VA Health Care: VA Has Not Sufficiently Explored Alternatives for Optimizing Third-Party Collections Page: 4 of 16
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most funds for veterans' medical care at the lowest cost, VA needs to
develop a business plan and detailed implementation approach that will
provide useful data for choosing the best alternative for optimizing net
revenues from third-party payments.
When veterans receive care from VA for non-service-connected conditions,
the law allows VA to bill the veterans' private health insurers and retain
these third-party collections to supplement its appropriations for health
care. Third-party insurers include individual and group insurance plans,
Medicare supplemental insurance plans,9 and self-insured employer plans.
In January 1997, VA proposed a 5-year plan to operate with a flat annual
appropriation of $17 billion per year through fiscal year 2002. As part of
this plan, VA anticipated that by the end of fiscal year 2002, it would obtain
10 percent of its funding from third-party collections and other alternative
revenue streams, such as veteran copayments, Medicare payments, and
proceeds from sharing agreements (where VA sells services to the
Department of Defense, private hospitals, and other providers). In fiscal
year 2000, VA acknowledged that it would not meet its 10-percent goal, in
part because the Congress did not authorize Medicare payments to VA for
health care provided to Medicare enrollees. For fiscal year 2002, VA
estimates that revenue from alternative sources would be about 4 percent
of its medical care funding, or $896 million.
VA's third-party revenue operations consists of five sequential processes.
(See table 1.)
9Medicare supplemental insurance is private insurance to cover expenses not covered by
Medicare, such as deductibles, copayments, coinsurance, and prescription drugs.
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United States. General Accounting Office. VA Health Care: VA Has Not Sufficiently Explored Alternatives for Optimizing Third-Party Collections, text, September 20, 2001; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc290048/m1/4/: accessed December 13, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.