At stake is the care for more than 9 million people—roughly the size of the Obamacare individual market; a huge bump in potential business for almost half a million community providers who already contract for veterans care despite complaints that payments come in slowly or not at all; and tighter oversight of the two private payers, Health Net Federal and TriWest, who run the private networks for all eligible veterans. (Health Net's contract will not be renewed after September.)
There is also the issue of more than 1,200 VA medical facilities that range from big campuses to small outpatient sites, including never-used and hardly used buildings. Should the government shutter some of these sites, or more efficiently merge public and private systems? And how much of a finite pot of money should be diverted from the VA's own system for the private system?
These questions frustrated Shulkin, the former CEO of Beth Israel Medical Center in New York. Those problems would shift to Jackson—who has little management experience and would face some VA staff members who had been openly defiant of Shulkin.
Jackson's appointment will need Senate confirmation; in the interim, Undersecretary of Defense Robert Wilkie will serve in the post. So Shulkin's firing leaves an immediate vacuum in delicate negotiations that led to clashes within the administration and among lawmakers over the past few months.
The latest partial deal on VA Choice reforms was struck by GOP and Democratic Senate Veterans' Affairs Committee lawmakers, House Veterans Affairs' Committee Republicans, the White House and the VA the weekend before Congress passed its $1.3 trillion omnibus spending plan. House Democrats, including Tim Walz of Minnesota, the ranking Democrat on the chamber's VA committee, uniformly opposed the bill. House Minority Leader Nancy Pelosi (D-Calif.) blocked it from getting included.
The draft text of this compromise, obtained by Modern Healthcare and dated March 18, incorporates demands from the White House and Sen. Jerry Moran (R-Kan.), who was a linchpin in the privatization effort. The bill outlines access standards for VA clinics.
A VA clinic's failure to meet those standards for any veteran would trigger VA Choice eligibility for that patient, who could then seek care from a private provider. The provision was added in a White House and VA draft of the Senate legislation.
The bill also adds a compromise for Democrats and other stakeholders to hold private providers accountable for the same access standards, a Democratic aide said. If private providers can't meet the standards, the VA secretary would have the discretion to end their contracts.
But the language around those standards isn't as strong for the private providers as it is for the VA, because their failure to measure up wouldn't block them from working with veterans.
The White House pushed back on making these same quality standards mandatory for community providers on the grounds that it was unworkable, according to a Democratic aide.
This latest draft—as in previous versions—would streamline all the community care programs under Choice and allow veterans along with their physicians to decide whether to opt for a community provider over the VA. This theoretically opens up Choice for whoever wants a private physician or hospital. The bill also mandated prompt payment to providers—an issue Shulkin said was undermining private networks.
For some stakeholders, this partial deal appeared to be the breakthrough that would make it into law. And they argue that it still could be, even with the potential disruption of the leadership shakeup.
"We have had these discussions for four years," said Carlos Fuentes, who as legislative director for Veterans of Foreign Wars has been involved in the stakeholder discussions. "We know where the administration has been, and where Congress stands. We know where we want the program to go. We almost had the agreement, and there is a framework there for an agreement. We need to continue the momentum so that we can get this done."
A Democratic aide shrugged off the idea that Shulkin's dismissal changes the already-testy Choice negotiations, indicating that for House Democrats at least, the bill on the table isn't acceptable.
"House Democrats' concerns that the package would have dangerously moved closer to VA privatization are the same no matter who is serving as secretary," the aide said.
Another Democratic staffer said the legislation makes an already complex system even more complex administratively, since it adds extra performance demands for VA clinics and myriad ways veterans could qualify for community care that could lead to confusion for patients and administrators.
As stakeholders and lawmakers spoke out about Shulkin's dismissal, they also dug in their heels about the Choice program, signaling that the battle isn't over. "We are hopeful that this change will end the recent distractions at the VA and put the focus back on advancing policy that will ensure veterans get the healthcare and other benefits they have earned," said Dan Caldwell, executive director of Concerned Veterans for America—a group funded by conservative mega-donors Charles and David Koch that has lobbied hard on the Choice issue and had initially backed Moran's proposal. The latest draft legislation has his endorsement.
