Summary

The Department of Veterans' Affairs (DVA) administers the Repatriation health card system. This audit considered DVA's administration of the cards and the arrangements under which veterans have access to primary health care services. It also examined the accuracy and integrity of extensive electronic data holdings that support DVA's management of the card system. As a result of this audit, the ANAO made five recommendations designed to assist DVA to improve the efficiency and effectiveness of the Repatriation health card system.

Over 330 000 veterans, war widows and widowers and eligible dependants are entitled to a range of health services and medical treatment under the Veterans' Entitlements Act 1986 (VEA). DVA has implemented a system of health cards—Gold, White and Orange Cards, which:

• identify the clients and the level of health care coverage to which they are entitled; and
• serve as a primary vehicle for health providers to claim for the services delivered to veterans—in much the same way as a Medicare Card.

DVA has established the Local Medical Officer (LMO) Scheme, within which participating general practitioners provide primary health care services to entitled DVA clients. Similarly, a set of treatment arrangements applies to medical specialists and allied health providers, who agree to treat DVA clients. DVA has also devised a three-tier arrangement with a significant number of public and private hospitals throughout Australia, for the treatment of DVA clients.

If a client is deemed eligible under the VEA, he or she is issued with a Repatriation health card, along with information about how to use the card to access health services. Participating health care providers then use the information embossed on the card to claim payment for services delivered to the DVA client. The Health Insurance Commission (HIC) processes claims for medical and pharmaceutical services, on behalf of DVA. HIC also produces and distributes the cards.

DVA and HIC employ a number of sophisticated Information Technology (IT) systems in support of the Repatriation health card system. DVA maintains an extensive database of client information and, through the HIC's processing systems, collects a considerable amount of data on card usage. The aggregated data is used by DVA to monitor expenditure; plan future expenditure; predict trends in the DVA treatment population; and to generally monitor the operation of the health card system.

Over 12 million medical services were provided to the treatment population in 2002–03, along with around 15 million pharmaceutical items and some 380 000 hospital separations.¹ The total administered expenditure for these services in that year was approximately $2.5 billion.

The objective of the audit was to examine DVA's implementation of the Repatriation health card system, which aims to ensure that veterans can obtain health care through community-based providers and facilities.

The audit addressed two major administrative criteria. These were, that:

• DVA effectively administers the system of Gold, White and Orange Repatriation health cards; and
• DVA's LMO arrangements facilitate access to primary health care services for Gold and White Card holders.

Key findings

Administration of health cards

The issue, replacement and cancellation of Repatriation health cards are generally well managed by DVA. A sound set of administrative controls is in place. However, ANAO identified some scope for DVA to improve the controls associated with claims processing and, thereby, improve the efficiency of card administration.

Within DVA's IT systems, determinations made on compensation or pension matters for a client trigger the issue of a health card where eligibility criteria are met.

The process is automated and results in HIC producing a batch of health cards on a weekly basis.

ANAO found that DVA managed the bulk replacement of expired Repatriation health cards well. DVA's quality assurance activities in this regard were sound and appropriate, as was the sensitivity demonstrated by manually extracting replacement cards for recently deceased veterans, prior to the bulk mailing of cards.

DVA had implemented effective controls in relation to the cancellation of health cards. A Treatment Eligibility Code (TEC) and date of death indicator were used to convey important information to HIC about the processing of claims against such cards. DVA should consider the introduction of additional controls on the use of White Cards to obtain pharmaceutical benefits, as ANAO found the current lack of system level controls exposes the Commonwealth to a slight risk— although the amounts involved are likely to be small.

ANAO found that a combination of administrative and IT system level controls help to ensure that only appropriate health and medical services are claimed against White Cards.² However, in the case of the claim processing systems for pharmaceutical benefits, only administrative controls exist. ANAO found that this situation exposes DVA to a risk of having some administered expenditure recorded against the Repatriation Pharmaceutical Benefits Scheme (RPBS), when it should more appropriately be recorded against the Pharmaceutical Benefits Scheme (PBS). ANAO also found a slight risk that some White Card holders may gain a financial benefit to which they are not entitled.

The processing of pharmaceutical benefits claims, using Pensioner Concession Cards (PCCs) issued by DVA— which are not a type of Repatriation health card—results in DVA incurring expenditure that is recorded against the RPBS, whereas the expenditure should, more properly, be recorded against the PBS.

ANAO confirmed DVA's analysis that pharmaceutical benefits paid against PCCs could amount to some two per cent of annual RPBS expenditure. Once again, ANAO found that such expenditure should be recorded against the PBS, rather than the RPBS.

Performance information on health cards

DVA generates and publishes a wide range of statistics relating to the veteran population and uses this information to administer the health card system and inform decision¬making within the department.

DVA regularly compiled statistics on the treatment population—its composition, geographic distribution, age profile and use of health services—and employed these in its business management activities. ANAO identified a small error in the procedures used to generate the Treatment Population Statistics, which DVA promptly rectified.

Data integrity

DVA uses a Unique Identification Number (UIN) to distinguish between clients on its electronic databases. ANAO found that up to two per cent of clients in the treatment population had been issued with more than one UIN, either replicating or fragmenting the client's information across multiple records.

ANAO's analysis of DVA's data revealed that some 6222 health card holders, out of a treatment population of around 330 000, had been issued with two or more UINs. Furthermore, 94 of these people had been issued with two health cards and one person had been issued with three health cards. ANAO considers this situation represents a risk to the integrity of performance information on the health card system, although it is unlikely to impact significantly on client service.

Some DVA clients with multiple UINs were receiving two pharmacy allowance payments. ANAO identified a risk to the efficient administration of payments to veterans, caused by the fragmentation of client information across two UINs or two unlinked files.

Although the number of duplicate payments was small, these cases point to another inherent weakness of the card system, that is, when clients' information is fragmented. While this audit only considered the payment of pharmaceutical allowances, ANAO encouraged DVA to investigate possible duplicate pension payments.

The situation where clients have multiple UINs introduces the risk of recording inconsistent information across client records. ANAO found that the date of a client's death had been inconsistently recorded in up to 4582 cases.

ANAO's analysis identified over 4500 cases of clients with a date of death entered on their record under one UIN, but no date of death entered on their record under another UIN. Of these, ANAO identified 23 clients who had been issued with two health cards—under two different UINs—and had a date of death entered on one record only. With one UIN still active, a replacement health card would be sent to those deceased veterans when the previous card expired. DVA has indicated that, as part of its long term data clean-up process, it will institute additional measures to avoid sending replacement health cards to deceased veterans.
ANAO found that a relatively small number of DVA clients have been issued with both Gold and Orange Cards.

The Gold Card affords the card holder access to the full range of medical and pharmaceutical benefits under the RPBS. The Orange Card provides access to pharmaceutical benefits only. Therefore, the Orange Card is of no additional value to a Gold Card holder; the practice of issuing both cards to eligible clients introduces an administrative inefficiency. ANAO identified 63 DVA clients in this category. DVA has agreed to implement measures to prevent a Gold Card holder being issued with an Orange Card.
ANAO's analysis of DVA's client data revealed a number of errors and anomalies in the recording of dates of birth and death. These anomalies have the potential to impact adversely on DVA's statistical analyses and any decisions based on, or reliant on, these data.

Analysis of date of birth and date of death data revealed examples of erroneous entries—such as eight clients with the same date recorded for both their date of birth and date of death; 66 veterans who would have been over the age of 150 years at the time of their death, according to their recorded dates of birth and death; and 54 veterans who were identified as having served in World War 1 or World War 2, but with date of death recorded prior to 1914. ANAO considers that, while the obvious errors are relatively easy to identify and rectify, the existence of these anomalies points to a potentially more extensive problem with the integrity of date of birth and date of death data, stored on DVA's client database.

DVA conducts a series of regular checks on data integrity. However, these tend to concentrate on client records that have recently been amended. ANAO found that DVA had not conducted a comprehensive analysis of data integrity across its entire client database.

ANAO found that DVA regularly conducted up to 40 separate checks on specific aspects of data integrity, searching for anomalies in client entitlements or treatment eligibility. These often concentrated on client records affected by a reassessment of pension entitlements or focussed on clients whose multiple UIN records had recently been merged.

ANAO also noted that DVA had undertaken some work to merge suspected multiple UINs identified by HIC.

State-based file numbers

DVA's implementation of a State-based file number system was less than ideal and had contributed to many of the data anomalies identified in this audit.

In addition to UINs, DVA organises client information according to a State-based file number system. Each time a client lodges a new claim or moves interstate, he or she is issued with a new file number. File numbers, not UINs, are embossed on the clients' health cards. In the case of interstate transfers, the old health card is recalled and a replacement card, bearing the new file number, is issued.

ANAO found that, until recently, the manner in which the transfer of client data was handled contributed to the creation of multiple UINs for clients moving from State to State. ANAO also found that, even when a client was correctly identified under his or her UIN, client information was still inconsistently recorded across records, under different file numbers.

In 2002, DVA introduced a series of enhancements to simplify the interstate transfer process and improve the quality of data exchanged across a client's various file numbers. ANAO found that the COAST³ project had significantly reduced the opportunity for issuing clients with multiple UINs.

Access to Local Medical Officers

DVA's LMO arrangements facilitate a good level of access, for entitled veterans and their dependants, to general practitioner services.

According to DVA, there were 14 481 LMOs registered with the department, at 7 November 2003. DVA maintained a good level of awareness of the geographic distribution of its treatment population, LMOs and of other medical service providers. Statistical reports, such as the Treatment Population Statistics – Rural and Remote Areas, provide valuable information to DVA managers. These enable them to provide timely support to veterans experiencing difficulty in accessing health services.

Access to specialists

Veterans and their entitled dependants had a reasonable level of access to medical specialist services, although the proportion of specialists prepared to accept the Repatriation health cards has decreased by approximately four per cent over the past twelve to eighteen months.

ANAO found that DVA maintained a good level of awareness of the shortage of particular specialist services in some States. ANAO also observed that, whenever DVA became aware of veterans experiencing difficulty in accessing specialist services, it had acted appropriately to support veterans in locating alternative providers, including the provision of transport when necessary.

DVA also acted properly whenever it became aware of specialists planning to charge veterans a co-payment. DVA reminded the specialists concerned that such practice is not permitted under DVA's treatment arrangements. That is, a condition of accepting the Repatriation health card is that no co-payment is levied on the patient.

DVA advised ANAO that the task of providing specialist services to veterans in regional areas, where specialist numbers are smaller and alternative specialists harder to find, will become increasingly difficult if many more specialists withdraw their services to veterans.

Access to hospitals

DVA's arrangements with a range of public and private hospitals, including Veteran Partnering hospitals, afforded a good level of access for veterans requiring hospitalisation.

Veterans are able to access around 750 public hospitals across Australia. In addition, DVA has contracted over 400 private hospitals and day procedure centres, and organised these within a three-tier structure. Treating doctors do not require prior approval to admit Repatriation health card holders to Tier 1 (public, Veteran Partnering and former Repatriation General) hospitals. If considered necessary, doctors may seek prior approval to admit DVA patients to Tier 2 (contracted private) hospitals or Tier 3 (non-contracted private) hospitals.

Monitoring client satisfaction

DVA maintains a productive and consultative relationship with a number of Ex-Service Organisations (ESOs). ANAO found that ESOs were generally supportive of DVA and the Repatriation health card system.

DVA regularly conducts a client satisfaction survey and, in 2002–03, reported a 99 per cent client satisfaction level. ANAO surveyed 24 ESOs during this audit and found that, while some ESOs reported examples of members experiencing difficulty in accessing LMO or specialist services, most were satisfied that DVA had acted to support the veterans and to achieve an appropriate health care outcome for those concerned.

Reliability of LMO numbers

DVA could improve its capacity for providing accurate and reliable counts of the number of LMOs registered at any one time.

ANAO experienced difficulty in obtaining accurate and reliable information on LMO participation rates. LMO information is stored on a range of different databases. This in itself is not a problem, as they are used for different purposes. However, ANAO noted a lack of consistency across these, as well as errors in the processes used to extract summary figures.

Although difficult to verify, the number of registered LMOs appears to have remained relatively stable over the past five years. However, some variation in the participation rate occurred in 2002–03.

Overall audit conclusion

DVA's administration of the Repatriation health card system is generally sound. The cards readily identify a level of health care to which individuals are entitled under the VEA. They facilitate veterans' access to community¬based health services and serve as a means by which health care providers can claim for services delivered to veterans. Most of the controls associated with health card administration and claims processing are well defined and consistently implemented. However, ANAO identified a number of areas in which controls should be strengthened.

Extensive electronic information holdings support DVA's administration of the health card system. ANAO identified a number of weaknesses in DVA's current data management activities. The fragmentation of clients' information across unrelated electronic records introduces a risk to the efficient administration of the card system. ANAO found that this situation applied to approximately two per cent of the treatment population. The audit revealed scope to improve the accuracy and integrity of DVA's data holdings, necessary for sound performance.

Repatriation health card holders enjoy a good level of access to medical and hospital services. DVA's arrangements with LMOs, public and many private hospitals provide entitled veterans with a relatively straightforward means of obtaining necessary health services. Health card holders also enjoy a reasonable level of access to medical specialist services. Where required, DVA assists veterans to locate alternative providers and arranges necessary transport.

Recommendations

The ANAO made five recommendations, directed at:

• strengthening controls associated with processing Repatriation Pharmaceutical Benefits Scheme claims;
• improving data integrity by merging records for clients with multiple identification numbers;
• improving card administration by not issuing clients with multiple health cards;
• improving DVA's capacity to report accurate and reliable information relating to the number of registered Local Medical Officers; and
• moving from DVA's current State-based file number system to a truly unique client identification system.

DVA's response (summary)

DVA's full response to the audit may be found at Appendix 3 of the audit report. DVA also provided a summary of the full response. This summary appears below.

DVA agrees with the overall ANAO finding that the administration of the Repatriation health card system is generally sound. DVA believes that this conclusion highlights our ongoing success in one of our key result areas—effective business performance, as stated in DVA's Corporate Plan.

As a general comment on the report, DVA agrees with the findings and broadly agrees with the recommendations made in the report. Four of the five recommendations focus on data integrity issues at the corporate level. DVA is of the view that the data supporting the payment of veterans' entitlements is complete and ensures accurate service delivery. DVA acknowledges that data cleansing would address the data integrity issues in legacy systems, but given the significance of the work required believes this can best be accommodated, as legacy systems are removed/redeveloped.

Footnotes

1‘Hospital separations' refers to the number of distinct episodes of hospitalisation. For example, a patient might be admitted to hospital on three separate occasions during the year. The figures include services delivered in Day Procedure Centres.

2 Unlike Gold Cards, which provide access to medical treatment for all conditions, White Cards entitle the card holders to treatment for specific illnesses or conditions, accepted by DVA as being service-related.

3 Change of Address and Simplified Transfers.