[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]




                               BEFORE THE

                     U.S. HOUSE OF REPRESENTATIVES


                             FIRST SESSION


                      WEDNESDAY, NOVEMBER 18, 2015


                           Serial No. 114-45


       Printed for the use of the Committee on Veterans' Affairs

         Available via the World Wide Web: http://www.fdsys.gov
24-363                       WASHINGTON : 2017                      
For sale by the Superintendent of Documents, U.S. Government Publishing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center,
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free). 
E-mail, [email protected]  

                     JEFF MILLER, Florida, Chairman

DOUG LAMBORN, Colorado               CORRINE BROWN, Florida, Ranking 
GUS M. BILIRAKIS, Florida, Vice-         Minority Member
    Chairman                         MARK TAKANO, California
DAVID P. ROE, Tennessee              JULIA BROWNLEY, California
DAN BENISHEK, Michigan               DINA TITUS, Nevada
TIM HUELSKAMP, Kansas                RAUL RUIZ, California
MIKE COFFMAN, Colorado               ANN M. KUSTER, New Hampshire
BRAD R. WENSTRUP, Ohio               BETO O'ROURKE, Texas
JACKIE WALORSKI, Indiana             KATHLEEN RICE, New York
RALPH ABRAHAM, Louisiana             TIMOTHY J. WALZ, Minnesota
LEE ZELDIN, New York                 JERRY McNERNEY, California
RYAN COSTELLO, Pennsylvania
MIKE BOST, Illinois
                       Jon Towers, Staff Director
                Don Phillips, 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


                      Wednesday, November 18, 2015


Choice Consolidation: Assessing VA's Plan To Improve Care In The 
  Community......................................................     1

                           OPENING STATEMENTS

Jeff Miller, Chairman............................................     1
    Prepared Statement...........................................    38
Mark Takano, Acting Ranking Member...............................     2


Honorable Sloan Gibson, Deputy Secretary, U.S. Department of 
  Veterans Affairs...............................................     3
    Prepared Statement...........................................    39

        Accompanied by:

    Honorable David J. Shulkin M.D., Under Secretary For Health, 
        U.S. Department of Veterans Affairs

    Baligh Yehia M.D., Assistant Deputy Under Secretary For 
        Health For Community Care, Veterans Health 
        Administration, U.S. Department of Veterans Affairs

    Joe Dalpiaz, Network Director, Heart Of Texas Health Care 
        Network (Visn 17), Veterans Health Administration, U.S. 
        Department of Veterans Affairs



                      Wednesday, November 18, 2015

            Committee on Veterans' Affairs,
                    U. S. House of Representatives,
                                                   Washington, D.C.
    The Committee met, pursuant to notice, at 10:30 a.m., in 
Room 334, Cannon House Office Building, Hon. Jeff Miller 
[Chairman of the Committee] presiding.
    Present: Representatives Miller, Lamborn, Roe, Benishek, 
Huelskamp, Coffman, Wenstrup, Walorski, Abraham, Costello, 
Bost, Brown, Takano, Brownley, Titus, Ruiz, Kuster, O'Rourke, 
Walz, and McNerney.


    The Chairman. The Committee will come to order. And I 
appreciate everybody joining us for today's oversight hearing 
entitled ``Choice Consolidation: Assessing VA's Plan To Improve 
Care in the Community. In late July, we authorized the 
Department of Veterans Affairs to use a substantial portion of 
the Choice Program funds to cover a budget shortfall. And, in 
turn, VA was required to submit a plan to the Committee 
detailing how they were going to consolidate and improve the 
many fractured programs and authorities that the Department 
currently uses to refer veterans to non-VA providers.
    So we are here this morning so that VA can present this 
plan to the Committee, and together, we can measure its merits 
and challenges. Non-VA care, or care in the community, as VA 
now calls it, is an increasingly vital component of the health 
care system of the Department of Veterans' Affairs. Each month, 
veterans, survivors, and certain dependents of veterans receive 
approximately 1 million appointments, more than 21 percent of 
all of the appointments that VA provides from doctors and 
nurses and other health care professionals in community 
hospitals and clinics outside of the walls of the Department of 
Veterans Affairs. Allowing veterans to see these providers is 
vital to ensuring timely and convenient access to care.
    And I suspect that as the veteran population continues to 
grow in both age and in numbers, and as the health care 
landscape continues to shift, the need for non-VA providers to 
supplement--and note I said supplement, not supplant--the care 
that VA provides in-house will only continue to grow. I think 
the success of VA's Care in the Community Program is hampered 
by inconsistent and competing eligibility requirements, 
business processes, and reimbursement rates across the seven 
methods that they currently use to refer veterans to outside 
providers. And as a result, non-VA care, as we know it today, 
has become unmanageable and unsustainable.
    The success of the VA health care system over the next 
several years will depend, in large part, on VA's ability to 
consolidate these seven desperate methods to a single 
coordinated program that is easy for veterans and community 
providers to understand and buy into and easy for employees to 
administer and to manage. And certainly, this is no easy task. 
It is going to require us to have some difficult conversations 
about the purpose of the VA health care system and what it 
should and feasibly can achieve. It is also going to require us 
to examine VA's massive physical footprint, and make decisions 
about the future of the facilities that once served great 
purposes, but may no longer be benefiting the veterans as they 
should be.
    The plan that the Department submitted in late October to 
accomplish non-VA care consolidation and take the first steps 
towards building the VA health care system of tomorrow offers a 
promising, but really kind of a fuzzy definition or vision of 
the future. And so hopefully, we will be able to dialogue with 
the VA and bring things into a little more clearer perspective 
so that we can figure out where VA needs to go next.
    I am hopeful that the testimony and the responses to our 
questions that we will hear this morning will shed some much-
needed light on how VA intends to transform the collection of 
non-VA programs and authorities that we have today in the 
coordinated system of care that our veterans have earned. I am 
grateful to the Deputy Secretary, The Under Secretary for 
Health, and the two leaders of VA's consolidation efforts for 
being here this morning to present the Department's proposal. I 
now recognize the Acting Ranking Member this morning, Mr. 
Takano, for an opening statement.

    [The prepared statement of Chairman Miller appears in the 


    Mr. Takano. Thank you, Mr. Chairman, for calling this 
hearing today. Access to safe, quality health care is a 
priority for this Committee, and one that veterans who have 
served expect. We owe them no less. Today, we are going to hear 
from the VA about their plan to improve access to care. 
Congress mandated this plan in Public Law 114-41, the Surface 
Transportation and Veterans Health Care Choice Improvement Act 
of 2015. About 2 weeks ago, along with the other three corners, 
the Ranking Member received a strategic-level briefing from VA 
on this plan. After listening to what VA had to say, she is 
generally in agreement with how VA is moving forward. During 
this briefing, VA told her that without Congressional support, 
they could not accomplish all of the tasks set forth in the 
    Today, I am fully prepared to be in a listening mode. I do, 
however, have some concerns with the price tag that this plan 
comes with, and the ability of the VA to implement this plan 
throughout the agency.
    As we all know, VA does not have a great track record when 
it comes to implementation. The policies are in place, but VA 
has had difficulty in the past with compliance as many reports 
have revealed. VA has told us that the implementation of this 
plan will be a multi-year process, and will require an 
additional investment of money. I hope today, or in the very 
near future, we get to hear about the cost. Another concern is 
this plan seems to be relying, in part, on an IT structure that 
actually works. Congress has been very generous to the VA in 
the past, investing millions of dollars in IT solutions that 
don't seem to do what they are supposed to do. I do not want to 
see a repeat of these failures.
    Mr. Chairman, while I recognize that VA cannot do it all by 
themselves, especially in rural communities, I want to 
reemphasize that privatizing the VA is not an option. I do 
believe that VA, with this plan, is headed in the right 
direction for providing more and better access to our veterans. 
I believe that we as a Committee need to listen today, and if 
what we hear makes sense, then hold them to this course that 
they have set out to follow to ensure that the veterans of 
today and of the future are assured quality, safe health care, 
wherever they choose to live. Thank you, Mr. Chairman, again, 
for holding these hearings. And I yield back the balance of my 
    The Chairman. Thank you very much, Mr. Takano. Members, we 
are joined this morning by the Deputy Secretary, the Honorable 
Sloan Gibson. With him today is the Honorable Dr. David 
Shulkin, Under Secretary for Health; Dr. Baligh Yehia, who is 
the Assistant Deputy Under Secretary for Health and Community 
Care; and Mr. Joe Dalpiaz, VISN 17 network director. Thank you. 
It was great to visit with you guys the other morning when we 
had breakfast. Thank you very much for what you do. And Sloan, 
you are recognized for your opening statement.

                   STATEMENT OF SLOAN GIBSON

    Mr. Gibson. Thank you, Mr. Chairman. As you noted, David, I 
would further elaborate, has been with VA now for about 4 
months. He comes to us from a career in the private sector, 
managing large health care organization. Baligh has been with 
us for about 18 months, extensive years of clinical experience, 
and continues to see patients in the VA system. And Joe has 
been with VA for over 30 years, much of it as a medical center 
director. And he has spent the last number of months as a co-
lead working with Baligh on this report.
    Mr. Chairman, at the Committee's May 13 Choice Program 
hearing, I discussed our need to consolidate our community care 
programs. I was gratified to hear you say, and I quote, ``We 
must all prepare for the Choice Program of tomorrow, one that 
brings the universe of non-VA care together under one umbrella, 
so that the care of our veterans that they need to receive is 
more efficient and effective regardless of where it takes 
place,'' a statement that is echoed, again, in your opening 
remarks today.
    We are determined to seize this opportunity and make the 
most of it. And we are grateful to the Committee for responding 
so positively to our indicated need for consolidation. VA is 
already in the midst of an enterprise-wide transformation 
called MyVA, which will modernize VA's culture, processes, and 
capabilities. Our proposal to consolidate community care is 
definitely a part of that effort. Care in the community has 
been and will always be a vital component of health care for 
veterans, when they live too far from a VA facility, when they 
need care that is only available in the community, and when 
increasing demand for VA care exceeds existing capacity as we 
have seen in recent years.
    We are referring veterans to community care more than ever 
before. But as you noted in your opening statement, Mr. 
Chairman, we are saddled with a confusing array of programs, 
authorities, and mechanisms that greatly complicate the task of 
ensuring veterans getting the care that they need when and how 
they need it. Those include Project Arch, PC3, Choice, two 
different plans for emergency care, affiliates with other 
Federal agencies and academic partners, and then numerous 
individual authorities. Each of these has its own requirements, 
different eligibility rules, reimbursement rates, different 
methods of payment, and different funding routes.
    It is all too complicated for veterans, for providers in 
the communities, and for VA staff. Consolidation will improve 
access and make the process easier for veterans to use. 
Veterans will have better access to the best care outside VA. 
Providers will be encouraged to participate and provide higher 
quality care. And VA employees will be able to serve both 
better, while also being good stewards of taxpayer resources. 
Our report is based on input from veterans, the independent 
assessment, veteran service organizations, VA employees, 
Federal stakeholders, and best practices in the private sector. 
We also appreciate the many discussions that we have had with 
the Committee staff. The report focuses on five functional 
areas: Veteran eligibility, a single set of eligibility 
criteria based on distance from a VA provider, wait time for VA 
care, and availability of services at VA with expanded access 
to emergency and urgent care.
    Second, ease of access. Streamlined business rules to speed 
up and simplify the referral and authorization process.
    Third, high-performing networks. Partnering with Federal, 
academic, and community providers to offer a tiered provider 
network, which will enable VA to better manage supply and 
demand and monitor health care quality and utilization.
    Fourth, better coordination of care is a critical item, 
making health information easier to exchange and helping 
veterans make the best choices among community care providers. 
And, lastly, prompt provider payment. Improving billing claims 
and reimbursement processes to allow auto adjudication of most 
claims and faster, more accurate payments. These efforts won't 
just improve the way we do community care, they will make 
community care a part of the fabric of VA care, making VA a 
truly integrated health care system. Getting there will take 
    But even as we work towards the longer-term solution, we 
are working to improve the veteran's experience of care in the 
near term. We have already expanded the provider base by 
including providers participating in Medicaid. We have 
eliminated enrollment date and the combat eligibility 
indicators as factors limiting choice eligibility. We have 
defined additional services as qualifying for exceptions to the 
40-mile rule, and we have added urgent consult scheduling to 
get veterans seen in 2 business days when it is necessary.
    In the coming months, we expect to accomplish a number of 
other close-in objectives: A streamlined referral and 
authorization process; standardization of our partnerships with 
DoD and our academic affiliates; critical make-versus-buy 
decisions on information technology and contractor support; and 
successful application of MyVA customer service systems to 
community care coordination. These objectives will be the work 
of an enterprise-level community care team, dedicated full-time 
to improving and consolidating community care, and led by a new 
Deputy Under Secretary of Health for Community Care.
    We are eager to move forward with consolidation, but it 
must be a collaborative effort with Congress. The 
consolidation, like many of the improvements we have already 
made, is only possible with your support. We need Congress to 
provide the necessary legislation to support change and the 
required funding and resources to implement and execute the 
consolidation program.
    I know that costs are an issue. But the critical cost right 
now, I believe, for our focus, is the $421 million we expect to 
spend on systems redesign and business solutions in fiscal year 
2016. Other costs will come later as we tackle other aspects of 
consolidation, such as expanding emergency and urgent care. But 
our initial investment and one-time improvement to systems and 
solutions will enable us to exercise more control over the 
veteran's community care experience.
    We detailed our specific legislative proposals in the 
report. We have briefed their structure to your personal 
staffs. And we are happy to work with any Member on these 
issues. Thank you for the support that you have already shown. 
We look forward to working with you to fully integrate care in 
the community into the VA health care system.

    [The prepared statement of Sloan Gibson appears in the 

    The Chairman. Thank you very much. You talked about needing 
legislation to be able to do some of the things you need to do. 
What things can you do without legislation? And talk to me 
about the things you have already done.
    Mr. Gibson. I would like to ask Dr. Yehia to respond.
    Dr. Yehia. Sure. Thank you very much. That is a great 
question. There are definitely some things that would require 
some legislative approval. But we are moving out today to do 
things that are within VA's control. And we call these quick 
hits. These are things that we hope to get accomplished in the 
next couple months. And these include things such as 
streamlining the referral and authorization process. Right now, 
it is very complicated to send someone out into care in the 
community. There is a number of steps that our employees have 
to go through and veterans have to go through. Those are some 
things that we can lean up and make it better.
    We want to really build on our core network, which is 
described in the plan by standardizing sharing agreements with 
our DoD partners and our academic affiliates. Right now, every 
single individual VA medical center and their partner has a 
different agreement. We want to move towards a standard 
template that can actually start to tackle quality and specific 
issues. We want to leverage some of the MyVA work that is going 
on as it relates to customer service and start embedding that 
into community care. And as the Deputy alluded to, we want to 
carry out some critical make-buy decisions to determine if we 
need to purchase specific programs or solutions, or we need to 
outsource them to the private sector. And then during this 
time, also we want to create, really the implementation plan, 
where you create a timeline of the next steps and milestones 
that we would have to meet to accomplish the plan. So those are 
some of the things that we hope to do in the near term.
    The Chairman. Sloan, can you talk about, under the new 
Veterans Choice Program, whether or not you will use a third-
party administrator to manage the non-VA care networks? Or are 
you wanting to bring that in-house?
    Mr. Gibson. As Baligh alluded to, there are a series of 
functions that have to be performed, creating the provider 
network, managing the claims process, including claims payment, 
some of the customer service dimensions like scheduling. So 
there are a whole series of functions. And what we are 
committed to do is in each one of those cases, to make a very 
deliberate make-versus-buy decision, the only two criteria 
being what is best for veterans and what allows us to be the 
best steward we can of taxpayer resources. And I would tell 
you, the one you have just noted is one of those where we will 
make that make-versus-buy decision and do what we believe is 
right for veterans and right for taxpayers.
    The Chairman. Because the two people that are already 
working within the program have already set up networks. And I 
am just trying to figure out is it a duplication to go back and 
bring more folks in-house? I am glad to hear that you are going 
to look at that very closely.
    Let me also ask you about the change to the 40-mile issue. 
In the request or the report, you talk about changing the 40-
mile from a primary care provider. Why not allow veterans--I 
mean, because if somebody needs cardiac care or some other type 
of specialty care and there is not a provider within 40 miles, 
they are being hampered from getting care closer to home. And 
that is, I think, the focus that we are all trying to make, is 
to allow the veteran to get the care closer to where they live.
    Dr. Shulkin. Mr. Chairman, certainly we understand that 
point. And I do think that you are correct, that providing 
services closer to where veterans reside and making it more 
convenient is what we want to do. That really will end up being 
a choice that we are going to come back and need your help 
with, because that would require significant new resources to 
be able to fund that type of access delivery. So if that is 
something that we were provided the resources with, we would 
absolutely work to provide that type of service.
    Mr. Gibson. I would also add, if I may, that the authority 
you have recently given us to expand the aperture of undue 
burden really gives us some flexibility today, the authority 
today to make some of those decisions at the margin where, for 
example, cardiac care, where a veteran ought not to be 
traveling 100 or 150 miles for care. We can get that care in 
the community under Choice now.
    The Chairman. I think it is interesting that every time we 
talk about changing or improving our program, especially when 
you have two dual programs that are running side by side, the 
VA and the non-VA care, you are always adding additional money 
and not taking any savings over on the VA side. I know how CBO 
scores. But we need to be looking at savings. In the next round 
of questions, I do want to talk a little bit about that issue.
    But the one last question I have for you, Sloan, is why is 
there such a discrepancy with the access-to-care numbers, the 
wait time that we currently see in the community when we talk 
with our veterans and those that VA is reporting out?
    Mr. Gibson. I think what you hear--I will tell you, I think 
VA is delivering great timely access to care hundreds of 
thousands of times every single day. Where we fall down is in 
that 5 or 10 percent at the margin that aren't receiving timely 
access to care. I have noted that over the last year and a half 
or so, the number of veterans waiting over 30 days has gone 
from about 300,000 now to about 550,000, because we have got 
more veterans coming to us for more care. And those are the 
veterans that are going to be the most vocal.
    Having said all of that, we complete appointments, mental 
health in about 3 days, primary care in about 4 days, and 
specialty care in about 6 days. That is the average. So we are 
providing a lot of timely access to good care. It is just we 
are not able to do that consistently in every single instance.
    The Chairman. So you are testifying to this Committee that 
if a veteran calls and needs primary care, that that veteran 
will get it within 4 days?
    Mr. Gibson. I am telling you what the data tells us is that 
completed appointments for primary care, on average, are about 
4 days. I have no doubt, I know that there are instances out 
there where veterans have been waiting a month or 2 months or 3 
months to get primary care. I know that. And that is the 5 or 
10 percent that I am referring to that we have got to be able 
to address. But the challenge we run into is as we improve 
access to care, more veterans come to us for care.
    We completed 7 million more appointments over that 1-year 
period of time after May or June last year, which should have 
been more than enough to absorb that 300,000 we couldn't see 
timely. What happened in the meantime is more veterans came to 
    The Chairman. Do you count emergency room visits as an 
    Mr. Gibson. Emergency room visits are not counted in those 
totals. They are not.
    The Chairman. That is not what our staff was briefed. Wait. 
Wait. We are going to have a--this is what our staff was 
briefed on, and if I am incorrect, let me know, that 20 percent 
of the appointments are emergency room visits.
    Mr. Gibson. No.
    The Chairman. And we are being told, what staff was being 
    Mr. Gibson. No. David?
    Dr. Shulkin. Twenty percent of our visits are same-day 
access, which means not the emergency room, but they walk in to 
primary care, into their physician appointments, or walk-in 
appointments. Urgent care can also be considered a same-day 
access issue.
    The Chairman. Okay. That is emergency care.
    Mr. Gibson. Not emergency room.
    The Chairman. I am sorry, Sloan, do what? Sloan is 
answering and I can't tell you what you just said.
    Mr. Gibson. Urgent care would count, but not emergency room 
    The Chairman. Not emergency room care.
    Mr. Gibson. Correct.
    The Chairman. That is not, again, that is not what staff 
was briefed. We will go back and we will double-check.
    Mr. Gibson. Good. And we will do the same.
    The Chairman. If you set a veteran's appointment at 21 
days, and you hit that appointment at 21 days, does that 
appointment count as a wait of 21 days or zero?
    Mr. Gibson. It depends on when the clinically indicated 
date was or when the date the veteran wanted to be seen. If the 
veteran said I want to be seen in 21 days, then there is zero 
wait time. If the clinically indicated date, the doctor says I 
want to see you back in 3 weeks and we schedule it in 21 days, 
there is no wait time.
    The Chairman. So you are saying that if a veteran calls and 
says I want to be seen today, and you say I can't see you 
today, but I can see you in 3 weeks--
    Mr. Gibson. Then that is 21 days wait time.
    The Chairman [continued]. Okay. That is the way it is 
counted. Okay.
    Mr. Gibson. Yes. Absolutely.
    The Chairman. Mr. Takano.
    Mr. Takano. Thank you, Mr. Chairman. One of my main 
concerns is how we streamline and improve the flow of 
information between the VA and community providers, whether 
that is sharing the medical records or improving the billing 
process. I see that in phase 2 of the plan, the VA expects to 
enable medical record sharing between VA and community 
providers. Can you go into more detail about what that will 
look like? Am I correct to assume that this will be electronic 
sharing and not just a sharing of paper records?
    Dr. Shulkin. Congressman, yes. That would be correct. 
Today, VA gets most of its record through paper. And what this 
plan is saying is that that no longer would be our intent in 
the future. We would develop a health information exchange. In 
almost all the communities that all of you represent, you have 
active health information exchanges. VA participates in many of 
those. But this plan would say we would develop a health 
information exchange specifically to have electronic 
information come back to the VA to be able to make this user-
friendly and in a more timely fashion.
    This is not complicated technology. It is commercially 
available. And we participate in many of these around the 
country. But this would be a specific HIE for this purpose.
    Mr. Takano. How expensive will it be, do you think? I mean, 
we are talking about small providers and large community 
providers. I mean, I hear an earful about ACA and the 
meaningful use of electronic health records. And many of the 
small providers complain about the cost of this. So do we 
envision having to come up with more money to enable this to 
    Dr. Shulkin. Congressman, part of the $421 million that the 
Deputy Secretary referenced in his opening statement would be 
for us to develop this type of portal, so that part of it would 
be so that we could get this health information exchange. So 
that is included in the figures that we would like to have 
available to us, the flexibility to use money from 802 funds to 
be able to help develop this.
    Mr. Takano. Is this just the cost to the VA? Or are we also 
looking at the cost to the providers? Because to upgrade their 
ability, so I am envisioning these rural providers not 
necessarily having the capacity. Are we going to enable them 
through subsidies to acquire the technology?
    Dr. Shulkin. In my prior life before coming to VA, as a 
community provider, we participated in health information 
exchanges. This is so common right now that most providers are 
now participating in health information exchanges. And while 
there is some cost to it, most systems, most community 
providers have already developed these interfaces. So I do not 
believe we are looking at a lot of provider burden here. In 
fact, it should be easier for them than making photocopies and 
having to send the VA paper as they are currently doing right 
now. So I actually think this will be more efficient for the 
    Mr. Takano. Okay. In the plan, VA indicates there will be a 
number of things VA can start doing to move towards 
implementation of the plan without additional authority. Can 
you tell the Committee what those are?
    Dr. Yehia. Sure, Congressman. I mentioned those a little 
bit earlier. But the point here is to really try to 
meaningfully improve the veteran experience and the experience 
of our community providers and employees in the short term. So 
we are moving out to accomplish a couple of things today. And 
those relate to such things such as streamlining the referral 
and authorization process that I mentioned, standardizing those 
sharing agreements with our DoD and academic affiliate 
partners, infusing customer service training into community 
care, and making some of these critical alternative analysis or 
make-versus-buy decisions.
    So those are some of the things that are within our control 
today, that we are already starting to act on them to 
meaningfully improve the experience of our stakeholders.
    Mr. Takano. Well, the choice consolidation plan includes 13 
legislative proposals that are integral to the success of the 
transformation. I know the provider agreement draft legislation 
that the Subcommittee on Health heard about yesterday is a top 
priority. Which other proposals are the most important 
immediately to setting the foundation for success?
    Dr. Shulkin. I would be glad to start, Congressman. The 
very top priority for us is to get provider agreements. Having 
the ability to be able to contract with the providers that we 
want, having the ability to work with our key partners, 
Department of Defense, our academic teaching affiliates, the 
Indian Health Service, other Federal entities, and other high-
performing networks around the country, is going to be our 
critical feature here. So we absolutely would like to work with 
you and have your support in that.
    Secondly, the flexibility of the community care funds that 
we have talked to you so much about and being able to have our 
funding make sense for what veterans are receiving in the 
community and not making it as difficult to access those funds 
is absolutely key for us to do. Having the flexibility to 
access the $421 million from 802 funding, not new funding, but 
allowing us to access that funding so we can start developing 
these types of systems that we have talked about here in fiscal 
year 2016 is absolutely critical as well. And I would ask my 
colleagues if there are any other key features.
    Dr. Yehia. Those are the critical pieces. And you will see 
in our legislative proposal section that we separated those 
out, because those are things that we need today to move out to 
deliver better care to veterans. There is a middle section of 
proposals that relate to how we consolidate all the different 
programs. And then the last piece relates to how we can improve 
some business and health information sharing processes. So 
those are kind of how our legislative proposals are divided. 
And we asked that we focus initially on these immediate 
legislative needs.
    The Chairman. Mr. Lamborn, you are recognized.
    Mr. Lamborn. Thank you, Mr. Chairman. And thanks for having 
this hearing. Secretary Gibson, as I understand it from the 
briefings to staff, the VA previously wasn't tracking metrics 
for off-VA care. Can you explain why this was not being done, 
and perhaps what is being done now, if anything?
    Dr. Yehia. I think what we were saying before is that 
because we have such a patchwork of different programs for 
delivering community care, the Choice Program, the PCP 
contractor, affiliations with DoD and academics, they all are 
in a silo. And VA doesn't have the visibility that it needs to 
really assess kind of supply and demand. Do we have the right 
population of doctors, the right specialties in the right 
areas? Can we actually assess and monitor quality at the 
regional and national level?
    We don't have that level of visibility today. So in kind of 
the one-time cost system improvements that we articulate, those 
are the capabilities that we need. We need to have that 
visibility at the national level to be able to assess how to 
better match supply and demand, and how to monitor the quality 
of care for our veterans. So you are spot on, that is what we 
are asking for.
    Mr. Gibson. I think the other light to shed there, VHA has 
historically operated as a loose confederation of medical 
centers. And what we are talking about here is moving toward an 
integrated enterprise. And so, oftentimes, what I find is out 
at a medical center level, there actually is a pretty good 
finger on the pulse of the care that is being delivered by 
local providers, because doc providers inside VA know who they 
are referring patients to. They know about that provider, and 
they are seeing their patients and assessing that provider 
experience. But that is not consistent all across the entire 
administration. We need to operate more like an integrated 
enterprise so that we have got that kind of consistency.
    Mr. Lamborn. Okay. Thank you for that answer. And I am 
going to shift gears and ask about IT. We had a hearing 
recently, a combined hearing with another OTR committee, about 
how the VA and DoD is not able to share medical records. But 
some of what the plan is you are talking about for the future 
is hinged on a cloud IT system for better sharing between the 
VA and community providers. So if the DoD and VA haven't been 
able to really integrate after 17 years, why do you feel it is 
going to work to do something differently with the community 
providers and the VA?
    Mr. Gibson. First of all, as it relates to interoperability 
with DoD, this came up at our breakfast the other day. And I 
would plead with any Member of this Committee, give us an 
opportunity to come over and demonstrate for you today what is 
happening, the information exchange that is happening between 
VA and DoD. We routinely offer those briefings. We get staff 
coming, but we never can seem to get a Member to come.
    So please, we would love to have you come. I will come too. 
And we will put on that demonstration so that you can see we 
are exchanging electronically vast amounts of information with 
DoD every single day. We would love to share that with you.
    The Chairman. If the gentleman will yield. Members, we will 
take the VA up on that. It may be an early morning breakfast 
event. I will bring the chicken biscuits. And we would love to 
see it.
    Mr. Gibson. Wonderful.
    Mr. Lamborn. Mr. Chairman, thanks for your initiative on 
    Mr. Gibson. But the other part of the issue has to do with 
the health information exchange, the portal that Dr. Shulkin 
was talking about earlier. Other comments to add there?
    Mr. Lamborn. Dr. Shulkin, can you add anything to that, the 
cloud IT system, that community provider sector?
    Dr. Shulkin. When you come to this, to this demonstration, 
because I had a chance to see this in North Chicago, one of our 
integrated facilities with the Navy, as our doctors were going 
back and forth between DoD and VA systems. So this joint viewer 
does allow that. A health information exchange exactly provides 
that opportunity with community providers. So you do use the 
cloud. And you are able to go back and forth. It is not one 
integrated medical record. I mean, we would all love to see 
that, but the commercial companies are guarding their software 
protection to do that. So what you have is the ability to see 
information, clinical information. I think that is what you get 
with the health information exchange as well.
    Mr. Lamborn. Okay. Thank you. Mr. Chairman, I yield back.
    The Chairman. Thank you. Ms. Brownley.
    Ms. Brownley. Thank you, Mr. Chairman. My question has to 
do with implementation. Let's just say, hypothetically, today 
was the day that we approved all the legislation that you 
needed to move forward with the program. Can you talk a little 
bit about the implementation and the timeframes associated with 
    I know, I mean, I looked at the plan and saw the three 
phases. And I think by the third phase, it is 4 or 5 years out 
is my understanding. But there is also a lot of what you 
classify as make-buy decisions that have to be made that are 
going to be, I think, really important to that timeline. And 
certainly thinking about the role of third-party 
administrators, I think is, at least one that I think is a 
pretty big deal, a pretty big decision on all of this. So if 
you could just talk a little bit about the challenges, but what 
your timeline is.
    Dr. Shulkin. Yes. Congresswoman, great question. First 
thing which I want to make sure that you understand is that we 
are out there every day, traveling all the time. And we are 
hearing from veterans that the current system isn't working 
well enough for them. And they are pretty clear about this. I 
know you are hearing the same thing too. So we are not taking a 
wait-until-we-improve-the-system approach. We are, right now, 
understanding things aren't working, and we are making these 
types of incremental approaches as fast as we possibly can. We 
are doing it in partnership with our TPAs and our provider 
partners, Department of Defense, academic centers. So we are 
starting right now, and have been, actually, to make this 
better. We want to get there as quickly as we can. So the 
timeline you are talking about, I am going to actually have Dr. 
Yehia go through.
    Dr. Yehia. Yeah, I think that is such a critical point. 
Because the way that we set up the implementation plan or the 
transition plan is not to have some grand reveal in a number of 
years. We really want to make incremental improvements. So that 
is why we came up with these different phases. The first phase 
is really to develop the implementation plan, those details 
that you need and we need of milestones and how we are going to 
get there, those critical make-buy decisions, and then deliver 
on the--what we call minimally viable solutions, incremental 
    The next phase, which is another year, is to start 
connecting different systems, getting these capabilities up. 
And the third phase is rolling out some of these larger ones 
and starting to maintain them. I think one thing to remember 
about implementation, I know IT has been mentioned a lot, is 
that from day one, when we started this plan, we were joined at 
the hip with our IT colleagues. So our assistant secretary for 
IT, LaVerne Council and her team, were partners with us. They 
helped us develop a lot of these recommendations. They helped 
us come up with the cost estimates. And now they are standing 
up a project management team just for community care.
    So I couldn't agree more that we need to do this as an 
enterprise. It's not going to be run out of VHA. It is not run 
out of IT. It is run at the Department level. I think the other 
really important point about implementation and why it is 
different than before is this collaboration that we have 
created between field leadership, program office leadership, 
and also external consultants that have expertise in things 
such as health plans and value-based care, that VA doesn't have 
all those specific competencies today.
    So we are assembling these, what we are calling tiger 
teams, dedicated staff, multidisciplinary, to start rolling out 
some of the different aspects of implementation which, in my 
mind, makes it unique.
    Ms. Brownley. In terms of the make-buy decisions, and, 
again, going back to third-party administrators, so, again, 
that seems like a pretty big decision. And I know that we 
have--it has been slow in terms of the Choice Program and so 
forth. But it is my understanding, I can't speak for Health 
Net, but with TRICARE, I know they have invested quite a bit 
over the last, you know, 6 months, anyway. It appears they are 
improving. But, again, it is going to be customer satisfaction 
that tells the true story. But give me some idea of your 
thinking, some of the pros and cons of using our existing 
third-party administrators, or taking all of those services 
within the VA. And you have 20 seconds.
    Dr. Yehia. I can't stress enough that they are our 
partners. So we are working with them day in and day out. They 
are embedded in some of our medical centers. So they are our 
partners in making the Choice Act work. I think we have engaged 
some external consultants to help us determine what we are 
calling an announceable alternative to determine what is best 
for taxpayers and best for veterans. We are not taking this 
decision lightly. It is not just an--we are using all the 
resources we have to help us make the best informed decision.
    Ms. Brownley. I yield back, Mr. Chairman.
    The Chairman. Thank you very much. Dr. Roe, you are 
    Mr. Roe. Thank you, Mr. Chairman. And, Dr. Yehia, you will 
get all the tough questions being a University of Florida grad, 
okay, from me. First of all, health care is changing in America 
as we all know. And we are looking now, instead of just 
procedural things, outcomes-based medicine. I know we have a 
VISN director here who has been a hospital director also. And 
if you look at the local hospital system, they will know pretty 
much in that area where they are, who the providers are they 
can use.
    I will give you an example. At home, we have, and I will do 
a little shout-out to my own practice, but we have a group of 
about 500 primary care providers. We formed a Medicare ACO. It 
is the best performing ACO in America with 25,000 or less 
people in it. So the VA could easily integrate and get results 
back from that. Mayo, Scott and White, I mean, on and on, 
Marshfield, we all know those systems that can provide a lot of 
    And I absolutely do believe you are on the right path. I 
want to support what you are doing 100 percent, because I think 
this blended system is the one that is ultimately going to 
provide the care to veterans. I really believe that. And 
simplifying the system has to be done. And it has to be for 
your sanity and the veteran's sanity both.
    So I want to give you a shout-out for that. To Mr. 
Lamborn's comments about the IT system, I have had the fortune, 
or misfortune, to be in North Chicago twice in the winter. It 
wasn't as seamless as I would like to have seen it as a 
provider. As a provider, seamless, if you are the boots on the 
ground doctor, something that takes you 2 or 3 or 4 minutes to 
get information from, you are hopelessly behind at the end of 
the day. You have heard me say this over and over again, having 
used an EMR system.
    So we have to have a system that works for the provider 
because, otherwise, it doesn't work for the patient. Those 
things, what I would like to know is what percent of the 
veteran population do you think will actually utilize this 
system? Because you have got a little bit of an onslaught. I 
think some of that was a woodwork in process, people heard 
about it and hey, maybe I can go get that care. So how many do 
you think will actually be in non-VA care and VA care?
    Dr. Yehia. I think that is a great question. As a provider 
in the system, you know, we are trying to design a system that 
works great for veterans, our providers, and employees, and 
community providers as well. When I see patients, I want--3 
minutes is too long. So I can't agree more. And so I think it 
is important that whatever we end up designing in partnership 
with Congress works for us. Because I am going to be living it 
day to day as well as I see patients.
    With that in mind, your question about how many people are 
accessing community care, about a million and a half veterans 
have received some sort of community care. That doesn't mean 
all of their care is in the community. They might have gone out 
for a particular procedure or an episode of care. But there are 
a good chunk of veterans that get their care in the community.
    Recently with the expanded Choice legislation and removing 
the eligibility date and the 40-miles-from-primary-care 
physician, that makes about 900,000 veterans are now eligible 
under the 40-mile geographic criteria. So there is a big 
population of our veterans that are now eligible to access 
community care.
    Dr. Shulkin. Dr. Roe, let me just say, I think what you 
just talked about, your statement, is a precise articulation of 
what this plan is about. So I thank you for that. Health care 
in America is changing, and changing rapidly. And this is 
actually a plan that recognizes that and says VA has to not 
only keep up with it, but take advantage of everything that is 
happening good in American medicine. So I used to run our 
accountable care organizations. It is exactly those networks we 
want to tap into to get the best care for our veterans.
    Mr. Roe. And it is easily reproducible. I mean, you can get 
that data quickly back. The electronic health record is a 
challenge, because in ours, where we brought in other doctor 
groups, 40 different electronic health systems. And that is a 
huge challenge across the country trying to figure out how to 
make these things integrate. And that will be ongoing. I think 
the other thing I want to do, as Ms. Brownley asked, what is 
the timeframe? If this goes exactly like we think, which it 
won't, how do you think the timeframe will be? Couple of years?
    Dr. Yehia. Yeah, I think it is such a critical question. We 
are really doing this in an iterative way. It is kind of like 
agile design. As I mentioned before, we are not looking for a 
grand reveal after a number of years. So we are hoping that 
even starting today, we are starting to deliver incremental 
improvements to veterans, employees, and our community 
providers. After some of these make-buy decisions, and the 
portal is an example, those take a little bit of time to 
actually get into place. But that doesn't mean we are not going 
out today and starting to make the system better. That is our 
    Mr. Roe. My time has expired. But I thank you for what you 
are trying to do. And also, if you could just do one thing is 
make sure--and Medicare does a pretty good job of this--are 
timely payments to providers. If they are sitting there for 
months and months and months, they are not going to 
participate. I yield back.
    The Chairman. Ms. Kuster.
    Ms. Kuster. Thank you very much. And thanks so much for 
being with us. I think this is a really important conversation 
to have, because the conversations I have been having with my 
VA for several months now, actually over the last couple of 
years, is that there is just such a patchwork of programs. And 
they prefer the programs where they can stay in touch with the 
providers in the community.
    We have also had some challenges with our third-party 
contractor on implementing the Choice Program in New Hampshire. 
I have to ask one very parochial quick question. We are one of 
only two States in the country without a full-service VA 
hospital. And we had a special amendment under the Choice Card 
to reduce to 20 miles. Can I reassure my folks in New Hampshire 
that this 40 mile is not going to cause them to be driving over 
the mountains in the snow again to get to the VA Hospital? I 
told you it was parochial.
    Mr. Gibson. Well, no, we expected the question, quite 
    Ms. Kuster. Thank you. We are dogged in our determination 
to care of our veterans.
    Mr. Gibson. We deliberately, in the plan, did not address 
the special circumstances in Alaska, Hawaii, and New Hampshire. 
And so part of the process here as we work through this is to, 
very deliberately, with all the stakeholders, look at each one 
of those instances and figure out exactly the right thing for 
veterans and for taxpayers. And we commit to you that we will 
do that.
    Ms. Kuster. Thanks. We will be on it. And just having said 
that, and whether you say 20 miles or 40 miles, this picks up 
on a previous question, part of the confusion is that to use 
this distance when it is not relevant to the care that is being 
provided, I think is really a dilemma. To say I am 20 miles or 
40 miles from a facility, if it doesn't--you know, look, I need 
heart surgery, I don't need to go to a primary care physician. 
So are we going to resolve that particular aspect of this as 
    Dr. Yehia. Yeah, so I think that is a great question. 
Because we heard that from our veterans and our community 
providers. The way we articulate in the plan is not to a 
facility, but to the relationship. And so we say that it is 40 
miles from a primary care provider. Because in health care, 
that relationship between the patient and the primary care 
provider is probably the most critical relationship there is. 
They are the care coordinators. They provide access to 
specialty care. And so the way that the eligibility criteria of 
the plan is designed is, if you live far away from that 
critical relationship, all the veterans health benefits package 
is available to you in the community. So it is more 
relationship-based and less facility-based.
    Ms. Kuster. Okay. Thank you. I appreciate that. And part of 
what I wanted to get at, and I think this is a goal, is just 
the confusion of the bureaucracy. And you all inherited this as 
well. It is complicated which veterans are eligible for which 
services, what kind of health care we are offering. And I think 
there is sort of a built-in conundrum for us on the Committee 
and in the veteran community between focusing on those types of 
injuries and ailments that come from their service, versus 
those types of injuries and ailments that have to do with aging 
and other disease processes that are built in to the DNA before 
they even head overseas.
    In our case, we have 65,000 Vietnam veterans in New 
Hampshire aging. But I want to keep the promise to them, 
because many of their concerns, health care concerns, mental 
health care concerns are related to their service. We didn't 
know it at the time. It took us a while to sort it out. But it 
is very clear to me now as I meet with these folks, and I will 
add in the folks coming back from--we have a high percentage 
coming back from Iraq and Afghanistan, the TBIs, the MST, the 
PTSD. Can you just comment on serving the whole veteran, if you 
    Dr. Shulkin. Yes. I think you have said this very well, 
that the current experience today is confusing and overly 
complex. I would note that this is not purely a VA issue. This 
is the managed care industry in general, right? Nobody really 
understands their managed care benefits and the complexity of 
what is happening in American health care.
    Ms. Kuster. I absolutely agree.
    Dr. Shulkin. But we recognize what you are saying. The 
point of what we are trying to do, this type of incremental 
change, is to simplify this. If you work with us to allow us to 
get the flexibility of care in the funding, care in the 
community, care-funding together, we think that will go a long 
way towards allowing us to simplify the eligibility 
requirements, the understanding of what veterans can and cannot 
get from the VA. And we are committed to doing that early on in 
this timeframe. And we are using veterans focus groups. And we 
are out there in the MyVA efforts to try to make this more 
    Ms. Kuster. Well, I look forward to working with you. And 
thank you very much for your presentation.
    The Chairman. Dr. Benishek, you are recognized.
    Mr. Benishek. Thank you, Mr. Chairman. Welcome. I just want 
to reiterate what Dr. Roe said, that, frankly, I think this is 
great that we have one way of VA veterans getting access to 
community care rather than the hodgepodge of efforts. My 
concern, of course, is the implementation and making it work. I 
will give you an example here. I got many complaints from 
providers in my district about the Choice Program due to the 
inability of the Health Net to communicate with the VA and with 
the private providers. I had a provider that told me they had 
to wait weeks to hear back from Health Net. They want to update 
authorization for care. And when they do hear back, they have 
to spend 40 to 75 minutes on the phone to check on each and 
every authorization. This is like, just this week.
    So, I mean, I know that this Choice thing came in quickly. 
And you tried to get it. But the implementation of this is what 
scares me about it. Do you know what I mean? Are you aware of 
this problem with these third-party providers? Who is dealing 
with that?
    Dr. Shulkin. We are not only aware of it, we are painfully 
aware of it. We are hearing this every day, many, many times a 
day. And so the Choice Program, which was brought up with the 
best of intentions, has experienced considerable problems, 
putting the veteran in the middle, quite frankly, but also the 
providers. We are working with both TPAs. And the CEO of 
TriWest is here in this room with us today. We are working with 
both TPAs.
    We have gone through multiple, multiple contract 
modifications to make this work better. And we are using pilots 
in several locations throughout the country. We are actually 
co-locating the staff from the TPA with the VA staff. One of 
the things that we learned in looking back on this, it was the 
VA staff who had the relationships with the providers in the 
community, and the relationships with the veterans. And when we 
removed them from the process, problems began. So we are 
working now with the TPAs to--
    Mr. Benishek. I tend to agree with your assessment. As you 
know, I worked at the VA. And I know the guys at the VA. I knew 
their local providers. And that system actually seemed to work 
okay in my community. And then having somebody they have no 
idea who they are contracting with you, you know, taking a 
percent of the money doesn't make much sense to me, to tell you 
the truth. I am not sure that we were all that happy with the 
plan to do that.
    Dr. Shulkin. Right.
    Mr. Benishek. Let me just talk to you a little bit more 
about another issue and that is, the core competencies in the 
VA. The plan calls for the VA to access non-VA care for 
veterans outside of certain core competencies that the VA 
should handle. What are those core competencies?
    Dr. Yehia. I think that is a great question. When we 
started this process to consolidate care in the community, Joe 
and I really had to step back, because we couldn't look at it 
just in a silo of how do you make this part of the system work 
better without figuring out how it interacts with the rest of 
the system, which is why, in the preamble of the report, we 
talk about the future of VA health care. And I think the 
principle there is that we cannot provide every single service 
in every single location to every single veteran. And that is 
the concept there. I think if we want to move towards that 
integrated health care system, really creating a complementary 
provider network to internal VA care.
    This doesn't mean we are outsourcing VA or dismantling the 
VA. What we want to do is have a more complementary integrated 
system, so that if we are providing mental health care and 
primary care in that area, we probably don't need a lot of 
mental health care and primary care docs in the network. We 
need other things that aren't provided at the VA. So we are 
calling these kind of foundational services that VA would 
provide. A lot of that is going to be locally determined. As 
you know, health care is local. What is available in one market 
may not be available in another. So that is where that spirit 
comes from, is how to get to that integrated health care system 
and creating a complementary network.
    Mr. Benishek. Well, to tell you the truth, I really 
appreciate your enthusiasm and your response. That may be due 
to your relatively short tenure at the VA. I am hoping that 
that will continue. And I know that, you know, that two 
physicians up there are relatively new. And I actually really 
welcome their input and leadership. And I am happy to work with 
you to make this plan happen. I just have my concerns about the 
pace. Thank you.
    The Chairman. I think part of it is because the Gators are 
9 and 1 right now. Mr. O'Rourke, you are recognized.
    Mr. O'Rourke. Thank you, Mr. Chairman. I just want to begin 
by telling you each how encouraged I am by this report that you 
produced and your testimony today and your answers to our 
questions, and how grateful I am on behalf of the veterans that 
I represent for this initiative. And, Dr. Shulkin, you talk 
about changes in American medicine that you are anticipating 
and incorporating in the proposal that you have put forward. 
And it is restoring the VA to its rightful place as a leader in 
American health care who can set the standard and become known 
for excellence and figuring out problems that are fundamental 
to how we provide health care in this country.
    So this, for me, in the--you know, as another short-timer 
who hasn't been here yet 3 years, is certainly the high 
watermark in terms of our work with and collaboration with the 
VA. And I share, you have heard it from many of my colleagues 
so far when they are asking you how long will this take. And, 
Dr. Yehia, you have done a great job of avoiding the question 
and saying we have got an iterative process and we are doing 
this, that, and the other. I don't want to speak for anyone 
    What I am concerned about is you have just a little over a 
year left in this administration. And this is a very exciting, 
necessary, essential proposal to reform VA care. And I want to 
make sure that you can do and we can help you do everything 
necessary to make it happen. So you don't have to answer that 
question. But just know that is the interest. And I, for one, 
want to help legislatively in any capacity I can to make sure 
that we get this done.
    I want to point out a couple of things that I think are 
really encouraging. The focus on care coordination, which you 
have talked about, and making it a fundamental principle of 
excellence for the VA is just so important if we are going to 
get this done. You mention in your report that you are seeing 
rising demand for outpatient visits and decreasing demand for 
inpatient hospital beds. And that seems to answer this 
frustration we have with the $1.1 billion overage in Aurora, 
and hundreds of millions of dollars over in Orlando and Las 
Vegas and New Orleans.
    We shouldn't be building stand-alone VA hospitals to only 
take care of veterans. On top of that, 41,000 funded, 
authorized positions unfilled. We have to prioritize where we 
are going to focus in the VA. And so core competencies, as Dr. 
Benishek raised, I think it is really important that that is a 
fundamental aspect of this plan. And I like the way it is 
articulated on page 18 of the proposal.
    One question related to this, Secretary Gibson, you have 
said in a previous hearing that for every 1 percent increase in 
VA patient demand on the system, you incur an additional $1.4 
billion in cost. Does this plan, through care coordination, 
investment in IT systems, et cetera, create some of the 
necessary efficiencies for us to be able to afford greater 
veteran participation going forward?
    Mr. Gibson. I will start and then you guys can finish. It 
was actually Bob that used the 1 percent and $1.4 billion. But 
I will own it. There are certainly efficiencies built in here. 
As I alluded to in the opening statement, the fact remains that 
as we improve access to care, and as we improve the veteran's 
care experiences, we are going to find more veterans coming to 
us for care, especially when it is financially advantageous to 
the veteran, when their out-of-pocket costs are going to be 
lower to come to VA. So we are going to continue to see that. 
But there are some savings that are built in to this overall 
cost picture. And I will ask Baligh to touch on those.
    Dr. Yehia. So I think what you see here is that we are 
moving towards best practices that are in industry. So we talk 
about, by streamlining a lot of these processes, it is more 
automated, less manual. Our employees can spend more time with 
veterans. And so there is efficiencies gained there. By working 
with high-performing providers in the community, providers that 
understand the principles of high-quality care and utilization 
management, there is efficiency there because they are not 
going to be ordering that extra CAT scan that may be 
unnecessary. Or they may be preventing an admission for a 
diabetic that may require an inpatient stay for someone else.
    So I think it starts with making the system a little bit 
better, getting the right providers in the network. And then 
probably the last component is how we start leveraging lessons 
learned from CMS. CMS is doing a lot of great work in value-
based payments. So we are not reimbursing just for episodes of 
care but for more outcomes-driven care. So we articulate some 
of those there. That is the direction we want to move to. We 
want to skate kind of where the puck is going and not 
necessarily be tied to the systems today.
    Mr. O'Rourke. Thank you. And, again, thank you for your 
work. And I look forward to working with you on this. I yield 
    The Chairman. Thank you very much. Mr. Huelskamp? Mrs. 
    Mrs. Walorski. Thank you, Mr. Chairman. And I also want to 
add to the panel how grateful I am that you are here as well, 
and that we sound like we are on the same page, at least in the 
concept of moving forward in trying to be able to rebuild that 
trust with veterans and the VA.
    The one question I have is all the way back to when the 
Chairman started on this whole issue of Choice. And let me 
start by saying, you know, I want the VA to be healthy. I want 
the VA to work for my constituents in northern Indiana. 
Unfortunately--so when I sit in these hearings and I listen to 
every single question my colleagues are asking, I still think 
in the back of my mind, we are not as functional in the State 
of Indiana as some of our neighboring colleagues here.
    And that is my desire. That is the desire of our veterans. 
They want everything to work for them because we promised them 
that when they went to fight. And so, that is my goal is to 
continue--to work as closely as we can to get the VA healthy. 
And so I so much appreciate the report that you have and the 
plans and that kind of a thing.
    But I am still caught in the question that Representative 
O'Rourke didn't want an answer, but it will help me to have and 
answer on when can we see some of this happening. Because I was 
on the conference committee back in October when we did the 
reform, reset type thing. We still don't really have a Choice 
Program in my district, in northern Indiana. And so I just--it 
is interesting, I just had a phone call with my district staff 
that works on all of our VA case work in the district and they 
were just telling me that just recently, we got a call from an 
actual VA hospital in the State of Indiana telling the veteran 
to call my office because the VA hospital can't get 
appointments and can't get anything through for this veteran.
    I am thinking to myself something is wrong. There is some 
kind of a clog in the line. And I would ask you guys, and even 
Mr. Gibson, if you would--I am more than willing to come to 
that computer IT show-me-the-world type thing. I am more than 
willing to be there. I will be there. But I am, again, asking 
if you or the Secretary could seriously come into my district, 
and if we could have conversations about how we make this work 
better, because I think that would be one of the quickest ways, 
and much more efficient ways to actually see that it just isn't 
happening like you are describing it around some of these other 
areas around the country, that would be my first question.
    Mr. Gibson. We will do it. Bob or I will come, we will 
bring some of our medical center leadership from Indiana, and 
we will also bring senior representation from the TPA, from the 
    Mrs. Walorski. I really appreciate it, I really do.
    And then my second comment is back to this Choice Program. 
I remember being on the conference committee when we talked 
about that 40-mile radius. I am and still very, very concerned. 
When you are looking at areas that have rural places which are 
the hardest sometimes to get care to, that is why this evolved 
in the first place. So it is like let's get care to them from a 
community-based hospital, somebody near them.
    One of the things that I find in my district, which I find 
so frustrating to say, if we are going to look at broadening 
that radius, it is going to cost a whole lot of money. And I 
know when you are talking about you need our help, that means 
money. But it is so problematic in places in these rural areas. 
And to Representative Kuster's point, when you are dealing with 
winter weather. Winter weather in my State closes States. We 
have state of emergencies, and we can't travel, you know. I am 
finding myself getting involved. The veterans are calling my 
office, and then having me make phone calls to try to get 
Choice implemented. It literally is not rolling out in our 
district. So can you just comment on that? I mean, when can we 
see that actually happening?
    Dr. Shulkin. One of the points that Secretary McDonald 
constantly makes is the VA is the canary in the coal mine for 
American medicine. So the problems that you are describing 
about rural health care are problems in every aspect of health 
    Mrs. Walorski. True.
    Dr. Shulkin. Getting providers there, getting the right 
specialties there.
    VA is looking at this issue. We are desperately trying to 
hire psychiatrists in El Paso and specialists in Indiana. But 
one of the ways that we are beginning to do this is to really 
use telehealth. In a way for rural--
    Mrs. Walorski. Telehealth is working in my district, I will 
tell you that. But for specialized care, and for things like 
cancer and those kinds of--it is so hard.
    Dr. Shulkin [continued]. We are moving rapidly toward 
specialty telehealth. In fact, people don't realize, nobody is 
doing more telehealth in the country than VA. We are driving 
this faster than anybody. And that can't be the total answer, 
but we have to look towards new technology.
    Mrs. Walorski. Right.
    Dr. Shulkin. And we have to get more--
    Mrs. Walorski. I do agree. Yeah, I will give you that, it 
does definitely works in our State. But I appreciate your 
willingness to come and help us troubleshoot. I yield back.
    The Chairman. Mr. Walz.
    Mr. Walz. Well, thank you, Mr. Chairman. I, too, would like 
to, first of all, applaud the Committee for showing that we can 
simultaneously do our duty of oversight on accountability, and 
start to provide vision for the future, because I think what we 
are talking about in hearing people, this is our opportunity to 
shape VA 2050, if you will.
    Amongst the crisis situation that arose from Phoenix and 
others, I think this is the silver lining that we are starting 
to move towards that blended system you hear about.
    And Deputy Secretary Gibson, I do have to say, at the time 
when the VA so needed it, you instill confidence, your candor 
and steady leadership is appreciated. And I think that needs to 
be said publicly, because we are moving towards solutions, so 
thank you.
    My team and myself, and I know many have done this, have 
gone on deep dive on this. It gave us that opportunity, working 
with everyone from Health Net and TriWest who you said are here 
today--not only are they here today, they were at roundtables 
in Brainerd, Minnesota, with veterans. And at a time when 
people could have ducked and covered, they didn't. They stood 
up in the face of this and were very candid. I appreciate that.
    Private providers, county veteran service officers, the 
Minneapolis VA, VISN 23, American Hospital Association and 
central office are digging into this. People want to fix this, 
they want to get there. And you have heard it today, it is 
working. I think the point that was brought up by my colleague 
from Indiana just brought up, separating VA health care from 
health care in general is--you cannot do it, the lack of rural 
providers in the private sector is every bit of a problem as it 
is for veterans.
    My question to you and I want to be specific on this, and 
you have answered it some degree, but out of all of those 
meetings and other things that came, one of the things I am 
hearing from the providers, from the private providers, is the 
standards in the program are not industry standards, resulting 
in some of them opting out. I want to understand why you think, 
in your opinion, why are some providers opting out of this? 
Because I know they want to help care for veterans, but we 
shouldn't make it at a loss to them. If you could take that 
one, I know you have answered it to a little degree, but this 
was asked of my people out there of why this is happening.
    Mr. Dalpiaz. If we look at rural areas in particular, two 
big reasons: One is, and we have this in the plan, we need to 
continue with or enhance special dispensation for rural 
providers. The other finding, and it should have been very 
obvious to all of us is when we wrote the initial requirements, 
we wrote in very burdensome requirements for providers, and we 
know in rural areas, there is a lot of small operations. And 
what we hear from rural providers is, this is so burdensome for 
me to participate, I have to hire additional staff, and I can't 
do that.
    So when we look at future requirements for a network, we 
built in flexibility for special dispensation for different 
parts of the country, rural areas being one. And we have to 
take a very critical clinical look at the things that we are 
requiring them to send back to us. They seem to be the two 
things that are most troublesome and push people away from our 
system. And we have learned those lessons.
    Mr. Walz. So when we go forward, will that be a contract 
thing that you have the capacity to do, or does this need 
legislative improvements?
    Dr. Yehia. So I think it is a combination of both. There 
are some requirements that we have today that are not industry 
standard, and the principles laid in here is to move us more 
towards that. What are the leading practices? One of them is 
tying the medical record to claims. That doesn't exist 
typically in the private sector. Not saying that we don't want 
records back, but there are other ways that we can incentivize 
our community providers to get us health information back 
without saying we are not going to pay you.
    The critical thing that we would need is provider 
agreements, and this is a simplified way that we can partner 
with providers of the community. And those are exactly the 
providers you are talking about; typically, the local, mom-and-
pop, small practices. These aren't the large conglomerations 
that could enter in complicated, far-based contracts with us. 
Those we can work through very complicated contracts with. But 
the smaller providers won't work with us if we have them jump 
through a number of hoops that Medicare doesn't require, or 
partnerships with other health plans don't require.
    So that, I think, is critical for us. If we can get 
provider agreements passed, it is going to allow us to partner 
with community providers, and then increase access to those 
providers for our veterans.
    Mr. Walz. That is exactly what they are saying. How quickly 
can we do this?
    Dr. Yehia. We have I think at the last Subcommittee 
hearing, VA presented their proposal, and I think the Committee 
is considering it. I know there is a counterpart bill in the 
Senate that has been introduced. We would love for you to move 
as quickly as possible in that.
    Mr. Walz. Because I don't want to put these people in the 
position either. It is pretty wrenching for them that they want 
to do this, and they don't want to be seen as not providing for 
veterans. So I think that is a positive step forward.
    Again, I thank you for your work, and I have to say this 
is--there are some positive developments, and we need to focus 
on where there is crisis, we need to continue to have 
accountability, but I think it is important for us to show that 
there is lot of good happening too, so thank you for that.
    The Chairman. Dr. Wenstrup, you are recognized.
    Mr. Wenstrup. Thank you, Mr. Chairman. It is a very 
encouraging meeting today. And I want to thank you for 
listening, because that is what we are seeing taking place 
here, you know. In the last couple years, we have had these 
types of discussions about where, I think, we should be headed, 
and we are seeing it happen. And I appreciate that very much.
    I do agree with the Chairman when he mentioned that when we 
are outsourcing, it doesn't necessarily cost us more if we are 
lowering on the other side. We may find ourselves, and probably 
will, in a situation some day, where we say we don't need all 
these physical plants in the VA, and we can reduce our 
footprint. And so we can save in a lot of ways and continue to 
work on increasing productivity.
    I especially like what you were just talking about, 
provider agreements. If there is something in the way coming 
from here that is making that more difficult, then we need to 
change that. And you are right, especially in rural areas, 
letting that lone practitioner out there be able to be a VA 
provider. Which brings me to another point that, I don't really 
think we need to say that this is non-VA care, you know. Our 
practice, I guarantee you, 20-some orthopaedic surgeons, we 
would have been glad to have a sign out in front of our 
building saying ``VA provider'' and put the VA logo up there. 
So I think we should shift away from calling it non-VA care, 
but extending VA care, and I think that would be helpful.
    Mr. Gibson. That has been my campaign for the last 6 
months, to eradicate non-VA care from our vernacular, and 
instead, refer to it as VA community care.
    Mr. Wenstrup. Well, I appreciate that. Great minds must 
think alike. I don't know. But I also appreciate what you were 
talking about with the information sharing, because in our 
practice, you know, we could go to--a patient comes to our 
practice, we could get their information from any hospital in 
the region without having to jump through a lot of hoops, and 
it makes a big difference. So I applaud you for being in the 
right direction, and I yield back. Thank you.
    The Chairman. Thank you very much. Dr. Ruiz.
    Mr. Ruiz. Thank you, Mr. Chairman. Secretary Gibson, 
simplifying and improving the process for veteran seeking 
community care remains at the top of my priority list, and the 
veterans living in my district. We--as soon as the Choice Act 
was passed, we held some workshops in my district with 
physicians, TriWest and the VA, and we heard a lot of the 
different obstacles that were involved, including the enormous 
amount of bureaucracy and the lack of information that our 
providers had in order to enroll.
    The two VA community clinics located in my district are 
Palm Desert and Blythe, they are the point of care for VA-based 
care in my district. I am eager to make those facilities more 
veteran-centric. And I believe your proposal, while not 
perfect, is a step in the right direction.
    I, too, am a little concerned about the implementation 
plan, and the deadlines, and the inherent evaluation, and 
oversight that you have within the plan in order for us to meet 
the goals that you set forward in the time that you want to set 
them, and not have another over-budgeted plan, or I should say, 
under-budgeted plan, where we get a surprise bill for billions 
of dollars in the near future.
    My questions rely on the fact that we are going to start 
relying on community physicians to provide care in areas that 
have low access to veterans facilities. Yet those are, 
oftentimes, the rural underserved area. And in my district, we 
have one doctor per 9,000 residents. So how are you going to 
account for the physician shortage in the community for the 
general population, and rely on them for the physician care for 
    Dr. Shulkin. If you have the answer to that, that would be 
great, because--yeah. This is a significant problem for 
America. VA, I think, can bring to this several things: One is, 
thanks to your additional authorities in the Choice Act, you 
allowed us additional graduate medical education funding. And 
so, for us to create partnerships with medical schools, and to 
create new GME spots that focus on the shortage areas and focus 
in the rural areas is absolutely top among--
    Mr. Ruiz. Well, we should talk. I was senior associate dean 
of a new medical school that had that exact plan that took my 
students in under grad in college from underserved communities 
into the under grad, into those medical schools in developing 
residency programs in those underserved areas. One of the key 
places that you can start having your residents go to, and that 
are involved that are eventually going to work at the VA, is 
    So let me ask you another important question, because I am 
limited with time. I have a veteran in my district who is not 
the only veteran that has told me this story, who had bad, I 
guess, consequences from the third party not paying their bills 
on time, and therefore, the provider then would bill the 
veteran. And the veteran didn't have the resources to pay that. 
And also, the veteran was under the impression that the third 
party was going to pay those bills.
    My veteran now has poor credit scores because it went to 
collections, and it went through all these other things. What 
are we going to do to protect the veterans in case there are 
glitches like that so they don't have the financial harm?
    Dr. Shulkin. We spend a lot of time right now, our central 
business office spends a lot of time helping veterans work 
through these situations. Again, the VA is not dissimilar to 
what is happening in the private sector. Patients don't 
understand their bills and third-party payers are sometimes 
inappropriately billing. So in those situations, we are there 
to support the veteran. Sometimes the veteran does have an 
obligation, because it wasn't a covered service, but many 
times, we step in the middle to support the veteran. We do not 
want to see what is happening--
    Mr. Ruiz. How do you support the veterans, do you take on 
the cost?
    Dr. Yehia. If I may, I think the perfect example of this is 
ER care. And right now, because of the different rules and 
requirements that we have, a lot of veterans think they are 
eligible for that benefit, but get denied the care. And that is 
part of the reason why we wanted to tackle that--
    Mr. Ruiz. One last comment, because I have about 25 
seconds. You talk about the relationship that is important in 
terms of primary care physicians, and you are absolutely right, 
but our veterans need pain management, that primary physicians 
are not trained, they are not pain specialists. They also need 
psychiatric care.
    So I believe that that relationship, that the access or the 
criterion in which you allow a veteran to see a provider 
outside of the VA, or in the community, should not just be the 
relationship with a primary care physician, but it should be 
service-based. So if they don't have a pain specialist at that 
VA location, then they are allowed to see a pain specialist 
within the community?
    Dr. Shulkin. Yep.
    Mr. Ruiz. When is that going to happen? Does it require a 
bill, or can you guys make it happen?
    Dr. Yehia. Yeah, I think that does, I mean, the concept of 
going from the service would expand the aperture greatly for 
all those, because we don't have pain providers everywhere. So 
we can--I think we are open to having those discussions, but 
those come with significant resources.
    Dr. Shulkin. I would just add that the pain management is a 
different issue than the behavioral health. We integrate--when 
Dr. Yehia talks about primary care, we are actually talking 
about a team called our pack teams, with behavioral health 
integrated into the primary care services. Nobody does this on 
the scope that VA is doing this now. So I think that one's 
different than the pain management.
    Mr. Ruiz. Okay.
    The Chairman. Dr. Abraham.
    Mr. Abraham. Thank you, Mr. Chairman. We were fortunate 
last week to be able to be back in our districts among our 
veterans. And certainly, my study, or my county was unofficial 
and small, but I did poll my veterans, about 56 or 60. And what 
I found is what we alluded to the Chairman's statement earlier 
in this hearing, that up to 62, 63 percent of my veterans are 
still having significant wait times. And again, an unofficial, 
small study. I understand that.
    So, I guess my question, Secretary Gibson, to you, is under 
VISN 16 when Secretary McDonald was here before, we had some 
issues, that you guys said it is greatly improved, and I will 
take your word for that to a point, you know that. But are we--
and again, it may just be my lack of knowledge--are we able to 
access the VA's data as to how you figured wait times, the 
actual tactics and logistics of how you got to those numbers?
    Mr. Gibson. We would be glad to come walk through exactly 
    Mr. Abraham. I would appreciate that.
    Mr. Gibson. We would be delighted to do that.
    Mr. Abraham. I would just like to understand how your 
figures, how you get the numbers you get to?
    Mr. Gibson. We would be delighted to do that. And that 
includes figuring out whether or not emergency department 
visits are included in the average wait times. Because people 
keep handing me notes that say they are included, and I have 
been told repeatedly they are not. So we are going to figure 
that one out definitively.
    Mr. Abraham. Thank you. And Dr. Shulkin, I will ask you 
this: Will the veterans be able to choose a community care 
provider of their own, or will it be from an approved VA list?
    Dr. Shulkin. The concept here is to have strict criteria 
that are based on performance, clinical outcome measures and 
service measures.
    Mr. Abraham. So you will judge that community provider 
based on the criteria?
    Dr. Shulkin. We are going to create network.
    Mr. Abraham. Can I get a copy of those criteria?
    Dr. Shulkin. Yes, yes. This would be still in development, 
but we have developed two types of principles. One is what 
develops, what we are calling this core service, or 
foundational service, about what VA really needs to be expert 
in and what can be done in a community. And secondly, the 
specific criteria for criteria on quality and service measures.
    Mr. Abraham. And again, what I am, I guess, more interested 
in certainly from my aspect, is just the criteria part of the 
primary care, because I think this is where we started and we 
talked about specialists earlier, and you said you would need 
more approps to go that direction.
    Dr. Shulkin. Yes, sir.
    Mr. Abraham. And the other question I have is how much cost 
savings would result from setting all non-VA care reimbursement 
at the Medicare liable rate?
    Dr. Shulkin. There are some savings. I think that they are 
built into the plan. Do you recall the number?
    Dr. Yehia. So we--I don't have the number off the top of my 
head, but what we hope to do is move more towards regional 
Medicare rates, and those rates include calculations for 
graduate medical education, as you know, in geographic rural 
areas. That is our intention is to move more towards Medicare 
rates. We know we can't get there 100 percent in every locale, 
because there is going to be certain geographic location and 
certain specialties, that in order for them to partner with us, 
where the community rate is higher than Medicare. So our goal 
is to move towards--closer and closer to a standard Medicare 
rate that is regional across the country, and allow exceptions 
as necessary for local communities.
    Mr. Abraham. Thank you, Doc. My last question, should the 
emergent and urgent care expansion that the plan introduces be 
implemented? Will coverage of emergency care be available to 
veterans who are enrolled in the VA health care system, but are 
inactive, which VA currently defines as a patient who has not 
accessed VA care in 2 years. Dr. Shulkin, you are nodding your 
    Dr. Shulkin. The plan that we have proposed for you says 
that a veteran would need to have active contact with the VA 
system in the past 2 years to be eligible.
    Mr. Abraham. To be eligible for the emergent and--
    Dr. Shulkin. That is correct.
    Mr. Abraham. Okay, thanks. That is all the questions I 
have, Mr. Chairman. Thank you so much.
    The Chairman. Thank you. Ms. Titus, you are recognized.
    Ms. Titus. Thank you, Mr. Chairman. I would like to give a 
first shout-out to Ghost and the Marine Riders at the 
Leatherneck Club in Las Vegas. I rode on the back of one of 
their motorcycles in the Veterans Day Parade. This was a great 
honor for me, but also, I am no dummy, because in a parade, 
somebody's going to boo you. But when you are on the back of a 
Marine motorcycle, you are just getting a lot of this and a lot 
of this and a lot of cheers.
    Mr. Gibson. We want to see pictures. We hope they are on 
your Web site.
    Ms. Titus. That made me feel really good.
    Second, I want to thank you, Mr. Gibson, and the Secretary 
for helping us to get a director for the new hospital. That was 
very important, you did that. I am looking forward to meeting 
Ms. Kearns when she gets there on the ground and working with 
her. So thank you very much for that.
    We have heard around the room a lot of people talking about 
the confusion over the Choice Act and the community care 
programs; there are different ones, different benefits. And it 
is not just the veterans that are confused, but also the staff 
is confused. Now just about the time they get the hang of that, 
we are going to change it all over the next 5 years and have 
another new program. I want to be sure that you are building 
into your plans ways to train people and to educate the public 
so we don't have to go through this every time.
    Dr. Yehia. I will take that, that is such a great question. 
And in the actual system redesign and solutions, that first 
bucket of costs, are a lot of resources dedicated to training 
and communications. When we were developing the plan, as I 
mentioned before, we looked towards industry, but also to our 
partners at DoD and TRICARE. That was one of the big lessons 
that we learned when we sat around the table with our TRICARE 
colleagues, is over their decades experience of delivering such 
a system, the importance of educating the staff, the community 
providers and their beneficiaries on that. So some of those 
costs for training are baked in. And in that $421 million that 
we are requesting, that includes some of those exact things so 
that people--to eliminate that confusion.
    Ms. Titus. I think that would be very helpful so that 
people will know where to go, what they are getting, one 
program, and understand it. And that will be a big hurdle that 
will be overcome.
    Another thing, since this is a 5-year program, I think we 
are seeing move very rapidly, medical marijuana, in the States, 
half the States already have it. It is recommended, it is 
legal. Doctors in communities do this, issue cards. We see it 
in the MILCON bill on the Senate side, saying the VA can do it 
for maybe this year. Are you considering this, let's not get 
behind the ball again on an issue, let's get ahead of it.
    Dr. Shulkin. We would need legislative support to be able 
to consider that. Right now as you know, we are not able to 
offer that. I think that the science on this and the experience 
in the community that is happening across the country suggests 
that this is something that we should be looking at more 
carefully, and we welcome working with you on that.
    Ms. Titus. I just think it is going to be a community 
health issue. And if we are moving to more of that kind of 
service, we need to be aware of it, not put our heads in the 
sand on this issue.
    Ms. Brown. Would the gentlewoman yield for a question?
    Ms. Titus. I will yield.
    Ms. Brown. My understanding is that we in Congress passed a 
law saying that the VA doctors, even in the States that it is 
legal, they cannot administer marijuana.
    Ms. Titus. I appreciate that, and I will take my time back. 
I understand that is the case, but I also understand that it 
has been put into the MILCON bill on the Senate side for 1 year 
that in States where it is legal, the VA can't refuse to do it. 
So I don't know if that is going to be part of the compromise 
or not, but I hope it is. I am supportive of that. But either 
way, it is an issue that is moving very rapidly, and we need to 
be on top of it. I yield back.
    The Chairman. Mr. Coffman, coming from a State where 
marijuana is legal.
    Mr. Coffman. Thank you, Mr. Chairman. I think you are going 
to bring those chicken biscuits and we are going to have some 
brownies from the State of Colorado.
    Mr. Gibson, you touched on--first of all, I think this is 
moving in the right direction, but you did touch on some issues 
involving TPAs, the third party administrators. And I think 
being at a decision point whether or not you want to move that 
in-house and what the problems are. Could you, just briefly, 
touch on some of the issues, again, that you see with TPAs?
    Mr. Gibson. First of all, and we do this every single day. 
I think the guys get tired of hearing me do this. I say, guys, 
we are just going to do the right thing for veterans, and 
allows us to be the best steward of taxpayer resources. So as 
you look at all the different functions, scheduling would be a 
function, processing claims would be a function, building and 
maintaining the provider network. I am sure I am leaving some 
    So you have got all these different functions, in every 
case, we have to make a deliberate decision, do we do this 
ourselves or do we outsource it? And the criteria are just that 
simple. What is right for veterans, what allows us to deliver 
the best service to veterans, and allows us to be good stewards 
of taxpayer resources.
    So where it makes sense for us to outsource, believe me, we 
are going to head off in that direction.
    Mr. Coffman. I would encourage you not to bring the third 
party administrator functioning in, simply because I think you 
have been objective with this Committee on problems with third 
party administrators. I think we have had a problem, quite 
frankly, when issues are done internally. Sometimes we just 
don't get those reports that are accurate. My situation with 
the hospital in Aurora, Colorado, where we have been told, even 
despite the fact in 2013 there was a GAO report that said this 
hospital, and three other hospitals that were currently under 
construction, were each, hundreds of millions of dollars over 
budget, years behind schedule, that we would be told by Mr. 
Hagstrom before this Committee that everything was fine, and it 
could be built for $604 million.
    He testified in Colorado. Last year at a formal field 
hearing that it could be built for $604 million. Then all of a 
sudden, the VA loses litigation in December of last year. The 
general contractor walks off the job and says, we are not going 
to come on the job unless the VA is off the job. The Army Corps 
of Engineers steps in, does an assessment and comes up with a 
number of $1.73 billion.
    So I just think that I like the idea that there is this 
tension between yourselves and a private entity, and that 
you're objective with us in terms of the problems. Because what 
we tend to do is find out problems from whistleblowers or 
litigation in the case of the Aurora Hospital. And so, I just 
want to encourage you that whatever issues you have, make it 
work with them because I think that the problems would be much 
greater in-house, and we, quite frankly, would not be made 
aware of those problems on a timely basis.
    Dr. Shulkin. Congressman, I would just say as the Secretary 
says, as the Deputy Secretary says, and as I say, this is not 
business as usual. We have learned painfully from those 
lessons, and we are looking at every issue as they make--
    Mr. Coffman. I am sorry. God bless you for trying, but we 
get that every time, every year. Every year, there are VA 
leaders that step before us to say, it is going to be different 
now, we are going to change now, the culture is going to 
change. We got--it is newer, bigger, better, and then the 
following year, we find out it is not, newer, bigger and 
better. And the same problems exist, if not deeper. So it is 
what it is, and I think you mitigate that by using things like 
a third party payer, you know. I think that arm's length 
distance between them is positive. And I think make it work, 
because I certainly will not support expanding the VA 
bureaucratic footprint after the experiences we--I have 
observed being a Member of this Committee. Mr. Chairman, I 
yield back.
    The Chairman. Thank you very much. Mr. McNerney.
    Mr. McNerney. I thank the Chairman, I thank the panel for 
having a welcome positive hearing today. The thing that I am 
concerned about is we have a plan to consolidate the purchase 
care programs. And maybe I missed your testimony earlier on 
that, but what sort of--what is the basis for believing that 
this is going to be a better provider than what we already have 
or what has already been tried in the past? Is there a 
statistical basis? Is there a model that you have seen that has 
made this transition? What makes you think that this is going 
to be a better program?
    Dr. Yehia. So thank you. I think that is a great question. 
I think the goal here was that we have a number of these 
different programs, this patchwork of different community care 
programs. We want to move more towards a standard, what we are 
calling a high performing network. And so, we think this is 
good because this is where health care industries are moving. 
We have learned lessons from our Federal partners, such as DoD 
and TRICARE. And at the end of the day, we want to create that 
seamless connection to a complementary network in the community 
that veterans can access. And we are basing that on things that 
have been demonstrated well in the community, in the private 
    Mr. McNerney. Has there been any coordination with the DoD 
in terms of transferring data or care information so that 
veterans that are recently out don't have to go through the 
huge rigmaroles?
    Dr. Yehia. Yeah, when we first started this effort, we 
worked very closely with our DoD partners. Again, recognizing 
them as having many similarities to VA, they operate TRICARE. 
And so, we sat down with them on multiple occasions to learn 
about lessons learned, best practices and we continued to work 
with them. The concept of them vetting some of our TPAs in our 
medical centers, that was something that TRICARE did. And so we 
are using a lot of those lessons learned from them.
    Mr. McNerney. I mean, one of the biggest concerns we have 
is the transition between the DoD and the VA. I have often 
thought that we just need to have a czar that can tell people 
what to do instead of having bickering back and forth, but--so 
you are saying, hey, this is actually happening, we don't need 
to have a big gun that is going to make this happen. Is that 
    Dr. Shulkin. Yes, that is correct. We are--DoD has been 
very integral in support of our move towards this type of new 
plan. And we have several oversight Committees that we jointly 
chair between DoD and VA, where this is a standing agenda item, 
we are working in between meetings, but also have oversight 
over this. And actually, I think, from my perspective, this is 
going in a very positive direction.
    Mr. Gibson. I will tell you, we all spend a lot of time out 
in the field. There are countless examples of close 
collaborative work locally between VA facilities and DoD 
medical treatment facilities, where they are just doing 
amazing. I was in Charleston, South Carolina, Baligh and I both 
were down there last week. I went out to Goose Creek where we 
jointly operate a clinic with the Navy. And one of the things 
we were able to do is jointly fund the purchase of an MRI. What 
you find is you have got a DoD doctor, you have got VA med 
techs that are running the facility day in and day out. And on 
2 days of the week, you will find DoD patients coming in; on 2 
days of the week you will find VA patients coming in.
    It is that kind of close and collaborative relationship, 
and it is happening all over the country. The one other issue 
that gets at this VA-DoD collaboration that I sort of sense you 
are alluding to, has to do with the exchange of health 
information. And before you arrived, the Chairman has agreed to 
buy the chicken and biscuits for us and come over and do a demo 
for the Members of exactly how we are exchanging information 
today, day in and day out.
    Mr. McNerney. That was going to be my next comment is how 
useful would it be for the Members of the Committee to actually 
see that. So Chairman, you are ahead of me. I congratulate late 
you. I yield back.
    The Chairman. Thank you. Mr. Huelskamp, you are recognized.
    Mr. Huelskamp. Thank you, Mr. Chairman. I appreciate the 
gentleman for joining us here today some very exciting 
questions and comments. I have some follow-up I would like to 
    First, I did have a town hall in Colby, Kansas, which is 
way up in northwest Kansas. And a veteran was actually leaving 
that town hall, was going to drive to Aurora, Colorado, to pick 
up a hearing aid. That is 227 miles, one-way drive. Gentleman, 
there is a provider in Colby, Kansas, that you won't approve. I 
mean, Choice is supposed to fix that. Telling him to drive that 
far for something he should drive two or three blocks is 
    Mr. Gibson. We agree completely. It shouldn't happen.
    Mr. Huelskamp. It shouldn't happen. And that is what we 
were hoping to fix. Couple of questions on that. But first, on 
the aspirational document, it certainly is aspirational, 
especially if you look at the cost. What is the 3-year cost, 
your estimate to implement this plan?
    Mr. Gibson. As I pointed out in my opening statement, the 
essential costs that we are focused on right now is actually 
the cost of the consolidation itself. The much larger numbers 
have to do with anticipated, increased reliance. And the other 
module, if you will, which has to do with opening the aperture 
on access to emergency care and urgent care, which we believe 
is really--we are not serving veterans well today with the 
current statutory approach that we have to those aspects of 
    Mr. Huelskamp. And I agree. By the way, you did pay that 
veteran to drive the 454 miles, that is just a minor savings, 
but he also did that same drive just to get the appointment.
    Mr. Gibson. Let me make just one really quick comment, 
because we started working this over a year ago where we 
weren't able to use audiologists in the communities because 
they weren't able to access our advantageous contract for 
hearing aids. And what we have done is we have changed that. We 
fixed it so that now an audiologist in the community can 
actually access our advantageous contracts for purchase of 
hearing aids. This, what you are describing should--absolutely 
should not be happening.
    Mr. Huelskamp. Yeah, I agree. But on the budget, if I did 
the figures correctly in pulling the Choice out of that, which 
is another question, if I read correctly, it is about a $10 
billion, 3-year cost for implementation moving forward on this 
plan, is that rough and ready figures?
    Mr. Gibson. Again, what you are referring to are the costs 
associated with increased reliance, as well as the cost 
associated with opening the aperture.
    Mr. Huelskamp. Well, I just wanted to make sure, because--
    Mr. Gibson. The critical issue, at this point, has to do 
with consolidating these seven or eight different programs into 
a single channel for community care that veterans and 
    Mr. Huelskamp. Oh, I understand the approach here, and I 
have some follow-up questions on that. But not even including 
the extension of Choice, I think I see the figures is 10 
billion in 3 years, so if I am wrong on that, please confirm 
that. So it is certainly an aspirational document. There is not 
going to be $10 billion we are throwing out there for this.
    But one thing I want to ask strictly for the authors of the 
report, I mean, you only had 2 months to put this together. Can 
you lay this over top of the 4,000-page independent assessment 
that said we have a leadership crisis here? How are you going 
to fix--I think you have to fix the leadership crisis before 
you even talk about implementing this massive change. It is 
very big. So gentlemen, if you can provide some insight.
    Mr. Dalpiaz. Well, I think I will leave the leadership 
question to the Deputy. What we did with the independent 
assessment is we pulled out each one of the items that related 
to community care. So anything that looked like it would line 
up, with our proposal, we literally took word for word from a 
document, incorporated it and assured that we are covering it, 
and that it was sensitive to the independent assessments. The 
leadership part I will leave to others.
    Dr. Shulkin. Yeah. Just very briefly, two quick things. The 
amount of money that we need to get this going to consolidate 
care in the community is $421 million. The other parts of it 
are things that--
    Mr. Huelskamp. That is not what is in the numbers. The 
incremental cost of implementing its consolidation plan, just 
one portion is $400 million to $800 million annually. That over 
3 years is about $2 billion just for the incremental cost of 
implementation. So if you could clarify that for the Committee, 
I mean, these are your numbers.
    Dr. Shulkin. Right, right. In fiscal year 2016, it will be 
$421 million incrementally. And those systems then would 
essentially carry into the future years. You are right.
    The emergency care that the Deputy referred to is, has a 
separate price tag that is decided upon. That could be decided 
not to proceed with, or that could be decided to proceed with, 
and the increased reliance has a separate price tag. That means 
when you make the system more useable, we think more veterans 
will come into the system.
    In terms of the leadership issue, you are absolutely 
correct, Congressman; this is our critical factor. We do not 
have a hope of implementing this plan without the correct 
leadership, and we are focused on getting leaders in to fill 
our medical center positions, our regional positions and our 
central positions, including finding a Deputy Under Secretary 
that will oversee plan who has the experience in managed care 
and population health to make this successful.
    Mr. Huelskamp. Is this the new Under Secretary position 
that you proposed to create?
    Dr. Shulkin. We have submitted an organizational chart to 
you that this is a new position, because VA currently does not 
have this level of competency in a senior executive position 
who knows how to implement this plan.
    Mr. Huelskamp. Hopefully, we might have a second round, Mr. 
Chairman. I apologize.
    The Chairman. Ms. Brown.
    Ms. Brown. Thank you, Mr. Chairman. First of all, let me 
just say that as far as the leadership team in front of me, I 
am impressed. In particular, with the medical leadership with 
the graduate from the University of Florida.
    Now on for my questions. I understand that TRICARE had 2-1/
2 years for preparation before it rolled out its program. We 
had less than what, 2 months? If you had more time, I mean, we 
insisted that you roll it out in this time period, we put in 
some new rules and regulations, particular as pay to the 
providers. Can you give me some feedback on that?
    Mr. Dalpiaz. Having the opportunity now to look back on 
those 60 days that someone had to write requirements, we 
learned a lot of lessons. One of which is, in the future, we 
probably wouldn't contract out the customer service portion of 
what we do. We did that. And when we talk about the 
requirements for what a future network might look like, that 
really is coming from not only the lessons we learned in the 
last year, and last year and a half. It is really TRICARE 
lessons as well as you point out.
    So one of the requirements that you see are things that we 
envision in the future network based on our experience and 
things that we would have done much differently if we had more 
than 60 days to stand this up.
    Ms. Brown. In the draft agreement legislation you submitted 
to the Subcommittee on Health, you discussed requiring 
providers to submit medical records to the VA. Will payments to 
the provider and return of records be linked? There has been a 
source of controversy for current providers under the Choice 
Program, and, of course, it is about timely payment.
    Dr. Shulkin. Congresswoman, we recognize that the timely 
payment issue to our providers is a critical issue, because it 
could threaten access to veterans. And coming from the provider 
side, I am very sensitive to providing a service and not 
getting paid. So we are going to be encouraging two things of 
our providers. The reason why we don't perform as well as we 
should on timely payments is because only 40 percent of our 
payments are received electronically, and the industry standard 
is above 95 percent.
    Secondly, we are adjudicating 100 percent of our claims 
when the industry standard is more like 5 percent. So we want 
to fix both of those and we are going to be reaching out to the 
providers. We saw the article recently about the Florida 
providers and the amount that is owed to them. We are going to 
be reaching out to them to ask them to send us their 
information electronically, and delink some of the requirements 
for medical record documentation. We do need to get the 
documentation back to provide good continuity of care, but we 
want to be providing prompt payment to our providers.
    Ms. Brown. When we collapse the various programs and, you 
know, it has been a lot of discussion about the Choice Program 
and the program that we had in the community for years, but I 
think it is a difference in the payment, one program over 
another; what will this plan be for the future?
    Dr. Yehia. So, that is exactly right. When we looked at all 
the different programs, they all had different eligibility 
criteria, different payment rates for providers, different 
rules that they have to sign up to work with us. So we are 
trying to move more towards a uniform standard approach.
    I think as it relates to payment, we want to move towards 
industry standards, which, in many areas, is Medicare, and so 
those are the regional local Medicare rates. They take into 
account if you are living in a very rural area, or have a 
training program. And so this is our intention, is to move 
towards that standard payment, with the caveat being that in 
some locales, like Alaska or highly, highly rural areas, or 
certain specialties, we might have to go higher than the 
Medicare rate. But the standard we want to move to is towards 
    Ms. Brown. Mr. Chairman, I yield back. Are we going to have 
a second round?
    The Chairman. Thank you very much. We are going to do a 
second round of questions, if I can. I may deviate just a 
little bit from the purpose of the hearing.
    But, Mr. Secretary, how much money remains in the Choice 
fund, and what is the current estimated time of depletion of 
the current funds?
    Mr. Gibson. There is currently, in the 802 section of 
funds, about $6 billion roughly. And a rate at which we 
extinguish that will be very much a function of care in the 
community utilization during fiscal year 2016.
    The Chairman. Do you expect that it will be depleted by the 
end of fiscal year 2016?
    Mr. Gibson. I think that there is a chance it could be. We 
have got about $9 billion in care in the community budget in 
our core budget for care in the community for 2016. And so, as 
you look at current run rates, we actually spent over 10 in 
2015, but there was an awful lot of ramp-up that happened over 
the course of the year. So we could potentially find ourselves 
exhausting the remaining $6 billion. But based on the numbers I 
see right now, I think it is less likely that we would.
    The Chairman. Okay. I asked the question because on a--in a 
hearing on the 25th of June, you stated, and I quote, 
``Referring to hepatitis C anti- and viral-infected veterans to 
the Choice Program is not the best model to provide care for 
taxpayers or veterans,'' end quote. And we infused a large 
amount of money to help you with your capacity. You said you 
had the capacity internally to handle that. But I have been 
told now that VA has reduced new treatment starts to about 300 
per week, and it is treating only those patients with advanced 
liver disease. So all the veterans that are seeking the hep C 
treatment are being pushed outside to Choice. And I want to 
know if that is a true statement. And if so, why has the 
guidance and the model from care from HCV changed from 
    Mr. Gibson. Yeah, first of all, we appreciate allocating 
the $500 million that you did to allow us to pay for the 
pharmaceuticals. We did dramatically accelerate starts during 
that period of time and we are able to get--I am not going to 
remember the number off the top of my head--a very large number 
of veterans started before the end of year, expending somewhere 
over $400 million worth of the $500 million that was allocated.
    I suspect that part of what has happened there is that we 
cleaned out some of the pipeline. We basically had veterans 
that were in the queue to receive that care and that were 
eligible for the care, and that basically, we started getting 
them that care.
    I also know that the funds, budgeted funds for hep C in 
2016 are substantially, very substantially less than what we 
had allocated and spent during 2015. And that does create a 
situation where we have got to ensure that we don't get ahead 
of ourselves in terms of spending those funds.
    The Chairman. And if I might, Ms. Titus talked about a 
parochial issue, or Ms. Kuster, I think it was, a minute ago. I 
have one too, but I have a sneaking suspicion it is not just to 
the first Congressional district. I had a veteran come up to me 
at a ceremony on Saturday that said that he had been scheduled 
for a surgery at a VA facility, and he was called on the 
Tuesday of that week, and was told that VA didn't have any 
money in order to perform that surgery, and that he would have 
to be put in the Choice Program which would delay his surgery.
    So my question, I guess, is twofold. Number one, why in the 
world would anything like this ever occur? And number two, it 
appears to me that there may be facilities that are protecting 
their internal funds by pushing folks out into Choice so that 
they will have those dollars to utilize them. This was an 
elderly veteran. We have since talked to him and gotten the 
laydown as to actually what was said. But can you explain why 
anybody would say VA had no money?
    Mr. Gibson. Sure. Well, no, I can't explain that. Please 
ask John to let me know--give me some particulars--I was 
looking for him, but I don't see him--oh, there you are, had 
your head down--to give me some information on the particular 
veteran so that we can follow-up specifically and make sure 
that that veteran gets the care they need.
    Secondly, I cannot conceive of why we would say that we 
don't have any money to perform that surgery inside VA. So that 
makes absolutely no sense to me.
    Third, I would tell you, as we look at October obligations, 
total obligations in October for care in the community exceeded 
$1 billion. Only $140 million of those were for Choice. I can't 
imagine why we would be telling a veteran, you know, you have 
got to go outside for Choice instead of us providing that care 
inside, or either with another community provider. It makes no 
    The Chairman. Thank you. Ms. Brownley.
    Ms. Brownley. I don't have any further questions, but I 
just wanted to make a quick apology, because I made the common 
mistake in my earlier comments of calling TriWest, TRICARE. So 
I wanted to apologize to TriWest. I presume everybody 
understood what I was saying because nobody corrected me until 
my staff, after I finished, said I kept saying TRICARE instead 
of TriWest so I wanted to apologize. Thank you, Mr. Chairman.
    Mr. Gibson. Thank you. I know Dave appreciates that.
    The Chairman. Mr. Huelskamp.
    Mr. Huelskamp. Hopefully they will be short here. If I 
might make a request following up on the gentleman that wrote 
the report. Would you go back and read the independent 
assessment and provide some direction compared to how you can 
implement the Under Secretary as well. Something in writing so 
I can wrap my arms around this. And appreciate the Chairman's 
questions about the funds left in Choice. I wouldn't want to 
run--run out of money with that at a very critical time. 2016 
becomes--every 4 years, becomes kind of a silly season around 
here, and so I appreciate the reference to that.
    But to follow-up with the gentleman that talks about moving 
to the Medicare reimbursement rates, which is perfect. That is 
all my hospitals, and we have 70 of them are looking for, and 
the independent providers. Medicare audiology obviously doesn't 
work well, different rate structure. But what bothers me is 
requiring these providers and dozens of hospitals to go through 
a different certification system.
    Why is the Medicare certification system, which has been 
around for decades and has its problems, but it is there, they 
are qualified for Medicare. And by the way, these hospitals 
serve more veterans than you all do, those that are outside the 
system. So explain why we just can't use all the Medicare 
certification system, and save all the problems and move on?
    Dr. Yehia. Well, I agree with you. I think what we want to 
do is move more towards that industry standard. I think two 
points there: One in terms of rates; and two, how we partner 
with providers. So the concept of provider agreements, again, 
going back to that. We have--a lot of that is based, and the 
word ``provider'' is based on Medicare. And so it is how we can 
simply partner with our community providers to be able to 
deliver care to veterans without going through a complicated 
contracting process. That is exactly what we are looking to do.
    And when we think of credentialing, the plan talks about 
moving to standardized credentialing that everybody else does. 
So we don't want to require anything--we don't want it to be 
burdensome for these critical community providers that we need 
to partner with to deliver care to veterans.
    Mr. Huelskamp. Currently, there is a separate credentialing 
process or just VA compared to Medicare?
    Dr. Yehia. Currently, there is different credentialing 
rules for the different programs. So when the Choice Act was 
written into law, there was actually various credentials that 
we have to have in order to work with those providers. The 
Committee was able to expand some of those eligibilities to 
include, like, Medicare payments and--or Medicare providers and 
others. So some of those were Medicaid providers and others. So 
some of those have been, are in statute or regulation. So if we 
are looking toward moving towards that standard, we might need 
your help to change some of these laws so that they are 
consistent with those standards.
    Mr. Huelskamp. I don't remember those restrictions being in 
there. That was my outcome. That would save us all some time, 
trouble, and money, and folks driving 227 or 400 miles. That is 
what we are aiming at, so I appreciate your recognition of 
that. So I have--again, 70 community hospitals could tell you, 
we have already credentialed and the payment agreement is--
understood. I mean, if you can tie into the Medicare rates, I 
think you solved about 50 percent of the problems for these 
providers and for their veterans. So I appreciate that, and 
appreciate the response. And if you put this in writing as 
well, so I can understand that, Mr. Chairman. So thank you for 
the time.
    The Chairman. Ms. Brown, do you have any further questions?
    Ms. Brown. Just a comment. With the change of the 
presidential administration in 18 months, and the turnover of 
higher level employees in the VA, are you concerned about 
starting the consolidation program, and then having it stall? 
And just, I have been listening to some of the candidates speak 
and they clearly don't have any understanding about VA's 
operation, and, I mean, comments candidates make, someone has 
been in an emergency room waiting to be seen for 8 hours. Bull. 
So can you respond to that?
    Mr. Gibson. I certainly--I would love to. And I would tell 
you two different thoughts here: Number 1, what we are trying 
to do is to lay out a path that has been developed 
collaboratively with Congress, with VSOs, with the provider 
community, so that this winds up being something of an 
inexorable direction that we want to head for care in the 
    The second thing that it would offer up, I think one of the 
vital roles that this Committee can play is helping to ensure 
some continuity of effort across the administrations. So as we 
work together on developing some of these solutions, having 
this Committee, and all of Congress frankly, Senate 
Subcommittees, as a collaborative partner in this process, it 
gives you an investment in the direction that we are taking so 
that there is some expectation that that continues in the 
future administration.
    Ms. Brown. I agree 100 percent. This Committee that I've 
been on for 23 years, has always been very bipartisan. I mean, 
when veterans go to fight, no one asks them what party, you 
know, Democrat, Republican, or Independent. And, of course, I 
think that Congress, you know, for many years, we did not 
adequately fund the VA. And I am glad that we are now 
soldiering up. I like that word. I learned it last week, and I 
am using it. And we need to do our part. So any final comments?
    Mr. Gibson. We are trying to do our best to soldier up too. 
    Ms. Brown. Mr. Chairman, I yield back.
    The Chairman. Thank you, Ms. Brown, very much. Thank you to 
the witnesses for being here today. We appreciate the effort 
that you are putting into this consolidation program. We know 
it is moving in the right direction. There are many, many 
moving parts. We will have more questions, I am sure, as the 
process continues on. But I would ask unanimous consent that 
all Members would have 5 legislative days with which to revise 
and extend their remarks, and add any extraneous material. 
Without objection, so ordered. With that, this hearing is 

    [Whereupon, at 12:31 p.m., the Committee was adjourned.]

                           A P P E N D I X


                 Prepared Statement of Chairman Miller
    Thank you all for joining us for today's oversight hearing 
entitled, ``Choice Consolidation: Assessing VA's Plan to Improve Care 
in the Community.''
    In late July, Congress authorized the Department of Veterans 
Affairs (VA) to use a substantial portion of the Choice program funds 
to cover the Veterans Health Administration's multi-billion dollar 
budget shortfall.
    In turn, VA was required to submit a plan to the Committee 
detailing how VA would consolidate and improve the many fractured 
programs and authorities that the Department currently uses to refer 
veterans to non-VA providers.
    We are here today so that VA can present this plan to the Committee 
and, together, we can measure its merits and challenges.
    Non-VA care - or, Care in the Community, as VA now calls it - is an 
increasingly vital component of the VA health care system.
    Each month, veterans, survivors, and certain dependents of veterans 
receive approximately one million appointments - more than twenty 
percent of all the appointments VA provides - from doctors and nurses 
and other health care professionals in community hospitals and clinics 
outside of the Department's walls.
    Allowing veterans to see these providers is vital to ensuring 
timely and convenient access to care.
    And, I suspect that, as the veteran population continues to grow in 
both age and number and as the health care landscape continues to 
shift, the need for non-VA providers to supplement - and please note 
that I said supplement, not supplant - the care that VA provides in-
house will only continue to grow.
    But, the success of VA's Care in the Community program is hampered 
by inconsistent and competing eligibility requirements, business 
processes, and reimbursement rates across the seven methods that VA 
currently uses to refer veterans to outside providers.
    As a result, non-VA care as we know it today has become 
unmanageable and unsustainable.
    The success of the VA health care system over the next several 
years will depend in large part on VA's ability to consolidate these 
seven disparate methods into a single, coordinated program that is easy 
for veterans and community providers to understand and buy into and 
easy for VA employees to administer and manage.
    This is no easy task.
    It will require us to have some difficult conversations about the 
purpose of the VA health care system and what it should and feasibly 
can achieve.
    It will also require us to examine VA's massive physical footprint 
and make decisions about the future of facilities that once served a 
great purpose but may no longer be benefiting our veterans as they 
    The plan that the Department submitted in late October to 
accomplish non-VA care consolidation and take the first steps toward 
building the VA healthcare system of tomorrow offers a promising but 
still poorly defined vision of a future ideal state of VA care that 
offers little in the way of concrete details, timelines, or goalposts - 
leaving us blind as to how VA intends to get from where we are now to 
where we all know VA needs go next.
    I am hopeful that the testimony and responses that we will hear 
this morning will shed some much-needed light on how VA intends to 
transform the fractured collection of non-VA programs and authorities 
that we have today into the coordinated system of care that our 
veterans truly deserve.
    I am grateful to the Deputy Secretary, the Under Secretary for 
Health, and the two leaders of VA's consolidation effort for being here 
this morning to present the Department's proposal and I now recognize 
Ranking Member Brown for any opening statement she might have.

              Prepared Statement of Honorable Sloan Gibson
    Good morning, Chairman Miller, Ranking Member Brown, and Members of 
the Committee. Thank you for the opportunity to discuss the Department 
of Veterans Affairs' (VA's) proposal to consolidate VA's care in the 
community programs to improve access to health care. I am accompanied 
today by Dr. David Shulkin, Under Secretary for Health; Dr. Baligh 
Yehia, Assistant Deputy Undersecretary for Health for Community Care; 
and Mr. Joseph Dalpiaz, Network Director, Veterans Integrated Service 
Network 17.
    VA is committed to providing Veterans access to timely, high-
quality health care. In today's complex and changing health care 
environment, where VA is experiencing a steep increase in demand for 
care, it is essential for VA to partner with providers in communities 
across the country to meet Veterans' needs. To be effective, these 
partnerships must be principle-based, streamlined, and easy to navigate 
for Veterans, community providers, and VA employees. Historically, VA 
has used numerous programs, each with their own unique set of 
requirements, to create these critical partnerships with community 
providers. This resulted in a complex and confusing landscape for 
Veterans and community providers, as well as VA employees.
    Acknowledging these issues, VA is taking action as part of an 
enterprise-wide transformation called MyVA. MyVA will modernize VA's 
culture, processes, and capabilities to put the needs, expectations, 
and interests of Veterans and their families first. Included in this 
transformation is a plan for the consolidation of community care 
programs and business processes, consistent with Title IV of the 
Surface Transportation and Veterans Health Care Choice Improvement Act 
of 2015 (also known as the VA Budget and Choice Improvement Act) and 
recommendations set forth in the Independent Assessment of the Health 
Care Delivery Systems and Management Processes of the Department of 
Veterans Affairs (Independent Assessment Report) that was required by 
Section 201 of the Veterans Access, Choice, and Accountability Act of 
2014 (The Choice Act).
    This document provides a plan for how VA could consolidate all 
purchased care programs into one New Veterans Choice Program (New VCP). 
The New VCP will include some aspects of the current Veterans Choice 
Program (Section 101 of PL 113-146, as amended) and incorporate 
additional elements designed to improve the delivery of community care. 
The 10 elements of this plan, as set forth in law, are listed to the 
right. With the New VCP as described in this plan, enrolled Veterans 
will have greater choice and ease of use in access to health care 
services at VA facilities and in the community.

    VA Budget and Choice Improvement Act Legislative Elements

    1. Single Program for Non-Department Care Delivery
    2. Patient Eligibility Requirements
    3. Authorization
    4. Billing and Reimbursement Process
    5. Provider Reimbursement Rate
    6. Plan to Develop Provider Eligibility Requirements
    7. Prompt Payment Compliance
    8. Plans to Use Current Non-Department Provider Networks and 
    9. Medical Records Management
    10. Transition Plan

    The New VCP will clarify eligibility requirements, build on 
existing infrastructure to develop a high-performing network, 
streamline clinical and administrative processes, and implement a 
continuum of care coordination services. Clear guidelines, 
infrastructure, and processes to meet VA's community care needs will 
improve Veterans' experience and access to health care. VA's future 
health care delivery network will address gaps in Veterans' access to 
health care in a simple, streamlined, effective manner and will 
continue to support VA's missions of research and education.
    VA is continuing to examine how the Veterans Choice Program 
interacts with other VA health programs, including the delivery of 
direct care. In addition, VA is evaluating how it will adapt to a 
rapidly changing health care environment and how it will interact with 
other health providers and insurers. As VA continues to refine its 
health care delivery model, we look forward to providing more detail on 
how to convert the principles outlined in this plan into an executable, 
fiscally-sustainable future state. In addition, we plan to receive and 
potentially incorporate recommendations from the Commission on Care and 
other stakeholders.
    VA anticipates improving the delivery of community care through 
incremental improvements as outlined in this plan, building on certain 
provisions of the Veterans Choice Program. The implementation of these 
improvements requires balancing care provided at VA facilities and in 
the community, and addressing increasing health care costs. VA will 
work with Congress and the Administration to refine the approach 
described in this plan, with the goal of improving Veteran's health 
outcomes and experience, as well as maximizing the quality, efficiency, 
and sustainability of VA's health programs.

    The Path Forward

    The design of the New VCP (Legislative Element 1) is based on 
feedback from Veterans, Veteran Service Organizations (VSOs), VA 
employees, Federal stakeholders, and best practices. VA's plan centers 
on five functional areas. Within each functional area are key points to 
enable Veterans to receive timely and high-quality health care.
    1. Veterans We Serve (Eligibility) - This area addresses 
overlapping community care eligibility requirements, as directed in 
Legislative Element 2. Streamlining and consolidating these 
requirements will allow Veterans to easily understand their eligibility 
for community care and access community care faster. VA and community 
providers will have significantly lower administrative burdens, which 
have often impeded timely delivery of Veterans' care. This area 
includes the following possible enhancements:
      Establish a single set of eligibility criteria for all 
community care based on geographic access/distance to a VA primary care 
provider (PCP), wait-time for care, and availability of services at VA.
      Expand access to emergency treatment and urgent community 
    2. Access to Community Care (Referral and Authorization) - This 
area addresses the complicated process of community care referrals and 
authorizations, as directed in Legislative Element 3. VA will optimize 
the referral and authorization systems and supporting processes, 
enabling more rapid exchange of information to support timely delivery 
of care. This area includes the following possible enhancements:
      Streamline business rules in referral and authorization 
to minimize delays in delivering care and eliminate unnecessary 
administrative burdens.
      Improve VA visibility into health care utilization in the 
    3. High-Performing Network - This area leverages components of 
existing non Department networks and identifies new community partners 
to build a high performing network, as outlined in Legislative Element 
8. Addressing issues of provider eligibility requirements and 
reimbursement rates, as outlined in Legislative Elements 5 and 6, will 
be key to this approach. This area includes the following possible 
      Develop a tiered, high-performing provider network to 
better serve Veterans, consisting of the following categories:
        --VA Core Network: Includes existing relationships with high-
quality health care assets in the Department of Defense (DoD), Indian 
Health Service (IHS), Federally Qualified Health Centers (FQHC), Tribal 
Health Programs (THP), and academic teaching affiliates.
        --External Network: Includes commercial community providers and 
distinguishes Preferred providers based on quality and performance 
      Move towards value-based payments in alignment with 
industry trends.
      Implement productivity standards to better manage supply 
and demand.
      Develop dedicated customer support to improve Veteran and 
community provider experiences.
    4. Care Coordination - This area focuses on improving medical 
records management and strengthening existing care coordination 
capabilities, as directed by Legislative Element 9. Improving medical 
records management will support a high-performing network and enable 
better decision making through analytics. It will also support more 
effective care coordination and improved Veteran health care outcomes. 
This area includes the following possible enhancements:
      Offer a continuum of care coordination services to 
Veterans, tailored to their unique needs.
      Use analytics to improve Veterans' health by guiding them 
to personalized services and tools (e.g., disease management, case 
      Enable community providers to easily exchange health 
information with VA.
      Design customer service systems to help resolve inquiries 
from Veterans and community providers regarding care coordination.
    5. Provider Payment - This area focuses on improving billing, 
claims, and reimbursement processes, as well as Prompt Payment Act 
(PPA) compliance for purchasing care, as directed by Legislative 
Elements 4, 5, and 7. This area includes the following possible 
      Implement a claims solution which is able to auto-
adjudicate a high percentage of claims, enabling VA to pay community 
providers promptly and correctly.
      Move to a standardized regional fee schedule, to the 
extent practicable, for consistency in reimbursement.
    The New VCP will use a system of systems approach to enhance these 
five functional areas as part of the larger VA health care 
transformation. This approach stresses the interactive, interdependent, 
and interoperable nature of external and internal components within 
VA's health care delivery system. The New VCP includes enhancements to 
the following systems, which will have a positive impact on VA and the 
greater Veterans' health ecosystem:
      Integrated Customer Service Systems - Provide a reliable, 
easy-to-use way for Veterans and community providers to get their 
questions answered, provide feedback, and submit inquiries.
      Integrated Care Coordination Systems - Establish a clear 
process for Veterans to seamlessly transition between VA and community 
care, supporting positive health outcomes wherever the Veteran chooses 
to receive care.
      Integrated Administrative Systems (Eligibility, Referral, 
Authorizations, and Billing and Reimbursement) - Simplify eligibility 
criteria so Veterans can easily determine their options for community 
care, streamline the referral and authorization process to enable more 
timely access to community care, and standardize business processes to 
minimize administrative burden for community providers and VA staff.
      High-Performing Network Systems - Enable the development 
and maintenance of a high-performing provider network to maximize 
choice, quality, and value for Veteran health care.
      Integrated Operations Systems (Enterprise Governance, 
Analytics, and Reporting) - Define ownership and management of 
community care at all levels of VA, local and national, and institute 
standard metrics to drive high performance and accountability across 
    The New VCP plan envisions a three-phased approach to implement 
these changes to support improved health care delivery, as outlined in 
the Transition Plan (Legislative Element 10). This will deliver 
incremental improvements while planning for a future state consistent 
with evolving health care best practices. The first phase will include 
development of the implementation plan and will focus on the 
development of minimum viable systems and processes that can meet 
critical Veteran needs without major changes to supporting technology 
or organizations. Phase II will consist of implementing interfaced 
systems and community care process changes. Finally, Phase III will 
include the deployment of integrated systems, maintenance and 
enhancement of the high-performing network, data-driven processes, and 
quality improvements.
    Executing the New VCP will not be possible without approval of 
requested legislative changes and requested budget. The primary 
objectives of the legislative proposal recommendations are to make 
immediate improvements to community care, establish a single program 
for community care, and implement necessary business process 
improvements. The budget section of this plan is divided into three 
parts: (1) System Redesign and Solutions; (2) Hospital Care and Medical 
Services, including Dentistry; and (3) Expanded Access to Emergency 
Treatment and Urgent Care. System Redesign and Solutions include 
enhancements to the referral and authorization process, care 
coordination, customer service, and claims processing and payment. 
These changes are expected to improve the Veteran experience with 
community care. As a result, this may increase Veterans' reliance on VA 
community care, leading to increased Hospital Care and Medical Services 
costs. Expanded Access to Emergency Treatment and Urgent Care is 
important in providing Veterans with appropriate access to these 
services, but is severable from other aspects of the Program and could 
be implemented separately.
    The incremental costs of the enabling System Redesign and Solutions 
for the New VCP are estimated to range between $400 and $800 million 
annually during the first three years. VA's community care programs 
(hospital care, medical services, and long-term services and supports) 
prior to the enactment of The Choice Act, cost roughly $7 billion per 
year. Continuing the Veterans Choice Program, as amended, beyond its 
current expiration will cost approximately an additional $6.5 billion 
per year, assuming no changes are made to its current structure 
(eligibility, referral and authorization, provider reimbursement, 
etc.). Improvements to the delivery of community care as described in 
this plan would require additional annual resources between $1.5 and 
$2.5 billion in the first year and are likely to increase thereafter. 
The proposed expanded access to emergency treatment and urgent care 
requires an additional estimated $2 billion annually. Refer to the 
estimated costs and budgetary requirements (Section 5) and legislative 
proposal recommendations (Section 6) for additional information.
    The estimated costs reflected in this report represent the funding 
required to maintain VA's delivery of community care at current levels, 
as well as incorporating the considerations outlined in this plan. 
Additional changes or expansion of the program beyond the scope 
outlined in this report could significantly increase the projected 
    VA cannot reach the future state alone. Ongoing partnership with 
Congress will be critical to addressing the budgetary and legislative 
requirements needed for this important transformation, including 
outstanding decisions on aspects related to sustainability and cost-
sharing. The support and active participation of Congress, Federal 
partners, VA employees, VSOs, and other stakeholders are necessary to 
achieve more efficient, effective, and Veteran-centric health care 


    Transformation of VA's community care program will address gaps in 
Veterans' access to health care in a simple, streamlined, and effective 
manner. This transformation will require a systems approach, taking 
into account the interdependent nature of external and internal factors 
involved in VA's health care system. MyVA will guide overall 
improvements to VA's culture, processes, and capabilities and the New 
VCP will serve as a central component of this transformation. The 
successful implementation of the New VCP will require new legislative 
authorities and additional resources and will position VA to improve 
access to care, expand and strengthen relationships with community 
providers, operate more efficiently, and improve the Veteran 
    Thank you. We look forward to your questions.