VA continues to prioritize and implement effective corrective actions and mitigation strategies that reduce improper payments agency-wide as evidenced by its third consecutive and largest year of reductions. Specifically, from FY20 to FY21, the Purchased Long Term Services and Supports program decreased its error rate from 95.34 percent to 72.80 percent (22.54% reduction) and improper payments from $2,547.91 million to $1,895.26 million ($652.65 million reduction). Due to PLTSS reporting over $100 million of overpayments/monetary loss in FY 2021, PLTSS will begin reporting as a high priority program in FY 2022.

Purchased Long Term Services and Supports has established a baseline.

The program's current year improper payment and unknown payment rate of 72.8 % has not been achieved with a balance of payment integrity risk and controls and does not represent the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is not the tolerable rate.

VA does not have additional program needs.

VA performed an effectiveness review in FY 2022 of the actions implemented in FY 2021. The purpose of this review was to assess the appropriateness of corrective actions and mitigation strategies and whether the actions were effectively implemented and prioritized within the agency. The results for the Purchased Long Term Services and Supports program indicated that of the five actions assessed, one was closed and determined to be effective in mitigating the root cause, one was closed and determined to be ineffective in mitigating the root cause, two were open and determined to be correctly designed to mitigate the root cause, and one was open and determined that improvements could be made to effectively mitigate the root cause. If improvements could be made, VA conducted a root cause analysis to refine the program's mitigation strategies to ensure they address and reduce root cause(s) of error.

For errors tied to failure to access data/information, associated corrective actions or mitigation strategies contributed to a total reduction in the improper payment amount from $158.38 million in FY 2020 to $74.79 million in FY 2021, or a 53% reduction. For errors tied to statutory requirements of program were not met, associated corrective actions or mitigation strategies contributed to a total reduction in the improper payment amount from $2,131.72 million in FY 2020 to $912.36 million in FY 2021, or a 57% reduction. For errors tied to unable to determine whether proper or improper, associated corrective actions or mitigation strategies did not reduce the unknown payment amount from FY 2020 to FY 2021.

VA will perform an effectiveness review in FY 2023 of the corrective action plans implemented in FY 2022 due to the time needed to implement actions as well as to impact the payment process. Results of this review will be reported in FY 2023.

Purchased Long Term Services and Supports has established a baseline.

The Purchased Long Term Services and Supports reduction target is equal to the estimated future improper payment and unknown payment rate. VA establishes reduction targets by setting them lower than the current year improper payment estimates. Reduction targets are a balance between being aggressive and realistic. One thing VA has learned from the many years it has been working to comply with improper payments legislation is that it can take three years from the point an error cause is isolated during testing to develop a corrective action, implement it, and then wait for payments to be made that can then be tested the following year since VA tests and reports improper payments one year in arrears.

The program's current year improper payment and unknown payment rate of 47.45 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

VA has not determined a tolerable rate due to all requirements for establishing a tolerable rate not yet being met. VA continues to prioritize implementing appropriate corrective actions and mitigation strategies to reduce improper and unknown payments. The program plans to be compliant with the Payment Integrity Information Act of 2019 by for FY 2024.

VA has not yet determined the tolerable rate. VA is working to determine all requirements for establishing a tolerable rate per Office of Management and Budget guidance before attempting to establish tolerable rates. At this time, VA is not aware of additional program needs.

VA is still working to determine all requirements for establishing a tolerable rate per Office of Management and Budget guidance before attempting to establish a tolerable rate. At this time, VA is not aware of additional program needs.

The Purchased Long Term Services and Supports program continues to prioritize and implement effective corrective actions and mitigation strategies that reduce improper and unknown payments as evidenced by its third consecutive year of rate reductions. Specifically, from FY 2022 to FY 2023, the Purchased Long Term Services and Supports program decreased its improper and unknown error rate from 47.45% to 38.72% (8.73% reduction). In FY 2023, VA performed an effectiveness review of the actions developed and implemented in FY 2022. The purpose of this review was to assess the appropriateness of corrective actions and mitigation strategies and whether the actions were effectively implemented and prioritized within the agency. The results for the Purchased Long Term Services and Supports program indicated that of the five actions assessed, three were closed and determined to be effective in mitigating the root cause, one was open and determined to be correctly designed to mitigate the root cause, and one was open and determined that improvements could be made to effectively mitigate the root cause. If improvements could be made, VA conducted a root cause analysis to refine the program's mitigation strategies to ensure they address and reduce root cause(s) of error.

For errors tied to failure to access data/information, associated corrective actions or mitigation strategies contributed to a total reduction in the improper payment amount from $110.01 million in FY 2021 to $62.10 million in FY 2022, or a 44% reduction. For errors tied to statutory requirements of program not met, associated corrective actions or mitigation strategies contributed to a total reduction in the improper payment amount from $1,308.24 million in FY 2021 to $1,048.38 million in FY 2022, or a 20% reduction. For errors tied to unable to determine whether proper or improper, associated corrective actions or mitigation strategies contributed to a total reduction in the unknown payment amount from $477.02 million in FY 2021 to $175.01 million in FY 2022, or a 63% reduction.

VA will perform an effectiveness review in FY 2024 of the corrective action plans developed and implemented in FY 2023 due to the time needed to develop and implement actions as well as to impact the payment process. Results of this review will be reported in FY 2024.

Purchased Long Term Services and Supports has established a baseline.

The Purchased Long Term Services and Supports reduction target is equal to the estimated future improper payment and unknown payment rate. VA establishes reduction targets by setting them lower than the current year improper payment estimates. Reduction targets are a balance between being aggressive and realistic. One thing VA has learned from the many years it has been working to comply with improper payments legislation is that it can take three years from the point an error cause is isolated during testing to develop a corrective action, implement it, and then wait for payments to be made that can then be tested the following year since VA tests and reports improper payments one year in arrears.

The program's current year improper payment and unknown payment rate of 38.72 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

VA has not determined a tolerable rate due to all requirements for establishing a tolerable rate not yet being met. VA continues to prioritize implementing appropriate corrective actions and mitigation strategies to reduce improper and unknown payments. The program plans to be compliant with the Payment Integrity Information Act of 2019 for FY 2026.

VA has not determined a tolerable rate due to all requirements for establishing a tolerable rate not yet being met. In March 2023, GAO acknowledged VA’s substantial reduction in improper and unknown payments using effective mitigation strategies and corrective actions (GAO-23-106285, IMPROPER PAYMENTS: Fiscal Year 2022 Estimates and Opportunities for Improvement). VA continues to prioritize implementing appropriate corrective actions and mitigation strategies and has adequate funding to implement improvements planned to internal controls, human capital, information systems and other infrastructure, as needed, over VA’s payment processing and procurement systems to continue reducing improper and unknown payments. VA will establish a tolerable rate if all applicable requirements are met.

At this time, VA is not aware of additional program needs. Therefore, VA has not requested additional resources to establish and maintain internal controls to reduce improper and unknown payments to a tolerable rate.

The Purchased Long Term Services and Supports program continues to prioritize and implement effective corrective actions and mitigation strategies that reduce improper and unknown payments as evidenced by its fourth consecutive year of rate reductions. Specifically, from FY 2023 to FY 2024, the Purchased Long Term Services and Supports program decreased its improper and unknown error rate from 38.72% to 13.52% (25.20% reduction) and improper and unknown payments from $1.42 billion to $760.09 million ($657.90 million reduction). In FY 2024, VA performed an effectiveness review of the actions developed and implemented in FY 2023. The purpose of this review was to assess the appropriateness of corrective actions and mitigation strategies and whether the actions were effectively implemented and prioritized within the agency. The results for the Purchased Long Term Services and Supports program indicated that of the five actions assessed, three were effective, one was designed effectively, and one was designed ineffectively. If improvements could be made, VA conducted a root cause analysis to refine the program's mitigation strategies to ensure they address and reduce root cause(s) of error.

For errors tied to failure to access data/information, associated corrective actions or mitigation strategies contributed to a total reduction in the improper payment amount from $319.04 million in FY 2023 to $224.71 million in FY 2024, or a 29.57% reduction. For errors tied to statutory requirements of program not met, associated corrective actions or mitigation strategies contributed to a total reduction in the improper payment amount from $1,044.65 million in FY 2023 to $432.46 million in FY 2024, or a 59% reduction. For errors tied to unable to determine whether proper or improper, associated corrective actions did not result in a reduction from FY 2023 to FY 2024.

VA will perform an effectiveness review in FY 2025 of the corrective action plans developed and implemented in FY 2024 due to the time needed to develop and implement actions as well as to impact the payment process. Results of this review will be reported in FY 2025.

VA reduced the error rate in this program from 38.72% in FY 2023 to 13.52% in FY 2024, resulting in a reduction of $657.90 million, by implementing effective corrective actions and mitigation strategies. VA's process for development of corrective actions and mitigation strategies ensures the severity of the error is considered and the action is adequate. VA's corrective actions and mitigation strategies have been evaluated by the Office of Inspector General during their FY 2024 annual audit and determined reasonable with no recommendations for improvement. The overpayments and underpayments were attributed to failure to access data/information, technically improper payments were attributed to statutory requirements of the program not met, and unknown payments were attributed to being unable to determine whether proper or improper. Actions taken regarding automation included updating the claims processing system to pay or deny Homemaker/Home Health Aid Service, Community Nursing Home, and Veteran Directed Care claims appropriately. Actions planned regarding automation include updating the claims processing system to pay Bowel and Bladder and Community Nursing Home claims appropriately. Actions taken regarding change process include working to ensure invoices are being validated per the contract pricing prior to payment. Additionally, VA worked to implement short and long term contracting options for Community Nursing Home payments to improve compliance with procurement requirements. Finally, VA clarified payment methodology with third-party administrators to bill at the correct rates. Actions planned regarding change process include moving to a standardized rate schedule for Community Nursing Home payments in order to transition from a legacy system to an automated claims adjudication system. Additionally, VA will continue clarifying payment methodology with third-party administrators to bill at the correct allowable rates, and will work to implement short- and long-term contracting options for Community Nursing Home payments to improve compliance with procurement requirements. Further, VA will resolve contracting requirements involving missing signatures and inability to reconcile procurement vendor to invoice vendor, and will establish Veterans Care Agreements when appropriate. Actions planned regarding training include working internally with facilities to provide education and training to resolve missing documentation related to authorization, payment or Veteran level of care to support the payment process.

VA has identified root causes of improper and unknown payments and developed effective corrective actions and mitigation strategies. The cause of FY 2024 overpayments and underpayments were attributed to failure to access data/information, the cause of technically improper payments were attributed to statutory requirements of the program not met, and the cause of unknown payments were attributed to unable to determine whether proper or improper. In particular, the majority of overpayments occurred because claims were not paid according to the contracted rates. The majority of underpayments occurred because a payment system error resulted in the payment being made in an amount less than the contract or agreement rate. The majority of technically improper payments occurred because a purchase was made without a contract utilizing a Basic Ordering Agreement, which is not a contract. The majority of unknown payments occurred because VA was missing documentation such as a valid consultation or missing information on the claim document to be able to verify substantially all clean claim requirements were met per the contract or agreement. Automation was the best mitigation strategy because improper payments resulted from manual processes and human error. Change process was the best mitigation strategy in order to develop stronger internal controls and mitigate risks within existing payment processes. Training was the best mitigation strategy to communicate the importance of consistencies in standard operating procedures.

VA updates corrective action plans annually based on testing results, and no less than quarterly throughout the fiscal year, to ensure actions planned are appropriately prioritized and designed to mitigate risks of improper and unknown payments. VA monitors progress and results of implementation on a quarterly basis. Additionally, an effectiveness review is performed annually to measure if an action has reduced or is properly designed to reduce improper and unknown payments for a specific root cause based on a set benchmark. The annual effectiveness review process allows VA to create or update actions as necessary to ensure continued progress in the remediation of improper and unknown payments. If areas for improvement were identified, VA conducted a root cause analysis to refine the program's mitigation strategies to ensure they address and reduce root cause(s) of error. The decrease in the improper payment and unknown payment rate from 38.72% in FY 2023 to 13.52% in FY 2024 and the $657.90 million reduction in improper and unknown payments supports the effective implementation and prioritization of action within the agency.

Purchased Long Term Services and Supports has established a baseline.

The Purchased Long Term Services and Supports reduction target is equal to the estimated future improper payment and unknown payment rate. VA establishes reduction targets by setting them lower than the current year improper and unknown payment estimates. Reduction targets are a balance between being aggressive and realistic. One thing VA has learned from the many years it has been working to comply with improper payments legislation is that it can take three to five years from the point an error cause is isolated during testing to develop a corrective action, implement it, and then wait for payments to be made that can then be tested the following year since VA tests and reports improper payments one year in arrears.

The program's current year improper payment and unknown payment rate of 13.52 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

VA has not determined a tolerable rate due to all requirements for establishing a tolerable rate not yet being met. VA continues to identify and implement appropriate corrective actions and mitigation strategies to further reduce the improper and unknown payment rate. VA has determined these corrective actions and mitigation strategies do not impede the mission and can be implemented cost-effectively within existing budget authority.

VA has not determined a tolerable rate due to all requirements for establishing a tolerable rate not yet being met. In March 2023, the Government Accountability Office acknowledged VA’s substantial reduction in improper and unknown payments using effective mitigation strategies and corrective actions (GAO-23-106285, IMPROPER PAYMENTS: Fiscal Year 2022 Estimates and Opportunities for Improvement). VA continues to prioritize implementing appropriate corrective actions and mitigation strategies and has adequate funding to implement improvements planned to internal controls, human capital, information systems and other infrastructure, as needed, over VA’s payment processing and procurement systems to continue reducing improper and unknown payments. VA is still actively reducing improper and unknown payments within its existing budget authority. VA considers the reduction of improper and unknown payments a critical part of its financial stewardship efforts.

At this time, VA is not aware of additional program needs. Therefore, VA has not requested additional resources to establish and maintain payment integrity.