Thousands of Emergency-Care Claims Were Denied; Court Rules VA Must Reimburse

When veterans receive emergency care at non-VA facilities, they can file for reimbursement of non-VA emergency care costs. If the claims are denied or rejected, non-VA facilities and providers can bill the veterans for some or all of the costs.

A stunning VA Office of Inspector General (OIG) report issued in August revealed that the VA had wrongfully rejected thousands of those emergency-care claims between April 1, 2017 and September 30, 2017. The OIG report said VA supervisors had pressured staff to quickly decide claims and even deny claims to maximize productivity. That culture of “speed over accuracy” led to 31% of claims being “inappropriately processed.”

Under regulations, when a claim is denied it is because there is no basis for payment, but a claim may also be rejected, meaning it cannot be decided until the claimant provides additional or corrected information. When the Claims Adjudication and Reimbursement Directorate (CAR) in the VA Office of Community Care (OCC) denies a claim, the claimant may have to pay out of pocket for emergency care.

The billed amount of inappropriately processed claims in those 5 months that were denied or rejected was “large in the aggregate,” the report said: an estimated $716 million, presenting potential undue financial risk to an estimated 60,800 veterans. The OIG estimated that about 17,400 veterans, with bills of at least $53.3 million, were negatively affected during the audit period. If corrective actions are not taken, the OIG estimates that the errors could result in $533 million in improper underpayments over 5 years.

The OIG audit was initiated after then Representative Tim Walz (D-MN) raised the concern in September 2017 about claims processors denying non-VA claims not only to meet production goals, but also to receive incentives such as high-performance ratings, bonuses, and telework privileges. The OIG audit also found that examiners who did not consistently meet the production numbers were not considered for overtime and had their telework privileges removed.

Other processing errors were also significant, the report says. For example, claimants did not receive complete and accurate information regarding why their claims were denied or rejected. Those errors created a risk that claimants could not effectively respond with information to get their claims approved.

The pressure to approve or deny claims quickly stemmed from a backlog of claims > 30 days old, which OCC and CAR leaders tried to reduce, the report says.

The OIG notes that since FY 2017 the OCC “experienced several leadership changes,” including 3 CAR directors. While the audit’s findings cannot be tied directly to those changes, the instability “provided the context in which problems were allowed to continue without remediation.”

In May, VHA officials reported to the audit team that they had implemented process improvements and initiatives that affect claims processing nationwide, and “the environment in which claims are processed.” Richard Stone, executive in charge of the VHA, submitted plans to comply with the IG’s 11 recommendations, which included tying incentives to all performance standards rather than just production quantity.

The US Court of Appeals for Veterans Claims recently ruled that the VA must reimburse veterans for emergency medical care at non-VA facilities—potentially between $1.8 billion and $6.5 billion in reimbursements for veterans who have filed or will file claims between 2016 and 2025. The court also struck down an internal VA regulation that blocked such payments. In 2015, the court had struck down a previous version of the internal regulation that refused coverage for an emergency claim when another form of insurance covered even a small part of the bill. The court said that regulation violated a 2010 federal law. In last month’s ruling, the court found the department had violated the same federal law with its revision of the reimbursement regulation, issued in 2018. The new rule, the panel said, created a new obstacle for veterans.

When veterans receive emergency care at non-VA facilities, they can file for reimbursement of non-VA emergency care costs. If the claims are denied or rejected, non-VA facilities and providers can bill the veterans for some or all of the costs.

A stunning VA Office of Inspector General (OIG) report issued in August revealed that the VA had wrongfully rejected thousands of those emergency-care claims between April 1, 2017 and September 30, 2017. The OIG report said VA supervisors had pressured staff to quickly decide claims and even deny claims to maximize productivity. That culture of “speed over accuracy” led to 31% of claims being “inappropriately processed.”

Under regulations, when a claim is denied it is because there is no basis for payment, but a claim may also be rejected, meaning it cannot be decided until the claimant provides additional or corrected information. When the Claims Adjudication and Reimbursement Directorate (CAR) in the VA Office of Community Care (OCC) denies a claim, the claimant may have to pay out of pocket for emergency care.

The billed amount of inappropriately processed claims in those 5 months that were denied or rejected was “large in the aggregate,” the report said: an estimated $716 million, presenting potential undue financial risk to an estimated 60,800 veterans. The OIG estimated that about 17,400 veterans, with bills of at least $53.3 million, were negatively affected during the audit period. If corrective actions are not taken, the OIG estimates that the errors could result in $533 million in improper underpayments over 5 years.

The OIG audit was initiated after then Representative Tim Walz (D-MN) raised the concern in September 2017 about claims processors denying non-VA claims not only to meet production goals, but also to receive incentives such as high-performance ratings, bonuses, and telework privileges. The OIG audit also found that examiners who did not consistently meet the production numbers were not considered for overtime and had their telework privileges removed.

Other processing errors were also significant, the report says. For example, claimants did not receive complete and accurate information regarding why their claims were denied or rejected. Those errors created a risk that claimants could not effectively respond with information to get their claims approved.

The pressure to approve or deny claims quickly stemmed from a backlog of claims > 30 days old, which OCC and CAR leaders tried to reduce, the report says.

The OIG notes that since FY 2017 the OCC “experienced several leadership changes,” including 3 CAR directors. While the audit’s findings cannot be tied directly to those changes, the instability “provided the context in which problems were allowed to continue without remediation.”

In May, VHA officials reported to the audit team that they had implemented process improvements and initiatives that affect claims processing nationwide, and “the environment in which claims are processed.” Richard Stone, executive in charge of the VHA, submitted plans to comply with the IG’s 11 recommendations, which included tying incentives to all performance standards rather than just production quantity.

The US Court of Appeals for Veterans Claims recently ruled that the VA must reimburse veterans for emergency medical care at non-VA facilities—potentially between $1.8 billion and $6.5 billion in reimbursements for veterans who have filed or will file claims between 2016 and 2025. The court also struck down an internal VA regulation that blocked such payments. In 2015, the court had struck down a previous version of the internal regulation that refused coverage for an emergency claim when another form of insurance covered even a small part of the bill. The court said that regulation violated a 2010 federal law. In last month’s ruling, the court found the department had violated the same federal law with its revision of the reimbursement regulation, issued in 2018. The new rule, the panel said, created a new obstacle for veterans.

When veterans receive emergency care at non-VA facilities, they can file for reimbursement of non-VA emergency care costs. If the claims are denied or rejected, non-VA facilities and providers can bill the veterans for some or all of the costs.

A stunning VA Office of Inspector General (OIG) report issued in August revealed that the VA had wrongfully rejected thousands of those emergency-care claims between April 1, 2017 and September 30, 2017. The OIG report said VA supervisors had pressured staff to quickly decide claims and even deny claims to maximize productivity. That culture of “speed over accuracy” led to 31% of claims being “inappropriately processed.”

Under regulations, when a claim is denied it is because there is no basis for payment, but a claim may also be rejected, meaning it cannot be decided until the claimant provides additional or corrected information. When the Claims Adjudication and Reimbursement Directorate (CAR) in the VA Office of Community Care (OCC) denies a claim, the claimant may have to pay out of pocket for emergency care.

The billed amount of inappropriately processed claims in those 5 months that were denied or rejected was “large in the aggregate,” the report said: an estimated $716 million, presenting potential undue financial risk to an estimated 60,800 veterans. The OIG estimated that about 17,400 veterans, with bills of at least $53.3 million, were negatively affected during the audit period. If corrective actions are not taken, the OIG estimates that the errors could result in $533 million in improper underpayments over 5 years.

The OIG audit was initiated after then Representative Tim Walz (D-MN) raised the concern in September 2017 about claims processors denying non-VA claims not only to meet production goals, but also to receive incentives such as high-performance ratings, bonuses, and telework privileges. The OIG audit also found that examiners who did not consistently meet the production numbers were not considered for overtime and had their telework privileges removed.

Other processing errors were also significant, the report says. For example, claimants did not receive complete and accurate information regarding why their claims were denied or rejected. Those errors created a risk that claimants could not effectively respond with information to get their claims approved.

The pressure to approve or deny claims quickly stemmed from a backlog of claims > 30 days old, which OCC and CAR leaders tried to reduce, the report says.

The OIG notes that since FY 2017 the OCC “experienced several leadership changes,” including 3 CAR directors. While the audit’s findings cannot be tied directly to those changes, the instability “provided the context in which problems were allowed to continue without remediation.”

In May, VHA officials reported to the audit team that they had implemented process improvements and initiatives that affect claims processing nationwide, and “the environment in which claims are processed.” Richard Stone, executive in charge of the VHA, submitted plans to comply with the IG’s 11 recommendations, which included tying incentives to all performance standards rather than just production quantity.

The US Court of Appeals for Veterans Claims recently ruled that the VA must reimburse veterans for emergency medical care at non-VA facilities—potentially between $1.8 billion and $6.5 billion in reimbursements for veterans who have filed or will file claims between 2016 and 2025. The court also struck down an internal VA regulation that blocked such payments. In 2015, the court had struck down a previous version of the internal regulation that refused coverage for an emergency claim when another form of insurance covered even a small part of the bill. The court said that regulation violated a 2010 federal law. In last month’s ruling, the court found the department had violated the same federal law with its revision of the reimbursement regulation, issued in 2018. The new rule, the panel said, created a new obstacle for veterans.