GAO rips VA over vague criteria for doctor bonuses

The Government Accountability Office has criticized the Veterans Affairs Department for giving bonuses to physicians when its medical centers and clinics haven’t clearly defined what the extra pay is meant for.

In at least five cases in 2011, the vague policies allowed physicians to receive bonuses between $7,500 and $10,500 even though they had been disciplined for errors ranging from leaving residents unsupervised during surgery to working without a valid license.

At one hospital, a doctor refused to see patients in the emergency room because he believed they were improperly triaged, resulting in wait times up to six hours and prompting nine patients to leave without being seen.

The physician received a performance bonus of $7,500 — half the maximum allowed — despite the incident and meeting only one of 13 defined performance goals that year.

GAO said VA must clarify performance pay policies to make sure they are clearly linked to “outcomes and quality.”

“VA officials responsible for writing the policy told us that the purpose of performance pay is to improve health care outcomes quality, but this is not specified,” GAO analyst Debra Draper wrote.

According to the report, about 80 percent of the department’s nearly 22,500 providers received performance pay in fiscal 2011 and about 4,000 were given performance awards — lump-sum payments that are based on annual performance review ratings.

In fiscal 2011, the Veterans Health Administration paid nearly $150 million to doctors in performance pay, an average of more than $8,000 per provider. It gave about $10 million in performance awards, an average of $2,587 per person.

The House Veterans’ Affairs Committee has sharply criticized VA for awarding large performance bonuses to hospital administrators whose facilities have a history of mismanagement or negligence resulting in patient illness and, in some cases, death.

The GAO report, released Aug. 23, provided members with more ammunition for the argument that VA’s bonus and performance pay system operates independently of achievement.

“I am very disappointed in these findings,” said Rep. Michael Michaud of Maine, the committee’s highest ranking Democrat. “When I requested GAO conduct this evaluation, it was due to concerns ... that health care providers were being given performance pay and awards when they did not deserve it. This report appears to confirm that perception.”

“Secretary [Eric] Shinseki owes it to America’s veterans and American taxpayers to conduct a top-to-bottom review of VA’s performance appraisal system,” said committee chairman Rep. Jeff Miller, R-Fla.

In its response to the report, VA agreed with the GAO’s recommendations, with one sticking point: VA officials noted that, of the cited cases, only one was a “performance” — an instance in which a radiologist failed to read mammograms accurately — while the rest were “conduct” problems under VA rules.

As if that makes a difference, according to Michaud.

“It is clear to me that, too often, those who do not perform above and beyond are reaping rewards they do not deserve,” he said.

VA spokeswoman Victoria Dillon said Aug. 29 that VA agrees with GAO assessments but added that such pays help recruit and retain skilled employees.

“VA remains committed to effective oversight to ensure that performance pay and award systems are based on the achievement of clear goals and objectives that contribute to VA’s mission to serve veterans,” Dillon said.

She added that VA has taken steps to improve the system and better monitor it.

In 2012, VA eliminated retention bonuses for nearly 6,700 employees after a VA inspector general audit found that most of the distributed bonuses lacked justification.