Two years ago, retired veteran Danny C. Varnadore noticed VA was charging his private insurance company for treating a spine problem he acquired during his Navy career. He called the VA medical center in St. Petersburg, Fla., to point out the billing error and was rebuffed.“I told the guy on the phone that my insurance had been charged several times for service-connected treatment and that I didn’t think it was right,” says Varnadore, who has a 70-percent VA disability rating. “His response was, ‘We do it because we can.’ I thought that was rather rude.”Not only was it rude, it was wrong. VA is not allowed to bill either veterans or their insurance companies for service-connected medical care. But thousands of veterans are improperly charged for their VA treatment for a variety of reasons, including an error-prone billing system and a lack of management oversight, according to testimony by The American Legion and other veterans service organizations before the House Veterans Affairs’ Health Subcommittee last fall. The problem goes well beyond erroneous “third-party billing” – as charges to Medicare, TRICARE and private insurance are called. VA also is directly billing thousands of veterans for their service-connected health care, even though it is obligated to provide such treatment at no cost. At the same time, veterans with non-service-connected medical issues often receive multiple bills for a single visit to VA and, in some cases, are charged for care they never receive. And veterans often find a portion of their disability check withheld if they don’t pay the inappropriate bill, veterans service organization representatives told Congress.“The American Legion is deeply concerned about this critical situation,” Denise Williams, assistant director of health policy for The American Legion’s Veterans Affairs & Rehabilitation Division, told the subcommittee. She called on Congress to join the Legion in investigating and resolving the errors.Veterans who try to correct the billing problems sometimes find themselves saddled with long and frustrating fights, said Fred Cowell of Paralyzed Veterans of America. He says it can take six to eight months to get a single erroneous bill corrected – if it gets corrected at all.Consider the plight of one veteran injured in Iraq. VA charged him for treating a pressure ulcer on his buttocks, despite his 100-percent disability rating and the clear connection between spinal injuries and pressure ulcers. The veteran’s VA doctor took up the erroneous charges with VA’s billing office; he was told the bill was justified because the veteran’s VA disability rating didn’t include the pressure ulcer. The doctor also was told that the veteran would have to file a new disability claim with VA if he wanted the pressure ulcer treatment to be covered.“If VA thinks it has a problem with the claims backlog now, we can only imagine what the backlog will look like if all veterans experiencing this problem go back to the Veterans Benefits Administration for consideration of something that will almost certainly be granted months later,” Cowell said. Meanwhile, front-line health-care workers are helping to resolve billing errors that could be made while treating patients. Such episodes are not anomalies; inappropriate billing is a widespread problem, the veterans groups testified. Veterans service organizations have told congressional committees they are concerned that billing errors will become worse as VA increasingly relies on third-party billing to pay a portion of its costs. “VA is not supposed to be a for-profit health provider, but is perceived to be such by our veterans,” said Adrian Atizado of Disabled American Veterans. And those who have served worry that financial pressures at local VA facilities “may encourage or contribute to inappropriate billing.”Missed Millions. VA has other billing problems that are simultaneously costing it – and taxpayers – a considerable sum. VA is failing to collect millions of dollars from insurance companies that it is legitimately owed, according to an official from the Government Accountability Office who testified during the same congressional hearing in October. VA is also losing money because of lengthy billing delays.A GAO analysis of billing practices at 18 VA medical centers “found excessive average days to bill, coding and billing errors, and a lack of management oversight, which raised questions about why $1.7 billion was not billed to third-party insurers at the 18 locations we reviewed,” Kay L. Daly, GAO director of financial management and assurance, told Congress. “It is important that coding for medical services is accurate and timely because insurers will not accept improperly coded bills.” In addition, many insurers are not required to pay VA if they don’t receive accurate bills in a timely fashion – usually within six months to a year of treatment.Another GAO analysis found that, throughout VA, the agency failed to make initial follow-up calls on outstanding bills for medical treatment 69 percent of the time, which contributes to uncollected reimbursement for medical care. That startling number drew sharp attention from Rep. Michael Michaud, D-Maine, chairman of the subcommittee. “I’d like to see the error rate at the local level,” he said. “I’m concerned with how much weight you are putting on the problem.”Problems in Hand. VA acknowledges it has plans to recover more money from insurance companies and patients alike for health care that is not connected to military service. But the agency says it is working to make sure such collections are done accurately. VA has taken several steps over the past five years to dramatically reduce its billing errors. This includes hiring more qualified billing coders, comprehensive training, creating a detailed employee handbook with guidelines on billing issues, as well as using better computer systems. “VA has a number of mechanisms that have been put in place to ensure veterans and their third-party health insurers are charged appropriately,” Baker said. At the same time, VA believes some veterans are confused about the types of medical care covered by their benefits. And when they aren’t, VA staff are required to make sure that insurance companies are billed. VA officials are committed to getting it right.“Should a veteran receive a bill that appears to be in error, VA encourages the veteran to contact the local medical center revenue staff, who will review the bill with the veteran and help to reconcile the issue,” Baker said.Danny Varnadore is skeptical, after the response he received at the St. Petersburg VA Medical Center. “There’s probably a lot more of it going on than people know,” he said. “And once the government starts to do things, it’s hard to get them to stop.” Ken Olsen is a freelance writer and frequent contributor to The American Legion Magazine.