VA Community Care

High-priority program

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Program level Payment Integrity results

Sponsoring agency: Department of Veterans Affairs

The VA Community Care program allows VA to authorize Veteran care at non-VA health care facilities when the needed services are not available through the VA, or when the Veteran is unable to travel to a VA facility. The program was used to provide timely and specialized care to approximately three million Veterans in FY 2024. The program reported $416.63 million in projected monetary loss in FY 2024, most of which resulted from paying for claims not received within the required timeframe, services lacking proper authorization, or amounts that did not align with the contracted rate. There are no known financial, contractor or provider status related barriers prohibiting improving the prevention of improper payments.

PROGRAM METRICS

$14,168 M

in FY 2021 outlays, with a

83.9%

payment accuracy rate

PROGRAM METRICS

$17,382 M

in FY 2022 outlays, with a

92.2%

payment accuracy rate

PROGRAM METRICS

$20,153 M

in FY 2023 outlays, with a

95.1%

payment accuracy rate

PROGRAM METRICS

$21,982 M

in FY 2024 outlays, with a

98.1%

payment accuracy rate

PROGRAM METRICS

$25,444 M

in FY 2025 outlays, with a

97.6%

payment accuracy rate

  • Improper payment estimates over time
    View as:

    Chart toggle amounts:
    Proper payments
    Overpayment
    Underpayment
    Technically improper
    Unknown

Payment Integrity results

  • FY 2021 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2019 - 09/2020


    Confidence interval:

    >90%


    Margin of error:

    +/-3.38

Overpayments

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $1,389.54 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $1,389.54 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $0.0 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $184.94 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $184.94 M

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $527.2 M

Additional information

$712.14 M

Unknown Payment Details

VA had lacking or insufficient documentation to validate whether a payment was proper or not.

The amount of payments that could either be proper or improper but the agency is unable to determine whether they were proper or improper as a result of insufficient or lack of documentation is $173.0 M


Cause of insufficient or lack of documentation & why the documentation is needed for determination of payment type
Payment cause Amount Description of the documentation that was not provided and explanation of why the program is unable to conclude whether the payment is proper or improper without that documentation

Evaluation of corrective actions

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 VA Community Care program decreased its error rate from 78.51 percent to 16.06 percent (62.45% reduction) and improper payments from $7,476.55 million to $2,274.69 million ($5,201.86 million reduction). Due to VA Community Care reporting over $100 million of overpayments/monetary loss in FY2020, the program was required by Office of Management and Budget to report quarterly on activities and accomplishments that reduce monetary loss. Those activities and accomplishments can be found at PaymentAccuracy.gov. VA Community Care has remained committed to actions that reduce monetary loss and continues to tailor corrective actions to reduce improper payments.

Future payment integrity outlook

VA Community Care has established a baseline.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $17,382 M
Current year +1 estimated future improper payments $2,476.93 M
Current year +1 estimated future unknown payments $130.36 M
Current year +1 estimated future improper payment and unknown payment rate 15.0 %

The program's current year improper payment and unknown payment rate of 16.06 % 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.

Additional programmatic information

  • FY 2022 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2020 - 09/2021


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-3.01

Overpayments

Overpayments are within the agency control. The agency has the direct ability to prevent overpayments from occurring by improving efficiencies in the payment processes and accuracy of pricing results. Additionally, system enhancements will improve functionality of the payment processing systems and allow for automation of the authorization review. These improvements will decrease human error and increase payment accuracy.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $770.89 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $770.89 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $0.0 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $0.54 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.54 M

Technically improper payments

While VA confirmed the payment was paid to the right person in the right amount, the payment failed to meet all regulatory and/or statutory requirements. Specifically, the authorization exceeded the $10,000 threshold in the VA Acquisition Regulations 813.307. This resulted in technically improper payments.
The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $311.13 M

Additional information

$311.67 M

Unknown Payment Details

VA had lacking or insufficient documentation related to the payment that was required to validate whether a payment was proper or not. The agency was missing documentation which contained key information that would have enabled the agency's ability to discern whether the payment was proper or improper. The missing documentation contained information such as the final pricing methodology related to the correct payment amount.

The amount of payments that could either be proper or improper but the agency is unable to determine whether they were proper or improper as a result of insufficient or lack of documentation is $280.57 M


Cause of insufficient or lack of documentation & why the documentation is needed for determination of payment type
Payment cause Amount Description of the documentation that was not provided and explanation of why the program is unable to conclude whether the payment is proper or improper without that documentation

Evaluation of corrective actions

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 or mitigation strategies and whether the actions were effectively implemented and prioritized within the agency. The results for the VA Community Care program indicated that of the nine actions assessed, six were closed and determined to be effective in mitigating the root cause, two were closed and determined to be ineffective in mitigating the root cause, and one was open and determined to be correctly designed to 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 $2,018.02 million in FY 2020 to $1,381.62 million in FY 2021, or a 32% 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 $5,458.54 million in FY 2020 to $411.72 million in FY 2021, or a 92% reduction. There were no errors or associated corrective actions or mitigation strategies tied to unable to determine whether proper or improper in FY 2020.

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.

Future payment integrity outlook

VA Community Care has established a baseline.

The VA Community Care 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.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $20,339.04 M
Current year +1 estimated future improper payments $1,220.34 M
Current year +1 estimated future unknown payments $305.09 M
Current year +1 estimated future improper payment and unknown payment rate 7.5 %
Current year +1 estimated future improper payment and unknown payment reduction target 7.5 %

The program's current year improper payment and unknown payment rate of 7.84 % 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 2022.

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 OMB guidance before attempting to establish a tolerable rate. At this time, VA is not aware of additional program needs.

Additional programmatic information

The VA Community Care 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 reductions and is expected to achieve compliance with the Payment Integrity Information Act of 2019 for FY 2022. Specifically, from FY 2021 to FY 2022, the VA Community Care program decreased its improper and unknown error rate from 16.06% to 7.84% (8.22% reduction) and improper and unknown payments from $2,274.69 million to $1,363.13 million ($911.55 million reduction).

  • FY 2023 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2021 - 09/2022


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-2.02

  • Actions taken & planned to mitigate improper payments

    Mitigation strategy Description of the corrective action Completion date Status
    Automation
    Actions taken regarding automation include verified that the Electronic Claims Adjudication Management System is auto denying payments appropriately based on authorization logic. VA worked with appropriate offices to correct system logic so the Electronic Claims Adjudication Management System auto-calculates the accurate allowable amount. In addition, VA migrated National Dialysis Contract claims processing to Electronic Claims Adjudication Management System to auto-process correct rates.
    FY2023 Q1
    Completed
    Change Process
    Actions taken regarding change process include updated internal policies, ensuring the correct rates are being paid, and timely filing requirements are accurately enforced in the Electronic Claims Adjudication Management System. VA also improved pre-payment checks in the authorization system to improve claims processing accuracy. In addition, VA researched why Veteran's other health insurance information was not present in the payment system to correct and prevent future deficiencies. VA also continued with the post-implementation of the MISSION Act. This includes moving previous non-contract claims into compliant purchasing vehicles such as agreements and contracts. Finally, VA documented the decision of whether or not to apply the Centers for Medicare and Medicaid Services End-Stage Renal Disease network reduction to VA dialysis claims.
    FY2023 Q4
    Completed
    Automation
    Actions planned regarding automation include VA will update the claims processing system, Electronic Claims Adjudication Management System, to identify and auto-deny Community Care Network claims that should be processed by a third party administrator. VA contracting will instruct third party administrators to deny out of network facility provider claims for emergent episodes of care. Additionally, VA will update system logic in the claims processing system to suspend or deny dental claims when provider criteria does not reconcile to the Veterans Care Agreement.
    FY2024
    Planned
    Training
    Actions planned regarding training include VA will provide training on claims processing requirements when required other health insurance documentation is missing.
    FY2024
    Planned
    Change Process
    Actions planned regarding change process include clarifying payment methodology within VA and third party administrators to bill at the correct allowable rates. VA will also implement system checks for non-contract payments to suspend specific institutional inpatient and ambulance claims for manual review prior to payment. In addition, VA will instruct third party administrators to follow standard billing practices as defined in the contract. VA will communicate to claims processing agents to not process claims when timely filing requirements are not met.
    FY2024
    Planned

Overpayments

VA overpayments are within the agency's control and occur when the program failed to access the data/information needed to determine that a valid agreement was in place and/or that the provider is eligible per the contract or agreement covering the billed dates of services prior to issuing payment. VA is also required to validate that payment was made in accordance with the contract rate, billed services did not exceed the authorized care and were eligible per regulatory or contractual requirements prior to issuing payment, and that payment is made in the appropriate amount per regulation. For contract related instances, the Community Care Network contractors are also responsible for ensuring the VA is invoiced in accordance with the contract pricing and payment guidelines. The agency has the direct ability to prevent overpayments from occurring by improving controls in the payment processes, implementing system enhancements to include a prepayment check, and simplifying contract pricing. Additionally, system improvements will allow for automation of the authorization review, decreasing human error. These improvements will allow for more accurate payment validation.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $954.17 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $954.17 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $0.0 M

Overpayment type Eligibility element/information needed Eligibility amount
Overpayments Within Agency Control Contractor or Provider Status $590.73 M
Overpayments Within Agency Control Financial $363.44 M

Overpayment type Mitigation strategies taken Mitigation strategies planned
Overpayments within the agency’s control Automation, Change Process Automation, Change Process

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $5.36 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $5.36 M

Eligibility element/information needed Eligibility amount
Financial $5.36 M

Mitigation strategies taken Mitigation strategies planned
Automation, Change Process Change Process

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$5.36 M

Unknown Payment Details

The payments are considered unknown payments when VA had lacking or insufficient documentation to validate pricing. Specifically, VA was unable to determine the appropriate pricing due to the lack of other health insurance documentation. Without documentation supporting the other health insurance information for specific non-contract related payments, the program is unable to determine whether the amount paid is proper or improper.

The amount of payments that could either be proper or improper but the agency is unable to determine whether they were proper or improper as a result of insufficient or lack of documentation is $32.85 M


Cause of insufficient or lack of documentation & why the documentation is needed for determination of payment type
Payment cause Amount Description of the documentation that was not provided and explanation of why the program is unable to conclude whether the payment is proper or improper without that documentation
Other $32.85 M VA is required to validate the appropriate reimbursement rate per the other health insurance information for non-contract related payments. However, the agency currently does not have the documentation necessary to determine if the payment is proper or not. Specifically, VA is not able to determine the correct rate without the required explanation of benefits. When the explanation of benefits is not available, the claim should be returned to the provider. The missing documentation needed will assist VA in determining whether or not the reimbursement amount per VA regulation is correct. For this reason, we are unable to conclude whether the payment is proper or improper at time of payment without that documentation.

Mitigation strategies taken Mitigation strategies planned
Change Process Training

Evaluation of corrective actions

The VA Community Care program continues to prioritize and implement effective corrective actions and mitigation strategies that reduce improper and unknown payments as evidenced by its fifth consecutive year of reductions. 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 VA Community Care program indicated that of the eight actions assessed, seven were closed and determined to be effective in mitigating the root cause, and one was open and determined to be correctly designed to 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 reduction in the improper payment amount from $1,574.48 million in FY 2021 to $771.43 million in FY 2022, or a 51% reduction. For errors tied to statutory requirements of program not met, associated corrective actions or mitigation strategies contributed to a reduction in the improper payment amount from $527.20 million in FY 2021 to $311.13 million in FY 2022, or a 41% 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 2021 to FY 2022.

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 and to impact the payment process. Results of this review will be reported in FY 2024.

Future payment integrity outlook

VA Community Care has established a baseline.

The VA Community Care 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.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $21,620.5 M
Current year +1 estimated future improper payments $985.89 M
Current year +1 estimated future unknown payments $51.89 M
Current year +1 estimated future improper payment and unknown payment rate 4.8 %
Current year +1 estimated future improper payment and unknown payment reduction target 4.8 %

The program's current year improper payment and unknown payment rate of 4.92 % 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 maintain compliance with the Payment Integrity Information Act of 2019 for FY 2023.

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.

Additional programmatic information

The VA Community Care program continues to prioritize and implement effective corrective actions and mitigation strategies that reduce improper and unknown payments as evidenced by its fifth consecutive year of reductions and is expected to achieve compliance with the Payment Integrity Information Act of 2019 for FY 2023. Specifically, from FY 2022 to FY 2023, the VA Community Care program decreased its improper and unknown error rate from 7.84% to 4.92% (2.92% reduction) and improper and unknown payments from $1,363.13 million to $992.38 million ($370.75 million reduction). Given the time it takes to implement corrective actions and mitigation strategies, the program expects the continued positive impact of these actions on its FY 2024 improper and unknown payment rate.

  • FY 2024 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2022 - 09/2023


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-1.18

  • Actions taken & planned to mitigate improper payments

    Mitigation strategy Description of the corrective action Completion date Status
    Automation
    Actions taken included updating the claims processing system to identify and auto-deny Community Care Network claims that should be processed by a third-party administrator to deny out of network facility provider claims for emergent episodes of care. Additionally, VA transitioned National Dialysis Contract claims from a legacy system to an automated claims processing system to ensure claims are paid at the correct rates. In addition, VA updated system logic in the claims processing system to suspend or deny dental claims when provider criteria does not reconcile to the Veterans Care Agreement. Automation was the best mitigation strategy because improper and unknown payments resulted from manual processes and human error.
    FY2024 Q3
    Completed
    Change Process
    Actions taken included clarified payment methodology with VA and third-party administrators to bill at the correct allowable rates. Additionally, for non-network payments, VA implemented system checks to suspend institutional inpatient, and ambulance claims for manual review prior to payment. In addition, VA instructed third-party administrators to follow standard billing practices as defined in the contract and communicated to claims processing agents to not process claims when timely filing requirements were not met. Change process was the best mitigation strategy in order to develop stronger internal controls and mitigate risks within existing payment processes.
    FY2024 Q3
    Completed
    Change Process
    Actions planned include ensuring contract language is clear and clarify any inconsistent payment methodology instances with third-party administrators regarding payment discrepancies. Additionally, VA will engage in a contract modification to further elaborate on standard episode of care claims processing. In addition, VA will ensure timely filing criteria is clear and proper monitoring is in place. Change process was the best mitigation strategy in order to develop stronger internal controls and mitigate risks within existing payment processes.
    FY2025
    Planned
    Audit
    Actions planned include conducting post-payment reviews and establishing bills of collection for claims that were overpaid. These actions were designed to reduce overpayments attributed to failure to access data/information. Audit was the best mitigation strategy to help identify overpayments and perform a follow-up process.
    FY2025
    Planned

Overpayments

VA overpayments are within the agency's control and occur when the program failed to access the data/information needed to determine that the provider is eligible per the contract or agreement covering the billed dates of services prior to issuing payment. VA is also required to validate that payment was made in accordance with the contract rate and in the appropriate amount per regulation, billed services did not exceed the authorized care, and claims were received within the required timeframes. For contract related instances, the Community Care Network contractors are also responsible for ensuring the VA is invoiced in accordance with the contract pricing and payment guidelines, and VA is responsible to ensure the contract terms are met. The agency has the direct ability to prevent overpayments from occurring by improving controls in the payment processes and simplifying contract pricing. These improvements will allow for more accurate payment validation.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $416.63 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $416.63 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $0.0 M

Overpayment type Eligibility element/information needed Eligibility amount
Overpayments Within Agency Control Contractor or Provider Status $92.49 M
Overpayments Within Agency Control Financial $324.14 M

Overpayment type Mitigation strategies taken Mitigation strategies planned
Overpayments within the agency’s control Automation, Change Process Audit, Change Process

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $0.0 M

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

Additional information

$0 M

Unknown Payment Details

Evaluation of corrective actions

The VA Community Care program continues to prioritize and implement effective corrective actions and mitigation strategies that reduce improper and unknown payments as evidenced by its sixth consecutive year of reductions. Specifically, from FY 2023 to FY 2024, the VA Community Care program decreased its improper and unknown error rate from 4.92% to 1.90% (3.02% reduction) and improper and unknown payments from $992.38 million to $416.63 million ($575.75 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 VA Community Care program indicated that of the eight actions assessed, seven were effective and one was designed effectively. 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 reduction in the improper payment amount from $959.53 million in FY 2023 to $416.63 million in FY 2024, or a 57% reduction. For errors tied to unable to determine whether proper or improper, associated corrective actions or mitigation strategies contributed to a 100% reduction in the unknown payment amount from $32.85 million in FY 2023 to $0 in 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 and to impact the payment process. Results of this review will be reported in FY 2025.

VA reduced the error rate in this program from 4.92% in FY 2023 to 1.90% in FY 2024, resulting in a reduction of $575.75 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 were attributed to VA's failure to access data/information. Actions taken regarding automation included updating the claims processing system to identify and auto-deny Community Care Network claims that should be processed by a third-party administrator to deny out of network facility provider claims for emergent episodes of care. Additionally, VA transitioned National Dialysis Contract claims from a legacy system to an automated claims processing system to ensure claims are paid at the correct rates. In addition, VA updated system logic in the claims processing system to suspend or deny dental claims when provider criteria does not reconcile to the Veterans Care Agreement. Actions taken regarding training included VA providing training on claims processing requirements when required other health insurance documentation was missing. Actions taken regarding change process included clarified payment methodology with VA and third-party administrators to bill at the correct allowable rates. Additionally, for non-network payments, VA implemented system checks to suspend institutional inpatient and ambulance claims for manual review prior to payment. In addition, VA instructed third-party administrators to follow standard billing practices as defined in the contract and communicated to claims processing agents to not process claims when timely filing requirements were not met. Actions planned regarding audit include conducting post-payment reviews and establishing bills of collection for claims that were overpaid. Actions planned regarding change process include ensuring contract language is clear and clarify any inconsistent payment methodology instances with third-party administrators regarding payment discrepancies. Additionally, VA will engage in a contract modification to further elaborate on standard episode of care claims processing. Finally, VA will ensure timely filing criteria is clear and proper monitoring is in place.

VA has identified root causes for improper and unknown payments and developed effective corrective actions and mitigation strategies. The cause of FY 2024 improper payments were attributed to failure to access data/information. The majority of overpayments occurred because the claim was not received within the required timeframe. Automation was the best mitigation strategy because overpayments 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. Audit was the best mitigation strategy to help identify overpayments and perform a follow-up process.

VA updates corrective action plans annually based on testing results, and no less than quarterly throughout the fiscal year, to ensure actions taken and 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 planned has reduced or is properly designed to reduce improper and unknown payments for a specific root cause based on a set benchmark. VA identifies areas for improvement and 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 4.92% in FY 2023 to 1.90% in FY 2024, and the $575.75 million reduction in improper and unknown payments supports the effective implementation and prioritization of action within the agency. Furthermore, 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.

Future payment integrity outlook

VA Community Care has established a baseline.

The VA Community Care 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.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $26,443.01 M
Current year +1 estimated future improper payments $475.97 M
Current year +1 estimated future unknown payments $0 M
Current year +1 estimated future improper payment and unknown payment rate 1.8 %
Current year +1 estimated future improper payment and unknown payment reduction target 1.8 %

The program's current year improper payment and unknown payment rate of 1.9 % 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.

Additional programmatic information

The VA Community Care program continues to prioritize and implement effective corrective actions and mitigation strategies that reduce improper and unknown payments as evidenced by its sixth consecutive year of reductions and is expected to maintain compliance with the Payment Integrity Information Act of 2019 for FY 2024. Specifically, from FY 2023 to FY 2024, the VA Community Care program decreased its improper and unknown error rate from 4.92% to 1.90% (3.02% reduction) and improper and unknown payments from $992.38 million to $416.63 million ($575.75 million reduction). Given the time it takes to implement corrective actions and mitigation strategies, the program expects the continued positive impact of these actions on its FY 2025 improper and unknown payment rate.

Accountability for detecting, preventing, and recovering improper payments

This program was determined compliant in FY 2024 by the Office of Inspector General and reported improper and unknown payments below required thresholds for a compliance determination in FY 2025. In FY 2025, VA executive managers and program personnel will be focused on prevention and recovery of overpayments as appropriate. This will include various mitigation strategies such as change process and audit. These actions address the root causes of errors found in FY 2024 payment integrity testing. VA’s executive managers to include the Executive Director of Integrated Veteran Care and Integrated External Networks and program personnel will be held accountable through annual performance criteria contained within their performance plans. Performance criteria will be unique to and inclusive of all their duties. Depending on each employees’ responsibilities, duties can include preventing improper and unknown payments through effective internal controls, recovering overpayments if appropriate, and implementing remediation efforts for known causes of improper and unknown payments. State and local governments are not involved in the execution of this program.

  • FY 2025 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2023 - 09/2024


    Confidence interval:

    95% to <100%


    Margin of error:

    +/-1.26

Causes

VA overpayments are within the agency's control and occurred when the program failed to access the data/information needed to validate that a payment was made in accordance with the contract rate, or that a correct amount to pay was returned by the payment system used to process the claim. In addition, the program did not confirm health care providers were eligible per the contract or agreement covering the billed dates of services or whether billed services were within the authorized care, all of which are required prior to issuing payment. VA underpayments occurred when the program failed to access the data/information needed to deny claims which returned an incorrect amount to pay in the payment system. VA unknown payments occurred when VA had missing or insufficient documentation related to submission from health care providers, which resulted in clean claim requirements not being met.

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $552.15 M
Amount of overpayments outside the agency's control $0.0 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
Amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
Amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $552.15 M

Underpayment root cause Underpayment amount
Amount of underpayments $15.34 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $15.34 M

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

The amount that could either be proper or improper but the agency is unable to determine whether it was proper or improper as a result of insufficient or lack of documentation $40.19 M

Prevention

Actions taken regarding audit included conducting post-payment reviews to identify errors in automated adjudication logic to prevent future improper payments and issuing additional payments or establishing bills of collection for claims that were overpaid. These actions were designed to reduce overpayments attributed to failure to access data/information. Audit was the best mitigation strategy to help identify overpayments and perform a follow-up process. VA completed these audit actions on July 22, 2025. Actions taken regarding change process included VA ensuring contract language was clear and clarifying any inconsistent payment methodology instances with third-party administrators regarding payment discrepancies. VA also ensured timely filing criteria was clear and proper monitoring was in place. These actions were designed to reduce overpayments attributed to failure to access data/information. Change process was the best mitigation strategy in order to develop stronger internal controls and mitigate risks within existing payment processes. The completion date was June 11, 2025. Actions planned regarding audit include conducting post-payment reviews to identify errors in automated adjudication logic to prevent future improper payments and issue additional payments or establish bills of collection for claims that were paid in the incorrect amount. These actions are designed to reduce overpayments and underpayments attributed to failure to access data/information. Audit was the best mitigation strategy to help identify overpayments and perform a follow-up process. The estimated completion date is September 30, 2025. Actions planned regarding change process include ensuring contract language is clear and clarifying any instances of inconsistent payment methodology when third-party administrators bill at incorrect rates, do not follow clean claim requirements, or when providers do not meet the requirements for reimbursement. Additionally, VA is entering into a contract modification to clarify the claims processing for standard episodes of care. These actions are designed to reduce overpayments attributed to failure to access data/information, and unknown payments attributed to being unable to determine whether proper or improper. Change process was the best mitigation strategy in order to develop stronger internal controls and mitigate risks within existing payment processes. The estimated completion date is January 1, 2026.
The VA Community Care program continues to prioritize and implement effective corrective actions and mitigation strategies that reduce improper and unknown payments. In FY 2025, VA performed an effectiveness review of the actions developed and implemented in FY 2024. 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 VA Community Care program indicated that of the seven actions assessed, all seven were effective. 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 FY 2025, the VA Community Care program errors increased or remained unchanged in all cause categories and the program experienced a $3.46 billion increase in outlays. VA has increased the sample size in this program area to gain additional insight into these errors and continues to expand and enhance corrective actions to address high risk program areas to ensure they address the root cause(s) of each error. VA will perform an effectiveness review in FY 2026 of the corrective action plans developed and implemented in FY 2025 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 2026.

VA updates corrective action plans annually based on testing results, and no less than quarterly throughout the fiscal year, to ensure actions taken and 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 planned 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 are identified, VA conducts a root cause analysis to refine the program's mitigation strategies to ensure they addressed and reduced root cause(s) of error. 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 were evaluated by the Office of Inspector General during their FY 2025 annual audit and determined reasonable with no recommendations for improvement. The increase in the VA Community Care program's improper and unknown payment rate from 1.90% in FY 2024 to 2.39% in FY 2025, and the $191.04 million increase in improper and unknown payments supports that improvements are needed to the program's corrective actions in place in FY 2025. As part of the established corrective action process, the program reported improved corrective action and mitigation strategies planned for FY 2026.

Payment type Mitigation strategies taken Mitigation strategies planned
Overpayments Audit, Change Process Audit, Change Process
Underpayments Audit Audit
Unknown payments Change Process Change Process

Eligibility element/information needed Description of the eligbility element/information
Contractor or Provider Status Status or standing of contractor or provider, including recipient eligibility to provide medical services
Financial The financial position or status of a beneficiary, recipient, or their family

Additional information

The VA Community Care program continues to prioritize and implement corrective actions and mitigation strategies that reduce improper and unknown payments. VA Community Care remains under the 10% compliance threshold established by the Payment Integrity Information Act of 2019 for the fourth consecutive year. The program remains compliant and underwent improvements in FY 2025 that will improve its ability to reduce improper payments in the future. VA has increased the sample size in this program area to gain additional insight into these errors and continues to update, expand and enhance corrective actions to address high risk program areas to ensure they address the root cause(s) of each error. This included conducting post-payment reviews and establishing bills of collection for claims that were overpaid; clarifying contract language, payment methodology, and timely filing criteria; and improving corrective actions and mitigation strategies planned for FY 2026.

Reduction target

2.25 %

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.

This program was determined compliant in FY 2025 by the Office of Inspector General and reported improper and unknown payments below required thresholds for a compliance determination in FY 2026. In FY 2026, VA executive managers and program personnel will be focused on prevention and recovery of overpayments as appropriate. This will include various mitigation strategies such as change process and audit. These actions address the root causes of errors found in FY 2025 payment integrity testing. VA’s executive managers to include the Executive Director of Integrated Veteran Care and Integrated External Networks and program personnel will be held accountable through annual performance criteria contained within their performance plans. Performance criteria will be unique to and inclusive of all their duties. Depending on each employees’ responsibilities, duties can include preventing improper and unknown payments through effective internal controls, recovering overpayments if appropriate, and implementing remediation efforts for known causes of improper and unknown payments. State and local governments are not involved in the execution of this program.

$15.34 M