New VA community care program regs stall at OMB over cost

The Veterans Affairs Department's newly expanded and consolidated private healthcare network for veterans could cost billions more than Congress projected when it passed the VA Mission Act.

This potentially major extra cost of $5 billion to $8 billion comes with the not-yet-finalized and not-yet-public draft regulations that will likely shape the VA's community health program into a model similar to TriCare Prime, according to sources familiar to talks. TriCare Prime is the managed-care HMO plan for active service military that pays drastically low rates for treatment in private clinics and hospitals but also offers care in military health facilities.

The size of this new cost projection is delaying the VA's proposed model at the White House Office of Management and Budget, where officials are evaluating the draft regulations, said a source close to the discussions.

VA spokesman Curt Cashour did not confirm the new VA community care program will follow TriCare's HMO model. But at a congressional briefing in late December—a few months after lawmakers expected updates on how the new program was shaping up—VA Secretary Robert Wilkie mentioned he was looking at TriCare and Medicare standards as the barometer for when a veteran can leave the VA for treatment.

The measures for this threshold are called "designated access standards," and they were a bitter point of contention during last year's legislative negotiations of the VA Mission Act.

For some Democrats, the White House's fight to make these standards stricter raised the specter of privatization and concerns in a November analysis that the new law could trigger a widespread shift to community hospitals and clinics and lead to a funding trim for the VA.

But for Rep. Phil Roe (R-Tenn.), who chaired the House Veterans Affairs Committee before his party lost control of the chamber, the models under consideration shouldn't be seen as a surprise—although he offered the caveat that he doesn't know what the Trump administration is finalizing.

"I think that those VA standards will look similar to TriCare or Medicare because that's what people are used to—it's what doctors are used to—right now," he told Modern Healthcare. "Why wouldn't they be similar?"

But as predicted by the policymakers and staff who wrangled over just how prescriptive they should be when writing the access standards in law, the Trump administration's regulatory process is raising hackles. Democratic members, who are wary of money being directed to the private healthcare sector out of VA hospitals and clinics, complain the Trump administration is keeping them in the dark. They are chafing for detailed updates that they expected months ago about the draft regulations.

At the December briefing, Sen. Bernie Sanders (I-Vt.), who voted against the VA Mission Act, accused the administration of "dismembering" the VA through the law.

Some staff and lawmakers have reported rumors that President Donald Trump will unveil the draft access standards later this month during his State of the Union address. By law, they need to be published in March.

Cashour repeated what Wilkie told lawmakers in December: He will brief Congress when the access standards are ready.

New House VA Committee Chair Mark Takano (D-Calif.) said it's not the care models the VA is considering that concern him so much as the closed-door nature of the work.

"It's the behavior of the department and the way they've interacted with my staff" and the veterans service organizations that are concerning, he told Modern Healthcare.

He framed the VA Mission Act as a "collaborative process" among all the stakeholders that now has stalled in the executive branch.

"I'm interested to know who is in charge," he added.

Still others are criticizing the proposed model itself.

"Our concern is that VA may rush to adopt access standards that are based on other systems, rather than developing standards tailored to its unique system," said Carlos Fuentes, a lobbyist for the Veterans of Foreign Wars. TriCare and Medicare, he added, "serve a different population in different ways."

One Democratic aide on Capitol Hill said that based on VA official briefings it seems the program's scope is much broader than Democratic staff anticipated when negotiating the bill, as it contains many triggers that would send a veteran out to the community for any reason.

"That's where the concern is," the staffer said.

TriCare Prime's access standards include 24 hours or less wait time for urgent care, seven days or less wait time for routine care and four weeks or less for specialty and preventive care.

Dan Caldwell of Concerned Veterans for America, the Koch brothers network group instrumental in crafting the Mission Act, shrugged off the latter critiques and said the new law shouldn't be framed as privatization. The VA health system will remain in place, he said.

"The VA has been shifting more care into the community for years," Caldwell said. "The way the Mission Act was written, that it would open up more care in the community for veterans, shouldn't surprise anyone."

About one-third of the VA health system's medical appointments are already outside the VA.

But Caldwell admitted the cost issue worries him, largely because Congress hasn't been willing to control spending when it comes to the VA health system. He wants the VA to prescribe a "money follows the person" model that doesn't double up on funding for the both private sector and the VA—the kind of proposal that puts lawmakers like Sanders on edge.

In a November analysis, the Congressional Budget Office reported that since 2000 the VA's health spending has nearly tripled, far outpacing the rate of inflation, even as the total veteran population has declined.

In 2000 VA healthcare spending was about $64 billion. By 2017 it was $180 billion. Per-person spending climbed from $5,300 to $7,600.

Caldwell argued that Congress' 2017 decision to make the VA primarily responsible for paying for treatment of conditions not related to a veteran's combat service also seems to have spiked the department's overall costs. He said the VA has trouble collecting reimbursements from the private insurers, and nearly 60% of current VA system patients don't have a disability from their time in service.

The CBO and policymakers have eyed ways to manage similar spending concerns within TriCare Prime, where about 70% of enrollees get care from the private sector, according to one military healthcare lobbyist. About 4.6 million people are enrolled in TriCare Prime.

The Senate proposed in last year's National Defense Authorization Act to hike enrollment fees and deductibles for TriCare Prime and TriCare Select, another contiguous program, but military lobbyist groups blocked the measure from being included in the final House and Senate version.

Correction: Carlos Fuentes is a lobbyist for the Veterans of Foreign Wars. An earlier version of this story misstated his position.