Healthcare Business News

House bill would block bonuses for poorly performing VA docs

By Virgil Dickson
Posted: May 29, 2014 - 7:15 pm ET

Responding to the growing Veterans Affairs waiting list scandal, more than a dozen Democrats have turned their backs on their union allies to push a bill that would block performance bonuses for VA physicians and dentists who provide low quality care.

The new performance bonus system, contained in a bill introduced in early April by Rep. Mike Michaud (D-Maine), ranking member of the House Veterans Affairs Committee, and co-sponsored by 13 other Democrats, would explicitly evaluate providers on whether they improved healthcare outcomes and their overall effectiveness in providing quality services.

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Separately, the bill would create an appraisal system for senior VA executives that could trigger employment termination if they received two consecutive bad annual appraisals. The impetus for HR 4399 was reports of long waits for care at VA facilities and allegations of unnecessary deaths that occurred as a result.

The legislation was slated to reach floor of the Republican-controlled House this week. However, those plans were put on hold because the House was tied up with various appropriation bills, according to Dan Rafter, Michaud's spokesman. The congressman is hopeful the bill will come to the floor after next week's recess.

The bill came under fire this week from the American Federation of Government Employees, which represents some VA physicians and dentists. The union said it was inappropriate to evaluate front-line clinicians providing direct care to veterans using performance measures intended for managers, who are responsible for organizationwide outcomes.

“Not only is the use of management performance measures demoralizing to the front-line physician struggling with burgeoning patient panels and exhausting work schedules, but VA's use of improper performance measures represents a missed opportunity to drive improvements to patient care,” said J. David Cox Sr., AFGE president.

But a rival association supports legislation that would reform the VA's physician appraisal system. Dr. Samuel Spagnolo, president of the National Association of Veterans Affairs Physicians & Dentists, said the VA needs a universal appraisal system, not one that differs from hospital to hospital. His group supports eliminating performance pay for physicians who provide poor quality care.

The legislation creates three levels for ranking VA physicians and dentists: performing at a fully successful level, a minimally satisfactory level or an unsatisfactory level. Providers would receive a new assessment each year and would be offered a chance to appeal if they disagree with their rating.

Only those who received a “fully successful” level of performance in their most recent appraisal would get performance-based pay.

In 2011, about 80% of the department's nearly 22,500 providers received performance pay, according to the Government Accountability Office. Overall, the agency shelled out $150 million to physicians and dentists in performance pay that year.

Michaud's legislation comes nearly a year after the GAO criticized the VA for having a vague appraisal system that results in providers getting extra pay without a clear reason.

In cases uncovered by the federal watchdog agency, physicians received bonuses of at least $7,500 even though the VA had disciplined them for errors ranging from failing to read mammograms and other complex images competently, practicing without a current license and leaving residents unsupervised during surgery.

“VA officials responsible for writing the policy told us that the purpose of performance pay is to improve healthcare outcomes and quality, but this is not specified in the policy,” the GAO report says. “Moreover, the Veterans Health Administration has not reviewed the goals set by medical centers and networks and therefore does not have reasonable assurance that the goals make a clear link between performance pay and providers' performance.”

The scheduled House vote, now postponed until after next week's recess, came just a few days after Michaud, implying he was growing impatient with waiting for Congress to act on his bill, called on President Barack Obama to issue an executive order implementing the revised performance pay system in HR 4399.

Follow Virgil Dickson on Twitter: @MHvdickson

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