DOCUMENT RESUtIE 03496 - [A26'3833) [Inappropriate Billing by the Veterans Administration for Electron icroscopy Services to Non-Veterans]. HED-77-148; E-133044o September 16, 1977. 5 pp. Report to P-tt Cleland, Administrator of Veteran Affairs, Veterans Adlinistiati, by Gregory J. Ahart, Director, Human Resources Div. Issue Area: Health Programs: Federal Government Control of Costs Through irect Delivery Programs (1216). Contact: Human Resources Div. Budget Fulnction: Veterans Benefits and Services: Hospital and Medical Care for Veterans (703). Crganization Concerned: Veterarz Administration: VA Hospital, Gainesville, FL; Veterans dministration: VA Hospital, Miami, F'; Veterans Administration: VA Hospital, Tampa, FL. Congressional Relevance: House Committee on Veterans' Affairs; Senate Ccmmittee on Veterans' Affairs. Authority: 8 U.S.C. 5C53. VA epaitment of Medicine and Surgery Manual G-12, M-1, part I. Three Veterans Administration (VA) hospitals in Florida were evaluated to determine how much of the electron microscopy services were performed on non-veteran patient specimens in calendar year 1976 and whether fees were collected for the services. Findings/Conclusions: About 55 percent of the electron microscopy services performed in calendar year 1976 by the diagnostic units at the Miami, Tampa, and Gainesville VA hospitals were on specimens frcm non-VA patients in community hospitals. he VA hospitals had written agreements for sharing services with some of the non--VA hospitals, but were performing most of the electron microscopy services without benefit of a sharing agreement. The three VA hospitals lost about $102,000 in revenue in 1976 because they either did not bill community hospitals or they billed at rates less than those required by VA regulations. In some instances, billing- were not made even though sharing agreements establishing reimbursement procedures and rates had been negotiated. In addition, some community hospitals that had received free services from VP had billed either Medicare or their patient's private insurance companies for the studies. Reccmmendations: The Administrator of Veteran Affairs should reemphasize tc all VA medical facilities the need to fcllow established statutory and regulatory requirements for recovering the cost of all medical services furnished to non-VA patients. He should also direct all VA medical facilities which furnished electron microscopy cr any other services to or on behalf of non-VA patients in 1976 to establish the appropriate unit costs and to bill the patients or medical facilities for those services. (SW) LX ) S). UNITED STATES GENERAL ACCOUNTING OFFI.E WASHINGTON, D.C. 20548 HUMAN RSOUPtRcS 1 4 DIV1tS1ON 'SEP 16 1977 B-133044 The oiorable Max Cleland Administrator of Veterans Affairs Veterans Administration Dear Mr. Cleland: During a General Accounting Office review of the utilization and distribution of electron microscopes (EMs) in selected Veterans Administration (VA) hospitals, we observed that three hospitals in VA Medical District 12--Miami, Tampa, and Gainesville, Florida--lost about $102,000 in revenue during calendar year 1976 because they either did not bill or did not bill at the appropriate rate. for EM diagnostic services furnished to non-Federal hospitals. Although we did not develop information on billing practices and procedures of VA hospitals in other VA medical districts, we believe that this problem may not be limited just to District 12 hospitals, nor to just EM services. Thus, because of the possibility that the Government could be losing substantial amounts of revenue, we are bringing this situation to your attention for corrective action. A separate report is being prepared on the overall results of cur review of electron microscopes. AUTHORITY FOR PROVIDING SERVICES O0 NON-VA MEDICAL FACILITIES Statutory authority for VA hospitals to enter into agreements for sharing services and facilities with ther hospitals, medical schools, or medical facilities is contained in 38 U.S.C. 5053. The statute requires that VA be reimbursed for service provrided under such sharing agreements. Specifically, 38 U.S.C. 5053(b) states that: "Arrangements entered into * * * shall provide for reciprocal reimbursement based on a charge which covers the full cost of services rendered, supplies used, and including normal depreciation nmd amortization costs of equipment." ~v. '-sharing specialized medical resources are discussea ations (VA's Departmnt of Medicine and Surgery Manua, M-l, Part I), which state that VA may join with non-VA hc in a coopei~tive effort by establishing HRD-77-148 (40130) B-133044 mutual use and exchange of use agreements. These regulations require also that VA charge for the resources used for rendering specialized umedical services to non-VA medical facilities. Furthermore, VA regulations (Part V, VA Controller Policy hanual) describe how costs are to be developed for billing non-VA facilities receiving specialized medical services. Specifically, the regulations state that the costs will be those shown on the hospital's Report of Medical Care Distribution Accounts (RCS 14-4). This quarterly relort includes all direct and indirect cost elements for each laboratory service, including EM services. Local VA hospital and VA central office overhead charges also are included in the total costs shown on the report. The unit cost for each of the specialized medical services is then determined by dividing the total costs by the number of units produced by the service (i.e., number of specimens studied by he E unit). EXTENT OF PROVIDING EM SERVICES TC ON-VA MDICAL FACILITIES About 5 percent of th;ne electron microscopy services performed in calendar year 1976 by the diagnostic units at the Miami, Tampa, and Gainesville VA hospitals were on specimens from non-VA patients in community hospitals. The VA hospitals had written sharing agreements with some of the non-VA hospitals, but were performing most of the electron microscopy services with!out benefit of a sharing agreement. In calendar yea 1976, the Miami VA hospital had written sharing agreements with 19 medical facilities, but it provided electron microscopy services to 19 other facilities with which it had no sharing agreements. During 1976, the Tampa VA hospital furnished electron microscopy services to 12 community hospital and laboratories, but had no sharing agreements before December 1976 when it entered into an agreement with a large community hospital. The Gainesville VA hospital provided electron microscopy services to five community hospitals, all under sharing agreements. LOST REVENUE TO THREE VA HOSPITALS The Miami, Tampa, and Gainesville VA hospitals lost about $102,000 in revenue in 1976 because they either did not bill ommunity hospitals for EM services performed on non-VA specimens or they billed at rates less than tnose required y VA regulations. In some instances, billings were not made even though sharing agreements establishing reimbursement procedures and rates had been negotiated. The following table summarizes the number of non-VA patient specimens studied at eacn hospital, the amount of revenue received and te amount of revenue lost by the Federal Government due to iacK of illings and/or underbillings for electron microscopy services. -- B-133044 .. C . .o > 0 " Ln I E I I IN , . N rS h**BI z * tzD - C O O'L O c0o C E CNf4 0 e O 03 C w ~ _ - t ' J O- W U- - qj W0 Cu~r, · 0Ca c Oo OI Cr .-. v - @ 0 v) C4Q) C a Q o- U) - c a3gX aI v c < S e n vD ~~~~~O O ;0 ZCo e eL 3 C 0 >_ 0 r o C o C o C 00 %64 (v c o v- ov v) ca o oO on o a c C 3 cw Q) .c .8 Il to 03 < ~~ct c - cC0)- oc o 4 eW u)o 5~ a~ 0 '~ o~ 0 e e a I C O L C O oUU- .4 v, w o _, fi V * * t C sL) $ a, | u - - e4 Q r X, cr rv _ Ov a _r * :c O .C U C) ~ 0 c0) · * 0 a _t .C n 5 C :O- O 0 G CL r C i - Ia'L J- 0C 0) ci 5V - C- 0 C0 0c ° 0J C 6 a -W Zl· v~ c 0 E~ Er, EL r -c vm cQ Cc vel CQ)V) c v 7 Ec E r- a C c V V , oD~- _- X 3 B-133044 Of the 285 studies not billed by the Miami hospital, 277 were of specimens received from community medical facilities which had no sharing agreements with VA. The E Program Director at the Miami hospital said he was unaware that VA could bill for services that were not performed under a formal sharing agreement. Be added tat the eight remw;.ning specimens were from hospitals with a sharing agreement but were not billed through oversight. Billings for 43 additional studies were understated by about $53 each because the hospital used inaccurate personnel costs and workload data in computing the sharing agreement unit cost. The Tampa VA hospital's E Progrim Director said that he, too, was naware that VA could bill for services provided without a sharing agreement, and that this was the reason he did not bill community hospitals for the 106 specimens studied by his unit. Tne Gainesville EM Program Director said that billings were made for studies of all specimens received from non-Federal hospitals except for 96 that he used in teaching or research. He said he believed it was inappropriate for him to bill for specimens used for these purposes. Be added, however, that a diagnosis was re.questeC y and prepared for tne patient's physician on each of these 96 specimens. '.u addition, we found that some community hospitals that had received "free" E studies from VA had billed either Medicare or their patient's private insurance companies for the studies. We traced a limited sample of 20 VA-provided EM studies to patient records at the community hospitals and found that the hospitals had submitted bills for 5 of the 20 studies-Medicare had been billed for two studies and private insurance companies had been billed for the other three. Weaknesses in VA billing procedures were discussed with the hospital directors and fiscal officers at all three hospitals. These officials agreed that billings should have been prepared for all h services provided to non-VA beneficiaries. They said that action would be taken by the hospitals to (1) bill for EN services already provided but not yet billed and (2) establish procedures c future. to assure that appropriate billing are made in the We also obtained informal comments on our findings from VA central office officials. These officials generally agreed with our findings. we were also advised that, on July 7, 1977, the Regionalization and Sharing staff, through the Associate Deputy Cnief Medical Director for Operations, notified the Mi-mi VA nospital that no authority exists to provice EM services to -4 B-133044 community hospitals in the absence of a sharing agreement except for humanitarian reasons. Howeve., since such services were provided, an implied contract exists, and is sufficient basis for billing those community hospitals hat received such services. CONCLUSIONS AfND RECOMIENDATIONS The iami, Tampa, and Gainesville VA hospitals were not following thc governing regulations which require that they recover the cost of Eh services furnished to non-Federal facilities. If these hospitals had billed for all E ervices at the appropriate rates, the Crvernment would have realized bout $102,000 in additional revenue in 19'/6. Because of these weaknesses-in billing procedures, we recommend t:hat you -r- ,phasize to all VA medical facilities the need to ft :.o; established statutory and regulatory requirements fcz rcovering the cost of all medical services furnished uc:t-VA patients, and ns :'fC all V medical facilities which furnished EM or -.. other services to or on behalf of non-VA patients .n .!76 to establish the appropriate unit costs and t:: l the recipient patients/medical facilities for ~isc services. As vov know, section 236 if the Legislative Reorgnization Act of 1970 r-,ires the head of a Federal agcn.y to send a written statement. explaining what he has done about our recommendations to the Souse Committee on Government Operations and the Senate Committee on Goveznmental Affairs not later than 60 days after the date of the report and to the House and Senate Committees on Appropriations with the agency's first request for appropriations made more than 60 days after the date of the report. we axe sending copies of this report to the Chairmen, house Committeas .n Appropriations, the Fudget, Government Operations, and Veterats' Affairs; the Senate Committees on the Budget, Governmental Affairs, and Veterans' affairs; the Senate Appropria- tions Suscommittee on HUD-Independent Agencies; and to the Director, Office of rManagement and Budget. We would appreciate being informed on any actions :aken or planned on the matters discussed in this report. Sincerely yours, Gregor' ; Director ' -5-
Inappropriate Billing by the Veterans Administration for Electron Microscopy Services to Non-Veterans
Published by the Government Accountability Office on 1977-09-16.
Below is a raw (and likely hideous) rendition of the original report. (PDF)