department of veterans affairs, veterans, veteran health care, Jonathan Kaupanger, Veterans Choice Program

Is the Veterans’ Choice program VA’s money pit?

gettyimages 169117083 Is the Veterans Choice program VA’s money pit?

WASHINGTON, DC – MAY 20: Newly redesigned $100 notes lay in stacks at the Bureau of Engraving and Printing on May 20, 2013 in Washington, DC. The one hundred dollar bills will be released this fall and has new security features, such as a duplicating portrait of Benjamin Franklin and microprinting added to make the bill more difficult to counterfeit. (Photo by Mark Wilson/Getty Images)

By Jonathan Kaupanger

Once again, the VA’s popular Choice Program is running out of money. The program could run out of funds either by December of this year or March of 2018.  In a letter to VA’s Secretary, Senator John McCain all but asked what the hell is going on over at Veterans Affairs?

With a deadline of the end of this week, McCain has two questions and is demanding answers from Secretary David J. Shulkin. Is the VA facing a third funding shortfall for the Choice Program this year? And, will funding for the Choice program remain available next fiscal year?

The Choice Program is rapidly becoming the VA’s money pit. Created as a temporary fix to the agency’s 2014 wait time scandal, the initial funding started with $15 billion.  $5 billion was set aside to hire more physicians, staff and to improve VA’s physical infrastructure.  The remaining $10 billion was expected to last through August of this year.

According to VA’s internal budget documents, an additional $2.4 billion was obligated for the program in fiscal year (FY) 2015 and an additional $2.6 billion for FY16. The VA Choice and Quality Employment Act of 2017 added an additional $2.1 billion and the agency is already asking for $2.9 billion for FY18 and $3.5 billion for FY19.  There was also supposed to be a carryover of $626 million from 2017 to 2018, but that’s obviously not happening now.

McCain is not the only person wanting answers from the VA about the Choice Program right now. VA’s Inspector General sent a memo to Shulkin on Sept. 12 informing him that the program has exhausted 75% of funding.  The IG also had questions that came from three audits that are currently underway on the program.

Audit staff reported there wasn’t an appropriate payment process for Choice claims and that it also had an ineffective internal control system for that payment process. Payments for some medical claims were made twice, reimbursement payments were for more than the provider requested and other payments didn’t have the correct Medicare contract adjusted rates.

By August 1 of this year, more than 5.5 million claims have been made through the program, totaling a bulk payment of $1,987,442,688. The audit team reported the bulk payment process used by the VA “significantly increased the opportunity for payment errors.”  As stated in the IG memo, it was discovered that VA didn’t have a review process for these claims before making the bulk payments.  The number of duplicate payments is thought to be in the tens of thousands.

Invoices for medical care aren’t processed by the VA, they have contracts with two third-party administrators (TPA) to do this. Just one of those TPAs, a company called TriWest, recently had to let the VA know that they were being overpaid.  It identified about 58,000 claims that had been improperly paid, resulting in about $35 million of overpayments by the VA.  After doing its own investigation, VA’s Contracting Officer sent a letter to both TPAs identifying approximately $89.7 in duplicate payments.

In a statement to The Associated Press, VA said it wasn’t sure when the Choice funds would be depleted. Earlier this year, VA started limiting referrals to outside doctors.  The proposal for a long-term fix to the problem is expected to come in the next few weeks.

Connect: @JonathanVets1 |

Listen Live