SAO audited the General Health Care Insurance Company
Press Release – January 27, 2011
From October 2009 to October 2010, auditors from the Supreme Audit Office (SAO) were performing audit No. 09/29 that aimed at the funds collected upon the law in favour of the General Health Insurance Company of the Czech Republic (VZP) within the period 2007–2008. Auditors found insufficiencies within the financial management of the project of electronic patient record systems.
The audit aimed at the objective correctness of the collection of insurance payments, recovery of claims and amortization of debts, the refunding of health care and sanitary instruments, accounting of selected funds, and realizing of specific VZP’s activities. Auditors could not scrutinize the efficiency and economical utilization of the funds as the applicable regulations failed to specify the necessary criteria for an objective evaluation.
“The VZP failed to take accounts of debts amounting to nearly CZK 118 million, which were amortised during the related accounting periods. The implementing provisions for the Accounting Act do not consider all activities of insurance companies. The audit also revealed that in 2007 and in 2008, the VZP did not perform the book inventory of public health insurance claims pursuant to the Accounting Act“, said president of the SAO František Dohnal.
The primary objection of public health insurance system (e. g. health services are paid from the health insurance contributions) requires for the payment transactions to be closely connected to the health care administration. Unfortunately, the said requirement was contravened when the project of electronic patient record systems (hereafter “the Project”) was settled from the basic insurance fund. In 2008, the implementation of the Project cost nearly CZK 92 million. The VZP covered these expenses from the basic insurance fund as well as the abandonment cost deposit in the amount of CZK 25 million, which was covered from the operational fund in the previous year.
“The different view on the process of the Project’s settlement and the fact that costs were covered from the basic insurance fund instead of the operational fund in 2008 was caused by the novel of the decree No. 418/2003 Sb., which specifies receipts and expenditures of public insurance companies. The current legislation on health insurance does not imply that the VZP should provide an electronic patient record system. In this case the VZP should not have covered the costs of the implementation of the electronic patient record systems from the basic insurance fund“, said Dohnal.
With the view of the regulations for insurance collections, auditors did not reveal any grave professional misconduct. However, the payment debts were collected long after the due term, which negatively influenced the recovery rate. As for the audited cases, the total claims in the amount of more than CZK 50 million were not recovered until after 5 years. Only 0.23 % of claims were recovered by the VZP in 2007 and 2008.
Within the period 2007–2009, the VZP did not record any overdue accounts payable toward medical facilities. As for contracts with medical facilities, the VZP failed to keep to the rules issued by the Ministry of Health that govern contents of such agreements. The existing regulations for health care repayments and inspections within the field are not exact and complicate the situation. The regulations are sometimes obsolete, do not concur, and need to be up-dated.
The auditing operation was included into the 2009 Audit Plan of the SAO. Eliška Kadaňová, Member of the SAO Board, controlled the operation and prepared the audit report as well.
Mgr. Bc. Radka Burketová
Supreme Audit Office