Family Physicians Unlikely to Participate Without Rate Increases

By Brenda L. Mooney

WASHINGTON – VA officials have been accused of being  less than enthusiastic about a new law passed to provide outside care options for certain veterans. If that is true, they aren’t the only ones, based on recent events.

The “Choice” program has seen relatively little use by veterans since becoming law in August, and now family physicians are decrying the low and slow payment

VA secretary Robert McDonald said recently that he would ask Congress to allow him to reallocate funding from the Veterans Choice Program to give the agency more “flexibility” to meet funding needs for other priorities. In early February, McDonald said only 27,000 veterans — out of the about 9 million deemed eligible to receive a Choice Card — have made appointments for private medical care since the VA’s program rolled out at the beginning of November.

sample choice cardStill, Sen. Johnny Isakson (R-GA), chairman of the Senate Committee on Veterans Affairs, called the request to reallocate funds “unacceptable.” More than 40 senators, Democrats and Republicans alike, also expressed displeasure with what they see as lack of Obama administration support for the program.

The temporary program, which includes a $10 billion fund to pay for care, allows eligible veterans to use healthcare providers outside the VA system in certain circumstances, most notably if the patient lives more than 40 miles from a VA facility or has to wait too long for an appointment.

The bill was rushed through Congress with broad support in the wake of a scandal where data was falsified for more than 100,000 veterans awaiting appointments.

At this point, however, even if they wanted to, it is possible that eligible veterans seeking to use their Choice Cards could have problems finding an outside primary care physician.

Low Rates for Outside Physicians

The American Academy of Family Physicians (AAFP) sent a letter to McDonald in late February asking the VA to consider increasing its payments at least to be in line with Medicare and to revise its billing procedures.

As currently written, the law stipulates that the maximum payment for care provided outside a VA facility would be no higher than Medicare rates but didn’t establish a minimum payment.

The two third-party administrators (TPAs) used by the VA to handle the Veterans Choice Program are offering physicians much lower rates than anticipated, according to the AAFP.

“Many family physicians are reporting that these TPAs, if they’ve even yet bothered to approach the practice about participating in the Veterans Choice Program, are then offering reimbursement rates that are 30% less than the Medicare physician payment rate,” the AAFP letter reads.

“Simply put, any public or private payer health plan contract that does not at least meet the Medicare payment rate will remain financially impossible for most medical practices that already operate on extremely thin margins,” the letter reads.

In addition, although the AAFP had specifically asked Congress to include prompt payment provisions in the legislation, ensuring that claims without errors would be paid within 30 days, payment deadlines aren’t addressed in the VA regulation.

Under current rules, in fact, physician practices participating in the Veterans Choice Program are prohibited from collecting co-payments from veterans at the time of service and can bill patients only after the VA processes claims.

“This puts participating physician practices in the position of collecting co-payments and deductibles long after the patient has received the service and left the office, when it is harder and less cost-effective to do so,” the AAFP notes.

The primary care physician group warns that, if the VA continues to offer contracts at less than the Medicare rate, “most practices will not be able to participate in the program, which undermines the law’s intent of expanding access to veterans. Instead, the VA should offer contracts at the Medicare rate, so family physicians and other non-VA entities can afford to treat veterans.”

Reallocation of Funds

In a statement released Feb. 2, McDonald said he wants authority to redirect some of the $10 billion Congress allocated for the Choice program to help improve care for veterans at the VA’s 970 hospitals and clinics.

He said the Obama administration will submit legislation in the next few months to allow the VA to reallocate a portion of the unused funding to “support essential investments in VA system priorities in a fiscally responsible, budget-neutral manner. This flexibility will allow the department to serve veterans the way they want and deserve to be served.”

That position is likely to face strong opposition in both houses of Congress. A conference committee version of the bill passed the House of Representatives 420-5 and the Senate 91-3 last July.

“It is unacceptable to me that the president would begin to dismantle the Veterans’ Access, Choice and Accountability Act of 2014 that he just signed into law last August by taking the resources allocated to enact this legislation for use elsewhere,” Isakson said in a statement.

“As chair of the Senate Committee on Veterans’ Affairs, I said on Day One that our committee would be looking for full, complete and accountable implementation of the Veterans’ Choice Act that was specifically written to address the failure of senior VA leadership to provide for the scheduling and access of veterans to timely, quality healthcare.”

Calling the plan to reallocate funds “a complete non-starter,” Rep. Jeff Miller (R-FL), chairman of the House Committee on Veterans’ Affairs, said, “When a near-unanimous Congress worked with President Obama last year to create the choice program, we made a promise to veterans to give them more freedom in their health care decisions. I will not stand idly by while the president attempts to renege on that promise.”

At the end of February, a bipartisan group of 41 senators sent a letter to McDonald, decrying efforts to reallocate founds from the Choice program and calling for changes to the eligibility criteria as it applies to the 40-mile rule.

“It is deeply disturbing that the administration would try to reduce funding for this program before this program has even been allowed to work — being in existence for only a few short months — and as barriers to care continue to exist,” the letter states.

The senators also challenged the way VA determined the 40 mile distance, which essentially was as “the crow flies.”

In late March, the VA announced that, to expand eligibility for the Veterans Choice Program, it would  change the calculation used to determine the distance between a veteran’s residence and the nearest VA medical facility from a straight line distance to driving distance.

The Veterans of Foreign Wars (VFW) conducted two nationwide surveys of its members shortly after the implementation of the Choice Act in November. In its initial survey, the VFW received more than 1,600 responses with 60% of veterans reporting some negative experiences with their VA care, although a high number of positive comments also were received.

In the second survey, with more than 2,500 responses, about 78% of the veterans’ surveys said they were satisfied with VA care, and 82% said they would recommend it to others. At the same time, fewer than 60% of the respondents said they were satisfied with non-VA care or would recommend it to others, according to the VFW.