Lack of oversight caused VA to overspend by tens of millions on prosthetics: watchdog

VA prosthetics

The Veterans Health Administration’s Prosthetics and Sensory Aids Service (PSAS) paid “about $ 10 million more than reasonable fees” for VA prosthetics devices over a six-month period due to lack of internal control in VA. Report comes from the Inspection General of the Department of Veterans Affairs. The report estimates that if these expenses are better managed, HAV could save up to $ 20 million each year.

An audit found that more than $ 300 million was spent on prosthetic-related equipment provided to veterans. This money represents 9% of total prosthetic spending in 2019 by providers other than VHA. The VHA then reimburses these providers based on Medicare rates. The administration does not have its own pricing guidelines for these VA prosthetics and orthotics supplied to veterans through outside providers. The report found that the lack of an established pricing structure, coupled with a lack of oversight caused many losses. This means the office loses savings on things like artificial limbs, shoes, and other related items.

Inconsistencies in Transaction Data

In some cases, VAOIG found that facilities were reimbursing third-party vendors at rates that even exceeded those Medicare rates. Looking at a random sample, the audit identified approximately 41,300 out of 112,600 transactions that went beyond what was considered a reasonable rate of reimbursement. In some cases, facilities even overpaid vendors by different amounts for the same items, or recorded incorrect transaction data.

The report states that the audit team went so far as to ask VA and VHA officials which pricing methods might apply to these transactions. The officials said “it was not their responsibility to monitor laws and regulations.” Instead officials 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. However, the report notes that those officers provided any such advisement. (continue reading)

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