Ernst Statement on VA OIG Findings on Health Net

WASHINGTON, D.C. –   Last week, The Department of Veterans Affairs’ (VA) Office of Inspector General (OIG) issued a report on whether the Patient-Centered Community Care (PC3) networks – known as Health Net in Iowa –were developed and awarded accurately. Health Net is the VA contract recipient that covers Iowa and many of its neighboring states; unfortunately the service to veterans is flawed and inadequate, while the PC3’s gain huge financial benefits. The OIG found that the $9.4 billion of contracts the VA gave to the PC3’s were found to have, “weaknesses in the planning, evaluation, and award of the PC3 contracts.” Upon reviewing the report, Senator Joni Ernst (R-IA), issued the following statement:

“Health Net was supposed to help veterans seeking care outside of the VA get the appointments with community healthcare providers.  Instead, veterans faced a complicated bureaucratic system many described as more difficult than dealing directly with the VA,” said Senator Ernst.

“While Health Net has repeatedly put in place measures to improve their poor performance, they have failed to provide adequate services for our nation’s veterans. This report confirms that the process through which the VA chose to award Health Net billions of dollars lacks accountability, adequate oversight and sufficient planning. This is unacceptable. Health Net, and the VA must do better for our veterans.” 

Findings in the OIG report:

• OIG found that the $9.4 billion of contracts the VA gave to the PC3’s were found to have, “weaknesses in the planning, evaluation, and award of the PC3 contracts.”

• PC3 contracts were not developed or awarded in accordance with acquisition regulations and VA policy (which are intended to ensure services acquired are based on need and at fair and reasonable prices).

• VA contracting officials solicited proposals from vendors without clearly articulating VA’s requirements, setting the contracts up to fail.

• Contract costs were negotiated at higher rates than those originally proposed.  Only the VA would have the total incompetency to negotiate the price of an offer up – ending with a more expensive contract.  The OIG noted that the acquisition team increased potential costs for the Health Net contract by over $16.8 million, all of which could have easily been prevented had pricing documents been reviewed.

• OIG found that there was no senior executive at the VA accountable for this contracting process, therefore the process lacked accountability.

• The report was so unfavorable that the OIG recommendations are broad generalities, recommending improvements in oversight, accountability, and ensuring sufficient planning on complex acquisitions.

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