Gregg Pane’s testimony to the House Subcommittee on Health, Committee on Veterans’ Affairs

Gregg A. Pane is an Academy Fellow, click here for his bio.

BACKGROUND
The Veterans Health Administration (VHA) provides the majority of medical care services to eligible veterans with Department of Veterans Affairs (VA) assets. In some instances, however, VHA procures the services of health care providers outside of the VA health care system. These services are referred to as “Fee Basis Care” or “Fee Care.”

Fee Care is typically utilized when a clinical service cannot be provided by a VA Medical Center (VAMC), when a veteran is unable to access VA health care facilities due to geographic inaccessibility, or in emergencies when delays could lead to life-threatening situations. In recent years, Fee Care has been increasingly used to meet patient wait-time standards.

VA’s Fee Care Program expenditures have grown 275 percent since Fiscal Year (FY) 2005. At the time the study was conducted there were approximately 2400 Full Time Employees (FTEs) working in the program. Paid claims rose from $3 billion in FY 2008 to $4.4 billion in FY 2010 (46 percent increase), while the number of unique patients served increased from 820,000 to 952,000 (16 percent) in the same period.

In 2009 and 2010, the VA Office of Inspector General (OIG) reported on significant problems with the accuracy and efficiency of claims paid in the Fee Care Program.  The VA OIG reported that VAMCs made hundreds of millions of dollars in improper payments—including duplicate payments and incorrect amounts, both under- and over-payments—because VHA had not established adequate organizational management structures and processes. The OIG audit report also included a recommendation that VHA evaluate alternative organizational models and payment processing options to identify mechanisms to improve payment processing costs and timeliness. This recommendation provided a primary impetus for this study.

As part of its strategy to improve payments in this Non-VA Care (Fee) Program, VA contracted with the National Academy of Public Administration to conduct an independent assessment of the program, with the intent of providing VHA with options on the most efficient model(s) for its future state.

For written transcript, please click here

For the webcast, please click here