Report | Aug. 13, 2014

Delinquent Medical Service Accounts at Brooke ArmyMedical Center Need Additional Management Oversight

DODIG-2014-101

Objective

Our objective was to determine whether the Military Services and selected military medical treatment facilities were effectively managing medical service accounts that were more than 180 days delinquent by transferring the debt to the appropriate debt collection agency or actively pursuing collection. This is the first in a series of reports concerning medical service accounts (MSAs). This report provides the results of our review performed at U.S. Army Brooke Army Medical Center (BAMC). We reviewed the 25 highest dollar delinquent MSAs valued at $11.0 million.

Finding

BAMC Uniform Business Office (UBO) management did not effectively manage delinquent MSAs. As of May 29, 2013, BAMC UBO management had 15,106 outstanding MSAs, valued at $73.1 million. The accounts were more than 180 days delinquent but had not been transferred to the U.S. Treasury. BAMC UBO management did not transfer 24 of 25 accounts, valued at $10.4 million, to the U.S. Treasury for collection after the account was 180 days delinquent. Further, BAMC UBO management did not actively pursue collection for 20 of the delinquent MSAs, valued at $8.8 million. This occurred because, among other reasons, BAMC UBO management did not have a process in place to monitor and notify staff of MSAs needing follow-up.

As a result, BAMC UBO management missed opportunities to collect approximately $10.4 million in delinquent payments, and use the funds on other valid needs. Unless BAMC UBO management improves collection efforts and takes prompt and aggressive actions to collect the delinquent debt from the MSAs we reviewed and thousands of other delinquent MSAs, BAMC UBO will continue to incur rising delinquent balances for future MSAs. BAMC UBO has begun taking corrective actions such as transferring claims and contacting patients on some of the claims in our sample.

Recommendations

We recommend the Commander, BAMC, validate that the planned medical billing system will prioritize delinquent medical service accounts and alert the clerks as to which accounts require follow-up; the Chief of Staff, U.S. Army Medical Command, research additional means to increase collections at BAMC and other Army military medical treatment facilities; and the Assistant Secretary of Defense (Health Affairs) meet with Department of Health and Human Services to discuss reimbursement problems with military medical treatment facilities and Medicaid.

Management Comments

Comments from the Assistant Secretary of Defense (Health Affairs) and the Chief of Staff, U.S. Army Medical Command addressed all of the specifics of the recommendations. We request that the Chief of Staff, U.S. Army Medical Command provide additional comments to the potential monetary benefits in response to this report by September 12, 2014.

This report is a result of Project No. D2013-D000CL-0182.000.