```

[Senate Hearing 114-403]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-403

                   CONSOLIDATING NON-VA CARE PROGRAMS

=======================================================================

                                 HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            DECEMBER 2, 2015

                               __________

       Printed for the use of the Committee on Veterans' Affairs
       
       
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                     COMMITTEE ON VETERANS' AFFAIRS

                   Johnny Isakson, Georgia, Chairman
Jerry Moran, Kansas                  Richard Blumenthal, Connecticut, 
John Boozman, Arkansas                   Ranking Member
Dean Heller, Nevada                  Patty Murray, Washington
Bill Cassidy, Louisiana              Bernard Sanders, (I) Vermont
Mike Rounds, South Dakota            Sherrod Brown, Ohio
Thom Tillis, North Carolina          Jon Tester, Montana
Dan Sullivan, Alaska                 Mazie K. Hirono, Hawaii
                                     Joe Manchin III, West Virginia
                       Tom Bowman, Staff Director
                 John Kruse, Democratic Staff Director
                           
                           
                           C O N T E N T S

                              ----------                              

                            December 2, 2015
                                
                                SENATORS

                                                                   Page
Isakson, Hon. Johnny, Chairman, U.S. Senator from Georgia........     1
Blumenthal, Hon. Richard, Ranking Member, U.S. Senator from 
  Connecticut....................................................     2
Moran, Hon. Jerry, U.S. Senator from Kansas......................    13
Hirono, Hon. Mazie K., U.S. Senator from Hawaii..................    18
Rounds, Hon. Mike, U.S. Senator from South Dakota................    20
Murray, Hon. Patty, Chairman, U.S. Senator from Washington.......    23
    Prepared statement...........................................    25
Cassidy, Hon. Bill, U.S. Senator from Louisiana..................    26
Manchin, Hon. Joe, U.S. Senator from West Virginia...............    28
Sullivan, Hon. Dan, U.S. Senator from Alaska.....................    31
Tester, Hon. Jon, U.S. Senator from Montana......................    34
Tillis, Hon. Thom, U.S. Senator from North Carolina..............    37

                               WITNESSES

Gibson, Hon. Sloan, Deputy Secretary, U.S. Department of Veterans 
  Affairs; accompanied by David J. Shulkin, M.D., Under Secretary 
  for Health; Baligh Yehia, Assistant Deputy Under Secretary for 
  Health for Community Care, Veterans Health Administration; and 
  Joe Dalpiaz, Network Director, Heart of Texas Health Care 
  Network (VISN 17), Veterans Health Administration..............     3
    Prepared statement...........................................     5
    Response to posthearing questions submitted by:
      Hon. Johnny Isakson........................................    45
      Hon. Richard Blumenthal....................................    52
      Hon. Dean Heller...........................................    54
      Hon. Sherrod Brown.........................................    55
      Hon. Steve Daines..........................................    56
Butler, Roscoe G., Deputy Director, National Veterans Affairs and 
  Rehabilitation Division, The American Legion...................    57
    Prepared statement...........................................    59
Selnick, Darin, Senior Veterans Affairs Advisor, Concerned 
  Veterans for America...........................................    61
    Prepared statement...........................................    63
    Response to posthearing questions submitted by Hon. Steve 
      Daines.....................................................    87
Rausch, Bill, Political Director, Iraq and Afghanistan Veterans 
  of America.....................................................    65
    Prepared statement...........................................    68

                   Independent Budget Representatives

Kelley, Raymond C., Director, National Legislative Service, 
  Veterans of Foreign Wars of the United States; accompanied by 
  Joy J. Ilem, National Legislative Director, Disabled American 
  Veterans; and Carl Blake, Associate Executive Director, 
  Government Relations, Paralyzed Veterans of America............    69
    Prepared statement...........................................    71
        Attachment: A Framework for Veterans Health Care Reform..    77

 
                   CONSOLIDATING NON-VA CARE PROGRAMS

                              ----------                              

                      WEDNESDAY, DECEMBER 2, 2015

                                       U.S. Senate,
                            Committee on Veterans' Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:31 p.m., in 
room 418, Russell Senate Office Building, Hon. Johnny Isakson, 
Chairman of the Committee, presiding.
    Present: Senators Isakson, Moran, Boozman, Cassidy, Rounds, 
Tillis, Sullivan, Blumenthal, Murray, Brown, Tester, Hirono, 
and Manchin.

           OPENING STATEMENT OF HON. JOHNNY ISAKSON, 
              CHAIRMAN, U.S. SENATOR FROM GEORGIA

    Chairman Isakson. I call this hearing of the Senate 
Veterans' Affairs Committee to order and welcome everybody. I 
hope you all had a great Thanksgiving and hope everybody has a 
wonderful holiday season coming up.
    This is a very important hearing for the Veterans' Affairs 
Committee of the U.S. Senate. On November 4, if my memory is 
correct, we had a meeting at the VA when we had a stand-up with 
Secretary McDonald and Sloan Gibson and Dr. Shulkin and some of 
the others that are in the room, talking about the vision for 
the future in terms of VA health services delivery to our 
veterans, about Veterans Choice, about consolidating programs, 
simplifying the reimbursement rates so there were no 
preferences one over the other, and seeing to it that 
coordinated care for our veterans could be a reality in our 
lifetime and in their lifetime.
    With that will come a number of decisions. This will not be 
the first time I heard most of this information, as we had that 
meeting before, but it will be the first time a lot of people 
have heard it. There are a critical number of decisions that we 
will have to make to make the MyVA work, the new Veterans 
Choice work, and make sure that VA does what it does best, but 
does not get itself into things that it has proven in the past 
it does not do very well.
    There are certain issues about information technology and 
network building that I specifically want to ask, because as 
someone who ran a company, I know every time you start talking 
about information technology or you start talking about 
building networks, you talk about infrastructure and cost. You 
talk about increasing the number of employees and management 
people. If you take an agency that already has 314,000, and if 
you grow that some more, you are probably making a big mistake. 
So, I am going to be very interested in the testimony, what all 
of you have to say on those particular points.
    We are delighted with the progress that we have made at the 
VA. I am stopped all the time back in Georgia and folks say, 
well, you are Chairman of the VA Committee. Are you not 
frustrated with how screwed up the VA is? I say, well, you 
know, the problem is that we see every day the successes that 
are being made, where we are fixing the problems that we have 
had in the past, and we have got a good Secretary. We have a 
good team. We are making some good progress on Veterans Choice. 
For all the bad stories you hear about, they are mostly stories 
of things that happened in the past that we are trying to 
correct, not things that are happening today.
    I want to start this hearing out by saying that this--what 
we are going to talk about today is an approach to address a 
number of previous shortcomings of the VA health care system to 
improve it for the veteran in terms of their access and the 
coordination of their care and the VA in terms of the delivery 
of the system, but to ensure that we magnify choice and not 
minimize choice so that we can deal with the challenges of the 
21st century for the veterans of the 21st century.
    With that said, I will recognize the Ranking Member, 
Senator Blumenthal.

         OPENING STATEMENT OF HON. RICHARD BLUMENTHAL, 
         RANKING MEMBER, U.S. SENATOR FROM CONNECTICUT

    Senator Blumenthal. Thank you. Welcome to our witnesses and 
thank you for being here and for your good work on behalf of 
our Nation.
    This task of consolidating and reorganizing community care 
and the patchwork of programs we have now is certainly an 
urgent one and apparently a very expensive one. One-point-nine 
billion dollars is a lot of money to spend on an organization. 
I want to know how that money is necessary and what 
specifically it will be used to do. I also will want to know 
about consumer rights, how do we protect consumer rights and 
educate both providers and individual patients, your consumers, 
as to their rights and responsibilities. I want to make sure 
that this plan for care in the community is implemented as well 
as possible. I know that is your goal, too, and thank you for 
being here.
    Chairman Isakson. We have two panels today, and our first 
panel will be made up of the Honorable Sloan Gibson, the Deputy 
Secretary of the Department of Veterans Affairs, with whom we 
have worked diligently for the last year on a number of 
projects and look forward to this one.
    He is accompanied by Dr. David Shulkin, who I want to 
commend this Committee on the rapid approval of his 
confirmation to take over a job that is critical to being able 
to deliver health care services to our veterans. I appreciate, 
A, his willingness to do it and, B, the Committee's willingness 
to act quickly and expeditiously to see to it that we do.
    I am going to pronounce these names and I do not want to 
mess up. No, no, do not cheat. Dr. Baligh Yehia, for South 
Georgia, that is pretty good. [Laughter.]
    Dr. Joe Dalpiaz. Is that pretty good?
    Mr. Dalpiaz. Yes----
    Chairman Isakson. You all can correct me. I beg your 
pardon?
    Mr. Dalpiaz. I am no ``doctor,'' thank you.
    Chairman Isakson. No doctor? Take it if you can get it. 
[Laughter.]
    With that, we will introduce your testimony. Keep it within 
5 minutes, if you can. If you go a little bit over, as long as 
it is factual and important and relevant, we are happy to hear 
from you.
    Mr. Gibson. Yes, sir.
    Chairman Isakson. Deputy Secretary Gibson, thank you for 
being here today. The program is yours.

STATEMENT OF SLOAN GIBSON, DEPUTY SECRETARY, U.S. DEPARTMENT OF 
VETERANS AFFAIRS; ACCOMPANIED BY DAVID J. SHULKIN, M.D., UNDER 
  SECRETARY FOR HEALTH; BALIGH YEHIA, ASSISTANT DEPUTY UNDER 
   SECRETARY FOR HEALTH FOR COMMUNITY CARE, VETERANS HEALTH 
  ADMINISTRATION; AND JOE DALPIAZ, NETWORK DIRECTOR, HEART OF 
     TEXAS HEALTH CARE NETWORK (VISN 17), VETERANS HEALTH 
                         ADMINISTRATION

    Mr. Gibson. Yes, sir. Thank you, Mr. Chairman. I will offer 
a bit more elaborate introduction of these three.
    David is our Under Secretary for Health. He has been at VA 
now for all of 4 months. He comes to us from a career in the 
private sector managing large health care organizations.
    Dr. Yehia has been with VA for all of 18 months. He has 
years of clinical experience and he continues to see patients 
inside VA, a brilliant young infectious disease doctor.
    Joe is the Network Director for VISN 17 down in Texas. He 
has been with VA for over 30 years, much of it as a medical 
center director. He has spent most of the past several months 
working with this team on this report and addressing community 
care issues.
    Mr. Chairman, we are facing an historic opportunity to make 
a major advance in health care for veterans by consolidating 
and streamlining VA's various means of providing care in the 
community so veterans get the best possible care no matter 
where they receive it. We are determined to seize that 
opportunity and make the most of it. We are grateful to the 
Committee for responding to our need for consolidation.
    VA is already in the midst of an enterprise-wide 
transformation called MyVA--you alluded to it, Mr. Chairman--
which will modernize VA's culture, processes, and capabilities. 
Our proposal to consolidate Community Care Programs is a part 
of that overall effort.
    Care in the community has been and will always be a vital 
component of health care for veterans when they live too far 
from a VA facility, when they need care available only in the 
community, and when increasing demand for care exceeds existing 
capacity, as we have seen in recent years.
    We are referring veterans to community care more than ever 
before, but we are saddled with a confusing array of programs, 
authorities, and mechanisms that greatly complicate the task of 
ensuring veterans get the care they need when and how they need 
it. These different programs include Project ARCH, PC3, Choice, 
two different plans for emergency care, affiliations with other 
Federal agencies and academic partners, and numerous individual 
authorities. Each has its own requirements, different 
eligibility rules, reimbursement rates, different methods of 
payment, and different funding routes. It is all too 
complicated, too complicated for veterans, for community 
providers, and for VA staff, as well.
    Consolidation will improve access and make the process 
easier for veterans to use. Veterans will have better access to 
the best care outside VA. Providers will be encouraged to 
participate and to provide higher quality care, and VA 
employees will be able to serve both better while also being 
good stewards of taxpayer resources.
    Our report is based on input from veterans, the Independent 
Assessment, Veterans Service Organizations, VA employees, 
Federal stakeholders, best practices of the private sector, and 
we also appreciate the many discussions that we have had with 
your staff, many of whom are in the room today.
    The report focuses on five functional areas. First, veteran 
eligibility: A single set of eligibility criteria based on 
distance from a VA provider, wait time for VA care, and the 
availability of services at VA, with expanded access to 
emergency and urgent care.
    Second, ease of access: Streamlined business rules to speed 
up and simplify the referral and authorization process.
    Third, high-performing network: Partnering with Federal, 
academic, and community providers to offer a tiered provider 
network which will enable VA to better manage supply and demand 
and monitor health care quality and utilization.
    Fourth, better coordination of care: Making health 
information easier to exchange and helping veterans make the 
best choices among community care providers.
    And, fifth, prompt payment: Improving billing, claims, and 
reimbursement processes to allow auto-adjudication of most 
claims and faster, more accurate payment.
    These efforts will not just improve the way we do community 
care. They will make community care a part of the fabric of VA 
care, making VA truly an integrated health care system.
    Getting there will take time, but even as we work toward 
the longer term, we are improving the veteran's experience of 
care in the community. In the near term, we have expanded the 
provider base by including providers already participating in 
Medicaid. We have added urgent consult scheduling to get 
veterans seen in two business days, when necessary. And we have 
eliminated enrollment date and combat eligibility indicators as 
factor limiting Choice eligibility.
    Just yesterday, we announced several new changes to the 
Choice Program that are products of our collaboration with this 
Committee and your House counterparts, for which we are very 
appreciative. First, veterans are now eligible if there is not 
a VA facility with a full-time primary care physician within 40 
miles.
    Second, when qualifying veterans for the Choice Program, we 
are now taking into consideration the nature of the care they 
need, how often they need it, and whether they need someone to 
accompany them. If a veteran just needs a flu shot or if they 
need a round of chemotherapy every 2 weeks or so, they may now 
qualify for Choice no matter where they live. Those are just a 
few ways we are making community care more accessible to 
veterans even while working toward the longer-term goal of 
consolidation.
    In the coming months, we expect to accomplish a number of 
close-in consolidation objectives: The streamlined referral and 
authorization process; standardization of our partnerships with 
DOD and our academic affiliates; critical make versus buy 
decisions on information technology and contractor support; 
successful application of MyVA customer service systems to 
community care coordination. These objectives will be the work 
of an enterprise-level community care team dedicated full-time 
to improving and consolidating community care and led by a new 
Deputy Under Secretary of Health for Community Care.
    We are eager to move forward with consolidation, but it 
must be a collaborative effort with Congress. This 
consolidation, like many of the improvements we have already 
made, is only possible with your support. We need Congress to 
provide the necessary legislation to support change and the 
required funding to implement and execute the consolidation 
program.
    I know costs are an issue, but the critical cost issue 
right now is the $421 million we expect to spend this fiscal 
year on systems redesign and business solutions. These are one-
time improvements that are absolutely essential if we are to 
move forward with consolidation and improving the veterans 
community care experience.
    Later, Congress and VA may need to consider additional 
costs to cover other possible aspects of consolidation, such as 
increased demand and expanding emergency and urgent care. We 
also expect some cost savings from consolidation, as well.
    We have detailed our specific legislative proposals in the 
report, briefed their structure to your personal staffs, and we 
are happy to work with any member on these items.
    Finally, Mr. Chairman, a word about provider agreements. We 
need Congress to act on the proposal we submitted May 1 to end 
the uncertainty about aspects of purchased care that are 
outside the Choice Program and that complicate provider 
participation in our other Community Care Programs. This is 
especially critical for veterans in long-term care. We are 
already seeing nursing homes not renew their agreements with 
us, which means that veterans will have to find new homes.
    Thank you for the support you have already shown. We look 
forward to working with you to fully integrate care in the 
community into the VA health care system.
    [The prepared statement of Mr. Gibson follows:]
    Prepared Statement of Hon. Sloan Gibson, Deputy Secretary, U.S. 
                     Department of Veterans Affairs
    Good afternoon, Chairman Isakson, Ranking Member Blumenthal, and 
Members of the Committee. Thank you for the opportunity to discuss the 
Department of Veterans Affairs' (VA's) proposal to consolidate VA's 
care in the community programs to improve access to health care. I am 
accompanied today by Dr. David Shulkin, Under Secretary for Health; Dr. 
Baligh Yehia, Assistant Deputy Undersecretary for Health for Community 
Care; and Mr. Joseph Dalpiaz, Network Director, Veterans Integrated 
Service Network 17.
    VA is committed to providing Veterans access to timely, high-
quality health care. In today's complex and changing health care 
environment, where VA is experiencing a steep increase in demand for 
care, it is essential for VA to partner with providers in communities 
across the country to meet Veterans' needs. To be effective, these 
partnerships must be principle-based, streamlined, and easy to navigate 
for Veterans, community providers, and VA employees. Historically, VA 
has used numerous programs, each with their own unique set of 
requirements, to create these critical partnerships with community 
providers. This resulted in a complex and confusing landscape for 
Veterans and community providers, as well as VA employees.
    Acknowledging these issues, VA is taking action as part of an 
enterprise-wide transformation called MyVA. MyVA will modernize VA's 
culture, processes, and capabilities to put the needs, expectations, 
and interests of Veterans and their families first. Included in this 
transformation is a plan for the consolidation of community care 
programs and business processes, consistent with Title IV of the 
Surface Transportation and Veterans Health Care Choice Improvement Act 
of 2015 (also known as the VA Budget and Choice Improvement Act) and 
recommendations set forth in the Independent Assessment of the Health 
Care Delivery Systems and Management Processes of the Department of 
Veterans Affairs (Independent Assessment Report) that was required by 
Section 201 of the Veterans Access, Choice, and Accountability Act of 
2014 (The Choice Act).
    This document provides a plan for how VA could consolidate all 
purchased care programs into one New Veterans Choice Program (New VCP). 
The New VCP will include some aspects of the current Veterans Choice 
Program (Section 101 of Pub. L. 113-146, as amended) and incorporate 
additional elements designed to improve the delivery of community care. 
The 10 elements of this plan, as set forth in law, are listed to the 
right. With the New VCP as described in this plan, enrolled Veterans 
will have greater choice and ease of use in access to health care 
services at VA facilities and in the community.

        VA Budget and Choice Improvement Act Legislative Elements
         1. Single Program for Non-Department Care Delivery
         2. Patient Eligibility Requirements
         3. Authorization
         4. Billing and Reimbursement Process
         5. Provider Reimbursement Rate
         6. Plan to Develop Provider Eligibility Requirements
         7. Prompt Payment Compliance
         8.  Plans to Use Current Non-Department Provider Networks and 
        Infrastructure
         9. Medical Records Management
        10. Transition Plan

    The New VCP will clarify eligibility requirements, build on 
existing infrastructure to develop a high-performing network, 
streamline clinical and administrative processes, and implement a 
continuum of care coordination services. Clear guidelines, 
infrastructure, and processes to meet VA's community care needs will 
improve Veterans' experience and access to health care. VA's future 
health care delivery network will address gaps in Veterans' access to 
health care in a simple, streamlined, effective manner and will 
continue to support VA's missions of research and education.
    VA is continuing to examine how the Veterans Choice Program 
interacts with other VA health programs, including the delivery of 
direct care. In addition, VA is evaluating how it will adapt to a 
rapidly changing health care environment and how it will interact with 
other health providers and insurers. As VA continues to refine its 
health care delivery model, we look forward to providing more detail on 
how to convert the principles outlined in this plan into an executable, 
fiscally-sustainable future state. In addition, we plan to receive and 
potentially incorporate recommendations from the Commission on Care and 
other stakeholders.
    VA anticipates improving the delivery of community care through 
incremental improvements as outlined in this plan, building on certain 
provisions of the Veterans Choice Program. The implementation of these 
improvements requires balancing care provided at VA facilities and in 
the community, and addressing increasing health care costs. VA will 
work with Congress and the Administration to refine the approach 
described in this plan, with the goal of improving Veteran's health 
outcomes and experience, as well as maximizing the quality, efficiency, 
and sustainability of VA's health programs.
                            the path forward
    The design of the New VCP (Legislative Element 1) is based on 
feedback from Veterans, Veteran Service Organizations (VSOs), VA 
employees, Federal stakeholders, and best practices. VA's plan centers 
on five functional areas. Within each functional area are key points to 
enable Veterans to receive timely and high-quality health care.
    1. Veterans We Serve (Eligibility)--This area addresses overlapping 
community care eligibility requirements, as directed in Legislative 
Element 2. Streamlining and consolidating these requirements will allow 
Veterans to easily understand their eligibility for community care and 
access community care faster. VA and community providers will have 
significantly lower administrative burdens, which have often impeded 
timely delivery of Veterans' care. This area includes the following 
possible enhancements:

     Establish a single set of eligibility criteria for all 
community care based on geographic access/distance to a VA primary care 
provider (PCP), wait-time for care, and availability of services at VA.
     Expand access to emergency treatment and urgent community 
care.

    2. Access to Community Care (Referral and Authorization)--This area 
addresses the complicated process of community care referrals and 
authorizations, as directed in Legislative Element 3. VA will optimize 
the referral and authorization systems and supporting processes, 
enabling more rapid exchange of information to support timely delivery 
of care. This area includes the following possible enhancements:

     Streamline business rules in referral and authorization to 
minimize delays in delivering care and eliminate unnecessary 
administrative burdens.
     Improve VA visibility into health care utilization in the 
community.

    3. High-Performing Network--This area leverages components of 
existing non-Department networks and identifies new community partners 
to build a high-performing network, as outlined in Legislative Element 
8. Addressing issues of provider eligibility requirements and 
reimbursement rates, as outlined in Legislative Elements 5 and 6, will 
be key to this approach. This area includes the following possible 
enhancements:

     Develop a tiered, high-performing provider network to 
better serve Veterans, consisting of the following categories:

        -  VA Core Network: Includes existing relationships with high-
        quality health care assets in the Department of Defense (DOD), 
        Indian Health Service (IHS), Federally Qualified Health Centers 
        (FQHC), Tribal Health Programs (THP), and academic teaching 
        affiliates.
        -  External Network: Includes commercial community providers 
        and distinguishes Preferred providers based on quality and 
        performance criteria.

     Move toward value-based payments in alignment with 
industry trends.
     Implement productivity standards to better manage supply 
and demand.
     Develop dedicated customer support to improve Veteran and 
community provider experiences.
    4. Care Coordination--This area focuses on improving medical 
records management and strengthening existing care coordination 
capabilities, as directed by Legislative Element 9. Improving medical 
records management will support a high-performing network and enable 
better decisionmaking through analytics. It will also support more 
effective care coordination and improved Veteran health care outcomes. 
This area includes the following possible enhancements:

     Offer a continuum of care coordination services to 
Veterans, tailored to their unique needs.
     Use analytics to improve Veterans' health by guiding them 
to personalized services and tools (e.g., disease management, case 
management).
     Enable community providers to easily exchange health 
information with VA.
     Design customer service systems to help resolve inquiries 
from Veterans and community providers regarding care coordination.

    5. Provider Payment--This area focuses on improving billing, 
claims, and reimbursement processes, as well as Prompt Payment Act 
(PPA) compliance for purchasing care, as directed by Legislative 
Elements 4, 5, and 7. This area includes the following possible 
enhancements:

     Implement a claims solution which is able to auto-
adjudicate a high percentage of claims, enabling VA to pay community 
providers promptly and correctly.
     Move to a standardized regional fee schedule, to the 
extent practicable, for consistency in reimbursement.
    The New VCP will use a system of systems approach to enhance these 
five functional areas as part of the larger VA health care 
transformation. This approach stresses the interactive, interdependent, 
and interoperable nature of external and internal components within 
VA's health care delivery system. The New VCP includes enhancements to 
the following systems, which will have a positive impact on VA and the 
greater Veterans' health ecosystem:

     Integrated Customer Service Systems--Provide a reliable, 
easy-to-use way for Veterans and community providers to get their 
questions answered, provide feedback, and submit inquiries.
     Integrated Care Coordination Systems--Establish a clear 
process for Veterans to seamlessly transition between VA and community 
care, supporting positive health outcomes wherever the Veteran chooses 
to receive care.
     Integrated Administrative Systems (Eligibility, Referral, 
Authorizations, and Billing and Reimbursement)--Simplify eligibility 
criteria so Veterans can easily determine their options for community 
care, streamline the referral and authorization process to enable more 
timely access to community care, and standardize business processes to 
minimize administrative burden for community providers and VA staff.
     High-Performing Network Systems--Enable the development 
and maintenance of a high-performing provider network to maximize 
choice, quality, and value for Veteran health care.
     Integrated Operations Systems (Enterprise Governance, 
Analytics, and Reporting)--Define ownership and management of community 
care at all levels of VA, local and national, and institute standard 
metrics to drive high performance and accountability across facilities.

    The New VCP plan envisions a three-phased approach to implement 
these changes to support improved health care delivery, as outlined in 
the Transition Plan (Legislative Element 10). This will deliver 
incremental improvements while planning for a future state consistent 
with evolving health care best practices. The first phase will include 
development of the implementation plan and will focus on the 
development of minimum viable systems and processes that can meet 
critical Veteran needs without major changes to supporting technology 
or organizations. Phase II will consist of implementing interfaced 
systems and community care process changes. Finally, Phase III will 
include the deployment of integrated systems, maintenance and 
enhancement of the high-performing network, data-driven processes, and 
quality improvements.
    Executing the New VCP will not be possible without approval of 
requested legislative changes and requested budget. The primary 
objectives of the legislative proposal recommendations are to make 
immediate improvements to community care, establish a single program 
for community care, and implement necessary business process 
improvements. The budget section of this plan is divided into three 
parts: (1) System Redesign and Solutions; (2) Hospital Care and Medical 
Services, including Dentistry; and (3) Expanded Access to Emergency 
Treatment and Urgent Care. System Redesign and Solutions include 
enhancements to the referral and authorization process, care 
coordination, customer service, and claims processing and payment. 
These changes are expected to improve the Veteran experience with 
community care. As a result, this may increase Veterans' reliance on VA 
community care, leading to increased Hospital Care and Medical Services 
costs. Expanded Access to Emergency Treatment and Urgent Care is 
important in providing Veterans with appropriate access to these 
services, but is severable from other aspects of the Program and could 
be implemented separately.
    The incremental costs of the enabling System Redesign and Solutions 
for the New VCP are estimated to range between $400 and $800 million 
annually during the first three years. VA's community care programs 
(hospital care, medical services, and long-term services and supports) 
prior to the enactment of The Choice Act, cost roughly $7 billion per 
year. Continuing the Veterans Choice Program, as amended, beyond its 
current expiration will cost approximately an additional $6.5 billion 
per year, assuming no changes are made to its current structure 
(eligibility, referral and authorization, provider reimbursement, 
etc.). Improvements to the delivery of community care as described in 
this plan would require additional annual resources between $1.5 and 
$2.5 billion in the first year and are likely to increase thereafter. 
The proposed expanded access to emergency treatment and urgent care 
requires an additional estimated $2 billion annually. Refer to the 
estimated costs and budgetary requirements (Section 5) and legislative 
proposal recommendations (Section 6) for additional information.
    The estimated costs reflected in this report represent the funding 
required to maintain VA's delivery of community care at current levels, 
as well as incorporating the considerations outlined in this plan. 
Additional changes or expansion of the program beyond the scope 
outlined in this report could significantly increase the projected 
costs.
    VA cannot reach the future state alone. Ongoing partnership with 
Congress will be critical to addressing the budgetary and legislative 
requirements needed for this important transformation, including 
outstanding decisions on aspects related to sustainability and cost-
sharing. The support and active participation of Congress, Federal 
partners, VA employees, VSOs, and other stakeholders are necessary to 
achieve more efficient, effective, and Veteran-centric health care 
delivery.
                               conclusion
    Transformation of VA's community care program will address gaps in 
Veterans' access to health care in a simple, streamlined, and effective 
manner. This transformation will require a systems approach, taking 
into account the interdependent nature of external and internal factors 
involved in VA's health care system. MyVA will guide overall 
improvements to VA's culture, processes, and capabilities and the New 
VCP will serve as a central component of this transformation. The 
successful implementation of the New VCP will require new legislative 
authorities and additional resources and will position VA to improve 
access to care, expand and strengthen relationships with community 
providers, operate more efficiently, and improve the Veteran 
experience.
    Thank you. We look forward to your questions.

    Chairman Isakson. Thank you, Secretary Gibson. We 
appreciate your testimony.
    I want a short answer on this question. You said you made 
two changes. You announced two changes yesterday regarding the 
40-mile rule and the services a veteran needed to expand Choice 
access, which were steps along the way toward accomplishing the 
long-term goal of consolidation. I think that is what you said.
    Mr. Gibson. Yes, sir.
    Chairman Isakson. In one sentence, describe what that long-
term goal is.
    Mr. Gibson. The long-term goal of consolidation of care is 
to improve the veterans care experience and deliver that at the 
best possible value to taxpayers.
    Chairman Isakson. OK. In that case, when we had the field 
hearing in Gainesville, GA--I do not think you were there, 
though Secretary McDonald was kind enough to come--we had the, 
I cannot remember the name right now, but the Choice provider 
for the East Coast----
    Mr. Gibson. HealthNet.
    Chairman Isakson. HealthNet attended, and a discussion 
ensued about the issue of an eligibility of a veteran to get 
services outside of VA through Choice. It was an arduous 
process, which includes file after file going to the third-
party provider before they could determine getting the veteran 
the service. Is that still going on with the third-party 
provider? One of the things we want to see is easy access for 
every veteran to care, wherever it comes from----
    Mr. Gibson. Yes----
    Chairman Isakson [continuing]. Whether it is you or whether 
it is a private provider. But this eligibility situation, which 
you used the word ``eligibility'' in your testimony a lot, is 
something that evidently is more cumbersome in practice than it 
is in words. What are you all doing to streamline that process 
so a veteran knows they are eligible and does not require a 
Philadelphia lawyer to figure out whether or not they are?
    Mr. Gibson. Let me ask Dr. Yehia to respond to the 
question, Mr. Chairman, and outline some of the things that we 
have already done to simplify that process.
    Dr. Yehia. Thank you for that question. I think eligibility 
and the referral and authorization process, which is the way 
that a veteran can actually access care in the community, they 
are two of the foundational elements of the report. Really, the 
process of consolidation is to help streamline eligibility so 
there is not multiple programs, each with different criteria, 
that a veteran has to meet in order to access community care.
    That is kind of what we outline here, is to develop a set 
of consistent eligibility criteria that is easy for the veteran 
to understand and easy for our community providers to also be 
able to administer and for our employees to deliver that care. 
That is from the eligibility standpoint.
    When we talk about referrals and authorization, right now, 
that process is very cumbersome, just as you described, Mr. 
Chairman. There is a number of steps that our employees have to 
go through in terms of transposing information, uploading 
information, sending that over to our third-party contractor, 
steps that they go through before we can actually make an 
appointment for the veteran. That is too long, and what we are 
proposing here in the plan is to streamline that so that there 
is less redundancy, we are more automated and less manual 
process to actually accomplish that.
    Mr. Gibson. What we have done in the meantime, Mr. 
Chairman, is we have modified the contract with both of the 
third-party administrators, which now allows us to almost 
immediately send an authorization document to the third-party 
administrator that triggers a call from the administrator to 
the veteran. Instead of the veteran having to call the 
administrator, waiting several days before doing that and 
getting bounced back and forth between VA and the third-party 
administrator, the burden falls on the third-party 
administrator to reach out and make contact with the veteran to 
get the appointment scheduled, designed to simplify the 
experience and streamline the experience from the veteran's 
perspective.
    Chairman Isakson. All right. I am going to try and phrase 
this question properly so I am expressing it properly. My 
ultimate vision for Choice was that a veteran had a choice to 
go to a doctor who could provide that veteran with the service 
they need whether they are a VA hospital facility or a private 
provider in the community. When you refer in here to 
consolidating your private providers in the community, are you 
talking about building a network within the community where you 
have a network of doctors that the VA has approved that the 
veteran can go to?
    Dr. Shulkin. Mr. Chairman, I think the name ``Choice'' was 
deliberate on your part. That is the way that we intend to do 
this. The first issue in this plan is to build a network of 
providers in the community, as you said, based upon high-
quality criteria, to assure that veterans are getting the best 
care available anywhere in America, and then to allow that 
information to be transparent, so people have information on 
quality and metrics to be able to make educated choices. That 
would be the intent of the program.
    This program does not specify that--how we do that, because 
this year, the first phase of it would be planning and 
designing how that system works.
    Chairman Isakson. Well, it is the ``how'' that is so 
important, and that is what I am really trying to talk about 
here, and I am going a little bit over and I apologize and will 
be generous with time for everybody. I have a health care 
plan----
    Dr. Shulkin. Yes.
    Chairman Isakson [continuing]. And I know which doctors in 
my community are eligible and which are not because they 
publish a book that says which ones are and which ones are not. 
I call them up, I make an appointment, and I go. It is a pretty 
simple process. Is that what you are looking at doing?
    Dr. Shulkin. That is the intent, which is identifying the 
high-performing network and then allowing veterans to have the 
choice into which providers they select, because it is not only 
the specific quality criteria that defines the interaction with 
a patient and a physician. It is actually the personal 
interaction, and that is very variable depending on how the 
veteran experiences the physician. We want to help guide 
veterans with the right information, let them see it and then 
allow them to make the choice.
    Chairman Isakson. The last extension of my time, and I will 
not ask any more, but do you ultimately envision the third-
party conduit they have to go through going away because you 
have an approved network, list of doctors that they can go to, 
and the veteran knows they are eligible and they just make the 
appointment themselves and go and you remove that middleman?
    Dr. Shulkin. What we are trying to do in this planning 
process, what we call phase one of the contract, is to evaluate 
how do we simplify the process to allow this to be veteran-
centric, something today that I think you suggested we are far 
away from because there are too many hoops to jump through, and 
in each one of these design phases, we are going to be doing a 
``build/buy'' decision. What is the best thing for the veteran? 
What is the best thing for taxpayers?
    The role of outside organizations helping us is still 
uncertain until we go through that process and decide. Is it 
better to essentially build or eliminate processes, or is it 
better to seek external help? And one of the things that we 
have recognized is, is that VA does not always do this 
internally that well. We are open to the answer being that we 
need help to do this. But, we want to have the discipline of 
going through every step and deciding, should we build this or 
should we buy this?
    Chairman Isakson. Thank you, and I apologize for going 
over.
    Senator Blumenthal.
    Senator Blumenthal. Thanks, Mr. Chairman.
    I would like to pursue the question I raised during my 
opening remarks about protecting consumers and patients. What 
kinds of mechanisms and standards will be in place to assure 
that protection?
    Dr. Yehia. I think that is an excellent point. What we are 
proposing in the plan is the first step to get to consumer 
protection is to actually have the necessary information on the 
providers in the network, their performance, so that we can 
make sure that consumers or patients have the information they 
need to make important decisions. Right now, that is actually 
critically missing. We might have local information at the 
medical center level, but regionally and nationally, we do not 
have the necessary data to determine the quality of care or the 
health care utilization----
    Senator Blumenthal. Where do you get that data?
    Dr. Yehia. That is exactly what we are asking for in some 
of the $421 million in phase one, which is to build a network 
where we can actually gain that sort of information, those 
analytics.
    Senator Blumenthal. Okay. What kinds of mechanisms will you 
put in place to assure that there is education of those 
patients, and number 2, that there is a way for them to bring 
complaints to bear?
    Dr. Yehia. I will answer that in two parts. What is 
articulated in the plan is a robust customer service function, 
which is we want to make sure that we are able to get 
complaints or compliments or issues raised not only from 
veterans, but also from community providers. Most health plans 
that function very well have a beneficiary arm as well as a 
provider engagement arm. We want to make sure that there are 
avenues to be able to communicate two-way between our 
customers, our patients, as well as our community providers 
that serve them.
    In terms of the specific details, we are starting the 
process now of developing implementation plans and milestones 
and really working out those exact details on how to do that--
--
    Senator Blumenthal. Is that the Veterans Experience Office 
that will be a center point or a core function?
    Dr. Yehia. The Veteran Experience Office is Department-
wide, part of the MyVA initiative. They are critically part of 
our team that is rolling this out. Yes, there is a role for 
that. I think we are welcome and open to discussing with you 
and your staff other opportunities that we can have to make 
sure that there are safeguards for our patients in the network.
    Senator Blumenthal. I would want to pursue that. A lot of 
subjects to cover here, so I cannot do it right now, but I do 
want to pursue that set of issues.
    I was struck to learn that VA data shows a loss rate of 
nearly 9 percent for physicians and 8 percent for nurses in the 
fiscal years 2014 and 2015. In each of those years, the VA lost 
about 6,000 physicians and nurses combined. Presumably, many of 
them would have played a key role in the coordination of care 
in the community. They are now going to be out in the 
community, presumably. What can be done to keep those people 
within the VA so that their care is, in fact, provided by the 
VA? The majority of the staff losses for physicians and nurses 
for the two fiscal years 2014 and 2015 were due to staff who 
quit. I also was struck to learn that the VA has about 336 
buildings that are vacant or less than 50 percent occupied.
    Given that the VA trains about 70 percent of our physicians 
nationally, which is an impressive number, 70 percent 
nationwide, do we not run the risk of not being able to train 
enough medical professionals to work in both the private sector 
and the VA?
    There are really two related questions. We are losing 
staff, we are underutilizing buildings. Can we continue to 
provide quality care within the VA, and can we continue to 
train?
    Dr. Shulkin. Senator, a lot in those questions, so I will 
try to be brief in my answers.
    Senator Blumenthal. And you can supplement it.
    Dr. Shulkin. Absolutely.
    Senator Blumenthal. I recognize this forum is only a kind 
of introductory means to answering some very profoundly 
important questions.
    Dr. Shulkin. I appreciate that and we will take you up on 
that.
    Your issue about consumer rights, very important issue, 
very, very big in health care, and I would just very briefly 
say, the rest of health care, the private sector is dealing 
with this by no longer trying to be paternalistic and make 
choices. You make information available and you let people 
decide what is best for them, and I think Senator Isakson was 
also talking about this, as well.
    On the issue of losses, the 6,000 physicians and the nurses 
and other staff that we lose, each one of those people that 
leave the organization that should not is painful for us and we 
have to figure out ways to retain people. Morale is lower than 
we want in the organization and we absolutely have to address 
it. It is one of my priorities as Under Secretary, to address 
that issue.
    But it is not all bad news. Between August 2014 and October 
31 of 2015, this period you are talking about, we had a net 
increase of 1,692 physicians and a net increase of 3,508 
nurses. So, while we are losing and we have to address that, we 
are actually hiring more and having a net increase which is 
helping us deliver care.
    On the issue of training, the role of education, medical 
education, nursing education, psychologists, social workers, 
pharmacists, VA is critical for American medicine. We cannot 
lose that mission. We cannot lose that role. We have to be able 
to keep a strong clinical environment to train America's 
professionals.
    We do have vacant space, and part of our plan identifies 
savings, another issue that you had talked about in your 
opening statement, the cost. Some of the savings will come from 
rightsizing some of the space that we do not need, but it is 
not going to be at the expense of us training America's health 
care professionals.
    Senator Blumenthal. Well, I really appreciate those answers 
and the answers that you will give in follow-up. I really think 
this area is critical. Training our Nation's physicians is one 
of the premier public service functions of our VA system and it 
is a pillar of American medicine. The talk around here is often 
of accountability and cracking down on bureaucrats who may be 
incompetent or corrupt, but we also need to focus on keeping 
the good people, the good doctors and nurses and pharmacists 
and clinicians in the VA, because they are going to be critical 
to American medicine in training but also in caring for our 
veterans. Thank you for your answers.
    Chairman Isakson. Senator Moran.

           HON. JERRY MORAN, U.S. SENATOR FROM KANSAS

    Senator Moran. Mr. Chairman, thank you and Senator 
Blumenthal for this hearing. Thanks for the panelists for 
joining us this afternoon.
    Under Secretary Shulkin, is it your responsibility to 
implement the Choice Act? First, welcome to the VA. Thank you 
and congratulations----
    [Laughter.]
    Senator Moran [continuing]. Congratulations on your 
confirmation. Glad to have somebody rowing the boat. But, 
Choice Act becomes your responsibility, or is?
    Dr. Shulkin. Yes, it is.
    Senator Moran. Deputy Secretary Sloan Gibson and I have had 
a history on this topic and I am going to try a fresh face and 
go at this again. [Laughter.]
    I have had a goal of seeing that the Choice Act is, in my 
view, appropriately implemented, and part of my interest in 
this certainly comes from the demographics, the geography of 
Kansas, lots of territory, lots of distances. Choice can be a 
significant asset of great value to veterans across our State.
    My original complaint with the implementation of the Choice 
Act by the Department of Veterans Affairs was this issue of 
whether it mattered if the CBOC provided the service that the 
veteran needed. If it does not, does it count as a facility 
under the Choice Act? We have had this ongoing discussion.
    I offered legislation that passed the Senate that said if 
the veteran cannot get the service he or she needs at the CBOC, 
it does not count. That legislation is pending in the House of 
Representatives, but I was encouraged, perhaps convinced by my 
colleagues in the House and perhaps here in this Committee that 
there was another approach, and that was to define what a 
facility is based upon the full-time nature of the staff there, 
in particular, a physician.
    Legislation now in law says that it requires for a facility 
to be counted under Choice that there be a full-time physician 
at that clinic. I was always worried about whether or not the 
VA would interpret that in some way contrary to what common 
understanding would be, at least my common understanding. I had 
assurances from VA personnel and staff, certainly on the House 
committee, that a physician would be required to be at a 
facility on a full-time basis, which was 40 hours.
    Now, even as recently as 2 weeks ago, I think that was 
confirmed to me by two of the panelists who were in a meeting 
with my staff in Senator King's office. Then yesterday, you 
report different language about what this now means.
    What came out yesterday is that the interpretation is 
completely different than what I was assured it would be and it 
says multiple physicians, not one, equivalent to 0.9 FTE maxing 
36 hours.
    I think the language is clear. It does not say 
``physicians.'' It is not plural. I would like to hear how we 
got to the point that we now appear to be and to see if there 
is something we can do about that.
    Let me bring this back to Kansas. Long before Secretary 
Gibson, we have been trying to recruit a physician to a CBOC in 
Liberal, KS, the southwest corner of our State, unsuccessfully 
for years. I appreciate that Secretary Gibson, in his effort to 
solve that problem, determined in a letter to me in July 2015 
that the Liberal CBOC would not count as a facility under the 
Choice Act and that veterans who were receiving care there 
could have community services.
    This is the issue we continue to face, in part based upon 
how you define what a full-time physician is, but also, why do 
the veterans who live in areas other than Liberal not get the 
same kind of standard for whether or not the CBOC counts or 
not?
    For example, Emporia, KS--it is a community in the Flint 
Hills of our State, 25,000 Kansans, several thousand veterans--
it is open 1 day a week. It counts as a facility. Seneca is 
open 1 day a month. It counts, and, in fact, the VISN is now 
closing Seneca's CBOC so that it no longer counts. The reality 
is, it should not count in the first place if it is open 1 day 
per month.
    Is this just confusion within the VA or is there a solution 
so that the veterans who get the benefit of outpatient services 
at Liberal, it is true regardless of where you live in Kansas 
or across the country?
    Dr. Shulkin. OK. Well, thank you. Senator, first of all, 
there should not be a difference between what you want and what 
the VA wants----
    Senator Moran. Let me first of all say, I do not want you 
to take away Liberal's benefits to make that come true.
    Dr. Shulkin. No. Right. OK. [Laughter.]
    We want the same thing, which is, particularly in rural 
areas where there is a severe shortage of providers in general, 
we want to have as much access to care as possible. That is the 
goal. I think this difference of interpretation--which you 
learned about just a short time ago, and I, as well--this 
difference of interpretation is really a well-meaning 
difference that I believe we can work out.
    Our belief is, the way we were interpreting this--or I will 
speak for myself--is that we want to have a full-time 
physician, a provider of 0.9 FTEs. In rural areas, in 
particular, we find that it is sometimes easier to recruit 
part-time physicians rather than full-time physicians. In our 
view, two part-time physicians that add up to keeping that 
office open 36 hours a week is what is in the veteran's best 
interest.
    As you may know now, about 20 percent of physicians in this 
country work part-time. For women physicians, it is actually 
higher, up closer to 35 percent. We are trying to staff these 
clinics in the best way possible, and so that is our intent, 
which is to provide that--the office open 36 hours in whatever 
setting.
    In terms of the clinics that are open 1 day a week, that 
should not count. If they are not open with a provider for the 
36 hours, the 0.9 FTE, that does not count.
    Dr. Yehia. And they do not count, if I may.
    Senator Moran. Yes.
    Dr. Yehia. The CBOC, actually, the definition of a CBOC, 
they have to provide a certain volume of primary care and 
mental health care. There has to actually be open daily and 
they have to be able to provide that level of service.
    There are a number of categorizations that we use for those 
clinics that are only open 1 day a month or a couple days of 
the week, and those are not actually used in the calculation of 
the 40-mile criteria. I actually have a listing from VISN 15, 
and Liberal and Seneca and Emporia that you mentioned are not 
used to judge the 40-mile geographic criteria.
    Senator Moran. My time has expired, but that is 
interesting, because the CBOC in Seneca is being closed for the 
stated purpose of making certain it does not count as a 
facility under the Choice Act.
    Dr. Shulkin. The Seneca--as this was recently presented to 
me, because I do not like closing facilities that serve rural 
areas, I think that that is of concern--the Seneca example is 
that there was such a small number of veterans, like 100 
veterans, that our doctors coming from the larger medical 
center were actually spending a day traveling there and 
potentially a day back of which they were not practicing during 
that time. We felt we could better serve Kansas veterans by 
actually potentially closing that one clinic and using 
community providers.
    Senator Moran. I only raise Seneca as the example of where 
the VA has determined, as I understand it from the folks at 
home, that it has to be closed so that those veterans can 
access care within the community.
    Under Secretary Dr. Shulkin, your definition--maybe you are 
right about how we are going to have to attract physicians and 
they are going to be more likely to be part-time than full 
time, and to fill that gap, particularly in rural places, that 
is necessary. But I would again make the point that the law 
says what it says and the conversations that we have had over a 
long period of time confirm that. Whether you are right or 
wrong, whether veterans can get better care by a different 
definition, I think that is a matter that Congress needs to 
deal with. It is outside your rulemaking authority to go beyond 
what the law says. Thank you.
    Chairman Isakson. This is a very important point, so I am 
going to follow up with a question on this. You made two 
changes that you announced yesterday in the Choice Program. 
Would you read the second one again in your testimony, Sloan? 
You said you announced two changes of veterans Choice 
eligibility. [Pause.]
    Mr. Gibson. Second, when qualifying veterans for the Choice 
Program, we are now taking into consideration the nature of the 
care they need, how often they need it, and whether they need 
someone to accompany them. If a veteran just needs a flu shot 
or if they need a round of chemotherapy every 2 weeks or so, 
they may now qualify for Choice no matter where they live.
    Chairman Isakson. Here is my follow-up question on Seneca 
and Liberal. Seneca is part-time. Liberal is semi-staffed, is 
that right?
    Senator Moran. No physician.
    Chairman Isakson. No physician. You have a Kansas veteran 
who needs health care service and cannot get it at either one 
of those facilities. Why are they not eligible now to go to a 
private doctor?
    Mr. Gibson. They are already, from both locations. They 
already are.
    Chairman Isakson. So, what am I missing?
    Senator Moran. I think you are missing that--you are not 
missing anything, Mr. Chairman. Excuse me for suggesting that 
you are. [Laughter.]
    That is not the way it is being implemented.
    Chairman Isakson. Well, that is what I am referring to. I 
mean, I am a pretty simple guy, but when you read what you 
read, it told me if I was a Kansas veteran and I needed 
chemotherapy or I needed a regularly scheduled 2-week 
appointment or I needed whatever, and neither Seneca nor 
Liberal offered it, I ought to have Choice accessible for me to 
go to a private doctor in Liberal or in Seneca----
    Mr. Gibson. Here is what I would like to do to get 
clarification here. What we will do is we will go to the 40-
mile roster, the list of veterans that are eligible for care 
under the 40-mile rule. We will look specifically at Seneca and 
Liberal and wherever else you want us to look and we will print 
you the list of the names of the veterans that show up on that 
40-mile list, because we know who is eligible for care under 40 
miles. We know that already today, now. We will do that and 
provide it to you, and then we can figure out whether or not 
those veterans are actually accessing care in the community.
    Chairman Isakson. I am going to continue on this one more 
second, because I am slow. In the case we just talked about, 40 
miles is irrelevant. I mean, if you are within 40 miles but you 
cannot get the service that they need, they ought to have 
Choice. If the clinic is not open or it is not available, they 
ought to have Choice to go, as well. Period, end of sentence. I 
thought that is----
    Mr. Gibson. That is the interpretation that we have applied 
on part-time clinics since we launched Choice. But, we will go 
print out the list of veterans on the 40-mile list and we will 
look for those from Seneca and wherever else, whatever 
communities in Kansas you would like for us to look for and 
determine who is actually using 40-mile eligibility. That is 
the way it works today, not tomorrow, but today and yesterday.
    Senator Moran. Mr. Chairman, there are nine CBOCs in Kansas 
that do not have a full-time physician that are still listed as 
facilities and veterans are being told that they live too close 
to a facility to access Choice care.
    Chairman Isakson. Which is wrong.
    Mr. Gibson. It is wrong, and if that is the case on the 
ground, we will fix it.
    Chairman Isakson. Because whether it is Hartford, CT, 
Macon, GA, or Liberal, KS, if a veteran cannot get the service 
from the VA and Choice is operable, which it is, they ought to 
be able to choose a physician that can deliver the service to 
them in their----
    Mr. Gibson. Absolutely, yes.
    Chairman Isakson [continuing]. Without having to get a 
Philadelphia lawyer to negotiate it.
    Mr. Gibson. They do not have to go through anybody to do 
that. They get their appointments----
    Senator Moran. Mr. Secretary, your letter to me of June or 
July was very appreciated and it, in fact, reinforced how I 
thought Choice should be interpreted in the first place.
    Mr. Gibson. Yes.
    Senator Moran. Your ability to do that in Liberal is just 
what we want to have the ability to do everyplace else. And 
what you are telling me is that is now the case.
    Mr. Gibson. That is now the case, yes, sir. And if we are 
not executing that way, shame on us. Bad on us.
    Senator Moran. Thank you.
    Chairman Isakson. I have taken the additional time because 
Senator Tester was out of the room and he would have been 
asking those questions if he had been in the room. [Laughter.]
    But I wanted to make sure that people from Kansas and 
Montana, Connecticut, Georgia, and Washington State, and 
everybody knew that we believe the intent of Choice was if a 
veteran could not get service from a VA facility, they got to 
go to Choice in their area closest to them to get the service, 
period, end of sentence, without problems with definitions and 
things like that. If we are talking about consolidation to 
provide Choice and make it meaningful for our veterans, that 
ought to be the ultimate goal where we go.
    Senator Tester. Especially the folks in Liberal, KS----
    [Laughter.]
    Chairman Isakson. Who voted for Jerry Moran.
    Senator Moran. [continuing]. Liberal, KS----
    Chairman Isakson. Senator Hirono.

         HON. MAZIE K. HIRONO, U.S. SENATOR FROM HAWAII

    Senator Hirono. Thank you. I thought I was hearing wrong 
when the Senator talked about Liberal. I was thinking on a 
political continuum, but, obviously, that is not what we are 
talking about. [Laughter.]
    I am looking at your testimony, Secretary Gibson, and I 
would like to make sure that I understand your testimony. 
Looking at page three, you say that this consolidation plan, or 
the new VCP, will center on five functional areas, and you list 
the five functional areas. Then, going on to page five of your 
testimony, you say that--I assume that, again, we are talking 
about the new VCP--will involve enhancements to the following 
systems, which you list one, two, three, four, five systems. 
Are the enhancements to the five systems in alignment somehow 
with these five functional areas that you identify? Is that how 
your testimony is to be read?
    Dr. Yehia. It is----
    Senator Hirono. It is a little bit confusing, I might say.
    Dr. Yehia. Yes. The way that it is presented is in these 
five foundational areas that really trace the veteran's journey 
through community care. We start with eligibility, go to 
referral and authorization, the providers that they see in the 
network, how they coordinate care, and then kind of the back 
office function of claims. That really maps a veteran's 
journey.
    Then when we are writing out the way that we should 
approach implementation and how we should think about system 
design, we use what is called ``a system of systems'' approach, 
where we looked at what the different systems are that touch 
these five cornerstones, and those are the systems you see 
there.
    One is customer service, which is how do we improve 
customer service for veterans and community providers.
    One is for care coordination: how do we improve 
coordination of care, including IT systems.
    One is administration, so that deals a little bit with 
eligibility, the referral and authorization process.
    The next one is the network, which is how do you actually 
build a network of providers that can deliver the needed care 
to veterans.
    And then last is kind of how do you operationalize this? 
How do you implement it? That gets into the governance 
structure, both nationally and locally. How do you get data so 
that we can make sure that we are tracking and monitoring 
things correctly?
    They are very related. They do not overlap a hundred 
percent. One is the foundational building blocks of the plan 
and the other one is the systems that we need to use to 
actually implement the plan.
    Senator Hirono. We know that when we are talking about the 
VA health system, we are talking about a vast system, and it is 
all very complicated. For the individual veteran to navigate 
his or her way through the system is really a challenge. While 
it sounds really good the way it is described, each of these 
systems that you seek to enhance could take a whole lot of 
effort to even figure out how to do it.
    I am wondering what your timeframe is, because you asked 
for over $420 million just to design what you are going to do 
with these one, two, three, four, five enhancement systems that 
you are going to look at.
    Dr. Yehia. I think you are accurate that this takes time. 
This is not something that we can just switch on and be able to 
implement completely. In fact, there really needs to be close 
collaboration with this Committee and Congress to be able to 
get certain legislative relief and resources to do that.
    With that said, the way that we are designing 
implementation and the transition plan to carry out some of 
this work is not, you know, in 3 years to have some big grand 
reveal----
    Senator Hirono. Yes.
    Dr. Yehia [continuing]. Of, like, here is the program----
    Senator Hirono. No, we all get that it is going to be quite 
complicated----
    Dr. Yehia. Yes. It is iterative.
    Senator Hirono [continuing]. One of the aspects that you 
are really focusing on is the outcomes, and so that is a whole 
huge system or process that you have to develop to figure out 
whether we are actually getting the best bang for the buck.
    Part of what your testimony, Mr. Gibson, says is that this 
would not be possible without approval of requested legislative 
changes, and I was trying to look in your testimony to see if 
you have some very specific legislative changes that you are 
requesting. Is it in your testimony, requested legislative 
changes?
    Mr. Gibson. The legislative changes are not incorporated 
into the testimony. They are incorporated into the plan 
document----
    Senator Hirono. OK.
    Mr. Gibson [continuing]. And they have been briefed and 
discussed with Senate staff.
    Senator Hirono. Because I would hate for us to appropriate 
$421 million for you to develop a system and then it cannot 
ever be implemented because these other legislative changes 
that you say are integral to the changes you are talking about 
do not happen, and I want to give an example.
    For example, when Secretary Gates and Secretary Shinseki 
said that they were committed to making sure that the medical 
records of the active duty and the veterans would become 
integrated, and after a billion dollars plus, we still do not 
have it. That raises in my mind some concerns I have about this 
undertaking and what kind of resources it is really going to 
take for us to implement it. Worthy goals, but I think we are 
going to be working very closely with you all to make sure this 
happens. I do not know whether this is biting too much----
    Dr. Yehia. If I----
    Senator Hirono [continuing]. From the outset. What would 
your priority be within these areas that you are designating? I 
am going over, but, Mr. Chairman, you gave us leave, so there 
we go. [Laughter.]
    Chairman Isakson. I broke the rule, so go ahead.
    Dr. Yehia. Thank you, Senator. I just wanted to clarify. 
When we were talking about systems, they are not necessarily, 
like, IT systems or systems that would be built by VA. There 
may be a combination of improvements to existing systems, 
enhancements to ones that exist, solutions that we might 
purchase from the private sector. The word ``systems'' is just 
a term to describe, for example, customer service or care 
coordination. It does not necessarily mean there is a platform.
    Senator Hirono. OK.
    Dr. Yehia. It is just the actual area of work.
    Dr. Shulkin. I would just add, to be very specific, 
Senator, the $421 million that we are requesting from 802 
funds, not new additional monies, would be to fix the problems 
that currently exist in the Choice Program. This is to make the 
veteran experience better that we know is not working well for 
veterans.
    The biggest part of that, $300 million of the $421 million, 
is to build what we could call a veteran portal, a place where 
veterans can go, get the information on their care, have it 
coordinated with care from the private sector and the VA. 
Without effective information sharing between the private 
sector and the VA, this plan cannot work and it will not work 
for veterans. That is the majority of that money that we are 
asking----
    Senator Hirono. When you say this plan, are you talking 
about the Choice plan?
    Dr. Shulkin. The new Choice plan, the plan that we have 
delivered to you, the new Veterans Choice plan, about how we 
are going to work better with the private sector, needs to have 
effective care coordination and information exchange, and that 
is really the majority of the $421 million.
    Senator Hirono. I think we just want all of this to 
actually happen. Thank you, Mr. Chairman.
    Chairman Isakson. Thank you, Senator Hirono.
    Senator Rounds.

        HON. MIKE ROUNDS, U.S. SENATOR FROM SOUTH DAKOTA

    Senator Rounds. Thank you, Mr. Chairman.
    I would like to follow up on what the Senator from Hawaii 
is speaking about with regard to the portal itself and the plan 
on how you would implement it. I am curious. Are you planning 
on using internal resources to accomplish this or will you be 
using a third party to actually create the enhancements to 
existing software? How do you plan on doing this?
    Dr. Shulkin. The first part of the plan, Senator, is to 
identify the systems that we want and then make a build/buy 
decision. We do not have an answer to this now. I will tell 
you, though, that our experience, and we are often reminded 
about this from Members of Congress, about building all these 
systems ourselves is not always the best. We are going to be 
very open to, if this exists in the private sector, if we can 
buy this off the shelf, because time is of the essence and 
execution is more important, we are going to have the 
intellectual integrity to make that choice.
    Health information exchanges, another word for portals, are 
very, very robust now. They are out in the community. Many 
private sector institutions that I have been affiliated with 
have functional HIEs, health information exchanges. We are 
certainly going to look at that option.
    Senator Rounds. I am one of those skeptics, and I guess the 
reason why I bring up the discussion is that I think there is 
no reason for the VA to try to reinvent the wheel if it already 
exists. I would expect that there would be the opportunity 
within the private sector to find competitive proposals that 
are out there in terms of quality and cost. So, I think what I 
am asking today is, is that the primary approach you would use, 
or is that going to be the fallback position with the intent to 
look internally first?
    Mr. Gibson. I would tell you, with our new Chief 
Information Officer, LaVerne Council, who comes to us from 
Johnson and Johnson, where she had the same position, her bias 
on every system is to go commercial off the shelf. That is the 
default position that we take until we have determined that we 
are unable to do that.
    Senator Rounds. Very good. How about with regard to the 
discussion about the providers and the provider networks that 
are out there right now currently? I believe in your early 
testimony, Mr. Secretary, you indicated that the providers 
already included would include, and I believe you said 
Medicaid, individuals who are eligible for providing services 
through Medicaid. Is that correct, or----
    Mr. Gibson. One of the changes that Congress passed 
recently, at our request, was that the original Choice Act 
required us to only use Medicare-qualified providers, and if 
you stop and think about it, there are some--say, obstetrics, 
for example--you are not going to find any Medicare providers 
in that space.
    Senator Rounds. Correct.
    Mr. Gibson. We asked to open the aperture on providers to 
include Medicaid providers to allow us to reach into some of 
those other specialties.
    Senator Rounds. Now we would be talking about not only 
Medicare providers, but also Medicaid providers, to all be 
currently eligible as qualified providers under your 
guidelines?
    Dr. Yehia. Those providers, you have to be--if you are a 
Medicare provider or a Medicaid provider, you meet that 
standard and then you would have to join the network. A veteran 
cannot go to any specific Medicare or Medicaid provider right 
now. They would have to use the network providers, which are 
made up of those type of doctors.
    Senator Rounds. I do not mean to cut you off, but I am 
going to try to keep closer to a timeframe here in deference to 
the Chairman. If you have an individual who, though, is 
identified as being a quality provider through Medicare or 
Medicaid, the option then becomes theirs to make a decision 
whether or not to join your network and not a matter of 
stepping through another hoop provided by the VA for 
determination of eligibility? It would be the providers' 
decision?
    Dr. Yehia. Let us say there is a doctor that takes Medicare 
or Medicaid in the community but they are not part of the 
network. They can actually go to our contractor and say, I 
want, you know, Dr. Smith, and our contractor will reach out to 
Dr. Smith, give him a provider agreement to sign, and they 
would become part of the network and that veteran can go to 
that doctor.
    Senator Rounds. Fourteen months ago, there was a concern 
that you were using outside vendors to provide for those 
networks. Today, as I understand it, you are looking seriously 
at doing your own network itself. Why would you now have the 
expertise to do it yourself if 14 months ago you did not? I am 
curious.
    Dr. Shulkin. I do not think we have made that decision, 
Senator. I think this is another example of we are going to 
look to what is available in the private sector to help us with 
that and we are going to look whether if we cannot get that, 
then we would have to look internally, but we have not made 
that decision.
    Senator Rounds. Do you intend that the provider networks 
also include optometrists?
    Dr. Shulkin. Yes.
    Senator Rounds. That would be a major change, then, over 
what it is today.
    Dr. Shulkin. We have optometrists in our network.
    Senator Rounds. I understand, but in many cases, you have 
licensed optometrists in communities where at this stage of the 
game, they have not been found eligible until they have been 
approved by some sort of VA determination up front. I have 
actually had veterans who have gone in, gone to their own 
optometrist in a town like Pierre, South Dakota, and then when 
they go to get their eyeglasses, they are told, I am sorry, but 
you do not have a qualifying optometrist giving you this 
information, so we are not going to give you your eyeglasses. 
What I am curious about is, included in this in the future will 
be an opportunity for optometrists to be included in this same 
category of providers?
    Dr. Shulkin. Umm----
    Senator Rounds. Medicare or Medicaid eligible----
    Dr. Shulkin. I do not know the situation that you are 
referring to. We would be glad to track that down for you, by 
the way, but----
    Senator Rounds. It took this veteran 6 months to get a pair 
of glasses.
    Dr. Shulkin. Yeah, and that should not happen. We do need 
to have a contractual relationship with a provider today for us 
to be able to exchange money with them.
    Senator Rounds. In this case, they were not asking for any 
money.
    Dr. Shulkin. OK.
    Senator Rounds. All they wanted to do were to get glasses 
through VA----
    Dr. Shulkin. Fill the glasses----
    Senator Rounds [continuing]. And they would not accept the 
prescription from that optometrist----
    Mr. Gibson. That is inappropriate.
    Senator Rounds [continuing]. A qualified optometrist.
    Dr. Shulkin. Yeah.
    Senator Rounds. We are not going to see--you would see this 
as going away, if this happens?
    Mr. Gibson. That makes no sense.
    Dr. Shulkin. We are going to have criteria to get into the 
network, and once you are in the network, once you are accepted 
into the network, we want all those paperwork authorizations to 
be minimized.
    Mr. Gibson. But, I think the very simple example here is a 
veteran has a prescription for his eyeglasses. He wants to come 
to VA to get his prescription filled. He ought to be able to do 
that right this minute.
    Senator Rounds. That is right.
    Mr. Gibson. No reason why that should be happening like 
that.
    Senator Rounds. That is the way we saw it, as well.
    Mr. Gibson. Yes.
    Senator Rounds. In fact, we offered to go and pick up the 
eyeglasses for the veteran and that would not work, either. I 
am happy to hear that you are--it sounds like you are on the 
right track. Hopefully, we will get this resolved.
    Mr. Gibson. Unacceptable.
    Senator Rounds. Thank you. Thank you, Mr. Chairman.
    Chairman Isakson. Senator Murray.

        HON. PATTY MURRAY, U.S. SENATOR FROM WASHINGTON

    Senator Murray. Well, thank you very much, Mr. Chairman. 
Thank you for having this hearing.
    Secretary Gibson, I wanted to ask you, some of the 
proposals out there would have the VA health system provide 
only some of the so-called VA specialties, like PTSD or TBI 
treatment, and get the VA out of the business of doing some 
things like primary care and rely just on the private sector 
for that type of care. That may be concerning to veterans who 
want to use the VA facilities, and cutting out that much work, 
I think could have serious consequences for our VA hospitals 
and our providers.
    I wanted to ask you, can you talk with us about some of the 
impacts of taking away some of the fundamental lines of care.
    Mr. Gibson. Yes. Ma'am, I would tell you, at the very heart 
of what we must preserve is primary care. I would tell you 
there is no other organization that integrates mental health 
care, large health care organization in America that integrates 
mental health care into primary care the way VA does. So, I 
think primary care will always be a mainstay of VA health care.
    I think as we get into other situations--we have talked 
about make versus buy decisions in the context of different 
administrative parts of running this program. I think over a 
period of time, we wind up, if we are doing our job, we wind up 
getting into make versus buy decisions elsewhere. It is 
interesting that we talked about optometry, for example. You 
can get eyeglasses anywhere. I mean, there are optometrists 
anywhere. So, I think at some point and in some locations, we 
are going to have to make a decision. Are we better off 
continuing to use our scarce space and our scarce resources to 
deliver basic optometry services, or do we refer that into the 
community where veterans can get a good service at good value 
that is very convenient for them.
    I do not see any of those kinds of core services--spinal 
cord injury, Traumatic Brain Injury, polytrauma--I have got to 
tell you, we were in Tampa a couple of months ago and Rich 
Carmona, Dr. Rich Carmona, the former Surgeon General of the 
United States who saw what we were doing in polytrauma there 
said, ``Do you realize, this is world class? This is not just 
best in class in America. There is nobody in the world that is 
doing what VA is doing in polytrauma.'' We are not going to 
sacrifice that for our veterans.
    Senator Murray. OK. I also wanted to ask you about 
emergency care. It is really important that this program reform 
emergency treatment to be more permissive in allowing our 
veterans the use of emergency care or urgent care. However, as 
I look at your plan, it seems to require veterans to pay a 
copay of up to $100 no matter what. I am kind of amazed that we 
would ask our veterans to pay for care for service-connected 
conditions. That is a major reversal of a fundamental tenet of 
our care for veterans. Can you comment on that?
    Dr. Yehia. Sure. Thank you for that question. We agree with 
you that there needs to be fundamental reforms to the ER system 
right now. Because of various rules and regulations and laws, 
we deny about a third of ER claims. Today, when a veteran goes 
to the ER, if they were not able to get preapproved by VA or 
they bypassed a VA, they could end up getting stuck with a bill 
that is way more than $100, on the order of thousands of 
dollars. As a result of that behavior, right now a lot of 
veterans end up deferring ER care, and so they end up driving 
to the VA or waiting for our doors to open to be seen and that 
is really creating the perverse incentive.
    What we were trying to do here is to be able to responsibly 
address the management of ER care. What we propose is removing 
all those different restrictions so that a veteran can feel 
comfortable that when they go to the ER, they will get seen and 
VA will be able to pay the bill.
    The idea of cost shares is really modeled off of health 
plans in the private sector and TRICARE, which is we do not 
necessarily want everyone to go to the ER for, you know, the 
sniffles or if they have a paper cut. We want them to be able 
to call their primary care doctor, have that dialog, and 
hopefully be seen----
    Senator Murray. Even for service-connected, though?
    Dr. Yehia. Regardless of service-connected or non-service-
connected, those are the same issues. If you only have a little 
cold and need to be seen by your primary care doctor, we want 
to expedite that so you get seen in the VA or by your primary 
care physician in the community rather than going to the ER.
    There are many different ways that we can do it. If we 
remove that cost share, that is something that, I think, is up 
for discussion. I just would say that the actual cost of that 
program would be well more than what we outlined in this plan.
    Senator Murray. OK. Well, I think we have always told our 
veterans we would care for them for service-connected issues. 
This would be a major reversal of policy if we are all of a 
sudden charging them a copay for emergency visits.
    Dr. Yehia. I think part of the problem----
    Senator Murray. Service-connected.
    Dr. Yehia. We have a third of claims that are denied even 
for service-connected claims. Even the system, the way that it 
works today is if you do not follow all these different rules 
and regulations that are in place, even for a service-connected 
condition, they get stuck with a very large bill and ambulance 
bills. We were trying to find a way to be able to sustainably 
be able to manage and address that issue.
    Senator Murray. OK. I am out of time, but I did want to ask 
you, Secretary Gibson, how are you going to make sure that the 
care veterans receive in the private sector is high quality, 
timely, and coordinated? How do you do oversight of that?
    Mr. Gibson. This is where we are going to have a 
comprehensive set of quality measures, of metrics, both outcome 
metrics and process metrics to be able to measure, and the 
advances in outcomes measurement and quality measurement, 
actually my area of training, has become so sophisticated that 
VA has data sets that really are unparalleled by any health 
system in the country that we can produce this type of data.
    Senator Murray. I am sorry, I am out of time, so I will 
follow up with you separately.
                Prepared Statement of Hon. Patty Murray
    Thank you, Mr. Chairman, for holding this hearing and thank you to 
the witnesses for appearing here today.
    I think everyone in this room agrees that our country has a duty to 
do everything it can to care for its veterans.
    Unfortunately it is clear that our Nation is falling far short of 
its duty to honor our veterans when it comes to providing timely, high-
quality VA health care.
    A year ago we passed sweeping legislation, which in addition to 
creating the Choice Program, was intended to tackle the most pressing 
problems and give the VA new tools to address some of its longstanding 
challenges.
    Unfortunately, despite these efforts I continue to hear from 
veterans across my home state of Washington that they have to wait too 
long for care. And when they do receive the care they need, it's often 
inconsistent or unclear what they should do next.
    As the daughter of a World War II veteran, I refuse to let 
substandard care be the status quo.
    VA is operating many different programs so veterans can receive 
care outside of the system. But none of them are coordinated or 
consistent. It's a mess that is impossible for VA to administer, much 
less for veterans to understand and use.
    After hearing from so many veterans in my home state, I knew this 
problem could not be ignored. So more than one month ago, I spoke on 
the Senate floor to urge the VA to create a new plan for non-VA care 
for the future.
    I called on my colleagues to help me help the VA build a program 
that is veteran-centered and one that would address growing 
bureaucracy--and tackle problems with leadership, staffing, and massive 
capital costs.
    I also urged the VA to ensure that any new plan is easy for 
veterans to understand and access. That means it must have clear 
eligibility, as too many veterans have been unsure what they qualify 
for and when they can be referred to the community for care.
    It is essential that any final plan to consolidate care ensure that 
there are simple and consistent procedures for providers to deliver 
care and get reimbursed quickly.
    The new plan must also ensure high quality care for veterans. This 
includes oversight and coordination of care.
    A new system must be flexible enough to meet local needs and use 
non-VA providers to fill in the gaps that VA can't meet.
    And the new system must be cost effective and fully resourced. VA 
nearly ran out of money and would have had to shut down the entire 
health care system earlier this year. That can never happen.
    So VA's plan that we are discussing today asks many of the right 
questions, and recognizes the importance of each of those criteria I 
outlined. But I have some concerns, and we're going to need to make 
changes.
    And, as VA looks to implement their new proposal, it must be clear 
with Congress about what it needs to effectively implement the new non-
VA care system and ensure our veterans are getting care.
    Veterans deserve a system that works, not one that is torn apart 
and weakened over time. So, the answer isn't just to dismantle the VA 
and leave veterans to fend for themselves, as some proposals would do.
    It's important that we are having this conversation today--about 
what is going on at the VA and what the problems are. But it needs to 
be followed by a plan that pursues an ``all of the above'' approach.
    So we have a lot of work ahead of us as we evaluate VA's new plan 
to make sure it meets all of those criteria. With the demand on the VA 
only continuing to grow, this is a pivotal moment in deciding how we 
provide care for veterans.
    We need to get this right. And I look forward to working with all 
of you on this important task.
    Thank you, Mr. Chairman.

    Chairman Isakson. Senator Cassidy.

         HON. BILL CASSIDY, U.S. SENATOR FROM LOUISIANA

    Senator Cassidy. Thank you, Mr. Chairman.
    The data sets the VA has look at quality measurements. 
Those are for VA physicians. But Senator Murray asked about 
your outpatient. Are you going to construct that same data set 
for outpatients?
    Dr. Shulkin. Yes, you would have to. If you want to have an 
integrated system of care and seamless between private sector 
and VA, you have to collect those measurements. Part of the 
high-performance network----
    Senator Cassidy. I accept that.
    Dr. Shulkin. OK, fine.
    Senator Cassidy. And limited time.
    When the Chair asked you earlier, I think it was he. He 
spoke so long, it could have been he almost certainly----
    [Laughter.]
    Senator Cassidy [continuing]. In regards to the metrics, 
you mentioned, as well, some qualitative measure of how the 
patient interacts with the physician. That is not defined 
currently by anyone, so you are apparently going to do surveys 
of the patient to see their satisfaction with a particular 
provider.
    Dr. Shulkin. Well, we do surveys. That is part of outcome 
measurement systems. But, what I was referring to the Chairman 
is this is like dating. You know, you do not know what that 
attraction and that magic is----
    Senator Cassidy. I accept that. So, you need a certain in--
--
    Dr. Shulkin. Right.
    Senator Cassidy [continuing]. It is going to have to be a 
robust data set.
    Dr. Shulkin. Yes.
    Senator Cassidy. Now, at the risk of just sounding like a 
sour lemon, I have asked for data before from the VA on data 
that was specific to the New Orleans VA and I was told that you 
could not segregate it from the aggregate.
    Dr. Shulkin. Not true, and I apologize. We will get you 
whatever data you need. We can absolutely segregate it for that 
VA and we have robust metrics.
    Senator Cassidy. Second, I went recently to a very well 
run, basically cross between a staff model HMO (health 
maintenance organization) and an IPA (independent practice 
association), which is what you are aspiring to, but much 
smaller and much more able to bring every physician in and 
counsel her or him. They found their data systems very 
difficult to--they are very successful, but they are nowhere 
approaching the goals that you are putting.
    Now, it gives me pause when you suggest to us that you can 
achieve that when a much smaller organization has been unable 
to do so with a more homogeneous set of providers. Any comments 
on that?
    Dr. Shulkin. First of all, I would very much appreciate 
being put in touch with them so we could see what they are 
doing and learning. But, as you know, my experience is from the 
private sector where I have built these systems. I have done 
this before, where we do have metrics. These are not perfect 
metrics; I am not suggesting that they are. They get better 
every year and they will continue to get better. I believe VA 
has the capabilities to actually lead in this in American 
medicine.
    Senator Cassidy. But, for the data to be worth anything, 
the physician who is seeing the patient will have to spend a 
significant amount of time interacting with the metrics, which 
means that a certain bulk of their patients would have to be VA 
patients in order to make it worth their while. You see where I 
am going with this. Which means that your ambition and the 
money that we are going to apparently provide for this 
ambition, I am not quite sure I see it as being a realistic 
ambition.
    Dr. Shulkin. Yeah. If you involve your clinicians in data 
gathering and metrics, it is going to fail. I absolutely 
understand your warning. That is not what our intent is. The 
advances in outcomes measurement have come off of 
administrative systems merging with the clinical record. As you 
know, VA has the longest experience with an integrated 
electronic record. We have more clinical data we can extract, 
and then you combine it with administrative claims data and 
this is what we are talking about doing. We are not talking 
about turning doctors into data collectors.
    Senator Cassidy. Then let me ask this. Just because we are 
here, as Secretary Gibson once said, about the veteran. I was 
in a conversation with a very high-profile medical system 
director. If I mentioned his name, we would all know who he is. 
He had a very dim view of quality in the VA, pointing out that 
more people in the VA lose limbs from diabetic foot ulcers, 
which is really a failure of management, than do from trauma, 
and strongly saying that any well run private ACO (accountable 
care organization) or system which had the same outcomes as VA 
would probably lose their license.
    I am just channeling right now. I am sure there are 
statistics that could prove or disprove this contention. But 
the point is, if the VA has so far to go in quality but they 
are passing judgment on other systems that quite likely will 
provide statistically, according to this gentleman, superior 
care to that rendered within the VA, again, it seems a little 
bit like the judge is guilty. Any thoughts on that?
    Dr. Shulkin. Yes. Yes. First of all, I would love to talk 
to this person, and I would love to show him that since this is 
not an argument between difference of opinions, there is data 
on this. The data actually show that VA does as well or better 
in almost every quality metric study done. I have just reviewed 
nine additional studies showing VA's quality is better.
    Now, no system is better in everything. I am not suggesting 
the VA is better in every metric. But when you take a look at 
screening, adherence to well accepted evidence-based protocols, 
risk-adjusted mortality, risk-adjusted length of stay, the VA 
performs better than the private sector and certainly as well 
in these studies. I would be glad to share that with you. Just 
came from it an hour before the hearing, a meeting with all of 
our health services researchers who do this type of work and 
have the data to prove that.
    Senator Cassidy. OK. I yield back. Thank you.
    Chairman Isakson. Senator Manchin.

     HON. JOE MANCHIN III, U.S. SENATOR FROM WEST VIRGINIA

    Senator Manchin. Thank you very much, and thank all of you 
for your work you do.
    We all have the concerns over VA and we want to make sure 
they get the best service possible, and CBOCs right now count 
within that 40-mile. That seems to be our problem in rural West 
Virginia and I know in rural America, and when that situation 
happens, we do not have the expertise, as you could imagine. 
Then, there is a time elapse that goes on before they can get 
the proper care they need.
    I know you all wanted to move in that direction. Do you 
believe that steps in the direction you are going right now is 
going to relieve that veteran who cannot get the expertise 
service, that he or she will not have to petition and wait and 
go through a period of time before they can get the services 
they need? You can understand the frustration, right?
    Mr. Gibson. That is precisely the objective, and when we 
describe the existing system as being broken, what you are 
describing is the broken----
    Senator Manchin. That is----
    Mr. Gibson. Yes.
    Senator Manchin. And I think we all have it, do we not?
    Mr. Gibson. Yes. Yes.
    Senator Manchin. All of us have it. And, this takes effect 
when?
    Mr. Gibson. I am sorry?
    Senator Manchin. The new plan. When----
    Mr. Gibson. What you see in the plan here, as Dr. Yehia has 
been describing, is an iterative process. What we do is we 
start going through and improving the veterans care experience 
as we have the capability to be able to do that.
    Senator Manchin. I would say in rural America, especially 
in rural West Virginia, if you want to start and find out if it 
works or not, that would be the place to come, because that is 
where our greatest challenges are. We do not have these large 
areas where you have trauma centers and all that going on. That 
is the thing that we are running into, and how we can alleviate 
this.
    The frustration that I think that Senator Cassidy and 
everybody, you know, they deserve the best. They really do. And 
they might have a family member that is able to go and get top-
notch expert. They do not have that opportunity, and that is 
just not right. It is just not fair. I know that is what you 
want. We do not have to reinvent the wheel here.
    Mr. Gibson. So----
    Senator Manchin. Tell us how we can help you from this end 
of the table simplify the process that we all want.
    Mr. Gibson. Well, that is what this plan accomplishes, and 
there are explicit legislative requests that are part of this 
that will help us do that.
    Two quick comments. I really bristle at the 
characterization that VA care is bad. That is not an accurate 
characterization of VA care, period. I will tell you that there 
is variability within the VA system, variability of health care 
outcomes, variability of access. Part of our challenge is to 
diminish that variability. I would tell you, go out and look in 
the private sector. In fact, there are references in the 
Independent Assessment to the fact that you actually find, even 
in well regarded HMOs, wider variability in health care 
outcomes than you find in the VA system.
    Senator Manchin. Mm-hmm.
    Mr. Gibson. That is point number 1.
    Point number 2, as I mentioned in my testimony, care in the 
community is going to be there for VA for the long haul. It is 
either a specialized service that we need to rely on the 
community to be able to deliver because we do not have the 
critical mass to do it----
    Senator Manchin. True.
    Mr. Gibson [continuing]. Or it is because of geography, 
extraordinary geography, or it is because of extraordinary 
demand, those three circumstances. The challenge we have right 
now is we have seven different programs out there. They are 
confusing to veterans. They are confusing to providers. And 
they are confusing, quite frankly, to VA staff. If we do not 
streamline and simplify all that so that we can make it--Baligh 
and I were in----
    Dr. Yehia. Charleston.
    Mr. Gibson. Charleston----
    Senator Manchin. Is that West Virginia or----
    Mr. Gibson. No, South Carolina. Sorry. Two weeks ago, we 
sat and we watched what our staff was going through in order to 
set up a Choice referral. It would dumbfound you.
    What we have here is we have this patchwork quilt and we 
have got to go through and streamline this. We have to lean it 
all and make sure that it is working for the veteran, make sure 
it is working for the taxpayer, and make sure that it is 
working for the community provider, as well. That is where you 
get the kind of seamless care that we are talking about 
delivering here.
    Senator Manchin. What are you able to do without us? What 
are you able to do and you believe that you have the authority 
to do without us?
    Dr. Yehia. Yes----
    Senator Manchin. Because if you are counting on us to get 
something done quickly, it does not work that way here. 
[Laughter.]
    Dr. Yehia. There are certain things that are outlined in 
the plan that we are executing now. As the Deputy described in 
the beginning, there are iterations of Choice. The Choice of 
today is very different than the Choice of a year ago----
    Senator Manchin. Right.
    Dr. Yehia [continuing]. And that really is because of this 
partnership with this Committee and the Hill, and we are 
continuing to build on that. There are a couple teams, or a 
couple items that we have actually outlined that are within the 
control of VA that we want to start working on now, and we are 
actually calling these our quick wins. We want to be able to 
get those done in the next couple months, and that is to, one, 
tackle this referral and authorization process. There are 
certain things that we can lean up and make it a little bit 
smoother. We want to really leverage the MyVA customer service 
training for our folks in the community so that when a veteran 
calls or they have questions about community care, we can 
answer them.
    Then for our core network, those specific relationships 
that we have with DOD and academic teaching partners that 
really form the foundation of community care, we want to make 
sure that the way we partner with them is as streamlined and as 
simple and principles-based as possible.
    Those are just a couple of the things that are within VA's 
control that we are working to execute now.
    Senator Manchin. Well, again, I will just finish up very 
quickly. My time is running out. I would say that in a State 
such as West Virginia, which the population is less than two 
million people, disproportionately high VA population because a 
very patriotic State and they have served in every conflict. We 
look for any type of way that we can fight somebody----
    [Laughter.]
    Senator Manchin [continuing]. Especially anybody trying to 
attack America. But, with that being said, you are going to 
find in these small rural States a disproportionate number of 
veterans. I would encourage you, if you are looking if 
something would work, and trying to come into some of our rural 
areas, we can get you feedback immediately. You can find out 
without going through another year or two study very quickly if 
it is going to serve those people or not. I would encourage you 
to come to Charleston, West, by God, Virginia, which is 
different than the other Charleston or the other Virginia, OK? 
[Laughter.]
    Senator Manchin. Thank you.
    Chairman Isakson. Senator Tillis.
    Senator Tillis. Mr. Chair, I am going to ask that you defer 
to Senator Sullivan. The truth is, the only reason I got in the 
door first was he was gentleman enough to keep the elevator 
open for me, so----
    [Laughter.]
    Chairman Isakson. Senator Sullivan.

          HON. DAN SULLIVAN, U.S. SENATOR FROM ALASKA

    Senator Sullivan. Oh, OK. Thank you, Mr. Chairman. Thank 
you, Senator Tillis. Very kind of you.
    Well, look, Dr. Shulkin, Mr. Secretary, I think you guys 
probably know where I am coming from on this. I am a big fan of 
yours. I really appreciate you coming up to Alaska. Senator 
Manchin talked about going to rural communities and seeing what 
the frustrations are. You got a heavy dose of it in my State 
when you agreed to come up in August.
    Dr. Yehia, you are talking about quick wins. I thought we 
were going to have a quick win in Alaska, and you laid out a 
plan. One of the things that I emphasized when you came up 
there to the veterans was, hey, I know you guys are frustrated, 
but please be calm. You did not create the problem. You are 
here to fix the problem. But, I need to tell you that now I am 
the one getting frustrated, because it has been 100 days since 
you guys were up there. You talked about your six points, which 
I still have here. I appreciated it. Here they are, on the 
Alaska pilot program. I am getting hit every day in my State.
    I was on a plane coming down here 2 weeks ago. Three 
veterans within a circle of two rows on the airplane were 
complaining to me, and I was telling them, hey, do not worry. 
We are on it. The VA has got a pilot program. It is going to 
have a win, a quick win in Alaska. Then, my staff gets told 
today that a lot of what you told me and committed to me--and I 
am telling veterans this in my State--is now not going to 
happen.
    We were told this is going to happen in November, mid-
November, and now we are told maybe not. Maybe indefinitely it 
is not going to happen. No Alaska pilot program. You guys are 
asking for $13, $14 billion to fix the Choice Act and you 
cannot even fix it in my State, where you know, Dr. Shulkin, it 
is a frickin' disaster.
    I am a little bit upset, and I have been very measured. I 
have been trying to be measured here for months. You saw the 
way we operated up there in Alaska. You saw the problems. We 
are not making this up. This is a nightmare. And my veterans--
who, by the way, more veterans per capita in my State than any 
State in the Union--it is not funny. They are not being served 
right. You guys are making promises that now I am learning that 
your staff is walking all this stuff back, all your six points.
    When are you going to fix the problem in Alaska like you 
committed to when you were there in August, and why are you 
walking back commitments that you made to me publicly, that was 
made here on October 7 publicly about an Alaska plan? All being 
walked back, and I just do not understand. On behalf of my 
veterans, I am pissed.
    Dr. Shulkin. Yeah. Yeah.
    Senator Sullivan. What the hell is going on?
    Dr. Shulkin. OK, Senator. First of all, you have been 
consistent from prior to my confirmation through now that you--
--
    Senator Sullivan. Even when we saw each other on Veterans 
Day.
    Dr. Shulkin. A hundred percent consistent that the 
situation was not acceptable to you. You asked me to come up 
there. You were absolutely correct about how the veterans felt 
in Alaska. I understood that, and----
    Senator Sullivan. But you saw the problems yourself.
    Dr. Shulkin. I did, and you have been a tireless advocate 
for veterans, and I am not walking back on this----
    Senator Sullivan. But your staff was walking back----
    Dr. Shulkin. My staff, who I bet is watching this right 
now, is listening to me as I say we are not walking back on 
this. I made a commitment to you and to the veterans and we are 
going to see this through.
    Senator Sullivan. OK. When?
    Dr. Shulkin. Here is what has been done, OK. Number 1, a 
virtual call center was established, staffed by 25 people who 
do nothing but answer the phone for Choice.
    Senator Sullivan. Well, remember, you said you were going 
to get people----
    Dr. Shulkin. OK----
    Senator Sullivan [continuing]. In Alaska.
    Dr. Shulkin. So----
    Senator Sullivan. One of the biggest problems that you saw 
was people down in wherever the heck it was----
    Dr. Shulkin. Absolutely. So----
    Senator Sullivan [continuing]. Scheduling for Alaska. They 
did not even know the----
    Dr. Shulkin. We have through TriWest a virtual call center 
only answering for Alaska. I said to you I want people in 
Alaska scheduling and----
    Senator Sullivan. My team was told you guys are not doing 
that.
    Dr. Shulkin. We are doing it, but it required a contract 
modification to a Federal contract, which is a bigger deal than 
I knew when I came into the government. We are committed to 
doing that. That is going to be in place. The contract 
modification happened November 2, which is to embed staff in 
Alaska. That happened November 2. TriWest is now, now that that 
contract modification happened, hiring staff. They believe they 
will be in place in 6 weeks.
    Second, the VA Alaska staff have taken their own people and 
now assigned them to be Choice people in Kenai, in Anchorage, 
and in Fairbanks. They have VA Alaska staff that are there 
helping veterans every day get through the Choice Program. This 
is the band-aids, but it is being done now to help veterans. We 
are not walking back on this plan. It is taking longer than you 
or I want, and you are right to be impatient.
    Senator Sullivan. Mr. Chairman, if I may, I think the 
Alaska plan, what you are trying to do, has implications not 
only, of course, for my State, but nationally----
    Dr. Shulkin. Yes.
    Senator Sullivan. I think that you saw the problems. You 
came up with a plan, supposedly, to fix it. Now we are being 
told by your staff that they are going to work on the national 
issues before they get to Alaska. The whole point, according to 
our 3 days spent together----
    Dr. Shulkin. Yeah.
    Senator Sullivan [continuing]. Going throughout the State 
was to fix this, look at it as a template--many of the Choice 
Act changes were templates from Alaska anyway--and then try to 
use the lessons that you do fixing the Choice Act in Alaska for 
the national approach. Now you are talking national----
    Dr. Shulkin. Yeah.
    Senator Sullivan [continuing]. And you are telling me, 
wait--your staff is--wait for the national to be fixed and then 
we will get to Alaska. That is exactly the opposite of what you 
committed to me on.
    Dr. Shulkin. No. No. I do not want any of my staff to 
believe that Alaska is not a priority and that we are not going 
to do it. We have embedded staff one place prior to Alaska, and 
it is already happening in New Orleans, but it was because you 
started it in Alaska. It got implemented sooner in New Orleans. 
We are waiting to hire the staff now that the contract mod is 
done and it will be in place.
    We are going to do this in Alaska, and you are right, other 
places around the country have said, we want that, and we have 
started the discussions in other places. But the only one that 
is actually ahead of you is New Orleans right now.
    Senator Sullivan. Well, Mr. Chairman, if I can get a 
commitment from you, you, Mr. Secretary, on continuing to work 
with my team to implement what you have already committed to 
me--we cannot wait----
    Dr. Shulkin. Absolutely.
    Senator Sullivan [continuing]. The idea of you guys pushing 
this back--remember, the commitment was right here----
    Dr. Shulkin. Absolutely.
    Senator Sullivan [continuing]. In November, it was all 
going to be done. It is not done.
    Dr. Shulkin. Yes. I know the Deputy Secretary and I have 
spoken about this. He is committed to it. The Secretary is 
committed to it. He was also in Alaska, as you remember. He 
absolutely understands what you are talking about. You have 
never deviated from this. We are not deviating from it. It is 
taking longer, but that is why our staff in Alaska are doing 
what they can to help veterans right now. It is not enough and 
we are still hearing the comments and we are going to stick 
with it. I do not want to be giving excuses. I only want to fix 
the problem in Alaska and we are going to stick at it.
    Senator Sullivan. OK. All right. Thank you.
    Thank you, Mr. Chairman.
    Chairman Isakson. I just want to observe that this kind of 
dialog is exactly what this Committee is for, for us to work 
with the administration and with the Department to come 
together and solve solutions in Alaska, Montana, Georgia, and 
Washington State. I appreciate your active engagement and I 
appreciate your attention to it. I think we had it on the 
Kansas issue earlier and the Alaska issue now. I think we found 
some meaningful common ground on what we need to do better and 
we want to help you be able to do that.
    I am going to recognize Senator Tester in 1 second and then 
Senator Tillis, but I am going to have to leave for about 20 
minutes. I am going to relinquish the gavel to the Senator from 
Kansas, Senator Moran, and then I will return later on. I just 
want to make you aware of that.
    Senator Tester.

           HON. JON TESTER, U.S. SENATOR FROM MONTANA

    Senator Tester. Thank you, Mr. Chairman, and I want to 
thank all of you for being here today.
    The proposal gets implemented, and this, I guess, is for 
you, Deputy Secretary Gibson. Do you see an increase in the 
overall ratio of veterans being referred to non-VA care?
    Mr. Gibson. I think it is highly likely that there will be. 
I think we are going to see, from looking at where we are right 
this instant, you know, we saw a disproportionate increase in 
care in the community in 2015----
    Senator Tester. OK.
    Mr. Gibson [continuing]. And I think we are going to see a 
disproportionate increase during 2016, as well.
    Senator Tester. Do you anticipate this is going to, because 
we do not talk about money enough, I do not think, in this 
Committee, but do you think this is going to end up costing 
more than if the VA provided it?
    Mr. Gibson. That is where I was alluding earlier to, to 
another context for make versus buy decisions. I think we have 
to get to the point where we are looking with a business eye 
about those make versus buy decisions for care in different 
markets and different situations. We need to look for where we 
can buy it, where we can get quality care at better value. Then 
we need to look really hard at buying it in the community as 
opposed to delivering it ourselves, make more efficient use of 
the space and the resources to deliver care that we cannot buy 
in the marketplace.
    Senator Tester. I will ask it this way. Overall, once the 
program is implemented, do you anticipate it costing, after you 
do your metrics, do you anticipate it costing more money for 
the veterans you serve per veteran, or the same, or less?
    Mr. Gibson. I would like to think that it would be less per 
veteran.
    Senator Tester. Is that the way it is today?
    Mr. Gibson. I need to rephrase that----
    Senator Tester. Yeah.
    Mr. Gibson [continuing]. Because part of what we are 
already seeing as we improve access to care and make the care 
experience better is more veterans are coming to us for more 
care.
    Senator Tester. Yes.
    Mr. Gibson. The bigger part of that is veterans that were 
already coming to us for care are using us for more care.
    Senator Tester. Yes. Right.
    Mr. Gibson. I cannot really say that per veteran, but I get 
the point that you are making.
    Senator Tester. Yeah.
    Mr. Gibson. If we do not become more productive----
    Senator Tester. Yes.
    Mr. Gibson [continuing]. Through all of this, then I would 
say that we have not succeeded.
    Senator Tester. I am going to go to another point, and I 
have a very similar circumstance as Senator Moran talked about 
in Kansas, where we have got CBOCs with no doctors. I think 
that what appealed to me about Choice is in those areas where 
they did not have access to VA health care, they could get 
access. It could actually save the VA some money because of the 
mileage difference.
    All that being said, I am a big fan of VA health care. I 
think that what I hear from veterans in Montana regularly under 
your guys' watch, and it faltered for a while, but under your 
guys' watch, is you do a pretty damn good job.
    The question I have for you is that we are building 
capacity in the private sector. Are we going to continue to 
build capacity within the VA, and how are you going to make 
those determinations of where capacity needs to be built in the 
VA and where you are just going to outsource it to the private 
sector?
    Mr. Gibson. I think a big part of that has to do with where 
we have critical mass. Where we have a critical mass of 
veterans to serve----
    Senator Tester. Yes.
    Mr. Gibson [continuing]. Our analysis shows that we can 
deliver better care at better value----
    Senator Tester. Yes.
    Mr. Gibson [continuing]. Then we should be building 
infrastructure to deliver that care. Where we cannot justify--
--
    Senator Tester. Within the VA?
    Mr. Gibson. Within the VA. But where we cannot justify that 
business decision, we need to be outsourcing.
    Senator Tester. That is solid. Just one more thing that 
follows up with that. In another year, you guys are going to 
probably be gone. It will be a new administration. I hope not. 
I hope you all stay, but you are probably going to be gone. Are 
you laying out a process so that whoever takes your place, 
assuming that you are not brought back, that the transition 
would be seamless and the justification--keep going.
    Mr. Gibson. We are absolutely looking at ways that we can 
institutionalize what we are talking about doing here----
    Senator Tester. That is a good word.
    Mr. Gibson [continuing]. And I would say that one of the 
important roles that this Committee can play----
    Senator Tester. Yeah.
    Mr. Gibson [continuing]. Is to be a source of continuity 
about some of these operational concepts----
    Senator Tester. I think you are right.
    Mr. Gibson [continuing]. As we bridge across 
administrations.
    Senator Tester. You have six or seven different outsourcing 
programs out there. One of them is Project ARCH, which has been 
pretty successful in Montana; had a few hiccups, but not bad. 
Can you just give me a quick word on how that transitions for 
those folks once this plan is in place?
    Dr. Yehia. You are right. Project ARCH has been very 
successful. In fact, we took a lot of lessons from Project ARCH 
as we built this plan.
    Senator Tester. Sure.
    Dr. Yehia. There are a lot of lessons about preserving 
veterans' choice. The whole episode of care came from ARCH. A 
lot of lessons learned about how to work with community 
providers, how to make sure there is a direct connection 
between VA and community providers, and then also from the 
business side----
    Senator Tester. Yes.
    Dr. Yehia [continuing]. Of really having one pot of money 
for care.
    Senator Tester. Sure.
    Dr. Yehia. I think what we tried to do in the plan is 
create these eligibility criteria that focus into these three 
big buckets. One is geography, one is wait time, and one is 
availability of services.
    Senator Tester. Yes.
    Dr. Yehia. For the most part, a lot of the veterans that 
are currently using Project ARCH will be able to continue to 
use community care through one of those three mechanisms. There 
may be some folks that would have to change providers. In those 
circumstances, we want to create a transition plan so we can 
make sure that there is a warm handoff as needed.
    Senator Tester. OK. That is good. What I just want to point 
out is actually the Kansas example, and that is if you do not 
have people on the ground that know what you guys want, it is 
not going to happen. I hope that communication filters all the 
way through middle management to the ground, because you have 
some great folks on the ground.
    The last thing, if I might, Mr. Chairman, the last thing I 
am going to say is that we had a scheduling hearing here a 
month or two ago, on scheduling within the VA. They said they 
are working on it. They said the VA is working on a new 
scheduling program, is that correct?
    Mr. Gibson. Yes, we are.
    Senator Tester. How much is that baby going to cost?
    Mr. Gibson. In fact, there are two or three efforts 
underway. There are some apps. We are actually going to be 
able, within about 6 months, maybe less, we are going to be 
able to provide veterans the ability to schedule an appointment 
for primary care, mental health care.
    Senator Tester. OK. And that was an off-the-shelf program?
    Mr. Gibson. Through a mobile app. This one was developed 
inside VA.
    Senator Tester. OK.
    Mr. Gibson. The other thing--the second leg of this effort 
is what we call VSE, Vista Scheduling Enhancement----
    Senator Tester. Yeah.
    Mr. Gibson [continuing]. Where we have taken and modified--
they actually put a graphical user interface on top of----
    Senator Tester. Right.
    Mr. Gibson [continuing]. The old 1980s-era scheduling 
system----
    Senator Tester. Yeah.
    Mr. Gibson [continuing]. So that it actually looks like a 
21st century app and works like one----
    Senator Tester. OK. So----
    Mr. Gibson [continuing]. And that is happening within the 
next 6 months or so. The longer-term scheduling process is this 
comprehensive replacement, and we are going to do that in a 
very deliberate kind of way, because we are about to deliver 
the field a substantial improvement in scheduling 
functionality. Folks in the field that have seen this thing 
working are awestruck. They cannot believe that we have 
something like that coming that soon.
    Senator Tester. That is the comprehensive one.
    Mr. Gibson. No, this is Vista Scheduling Enhancement----
    Senator Tester. OK. So----
    Mr. Gibson [continuing]. With the graphical user interface.
    Senator Tester. Let me just ask you this----
    Mr. Gibson. Sure.
    Senator Tester [continuing]. Because the last--and good 
people at the panel, but did not give me much hope--they said 
that if I am a veteran and I schedule at the VA and it is the 
first of December and I schedule on the 20th and I get in on 
the 20th, there is no wait time. But, if that appointment was 
delayed until the 25th of December, that is a 5-day wait time. 
That is how it is valued. Is that going to change, because that 
is not real.
    Mr. Gibson. Let me tell you what is real. We want 
appointment scheduling to be either clinically relevant or we 
want it relevant to the desires of the veteran. When you 
measure from what you are describing as the create date----
    Senator Tester. Yeah.
    Mr. Gibson. If I am seeing my doctor for a chronic 
condition and he says, I want to see you back in 90 days----
    Senator Tester. Yeah.
    Mr. Gibson [continuing]. And we schedule an appointment in 
90 days, did I wait 90 days for that appointment? It was 
scheduled coincident with the clinically indicated date. If I 
call in and I say, I need to come see the doctor, see the 
dermatologist, but I am going to be traveling for the next 3 
weeks, when can I get in after that, and we schedule that 
veteran in 24 days, what is my wait time? Did I wait 24 days 
for that appointment?
    What we are trying to do here is make it either clinically 
relevant or relevant to when the veteran wanted to be seen. 
That is where we measure the wait time gap from. There is no 
relevance versus the create date. The large majority of our 
appointments are ``return to clinic'' appointments, and if you 
were looking at wait time data, you would see all kinds of 
examples of people waiting 120 days, or people waiting 60 days, 
or people waiting 6 months, 180 days, for an appointment, when, 
in fact, that is exactly when they were supposed to come in and 
be seen.
    Senator Tester. You are right, except for the fact that--I 
am sorry, Mr. Chairman, I went down this road--but how the hell 
do we measure wait times, because if I am a veteran--look----
    Mr. Gibson. When do you want to be seen?
    Senator Tester. I took my granddaughter to the emergency 
room the other day. Everything worked out fine. I spent 5 hours 
in that emergency room. They looked at her for maybe 20 minutes 
of that 5 hours. I still spent 5 hours in the emergency room.
    Mr. Gibson. Right.
    Senator Tester. When that person sets up an appointment, 
how are we to know which is which? That person has a pain in 
his heart and needs to get in today and was put off for 3 days, 
you are right, it is more critical. But how are we going to 
know as an oversight committee what is going on, because, quite 
frankly, why this is important, and I do not mean to be 
critical, but why this is important is we had a real bad 
hearing here on Phoenix VA a few years ago. It was a horrible 
hearing. So, how are we going to know the metrics? That is all. 
You can get back to me on that, because Senator Tillis wants to 
ask some questions, too. But, the question becomes, how do we 
do any oversight? I hear you. I understand. How do you get 
oversight on that?
    Mr. Gibson. We publish that data. We publish that data 
every 2 weeks.
    Senator Tester. We will take this up offline. I mean, the 
truth is that it does not work so well. Thanks.
    Thank you, Mr. Chairman. I appreciate the flexibility.
    Senator Moran [presiding]. Thank you, Senator Tester.
    Senator Tillis.

              HON. THOM TILLIS, U.S. SENATOR FROM 
                         NORTH CAROLINA

    Senator Tillis. Senator Tester, I never get tired of 
hearing your questions.
    Senator Moran. You have not been here long enough. 
[Laughter.]
    Senator Tillis. I want to shift gears to get back to and 
really tap on what Senator Tester was getting at earlier in 
terms of institutionalizing this so that we are not all of a 
sudden restarting in 2017. You all have said a couple of things 
that give me hope and a couple of things that give me concern, 
and I am coming at this from the perspective of a systems 
person that has helped large companies de-complex their 
environment.
    I like the idea of a graphic user. I use this as an example 
of where, on the one hand, it is a good short-term fix. On the 
other hand, it adds another layer of complexity. I have 
implemented those systems. We used to call them lipstick on a 
pig. What you have done is you have implemented something that 
makes it easier. In the process of doing that, you probably not 
only aggregated data from other systems, you probably added 
data, which adds another layer of complexity when you finally 
get to the ultimate task of replacing it. We have to be very 
careful not to go after some short-term priorities that may be 
voiced from us or others at the expense of creating a long-
term, sustainable, economically viable fix. I would think that 
you all would agree with that. I would be fascinated if any of 
you did not.
    Mr. Gibson. We agree wholeheartedly with you.
    Senator Tillis. Yes. Now, one thing that I think we need to 
do, I sometimes think that we need to have hearings here where 
the only thing that is at the witness stand is a really big 
plate glass mirror, because a part of what you need to do--the 
CIO, Ms. Council, is top notch. She has great experience, great 
relevant experience with the job that she has been assigned.
    What you need to do as you go through these buy-versus-
build decisions is make absolutely certain that you are buying 
what creates a best practice and not necessarily creating a 
``frankensystem,'' where you start out with a buy, it looks 
great, but then you will say, this Congressional mandate 
requires this sort of reporting or this other analytics 
capture. This Congressional mandate or this special project as 
requested by some Senator requires so many variants that by the 
time you get finished, what you bought bears no resemblance to 
the baseline project that you want to maintain.
    Mr. Gibson. That is right.
    Senator Tillis. We had a hearing here a couple of months 
ago where Senator Brown and I have moved a bill that is going 
to provide a benefit--I think, Deputy Secretary Gibson, you 
were at that hearing, where I said it is a shame that a benefit 
that over 10 years will equate to about $6.2 million is going 
to require $5.1 million in systems changes before you can start 
providing the benefit.
    Sooner or later, we need to make sure that you all can come 
back. I want to associate myself with the comments made by most 
of the Members, and I share the frustration of Senator 
Sullivan. I am not going to get into the episodic issues with 
Fayetteville or anything else in this hearing. That is why we 
will have conversations outside of the hearing. But at some 
point, there needs to be a cost associated with a shift of 
priorities----
    Mr. Gibson. Yes.
    Senator Tillis [continuing]. That comes from the directions 
you are receiving from this Committee. I will take at face 
value that the value provided to the States that you are 
prioritizing, like Senator Sullivan's, is worth it over the 
distraction and diversion of resources. But we have to start 
getting very serious and have everyone understand what the 
distraction possibly costs us in terms of shortening the time 
to benefit for the overall transformation.
    We also need you all very quickly to be able to articulate 
in a way that we can understand with the time limits that we 
have in the VA Committee why what I may be asking you to do may 
move us further to the right in getting the transformation 
done. The way you are going to do that is to create a plan that 
we can communicate before this Committee on a state-by-state 
basis what the footprint looks like, what is the mix of VA/non-
VA Choice, what is the timeline to benefit, what are the things 
that we can expect on a fairly immediate basis, so that each 
one of us can feel like we have that information and then we 
can determine whether or not it needs to be juggled or whether 
or not it is appropriate. We have not had that, and I think 
that is one of the reasons why we get more to the episodic 
discussions that we have in a lot of these hearings.
    I would encourage you very quickly, the list of legislative 
changes that you mentioned for the $400 million program, to me, 
it is a bit disturbing that we are going to have to spend $300 
million on a portal because these portals are fairly well 
established. I know that we have got a hairball of systems that 
we have to connect them to, and that is where most of the costs 
come from. It is not the Web site. I get that.
    Mr. Gibson. It is. It is.
    Senator Tillis. It is disturbing to me that, again, if we 
do these short-term things, we are adding complexity and time 
to the long-term integrated solution. We have to reach a point 
to where, like all large-scale transformations, there has to be 
a freeze except for emergencies so that you can start getting 
to work on what we are all wanting here sooner rather than 
later.
    I think you need to go back and you need to take a more 
critical look at the things that you are having to accept as a 
given that Congress has mandated that you believe no longer 
have a place in the transformed VA, and it needs to go far 
beyond what you have probably thought about in terms of the 
enabling legislation for this particular program. If you do not 
do that, then you are building the transformed system on 
outdated policies that may or may not have ever been 
appropriate. They just happened to get through Congress and you 
happen to have to live up to them because they have been 
mandated to you.
    I am not going to get into a lot of questions except to say 
the reason that I continue to have this sort of flavor to my 
discussion is that I want to help you establish a plan that 
transcends your tenure and your positions, that continues to 
show progress as we get another President. I want to be an 
advocate for that. But it has to be articulated, and then we 
have to have people in the VA that will put the mirror back on 
us and say, you are asking me to do something that is shifting 
me away from the other thing you have asked me to do.
    Now, if we do that and you put the mirror in, it is our 
problem. If we make a request and you do not reflect back on 
us, it is your problem. And I want to make this our problem so 
that we can help facilitate the transformation.
    The last things that I will just mention, and we can speak, 
first off, I appreciate the Secretary and his staff for the 
update on Camp Lejeune. I am looking forward to getting the 
additional information I requested in a letter today, but thank 
you for that progress. It is important.
    I also want to reinforce what Senator Murray said. Any time 
I have heard it brought up--I have spoken with hundreds--
probably at this point been in the presence of thousands of 
veterans over the last 11 months since I have been Senator. I 
have yet to hear a single veteran who has received care from 
the VA say that they want purely a private choice. They want 
the optimum mix. They want veterans serving veterans. We want 
the best possible health care. We know we have world class 
practices out there. We want to make sure that the people who 
come to us and say, privatize it all, they almost all have one 
thing in common. They are not a veteran.
    I want to listen to the veterans' voices and make sure that 
we do a better job of providing the best care for them, which 
includes Choice, it includes non-VA, and it includes it in 
different proportions based on the State. There are seven 
States who have one of the highest per capita ratios of 
veterans per population. I have a State that has more veterans 
than those seven States have total people. We all have unique 
needs and we need to solve them.
    I hope that you all will go back and come back with a 
longer list of things, saying a part of the complexity in 
making the buy decision is because you have told me to do 
things that are not best practice and are not necessary for me 
to produce the best clinical outcomes. Please, relieve me of 
this burden. If you start doing that, your job is going to be a 
lot simpler and what we do for the veterans is going to be a 
lot better.
    Thank you.
    Mr. Gibson. If I may, just 15 seconds----
    Senator Moran. Mr. Secretary.
    Mr. Gibson. I cannot tell you how much I appreciate that 
perspective, the willingness. I like to think that Secretary 
McDonald and I have done more of that kind of challenging over 
the last year and one-half or so than has been done in a long 
time, but what you are describing is a real paradigm shift for 
the Department, which is an extraordinary opportunity. We will 
do our best to seize it.
    Senator Moran. Senator Tillis, thank you for your 
commentary and analysis, very valuable.
    In the absence of the Chairman, there is no second round, 
but I have a question, and it is a question that follows, in 
fact, a question that you asked, I think, Secretary Gibson, of 
me. As I understand it, my take-away from this hearing as far 
as the Choice Act is that it no longer matters if you live 
within 40 miles of a facility that does not provide the service 
that you need. You qualify to have services at home.
    Mr. Gibson. No.
    Dr. Shulkin. No.
    Senator Moran. No? I thought that is what you said in 
response to Chairman Isakson.
    Mr. Gibson. No.
    Senator Moran. If you live within 25 miles of a CBOC, it 
does not provide the service you need, what happens?
    Dr. Yehia. OK, it has to be 25 miles from a facility or a 
CBOC that actually has a primary that provides primary care and 
mental health care, so not the one-off facility that only has 
one doctor or 1 day a week or something. If it is 25 miles from 
that, you do not qualify under the geography criteria to access 
care in the community. However, you might have a wait time for 
cardiology and you can access community care that way, or that 
CBOC may not refer folks to the local medical center for 
neurosurgery or CT surgery and all those services are provided 
in the community.
    I think a lot of times people get fixated on the geography. 
There is more than one way that people can access community 
care, and some of that is through wait times and some of that 
is through they just do not offer that service at that local 
referral pattern for the medical center and the CBOC and it is 
always provided in the community.
    Senator Moran. Veterans who live closer than 40 miles to a 
CBOC that has a full-time physician have a different standard 
than those who live further than 40 miles, is that true?
    Mr. Gibson. That is correct.
    Senator Moran. All right. The veteran who lives 25 miles 
from the CBOC that has a full-time physician, who needs his 
eyeglasses adjusted, needs to see an optometrist, there is no 
optics available at the CBOC, would be told to travel the 200 
miles to Wichita?
    Mr. Gibson. That is what we have described in here as the 
nature of the service, what I read to the Chairman. You know, 
that in the past, I think that is exactly what would oftentimes 
happen, and what we are saying is we do not want that to 
happen. It makes absolutely no sense for us to have a veteran 
go drive 200 miles to get his eyes checked. That is the kind of 
care that we should be referring into the community under 
Choice.
    But, to be very clear, and I think you realize this, if the 
aperture is open all the way to 40 miles from where you can get 
the care, the cost goes through the roof and we simply do not 
have the resources to be able to deliver that. So, that is why 
we are trying to do this in a very deliberate kind of fashion.
    Senator Moran. Your plan described to us today is intended 
to resolve those kind of issues, no?
    Dr. Yehia. The way that it resolves those issues is that it 
allows a local provider, physician, and the veteran to make 
that determination. We have the national criteria of geography, 
wait time, and availability of services, but there is this one 
thing that was passed by the Hill, the unusual and excess 
burden that allows nuance, which is what we need. When I see 
patients and I determine that physical therapy is needed, you 
should not be driving 200 miles to get PT after you just had a 
knee replacement, we can actually make that decision together 
and they can access community care.
    Senator Moran. Do you make that decision in the----
    Dr. Yehia. In the office.
    Senator Moran [continuing]. Together today, regardless of 
what happens with your plan for the future? That is already 
available to that veteran----
    Mr. Gibson. It is now, based upon what we put in place 
effective yesterday.
    Dr. Yehia. Yesterday.
    Senator Moran. Yesterday, OK. Today is a new day.
    Mr. Gibson. It is a new day, yes.
    Dr. Yehia. It is.
    Senator Moran. Many of the concerns and complaints that I 
have raised over a long period of time, in your view, are 
resolved by what happened yesterday at the VA? You asked me 
where do I get my concern. Emporia should not qualify, but it 
does. My concern comes from casework. What you heard around the 
table is people bringing us issues, including the veteran who 
lives 25 miles from the CBOC who cannot get his eyeglasses 
adjusted because they do not do that, was told to go 200 miles 
to Wichita, which is kind of the norm of how we relate to 
veterans.
    I checked with my staff. Just this week, we have had ten 
new cases in Kansas related to the Choice Act and the distance 
necessary to travel. It is an ongoing----
    Mr. Gibson. Would you share those with us so that we can do 
a deep dive to understand where we can help identify the 
defects in the system, to understand where things are not 
working----
    Senator Moran. Great.
    Mr. Gibson. That would be hugely helpful.
    Dr. Yehia. If I can add one other thing please? Some of the 
$421 million that we are requesting has to do with 
communication, education, and training. There is a big chunk of 
that--we did not talk about that today. But, I think what you 
are experiencing and what we are getting to is that if that 
information flow does not occur at every level in the 
organization, there is a problem. So, that is some of the costs 
associated with the plan, to improve those communication 
channels.
    Senator Moran. Thank you very much. My understanding, which 
I have asked for this kind of information previously, and have 
learned it now exists; there is something called an abandonment 
rate, that was described to me as those who apply for Choice 
and conclude it is not worth it. Those you perhaps reached out 
to who actually make a request to use Choice and conclude to 
walk away. That could be a good thing, because they want to use 
the VA in its traditional ways. It could be a bad thing, 
because they hit the brick wall, they hit the bureaucracy. I 
would like to know the abandonment rate. I understand that is a 
number you keep.
    I have no standing to deny, Senator, another question.
    Senator Blumenthal. Thank you, Chairman Moran.
    The care in community and generally non-VA medical services 
involve payments and there have been various efforts over the 
years to make sure that those payments are validly made. The VA 
authorized a Recovery Audit Program in the 112th Congress, I 
believe, and the Inspector General, as you well know, recently 
found, I believe, $311 million for fiscal year 2014 in, in 
quotes, ``improper payments'' for the Non-VA Medical Care 
Program. I would like to know what progress there has been made 
in the Audit Program, the Recovery Audit Program. My 
understanding is there is a request for proposal or that the 
program is in the works. Could you update me?
    Mr. Gibson. This Recovery Audit Program, I am not 
immediately familiar with. I am familiar with the efforts that 
we are doing to expedite and improve the processes around 
prompt payment. I know that some of the payments that were 
identified as improper payments associated with care in the 
community had to do with the fact that they were done under 
individual authorizations instead of being done under provider 
agreements, which is one of the reasons we are anxious to have 
provider agreement authority.
    We will get you some information on the recovery effort, 
because I am not conversant on that at all.
    Senator Blumenthal. I would appreciate if you gave me 
whatever information that you can, hopefully in the next very 
near future.
    Mr. Gibson. We will do that. Yes, sir.
    Senator Blumenthal. Thank you.
    Senator Moran. Senator Tillis.
    Senator Tillis. This time, I will not give a speech. It has 
actually gone from 50,000-foot to the ground level. Dr. Yehia, 
you mentioned when we were talking about for doctors who may go 
into the Choice Program that if they are already certified to 
provide Medicare or Medicaid coverage, that you provide that 
doctor a provider agreement to allow them to actually provide 
VA care. What is that provider agreement like?
    Dr. Yehia. The way that it works right now is we have these 
contractors, HealthNet and TriWest. They are the ones that 
actually contract or work with the providers. The provider 
agreement is, like, two pages. It is actually a very simple 
process. So, if a veteran wants to, like I was describing, see 
someone in Fayetteville, NC, and they are not part of the 
network, it is the responsibility of our contractor to reach 
out to that provider, give him that agreement, have him sign 
it, and then join the network.
    Senator Tillis. It is not a 2-page agreement with 75 
attachments?
    Dr. Yehia. No.
    Senator Tillis. It is a 2-page agreement.
    Dr. Yehia. Yeah. It is a simple agreement that has issues 
that relate to credentialing, et cetera, the ability to share 
medical information, things like that.
    Senator Tillis. Do you have any idea what the acceptance or 
rejection rates are on these provider agreements?
    Dr. Yehia. I do not know.
    Dr. Shulkin. Very low.
    Senator Tillis. Very low?
    Dr. Shulkin. Yeah.
    Senator Tillis. OK. Do you have any information on how well 
we are doing with reimbursements for people who come under that 
versus a Medicare or Medicaid provider in terms of timeline to 
reimbursement, those sorts of things?
    Dr. Shulkin. Yes. In the Choice Program, through our 
contractors, they are close to 100 percent payment within 30 
days. In the direct payment from VA, not through our TPAs, we 
are at 79 percent payment within 30 days, working on an upward 
trend to get that much better.
    Senator Tillis. OK. Then, the real question is, is the 79 
percent relatively simple care versus more complex care so that 
you get an idea of the dollars outstanding, not just the----
    Dr. Shulkin. No. Our care in the community can be very 
complex care, as well, and----
    Senator Tillis. That is what I was referring to.
    Dr. Shulkin. Yeah.
    Senator Tillis. Is there any potential 80/20 rule, where 80 
percent of the--or the 21 percent that is outstanding more than 
30 days is 80 percent of all the dollars outstanding? I am just 
curious.
    Dr. Yehia. The common metric that is used is they 
differentiate claims into what is called clean claims, claims 
that have all the information there, and then claims that are 
not clean claims. They do not really distinguish them by 
clinical criteria----
    Senator Tillis. OK.
    Dr. Yehia [continuing]. Like whether they were more complex 
or not.
    Senator Tillis. For the most part, if I go out and talk to 
providers who are getting into Choice, they are no longer 
telling me it is very, very difficult to do and they are not 
getting paid on a timely basis.
    Dr. Shulkin. Providers sometimes do not differentiate 
choice from VA, so you are going to hear both things. They 
should be getting their payments 100 percent of the time within 
30 days through Choice----
    Senator Tillis. OK, and that is because----
    Dr. Shulkin [continuing]. But----
    Senator Tillis [continuing]. It could be a non-VA provider 
by contract and a Choice provider by episode.
    Dr. Shulkin. Right.
    Senator Tillis. I got you.
    Dr. Yehia. Exactly.
    Senator Tillis. OK. Thank you, Mr. Chair.
    Senator Moran. You are welcome.
    Gentlemen, thank you very much. Secretary Gibson and 
Secretary Shulkin, Doctor, Mr. Dalpiaz, thank you.
    I ask the next panel to join us at the table. We should be 
joined by Mr. Roscoe Butler, the Deputy Director of the 
National Veterans Affairs and Rehabilitation Division of The 
American Legion; Mr. Darin Selnick, Senior Veterans Affairs 
Advisor for Concerned Veterans of America; Mr. Bill Rausch, 
Political Director for Iraq and Afghanistan Veterans of 
America; Mr. Raymond Kelley, Director of National Legislative 
Services of the Veterans of Foreign Wars.
    Senator Blumenthal. While you are taking your seats, I want 
to apologize that I have another commitment. I did not realize 
that this hearing would last as long as it has, and so I may 
have to depart before you are done with your testimony. If that 
happens, I apologize and I will leave the hearing in your 
hands, Mr. Chairman.
    Senator Moran. You have no alternative. Thank you, Senator 
Blumenthal.
    We will now welcome the second panel.
 Response to Posthearing Questions Submitted by Hon. Johnny Isakson to 
                the U.S. Department of Veterans Affairs
    Question 1.  In the plan you drafted, the Veterans Health 
Administration (VHA) would create a tiered network of providers with 
the Core Network comprised of VHA's Federal partners and academic 
affiliates. As it is structured, if VHA can't provide the care or if 
the veteran is 40 miles from their primary care provider, veterans 
would be sent to the core network first and the preferred private 
sector providers would comprise the second tier of care. Currently, the 
care provided by VHA's Federal partners and academic affiliates is not 
for all types of care.
    a. Would the Core Network be used for both primary and specialty 
care?
    Response. Yes, the Core Network would be used for both primary and 
specialty care. These relationships with Core partners align with VA's 
mission, vision, and strategies, as well as those of VA's Federal 
partners.

    b. Would veterans first and only choice to receive care be from the 
Core Network and only be referred to the Preferred Provider Network in 
limited circumstances?
    Response. The Core Network is critical to VA's mission, vision, and 
strategies; therefore, the role of the Core Network providers will be 
similar to its role now. The Core Network providers will be utilized 
first. If there is not an available provider within the Core Network 
based on eligibility criteria (e.g., location and wait-times), Veterans 
will be able to choose a provider from the external network. By 
establishing the tiered networks, Veterans will have a greater 
understanding of available community providers, allowing Veterans to 
make informed decisions based on public information.

    c. Did you consider creating two choices for care in the community, 
as originally intended by the original Veterans Choice Program, within 
which veterans could choose VA's Federal partners and academic 
affiliates or private sector providers?
    Response. VA's ultimate goal is to develop a consolidated community 
care program with an established single set of eligibility criteria and 
streamlined business processes to reduce confusion and improve the 
experience of Veterans, community providers, and VA employees. Creating 
two choices would not align with the overall intent to establish a 
consolidated community care program with a single set of eligibility 
criteria.

    d. Did you consider using the Department of Defense's TRICARE 
contract to provide care in the community to veterans? If so, please 
provide a detailed explanation as to why using TRICARE contract was 
dismissed.
    Response. Yes, VA did consider using the Department of Defense's 
(DOD) TRICARE contract; however, the current TRICARE network is not 
robust enough to meet the demand. The current contract is focused only 
in 60+ geographic locations, which would not provide adequate coverage 
in rural areas and other locations across the country. As VA conducts 
critical analyses for developing a high-performing network, VA will 
continue to engage DOD to discuss potential areas of opportunity to 
extend VA's reach by leveraging the TRICARE network.

    Question 2.  Currently, VHA has a number of local agreements with 
the Department of Defense medical treatment facilities (MTF) to provide 
care to veterans. VHA has indicated that the VHA intends standardize 
care for veterans at MTFs through a national agreement or memorandum of 
understanding with DOD. Core Team Currently, VHA has a number of local 
agreements with the Department of Defense medical treatment facilities 
(MTF) to provide care to veterans. VHA has indicated that the VHA 
intends standardize care for veterans at MTFs through a national 
agreement or memorandum of understanding with DOD.
    a. Is the intention of a national MOU to provide both primary care 
and specialty care at MTFs?
    Response. Yes, the current intent is to develop a national sharing 
agreement or Memorandum of Understanding (MOU) with DOD to provide both 
primary care and specialty care. By developing a standard sharing 
agreement or MOU, VA will increase visibility into provider locations 
and improve VA's understanding of supply and demand imbalances.

    b. In providing care at MTF's, how will the national agreement 
ensure that the MTF's can handle the increased patient workload?
    Response. By establishing a national sharing agreement or MOU with 
DOD, VA will increase visibility into supply and demand at DOD 
facilities. By establishing provider networks, VA will be able to 
identify and address patient workload, capacity needs, and changes in 
demand more quickly through robust network analytics.

    Question 3.  Currently, the Non-VA Care Coordination Office handles 
referrals to community providers and a large part of the plan discusses 
care coordination. In discussing alignment with MyVA, the plan states 
that ``the five priorities of MyVA align directly with the components 
of the new VCP.'' In addition, the plan also refers to a referral 
coordinator position to assist veterans access community care and 
dedicated customer service representatives.
    a. What specific role will the non-VA Care Coordination Office have 
under this new plan?
    Response. Care coordination is essential to a high performing 
network. As the plan becomes more defined, the specific activities of 
the care coordination office will identified. However, the role is 
expected to be similar to its current role of coordinating care in the 
community for Veterans.

    b. What role with MyVA have in this plan?
    Response. The five priorities of MyVA align directly with the 
components of the New Veteran Choice Program (VCP). As outlined in the 
report, VA plans to improve the Veteran's experience by empowering 
employees to deliver excellent customer service through establishing a 
single, consolidated community care program and streamlining current 
processes.

    c. Will the dedicated customer service representatives and referral 
coordinators be new Full-time Employees (FTE) or a shift of existing 
FTE to new positions?
    Response. VA plans to shift existing FTE into the dedicated 
customer service representative and referral coordinator positions 
where skill-sets align with the job descriptions and requirements. 
However, in circumstances where the skill-sets, job descriptions, and 
requirements do not align, VA may repurpose existing vacancies through 
attrition to these specific positions or there may be a need for 
additional FTE.

    d. Please describe in detail the duties of the referral 
coordinators and the customer service representatives.
    Response. VA is currently developing referral coordinator and 
customer service representative job descriptions and duties.

    Question 4.  VA has had numerous issues implementing Information 
Technology systems over the years and continues to struggle with 
interoperability of electronic health records with the Department of 
Defense. The plan calls for the creation of a ``portal'' that will need 
to be interoperable with community providers. As VA evaluates whether 
to make or buy this technology can you describe how you will engage 
with industry and experts in software development to make this critical 
decision?
    a. There will be other information technology issues in 
implementing the plan that many would argue fall outside of the VA's 
core competencies, call centers, claims and payment systems, and 
information technology. What is VA's plan for outsourcing areas where 
outside resources and expertise can be utilized?
    Response. During Phase 1 of the implementation plan, VA will 
conduct make/buy analyses to determine where it makes sense for VA to 
utilize outside resources. VA's plan to outsource any IT services will 
be determined by the results of these assessments.

    b. Do you believe you have the necessary expertise to do the 
necessary make/buy analyses?
    Response. Yes, VA believes that through its own competencies and 
the expertise of external consultants, VA will be capable of conducting 
these make/buy analyses.

    Question 5.  The independent integrated assessment of the Veterans 
Health Administration required by Section 201 of the Veterans Access, 
Choice and Accountability Act of 2014 made four main recommendations 
regarding contract care. It recommended VA develop a stronger 
management structure for purchased care; that VA establish an ongoing 
process for evaluating third-party administrator performance; and 
develop clear and consistent guidance on VHA authority to purchase 
care. It also recommended that VA ensure contract care includes 
appropriate requirements for data sharing, quality of life care 
reporting, and care coordination. However, it appears that your plan, 
rather than address these recommendations, simply builds architecture 
to bring more care inside VA where there has been difficulties in 
meeting Veteran needs.
    a. Please explain how your plan addresses the recommendations in 
the independent assessment.
    Response. The following table was provided in section 8.3 of the 
report.

 
----------------------------------------------------------------------------------------------------------------
       Independent Assessment
           Recommendation                                 Description of Alignment to New VCP
----------------------------------------------------------------------------------------------------------------
Recommendation 1 GOVERNANCE: Align demand, resources, and authorities
----------------------------------------------------------------------------------------------------------------
Clarify and simplify the rules for     The plan will consolidate existing authorities and mechanisms for
 purchased care to provide the best    delivering community care into a single program, the New VCP, simplifying
 value for patients.                   the process for Veterans, providers, and VA staff (Element 1: Single
                                       Program for non-Department Care Delivery and Element 2: Patient
                                       Eligibility Requirements).
----------------------------------------------------------------------------------------------------------------
Recommendation 2 OPERATIONS: Develop a patient-centered operations model that balances local autonomy with
 appropriate standardization and employs best practices for high-quality health care
----------------------------------------------------------------------------------------------------------------
Fix substandard processes that         The New VCP proposes revised processes for Authorizations
 impede the quality of care provided   (Element 3), Claims Management (Element 5), and Medical Records
 to the Veteran.                       Management (Chapter 9).
                                       Care coordination should improve health outcomes, prevent gaps
                                       caused by transition of setting or time, and support a positive and
                                       engaging patient experience (Introduction: Care Coordination).
----------------------------------------------------------------------------------------------------------------
Recommendation 3 DATA and TOOLS: Develop and deploy a standardized and common set of data and tools for
 transparency, learning, and evidence-based decision
----------------------------------------------------------------------------------------------------------------
Implement a single, integrated set     The New VCP proposes medical records management to increase
 of system-wide tools centered on a    electronic transfer of relevant medical records between VA, Core Network,
 common EHR that is interoperable      including DOD, and community providers, improving the consistency,
 across VHA and with DOD and           simplicity, and timeliness of the information exchange (Element 9:
 community provider systems.           Medical Records Management).
Assessment A. Demographics
 
----------------------------------------------------------------------------------------------------------------
Prepare for a changing Veteran         The New VCP proposes approaches for High-Performing Network
 landscape.                            Development, including analytics, that are adaptable over time and can
                                       adjust to meet the needs of a changing Veteran population, providing them
                                       with access to a tiered network (Element 8: Plans to Use Current Non-
                                       Department Provider Networks and Infrastructure).
----------------------------------------------------------------------------------------------------------------
Anticipate potential shifts in the     The New VCP will develop a high-performing network nimble enough
 geographic distribution of            to adjust to shifts in the geographic distribution of Veterans (Chapter
 Veterans, and align VA facilities     6: Plan to Develop Provider Eligibility Requirements and Element 8: Plans
 and services to meet these needs.     to Use Current Non-Department Provider Networks and Infrastructure).
----------------------------------------------------------------------------------------------------------------
Improve collection of data on          The authorization, medical records management, and claims
 Veteran health care utilization and   processes outlined in the New VCP support increased transparency of data
 reliance.                             on health care utilization in the community (Element 3: Authorizations,
                                       Element 5: Provider Reimbursement Rate, and Element 9: Medical Records
                                       Management).
                                       Data analytics will be used to improve health care outcomes and
                                       personalize care delivery.
----------------------------------------------------------------------------------------------------------------
Assessment B. Health Care Capabilities
 
----------------------------------------------------------------------------------------------------------------
Consider alternative standards of      Shifting to a single community care program will give VA greater
 timely access to care.                flexibility in identifying and responding to access issues (Element 1:
                                       Single Program for non-Department Care Delivery).
                                       VA proposes to identify core competencies and develop a high-
                                       performing network in the future, which allows flexibility to determine
                                       excessive burden and account for clinical conditions (Introduction: The
                                       Future of VA Health Care).
----------------------------------------------------------------------------------------------------------------
Develop and implement more sensitive   The development of a high-performing network for the New VCP will
 standards of geographic access to     allow VA to determine excessive burden for the ill and elderly and
 care.                                 establish more sensitive standards for geographic access to care while
                                       having confidence that those standards can be met by the VA community
                                       network (Element 1: Single Program for non Department Care Delivery).
----------------------------------------------------------------------------------------------------------------
Take significant steps to improve      By establishing a single set of eligibility requirements, a high-
 access to VA care.                    performing network, and a streamlined authorization process, the New VCP
                                       aims to improve Veterans' access to care (Element 6: Provider Eligibility
                                       and Element 8: Infrastructure).
----------------------------------------------------------------------------------------------------------------
Streamline programs for providing      The New VCP will consolidate existing purchased care mechanisms
 access to purchased care and use      into a single program and set of processes that will reduce confusion and
 them strategically to maximize        improve access to care (Element 1: Single Program for non-Department Care
 access.                               Delivery).
----------------------------------------------------------------------------------------------------------------
Systematically study opportunities     The New VCP will be designed using industry best practices and
 to improve access to high-quality     will evolve over time to support access to high-quality care provided at
 care through use of purchased care.   VA or in the community (Element 1: Single Program for non-Department Care
                                       Delivery).
                                       A tiered network will be developed to better serve Veterans,
                                       support adequate coverage, and provide access to high-quality care
                                       (Element 8: Plans to Use Current Non Department Provider Networks and
                                       Infrastructure).
----------------------------------------------------------------------------------------------------------------
Establish VA as a leader and           The New VCP will be designed using leading practices from
 innovator in health care redesign.    industry and will evolve to incorporate innovative delivery and payment
                                       models (Chapter 1: Single Program for non-Department Care Delivery).
                                       The New VCP will be implemented using a system of systems
                                       approach that considers the interactive and interdependent nature of
                                       internal and external factors to optimize outcomes and experience for
                                       Veterans (Element 1: Single Program for non-Department Care Delivery).
----------------------------------------------------------------------------------------------------------------
Assessment C. Care Authorities
 
----------------------------------------------------------------------------------------------------------------
VA and Congress should articulate a    This report provides Congress with VA's proposal for a clear
 clear strategy governing the use of   strategy and direction for community care, including required legislative
 purchased care.                       authorities (Element 1: Single Program for non-Department Care Delivery).
----------------------------------------------------------------------------------------------------------------
VA should collect better data to       The New VCP proposes approaches for High-Performing Network
 accurately estimate the demand for    Development, including analytics, that are adaptable over time and can
 and use of purchased care.            adjust to meet the needs of a changing Veteran population, providing them
                                       with access to a tiered network (Element 8: Plans to Use Current Non-
                                       Department Provider Networks and Infrastructure).
----------------------------------------------------------------------------------------------------------------
VA should develop a stronger program   VA will designate a new DUSH to establish national management of
 management structure for purchased    and accountability for community care and integration with VA provided
 care and allocate responsibility      care (Element 1: Single Program for non-Department Care Delivery).
 and authority to the most             Similarly, at the local level, the New VCP will also standardize
 appropriate levels.                   community care within facilities to support consistent management
                                       (Element 1: Single Program for non Department Care Delivery).
----------------------------------------------------------------------------------------------------------------
VA should develop clear, consistent    This report includes a transition plan with change management and
 guidance and training on its          training necessary to streamline existing programs and implement improved
 authority to purchase care.           processes (Element 10: Transition Plan).
----------------------------------------------------------------------------------------------------------------
VA purchased care contracts should     By developing a High-Performance Network, VA plans to implement
 include requirements for data         standards that improve data sharing, monitoring, and care coordination
 sharing, quality monitoring, and      (Chapter 6: Plan to Develop Provider Eligibility Requirements and Element
 care coordination.                    9 Medical Records Management).
                                       VA will identify top performers, measure provider productivity,
                                       and develop incentives such as value-based payments (Element 6: Plan to
                                       Develop Provider Eligibility Requirements and Element 9 Medical Records
                                       Management).
----------------------------------------------------------------------------------------------------------------
VA and Congress should adopt a         The New VCP proposes consistent reimbursement rates tied to
 consistent strategy for setting       regional Medicare. Rates recommendations include exceptions for specific
 reimbursement rates across            underserved geographic areas (e.g., Alaska, Hawaii, Guam, Puerto Rico,
 purchased care initiatives.           American Samoa, and the Commonwealth of the Northern Marianna Islands);
                                       negotiated rates for services not covered by Medicare rather than VA
                                       paying billed charges (Element 5: Provider Reimbursement Rates).
                                       The New VCP will strengthen existing relationships with DOD, IHS,
                                       Tribal, and FQHC partners (Element 5: Provider Reimbursement Rates).
----------------------------------------------------------------------------------------------------------------
VA should consider adopting            Over time, the New VCP will evolve to include innovative
 innovative, but tested, ways to       practices from industry for purchasing care, such as shifts to bundled or
 purchase care.                        value-based payments (Element 1: Single Program for non-Department Care
                                       Delivery).
----------------------------------------------------------------------------------------------------------------
VA and Congress should eliminate       The New VCP proposes to eliminate inconsistencies between various
 inconsistencies in current            purchased care mechanisms by establishment of a single program (Element
 authorities and provide VHA with      1: Single Program for non Department Care Delivery).
 more flexibility to implement a
 purchased care strategy.
----------------------------------------------------------------------------------------------------------------
Assessment D. Access Standards
----------------------------------------------------------------------------------------------------------------
Care delivery sites should             The New VCP will be flexible to provide access to care through a
 continuously assess and adjust the    high-performing network as demand changes (Element 8: Plans to Use
 match between the demand for          Current Non-Department Provider Networks and Infrastructure).
 services and the organizational       Services provided in the network will be complementary to
 tools, personnel, and overall         internal VA health care delivery (Element 8: Plans to Use Current Non-
 capacity available to meet the        Department Provider Networks and Infrastructure).
 demand, including the use of
 alternate supply options, such as
 alternate clinicians, telemedicine
 consults, patient portals, and web-
 based information services and
 protocols.
----------------------------------------------------------------------------------------------------------------
Assessment H. Health Information Technology
----------------------------------------------------------------------------------------------------------------
VA should explicitly identify mobile   Enhancing the mobile apps portfolio to support the future state
 applications as a strategic enabler   continuum of care coordination, including aspects of patient navigation,
 to increase Veteran access and        secure messaging and mobile Blue Button (Introduction: Care
 satisfaction and help VHA             Coordination).
 transition to a data-driven health
 system.
----------------------------------------------------------------------------------------------------------------
Assessment I. Business Processes
----------------------------------------------------------------------------------------------------------------
VHA: Develop a long-term               VA will pursue a claims solution and simplified processes as it
 comprehensive plan for provision of   evolves to achieve parity with best practices, working toward consistent,
 and payment for non-VA health care    timely payment (Element 4: Billing and Reimbursement).
 services..                            The New VCP develops a single, streamlined billing and
                                       reimbursement process to support the program (Chapter 1: Single Program
                                       for non-Department Care Delivery).
----------------------------------------------------------------------------------------------------------------
VHA: Standardize policies and          VA will standardize business rules and processes under a uniform
 procedures for execution of non-VA    system (Element 10: Transition Plan).
 Care, particularly The Choice Act,    The transition plan lays out the key elements of the change
 and communicate those policies and    management plan necessary to communicate changes in community care
 procedures to Veterans, VHA staff,    programs and processes to all stakeholders (Element 10: Transition Plan).
 VHA providers, and non-VA
 providers..
----------------------------------------------------------------------------------------------------------------
VHA: Employ industry standard          Under the New VCP, VA will pursue a claims system that employs
 automated solutions to bill claims    best practices, standardized business rules, and auto adjudication, that
 for VHA medical care (revenue) and    will help it ensure compliance with the Prompt Payment Act (Element 4:
 pay claims for non-VA Care            Billing and Reimbursement and Chapter 7: Prompt Pay Compliance).
 (payment) to increase collections
 to improve payment timeliness and
 accuracy..
----------------------------------------------------------------------------------------------------------------
VHA: Align performance measures to     VA will adopt clinical and administrative best practices under
 those used by industry, giving VHA    the New VCP using data on Veterans' needs and the quality of providers
 leadership meaningful comparisons     that will allow for parity inside and outside of VA (Element 1: Single
 of performance to the private         Program for non-Department Care Delivery).
 sector..
----------------------------------------------------------------------------------------------------------------
VHA: Simplify the rules, policies,     The New VCP defines a single set of eligibility requirements for
 and regulations governing revenue,    the circumstances under which Veterans may choose to receive health
 non-VA Care, eligibility, priority    benefits from community providers, enabling timely and convenient access
 groups, and service connections,      to care in alignment with best practices (Element 2: Patient Eligibility
 educate all stakeholders, and         Requirements).
 institute effective change            The New VCP will also include plans to communicate these changes
 management..                          to stakeholders (Element 2: Patient Eligibility Requirements).
----------------------------------------------------------------------------------------------------------------

    b. Given that VA has spent the past year implementing the current 
VA Choice Program, at taxpayers' expense, why isn't VA considering 
modifying this existing program to incorporate the proposed changes 
proposed in your plan based?
    Response. In developing the plan, VA worked with critical 
stakeholders (e.g., Veterans Service Organization, VA staff and 
clinicians, Federal partners, and Health Care Industry Leaders) to 
determine what is working well and the challenges with the current VA 
Choice Program. VA plans to build on what is working well and make 
changes to address the challenges that face Veterans, community 
providers, and VA employees.

    c. Would starting over create a transition risk which ultimately 
could further frustrate and confuse veterans seeking care through VA?
    Response. VA will preserve what is working well in the current 
program and develop plans to transition what is not working well. To 
minimize potential transition risk, VA plans to implement an agile 
methodology approach and project management techniques. The agile 
methodology approach allows VA to fix the most pressing issues with 
community care today, while making continuous updates to promote a 
learning health system that evolves with the needs of the Veteran 
population. For any potential changes, VA will communicate with 
impacted stakeholders to reduce confusion. Furthermore, by creating a 
single set of eligibility criteria, VA hopes to reduce confusion among 
Veterans regarding community care.

    Question 6.  How does VA plan to provide effective oversight and 
project management support throughout the implementation process? What 
additional resources will be required? Does VA have the personnel with 
the necessary skills to successfully implement these changes? If not, 
where do you intend to get the requisite expertise?
    Response. VA has developed a governance structure that will oversee 
the transition to the New VCP. Using a systems of systems approach will 
allow VA to execute changes through rapid cycle deployment using an 
agile approach that supports quick improvements that lead to the longer 
term changes. VA has established seven Portfolio teams that will 
oversee projects within their areas. Each team will consist of program 
office and field subject matter experts and be required to implement 
project management support including the development of project plans, 
timelines, and milestones. VA will also work with external consultants 
with health plan management expertise to assist throughout the 
implementation process.
                                 ______
                                 
Response to Posthearing Questions Submitted by Hon. Richard Blumenthal 
               to the U.S. Department of Veterans Affairs
    Question 1.  The testimonies of the Panel II witnesses--Mr. Butler 
of The American Legion, Mr. Selnick of Concerned Veterans of America, 
Mr. Rausch of the Iraq and Afghanistan Veterans of America, and Mr. 
Kelley representing The Independent Budget group--included several 
specific recommendations regarding VA's consolidation plan. Please 
provide VA's response to those recommendations.
    Response. The Department of Veterans Affairs (VA) appreciates the 
feedback received from Mr. Butler of The American Legion, Mr. Selnick 
of Concerned Veterans of America, Mr. Rausch of the Iraq and 
Afghanistan Veterans of America, and Mr. Kelly representing The 
Independent Budget group, and has taken into consideration the specific 
recommendations made. VA will incorporate all applicable feedback in 
continuing to direct the consolidation of community care programs when 
it is in the best interest of the Veteran and tax payers.

    Question 2.  As we think about how to consolidate VA's care in the 
community, the cost of such an undertaking will be a key aspect Members 
of this Committee will need to consider as stewards of taxpayer's 
money. You have estimated the total one-off costs for systems redesigns 
over the three phases to be nearly $1.9 billion.
    a. During the House's hearing, I understand VA indicated it would 
like to take $421 million from the $10 billion pot of funds for the 
Choice Program to pay for Phase I of the systems redesign. Do you 
intend to take the other money needed for phase II and III system 
redesigns from that pot as well?
    Response. No, VA does not intend to use Choice funds for Phase II 
and Phase III.

    b. Based on what VA currently spends on care in the community, what 
it expects to spend on the Veterans Choice Program as amended, in 
addition to further improvements to delivery of care in the community 
which will increase reliance and your desire to expand access to 
emergency treatment and urgent care, please confirm or correct that we 
are looking at an annual cost of roughly $18 billion for the New 
Veterans Choice Program.
    Response. VA estimated that the cost for expanded emergency 
treatment and urgent care, and increased reliance for Phase II to be 
$3.26 billion, and for year one of Phase III to be $3.64 billion. VA 
would need legislative authority to amend the Veterans Choice Program 
(VCP) and expand emergency treatment and urgent care. Without the 
expansion of emergency treatment and urgent care and the implementation 
of the new VCP, VA anticipates the existing community care program 
would cost $13.5 billion. This total includes approximately $7 billion 
a year that is already built into the base discretionary budget for 
historical costs of hospital care, medical services, and Long-Term Care 
Services and Supports (LTSS). In addition, this total also assumes the 
continuation of the existing Veterans Choice Program with no 
modification at a cost of approximately $6.5 billion estimated annual 
cost. This cost is currently being offset by the initial $10 billion in 
mandatory appropriations provided in conjunction with the original 
authorization of the Veterans Choice Act. Following expiration of these 
funds and/or the initial program's authorization (anticipated August, 
2017), VA will need additional legislative authority and funding to 
continue the current VCP even without the Plan's proposed 
modifications.

    c. Given that approximately $4 billion has been spent from the 
Choice Fund to date and the projected burn rate in the coming months 
and year, will VA be able to stand up a new ambitious program before 
the $10 billion supplemental pot of funding runs out?
    Response. VA does not intend to use Choice funds to implement the 
entire new VCP. VA plans to use Choice funds to pay for Phase I, and 
for additional Phases and years VA will request funding through the 
annual budget process for the remaining needs. To establish the new 
VCP, VA will need additional legislative authority and an identified 
funding stream to cover the Veterans Choice Program costs after the 
exhaustion of the initial appropriation of $10 billion. Without these 
authorities and offsets, VA will not be able to implement a 
consolidated community care program.

    Question 3.  The VA Consolidation Plan emphasizes the need for 
enhanced staffing to manage the increase in care coordination that will 
follow from the expansion of care in the community. However, as has 
been reported widely and discussed in other hearings this year, VA is 
suffering from staffing shortages among several key clinical positions 
including those who are central to the Patient-Aligned Care Teams 
involved in care coordination. For example, VA data shows a loss rate 
of nearly 9% for physicians and 8% for nurses in fiscal years 2014 and 
2015. In each of these years, VA lost over 6,000 physicians and nurses 
combined--presumably, many of whom would need to play a key role in the 
coordination of care for veterans seeking care in the community.
    a. The majority of the staff losses for physicians and nurses for 
fiscal years 2014 and 2015 were due to staff who quit. What is VA doing 
to learn from these employee exits that will enable the Department to 
better retain staff--especially in these key shortage positions?
    Response. The Under Secretary for Health (USH) has outlined five 
strategic priorities for the Veterans Health Administration (VHA), one 
of which is Employee Engagement. VHA is working to create a work 
environment where employees are valued, supported, and encouraged to do 
their best for Veterans. This includes making VA a place where all 
employees and providers feel supported and able to serve our Veterans. 
This priority is in alignment with the Secretary's MyVA strategic 
initiative to improve the Employee Experience by focusing on people and 
culture.
    VHA is developing a program to provide newly hired physicians with 
the necessary orientation, relationships, and experiences to succeed as 
a VA physician. The program is based on a series of seven modules, 
accomplished over a 2-year period that builds upon a foundation and 
provides challenging learning to engage, develop, and ultimately retain 
physicians. A workgroup is currently tasked with developing the content 
for the modules, and a pilot program will commence upon completion of 
the curriculum.
    In addition, the Education Debt Reduction Program (EDRP) and 
development programs such as scholarships are targeted toward the top 
five shortage occupations. In the fiscal year (FY) 2015 award cycle, 82 
percent of new EDRP awards recipients were individuals in the top five 
shortage occupations and 84.2 percent of scholarships were awarded to 
nurses.

    b. Does VA conduct exit interviews with staff who quit? If so, does 
VA track the reasons for employee's who quit and are there any trends 
among those leaving shortage positions that could inform future 
retention efforts?
    Response. VHA utilizes the electronic VA Exit Survey per VA 
Directive 5004, which states that the purpose of the exit survey is to 
provide voluntarily separating employees the opportunity to communicate 
their reasons for leaving. The information provided is shared with VA 
supervisors, managers, leadership, and human resources professionals to 
assist them in identifying methods to improve employee retention and 
morale at the local and national levels. Improved retention and morale 
will improve productivity and save VA organizations money that would 
otherwise be spent on recruitment and staffing.
    The overall response rate to the VA Exit Survey is approximately 30 
percent annually, which is considered a typical response rate for an 
exit survey. The survey is offered to employees who are leaving the VHA 
system voluntarily and is not offered to individuals who are 
transferring to another facility or administration within VA. For FY 
2015, response rates for the top five shortage occupations ranged from 
24 percent for physicians (465 surveys) to 96 percent for physical 
therapists (88 surveys). Psychologists had an 84 percent response rate 
(254 surveys), nurses had a 35 percent response rate (1,614 surveys), 
and physician's assistants had a 34 percent response rate (56 surveys). 
It is important to note that low response rates may influence the 
generalizability of the data. To improve response rates, VHA is 
exploring the option of making the VA Exit Survey mandatory. Responses 
to the survey indicate that advancement for a unique opportunity 
elsewhere, normal retirement, relocation with a spouse, and family 
matters, such as marriage and pregnancy, are the most common reasons 
for leaving VHA.

    Question 4.  I have heard from some providers in Connecticut that 
delays in the billing and payment processes have created a disincentive 
for some providers to work with the VA to provide care in the 
community. Are there actions VA can take now to address current delays 
in billing and payment to providers offering care in the community?
    Response. VA Connecticut had scanning issues due to staffing 
shortages as well as problems with scanning equipment. In Veterans 
Integrated Service Network (VISN) 1, the scanning process is the 
responsibility of the local stations; the function did not transfer 
over to Chief Business Office Purchased Care (CBOPC). The normal 
process for scanning is to scan everything within 3-5 days in VISN 1. 
However, due to the staffing and scanning issues, VA Connecticut was 
unable to scan for several days and fell behind. Normally, 300-500 
claims are scanned each day. On two separate days, VA Connecticut staff 
scanned close to 4000 claims, combined. This resulted in a new backlog 
being created and VA Connecticut was no longer meeting the measures set 
by CBOPC. Those measures are defined as: 80 percent of all authorized 
claims will not age greater than 30 days and unauthorized claims will 
not age greater than 45 days. However, as of this writing the metrics 
for VA Connecticut have improved and we are back at the goals set by 
CBOPC. As of December 17, VA Connecticut is 93 percent current with 
authorized claims and 84 percent current with unauthorized claims.

    Question 5.  The VA proposal includes plans to provide veterans 
access to a tiered network of providers in to promote veteran choice 
and access to care in the community. The VA indicates that it will 
apply industry-leading health plan practices for the tiered network 
design and that providers must ``demonstrate high-value care'' in order 
to be considered in the Preferred tier and to receive higher payment.
    a. Please provide clarification as to how VA will determine whether 
a provider is offering ``high-value care.''
    Response. VA will use industry standards and Medicare metrics to 
determine high-value care. VA will conduct critical analyses to 
determine which quality metrics best align to its mission, vision, and 
strategies. VA will continue to work with industry and Federal health 
leaders as it examines these quality metrics.

    b. I have heard from the American Medical Association and the 
Connecticut State Medical Society that there is concern among providers 
regarding the tiered network approach. Specifically, that by tiering or 
narrowing the network, the New Veterans Choice Program may leave 
patients unable to find specialists or physicians in the top tiers in 
their areas. With many veterans requiring specialized services, how 
will you ensure that veterans have access to the top tier and 
specialist care, regardless of their location?
    Response. The Preferred network will include community providers 
that meet minimum credentialing requirements, in addition to performing 
highly against quality metrics, demonstrating high-value care, and 
signing a pledge to serve U.S. Veterans. The Standard network will 
consist of VA community providers that meet minimum credentialing 
requirements. The intent of the tiered network is not to narrow the 
network but reduce administrative burdens for community provider. One 
of the goals of the network is to reward providers for delivering high-
quality care, while promoting Veteran choice and access. VA recognizes 
the significant challenges in delivering care to Veterans due to 
geographic limitations and the unique needs of the Veteran population. 
VA understands the need to establish a broad and flexible network 
providing convenient care near to where Veterans live. Therefore, VA 
anticipates in these circumstances that it may have to use provider 
agreements for certain services.

    c. While a tiered approach may be beneficial in locations where 
there are numerous providers participating in the program, rural areas 
or locations where provider participation is low may make this approach 
less effective. Please discuss the VA's strategy for ensuring a 
threshold of providers to support a tiered network.
    Response. As described in the report, VA faces significant access 
challenges in delivering care to Veterans due to geographic limitations 
and the unique needs of the Veteran population. To address these 
challenges, VA plans to establish a broad and flexible network 
providing convenient care near to where Veterans live. VA will work 
with local VA medical facilities in rural communities to enhance 
partnerships with community providers to meet the local needs of 
Veterans. By establishing a network, VA will increase visibility into 
the community capacities and the services Veterans need, and make 
necessary changes as these trends evolve.
                                 ______
                                 
Response to Posthearing Questions Submitted by Hon. Dean Heller to Hon. 
  Sloan Gibson, Deputy Secretary, U.S. Department of Veterans Affairs
    Question 1.  When considering the eligibility requirements for this 
new program, do you plan to revise the 40-mile rule so that it applies 
to 40 miles to the nearest VA facility that offers the specific service 
the veteran seeks?
    Response. The 40 mile rule will apply to a Veteran's distance from 
a primary care provider (PCP) because this is the most critical 
relationship. From that point, the Veteran's PCP is responsible for 
coordinating care for specific services that extend beyond primary 
care.

    Question 2.  For all the different processes--billing, managing the 
provider network, authorizations--will you be using a third party 
network?
    Response. It has not yet been decided whether or not the Department 
of Veterans Affairs (VA) will use a third-party network for these 
processes. VA is currently conducting analyses to determine how best to 
implement the program.

    Question 3.  What is your assessment of the current contractors' 
performance for the existing Choice Program? Will you be taking this 
into consideration when determining whether to use a third party 
network?
    Response. VA understands the time constraints related to 
implementing the program may have caused some unintended consequences. 
Going forward, VA plans to use lessons learned to improve the use of 
third-party networks in the future. VA is currently in the processes of 
taking the necessary steps to make these assessments.

    Question 4.  Why does this plan put Federal providers first instead 
of allowing veterans to choose the private sector if they want?
    Response. The Core Network, which includes VA's Federal partners, 
is critical to VA's mission, vision, and strategies.

    Question 5.  Have you considered some of the consequences or 
downfall to completely centralizing the system--all the way from 
reimbursement to authorizations to provider eligibility--rather than 
still allowing local VA facilities to have some control over the 
process?
    Response. VA has spoken with numerous stakeholders, including local 
VA facilities, in developing this plan and has aligned the plan with 
standard operational models and what will best serve Veterans and VA 
employees. Centralizing systems and processes will reduce variabilities 
and standardize care. Currently, VA is considering what level of 
control should be delegated to local facilities and is having ongoing 
discussions about how to balance decisions that need to be made locally 
and regionally versus national.

    Question 6.  If Congress gives VA the authority it needs to 
implement this new plan, what specifically will VA be doing to ensure 
its employees and veterans understand how this new program works?
    Response. VA will implement a comprehensive plan to strategically 
communicate all aspects of this new program to stakeholders. This 
program was designed to be less complex than previous community care 
programs, and thus VA is confident that it will be successful in 
communicating the new plan to employees and Veterans. The plan has 
already begun to be socialized internally within VA.
                                 ______
                                 
 Response to Posthearing Questions Submitted by Hon. Sherrod Brown to 
                the U.S. Department of Veterans Affairs
    Question 1.  I am pleased to see the plan put forth by the VA to 
consolidate its non-VA care programs, I am concerned about the phasing, 
and implementation of the plan and whether it will be seamless for our 
veterans.
    Two issues that are of greatest concern relates to electronic 
medical records and whether providers outside of VHA will be trained to 
understand the military culture.
    a. Explain what effect that understanding the military culture 
poses to proper care delivery?
    Response. It is important that community providers understand the 
unique health challenges faced by Veterans when providing them with 
care. The Department of Veterans Affairs (VA) health care providers are 
accustomed to interacting with Veterans and are trained to understand 
the intricacies of certain conditions that are unique to Veterans. VA 
shares information on military cultural awareness with community 
providers to assist them in gaining the same understanding.

    b. What specific steps will the VA take to address these two 
concerns?
    Response. The future state will focus on Health Information 
Exchanges and care coordination. In addition, preferred network vendors 
will be required to receive training in military awareness. These 
efforts will ensure that Veterans experience high quality, consistent 
care whether that is in a VA facility or in the community.

    Question 2.  How can the VA do additional outreach, to ensure that 
all veterans, particularly lower-income veterans are properly served by 
the VA as it transitions into a new phase of services?
    Response. VA is committed to providing high quality care to all 
Veterans. Through this program Veterans will have better access to 
care, and VA will take the necessary steps to make sure this extends to 
all Veterans that are eligible. It will certainly provide Veterans in 
underserved communities more options and better access to care.
                                 ______
                                 
Response to Posthearing Questions Submitted by Hon. Johnny Isakson for 
      Hon. Steve Daines to the U.S. Department of Veterans Affairs
    Question 1.  Prior to the Choice Act being signed into law, there 
were several existing programs to provide for fee-based care to 
veterans by outside providers, some of which allowed for non-Medicare 
providers to administer care. The Choice Program, on the other hand, 
requires every provider in the program to be a Medicare provider.
    a. As we consider ways to consolidate and improve the programs that 
provide care for our veterans, would allowing non-Medicare providers, 
including psychologists, to administer care or increased flexibility 
for reimbursement rates result in more timely care for veterans in 
Montana and across the country?
    Response. The Department of Veterans Affairs (VA) does not plan to 
limit the external network to only Medicare providers. VA recognizes 
establishing a robust network of providers will also include non-
Medicare providers. This is similar to recent changes in the existing 
program as a result of Public Law 114-41. As VA considers ways to do 
this while still maintaining high standards for the quality of care 
Veterans receive, it will be important to develop strong credentialing 
processes for non-Medicare providers that only allow high-quality 
providers into the network.

    b. If so, what alternative reimbursement rates or standards would 
be most effective for providing care for veterans?
    Response. As described in the report, VA plans to move toward 
regional Medicare rates. However, due to geographic limitations in 
certain locations, VA understands the importance of developing a 
flexible network to meet local Veterans needs. Additionally, as new 
models mature, VA will look toward CMS as they begin to pilot new 
payment models, including value-based payments and bundled payments.

    Question 2.  When the Choice Program was signed into law, it 
required that the program be implemented within a 90 day period of 
time. It is my understanding that this strict timeline played a 
significant role in reducing the number of third party administrators 
(TPAs) willing to bid for the contract, and resulted in two TPAs with 
existing customer service issues facilitating non-Department of 
Veterans Affairs (VA) care obtaining the contract. I have heard from 
thousands of Montana veterans expressing frustration and anger with the 
quality of service provided by existing TPAs.
    a. How is the VA holding the TPAs accountable?
    Response. Within the existing contract, VA established deliverable 
objectives that address how the contractor shall provide all health 
care necessary to accomplish the contract requirements, as well as 
applied a Quality Assurance Surveillance Plan (QASP) that measures the 
desired outcomes.
    Contract deliverables stipulate the frequency, methodology; 
contractor timeliness, acceptance period of reports, implementation 
plans, and structuring of administrative fee data. QASP measures pre-
determined performance thresholds linked to the VA's goal of providing 
immediate access to high-quality medical care in the community when 
unable to do so through VA facilities.
    Contracting Officer Representatives (COR) review contract 
deliverables monitoring compliance and adherence to the specified 
frequency, nature, and completeness of deliverable articles. CORs also 
provide technical assistance reviewing reports, document contract 
performance related to defined standards, and review administrative 
incentives and disincentives related to performance results.
    The Contracting Officer serves as the primary authority ensuring 
contractor compliance and administering findings and determinations. In 
the event corrective action is required, the Contracting Officer 
provides the necessary communication addressing performance, quality 
standards and medical documentation. The CORs are primarily responsible 
for technical administration of the contract and ensure proper 
surveillance of the contractor's performance, cataloging, and reporting 
deficiencies, and accepting and or rejecting deliverables. On 
September 24, 2015, the Contracting Officer issued Letters of 
Correction addressing the Contractors' performance, requesting 
immediate improvement in the following areas: medical documentation 
return; timeliness of appointment scheduling; timeliness of appointment 
completion, and network insufficiency. The Contractors have provided 
corrective action plans addressing the issues identified. Expectation 
is for the Contractors to improve performance next quarter (2nd 
quarter) or further action will be taken. VA has also established joint 
Program Management Review meetings with the Contractors and Contract 
Officer providing an opportunity to discuss PWS and QASP current state, 
as well as, review and monitor performance.

    b. What performance metrics are being measured?
    VA Response.
     Timeliness of authorization to Veteran appointment
     Timeliness of Veteran clinically indicated date to Veteran 
appointment date
     Timeliness of critical and urgent findings reported
     Veteran commute times
     Timeliness of Veteran Safety Event Reports
     Timeliness of Medical Documentation Return
     Timeliness of Patient Complaints/Grievances

    c. Moving forward, what can be done to ensure that there is a 
thorough bidding process and robust competition amongst TPAs to obtain 
VA contracts?
    Response. VA employs government contracting officials whose 
procedures conform to the Federal Acquisition Regulation. Acquisitions 
are accomplished by sealed bidding, negotiation, or simplified 
acquisition procedures. Each of these methods is designed to promote 
full and open competition to the maximum extent possible, which in turn 
allows all responsible bidders/offerors an opportunity to compete. The 
most suitable, efficient, and economical procedure will be used, taking 
into consideration the circumstances of each acquisition. To ensure VA 
chooses the most competent contractor/s, additional time over 90 days 
would be extremely beneficial for the process.

    Senator Moran. Gentlemen and ma'am, thank you for joining 
us. I cannot see the name plate, but I think it is Mr. Butler. 
Please proceed.

   STATEMENT OF ROSCOE G. BUTLER, DEPUTY DIRECTOR, NATIONAL 
  VETERANS AFFAIRS AND REHABILITATION DIVISION, THE AMERICAN 
                             LEGION

    Mr. Butler. Thank you, Acting Chairman Moran, Ranking 
Member Blumenthal, and Members of the Committee.
    The American Legion believes in a strong, robust veterans 
health care system designed to treat the unique needs of those 
who have worn the uniform. However, in the best of 
circumstances, there are situations where the system cannot 
meet the needs of the veteran and the veteran must seek 
community--care in the community.
    I am privileged to be here today and to speak on behalf of 
The American Legion, our National Commander, Dale Barnett, and 
more than two million members in over 14,000 posts across the 
country that make up the backbone of the Nation's largest 
wartime Veterans Service Organization.
    The American Legion recognizes that the Choice Program was 
an emergency measure to make health care accessible to veterans 
where VA was struggling to deliver such care. In recognition of 
the needs of an integrated system to deliver non-VA health care 
when needed, The American Legion believes VA needs to develop a 
well defined and consistent non-VA care coordination program 
with appropriate policies and procedures that include a 
patient-centered strategy which takes veterans' unique medical 
injuries and illnesses as well as their travel and distance 
into consideration.
    The VA Purchased Care Program dates back to 1945, when 
General Paul R. Hawley, Chief Medical Director of the Veterans 
Administration, implemented VA's hometown program. General 
Hawley recognized that many hospital admissions of World War II 
veterans could be avoided by treating them before they needed 
hospitalization. As a result, General Hawley instituted a 
program for hometown medical and dental care at government 
expense for veterans with service-connected ailments. Under the 
hometown program, eligible veterans could be treated in their 
community by a doctor or dentist of their choice.
    Fast forward 70 years. VA has implemented a number of 
programs to manage non-VA community health care programs at the 
request of Congress. Programs like fee-basis, Project ARCH, 
Patient-Centered Community Care, and the Veterans Choice 
program were implemented to ensure eligible veterans could be 
referred outside the VA for health care if needed. VA states 
that their Community Care Program would streamline the above 
programs by transitioning them into a single community health 
care program that is seamless and transparent to veterans.
    While these goals sound positive, The American Legion 
believes by resolution that a proper plan for non-VA care must 
include the following elements. Ensure all non-VA community 
care contract provides complete military cultural awareness and 
evidence-based training. Provide all non-VA providers with full 
access to VA's computerized patient records system. Ensure VA 
continues to improve its non-VA coordination through the Non-VA 
Care Coordination Program Office. Ensure VA improves collection 
of non-VA care documentation into the veteran's medical record. 
Ensure VA develops a national tracking system to avoid national 
or local purchased care contracts from lapsing. And, an 
automated claims processing system that fully automates the 
authorization and payment process.
    We are pleased to see that VA's plan incorporates many 
elements of our resolution. If approved by Congress, the plan 
will be rolled out using a three-phased approach. The plan will 
be implemented gradually, much like TRICARE, by developing 
appropriate provider network streamlining business processes. 
Additionally, VA plans call for cultivating a provider network 
to serve veterans utilizing Federal health care providers, 
academic affiliates, and community providers.
    The American Legion believes VA has not yet demonstrated it 
has the expertise or experience to establish large provider 
networks. So far this year, it has relied on third-party 
participants, such as HealthNet and TriWest, to fulfill these 
requirements. VA plans do not specify whether they will 
continue using third-party contractors to fulfill this 
requirement if the plan is approved. Serious thought needs to 
be given to this question.
    VA's plan is clearly a huge undertaking and we have 
concerns about VA's ability to implement the plan. VA has 
attempted to roll out or has rolled out numerous projects in 
past years that required dramatic system, information 
technology, and policy changes. VA must guarantee Congress, 
VSOs, and veterans that their community care plan will not 
result in similar failures like other projects such as Core FLS 
(Core Financial and Logistics System), scheduling redesign, a 
veteran's lifetime electronic health record, VA's four major 
construction projects, or the initial rollout of the Choice 
Program, to name just a few. Veterans are calling on VA to get 
it right on their first attempt and not continually waste 
taxpayers' dollars.
    In summary, if VA can address The American Legion's 
concerns, we are cautiously optimistic that VA plans for moving 
forward may work and could represent an important step toward a 
truly integrated model for delivering veterans' health care 
within VA and the community collectively.
    Again, I thank the Committee for their hard work and 
consideration for this legislation as well as your dedication 
to finding solutions for problems that stand in the way of 
delivery of veterans health care, and I am happy to answer any 
questions.
    [The prepared statement of Mr. Butler follows:]
   Prepared Statement of Roscoe G. Butler, Deputy Director, National 
   Veterans Affairs and Rehabilitation Division, The American Legion
    The American Legion believes in a strong, robust veterans' 
healthcare system designed to treat the unique needs of those who have 
served. However, even in the best of circumstances there are situations 
where the system cannot meet the needs of the veteran, and the veteran 
must seek care in the community. Rather than treating this situation as 
an afterthought, an add-on to the existing system, The American Legion 
believes the Department of Veterans Affairs (VA) must ``develop a well-
defined and consistent non-VA care coordination program, policy and 
procedure that includes a patient centered care strategy which takes 
veterans' unique medical injuries and illnesses as well as their travel 
and distance into account.'' \1\
---------------------------------------------------------------------------
    \1\ Resolution No. 46: Department of Veterans Affairs (VA) Non-VA 
Care Programs
---------------------------------------------------------------------------
    Chairman Isakson, Ranking Member Blumenthal and distinguished 
Members of the Committee, on behalf of National Commander Dale Barnett 
and The American Legion; the country's largest patriotic wartime 
service organization for veterans, comprising of over 2 million members 
and serving every man and woman who has worn the uniform for this 
country; we thank you for the opportunity to testify regarding The 
American Legion's position on ``Consolidating Non-VA Care Programs.''
    VA has recently rolled out their own proposal to streamline all of 
the legacy systems for non-VA care and consolidate them into a single 
program--as they were directed to do by law when Congress authorized 
the ability to move funds from the Choice program to cover shortfalls 
in the other non-VA care accounts.\2\ As set forth in statue, VA health 
care falls into one of the following categories: hospital care, 
outpatient medical care, domiciliary care, rehabilitative services, 
preventive health services,\3\ and extended care services.\4\ VA health 
care is offered to eligible veterans, and in some cases, their spouse 
and dependents may be eligible for VA health care under the Civilian 
Health and Medical Program of the VA (CHAMPVA).\5\
---------------------------------------------------------------------------
    \2\ Public Law 114-41: July 31, 2105: Section 4002
    \3\ Title 38 U.S.C. 1701
    \4\ Title 38 U.S.C. 1710B
    \5\ Title 38 U.S.C. 1781:CHAMPVA Program
---------------------------------------------------------------------------
    The VA purchased care program dates back to 1945, when General Paul 
R. Hawley, Chief Medical Director, Veterans Administration, implemented 
VA's hometown program. General Hawley recognized that many hospital 
admissions of World War II veterans could be avoided by treating them 
before they needed hospitalization. As a result, General Hawley 
instituted a plan for ``hometown'' medical and dental care at 
government expense for veterans with service-connected ailments. Under 
the Hometown Program, eligible veterans could be treated in their 
community by a doctor or dentist of their choice. Since then, VA has 
implemented a number of programs in order to manage veterans' health 
care when such care is not available in a VA health care facility, 
could not be provided in a timely manner, or is more cost effective. 
Programs like Fee-Basis, Project ARCH (Access Received Closer to Home), 
Patient-Centered Community Care (PC3), and the Veterans Choice Program 
(VCP) were implemented by Congress to ensure eligible veterans could be 
referred outside the VA for needed health care.
    VA's Community Care plan would streamline their Fee-Basis, Project 
ARCH, PC3 and Choice programs by transitioning them into a single 
community health care program that is seamless and transparent to 
veterans. VA's stated goals for the plan are to:

     Make access to community health care easier to understand 
and to meet veteran's overall health care needs;
     Improve the veterans' health care experience across all 
touch points of care;
     Clarify community care for VA staff, and make it easier 
for community providers to partner with VA;
     Provide seamless connections between VA and community 
providers;
     Apply leading practices from health plans, health systems, 
and high performing VA programs, and
     Prepare VA to evolve to meet new and changing demands and 
support health care trends.

    While these goals sound positive, The American Legion believes the 
VA plans lacks specific details on how the goals would be accomplished 
to ensure success. The American Legion believes a proper plan for non-
VA care should include the following elements:\6\
---------------------------------------------------------------------------
    \6\ Resolution No. 46: Department of Veterans Affairs (VA) Non-VA 
Care Programs

     Ensure all non-VA care contracted providers complete 
military culture, awareness, and evidence-based training to ensure 
veterans receive the same or better quality of care standards that they 
would if they received this care within VA;
     Provide all non-VA providers with full access to VA's 
Computer Patient Record System (CPRS) to ensure the contracted 
community provider can review the patient's full history, allow the 
provider to meet all the quality of care screening and measures tracked 
in CPRS, and speed up receipt and documentation from the non-VA 
provider encounter to ensure it's added to the veteran's medical 
record;
     Ensure VA continues to improve its non-VA care 
coordination through the Non-VA Care Coordination (NVCC) program office 
to improve and standardize their process for referrals to non-VA care;
     Ensure VA improves collection of non-VA care documentation 
into the veteran's medical record;
     Ensure improved coordination of care between VA and non-VA 
providers;
     Ensure VA develops a national tracking system to ensure 
national or local purchased care contracts do not lapse; and
     An automated claims processing system should be 
implemented that automates the payment process leaving little to no 
room for human errors.

    Additionally, VA's community health care plan does not address how 
community health care providers will be trained to better understand 
military culture. VA needs to ensure all non-VA care contracted 
providers complete military culture awareness training to ensure 
veterans receive the same standard of care or better than they receive 
in VA. The American Legion strongly believes that the Department of 
Veterans Affairs (VA) must develop and ensure that all non-VA health 
care contracts with non-VA health care providers includes military 
culture and awareness training in order for the veteran to receive the 
best health care.\7\
---------------------------------------------------------------------------
    \7\ Resolution No. 46: Department of Veterans Affairs (VA) Non-VA 
Care Programs
---------------------------------------------------------------------------
    Under VA's current plan, it calls for a seamless connection between 
VA and community health care providers. Care coordination would help 
veterans navigate the health care system by providing health care 
management and coordination that is necessary to achieve positive 
health care outcomes and enhanced medical records sharing. The VA needs 
to provide all non-VA providers with full access to VA's Computerized 
Patient Record System (CPRS) to ensure that community health care 
providers can review the patient's full medical history for continuity 
of care purposes. Allowing access to CPRS would allow the provider to 
meet all the quality of care screening and measures that are tracked in 
CPRS. It would also speed up receipt and documentation from the non-VA 
health care encounter to ensure all documentation is added to the 
veteran's medical record.
    The American Legion believes VA's plan to provide Non-VA providers 
full access to VA's CPRS is a good start, but the plan fails to address 
a systematic approach of electronic medical record sharing. VA's plan 
must include electronic medical information sharing between the non-VA 
providers to include the Department of Defense (DOD), Indian Health 
Services (IHS), and non-VA community health care providers in order to 
provide veterans the best health care experiences.
    According to VA, if approved by Congress, the plan will be rolled 
out using a three-phased approach. The plan will be implemented 
gradually, much like how TRICARE was over the years, by developing 
appropriate provider networks and streamlining business processes. The 
American Legion strongly believes VA must standardize its reimbursement 
rates, but not set the rates too low where providers are discouraged in 
partnering with the VA in providing needed health care services to 
veterans outside the VA healthcare system.
    Due to continuously receiving concerns from veterans about slow 
payments and the lack of medical record documentation, The American 
Legion has concerns about VA's ability to implement the plan. While VA 
must ensure appropriate medical record documentation is received from 
the non-VA health care provider to incorporate into the veteran's 
medical record, the veteran should not be held hostage due to VA and 
non-VA health care providers inability to implement a process that 
ensures medical record sharing. These delays have resulted in adversely 
impacting veteran's credit, and VA must guarantee whatever process is 
put in place will not result in veteran's being harmed in any way what 
so ever.
    VA's plan would call for cultivating a provider network to serve 
veterans utilizing Federal health care providers, academic affiliates, 
and community providers. The American Legion believes VA has not 
demonstrated it has the expertise or experience to establish large 
provider networks and has relied on third-party participants i.e. 
HealthNet and Tri-West to fulfill these requirements. VA plan does not 
state whether it would continue with utilizing third-party contractors 
to fulfill this requirement; this must be one of the first things 
decided before moving forward.
                               conclusion
    In summary, if VA can address the issues The American Legion has 
highlighted above, The American Legion is cautiously optimistic that 
the framework for moving forward is positive and that this plan could 
represent an important step moving toward a truly integrated model for 
delivering veterans' health care at the VA and within the community 
collectively.
    The American Legion thanks this Committee for their diligence and 
commitment to our Nation's veterans as they struggle to access health 
care across the country. Questions concerning this testimony can be 
directed to Warren J. Goldstein, Assistant Director in The American 
Legion Legislative Division.

    Senator Moran. Thank you very much.
    Mr. Selnick.

 STATEMENT OF DARIN SELNICK, SENIOR VETERANS AFFAIRS ADVISOR, 
                 CONCERNED VETERANS FOR AMERICA

    Mr. Selnick. Thank you, Chairman Moran, Ranking Member 
Blumenthal, and Members of the Committee. I appreciate the 
opportunity to testify at today's hearing on the recently 
released VA plan for consolidating non-VA care programs.
    In the interest of full disclosure, I am a Commissioner on 
the Commission on Care. My testimony today reflects only that 
of CVA and my own personal observations. In no way does my 
testimony reflect, nor is it representative of, the Commission, 
the VA, or the administration.
    CVA agrees that there needs to be one new Veterans Choice 
Program that deals with the root cause problems and is simple, 
effective, and fiscally responsible, with the veteran in 
control of how, when, and where they wish to be served. This 
has been a stated goal of the VA.
    Although we laud the VA in coming up with a comprehensive 
plan for such a program, after careful review, it is our 
opinion that this plan does not meet the criteria listed above. 
Instead, it continues the VA status quo, cherry picks the 
Independent Assessment, and ignores the Commission on Care. The 
plan will fail, cost the taxpayer billions, and impact 
negatively on veterans' health care.
    Instead of a simple program, VA has developed a grandiose 
dream concept plan that does not deal with the challenges it 
faces, nor is it in line with Dr. Shulkin's comments that VA 
will shift the way it does health care by ceasing to provide 
services commonly found in the health care industry. VA instead 
is expanding into areas it does not have expertise in.
    We identified five key flaws in the plan. First, 
implementation requires a high-performing health care 
organization, such as the Cleveland Clinic. VHA is a low-
performing health care system based on socialized medicine, 
using an antiquated HMO staff model, focusing on a high degree 
of control. As the Independent Assessment has stated, solving 
these problems will demand far reaching and complex changes 
that, when taken together, amount to no less than a systemwide 
reworking of VHA.
    The number of issues VHA currently faces appears 
overwhelming. VHA is in the midst of a leadership crisis, and 
VA health care systems are in danger of becoming obsolete. Last 
year, VHA made 85 million appointments but only completed 55 
million appointments. Recent headlines such as ``Lapses in 
Urology Care at Phoenix VHA Endanger Patients,'' and VA IG and 
GAO reports suggest VHA is not up to the task.
    Second, VA has provided a concept plan that proposes some 
lofty goals and operating principles but is not grounded in the 
reality of the way veterans access their care. VHA is operating 
on the false premise that it is the medical home for the 
veterans it serves while providing only a minority of their 
health care. As the Independent Assessment states, veteran 
patients' reliance on VA ranges from 15 to 34 percent for 
office-based visits to laboratory services.
    Third, VA gives lip service to the Independent Assessment's 
recommendations, findings, and systems approach, but cherry 
picks some recommendations and ignores others. VA is focused on 
what is best for it instead of embracing the governance, data 
and tools, operations and leadership reforms needed.
    Fourth, veterans want real choice in private health care. 
According to an October 2015 poll, 91 percent of veterans want 
more health care choices. Instead, VA takes greater control 
over veterans' eligibility and access. Veterans would be 
eligible if they are more than 40 miles from a VA designated 
PCP. This is unrealistic because veterans' PCPs are not 
designated from VA and most of their needed care is from a 
specialist. With wait times, VA is gaming the system by having 
undefined wait time goals for every service and leaving it up 
to the VA provider to decide the clinically necessary 
timeframe. Accessing the high-performance network is another 
example. VA's undetermined referral process, which could take 
months for each step. The first hurdle is the VA core network 
and the preferred and standard tiers, all controlled by VA.
    Fifth, the plan is extremely premature, especially in light 
of the charge Congress gave the Commission on Care to examine 
how best to organize VHA and deliver health care to veterans. 
The VA plan could short circuit this existing charge and be in 
conflict with the Commission on Care recommendations.
    To overcome the flaws and challenges, CVA proposes the 
following three steps. One, VA should focus on the short-term 
solutions of consolidation. That is phase one in the plan. It 
should be refined with the addition of implementation 
evaluation. It should be done in consultation with the 
Commission on Care.
    Two, VA should refine phases two and three of the program, 
in consultation with the Commission on Care, using an 
integrated systems approach with proper governance, data and 
tools, operations and leadership reforms.
    Three, VA should finalize phases two and three only after 
the Commission on Care provides its findings and 
recommendations to the President and Congress. Although it is 
tempting to move too quickly on consolidating the non-VA care 
programs, you must break the cycle of reform and failure by 
having the right plan that focuses on the veterans first and 
not the VA.
    As President Theodore Roosevelt said, ``A man who is good 
enough to shed his blood for the country is good enough to be 
given a square deal afterwards.'' Let us make sure our veterans 
get the square deal they deserve on their health care.
    CVA is committed to overcoming any and all obstacles and we 
look forward to working with the Chairman, Ranking Member, and 
all Members of this Committee to achieve this shared commitment 
to veterans.
    [The prepared statement of Mr. Selnick follows:]
 Prepared Statement of Darin Selnick, Senior Veterans Affairs Advisor, 
                     Concerned Veterans for America
    Thank you Chairman Isakson, Ranking Member Blumenthal, and Members 
of the Committee. I appreciate the opportunity to testify at today's 
hearing on how to consolidate non-VA care programs to ensure veterans 
receive the care they need without delay and to review the adequacy of 
the recently released plan to consolidate seven programs of the 
Department of Veterans Affairs (VA) into one non-VA care program. Your 
leadership on this issue is critical to ensure that the plan is well 
thought out and deals with the root-cause problems, so that veterans 
truly get a real choice that provides them the timely, convenient and 
quality health care they deserve.
    In the interest of full disclosure, I am a Commissioner on the 
Commission on Care, but my testimony today reflects Concerned Veterans 
for America (CVA) and my own personal observations. In no way does my 
testimony reflect, nor are they representative of, the Commission, the 
VA, or the Administration. The views I present here today are entirely 
my own.
    CVA agrees that it is very important to consolidate all of the 
various purchase care programs into one New Veterans Choice Program. 
This single program needs to be simple, effective, fiscally 
responsible, practical, and feasible. Just as important is that the new 
program be veteran-centric and move toward real choice so that the 
Veteran is in control of how, when, and where they wish to be served--a 
stated goal of the VA in the past.\1\
---------------------------------------------------------------------------
    \1\ ``The Road to Veterans Day 2014 Fact Sheet'' http://
www.blogs.va.gov/VAntage/wp-content/uploads/2014/09/
RoadToVeteransDay_FactSheet_Final.pdf, accessed May 5, 2015.
---------------------------------------------------------------------------
    Although we laud and appreciate the VA in coming up with a 
comprehensive plan in such a short time, after careful review it is our 
opinion that this New Veterans Choice Program does not meet the 
criteria listed above, and instead perpetuates the VA status quo. We 
feel that the proposal cherry-picks the work and intent of the 
Independent Assessment while ignoring the Commission on Care that was 
established by the authority granted in the Veterans Access, Choice, 
and Accountability Act of 2014. Stated bluntly, we believe that 
approval and implementation of the plan will lead to certain failure 
while costing the taxpayer billions and impacting negatively on 
veterans' health care.
    VA has fallen back onto its old ways and developed a grandiose 
dream concept plan that does not deal with the reality and challenges 
it faces to stay afloat with its current day to day operations. Nor is 
it in line with Dr. Shulkin's recent comments that VA will shift the 
way it does health care by ``[ceasing to] provid[e] services commonly 
found in the health care industry.'' \2\ VA once again is doubling down 
on its previous failures by trying to over control all aspects of 
health care provision to veterans and expanding its health care 
operations into areas it does not have expertise in.
---------------------------------------------------------------------------
    \2\ http://Federalnewsradio.com/management/2015/10/va-pitches-
fundamental-shift-veterans-health-care-congress/, accessed November 24, 
2015.
---------------------------------------------------------------------------
    To illustrate our concerns, I will examine five key flaws in the 
premises and processes in the VA new Veterans Choice Program.
    First--Implementing VA's plan would likely require a high-
performing heath care organization, with the organizational capability 
and desire carry out the task that VA has set for itself. The Cleveland 
Clinic is possibly a model for the kind of modern, dynamic and flexible 
organization that would be able to implement such a plan. As it stands, 
VA's Veterans Health Administration (VHA) is a low-performing health 
care system that is based on socialized medicine, and which uses an 
antiquated HMO staff model. This state of affairs require broad-based 
and fundamental reforms to way VHA does business. It requires us to go 
back to drawing board and not add more layers on top of a crumbling 
infrastructure. Unfortunately, too many stakeholders are invested in 
perpetuating a dated and failing model rather than bringing VA into the 
21st Century.
    As the Independent Assessment has shown, VHA is clearly a broken 
health care organization that at best is treading water. Some examples 
from the Assessment include:

     ``The Independent Assessment highlighted systemic, 
critical problems and confirmed the need for change that has been 
voiced by Veterans and their families, the American public, Congress, 
and VHA staff. Solving these problems will demand far-reaching and 
complex changes that, when taken together, amount to no less than a 
system-wide reworking of VHA.''
     ``As the assessment reports reveal, the number of issues 
VHA currently faces appears overwhelming.''
     ``VHA is in the midst of a leadership crisis.''
     ``VA/VHA health care systems are in danger of becoming 
obsolete.''
     These shortfalls should not be viewed as individual 
anomalies, but rather manifestations of the systemic findings that 
plague VHA.

    A further example from VA operations that highlights the situation 
is last year VHA made 85 million appointments but only completed 55 
million appointments.
    Recent headlines such as ``Lapses in urology care at Phoenix VA 
endangered patients'' \3\ and ``Florida Hospitals: VA owes $134 million 
in unpaid claims'' \4\ Does this sound like a health care organization 
that is up to the task that VA has set for itself?
---------------------------------------------------------------------------
    \3\ www.stripes.com/news/veterans/va-ig-lapses-in-urology-care-at-
phoenix-va-endangered-patients-1.373536, accessed November 24, 2015.
    \4\ http://www.miamiherald.com/news/health-care/
article45269961.html, accessed November 24, 2015.
---------------------------------------------------------------------------
    Second--VA has provided a concept plan, not an implementation plan. 
Although it discusses some lofty goals, enumerates ideal operating 
principles, and makes great use of buzz words in its 121 pages, it is 
not grounded in the reality of day-to-day VHA operations nor tied to 
the way veterans access their care. VHA has a track record of coming up 
with great sounding plans that are never implemented correctly. The 
continuous stream of VA IG and GAO reports provides a good sample of 
VA's past implementation failures. VHA is also operating on the false 
premise that it is the medical home for the 5.8 million veterans it 
serves. This is not true. In most cases, VHA provides only the minority 
of their overall health care. As the Independent Assessment states, 
veteran patients reliance on VA ranges from ``15 percent for all 
office-based visits to 34 percent for office-based laboratory 
services.''
    Third--VA gives lip service to the Independent Assessment's 
recommendations and its findings. Nonetheless, the plan does not truly 
incorporate the systems thinking or the four systemic findings 
approach. Instead, it continues a piecemeal approach that perpetuates 
its own goals by cherry-picking certain recommendations and ignoring 
the key supporting recommendations of long-term reforms that better 
serve the veteran. Once again it seems focused on what is best for VA. 
It relegates the Independent Assessment's approach of using a true 
integrated systems approach which would embrace the governance, data 
and tools, operations and leadership reforms needed to improve for the 
long term its health care operating model and provide the best value 
for its veteran patients.
    Fourth--Veterans want real choice that is easy to use, clear 
eligibility criteria and access to quality private sector health care 
that meets their needs. According to an October 2015 Tarrance Group 
poll, 91% of veterans agree that it is important to give veterans more 
health care choices even if it means paying a little more out of 
pocket. The VA plan does not truly give the veteran more choices as it 
is more complicated and less veteran-centric. Instead it gives VA even 
greater control over the veteran, especially in the areas of 
eligibility and access using the proposed High-Performing Network--at 
the end of the day, VA still controls what the veteran is able to do.
    For example, page 42 of the plan recommends that veterans be 
eligible if they are more than 40 miles from a VA designated primary 
care physician (PCP). The 40 miles from a VA designated PCP is 
unrealistic because either the veterans true PCP is not designated from 
VA and/or their health care service needed is not based on the PCP. We 
believe a veteran should not have to travel more than 40 miles from the 
point of health care serve needed. In terms of wait-times, VA is 
setting the system in a way that would allow them to further game the 
system and maintain control by having un-defined wait time goals for 
every service and leaving it up to the VA provider to decide if those 
wait-time are clinically necessary. This is a recipe for veterans being 
denied choice, in continuity with VA's track record.
    On page 57 of the plan we see another example of the lack of choice 
for veterans in accessing the High-Performing Network. According to the 
plan, if VA can't provide the veteran their health care, then the 
veteran has a multi-step process with undetermined approval and 
timeframes which could take months for each step. First, the VA has to 
search for another Federal Government or academic teaching affiliate in 
its core network. If that does not work then the preferred tier, then 
the standard tier. VA controls everything, the tiers, referrals, and 
the limited number of providers. The veteran becomes just VA's loyal 
subject. Where is the private sector choice and timeliness with this 
convoluted process? Furthermore, if you are a private sector provider 
would you want to deal with this tiered mess?
    Fifth--The new Veterans Choice Program is extremely premature, 
especially in light of the charge Congress gave the Commission on Care 
in the Veterans Access, Choice, and Accountability Act of 2014. That 
charge included a mandate to ``strategically examine how best to 
organize the Veterans Health Administration, locate health care 
resources, and deliver health care to veterans during the 20-year 
period.'' No one knows what the Commission on Care may come out with. 
It could be similar or it could be a whole different set of 
recommendations that are at cross-purposes with the VA plan. If the VA 
plan is implemented now in its current form, it could short circuit the 
existing process and possibly provide conflicting recommendations.
    These are but a few examples to the flaws and challenges for the 
new Veterans Choice Program plan. So how should VHA proceed to 
consolidate its seven purchase care programs into one non-VA care 
program? CVA proposes the following three basic steps.

    1. VA should focus on the immediate short-term need of 
consolidating its seven purchase care programs into one non-VA care 
program. This should be the temporary short-term new Veterans Choice 
Program solution. We believe VA is on the right path with Phase 1 in 
the plan. Phase 1 should be refined with the addition of an 
implementation and evaluation plan. The plan, formulated in conjunction 
with Congress, should ensure quick and transparent action of systems, 
process, regulations needed and should be done in consultation with the 
Commission on Care.
    2. VA should refine the other phases of the plan in consultation 
with the Commission on Care using a true systems approach which 
embraces proper governance, data and tools, operations and leadership 
reforms needed.
    3. VA should finalize the long-term new Veterans Choice Program 
only after the Commission on Care provides its finding and 
recommendations to the President and Congress and they have decided 
which recommendations are feasible and advisable.

    Although it is tempting to move quickly on fixing and consolidating 
the existing seven programs of the VA into one non-VA care program, we 
must learn from the past and break the cycle of reform and failure by 
having the right plan that deals with the root-cause problems and 
focuses on the veteran first, not the VA. 5.8 million veterans are 
depending on your leadership for this.
    As President Theodore Roosevelt said ``A man who is good enough to 
shed his blood for the country is good enough to be given a square deal 
afterwards.'' Let's make sure our veterans get the square deal they 
deserve on their health care.
    CVA is committed to overcoming any and all obstacles that stand in 
the way of achieving what is best for veterans. We look forward to 
working with the chairman, ranking member, and all Members of this 
Committee to achieve this shared commitment.

    Senator Moran. Mr. Selnick, thank you.
    Mr. Rausch.

         STATEMENT OF BILL RAUSCH, POLITICAL DIRECTOR, 
            IRAQ AND AFGHANISTAN VETERANS OF AMERICA

    Mr. Rausch. Acting Chairman Moran, Ranking Member 
Blumenthal, on behalf of Iraq and Afghanistan Veterans of 
America and our 425,000 members and supporters, thank you for 
the opportunity to share our views with you today at the 
hearing, Consolidating Non-VA Care Programs.
    IAVA is proud to have previously testified in front of this 
Committee recommending the need for consolidation of care in 
the community for veterans enrolled in VA health care, and we 
applaud Congress for requiring VA to put forward a plan for 
consolidation. We also want to recognize senior leaders at VA, 
who are still with us here today, for acknowledging the need 
for consolidation and providing an approach and process that 
was inclusive, transparent, and veteran-centric.
    Last year, as the much-needed Veterans Access to Choice and 
Accountability Act was being implemented, it became apparent to 
our members across the country the new law was confusing and 
added to a series of preexisting VA programs designed to 
provide care in the community. According to IAVA's most recent 
member survey, 43 percent of respondents stated the main reason 
for not utilizing Choice was simply because they did not know 
how, while 28 percent of our members who utilized the program 
said their experience using Choice was extremely negative.
    Although necessary to address the access crisis at VA 
revealed by the scandal in Phoenix, the Choice Program quickly 
became an example of what was and what was not working for 
veterans, physicians, and VA employees when it came to 
providing accessible, timely, and high-quality care in the 
community.
    IAVA has conducted numerous surveys, polls, focus groups, 
collecting feedback from thousands of our members while working 
with industry and other stakeholders to understand what was 
needed in order to have a successful consolidation of care in 
the community. We have attended over 25 formal meetings with 
other VSOs and VA staff to share what our members were 
experiencing at the local level in terms of care in the 
community and have had dozens of additional informal calls, 
meetings, and opportunities to provide direct feedback from 
post-9/11 veterans.
    Based on the feedback from our members, IAVA believes any 
plan to consolidate care in the community must be simple to 
understand, it must be consistent across the country, and place 
the needs of veterans above all else. The plan put forward by 
VA meets the above criteria and should be the framework for 
legislation in order to consolidate care in the community and 
provide improved and seamless access to care for veterans.
    Despite the progress that has been made by Congress, VA, 
and veterans across the community, we still have three main 
concerns. One, Congress drafting and enacting the required 
legislation to effectively consolidate care. Two, VA's ability 
to effectively implement the new laws designed to designate and 
consolidate care. And, three, a continued focus on access 
without enough emphasis on health care outcomes for veterans, 
which was talked about earlier in today's hearing, especially, 
though, as veterans start to see community providers who have 
not historically served the veteran community.
    Congress acted swiftly and put veterans first in the wake 
of the access crisis by passing the Choice Act, and this 
Committee has been a strong partner with IAVA as the program 
was being implemented. Unfortunately, even as Congress mandated 
that VA provide a consolidation of care plan, some Members of 
Congress continue to put forward incomplete one-off plans and 
legislation that did not include feedback from veterans, VSOs, 
or VA.
    As Congress rightly moves forward to simplify a very 
confusing process for veterans by drafting legislation to 
consolidate care in the community, IAVA highly recommends 
Congress should utilize VA's plan as the framework for 
legislation and avoid one-off proposals that are misinformed or 
put politics ahead of veterans. After all, it was Congress who 
provided the numerous different plans that added to the 
confusion and inefficiencies which resulted in the need to 
consolidate care. We believe Congress should be mindful of 
these lessons learned from them and leverage the plan as the 
framework for consolidation of care moving forward.
    Our second concern centers around VA's ability to 
effectively implement a plan to consolidate care across the 
enterprise in a way that avoids many of the mistakes made 
during the implementation of Choice and truly puts the veteran 
at the center of every decision. During a recent roundtable 
discussion right here in Washington, DC, at my VA medical 
center with post-9/11 veterans and Secretary McDonald, one of 
our members stated, quote, ``There seems to be significant 
inconsistencies across VA, and although I have had positive 
experiences at VA, there are too many veterans who have had bad 
experiences,'' and I could not agree with him any more.
    In order to address these inconsistencies and shortcomings, 
IAVA recommends VA continue its collaborative effort to involve 
all stakeholders who share the vision of putting the veteran 
first and focus on values-based leadership and attempt to 
change the culture of VA across the country.
    Given the serious shortcomings related to training front-
line personnel on the implementation of Choice and customer 
service generally, the VA should also continue its efforts with 
MyVA and must ensure all VA employees are properly and 
consistently trained on any new plan to consolidate care.
    Finally, IAVA encourages everyone--Congress, VA, VSOs, 
industry, and other stakeholders--to place an increased 
importance on the quality of care veterans are receiving, 
especially as new providers who have not traditionally served 
veterans join new networks to provide care in the community. We 
need to pay special attention to the care veterans receive in 
the community to ensure that the quality of care is consistent 
with the high quality of care provided by VA and that private 
providers are educated on how best to treat our veterans.
    As community providers are increasingly called upon to 
serve this population, a recent RAND report suggests community 
providers might not be well equipped to address the needs of 
veterans and their families, specifically in understanding 
high-quality treatments for Post Traumatic Stress and other 
mental injuries.
    In closing, IAVA would again like to thank this Committee 
for your leadership and continued commitment to our entire 
community of veterans. It is a privilege to testify in front of 
this Committee today and we reaffirm our commitment to working 
with you and all of Congress, VA, and our VSO partners to 
ensure veterans have the access to the highest quality of care 
available and our country fulfills its sacred obligation to 
care for those who have truly borne the battle.
    There have been real challenges and tragedies in the past. 
We have talked about some of them today. However, we believe 
there is a real opportunity to transform the VA for today's 
veterans through a one team, one fight approach.
    Thank you, and I would be happy to field any questions.
    [The prepared statement of Mr. Rausch follows:]
    Prepared Statement of Bill Rausch, Political Director, Iraq and 
                    Afghanistan Veterans of America
    Chairman Isakson, Ranking Member Blumenthal and distinguished 
Members of the Committee: On behalf of Iraq and Afghanistan Veterans of 
America (IAVA) and our 425,000 members and supporters, thank you for 
the opportunity to share our views with you at today's hearing on 
``Consolidating Non-VA Care Programs.''
    IAVA is proud to have previously testified in front of this 
Committee recommending the need for the consolidation of care in the 
community for veterans enrolled in VA health care, and we applaud 
Congress for requiring VA to put forward a plan for consolidation. We 
also want to recognize senior leaders at VA for acknowledging the need 
for consolidation and providing an approach and process that was 
inclusive, transparent and veteran centric.
    Last year, as the much needed Veterans Access to Choice and 
Accountability Act (VACAA) was being implemented, it became apparent to 
our members across the country the new law was confusing and added to a 
series of pre-existing VA programs designed to provide care in the 
community. According to IAVA's most recent Member Survey, 43 percent of 
respondents stated the main reason for not utilizing the VA Choice Card 
program was simply because they did not know how; while 28 percent of 
our members who did utilize the program said their experience using the 
VA Choice Card was extremely negative. Although necessary to address 
the access crisis at VA caused by the scandal in Phoenix, the Choice 
Program quickly became an example of what was, and was not, working for 
veterans, physicians and VA employees when it came to providing 
accessible, timely and high-quality care in the community.
    IAVA has conducted numerous surveys, polls and focus groups 
collecting feedback from thousands of our members while working with 
industry and other stakeholders to understand what was needed in order 
to have a successful consolidation of care in the community. We have 
attended over 25 formal meetings with other VSOs and VA staff to share 
what our members were experiencing at the local level in terms of care 
in the community and have had dozens of additional informal calls, 
meetings and other opportunities to provide direct feedback from post-
9/11 veterans.
    Based on feedback from our members, IAVA believes any plan to 
consolidate care in the community must be simple to understand, 
consistent across the country and place the needs of the veteran above 
all else. The plan put forward by VA meets the above criteria and 
should be the framework for legislation in order to consolidate care in 
the community and provide improved and seamless access to care for 
veterans.
    Despite the progress made by Congress, the VA and the veteran 
community, we have three main concerns: (1) Congress drafting and 
enacting the required legislation to effectively consolidate care in 
the community; (2) the VA's ability to effectively implement the new 
laws designed to consolidate care; and (3) the continued focus on 
access without enough emphasis on healthcare outcomes for veterans, 
especially as veterans start to see community providers who have not 
historically served the veteran population.
    Congress acted swiftly and put veterans first in the wake of the 
access crisis by passing the Choice Act and this Committee has been a 
strong partner with IAVA as the program was being implemented. 
Unfortunately, even as Congress mandated that VA provide a 
consolidation of care plan, individual Members of Congress continued to 
put forward incomplete one-off plans and legislation that did not 
include feedback from veterans, VSOs or VA.
    As Congress rightly moves forward to simplify a very confusing 
process for veterans by drafting legislation to consolidate care in the 
community, IAVA highly recommends Congress utilize VA's plan as the 
framework for legislation and avoid one-off proposals that are 
misinformed or put politics ahead of veterans. After all, it was 
Congress who provided the numerous different plans that added to the 
confusion and inefficiencies which resulted in the need to consolidate 
care. We believe Congress should be mindful of these lessons, learn 
from them and leverage the VA's plan as the framework for consolidation 
of care moving forward.
    Our second concern centers around VA's ability to effectively 
implement a plan to consolidate care across their enterprise in a way 
that avoids many of the mistakes made during the implementation of 
Choice and truly puts the veteran at the center of every decision. 
During a recent roundtable discussion at the Washington, DC VA Medical 
Center with post-9/11 veterans and Secretary McDonald, one IAVA member 
stated, ``There seems to be significant inconsistencies across VA and, 
although I've had positive experiences at VA, there are too many 
veterans who have had bad experiences.''
    In order to address these inconsistencies and shortcomings, IAVA 
recommends VA continue its collaborative effort to include all 
stakeholders who share their vision of putting the veteran first and 
focus on values based leadership in an attempt to change the culture of 
VA across the country. Given the serious shortcomings related to 
training front line personnel on the implementation of Choice and 
customer service generally, the VA should also continue its efforts 
with MyVA and must ensure all VA employees are properly and 
consistently trained on any new plan to consolidate care.
    Finally, IAVA encourages everyone, Congress, VA, VSOs, industry and 
other stakeholders, to place an increased importance on the quality of 
care veterans are receiving, especially as new providers who have not 
traditionally served veterans join new networks to provide care in the 
community. We need to pay special attention to the care veterans 
receive in the community to ensure that the quality of care 
is consistent with the care provided by VA and private providers are 
educated on how to best treat our veterans. As community providers are 
increasingly called upon to serve this population, a recent RAND report 
suggests community providers might not be well equipped to address the 
needs of veterans and their families, specifically in 
understanding high quality treatments for PTSD and other mental health 
injuries.
    In closing, IAVA would again like to thank this Committee for your 
leadership and continued commitment to our veterans. It is a privilege 
to testify in front of the Committee today, and we reaffirm our 
commitment to working with Congress, VA and our VSO partners to ensure 
veterans have access to the highest quality care available and our 
country fulfills its sacred obligation to care for those who have borne 
the battle. There have been real challenges and tragedies in the past; 
however, we believe there is a real opportunity to transform the VA for 
today's veterans through a one team, one fight approach. Thank you, and 
I'd be happy to answer any questions you may have.

    Senator Moran. Mr. Rausch, thank you very much.
    Now, Mr. Kelley.

STATEMENT OF RAYMOND C. KELLEY, DIRECTOR, NATIONAL LEGISLATIVE 
    SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED STATES; 
  ACCOMPANIED BY JOY J. ILEM, NATIONAL LEGISLATIVE DIRECTOR, 
DISABLED AMERICAN VETERANS; AND CARL BLAKE, ASSOCIATE EXECUTIVE 
 DIRECTOR, GOVERNMENT RELATIONS, PARALYZED VETERANS OF AMERICA

    Mr. Kelley. Mr. Chairman, Ranking Member Blumenthal, on 
behalf of the Independent Budget partners, thank you for the 
opportunity to testify today.
    The IB partners strongly believe that veterans have earned 
and deserve to receive high-quality, comprehensive, accessible, 
and veteran-centric care. In most instances, VA care is the 
best and preferred option, but VA cannot provide all services 
to all veterans in all locations at all times. That is why VA 
must leverage private sector providers and other public health 
care systems to expand viable options.
    After months of working closely with VA officials and other 
stakeholders, we are pleased that many aspects of the VA's plan 
are closely aligned with IB's veteran health care reform 
framework. The IB partners support VA's concept of 
consolidating existing care in the community programs into a 
single program that would seamlessly combine the capabilities 
of the VA health care system with other public and private 
health care providers in the community wherever necessary.
    As part of the consolidation, several Community Care 
Programs would be allowed to sunset. While allowing these 
programs to sunset is a natural progression in the development 
of the consolidated Community Care Program, allowing them to 
expire without assurances that the new plan has the capability 
to handle the current workload is unacceptable.
    The IB partners also support the idea of expanded access to 
emergency treatment and provide access to urgent care, but we 
cannot support an across-the-board copayment for these 
services. The idea of charging veterans who are service-
connected for care is unacceptable. In an effort to ensure 
veterans utilize emergency and urgent care appropriately, the 
IB partners suggest the establishment of a nurse advice line.
    While the IB partners agree that VA must do a better job of 
collecting third-party payments, we adamantly opposed 
withholding health care from veterans if they fail to provide 
other health insurance information. Rather than punish veterans 
for not providing private insurance, VA should consider ways to 
incentivize veterans to provide that information.
    The IB's framework builds on VA's progress by addressing 
areas outside VA's plan's limited scope, which I will discuss 
now. Our four-pronged approach framework looks beyond the 
current organization and division between VA care and community 
care to create a blended and seamless system that will 
restructure the veterans health care delivery system, redesign 
the systems that facilitate access to health care, realign 
resources to reflect its mission, and reform VA's culture with 
workforce initiatives and accountability.
    Similar to VA's plan, the IB framework would combine the 
strengths and capabilities of the VA and other public and 
private providers, but included in our framework would be a 
veterans managed care program that would provide rural and 
remote veterans with options to receive veteran-centric and 
coordinated care regardless of where they live.
    We recommend that VA move away from a single arbitrary 
federally regulated access standard. Under the IB's framework, 
access to care would be a clinically based decision made 
between a veteran and his or her doctor or health care 
professional. Once the clinical parameters are determined, 
veterans would be able to choose among options developed within 
the network and schedule appointments that are most convenient 
to them.
    The IB calls for significant changes to VA's Strategic 
Capital Investment Plan, or SCIP, process by including public-
private partnership options and blending existing replacement 
options to better leverage Federal and local resources. We also 
have called for the establishment of a Quadrennial Veterans 
Review process, similar to the Quadrennial Defense Review, to 
align VA's strategic mission with its budget and operational 
plans and help provide continuity of planning across all 
administrations.
    The IB framework would establish a biennial independent 
audit of VA's budgetary accounts to identify accounts and 
programs that are susceptible to waste, fraud, and abuse.
    In addition, we call for strengthening VA's Veteran 
Experience Office by combining its capabilities with the 
Patient Advocate Program. Veterans Experience Officers would 
advocate for the needs of individual veterans who encounter 
problems obtaining VA benefits and services. They would also be 
responsible for ensuring the health care protected under Title 
38 are enforced.
    Our plan uses the same public and private resources as 
proposals provided that provide veterans with vouchers or 
insurance plans, but our plan makes public and private 
resources complementary instead of in competition with each 
other, which will be key to truly providing high-quality care 
with the most ease of access possible for veterans.
    Mr. Chairman, this concludes my testimony, and me and my 
partners look forward to any questions you may have.
    [The prepared statement of Mr. Kelley follows:]
Prepared Statement of Raymond C. Kelley, Director, National Legislative 
         Service, Veterans of Foreign Wars of The United States
    Mr. Chairman and Members of the Subcommittee: On behalf of the co-
authors of The Independent Budget (IB), Disabled American Veterans 
(DAV), Paralyzed Veterans of America (PVA) and the Veterans of Foreign 
Wars (VFW), thank you for the opportunity to offer our thoughts 
regarding the Department of Veterans Affairs' (VA) plan to consolidate 
its community care programs into a new choice program, as required by 
Public Law (P.L.) 114-41.
    After months of working closely with VA officials and other 
stakeholders, we are pleased that many of our key recommendations were 
incorporated into VA's plan, such as ensuring VA remains accountable 
for the care veterans receive through seamless care coordination--
regardless of where the care is delivered. We are also pleased that 
other key aspects of VA's plan are closely aligned with the IB's 
veterans health care reform framework, which is appended to this 
statement.
    The IB veterans service organizations (IBVSOs) strongly believe 
that veterans have earned and deserve to receive high quality, 
comprehensive, accessible and veteran-centric care. In most instances 
VA care is the best and preferred option, but the IBVSOs acknowledge 
that VA cannot provide all services to all veterans in all locations at 
all times; that is why VA must leverage private sector providers and 
other public health care system to expand viable options. However, when 
and where a veteran receives care should not be determined by Federal 
mandates. For that reason, the IBVSOs support VA's plan to move beyond 
arbitrary Federal standards regulating veterans' access to care in the 
community. We believe it is time to move toward a health care delivery 
system that keeps clinical decisions about when and where to receive 
care between a veteran and his or her doctor--without bureaucrats, 
regulations or legislation getting in the way.
    The IBVSOs strongly support VA's concept of developing high 
performing networks that would seamlessly combine the capabilities of 
the VA health care system with both public and private health care 
providers in the community, whenever necessary, resulting in expanded 
options for veterans to receive high quality care closer to home. This 
marks a significant shift in the role private health care providers 
play in the veterans' health care system, and is an important step 
toward ensuring veterans receive high quality, comprehensive, 
accessible and veteran-centric health care now and in the future.
    VA's plan is particularly sensitive to the importance of ensuring 
culturally competent providers for veterans. In a recent study entitled 
``Ready to Serve: Community-Based Provider Capacity to Deliver 
Culturally Competent, Quality Mental Health Care to Veterans and their 
Families,'' the RAND Corporation found that only 13 percent of private 
sector mental health care providers were able to deliver culturally 
competent and evidence-based mental health care to veterans and their 
families. Similarly, less than 50 percent of private sector mental 
health providers who were affiliated with VA or the Department of 
Defense met RAND's readiness criteria.
    VA's plan to adapt high performing networks to local communities 
recognizes that the private sector is not a panacea to health care 
quality and access. We support VA's plan to identify and empower 
private sector providers who are ready and able to deliver high 
quality, comprehensive, and veteran-centric health care. Doing so 
ensures the quality of care veterans receive from private sector 
providers is at least equal to or better than the care they are 
accustomed to receiving from VA. As the Nation's largest trainer of 
health care professionals, VA is already increasing the number of 
private sector providers who are able to deliver culturally competent, 
high quality care to veterans. The IBVSOs support VA's plan to build on 
existing programs by making military culture training and educational 
resources available to providers who want to participate in high 
performing networks. However, education alone is not enough. By 
leveraging the best capabilities of each community's health care 
market, VA would also ensure private sector providers who invest in 
learning how to care for veterans are given the appropriate workload to 
ensure they retain what they have learned.
    The IBVSOs firmly believe that VA's medical home model and 
experience providing veteran-centric care results in the best health 
outcomes for veterans and, therefore, VA must remain the primary health 
care provider for enrolled veterans. However, we recognize that VA 
lacks the resources and capacity to be everything to every veteran it 
serves. By establishing high performing networks to fill these gaps, VA 
can leverage the best capabilities that already exist in each health 
care market and free up resources to invest in services the community 
lacks. This type of blended health care delivery model will result in 
improved health care outcomes for veterans by providing them with more 
options closer to home and ensuring they receive the best quality care 
available in their communities.
    Other models currently being proposed to reform the way our Nation 
provides care to veterans fall dramatically short. For example, 
proposals to turn VA in to a voucher system would leave veterans with 
two lackluster choices: a VA health care system that would continue to 
be overburdened and underfunded; or private health care that does not 
guarantee access and lacks the required specialized care services and 
cultural competencies uniquely defined by veterans' needs. Meanwhile, 
proposals to privatize VA health care by establishing a health care 
exchange for veterans to shop for health care coverage would erode the 
benefits of VA's medical home model, which provides veterans a full 
continuum of care that is unmatched in the private sector.
    Creating health care exchanges for veterans also ignores findings 
outlined by the Centers of Medicare and Medicaid Services Alliance to 
Modernize Healthcare in its report entitled ``Independent Assessment of 
the Health Care Delivery Systems and Management Processes of the 
Department of Veterans Affairs'' (released on September 1, 2015) that 
veterans are sicker and higher users of health care than the general 
population. Furthermore, veterans who turn to VA tend to be the most 
indigent, disabled, and geographically isolated segment of the veterans 
population. In order to take on such a high risk portfolio of 
beneficiaries, insurance companies who participate in a veterans health 
care exchange will need to charge exorbitant premiums to offset the 
risk--significantly increasing health care costs for millions of 
veterans who can least afford it.
    Instead of moving toward privatization or pushing veterans out of 
VA and into government-run insurance plans, the IBVSOs believe that 
creating integrated networks combining VA with top tier private 
providers is the best way to expand access, improve quality and achieve 
better health outcomes for veterans.
    VA's consolidation plan has identified 11 legislative 
recommendations that seemingly must be enacted to ensure VA has the 
authority to implement planned reforms. Since there are not yet details 
or legislative language for most of these proposals, we cannot offer 
final views; however the IBVSOs offer the following initial 
observations and comments on each legislative recommendation:

1.  Improving VA's Partnerships 
with Community Providers to Increase Access to Care
    VA and Congress have been working for months to agree upon 
legislation that would fulfill this recommendation, and the IBVSOs have 
supported legislation to authorize VA to purchase care through 
agreements that are not subject to provisions of law governing Federal 
contracts. Authorizing VA to enter into non-Federal acquisition 
regulation (FAR) based agreements with private sector providers, 
similar to agreements under Medicare, would ensure VA is able to 
quickly provide veterans with community care options when needed.
    Provider agreements are a necessary tool to allow VA to meet the 
wide-ranging and unique health care needs of veterans, particularly 
veterans with spinal cord injury and dysfunction. This proposal would 
also protect VA's ability to continue to purchase private medical care 
when not otherwise available through VA, contracts, or sharing 
agreements.
    The IBVSOs would also like to thank Senator Blumenthal for his 
inclusion of certain federally recognized providers in the text of 
S. 2179, the ``Veteran Care Agreements Rule Enhancement Act.'' These 
entities serve on the front lines of a partnership between the VA and 
the Department of Health and Human Services that has served more than 
3,400 veterans across 31 States, the District of Columbia and Puerto 
Rico. These agencies provide severely ill and injured veterans of all 
ages the opportunity to determine their own support services to live 
independently at home.
    The IBVSOs have heard from veterans who live in contract extended 
care facilities who they may be required to leave the place they have 
called home for years because VA does not have the authority to renew 
provider agreements. We urge this Committee to quickly consider and 
pass this important legislation to ensure severely disabled veterans 
are not harmed by VA's inability to enter into provider agreements.

2.  Improving Access to Community Care through Choice Fund Flexibility
    This proposal would authorize VA to use the Veterans Choice Fund to 
pay for compensation and pension exams; any health care services under 
Chapter 17 of title 38, United States Code (U.S.C.); community care; 
emergency room and urgent care; and the cost of implementing VA's 
consolidation plan. While the IBVSOs support the intent of the 
proposal, we would need to review the legislative language before 
taking a position.
    The IBVSOs believe it is detrimental to veterans' health care when 
VA is unable to access all of the resources provided to accomplish its 
mission. Unfortunately, Public Law 113-146, the ``Veterans Access, 
Choice and Accountability Act of 2014,'' limited expenditure of the 
Veterans Choice Fund to care provided through the Choice Program. The 
fund was created to ensure VA has the resources necessary to provide 
community care when VA care is not readily available. In July, Congress 
granted VA the authority to transfer more than $3 billion of Veterans 
Choice Fund money to offset higher than expected demand on VA community 
care programs.
    The IBVSOs believe that another budget shortfall is a real 
possibility in fiscal year 2016, and requiring that a funding shortfall 
exist before VA is able to use this fund for purchasing community care 
could risk harming veterans. However, the IBVSOs do not support the use 
of this account as a slush fund to pay for unrelated services outside 
of its intended purpose. If VA has shortfalls in other accounts that 
are used to pay for non-health care services, such as compensation and 
pension exams, VA should request additional funding through the regular 
budget and appropriations process, including requests for supplemental 
appropriations.

3.  Increasing Accuracy of Funding by Recording Community Care 
Obligations at Payment
    The IBVSOs do not object to the purpose of this proposal, which 
would authorize VA to obligate funds for community care consults when 
payment is due instead of using an estimated amount to obligate funds. 
Such an accounting change could result in a more efficient way to track 
planned expenditures and obligate necessary funds when an authorization 
for care in the community takes place. It could also bring clarity to 
the authorization and obligation process so as to mitigate the 
possibility of a recurrence of the budget shortfall that occurred 
earlier this year.

4.  Improving Access to Community Care by Establishing the New VCP
    As previously stated, the IBVSOs support VA's concept of 
consolidating existing care in the community programs into a single 
program that relies on high performing networks that would seamlessly 
combine the capabilities of the VA health care system with both public 
and private health care providers in the community whenever necessary. 
Rather than simply giving veterans a choice card and leaving them on 
their own to navigate the private health market, this plan would 
require VA to ensure that sufficient real options exist for veterans to 
receive care closer to home through the new networks, which is far more 
likely to result in better health outcomes for veterans. The creation 
of these seamless and blended networks represents the central concept 
of the new Veterans Choice Program and we look forward to working with 
VA and Congress to develop the details required to implement this plan.
    While the VA plan starts to move beyond arbitrary Federal standards 
regulating when and where veterans can access medical care, we believe 
it should go further to ensure access is not determined by the distance 
veterans live from a VA medical facility or waiting longer than 30 days 
for care. The IBVSOs support the consolidation of community care 
programs, but do not agree with VA's proposal to define geographic 
access as 40 miles from a VA primary care provider. We firmly believe 
that the distance a veteran travels is not as important as determining 
the severity of his or her health care conditions and allowing the 
health care provider to decide the most appropriate time and location 
to received care for those conditions. Furthermore, geographic distance 
should not be used to determine when a veteran is authorized to seek 
care in the private sector. Private sector network providers should be 
considered an extension of VA. Doing so would ensure all veterans are 
afforded the opportunity to receive veteran-centric and coordinated 
care when they need it and where it is most appropriate.

5.  Increasing Access and Transparency by Requesting Budget Authority 
for a Community Care Account
    The IBVSOs understand the intent of this proposal, which would 
ensure more accurate and accountable funding for community care 
programs. Based on recent history of changes in VA's appropriations 
request structure, it is not clear that VA needs specific legislation 
to make this change. However, until we see more specific details, 
particularly about the proposed transfer authority, we are not able to 
offer support for this legislative proposal.

6.  Streamlining Community Care Funding
    Similar to our position on the prior legislative proposal (#5 
above), we understand the intent of this proposal, but would need to 
see the specific language to accomplish this change before taking a 
formal position.

7.  Improving Veterans Experience by Consolidating Existing Programs
    The IBVSOs cautiously support this proposal, which would sunset the 
numerous community care programs VA intends to consolidate. The IBVSOs 
believe that VA's transition to the new choice program must ensure 
veterans who are currently receiving community care through existing 
programs are afforded the opportunity to continue their care with the 
same providers. Before allowing these programs to sunset, VA must 
ensure the new Veterans Choice Program can handle the workload governed 
by the existing authorities that provide care to veterans.
    Permitting the Assisted Living for Veterans with TBI (AL-TBI) 
program to sunset without granting VA the authority to continue such 
services would have negative consequences on the veterans who are 
currently enrolled in the program. There is no indication that there 
will be follow-on services under the new Veterans Choice Program that 
will meet the specific needs of the veterans currently served by the 
AL-TBI program. In fact, the new program guarantees nothing to this 
segment of the veterans' population, and yet, these veterans are some 
of the most vulnerable served by VA. Additionally, we are concerned 
that VA does not have, nor has it requested, the authority to provide 
assisted living services to these veterans or other veterans enrolled 
in the VA health care system in need of extended care. Like the 
realignment of authorities for emergency and urgent care, assisted 
living is a service that should be expanded.

8.  Improving Veterans Access to Emergency Treatment and Urgent Care
    The IBVSOs support the plan to expand emergency treatment and 
urgent care in the community. However, we oppose the proposal for an 
across the board $100 co-payment for emergency care and $50 for urgent 
care. This proposal seemingly makes no exception for veterans with 
service-connected disabilities or who are currently exempted from co-
payments. Veterans currently exempted from co-payments should not be 
required to bear a cost-share for emergency and urgent care services.
    As an alternative, VA should consider establishing a national nurse 
advice line to help reduce overreliance on emergency room care. The 
Defense Health Agency (DHA) has reported that the TRICARE Nurse Advice 
Line has helped triage the care TRICARE beneficiaries receive. 
Beneficiaries who are uncertain if they are experiencing a medical 
emergency and would otherwise visit an emergency room, call the nurse 
advice line and are given clinical recommendations for the type of care 
they should receive. As a result, the number of beneficiaries who turn 
to an emergency room for their care is much lower than those who 
intended to use emergency room care before they called the nurse advice 
line. By consolidating the nurse advice lines and medical advice lines 
many VA medical facilities already operate, VA would be able to emulate 
DHA's success in reducing overreliance of emergency room care without 
having to increase cost-shares for veterans.
    Additionally, the IBVSOs have concerns about the requirement that 
eligible veterans must be ``active health care participants in VA'' in 
order to access these benefits. The strict 24-month requirement is 
problematic for newly enrolled veterans, many of whom have not been 
afforded the opportunity to receive a VA appointment due to appointment 
wait times, despite their timely, good faith efforts to make 
appointments following their separation from military service. This 
barrier has caused undue hardship on veterans who are undergoing the 
difficult transition from military service back to civilian life, and 
has resulted in veterans receiving unnecessarily large medical bills 
through no fault of their own. VA is aware of this problem and has 
requested the authority to make this exemption, however, the 
consolidation plan does not specifically address this needed change.
    Furthermore, this restriction could negatively impact some 
healthier veterans who do not need as much health care as others and 
may go more than two years without accessing VA care. This requirement 
could encourage veterans to seek unnecessary care from VA in order to 
remain eligible for VA's emergency and urgent care services.

9.  Improving Care Coordination for Veterans through Exchange of 
Certain Medical Records
    The IBVSOs support the intent of this proposal, which would lift a 
restriction on VA's ability to disclose certain medical information. 
Proper sharing or exchange of veterans' medical records is imperative 
if VA is going to responsibly coordinate care. While we understand 
patient privacy concerns that have been raised in the past, VA must be 
authorized to make all health information available to community 
providers who will be integral to the care being provided.
    The original intent of precluding VA from disclosing patient 
information regarding drug abuse, alcoholism, and infection of HIV or 
sickle cell anemia was to prevent veterans from being discriminated 
against based on their health care conditions. The IBVSOs believe that 
Public Law 111-148, the ``Patient Protection and Affordable Care Act,'' 
prohibition on discrimination based on health care conditions by health 
care providers renders the current VA restriction unnecessary.

10.  Aligning with Best Practices on Collection of Health Insurance 
Information
    This proposal would authorize VA to withhold health care from 
veterans if they fail to provide other health insurance information 
(OHI). The IBVSOs support the intent of requiring veterans to report 
information on other health insurance, however, we oppose the 
enforcement mechanism used to ensure veterans report their health 
insurance information. We are concerned that efforts to collect other 
health insurance information could result in veterans being denied non-
emergent care.
    Veterans are currently required to inform VA when their insurance 
information has changed and VA typically asks veterans about any 
changes to their insurance coverage when they present to a VA medical 
facility. To preclude veterans from receiving VA health care because 
they may not have known their insurance status changed or because they 
did not disclose this information could harm the veterans VA was 
created to serve.
    Additionally, the Government Accountability Office and the 
Congressional Budget Office have both found that VA's ineffective 
billing process affects its ability to collect the full cost of non-
service-connected VA care delivered to veterans with OHI coverage. The 
IBVSOs have also heard from veterans that VA has erroneously billed 
their private health insurance for service-connected care. While we 
understand VA's need to increase the amount of billing it processes, it 
is more important that it improve the efficacy of its billing process. 
Doing so would increase medical care collections without placing an 
undue burden on veterans.
    It is important to remember that VA health care is an earned 
benefit. This proposal would also diminish veterans' service and 
sacrifices by relegating this benefit to one that can be negated in 
order to increase the Federal Government's financial revenue. Rather 
than punishing veterans, VA should consider other ways to incentivize 
veterans to provide OHI and increase third party medical care 
collections.

11.  Formalizing VA's Prompt Payment Standard to Promote Timely 
Payments to Providers
    The IBVSOs support the intent of this proposal, which would 
formalize a VA Prompt Pay standard.
    While the IBVSO's generally believe that most of VA's legislative 
proposals outlined above are sound and necessary, we cannot offer final 
judgment without reviewing the legislative text of each these proposals 
in detail.
    Overall, the IBVSOs are glad to see that many aspects of VA's 
consolidation plan are aligned with the IB's veterans health care 
reform framework. The IB's framework builds on VA's progress by 
addressing barriers that are outside of the VA plan's limited scope. 
The IBVSOs have leveraged historical expertise, extensive conversations 
with veterans around the country, and survey data to develop a veterans 
health care reform framework centered on veteran perspectives and 
focused on the positives and negatives of the current VA health care 
delivery system.
    The IBVSO's four-pronged framework looks beyond the current 
organization and division between VA care and community care to create 
a blended and seamless system that is best for veterans.
          restructure the veterans health care delivery system
    The IB framework would optimize the strengths and capabilities of 
VA and combine them with other public and private health care providers 
by establishing local Veterans-Centered Integrated Health Care 
Networks. VA would be responsible for organizing the networks, 
coordinating care, and in most cases, would remain the principal 
provider of care for veterans.
    Similar to VA's consolidation plan, the IB framework would consider 
network providers an extension of VA care, which would enable veterans 
to work with their health care providers to determine the best way to 
receive care. For rural and remote veterans who live outside network 
catchment areas, the IB framework would establish a Veterans Managed 
Community Care program that would ensure all veterans have an option to 
receive veteran-centric and coordinated care wherever they live.
 redesign the systems and procedures that facilitate access to health 
                                  care
    We recommend that VA move away from single, arbitrary federally 
regulated access standards. Under the IB's framework, access to care 
would be a clinically based decision made between a veteran and his or 
her doctor or health care professional. Once the clinical parameters 
are determined, veterans would be able to choose among the options 
developed within the network and schedule appointments that are most 
convenient to them. Veterans not satisfied with clinical determinations 
or scheduling options would be able to seek a second clinical review of 
their health care needs.
    We also recommend establishing a nationwide system of urgent care 
at existing VA clinics, and affording veterans the opportunity to 
receive urgent care from smaller urgent care clinics around the country 
to alleviate much of the pressure on VA outpatient clinics.
 realign the provision and allocation of va's resources to reflect its 
                                mission
    The IBVSOs call for significant change to VA's Strategic Capital 
Investment Planning (SCIP) process by including public-private 
partnership options and blending existing replacement options to better 
leverage Federal and local resources. VA must be required to engage 
community leaders to develop broader sharing agreements, so it can plan 
infrastructure in a way that allows communities to share resources and 
VA can invest in services the community lacks. Furthermore, VA should 
be required to publicly update and report annually actuarial estimates 
for maintaining and modernizing adequate infrastructure, so that the 
real financial need for infrastructure resources is known to Congress, 
veterans and the public.
    Our framework also calls for reforming the congressional 
appropriations process to ensure VA has the resources it needs and the 
flexibility to allocate them to provide for the health care and 
services veterans need, instead of limiting the amount of care VA is 
able to provide. Finally, we call for the establishment of a 
Quadrennial Veterans Review process, similar to the Quadrennial Defense 
Review, to align VA's strategic mission with its budgets and 
operational plans, and help provide continuity of planning across all 
administrations.
 reform va's culture with workforce innovations and real accountability
    The IB framework would establish a biennial independent audit of 
VA's budgetary accounts to identify accounts and programs that are 
susceptible to waste, fraud, and abuse. The audit would also examine 
the development of the budget requests, including oversight of the 
Enrollee Health Care Projection Model, to ensure the integrity of those 
requests and the subsequent appropriations, including advance 
appropriations.
    In addition, we call for strengthening VA's Veterans Experience 
Office by combining its capabilities with the patient advocate program. 
Veterans experience officers would advocate for the needs of individual 
veterans who encounter problems obtaining VA benefits and services. 
They would also be responsible for ensuring the health care protections 
afforded under title 38, United States Code (U.S.C.), including a 
veteran's right to seek redress through clinical appeals; claims under 
section 1151 of title 38, U.S.C.; the Federal Tort Claims Act; and the 
right to free representation by accredited veteran service 
organizations are fully applied and complied with by all providers who 
participate in Veterans-Centered Integrated Health Care Networks, 
including both private and public health care entities.
    Congress, the Administration, the IBVSOs, and other key 
stakeholders in the veterans' community all have an interest in fixing 
and strengthening the veterans health care system so that it is 
properly aligned to meet the unique needs of the veterans it serves. 
Today, the VA is at a crossroads that will determine how it will carry 
out its mission to America's veterans. This is an historic opportunity 
to put VA on a path to meet the needs of veterans today and far into 
the future. The IBVSOs will continue working to ensure that our 
Nation's veterans receive high quality, accessible, comprehensive, and 
veteran-centric health care designed around their needs and 
preferences.
    Thank you for the opportunity to present this testimony to the 
Committee today. We would be pleased to answer any questions the 
Committee may have.
                               Attachment
              a framework for veterans health care reform
    In April 2014, whistleblowers from around the country brought to 
light instances of fraud and manipulation within the Department of 
Veterans Affairs (VA) that have since led to changes in executive 
leadership and a wide array of proposals to overhaul the VA health care 
system. To The Independent Budget (IB), the fact that veterans were 
waiting too long for the care they have earned and deserve was no 
surprise.
    The IB co-authors--Disabled American Veterans, Paralyzed Veterans 
of America, and Veterans of Foreign Wars--have been ringing the alarm 
on VA health care access problems for more than a decade. In 2002, the 
IB included an article on waiting times for outpatient appointments, in 
which the IB veterans service organizations (IBVSOs) urged the Veterans 
Health Administration (VHA) to ``identify and immediately correct the 
underlying problems that have contributed to intolerable clinic waiting 
times for routine and specialty care for veterans nationwide.''
    The transformative effort underway at VA, known as MyVA, and recent 
actions taken by congressional leaders, such as enactment of Public Law 
113-146, the ``Veterans Access, Choice, and Accountability Act of 
2014,'' have made progress in addressing the access issues that have 
plagued VA. While such progress in commendable, access remains the 
principle problem facing the VA health care system, and this problem 
will continue to negatively impact the health care veterans receive 
until the VA health care system is significantly reformed. 
Organizations, politicians, Members of Congress, VA officials and other 
stakeholders are advocating for specific reforms. What has been missing 
from these discussions is a plan that truly represents what veterans 
want, expect, and need their health care system to be and a 
comprehensive set of reforms to accomplish that vision.
    In order to develop a framework that puts veterans' needs and 
preferences first and understand the extent of the health care access 
problem from a veteran's perspective, the IBVSOs have sought direct 
feedback from our members and the veterans' community as a whole. Their 
responses have validated what we have long known:

    1. Veterans prefer to receive their care from VA.
    2. They turn to VA because they like the quality of care they 
receive.
    3. They believe VA health care is an earned benefit and VA is best 
suited to provide veteran-specific health care.

    When asked how they would improve the VA health care system, 
veterans suggest that VA hire more doctors and extend clinic hours to 
expand internal capacity, improve customer service, and expand overall 
access by providing convenient health care options in their local 
communities.
    The IBVSOs have leveraged historical expertise, extensive 
conversations with veterans around the country, and survey data to 
develop a veterans' health care reform framework centered on veteran 
perspectives and focused on the positives and negatives of the current 
VA health care delivery system. The IB's framework includes a 
comprehensive set of policy ideas that will make an immediate impact on 
the delivery of care, while laying out a long-term vision for a 
sustainable, high quality, and veteran-centered health care system. The 
framework would provide high-quality health care closer to home by 
seamlessly combining the capabilities of the VA health care system with 
public and private health care providers in the community when and 
where necessary.
    In order to accomplish our long-term vision, veterans' health care 
reform must address four fundamental ideas:

    1. Restructure the Veterans Health Care Delivery System
    2. Redesign the Systems and Procedures that Facilitate Access to 
Health Care
    3. Realign the Provision and Allocation of VA's Resources to 
Reflect the Mission
    4. Reform VA's Culture with Workforce Innovations and Real 
Accountability

    We hope that Congress, VA, veterans, and other key stakeholders 
will consider these ideas as the ongoing efforts to reform veterans 
health care move forward.
          restructure the veterans health care delivery system
    In the 1990s, under the leadership of Dr. Kenneth W. Kizer, the VA 
health care system underwent a dramatic transformation from a hospital 
based system to an integrated ambulatory care system. While the shift 
to a holistic approach of providing a full continuum of care has made 
VA one of the premier health care providers in the world, it has 
largely ignored one of Dr. Kizer's objectives: ``Seek opportunities for 
sharing activities with private sector entities when doing so would be 
cost effective and improve service to VA patients.'' In its plan to 
consolidate community care programs and authorities entitled ``Plan to 
Consolidate Programs of Department of Veterans Affairs to Improve 
Access to Care,'' (mandated by Public Law 114-41, the ``Surface 
Transportation and Veterans Health Care Choice Improvement Act'') VA 
reports having existing agreements or contracts with more than 200 
Federal health care facilities, 700 academic teaching affiliates, 700 
federally qualified health centers, and 76,000 locally contracted 
providers. Such contracts and agreements are generally used as safety 
valves to augment health care veterans receive from VA medical 
facilities, rather than integrating them into the health care delivery 
model.
    Traditionally, the relationship between VA and non-academically 
affiliated private sector providers has been unnecessarily adversarial. 
Many VA medical center directors have wanted their facilities to be 
everything for every veteran and have viewed the use of private sector 
providers as a threat to their ability to provide high quality care to 
the veterans they serve. In addition, the overall inadequate levels of 
funding provided to meet veterans needs has resulted in a conflict 
between fully funding VA services and properly utilizing community care 
options. As a result, VA medical facilities rarely benefited from 
leveraging the capacity of private sector medicine to improve its 
health care delivery model. Far too often, community care was 
uncoordinated, failed to guarantee sufficient access or quality, and 
was highly susceptible to improper billing of veteran patients and 
improper payments by VA. Additionally, with inadequate funding levels 
for medical services, as the IBVSOs have pointed out regularly, VA has 
been unable to expand capacity fast enough to keep up with demand for 
services, continues to rely upon outdated software and processes, and 
has suffered from inconsistent administration of community care 
throughout the system. As a result, veterans who have faced barriers 
accessing VA care are forced to wait longer for community care, placed 
on waiting lists when they should be given the opportunity to receive 
community care, or forced to forgo needed health care altogether.
    With the implementation of coordinated community care programs like 
Project Healthcare Effectiveness through Resource Optimization (HERO), 
Project Access Received Closer to Home (ARCH), Patient-Centered 
Community Care (PC3), and the Veterans Choice Program supported by 
reform efforts like Secretary McDonald's MyVA initiative, VA has made 
significant improvements to the way it purchases health care. Through 
this work, VA has expanded partnerships with private sector providers, 
identified and addressed a number of the issues highlighted above, and 
dramatically increased the use of community care. However, VA's 
consolidated plan acknowledged that VA's community care programs 
continue to lack system wide consistency and integration with the 
larger VA health care system.
    Several ideas for reforming the way VA purchases care have gained 
national attention in the past year. Many of them fail to put veterans' 
needs and preferences first and some do not properly account for second 
or third order effects that would lead to unintended consequences for 
the health and well-being of our Nation's veterans. For example, 
proposals that would require VA to compete with private sector 
providers for veterans' health care dollars perpetuates the adversarial 
relationship between VA health care and community providers. Rather 
than force veterans to choose between an overburdened and underfunded 
system (VA) and one that does not guarantee access and lacks the 
required specialized care services and cultural competencies uniquely 
defined by veterans' needs (private sector), veterans deserve a system 
that integrates the two so that VA's veterans' health care expertise 
can be complimented with the convenience of private sector providers.
    The IBVSOs acknowledge that an exclusively Federal solution is not 
feasible due to the changing nature of the veterans' population. 
Moreover, simply making VA a payer of veterans' health care erodes the 
benefits of VA's patient centered medical home model. That is why the 
IB's framework takes a logic based approach that optimizes the 
strengths and capabilities of VA and combines them with other public 
and private health care providers. Simply put, we recommend 
establishing local Veterans-Centered Integrated Health Care Networks. 
These networks would leverage the capabilities and strengths of 
existing local health care resources (including VA, other public health 
care systems, and private providers) to meet the needs of veterans in 
each uniquely different health care market. This includes increasing 
capacity to deliver urgent care at existing VA medical facilities and 
developing new capacity through private sector urgent care clinics 
around the country to create new options between emergency care and 
primary care.
    VA must be responsible for organizing these integrated health care 
networks, coordinating care, and in most cases, it would remain the 
principal provider of care for veterans. Similar to VA's proposed 
consolidation plan, the IB framework would consider network providers 
an extension of VA care, which would enable veterans to work with their 
health care providers to determine the best way to receive care. For 
rural and remote veterans who live outside network catchment areas, the 
IB framework recommends creation of a Veterans Managed Community Care 
program that would ensure all veterans have an option to receive 
veteran-centric and coordinated care when they need it and where it is 
most appropriate.
 redesign the systems and procedures that facilitate access to health 
                                  care
    Over the years, the VA health care system has relied on a number of 
methods and standards to measure access and timeliness of health care 
delivery. Prior to the scandal that enveloped the VA health care system 
in the spring of 2014, the Department's wait-time goal was 14 days from 
a veterans preferred date for existing patients or 14 days from the 
date an appointment request was created for new patients. After the 
health care access crisis exposed that the 14-day goal was 
unattainable, VA reevaluated its standard and moved to 30 days from a 
veteran's preferred date. Less than a year later, VA changed its wait-
time standard again to facilitate the implementation of the Veterans 
Choice Program. In an attempt to align its standards with industry best 
practices, VA elected to base its wait-time goal on clinical need first 
and rely on a veteran's preference when a clinically indicated date was 
not identified.
    VA has also relied upon a number of geographic based access 
standards over the years to determine accessibility. Through the 
Strategic Capital Investment Planning (SCIP) process, dating back to 
its fiscal year 2008 budget request, VA has used a 60 minute drive-time 
distance for veterans who live in urban areas and 90 minutes for 
veterans who live in rural areas as a standard for specialty care. In 
2013, VA's long range SCIP process began to include a corporate target 
of 70 percent of veterans having access to VA primary care within a 30 
minute drive time in urban areas and 60 minutes in rural areas.
    Additional geographic based standards have accompanied statutory 
programs, to include 40 miles from a primary care provider (as well as 
30 days) for the Veterans Choice Program, or 60 minute drive time from 
primary care, 120 minutes from acute care, and 240 minutes from 
tertiary care under Project ARCH. VA has also established geographic 
based network standards for contracted programs. Under Project HERO, VA 
required Humana to provide access to required services within 50 miles 
of a veteran's home. Under PC3, HealthNet and TriWest are required to 
provide health care options within a 60 minute drive for veterans who 
live in urban areas, 120 minutes for veterans who live in rural areas, 
and 240 minutes for veterans who live in highly rural areas, when 
seeking general care. For veterans who need a higher level of care, the 
PC3 network must provide them options within 120 minutes for urban 
areas, 240 minutes for rural areas, and an acceptable community 
standard for highly rural veterans.
    The independent assessment on access standards conducted by the 
Institute of Medicine (IOM) determined that industry benchmarks for 
health care access vary widely throughout the private sector. IOM was 
unable to find national standards for access and wait-times similar to 
the Veterans Choice Program's 40-mile and 30-day standards. Instead of 
focusing on set mileage or days-based calculations, IOM found that 
industry best practices focus on clinical need and the interaction 
between clinicians and their patients. The IBVSOs strongly agree with 
IOM's recommendation that ``decisions involving designing and leading 
access assessment and reform should be informed by the participation of 
patients and their families.''\1\
---------------------------------------------------------------------------
    \1\ IOM (Institute of Medicine). 2015. Transforming Health Care 
Scheduling and Access: Getting to Now. Washington, DC: The National 
Academies Press
---------------------------------------------------------------------------
    The IBVSOs have reported for years that VA's access standards are 
not aligned with veterans' perceptions. Moreover, the IB firmly 
believes that federally regulated, arbitrary access standards, such as 
living 40 miles from a VA clinic or waiting up to 30 days for an 
appointment, should not inhibit a veteran's access to care. That is why 
the IBVSOs propose to move away from federally regulated access 
standards. Under the IB's framework, access to care would be a 
clinically based decision made between a veteran and his or her doctor 
or health care professional. Once the clinical parameters are 
determined, veterans would be able to choose among the options 
developed within the network and schedule appointments that are most 
convenient to them. Veterans not satisfied with clinical determinations 
or scheduling options would be able to seek a second clinical review of 
their health care needs.
 realign the provision and allocation of va's resources to reflect its 
                                mission
    Since it was not required by Public Law 114-41, VA did not address 
the issue of capital infrastructure in its plan to consolidate its 
community care programs. However, without proper planning of its 
current infrastructure responsibilities and needs, VA will face 
significant challenges in order to effectively deliver quality, timely 
health care to our veterans.
    For more than 100 years, the government's solution to providing 
facilities to provide health care for our military veterans has been to 
build, manage and maintain a network of veterans' hospitals themselves. 
While building these facilities was a necessity, maintaining them and 
replacing them has saddled the Department with a $60 billion bill that 
will need to be paid over the next 10 years in order to properly 
address the existing access, utilization, and condition and safety gaps 
to provide veterans with access to the care they have earned and need 
in a safe and timely manner. Moving forward, VA will need to streamline 
its procurement and project delivery processes, leverage community 
resources, realign its footprint to provide appropriately sized 
facilities in more locations, and ensure VA budget requests for capital 
infrastructure projects are based on a defined plan to address 
infrastructure gaps instead of arbitrary lists of needed projects.
    Currently, VA takes too long and makes too many changes to 
construction plans leading up to and during the building phase. We only 
have to examine the problems experienced in the construction of the new 
VA medical center in Aurora (Denver), Colorado, to affirm this point. 
Changes proposed to reform construction management through the 
inclusion of the Army Corps of Engineers are a necessary reform that 
must be monitored and assessed going forward.
    In addition, VA's infrastructure problems will never be met if they 
do not find a better way to estimate and request resources through the 
budget development and appropriations process. Currently, VA's budget 
requests for construction are unrelated to the actual cost of 
maintaining their capital infrastructure, as evidenced by the funding 
gap between SCIP projections and budget requests, a fact verified by 
the Independent Assessment. In order to resolve this structural 
problem, VA must base it resource requests for infrastructure on demand 
capacity assessments and through the development of an actuarial 
estimate and schedule for maintaining that infrastructure. VA should be 
required to publicly update and report these actuarial estimates each 
year concurrent with the budget submission so that the real need for 
infrastructure resources is known to Congress, veterans and the public.
    To better align medical care and services with where veterans need 
that care, the IB's framework would require VA to reassess all 
currently proposed and future major construction projects and find ways 
to leverage community resources to identify private capital for public-
private partnerships (P3) as an alternative and more efficient manner 
to build and maintain VA health care facilities. This would enable VA 
to invest in services the community lacks, while ensuring it continues 
to provide specialty care, such as mental health and spinal cord 
injury/disease care, in state-of-the-art facilities. Future capital 
infrastructure expansion would be based on need and demand capacity 
assessments, which would incorporate the availability of local 
resources.
    The IB framework would also change VA's SCIP process to include P3 
options that would blend existing replacement options to better 
leverage Federal and local resources. It would also require VA to 
engage community leaders to develop broader sharing agreements so it 
can plan infrastructure in a way that allows communities to share 
resources, while allowing VA to invest in services the community lacks.
    The access issues plaguing VA have been exacerbated by staffing 
shortages within the VA health care system that impact VA's ability to 
provide direct care. Evaluating VA's capacity to care for veterans 
requires a comprehensive analysis of veterans' health care demand and 
utilization measured against VA's staffing, funding, and 
infrastructure. However, VA's capacity metrics are based on deflated 
utilization numbers that fail to properly account for the true demand 
on its system.
    For example, a shortage of nurses within the Spinal Cord Injury and 
Disease (SCI/D) system of care has precluded SCI/D centers from fully 
utilizing available bed space and has forced SCI/D centers to reduce 
the amount of veterans they admit. This has caused a decrease in the 
daily average census at some SCI/D centers and implies that there is a 
lack of demand on the system, when in reality veterans who want to 
access SCI/D care are turned away because those centers lack the staff 
to man available beds.
    Recognizing that VA's Veterans Equitable Resource Allocation (VERA) 
model is based on utilization, VA's inadequate staffing ratios cause a 
downstream impact on funding for capital infrastructure projects and 
the resources local VA facility leaders are given to meet demand. For 
this reason, the IB's framework recommends establishing staffing models 
based on population density thresholds, actual medical need, functional 
level and other critical factors. This model would also need to account 
for changes in the veteran population and surges in demand as VA health 
care improves and military downsizing continues. Doing so would ensure 
VA is able to measure the true capacity of and demand for services at 
its medical facilities.
    Regardless of how well VA reforms staffing and capital 
infrastructure processes, it will not be able to close access gaps if 
it does not receive the resources it needs to meet demand. In fact, the 
CMS Alliance to Modernize Healthcare emphasized in its report 
``Independent Assessment of the Health Care Delivery Systems and 
Management Processes of the Department of Veterans Affairs'' (released 
on September 1, 2015) that VA's ability to meet its promise to veterans 
is limited by the resources it receives from Congress, and that VA 
would need increases over the next five years to meet expected demand. 
The IBVSOs annually conduct a thorough analysis of VA health care 
utilization and submit detailed recommendations for full and sufficient 
funding to address current and future utilization and access gaps. 
Unfortunately, for fiscal year 2015, Congress enacted appropriations 
that were nearly $2.0 billion short of the IB's fiscal year 2015 
recommendations for VA's Medical Services accounts. Less than six 
months after passage of that bill, VA reported a $2.6 billion budget 
shortfall in its Medical Services accounts that could have forced the 
Department to limit health care to veterans if Congress was unable to 
provide additional funds. Fortunately, VA was authorized to use the 
Veterans Choice Fund to address the short fall. The IBVSOs believe that 
it is likely VA will face another budget shortfall in fiscal year 2016, 
and this pattern could continue without additional structural changes.
    The IB agrees with the Independent Assessment's finding that the 
congressional appropriations process does not provide VA the 
flexibility it requires to meet the demands on its health care system. 
With this in mind, the IBVSOs believe that the congressional 
appropriations process must be reformed to ensure VA has the resources 
it needs to provide the timely, high quality health care services 
veterans demand instead of limiting the amount of care VA is able to 
provide. While the IB was at the forefront of efforts to enact advance 
appropriations to relieve the pressures of a broken appropriations 
process on the VA health care system, we believe that consideration 
should be given to new proposals that might optimize the funding 
process. There have been a number of proposals over the years to 
address this issue ranging from adopting methods that have worked for 
other departments (a VA health care fund similar to the Department of 
Defense's overseas contingency operations fund) to technical changes to 
the existing appropriations process (authority to transfer advance 
appropriations to current year budget). The IB's framework calls on 
Congress to evaluate the merits and feasibility of these and other 
proposals to strengthen the appropriations process to ensure VA has the 
ability to provide the health care veterans need.
    To ensure VA's budget requests are accurate and properly aligned 
with the health care needs of the veterans population, the IBVSOs would 
also call for reforming VA's current planning methodology, budget 
forecasting and resource allocation systems to align them with the 
changing demographic and health care needs of the veterans population. 
The IB framework recommends the establishment of a Quadrennial Veterans 
Review (QVR) process, similar to the Quadrennial Defense Review. The 
QVR would serve as the benchmark for the Future-Year Veterans Program 
(FYVP) that can take a long view of the prospective resource needs 
based on demand for health care services within the entire integrated 
health care network. This would better align VA's strategic mission 
with its budgets and operational plans, and help provide continuity of 
planning across all administrations.
    While ensuring VA has the resources it needs to meet demand is 
vitally important, it is also critical that VA continue to serve as a 
good steward of Federal resources used to provide timely, quality care 
to veterans. To support this point, the IB's framework calls for a 
biennial independent audit of VA's budgetary accounts to identify line 
items and programs that are susceptible to waste, fraud, and abuse. The 
audit would also examine the development of the budget requests, 
including oversight of the Enrollee Health Care Projection Model, to 
ensure the integrity of those requests and the subsequent 
appropriations, including advance appropriations.
 reform va's culture with workforce innovations and real accountability
    Secretary McDonald has made improving veterans experience a main 
pillar of the MyVA transformation. To ensure VA leaders are aware of 
the issues veterans face when they obtain their earned benefits and 
health care, the MyVA task force has established the Veterans 
Experience Office, with a Chief Veterans Experience Officer who reports 
directly to the Office of the Secretary. VA plans to have veterans 
experience officers throughout the country who collect and disseminate 
best practices for improving customer service, coordinate community 
outreach efforts, and serve as subject matter experts on the benefits 
and services VA provides to veterans.
    The IBVSOs have consistently heard from veterans that their patient 
advocates are ineffective or seek to protect the medical facility's 
leadership instead of addressing their concerns. The IB believes that 
patient advocates cannot effectively meet their obligations to veterans 
if their chain of command includes VA medical facility staff that is 
responsible for the actions and policies they are required to address.
    The IB framework would strengthen the Veterans Experience Office by 
combining its capabilities with the patient advocate program. Veterans 
experience officers would advocate for the needs of individual veterans 
who encounter problems obtaining VA benefits and services. They would 
also be responsible for ensuring the health care protections afforded 
under title 38, United States Code (U.S.C.), a veteran's right to seek 
redress through clinical appeals, claims under section 1151 of title 
38, U.S.C., the Federal Tort Claims Act, and the right to free 
representation by accredited veteran service organizations are fully 
applied and complied with by all providers who participate in Veterans-
Centered Integrated Health Care Networks, both in the public and 
private sector.
    Finally, any plan to reform the culture of VA must also take into 
consideration the need to modernize VA's workforce and ensure VA 
employees serve the interest of the veterans' community. While Congress 
has focused on firing underperforming employees, the IB partners 
believe that the situation is more complicated and demands a holistic 
approach to workforce development that allows VA to recruit, train, and 
retain quality professionals capable of caring for our veterans, while 
simultaneously ensuring that VA has the authority to properly 
discipline employees whenever appropriate.
    The IB partners applaud the MyVA task force for acknowledging that 
employee experience is vital to its transformation efforts. The MyVA 
task force has developed a number of programs and initiatives to engage 
and empower VA employees. However, Federal hiring still reflects a 
mismatch between the skills desired and the compensation provided for 
many of the professionals VA recruits. If Congress is focused on 
bolstering VA's ability to fire poor-performing employees, Congress 
must also give VA the leverage to hire employees quickly and offer 
compensation commensurate with their skill level.
    By focusing solely on disciplinary proceedings and failing to 
properly cultivate a motivated and compassionate workforce, we make VA 
an unattractive employer to potential recruits. The IBVSOs believe that 
we must build a framework that makes VA an attractive employment option 
for the best and brightest who want to care for our veterans.
                               conclusion
    Congress, the Administration, the IBVSOs, and other key 
stakeholders in the veterans community have an obligation to ensure 
that the veterans' health care system is properly aligned to meet the 
unique needs of the veterans it serves. Meanwhile, the VA is at a 
crossroads that will determine how it will carry out its mission to 
America's veterans. The IBVSOs will continue working to ensure that our 
Nation's veterans receive high-quality, accessible, comprehensive, and 
veteran-centric health care designed around their needs and 
preferences.
    The IB's four-pronged health care reform framework looks beyond the 
current organization and division between VA care and community care to 
create a blended and seamless system that is best for veterans. Moving 
forward, the IBVSOs will use this framework to inform legislative 
proposals and ensure reforms of the VA health care system focus on 
veterans experience, service delivery, management, accountability, and 
budget and planning process changes needed to meet the unique and 
complex health care demands of the men and women who have served and 
sacrificed. Only through meaningful reforms can we live up to President 
Lincoln's promise `` * * * to care for him who shall have borne the 
battle, and his widow and his orphan.''

    Chairman Isakson [presiding]. Senator Blumenthal.
    Senator Blumenthal. Thank you. I appreciate your courtesy 
in allowing me to ask just a couple of brief questions first.
    Mr. Selnick, let me ask you, your recommendation is that 
the VA should finalize its Choice Program, long-term new 
Veterans Choice Program, only after the Commission on Care 
provides its findings and recommendations to the President and 
Congress and they have decided which recommendations are 
feasible and advisable. Do you have a timeframe as to when 
those recommendations will be made?
    Mr. Butler. As of right now, based on the legislation, we 
are due at the end of February.
    Senator Blumenthal. In February?
    Mr. Butler. That is, as of right now, that is when we are 
due.
    Senator Blumenthal. You would advise waiting until sometime 
this spring or later when there is feedback from the President 
and Congress before the VA finalizes its Choice Program?
    Mr. Butler. Yes. I think the VA's plan has some merits to 
it, but it has a lot of work that has to be fleshed out. It is 
not an implementation. It is a constant plan. That can be done. 
Once again, I am speaking for myself, not for the Commission or 
anything.
    Personally, I feel that can be a more collaborative 
process, and as part of that collaborative process, let us have 
a process where we have a really integrated systems approach 
where we come up with the overall comprehensive solution. The 
Choice Program is not a solution on its own. It has to be 
integrated with the rest of this health care system. Coming up 
with a program on your own that may be in conflict with other 
recommendations would just cause more confusion.
    Senator Blumenthal. Mr. Rausch.
    Mr. Rausch. Yes. I would just like to add, although we have 
differing views and opinions about the specific plan, I would 
challenge anyone to suggest that the process has not been 
collaborative, in contrast to, say, 2 years ago in working with 
the VA. I do not believe that this process would have taken 
place, and based off of a lot of the discussion between Members 
of this Committee and senior VA officials just a moment ago, it 
seems that your experiences have also changed with VA.
    I would just emphasize that it has been transparent, it has 
been collaborative, and it has been unprecedented in the 
Federal Government from our perspective. Thank you.
    Senator Blumenthal. Mr. Blake.
    Mr. Selnick. Senator, in full disclosure, I think it would 
be fair to say that the Commission on Care, we have met with 
their professional staff, and it is our understanding that they 
are hoping to extend their charge at least until next summer, 
which would mean this discussion would presumably be put off 
until June, July, or August of next summer at the earliest.
    I think that would be an unfortunate occurrence for the VA, 
because as most of us here have testified, this plan that the 
VA has put forward is a good idea. It is a very good concept 
for how health care should be delivered. If we just put it off 
for another potentially 12 months, where will we be now, and 
will that really solve the problems that we are trying to 
address?
    Senator Blumenthal. I share the concern about timing. I 
understand Mr. Selnick's point about collaboration, but I am 
heartened and encouraged by the feeling that I think is 
generally shared among this panel that the process has been 
collaborative, and to that end, I am going to invite, in fact, 
request that the VA react to some of the excellent ideas that 
have been suggested by this panel, if they have not done so.
    I would ask that the VA, who are still present--let the 
record show that all of the witnesses on the prior panel are 
still here and can hear me make this request--I would ask that 
they react to these proposals because these ideas are very 
promising and important, and I think collaboration is the key 
word here.
    The VSOs have been extraordinarily and profoundly important 
in this process and I want to thank all of you gentlemen and 
lady for the excellent ideas that you have offered today and 
throughout this process, those who are represented here and 
others who are not on this panel.
    Thank you very much and I will look forward to additional 
collaboration. I think that is the operative word.
    Thank you.
    Chairman Isakson. Senator Moran.
    Senator Moran. Mr. Chairman, thank you very much.
    I think it was Mr. Rausch who had statistics about 
experiences with the Choice Program, access to care in 
communities, but let me ask all of you, you are all involved in 
helping your members, helping veterans access care. What has 
been the experience with the Choice Act for each of your 
organizations' members?
    Mr. Butler. I would say for The American Legion, we have 
had experiences where veterans have had positive experiences as 
well as not so positive experiences. It all depends upon the 
type of relationship the VA has within the community and with 
the HealthNet and TriWest.
    We are still getting calls where, even from veterans where 
their claims have been turned over to collection because they 
are not being processed and paid in a timely manner. When we 
get those type of issues and concerns and we turn them over to 
our VSO liaison in central office and after they check into 
that, then we get an affirmative answer as to what was the 
background and an easy solution to fix it. The question then 
becomes, why did we get to that point? How come it was not 
appropriately addressed in the beginning?
    Senator Moran. Thank you.
    Mr. Selnick. For our members it has been mostly a 
nightmare. The number 1 thing that they say, literally, is--the 
few that have been able to get Choice is because they have had 
a Congressman or Senator interfere on their behalf--the common 
thing they say is, why does it take a Senator or Congressman to 
get some help? The whole process for our members--you can go 
online to see the Facebook posts--has just been a continual 
struggle, a battle.
    One of the number 1 questions that we get is, if I am 
within 20 miles of a VA hospital but the heart surgeon I need 
is 100 miles, why am I denied the Choice Program? Why can I not 
get the service within 40 miles of where I live? Why does 
TRICARE offer a simple system of specialty and primary care and 
metrics and the VA has this convoluted process?
    Senator Moran. Thank you.
    Mr. Rausch. Thank you, Senator. Just to repeat those 
numbers, currently, from our most recent survey: 43 percent of 
our respondents stated the main reason for not using it was 
confusion; and 28 percent said they had a negative experience. 
What we have seen from our polling data--a lot of it are flash 
polls, social media--we have seen it increase, albeit generally 
it has still been a negative experience. But, it has increased 
exponentially.
    You mentioned Kansas, and I spent some time in Fort 
Leavenworth because I was assigned there--by choice--and, so, I 
know Kansas fairly well, and I was looking at a map recently 
that TriWest had showed me today, or last month, excuse me, 
versus a year ago. The providers in the network that they have 
built in Kansas specifically has been tremendous. What we have 
seen is not a linear increase, but an exponential increase in 
number of providers, veterans who understand it better, the VA, 
who, frankly, were probably the worst performing initially in 
understanding how to coordinate that care. They even improved 
significantly.
    Although it has been a challenge, we have seen it start to 
sort of steadily uptick, which is why we also mentioned in our 
testimony that there are some really positive things and 
lessons learned from Choice, with some negative things we have 
learned.
    On the broader concept of Choice, as was mentioned earlier 
about the different plans that have been floated, one of the 
reasons we support this framework and reject some of the one-
off plans because there are certain plans that want to take, as 
someone mentioned earlier, primary care out of the VA. As 
someone who actually had my primary care health appointment 
this morning at the VA, and I have choice because I have 
private health care, as well, that would be removing choice for 
me.
    There are certain plans out there that actually do not 
reduce but completely eliminate Choice by pulling some of those 
resources out of VA, which is, again, why we think this 
collaborative approach that has been taken is a great and clear 
path forward.
    Senator Moran. Thank you very much. I appreciate your 
patience in waiting for the opportunity to testify and be here 
to answer questions, which gives me the opportunity to also 
tell the VA how appreciative I am of their patience in staying 
to listen to the testimony.
    Mr. Chairman, thank you.
    Chairman Isakson. And I apologize for having to go to the 
floor and make a brief speech, so I missed almost all of your 
testimony, which I apologize for, but I read through the 
testimony last night. I have a couple of quick questions, and I 
know it has been a long time, but I thank you for staying and I 
thank the VA representatives for staying and listening, as 
well.
    Mr. Selnick, you heard the exchange with Senator Moran, 
myself, and the VA about the problems in Liberal, Kansas, and 
the Choice accessibility and the ease or difficulty of that 
program. You made a comment a minute ago that you were not sure 
that those providing services at the local level and VA at the 
Washington level understood how the program is really working 
or something like that, is that right? Did I hear you right?
    Mr. Selnick. Well, I mentioned a number of different 
challenges with the program, its staff, its process, and its 
call center. The whole thing has been a problem.
    Chairman Isakson. I think you are right, and I do not blame 
anybody for this, but I think there is a misunderstanding up 
and down the chain of command in terms of what the intent of 
Choice was and what some of the changes we have made. I hope as 
we implement these two changes you all rolled out yesterday, 
you will make sure the people at the local level, the CBOCs, 
the hospitals, and medical facilities understand what that 
really means in terms of the veterans access, because those are 
two remarkable changes that will make Choice better for every 
single veteran tomorrow. But if they do not experience it at 
the local CBOC, it is not going to be any good to them at all.
    Mr. Butler, I have two questions for you. One, I want to 
read this sentence to you. VA needs to provide all non-VA 
providers with full access to VA's computerized patient records 
system to ensure that the community health care providers can 
review the patient's full medical history and continuity of 
care purposes.
    Earlier in your testimony, you referred to the lack of 
coordination between the non-VA providers and the VA in terms 
of getting the documentation of services provided so the 
veteran's health care file is complete, is that right?
    Mr. Butler. Correct.
    Chairman Isakson. I agree with you that no system is going 
to work if you do not have the medical history of the patient 
and the services they received in one place, easily accessible. 
Do you think they are capable of doing that?
    Mr. Butler. The VA has been working on an electronic health 
record for years now with very little success. Their plan calls 
for taking the snapshot, the VLJ process, I believe, which is a 
virtual snapshot of the veteran's record and incorporating that 
initially as part of the health record and then moving on with 
a future design of a more coordinated health record.
    I think that for any process to work, you are going to have 
to allow a virtual electronic health record, and that is the 
whole health care industry is struggling with. But you are 
going to have to develop a virtual electronic health record 
that is transportable and sharable between any health care 
institution. Until we get to that point, you are going to still 
see the challenges of sharing electronic health information 
either way, between the VA versus non-VA provider and vice-
versa between the non-VA provider and VA.
    Chairman Isakson. You just hit the nail on the head, 
because the biggest problem--forget about VA health care for a 
second. The biggest problem for health care in America has 
today is the lack of interoperability between data systems. You 
have Greenway, you have Cerner, you have got Epic. You have 
these systems that do not talk to each other. It is great to 
talk about having the information, but if you cannot get them 
interoperative and talking to each other, you cannot have an 
ease of file sharing.
    Deputy Gibson, if you want to jump in here, say something.
    If we are going to make this thing work, and if it is going 
to work the way you suggested you would be supportive of it 
working in your conclusion, the first hurdle they are going to 
have to overcome is how do we make the systems interoperable 
between the non-VA providers we use and the VA system to get 
the information on the veteran in one place, at one time, 
accessible by the physician and the veteran, as well. Right, 
Deputy Gibson?
    Mr. Gibson. That is correct, sir.
    Chairman Isakson. Our new technology leader, Ms. Council, 
has she figured out how to do that yet?
    Mr. Gibson. That is a big part of what the portal is all 
about, but a big part of that is what [inaudible]. Some of what 
is being described is actually available.
    Chairman Isakson. I think that observation that you made, 
Mr. Butler, in your testimony is key to maybe this thing really 
functioning and doing well. I appreciate you bringing that 
point out.
    I appreciate all of you being here to testify today. I 
appreciate everybody who stayed for the duration of the 
hearing. I think it was very effective. We look forward to 
working with the VA and all of the vested parties to see to it 
that as we roll this plan out and implement it, it works for 
the person we are here to serve, and that is the veterans of 
the United States military.
    With that said, we stand adjourned.
    [Whereupon, at 5:06 p.m., the Committee was adjourned.]
Response to Posthearing Questions Submitted by Hon. Johnny Isakson for 
 Hon. Steve Daines to Darin Selnick, Senior Veterans Affairs Advisor, 
                     Concerned Veterans for America
    Question 1.  The original for fee-service law, 38 U.S.C. 1703, 
provided the Department of Veterans Affairs (VA) the authority to 
reimburse care provided at non-VA facilities if the VA facility did not 
have the capacity to administer care. What issues or deficiencies did 
this underlying policy have?
    Response. The issues and deficiencies to the policy relates to how 
VHA implements 38 U.S.C. 1703, using VHA Handbook 1601. The first 
problem with this policy is that it is not veteran or patient centered. 
VHA runs as a HMO staff model, which tightly controls all aspects of 
the veterans' health care. The law and the VHA policy that goes with it 
makes it very complex on which veterans are eligible and on what 
hospital and/or outpatient private care they can use and get 
reimbursed. Official VA policy states ``It is VHA policy that admission 
of any Veteran to a private or public hospital at VA expense will only 
be authorized when VA health care facilities are not feasibly 
available'' [my emphasis]. This is a tough standard to meet or prove 
and the VA provides no objective criteria to go by. Below is a list of 
some specific issues relating to the implementation of 38 U.S.C. 1730:

     Only VA gets to decide the standard for reimbursed care: 
``When Department facilities are not capable of furnishing economical 
hospital care or medical services because of geographical 
inaccessibility or are not capable of furnishing the care or services 
required.'' As a practical matter, that is very tightly controlled and 
used as infrequently as possible. So the end result is that there is a 
lot of denied outside care which results in long wait times and/or 
travel for the veteran.
     There is a lack of clear standards for what, exactly 
defines ``not feasibly available.'' This is an unpredictable judgment 
call which VA makes in a very opaque manner.
     There is a lack of a clear appeals process for the veteran 
if the veteran disagrees with VA decision.
     This lack of clarity has resulted in instances of VA staff 
telling veterans they should use outside private sector care, but the 
veteran is subsequently denied reimbursement because the veteran did 
not follow the procedures, which were not explained to them. This has 
been especially true for emergency care.
     Lack of a proper VA referral and authorization process 
results in confusion over which veterans are eligible for hospital and 
outpatient care.
     VA is slow in paying reimbursements to both providers and 
veterans for their medical claims. However, VA has been quick to bill 
the veteran for health care services that the veteran thought they were 
covered for, for example emergency ambulance transportation.

    Conclusion: VA uses 38 U.S.C. 1703 as little as possible and 
standards for use--including authorization and referrals--are vague and 
arbitrary. The veteran has no say, recourse, or appeal, other than to 
complain to their Senator or Representative. Improper use of 38 U.S.C. 
1703 has resulted in an undue burden on veteran patients and has a 
negative impact on their overall health care.

    Question 2.  Over time, several additional programs, including the 
Choice Program, provided specific triggers that mandated the VA 
reimburse for care at non-VA facilities. In what situations does Choice 
provide unique value in increasing timely access to non-VA care in ways 
previous programs were unable?
    Response. Private sector health care does not have the sort of 
triggers for eligibility used by the Choice Program--and the other VA 
purchase care programs--because these kind of triggers do not provide 
good health care for the patient. Such triggers are not needed with 
private sector health care, as in the private sector the patient always 
has the choice to change providers--for any reason whatsoever.
    Unfortunately, the Choice Program has proven to be of very little 
unique value. The wait time and distance eligibility requirements might 
have provided value had they been implemented properly. Instead, VA 
made rules causing it to be very difficult to obtain approval for 
participation in the Choice Program, all while retaining very strict 
control over the approval process--the veteran has very little choice 
at all.
    The final wait time rule implemented by VA, as described to 
inquiring veterans, reads thus: ``You are told by your local VA medical 
facility that you will need to wait more than 30 days for an 
appointment from the date clinically determined by your physician, or, 
if not such date is provided, our preferred date.'' The phrase 
``clinically determined by your physician'' can be used--and is used--
by the VA to ensure the veteran rarely reaches the 30 day threshold.
    Regarding distance the VA rule states: ``Your residence is more 
than 40 miles driving distance from the closest VA medical facility.'' 
Even with recent changes aimed at ensuring that every VA medical 
facility has a PCP, there are still hurdles to veterans wishing to use 
the Choice Program, as 60% of all VA appointments are for specialists. 
There would be value if the distance was 40 miles driving distance from 
the closest VA medical facility that provides the needed health care 
service for the veteran.

    Question 3.  How can Congress strengthen Choice to better achieve 
the purposes of the law?
    Response. In order to strengthen the Choice Program, Congress has a 
few options.

    a. Option 1. Redo the wait time and distance provisions of the 
Choice program to meet the original intention and known needs of 
veterans.
     Wait times: You are told by your local VA medical facility 
that you will need to wait more than 30 days for an appointment from 
the date that you schedule it.
     Distance: 40 miles driving distance from the closest VA 
medical facility that provides the needed health care service.

    b. Option 2. Redo the Choice program so that it follows the proven 
TRICARE Prime access standards for wait and distance. For example:

     Routine Care: Beneficiaries must be offered an appointment 
to visit an appropriately trained provider within 7 calendar days and 
within 30 minutes travel time of the beneficiary's residence.
     Referrals for Specialty Care Services: Beneficiaries must 
be offered an appointment with an appropriately trained provider within 
4 weeks (28 calendar days) or sooner, if required, and within 1-hour 
travel time from the beneficiary's residence.

    c. Option 3. Redo the Choice program by restructuring it using the 
Patient-Centered Community Care (PC3) to run it like TRICARE Prime. If 
the Choice program implemented PC3 correctly with the same rules, 
procedures and access standards as TRICARE Prime, you would have a much 
better program for veterans with a much easier and consistent process 
of authorization and referrals for the veteran. The VA IG has cited in 
its report on PC3 that if implemented properly (which would mean it is 
mandatory for the VA Medical Center to use it) veterans would have 
better choice with reduced costs for VA.
      

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