Understanding VA Community Care Improper Payments for Veterans

VA Community Care Improper Payments: What Veterans Need to Know

VA Community Care improper payments—payments for unauthorized or incorrectly billed care—dropped from $7.5 billion in 2020 to $608 million in 2025, a 98% reduction, according to data provided to the Government Accountability Office . This dramatic improvement reflects the VA’s aggressive corrective actions since the 2018 MISSION Act expanded community care to nearly 3 million veterans . However, the GAO warns the program remains vulnerable to fraud due to the lack of a comprehensive fraud risk assessment .

Quick Facts

What Are VA Community Care Improper Payments?

Improper payments are payments that should not have been made, were made in the incorrect amount, or were not supported by sufficient documentation . For the VA Community Care program, improper payments occur when the VA reimburses contractors that manage community care for outdated claims, incorrect reimbursement rates or payment amounts, or bills that exceed authorized care .

Common Causes of Improper Payments

According to PaymentAccuracy.gov, the VA Community Care program’s improper payments in FY2024 ($416.63 million) resulted primarily from :

• Paying for claims not received within the required timeframe

• Services lacking proper authorization

• Payment amounts that did not align with the contracted rate

Technically Improper Payments

Some “improper payments” are considered technically improper—they were paid to the right recipient for the correct amount but failed to meet all regulatory or statutory requirements. In FY2022, this included $311 million in payments where authorizations exceeded the $10,000 threshold in VA Acquisition Regulations .

Unknown Payments

In some cases, the VA lacks sufficient documentation to determine whether a payment was proper or not. In FY2022, $280.57 million in payments fell into this category due to missing documentation containing key information such as final pricing methodology .

The VA’s Progress: From $7.5 Billion to $608 Million

The Improvement Trend

The VA has reported consistent year-over-year reductions in improper payments <span class=””>:

How VA Achieved These Reductions

VA officials told the GAO they were able to reduce improper payments in Community Care because they addressed “broader system and policy issues,” such as payment processing errors and eligibility problems that followed the development of the nationwide program established in 2018 by the MISSION Act .

Key actions included :

• Root cause analysis to identify why improper payments were occurring

• Corrective action plans tailored to address specific root causes

• System enhancements to automate authorization review and decrease human error

• Improved payment processing systems for claims validation

The program’s success has been recognized as “its third consecutive and largest year of reductions” in FY2021 .

Why Improper Payments Matter for Veterans

Impact on Program Sustainability

The Community Care program has grown rapidly, from $9.5 billion in outlays in 2020 to $25 billion in 2025, serving approximately 3 million veterans . Improper payments drain resources that could otherwise be used for veteran care. The VA has reported a $12 billion budget shortfall for the Veterans Health Administration, and community care is part of that shortfall .

How Improper Payments Affect Veterans

While improper payments generally do not directly impact individual veterans’ care, they can indirectly affect the program’s long-term viability:

• Budget pressures may affect program funding

• Provider relationships may be strained if billing issues persist

• Program integrity may be questioned, leading to increased oversight and potential restrictions

What Veterans Should Know

• You are not responsible for improper payments<span class=””> made by providers

• You will not be billed for unauthorized services provided to you

• You may help by reviewing Explanation of Benefits statements for accuracy and reporting discrepancies to the VA

Fraud Risks and Concerns

GAO’s Fraud Risk Assessment Finding

While the VA has made significant progress reducing improper payments, the GAO found that the department has not conducted a comprehensive fraud risk assessment for the Community Care program .

“While VA has taken steps to identify and assess fraud risks, these efforts do not meet the key elements of a fraud risk assessment and have not resulted in a comprehensive fraud risk assessment for the program, leaving it vulnerable to fraud,” the GAO report stated .

Examples of Documented Fraud

The GAO documented specific instances of fraud in the Community Care program :

• February 2026: A home health care company submitted fraudulent claims for community care for $100,000 in services that were never provided 

• Provider settlement: A provider agreed to pay $3.7 million to resolve charges that it fraudulently billed the VA for services that were not medically necessary 

The Program Integrity Tool (PIT) Issues

The House Committee on Veterans’ Affairs has raised concerns about VA’s IT systems used to prevent fraud, waste, and abuse. The Program Integrity Tool (PIT)—which consolidates all community care claims payment data—experienced technical defects beginning in February 2023 that forced VA to shut it down .

Impact of PIT Issues:

• $665 million in revenue was not collected (mostly from insurance companies)

• Millions of dollars of fraud, waste, and abuse went undetected

• VA struggled to get PIT working again until July 2024 

Response: Rep. Matt Rosendale, Chairman of the House Subcommittee on Technology Modernization, stated: “VA IT system failures are no excuse to waste taxpayers’ money” .

The FRAUD Act of 2025

On October 21, 2025, Representative Barrett introduced the “Forcing Real Accountability for Unlawful Distributions Act of 2025” (FRAUD Act of 2025), H.R. 3483 . The bill would require the VA to use an information technology system to detect fraud, waste, and abuse regarding claims for payment submitted under the Veterans Community Care Program .

Key provisions:

• Continuous monitoring of claims to detect patterns that may indicate fraud, waste, or abuse

• Analysis of historical and real-time claims data to identify and predict potential fraudulent claims

• Post-payment analysis for overuse of services

• Machine learning to identify patterns of fraudulent claims

Specific Areas of Vulnerability

Unauthorized Dental Procedures

A VA Office of Inspector General audit found that between FY2022 and FY2025, VA will improperly pay $325.5 million for 847,800 unauthorized dental procedures performed by community dentists .

Breakdown:

• $139.1 million already paid in FY2022 and FY2023

• $186.4 million projected for FY2024 and FY2025 if not corrected 

Categories of unauthorized procedures:

• Major changes to veterans’ treatment plans without authorization

• Minor changes exceeding VHA’s maximum allowed amount during a rolling 12-month period

• Referrals that did not specify authorized dental procedure codes 

VA OIG Recommendations (all implemented by June 2026): 

1. Ensure community dentists are notified of preauthorization requirements

2. Conduct expanded postpayment reviews to identify and recover payments

3. Monitor VA dentists to include required dental procedure codes on referrals

4. Clarify third-party administrator contract language for claims adjudication

5. Enable automated payment system to deny payment for unauthorized procedures

Home and Community-Based Services Overpayments

The VA’s Financial Integrity Resource Management (FIRM) Audit Services identified overbilling issues in community-based care services, stemming from misalignment between VA-approved service hours and the third-party administrator payment adjudication system .

Problem: When VA approved 4 hours of care per week, agencies billed and received payment for numerous ranges up to 20 hours per week as allowed by Standard Episode of Care ranges .

Results:

• $88,481.17 in overbilled claims identified between FY2024-2025

• $46,793.90 recouped 

Veteran involvement:<span class=””> Veteran families phoned to report that third-party administrator explanation of benefits outlined payment amounts far above what the vendor was providing. Review of those claims proved their report was accurate .

Contract Oversight Challenges

GAO’s Findings on Contract Oversight (2024)

In an August 2024 report, the GAO found that the VA’s Office of Integrated Veteran Care (IVC) had not developed a clear and complete set of documentation to guide contract oversight .

Specific issues:

• Desk procedures were limited and incomplete

• Program manager positions were eliminated without assessing whether oversight responsibilities were fulfilled

• No formal process for documenting lessons learned for future contracts 

Status of recommendations:

What the GAO Recommends

The GAO has made the following key recommendations for the VA Community Care program :

Primary Recommendation: Conduct a comprehensive fraud risk assessment of the Community Care program that aligns with leading practices in the Fraud Risk Framework .

VA’s Response: VA concurred with the recommendation and stated the department would establish oversight during its ongoing reorganization of the Veterans Health Administration, with the effort to be completed by March 2028 .

What Veterans Should Do

As a Veteran Using Community Care

1. Review your Explanation of Benefits (EOB) statements for accuracy

2. Report discrepancies to the VA if you notice billing for services you did not receive

3. Verify authorizations for community care procedures with your VA care team

4. Keep records of all community care appointments and authorizations

If You Suspect Fraud

• Contact the VA Office of Inspector General Hotline at 1-800-488-8244

• Report to the VA Fraud, Waste, and Abuse Hotline online

If You Have Questions About Your Community Care

• Call the VA Community Care call center at 1-877-881-7618

• Contact your local VA medical center’s Community Care office

Common Questions

What are VA Community Care improper payments?

Improper payments are payments that should not have been made, were made in the incorrect amount, or were not supported by sufficient documentation . For Community Care, this includes claims not received within the required timeframe, services lacking proper authorization, and amounts not aligned with contracted rates .

How much did VA Community Care improper payments cost in 2025?

In fiscal year 2025, the VA Community Care program reported $608 million in improper payments, which was 2.4% of the program’s $25.4 billion in outlays .

How much has VA reduced improper payments?

VA reduced improper payments by 98% from 2020 to 2025, from $7.5 billion to $608 million . The payment accuracy rate improved from approximately 22% in 2020 to 97.6% in 2025 .

Does the VA still have fraud risks in Community Care?

Yes. The GAO found that while VA has reduced improper payments significantly, it has not conducted a comprehensive fraud risk assessment, leaving the program vulnerable to fraud . Documented fraud cases include a $100,000 fraudulent home health care claim and a $3.7 million provider settlement .

What is the FRAUD Act of 2025?

The FRAUD Act of 2025 (H.R. 3483) is a bill introduced on October 21, 2025, that would require the VA to use an information technology system to detect fraud, waste, and abuse in the Veterans Community Care Program. It includes provisions for continuous monitoring, machine learning, and post-payment analysis .

What happened to the Program Integrity Tool (PIT)?

The Program Integrity Tool, which consolidates community care claims payment data for fraud detection and insurance billing, experienced technical defects in February 2023 that forced VA to shut it down. The outage resulted in $665 million in uncollected revenue. VA got PIT working again in July 2024 .

How much did VA pay for unauthorized dental procedures?

The VA OIG estimated that between FY2022 and FY2025, VA would improperly pay $325.5 million for 847,800 unauthorized dental procedures performed by community dentists . All five OIG recommendations to address this issue have been implemented .

What caused the $665 million uncollected revenue?

The Program Integrity Tool outage from February 2023 to July 2024 prevented VA from collecting insurance payments and copays for non-service-connected care. Most of the $665 million is owed by insurance companies .

What did GAO recommend to address fraud risks?

GAO recommended that VA conduct a comprehensive fraud risk assessment of the Community Care program that aligns with leading practices in the Fraud Risk Framework. VA concurred and aims to complete the effort by March 2028 .

Are individual veterans responsible for improper payments?

No. Veterans are not responsible for improper payments made to providers. You will not be billed for unauthorized services provided to you . If you receive a bill for community care you did not authorize, contact the VA Community Care call center immediately.

Key Takeaways

• VA Community Care improper payments dropped 98% from $7.5 billion in 2020 to $608 million in 2025 

• The payment accuracy rate improved from approximately 22% to 97.6% in the same period 

• Primary causes of improper payments are untimely claims, lack of authorization, and incorrect amounts 

• The GAO found VA has not conducted a comprehensive fraud risk assessment, leaving the program vulnerable 

• Documented fraud includes a $100,000 fraudulent home health claim and a $3.7 million provider settlement 

• The VA OIG identified $325.5 million in improper payments for unauthorized dental procedures 

• The Program Integrity Tool outage cost VA $665 million in uncollected revenue from insurance companies 

• The FRAUD Act of 2025 (H.R. 3483) would require VA to use IT systems to detect fraud, waste, and abuse 

• VA concurred with GAO’s recommendation to conduct a fraud risk assessment by March 2028 

• Veterans can help by reviewing Explanation of Benefits statements and reporting discrepancies 

Official Resources