VA accuses ex-leader’s company of overcharging

WASHINGTON – The company headed by former Veterans Affairs Secretary Anthony J. Principi overcharged the agency some $6 million under a long-term contract to conduct physical evaluations on veterans applying for disability benefits, an audit has found.

The report, released Thursday, also questioned a proposal by the VA to amend the contract with the company – QTC Management Inc., based in Diamond Bar, Calif. – to charge higher rates than authorized.

“The contract clearly limits the base rate” for these services, according to the 43-page report by the VA’s inspector general.

The audit added that the proposed amendment amounted to a major or “cardinal change” under federal contracting laws, which can trigger a requirement for a new bidding process.

The report also found evidence that the VA still might be paying too much for a variety of services on the multiyear contract.

The audit was triggered by a call to a government hot line and followed an internal review of QTC’s billing practices and a review of the contract by a private company for the VA. As a result, QTC already has agreed to repay about $3 million.

But a company executive said Friday that QTC doesn’t agree with the new audit’s conclusion that it should repay roughly $3 million more.

“We just got the audit and we’re still reviewing it,” QTC Senior Vice President Marjie Shahani said.

“Our initial review of the report shows that it has numerous errors and inaccuracies, and we strongly disagree with many of its conclusions.”