A permanent replacement program could include some cost-control measures like further eligibility restrictions and copays.


April 20—President Donald Trump this week signed a bill to extend a program that allows veterans to obtain private-sector healthcare services, even as work continued on a permanent version of the program.

The bipartisan legislation allows the Veterans Choice program, an initiative to allow veterans to have access to private-sector health care when they face long wait times or other barriers to treatment, to continue until an estimated $950 million in appropriated funding is spent. The program had been scheduled to end in August but could continue through the end of the year with the remaining funding.

Congress enacted the Veterans Choice program in 2014 in response to a U.S. Department of Veterans Affairs (VA) wait-list scandal. The program aimed to address the wait-time challenge by allowing veterans to seek non-VA care if they faced at least a 30-day wait for care at a VA medical center or lived more than 40 miles away from such a facility.

Among the program changes in the new bill, the Veterans Choice Improvement Act, was the designation of the VA as the primary payer, which supporters hoped would reduce out-of-pocket costs for veteran patients. Additionally, the bill sought to bolster data exchange and care coordination between VA and non-VA providers involved in the Choice program.

Designating VA as the primary payer aimed to alleviate the many instances when community care providers turn medical bills over to veterans because VA takes too long to pay for services, according to a veterans group.

Sen. Jon Tester (D-Mont.) noted during the debate on the bill that some were concerned about the primary-payer provision of the newly signed bill.

“Right now veterans are being hamstrung and delayed, and the folks who provide the benefits, the providers, are not getting the dollars in a timely manner,” Tester said. “I would just ask: If the VA is not going to be the primary payer, who is?”

Program Problems

Provider concerns about delays in payment under the Choice program included a finding by LifePoint that its average accounts receivable payment rate was 113 days in the program, compared to an average of 54 days among all payers and self-pay patients.

David McIntyre Jr., president and CEO of TriWest Healthcare Alliance—one of the program’s third-party administrators—acknowledged at a March 7 hearing of the House Veterans Affairs Committee that there were “early struggles” with the company’s payment processing. However, the administrator is now able to process and pay “about 97 percent of clean provider claims” from the 180,000 providers in its network within 30 days.

In recent years, VA has increased its purchasing of care from private-sector providers to accommodate veterans whose needs cannot be met in-house, according to a RAND Corporation analysis. The VA purchased $5.6 billion in outside care in FY14, according to the Veterans Health Administration's Chief Business Office, and the Veterans Choice program added another $10 billion to external VA spending in 2015–17.

The Veterans Choice program has not been a cure-all, with veterans still facing wait times of up to 81 days due to the program’s inadequate scheduling protocol, according to a March 7 report by the Government Accountability Office (GAO). The protocol for veterans to access third-party care in the Choice program is often lengthy and convoluted, GAO reported.

Despite the problems, non-VA health system participation continues, for instance, with Ascension Health providing care through it for more than 10,000 veterans from March 2016 through February 2017. That system averaged about a 23-day wait from appointment request to treatment, well within the Veterans Choice goal of 30 days, said a spokesman.

As of Jan. 31, 2017, more than 425,000 hospitals, clinics, and other providers were in the Choice network, an increase of 60 percent since January 2016, according to a VA spokesman.

Reform Package

Amid the challenges that have arisen in the program, policy makers said they saw the extension—and the accompanying tweaks—as needed to give them time to develop a long-term replacement.

“I believe our way to fulfill our commitment to America’s veterans is to keep a strong VA but integrate it with what the private sector is doing that the VA isn’t doing or that the VA isn’t doing as well,” David Shulkin, MD, secretary of the VA, said in an April 13 interview on C-SPAN. “So I’m looking to design a single system that’s seamless so that veterans can get the best of what the VA offers and the best of what the private sector can offer as part of an integrated approach to care.”

Shulkin said the VA will work with Congress on a legislative package over the “next several weeks,” and he hopes it will advance in the early fall “because we need a replacement program by the end of this calendar year.”

“It’s a tight time schedule, but I am confident that when it comes to protecting and honoring our commitment to veterans, the Congress and certainly the president are committed to doing whatever they need to do to make sure that we meet that time frame,” Shulkin said.

Among specific changes Shulkin plans to seek will be an elimination of the 40-mile/30-day rule, according to a VA spokesman.

Other possibilities—some of which Shulkin discussed at the March 7 committee hearing—include giving veterans with service-connected injuries or ailments priority to use Choice over veterans seeking care for conditions that are unrelated to service; charging other health insurance that a veteran might have for the cost of care that Choice provides through the private sector; and instituting a new set of copayments for Choice.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Thursday, April 20, 2017