The US Department of Veterans Affairs Health Administration (VHA) paid out $10 million more than it should have in 2020 for O&P devices, according to a new audit released this month.
An investigation by the VHA’s inspector general showed that “oversight of prosthetic spending was ineffective, resulting in medical facilities sometimes reimbursing vendors at unreasonable rates. The audit team estimated that medical facilities spent about $10 million more than reasonable rates in the six-month period from October 2019 through March 2020.”
Auditors also found “that prosthetic spending data were unreliable—about 36,200 transactions in the National Prosthetics Patient Database from October 2019 through March 2020 contained at least one inaccurate data element, including the price paid.”
According to a story in the Military Times, an audit by the Office of Inspector General (OIG) found that over $300 million, accounting for 9 percent of total prosthetic spending in 2019, went toward prosthetic-related equipment provided to veterans by vendors outside the VHA. The VHA, however, never set any pricing guidelines for prosthetic devices that come from outside vendors, according to the report.
In fiscal year 2019, the VA spent about $3.47 billion on prosthetic and rehabilitative items and services such as artificial limbs, orthopedic footwear, orthopedic braces and supports, eyeglasses, hearing aids, speech communication aids, cosmetic restorations, and home oxygen, the report said.
The investigators used available Medicare rates to assess if the vendors were charging “reasonable” rates. From October 2019 through March 2020, the VHA was overbilled on more than 41,000 transactions out of about 112,600 orders, according to the report.
The Military Times reported that the audit team asked VA and VHA officials which pricing methods might apply to these transactions, and officials said “it was not their responsibility to monitor laws and regulations.” According to the audit, officials instead told the OIG that they operate under the assumption that the VA’s Office of Regulatory and Administration Affairs or the Office of General Counsel will advise when relevant laws or regulations go into effect.
Agency officials said corrective action was underway to address oversight issues.
