reviewed in  depth did not find the required COR training helpful or applicable to VA  clinical contracting. For example, one COR stated that the training  covered very broad areas of contracts and did not include specific  information on which kinds of contracts need detailed quality assurance  plans or information on how to manage a clinical contract rather than a  supply contract. In addition, a few CORs stated that the instructors for  their training courses had limited knowledge of clinical contracting.

We also reviewed the content of VA’s 32-hour COR training course  administered by the VA Acquisition Academy and found that this course  had several limitations in preparing CORs to manage clinical contracts in  VA facilities, including the following:

Focused on contracts that buy goods, not services. The primary  examples used in the course did not include a discussion of clinical  contracts at VA and instead walked students through the contracting  process using examples such as replacing carpet and making a large  computer equipment purchase. There were no examples focused on  how to evaluate or measure the quality of services provided by a  contract provider in a VA facility’s clinical setting.

Included little information on monitoring responsibilities. The  course content included limited information for CORs on post-award  monitoring responsibilities for clinical contracts and instead was  heavily weighted to discussing the pre-award development of a  contract.

To supplement this required course, VA’s Medical Sharing Office in June  2013 developed and implemented an 8-hour training course for CORs  managing clinical contracts. However, VA did not require this course be  completed by all CORs managing clinical contracts.covered primarily pre-award contract development responsibilities of  CORs and did not include any significant information on the post-award  monitoring responsibilities of CORs managing clinical contracts.

In October 2013, we recommended that VA modify its COR training to  ensure it includes examples and discussion of how to develop and  monitor service contracts—including contracts for the provision of clinical  care in VA facilities. VA concurred with this recommendation. In August  2014, VA provided us with a copy of its revised training modules for  CORs and notified us the Department intends to require this training for  all CORs.

section_title: VA’s Oversight of VA Facility Clinical Contract Monitoring Is Limited
paragraphs: Our recent work has also found that VA has not established a robust  method for overseeing the monitoring of clinical contractors by COs and  CORs throughout its health care system. Our October 2013 report found  that VA’s primary oversight entity for health care contracting activities, the  VHA Procurement and Logistics Office, has a limited role in overseeing  the monitoring actions of COs and CORs once a contract has been  approved and initiated at a VA facility. The VHA Procurement and  Logistics Office conducts limited oversight of contracting activities  throughout the VA health care system through its SAOs and Procurement  Operations Office.

Service Area Offices. According to officials from the three SAOs we  interviewed for our October 2013 report, the role of the three SAOs in  clinical contract monitoring is limited to an audit of the records COs  maintain in VA’s electronic Contract Management System. These  reviews focus only on the completeness of COs’ electronic contracting  files—including documentation that a COR with current training  records was assigned to the contract. SAO electronic Contract  Management System audits did not include any reviews of CORs’  monitoring of clinical contractors.

Procurement Operations Office. The VHA Procurement and  Logistics Office’s Procurement Operations Office is the only entity  responsible for overseeing the monitoring activities of CORs;  however, the reviews conducted by this office were limited to a remote  electronic documentation review of a small sample of COR files.  Prior to the release of our October 2013 report, officials from the  Procurement Operations Office told us that to select COR files for  these reviews, a Procurement Operations Office staff member aims to  select 25 COR files for active contracts per network contracting  office—about 2.1 percent of clinical contracts in an average VISN if all  25 selected COR files are for clinical contracts. VA officials told us  that, while the Procurement Operations Office sets a goal to review  COR files from two network contracting offices each month, since  implementing the program in March 2013 these reviews had been  completed in only four network contracting offices and none of these  four offices had received feedback on the outcomes of these reviews  as of August 2013. These reviews also had a narrow focus on the  completeness of COR files because the Procurement Operations  Office staff member reviewing the files relies on a checklist to verify  the presence or absence of required documentation of COR  monitoring activities and does not review the quality of information  contained within a COR’s records.

We concluded that the limited review schedule and narrow focus on file  completeness did not allow the Procurement Operations Office to  comprehensively assess the monitoring activities of COs and CORs  throughout VA’s health care system. Without a robust monitoring system  in place, VA cannot be reasonably assured that all CORs in all VA  facilities are monitoring clinical contractors and maintaining the proper  records of their efforts to monitor the activities of clinical contractors  caring for veterans.

We recommended in October 2013 that VA increase its oversight of COs  and CORs by ensuring that post-award contracting files are regularly  reviewed for all network contracting offices. VA concurred with this  recommendation and noted that the Department would revise COR  standard operating procedures to ensure that regular reviews of post- award contract files from all network contracting offices are conducted.  While VA has made progress in implementing this recommendation by  completing 45 more reviews of COR files in fiscal year 2014 than in fiscal  year 2013, these reviews were still only conducted in 5 of the 21 network  contracting offices. We believe that to fully implement this  recommendation VA needs to ensure that a sample of COR files are  reviewed from all network contracting offices.

Chairman Coffman, Ranking Member Kuster, and Members of the  Subcommittee, this completes my prepared statement. I would be  pleased to respond to any questions that you may have.

section_title: GAO Contact and Staff Acknowledgments
paragraphs: If you or your staffs have any questions about this statement, please  contact me at (202) 512-7114 or williamsonr@gao.gov. Contact points   for our Offices of Congressional Relations and Public Affairs may be  found on the last page of this statement. GAO staff who made key  contributions to this statement include Marcia A. Mann, Assistant Director;  Jackie Hamilton; Katherine Nicole Laubacher; and Emily Ryan.

This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.


Question-summary annotations: questions: question: What has GAO's review of the VA found?
answer: GAO's recent work has also found significant limitations in VA's monitoring and oversight of clinical contracts and contractors—a method VA uses to bring non-VA providers into VA facilities.

question: How was VA contractor monitoring compromised?
answer: As GAO reported in October 2013, contracting officer's representatives' (COR) heavy workloads and inadequate training compromised VA's monitoring of contractor performance.

question: What role do CORs play in contractor monitering?
answer: CORs are responsible for monitoring the work of non-VA providers working in VA facilities under a contract once the contract is in place.
child_questions: question: What prevents CORs from executing their duties properly?
answer: CORs for 8 of the 12 contracts GAO reviewed in depth reported that the demands of their primary positions at the VA facility have at times prevented them from fully monitoring contract providers' performance. Six of these CORs stated that they could not complete certain elements of their COR responsibilities—such as adequately monitoring contract costs—due to limited time and resources.

question: How could these challenges be addressed?
answer: Robust VA oversight would better ensure that the contract providers deliver high quality care to veterans and fulfill the responsibilities of their contracts. In addition, CORs from the four VA facilities GAO visited noted weaknesses in VA's COR training and GAO's analysis confirmed these limitations. Specifically, GAO found this training focused on teaching CORs to develop contracts that purchase goods and not clinical services.

question: How thoroughly does CORs training explain how to engage in monitoring of clinical contractors?
answer: In addition, COR training included little information on how CORs should engage in post-award monitoring of clinical contractors.

questions: question: What issues in the VA does this report cover?
answer: This testimony is based on three GAO reports issued in 2013 and 2014 and addresses the extent to which VA monitors and oversees its (1) Non-VA Medical Care Program and (2) clinical contracts and contracted non-VA providers working in VA facilities.

question: How did GAO source data for their three reports?
answer: For all three reports, GAO reviewed relevant requirements and visited a total of 14 VA facilities.
child_questions: question: What specific data did GAO collect?
answer: For its May 2013 report on the oversight and management of the Non-VA Medical Care Program, GAO reviewed non-VA medical care data from fiscal year 2008 through fiscal year 2012. For its October 2013 report on clinical contract monitoring and oversight, GAO administered a data collection instrument to CORs and reviewed 12 selected clinical contracts. For its March 2014 report on non-VA emergency medical care for veterans' non-service connected conditions, GAO reviewed 128 denied claims.