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Report | Sept. 18, 2013

The Department of Defense and Veteran Affairs Health Care Joint Venture at Tripler Army Medical Center Needs More Management Oversight



Our audit objective was to determine whether the Master Sharing Agreement (MSA) and Joint Policies governing claims and reimbursement between Department of Veterans Affairs (VA) and DoD for health care services at Tripler Army Medical Center (TAMC) were operating effectively.


The MSA and Joint Policies were not effective to obtain timely reimbursement for health care services provided. Specifically, the MSA and Joint Policies did not comply with DoD Regulations, deliver an adequate authorization process, or provide an effective modification process to revise local policies. These conditions contributed to $26.2 million out of $73.2 million in medical services provided to Veterans Affairs Pacific Islands Health Care System beneficiaries from FY 2009 through FY 2012 not being reimbursed, $3.7 million in claims not billed in accordance with DoD regulations, and another $3.7 million in uncompensated care.

This occurred because DoD management did not provide adequate oversight governing this Joint Venture. As a result of the ineffective MSA and Joint Policies governing the interagency agreement, TAMC cannot ensure that the military treatment facility can meet the reimbursement requirement of Section 8111, Title 38, United States Code, “Sharing of Department of Veterans Affairs and Department of Defense Health Care Resources.” Furthermore, without a mutual solution between DoD and the Department of Veterans Affairs to address these longstanding problems, the burden of about $26.2 million in delinquent debt, $3.7 million in unbilled claims, and $3.7 million in uncompensated care will continue to grow. (See Appendix E for details on potential monetary benefits.).


Among other recommendations, we recommend TAMC request the required waiver from the Under Secretary of Defense (Comptroller) and elevate issues to U. S. Army Medical Command (MEDCOM); MEDCOM request DoD/VA Program Coordination Office to review the reimbursement policy; and Assistant Secretary of Defense (Health Affairs) require the DoD/VA Program Coordination Office present the issues cited to the appropriate levels within the Health Executive Council for resolution.

Management Comments

The Assistant Secretary of Defense (Health Affairs) comments were partially responsive to the one recommendation. The Chief of Staff, MEDCOM, responding on behalf of the Commander, MEDCOM, and Commander, TAMC, comments were responsive to 9 of 10 recommendations and partially responsive to 1 of 10 recommendations. We request that the Secretary of Defense (Health Affairs) and Chief of Staff, MEDCOM, provide revised comments to the final by October 18, 2013.

This report is a result of Project No. D2012-D000DA-0190.000.