VA and DOD have a long-standing history of sharing health care resources to provide services to their beneficiaries. However, the FHCC is unique among VA and DOD collaborations to deliver health care services in several ways, notably its level of integration, the way it is funded, and its governance structure. The Executive Agreement, signed by the Secretaries of both departments, contains provisions to be met in 12 integration areas regarding specific aspects of FHCC operations, including establishing a governance structure and combining VA and DOD staff into a single, joint workforce. The FHCC’s leadership remains directly accountable to VA and DOD individually, through formal reporting relationships, and jointly, through oversight and advisory entities comprising VA and DOD officials. VA and DOD have been authorized since the 1980s to enter into sharing agreements with each other to improve access to, and the quality and cost-effectiveness of, health care provided by the two departments. Since that time, VA and DOD have entered into a number of sharing agreements to provide services—such as emergency, specialty, inpatient, and outpatient care—to VA and DOD beneficiaries and to reimburse one another for the cost of such services. Starting in the 1990s, VA and DOD expanded their sharing efforts to include “joint ventures”—locations where sharing agreements are in place that encompass multiple health care services for VA and DOD beneficiaries. The FHCC is one of 10 joint venture locations across the country. The October 2010 launch of the FHCC demonstration established a new level of sharing and integration for VA and DOD. Specifically, the FHCC is unique among other VA and DOD joint ventures in three key ways: 1. The FHCC’s integration of the provision of care and operations represents the highest level of collaboration among the 10 VA and DOD joint ventures. For example, the FHCC has a more integrated staffing structure than any other joint venture site. 2. The FHCC has a joint funding source, to which VA and DOD contribute, unlike the other joint venture sites, which each have separate VA and DOD funding sources. NDAA 2010 established the Joint DOD-VA Medical Facility Demonstration Fund (Joint Fund) as the funding mechanism for the FHCC, with VA and DOD both making transfers to the Joint Fund from their respective appropriations. 3. The FHCC operates under a single line of governance to manage medical and dental care, and has an integrated workforce of approximately 3,100 civilian and active duty military employees from both VA and DOD.integrated governance structures; rather, they maintain separate VA and DOD lines of authority. In April 2010, the Secretaries of VA and Defense signed the Executive Agreement that established the FHCC and defined the relationship between VA and DOD for operating the new, integrated facility, in accordance with NDAA 2010. The Executive Agreement contained provisions in 12 integration areas regarding specific aspects of FHCC operations (see table 1). Each of the 12 integration areas contains a number of specific provisions describing how the FHCC should be jointly operated by VA and DOD. Some provisions have designated deadlines, while others do not. For example, within the IT integration area, the Executive Agreement included provisions identifying three specific IT capabilities that VA and DOD were to have in place by opening day of the FHCC, October 1, 2010 (for example, medical single sign-on, which would allow staff to use one screen to access both the VA and DOD electronic health record systems) while other provisions (such as those for financial management and outpatient appointment enhancement solutions) had no scheduled due dates. As established in the Executive Agreement, the FHCC’s leadership and workforce remain directly accountable to both VA and DOD (see fig. 1). The FHCC Director, a VA executive, is accountable to VA for the fulfillment of the FHCC mission, while the Deputy Director and Commanding Officer, a Navy Captain, is accountable to DOD. In addition, the Joint Executive Council (JEC) and the Health Executive Council (HEC) provide oversight for all of the joint ventures, including the FHCC. The JEC is made up of senior VA and DOD officials and provides broad strategic direction for collaboration and resource sharing between the two departments. The HEC, a sub-council of the JEC, provides oversight for the specific cooperative efforts of each department’s health care organizations—VA’s Veterans Health Administration and DOD’s Military Health System. The HEC has organized itself into a number of work groups to carry out its work and focus on specific high-priority areas of national interest. The FHCC Advisory Board, a HEC workgroup co-chaired by and comprising senior officials from VA and DOD, was created specifically to provide guidance and support to FHCC leaders and to resolve issues that arise at the FHCC. The Advisory Board provides guidance for the integration and operations of the facility, including monitoring the FHCC’s performance and advising on issues related to strategic direction, mission, vision, and policy. It also serves as a communication link between the FHCC and VA and DOD executive leadership by reporting on FHCC activities to the HEC. FHCC issues that are not able to be resolved by the Advisory Board are elevated to the HEC for final resolution. The Stakeholders Advisory Council also provides feedback on how well the FHCC is meeting customers’ needs and VA and DOD missions. The Stakeholders Advisory Council is made up of members from various regional and local organizations representing FHCC interests, including representation from local government, TRICARE, and two nearby VA medical facilities. Eleven of 12 integration areas are now either “implemented” or “in progress.” The remaining integration area, IT, remains “delayed,” as it was at our last review, resulting in costly and time-consuming workarounds. DOD’s decision not to seek an MTF designation for the FHCC, as we had recommended in our July 2011 report, has resulted in continued implementation challenges. FHCC officials have implemented or made progress implementing 11 of the 12 Executive Agreement integration areas. Specifically, FHCC officials have implemented 6 integration areas, meaning all associated provisions in the Executive Agreement have been met. Five of the integration areas are in progress, meaning some, but not all, associated provisions have been met, with FHCC officials maintaining or making additional progress meeting the provisions in each integration area. The 1 integration area not implemented or in progress is IT, which is delayed, meaning at least one provision had a deadline provided in the Executive Agreement that was not met. This integration area is discussed in more detail later in this report. (See fig. 2.) FHCC officials have implemented all provisions in 6 of the 12 Executive Agreement integration areas. Of these 6, 4 were integration areas we previously reported as implemented: (1) governance structure, (2) access to health care at the FHCC, (3) research, and (4) contracting. The two other implemented integration areas, quality assurance and contingency planning, moved from in progress at the time of our last review to implemented in this review. Integration areas we previously reported as implemented have remained in that status by maintaining activities or policies that meet the associated provisions in the Executive Agreement. For example, in the area of governance structure, the Stakeholders Advisory Council meets quarterly as required by the Executive Agreement and in another integration area, research, existing policies remain in place. Since our 2011 report, the FHCC met two additional required provisions for the quality assurance integration area: (1) officials obtained accreditation for the integrated facility by relevant external accrediting bodies—the Commission on Accreditation of Rehabilitation Facilities, and The Joint Commission—and (2) FHCC officials reviewed the FHCC’s policy on professional practices. In addition, FHCC officials have established a formal agreement to outline the jurisdiction of VA and DOD related to the security program for the FHCC campus, as the Executive Agreement requires. (See table 2.) Five other integration areas in the Executive Agreement remain in progress: (1) integration benchmarks, (2) property, (3) reporting requirements, (4) workforce management and personnel, and (5) fiscal authority. Each of these integration areas was also in progress at the time of our first report in July of 2011. FHCC officials have actively maintained past progress while continuing to work toward implementation of the provisions in the Executive Agreement associated with these integration areas. Some integration areas cannot be met until a certain point in the integration or depend on other conditions being met. For example, for the integration benchmarks area and the property area, the Executive Agreement specifies that in accordance with NDAA 2010, property transfer may occur upon the earlier of (1) completion of the 15 integration benchmarks or (2) 5 years from the date the Executive Agreement was executed. Thus, the FHCC may address the property integration area prior to the end of the demonstration, in 2015, but it is not required to do so. FHCC officials also are in the process of addressing other integration areas with provisions that do not have specific deadlines associated with them. For example, for the fiscal authority integration area, FHCC officials continue to make progress implementing the provisions, although they have experienced some challenges. Since our last review, the Joint Fund, into which both VA and DOD contribute, has become operational. However, the provision of the Executive Agreement in the fiscal authority integration area that requires the FHCC to develop an operating plan by month that includes workload data has not yet been met. Specifically, the FHCC’s operating plan does not include workload data, which officials reported is because the current VA and DOD IT systems calculate workload data differently. (See table 3.) Despite some progress, the FHCC continues to face costly delays in the IT integration area. The Executive Agreement specified three key IT capabilities that VA and DOD were required to have in place on opening day, in October 2010, to facilitate interoperability of VA and DOD electronic health record systems.