Healthcare Business News

Hospitals brace for billing, treatment challenges serving veterans

By Virgil Dickson
Posted: May 28, 2014 - 8:00 pm ET

A new federal policy to refer more veterans for care outside the overwhelmed Veterans Affairs health system could end up straining some non-VA hospitals with lags in reimbursement and patients who have needs that civilian providers aren't accustomed to treating.

Over Memorial Day weekend, the White House and the VA announced that more veterans will be able to use private medical services in order to address long wait times reported in several areas throughout the U.S. In Phoenix, the department's inspector general concluded, in a report issued Wednesday, that 1,700 veterans in need of care were kept off the facility's official wait list and the average wait time was 115 days, although VA guidelines say veterans should get appointments within 14 days of the date they ask to be seen.

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Under the Accelerating Care Initiative, VA facilities must offer a referral to an outside provider if they don't have the capacity to give an earlier appointment to any new patient who is on a wait list or has a visit scheduled more than 30 days out.

The first referrals are expected May 30, according to a fact sheet (PDF) on the new policy. The VA believes it will take up to 90 days to fully implement the policy, which is expected to become permanent. Veterans will only be able to seek care at private clinics and hospitals in areas where the department's capacity to expand is limited. The VA did not provide an estimate of how many patients might be referred under the policy.

The VA typically has only reimbursed providers outside the system for emergency care and for veterans who live in rural areas without access to a VA facility. The system also has sometimes granted specific requests to see private providers. In fiscal 2013, the VA paid for such care for 1 million veterans at a cost of $4.8 billion, approximately 10% of the agency's budget.

Associations representing hospitals in states with large veteran populations said they are concerned about the prospect of getting claims paid by the veterans system. Weeks before the first allegations of long waits and deaths made headlines, the U.S. Government Accountability Office released a report (PDF) detailing instances of claims from non-VA hospitals that were wrongly denied because of poor administrative processes.

“We found that VA lacks sufficient oversight mechanisms and data to ensure that VA facilities do not inappropriately deny claims,” the report read. When private hospitals were not reimbursed by the VA, they billed veterans directly, the GAO said.

“Because our hospitals have historically experienced challenges with timely reimbursement for VA patients, we are awaiting further information from our federal partners as to any modifications to payment policies associated with this weekend's announcement,” said Julie Henry, a spokeswoman at the North Carolina Hospital Association. The VA estimates that North Carolina is home to as many as 950,000 veterans.

Similar concerns were raised in Michigan, where the VA estimates just under a million veterans reside. “Michigan hospitals operate on tight operating margins—3.4% on average in fiscal year 2012 compared to 6.5% average operating margin at hospitals nationwide—so slow reimbursement can add to the financial burdens hospitals endure,” said Laura Appel, vice president for federal policy and advocacy for the Michigan Health & Hospital Association.

Both groups were quick to add that their member hospitals will treat anyone who comes through their doors, regardless of ability to pay.

Another concern raised by the policy shift is the prospect of having civilian providers treat patients for conditions such as exposure to Agent Orange, Gulf War syndrome and combat-related post-traumatic stress disorder.

“There can be a lack of understanding of veteran culture and how they can experience something like PTSD differently from other patients,” said Dr. Craig Bryan, Director of the National Center for Veterans Studies in Salt Lake City at the University of Utah. “This could lead to many servicemen who seek out care to drop out of treatment prematurely.”

But Terri Tanielian, a senior social research analyst at RAND who specializes in military and veterans health policy, countered that treating these service-related conditions should be no different from handling other rare injuries and diseases.

The response from veteran organizations has been mixed.

“If implemented properly, and assuming the management at the VA medical-center level in the field do what they have been instructed to do by VA central office, this could certainly help alleviate some of the access concerns,” said Carl Blake, acting associate executive director of government relations at Paralyzed Veterans of America.

Others, though, said the policy can't fully address the challenges veterans face getting access to care.

“The fact is, private care has waiting lists, too,” said Joe Davis, public affairs director for Veterans of Foreign Wars. “You just don't hear about them because civilian hospitals either don't track or don't report them. When was the last time you had or ever had a same-day appointment?”

Follow Virgil Dickson on Twitter: @MHvdickson

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