[Senate Hearing 111-327]
[From the U.S. Government Publishing Office]
S. Hrg. 111-327
HEARING ON VA CONTRACTS FOR
HEALTH SERVICES
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON VETERANS' AFFAIRS
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 30, 2009
__________
Printed for the use of the Committee on Veterans' Affairs
Available via the World Wide Web: http://www.access.gpo.gov/congress/
senate
U.S. GOVERNMENT PRINTING OFFICE
53-066 WASHINGTON : 2009
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC
area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC
20402-0001
COMMITTEE ON VETERANS' AFFAIRS
Daniel K. Akaka, Hawaii, Chairman
John D. Rockefeller IV, West Richard Burr, North Carolina,
Virginia Ranking Member
Patty Murray, Washington Lindsey O. Graham, South Carolina
Bernard Sanders, (I) Vermont Johnny Isakson, Georgia
Sherrod Brown, Ohio Roger F. Wicker, Mississippi
Jim Webb, Virginia Mike Johanns, Nebraska
Jon Tester, Montana
Mark Begich, Alaska
Roland W. Burris, Illinois
Arlen Specter, Pennsylvania
William E. Brew, Staff Director
Lupe Wissel, Republican Staff Director
C O N T E N T S
----------
September 30, 2009
SENATORS
Page
Akaka, Hon. Daniel K., Chairman, U.S. Senator from Hawaii........ 1
Tester, Hon. Jon, U.S. Senator from Montana...................... 2
Begich, Hon. Mark, U.S. Senator from Alaska...................... 9
Burr, Hon. Richard, Ranking Member, U.S. Senator from North
Carolina....................................................... 17
Prepared statement........................................... 17
Burris, Hon. Roland W., U.S. Senator from Illinois............... 20
Prepared statement........................................... 20
WITNESSES
Williams, Hon. Joseph A., Jr., RN, BSN, MPM, Acting Deputy Under
Secretary for Health for Operations and Management, Veterans'
Health Administration, U.S. Department of Veterans Affairs;
accompanied by Frederick Downs, Jr., Chief Procurement and
Logistics Officer, Veterans Health Administration; Gary Baker,
Chief Business Officer, Veterans Health Administration; Bradley
Mayes, Director, Compensation and Pension Service, Veterans
Benefits Administration; and Jan Frye, Deputy Assistant
Secretary for Acquisition and Logistics........................ 3
Prepared statement........................................... 5
Response to questions arising during hearing by:
Hon. Jon Tester...................................12-14, 25, 27
Hon. Mark Begich......................................... 47
Hon. Daniel K. Akaka..................................... 48
Response to post-hearing questions submitted by Hon. Daniel
K. Akaka................................................... 58
Attachments.............................................. 70
Curtis, Mary A., APRN, BC, Boise VA Medical Center, representing
the American Federation of Government Employees................ 137
Prepared statement........................................... 140
McClain, Tim S., President and Chief Executive Officer, Humana
Veterans Health Care Services.................................. 142
Prepared statement........................................... 144
Appendix................................................. 151
Response to questions arising during hearing................. 178
Shahani, Marjie, Chief Executive Officer, QTC Management, Inc.... 151
Prepared statement........................................... 153
Earnest, John L., President and Chief Executive Officer,
Ambulatory Care Solutions...................................... 155
Prepared statement........................................... 157
Attachment............................................... 162
HEARING ON VA CONTRACTS FOR
HEALTH SERVICES
----------
WEDNESDAY, SEPTEMBER 30, 2009
U.S. Senate,
Committee on Veterans' Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 9:30 a.m., in
room 418, Russell Senate Office Building, Hon. Daniel K. Akaka,
Chairman of the Committee, presiding.
Present: Senators Akaka, Tester, Begich, Burris, and Burr.
OPENING STATEMENT OF HON. DANIEL K. AKAKA, CHAIRMAN,
U.S. SENATOR FROM HAWAII
Chairman Akaka. Good morning. Please be seated. The hearing
of the Senate Committee on Veterans' Affairs on VA Contracts
for Health Services will come to order.
This hearing will explore how VA purchases health care
services. The Committee is interested in gaining a better sense
of the process by which services are purchased and how VA
oversees and manages those outside services.
While VA has authority to buy services for veterans in the
community through various means, it is not clear if VA compares
the cost of providing these services in-house to the costs of
outsourcing. This raises a question as to whether VA gets value
for the more than $3 billion spent annually on purchased care.
There are also concerns about how the VA monitors the
quality of contract services to ensure that veterans are
receiving timely and appropriate care. Whether contract care is
obtained through a national contract with a large HMO, through
a local contract for care at a community clinic, or for
compensation and pension exams, VA remains responsible for
insuring that the care or services are of high quality. This
includes making sure that VA and contract providers share
accurate and complete medical information.
Another area of concern is the extent to which individual
VA hospitals and their networks have contracts for care which
are unknown to managers here in DC. In an effort to increase
accountability and oversight of contract services, VA recently
restructured the contracting process to move contracting
authority from the local level to more centralized points. The
Committee hopes to learn today about how this reorganization
will help VA ensure that contractors supply quality services at
a fair price to the benefit of the VA and the taxpayers.
It is also important to focus on what mechanisms are in
place so that VA contracts for services only if it does not
make sense for VA to supply the services directly. Today's
hearing is part of the Committee's oversight of how VA provides
health services outside of VA. No matter the setting, the
Nation's veterans deserve timely access to the highest quality
services available.
At this time I would like to welcome the witnesses on our
first panel. Joseph Williams, Acting Deputy Under Secretary for
Health, Operations and Management of the Veterans' Health
Administration, will lead the discussion on VA contracts for
health services. He is accompanied by Frederick Downs, who is
Chief of Procurement and Logistics Officer at VHA; Gary Baker,
Chief Business Officer at VHA; Bradley Mayes, Director,
Compensation and Pension Service at VBA; and Jan Frye, Deputy
Assistant Secretary for Acquisition and Logistics.
I thank all of you for being here this morning and want you
to know that your full testimony will appear in the record.
Before we begin with your testimonies, I want to call on
Senator Tester for his opening remarks.
STATEMENT OF HON. JON TESTER,
U.S. SENATOR FROM MONTANA
Senator Tester. Thank you, Mr. Chairman.
I guess I made it just in time. I wish I could have heard
your comments, yet I want to thank you very much for having
this hearing on this important issue. And, as always, I want to
thank the folks who came to testify and give their perspective
for being here also. I appreciate it very much.
I start from the same perspective as the American Legion
when it comes to the VA health system. The Legion called it a
system worth saving and I could not agree more.
It is clear to me that the Legion speaks for an awful lot
of veterans who want to see the system strengthened, not
dismantled.
But I recognize that there are limits to what the VA can
do. We see it all over rural and frontier America; contracting
of mental health services in Montana is an absolute necessity.
There is only one mental health professional in the entire
State east of Billings, and Billings is not the eastern edge of
Montana. Contracting of speciality care and emergency services
in rural and frontier areas makes sense as well because we
simply do not have the providers.
It does not do anyone any good to put the VA and the
private sector in direct competition for the doctors and nurses
and other medical professionals that are increasingly in short
supply in rural America.
Contracting out can sometimes simply be the right thing to
do for the veteran. You do not put a veteran from Billings with
a back injury on an 8-hour bus ride to Denver for surgery; at
least I would hope you better not. You find a way to get him
surgery in his own neighborhood.
But contracting is not a cure-all even in rural America. I
know that the VA in Montana has had to cancel a couple of CBOC
contracts for poor performance or failure to adapt to the VA
electronic medical records, which are the linchpin of VA's
health care system.
I am particularly concerned about reports regarding VA's
overpayment of contracted services for compensation and pension
exams. I see that private companies are doing more and more of
these exams at an average cost of $850 per veteran. That might
make some sense and it might not. I guess that is what this
hearing is about.
I am very worried that we do not have the data we need to
understand whether privately performed C&P exams actually lead
to more efficient C&P claims processing. I hope we can get
information on that during this hearing.
We are in tight budget times so let us make sure we are not
tolerating waste, fraud, or abuse in the contracting process
before we think about trying to raise copayments and fees on
veterans, as the Bush administration had proposed, or before we
think about forcing VA health costs onto veterans private
insurance, as the Obama Administration proposed.
Finally, Mr. Chairman, I would just add that contracting
out medical services is hardly a cure-all for the private
providers. Many of these folks in my State wait for
reimbursement well beyond the VA's goal of 30 days after the
claim is submitted. Many of these facilities are small critical
access hospitals that have little or no margin for error in
their cash-flow.
So, I want to commend you, Mr. Chairman, for holding this
hearing. I look forward to hearing from the witnesses and the
questions thereafter.
Thank you very much.
Chairman Akaka. Thank you very much, Senator Tester.
At this time I would like to call on Mr. Williams for your
statement.
STATEMENT OF JOSEPH A. WILLIAMS, JR., RN, BSN, MPM, ACTING
DEPUTY UNDER SECRETARY FOR HEALTH FOR OPERATIONS AND
MANAGEMENT, VETERANS HEALTH ADMINISTRATION, U.S. DEPARTMENT OF
VETERANS AFFAIRS; ACCOMPANIED BY FREDERICK DOWNS, JR., CHIEF
PROCUREMENT AND LOGISTICS OFFICER, VETERANS HEALTH
ADMINISTRATION; GARY BAKER, CHIEF BUSINESS OFFICER, VETERANS
HEALTH ADMINISTRATION; BRADLEY MAYES, DIRECTOR, COMPENSATION
AND PENSION SERVICE, VETERANS BENEFITS ADMINISTRATION; AND JAN
FRYE, DEPUTY ASSISTANT SECRETARY FOR ACQUISITION AND LOGISTICS
Mr. Williams. Mr. Chairman, Ranking Member, Members of the
Committee. Thank you for the opportunity for us to discuss the
Veterans' Affairs oversight of health care contracting.
The VA provides care to veterans directly in a VA medical
center or indirectly through either fee-basis care or through
contracts with local providers. This strategic mix of in-house
and external care provides veterans with a full continuum of
health care services.
VA medical center directors determine when additional
resources are required. It is VHA policy to hire clinical staff
whenever feasible. But when this is not possible or
inadvisable, the medical center director must first consider
sending patients to another VA medical center. If contracting
of services are required, a competitive bid is the first option
considered.
There are two principal avenues of contracting for health
care services: conventional commercial providers and academic
affiliates. VA academic affiliates provide a large portion of
contract care and critical care.
In either approach, VA is ultimately responsible for the
quality of care delivered in its facilities for veterans. VA
exercises this responsibility through credentialing and
privileging, quality and patient safety monitoring, and
specific quality of care positions within a contract itself.
All applicable VA quality and patient safety standards must
be met for medical services provided under contract in a VA
facility. Ensuring quality standards for VA-contracted care
when services are provided outside of the VA facility is more
complex, but VA-contracted care includes language that allows
for industry standards of accreditation, certification
requirements, clinical reporting, and oversight. VA also
includes clauses in their contract that allows it to negotiate
additional terms as the new clinical requirements are
instituted within the department.
VA understands the importance of closely managing its
contracts and has initiated multiple efforts to address this.
Project HERO is a cornerstone of those efforts. Project HERO,
which is available in four VISNs, four of our networks, is a
contracting pilot to increase quality oversight and reduce the
cost of purchased care.
In Project HERO, VA contracts with Humana Veterans' Health
Care Services and Delta Dental Federal Services to provide
veterans with prescreened networks of doctors and dentists who
meet VA quality standards. This is done at negotiated rates.
In fact, 89 percent of Project HERO contact medical prices
with HVHS are below the Medicare rates and contracted rates
with Delta Dental are less than 80 percent of the National
Dentistry Advisory Services Comprehensive Fee for dental
services.
Project HERO contracts require that Humana and Delta Dental
meet VA standards for credentialing and privileging. Timely
reporting of access to care, timely return of clinical
information to VA, patient safety and patient satisfaction, and
quality programs including peer review are all components of
this process.
There are no known instances where VA medical centers have
reduced staff following the introduction of Project HERO
contracts.
While Project HERO is only in the second year of a 5-year
pilot, VA has found that patient satisfaction is comparable to
VA and robust quality programs including peer review with VA
participation while meeting Joint Commission and other industry
standards.
While VHA recognizes the continuous need for improvement,
this project has validated our ability to resolve key oversight
issues.
Mr. Chairman, you also asked us to discuss contracting for
compensation and pension examinations. Medical examination
reports are an important part of VA's disability claim process.
Although the majority of these examinations are conducted
by VHA, C&P Service has the authority to contract with the
outside for medical providers in an examination process.
During fiscal year 2008, medical disability examination
contractors conducted approximately 24 percent of all the
compensation and pension exams. C&P Service has contracted with
two medical disability examination providers: QTC Medical
Services and MES Solutions.
QTC was first awarded a contract in 1998. QTC successfully
competed for rebid of a contract in 2003. During fiscal year
2008 QTC completed 117,089 examinations.
Six VA regional offices order at least some of their
examinations from MES. This contractor currently performs
approximately 1,550 examinations per month.
C&P Service oversees both of these contracts. The oversight
involves three standards: performance; quality and timeliness;
and customer service, which are evaluated quarterly.
Mr. Chairman, VA prides itself on providing consistent,
high-quality care to veterans; and contracting and fee-basis
arrangements and agreements are important components of the
VA's national system of health care.
We recognize the importance of our responsibilities in the
oversight of care purchased outside our facilities or provided
by contractors within our facilities. We will continue to work
to develop initiatives intended to improve the oversight of
these agreements.
Thank you for this opportunity. My colleagues and I are
prepared to answer your questions.
[The prepared statement of Mr. Williams follows:]
Prepared Statement of Joseph A. Williams, Jr., RN, BSN, MPM, Acting
Deputy Under Secretary for Operations and Management, Veterans Health
Administration, U.S. Department of Veterans Affairs
Mr. Chairman, Ranking Member, and Members of the Committee: Thank
you for providing me this opportunity to discuss the Department of
Veterans Affairs' (VA) oversight of health care organizations
contracting with VA to provide health services to Veterans. I am
accompanied today by Jan Frye, Deputy Assistant Secretary for
Acquisition and Logistics, Department of Veterans Affairs; Fred Downs,
Chief Procurement and Logistics Officer, Veterans Health
Administration; Patricia Gheen, Deputy Chief Business Officer for
Purchased Care, Chief Business Office, Veterans Health Administration;
and Bradley Mayes, Director of the Compensation and Pension Service,
Veterans Benefits Administration.
VA provides care to Veterans directly in a VA medical center or
indirectly through either fee-basis care or through contracts with
local providers. This strategic mix of in-house and external care
provides Veterans the full continuum of health care services covered
under our benefits package. My testimony today will focus on VA's
oversight of health care organizations contracting with VA to provide
health services to Veterans, VA's obligations and procedures for
ensuring quality care through contracts, VA's Project on Healthcare
Effectiveness through Resource Optimization (Project HERO), oversight
of compensation and pension examinations conducted by QTC Management,
Inc., and other large-scale contracts.
oversight of health care contracts
All VA health care resource contracting is accomplished under the
provisions of VA Directive 1663, ``Health Care Resources Contracting.''
VA's Directive 1663 further implements provisions of Public Law 104-
262, ``The Veterans Health Care Eligibility Reform Act of 1996,'' which
significantly expanded VA's health care resources sharing authority in
title 38 United States Code (U.S.C.) sections 8151 through 8153.
VA medical center directors determine when additional health care
resources are required. It is the policy of the Veterans Health
Administration (VHA) to provide Veterans care within the VA health care
system, whenever feasible.
When VA is unable to provide care within the system, for example
because a qualified clinician cannot be recruited the medical center
director must first consider sending patients to another VA medical
center. Contracting for necessary services will only be considered if
these options are not appropriate or viable. If contracting for
services is required, a competitive bid is the first option to be
considered.
There are two principal avenues to contract for health care
services: conventional commercial providers and academic affiliates.
VA's academic affiliates (schools of medicine, academic medical centers
and their associated clinical practices) provide a large proportion of
contracted clinical care both within and outside of VA.
All VA health care resource contracts are reviewed through a
thorough process that includes the Office of General Counsel (for legal
sufficiency), VHA's Patient Care Services (for quality and safety),
VHA's Office of Academic Affiliations (for affiliate relations
assessment), and VHA's Procurement and Logistics Office (for
acquisition technical review for policy compliance). A formal Medical
Sharing Review Committee, consisting of senior executives from those VA
organizations, approves or disapproves the concept of contracting for
care and provides management oversight of the health care contracting
requirements and acquisition process.
quality management for contracted care
VA retains ultimate responsibility for the quality of care
delivered within its facilities to Veterans. VA exercises this
responsibility through several clinical and administrative oversight
mechanisms, including credentialing and privileging, quality and
patient safety monitoring, and the inclusion of specific quality of
care provisions in the contract itself.
Quality assurance is a shared responsibility of VA and the vendor.
The joint and separate responsibilities of VA and the vendor must be
defined in advance so that medical care delivery under a sharing
agreement (contract) can be effectively monitored (VA Directive 1663,
Health Care Resources Contracting--Buying, Sections 4.d.1 and 4.d.2).
The VISN Director is responsible for ensuring that each facility Chief
of Staff has appropriate quality assurance standards in place;
appropriate data methods have been defined; and data collection,
analysis and reporting are performed as specified.
VA Central Office's Sharing Contract Review Committee is
responsible for providing an additional level of review, including
review of the quality assurance provisions. Within this Committee,
VHA's Patient Care Services has primary responsibility for assuring
that medical sharing contracts contain appropriate quality and patient
safety provisions.
Facility Directors must ensure that these oversight mechanisms are
consistently and effectively applied to all in-house contracted care.
All contracts for physician services provided at VA must state that
credentialing and privileging is to be done in accordance with the
provisions of VHA Handbook 1100.19, ``Credentialing and Privileging.''
Facility Service Chiefs are responsible for the quality of care within
their clinical disciplines pursuant to VHA Handbook 1100.19 and Joint
Commission Standards MS. 03.01.01, MS. 04.01 .01, LD.04.03.01 and
LD.04.03.09. Facility Service Chiefs exercise this responsibility
through such actions as oversight of credentialing and privileging, and
review of provider-specific data and peer review processes.
The Joint Commission also has specific standards for focused
monitoring whenever new procedures or new technology are involved
(Joint Commission Standards MS. 08.01 .01 and LD.04.03.01). As noted
above, Clinical Service Chiefs and/or the Chief of Staff have primary
responsibility for the oversight of quality and safety monitoring.
Quality and safety standards and monitoring procedures will vary as
a function of the specific service being provided. However, all
applicable VA quality and patient safety standards must be met for
medical services provided under contract in a VA facility. Ensuring
quality standards for VA-contracted care when services are provided
outside of a VA facility is more difficult, but VA includes language in
contracts that allows for industry standard accreditation or
certification requirements, clinical reporting and oversight. VA also
includes clauses that allow it to negotiate additional terms as new
clinical requirements are instituted by the Department.
project on healthcare effectiveness through resource optimization
(project hero)
Given our desire for patient-centered care and recognizing that it
may not always be able to provide Veterans care within our facilities,
VA has a continued need for non-VA services. This purchasing of health
care services represents a key component in our health care delivery
continuum. VA understands the importance of closely managing the
services purchased and has initiated multiple efforts around improving
that management. Project HERO is a cornerstone of those efforts.
House Report 109-305, the conference report to accompany Public Law
109-114, provided that VA establish at least three managed care
demonstration programs to satisfy a set of health care objectives
related to arranging and managing care. The conferees supported VA's
expeditious implementation of care management strategies that have
proven valuable in the broader public and private sectors, and to
ensure care purchased for enrollees from community providers is cost-
effective and complementary to the larger VA health care system. The
conferees encouraged VA to collaborate with industry, academia, and
other organizations to incorporate a variety of public-private
partnerships.
Project HERO is in year two of a proposed five-year contracting
pilot to increase the quality oversight and decrease the cost of
purchased (fee) care. It is currently available in four Veterans
Integrated Service Networks (VISN): VA Sunshine Healthcare Network
(VISN 8), South Central VA Health Care Network (VISN 16), Northwest
Network (VISN 20) and VA Midwest Health Care Network (VISN 23). These
VISNs have historically had high expenditures for non-VA purchased care
(fee care) and substantial Veteran enrollee populations. When VA cannot
readily provide the care Veterans need internally, VA medical centers
utilize the traditional fee basis program or, in selected VISNs,
Project HERO.
Project HERO is one of our most comprehensive pilot programs
intended to improve the management and oversight of the purchase of
non-VA health care services. It represents a significant and proactive
approach to assessing timeliness, quality, and clinical information
sharing for purchased care services, resolving potential deficiencies
in this area. In Project HERO, VA contracts with Humana Veterans
Healthcare Services (HVHS) and Delta Dental Federal Services to provide
Veterans with pre-screened networks of doctors and dentists who meet VA
quality standards at negotiated contract rates.
Project HERO is predominantly an outpatient program for specialty
services such as dental, ophthalmology, physical therapy, and other
services not always available in VA. For every patient, VA medical
centers determine and authorize the specific services and treatments to
Project HERO contracted network doctors and dentists.
Project HERO's demonstration objectives have been shared with a
number of key stakeholders, including Veterans Service Organizations,
the American Federation of Government Employees, academic affiliates,
and industry. The VHA Project HERO Program Management Office presented
the following objectives to the House Appropriations Committee and
House Veterans' Affairs Committee in the second quarter of 2006:
Provide as much care for Veterans within VHA as practical;
Refer Veterans efficiently to high-quality community-based
care when
necessary;
Improve the exchange of medical information between VA and
non-VA
providers;
Foster high-quality care and patient safety;
Control operating costs;
Increase Veteran satisfaction;
Secure accountable evaluation of demonstration; and
Sustain partnerships with university Affiliates.
The VHA Chief Business Office oversees purchased care programs,
including fee care and Project HERO. This Office meets with internal
and external stakeholders and monitors and evaluates program metrics.
The Project HERO Governing Board oversees program activities and is
composed of the Acting Deputy Under Secretary for Health Operations and
Management, the VHA Chief Business Officer, and network directors from
the four participating VISNs. The Board also has advisors from General
Counsel, the Office of Academic Affiliations, and the Office of
Acquisition, Logistics, and Construction.
The Contract Administration Board provides contract guidance as
needed and includes contracting and legal representatives. The Project
HERO Program Management Office (PMO) oversees the contracts to help
ensure quality care, timely access to care, timely return of clinical
information to VA, patient safety and satisfaction. The PMO includes
contract administration, project management, performance and quality
management; data analysis, reporting and auditing; and communication
and training.
Project HERO contracts require HVHS and Delta Dental to meet VA
standards for:
Credentialing and accreditation;
Timely reporting of access to care;
Timely return of clinical information to VA;
Reporting patient safety issues, patient complaints and
patient satisfaction; and
Robust quality programs including peer review with VA
participation, while meeting Joint Commission and other industry
requirements.
Humana Veterans Healthcare Services utilizes the Agency for Health
Research and Quality patient safety indicators as well as complaints,
referrals and as sources for initiating peer review. The Project HERO
PMO monitors contract performance, audits credentialing and
accreditation, and evaluates HVHS and Delta Dental performance compared
to VA Survey of Healthcare Experiences of Patients (SHEP), Joint
Commission measures, and proxy measures based on HEDIS measures. This
analysis indicates that Project HERO facilities are equal to or better
than the national average for all non-VA hospitals that report to the
Joint Commission.
Project HERO has negotiated contract rates with HVHS and Delta
Dental. Eighty-nine percent of Project HERO contracted medical prices
with HVHS are at or below Medicare rates, and contracted rates with
Delta Dental are less than 80 percent of National Dentistry Advisory
Service Comprehensive Fee Report for dental services.
While Project HERO is only in the second year of a 5 year pilot,
the program is meeting its objectives and improving quality oversight,
access, accountability and care coordination. As a demonstration
project, VA has gained invaluable experience in developing future
health care contracts, managing both the timely delivery of health care
and the quality of the care provided. Specifically, VA has found:
Patient satisfaction is comparable to VA;
HVHS and Delta Dental providers meet VA quality standards
and maintain extensive quality programs. The Project HERO PMO audits
for compliance and participates in their quality councils and peer
review committees.
HVHS and Delta Dental provide timely access to care,
providing specialty or routine care within 30 days 84 percent and 100
percent of the time respectively.
Both vendors are contracted to return medical
documentation to VA within 30 days for more informed, continuous
patient care. The Project HERO PMO worked with HVHS, Delta Dental and
VA medical centers to make electronic clinical information sharing
available at all Project HERO sites.
These significant improvements, gained through Project HERO, have
resulted in a more robust oversight of these key programs. While VHA
recognizes the continuous need for improvement, the initial
demonstration has validated our ability to resolve the key oversight
issues identified as a program goal.
compensation and pension service oversight of contract medical
examinations background
Medical examination reports are an important part of VA's
disability claims process. They provide VA regional office rating
personnel with a means to establish service connection if a medical
opinion is needed and evaluate the severity of a Veteran's disabling
symptoms for compensation purposes. A standardized protocol with
specific worksheets for various types of examinations was developed
jointly by the Compensation and Pension (C&P) Service and VHA. Although
the majority of these examinations are conducted by VHA, C&P Service
has authority to contract with outside medical providers in the
examination process. During fiscal year 2008, medical disability
examination (MDE) contractors conducted approximately 24 percent of all
compensation and pension examinations.
MDE Contractors
C&P Service has contracted with two MDE providers: QTC Medical
Services, Inc. (QTC) and MES Solutions, Inc. (MES). The initial
authority for use of contract examinations is found in Public Law 104-
275, enacted in 1996. The authority is limited to ten VA regional
offices and authorizes use of mandatory funds for the examinations. QTC
was first awarded the contract in 1998. This authority required a
report to Congress on the feasibility and efficacy of contracting for
examinations from non-VA sources. VA selected the ten regional offices
to reflect a broad range of claims activity, including: (1) offices
participating in the Benefits Delivery at Discharge Program (BDD), (2)
offices in remote and medically underserved areas where Veterans had to
travel long distances for examinations, and (3) offices in areas of
high demand for examinations that may require longer waiting periods to
get appointments. Two of the ten offices selected are involved with BDD
and process QTC pre-discharge examinations for separating
servicemembers that are conducted at 40 different military base sites.
Following submission of the VA report in the autumn of 1997,
Congress took no further action to modify, expand, or rescind the
authority. QTC successfully competed for a rebid of the contract in
2003 and this is the contract currently in force. During fiscal year
2008, QTC completed 117,089 examinations.
Public Law 108-183 provided VA with supplemental contracting
authority that differed from the existing authority in the following
ways: (1) funding for examinations under this authority utilizes
discretionary funds, (2) the number of locations at which VA may use
contract examiners is not limited, and (3) the authority currently will
expire on December 31, 2010. Pub. L. 110-389, section 105 extends the
authority of Pub. L. 108-183 until December 31, 2010. MES has been
awarded the contract under this authority and began performing
examinations in August 2008. Six VA regional offices order at least
some of their examinations from MES. This contractor currently performs
approximately 1,550 examinations per month.
VA Oversight
C&P Service oversees both of these contracts. The oversight
involves three standards of performance: quality, timeliness, and
customer satisfaction. These performance standards are evaluated
quarterly. The contract provides for financial incentives and
disincentives for superior and below standard performance respectively.
The quality performance measurement for both contractors involves a
review of examinations to determine how closely they follow the
approved examination protocols for each medical disability. In addition
to performance evaluations, C&P Service oversight includes an audit of
the financial reimbursement process. An independent auditor monitors
the billing statements presented by QTC and MES to VA and assures that
they are accurate and appropriate for the work performed. Oversight
audits are performed twice yearly.
There are three primary performance measures for assessing
contractors:
The QTC quality performance standard requires at least a
92 percent accuracy rate. Quarterly, 384 examination reports are
randomly selected from the ten VA regional offices and their BDD sites.
Reviews are conducted by the Medical Director of Contract Examinations
and C&P Service rating experts for accuracy.
The timeliness performance standard is 38 days measured
from the time the contractor receives the examination request until the
final examination report is entered into the electronic system for
retrieval.
The customer satisfaction performance standard is based on
a survey questionnaire given to the Veteran as part of the examination.
An independent contractor distributes, receives, and analyzes the
results. The questionnaire asks for information on the following:
medical office wait time; performance of medical administrative and
support staff; reasonableness of medical office visit time and place;
cleanliness of the medical office; performance and responsiveness of
the medical examiner; and the overall satisfaction with the medical
office visit. Answers provided by Veterans are converted to an overall
percentage rate. A customer satisfaction standard of at least 92
percent is required.
conclusion
Mr. Chairman, VA prides itself on providing consistent, high
quality care to Veterans, but we know there are times and locations
where we cannot meet every possible medical need for our Veterans. In
these situations, contracting and fee-basis agreements are important
complements to VA's national system of health care. We recognize the
importance of our responsibilities in the oversight of care purchased
outside our facilities or provided by contractors within our
facilities, and we continue to develop initiatives intended to improve
the oversight of these agreements. We are exploring opportunities
across the Department and across the government. Thank you again for
the opportunity to testify. My colleagues and I are prepared to answer
your questions.
Chairman Akaka. Thank you very much for your testimony, Mr.
Williams.
I would like to, before asking questions, ask Senator
Begich for any opening remarks he may have.
STATEMENT OF HON. MARK BEGICH,
U.S. SENATOR FROM ALASKA
Senator Begich. Mr. Chairman, I do not have any. I will
look forward to the questions because Senator Tester told me to
say that.
[Laughter.]
Chairman Akaka. Thank you very much, Senator Begich.
Mr. Williams, I thank you for bringing others to accompany
you here at this hearing. I just want to mention to you to feel
free to call on them as we move along with the questions,
though I will pose the questions to you.
Mr. Williams, what is the total amount that the VA spends
on outside providers including all health services?
Mr. Williams. Mr. Chairman, I would like to defer that to
Mr. Baker.
Mr. Baker. The answer is in 2008 we spent approximately $3
billion on contracted services and fee services, and this year
we estimate that we will spend approximately $3.8 billion.
Chairman Akaka. Can you describe how VA is able to monitor
such large spending?
Mr. Baker. We have standard financial controls in place.
Over the last 2\1/2\ years, we have developed a financial data
warehouse of information at our Veterans' Service Center. We
use that information to provide detailed financial information
concerning the use of fee-basis and contracted services
available with information at the medical center level, at the
division level, and at the national level. This information is
not at those levels and used for internal review and for
financial reporting across the organization, sir.
Chairman Akaka. Does VA have access to and routinely review
quality assurance information by contractors?
Mr. Williams. Yes, sir, we do; and we do that through a
number of means. Mr. Downs would be able to share with you some
of the aspects of contract oversight.
Mr. Downs. The contracting officer and the COTR, their
responsibility is to work with the program as they build those
quality measures into the contract for performance standards
and metrics.
The COTR then monitors that contract on a regular basis,
reports back to the contracting officer if there are any
difficulties, in which case then the contracting officer then
works with the vendor to correct those. We have regular reviews
that are conducted internally to ensure that the contractor is
performing up to the metrics he or she is supposed to.
We then also have outside reviewers. The OIG and GAO will
come by and review those contracts. They have a CAP review that
they conduct now on a regular bases, certainly among the CBOCs.
We have those internal reviews that we are using. Yes, sir.
Chairman Akaka. Recently, Mr. Williams, a review by the
Inspector General found that a contractor providing services at
a community clinic, did not follow VA's credentialing and
privileging policies. The question is: What will VA do to
ensure that contract providers are following these policies?
Mr. Williams. Thank you, Mr. Chairman.
There are several actions that we have initiated. One is to
ensure that the appropriate language is included in contracts
going
forward.
The second is the medical center, in addition to the COTR,
has a responsibility to review this information and make sure
it is incorporated into leadership discussions and appropriate
actions are communicated up through the channels to be taken.
At various levels in the contracting process, we have
individuals that also are reviewing the contracts against the
deliverables of that contract and decisions will be made based
upon those as to what training, education, or other actions
that may be necessary are taken.
I will defer to Mr. Downs for any additional comments.
Chairman Akaka. Mr. Williams, on overcharges for CBOC
contract care, a recent report from the Inspector General found
that VA had been charged by a clinic contractor for over 4,000
veterans who are no longer enrolled in that VA clinic.
What did VA do to address that specific problem and what
steps will the department take to prevent similar situations
from occurring in the future?
Mr. Williams. Mr. Chairman, I would like to defer to Mr.
Frye.
Chairman Akaka. Mr. Frye.
Mr. Frye. I have to admit that I am not familiar with the
CBOC operation, and I just looked at that IG report yesterday.
Those contracts are put in place by Veterans Health
Administration in the local contracting offices. Again, Mr.
Downs has outlined the fact that he has contracting officer
technical representatives looking at the performance of these
contractors and they are the first line of defense. They are
the eyes and ears of the contracting officer. If they see
something awry with the performance of the contractor, they are
to immediately bring that to the attention of the contracting
officer--the government contracting officer--so that remedial
action can take place.
Chairman Akaka. Thank you.
Mr. Baker. Mr. Chairman, if I might, in answer to your
question, one of your concerns was do we preclude this from
occurring going forward.
We do take these lessons learned from IG reports and
outside reviews and share them across our networks with our
network directors and facility directors. We have regular
conference calls and we have summary reports of these type of
reviews to make sure that information is shared so it can
integrate and the lessons learned can be shared with our
leadership. We make sure we do not repeat the same mistakes in
the future.
Mr. Williams. Mr. Chairman, if I may, in addition, from an
operations standpoint, we review the contracts. Every 2 weeks
we look at all of the contracts from the beginning of the
process through to the end of the process.
In addition to that, we have an advisory group that will
review contracts and bring them to me directly at this point
through the reorganization where we will review those contracts
and determine what additional actions--be it training,
education, or reconfiguration--that need to take place.
Chairman Akaka. Thank you.
I would like to call on Senator Tester for his questions.
Senator Tester. Thank you, Mr. Chairman.
We have learned from previous hearings that the disability
exam can be quite complicated, especially when exams involve
multiple body systems and a complex rating system.
Can you tell me how long it takes for a VA physician to
learn how to conduct the exams?
Mr. Williams. Sir, I do not have that specific information
with regard to the actual time it would take. I would add,
though, that we have a time requirement relative to the
completion of an examination--the actual completion of
examination.
Senator Tester. But I mean as far as what kind of regimen
the VA physician has to go through in order to be competent
when they step into the exam room.
Mr. Williams. Mr. Baker will address that.
Mr. Baker. We do have a certification program that was
begun approximately 1\1/2\ years ago for compensation and
pension exam providers. It was designed through our
compensation and pension exam program in Nashville.
Senator Tester. Typically how long does it take for a
physician to go through that program?
Mr. Baker. It depends to a certain extent on the specialty.
There is a general medical examination module, but there are
modules I think for approximately 29 specialty type exams.
I do not have the specific amount of time that each of
those modules is, but we will take that as a note for the
record to provide to the Committee.
Senator Tester. That would be good.
[The additional information requested during the hearing
follows:]
time to complete cpep certification/training modules
In 2007, the Compensation and Pension Examination Project (CPEP)
developed six web-based certification modules for Compensation and
Pension (C&P) exams; the certification process began in 2008. These
certification modules are designed to instruct providers on how to
effectively conduct and document C&P exams for rating purposes. The
intent is to provide a thorough understanding of the C&P process,
terminology, types of requests and strategies for writing exam reports
and opinions in order that providers can help ensure that Veterans
receive timely, thorough and fair evaluations of their claimed
conditions.
CPEP has produced a total of 19 training modules on performing and
documenting C&P exams. There are six certification modules: General
Certification, Musculoskeletal, Initial PTSD, Review PTSD, Initial
Mental Disorders and Review Mental Disorders.
There are 13 other informational CPEP modules: Aid and Attendance,
Cold Injury Exam, Diabetes Exam, Foot Exam, General Medical Exam,
Genitourinary Exam, Hand, Fingers & Thumbs Exam, Heart Exam, Muscle
Exam, Nerve/Neurology Exam, Prisoner of War Exam, Respiratory Exam and
Skin & Scar Exam.
The intended audience for the modules is C&P examiners, physicians,
physician assistants, psychiatrists, psychologists, nurses and nurse
practitioners. The clinicians can receive Accreditation Council for
Continuing Medical Education (ACCME) or American Nurses Credentialing
Center (ANCC) continuing education credits for each of the modules.
time to complete modules
The average time required to view each CPEP module and answer the
accompanying questions is provided below, but the time may vary
depending on the
clinician.
General Certification module: 1.5 hours
Musculoskeletal Certification module: 1 hour
Initial Mental Disorders Certification module: 1.5 hours
Review Mental Disorders Certification module: 1 hour
Initial PTSD Certification module: 2 hours
Review PTSD Certification module: 1 hour
Other informational training modules: 1 hour each
All C&P clinicians must complete the one and-a-half (1.5) hour
General Certification module. Those performing musculoskeletal exams
must complete that module also, for a total time of two and-a-half
(2.5) hours. Mental health specialists performing only review mental
health exams must complete the General Certification plus the two
review mental health modules for a total time of three and-a-half (3.5)
hours. Mental health specialists performing all four types of mental
health exams must complete the General Certification plus all four
mental health modules for a total time of seven hours.
time to learn to conduct exams
(regimen to be competent when clinician steps in the room)
From the summary above, we know that it takes one and-a-half to
seven hours to complete the CPEP certification process. Completing the
appropriate CPEP certification modules should provide a clinician with
the background and overview that he or she needs to perform a competent
C&P disability exam and report.
However, expertise in the C&P process is something that takes time
to acquire. Most clinicians are experienced in performing treating
exams, but not C&P disability exams, which are unique medical-legal
exams. Many new C&P clinicians will go through the certification
process and then shadow another clinician for a week or so. New C&P
clinicians often have their exam reports critiqued by more experienced
C&P clinicians for several weeks or longer.
As clinicians take time to attend C&P conferences, review results
from CPEP's quality reviews, discuss cases with colleagues, and gain
experience in interviewing and examining Veterans specifically for C&P
disability purposes, their expertise and skill as C&P clinicians
increases.
Senator Tester. You have 29 specialty exams. Does each
veteran have 29 docs take a look at him?
Mr. Baker. No. In terms of the rating requests that we
receive from the Veterans Benefits Administration, there are
approximately 29 templates for types of exams that are
requested from them. I think 29 is the correct number. I may be
off one or two.
Senator Tester. Typically how many docs look at a vet when
they do their exam?
Mr. Baker. My understanding is that for recently discharged
veterans, there are up to 11 disabilities that have been
requested; and in general, they require two or three exams at
least to complete the review of their body systems for the
disability exams that have been requested.
Senator Tester. Do you have any idea how long those exams
take?
Mr. Baker. I do not have that information, really.
Senator Tester. That is fine. Does the VA train the
contractor physicians in the same way they train the VA
physicians?
Mr. Baker. I cannot speak for QTC as to whether or not they
use our training modules or not. Mr. Mayes may have the answer.
Mr. Mayes. We did not specifically train the contract exam
providers but there are certain credentialing requirements that
they have to have before they can conduct a C&P examination.
All of the examiners or the contract providers that are
conducting C&P exams are physicians.
The other point that I would make is that the criteria by
which the exam is conducted is based on exam templates and exam
worksheets. This is a collaboration between the Veterans
Benefits Administration and the Veterans Health Administration.
We work with the medical experts to come up with the
protocol for the C&P exams, such that it gives us an exam
report and exam findings that allow us to match that up against
the VA rating schedule.
Senator Tester. So, what I am hearing you say--and you may
correct me--the critical component of this is not necessarily
the physician's level of expertise on how to conduct the exam,
but rather the template?
Mr. Mayes. I would not characterize it exactly that way,
Senator. I think it is critical that an examiner be properly
credentialed, be familiar, and understand how to apply that.
Senator Tester. When it comes to quality control, I am sure
you do assessments on the docs that do these 29 different types
of exams. Does the VA do quality control on those docs to make
sure that there is a level of adequacy and accuracy there?
Mr. Baker. The compensation and pension exam program that I
mentioned in Nashville has a comprehensive quality assurance
program for examinations conducted by VHA physicians. We do a
sample review of exams from each medical center for all
providers on a monthly basis and provide that information to
VBA and internally to VHA.
[Additional information provided by VA follows:]
Question. How does VBA ensure that field stations send accurate
examination requests to the contractors?
Response. The C&P Contract Management Staff reviews examination
requests on a daily basis. If the examination request is incomplete, it
is immediately sent back to the field station of jurisdiction for
correction. The Contract Management staff is in contact with the
examination coordinators at the regional offices daily to answer
questions and provide guidance. The staff holds monthly conference
calls with the examination coordinators to review any error trends and
update them on changes.
Senator Tester. What quality assurance process do you have
for the QTC folks?
Mr. Mayes. There are three elements to the measurement of
quality with respect to QTC and MES, the other contractor that
provides exam services.
We measure the contractor on timeliness. We measure the
contractor on quality. It is very similar to what we do under
the VHA exams with respect to quality--do they comply with the
criteria that is established for the exam report that then
allows our rater to evaluate the veteran's disability claim.
And then, also, we evaluate the provider on customer
satisfaction.
[Additional information provided by VA follows:]
Question. How does VBA ensure that contractors properly complete
examination requests?
Response. Both medical disability examination contractors are
reviewed for compliance on exam quality (92% or better), exam
timeliness (38 days to complete the request on average), and overall
customer satisfaction (90% or better).
To measure compliance with examination quality, the C&P Contract
Management Staff completes quality review on 530 completed examinations
quarterly. These reviews are in addition to reviews completed by the
contractors.
To measure examination timeliness, completed examinations are
pulled from the contractor's computer system into VA's system on a
nightly basis, and VA measures the number of days between the exam
request and delivery.
Overall customer satisfaction is measured through a Customer Survey
Card contract with AMTIS. AMTIS produces customer survey cards that are
sent to the contractors for insertion in the Veteran's examination
appointment letter. AMTIS compiles the card results and submits a
report to the Contract Management staff on a monthly basis. The average
return rate on the customer survey cards is 40 percent.
The Contract Management Staff also holds monthly conference calls
with both contractors to discuss issues and provide guidance on any
changing policies.
Senator Tester. Do you compare the outcomes of the
disability ratings between the contractors and the VA?
Mr. Mayes. For our purposes in making an entitlement
determination, we are concerned that the output--the exam
report--is adequate for us to evaluate the veteran's claim. To
that extent, we have standards in place for quality and we are
checking that both in VHA and with our contract providers.
Senator Tester. I did not note it and you do not have to
say it again. Are the outcomes of the disability ratings that
are given by VA and QTC, are they tracked?
Mr. Mayes. Yes, Senator, they are tracked. The quality is
tracked both for VHA exams, C&P exams, and contract-provided
exams.
Senator Tester. OK. My time is up. Thank you, Mr. Chairman.
Chairman Akaka. Thank you very much, Senator Tester.
Let me call on Senator Begich for your questions.
Senator Begich. Thank you very much, Mr. Chairman.
First, I have a more general question on HERO versus the
traditional fee-basis program. I know you are 2\1/2\ years into
the HERO program, and it seems to have--or at least in the
process of having--some success.
What is the long-term outlook that you would see in the
HERO program in the sense that it is on a 5-year demonstration
project; so what is next?
Mr. Williams. Sir, Mr. Baker will answer that question.
Mr. Baker. The HERO program, as you know, is a pilot
program with a potential of 5 years. We are getting ready and,
in fact, have exercised the third year of the contract, which
will start actually tomorrow.
We believe that the HERO contract has given us a wonderful
opportunity to learn some valuable lessons on our ability to
have national- or regional-level contracts, the type of
specifications we need for that contract, and how to interact
with our partners in providing those services.
I would say that going forward I would not expect that if
we were to recompete a HERO contract that it would be exactly
the way that we specified in our original contract.
There are many lessons that we have learned from both sides
of the equation, both from a VA perspective--in terms of
specifying the pricing schedule, some of the criteria in terms
of how we refer patients, and what our expectations are of the
provider--and I am sure the provider side has some feelings on
that as well.
We have used this as a test bed to learn lessons going
forward and we expect to continue to do that through the life
of the existing contract.
Senator Begich. Great. I just want a clarification on one
point. I do not remember who said it, but on the amount of
contracted services, you indicated $3 billion this year and
next year $3.8 billion. When I look at the IG report, it talks
about I think $1.6 billion. So, just help me understand.
Mr. Baker. The IG report was on outpatient pre-authorized
care only.
Senator Begich. So, a portion of the total----
Mr. Baker. Right, a portion of the total. But, the question
we were asked was about total cost of non-VA care, or purchased
care, so the numbers I provided were for that amount.
Senator Begich. Great. I do not know who would answer this,
maybe Mr. Williams. Do you agree with the IG report in their
analysis of what they have calculated in overpayments and those
kinds of issues?
Mr. Williams. I will defer to Mr. Baker.
Mr. Baker. You are talking about the fee-basis IG report
rather than the CBOC?
Senator Begich. Yes.
Mr. Baker. In general we agree with the IG report. We think
that there are some specific numbers, in terms of their 37
percent figure, that probably are an overstatement.
Senator Begich. How much overstatement would you say? I
mean is it double what you think it is; because I am going to
drive to the next question which is further discussion of the
accountability measures that you have in place or will have in
place.
So, is it a little bit over? 37 percent is a lot.
Mr. Baker. We agree with that.
Senator Begich. Give me an idea of what you think.
Mr. Baker. I cannot give you an exact number, but I can
tell you a couple of factors that I think need to be taken into
consideration.
One is that we have a mechanism where on our fee
authorizations we specify a certain payment amount and that
payment amount may not be in line with the 75th percentile that
is our fee schedule.
The IG considered that as an error on our part, saying we
should have paid on the 75th percentile. We actually have a
General Counsel opinion that says that we were correct in using
the authorized amount. So, that will have an impact of that
number.
They also included any discrepancy between the paid amount
and the amount that they calculated would be accurate, even if
it was less than a dollar. The industry standard is that many
of those would not have been counted.
So, we are doing a detailed review of their information. We
expect the number will go down but it still will be a number
that requires us to follow up with actions.
Senator Begich. Have you at any point in the last 3 or 4
years--I think this was a 4-year study--have any folks that you
do business with been canceled in the sense of outpatient care?
In other words, because of double billing or inappropriate
expenditures that appear for reimbursement? Have you ever
canceled anybody? Have you ever said, you know what, you have
an error rate that is too high, you are out? Have you ever done
that?
Mr. Baker. Not to my knowledge.
Senator Begich. OK. You can see where I am going here. It
is great to have a report and let us say it is 15 percent, let
us say it is half, say it is 18\1/2\ percent; it is still tens
of millions of dollars.
And if the contractor continues to perform the service and
all it amounts to is a lot of paper going back and forth but
you do not actually lay down hard on them and say, you know
what, we are not doing business with you anymore; that will
send a message and create a ripple effect to people who
inappropriately bill.
So, I guess I would urge you in your process of
reevaluating your procedures that is part of it: that you make
it clear that if you continually send poor records you are out,
period.
Then the next question I would have is do you have any
numbers that you can share with me or the Committee on how much
you have recouped in any of the overbillings or accounting
errors on the part of physicians or outpatient services?
Mr. Baker. I think we have some apples and oranges that are
being mixed here. In terms of the IG report and the 37 percent,
the vast majority of that was a determination that we had
inappropriately processed those bills internally, not that they
had been billed incorrectly by the providers.
So, in terms of saying that because of the IG report we
should have taken action against providers, I do not think that
is the case.
Senator Begich. OK. My time is pretty much up. But when I
read it, there is an amount overpaid--maybe it is defined
differently, how you define it--and then there is underpaid.
So, are you telling me all the overpaid are just VA
mistakes on the proper report paperwork and that everyone
should have been paid?
Mr. Baker. I am saying that in the IG report when they said
there were overpayments, they are saying that VA
inappropriately applied either its fee schedule or a Medicare
schedule that should have applied for what was billed to us,
and that was not a fault of the vendor but rather an internal
fault of VA, and that we need to improve our procedures.
Senator Begich. Let me end there. So in no case, a vendor
has received double payment for any services?
Mr. Baker. No. There were some situations where VA should
recoup and we are following up on those specific cases----
Senator Begich. That is the question.
Mr. Baker [continuing]. As identified in the IG report and
we will be requesting repayment to VA where that overpayment
has occurred.
Senator Begich. I will end there. Thank you, Mr. Chairman.
I am sorry I went over a little bit.
Chairman Akaka. Thank you, Senator Begich.
Senator Burr, your opening statement and your questions.
STATEMENT OF HON. RICHARD BURR, RANKING MEMBER,
U.S. SENATOR FROM NORTH CAROLINA
Senator Burr. Mr. Chairman, I thank you and I apologize to
our witnesses for my tardiness. I would ask unanimous consent
that my opening statement be a part of the record and I will
use the time for questions.
[The prepared statement of Senator Burr follows:]
Prepared Statement of Hon. Richard Burr, Ranking Member,
U.S. Senator from North Carolina
Thank you Mr. Chairman. Welcome to our witnesses this morning.
We are here to look at how VA ensures veterans are receiving
quality, cost-effective healthcare services when it purchases those
services from the private sector.
I think many would be surprised to learn the extent to which VA
relies on outside providers to deliver services to veterans and certain
survivors of veterans.
Of course contract care should never be used to supplant the VA
health care system. VA provides services that are specialized to the
unique needs of veterans and is now known as one of the top providers
of medical care in the country. But, in some cases, it does make sense
to complement that care with the help of community providers.
I welcome this discussion. I've heard from many North Carolinians
who live in rural communities who tell me that while they like the VA
health care system, they'd rather avoid the long trip and just see
their community doctor in some cases.
For this reason I'm excited about the rural health contract pilot
program that was part of Public Law 110-487. VISN 6 will be a part of
that pilot, which will give veterans residing long distances from VA
medical facilities the option of receiving their care in their
community.
Using local community providers can save rural veterans from long,
tiresome trips. It can also be a way to deal with veterans' healthcare
needs in rural America, especially when there are very few providers to
meet the current need, particularly in specialty care. Therefore,
establishing relationships with community providers is essential.
Of course when VA uses taxpayer dollars to purchase care for
veterans we must ensure that we're getting three key things in return:
timely access; quality care; and a fair price for the contracted
services.
I look forward to hearing from our witnesses to see if the
contracts which are the focus of today's hearing address these three
key elements.
A couple of other points I think are worth noting. VA spends more
than $3 billion on healthcare provided outside its doors. Obviously
some of this care is governed under a contract relationship. But the
bulk of it is regular fee-based care.
I'm interested to see what quality and cost mechanisms are in place
for fee-based care as well. A comparison between care purchased under
contract and regular fee-based care will help determine whether VA
should favor one approach over the other.
Finally, I'm interested to see VA's own measures when it comes to
performance, quality, and cost. We should hold those VA does business
with to the same standard as VA holds itself. To ensure that VA
healthcare continues to serve our veterans well, VA must set meaningful
measures in place to compare itself with the private sector and vice
versa.
Mr. Chairman, I look forward to the testimony and, again, thank you
for calling the hearing. I yield back.
Senator Burr. Mr. Baker, I will direct this at you. Well,
let me pickup on what Senator Begich was asking. Does the VA
track error rates in fee-for-service health care provided? With
fee-based health care, do you track the error rates?
Mr. Baker. We do not have an effective mechanism of
identifying the error rate to track at this point, Senator.
Senator Burr. That is in large measure because the patient
may only go to the fee-based physician once or the times that
are prescribed by the VA and there is no requirement by the
provider to supply the medical outcome from a standpoint of
what their observation was or their treatment was. Is that
correct?
Mr. Baker. In contracted care and we do----
Senator Burr. I am separating contract care from fee-based.
In contracting care, you can stipulate in the contract that
they have to report their error experience.
Mr. Baker. With our past practice, we may or may not have
gotten the medical information, which I think is your point. We
have modified our directions to the local facilities indicating
that they should indicate on the individual authorization forms
a requirement that providers provide to VA the medical
information generated by the treatment that was authorized.
Senator Burr. Is it not safe to say that if we do not
capture the treatment that was provided, then we have an
incomplete medical history on that veteran?
Mr. Baker. That would be correct, sir.
Senator Burr. Within the VA system, if the rest of their
care was delivered there, it would be delivered without the
knowledge of that one, two, or three times that they went
outside the system at the direction of the VA?
Mr. Baker. If that information is not available nor sent
back to us, you are correct, sir.
Senator Burr. I have been contacted by a urologist in North
Carolina who is now refusing to see any new VA patients. He
indicates that it is due to a history of VA diagnosing patients
and then sending them outside with less than complete
evaluations required and no additional clinical surveillance.
I do not want to practice medicine in this hearing. But my
point would be this: are we asking for the right things when we
send people out and do we attempt to do any post-treatment
surveillance that is beneficial to the overall health care
treatment of the veteran?
Mr. Baker. My reaction, sir, is that we do try to do that.
That the fee-basis and contract care both are considered an
integral part of our treatment of veterans and that we do have
monitoring systems and quality performance standards in place
so that whether the care is outside of VA or inside the VA that
we monitor the outcome for the patient.
Senator Burr. But there is no requirement on any fee-based
service to provide the medical records to the VA, am I correct?
Mr. Baker. If we indicated that on the authorization form
as I indicated earlier, then we would expect that that is an
implied contract and they would provide that information to us,
sir.
Senator Burr. What are the three things that trigger within
VA the decision to contract outside or to arrange for a fee-
based service outside?
Mr. Baker. Availability within VA and geographic
accessibility are the principal issues.
Senator Burr. OK. Any other ones?
Mr. Baker. I cannot remember off the top, sir.
Senator Burr. Good. According to the National Council for
Community Behavioral Health Care, VA is competing for the
limited number of mental health providers, a situation that may
be, and I quote, ``. . . exacerbating an existing mental health
workforce shortage, and potentially compromising the long-term
treatment and rehabilitation needs of returning veterans.''
What has been suggested is a model of collaboration versus
a VA attempt to take all of the health care professionals in
mental health and bring them under the VA's ownership.
What are your thoughts about the idea of creating these
targeted partnerships with existing community providers?
Mr. Williams. Senator, I would suggest we look for every
opportunity to partner within the community to find a way to
improve our access for our veterans and to provide the care
that they need.
We work very closely with our affiliations in universities
and medical schools across the country to meet many other
specialty care needs.
With regards to the idea of a model where we can improve
our access to care and to be a greater partner in the delivery
of that service, I would think that would be a good idea.
But, we continue to be afforded the opportunity to meet or
exceed the expectations of the mental health community. We work
diligently to try to get those providers, those specialist,
that staff on board, and oftentimes as an adjunct to the
recruitment and retention that we enjoy, we still have to rely
on our universities and our community partners to provide that
service.
To answer your question, again I think we look forward to
the opportunity to explore partnership opportunities to improve
access.
Senator Burr. I appreciate that because I think it is an
important component. I hope you understand that we are
concerned about what the council raised and that is, if the VA
absorbs 99 percent of the mental health providers into the VA
system, there is nobody to partner with on the outside.
I think they are raising a red flag very early to say maybe
the goal within the Veterans Administration--from the
standpoint of having all the mental health providers on the
employment of the Veterans Administration--might cause a real
problem.
I mean statistically, 25 percent of enrollees in the VA
seek all their care within the VA, while 75 percent treat some
combination of care with both the VA and outside.
For mental health we are getting to a point with the number
of providers available outside of the VA system that vets are
going to have to seek 100 percent of their mental health care
within the VA because that is going to be where the only
providers are.
I understand the unbelievable requirements within the
system now to treat mental health. Much of it emanates from
this Committee. I would only say it is time to understand why
the council is releasing this red flag for us to rethink
whether we want a good balance of private providers in mental
health matched with employees of the Veterans Administration.
If not, we are limited to one path and that path is not
necessarily always the most cost-effective or the most
effective from the standpoint treatment.
I thank the Chairman for allowing me to go over.
Chairman Akaka. Thank you very much, Senator Burr.
I would like to call on Senator Burris for his questions.
STATEMENT OF HON. ROLAND W. BURRIS,
U.S. SENATOR FROM ILLINOIS
Senator Burris. Thank you, Mr. Chairman.
Mr. Chairman, I have an opening statement. I would ask for
unanimous consent that it also be included in the record.
Chairman Akaka. It will be included in the record.
[The prepared statement of Senator Burris follows:]
Prepared Statement from Hon. Roland W. Burris, U.S. Senator from
Illinois
Thank you, Mr. Chairman. I am glad that our committee has decided
to tackle this important issue today, because I believe that we are not
seeing the proper transparency and accountability in the VA's
contracting procedures.
I fully appreciate that in some cases the VA must seek services
outside of VA facilities. For example, it would not be cost-effective
for the VA to staff every potential medical specialist in every
geographic area.
It is perfectly reasonable to use outside providers in these cases.
However, I am concerned that VA may be relying on outside entities
too heavily, and that some contracts may not provide the best possible
service or value to our veterans.
Contracts should be used sparingly, and only in cases where the VA
is unable to effectively provide a necessary service.
As I have said many times, our veterans deserve the best possible
care, and no entity is in a better position to understand the unique
needs of our veterans than VA providers.
Through this hearing, I hope we can clarify the VA's method for
determining the costs and benefits of contract services and work toward
improvements in that
process.
Senator Burris. I will go straight to my questions to
follow up on what Senator Burr and Senator Begich asked.
I am concerned about--could you give me an accounting of
the costs associated with the HERO project when compared to the
fee-for-service model. Is there an accounting that you can give
for that?
Mr. Williams. Mr. Baker will take that question, sir.
Mr. Baker. We have done an analysis of the HERO contract. I
think you heard Mr. Williams indicate that at a very high level
the Humana contract in general 89-90 percent are at Medicare
level or below and that Delta Dental is 80 percent or below of
the dental standard.
In terms of actual costs per patient----
Senator Burris. Yes.
Mr. Baker [continuing]. The cost per patient for the HERO
patient is something over $1,000 for medical care--outpatient
medical care. The gross fee per patient is over $4,200.
I am not sure that the comparison of patient to patient in
HERO and all of the fee programs is necessarily a direct
comparison but those are how the numbers come out.
In terms of Delta Dental, the fee average cost of $1,600
and the average for HERO was approximately $1,500. So
approximately $100 less.
Senator Burris. So, that is the side-by-side fee for
service.
Mr. Baker. C o m p a r i s o n o f f e e v e r s u s t h e
H E R O c o s t s p e r
patient.
Senator Burris. Why is it that the contract services are
necessary for 20 percent of compensation and pension medical
examinations?
Mr. Williams. Mr. Mayes.
Senator Burris. Mr. Mayes.
Mr. Mayes. Yes, Senator. Essentially, it is the same
criteria that Mr. Baker pointed out earlier. It is an access
issue. We looked around the country at areas where the VHA was
having a challenge in I guess providing the C&P exams in a
timely manner. Some of those challenges were related to
securing adequate folks to do those exams.
When we analyzed the lay of the land with regard to
providing those needs, we collaborated with VHA and we put
contracts in place that covered those jurisdictions.
Senator Burris. So, why cannot the VA hire those physician
directly? You said there is a problem with the VA staffing and
recruitment in this regard?
Mr. Mayes. I cannot speak to whether or not VHA can hire
the physicians directly. What I can say is that when we were
trying to target where it was we were going to utilize the
contracted services, we were looking at the performance of the
VHA exams at the time. This goes back to, initially, 1998 with
the QTC contract.
So, that was the basis for where it was within the country
that we were going to target these contracted services. I would
defer to my colleagues with respect to the hiring.
Senator Burris. What about the QTC contract that is in
close proximity to Washington, DC, in Alexandria, VA? Why is
the VA unable to directly hire examiners in our Nation's
capitol? I mean you are contracting right out here in the
vicinity?
Mr. Mayes. We are utilizing, for example, QTC exam
providers in support of our BDD program. Two of the regional
offices handle our BDD and quick start claims. So we have an
opportunity to have exam providers in close proximity to
military installations where we have servicemembers who are
separating.
Senator Burris. Is there a VA hospital here in the
vicinity? VA facilities here?
Mr. Mayes. Yes, Senator, there is.
Senator Burris. Is there a staffing problem there?
Mr. Mayes. Again I would have to defer to my colleagues on
staffing the C&P exams directly.
Mr. Williams. Senator, I am not aware of any specific
staffing problems, particularly at the DC facility. There are
only three facilities in the immediate area: the DC facility
which handles the primary catchment area for the District and
some of the surrounding counties; Martinsburg VA Medical
Center, which is a much smaller facility; and then we have a
Baltimore facility, which is an acute care facility.
With regards to, and again I cannot speak to QTC, but with
regards to the recruitment piece, typically where we have
challenges is in the specialty area where we are trying to find
neurologists
or where we might be looking at audiology, and some of those
specialties.
When we look at this, we look at it from a couple of
standpoints. One is, are we able to complete an examination in
35 days. That is one of our marks that we have been looking at.
So, it is a rate.
On average on a national basis, we complete these physicals
in about 30 days, but we do have outliers. We do have a
monitoring system in place where if we see a trend of 2 months
where there is an increase in the rate, if it goes beyond the
35 days, then we intervene from a leadership standpoint. Many
of our facilities are able to complete those physicals in less
than 30 days.
The other piece is a quality measure. I think VBA might be
able to speak more definitively to that. But in the quality
measure, we look at the number of returned physicals.
If we get a significant number, whatever that threshold may
be, then there is an indication there with regard to the amount
of staffing, training and education of the staffing, and
possibly of the availability of specialists that can address
these issues.
The third component is the satisfaction piece, what
feedback we get from the veterans that are receiving these
types of services and benefits.
But with regard specifically to the Washington area, I am
not personally aware of any hiring challenges. From time to
time, depending on the rate and volume of physicals that we get
at any one time, we do have some challenges with getting those
out in a timely manner. Then we rely on QTC and other means to
address those physical exam needs.
Senator Burris. Thank you, Mr. Chairman. I am sorry my time
did go over. Thank you very much.
Chairman Akaka. Thank you, Senator Burris.
Mr. Williams, I understand VA is creating four new regional
offices to oversee local contracts. My question is: what are
the advantages of this new structure and how will it fix some
of the issues that are being discussed at this time: over
billing; quality-control; and access to care?
Mr. Williams. Thank you, Mr. Chairman. I will defer to Mr.
Downs.
Chairman Akaka. Mr. Downs.
Mr. Downs. Mr. Chairman, this is a whole movement toward
professionalism of acquisition in the Veterans Health
Administration and throughout VA.
We have implemented a number of initiatives. Mr. Frye, when
he came on board in his position, he had PriceWaterhouseCooper
do a review of all VA acquisition. They came forth with a
number of recommendations that would improve the efficiency of
our operation and improve acquisition in the areas of quality,
oversight, monitoring, policy, procedures, standardization, and
business practices, and put all of the acquisition people into
one chain of command from the facility level all the way up to
Washington and remove the influence of the local directors, the
network directors, and others so that the acquisition officer,
the contracting officer, could concentrate on his job--
fulfilling the requirements of the program managers in
developing the requirements, getting the contracts out, and
making sure that they are properly monitored and that oversight
was conducted.
This whole process is going to make us much more efficient.
We are dealing with nearly 22,700 active contracts this year.
These individuals who do these contracts with this new
organization--we will be able to make sure that they receive
all the training that is required; that they will be properly
certified. In fact, that is a requirement. They cannot perform
their jobs unless they are certified. They will have continuing
education.
The four regional offices. Their job is to: monitor the
quality of the contracts; do the audits; make sure that they
are compliant with all the regulations; and make sure they
follow up on the COTRs, which the contracting technical
representatives who are the program folks responsible for
monitoring the contract to make sure it is being met, which
relates to some of the earlier questions.
So, this is a whole movement toward professionalizing and
moving our acquisition organization up in line, not only with
the other agencies in the government, but to move us forward
into the 21st century.
Chairman Akaka. Thank you.
Mr. Williams, the Office of Management and Budget directed
Federal agencies to end their overreliance on contractors. What
has VA done to comply with this direction?
Mr. Williams. Mr. Chairman, I defer to Mr. Jan Frye.
Mr. Frye. Thank you, Mr. Chairman. In accordance with the
Office of Management and Budget's direction of July 29, 2009,
each agency subject to the CFO Act--the Chief Financial Officer
Act--must conduct a pilot under which they perform a multi-
sector, human capital analysis of at least one organization,
program, project, or activity where there are concerns about
the extent of reliance on contractors and take appropriate
steps to address any identified weaknesses.
The VA is in the process of identifying a program or
activity that will serve as VA's pilot program. The VA is due
to notify OMB of its candidate organization for the pilot
employee program tomorrow, October 1.
Chairman Akaka. I am glad to hear this. It was mentioned
during the testimony that there is, as you said, a policy not
to rely entirely on contractors.
Mr. Williams, QTC was awarded additional years on its
contract for good performance. Yet a report by the Inspector
General on payment issues under the contract resulted in QTC
paying VA millions of dollars because of overbilling. Can you
explain this apparent inconsistency?
Mr. Williams. Sir, I will defer to Mr. Mayes.
Chairman Akaka. Mr. Mayes.
Mr. Mayes. Mr. Chairman, I will take that question. First
of all, I would like to point out that the VA had brought in an
auditor and had discovered the overbilling in the first place.
The OIG then came in following the audit that we had
implemented and identified or confirmed some of that
overbilling.
Following that, we sent a bill of collection to QTC and
they did repay the government for the overbilling. They not
only repaid the overbilling for the term of the initial audit
that we had initiated, but also going back to the beginning of
the contract. So, QTC was very forthcoming and repaid the
government.
Regarding the award terms, the way the contract was
structured was based on performance from the veteran's
perspective: the timeliness of the exam; the quality of the
exam report, as we talked about; and then customer
satisfaction.
So, the award terms based on that contract were not linked
to billing. QTC has met the performance targets that were
established in the contract. I would mention that they did not
receive award terms for all of the years of the contract, which
were one base year and four option years. They only received
award terms for 3 out of those 5 years.
I hope that answers your question, Mr. Chairman.
Chairman Akaka. Thank you.
Senator Tester.
Senator Tester. Thank you, Mr. Chairman.
I wanted to go back to my previous round of questions and
get clarification. I assume we go through Mr. Williams, though
I think you are probably going to refer it to Mr. Mayes because
it was a question he answered.
The VA does track the outcomes of disability ratings by the
contract and by the VA. I believe that is what I heard you say
and I just want to make sure that that is correct.
Mr. Mayes. We track the exam quality, not the rating
outcome. The quality of the exam in many cases forms the basis
for the rating decision.
Senator Tester. OK. But ultimately in the end you track the
outcomes of those exams that are done as far as potential
problems that the vet would have. Do you track those kind of
things, if they are appealed, all that stuff?
Mr. Mayes. No, sir, we do not track whether they are
appealed.
Senator Tester. So, not to put words in your mouth, but
what you are tracking is performance and timeliness of the
exams, to refer to the Chairman's question?
Mr. Mayes. Performance in terms of timeliness, performance
in terms of quality as measured with compliance to the exam
template, and then performance with respect to customer
satisfaction.
Senator Tester. How do you determine the customer
satisfaction? That is what I am getting at.
Mr. Mayes. Understood, Senator. I am sorry if I created----
Senator Tester. No, you have not.
Mr. Mayes. The customer satisfaction--we have a separate
contract with another vendor. They administer customer
satisfaction questionnaires. Those questionnaires are provided
to the veteran prior to----
Senator Tester. Can you tell me what the results of those
questionnaires are as far as the contractor versus the VA
exams?
Mr. Mayes. I can only speak to the contractors. C&P Service
administers the contracts for QTC and for MES, the two
providers. Veterans say they are consistently highly satisfied.
Senator Tester. They are consistently highly satisfied with
the work that the contractors are doing. How about the VA? Are
they consistently highly satisfied with the work the VA is
doing?
Mr. Mayes. I cannot speak to that, Senator. I will have to
defer to my colleagues.
Mr. Baker. We do not have a systemwide customer
satisfaction specifically for C&P exams. We do have individual
medical centers and some networks that have established focus
groups, interviews, and some customer satisfaction.
We do have an initiative to initiate such a customer
satisfaction program in 2010.
Senator Tester. All right. I want to go back to the
previous round of questions. I just want to make sure my
understanding is correct; and this is probably for Mr. Mayes
again.
You give the contractors a VA template or form but you do
not train them, and I assume you do not train them how to use
that form either; or if I am wrong on that, clarify in any way.
Mr. Mayes. I will take this for the record and provide a
fully developed response, Senator. We are interacting with the
contractors on a regular basis and we have a staff within C&P
Service that is monitoring the exam requests because those
requests come from VBA regional office personnel. Then we have
a statistical quality control mechanism on the reports that
come back.
So, we are looking at if there are problems meeting the
quality indicators as the exams come back. We then, are
constantly in communication with vendors with respect to any
findings that we discover on the reports that are coming back--
really with our people too--because we have got to make sure
that it is an adequate request. We have to ask for the right
exam.
Response to Request Arising During the Hearing by Hon. Jon Tester to
Bradley Mayes, Director, Compensation and Pension Service, Veterans
Benefits Administration, U.S. Department of Veterans Affairs
Question. How do the medical disability examination contractors
(QTC and MES) train their medical examiners?
Response. Both Medical Disability Examination contracts require the
contractors do the following in consultation with VA:
Prepare and implement a training program for all
examiners;
Provide orientation and instructions for conducting
examinations based on VA worksheets;
Provide training to ensure that examiners have an
appropriate attitude toward veterans and their unique circumstances;
Explain the concept of presumptive diagnoses in view of
the unique circumstances of military service;
Ensure that examiners understand how to assess and
document pain in accordance with VA regulations;
Provide training to explain the differences between VA
disability examination protocols versus examination protocols for
treatment purposes;
Demonstrate a quality assurance program;
Monitor physicians' offices to ensure veterans are seen
within 30 minutes of the appointment time; and
Make any corrections and return them to VA within 14
business days.
Senator Tester. It would seem to me that the appeals rate
would be something that you would use as a method by which to
determine adequacy.
D o y o u u s e a p p e a l s r a t e s? I a m
t a l k i n g a b o u t V A v e r s u s contractor.
Mr. Mayes. Appeal with the decision?
Senator Tester. Appeal with the examination. That is
correct, when they come back.
Mr. Mayes. The exam is used to form the basis for our
entitlement determination.
Senator Tester. That is correct.
Mr. Mayes. We are not measuring a notice of disagreement
with the entitlement determination. We are not looking at that
in those cases where that entitlement determination is based on
a contract exam as opposed to a VHA-provided exam.
Senator Tester. Why not? It just seems to me--and just tell
me Mr. Williams or Mr. Mayes, if you can tell me what you do
now. There is probably a good reason for it.
Mr. Mayes. Senator, I am back to--it is a legal decision.
The entitlement determination is a legal decision that is made
by our raters in VA regional offices.
Senator Tester. Based on that exam.
Mr. Mayes. Based on that exam, yes, sir.
If the exam is returned as adequate, whether it comes from
VHA or it comes to the contract exam provider, then we have
received the information--the medical information, limitation
of motion, or the impairment of functioning or medical
impairment--we have received what information we need for us
then to make the legal determination.
So, we are looking at the quality of the exam to see if it
meets our needs, but we are not then going beyond that to look
at appeal rates. That is something I can take back.
Senator Tester. I just want to make sure the vet is treated
fairly. Appealing stuff is not fun. And if the appeal rate--and
I do not know that it is or is not--if the appeal rate is
higher with the contracted versus the in-house examiners, then
maybe we need to take a look--or if it is the other way
around--take a look at what is going on because that is a big
thing.
One last question. The VA budget, does it differentiate--
and this probably is not a question for you, Mr. Mayes, so you
can take a break.
Mr. Mayes. I appreciate that.
Senator Tester. Does it differentiate the submission
between the costs of providing CBOC contract care and CBOC care
provided by the VA? Can you tell me why there is not a
differentiation between those costs provided in the budget?
Mr. Williams. No, sir, I am not able to answer that
specifically. I will take that for the record.
Senator Tester. If somebody can get back to me on that I
would be very appreciative. I appreciate you folks being here
today. I appreciate the work you do. I am sorry I cannot be
here for the second panel because we could further clarify some
of these questions.
Thank you very much.
[The requested information follows:]
Chairman Akaka. Thank you, Senator Tester.
Senator Begich.
Senator Begich. Thank you very much, Mr. Chairman.
I just have some follow-up. And like Mr. Tester, I have to
preside at 11 o'clock, so I will not be able to stay for a
sizable amount of the second panel.
Mr. Mayes, I hate to put you back on the spot here but you
made a good point. I want to follow up on it in regard to what
sounded like you did an internal audit. When was that done?
Mr. Mayes. We did an internal audit. It was for the period
June 2005 to May 2006. We have subsequently put in a regular
audit process and we are auditing both of our contract exam
providers twice a year at this point which we will continue in
the future. These are some of the lessons we are learning.
Senator Begich. The process of repaying the billing or the
inappropriate billing or however you want to categorize it, do
you extend that contract every single year then?
Explain the contract procedure. Did you make modifications
to the contract with the vendors in order to have a process to
ensure--I understand your internal audit--that they have a
certain responsibility or change in their procedures or a
change in the way they operate; did you change anything in the
contract?
Mr. Mayes. We have modified the contract to, I guess,
refine the billing procedures is maybe the best way to say it,
to make sure there is no ambiguity in what charges can be made
for what services. We have done that. We are in the process of
recompeting both contracts, so we are further refining that.
The contracts with the auditors are obviously separate and
apart from the contracts for the vendors. So, what we wanted to
do was not rely on just our internal quality controls--or for
that matter the vendor's internal quality controls--but bring
in a disinterested third party to take a look and protect our
investment.
Senator Begich. Within the contracts that are about to go
out, will you have some procedure or some process that clearly
stipulates, you know, if they have a certain error rate or
percent of their amount allocated that goes in the wrong
direction, meaning as you go through a process in theory if you
are auditing and you are looking at the numbers, the problems
should go down.
Otherwise you are just burning up money to verify what you
probably can already identify. Is that part of the new
contracting procedure? I do not know who can answer that.
Mr. Mayes. It is a very good point. We have an integrated
product team that involves people from acquisitions and the
program, and that is one of the issues that we are in the
process of discussing.
Senator Begich. Let me put it another way. Should it be and
will it be?
Mr. Mayes. Yes, I think that vendors should be accountable.
Senator Begich. Good. The customer satisfaction, again I
know Senator Tester put you on the spot. I know customer
satisfaction. I know when I was the chair of the Alaska Student
Loan Corporation for 7 years, we did an analysis every quarter
of our customers in determining the satisfaction of the quality
of work, processing, and all the stuff that goes with it.
It also drove everything from how long they held on the
phone waiting for service, how long it took them to get an
appointment for loan processing--everything we did then helped
us develop a better product and a better service.
Do you have that kind of robust customer service analysis?
I know that is all you are in, the business of customer
service, basically. I mean you are a service agency.
Mr. Mayes. Yes, Senator, that is exactly right. I can tell
you what we look at in terms of customer satisfaction. In the
contract 90 percent of the appointments--the veterans should
not wait more than half an hour to get into the appointment.
That is a component of our customer satisfaction.
Senator Begich. That is a benchmark, a measurement tool.
Mr. Mayes. Also there are actually five statements on that
card that I referenced earlier in my response: the performance
of administrative staff--the question is are you very
satisfied, somewhat satisfied with that; reasonableness of
appointment time and place; cleanliness of examiner's office;
concern and attention demonstrated by the examiner; and then
overall satisfaction with the services provided.
Senator Begich. Let me end with you there and say I would
love to see annual numbers for the last few years, a trend line
of what that looks like in some of those categories.
Mr. Mayes. It is very high.
Mr. Begich. That is great. If you can share with me that.
Mr. Mayes. We can do that, yes, sir.
[The additional information requested during the hearing
follows:]
Senator Begich. The last thing. I will just end on this and
that is the whole issue of credentialing folks who do service
for the VA, and this could be just a very simple yes or no or
you can get back to me.
If someone is already doing services for like Indian Health
Services, are they automatically credentialed in the VA for the
services provided to VA?
If they are providing the exact same service to the Indian
Health Services, can they just go right over or do you create a
whole new process? If you do not want to answer to the detail
now----
Mr. Williams. Senator, I will take that for the record.
Mr. Begich. That would be great. Just of those services
because that is the general question. I will leave it at that.
Thank you very much, Mr. Chairman.
Response to Request Arising During the Hearing by Hon. Mark Begich to
Joseph A. Williams, Jr., Acting Deputy Under Secretary for Health,
Operations and Management, Veterans Health Administration, U.S.
Department of Veterans Affairs
Question. If someone is doing services for Indian Health Services,
are they automatically credentialed in the VA for the services provided
to VA? If they are providing the exact same service to the Indian
Health Services, can they just go right over or do we create a whole
new process?
Response. VA requires all practitioners delivering care in VA
medical facilities to be credentialed and privileged by VA in
accordance with VA policy prior to delivering care in the facility.
This includes not only VA employees, but also all contract providers
working on site. VA does not accept credentialing completed by another
agency. In those instances where VA contracts for care with a specific
provider outside of the VA facility, VA similarly requires that the
specific provider be credentialed and privileged by the VA medical
facility contracting for the provider to deliver care.
There are instances where VA plays the role of payer for care
outside of VA through contractual agreements that do not list a
specified provider. VA facility directors must ensure that there are
oversight mechanisms in place to demonstrate consistent and effective
care in accordance with the Joint Commission standards for
accreditation, but there is not a requirement for VA credentialing and
privileging, since the agency is not directing the care.
We note that, for the specific situation of providers shared
between VA and the Department of Defense (DOD), there is currently a
workgroup charged by the VA/DOD Executive Committee that is developing
a Memorandum of Understanding (MOU) for the exchange of credentialing
information between the two departments. The MOU will establish the
guidelines for the sharing of credentialing data collected by one
department to be used in the privileging of the practitioner by the
other department, therefore facilitating the utilization of personnel
across both departments.
Chairman Akaka. Thank you very much, Senator Begich.
Mr. Williams, apparently VA recently published a directive
barring the release of a contractor's inspections of VA nursing
homes. I understand the VA said that the records contain
protected information. Since taxpayers paid for those reports,
should not that information be made public and how is the
information in them protected if it has not disclosed the
identity of either the patient or the provider?
Mr. Williams. Mr. Chairman, I am not intimately
knowledgeable about that situation.
Chairman Akaka. I am referring to the long-term care
institute.
Mr. Williams. I will have to take that question for the
record, sir, and get back to you.
Chairman Akaka. Thank you.
Response to Request Arising During the Hearing by Hon. Daniel K. Akaka
to Joseph A. Williams, Jr., Acting Deputy Under Secretary for Health,
Operations and Management, Veterans Health Administration, U.S.
Department of Veterans Affairs
Question. Since taxpayers paid for those reports, should not that
information be made public and how is the information in them protected
if it has not disclosed the identity of either the patient or the
provider? I am referring to the long-term care institute.
Response. The reports that VA generates from its unannounced review
program are for the purpose of managing quality of care and quality of
life in VA Community Living Centers (CLC), formerly known as VA Nursing
Homes. There is no directive barring the release of these documents.
Rather, the documents are internal quality management documents and are
therefore not subject to release under the Freedom of Information Act
(FOIA) as stated in 38 U.S.C. Sec. 5705.
38 U.S.C. Sec. 5705 provides that records and documents created by
VHA as part of a designated medical quality assurance program are
confidential and privileged and may not be disclosed to any person or
entity except when specifically authorized by statute. When requested
under FOIA, the Act's Exception 3 provides that records should be
withheld from disclosure when such records are specifically exempted
from disclosure by another statute. Thus, the CLC reports must be
withheld under FOIA Exemption 3, providing 38 U.S.C. Sec. 5705 as the
applicable statute.
The requirements for documents to be protected by 38 U.S.C.
Sec. 5705 include the following:
First, the activity that generated the document must be
conducted by or for VA to improve the quality of health care. The CLC
reports are conducted as a means to perform unannounced program
monitoring of quality of care provided in the CLCs.
The final requirement for a document to be confidential
under 38 U.S.C. Sec. 5705 is that the document generated must have been
previously designed in writing as a quality management document which
can produce confidential documents. In VHA Directive 2008-077, Quality
Management (QM) and Patient Safety Activities that can Generate
Confidential Documents, the Under Secretary for Health specifically
designates under paragraph 4(a)(1)(k) that documents resulting from
service and program monitoring activities are confidential. The
Directive is enclosed.
A verbal reminder of the FOIA restriction on release of quality
management documents was given on a VA national conference call on
Friday, September 25, 2009, to ensure VA's compliance with statutory
requirements.
Chairman Akaka. Under contract management, in light of some
high-profile pass/failures like CoreFLS, what is being done to
contract management in VA?
Mr. Williams. I will refer to Mr. Frye.
Chairman Akaka. Mr. Frye.
Mr. Frye. Thank you, Mr. Chairman.
First of all, I would like to distinguish between contract
management and program management. Program managers are
responsible for the cost schedule, performance, and quality of
their programs.
Contracting officers support program managers by putting
contracts in place and that is the tool that the program
manager uses to get to his or her objectives.
So, oftentimes we intermix program management and contract
management, and I just wanted to make that distinction if you
will.
We have made a number of improvements in our overall VA
contracting in the last year. For instance in the area of
training, we have known we have had a training shortfall for
sometime. We have stood up the VA Acquisition Academy in
Frederick, Maryland. This is the only acquisition academy that
I am aware of outside of the Department of Defense.
In this academy we train our contracting officers. Very
soon we will begin training program and project managers. We
train our contracting officer technical representatives; and we
have also implemented an intern program where we are recruiting
30 interns per year.
This is a 3-year program. It is very robust. We have just
recently brought on our second group of 30. So, at the end of 3
years, we will have approximately 100 interns in our program.
We are doing everything we can within our budget to raise
up some of the younger folks coming straight out of school, and
in some cases older people, as well, who decided to change
career fields.
But the point is, we need to fill our pipeline with some
very well trained professionals. It is very difficult,
impossible as a matter fact, to just take someone off the
street and put them to work in the contract arena. It takes
time and money to get it done.
In addition, we have stood up three new procurement
organizations in the VA. As you are well aware, we have had
problems in the information technology arena.
We took advantage of the Army's base realignment and
closure of Fort Monmouth, NJ. As you may know, they are moving
to Aberdeen Proving Ground. We decided about a year ago to open
up an office there in Eatontown, NJ. We are in the process of
hiring over 200 contracting professionals as well as attorneys,
engineers, and program managers; and this will greatly assist
us in the execution of our information technology mission
across the VA.
In addition, we have stood up an office that we termed the
Center for Acquisition Innovation in Frederick, MD. The
strategy there is that it is easier to have people drive
against traffic. Instead of coming to Washington, DC, stay in
Frederick, MD, or drive against the grain of traffic. We have
recruited thus far over 30 contracting professionals there.
They are mostly involved in the VA central office procurement
requirement.
We have also stood an office up in Austin, TX. That office
will be engaged primarily in support of the Office of
Information Technology.
We have recently fielded a contract writing system across
the VA that was fully operationally capable in July 2007. But
just a few years ago we had no contract writing system. That
has been a large undertaking for us.
We are installing business intelligence tools on top of
that contract writing system so that we can measure things like
procurement action lead time.
And we can actually go to our customers and say, look, we
have your requirement and we predict that we will have your
requirement on contract in a given period of time instead of
leaving them guessing when we would get it done.
We are developing the acquisition corps, that is, c-o-r-p-
s, much like the U.S. Army's. This is a process where we will
identify critical program management and contract positions
across the VA. We will then assign only certified acquisition
corps members for those critical positions.
As also indicated earlier, we have developed processes like
integrated product teams. The most difficult piece of the
procurement business, the acquisition business, is developing
the requirement.
We no longer do that by allowing someone to go in the
corner and write a requirement by themselves. We now use
integrated product teams so we have a collaborative effort in
writing the requirements up front.
We are also moving to seek a lot of information from
industry partners. We recently held a forum at the Ritz Carlton
near the Pentagon, which we invited 120 vendors, and we have
ongoing efforts with them to assist us. We had them identify
areas where they think we are deficient. We are going to have
them help us hopefully come to some means to improve our
processes.
I would like to take a couple of minutes to say something
about what we are doing on the program management side of the
house.
You may or may not know that the Assistant Secretary for
Information and Technology is reviewing all IT programs in the
VA. They recently put, I believe, 27 programs ``on pause'' as
they are calling it. They are taking a very close look at these
programs. The programs may be canceled, but obviously they are
under duress either in terms of performance or schedule, or
perhaps cost.
The OIT is reviewing all of the IT programs. They are
applying their program management accounting assistant or PMAS
system to these programs. Again, some programs may be canceled
or restructured if they are behind schedule or over budget.
Program managers across the VA will soon be trained in our
VA Acquisition Academy. We are planning on training several
thousand program managers next year. This will not be done
alone at our academy. We will have industry partners help us do
that.
It will be an attempt to bring up all program managers at a
given level, and then we will go from there. There is further
training to be done but we want to make sure that all of them
have a common grounding in program management skills.
I think all of those things take a holistic approach to
improving the big ``A,'' Acquisition, not only for contracting
or procurement, but program management and all of the other
skill sets that we need to effectively manage our programs
across the VA.
Chairman Akaka. Thank you very much, Mr. Frye.
I want to thank you very much for your responses. Before I
dismiss this panel, I would like you to take back to VA my
concern about the situation in American Samoa and the
Philippines.
I want to know that VA is doing everything possible to help
in the wake of the recent natural disaster there. Many veterans
in American Samoa and the Philippines have served this country
honorably and all of those affected deserve any help we can
give them. I thought I would mention it to you and to the VA
through you.
So, I want to thank you very much again. This area of
contracting, of course, is a huge concern to all of us and we
need to look at the challenges that we are facing in
contracting and begin to try to improve the system. No one
knows better than you what needs to be done, but we certainly
want be a part of that. However we can help, legislatively
even, we would like to do that.
Again, I thank you very much first panel.
Response to Post-Hearing Questions Submitted by Hon. Daniel K. Akaka to
Hon. Joseph A. Williams, Jr., Acting Deputy Under Secretary for Health
for Operations and Management, VHA, U.S. Department of Veterans
Affairs
Question 1. VA has over 2000 active contracts. At the hearing, ACS
testified that each of their 6 contracts was interpreted differently by
local contracting officials. What will the restructuring of the
acquisitions organization do to remedy this problem for ACS and all
other VA contractors?
Response. It is important the Department of Veterans Affairs (VA)
industry partners receive the same general guidance and interpretations
from the Department's acquisition workforce. To begin achieving this
the has Secretary directed that the Office of Acquisition, Logistics
and Construction establish a plan that moves the Department's
contracting operations to an integrated model with the potential to go
to a centralized model based on a series of performance measures to be
reviewed in 18-24 months. Organizing the VA Acquisition Enterprise in
an integrated fashion and commodity-driven Centers of Excellence will
enhance VA's ability to deploy uniform guidance to all contracting
officers, regardless of geographic location. While organizational
change will play a role in our relationships with suppliers the key
driver is educating our contracting staffs on how they relate to our
customers. To provide our contracting officers these critical skills
the VA Acquisition Academy has an in-depth program that offers
contracting officers across the Department the necessary courses to
hone their skills in performing their jobs. As a condition of
maintaining their buying warrants contracting officers must take 80
hours of continuing education courses every twenty four months to
remain certified.
Question 2. Please provide a written description of how you are
complying with OMB's directive to reduce agency reliance on
contractors, including a detailed description of the implementation
status of OMB's required pilot program.
Response. VA is complying with OMB's directive to reduce agency
reliance on contractors by implementing OMB's required pilot program.
VA identified the Office of IT Enterprise Strategy, Policy, Plans and
Programs in the Office of Information & Technology to oversee its
Multi-Sector Workforce pilot. VA assembled a pilot team with
representation from the Office of Information Technology; Office of
Human Resources and Administration; Office of Budget; Office of Policy
and Planning; Office of Acquisition and Logistics; Veterans Health
Administration; National Cemetery Administration; and Veterans Benefits
Administration. The team has followed the ``Framework for Managing the
Multi-Sector Workforce'' in OMB Memorandum M-09-26. The team has
analyzed the strategic plans, contracts, FAIR Act Inventory
classifications, cost models, workforce competencies and sources of
talent. The team has identified the limitations on the number of
authorized Federal positions and the cumbersome hiring process as
obstacles to bringing work in-house. An action plan to address these
obstacles to recruitment and hiring is currently under development.
Question 3. Cardinal Health, Inc. holds a contract with VA worth
$136 million. What services are provided to VA under this contract, and
in what facilities? Please include the location of the facilities
(city, state).
Response. The Cardinal Health, Inc. (Cardinal) contract is a prime
vendor contract for the distribution of medical and surgical products.
Medical Surgical Prime Vendors (MSPVs) warehouse and distribute
products for VA identified on various VA national, regional and local
contracts, and agreements. MSPVs deliver products to VA facilities
within 24-72 hours. This allows VA to obtain the medical and surgical
products specified, from a single prime vendor for all facilities under
the contract. This provides ease of ordering, reduces the number of
purchase orders, reduces the number of shipments received, the number
of invoices processed by medical centers, and helps reduce facility
inventory levels.
The following VA facilities [Veterans Integrated Service Network
(VISN)] and other Government Agencies are covered by the Cardinal
contract:
VISN 3
VA Medical Center
130 W. Kingsbridge Road, Bronx, NY 10468
VA Hudson Valley Healthcare System
- Castle Point, NY 12511
- 622 Albany Post Road, Montrose, NY 10548
VA New Jersey Healthcare System
- 385 Tremont Avenue, East Orange, NJ 07018
- 151 Knollcroft Road, Lyons, NJ 07939
- Outpatient Clinic, 970 Route 70, Brick, NJ 08724
VA New York Harbor Healthcare System:
- 800 Poly Place, Brooklyn, NY 11209
- 423 E. 23rd Street, New York, NY 10010
- 179th Street and Linden Boulevard, St. Albans, NY 11425
VA Medical Center
79 Middleville Road, Northport, NY 11768
VISN 4
VA Medical Center
2907 Pleasant Valley Boulevard, Altoona, PA 16602
VA Medical Center
325 New Castle Road, Butler, PA 16001
VA Medical Center
One Medical Center Drive, Clarksburg, WV 26301
VA Medical Center
1400 Black Horse Hill Road, Coatesville, PA 19320
VA Medical Center
135 E. 38 Street, Erie, PA 16504
VA Medical Center
1700 S. Lincoln Avenue, Lebanon, PA 17042
VA Medical Center
University & Woodland Avenue, Philadelphia, PA 19104
VA Pittsburg Healthcare System
- Progressive Care Center (Aspinwall Division)
Delafield Road, Pittsburg, PA 15260
- 7180 Highland Drive, Pittsburgh, PA 15206
- University Drive, Pittsburgh, PA 15240
VA Medical Center
1111 E. End Boulevard, Wilkes-Barre, PA 18711
VA Medical Center
1601 Kirkwood Highway, Wilmington, DE 19805
VISN 5
VA Maryland Healthcare System:
- 10 N. Greene Street, Baltimore, MD 21201
- Bldg. #11, Perry Point, MD 21902
VA Medical Center
510 Butler Avenue, Martinsburg, WV 25401
VA Medical Center
50 Irving Street, N.W., Washington, DC 20422
VISN 6
VA Medical Center
1100 Tunnel Road, Asheville, NC 28805
VA Medical Center
200 Veterans Avenue, Beckley, WV 25801
VA Medical Center
508 Fulton Street, Durham, NC 27705
VA Medical Center
2300 Ramsey Street, Fayetteville, NC 28301
VA Medical Center
100 Emancipation Drive, Hampton, VA 23667
VA Medical Center
1201 Broad Rock Road, Richmond, VA 23249
VA Medical Center
1970 Roanoke Blvd., Salem, VA 24153
VA Outpatient Clinic
190 Kimel Park Drive, Winston-Salem, NC 27103
VA Medical Center
1601 Brenner Avenue, Salisbury, NC 28144
Charlotte Outpatient Clinic
8601 University East Drive, Charlotte, NC 28213
VISN 7
VA Medical Center
1670 Clairmont Road, Decatur (Atlanta), GA 30033
VA Medical Center
Uptown Warehouse, 1 Freedom Way, Augusta, GA 30904
VA Medical Center
(Downtown), 800 Bailie Drive, Augusta, GA 30901
VA Medical Center
700 S. 19th Street, Birmingham, AL 35233
VA Central Alabama Healthcare System
- 215 Perry Hill Road, Montgomery, AL 36109
- 2400 Hospital Road, Tuskegee, AL 36083
VA Medical Center
109 Bee Street, Charleston, SC 29401
(Ship to: 1001 Trident Street, Trident Industrial Park,
Hanahan, SC 29406)
VA Medical Center
6439 Garners Ferry Road, Columbia, SC 29209
VA Medical Center
1826 Veterans Boulevard, Dublin, GA 31021
VA Medical Center
3701 Loop Road E, Tuscaloosa, AL 35404
VISN 9
VA Medical Center
1540 Spring Valley, Huntington, WV 25704
VA Medical Center
1101 Veterans Drive, Lexington, KY 40502
VA Medical Center
2250 Leestown Road, Bldg. 12, Lexington, KY 40511
VA Medical Center
800 Zorn Avenue, Louisville, KY 40206
VA Medical Center
1030 Jefferson Avenue, Memphis, TN 38104
VA Medical Center
Sidney & Lamont Street, Mountain Home, TN 37684
Tennessee Valley Healthcare System
- 3400 Lebanon Pike, Murfreesboro, TN 37129
- 1310 24th Avenue S., Nashville, TN 37212
VA Outpatient Clinic
9031 Cross Park Drive, Knoxville, TN 37923
VISN 10
VA Medical Center
10000 Brecksville Road, Brecksville, OH 44141
VA Medical Center
Bldg. 23 (Warehouse) & Bldg. 24 (SPD) 17273 State Rt. 104
Chillicothe, OH 45601
VA Medical Center
3200 Vine Street, Cincinnati, OH 45220
VA Medical Center
10701 E. Boulevard, Cleveland, OH 44106
VA Ambulatory Care Center
420 N. James Road, Columbus, OH 43219
VA Outpatient Clinic
543 Taylor Avenue, Columbus, OH 43203
VA Medical Center
4100 W. 3rd Street (Buildings #126 & #330), Dayton, OH 45428
VISN 11
VA Ann Arbor Healthcare System
2215 Fuller Street, Ann Arbor, MI 48105
VA Medical Center
5500 Armstrong Road, Battle Creek, MI 49015
VA Illiana Healthcare System
1900 E. Main Street, Danville, IL 61832
VA Medical Center
4646 John R. Detroit, MI 48201
VA Medical Center
1481 W. 10th Street, Indianapolis, IN 46202
VA Northern Indiana Healthcare System
2121 Lake Avenue, Fort Wayne, IN 46805
1700 E. 38th Street, Marion, IN 46953
VA Medical Center
1500 Weiss St., Saginaw, MI 48602
VISN 12
Chicago Healthcare System
2030 W. Taylor Street, Chicago, IL 60012
VA Medical Center
5th & Roosevelt Road., (Supply Warehouse and Bldg. #4), Hines,
IL 60141
VA Medical Center
325 East ``H'' Street, Iron Mountain, MI 49801
VA Medical Center
2500 Overlook Terrace, Madison, WI 53705
VA Medical Center
- 5000 W. National Avenue (Bldg. 111), Milwaukee, WI 53295
- Appleton CBOC, 10 Tri-Park Way, Appleton, WI 54914
VA Medical Center
- 3001 Green Bay Road, (Bldg. 138) North Chicago, IL 60064
- Green Bay CBOC, 141 Siegler Street, Green Bay, WI 54303
VA Medical Center
- 500 E. Veterans Street (Bldg. #452), Tomah, WI 54660
- Emergency Pharmacy Service, Bldg. 37, Hines, IL 60141
VISN 15
VA Medical Center
800 Hospital Dr, Columbia, MO 65201
VA Eastern Kansas Healthcare System
- 4101 S. 4th Street Trafficway (Leavenworth Campus)
Leavenworth, KS 66048
- 2200 Gage Boulevard (Topeka Campus), Topeka, KS 66622
VA Medical Center
4801 Linwood Boulevard, Kansas City, MO 64128
VA Medical Center
2401 West Main Street, Marion, IL 62959
VA Medical Center
1500 N. Westwood Blvd., Poplar Bluff, MO 64128
VA Medical Center
915 N. Grand Blvd., St. Louis, MO 63106
VA Medical Center
5500 E. Kellogg, Wichita, KS 67218
VISN 16
VA Medical Center
Alexandria, LA 713306
VA Medical Center
1100 N. College Avenue, Fayetteville, AR 72703
VA Gulf Coast Healthcare System
400 Veterans Avenue, Biloxi, MS 39531
VA Medical Center
2002 Holcombe Boulevard, Houston, TX 77030
VA Medical Center
1500 E. Woodrow Wilson Drive, Jackson, MS 39216
Central Arkansas Veterans Healthcare System
- 2200 Forts Roots Drive (NLR), Building #182, N. Little Rock,
AR 72114
- 4300 W. 7th Street, (LR), Little Rock, AR 72205
VA Medical Center
1011 Honor Heights Drive, Muskogee, OK 74401
VA Medical Center
1601 Perdido Street, New Orleans, LA 70112
VA Medical Center
921 NE 13th Street, Oklahoma City, OK 73104
VA Medical Center
510 E. Stoner Avenue, Shreveport, LA 71101
VISN 17
VA North Texas Healthcare System
- 1201 E. 9th St., Bonham, TX 75418
- 4500 S. Lancaster Road, (Bldg. #44), Dallas, TX 75216
- 4500 S. Lancaster Road, (Bldg 2j Dock), Dallas, TX 75216
VA Central Texas Veterans Healthcare System
1901 Veterans Memorial Drive, Temple, TX 76504
VA South Texas Veterans Healthcare System
7400 Merton Minter Blvd, San Antonio, TX 78229
VA Outpatient Clinic
2901 Montopolis Drive, Austin, TX 78741
VA Outpatient Clinic
300 West Rosedale Street, Fort Worth, TX 76104
VA Supply Warehouse
3600 Memorial Boulevard, Kerrville, TX 78028
Brownwood CBOC
2600 Memorial Park Drive, Brownwood, TX 76801
Cedar Park CBOC
701 E. Whitestone Boulevard, Cedar Park, TX 78613
College Station CBOC
1605 Rock Prairie Road, College Station, TX 77845
Palestine Community CBOC
3215 W. Oak Street, Palestine, TX 75801
VISN 18
VA Amarillo Healthcare System
6010 Amarillo Boulevard, W. Amarillo, TX 79106
VA El Paso Healthcare System
300 N. Piedras Street, El Paso, TX 79930
VA New Mexico Healthcare System
1501 San Pedro Drive SE, Albuquerque, NM 87108
VA N. Arizona Healthcare System
500 N. Hwy 89, Prescott, AZ 86313
VA Medical Center
650 E. Indian School Road, Phoenix, AZ 85012
VA S. Arizona Healthcare System
3601 S. 6th Avenue, Tucson, AZ 85723
VA W. Texas Healthcare System
300 Veterans Boulevard, Big Spring, TX 79720
VA Outpatient Clinic
6104 Avenue, Q South Drive, Lubbock, TX 79412
VISN 19
VA Medical Center
2360 E. Pershing Boulevard, Cheyenne, WY 82001
Eastern Colorado Healthcare System
1055 Clermont Street, Denver, CO 80220
VA Montana Healthcare System
1892 Williams Street, Fort Harrison, MT 59636
VA Medical Center
2121 N. Avenue, Grand Junction, CO 81501
VA Salt Lake City Healthcare System
500 Foothill Drive, Salt Lake City, UT 84148
VA Medical Center
1898 Fort Road, (Bldgs. #35 & #71), Sheridan, WY 82801
VA Outpatient Clinic
1300 Fortino Boulevard, Suite B, Pueblo, CO 81008
Miles City Clinic and Nursing Home
210 S. Winchester, Miles City, MT 59310
VISN 20
VA Medical Center
500 W. Fort St., Boise, ID 83702
VA Medical Center
3710 SW US Veterans Hospital Road, Portland, OR 97239
VA Medical Center
4th Plain & St. Johns Road, Vancouver, WA 98661
VA Roseburg Healthcare System
913 NW Garden Valley Boulevard, Roseburg, OR 97470
VA Puget Sound Healthcare System
1660 S. Columbian Way, Seattle, WA 98108
VA Medical Center
4815 N. Assembly Street, Spokane, WA 99205
VA Medical Center
77 Wainwright Drive, Walla, Walla, WA 99362
Southern Oregon Rehabilitation Center & Clinics
8495 Crater Lake, White City, OR 97503
Oregon Veterans Home
700 Veterans Drive, The Dalles, OR 97058
VISN 22
VA Loma Linda Healthcare System
11201 Benton Street, Loma Linda, CA 92357
VA Long Beach Healthcare System
5901 E. 7th Street, Long Beach, CA 90822
VA Greater L.A. Healthcare System
11301 Willshire Boulevard, Los Angeles, CA 90073
VA So. Nevada Healthcare System
P.O. Box 360001, N. Las Vegas, NV 89036
VA San Diego Healthcare System
3350 La Jolla Village Drive, San Diego, CA 92161
VA SepuAE1lveda Ambulatory Care Center
Bldg. 200, 16111 Plumber, N. Hills, CA 90073
Hawaii
VA Pacific Island Healthcare System
459 Patterson Road, Honolulu, HI 96819
VA CBOC--Hilo
1285 Waianuenue Avenue, Suite 211, Hilo, HI 96720
VA PTSD Residential Rehabilitation Program--Hilo
891 Ululani Street, Hilo, HI 96720
VA CBOC--Kona
75-5995 Kuakini Highway, Suite 413, Kailua-Kona, HI 96740
VA CBOC--Kauai
3367 Kuhio Highway, Suite 200, Lihue, HI 96766
VA CBOC--Maui
203 Ho'ohana Street, Suite 300, Kahului, HI 96732
VA CBOC--Guam
US Naval Hospital, Bldg. 1, E-200, Box 7608, Agana Heights,
Guam 96919
Alaska
Alaska VA Healthcare System
2925 Debarr Road, Anchorage, AK 99508
other government agency (oga)
Indian Health Services
National Supply Service Center
501 NE 122nd Street, Suite F, Oklahoma City, OK 73114-8138
WW Hasting Hospital
100 S. Bliss, Tahlequah, OK 74464
Claremore Indian Hospital
101 S. Moore Street, Claremore, OK 74017
Choctaw Nation Health Care Center
1 Choctaw Way, Talihina, OK 74571
Lawton IHS Hospital
1515 Lawrie Tatum Road, North of Lawton, Lawton, OK 73507
Choctaw Nation Health Clinic
902 East Lincoln Road, Idabel, OK 74745
Choctaw Nation Health Center
P.O. Box 340, 410 North M. Hugo, OK 74743
Rubin White Health Clinic
109 Kerr Avenue, Poteau, OK 74953
Choctaw Nation Clinic
1300 Martin Luther King Drive, Broken Bow, OK 74728
Choctaw Nation Health Center
1127 S. George Nigh Expressway, McAlester, OK 74501
Choctaw Health Center
210 Hospital Circle, Philadelphia, MS 39350-6781
Wewoka Clinic
P.O. Box 1475, US State Highway 56 & 270 Junction, Wewoka, OK
74884-1475
Clinton IHS Health Center
Rt. 1, Box 3060, Clinton, OK 73601-9303
El Reno Health Center
1631-A East Highway 66, El Reno, OK 73036-5769
Watonga Health Center
Rt. 1, Box 34-A, 1 Mile S on Highway 281, Watonga, Oklahoma
73772
Cherokee Indian Hospital
HC-1 Box 9700, Kickapoo Tribal Health Reservation, Rosita
Valley Road, Cherokee, NC 28771
Federal Bureau of Prisons
Federal Correctional Complex
5880 State Highway 67 South, Florence, CO 81226-7500
Federal Correctional Complex
Federal Medical Center, Old North Carolina Highway 75, Butner,
NC 27509
Question 4. In a staff briefing, VA stated that their industrial
fee was lower than any other Federal agencies. Do you intend to adjust
this fee in light of the increased costs associated with restructuring
the Acquisitions Department? What do you anticipate the cost of the
restructuring to be?
Response. At this time, VA does not plan to increase the industrial
funding fee (currently at 0.5 percent). The Department plans to charge
fees for contractual services provided by the new organization and to
use the flexibility of the Supply Fund to manage restructuring costs.
The Department will have better projections of the cost of
restructuring as we continue to define the new organization. The
implementation plan for this restructuring is anticipated to be
complete by the end of the third quarter of FY 2010.
Question 5. Mr. Brown testified that program officers are
responsible for oversight of the programs, while contracting officers
are only responsible for the contracts. How do contracting officers
communicate with program managers to ensure that the terms of the
contract comply with the quality standards of the program?
Response. (Please note this question references testimony given by
Mr. Brown. However, this testimony was actually provided by Mr.
Frederick Downs, Jr., Chief Prosthetics and Clinical Logistics Officer,
Veterans Health Administration.) Contracting officers (CO) are actively
engaged with program managers in the acquisition planning phase of the
procurement process to ensure that appropriate contract administration
procedures are established including: (a) a list of terms and
conditions related to administration functions; b) contract milestones;
(c) Quality Assurance Guidelines; (d) Inspection and Acceptance
procedures; and (e) modification process. Contracting Officer's
Technical Representatives (COTRs) are subject matter experts in given
program offices and communicate and serve as a bridge between the
Contracting Officers and Program Offices. The CO delegates limited
oversight functions to the COTR to ensure the contractors' performance
and delivery schedule are in accordance with the terms and conditions
of the contract. Any issues related to the terms and performance of the
contract is reported to the CO by the COTR. The CO then communicates
with the program office based on the method of communication
established at the pre-award meeting.
Question 6. VA employs individuals who purchase goods or services
for the agency who are not GS-1102 contract specialists. In what
acquisitions and purchasing roles are these individuals currently
utilized?
Response. Warranted non-1102 purchasing agents are used for small
purchasing activities of supplies, services, and prosthetics equipment
for open market procurements below the simplified acquisition threshold
(SAT) ($100,000), and delivery and task orders up to the maximum order
limit against Federal supply schedule contracts.
Question 7. VA informed staff in a briefing that VA intends to
certify purchasing agents who are not GS-1102 contract specialists.
What are the advantages to certification? Has VA engaged AFGE or other
employee organizations about this potential change?
Response. Certifying non-1102 purchasing agents offers several
advantages and benefits to VA including:
(a) Standardizing core training, education and experience
requirements to assure uniformity of performance and acquisition
standards;
(b) Developing a trained, professional corps of acquisition
professionals skilled and dedicated to deliver the best value in
supplies and services to the agency and the Government;
(c) Certifying supports the implementation of the Office of Federal
Procurement Policy Letter 05-01, Developing and Managing the
Acquisition Workforce to better train and establish contracting and
procurement personnel; and
(d) Standardizing small purchasing procedures and processes across
VA constituent agencies and offices.
VA will reach out to AFGE and relevant employee groups once
certification standards and practices are established to preserve
collective bargaining agreements and to enhance employee participation
in improving agency acquisition practices.
Question 8. If contractors for dialysis services change, are
veterans already receiving dialysis offered the option of continuing at
the same facility, or are they required to change to a new facility?
Response. When contracts are established, VHA will make an
assessment on the appropriate timeframe to move patients to a new
contract. These decisions are based on clinical needs of the Veterans.
If there are no clinical concerns, VA will transition Veterans to new
contract providers, which may entail referring patients to a different
facility. This change will also consider an appropriate transition time
to assure quality of care is not impacted. In the case of this specific
dialysis contract, assessments are made concerning the most clinically
appropriate setting, Veterans are notified in advance of VA's decision
and when appropriate, provided clinical appeal rights and due process.
Question 9. In the Independent Budget for FY10, the following
statement appears on p. 145: ``VA does not track this care [purchased
care], its related costs, outcomes, or customer satisfaction levels.''
Is this true for care purchased by VA on a fee-for-service basis? If
so, does VA intend to change the current process?
Response. VHA does track and monitor purchased care, including
those services purchased under contracts or in the traditional fee-for-
service program. Monitors of expenditures occur on a routine basis,
both at the VA Medical Center level and the enterprise level. Within
contracts, VHA track results based on the clinical services purchased.
For example, when diagnostic services are purchased under a contract,
VHA includes this documentation in its electronic medical record.
Contractual metrics are tied to each contract. Within Project HERO,
metrics are received on a monthly and quarterly basis. Monthly metrics
include items such as patient wait times, appointments received within
30 days of request, and return of clinical information (30 day
standard).
At present, customer satisfaction is routinely assessed as a
component of the Project HERO program. VHA is developing an initiative
to expand this customer satisfaction assessment to all purchased care
services. This initiative is currently in the initial planning phases.
Question 10. Do all facilities process claims from private
providers for fee services in the same way? If not, how do processes
vary, and what is being done to create an IT infrastructure that would
permit standardization?
Response. Although the organizational structure for processing
claims varies among facilities, VA uses its standardized software
product, known as ``VistA Fee'' to process Fee Basis claims for
payment. The processing of claims for services purchased by contract or
sharing agreement may be accomplished using means other than VistA Fee,
such as online certification.
VistA Fee was developed in the mid-1990s. Its automated processing
capabilities need modernization to keep abreast of coding, billing and
payment changes in the industry, such as automated code-editing
practices, as well as updates to its processing capabilities to
accommodate legislative changes.
A full analysis of the existing and future needs of a claims
processing replacement system for all VA-purchased care is underway. In
the interim, VA is installing a commercial off-the-shelf (COTS) product
on top of VistA Fee, the Fee Basis Claims (FBCS) that improves
inventory management through use of scanning capabilities, claims
editing, and automated processing capabilities in the payment of non-VA
health care claims.
Question 11. Exactly how many current contracts for health services
does VA have, and how does VA track performance under those contracts?
This should include two categories: all contracts paid for out of the
medical services appropriation, and a second category for those
contracts paid for from other sources.
Response. The VA Electronic Contract Management System (eCMS)
currently contains 4,524 active Health Care Resources contracts.
Contracting Officers (COs) assign a designation of health care when
entering contract records into eCMS based on the type of service being
procured, not by funding/appropriation. VA eCMS, owned by the Office of
Acquisition and Logistics (OA&L), is the official system of record for
VA contract actions. The system currently does not have the
functionality to allow VA to pull databased on the funding/
appropriation codes.
COs track contract performance by obtaining contract performance
information from their designated Contracting Officer Technical
Representative (COTRs). Through the issuance of the COTR delegation of
authority, COs delegate routine contract administration functions,
which includes monitoring contract performance to their COTRs. The role
of the COTR is to monitor the contractors' performance to ensure
performance conforms to the contract's terms and conditions, and to
elevate any concerns, issues, or suggested actions to the COs as
necessary. COs also advise contractors of identified performance issues
and request action plans to resolve issues. COs utilize all remedies
available under VA and Federal Acquisition Regulations to deal with
contractors that fail to perform. Performance issues are documented
accordingly in the contract file.
Question 12. VA has a goal of completing contract renewals in 140
calendar days or 240 calendar days in the event a pre-award review is
necessary. Vendors have reported to the Committee that GSA completes
this process in 60 days or less. Why does it take VA longer to complete
contract renewals?
Response. VA's Procurement Reform Taskforce (PRTF) established a
metric of 180 calendar days to complete a Federal supply schedule (FSS)
offer negotiation, which is the standard used to measure progress under
the program. Procedural Guideline #22, an internal VA document
establishing contract audit procedures, also provides for an additional
90 calendar days for the Office of Inspector General to complete any
required pre-award reviews. General Services Administration (GSA)
confirmed with VA that its normal processing times are in line with
what VA experiences. There are two major differences between VA and GSA
program management. These are:
(a) GSA implemented a Quick Program allowing for some offers to be
streamlined and completed within 30 work days. These offers must meet
specific criteria to include having a structured commercial pricing
scheme and a straight forward, streamlined proposal. Also, these
vendors must complete pre-offer training assignments requiring
completion of various compliance checks prior to even submitting offers
for consideration. VA is currently moving toward implementing a similar
program, limited to select offers that can be identified as straight
forward and meeting pre-offer training requirements. VA is currently
formulating the requirements and processes needed for this type of
program. The program draft is expected to be completed in June 2010.
Once approved, all FSS solicitations will be updated to include the
provisions for the Quick Program including the requirement for pre-
offer training. We expect the program will be in place by December
2010.
(b) For offers that do not meet the criteria for the Quick Program,
mainly those offers from current or past FSS contractors who had annual
Federal sales of $3 million or more, a pre-award review must be
performed. VA, with GSA's approval, continues to maintain the
requirement for pre-award reviews. This adds time to the process,
increasing overall workload and overall processing times. VA not only
establishes and awards the FSSs for health care related products and
services; it also has a vested interest as a buyer. Because the health
care industry has a complex matrix of customers and related terms and
conditions, VA performs these pre-award reviews to ensure a fair and
reasonable price is attained. It should be noted that the GSA timeline
for processing offers which do not fall under the Quick Program, is
comparable to VA's timeline.
Question 13. VA's Office of Inspector General Report 05-01670-04
(October 15, 2007), as well as an earlier report from 2001, recommends
that medical device manufacturers be required to contract directly with
the Federal Government. What is VA's position on this recommendation?
Response. VA believes mandating that all medical device
manufacturers deal directly with VA would prevent many small businesses
from doing business with VA and/or other Federal agencies. Many
manufacturers do not have a distributor network to sell and fill
orders. Additionally, those manufacturers with an established
distributor network may be forced to renegotiate contracts with
distributors as a VA mandate may put the firms in ``breach of
contract'' with those distributors.
Question 14. In VISN 23, the Black Hills VA Health Care System was
budgeted for $17 million in FY10 for non-VA care, but spent $25 million
in FY09. How much of the spending in FY09 is for care furnished under
Project HERO, and how is it that this system would budget for less non-
VA care in FY10 than was incurred in FY09?
Response. In FY09, Black Hills Health Care System (BHHCS) spent
$185,254 on care purchased through the Project HERO contracts with
Humana Veterans Healthcare Services and Delta Dental Federal Services.
Overall spending for care purchased in the community by Black Hills in
FY09 was just over $25M. The budget for FY2010 in Black Hills for
purchased care is $24M. Throughout VISN 23, VAMCs are working to
maximize the use of ``within VA network'' resources where possible and
to assure efficient use of non-VA Healthcare dollars when referrals
into the community are necessary. Black Hills is expected to gain
efficiencies through effective screening to assure referrals are in
line with evidence-based care and use of Project HERO where available
and when there is a cost-benefit. Therefore, the budget for FY10 is
less than the FY09 actual spending.
Question 15. How many complaints has VA received from veterans
concerning the timeliness or quality of compensation and pension
examinations provided by VHA compared to those provided under contract?
Describe the actions taken to address such complaints.
Response. VA sends customer surveys to Veterans for each contract
medical exam they attend. The majority of complaints or comments are
received through this medium, although Veterans occasionally contact
their local Regional Office (RO) with a concern. The chart on the next
page summarizes surveys received regarding timeliness and quality.
Table 1.--Contract Exams Customer Service: Timeliness and Quality
January 26, 2009-September 25, 2009
------------------------------------------------------------------------
Veterans
Surveys Veterans Veterans ``very ``somewhat
Contractor Returned waiting > dissatisfied'' dissatisfied''
1 hour with examiner with examiner
------------------------------------------------------------------------
MES 4,456 91 81 52
QTC 34,199 754 617 661
------------------------------------------------------------------------
To address complaints, Compensation & Pension (C&P) contacts the
contractors and asks them to contact the Veteran. The contractor then
reports the status to VBA. If an acceptable outcome is not achieved,
the contractor is either asked to not utilize the examiner again or to
put the examiner on notice.
VA has no record of receiving Veterans' complaints about the
timeliness or quality of compensation and pension examinations
performed by VHA vis-a-vis those performed by contract providers.
However, the Compensation and Pension Examination Program (CPEP) is in
the process of developing a VHA C&P customer satisfaction survey. The
survey questions have been field-tested and are awaiting OMB
approval.
Question 16. Describe the procedures for identifying VHA and
contracted C&P examiners whose examinations or reports do not comply
with VA policy, and the actions taken when non-compliance is
identified.
Response. VBA does not have access to information from VHA for a
comparison. Each medical disability examination administered by a
contractor for C&P is reviewed for quality based on Automated Medical
Information Exchange (AMIE) worksheet compliance. Each contractor's
Quality Analysis staff completes a review prior to releasing the
examination for RO use. If the RO finds a problem with the completed
examination, they notify the contractor and the C&P Service Contract
Exam staff. The contractor will have the sub-contractor fix the issue,
and the Contract Exam staff will request retraining of the examiner on
the particular issue. If the situation arises again after retraining
has been attempted, the contractor is asked not to use the examiner
again.
Question 17. What actions does VA take when non-compliance with VA
policy or procedure is identified?
Response. When VBA finds that contracted medical disability exams
were not compliant with VA policy and procedures, the contractor is
instructed to cease sending Veterans to the sub-contractor for C&P
examinations.
Question 18. How many examiners were identified during the past
three years which resulted in VHA taking corrective action, such as
performance improvement plans?
Response. The CPEP exam review process is used as an aggregated
measure of performance, tracked by exam type and rolled-up at the VISN
level for performance measure tracking. Between 700-800 unique
examiners are evaluated each month through random sampling of C&P
examinations. CPEP releases individual examination report scores, which
can be used by medical center management to identify and address
specific performance issues. However, there is no centralized authority
for remediation or tracking of individual performance-related actions
at VHA field sites.
Recognizing this is an issue, VHA is in the process of re-examining
the CPEP Program with the intent of re-designing the quality review
process to incorporate field-based peer reviews, larger numbers of
monthly reviews, and the ability to identify deficits and implement a
central remediation program. Implementation of this change should begin
within the next calendar year.
CPEP has addressed the issue of improving provider performance
through multiple education strategies. Over the past three years, CPEP
has conducted three multi-day training conferences (attended by VBA and
VHA staff) and a number of regional and local training sessions. CPEP
evaluates approximately 160-300 monthly requests for scoring appeals,
which serves as an educational tool through the appeals feedback
mechanism. In addition, the CPEP examination quality and timeliness
scores are part of the VISN and medical center leadership's performance
plan.
CPEP reporting demonstrates improvement from around 40 percent for
the quality review scores in 2003 to a high of above 90 percent
approximately 3 years ago. It is recognized that, although there has
been significant improvement, a plateau has been reached and changes to
the review process and educational efforts must be instituted. CPEP's
educational material is under evaluation with new training modules in
development for Muskuloskeletal, General Medical and Foot examination
types. Audiology is being evaluated as a fourth training module effort.
ATraumatic Brain Injury module has been activated within the past 45
days.
Question 19. How does VA determine and monitor the amount of time
needed to conduct compensation and pension examinations?
Response. For C&P medical disability examination contracts, times
are based on the Current Procedural Terminology (CPT) codes. The
following codes are used to report evaluation and management services
provided in the physician's office or in an outpatient clinic: 99203:
30 minutes, 99204: 45 minutes, and 99205: 60 minutes. An initial post-
traumatic stress disability examination time of 90 minutes is built
into the contracts. C&P MDEs take more time than standard medical exams
due to their complexity.
Question 20. Provide a list of the amount and percentage of budget
allocated to the conduct of compensation and pension examinations in
each VISN, broken down by VA and local contractors.
Response. The information below covers medical disability
examination contracts administered by C&P Service.
Table 2.--FY 2009 Expenditures at QTC Sites
------------------------------------------------------------------------
VISN % Amount
------------------------------------------------------------------------
Boston (VISN 1)................................. 1.6 $1,778,348
Roanoke (VISN 6)................................ 13.5 15,004,813
Winston-Salem (VISN 6).......................... 11.1 12,337,290
Atlanta (VISN 7)................................ 13.2 14,671,372
Muskogee (VISN 16).............................. 12.5 13,893,345
Houston (VISN 16)............................... 12.8 14,226,785
Salt Lake City (VISN 19)........................ 1.5 1,667,201
Seattle (VISN 20)............................... 10.9 12,114,997
Los Angeles (VISN 22)........................... 5.5 6,113,072
San Diego (VISN 22)............................. 8.4 9,336,328
Louisville (VISN 9)............................. 0.8 889,174
Nashville (VISN 9).............................. 0.5 555,734
St. Petersburg (VISN 8)......................... 2.4 2,667,522
Waco (VISN 17).................................. 0.3 333,440
Phoenix (VISN 18)............................... 2.9 3,167,683
St. Paul (VISN 23).............................. 0.1 111,147
Lincoln (VISN 23)............................... 2.0 2,222,935
-----------------------
Total..................................... 100.0 $111,091,188
------------------------------------------------------------------------
Table 3.--FY 2009 Expenditures at MES Sites
------------------------------------------------------------------------
VISN % Amount
------------------------------------------------------------------------
Cleveland (VISN 10)............................. 9.6 $1,002,319
Indianapolis (VISN 11).......................... 23.3 2,438,242
Des Moines (VISN 23)............................ 1.8 192,713
Lincoln (VISN 23)............................... 7.8 821,126
St. Louis (VISN 15)............................. 19.0 1,993,116
Waco (VISN 17).................................. 38.4 4,022,890
-----------------------
Total..................................... 100.0 $10,470,406
------------------------------------------------------------------------
Question 21. How does VA determine and monitor the amount of time
needed to conduct compensation and pension examinations?
Response. Please see the response to #19.
Question 22. At the hearing, Mr. Baker said that the total amount
VA spent on outside providers last year, including all health services,
was $3 billion. Does this number include all contract and fee basis
services, including Project HERO?
Response. Yes, the $3 billion number Mr. Baker quoted is the FY
2008 amount VA spent on outside providers, including Fee Basis and
Project HERO care paid for through the VistA Fee claims processing
system. By comparison, FY 2009 expenditures were approximately $3.8
billion.
Question 23. Project HERO been described in the media as a $915
million project. What is the total amount of money spent on Project
HERO annually since its inception?
Response. The $915 million described in the media at the inception
of the Project HERO contracts was an approximation of the maximum
amount that would be spent for care services purchased through the
Humana Veterans Healthcare Services award over a five-year contract
period.
The following tables show the actual amount of dollars disbursed on
Project HERO annually since its inception in FY 2008.
Sources: VSSC Non-VA Care cube was used for disbursed dollars for
healthcare, and HVHS and Delta Dental report directly on value-added
fees invoiced.
Question 24. How many providers, by specialty and location, have
agreed to provide services to veterans through Project HERO?
Response. (See Attachment 1 with Delta Federal Services and
Attachment 2 with detailed lists for Humana Veterans Healthcare, which
follow).
Attachment 1 for Question 24
Attachment 2 for Question 24