The changes codified in the bill are expected to broaden the appeal of the program—to providers and veterans.


May 30—Following years of complaints from hospitals and other providers, Congress recently revamped the Veterans Affairs (VA) Department’s use of outside providers.

Providers and advocates say they are hopeful the changes to the five-year-old VA Choice program will clear the payment backlogs and paperwork burdens that drove some out of the program.

On May 23, Congress cleared for the president’s signature the VA Maintaining Internal Systems and Strengthening Integrated Outside Networks Act of 2018, known as the VA MISSION Act.

The bill, which would consolidate various VA community care programs into one permanent program, aims to provide a range of improvements that include:

  • Increasing payment rates
  • Eliminating the use of third-party administrators
  • Creating timely payment requirements
  • Expanding eligibility beyond veterans living at least 40 miles from a VA facility or who have had to wait at least 30 days for a VA appointment

Key Changes

The legislation, which was backed by hospitals and other provider advocates, also would provide $5.2 billion to extend the VA Choice Program for one year as a bridge to the permanent Veterans Community Care Program.

“We, along with some other healthcare organizations, are very hopeful this will solve some of the problems that the VA has had and hospitals have had with the Choice program,” said Gabe Schneider, system director of government relations for Munson Healthcare in Michigan.

That health system initially was optimistic about the Choice program as well but ended up facing similar financial challenges to those reported by other providers. Specifically, the Choice program’s use of two national third-party contractors to process provider payments was blamed with chronically late payments—more than $1 million in payments still are owed to Munson.

The new requirements are designed to ensure payment or denial decisions within 30 calendar days of receipt of a clean electronic claim or within 45 calendar days of receipt of a clean paper claim.

Outstanding VA Choice claims at Munson average more than a year, and some date back to 2015, Schneider said in an interview.

“Anything would be better than a year waiting for payment,” Schneider said.

The Michigan health system’s experience was not unique, according to a VA Office of Inspector General (OIG) report. Sixty percent of sampled claims examined by the OIG were more than 30 days old, and the share of late payments increased with the program’s volume.

According to a Government Accountability Office report, these payment delays have made community providers hesitant to provide care to veterans due to fears that they would not be paid for their services.

The payment delays have led some providers in rural Michigan to leave the Choice program, although Munson has stuck it out due to the three-hour drive that local veterans face to reach the closest VA hospital, Schneider said.

Among the key provisions that physician advocates see in the new program is the adoption of Medicare payment rates, which are higher than the VA rates that are used in the Choice program.

“That’s going to do nothing but help expand veterans’ access to health care,” Michael Munger, MD, president of the American Academy of Family Physicians, said in an interview.

Another key change allows the VA to enter into Veterans Care Agreements with healthcare providers instead of using competitive bidding procedures as required by the Federal Acquisition Regulation (FAR). For providers that opted to contract directly with the VA instead of dealing with third-party administrators, the requirement to comply with FAR provisions opened them up to complex administrative requirements and audits, according to a House Veterans Affairs Committee report.

The American Health Care Association (AHCA), which represents post-acute care providers, testified to Congress that the “onerous reporting requirements and regulations” in the Choice program “dissuaded nursing care centers from admitting VA patients.”

“VA provider agreements are an essential step to ensuring veterans have access to long-term and post-acute care,” AHCA said in a written statement after the bill passed. “This legislation will help remove some of existing the red tape that may prevent providers from being able to provide care, broadening options for veterans who need both nursing center care and home- and community-based services.”

Increased Appeal

The policy changes are expected to increase the appeal of the program. In 2017, the VA processed 8.7 million claims worth $5 billion from non-VA providers. A Congressional Budget Office (CBO) estimate projected the legislation to add about 640,000 veteran patients to those seen by non-VA providers.

Also expected to fuel that surge is a sharp reduction in patient wait times for appointments, which have run up to 80 days amid the Choice program’s VA lengthy approval process, according to a March GAO report. The additional ways veterans will be able to qualify for non-VA provider care under the new legislation are expected to cut such administratively caused wait times.

One benefit of the substantial administrative problems the VA has endured under the Choice program, according to CBO, was that the various issues have provided the experience necessary to more smoothly operate the new initiative, which is expected to spend $21.4 billion from 2019 through 2023.

Munger said his group will be watching to see how coming rules will implement the legislation, as well as whether funding continues after the year of funding included in the bill is spent.

Among key regulatory details, he said, will be ensuring veterans in the program can access preventive services with no deductible or copay.

“That’s going to be really critical to make sure they have meaningful access,” Munger said.

Additionally, the rules will determine the extent of the program’s administrative burden, such as the use of prior authorization.

“That’s certainly something we are going to be actively watching,” Munger said.


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

Publication Date: Thursday, May 31, 2018