oversight

VA Health Care: Medical Centers Need to Improve Collection of Veterans' Copayments

Published by the Government Accountability Office on 1990-03-28.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                   United   States   General   Accounting   Office
                   Report to the Ranking Minority                    .
GAO                Member, Committee on Veterans’
                   Affairs, U.S. Senate


March   1990
                   VA HEALTH CARE.
                   Medical Centers Need
                   to Improve Collection
                   of Veterans’
               l
                   Copayments
GAO
      United States
      General Accounting  Office
      Washington, D.C. 20548

      Human Resources         Division

      B-238822

      March 28,199O

      The Honorable Frank H. Murkowski
      Ranking Minority Member
      Committee on Veterans’ Affairs
      United States Senate

      Dear Senator Murkowski:

      The Veterans’ Health-Care Amendments of 1986 (P.L. 99-272) require
      the Department of Veterans Affairs (VA) to collect a fee, commonly
      referred to as a copayment, from certain veterans who receive health
      care at its facilities. This requirement applies to any veteran who has
      income or assets above prescribed amounts, unless he or she has a
      service-connected disability or other special circumstances.’ At your
      request, we assessed whether VA implemented a cost-effective process
      for billing and collecting copayments.’

      VA operates 172 hospitals and 233 outpatient     clinics, most of which are
      organized into 159 medical centers. These centers provided about 1.1
      million inpatient stays and 2 1.5 million outpatient visits during fiscal
      year 1988, at a cost of about $10.2 billion. The centers reported that in
      fiscal year 1988 less than 3 percent of the veterans receiving health care
      owed copayments and almost $10 million was collected. Copayment
      rates in that year were $25 a visit for outpatient care and $540 for the
      first 90 days of inpatient care. Using a questionnaire,:’ we obtained
      information from the 159 medical centers on their collection activities
      during fiscal years 1987 and 1988-the first 2 years after the act’s pas-
      sage. During visits to five centers, we interviewed officials and reviewed
      records of randomly selected veterans who received inpatient or outpa-
      tient care during the first 6 months of fiscal year 1988. We also
      reviewed VA’S copayment policies and procedures and interviewed VA
      headquarters officials and representatives of private health care provid-
      ers, including the Healthcare Financial Management Association4

       ‘The incomethreshold for a veteran without dependentswas $21.111in calenderyear 1988.It
      increased$5,278for the first dependentand $1,055for each additional dependent.Appendix 1lists
      the specialcircumstancesunder which veteranswhoseincomesexceedthesethresholdswould not
      owe copayments.
      ‘The portion of the requestrelating to collectionsfrom third party insurers is discussedin VA Health
      Care:Better ProceduresNeededto MaximizeCollectionsfrom Health Insurers (GAOIHRD-9044,
      Apr. 1990).
      .‘AppendixesIV and V contain selectedresponsesto the questionnaire
      ‘This associationprovides information on effective billing proceduresto hospitals nationwide



      Page 1                                                     GAO/HRlHO-77 Veterans’ Copayments
                                         B-238822




Figure 1: Medical Centers’ Collections
and Estimated Costs for the Copayment
Recovery Effort (Fiscal Year 1988)




                                            Inpatbnl
                                            Typoof Cam
                                            -
                                            u       CQllecDons
                                                    Estimated
                                                            Cc&z




                                         Although the five medical centers we visited should have collected an
Medical Centers                          estimated $386,000 during the first 6 months of fiscal year 1988, they
Should Have Collected                    collected only about $188,000. Most of the unpaid copayments resulted
Significantly More                       from the centers’ failure to bill veterans for amounts owed, as figure 2
                                         shows.




                                         Page 3                                     GAO/HRIW377 Veterans’ Copayments
Figure 3: Estimated Value of Copayments Billed and Not Billed at Five Centers Visited (Ott 19WMar   1988)




                                                                                      r
                                                                            l-
                                                    Outpatient Care

               Amount Billed
               Amount Not Billed




Many Veterans Did Not                      At the five centers, veterans had not paid about $23,900 (22 percent) of
Pay Amounts Billed                         the copayments billed for inpatient care and $15,300 (13 percent) of the
                                           copayments billed for outpatient care. Officials at these centers cited
                                           several reasons for the unpaid bills: veterans could not be located, they
                                           refused to pay, or they stated they could not afford to pay. Nationwide,
                                           112 other centers, in responding to our questionnaire, said they had
                                           often or very often encountered similar difficulties. Additional informa-
                                           tion on the reasons for centers’ collection problems is shown in appendix
                                           v.




                                           Page 6                                            GAO/HflB9O-77   Veterans’ Copayments
                        B-233322




                        The Healthcare Financial Management Association recommends that
                        hospitals attempt to collect amounts owed before patients are dis-
                        charged-a practice that private sector hospitals normally adopt. Offi-
                        cials at four of the five centers did not encourage veterans to pay their
                        copayment while receiving care at the center. They said, however, that
                        payments would be accepted if veterans wished to pay while still at the
                        center. Similar policies were reported by 133 other centers.


                        VA should help its centers improve their billing and collection practices
Conclusions             through changes that will both increase copayment collections and
                        reduce collection costs. One such change would be for VA to adopt an
                        approach similar to that followed in many private hospitals, that is, col-
                        lecting from or making payment arrangements with patients before they
                        leave the center.

                        VA’S adoption of such an approach would reduce or eliminate many of
                        the labor-intensive and time-consuming tasks now experienced by staffs
                        responsible for collecting copayments. In addition, many of the collec-
                        tion difficulties-such   as centers’ inability to locate obligated veter-
                        ans-should be minimized and timeliness of billings should be less of an
                        issue.


                        We recommend that the Secretary require VA medical centers to collect
Recommendation to       copayments from veterans or make payment arrangements while veter-
the Secretary of        ans are still at the centers.
Veterans Affairs

                        VA commented on a draft of this report on March 8, 1990 (see app. VI).
Agency Comments         The Department agreed with our recommendation and stated that
                        actions are already underway to improve the process and increase
                        copayment billings and collections from veterans before they depart VA
                        health care facilities. Actions the Department said it was taking included

                    l   Convening a medical care costs recovery task force, charged with devel-
                        oping a strategy to improve identification, billing, and collection
                        procedures.
                    l   Reporting the veteran copayment collection system as a material weak-
                        ness in its 1989 Federal Managers’ Financial Integrity Act report, The




                        Page 7                                       GAO/HRD90-77 Veterans’ Copayments
Page 9   GAO/HRD-90.77Veterans’ Copayments
                        Contents




Appendix VI
Comments From the
Department of
Veterans Affairs
Appendix VII                                                                                     21
Major Contributors to
This Report
Tables                  Table II. 1: Total Copayment Collections and Collections
                            Per Average Occupied Bed for the Five Centers
                            Visited (Fiscal Year 1988)
                        Table 111.1:Veterans Receiving Inpatient Care                            15
                        Table 111.2:Veterans Receiving Outpatient Care                           16
                        Table IV. 1: Factors Affecting Recoveries                                17
                        Table V. 1: Reasons a Center Might Have Difficulty                       18
                            Collecting From Veterans

Figures                 Figure 1: Medical Centers’ Collections and Estimated                      3
                             Costs for the Copayment Recovery Effort
                             (Fiscal Year 1988)
                        Figure 2: Estimated Value of Copayments Owed at Five
                             Centers Visited (Oct. 1987-Mar. 1988)
                        Figure 3: Estimated Value of Copayments Billed and Not
                             Billed at Five Centers Visited (Oct. 1987-Mar. 1988)
                        Figure 4: Average Time Taken to Bill Inpatient Veterans
                             Sampled (Oct. 1987-Mar. 1988)




                         Abbreviations

                         VA          Department of Veterans Affairs


                         page 11                                      GAO/HRLM?@77
                                                                                 Veterans’ Capaymenb
Scopeand Methodology


                                               We visited five medical centers to assess the effectiveness of VA’S efforts
                                               to collect copayments from veterans. We judgmentally selected the cen-
                                               ters to gain a mix of key operational and performance factors. Table II.1
                                               provides information on two of the factors: size (number of beds) and
                                               collections per average daily occupied bed’ for the five centers visited.

Table 11.1:Total Copayment Collections
and Collections Per Average Occupied           Ranked m order of collections per bed
Bed for the Five Centers Visited (Fiscal                                                              -Average nu;i;r        Collections pr+r
Year 1988)                                                                                    Total                           average dally
                                               Medical center                          collections       occupied beds        occupied bed
                                               Minneapolm. MN                             $286,152                   484                 $591
                                               Martinsburg. WV                              115,026                  287                  401
                                               Seattle, WA                                   53,027                  290                  183
                                               Bay Pmes, FL                                  83,108                  473                  176
                                               West Los Angeles, CA                          17,039                  824                   21
                                               Total (5 centers)                          $554,352                 2,358                 $235
                                               Total (all 159 centers)                  89,884,350                52,111                 $190


                                               At each of the five medical centers visited, we interviewed officials in
                                               the Office of the Director, Medical Administration Service, and Fiscal
                                               Service to discuss the process for billing and collecting from veterans.
                                               We also discussed factors that aided or impeded the centers’ recovery
                                               efforts.

                                               To assess each center’s billing and collection procedures, we reviewed
                                               medical and administrative records for a random sample of about 30
                                               veterans subject to copayments from each of two universes:

                                           l   Veterans discharged from inpatient care between October 1, 1987, and
                                               March 31, 1988.
                                           l   Veterans provided outpatient care between October 1, 1987, and March
                                               31, 1988.

                                               For those veterans sampled, we documented (1) whether the medical
                                               centers billed for all copayments owed and sent the bills in a timely
                                               manner, (2) how much the centers collected, and (3) why centers col-
                                               lected less than the full amount. We used our sample results to estimate
                                               the value of copayments for inpatient and outpatient care not billed by
                                               the medical centers. Because our estimates are based on samples, there

                                               ‘We usedcollectionsper averagedaily occupiedbedrather than total collectionsbecausethis inarpo-
                                               rated the sizeof the center into the evaluation of its collectionperfonnancr.



                                               Page 13                                                 GAO/HRD-9037Veterans’ Copayments
k&mated Value of Copayments Not Billed,
Billed, and Collected for Care Provided to
Veterans Subject to Copayments (Oct. 1, 1987-
Mar. 31,1988:, The following tables show, for each of the five medical centers we vis-
                                           ited, the estimated amounts of copayments (1) not billed, (2) billed, and
                                           (3) collected for care provided to veterans during the first 6 months of
                                           fiscal year 1988. Because these figures are estimated using the results
                                           from our reviews of samples of veterans who received care during the
                                           period, there are sampling errors. The chances are 95 out of 100 that the
                                           true value for the population of veterans lies within the confidence
                                           interval shown.

Table 111.1:Veterans Receiving Inpatient
Care                                                                                                   Estimate                 Confidence level
                                           Bay Pines:                           ~~ -~
                                           Not bllled                                                     $4,697             $946
                                                                                                                            ___-__          $10,410
                                           Billed                                                         53,474
                                                                                                        --~---__           43,232            63,716
                                           Collected                                                      37,212           25,387            49,037
                                           Martinsbura:
                                           Not bllled                                                   $24,860           $12,327           $37.393
                                           BIlled                                               --._     13.978             4,903            23.053
                                           Collected                                                     11,441             3,052            19,830
                                           Minneapolis:
                                           Got bllled                                                     $3,905           $2,052            $6,361
                                           Bllled                                                         27,395           24,507            30,283
                                           Collected                                                      25,425           22,108            28,742
                                           Seattle:
                                           Not bllled                                                     $8,408           $5,711           $11,105
                                           ElIled            __~                                          13,532           10,820            16,244
                                           Collected                                                      10,411            7,799            13,023
                                           West Los Angeles:
                                           Not billed                                                   $31.676           $29.166           $34.186
                                           EMled                                                          1,044               473             2,557
                                           Collected                                                      1.044               473             2.557
                                           Total:
                                           Not bllled                                                   $73.547           $59,079a          $88.015”
                                           Bllled
                                            -                                                           109,442            95,096”          123,748”
                                           Collected                                                     85,533            70.3578          100,709”
                                           aThese figures are the range for the estimated total, not the sum of the values llsted for the mdudual
                                           medlcal centers




                                           Page 16                                                       GAO/HBD90-77 Veterans’ Copayments
Appendix IV

Factors Affecting Recoveries


                                           In our questionnaire, we asked medical centers to consider various fac-
                                           tors that may influence how effectively the centers were able to recover
                                           copayments from veterans. Center officials indicated whether each fac-
                                           tor was more than, about, or less than adequate to enable the center to
                                           effectively recover copayments from veterans.

Table IV.l: Factors Affecting Recoveries
                                                                                                More than           About        Less than
                                           Factor                                               adequate
                                                                                                  __-            adequate        adequate
                                           Number of avallable staff                                       1              51            107
                                           Computer software                                               6              71             76
                                           Computer hardware                                               7              74             75
                                           Veterans’ cooperation with center efforts                       9              97             48
                                           Trarnlno center able to orovrde staff                           9             103             46
                                           Gutdance from VA headquarters                                   3             112 -           44
                                           Dlstnct counsel’s efforts to pursue referred
                                           cases                                                          26              86            24
                                           Staff’s skills/experience                                      31             110             18
                                           Note The responses do not always add to 159 because not all centers answered each question




                                           Page 17                                                  GAO/HRB90-77 Veterans’ Copayments
Appendix VI

Comments From the Department of
Veterans Affairs


                                                  THE SECRETARY OF VETERANS        AFFAIRS
                                                                 WASHINGTON




                                                      MAR 8 1990



                  Hr. David P. Baine
                  Director,   Federal   Health          Care
                     Delivery  Issues
                  U. S. General    Accounting           Office
                  Washington,    DC 20548
                  Dear Wr.      Baine:
                          I am pleased    to respond to your January           19, 1990,       draft      report
                  V
                  A                    .
                  Veterans'     Cooavments       (GAO/HRD-90-77).          As the     report      states,        VA
                  has already       begun     to    collect      copayments      from     veterans.              In
                  addition,    these collections          exceed   the costs   of collection          although
                  this    is a fundamentally        new program for our facilities.
                           I recognize     that     more can be done to improve           the  collection
                  process.        I agree with your recommendation,           and actions     are already
                  underway       that   should     improve    the process     and increase       copayment
                  billings      to and collections         from veterans    prior  to their      departing
                  VA health       care facilities.         The actions   being taken       on your     report
                  are outlined        in the e@closure.
                            Thank   you   for   the   opportunity      to     comment     on this    report.




                  Enclosure
                  EJD/jev




              L


                               page19                                                   GAO/HRD&S77Veteran~'Copaymenta
Appendix VII

Major Contributors to This Report


                          Paul R. Reynolds, Assistant Director, (202) 233-5281
Human Resources           Frank C. Ackley, Technical Advisor
Division,                 Walter P. Gembacz, Assignment Manager
Washington, D.C.

                          Randall Williamson, Regional Management Representative
Seattle Regional Office   Janet E. Frisch, Evaluator-in-Charge
                          Peter J. Bylsma, Evaluator
                          Patricia K. Yamane, Evaluator


                          Octavia V. Parks, Evaluator
Atlanta Regional


                          Mark J. Huber, Evaluator
Chicago Regional
Office




(401987)                  Page 21                                   GAO/lJRDSC-77Veterans’ Copayments
Requests for copies of GAO reports     should be sent to:

U.S. General Accounting    Office
Post Office Box 6016
Gaithersburg, Maryland     20877

Telephone   202-275-6241

The fiit  five copies of each report   are free. Additional
$2.00 each.

There is a 25% discount    on orders for 100 or more copie
single address.

Orders must be prepaid by cash or by check or money o
out to the Superintendent of Documents.
            AppendixVI
            CommentsFrom the Department of
            Veterans Affairs




                                                                                                      Enclosure

                 DEPARTMENT OF VETERANS AFFAIRS    COMMENTS ON THE
               JANUARY 19, 1990,    GAO DRAFT REPORT VA HEALTH CARE:
                         MHDICAL CENTERS    NEED TO IMPROVE
                        COLLECTIONS  OF VETERANS’  COPAYMENTS


SAO    recommends              that         I   require       VA    medical         Centers      to      collect
copayments    from                veterans            or make     payment    arrangements                     while
veterans   are still                at the          centers  receiving    care.

        I      concur          with        the       recommendation           and       have    proposed               a
multifaceted            plan       to     correct       the situation.

       The Department                    has listed        this    finding      as a material       weakness
in VA's     1989 Federal                  Manager's        Financial       Integrity     Act Report        that
tasks     the   Veterans                  Health       Services       and Research        Administration
 (VHSSRA) to identify                     deficiencies          and follow       through   with   an action
plan.      We anticipate                  that     the first       results      of this   action      will     be
completed      by March                 1990.

        Additional             efforts          include:

        0           The Department           has convened        a Medical     Care Cost Recovery
                    Task Force         charged        with developing      a strategy      to improve
                    identification,              billing,     and collection          procedures      as
                    quickly         as possible.

        0           We have proposed       additional                 resources   necessary              to     bill
                    and collect   properly        in our              1991 budget    legislation.

        0           We recently        completed       an           internal         audit      of    copayment
                    billing    delays.        As a result,               we are      considering         several
                    methods     of patient       control              and more        timely       preparation
                    of copayment       bills.

        0           We will        request      input      from field        stations       to  insure   that
                    our debt        collection         procedures       are effective          at the field
                    station          level     once      an accounts            receivable        module     is
                    installed          at all    stations.        Installation            is expected    this
                    calendar          year.




               page20                                                          GAO/HRD90-77 Veterans' Copayments
Appendix V

Reasons a Center Might Have Difficulty
Collecting From Veterans

                                         In our questionnaire, we asked medical centers to consider the reasons
                                         they have experienced difficulty collecting from veterans. Center offi-
                                         cials indicated how often they experienced difficulty collecting from
                                         veterans for each of the following reasons. One hundred twenty-five
                                         centers reported often having difficulty collecting from veterans.

Table V.l: Reasons a Center Might Have
Difficulty Collecting From Veterans                                                     Very
                                         Reason
                                         ___.~           ~-.                           often    Often     Sometimes -__-
                                                                                                                      Rarely        Never
                                         Veteran does not respond          _____          51        42              59         6        1
                                         Veteran claims he/she cannot afford to
                                         pay                                              22        49              70        16        2
                                         Veteran cannot be located                        14        21              66        56        2
                                         Veteran refuses to oav                           16        19              64        45       13
                                         Veteran claims the amount bllled IS not
                                         reasonable                                        7        18              50        58       18
                                         Other
                                         .___~..~___                ~~~                    4         7               4          2       1
                                         Veteran has already pard maxrmum
                                         copayment amount at another VA
                                         medlcal center                                     0        0               11       59       89
                                         Note The responses do not always add to 159 because not all centers answered each questm




                                         Page 18                                                  GAO/HRB90-77 Vewrans’ Copayments
                                 Appendix III
                                 Estimated Value of Copayments Not Billed,
                                 Billed, and C!ollected for Care Rovided to
                                 Veterans Subject to Copayments (Oct. 1,
                                 1987.Mar. 31,1988)




Table 111.2:Veterans Receiving
Outpatient Care                                                                             Estimate                  Confidence level
                                 Bay Pines:
                                 Not billed                                                     $9,525           $3,654           $15,396
                                 Billed                                                         13,547             9,595           17,499
                                 Collected                                                      11,853             7,861           15,845
                                 Martinsburg:
                                 Not bllled                                                     $2,467              $461           $4,473
                                 BIlled                                       -     ..~~~~-~    35,853            26,083           45,623
                                 Collected                                                      34,467            24,463           44,471
                                 Minneapolis:
                                 Not billed                                                    $22,420            $9.819          $35,021
                                 Billed                                                         34,220            22,377           46,063
                                 Collected                                                      31,270            19,797           42,743
                                 Seattle:
                                 Not billed                                                     $7,383            $2,251          $12,515
                                 Billed                                                         34.461            11,336           57,586
                                 Collected                                                      25,230             7,951           42,509
                                 West Los Angeles:
                                 Not bllled                                                    $43,230          $27,094           $59,366
                                 Billed                                                               0               0                 0
                                 Collected                                                            0               0                 0
                                 Total:
                                 Not bllled                                                    $85,025          $63,025”         $107,025”
                                 Billed                                                        118,081           90,044”          146,118”
                                 Collected                                                     102,820           79,449”          126.191a
                                 ‘These figures are the range for the estimated total, not the sum of the values INed for the indwidual
                                 medlcal centers




                                 Page 16                                                       GAO/BBLWO-77       Veterans’   Copayments
Appendix II
Scope and Methodology




are sampling errors associated with them. We used a 95-percent confi-
dence level for our estimates. All estimates are for the first 6 months of
fiscal year 1988. Appendix III provides additional information about our
projections.

Our review was performed from August 1988 to November 1989 in
accordance with generally accepted government auditing standards.




Page 14                                     GAO/HRJNW77   Veterans’   Copayments
Appendix I

Special Circumstances Under Which Veterans
Do Not Owe Copayments

                  The Veterans’ Health-Care Amendments of 1986 (38 USC. SlO),
                  enacted in April 1986, provide that, regardless of income, veterans are
                  not required to make copayments for health care received at a VA medi-
                  cal center if they meet one of the following special circumstances:

              l have service-connected disabilities;
              l are former prisoners of war;
              l are veterans of World War I, the Spanish-American War, or the Mexican
                border period;
              l incurred service-connected exposure to toxic substances or radiation;
              l are eligible for VA care as a result of a judgment or settlement against the
                United States;
              l are eligible for Medicaid; or
              . are receiving a VA pension.




                  Page 12                                    GAO/Mu)-90-77   Veterans’   Copayments
Contents



Appendix I
Special Circumstances
Under Which Veterans
Do Not Owe
Copayments
Appendix II                                                           13
Scopeand
Methodology
Appendix III                                                          15
Estimated Value of
Copayments Not
Billed, Billed, and
Collected for Care
Provided to Veterans
Subject to Copayments
(Oct. 1, 1987-Mar. 31,
1988)
Appendix IV                                                            17
Factors Affecting
Recoveries
Appendix V                                                             18
Reasonsa Center
Might Have Difficulty
Collecting From
Veterans


                         Page 10   GAO/HRD90-77   Veterans’   Capayments
  B-238822




  report specifies responsibility for identifying deficiencies and develop-
  ing an action plan.
. Completing an internal audit of copayment billing delays and consider-
  ing several methods of patient control and more timely bill preparations.


  Unless you publicly announce its contents earlier, we plan no further
  distribution of this report for 30 days. At that time, we will send copies
  to the Secretary of Veterans Affairs and interested congressional com-
  mittees. We will also make copies available to others upon request.

  The report was prepared under the direction of David P. Baine, Director,
  Federal Health Care Delivery Issues. If you have any questions, you
  may contact him at (202) 275-6207. Other major contributors are listed
  in appendix VII.

   Sincerely yours,




   Lawrence H. Thompson
   Assistant Comptroller General




   Page 8                                     GAO/HBD%77    Veterans’   Copayments
                                         5238822




                                         Although VA guidelines direct centers to bill veterans as soon as debts
                                         are identified, the five centers waited until after the veterans were dis-
                                         charged before starting the billing process. Overall, three of every four
                                         inpatient bills were sent more than 30 days after the veterans were dis-
                                         charged. There were also delays in billing for outpatient care. None of
                                         the inpatients or outpatients sampled at these centers paid before they
                                         left.

                                         These delays appear to have contributed to veterans’ nonpayment. Vet-
                                         erans in our sample who paid the full copayment had bills sent, on aver-
                                         age, about 57 days after they were discharged. In contrast, those who
                                         did not pay had bills sent, on average, about 120 days after they were
                                         discharged. The average number of days from inpatient discharge to
                                         billing for sample veterans ranged from 56 days to 111 days at the five
                                         centers, as figure 4 shows.


Figure 4: Average Time Taken to Bill
Inpatient Veterans Sampled (Oct. 1987.
                                          125       Average Number of Days Fmm Dkcharga to Billing
Mar. 1988)
                                                -
                                          im




                                         VA Mdkal       Center




                                          Page 6                                                     GAO/HRD9077   Veterans’   Copayments
                                  5238822




Figure 2: Estimated Value of
Copayments Owed at Five Centers
Visited (Oct. 1987.Mar. 1988)                                               Billed/Collected




                                                                            Not Billed




                                                                             Billed/Not Collected




                                  The five centers had billing processes that were labor intensive and time
                                  consuming. Rather than billing veterans at the time the centers provided
                                  care, generally the admissions clerks prepared a monthly listing of vet-
                                  erans who owed copayments and then sent it to the billing clerks. To
                                  determine the amount owed, the billing clerks reviewed individual medi-
                                  cal records and verified the type of care provided. These records had to
                                  be retrieved from storage and then returned. In addition to being costly,
                                  this approach contributed to the missed collections, as the following sec-
                                  tions discuss.


Many Veterans Not Billed          The five centers did not bill veterans for an estimated $158,500 in
                                  copayments-$73,500       for inpatient care and $85,000 for outpatient
                                  care. Because of weaknesses in procedures, billing clerks at four of the
                                  five centers were frequently not notified when veterans owed copay-
                                  ments. In some instances, veterans who owed copayments were not
                                  included on the billing lists. Officials at the fifth center, Seattle, assigned
                                  the copayment billing clerk to other duties for several months. Missed
                                  billings varied widely among the centers, as figure 3 shows.




                                  Page 4                                         GAO/HRDW77         Veterans’   Copayments
                   B-233322




                   Appendix II provides additional information on our scope and
                   methodology.


                   The 159 VA medical centers’ collections exceeded costs, yielding a return
Results in Brief   of $1.36 for each $1 spent during fiscal year 1988. The centers’ return
                   for inpatient care was significantly higher than for outpatient care-
                   $1.74 compared to $1.08.

                   The five medical centers we visited collected only about half of the
                   copayments that veterans owed. This occurred primarily because the
                   centers failed to bill these veterans. Some veterans, however, did not
                   pay when billed. The bills were usually sent several weeks to months
                   after care was provided, contributing to the centers’ collection
                   difficulties.


                   During fiscal year 1988, VA centers collected about $9.9 million from vet-
VA’s Collections   erans at a cost of $7.3 million, a net return of $2.6 million. Collections
Exceeded Costs     for inpatient care accounted for most of this return, as figure 1 shows. I




                   ‘Medical centersreport collectionsto VAheadquartersmonthly, but information is not maintainedon
                   collectioncosts.Using a questionnaire,we collectedeachcenter’sestimateof staffing levels and time
                   spwt on copaymentactivities during a typical weekin fiscal yeiear1988.Wedetermmedsalary rates
                   for the staff identified and usedthis information to estimatethe centers’annual costs.



                   Page 2                                                   GAO/HRD-90.77Veterans’ Copayments