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24–363 2017

CHOICE CONSOLIDATION: ASSESSING VA’S PLAN 

TO IMPROVE CARE IN THE COMMUNITY 

HEARING 

BEFORE THE

COMMITTEE ON VETERANS’ AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

WEDNESDAY, NOVEMBER 18, 2015 

Serial No. 114–45 

Printed for the use of the Committee on Veterans’ Affairs 

( 

Available via the World Wide Web: http://www.fdsys.gov 

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(II) 

COMMITTEE ON VETERANS’ AFFAIRS 

JEFF MILLER, Florida, Chairman 

DOUG LAMBORN, Colorado 

GUS M. BILIRAKIS, Florida, Vice-Chairman 

DAVID P. ROE, Tennessee 

DAN BENISHEK, Michigan 

TIM HUELSKAMP, Kansas 

MIKE COFFMAN, Colorado 

BRAD R. WENSTRUP, Ohio 

JACKIE WALORSKI, Indiana 

RALPH ABRAHAM, Louisiana 

LEE ZELDIN, New York 

RYAN COSTELLO, Pennsylvania 

AMATA COLEMAN RADEWAGEN, American 

Samoa 

MIKE BOST, Illinois 

CORRINE BROWN, Florida, Ranking 

Minority Member 

MARK TAKANO, California 

JULIA BROWNLEY, California 

DINA TITUS, Nevada 

RAUL RUIZ, California 

ANN M. KUSTER, New Hampshire 

BETO O’ROURKE, Texas 

KATHLEEN RICE, New York 

TIMOTHY J. WALZ, Minnesota 

JERRY MCNERNEY, California 

JON TOWERS, Staff Director 

DON PHILLIPS, Democratic Staff Director 

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Veterans’ Affairs are also published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to 

prepare both printed and electronic versions of the hearing record, the process of converting 

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process 

is further refined. 

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(III) 

C O N T E N T S 

Wednesday, November 18, 2015 

Page 

Choice Consolidation: Assessing VA’s Plan To Improve Care In The Community ........................................................................................................................ 1 

OPENING STATEMENTS 

Jeff Miller, Chairman .............................................................................................. 1 

Prepared Statement ......................................................................................... 38 

Mark Takano, Acting Ranking Member ................................................................ 2 

WITNESS 

Honorable Sloan Gibson, Deputy Secretary, U.S. Department of Veterans 

Affairs .................................................................................................................... 3 

Prepared Statement ......................................................................................... 39 

Accompanied by: 

Honorable David J. Shulkin M.D., Under Secretary For Health, U.S. 

Department of Veterans Affairs 

Baligh Yehia M.D., Assistant Deputy Under Secretary For Health For 

Community Care, Veterans Health Administration, U.S. Department 

of Veterans Affairs 

Joe Dalpiaz, Network Director, Heart Of Texas Health Care Network 

(Visn 17), Veterans Health Administration, U.S. Department of Veterans Affairs 

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Leonard.horne on VACREP0180 with DISTILLER

(1) 

CHOICE CONSOLIDATION: ASSESSING VA’S 

PLAN TO IMPROVE CARE IN THE COMMUNITY 

Wednesday, November 18, 2015 

COMMITTEE ON VETERANS’ AFFAIRS, U. S. HOUSE OF REPRESENTATIVES, Washington, D.C. 

The Committee met, pursuant to notice, at 10:30 a.m., in Room 

334, Cannon House Office Building, Hon. Jeff Miller [Chairman of 

the Committee] presiding. 

Present: Representatives Miller, Lamborn, Roe, Benishek, 

Huelskamp, Coffman, Wenstrup, Walorski, Abraham, Costello, 

Bost, Brown, Takano, Brownley, Titus, Ruiz, Kuster, O’Rourke, 

Walz, and McNerney. 

OPENING STATEMENT OF CHAIRMAN MILLER 

The CHAIRMAN. The Committee will come to order. And I appreciate everybody joining us for today’s oversight hearing entitled 

‘‘Choice Consolidation: Assessing VA’s Plan To Improve Care in the 

Community. In late July, we authorized the Department of Veterans Affairs to use a substantial portion of the Choice Program 

funds to cover a budget shortfall. And, in turn, VA was required 

to submit a plan to the Committee detailing how they were going 

to consolidate and improve the many fractured programs and authorities that the Department currently uses to refer veterans to 

non-VA providers. 

So we are here this morning so that VA can present this plan 

to the Committee, and together, we can measure its merits and 

challenges. Non-VA care, or care in the community, as VA now 

calls it, is an increasingly vital component of the health care system of the Department of Veterans’ Affairs. Each month, veterans, 

survivors, and certain dependents of veterans receive approximately 1 million appointments, more than 21 percent of all of the 

appointments that VA provides from doctors and nurses and other 

health care professionals in community hospitals and clinics outside of the walls of the Department of Veterans Affairs. Allowing 

veterans to see these providers is vital to ensuring timely and convenient access to care. 

And I suspect that as the veteran population continues to grow 

in both age and in numbers, and as the health care landscape continues to shift, the need for non-VA providers to supplement—and 

note I said supplement, not supplant—the care that VA provides 

in-house will only continue to grow. I think the success of VA’s 

Care in the Community Program is hampered by inconsistent and 

competing eligibility requirements, business processes, and reimLeonard.horne on VACREP0180 with DISTILLER

2 

bursement rates across the seven methods that they currently use 

to refer veterans to outside providers. And as a result, non-VA 

care, as we know it today, has become unmanageable and 

unsustainable. 

The success of the VA health care system over the next several 

years will depend, in large part, on VA’s ability to consolidate these 

seven desperate methods to a single coordinated program that is 

easy for veterans and community providers to understand and buy 

into and easy for employees to administer and to manage. And certainly, this is no easy task. It is going to require us to have some 

difficult conversations about the purpose of the VA health care system and what it should and feasibly can achieve. It is also going 

to require us to examine VA’s massive physical footprint, and make 

decisions about the future of the facilities that once served great 

purposes, but may no longer be benefiting the veterans as they 

should be. 

The plan that the Department submitted in late October to accomplish non-VA care consolidation and take the first steps towards building the VA health care system of tomorrow offers a 

promising, but really kind of a fuzzy definition or vision of the future. And so hopefully, we will be able to dialogue with the VA and 

bring things into a little more clearer perspective so that we can 

figure out where VA needs to go next. 

I am hopeful that the testimony and the responses to our questions that we will hear this morning will shed some much-needed 

light on how VA intends to transform the collection of non-VA programs and authorities that we have today in the coordinated system of care that our veterans have earned. I am grateful to the 

Deputy Secretary, The Under Secretary for Health, and the two 

leaders of VA’s consolidation efforts for being here this morning to 

present the Department’s proposal. I now recognize the Acting 

Ranking Member this morning, Mr. Takano, for an opening statement. 

[THE PREPARED STATEMENT OF CHAIRMAN MILLER APPEARS IN THE

APPENDIX]

OPENING STATEMENT OF MARK TAKANO 

Mr. TAKANO. Thank you, Mr. Chairman, for calling this hearing 

today. Access to safe, quality health care is a priority for this Committee, and one that veterans who have served expect. We owe 

them no less. Today, we are going to hear from the VA about their 

plan to improve access to care. Congress mandated this plan in 

Public Law 114-41, the Surface Transportation and Veterans 

Health Care Choice Improvement Act of 2015. About 2 weeks ago, 

along with the other three corners, the Ranking Member received 

a strategic-level briefing from VA on this plan. After listening to 

what VA had to say, she is generally in agreement with how VA 

is moving forward. During this briefing, VA told her that without 

Congressional support, they could not accomplish all of the tasks 

set forth in the plan. 

Today, I am fully prepared to be in a listening mode. I do, however, have some concerns with the price tag that this plan comes 

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3 

with, and the ability of the VA to implement this plan throughout 

the agency. 

As we all know, VA does not have a great track record when it 

comes to implementation. The policies are in place, but VA has had 

difficulty in the past with compliance as many reports have revealed. VA has told us that the implementation of this plan will 

be a multi-year process, and will require an additional investment 

of money. I hope today, or in the very near future, we get to hear 

about the cost. Another concern is this plan seems to be relying, 

in part, on an IT structure that actually works. Congress has been 

very generous to the VA in the past, investing millions of dollars 

in IT solutions that don’t seem to do what they are supposed to do. 

I do not want to see a repeat of these failures. 

Mr. Chairman, while I recognize that VA cannot do it all by 

themselves, especially in rural communities, I want to reemphasize 

that privatizing the VA is not an option. I do believe that VA, with 

this plan, is headed in the right direction for providing more and 

better access to our veterans. I believe that we as a Committee 

need to listen today, and if what we hear makes sense, then hold 

them to this course that they have set out to follow to ensure that 

the veterans of today and of the future are assured quality, safe 

health care, wherever they choose to live. Thank you, Mr. Chairman, again, for holding these hearings. And I yield back the balance of my time. 

The CHAIRMAN. Thank you very much, Mr. Takano. Members, we 

are joined this morning by the Deputy Secretary, the Honorable 

Sloan Gibson. With him today is the Honorable Dr. David Shulkin, 

Under Secretary for Health; Dr. Baligh Yehia, who is the Assistant 

Deputy Under Secretary for Health and Community Care; and Mr. 

Joe Dalpiaz, VISN 17 network director. Thank you. It was great to 

visit with you guys the other morning when we had breakfast. 

Thank you very much for what you do. And Sloan, you are recognized for your opening statement. 

STATEMENT OF SLOAN GIBSON 

Mr. GIBSON. Thank you, Mr. Chairman. As you noted, David, I 

would further elaborate, has been with VA now for about 4 months. 

He comes to us from a career in the private sector, managing large 

health care organization. Baligh has been with us for about 18 

months, extensive years of clinical experience, and continues to see 

patients in the VA system. And Joe has been with VA for over 30 

years, much of it as a medical center director. And he has spent 

the last number of months as a co-lead working with Baligh on this 

report. 

Mr. Chairman, at the Committee’s May 13 Choice Program hearing, I discussed our need to consolidate our community care programs. I was gratified to hear you say, and I quote, ‘‘We must all 

prepare for the Choice Program of tomorrow, one that brings the 

universe of non-VA care together under one umbrella, so that the 

care of our veterans that they need to receive is more efficient and 

effective regardless of where it takes place,’’ a statement that is 

echoed, again, in your opening remarks today. 

We are determined to seize this opportunity and make the most 

of it. And we are grateful to the Committee for responding so posiLeonard.horne on VACREP0180 with DISTILLER

4 

tively to our indicated need for consolidation. VA is already in the 

midst of an enterprise-wide transformation called MyVA, which 

will modernize VA’s culture, processes, and capabilities. Our proposal to consolidate community care is definitely a part of that 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 that is only available in the 

community, and when increasing demand for VA care exceeds existing capacity as we have seen in recent years. 

We are referring veterans to community care more than ever before. But as you noted in your opening statement, Mr. Chairman, 

we are saddled with a confusing array of programs, authorities, 

and mechanisms that greatly complicate the task of ensuring veterans getting the care that they need when and how they need it. 

Those include Project Arch, PC3, Choice, two different plans for 

emergency care, affiliates with other Federal agencies and academic partners, and then numerous individual authorities. Each of 

these has its own requirements, different eligibility rules, reimbursement rates, different methods of payment, and different funding routes. 

It is all too complicated for veterans, for providers in the communities, and for VA staff. 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 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, veteran service organizations, VA employees, Federal stakeholders, and best practices in the private sector. 

We also appreciate the many discussions that we have had with 

the Committee staff. The report focuses on five functional areas: 

Veteran eligibility, a single set of eligibility criteria based on distance from a VA provider, wait time for VA care, and 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 networks. 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 is a critical item, making 

health information easier to exchange and helping veterans make 

the best choices among community care providers. And, lastly, 

prompt provider payment. Improving billing claims and reimbursement processes to allow auto adjudication of most claims and faster, more accurate payments. These efforts won’t just improve the 

way we do community care, they will make community care a part 

of the fabric of VA care, making VA a truly integrated health care 

system. Getting there will take time. 

But even as we work towards the longer-term solution, we are 

working to improve the veteran’s experience of care in the near 

term. We have already expanded the provider base by including 

providers participating in Medicaid. We have eliminated enrollLeonard.horne on VACREP0180 with DISTILLER

5 

ment date and the combat eligibility indicators as factors limiting 

choice eligibility. We have defined additional services as qualifying 

for exceptions to the 40-mile rule, and we have added urgent consult scheduling to get veterans seen in 2 business days when it is 

necessary. 

In the coming months, we expect to accomplish a number of 

other close-in objectives: A 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; and 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. The 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 and resources to 

implement and execute the consolidation program. 

I know that costs are an issue. But the critical cost right now, 

I believe, for our focus, is the $421 million we expect to spend on 

systems redesign and business solutions in fiscal year 2016. Other 

costs will come later as we tackle other aspects of consolidation, 

such as expanding emergency and urgent care. But our initial investment and one-time improvement to systems and solutions will 

enable us to exercise more control over the veteran’s community 

care experience. 

We detailed our specific legislative proposals in the report. We 

have briefed their structure to your personal staffs. And we are 

happy to work with any Member on these issues. Thank you for the 

support that 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 SLOAN GIBSON APPEARS IN THE

APPENDIX]

The CHAIRMAN. Thank you very much. You talked about needing 

legislation to be able to do some of the things you need to do. What 

things can you do without legislation? And talk to me about the 

things you have already done. 

Mr. GIBSON. I would like to ask Dr. Yehia to respond. 

Dr. YEHIA. Sure. Thank you very much. That is a great question. 

There are definitely some things that would require some legislative approval. But we are moving out today to do things that are 

within VA’s control. And we call these quick hits. These are things 

that we hope to get accomplished in the next couple months. And 

these include things such as streamlining the referral and authorization process. Right now, it is very complicated to send someone 

out into care in the community. There is a number of steps that 

our employees have to go through and veterans have to go through. 

Those are some things that we can lean up and make it better. 

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6 

We want to really build on our core network, which is described 

in the plan by standardizing sharing agreements with our DoD 

partners and our academic affiliates. Right now, every single individual VA medical center and their partner has a different agreement. We want to move towards a standard template that can actually start to tackle quality and specific issues. We want to leverage some of the MyVA work that is going on as it relates to customer service and start embedding that into community care. And 

as the Deputy alluded to, we want to carry out some critical makebuy decisions to determine if we need to purchase specific programs 

or solutions, or we need to outsource them to the private sector. 

And then during this time, also we want to create, really the implementation plan, where you create a timeline of the next steps and 

milestones that we would have to meet to accomplish the plan. So 

those are some of the things that we hope to do in the near term. 

The CHAIRMAN. Sloan, can you talk about, under the new Veterans Choice Program, whether or not you will use a third-party 

administrator to manage the non-VA care networks? Or are you 

wanting to bring that in-house? 

Mr. GIBSON. As Baligh alluded to, there are a series of functions 

that have to be performed, creating the provider network, managing the claims process, including claims payment, some of the 

customer service dimensions like scheduling. So there are a whole 

series of functions. And what we are committed to do is in each one 

of those cases, to make a very deliberate make-versus-buy decision, 

the only two criteria being what is best for veterans and what allows us to be the best steward we can of taxpayer resources. And 

I would tell you, the one you have just noted is one of those where 

we will make that make-versus-buy decision and do what we believe is right for veterans and right for taxpayers. 

The CHAIRMAN. Because the two people that are already working 

within the program have already set up networks. And I am just 

trying to figure out is it a duplication to go back and bring more 

folks in-house? I am glad to hear that you are going to look at that 

very closely. 

Let me also ask you about the change to the 40-mile issue. In 

the request or the report, you talk about changing the 40-mile from 

a primary care provider. Why not allow veterans—I mean, because 

if somebody needs cardiac care or some other type of specialty care 

and there is not a provider within 40 miles, they are being hampered from getting care closer to home. And that is, I think, the 

focus that we are all trying to make, is to allow the veteran to get 

the care closer to where they live. 

Dr. SHULKIN. Mr. Chairman, certainly we understand that point. 

And I do think that you are correct, that providing services closer 

to where veterans reside and making it more convenient is what 

we want to do. That really will end up being a choice that we are 

going to come back and need your help with, because that would 

require significant new resources to be able to fund that type of access delivery. So if that is something that we were provided the resources with, we would absolutely work to provide that type of 

service. 

Mr. GIBSON. I would also add, if I may, that the authority you 

have recently given us to expand the aperture of undue burden 

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really gives us some flexibility today, the authority today to make 

some of those decisions at the margin where, for example, cardiac 

care, where a veteran ought not to be traveling 100 or 150 miles 

for care. We can get that care in the community under Choice now. 

The CHAIRMAN. I think it is interesting that every time we talk 

about changing or improving our program, especially when you 

have two dual programs that are running side by side, the VA and 

the non-VA care, you are always adding additional money and not 

taking any savings over on the VA side. I know how CBO scores. 

But we need to be looking at savings. In the next round of questions, I do want to talk a little bit about that issue. 

But the one last question I have for you, Sloan, is why is there 

such a discrepancy with the access-to-care numbers, the wait time 

that we currently see in the community when we talk with our veterans and those that VA is reporting out? 

Mr. GIBSON. I think what you hear—I will tell you, I think VA 

is delivering great timely access to care hundreds of thousands of 

times every single day. Where we fall down is in that 5 or 10 percent at the margin that aren’t receiving timely access to care. I 

have noted that over the last year and a half or so, the number of 

veterans waiting over 30 days has gone from about 300,000 now to 

about 550,000, because we have got more veterans coming to us for 

more care. And those are the veterans that are going to be the 

most vocal. 

Having said all of that, we complete appointments, mental health 

in about 3 days, primary care in about 4 days, and specialty care 

in about 6 days. That is the average. So we are providing a lot of 

timely access to good care. It is just we are not able to do that consistently in every single instance. 

The CHAIRMAN. So you are testifying to this Committee that if 

a veteran calls and needs primary care, that that veteran will get 

it within 4 days? 

Mr. GIBSON. I am telling you what the data tells us is that completed appointments for primary care, on average, are about 4 

days. I have no doubt, I know that there are instances out there 

where veterans have been waiting a month or 2 months or 3 

months to get primary care. I know that. And that is the 5 or 10 

percent that I am referring to that we have got to be able to address. But the challenge we run into is as we improve access to 

care, more veterans come to us for care. 

We completed 7 million more appointments over that 1-year period of time after May or June last year, which should have been 

more than enough to absorb that 300,000 we couldn’t see timely. 

What happened in the meantime is more veterans came to us. 

The CHAIRMAN. Do you count emergency room visits as an appointment? 

Mr. GIBSON. Emergency room visits are not counted in those totals. They are not. 

The CHAIRMAN. That is not what our staff was briefed. Wait. 

Wait. We are going to have a—this is what our staff was briefed 

on, and if I am incorrect, let me know, that 20 percent of the appointments are emergency room visits. 

Mr. GIBSON. No. 

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The CHAIRMAN. And we are being told, what staff was being 

told— 

Mr. GIBSON. No. David? 

Dr. SHULKIN. Twenty percent of our visits are same-day access, 

which means not the emergency room, but they walk in to primary 

care, into their physician appointments, or walk-in appointments. 

Urgent care can also be considered a same-day access issue. 

The CHAIRMAN. Okay. That is emergency care. 

Mr. GIBSON. Not emergency room. 

The CHAIRMAN. I am sorry, Sloan, do what? Sloan is answering 

and I can’t tell you what you just said. 

Mr. GIBSON. Urgent care would count, but not emergency room 

care. 

The CHAIRMAN. Not emergency room care. 

Mr. GIBSON. Correct. 

The CHAIRMAN. That is not, again, that is not what staff was 

briefed. We will go back and we will double-check. 

Mr. GIBSON. Good. And we will do the same. 

The CHAIRMAN. If you set a veteran’s appointment at 21 days, 

and you hit that appointment at 21 days, does that appointment 

count as a wait of 21 days or zero? 

Mr. GIBSON. It depends on when the clinically indicated date was 

or when the date the veteran wanted to be seen. If the veteran said 

I want to be seen in 21 days, then there is zero wait time. If the 

clinically indicated date, the doctor says I want to see you back in 

3 weeks and we schedule it in 21 days, there is no wait time. 

The CHAIRMAN. So you are saying that if a veteran calls and says 

I want to be seen today, and you say I can’t see you today, but I 

can see you in 3 weeks— 

Mr. GIBSON. Then that is 21 days wait time. 

The CHAIRMAN [continued]. Okay. That is the way it is counted. 

Okay. 

Mr. GIBSON. Yes. Absolutely. 

The CHAIRMAN. Mr. Takano. 

Mr. TAKANO. Thank you, Mr. Chairman. One of my main concerns is how we streamline and improve the flow of information between the VA and community providers, whether that is sharing 

the medical records or improving the billing process. I see that in 

phase 2 of the plan, the VA expects to enable medical record sharing between VA and community providers. Can you go into more 

detail about what that will look like? Am I correct to assume that 

this will be electronic sharing and not just a sharing of paper 

records? 

Dr. SHULKIN. Congressman, yes. That would be correct. Today, 

VA gets most of its record through paper. And what this plan is 

saying is that that no longer would be our intent in the future. We 

would develop a health information exchange. In almost all the 

communities that all of you represent, you have active health information exchanges. VA participates in many of those. But this plan 

would say we would develop a health information exchange specifically to have electronic information come back to the VA to be able 

to make this user-friendly and in a more timely fashion. 

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This is not complicated technology. It is commercially available. 

And we participate in many of these around the country. But this 

would be a specific HIE for this purpose. 

Mr. TAKANO. How expensive will it be, do you think? I mean, we 

are talking about small providers and large community providers. 

I mean, I hear an earful about ACA and the meaningful use of electronic health records. And many of the small providers complain 

about the cost of this. So do we envision having to come up with 

more money to enable this to happen? 

Dr. SHULKIN. Congressman, part of the $421 million that the 

Deputy Secretary referenced in his opening statement would be for 

us to develop this type of portal, so that part of it would be so that 

we could get this health information exchange. So that is included 

in the figures that we would like to have available to us, the flexibility to use money from 802 funds to be able to help develop this. 

Mr. TAKANO. Is this just the cost to the VA? Or are we also looking at the cost to the providers? Because to upgrade their ability, 

so I am envisioning these rural providers not necessarily having 

the capacity. Are we going to enable them through subsidies to acquire the technology? 

Dr. SHULKIN. In my prior life before coming to VA, as a community provider, we participated in health information exchanges. 

This is so common right now that most providers are now participating in health information exchanges. And while there is some 

cost to it, most systems, most community providers have already 

developed these interfaces. So I do not believe we are looking at a 

lot of provider burden here. In fact, it should be easier for them 

than making photocopies and having to send the VA paper as they 

are currently doing right now. So I actually think this will be more 

efficient for the providers. 

Mr. TAKANO. Okay. In the plan, VA indicates there will be a 

number of things VA can start doing to move towards implementation of the plan without additional authority. Can you tell the Committee what those are? 

Dr. YEHIA. Sure, Congressman. I mentioned those a little bit earlier. But the point here is to really try to meaningfully improve the 

veteran experience and the experience of our community providers 

and employees in the short term. So we are moving out to accomplish a couple of things today. And those relate to such things such 

as streamlining the referral and authorization process that I mentioned, standardizing those sharing agreements with our DoD and 

academic affiliate partners, infusing customer service training into 

community care, and making some of these critical alternative 

analysis or make-versus-buy decisions. 

So those are some of the things that are within our control today, 

that we are already starting to act on them to meaningfully improve the experience of our stakeholders. 

Mr. TAKANO. Well, the choice consolidation plan includes 13 legislative proposals that are integral to the success of the transformation. I know the provider agreement draft legislation that the 

Subcommittee on Health heard about yesterday is a top priority. 

Which other proposals are the most important immediately to setting the foundation for success? 

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Dr. SHULKIN. I would be glad to start, Congressman. The very 

top priority for us is to get provider agreements. Having the ability 

to be able to contract with the providers that we want, having the 

ability to work with our key partners, Department of Defense, our 

academic teaching affiliates, the Indian Health Service, other Federal entities, and other high-performing networks around the country, is going to be our critical feature here. So we absolutely would 

like to work with you and have your support in that. 

Secondly, the flexibility of the community care funds that we 

have talked to you so much about and being able to have our funding make sense for what veterans are receiving in the community 

and not making it as difficult to access those funds is absolutely 

key for us to do. Having the flexibility to access the $421 million 

from 802 funding, not new funding, but allowing us to access that 

funding so we can start developing these types of systems that we 

have talked about here in fiscal year 2016 is absolutely critical as 

well. And I would ask my colleagues if there are any other key features. 

Dr. YEHIA. Those are the critical pieces. And you will see in our 

legislative proposal section that we separated those out, because 

those are things that we need today to move out to deliver better 

care to veterans. There is a middle section of proposals that relate 

to how we consolidate all the different programs. And then the last 

piece relates to how we can improve some business and health information sharing processes. So those are kind of how our legislative proposals are divided. And we asked that we focus initially on 

these immediate legislative needs. 

The CHAIRMAN. Mr. Lamborn, you are recognized. 

Mr. LAMBORN. Thank you, Mr. Chairman. And thanks for having 

this hearing. Secretary Gibson, as I understand it from the briefings to staff, the VA previously wasn’t tracking metrics for off-VA 

care. Can you explain why this was not being done, and perhaps 

what is being done now, if anything? 

Dr. YEHIA. I think what we were saying before is that because 

we have such a patchwork of different programs for delivering community care, the Choice Program, the PCP contractor, affiliations 

with DoD and academics, they all are in a silo. And VA doesn’t 

have the visibility that it needs to really assess kind of supply and 

demand. Do we have the right population of doctors, the right specialties in the right areas? Can we actually assess and monitor 

quality at the regional and national level? 

We don’t have that level of visibility today. So in kind of the onetime cost system improvements that we articulate, those are the 

capabilities that we need. We need to have that visibility at the national level to be able to assess how to better match supply and demand, and how to monitor the quality of care for our veterans. So 

you are spot on, that is what we are asking for. 

Mr. GIBSON. I think the other light to shed there, VHA has historically operated as a loose confederation of medical centers. And 

what we are talking about here is moving toward an integrated enterprise. And so, oftentimes, what I find is out at a medical center 

level, there actually is a pretty good finger on the pulse of the care 

that is being delivered by local providers, because doc providers inside VA know who they are referring patients to. They know about 

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11 

that provider, and they are seeing their patients and assessing that 

provider experience. But that is not consistent all across the entire 

administration. We need to operate more like an integrated enterprise so that we have got that kind of consistency. 

Mr. LAMBORN. Okay. Thank you for that answer. And I am going 

to shift gears and ask about IT. We had a hearing recently, a combined hearing with another OTR committee, about how the VA and 

DoD is not able to share medical records. But some of what the 

plan is you are talking about for the future is hinged on a cloud 

IT system for better sharing between the VA and community providers. So if the DoD and VA haven’t been able to really integrate 

after 17 years, why do you feel it is going to work to do something 

differently with the community providers and the VA? 

Mr. GIBSON. First of all, as it relates to interoperability with 

DoD, this came up at our breakfast the other day. And I would 

plead with any Member of this Committee, give us an opportunity 

to come over and demonstrate for you today what is happening, the 

information exchange that is happening between VA and DoD. We 

routinely offer those briefings. We get staff coming, but we never 

can seem to get a Member to come. 

So please, we would love to have you come. I will come too. And 

we will put on that demonstration so that you can see we are exchanging electronically vast amounts of information with DoD 

every single day. We would love to share that with you. 

The CHAIRMAN. If the gentleman will yield. Members, we will 

take the VA up on that. It may be an early morning breakfast 

event. I will bring the chicken biscuits. And we would love to see 

it. 

Mr. GIBSON. Wonderful. 

Mr. LAMBORN. Mr. Chairman, thanks for your initiative on that. 

Mr. GIBSON. But the other part of the issue has to do with the 

health information exchange, the portal that Dr. Shulkin was talking about earlier. Other comments to add there? 

Mr. LAMBORN. Dr. Shulkin, can you add anything to that, the 

cloud IT system, that community provider sector? 

Dr. SHULKIN. When you come to this, to this demonstration, because I had a chance to see this in North Chicago, one of our integrated facilities with the Navy, as our doctors were going back and 

forth between DoD and VA systems. So this joint viewer does allow 

that. A health information exchange exactly provides that opportunity with community providers. So you do use the cloud. And you 

are able to go back and forth. It is not one integrated medical 

record. I mean, we would all love to see that, but the commercial 

companies are guarding their software protection to do that. So 

what you have is the ability to see information, clinical information. I think that is what you get with the health information exchange as well. 

Mr. LAMBORN. Okay. Thank you. Mr. Chairman, I yield back. 

The CHAIRMAN. Thank you. Ms. Brownley. 

Ms. BROWNLEY. Thank you, Mr. Chairman. My question has to 

do with implementation. Let’s just say, hypothetically, today was 

the day that we approved all the legislation that you needed to 

move forward with the program. Can you talk a little bit about the 

implementation and the timeframes associated with that? 

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12 

I know, I mean, I looked at the plan and saw the three phases. 

And I think by the third phase, it is 4 or 5 years out is my understanding. But there is also a lot of what you classify as make-buy 

decisions that have to be made that are going to be, I think, really 

important to that timeline. And certainly thinking about the role 

of third-party administrators, I think is, at least one that I think 

is a pretty big deal, a pretty big decision on all of this. So if you 

could just talk a little bit about the challenges, but what your 

timeline is. 

Dr. SHULKIN. Yes. Congresswoman, great question. First thing 

which I want to make sure that you understand is that we are out 

there every day, traveling all the time. And we are hearing from 

veterans that the current system isn’t working well enough for 

them. And they are pretty clear about this. I know you are hearing 

the same thing too. So we are not taking a wait-until-we-improvethe-system approach. We are, right now, understanding things 

aren’t working, and we are making these types of incremental approaches as fast as we possibly can. We are doing it in partnership 

with our TPAs and our provider partners, Department of Defense, 

academic centers. So we are starting right now, and have been, actually, to make this better. We want to get there as quickly as we 

can. So the timeline you are talking about, I am going to actually 

have Dr. Yehia go through. 

Dr. YEHIA. Yeah, I think that is such a critical point. Because the 

way that we set up the implementation plan or the transition plan 

is not to have some grand reveal in a number of years. We really 

want to make incremental improvements. So that is why we came 

up with these different phases. The first phase is really to develop 

the implementation plan, those details that you need and we need 

of milestones and how we are going to get there, those critical 

make-buy decisions, and then deliver on the—what we call minimally viable solutions, incremental improvements. 

The next phase, which is another year, is to start connecting different systems, getting these capabilities up. And the third phase 

is rolling out some of these larger ones and starting to maintain 

them. I think one thing to remember about implementation, I know 

IT has been mentioned a lot, is that from day one, when we started 

this plan, we were joined at the hip with our IT colleagues. So our 

assistant secretary for IT, LaVerne Council and her team, were 

partners with us. They helped us develop a lot of these recommendations. They helped us come up with the cost estimates. 

And now they are standing up a project management team just for 

community care. 

So I couldn’t agree more that we need to do this as an enterprise. 

It’s not going to be run out of VHA. It is not run out of IT. It is 

run at the Department level. I think the other really important 

point about implementation and why it is different than before is 

this collaboration that we have created between field leadership, 

program office leadership, and also external consultants that have 

expertise in things such as health plans and value-based care, that 

VA doesn’t have all those specific competencies today. 

So we are assembling these, what we are calling tiger teams, 

dedicated staff, multidisciplinary, to start rolling out some of the 

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13 

different aspects of implementation which, in my mind, makes it 

unique. 

Ms. BROWNLEY. In terms of the make-buy decisions, and, again, 

going back to third-party administrators, so, again, that seems like 

a pretty big decision. And I know that we have—it has been slow 

in terms of the Choice Program and so forth. But it is my understanding, I can’t speak for Health Net, but with TRICARE, I know 

they have invested quite a bit over the last, you know, 6 months, 

anyway. It appears they are improving. But, again, it is going to 

be customer satisfaction that tells the true story. But give me some 

idea of your thinking, some of the pros and cons of using our existing third-party administrators, or taking all of those services within the VA. And you have 20 seconds. 

Dr. YEHIA. I can’t stress enough that they are our partners. So 

we are working with them day in and day out. They are embedded 

in some of our medical centers. So they are our partners in making 

the Choice Act work. I think we have engaged some external consultants to help us determine what we are calling an announceable 

alternative to determine what is best for taxpayers and best for 

veterans. We are not taking this decision lightly. It is not just an— 

we are using all the resources we have to help us make the best 

informed decision. 

Ms. BROWNLEY. I yield back, Mr. Chairman. 

The Chairman. Thank you very much. Dr. Roe, you are recognized 

Mr. ROE. Thank you, Mr. Chairman. And, Dr. Yehia, you will get 

all the tough questions being a University of Florida grad, okay, 

from me. First of all, health care is changing in America as we all 

know. And we are looking now, instead of just procedural things, 

outcomes-based medicine. I know we have a VISN director here 

who has been a hospital director also. And if you look at the local 

hospital system, they will know pretty much in that area where 

they are, who the providers are they can use. 

I will give you an example. At home, we have, and I will do a 

little shout-out to my own practice, but we have a group of about 

500 primary care providers. We formed a Medicare ACO. It is the 

best performing ACO in America with 25,000 or less people in it. 

So the VA could easily integrate and get results back from that. 

Mayo, Scott and White, I mean, on and on, Marshfield, we all know 

those systems that can provide a lot of care. 

And I absolutely do believe you are on the right path. I want to 

support what you are doing 100 percent, because I think this 

blended system is the one that is ultimately going to provide the 

care to veterans. I really believe that. And simplifying the system 

has to be done. And it has to be for your sanity and the veteran’s 

sanity both. 

So I want to give you a shout-out for that. To Mr. Lamborn’s 

comments about the IT system, I have had the fortune, or misfortune, to be in North Chicago twice in the winter. It wasn’t as seamless as I would like to have seen it as a provider. As a provider, 

seamless, if you are the boots on the ground doctor, something that 

takes you 2 or 3 or 4 minutes to get information from, you are 

hopelessly behind at the end of the day. You have heard me say 

this over and over again, having used an EMR system. 

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14 

So we have to have a system that works for the provider because, 

otherwise, it doesn’t work for the patient. Those things, what I 

would like to know is what percent of the veteran population do 

you think will actually utilize this system? Because you have got 

a little bit of an onslaught. I think some of that was a woodwork 

in process, people heard about it and hey, maybe I can go get that 

care. So how many do you think will actually be in non-VA care 

and VA care? 

Dr. YEHIA. I think that is a great question. As a provider in the 

system, you know, we are trying to design a system that works 

great for veterans, our providers, and employees, and community 

providers as well. When I see patients, I want—3 minutes is too 

long. So I can’t agree more. And so I think it is important that 

whatever we end up designing in partnership with Congress works 

for us. Because I am going to be living it day to day as well as I 

see patients. 

With that in mind, your question about how many people are accessing community care, about a million and a half veterans have 

received some sort of community care. That doesn’t mean all of 

their care is in the community. They might have gone out for a 

particular procedure or an episode of care. But there are a good 

chunk of veterans that get their care in the community. 

Recently with the expanded Choice legislation and removing the 

eligibility date and the 40-miles-from-primary-care physician, that 

makes about 900,000 veterans are now eligible under the 40-mile 

geographic criteria. So there is a big population of our veterans 

that are now eligible to access community care. 

Dr. SHULKIN. Dr. Roe, let me just say, I think what you just 

talked about, your statement, is a precise articulation of what this 

plan is about. So I thank you for that. Health care in America is 

changing, and changing rapidly. And this is actually a plan that 

recognizes that and says VA has to not only keep up with it, but 

take advantage of everything that is happening good in American 

medicine. So I used to run our accountable care organizations. It 

is exactly those networks we want to tap into to get the best care 

for our veterans. 

Mr. ROE. And it is easily reproducible. I mean, you can get that 

data quickly back. The electronic health record is a challenge, because in ours, where we brought in other doctor groups, 40 different electronic health systems. And that is a huge challenge 

across the country trying to figure out how to make these things 

integrate. And that will be ongoing. I think the other thing I want 

to do, as Ms. Brownley asked, what is the timeframe? If this goes 

exactly like we think, which it won’t, how do you think the timeframe will be? Couple of years? 

Dr. YEHIA. Yeah, I think it is such a critical question. We are 

really doing this in an iterative way. It is kind of like agile design. 

As I mentioned before, we are not looking for a grand reveal after 

a number of years. So we are hoping that even starting today, we 

are starting to deliver incremental improvements to veterans, employees, and our community providers. After some of these makebuy decisions, and the portal is an example, those take a little bit 

of time to actually get into place. But that doesn’t mean we are not 

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15 

going out today and starting to make the system better. That is our 

intention. 

Mr. ROE. My time has expired. But I thank you for what you are 

trying to do. And also, if you could just do one thing is make sure— 

and Medicare does a pretty good job of this—are timely payments 

to providers. If they are sitting there for months and months and 

months, they are not going to participate. I yield back. 

The CHAIRMAN. Ms. Kuster. 

Ms. KUSTER. Thank you very much. And thanks so much for 

being with us. I think this is a really important conversation to 

have, because the conversations I have been having with my VA for 

several months now, actually over the last couple of years, is that 

there is just such a patchwork of programs. And they prefer the 

programs where they can stay in touch with the providers in the 

community. 

We have also had some challenges with our third-party contractor on implementing the Choice Program in New Hampshire. I 

have to ask one very parochial quick question. We are one of only 

two States in the country without a full-service VA hospital. And 

we had a special amendment under the Choice Card to reduce to 

20 miles. Can I reassure my folks in New Hampshire that this 40 

mile is not going to cause them to be driving over the mountains 

in the snow again to get to the VA Hospital? I told you it was parochial. 

Mr. GIBSON. Well, no, we expected the question, quite frankly. 

Ms. KUSTER. Thank you. We are dogged in our determination to 

care of our veterans. 

Mr. GIBSON. We deliberately, in the plan, did not address the 

special circumstances in Alaska, Hawaii, and New Hampshire. And 

so part of the process here as we work through this is to, very deliberately, with all the stakeholders, look at each one of those instances and figure out exactly the right thing for veterans and for 

taxpayers. And we commit to you that we will do that. 

Ms. KUSTER. Thanks. We will be on it. And just having said that, 

and whether you say 20 miles or 40 miles, this picks up on a previous question, part of the confusion is that to use this distance 

when it is not relevant to the care that is being provided, I think 

is really a dilemma. To say I am 20 miles or 40 miles from a facility, if it doesn’t—you know, look, I need heart surgery, I don’t need 

to go to a primary care physician. So are we going to resolve that 

particular aspect of this as well? 

Dr. YEHIA. Yeah, so I think that is a great question. Because we 

heard that from our veterans and our community providers. The 

way we articulate in the plan is not to a facility, but to the relationship. And so we say that it is 40 miles from a primary care provider. Because in health care, that relationship between the patient 

and the primary care provider is probably the most critical relationship there is. They are the care coordinators. They provide access to specialty care. And so the way that the eligibility criteria 

of the plan is designed is, if you live far away from that critical relationship, all the veterans health benefits package is available to 

you in the community. So it is more relationship-based and less facility-based. 

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16 

Ms. KUSTER. Okay. Thank you. I appreciate that. And part of 

what I wanted to get at, and I think this is a goal, is just the confusion of the bureaucracy. And you all inherited this as well. It is 

complicated which veterans are eligible for which services, what 

kind of health care we are offering. And I think there is sort of a 

built-in conundrum for us on the Committee and in the veteran 

community between focusing on those types of injuries and ailments that come from their service, versus those types of injuries 

and ailments that have to do with aging and other disease processes that are built in to the DNA before they even head overseas. 

In our case, we have 65,000 Vietnam veterans in New Hampshire aging. But I want to keep the promise to them, because many 

of their concerns, health care concerns, mental health care concerns 

are related to their service. We didn’t know it at the time. It took 

us a while to sort it out. But it is very clear to me now as I meet 

with these folks, and I will add in the folks coming back from—we 

have a high percentage coming back from Iraq and Afghanistan, 

the TBIs, the MST, the PTSD. Can you just comment on serving 

the whole veteran, if you will. 

Dr. SHULKIN. Yes. I think you have said this very well, that the 

current experience today is confusing and overly complex. I would 

note that this is not purely a VA issue. This is the managed care 

industry in general, right? Nobody really understands their managed care benefits and the complexity of what is happening in 

American health care. 

Ms. KUSTER. I absolutely agree. 

Dr. SHULKIN. But we recognize what you are saying. The point 

of what we are trying to do, this type of incremental change, is to 

simplify this. If you work with us to allow us to get the flexibility 

of care in the funding, care in the community, care-funding together, we think that will go a long way towards allowing us to 

simplify the eligibility requirements, the understanding of what 

veterans can and cannot get from the VA. And we are committed 

to doing that early on in this timeframe. And we are using veterans focus groups. And we are out there in the MyVA efforts to 

try to make this more veteran-centric. 

Ms. KUSTER. Well, I look forward to working with you. And 

thank you very much for your presentation. 

The CHAIRMAN. Dr. Benishek, you are recognized. 

Mr. BENISHEK. Thank you, Mr. Chairman. Welcome. I just want 

to reiterate what Dr. Roe said, that, frankly, I think this is great 

that we have one way of VA veterans getting access to community 

care rather than the hodgepodge of efforts. My concern, of course, 

is the implementation and making it work. I will give you an example here. I got many complaints from providers in my district about 

the Choice Program due to the inability of the Health Net to communicate with the VA and with the private providers. I had a provider that told me they had to wait weeks to hear back from 

Health Net. They want to update authorization for care. And when 

they do hear back, they have to spend 40 to 75 minutes on the 

phone to check on each and every authorization. This is like, just 

this week. 

So, I mean, I know that this Choice thing came in quickly. And 

you tried to get it. But the implementation of this is what scares 

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17 

me about it. Do you know what I mean? Are you aware of this 

problem with these third-party providers? Who is dealing with 

that? 

Dr. SHULKIN. We are not only aware of it, we are painfully aware 

of it. We are hearing this every day, many, many times a day. And 

so the Choice Program, which was brought up with the best of intentions, has experienced considerable problems, putting the veteran in the middle, quite frankly, but also the providers. We are 

working with both TPAs. And the CEO of TriWest is here in this 

room with us today. We are working with both TPAs. 

We have gone through multiple, multiple contract modifications 

to make this work better. And we are using pilots in several locations throughout the country. We are actually co-locating the staff 

from the TPA with the VA staff. One of the things that we learned 

in looking back on this, it was the VA staff who had the relationships with the providers in the community, and the relationships 

with the veterans. And when we removed them from the process, 

problems began. So we are working now with the TPAs to— 

Mr. BENISHEK. I tend to agree with your assessment. As you 

know, I worked at the VA. And I know the guys at the VA. I knew 

their local providers. And that system actually seemed to work 

okay in my community. And then having somebody they have no 

idea who they are contracting with you, you know, taking a percent 

of the money doesn’t make much sense to me, to tell you the truth. 

I am not sure that we were all that happy with the plan to do that. 

Dr. SHULKIN. Right. 

Mr. BENISHEK. Let me just talk to you a little bit more about another issue and that is, the core competencies in the VA. The plan 

calls for the VA to access non-VA care for veterans outside of certain core competencies that the VA should handle. What are those 

core competencies? 

Dr. YEHIA. I think that is a great question. When we started this 

process to consolidate care in the community, Joe and I really had 

to step back, because we couldn’t look at it just in a silo of how 

do you make this part of the system work better without figuring 

out how it interacts with the rest of the system, which is why, in 

the preamble of the report, we talk about the future of VA health 

care. And I think the principle there is that we cannot provide 

every single service in every single location to every single veteran. 

And that is the concept there. I think if we want to move towards 

that integrated health care system, really creating a complementary provider network to internal VA care. 

This doesn’t mean we are outsourcing VA or dismantling the VA. 

What we want to do is have a more complementary integrated system, so that if we are providing mental health care and primary 

care in that area, we probably don’t need a lot of mental health 

care and primary care docs in the network. We need other things 

that aren’t provided at the VA. So we are calling these kind of 

foundational services that VA would provide. A lot of that is going 

to be locally determined. As you know, health care is local. What 

is available in one market may not be available in another. So that 

is where that spirit comes from, is how to get to that integrated 

health care system and creating a complementary network. 

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18 

Mr. BENISHEK. Well, to tell you the truth, I really appreciate 

your enthusiasm and your response. That may be due to your relatively short tenure at the VA. I am hoping that that will continue. 

And I know that, you know, that two physicians up there are relatively new. And I actually really welcome their input and leadership. And I am happy to work with you to make this plan happen. 

I just have my concerns about the pace. Thank you. 

The CHAIRMAN. I think part of it is because the Gators are 9 and 

1 right now. Mr. O’Rourke, you are recognized. 

Mr. O’ROURKE. Thank you, Mr. Chairman. I just want to begin 

by telling you each how encouraged I am by this report that you 

produced and your testimony today and your answers to our questions, and how grateful I am on behalf of the veterans that I represent for this initiative. And, Dr. Shulkin, you talk about changes 

in American medicine that you are anticipating and incorporating 

in the proposal that you have put forward. And it is restoring the 

VA to its rightful place as a leader in American health care who 

can set the standard and become known for excellence and figuring 

out problems that are fundamental to how we provide health care 

in this country. 

So this, for me, in the—you know, as another short-timer who 

hasn’t been here yet 3 years, is certainly the high watermark in 

terms of our work with and collaboration with the VA. And I share, 

you have heard it from many of my colleagues so far when they are 

asking you how long will this take. And, Dr. Yehia, you have done 

a great job of avoiding the question and saying we have got an 

iterative process and we are doing this, that, and the other. I don’t 

want to speak for anyone else. 

What I am concerned about is you have just a little over a year 

left in this administration. And this is a very exciting, necessary, 

essential proposal to reform VA care. And I want to make sure that 

you can do and we can help you do everything necessary to make 

it happen. So you don’t have to answer that question. But just 

know that is the interest. And I, for one, want to help legislatively 

in any capacity I can to make sure that we get this done. 

I want to point out a couple of things that I think are really encouraging. The focus on care coordination, which you have talked 

about, and making it a fundamental principle of excellence for the 

VA is just so important if we are going to get this done. You mention in your report that you are seeing rising demand for outpatient visits and decreasing demand for inpatient hospital beds. 

And that seems to answer this frustration we have with the $1.1 

billion overage in Aurora, and hundreds of millions of dollars over 

in Orlando and Las Vegas and New Orleans. 

We shouldn’t be building stand-alone VA hospitals to only take 

care of veterans. On top of that, 41,000 funded, authorized positions unfilled. We have to prioritize where we are going to focus in 

the VA. And so core competencies, as Dr. Benishek raised, I think 

it is really important that that is a fundamental aspect of this 

plan. And I like the way it is articulated on page 18 of the proposal. 

One question related to this, Secretary Gibson, you have said in 

a previous hearing that for every 1 percent increase in VA patient 

demand on the system, you incur an additional $1.4 billion in cost. 

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19 

Does this plan, through care coordination, investment in IT systems, et cetera, create some of the necessary efficiencies for us to 

be able to afford greater veteran participation going forward? 

Mr. GIBSON. I will start and then you guys can finish. It was ac- tually Bob that used the 1 percent and $1.4 billion. But I will own 

it. There are certainly efficiencies built in here. As I alluded to in 

the opening statement, the fact remains that as we improve access 

to care, and as we improve the veteran’s care experiences, we are 

going to find more veterans coming to us for care, especially when 

it is financially advantageous to the veteran, when their out-ofpocket costs are going to be lower to come to VA. So we are going 

to continue to see that. But there are some savings that are built 

in to this overall cost picture. And I will ask Baligh to touch on 

those. 

Dr. YEHIA. So I think what you see here is that we are moving 

towards best practices that are in industry. So we talk about, by 

streamlining a lot of these processes, it is more automated, less 

manual. Our employees can spend more time with veterans. And 

so there is efficiencies gained there. By working with high-performing providers in the community, providers that understand the 

principles of high-quality care and utilization management, there is 

efficiency there because they are not going to be ordering that 

extra CAT scan that may be unnecessary. Or they may be preventing an admission for a diabetic that may require an inpatient 

stay for someone else. 

So I think it starts with making the system a little bit better, 

getting the right providers in the network. And then probably the 

last component is how we start leveraging lessons learned from 

CMS. CMS is doing a lot of great work in value-based payments. 

So we are not reimbursing just for episodes of care but for more 

outcomes-driven care. So we articulate some of those there. That is 

the direction we want to move to. We want to skate kind of where 

the puck is going and not necessarily be tied to the systems today. 

Mr. O’ROURKE. Thank you. And, again, thank you for your work. 

And I look forward to working with you on this. I yield back. 

The CHAIRMAN. Thank you very much. Mr. Huelskamp? Mrs. 

Walorski? 

Mrs. WALORSKI. Thank you, Mr. Chairman. And I also want to 

add to the panel how grateful I am that you are here as well, and 

that we sound like we are on the same page, at least in the concept 

of moving forward in trying to be able to rebuild that trust with 

veterans and the VA. 

The one question I have is all the way back to when the Chairman started on this whole issue of Choice. And let me start by saying, you know, I want the VA to be healthy. I want the VA to work 

for my constituents in northern Indiana. Unfortunately—so when 

I sit in these hearings and I listen to every single question my colleagues are asking, I still think in the back of my mind, we are not 

as functional in the State of Indiana as some of our neighboring 

colleagues here. 

And that is my desire. That is the desire of our veterans. They 

want everything to work for them because we promised them that 

when they went to fight. And so, that is my goal is to continue— 

to work as closely as we can to get the VA healthy. And so I so 

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20 

much appreciate the report that you have and the plans and that 

kind of a thing. 

But I am still caught in the question that Representative 

O’Rourke didn’t want an answer, but it will help me to have and 

answer on when can we see some of this happening. Because I was 

on the conference committee back in October when we did the reform, reset type thing. We still don’t really have a Choice Program 

in my district, in northern Indiana. And so I just—it is interesting, 

I just had a phone call with my district staff that works on all of 

our VA case work in the district and they were just telling me that 

just recently, we got a call from an actual VA hospital in the State 

of Indiana telling the veteran to call my office because the VA hospital can’t get appointments and can’t get anything through for this 

veteran. 

I am thinking to myself something is wrong. There is some kind 

of a clog in the line. And I would ask you guys, and even Mr. Gibson, if you would—I am more than willing to come to that computer IT show-me-the-world type thing. I am more than willing to 

be there. I will be there. But I am, again, asking if you or the Secretary could seriously come into my district, and if we could have 

conversations about how we make this work better, because I think 

that would be one of the quickest ways, and much more efficient 

ways to actually see that it just isn’t happening like you are describing it around some of these other areas around the country, 

that would be my first question. 

Mr. GIBSON. We will do it. Bob or I will come, we will bring some 

of our medical center leadership from Indiana, and we will also 

bring senior representation from the TPA, from the country. 

Mrs. WALORSKI. I really appreciate it, I really do. 

And then my second comment is back to this Choice Program. I 

remember being on the conference committee when we talked 

about that 40-mile radius. I am and still very, very concerned. 

When you are looking at areas that have rural places which are the 

hardest sometimes to get care to, that is why this evolved in the 

first place. So it is like let’s get care to them from a communitybased hospital, somebody near them. 

One of the things that I find in my district, which I find so frustrating to say, if we are going to look at broadening that radius, 

it is going to cost a whole lot of money. And I know when you are 

talking about you need our help, that means money. But it is so 

problematic in places in these rural areas. And to Representative 

Kuster’s point, when you are dealing with winter weather. Winter 

weather in my State closes States. We have state of emergencies, 

and we can’t travel, you know. I am finding myself getting involved. The veterans are calling my office, and then having me 

make phone calls to try to get Choice implemented. It literally is 

not rolling out in our district. So can you just comment on that? 

I mean, when can we see that actually happening? 

Dr. SHULKIN. One of the points that Secretary McDonald constantly makes is the VA is the canary in the coal mine for American medicine. So the problems that you are describing about rural 

health care are problems in every aspect of health care. 

Mrs. WALORSKI. True. 

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Dr. SHULKIN. Getting providers there, getting the right specialties there. 

VA is looking at this issue. We are desperately trying to hire psychiatrists in El Paso and specialists in Indiana. But one of the 

ways that we are beginning to do this is to really use telehealth. 

In a way for rural— 

Mrs. WALORSKI. Telehealth is working in my district, I will tell 

you that. But for specialized care, and for things like cancer and 

those kinds of—it is so hard. 

Dr. SHULKIN [continued]. We are moving rapidly toward specialty 

telehealth. In fact, people don’t realize, nobody is doing more telehealth in the country than VA. We are driving this faster than anybody. And that can’t be the total answer, but we have to look towards new technology. 

Mrs. WALORSKI. Right. 

Dr. SHULKIN. And we have to get more— 

Mrs. WALORSKI. I do agree. Yeah, I will give you that, it does 

definitely works in our State. But I appreciate your willingness to 

come and help us troubleshoot. I yield back. 

The CHAIRMAN. Mr. Walz. 

Mr. WALZ. Well, thank you, Mr. Chairman. I, too, would like to, 

first of all, applaud the Committee for showing that we can simultaneously do our duty of oversight on accountability, and start to 

provide vision for the future, because I think what we are talking 

about in hearing people, this is our opportunity to shape VA 2050, 

if you will. 

Amongst the crisis situation that arose from Phoenix and others, 

I think this is the silver lining that we are starting to move towards that blended system you hear about. 

And Deputy Secretary Gibson, I do have to say, at the time when 

the VA so needed it, you instill confidence, your candor and steady 

leadership is appreciated. And I think that needs to be said publicly, because we are moving towards solutions, so thank you. 

My team and myself, and I know many have done this, have 

gone on deep dive on this. It gave us that opportunity, working 

with everyone from Health Net and TriWest who you said are here 

today—not only are they here today, they were at roundtables in 

Brainerd, Minnesota, with veterans. And at a time when people 

could have ducked and covered, they didn’t. They stood up in the 

face of this and were very candid. I appreciate that. 

Private providers, county veteran service officers, the Minneapolis VA, VISN 23, American Hospital Association and central 

office are digging into this. People want to fix this, they want to 

get there. And you have heard it today, it is working. I think the 

point that was brought up by my colleague from Indiana just 

brought up, separating VA health care from health care in general 

is—you cannot do it, the lack of rural providers in the private sector is every bit of a problem as it is for veterans. 

My question to you and I want to be specific on this, and you 

have answered it some degree, but out of all of those meetings and 

other things that came, one of the things I am hearing from the 

providers, from the private providers, is the standards in the program are not industry standards, resulting in some of them opting 

out. I want to understand why you think, in your opinion, why are 

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22 

some providers opting out of this? Because I know they want to 

help care for veterans, but we shouldn’t make it at a loss to them. 

If you could take that one, I know you have answered it to a little 

degree, but this was asked of my people out there of why this is 

happening. 

Mr. DALPIAZ. If we look at rural areas in particular, two big reasons: One is, and we have this in the plan, we need to continue 

with or enhance special dispensation for rural providers. The other 

finding, and it should have been very obvious to all of us is when 

we wrote the initial requirements, we wrote in very burdensome requirements for providers, and we know in rural areas, there is a 

lot of small operations. And what we hear from rural providers is, 

this is so burdensome for me to participate, I have to hire additional staff, and I can’t do that. 

So when we look at future requirements for a network, we built 

in flexibility for special dispensation for different parts of the country, rural areas being one. And we have to take a very critical clinical look at the things that we are requiring them to send back to 

us. They seem to be the two things that are most troublesome and 

push people away from our system. And we have learned those lessons. 

Mr. WALZ. So when we go forward, will that be a contract thing 

that you have the capacity to do, or does this need legislative improvements? 

Dr. YEHIA. So I think it is a combination of both. There are some 

requirements that we have today that are not industry standard, 

and the principles laid in here is to move us more towards that. 

What are the leading practices? One of them is tying the medical 

record to claims. That doesn’t exist typically in the private sector. 

Not saying that we don’t want records back, but there are other 

ways that we can incentivize our community providers to get us 

health information back without saying we are not going to pay 

you. 

The critical thing that we would need is provider agreements, 

and this is a simplified way that we can partner with providers of 

the community. And those are exactly the providers you are talking 

about; typically, the local, mom-and-pop, small practices. These 

aren’t the large conglomerations that could enter in complicated, 

far-based contracts with us. Those we can work through very complicated contracts with. But the smaller providers won’t work with 

us if we have them jump through a number of hoops that Medicare 

doesn’t require, or partnerships with other health plans don’t require. 

So that, I think, is critical for us. If we can get provider agreements passed, it is going to allow us to partner with community 

providers, and then increase access to those providers for our veterans. 

Mr. WALZ. That is exactly what they are saying. How quickly can 

we do this? 

Dr. YEHIA. We have I think at the last Subcommittee hearing, 

VA presented their proposal, and I think the Committee is considering it. I know there is a counterpart bill in the Senate that has 

been introduced. We would love for you to move as quickly as possible in that. 

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Mr. WALZ. Because I don’t want to put these people in the position either. It is pretty wrenching for them that they want to do 

this, and they don’t want to be seen as not providing for veterans. 

So I think that is a positive step forward. 

Again, I thank you for your work, and I have to say this is— 

there are some positive developments, and we need to focus on 

where there is crisis, we need to continue to have accountability, 

but I think it is important for us to show that there is lot of good 

happening too, so thank you for that. 

The CHAIRMAN. Dr. Wenstrup, you are recognized. 

Mr. WENSTRUP. Thank you, Mr. Chairman. It is a very encouraging meeting today. And I want to thank you for listening, because that is what we are seeing taking place here, you know. In 

the last couple years, we have had these types of discussions about 

where, I think, we should be headed, and we are seeing it happen. 

And I appreciate that very much. 

I do agree with the Chairman when he mentioned that when we 

are outsourcing, it doesn’t necessarily cost us more if we are lowering on the other side. We may find ourselves, and probably will, 

in a situation some day, where we say we don’t need all these physical plants in the VA, and we can reduce our footprint. And so we 

can save in a lot of ways and continue to work on increasing productivity. 

I especially like what you were just talking about, provider 

agreements. If there is something in the way coming from here 

that is making that more difficult, then we need to change that. 

And you are right, especially in rural areas, letting that lone practitioner out there be able to be a VA provider. Which brings me to 

another point that, I don’t really think we need to say that this is 

non-VA care, you know. Our practice, I guarantee you, 20-some 

orthopaedic surgeons, we would have been glad to have a sign out 

in front of our building saying ‘‘VA provider’’ and put the VA logo 

up there. So I think we should shift away from calling it non-VA 

care, but extending VA care, and I think that would be helpful. 

Mr. GIBSON. That has been my campaign for the last 6 months, 

to eradicate non-VA care from our vernacular, and instead, refer to 

it as VA community care. 

Mr. WENSTRUP. Well, I appreciate that. Great minds must think 

alike. I don’t know. But I also appreciate what you were talking 

about with the information sharing, because in our practice, you 

know, we could go to—a patient comes to our practice, we could get 

their information from any hospital in the region without having 

to jump through a lot of hoops, and it makes a big difference. So 

I applaud you for being in the right direction, and I yield back. 

Thank you. 

The CHAIRMAN. Thank you very much. Dr. Ruiz. 

Mr. RUIZ. Thank you, Mr. Chairman. Secretary Gibson, simplifying and improving the process for veteran seeking community 

care remains at the top of my priority list, and the veterans living 

in my district. We—as soon as the Choice Act was passed, we held 

some workshops in my district with physicians, TriWest and the 

VA, and we heard a lot of the different obstacles that were involved, including the enormous amount of bureaucracy and the lack 

of information that our providers had in order to enroll. 

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The two VA community clinics located in my district are Palm 

Desert and Blythe, they are the point of care for VA-based care in 

my district. I am eager to make those facilities more veteran-centric. And I believe your proposal, while not perfect, is a step in the 

right direction. 

I, too, am a little concerned about the implementation plan, and 

the deadlines, and the inherent evaluation, and oversight that you 

have within the plan in order for us to meet the goals that you set 

forward in the time that you want to set them, and not have another over-budgeted plan, or I should say, under-budgeted plan, 

where we get a surprise bill for billions of dollars in the near future. 

My questions rely on the fact that we are going to start relying 

on community physicians to provide care in areas that have low access to veterans facilities. Yet those are, oftentimes, the rural underserved area. And in my district, we have one doctor per 9,000 

residents. So how are you going to account for the physician shortage in the community for the general population, and rely on them 

for the physician care for veterans? 

Dr. SHULKIN. If you have the answer to that, that would be 

great, because—yeah. This is a significant problem for America. 

VA, I think, can bring to this several things: One is, thanks to your 

additional authorities in the Choice Act, you allowed us additional 

graduate medical education funding. And so, for us to create partnerships with medical schools, and to create new GME spots that 

focus on the shortage areas and focus in the rural areas is absolutely top among— 

Mr. RUIZ. Well, we should talk. I was senior associate dean of a 

new medical school that had that exact plan that took my students 

in under grad in college from underserved communities into the 

under grad, into those medical schools in developing residency programs in those underserved areas. One of the key places that you 

can start having your residents go to, and that are involved that 

are eventually going to work at the VA, is FQHC. 

So let me ask you another important question, because I am limited with time. I have a veteran in my district who is not the only 

veteran that has told me this story, who had bad, I guess, consequences from the third party not paying their bills on time, and 

therefore, the provider then would bill the veteran. And the veteran didn’t have the resources to pay that. And also, the veteran 

was under the impression that the third party was going to pay 

those bills. 

My veteran now has poor credit scores because it went to collections, and it went through all these other things. What are we 

going to do to protect the veterans in case there are glitches like 

that so they don’t have the financial harm? 

Dr. SHULKIN. We spend a lot of time right now, our central business office spends a lot of time helping veterans work through 

these situations. Again, the VA is not dissimilar to what is happening in the private sector. Patients don’t understand their bills 

and third-party payers are sometimes inappropriately billing. So in 

those situations, we are there to support the veteran. Sometimes 

the veteran does have an obligation, because it wasn’t a covered 

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service, but many times, we step in the middle to support the veteran. We do not want to see what is happening— 

Mr. RUIZ. How do you support the veterans, do you take on the 

cost? 

Dr. YEHIA. If I may, I think the perfect example of this is ER 

care. And right now, because of the different rules and requirements that we have, a lot of veterans think they are eligible for 

that benefit, but get denied the care. And that is part of the reason 

why we wanted to tackle that— 

Mr. RUIZ. One last comment, because I have about 25 seconds. 

You talk about the relationship that is important in terms of primary care physicians, and you are absolutely right, but our veterans need pain management, that primary physicians are not 

trained, they are not pain specialists. They also need psychiatric 

care. 

So I believe that that relationship, that the access or the criterion in which you allow a veteran to see a provider outside of the 

VA, or in the community, should not just be the relationship with 

a primary care physician, but it should be service-based. So if they 

don’t have a pain specialist at that VA location, then they are allowed to see a pain specialist within the community? 

Dr. SHULKIN. Yep. 

Mr. RUIZ. When is that going to happen? Does it require a bill, 

or can you guys make it happen? 

Dr. YEHIA. Yeah, I think that does, I mean, the concept of going 

from the service would expand the aperture greatly for all those, 

because we don’t have pain providers everywhere. So we can—I 

think we are open to having those discussions, but those come with 

significant resources. 

Dr. SHULKIN. I would just add that the pain management is a 

different issue than the behavioral health. We integrate—when Dr. 

Yehia talks about primary care, we are actually talking about a 

team called our pack teams, with behavioral health integrated into 

the primary care services. Nobody does this on the scope that VA 

is doing this now. So I think that one’s different than the pain 

management. 

Mr. RUIZ. Okay. 

The CHAIRMAN. Dr. Abraham. 

Mr. ABRAHAM. Thank you, Mr. Chairman. We were fortunate last 

week to be able to be back in our districts among our veterans. And 

certainly, my study, or my county was unofficial and small, but I 

did poll my veterans, about 56 or 60. And what I found is what we 

alluded to the Chairman’s statement earlier in this hearing, that 

up to 62, 63 percent of my veterans are still having significant wait 

times. And again, an unofficial, small study. I understand that. 

So, I guess my question, Secretary Gibson, to you, is under VISN 

16 when Secretary McDonald was here before, we had some issues, 

that you guys said it is greatly improved, and I will take your word 

for that to a point, you know that. But are we—and again, it may 

just be my lack of knowledge—are we able to access the VA’s data 

as to how you figured wait times, the actual tactics and logistics 

of how you got to those numbers? 

Mr. GIBSON. We would be glad to come walk through exactly 

that. 

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Mr. ABRAHAM. I would appreciate that. 

Mr. GIBSON. We would be delighted to do that. 

Mr. ABRAHAM. I would just like to understand how your figures, 

how you get the numbers you get to? 

Mr. GIBSON. We would be delighted to do that. And that includes 

figuring out whether or not emergency department visits are included in the average wait times. Because people keep handing me 

notes that say they are included, and I have been told repeatedly 

they are not. So we are going to figure that one out definitively. 

Mr. ABRAHAM. Thank you. And Dr. Shulkin, I will ask you this: 

Will the veterans be able to choose a community care provider of 

their own, or will it be from an approved VA list? 

Dr. SHULKIN. The concept here is to have strict criteria that are 

based on performance, clinical outcome measures and service measures. 

Mr. ABRAHAM. So you will judge that community provider based 

on the criteria? 

Dr. SHULKIN. We are going to create network. 

Mr. ABRAHAM. Can I get a copy of those criteria? 

Dr. SHULKIN. Yes, yes. This would be still in development, but 

we have developed two types of principles. One is what develops, 

what we are calling this core service, or foundational service, about 

what VA really needs to be expert in and what can be done in a 

community. And secondly, the specific criteria for criteria on quality and service measures. 

Mr. ABRAHAM. And again, what I am, I guess, more interested 

in certainly from my aspect, is just the criteria part of the primary 

care, because I think this is where we started and we talked about 

specialists earlier, and you said you would need more approps to 

go that direction. 

Dr. SHULKIN. Yes, sir. 

Mr. ABRAHAM. And the other question I have is how much cost 

savings would result from setting all non-VA care reimbursement 

at the Medicare liable rate? 

Dr. SHULKIN. There are some savings. I think that they are built 

into the plan. Do you recall the number? 

Dr. YEHIA. So we—I don’t have the number off the top of my 

head, but what we hope to do is move more towards regional Medicare rates, and those rates include calculations for graduate medical education, as you know, in geographic rural areas. That is our 

intention is to move more towards Medicare rates. We know we 

can’t get there 100 percent in every locale, because there is going 

to be certain geographic location and certain specialties, that in 

order for them to partner with us, where the community rate is 

higher than Medicare. So our goal is to move towards—closer and 

closer to a standard Medicare rate that is regional across the country, and allow exceptions as necessary for local communities. 

Mr. ABRAHAM. Thank you, Doc. My last question, should the 

emergent and urgent care expansion that the plan introduces be 

implemented? Will coverage of emergency care be available to veterans who are enrolled in the VA health care system, but are inactive, which VA currently defines as a patient who has not accessed 

VA care in 2 years. Dr. Shulkin, you are nodding your head. 

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Dr. SHULKIN. The plan that we have proposed for you says that 

a veteran would need to have active contact with the VA system 

in the past 2 years to be eligible. 

Mr. ABRAHAM. To be eligible for the emergent and— 

Dr. SHULKIN. That is correct. 

Mr. ABRAHAM. Okay, thanks. That is all the questions I have, 

Mr. Chairman. Thank you so much. 

The CHAIRMAN. Thank you. Ms. Titus, you are recognized. 

Ms. TITUS. Thank you, Mr. Chairman. I would like to give a first 

shout-out to Ghost and the Marine Riders at the Leatherneck Club 

in Las Vegas. I rode on the back of one of their motorcycles in the 

Veterans Day Parade. This was a great honor for me, but also, I 

am no dummy, because in a parade, somebody’s going to boo you. 

But when you are on the back of a Marine motorcycle, you are just 

getting a lot of this and a lot of this and a lot of cheers. 

Mr. GIBSON. We want to see pictures. We hope they are on your 

Web site. 

Ms. TITUS. That made me feel really good. 

Second, I want to thank you, Mr. Gibson, and the Secretary for 

helping us to get a director for the new hospital. That was very important, you did that. I am looking forward to meeting Ms. Kearns 

when she gets there on the ground and working with her. So thank 

you very much for that. 

We have heard around the room a lot of people talking about the 

confusion over the Choice Act and the community care programs; 

there are different ones, different benefits. And it is not just the 

veterans that are confused, but also the staff is confused. Now just 

about the time they get the hang of that, we are going to change 

it all over the next 5 years and have another new program. I want 

to be sure that you are building into your plans ways to train people and to educate the public so we don’t have to go through this 

every time. 

Dr. YEHIA. I will take that, that is such a great question. And 

in the actual system redesign and solutions, that first bucket of 

costs, are a lot of resources dedicated to training and communications. When we were developing the plan, as I mentioned before, 

we looked towards industry, but also to our partners at DoD and 

TRICARE. That was one of the big lessons that we learned when 

we sat around the table with our TRICARE colleagues, is over their 

decades experience of delivering such a system, the importance of 

educating the staff, the community providers and their beneficiaries on that. So some of those costs for training are baked in. 

And in that $421 million that we are requesting, that includes 

some of those exact things so that people—to eliminate that confusion. 

Ms. TITUS. I think that would be very helpful so that people will 

know where to go, what they are getting, one program, and understand it. And that will be a big hurdle that will be overcome. 

Another thing, since this is a 5-year program, I think we are seeing move very rapidly, medical marijuana, in the States, half the 

States already have it. It is recommended, it is legal. Doctors in 

communities do this, issue cards. We see it in the MILCON bill on 

the Senate side, saying the VA can do it for maybe this year. Are 

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you considering this, let’s not get behind the ball again on an issue, 

let’s get ahead of it. 

Dr. SHULKIN. We would need legislative support to be able to 

consider that. Right now as you know, we are not able to offer that. 

I think that the science on this and the experience in the community that is happening across the country suggests that this is 

something that we should be looking at more carefully, and we welcome working with you on that. 

Ms. TITUS. I just think it is going to be a community health 

issue. And if we are moving to more of that kind of service, we 

need to be aware of it, not put our heads in the sand on this issue. 

Ms. BROWN. Would the gentlewoman yield for a question? 

Ms. TITUS. I will yield. 

Ms. BROWN. My understanding is that we in Congress passed a 

law saying that the VA doctors, even in the States that it is legal, 

they cannot administer marijuana. 

Ms. TITUS. I appreciate that, and I will take my time back. I understand that is the case, but I also understand that it has been 

put into the MILCON bill on the Senate side for 1 year that in 

States where it is legal, the VA can’t refuse to do it. So I don’t 

know if that is going to be part of the compromise or not, but I 

hope it is. I am supportive of that. But either way, it is an issue 

that is moving very rapidly, and we need to be on top of it. I yield 

back. 

The CHAIRMAN. Mr. Coffman, coming from a State where marijuana is legal. 

Mr. COFFMAN. Thank you, Mr. Chairman. I think you are going 

to bring those chicken biscuits and we are going to have some 

brownies from the State of Colorado. 

Mr. Gibson, you touched on—first of all, I think this is moving 

in the right direction, but you did touch on some issues involving 

TPAs, the third party administrators. And I think being at a decision point whether or not you want to move that in-house and what 

the problems are. Could you, just briefly, touch on some of the 

issues, again, that you see with TPAs? 

Mr. GIBSON. First of all, and we do this every single day. I think 

the guys get tired of hearing me do this. I say, guys, we are just 

going to do the right thing for veterans, and allows us to be the 

best steward of taxpayer resources. So as you look at all the different functions, scheduling would be a function, processing claims 

would be a function, building and maintaining the provider network. I am sure I am leaving some out. 

So you have got all these different functions, in every case, we 

have to make a deliberate decision, do we do this ourselves or do 

we outsource it? And the criteria are just that simple. What is 

right for veterans, what allows us to deliver the best service to veterans, and allows us to be good stewards of taxpayer resources. 

So where it makes sense for us to outsource, believe me, we are 

going to head off in that direction. 

Mr. COFFMAN. I would encourage you not to bring the third party 

administrator functioning in, simply because I think you have been 

objective with this Committee on problems with third party administrators. I think we have had a problem, quite frankly, when 

issues are done internally. Sometimes we just don’t get those reLeonard.horne on VACREP0180 with DISTILLER

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ports that are accurate. My situation with the hospital in Aurora, 

Colorado, where we have been told, even despite the fact in 2013 

there was a GAO report that said this hospital, and three other 

hospitals that were currently under construction, were each, hundreds of millions of dollars over budget, years behind schedule, that 

we would be told by Mr. Hagstrom before this Committee that everything was fine, and it could be built for $604 million. 

He testified in Colorado. Last year at a formal field hearing that it could be built for $604 million. Then all of a sudden, the VA 

loses litigation in December of last year. The general contractor 

walks off the job and says, we are not going to come on the job unless the VA is off the job. The Army Corps of Engineers steps in, 

does an assessment and comes up with a number of $1.73 billion. 

So I just think that I like the idea that there is this tension between yourselves and a private entity, and that you’re objective 

with us in terms of the problems. Because what we tend to do is 

find out problems from whistleblowers or litigation in the case of 

the Aurora Hospital. And so, I just want to encourage you that 

whatever issues you have, make it work with them because I think 

that the problems would be much greater in-house, and we, quite 

frankly, would not be made aware of those problems on a timely 

basis. 

Dr. SHULKIN. Congressman, I would just say as the Secretary 

says, as the Deputy Secretary says, and as I say, this is not business as usual. We have learned painfully from those lessons, and 

we are looking at every issue as they make— 

Mr. COFFMAN. I am sorry. God bless you for trying, but we get 

that every time, every year. Every year, there are VA leaders that 

step before us to say, it is going to be different now, we are going 

to change now, the culture is going to change. We got—it is newer, 

bigger, better, and then the following year, we find out it is not, 

newer, bigger and better. And the same problems exist, if not deeper. So it is what it is, and I think you mitigate that by using things 

like a third party payer, you know. I think that arm’s length distance between them is positive. And I think make it work, because 

I certainly will not support expanding the VA bureaucratic footprint after the experiences we—I have observed being a Member of 

this Committee. Mr. Chairman, I yield back. 

The CHAIRMAN. Thank you very much. Mr. McNerney. 

Mr. MCNERNEY. I thank the Chairman, I thank the panel for 

having a welcome positive hearing today. The thing that I am concerned about is we have a plan to consolidate the purchase care 

programs. And maybe I missed your testimony earlier on that, but 

what sort of—what is the basis for believing that this is going to 

be a better provider than what we already have or what has already been tried in the past? Is there a statistical basis? Is there 

a model that you have seen that has made this transition? What 

makes you think that this is going to be a better program? 

Dr. YEHIA. So thank you. I think that is a great question. I think 

the goal here was that we have a number of these different programs, this patchwork of different community care programs. We 

want to move more towards a standard, what we are calling a high 

performing network. And so, we think this is good because this is 

where health care industries are moving. We have learned lessons 

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30 

from our Federal partners, such as DoD and TRICARE. And at the 

end of the day, we want to create that seamless connection to a 

complementary network in the community that veterans can access. And we are basing that on things that have been demonstrated well in the community, in the private sector. 

Mr. MCNERNEY. Has there been any coordination with the DoD 

in terms of transferring data or care information so that veterans 

that are recently out don’t have to go through the huge rigmaroles? 

Dr. YEHIA. Yeah, when we first started this effort, we worked 

very closely with our DoD partners. Again, recognizing them as 

having many similarities to VA, they operate TRICARE. And so, 

we sat down with them on multiple occasions to learn about lessons learned, best practices and we continued to work with them. 

The concept of them vetting some of our TPAs in our medical centers, that was something that TRICARE did. And so we are using 

a lot of those lessons learned from them. 

Mr. MCNERNEY. I mean, one of the biggest concerns we have is 

the transition between the DoD and the VA. I have often thought 

that we just need to have a czar that can tell people what to do 

instead of having bickering back and forth, but—so you are saying, 

hey, this is actually happening, we don’t need to have a big gun 

that is going to make this happen. Is that right? 

Dr. SHULKIN. Yes, that is correct. We are—DoD has been very integral in support of our move towards this type of new plan. And 

we have several oversight Committees that we jointly chair between DoD and VA, where this is a standing agenda item, we are 

working in between meetings, but also have oversight over this. 

And actually, I think, from my perspective, this is going in a very 

positive direction. 

Mr. GIBSON. I will tell you, we all spend a lot of time out in the 

field. There are countless examples of close collaborative work locally between VA facilities and DoD medical treatment facilities, 

where they are just doing amazing. I was in Charleston, South 

Carolina, Baligh and I both were down there last week. I went out 

to Goose Creek where we jointly operate a clinic with the Navy. 

And one of the things we were able to do is jointly fund the purchase of an MRI. What you find is you have got a DoD doctor, you 

have got VA med techs that are running the facility day in and day 

out. And on 2 days of the week, you will find DoD patients coming 

in; on 2 days of the week you will find VA patients coming in. 

It is that kind of close and collaborative relationship, and it is 

happening all over the country. The one other issue that gets at 

this VA-DoD collaboration that I sort of sense you are alluding to, 

has to do with the exchange of health information. And before you 

arrived, the Chairman has agreed to buy the chicken and biscuits 

for us and come over and do a demo for the Members of exactly 

how we are exchanging information today, day in and day out. 

Mr. MCNERNEY. That was going to be my next comment is how 

useful would it be for the Members of the Committee to actually 

see that. So Chairman, you are ahead of me. I congratulate late 

you. I yield back. 

The CHAIRMAN. Thank you. Mr. Huelskamp, you are recognized. 

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31 

MR. HUELSKAMP. Thank you, Mr. Chairman. I appreciate the 

gentleman for joining us here today some very exciting questions 

and comments. I have some follow-up I would like to ask. 

First, I did have a town hall in Colby, Kansas, which is way up 

in northwest Kansas. And a veteran was actually leaving that town 

hall, was going to drive to Aurora, Colorado, to pick up a hearing 

aid. That is 227 miles, one-way drive. Gentleman, there is a provider in Colby, Kansas, that you won’t approve. I mean, Choice is 

supposed to fix that. Telling him to drive that far for something he 

should drive two or three blocks is unacceptable. 

Mr. GIBSON. We agree completely. It shouldn’t happen. 

Mr. HUELSKAMP. It shouldn’t happen. And that is what we were 

hoping to fix. Couple of questions on that. But first, on the aspirational document, it certainly is aspirational, especially if you look 

at the cost. What is the 3-year cost, your estimate to implement 

this plan? 

Mr. GIBSON. As I pointed out in my opening statement, the essential costs that we are focused on right now is actually the cost 

of the consolidation itself. The much larger numbers have to do 

with anticipated, increased reliance. And the other module, if you 

will, which has to do with opening the aperture on access to emergency care and urgent care, which we believe is really—we are not 

serving veterans well today with the current statutory approach 

that we have to those aspects of care. 

Mr. HUELSKAMP. And I agree. By the way, you did pay that veteran to drive the 454 miles, that is just a minor savings, but he 

also did that same drive just to get the appointment. 

Mr. GIBSON. Let me make just one really quick comment, because we started working this over a year ago where we weren’t 

able to use audiologists in the communities because they weren’t 

able to access our advantageous contract for hearing aids. And 

what we have done is we have changed that. We fixed it so that 

now an audiologist in the community can actually access our advantageous contracts for purchase of hearing aids. This, what you 

are describing should—absolutely should not be happening. 

Mr. HUELSKAMP. Yeah, I agree. But on the budget, if I did the 

figures correctly in pulling the Choice out of that, which is another 

question, if I read correctly, it is about a $10 billion, 3-year cost 

for implementation moving forward on this plan, is that rough and 

ready figures? 

Mr. GIBSON. Again, what you are referring to are the costs associated with increased reliance, as well as the cost associated with 

opening the aperture. 

Mr. HUELSKAMP. Well, I just wanted to make sure, because— 

Mr. GIBSON. The critical issue, at this point, has to do with consolidating these seven or eight different programs into a single 

channel for community care that veterans and providers— 

Mr. HUELSKAMP. Oh, I understand the approach here, and I have 

some follow-up questions on that. But not even including the extension of Choice, I think I see the figures is 10 billion in 3 years, so 

if I am wrong on that, please confirm that. So it is certainly an aspirational document. There is not going to be $10 billion we are 

throwing out there for this. 

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32 

But one thing I want to ask strictly for the authors of the report, 

I mean, you only had 2 months to put this together. Can you lay 

this over top of the 4,000-page independent assessment that said 

we have a leadership crisis here? How are you going to fix—I think 

you have to fix the leadership crisis before you even talk about implementing this massive change. It is very big. So gentlemen, if you 

can provide some insight. 

Mr. DALPIAZ. Well, I think I will leave the leadership question 

to the Deputy. What we did with the independent assessment is we 

pulled out each one of the items that related to community care. 

So anything that looked like it would line up, with our proposal, 

we literally took word for word from a document, incorporated it 

and assured that we are covering it, and that it was sensitive to 

the independent assessments. The leadership part I will leave to 

others. 

Dr. SHULKIN. Yeah. Just very briefly, two quick things. The 

amount of money that we need to get this going to consolidate care 

in the community is $421 million. The other parts of it are things 

that— 

Mr. HUELSKAMP. That is not what is in the numbers. The incremental cost of implementing its consolidation plan, just one portion 

is $400 million to $800 million annually. That over 3 years is about 

$2 billion just for the incremental cost of implementation. So if you 

could clarify that for the Committee, I mean, these are your numbers. 

Dr. SHULKIN. Right, right. In fiscal year 2016, it will be $421 million incrementally. And those systems then would essentially carry 

into the future years. You are right. 

The emergency care that the Deputy referred to is, has a separate price tag that is decided upon. That could be decided not to 

proceed with, or that could be decided to proceed with, and the increased reliance has a separate price tag. That means when you 

make the system more useable, we think more veterans will come 

into the system. 

In terms of the leadership issue, you are absolutely correct, Congressman; this is our critical factor. We do not have a hope of implementing this plan without the correct leadership, and we are focused on getting leaders in to fill our medical center positions, our 

regional positions and our central positions, including finding a 

Deputy Under Secretary that will oversee plan who has the experience in managed care and population health to make this successful. 

Mr. HUELSKAMP. Is this the new Under Secretary position that 

you proposed to create? 

Dr. SHULKIN. We have submitted an organizational chart to you 

that this is a new position, because VA currently does not have this 

level of competency in a senior executive position who knows how 

to implement this plan. 

Mr. HUELSKAMP. Hopefully, we might have a second round, Mr. 

Chairman. I apologize. 

The CHAIRMAN. Ms. Brown. 

Ms. BROWN. Thank you, Mr. Chairman. First of all, let me just 

say that as far as the leadership team in front of me, I am imLeonard.horne on VACREP0180 with DISTILLER

33 

pressed. In particular, with the medical leadership with the graduate from the University of Florida. 

Now on for my questions. I understand that TRICARE had 2-1/ 

2 years for preparation before it rolled out its program. We had less 

than what, 2 months? If you had more time, I mean, we insisted 

that you roll it out in this time period, we put in some new rules 

and regulations, particular as pay to the providers. Can you give 

me some feedback on that? 

Mr. DALPIAZ. Having the opportunity now to look back on those 

60 days that someone had to write requirements, we learned a lot 

of lessons. One of which is, in the future, we probably wouldn’t contract out the customer service portion of what we do. We did that. 

And when we talk about the requirements for what a future network might look like, that really is coming from not only the lessons we learned in the last year, and last year and a half. It is 

really TRICARE lessons as well as you point out. 

So one of the requirements that you see are things that we envision in the future network based on our experience and things that 

we would have done much differently if we had more than 60 days 

to stand this up. 

Ms. BROWN. In the draft agreement legislation you submitted to 

the Subcommittee on Health, you discussed requiring providers to 

submit medical records to the VA. Will payments to the provider 

and return of records be linked? There has been a source of controversy for current providers under the Choice Program, and, of 

course, it is about timely payment. 

Dr. SHULKIN. Congresswoman, we recognize that the timely payment issue to our providers is a critical issue, because it could 

threaten access to veterans. And coming from the provider side, I 

am very sensitive to providing a service and not getting paid. So 

we are going to be encouraging two things of our providers. The 

reason why we don’t perform as well as we should on timely payments is because only 40 percent of our payments are received electronically, and the industry standard is above 95 percent. 

Secondly, we are adjudicating 100 percent of our claims when the 

industry standard is more like 5 percent. So we want to fix both 

of those and we are going to be reaching out to the providers. We 

saw the article recently about the Florida providers and the 

amount that is owed to them. We are going to be reaching out to 

them to ask them to send us their information electronically, and 

delink some of the requirements for medical record documentation. 

We do need to get the documentation back to provide good continuity of care, but we want to be providing prompt payment to our 

providers. 

Ms. BROWN. When we collapse the various programs and, you 

know, it has been a lot of discussion about the Choice Program and 

the program that we had in the community for years, but I think 

it is a difference in the payment, one program over another; what 

will this plan be for the future? 

Dr. YEHIA. So, that is exactly right. When we looked at all the 

different programs, they all had different eligibility criteria, different payment rates for providers, different rules that they have 

to sign up to work with us. So we are trying to move more towards 

a uniform standard approach. 

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I think as it relates to payment, we want to move towards industry standards, which, in many areas, is Medicare, and so those are 

the regional local Medicare rates. They take into account if you are 

living in a very rural area, or have a training program. And so this 

is our intention, is to move towards that standard payment, with 

the caveat being that in some locales, like Alaska or highly, highly 

rural areas, or certain specialties, we might have to go higher than 

the Medicare rate. But the standard we want to move to is towards 

Medicare. 

Ms. BROWN. Mr. Chairman, I yield back. Are we going to have 

a second round? 

The CHAIRMAN. Thank you very much. We are going to do a second round of questions, if I can. I may deviate just a little bit from 

the purpose of the hearing. 

But, Mr. Secretary, how much money remains in the Choice 

fund, and what is the current estimated time of depletion of the 

current funds? 

Mr. GIBSON. There is currently, in the 802 section of funds, about 

$6 billion roughly. And a rate at which we extinguish that will be 

very much a function of care in the community utilization during 

fiscal year 2016. 

The CHAIRMAN. Do you expect that it will be depleted by the end 

of fiscal year 2016? 

Mr. GIBSON. I think that there is a chance it could be. We have 

got about $9 billion in care in the community budget in our core 

budget for care in the community for 2016. And so, as you look at 

current run rates, we actually spent over 10 in 2015, but there was 

an awful lot of ramp-up that happened over the course of the year. 

So we could potentially find ourselves exhausting the remaining $6 

billion. But based on the numbers I see right now, I think it is less 

likely that we would. 

The CHAIRMAN. Okay. I asked the question because on a—in a 

hearing on the 25th of June, you stated, and I quote, ‘‘Referring to 

hepatitis C anti- and viral-infected veterans to the Choice Program 

is not the best model to provide care for taxpayers or veterans,’’ 

end quote. And we infused a large amount of money to help you 

with your capacity. You said you had the capacity internally to 

handle that. But I have been told now that VA has reduced new 

treatment starts to about 300 per week, and it is treating only 

those patients with advanced liver disease. So all the veterans that 

are seeking the hep C treatment are being pushed outside to 

Choice. And I want to know if that is a true statement. And if so, 

why has the guidance and the model from care from HCV changed 

from September? 

Mr. GIBSON. Yeah, first of all, we appreciate allocating the $500 

million that you did to allow us to pay for the pharmaceuticals. We 

did dramatically accelerate starts during that period of time and 

we are able to get—I am not going to remember the number off the 

top of my head—a very large number of veterans started before the 

end of year, expending somewhere over $400 million worth of the 

$500 million that was allocated. 

I suspect that part of what has happened there is that we 

cleaned out some of the pipeline. We basically had veterans that 

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35 

were in the queue to receive that care and that were eligible for 

the care, and that basically, we started getting them that care. 

I also know that the funds, budgeted funds for hep C in 2016 are 

substantially, very substantially less than what we had allocated 

and spent during 2015. And that does create a situation where we 

have got to ensure that we don’t get ahead of ourselves in terms 

of spending those funds. 

The CHAIRMAN. And if I might, Ms. Titus talked about a parochial issue, or Ms. Kuster, I think it was, a minute ago. I have one 

too, but I have a sneaking suspicion it is not just to the first Congressional district. I had a veteran come up to me at a ceremony 

on Saturday that said that he had been scheduled for a surgery at 

a VA facility, and he was called on the Tuesday of that week, and 

was told that VA didn’t have any money in order to perform that 

surgery, and that he would have to be put in the Choice Program 

which would delay his surgery. 

So my question, I guess, is twofold. Number one, why in the 

world would anything like this ever occur? And number two, it appears to me that there may be facilities that are protecting their 

internal funds by pushing folks out into Choice so that they will 

have those dollars to utilize them. This was an elderly veteran. We 

have since talked to him and gotten the laydown as to actually 

what was said. But can you explain why anybody would say VA 

had no money? 

Mr. GIBSON. Sure. Well, no, I can’t explain that. Please ask John 

to let me know—give me some particulars—I was looking for him, 

but I don’t see him—oh, there you are, had your head down—to 

give me some information on the particular veteran so that we can 

follow-up specifically and make sure that that veteran gets the care 

they need. 

Secondly, I cannot conceive of why we would say that we don’t 

have any money to perform that surgery inside VA. So that makes 

absolutely no sense to me. 

Third, I would tell you, as we look at October obligations, total 

obligations in October for care in the community exceeded $1 billion. Only $140 million of those were for Choice. I can’t imagine 

why we would be telling a veteran, you know, you have got to go 

outside for Choice instead of us providing that care inside, or either 

with another community provider. It makes no sense. 

The CHAIRMAN. Thank you. Ms. Brownley. 

Ms. BROWNLEY. I don’t have any further questions, but I just 

wanted to make a quick apology, because I made the common mistake in my earlier comments of calling TriWest, TRICARE. So I 

wanted to apologize to TriWest. I presume everybody understood 

what I was saying because nobody corrected me until my staff, 

after I finished, said I kept saying TRICARE instead of TriWest so 

I wanted to apologize. Thank you, Mr. Chairman. 

Mr. GIBSON. Thank you. I know Dave appreciates that. 

The CHAIRMAN. Mr. Huelskamp. 

Mr. HUELSKAMP. Hopefully they will be short here. If I might 

make a request following up on the gentleman that wrote the report. Would you go back and read the independent assessment and 

provide some direction compared to how you can implement the 

Under Secretary as well. Something in writing so I can wrap my 

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36 

arms around this. And appreciate the Chairman’s questions about 

the funds left in Choice. I wouldn’t want to run—run out of money 

with that at a very critical time. 2016 becomes—every 4 years, becomes kind of a silly season around here, and so I appreciate the 

reference to that. 

But to follow-up with the gentleman that talks about moving to 

the Medicare reimbursement rates, which is perfect. That is all my 

hospitals, and we have 70 of them are looking for, and the independent providers. Medicare audiology obviously doesn’t work well, 

different rate structure. But what bothers me is requiring these 

providers and dozens of hospitals to go through a different certification system. 

Why is the Medicare certification system, which has been around 

for decades and has its problems, but it is there, they are qualified 

for Medicare. And by the way, these hospitals serve more veterans 

than you all do, those that are outside the system. So explain why 

we just can’t use all the Medicare certification system, and save all 

the problems and move on? 

Dr. YEHIA. Well, I agree with you. I think what we want to do 

is move more towards that industry standard. I think two points 

there: One in terms of rates; and two, how we partner with providers. So the concept of provider agreements, again, going back to 

that. We have—a lot of that is based, and the word ‘‘provider’’ is 

based on Medicare. And so it is how we can simply partner with 

our community providers to be able to deliver care to veterans 

without going through a complicated contracting process. That is 

exactly what we are looking to do. 

And when we think of credentialing, the plan talks about moving 

to standardized credentialing that everybody else does. So we don’t 

want to require anything—we don’t want it to be burdensome for 

these critical community providers that we need to partner with to 

deliver care to veterans. 

Mr. HUELSKAMP. Currently, there is a separate credentialing 

process or just VA compared to Medicare? 

Dr. YEHIA. Currently, there is different credentialing rules for 

the different programs. So when the Choice Act was written into 

law, there was actually various credentials that we have to have 

in order to work with those providers. The Committee was able to 

expand some of those eligibilities to include, like, Medicare payments and—or Medicare providers and others. So some of those 

were Medicaid providers and others. So some of those have been, 

are in statute or regulation. So if we are looking toward moving towards that standard, we might need your help to change some of 

these laws so that they are consistent with those standards. 

Mr. HUELSKAMP. I don’t remember those restrictions being in 

there. That was my outcome. That would save us all some time, 

trouble, and money, and folks driving 227 or 400 miles. That is 

what we are aiming at, so I appreciate your recognition of that. So 

I have—again, 70 community hospitals could tell you, we have already credentialed and the payment agreement is—understood. I 

mean, if you can tie into the Medicare rates, I think you solved 

about 50 percent of the problems for these providers and for their 

veterans. So I appreciate that, and appreciate the response. And if 

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37 

you put this in writing as well, so I can understand that, Mr. 

Chairman. So thank you for the time. 

The CHAIRMAN. Ms. Brown, do you have any further questions? 

Ms. BROWN. Just a comment. With the change of the presidential 

administration in 18 months, and the turnover of higher level employees in the VA, are you concerned about starting the consolidation program, and then having it stall? And just, I have been listening to some of the candidates speak and they clearly don’t have 

any understanding about VA’s operation, and, I mean, comments 

candidates make, someone has been in an emergency room waiting 

to be seen for 8 hours. Bull. So can you respond to that? 

Mr. GIBSON. I certainly—I would love to. And I would tell you 

two different thoughts here: Number 1, what we are trying to do 

is to lay out a path that has been developed collaboratively with 

Congress, with VSOs, with the provider community, so that this 

winds up being something of an inexorable direction that we want 

to head for care in the community. 

The second thing that it would offer up, I think one of the vital 

roles that this Committee can play is helping to ensure some continuity of effort across the administrations. So as we work together 

on developing some of these solutions, having this Committee, and 

all of Congress frankly, Senate Subcommittees, as a collaborative 

partner in this process, it gives you an investment in the direction 

that we are taking so that there is some expectation that that continues in the future administration. 

Ms. BROWN. I agree 100 percent. This Committee that I’ve been 

on for 23 years, has always been very bipartisan. I mean, when 

veterans go to fight, no one asks them what party, you know, Democrat, Republican, or Independent. And, of course, I think that Congress, you know, for many years, we did not adequately fund the 

VA. And I am glad that we are now soldiering up. I like that word. 

I learned it last week, and I am using it. And we need to do our 

part. So any final comments? 

Mr. GIBSON. We are trying to do our best to soldier up too. Okay? 

Ms. BROWN. Mr. Chairman, I yield back. 

The CHAIRMAN. Thank you, Ms. Brown, very much. Thank you 

to the witnesses for being here today. We appreciate the effort that 

you are putting into this consolidation program. We know it is 

moving in the right direction. There are many, many moving parts. 

We will have more questions, I am sure, as the process continues 

on. But I would ask unanimous consent that all Members would 

have 5 legislative days with which to revise and extend their remarks, and add any extraneous material. Without objection, so ordered. With that, this hearing is adjourned. 

[Whereupon, at 12:31 p.m., the Committee was adjourned.] 

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A P P E N D I X 

Prepared Statement of Chairman Miller 

Thank you all for joining us for today’s oversight hearing entitled, ‘‘Choice Consolidation: Assessing VA’s Plan to Improve Care in the Community.’’ 

In late July, Congress authorized the Department of Veterans Affairs (VA) to use 

a substantial portion of the Choice program funds to cover the Veterans Health Administration’s multi-billion dollar budget shortfall. 

In turn, VA was required to submit a plan to the Committee detailing how VA 

would consolidate and improve the many fractured programs and authorities that 

the Department currently uses to refer veterans to non-VA providers. 

We are here today so that VA can present this plan to the Committee and, together, we can measure its merits and challenges. 

Non-VA care - or, Care in the Community, as VA now calls it - is an increasingly 

vital component of the VA health care system. 

Each month, veterans, survivors, and certain dependents of veterans receive approximately one million appointments - more than twenty percent of all the appointments VA provides - from doctors and nurses and other health care professionals 

in community hospitals and clinics outside of the Department’s walls. 

Allowing veterans to see these providers is vital to ensuring timely and convenient access to care. 

And, I suspect that, as the veteran population continues to grow in both age and 

number and as the health care landscape continues to shift, the need for non-VA 

providers to supplement - and please note that I said supplement, not supplant - 

the care that VA provides in-house will only continue to grow. 

But, the success of VA’s Care in the Community program is hampered by inconsistent and competing eligibility requirements, business processes, and reimbursement rates across the seven methods that VA currently uses to refer veterans to 

outside providers. 

As a result, non-VA care as we know it today has become unmanageable and 

unsustainable. 

The success of the VA health care system over the next several years will depend 

in large part on VA’s ability to consolidate these seven disparate methods into a single, coordinated program that is easy for veterans and community providers to understand and buy into and easy for VA employees to administer and manage. 

This is no easy task. 

It will require us to have some difficult conversations about the purpose of the 

VA health care system and what it should and feasibly can achieve. 

It will also require us to examine VA’s massive physical footprint and make decisions about the future of facilities that once served a great purpose but may no 

longer be benefiting our veterans as they should. 

The plan that the Department submitted in late October to accomplish non-VA 

care consolidation and take the first steps toward building the VA healthcare system of tomorrow offers a promising but still poorly defined vision of a future ideal 

state of VA care that offers little in the way of concrete details, timelines, or goalposts - leaving us blind as to how VA intends to get from where we are now to 

where we all know VA needs go next. 

I am hopeful that the testimony and responses that we will hear this morning 

will shed some much-needed light on how VA intends to transform the fractured collection of non-VA programs and authorities that we have today into the coordinated 

system of care that our veterans truly deserve. 

I am grateful to the Deputy Secretary, the Under Secretary for Health, and the 

two leaders of VA’s consolidation effort for being here this morning to present the 

Department’s proposal and I now recognize Ranking Member Brown for any opening 

statement she might have. 

f 

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Prepared Statement of Honorable Sloan Gibson 

Good morning, Chairman Miller, Ranking Member Brown, 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 PL 

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 

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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 towards 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 decision making 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: 

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• 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 

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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. 

Æ 

Leonard.horne on VACREP0180 with DISTILLER