Management Advisory: Summary of Reports on the DoD’s Healthcare Cost Recovery Programs and the Defense Health Agency’s Actions to Address Recommendations and Aged Accounts Receivable (Report No. DODIG-2026-049)

What We Did:

On December 14, 2023, the DoD OIG announced DoD OIG Project No. D2024 D000AW 0034.000, “Review of Selected DoD Transactions to Test Management Controls and Identify Fraud, Waste, and Abuse Within DoD Programs.” The announcement notified DoD Components that the DoD OIG would periodically review DoD transactions, such as healthcare payments, to identify transactions that had indicators of fraud, waste, or abuse.

The DoD OIG conducted 11 audits related to the DoD’s healthcare cost recovery programs since 2013, including Medical Service Accounts (MSAs), Third Party Collections (TPC), and sharing agreements with other Federal agencies, such as the VA. The DoD OIG reviewed the healthcare cost recovery programs at various MTFs and identified at least $226.5 million owed to the DoD by non-beneficiaries, Other Health Insurance (OHI) providers (for example, insurance companies outside of TRICARE), and the VA. The DoD OIG made 175 recommendations to DoD, DHA, and MTF leadership to improve the healthcare cost recovery programs, including recommendations to pursue and remediate the hundreds of millions of dollars of delinquent medical debt. Additionally, during the FY 2020 through FY 2024 financial statement audits of the Defense Health Program (DHP), independent auditors identified a recurring material weakness related to the accounting and reporting of medical services provided and made several recommendations.