[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
         NON-VA CARE: AN INTEGRATED SOLUTION FOR VETERAN ACCESS 

=======================================================================

                                HEARING

                               before the


                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                         Thursday June 18, 2014

                               __________

                           Serial No. 113-74

                               __________

       Printed for the use of the Committee on Veterans' Affairs

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

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                     COMMITTEE ON VETERANS' AFFAIRS

                         JEFF MILLER, Chairman

DOUG LAMBORN, Colorado               MICHAEL H. MICHAUD, Maine, Ranking 
GUS M. BILIRAKIS, Florida Vice-      Member
Chairman                             CORRINE BROWN, Florida
DAVID P. ROE, Tennessee              MARK TAKANO, California
BILL FLORES, Texas                   JULIA BROWNLEY, California
JEFF DENHAM, California              DINA TITUS, Nevada
JON RUNYAN, New Jersey               ANN KIRKPATRICK, Arizona
DAN BENISHEK, Michigan               RAUL RUIZ, California
TIM HUELSKAMP, Kansas                GLORIA NEGRETE MCLEOD, California
MIKE COFFMAN, Colorado               ANN M. KUSTER, New Hampshire
BRAD R. WENSTRUP, Ohio               BETO O'ROURKE, Texas
PAUL COOK, California                TIMOTHY J. WALZ, Minnesota
JACKIE WALORSKI, Indiana
DAVID JOLLY, Florida

                       Jon Towers, Staff Director

                 Nancy Dolan, Democratic Staff Director

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.



                            C O N T E N T S

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                         Thursday June 18, 2014

NON-VA Care: An Integrated Solution For Veteran Access                1

                           OPENING STATEMENT

Hon. Jeff Miller, Chairman
    Statement....................................................     1
    Prepared Statement...........................................     2
Hon. Michael Michaud, Ranking Member
    Statement....................................................     4

                               WITNESSES

David J. McIntyre,Jr. President and CEO, TriWest Healthcare 
  Alliance
    Statement....................................................     5
    Prepared Statement...........................................     7
Radm Thomas Carrato, USPHS (Ret)
    Statement....................................................    13
    Prepared Statement...........................................    14
Kris Doody, RN, MSB, FACHE
    Statement....................................................    22
    Prepared Statement...........................................    24
Randy Williamson, Director, Health Care, U.S. Government 
  Accountability Office
    Statement....................................................    59
    Prepared Statement...........................................    61
Philip Matkovsky, Asst. Dep. Under Secretary for Health
    Statement....................................................    82
    Prepared Statement...........................................    89

                                APPENDIX

            STATEMENTS FOR THE RECORD............................    98

Raymond C. Kelley, Director, National Legislative Service 
  Veterans of Foreign Wars of the United States
    Statement....................................................    98
GAO Highlights                                                      100

Letter From David J. McIntyre, Jr, CEO TriWest Healthcare 
  Alliance                                                          101
                Questions For the Record                            101

Letter to Hon. Sloan Gibson                                         101

Statement From Hon. Michaud                                         101

Questions Submitted by Ranking Member Michaud                       102

Questions to Currato From Ranking Member Michaud                    105

Responses
                Mr. Currato to Hon. Michaud                         105


         NON-VA CARE: AN INTEGRATED SOLUTION FOR VETERAN ACCESS

                              ----------                              


                        Thursday, June 18, 2014

              U.S. House of Representatives
                     Committee on Veterans' Affairs
                                           Washington, D.C.
    The committee met, pursuant to notice, at 9:15 a.m., in 
Room 334, Cannon House Office Building, Hon. Jeff Miller 
[chairman of the committee] presiding.

           OPENING STATEMENT OF CHAIRMAN JEFF MILLER

    NON-VA CARE: AN INTEGRATED
    SOLUTION FOR VETERAN ACCESS
    Wednesday, June 18, 2014
    House of Representatives
    Committee on Veterans' Affairs
    Washington, D.C.
    The committee met, pursuant to notice, at 10:15 a.m., in 
Room 334, Cannon House Office Building, Hon. Jeff Miller
    [chairman of the committee] presiding.
    Present:Representatives Miller, Lamborn, Bilirakis,
    Roe, Flores, Denham, Runyan, Benishek, Huelskamp, Coffman,
    Wenstrup, Jolly, Michaud, Brown, Takano, Brownley, Titus,
    Kirkpatrick, Ruiz, McLeod, Kuster, O'Rourke, and Walz.
    The *Chairman.* Good morning, the committee will come to 
order. Welcome to today's full committee oversight hearing Non-
VA Care, an Integrated Solution for Veteran Access.
    As we all know last week the Department of Veterans Affairs 
released the results of an internal access audit which found 
that more than 57,000 veterans have been waiting 90 days or 
more for their first VA medical appointment, and 64,000 
veterans who have enrolled in the VA healthcare system over the 
last decade never received the appointment that they requested.
    To summarize, that is 121,000 veterans who have not been 
provided the care they have earned and the care that they 
deserve.
    It is unfathomable to me, and I am sure to the rest of this 
committee, that tens of thousands of veterans have been left 
without the healthcare they need for weeks, months, and in some 
cases years, especially considering that VA has broad, well-
established, and long-standing authority to defer veterans to 
non-VA providers to receive needed care.
    Providing our veterans with timely accessible and high 
quality care regardless of whether or not it is provided in a 
VA medical facility or through a private sector provider should 
be VA's ultimate goal. After all isn't non-VA care not 
preferable to know VA care? Particularly to a veteran who may 
be suffering and in pain and unable to receive an appointment 
with a VA provider for weeks, for months, or for even years. To 
me, and I know to many of our veterans as well, the answer to 
that question is a no-brainer to everyone but apparently the 
Department of Veterans Affairs.
    By allowing 121,000 veterans to languish on VA waiting 
lists VA has made it disturbingly clear that it is unwilling to 
utilize existing non-VA care authority when, where, and to the 
extent that it should to insure access to care for veteran 
patients. Unfortunately thousands of veterans have paid the 
price. Some even have paid the price with their lives.
    We cannot, and beginning now, we will not allow VA to 
continue to prioritize what may be right for the VA healthcare 
system, providing care to veterans at VA facilities first and 
foremost over what is being right for our veterans, and that is 
receiving timely access to needed healthcare in the most 
convenient an accessible manner possible.
    To be clear, I am in no way advocating for the dismantling 
of the VA healthcare system as some know it today.
    As one of our witnesses, Health Net federal services says 
in their testimony this morning, ``The purpose of non-VA care 
is to augment VA capacity and capabilities, not to replace 
them; however, excuses, generalities can no longer be 
considered as sufficient reason not to provide a veteran 
waiting for a VA appointment or residing far from a VA medical 
facility with an authorization to receive care from a non-VA 
provider should that veteran choose to do so.''
    Faced with this crisis the simple fact of life is that 
giving access to non-VA care is quicker than hiring new VA 
staff and building new VA facilities. Where cultural and 
structural barriers prevent VA from insuring access to care for 
veterans through non-VA providers those barriers most be 
removed.
    VA stove pipes must be broken and bureaucratic insularity 
must be banished. To do anything less would be to dishonor the 
service and sacrifice of our veterans yesterday, today, and 
tomorrow.

          STATEMENT OF THE HON. JEFF MILLER, CHAIRMAN

    House Committee on Veterans' Affairs
    ``Non-VA Care: An Integrated Solution for Veteran Access''
    June 18, 2014
    Good morning. The Committee will come to order.
    Welcome to today's Full Committee oversight hearing, ``Non-
VA Care: An Integrated Solution for Veteran Access.''
    As we all know, last week the Department of Veterans 
Affairs (VA) released the results of an internal access audit, 
which found that more than fifty-seven thousand veterans have 
been waiting ninety days or more for their first VA medical 
appointment and sixty-four thousand veterans who have enrolled 
in the VA healthcare system over the last decade never received 
the appointment they requested.
    To summarize, that is one-hundred and twenty-one thousand 
veterans who have not been provided the care they have earned 
and deserve.
    It is unfathomable to me that tens of thousands of veterans 
have been left without the health care they need for weeks, 
months, and - in some cases - years.
    Delays in care of this length and magnitude are 
particularly hard to comprehend considering that VA has broad, 
well-established, and long-standing authority to refer veterans 
to non-VA providers to receive needed care.
    Providing our veterans with timely, accessible, and high-
quality care - regardless of whether or not such care is 
provided in a VA medical facility or through a private sector 
provider - should be VA's ultimate goal.
    After all, isn't non-VA care not preferable to no VA care 
at all?
    Particularly to a veteran who may be suffering and in pain 
and unable to receive an appointment with a VA provider for 
weeks or months or years?
    To me - and, I know, to many of our veterans as well - the 
answer to that question is a no-brainer to everyone but, 
apparently, the Department of Veterans Affairs.
    By allowing one-hundred and twenty-one thousand veterans to 
languish on VA waiting lists, VA has made it disturbingly clear 
that it is unwilling to utilize existing non-VA care authority 
when, where, and to the extent that it should to ensure access 
to care for veteran patients.
    Unfortunately, thousands of veterans have paid the price - 
some with their lives - for that unwillingness.
    We cannot and, beginning now, we will not allow VA to 
continue to prioritize what may be right for the VA health care 
system - providing care to veterans at VA facilities, first and 
foremost - over what is be right for our veterans - receiving 
timely access to needed health care in the most convenient and 
accessible manner possible.
    To be clear, I am in no way advocating for the dismantling 
of the VA health care system as we know it.
    As one of our witnesses, Health Net Federal Services, says 
in their testimony this morning -
    ``[t]he purpose of [non-VA care] is to augment VA capacity 
and capabilities, not to replace them.''
    However, excuses and generalities can no longer be 
considered a sufficient reason not to provide a veteran waiting 
for a VA appointment or residing far from a VA medical facility 
with an authorization to receive care from a non-VA provider, 
should that veteran choose.
    Faced with this crisis, the simple fact of life is that 
giving access to non-VA care is quicker than hiring new VA 
staff and building new VA facilities.
    Where cultural and structural barriers prevent VA from 
ensuring access to care for veterans through non-VA providers, 
those barriers must be removed.
    VA stovepipes must be broken and bureaucratic insularity 
must be banished.
    To do anything less would be to dishonor the service and 
sacrifice of our veterans yesterday, today, and tomorrow.
    With that I yield to the ranking member, Mr. Michaud, for 
any opening statement he may have.

   OPENING STATEMENT OF THE HON. Mike Michaud, Ranking Member

    Mr. Michaud. Thank you very much, Mr. Chairman.
    Non-VA care has been a priority topic of this committee for 
many years. Fee-based care, vouchers, contract care, and even 
privatizations have been discussed often. With the VA's current 
difficulties in providing timely access to care these 
discussions understandably have risen to the surface again.
    We know that there are concerns with insuring VA conduct 
proper coordination and continuity of care with non-VA 
providers. I believe we need to strike a balance between access 
and continuity of care. Unless we and Congress are willing to 
write a blank check to VA we also need to be conscience of cost 
effectiveness. Anecdotal evidence indicate that VA managers 
pursue for cost savings may have overly restricted use of non-
VA care. As GAO pointed out we need to insure VA is taking 
steps to track their cost and be a good steward of taxpayers' 
dollars.
    Last year the VA spent almost $5 billion or approximately 
10 percent of their healthcare budget to private providers; 
however, only half of this amount was for reimbursing emergency 
care. While this may be freeing up capacity in the emergency 
room it is not clear this is helping the access issue.
    Improving access requires a multi-prong approach as the 
hearing title states, non-VA care must be part of an integrated 
solution.
    In the short term we need to be part of other initiatives 
VA is putting in place to address the backlog, including 
overtime, additional clinic hours, and hiring additional 
providers.
    We have a number of existing models at the local level that 
are providing good care for our veterans who for various 
reasons can't make it to VA facilities. In Maine many of my 
constituents in Aroostook County face a several hundred mile 
round trip drive with 600 miles round trip often through ice 
and snow to Togus VA Medical Center. That is why I was proud to 
sponsor and create the ARCH program to bring the program to the 
State of Maine. The program has been overwhelmingly positive. 
Veterans in northern Maine are receiving their care at Cary 
Medical Center in Caribou and I am constantly being told by my 
veterans that things are working out extremely well.
    And I want to thank Kris Doody from Cary Medical Center for 
being here this morning, look forward to your testimony this 
morning, and it is because of that collaborative effort that 
you have done to make sure that our veterans get access closer 
to home.
    The chairman's bipartisan bill H.R. 4810 covers primary 
care, and I was happy to support this effort to address the 
shortfall in VA, but we also have to look at access to 
specialty care. Patient Centered Community Care or PC3s was 
originally developed to respond to specialty consultant 
backlog. While the initial start was slow a steady increase in 
authorization noted by the witnesses today is encouraging with 
transparency now provided by acting secretary Gibson hopefully 
we will see the wait times for specialty care quickly decline. 
We need to insure that VA is making full use of these tools 
across their network.
    There are many things to be considered here today, and I 
caution that our final solutions need to insure that 
reimbursement rates are adequate to sustain a robust provider 
network.
    As I mentioned last week we all work for the veterans. 
Throughout these conversations we need to keep in mind the 
needs of those that we owe so much to. Their well meaning, the 
work that we do here in this committee have to keep veterans as 
a top priority. This is an opportunity for us really to improve 
access to healthcare in our veterans across the country, and I 
look forward to hear thing panel this morning.
    With that, Mr. Chairman, I yield back the balance of my 
time.
    The *Chairman.* Thank you very much for your comments.
    Joining us on our first panel today, Mr. David McIntyre 
Jr., the president and chief executive officer of TriWest 
Healthcare Alliance, Admiral Thomas Carrato, president of 
Health Net Federal Services, and as had already been 
introduced, Ms. Kris Doody, the chief executive officer of Cary 
Medical Center. Thank you all for being with us today.
    Mr. McIntyre, you may proceed with your statement.

               STATEMENT OF DAVID J. MCINTYRE JR.

    Mr. McIntyre. Thank you.
    Mr. Chairman, Ranking Member Michaud, and distinguished 
members of the committee, thank you for the opportunity to 
appear before you this morning and discuss the critical topic 
of access to healthcare for our nation's veterans, and 
particularly the use of non-VA care as part of an integrated 
solution.
    I would ask that my complete written statement be accepted 
and entered into the record.
    The *Chairman.* Without objection all of your statements 
will be entered into the record.
    Mr. McIntyre. Thank you, sir.
    I would like to begin by acknowledging the members of the 
committee whose constituents were privileged to serve alone 
side the dedicated staff and providers of VA. We could not 
imagine a greater honor or privilege than the work in which we 
find ourselves currently engaged.
    Mr. Chairman and members of the distinguished committee we 
had the amazing privilege of serving at the side of the Defense 
Department for nearly 18 years as a corporation, providing them 
a relief value in 16 states that was both efficient and 
effective in delivering the care that they were unable to 
deliver themselves. And now we find ourselves engaged in a 
similar mission at the side of the Department of Veterans 
Affairs in part or all of 28 states in the Pacific.
    All of us associated with TriWest consider it an awesome 
privilege and to be engaged in this work through the VA's new 
program called Patient Centered Community Care, or VA PC3 for 
short.
    Of course VA PC3 had just stood up when we all started to 
gain knowledge of the clusters of backlog care. I am pleased 
however to say that together as a team we and VA leaders from 
central office and the facilities in our geographic areas of 
responsibility are leaning all the way forward at each others 
side to address this critical need in a collaborative and 
constructive fashion.
    If you will permit me I would like to talk for a moment 
about Phoenix, Arizona as an example of what is going on.
    While we are all focused on the sites across our regions of 
responsibility we all know of the serious issues that became 
public in Arizona, Phoenix in particular, a location that 
happens to be the hometown for the corporation that I am 
privileged to lead.
    Mr. Chairman, when the situation in Phoenix came to light 
we quickly began coordinating with VA to obtain detailed 
information regarding the backlogs in specialty care in order 
to learn where we might be able to be of assistance. We did the 
same for the rest of the sites in our regions of 
responsibility.
    We then took that specific information and plugged it into 
an analytical model that we had constructed in the days prior 
to analyze the backlog against the capacity of the network that 
we were responsible for constructing to determine by 15-day 
increment what we would be able to do market by market and 
specialty by specialty to come to the assistance of the VA.
    I am pleased to say that in Phoenix, Arizona the vast 
majority of the backlog will be able to be handled in a two-
week period of time. Of course you have got appointing on the 
front end, you have got a variety of other responsibilities, so 
our commitment to Phoenix is that within 30 days of the receipt 
of a need for appointment in specialty care that we will have 
finished the work together with the providers in the community.
    That will be done properly and it will also be done at a 
discount against the fee structure, because the 4200 providers 
in Maricopa County have come to the table with that commitment.
    So you will have an appointment scheduled, the medical 
documentation will get back from the provider and into the 
veterans' medical record, which is part of VA PC3, and the 
provider will get paid on time.
    We started to receive the volume of that care coming our 
direction and they tell us that it will rise to 3- to 400 per 
day coming our direction.
    We have done similar analysis market by market, and the 
pictures of it differ depending on the market and the 
saturation of networks in those particular areas.
    In addition to be able to handle that demand we have 
increased the front line staff to be able to receive the 
appointment requests and be able to manage the work. We have 
actually tripled our staff in that category in the last several 
weeks. They are finishing their training now and we have 300 
people on the front lines ready to receive care and the care 
requests going forward.
    Mr. Chairman and members of the committee you should expect 
from all of us candor, openness, and collaboration, because 
this really is designed to be a team lift and to make sure that 
we are completing each others' sentences as we go forward and 
make sure that those that have served this nation get what they 
have earned and what they are entitled to.
    It is our privilege to be here today, it is our awesome 
privilege and honor to do this work at the side of VA. This is 
a brand new program. We are tweaking and turning the pieces 
that need to be turned, and we look forward to being a 
collaborative partner with the providers in the community, with 
this committee, and also with the VA to deliver on the 
responsibilities that this nation has to those that have 
sacrificed so much for our freedoms.
    Thank you, Mr. Chairman.

          PREPARED STATEMENT OF DAVID J. MCINTYRE JR.

    Mr. Chairman, Ranking Member Michaud, and distinguished 
members of the Committee, thank you very much for the 
opportunity to appear before you this morning to discuss the 
critical topic of access to health care for our nation's 
Veterans - and, in particular, the use of non-VA care.

Our History

    For 18 years, I have had the distinct privilege of leading 
a company whose sole mission is standing alongside the federal 
government in serving the health care needs of those who served 
this country in uniform and their families. In 1996, a group of 
non-profit health plans and university health systems came 
together and founded TriWest Healthcare Alliance. Our initial 
mission was to serve the Department of Defense (DoD) in 
bringing up the first TRICARE contract in what were then 
Regions 7 and 8. And while today TRICARE is recognized as a 
cherished benefit for our Service members and their eligible 
family members, it took many years of hard work, focus, and 
most importantly partnership between the contractor community 
and DoD's health care system to mature to this point. I am 
proud of the role TriWest played, along with our colleagues in 
the contractor community, in the implementation, maturation, 
and improvement of that program during our years of service in 
support of the Defense Department. And, I am even more proud 
today to have the privilege of bringing that same focus and 
intensity to the side of the Department of Veterans Affairs 
(VA) through their new Patient Centered Community Care (PC3) 
program.
    In addition, we have the privilege of serving the United 
States Marine Corps as the worldwide operator of the DSTRESS 
stress and suicide-prevention contact center and the back-up to 
the Sexual Assault Prevention and Response (SAPR) line. We also 
serve the United State Air Force by providing appointing 
service in three Military Treatment Facilities in the 
Continental United States.

Awarded PC3 Contracts for Regions 3, 5, and 6

    On September 4, 2013, TriWest was awarded a contract to 
serve VA in implementing their brand new PC3 program. I want to 
say what an honor and privilege it is to be entrusted to serve 
alongside VA in caring for our Nation's most deserving 
citizens... its Veterans! Each and every member of the TriWest 
family feels privileged to be of service to our nation's 
Veterans - from the Chairman of our Board (who is the President 
and CEO of Blue Cross Blue Shield of Arizona) and the rest of 
our 11 owners, to our senior executives, to all of our 
employees.
    Working with VA on implementing this new program is in many 
ways a return to our earliest days. We find ourselves 
partnering each and every day with a group of dedicated public 
servants, working long hours to deliver the promise of access 
to quality health care to a deserving population. We knew 
standing up a new program would be challenging and consuming. 
But, we also knew that success in meeting the challenge meant 
we would have the honor of playing a part in ensuring our 
nation's Veterans received the care they've earned through 
their service and sacrifice. Because of this, we embrace the 
opportunity to again lean all the way forward.

Our Network, Our Focus and Our Commitment

    As I just indicated, TriWest provides a diverse set of 
services to our military and VA clients. At our core, though, 
TriWest is a company that builds and maintains networks of 
health care providers, who agree to render care to the 
deserving beneficiaries we are privileged to serve at a 
reasonable price for the taxpayer. We then pay those providers 
on behalf of customers quickly and accurately while focusing 
intently on professional, fair dealing as the keys to 
maintaining that network of high quality clinicians.
    Today, through the TriWest network, we provide Veterans 
with access to nearly 70,000 specialty providers and facilities 
throughout VA's Regions 3, 5, and 6 and are continuing to grow 
those numbers each and every day as we learn more about their 
health care needs. Right now, the network available in our 
native territory, which consists largely of the Western and 
Midwestern states, contain more robust availability due to how 
much we knew about that market and our historical presence in 
that area supporting the DoD. However, we have been engaging 
the provider community throughout the Southern and Eastern 
parts of the PC3 Regions for many months now and are finding 
providers of all types willing to come forward and serve this 
most deserving population. We have committed to VA that our 
network will be available within the access standards as well 
as credentialed and checked against all of VA's specialized 
quality requirements.

PC3: Our Tasks and Our Team

    Under the terms of our contract with VA to administer the 
PC3 program, TriWest is responsible for:
    Building a network of providers - This includes executing 
all contracts either in-house or in conjunction with our 
network subcontractors (who are indigenous to their territories 
of operation), verifying all licensure, certifications, and 
specialty designations as well as completing all credentialing 
work. In addition, our contract with VA contains a number of 
unique requirements for certain specialties and subspecialties 
that are needed by Veterans. It is our job to ensure those 
requirements are met.
    Making appointments for our Veterans; ensuring they see the 
doctor - For each authorization TriWest receives, our staff 
reaches out and attempts to make contact with the Veteran to 
ascertain their preferred time and date of appointment. We then 
identify a network provider within the standards set forth in 
our contract and reach out to that provider and make an 
appointment before circling back with the Veteran to confirm. 
In addition, TriWest makes efforts to ascertain the Veteran's 
preferred communication method so that 48 hours prior to the 
appointment, we can send a reminder - lessening the potential 
for missed appointments and resulting in the delivery of the 
needed care. Afterwards, we confirm that the appointment 
occurred.
    In those instances in which we cannot reach a Veteran 
within three days to make an appointment, our contract requires 
that we make an appointment for the Veteran and send a letter 
to him or her with the appointment information. We have noticed 
a not insignificant higher percentage of missed appointments 
when using the letter method, and have discussed this matter 
with VA officials.
    Following-up after appointments to retrieve medical 
documentation to return it to VA - Ensuring that a Veteran 
receives timely access to a high quality health care provider 
is certainly the most important element of the program. 
However, following the delivery of health care it is important 
to make sure that a report from the provider rendering the care 
gets returned to the Veteran's home VA facility in a timely 
fashion so that it may be placed in the medical record of the 
Veteran. And, it is our responsibility to ensure that such 
occurs. This helps make certain that any findings, recommended 
treatments, or other important clinical services can occur with 
full knowledge of the episode of care that occurred in the 
community.
    Paying the providers' claims - As I mentioned earlier, 
TriWest knows that without our providers, we cannot deliver 
care through the PC3 program. We realize that sometimes the 
federal reimbursement rates aren't always the most attractive 
rate in the marketplace. However, we have learned that timely 
and accurate payment of claims goes a long way towards ensuring 
that a provider stays in the network and continues to see our 
deserving Veterans. Our providers are patriotic and dedicated. 
But, we do need to recognize their professional value by paying 
them on time.
    To accomplish all of this work, we rely on our dedicated 
team who work either in our corporate headquarters in Phoenix, 
AZ or our call center located in Puyallup, WA. In fact, I am 
pleased to tell the Committee that in an effort to be certain 
we are ready and able to assist VA in working down their 
identified backlogs for care, we recently doubled our front-
line staff with the hiring of 100 new employees. They will be 
joined by another 100 or so next week. All of them will be 
trained and ready to serve VA and our nation's Veterans in the 
very near future, giving us the ability to meet the coming 
demand from the clusters of backlogs across our geographic area 
of responsibility.

Non-VA Care and the First Five Months of PC3

Implementation work ``behind the scenes''

    As noted earlier, TriWest was awarded the PC3 contract on 
September 4, 2013 and we officially began implementation of the 
program on September 26, 2013. Most of the early work consisted 
of ``behind the scenes'' efforts in coordination and 
cooperation with VA. Under our implementation plan, we would 
begin direct services to Veterans in Region 5 January 2, 2014 
while rolling-out services to Regions 3 and 6 on April 1, 2014.
    I would like to say at this time that I regret that our 
implementation schedule in Region 3 needed to be pushed back 
from the original April 1 date to allow for a phased 
implementation through June 30 to allow more time to ensure 
that we had the right providers available to VA when 
authorizations for care were sent to us. We had a robust 
network in many places throughout the Region; however, we 
expected to have many more providers than we did in some of the 
geographically diverse places to serve VA's needs. Since that 
time, we have been working around the clock to sign up 
additional network providers. And, as we do so, we are 
constantly updating VA on a location-by-location and service-
by-service basis so that local officials know what is 
available. We expect to be at or near completion of our initial 
building goals by July 1, 2014. And, in the midst of it all, we 
have now been working to address the clusters of backlogged 
care that have materialized . . . making the challenge a bit 
more complicated.
    During our ``behind the scenes'' implementation TriWest 
worked simultaneously on a number of initiatives, including:
    Ramping up our network building - While TriWest maintained 
a sizable network from our previous TRICARE work, upon award of 
the PC3 contract, we began in earnest the work required to 
amend those contracts to meet all of VA's standards.
    Developing our TriWest/VA portal - This interactive portal 
system is used by VA employees to enter authorizations for 
care; track when care has been scheduled or provided; and 
monitor the return of medical documentation related to an 
appointment in the network. The portal is also used by TriWest 
staff to upload medical documentation in .pdf format for return 
to VA and also to enter Secondary Authorization Requests, which 
VA can then consider and approve for service in the network or 
appoint to its own facilities.
    Developing our TriWest Provider Portal - This interactive 
portal allows network providers who see Veterans under the PC3 
program to view authorizations; upload medical documentation; 
confirm appointment timeliness; and make a Secondary 
Authorization Request.
    Standing up our contact center operations - In a short 
period of time we had to acquire building space, bring in 
Information Technology (IT) services, and hire the staff that 
would begin serving Veterans in Region 5 on January 2, 2014.
    Training hundreds of TriWest and VA staff - The PC3 program 
was not only new to TriWest and our recently-hired staff, but 
many aspects of it were also new to employees of the non-VA 
Care Coordination offices in VA Medical Centers (VAMC) all 
across the Regions. Working closely with our VA team colleagues 
in the Project Management Office, we provided unique user names 
and passwords for all of the VA staff at facilities across 
Region 5 and trained them of the use of the portal.
    Conducting Site Visits - On these visits, which were 
coordinated and led by our VA Project Management Office 
colleagues, we introduced ourselves and worked to educate VAMC 
staff and leadership on the elements of the PC3 contract and 
the tools we had and how TriWest would interact with them to 
serve Veterans.

Start of direct care delivery

    On January 2, 2014, fewer than four months after award, we 
went live and began direct services to Veterans throughout 
Region 5. Not surprisingly, as a new program, PC3 started slow. 
During the first few months, we were receiving on average about 
100 authorizations each day from the VAMCs we serve; although 
the daily number fluctuated from between 30-150 each day. That 
workload translated into about 2,000 authorizations for care 
during the month of January. I can state, unequivocally, that 
slow initial start is now a very distant memory for all of us 
in our geographic area of responsibility . . . TriWest and VA 
team alike . . . in spite of the short timeframe since we 
started delivering services.
    In February, workload inched up slightly from 2,000 to 
about 2,500 for the month. For the month of May, we received 
10,000 authorizations for care - a quadrupling of the monthly 
volume in just three months. And we expect the growth to 
continue. I will talk shortly about how we are preparing for 
that growth.
    Perhaps, as to be expected with any new program, not 
everything has gone according to plan during the first couple 
of months. First, as noted above, we know that despite our best 
efforts, not all of our network was ready in all of the places 
where we needed to have it in order to best serve VA's and 
Veterans' needs. The reasons are varied and several-fold: 
immaturity of data, complexity of contract requirements, 
Medicare-based reimbursements rates, VA's continued provider 
engagement separate and distinct from the PC3 program; and lack 
of clarity of all of the places in which care was going to be 
needed and the volume of such care . . . exacerbated a bit by 
the current clusters of backlogged care. But, whatever the 
reasons, they are only reasons and not excuses. It is our job 
to have services available and we will meet that expectation. 
And, I am pleased to state that in spite of these initial 
challenges, together we are gaining on it.
    As you might expect, in a personnel-intense program, the 
rapid increase in workload from February to May led to some 
delays in appointing Veterans within the desired timeliness 
standards. Fortunately, as I noted earlier, in less than one 
month, we have been able to hire nearly 100 new staff. That 
growth in staffing has substantially cured those challenges. 
And, we will be adding another 100 this next week. That said, I 
would be remiss if I did not note that while TriWest certainly 
welcomes the rapid growth in the use of the PC3 program, the 
Indefinite Delivery/Indefinite Quantity (IDIQ) contract design 
can present some unique challenges when such a rapid and 
voluminous change in demand comes into play.
    From a taxpayer-centric approach, VA does not wish to pay 
for services until after they are ordered. This is certainly 
understandable. And, with this contract design they do not have 
to. Yet, paying in arrears with little information on projected 
ordering volumes means TriWest is estimating the need for 
physical space and staff with little information or experience 
on all sides. As such, rapid growth could - and did for a bit - 
overwhelm TriWest's infrastructure and staff that was built 
without foreknowledge of the clusters of backlogged care that 
existed. But, together, we, and the VA team in our geographic 
areas of responsibility, are persevering and I believe that we 
have prognosticated well enough to have a reasonable 
probability of positioning ourselves to successfully meet the 
demand when it arrives.
    Please know that I am in no way advocating for a change in 
contract design. I am only noting the importance of sharing 
information between VA and the PC3 contractors in a design like 
this so that we can reasonably predict the workload we will be 
facing in advance and be better prepared to respond to it. And, 
I am pleased to report that VA has done a very solid job of 
responding to that need once we all got visibility of the 
clusters of backlogged demand for care.
    I would also like to note that we have received a lot of 
feedback on our TriWest/VA Portal interface tool from VA staff 
and our Contracting Officer. We have listened and made 
substantial upgrades and improvements in recent months. These 
changes will not only enhance productivity and efficiency 
inside TriWest and VA, but they will also provide valuable data 
tools for all of us to use in monitoring our progress and the 
experience of receiving care through the PC3 program.
    Finally, Mr. Chairman, I would like to spend a minute 
discussing how TriWest is partnering with the VA team to 
address the current access challenges faced by many of the 
VAMCs in our areas of geographic responsibility.
    VA has discussed publicly its Access to Care Initiative. 
But, before the initiative even had a name, our colleagues in 
many VAMCs around the Regions we serve were reaching out to us 
to see if we could help, and if so, where and how fast. Our 
company is headquartered Phoenix AZ. And, while I realize much 
remains to be learned and understood about actions that 
occurred in Phoenix, I can say without hesitation that the 
leadership there today, their superiors, and the Program 
Management Office, have been collaborating with us each and 
every day to hone a model of partnering to work down the 
specialty care backlogs as quickly as possible. They have 
identifying their needs for assistance so that we can 
reasonably identify the capacity of the providers in our 
network to handle the care. And, indeed, the analysis of demand 
against capacity has been conducted there and for most of the 
places with backlogs across our entire service area. And, to 
ensure that we can handle the demand in Phoenix, my team and I 
have spoken with many leaders of large practices and facilities 
across Maricopa County. And, as you would expect, they are 
committed to leaning forward to help serve their fellow 
citizens. In fact, we expect to be receiving between 300-400 
authorizations of care a day from the Phoenix VAMC and are 
prepared, along with our provider network, to handle them all 
within the access standards required in our contract.
    In addition, just this past week, we began getting some of 
the authorizations for services needed to provide a special 
type of cognitive behavioral therapy. One of VA's Psychology 
Chiefs is in direct communication with our head of Behavioral 
Health Services, who happens to be a Veteran himself. They are 
matching caseloads with network providers' schedules and 
specialties so we can place Veterans with care in the community 
as quickly as possible with the right type of provider for 
their needs.
    I know Members of the Arizona Congressional delegation are 
rightly looking for accountability for the past, but they are 
also focusing intently on solutions for tomorrow--both long 
term and those that are available quickly to help Arizona 
Veterans. TriWest takes very seriously our obligation and 
privilege to do our part for the short term as well as over the 
long term. I am hopeful that the tools we have developed and 
this model of information sharing and collaboration becomes one 
that we can use not only in Arizona but all across our Region 
to assist where and when we can. And, indeed, that is exactly 
what is underway.

Remaining Committed and Focused

    Mr. Chairman, and members of the Committee. I hope I have 
made clear in my comments today that TriWest is very committed 
to and indeed is working tirelessly alongside VA to 
successfully execute a program that was designed to provide 
Veterans with timely access to specialty care from community 
providers and community facilities when asked to do so by VA 
Medical Centers because they are unable to meet the need. We 
are growing our staff and we are collectively beginning to 
smooth-out the rougher edges of our operations under this new 
program. We are adding scores of new providers every day to our 
network. And, most importantly, we are communicating with our 
VA partners every single day to understand their needs 
community-by-community and Veteran-by-Veteran.
    We have found a tremendously dedicated VA Management Team 
overseeing this contract and matching our work hours, focus, 
and intensity every step of the way. I don't think either of us 
believe that the other is perfect nor did we all think that we 
would be tested in this way. But, I want you and the rest of 
our fellow citizens to know that we have encountered a VA team 
that has nothing but the interests of our Veterans at heart, 
and I hope they know and believe the same thing about TriWest.
    Working together, and armed with an open and honest 
dialogue between us, and an intensity to match the amazing 
service and sacrifice of our collective customer, I'm confident 
our Veterans will receive the timely, quality care they 
deserve.
    Thank you. I will now be pleased to answer any questions 
that Committee members may have.
    The *Chairman.* Thank you very much.
    Admiral, you are recognized for five minutes.

              STATEMENT OF ADMIRAL THOMAS CARRATO

    Admiral *Carrato.* Chairman Miller, Ranking Member Michaud, 
and members of the committee, thank you for the opportunity to 
testify on the role that non-VA care, specifically the Patient 
Centered Community Care program, can play in increasing 
veterans' access to care through the VA.
    In May of 2012 I had the opportunity to testify before this 
committee to discuss some ideas around increasing veteran 
access to healthcare services. At that time I had made three 
specific recommendations that apply more broadly to access to 
healthcare services.
    First augment VA medical center capacity by using short 
term solutions, such as use of contracted standby capacity that 
is delivered when and where assistance is needed.
    Second, VA could expand use of telephonic and web-based 
tools that offer the opportunity to reach deeper into the 
veteran population and to serve those in very rural or remote 
areas.
    The third recommendation was to use a network of community-
based providers that would augment VA's capacity and 
capability.
    Since the focus of this hearing is non-VA care I will focus 
today on the last of my three recommendations, using a network 
of community-based providers. This is exactly what PC3 is 
designed to do, augment VA's ability to ensure needed specialty 
care is available to veterans when a local VA medical center 
cannot readily provide the needed care due to lack of 
specialists, long wait times, or geographic inaccessibility.
    Health Net was awarded a contract to provide VA with 
specialty care networks in three of the six PC3 regions. We 
began implementation of PC3 in our regions in January and 
completed implementation on April 1st of 2014.
    Today our provider network consists of approximately 39,000 
providers and continues to grow. Our network has full 
accreditation demonstrating excellence and meeting key quality 
benchmarks in the healthcare industry.
    From program inception through today VA has provided Health 
Net with over 31,000 authorizations for care in 71 specialty 
areas.
    PC3 provides many benefits to veterans and VA. The PC3 
program is positioned to effectively augment VA's capacity to 
ensure veteran access to care and do it in a way that 
facilitates the delivery of integrated care. It is a program 
that ensures high clinical quality, access within standards, 
provides patient tracking and follow up, and insures the return 
of medical documentation to VA. These features are not 
necessarily present in other non-VA care options or are not as 
robust and proven.
    PC3 is also convenient for veterans. Upon receipt of an 
authorization we contact the veteran to schedule an 
appointment, provide an appointment reminder to the veteran in 
writing, and then follow up to ensures the appointment 
occurred. Veterans are not left to find qualified quality 
providers on their own. We believe PC3 is well positioned to 
help ensure our veterans receive timely, consistent, and 
integrated access to care.
    PC3 is a funded, up and running, nationwide program built 
upon a consistent set of requirements; however, it is still a 
very new program, and as such it is essential that lessons 
learned and identified enhancements are adopted to increase the 
program's effectiveness.
    We look forward to continued collaboration with the VA to 
help ensure that our veterans have ready access to the 
healthcare services they need.
    Thank you for your time and I am prepared to answer any 
questions that you might have.

          PREPARED STATEMENT OF ADMIRAL THOMAS CARRATO


A Partnership History

    Chairman Miller, Ranking Member Michaud and Members of the 
Committee, I appreciate the opportunity to testify on Health 
Net Federal Services' implementation and administration to date 
of the Department of Veterans Affairs' (VA) new non-VA care 
initiative, the Patient-Centered Community Care (PC3) program.
    Health Net is proud to be one of the largest and longest 
serving health care administrators of government and military 
health care programs for the Department of Defense (DoD) and 
Department of Veterans Affairs (VA). Health Net, Inc.'s health 
plans and government contracts subsidiaries provide health 
benefits to more than five million eligible individuals across 
the country through group, individual, Medicare, Medicaid, 
TRICARE, and VA programs.
    For over 25 years, in partnership with DoD, Health Net has 
served as a Managed Care Support Contractor in the TRICARE 
Program. Currently, as the TRICARE North Region contractor, we 
provide health care and administrative support services for 
three million active duty family members, military retirees and 
their dependents in 23 states. We also deliver a broad range of 
customized behavioral health and wellness services to military 
service members and their families, including Guardsmen and 
reservists. These services include the worldwide Military and 
Family Life Counseling (MFLC) program providing non-medical, 
short-term, problem solving counseling, rapid response 
counseling to deploying units, victim advocacy services, and 
reintegration counseling.
    As an established partner of VA, Health Net has 
collaborated in supporting Veterans' physical and behavioral 
health care needs through Community Based Outpatient Clinics 
(CBOCs) and the Rural Mental Health Program. We also support VA 
by applying sound business practices to achieve greater 
efficiency in claims auditing and recovery, and previously 
through claims re-pricing. The monies recovered through these 
programs are available to provide or enhance services to our 
nation's Veterans.
    It is from this long-standing commitment to supporting 
service members, Veterans, and their families that we offer our 
thoughts on PC3 and its role as an important component toward 
improving Veterans' timely access to care, supporting 
coordination of care, and ensuring quality of non-VA care. PC3, 
ultimately, supports greater integration of non-VA care 
services with the care provided to Veterans at a VA Medical 
Center (VAMC) or CBOC.

Building Upon Lessons Learned

    In developing approaches to ensure Veterans have access to 
quality, coordinated care, VA has previously implemented pilot 
programs, such as Healthcare Effectiveness through Resource 
Optimization (HERO) in 2008, VA Rural Mental Health Program in 
2010, and Project Access to Care Received Closer to Home (ARCH) 
in 2011. PC3 grew out of these pilot programs and was designed 
based on lessons learned from them, as well as input from and 
collaboration with, key industry and legislative stakeholders, 
including Veteran Service Organizations and Members of 
Congress.

In-Place, Integrated Solution

    PC3 has been designed as an integrated solution that 
ensures a clinical quality baseline, supports care 
coordination, and provides timely access to care for Veterans. 
PC3 contracts have been constructed to enhance VA care delivery 
by augmenting VA's ability to provide inpatient and outpatient 
specialty care and behavioral health care for enrolled Veterans 
when the local VA Medical Center (VAMC): (1) lacks available 
specialists; (2) has a long wait time; or, (3) is an 
extraordinary distance from the Veteran's home. The purpose of 
PC3 is to augment VA capacity and capabilities, not to replace 
them. To this end, specialty care can be provided on either an 
inpatient or outpatient basis and includes mental health.
    The most important goal of PC3 is to ensure Veterans have 
timely access to high quality, coordinated care. Health Net's 
PC3 appointment schedulers work collaboratively with Veterans 
to schedule appointments that meet their schedules and follow 
PC3 standards and industry best practices. Health Net conducts 
follow-up with providers to ensure that Veterans complete their 
appointments. When there is an issue with an appointment, we 
find out why and attempt to reschedule. Health Net's PC3 staff 
collects and returns completed medical documentation to VA, 
which ensures VA has timely and complete patient care 
information to include in the Veterans' computerized patient 
record within VistA (Veterans Health Information Systems and 
Technology Architecture). The result of this careful process is 
delivery of integrated health care services in a manner that is 
convenient for Veterans.

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Standing Up PC3

    Following a competitive bidding process, Health Net Federal 
Services was awarded a contract for three of the six PC3 
regions (see Figure 1). The regions supported by Health Net 
contain all or part of 37 states, the District of Columbia, 
Puerto Rico, and the U.S. Virgin Islands. Within the three 
regions are 13 of VA's 21 Veterans Integrated Service Networks 
(VISNs) and 91 Veterans Affairs Medical Centers (VAMCs). 
Implementation started shortly after the contract was awarded 
on September 23, 2013. The first VAMCs in Health Net regions 
went live on January 6, 2014. Implementation of the remaining 
VAMCs was completed on April 1, 2014. From program inception 
through June 9, 2014, VA has provided Health Net with 
approximately 28,000 authorizations for care in 71 specialty 
areas. The top five areas of specialty care authorized include: 
optometry, physical therapy, gastroenterology (to include 
colonoscopy), audiology, and podiatry. PC3 is not a mandatory 
program, thus, utilization across the 91 VAMCs and 13 VISNs has 
varied significantly. For example, as of June 9, 2014, three 
VISNs provided almost 60 percent of total authorizations to 
Health Net.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Improving Timely Access to Care

    PC3 includes strict timelines to make sure that 
appointments are scheduled and executed quickly. These 
requirements help reduce wait-times and ensure that Veterans 
are able to see a physician in a timely manner. We are 
committed to meeting the contract requirements for scheduling 
routine appointments within five days of receiving an 
authorization and scheduling care to occur within 30 days. 
Urgent authorizations have an even higher standard: 
appointments are made within 48 hours of receiving an 
authorization. Our PC3 appointment schedulers always attempt to 
contact Veterans in order to collaboratively find appointment 
times that are convenient for Veterans. Distance as well as 
travel time are considered when offering the Veteran an 
appointment with providers within VA-defined distance 
standards. Veterans are called to schedule the appointment and 
the provider is contacted after the appointment to make sure 
the Veteran attended the appointment. If the Veteran did not 
attend the appointment, Health Net ensures the Veteran is 
contacted to reschedule the appointment.

Supporting Coordination of Care

    The PC3 program achieves care coordination by requiring 
that medical documentation is returned to VA. In PC3, we 
collect documentation from the provider, image it into in our 
workflow management system (iDocs), and transfer it 
electronically to VA (within 14 days for outpatient care and 30 
days for inpatient care) for inclusion in the Veteran's 
electronic health record. In collaboration with DOMA 
Technologies, a Veteran Owned Small Business, we tailored iDocs 
for PC3 to provide transparency and ready access to information 
by VA. The iDocs system provides VA users with secure, role 
based access to key information and provides transparent access 
to information. The same system is accessed by both VA and 
Health Net users. VA users can track the authorization as it 
progresses through a seven step process that includes 
appointing and delivery of complete medical documentation. 
Alternative methods of providing non-VA care, such as 
individual authorizations, may not yield the assurance that a 
Veteran has made or attended an appointment, and certainly does 
not ensure medical documentation being returned to VA 
electronically.

Ensuring Quality of Non-VA Care

    Ensuring quality is an important component of PC3. Network 
providers must meet strict, VA-mandated clinical quality 
requirements to be accepted into the PC3 network which includes 
the Medicare Conditions of Participation (CoP) and Conditions 
for Coverage (CfC). In addition, Health Net's network is URAC 
accredited. URAC accreditation is a symbol of excellence and 
provides key quality benchmarks in the health care industry. 
Health Net meets URAC's nationally recognized standards of 
quality and operational integrity for network management, 
provider credentialing, quality management and improvement, and 
consumer protection. We currently have over 60,000 providers in 
the PC3 network across all three regions and continue to grow 
the network based on the needs of each VAMC. Primary care is 
not available through PC3, so all of the network providers are 
specialty providers. To further support our focus on quality in 
relation to patient safety and patient clinical issues, we have 
an Oversight Committee and a Peer Review Committee, and a 
comprehensive Quality Assurance Surveillance Plan (QASP) that 
is aligned with specific contract performance objectives.

The Path Forward

    We believe PC3 has tremendous potential to help VA deliver 
timely, coordinated, and convenient care to Veterans. PC3 is 
still a very new program. As with any new program, no matter 
how well the program requirements and design have been 
developed, areas for enhancement become apparent in the early 
stages the program. In order to ensure the success and long-
term viability of a new program, all parties need to be able to 
bring forward recommendations for refinement and be willing to 
make appropriate corrections or modifications to ensure the 
program is effective in achieving its goals and objectives. We 
are committed to doing this and have already adopted a number 
of enhancements to make the program more effective and more 
responsive to Veteran and VAMC needs. We also are participating 
in frequent collaborative discussions with the VA Program 
Management Office around some potential VA refinements to the 
program.
    As mentioned earlier, PC3 is not a mandatory program. As an 
in-place program which addresses access, care coordination, and 
quality, PC3 is an integral part of the solution to effectively 
care for our nation's Veterans. To fully leverage the 
capabilities of PC3, full adoption is essential.
    We stand ready to support Acting Secretary Gibson on the 
Accelerating Access to Care Initiative. We look forward to 
continuing our collaborative relationship with VA and to 
serving as a resource to this committee and to Congress on ways 
in which the highest quality care can be delivered to our 
nation's Veterans. Thank you and I am available to answer any 
questions you may have.

    Background on Health Net, Inc.

    Health Net, Inc. (Health Net) is one of the nation's 
largest publicly traded managed health care companies and is 
currently ranked #254 on the 2014 Fortune 500. Health Net's 
government services division is one of the largest and longest 
performing administrators of government and military health 
care programs. Our health plans and government contracts 
subsidiaries provide health benefits to more than five million 
individuals across the country through DoD and VA, as well as 
group, individual, Medicare, and Medicaid programs. As a leader 
in behavioral health, Health Net provides behavioral health 
benefits to approximately five million individuals across the 
U.S. and internationally through its subsidiaries, MHN, Inc. 
and MHN Government Services.
    Health Net Federal Services manages several large contracts 
for the government operations division of Health Net, Inc. and 
is proud to be one of the largest and longest serving health 
care administrators of government and military health care 
programs for the DoD and VA.
    In partnership with DoD, Health Net Federal Services serves 
as the Managed Care Support Contractor for the TRICARE North 
Region, providing managed care services for three million 
active duty family members, military retirees, and dependents 
in 23 states. In collaboration with VA, Health Net Federal 
Services has supported the physical and behavioral health needs 
of Veterans through CBOCs and the Rural Mental Health Program. 
Additionally, Health Net Federal Services also supports VA by 
applying sound business practices to achieve greater efficiency 
in claims auditing and recovery.
    Our affiliate, MHN Government Services, delivers a broad 
range of customized behavioral health and wellness services to 
military service members, their families, and Veterans. These 
services include military family counseling, financial 
counseling, rapid response counseling to deploying units, 
victim advocacy services, and reintegration counseling.
    The *Chairman.* Thank you very much Admiral.
    Ms. Doody, you are recognized for five minutes.

                    STATEMENT OF KRIS DOODY

    Ms. Doody. Thank you.
    Good morning, Committee Chairman Miller, members of the 
committee, and own congressman and ranking minority member, 
Mike Michaud.
    When I testified to the Veterans Affairs House Subcommittee 
September 2012 I was pleased to report the good news about 
Project ARCH at Cary Medical Center, our community hospital in 
Caribou, Maine.
    Now, in June of 2014 I am delighted to inform you that the 
good news just keeps getting better.
    The original goals of Project ARCH were to expand access to 
eligible veterans for healthcare services, including specialty 
care and hospitalization, close to home.
    Now, after nearly three years of working with Project ARCH 
we can confirm that not only can we deliver on these goals but 
we can go beyond.
    Over the past three years Cary Medical Center, working 
together with VA Project ARCH staff, have enrolled some 1,400 
Veterans who have experienced more than 3,000 consults at our 
hospital. If we assume that these same veterans would have 
sought out VA care at Togus, our single VA hospital in Maine, 
hundreds of miles away from Caribou, travel costs alone could 
have exceeded $600,000.
    But the benefits of Project ARCH go well beyond travel 
savings, we are saving lives and improving quality of life for 
our Veterans in Northern Maine.
    Listen to what Peter Miesburger, U.S. Air Force Retired, 
had to say about Project ARCH. As Peter explains, ``It is the 
best thing since peanut butter.''
    Peter is a 77-year-old Korean War Veteran. He suffered a 
broken hip on January 30th when he fell at his home in Caribou, 
but, thanks to Project ARCH he did not have to worry about a 
250-mile ambulance ride.
    ``It was miserable outside, snowing, cold, a typical 
northern Maine winter day,'' Peter said, a former air force 
firefighter who retired in 1974. ``God only knows what would 
have happened,'' he said.
    Such trips have been the standard procedure for veterans in 
northern Maine, and given the unpredictable weather conditions 
six months out of the year those trips would be life-
threatening.
    John Wallace is an army veteran and at 67 had been 
suffering with a bad knee ever since he jumped out of a 
helicopter in Vietnam. Project ARCH encouraged him to seek 
treatment and he successfully had arthroscopic knee surgery to 
alleviate his chronic knee pain. ``I am feeling great, although 
my knee can still predict the weather,'' he said. ``Any veteran 
you talk to up here, we are all been very happy with the 
results.''
    These are just two of hundreds of examples of how bringing 
care closer to the home of veterans near family and friends in 
familiar surroundings can make a difference.
    Veterans are also taking advantage of preventative care 
such as colonoscopies and mammograms.
    Key to the success of Project ARCH at Cary Medical Center 
has been the long-term relationship that we have built with VA 
healthcare and in particular with Maine's Togus Veterans 
Hospital.
    VA Togus, with support from Cary, opened a VA community-
based outpatient clinic, or CBOC, the first in our nation, some 
27 years ago. The clinic provides primary care in Veterans 
living in Aroostook County, Maine.
    Having the ability to work with the clinic and Togus has 
allowed veterans to remain in the VA healthcare system. This is 
important to veterans who overwhelmingly endorse VA healthcare 
when they have the chance to experience it.
    While we can speak to the remarkable success of our 
experience with Project ARCH we have also faced challenges. 
Being a rural, community hospital, we struggle with the 14-day 
rule. This requirement of the VA to have veterans seen by a 
specialist within 14 calendar days of authorization is simply 
not realistic. We have however, dramatically reduced wait 
times, and because we are flexible are able to respond to 
unique circumstances, such as urgent or emergent care.
    The volume generated by Project ARCH has now allowed us to 
recruit a second full-time orthopedic surgeon and two full-time 
oncologists, a great benefit for not only the veterans but to 
our community.
    We recognize that Project ARCH is a Pilot. Some have said 
that the results that we present are anecdotal and that with 
only five locations across the nation are not high enough 
numbers to make any predictions for a national expansion. We 
respectfully disagree.
    We believe that Project ARCH has tremendous potential to 
save the lives of our nation's honorable and courageous 
veterans, save millions of dollars, and ultimately advance the 
health status of millions of veterans nationwide.
    We urge Congress to extend Project ARCH to expand the 
program in other rural areas of our country where veterans live 
hundreds of miles from the nearest VA facility.
    Project ARCH is working. Ask our veterans in northern 
Maine. There is no doubt that veterans living in remote, 
frontier areas of our country are at a tremendous disadvantage 
when it comes to accessing care. Even with access to care 
closer to home veterans must be made aware of the options and 
after years of staying in the shadows they must be encouraged 
to come forward.
    It takes time and effort to build the trust of veterans, 
many of whom have never approached the VA for healthcare. At 
Cary Medical Center we have made this a top priority and we 
have demonstrated that when treated with respect, gratitude, 
and compassion the veterans' community will not only respond 
but they will create an unbreakable bond and reach out to their 
comrades who may be in need of care.
    We truly believe that the system we have built at Cary 
Medical Center and our relationship with VA healthcare in Togus 
is a model for the nation. We would love nothing more than to 
share our success and model with other rural areas of America.
    Thank you so much for this opportunity to present this 
urgent request for the extension of Project ARCH. It is just 
the right thing to do.
    Thank you, sir.

                PREPARED STATEMENT OF KRIS DOODY

    Good morning, Committee Chairman Miller, members of the 
committee and Maine's own Congressman and Ranking Minority 
Member, Mike Michaud. When I testified to the Veterans Affairs 
House Subcommittee September 2012, I was pleased to report the 
good news about Project ARCH at Cary Medical Center, our 
community hospital in Caribou, Maine. Now, in June of 2014, I 
am delighted to inform you that the good news just keeps 
getting better. The original goals of Project ARCH were to 
expand access to eligible Veterans for healthcare services, 
including specialty care and hospitalization, close to home. 
Now, after nearly three years of working with Project ARCH, we 
can confirm that not only can we deliver on these goals but we 
can go beyond.
    Over the past three years Cary Medical Center working 
together with VA Project ARCH staff, have enrolled some 1,400 
Veterans who experienced more than 3,000 consults at our 
hospital. If we assume that these same Veterans would have 
sought out VA care at Togus, our single VA hospital in Maine, 
hundreds of miles away from Cary, travel costs alone could have 
exceeded $600,000. But the benefits of Project ARCH go well 
beyond travel savings, we are saving lives and improving 
quality of life for our Veterans in Northern Maine.
    Listen to what Peter Miesburger, U S Air Force Retired, had 
to say about Project ARCH. As Peter explains, ``It's the best 
thing since peanut butter.'' Peter is a 77-year old Korean War 
Veteran. He suffered a broken hip on January 30th when he fell 
at his home in Caribou, but, thanks to Project ARCH, he didn't 
have to worry about a 250-mile ambulance ride.
    ``It was miserable outside, snowing, cold, a typical 
northern Maine winter day,'' said, Peter, a former Air Force 
firefighter who retired in 1974. ``God only knows what would 
have happened.'' He said. Such trips have been the standard 
procedure for Veterans in Northern Maine and given the 
unpredictable weather conditions six months out of the year, 
those trips could be life-threatening.
    John Wallace is an Army Veteran and at 67 had been 
suffering with a bad knee ever since he jumped out of a 
helicopter in Vietnam. Project ARCH encouraged him to seek 
treatment and he successfully had arthroscopic knee surgery to 
alleviate his chronic knee pain. ``I'm feeling great, although 
my knee can still predict the weather,'' he said. ``Any veteran 
you talk to up here, we've all been very happy with the 
results.''
    These are just two of hundreds of examples of how bringing 
care closer to the homes of Veterans near family and friends in 
familiar surroundings can make a difference. Veterans are also 
taking advantage of preventative care such as colonoscopies and 
mammograms.
    Key to the success of Project ARCH at Cary Medical Center 
has been the long-term relationship that we have built with VA 
Healthcare and in particular with Maine's Togus Veterans 
Hospital. VA Togus, with support from Cary, opened a VA 
Community Based Outpatient Clinic, the first in the nation, 
some 27 years ago. The clinic provides Primary Care for 
Veterans living in Aroostook County, Maine. Having the ability 
to work with the clinic and Togus has allowed Veterans to 
remain in the VA healthcare system. This is important to 
Veterans who overwhelmingly endorse VA Healthcare when they 
have the chance to experience it.
    While we can speak to the remarkable success of our 
experience with ARCH we have also faced challenges. Being a 
rural, community hospital, we struggle with the 14-day rule. 
This requirement of the VA to have the Veteran seen by a 
specialist within 14 calendar days of authorization is simply 
not realistic. We have however, dramatically reduced wait times 
and because we are flexible, are able to respond to unique 
circumstances, such as emergent or urgent care. The volume 
generated by Project ARCH has now allowed us to recruit a 
second full-time Orthopedic Surgeon and two full-time 
Oncologist/Hematologists, a great benefit for not only the 
Veterans but our community.
    We recognize that Project ARCH is a `Pilot'. Some have said 
that the results we are presenting are anecdotal or that with 
only five locations across the nation the numbers are not high 
enough to make any predictions for a national expansion. We 
respectfully disagree. We believe that Project ARCH has 
tremendous potential to save the lives of our nation's 
honorable and courageous Veterans, save millions of dollars, 
and, ultimately advance the health status of millions of 
Veterans nationwide. We urge congress to extend Project ARCH to 
expand the program in other rural areas of our country where 
Veterans live hundreds of miles from the nearest VA facility.
    Project ARCH is working. Ask our Veterans in Northern 
Maine. There is no doubt that Veterans living in remote, 
frontier areas of our country are at a tremendous disadvantage 
when it comes to accessing care. Even with access to care 
closer to home Veterans must be made aware of the options and 
after years of staying in the shadows, they must be encouraged 
to come forward. It takes time and effort to build the trust of 
Veterans, many of whom have never approached the VA for 
healthcare. At Cary Medical Center we made this a top priority 
and we have demonstrated that when treated with respect, 
gratitude, and compassion, the Veterans community will not only 
respond but they will create an unbreakable bond and reach out 
to their comrades who may be in need of care.
    We truly believe that the system we have built at Cary 
Medical Center and our relationship with VA Healthcare is a 
model for the nation. We would love nothing more than to share 
our success and model with other rural areas of America.
    Thank you so much for this opportunity to present this 
urgent request for the extension of Project ARCH. It is just 
the right thing to do.
    The *Chairman.* Thank you very much to all of our 
witnesses. We will do a five-minute round of questions.
    If we can go to your testimony, Ms. Doody, you said in your 
closing comments that some have said that the results of ARCH 
we are presenting are anecdotal. Who is saying that they are 
just anecdotal?
    Ms. Doody. Just comments that I have heard and reviewing 
newspaper articles because they have heard from veterans.
    The *Chairman.* I guess the question is who is making those 
comments? Are they part of the status quo, they don't want to 
see ARCH succeed? We are trying to find out who in fact doesn't 
like this pilot program.
    Ms. Doody. I don't know if I can answer who does not like 
this program, I think there has been a number of folk ins the 
State of Maine who would like to see this program extended and 
succeed into the future, and comments that I have heard is that 
it is anecdotal because I cannot get specific information from 
Altarum who was the company that was contracted to do the 
review of Project ARCH.
    So again, I can only tell information from individual 
veterans as opposed to a summary of key indicators.
    The *Chairman.* Okay. Thanks.
    To all of you, almost a month ago VA began implementing the 
accelerated care access to care initiative and as part of the 
effort VA stated, ``Where VA cannot quickly increase capacity 
VA is increasing the use of care in the community through non-
VA care.''
    And so what I would like to hear from you, if you could in 
a very succinct way if possible, what, if any, communication 
did you receive from VA on this initiative?
    Admiral *Carrato.* I can start.
    We have been working since we began implementation very 
closely with the program management office at VA and we have 
had close collaboration with them. We have seen some increase 
in authorizations from certain places. There is not uniformity 
across the system. In fact 3 VISNs account for about 60 percent 
of the authorizations we see.
    So it is a continuing, ongoing collaborative conversation 
that will continue, but it is clear that the program office 
sees PC3 as part of a solution to the issue.
    The *Chairman.* Mr. McIntyre?
    Mr. McIntyre. Sir, with regard to the communication side of 
things the communication was swift, it was completely engaged, 
it was reached to on both sides of the street with us reaching 
to them and them reaching to us. It followed on what we were 
seeing with some clustered backlogs that were showing up before 
everything became public around Phoenix and then what followed 
after that.
    Since that time and the analysis that we have collectively 
done in our geographic areas of responsibility there have been 
meetings directly will every VISN director that I have been 
involved in, that the program office has been involved in, and 
other underneath each VISN has been every VA medical center 
engaged in the same thing, and we now have all the information 
that we believe we need and they have what they need from us to 
be able to determine what our capacities look like to be able 
to help them so that as they decide what levers they will pull 
that they know what their options are in the community so that 
they can make informed decisions going forward.
    I will use Phoenix as an example. Complete engagement in 
that market from the acting director, the acting VISN director, 
the staff at the local level, and the delegation in Arizona 
completely involved across the board, and we have a 
collaborative relationship with the providers in the community, 
all of whom have stepped up and said we will take whatever we 
can take and need to take to expand out our schedules to be 
able to meet the need of our fellow citizens.
    The *Chairman.* Really quickly, because my time is about to 
expire for both TriWest and Health Net. What reception have you 
received from VA medical center staff throughout the 
implementation of PC3? In other words, are the staff at the VA 
medical centers aware and willing to properly utilize the PC3 
program?
    Mr. McIntyre. You know, with any new program there is 
always fits and starts. I think if you measured it at this 
point the engagement is strong, it is thorough. Is it at the 
same level of maturity at every sight, the answer would be no. 
But those sites where we are having struggles we are 
identifying those issues to the program office and they are 
working those issues effectively.
    The *Chairman.* Admiral?
    Admiral *Carrato.* Yeah, echo most of what Mr. McIntyre 
said.
    I think the one lingering issue that we are facing as we 
are continuing to grow our network is that at some locations 
the VA medical centers have direct contracts with providers, 
and when we are talking to those same multi-specialty groups or 
health systems they say, well we have a contract with the VA 
medical center and we are really not being encouraged to use 
PC3 or to enter into those negotiations fully.
    So that is, getting a lot better, the communication is lot 
better, but that is one issue that continues to linger.
    The *Chairman.* Thank you, sir.
    Mr. Michaud, you are recognized.
    Mr. Michaud. Thank you very much, Mr. Chairman. And once 
again I would like to thank the panel.
    Ms. Doody, the VA said in their testimony that the 
expiration of the ARCH contract individual transition plans for 
each veteran participating in the ARCH program is being 
created. Has Cary been involved in that transition plan for 
each veteran?
    Ms. Doody. Yes, we have, congressman. We have begun to 
discussions with our project officers as well as members of the 
VA and looking at how many appointments are scheduled out into 
the fall of 2014 and then what will occur next in trying to 
assure that the veterans are receiving the care prior to the 
expiration of ARCH.
    Mr. Michaud. Okay. And what are your concerns with the 
expiration of the ARCH contract?
    Ms. Doody. Well obviously Project ARCH from our perspective 
as well as the VA in Maine has been very successful, and we 
recognize although it is been a different arrangement than PC3 
because it is a direct relationship with VA, Togus, and Maine, 
although contract with the VA health system at a federal level, 
it has been very successful and we recognize that it could 
potentially be a model for the nation in a VA hospital working 
directly with a community hospital within a state.
    Mr. Michaud. Thank you. Yes, I remember when we put forward 
the program VA actually was opposed to it.
    Ms. Doody. Yes.
    Mr. Michaud. As a matter of fact this was supposed to be a 
VISN-wide program and when the VA got done with their rule 
making it narrowed it down substantially. So I am glad to see 
that it has worked out well.
    Did Cary Medical pass on the bidding contract for the PC3 
program?
    Ms. Doody. No, we did not pass. We have had some contact 
negotiation--contract negotiation with Health Net who would be 
our provider in our region, but we have not reached agreement.
    Mr. Michaud. And what is your concern with the PC3? I am 
hearing concerns about reimbursement rates.
    Ms. Doody. Yes, we have not reached agreement on 
reimbursement rates, which obviously I have to be financially 
responsible to my organization, so we have not been able to 
reach agreement at this time.
    Mr. Michaud. Okay. And this question is for--well, 
actually, Mr. McIntyre and Carrato, I know that the PC3 program 
has only been fully implemented recently. Can you explain what 
about the access to rural or highly rural areas has been? Have 
either of you experienced problems?
    Admiral *Carrato.* Certainly in highly rural areas it can 
be challenging to develop a network of providers, and part of 
that reason is that there are medically underserved areas in 
this nation as you well know, and the VA in defining the 
requirements for PC3 recognized that, they defined areas as 
urban, rural, and very rural.
    There are also shortages of certain medical specialties 
regardless if you are rural or urban. But we have very good 
experience with other large federal programs in developing 
networks in rural areas and so far we have been fairly 
successful.
    As I mentioned in my statement we are continuing to grow 
our network. There are challenges, but we do have ways to 
address those.
    Mr. McIntyre. I would associate myself with Mr. Carrato's 
remarks, but use as an example the work that we finished last 
night in Prescott in Flagstaff, Arizona, which is a place where 
we have commonly identified the fact that we need to take care 
closer to home. We signed a contract last night at 10 o'clock.
    And so, you know, the community I think is now recognizing 
the need to step forward and everybody wants to try and do the 
right thing on the provider side, and certainly that is true 
for the corporations that we both represent.
    This is a big lift, it is a large geographic space, and 
making sure that we are talking together both Congress as well 
as the VA and ourselves to identify where the pockets of 
veterans are that we need to make sure that there is 
particularly strong lift on the private sector side is very, 
very valuable to making sure that we get the job done right.
    If there is a silver lining to the backlogs and the 
clusters is it is going force that dialogue and it is going to 
help us identify where those shortfalls are that cause 
particular problems against the direct care system.
    What has been striking to me is that if you look just at 
Phoenix, Arizona as one example some of the backlogs represent 
10 to 15 times what you would expect in monthly average 
appointments that have to be made downtown.
    And so that engaged conversation back and forth and the 
expectation of all of us that we figure out what that is about 
and what the long-term needs are going to look like will help 
both ourselves and Health Net figure out how to make sure that 
the capacity downtown will match ultimately what the demand is 
whether it is rural, highly rural, or urban.
    The *Chairman.* Dr. Roe, you are recognized.
    Mr. Roe. Thank you.
    Ms. Doody, we have a solution for your 77-year-old veteran 
with six months of bad weather. Move to Tennessee.
    Ms. Doody. I am not sure he would take you up on it, sir.
    Mr. Roe. Well we can fix that problem.
    Really fascinating. I have read all of the testimony and 
one of the things we talked about last week was process, and 
part of the process of getting a veteran to non-VA care can 
be--there is--I saw the GAO about how the providers see someone 
and then refers that person to somebody else in the VA who then 
decides, and then there is a request from the VA.
    How long does all of that take before the--because the PC3 
program looks like it is one--once it is up and working well 
would work extremely well and you are seeing the providers 
across the country step up.
    We had five veterans in my medical practice in one office 
and we are more than willing to step up and help take care of 
our fellow veterans. And you are looking at healthcare for only 
six million veterans in the country out of the 22 million or so 
of us that are veterans. That is not a big lift, we can do 
that.
    So how long does this take? Do you know by the time they 
get to you how much time is wasted doing that?
    Mr. McIntyre. Dr. Roe, I think that the VA probably would 
be better able to answer the first component of process, and 
that is what happens within the VA before the request for 
authorization for care actually gets to us, and they are 
refining those processes and that is what is referred to as 
NVCC, and that is their part of the process.
    They then contact us and say retired Sergeant Jones needs 
care, he has got a cardiac problem, he is in the following 
market, can you place him with a cardiologist?
    Then it is our responsibility to make sure that we contact 
a cardiologist that is in the network, make sure that retired 
Sergeant Jones gets placed in that provider's calendar, the 
service gets rendered, we then get the medical documentation, 
get it back to the VA, and pay the doctor for the service. That 
is the part of the process we do.
    Mr. Roe. How does the information get from the VA to the 
doctor?
    Mr. McIntyre. On our end the way it works is that the VA 
provides us with the medical documentation and medical record 
information that we need, then we engage with that provider 
because they are in the network. We move that information to 
the cardiologist that the retired sergeant would be seeing, 
they deliver the work, then we grab the medical documentation 
back, provide it back to the VA, and pay the doctor.
    I will tell you that in Phoenix, by way of example, where 
we have had very deep conversation together, the director of 
the facility said, you know, we didn't do those parts of this 
process very well, and while we all understand the fact that 
there needs to be sufficient supply downtown to take care of 
those that can't be cared for in the system, releasing people 
into the marketplace in an unstructured way carries with it the 
risk that the provider does not get what they need.
    At the end of the day the provider might not even get paid, 
and our job is to make sure that there is sufficient supply, we 
take care of the provider so that the provider will take the 
call the next time we call them.
    Mr. Roe. I think that is absolutely essential or they won't 
take the call the next time.
    Mr. McIntyre. Yes, sir. You know that well.
    Mr. Roe. I know that very well.
    And, you know, there are systems out there now that are set 
up among primary--I know this is just specialty care, but this 
could be extended as you have done Ms. Doody in Maine to 
primary care, and there are multitudes of primary care groups 
out there that are ACL approved by Medicare that already meet 
the metrics of quality, not quantity, we talked about that, 
that you don't have to reinvent the wheel. Those metrics are 
out there already and I think this could be extended to primary 
care, and as you said to augment the VA, not the replace the 
VA, and to help them get through these bumps.
    I said everyone knows when you have more patients to see 
that you can see in a day. Every doctor has had that situation 
where he needs some help, and every hospital. Ms. Doody has to 
worry about staffing up her facility.
    So would that will applicability to the primary care, your 
PC3 programs?
    Mr. McIntyre. Yes, sir, and I would say that as people look 
at what portion of primary care cannot be handled in the direct 
system that it is important to also remember that the panel of 
primary care providers in the private sector needs to be 
loosely integrated with the specialty care network, or as you 
know as a provider you are going to end up with people getting 
trapped in one lane and not being able to seamlessly crosswalk 
to the other and we will have a complete mess.
    If I were king for a day you would add primary care into 
the VA PC3 contracts, expect those like us that are required to 
build these to get that put in place and make that part of the 
downtown system work probably.
    Mr. Roe. My time has expired, but Ms. Doody, I think the 
ARCH program you set up is exemplary and I wanted to commend 
you for that.
    Ms. Doody. Thank you very much, sir. I will share that with 
our local veterans.
    Mr. Roe. I yield back.
    The *Chairman.* Thank you, Dr. Roe.
    Ms. Kuster as a reward for being here when the gavel 
dropped you are recognized for five minutes.
    Ms. Kuster. Thank you so much, Mr. Chairman, and thank you 
to all of you for appearing before us today.
    I am from New Hampshire where we are beginning to get into 
the process of private care in the community at Concord 
Hospital, which is in my hometown, and I am very pleased to 
report that the hospital is very pleased with their 
relationship, but most importantly the veterans are very 
pleased with the relationship.
    And so my questions today really have to do with how we can 
expand this to meet other parts of the country that--I know I 
frequently refer to my good colleague here, Beto O'Rourke with 
El Paso and the long, long distances that people have to 
travel.
    For us in the northern part of the state we have the very 
good news of opening new clinics on the Canadian border towns 
of Berlin and Colebrook, New Hampshire. We have the same 
problem that you have in Maine with six months of challenging 
weather, although it is very beautiful.
    And so my question is what could we be doing to extend 
this--these arrangements for community-based care beyond where 
we are now and meet the needs of our veterans throughout the 
country?
    Ms. Doody. I can take that.
    Mr. McIntyre. You want to take that?
    Ms. Doody. Yes. I think we need to be looking at models of 
care such at what we have done in Caribou, Maine as a model for 
the nation and look at what has worked well. And we have also 
experienced some growth pains along the way.
    The discussion earlier about how to condense time from when 
the patient is seen in the primary care office till they are 
actually seen by a specialist. We have worked through a number 
of the issues and we actually have an ARCH case manager from 
the VA alone side the VA--excuse me--a case manager for Cary 
Medical Center, their offices are side by side so they work 
very well together and they work very timely for our veterans.
    So I think what we should do as a nation is look at what is 
working well and replicate that in other parts of our country, 
and I think Project ARCH is one of those opportunities.
    Ms. Kuster. And you have talked about the coordination of 
care, I think that is extremely important.
    One of my concerns is there was reference to the return of 
medical documentation to the VA and making sure--we have had 
testimony here in a previous hearing about opiate use and high 
dosages and our veterans not getting the word when they change 
medication--pain medication, they continue to take previous 
medication and then we have had medical problems from that. So 
the coordination of care is a concern of mine.
    I also want to address the issue in your experience in the 
community care around scheduling. Obviously that is the crux of 
the matter. We have had testimony about using software from 
1985. No wonder they are is a problem. But I would love to 
learn more about in the community care model.
    We had testimony last week that the VA experiences a 50 
percent no show in some circumstances. Obviously that is not 
acceptable in the private sector, it is not acceptable frankly 
from my perspective in the public sector, but what are some of 
the techniques that you use and does that include--I learned 
this morning about the DoD has a patient portal where the 
patient can literally go online, schedule an appointment, 
refill a prescription, actually take--take control of their own 
access to healthcare in a way that is convenient and timely to 
them. And if you could comment on the types of scheduling that 
you use and the effectiveness and how we could learn from that.
    Admiral *Carrato.* Okay. Let me just comment briefly on 
your first question----
    Ms. Kuster. Sure.
    Admiral *Carrato.* --about how can we expand the program 
nationwide.
    With the Patient Centered Community Care Program, PC3, it 
is currently funded, it is currently nationwide, in fact it 
reaches to the Philippines and the Virgin Islands and Puerto 
Rico.
    Ms. Kuster. Yeah.
    Admiral *Carrato.* And I think just to pick up on a comment 
that Mr. McIntyre said that we need to learn lessons, borrow 
from some of the pilots like ARCH, and to his comment about 
adding--potentially adding primary care to PC3. I think that 
could be helpful.
    In terms of scheduling our responsibility for scheduling 
appointments is with our network providers, so we have a call 
center that receives the authorization from the VA, we then 
reach out to the veteran and the provider and try and get a 
match on when an appointment would be convenient. The veteran 
also has the ability to reschedule the appointment.
    Ms. Kuster. Yeah.
    Admiral *Carrato.* I think the DoD portal you are talking 
about really is focused on their direct care system and 
scheduling appointments within the military treatment 
facilities.
    So in the PC3 program we are focused on scheduling 
appointments downtown. And so far it is working fairly well.
    In terms of----
    Ms. Kuster. Do you have a reminder system----
    Admiral *Carrato.* We do.
    Ms. Kuster. I am sorry my time is limited, in fact I have 
gone over.
    Admiral *Carrato.* Yeah, we reach out with a letter to the 
veteran and if they don't show we do follow up.
    Just quickly on no-show rates. Our no-show rate is running 
about ten percent in the PC3 program. Just a benchmark in the--
--
    Ms. Kuster. It is a very helpful benchmark.
    Admiral *Carrato.* --program, TRICARE program, which I am 
familiar with, it is about a 30 percent no-show rates.
    Ms. Kuster. Thank you very much.
    The *Chairman.* Thank you, Ms. Kuster.
    Mr. Flores for five minutes.
    Mr. Flores. Thank you, Mr. Chairman.
    I want to thank each of you for your commitment to care for 
our veterans as well as your organizations as a whole.
    I also want to brag about the physicians in Texas for a 
minute if I can, I am going read a couple of excerpts from a 
press release that came out yesterday.
    It says, ``The Texas Medical Association of Physicians are 
stepping up to care for U.S. veterans awaiting healthcare in 
the U.S. Department of Veterans Affairs system.''
    ``TMA this week invited private physicians across Texas to 
enroll in a TMA registry if they are willing to see veterans in 
their offices TMA will share this registry with community 
groups that work with Texas veterans and with medical directors 
of VA facilities in Texas.''
    ``American's veterans need healthcare so TMA wants to 
create a system to connect in with Texas physicians who want to 
help,'' said Austin I. King M.D., TMA'S president, who has 
already enrolled his practice to care for veterans.
    He noted other physicians can do so too my checking the I 
am willing to serve veterans box in TMA's online enrollment 
form.
    ``I am saddened that our veterans have been forced to wait 
for the healthcare they need and deserve, so until the VA can 
solve this problem I, like many other Texas veterans, want to 
help care for them.''
    And I want to thank the TMA and Texas physicians for what 
they are doing.
    I have a fairly simple question, and I think Ms. Doody you 
touched upon it, but if I could get feedback from each of you 
that would be great.
    What has been the preliminary feedback that our veterans 
have said about healthcare outside the VA versus healthcare in 
the VA? And in particular are any veterans weary of outside VA 
healthcare?
    Mr. McIntyre, let us start with you.
    Mr. McIntyre. Sir, I believe that the feedback has been 
strong and that the complaints are very, very nominal.
    The issue is to make sure that people get placed timely, 
that the providers that we have in our networks are solid 
providers like the ones you are talking about from the great 
State of Texas which we are privileged to serve and I look 
forward to a conversation with the Texas Medical Association 
about where they can go to actually sign up, because we are 
that place as is Health Net.
    And then lastly, you know, I think the providers really are 
leaning forward and the experience that they are going to find 
on the beneficiary side is very similar to those that were 
found with those that were serving in the guard and reserve 
during the time of the conflicts that we have been through 
where you had community providers stepping up at the side of 
the Defense Department through our two organizations to provide 
services that couldn't be done directly by the DoD, and 
comments were very positive and very high as a supplement to 
the Defense Department just as they would be to the VA.
    Mr. Flores. Okay, thank you.
    Admiral Carrato?
    Admiral *Carrato.* Yeah, again, echoing what Mr. McIntyre 
said, the feedback we are getting from veterans on the 
community care that they are receiving is very positive.
    Like Mr. McIntyre I review our--any grievances, appeals 
that we get in just to see how things are going. Very few. So I 
think it is a positive experience.
    Mr. Flores. Ms. Doody you talked about it in your 
testimony, do you have any expansive comments you would like to 
add?
    Ms. Doody. I too would just echo my colleagues. The 
feedback has just been phenomenal from the veterans. Caribou is 
their home and they know the providers, they know the hospital, 
they know the people who work in the hospital, so the feedback 
has been just exceptional, but at the same time they widely 
support the VA healthcare system and VA Togus.
    Mr. Flores. Okay. I thank each of you for your feedback. 
The rest of my questions I will submit for the record and we 
can get to those later on.
    Mr. Chairman, I yield back the balance of my time.
    The *Chairman.* Thank you, Mr. Flores.
    Mr. O'Rourke, you are recognized for five minutes.
    Mr. *O'Rourke.* Thank you, Mr. Chairman.
    I guess my first question is hopefully a big or bigger 
picture question. You know, given the proportion of the failure 
at the VA I would love to know your thoughts on what the 
logical conclusion or extension of this current strategy is.
    In other words I get asked a lot at home why have the VA at 
all? Why not privatize that care? The private sector could do 
it better. What is missing in the VA is competition. Our 
veterans deserve the very best, let us not keep them in this 
institution that is not working.
    From veterans almost to a person I hear if I get in the VA 
I love the care, I am treated very, very well, the outcomes are 
great, don't touch the VA.
    So what do you do best and what does the VA do best and 
five years down the road after we get out of this current 
crisis what will this look like?
    Mr. McIntyre. That is a great question and it is an honor 
to serve El Paso where I spent part of my childhood when my dad 
was in the army as a doc.
    I will tell you that I hope it does not take five years, 
and I think everybody else would echo that statement.
    My belief is that the first phase is to make sure that the 
program that the VA has invested taxpayer money in, VA PC3, is 
put in place, is matured, that the processes on the VA side are 
matured, that our processes are matured, and that together we 
are identifying where those pockets of veterans are that might 
not otherwise be able to get what they need in a complete 
capacity through the direct VA system because they lack the 
capacity to deliver on all the needs, and that the VA system--
yes, sir.
    Mr. *O'Rourke.* I am sorry to interrupt you but I do want 
to understand what you think beyond taking care of capacity 
issues when the VA is not able to see someone in a reasonable 
period of time. Are there specific kinds of care that you all 
would be better equipped to take care of?
    For example, I often think the VA is or should be better at 
handling PTSD or the after effects of traumatic brain injury 
because they see so many people like that as opposed to your 
typical health system or hospital. Maybe that is a VA Center of 
Excellence.
    Is there something on the outside that we should just move 
all appointments or consults or procedures in a given area over 
to the private sector or let the private sector compete for?
    Mr. McIntyre. Great question. My personal view is that it 
is too early to ask that question. Or to answer it probably a 
better way to put it. It is early to ask it, it is right to ask 
it, you are looking over the horizon line, but that we first 
need to get the pieces plugged together and then there needs to 
be a make by decision category by category and facility by 
facility to look at what is best done with taxpayer funds.
    Is it best to have the direct system provide care for four 
veterans in a particular category? Is that really necessary? Or 
should we buy that on the outside because it is more efficient 
and more effective?
    I believe that we are going to be in a place within the 
next six to nine months to start asking in earnest that 
question which you have asked on our end and being able to 
collaborate with the VA to help them understand what the 
downtown capacity looks like and then They in a position to 
make those decisions. We saw that happen in the Defense 
Department with TRICARE a long time ago.
    In Phoenix, Arizona there is no hospital anymore in the air 
force, it is a clinic, and the reason why it is a clinic is 
that the air force stepped back, asked the very question you 
are asking, and ultimately decided we need a platform for 
delivery, so don't dismantle it entirely, but it made sense in 
Phoenix to go to a clinic. In other communities there are still 
air force hospitals.
    And so I think once we get our piece of this plugged in and 
it is matured then those questions will be able to be start--
start to be able to be answered.
    Mr. *O'Rourke.* It also shows you how serious the situation 
is and the attention that is been drawn to it.
    You know, I have been on this committee for a year and a 
half now, this is my first year in Congress, but I have never 
been approached by a lobbyist. On my way into a meeting today I 
was who represents providers in the private sector in El Paso 
and said, we have a hard time getting paid, it takes us a year 
sometimes. We want to see these veterans who are not able to be 
seen by the VA, but it is going to be really hard to do this if 
we don't get paid. You know, my client, you know, wants to work 
with you to see how that is done.
    I only have 15 seconds so very quickly is payment a 
problem, and if you could all just answer very briefly.
    Mr. McIntyre. We paid quickly, we pay to 99 percent plus 
accuracy as we did it in TRICARE, and I will look forward to 
talking to that lobbyist before we leave today.
    Mr. *O'Rourke.* Great.
    Mr. Carrato, just really quickly.
    Admiral *Carrato.* On the claims payment issue?
    Mr. *O'Rourke.* Yes.
    Admiral *Carrato.* Yeah, I think that is one of the things 
that providers like is that we--our two organizations pay very 
quickly, accurately, and that is one of the benefits of joining 
our network.
    Mr. *O'Rourke.* Ms. Doody very quickly.
    Ms. Doody. Yes, actually obviously they are speaking on 
behalf as their role as insurance providers. Having a direct 
relationship with the VA there is an issue with prompt payment.
    Mr. *O'Rourke.* Okay. We would love to follow up with you 
on that.
    Ms. Doody. Absolutely.
    Mr. *O'Rourke.* Mr. Chairman, I yield back.
    The *Chairman.* Yeah, and thank you for clarifying that 
because I think the question is VA's prompt payment, not the 
providers.
    Mr. Denham, you are recognized for five minutes.
    Mr. Denham. Thank you, Mr. Chairman.
    Mr. McIntyre, I am sure you have seen reports over the last 
few weeks of several different pieces of legislation that would 
address these backlogs. I know the chairman has a bill, I have 
a bill, I know there are several others out there. But 
basically if the VA can't meet its own goals, its own 
guidelines then we believe that they should be immediately 
outsourcing that care so that our veterans get immediate care.
    So my question to you is what are you doing to prepare for 
a possible increase?
    Mr. McIntyre. We are already seeing an increase. Our care 
demand went from 2,000 in the first month to 10,000 in May, so 
that would start January through May, a 4-, 5-fold increase, 
and we are expecting a lot more demand coming our direction 
based on the backlogs and that is why we tripled our front line 
staff is to be able to handle that demand. The flow levers are 
put in place to be able to make that work.
    The notion that someone can go somewhere if we don't 
individually or collectively meet the requirements is probably 
going to be a very effective cross pressure on all of us to 
stay focused on what we need to do together to make sure that 
people get what they need within the time frames and the 
specifications of what is necessary viewed by this committee 
and by the administration.
    Mr. Denham. Is there anything that you are lacking now or 
anything that you need to prepare for the future?
    Mr. McIntyre. No.
    Mr. Denham. And across the entire nation can you describe 
in greater detail the efforts that we would need to increase 
provider ship?
    Mr. McIntyre. I go back to what happened 18 years ago at 
the start of TRICARE and then I look at what happened at the 
start of the conflicts we are currently engaged in.
    A former member of Congress who was then governor of Idaho, 
Dirk Kemp throne, called me and said, can you come to Idaho? I 
said, why? He said, you know we are getting ready to deploy the 
largest portion of a population as a guard unit of any state. I 
want to ask every lawyer to come to the table and take two of 
their fellow citizens. Every doctor to do the same thing. You 
know what happened? The network grew from 700 providers in 
Idaho to 1500 in one month, because every community provider 
was willing to step up and just take a few.
    One of the very effective things all of you could do to be 
helpful to all of us, including the VA, but also to veterans, 
is when you see providers say will you take a couple? And at 
the end of the day let us make sure that we have got a way to 
catch those folks as they come our direction and make sure that 
they are in the network so that we really can meet the demand 
regardless of where a veteran lives. So if they live out in 
that really rural community then we have got the ability to 
meet their needs, and together we should be able to solve the 
same problem that got solved in Idaho as it related to the 
guard that was getting ready to deploy. They had a full network 
when they were gone for their families, and when they came back 
the same thing.
    Mr. Denham. As we have seen that provider network expand 
has there been an issue with participation rates due the 
reimbursement?
    Mr. McIntyre. You know we are----
    Mr. Denham. Both by reimbursement rates as well as Mr. 
O'Rourke said the timing to get repaid?
    Mr. McIntyre. We are doing a pretty good job of being able 
to sign up providers. Like Admiral Carrato said, there is a 
challenge from time to time because some who may not really 
understand the implications could say to someone, you know, you 
don't really have to sign up with this we will just do this 
contract directly that we currently have in place. Eventually 
those contracts won't exist anymore and there needs to be a 
network sitting on the back end. But the folks in the VA are 
working those issues.
    We have found that for the most part providers are willing 
to step up, because as Tom said, we do pay on time, and in our 
case we have over 60,000 providers already signed up, we are 
working on a few areas to complete still as we move forward, 
and we are getting a discount against the VA structure in terms 
of fees with high quality providers. So that means that more 
veterans can get care and that the care is high quality. So we 
have stretched the VA budget.
    Mr. Denham. And are you working with now or have you worked 
with in the past public hospitals?
    Mr. McIntyre. Absolutely. In fact in many of the locations 
that we are in, public hospitals that are in, I will tell you 
the fastest network contract we have ever done was done in 
Phoenix two weeks ago, it took five days from the start of a 
conversation between the CEO and myself and Maricopa County and 
we had a signed contract five days later and they are now part 
of the delivery system, and that gets replicated across the 
board.
    Mr. Denham. Thank you, and I yield back.
    The *Chairman.* Thank you, Mr. Denham.
    Ms. Brownley, you are recognized for five minutes.

    Ms. Brownley. Thank you, Mr. Chairman.
    And thank the panelists for being here this morning.
    Mr. McIntyre, I wanted to ask you a question. Do you track 
your wait times?
    Mr. McIntyre. Absolutely.
    Ms. Brownley. And how do you report those wait times to the 
VA?
    Mr. McIntyre. Yes. We track the information collectively 
about where we sit with regard to the appointing responsibility 
that we have and what that looks like location by location. As 
I said, we started with 2,000 authorization requests in 
January.
    If you look at what happened from April to May, we went 
from 6,500 to 10,000 in one month. And one of the reasons why 
we have added so many line staff in the last two weeks is that 
we were concerned about the volume that was coming at us 
because we started to struggle a bit with that.
    We wanted to get in front of that issue and then also 
prognosticate forward so that we would be prepared for the 
clusters of backlogs that would be coming at us. And we are now 
prepared to handle whatever those volumes are that we are going 
to have to deal with.
    Ms. Brownley. So what is your average wait time would you 
say?
    Mr. McIntyre. Our average wait time right now is about 
seven days to get someone to an appointment. And that is two 
days beyond where we want to be because our responsibility is 
to be at five days and we are digging out of the challenge of 
going through a five-fold increase in three months.
    Ms. Brownley. Thank you.
    And so your measurement for success on wait time is five 
days then?
    Mr. McIntyre. Our responsibility is to take an 
authorization for care request from the VA for a particular 
veteran and in five days have that veteran appointed with a 
network provider to be seen within 30 days for care.
    So I talked about our wait time. That is against a five-day 
appointing standard. In some markets, there are not enough 
providers to actually deliver care against the demand that 
currently exists given the backlogs.
    And so we have been able to help the VA understand market 
by market what that will look like as they make decisions about 
how to handle the backlogs.
    Ms. Brownley. So do you have that? Is that published, 
something that we can review to see what the wait times are 
from city to city, region by region?
    Mr. McIntyre. Be glad to sit with you and have a 
conversation about things that would relate to the markets that 
we serve.
    Ms. Brownley. Thank you.
    And what about transportation? How does TriWest coordinate 
transportation and reimbursement to our veterans?
    Mr. McIntyre. We are not responsible for transportation 
directly. I will tell you that if you look to some of the 
markets we are in where transportation is a greater challenge, 
we will engage directly with the VSO community and others that 
do transportation support. The VA has a structure through which 
they reimburse for transportation.
    One of the challenges we all faced in the community in 
Arizona where not only do we have a furnace of a backlog that 
we are all dealing with, but it is also hot right now, was how 
do we set up a transportation infrastructure across the city so 
that as veterans are going to get care that we don't find them 
expiring at a bus stop waiting for a bus to get to where they 
need to get.
    So the VSOs have stepped up in the community, interlinked 
how that is going to work and they will get a voucher if they 
are unable to get to where they need to be in an easy fashion. 
And our appointing staff will be educated about how they get to 
that voucher so that they will all be able to get what they 
need.
    Ms. Brownley. Thank you.
    And in terms of reimbursements, is TriWest being reimbursed 
at Medicare rates by the VA?
    Mr. McIntyre. We are paid an administrative fee to do the 
work that we do when the work shows up. That is how we get 
paid. And we are also responsible for making sure that we can 
build a network that has got the right quality in it, the right 
breadth and the right depth, and on the reimbursement rate to 
get providers signed up at or below the fee schedule.
    And that is an important piece because at the end of the 
day, if you can find providers that are willing to step up and 
take a few of their fellow citizens and are willing to do that 
at a little bit less than the fee schedule at its maximum 
level, that allows more people to get cared for in a finite 
budget. And that is what we are doing.
    And as I said and as Admiral Carrato said, we have fairly 
large networks built and others are being added. We did that 
work in the Defense Department community and we are doing it 
now. And we cross-leverage as a company the relationship of a 
lot of nonprofit Blue Cross Blue Shield plans and two 
university hospital systems with own our company. And that way, 
we are able to maximize the taxpayer dollar while delivering 
the highest quality access to care.
    Ms. Brownley. Thank you.
    My time has expired. I yield back.
    Mr. Michaud. Mr. Chairman, so yes or no, are you being 
reimbursed at the Medicare rates? Yes or no?
    Mr. McIntyre. Yes.
    Mr. Michaud. Okay. Thank you.
    Mr. Bilirakis. [Presiding] No problem.
    Mr. Runyan, you are recognized for five minutes.
    Mr. Runyan. Thank you, Mr. Chairman.
    And I want to talk a little bit about expectations because 
I know, Mrs. Doody, you said in your testimony that 14 days is 
unrealistic and I think Mr. McIntyre just kind of backed that 
up with how he answered the previous question.
    Two questions. In normal operating procedure, what is the 
expectation and this in this crisis with what we know with the 
data that we can get from the VA, which I think most people 
agree we can't really trust a lot of it right now, what would--
obviously that data would be higher with a higher volume, but 
all three of you, can you kind of set what those expectations 
may be?
    Ms. Doody. Absolutely, sir. And I am sharing again from my 
experience with Project ARCH in my hospital.
    When I say it is unrealistic, meaning a rural community 
with a limited number of providers, as both Mr. McIntyre and 
Mr. Carrato have stated, just a physician going on vacation is 
going to impact that 14-day window.
    Also, if we have a physician who leaves in a certain 
specialty, that extends that 14-day opportunity to get the 
patient in to be seen, and it is just not realistic for that to 
occur.
    What we are seeing is we are able to get the patients in in 
a lot of very busy specialties, primarily orthopedic surgery, 
which is probably similar in a lot of other markets that these 
gentlemen are in. That is where the demand is the highest for 
some of our aging veterans, and we are able to get them in 
within 30 days.
    And, interestingly, the previous indicator in looking at 
getting a patient in to be seen by a provider was at the 30-day 
window. And from understanding doing research, the majority of 
the VA facilities were able to get the veteran in and be seen 
by a provider within the 30 days.
    So I think going forward, that is something that really 
should be investigated and see if that is another opportunity 
for our veterans to be seen in a timely manner.
    There are probably some areas or some parts of the country 
that veterans can be seen within 14 days because of the supply 
of physicians, but I would highly recommend that you 
investigate in rural communities, it is probably not realistic. 
And, again, that is from my experience for the last three 
years.
    Mr. Runyan. The other two of you agree with----
    Admiral *Carrato.* Yeah, I think that is pretty consistent. 
You know, our requirement, as David mentioned, is for routine 
appointments within 30 days. For urgent appointments, 48 hours. 
But, again, depending on the specialty, depending on the 
geographic location, you can get some routine appointments in 
quicker than 14 days. Some may go a bit beyond 30 days.
    The other factor is, you know, veteran choice. You know, it 
may not be convenient to have that scheduled appointment, you 
know, at two o'clock on Wednesday. They may want it a different 
day of the week. And that sometimes can impact when a routine 
appointment is scheduled and agreed to.
    But I think 30 days for routine appointments is a fair 
benchmark.
    Mr. Runyan. Thank you.
    Chairman, I yield back.
    Mr. Bilirakis. Thank you, Mr. Runyan.
    I will recognize Mr. Walz now for five minutes.
    Mr. Walz. Thank you, Mr. Chairman.
    And, again, thank each of you for coming and providing 
expertise and a perspective, one to educate us and to the 
country on we are identifying, we are getting a diagnosis, and 
now the prescription for what happened.
    I am grateful for that and this is a very important piece 
of this. And we have an opportunity to move this forward for 
decades to come.
    Mr. McIntyre, in full disclosure to everyone and on my last 
deployment, my family was covered under TRICARE Prime Remote 
that was administrated by TriWest. And my wife to this day 
claims it was the best service she ever got. So I tell you that 
in just understanding and seeing this from a deployed national 
guardsman on the implications of having private insurance, 
switching over to TRICARE, and then seeing how that was 
administrated. It was seamless and I am grateful for that.
    Mr. McIntyre. Sir, we are not perfect. We were honored to 
serve your family. I didn't even know we were doing that, but 
we were honored to do it.
    And our belief is that not five years from now but a few 
months from now, we will be in that same zone of seamless 
operation and then we will be asking the kinds of questions of 
ourselves that your colleagues and others are asking and be 
able to mature this program the way we matured TRICARE.
    Mr. Walz. Well, it gives me a perspective, you know, small, 
limited, and extrapolating from that, we have to be careful. 
But I think Mr. O'Rourke's and other questions are being 
answered of how we go forward.
    I asked a witness last week who is making a case and I 
think what we are hearing from this, and this is fair to say, 
that as the public heard this and they were rightfully appalled 
by what happened, the knee jerk reaction to give them a card 
and let them go anywhere.
    This witness made the case is why is there an intermediary, 
why is there a VA or a TriWest or a Health Net in the middle. 
Why can't they just go do this themselves. How would you 
respond to this? This witness made the case that it is an 
ineffective bureaucracy that can never be fixed and putting 
another one in there, give control to the veteran and you can 
see the appeal of this theoretically.
    My question to you is, what is your take on that and flesh 
out the details of what that means if that were the case?
    Mr. McIntyre. My hope is personally that the use of such a 
card will not be necessary and that if we collectively 
including Congress have an understanding of what the realities 
are that veterans face and the ability to customize this 
program and the VA architecture that at the end of the day, we 
will retool the system so that it is ready for the return of 
veterans who have served in these two conflicts.
    And what you refer to on the guard side is an initiative 
that we did as a company that was singularly done. It was done 
at our own expense and it was started at the encouragement of a 
former colleague of all of yours, Dirk Kempthorne.
    And we then stepped back and said if that works in Idaho, 
we can do that everywhere. And so we reached out to doctors all 
over the 21 states that we were responsible for at the time. 
And what we found was most were willing to take a couple of 
their fellow citizens.
    And so if we know what the mapping looks like, I would say 
from primary care all the way through the most specialized 
specialty care, we should together be able to have a platform 
that works effectively on the VA side from a direct delivery 
system and downtown.
    Mr. Walz. That is the hybrid, the best of both worlds.
    Admiral, do you concur with that?
    Admiral *Carrato.* I do. I think, you know, having a card 
which would provide the veteran with unfettered access to 
providers may sound attractive to some, but I have seen that in 
some systems. I think what we really need to do is make sure 
that we build an integrated, coordinated system.
    As I mentioned, our network and TriWest's network, we fully 
credential the providers. We know who the quality providers 
are. We have a URAC accredited network. I think the key is to 
make sure that we augment the VA brick and mortar and it is a 
local decision. There are some that specialize in TBI, 
prosthetics.
    But I think using the private sector to augment that 
capability and deliver a truly integrated, coordinated 
healthcare experience for the veteran is what we need.
    Mr. Walz. Ms. Doody, does that make sense? And you are 
appealing from an area that is my wheelhouse, the rural areas 
and the rural veterans. But the card doesn't do you any good if 
there is no one there to provide the care.
    Ms. Doody. Absolutely, sir. And I agree with my colleagues. 
We are here. Both of these programs, whether it is TRICARE and 
Health Net or what we are doing with Project ARCH, this is to 
augment the care that the VA healthcare provides. It is not to 
replace it.
    Mr. Walz. Very good. Well, I thank you all for being here.
    I yield back.
    Mr. Bilirakis. Thank you, Mr. Walz.
    Now I will recognize Mr. Huelskamp for five minutes.
    Mr. Huelskamp. Thank you, Mr. Chairman.
    Gentlemen and ma'am, appreciate you being here.
    The first question I would have would be for Ms. Doody and 
trying to understand the Cary Medical Center. That is a 
hospital that serves not only veterans but other patients as 
well, is that----
    Ms. Doody. That is correct, sir.
    Mr. Huelskamp. And you obviously do receive Medicare?
    Ms. Doody. Yes, I do.
    Mr. Huelskamp. What is the average reimbursement time from 
Medicare for those services?
    Ms. Doody. Medicare would be timely. We would probably see 
reimbursement from Medicare probably within 30 days if not 
less.
    Mr. Huelskamp. Okay. And currently from the VA for services 
that we discussed here, how long?
    Ms. Doody. That can extend out for months if not years.
    Mr. Huelskamp. Months if not years?
    Ms. Doody. Yes. There is a prompt payment issue with the 
VA.
    Mr. Huelskamp. Okay. Issue on scheduling appointments with 
Medicare patients, who schedules their appointments?
    Ms. Doody. Our individual office staff.
    Mr. Huelskamp. Okay. So there is no intermediary that----
    Ms. Doody. No.
    Mr. Huelskamp. --schedules appointments? But for the 
veterans, who schedules their appointments?
    Ms. Doody. We have the exact same model in place for the 
veterans, so there is no intermediary. We work directly with 
the veteran and our office staff.
    In fact, as I mentioned earlier, we are fortunate with this 
program to have the case managers associated with ARCH, the VA 
facility, and our case managers working side by side. And they 
are actually physically located at the offices. So they are 
physically present when the veteran is seen and they can 
schedule the patient right then.
    Mr. Huelskamp. So the veteran shows up and there is no 
release from the VA to go into the ARCH Project?
    Ms. Doody. Yes. The VA has to provide authorization. And, 
again, it is the case manager with the VA that reviews that 
information from the primary care provider, does the 
authorization and forwards it on to our case managers. And that 
happens very timely. That does not take days or weeks. That 
sometimes can take hours.
    Mr. Huelskamp. The authorization for each visit or how 
often does VA have to step back in? Obviously in Medicare, that 
doesn't occur?
    Ms. Doody. That is correct.
    Mr. Huelskamp. But the VA does have to preauthorize. 
Describe a little bit more how extensive that is. I am hearing 
from doctors that every time they want to prescribe, they have 
to get authorization every single time. Is that not accurate?
    Ms. Doody. That is very accurate. There can be multiple 
authorizations involved with a single visit. And what is 
difficult being in a non-VA facility when our provider--I am 
also a nurse, so knowing the history of how this works for our 
patients.
    When a patient is seen by a physician, the physician does 
diagnosing. And to diagnose, they have to receive laboratory or 
ancillary results back. Well, they will order those results 
with the intent of receiving those results back to get a 
diagnosis. They again have to go back to get authorization from 
the VA before we can go forward with that testing. So there are 
multiple authorizations involved.
    Mr. Huelskamp. Thank you.
    And, gentlemen here, is this the same type authorization 
requirements that you are going through the VA at certain 
levels for nearly every one of these type of services?
    Mr. McIntyre. There certainly are requirements that we have 
to meet from an authorization perspective. And we have been in 
the conversation since we started the program a couple of 
months ago on the VA PC3 side to give the VA feedback on where 
there are opportunities for refinement.
    And in some cases, those pieces of refinement have already 
been done. In other cases, things are under analysis.
    Mr. Huelskamp. How does that compare to TRICARE? And both 
you gentlemen, if I understand your companies, they are heavily 
involved in TRICARE as well. And describe quickly, if you 
could, how that compares.
    Mr. McIntyre. If you go back 18 years to the start of 
TRICARE, it was similar.
    Mr. Huelskamp. What about today?
    Mr. McIntyre. Today it would be much more seamless in terms 
of how things operate.
    Mr. Huelskamp. And certainly Medicare is much more 
seamless----
    Ms. Doody. Yes.
    Mr. Huelskamp. --in terms of preauthorization. But a little 
more questions on the PC3. So you keep talking about how if 
providers would pick a couple veterans. What is wrong with 
letting the veterans pick a couple providers? That is how the 
Medicare system works and that is what I am confused here.
    In Medicare and rural areas, there is a capacity problem. 
In my district, they are looking for patients. I just talked 
with the head of the Kansas Hospital Association. They are 
begging for patients and the VA won't give them patients or 
they make it incredibly burdensome. We have to create a special 
project called ARCH just for one community and have got 70 
hospitals that have capacity issues and they don't have enough 
patients.
    And they are not asking for a middle man. They are asking 
for letting the veteran pick to come in. They would be happy to 
serve them because they are waiting for reimbursement, but that 
becomes the problem whether they wait a year or 14 days for 
Medicare.
    And so if you are going to tell these folks that you are 
going to wait a year going through this cumbersome system, they 
are going to say, well--you know, veterans are saying, wait, 
they are going to pick Medicare over this particular system.
    Mr. McIntyre. On the private sector side through VA PC3, 
the payment rates are such--payment timeliness is such that we 
are paying within less than 30 days.
    Mr. Huelskamp. I appreciate that.
    Only a short time. One last thing with Ms. Doody. We have 
heard rumors that the national director of ARCH is beginning to 
ask folks like yourself to begin informing veterans that the 
program will be ended.
    Have they actually told you that, actually spread that 
message to our veterans?
    Ms. Doody. No, I have not, sir.
    Mr. Huelskamp. Okay. Thank you.
    I yield back, Mr. Chairman.
    Mr. Bilirakis. Thank you.
    Dr. Ruiz, you are recognized for five minutes.
    Mr. Ruiz. Thank you very much, and thank you for being here 
today.
    In an effort to ensure veterans in my district and across 
the country receive the care that they have earned and need and 
when they need it, I have sought input from my veterans' 
advisory board and I have listened to veterans throughout my 
district during our veterans' initiative this past summer.
    The things that they were most concerned about include 
issues in regards to getting their medications in a timely 
manner that isn't so cumbersome for them, how medical records 
can be obtained in a more timely manner, particularly on the 
nights and weekends, by non-VA providers, and how to overcome 
bureaucratic red tape preventing VA healthcare systems from 
partnering with federally qualified health centers.
    So my first question is, how can we ensure that non-VA 
providers have access to veterans' medical records on nights 
and weekends and also get them faster?
    When I did my overnight shifts in the emergency department, 
it was very difficult to get the EKGs or the medical records 
from a veteran that I needed to make decisions at that moment.
    So how do you address that issue and what can we do to 
ensure that those medical records are received by the non-VA 
providers?
    Ms. Doody. I can tell you from our experience through 
Project ARCH we have access. It is read only. We are not able 
to input data into the VA record, but we have access to that 
information at our hospital. So that has helped with the 
continuity of care as you describe.
    As it relates to veterans receiving that information, 
again, with the close relationship of our case managers, we are 
able to get the information back to our veterans in a timely 
manner. In fact, we have to report that to the VA as part of 
Project ARCH.
    And also the information goes back to the Veterans 
Administration as soon as we receive it as a private hospital. 
It goes back to the VA, so the VA healthcare providers, whether 
it is the primary care or other specialists, are able to see 
the work that we do as a hospital and that gets inputted into 
their electronic medical record.
    Mr. Ruiz. Do the physicians input it into their system or 
do you input into yours, make copies, put it in electronic 
form, PDF or something, and send it back? How does that work?
    Ms. Doody. Well, that actually from my point of view is an 
opportunity for improvement between the VA and the private 
hospital. We do have an electronic medical record and, as you 
know, the VA has an electronic medical record, but we have to 
print hard copies for the VA to insert into their record 
because we do not have access to put that information in. And 
we should.
    Where technology is today as it relates to electronic 
medical records, we should be making that seamless and a lot 
more timely for veterans in veterans' hospitals and community 
hospitals.
    Mr. Ruiz. Okay.
    Admiral *Carrato.* And a similar answer. For routine 
appointments, we are able to provide the medical records from 
the VA to the provider. I think evenings or weekends or 
emergency, it might be good for us to have access at some point 
to the VistA system so we could take a look at that. And those 
conversations are going on.
    And I think the electronic interface, I know there are some 
demonstration sites, the VLER program, that is looking at how 
do they capture all the medical records in a unified system. I 
think continuing to move forward on that.
    Mr. Ruiz. In the sake of time, I am going to go to my next 
questions. What are the obstacles and how can we overcome them 
in order to open care for our veterans in federally qualified 
health centers?
    You mentioned before that we have issues in rural areas 
because of lack of physicians, because of transportation, 
because of these other issues that the FQHCs are designed to 
address.
    How can we open up care with FQHCs?
    Admiral *Carrato.* I have had ongoing conversations with 
the national association representing the federally qualified 
healthcare centers. The issue with PC3 is it is largely 
specialty care and the capability of the federally qualified 
healthcare centers is principally primary healthcare.
    So we have been looking for some opportunities. They are 
part of my TRICARE network, but, again, the lack of the 
requirement for specialty care really is a matchmaker 
capability.
    Mr. Ruiz. In terms of prescriptions, I have veterans that 
tell me it takes too long for them to drive all the way about 
an hour and a half, two hours to the VA hospital, pick up their 
prescriptions. Sometimes they run out of their prescriptions 
before it is due.
    What are the obstacles in them being able to go to a 
pharmacy or go to another local clinic or hospital to use their 
formula?
    Admiral *Carrato.* You know, I will have to respond to the 
record for you on that one. I don't have an answer.
    Mr. Ruiz. Okay.
    Ms. Doody. From my experience in working with local 
veterans, we have a VA clinic that houses primary care 
providers for veterans, so they have access locally to talk 
with veteran providers. But a number of our rural veterans also 
use a mail order pharmacy, so that may be an opportunity for, 
you know, local veterans.
    Mr. McIntyre. We have set up a process in the pharmacy area 
where script can be provided on a short-term basis and then it 
is backfilled by the VA. But I think some stepping back to 
figure out how do we take the feedback that you are getting, 
particularly as a provider of care in your career before you 
came here, and determine between ourselves, both of our 
organizations and the VA, how can we make that work in a more 
seamless way when we look through the lens that you have got. I 
think that that would be very constructive.
    Mr. Ruiz. Well, the lens that I have that should be the 
lens for the care to our veterans is to put veterans first, to 
put patients first, to be a veteran-centered center of 
excellence and look through the lens of our veterans, not my 
lens, but the lens of the veterans, and their experiences and 
what we can do to address their needs.
    Mr. McIntyre. You bet.
    Mr. Ruiz. Thank you.
    I yield my time.
    Mr. Bilirakis. Thank you very much.
    I will recognize myself for five minutes.
    Why don't I follow-up on that question with regard to 
prescriptions. What percentage of veterans use a mail order 
pharmacy and are they pleased with it by and large?
    Ms. Doody. I could only tell you from limited feedback that 
I have received from veterans. The majority of the veterans 
that I work with or have been in contact with use the mail 
order pharmacy since we are in rural northern Maine and the 
feedback has been positive.
    Mr. Bilirakis. Very good. Thank you.
    Mr. McIntyre, to assist the VA in working down their 
identified backlog for care, it is my understanding that 
TriWest will hire an additional 100 employees and an additional 
100 the following week.
    What kind of system do you have in place to monitor the 
effectiveness of their training and ensure these employees are 
properly scheduling appointments and processing claims?
    Mr. McIntyre. We already have 100 people in process doing 
that work. We took our training programs, looked at them 
through the other set of lenses backwards to figure out what 
refinements we could make to shorten the training. Those folks 
are in the process of doing the easiest part of a plan as they 
get spooled up to be able to do this. And we will be measuring 
their performance just like we measure every other staff 
person's performance in that critical work.
    Mr. Bilirakis. Well, what is your policy as far as 
disciplining or reprimanding an employee for not doing their 
job, improper scheduling or processing claims? Do you have a 
policy in place?
    Mr. McIntyre. You bet. We monitor very carefully where gaps 
are in performance. We put people on corrective action plans. 
If the issues that they worked on are viewed as a problem that 
can't be corrected with counseling, then we will release them 
on the spot.
    And we found a very dedicated workforce that together with 
all of us wants to be able to serve veterans just as is true 
for the providers in our networks.
    Mr. Bilirakis. Thank you.
    A question for Mr. McIntyre and then Mr. Carrato as well. 
In both your testimonies, you mentioned that with any new 
program, no matter how well the design and preparation, areas 
of enhancement will be detected in early stages. So areas of 
enhancement, I will say it again, will be detected in the early 
stages.
    Can you share with this committee some of those challenges?
    Mr. McIntyre. What we have discovered is the fact that 
there needs to change some of the authorization processes that 
were being discussed previously. Those have been put on the 
table, the notion of making sure that we refine how we actually 
do physical appointing with the veterans to make sure that we 
are dropping the no-show rate even further and the way in which 
people come to understand the program itself and how it 
executes because that has changed both for the veteran but also 
for the VA medical center staff themselves.
    Mr. Bilirakis. Mr. Carrato.
    Admiral *Carrato.* Yeah, a couple of things. One is I do 
think we need to continually educate the VAMC staff on the 
benefits of the program. Mr. McIntyre alluded to some issues 
that our network providers bring to us and that is not unusual 
that the authorization requirement is one.
    The other issue that we have discovered and we are talking 
to the VA about is the requirement that all care go to network 
providers. In some situations, as an example, you don't know 
what anesthesiologist is going to scrub for surgery on a given 
day. And that anesthesiologist may not be a network provider.
    So I think some allowance for a percentage of non-network 
providers to support our veterans. This really is the only 
program that I support that has a requirement for 100 percent 
network providers. There is always an allowance for some non-
net providers. And I think that would actually increase our 
ability to serve our veterans.
    Mr. Bilirakis. Very good. One last question for you, sir.
    What kind of information does VA share and/or what 
information do you have access to regarding the veterans' 
process within the PC3 program?
    Admiral *Carrato.* Regarding the veterans' process within 
the P----
    Mr. Bilirakis. Yeah, correct. Correct.
    Admiral *Carrato.* --the internal VA process? There is 
sharing of that information and we are having ongoing 
conversations because I think the intent on all parties is to 
improve processes and particularly those that are impacting 
access to timely care.
    Mr. McIntyre. I would echo the same.
    Mr. Bilirakis. Thank you very much. Appreciate it.
    And now I will recognize Ms. Negrete McLeod. You are 
recognized for five minutes, ma'am. Thank you.
    Mrs. *Negrete McLeod.* Thank you, Mr. Chair.
    I think what I have gotten out of this is that your 
programs are going well. However, if we are going to allow 
veterans to go outside and get other providers and the 
reimbursement rate is so long in coming back to them, who is 
going to want to provide services if the reimburse rate is so 
long in taking to get back to the provider?
    Admiral *Carrato.* Well, in the program, the Patient-
Centered Community Care program, we directly reimburse our 
network providers and we reimburse in 30 days or less.
    Mrs. *Negrete McLeod.* Well, yes. But you are part of a 
network. But if we are going to move that forward that veterans 
can go outside of the VA to get services, if the providers 
don't belong to you, what is going to incentivize those other 
people to take any other patients if the reimbursement period 
is so long to get reimbursement?
    Admiral *Carrato.* Yeah, I think that is a fair question. 
And that is one of the things we hear from providers when they 
join our network. And one of the reasons they like to join our 
network is that we pay promptly.
    I think that is an issue that needs to be addressed by the 
VA which is prompt payment to providers. That is still an 
issue. I think there are solutions that could be brought to 
bear.
    You know, one could be that, you know, we could have, you 
know, permission to reimburse non-network providers, but I 
think there are a variety of things that could be done to 
increase the timeliness of----
    Mrs. *Negrete McLeod.* Because it is one thing in 
philosophy to say we are going to provider services outside, 
but if there is no providers, then it is just an empty promise 
that we are going to do.
    Admiral *Carrato.* Correct. Correct.
    Mrs. *Negrete McLeod.* Thank you.
    Mr. Bilirakis. Yield back?
    Mrs. Negrete McLeod.* Yes.
    Mr. Bilirakis. Okay. Very good.
    Okay. I will recognize Mr. Jolly for five minutes.
    We are getting there, Ms. Brown. You are next.
    Mr. Jolly. Thank you.
    I actually just have a very general question. And if you 
don't have enough information to answer, that is fine.
    Yesterday in my district office, I hosted about 300 people. 
We had what I call a veterans' intake day for folks to come in, 
express their concerns and their compliments. And so I think 
everybody here has expressed, you know, we got great 
compliments, people who want to stay in the VA system, 
absolutely, and they never want to step outside of it.
    But then we also heard from those who do want to step 
outside of it. My primary takeaway from that event is we need 
to do even more in providing the veteran choice is the bottom 
line. The question, though, is how do we do that in a way that 
is fiscally responsible.
    And so my question for you generally, and, again, if you 
don't have enough information, that is certainly fine, in your 
roles supporting non-VA care, can you give either an 
assessment, if you have technical information or if it is just 
a working opinion, on the cost effectiveness compared to 
traditional care, realizing that we have hard infrastructure 
costs within our VA system that aren't reflected when you go to 
non-VA?
    We can look at all sorts of data. I am somebody who thinks 
typically data is manipulated to get whatever outcome or 
position we want to finally be able to support.
    But can you give an opinion or assessment on the cost 
effectiveness of non-VA care versus within the VA?
    Ms. Doody. I can tell you from our experience with Project 
ARCH, and I wish I could give you specific numbers, sir, the 
company Altarum who was contracted to collect this information, 
and my understanding is they are going to report back to you 
folks in 2015, are looking at the cost of care per veteran.
    From my understanding, it is less than if they would have 
gone to a VA facility for certain procedures. And so, again, it 
is anecdotal. It may be geographic. I can't comment on the 
other regions or other states in our Nation, but also just 
limiting the amount of mileage, the traveling that the veteran 
would have to do traveling to a VA hospital to receive care is 
a savings to the system also.
    The veterans have also expressed, which I think is 
something that needs to be considered going forward, is there 
are times that they have not sought preventative care because 
they did not want to drive the extra miles to receive a 
colonoscopy or have a mammogram.
    And I think that is something we need to consider because 
those diagnoses that may be missed because a veteran has not 
received preventative care is very costly to our system.
    Admiral *Carrato.* I would say with PC3, it is a tough 
comparison comparing the care delivered in the VA brick and 
mortar to network care. But with PC3, the starting point for 
our reimbursement is, you know, Medicare levels and we have 
been successful in getting discounts from some of our 
providers.
    So I think if you compare PC3 care to other non-VA care, I 
think it will prove to be cost effective. But, again, it is 
pretty early to reach any conclusion.
    Mr. Jolly. Sure.
    Mr. McIntyre. And it is an integrated system in a loosely 
done way. So the fact of the matter is you need both sides of 
that puzzle to be able to make this work. And as was discovered 
by the Defense Department when they started down a similar 
journey 18 years ago, it is a very effective way to be able to 
complete the other side of the puzzle. And as Tom said, people 
are signing up.
    The administrative fee that we get paid is very nominal as 
it should be and we get paid when the work comes our way. We 
don't get paid before it comes our way. And that is the right 
way to do it from a taxpayer perspective.
    Mr. Jolly. Very good. Thank you.
    Mr. Chairman, I yield back.
    Mr. Bilirakis. Thank you.
    Thank you so much for your patience, Ms. Brown. You are 
recognized for five minutes.
    Ms. Brown. Thank you.
    And let's be clear. I did like your Daddy better.
    But let me just say that the reason that I was a little 
late getting here is because I had guests that flew in from New 
York, Matthew Hamilton, president and CEO of Columbia Hospital. 
He is here and a couple of his colleagues.
    Why don't you stand up? Stand up, you and it is a couple 
more people with you. Stand up. Yes, they are here. Thank you.
    And the point is there are people all over the country that 
want to do business with the VA. And they have an international 
certification. But the question is, how do you do business with 
VA? And I personally have a hundred percent support of the VA. 
But I do know that in certain cases that we need to partner 
outside of the VA to provide a certain amount of services.
    Someone spoke about Texas. Texas next to Florida, Texas 
sent back $95 billion of Medicaid reimbursement. Some of that 
money would have gone to veterans. Florida sent back $55 
billion. And part of that system with our stakeholders is that 
we have transportation involved for the disabled or for the 
veteran, part of that Medicaid money that we have sent back to 
the Federal Government. So it is not just the VA. It is the VA 
partnering with different organizations and different groups.
    And someone mentioned TRICARE and medicine. Let me tell 
you. My mother is TRICARE, so I know what happened and, you 
know, that she can go anywhere she wants to in the community.
    Well, I went to the corner Walgreens to pick up her 
medicine and when I drove through, they said $200. So I know it 
is not no $200. She is TRICARE. I said check again. It came 
back $13.00 or $15.00. Some people, they would have just tried 
to pay it or wouldn't have said anything.
    So we have got to make sure that we have oversight and make 
sure that our stakeholders, we are all on the same page because 
this is all taxpayers' dollars. So it is very important that 
any system that we put in place that VA have the oversight and 
make sure that we are getting what we are paying for.
    So anyone want to respond to that?
    VA has worked with teaching hospitals, different groups. In 
fact, when the VA built the hospital in Orlando, hopefully one 
day it will open, but when we built that hospital in Orlando, 
it has been the catalyst for the University of Florida, the 
University of Central Florida, many institutions, and it is a 
medical complex. And so, you know, it is a team effort. It is 
not just the VA.
    So why don't you respond to that?
    Admiral *Carrato.* Well, first I would like to thank you 
for pointing out Mr. Hamilton and I certainly will reach out to 
him right after this hearing.
    Ms. Brown. All right. I got his information here.
    Admiral *Carrato.* And, yeah, I think you are right. A lot 
of people are stepping up. I know in Orlando, the Florida 
Hospital and the Florida Hospital Medical Group have--we have 
begun those negotiations as a result of the issues they see.
    So you are correct. A lot of people want to help. And we 
want to, as I said, continue to grow our network. So, again, 
very much appreciate the introduction and I will follow-up 
after the hearing.
    Ms. Brown. Thank you. Thank you.
    So you are operating now out of Florida?
    Admiral *Carrato.* Florida with the exception of the 
Panhandle. We have divided Florida.
    Ms. Brown. I don't know whether the Panhandle is really 
Florida, but if you say so.
    Admiral *Carrato.* Well, that is why Mr. McIntyre has the 
Panhandle.
    Mr. McIntyre. That must be because the chairman is not 
here.
    Ms. Brown. It is the chairman. I take that back. The 
Panhandle is Florida. In fact, the people from Miami say if you 
are not in Miami, it is all Panhandle.
    But on the prescription, basically the 90 days, it works. 
The veterans like it. And if you are going to work with the 
local pharmacies, it is very important that you have the 
oversight because, like I said, I went through and she said 
$200 without skipping a beat. And I knew that was not the case. 
So it is very important that we have the oversight in the 
system.
    Ms. Doody. Absolutely. Your comment about this being a team 
effort, and I can tell you from our experience with VA Togus in 
Maine, we are a team in providing healthcare services to our 
veterans in northern Maine.
    In fact, one of the models that we--as part of our model 
which we started many years ago, the administration from VA 
Togus based out of Augusta comes to Caribou and we host town 
hall meetings with our local veterans which has helped expand 
services for our veterans and it has been very successful. So 
we are working very collaboratively with the VA healthcare.
    Ms. Brown. And to my surprise, veterans really like tele-
medicine also.
    Ms. Doody. Absolutely.
    Ms. Brown. And so we are going to have a hearing in the 
next week on how we can expand that program. I was surprised 
because I would not have liked it. But when I visited with 
several of the veterans' organizations and groups, they like 
it.
    Ms. Doody. Absolutely, ma'am. And from our experience in 
rural parts of our country, tele-medicine is a wonderful option 
and it has been very successful. We have been doing it for in 
excess of ten years and our local veterans are very 
appreciative of even that opportunity because they know it is 
another opportunity for access.
    Ms. Brown. Thank you very much.
    Mr. Chairman, Chet Edwards, former Member of Congress, is 
in the audience and he has worked so many years with the 
veterans.
    Why don't you stand up, too?
    Mr. Bilirakis. Absolutely.
    Ms. Brown. Stand up. Let's give him a hand. Thank you so 
much for being here.
    Mr. Bilirakis. Welcome, welcome, welcome.
    Ms. Brown. Stand up so they can see you. All right. Thank 
you.
    Mr. Bilirakis. Welcome.
    Ms. Brown. Thank you.
    All right. I yield back the balance of my time.
    Mr. Bilirakis. I gave you an extra minute just for the 
record.
    Okay. Any further questions? Any further questions? Yes, we 
have Ms. Titus.
    You are recognized for five minutes.
    Ms. Titus. Thank you, Mr. Chairman. I appreciate it.
    As I have sat here and listened to all of you talk about 
some of the issues affecting non-VA care, it seems to me we can 
kind of sum them up with three.
    One, lack of providers which I talk about all the time. I 
represent Las Vegas. Now, there is a national lack of 
providers, especially in primary care, but we certainly have 
one in Las Vegas. So as we push veterans out of the VA and into 
the private sector, I don't want that to be a push to the 
airport because they don't have any doctor to see them at home.
    The Idaho approach 20 years ago of having a doctor step up 
and take on two veterans is great, but a bit idealistic in 
today's world.
    The second issue is the reimbursement. Now, we have kind of 
talked about this, but the GAO report that we are going to be 
discussing in the next panel shows that it is slower, 
absolutely is slower than the private sector or other federal 
payers for healthcare. And the Federation of American Hospitals 
said that the unreimbursed claims often exceed 50 to 90 days, 
so we can't ignore that as a problem.
    The third thing is in that same report, we see that the VA 
has insufficient data to judge the timeliness and the cost 
effectiveness of non-VA care. You confirm that you can't talk 
about the cost effectiveness. There is just not enough data 
there yet. You think it is working pretty well, but we don't 
have any hard figures.
    And we also know that CBO has been kind of unable to assess 
the cost going forward and nobody is talking about how to pay 
for it, yet we are moving pell-mell towards more veterans using 
this kind of non-VA care.
    Now, it is not that I am opposed to that, but I want us to 
do it right or else we will be having hearings five years from 
now talking about all the problems with non-VA care.
    Now, to hear you all talk about it, you are not having any 
problems, things are working great under your networks, but we 
know that is not true either. I mean, there are problems out 
there and we need to be serious about how to address them from 
the beginning.
    Now, as I understand it, you all are just kind of like the 
middle man like Sallie Mae and Medicare Advantage where you 
have a contract to provide a service. That is fine.
    But as you push more people out into the private sector, do 
you see your kind of business growing? Is your network going to 
cover more areas or more new networks and competition going to 
come on to be part of this new system that we are going to be 
creating?
    Mr. McIntyre. Ma'am, if I might, thank you for your 
service, and we have the privilege of serving Las Vegas----
    Ms. Titus. I know you do.
    Mr. McIntyre. --among a number of other places in TRICARE. 
And in TRICARE, there were a lot of providers who stepped up 
and said I will take a few. And we are finding the same thing 
in the VA work.
    And what I will tell you is the way that that worked around 
Nellis, the way that worked with the other places in Nevada is 
that the care that couldn't be rendered directly by the Defense 
Department was taken care of by the providers downtown.
    And we have been into this work since January 2nd following 
a 90-day startup. And what I will tell you is----
    Ms. Titus. Which was pushed back, right?
    Mr. McIntyre. I am sorry?
    Ms. Titus. Didn't you have to push that deadline back?
    Mr. McIntyre. No. In Nevada, we started on January 2nd and 
after a 90-day startup and we have a lot of providers in Las 
Vegas that have stepped up that said they will be helpful in 
taking care of the veterans in that community.
    Now, we have some backlogs in that space, a lot of backlogs 
in gastroenterology. Guess what? There a lot of those providers 
in Las Vegas that have a lot of extra capacity because of the 
size of that community. And so them being able to digest that 
entire backlog in a 15 to 30-day period is very, very difficult 
to be able to do.
    And so we have been involved in a conversation with the 
gastroenterology community in Las Vegas by way of example for 
here is what we are looking at volume wise. We would like your 
help. They have said yes. And how can you open up your calendar 
to make sure that veterans can fit into the calendar as you are 
doing your scheduling in your office. And we are doing that a 
lot of places across the communities that we serve.
    On the primary care side, primary care is not done through 
these contracts today. In primary care in the Defense 
Department environment, there were providers all over the 
community in El Paso and beyond in Nevada that stepped up to 
say we will take a few. I can't fill my entire practice with 
those that come through this program because the reimbursement 
rates may not be as high as they might be in some other 
programs, but I will take a few. And it worked and it will work 
here.
    Ms. Titus. What about in Ely, Nevada where you don't have a 
doctor who can step up and take a few?
    Mr. McIntyre. Well, if you are in Ely, Nevada and there are 
no providers in that community of a certain specialty type, 
which is a factual statement, as you know, then you can't 
deliver the care in that community.
    Then the question becomes where is the closest location to 
Ely to be able to deliver that care? And one of the things that 
we in the VA are trying to determine as we go through this 
process is where are the veterans and in what numbers that need 
to rely on the private sector as a pop-off valve or a relief 
valve to the direct care system and what is the demand so that 
we can make sure that those networks match to that.
    Ms. Titus. Is that study ongoing right now? Are you doing a 
study?
    Mr. McIntyre. It is not a study. It is not a study. It is 
an engaged conversation that is going on every day across our 
geographic space and I am sure the same is true in the Health 
Net area to share information between both sides of the system 
to make sure that we identify together where those pockets are 
where we might need providers that might not have otherwise 
been known to all of us as we started up this program on 
January 2nd.
    Ms. Titus. Is there hard data? Are you going to have hard 
data to show us or is this going to be anecdotal?
    Mr. McIntyre. I will be glad to come sit down with you and 
talk about the State of Nevada and the communities in your area 
that you are responsible for. And I would like to be measured 
against the same standard that Mr. Walz talked about which was 
at the end of the day when we got to a place that was at 
maturity, it won't be five years from now, that the veterans 
that need care that rely on this program as well as the direct 
system are getting what they need.
    Ms. Doody. In your comments, ma'am, the--I am sorry. Go 
ahead. No. Go ahead, please.
    Admiral *Carrato.* I was just going to say just in response 
to your points, claims payment, we are paying in a timely 
fashion, 30 days or less. Reimbursement, we have been 
successful in achieving some discounts and we are continuing to 
grow our network. And as Dave said, part of it is looking where 
the demand is and matching supply to demand.
    In terms of what our organizations do as contractors, we do 
provide a lot of value. We pay claims timely, as I said. We 
coordinate care. We have quality oversight. We build networks 
in accordance with URAC accreditation requirements. So we do 
deliver value add to our veterans and to their healthcare 
needs.
    Ms. Doody. And our arrangement, ma'am, is slightly 
different. It is a direct contract with the hospital without a 
middle person involved. And we work directly with the VA 
hospital within our state in coordinating the care for the 
veteran and what the needs might be.
    So it is direct access between the VA and our private 
hospital. So it is a very different arrangement and there is 
very open communication between the VA Togus, our hospital in 
our state, and our hospital.
    Ms. Titus. Thank you, Mr. Chairman.
    Mr. Bilirakis. You are welcome.
    All right. Now I will recognize--you yield back obviously. 
Okay. I will recognize Mr.--do you have any questions, Mr. 
Coffman, for this panel? You are recognized, sir, for five 
minutes.
    Mr. Coffman. Thank you, Mr. Chairman.
    Mr. McIntyre, I am not sure if this was covered, but in 
your written statement, you reference the experience TriWest 
brings to bear. As a former TRICARE provider, I just want to 
say you did a great job in the State of Colorado and I thank 
you for that.
    But what similarities and differences, if any, do you see 
between the implementation of TRICARE and the implementation to 
date of PC3? What lessons learned would you like to see VA take 
from TRICARE and applied to PC3 to improve the provision of 
care to veteran patients?
    Mr. McIntyre. I think that the VA on the VA PC3 side has 
done an admiral job under very, very tight time constraints and 
then the loading on of the challenges that we have all been 
talking about today. Those challenges got loaded in as this 
program started up.
    They were in the process of putting in place and maturing 
their own system, the NVCC care process, which has them 
standardizing how they put stuff to the marketplace. I think 
they would all say that that program wasn't entirely at 
maturity at the time that this all started.
    A 90-day startup is a very, very short period. Nine months 
is short. Ninety days is really short. And I think we stood up. 
We were wobbling a bit, but we stood up what we needed to do. 
And I think looking backwards, if they had been given the 
opportunity to have more than 90 days, they probably would 
agree that that would make some sense.
    But I think by and large, things have gone reasonably well. 
They studied the TRICARE experience. They studied the 
implementation of other programs. And they did a pretty good 
job of designing a system that matches up to a very complicated 
enterprise.
    That unlike the military has differences site by site by 
site by site. And in the military, you see standardization by 
and large between the army facilities, between the air force 
facilities, and between the navy facilities. And you don't find 
that kind of common consistency, yet the program office and 
central office have been trying to standardize their process to 
which this is matched.
    Mr. Coffman. Let me just start again. The PC3 program is a 
program whereby under the authorization of the VA, the veterans 
eligible for VA care can access non-VA providers.
    Would either of you also like to comment on the question?
    Admiral *Carrato.* On the similarities, sir, of the 
startup?
    Mr. Coffman. Sure.
    Admiral *Carrato.* I think Dave covered a lot. I agree that 
the VA did a very good job on defining the requirements for the 
PC3 program. I think one of the things we are seeing in terms 
of similarities with a large program, a new program across just 
such a broad geographic area, there still are lessons to be 
learned.
    I think it is important to listen to our providers and some 
of the requirements that don't quite fit with the civilian 
practice of medicine and see how we can address those. And 
obviously it is important to hear the voice of the veteran as 
well.
    So I think one of the big lessons learned is with the early 
startup, during that first year, pay attention to those lessons 
learned and adapt and be flexible in trying to improve the 
program and make it more efficient for all parties concerned.
    Mr. Coffman. Ms. Doody.
    Ms. Doody. Yes. From our experience, we started Project 
ARCH in the fall of 2011 and had to work very closely with the 
Veterans Administration since this was a new program and also 
had to learn some of the requirements as it related to the VA. 
And we also had a very tight time frame. In fact, at the 
beginning, it was a moving target on when Project ARCH was to 
go live.
    But we were able to pull it off and it is because of 
excellent relationship with the Veterans Administration. They 
provided us the support and the direction that we needed to 
make it happen for the veterans.
    And I agree with the comments of my colleagues. We have to 
listen to the veterans and what is working and what is not 
working and immediately respond to that.
    Mr. Coffman. Mr. McIntyre, very quickly. Prior to the 
recent Phoenix scandal in that hospital, how long did it take 
for a veteran to try and access an outside provider through the 
system? Do you have any idea of what that was like?
    Mr. McIntyre. I don't.
    Mr. Coffman. Okay.
    Mr. McIntyre. And that is information that the VA should be 
able to provide to you.
    Mr. Coffman. Okay. Any other comments on that specific 
issue?
    Ms. Doody. No, I am not aware.
    Mr. Coffman. Thank you, Mr. Chairman. I yield back.
    Mr. Bilirakis. Thank you.
    Mr. Wenstrup, you are recognized for five minutes.
    Mr. Wenstrup. Thank you very much, Mr. Chairman.
    I want to talk about a couple things. I come from a group 
of 26 doctors, orthopedics and sports medicine, and some of us 
had military background. And we felt an obligation to take 
TRICARE even though reimbursement was less and a desire to take 
TRICARE to take care of our military. So I appreciate what you 
were saying because I think that there is that appeal.
    You do have to monitor whether you are being overrun with 
it because it is not necessarily great for your bottom line, 
but you are willing to do that. And that is an appeal that I 
think we need to make to doctors in America that they will 
understand and not be chastised if they were to limit that 
amount but just encourage them to participate.
    And I think that would be a great benefit to us today. And 
I am glad to know that it has been successful. That was the 
notion within our group.
    But I also have a concept here that I would like to get 
your opinion on. You know, we have doctors that are VA doctors 
within the walls, but what about our specialists that are out 
in the community that we refer to? Can we credential them as VA 
doctors?
    And although they probably don't want to learn the VistA 
system and get into all that, can they send a PDF of all their 
notes that can get into the VistA system and be accessible and 
at the same time when they write a prescription to the 
patients, because they are credentialed through the VA, can 
they just go get it filled at the VA?
    But some ideas along those lines where even though you are 
not within the walls, you are a VA physician outside the walls.
    Mr. McIntyre. There certainly is value in the ability to 
supplement what can be done directly in the system by allowing 
providers to come in on a case-by-case basis and deliver 
services. And in some communities, that works.
    In Phoenix, Arizona, one of the things that is underway 
right now is discussion, as there should be, between the VA and 
some of the local facilities on can you expand our platform and 
give us the ability to actually make use of your facilities to 
deliver more care in the other direction because they have 
enough providers, but they don't have enough OR space. That is 
always a good idea.
    And in Arizona, that has been going on for a long time 
between the air force and the community, the shrinkage of that 
hospital to a clinic. And so my guess is there is going to be a 
lot more of this conversation that goes forward.
    And I would like to thank you for your service to this 
community and really demonstrating the fact that it really does 
work if folks take a handful of their fellow citizens in these 
important programs and step up and do the work. And our job is 
to make it as seamless as we can make it to honor the service 
of those providers and make sure they get paid on time so that 
they will take another one or two in the next three or four 
months.
    And that model really does work, so thank you for 
validating that.
    Mr. Wenstrup. Thank you.
    Mr. McIntyre. You bet.
    Mr. Wenstrup. Unless someone else has a comment.
    Admiral *Carrato.* You know, since you threw out the 
concept, I will take the bait. And, you know, Dave has talked a 
lot about TRICARE. And I think the notion of assets moving from 
the private sector to the VA and the VA to the private sector 
has been demonstrated to be a very effective component of the 
TRICARE program.
    So if the VA has a service fully staffed with the exception 
of a technician or a certain provider, the contractor can 
provide that resource to the VA again to make sure that care is 
delivered.
    By the same token, there is something called external 
resource sharing. So if there is no OR space in the VA, you 
don't want the surgeon's skills to degrade, you can get them 
privileged at a network hospital. So that concept actually 
works very effectively in the DoD program. And it is a concept 
that is probably worth exploring within PC3.
    Mr. Wenstrup. I appreciate the open-mindedness as we move 
forward. Thank you.
    Ms. Doody. And from our experience in Project ARCH and 
actually your comments about can I use my own prescription pad 
and can I use some of my own forms, you sound like some of my 
physicians when we started Project ARCH. I have to be honest 
with you.
    And until we learned some of the forms or requirements of 
the VA, it was a transition time for our providers, but now it 
is a way of life. And I will be honest with you. We have 
actually learned from the VA some best practices that we have 
incorporated into our own hospital.
    Mr. Wenstrup. Thank you very much. I appreciate your input.
    And I yield back.
    Mr. Bilirakis. Thank you. Thank you very much.
    I will ask one last question for TriWest and Health Net. 
What are the performance measures you track besides and beyond 
profit?
    Mr. McIntyre. We have a responsibility to appoint people 
within a certain time frame. We track that. We track the volume 
of work that our staff is taking to complete. We track the 
providers that we are required to have from our perspective 
based on the demand that we see by facility and the location of 
veterans.
    And we track claims payment on the back end and we track 
the return of medical documentation back from the provider to 
the VA to make sure that the medical record when that person 
ends up back in the VA needing care is going to be complete.
    We track about 40 other metrics, but those are the ones 
that top of mind would probably be most important to making 
sure that we are staying focused on the very performance of 
what is going on here.
    What I will tell you is this year, our company is paying 
$29.00 for the privilege of doing this work. And the reason for 
that is, and I am not complaining because we do that 
voluntarily, the reason is you pay to build your own 
infrastructure. And you only get paid for the work as it 
arrives and that requires advanced investment.
    And so we do that willingly and we believe at the end of 
the day that this program is going to be a good match to the 
direct delivery system just as TRICARE is to the Defense 
Department.
    Mr. Bilirakis. Thank you.
    Admiral *Carrato.* Yeah. We are an ISO 9000 certified 
organization, so we really focus on tracking performance 
metrics. Dave mentioned some of the more significant ones, but 
we have a program management review that we conduct monthly 
where we track all of the metrics that the VA uses to monitor 
our performance.
    And I can tell you that so far, things are going well. We 
also have a very detailed quality assurance surveillance 
program that we use. And I think that so far, you know, we have 
been performing well against those metrics.
    Mr. Bilirakis. Very good.
    Mr. Michaud, anything further?
    Mr. Michaud. No.
    Mr. Bilirakis. All right. Well, thank you very much again 
for your testimony today.
    And what we will do is dismiss the first panel and we will 
call the second panel. I want to welcome the second panel to 
the witness table.
    Joining us on the second panel is Randy Williamson, Mr. 
Randy Williamson from Health Care, director for the Government 
Accountability Office, and Mr. Philip Matkovsky, the assistant 
deputy under secretary for Health for Administrative Operations 
for the Department of Veterans Affairs. Welcome.
    Thank you both for being here today. If you are ready, Mr. 
Williamson, you are now recognized for five minutes.
    If you could check, your mic is on.
    Mr. Williamson. Thank you

                 STATEMENT OF RANDY WILLIAMSON

    Mr. Williamson. Thank you, Mr. Chairman, Ranking Member 
Michaud, and Members of the Committee.
    I am pleased to be here today to discuss our work on VA's 
programs for delivery of care through non-VA providers. Non-VA 
providers treat veterans in community hospitals or doctors' 
offices and VA pays for them using a fee-for-service 
arrangement. Last year VA spent about $4.8 billion dollars for 
non-VA provided medical care for more than one million 
veterans.
    Since VA intends to allow more veterans to see non-VA 
providers due to excessive wait times at some VA facilities, it 
is important to ensure that non-VA care is reliable, 
accessible, and efficient. Two recently GAO reports identified 
numerous weaknesses in VA's management of its non-VA care 
program, and today, I want to address three broad areas that 
require VA's attention in this regard.
    First, the need to eliminate VA claims processing errors 
mainly for emergency care provided at non-VA facilities. 
Second, the need for more focused oversight and reliable data 
to monitor the non-VA care program. And third, the need for 
better communication with veterans and non-VA providers about 
program eligibility and claims processing.
    Regarding claims processing errors, at four VA facilities 
we visited, we found patterns of noncompliance with VA 
processing requirements. Specifically, we reviewed a sample of 
128 claims for emergency care non-VA providers had submitted to 
these four locations and found that VA had inappropriately 
denied 20 percent of the claims because VA clerks made mistakes 
in planning eligibility criteria and were sloppy in their 
procedures for processing claims.
    Moreover, VA did not always notify veterans, as required, 
that their claims had been denied; therefore, some veterans 
were likely billed for care that VA should have paid for and 
those not notified by VA were denied their appeal rights and 
were unaware they were liable for paying bills for non-VA 
providers.
    Looking forward, we found that VA, both at the national and 
local levels, does not have effective oversight mechanisms in 
place to detect claims processing errors or to monitor other 
important aspects of the non-VA care program. For example, the 
issue of wait times for appointments in VMACs, which has been a 
serious and longstanding problem for VA, could be an issue with 
non-VA providers as well. This is because once a veteran is 
authorized to use non-VA provider care, VA doesn't track how 
long a veteran waits to see a non-VA provider. Because VA had 
virtually no data on this, little is now known about wait times 
for veterans seeking care outside VA.
    Finally, communication between VA and veterans and between 
VA and non-VA providers is lacking in some respects. We found 
on our visits to four locations that some veterans do not 
always understand their eligibility for coverage for emergency 
care from a non-VA provider and this has resulted in cases 
where veterans have avoided or delayed seeking emergency care 
for non-VA providers, sometimes to the veteran's detriment.
    For example, a VA official we interviewed described one 
account involving a veteran experiences chest pains who drove 
over a hundred miles to a VA facility rather than seeking 
emergency care at a local non-VA medical facility. In another 
case, a veteran experiencing chest pains died during the 
weekend as he waited to seek care until a local veteran CBOC 
opened on Monday.
    Moreover, VA does not conduct any veteran surveys to 
identify specific gaps in veterans' knowledge and determine how 
to better target its veteran education efforts. Non-VA hospital 
administrators and other providers we talked with also cited 
instances where VA claims processing staff had been 
unresponsive to the requests and queries about unpaid claims in 
efforts to move veterans back to VA facilities once their 
emergency conditions had stabilized as required. In some cases, 
non-VA providers had difficulty even obtaining a point of 
contact from the nearest VAMC to answer their questions.
    In summary, VA needs to improve the management of its non-
VA care program to provide veterans with accessible, reliable 
and efficient care when they seek care from non-VA providers. 
VA needs to fully develop and implement a comprehensive 
strategy and action plan that addresses weaknesses the GAO and 
others have identified. This includes establishing clear 
responsibilities and expectation for what needs to be done and 
holding staff at all levels accountable for implementing the 
AVA care program, such that veterans are treated fairly and not 
put in harm's way. This concludes my opening remarks.
    Mr. Bilirakis. Thank you.

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    Mr. Matkovsky, you are recognized for five minutes, sir.

                 STATEMENT OF PHILIP MATKOVSKY

    Mr. Matkovsky. Thank you, sir.
    Good morning, Mr. Chairman, Ranking Member Michaud, and 
Members of the Committee.
    Thank you for the opportunity to discuss VA's non-VA care 
programs. I would also like to take a moment to thank and 
acknowledge our partners, TriWest, Health Net and the Cary 
Medical Center for their collaboration in providing health care 
to veterans.
    We at the VA provide care to veterans directly in our 
facilities or through contracts which includes individual 
authorizations or reimbursements for emergency care. Taken 
together, these are the non-VA care programs and they are 
designed to ensure veterans receive safe, effective and timely 
health care. It is our policy to provide veterans necessary 
care within our system when feasible. When we cannot provide 
necessary hospital care and medical services in our facilities, 
we are authorized to provide that care through qualified 
community partners.
    On May 23rd, we deployed the Accelerating Care Initiative, 
a coordinated systemwide initiative to accelerate care to 
veterans. This initiative strengthens access to care in the VA 
system, but also ensures flexibility in use of private sector 
care when and where it is needed. Where we cannot quickly 
increase our capacity, which we owe the American taxpayers, we 
are increasing our use of care through the community. I would 
like to say that we have identified in excess of $300 million 
dollars additional funds for non-VA care at this point.
    Today, I am focusing on two major initiatives to improve 
oversight, management and delivery of non-VA care, Patient-
Centered Care in the Community, PC3, and the Non-VA Care 
Coordination Program, NVCC. PC3, as we heard earlier, is a 
nationwide program of health care contracts to provide veterans 
access to specialty care. PC3 is really formed by these 
contracts with Health Net and TriWest that we learned about 
earlier.
    These two firms have developed networks of providers who 
deliver the covered care including specialty care, mental 
health, limited emergency, and some newborn. This program first 
received its authorization in January and in some cases is 
fully implements.
    The Non-VA Care Coordination Program, again, NVCC, is 
really an internal program to improve and standardize our 
processes for referrals. NVCC really is about referral 
management, effective controls, consistency, documentation, 
tracking, and coordination of patients in community health 
facilities. Through this activity, our staff are to use 
standardized processes, templates for the administrative 
functions associated with non-VA care. This system is now 
nationwide deployed.
    Authority to pay for non-VA emergency treatment, I need to 
explain, is limited by statute. Generally speaking, we can 
authorize non-VA emergency treatment for serious medical 
emergencies experienced by veterans who are receiving medical 
services in VA facilities when we cannot clinically manage 
that. When a veteran experiences a medical emergency apart from 
these situations, we advise on all of our phone calls--phone 
systems that the veteran should seek care at the nearest 
emergency department.
    I need to say that, however, by law, such care is not 
always considered to be authorized or pre-authorized. Whether 
VA has legal authority to pay for emergency treatment depends 
on certain eligibility factors for reimbursement or payment of 
those expenses. Simply put, veterans must meet statutory and 
regulatory criteria applicable to benefits under the U.S. Code 
Title 38. Unfortunately, not all veterans meet those criteria.
    I acknowledge on Mr. Williamson's comments that we should 
have improved our communication to our veterans making sure 
that we provide information about what we are allowed to and 
not allowed to cover. We have done some of that in our tailored 
health benefits plan that each veteran receives, but there is 
more to do. We can and will improve that work.
    We are completing Project ARCH or Access Received Closer to 
Home. That is a three-year pilot program to evaluate how to 
improve access to quality health care. Authority for Project 
ARCH does expire August 29th.
    The PC3 contracts that we learned about earlier provide 
coverage for veterans in rural, highly rural areas for 
inpatient and outpatient medical and surgical specialty care, 
as well as urban areas; therefore, veterans requiring those 
services will not be impacted by the expiration of ARCH 
contracts.
    Individual transition plans have been developed for all 
veterans and we are now extending our use of contract care to 
include primary care. We developed a solicitation which is now 
receiving proposals for contract primary care services in 
Arizona, New Mexico and parts of Texas. We will extend that 
effort next for primary care nationwide
    In conclusion, our mission is to provide timely and quality 
health care to those who have served our country in an 
environment that understands and honors their military service. 
We recognize and acknowledge we cannot always do that timely in 
our facilities. We are enhancing our use of non-VA care to 
ensure that we provide veterans with quality and timely care 
when, where and how they want it.
    Mr. Chairman, Mr. Ranking Member, I thank this Committee 
for its dedication to and care for our nation's veterans. I 
appreciate the opportunity to appear before you and I am 
prepared to answer your questions.
    Mr. Bilirakis. Thank you, gentlemen, for your testimony. 
Appreciate it.
    I will recognize myself for five minutes for questions.
    Mr. Matkovsky, information VA released last week revealed 
that over 57,000 veterans have been waiting 90 days or more for 
their first VA medical appointment and 64,000 veterans, who 
have enrolled in the VA Health Care System over the last 
decade, never received the appointment they requested. That is 
121,000 veterans who have not been provided the care they have 
earned and deserved.
    Why did the Department allow these veterans to wait months 
and even years in some cases on a VA waiting list instead of 
referring them to a non-VA care provider to receive the care 
that they needed?
    Mr. Matkovsky. Congressman, I will tell you for the 57,000 
on the electronic work list, we are working that process now 
with accelerating care. For the newly enrolled appointment 
request, which you reference, which was roughly 64,000, you are 
correct, that is just not excusable and we should have had our 
eye on that and we did not.
    I will tell you one thing that our staff did as they 
assessed all veterans who had not received an appointment yet, 
out of an abundance of caution, here's what we did: If a 
veteran had an enrollment processed at a VA medical center and 
we could not definitively identify an appointment in that 
facility--I don't care if they were seen anywhere else in our 
system, but if they applied in the Tampa VA for instance, and 
they did not have an appointment there, we went all the way 
back to the beginning of the enrollment and added them to our 
contact list. So as of the 64,000 where we were before, as of 
this morning, and I think we will be producing an additional 
update, we had below 30,000 to contact. We are working that 
list aggressively. We should not have let it slip, but we did, 
out of an abundance of caution, pull everybody we could 
imagine.
    Mr. Bilirakis. Yeah, I just can't--I just don't understand. 
It is reprehensible, inexcusable that these veterans would have 
to wait that long, and some months, and years.
    Anyway, what interaction exists between the non-VA care and 
the VA's electronic waiting list?
    Mr. Matkovsky. Right now, what we have done with 
accelerating care, we have produced directive out to the field. 
And what we asked the field to do, and we published their 
productivity numbers, their capacity numbers, and their 
efficiency numbers. The first order of business what to 
determine whether or not they could increase their capacity. If 
they could not, they could not run an extra clinic, an extra 
half-day clinic, evening hours or weekend hours, they were 
directed to identify capacity in the community.
    One of the things we did with that, our PC3 program office 
shared all of our data with the PC3 contractors so that they 
would have that available. Their instruction was if they could 
not find it inside the facility, to then refer that to care in 
the community through non-VA care. We made over $300 million 
dollars available in supplemental. As of yesterday, close of 
business, $127 million dollars of that supplemental had already 
been obligated for non-VA care episodes.
    Mr. Bilirakis. Next question, sir, for you: I understand 
from your testimony that claims processing, activities for non-
VA care are centralized at the VISN level or decentralized at 
the facility level. How much variance did you find from 
location to location on how non-VA claims are processed 
throughout VA and what effect do you think such variance has to 
the timeliness and accuracy of non-VA care claims processing?
    Mr. Matkovsky. That is for me, sir?
    Mr. Bilirakis. Yes, for you.
    Mr. Matkovsky. I will be candid. I think that the 
variability does exist site to site. We began in October and 
one item that we focused on in addition to claims payment 
accuracy, which we focused on throughout all of fiscal year 
2013--beginning in fiscal year 2014, our drive was really to 
make sure, quite simply, that we paid our bills on time, 
irrespective of the distributive nature. So we had been 
focusing on each one of our claims payment centers, whether it 
is a VISN or a facility level, but the distributed system does 
have variability.
    Mr. Bilirakis. Mr. Williamson, could you comment on that, 
please?
    Mr. Williamson. We looked at a number of systems, some of 
which were centralized at the VISN level and others that were 
at individual VAMCs, and we didn't really see a variation in 
the quality of the claims processing. There were a pattern of 
errors no matter what system used.
    Mr. Bilirakis. Thank you.
    I will recognize the ranking member, Mr. Michaud for five 
minutes.
    Mr. Michaud. Thank you very much, Mr. Chairman.
    Mr. Matkovsky, thanks again for coming here, appreciate it.
    Under the PC3 program, what are the reimbursement rates of 
both TriWest and Health Net?
    Mr. Matkovsky. Well, I can tell you--I think the technical 
term--I think I am going to get this wrong--but I think the 
technical term is privity of contract. As the Government does 
not have privy of contract to the PC3 network, but the PC3, we 
reimburse at CMS rates, sir. We also have an administrative fee 
that we pay out.
    Mr. Michaud. So they get paid Medicare rates, plus 
administrative?
    Mr. Matkovsky. That is correct, sir.
    Mr. Michaud. What are you reimbursing the ARCH program?
    Mr. Matkovsky. ARCH, I believe there are different rates, 
but I believe for Cary is at CMS rates.
    Mr. Michaud. At CMS rates.
    Mr. Matkovsky. And there are different rates for different 
sites.
    Mr. Michaud. But you are not paying administrative rates 
above and beyond?
    Mr. Matkovsky. I do not believe so, sir.
    Mr. Michaud. Okay. We heard earlier about payments to ARCH 
is slow in getting there, why is that? Is there anything to 
speed up the payments?
    Mr. Matkovsky. I was looking through our VISN 1 where they 
are currently located and in network one our payments rates had 
dipped a little bit below 80 percent, but now we are--80 
percent of our unpaid claims are 30 days or younger. One thing 
I would have to do is go in and take a look at them and have a 
detailed poll run for Cary. It shouldn't be a case where we 
have got payments that are outstanding very long.
    Mr. Michaud. Okay. Do you need additional authority to 
continue the ARCH program?
    Mr. Matkovsky. Well, actually, very interesting question. 
Thank you for that.
    Technically speaking, we have the authorities to cover 
that. We would have both the sharing authority under 8153 and 
frankly we have the fee authorities under 1703.
    PC3 is very comparable. I have to say, you know, PC3 is 
kind of an outgrowth of what we have learned in ARCH and some 
other previous efforts, so it is an extension of that and we 
are using our existing authorities of 8153 and some of 1703 to 
do PC3 nationwide. So, no, I don't think we require that.
    Mr. Michaud. Oh, so you don't need additional authority to 
continue the ARCH with looking at all of your other 
authorities?
    Mr. Matkovsky. I will say one thing about ARCH, and I am 
not a contracting officer, but ARCH does expire as a contract. 
It was a firm-termed contract with a base one year and then two 
option years which expires, I believe, September 30th. I think 
there has been some question about when does it expire. The 
legislative authority identified as August 29th. The contract 
is September 30th.
    And typically, unless the contracting officer can determine 
a compelling reason to extend that, and I am not a contracting 
officer, we let the contracts expire.
    Mr. Michaud. Okay. And what about reimbursements--my big 
concern is getting back to the reimbursement rates, 
particularly when you look at, it is my understanding that they 
are less for the PC3 program, and my big concern is if you are 
reimbursing TriWest and Health Net at the CMS rate but they are 
contracting with a provider and their contracts will then give 
you a little bit less than CMS rate, first of all, can they do 
that?
    Mr. Matkovsky. Well, again, I am certainly limited on what 
I can say called privity. There is only so much and only so 
much we should. Purely anecdotally or conjecturally on my part, 
some of my friends and peers were in the private sector health 
care community, as we discussed the evolution of ACOs, I think 
what we are seeing in the ACO marketplace is reimbursement 
rates below CMS rates, as well. So I realize there is some 
concern that has been voiced here, both officially and then 
through other channels, my sense is that the market is heading 
that way anyway.
    Mr. Michaud. Well, here's my big concern is the fact that, 
particularly when you look at states like Maine, we have the 
oldest population in the country, number one in Medicare, 
number two in Medicaid, second from the bottom on reimbursement 
rate. And when you have providers that have 65, 70 percent of 
their patient workload on either Medicare or Medicaid rate, 
then that is a huge problem as far as them being able to 
provide the services and we are already hearing providers 
saying that they are not going to take anywhere Medicare or 
Medicaid patients because they can't sustain that type of loss.
    And that is the huge concern I have, particularly if you do 
not continue the ARCH program in its form or whatever the 
reimbursement rate that they are getting in rural areas because 
it is--we are not in the Boston market area and it is very 
difficult, particularly for specialty care, and that is the 
huge concern that I have with that program going away if you 
don't reauthorize it, what is the, you know, existing rates.
    Mr. Matkovsky. Well, let me tell you this, you know, as I 
understand it, that network under the PC3 program is getting 
built out even in rural Maine. I just need to address that 
first of all, not to get into any specifics. But we have 
individual authorization authority as well.
    And in another GAO study which reviewed our overarching 
program, one of the things that they advised us to do is to 
look at the beneficiary travel reimbursement rates and use that 
as a determining factor as well. I think it is good input. We 
are working on our procedure guidelines to do that. We spend 
about just shy of $800 million dollars in travel reimbursement 
a year.
    Now, granted, veterans are owed that. It helps with the 
travel burden, but if a veteran would receive that care closer 
to home, we would prefer that. It would obviate the need for 
travel which can be dangerous which is inconvenient, right? 
Then we should factor that in and use individual authorizations 
or other means to make sure that that care can be closer to 
Caribou.
    Mr. Michaud. Yeah, I appreciate that because I can't see it 
in my notes, but it is my understanding that they were able to 
save travel rates, about $600,000.
    Mr. Matkovsky. Yes, they did.
    Mr. Michaud. I thought that is what they said the savings 
would be.
    So thank you very much, Mr. Chairman.
    Mr. Bilirakis. Thank you.
    I will recognize Ms. Brown for five minutes.
    Ms. Brown. Thank you, Mr. Chairman.
    Florida has close to 1.6 million veterans, so whatever 
system that you are beginning to develop, I would think that 
Florida would be foremost on the planning when so many of the 
veterans, even though we have close to two million, so many of 
the veterans from the northeast come to Florida particularly 
during the wintertime, and, of course, Secretary Brown was the 
person that helped us get reimbursements because at one point 
they were using the system and we weren't getting the 
reimbursement for the system.
    We have had problems with the system and as we go into this 
afternoon there is a bill on the floor, House, Senate, then we 
are going to go to conference. I want to make sure that we 
develop a program that will keep the quality of care, which is 
some of the best in the world, but also this timeliness serving 
the veterans.
    And what is some of your recommendations regardless of--you 
know, I think the Senate bill might be a little bit better than 
the House, I can't believe that, but I do--but what are some of 
your recommendations to make sure that--you know, I have been 
accused of being a VA person, I am a veterans person.
    Mr. Matkovsky. First and foremost, we have heard some of 
the comments and Mr. Williamson has alluded it as well, we have 
to make sure that we do coordination of care, that we monitor 
that. I have heard some of the comments earlier, I think, from 
some of the committee members about making sure we have eyes on 
the referral timeliness, that we can monitor that. So one of 
the things that I would say we need to make sure that when we 
do Non-VA Care Coordination we staff it with adequate clinical 
resources, as well as administrative resources so we can 
monitor that care, ensure that it is quality care. We have a 
responsibility to that.
    In the VA when we refer to the community, we are not 
absolved of the responsibility for that care. It is still VA 
care, and even though we may call it non-VA care, it is still 
our care that we are delivering to veterans. So I think that is 
one thing to be mindful of is what oversight responsibility 
must we have to make sure that that is done right.
    Ms. Brown. Absolutely. In fact, in the hearing the other 
night, someone came and talked about a death in the system and 
that person was outsourced to someone and the VA--that person 
didn't have the follow up, so it is very clear that when VA 
works with other stakeholders, that you have to have that 
relationship and that follow up.
    Mr. Matkovsky. The only other thing that I would mention, 
as Mr. Williamson alludes for processing of claims, a lot of 
our claims processing today remains kind of manual. It is 
getting a little bit more automated with older systems.
    Ms. Brown. And I know that, and I know that the Chair 
recognized that because we used to do most of that process out 
of his area in Florida.
    St. Petersburg, isn't that your area?
    Mr. Bilirakis. Right.
    Ms. Brown. Yes, sir.
    But go ahead.
    Mr. Matkovsky. The other thing that I would mention is you 
consider--and this is just a personal opinion realizing that I 
am just trying to give some personal input, opining, if I may--
that some of the legislation that is being thought about may 
really alter the structure of the consumption of health 
benefits in the general marketplace and we have to understand 
what that might mean to the administrative and other systems 
within the VA.
    What do I mean by that? If we look at the structure that 
seems to be used for the geographic distance and other, it sort 
of models TRICARE. It may also model Medicare. But based on 
reimbursement rates, based on out-of-pocket co-pays more folks 
may use this other payment system instead, right?
    Ms. Brown. Uh-huh.
    Mr. Matkovsky. We just have to make sure that we also 
consider the administrative ramp-up and other factors 
associated that, as well, that this may be really a game 
changer in a way that we don't yet understand.
    Ms. Brown. And I think it is very important that we keep a 
handle on that.
    Mr. Williamson, would you like to respond to that?
    Mr. Williamson. I couldn't agree more with Mr. Matkovsky, 
especially, regarding his comment about oversight. I think that 
oversight and having sound data to base that oversight on is 
extremely important, so I would agree with his comments, and I 
think he recognizes that.
    Ms. Brown. All right. Well, we will work together, and I 
yield back the balance of my time.
    Mr. Bilirakis. Thank you so much. Appreciate it.

             PREPARED STATEMENT OF PHILIP MATKOVSKY

    Good morning, Chairman Miller, Ranking Member Michaud, and 
Members of the Committee. Thank you for the opportunity to 
discuss the Department of Veterans Affairs' (VA) non-VA care 
programs.
    As former Secretary Shinseki and Acting Secretary Gibson 
have stated, we now know that within some of our Veterans 
Health Administration (VHA) facilities, VA has learned of some 
systemic issues that are unacceptable and demonstrate a lack of 
integrity. That breach of trust--which involved the tracking of 
patient wait times for appointments--is irresponsible, 
indefensible, and unacceptable to the Department. Let me 
apologize to our Veterans, their families and loved ones, 
Members of Congress, Veterans Service Organizations, and to the 
American people. You all deserve better from us.
    VA provides care to Veterans directly in a VHA facility or 
indirectly through contracts, including contracts formed when 
providers accept individual authorizations, or through 
reimbursements, such as for emergency care. This mix of in-
house and external care provides Veterans the full continuum of 
health care services covered under our medical benefits 
package. VA's non-VA Care programs are designed to ensure high-
quality care is provided to Veterans under its non-VA care 
authorities. The programs are also designed to ensure Veterans 
receive effective and efficient non-VA care seamlessly.
    It is VHA policy to provide eligible Veterans necessary 
care within the VA system when feasible and authorized by law. 
When VA cannot provide the necessary hospital care and medical 
services at a VA medical facility, it is authorized to provide 
that care through non-VA providers through non-VA care programs 
in accordance with 38 United States Code (U.S.C.) 1703, 1725, 
1728, 8111, and 8153.
    On May 23, 2014, VHA established the Accelerating Care 
Initiative, a coordinated, system-wide initiative to accelerate 
care to Veterans. This initiative increases timely access to 
care for Veteran patients; decreases the number of Veteran 
patients on the Electronic Work List (EWL); decreases the 
number of Veterans waiting greater than 30 days for their care; 
and, standardizes process and tools for ongoing monitoring of 
access management at VA facilities. This initiative includes 
activities such as ensuring Primary Care clinic panels are 
correctly sized and achieving the desired level of 
productivity; extending or flexing clinic hours on nights and 
weekends; and, assessing the availability of community 
providers to meet care needs. The initiative strengthens access 
to care in the VA system while ensuring flexibility to use 
private sector care when needed. Where VA cannot quickly 
increase capacity, VA is increasing the use of care in the 
community through non-VA care.
    VA is focusing on two major initiatives to improve the 
oversight, management, and delivery of non-VA care: Patient-
Centered Community Care (PC3) and the Non-VA Care Coordination 
(NVCC) program. PC3 is a VHA nationwide program of health care 
contracts to provide eligible Veterans access to specialty 
care. Under PC3, VHA contracts with Health Net and TriWest 
which have developed networks of providers who deliver the 
covered care, including specialty care, mental health care, 
limited emergency care and limited newborn care. The goal is to 
ensure Veterans receive care from qualified community providers 
that is timely, accessible, and courteous, that honors 
Veterans' preferences, enhances medical documentation sharing, 
and that is coordinated with VA providers when VA services are 
not available or feasible.
    NVCC is VA's internal program to improve and standardize 
our processes for referrals to non-VA care. The NVCC model 
centers on effective referral management and consistency in 
documenting, tracking, and coordinating patients in community 
health facilities. Through NVCC, non-VA care program staff use 
standardized processes and templates for the administrative 
functions associated with non-VA care, including when a Veteran 
is admitted to a non-VA health care facility for emergency 
treatment.
    VA utilizes additional authorities in furnishing hospital 
care and medical services to Veterans. When a Veteran 
experiences an emergency situation, VA recommends that a 
Veteran seek care at the nearest emergency department. VA is 
authorized to pay or reimburse for non-VA emergency treatment 
furnished Veterans in accordance with 38 U.S.C. 1728 and 1725. 
In general, 38 U.S.C. 1725 requires VA to provide reimbursement 
for non-VA emergency treatment of certain Veterans with non-
service-connected conditions. Veterans must meet all conditions 
of this statute to be eligible for payment/reimbursement to 
include that the Veteran be an ``active Department health-care 
participant'' who is personally liable for the emergency 
treatment furnished. A Veteran is an active Department health-
care participant if he or she is enrolled in the VA health care 
system and has received health care services under the 
authority of 38 U.S.C. Chapter 17 within the previous 24 
months. In general, 38 U.S.C. 1728 requires VA to reimburse for 
emergency treatment related to a Veteran's service connected 
conditions.
    Also, VA is completing Project ARCH (Access Received Closer 
to Home), which is a 3-year pilot program to evaluate how to 
improve access to quality health care for rural and highly 
rural Veterans by providing these services closer to where they 
live through contractual agreements with non-VA medical 
providers. Project ARCH authority, section 403 of P.L. 110-387; 
38 USC 1703 note, expires on August 29, 2014. The PC3 contracts 
provide coverage for Veterans in rural and highly rural areas 
for inpatient and outpatient medical and surgical specialty 
care, therefore Veterans requiring those services should not be 
impacted by the expiration of the ARCH contracts. In 
preparation for the expiration of the Project ARCH authority, 
individual transition plans for each Veteran participating in 
Project ARCH are being created. In addition, VHA is leading an 
integrated project team to review alternatives for providing 
primary care for rural Veterans.
    Conclusion
    VA delivers high quality health care to Veterans in an 
environment that understands and honors their military service. 
A continuum of health care services is covered under our 
medical benefits package. VA's policy is to provide timely care 
to Veterans within its system where feasible, but we recognize 
we cannot provide the necessary care to every Veteran in our 
facilities. We are enhancing our use of non-VA care to ensure 
we provide Veterans with quality healthcare when, where, and 
how they want it. Mr. Chairman and Mr. Ranking Member, I 
appreciate the opportunity to appear before you today. I am 
prepared to answer your questions.
    Ms. Kuster, you are recognized for five minutes, please. 
Thank you.
    Ms. Kuster. Thank you very much, Mr. Chairman.
    Thank you, both of you, for being here with us today. I 
have a question for Mr. Matkovsky. In light of these audit 
findings and the reports that we have been receiving from OIG 
and GAO, why did the veterans medical centers not use the 
authority that they had to use non-VA care to send veterans out 
to the private sector and was it that the VA did not want to 
spend the money to get the veterans off the electronic wait 
list? I don't think I yet understand what was the hold up. If 
this was an option, why wasn't it used more often and why were 
people languishing on wait lists?
    Mr. Matkovsky. Sure. This is sort of a very complicated 
question, so if you don't mind, I will try to break it down and 
answer it. I think a couple of things, first of all, there is a 
historical context, right? So some years back we were receiving 
a good deal of criticism for our use of non-VA care, so 
historically we have been criticized and so, maybe 
inappropriately, we overcorrected to use that less. I think 
that is part of it; it is not all of it.
    I think the other thing, as we are going to get better 
wait-time data, as we improve the integrity of that reporting, 
we are going to have a better sense of where veterans are 
waiting for care. We started reporting another set of numbers 
last week which was this prospective wait measure, right, which 
showed us veterans who were scheduled and who were scheduled 
out longer. Historically, we have not looked at that either.
    So if we add those two factors, improve the integrity of 
our data so that we can have a sense of where veterans are 
waiting, and then look out, if you will, into the upcoming 
months where veterans are waiting, we can use that to help us 
determine where should we offer care to veterans. That is what 
we did with accelerating care. We took those numbers and said 
this is your situation. These are your veterans that are 
waiting too long. You have VA resources. If you can get more 
out of them, great, do that. If you cannot, you have the 
authority in non-VA care, go, tell us how much you need, right?
    We have not done that before. We have not really married up 
waiting time information with our use of non-VA. Going forward, 
we are going to.
    Ms. Kuster. Well, I think that was my biggest concern and 
maybe Mr. Williamson, you can comment on your report, but it 
appeared to me that you didn't have effective data and you 
weren't able to use it in a timely or even rational way to 
determine whether or not it would be more cost effective for 
taxpayers and frankly, more beneficial to veterans, if you 
either added history resources, medical providers to the VA 
system or went to the private sector.
    And even when veterans were sent to the private sector, 
there has not been this cost-benefit analysis. How are we, as 
Members of Congress, to determine how best to employ--deploy 
the resources? We don't even know at this point. Should we be 
hiring more doctors and nurses and healthcare providers or 
should we be sending people out to the private sector? We don't 
have a logical way to make those decisions.
    We are talking about significant dollars here and we are 
talking about a fundamental promise that we have made to our 
veterans. We want to get this right.
    Mr. Williamson. I think the first priority is to get the 
wait time scheduling problem resolved and once that is done, 
there will be a more accurate idea of just how many people need 
to seek care from non-VA care providers. And I think to do 
that, a number of fixes have to be made. Then, there needs to 
be oversight, especially the first line of supervisory level to 
make sure that new procedures are being carried out the way 
they are supposed to be.
    Ms. Kuster. So you mentioned about getting to the crux of 
the scheduling because obviously it is a pretty inefficient 
system that we have learned about, 50 percent no-shows. Are you 
familiar with the DoD process that they have? A patient-
centered infrastructure where the patients, themselves, can go 
online. It is a web-based system. They can schedule an 
appointment. They can refill a medication.
    Are you familiar with that, and would you recommend that 
type of process to the VA and do you think it would impact this 
scheduling fiasco that we are worried about right now?
    Mr. Williamson. I am not. I heard you mention that earlier 
and I thought it was very intriguing. We have not done any work 
on the DoD side in this regard.
    Ms. Kuster. Yeah. I would just say to Mr. Matkovsky I would 
highly recommend this approach. I just learned about it myself 
today, but it seems as though it would be particularly with the 
recent vets who are used to using this system in the DoD, that 
you could just cut right to the crux of the matter in terms of 
not only scheduling the appointments in a timely way, in an 
effective way that they would be likely to show up, but that 
they could change appointments, that you could get them the 
notices of the appointment coming.
    So my time is expired, I apologize Mr. Chairman, but thank 
you very much.
    Mr. Bilirakis. Thank you, Ms. Kuster.
    Mr. O'Rourke, you are recognized for five minutes.
    Mr. *O'Rourke.* Thank you, Mr. Chair.
    First, Mr. Williamson, thank you for your report and 
presenting your findings, one of which was that the VA does not 
currently track wait times for care that is delivered in the 
community, if I understood your comments correctly?
    Mr. Williamson. Correct.
    Mr. *O'Rourke.* And so would you say that it is fair to 
conclude that we still don't know what wait times are for 
veterans, because while there is a distinction between care 
delivered by the VA and care delivered in the outside 
community, there is not enough difference in that distinction 
to ultimately matter. You just want to know how long it took to 
see the person that you needed to see.
    Mr. Williamson. Right. Up to this point, it is true that 
wait times have not been tracked, but I think there are going 
to be some changes under PC3 and under a system called NVCC, 
which Mr. Matkovsky references in his statement. The difficulty 
there is that NVCC, which is a care coordination set of 
protocols to help the veteran go from the VA system to schedule 
an appointment with a non-VA provider, is that the wait time 
portion of NVCC is not yet automated. It is done manually, and 
the data feeding into it is also self-reported by the provider.
    So VA will be able to track a veteran to the point where 
the veteran gets scheduled for an appointment, but if that 
appointment is rescheduled, VA's NVCC will relie on the 
provider to tell them. I don't think VA has good visibility 
over when an appointment actually occurs.
    Mr. *O'Rourke.* I think that is an incredibly important 
finding and recommendation that you made because, you know, 
until we have the facts and the best information, we are not 
going to be able to make the best authorizing and appropriating 
and oversight decisions as a committee and the VA won't be able 
to do its best in its job.
    And to use El Paso as an example, as I have done in 
previous hearings, as recently as a month ago we were told 
there were zero days wait time for new patient mental health 
care appointments who were told last week on Monday from the 
VHA's audit that it was actually 60 days. But if there were 
people who were referred out into the community and that is not 
being tracked, we may still not have a correct--I think I want 
to trust that the VHA is giving us the best information post-
audit that they can, but it is still not all the information. 
So I think that is still something for us to continue to follow 
up on.
    And for Mr. Matkovsky, I want to ask some--follow up on 
some questions relating to how the VHA makes decisions about 
referring out to community care. We saw that there was a very 
good intention from VA to see people within 14 days, so see 
veterans within 14 days, and that that very good intention was 
then turned in to a goal and then a performance measure and 
then something that was part of the criteria for which VHA 
administrators were bonused.
    Is something like that happening when it comes to referring 
veterans out to community care? Is the local VHA director 
bonused in part by how much money he is able to save by not 
referring people out into community care?
    Mr. Matkovsky. I don't believe so, sir. You know, I haven't 
reviewed every single performance contract. I have to be clear. 
One of the things that we need to focus on, I think, is the 
undermined is a veteran--experienced, right? If we have better 
data about wait times, we can make better decisions about where 
care should be delivered and how.
    The other thing that we owe, quite frankly, is to make sure 
that we have productive, high-performing clinical resources in 
our facilities. Scheduling is the mechanism to access those and 
a way to manage efficiently, the delivery of that care. So as 
our scheduling data are better, as we look forward in our 
scheduling calendar, we can find individual veterans who we 
think are waiting too long and then use that as a basis to 
refer, at their choice.
    Mr. *O'Rourke.* Yeah.
    Mr. Matkovsky. Now, the other thing we need to do, just 
very quickly, we also need to make sure that we are monitoring 
that care and as quickly as we can, get some automation 
solutions to know that you are seen timely in the community.
    Mr. *O'Rourke.* Will you commit to getting back to me and 
the committee in just answering that question conclusively 
about whether or not that is part of the criteria used to 
bonus?
    Mr. Matkovsky. Yes.
    Mr. *O'Rourke.* I think it is important, given what we now 
know about how people are bonused and how that leads to some 
unintended consequences.
    Mr. Matkovsky. I will do that definitively.
    Mr. *O'Rourke.* You mentioned $300 million dollars in 
additional non-VA care resources, where did that money come 
from?
    Mr. Matkovsky. It came from a variety of sources, but the 
vast majority of it, from what we call carryover to offset some 
of the fiscal year 2015 requirement.
    Mr. *O'Rourke.* And at a press release last week, acting VA 
secretary announces $7.4 million dollars to Fayetteville, North 
Carolina for additional care.
    Mr. Matkovsky. Yes, sir.
    Mr. *O'Rourke.* Does that come out of the $300 million 
dollars?
    Mr. Matkovsky. Yes, sir.
    Mr. *O'Rourke.* And the $1.9 million dollars that came out 
or that is being directed to El Paso, I am told by Dr. Jesse 
that comes out of the $300 million dollars?
    Mr. Matkovsky. That is correct, sir.
    Mr. *O'Rourke.* How do you all decide that Fayetteville 
gets 7.4, El Paso, 1.9, some other community, another amount? 
When I look at the metrics from the VHA audit, I see that El 
Paso performs at the worst of all VHAs in the entire country 
for some categories like existing patient access to mental 
health, second to worst for specialty care, fourth to worst for 
specialty care, fourth to worst for new patient, and 
Fayetteville was nowhere near those. So what was the criteria 
that was used?
    Mr. Matkovsky. Fair question. Part of it, just to be candid 
was just working with the local facility. Now, if I can offer 
you just some comparable examples.
    El Paso, unlike Fayetteville, has roughly a third of its 
health care budget in non-VA care. That is largely because it 
offers really no inpatient services, right? So already a large 
share of its care is delivered through non-VA resources. So as 
a proportionate level, it is considerably higher using non-VA 
than is Fayetteville, proportionately.
    And then I think if you looked at their already existing 
spend pattern, they identified an additional 1.4, so I don't 
know the proportional difference between Fayetteville's overall 
budget and El Paso, but some of that went into it.
    Mr. *O'Rourke.* And I will return to the Chair, but before 
that I just wanted to ask, would you provide the Committee--
because I am not the only member who is interested in this, we 
all want to make sure that the veterans that we serve are 
getting the care that they need--would you provide to the 
Committee a written response to the question how does the VA--
what criteria does the VA use to determine which local VHAs are 
going to get these additional resources?
    Mr. Matkovsky. I will produce it in writing, yes.
    Mr. *O'Rourke.* Thank you.
    Mr. Bilirakis. Thank you. They just called votes.
    I have one additional question and I am going to allow my 
ranking member to ask one question and then we will go ahead 
and adjourn.
    But the question for VA, the non-VA care program is 
overseen by the chief business office, yet CBO does not 
exercise direct line authority over non-VA care operations; 
that is my understanding. Who is responsible for accountability 
within the non-VA care program?
    Mr. Matkovsky. Well, I think there are two sets of 
responsibilities. The program has responsibility for policy, 
for establishing training, making sure that training is 
distributed and performing oversight functions. We are 
responsible in the program office for that.
    For claims payment, accuracy of those claims being paid, 
timely paid, coordinated care, and making sure that care gets 
delivered to veterans is through medical centers. I feel I have 
a direct personal accountability to this. I have been involved 
with this program now since 2012, focusing on the accuracy of 
the payment. It is something that we haven't seen a lot of, 
but, you know, beginning in 2012 until today we have seen an 
over 25 percent improvement in the payment accuracy. That was 
led by the CBO, but it was also led by the field. So it is a 
shared accountability, but none of us are shirking from it.
    Mr. Bilirakis. How many FTEs, total FTEs currently support 
the non-VA purchase care?
    Mr. Matkovsky. It is roughly one thousand, but there are--
that is one thousand out of the CBO and then the facilities 
have other resources as well, sir.
    One thing that I would point out about the program, the VA 
runs almost a fee-for-service insurance program called CHAMPVA 
which is a little bit over a billion dollars where we provide 
for beneficiaries for veterans, basically a fee-for-service 
that mimics, quite frankly, TRICARE for them. So that is also 
wrapped in there, and we pay those claims directly out of our 
chief business office. We run the call center for that, et 
cetera.
    Mr. Bilirakis. Thank you.
    I will recognize Ms. Brown for one question.
    Ms. Brown. Thank you.
    Mr. Williamson, my question is when a veteran gets 
emergency service, who is responsible for the reimbursement, is 
it the veteran or the facility?
    Mr. Williamson. The way it works is that the veteran gets 
the emergency care and the provider of that care, let's say it 
is a hospital, sends a bill to VA. The VA claims processing 
staff at the applicable VA medical facility process the claim 
and pay the provider. The veteran doesn't get involved with 
paying the provider unless VA denies the claims.
    Ms. Brown. Mr. Matkovsky, my last question: As we move 
forward with the VA and the VA bill in the conference, I am 
still interested in making sure that, you know, some people 
would push us further than I would ever go to privatize the 
system. I want to make sure that we have quality in the system 
and we make sure that the veterans get the care that they need.
    But wait time is an issue, so what is it that we can do 
with our stakeholders and partners to make sure that we keep 
the VA system intact because I am very interested in it. 
Someone mentioned DoD; DoD have their own problems and I 
understand that. The regular hospitals, you know, have their--
they have problems. So there is no system that is perfect and I 
understand that.
    And if I don't go to a certain appointment I am fined, you 
know, so how many of the veterans that we are talking about 
that didn't show up, they said well they need to call or they 
could have had an emergency--so it is all of us working 
together. So what would you close--what word could you give me?
    Mr. Matkovsky. I would say to you, Congresswoman, that 
working together with this Committee, I think that we will work 
together in a much more transparent way to make VA a better 
system. We will use non-VA care where it is required based on 
when a veteran needs care, when, where and how, but one thing 
that we need to be clear about, I think the VA, it completes 
America's promise, right? And if we do this right, if we work 
together, oversee this correctly, the Committee, the Agency, we 
can work for veterans. We can make this a transparent excellent 
organization. We have 300,000 dedicate staff out there who will 
make this work.
    I think if we open this, we deal openly with where we have 
challenges, balance the communication. Yes, we have some 
problems. Yes, we do some things great. Always the pair, hand 
in hand, we can help complete the promise. I just urge us to 
keep that in mind.
    Ms. Brown. Thank you so very much and thank both of you for 
your service.
    Mr. Bilirakis. Thank you so much. Thank you for your 
testimony.
    And if there are no further questions, you are excused--oh, 
there is a question.
    Mr. *O'Rourke.* May I, Mr. Chairman?
    Mr. Bilirakis. Sure. You are recognized, Mr. O'Rourke.
    Mr. *O'Rourke.* All right. It will be a quick question.
    Mr. Bilirakis. Quickly.
    Mr. *O'Rourke.* You mentioned 64,000 who have not been able 
to get an appointment at all, we found in El Paso 36 percent of 
veterans seeking to make a mental health appointment were 
unable to obtain one at all. I hear anecdotally from veterans 
they call the VA, the VA says we can't schedule you right now, 
call back in a year.
    So you can find the people who are in the system who tried 
to make an appointment and never received one, how are you 
going to reach those veterans who attempted to make an 
appointment and were never in the system at all? Will you 
publicize a 1-800 number? Can we have it and advertise it? How 
do we reach these folks who haven't been able to get an 
appointment?
    Mr. Matkovsky. Any veteran who is trying to get ahold of 
our system today, 1-877-222-VETS; that is our contact center in 
the Topeka, Kansas and Waco, Texas. I urge them to call us. We 
will find it. We will figure out where you are and we will get 
you your appointment.
    Mr. *O'Rourke.* Great. Thank you.
    Mr. Bilirakis. Thank you.
    Okay. You are excused. I ask unanimous consent that all 
Members have five legislative days to revise and extend their 
remarks and include extraneous material.
    Without objection, so ordered.
    I would like to once again thank the witnesses and the 
audience, of course for joining us here this morning--it is 
afternoon now--and this hearing is now adjourned.
    [Whereupon, at 1:10 p.m. the committee was adjourned.]
                                APPENDIX

                       STATEMENTS FOR THE RECORD

Statement Of Raymond C. Kelley, Director
National Legislative Service Veterans Of Foreign Wars Of The United 
States
For The Record
Committee On Veterans' Affairs United States House Of Representatives
With Respect To Non-VA Care: An Integrated Solution for Veteran Access
June 18, 2014
    MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE:
    On behalf of the men and women of the Veterans of Foreign Wars of 
the United States (VFW) and our Auxiliaries, I would like to thank you 
for the opportunity to submit for the record regarding non-VA health 
care.
    The recent events at the Phoenix VA Medical Center and the 
subsequent national audit of all VA facilities have shed light on the 
fact that many facilities lack the capacity to meet demand for care. 
This means that access is insufficient, leading to a diminished level 
of care, which in some cases could be life threatening for veterans in 
need of essential services and procedures. The VFW finds this 
absolutely unacceptable and appreciates the urgency with which Congress 
is acting to address this problem.
    VA must use all available tools to provide timely access to care, 
including non-VA care when necessary. Ideally, VA would have the 
capacity to provide timely, quality direct care to all those who need 
it. We know, however, that they currently do not. Although the VFW 
supports expanding VA infrastructure and hiring enough health care 
professionals to meet demand at Department facilities, we recognize 
that these improvements will not happen overnight. Veterans cannot be 
allowed to suffer in the meantime, and non-VA care must be used as a 
bridge between full access to direct care and where we are now.
    It is vitally important that VA remains the guarantor of care, 
wherever that care is provided. This means that VA facilities must 
refer veterans to community providers using a system that requires full 
coordination and guarantees access and quality. Under the old fee basis 
system, VA would issue veterans in need of non-VA care authorization 
letters. It would then be up to the veteran to shop this letter around, 
searching for a community provider who was willing to accept the 
authorization and could schedule an appointment in a timely manner. 
Following the appointment, the veteran would be responsible for 
returning any records to VA, in order to have them included in the 
veteran's VA medical record. This system was entirely uncoordinated, 
failed to guarantee access or quality, and was highly susceptible to 
improper billing.
    The dangers of uncoordinated care are well documented. An April 
2013 OIG report revealed the mismanagement of non-VA care at the 
Atlanta VAMC in which approximately 4,000 veterans were referred to 
non-VA mental health providers without an adequate tracking system. OIG 
found that this led to an average wait time of 92 days, with 21 percent 
of veterans receiving no care at all, and never receiving any follow up 
from the VAMC. Even VA staff admitted to OIG that, due to the large 
number of referrals, many veterans had ``fallen through the cracks.'' 
The lesson from Atlanta is clear: VA must not be allowed to push large 
numbers of veterans to outside providers without proper coordination 
simply to create the appearance that access is being provided.
    In order to address the problems of non-VA care, VA developed a new 
contract care model, Patient-Centered Community Care (PC3). Under this 
program, networks of specialty care providers were created across the 
country to provide care at pre-negotiated rates in a well-coordinated 
manner. According to VA, veterans will be referred to PC3 providers if 
direct care cannot be readily provided due to lack of available 
specialists, long wait times, or geographic inaccessibility.
    In theory, this program should help solve the access problems that 
have been plaguing many VA facilities. The program cannot succeed, 
however, if individual facilities are not open and honest about access 
to care issues and appointment wait time data continue to be 
unreliable. We believe that VA must develop and implement wait time 
standards that would trigger PC3 referrals, and enforce those standards 
at each facility. Rather than an arbitrary number of days, these wait 
time standards should be developed based on the type of care being 
provided and the immediacy of the individual veteran's need for that 
care, based on a physician's medical opinion.
    Although the VFW supports PC3, we will be watching its progress 
closely, and ask Congress to conduct robust oversight to ensure it is 
being utilized to its full potential. Specifically, we will want to 
know which facilities are using PC3 properly to reduce actual wait 
times, and which are not. If it appears that certain facilities are not 
making proper referrals due to improper training, lack of standards, or 
institutional resistance, VA must move swiftly to correct those 
problems. If PC3 is not being used effectively due to insufficient 
funding at the local level, we will call on VA and Congress to work 
together to get them the resources they need.
    The PC3 program is new, and we recognize that the capacity of its 
networks may not immediately be sufficient to provide timely access for 
all specialties. In addition, PC3 is not currently set up to provide 
primary care. Consequently, it may be necessary for some facilities to 
enter into local contracts for specific services. Under no 
circumstances should veterans be expected to coordinate their own care 
or be held responsible for record sharing when receiving care outside 
of VA. The VFW believes that all contracts should include provisions 
that ensure the same level of coordination, access, and quality as the 
PC3 contracts. Anything less would not only fail to address the access 
problems many VA facilities are facing, but would also represent a huge 
step backwards in the evolution of non-VA care.
    Mr. Chairman, this concludes my testimony and if you or the 
Committee has any questions, I would be happy to respond to them for 
the record.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

 Letter From David J. McIntyre, Jr., CEO of TriWest Healthcare Alliance
    The Honorable Jeff Miller, Chairman, Committee on Veterans' Affairs
    U.S. House of Representatives , Washington, DC 20515
    The Honorable Michael Michaud
    Ranking Minority Member
    Committee on Veterans' Affairs
    U.S. House of Representatives
    Washington DC 20515
    Dear Chairman Miller and Ranking Member Michaud:
    I want to express my sincere appreciation for the opportunity to 
testify before your Committee on June 18, 2014. It was an honor to 
represent TriWest Healthcare Alliance before your distinguished panel.
    During the hearing, I was asked to answer ``yes'' or ``no'' in 
response to a question concerning whether VA pays Medicare rates to 
TriWest under the VA Patient-Centered Community Care (PC3) program. I 
answered ``yes.'' However, as the hearing progressed, it became clear 
that the question was whether we are provided reimbursement by VA at 
100% of the Medicare rate. We are not.
    As such, I want to clarify my answer by making it clear that 
TriWest is not reimbursed by VA at 100% of the Medicare rate for health 
care services. While it is true that the reimbursements under PC3 are 
Medicare-based, which is why I responded in the affirmative, in 
general, VA reimburses TriWest at a discount off of the Medicare rate. 
The discount varies by type of service and the PC3 region to which it 
applies. However, with the exception of Region 6 (Alaska), 
reimbursements for health care services are at rates below Medicare. As 
such TriWest is incentivized - and indeed at risk - to obtain care from 
network providers at a discount off of 100% Medicare reimbursement.
    I hope this provides some clarification to my answer as well as 
some additional information that will be helpful to the Committee. 
Should you deem it appropriate, I would appreciate it if this 
clarification could be made a part of the hearing record.
    Respectfully,
    David J. McIntyre, Jr., President and CEO
    Chairman Miller and Ranking Member Michaud
    June 19, 2014

                        QUESTIONS FOR THE RECORD

    The Honorable Sloan Gibson
    Acting Secretary
    U.S. Department of Veterans Affairs
    810 Vermont Avenue NW., Washington, DC 20420
    June 27, 2014
    Dear Mr. Secretary:
    Committee practice permits the hearing record to remain open to 
permit Members to submit additional questions to the witnesses. In 
reference to our Full Committee hearing entitled, ``Non-VA Care: An 
Integrated Solution for Veteran Access'' that took place on June 18, 
2014, I would appreciate it if you could answer the enclosed hearing 
questions by the close of business on August 8, 2014.
    In preparing your responses to these questions, please provide your 
answers consecutively and single-spaced and include the full text of 
the question you are addressing in bold font. To facilitate the 
printing of the hearing record, please e-mail your response in a Word 
document, to Carol Murray at [email protected] by the close 
of business on August 8, 2014. If you have any questions please contact 
her at 202-225-9756.
    Sincerely,
    MICHAEL H. MICHAUD
    Ranking Member
    MHM:cm

                Question by Mike Michaud, Ranking Member

    1. From my conversations with the veterans in Maine, Project ARCH 
has been quite successful. Unfortunately the VA appears to be moving to 
close down this popular program.
    a. It is my understanding VA has authority to provide an extension 
of the program beyond August. Does the VA believe existing authority 
allows for an extension of the program? If so, will VA exercise that 
authority and continue the program?
    b. In March this year, Under Secretary Petzel told me VA would 
ensure the continuation of services for those veterans participating in 
ARCH. You mentioned development of individual transition plans, please 
provide more detail on what these entail? What actions is VA taking to 
follow up on this promise?
    c. I understand the participating ARCH providers will receive lower 
reimbursement if they choose to enter the PC3 network. Is VA taking any 
action to facilitate the transition of ARCH providers into PC3?
    2. Please explain how the Non-VA Care Coordination program and PC3 
interact or complement each other in the coordination of care for a 
veteran receiving non-VA care.
    3. I understand that PC3 requires a seven-step process. Can you 
detail the steps in this process and discuss any efforts VA has made to 
streamline the process going forward?
    4. In looking at data from FY 2013, FY 2012, and FY 2011, please 
provide the amount of monies, by VISN, available for obligation but not 
expended at the end of each fiscal year. In addition, if any VISN or 
facility within a VISN has not expended funds at the end of these 
fiscal years, has that fact been a consideration in terms of any 
evaluation of VHA personnel in regards to performance awards or 
bonuses.
    5. What is the process for VA to timely pay non-VA providers? What 
are the current challenges to prompt payment?
    6. What do you believe are the top three challenges the Department 
faces to ensure effective and efficient standards and processes are in 
place so that veterans receive timely, quality, health care whether it 
is in a VA facility or non-VA care?
    Rep. O'Rourke
    1. Are VA Directors' bonuses based on staying under budget? Are 
there disincentives in place that keep them from sending veterans into 
the community for care?
    2. What criteria did VA consider when determining how to allocate 
the $300 million in carryover funds that went to specific medical 
centers?
    3. Precisely what data was measured in the document we were given 
on May 9th, versus the wait times measured and reported in the audit on 
June 9th? What consequences will there be for reporting false data?
             Questions Submitted by Ranking Member Michaud

    Question 1. From my conversations with the veterans in Maine, 
Project ARCH has been quite successful. Unfortunately the VA appears to 
be moving to close down this popular program.
    a. It is my understanding VA has authority to provide an extension 
of the program beyond August. Does the VA believe existing authority 
allows for an extension of the program? If so, will VA exercise that 
authority and continue the program?
    VA Response: Section 403 of Public Law 110-387 required that VA 
conduct a pilot program, called Project ARCH, under which the Secretary 
provides covered health services to covered Veterans through qualifying 
health care providers for a three-year period, pursuant to contracts 
with qualifying non-Department health care providers for the provision 
of such services.
    Section 104 of Public Law 113-146 requires VA to extend the pilot 
program to
    August 7, 2016. At this time, VA is determining how to quickly 
implement section 104 in order to continue to provide covered health 
services to eligible Veterans in the program.
    b. In March this year, Under Secretary Petzel told me VA would 
ensure the continuation of services for those veterans participating in 
ARCH. You mentioned development of individual transition plans, please 
provide more detail on what these entail? What actions is VA taking to 
follow up on this promise?
    VA Response: Section 104 of Public Law 113-146 requires VA to 
extend the pilot program to August 7, 2016. At this time, VA is 
determining how to quickly implement section 104 in order to continue 
to provide covered health services to eligible Veterans in the program.
    c. I understand the participating ARCH providers will receive lower 
reimbursement if they choose to enter the PC3 network. Is VA taking any 
action to facilitate the transition of ARCH providers into PC3?
    VA Response: The VA contractual relationship for PC3 is between VA 
and the two PC3 contractors, Health Net and TriWest. Each contractor is 
responsible for developing their own PC3 provider networks, and VA has 
no involvement in the development of prime to subcontractor 
relationships.
    Question 2. Please explain how the Non-VA Care Coordination program 
and PC3 interact or complement each other in the coordination of care 
for a veteran receiving non-VA care.
    VA Response: All non-VA medical care is to be authorized via the 
defined Non-VA Care Coordination (NVCC) process. PC3 is one type of 
purchasing that can be done as part of non-VA medical care. The PC3 
Authorization Process Guide (attached below) identifies the PC3 touch 
points with the NVCC Process Guides.
    Question 3. I understand that PC3 requires a seven-step process. 
Can you detail the steps in this process and discuss any efforts VA has 
made to streamline the process going forward?
    VA Response: Please see flow chart and corresponding narrative in 
the PC3 Authorization Process Guide attached above. We currently are 
establishing governance groups that will be gathering feedback from all 
elements of the PC3 process and looking for opportunities for 
improvements.
    Question 4. In looking at data from FY 2013, FY 2012, and FY 2011, 
please provide the amount of monies, by VISN, available for obligation 
but not expended at the end of each fiscal year. In addition, if any 
VISN or facility within a VISN has not expended funds at the end of 
these fiscal years, has that fact been a consideration in terms of any 
evaluation of VHA personnel in regards to performance awards or 
bonuses.
    VA Response: Please see spreadsheet below for monies not obligated 
at the end of each fiscal year. The attached spreadsheet displays by 
appropriation (Medical Services, Medical Support & compliance and 
Medical Facilities) the amount that Veterans Integrated Service 
Networks (VISNs) carried over from one fiscal year into the next fiscal 
year for FY 2011, FY 2012, and FY 2013. VA carryover amounts by account 
are never more than the carryover amount authorized by the Congress.
    A superior performance award is a one-time cash award that may be 
granted to an employee each year based on his/her rating of record 
provided that the rating of record is at the fully successful level (or 
equivalent) or above. VA's performance appraisal program for employees 
appointed under Title 5 of the United States Code is approved by the 
Office of Personnel Management (OPM). For employees appointed under 
Title 38 of the United States Code (e.g., doctors, nurses), VA has a 
proficiency rating system governed by VA Handbook 5013. Under statute 
and regulation, VA may use an employee's performance as a basis for 
pay, awards, development, retention, removal, and other personnel 
decisions. Cash awards, time off awards, suggestion awards and other 
honorary or non-monetary awards are also given to employees for other 
contributions, acts, service, or achievement that benefits the VA or 
the Federal government. They are not issued based on a performance 
rating but rather the overall value of the contribution. These would 
include on-the-spot awards.
    Question 5. What is the process for VA to timely pay non-VA 
providers? What are the current challenges to prompt payment?
    VA Response: VA's priority goal is to process a minimum of 90 
percent of claims within 30 days of receipt and maintain an aged 
inventory of 80 percent less than 30 days old. This data is reviewed on 
a weekly basis and action is taken as appropriate to resolve any issues 
that might be impacting claims processing. There have been a number of 
challenges in maintaining our goals to include an increase in the 
number of claims received, staffing shortages, and technology issues. 
In addition, claims are currently processed throughout VA in a 
decentralized model, which results in a great deal of variability. 
Steps have been taken to address these challenges while plans are 
underway to move to a centralized model, including improved technology 
to ensure continued sustainment. Ongoing success is driven by data 
analysis and trending to ensure we have early warning of potential 
problems. VA has established two remote claims processing teams that 
are able to provide claims processing assistance to decentralized 
locations that are experiencing difficulties.
    VA has seen a large improvement over the past several months in 
reaching our goals. Claims paid within 30 days have improved from 75 
percent in December 2013 to
    83 percent in June 2014. For inventory aged less than 30 days there 
has been an improvement from 63 percent in December 2013 to 79 percent 
as of July 14, 2014.
    Question 6. What do you believe are the top three challenges the 
Department faces to ensure effective and efficient standards and 
processes are in place so that veterans receive timely, quality, health 
care whether it is in a VA facility or non-VA care?
    VA Response: VA is committed to addressing our top three 
challenges:
    * First, our process initiatives--using available resources to get 
Veterans off wait lists and into clinics, while also fixing our 
scheduling system.
    * Second, but simultaneously, our changes of leadership--addressing 
VA's cultural issues, holding people accountable for willful misconduct 
or management negligence, and creating an environment of openness and 
transparency.
    * Third, the resource challenge--making a compelling case for the 
resources needed to consistently deliver timely, high-quality 
healthcare.

Questions Submitted by Congressman O'Rourke

    Question 1. Are VA Directors' bonuses based on staying under 
budget? Are there disincentives in place that keep them from sending 
veterans into the community for care?
    VA Response: VA medical center directors' performance awards are 
paid based on annual performance ratings. Ratings are based on each 
senior executive's performance agreement. Every medical center 
director's performance agreement includes a critical element of 
``business acumen,'' which is a government-wide standard set by OPM. A 
station's total yearly budget is comprised of General Purpose and 
Specific Purpose funds, augmented by alternative revenue from first- 
and third-party collections and sharing agreement partners. Once a 
facility's budgetary total is determined using the above process, it 
must also be appropriately be divided among the three Medical Care 
budget accounts. Within these limitations, facility leaders are 
expected to develop and execute a resource management plan that 
integrates budget, human resources, and capital expenditures, including 
the proper execution of specific purpose funds. The VA and VISN budget 
processes are dynamic, requiring frequent budgetary adjustments 
throughout the year as care needs change or other operational issues 
arise. Part of effective management is carrying out the facility 
mission within the allocated resources. However, if resources need to 
be augmented or realigned between appropriations or facilities, this is 
accomplished by using a 1.0-1.5 percent VISN reserve for contingencies.
    Senior Executives are expected to implement business processes in 
non-VA Care programs to ensure appropriate and timely non-VA care 
service provision as well as compliant claims processing. In addition, 
they are responsible for ensuring non-VA care payment accuracy through 
robust internal controls and independent compliance and business 
integrity reviews. VA has taken steps to ensure all VA health care 
leaders and managers clearly understand the following: (1) there are no 
financial disincentives to referring Veterans for non-VA health care; 
and (2) VA has robust funds to apply for such referrals. VA's goal is 
to always provide timely, quality, and appropriate health care whether 
it is provided directly within VA facilities or through
    non-VA care in the community.
    Question 2. What criteria did VA consider when determining how to 
allocate the
    $300 million in carryover funds that went to specific medical 
centers?
    VA Response: VA leadership took a deliberate approach to the 
analysis and ultimate allocation of funding resources to provide timely 
and accurate support to maintain Veteran care. VHA directed facility-
level reporting requirements that included current facility capacity 
constraints, productivity challenges, and resource needs. These reports 
were provided and subsequently analyzed. VHA then clarified and 
confirmed the resource needs derived in part from the facility analysis 
with VISN level financial representatives, to include Chief Financial 
Officers. This input ensured appropriate allocation of funding 
requests. Those requests were broken down into three categories: 
Medical Services - Personal; Medical Support and Compliance Services; 
Personnel and Medical Service - Non-VA Medical Care. Allocation of 
funds began on June 11, 2014, with VISN leadership allocating funds to 
their specific facilities based upon their individual funding needs.
    Question 3. Precisely what data was measured in the document we 
were given on May 9th, versus the wait times measured and reported in 
the audit on June 9th? What consequences will there be for reporting 
false data?
    VA Response: The May 9th report was a PowerPoint related to mental 
health only.
    It showed completed appointment wait time trending from March 2013 
to March 2014 for mental health. Below we provide clarification of the 
Accelerating Care Initiative Data Release of June 9, 2014.
    On June 9, 2014, in addition to posting information on the 
nationwide Access Audit, VA also released additional data from each 
facility regarding patient waiting times.
    The Pending Waiting Time Data (released on June 9) demonstrates the 
wait times for future appointments; Completed Waiting Time Data 
demonstrates the wait times for completed appointments - which is the 
data local facilities probably provided. The two datasets complement 
each other, and both datasets demonstrate that Veterans are waiting too 
long for the care they need. VA is taking action to accelerate care for 
the Veterans we serve and improve the way wait times are reported and 
monitored.
    The facility average waiting times for patients that VA distributed 
on June 9, 2014, predicts the availability of scheduled appointments in 
the future for Veterans on a given date. We call this the ``Pending 
Waiting Time Data.''
    This has the advantage of providing a big-picture view of 
appointment availability and the capacity of the system to address the 
needs of Veterans who have not yet been seen in our clinics.
    The waiting times datasets that local VA facilities have typically 
used in the past are ``Completed Waiting Time Data'' based upon when 
appointments actually occurred (completed) and take into account 
appointments moved up, cancelled, rebooked and missed.
    In the weeks following the audit, VA has concentrated its efforts 
on the Accelerating Care Initiative in order to get Veterans off wait 
lists. As of August 15, 2014, we have reached out to over 266,000 
Veterans to get them off wait lists and into clinics sooner. From May 
16, 2014, through August 24, 2014, we have made over 975,000 total 
referrals to non-VA care providers. We have also confirmed that 14-day 
access measures have been removed from all individual employee 
performance plans to eliminate any motive for inappropriate scheduling 
practices and behaviors. Regarding allegations of false reporting from 
VA employees, VA is already taking corrective action to address issues 
resulting from the audit. Appropriate personnel action will be taken on 
a case-by-case basis.
                   Questions to Currato From Michaud

COMMITTEE ON VETERANS' AFFAIRS
    U.S. HOUSE OF REPRESENTATIVES
    FULL COMMITTEE HEARING
    ``Non-VA Care: An Integrated Solution for Veteran Access.''
    JUNE 18, 2014
    334 CANNON HOUSE OFFICE BUILDING
Hon. Mike Michaud
    1. Regarding the Patient-Centered Community Care (PC3) program of 
the Department of Veterans Affairs:
    a. Have you experienced any difficulty in attracting providers?
    b. Have providers expressed any concerns regarding the VA's 
reimbursement rates or promptness of payment?
    c. Do you have any concerns regarding the open-ended structure of 
the contracts and the ability of providers to address surges in demand?
    d. In your experience so far, what difficulties do you face in 
building networks of providers in rural areas?
                   Responses From Currato to Michaud

    Hon. Michael H. Michaud, Ranking Member
    U.S. House of Representatives, Committee on Veterans' Affairs
    334 Cannon House Office Building
    Washington, DC 20515
    August 8, 2014
    Dear Ranking Member Michaud,
    Please find attached the answers to your additional questions 
submitted in reference to my testimony before the Full Committee 
hearing entitled ``Non-VA Care: An Integrated Solution for Veteran 
Access'' which occurred on June 18, 2014.
    Thank you for the opportunity to testify before the committee and 
to answer your additional questions. Health Net remains committed to 
helping increase acces to care for our nation's veterans through the 
Department of Veterans Affairs.
    Sincerely,
    Thomas Carrato
    President, Health Net Federal Services
    1. Regarding the Patient-Centered Community Care (PC3) program of 
the Department of Veterans Affairs:
    a) Have you experienced any difficulty in attracting providers?
    Currently, Health Net's PC3 network contains over 39,000 providers 
across our three PC3 regions. In developing our network, we have had 
community providers, including providers that participate in our other 
government programs (e.g., TRICARE), express reluctance to work 
directly with VA based on previous experiences and/or perceptions of 
working directly with VA. The four most commonly cited concerns have 
been: 1) low levels of reimbursement; 2) extensive medical 
documentation required in time frames shorter than the provider's 
office practice; 3) inaccurate, slow payment; and 4) the amount of care 
provided for which payment is denied by VA. Health Net has worked with 
providers to address many of these perceived issues and has achieved 
success building the PC3 network in our regions.
    Since Health Net is the prime PC3 contractor in Regions 1, 2 and 4, 
we serve as a liaison between community providers and VA; it is our 
responsibility to provide clarity to providers regarding the expected 
performance of services and to pay network providers promptly and 
accurately. Health Net clearly defines the services to be delivered and 
the medical documentation to be returned for network care provided to 
Veterans. Health Net is able to leverage existing relationships we have 
with community providers to navigate the complex VA system in which 
each VA Medical Center has unique processes and requirements. When a 
provider has a concern or question about what is expected by the VAMC's 
request, Health Net stands ready to obtain and provide clarifying 
guidance for the care to be given.
    1. Regarding the Patient-Centered Community Care (PC3) program of 
the Department of Veterans Affairs:
    (b): Have providers expressed any concerns regarding the VA's 
reimbursement rates or promptness of payment?
    As discussed above, many providers have expressed concern with low 
levels of reimbursement tied to Medicare, the amount of administrative 
effort required to meet VA requirements, and the length of time it 
takes for VA to pay claims. Health Net, as the payor of PC3 network 
claims, is committed to paying providers within 30 days. Part of our 
solution for PC3 is to simplify the administrative tasks required of 
network community providers, such as timely return of medical 
documentation to VA prior to VA reimbursing health care claims. Through 
these efforts, the Health Net network for PC3 continues to grow and 
expand in all areas.
    1. Regarding the Patient-Centered Community Care (PC3) program of 
the Department of Veterans Affairs:
    (c): Do you have any concerns regarding the open-ended structure of 
the contracts and the ability of providers to address surges in demand?
    The true value of PC3 is that it was designed to augment VA's 
capacity to provide timely access to care for veterans, not duplicate 
or replace it. As a long-standing TRICARE contractor, we have extensive 
experience with tailoring and enhancing our networks to augment the 
specific needs of our customer, and with the leadership and assistance 
of the VA PC3 Program Management Office (PMO), our focus has been on 
doing exactly that for VA also.
    Since contract implementation in January 2014, Health Net has been 
collaborating with the VA PC3 Program Management Office and the 
Veterans Integrated Service Networks (VISNs) and VAMCs within our 
regions to build an efficient and effective PC3 network to meet the 
needs of each VAMC. The clear commitment of the VA PC3 PMO and the 
engagement of VAMC leadership have been key to our ability to identify, 
and then recruit, the types of specialty providers in greatest demand, 
as well as to identify projected gaps in VAMC capacity that will 
require specific services to be available through the PC3 network.
    In some cases, however, the current situation within the Veterans 
Health Administration, including the Accelerated Access to Care 
Initiative, is placing a strain on network capacity in specific 
specialties and in certain areas, particularly underserved and rural 
communities. This is further complicated by the fact that PC3 is a new 
program and network community providers are still adjusting to the 
specific requirements of PC3 and establishing the level of PC3 
authorizations for which they are comfortable accepting. We view this 
as a short-term challenge and believe that, in the long term, the PC3 
community networks will effectively adjust to meet local VA needs.
    1. Regarding the Patient-Centered Community Care (PC3) program of 
the Department of Veterans Affairs:
    (d) In your experience so far, what difficulties do you face in 
building networks of providers in rural areas?
    PC3 utilizes the same healthcare resources available in the broader 
community, whether urban, rural, or highly rural. Rural access is a 
national concern. Provider shortages exist in certain geographical 
areas of the country, as well as national availability in certain 
specialties to serve the U.S. population overall.
    An important component to ensuring adequate coverage in rural and 
underserved areas is to minimize administrative requirements that go 
above and beyond the community standards in those areas. PC3 does 
contain requirements that exceed these community standards. To 
encourage providers in these more challenging areas to participate in 
PC3, we are working hard to simplify the administrative tasks 
associated with meeting the requirements of PC3.

                                 
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