VA proposes value-based payments for private veterans' care

Changes would require congressional approval

See the Advisory Board's take on this story.

The Department of Veterans Affairs (VA) on Wednesday proposed measures to improve the VA Choice Card program, which aims to help veterans access care more quickly through private providers.

The changes would require congressional approval.

The Choice Card program, implemented under last year's VA reform law, allows veterans to receive federally subsidized care from outside providers if they have been waiting more than 30 days for a VA health care appointment or if they live 40 miles or farther from a VA facility.

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Proposed reforms

During a House Committee on Veterans' Affairs hearing, VA Deputy Secretary Sloan Gibson proposed changes to improve the Choice program by:

  • Clarifying the program's eligibility criteria;
  • Creating a "high-performing network" of private providers who work with VA;
  • Improving how VA shares medical records with outside providers; and
  • Streamlining payment protocols.

VA officials also proposed consolidating seven community care programs into one program with standard eligibility rules and provider payment methods.

Under the plan, VA would adopt Medicare payment rates for private providers for services covered by Medicare. In instances when services are not covered by Medicare, VA would negotiate the payment rates.

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In addition, VA would gradually transition its system toward value-based payments for private providers. Under the initiative, VA would assess private providers' quality and performance. High-performing providers could qualify for higher reimbursement rates, while lower-performing providers could be dropped from VA's network of eligible providers. 

"We want an integrated network," VA Secretary Robert McDonald told the Washington Post's "Federal Eye. "We want the very best providers connected with us. This is a big deal, and it will be a big improvement over what we have now."

VA estimated that the overhaul would cost between $1.2 billion and $2.4 billion during each of the plan's first three years, and requested $421 million for fiscal year 2016 to revamp its internal computer systems to improve coordination with outside providers.

Democratic and Republican committee members appeared to be receptive to VA's plan, Patricia Kime reports for the Military Times. However, lawmakers expressed concern about the cost of the proposal  (Muchmore, Modern Healthcare, 11/18; Shastry, Washington Times, 11/18; Rein, "Federal Eye," Washington Post, 11/18 [1]; Rein, "Federal Eye," Washington Post, 11/18 [2]; Kime, Military Times, 11/18).

The Advisory Board's take

Eric Cragun, Senior Director, Health Policy

As we've seen across the industry, providers’ efforts to improve care delivery become more sustainable and feasible as more payers adopt and align value-based models. Utilizing value-based models for VA patients would could compliment incentives that Medicare and other payers are putting in place—once again emphasizing the rationale for providers to focus on delivering high-quality, low-cost care.

One of the things we hear from providers is the importance of synchronizing incentives, along with the quality measures required under the new payment models. The extent to which VA is able to align its measures of value with other payers’ measures could ease any administrative burden that providers face under the proposed VA program. That, in turn, may affect providers’ willingness to participate.

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