“A series of legislative changes have allowed VA [Veterans Affairs] to outsource more healthcare services for veterans to private-sector community providers. According to internal VA data, between FYs 2021 and 2023, referrals to community care have increased over 37 percent, with FY 2024 (as of May) outpacing FY 2023 by more than 16 percent.
“As veterans obtain more services from the community care program, VHA [Veterans Health Administration] has struggled to oversee the performance of their third-party administrators—the contracted entities that manage the network of community providers—and ensure they meet their contractual requirements. Recent VA OIG [Office of the Inspector General] reports have found that VA medical facilities have failed at times to get these administrators to make certain that local area providers are accessible to eligible veterans who seek or require care outside the facility.
“Apart from community care, the VA OIG has also found that staffing shortages at VA medical facilities have not only degraded veterans’ access to care—particularly mental health care—but also the quality of care provided. In the VA OIG’s most recent occupational staffing report, VHA facilities self-reported for FY 2024 a total of 2,959 severe occupational staffing shortages. Eighty-six percent of facilities reported severe occupational staffing shortages for medical officers, and 82 percent of facilities reported severe shortages for nurses. Psychology was the most frequently reported severe clinical occupational staffing shortage, and this shortage is particularly meaningful in the delivery of mental health care.
“However, while new demands and challenges increase the urgency for VA to address long-standing staffing shortages, it must balance the need to conduct proper background investigations with the quick onboarding of staff. Having the right people in the right positions committed to doing the right thing is essential to building and maintaining a culture of accountability. The OIG has published reports on deficiencies in the personnel suitability program since 2017. Recent oversight reports have continued to identify such problems. One report identified weaknesses in governing background checks for contracted employees, which increases the risks to the health and well-being of veterans and VA employees, as well as the efficiency and integrity of VA services.”
Source: US Department of Veterans Affairs. FY 2024 Agency Financial Report. Nov. 15, 2024.
“From FY 2022 to FY 2023, community care expenditures grew by 22 percent, from $25.9 billion to $31.6 billion. Given the size of the program, it is critical that VA pay only for authorized care. A recent OIG report found, however, that VA has paid for unauthorized dental care through the community care program. For community care network invoices, the contracted third-party administrators’ adjudication systems process did not identify unauthorized procedures because community care network contract language contradicted VHA referral guidance for community dental claims.
“Also, the OIG has repeatedly found that, when VA acquires day-to-day medical goods, it does not always use the required strategically sourced contracts that can help VA save taxpayer funds. For example, VHA requires its medical facilities to use the Medical/Surgical Prime Vendor program’s distribution contracts for cost-effective ordering and distribution of day-to-day healthcare supplies. However, medical facilities did not always purchase through the program because items were often unavailable, and staff often did not check the program before ordering from the open market. Additionally, the OIG found that VHA did not ensure dialysis services were purchased through the community care network contracts; instead, dialysis was purchased through nationwide dialysis services contracts, which charged higher per treatment rates.
“Unreliable data has frequently prevented the department from making informed decisions on how to best manage program and medical funds. Several reports have identified discrepancies between what was reported in medical facilities’ inventory systems and what was physically present. Errors could diminish the healthcare system’s ability to effectively budget for the purchase of supplies to meet patient care needs.”
Source: US Department of Veterans Affairs. FY 2024 Agency Financial Report. Nov. 15, 2024.
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Page last updated March 21, 2025 by Doug McVay, Editor.