Timely Establishment of Medical Care Recovery Rates Could Increase Recoveries

HRD-84-32: Published: Feb 13, 1984. Publicly Released: Feb 13, 1984.

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GAO summarized the results of its review of the Office of Management and Budget's (OMB) role in the establishment of the Veterans Administration's (VA) medical care recovery rates.

VA is authorized to recover the reasonable value of medical services provided to certain patients treated at VA facilities and OMB is responsible for setting the rates used by VA in billing liable third parties. In addition, OMB must approve rates for care provided by the Department of Defense (DOD) and the Department of Health and Human Services (HHS). The rates used by all three agencies should go into effect at the beginning of the fiscal year. Although OMB has made significant progress in reducing delays in establishing per diem rates, the rates still take effect after the beginning of the fiscal year to which they apply. GAO found that delays have reduced medical care recoveries by millions of dollars. Although an OMB directive requires the submission of proposed rates in March, only VA has been submitting its proposed rates in accordance with the directive. In addition, GAO found that VA could increase medical care recoveries while providing a more equitable basis for billings by establishing individual facility rather than national rates and by setting separate rates for acute and nonacute care.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: Although OMB has sent letters to the affected agencies establishing new reporting deadlines, as of October 29, 1984, OMB had not published the new recovery rates which were intended to be published by October 1, 1984.

    Recommendation: The Director of OMB should take actions to ensure that VA, DOD, and HHS submit their proposed rates in time to permit OMB review and publication of the rates by the beginning of the fiscal year. The actions taken should include revision of the 1973 directive to establish a new deadline for submission of the proposed rates.

    Agency Affected: Executive Office of the President: Office of Management and Budget


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