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S. HRG. 114–274 

EXPLORING THE IMPLEMENTATION AND FUTURE 

OF THE VETERANS CHOICE PROGRAM 

HEARING 

BEFORE THE

COMMITTEE ON VETERANS’ AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

MAY 12, 2015 

Printed for the use of the Committee on Veterans’ Affairs 

( 

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

(II) 

COMMITTEE ON VETERANS’ AFFAIRS 

JOHNNY ISAKSON, Georgia, Chairman 

JERRY MORAN, Kansas 

JOHN BOOZMAN, Arkansas 

DEAN HELLER, Nevada 

BILL CASSIDY, Louisiana 

MIKE ROUNDS, South Dakota 

THOM TILLIS, North Carolina 

DAN SULLIVAN, Alaska 

RICHARD BLUMENTHAL, Connecticut, Ranking 

Member 

PATTY MURRAY, Washington 

BERNARD SANDERS, (I) Vermont 

SHERROD BROWN, Ohio 

JON TESTER, Montana 

MAZIE K. HIRONO, Hawaii 

JOE MANCHIN III, West Virginia 

TOM BOWMAN, Staff Director 

JOHN KRUSE, Democratic Staff Director 

(III) 

C O N T E N T S 

MAY 12, 2015 

SENATORS 

Page 

Isakson, Hon. Johnny, Chairman, U.S. Senator from Georgia ............................ 1 

Blumenthal, Hon. Richard, Ranking Member, U.S. Senator from Connecticut ... 3 

Moran, Hon. Jerry, U.S. Senator from Kansas ..................................................... 33 

Sanders, Hon. Bernard, U.S. Senator from Vermont ........................................... 35 

Rounds, Hon. Mike, U.S. Senator from South Dakota ......................................... 37 

Manchin, Hon. Joe, U.S. Senator from West Virginia .......................................... 39 

Tillis, Hon. Thom, U.S. Senator from North Carolina .......................................... 45 

Hirono, Hon. Mazie, U.S. Senator from Hawaii .................................................... 47 

Boozman, Hon. John, U.S. Senator from Arkansas .............................................. 52 

Tester, Hon. Jon, U.S. Senator from Montana ...................................................... 53 

WITNESSES 

Gibson, Hon. Sloan, Deputy Secretary, U.S. Department of Veterans Affairs; 

accompanied by James Tuchschmidt, M.D., Acting Principal Deputy Under 

Secretary for Health ............................................................................................ 5 

Prepared statement .......................................................................................... 7 

Response to requests arising during the hearing by: 

Hon. Joe Manchin ......................................................................................... 39,42 

Hon. Mazie Hirono ........................................................................................ 49 

Response to posthearing questions submitted by: 

Hon. Patty Murray ........................................................................................ 56 

Hon. Bill Cassidy .......................................................................................... 57 

McIntyre, David J., Jr., President and Chief Executive Officer, TriWest 

Healthcare Alliance .............................................................................................. 12 

Prepared statement .......................................................................................... 14 

Response to posthearing questions submitted by: 

Hon. Patty Murray ........................................................................................ 58 

Hon. Bill Cassidy .......................................................................................... 59 

Hoffmeier, Donna, Vice President and Program Officer, VA Services, Health 

Net Federal Services ............................................................................................ 22 

Prepared statement .......................................................................................... 24 

Response to posthearing questions submitted by Hon. Patty Murray ......... 60 

Butler, Roscoe G., Deputy Director, Health Care, Veterans Affairs and Rehabilitation Division, The American Legion .......................................................... 60 

Prepared statement .......................................................................................... 62 

Selnick, Darin, Senior Veterans Affairs Advisor, Concerned Veterans for 

America (CVA) ...................................................................................................... 65 

Prepared statement .......................................................................................... 67 

Violante, Joseph A., National Legislative Director, Disabled American Veterans (DAV) .......................................................................................................... 70 

Prepared statement .......................................................................................... 71 

Rausch, Bill, Political Director, Iraq and Afghanistan Veterans of America 

(IAVA) ................................................................................................................... 77 

Prepared statement .......................................................................................... 79 

Fuentes, Carlos, Senior Legislative Associate, National Legislative Service, 

Veterans of Foreign Wars of the United States (VFW) .................................... 80 

Prepared statement .......................................................................................... 82 

Page

IV 

APPENDIX 

Murray, Hon. Patty, U.S. Senator from Washington; prepared statement ........ 93 

Second Report on Veterans Choice Program Submitted by the Veterans of 

Foreign Wars of the United States (VFW); report ............................................ 94 

(1) 

EXPLORING THE IMPLEMENTATION AND 

FUTURE OF THE VETERANS CHOICE 

PROGRAM 

TUESDAY, MAY 12, 2015 

U.S. SENATE, 

COMMITTEE ON VETERANS’ AFFAIRS, 

Washington, DC. 

The Committee met, pursuant to notice, at 2:45 p.m., in room 

418, Russell Senate Office Building, Hon. Johnny Isakson, Chairman of the Committee, presiding. 

Present: Senators Isakson, Moran, Boozman, Cassidy, Rounds, 

Tillis, Blumenthal, Sanders, Tester, Hirono, and Manchin. 

OPENING STATEMENT OF HON. JOHNNY ISAKSON, CHAIRMAN, 

U.S. SENATOR FROM GEORGIA 

Chairman ISAKSON. I call the Committee to order. We have a 

vote on the floor which should be over in the next 10 minutes. I 

passed Ranking Member Blumenthal going in as I was leaving. He 

supposedly is on the way, so I will talk a little bit and tell you 

what I want you to know by the opening statement. If he is not 

here, I want to start with the testimony from Deputy Secretary 

Sloan Gibson. If he is here, we will hear from the Ranking Member. Is that fair enough? Is that OK? 

[Sen. Blumenthal’s staff nodding affirmatively.] 

Make a note that his staff said that was OK. [Laughter.] 

I hate to get people in trouble. 

I want to take a little extra time on this, anyway, because this 

is a very important hearing for the VA and it is a very important 

hearing for us. 

Last year, culminating in August with the passage of the Veterans Choice bill in the U.S. House and Senate, the VA—every 

morning I got up, it was bad news: veterans dying in Phoenix, 

problems in Raleigh, problems in Denver, problems in Orlando, and 

answers that were incomplete at best—for understandable reasons, 

because an awful lot of the personnel at the VA were new. 

I am the first person to recognize that Robert McDonald had just 

gotten there. I am the first person to recognize that Deputy Secretary Petzel just had left VA. Secretary Shinseki was gone as well, 

so there was a transition. 

But, to my way of thinking, there is no excuse for the plethora 

of problems the VA was having, and the transition should have 

been much better but was not. 

2 

The VA demonstrated to me in the last hearing we had on Veterans Choice that they finally were listening. All I was hearing on 

the 40-mile rule in terms of as-the-crow-flies versus how far the car 

drives was nothing but stonewalls until finally Sloan walked into 

that hearing, reached in his pocket, and pulled out a new ruling 

on the 40-mile rule to make the number of miles driven be the governing factor. I think everybody on this Committee appreciated and 

agreed with and was happy that VA found a way to do it. I believe 

we are satisfactorily working toward ‘‘the care you need’’ definition 

being defined statutorily in such a way to make that change, which 

will not happen today but will happen in the very near future. I 

want to commend Deputy Secretary Gibson, Secretary McDonald, 

and the others for the work they have done on that. 

To the VSOs who are in the room, I know some of you do not 

like the Veterans Choice bill because they fear it will be a replacement for the Veterans Administration. We are not going to replace 

the Veterans Administration. It will always be there. But you can 

empower the Veterans Administration, you can empower the veteran by seeing to it they have access to world-class care, in close 

proximity to where they live, in an affordable amount and a manageable amount, whether it is from the private sector or whether 

it is from the Government. 

In fact, if anything—and this is going to sound harsh, and it 

should sound harsh—the VA has demonstrated it cannot build a 

hospital by running over 100 percent, 200 percent, 300 percent, or 

400 percent. Every time we can have private sector help given to 

veterans without having to build a hospital to put the people in, 

it is saving the VA money, it is saving the United States money, 

and it is giving the veterans far better services. 

What we need is a partnership between the private sector and 

the Veterans Administration to deliver the ultimate goal, which is 

to see to it that our veterans get world-class health care and they 

get it in a timely way. That is my only goal. However we do that, 

the most important way to do it is to get it done. I think Veterans 

Choice is the way to do it. 

Now, we have had some bumps since Veterans Choice was rolled 

out. We have had some bumps. I have met with some of our private 

contractors, and, by the way, I appreciated those meetings and 

their confidence in the job that we can do. I appreciate the fact that 

VA is now cooperating I think in ways that it might not have been 

cooperating before to see to it the two are working seamlessly. If 

they cannot work seamlessly, it will never work. 

The private contractors have to understand their contracts are 

not just subject to their performance for the veteran, but also their 

willingness to work cooperatively with the VA. The VA needs to understand that the veteran’s health care drives the decision and 

nothing else. 

There are some in VA health care who do not like the non-VA 

health care provisions anyway. I understand that. But they are 

going to have to get used to it, because we are going to make this 

thing work. We are not going to put a square peg in a round hole. 

We are going to match the round peg with the round hole and 

make this work for our veterans. 

3 

Today’s hearing is important to hear a report from the VA and 

the contractors and then later from the VSOs, understanding that 

as we talk today, remember, the first person we are here to serve 

is our veteran. They risk their lives for each and every one of us 

to be here today. We can expect no less of ourselves to see to it 

they get the best world-class health care as accessible and affordable as possible from our country and the taxpayer. 

With that said, I will turn to the Ranking Member, Senator 

Blumenthal. 

STATEMENT OF HON. RICHARD BLUMENTHAL, RANKING 

MEMBER, U.S. SENATOR FROM CONNECTICUT 

Senator BLUMENTHAL. Thank you, Mr. Chairman, and thank you 

for having this hearing. Thank you to each of you for being here 

today. 

We went through a terrible tragedy and debacle not long ago 

that prompted the Veterans Access, Choice, and Accountability Act, 

which sought to relieve some of the problems and underlying 

issues, including deceit and fraud, that caused delays and misreporting within the VA system. 

The discussion today is centered on the remaining flaws and 

failings in the VA health care program, particularly the Veterans 

Choice Program. As much as this program was established to deal 

with the immediate crisis of access to care in the short term with 

an investment of $10 billion to provide direct care services in the 

community and $5 billion to provide the Choice Program, there is 

still a lot to be done. 

The program was just a downpayment, just a first step, and I believe that it has to be improved even further. There remains, for 

example, underutilization of the Choice Program. The reasons for 

it have yet to be determined or discovered. The underutilization 

may well be the result of a failure to sufficiently publicize or make 

veterans aware. It may be the result of other more fundamental 

issues within the program, and I share the Chairman’s view that 

changing the 40-mile rule was certainly a welcome step. 

The most important fact that brings us here today—and we cannot lose sight of it—is that we still have not solved the crisis that 

led to this program. Veterans still wait too long for health care. 

Health care delayed, in effect, is health care denied for veterans 

who suffer from health conditions that require immediate 

treatment. 

The VA’s most recent data release of May 1 indicates that wait 

list numbers have increased significantly since the same time last 

month. In its an April 2 release, 377,300 veterans had appointments scheduled in more than 30 days from the preferred date. As 

of the May 1st release, that number had jumped by approximately 

56,000 to nearly 434,000. 

Anybody who believes that this crisis has been solved is living 

in an alternate universe. It is not the universe that our veterans 

inhabit. 

These delays have real-life consequences. They cannot be tolerated. Too many veterans are still waiting too long for appointments, and I am glad that the VA is finally going out to the facilities with long wait times trying to determine why exactly they are 

4 

not utilizing non-VA care options. I notice that a lot of the testimony today talks about further changes to the geographic criteria. 

Every time there is an additional change to the 40-mile criteria, 

more of the $10 billion allocated for the Choice Program will be devoted to paying for access. This money is owed to our veterans because better health care is due them. 

I will close on this note. We still do not have accountability for 

the delays. The Inspector General still has not completed his work. 

We still have no reports on action, and I mean effective disciplinary 

action for the delays that were intolerable and still are unacceptable. Accountability is absolutely necessary, and I believe that the 

Inspector General needs more resources to effectively implement 

accountability. I will continue to press for the reports and for action by the Inspector General that will send a message to the 

health care apparatus and professionals in the VA that we really 

mean what we say when ‘‘accountability’’ is our watch word. 

Thank you, Mr. Chairman. 

Chairman ISAKSON. Thank you, Senator Blumenthal. 

Our first panel will be made up of the following individuals: 

First of all, Hon. Sloan Gibson. We have become new best friends 

over the last 4 or 5 months, and I want to thank him publicly in 

this introduction for his willingness to take on some tough situations. He inherited some tough situations, and I appreciate the fact 

that he is approaching them in a very positive way. We have got 

a few more tough ones coming up, so I hope you will maintain that 

attitude all the way through. I am very appreciative of the cooperation. 

To reiterate for those who are present, including the press, Secretary McDonald and Deputiy Secretary Gibson invited the Ranking Member, myself, the House Ranking Member, and the House 

Chairman to the VA for what they call a ‘‘standup,’’ which was in 

February. We have been invited to come back in June, and I believe the invite is for the entire Committee if they want to come. 

I think I heard that this morning, so, as many Members who want 

to go, I want to make sure they are invited to see the way in which 

the VA is benchmarking itself against itself, so to speak, to try and 

find better ways to do things and flush out the problems in advance and get them solved earlier. We are looking forward to doing 

that, and we have got some big problems to solve in the next few 

months, which will be a testimony or a test, one way or another, 

to our willingness to work together. 

Dr. Tuchschmidt, we appreciate you being here to assist Sloan in 

any way he needs. I am sure if he gets a tough question, he will 

defer to you, so we appreciate you being here very much. 

To our private providers: Mr. McIntyre, I enjoyed our meeting 

earlier this week. I appreciate the insights that you gave me. Ms. 

Hoffmeier, I appreciate your being here today. We look forward to 

hearing first from Sloan Gibson. 

5 

STATEMENT OF HON. SLOAN GIBSON, DEPUTY SECRETARY, 

U.S. DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED 

BY JAMES TUCHSCHMIDT, M.D., ACTING PRINCIPAL DEPUTY 

UNDER SECRETARY FOR HEALTH 

Mr. GIBSON. Thank you, Mr. Chairman. Chairman Isakson, 

Ranking Member Blumenthal, and Members of the Committee, we 

are committed to making the Choice Program work and to providing veterans timely and geographically accessible quality care, 

using care in the community whenever necessary. I will talk shortly about what we are doing and the help that we need from Congress to make all that happen. First I want to talk very briefly 

about access to care. 

Most mornings at 9 a.m. for the last year, senior leaders from 

across the Department gather to focus on improving veterans’ access to care. We have concentrated on key drivers of access, including increasing medical center staffing by 11,000, adding space, 

boosting care during extended hours and weekends by 10 percent, 

and increasing staff productivity. The result: 2.5 million more completed appointments inside VA this year than last. Relative value 

units, a common measure of care delivered across—used to measure care delivered across the industry are also up 9 percent. 

Another focus area for us in improving access has been increasing the use of care in the community. In 2014, VA issued 2.1 million authorizations for care in the community, which resulted in 

more than 16 million appointments completed. Year to date in 

2015, authorizations are up 44 percent, which will result in millions of additional appointments for community care. 

Veterans are responding to this improved access. More are enrolling for care at VA. Among those who are enrolled, more are actually using VA for care, and those using VA are increasing their 

reliance on VA care. This is especially the case where we have been 

investing most heavily due to long wait times. 

In Phoenix, for example, where we have added hundreds of additional staff, we have increased completed appointments 20 percent 

this year. I should also note that we have increased care in the 

community 127 percent in Phoenix over the last year, largely due 

to the extraordinary effort of TriWest in that particular 

community. 

However, wait times are not down. Wait times are not down in 

Phoenix because of the surge in additional veterans coming to VA 

for care plus the veterans that are there asking for more care from 

VA. 

In Las Vegas, we have got a 17-percent increase in veterans receiving care since we opened the new medical center there less 

than 2 years ago. 

In Denver, we have opened outpatient clinics and added more 

than 500 additional staff. Veterans using VA for care there are up 

9 percent. 

In Fayetteville, NC, where wait times continue to be a problem, 

we have increased appointments 13 percent, relative value units up 

19 percent, and veterans using VA for care are up 10 percent. 

In all of these locations, we have had dramatic increases in care 

in the community. 

6 

As Secretary McDonald has testified during budget hearings, the 

primary reason for increasing demand are an aging veteran population, increases in the number of medical conditions veterans 

claim, and a rise in the degree of disability, and as we can see here, 

improving access to care. 

As I mentioned at the outset, community care is critical for improving access. We use it and have for years in programs other 

than Choice. In fiscal year 2013, we spent approximately $7.9 billion on community care other than Choice. In 2014, that rose to 

$8.5 billion, and we estimate that at the current rate of growth, VA 

will spend $9.9 billion, including Choice, a 25-percent increase in 

care in the community in just 2 years. 

At the same time, we have had a large increase in care in the 

community, but Choice is not working as intended. Here are some 

things we are doing to fix it. 

On April 24, we changed the measure from straight line to driving distance using the fastest route. This roughly doubles the number of veterans eligible for the 40-mile program under Choice. 

There is much more to do. A follow-on mailing to all eligible veterans is about to go out. We have just launched a major change in 

internal processes to make Choice the default option for care in the 

community: additional staff training and communication, extensive 

provider communications, improvement to the Web site and 

ramped-up social networking, new mechanisms to gather timely 

feedback directly from both veterans as well as from front-line 

staff. These are all already in place or about to launch. 

In the longer term, we must rationalize community care into a 

single channel. The different programs with different rules and reimbursement rates, methods of payment, and funding routes are 

too complicated. They are too complicated for veterans, for providers, and for VA employees who coordinate care. I am confident 

we will need your help on that. 

Next, let me touch on the other 40-mile issue. We have completed in-depth analysis using patient-level data to estimate the 

cost of a legislative change to provide Choice to all veterans more 

than 40 miles from where they can get the care they need. We have 

shared that analysis with some Members of the Committee, with 

staff, and with the CBO. It confirms the extraordinary cost that 

had been estimated previously. 

We have also briefed the staff on a broad range of other options 

and believe there are one or more options worthy of discussion and 

careful consideration. 

While we are working together on an intermediate-term solution, 

we are requesting Congress grant VA greater flexibility to expand 

the hardship criteria in Choice beyond just geographic barriers. 

This authority would allow us to mitigate the impact of distance 

and other hardships for many veterans. 

We also request greater flexibility around some requirements 

that preclude us from using Choice for services such as obstetrics, 

dentistry, and long-term care. 

As described above, we accelerated access to care in the community this year, anticipating that a substantial portion would be 

funded through Choice. For various reasons, most touched on previously, we will be unable to sustain that pace without greater proVerDate Mar 15 2010 18:29 Jun 30, 2016 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 Z:\ACTIVE\051215.TXT PAULIN
7 

gram flexibility and flexibility to utilize at least some portion of 

Choice Program funds to cover the cost of other care in the community. We are requesting some measure of funding flexibility to support this care for veterans. 

On May 1, VA sent to Congress a legislative proposal providing 

major improvements to VA’s authority to use provider agreements 

for the purchase of community care. We request your support. 

Last, we are requesting flexibility in one other area of veteran 

care: hepatitis C treatment. You are all familiar with the miraculous impact of this new generation of drugs. Veterans that have 

been hepatitis C positive for years now have a cure within reach, 

with minimal side effects. Because of the newness of these drugs, 

there was no funding provided in our 2015 budget request or appropriation. We moved $688 million from care in the community, 

anticipating the shift in cost to Choice, to fund treatment for veterans with these new drugs. It was the right thing to do, but it was 

not enough. We are requesting flexibility to use a limited amount 

of Choice Program dollars to make this cure available to veterans 

between now and the end of the fiscal year. 

We are improving access to care, notwithstanding the reported 

wait times that you see. That means we have still got work to do 

on wait times, but we are improving access to care. 

We are committed to making Choice work and have very specific 

actions underway to do just that, and we need some help, especially additional flexibility to allow us to meet the health care 

needs of our veterans. 

We look forward to your questions. 

[The prepared statement of Mr. Gibson follows:] 

PREPARED STATEMENT OF HON. SLOAN GIBSON, DEPUTY SECRETARY, 

U.S. DEPARTMENT OF VETERANS AFFAIRS

Good afternoon. Chairman Isakson, Ranking Member Blumenthal, and Members 

of the Committee. Thank you for the opportunity to participate in this hearing and 

to discuss the progress of the Department of Veterans Affairs’ (VA) implementation 

of the Veterans Access, Choice, and Accountability Act of 2014 (Veterans Choice 

Act). I am accompanied today by Doctor James Tuchschmidt, Interim Principal Deputy Under Secretary for Health. 

IMPLEMENTING THE VETERANS CHOICE PROGRAM

The Veterans Choice Program is helping VA to meet the demand for Veterans 

healthcare in the short-term. VA is focusing on ensuring the program is implemented correctly and seamlessly as well as on creating the most positive experience 

for all Veterans. 

VA’s goal is always to provide Veterans with timely and high-quality care with 

the utmost dignity, respect, and excellence. For the Veteran who needs care today, 

VA’s goal will always be to provide timely access to clinically appropriate care in 

every case possible. However, as we have shared with staff for the Senate and 

House Committees’ on Veterans Affairs, users of the Veterans Choice Program have 

identified aspects of the law that are challenging. We are working diligently to address these challenges and to turn them into opportunities to improve VA care and 

services. My testimony addresses the progress we have made thus far. 

Eligibility for the Veterans Choice Program 

President Obama signed the Veterans Choice Act into law on August 7, 2014. 

Technical revisions to Veterans Choice Act were made on September 26, 2014, when 

the President signed into law the Department of Veterans Affairs Expiring Authorities Act of 2014, and on December 16, 2014, when the President signed the Consolidated and Further Continuing Appropriations Act, 2015. On November 5, 2014, VA 

published an interim final rulemaking that implemented section 101 of Veterans 

Choice Act. 

8 

The Veterans Choice Program, established by section 101 of Veterans Choice Act, 

requires VA to expand the availability of hospital care and medical services for eligible Veterans through agreements with eligible non-VA entities and providers. Under 

section 101, some Veterans are eligible for the Choice Program based on the distance from their place of residence to the nearest VA medical facility. The Choice 

Act does not state how distance should be calculated for purposes of determining 

eligibility based on place of residence. The most common methodologies for calculating the distance between two places are by using a straight-line and by following 

the actual driving path between the two points. In the initial interim final rulemaking, VA adopted a straight-line measure of distance to determine eligibility 

based on residence, consistent with certain statements in the legislative history. 

During the public comment process for the rulemaking, VA received many comments questioning the use of the straight-line distance instead of driving distance. 

By contrast, VA received no comments in support of the use of straight-line distance. After considering extensive feedback, VA decided to amend the interim final 

rule to change the method used to determine the distance between a Veteran’s residence and the nearest VA medical facility from a straight-line distance to driving 

distance. The general intent of the Choice Act is to expand access to health care 

for veterans, and the use of driving distance allows more veterans to participate in 

the program and receive care closer to home. Moreover, from the standpoint of a 

veteran, the most relevant question is how far he or she must actually travel to receive care, not the length of a straight-line route. 

I am happy to report that on April 24, 2015, VA published a second interim final 

rule adopting this change, effective immediately. VA estimates that this change almost doubles the number of Veterans eligible for the Veterans Choice Program 

based on place of residence. We understand one frustration for Veterans is that according to the Choice Act, the Veteran is eligible for hospital care and medical services if the Veteran resides more than 40 miles from the medical facility of the Department, including a Community-Based Outpatient Clinic (CBOC), that is closest 

to the residence of the Veteran. This criterion bases eligibility on the proximity of 

the nearest facility, regardless of the availability of the needed care at that site. VA 

is a regionalized system; so we recognize that every CBOC does not deliver the services needed by every Veteran. We acknowledge this is problematic and have carefully studied the issue and potential solutions, recognizing the constraints of VA’s 

authorities in the program under current law and the significant budgetary impact 

that would accompany the potential solutions, which could range from $4 billion to 

$34 billion per year. 

We have presented our analysis of the issue to the Congressional Budget Office 

and staff of the Senate and House Committees’ on Veterans Affairs, and we are continuing to work with Congress to find an economically sound solution. 

Revisions to the Beneficiary Travel Program 

Based on Veterans’ feedback, we are using the fastest route by time calculation 

to determine eligibility for the Veterans Choice Program. This is different from the 

method that had been previously used by the Veterans Health Administration 

(VHA) Beneficiary Travel Program, which determined mileage reimbursement based 

on the shortest route. This route determination method may not have been a ‘‘common’’ route traveled by our Veterans to their healthcare appointments. However, we 

now believe the Beneficiary Travel Program standard should be altered as well to 

reflect the fastest route by time calculation and ensure consistency between both 

programs. 

To reduce variation in mileage calculation between the two programs, VA will now 

calculate mileage reimbursements under both programs based on the fastest route 

by time. In most cases, the change will provide equal or greater mileage reimbursements to Veterans. 

Veterans Choice Program Outreach Efforts 

We understand that the Choice Program is not working as well for Veterans as 

it should, in part because Veterans, VA employees, and community providers do not 

understand how the program works. We continue our outreach efforts to increase 

Veterans’ awareness of the program. With VA now determining eligibility for the 

Veterans Choice Program based on driving distance to the nearest VA medical facility, to include CBOCs, more Veterans are now eligible for the Veterans Choice Program. Beginning April 25, 2015, these newly eligible Veterans were sent a letter informing them that based on their place of residence, they are eligible to immediately 

participate in the Veterans Choice Program. The letter also provides guidance to the 

Veterans on how to verify their eligibility and access care. 

9 

When we initially launched the Veterans Choice Program, we mailed explanatory 

letters to over eight million Veterans, with their Choice Cards. This month, we are 

planning to send a mailer regarding the Veterans Choice Program to the same 

group of Veterans. The mailer assists Veterans in determining if they are eligible 

for the Veterans Choice Program and provides guidance on how to confirm their eligibility and schedule their next appointment. 

We will continue to focus on outreach and communicating with Veterans to ensure 

they understand the Choice Program, to include: establishing a reoccurring Veterans survey to measure their knowledge of the program; strengthening and expanding our social media strategy for Veterans, families, and caregivers; and, conducting program-related town halls at VAMCs. 

Veteran Choice Program Employee Training and Education 

We acknowledge that there are gaps in understanding the Veterans Choice Program and related business processes among VHA staff. We continue our outreach 

to VA facility leadership to improve employees’ understanding of the Choice Program and to address any reluctance our staff may have to send patients into the 

community to use the Choice Program. Our staff are more familiar and comfortable 

with assisting Veterans with existing VA community care programs. We must ensure they are adept with the Choice Program, as well. 

It is important that our staff understand and use the program properly. To date, 

VHA has conducted a variety of training including, but not limited to, in-person 

training, webinars, virtual training, teleconference, and other means. We, at VA, 

will continue to reiterate the distance standard rule change. On April 24, 2015, Interim Undersecretary Clancy sent a message about the Veterans Choice Program to 

all employees and included a reference called the Five Questions About the Veterans 

Choice Program, further explaining recent updates and how to assist Veterans in 

accessing the program. In addition to the Interim Under Secretary’s message, the 

Network Directors and Medical Center Directors will be sending their own messages 

to their employees, and Service Line Chiefs will be meeting with their employees 

in person to further discuss the program and to ensure that all employees understand the program. 

As I mentioned in testimony to the Senate Veterans’ Affairs Committee on 

March 24, 2015, we are sending teams of experts, including staff from our Third 

Party Administrators (TPA), Health Net and TriWest, as well as VA leadership, to 

15 facilities in each of their catchment areas. These facilities were selected based 

on the high number of Veterans waiting for care and low utilization of the Veterans 

Choice Program. The experts will hold discussion sessions regarding needs of the 

medical centers, and the Third-Party Administrators (TPA) network’s capacity to 

provide care. During this time, we will review data regarding needs and utilization, 

and identify gaps in TPA provider networks. An action plan will follow each visit. 

Educating Third Party Providers on Veterans Choice Program 

As we work to solve Veterans’ issues, we must also ensure non-VA providers are 

informed about the program and how to best serve Veterans. We use a variety of 

means to conduct outreach and to educate and inform community healthcare providers about how to participate in the Veterans Choice Program. Since the Choice 

Program started, Secretary McDonald has met with national health care organizations, such as the American Medical Association and the American Association of 

Medical Colleges to discuss the Choice Program as well as other aspects of VHA’s 

transformation. 

In November 2014, VA established the Choice Web site as a clearinghouse for 

public information. Veterans and Veterans Service Organizations are the primary 

audience for the Choice Web site, but care providers also utilize the site’s resources. 

VA expanded the existing VA Community Care Provider Web site to include new 

information on the Veterans Choice Program, as well as how to become a Veterans 

Choice Program provider. Additionally, community provider training is a contractual 

requirement of VA’s TPAs, Health Net, and TriWest, which have provider pages 

that they use to engage in targeted outreach to non-VA healthcare providers and 

to deliver training and information as they build their networks. 

Recognizing that the Veterans Choice Program is connecting community care providers with Veterans to a greater extent than ever before, VHA is providing broad 

access to Veteran-relevant training and information for providers who may not be 

familiar with military culture. Recently, VA established VHA TRAIN (TrainingFinder Real-time Affiliate-Integrated Network), an external learning management 

system to provide valuable, Veteran-focused, accredited, continuing medical education at no cost to community healthcare providers. Since the launch of VHA 

TRAIN on April 1, 2015, more than 1,520 people have created an account or subVerDate Mar 15 2010 18:29 Jun 30, 2016 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6621 Z:\ACTIVE\051215.TXT PAULIN
10 

scribed to VHA content through a previously established account. The first course 

offerings, four modules of Military Culture: Core Competencies for Health Care Professionals, have already seen over 347 registrations and 179 course completions. VA 

will add dozens of Veteran-care training courses to VHA TRAIN throughout 2015. 

Rationalizing All VA Community Care Programs 

Beyond the Veterans Choice Program, VA has, for years, utilized various authorities and programs in order to provide care to Veterans more quickly and closer to 

home. In fact, the Department spent over $7.012 billion on VA community care in 

Fiscal Year 2014 to help deliver care to eligible Veterans where and when they want 

it. In Fiscal Year 2014, Veterans completed 55.04 million appointments inside VA, 

and 16.2 million appointments in the community. 

We recognize though, that the number and different types of VA community care 

programs and authorities may be confusing to Veterans, our stakeholders, and our 

employees. Navigating these programs to determine the best fit for a Veteran may 

be challenging. Therefore, we are currently working to streamline channels of care, 

billing practices, mechanisms for authorizations, etc., with the goal of creating a 

more unified approach to community care. 

Refining Business Processes 

We are also focused on looking internally at the business rules and internal processes that govern the Veterans Choice Program. It is our hope that stepping back 

to revise our own practices and focus on long-term work plans will create more efficient processes that will engender better and timelier care experiences for Veterans 

as well as better business relationships with our VA community care providers. 

Managing the Veterans Choice Program effectively requires us to have broad visibility of data. We are refining our data analytics to develop more thorough management and oversight of the TPA performance. In order to support the VA community 

care providers that treat our Veterans, we are refining the oversight of payments 

for services provided. We are also continually working with the TPAs to help them 

develop their healthcare networks to support Veterans’ healthcare needs. 

Pilot programs in VISN’s 8 and 17 are beginning to send clinical documentation 

only when a Veteran contacts the TPA for an appointment. The TPA then requests 

information from the VA site and VA provides that information within 24 hours. 

There is very little wasted effort and the TPA is assured of getting the proper information. With the current practice, VA sends clinical documentation to the TPA on 

every Veteran regardless of whether they intend to use the Veterans Choice Program. This creates a tremendous burden on both the facility, who must compile and 

send the material, and the TPA who must store all of this data. Currently, the pilot 

is doing well, and we look forward to rolling this process out across the Nation. 

More broadly, VA sent to the Congress on May 1 an Administration legislative 

proposal entitled the ‘‘Department of Veterans Affairs Purchased Health Care 

Streamlining and Modernization Act.’’ This bill would make critical improvements 

to the Department’s authorities to use provider agreements for the purchase of VA 

community medical care—in order to streamline and speed the business process for 

purchasing care for Veterans when necessary care cannot be purchased through existing contracts or sharing agreements. We urge your consideration of this bill, 

which will provide VA the right legal foundation on which to reform its purchased 

care program. And, that is critical for Veterans’ access to health care. 

CHOICE ACT: FUNDING

We are thankful for the Veterans Choice Act’s funding to help us overcome our access issue. As of April 30, 2015, of Section 801’s $5 billion for enhancements to 

VA staffing and facilities, we have obligated almost $304 million to increase access 

to care for Veterans at our VA medical centers. The $304 million includes an estimated $143 million obligated for hiring medical staff. In addition, we have obligated 

more than $145 million for infrastructure improvements. These improvements include legionella mitigation, non-recurring maintenance, minor construction and information technology improvements. Of Section 802’s $10 billion dedicated to the 

Veterans Choice Program, VHA has obligated more than $500 million for 

healthcare, Beneficiary Travel, pharmacy, prosthetics, and implementation costs. As 

we implement the improvements described above, we expect these obligations to 

grow. 

VHA STAFFING

VHA is in the process of hiring more than 10,000 medical professionals and support staff, leveraging the funds provided by Congress in the Choice Act. These 

healthcare professionals will augment the current baseline of employees already 

11 

providing care to Veterans—with the goal of further improving timely access to care. 

As reported in the Veterans Choice Act Section 801 Spending Plan provided to the 

House and Senate Committees on Veterans’ Affairs on December 3, 2014, VHA expects to complete these hires by the end of Fiscal Year 2016. VHA is making good 

progress, with roughly 25 percent of the more than 10,000 staff now on-board. Using 

the resources provided by the Veterans Choice Act, VHA will continue to aggressively market, recruit, hire and credential medical professionals and support staff 

to ensure we make full use of this opportunity to deliver quality care to Veterans. 

Additionally, the Department appreciates the changes to the Education Debt Reduction Program authorized by Section 302 in the Choice Act. This Program provides a valuable tool for the Department to recruit and retain eligible, high-quality 

staff to VA. 

SECTIONS 105 AND 106: PAYING VA COMMUNITY MEDICAL CARE PROVIDERS

The Department understands the importance of complying with requirements of 

the ‘‘Prompt Payment Act’’ and making timely payments to VA community medical 

care providers. The organizational changes implemented in Section 106 that consolidated payment of claims under centralized authority serve as the basis for further 

improvements in the prompt payments. 

Section 106 of the Veterans Choice Act required the Department to transfer authority to pay for healthcare and the associated budget to the Chief Business Office 

no later than October 1, 2014. In seven weeks, we re-aligned more than 2,000 positions and over $5 billion dollars in healthcare funding to the Chief Business Office 

from the VISNs and VA medical centers. This realignment established a single, unified shared services organization responsible for payment functions and implemented centralized management which will allow us to leverage business process efficiencies going forward. We are in the process of refining and implementing standard processes and performance targets, and monitoring to ensure processing activities are performed and measured consistently across VA. This will enable us to deliver exceptional customer service to Veterans and VA community medical care providers. In addition, Choice Program claims processing and payment was centralized 

to ensure efficiency of processing and accuracy of payments. 

We acknowledge that claims processing timeliness must improve. To date, our efforts include expediting hiring, maximizing the use of contract staff, implementation 

of involuntary overtime, and implementing tiger teams to maximize efficiencies with 

people, processes, and technology. Our current standard is to have at least 80 percent of our inventory under 30 days old. 

SECTION 201: INDEPENDENT ASSESSMENTS

Section 201 of the Veterans Choice Act requires VA to enter into one or more contracts with a private sector entity or entities to conduct an independent assessment 

of the hospital care, medical services, and other healthcare furnished by VA, specifically assessing areas such as staffing, training, facilities, business processes, and 

leadership. Our work on Section 201 Independent Assessments resulted in completion of the first legislative milestone on November 5, 2014, by awarding a contract 

to the Centers for Medicare and Medicaid Services’ Alliance to Modernize 

Healthcare (CAMH) to serve as Program Integrator for the independent assessments. The program is now progressing toward the second legislative milestone— 

completing the independent assessments by July 3, 2015. CAMH, supported by the 

Institute of Medicine and a diverse team of assessment subcontractors, are currently 

in the Discovery and Analysis phase. 

To date, the teams have interviewed hundreds of VA and VHA staff as well as 

assessed over 80 medical facilities across 30 states, Washington D.C., and Puerto 

Rico. The teams have completed a landmark ‘‘Organizational Health Index’’ Survey 

to capture the perspectives of VHA employees nationwide, and VA has provided access to its data, systems, and records by sharing over 1,000 data sets, reports, and 

other critical documentation. 

A Blue Ribbon Panel of 16 healthcare experts, with substantial executive-level experience, has held two meetings and will continue to do so to regularly advise 

CAMH on the independent assessment. This panel, along with CAMH and their 

sub-contractors, will ensure that the recommendations resulting from Section 201 

meet the needs of Veterans and establish a foundation for transforming VA into the 

preeminent 21st-century model for improving health and well-being. 

NEW RESIDENCY PROGRAM POSITIONS

The Veterans Choice Act provided VA the opportunity to expand physician residency positions by up to 1,500 positions over five years. The law gives priority to 

12 

the disciplines of primary care and mental health and to sites new to Graduate 

Medical Education (GME), in health professional shortage areas, or with high concentrations of Veterans. 

VHA has conducted extensive outreach to the academic community to ensure we 

generated interest in these new residency positions. The first Request for Proposals 

(RFP), released in the fall of 2014, resulted in 204 positions being awarded to VA 

sites and their academic affiliates. These first residents will start July 1, 2015. The 

process for distribution of the Veterans Choice Act positions continues, with the second of five annual RFPs anticipated for release in late spring/early summer 2015. 

VA plans to award between 200–325 positions each year for the next four years. 

As part of the Veterans Choice Act expansion, facilities new to GME (or with extremely small residency programs) were offered funds for infrastructure support. 

These funds will offset specific administrative or clinical costs incurred in running 

a residency program and will enable these smaller facilities to become more successful in hosting residency programs. Last, in order to encourage small VA facilities 

to engage in residency education, VA will issue planning grants to incentivize the 

formation of new affiliation relationships. 

CONCLUSION

We are grateful for the close working relationship with Congress as we make 

progress in implementing the Veterans Choice Program. Mr. Chairman, we will continue to work with Veterans, Congress—especially this Committee—VA community 

care providers, VSOs, and our own employees to ensure the Choice Program is 

working well and delivering great healthcare outcomes for Veterans. 

I again thank the Committee for your support and assistance, and we look forward to working with you in improving the lives of America’s Veterans. 

Chairman ISAKSON. Mr. McIntyre. 

STATEMENT OF DAVID J. McINTYRE, JR., PRESIDENT AND 

CHIEF EXECUTIVE OFFICER, TRIWEST HEALTHCARE 

ALLIANCE 

Mr. MCINTYRE. Mr. Chairman, Ranking Member Blumenthal, 

and members of the distinguished Committee, I am grateful for the 

opportunity to appear before you this afternoon on behalf of our 

company’s employees and its nonprofit owners to discuss TriWest 

Healthcare Alliance’s work which we are privileged to do in support 

of the Department of Veterans Affairs. 

I would like to focus my oral testimony on three topics: the realities of this program’s implementation, the process of identifying 

and resolving gaps and those which remain to be resolved, and 

what I believe to be the art of the possible path going forward. 

Mr. Chairman, before the Veterans Choice Program, there was 

PC3, Patient-Centered Community Care. As you know and as Secretary Gibson has said, purchasing care in the community from 

community providers has been a long practice of the VA. In fact, 

in September 2013, after 2 years of planning, VA sought to change 

that with the awarding to the patient-centered community care 

contracts to us and Health Net. That contract was designed to have 

a consolidated, integrated delivery system built in the community 

to undergird the VA facilities across the 28 States and the Pacific 

that we are privileged to serve, and make sure at the end of the 

day that we were not there to replace the VA, that we were there 

to supplement it. 

In fact, it worked as intended. When the furnace lit off in our 

home town of Phoenix, AZ, 6,300 providers under contract under 

PC3 leaned forward at the site of the VA medical center to assist 

them in eliminating the backlog, and by August, 14,000 veterans 

had moved through that process. 

13 

Around the same time, we got a modification to add primary care 

to those contracts, and within 90 days we stood up a network of 

primary care providers. We now have over 100,000 providers across 

28 States and the Pacific under contract, along with 4,500 facilities, 

and we are not finished. The reason why we are not finished is 

that we need to make sure that the networks are tailored to match 

the demand that exists in a particular market that is not able to 

be met by the VA facilities itself. 

The fact of the matter is that it was a complicated program to 

set up. It was done under very short order. But it was training, if 

you will, for what was to come next, because on November 5, after 

30 days of work, we were to stand up in support of VA the Choice 

Program. We had to partner with VA to receive a list of all eligible 

veterans. We had to design and produce a card and put it out with 

a personalized letter from the Secretary. We had to stand up a contact center to handle all of the calls coming in. After 2 weeks of 

design and 2 weeks of hiring and training of 850 people, no one 

went into 3-hour waits; the phones were answered; but the work 

had only begun. We have been on a pathway since to try and mature the operations. 

The Secretary talked about the 40-mile issue. There are additional refinements that may well be needed and desired in that 

area, and if so, we stand prepared to support what those might 

look like. There are some other changes that may well be needed 

to the program as we go forward. 

Second, we need to aggressively identify and resolve our gaps 

and fix our operational performance, and we are in the process of 

doing that together. We are modernizing our IT systems, rolling 

out after Memorial Day, after a 24/7 build, a new portal system 

that will serve all of the facilities and our own staff as we seek to 

move the veteran information back and forth between the two facilities as care is rendered downtown. We are in the process of tailoring networks to match the demand that exists in each market 

across our area. 

The Choice Program is up, it is operational, and there are refinements still need. I believe that because of the collaborative work 

that has been underway between all of us that are engaged in this, 

we are refining the pieces that need to be refined, we are identifying the policy gaps that need to work, and those things, as the 

Secretary said, are getting attended to. 

I think there are a couple of policy issues, though, that remain 

the jurisdiction of this particular Committee. One is I would encourage a relook at the 60-day authorization limitation that has 

been applied. Second, I would respectfully submit that there needs 

to be harmonization between the two programs and between all of 

the facets of how the VA buys its care currently, as well as how 

the VA operates itself in engagement with us in order to make this 

work right. 

At the end of the day, I believe the art of the possible which you 

sought is truly within our grasp. I would like to point to Dallas, 

Texas, for a second, if you will permit me to do so. We are under 

the engaged leadership of the VISN 17 Director. A couple of weeks 

ago, we sat with the VA medical center Director and the entire 

staff there, including behavioral health staff, and looked at the full 

14 

demand that exists for veterans in that market. We then took out 

and looked at what is the network that is constructed to stand at 

its side, which is the base on which Choice rides. In other words, 

if there is not a network provider, you can set up an engagement 

with an individual provider to deliver services under Choice. 

We then designed a network map that we are now in the process 

of constructing together, and over the next 90 days, from behavioral health to primary care to specialty care, we will rack and 

stack the network to meet the demands that otherwise cannot be 

met by the VA medical center in Dallas. That is being repeated 

across our entire 28 State area and the Pacific as we seek to do 

our part to mature the operations of Choice. 

It is a privilege to serve in support of those that served this country. It is an honor to serve the veterans from the States that are 

represented by half of the Members of this Committee, and, Mr. 

Chairman, I look forward to taking questions after my colleague 

Donna Hoffmeier is finished with her remarks. 

Thank you. 

[The prepared statement of Mr. McIntyre follows:] 

PREPARED STATEMENT OF DAVID J. MCINTYRE, JR., PRESIDENT AND CEO, 

TRIWEST HEALTHCARE ALLIANCE

Good afternoon Mr. Chairman, Ranking Member Blumenthal, and members of 

this distinguished Committee. I am grateful for the opportunity to appear before you 

this afternoon on behalf of our company’s non-profit owners and employees to discuss TriWest Healthcare Alliance’s work in implementing the Veterans Choice Program (VCP). More importantly, I look forward to discussing our ability to achieve 

our collective potential in meeting the needs of those who deserve our very 

best * * * our Nation’s Veterans. 

OUR BACKGROUND

TriWest is intentionally in business only to serve those who serve; which has been 

the case for nearly 20 years. And during our entire history, the company I was fortunate to help found with a group of non-profit health plans and University Hospital 

Systems, and have been privileged to lead since, has focused exclusively on providing access to needed care when it is not able to be provided by the Federal systems on which those in uniform rely. Our first 17 years were spent helping the Department of Defense (DOD) stand-up and operate the TRICARE program. And while 

we no longer support the DOD in that line of work, I’m proud of the work that we 

did to assist DOD in making TRICARE the most popular health plan in the country 

and meet the needs of millions across 21 states who relied on us for that support. 

And, as those of us who were around at the time can attest, we know it was neither 

an easy nor painless road. Now, working together with VA, I believe we can achieve 

the same results for the Veterans who look to VA for their health care needs. 

PC3 PERFORMANCE

Mr. Chairman, before VCP, there was PC3. 

In September 2013, TriWest was awarded a contract to stand-up and implement 

the brand new Patient Centered Community Care (PC3) program across 28 states 

and the Pacific. Initial access to specialty care from network providers began in January 2014, with the rest of the program coming online over the months that 

followed. 

PC3 was intended to be a nationwide program giving VA medical centers (VAMC) 

an efficient and consistent way to provide access to care for Veterans from a network of credentialed providers in the community. We are pleased to be sharing this 

work in support of VA with our long-time colleagues in the TRICARE work, Health 

Net. And, I want to assure this Committee that we are working together very collaboratively to leverage our collective knowledge so that VA benefits from it as they 

and you seek to fashion strategies that will optimize VA’s direct delivery system and 

supplement that care with access to care in the private sector when and where it 

is needed. 

15 

Important to the success of PC3 was that the cost to VA, quality, and processes 

would be consistent all across the country. Community providers, VA staff, and Veterans would know how the program works. Congress and VA health care executives 

could more accurately budget for non-VA care costs. The facilities could turn to consolidated networks, tailored to their needs just like DOD did with TRICARE, versus 

inconsistently buying on their own. And, claims payment challenges for providers 

would be a thing of the past. 

The promise of that vision is still there today. 

However, the implementation of PC3 was not without challenges. And, overcoming those challenges has been a huge focus for TriWest and our VA partners 

during the first year of its operations. 

For those of us at TriWest, a big challenge at the outset was the absence of data 

showing the VAMC’s needs and historical purchasing patterns. As you might expect, 

it is very difficult to build a network of providers when you don’t know the volume, 

configuration or location of demand. This led to some initial mismatches in our network and significant unexpected cost as we had to recalibrate the network once we 

received the needed information. Put simply, we had more of some services than VA 

would ever need in some places. But, we also had less of some services in other 

places than it turns out VA needs in order to ensure that care is both in sufficient 

supply to meet the need and reasonably close to where the Veterans reside. I want 

to compliment our contracting officer, Mara Wild, for tirelessly staying on the pursuit of this critical information over the course of nine months*** information 

that we are putting to good use in our efforts to optimally calibrate the networks 

to meet the need. 

Being able to effectively project volumes based on solid information not only assists with making sure that networks are tailored properly to support each VAMC 

and Community-Based Outpatient Clinic (CBOC), and the Veterans who rely on 

them for care, it also ensures that we have the staff necessary to administer the 

program and meet the tight performance specifications. The PC3 contract is designed to pay us only after care is ordered, appointments are made, the medical documentation is returned to VA to be inserted in the Veteran’s consolidated medical 

record, and we have paid the provider. That means staffing levels are all at risk 

to us. If we hire too many staff and VA does not use the program, we lose 

money*** effectively paying the government for the privilege of doing the work. 

But, if we hire too few, it can lead to delays in the receipt of care as we struggle 

to meet demand. So obviously, getting this as close to right as possible is very important. 

There are few programs structured this way, as even TRICARE, Medicare plans, 

and private insurance have premiums being paid in advance to cover both the anticipated administrative costs and the projected health care risk. 

Yet another challenge has been voluntary utilization of the PC3 program by each 

VA medical facility. As noted above, my colleagues and I at TriWest and our owners 

who call most of the communities in our area of operation home, built a network 

of providers based in part on estimates derived from historical fee basis care purchasing. However, much to our surprise, we’ve painfully discovered that many facilities have simply continued to use, almost exclusively, their historical non-VA care 

program to buy care from community providers*** even when we had network 

providers. In fact, some of our network providers were the same providers from 

whom they continued to buy directly. While some VAMCs have largely abandoned 

this practice, we have had a very difficult time understanding why this practice has 

been allowed to continue such that only about 15% of total purchased care has been 

bought through this mechanism and VCP, in spite of all the money and man hours 

that have been spent in constructing these networks. 

Beyond that, we see provider confusion as we attempt to convince them to join 

a network when they are already seeing Veterans through the legacy programs. 

Even worse, when a provider does join the TriWest network but continues to receive 

referrals for services from both VA and TriWest, they quickly notice that the requirements, rates, and claims processes are often completely different. And yet, to 

the provider, it is a Veteran being referred for care by VA. 

Voluntary utilization of PC3 at the local level has also exacerbated the challenges 

with staffing because even when utilization data is available, we cannot assume 

such workload will come through the contract. We have to consider how much volume each local medical facility will move through the networks, and its related processes, as we determine how much staff is needed to do the work. And, as you might 

expect, those projections are extremely difficult to make with any 

accuracy*** even with the talented and experienced staff we have attending to 

that task. 

16 

There is, however, hope. I would like to compliment my fellow panel member, Dr. 

Jim Tuchschmidt, for the direction that he and the rest of VA’s leadership have 

given to the team at VA that this practice is to come to a halt. Instead, their direction is that the networks that were constructed to support them and programs, such 

as VCP, which extend options further for Veterans, are to be used rather than resorting to direct purchasing of care. 

Mr. Chairman, fortunately, the first year of PC3 operations has also had a lot of 

successes. In fact, I’d say that in spite of the challenges I’ve just noted, we have 

made some amazing progress together in a very short span of time. 

The most important element of that progress is that more workload is coming 

through this contract than when it started. In January 2014, the first month of operations for PC3, TriWest received approximately 2,500 requests for care. This past 

April, we received over 21,000. As I just noted, whether to use the contract is still 

seen as voluntary throughout the system. So, when more care comes through the 

contract, it is evidence that more VAMCs see the benefits of using consistent processes, rates, and network to obtain needed, quality care for Veterans. In the long 

run, when these programs are the vehicle for the vast majority of care purchased 

outside of VA, the consistency will benefit the entirety of the non-VA care program. 

Concurrent with, and certainly not unrelated to the growth in utilization, the 

partnership between VA and TriWest has matured substantially over the past year. 

And that maturity has helped us to focus on better matching the needs of local Veterans with the providers in the network, and ensuring those providers are in the 

right communities served by the VAMC. For example, while it is important to know 

that the Topeka VAMC purchased 500 MRIs from community providers in a given 

month, it is critical to know if they purchased 200 in Manhattan, 100 in Hays, and 

200 from Salina * * * as they are all considered to be in the catchment area of the 

VAMC. However, as I am sure Senator Moran can attest to, the Topeka Kansas 

VAMC has a big catchment area in a huge state. Without that second layer of data, 

TriWest would almost assuredly build network in the wrong places. 

The work we are doing at each other’s side, and the appreciation of what is needed for us to execute with reasonable effectiveness for VA in support of Veterans is 

allowing us to grow the provider network smartly. One year ago, there were just 

over 50,000 network providers serving VAMCs in Regions 3, 5, and 6. Today, we’ve 

crossed the threshold of 100,000 providers in the network devoted to caring for Veterans in need of services from providers in their community. More of those providers 

are in more communities where the needs exist. And we aren’t done yet, which I 

will talk about in a few minutes. 

It is also important to make sure when you ask a provider to render care that 

they get paid on time and accurately for their work. Not only is it proper, but that 

is the way to ensure they are likely to agree to serve another Veteran when the 

need arises. As we all know, when you have to spend time chasing the bill payer, 

it adds to expense and makes the work less attractive. And, we want this work to 

be attractive*** just as it was with TRICARE when we worked to help the DOD 

reengineer claims processing at the start of the program which put us on a path 

to becoming the fastest and most accurate payer with which most of our provider 

network dealt. 

Any new program has challenges with aspects of implementation and operation. 

And, unfortunately, at the outset of PC3, we were not paying our claims as quickly 

as we would like. In fact, I think we were averaging close to 90 days in June 2014. 

That simply isn’t the case any longer. Experience, focus, and refinements have successfully brought us to a place where our average clean claim is now being paid in 

fewer than 30 days. Providers who render quality care to our Veterans deserve timely payment of their claims. And we are committed to honoring their service at our 

side by doing just that. 

On the way to improving the PC3 experience for Veterans, VA, and providers, it 

turns out that we also were just getting warmed up in preparation for the ultimate 

program implementation run which came in October 2014 with the first indication 

that the new VCP would become a modification to the PC3 contract. And, the intensity was about to pick up several-fold. 

IMPLEMENTING THE VETERANS CHOICE PROGRAM

To be exact, we would ultimately have one month for the implementation of this 

massive new program that would ‘‘go live’’ on November 5, 2014. 

I recall vividly that during one of the initial discussion sessions VA had with potential industry partners in mid-September 2014, it was said by some in the room 

that 12–18 months was the needed timeframe in which to stand up a program of 

this magnitude. And while there certainly were imperfections on Day 1, and we conVerDate Mar 15 2010 18:29 Jun 30, 2016 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6621 Z:\ACTIVE\051215.TXT PAULIN
17 

tinue to refine operational processes internally at TriWest and between VA and us, 

I’m very proud of what we all accomplished in such a short timeframe. And I would 

like to focus for a moment on what went right, before I share with the Committee 

what remains a challenge and what I hope we all can focus on for the future as 

we seek to achieve an effective and efficient program for those we are all privileged 

to serve. 

As this Committee is aware, the law mandated that all Veterans enrolled for care 

with the VA Health Care system as of August 1, 2014 receive a Veterans Choice 

Card. At its core, this required printing those cards and mailing them off to Veterans. But, in reality, it involved so much more. 

First, we had to partner with VA to receive a list of all Veterans eligible to receive 

the card. We were informed early on that the list would contain nearly nine million 

names. Of course, in order to ensure that a list of that size can be used for its intended purpose, formatting is crucial. Working together with VA and our colleagues 

at Health Net, we agreed on a template of the fields that would be provided to us. 

We then made that template available to the card printer we selected once the design was available to us because they had a week to get the first batch of cards 

printed, stuffed, and into the mail. 

At the same time, we worked with our colleagues at Health Net to parse out all 

of that data and break it up so that each of us would have the right list of Veterans 

for each area served. After completing that project, we knew there were just under 

four million Veterans eligible in the area of our responsibility. 

Just knowing who was to receive a card was not enough. We also had to load all 

of that data into our customer relations management (CRM) system so that when 

those cards arrived in the mail and Veterans called the number on the back, we 

knew who those Veterans were when we answered the phone. And I’m proud to say 

that we had that system up and operational in advance of ‘‘go live’’ day. 

While we are on the topic of phones, at the same time all of the data loading and 

print work were occurring, we were also standing up a call center infrastructure big 

enough to serve the outreach from all of those who would receive the cards as well 

as providers and others in the general public who learned about the new benefit and 

had questions. 

To accomplish this task, we worked directly with Verizon and our call center partner to establish a cloud-based system that would support a single, public-facing 

phone number (866–606–8198) where a Veteran; a provider; or a VA staff member 

encountered a message from the Secretary about the program and then was routed 

to the appropriate agent representing us based on their zip code to receive supportive services. Again, in fewer than 30 days, we designed and stood this up and 

it was staffed with nearly 800 people by November 4, 2014 so that we would be 

ready to serve Veterans in need. 

I would submit that our most important accomplishment is what did not happen. 

No computers crashed. No busy signals occurred. In fact, there were no long waits 

for the phone to be answered by a live person. In less than 30 days, working together with VA and other partners, we stood-up a contact center that worked. 

In those first 30 days, we also had to work with VA to develop a means of learning who was eligible for VCP at any given time. As you know, the law created two 

distinct types of eligible Veterans: those waiting longer than 30 days to receive 

needed care; and those residing more than 40 miles from the closest medical facility 

of the department. TriWest would need to know which Veterans qualified under 

which category of eligibility because the range of services available differs greatly. 

Those residing more than 40 miles from the closest VA medical facility are eligible 

to receive through VCP any needed medical care covered by VA. TriWest is delegated responsibility to make determinations of medical necessity. As such, our only 

issues in serving this population are whether the care is medically needed, and 

whether there is a provider close-by who agrees to provide that service. As many 

Members of this Committee know, if you live more than 40 miles from the closest 

VA medical facility, it is likely you live in a rural or highly rural area. As such, 

it is often not only VA that is far away, but it can be difficult to locate some types 

of specialty and subspecialty providers due to their scarce supply. 

For the 30-day waitlist population, the task proved much more difficult because 

it was not only necessary to know that you were on the eligibility list, but we needed to understand what service(s) the Veteran needed. For this, we would need clinical information (known as a ‘‘clinical consult’’) from the referring VA provider. 

In an effort to expedite the provision of that clinical information, given the very 

short time in which to stand this up, an initial decision was made by VA leaders 

to send us all clinical consults related to any Veteran on the Veterans Choice List 

(VCL). The initial waitlist alone contained information on over 34,009 Veterans. For 

each of those names, we would also receive via fax information documenting their 

18 

respective clinical need. Then, we had to match that clinical information with the 

registry created by the card-mailing file and the updates created by the eligibility 

file so that we could help Veterans in need of service when they called. This process 

has proven to cause the most challenges in operation of VCP. 

Nevertheless, in the six months the program has been operational, TriWest has 

processed over 40,000 authorizations for care. And we have seen growth in the use 

of the program every month with the exception of a slight drop between January 

and February of this year. In November 2014, we processed approximately 2,600 authorizations (more than the first month of operation under PC3). By April 2015, the 

number was 10,600; growth of nearly 400%. 

As I mentioned earlier, while we certainly had many successes about which I am 

proud, I am by no means suggesting that all went right in our implementation. And 

I think it is very important that we outline what went wrong if for no other reason 

than because Veterans and their representatives in Congress deserve to know and 

understand our challenges. After all, at the end of the day, we are ever mindful that 

we are all spending taxpayer money. 

First, and foremost, we suffered from a lack of training time. We had less than 

two weeks to hire and train hundreds of people just to answer phone calls from Veterans and describe or explain a complex new program. It is no understatement to 

say that most who worked to get VCP up and operational worked 100 hour weeks 

during that 30-day period * * * in order to understand what was envisioned by the 

law and then design the approach and stand-up operations. Given the brief amount 

of time to do all that was required, one of the greatest challenges was to gain a 

solid base of understanding of this valuable new benefit, and get the operation design set so that we could sufficiently explain both to others. And, we were not alone 

in that challenge. Among those most impacted, beyond the Veterans we were all 

aiming to serve, were the new staff in the call centers, as they only had five to seven 

days in which to grasp the information versus the typical two to three week period 

one ought to provide. I am sure others, including VA, struggled with the same. 

Obviously, the lack of training led to less than optimal customer experiences. Information provided to Veterans was at times inaccurate or confusing. And some Veterans were left frustrated. I want to apologize for that. But, in apologizing, I also 

want to assure this Committee that we did everything in our power to train and 

educate this new team in the very short period of time we were allotted. In the end, 

it was simply not enough time. And, we are doing our best to stay on top of making 

sure that our staff has the right knowledge base of the program in order to provide 

solid customer service*** even as this program continues to be refined, creating 

a need for re-training. 

The training of our staff was not the only challenge that impacted the customer 

service experienced by Veterans who called the Choice line. As noted above, there 

are many areas where cooperation and collaboration between VA and TriWest needs 

to occur every day to ensure solid performance of VCP. I think it is fair to say that 

as hard as it was for TriWest to train hundreds of new staff, it is vastly more complicated for VA’s leadership to train thousands—maybe even tens of thousands—of 

administrative and scheduling staff all across the United States so that their engagement with Veterans would be informed. Not only that, but this challenge left 

us in a place where our staff and Veterans struggled with the impact of encounters 

with insufficiently trained personnel on whom they had to rely for information in 

order to achieve a positive customer experience. 

Another challenge in early implementation of VCP was the timely receipt of the 

eligibility file. As I mentioned earlier, VA worked with us to create a template that 

would allow their team in the Eligibility Office to push regular information to us 

about which Veterans were eligible for VCP. But, the Eligibility Office also needed 

to obtain that information every day from clinics all across the country. It was always the goal to provide a new file every night so that when a Veteran called us 

the next day, we knew of their eligibility. In reality, even to this day, there is at 

least a five-day lag in between when a Veteran is told there is a wait time in the 

clinic that provides them eligibility for VCP and when that information can be used 

by TriWest to serve the Veteran. 

There are many reasons for this delay. But, none of them are related to a lack 

of hard work. In fact, I would like to publicly acknowledge the incredible work done 

by Laura Prietula and her team in the Eligibility Office. She is a dedicated public 

servant who seeks to deliver outstanding work every day and from our experience 

many nights she is there too. And, there are many others like her in VA working 

tirelessly in an attempt to get this benefit to where we all want it to be. The hope 

is that some level of automation is coming to this program and to this area in particular. But, it was not available on Day 1 and that has led to some challenges and 

frustration. 

19 

Still another challenge has been the receipt of the clinical consultation information from VA which, as noted earlier, is necessary to schedule an appointment with 

a provider. For those eligible for VCP by virtue of their inclusion on the 30-day 

waitlist, TriWest must have a clinical consult for use when helping to make an appointment. The information in the consult tells the provider in the community why 

the Veteran is being referred to them for services. Providing this information is 

standard practice and good clinical care. And for some services, it is even required 

by Medicare, insurance policies or other accrediting organizations. For example, no 

imaging center will provide an MRI, CT, or other sophisticated imaging study without a physician order. This order would be in the clinical consult. 

Because this information comes from hundreds of different clinics all across the 

VA system, receipt of that information in a consistent fashion has been a challenge. 

Without it, however, we are left with no alternative but to tell a Veteran who calls 

the Choice line that we are waiting on clinical information from VA. Needless to 

say, when we tell a Veteran we know they are eligible, and yet we still cannot help 

them, the frustration is enormous. 

As I noted above, the consult is supposed to come to TriWest automatically for 

every Veteran who is placed on the VCL. Unfortunately, we only know what we 

don’t have when a Veteran calls for an appointment and can’t receive one. I also 

do not want to lay all of the challenges in this area at VA’s feet. The fact is, many 

times when we call for consults that we do not believe we have, we are told by VA 

staff that they were already sent. This no doubt frustrates VA staff too. 

The good news is that recently we implemented a pilot program in VISN 17 in 

collaboration with the Dallas VAMC which is testing whether a process of requesting on our end can be met with a response on VA’s end within 24 hours. Initial data 

suggests that it is working well. If the evidence continues to show promise, it will 

mean that Veterans all across the country can expect a consistent customer experience under which we can all assure them that we will have the information necessary to make an appointment within 24 hours of them calling us. And no longer 

will VA be responsible for sending thousands of clinical consults every day for Veterans who may not use VCP. I would submit that this is a win-win. 

This looming success in addressing one of our collective challenges flows from the 

collaborative work in which we, Health Net and VA have been engaged since the 

beginning of the year. Just a little over 60 days from the start of VCP, we began 

to sit down together to map the gaps in process and customer service and blueprint 

how to resolve them. The focus of this work is to identify the components of our 

individual and collective work, or the policies and approaches that underlie them, 

that are in need of re-engineering or refinement to ensure that Veterans receive the 

access to care that was envisioned with the enactment of VCP. 

This work is highly collaborative and involves leadership at all levels of the three 

organizations. In fact, just last week we all met for a day-long summit on Clinical 

Issues where we identified problems, discussed solutions and made the changes that 

will close gaps. This was on the heels of our regular, monthly day-long summit during which we focus on needed administrative process changes or refinements. Those 

issues are brought to the table by a myriad of integrated topical workgroups that 

meet in many cases several times a week. 

It is intense and focused, just as should be * * * as we are trying to quickly address the processes we all know need attention in order to improve this critical program and meet the intended objective of VCP. 

I would submit that this approach is yielding effective change and refinement at 

great speed for a program of this magnitude that was stood up very quickly and 

across a vast geographic expanse. And, I want to offer that the focus and intensity 

on the part of those involved and the collaboration present is unlike anything I have 

ever seen in my 30 years of engagement in this space. 

For our part, not only are we engaged at a macro level, but we are operating in 

this same fashion within our company*** which is how we have accomplished 

successful and quick refinement and improvement since the early days of TRICARE 

nearly 20 years ago. We have also engaged our long-time partner in such work, the 

world-renowned Customer Service Institute at Arizona State University, to conduct 

customer service gapping and blueprinting with the Phoenix VA and within our own 

organization. 

The very early indications are that this time-tested approach, mirroring that of 

the most highly regarded customer service brands in America, is beginning to yield 

results that matter. 

The customer experience under VCP is getting better with each passing day. Information provided by TriWest staff is more consistent and more accurate; providers 

are more familiar with the program; and we have recently begun an initiative that 

allows any provider in our region to register online with us to be a VCP provider. 

20 

Knowing who is willing to treat a Veteran under VCP, even if they are not already 

a TriWest network provider, will go a long way toward speeding up the appointing 

process. 

Additionally, we are updating our entire CRM system so that our staff and all 

of the VA staff across our regions who interact with us in the IT environment will 

have more information about each Veteran right at their fingertips. Construction of 

these brand new tools was conceived of through the collaborative process of which 

I just spoke. We have condensed design and testing of these new systems to weeks 

and are using a 24/7 build strategy in order to rollout the new tools just after Memorial Day rather than waiting until next year, which would be the case using normal construction schedules. 

It has been my experience that many customer service failures are due to the fact 

that line staff (those on the phone or on the ground) simply do not have access to 

the information needed to help a customer. When information is available, resolution of problems is possible. This new effort and these new tools will lead us down 

that road. 

That said, there are many improvements needed that will require longer-term 

planning, collaboration, and perhaps even legislative change to what you passed last 

Summer. And I would like to take a moment to discuss a few of those and how, 

if they are pursued, VCP and PC3 can help bring an entirely better experience to 

the Veteran in need of health care services. 

REFINING THE VETERANS CHOICE PROGRAM FOR THE FUTURE

One area I would respectfully suggest is in need of review is the 60-day authorization limitation in the VACAA statute. While we understand there were reasons to 

include the time duration limitation, I would respectfully suggest that it is leading 

to an increasing number of circumstances where quality and continuity of care are 

not the ultimate determining factors in the treatment of a Veteran. As a quick example, under the strictures of the statute, a Veteran sent through VCP for radiation 

oncology services because the local VA could not see him or her within 30 days, 

could have that service ‘‘recaptured’’ by VA after the first 60 days in the community 

if the local VA now has capacity. I am not a clinician. But, my Chief Medical Officer 

tells me that only under extreme circumstances should you change radiation oncology services in the middle of treatment. Yet, we understand that the statute leaves 

no alternative to continue that care through VCP. 

The same circumstance would apply to maternity care. If the initial appointment 

was more than 30 days out, a female Veteran could be sent through VCP to a community OB/GYN. However, after 60 days, VA would have to reassess their capacity 

and could recapture the care, requiring the Veteran to change provider mid-pregnancy. Again, I know there were reasons for the requirement. However, I would respectfully suggest a revaluation to allow for some flexibility when it is in the best 

interests of the patient. 

Additionally, I would respectfully suggest that there is a need to harmonize all 

of the disparate programs that now exist to provide non-VA (or community) services 

to Veterans. I noted earlier that voluntary use of the PC3 contract made it difficult 

to predict with any reasonable accuracy how much network would be needed for certain services and where that network was needed. It is also true that even if I can 

accurately predict network needs, it is difficult to convince providers to join a network when they already receive work directly from VA at better rates with fewer 

requirements. It sounds odd to say, but in some instances we’re competing against 

VA to provide services to VA. Harmonizing the programs in some manner would 

help alleviate this challenge. 

I also mentioned that without knowing, generally, the overall volume of services 

VA will need from my company, it is difficult to staff accurately for workload. But, 

again, it is difficult to predict workload when local facilities simply have options 

every day on the program through which they intend to purchase services. 

I think the net result of both of these challenges that stem in some manner from 

multiple different programs come through loud and clear in the recent IG report 

which found a lack of savings under the initial year of the PC3 program. The IG 

noted that there were instances in which timely appointing wasn’t available through 

TriWest or network providers were not close by. While I do not know the exact cases 

the IG reviewed, I know it is true that when workload exceeds our imperfect projections we find ourselves with inadequate network and a lack of staff. And that will 

lead to delays in appointing and difficulties finding providers. As an aside, I might 

note in response to another aspect of the IG report, that measuring first year savings of the PC3 program against implementation fees designed to cover five years 

of operations is a little bit of apples-to-oranges comparison. 

21 

Nevertheless, I am pleased to say that I understand VA intends to take some 

steps to create a hierarchy of options that local non-VA care staff will be expected 

to follow. This will go a long way toward providing everyone: VA staff, Veterans, 

community clinicians, and my team with the information we all need to bring timely 

care to Veterans using a consistent process with predictable rates. 

This new effort on VA’s part does lead me to one additional observation on what 

is needed for the long-term health of these programs. We must focus on a better 

collaborative planning process when changes are needed. 

I’ve noted at length the challenges we experienced in implementing VCP; partly 

due to the short implementation schedule. Yet, just in the last few weeks, we saw 

an implementation of VA’s new determination on eligibility under the 40-mile rule. 

I want to be clear and say that this is a tremendous change for Veterans. It is absolutely true that one of the most frequent complaints to our call center was the ‘‘crow 

flies’’ determination. However, there were only three weeks between the time it was 

determined that the rule would change and when VA sent out letters to just over 

128,000 Veterans in our three regions notifying them of this change. 

In just the first week following the letter, workload to our call center for VCP 

more than doubled. And, we understand that there are likely additional changes 

coming as well that VA is working on. 

The challenge will be to synchronize them effectively so that we have the best 

chance to make sure that sufficient staff are hired and trained to meet the increased 

demand, or to agree among all effected that the change needs to be made quicker 

and that it is acceptable for capacity to catch up to demand. 

Regardless, we are ‘‘All In’’! 

One of the areas I know that is being worked diligently within VA is how to ensure that the networks we are constructing and the providers who want to serve 

at our side in support of Veterans are being utilized. And, that is to be applauded. 

THE ART OF THE POSSIBLE

At the ground level, I am thrilled at the strong collaboration that is emerging all 

across our geographic area of responsibility. It is being supported by one of the superstars from our area, Joe Dalpiaz, as he is taking his time to completely engage 

at the side of his colleagues and me to fashion the ‘‘art of the possible.’’ 

We started with one of the largest facilities in the VA system, which is under his 

engaged and watchful eye, and sat down with the Director and non-VA care team 

to look at all of the demand they have for community services and where the VA’s 

needs are. Then, we produced an assessment of whether the network we have built 

is sufficient to meet VA’s full demand. Where a bit more service is needed, we are 

discussing the optimal strategy to bring it to a fully tailored state so that Veterans 

in that community will have exactly what they need, when they need 

it * * * whether it is from a VA medical facility or with a community provider. Of 

course, a Veteran will also be free to select a provider of their choice to the degree 

that one does not exist within VA or the network. 

This effort includes primary care and specialty care, to include behavioral health. 

And, I am confident of the success that will come from this completely engaged and 

collaborative effort, which will have each leader within VA knowing what they have 

at their disposal inside VA and in the community to meet the access needs of 

Veterans * * *. 

My confidence in this process is bolstered by the fact that this is exactly what 

we did together with DOD in TRICARE that led to phenomenal success in our area 

of responsibility and it is what we have now accomplished together with the VA 

leaders in Phoenix and Hawaii*** where networks are now completely tailored 

to demand. These early successes were the result of the great collaborative effort 

involving not only the local leaders and staff, but the tireless work of several in VA: 

Sheila Cain, Greg Frias and Tommy Driskill. 

We have prioritized the areas in which we will begin this work in collaboration 

with the VA leaders that Joe and I have met with over the last five weeks. This 

ensures that we can quickly move the needle once VA communicates its intention 

to the provider community that VCP is the pathway, and ensures its own staff on 

the ground is lined up behind the objective of this being the purchasing tool for care 

when it is unavailable in VA, or from a nearby DOD facility or academic affiliate. 

For the purpose of illustration, I would like to highlight what will come from this 

as it relates to one of the biggest needs at the moment*** timely and convenient 

access to behavioral health care. 

To be sure, VA is the gold standard in understanding the behavioral health needs 

of our Veterans. But, there are many instances in which we may be able to help 

22 

them free up space in VA for their most acute patients by working with providers 

in the community. 

Next, I am matching that demand (both behavioral health and all other services) 

against the network we have in the catchment area of the VAMC. And I am doing 

that in a fully transparent way right in front of the VAMC Director. Where I have 

what he needs, he will know it. And he will also know what I am missing. 

Next, the VAMC Director will begin notifying local providers that he will be sending all of his community care through PC3 and VCP and there will no longer be 

(with few exceptions) local, direct contracts. Then, my team will set out on an aggressive schedule to build the network that can fill in the gaps identified by the 

‘‘map-and-gap’’ analysis. Community providers will know that VA’s future purchasing will be through the consolidated network. We will provide regular updates 

to the team at the VAMC. And as network growth occurs, so too will workload, 

which means I can plan for the hiring and training of staff on a timeline to deliver. 

In the very long run, VAMCs can use this process to analyze ‘‘make/buy’’ decisions. Obviously, there is a tremendous need for many services at VA medical facilities. But, there are also many exigent circumstances that VA must confront in every 

community. Internal VA expansion may be desirable and justifiable. However, perhaps the physical space does not exist; the facility may be landlocked; or, most commonly, the community itself has a shortage of the type of providers VA requires to 

meet the needs of Veterans, which makes direct hiring difficult. 

In those instances, it is my hope that they will find a robust network to be an 

asset they can use in planning and delivering. Perhaps the marginal use of time 

from a dozen community providers can better meet the needs of the Veterans than 

hiring one internally because of some challenges I’ve just mentioned. And, perhaps 

hiring directly is the right thing to do. That decision should always rest with VA 

and Congress. 

To be clear, I am not suggesting in any way that PC3 or VCP should replace the 

direct care provided by the VA health care system. But, I do believe that greater 

knowledge of what is available locally from a network of providers could help VA 

in the long run plan for and deliver quality health care in a more timely fashion. 

I believe that is what you envisioned in the passage of VCP*** and, I believe 

the successful fulfillment of that vision in support of those who have borne a high 

cost in defense of freedom is very much the ‘‘art of the possible.’’ We look forward 

to doing our part as you refine and modify policies and authorities to give us the 

final tools that will be needed to accomplish the success that we all desire. 

CONCLUSION

Mr. Chairman and Members of the Committee, my colleagues and I at TriWest 

truly believe that if we are transparent about the needs and the shortcomings, collaborate together with VA to fill the gaps, and then implement them as quickly as 

possible, we will earn the trust of Veterans and collectively meet their needs. And 

believe me, I know we must earn this trust. 

Supporting the care needs of America’s Veterans is a tremendous honor and privilege for me, all of the employees of TriWest, our non-profit owners, and most importantly the providers in our markets that have leaned forward at our side to say we 

will serve a few of our fellow citizens when they have needs that are unable to be 

met by VA directly. We are humbled by the service and sacrifice of America’s Veterans and their example reminds us constantly of the high cost of freedom. We take 

our responsibility very seriously and VA, Veterans, and this Committee can be sure 

that our entire focus is on ensuring that our work in support of VA and the Veterans who rely on them for their care is fitting of the sacrifices of our heroes and 

is worthy of their trust. 

This concludes my formal testimony. I’d be happy to answer any questions you 

might have. 

Chairman ISAKSON. Thank you, Mr. McIntyre. 

Ms. Hoffmeier. 

STATEMENT OF DONNA HOFFMEIER, VICE PRESIDENT AND 

PROGRAM OFFICER, VA SERVICES, HEALTH NET FEDERAL 

SERVICES 

Ms. HOFFMEIER. Chairman Isakson, Ranking Member 

Blumenthal, and Members of the Committee, I appreciate the opVerDate Mar 15 2010 18:29 Jun 30, 2016 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6601 Z:\ACTIVE\051215.TXT PAULIN
23 

portunity to testify on Health Net’s administration of the Veterans 

Choice Program. 

Health Net is proud to be one of the longest-serving health care 

administrators of Government programs for the military and veterans communities. We are dedicated to ensuring our Nation’s veterans have prompt access to needed health care services and believe there is great potential for the Choice Program to help VA deliver timely, coordinated, and convenient care to veterans. 

In September 2013, Health Net was awarded a contract for three 

of the six PC3 regions. We implemented PC3 across our regions on 

a 6-month implementation schedule, completing implementation at 

the beginning of April 2014. Then in October, after Congress 

passed and the President signed the Veterans Access, Choice, and 

Accountability Act of 2014, VA amended our PC3 contract to include several components of the Choice Program. With less than a 

month to implement Choice, as Dave just mentioned, we literally 

hit the decks running—I am a Navy veteran, to use a Navy 

phrase—and we have not slowed down since. 

To meet the required start date of November 5, we worked very 

closely with VA and with TriWest to develop an aggressive implementation schedule and timelines. The ambitious schedule required 

us to hire and train staff quickly and to reconfigure our systems 

for the new program. 

Despite this very aggressive implementation schedule, on November 5, veterans started to receive their Choice cards, and they 

were able to call in to the toll-free Choice number to speak directly 

with a customer service representative about their questions on the 

Choice program or to request an appointment for services. 

Having said that, there certainly have been challenges that have 

resulted in veteran frustration as well as frustration on the part 

of VA and, to be honest, even our own staff, including call center 

and appointing staff. With such an aggressive implementation 

schedule, there was little time to finalize process flows and make 

system changes. We literally had less than a week from the date 

we signed a contract modification with VA to the actual go-live 

date. 

While the cooperation with VA since the start of the Choice Program has been good, there still is considerable work that needs to 

be done to reach a state of stability where the program is operating 

smoothly and the veteran experience is consistent and gratifying. 

We appreciate the opportunity to offer our thoughts on the future 

of the Choice Program. The Choice Program is a new program that 

was implemented in record time. As a result, there are a number 

of policy and process decisions and issues that are either unresolved or undocumented. If Choice is to succeed, these items might 

be addressed quickly. 

As I mentioned earlier, we have been working very closely with 

VA to address these issues. Many of the items simply could not 

have been anticipated before the start of the Choice Program. Others, however, should have been addressed before the program started, but the implementation timeline did not provide adequate time 

to do so. 

The identification of policy and operational issues and concerns 

has been occurring very quickly. As a result, we have struggled to 

24 

keep up with developments and to adequately train our staff with 

the most up-to-date and accurate information. This situation is not 

ideal. Based on these dynamics, we have one overall recommendation for moving Choice forward. 

We recommend VA develop a comprehensive, coordinated operational strategy for Choice that clearly defines the program requirements, the process flows, and rules of engagement. This strategy should provide a clear road map for all of us to follow, one that 

is communicated to all the stakeholders: VA leadership, VISN Medical Center leadership and staff, both contractors, Congress, and, 

most importantly, the veterans. 

While the strategy needs to identify key initiatives and reasonable timelines for implementing those initiatives, it also needs to 

contain the flexibility to address issues as they arise and make necessary course corrections. The strategy must include resolution of 

outstanding policy and process issues; development of policy and 

operational guides that are mandated across the program; comprehensive training of both VA and contractor staff using consistent process flows, operational guides, and scripting; and a clear 

and responsive process for resolving legitimate issues and 

challenges. 

In closing, I would like to thank the Committee for its leadership 

in ensuring our Nation’s veterans have prompt access to needed 

health care services. We believe there is great potential for the 

Choice Program to help VA deliver appropriate, coordinated, and 

convenient care to veterans. We are committed to collaborating 

with VA to ensure the Choice Program succeeds. Working together 

with the leadership of this Committee, we are confident that 

Choice will deliver on our obligation to this country’s veterans. 

Thank you. I look forward to your questions. 

[The prepared statement of Ms. Hoffmeier follows:] 

PREPARED STATEMENT OF DONNA HOFFMEIER, PROGRAM OFFICER, VA SERVICES, 

HEALTH NET FEDERAL SERVICES

Chairman Isakson, Ranking Member Blumenthal, and Members of the Committee, I appreciate the opportunity to testify on Health Net’s implementation and 

administration to date of the Department of Veterans Affairs’ (VA) Patient-Centered 

Community Care (PC3) and Veterans Choice programs. 

A HISTORY OF PARTNERSHIP

Health Net Federal Services is proud to be one of the largest and longest serving 

health care administrators of government and military health care programs for the 

Department of Defense (DOD) and Department of Veterans Affairs (VA). Health 

Net’s health plans and government contracts subsidiaries provide health benefits to 

more than five million eligible individuals across the country through group, individual, Medicare, Medicaid, TRICARE, and VA programs. 

For over 25 years, in partnership with DOD, Health Net has served as a Managed 

Care Support Contractor in the TRICARE Program. Currently, as the TRICARE 

North Region contractor, we provide health care and administrative support services 

for three million active-duty family members, military retirees and their dependents 

in 23 states. We also deliver a broad range of customized behavioral health and 

wellness services to military servicemembers and their families, including Guardsmen and reservists. These services include the worldwide Military and Family Life 

Counseling (MFLC) program providing non-medical, short-term, problem solving 

counseling, rapid-response counseling to deploying units, victim advocacy services, 

and reintegration counseling. 

As an established partner of VA, Health Net has collaborated in supporting Veterans’ physical and behavioral health care needs through Community Based Outpatient Clinics (CBOCs) and the Rural Mental Health Program. We also have supVerDate Mar 15 2010 18:29 Jun 30, 2016 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6621 Z:\ACTIVE\051215.TXT PAULIN
25 

ported VA by applying sound business practices to achieve greater efficiency in 

claims auditing and recovery, and previously through claims re-pricing. It is from 

this long-standing commitment to supporting the military and Veterans community 

that we offer our thoughts on the role of PC3 and Choice in augmenting VA’s ability 

to provide eligible Veterans with timely access to needed health care services. 

THE EVOLUTION OF PC3 AND CHOICE

The Department of Veterans Affairs developed Patient-Centered Community Care 

(PC3) to provide eligible Veterans access to health care through a comprehensive 

network of community-based, non-VA medical professionals. Care is available 

through PC3 when local VA medical centers cannot readily provide the needed care 

to Veterans due to limited capacity, geographic inaccessibility or other limiting factors. Services available through PC3 include primary care, inpatient specialty care, 

outpatient specialty care, mental health care, limited emergency care, limited newborn care for enrolled female Veterans following delivery, skilled home health care, 

and home infusion therapy. 

In September 2013, Health Net was awarded a contract for three of the six PC3 

regions. These regions include 13 of 21 VISNs; 90 VA medical centers in all or part 

of 37 states; Washington, DC; Puerto Rico; and the Virgin Islands. 

Figure 1: Health Net Federal Services’ Contracted PC3 Regions 1, 2 and 4 

Region 1: VISNs 1, 2, 3, and 4 

Region 2: VISNs 5, 6, 7, and 8 

Region 4: VISNs 10, 11, 12, 19, and 23 

Health Net phased in implementation of PC3 across our regions during a six 

month implementation period, with services starting for the first VA medical centers 

on January 6, 2014. We completed implementation of all remaining VA medical centers by April 1, 2014. Originally covering only specialty care, the PC3 program was 

expanded to include primary care in August 2014. 

In August 2014, with the leadership of this Committee, Congress passed and the 

President signed into law the Veterans Access, Choice, and Accountability Act of 

2014 (VACAA, Public Law 113–146, ‘‘Choice Act’’), which directed the establishment 

of a new program to better meet the health care needs of Veterans. The law directs 

the establishment of a Veterans Choice Card benefit that allows eligible Veterans 

who are unable to get a VA appointment within 30 days of their preferred date or 

the date medically determined by their physician; reside more than 40 miles from 

the closest VA healthcare facility (there are different mileage rules for some states, 

such as New Hampshire and Hawaii); or face other specific geographic burdens in 

traveling to a VA facility to obtain approved care in their community instead. 

In October, VA amended our PC3 contract to include several components in support of the Choice Act such as production and distribution of Choice Cards; establishment of a Choice call center to answer Veteran’s questions about the Choice program and to verify eligibility for it; appointing services for eligible Veterans with 


512psHOFmap.eps
26 

Choice-eligible community providers; and claims processing. Since VACAA required 

implementation by November 5, 2014, we worked collaboratively with VA and 

TriWest (the contractor for the other three PC3 regions) to develop an implementation strategy with extremely aggressive timelines. This ambitious schedule allowed 

for minimal time to hire and train staff and to reconfigure our systems for the new 

program, which contains many requirements that differ from PC3 and therefore 

have to be tracked and recorded separately. Despite the fast-paced implementation 

schedule, on November 5th, Veterans started to receive their Choice Cards and were 

able to call in to the toll-free Choice telephone number and speak directly with a 

customer service representative about the Choice program. 

ENGAGING COLLABORATIVELY

From the start of discussions on implementation of VACAA, the VA Chief Business Office, Contracting Office, and senior VHA officials have worked closely with 

both contractors to establish priorities, provide policy guidance and develop process 

flows. As Choice implementation progressed, more policy and process items were 

identified. We collectively agreed to establish a Steering Committee and several 

Work Groups to address these items and to provide an effective forum for VA to 

provide clear policy decisions and program requirements. 

This approach has been valuable in identifying policy and process gaps, facilitating decisionmaking designed to resolve any issues, and ensuring consistency 

across all regions. We have committed to making the appearance of the programs 

seamless for Veterans across the country, regardless of where they reside or which 

contractor provides service. 

A key component to the success of both PC3 and Choice is acceptance by community providers. To accomplish our goal of providing Veterans with timely access to 

care in the communities in which they reside, Health Net proactively recruits providers to both PC3 and Choice. This is another area of collaboration with VA. In 

addition to public-facing, self-service information found on the Health Net Web site, 

we have attended community conferences to educate and engage providers. 

A specific example of collaboration between VA and the Choice contractors to educate and engage providers is the effort to integrate federally Qualified Health Centers (FQHCs).We are working very closely with VHA’s Office of Rural Health on this 

effort, and participated with VA at the National Rural Health Association annual 

conference and National Association of Community Health Centers webinar. In addition, we have been very successful in working with the Virginia Primary Care Association to contract 26 FQHCs as VA Choice providers; our approach to outreach 

in Virginia has become a model we will pursue in other states. This collaborative 

effort has been invaluable in engaging the FQHCs—to date, we have recruited a 

total of 115 FQHCs to participate in Choice (27 FQHCs) or join our PC3 network 

(88 FQHCs). 

RESULTS TO DATE

Under PC3, from program inception in January 2014 through April 13, 2015, VA 

has provided Health Net with over 150,000 authorizations for care in 75 specialty 

areas and primary care. The top six areas of specialty care, comprising about 50 percent of authorizations include: optometry, physical therapy, podiatry, primary care, 

orthopedics, and colonoscopy. To meet demand, Health Net’s network presently includes almost 76,600 providers. Since the beginning of April 2015, Health Net has 

successfully recruited over 4,200 additional providers, including 27 hospitals. 

Since the inception of the Choice program in November through the beginning of 

May, 2015, we have answered about 550,000 calls, with the vast majority of those 

calls coming from Veterans seeking information on Choice or requesting an authorization for care. About 30,000 Veterans have opted-in to the Choice Program with 

almost two-thirds eligible based on wait time. About 16,500 authorizations have 

been made for wait list eligible Veterans and nearly 10,000 authorizations have 

been issued for mileage-eligible Veterans. With the recent change in eligibility criteria based on driving distance, we expect a significant increase in demand for care 

for mileage eligible Veterans. 

MOVING FORWARD

Implementation of any new program is challenging, particularly when the change 

is significant and the implementation period is condensed into a very short timeframe. Working collaboratively with VA and our colleagues at TriWest, we were able 

to effectively stand up the Choice Program by November 5th, as required by the 

statute. In achieving this milestone, Choice cards were mailed out to all Veterans 

identified as eligible by VA, calls to the Choice 866 number were answered promptVerDate Mar 15 2010 18:29 Jun 30, 2016 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6621 Z:\ACTIVE\051215.TXT PAULIN
27 

ly, and Veterans have been able to exercise the option of obtaining care within their 

local community when the VA capacity is limited or the VA facility is far from the 

Veteran’s home. Having said that, we know there have been bumps in the road with 

the accelerated rollout of Choice—delays in eligibility information being available, 

confusion over program details, and incorrect or sometimes conflicting information 

provided to Veterans. These bumps have understandably caused a level of Veteran 

frustration. 

While the collaboration with VA since the start of the Choice program has been 

solid, there still is considerable work that needs to be done to resolve outstanding 

policy and process questions, adequately ensure appropriate staff training, conduct 

provider outreach, and enhance Veteran education. To that end, we would like to 

offer a few key recommendations for enhancing Choice we believe will facilitate 

achieving a state where the program effectively optimizes VA capacity and enables 

VA to provide all eligible Veterans with access to the care they need in a consistent 

and gratifying manner. 

1. Consolidate non-VA programs 

Currently, there are multiple options for non-VA care, including Choice, PC3, local 

agreements/direct contracts and individual authorizations (‘‘Fee’’). Each option has 

different reimbursement levels, different requirements for community providers (requirements for return of medical documentation, credentialing, etc.), and different 

‘‘administrators’’ (VA Medical Center non-VA care staff, VA contracting staff, PC3/ 

Choice contractors). These various options create enormous confusion with non-VA 

(community) providers, Veterans, VA Medical Center staff and contractor staff. Reducing the number of non-VA care options would help to reduce confusion. 

We understand VA is about to address this issue. We commend VA for its efforts 

to resolve the challenges created by these multiple options for delivering care to Veterans when VA lacks the capability or capacity to provide it directly. VA has informed us of a number of key initiatives being planned to streamline non-VA care 

and to ensure Veterans have access to Choice. We fully support these efforts. 

To ensure success as we move forward in support of Choice, we recommend VA 

develop a coordinated implementation strategy that clearly defines each initiative 

and lays out an execution schedule that is both aggressive and achievable. Currently, we receive around 10 percent of the non-VA care volume through PC3 and 

Choice. Moving from 10 percent to 100 percent requires a well-defined road map 

that is communicated to all key stakeholders—VISN and VA Medical Center leadership and staff, both contractors, Congress and most importantly, Veterans. As this 

effort moves forward, it is critical that certain steps be taken: 

• Outstanding policy and process issues must be resolved • Comprehensive training of VA and contractor staff must be conducted using 

consistent process flows and scripting • Policy and operational documents and/or manuals should be developed and 

provided for use by VA facilities and both contractors 

2. Eliminate unnecessary impediments to community provider participation 

Consolidating options into one approach that also minimizes VA-unique requirements for community providers would have a very positive impact on the willingness of community providers to participate in Choice. Specific community provider 

challenges and impediments to participation include: 

• Medical documentation requirements that are not consistent with commercial/community standards. VA requirements for medical documentation are 

often more detailed than accepted standard of practice in commercial health 

care. For example, PC3 and Choice require specific elements, short timelines, 

and provider signatures. VA asks for more documentation and more specific detail, such as provider social security numbers, than is typically provided in private sector health care. In addition, many of these requirements are not present 

in other non-VA care options. 

• Delays in payment of medical claims due to return of medical documentation. Providers are not paid until medical documentation is returned and accepted by VA. This delays payments to providers who have already legitimately provided the services and complied with the requirements to return medical documentation. Continued delays in payment will result in dwindling community 

provider participation and access problems could return. 

• High level of appointment no-shows in the community. Currently, we are 

required to schedule appointments for Veterans we are unable to reach by 

phone, and then notify these Veterans of their appointment by mail. This process increases Veteran no-show rates and causes frustration with community 

providers. Community providers have no ability to bill VA for these no-shows, 

28 

nor can providers bill the Veteran a fee. This process also creates frustration 

for VA Medical Center staff because Veterans show up for VA appointments 

that may have been canceled due to their scheduled community appointment. 

More importantly, it means Veterans may not receive needed care in a timely 

manner. We think a modification to this process would reduce community provider reluctance to participate. • Confusion on where to send documentation and claims. This issue is largely 

related to multiple non-VA care options and would be substantially aided by a 

more coherent (and smaller) set of options in non-VA care programs. • Lack of timely follow-up for authorizations on needed additional services requested by provider for appropriate clinical care. PC3 and Choice services are 

authorized for ‘‘episodes of care.’’ Once an episode of care is complete, additional 

authorizations are necessary, even for follow-on care that is normally considered 

standard of practice. This issue currently is being addressed by VA and much 

progress has been made already to ensure timely approval of requests for additional services. We appreciate VA working collaboratively with us to address 

this challenge. 

• Primary care in 60 day increments for 30 day wait list eligible Veterans is 

difficult for primary care providers outside of urgent care settings. 

• The 60-day limit on an episode of care under the Choice program creates 

challenges in certain clinical areas, such as chemotherapy, radiation oncology, 

and complicated obstetrics. With these types of care, it could be harmful to 

bring the patient back to VA part way through a course of treatment because 

the VA has availability at the 60 day point and the patient is no longer wait 

list eligible. There is similar risk if the patient changes address during a course 

of treatment but is still close enough to receive care from the Choice provider 

but is no longer eligible by distance criteria. Some flexibility to support continuity of care when it is important to veteran outcome would be very helpful. 

COMMITTED TO VETERANS’ CHOICE

In closing, I would like to thank the Committee for its leadership in ensuring our 

Nation’s Veterans have prompt access to needed health care services. We believe 

there is great potential for the Choice program to help VA deliver appropriate, coordinated, and convenient care to Veterans. We are committed to continuing our collaboration with VA and TriWest to ensure Choice succeeds in providing Veterans 

with timely access to care when VA is unable to provide it. Working together, and 

with the support and leadership of this Committee, we are confident that the Choice 

Program will deliver on our obligation to this country’s Veterans. 

Chairman ISAKSON. Well, thank you all very much. I had all 

these preplanned questions, but after listening to your testimony, 

I have canceled all of them. I am going to ask the ones you have 

raised in your testimony, starting with you, Mr. McIntyre. 

It was quick, so I want to make sure I got it. You were encouraging us to look at the 60-day authorization of what? 

Mr. MCINTYRE. I would look at the limitation on 60 days for authorized care under Choice. It puts people who have cancer in a position where we need to move them back and forth between the VA 

medical center. It takes a person who might be with us under 

Choice because of a pregnancy and does the same. I do not think 

that was intended. I think it was intentional that there were parameters drafted around it, but the notion that certain types of 

care would have to move back and forth between the VA medical 

center and downtown is neither efficient nor effective in the delivery of care. 

Chairman ISAKSON. All right. I do not want to spend too much 

time on this, but this is very important, I think, from listening to 

your testimony and watching everybody’s heads bob. You want to 

expand the 60-day authorization to a longer period of time? 

Mr. MCINTYRE. I think I would leave it to the clinicians in the 

Department of—— 

Chairman ISAKSON. No, you are not getting off with that. 

29 

Mr. MCINTYRE. OK. I will not get off with that. [Laughter.] 

I got it, sir. What I would do is to evaluate which types of care 

need authorizations that would last more than 60 days. And—— 

Chairman ISAKSON. So, what you are saying is the 60-day limitation causes things like some cancer treatments, a pregnancy, for 

example, and things like that, for the patient to have to go back 

and forth between private and VA health care because of the 60- 

day limitation? 

Mr. MCINTYRE. The administrative process requires us to go back 

and forth in support of that veteran when it is probably unnecessary, is what I would submit. 

Chairman ISAKSON. That is like Medicare’s two-night rule in the 

hospital. 

Mr. MCINTYRE. Yes, sir. 

Chairman ISAKSON. It is one of those unintended consequences. 

Mr. MCINTYRE. Yes, sir. 

Chairman ISAKSON. Is there any reason we cannot fix that? 

Mr. GIBSON. We are going to work on it, and we will come back 

to you with a proposal. We think—— 

Chairman ISAKSON. It seems to me it would be more cost-effective to the VA to do it, to fix it, rather than go back and forth, because there has got to be money involved every time you are doing 

that. Is that right? 

Mr. GIBSON. Yes, sir. There is a fee that is paid for each authorization, but the bigger concern is the potential disruption to the 

veteran. 

Chairman ISAKSON. Efficiency is always less expensive, and that 

is more efficient, it seems like to me. 

Mr. MCINTYRE. Yes. 

Chairman ISAKSON. I appreciate your raising that in your testimony. 

Mr. MCINTYRE. You are welcome, sir. 

Chairman ISAKSON. Ms. Hoffmeier, do you have any credit cards? 

[Laughter.] 

I do not want them. I just want to know if you have got—— 

Senator BLUMENTHAL. You have the right to remain silent. 

[Laughter.] 

Ms. HOFFMEIER. I am trying to think, which ones do I acknowledge? Yes, sir, I do. 

Chairman ISAKSON. OK. Let me ask: do you ever get the annual 

mailing of the required Government notification of security? It is 

about four pages long, and the print is so small you cannot read 

it, and you do not read it anyway. 

Ms. HOFFMEIER. I think that goes right in the recycle bin, Mr. 

Chairman. 

Chairman ISAKSON. OK. In your testimony I heard from you a 

clear statement that we needed to simplify and coordinate the instructions, the rules, and the processes under which Veteran 

Choice works. Is that right? 

Ms. HOFFMEIER. It is, Mr. Chairman. 

Chairman ISAKSON. I—go ahead. 

Ms. HOFFMEIER. As I said in both my written statement and 

opening remarks, everything has been moving very, very quickly, 

and as a result, there are a number of things that maybe have not 

30 

been addressed as completely, as ideally, as we would all like to 

see, which makes it really difficult. I mean, it is hard for us—you 

know, we talk about this at our level—to keep up with everything. 

You are talking about call center representatives and appointing 

clerks that are trying to keep up with all of the developments. 

Somehow we have to find a way to make it easy, not for us to understand, but for the people that are working closely with veterans 

to make this program work. They need to understand it. 

Chairman ISAKSON. That goes a little bit further than just to you 

all. I think the veteran needs to have it simpler to understand, too. 

All the stuff that I did as a businessman, we served people with 

college degrees and master’s degrees, but we wrote everything to 

an eighth-grade level, which is what the newspapers do as well, because that is the way you can communicate to the majority of the 

American people. Some of these things—I have not read any medical instructions, but some of these things I read on drug notices 

when I get my drugs, you know, my regular drugs, the real 

ones—— 

[Laughter.] 

Chairman ISAKSON [continuing]. Prescriptions. You read all these 

things you are not supposed to do or you are supposed to watch out 

for. It is so long and so cumbersome I cannot understand it, so I 

do not do the right thing sometimes. I think that could be our veterans as well on the instructions they are getting. 

Deputy Gibson, I would hope what all of you would do is work 

together to find some ways to simplify the communication mechanism to the beneficiary, which is the veteran, and the provider, 

which is the local provider, in Veterans Choice. I know it is complicated and I am not trying to oversimplify, but sometimes out of 

fear of—or out of a desire to make sure we have covered everything, we cover so much that we do not accomplish the goals. I appreciate both of you raising that in testimony. 

My last question is going to be of Mr. Gibson until we come back 

for a second round, if we do. You kept talking about you wanted 

us to give you more flexibility. 

Mr. GIBSON. Yes, sir. 

Chairman ISAKSON. Put some meat on that bone. Flexibility on 

what? 

Mr. GIBSON. Well, I would say at the very top of the list is flexibility around the determination of hardship for veterans to be able 

to have access to Choice care. The way the law is written today, 

it is restricted to geographic barriers, I think is the language that 

is in the bill. We want to open that aperture, which would give us 

much more flexibility to be able to extend care under Choice to 

veterans. 

Chairman ISAKSON. Open that aperture, to be a type of illness? 

Mr. GIBSON. It could be a type of illness; it could be distance. 

There could be an instance where a veteran lives within 40 miles 

of a VA facility that does not deliver the case, and we want to be 

able to refer the care into the community while we are working on 

the intermediate term—— 

Chairman ISAKSON. In other words—my time is up, so I am going 

to interrupt you, and I apologize. 

Mr. GIBSON. Yes, sir. 

31 

Chairman ISAKSON. In other words, you want the ability to exercise judgment—— 

Mr. GIBSON. Yes, sir. 

Chairman ISAKSON [continuing]. In what you do in terms of 

hardships. 

Mr. GIBSON. Yes, sir. 

Chairman ISAKSON. You want the chance to exercise judgment in 

terms of the 60-day authorization. Is that right? 

Mr. GIBSON. Yes, sir. 

Chairman ISAKSON. OK. There ought to be ways that we can accomplish both of those things. 

Mr. GIBSON. Yes, sir. 

Chairman ISAKSON. I think in raising those things, Dr. 

Tuchschmidt is really excited about that answer, or either he needs 

to leave, one or the other. I do not know. [Laughter.] 

Chairman ISAKSON. Whatever the case is, you can help us write 

that? Because you think those are both determinations we ought to 

be able to do. Your flexibility on the 60-day authorization sounds 

to me more cost-effective and less expensive. Yours probably raises 

some cost questions like are raised anytime you do things like that. 

In the end, again, we have got to remember the person we want 

to serve is the veteran. 

Dr. TUCHSCHMIDT. Yes. 

Mr. GIBSON. Yes. 

Chairman ISAKSON. Denying them service because of a misapplied hardship is not the right thing to do. 

Mr. GIBSON. Yes. 

Chairman ISAKSON. Ranking Member Blumenthal. 

Senator BLUMENTHAL. Thanks, Mr. Chairman. 

Just at the outset, let me say that you will be asked shortly by 

Senator Sanders, I believe, about the letter that he has written to 

Secretary McDonald urging that he use his authority as Secretary 

of Veterans Affairs to break patents on hepatitis C medications for 

the treatment of veterans suffering from that disease. I would 

strongly urge that you consider using your authority under 28 U.S. 

Code Section 1498 to take that action that will make this medication more widely available to veterans who need and deserve it, especially since the VA was involved through one of its employees in 

the research that undertook this initiative and successfully reached 

the result. 

I want to focus for the moment on the VA’s proposal to fund construction costs at the Denver facility, specifically the $1 billion cost 

overruns out of the Choice Program’s provisions for long-deferred 

maintenance and facility capacity issues in the VA system. These 

funds were very specifically designated and intended by Congress 

to improve veterans’ health care. 

Veterans in my State who are aware of this proposal are absolutely outraged that their health care, specifically the primary care 

upgrade at the West Haven facility, would be indefinitely deferred 

because of $1 billion cost overruns in Aurora, CO. I suspect the 

same reaction will be felt equally deeply by veterans at the more 

than 220 other facilities whose health care will be compromised as 

a result of the proposed redesignation of these funds. 

32 

I would like assurance from you, Secretary Gibson, since we are 

talking here about Choice Program funds and we are talking about 

not just a few dollars here or there but actually one-fifth of all the 

funds in that $1 billion pot, that you are considering alternatives 

to that action. 

Mr. GIBSON. Senator, we have sent a letter earlier today to this 

Committee, to the House Committee, and to the Appropriations 

Committee requesting the increase in the authorization to be able 

to complete that facility as well as requesting the use of $730 million of those $5 billion to be used to complete the Denver facility. 

We have identify $100 million—— 

Senator BLUMENTHAL. Well, I just want to interrupt you because—and I apologize—for me that alternative is a nonstarter. It 

is just unacceptable, and I have expressed that view to appropriate 

administration officials. I realize that you are dealing the hand you 

were dealt. I am simply urging you to consider alternatives. There 

are alternatives, in my view, responsible and available alternatives 

that do not involve deferring health care improvements through 

construction and maintenance at those facilities across the country, 

whether in Connecticut or Georgia or Montana or Louisiana or 

Vermont, and all the other States represented on this Committee, 

as well as many who are not. 

Mr. GIBSON. Senator, in years past I would tell you it is very 

likely that if VA had gone looking for that kind of money, there is 

a pretty good chance that we could have found it. But because of 

the work that we have been doing over the past year to accelerate 

access to care, to make hepatitis C care available to veterans, 

under the circumstances, we do not have $700 million sitting on 

the sideline. There are no easy answers here. 

Senator BLUMENTHAL. I am not asking you to find $1 billion sitting on the sideline. But this Nation is capable of doing better for 

its veterans, and a supplemental appropriation, for example, might 

be an alternative. I am asking you to go back to the drawing board 

and use different pencils, not necessarily sharpened pencils but different alternatives to compensate for the absolutely unacceptable 

cost overruns and delays in Aurora. The project should be completed, but not at the sacrifice of health care for other veterans 

around the country. What I say to you today is not personal to you 

or to Secretary McDonald, and we have talked at great length 

about this issue. We have visited that facility together along with 

the Chairman. I have seen that vast hulking shell of a campus that 

is a mockery of Government contracting. 

We need to address this situation to complete the project, but it 

cannot be done in effect at the sacrifice of other veterans. 

My time has expired. I apologize for interrupting you, and I 

thank the witnesses for being here today. 

Chairman ISAKSON. I would not ordinarily do this, but in light 

of the question that was raised and for the benefit of everybody at 

the Committee just to know—and I do not want this to limit anything anybody says, but I think we all have an obligation to ourselves to make out-of-the-box suggestions on what we do about the 

cost overruns at Denver, particularly those of us that have been 

there and seen it. I have taken a couple of actions which I will 

share with the Committee leading up to a meeting we are going to 

33 

have tomorrow where I have got the Democrats and the Republican 

leaders coming together to say, ‘‘OK, what are we going to do with 

this?’’ Which I hope the VA people are back in their offices saying, 

‘‘What are we going to do with this, too?’’ not just saying there is 

nothing we can do. 

I have ordered GAO to do a study of surplus property and that 

which would be liquidatable to try and find a way to raise money 

to go to Veterans Choice to offset what might be borrowed from it, 

which you are dealing with a situation where you have got until 

about May 20, is about as much time as we have got right now. 

We need to get at least to July 15, and we have a way to do that. 

It is going to take an action of this Committee, but getting us to 

July 15 only gets us time to determine how close to $700 million 

it is we need, first of all, with the Corps and the Veterans Administration working together to do that. 

In that time period, we are going to have to have some interim 

bridges, which I am working on to present to the Committee tomorrow. But if everybody on the Committee would think outside the 

box, if it was your problem, if you were in Secretary McDonald’s 

place or Deputy Gibson’s place and you had inherited a $700 million shortfall and ran an agency that is the second biggest in the 

Government, where would you go looking? 

I want Sloan to revisit the two places I mentioned to him in Denver, because it seems like to me if we are going to take you out 

of the construction business, which we are—and that is going to 

happen, at least to a certain major extent—there are going to be 

savings in that appropriation unit within your department, and 

also look at the 77 FTEs you are asking for an increase in the current budget, maybe those FTEs are not as necessary as helping to 

build that hospital in Denver. I think if everybody is making a contribution like that—it is like that movie, ‘‘Dave,’’ when the guy became President, he was a fill-in for somebody. He called the Cabinet in, they got a yellow pad out, and they started working on solutions. We need to get the yellow pad out and start working on solutions and find a way to do it, because not building the hospital is 

unacceptable, and just saying we are going to borrow funds from 

the veterans health care benefit, I agree with Mr. Blumenthal, is 

not the right way to do it. 

I apologize for interjecting that, but I wanted everybody to—— 

Senator BLUMENTHAL. I want to thank the Chairman because he 

and I have worked together. I am not speaking for the Chairman, 

obviously, but I have some alternative suggestions as well. I have 

no pride of authorship—I do not think any of us does—in meeting 

the needs of completing that facility, but doing it without sacrificing these other projects. So, I will have some specific ideas and 

proposals tomorrow, as well. 

Chairman ISAKSON. My apologies to all the Members of the Committee for taking a little time, and I will turn now to Senator 

Moran. 

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

Senator MORAN. Mr. Chairman, thank you, and Senator 

Blumenthal, for your comments and for conducting this hearing. 

Mr. Secretary and others, welcome to the Committee. 

34 

I hope to ask a series of questions, but the time on the clock will 

run quickly. I want to start with a story that I have told before 

about a Vietnam veteran named Larry. Larry McIntyre lived in 

Florida and indicates that he is a Vietnam veteran, a swift boat 

Navy veteran. He indicates while he was in Florida he received excellent care from the VA; moved to rural Kansas, became my constituent; lives about 25 miles from a CBOC and about 3 hours from 

a hospital. I started this story or this story began in July 2014 

when Larry, this Vietnam veteran, needed a cortisone shot. The 

VA’s instructions were, ‘‘Come to Wichita,’’ so a 3-hour drive each 

way to get a cortisone shot. 

We raised this topic with Secretary McDonald at a hearing here 

on September 9. Larry had contacted us and said, ‘‘I do not care 

how it comes, the Choice Act or any other way that the VA can provide this service.’’ We raised this topic with the Secretary in September of last year. Then shortly thereafter, the VISN Director in 

Kansas City took this issue to heart and at least solved the problem but, unfortunately, temporarily. 

In December, Larry was granted an appointment in Hays, the 

place where the CBOC exists—I should say the CBOC that does 

not offer cortisone shots, but he got care in the private sector in 

December of last year. 

The doctor who treated him, who provided the colonoscopy, then 

asked to treat him again and to follow up. The VA denied that request and sent him back to Wichita. They denied that request because he was not eligible for Choice. The CBOC exists within the 

40 miles of his home. 

He is back to Wichita. Ultimately he then needed—instead of a 

cortisone shot—a colonoscopy. Same series of events. The outpatient clinic does not provide colonoscopies, and he is trapped in 

this system of no one telling him what he can do or what he qualifies, except he does not qualify for Choice, go to Wichita. He has 

done that, but then just recently, last week, he received a letter 

from the VA approving him for Choice. He then calls TriWest, and 

TriWest says, ‘‘You are not eligible. We do not have you on our 

list.’’ ‘‘But I got this letter.’’ He indicates that he talked to four different operators at TriWest, all who gave him a different answer 

than anyone else, than the three other operators. 

He called the 866 number and was told he was not eligible, got 

the four different answers, and now we are back to the question of 

what happens to Larry. My point here is, one, it ought not be 

Larry’s problem to solve what happens to Larry; but even from the 

beginning, if he was not eligible for Choice, and even if he is not 

eligible today because the CBOC is there, even though it does not 

provide the colonoscopy or the cortisone shot, why is someone not 

at TriWest or the VA telling him, ‘‘Oh, we have these other authorities; this would work for you,’’ as compared to just leaving 

Larry hanging about whether he is eligible and what he should do? 

How do we solve that problem? I do not think it is totally unique. 

I hope it is, but I doubt that Larry is the only veteran that experiences this circumstance. 

Mr. GIBSON. I doubt that the problem is unique. I suspect there 

are other veterans that are having similar experiences. 

35 

As I described in my opening statement, we are asking for additional flexibility which would give us some more authority to be 

able to handle that kind of situation inside Choice. We actually 

handle many of those situations through other VA care in the community routinely, which is why we have incurred so much expense 

on a year-to-date basis. But we find ourselves running out of resources in order to be able to sustain that. We wind up making 

suboptimal decisions. 

I would tell you, you have just given two great examples. The 

Chairman asked earlier about whether or not we would be using 

judgment around the nature of the procedure. The answer is yes. 

I would tell you, for someone that has a routine requirement like 

a cortisone shot, there is no reason to travel 150 miles to go do 

that. That is something that ought to be getting done—we ought 

to be getting done locally. 

For the veteran that has to go get a colonoscopy, I got to tell you, 

I am not going to drive 150 miles to go get a colonoscopy. That is 

not going to happen. That is something else that needs to be provided for inside the community. 

Now, if a veteran needed a knee replacement, I might say, you 

know, ‘‘OK, under the circumstances make the trip.’’ But for the 

therapy that has to follow up after that, no, I do not want the veteran traveling 150 miles each time he needs to go to physical 

therapy. 

The challenge that we have is 40 miles from where you can get 

the care. We keep running the numbers, and the tab is horrendous. 

It is huge. What we have got to do is find a way to be able to manage this in such a way that we are doing the right thing for veterans at the same time we are being the best stewards we can of 

the taxpayer dollar. 

Senator MORAN. Mr. Secretary, as you know, you and I have had 

a number of conversations on this topic, and today I am not arguing—I would argue, given the chance, but I will not argue today 

about whether or not—or how the 40 miles should be interpreted. 

My point on this episode, one, is the uncertainty and the burden 

lying in the wrong place. It ought to lie with the VA or TriWest, 

not the veteran. My second point is that if you have these other 

authorities, whether or not Larry qualifies for the Choice Act ought 

not matter in the answer he gets. 

Mr. GIBSON. I agree completely. 

Senator MORAN. Thank you. 

Chairman ISAKSON. Thank you, Senator Moran. 

Senator Sanders? 

Senator SANDERS. Senator Manchin has kindly yielded to me because I have got to run out the door. 

Chairman ISAKSON. To the gentleman that has got to run out the 

door, Senator Sanders. 

STATEMENT OF HON. BERNARD SANDERS, 

U.S. SENATOR FROM VERMONT 

Senator SANDERS. Thank you, Mr. Chairman. Thank you for the 

work that you have been doing and for your maintaining the bipartisan spirit of this Committee. Congratulations for all you are 

doing. 

36 

Chairman ISAKSON. Thank you. 

Senator SANDERS. I want to just make two points. 

First of all, I want to thank Deputy Secretary Gibson and his 

boss, Secretary McDonald, for the very impressive work they are 

doing. I understand, as the former chair of this Committee, how 

easy it is to beat up on the VA, running 151 medical centers, 900 

CBOCs, and there is a problem every single day. But, you know 

what? In a Nation which has a dysfunctional health care system, 

the private sector also has one or two problems. I will not go into 

them, but I think we should recognize that when you talk to the 

major veterans organizations—the American Legion, the VFW, the 

DAV, the Paralyzed Veterans of America—you know what they 

say? You have heard this, Mr. Chairman. They say that when people walk into the VA, the quality of care they get is pretty good. 

I want to thank you for trying to improve that care. I personally 

will fight vigorously those who want to privatize the VA or dismember the VA. I think our goal is to strengthen the VA. I think 

our goal is to be creative in terms of using the new program that 

we have developed so that people can get care in their community 

locally. That is a good mix. I will oppose efforts to privatize the VA, 

which is serving our veterans so very well. 

I wanted to get to another issue, and Senator Blumenthal 

touched on it. Today I wrote a letter to Secretary McDonald about 

an issue that has concerned me for a while, and that is the high 

cost of the drug Sovaldi, which is a miracle drug, so to speak, 

which is now treating the veterans of our country who have very 

high rates of hepatitis C. 

Mr. Chairman, to me it is an outrage that you have a company 

whose profits have soared in the last few years. Their revenues 

have doubled, I believe, in the last year. They have come up with 

a drug. They are charging the general public $1,000 a pill for that 

drug. They are charging, I believe, the VA—I do not know if this 

is a great secret, but I will tell it anyhow—something like $540 for 

the drug. Is that right? No comment. All right. That is because the 

VA negotiates drug prices. But you are running out of money, and 

we have several hundred thousand veterans today who are suffering with hepatitis C, which can be a fatal disease, and you do 

not have any money to treat them. Frankly, I think that it is time 

to talk to Gilead, the manufacturer of Sovaldi, and basically ask 

them if they are currently being very generous in providing these 

drugs, hepatitis C drugs, to countries like India and the Republic 

of Georgia for free. Very generous, for whatever reasons they are 

doing that. Maybe at a time when their profits are soaring, maybe 

they might want to respect the veterans of this country who might 

die or become much sicker because they do not have access to this 

wonderful product. As Senator Blumenthal mentioned, if they are 

not prepared to come to the table—and I know you think you have 

done very well by getting their prices down by half. I am not impressed that you are paying $540 per pill for people who put their 

lives on the line to defend our country. 

I would suggest to them you sit down again with them and tell 

them that you are prepared to utilize Federal law, specifically 28 

U.S.C. 1498, to break the patents on these drugs unless they are 

prepared to come down significantly lower than they are right now. 

37 

It is not a question of taking money—I know you have requested 

to take money out of the Choice Program. Maybe that is a good 

idea. It is a better idea to have them treat the veterans of this 

country with respect and charge the VA a reasonable price rather 

than ripping off the VA as they currently are. 

With that, I would yield. 

Chairman ISAKSON. Thank you, Senator Sanders. 

Whomever is operating the clock, fell asleep a minute ago, so 

turn that clock on when they start talking, if you would. 

We have Senator Rounds, followed by Senators Manchin, 

Cassidy, Hirono, Tillis, and Tester. 

Senator Rounds? 

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

Senator ROUNDS. Thank you, Mr. Chairman, and I appreciate 

your work and also the Ranking Member’s work with regard to the 

issues on the hospital in Aurora. I agree that it should not come 

out of the Choice Program as the alternative. 

Mr. Gibson, I was looking back at the notes I have taken here, 

and you gave some very encouraging notes with regard to some of 

the stats about some of the areas of the country with regard to 

some additional care being provided, and that is encouraging. I am 

just curious. Do you believe that those stats are consistent across 

the country? Are you finding evidence of that across the rest of—— 

Mr. GIBSON. Actually, that is—I always worry when people quote 

averages to me, and what you find is wide disparity across the 

country in terms of the length of wait times, and, therefore, in 

terms of the specific areas where we are making the most intensive 

investments. What I would tell you is where we have been making 

consequential investments, you pretty consistently see a material 

improvement in access measured by completed appointments, 

measured by growth in relative value unit. What we are not seeing 

pretty consistently is a material improvement in wait times. 

When you look behind that you realize that what is happening 

is as we improve access to care, either more veterans are coming 

or veterans that are already there are making additional utilization 

of VA care. 

Senator ROUNDS. I am just curious. It sounds almost like we 

have—and I think Senator Sanders had suggested this in a way, 

but I really think we have to have the discussion about how we deliver care long term for our veterans. I would love to be able to 

allow the veterans to make that decision themselves as to how we 

deliver the care to them. I think the Choice Act allows that to 

begin. I understand that right now we have got a significant investment, if we have over 150 health care communities—or health care 

centers and 900 CBOCs right now. 

What do you see as the answer here? One of the comments was 

made that we are looking at providing the Choice opportunity there 

if the care cannot be met by the VA itself. It sounds to me like 

what we are saying is that the VA should be making the decision 

about whether or not they are delivering the care or whether or not 

the veteran should be making that decision. It sounds to me like 

maybe we ought to take the other approach here and say if we gave 

that choice to the veterans, I would suspect that a number of them 

38 

who have very great care being delivered to them by VA facilities 

might very well want to continue that on. There are others that I 

suspect would say, ‘‘Look, I am not near a facility, and I do not expect you to build a new hospital near me.’’ 

You have looked at asking for the ability to have flexibility to 

make that choice. What would happen if we took as an alternative 

and said—and, once again, I think we are talking about dollars and 

cents now as being the deciding factor in this case. What would 

happen if we allowed the veterans to decide for themselves whether 

they wanted to have the care through a VA facility or through utilizing the Choice Program more fully and skip all of the extra stuff 

that you have talked about here in terms of the 40-mile rule or 

whether or not they have already had care and now they have got 

to go back in after 60 days and so forth? It is still the VA making 

the decision. Why not—and share with me your thoughts. I am 

sure this is not a new thought. Share with me your reasoning and 

logic and why you are where you are at in terms of not allowing 

the veterans to make that choice themselves. 

Mr. GIBSON. Sure, not at all a new thought, and we have spent 

a great deal of time talking about it and alluded to some options 

that we briefed the staff on. 

One of the things first to keep in mind, 81 percent of all the veterans that we provide care for have either Medicare, Medicaid, 

TRICARE, or some form of private health insurance. Often, what 

you see today—you mentioned the fact earlier that veterans, if 

given the option for Choice, some would elect to stay in. And, in 

fact, that is precisely what happens today. Roughly half, 40 to 50 

percent, somewhere in that neighborhood, depending on whose survey you are listening to. I would tell you my perspective, part of 

those are deciding to stay because they want to stay, because they 

are getting great care, they enjoy the camaraderie with other veterans, they have continuity of care there because they have been 

receiving care for a long time. Others come there because they have 

an economic incentive to come there, because if they go out to 

Medicare, they have a 20-percent co-pay for a procedure. You look 

at that colonoscopy or whatever it happens to be, or the knee replacement, which is an example that we use oftentimes, and the 

veteran can go get it with Medicare, but he is going to wind up 

with a $7,500 bill to foot. 

I think part of the answer comes—and it is one of the options 

that we have talked about here—is that we step back and we look 

at some of the economic distortion that exists today and find ways 

to eliminate that. 

For example, what if Medicare, Medicaid, TRICARE, and other 

providers became the primary payer and VA indemnified the veteran against a 20-percent co-pay? Then you really are providing the 

veteran with choice. Then you have really—and you wind up—the 

taxpayer does not wind up paying twice for the same care. 

I think therein lies kind of the answer. This is not about protecting the turf. All we are about is doing the right thing for veterans and being good stewards of taxpayer resources. Wherever 

that leads us, that is where we are ready to go. 

39 

Senator ROUNDS. Mr. Chairman, my time is up, but I think that 

is something that we should seriously consider on this Committee. 

Thank you, sir. 

Chairman ISAKSON. Thank you, Senator Rounds. 

Senator Manchin? 

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

Senator MANCHIN. Mr. Chairman, thank you very much, and I 

thank all of you for being here today. 

Let me just say that, needless to say, the VA has a lot of problems or has had a lot of problems that you all have been dealt. 

Some of you have been there longer than others. Some of you have 

had careers at it. Some of you have come from the private sector. 

I have got problems in West Virginia, like every other State. Nobody has problems like Colorado has right now with what is happening there, but let me just say I need to get this on record. I 

have a situation in Beckley VA medical center. I do not know if it 

had been brought to your attention or not, if it has got that far up 

the ladder. Last month, the Office of Special Counsel released a report with substantial allegations of switching anti-psychotic drugs 

based solely on cost. The providers and doctors said this is what 

our veteran needs. Then, they made an executive decision that it 

was too cost prohibitive, cut the medicine, and did not get the right 

application. 

I was told there is a new policy in place that regulates dispensing of these drugs, and I have not been able to obtain a copy 

of that. At the same time, I am also told that there is a follow-on 

investigation into the matter. I have not heard much about that. 

At the same Beckley VA, the Greenbrier clinic, which operates 

under Beckley, has been closed three times because of air quality. 

I am having a horrendous time, because we have a very rural 

State, trying to get our veterans the care they need. 

The only thing I can ask, if it has not gotten to your level, if you 

can get me an answer back as quickly as you can. 

Mr. GIBSON. One, we will get you the regulation. 

[The information referred to follows:] 

RESPONSE TO REQUEST ARISING DURING THE HEARING BY HON. JOE MANCHIN TO

U.S. DEPARTMENT OF VETERANS AFFAIRS

VISN 6 BECKLEY VAMC CONGRESSIONAL UPDATE

CURRENT AS OF SEPTEMBER 15, 2015

* GREENBRIER COUNTY CBOC (CLOSURE OF MAXWELTON LOCATION)— 

June 1, 2015: 

The alternative for long-term options for providing care to affected Veterans is 

continuing to be evaluated. Beckley VAMC’s first action focused on deactivating the 

current clinic in our systems to enable area Veterans to be eligible to use Veterans’ 

Choice benefits that include authorization to receive care by local providers. Other 

current actions include investigating the viability of long-term care options to maintain clinical services for the regions’ Veterans. 

The primary option being pursued at this time is to contract with area providers 

for services. This option has become more challenging with the recent Choice Act 

guidance, which ‘prohibits new contracts for care except in urgent circumstances as 

determined by the DUSHOM.’ This updated guidance is dated May 12, 2015. VISN 

6 drafted a request for Exception to this Policy and forwarded the request to the 

DUSHOM’s office for consideration on May 26, 2015. 

40 

Another option being considered is to find replacement space to reestablish the 

CBOC. A newspaper ad for lease space up to 5,000 usable square feet of outpatient 

space was or is to be published in the Mountain Messenger (5/22 and 5/29); Valley 

Ranger (5/24, 5/27, 5/31, 6/3); and Daily News (M-F, X 2 weeks starting 5/25). In 

order to procure a new lease to replace the Greenbrier CBOC, VA would need to 

validate the need for the new lease through the Strategic Capital Investment Planning process, and obtain a lease delegation from General Services Administration. 

June 15, 2015: 

Beckley VAMC is continuing to work with the VISN and VA Contracting to investigate the viability of long-term care options for providing access to care to the Veterans in the Greenbrier Valley. Currently the medical center is working with VA 

Contracting on parallel paths: 

1. The marketing study for lease space ended at 4:30 p.m. on June 12, 2015. 

Thirteen interested offerors made contact with the Contract Specialist. 

2. The VA is now working on a newspaper ad to seek information on the availability of potential sources with board-certified providers of Primary Care and basic 

Mental Health in Lewisburg, Rainelle, and Alderson who are interested in a 

multiyear contractual arrangement. A supplemental email with details of the ad will 

be provided prior to publication. 

July 1, 2015: 

The newspaper ad seeking information from sources interested in providing primary care and mental health outpatient services in the Lewisburg, Rainelle, and 

Alderson (WV) catchment area was or is to be published in the Mountain Messenger 

(7/3 & 7/10); Valley Ranger (6/28, 7/1, 7/5, & 7/8); and Daily News (M-F, X 2 weeks 

starting 6/29–7/8). Interested sources are asked to contact Marchelle Peyton no later 

than 5:00 p.m. on July 10 at Marchelle.peyton@va.gov. The ad information was provided to our Congressional partners via email on June 26. 

The medical center is preparing a business plan to be submitted to the VISN that 

will provide an analysis of the need based on access, workload, and comparison of 

the various options for providing care noted above. 

July 10, 2015 (Interim Email Update): 

A local (Beckley VAMC) Review Committee has been established. On July 14, this 

Committee along with VA Contracting will begin the site survey process of assessing 

the identified 13 potential ‘‘ready to occupy’’ spaces. VA Contracting is in the process 

of scheduling these site visits. 

July 15, 2015: 

DUSHOM approved the waiver for new contracts for care on June 2, 2105. 

The community care solicitation resulted in three (3) interested sources. These 

sources will now be evaluated as to whether they are good community based options 

in which to provide services to our Veterans. 

The marketing analysis and preparation of a business plan is ongoing. 

SecVA scheduled to speak with Senator Manchin on July 16. 

July 24, 2015 (Interim Email Update): 

A final newspaper ad for lease space up to 5,000 usable square feet of outpatient 

space is to be published in the Mountain Messenger (8/1); Valley Ranger (7/26 and 

7/29); and Daily News (M-F, 7/27 to 7/31). Any new interested parties should submit 

an official response to VA Contracting by 4:30 pm EST on August 3, 2015, no other 

properties will be accepted after this date. This will conclude the market research 

and a solicitation will be sent to those properties that meet the Department of Veteran Affairs requirements. 

August 1, 2015: 

Follow-up to the Congressional conference call held on July 30: 

The marketing analysis determined that VA contracted community care is not a 

viable option at this time. 

The focus is on the re-location site for a VA staffed CBOC. The selection of the 

site is on-going and thoroughly being pursued. Anticipated timeframe for the reopening of the Greenbrier County CBOC is up to 12 months. 

Note: The Greenbrier Valley Economic Development Corporation (Mr. Steve Weir) 

was notified of the VA’s intent to not renew the lease on the CBOC (Maxwelton) 

in writing by the Lease Contracting Officer on April 30, 2015 and May 5, 2015. 

The Director will host a Town Hall for the Veterans in the Greenbrier Valley on 

Thursday, August 6, 2015, at 6:00 p.m. at the West Virginia School of Osteopathic 

41 

Medicine, Roland Sharp Alumni Center, 400 North Lee Street, Lewisburg. Announcement will be made via media outlets. 

August 10, 2015 (Interim Email Update): 

The final marketing study for lease space ended at 4:30 p.m. on August 3, 2015. 

An additional nine interested offerors made contact with the Contract Specialist. VA 

Contracting is in the process of scheduling site visits for the local (Beckley VAMC) 

Review Committee to assess the additional nine spaces this week. This will conclude 

the market research and a solicitation will be sent to those properties that meet the 

Department of Veteran Affairs requirements. 

Note: Local media coverage of the Town Hall held on Thursday, August 6, 2015, 

seems to be somewhat misleading often with erroneous information on the process 

for relocation of the CBOC. 

August 15, 2015: 

The Beckley VAMC Review Committee completed the assessment of the additional nine spaces on August 14. The reviews for all 22 sites will be collated and 

a prioritized list provided to VA Contracting by Wednesday, August 19. The solicitation process will begin. 

September 1, 2015: 

Beckley VAMC provided the list of acceptable properties to VA Contracting as 

planned. The VA Contracting process will be consolidated and given priority consideration with an anticipated award date of December 2015. 

On August 18, Beckley VAMC received an Interim Letter dated August 17, 2015, 

from the National Institute for Occupational Safety and Health (NIOSH) which provides the results from the analyses for volatile organic compounds (VOCs) and 

isocyanates from air sampling collected on March 26, 2015 (Attached below) from 

the Maxwelton location. Also attached for continuity is the Interim Letter dated 

April 24, 2015 which provides the air sampling results for formaldehyde and carbon 

monoxide (CO). 

September 15, 2015: 

The National Contracting Office 6 is continuing to aggressively work on the process for awarding a contract for a relocation site for the CBOC. 

* OFFICE OF THE MEDICAL INSPECTOR REPORT TO THE OFFICE OF SPECIAL COUNSEL

OSC FILE NUMBER DL–14–3389, DATED NOVEMBER 3, 2014—CLOSED APRIL 22, 

2015 (PENDING SUPPLEMENTAL REPORT) 

June 1, 2015: 

On April 28–April 30, the Office Medical Inspector conducted a supplemental site 

visit at Beckley VAMC. Beckley VAMC has not received the final report. On 

May 27–May 28, VA Office of Accountability Review conducted an administrative investigation as part of the follow-up actions to this pharmacy review conducted by 

the Office of the Medical Inspector. The final report is pending. 

June 15, 2015: 

Beckley VAMC has not received the final reports on these visits; however, the embedded letter has been sent from the Acting Under Secretary of Health to Senator 

Capito. 

July 1, 2015: 

No new information. Beckley VAMC has not received the final reports nor are 

they listed on the Office of Special Counsel’s Web site. 

July 15, 2015: 

No new information. 

August 1, 2015: 

No new information. 

August 15, 2015: 

No new information. 

September 1, 2015: 

No new information. 

September 15, 2015: 

The reports from the Office of the Medical Inspector’s supplemental review and 

the VA Office of Accountability Review are pending. 

42 

* INTENSIVE CARE UNIT (ICU) RELOCATION— 

June 1, 2015: 

On May 27, 2015, the ICU unit was temporarily relocated to Ward 3A pending 

floor repair and replacement. Estimated time for relocation is September 2015. 

July 15, 2015: 

Nothing new to report. 

August 1, 2015: 

Renovations are approximately 75% complete and are on target for completion in 

September 2015. 

August 15, 2015: 

This project remains on target for completion in September 2015. 

September 1, 2015 

This project remains on target for completion by the end of September 2015. 

September 15, 2015: 

The flooring project has been completed and the ICU unit is up and running in 

its permanent location as of September 10, 2015. This topic is now closed. 

* PRINCETON VA CLINIC— 

September 15, 2015: 

Since the June 8, 2015 opening, there has been a net increase of 200+ Veterans 

enrolling to receive care or transferring their care to the Princeton VA Clinic in addition to the more than 400 Veterans whose care was transferred from the mobile 

unit that was parked in Bluefield, WV. The clinic has the capacity to care for 1,200 

Veterans. 

* ADULT DAY HEALTH CARE UNIT— 

September 15, 2015: 

The medical center is currently in the process of relocating the Adult Day Health 

Care program into their new site—the new building located on the left and attached 

to the medical center. The program will now have the capacity to grow and offer 

care for more Veterans on a daily basis. 

Mr. GIBSON. Two, I believe the follow-on investigation that is referred to here is oftentimes—well, routinely, when the Office of 

Special Counsel has a finding that substantiates a whistleblower 

allegation, then if it is medical care, it is turned over to the Office 

of the Medical Inspector, and we have a team of physicians—— 

Senator MANCHIN. You all—— 

Mr. GIBSON. We do. They really bore it out; they come and determine exactly what happened, where the accountability was, and 

then those oftentimes will come to me. 

Senator MANCHIN. Sure. I have already heard that it is at that 

level now, it has been there. I have been trying to get an answer 

back. 

Mr. GIBSON. We will get you an answer. 

Senator MANCHIN. If you can help me, I would appreciate it very 

much. 

Mr. GIBSON. We will do that, sir. 

[The information referred to follows:] 

RESPONSE TO REQUEST ARISING DURING THE HEARING BY HON. JOE MANCHIN TO

U.S. DEPARTMENT OF VETERANS AFFAIRS

Date: SEPTEMBER 24, 2015 

Source: JON COEN, OCLA 

Inquiry from: SEN MANCHIN

CONTEXT OF INQUIRY: Please provide an update on whistleblower allegations concerning the Pharmacy Service at the Beckley VAMC 

43 

RESPONSE (excerpt from June 9, 2015, Sen Capito Letter attached): In response 

to OSC’s referral of whistleblower allegations concerning the Pharmacy Service at 

the Beckley VAMC, the Department investigated the allegations and submitted its 

report to OSC on January 5, 2015. As reported, VA substantiated that the Beckley 

VAMC Pharmacy and Therapeutics (P&T) Committee encouraged its providers to 

switch established Beckley VAMC Veterans from aripiprazole or ziprasidone prescribed by Beckley VAMC providers to medications with similar indications. VA also 

substantiated the allegation that Beckley VAMC management did not communicate 

the opioid performance measure to Primary Care physicians within 90 days of the 

beginning of the FY as required by Veterans Health Administration (VHA) policy. 

The report set forth specific recommendations for corrective and follow-up actions 

to be taken by Beckley VAMC. Beckley VAMC has fully implemented all of the recommendations. 

Beckley VAMC conducted clinical reviews of the condition and medical records of 

all Veteran patients who were discontinued from aripiprazole and ziprasidone to determine whether any adverse patient outcomes had resulted. Clinical reviews of 137 

patients who had been receiving aripiprazole and 45 patients who had been receiving ziprasidone up until that time were completed on November 18, 2014, and January 21, 2015, respectively. Of these 137 Veteran patients, 66 Veteran patients previously on aripiprazole and 19 Veteran patients previously on ziprasidone were 

changed to other medications with similar indications. There were no patients receiving aripiprazole and ziprasidone concurrently before or after the reviews. As previously stated, the review, validated by the Chief, Mental Health Service Line, 

found no adverse outcomes as a result of the change in medications. 

It is also important to note that based on current information, aside from national 

guidance (evidence-based prescribing criteria, treatment algorithms, clinical practice 

guidelines, etc.), there are no ‘‘blanket restrictions’’ for any drugs or treatments for 

acute medical conditions in place at Beckley VAMC. As a result of the investigation, 

VA instructed Beckley VAMC to ‘‘stop the practice of automatically removing patients from aripiprazole or ziprasidone without a legitimate clinical need.’’ As stated 

earlier, Beckley encouraged providers to switch Veterans from aripiprazole or 

ziprasidone to medications with similar indications; however, at no time did they 

‘‘automatically’’ remove patients from those therapies as reported. Providers may request any medication, even medications not listed on the VA’s National Formulary, 

through a Special Drug Request (SOR) process when a medication is clinically indicated for an acute or chronic medical condition. Additionally, Beckley VAMC management has formally clarified to staff, via email and in face-to-face meetings, that 

aripiprazole and ziprasidone are, in fact, available for physicians to prescribe when 

clinically needed. 

With respect to VA’s recommendation that Beckley VAMC management take 

steps to improve the education of its leadership and the P&T Committee on the policy and procedure requirements outlined in VHA Handbook 1108.05, Outpatient 

Services, and VHA Handbook 1108.08, VHA Formulary Management Process, Beckley VAMC management has taken the following actions: 

• On January 25, 2015, during the Medical Staff meeting, providers were educated on the policy and procedure requirements outlined in VHA Handbook 1108.05, 

Outpatient Pharmacy Services, and 1108.08, VHA Formulary Management Process; 

• On March 12, 2015, Medical Center leadership, (including the Chief of Staff, the 

Medical Center Director, and the Chief of Pharmacy), and members of the P& T 

Committee were educated about the same information. Additionally, the Veterans 

Integrated Service Network (VISN) 6 Pharmacy Executive participated (via teleconference) in a Beckley VAMC P&T Committee meeting and during the meeting 

covered the salient elements of VHA Handbook 1108.08 and 1108.05, especially 

those related to continuation of therapy; and 

• On March 17, 2015, the VISN 6 Pharmacist Executive reinforced the key points 

of VHA Handbook 1108.05 and 1108.08 to all VISN 6 Chiefs of Pharmacy (or their 

designee) during a conference call. 

VA also recommended that VHA take action to reinforce to all Medical Centers 

the policy and procedural requirements outlined in VHA Handbook 1108.05 and 

VHA Handbook 1108.08 related to the processing of formulary medications. This 

was accomplished on March 13, 2015, when VHA issued such guidance to the field. 

Notably, this same information was provided to all VISN Chief Medical Officers, 

VISN Pharmacist Executives, Chiefs of Staff, and other internal stakeholder groups. 

With respect to the status of VA’s recommendation that, if and as warranted, appropriate action be taken against VAMC leadership and the P&T Committee for approving actions that were inconsistent with applicable VHA policy on prescribing 

drugs, the Beckley VAMC Director is currently working with VA’s Office of AccountVerDate Mar 15 2010 18:29 Jun 30, 2016 Jkt 000000 PO 00000 Frm 00047 Fmt 6633 Sfmt 6621 Z:\ACTIVE\051215.TXT PAULIN
44 

ability Review, a multidisciplinary body which reports to the Secretary through the 

General Counsel, to determine the need for any such action. 

To ensure staffs are able to report suspected violations of policy or law and that 

such reports are investigated promptly, Beckley VAMC has appointed a full-time 

Compliance Officer who is available (both in-person and via a telephone hotline 

number) to receive confidential reports by staff of suspected policy violations. When 

a complaint is received, the Compliance Officer will notify the Beckley VAMC Director of the complaint and enter the matter into a web-based reporting system where 

it is to be monitored until satisfactorily closed. As part of the process, the Compliance Officer conducts a fact-finding exercise and presents the findings to the Director, who may take whatever action is deemed appropriate. The manner in which 

complaints are to be handled and/or resolved will depend upon the nature and facts 

of each complaint. For instance, the Director may convene an Administrative Board 

of Investigation to investigate the types of matters covered by VA Handbook 0700. 

Please note that with respect to suspected criminal activity, VA employees, not only 

the Compliance Officer, are obligated to report suspected criminal activity to the appropriate law enforcement officials in accordance with 38 CFR §§ 1.200–1.205. 

Beckley VAMC maintains posters for the Office of the Inspector General and Joint 

Commission displayed throughout the facility informing staff, Veterans, and visitors 

about how to make complaints of suspected waste, fraud, or abuse. Additionally, 

suggestion boxes can be found throughout the facility making it easy for any person 

to anonymously submit questions or concerns to the Compliance Officer. 

The remaining allegation substantiated by VA was the medical center’s failure to 

communicate the opioid performance measure to all primary care physicians within 

90 days of the beginning of the fiscal year. VA recommended the facility take steps 

to ensure performance measures are communicated to physicians in a timely manner, in accordance with VHA policy (VA Handbook 5007, Pay Administration). On 

January 21, 2015, Beckley VAMC’s Office of Human Resources implemented a 

standard operating procedure (SOP) requiring service lines to develop, communicate, 

and implement physician performance pay goals (which are the performance measures plan) based upon the Executive Career Field plan and opportunity for improvement identified by Beckley VAMC. The SOP includes calendar reminders for this 

action and requires confirmation of completion by each service line before the 90- 

day deadline. 

[June 9, 2015, Senator Capito Letter intentionally omitted.] 

Senator MANCHIN. Really what it comes down to, this leads up 

to everything that we have talked about here, and I think as Senator Sanders says, you know, privatization, this and that. I just 

truly want—I just care about the veterans. There are going to be 

an awful lot of them coming back who will need a lot of care. My 

generation coming out of Vietnam, 40 years later still have tremendous need. 

With that being said, do you believe—you come from the private 

sector. You come from the private sector. You are public. You are 

public. 

Dr. TUCHSCHMIDT. She is private sector. 

Senator MANCHIN. Private? Oh, I read here you had 15 years in 

Government. Those who have more public—more private exposure, 

would understand. Do you believe we can give better care to our 

veterans through the private sector? I mean that in the case of the 

quality of care, the time, and also the cost. I am not saying we are 

going to shut the VA down. But before we expand, I do not think 

we are going to build another hospital. I do not think we are going 

to build anything else. We are going to have to maintain what we 

have and give better care for more people. 

Mr. GIBSON. Sir, I would tell you, no, I do not believe that that 

is the case. If you look at the typical—— 

Senator MANCHIN. Tell me why. 

Mr. GIBSON. If you look at the typical veteran that we provide 

care for, they are older, they are sicker, and they are poor. We have 

a highly fragmented health care system in America, and that is 

45 

precisely the person that I do not think fares best when turned 

loose in that fragmented system. If you go talk to veterans, to a 

large number of veterans, consistently what you are going to hear, 

are there instances where they had to wait too long for care? Are 

there instances where we made a mistakes? Yes, there absolutely 

are. Fifty-five million outpatient appointments a year. 

Senator MANCHIN. Use Alaska as an example. We used Alaska 

for the Choice. Alaska is the basis for with Choice. We used Alaska 

and how they were given so much better quality of care and 

quicker wait times than anywhere else. They do not even have a 

VA hospital. Who wants to take that one? 

Mr. GIBSON. You know that market very well. 

Mr. MCINTYRE. If I might, I know Alaska a fair bit, and about 

a decade of public service experience. I would offer the following: 

I think it takes both. 

Senator MANCHIN. OK. 

Mr. MCINTYRE. I think the real question at the end of the day 

is: Which things fundamentally are done best by the VA directly? 

Which things have enough demand where it justifies building it? 

Which things ought to be supplemented by the private sector? Because it is either there is not enough demand to justify a build or 

where it makes sense to spread the supply simply because of the 

amount of resourcing that is needed to deliver services. I think that 

has always been true. I think that is true in the DOD system. That 

is why you see TRICARE constructed the way it is. Alaska has a 

joint-use facility in Anchorage. But when you get outside of Anchorage, most of the footprint tends to either be public in the DOD, 

public through the Indian Health Service, or private. It is those 

two pieces working together that are ultimately going to deliver 

what needs to be done. 

Senator MANCHIN. Well, I can talk to you all day, but my time 

is running out, but the thing on drugs, the drug dispensing to our 

veterans is almost criminal, what we are doing to them. The concoction of drugs we are giving them without proper guidance, and 

when you look at high unemployment rates in our veterans and 

look to it as drug addiction, we have got to do something there. 

Prescription drug abuse is the biggest killer I have in my State of 

West Virginia, and it is everywhere. It is horrific. But in the ranks 

of our military and our veterans, it is just absolutely off the charts. 

We are putting a prescription drug abuse caucus together, Democrats and Republicans working together. We are going to need your 

help because this is where we can—— 

Mr. GIBSON. We would love to participate. We agree with you. 

We recognize it as a national problem, and it is a problem inside 

VA. 

Senator MANCHIN. Thank you. 

Chairman ISAKSON. It is a problem in general society. Thank 

you, Senator Manchin. 

Senator Tillis, then Senator Hirono, followed by Senator 

Boozman and Senator Tester. 

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

Senator TILLIS. Thank you, Mr. Chair. Thank you all for being 

here. 

46 

Just a couple of things. One is based on a comment made here 

earlier about the idea of completely privatizing the VA. I honestly 

have not had a single serious discussion with any member that saw 

that as an end state. If they did, if anyone here did, all they need 

to do is spend some time in the VA to understand the unique nature of what the VA has to offer. There is no other more welcoming 

place for a veteran than the VA. Not that there are not opportunities for private care. There clearly are already. The non-VA care is 

a very significant part of what you all do every day, long before 

Choice was ever implemented. Choice is just another safety valve. 

I realize in these Committee meetings sometimes our words 

carry more weight than perhaps they should. But I do not think 

anybody should leave this Committee meeting thinking that anybody here has any serious goal or objective to privatize the entire 

VA. 

I want to go back to the point that Senator Blumenthal mentioned. I also have concerns about the overrun in the Denver hospital. I completely understand your predicament. You have got to 

figure out a way to get it built out. Can you give me an idea of 

what the thought process was? Because presumably, if you were 

going to shift that money over for the short-term need to fund the 

buildout of the Aurora facility, what would that cause in terms of 

delay or ramping down of what we would be doing with Choice over 

the period of time that that money would not be available? 

Mr. GIBSON. What we basically did is in identifying the non-recurring maintenance and minor construction projects, we have a 

capital planning process that actually builds a prioritized list that 

is years long based upon the pace of funding that we normally expect to get. When we looked at the $5 billion in Choice funds, we 

basically reached into that skip list and pulled a segment out to 

put into that priority bucket. 

What happens now is the substantial portion of those, if we were 

permitted to do this, in all likelihood would wind up in the 2017 

budget because they then would fall back into that prioritized 

queue. 

Senator TILLIS. That is why I was asking the question, because 

you could infer from some of the discussion that there is a $700 

million hit and care not being provided versus taking a look at how 

that money was spent over time to build the ramp-out of the 

Choice Program. That is why I was asking. It sounds like there is 

some leveling assumptions you were making about having the 

money when you need it. 

Mr. GIBSON. That is exactly right. Our commitment has been 

that we would work this back into the funding stream as quickly 

as we could. There are hundreds of—— 

Senator TILLIS. I think that that is critical in order for what you 

have requested in the letter that you sent us to have any prayer 

of serious consideration, you need to map out how we would have 

assurances that it does not really materially affect it because of the 

way that you would plan to spend that money anyway. 

Mr. GIBSON. Thank you. Thank you for raising the issue. 

Senator TILLIS. Because, otherwise, I would tend to go back to 

the well-articulated position of the Ranking Member. 

47 

The other question that I had or the thing that I think is very 

important is we need to get a 5-year, 10-year, 20-year picture of 

what Choice non-VA care means, to get some parameters set about 

it, because that is critically important for you to go back and review your capital improvement plan to figure out how to do it. The 

answer is going to be different depending upon where you are. 

Senator Sullivan will rightly say that his State has a higher per 

capita veterans population of any State in the Nation. I have a veterans population that exceeds the population of several States. The 

capital planning requirements in North Carolina will be necessarily 

different than non-VA care, and the Choice mix in Alaska will be 

necessarily different. We have to come up with that long-term vision so we can relook at the current capital improvement plans 

based on what appears to be the interest of the Senate to continue 

down that multipronged path so that you are taking pressure off 

of capital requirements in some areas and maybe redoubling them 

in other areas. That is a very important thing that I think this 

Committee needs to see, but then we need to be very specific about 

what we want beyond just brick and mortar VA presence in the 

form of non-VA care and Choice are to get this right. 

Mr. GIBSON. If I can make two quick observations. I think you 

are absolutely spot on. First of all, we have to force ourselves to 

make certain decisions about what care can be most efficiently delivered in the community. We have talked before, my example the 

Chairman remembers, optometry. Why would we send a veteran 

100 miles to go get his eyes checked and get some glasses? You can 

do that anywhere. Why would we not be routinely referring that 

out into the community unless a veteran really wanted to come to 

VA? 

The other issue that we are trying to get at—and we are learning 

right now, again, working to manage toward requirements rather 

than just a budget number. What we are seeing is every time we 

improve access to care with a new facility, with additional staff, demand changes. Part of what we are trying to understand is what 

are the dynamics. 

For example, you look in Phoenix where we know we are underpenetrated in the veteran market. We improve access to care, and 

we get a disproportionate response back. We have got to understand that market penetration phenomenon because it will affect 

our capital planning. 

I have already talked with the folks in Phoenix about getting beyond looking over the horizon as it relates to demand for care 

among veterans in Phoenix. We cannot keep incrementally doing 

this because we are just going to stay behind. We have got to get 

ahead of that demand. Your points are excellent. 

Senator TILLIS. Thank you. 

Thank you, Mr. Chair. 

Chairman ISAKSON. Thank you, Senator Tillis. 

Senator Hirono? 

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

Senator HIRONO. Thank you. 

There is a shortage of medical personnel in the VA, and I note 

in your testimony, Secretary Gibson, that you are going to be creVerDate Mar 15 2010 18:29 Jun 30, 2016 Jkt 000000 PO 00000 Frm 00051 Fmt 6633 Sfmt 6601 Z:\ACTIVE\051215.TXT PAULIN
48 

ating some 1,500 new residency positions, and this is a matter that 

I have discussed with our VA person in Hawaii, because if we can 

create residency positions in the State, it is more likely that those 

folks will be able to practice in the State. 

How will these residency spots be allocated? By region? By capacity? Are there any you are planning to increase for Hawaii medical 

students? 

Dr. TUCHSCHMIDT. I do not have the list with me today specifically of where the slots are going. 

Senator HIRONO. Have you already determined where the residency slots are going? 

Dr. TUCHSCHMIDT. Not all 1,500. That is a multiyear plan to deploy the 1,500, and the first round of those started this fiscal year. 

I, quite frankly, did not think our Office of Academic Affiliations 

would be able to do it, but they went out and sought applications. 

There are very specific criteria in the law about them going to 

underresourced communities and specialties. They went out and 

specifically sought those. We have awarded several hundred for 

this first round this year, not as many as we had thought maybe, 

but a lot more than I anticipated they would be able to award. I 

can get you specifically where those—— 

Senator HIRONO. Certainly, because Hawaii has a lot of rural 

areas on the neighbor islands that are underserved in the VA. 

Thank you. You can send me the information, or the comparative 

effectiveness. 

Dr. TUCHSCHMIDT. Yes. 

[The information referred to follows:] 

49 

RESPONSE TO REQUEST ARISING DURING THE HEARING BY HON. MAZIE K. HIRONO

TO U.S. DEPARTMENT OF VETERANS AFFAIRS


512q2VAh1.eps
50 

Senator HIRONO. As we look at the request of Secretary Gibson 

to pay for the Denver facility and we are looking—I think that it 

is really difficult for us to accept that you want to take money from 

the Choice Program to do that. I would like to ask you this: When 

a veteran goes to the VA to get care for a non-service-connected 

matter and this veteran has private insurance, do you have the authority to get reimbursed from the private insurance company for 

the care that the VA provides? 

Dr. TUCHSCHMIDT. If the patient goes out into the community in 

our normal purchased care program and has insurance, we will bill 

that insurance company and collect to offset the cost of the care we 

provided. 

Under Choice, we are actually the secondary payer, so under the 

Choice Program, the way the law was written, if the patient has 


512q2VAh2.eps
51 

commercial insurance, the commercial insurance is the primary 

payer, and then we will make the provider whole up to the Medicare rate. 

Senator HIRONO. All right. Under the Choice Program that is 

good because VA becomes the secondary payer. My understanding 

is that in the first instance, where the veteran goes to the VA and 

gets the treatment, then often there is no reimbursement from his 

or her private insurance company. You are telling me otherwise. 

Dr. TUCHSCHMIDT. We will bill the private insurance company if 

the patient has insurance. 

Senator HIRONO. Yes. And do they reimburse you? 

Dr. TUCHSCHMIDT. Yes, we get paid from them. A lot of the patients that have insurance have Medigap insurance, and without a 

Medicare EOB oftentimes those insurance companies will not pay 

for the care because it is not Medicare—the insurance is specifically Medicare gap coverage. We will not oftentimes get paid by 

those insurers. 

Senator HIRONO. You are reassuring me that the VA goes after 

every dime from the private insurance carriers that you can get 

your hands on. 

Dr. TUCHSCHMIDT. I can assure you we go after every dime we 

can collect. 

Senator HIRONO. That is reassuring. 

Dr. TUCHSCHMIDT. About $3 billion a year, yes. 

Senator HIRONO. There are some questions about the outreach on 

the Choice Card Program. There is still confusion out there and 

whether you found all of the veterans who would qualify for the 

Choice Card. What are the outreach efforts that you have engaged 

in? Do you think that you are succeeding in explaining the Choice 

Program? And, also, to VA employees and community health care 

providers who need to get training on how to explain the program. 

Dr. TUCHSCHMIDT. We originally mailed—we know who the people are who are eligible to get a Choice Card, and we mailed the 

letter to every one of those people back when the program started 

in November. 

Senator HIRONO. I have talked to veterans, and they found that 

letter to be rather confusing. 

Dr. TUCHSCHMIDT. Yes. We are about to mail a second letter to 

all of them. Hopefully it is a lot simpler to understand. We have 

actually tested that with veterans before we put it in the envelope. 

Senator HIRONO. Good idea. 

Dr. TUCHSCHMIDT. We have made a lot of phone calls and outreach to people. There is no question that I think we can do more 

to reach veterans through our Web site, through mobile technology, 

through mailings, and other forms of communication. We need to 

do a better job of educating them. 

Senator HIRONO. Good. 

Mr. GIBSON. We do need to do a much better job. One of the 

things we have got to remind ourselves of is there is no parallel 

to this out there. It is not like an insurance card where you just 

walk into your doctor’s office and present your insurance card. 

There is no frame of reference for people to understand how it 

works. You know, do I have a benefit or do I not have a benefit? 

52 

That is one of the reasons it is hard for us to explain and why we 

have to keep trying. 

Senator HIRONO. If giving you feedback from my veterans, for example, could help you all do a better job, I would be happy to pass 

that on. 

Mr. GIBSON. We would love it, yes. 

Senator HIRONO. Thank you. 

Thank you, Mr. Chairman. 

Chairman ISAKSON. Thank you, Senator Hirono. 

Senator Boozman, followed by Senator Tester. 

HON. JOHN BOOZMAN, U.S. SENATOR FROM ARKANSAS 

Senator BOOZMAN. Thank you, Mr. Chairman. 

Very briefly I would like to ask a question of efficiency. I understand that the third-party administrators (TPAs), TriWest and 

Health Net, have raised the issue of how much clinical documentation is being sent to them by the VA. Apparently VA is sending the 

clinical documentation of every veteran who was approved due to 

having a wait time in excess of 30 days, which presumably is overwhelming the TPAs. You now have a pilot program in VISNs 8 and 

17 to only send the clinical information of veterans who choose to 

participate in the Choice Program. I guess the question is: are the 

pilots proving successful? Then, Mr. McIntyre and Ms. Hoffmeier, 

if you would like to comment from your standpoint as to what is 

going on. 

Dr. TUCHSCHMIDT. When we first set up the program, we gave 

every patient in the system an appointment in our system and put 

them on the Choice list so that they could decide at any point in 

time which direction they wanted to go. We have learned through 

experience over the last 6 months that that does not work. It does 

not help the veteran. It does not help us. Quite frankly, it is not 

cost-effective. 

We have the pilots. We have just started these pilots to see how 

this goes and how we can improve those business processes. But we 

are moving, quite frankly, in the direction of at the point of service 

offering the veteran—finding out what is the appointment that we 

can provide in the VA, offering the veteran that appointment or offering them the opportunity to go outside through the Choice Program. At that time, if the veteran chooses to go out, then our staff, 

much like they do outside of Choice for all of our other purchased 

care appointments, will work directly with TriWest and Health Net 

to get that patient an appointment through the Choice Program. At 

that time, we hope we have learned from our pilots in 8 and 17 

how to do this smarter and better so that we will greatly reduce 

the volume of people that we are referring to the TPA and are only 

providing medical record documentation for those patients who actually choose to go outside the system. 

Senator BOOZMAN. That sounds excellent. Do you—— 

Mr. MCINTYRE. The pilot is a very good idea. Sitting at the table 

in the initial design, when we were getting ready to launch, we had 

2 days to make a decision. The question was, how do you make 

sure that all the right information is in the right place to be able 

to serve people on the front end? The back-end consequences are 

53 

now obvious, and making the change makes a lot of sense, and we 

are looking forward to supporting it. 

Senator BOOZMAN. OK. Ms. Hoffmeier? 

Ms. HOFFMEIER. The pilot has been going exceptionally well in 

our area, and, in fact, we just approved a schedule with VA to 

move forward with implementing the concept across all of our regions here very soon. We are getting the consults in less than 24 

hours on the veterans we need. It is very effective. 

Senator BOOZMAN. OK. That is excellent. I know that it is kind 

of a rocky road as you are working through these things, but it is 

encouraging that you are working through. 

Thank you, Mr. Chairman. 

Chairman ISAKSON. Thank you, Senator Boozman. 

The Patience of the Year Award goes to Senator Tester. Senator 

Tester? 

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

Senator TESTER. It is just because you have a very, very good 

Committee meeting here, Mr. Chairman. 

Chairman ISAKSON. We got good testimony. 

Senator TESTER. I want to thank you and the Ranking Member 

for having you guys, and thank you for your work. 

I just really do not know where to start, quite frankly. First of 

all, you guys do do a good job. I think the private sector does a 

good job. You have your fallibilities. Do not think that the private 

sector does not have their fallibilities, too. They are short on 

nurses, they are short on docs, they are short on mental health professionals, they are short on facilities, just like you guys are. In the 

bookkeeping nightmare that may come with this, let me give you 

an example. Just say I was a vet. I live 50 miles from a CBOC. 

My nearest hospital is 12 miles away. But that nearest hospital 

does not have a doctor in it. It is staffed by a nurse practitioner. 

Then the questions become: one, is that somewhere you want to 

have an appointment; and, two, if I do not, guess where the nearest 

hospital is? In the same town where that CBOC is. I mean, the 

bookkeeping here is just amazing. I know we are all here trying to 

do the right thing, and I know you are trying to do the right thing. 

Still, sometimes even if you do the right thing, people are mad because they think it is the wrong thing. I thank you for that. 

Mr. Gibson, you talked about the 40-mile thing as far as not offering the service several times, and you talked about how it does 

not make any sense if a guy is going to have a set of glasses, why 

ship them halfway across the country. When you did your analysis, 

did you also include the savings that would accrue to the VA by 

not shipping them a long ways away? Because I think that is really 

important. If I was a veteran and had to do it over again, I probably would have signed up just for this benefit. But, the truth is 

that if you are talking about what it costs to ship them to the private sector, it also is a savings if just in mileage alone. Did you include that in the overall net dollar figure? 

Dr. TUCHSCHMIDT. No. We actually do not in the analysis. We 

have worked through several options from what 40 miles from the 

care you need might look like. 

Senator TESTER. Yes. 

54 

Dr. TUCHSCHMIDT. We have not taken into account a lot of 

savings. 

Senator TESTER. OK. 

Dr. TUCHSCHMIDT. We were modeling this for the Choice Program. In the short run, our cost structure is highly fixed; 90 percent of our costs are fixed. There are variable costs, which is mostly 

the eyeglasses that you do not prescribe, but the rest of the infrastructure, the building, a lot of the people, et cetera, do not go 

away. 

Senator TESTER. Yeah, but the mileage is also not a fixed cost, 

and if you have to put them up in a room, that is not a fixed cost. 

Dr. TUCHSCHMIDT. We have not specifically looked at the bene 

travel, and then there are two aspects of the bene travel. There is 

the true cost savings and there is the cost avoided because you 

have not made them travel. 

Senator TESTER. That is correct. 

Dr. TUCHSCHMIDT. But, that is not a real savings. That is a cost 

that you did not realize. 

Senator TESTER. Yes, but really? I mean, come on. That sounds 

like CBO talk here, truthfully. I do not want to debate this, but the 

fact is that if you are doing the actual cost analysis and you would 

have spent the money if they went to a facility of yours, you have 

to include that in the savings. Truthfully, if we are going to deal 

with honest figures, that savings has to be included, even if it did 

not accrue. 

Mr. GIBSON. Clearly it does have to be included. 

Senator TESTER. OK. Right. 

Mr. GIBSON. Even though the level of analysis today is orders of 

magnitude better than what we had initially, all the way down to 

the individual patient level, we have not picked up some of those 

incidental costs. 

Senator TESTER. Mr. McIntyre, you talked about harmonization, 

which I have talked with Sloan about regarding the ARCH program, PC3, and Choice. I am assuming you are for harmonization. 

I read it in your testimony. Just nod your head if that is correct. 

Mr. MCINTYRE. Yes, sir. 

Senator TESTER. Deputy Gibson, you are for harmonization of 

those programs. Could you give us some language on how we can 

harmonize those programs? I do not want to be the micromanager 

here, but if you guys need language to be able to harmonize those 

programs, I think it is a reasonable thing to do. 

Mr. GIBSON. We need to do that. I think part of that picture is 

how do we manage the 40-mile issue. 

Senator TESTER. Yes. 

Mr. GIBSON. I think we need to think through this. Are we going 

to look at VA becoming a secondary provider to those that have 

other insurance alternatives? Because it changes the nature of the 

work. 

Senator TESTER. OK. Well—— 

Mr. GIBSON. It is wrapped up in that. It needs to be a very nearterm exercise. 

Senator TESTER. Yes, let us deal with that, because I think it is 

confusing right now, and I think there is a little manipulation 

going on. 

55 

Mr. MCINTYRE. Well, and if I might, one of the issues I was attempting to address and allude to is the fact that we built a network out now I our area that has got 100,000 providers in it. 

Senator TESTER. Yes. 

Mr. MCINTYRE. The requirements are more extensive than those 

under Choice if you are a participating provider. Those things need 

to be blended together so that we do not have disincentive to participate in one program versus another. 

Senator TESTER. Fair enough. 

Mr. GIBSON. And the reimbursement rates need to be the same. 

Senator TESTER. That is exactly right. Hepatitis C, you want 

some additional dollars, I think $700 million transferred? $400 

million? 

Mr. GIBSON. Not transferred. If we are allowed to be flexible—— 

Senator TESTER. Be able to tap it. I do not have a problem with 

that, by the way. The question I have is if this is a miracle drug, 

when do you anticipate those costs or hepatitis C to flatten out so 

you are not going to need those kind of dollars? 

Mr. GIBSON. I think the conversation that needs to be held with 

this Committee, with the House Committee, and with the appropriators has to do with the requirement that we manage toward. I 

would tell you VA’s thought is we should be talking about a requirement where veterans that are hepatitis C positive, we manage 

that number to functional zero by the end of 2018. That is what 

I think the requirement should be. So, what we need to do is step 

back from that and lay out a plan that says this is what would be 

required—— 

Senator TESTER. I agree with that. 

Mr. GIBSON [continuing]. In order to manage to that requirement, so we are not back and forth about—because the first time 

we deny a veteran access to the treatment who is hepatitis C positive because he does not have advanced liver disease, everybody 

thinks we are depriving a veteran of care. We need to reach agreement on what the requirement is. 

Senator TESTER. One last question, if I might, since I get the 

award for being patient. You talked about residency slots, which I 

think is great and I support and will do everything we can. I believe residencies are 3 years? 

Dr. TUCHSCHMIDT. It varies depending upon what the specialty 

is. 

Senator TESTER. How about for internists? How long is that? 

Dr. TUCHSCHMIDT. That is 3 years. 

Senator TESTER. 3 years. That is what we are short on, right? 

Dr. TUCHSCHMIDT. Yes. 

Senator TESTER. The question I have is this place changes every 

2 years, and to have 3 years in a residency, you have got to have 

the money for that residency. 

Dr. TUCHSCHMIDT. Yes. 

Senator TESTER. Talk to me about how this works, because you 

have got a 2-year—you have got forward funding, but you do not 

have forward funding for 3 years. What do you do if Congress does 

something irresponsible—and that has been known to happen a 

time or two—and does not fund you. 

56 

Dr. TUCHSCHMIDT. I think this is actually one of our concerns. 

These residents all have tales. When we start a new residency slot, 

all of those slots have to be funded for the duration of that residency training. 

Senator TESTER. In that budget. 

Dr. TUCHSCHMIDT. Yes. 

Senator TESTER. OK. 

Dr. TUCHSCHMIDT. Exactly, and that is not the case today. 

Senator TESTER. OK. That is important to know as we move forward. When are you going to start the residency program? Is it 

going to start in this fiscal year? 

Dr. TUCHSCHMIDT. Well, we actually do not own the residency 

slots. They are owned by the Academic Centers. 

Senator TESTER. Yes. 

Dr. TUCHSCHMIDT. We pay for trainees, offset their salary. The 

additional slots that we added started this academic yes. 

Senator TESTER. This fiscal year. 

Dr. TUCHSCHMIDT. The academic year that will start this coming 

July. 

Senator TESTER. In this budget we are dealing with this? 

Dr. TUCHSCHMIDT. Yes. 

Senator TESTER. So, if your budget comes in a little short, this 

may be a program that goes bye-bye. 

Dr. TUCHSCHMIDT. I doubt it, because we have made commitments at this point. 

Senator TESTER. I appreciate it. Thank you, guys, for your work. 

I appreciate your flexibility, Mr. Chairman. 

Chairman ISAKSON. Thank you, Senator Tester. Thanks to all the 

Members, and thanks to our witnesses. It has been a long and I 

think very productive hearing. We are on the path to solving some 

problems and recognizing a few that we need to solve. I appreciate 

everybody’s time and effort very much. 

We will take a 2-minute break while we shift nameplates and go 

to panel two. 

Mr. GIBSON. We appreciate the collaborative working relationship, Mr. Chairman. Thank you. 

Chairman ISAKSON. That is the only way to do it. 

Mr. GIBSON. Yes. 

[Pause.] 

RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. PATTY MURRAY TO HON. 

SLOAN GIBSON, DEPUTY SECRETARY, U.S. DEPARTMENT OF VETERANS AFFAIRS

Question 1. Non-VA Care Programs 

The Choice Program was created as an emergency fix to help bring down serious 

wait times that were keeping veterans from care they needed, but that program is 

a temporary authority and will expire in a few years. VA now has at least 4 different major authorities to get veterans into non-VA care and they all have different 

procedures, eligibility requirements, reimbursements, and reimbursement rates. 

This is inefficient and confusing to providers, VA employees, and veterans alike. VA 

should be preparing now to create one non-VA care program that is effective and 

efficient, and complements the care provided by the Department. Please describe the 

key features and requirements needed for such a future program. 

Response. VA agrees that the existence of four programs, with separate statutory 

and regulatory authorities to access care in the community is confusing for VA employees, providers and ultimately Veterans. While each program serves a specific 

purpose, VA agrees that the rationalization of these programs would be a welcomed 

simplification for all. In May, 2015, the Department proposed legislation through 

57 

the Department of Veterans Affairs Streamlining and Modernization Act which 

would allow the development of an established network of approved non-VA medical 

care providers, expanding Veteran access to care. In addition to this Act, rationalization of non-VA care programs is necessary, and should focus on consistency, simplification of processes, and robust technology, to include: 

• Consistent eligibility requirements for all care in the community (or non-VA 

medical care). 

• Eligibility requirements that are written in easy-to-understand verbiage that 

VA employees can quickly and concisely articulate to providers and Veterans. 

• A dynamic provider network that allows VA medical facilities the opportunity 

to continue to cultivate relationships within their community. 

• Simple, consistent payment methodology for all non-VA care. 

• Electronic submission of Vendor claims 100% of the time. 

• Automation of payments. 

• Clearly defined reporting requirements prior to program implementation. 

• Robust reporting system that captures national and facility-level data. 

Ultimately, the future of care in the community is dependent on developing an 

approach that is driven by Veteran satisfaction and industry-leading cost-effective 

care. 

Question 2. Denver 

Two construction projects in Washington state were among those that were allocated funding from the Choice Act. VA has now asked to reprogram $24.7 million 

dollars away from those projects to pay for the outrageous cost overruns at the Denver facility. The $5 billion provided in the Choice Act was provided to increase access to care by addressing critical problems at facilities around the country, not to 

cover the Department’s shocking mismanagement of the Denver hospital. These two 

construction projects in Washington are greatly in need of this funding, and any request to take away from those projects is deeply concerning. Where else can the Department find the money to address the problem in Denver besides taking the funds 

meant to address critical issues at other facilities? In responding please provide a 

detailed accounting of such funds and a plan to mitigate the serious deficiencies in 

the Department’s management of major construction. 

Response. On June 5, 2015, VA released a comprehensive proposal to the House 

and Senate Veterans’ Affairs Committees. The plan details specific reforms VA has 

instituted to improve our construction program outcomes and prevent mistakes moving forward. The funding plan for completion of the Denver facility presents options 

from a Veteran-centric focus that we believe deploys resources efficiently while addressing the emerging needs of VA facilities in a fiscally responsible, budget-neutral 

manner. For your convenience, the full text of the plan documents is available for 

download: 

1. Letter to Congress 

2. Plan for Completion of the Denver Replacement Medical Center 

3. Cost Benefit Analysis—Denver VAMC (April 2015) 

4. Photos of Denver Replacement Facility 

5. VA Accountability Fact Sheet (June 2015) 

6. VA Making Progress to Improve Service for Veterans Fact Sheet (June 2015) 

7. MyVA Transformational Plan (June 2015) 

RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. BILL CASSIDY TO HON. 

SLOAN GIBSON, DEPUTY SECRETARY, U.S. DEPARTMENT OF VETERANS AFFAIRS

Question 3. Mr. Gibson, I would like to take this opportunity to address the importance of timely claims processing and outstanding medical claims for non-VA facilities. As of Feb 9, 2015 the VA had $43.7 million in unpaid medical invoices to 

non-VA facilities in Louisiana alone. One single healthcare system covering Texas, 

Louisiana, and New Mexico is owed almost $5.5 million. This is unacceptable, we 

cannot expect private institutions to render care to veterans if they know that VA 

will either only pay the claims at 33% or not pay the claims at all. 

a. When does the VA expect to eliminate the backlog of claims (older than 30 

days) to non-VA facilities? 

b. My constituents are still reporting claims assistance hold times ranging from 

1–4 hours, what is being done to address this situation as a whole within the VA? 

c. When will the VA stop mishandling veterans’ paper medical records and allow 

electronic submission of these claims—in the same way Medicare and virtually all 

other payers do now? 

58 

d. In November and in April, the Chief Business Office said it had reopened a 

large group of claims VISN 16 had inappropriately denied for lack of medical 

records after VA employees failed manually scan these records into the system. 

Chief Business Office leaders have not been willing to report how many of these 

claim denials were overturned. When will the VA develop metrics that demonstrate 

the accurate payment of claims in VISN 16 and other poorly performing areas? 

VA Response: 

a. Purchased Care has developed a specific plan to address backlog elimination 

and process improvement. The goal is to eliminate the backlog and have only current claims in inventory by December 31, 2015. 

b. Due to higher than normal volumes of calls and claim submissions, telephone 

wait times had increased. However, Purchased Care has implemented several strategies to address the increase and provide customer service to include providing 

claim status updates via email or paper mail, setting up routine follow-up conference calls with providers, taking voice mails and returning calls in order to alleviate holding times, and the realignment of the V16 call center to Program Administration Directorate to pilot a possible national roll out of call center support if successful. Subsequent to the implementation of the call center pilot in VISN 16 the 

average waiting time for VISN 16 callers is 15 minutes. Please provide the constituents’ names and we will reach out to them to isolate the date called to determine 

if there were any issues associated with the call center systems. 

VA acknowledges there have been instances where clinical documentation was 

misrouted. Internal controls have been established to ensure clinical documents are 

scanned correctly at the VISN 16 centralized payment center. A pilot to track clinical documentation has proven to be successful at another location. This pilot reduced customer service wait times and abandonment rates. We have also completed 

technical site visits to evaluate how well the current software design is meeting 

business needs in order to implement corrective actions. 

c. VA will be expanding that project through VISN 16 in the near future. Providers may also submit medical documentation via CD or DVD and VA staff can 

upload those digital files. Unfortunately VHA will be unable to accept electronic 

submission of supporting clinical documentation until upgrades are completed to the 

Electronic Data Interchange submission systems. That upgrade is anticipated to 

occur in approximately two years. 

d. There were a large number of claims that were reopened and processed during 

November and April 2014 in VISN 16. VA staff are unable to distinguish the reason 

why claims were closed during those timeframes. However, VA’s Purchased Care office does have a department responsible for Audits and Internal Controls and monitors payment accuracy and addresses specific claims processing errors. In addition 

VA has established claims processing measures to monitor status of claims at all 

payment locations. Claims timeliness is monitored daily with weekly conference 

calls with all payment locations to monitor the status of claims processing and implementation of corrective actions. 

RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. PATTY MURRAY TO

DAVID J. MCINTYRE, JR., PRESIDENT AND CHIEF EXECUTIVE OFFICER, TRIWEST

HEALTHCARE ALLIANCE

Question 1. Private Providers and Non-VA Care 

TriWest and Health Net both play major roles in both the Choice Program and 

in the Patient Centered Community Care Program. Some very important controls 

were put into the PCCC program, including requirements to coordinate health care 

and more oversight of the quality of care. As major contractors administering PCCC 

regions, each company made certain assumptions about workload and other factors 

in setting up business plans and provider networks for the PCCC program. How is 

management of the PCCC contracts affected with large portions of the workload 

going through the Choice Program instead? 

Response. Overall, the biggest challenge we have is explaining some of the billing 

differences between the PC3 and Choice programs to providers in our network. For 

the PC3 program, our contract is explicit in its prohibition on providers collecting 

any funds from the Veteran. One hundred percent of the bill is paid by TriWest on 

behalf of VA. When that same Veteran is seeking care under the Choice program, 

the law requires that his or her private insurance provide first dollar coverage if 

the care is for the treatment of a non-service-connected condition. That creates provider confusion and it is one of the reasons I advocated, what I called ‘‘harmonization’’ of the programs in my opening statement. 

59 

Additionally, while we received very little from VA in the way of anticipated volumes for the PC3 program, we were generally assured that referrals for care made 

to TriWest from VA would result in a patient visit. In that sense, we were able to 

predict with some level of certainty the staffing we needed to deliver timely service. 

With the Choice Program, at the outset it was not uncommon that only 15–20% of 

the eligible patients would ever call us to use the program to receive services in the 

community. However, we are never really sure from one day to the next what the 

‘‘uptake’’ rate will be from the Choice-eligible population. That creates substantial 

challenges in appropriately staffing for needed services on a daily and weekly basis. 

Obviously, it is our hope that as we continue to partner with VA and educate Veterans about the benefit of the program, some stability in expected utilization will 

occur. But, for now, it is a constant challenge to monitor over or under staffing for 

needed services. 

The only other issue is the multiple different reporting requirements that have 

us segmenting out workload by program. We certainly understand that it is important to track activity in ways that assure accurate accounting and program utilization. However, at times, the segmentation can present a picture of individual programs in isolation of the entirety of the efforts to provide care and service to Veterans. 

RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. BILL CASSIDY TO DAVID

J. MCINTYRE, JR., PRESIDENT AND CHIEF EXECUTIVE OFFICER, TRIWEST HEALTHCARE ALLIANCE

Question 2. Mr. McIntyre, After listing the challenges in your testimony that 

TriWest confronted in implementing a Patient Centered Community Care (PC3) 

across 28 States to give VA medical centers a consistent way to provide veterans 

access to care from a network of providers, you described a pilot done in the collaboration with the Dallas VAMC. At what point, was it decided to implement a pilot? 

If you are finding the pilot successful, why wasn’t that a strategy before implementation in 28 states to avoid some of the challenges you listed? 

Response. The pilot program in Dallas was specifically targeted at a challenge 

brought about by implementation of the Choice program; not the PC3 program. 

When the Choice program was first implemented, a major issue that was identified 

was the fact that providers in the community would need clinical consults (medical 

notes that also include the recommended or suggested specialty service needed) 

prior to providing services. There were only two ways for VA to provide that information to TriWest so that we could, in turn, hand it to community providers: provide it all up front or provide it only when needed following outreach from a 

Veteran. 

The second option certainly seemed to be a more efficient and effective way to provide the information. However, given the short timeframe of 90 days to stand up 

the program in its entirety and the backlog of patients on wait lists when the program went live, we all were rightly concerned that VA had no personnel operations 

or processes through which it could receive requests for those records and turn them 

around in a timely fashion. While we all wished it was not the case, we were forced 

to deal with the reality that attempting this at the outset could very well lead to 

more delays, not fewer. 

As such, we started the program with a system whereby VA sent a consult for 

every Veteran deemed eligible for care under the Choice program rules outlined by 

Congress regardless of whether the Veteran reached out to TriWest for care. It was 

our hope that this would ensure that TriWest would have all of the necessary information to help the Veteran as soon as he or she decided to reach out to the Choice 

program for assistance in obtaining a community care appointment. As the program 

grew, the number of clinical consults sent to TriWest grew right along with it. Yet, 

it was still the case that fewer than half of those eligible patients were reaching 

out to the Choice program for appointments. 

At this point, TriWest and VA realized that there were more than enough staff 

processing consults that we could comfortably begin to implement the more efficient 

and effective solution we all wanted to attempt initially. And we started to test that 

operationally in Dallas, Texas in the form of a pilot program. 

60 

RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. PATTY MURRAY TO

DONNA HOFFMEIER, VICE PRESIDENT AND PROGRAM OFFICER, VA SERVICES, HEALTH NET FEDERAL SERVICES

PRIVATE PROVIDERS AND NON-VA CARE

Question. TriWest and HealthNet both play major roles in both the Choice Program and in the Patient Centered Community Care Program. Some very important 

controls were put into the PCCC program, including requirements to coordinate 

health care and more oversight of the quality of care. As major contractors administering PCCC regions, each company made certain assumptions about workload 

and other factors in setting up business plans and provider networks for the PCCC 

program. How is management of the PCCC contracts affected with large portions 

of the workload going through the Choice Program instead? 

Response. Both PCCC and Choice support providing eligible Veterans with access 

to health care through a comprehensive network of community-based, non-VA medical professionals and facilities. The PCCC contract, awarded to Health Net in September 2013, was phased in over a six month period, with services beginning in January 2014. In October 2014, VA amended the PCCC contract to include several components of the Choice Act (such as production and distribution of Choice Cards, establishment of a call center, and other administrative functions) and required very 

fast implementation in one month. 

PCCC and Choice are designed to achieve the same objective of enabling VA to 

provide all eligible Veterans with access to the care they need in the local community. In support of PCCC and Choice contract requirements, we have developed policies and processes to meet requirements to coordinate Veterans’ healthcare and provide oversight of quality. For example, in building provider networks, we tailor the 

network to meet the Veteran’s health care needs, as identified by the VA Medical 

Center that is submitting authorizations while meeting the specific requirements of 

PCCC and Choice. Choice Program participation requirements make it easier for 

providers to participate, and as a result we are able to get Choice providers on-board 

more quickly, which enhances Veterans’ access to community care. 

Currently, the range of options (e.g., PCCC, Choice, affiliate agreements/direct 

contracts, individual authorizations) for non-VA fee care is confusing for Veterans, 

providers, and VA staff. As VA discusses options to streamline the programs for 

non-VA care through greater use of PCCC and Choice, we would anticipate greater 

efficiency in care delivery. 

Chairman ISAKSON. All right. Welcome back to the Senate Veterans’ Affairs Committee. It was a good first panel. I apologize to 

our second panelist that it took so long, but I think it was beneficial, and from the participation you all were illustrating by the 

looks on your faces, I am sure you enjoyed it, too. Thank you very 

much. 

For our second panel we have Mr. Roscoe Butler, the Deputy Director for Health Care for The American Legion. Roscoe, good to 

have you. 

Darin Selnick, Senior Veterans Affairs Advisor for Concerned 

Veterans for America. 

Joseph Violante, National Legislative Director, Disabled American Veterans. 

Mr. Bill Rausch—who is missing in action right now, or AWOL— 

Political Director for Iraq and Afghanistan Veterans of America. 

And Carlos Fuentes, Senior Legislative Associate of the Veterans 

of Foreign Wars. 

We welcome all of you for being here today, and we will start 

with you, Mr. Butler. 

STATEMENT OF ROSCOE G. BUTLER, DEPUTY DIRECTOR, 

HEALTH CARE, VETERANS AFFAIRS AND REHABILITATION 

DIVISION, THE AMERICAN LEGION 

Mr. BUTLER. Chairman Isakson, Ranking Member Blumenthal, 

and distinguished Members of the Committee, on behalf of our naVerDate Mar 15 2010 18:29 Jun 30, 2016 Jkt 000000 PO 00000 Frm 00064 Fmt 6633 Sfmt 6601 Z:\ACTIVE\051215.TXT PAULIN
61 

tional commander, Michael Helm, and the 2.3 million members of 

The American Legion, we thank you for this opportunity to testify 

regarding The American Legion’s views of the progress of the Veterans Choice Program. 

The American Legion supported the Veterans Access, Choice, and 

Accountability Act of 2014 as a means of addressing emerging 

problems within the Department of Veterans Affairs. VA wait 

times for outpatient medical care had reached an unacceptable 

level nationwide as veterans struggled to receive access to timely 

health care within the VA health care system. It was clear that 

swift changes were needed to ensure veterans could access health 

care in a timely manner. As a result, The American Legion immediately took charge by setting up veterans benefits centers (VBCs) 

in large and small cities across the country to assist veterans in 

need and their families as a result of the systemic scheduling crisis 

facing the VA. 

The American Legion VBCs’ charge is to work firsthand with veterans experiencing difficulties in obtaining health care or having 

difficulties in receiving their benefits. 

On November 5, 2014, VA rolled out the Veterans Choice Card 

Program, and after 6 months, it is clear the program fell short of 

the initial projections from the CBO. According to the VA latest 

Daily Choice Metrics dated November 30, 2014, there were approximately 51,000 authorizations issued for non-VA care since implementation of the Choice Program, with about 49,000 appointments 

scheduled. When you compare these numbers to the over 8 million 

Choice Cards issued, one would ask: Why did VA issue so many 

Choice Cards? Nevertheless, The American Legion is optimistic 

that the recent rule change by eliminating the straight-line rule 

and using the actual driving distance will allow more veterans access to health care under the Choice Program. 

The American Legion also believes that if VA were to move forward with the 40-mile rule change to only include a VA medical facility that can provide the needed medical care or services, everyone would see increases in utilization and access to non-VA health 

care. 

The American Legion applauds the Senate for unanimously passing an amendment reminding the Department of Veterans Affairs 

they have the obligation to provide non-VA care when it cannot 

offer the same treatment at one of its own facilities that is within 

the 40-mile driving distance from the veteran’s home. We now call 

upon the House to take up H.R. 572, the Veterans Access to Community Care Act, and ensure its swift passage. Let us get these 

bills to the President’s desk and make sure we are taking care of 

our rural veterans. 

During a recent visit last month to examine the health care system in Puerto Rico, The American Legion learned that VA staff had 

been mistakenly telling veterans that no one on the island is eligible for health care under the Veterans Choice Card Program because there is no medical facility that is further than 40 miles from 

anywhere anyone lives on the island. The American Legion is concerned that as a result of inadequate training, there could be staff 

at many health care facilities who failed to receive proper training 

62 

as a result of bad communications and providing incorrect information to veterans. 

Recently, The American Legion learned that the VA contract 

with Health Net and TriWest required these third-party administrators to report Daily Choice Metrics. However, this contractor requirement has now expired, and the TPAs are no longer required 

to report these daily metrics. The last report VA provided to VSOs 

was dated March 31, 2015. The American Legion is concerned that 

since the TPAs are no longer required to provide these daily 

metrics, VA can easily lose track of the numbers. 

The American Legion calls on Congress to require VHA to continue reporting these daily metrics throughout the duration of the 

contract or explain how they will continue to track this information. In fiscal year 2014, VA spent over $7 billion on non-VA health 

care. Many of the non-VA purchased care programs are managed 

by different program officers in VA’s central office, and some of 

these services are handled outside of VA’s fee-basis claim processing system. VA should streamline its current purchased care 

model to incorporate all of VA’s non-VA care programs into a single 

integrated purchased care model. 

Congress should also look into streamlining the VA’s non-VA 

care statutory authorities. Once Congress gets a better sense of 

how the Choice Program will play out over the next couple of years, 

VA’s non-VA care statutory authorities should be consolidated and 

rationalized incorporating lessons learned from the VA Choice 

Program. 

Thank you, and, again, Mr. Chairman, Ranking Member 

Blumenthal, I appreciate the opportunity to present The American 

Legion’s views and look forward to answering any questions you 

may have. 

[The prepared statement of Mr. Butler follows:] 

PREPARED STATEMENT OF ROSCOE G. BUTLER, DEPUTY DIRECTOR, HEALTH CARE, 

VETERANS AFFAIRS AND REHABILITATION DIVISION, THE AMERICAN LEGION

Chairman Isakson, Ranking Member Blumenthal, and distinguished Members of 

the Committee, On behalf of our National Commander, Michael Helm, and the 2.3 

million members of The American Legion, we thank you for this opportunity to testify regarding The American Legion’s views of the progress of the Department of 

Veterans Affairs veterans choice program. 

BACKGROUND

The American Legion supported the passage of H.R. 3320, the ‘‘Veterans Access, 

Choice, and Accountability Act (VACAA) of 2014’’ that was signed into law on August 7, 2014 as Public Law (PL) 113–146; as a means of addressing emerging problems within the Department of Veterans Affairs (VA). VA’s wait time for outpatient 

medical care had reached an unacceptable level nationwide and veterans were 

struggling to receive access to care within the VA healthcare system. It was clear 

that swift changes were needed to ensure veterans could access health care in a 

timely manner. Congress implemented this law to ensure when VA could not provide access to timely, high-quality health care inside the VA health care system; eligible veterans could elect to receive needed health care outside the VA health care 

system as a temporary measure until VA corrected its wait-time problem. The law 

authorizes veterans who were enrolled as of August 1, 2014, current eligible, or recently discharged combat veterans, the ability to be seen outside the VA by an approved non-VA health care provider if they are unable to schedule an appointment 

63 

1Public Law 113–146—August 7, 2014: Veterans Access, Choice, and Accountability Act of 

2014: http://www.gpo.gov/fdsys/pkg/PLAW-113publ146/pdf/PLAW-113publ146.pdf 2Federal Register, 79 FR 65571: https://www.Federalregister.gov/articles/2014/11/05/2014- 

26316/expanded-access-to-non-va-care-through-the-veterans-choice-program 

within 30 days of their preferred date, clinically appropriate date, or live more than 

40 miles from a VA medical facility.1

ASSESSMENT OF THE CHOICE PROGRAM TO DATE

On November 5, 2014, The Department of Veterans Affairs Veterans Health Administration (VHA) started the Veterans Choice program in three stages of implementation. The initial step VHA took was to mail 320,000 choice cards to enrolled 

veterans who reside more than 40 miles from any type of VA medical facility. On 

November 17, 2014, VHA initiated the second stage by mailing the choice card to 

those veterans who were currently waiting for an appointment longer than 30 days 

from their preferred date or the date determined to be medically necessary by their 

physician. The third and final stage was to mail choice cards and letters to the remainder of all veterans enrolled in the VA health care who may be eligible for the 

Choice Program in the future. The card mailings included a letter explaining how 

to verify eligibility and use the choice card. As of February 2, 2015, according to the 

latest Daily Choice Metrics obtained from VA Health Net, one of the third-party administrators (TPAs) authorized 16,644 veterans to be seen outside the VA 

healthcare system under the Choice Program, of which 13,733 appointments were 

scheduled. Similarly, TriWest, another TPA issued 34,909 authorizations, and 

scheduled 34,909 appointments. Based on this information, the authorizations totaled 50,936 and appointments scheduled totaled 48,642. When you compare the 

number of authorizations and appointments scheduled to the 8,671,993 Veterans 

Choice Cards issued, one can easily arrive at a conclusion that the program is off 

to a slow start. However, The American Legion is optimistic that the recent changes 

used to calculate the distance between a veteran’s residence and the nearest VA 

medical facility, moving from a straight-line distance to actual driving distance, will 

allow more veterans access to care under the Veterans Choice program. 

Recently, The American Legion learned that the portion of VHA’s Veterans Choice 

contract with Health Net and TriWest, which requires the TPA’s to report Daily 

Choice metrics, has expired and the TPA’s will no longer be reporting this information to VA. The American Legion is concerned that if the TPA’s are no longer required to provide this type of information the number can be easily manipulated 

and may become an issue in the future. The American Legion calls upon Congress 

to require VHA to continue reporting these daily metrics throughout the duration 

of the contract, or explain how they will continue to track this information. One of 

the critical functions of the original legislation was to provide metrics on how and 

where the program was being used as a bellwether to indicate where VA needed 

to improve capacity in their system or efficiency of care delivery. By examining 

where the Choice program is used most heavily, stakeholders should be able to determine where improvements are needed in VA’s overall care network. 

ACTIONS NEEDED TO ELIMINATE IMPEDIMENTS TO GREATER VETERAN AND PHYSICIAN

PARTICIPATION

On February 25, 2015, American Legion National Commander Michael D. Helm 

stated during his congressional testimony before the Senate and House Veterans’ 

Affairs Committees that one of the biggest challenges he has seen with the implementation of the Veterans Choice Card Program is the confusion over VA’s definition of a VA medical facility. 

On November 5, 2014, VA published a regulation which defines a ‘‘VA medical facility’’ as a VA hospital, a VA community-based outpatient clinic (CBOC), or a VA 

health care center. VA further stated that they ‘‘* * * included these types of VA 

facilities because they provide medical care or hospital services that may be provided as part of the program.’’ 2 However, there is no consideration as to whether 

the VA medical facility can provide veterans the needed medical services. In many 

cases, veterans are being referred from a CBOC to the parent VA medical center 

which can be over 150 miles further away without taking into account travel times 

and road conditions. This can significantly impact veterans’ ability to maintain their 

appointments, which directly impact VA’s appointment cancellation and no-show 

rates. 

During The American Legion’s Commander’s testimony, Senator Moran (KS) emphasized the importance of providing non-VA health care to veterans. Senator 

64 

3 Commander to Congress: We face ‘historic opportunities’–February 26, 2015: http:// 

www.legion.org/washingtonconference/226220/commander-congress-we-face-%E2%80%98historicopportunities%E2%80%99 4 Congress.gov: https://www.Congress.gov/bill/114th-congress/senate-concurrent-resolution/11 

5GAO Testimony: Veterans Affairs Health Care, Addition to GAO’s High Risk List and Actions Needed for Removal, GAO–15–580T http://www.gao.gov/assets/670/669927.pdf 

Moran calculated the distance from Helm’s home in Norcatur, Kansas to the nearest 

VA medical facilities. 

‘‘It’s 267 miles to Denver, 287 miles to Wichita, 287 miles to Omaha, and 

100 miles to the nearest Community Based Outpatient Center (CBOC). I 

appreciate the perspective that this commander will bring about caring for 

all veterans regardless of where they live in the United States.’’ 3

On March 27, 2015, American Legion National Commander Mike D. Helm praised 

the Senate for unanimously passing an amendment to remind the Department of 

Veterans Affairs that they have the obligation to provide non-VA care when it cannot offer that same treatment at one of its own facilities that is within 40-miles 

driving distance from a veteran’s home. According to Commander Helm, the call to 

VA to clarify its stance was embodied in an amendment, offered by Senator Jerry 

Moran, R-Kansas, to Senate’s budget Resolution 11.4

‘‘This bill simply calls on VA to do what it already had the authority to 

do,’’ National Commander Michael D. Helm said. ‘‘Intent is everything. 

When Congress passed the Veterans Access, Choice and Accountability Act 

last year, it once again gave VA this authority. I say ‘once again’ because 

VA had this authority on a fee-basis long before the Choice act. Despite this 

authority, VA was trying to find loopholes by denying people who were near 

VA clinics that did not offer the needed services the right to use an alternative provider.’’ 

‘‘We applaud Senator Jerry Moran for writing this amendment, even 

though it’s a shame that such a common sense measure needs to be spelled 

out repeatedly for VA. We call on the House to pass this measure quickly 

and send an unmistakable message to VA.’’ 

EFFORTS TO ENSURE ADEQUATE TRAINING OF VA STAFF REGARDING

THE CHOICE PROGRAM

The American Legion is concerned that due to improper training, some VA medical centers are not offering Choice access to their veterans at all. On a recent visit 

last month to examine the healthcare system in Puerto Rico, The American Legion 

discovered VHA staff had been mistakenly telling veterans that no one on the island 

is eligible because there is no medical facility that is further than 40 miles from 

anywhere on the island. The American Legion also heard scattered reports of similarly confusing directives about the program from some other medical facilities, in 

contradiction to what was being expressed by VA Central Office directives. This can 

only occur when employees are not adequately trained, which can result in 

miscommunication. Better understanding of programs and communication between 

VA and the veterans they serve is essential to the success of any VA program. 

In a recent Senate Veterans Affairs hearing, Debra Draper Director of Health 

Care Issues Government Accountability Office (GAO) stated: 

‘‘the veterans health care system was added to the high-risk list due to ambiguous policies and inconsistent processes; inadequate oversight and accountability; information technology challenges (such as outdated systems 

that lack interoperability); inadequate training for VA staff; and unclear resource needs and allocation priorities.’’ 5

Since the implementation of the Veterans Choice Program, The American Legion 

has seen and heard from veterans Nation-wide, that there was a complete lack of 

training and knowledgeable staff regarding the program requirements, rules and 

regulations. The American Legion is concerned when the Veterans Choice program 

was rolled out, VA did not issue an official national policy to its health care facilities 

outlining VA’s policy, procedures and program requirements. However, VHA Directive 6330, ‘‘Directives Management System’’ (DMS), states: 

‘‘It is VHA policy that VHA Central Office, VHA Veterans Integrated 

Service Networks (VISNs) and their field facilities establish and maintain 

a DMS, in accordance with this VHA Directive and corresponding Handbooks, regarding ‘‘directive’’ and ‘‘non-directive’’ media. Directive documents 

65 

6Department of Veterans Affairs VHA Directive 6330- December 15, 2008: http://www.va.gov/ 

vhapublications/ViewPublication.asp?pub_ID=1814 

contain mandatory policies, procedures, and, as indicated, oversight monitoring requirements.’’ 

This directive establishes mandatory VHA policies for VHA Programs.6 According 

to VHA Directive 6330, VHA can issue two types of policy Directives, a VHA DMS 

Directive or a VHA Temporary Directive. 

A VHA DMS directive establishes mandatory VHA policies for VHA Programs. 

These Directives must be recertified every 5 years. A VHA Temporary Directive defines policy that has a limited time span or new program policies that will be incorporated in DMS Handbooks at a later date. A Temporary Directive carries an expiration date and is not issued for longer than 5 years. If the policies prescribe shortterm requests for reports, data collection or implement special short-term programs, 

they are issued as temporary directives with a 5-year (or less) expiration date specified. 

The lack of VHA policies and procedures outlining the Veteran Choice program 

requirements and procedural guidance for VHA field facilities staff to follow has significantly undermined VA’s ability to educate and provide appropriate guidance to 

its employees. These policies and procedures when implemented are often used by 

VA staff to properly train employees throughout the health care system. 

The American Legion believes when a new law is passed implementing new program requirements or changes, VHA should be required to provide Veterans Service 

Organizations and Congress a detail communication plan outlining it plans to implement the changes required by the law to include plans for staff training. In additional to this information, VHA should include the timeframe for issuing any VHA 

Directives and Handbooks. 

INCREASING ACCESS TO CARE BY STREAMLINING VA’S MULTIPLE NON-VA CARE

PROGRAMS INTO A SINGLE INTEGRATED PURCHASED CARE MODEL

VA spent over $5.5 billion on Non-VA care in Fiscal Year 2014. Many of VA’s nonVA purchase care programs are managed by different program offices within VHA, 

and purchases for Contract Nursing Home, VA’s State Home, Home Health, Dental 

and Bowel and Bladder services are handled outside of VA’s Fee-Basis Claims Processing System. VA needs to streamline its current purchase care model to incorporate all of VA’s non-VA care programs into a single integrated purchase care 

model. 

Congress should also look into streamlining VA’s non-VA care statutory authorities. Currently, there are eight statutory authorities, including the new Choice Act. 

Once Congress gets a better sense of how the Choice Program will play out over 

the next couple of years, the eight statutory authorities should be consolidated and 

rationalized incorporating lessons learned from the Choice Program. 

CONCLUSION

As always, The American Legion thanks this subcommittee for the opportunity to 

explain the position of the 2.3 million veteran members of this organization. 

For additional information regarding this testimony, please contact Mr. Warren 

J. Goldstein at The American Legion’s Legislative Division at (202) 861–2700 or 

wgoldstein@legion.org. 

Chairman ISAKSON. We appreciate the Legion’s willingness to follow up and come to all our hearings and give us the testimony we 

need. Thank you, Roscoe. 

Darin Selnick, senior veterans affairs advisor for the Concerned 

Veterans of America. 

STATEMENT OF DARIN SELNICK, SENIOR VETERANS AFFAIRS 

ADVISOR, CONCERNED VETERANS FOR AMERICA 

Mr. SELNICK. Chairman Isakson, Ranking Member Blumenthal, 

and Members of the Committee, I appreciate the opportunity to 

testify at today’s hearing on the implementation and future of the 

Veterans Choice Program, and thank you for your leadership in ensuring that veterans get the quality health care they deserve. 

66 

Today true choice in veterans health care remains out of reach 

for most veterans: like a mirage in the desert, as you move closer 

it recedes into the horizon. Our assessment is that the Choice Program has been unsuccessful and is not a long-term solution. As 

such, we have developed recommendations for comprehensive reform through the Fixing Veterans Health Care Taskforce. 

The current rules pertaining to choice do not represent real 

choice. Instead they require veterans to obtain approval from VA 

before they are able to make a choice. Veterans should not have to 

ask for permission to select their health care provider. 

The VA implementation of the Choice Program has been a failure. For example, the Associated Press reported, ‘‘GAO says Veterans’ Health Care Costs a ‘High Risk’ for Taxpayers....The number 

of medical appointments that take longer than 90 days to complete 

has nearly doubled,’’ and that only 37,000 medical appointments 

have been made through April 11. 

Last fall, CVA commissioned a national poll of veterans. The results showed that 90 percent favored efforts to reform veterans 

health care, 88 percent said eligible veterans should be given the 

choice to receive medical care from any source they choose, and 77 

percent said they want more choices even if it involved higher outof-pocket costs. 

Choice and competition are the bedrock of today’s health care 

system. We choose our health care insurance, provider, and primary care physician. Health care organizations provide quality and 

convenient care because they know if they do not, they will lose 

their patients to someone else. In order to fix the VA health care 

system, both choice and competition must be injected into the 

system. 

VA recognized this when they said ‘‘evaluate options for a potential reorganization that puts the veteran in control of how, when, 

and where they wish to be served.’’ Unfortunately, veterans do not 

have that control and will not under the current VA health care 

system. 

VA needs to have a 2015 health care system. We believe the Veterans Independence Act is the road map and solution to do just 

that. This road map was developed by the Fixing Veterans Health 

Care Task Force, co-chaired by Dr. Bill Frist, former Senate Majority Leader; Jim Marshall former Congressman from Georgia; Avik 

Roy of the Manhattan Institute; and Dr. Mike Kussman, former 

VHA Under Secretary. 

We developed ten veteran-centric core principles that serve as 

the guiding foundation. These ten principles included: the veteran 

must come first, not the VA; veterans should be able to choose 

where to get their health care; refocus on, and prioritize, veterans 

with service-connected disabilities and specialized needs; VA 

should be improved, and thereby preserved; grandfather current 

enrollees; and VHA needs accountability. 

To implement these principles, we laid out three major categories 

of reform and nine policy recommendations. 

First, restructure the VHA as an independent, Government-chartered nonprofit corporation, empowered to make decisions on personnel, IT, facilities, partnerships, and other priorities. 

67 

Second, give veterans the option to seek private health care coverage with their VA funds. 

Third, refocus veterans’ health care on those with service-connected injuries—VA’s original mission. 

The key policy recommendations included: separate the VA’s 

payer and provider functions into separate institutions; establish 

the Veterans Health Insurance Program as a program office in 

VHA; establish the Veterans Accountable Care Organization, 

VACO, as a nonprofit Government corporation fully separate from 

VA; preserve the traditional VA health benefit for enrollees who 

prefer it, while offering an option to seek coverage from the private 

sector through three plan choices: 

VetsCare Federal: Full access to the VACO integrated health 

care system with no changes to benefits or cost sharing; 

VetsCare Choice: Select any private health care insurance 

plan legally available in their State, financed through premium 

support payments; and 

VetsCare Senior: Medicare-eligible veterans can use their VA 

funds to defray the costs of Medicare premiums and supplemental coverage. 

Last, create a VetsCare Implementation Commission, to implement the Veterans Independence Act. 

We retained the services of HSI to conduct a fiscal analysis. HSI 

determined a properly designed version of these policy recommendations is likely to be deficit neutral. 

In order to fix veterans health care, we must always keep in 

mind what General Omar Bradley said in 1947: ‘‘We are dealing 

with veterans, not procedures; with their problems, not ours.’’ 

That is why we urge you to use the Veterans Independence Act 

road map to develop the legislative blueprint that will fix and be 

the future of veterans health care. Veterans must be assured that 

they will be able get the access, choice, and quality health care 

they deserve. In this mission, failure is not an option. 

We are committed to overcoming all and any obstacles that stand 

in the way of achieving this important mission, and we look forward to working with the Chairman, Ranking Member, and all 

Members of this Committee to achieve this shared mission. 

Thank you. 

[The prepared statement of Mr. Selnick follows:] 

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

Thank you Chairman Isakson, Ranking Member Blumenthal, and Members of the 

Committee. I appreciate the opportunity to testify at today’s hearing on the implementation and future of the veterans choice program and your leadership in ensuring that veterans get timely and convenient access to the quality health care they 

deserve. 

Nearly as we approach the one year anniversary of the passage of the Veterans 

Access, Choice and Accountability Act of 2014, true choice in veteran’s health care 

remains out of reach for most veterans: like a mirage in the desert, as you move 

closer it recedes into the horizon. Our assessment is that the choice program has 

been unsuccessful and is not a tenable long-term solution. As such, we have developed recommendations for comprehensive reform through the Fixing Veterans 

Health Care Taskforce. 

The current rules pertaining to choice do not represent real choice. Instead they 

require veterans to obtain approval from VA before they are able to make a choice. 

Veterans should not have to ask for permission to select their health care provider. 

68 

1 Associated Press. ‘‘GAO: Veterans’ Health Care Cost a ’High Risk’ for Taxpayers’’ New York 

Times Online. ABC News Online, 11 Feb. 2015. Web. 11 Feb. 2015. 2 Associated Press. ‘‘VA Makes Little Headway in Fight to Shorten Waits for Care’’ ABC News 

Online. ABC News, 09 April 2015. Web. 09 April 2015. 3 Associated Press. ’’$10B Veterans Choice program more underused than previously thought’’ 

Stars and Stripes Online. Starr and Stripes, 23 April 2015. Web. 23 April 2015. 4 ‘‘The Road to Veterans Day 2014 Fact Sheet’’ http://www.blogs.va.gov/VAntage/wp-content/ 

uploads/2014/09/RoadToVeteransDay_FactSheet_Final.pdf, accessed May 5, 2015. 

The VA implementation of the choice program has been a failure. For example, 

the Associated Press has reported that ‘‘GAO says Veterans’ Health Care Costs a 

‘‘High Risk’’ for Taxpayers’’ 1 and that ‘‘The number of medical appointments that 

take longer than 90 days to complete has nearly doubled.’’ 2 They have also noted 

that ‘‘only 37,648 medical appointments have been made through April 11.’’ 3

Last fall, Concerned Veterans for America commissioned a national poll of veterans. The results of that poll showed that 90% favored efforts to reform veteran 

health care, 88% said eligible veterans should be given the choice to receive medical 

care from any source they choose and 77% said give veterans more choices even if 

it involved higher out-of-pocket costs. 

Choice and competition are the bedrock of today’s health care system. We choose 

our health care insurance, provider and primary care physician. Health care organizations provide quality, timely and convenient care, because they know if they don’t, 

they will lose their patients to someone else. In order to fix the VA health care system, both choice and competition must be injected into system. 

Secretary Bob McDonald’s VA has recognized this in a fact sheet wherein they 

promise to ‘‘evaluate options for a potential reorganization that puts the Veteran in 

control of how, when, and where they wish to be served.’’4 Unfortunately veterans 

do not have that control and will not under the current VA health care system. 

The outmoded VA health care system that currently exists needs to become a 

2015 health care system. We believe the Veterans Independence Act is the roadmap 

and solution to do just that. This roadmap is part of the Fixing Veterans Health 

Care report developed by a Bi-Partisan Policy Taskforce co-chaired by Dr. Bill Frist, 

former Senate Majority Leader, Jim Marshall former Congressman from Georgia, 

Avik Roy of the Manhattan Institute and Dr. Mike Kussman, former VHA Under 

Secretary. 

The solutions and actions recommended are designed to provide concrete reforms 

to dramatically improve the delivery of health care to the 5.9 million unique veteran 

patients served by the VA. 

We first developed ten veteran-centric core principles that serve as the guiding 

foundation. These ten principles are: 

1. The veteran must come first, not the VA 

2. Veterans should be able to choose where to get their health care 

3. Refocus on, and prioritize, veterans with service-connected disabilities and 

specialized needs 

4. VHA should be improved, and thereby preserved 

5. Grandfather current enrollees 

6. Veterans health care reform should not be driven by the budget 

7. Address veterans’ demographic inevitabilities 

8. Break VHA’s cycle of ‘‘reform and failure.’’ 

9. Implementing reform will require bipartisan vision, courage and commitment 

10. VHA needs accountability 

In order to implement these principles, we laid out three major categories of reform and proposed nine policy recommendations. 

First, restructure the VHA as an independent, government-chartered nonprofit corporation, fully empowered to make difficult decisions on personnel, 

I.T., facilities, partnerships, and other priorities. 

Second, give veterans the option to seek private health coverage with their 

VA funds. 

Third, refocus veterans’ health care on those with service-connected injuries— 

which was the VA’s original mission. 

These reforms are carried out by nine policy recommendations: 

1. Separate the VA’s payor and provider functions into separate institutions, the 

Veterans Health Insurance Program (VHIP) and the Veterans Accountable Care Organization (VACO). 

2. Establish the Veterans Health Insurance Program (VHIP) as a program office 

in the Veterans Health Administration. 

69 

3. Establish the Veterans Accountable Care Organization (VACO) as a non-profit 

government corporation fully separate from Department of Veterans Affairs. 

4. Institute a VA Medical Center realignment procedure (MRAC) modeled after 

the Defense Base Realignment and Closure Act of 1990 (BRAC). 

5. Require the VHA to report publicly on all aspects of its operation, including 

quality, safety, patient experience, timeliness, and cost-effectiveness. 

6. Preserve the traditional VA health benefit for current enrollees who prefer it, 

while offering an option to seek coverage from the private sector through three plan 

choices. 

VetsCare Federal: Full access to the VACO integrated health system with no 

changes to benefits or cost-sharing 

VetsCare Choice: Select any private health insurance plan legally available in 

their state, financed through premium support payments. 

VetsCare Senior: Medicare-eligible veterans can use their VA funds to defray 

the costs of Medicare premiums and supplemental coverage (‘‘Medigap’’). 

7. Reform health insurance coverage for future veterans. 

8. Offer veterans’ access to the Federal Long Term Care Insurance Program. 

9. Create a VetsCare Implementation Commission, to implement the Veterans 

Independence Act. 

To understand the fiscal impact of these policy recommendations, we retained the 

services of Health Systems Innovation Network to conduct a fiscal analysis. HSI determined a properly designed version of these policy recommendations is likely to 

be deficit neutral. 

In order to fix veterans health care we must always keep in mind what General 

Omar Bradley said in 1947: ‘‘We are dealing with veterans, not procedures; with 

their problems, not ours.’’ 

That is why we urge you to use the Veterans Independence Act road map to develop the legislative blueprint that will fix and be the future of veterans health care. 

Veterans must be assured that they will be able get the access, choice and quality 

health care they deserve. In this mission, failure is not an option. 

CVA and the co-chairs of the taskforce are committed to overcoming any and all 

obstacles that stand in the way of achieving this important mission. We look forward to working with the chairman, ranking member, and all Members of this Committee to achieve this shared mission. 

Chairman ISAKSON. Thank you, Mr. Selnick. 

Let me just interject at this point. I have read—and I am sure 

Sen. Blumenthal has, too—the Fixing Veterans Health Care Report 

that your organization did, which is an outstanding report. I think 

it basically could be called ‘‘Ultimate Choice,’’ if I am not mistaken. 

Wouldn’t that be a good name for it? 

Mr. SELNICK. Yeah, that would be a good name. 

Chairman ISAKSON. Your representation of the changes are probably far more broad than some on the panel might look for us to 

do in terms of preserving what VA does without giving choice, but 

I want to commend you on that and let you know we are watching 

what you recommended. We are taking a look at it. We are trying 

to make sure—Senator Blumenthal and I have one underlying 

principle: we are going to make Veterans Choice work. It is not an 

option that it might work; if it does not work, we will think of 

something else. We are going to make it work. How it works is 

going to take the very best ideas and input, and your organization’s 

report is one of those that is going to help us a lot, as is each stakeholders’ input. This is going to be a process of evolution as we go, 

but one thing is for sure: we are not just hoping it is going to be 

over one day. We are going to make it happen one way or another. 

Mr. SELNICK. Thank you. 

Chairman ISAKSON. Mr. Violante. 

70 

STATEMENT OF JOSEPH A. VIOLANTE, NATIONAL 

LEGISLATIVE DIRECTOR, DISABLED AMERICAN VETERANS 

Mr. VIOLANTE. Chairman Isakson, Ranking Member Blumenthal, 

and Members of the Committee, on behalf of the DAV and our 1.2 

million members, all of whom were wounded, injured, or made ill 

from their wartime service, thank you for the opportunity to testify 

on the temporary Choice Program. While it is too early to reach 

conclusions about this program, we are beginning to see some 

lessons. 

As of last week, almost 54,000 Choice authorizations have been 

made and 43,000 appointments have been scheduled. By comparison, about 6 million appointments are completed monthly inside 

VA and another 1.3 million appointments are completed outside VA 

using non-VA care programs other than Choice. 

A number of reasons likely contributed to this lower than expected utilization of the Choice Program. Since last spring, VA has 

used every available resource to increase its capacity to provide 

timely care that may have shifted some of the demand away from 

Choice. 

VA was slow in rolling out Choice cards and in educating its 

staff. We also have high-risk troubling reports of a significant lag 

time between when a VA clinician determines a veteran is eligible 

for Choice and third-party administrators can see this authorization in their system. 

Finally, some veterans simply prefer to go to VA. The bottom line 

is we do not have adequate information today and need to take 

steps to gather sufficient data before making any permanent 

changes. We must study private sector wait times and access 

standards, coordination of care, patient satisfaction, and health 

outcomes for those who use the Choice Program. 

Mr. Chairman, recently DAV, VFW, the Legion, IAVA, and others wrote to congressional leaders to extend the mandate of the 

Commission on Care to allow at least 12 months for its interim report and at least an additional 6 months for the final report. We 

called on Congress to refrain from making any permanent, systemic changes until after the Commission submitted its recommendations and then allowed sufficient opportunity for stakeholders and Congress to engage in a debate worthy of the men and 

women who served. 

For more than 150 years, going back to President Lincoln’s solemn vow—‘‘to care for him who shall have borne the battle’’—the 

VA health care system has been the embodiment of our national 

promise, yet today some are proposing to make it just another 

choice among health care providers, while others are calling for the 

VA to be downsized or eliminated. But for millions of veterans 

wounded, injured, or ill from their service, there is only one choice 

for receiving the specialized care they need, and that is a healthy 

and robust VA. 

Although the VA provides comprehensive medical care to more 

than 6 million veterans, the VA’s primary mission is to meet the 

unique, specialized health care needs of the Nation’s 3.8 million 

service-connected disabled veterans. If VA was downsized or eliminated, the private health care system would be unable to provide 

timely access to the specialized care they require. Even if all disVerDate Mar 15 2010 18:29 Jun 30, 2016 Jkt 000000 PO 00000 Frm 00074 Fmt 6633 Sfmt 6601 Z:\ACTIVE\051215.TXT PAULIN
71 

abled veterans were dispersed into private care, they would only be 

1.5 percent of the total adult population. Does anyone truly believe 

that a market-based civilian health care system would provide the 

focus and resources necessary for this small minority in the way 

VA does? 

Mr. Chairman, while it is far too soon to settle on how to reform 

the VA health care system and integrate non-VA care, we can at 

least outline a framework for rebuilding, restructuring, restructuring, realigning, and reforming the VA health care system. 

First, rebuild and sustain VA’s capacity by recruiting, hiring, and 

retaining sufficient clinical staff, and by funding a long-term strategy to repair and maintain VA facilities. 

Second, restructure the many non-VA care programs into a single 

integrated extended care network which incorporates the best features of fee-based, ARCH, PC3, and other purchased care programs 

and provide this program with a separate and guaranteed funding 

source. 

Third, realign and expand VA health care to meet the diverse 

needs of future generations of veterans, including women veterans. 

This should include new urgent-care nationwide with extended operating hours. 

Fourth, reform VA management by redesigning its performance 

and accountability report and restructuring its budget process by 

implementing a PPBE system, which stands for planning, programming, budgeting, and execution. 

Mr. Chairman, this framework is not intended to be a final or 

detailed plan, nor could it be part of one at this point. But it offers 

a new pathway toward a future that truly fulfills Lincoln’s promise. 

That concludes my testimony, and I would be happy to answer 

any questions. 

[The prepared statement of Mr. Violante follows:] 

PREPARED STATEMENT OF JOSEPH A. VIOLANTE, NATIONAL LEGISLATIVE DIRECTOR, 

DISABLED AMERICAN VETERANS

Chairman Isakson, Ranking Member Blumenthal, and Members of the Committee: On behalf of the DAV and our 1.2 million members, all of whom were 

wounded, injured or made ill from their wartime service, thank you for the opportunity to testify before the Committee today to discuss the implementation of the 

temporary ‘‘choice’’ program authorized by the Veterans Access, Choice and Accountability Act of 2014 (VACAA), and how it fits into the larger issue of providing highquality, timely care to America’s veterans. 

It has been just over a year since the waiting list scandal exploded in Phoenix; 

nine months since passage of the VACAA; six months since the first ‘‘choice ‘‘ cards 

were mailed out; and just over three months since the mailing of nearly 9 million 

‘‘choice’’ cards was substantially completed. While it is still far too early to reach 

significant conclusions about whether this program will achieve its intended purpose, we are now beginning to see the outlines of early lessons from this grand 

experiment. 

Today’s hearing is an appropriate opportunity to examine the challenges VA has 

faced in implementing this unprecedented, temporary program, to explore some of 

the reasons for the lower-than-expected usage, and to consider changes and improvements to the program so that it can achieve its short-term goal of providing 

timely and convenient access for veterans seeking health care, and to start the discussion about how best to reform the VA health care system so that we never face 

this kind of access crisis again. 

ORIGINS OF THE VA HEALTH CARE ACCESS CRISIS

Mr. Chairman, in order to evaluate the success of the ‘‘choice’’ program, it is important to understand the underlying causes of the access crisis that precipitated 

72 

enactment of VACAA. While the scandal that enveloped VA last year certainly involved mismanagement in Phoenix and at other VA sites, we have no doubt that 

that principle reason veterans were put on waiting lists was the mismatch between 

funding available to VA and demand for health care from VA by veterans, a phenomenon that is hardly new. In fact, this mismatch has been regularly reported to 

Congress by DAV, our partners in the Independent Budget (IB), and others for more 

than a decade. 

In May 2003, the bipartisan Presidential Task Force to Improve Health Care for 

Our Nation’s Veterans examined chronic VA funding shortages in the wake of growing waiting lists at VA, which had resulted in the suspension of new enrollments 

for nonservice-connected veterans. At that time, 236,000 enrolled veterans were already waiting more than six months without any appointments—a much higher 

number than during last year’s crisis. However, despite clear evidence of inadequate 

funding, successive Administrations and Congresses failed to adequately increase 

VA funding to address the heart of the mismatch, or to end the moratorium on new 

enrollment. Unfortunately, that mismatch continues today. 

Mr. Chairman, over the past decade, the IB has recommended billions of dollars 

to support VA health care that the Administration did not request and Congress 

never appropriated. Over that period, we and our partner veterans service organizations have presented testimony to this Committee and others detailing shortfalls in 

VA’s medical care and infrastructure budgets. In fact, in the prior 10 VA budgets, 

the amount of funding for medical care requested by the Administration and ultimately provided to VA by Congress was more than $7.8 billion less than the 

amounts we recommended. Over the past five budgets, the IB recommended $4 billion more than VA requested and Congress approved. For this fiscal year, FY 2015, 

the IB had recommended over $2 billion more than VA requested or Congress appropriated. 

The other major contributor to VA’s access crisis is the lack of sufficient physical 

space to examine and treat all veterans in need of care. Over the past decade, the 

amount of funding requested by VA for major and minor construction to sustain its 

medical centers and clinics, compared to the amount appropriated by Congress, has 

been more than $9 billion less than what the IB estimated was needed to provide 

VA sufficient space to deliver timely, high-quality care. Over the past five years 

alone, that shortfall was more than $6.6 billion, and for this year the VA budget 

request is more than $2.5 billion less than the IB recommendation. 

Mr. Chairman, we are all aware that funding levels for VA have risen every year 

for more than a decade, and we appreciate that fact. However, the demand—as 

measured not only by enrollees and users, but more importantly by the number of 

appointments—has risen even faster. In addition, the cost of care is rising not just 

due to medical inflation, but also because of the increased cost of specialized care 

provided to so many veterans being treated for traumatic physical and mental injuries, many from the ongoing wars in Iraq and Afghanistan. When VA does not have 

enough physicians, nurses and other clinical staff, and when VA’s facilities are not 

being properly maintained, repaired, replaced or constructed, veterans will be required to wait for care. It was under these circumstances that DAV and many others supported the emergency VACAA legislation last year, but our support was 

predicated on a number of very important conditions and principles. 

BACKGROUND OF THE TEMPORARY CHOICE PROGRAM

First, DAV and all major veterans organizations agreed that the most important 

priority was to ensure that any veteran waiting for necessary medical care was 

taken care of, whether that care was provided inside VA or in some form of care 

in the community. Second, in setting up the new ‘‘choice’’ program, Congress established a separate and mandatory funding source to ensure that VA would not need 

to make a choice between providing care to veterans who chose to receive their care 

at VA and paying for those who chose to access care through the non-VA ‘‘choice’’ 

program. In fact, one of the primary reasons that VA’s purchased care program had 

struggled to meet veterans’ needs was the fact that it lacked a separate, mandated 

funding stream. Going forward, Congress and VA must ensure that funding for nonVA extended health care, however that program might be reformed, remains separate from funding for the VA health care system. 

Another principle that was central to our support for the ‘‘choice’’ program was 

the coordination of care, which is vital to quality. Care coordination helps ensure 

that the veteran’s needs and preferences for health services and information sharing 

are met in a timely manner. VA’s use of third party administrator (TPA) networks 

helps to assure that medical records are returned to VA, that quality controls are 

in place on clinical providers, and that neither VA nor veterans are improperly 

73 

invoiced for these services. VA’s use of the TPA structure has many similarities with 

VA’s Patient Centered Community Care (PC3) program. Through PC3, VA obtains 

standardized health care quality measurements, timely documentation of care, costavoidance with fixed rates for services across the board, guaranteed access to care, 

and enhanced tracking and reporting of VA expenditures. While the use of TPAs for 

non-VA care does not guarantee that coordination of care and health outcomes will 

meet the same standard as an integrated VA health care system, it remains an important component of how non-VA care should be provided in the future. 

Finally, and most importantly, while the VACAA established a temporary ‘‘choice’’ 

program to address an immediate need for expanded access, it also included a significant infusion of new resources to rebuild VA’s capacity to provide timely health 

care. As we have testified to this Committee and others, the underlying reason for 

VA’s access crisis last year was a long-term, systemic lack of resources to hire 

enough physicians, nurses and other clinical professionals, along with a lack of usable treatment space to meet the demand for care by patients. Regardless of how 

both VA and non-VA care health care programs are reformed in the future, unless 

adequate—and separate—funding is provided for both, veterans will likely continue 

to have unacceptable access problems. 

CHALLENGES FACING THE CHOICE PROGRAM

According to VA, as of last week, 53,828 Choice authorizations for care had been 

made to date by the TPAs and 43,044 actual appointments for care had been scheduled. By comparison, according to VA, about 6.4 million appointments are completed 

each month inside the VA health care system, and another 1.3 million appointments 

are completed outside VA each month using non-VA care programs other than the 

‘‘choice’’ program, including the fee-basis, contract care, PC3, ARCH and other programs. 

A number of reasons likely contributed to this lower than expected utilization of 

the ‘‘choice’’ program. On the positive side, since the most recent access crisis gained 

attention last spring, the VA has used every available resource to increase its capacity to provide timely care at facilities across the Nation. VA health care facilities 

expanded their days and hours of operation; mobile health units were deployed to 

areas with higher-than-average demand; and VA made greater use of existing nonVA care authorities. VA’s ability to expand its capacity on a temporary basis may 

have shifted some of the demand away from ‘‘choice.’’ 

It is also very clear that VA was slow in rolling out ‘‘choice’’ cards and in educating its own staff about how and when the ‘‘choice’’ program could be utilized. In 

part this was due to the extremely aggressive implementation schedule in the law. 

However, even today we are hearing reports of VA personnel who do not understand 

the ‘‘choice’’ program or its role among non-VA care authorities. As a result, some 

veterans who are eligible for ‘‘choice’’ are not being properly referred to the program, 

and some veterans who are eligible for non-VA care programs, such as PC3, are inappropriately being referred to ‘‘choice.’’ Both of these factors may have deterred 

some veterans from exploring their eligibility for the ‘‘choice’’ program. VA must do 

a better job of ensuring that all VA employees understand the proper role and relationship of all non-VA care programs, including ‘‘choice.’’ 

We also continue to hear troubling reports of a significant lag time between when 

a VA clinician determines a veteran is eligible for ‘‘choice’’ and the time that the 

TPA receives this authorization in its system. In some cases, we have been told up 

to 30 days or more could be required. VA must determine the cause of such unacceptable delays, whether IT related or not, and ensure that there is a rapid and 

seamless handoff from VA to the appropriate TPA. Such delays certainly might 

dampen veteran interest in using the ‘‘choice’’ program. 

Another possible contributing factor for the low utilization is the restrictive manner in which the 40-mile distance criterion mandated by VACAA was implemented. 

The bill established two primary access standards to determine when and which 

veterans would be authorized to use the new ‘‘choice’’ program: those who would 

have to wait longer than 30 days or travel more than 40 miles for VA care. Unfortunately, due to cost and scoring implications, the 40-mile standard was crafted, interpreted and implemented in a way that was more restrictive than logic and common 

sense would dictate, although VA has now revised that criterion in part. 

As was clearly stated in the report accompanying the law, the determination of 

whether a veteran resided more than 40 miles from the nearest VA medical facility 

was based on a geodesic measurement, essentially the distance in a straight line 

from point-to-point, or ‘‘as the crow flies.’’ Fortunately, following further discussions 

between VA and Congress, this distance has been revised so that the calculation of 

40 miles is now done by the shortest driving distance in road miles. This change 

74 

has expanded the number of veterans eligible under the distance standard and could 

lead to some increase in utilization. 

The second inequity in the distance criteria is that the measurement is taken 

from the veteran’s residence to the nearest VA medical facility regardless if that facility can actually provide the service required by the veteran. As has been acknowledged by the law’s primary sponsors, these restrictive standards for measuring 40 

miles were due to the high cost estimates received from the Congressional Budget 

Office (CBO) during the bill’s consideration, and a need to lower that projected cost. 

As we have testified previously, such a measurement makes no logical sense and 

should be changed in the temporary ‘‘choice’’ program. 

However, it is important to note that creating a system that will allow VA to immediately determine whether a service is or is not available at a VA and/or private 

facility, or will be available within a 30-day window, could be very difficult. Furthermore, VA has indicated that the number of veterans who may live farther than 40 

miles from a VA medical center, where most VA specialty care is delivered, could 

rise to as high as 3.9 million, which could significantly expand the utilization of the 

program. 

Finally, another reason so few veterans have used the ‘‘choice’’ program may be 

because they simply prefer to go to the VA. Even with the ‘‘choice’’ card, some veterans with non-urgent medical needs may prefer the VA physician, treatment team, 

or facility they know, rather than look for a new, unknown provider in the private 

sector. The bottom line is that we simply do not have sufficient data to determine 

exactly which factors are behind the low utilization rates at this point. Therefore, 

it is absolutely essential to take steps now so that we have sufficient data and analysis before it is the appropriate time to consider permanent changes to the VA 

health care system. 

LEARNING FROM THE CHOICE PROGRAM

The ‘‘choice’’ program is an unprecedented experiment, launched during a crisis 

in order to address a short-term emergency need. Therefore, it is incumbent upon 

us to ensure that the proper measurements and metrics are in place in order to 

evaluate the success of the program and learn the appropriate lessons. Unfortunately, a number of important questions and metrics at present are not being 

studied. 

The ‘‘choice’’ program was principally intended to address the unacceptable waiting times facing veterans to receive care within the VA by allowing them to choose 

private care providers. As such, it is imperative that VA measure the time that veterans wait for appointments, including follow-up appointments, when authorized to 

go outside the VA. It is also necessary to understand what the waiting times, or 

access standards, are for the private sector, both in general and in detail. After all, 

the waiting time for a routine dermatology appointment should not be the same as 

that for a serious cardiac condition. 

One of the key questions, and one of the primary contributing factors to the waiting list scandals, was unrealistic access standards in place at VA, which were subsequently repealed. It is important for VA to develop new and realistic standards, regardless of the future structure of non-VA care, not only for waiting times, but also 

for travel distances. As we and others have pointed out in prior hearings, the distance that is reasonable to expect a younger veteran in relatively good health to 

travel may be significantly different from what a 90-year old World War II veteran 

with serious physical disabilities would be required to travel. Furthermore, these 

standards must be clinically based to ensure the best health outcomes, not randomly 

set for financial or political reasons. 

Mr. Chairman, given the importance of determining appropriate access standards, 

we would recommend that Congress authorize a comprehensive and independent 

study be performed to review the access standards used in the private sector, and 

to make recommendations for such standards for the VA health care system. 

In order to properly evaluate the ‘‘choice’’ program, VA must also collect, study 

and analyze data on patient satisfaction and health outcomes for those who use private providers through the ‘‘choice’’ program. VA needs to establish baseline data 

from which it can compare satisfaction for those who use ‘‘choice,’’ those who use 

other non-VA care programs, and those who use VA care. Measuring health outcomes may prove more challenging, given that it takes many years before true outcomes are known; however, since this is the ultimate measure of success, VA must 

begin to explore appropriate research, analysis and metrics that could be implemented now in order to help with such analysis in the future. 

Another key area that must be evaluated is the coordination of care for veterans 

who go outside the VA, both through the ‘‘choice’’ program and other non-VA care 

75 

authorities. Over the next couple of years, veterans may find themselves receiving 

care inside VA as well as outside, and VA must be able to determine how well that 

care is coordinated through the various programs. It is imperative that VA carefully 

monitor how and what kind of medical information is transmitted back and forth 

between VA and non-VA providers. 

THE CONGRESSIONALLY-MANDATED ‘‘COMMISSION ON CARE’’ 

In addition to the temporary three-year ‘‘choice’’ program and the investment of 

new resources in the VA health care system, the VACAA also requires the creation 

of a ‘‘Commission on Care’’ to study and make recommendations for long-term improvements to best deliver timely and high quality health care to veterans over the 

next two decades. Specifically, the law requires that members of this Commission 

be appointed not later than one year after the date of enactment of Public Law 113– 

146, which would be no later than August 7, 2015. The President, Majority and Minority Leaders of the Senate, Speaker and Minority Leader of the House, will each 

appoint three members of the Commission, with the President designating the 

Chairman. 

Under the law, once a majority of appointments is made, the Commission must 

hold its first meeting within 15 days, and then it is provided only 90 days to produce 

an interim report with both findings and recommendations for legislative or administrative actions, and then only 90 additional days to submit a final report. 

Mr. Chairman, last month, DAV, PVA, VFW, The American Legion, IAVA and a 

number of other VSOs wrote to Senate and House leaders to call for extending the 

mandate of this Commission to allow at least 12 months before the interim report 

is due, and at least six additional months before the final report is presented to 

Congress. In our jointly signed letter, we argued that, ‘‘* * * 90 days does not provide nearly sufficient time for a newly constituted Commission of 15 individuals— 

each with their own unique background, experience and understanding of the current VA health care system—to comprehensively examine all of the issues involved, 

to conduct and review sufficient research and analysis, and to discuss, debate and 

reach agreement on specific findings and recommendations that could change how 

health care will be delivered to millions of veterans over the next twenty years.’’ 

In addition, we called on Congress to refrain from taking any, ‘‘* * * permanent, 

systemic changes * * * until after the Commission has had sufficient opportunity 

to consider how best to deliver health care to veterans for the next two decades, submitted its recommendations, and then allowed sufficient opportunity for other stakeholders and Congress to engage in a debate worthy of the men and women who 

served.’’ 

By gathering essential data and performing crucial research over the next year 

or so, the Commission, Congress and other stakeholders would be able to work together to ensure that veterans receive the health care they have earned. However, 

it is also important that before we engage in a debate about how to structure both 

VA and non-VA care programs, we gain a consensus about the proper role and responsibility of the VA. 

THE PRINCIPLE MISSION OF VA HEALTH CARE

One hundred and fifty years ago, only a month before the Civil War ended, President Abraham Lincoln stood on the East Front of the U.S. Capitol to make his Second Inaugural Address, in which he made a solemn promise on behalf of the Nation 

‘‘* * * to care for him who shall have borne the battle, for his widow, and his 

orphan * * *’’ Those words which are engraved on the entrance of the Department’s building here in Washington, DC, were spoken just one day after Lincoln 

signed legislation to create the very first Federal facility devoted exclusively to the 

care of war veterans, which ultimately evolved into today’s VA health care system. 

Since that date, leaders of Congress and Presidents of all parties have been united 

in their bipartisan support of a robust Federal health system to care for veterans. 

But after a very difficult year filled with a waiting list scandal and a health care 

access crisis—which resulted in the resignation of a sitting VA Secretary—there is 

now discussion about how and whether to keep that promise to the men and women 

who served. While we certainly agree that change and reform are needed at the VA, 

we have a sacred obligation to ensure that America never abandons Lincoln’s promise. 

While the VA health care system has long been the embodiment of our national 

promise, some are now proposing to make it just another ‘‘choice’’ among all health 

care providers, while others are calling for VA to be downsized or eliminated altogether. For millions of veterans wounded, injured or made ill from their service, 

their only ‘‘choice’’ for receiving the specialized care they need is a robust VA. 

76 

Although the VA today provides comprehensive medical care to more than 6.5 million veterans each year, the VA system’s primary mission is to meet the unique, specialized health care needs of service-connected disabled veterans. To accomplish this 

mission, VA health care is integrated with a clinical research program and academic 

affiliation with well over 100 of the world’s most prominent schools of health professions to ensure veterans have access to the most advanced treatments in the world. 

Furthermore, in order to achieve the best health outcomes, it is necessary to treat 

the whole veteran, and that is exactly what the VA is organized to do. VA provides 

comprehensive, holistic and preventative care that results in demonstrably improved 

quality, higher patient satisfaction and better health outcomes for the veterans it 

serves. For those veterans who rely on VA for care, those who have suffered amputations, paralysis, burns and other injuries and illnesses, we believe they deserve 

the ‘‘choice’’ to receive all or most of their care from the VA. 

If the VA health care system ends up being downsized as a result of allowing all 

veterans to leave VA through expanded ‘‘choice’’ programs, and certainly if VA is 

eliminated outright, some or all of the 3.8 million service-connected disabled veterans who rely on VA for their health care today would no longer have a ‘‘choice.’’ 

Instead, they would end up with fractured care, receiving care through a combination of VA and non-VA providers. 

And if VA care was no longer an option for seriously disabled veterans, would the 

private health care system be able to provide timely access to the specialized care 

they require? While the private sector also treats many of the same conditions that 

VA specializes in—including amputations, paralysis, severe burns, blindness, Traumatic Brain Injury (TBI) and even Post Traumatic Stress Disorder (PTSD)—there 

is simply no comparison with the frequency, severity and comorbidities routinely 

seen by VA physicians. Even if all 3.8 million disabled veterans were dispersed into 

private care, they would still make up just 1.5% of the adult patient population. 

Does anyone truly believe that a market-based civilian health system would provide 

the focus and resources necessary to advance the level of care for this small minority in the way that a dedicated, Federal VA system would? 

SETTING A NEW FRAMEWORK FOR REFORMING VA HEALTH CARE

While it is far too soon to settle on how to reform the VA health care system and 

integrate non-VA care, we must begin to establish at least a road map to guide us. 

We propose a new framework to meet the needs of the next generation of America’s 

veterans based on rebuilding, restructuring, realigning and reforming the VA health 

care system. 

First, we must rebuild and sustain VA’s capacity to provide timely, high quality 

care. That must begin with a long-term strategy to recruit, hire and maintain sufficient clinical staff at all VA facilities. In addition, VA must gain the commitment 

and funding to implement a long-term strategy to repair, maintain and expand as 

necessary, usable treatment space to maximize access points where veterans receive 

their care. VA must buildupon its temporary access initiatives implemented last 

year by permanently extending hours of operations around the country at CBOCs 

and other VA treatment facilities to increase access for veterans outside traditional 

working hours. To provide the highest quality care, we must strengthen VA’s clinical research programs to prepare for veterans’ future health care needs. In addition, we must sustain VA’s academic affiliations to support the teaching and research programs and to help support future staffing recruitment efforts. 

Second, VA must restructure its non-VA care program into a single integrated extended care network. This will require that VA first complete the research and analysis related to the ‘‘choice’’ program discussed above, and allow the Commission on 

Care to complete its work. Then based on research and data, VA must develop an 

integrated VA Extended Care Network which incorporates the best features of feebasis, contract care, ARCH, PC3, ‘‘choice,’’ and other purchased care programs. Congress must provide a single, separate and guaranteed funding mechanism for this 

VA Extended Care program. To make this program effective, VA must complete the 

research discussed above related to private sector access standards in order to establish new clinically-based access policy that is informed, objective and based on 

rigorously established objective evidence. In addition, VA must develop an appropriate and effective decision mechanism that ensures that veterans are able to access VA’s Extended Care Network whenever necessary. In addition, there must be 

a new, transparent, and dedicated review and appeal process capable of making 

rapid decisions to ensure veterans have timely access based on their medical needs. 

Third, we must realign and expand VA health care services to meet the diverse 

needs of future generations of veterans, beginning with VA expanding urgent care 

clinics with extended operating hours. These services would be delivered by dediVerDate Mar 15 2010 18:29 Jun 30, 2016 Jkt 000000 PO 00000 Frm 00080 Fmt 6633 Sfmt 6621 Z:\ACTIVE\051215.TXT PAULIN
77 

cated doctors and nurses in existing VA facilities, or smaller urgent care clinics strategically located in new locations around the country, such as in shopping malls. 

The VA, like any large health care system should provide walk-in capability for urgent care needs of eligible veterans. In addition, VA must extend access to care further through enhanced web-based and tele-medicine options to reach even the most 

remote and rural veterans. And with veteran demographics continuing to change, 

VA must eliminate barriers and expand services to ensure that women veterans 

have equal access to high quality, gender-specific, holistic, preventative health care. 

VA must also rebalance its long-term supports and services to provide greater access 

to home- and community-based services to meet current and future needs, including 

expanding support for caregivers of veterans from all generations. 

Fourth, VA must reform its management of the health care system by increasing 

efficiency, transparency and accountability in order to become a veteran-centric organization. VA can begin by developing a new patient-driven scheduling system, including web and app-based programs that allow veterans to self-schedule health 

care appointments. To support responsible organizational behavior, VA should redesign its Performance and Accountability Report (PAR) to establish new metrics that 

are focused on veteran-centric outcomes with clear transparency and accountability 

mechanisms. VA’s budgeting process would benefit by implementing a more transparent and accountable system known as PPBE, which stands for planning, programming, budgeting and execution. This approach is already working for the 

Departments of Defense and Homeland Security, and there is legislation pending to 

bring the same to VA. Finally, VA must hold all of its employees—from the Secretary to receptionists—to the highest standards, while always balancing the need 

to make the VA an employer of choice among Federal agencies and the private 

sector. 

Mr. Chairman, the framework outlined here certainly is not intended to be a final 

or detailed plan for reforming VA, nor could it be at this point with so much unknown, but it offers a new pathway that could lead toward a future that would truly 

fulfill Lincoln’s promise. DAV is convinced that the VA health care system has been, 

can be and must be the centerpiece of how our Nation delivers health care to America’s wounded, injured and ill veterans. 

While the VA faces serious challenges, the answer is not to abandon it, or to destroy it. Instead, we must honor the service and sacrifices of our Nation’s heroes 

by creating a modern, high-quality, accessible and accountable VA health care system. Anything less breaks Lincoln’s promise, ignores our sacred national obligation, 

and leaves our veterans to fend for themselves in a private sector health system ill 

prepared to care for them. 

That concludes my testimony and I would be pleased to address questions from 

you or other Members of the Committee. 

Chairman ISAKSON. Thank you very much. 

Mr. Rausch? 

STATEMENT OF BILL RAUSCH, POLITICAL DIRECTOR, IRAQ 

AND AFGHANISTAN VETERANS OF AMERICA 

Mr. RAUSCH. Chairman Isakson, Ranking Member Blumenthal, 

on behalf of Iraq and Afghanistan Veterans of America and our 

nearly 400,000 members and supporters, thank you for the opportunity to share our views with you at today’s hearing. 

As you know, IAVA was one of the leading veterans organizations involved in the early negotiations on the Veterans Access to 

Choice and Accountability Act as it was being drafted and the 

breadth of its final language was being debated. It is a highly complex law that the Department is working hard to effectively implement in order to ensure veterans are not left waiting for unacceptable lengths of time to receive health care services. 

My remarks will focus on the experiences of utilizing the VA 

Choice Program IAVA members have recently reported to us by 

way of survey research. Additionally, I will provide recommendations Congress and the Secretary must consider in order to get this 

program operating at the height of its potential. These recVerDate Mar 15 2010 18:29 Jun 30, 2016 Jkt 000000 PO 00000 Frm 00081 Fmt 6633 Sfmt 6601 Z:\ACTIVE\051215.TXT PAULIN
78 

ommendations include: legislative clarification of the eligibility criteria for accessing the Choice Program, strengthening training 

guidelines for VA schedulers charged to explain the eligibility criteria to veterans, and continued active engagement with veterans 

organizations to more broadly identify a comprehensive strategy 

and plan for delivering non-VA care in the community moving 

forward. 

In examining the current criteria for determining which veterans 

are eligible to use the Choice Program—those who must wait 

longer than 30 days for an appointment and those who live more 

than 40 miles from a VA medical facility—more statutory clarity is 

required. 

Veterans are all too frequently reporting they are unsure if they 

are eligible for Choice, and VA in some cases has been inconsistent 

in communicating whether or not a veteran can access it in individual cases. 

Based on our most recent survey data, over one-third of our 

members have reported they do not know how to access the Choice 

Program. This is compounded by reports that in some cases VA 

schedulers are not explaining eligibility for Choice while offering 

appointments outside the 30-day window. The Secretary and VA 

senior leadership must continue to engage VA front-facing scheduling personnel with ongoing and evolving training standards, so 

when veterans call the VA they receive consistent and clear understanding of their eligibility for the choice program. The VA has improved in this area, but with so many veterans still confused about 

eligibility, training criteria must be strengthened and maintained. 

Congress should aid in the Department’s implementation efforts 

by clarifying in law that the 40-mile criteria must relate specifically to the VA facility in which the needed medical care will be 

provided. This frustrating example that continues to surface is one 

of a veteran that requires specialized care in a VA facility outside 

the 40 miles, but through strict interpretation of the current 

VACAA law is ineligible because a local CBOC or other facility may 

be geographically near the veteran’s address, notwithstanding that 

facility cannot provide the required care. 

One of our members illustrated this recently by stating, ‘‘Because 

there is a CBOC in my area, I was denied. The clinic does not provide any service or treatment I need for my primary service-connected disability. The nearest medical center in my network is 153 

miles away.’’ 

Congress must provide needed clarity and work with VA—and it 

sounds like you are—to eliminate cases like those just described. 

There have been encouraging developments related to the implementation of the Choice Program, specifically VA’s action to step 

up and fix the initial ineffectiveness of the 40-mile rule calculations, as it related to the geodesic distance versus driving distance. 

That regulatory correction was much needed, and as a result there 

are hundreds of thousands of new veterans who are now eligible for 

the Choice Program. On behalf of our members, we applaud Secretary Bob McDonald and Deputy Secretary Sloan Gibson for their 

leadership in listening to their customers, our veterans, to make 

that change happen. 

79 

VHA’s statistics on Choice utilization among the veteran population as of this month state there have been nearly 59,000 authorizations for care and nearly 47,000 appointments. This data verifies 

that veterans out there are using the program, and the VA has 

been making progress to implement what is clearly a complex yet 

important program. 

IAVA is committed to remaining actively engaged with the veterans making use of the Choice Program so we can keep current 

on the veteran experience. We are mindful that with thousands of 

appointments being concluded, there will inevitably be thousands 

of unique experiences, and we want to gauge those levels of satisfaction with our members for this program. The satisfaction of veterans utilizing Choice, the cost of the care purchased outside of VA 

facilities, and understanding issues that come up along the way 

will allow us to better realize a veteran-focused strategy and plan 

for non-VA care in the community moving forward. 

We appreciate the hard work of this Congress, the VA, and the 

veteran community and recognize we have to stay focused on improving veteran health care delivery in the short and long term. 

Robust discussion on the scope and cost of maintaining health care 

networks is complicated and multilayered, which is why our last 

recommendation is simple and something we have touched on before: We must continue to work together and keep communication 

active between all relevant stakeholders. 

Mr. Chairman, we sincerely appreciate your Committee’s hard 

work in this area, your invitation to allow me to testify again, and 

we want you to know we stand ready to assist this Congress and 

our Secretary to achieve the best results for the Choice Program 

now and in the future. We look forward to taking your questions. 

Thank you. 

[The prepared statement of Mr. Rausch follows:] 

PREPARED STATEMENT OF BILL RAUSCH, POLITICAL DIRECTOR, IRAQ AND

AFGHANISTAN VETERANS OF AMERICA

Chairman Isakson, Ranking Member Blumenthal, and Distinguished Members of 

the Committee: On behalf of Iraq and Afghanistan Veterans of America (IAVA) and 

our nearly 400,000 members and supporters, thank you for the opportunity to share 

our views with you at today’s hearing Assessing the Promise and Progress of the 

Choice Program. 

IAVA was one of the leading veterans organizations involved in the early negotiations on the Veterans Access to Choice and Accountability Act (VACAA), as it was 

being drafted and the breadth of its final language was debated. This is a highly 

complex law that the Department is working hard to effectively implement in order 

to ensure veterans are not left waiting for unacceptable lengths of time to receive 

health care services. 

My remarks will focus on the experiences of utilizing the VA Choice Program 

IAVA members have recently reported by way of survey research. Additionally, I 

will provide recommendations Congress and the Secretary must consider in order 

to get this program operating at the height of its potential. These recommendations 

include: legislative clarification of the eligibility criteria for accessing the Choice program, strengthening training guidelines for VA schedulers charged to explain the 

eligibility criteria to veterans, and continued active engagement with veteran organizations to more broadly identify a comprehensive strategy and plan for delivering 

Non-VA care in the community moving forward into the future. 

In examining the current criteria for determining which veterans are eligible to 

use the Choice Program, those who must wait longer than 30 days for an appointment and those who live more than 40 miles from a VA medical facility, more statutory clarity is required. Veterans are all too frequently reporting they are unsure 

80 

if they are eligible for choice and VA has, in some cases, been inconsistent in communicating whether or not a veteran can access it in individual cases. 

Based on our most recent survey, over 1/3rd of IAVA members have reported they 

do not know how to access the Choice program. This is compounded by reports that 

in some cases VA scheduling personnel are not explaining eligibility for choice to 

veterans and are then offering appointments ‘‘off the grid’’ of the 30 day standard— 

sometimes much later. 

The Secretary and VA Senior Leadership must continue to engage VA front-facing 

scheduling personnel with ongoing and evolving training standards, so when veterans call the VA, they receive consistent and clear understanding of their eligibility 

for the Choice program. The VA has improved in this area but with so many veterans still confused about choice eligibility—nearly 7 months after the program’s 

birth—training criteria must be strengthened and maintained. 

Congress should aid in the Department’s implementation efforts by clarifying in 

law that the 40-mile criteria must relate specifically to the VA facility in which the 

needed medical care will be provided. The frustrating example that continues to surface is one of a veteran that requires specialized care in a VA facility outside of 40 

miles, but through strict interpretation of the current VACAA law, is ineligible for 

participation because a local CBOC or other facility may be geographically near the 

veteran’s address, notwithstanding that facility cannot provide the required care. 

One of our members illustrated one of these cases with the following statement: ‘‘Because there is a CBOC in my area I was denied. The clinic doesn’t provide any service or treatment I need for my primary service-connected disability. [The] nearest 

medical center in my network is 153 miles away.’’ Congress must provide muchneeded clarity and work with VA to eliminate cases like those just described. 

There have been encouraging developments related to the implementation of the 

Choice Program, specifically, the VA’s action to step up and fix the initial ineffectiveness of the 40mile rule calculations under regulation, as it related to geodesic 

distance vs. driving distance. That regulatory correction was much needed and as 

a result there are hundreds of thousands of new veterans eligible for the Choice program. On behalf of our members we applaud Secretary Bob McDonald’s leadership 

for listening to his customers, our veterans, to make that change happen. 

VHA’s statistics on choice utilization among the veteran population as of this 

month state there have been nearly 58,863 authorizations for care and nearly 

47,000 appointments. This data verifies that veterans out there are using the program and the VA has been making progress to implement what is clearly a complex 

and historic mandate relating to the furnishment of veteran health care now and 

in years to come. 

IAVA is committed to remaining actively engaged with the veterans making use 

of Choice care so we can keep current on the veteran experience. We are mindful 

that with thousands of appointments for care being concluded, there will inevitably 

be thousands of unique experiences we want to know about to gauge the satisfaction 

with this program. The satisfaction of the veteran utilizing Choice, the cost of the 

care purchased outside of VA facilities and understanding issues that come up along 

the way, will allow us to better identify the scope and role the concept of choice 

plays in the future. 

We appreciate the hard work of Congress, the VA, and the veteran community 

and recognize we have to stay focused on improving veteran healthcare delivery in 

the short and long-term. Robust discussion on the scope and cost of maintaining 

healthcare networks is complicated and multi-layered, which is why our last recommendation is simple: we must continue to work together and keep communication 

active between all relevant stakeholders. 

Mr. Chairman, we sincerely appreciate your Committee’s hard work in this area, 

your invitation to allow me to testify before you again, and we want you to know 

we stand ready to assist Congress and Secretary Bob McDonald to achieve the best 

results for the Choice program now and in the future. 

I am happy to answer any questions you may have. 

Chairman ISAKSON. Thank you very much. 

Mr. Fuentes? 

STATEMENT OF CARLOS FUENTES, SENIOR LEGISLATIVE ASSOCIATE, NATIONAL LEGISLATIVE SERVICE, VETERANS OF 

FOREIGN WARS OF THE UNITED STATES 

Mr. FUENTES. Chairman Isakson, Ranking Member Blumenthal, 

on behalf of the men and women of the VFW and our Auxiliaries, 

81 

I would like to thank you for the opportunity to present our views 

on the Veterans Choice Program. 

Before I begin, I just want to say that VFW opposes VA’s change 

to the way veterans choose to use the Veterans Choice Program. 

Veterans must have the opportunity to explore their private sector 

options before rejecting their VA appointments. This change is a 

bureaucratic convenience that will negatively affect veterans’ 

experiences. 

The VFW continues to play an integral part in identifying new 

issues the Veterans Choice Program faces and recommending reasonable solutions. Yesterday, we published our second report evaluating this important program, which made 13 recommendations on 

how to ensure it accomplished its intended goal of expanding access 

to health care for America’s veterans. Our initial report identified 

a gap between the number of veterans who were eligible for the 

program and those who were given the opportunity to participate. 

Our second report has found that VA has made progress in addressing this gap. Thirty-five percent of second survey participants 

who believed they were eligible were given the opportunity to participate. That is a 60-percent increase from our initial survey. 

For 30-dayers, participation hinges on VA schedulers informing 

them of their eligibility. The lack of systemwide training for frontline staff has resulted in veterans receiving dated or misleading information. VA must continue to improve its processes and training 

to ensure that all veterans who are eligible for the program are 

given the opportunity to participate. 

Our second report also found a decrease in patient satisfaction 

among veterans who received non-VA care. This has been a direct 

result of veterans not being able to find viable options in the private sector. 

The 40-mile standard used to establish geographic-based eligibility for the Veterans Choice Program was based on eligibility for 

TRICARE Prime. However, there is a distinct difference between 

the veterans population and the military population. Thirty-six percent of veterans enrolled in VA health care live in rural areas. 

Thus, measuring the distance servicemembers travel to military 

treatment facilities and using that same standard to measure distance traveled by veterans to VA medical facilities does not appropriately account for the diversity of the veterans population. 

Our second report found that a commute-time standard based on 

population densities would more appropriately reflect the travel 

burden veterans face when accessing VA health care. Regardless, 

Congress and VA must commission a study to determine the most 

appropriate geographic-based standard for health care furnished by 

VA. 

As the future of the VA health care system and its purchased 

care model are evaluated, it is important to recognize that the 

quality of care veterans receive from VA is significantly better than 

what is available in the private sector. 

Moreover, many of VA’s capabilities cannot be duplicated or 

properly supplemented by private sector health care—especially for 

combat-related mental health, blast injuries, or service-related 

toxic exposures, just to name a few. With this in mind, VA must 

continue to serve as the initial touch point and guarantor of care 

82 

for all enrolled veterans. Although enrollment in the VA health 

care system is not mandatory, and despite more than 75 percent 

of veterans having other forms of health care coverage, more than 

6.5 million of them choose to rely on their earned VA health care 

benefits and are by and large satisfied with the care they receive. 

Moving forward, the lessons learned from the Veterans Choice 

Program should be incorporated into a single systemwide non-VA 

care program with veteran-centric and clinically driven access 

standards, which afford veterans the opportunity to receive private 

sector health care if VA is unable to meet those standards. More 

importantly, non-VA care must supplement the care that veterans 

receive from VA medical facilities, not replace it. 

Ideally, VA would have the capacity to provide timely access to 

direct care for all the veterans it serves. We know, however, that 

VA medical facilities continue to operate at 115 percent capacity 

and may never be able to build enough capacity to provide direct 

care to all the veterans that they serve. 

VA must continue to expand capacity based on staffing models 

for each health care specialty and patient density thresholds. However, VA cannot rely on building new facilities alone. When thresholds are exceeded, VA must use leasing and sharing agreements 

with other health care systems and affiliated hospitals when possible and purchase care when it must. 

Mr. Chairman, this concludes my testimony. I am prepared to 

answer any questions you may have. 

[The prepared statement of Mr. Fuentes follows:] 

PREPARED STATEMENT OF CARLOS FUENTES, SENIOR LEGISLATIVE ASSOCIATE, NATIONAL LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED

STATES

Chairman Isakson, Ranking Member Blumenthal and Members of the Committee, 

on behalf of the men and women of the Veterans of Foreign Wars of the United 

States (VFW) and our Auxiliaries, I thank you for the opportunity to present the 

VFW’s thoughts on the current state of the Veterans Choice Program. 

More than a year ago, whistleblowers in Phoenix, Arizona, exposed rampant 

wrong-doing at their local Department of Veterans Affairs (VA) hospital through 

which veterans were alleged to have died waiting for care, while VA employees manipulated waiting lists and hid the truth. In the months that followed, similar problems were exposed across the country, and the ensuing crisis forced the Secretary 

of Veterans Affairs and many top Veterans Health Administration (VHA) deputies 

to resign. 

As the crisis unfolded, the VFW intervened by offering direct assistance to veterans receiving VA health care; publishing a detailed report, ‘‘Hurry up and Wait,’’ 

which made 11 recommendations on ways to improve VA’s health care system; 

working with Congress to pass significant reforms; and working directly with VA 

to implement reforms. 

In August 2014, Congress passed and the President signed into law the Veterans 

Access, Choice, and Accountability Act of 2014 (VACAA) with the support and insight of the VFW. This critical law commissioned the Veterans Choice Program, 

which now offers critical non-VA health care options to veterans who are unable to 

receive VA health care appointments in a timely manner (30-dayers) or who live 

more than 40 miles from the nearest VA medical facility (40-milers). 

In an effort to gauge veterans’ experiences and evaluate how the program was 

performing, the VFW commissioned a series of surveys and compiled an initial report on how the program performed during the first three months of its implementation. The VFW’s initial report included six specific recommendations regarding participation, wait time standard, geographic eligibility, and non-VA care issues that 

needed to be addressed. Fortunately, the Veterans Choice Program has been a top 

priority for VA and Congress. As a result, several issues that accompanied the rollout have been resolved. 

83 

The VFW continues to play an integral part in identifying new issues the Veterans Choice Program faces and recommending reasonable solutions to such issues. 

Yesterday, we published the second report on the implementation of the Veterans 

Choice Program. All our reports can be found on our VA Health Care Watch 

Website, www.vfw.org/VAWatch. Our second Veterans Choice Program report found 

that the implementation of the program has improved. However, more works remains. The second report includes 12 recommendations regarding several issues 

that must be addressed to ensure the program accomplishes its intended goal of improving access to high quality health care for America’s veterans. 

PARTICIPATION GAP

The VFW’s initial report identified a gap between the number of veterans who 

were eligible for the Veterans Choice Program and those afforded the opportunity 

to receive non-VA care. Our report found that VA has made progress in addressing 

this gap. However VA must continue to improve its processes and training to ensure 

all veterans who are eligible for the Veterans Choice Program are given the opportunity to receive timely access to health care in their communities. 

Thirty-eight percent of second survey participants who believed they were eligible 

for the program were offered the opportunity to receive non-VA care. This is a 12 

percent increase from our initial survey. Yet, the VFW continues to hear from veterans who report that the schedulers they speak to are unaware of the program or 

are unsure how it works. 

For 30-dayers, participation continues to hinge on VA schedulers informing veterans that they are eligible for the program. The lack of system wide training for 

schedulers and frontline staff has led to a reliance on local facility driven training, 

which VA admits has resulted in inconsistent training. To mitigate this issue, VA 

has developed system wide training for all VHA staff, which it intends to implement 

later this month. VA will also conduct specialized training for scheduling staff to 

ensure they are familiar with the Veterans Choice Program’s business processes and 

know how to properly serve eligible veterans. 

The VFW applauds such efforts, but we are concerned that training will not have 

the desired outcome if VA fails to implement proper quality assurance processes. 

For example, the program’s contractors, Health Net and TriWest, monitor their call 

center representatives to ensure they provide accurate information about the program. Doing so allows them to identify call center representatives who need remedial training. They also utilize quality assurance mechanisms to improve training 

to ensure veterans receive high quality customer service. VA can benefit from adopting similar processes to ensure VA staff provide high quality customer service and 

adhere to training objectives. 

The VFW acknowledges that the participation gap will not be eliminated with 

training alone. Regardless of how well VA trains its staff, human error will lead to 

veterans not being properly informed of their opportunity to receive health care in 

their communities. To address this issue, VA implemented the Veterans Choice Program Outreach Campaign to contact more than 100,000 veterans who were initially 

eligible for the Veterans Choice Program as 30-dayers. The program concluded in 

February and resulted in VA staff transferring approximately 30 percent of the veterans it contacted to the Veterans Choice Program call centers. VA would benefit 

from implementing an automated letter or robocall system that would continue the 

work of the Veterans Choice Program Outreach Campaign. 

The VFW’s second Veterans Choice Program report also found a decrease in patient satisfaction among veterans who received non-VA care through the Veterans 

Choice Program. Feedback from veterans shows that the primary reason for the decline in satisfaction has been a direct result of their inability to find viable private 

sector health care options. Many veterans have reported that they chose to keep 

their VA appointments because they were unable to find private sector providers 

closer than their VA medical facilities, or their appointments at VA were earlier 

than what they were able to obtain in the private sector. 

Health Net and TriWest have candidly acknowledged that scheduling veterans 

within 30 days is unattainable in certain instances. The reasons differ case by case, 

but are generally associated with a lack of availability in the private sector or a 

delay in receiving the VA medical documentation needed to schedule an appointment. For example, TriWest reports that in many communities wait times for a new 

dermatology patient are often 60 or even 90 days out. This indicates that health 

care in the private sector is not widely available for all specialties, especially when 

veterans seek veteran-specific care that does not exist in the private sector, such 

as spinal cord injury and disorder care, polytrauma treatment and services, and specialized mental health care. For example, a veteran from Elko, Nevada, who is eligiVerDate Mar 15 2010 18:29 Jun 30, 2016 Jkt 000000 PO 00000 Frm 00087 Fmt 6633 Sfmt 6621 Z:\ACTIVE\051215.TXT PAULIN
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ble for the Veterans Choice Program as a 40-miler told us she wanted to explore 

mental health care options in her community, but was unable to find a mental 

health care provider able to treat veterans, so she decided it was best to continue 

receiving telemental health care from VA. 

The VFW is concerned that local facilities may also contribute to the delay or inability to schedule non-VA care appointments through the Veterans Choice Program. Our report found that some local VA medical facilities were slow to provide 

the medical documentation needed to schedule appointments through the program. 

We also found that some VA medical facilities were slow to process requests for follow-up treatment through the program. For example, a veteran in Fredericksburg, 

Virginia, was authorized to receive back surgery through the program, but his appointment was delayed because the Richmond VA Medical Center had not sent the 

medical documentation his private sector doctor needed to schedule his surgery. 

After receiving surgery, the veteran was prescribed postoperative physical therapy. 

Unfortunately, he was unable to schedule his physical therapy appointments until 

the Richmond VA Medical Center approved the treatment. It took nearly a month 

for his non-VA physical therapy to be approved. 

Furthermore, the VFW is concerned with the lack of private sector providers opting to participate in the program. Due to reimbursement rates and requirements to 

return medical documentation, some private sector providers have been reluctant to 

participate in the Veterans Choice Program network when they have a preexisting 

agreement with a VA medical facility. Such agreements often allow for higher reimbursement rates or do not require the non-VA provider to return medical documentation. The VFW is concerned that the reliance on local agreements has limited 

Health Net’s and TriWest’s ability to build capacity by expanding their Choice networks. VA must issues clear directives on how to properly utilize purchase care programs and authorities to ensure local medical facilities do not prevent the Veterans 

Choice Program’s contractors from expanding their networks to better serve 

veterans. 

WAIT TIME STANDARD

The VFW’s initial report highlighted several flaws in the way VA calculates wait 

times. Unfortunately, our second report found that this flawed metric is still being 

used. VA’s wait time standard still requires veterans to wait unreasonably long and 

remains susceptible to data manipulation. 

VA’s current wait time standard requires a veteran to wait at least 30 days beyond the date a veteran’s provider deems clinically necessary, or clinically indicated 

date, before being considered eligible for the Veterans Choice Program. This means 

that a veteran who is told by his or her VA doctor that he or she needs to be seen 

within 60 days is only eligible for the Veterans Choice Program if he or she is scheduled for an appointment that is more than 90 days out, or more than 30 days after 

the doctor’s recommendation. The VFW remains concerned that veterans’ health 

may be at risk if they are not offered the ability to receive care within the timeframe their VA providers deem necessary, regardless of whether the care is received 

through a VA medical facility or the Veterans Choice Program. 

Furthermore, VA’s wait time standard is not aligned with the realities of waiting 

for a VA health care appointment. Forty-five percent of the 1,464 survey respondents who have scheduled an appointment since November 5, 2014 reported waiting 

more than 30 days for their appointment. Yet, VA data on more than 70.8 million 

pending appointments between November 1, 2014 and April 15, 2015 shows that 

fewer than seven percent of such appointments were scheduled beyond 30 days of 

a veteran’s preferred date. 

VA’s preferred date metric is a figure determined subjectively by VA schedulers 

when veterans call to make an appointment. The VFW has long disputed the validity of this figure, which we outlined in detail in our initial report. Our second Veterans Choice Program report found that veterans who perceive they wait longer 

than 30 days for care, regardless of how long VA says they wait, are more likely 

to be dissatisfied than veterans who perceive that VA has offered them care in a 

timely manner. Patient satisfaction is fundamental to the delivery of health care. 

Ultimately, satisfaction is based on how long veterans perceive they wait, not how 

VA estimates wait times. VA must take veterans’ perceptions into account when establishing standards to measure how long veterans wait for their care. 

The VFW and our Independent Budget (IB) partners have continued to call for 

VA to develop reasonable wait time standards based on acuity of care and specialty. 

Arbitrary system-wide deadlines do not fully account for the difference between the 

types and acuity of care veterans receive from VA. Waiting too long for health care 

can be the difference between life and death for veterans with urgent medical condiVerDate Mar 15 2010 18:29 Jun 30, 2016 Jkt 000000 PO 00000 Frm 00088 Fmt 6633 Sfmt 6621 Z:\ACTIVE\051215.TXT PAULIN
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tions. For example, a veteran with severe Post Traumatic Stress Disorder should 

not be required to wait 30 days for treatment. 

As part of the 12 independent assessments being conducted by the MITRE Corporation, et al., which were mandated by section 201 of VACAA, the Institute of 

Medicine (IOM) is currently evaluating if VA’s wait time standard is an appropriate 

system wide access standard. The VFW will monitor IOM’s work to ensure its recommendations serve the best interest of veterans. 

GEOGRAPHIC ELIGIBILITY

On March 24, 2015, VA announced the most significant change that has occurred 

since the Veterans Choice Program was created. VA listened to the concerns of 

countless veterans and changed the way it calculated distance for the Veterans 

Choice Program from straight-line distance to driving distance. The change went 

into effect on April 24, 2015 and gave nearly 300,000 additional veterans the opportunity to choose whether to receive their health care through private sector providers or travel to a VA medical facility. The VFW applauds VA for taking the initiative and fixing an issue that confused veterans and caused frustration. 

However, this change did not address another significant flaw in eligibility for the 

Veterans Choice Program. The VFW continues to hear from veterans who report 

that their local Community-Based Outpatient Clinics are unable to provide them the 

care they need, so VA requires them to travel long distances to a VA medical center. 

In order to properly account for the travel burden veterans face when accessing VA 

health care, geographic eligibility for the Veterans Choice Program should be based 

on the calculated distance to facilities that provide the care they need, not facilities 

that are unable to serve them. 

The 40 mile standard was based on eligibility for TRICARE Prime. However, 

there is a distinct difference between the military population and the veteran population. According to VA’s Office of Rural Health, youths from sparsely populated 

areas are more likely to join the military than those from urban areas. During their 

service, they are likely to live near military installations, which often have military 

treatment facilities. However, when they leave military service, 36 percent of veterans who enroll in the VA health care system return to rural areas. Although VA 

has made an attempt to expand capacity to deliver care where veterans live, it has 

not been able to, nor should it in some instances, expand its facilities to cover all 

veterans. Thus, using the same standard to measure distance that servicemembers 

and their families travel to military treatment facilities to measure distance traveled by veterans to VA medical facilities, does not properly account for the diversity 

of the veteran population. 

Feedback we have received from veterans indicates that a commute time standard 

based on population density (urban, rural, highly-rural) would more appropriately 

reflect the travel burden veterans face when accessing VA health care. However, the 

VFW recognizes that any established standard will be imperfect. Thus, VA must 

have the authority to make clinically based exceptions. Regardless, a study must be 

commissioned to determine the most appropriate geographic eligibility standard for 

health care furnished by the VA health care system. IOM is currently evaluating 

the way VA calculates wait times, yet no one has been asked to evaluate whether 

the 40-mile standard is appropriate. 

While changes are made to the Veterans Choice Program, VA must fully utilize 

all of its purchased care programs and authorities, such as the Patient-Centered 

Community Care Program, to ensure veterans have timely access to high quality 

care. The VFW continues to believe that veterans should be afforded the opportunity 

to obtain care closer to home if VA care is not readily available, especially when 

veterans have an urgent medical need. 

VA’S PURCHASED CARE MODEL

The Veterans Choice Program was intended to address the inconsistent use of 

VA’s decentralized non-VA care programs and evaluate whether national standards 

for access to non-VA care would improve access. The VFW is committed to ensuring 

such standards serve the best interest of veterans who rely on VA for their health 

care needs. Fortunately, the Veterans Choice Program is succeeding in improving 

access to care for thousands of veterans. The problem remains that many veterans 

who are eligible for the program have yet to be given the opportunity to receive nonVA care. 

As the future of the Veterans Choice Program and VA’s purchased care model are 

evaluated, the VFW believes it is important to recognize that the quality of care veterans receive from VA is significantly better than what is available in the private 

sector. In fact, studies conducted by the RAND Corporation and other independent 

86 

1 ‘‘Socialized or Not, We Can Learn from the VA,’’ Arthur L.Kellermannhttp, RAND Corporation. August 8, 2012, www.rand.org/blog/2012/08/socialized-or-not-we-can-learn-from-the-va.html. 2 ‘‘Comparing the Costs of the Veterans’ Health Care System with Private-Sector Costs,’’ Congressional Budget Office. December 10, 2014, https://www.cbo.gov/publication/49763. 

entities have consistently concluded that the VA health care system delivers higher 

quality health care than private sector hospitals.1 Additionally, independent studies 

have also found that delivering VA health care services through private sector providers is more costly.2

Moreover, many of VA’s capabilities cannot be readily duplicated or properly supplemented by private sector health care systems—especially for issues like combatrelated mental health conditions, blast injuries, or service-related toxic exposures. 

With this in mind, the VFW believes that VA must continue to serve as the initial 

touch point and guarantor of care for all enrolled veterans. As advocates for the creation and continued improvement of the VA health care system, the VFW understands that enrollment in the VA health care system is not mandatory. Yet, more 

than 9 million veterans have chosen to enroll and 6.5 million of them choose to rely 

on VA for their care, despite 75 percent of them having other forms of health care 

coverage. Additionally, veterans who have chosen to utilize their earned VA health 

care benefits are by and large satisfied with the care they receive. 

The VFW believes that veterans should continue to request a VA appointment 

prior to becoming eligible for non-VA care. This will ensure that VA upholds its obligation as the guarantor and coordinator of care for enrolled veterans, which includes 

ensuring the care veterans receive from non-VA providers meets department and industry safety and quality standards. Doing so allows VA to provide a continuum of 

care that is unmatched by any private sector health care system. 

Moving forward, the lessons learned from this important program should be incorporated into a single, system-wide, non-VA care program with veteran-centric and 

clinically driven access standards, which will afford veterans the option to receive 

care from private sector health care providers when VA is unable to meet such 

standards. Such a program must also include a reliable case management mechanism to ensure veterans receive proper and timely care and a robust quality assurance mechanism to ensure system wide directives and standards are met. 

Non-VA care must supplement the care veterans receive at VA medical facilities, 

not replace it. Ideally, VA would have the capacity to provide timely access to direct 

care for all the veterans it serves. We know, however, that VA medical facilities continue to operate at 119 percent capacity, and may never have the resources needed 

to build enough capacity to provide direct care to the growing number of veterans 

who rely on VA for their health care needs. 

VA must continue to expand capacity based on staffing models for each health 

care specialty and patient density thresholds. However, the VFW recognizes that in 

the 21st century, VA cannot rely on building new facilities alone. When thresholds 

are exceeded, VA must use leasing and sharing agreements with other health care 

systems, such as military treatment facilities, Indian Health Service facilities, federally-qualified health centers, and affiliated hospitals when possible and purchase 

care when it cannot. 

To ensure the VA health care system provides veterans the timely access to high 

quality health care they have earned and deserve, VA must conduct recurring assessments and future years planning to quickly address access, safety, and utilization gaps. The VFW recognizes that these improvements will not happen overnight, 

but veterans cannot be allowed to suffer in the meantime. Non-VA care must continue to serve as a reliable bridge between full access to direct care and where we 

are now. 

The VFW is committed to working with Congress, VA, our veterans service organization partners and other stakeholders to continue monitoring changes to the Veterans Choice Program and VA’s purchased care model; evaluate what is working; 

identify shortcomings; and work toward reasonable solutions. 

A copy of the VFW’s second Veterans Choice Program report has been sent to the 

Committee and I kindly request it be included in the record. 

Mr. Chairman, this concludes my testimony. I am prepared to take any questions 

you or the Committee Members may have. 

Chairman ISAKSON. Mr. Fuentes, at the beginning of your testimony, you said VA must immediately address—and I could not 

write fast enough to put it down, but I could not find it in the 

printed testimony. What was that very first, right in your first two 

or three sentences? 

87 

Mr. FUENTES. My first statement was regarding the change that 

Dr. Tuchschmidt actually just announced on how veterans elect to 

use the Choice Program. Right now they are scheduled an appointment at VA, and if that appointment is beyond 30 days, then they 

keep that appointment, and they call TriWest or Health Net and 

explore what their options are in the private sector. That means 

that they are making an informed decision when they decide to essentially reject their VA appointment. 

If you change that to having the veteran make the election before 

exploring their private sector options, it is not an informed decision 

and actually leads to veterans, if they go to the private sector, having to go to the back of the line and restart their VA scheduling 

process all over again. 

Chairman ISAKSON. OK. I want to make sure we understand or 

I understand this. I am a veteran that lives more than 40 miles 

from a clinic, so I am eligible for Veterans Choice. You are saying 

I should make the private appointment through TriWest and make 

a VA appointment anyway, and then choose which one I want? I 

should not automatically go to the private provider? 

Mr. FUENTES. For 40-milers, they currently do and I believe they 

should continue to just contact TriWest and Health Net. However, 

for 30-dayers, if VA cannot schedule an appointment within 30 

days, then they refer me to TriWest. But from talking to TriWest 

for dermatology for example, the average appointment is 60 to 90 

days. So, now I am choosing between waiting 60 days in VA to 

waiting 90 days in the private sector. I should know that the wait 

time in the private sector is 90 days before making that choice. 

Chairman ISAKSON. OK. Well, Deputy Gibson, will you answer 

this question. If I am a veteran and I am more than 40 miles from 

a clinic and I have got my card, can I automatically call TriWest 

and make an appointment? 

Mr. GIBSON. If you are more than 40 miles, yes, sir, you can. The 

example that he is citing is where it is 30 days’ wait time, and the 

proposed process would truncate—we were talking before, Senator 

Boozman mentioned about all of the administrative material, the 

clinical information that is being sent over. What we are trying to 

do is to streamline that part of the process. 

You know, in this particular case, if the veteran is not pleased 

with the appointment, that process happens within a couple of 

days, and they should be able to come back to VA to say, ‘‘I was 

not able to get a timely appointment,’’ or the TPA refers the authorization back. 

But it is a consequence of making the change, rather than booking the appointment in VA and referring the veteran over to the 

third-party administrator. 

Mr. FUENTES. Mr. Chairman, just to be clear, there are two distinct processes—one for 30-dayers and one for 40-milers, and I 

think one of the issues that the proposed change is looking to address is no-shows and cancellations. So, when the veteran accepts 

an appointment in the private sector, TriWest or Health Net, then 

tells the local facility this veteran has chosen Choice, cancel that 

appointment; however, currently a VA scheduler or a VA staff 

member has to go and manually cancel the appointments. This will 

88 

prevent that. However, this will come at the cost of the veteran’s 

experience. 

Chairman ISAKSON. That is what I was getting to, because I was 

hearing a potential problem there with two appointments being 

made, one of them not kept, but nobody letting each other know 

which is happening first. 

Mr. FUENTES. There are better ways to address that issue. I feel 

that an automated process could work. Develop a more seamless 

way for TriWest and Health Net to notify VA that the veteran has 

accepted a private sector appointment. 

Chairman ISAKSON. Now I am going to open a hornet’s nest, but 

I am going to go ahead and do it anyway. I had to pay a $30 penalty for not keeping an appointment back in Atlanta for some 

health care I was getting. I think we cannot put everything on the 

shoulder of TriWest or the VA. If somebody does not do their job 

by letting VA and TRICARE know which appointment they are 

going to keep, I would be the first person to say there ought to be 

a penalty to that person for not keeping the appointment, assuming 

the communication was complete. I know there are going to be 

some people who are not going to like that idea, sounding like a 

co-payment, but practically, it gets everybody’s attention. If we are 

going to be more efficient, I think everybody has got to be part of 

the efficiency, including the veteran who is getting the benefit. I 

just wanted to put that in there—not to shake a hornet’s nest. I 

thank you for raising that issue because that is very helpful. 

Senator Blumenthal? 

Senator BLUMENTHAL. Thanks, Mr. Chairman. You know, we 

have been talking a little bit about how to pay for the Denver cost 

overrun, and—— 

Chairman ISAKSON. We just figured it out. [Laughter.] 

Senator BLUMENTHAL. The Chairman has told me that we just 

figured it out. Now this has been a more productive afternoon than 

you could ever have hoped. [Laughter.] 

I want to thank all of you for thinking through these issues in 

such a constructive and positive way. I was taught as a trial lawyer, ‘‘Never ask a question if you do not know what the answer is 

going to be;’’ however, I want to ask a kind of open-ended question. 

Given that the Choice Program and the Choice and Accountability 

Act creates this fund of $15 billion, my view is that the potential 

raid on this money and the effort to use it as a kind of slush fund 

to pay for cost overruns in Aurora and Orlando and New Orleans 

and Las Vegas where, in fact, in total there have been $2.5 billion 

in cost overruns is a real threat to veterans health care. We can 

debate how much private care should be provided and how much 

it should be through VA facilities, but there is no question, in my 

mind at least, that VA facilities are an essential part of the health 

care mix of opportunities that we provide to our veterans. 

Therefore, to say we are going to defer projects and delay construction on those facilities all around the country to pay for cost 

overruns in those medical facilities under new construction is a 

very dangerous threat. 

Let me make that statement and throw it out to you for 

comment. 

89 

Mr. BUTLER. I would say that our national commander has gone 

on record to state his position that he opposes taking money from 

the Choice Program and using that funding to support other 

means. I have heard a lot of interesting conversations today about 

exploring other options, thinking outside of the box. I think that 

Members of Congress and VA need to do just that. They need to 

put their hats on and to think about what is best for veterans. How 

can we come to a resolution that would serve veterans best without 

taking money from a program that is early in its infant stage and 

then utilizing that funding for other means or purposes? If that is 

an option, that should be the last option after you have explored 

all the other options. 

Mr. SELNICK. Let me just chime in. I would agree with him in 

what you are saying in that we do not want that money raided. I 

worked at the VA from 2001 to 2009. I worked in VHA for 3 years. 

Every time there was a management failure, $300 million IT program, a failure and they scrapped it, there was not accountability, 

and it was just ‘‘Give me more money, give me more money.’’ 

It is like an alcoholic. You cannot give them more alcohol if they 

are failing. You have got to fix it in other ways. 

I always liked, having been in the VA, that you should do an 

audit of the books, because I saw lots of money put off the table. 

Now, maybe that money is not off the table anymore, off to the 

sidelines, but I would sure love to see an audit to see what is really 

there and what is really not. 

Mr. FUENTES. Veterans should not suffer because VA is unable 

to get its house in order. The VA must atone for its gross mismanagement. It should find cost savings in this program and in 

other programs in any way it can. Ultimately, Congress does have 

an obligation to ensure VA has the resources it needs to complete 

this project. Additionally, further delay and funding uncertainty 

will only lead to higher cost overruns. 

Mr. VIOLANTE. There is no easy answer, and I believe that the 

facilities are necessary and must be completed. Where that money 

comes from is another question, but I think it was said it is about 

veterans, and veterans need to be cared for. Congress needs to find 

the money somewhere to continue these. It should never happen 

again. I think VA should get out of the business of building 

hospitals. 

Mr. RAUSCH. We would agree in regard to the construction, and 

just more broadly, any and all cost overruns at VA provide a high 

risk of not providing the highest-quality care to veterans. That is 

the bottom lime, whether it is for construction or anything else. 

IAVA supports the Secretary’s budget request. We also support his 

request for greater flexibility. As I said in front of this Committee 

in the previous hearing, in theory, without greater flexibility to 

move money within those 72-plus line items, in theory, it would 

allow him to move more money back into Choice. We support his 

request for that, but more broadly, we believe Choice is an opportunity to better understand how veterans and where veterans want 

to receive the health care that they deserve. That, frankly, ties into 

what I think everyone is talking about, which is a strategic plan 

for coordinated care in the community. Care in the community, 

again, Mr. Chairman, I think that was a phrase you used in the 

90 

previous hearing, and we have started to use that because ultimately we believe that whether Choice stays in its current form or 

fashion, we think it is an opportunity to better understand the customer, our members, so the VA can move forward with a strategic 

plan to provide the best services possible. 

Thank you. 

Senator BLUMENTHAL. Well, I appreciate all of your answers, 

which confirm my views, and the Chairman and I have stated 

those views. The Chairman has stated and I have as well that we 

have alternatives, different options, that we think absolutely have 

to be explored. We look forward to working with you on those options and also on this concept of accountability, which all of you 

have mentioned. You heard me talk about it earlier, which is includes looking backward, holding people accountable who, in effect, 

are responsible for this nightmarish debacle, and also looking forward. I might mention, Mr. Violante, in your written testimony you 

discuss the VA’s need to redesign its performance and accountability report. You make reference to the Department of Homeland 

Security’s similar regiment known as planning, programming, 

budgeting, and execution, PPBE, as a possible model. I am sure 

there are other models as well. 

To your point, Mr. Rausch, I have said that the VA ought to be 

out of the business of construction, that it should be the Corps of 

Engineers or some other agency that takes over this function. No 

disrespect to the VA, but it is not within their job description to 

manage these mammoth, multimillion-dollar, in fact, billion-dollar 

projects on which the future of VA health care depends. 

You know, when you and I go to build a house, ordinarily we are 

not our own contractors. Maybe some of you are, but we try to get 

a little professional help to do it. That may be an inexact analogy, 

but for all the Government agencies, not just the VA, this should 

be some professional center of management that maximizes resources, reduces costs, makes it energy efficient, decides what materials and designs should be incorporated. 

I think we have a lot to discuss going forward. I welcome your 

participation, and I thank the Chairman for this hearing. Thank 

you all. 

Chairman ISAKSON. Thank you, Senator Blumenthal. 

Let me just echo everything that Senator Blumenthal said and 

point out a couple of things. 

Originally, in our first hearings, the VA people who testified told 

us on the 40-mile rule in terms of distance driven versus crow flying, that that was going to expand the number of people being eligible for VA Choice and was going to cost more money. 

Now that we have talked about the care you need and that definition, which we are working on, one of the estimates is it is going 

to cost more money than we planned. 

We understand that to go from Point A, which was a disaster in 

Phoenix that led to all the problems that caused Veterans Choice, 

to where we want to go is going to take time, it is going to take 

money, and it is going to take coordination, which is where the coordination work comes from. There are savings in coordination once 

you accept a few principles. Principle one is that if you use the private sector well and the veterans like it and it is an alternative to 

91 

make the veteran system work—it is not a substitute, but in certain cases at times it is an alternative—then you are saving the VA 

money in cost; you are getting the private sector investment, and 

you are getting better health care to the veteran. 

I am willing to look at this in a macro sense. We just did a budget in the Congress. It is a 10-year budget that balances in the tenth 

year. VA has got some problems. It is going to probably take 10 

years to financially solve it, but you have got to begin that at some 

point in time. 

Hopefully, as we work through this problem on Denver and get 

the resolution on who builds what and when they build it, we also 

look at it in a macro sense for how we find the savings to pay for 

the changes we need to make. Eventually, we are going to have a 

delivery system that is probably less costly than building the bricks 

and mortar. It is going to take us a while to get there. 

With that said, I want to thank all of you for being here. Thank 

you for your service to America, and I appreciate the time everybody has given us today. 

[Whereupon, at 5:07 p.m., the Committee was adjourned.] 

(93) 

A P P E N D I X 

PREPARED STATEMENT OF HON. PATTY MURRAY, 

U.S. SENATOR FROM WASHINGTON

Mr. Chairman, Thank you for holding this hearing. As the daughter of a World 

War II veteran, I believe making sure our country keeps the promises we’ve made 

to our Nation’s heroes should be at the top of our list of priorities, all of the time. 

Taking care of our veterans when they come home is a fundamental part of who 

we are as a nation and we must make sure that the Department of Veterans’ Affairs 

(VA) has the tools and resources it needs to provide critical care and support. It is 

part of the cost of going to war. 

Ensuring that all veterans receive quality care in a timely manner remains a critical issue. The Department must work quickly resolve challenges associated with 

the implementation of the Veterans Access, Choice, and Accountability Act. I continue to hear from veterans about delays and confusion in getting care through the 

Choice Program—and delays in filling positions created by this legislation. This is 

very concerning to me. 

No doubt, the $5 billion we gave to build and strengthen VA for the long-term 

is making a difference in some areas, but there is much more to be done. In my 

home state of Washington, we are seeing some positive effects of this legislation in 

addressing critical shortages, as several VA medical centers have already announced 

they will hire hundreds of new medical care staff. They will also be able to upgrade 

and expand many of the facilities in Washington. 

It is critical that VA uses that $5 billion as it was intended by Congress: to hire 

more providers, create more usable clinical space, and improve access to care for 

veterans. The Department should not be diverting this money from those serious 

needs to make up for the failures in constructing the Denver hospital. 

Despite this, low utilization of the Choice Program and increasing delays make 

it clear that it’s time to start planning now for what the future of non-VA care will 

look like. The Choice Program was a temporary, emergency authority. When it expires, VA needs to have one reformed program in place to help veterans access care 

outside VA in a way that complements services provided by VA, provides coordinated care with strict quality of care requirements, has consistent processes and eligibility rules, and is cost effective. I look forward to working with all of you on this 

important task. 

Finally, I would also like to thank both panels of witnesses for testifying at this 

hearing. Your hard work is very important for us as we work to make sure there 

are adequate resources to provide veterans the benefits and care they have earned. 

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SECOND REPORT ON VETERANS CHOICE PROGRAM SUBMITTED BY THE VETERANS OF

FOREIGN WARS OF THE UNITED STATES


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