GAO knocks lax rules for VA provider performance pay

The Department of Veterans Affairs is awarding higher performance-based pay to the vast majority of its nearly 22,500 providers, even those whose poor performance resulted in disciplinary action, a General Accountability Office audit found.

In fiscal 2011, about 80 percent of providers received performance pay totalling $150 million, according to GAO. About 20 percent received $10 million-plus in performance awards, or bonuses, averaging $2,587.

The VA's 152 medical centers and 21 care networks have discretion in setting goals providers must meet to receive performance pay, but the agency does not provide overall guidance to be used in setting those goals, according to highlights of the report. It doesn't even specify performance pay is intended to improve quality and outcomes, GAO noted.

During visits to VA medical centers in Atlanta, Seattle, Dallas and Togus, Maine, auditors found every eligible provider received performance pay, including five who had action taken against them that year because of poor clinical performance. Among the problems: practicing without a license, leaving residents unsupervised during surgery, and failure to competently read imagery including mammograms.

Auditors also found officials at the four medical centers had different ideas about appropriate goals for performance pay, according to the report. In the case of a doctor practicing on an expired license, he received performance pay because the center's policy didn't specify physicians must hold active licenses to receive the extra money.

GAO knocked VA policy for being unclear on how to document decision-making for performance pay, including whether subpar performance should lead to reducing or denying performance pay.

Oversight of performance pay and awards by the Veterans Health Administration (VHA) is "inadequate" to ensure compliance, GAO said. There's no standard list of performance pay elements to review, and reviewers can't require medical centers to resolve compliance problems, according to the report. Indeed, two of the four medical centers failed to correct all the problems identified in VHA reviews, sometimes for consecutive years.

The GAO recommended the VA clarify its policy to specify the purpose of performance pay and the documentation required to award it. It also recommended the VHA review performance-pay goals to ensure they are consistent with policy, and improve its oversight. The VA generally concurred with the findings, GAO said.

House Committee on Veterans' Affairs Chairman Rep. Jeff Miller (R-Fla.), defended the audit's findings, The Washington Post reported.

"This is irrefutable proof of what we've known for quite some time: That in many cases, VA's performance pay and bonus system has absolutely nothing to do with performance," Miller said, according to the Post, calling for a "top-to-bottom review" of the VA's performance appraisal system.

For more information:
- download the audit (.pdf)
- read the highlights
- here's the Washington Post article

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