Watchdog dings VA for poor management of rural health program

The Veterans Health Administration has not adequately managed a large chunk of funds associated with a program that provides patient services to vets in rural areas, according to a report from the department's inspector general.

The IG concluded the Office of Rural Health lacked certainty that it effectively allocated $273.3 million, or 51 percent, of $533 million in funding it received during fiscal 2009 and fiscal 2010. "Specifically, we found ORH did not adequately manage the use of fee funds and the proposal selection process," the report said.

The watchdog blamed a lack of internal financial controls and performance measures as well as ineffective communication and collaboration among department officials for the problems. The report also said that, until recently, ORH "did not have the management staff in place that had the knowledge, skills and experience required to lead and manage a newly established organization." The department has hired staff with more experience in financial management and budgeting, and is trying to rectify that weakness, the IG said.

As of 2009, ORH estimated there were 3.3 million enrolled vets living in rural areas, approximately 41 percent of all veteran enrollees. About 67 percent of those enrolled vets used VHA services. Men and women from rural areas make up a disproportionate share of service members overall and account for 32 percent of Iraq war enrolled veterans, according to the report.

ORH, which is part of VHA, approved millions of dollars for programs and services that VHA officials expressed concerns over due to cost or lack of proper procedure, the report said. For example, a VHA official reviewed a $2.8 million proposal to create an electronic intensive care unit and virtual response team that would use videoconferencing between medical centers and staff at intensive care units in rural facilities. The official had expressed reservations that the program sponsors did not adequately document the need for the service, the number of vets it would benefit, or the patient safety and regulatory issues involved. Nevertheless, ORH approved and funded the project without addressing those questions.

The IG recommended OHR reassess the feasibility and usefulness of its fiscal 2012 funded initiatives, in addition to putting in place financial controls, a project monitoring system and performance measures to gauge the effectiveness of health care services for vets. The department's undersecretary for health agreed with the recommendations and said plans to improve financial management of the program would be implemented by October.