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Contractors Using Military Clinics
Civilians Also Are Not Paying, Audit Says

By Walter Pincus
Washington Post Staff Writer
Thursday, May 7, 2009

Military clinics and field hospitals in Iraq and Afghanistan have supplied more than $1 million a month in health-care services to civilian contractors during the past two years without seeking reimbursement from their employers, as provided by law, according to a new audit by the Defense Department inspector general.

The report, issued Monday, noted that all costs associated with both emergency and primary medical care are reimbursable to the government and are the responsibility of the contingency contractor personnel, their employer or their health insurance provider.

Yet the study found that Army, Navy and Air Force clinics and hospitals were not billing contractors because there was no unified system for doing so. Moreover, more than half the contracts were vague about who pays for the medical treatment of employees, although the law is clear on this point, the IG found.

Investigators cited cases in which contractors were hospitalized with heart problems, pneumonia, an accidental self-inflicted gun shot or injuries from a blast, but the medical facilities did not bill the patients' employers for $141,340 for their stays. At the time, the military did have rates of $2,041 a day for nonmilitary inpatients and $195 per visit for outpatients.

Two contractors, Blackwater Worldwide, now known as Xe, and KBR, operated medical facilities for their own personnel and for other nonmilitary people. The cost of those facilities was included in their overall contracts, but the IG investigators said the contractors did not break out what they were charging the Army overall for the medical treatment they were providing.

The IG found that military medical units had incomplete or inaccurate records. For example, in a sampling of about 200 records, 13 percent incorrectly identified patients as contractors, 22 percent had duplicate entries, and 25 percent showed discrepancies between computer and paper records.

In December 2008, as the IG was investigating, a working group was established and led by the Defense Department comptroller to develop a viable method for billing contractors who were getting medical services from military units. The Pentagon's Joint Staff told the IG early last month that electronic devices to monitor contractor use of military medical units would be installed in Iraq and Afghanistan within three months. These devices will provide a direct link to contractor companies for billing purposes, according to the report.

Meanwhile, another part of the problem remains unsolved.

The IG was told that at the Baghdad medical unit, almost 1,000 outpatient visitors a month were contractors. They made up at least 33 percent of the unit's outpatient care and were creating a burden for the staff, which was there to serve wounded and sick service personnel.

The Bagram medical unit told the IG that it was staffed for surgical and trauma patients and that the monthly 377 contractor personnel who came "tended to have more chronic medical conditions, which became a burden when specialty care had to be arranged."

In May 2007, Gen. David H. Petraeus, then the commander of Multi-National Force-Iraq, wrote the Pentagon that the medical facilities were under increased demands because of the treatment provided to contractors and that they were consuming "precious resources that should be used in providing care to coalition military forces." The reply was that Defense officials would look into the matter and explore options. As of last month, according to the IG report, no alternative option had been put forward.

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