VHA CLAIMS PAYMENT BACKLOG CONTINUES: TIME IS OF THE ESSENCE

March 10, 2016 6:22 pm Published by

 

Never leave that till tomorrow which you can do today.

Benjamin Franklin.
One of the most exposed issues within the VHA involves unresponsiveness and timeliness of the VA Fee Basis unit. An Audit of the VA’s Financial Statements for Fiscal Years 2015 and 2014 revealed frightening results. According to the Audit, CliftonLarsonAllen, LLP–the accounting firm the VA employed to perform the audit–reported that the VA was in substantial noncompliance with applicable Federal financial management systems requirements and the United States Standard General Ledger at the transaction level under the Federal Financial Management Improvement Act.  his very recent audit demonstrates the VA’s financial structure is damaged and is likely contributing and exacerbating other issues such as the timeliness of the claims payment process within the VA.
In 2015, a bipartisan group of U.S. Senators called for an independent probe of how the Veteran Affairs Department is handling backlog of veterans’ disability claims. A report was released noting that 56 VA regional offices are coping with 461,000 claims, about 188,000 of which have been pending for more than 125 days. Below is a chart that illustrates pending claims versus backlogged claims:
pending-vs-backlogged-claims

(Source: Government Executive)

As you can see, the VA has suffered from a backlog problem with veteran disability claims since 2000. Please note that these statistics do not include health care claims. As of current, the VA still suffers from a backlog problem and has yet to reach a year where there are zero backlogged claims as they had in 1994 and 1996. These delinquent claims include claims that have not been timely processed for payments. These issues carry legal consequences. Failure to timely adjudicate claims results not only in violating the VHA’s own directive but also Federal Law.

If the VA is going to violate their own policy, how are they going to hold themselves accountable for their mistakes and errors?

 

VA CLAIMS PAYMENT PROCESS

To fully appreciate and understand this article, it is important to understand how the VA’s payment process operates. There are many variables that may delay or change the order of this process, but generally, the payment process begins and follows as outlined below:

  1. VA facility authorizes payment at the VA facility.
  2. Payment information is entered into the VistA Fee Basis System where authorizations are entered and vendor updates are made.
  3. Claim enters the Central Fee System where the payment file is generated.
  4. The claim then makes it to the Financial Management System (FMS) where the payment is processed and a disbursement schedule is created.
  5. The claim then makes its way to the Treasury where the reimbursement schedule is received and a Pre-edit acknowledgement is made.
  6. An email is then sent to the VA certifying officer who reconciles VA Transmit and Treasury Disbursement Schedule.
  7. Once reconciled, the claim goes back to the Treasury to confirm schedule through Secure Payment Systems and then payment is disbursed.
  8. Payment then goes to the vendor.

It is important to note that the time frame from when the claim enters into the Central Fee System to the VA Certifying officer should only take 24 hours or less.
 

THE VA ROUTINELY FAILS TO ABIDE BY THEIR OWN POLICIES.

The VA maintains internal procedures and policies that are intended to ensure compliance and efficiency within the VA. One such directive states the VA’s policy on the timeliness. According to VHA Directive 2010-005:
POLICY: It is VHA policy that 90 percent of all non-VA health care claims are processed within 30 days of the date the claim is received by the facility. (VHA directives remain in effect for 5 years. After a FOIA request from our office, the VA has not issued a current directive to replace this one)

The VA explicitly provides and guides the VA in the timeline for processing veteran claims. There is absolutely zero ambiguity in the VHA’s directive. Yet, the number of backlogged and past due claims remains at frightening levels. Not only does this directive provide a general policy, it also provides the responsibilities and roles of VA personnel to ensure proper timely adjudication and processing.
Technically, each and every claim that is processed later than 30 days and “backlogged” is in direct violation of the VHA’s own directive. The intent of this directive is to prevent the problem the VA is currently experiencing. If the VA is going to violate their own policy, how are they going to hold themselves accountable for their mistakes and errors?
 

THE VA HAS BEEN AND IS CURRENTLY VIOLATING THE FEDERAL PROMPT PAYMENT ACT.

Pursuant to 31 U.S. Code § 3903:
a) The Director of the Office of Management and Budget shall prescribe regulations to carry out section 3902 of this title. The regulations shall-
(1) provide that the required payment date is-
(A) the date payment is due under the contract for the item of property or service provided; or
(B) 30 days after a proper invoice for the amount due is received if a specific payment date is not established by contract;
According to this act, the VA is required by federal law to provide reimbursement to non-VA providers within 30 days after the provider submits a proper claim. The VA has been voluntarily violating this federal law since 2000 as illustrated in the chart above. Of course violating laws always follows with consequences.
31 U.S. Code § 3902 provides:
(a) Under regulations prescribed under section 3903 of this title, the head of an agency acquiring property or service from a business concern, who does not pay the concern for each complete delivered item of property or service by the required payment date, shall pay an interest penalty to the concern on the amount of the payment due. The interest shall be computed at the rate of interest established by the Secretary of the Treasury, and published in the Federal Register, for interest payments under section 7109(a)(1) and (b) of title 41, which is in effect at the time the agency accrues the obligation to pay a late payment interest penalty.
In the context of the VA, for each backlogged and past due claim, interest will accrue on top of the amount originally submitted from the provider for reimbursement. Therefore, it is costing the VHA potentially hundreds of thousands of dollars in accrued interest as a result of the VA’s timeliness issues. The case study below will illustrate the VA’s inconsistencies and payment process in detail.

Despite VISN 21’s Compliance and Business Integrity Officer’s outstanding efforts, the individual AOJ’s within VISN 21 are neglecting to respond to requested payment updates.

 

CASE STUDY: CLAIMS PAYMENT PROCESSING ONCE CLAIMS ARE AUTHORIZED FOR PAYMENT.

Our office recently received payment confirmation from the VISN 21 Sierra Pacific Network for numerous claims that have been backlogged and past due over a year. However, Once these claims have been confirmed and have been put in a “will pay status”, for 90 percent of the claims confirmed for payment, VISN 21 AOJ’s have failed to provide any kind of requested timeline for reimbursement.
There are also approximately 23 claims that VISN 21 AOJ’s have approved for payment since January 1, 2016 and have currently failed to provide payment or even a timeline for payment. This is on top of the past due nature of these claims that have been backlogged and neglected since the original claim was submitted to the VA for payment reimbursement. However, VISN 21, who is responsible for these claims, has demonstrated exceptional and outstanding oversight over these claims. VISN 21’s Compliance and Business Integrity Officer is currently aggressively tackling their backlog issue to ensure compliance and remediate any deficiencies at VISN 21. Our office has successfully resolved some of these claims within VISN 21. They set a great example for how the VA should handle backlogged claims to ensure compliance.
However, despite VISN 21’s Compliance and Business Integrity Officer’s outstanding efforts, the individual AOJ’s within VISN 21 are neglecting to respond to requested payment updates. As a result of VISN 21’s AOJ noncompliance, our office has prepared to submit a formal complaint to Chief Business Officer, Stephanie Mardon at the VHA Central Business Office to initiate an investigation as to why VISN 21’s AOJ’s have been delaying payment for so long.
It is difficult to trust someone who breaks a promise. Consider a situation where someone repeatedly fails to fulfill something they claim they will do. This is precisely the conduct VISN 21 AOJ’s are engaging in when they state that a claim will be paid and remain silent with no payment adjudication within the statutory timeframe.
Within the same vein as the VA’s timeliness issues is the VA’s pattern of unresponsiveness. We have experienced unresponsive behavior within the VHA’s VISN’S. Our office has repeatedly attempted to contact VISN 22’s Network Director to no avail. VISN 22 has failed to initiate any follow up on veteran claims that have been outstanding for many years. It seems VISN 22 has absolutely zero interest about their veterans and working diligently and efficiently in resolving their veteran claims. As a result of their behavior, our office is preparing to contact the Chief Business Officer as well as the Under Secretary of Health for the United States Department of Veterans Affairs for further escalation.
This timeframe is an obvious problem and does not comply with the Prompt Payment act nor the VHA Directive 2010-005.

If the United States government is going to set up a financial safety net for our nation’s soldiers, they have a duty to ensure our veterans are receiving proper care and financial help no matter how large the task.

 
 

CONSEQUENCES OF VA UNTIMELINESS AND UNRESPONSIVENESS.

Both the provider and veteran are negatively impacted by the VA’s timeliness issues. The timeliness issues the VA suffers from affects the veteran and provider much more than it does the VA. Veterans and providers are waiting months and years to receive reimbursement and updates on their claims.
On January 17, 2015, 289,988 veteran appeals were pending and 245,877 pending disability benefits claims remain in limbo at the VA, according to U.S. Medicine. In 2013, claims took an average of 272 days to be processed and the backlog was at 900,000. According to the Center for Investigative Reporting, 53 veterans die each day waiting for their benefits. Veterans are dying before they receive reimbursement from the VA.
The VA’s Office of Inspector General (OIG) released a report regarding the VA’s suicide hotline. “The report by the VA’s office of inspector general says, calls to the suicide hotline have increased dramatically in recent years, as veterans increasingly seek services following prolonged wars in Iraq and Afghanistan and the aging Vietnam-era veterans.” Additionally, the crisis hotline–the subject of an Oscar winning documentary–received more than 450,000 calls in 2014, a 40 percent increase over the previous year. Furthermore, the OIG reported that about in 1 in 6 calls are redirected to backup centers when the crisis line is overloaded. Calls went to voicemail at some backup centers, including at least one where staffers apparently were unaware there was a voicemail system. (Source: CBS News)
After reading the above excerpt, consider a real situation where a suicidal veteran is at their last place in their life and has nowhere else to turn. They remember the VA has a suicide hotline. They pick up their phone and call the suicide hotline as a last attempt to save themselves from the mental war raging within them. They get a ring tone and the tone continues until it either goes to a voicemail or they are told to please hold. The veteran hangs up realizing their last attempt at life has failed. I will let you determine the outcome of this situation. There is no happy ending to this pattern of unresponsiveness. Providers are suffering as well. “Asbel Montes, vice president of reimbursement and government affairs for privately held Acadian Ambulance Service, cited more than $30 million in outstanding payments over 90 days.” Provider’s services are forced to bill their denied claim to the veteran forcing the veteran to suffer the heavy financial burden of unpaid claims.
There is not an easy way to end the VA’s timeliness problems. But, if the United States government is going to set up a financial safety net for our nation’s soldiers, they have a duty to ensure our veterans are receiving proper care and financial help no matter how large the task. This means that if the VA falls behind or is deficient in any area, that they self-initiate and implement corrective actions to ensure the problems do not become unmanageable as they are currently. Clearly from the chart above, the VA has the ability to remain timely as they have done in 1994 and 1996.
If you are a non-VA ambulance provider who has provided care to Veterans of the United States Armed Forces that have had claims that have remained outstanding past 30 days, we want to hear from you. Report your timeliness issues of the VHA below.
If you are a veteran experiencing financial hardship because of uncompensated medical bills, we want to hear from you.
 
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Please contact:
ERN/ The Reimbursement Advocacy Firm
Brian Ford, J.D., CCA & Writer
(714) 995-6900 ext. 6920
brianford@ernenterprises.org

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