Veterans Affairs admits to spending billions on private healthcare

WASHINGTON, June 2 (UPI) -- Officials from the Department of Veterans Affairs told a House Committee on Tuesday that the agency has been spending billions of dollars a year on private medical care for veterans in hospitals and clinics without contracts.

The hearing before the House Committee on Veterans' Affairs' investigations panel was a result of allegations of misspending of billions of dollars brought forward by Jan R. Frye, deputy assistant secretary for acquisition and logistics at the VA.

Medical costs for veterans outside VA hospitals and clinics are estimated to exceed $10 billion this fiscal year, according to The Washington Post.

Acting Assistant Secretary for Management and Interim Chief Financial Officer Edward J. Murray testified before the hearing.

"VA acknowledges that our longstanding procurement processes for care in the community need improvement," Murray said referring to the care of veterans outside the VA system, also known as non-VA care, adding that "serious legal questions" have been brought up over the medical care of veterans outside VA hospitals and clinics.

Frye sent a 35-page memo to the VA Secretary Robert McDonald in March, accusing VA officials of spending at least $6 billion a year in violation of contracting regulations, also describing a culture of "lawlessness and chaos" at the Veterans Health Administration system that serves nearly 9 million veterans.

"When federal contracts are required and you don't use them, there are terms and conditions that are missing from the contract," Frye said at the hearing. "There are termination issues. Disputes over fair and reasonable prices. A whole host of issues. Safety and efficacy. Without them, the contractor is there to do what he or she wants."