Healthcare Inspection Alleged Mismanagement of the Fee Basis Program VA Connecticut Healthcare System, West Haven, Connecticut

The purpose of this inspection was to determine the validity of allegations regarding the mismanagement of the Fee Basis Program at the VA Connecticut Healthcare System (the system). We substantiated that the pre-authorization process for fee-based care was flawed. However, managers initiated new procedures to improve the process prior to the inspection. We did not substantiate that VA physicians self-referred VA patients through the affiliate hospital or benefited financially from fee basis claims paid to the affiliate hospital. We did not substantiate that the system inappropriately utilized the affiliate hospital as a sole source referral center. However, we concluded there was a lack of oversight of the Fee Basis Program and the absence of formal agreements contributed to the appearance of conflict of interest and may have resulted in the overpayments for care to the affiliate hospital. We recommended improved oversight of the program, an assessment of services paid through the program to determine if formal agreements should be considered, regular audits of fee basis claims, and enhanced physician training on VA regulations governing conflict of interest.