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Mr. Brad Jones

Mr. Brad Jones, Chief Operating Officer, Humana Veterans Healthcare Services, Inc.

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Thank you for the opportunity to discuss the Department of Veterans Affairs’ (VA) Fee care process, which allows eligible Veterans to receive medical care in the community when VA determines that care is not available at VA facilities.  Humana Veterans is proud to be partnered with VA to provide healthcare services and care coordination to Veterans authorized to access care in their community designed to supplement the care received in the VA healthcare system.

Humana Veterans Healthcare Services, Inc. (Humana Veterans), a Humana Government Business subsidiary, has contracts with VA to provide quality healthcare through two congressionally-mandated pilot programs -- Project HERO (Healthcare Effectiveness through Resource Optimization) in VISNs 8, 16, 20, and 23 and Project ARCH (Access Received Closer to Home) in Farmville, VA, Pratt, KS, Flagstaff, AZ, and Billings, MT.  In both of these pilot programs, Humana Veterans provides access to a competitively priced network of physicians, institutions and ancillary providers who adhere to high quality and access to care standards.  To date, we have served 163,951 Veterans making 300,930 patient visits through HERO and ARCH, with an untapped capacity to serve more Veterans including those who have mental healthcare needs and who live in rural communities.  In addition, through our subsidiary company Valor Healthcare, we operate 21 Joint Commission certified VA Community Based Outpatient Clinics (CBOCs) across the country that serve more than 58,000 Veterans, accommodating over 100,000 patient visits on an annual basis with services ranging widely from primary care to counseling and group therapy.  

With our extensive experience in helping Veterans receive timely, quality, and appropriate care in the community, we have a unique perspective on the core program elements that are essential to ensuring that Veterans receive these services through a Veteran-centric care coordination program.  This is the essence of the congressionally mandated and VA-designed HERO pilot.  In a care coordinated program like HERO where community providers are an extension of VA’s healthcare system, the Veteran never leaves the VA system and just receives one or more episodes of care from community providers.  The community partner, in this case Humana Veterans, returns the clinical information to VA and manages all the administrative components of the process, such as billing and appointment-making.  By keeping these insurance-like, administrative tasks outside of VA, the Department can concentrate on what they do best –deliver world class healthcare to our Nation’s Veterans.  Through our work in HERO, we have proven the hypothesis that a national healthcare administrative services provider can deliver timely and quality specialty care with significant cost savings.  VA’s annual report on Project HERO for FY 2010 stated that VA saved $16 million in the four piloted VISNs.  That savings figure becomes even more impressive considering the fact that only 11% of the total non-VA outpatient visits in the pilot VISNs went to Project HERO during that time period.  Extrapolating the savings across total number of non-VA outpatient visits suggests that VA could have saved $142 million that year in those four VISNs if HERO were fully implemented.  The estimated 950,000 Veterans who were authorized for and received care in the legacy Fee process last year would have been better served under a contract care program with a strong care coordination element, such as the tried and tested HERO pilot program that can be implemented nation-wide.  The additional bonus would be that these Veterans would remain connected to VA because in HERO, the Veteran’s care is coordinated and the clinical information from the Fee treatment is returned to VA.

VA’s Fee Process Challenges

The current Fee process is not integrated with VA’s healthcare delivery system and there is no coordination or care management of Veterans with Fee care authorizations.  This is a fundamental flaw of the Fee process; moreover, the importance of care coordination in healthcare has been widely documented and has a broad base of support.  For example, the National Quality Forum (NQF), a non-profit organization dedicated to improving healthcare quality, has stated the following:

“Care coordination is a vital aspect of health and healthcare services.  When care is

poorly coordinated- with inaccurate transmission of information, inadequate

communication, and inappropriate follow-up care- patients who see multiple physicians

and care providers face medication errors, hospital readmissions, and avoidable

emergency department visits.  Healthcare is not currently delivered uniformly in a well-coordinated and efficient manner.”

NQF has also provided a framework for defining care coordination by identifying key domains, which include a healthcare home, proactive plan of care and follow-up, communication, information system and data exchange, and transition of care.[1]

Using this framework, the current Fee process fails Veterans in each of the above domains.  With the exception of Veterans participating in Project HERO and Project ARCH, Veterans are left to navigate a confusing healthcare system on their own and become lost to VA.  VA has no mechanism to track and monitor the care that Veterans receive in the community and there is no guarantee that these Veterans do not lose the quality, safety and other protections that HERO and ARCH provide.  For example, these Veterans may not be seen by credentialed and qualified community providers, clinical information often does not return to the VA in a timely manner, and there is no single point of contact who integrates the care that Veterans receive within and outside of the VA healthcare system.  Without this care coordinator, it is not possible to provide Veterans with the benefits of a proactive plan of care and seamless transition of care between VA and community providers.  In addition, the lack of care coordination hinders VA’s ability to optimize its resources because there can be duplicative and conflicting treatment regimen.  This not only results in wasted resources, but also can cause adverse medical outcomes.  Without the care coordination element, VA is foregoing significant potential savings and cost avoidance from reducing duplicative and conflicting care. 

Another missed opportunity is in the area of claims payment.  At a recent House floor debate in May on H.R. 5854, Military Construction and Veterans Affairs and Related Agencies Appropriations Act of 2013, various members raised serious concerns about past due claims payments from VA and the economic realities that will force community providers to stop serving Veterans without timely payments.  The Fee process not only has issues with delayed payments, but also has major challenges in erroneous payments.  Despite VA’s best efforts to automate the Fee claims process through various pilot programs over the past 10 years, claims are still not automated today and the current manual claims process places VA at high risk for improper payments.  For example, a March 2012 report by the VA Office of Inspector General identified the Fee program’s improper payment rate at 12.4 percent[2], and the Government Accountability Office’s February 2012 report placed the Fee program among the top 10 Federal programs with the highest reported improper payment rates[3].  These findings are consistent in the September 2011 report by the National Academy of Public Administration (NAPA).  The NAPA study also discusses the Fee program’s use of “antiquated systems and technology” and points to private sector payors who provide “much more efficient and accurate claims processing”[4].  Case in point, when VA transferred this function to Humana Veterans for Project HERO, we demonstrated our ability to make timely and accurate payments to our network of providers, which is further explained later in this testimony.

National Contract for Medical and Surgical Services

Over the past five years, the HERO pilot program has proven the hypothesis that a national healthcare administrative services provider can collaborate effectively with VA to deliver results-focused, high quality, and cost-efficient care.  The success of HERO is substantiated by a strong set of performance metrics, which include access to care, quality standards, safety requirements, return of clinical information, and Veteran satisfaction.  News of this success has begun to spread with the demand for the HERO program growing amongst the local VA Medical Centers that fall outside of the pilot locations.  Project HERO has presented this contracted care as an alternative preferred option to the uncoordinated Fee process.  However, based on VA’s presentation to interested contractors, VA is not leveraging the lessons learned from HERO in the planned follow-on HERO program that they are calling Patient Centered Community Care (PCCC).  PCCC, as presented to interested companies by VA, would only create a national contract for a network of providers to deliver medical and surgical services without the critical care coordination elements.  This means that PCCC would be nothing more than a discounted Fee network, with no added benefits for Veterans.

PCCC, while well-intentioned, would significantly limit the contractor’s role to one of establishing and managing a provider network.  Under PCCC, the contractor would not be able to provide the administrative services that exist in the HERO pilot and which were instrumental to the contractor’s care coordination role.  The positive outcomes achieved under the HERO pilot would be eliminated once the contractor no longer has the ability to enforce the VA requirements and quality standards within the community provider network.  Another unintended consequence of removing contractor-provided administrative services is the threat to the contractor’s ability to maintain a provider network that is responsive to VA’s changing needs.  Specifically, the contractor’s ability to guarantee a low no-show rate and make timely, predictable reimbursements were effective incentives.  In exchange for these benefits, the network community providers returned clinical documents on a timely basis and adhered to an extensive list of VA specific requirements that do not exist in the providers’ other patient populations.  Given the on-going challenges VA faces with claims payments and inability to match the low no-show rates that Humana Veterans achieved, network providers will experience an increasing number of missed appointments and delayed and erroneous payments.  In effect, the Department will lose these once valuable incentives that are so critical in driving good behavior and will ultimately result in community providers leaving the network.   There is also the issue of a predictable minimum workload.  VA can analyze data on past authorizations for purchased care to develop a floor for a minimum number of referrals.  This will ensure that VA receives the most advantageous pricing while also having a positive impact on the recruitment and retention of community providers to create a robust network that supplements the VA healthcare system.

Based on VA-provided information, Humana Veterans believes VA is misinterpreting the lessons learned from HERO to create and build new in-house capacity to handle administrative functions associated with the Fee care authorizations, visits and treatment through the Non-VA Care Coordination (NVCC) program.  Instead of leveraging the capacity and expertise that already exists in industry, NVCC will require significant resource investments both in staff and the necessary tools to properly handle the “back-office” administrative functions.  VA’s implementation of NVCC in the 100+ Fee program offices in the field also runs counter to the NAPA recommendation.  Rather than consolidate to no more than 3 to 5 strategically located regional sites, VA is continuing to invest resources to growing the 100+ Fee program offices and is reinforcing NAPA’s message that the “Fee program has grown haphazardly”4.  If PCCC is supposed to be the nationwide follow on to HERO, the administrative functions of the program need to be conducted by the contractor.

Veteran Centric Collaborative Healthcare Program

            Rather than continue down the current path for PCCC and NVCC, there is still time for VA to incorporate the successful elements of HERO to create a Veteran centric collaborative healthcare program. This program should be centered on care coordination and enhanced partnerships with national healthcare administrative services providers that will be fully integrated in the continuum of the VA healthcare system as the Department’s network of community care providers.  Such a program will be a win-win for Veterans and VA.  Veterans will benefit from a fully coordinated and integrated VA healthcare delivery system of VA and community providers, whereas VA will be able to achieve cost-savings by partnering with national healthcare administrative services organizations that have existing systems, tools, and processes in place for efficiently managing Fee related administrative functions.

There are numerous advantages of a Veteran centric collaborative healthcare program for Veterans, as explained below.  Mainly, Veterans for whom VA has authorized community care are guaranteed to receive care from a network of community providers who are fully credentialed and certified so that geographic distance is no longer a barrier to access to care.  For example, through the HERO pilot program, Humana Veterans provides a robust network of about 42,000 providers in the four pilot VISNs with the ability to expand pending increased referrals.  This has made it possible for Veterans to travel a median distance of only 13 miles even though 45 percent of the HERO appointments were in rural or highly rural areas.  Beyond the HERO program requirements, VA could charge the contractor with the responsibility for training the network of community providers on military and Veteran culture where VA provides the training materials and contractors are reimbursed for the training. 

Another key advantage to Veterans is the clinical information exchange, which ensures timely return of clinical decision-making while also minimizing duplicate care and services.  This was demonstrated in the HERO pilot program where Humana Veterans returns 94 percent of clinical information to the VA within 30 days with a median return of 9 days.  In addition, Humana Veterans’ care coordinators help each Veteran in Project HERO navigate the care that they receive in the community.  For example, Humana Veterans assists Veterans in identifying network community providers, scheduling the appointment, and following up to ensure that the Veteran made the doctor’s visit.  As a result, Humana Veterans achieved a no-show rate of 5 percent, which is significantly below the industry average that ranges between 14 percent and 24 percent.  Humana Veterans also provides VA direct access to the Authorization and Consult Tracking (ACT) system, which is our proprietary IT tool for care coordination that allowed VA to track and monitor Veterans with Fee authorizations for the very first time. 

Among the other HERO lessons that should be included in a new Veteran centric collaborative healthcare program is a strong clinical quality management program to respond to patient safety events.  Under Project HERO, Humana Veterans operates a clinical quality management program, which provides a structured way of identifying and addressing possible patient safety events.  Through the clinical quality management program, Humana Veterans reviews all identified potential quality indicators and investigates 100 percent of confirmed quality issues, as well as engages VA in a discussion of outcomes through the jointly operated Patient Safety Peer Review Committee.  Project HERO has also demonstrated the ability to ensure accurate and timely claims payment.  Using our automated claims process and contracted rates that minimize the risk for improper payments, Humana Veterans makes 99 percent of claim payments to our providers within 30 days and maintained an extremely low payment error rate in FY 2011.

The Veteran centric collaborative healthcare program could also go beyond the lessons learned in HERO by requiring a VA-provided and a contractor-provided care coordinator to work together in managing the care that Veterans receive.  Additional program enhancements should focus on eliminating variations, with VA making more consistent determination of non-VA care authorizations for Veterans.  VA should also retain the flexibility to define the standards for referrals and authorizations, as well as retain its “gate-keeper” role.  This means that VA retains the decision-making control of, if and when they use the community provider network as a tool to supplement the care that Veterans receive in VA facilities.   

When VA determines that it is appropriate to send a Veteran to a community provider, there must be accountability established to ensure that the care is arranged through the Veteran centric collaborative healthcare program.  Use of the Project HERO contract was made optional for the participating VA Fee offices, and less than 20% of the total Fee care services in the pilot VISNs went to Project HERO.  Not only was this often confusing for Veterans and community providers, but it resulted in VA not realizing all of the benefits and cost savings that could have been achieved through full implementation of the HERO pilot.  The Veteran centric collaborative healthcare program must be structured to ensure maximum utilization with very limited exceptions by all VA Medical Centers.


            PCCC presents an excellent opportunity to effect positive change in Veterans’ healthcare experience and outcomes.  The inclusion of the above elements of a Veteran centric collaborative healthcare program in PCCC will ensure that Veterans realize all the benefits of care coordination between VA and community providers.  VA has a unique opportunity to expand the HERO program now available to Veterans in only four VISNS to all VISNs.  This would create a truly integrated VA healthcare system that better leverages community healthcare assets if and when VA decides to authorize such care.  If PCCC ends up being a rent-a-network contract or something short of a full care coordination model, it will represent a retreat from the Secretary’s commitment to implement a patient-centered VA healthcare delivery system that includes all VA healthcare for Veterans – both within and outside the walls of the VA.

            Thank you for holding this hearing and tackling this vital issue.  I appreciate the opportunity to share Humana Veterans’ experiences and views with the Subcommittee today, and am happy to answer your questions. 

Brad Jones

Mr. Brad Jones serves as Chief Operating Officer (COO) of Humana Veterans Healthcare Services (Humana Veterans).  As a senior leader at Humana Veterans, he is responsible for the day-to-day operations and the successful execution of all Department of Veterans Affairs contracts including Project HERO, Project ARCH, and over 20 VA Community Based Outpatient Clinics across the country.

After obtaining a Bachelor of Science degree in Computer Science from the University of Kentucky, Brad began a career in the life and health insurance industries that has spanned over 25 years.  From 1986 to 1996, he served as a management information systems professional with both Kentucky Central Life Insurance Co. and Jefferson Pilot Life Insurance Co.  In 1996, Brad was selected to join Humana Military Healthcare Services (Humana Military) where he worked on TRICARE contracts with the Department of Defense.  He was responsible for all electronic healthcare claims initiatives, implementation of Health Insurance Portability and Accountability Act (HIPAA) regulations, as well as direct oversight of provider data management systems.  In October 2007, he was promoted to his current position of COO with Humana Veterans.

Humana Veterans Healthcare Services, Inc., a subsidiary of Humana Government Business, Inc., is currently providing administrative services to the Department of Veterans Affairs under the following contracts:

Project HERO (Healthcare Effectiveness through Resource Optimization), originally awarded in 2007 and currently in the fourth and final option year.  Humana Veterans provides administrative healthcare services to Veterans referred outside of the VA healthcare system for specialty care.

Project ARCH (Access Received Closer to Home), was awarded in 2011.  Services under the contract began on August 29, 2011, and include administrative healthcare services to Veterans who meet certain eligibility criteria and agree to participate in the program.

Valor Healthcare, Inc., a subsidiary of Humana Government Business, Inc., currently operates 21 VA Community Based Outpatient Clinics across the country that provide services ranging widely from primary care to counseling and group therapy.

[1] National Quality Forum, Preferred Practices and Performance Measures for Measuring and Reporting Care Coordination.  October 2010.  Web. 5 Sept. 2012,  <>

[2] VA Office of Inspector General.  Department of Veterans Affairs: Review of VA’s Compliance with the Improper Payments Elimination and Recovery Act. Mar. 14, 2012. Web. 5 Sept. 2012,


[3] U.S. Government Accountability Office.  Improper Payments: Moving Forward with Government-Wide Reduction Strategies.  Feb. 7, 2012.  Web. 5 Sept. 2012 <>

[4] National Academy of Public Administration.  Veterans Health Administration Fee Care Program.  Sept. 2011.  Web. 5 Sept. 2012 <>