VA Health Care:

Medical Care Cost Recovery Activities Improperly Funded

HRD-94-2: Published: Oct 12, 1993. Publicly Released: Nov 17, 1993.

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Pursuant to a congressional request, GAO: (1) examined whether the Department of Veterans Affairs' (VA) medical centers are using the Medical-Care Cost Recovery (MCCR) Fund to finance cost recovery activities; and (2) reviewed VA efforts to improve the efficiency of its recovery activities.

GAO found that: (1) VA medical centers used the MCCR Fund in fiscal year 1992 to finance cost recovery activities; (2) some VA medical centers used VA medical care appropriations to finance cost recovery activities, even though federal law prohibits such use; (3) VA needs to examine medical centers' internal accounting and administrative controls and initiate appropriate actions to ensure that all medical care cost recovery activities are correctly identified and charged to the MCCR Fund; (4) some VA medical centers are using inefficient recovery procedures that increase their administrative costs; and (5) VA has several departmentwide actions under way that will help its medical centers better contain recovery costs.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: VA performed 54 Medical Care Cost Recovery (MCCR) financial-related reviews, which included ensuring that expenses are being appropriately charged to the MCCR appropriation. Field stations were asked to make appropriate cost transfers between MCCR and medical care appropriations. Such reviews are a continuing requirement.

    Recommendation: The Secretary of Veterans Affairs should direct the VA Chief Financial Officer to examine medical centers' internal accounting and administrative controls and, with the assistance of the VA Under Secretary for Health, initiate appropriate actions to ensure that all medical care cost recovery activities are correctly identified and charged to the MCCR Fund.

    Agency Affected: Department of Veterans Affairs

  2. Status: Closed - Implemented

    Comments: VA incorporated guidance for allocating personnel costs to the appropriate activity in its payroll system.

    Recommendation: For those staff that perform both cost recovery and non-cost-recovery activities, the Chief Financial Officer and the Under Secretary for Health should develop specific guidelines for allocating personnel costs to the appropriate activity.

    Agency Affected: Department of Veterans Affairs

 

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