Summary: For more than a decade, the Department of Veterans Affairs (VA) has been authorized to recover from private health insurers some of its expenses in providing health care to veterans with no service-connected disabilities. VA's recovery authority was expanded in 1990 to include care provided to veterans with service-connected disabilities, as long as that care was for treatment of conditions unrelated to the veterans' service-connected disabilities. In fiscal year 1996, VA sought to recover $1.6 billion but obtained only 31 percent of the billed amount--or $495 million--a five-percent decline from fiscal year 1995 recoveries. In its fiscal year 1998 budget submission, however, VA projects that it will be able to recover $826 million from private health insurers by fiscal year 2002. This is important because VA sought and was recently authorized to keep the money it recovers and to use it to supplement future appropriations. This report (1) identifies factors that limit VA's ability to recover more of its billed charges, (2) evaluates VA's ability to achieve its revenue targets by identifying factors that could decrease future recoveries and by assessing the potential for VA initiatives to boost medical care cost recoveries, and (3) evaluates the way that VA applies insurance payments to veterans' copayment liability for veterans in the discretionary care category.
