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Witness Testimony of Mr. Shane Barker, Senior Legislative Associate, Veterans of Foreign Wars of the United States

Madam Chairwoman, Ranking Member Michaud and Members of this committee, on behalf of the more than 2 million members of the Veterans of Foreign Wars of the United States (VFW) and our Auxiliaries, I would like to thank you for the opportunity to present our views on the Fee Care Program. 

The VFW is very appreciative of the efforts made by this Subcommittee to better understand and address a persistent, growing challenge for VA.  Your interest in this issue is critical to affecting positive change as we enter into a pivotal time in the life of the Fee Basis Program.  Our veterans are from all walks of life and live in urban and rural areas.  Some live in what we describe as highly rural areas, and their access to care is limited as a result.  VA has for decades operated the Fee Basis Program to meet their needs by allowing them to utilize civilian doctors as part of the care VA provides.  I would like to take this opportunity to identify some shortcomings of that program, and how we can address them to both save money and enhance the quality of care we provide.

We have no shortage of evidence to convince us that change is necessary.  Between Fiscal Year (FY) 2005 and FY 2011, overall costs for the Fee program increased nearly 200%, from $1.6 billion to nearly $3.9 billion per year.  During this same period the population size rose 95%, adding nearly 400,000 patients to the program and bringing the total to 893,421 unique veterans.  However, VA constrained overall cost per unique veteran to 33%.  During that time, it rose from $3,246 to $4,331 per year.  For all the cost increases and more veterans utilizing the program, care is not coordinated between the private sector and VA in the traditional Fee program.  Because of inadequate technology and an aversion to change that persisted within VA for years, VA did not consider this a priority.  We hope that sentiment is changing, and are hopeful about the direction in which VA seems to be heading. 

As we face the reality of fiscal restraint, cost increases of this magnitude rightfully cause us to pay attention and work to enhance the performance of this program.  The VFW is convinced that it can be done, and we want to be a part of the solution.  This committee obviously understands the need to restrain unnecessary growth in the Fee program to ensure the program survives over the long-term, and we appreciate your efforts to put it on a more solid footing.

Fee Basis Care was created to ensure that a civilian doctor is meeting the needs of veterans when VA is unable to meet the demand.  It has been in place to meet the needs of eligible veterans for decades, ensuring that those who live great distances away from a VA medical facility or require non-VA provided specialty care are granted care through a civilian doctor closer to home.  VA is mandated to consider allowing a veteran to use the Fee program based on distance from VA facilities, their portfolio of services, wait-times, and the availability of the specific doctors and treatments a veteran requires.  Obviously, this function is a necessary and inextricable part of VA’s mission.  VA’s ability to decide when a veteran should be able to utilize the Fee program is an inherent strength of the program, and the VFW strongly believes that VA must retain absolute responsibility for their patients when they receive care in the private sector.  There are many implications that emanate from this conviction that VA retain ultimate control for every veteran they send into the private sector, and VA bears the burden of responsibility for their well-being regardless of where they seek treatment.

The shortcomings of the Fee Basis program were painstakingly detailed in a September 2011 report of the National Academy of Public Administration (NAPA).  The report paints a stark picture of the current state of the program, and validates many of our long-standing concerns with the lack of care coordination and spending controls.  Of their many specific and disconcerting findings, the totality of the situation led NAPA to find that VA is utterly lacking in the ability to discern the return on investment for the program.  There is not one single factor that would lead NAPA to make such a serious claim; rather, the numerous inefficiencies taken as a whole are the culprit.

Administration from VA Central Office

The Fee program is orchestrated from the Chief Business Office (CBO) in VA Central Office (VACO).  However, their influence over how the program is operated at lower levels in the system is limited.  CBO enjoys limited cooperation with the field.  CBO gathers no standard performance metrics, has no mechanism to receive documentation from providers, and does not validate credentialing of private physicians.  CBO has no way to verify that billed services have been rendered, and far too often pays rates that are far too high for billed services.  VACO also does not audit how Fee Basis dollars are spent at the local level.  To our knowledge, they do not conduct the oversight needed to analyze when the Fee program operates within budget, and when available funds are exhausted earlier than expected. 

NAPA recommended consolidating the authorization and claims processing function of the 100 plus Fee Basis program offices nationwide, eliminating the vast majority and creating a regional system of three to five sites.  They make clear in their report that this change would not centralize clinical decisions or leave them to the bureaucracy.  Clinical decisions would still be made by medical staff.  The VFW believes this recommendation makes sense.  However, in considering such change, the VFW hopes the committee will be mindful that the lack of a comprehensive IT solution may complicate a regional approach to administering the Fee program.

Technological Limitations

For years VA has relied upon antiquated technologies that are simply out of step with the private sector and among other federal agencies such as the Center for Medicare and Medicaid Services (CMS). Policymakers in the Chief Business Office have very limited access to clinical data from veterans episodes of care in the civilian sector.  This is an enormous disadvantage that directly impacts the quality of care for veterans.  It slows down civilian and VA doctors by eating away at their time and making decisions more complicated.  It also hinders VA’s ability to detect and prevent improper payments, creating an environment that is susceptible to waste, fraud and abuse.

The Fee program does not have the ability to broadly automate incoming or outgoing bills or payments. By way of comparison, the Department of Defense (DoD) aggressively pursues automation wherever possible.  They are currently contracting with Wisconsin Physician Services (WPS) through the TRICARE Management Activity (TMA) to process the vast majority of their claims.  In doing so, TMA saves both time and money for DoD, allowing that department to focus on core competencies.  We believe it is time for VA to consider what they can do to bring their operations in line with industry standards and generate dollars through such efficiencies. 

To their credit, VA is working to resolve many of these issues.  VA has openly acknowledged the shortcomings and failures in their IT infrastructure, and it is our understanding that VA has been working to affect change at many levels – including within the acquisition process.  VA’s Office of Information & Technology (OI&T) seems to be adopting a more modern and lean process to build the IT systems needed to coordinate and provide care in today’s complex healthcare infrastructure.  Changes like the implementation of agile systems development hold the promise of faster, cheaper, more usable software solutions.  Though we have seen some evidence of success at VA, it is just a start.  VA is working on a common platform to provide civilian doctors with an easy way to provide CBO with searchable clinical data from visits resulting from using the Fee program.  Though we do not know the development and implementation timeline, the possibility of providing doctors with an IT solution that gives VA the information they need – and is quick and easy enough for doctors to use without unnecessary burden – holds great promise.  The VFW will continue to closely monitor the development of IT projects underway. 

The Question of Contracted Care

Over the years, VFW has heard many stories of veterans who enter into the Fee program, only to be confused and disappointed by the experience.  What should be an easy and convenient alternative to direct care for veterans often leaves them feeling detached from VA.  The reasons are clear: VA does not reach back to the veteran to gauge their satisfaction with episodes of care in the civilian sector; veterans are left to make their own appointments, completely independent of any VA facilitation; and they are sometimes responsible for getting patient records to VA from their civilian providers when possible.  Once they enter the Fee program, they have little contact with VA, and are given no direction from them. 

Congress attempted to address this issue in 2005 with the ongoing Project on Healthcare Effectiveness through Resource Optimization (Project HERO) pilot program.  To date, it is VA’s single foray into the business of contracting for the provision of private care to veterans, and it has achieved generally positive results.  We all know that the 5-year pilot program had a rough start.  However, VA responded to the concerns of the Veteran Service Organization (VSO) community and the program is drawing to a close with a successful record.  It regularly met quality measures outlined by VA, while also saving money.  For this and other reasons, the VFW is concerned it may be ending too soon. 

Project HERO is still meeting VA requirements for customer satisfaction and distance metrics.  The data shows they have greatly reduced missed appointments through regular communication with patients, providing them with timely reminders.  Because VA gets clinical notes from providers Humana has contracted with for Project HERO, care is being coordinated properly.  VA can be certain of this because they regularly receive all the metrics they have asked for from their remaining contracted partner, Humana Veterans Healthcare Services, Inc.  Unfortunately, the traditional Fee Basis program provides no such metrics. 

One benefit of coordinated care has been the elimination of many duplicative services.  As a result, VA has saved money even though referrals into the program were low throughout the life of the program.  In addition, VA doctors have the requisite information to bring veterans back to VA when it was in the best interest of the veteran.  Humana’s contract was extended beyond the planned termination date until March 31, 2013 to allow for more time to transition out of Project HERO and to prevent veterans using current Project HERO providers from any interruption of service.  It should be noted that VA still plans to end the contract with Delta Dental, their other partner in Project HERO, on the original contract termination date of September 30, 2012.

Meanwhile, VA has been working on their plan to replace Project HERO with a permanent program, known as Patient-Centered Community Care (PCCC) for some time.  This program was designed to incorporate the lessons learned over the past five years working on Project HERO alongside Humana and Delta Dental.  To the best of our knowledge, this program is being crafted to allow VA Central Office to establish numerous contracts for coordinating timely and high-quality care that could comprise both VA and non-VA providers at the discretion of VA clinicians.  Veterans would have to be referred into PCCC by a VA physician, thereby ensuring the decision to send a veteran into these contracted networks would be maintained in-house.  VA doctors would also have the benefit of detailed clinical notes from each patient visit in the network, and thus would be far better equipped to make a decision to transfer to a different provider or bring a veteran back into VA care based on clinical data.  VA would coordinate the care for these veterans through the Patient-Aligned Care Teams, in cooperation with a care coordinator working for the PCCC contracted network provider.  Doctors would potentially have the latitude to treat one condition in a VA setting, while allowing the veteran to remain in PCCC for other conditions.  For example, a female veteran with PTSD could be sent into the network for maternity care, while continuing to visit the VA clinicians she has already bonded with at her VA facility. 

According to VA, initial market research began in November 2010.  In June 2011, PCCC became an official program through an Executive Decision Memorandum of the National Leadership Council.  In the closing months of 2011, VA released a Request for Information (ROI) and held three “industry days” to allow companies to dialogue with VA on a one-on-one basis.

Since then, VA has worked to prepare the Request for Proposals (RFP) and had intended to release it last month.  Because of various delays, we now expect the RFP to be released in November 2012.  The VFW looks forward to the release, as it should answer many remaining questions about PCCC.  So far, we have learned that PCCC is projected to include five regions, which we assume will be managed by different contractors.  We have learned that contract care provided through PCCC will be prioritized over other avenues of non-VA care; a departure from Project HERO, as it was given a low priority when being considered for Fee Basis services.  Unfortunately, the issue of mental health services being included in PCCC is still an open question.  The November 2, 2011 RFI regarding PCCC explicitly stated that mental health would not be included.  However, this committee and VA are now assuring us that mental health will be a part of PCCC.  We hope that the RFP will make VA’s intentions clear. 

The contract award for PCCC is scheduled for March 2013, barely six months from now.  Project HERO – a relatively small pilot program that got off to a slow start – is scheduled to end the same month.  The VFW is concerned about a possible service gap between the end of Project HERO and the indeterminable point in the future when PCCC can serve veterans at full capacity.  The VFW believes extending Project HERO for six months was the right thing to do.  We also believe that they should extend Project HERO until contracts under PCCC are mature enough to handle the full caseload for every veteran in the program with a fully capable nationwide network of all contracted services.  It is unfair to our veterans to give them a cold handoff from Project HERO to PCCC.  Though we are confident VA would do all they can to ensure a smooth transition, they deserve someone on the civilian side of the equation as well. 

VA’s Plan to Improve Internal Shortcomings in the Fee Basis Program

The VFW believes VA is finally taking the shortcomings in the traditional Fee Basis Program seriously.  Since the release of the 2011 NAPA report, VA has initiated an ambitious plan to meet many of the NAPA recommendations by significantly overhauling referral management processes.  The initiative, known as Non-VA Care Coordination, (NVCC) seeks to establish end-to-end documentation for patients admitted to civilian facilities.  If properly implemented, NVCC will also standardize all business rules to document the reasons for using the Fee program, thereby facilitating administrative and clinical reviews of such decisions.  It is designed to establish a system-wide practice that will avail veterans to all internal services, such as sharing agreements with DoD and university affiliates before being referred into the Fee program.  NVCC is intended to decrease missed appointments by engaging veterans in the appointment management process, and will also move VA to a system of form templates to smooth out the paperwork and create a database that is searchable.  A fully implemented NVCC program would also notify patients when Fee Basis – or non-VA, as it is now referred to – care is available to them.  Through bulk purchasing of care, NVCC will hopefully save money and standardize the care provided across the country, leading to better outcomes for veterans and metrics for VA to use for continuous improvement of the program. 

The VFW will be watching how NVCC is implemented, both at Central Office and across the country.  We believe it is vitally important that such an ambitious program not reside solely within VA Central Office.  It must be implemented at the local level, even if the up-front costs are high.  We must not allow more failings at VA because of low morale or a culture of indifference.  The changes envisioned must take effect.  Today, NVCC stands as the best vehicle for these changes to take place, and we fully support the stated goals of the program.  

VA has a tall order ahead.  PCCC must retain the successes of Project HERO, and NVCC must fix the internal shortcomings of the traditional Fee program.  None of these changes will succeed without leadership.  In the end, it always comes back to leadership.  Leaders at the highest levels of VA must commit themselves to a coherent and sensible approach that meets each of these objectives.  Policies that are made must be clear, comprehensive and must be enforced at all levels within VA.  Solutions must leverage the best practices in program management, design and information technology.  Any long-term success must also include cultivating relationships with a number of entities in the private sector that believe VA is a capable and responsible partner.

The VFW believes these shortcomings represent a clear-cut opportunity to fix a badly broken system, and we are confident that veterans can receive better quality of care with greater coordination at a lower cost.  With that in mind, the VFW hopes this committee will take a holistic approach to fixing the Fee program.  Each circumstance that we resolve creates opportunity, and a systematic fix has the potential to both save a considerable amount of money and improve the quality of care for veterans using the program. 

Madam Chairwoman, this concludes my statement.  I am pleased to address any questions you or other members of the committee may have.