A Rancho Cordova-based managed-care support contractor that provides services for military and public-sector employees has paid back more than $97 million for overstated billings to the U.S. Department of Veterans Affairs.
Health Net Federal Services, which, in 2013, entered a $5.05 billion contract with the VA under the Patient-Centered Community Care program, offering private health care to veterans when VA facilities could not do so in a timely manner, returned the money to resolve “duplicate and inflated claims” submitted to the military veterans agency, Acting U.S. Attorney Phillip A. Talbert said Tuesday.
The settlement, announced in a press release, was the result of work by the U.S. Attorney’s Office for the Eastern District of California, which Talbert leads, and the civil division’s commercial litigation branch, with help from the VA’s Office of Inspector General and the Federal Bureau of Investigation.
Talbert said the claims settled by this agreement were allegations only, and there has been no determination of liability.
He noted that The Veterans Access, Choice and Accountability Act of 2014 expanded the services to cover veterans who waited more than 30 days for care or lived more than 40 miles away from a VA medical facility. Under this contract, Health Net served as the third-party administrator that secured private health care for veterans, reimbursed these providers for services to veterans, and, in turn, billed the VA for the services.
In 2017, the VA Office of Inspector General audited Health Net and found evidence suggesting the company had billed the VA for duplicate claims amounting to approximately $30 million and failed to reduce billings to the VA for approximately $1 million in provider rate savings, as contractually required, Talbert pointed out. A follow-up investigation confirmed the overstated billing, and Health Net ultimately repaid $93.7 milion in overpayments, as well as $3.6 million in interest.
“Providers must be held to the highest standard of care and must rigorously comply with their contractual obligations,” said Talbert. “This office is committed to assisting the VA and other agencies of the United States to ensure the integrity of important federal programs, such as those reimbursed by this settlement that will help our veterans.”
VA Inspector General Michael J. Missal agreed, adding, “The VA Office of Inspector General is strongly committed to promoting fiscal accountability throughout VA. This settlement will return funds to VA programs and services that directly benefit our nation’s veterans.”
Assistant U.S. Attorney Catherine J. Swann handled the matter for the United States.
Talbert’s announcement comes in the wake of a series of news reports in recent years past about delayed treatment for veterans that, in some cases, resulted in deaths, the issue becoming a political lightning rod on Capitol Hill, forcing changes in healthcare access for veterans, including the Choice and Accountability Act.
By contracting with a service contractor or provider outside the VA, the program allows veterans to see a private doctor for primary or mental health care if their VA wait is 20 days (28 for specialty care) or their drive to a VA facility is 30 minutes or more. Additionally, the VA can pay for emergency medical care at local emergency department for a veteran’s service-connected condition or if the care is related to a veteran’s service-connected condition.
However, after the coronavirus outbreak last year, the VA took the step of restricting veterans’ access to private doctors, citing the added risks of infection and limited capacity at private hospitals. With the increasing numbers of veterans who have received COVID-19 vaccines, it is unclear if that decision remains in effect.
There are 61 VA hospitals and clinics in California, including clinics in Fairfield (adjacent to David Grant Medical Center on Travis Air Force Base), Mare Island in Vallejo, Oakland, Chico, Redding, Yuba City, and Yreka, to name a few. Additionally, there are VA medical centers in Martinez, San Francisco, and Palo Alto, among others in California.
