Veterans director concedes violations, blames subordinates

The director of the state Department of Veterans Affairs admitted Tuesday that his agency’s failure to comply with a change in reimbursement law resulted in doubledipping of federal funds, but he placed the blame on his subordinates for not telling him about it.

E-mails obtained through the Arkansas Freedom of Information Act and congressional testimony by Veterans Affairs Director Dave Fletcher indicate that Fletcher had access to information about the violations, however.

Over the past three years, the Little Rock Veterans Home violated federal law in collecting $580,000 in maintenance fees from its war-wounded and 70 percent service-disabled residents after the law changed to increase federal funding for state-run veterans homes and prohibit out-ofpocket expenses for the nation’s aging, injured veterans.

The law provided additional federal funding to states with the requirement that they provide primarycare physicians and related prescriptions to those injured veterans. But Fletcher directed the Little Rock Veterans Home to continue using the VA for primary care, free of charge, while collecting the higher reimbursement rate.

“I am up on federal law changes,” Fletcher said. “I am not up on every detail of what goes on in the agency. That’s why you have people who will help you do that. In this case, it did not happen.”

Fletcher remained adamant Tuesday that he only learned of the illegal fee collection in April after he began investigating an employee grievance against Janet Levine, the former administrator of the Little Rock Veterans Home. He fired Levine almost two weeks ago for collecting the fees.

While a refund of those fees to eligible residents is required — $64,800 for the duration per resident — there is no current reimbursement plan or timeline for reimbursement of those veterans and their families.

Fletcher said his agency can’t afford it.

“I had no idea that we were collecting the fees for a long time,” Fletcher said Tuesday, while admitting that he knew what the federal law required.

“I never really realized, to look through the system, you know. Even recently when I saw the spreadsheets that covered so much information ... .”

That spreadsheet was a detailed list of the fees collected from each resident, his disability status and individual per diem payment from the VA.

The Little Rock Veterans Home, which has about 70 residents, has been in fiscal distress for years. In five years as director of the agency, he has not asked for more state funding for the veterans home.

“That was not on my radar at all,” he said. “What was on my radar was, when I was presented with the budget, it was presented to me that we could make our budget. I can’t tell you, I didn’t do the budget and didn’t ask the question myself, ‘What are you doing here to get us out of this?’”

E-mails obtained by the Arkansas Democrat-gazette through the state Freedom of Information Act show that Fletcher was copied in on e-mails between his deputy director and other staff members as they worked through budget issues over the past year.

And a full month before he fired Levine, Fletcher received e-mails from agency employees telling him of the illegal fees and other violations of a federal law that in 2009 increased payment to state-run veterans nursing homes for the care of the nation’s wounded and service disabled veterans.

It appears from the e-mails released by the department Tuesday that Fletcher did not reply to those e-mails. As of Tuesday, Fletcher had not released his own e-mails as requested by the newspaper last week.

On March 21, Fletcher testified before the Joint Congressional Committee on Veterans Affairs that veterans were still being charged fees despite the change in the law. Fletcher was testifying on behalf of the National Association of State Directors of Veterans Affairs, of which he is president.

“In cases where we have a large number of 70 percent or higher disabled veterans in a home, the [increased] reimbursement does not give the homes, it doesn’t pay for the full cost of care. So the homes actually have to come up with the difference, or the veteran does. And the veteran obviously suffers from that.”

At issue is Title 38 U.S. Code 305 Section 211, published Dec. 22, 2006, that went into effect in 2009 and authorized the federal Veterans Affairs Department to significantly increase the monthly fee it pays state-run veterans nursing homes for the care of war-wounded and other service-related disabled veterans with a VA disability rating of 70 percent or more.

The law authorized the $7,000 per-month, per-resident payment to be paid retroactively to 2007 and remains in effect today.

The veterans homes in Little Rock and Fayetteville began collecting the new perdiem funds from the VA in 2009. The law stipulates that the increased per diem was intended to eliminate any outof-pocket fees those veterans may have previously had to pay for care.

The law also required state veterans homes to supply primary care and primary care pharmacy prescriptions for those veterans.

All specialty care, such as cardiac or diabetic care and all associated prescriptions, is still provided by VA hospitals, according to the law.

When this law took effect three years ago, Arkansas’ two veterans homes were supposed to stop collecting an $1,800 perresident maintenance fee, contract with primary-care physicians and set up primary-care pharmacy services.

E-mails obtained by the Arkansas

Democrat-gazette through the state Freedom of Information Act show that Fletcher was copied in on e-mails between

his deputy director and other staff members as they worked through budget

issues over the past year.

The Fayetteville Veterans Home did all of that and refunded to residents almost immediately the maintenance fees back to 2007.

The Little Rock Veterans Home just recently contracted with a primary-care doctor, but the home still relies on the VA hospital in Little Rock for primary-care prescriptions.

But for the past three years that the Little Rock Veterans Home has been receiving the increased per diem payments from the VA, it has still been relying on the Central Arkansas Veterans Healthcare System [the VA hospital in Little Rock], to provide those services free of charge — double-dipping federal benefits.

When asked why so little progress has been made in complying with federal law over the past three years, Fletcher blamed the VA administration and said there was no rush, “because the VA continued to support that. ... For the duration of time we’ve been in business here with this home, the VA has always provided that care.”

Dr. Margie Scott, chief of staff for the Central Arkansas Veterans Healthcare System, said she and her staff have been working with Fletcher and his staff “for several years in order to be in compliance with public law.

“We are looking to create a transition plan for our veterans [shifting primary care to the home’s physician]. Primary and foremost, however, we must take care of our veterans and ensure they receive the medical care they need.”

She said the local VA hospital and the state Veterans Affairs Department are “absolutely moving toward resolution” of the issue.

The VA has made several offers for prescription contracts with the home, but Fletcher said they were too expensive, even with the increased per-diem payments afforded in the 2009 law.

“It is double-dipping [using the VA for primary care while receiving increased federal funding] and that is the reason we’re talking about this right now,” Fletcher said. “I did not fully, at the time that occurred, you know, when they started receiving that, I was not in the position to look in and say [to his employees], ‘Are you not doing this, are you not doing that?’”