Estimating Non-VA Costs

Mark Smith &

Todd H. Wagner

April 2009

I’d like to acknowledge Aman Bhandari for his leading role in this project.  

Aman was the first HERC RA.  He is now a PhD student at Berkeley.

Please let me know if you have questions during the talk.

Learning Objective
        - It is common for veterans to use non-VA providers. At the end of the class, you will know the pros and cons of different methods

Non-VA Use is Common
        - According to 1999 survey data, 73% of VA enrollees have alternative coverage

53% have Medicare

19% private without Medicare

1% Medicaid without Medicare or private
        - Among VA enrollees 

Approximately 4 in 10 used VA exclusively

Two-thirds expect to use VA for primary care in the future

Shen Y et al. (2003) VHA Enrollees’ Health Care Coverage and Use of Care.  Medical Care Research and Review.  60(2) 253-267

Different Methods for Assessing Non-VA Utilization
        - Fee Basis
        - Sharing Agreements
        - Self-report

Overview of Fee Basis Program
        - Pays for care at non-VA facilities when

it is the only source available, or 

VA could save money
        - Full range of services covered
        - Mostly pre-arranged; limited emergent care
        - Excludes care through “sharing agreements” with affiliated universities and others
        - Totals roughly over $2B in FY2008

Names of Fee Basis Files - I
        - Clinical files

Hospital stay

Ancillary services provided to inpatients

Outpatient services

Payments to pharmacies
        - Non-clinical files

Travel expenses

Pharmacy vendor file

Other vendors file

Veterans with FEE cards (long-term users)

Highlights of Clinical Data
        - Outpatient: 

Date of service

1 CPT procedure code
        - Inpatient:

Start and end dates of treatment 

Up to 5 surgery codes

Up to 5 ICD-9 diagnosis codes (*no decimal*)

Highlights of Financial Data
        - Amount claimed
        - Amount paid 
        - Many variable relating to FMS record-keeping: invoice date, processing date, check number, check date, cancel code, etc.

Highlights of Vendor Data
        - Vendor ID
        - Address  (city, state, zip)
        - Related VA station number
        - Payment totals by month

Notes on Fee Basis Data
        - Each row of data represents a service provided
        - Multiple services may be paid by a single VA check; see EFTNO (electronic funds transfer no.  ~= check no.) and CHKDAT (check date)
        - There is repetition across variables: state appears twice, some dates appear in both Julian and SAS formats
        - Blank fields are common!

Using Fee Basis Files: Cautions
        - Beware of missing decimal places

ICD diagnosis codes

Payment amounts (see next slide) 
        - New Purpose of Visit (POV) codes are added over time, so be careful about searching for new codes in old files
        - Care in community nursing homes, state veterans homes, and some non-VA hospitals is also recorded in other files

Using Fee Basis Files: Cautions
        - The four claims files represents claims paid during the fiscal year – not services performed during the fiscal year.
        - Claims may be paid up to two years after the service, and in practice it sometimes goes beyond then.

Using Fee Basis Files: Cautions
        - To find all claims for a Fee Basis inpatient stay in June, 2006, search in the FY2006, FY2007, and FY2008 files.  Search by service date and person ID.  
        - Inpatients sometimes transfer directly from one provider (vendor) to another.  Watch for contiguous inpatient stays at 2+ vendors.

HERC Technical Report
        - HERC Technical Report #18 is a guidebook for using Fee Basis data.  It can be downloaded from the HERC intranet web site.

Questions on Fee Basis Files?

Sharing Agreements

Definition and Scope
        - VA medical centers may contract for clinical and related services with affiliated medical schools, faculty groups, hospitals, and other providers. 
        - These contracts are also called sharing agreements.  

Definition and Scope
        - Sharing agreements are contracts with non-VA providers to offer selected types of care, usually to many patients, over a period of time.  
        - Unlike much Fee Basis care they do not center on an individual patient and are not subject to similar coverage limitations.   

Reasons for Sharing Agreements

1. A VA facility cannot provide needed care and the patient cannot be transferred to another VA 

2. A VA facility cannot recruit a needed clinician

3. Only a portion of a clinician’s time is needed 

Reasons for Sharing Agreements

4. To reach market-rate pay for certain highly paid subspecialists 

5. When it is cost-effective to share a service or space with another entity rather than to develop stand-alone capacity for VA

Types of Care
        - Specialty services:  anesthesiology, cardiology, neurosurgery, ophthalmology, orthopedic surgery,  radiology
        - Other services: space rental, animal care and use, prescription drug storage, laundry, antenna leasing,  athletic facilities

Payment
        - Sharing agreements can be paid in three ways:

a portion of full-time-equivalent (FTE) employment 

negotiated fees for specific procedures 

per Medicare relative value unit (RVU) for the care provided
        - Services are valued based on local and regional market analyses
        - Payments may exceed Medicare rates depending on prevailing market rates

Other Details
        - About half of all VA medical centers have sharing agreements, typically 2-4 per year.  
        - The total estimated value of the contracts exceeded $64,000,000 in FY2008.  
        - An annual tabulation of all contracts is maintained by the Medical Sharing branch of the Procurement and Logistics office in Washington.

Records
        - Care purchased from DoD is supposed to be channeled through the Fee Basis system.  Actual reporting is uneven – some care is being missed.
        - There is an ongoing project to improve the VISTA FEE package and the IPAC payment system.  The changes are intended to fully capture workload and cost of care provided by DoD to VA enrollees.  
        - HERC is currently investigating records of non-DoD sharing care.  Watch for a new FAQ response on our web site.

Questions on Sharing Agreements?

Self-Report

Collecting Health Care Utilization
        - Costly and time consuming
        - No gold standard method
        - Administrative data are incomplete / inaccurate

Limited benefits

Out-of-plan or out-of-pocket utilization

Capitated health plans

As most of us know, collecting, cleaning and analyzing health care utilization can be extremely costly and time consuming.

VA researchers are somewhat blessed because of the many standards that pervade the system.  I once collaborated with researchers at OHSU who were working with claims data from 5 or 6 major insurers over multiple years.  What a chore.

I’d also like to dispel the myth that administrative records exist.  No one system is complete.

At this time, there is no gold standard.  

Poll
        - During the past 12 months, how many times have you seen a doctor or other health care professional about your own health at a doctor's office, a clinic, or some other place?  Do not include times you were hospitalized overnight, visits to hospital emergency rooms, home visits, or telephone calls.
        - Responses

		0

		1

		2

		3

		4

		5

		6

		7+  

What is Self-Report
        - Cognitive process of recalling information

A. Bhandari and T. Wagner, "Self-reported utilization of health care services: improving measurement and accuracy," Medical Care Research and Review 63, no. 2 (2006): 217-235.

Fixed Attributes
        - Process influenced by illnesses or disabilities (e.g., dementia or mental retardation)
        - Older age is consistently correlated with poorer recall accuracy (spurious correlation)

Older adults more likely to under-report.

Recommendations
        - Are respondents able to self-report?

Consider age and cognitive capacity

14 is lower limit

Use cognitive screening tool, such as MMSE

Recall Timeframe and Frequency
        - Time Frame

Longer recall times result in worse accuracy

Longer timeframes lead to telescoping and memory decay
        - Frequency

Under-reporting is exacerbated with increased utilization

As the number of visits increase, people forget some

Recommendations
        - Avoid recall timeframes greater than 12 months
        - Shorter recall may be necessary for

Office visits (low salience)

Frequent users
        - Consider two-timeframe method (i.e., 6-2)

Questionnaire Design

“How many times have you seen a physician in the past 6 months?”

What is a “time?” What about multiple times on same day?

What is a physician? Does a nurse count?

Is “seen” literal?  What about a phone consultation with prescription?

What about care for someone else?

Design: wording
        - Recall order

Chronological: go back a year and think forward

Reverse chronological: supposition: later events are the easiest to recall and helps recall previous events

Free recall
        - Data are inconclusive; unclear whether this varies by gender or culture

Data Collection
        - Modes: mail, telephone, Internet, and in-person data

No study has compared all four

Probing with memory aids can help improve accuracy

Stigma is important

Recommendations
        - No standards exist and standards may not be possible
        - Pretest: Dillman (2000)
        - Placement in questionnaire might matter
        - Phone, in person and some Internet surveys allow for memory aids

For example, landmark events

Response Scale
        - Use counts

Include “your best estimate is fine” 
        - Avoid categories, which introduce biases and error in the statistical analysis

0, 1-2, 3-5, 6+ 

Costs
        - Self-reported costs are assumed poor
        - Imputing costs from self-reports can introduce biases
        - Analyze visits, not just costs

Questions