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98–641 2016

ASSESSING VA’S ABILITY TO PROMPTLY PAY 

NON-VA PROVIDERS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH 

OF THE

COMMITTEE ON VETERANS’ AFFAIRS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

WEDNESDAY, JUNE 3, 2015 

Serial No. 114–24 

Printed for the use of the Committee on Veterans’ Affairs 

( 

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


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COMMITTEE ON VETERANS’ AFFAIRS 

JEFF MILLER, Florida, Chairman 

DOUG LAMBORN, Colorado 

GUS M. BILIRAKIS, Florida, Vice-Chairman 

DAVID P. ROE, Tennessee 

DAN BENISHEK, Michigan 

TIM HUELSKAMP, Kansas 

MIKE COFFMAN, Colorado 

BRAD R. WENSTRUP, Ohio 

JACKIE WALORSKI, Indiana 

RALPH ABRAHAM, Louisiana 

LEE ZELDIN, New York 

RYAN COSTELLO, Pennsylvania 

AMATA COLEMAN RADEWAGEN, American 

Samoa 

MIKE BOST, Illinois 

CORRINE BROWN, Florida, Ranking 

Minority Member 

MARK TAKANO, California 

JULIA BROWNLEY, California 

DINA TITUS, Nevada 

RAUL RUIZ, California 

ANN M. KUSTER, New Hampshire 

BETO O’ROURKE, Texas 

KATHLEEN RICE, New York 

TIMOTHY J. WALZ, Minnesota 

JERRY MCNERNEY, California 

JON TOWERS, Staff Director 

DON PHILLIPS, Democratic Staff Director 

SUBCOMMITTEE ON HEALTH 

DAN BENISHEK, Michigan, Chairman 

GUS M. BILIRAKIS, Florida 

DAVID P. ROE, Tennessee 

TIM HUELSKAMP, Kansas 

MIKE COFFMAN, Colorado 

BRAD R. WENSTRUP, Ohio 

RALPH ABRAHAM, Louisiana 

JULIA BROWNLEY, California, Ranking 

Member 

MARK TAKANO, California 

RAUL RUIZ, California 

ANN M. KUSTER, New Hampshire 

BETO O’ROURKE, Texas 

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

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

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

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

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

is further refined. 


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C O N T E N T S 

Wednesday, June 3, 2015 

Page 

Assessing VA’s Ability to Promptly Pay Non-VA Providers ................................. 1 

OPENING STATEMENTS 

Dan Benishek, Chairman ........................................................................................ 1 

Julia Brownley, Ranking Member .......................................................................... 2 

WITNESSES 

Asbel Montes, Vice President of Reimbursement and Government Affairs, 

Acadian Ambulance Service ................................................................................ 4 

Prepared Statement ......................................................................................... 33 

Vince Leist, President and Chief Executive Office North Arkansas Regional 

Medical Center, On behalf of the American Hospital Association ................... 5 

Prepared Statement ......................................................................................... 34 

Sam Cook, President, National Mobility Equipment Dealers Association ......... 7 

Prepared Statement ......................................................................................... 37 

Gene Migliaccio Dr. P.H., Deputy Chief Business Officer for Purchased Care, 

VHA, U.S. Department of Veterans Affairs ....................................................... 9 

Prepared Statement ......................................................................................... 49 

Accompanied by: 

Joseph Enderle, Director, Purchased Care Operations, VHA, U.S. 

Department of Veterans Affairs 

STATEMENT FOR THE RECORD 

Hon. Charles W. Boustany Jr., M.D. ...................................................................... 52 

Prepared Statement by Debora M. Gault on American Medical Response ........ 61 

AMR PBS Report ..................................................................................................... 68 

Statement by Greg Hufstetler on Reimbursement Technologies, Inc.—A Subsidiary of EmCare, Inc. ........................................................................................ 73 


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ASSESSING VA’S ABILITY TO PROMPTLY PAY 

NON-VA PROVIDERS 

Wednesday, June 3, 2015 

U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON VETERANS’ AFFAIRS, SUBCOMMITTEE ON HEALTH, Washington, DC 

The subcommittee met, pursuant to notice, at 10:00 a.m., in 

Room 334, Cannon House Office Building, Hon. [chairman of the 

subcommittee] presiding. 

Present: Representatives Benishek, Huelskamp, Coffman, 

Wenstrup, Abraham, Brownley, Takano, Ruiz, and Kuster. 

Also Present: Representative Walorski. 

OPENING STATEMENT OF CHAIRMAN DAN BENISHEK 

Dr. BENISHEK. Good morning. The subcommittee will come to 

order. 

Thank you all for joining us for today’s subcommittee hearing, 

‘‘Assessing VA’s Ability to Promptly Pay Non-VA Providers.’’ 

The issue we will discuss this morning, VA’s ability to efficiently 

and accurately reimburse non-VA providers for the services they 

provide to veteran patients on the Department’s behalf, has perhaps the most far-reaching implication of any issue that we will 

discuss this Congress. It impacts small and large hospital systems, 

individual providers and practice groups, ambulance companies 

and emergency departments, home health aides, mobility equipment dealers, and all manner of others in communities across the 

country who find themselves left holding VA’s check, sometimes to 

the tune of millions of dollars. 

It impacts veterans, who are sometimes billed for services that 

VA should have paid, which can damage both their credit and their 

confidence in VA. And it also impacts the overall success of VA 

healthcare system—a healthcare system that is increasingly reliant 

on non-VA providers who are becoming more and more hesitant to 

accept veteran patients for fear that VA will not reimburse them 

for the services that they provide. 

This morning, we will hear troubling testimony from some nonVA providers who will outline persistent difficulties that they have 

faced when attempting to obtain timely and accurate payment from 

VA, overly burdensome VA guidelines that hinder their ability to 

resolve issues with VA officials, and inexplicable gaps between stated VA policy and day-to-day practice in the field. 

They will allege that they are owed, in some cases, tens of millions of dollars over many years and have to fight VA for every 


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penny. They will allege that they have had to wait for up to 4 

hours on the phone when attempting to contact VA to check on the 

status of a claim and then, after connecting with a VA employee, 

were disconnected because they did not know the veteran’s middle 

name or tried to ask VA about more than four claims on one phone 

call. 

Perhaps most disturbingly, they will allege that VA has lost sensitive medical documentation that they have provided to support 

their claims even though they are able to demonstrate via certified 

mail that VA received the documents in question. 

What worries me almost more than the testimony that we will 

hear today is the testimony that we won’t hear today from those 

who are reluctant to share their stories publicly out of fear of retaliation. For example, a small business in my district who has been 

unable to obtain timely payment from VA for services provided to 

Michigan veterans elected not to provide comments for today’s 

hearing out of fear that coming forward would negatively impact 

their relationship with VA leaders and, therefore, their ability to 

get paid for the services that they have rendered so far and to continue helping veterans in the future. 

Of course, all of this begs questions. If non-VA providers are 

owed collectively hundreds of millions in backlog payments, where 

is that money? Why is there such a wide variation in claims processing from VA facility to VA facility? And why are there such burdensome restrictions placed on non-VA providers, who are simply 

looking to be reimbursed in a timely manner for the valuable lifesaving services that they provide? 

What retaliatory actions has VA taken against non-VA providers 

that have caused many to be unwilling to publicly relay their stories? How can VA expect to become a healthcare leader when basic 

business functions cannot be completed efficiently? And, most 

troublingly, what happened to medical record information that VA 

is signing for and then claiming never to have received? And how 

can we be sure that sensitive, personal information has not been 

compromised by shoddy VA recordkeeping? 

These are just some of the many serious issues that we need answers to this morning. 

So, without further ado, I now yield to Ranking Member 

Brownley for any opening statements she may have. 

OPENING STATEMENT OF RANKING MEMBER JULIA 

BROWNLEY 

Ms. BROWNLEY. Thank you, Mr. Chairman. And thank you for 

calling this hearing today. 

Section 105 of the Veterans Access, Choice, and Accountability 

Act required the Veterans Affairs to set up a claims processing system. In addition, the Government Accountability Office is to report 

it to us no later than 1 year after the law was enacted about the 

timeliness of payments for hospital care, medical services, and 

other health care furnished by non-Department of Veterans Affairs 

healthcare providers. I understand the report is due August 7 of 

this year, and I look forward to receiving the report from GAO. 

The VA has struggled in the past to ensure that non-VA providers are paid in a timely manner. Numerous past reports by the 


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GAO have found weaknesses in the management and oversight of 

non-VA medical care. 

In today’s testimony submitted by Mr. Greg Hufstetler of 

EmCare, he claims that EmCare has been unable to obtain virtually any payments from the Veterans Health Administration 

since the fourth quarter of 2013. 

I understand that EmCare has treated over 59,000 veterans 

without receiving payment. This concerns me greatly. I look forward to hearing from VA how this could happen and what are they 

doing to address the situation. Is this typical throughout the 

healthcare system, or are there extenuating circumstances involved 

in this particular instance? 

According to VA testimony, since May of 2014, VA has received 

34 percent more claims than January 2015 through April of 2015 

as compared to the same time in 2014. That represents a significant increase of claims into a system that was already overburdened. I would like VA to tell the subcommittee what the significant challenges are that affect the ability of VA to pay on time. 

Mr. Chairman, again, I want to thank the witnesses for being 

here today to help inform the subcommittee how we can improve 

the claims processing system of the Veterans Health Administration. I look forward to their testimony, and I thank you for holding 

the hearing. 

And I yield back. 

Dr. BENISHEK. Thank you, Ms. Brownley. 

Joining us on our first and only panel this morning is Asbel 

Montes, vice president of reimbursement and government affairs 

for Acadian Ambulance Service; Vince Leist, president and chief executive officer of the North Arkansas Regional Medical Center, who 

is testifying on behalf of the American Hospital Association; Dr. 

Gene Migliaccio, VA’s Deputy Chief Business Officer for Purchased 

Care, and he is accompanied by Joseph Enderle, VA’s Director of 

Purchased Care Operations. We are also joined by Sam Cook, president of the National Mobility Equipment Dealers Association. 

I am going to yield to his Congresswoman, my friend, colleague, 

and fellow committee member, Jackie Walorksi, to introduce him. 

Mrs. WALORSKI. Thank you, Mr. Chairman, for the opportunity 

of allowing me to introduce my constituent Sam Cook, president of 

Superior Van & Mobility in South Bend, Indiana, located in my district. 

Sam’s father, Dan Cook, Sr., founded Superior in 1976. It is a 

family-run business and today is currently one of the largest mobility dealers in the country. Along with running a growing company, 

Sam has acted with the National Mobility Equipment Dealers Association, where in 2012 he assumed the role of president of the 

board of directors. 

I would like to welcome Sam and thank the chairman for the indulgence. 

Dr. BENISHEK. Thank you, Mrs. Walorksi. 

Well, let’s begin. 

Mr. Montes, we will begin with you. Please proceed with your 

testimony. You have 5 minutes. Thanks. 


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STATEMENT OF ASBEL MONTES 

Mr. MONTES. Chairman Benishek and Ranking Member 

Brownley and distinguished members of the subcommittee, my 

name is Asbel Montes, and I am the vice president of reimbursement and government affairs for Acadian Ambulance Service. We 

are located in Lafayette, Louisiana. We are the largest privately 

owned, employee-owned ambulance service in the Nation. 

The chairman and CEO of our company, Richard Zuschlag, 

founded our company in 1971 with eight Vietnam veterans. Today, 

we have over 4,000 employee-owners, with over 400 of those being 

military veterans. So I am honored to sit before you today to represent not only our industry but, even more so, the veterans that 

we serve. 

Prior to coming before you today, our company, along with American Medical Response, who is the largest public ambulance provider in the Nation, and the American Ambulance Association have 

worked diligently with our congressional delegation, our other 

healthcare stakeholders, the Veterans Integrated Service Network, 

as well as the national leadership at VA to assist, recommend, and, 

frankly, demand that VA’s internal processes be updated and modified to ensure that they are fulfilling their intended purpose but 

also not placing a financial burden on the men and women who 

have served our Nation so selflessly. Despite these efforts, we have 

not seen any significant positive movement from VA and, therefore, 

find ourselves here today. 

For a real-life look at the issue, please allow me to provide one 

example that a veteran in Louisiana experienced who called 9/11 

for emergency medical care and transport in early 2014. 

We filed a claim and provided all the necessary information and 

medical records and appropriate documentation within 30 days to 

VA. We sent this information via certified mail. VA signed for it, 

confirming receipt, 5 days later. Almost a year later, on March of 

2015, the veteran appeared on two local TV channels describing 

how his claim was still unpaid. He was subsequently contacted by 

a VA representative on March the 18th of 2015 indicating that his 

claim would be paid and he would receive notification. The claim 

finally processed on April of 2015, over a year and 3 months later. 

There are many more examples just like this that we could provide you of other providers and veterans alike across the Nation, 

but suffice it to say the GAO report in 2014, which highlighted 

these issues regarding excessive claims processing time and paperwork requirements for non-VA providers, is absolutely correct. 

This problem is especially acute for the majority of ambulance 

services, providers that serve the local 9/11 responders and their 

communities, who are prohibited from refusing emergency treatment from any patient regardless of their payer source and the 

ability to pay. 

The failure to pay providers in a timely and accurate manner 

puts providers like us in the difficult position of having to bill veterans for emergency treatment, placing an unfair financial burden 

on the veterans due to the lack of response, invalid denial or payment by VA. 

Our previous efforts at addressing this issue have included numerous increase sent from our Congressmen and Senators in many 


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States, and the responses from VA have remained wholly inaccurate and inadequate. 

My colleagues and I are not ignorant to the magnitude that this 

issue presents for VA. However, after numerous offers of assistance 

and requests for relief from the private and public sector, we have 

seen very little change. In fact, our company, American Medical Response, and many members of the American Ambulance Association have seen a recent escalation of the problem, with our accounts receivable due from VA growing in excess of $30 million 

over 90 days. 

VISN 16 has sent reports to our congressional delegates with a 

number that would indicate improvement, but our data clearly indicates the opposite. On May 14 of this year, just a few weeks ago, 

we had yet another conference call with VISN 16, specifically the 

Flowood, Mississippi, office, and requested that they provide us 

with all claims that we filed to them since 2012 in order to reconcile our records with theirs. 

That audit, which we completed last Tuesday, indicated that they 

showed no record of 768 claims which were sent certified mail with 

confirmation of receipt. Last Thursday, just a few days ago, they 

said they would investigate the discrepancy and get back with us 

on Friday. As of this morning, when I spoke with my staff at 9 

o’clock, we still had not heard from their office regarding that. 

The Federal Government has a responsibility to ensure that our 

veterans receive the best health care we can provide. It also has 

the responsibility to ensure that they are not required to bear an 

unjustified financial burden because VA fails to pay non-VA providers in a timely and accurate manner. 

It is our recommendation that Congress remove all claims processing for non-VA providers from the Department of Veterans Affairs and place it with a single fiscal intermediary, providing guidelines and policies to address the issues stated here today. These 

steps would ensure consistency, efficiency, and expertise in personnel, as well as sufficient, dedicated resources to process claims 

timely. Several other government programs, such as TRICARE and 

Medicare, utilize this strategy successfully, but note that time is of 

the essence. 

Thank you for giving me this opportunity to provide this information and serve those who have sacrificed so much for our Nation. I look forward to answering the committee’s questions and 

serving as a resource as the committee’s work continues beyond 

this hearing. 

[THE PREPARED STATEMENT OF ASBEL MONTES APPEARS IN THE

APPENDIX] 

Dr. BENISHEK. Thank you, Mr. Montes. 

Mr. Leist, please go ahead. 

STATEMENT OF VINCE LEIST 

Mr. LEIST. Thank you. 

Chairman Benishek and Ranking Member Brownley, on behalf of 

the American Hospital Association’s nearly 5,000 member hospitals, health systems, and other healthcare organizations, I thank 

you for the opportunity to testify today. 


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I am Vince Leist. I am president and CEO of North Arkansas Regional Medical Center. We are a county-owned facility that is operated by a separate 501(c)(3), a not-for-profit organization, serving 

the comprehensive healthcare needs of rural communities of four 

counties in north-central Arkansas. Like every community in 

America, we are proud of the men and women who have served our 

great Nation, and we are honored to care for them in their time 

of need. 

America’s hospitals strive to ensure patients get the right care at 

the right time in the right setting. We have a longstanding history 

of collaboration with VA and are eager to assist the Department 

and our veterans in any way that we can. 

However, hospitals’ continued inability to obtain a timely payment from VA and its contractors hinders access for care for veterans who need non-VA services and undermines the ability and viability of non-VA hospitals and the essential services they provide 

to their communities. 

We also are concerned about the process in which VA processes 

claims. Medical records have been lost or unaccounted for, leading 

to questions about the privacy of our veterans’ records. In addition, 

many veterans worry about their claims that are not paid promptly 

or left unpaid completely, and they are left in a difficult position 

of trying to get their claims paid while they are battling illness. 

This is an untenable position for both the hospital and for the veterans. 

Last month, at a hearing before the House VA Committee, VA 

Deputy Secretary Sloan Gibson acknowledged the lack of timeliness 

in promptly reimbursing non-VA hospitals and expressed his commitment to improve the payment process. Hospitals and health systems welcome this commitment. However, many non-VA hospitals 

have outstanding payments spanning many months, some dating 

back years. 

While North Arkansas Regional Medical Center is very dedicated 

to serving the veterans in our community, we accept each and 

every one who walk through our door. We have decided against 

contracting with VA due to slow or no payment for claims and the 

bureaucracy involved in getting reimbursement for claims. 

Since 2011, we have had 215 claims, totaling more than 

$750,000, that have not been paid by VA. We have attempted to 

work with VA to resolve these claims. However, those efforts have 

resulted in long periods on hold to speak to VA representatives, 

limitations on the number of cases that can be discussed in any one 

particular phone call, and, once again, countless lost medical 

records. 

In addition, according to data from the Arkansas Hospital Association, more than 4,400 claims, many dating back 3 years, totaling 

more than $24 million, are currently owed 60 hospitals in the State 

of Arkansas. In March, VA reported a national backlog of more 

than $878 million in delayed payments for veterans’ emergency 

medical services delivered by non-VA providers. 

Even though our hospital has not been paid by VA for services 

going back 4 years, we continue to provide care for the veterans in 

our communities we serve. However, continued lack of prompt payment and further reductions in Medicare and Medicaid reimburseVerDate Aug 31 2005 10:03 Jul 26, 2016 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 C:\PDF\OUT\98641.TXT PAT

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ment would force our hospital and many other hospitals across this 

country to reduce or eliminate services offered to patients, resulting 

in reduced access to care for the entire community. 

To help address this problem of prompt pay, the American Hospital Association recommends that VA do: 

One, review claims as soon as practicable and, after receipt, determine whether they are proper. When a claim is determined to 

be improper, the Department should return the claim to the hospital as soon as practicable but no later than 7 days after the initial receipt. VA also should specify the reasons why the claim was 

improper and request a corrected claim. 

Two, pay claims within 30 days of the receipt of a proper claim. 

Three, make interest payments to hospitals when claims are paid 

outside of this 30-day window. 

And, four, Congress should require VA to develop a metric to 

measure effectiveness of the claims processing, including soliciting 

feedback from non-VA providers. VA also should report to Congress 

on a regular basis the information it obtains from the effectiveness 

of this claims processing. 

In conclusion, VA health system does extraordinary work under 

very difficult circumstances for a growing and complex population 

of patients. While the system is working to overcome operational 

changes, America’s hospitals are eager to assist the Department 

and the veterans in any way that we can. The AHA stands ready 

to work with the committee to ensure prompt payment to non-VA 

providers so that hospitals can continue to provide vital services to 

veterans and all of the patients in the communities that they serve. 

Thank you, sir. 

[THE PREPARED STATEMENT OF VINCE LEIST APPEARS IN THE AP- PENDIX] 

Dr. BENISHEK. Thank you, Mr. Leist. 

Mr. Cook, you may begin. 

STATEMENT OF SAM COOK 

Mr. COOK. Good morning. My name is Sam Cook. I am president 

of Superior Van & Mobility. I operate nine mobility dealerships in 

four States: Kentucky, Indiana, Tennessee, and Louisiana. 

I am president of and am here on behalf of the National Mobility 

Equipment Dealers Association. NMEDA is a nonprofit trade association which includes more than 300 highly qualified mobility 

dealers representing the small-business community. We specialize 

in modifying, selling, servicing specially equipped vehicles so that 

people with physical disabilities can drive safely and be transported on public roads in accordance with Federal motor vehicle 

safety standards. I would first like to say the NMEDA members 

are proud and honored to serve American veterans, especially those 

with disabilities, who have sacrificed so much for our country. 

I want to thank the chairman and the committee for focusing 

their attention on VA slow-payment issue. 

However, this investigation should not come as a surprise to VA. 

Over the past 5 years, NMEDA has attempted to work with VA 

prosthetics department and the Veterans Benefit Administration to 

help remedy these chronic slow-payment practices of local VAs. 

Over that time, NMEDA has submitted nearly 4,000 past-due inVerDate Aug 31 2005 10:03 Jul 26, 2016 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 C:\PDF\OUT\98641.TXT PAT

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voices, totaling over $34 million. To be fair, VA at times has assisted in getting past-due invoices paid, but after 5 years the situation has not improved. 

According to the Prompt Payment Act, a payment is due 30 days 

after a government agency receives a proper invoice. This simply 

is not happening in most VA facilities. For example, a mobility 

dealer in North Carolina was owed $247,000 from just one VA facility that included 15 separate invoices, all past due for an average of 150 days. A mobility dealer in Texas was owed $295,000 

from one VA facility that included 55 separate invoices, all past 

due an average of 312 days. At one point, my own company was 

owed a total of $645,000 from five different VA facilities over four 

States, 68 invoices, all past due an average of 396 days. 

These are just a few examples. This is completely unacceptable. 

Mobility dealers are small-business owners, and they simply cannot 

afford to carry this kind of debt on their books and pay suppliers 

and meet payroll. 

It also bears mentioning that, in most cases, mobility dealers are 

not paid interest on these past-due invoices. 

There are other payment process inconsistencies related to how 

a dealer submits proper invoices to even qualify for payment. 

Finally, another VA inconsistency is VA has no criteria for selecting automotive mobility dealers. Anyone can claim to be a modifier 

without any training, appropriate facilities, equipment, or accreditation and then bill the government. 

The lack of any meaningful or timely effort by VA to address 

slow payment, lack of conformity, and payment submission policy, 

and having no measurable selection criteria leads to a potential 

outcome of unsafe vehicles driven by disabled vets, placing them, 

their families, and the driving public at risk. 

Based on NMEDA input, NMEDA has concluded that the reason 

for VA not being responsive to this constant outcry is multifold: 

number one, failure to communicate VA policy to the field; number 

two, inconsistent enforcement of the policy; number three, understaffing at VA; and, number four, supplier payment not being a VA 

priority. 

Those of us that deal with different VA facilities have to deal 

with a different interpretation of the rules and policies at each one. 

As the saying goes, if you have been to one VA, you have been to 

one VA. 

For the record, there is also evidence that this issue may be 

worse than either reported or imagined due to reluctance to speak 

out against VA in fear of losing future business. To be clear, there 

are no written or verbal threats; the local VA just stops calling or 

awarding business. 

While $34 million may not seem like a lot in terms of Federal 

budgeting, it is a huge amount to small-business owners who have 

to bankroll VA’s inability to manage the payment process. We 

admit that not all VA facilities are guilty of slow payment, and 

dealers appreciate those who pay promptly, but our experience is 

the majority foster a culture of inconsistent, unenforced, or ignored 

policy. 

We respectfully ask Congress to demand VA ensure that quality 

goods and services be delivered to our veterans and those busiVerDate Aug 31 2005 10:03 Jul 26, 2016 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 C:\PDF\OUT\98641.TXT PAT

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nesses delivering those be paid in a timely manner. We all know 

our veterans deserve better. 

Thank you. I would be glad to answer any questions. 

[THE PREPARED STATEMENT OF SAM COOK APPEARS IN THE APPENDIX] 

Dr. BENISHEK. Thank you, Mr. Cook. Thirty-four million dollars 

sounds like a lot of money to me. 

Dr. MIGLIACCIO [continuing]. Is that how you say it? 

Dr. Migliaccio ‘‘Migliaccio.’’ 

Dr. BENISHEK. ‘‘Migliaccio.’’ 

Dr. MIGLIACCIO. Yes, sir. 

Dr. BENISHEK. All right. Doctor, you have 5 minutes. Thank you. 

STATEMENT OF GENE MIGLIACCIO, DR.P.H. 

Dr. MIGLIACCIO. Good morning, Chairman Benishek, Ranking 

Member Brownley, and members of the subcommittee. Thank you 

for the opportunity to discuss VA’s reimbursement efforts for nonVA care providers. 

I am accompanied today by Mr. Joseph Enderle, Director of Purchased Care Operations. 

There are three important points I want to share with the committee this morning: First, we own the problem of aged claims. Second, we are fixing the problem. And, third, we will lean forward 

with continuous improvement and accountability. 

VA’s community care programs provide high-quality and accessible care to veterans. To ensure that care is available, VA understands the importance of complying with requirements of the 

Prompt Pay Act and making timely payments to our partners. 

Section 106 of the Veterans Choice Act required the Department 

to transfer authority to pay for health care furnished through VA 

community providers and the associated budget to the Chief Business Office for Purchased Care no later than October 1, 2014. VA 

met this target. 

In just 7 weeks, we quickly realigned about 2,000 positions, of 

which 50 percent of those positions are veterans, to the Purchased 

Care Office from the VISNs and our medical centers. This realignment established a single, unified shared-service organization responsible for payment functions and centralized management, allowing us to leverage business process efficiencies going forward. 

VA has experienced tremendous growth in the volume of claims 

from community providers since we started the Accelerated Care 

Initiative in May of 2014. VHA has received 34 percent more 

claims from January 2015 through April 2015 compared to the 

same timeframe in 2014. We are making every effort to ensure 

claims are processed timely. Our current standard is to have at 

least 80 percent of our claims inventory under 30 days old. 

Processing timeliness is measured from the point the claim is received to when the claim is processed and, as a result, marked as 

complete. As of May 22, 2015, our nationwide performance was 73 

percent. And if our metric was aligned with Medicare processing 

standards for other than claims with no impropriety, which is 

about 45 days, our performance would be 76 percent. As of today, 

we are processing clean claims within 22 days. 


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Claims received by VA without prior authorization is one significant factor in the delay of claims processing. When claims without 

an authorization are received from community providers, our staff 

spends time to ensure those claims are adjudicated based on the 

veterans’ eligibility. Based on regulatory and statutory authority, 

not all veterans are eligible for community care in all situations. 

When claims are denied, veterans are notified timely, along with 

the right to appeal. 

I want to describe what we are doing to better our payment processes. 

First, we are refining standard processes and performance targets and monitoring to ensure processing activities are performed 

and measured consistently across VA. 

Second, to better process claims, we established the Support 

Claims Processing Division in March of 2015. This division was established to assist with processing claims when sites have high 

turnover, we see a sudden increase in claims, or need assistance 

with verification of claims. To address the increasing inventory, 

more staff was recently added to the division. 

Third, the Chief Business Office established a contract to add 

support staff to process claims at those sites with significant inventories. Currently, 145 full-time employees and contractors are on 

board at Support Claims Processing Division. Over 40 more employees are expected to be onboard this month. VHA also plans to 

hire up to an additional 220 full-time employees. 

Fourth, VHA is implementing technical fixes for issues preventing claims from being processed in a timely manner. All community care referrals require authorization. Without the authorization, claims cannot be processed, delaying payment. In some cases, 

authorizations are not entered timely in VA payment system due 

to administrative process. This is a processing issue we must resolve. We are working with non-VA care coordination staff to ensure authorizations are entered before a claim is received. 

Finally, we are working with VA Center for Applied Systems Engineering to standardize business processing to increase efficiencies 

and reduce variation using Lean methodology. We have also completed technical site visits to evaluate how the current software design is meeting business needs. 

We are finding better and more frequent ways to communicate 

the status of claims processing timeliness with stakeholders. Ongoing training is also being provided to community providers on the 

resources available to address their information needs. 

Our recent actions have had a significant impact on processing 

volume. From January to May of 2015, VHA processed almost 6 

million claims, a 21-percent increase from the roughly 5 million 

claims processed January to May of 2014. 

We are thankful for the work of our community providers and 

their work in providing timely, high-quality care to fellow veterans, 

and we thank you for that. We are working hard to expedite payments and streamline our claims services in order to make this an 

effective and efficient system for all. 

Mr. Chairman, I appreciate the opportunity to appear before you 

today. We are prepared to answer any questions you or other members of the committee may have. Thank you very much. 


VACREP0180 with DISTILLER
11 

[THE PREPARED STATEMENT OF GENE MIGLIACCIO APPEARS IN THE

APPENDIX] 

Dr. BENISHEK. Thank you, Dr. Migliaccio. 

I yield myself 5 minutes for questions. 

Dr. Migliaccio, how long have you been on the job there at VA 

doing this job? 

Dr. MIGLIACCIO. Sir, this is my fourth week. 

Dr. BENISHEK. Yes. 

This is not the first time that we have been at a hearing where 

we several people have testified about how things are, you know, 

in their perspective, and then we have had a VA person come and 

give us a litany of all the great things that VA is doing to improve 

the situation. 

The fact that you make that statement and the fact that what 

is going on with these folks over here is still going on, it doesn’t 

really jibe very well. Do you understand what I am saying? 

Dr. MIGLIACCIO. Yes, sir. 

Dr. BENISHEK. I hate to beat you up because you have just been 

here for 4 weeks, right? 

Let me just list a couple of the things here that distress me, one 

of the things you said was, ‘‘we don’t have a documentation for the 

claim sometimes due to the administrative process.’’ That was one 

of the things you just said. The administrative process is a lot of 

the problem, Doctor. 

One of the things that Mr. Montes mentioned was the 768 claims 

where they sent the documentation to VA. They have a certified 

mail receipts that it was signed for by VA. And yet VA doesn’t 

seem to have the documentation necessary to pay the claim, despite the fact that it was signed before by a VA employee. 

So what happened to those records? What is the story there? You 

should have those claims. Somebody signed for it. Where are they? 

Who is looking at them? Is it secure? You apparently don’t know, 

as far as I can tell. 

Can you answer that question for me? 

Dr. MIGLIACCIO. Well, I thank you for the question. 

I also thank the members of the committee and also Congress for 

the Choice Act because it has allowed us to standardize our processes and centralize. 

And so, with questions such as where are the records, it is difficult to answer that question. I can ask my colleague, Joe Enderle, 

to answer. But when we are looking at the 150-plus medical centers and CBOCs that we have—— 

Dr. BENISHEK. Well, let’s ask Mr. Enderle. Maybe he has a better 

idea. 

Dr. MIGLIACCIO. Okay. 

Dr. BENISHEK. What is the story there? 

Mr. ENDERLE. Thank you, sir. 

We do recognize that we have some internal process issues. 

Claims come in, paper claims come in EDI. And most of the time, 

especially with inpatient claims, unauthorized claims, and Mill Bill 

claims, we must have the clinical documentation to adjudicate 

those claims. 

Dr. BENISHEK. Yes, we know that. But you apparently have 

them; you just don’t know where they are. Where are they? 


VACREP0180 with DISTILLER
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Mr. ENDERLE. Actually, when the clinical documentation comes 

in, we scan those claims into our Fee-Basis Claim System. Sometimes those claims are delivered directly to our file room. Those 

claims are subsequently again scanned in our VistA Imaging System. 

We acknowledge that we have had difficulty in pockets of the 

country where the processes aren’t, you might say, functioning 

seamlessly and timely. So we are addressing—— 

Dr. BENISHEK. 768 claims is a lot of claims. It is thousands of 

dollars, I am sure, for these folks here. 

I guess what I need and the problem that I always get with this 

is, can I have you be the one responsible for coming up with an answer of why these claims are gone? Who is going to take responsibility? 

The problem I have with VA is it is never anybody’s fault. There 

is nobody actually responsible, so—— 

Dr. MIGLIACCIO. I will take responsibility. 

Dr. BENISHEK. Well, then, what that means is that I want an answer to this 768-claim business. The administrative processes answer doesn’t really wash very well. 

Dr. MIGLIACCIO. Yes, sir. We will work with our community providers. If we can get the data, the details, we can start doing the 

research. 

Dr. BENISHEK. Well, I will expect an answer to that question 

within a month then. 

Now, the other question I have is, what do you think of this idea 

of having a third-party person do the claims thing? It seems like 

Medicare or Blue Cross does a much better job, adjudicating these 

claims, millions and millions of claims at a time. What do you 

think of VA contracting that service out? 

Dr. MIGLIACCIO. It is something to think about. We would certainly take a look at—we could do a cost-benefit analysis to see 

where it makes sense. 

Dr. BENISHEK. Yes, okay. All right. Appreciate that. 

Mr. Montes, do you think that would be a viable offer for VA, to 

have them contract that claims processing out to somebody that actually does it for a living? 

Mr. MONTES. Absolutely. I mean, we do it for the TRICARE 

claims through Humana, so some of our Active Duty, their claims 

are processed through a fiscal intermediary. So the precedent has 

really already been set. 

Dr. BENISHEK. All right. So there is an idea. 

I will yield now to Ms. Brownley. Thank you. 

Ms. BROWNLEY. Thank you, Mr. Chairman. 

Mr. Cook, I had a question for you. You mentioned VA inconsistency and the lack of criteria for selecting mobility dealers in your 

testimony. Can you elaborate a little bit more and explain what 

you mean by this? 

Mr. COOK. Sure. 

You know, right now, you and I could open a mobility business 

and register with the government. We just send our paperwork in, 

nobody looks at us, and we are a mobility dealer and we can do 

business with VA. 


VACREP0180 with DISTILLER
13 

And the handbook that VA is going off of, which I have in my 

hand, on the first page is dated October 30 of 2000. That is October 

30 of 2000. Several different administrations of both parties have 

been through, so it is not an issue there. Supposed to be updated 

by 2005. 

And we have met with VA, and because technology has changed 

in our industry, the nature of it, from being high-tech vehicles that 

are being produced now, there have to be some standards, so to 

know that the person has insurance, to know that the person has 

24-hour service, to know that the person providing has facilities 

that are even ADA-compliant. And these are things that VA does 

not ask for. 

And we have gone to VA and they say that is a good idea, but 

we are still here. 

Ms. BROWNLEY. So you have gone to VA; they have said it is a 

good idea. But we are now in 2015. We are operating under 2000 

standards that were supposed to be—or at least the handbook—updated by 2005? 

Mr. COOK. Correct. And when each year we go and we meet with 

them, they say, ‘‘Well, we are working on it. It will be the next 

year. We will have you something.’’ And it has just been, you know, 

a slow process. It is supposedly in the regulatory process at this 

point now. 

But, again, veterans are still being—have the potential to have 

unsafe vehicles out there that it not only affects the veteran, it affects all of us on the road. When you take a vehicle and you put 

a 300-pound wheelchair and a 200-pound lift on the back of a Toyota Prius, which happens, the vehicle’s rear end goes way down 

and the front end goes way up. We have all seen it at our local grocery stores. And that is an unsafe practice. 

Ms. BROWNLEY. So you could provide some evidence of dealers 

out there that are not modifying automobiles correctly for the veteran that could be quite dangerous for them rather than assisting 

them? 

Mr. COOK. Yes, ma’am. 

Ms. BROWNLEY. Thank you. 

And, Mr. Migliaccio, are you aware of this issue, that it has been 

15 years and VA still hasn’t updated the handbook? 

Dr. MIGLIACCIO. I am not aware of the issue about the handbook, 

but I am aware of the issue in terms of the durable medical equipment that VA purchases. 

Veterans Benefit Administration takes care of service-connected 

veterans, and I believe Mr. Cook alluded to that in his testimony. 

The non-service-connected veterans are handled by the VHA 

through our prosthetics program. 

We know that Mr. Cook and his team met with our staff at VHA 

about 3 weeks ago. We know there are no outstanding claims from 

the VHA side. We also know that, from a quality standpoint, in 

terms of the request for VA to endorse one association over another 

is something that many Federal agencies just aren’t in—it is not 

in our wheelhouse to do. So what I can say is that I understand 

the issues that Mr. Cook has, but within the VHA side and with 

our Business Office it is a little out of our wheelhouse. But we can 

certainly work with Mr. Cook. 


VACREP0180 with DISTILLER
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Ms. BROWNLEY. Thank you. 

And, Mr. Cook, do you agree that there are no outstanding 

claims? 

Mr. COOK. No, ma’am. There are—I have three right here of my 

own company. 9/25 of 2014 for $25,600. I have—there are millions 

of dollars right now that are past due nationwide. That is bizarre, 

to hear somebody say that there are not VA claims out there right 

now. 

Right now, the issue—the VBA goes through the prosthetics to 

handle the service-connected veteran. They administer the program. The service-connected vet is being taken care of by the prosthetics department, which then sends the bill back to the VBA for 

processing. So you have two different hands on the program, which 

makes it very confusing. 

So the prosthetics department approves it, sees it out, and then 

it goes back to the VBA for payment. So they are always pointing 

fingers at each other, saying, well, no, it is their fault; no, it is 

their fault, we have sent it in. The mobility dealer sends the invoice to the prosthetics department. They sign off on it, then send 

it to the VBA regional office for payment. 

Ms. BROWNLEY. Thank you very much. 

My time is over, and I yield back. 

Dr. BENISHEK. Dr. Huelskamp. 

Dr. HUELSKAMP. Thank you, Mr. Chairman. I appreciate the 

topic of this hearing. 

I have heard consistently concerns about a lack of prompt payment. I would like to ask the doctor from VA, can you describe how 

the Prompt Payment Act applies to VA and how quickly you are 

required under that act to make payments? 

Dr. MIGLIACCIO. Yes, sir. 

The Prompt Payment Act from 1982 states that Federal agencies 

have an obligation to pay timely, within 30 days, and there is a 

privity of contract between a Federal agency and a provider. 

In our case, we do pay interest on late claims. We pay those—— 

Dr. HUELSKAMP. Could you provide for the committee how much 

interest you paid on these claims in the last fiscal year? 

Dr. MIGLIACCIO. Last year, close to $200,000. 

Dr. HUELSKAMP. What is the interest rate you pay? 

Dr. MIGLIACCIO. Well, I would have to get back to you on that. 

Dr. HUELSKAMP. Okay. 

All right. What is the application of—or what is your expectation 

for prompt payment for those that are not payments that would not 

be covered under the Prompt Payment Act, noncontracted providers, which is where I hear those complaints at? How quickly do 

those get paid? 

Dr. MIGLIACCIO. Well, as I mentioned in testimony, we pay our 

claims right now within 22 days, clean claims. Claims that are 

pended, we—— 

Dr. HUELSKAMP. Twenty-two days of receipt of the claim or processing of the claim, scanning of the claim? What is the start of the 

claim with your statement? 

Dr. MIGLIACCIO. As soon as it is scanned into the system. 

Dr. HUELSKAMP. Okay. Well, that is a good point. 


VACREP0180 with DISTILLER
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I am looking here at a copy of a status report, or a response to 

a request for a status update from one VA facility. And they said, 

‘‘Please be aware’’—it is of January 1, 2015—‘‘there is a scanning 

backlog of approximately 90 to 120 days.’’ 

So, based on your statement, then, your definition, 22 days is 

after 120 days, perhaps, before the claim is even scanned in, and 

then the 22 days? Am I understanding that correctly? 

Mr. ENDERLE. If I may address that, sir, we did check into that 

issue. The large backlog with scanning that you are referencing is 

actually scanning of clinical documentation. It is not associated 

with scanning the claims. The claims are—— 

Dr. HUELSKAMP. Certainly you don’t process the claim without 

documentation. 

Mr. ENDERLE. The claims, if they are preapproved, authorized 

claims, outpatient services, we do not require the clinical documentation to process those claims for payment. So the outpatient, 

preauthorized claims, as long as it meets the authorization requirements, it is in our system. We process those claims. And those typically, as has been mentioned, are processed within 22 days. 

Dr. HUELSKAMP. So why would you send a provider—this is basically an excuse of why they have been waiting months to be paid. 

And, again, told them 90 to 120 days before you even start the 

claim. Is this because they are a noncontracted provider? Or what 

is the distinction between those two as far as you handle them? 

Mr. ENDERLE. Sir, we process the claims the same, whether it is 

contract or noncontract. They come in electronically, they come in 

paper, they are scanned. 

If the claims require clinical review and clinical documentation, 

that clinical documentation has to be scanned so that we can review it. We acknowledge that there is a backlog in scanning that 

clinical documentation. And you are absolutely right; it does impact 

the processing of those claims associated with the requirement of 

clinical documentation review. So we have—— 

Dr. HUELSKAMP. I am a little confused, Mr. Chairman. 

If you are not looking at documentation except in certain circumstances—so you are paying claims without documentation, 

even though we are hearing here you aren’t paying many claims 

on time at all—but you are saying—what percentage of claims do 

you pay with absolutely no documentation? You are scanning the 

documentation months after you pay the claim; is that what you 

are telling the committee? 

Mr. ENDERLE. At that one particular location, there is a backlog 

in scanning that clinical documentation. 

Dr. HUELSKAMP. So they paid thousands of claims with no documentation? 

Mr. ENDERLE. Outpatient, preauthorized services are paid without clinical documentation, that is correct. The only requirement of 

clinical documentation are for those claims that are—— 

Dr. HUELSKAMP. Why are you scanning them in 3 months later, 

4 months later, if you have already paid the claim? That is your 

claim for the committee. 

Mr. ENDERLE. Specific claims that require clinical documentation 

are inpatient claims, emergency outpatient claims, emergency inpatient claims. We require the clinical documentation to adjudicate 


VACREP0180 with DISTILLER
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the point of stability, if an emergency existed, and the length of 

stay that the veteran is in that particular hospital. 

Dr. HUELSKAMP. Well, your statement doesn’t match with what 

VA facility was saying. 

And I will enter this in for the record for the committee. 

Dr. HUELSKAMP. But, also, the entity was told to wait 60 days 

to even call in. I mean, is this actually occurring, that you are saying, ‘‘Well, don’t even call us for 60 days’’? Or when you call in— 

another example—when you call in, ‘‘We will only let you discuss 

four claims on the same call, and then we have to hang up on you.’’ 

Is that actually occurring? 

Mr. ENDERLE. That was occurring, sir. We acknowledge that, as 

we took over, with the implementation of the VACA law, we did go 

out to the sites, we met with sites, we did find situations like this. 

When we discovered these situations, we immediately stopped it. 

In this particular case, we did reach out to the site. We instructed the site that they are not to issue that document you are 

referencing again. And we implemented processes to ensure that 

when callers call in that they can resolve any issues of the claims 

that they have on hand. 

Dr. HUELSKAMP. I yield back, Mr. Chairman. 

Dr. BENISHEK. Thank you, Mr. Huelskamp. 

Mr. Takano. 

Mr. TAKANO. Thank you, Mr. Chairman. 

My first question for the panel, for anyone who wishes to answer 

it: The Choice Act has led to a lot of rapid change at VA, and I 

understand that claims for non-VA care have increased by 34 percent over this time last year, and VA has consolidated claims processing under the Chief Business Office. 

Has the late payment situation improved since the Choice program has been instituted? 

I guess, Dr. Migliaccio, you might want to answer that question. 

Dr. MIGLIACCIO. I will start. 

It has improved. We have brought together—when you centralize 

anything, it is going to take some time. And that process is behind 

us now, and what we are starting to see is some phenomenal traction, especially when you look at that we are processing clean 

claims within 22 days. And that—we are following the standards 

in the industry. 

Mr. TAKANO. And a clean claim is a prior-authorized claim? 

Dr. MIGLIACCIO. Yes, sir. 

Mr. TAKANO. Now, my colleague Mr. Huelskamp was asking a 

line of questions about the scanning that goes on with the medical 

documentation afterwards. Am I correct in—my understanding is, 

from listening to you, Mr. Enderle, that that scanning of claims or 

the documentation afterwards is for the non-clean claims. Is that 

right, or am I wrong? 

Mr. ENDERLE. Anytime that we receive claims associated with inpatient stays, emergency admissions to emergency rooms or emergency admissions, we require clinical documentations. 

In addition, if we receive a claim that has not been previously 

authorized, which is considered an unauthorized claim or a Millennium Health Care Act claim, in that scenario, we require the clinVerDate Aug 31 2005 10:03 Jul 26, 2016 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 C:\PDF\OUT\98641.TXT PAT

VACREP0180 with DISTILLER
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ical documentation so that we can adjudicate the claim and determine if we can pay the claim on behalf of the veteran. 

Mr. TAKANO. So for those first types of claims that you described 

earlier, those could be preauthorized. It is just that the inpatient 

hospital stays are of a different nature, and do you have to get the 

documentation, the medical documentation for that? 

Mr. ENDERLE. Yes, sir. They could be preauthorized, and that is 

what we of course encourage, is that when a veteran shows up at 

a non-VA facility, if they have an emergency, we encourage that 

non-VA facility to contact the closest VA so that we can 

preauthorize that claim. 

Mr. TAKANO. I mean, so the nonpreauthorized claims and these 

other types of claims you mentioned, how much of the delay is due 

to medical records being inoperable? I mean, you are dealing with 

a lot of non-VA providers who have different—I am assuming that 

all these records are coming in paper; that is why you have to scan 

them. Is that right? 

Mr. ENDERLE. That is correct. We try to work with the providers 

to provide them information on the best way to send those claims 

in. 

Mr. TAKANO. And, as I recall, some of the hesitancy of VA, when 

we were talking about moving toward non-VA care to address the 

backlog, was this concern about the interoperability of medical 

records with non-VA providers. I mean, that is what I recall. 

Is it reasonable to say that this is a significant part of the problem in terms of paying late claims? 

Mr. ENDERLE. Yes, sir, I agree. If we can receive the clinical documentation with the claim, we can expedite the processing of that 

claim. 

We also have a couple initiatives we are working on with working with providers themselves to turn that into an electronic access 

so we can access their system, pull down those clinical documents, 

so we do not have to mail the claims back and forth. 

Mr. TAKANO. Mr. Leist, you mentioned this issue of lost medical 

records. And it is lost paper records mainly; isn’t that right? 

Mr. LEIST. Yes, sir. Thank you for the question. 

Yes, it is lost paper records. But I have to reiterate that, when 

we send records to VA for processing, they are sent certified mail. 

So we know those records arrived. We are being told—— 

Mr. TAKANO. I don’t think the problem is that the—I mean, I 

think the problem is also in the manpower or the personnel it 

takes to scan those records. So they may receive them, but it 

sounds like the volume of medical records is also the issue. 

Is that true, Mr. Enderle? 

Mr. ENDERLE. That is correct. And in the particular location that 

Mr. Leist is referring to, we did identify significant issues at that 

location both with vacancies and the internal processes that they 

utilize to acknowledge and scan those documents. There was—— 

Mr. TAKANO. So you could see there were some significant administrative snafus at that particular site? 

Mr. ENDERLE. At that particular site, that is correct. It is not a 

problem that we experience—— 

Mr. TAKANO. Mr. Leist, do you have something more to add? 


VACREP0180 with DISTILLER
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Mr. LEIST. Mr. Takano, I appreciate the comment. We would— 

I will speak for my hospital. Hopefully the other hospitals that are 

represented by the American Hospital Association would say the 

same thing. We would welcome electronic transmission of records 

to VA. We would be very interested —— 

Mr. TAKANO. I am very interested in trying to facilitate that. And 

if we can get the funding—I don’t recall if we ever inserted that 

into the Choice Act. But that is a high priority of my office, is to 

facilitate—I think non-VA care would be highly facilitated between—if we were to get this interoperability to work with all 

those providers. 

Dr. BENISHEK. Thank you. 

Dr. Wenstrup, you are recognized. 

Dr. WENSTRUP. Thank you, Mr. Chairman. I appreciate it. 

Dr. Migliaccio, one question I have is, where is your predecessor 

now? Still working within VA? 

Dr. MIGLIACCIO. No. I believe she retired, sir. 

Dr. WENSTRUP. Okay. Because there has been a pattern here 

that we get new people when there have been issues that have 

been difficult. And so I am wondering if there is a reason for that, 

that you get somewhat thrown to the wolves in this situation, but 

we get somebody that has only been there 4 weeks to have to answer all these questions. It makes it difficult for us and certainly 

for you, as well. But it is a pattern that we have seen. 

My next question is going to claims that were submitted and 

signed for and what is the process for tracking down the person 

that signed for that claim that came in and trying to find that 

claim. Because they get a card back that tells them who signed it. 

So do you have a process in place of trying to track down the person that signed for the claim that seems to be missing? 

Mr. ENDERLE. The claims are typically received in the main mailroom at the facility. When those claims do come in at the mailroom, that is typically when those are signed by certified mail. 

They are subsequently then delivered to the non-VA care payment office, where they are scanned into our doc manager system. 

Or if the mailroom for whatever reason believes those medical 

records should be sent directly to the medical record file room, they 

may be scanned into what we call VistA Imaging. 

So we have identified an internal problem with that process, and 

we are attempting to fix that issue. 

Dr. WENSTRUP. Yes, I would suggest that the person at the mailroom that signed for that gets a signature for who they turned it 

over to so there is some level of responsibility here, rather than 

blaming a computer glitch or a scanner that didn’t work. Then you 

might be able to actually track these claims. And that is a large 

number of claims that were signed for and lost. 

My last question is to you again, Doctor. Would you be in favor 

of accepting bids right now from an outside source to process their 

claims? 

You talk about increasing the technology to do electronic claims. 

There are a lot of people that are already doing it and doing it successfully. And these gentlemen will tell you that, because they submit those claims and they get their payment. 


VACREP0180 with DISTILLER
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So will you take the lead for us on getting some bids? That 

shouldn’t cost us anything. And maybe we can start to begin to assess whether this would be a good business move for everyone involved. 

Dr. MIGLIACCIO. We currently have a request for information on 

the street right now to look at a new system. 

In terms of contracting out the entire process, we could certainly 

do the cost-benefit analysis and see what makes sense. 

Dr. WENSTRUP. Well, I think that would be part of it. You know, 

you talk about the cost of a new system. How about the cost of outsourcing it and actually getting the job done? I think that is a component that we need to look at if we are going to make a good, wise 

business decision that helps not only our providers but our patients. 

So I would hope that at our next meeting we have some of those 

numbers that maybe some of the outside sources give us a bid on 

that. And I would appreciate that. 

Dr. MIGLIACCIO. Thank you, sir. 

Dr. WENSTRUP. Thank you. 

And I yield back. 

Dr. BENISHEK. Thank you. 

Ms. Kuster, you are recognized. 

Ms. KUSTER. Thank you, Chairman Benishek. 

And thank you to all of you for providing services to our veterans. We are grateful for that. 

I think I want to follow up on the line of questioning my colleague Mr. Takano started. But, also, just to comment on this approach of a third-party vendor, I am not opposed to that; I just 

don’t know that that is going to solve the problem unless we solve 

the issue of the electronic records. 

And I think where this seems to be headed is that the backlog— 

it is not a question of who signs for it in the mailroom. It is a question of you are ending up with boxes and boxes and boxes of medical records that aren’t getting into the system in a timely way. 

So I want to follow up on that issue of electronic records. And 

if I could start with you, Mr. Leist, in the private sector, when you 

are dealing with a claims processing, how do you transfer the 

records? And just walk us through what that process looks like. I 

am going to assume it is not reams of paper records. 

Mr. LEIST. Thank you for the question. 

First, I would like to comment a little bit on the entire process 

of submitting a claim. I have found, as I have compared the 

preauthorization process for patients with VA system and according to the commercial processes, VA system is extremely cumbersome. And, often, as reported in a recent document that was 

submitted to this committee, it requires the signature of a department head in the area where this particular procedure would be 

performed. 

Also, there are many issues I would like to address with the Veterans Choice Program. 

But, to answer your question, we submit claims electronically to 

many commercial providers. They pay us in a timely manner. If 

there are claims that are not supported by documentation, we can 

address those immediately and resubmit those documents. The 


VACREP0180 with DISTILLER
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communication between our hospital and commercial providers is 

open, it is active. We are not limited to the number of cases we can 

address over a phone call. Their claims processing people are available to us, which has heretofore been very different with VA system. 

Ms. KUSTER. Well, I think we have an opportunity here. We have 

a Secretary that comes from the private sector. He is looking to 

make these kinds of changes. 

And I think we can find bipartisan support to get us to the place 

where we can meet that standard. And it sounds to me, from the 

testimony from our VA representatives, that on the preauthorized 

claims we are getting close to that commercial standard, that the 

complication here is on the other types of claims—emergency room, 

inpatient, et cetera. 

So I will cut my questions short, because I just would like to 

work with you all going forward to get us to this commercial standard. I think this is reminiscent—I am in my second term, but when 

we first got here and started having hearings about literally warehouses collapsing under the weight of paper records that were 

being kept in boxes Lord knows where—and I think what we have 

to do is try to get VA to the 21st century. And this is a clearly a 

place where there is room for improvement. 

I would like to work with VA and with my colleagues on the 

other side of the aisle to get us to that commercial standard so 

that, number one, our veterans are served best and foremost; number two, our small businesses are paid in a timely way to be vendors to our government and to our veterans; and, number three, 

the taxpayers are served. Because this particular system doesn’t 

seem to be working for any of those three. 

So thank you for your patience, and we will look to work with 

VA to move forward on this. 

Thank you, Mr. Chair. 

Dr. BENISHEK. Thank you, Ms. Kuster. 

Mr. Coffman. 

Mr. COFFMAN. Thank you, Mr. Chairman. 

Well, there is just a pattern here where I bet you 3 years from 

now we will be holding the same hearing with the same results, 

and the only difference is there will be a new director who will 

have been there for 4 weeks. He will be here, and he will be telling 

the same thing that you are telling us. 

And when you have a culture that is so inbred where bad people 

can’t be fired, where the good people that fundamentally care about 

serving our Nation’s veterans become whistleblowers and they are 

retaliated against by the system, and the only people that come before this committee to represent the Veterans Administration are 

the get-along, go-along folks that are just good at answering questions but they are not good at doing anything—and so, you know, 

there is one solution here, and that is to outsource it by the people 

that professionally do this. 

I am a retired military person. I am in TRICARE. And TRICARE 

uses third-party payers that efficiently, you know, reimburse providers. And so it is not being done by VA, and I can’t imagine that 

it will be done, but we will make changes on the margins, I hope, 

and, I guess, that is considered progress here in Washington, DC 


VACREP0180 with DISTILLER
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So, Mr. Migliaccio, there is a company in my district, AMR, American Medical Response, and I think they were owed $10 million. Now the number is up to $12 million over 90 days. I understand you are having—at least there are phone conferences with 

them on a routine basis. But what plan would you suggest to provide AMR with some resolution to their backlog of claims at VA? 

Dr. MIGLIACCIO. Thanks for the question. 

Sir, for the record, I wanted to state also, I am a retired uniformed officer, too, Air Force and Public Health Service, so I get 

TRICARE also. 

And we will take a look at this, but I have to tell you—— 

Mr. COFFMAN. Well, we are both lucky. 

Dr. MIGLIACCIO [continbuing]. We are going to get this done. 

That is why I came here. I came from Health and Human Services. 

So I chose this path to be here to make a difference. 

Mr. COFFMAN. Well, I hope so. 

Dr. MIGLIACCIO. Yes, sir. But we have been having conversations 

with AMR, and I am going to let Joe handle it because he’s been 

closer to it and also done some visits on site. 

Mr. ENDERLE. Thank you for the question. 

In response to the question, the ambulance reimbursement process is very complicated. It also falls under different authorities and 

regulations. We authorize ambulance transports, which falls under 

Beneficiary Travel. And the ambulance transports that are taken 

care of in Purchased Care are those transports that are associated 

with unauthorized and Millennium Health Care Act claims. Because of that, we have to meet the regulatory requirements. We review those claims, we review the clinical documentation, and then 

we must make a determination whether we can pay those ambulance claims. 

Believe me, we would like to pay all the ambulance claims for 

all veterans, because we do appreciate the fact that they are transporting our veterans and taking care of them. But, as mentioned 

earlier in the testimony, not all veterans meet all the eligibility requirements, and in order to make that determination, we have to 

do a clinical and administrative review. 

Many of the veterans are not eligible under unauthorized claims 

or service-connected veterans or non-service-connected to veterans 

who have no means to pay. But we take extra steps to ensure that 

those veterans’ claims are reviewed thoroughly to make sure that 

if they do meet all the eligibility and regulatory requirements that 

we can pay those claims on their behalf. 

Mr. COFFMAN. Yes. And how can this problem be resolved so that 

the claims for veterans’ ambulance service are not held hostage, 

waiting for records that are completely outside the control of ambulance service personnel? 

Mr. ENDERLE. We recently reviewed the processes associated 

with unauthorized and Millennium Health Care Act claims. Staff 

in the field have been informed that they could use the ambulance 

report. If they can determine it meets, you know, the stipulation 

that it was an emergency for a layman’s interpretation and the 

clinical documentation on the ambulance report is sufficient, we 

are not requiring the facility clinical documentation to adjudicate 

those claims. So we have made a change in that process. 


VACREP0180 with DISTILLER
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Mr. COFFMAN. And, Mr. Montes, what type of excuses other than 

the ones that you discuss in your testimony are commonly heard 

from VISNs when they are asked about past-due ambulance 

claims? And, with your work directly with VA, have they given you 

any idea or ideas on how they plan to resolve them? 

Mr. MONTES. So there is a twofold issue. 

One is those transports that are done under contract with VA, 

so they are more authorized. And when you are actually speaking—usually there is just one individual at that local facility that 

is doing them. So if something happens or they go on FMLA, a lot 

of times the processing just stops until they come back. 

If it is unauthorized or it is going through the Fee Basis unit for 

payment, we have heard every excuse. There is not enough time, 

or there are too many claims; we don’t have enough people to process those claims. They don’t call you back. They are taking a lot 

of effort to try to allow you to do more than four claims to check, 

but it is just—it is an insurmountable—or it is the wrong VA, you 

need to send it to another VA, this VA doesn’t provide 911 service. 

So the emergency benefit of it is one issue. The nonemergent or 

the transports that are actually originating out of VA facility is 

typically under authorized care, and that is a different issue in 

itself. 

Mr. COFFMAN. Thank you, Mr. Chairman. I yield back. 

Dr. BENISHEK. Thank you, Mr. Coffman. 

Dr. Ruiz, you are recognized. 

Dr. RUIZ. Thank you, Chairman Benishek and Ranking Member 

Brownley, for holding this hearing. 

And thank you to the panelists for your participation. 

Last Congress, I was proud to come together with committee 

members in both chambers to streamline VA’s payment processing 

systems. As VA implements this centralized processing and payment system for all VA fee-basis care, we must ensure that the 

focus remain on the veterans, that inefficient reimbursement does 

not hamper veterans’ access to services, make it harder for veterans to seek answers from VA, or expose veterans to financial 

harm. In this vein, VA must make certain that veterans are held 

harmless from any problems the agency has paying its bills, which 

are certainly no fault of our veterans. 

A Vietnam veteran in my district, a good friend of mine, who has 

been approved to obtain 100-percent fee-basis care for more than 

a decade, still reports frequent delays in VA payments to his providers. When unpaid by VA, these bills go to collection agencies, 

which can damage the veteran’s credit rating and expose the veteran to stressful harassment from collection agencies and to financial harm. 

So, Mr. Migliaccio, in the interest of preventing veterans from 

enduring similar struggles, what safeguards are in place to prevent 

veterans from incurring financial harm, poor credit ratings because 

of delayed VA reimbursements to fee-basis care providers? 

Dr. MIGLIACCIO. Thanks. I will start. 

We want to put some systems in place so it doesn’t get to where 

the veteran is harmed at all. So we want to start from the front 

end, and that is in terms of developing really a solid system. And 

I won’t get into this now to take the time, but I am going to focus 


VACREP0180 with DISTILLER
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on our people, and we are going to focus on business processes, and 

I want to look at technology, also, so we can prevent this from getting to our veterans. 

Dr. RUIZ. Okay. So, in other words, you are going to prevent it 

by improving—— 

Dr. MIGLIACCIO. Yes, sir. 

Mr. RUIZ [continuing]. Your reimbursements. 

However, you have hundreds, if not hundreds of thousands, of 

veterans out there who already have poor credit ratings because of 

VA’s fault and no fault of their own. So what are you going to do 

about them? 

Dr. MIGLIACCIO. Well, I have looked at the issue, and I have 

looked at the information that we have provided back to your office. 

I don’t know if it is—the extent of the issue is there. It is not as 

severe as we think because our relationship is really with the provider. And if a provider—— 

Dr. RUIZ. Time out, time out, time out. 

Dr. MIGLIACCIO. Yes, sir. 

Dr. RUIZ. When you say it is not as severe as you think, now, 

I know that you are thinking as an epidemiologist, and you are 

looking at the big picture, and it is systemic-wide. But for one veteran whose credit rating makes it a matter of whether he can pay 

rent or not, it is severe. 

Dr. MIGLIACCIO. Yes, sir. 

Dr. RUIZ. So, for those veterans, whether it is 1, 2, 10, 20, who 

are barely making ends meet, if you are not paying their bills and 

they are getting poor credit ratings, they could be evicted, and then 

you have just increased your homeless veteran problem, right? So 

what mechanisms can you do to remedy that poor credit rating? 

Dr. MIGLIACCIO. Well, one veteran being affected is one too 

many. We have some situations in place right now. We will go on 

behalf and work with our veterans. If this situation arises, we will 

work with the providers that sent the bills so we can adjudicate 

those claims quickly and check that out. We also will write letters 

to credit agencies to clear up credit reports for our veterans—— 

Dr. RUIZ. Okay. So I would like you to commit to working with 

this one veteran so that we can use that as a case study and you 

can demonstrate what you can do not only for this veteran, for the 

other veterans. 

The other issue that I want to touch on is that I am very concerned about what just transpired here. Mr. Cook said that there 

are millions, if not billions, of dollars left unpaid, and, prior to that, 

you had said that there are no outstanding claims. So there are 

some serious discrepancies between what Mr. Cook said and what 

you are saying. 

So if you don’t identify a problem, you are not even going to attempt to fix it. So if there are—and he can show you examples of 

late payments. So what are you going to commit to do to remedy 

and rectify this discrepancy? 

Dr. MIGLIACCIO. Well, I will definitely work with Mr. Cook, and 

I will ask for the information that he has brought forward, and we 

will see how we can work. 

I did my research with the Veterans Health Administration to 

ensure that there were no outstanding claims there. If there are, 


VACREP0180 with DISTILLER
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I would like to take a look at them, because we are going to fix 

that. 

Dr. RUIZ. Okay. I will follow up with you and with Mr. Cook to 

make sure that these different examples are handled in a timely 

fashion so that we can get an example and maybe build some trust 

with our new Administrator here that he can demonstrate to us 

that things may change. 

So this is going to be a trust exercise between you and this committee. 

Dr. MIGLIACCIO. Thank you. 

Dr. RUIZ. Is that okay? 

Dr. MIGLIACCIO. I am on. 

Dr. RUIZ. Okay. 

I yield back my time. 

Dr. BENISHEK. Good. Nice job. 

Dr. Abraham. 

Dr. ABRAHAM. Thank you, Mr. Chairman. 

Well, certainly, we have two gentlemen that do business in my 

State of Louisiana. And I appreciate the testimony of the three of 

you, because, as Dr. Benishek alluded to his opening statement, it 

takes moral courage to be here because of the retaliatory that VA 

may or may not do. So, again, I appreciate you three gentlemen 

being here. 

Mr. Montes, you said that—and Mr. Leist—that you all had sent 

certified mail and they were signed for. 

Mr. Enderle, you are telling me you are 120 days behind on scanning, which is fine, I guess, in a way. But the claims that Mr. 

Montes and Mr. Leist are talking about are far more than 120 

days, so hopefully they have been scanned in. But Mr. Montes says 

that he checked today with his office and there is still no record 

of those 768 claims. So I suggest that maybe VA has a HIPAA compliance issue also here, because you are responsible now for those 

medical records. 

I guess my question—Mr. Montes, let me ask you first. Based 

upon VA’s written testimony, they indicate that many providers 

submit duplicate claims. Can you explain why this may be occurring? 

Mr. MONTES. And this is from experience that we have regarding 

the duplicate claims. 

There are a lot of times that you can actually submit—and some 

of the veterans’ claims you can actually submit electronically, either through a clearinghouse—they let you know you can send 

through a clearinghouse, but they will need the medical records, so 

you will have to send a paper record along with it. So, in our opinion, when we are actually doing the audit and we see that there 

is a mass amount of duplicate claims that we are getting, that that 

probably has something to do with it. 

The second thing is, especially with an authorized claim that we 

are under contract with VA, a lot of times they want us to send 

that via email to that contracting officer so they can first approve 

the claim before you submit it into their electronic system, which 

is the OB10 system. And then at that point in time is when the 

clock really starts. 


VACREP0180 with DISTILLER
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So it is—I mean, just to kind of give you an update on that, there 

is a lot of that practice happening with the contracting officer at 

the local VA. When you are contracted, it is: Send us the claims 

first, let us review them to make sure everything is correct, then 

put them into the OB10 system. So then the clock actually starts 

at that point from the Prompt Pay Act provision. 

So there is probably a dual thing going there, Congressman. 

Dr. ABRAHAM. Okay. 

And a quick followup to that, and I will get to Mr. Enderle. 

You indicated, Mr. Montes, in your statement that your accounts 

receivables have doubled since 2014. Can you give me some numbers? 

Mr. MONTES. Absolutely. 

Probably about 2-1/2 years ago, when we actually started this 

process, we were at about $1.2 million in aging receivables in 180 

days. And we worked diligently with VA, with our local VISNs. We 

actually got it down the end of last year, around September, October, to about $500,000 over 180 days. And we were doing high-fives 

and having champagne because that was exciting. 

But ever since October, it has now doubled. We are back at about 

$1.8 million now. 

Dr. ABRAHAM. Thank you. 

Mr. Enderle and Doctor, I will ask you these questions. You stated that the delay sometimes in processing is caused by the 

preauthorization process. Now, I have been on the doctor end of it, 

and I know that if a claim is not preauthorized it is usually not 

paid. 

And what these gentlemen here are telling us is sometimes they 

are having to stay on the phone minutes, if not hours, just to get 

a preauthorization. And I can assure you, there are many, many 

times, probably the majority of the times, that you can’t wait to get 

a preauthorization on a CT, MRI, or something of that nature but 

you have to take care of that patient. 

Is preauthorization required for 911 claims? 

Mr. Enderle, I will ask you that question. 

Mr. ENDERLE. Thank you for the question, sir. Could you—I 

didn’t hear the last part of your question. 

Mr. ABRAHAM. Well, is preauthorization required for 911 claims? 

Mr. ENDERLE. For 911 claims, where they call the emergency 

room, the veteran would—it depends. If there is a contract in place 

and the veteran meets the eligibility—— 

Dr. ABRAHAM. All right, let’s get past that. But you are saying 

the answer is, then, at least some are needed to be 

preauthorized—— 

Mr. ENDERLE. Yes, sir. 

Dr. ABRAHAM. Okay. Well, that negates the purpose of a 911 call 

to begin with. If you have to go through the preauthorization contract, to get on the phone, reach somebody that may or may not 

give you an answer, that you may wait 20 to 30 to an hour long, 

that negates the definition of ‘‘emergent.’’ 

Mr. ENDERLE. If we are talking about an inpatient stay, however, 

they do have 72 hours to contact the local VA facility. 


VACREP0180 with DISTILLER
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Dr. ABRAHAM. Yes, but no inpatients are 911 calls. These are 

outpatients that are having a heart attack or a stroke or some 

issue like that. 

I am out of time, Mr. Chairman. I yield back. Thank you. 

Dr. BENISHEK. Thank you, Dr. Abraham. 

Well, I still have one more question I want to ask. And I think, 

since we have one panel, if others would like to ask questions, then 

we will try to give people an opportunity to do that. 

There are so many things that I want to get at. One thing here 

that came up in some written testimony. Apparently, AMR, American Medical Response, referenced $12 million in backlogged ambulance claims. Mr. Boustany from Louisiana mentioned $878 million 

in emergency care claims. 

[THE PREPARED STATEMENT OF HON. CHARLES W. BOUSTANY APPEARS IN THE APPENDIX] 

Dr. BENISHEK. And a statement for the record by AMR said, ‘‘We 

are often told that VISNs are out of funds appropriated for ambulance services in their budgets and we will have to wait until the 

next fiscal year to be paid for our claim.’’ This can occur as early 

as the first quarter of the year. 

Dr. Migliaccio or Mr. Enderle, how much money is currently 

available in VA’s non-VA care fund? 

Mr. ENDERLE. The specific—— 

Dr. BENISHEK. Some people are being told that there is no money 

in their budget to pay the ambulance; you will have to wait till 

next year. 

Mr. ENDERLE. Actually, that is a great question. 

Dr. BENISHEK. So I am trying to figure out what is the story with 

that? 

Mr. ENDERLE. Yes, sir. Whenever a claim is authorized, the obligation for the funds to pay for that authorization is obligated up 

front. There should be funds available to pay those claims. 

Dr. BENISHEK. So you don’t have any idea how much money 

there is available in VA’s non-VA care fund? 

Mr. ENDERLE. It is substantial. 

Dr. BENISHEK. Can you just get me that number in the next 

month? 

Mr. ENDERLE. Yes, sir. 

Dr. BENISHEK. All right. Thank you. 

The other question I want to ask is that, Mr. Montes, there was 

this meeting, apparently, in August of 2014, where AMR—and VA 

officials addressed some of the backlog issues. You guys had a conversation about how things were going to get better, and we are 

going to work on things, and you made some recommendations and 

offers for collaboration and problem-solving. 

Did anything happen after that meeting and collaboration? Did 

things improve? That is what the whole process we are trying to 

figure out today is, can VA learn from you guys and make things 

better. What has happened since then? 

Mr. MONTES. So this was a collaboration with American Medical 

Response and Acadian Ambulance Service when we met in Atlanta, 

Georgia, with the national VA facilities as well as several representatives from the VISNs. It actually got probably a little better. 


VACREP0180 with DISTILLER
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They started actually having phone calls. They were trying to research, try to figure what things happened. 

But whenever VA Choice Act was implemented, things just started to break down at that point. And my colleagues at American 

Medical Response, even with their phone calls that they were having every other week, it just seemed it was the same information 

being given back to them. 

Dr. BENISHEK. Rehashed. 

Mr. MONTES. So it started off good. It started off as a partnership. And then it just kind of became one-sided at that point, because then there was just a lot of inaction. 

Dr. BENISHEK. Right. Right. That is the problem we have. 

Ms. Brownley, do you have a question? 

Ms. BROWNLEY. I do. Thank you, Mr. Chairman. 

It was said earlier, I think by Mr. Migliaccio, that you have paid 

$200,000 worth of late interest payments. Was that within the last 

year or within the last couple of years? 

Dr. MIGLIACCIO. Last fiscal year. 

Ms. BROWNLEY. This fiscal year? 

Dr. MIGLIACCIO. This fiscal year. 

Ms. BROWNLEY. So I just wanted to ask the other panelists if you 

have received late interest payments on any of the bills that have 

been resolved with you. 

Mr. COOK. I don’t believe so. I don’t know that there is a process. 

You know, once the form that is sent in for the adaptive equipment 

on there, it is what the total is. You don’t want to restart the process again to go back and add interest. 

Ms. BROWNLEY. Yes. 

Mr. COOK. So I don’t know that our members know how. 

I would like to clarify something that VA said about NGO-certified programs. They do have those with service animals right 

now. They do this on anything that VA doesn’t have specialty, that 

are specialized industries, like ours. And we did not—sure, we 

would like for them to endorse our QAP program, quality assurance program, but we had just asked for basic criteria. We will settle for that. 

Ms. BROWNLEY. And I hear you on that and also believe that 

something absolutely needs to be done. 

Any late interest payments that you have received, Mr. Leist? 

Mr. LEIST. Thank you for the question. No, we have not received 

any late interest payments at all. 

But I want to take just a moment to clarify something I had in 

my testimony. I had stated that our hospital had decided not to 

contract with the Veterans Choice Program. And the reason we had 

done that was because we are not in the position, a small hospital 

in northern Arkansas, to contract for additional bad debt. In other 

words—and I want to state clearly that if the process improves we 

will contract to do those services. 

But I also want to say that we will never turn away a veteran 

in our facility for any reason. So, until this gets resolved, we will 

continue taking care of those veterans, without question. 

Ms. BROWNLEY. Well, thank you for that, Mr. Leist. 

Mr. Montes. 


VACREP0180 with DISTILLER
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Mr. MONTES. The main issue is with the Millennium bill and 

with the unauthorized care to the emergency—when you look at it, 

our company actually did an estimation for fiscal year—— 

Ms. BROWNLEY. I was just wondering if you had received any interest—— 

Mr. MONTES. No, we have not. 

Ms. BROWNLEY [continuing]. Late interest payments. 

Mr. MONTES. No, ma’am. 

Ms. BROWNLEY. Thank you. Thank you. 

Dr. Migliaccio, so who do you report to exactly? 

Dr. MIGLIACCIO. I report to the Chief Business Officer. 

Ms. BROWNLEY. To the Chief Business Officer. So is he, you 

know, the person who is ultimately responsible for all of these 

issues? 

Dr. MIGLIACCIO. Well, the Chief Business Office reports up to the 

leadership over at VHA. 

Ms. BROWNLEY. So the Chief Business Officer reports to the Secretary? 

Dr. MIGLIACCIO. No, reports to one of the under secretaries. 

Ms. BROWNLEY. To one of the under secretaries. Okay. 

So do you have some sense—well, let me go back on the interest payment thing. So, if you are saying $200,000 of late interest payments for this fiscal year, I don’t know what the formula is for late 

interest, but, you know, what is the common denominator here? So 

how much of outstanding or late payments have there—I mean, 

what is the number for that? So is it a million dollars? So you have 

$200,000 of late payments. Can you give me a sense of that? 

Dr. MIGLIACCIO. Without—I really will have to get back with you 

on that. I don’t know the interest rate and what it was based on. 

Mr. ENDERLE. If I could supplement his comments, the interest 

payments are paid when the payment goes through the system. So, 

on the back end, when FMS cuts the check, if it is a contract payment, and only if it is a contract payment, would interest be applied, because we have a contract in place. 

Ms. BROWNLEY. Okay. But I am just saying, if there are late pay- ments of $200,000, it is based on, you know, late payment to vendors and the contracts that you have, and I am looking for what 

that number is. Because, based on the testimony we have heard so 

far, it seems like, you know, it is millions and billions of dollars, 

and the $200,000 late payment just doesn’t add up for me. So I am 

just trying to sort of reconcile that. 

Dr. Migliaccio, so, you know, you are new, and we recognize that 

it is hard to come into a new position in 4 months and truly get 

your arms wrapped around, you know, all of the problems and how 

to resolve it. And I think it takes a little bit more time than that. 

But, you know, I am just curious, you know, to hear from you 

when you think you will get your arms wrapped around the whole 

problem and when you would be able to present, you know, a full 

plan to the committee and a timeframe of which you see success 

down the road. So can you give me just a little bit of a sense of 

that? 

Dr. MIGLIACCIO. Well, in my—thanks for the question. 

I mentioned before that I am framing the assessment that I am 

doing right now in the new position looking at our people, I am 


VACREP0180 with DISTILLER
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looking at all of our processes, and I am looking at technology. I 

have kind of defined where are the areas that I want to look at, 

and claims is number one. Number two on my list is the Choice 

Program, and I want to work with PC3—— 

Ms. BROWNLEY. Do you have a sense of how many more people 

you need to hire? 

Dr. MIGLIACCIO. Yes. When we onboarded—we onboarded about 

2,000 positions we received for the transfer from our VISN and 

medical centers. It was really 1,982. We only have—— 

Ms. BROWNLEY. Those were unfilled positions? 

Dr. MIGLIACCIO. No. Those are—those are the positions that 

came over. Not all the bodies were in those positions. So, currently, 

we have around 220 vacancies. 

And I think, once we can get our staff hired, trained, and motivated on the work that we have in front of us, it is a very missiondriven organization—— 

Ms. BROWNLEY. So how long would that take, to hire 220 people? 

Dr. MIGLIACCIO. Well, I am a little fast on how I approach an organization, so I would like to see it done yesterday. But I think it 

is going to have to take us a minimum of 3 months, working 

through the personnel system, to bring people on board. 

Ms. BROWNLEY. So you believe by 3 months, though, you would 

be able to hire 220. 

Dr. MIGLIACCIO. That is a goal. And I hope it is not a stretch 

goal. 

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

Dr. BENISHEK. Thank you. 

Dr. Huelskamp, do you have any more questions? 

Dr. HUELSKAMP. I do, Mr. Chairman. I wanted to follow up on 

an earlier issue and try to understand the distinction from the gentleman from VA, as far as authorized and unauthorized care. 

Oncology, cancer care, is that generally preauthorized, or it is 

after the fact? Because the instance that has been shared with VA 

over a month ago that we are talking about, that was for cancer 

care. 

Dr. MIGLIACCIO. Well, I will let Joe handle this. But if it is—if 

VA is going to send a veteran out from one of the medical centers 

into the community for care, we are going to get a preauthorization 

and make that appointment. 

Dr. HUELSKAMP. I would hope so. 

Dr. MIGLIACCIO. Yes, sir. 

Dr. HUELSKAMP. But, again, this is—then, in that case, as I 

would anticipate, it is preauthorized, and we are still waiting back 

on the 120 days to scan the claim. And so—but that was always 

for unauthorized care. 

So do you know—I mean, you have had this complaint from us 

for a month. I would presume it is preauthorized, then. 

Mr. ENDERLE. If it is the oncology—— 

Dr. HUELSKAMP. Yes, sir. 

Mr. ENDERLE [continuing]. It would be preauthorized, yes, sir. 

And that claim for outpatient services should be paid without any 

requirement for clinical documentation. 

However, the clinical documents that there is a delay in scanning 

at this location, we are working with the local VA medical center 


VACREP0180 with DISTILLER
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medical records department to make sure that we—and, in fact, we 

have moved some of our staff over there to assist them with scanning that clinical documentation to catch up with that backlog. 

Dr. HUELSKAMP. That is what is confusing me. It is 

preauthorized, so scanning has nothing to do with it, the scanning 

delay. But that is what you told the oncology folks, that that is the 

reason. So that was inaccurate, then? 

Mr. ENDERLE. Based on what I saw in that document, that would 

be inaccurate. 

Dr. HUELSKAMP. Okay. 

Mr. ENDERLE. They should be able to process the claim for a 

preauthorized claim without clinical documentation if it was for 

outpatient services. 

Dr. HUELSKAMP. Okay. Well, we sent the issue to you weeks ago, 

and I don’t know if you ever scanned in our email to you about it, 

but maybe that is the problem, as well. So we are still waiting for 

you to respond, to respond to them, and still maintaining with 

them somehow it is a scanning issue, but it clearly is not, then. 

So how soon will you have an answer for making certain these 

veterans can still go to preauthorized oncology care without having 

to get in a vehicle and driving a long ways? So when will we get 

an answer for them? 

Mr. ENDERLE. From what I understand, the answer to your inquiry is going through concurrence at this time. 

Dr. HUELSKAMP. Describe ‘‘concurrence.’’ 

Mr. ENDERLE. Concurrence, our leadership concurrence. Once the 

response is concurred on, it will be sent to you. 

Dr. HUELSKAMP. Okay. Describe that. Who is concurring in this? 

Mr. ENDERLE. We draft the response to your inquiry; then it is 

routed through concurrence and released. 

Dr. HUELSKAMP. The real issue, when will they get paid for helping the veterans and providing the care that you preauthorized? 

Mr. ENDERLE. The paid part should have already been processed. 

In other words, if they already invoiced us for the oncology care, 

we received an EDI claim. That claim should have been processed 

and paid already—within 22 days, on average. 

Dr. HUELSKAMP. Okay. It has not. I mean, that is my question. 

Mr. ENDERLE. Okay. 

Dr. HUELSKAMP. It has been more than 22 days since we contacted you about that. So you should be paying interest, significant 

amounts of interest, on that. 

But, clearly, you don’t know. It hasn’t been paid that we know 

of. 

Mr. ENDERLE. We need to look into it to see what the status of 

that claim is, sir. 

Dr. HUELSKAMP. Okay. 

And another issue, just trying to clarify and understand the process. I have another issue with a doctor of chiropractic, that you 

called him and said, hey, would you treat this patient for us? So 

I presume it is preauthorized. 

Mr. ENDERLE. Yes, sir. 

Dr. HUELSKAMP. So, again, it is not a scanning issue. 


VACREP0180 with DISTILLER
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They started treatments in September and still waiting. You 

called him, said, hey, can you take care of him because it is a long 

ways from Wichita. 

So is this the case, again, that—not a scanning issue—it simply 

is a payment problem in this whole section of preauthorized care? 

Mr. ENDERLE. It sounds to me that that is a payment problem, 

yes, sir. 

Dr. HUELSKAMP. Okay. 

Thank you, Mr. Chairman. 

Dr. BENISHEK. Mr. Coffman. 

Dr. Abraham, any questions? 

Dr. ABRAHAM. Yes. Thank you, Mr. Chairman. 

The three witnesses from the private sector, I am assuming, with 

your testimony, that the fiscal intermediary such as Medicare and 

the tracker used would be certainly better than this system that 

we have now. Would that be a statement we could agree with? 

Mr. LEIST. Yes, sir. 

Dr. ABRAHAM. Okay. 

And I will go to you, Doc and Mr. Enderle, that we understand, 

and I have no doubt, personally, that your heart and mind is in the 

right place for our veterans. I think everybody in this room and on 

this panel agree. But, again, we are dealing with government bureaucracy. And I won’t be quite as nice, I guess, as Ms. Brownley 

as far as giving you guys time to hire. Why not take the $200,000 on interest—and we know in this 

room it is going to be a lot more once that back money comes in— 

pay all the claims, and then go back to the providers on the unclaimed claims and maybe let them reimburse you? 

We are talking about veterans that are getting—I have a list 

here of veterans that are having negative credit ratings. I would 

imagine—and you can correct me, Mr. Enderle, if I am wrong—that 

the number of veterans that don’t qualify for 911 services are very 

small compared to the overall. 

Why not pay the claims, use some of this money we are paying 

in interest, and then, if you do find an unclaimed claim that does 

not qualify, so to speak, well, go to Acadian, go to Cook, and then 

let them reimburse? But don’t hold up millions of dollars that these 

gentlemen are providing for our heroes, trying to do the right 

thing, and they are getting left holding the bag. 

I have a surgical hospital in my district, as I have said, that, to 

their disappointment, to their severe disappointment, have had to 

stop servicing veterans. We wrote VA about it. I have yet to receive 

any response. And this goes back a few months ago that I have yet 

to get a response as to why this has happened. 

But, again, we go back—this is just such an unacceptable procedure. I am just looking for some comments here. 

Mr. Enderle, I will take yours. 

Mr. ENDERLE. Thank you for the question. That is a very good 

question. I wish we could just process the claim for payment and 

issue the check on behalf of our veterans, who deserve the best 

from us. 

Because of regulatory requirements, we have to determine eligibility criteria of that individual veteran who the claim is submitted 

on. And that process requires us, based on regulation, that if that 


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veteran does not have preapproval or preauthorization, that claim, 

in essence, becomes what we call an unauthorized—— 

Dr. ABRAHAM. Well, I understand the process, but is that regulation dictated by VA itself? Is that the rule that VA put in place? 

Mr. ENDERLE. It is both regulation and statute. So it is a requirement that we have to determine eligibility based on those claims 

that had not been prior-authorized. That prevents us, based on the 

eligibility, to make that lump-sum payment that you are referencing. 

Dr. ABRAHAM. Well, perhaps we can work on that. 

Mr. ENDERLE. Yes, sir. 

Dr. ABRAHAM. Okay. 

Thank you, Mr. Chairman. I yield back. 

Dr. BENISHEK. All right. Thank you, Dr. Abraham. 

I just have one more question for—maybe Mr. Enderle can answer it. I don’t know if you can do it, Doctor. 

But I just got some information that the non-VA care budget for fiscal year 2015 was set at, $5.4 billion, but then apparently VA 

withdrew $700 million from that to cover hepatitis C medication 

that has become expensive for VA. We are also told that is why VA 

is making the Choice Program the default option for outside care. 

Is that true? Anybody aware of that? 

Mr. ENDERLE. I am not aware of—— 

Dr. BENISHEK. Are there any other deductions from this account 

for other VA expenses that anyone is aware of? 

Mr. ENDERLE. I am not aware of any other deductions. 

Dr. MIGLIACCIO. I am not either. 

Dr. BENISHEK. So what I would like to get to, then, is what is 

the money remaining in that non-VA care fund for the remainder 

of the fiscal year? So that is the number that I am expecting from 

you all within the next month, okay? 

Dr. MIGLIACCIO. Chairman, is that under the Choice fund? 

Dr. BENISHEK. Well, no. No, there is the non-VA care budget. 

Dr. MIGLIACCIO. Okay. 

Dr. BENISHEK. And then, we have been told that the Choice has 

now become the default non-VA care option because of the diminished amount of this fund due to other expenses. And I am just trying to find out if this fund is being used for other VA expenses and 

making it more difficult to get outside care. 

Dr. MIGLIACCIO. Not to my knowledge, but we will check into it, 

sir. 

Dr. BENISHEK. Well, I understand that hepatitis C treatment is 

becoming expensive, but we need to deal with that and not cut 

back on this part of care, as well. 

Thank you all for being here today. I really appreciate it. It has 

been enlightening. I appreciate the providers’ being here today and, 

actually, as many have said, for your willingness to be here today 

and take the heat from VA for what you are doing. If you hear from 

them in a negative fashion, I would appreciate hearing from you. 

And I appreciate both your presence here today, Doctor and Mr. 

Enderle. I know what kind of a situation you are in, but I am trying to hold people personally responsible for what they are doing 

here. Because, typically, we get great responses from VA, but then 

6 months later, nothing has changed and there is a different person 


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giving us a great response. So it is very frustrating on my part. 

The accountability of individuals is paramount here. 

So thanks, all, again. 

The subcommittee may be submitting additional questions for 

the record, and I would appreciate your assistance in assuring expedient responses to those inquiries. 

Dr. BENISHEK. If there are no further questions, the panel is now 

excused. 

And I ask unanimous consent that all members have 5 legislative 

days to revise and extend their remarks and include extraneous 

material. 

Without objection, so ordered. 

The hearing is now adjourned. 

[Whereupon, at 11:35 a.m., the subcommittee was adjourned.] 

APPENDIX 

PREPARED STATEMENT OF ASBEL MONTES

My name is Asbel Montes and I am the Vice President of Reimbursement and 

Government Affairs for Acadian Ambulance Service, the largest private, employeeowned ambulance service in the nation. The Chairman & CEO of our company, 

Richard Zuschlag, founded the ambulance service division in 1971 with eight Vietnam veterans. Today, we now have over 4,000 employee owners, with over 400 of 

those owners being military veterans. 

I am honored to sit before you today to represent not only the industry, but even 

more so, the veterans we serve. 

Background 

Prior to coming before you today, our company, along with American Medical Response, the largest public ambulance provider in the nation, and the American Ambulance Association have worked diligently with our Congressional delegations, 

other healthcare stakeholders, the Veteran Integrated Network Services (VISNs), as 

well as the national leadership at the VA to assist, recommend and frankly demand 

that the VA’s internal processes be updated and modified to ensure that they are 

fulfilling their intended purpose, but also not placing financial burden on the men 

and women who have served our nation so selflessly. 

Despite these efforts, we have not seen any significant positive movement from 

the VA and therefore find ourselves here today. 

For a real life look at the issue, please allow me to provide one example that a 

veteran in Louisiana experienced who called 911 for emergency medical care and 

transport in 2014. We filed a claim and provided all necessary medical records and 

appropriate documentation within 30 days to the VA. We sent this information via 

certified mail. The VA signed for it confirming receipt five days later. Almost a year 

later on March of 2015, the veteran appeared on two local TV channels describing 

how his claim was still unpaid. He was subsequently contacted by a VA representative on March 18, 2015, indicating that his claim would be paid and he would receive notification. The claim was finally processed and paid in April of 2015, over 

a year and 3 months from the time the claim was originally filed. 

There are many more examples just like this one that could be given by providers 

and veterans alike across the nation, but suffice it to say, the GAO report in 2014 

which highlighted issues regarding excessive claims processing times and paperwork 

requirements for non-VA providers is absolutely correct. This problem is especially 

acute for the majority of ambulance service providers that serve as the local 911 

responders in their communities, who are prohibited from refusing emergency treatment for any patient, regardless of payor source or ability to pay. This failure to 

pay providers in a timely and accurate manner puts providers in the difficult position of having to bill veterans for emergency treatment, placing an unfair financial 

burden on the veteran due to the lack of response, invalid denial or payment by the 

VA. 

Our previous efforts at addressing this issue have included numerous inquiries 

sent from Congressmen and Senators in many states and the responses from the 

VA have remained wholly inaccurate and inadequate. 

My colleagues and I are not ignorant to the magnitude that this issue presents 

for the VA. However, after numerous offers of assistance and requests for relief from 


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the private and public sector, we have seen very little change. In fact, our company, 

American Medical Response, and many members of the American Ambulance Association have seen a recent escalation of the problem with our accounts receivables 

due from the VA growing in excess of $30M outstanding over 90 days. 

VISN 16 has sent reports to our Congressional Delegates with a number that 

would indicate improvement, but our data clearly indicates the opposite. On May 

14th of this year, we had yet another conference call with VISN 16, specifically the 

Flowood, MS office and requested that they provide us with all claims filed to them 

since 2012 in order to reconcile our records with theirs. That audit, which was completed on last Tuesday, indicated that they showed no record of 768 claims which 

were sent certified mail with confirmation of receipt by the VA. 

Solution 

The federal government has a responsibility to ensure that our veterans receive 

the best healthcare we can provide. It also has a responsibility to ensure they are 

not required to bear an unjustified financial burden because the VA fails to pay nonVA providers in a timely and accurate manner. It is our recommendation that Congress remove all claims processing for non-VA providers from the Department of 

Veterans’ Affairs and place it with a single Fiscal Intermediary, providing guidelines 

and policies to address the issues stated here today. This step would ensure consistency, efficiency and expertise in personnel as well as sufficient dedicated resources 

to process claims timely. Several other government programs, including Medicare 

and Tricare, utilize this strategy successfully. Please note that time is of the essence. 

Thank you for giving me this opportunity to provide information and to serve 

those who have sacrificed so much for our nation. I look forward to answering the 

Committee’s questions and serving as a resource as the Committee’s work continues 

beyond this hearing. 

f 

PREPARED STATEMENT OF VINCE LEIST

On behalf of the American Hospital Association’s (AHA) nearly 5,000 member hospitals, health systems and other health care organizations, and its 43,000 individual 

members, I thank you for the opportunity to testify on the Department of Veterans 

Affairs’ (VA) ability to promptly pay non-VA providers and the challenges hospitals 

and health systems throughout the country have faced in receiving payment for 

services provided to our veterans. 

I am Vince Leist, president and CEO of North Arkansas Regional Medical Center 

(NARMC) located in Harrison, Ark. NARMC is county-owned and operated by a notfor-profit health care system serving the comprehensive health needs of rural communities in northern Arkansas and includes a 174-bed hospital and three rural clinics. We also provide hospice, home health, urgent care and ambulance services and 

operate six primary care clinics. With 101 staff physicians and nearly 800 employees, NARMC is the second-largest employer in Harrison County. Like every community in America, we are proud of the men and women who have served our great 

nation, and we are eager to serve them. These brave veterans are our neighbors, 

and as a small community, we know them well and are honored to care for them 

in their time of need. 

America’s hospitals strive to ensure patients get the right care at the right time, 

in the right setting. As such, they have a long-standing history of collaboration with 

the VA and are eager to assist the department, and our veterans, in any way they 

can, including providing care through the Veterans Choice Program, the PatientCentered Community Care (PC3) program, direct contracting with the VA and, of 

course, serving the urgent health care needs of our veterans as they arise when 

there is or is not a contract with VA in place. However, hospitals’ continued inability 

to obtain timely payment from the VA and its contractors hinders access to care for 

veterans who need non-VA services and undermines the viability of non-VA hospitals across the country and the essential services they provide to their communities. 

We also are concerned about the process by which the VA processes claims. Medical records have been lost or unaccounted for, leading to questions of privacy for 

our veterans. Unfortunately, there are no prompt payment laws for care that is provided to veterans if the hospital does not have a contract, and there is limited oversight of how these claims are processed. In addition, many veterans worry about 

claims that are not paid promptly or are left unpaid, and they are left in a difficult 


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position of trying to get claims paid, often while battling illness. It is an untenable 

position for both veterans and hospitals. 

Below, I outline why the lack of prompt payment impedes access to care for veterans and offer recommendations to address this important issue to ensure that 

high-quality care is provided to veterans and our communities. 

Background On Veterans Choice Program 

The Veterans Choice Program is a new, temporary benefit allowing some veterans 

to receive health care from non-VA health care providers rather than waiting for 

a VA appointment or traveling to a VA facility. It was authorized under the Veterans Access, Choice, and Accountability Act of 2014 and provides $10 billion for 

non-VA medical care to eligible veterans until the required end date of Aug. 7, 2017. 

The temporary program will end early if the allocated funds of $10 billion are used 

prior to that date. 

While we understand that the VA had an extraordinarily short timeframe in 

which to implement the program, hospitals, as well as veterans, have faced many 

roadblocks when attempting to provide and access care under the program. These 

roadblocks have resulted in a very small number of eligible veterans being able to 

access the program. With our shared goal of ensuring that America’s veterans receive the care they need at the time they need it, the AHA in March provided the 

VA with suggestions for improving the Veterans Choice Program with respect to the 

mileage requirement, timely payment of claims and contracting to provide care. 

LACK OF PROMPT PAYMENT HINDERS ACCESS TO CARE FOR VETERANS

Non-VA providers have experienced and continue to face problems obtaining timely payment from the VA and its contractors. This hinders access to care for veterans 

who need non-VA services and is a disincentive for non-VA hospitals to either participate in the Veterans Choice Program, the PC3 program or to contract with the 

VA to provide healthcare services to veterans. 

Last June, a witness from the Government Accountability Office (GAO) testified 

at a House Committee on Veterans’ Affairs hearing on claim-processing discrepancies that delayed or denied payments for health care provided by non-VA providers. According to GAO, these delays or denials create an environment where nonVA entities are hesitant to provide care due to fears they will not be paid for services provided. In addition, a March 2014 GAO report found a non-VA hospital often 

either received no response after claims were sent to the VA or experienced lengthy 

delays, in some cases of years, in the processing of their claims. The hospital had 

approached the VA to try to discuss ways to improve the claims process, but those 

efforts were unsuccessful. 

Last month, at a hearing before the full House VA committee, VA Deputy Secretary Sloan Gibson acknowledged the lack of timeliness in promptly reimbursing 

non-VA hospitals and expressed his commitment to improve the payment process. 

Hospitals and health systems welcome that commitment from the VA leadership; 

however, many non-VA hospitals have outstanding payments spanning many 

months—and some date back for years—so it is essential to work quickly to solve 

the problem of not paying promptly. 

NARMC strongly believes that we need to serve the needs of our veterans. The 

closest VA health facility to NARMC is a small VA outpatient clinic down the street 

from the hospital. The closest VA hospital is 70 miles away, and the nearest nonVA hospital is 60 miles away. NARMC regularly accepts patients who are seen at 

the VA outpatient clinic but are too sick to travel to the VA hospital or any other 

hospital. These veterans are referred to our hospital by the VA outpatient physician. 

We also regularly see veterans who come to our emergency room because they have 

an urgent health care issue. Our mission is to heal, and while we wish we did not 

have to focus on the financial responsibility of running a hospital, we must—that 

is the only way we can keep our doors open. While we are very dedicated to serving 

the veterans in our community, and we accept each and every one who walks 

through our doors, we have decided against contracting with the VA due to slow or 

no payment for claims and the bureaucracy involved with getting claims through 

the payment process. 

Since 2011, NARMC has 215 claims totaling more than $750,000 that have not 

been paid by the VA. NARMC has attempted to work with the VA to resolve these 

claims; however, those efforts have resulted in, among other frustrations, long periods on hold to speak to VA service personnel, limitations on the number of cases 

to be discussed per phone call and lost medical records. In Arkansas, NARMC is 

not alone in not receiving prompt pay for services it provides veterans. More than 

4,400 claims – many dating back more than three years – totaling $24 million is 

currently owed to 60 Arkansas hospitals that are non-VA providers, according data 

from the Arkansas Hospital Association. Our elected officials have attempted to asVerDate Aug 31 2005 10:03 Jul 26, 2016 Jkt 000000 PO 00000 Frm 00039 Fmt 6633 Sfmt 6621 C:\PDF\OUT\98641.TXT PAT

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sist us with this difficult situation, but those efforts have had limited success. Additionally, in March, the VA reported a national backlog of more than $878 million 

in delayed payments for veterans’ emergency medical services delivered by non-VA 

providers. 

Even though NARMC has not been paid by the VA for services going back four 

years, our hospital continues to provide care for the veterans in the communities 

we serve. However, lack of prompt payment from the VA combined with continued 

reductions to Medicare and Medicaid payments for hospitals are jeopardizing access 

to care for patients. From 2010 to 2014 alone, Medicare and Medicaid payments for 

hospital services were cut by more than $121 billion. In addition, government programs continue to pay less than the cost of providing services to their beneficiaries—underpayment by Medicare and Medicaid to hospitals was $51 billion in 

2013 alone. Lack of adequate and prompt payment is particularly challenging for 

small and rural hospitals that already are contending with challenges such as remote geographic location, small size, limited workforce, physician shortages and 

often constrained financial resources. 

If the VA does not pay claims promptly and further reductions in payments for 

hospital care continue, NARMC would be forced to reduce or eliminate services offered to patients or seek assistance from already-strapped counties in Arkansas. For 

example, our hospital offers life-saving ambulance services to four counties in rural 

Arkansas with no support from tax dollars, but those services could be scaled back 

or eliminated. Many hospitals throughout the country would have to make similar 

decisions, resulting in decreased access to care for patients and communities. We 

want to continue to provide essential health care services to our communities, including our veterans, but will not be able to do so without the proper resources, including prompt payment from the VA. 

Recommendations to Ensure Prompt Payment 

As required by the Veterans Access, Choice and Accountability Act, the VA must 

establish a nationwide claims processing system to receive requests for payment and 

to provide accurate and timely payments for claims. However, an interim final rule 

implementing the law does not set forth the timeframes within which the VA must 

review claims and make payment. The VA and its contractors should commit to paying non-VA hospitals in a timely manner for Veterans Choice Program services, as 

well as other services provided to veterans. Specifically, the VA should: 

•Review claims as soon as practicable after receipt to determine whether they 

are proper. When a claim is determined to be improper, the department should 

return the claim to the hospital as soon as practicable, but no later than seven 

days after its initial receipt. The VA also should specify the reasons why the 

claim is improper and request a corrected claim. 

•Pay claims within 30 days of the receipt of a proper claim. 

•Make interest payments to hospitals when claims are not paid according to 

the 30-day standard. 

In addition, Congress should consider requiring the VA to develop a metric to 

measure effectiveness in its claims processing, including soliciting feedback from 

non-VA providers, and have the VA report to Congress on a regular basis the information it obtains on the effectiveness of its claims processing. 

Conclusion 

The VA health system does extraordinary work under very difficult circumstances 

for a growing and complex patient population. While the system is working to overcome operational challenges, America’s hospitals are eager to assist the department, 

and our veterans, in any way they can. The AHA stands ready to work with the 

committee to ensure prompt payment to non-VA providers so that hospitals can continue to provide vital services to veterans and all of the patients and communities 

they serve. 


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PREPARED STATEMENT OF GENE MIGLIACCIO, DR.P.H. 

Good morning, Chairman Benishek, Ranking Member Brownley, and Members of 

the Committee. Thank you for the opportunity to discuss the VA’s reimbursement 

efforts for non-VA care providers. I am accompanied today by Mr. Joseph Enderle, 

Director, Purchased Care Operations. 

VA provides care to Veterans directly in a VHA facility or indirectly through contracts, including contracts formed when providers accept individual authorizations, 

or through reimbursements, such as for emergency care. This mix of in-house and 

VA Community Care provides Veterans the full continuum of health care services 

covered under our medical benefits package. VA’s care in the community programs 

are designed to ensure high-quality care is provided effectively and efficiently to 

Veterans. 

As Deputy Secretary Gibson remarked to the full House Committee on Veterans’ 

Affairs at a hearing on May 13, 2015, VA understands the importance of complying 

with requirements of the ‘‘Prompt Payment Act’’ and making timely payments to 

community medical care providers. The organizational changes, implemented in Section 106 of the Veterans Access, Choice, and Accountability Act of 2014 (Veterans 

Choice Act), which consolidated payment of claims under centralized authority, 

serve as the basis for further improvements in making prompt payments. 

Section 106 of the Veterans Choice Act required the Department to transfer authority to pay for health care furnished through VA Community providers and the 

associated budget to the Chief Business Office—Purchased Care (CBOPC) no later 

than October 1, 2014. VHA met this target and quickly re-aligned more than 2,000 

positions and over $5 billion dollars in health care funding to CBOPC from the Veterans Integrated Service Networks (VISN) and VA medical centers. This realignment established a single, unified shared services organization responsible for payment functions and centralized management allowing us to leverage business process efficiencies going forward. 

VA has experienced tremendous growth in the volume of claims provided by community providers since implementation of the Accelerated Care Initiative which 

began on Wednesday, May 21, 2014. VHA has received 34 percent more claims from 

January 2015 through April 2015 compared to January 2014 through April 2014. 

Our current standard is to have at least 80 percent of our claims inventory under 

30 days old. VHA staff makes every effort to ensure claims are processed timely. 

Processing timeliness is measured from the point the claim is received to when the 

claim is processed, and as a result, marked as complete. As of May 22, 2015, our 

nationwide performance was 72.50 percent, and if our metric was aligned with 

Medicare processing standards for other than ‘‘clean claims’’ (45 days), our performance would be at 76.15 percent. A ‘‘clean claim’’ is a claim that has no defect or impropriety, such as a coding error. 

However, when claims without authorization are received from Community Providers , VHA reviews all authorities to ensure those claims are adjudicated based 

on the Veteran’s eligibility. Claims received by VA without prior authorization is 

one significant factor in the delay of claims processing. 

Information on community care is available to Veterans on the VA website as well 

as the Federal Benefits for Veterans, Dependents, and Survivors booklet. Based on 

regulatory and statutory authority, all Veterans are not eligible for community care 

in all situations. An example would be when a claim is received for a non-service 

connected Veteran who also is not enrolled in VA care. When claims are denied, Veterans are notified timely along with their right to appeal. As detailed later in the 

testimony, VHA staff are also reaching out to Community Providers and providing 

resources to educate them on Veteran eligibility and timely notification requirements. 

Improvement Strategies 

VA acknowledges that claims processing timeliness must improve. As a result, 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 Community Providers. 

In an effort to better process claims, CBOPC established the Support Claims Processing Division (SCPD) in March 2015. The SCPD was established in the Denver 

location to assist with processing claims when sites have high turnover, when sites 

receive a sudden increase of claims, and to assist with verification of claims. To address the increasing inventory and work the growing backlog, CBOPC identified a 

need to add more staff to SCPD in Denver. However, available space was not sufficient to add additional staff, so SCPD established a second shift to better utilize existing space. VHA is currently in the process of implementing second shifts at other 


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claims processing centers across the country. The new shift has the benefit to VHA 

of opening recruitment to a pool of candidates seeking to work non-traditional hours 

for the Federal Government. 

Additionally, CBOPC established a contract to add offsite contract staff support 

to process claims at those sites which have significant claims inventories. The first 

task order was issued in May 2015 to provide claims processing staff support to 

process 400,000 invoices, with a projection to increase processing to 600,000 claims 

by the end of this fiscal year. Currently, 145 full-time employees and contractors 

are onboard at SCPD. Over 40 more should be added by the end of June 2015, with 

additional staff projected to be added to a night shift by the end of September 2015. 

VHA continues to explore ways to add resources to better comply with the Prompt 

Payment Act and ensure that our community partners are well situated to continue 

providing care to our Nation’s Veterans. In compliance with the Veterans Choice 

Act, approximately 2,000 positions were transferred from VISNs and VA medical 

centers to the VHA CBOPC. VHA has advertised positions for claims processing at 

over 75 different geographical locations and plan to hire up to an additional 220 

full-time employees. We are also advertising an open-continuous Merit Promotion 

Announcement for Voucher Examiners to include targeting special appointment candidates. 

Currently, VHA is implementing technical fixes and process changes for issues 

preventing claims from being processed in a timely manner. All community care referrals require authorization. To obtain authorization in an emergency care situation, a Veteran should contact the closest VA medical center within 72 hours of admission to community care. Without the authorization, claims cannot be processed 

delaying payment processing. In some cases, authorizations are not entered timely 

in the VA payment system due to the administrative process. This is a processing 

issue we realize we must resolve. To address those situations, we are working with 

non-VA Care Coordination Staff to ensure authorizations are entered before a claim 

is received. 

Many community providers submit duplicate claims, due to the fact that their 

original claim was not paid in a timely manner. In an effort to identify duplicate 

claims within the payment processing system, software scripts were developed to 

identify the duplicates which will reject duplicate claims, leaving the oldest claim 

in inventory for processing. 

VHA is continuing to find ways to improve our systems. Currently, we are working with the VA Center for Applied Systems Engineering to standardize business 

processing to increase efficiencies and reduce variation using Lean methodology. 

Starting in July 2015, testing of the standardized business processing will take 

place in VISN 19. National employee performance standards are being developed to 

improve accountability and performance. Lastly, a Centralized Call Center Pilot is 

underway in VISN 16, with calls being answered by CBOPC staff in Denver. This 

pilot has dramatically 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. 

Another important aspect is our improved outreach efforts with stakeholders. We 

are finding better and more frequent ways to communicate the status of claims processing timeliness with non-VA care providers, Members of Congress, and Veterans. 

Ongoing training is being provided to community providers on the resources available to address the provider accounts receivables reports, to include monthly calls 

held with providers on account claim concerns. Later this year, we hope to begin 

distributing quarterly bulletins to providers on claims processing changes and 

issues. A future project could include developing a claims status portal for providers 

to access claims status information. Call Center staff will receive refresher training 

to address unique community provider issues. 

Process Improvement Results 

Our recent actions have had a significant impact in processing volume. From January 2015 to May 2015, VHA processed 5,988,117 claims, a 21-percent increase from 

the 4,946,989 claims processed from January 2014 to May 2014. 

VISN 16 is a strong example of improvement based on our recent actions. In December 2014, 35.58 percent of claims were paid in under 30 days. In May 2015, 

82.13 percent of claims were paid in under 30 days. At the facility level, in May 

2015, 83.13 percent of claims in the Southeast Louisiana Veterans Health Care System’s inventory were paid in under 30 days. This is a significant improvement from 

the 35.29 percent in December 2014. 

Conclusion 

In conclusion, VA strongly values its relationship with our community providers. 

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ity care to Veterans. We are working hard to expedite payments and streamline our 

claims services in order to make this an effective and efficient process for all. 

Mr. Chairman, I appreciate the opportunity to appear before you today. We are 

prepared to answer any questions you or other Members of the Committee may 

have. 


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VACREP0180 with DISTILLERInsert offset folio 16 here 98641.016
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VACREP0180 with DISTILLERInsert offset folio 17 here 98641.017
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VACREP0180 with DISTILLERInsert offset folio 18 here 98641.018
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VACREP0180 with DISTILLERInsert offset folio 19 here 98641.019
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VACREP0180 with DISTILLERInsert offset folio 21 here 98641.021
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VACREP0180 with DISTILLERInsert offset folio 22 here 98641.022
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VACREP0180 with DISTILLERInsert offset folio 23 here 98641.023
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VACREP0180 with DISTILLERInsert offset folio 24 here 98641.024
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VACREP0180 with DISTILLERInsert offset folio 25 here 98641.025
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VACREP0180 with DISTILLERInsert offset folio 26 here 98641.026
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VACREP0180 with DISTILLERInsert offset folio 27 here 98641.027
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VACREP0180 with DISTILLERInsert offset folio 28 here 98641.028
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VACREP0180 with DISTILLERInsert offset folio 29 here 98641.029
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VACREP0180 with DISTILLERInsert offset folio 30 here 98641.030
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VACREP0180 with DISTILLERInsert offset folio 31 here 98641.031
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VACREP0180 with DISTILLERInsert offset folio 32 here 98641.032
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VACREP0180 with DISTILLERInsert offset folio 33 here 98641.033
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VACREP0180 with DISTILLERInsert offset folio 34 here 98641.034
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VACREP0180 with DISTILLERInsert offset folio 35 here 98641.035
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Æ 


VACREP0180 with DISTILLERInsert offset folio 36 here 98641.036