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Mister Chairmen and distinguished members of both Committees The National Military and Veterans Alliance (NMVA) is very grateful for the invitation to testify before you about our views and suggestions concerning possibilities for improved coordination between the Department of Defense’ and the Department of Veteran Affairs’ Health Care Systems.

The Alliance was founded in 1996 as an umbrella organization to be utilized by the various military and veteran associations as a means to work together towards their common goals. The Alliance’s organizations are:

v American Military Retirees Association
v American Military Society
v American Retiree Association
v American World War II Orphans Network
v AMVETS National Headquarters
v Catholic War Veterans
v Class Act Group
v Gold Star Wives of America
v Korean Was Veterans Foundation
v Legion of Valor
v Military Order of the Purple Heart
v National Association for Uniformed Services
v National Gulf Was Resource Center
v Naval Enlisted Reserve Association
v Naval Reserve Association
v Non Commissioned Officers Association
v Society of Medical Consultants to the Armed Forces
v Society of Military Widows
v The Retired Enlisted Association
v TREA Senior Citizens League
v Tragedy Assistance Program for Survivors
v Uniformed Services Disabled Retirees
v Veterans of Foreign Wars
v Vietnam Veterans of America

The preceding organizations have almost five million members who are serving our nation, or who have done so in the past and their families.

When decision makers look at the goal of coordinating the health care services of the Department of Defense and the Department of Veteran Affairs their first thoughts are to avoid duplication of effort and thus create financial savings. Both are worthy goals. But while hoping for these results one should abide by the Hyppocratic oath and say: " First do no harm." The Departments should only assume this huge effort if, at all times, the main goal is to improve health care for all beneficiaries while keeping both Departments’ purpose and Missions always in the forefront of their programs. It is crucial that any plan for coordination leaves both sets of beneficiaries with, at least, the same level of benefits and services they now enjoy or, hopefully, enhanced benefits.

The Missions of the two Departments Health Programs are quite different. At first glance they may look the same: PROVIDING QUALITY HEALTHCARE. The Department of Veteran Affairs’ Mission clearly is to provide quality medical care for our Nation’s Veterans. The Department of Defenses’ Mission is two fold: (1) to support readiness of active duty troops and to have skilled and mobile medical staffs ready to support and follow the active duty troops where ordered and (2) to provide first class medical care for the active duty members’ families, Military retirees and their survivors. The second part of DoD’s health care mission helps to support readiness by improving the morale and peace of mind of the active duty forces. It further enhances recruitment and retention by improving the quality of life for the Active Duty families and assuring all stakeholders that DoD will keep faith with the promises made to former Military members and their families. Thus the two Departments have very different goals and populations who they serve and these differences are reflected in how the two health care systems have developed. Any plan for sharing, coordination and cooperation must take into account the two separate focuses when deciding if any proposed plan is workable.

One of VA’s focuses while providing health care is providing medical education and conduct extensive medical research. In 2001 the VA’s academic affiliates trained over 85,000 doctors. Along with financial support the VA attracts doctors by sponsoring first class medical research in the areas of spinal cord injury, mental health and prosthetic development. Such renowned programs should be maintained or enhanced while cooperative plans are being designed.

For many years there have been numerous calls for the Department of Defense’ and the Department of Veterans Affairs’ health programs to coordinate their services. The results have repeatedly been huge disappointments. When people tried to understand why the cooperative models did not generally work (There have always been local sharing projects that have been inspiring successes but they have not been taken up by other areas of the country and other facilities.) the answer was that it was not "really.

tried." However, the experiments have been tried by people of good will but still the results have been disappointing. As stated above, the reason may be that the two programs are not as similar as they first may appear; thus their coordination is harder than predicted and may not be possible in all areas of their endeavors. However, that does not mean that useful coordination is not possible. To decide where we can improve the operation of both Departments we must analyze the programs carefully and see where to start.

History makes clear that for the collaboration of parts the Department of Defense’s and the Department of Veteran Affairs’ health care mission to be successful the direction to coordinate must come from the highest levels of both Departments. It must be made part of the Mission of all responsible members of both Departments. It must come from the top down rather than from an enthusiastic true believer at the local level. Many test programs have been started by such an individual in the last 20 years only to wither away when that person was transferred to a different assignment.

The Presidential Task Force is presently looking at possible systemic changes that may help improve health care for all beneficiary groups and improve the administration of both Departments’ programs. In the short run there are some areas where there is presently wide spread agreement among representatives of Veteran Service Organizations and other Veterans and Military Retiree Groups that coordination is possible and could benefit both groups of Beneficiaries and both Departments’ efficiency, budgets and employees’ morale. These include: Information Technology (IT) coordination, the pharmacy programs, billing and claim coordination, Department of Veteran Affairs and Department of Defense Medicare subvention; the Department of Veteran Affairs as a TRICARE provider; coordination of Military Treatment Facilities (MTFs), TRICARE Contractors and Veterans Integrated Service Networks (VISNs) in certain regions; and DOD/VA co-located facilities.

To start to meld the medical practices we must first look at the IT (Information Technology) that could allow the two Departments’ Medical staffs to speak to each other. Before we can coordinate medical treatment we must first be able to transfer patients’ medical records information back and forth between DOD and the DVA. At this time we can not do so. In January 1998, the Government Computer-Based Patient Record (GCPR) project was commenced by DoD, the VA and IHS. In that same year President Clinton directed DoD and the VA to create a joint computer patient record system. Although a great deal of time and energy has been spent on the project it has been slow going- target dates have not been met and no implementation date presently exists. It has also had steep cost overruns. But the goal itself is essential. While this work must be successful before true and comprehensive coordination can take place, in the short run the Departments may start by creating a common DoD/VA separation physical. Such an exam using a newly developed software program can record all the information needed by both DoD and the VA. The needed information VA could then be electronically

transferred to the VA vitiating the need for a second physical conducted by the VA. And this could be the start of a uniform medical record keeping system

It has been the long term hope that part of the growing costs of medical treatment in both the Department of Defense and the Department of Veteran Affairs could be paid by billing private insurance companies and Medicare/Medicaid systems (DoD and VA Subvention). Numerous attempts to improve these financial streams have failed. In part

this failure has been caused we believe because the various systems do not share the same system for claims and billing. Since the 800 pound gorilla in all medical claims in the country is clearly Medicare if DOD and the DVA adopted the Medicare claims system ALL parties- Private Insurance Companies, DOD, the DVA and Medicare/ Medicaid would know what medical services, pharmaceuticals, laboratory services and the like have been provided. Such a uniform billing plan could also lead to improvements in allowing the VA to be a fully participating TRICARE network provider. This does not solve the other billing problems but at least it would put all the parties on the same page of the hymnal. Other areas that DoD and the VA are presently working on in IT development include Technology Integrated Laboratory, Interagency Pharmacy Initiatives, Health Data Repository, Centralized Credentials Quality Assurance Systems. All these projects should be looked at as steps toward further cooperation and better beneficiary.

The present area of endeavor where everyone who has studied this problem sees possibilities of quick coordination and possible cash savings in the area of drug purchasing and distribution. The General Accounting Office reported in May, 2001 that DoD and the VA spent $3.2 billion on prescription drugs in fiscal year 2000. With DoD’s newly added Senior Pharmacy benefit’s estimated yearly $88 million cost the two Departments will be spending over $4 billion this year on prescription drugs. If savings could be found it would relieve some of the financial pressure on both systems. This is the area that can be acted upon very quickly. Any day (if not already) the Department of Defense will issue a RFP for its National Mail Order pharmacy (NMOP). The Department of Veteran Affairs already has a renowned Consolidated Mail Order Pharmacy (CMOP) to issue refills of their prescriptions through the mail. If the two different formularies could be combined (differing beneficiary populations- women and children for DoD and elderly patients and mental health treatments in the VA) this could mean possible savings in negotiated drug prices and predictable savings in distribution costs. However, again creating a single formulary will be a great challenge. At the direction of Congress the Department of Defense will very shortly release their proposal for a uniform formulary. Of course then there will be vigorous discussions about the plan. The VA already has a broad formulary. But both formularies will be looking at different populations. DoD covers numerous women of all ages and children (though the commencement of TRICARE for Life has required DoD to look at over 65 beneficiaries’ medical needs. The VA has always focused on an older male population (though the increase of women in the active duty will require a change in that point of view as well.)

As discussed before the two programs are different in mission and structure. A difference that does not seem to be mission grounded are the rules governing the two Departments’ pharmacies. These differences have very practical every day effects on the members of the two groups of beneficiaries. When people need drugs quickly mail order pharmacies are no help. They must look to their neighborhoods. At the present time, the VA Pharmacies, which are located across the nation, can only issue prescriptions that have been written in their facilities. If this rule could be changed to allow VA pharmacies to fill prescriptions for TRICARE patients regardless of which Doctor wrote the script the Department of Defense could save substantial money by having a practical option for their beneficiaries other than their TRICARE Network Pharmacies. However, before this could be safely accomplished the Departments would have to develop a method to allow the VA system to have access to DoD’s electronic Pharmacy Data Transaction Service (PDTS). If this is done it would save money for the Department, it would make life easier and less expensive for active duty families enrolled in TRICARE Prime Remote due to assignment and retirees who are scattered throughout the country. Finally, this one change could also help the VA because if the VA beneficiaries could have their private physician’s prescriptions filled by the VA pharmacies the huge influx of patients requiring in house appointments merely to qualify for a prescription, or to renew a maintenance drug prescription could be vastly reduced.

By developing a uniform formulary, by opening up distribution points to both beneficiary populations, and by possibly combining their mail order programs (as a long term goal) the Department of Defense and the Department of Veteran Affairs could improve the service for their beneficiaries; could save wear and tear on their employees and could hopefully save money for both Departments.

While looking at pharmaceutical costs and purchases we should not miss other joint purchases that also may save money and save time and effort of double contracting. This can include medical supplies, laundry services, maintenance and janitorial services (if security concerns will allow) and surgical supplies. Increasing the size of these contracts from area to area can save money and time while not changing the focus or the mission of each facility. Buying in bulk is usually a saving idea.

Another area of possible savings and efficiency is the joint purchase and coordinated use of expensive diagnostic tools. If distances and treatment permits the sharing of diagnostic and other sophisticated medical equipment provides convenient care for patients and maximum use for important investment. This is presently being done throughout the country among closely located civilian hospitals. However, whenever such a sharing agreement is considered the Medical personnel must be sure that the

distances and delays involved in traveling from facility to facility is recommended. (Example if a patient needs a CAT Scan is it appropriate to drive 30 minutes from the MTF to the VA Facility. This is the sort of decision that must be made by medical personnel, not administrators.)

When discussing medical supplies and equipment purchases or drug distribution the savings will not be visible to the beneficiaries. But when the consideration of sharing or coordination of health care in the Departments’ facilities then the effected beneficiaries will be looking at two very different benefit plans. TRICARE Prime beneficiaries have guaranteed access standards. It is an entitlement. While care at the VA is discretionary. For a TRICARE beneficiary to be treated in a VA facility an appointment must be made within 24 hours for urgent care; within seven days for routine care; within thirty days for referred or specialty care and wellness and preventive care. It is well known that the VA has no such access standards for their beneficiaries. Veterans have been known to wait for months for some types of appointments. Therefore it must be clearly planned from the top- how will the last appointment for the day be assigned? Who will be bumped? When we all speak about the need to at the least maintain the present levels of service for all beneficiaries this is the crux of the matter. How can this be done fairly? How can we avoid disadvantaging a beneficiary? If a general plan cannot be developed then we will be left with local agreements where there is enough staff and space to accommodate both systems. Additionally, the Alliance wants to reemphasis our strong position against the idea of forced choice for military retirees. We were very pleased that Congress stated their clear disapproval of the concept in 2002’s VA’s Appropriations Bill and DoD’s Authorization Act. It is crucial to understand that the military retiree has earned these two very different benefits for very different reasons. Furthermore many retirees use the benefits for very different reasons as well. A retiree may chose to take advantage of the VA’s expertise concerning injuries to have a service connected injury treated at a distant VA Hospital. He then may use TRICARE for his primary care near his home. It is his choice today and it should remain his choice.

As briefly mentioned above, the attempt of Medicare subvention (having Medicare pay for treatment of its beneficiaries at MTFs) with the DOD has been a huge disappointment. The Departmen of Defense has received no stream of payments. Medicare’s required" level of effort" has never been reached by an MTF. But this goal should not be abandoned. The active duty member, his or her working spouse, the Veteran and the Military Retiree have all spent their working careers paying money into the Medicare system. The taxes have been paid but if they receive treatment in a MTF or a DVA hospital or clinic the facility receives nothing from Medicare to help pay for that beneficiary and tax payers. Of course, the people sworn to protect the Medicare trust fund like the situation as it is. And who can blame them? However the financially strained medical systems of the VA and DOD should receive some of the support their patients

have paid. Again, if DoD and the VA adopted Medicare’s billing system it could support an effective attempt at subvention.

One of the areas where coordination by the DOD and DVA could occur almost immediately is by making VA installations active TRICARE providers. At this time 80% of Veteran Affairs installations are nominally TRICARE providers in the TRICARE Networks. However, last year TRICARE paid only $3.7 million to VA facilities for care provided to TRICARE beneficiaries. Part of the problem is clearly the previously discussed failure to have one system of Medical Record keeping and one method of claims and billing. Therefore, the change suggested above to follow Medicare’s claims and billing system could alleviate some of the problems. It is also crucial to solve this problem so that theVA can qualify to be a TRICARE for Life provider. It could be a way to help improve coordination and predictability as well as a cost saving for both the DVA and DOD if the VA became a qualified Medicare provider. If this was accomplished then Medicare Part A or Part B would be first payor and TFL would pay the rest. This could be a serious stream of money (primarily from Medicare) to the VA for non- service connected treatment that the VA provides to military retirees. But unless and until the VA qualifies as a MEDICARE provider this is not possible. Since the door has been opened to coordinate Medicare payments and TRICARE by the coordination of their benefits in TRICARE for Life this would be a coordination that should make sense for all three Departments and would most importantly, improve the treatment of many beneficiaries.

When looking far into the future we can see coordinated networks for a region’s Military Treatment Facility (MTF), its Veterans Integrated Service Network (VISN) and the civilian TRICARE contractor. This would actively use the VA as a provider of specialty health care, save money for DOD and plan a core of coordinated services A test program in the Central TRICARE region called the Central Regional Federal Health Care Alliance has just been rolled out to look at, and coordinate areas of practice including possibly: "catastrophic case management, telemedicine, radiology, mental health, data and information systems, prime vendor contracting, joint provider contracting, joint administration processes and services and education and training." The governing board’s members of this experiment include DOD’s Lead Agent for the Region, VA’s VISN Director and the president and CEO of the Region’s TRICARE Contractor. If this plan succeeds in improving the health care of the beneficiaries and, hopefully, saving money for the taxpayers perhaps its form can be transported or modified for other regions.

An area that DOD/DVA sharing advocates can presently point to with pride is shared or contiguous sites. Where geography and planning allow these have been very helpful. When looking into the future we must consider these and any future projects

when considering BRAC and CARES closings. A major investment of time and money should not be made in an area where changes may quickly make the institution obsolete.

It is clear that there are areas of management, purchasing, providing of health care and administrative efficiencies where coordination of the practices of DOD and the DVA Health programs could yield huge benefits for the beneficiaries and the Departments. But such coordination must be instituted with caution; with an eye to the different missions of the two institutions, the differences of the two populations being served and the acknowledgment that changing the path of an air craft carrier is a much more delicate task than it first might appear to be.

Biography of Deirdre Parke Holleman, Esq.
Deputy Legislative Director
The Retired Enlisted Association (TREA)

Deirdre Parke Holleman, Esq. Is the Deputy Legislative Director of the The Retired Enlisted Association. She is responsible for TREA’s legislative agenda health care and survivor issues. Additionally she serves on the Department of Defense’s Oversight Advisory Committee for Chiropractic Health Care Implementation, The Department of Defenses Working Panel for Implementation of TRICARE for Life and on numerous other committees.

Before joining TREA Mrs. Holleman was the Washington Liaison for The Gold Star Wives of America, Inc. In that capacity she represented GSW’s concerns and legislative goals before Congress the Administration, the VA and to fellow Veteran Service Organizations.

Mrs. Holleman is an attorney licensed to practice in the State of New York and before all Federal District Courts, the Second Circuit Court of Appeals and the United States Supreme Court. She was the Associate Director of The Legal Aid Society of Mid-New York Inc. This independent not-for-profit law office represents the poor in civil matters over nine counties of upstate New York. She has a B.A. in history and journalism from George Washington University and a J.D. from Vanderbilt University School of Law.

She is married to Christopher Holleman, an Administrative Judge for the U.S. Small Business Administration

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