TREA: The Enlisted Association Blog

TREA: The Enlisted Association's Washington Update

• • Sources: Administration Looking to Merge TRICARE and VA Choice Programs
• • VA Choice Contractors Accused of Skimming Tens of Millions of Dollars
• • Investigation Finds Systemic Problems at Texas VA campus
• • The Department of Veterans' Affairs and the CFPB Issue Warning Order to Holders of VA Home Loans

TREA: The Enlisted Association's Washington Update

Sources: Administration Looking to Merge TRICARE and VA Choice Programs

Last week word got out that the White House has been discussing a plan to merge aspects of the Department of Veterans Affairs' Veterans Health Administration (VHA) and the military health systems.

The plan, which seems to be in preliminary stages of discussion, has not been shared with Congress or veteran service organizations. Needless to say, VSOs demand to see more details of what is sure to be an incredibly complicated plan. Clearly, the idea is an effort to trim billions in federal medical bills. The devil is always in the details.

VA Secretary David Shulkin insists there is no underhanded effort to sneak through major reforms, and that the work thus far amounts to brainstorming about ways to make veterans care more efficient.

The Associated Press, which broke news of the plan Friday, said that it that would combine aspects of the Veterans Health Administration and Tricare, the military's health care program for troops, families and retirees.

White House officials have discussed establishing a single purchased-care contract for the two different systems, sharing some military and VA facilities and linking the hiring of medical professionals in both systems, with potential savings of up to $2 billion annually, largely through cuts in the federal workforce. Actual program changes would not start before 2023.

As it stands now, the plan would intermix the medical needs of two different patient pools. The Tricare system currently serves about 9.4 million beneficiaries, including the primary health care needs for all active-duty troops and their families.

The Department of Veterans Affairs system has roughly 9 million patients, too, but is largely focused on an older population dealing with service-connected illnesses. VA officials in recent months have talked about moving away from some primary care responsibilities in favor of increasing funds for more specialized services.

Shulkin said any such decisions are years away. Memos on the topic show several meetings among White House staffers on the issue, and plans to make the idea a major topic of the December VA/DoD Health Executive Committee meeting.

Obviously there is much, much more to come on this issue and TREA: The Enlisted Association will keep you informed.

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VA Choice Contractors Accused of Skimming Tens of Millions of Dollars

The Arizona Republic reported last week that  Department of Veterans Affairs contractors TriWest Healthcare Alliance and Health Net Federal Services are under investigation for over-billing the United States government by tens of millions of dollars.

Both companies have multi-billion dollar contracts with the VA to facilitate private healthcare services for military families and veterans as part of the VA's new Veterans Choice program, which was created in 2014 after Congress passed the Veterans Access, Choice and Accountability Act.
The bill allocated $10 billion to give veterans a private medical option, but has cost taxpayers upward of $12 billion to date, according to The Republic. An audit launched by the VA Office of Inspector General (IG) after anonymous comments on the employer review website glassdoor.com found that some of that money has vanished into corporate coffers.  

The IG recently reported to Congress that the two companies have collected at least $89 million more than what they were supposed to. At least must be emphasized, as the audit is still ongoing (the inspector general's office says it should be completed by the end of the year). TriWest is also being investigated by a federal grand jury for possible wire fraud and misuse of government funds.

The two companies were given only 90 days to set up the program, and it was plagued by problems from the start. According to NPR, "within three months, TriWest returned referral authorizations of 172 out of 192 gastroenterology cases, and 57 of those patients had to be seen immediately because they had symptoms of significant ailments, such as cancer."

It is inarguable that the short amount of time Congress gave these companies to set up the program contributed to the problem, as coding errors and "double-billing" seem to be the biggest problem identified. But that is not all that the IG found.

In September, VA Inspector General Michael Missal issued a memorandum that listed four major "errors" that had resulted in excess payments to TriWest and Health Net. These were:
 
Duplicate errors: billing the VA more than once for medical services.
Health insurance errors: billing the VA for medical services already covered by private health insurance.

Pass-through errors: billing the VA for more money than what the companies paid medical providers for their services.

Rate errors: charging medical providers different rates than what were set by Medicare or contracts.

How much all of this cost taxpayers is unknown. Missal stated in his memorandum that duplicate payments alone racked up $89.7 million in overpayments to the two companies. He has ordered Health Net to reimburse the VA $50.8 million, while TriWest owes the remaining $38.9 million. "Our audit staff has attributed these errors to the lack of an appropriate payments process for Choice claims and an inefficient internal control system," Missal wrote. 
 
For more information, go to: https://www.azcentral.com/story/news/local/arizona-investigations/2017/11/13/va-inspectors-question-millions-dollars-paid-triwest-veterans-healthcare-contract/737341001/

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Investigation Finds Systemic Problems at Texas VA campus

Veterans in the Vocational Training, Rehabilitation and Employment (VRE) program at the Department of Veterans Affairs' Temple, Texas campus had complained for roughly a decade about being assigned to the motor pool.

The complaints, made by veterans undergoing drug and alcohol rehabilitation as they tried to get their lives back on track, claimed that in the motor pool they were subjected to verbal abuse and tirades. Additionally, VA equipment like lawnmowers and expensive tools regularly disappeared, and sometimes veterans were told to take equipment off of the VA campus to the homes of high-ranking VA officials where they said they were ordered to do work.

As the complaints piled up, administrators took no action until this past spring, when Central Texas VA Director Christopher Sandles said that he initiated an investigation after hearing concerns from employees at the motor pool during focus groups he convened when the VA appointed him to the top position in the region, which includes Austin, nine months ago.

This is one of the reforms that grew out of the 2014 Phoenix VAMC wait list scandal - that administrators simply needed to listen to the complaints of the veterans that they were supposed to be serving. Hopefully problems are resolved this way in the future, instead of waiting for Inspector General report, or worse, local police or FBI investigation finds out about alleged wrongdoing.

Veterans had lodged nearly 50 grievances over a decade-long time period, finally prompting the Central Texas VA to launch an internal investigation into the motor pool. In August, the three-person administrative board confirmed much of what the veterans had long alleged - and more.
The American-Statesman obtained a preliminary, unsigned version of the board's report. It found that:

"Some VA supervisors had stolen equipment from the agency and benefited personally from the labor of veterans in the vocational training program. Current and former veterans in the program testified that they had been told to build fences, repair sprinkler systems and perform other landscaping work at the homes of certain supervisors and their family members.

The veterans also testified that while they were being paid by the government, they were forced to repair personal vehicles and do other odd jobs for supervisors.

And in a finding that has sparked a wider VA inquiry, the investigators said they had uncovered a complex scheme at the motor pool to secretly profit from VA purchase orders. The board concluded employees at the motor pool had funneled business to a small Killeen firm that investigators said made at least $400,000 by padding purchases with 30 percent surcharges. In all, the report found, more than $1.3 million was "funneled through" the business, Whitetail Industrial Parts and Service, in recent years."
 
 For more details, go to:
http://www.mystatesman.com/news/local-military/investigation-finds-corruption-intimidation-temple-campus/K1PQFY0lDPgPnKfOZQmgPM/
 

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The Department of Veterans' Affairs and the CFPB Issue Warning Order to Holders of VA Home Loans

The VA Interest Rate Reduction Refinance Loan (IRRRL) lowers your interest rate by refinancing your existing VA home loan. During FY17, VA guaranteed over 190,000 home loans under this program. In FY 2017, there were nearly 1,500 lenders that participate in the VA Home Loan program.
 
Regrettably, some lenders have taken advantage of Servicemembers and Veterans with VA home loans in the past. They have sent unsolicited offers to refinance VA mortgages with misleading advertising. If you have a VA home loan, there is a good chance you have already come into contact with unsolicited offers which appear official and may sound too good to be true.
 
The VA and the Consumer Financial Protection Bureau (CFPB) have issued their first Warning Order to Servicemembers and Veterans who currently have a VA home loan, as we have found that some of you are being targeted with misleading advertising.
 
Understand that certain advertised benefits, such as no out-of-pocket closing costs, skipped mortgage payments, and escrow refunds, are costs that are generally added to your loan and increase the overall principal balance. These are all red flags that may indicate that the loan is less likely to benefit you. Before you proceed with a VA mortgage refinance, be sure to consider the long-term and short-term benefits and consequences of refinancing your loan.
 
If you are contacted to refinance your VA mortgage, carefully consider your options and ask questions: 

• Does a lower interest rate extend the term (i.e., 30-year fixed rate to another 30-year fixed rate)?
• What are the financial implications when choosing between a fixed term and an adjustable rate mortgage loan?
• What is your total payback for the new loan vs. the original loan?
• Do offers of skipped payments or cash back ultimately get added to my loan amount?

If you have a problem with a VA mortgage refinance or other mortgage issues, you can submit a complaint to the CFPB online or by calling (855) 411-CFPB (2372). Please also see VA/CFPB's blog on this topic at: https://www.consumerfinance.gov/about-us/blog/cfpb-and-va-warno-va-refinancing-offers-sound-too-good-be-true/.
 
We are working hard, along with other government agencies, to identify, stop, and prevent illegal and misleading advertising related to VA mortgages and refinancing. If you have questions that aren't being answered by your lender, please get a second opinion from another lender, or call a VA loan specialist who is available to assist you from 8 a.m. to 6 p.m. ET, Monday through Friday at (877) 827-3702.