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


                 ASSESSING VA'S ABILITY TO PROMPTLY PAY
                            NON-VA PROVIDERS

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

                                  HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

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

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                        WEDNESDAY, JUNE 3, 2015

                               __________

                           Serial No. 114-24

                               __________

       Printed for the use of the Committee on Veterans' Affairs
       
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                     COMMITTEE ON VETERANS' AFFAIRS

                     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
AMATA COLEMAN RADEWAGEN, American 
    Samoa
MIKE BOST, Illinois
                       Jon Towers, Staff Director
                Don Phillips, Democratic Staff Director

                         SUBCOMMITTEE ON HEALTH

                    DAN BENISHEK, Michigan, Chairman

GUS M. BILIRAKIS, Florida            JULIA BROWNLEY, California, 
DAVID P. ROE, Tennessee                  Ranking Member
TIM HUELSKAMP, Kansas                MARK TAKANO, California
MIKE COFFMAN, Colorado               RAUL RUIZ, California
BRAD R. WENSTRUP, Ohio               ANN M. KUSTER, New Hampshire
RALPH ABRAHAM, Louisiana             BETO O'ROURKE, Texas

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.
                            
                            
                            C O N T E N T S

                              ----------                              

                        Wednesday, June 3, 2015

                                                                   Page

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

                           OPENING STATEMENTS

Dan Benishek, Chairman...........................................     1
Julia Brownley, Ranking Member...................................     2

                               WITNESSES

Asbel Montes, Vice President of Reimbursement and Government 
  Affairs, Acadian Ambulance Service.............................     4
    Prepared Statement...........................................    33
Vince Leist, President and Chief Executive Office North Arkansas 
  Regional Medical Center, On behalf of the American Hospital 
  Association....................................................     5
    Prepared Statement...........................................    34
Sam Cook, President, National Mobility Equipment Dealers 
  Association....................................................     7
    Prepared Statement...........................................    37
Gene Migliaccio Dr. P.H., Deputy Chief Business Officer for 
  Purchased Care, VHA, U.S. Department of Veterans Affairs.......     9
    Prepared Statement...........................................    49

    Accompanied by:

        Joseph Enderle, Director, Purchased Care Operations, VHA, 
            U.S. Department of Veterans Affairs

                        STATEMENT FOR THE RECORD

Hon. Charles W. Boustany Jr., M.D................................    52
Prepared Statement by Debora M. Gault on American Medical 
  Response.......................................................    61
AMR PBS Report...................................................    68
Statement by Greg Hufstetler on Reimbursement Technologies, 
  Inc.--A Subsidiary of EmCare, Inc..............................    73

 
        ASSESSING VA'S ABILITY TO PROMPTLY PAY NON-VA PROVIDERS

                              ----------                              


                        Wednesday, June 3, 2015

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                                    Subcommittee on Health,
                                                     Washington, DC
    The subcommittee met, pursuant to notice, at 10:00 a.m., in 
Room 334, Cannon House Office Building, Hon. [chairman of the 
subcommittee] presiding.
    Present:  Representatives Benishek, Huelskamp, Coffman, 
Wenstrup, Abraham, Brownley, Takano, Ruiz, and Kuster.
    Also Present: Representative Walorski.

           OPENING STATEMENT OF CHAIRMAN DAN BENISHEK

    Dr. Benishek. Good morning. The subcommittee will come to 
order.
    Thank you all for joining us for today's subcommittee 
hearing, ``Assessing VA's Ability to Promptly Pay Non-VA 
Providers.''
    The issue we will discuss this morning, VA's ability to 
efficiently and accurately reimburse non-VA providers for the 
services they provide to veteran patients on the Department's 
behalf, has perhaps the most far-reaching implication of any 
issue that we will discuss this Congress. It impacts small and 
large hospital systems, individual providers and practice 
groups, ambulance companies and emergency departments, home 
health aides, mobility equipment dealers, and all manner of 
others in communities across the country who find themselves 
left holding VA's check, sometimes to the tune of millions of 
dollars.
    It impacts veterans, who are sometimes billed for services 
that VA should have paid, which can damage both their credit 
and their confidence in VA. And it also impacts the overall 
success of VA healthcare system--a healthcare system that is 
increasingly reliant on non-VA providers who are becoming more 
and more hesitant to accept veteran patients for fear that VA 
will not reimburse them for the services that they provide.
    This morning, we will hear troubling testimony from some 
non-VA providers who will outline persistent difficulties that 
they have faced when attempting to obtain timely and accurate 
payment from VA, overly burdensome VA guidelines that hinder 
their ability to resolve issues with VA officials, and 
inexplicable gaps between stated VA policy and day-to-day 
practice in the field.
    They will allege that they are owed, in some cases, tens of 
millions of dollars over many years and have to fight VA for 
every penny. They will allege that they have had to wait for up 
to 4 hours on the phone when attempting to contact VA to check 
on the status of a claim and then, after connecting with a VA 
employee, were disconnected because they did not know the 
veteran's middle name or tried to ask VA about more than four 
claims on one phone call.
    Perhaps most disturbingly, they will allege that VA has 
lost sensitive medical documentation that they have provided to 
support their claims even though they are able to demonstrate 
via certified mail that VA received the documents in question.
    What worries me almost more than the testimony that we will 
hear today is the testimony that we won't hear today from those 
who are reluctant to share their stories publicly out of fear 
of retaliation. For example, a small business in my district 
who has been unable to obtain timely payment from VA for 
services provided to Michigan veterans elected not to provide 
comments for today's hearing out of fear that coming forward 
would negatively impact their relationship with VA leaders and, 
therefore, their ability to get paid for the services that they 
have rendered so far and to continue helping veterans in the 
future.
    Of course, all of this begs questions. If non-VA providers 
are owed collectively hundreds of millions in backlog payments, 
where is that money? Why is there such a wide variation in 
claims processing from VA facility to VA facility? And why are 
there such burdensome restrictions placed on non-VA providers, 
who are simply looking to be reimbursed in a timely manner for 
the valuable lifesaving services that they provide?
    What retaliatory actions has VA taken against non-VA 
providers that have caused many to be unwilling to publicly 
relay their stories? How can VA expect to become a healthcare 
leader when basic business functions cannot be completed 
efficiently? And, most troublingly, what happened to medical 
record information that VA is signing for and then claiming 
never to have received? And how can we be sure that sensitive, 
personal information has not been compromised by shoddy VA 
recordkeeping?
    These are just some of the many serious issues that we need 
answers to this morning.
    So, without further ado, I now yield to Ranking Member 
Brownley for any opening statements she may have.

       OPENING STATEMENT OF RANKING MEMBER JULIA BROWNLEY

    Ms. Brownley. Thank you, Mr. Chairman. And thank you for 
calling this hearing today.
    Section 105 of the Veterans Access, Choice, and 
Accountability Act required the Veterans Affairs to set up a 
claims processing system. In addition, the Government 
Accountability Office is to report it to us no later than 1 
year after the law was enacted about the timeliness of payments 
for hospital care, medical services, and other health care 
furnished by non-Department of Veterans Affairs healthcare 
providers. I understand the report is due August 7 of this 
year, and I look forward to receiving the report from GAO.
    The VA has struggled in the past to ensure that non-VA 
providers are paid in a timely manner. Numerous past reports by 
the GAO have found weaknesses in the management and oversight 
of non-VA medical care.
    In today's testimony submitted by Mr. Greg Hufstetler of 
EmCare, he claims that EmCare has been unable to obtain 
virtually any payments from the Veterans Health Administration 
since the fourth quarter of 2013.
    I understand that EmCare has treated over 59,000 veterans 
without receiving payment. This concerns me greatly. I look 
forward to hearing from VA how this could happen and what are 
they doing to address the situation. Is this typical throughout 
the healthcare system, or are there extenuating circumstances 
involved in this particular instance?
    According to VA testimony, since May of 2014, VA has 
received 34 percent more claims than January 2015 through April 
of 2015 as compared to the same time in 2014. That represents a 
significant increase of claims into a system that was already 
overburdened. I would like VA to tell the subcommittee what the 
significant challenges are that affect the ability of VA to pay 
on time.
    Mr. Chairman, again, I want to thank the witnesses for 
being here today to help inform the subcommittee how we can 
improve the claims processing system of the Veterans Health 
Administration. I look forward to their testimony, and I thank 
you for holding the hearing.
    And I yield back.
    Dr. Benishek. Thank you, Ms. Brownley.
    Joining us on our first and only panel this morning is 
Asbel Montes, vice president of reimbursement and government 
affairs for Acadian Ambulance Service; Vince Leist, president 
and chief executive officer of the North Arkansas Regional 
Medical Center, who is testifying on behalf of the American 
Hospital Association; Dr. Gene Migliaccio, VA's Deputy Chief 
Business Officer for Purchased Care, and he is accompanied by 
Joseph Enderle, VA's Director of Purchased Care Operations. We 
are also joined by Sam Cook, president of the National Mobility 
Equipment Dealers Association.
    I am going to yield to his Congresswoman, my friend, 
colleague, and fellow committee member, Jackie Walorksi, to 
introduce him.
    Mrs. Walorski. Thank you, Mr. Chairman, for the opportunity 
of allowing me to introduce my constituent Sam Cook, president 
of Superior Van & Mobility in South Bend, Indiana, located in 
my district.
    Sam's father, Dan Cook, Sr., founded Superior in 1976. It 
is a family-run business and today is currently one of the 
largest mobility dealers in the country. Along with running a 
growing company, Sam has acted with the National Mobility 
Equipment Dealers Association, where in 2012 he assumed the 
role of president of the board of directors.
    I would like to welcome Sam and thank the chairman for the 
indulgence.
    Dr. Benishek. Thank you, Mrs. Walorksi.
    Well, let's begin.
    Mr. Montes, we will begin with you. Please proceed with 
your testimony. You have 5 minutes. Thanks.

                   STATEMENT OF ASBEL MONTES

    Mr. Montes. Chairman Benishek and Ranking Member Brownley 
and distinguished members of the subcommittee, my name is Asbel 
Montes, and I am the vice president of reimbursement and 
government affairs for Acadian Ambulance Service. We are 
located in Lafayette, Louisiana. We are the largest privately 
owned, employee-owned ambulance service in the Nation.
    The chairman and CEO of our company, Richard Zuschlag, 
founded our company in 1971 with eight Vietnam veterans. Today, 
we have over 4,000 employee-owners, with over 400 of those 
being military veterans. So I am honored to sit before you 
today to represent not only our industry but, even more so, the 
veterans that we serve.
    Prior to coming before you today, our company, along with 
American Medical Response, who is the largest public ambulance 
provider in the Nation, and the American Ambulance Association 
have worked diligently with our congressional delegation, our 
other healthcare stakeholders, the Veterans Integrated Service 
Network, as well as the national leadership at VA to assist, 
recommend, and, frankly, demand that VA's internal processes be 
updated and modified to ensure that they are fulfilling their 
intended purpose but also not placing a financial burden on the 
men and women who have served our Nation so selflessly. Despite 
these efforts, we have not seen any significant positive 
movement from VA and, therefore, find ourselves here today.
    For a real-life look at the issue, please allow me to 
provide one example that a veteran in Louisiana experienced who 
called 9/11 for emergency medical care and transport in early 
2014.
    We filed a claim and provided all the necessary information 
and medical records and appropriate documentation within 30 
days to VA. We sent this information via certified mail. VA 
signed for it, confirming receipt, 5 days later. Almost a year 
later, on March of 2015, the veteran appeared on two local TV 
channels describing how his claim was still unpaid. He was 
subsequently contacted by a VA representative on March the 18th 
of 2015 indicating that his claim would be paid and he would 
receive notification. The claim finally processed on April of 
2015, over a year and 3 months later.
    There are many more examples just like this that we could 
provide you of other providers and veterans alike across the 
Nation, but suffice it to say the GAO report in 2014, which 
highlighted these issues regarding excessive claims processing 
time and paperwork requirements for non-VA providers, is 
absolutely correct.
    This problem is especially acute for the majority of 
ambulance services, providers that serve the local 9/11 
responders and their communities, who are prohibited from 
refusing emergency treatment from any patient regardless of 
their payer source and the ability to pay.
    The failure to pay providers in a timely and accurate 
manner puts providers like us in the difficult position of 
having to bill veterans for emergency treatment, placing an 
unfair financial burden on the veterans due to the lack of 
response, invalid denial or payment by VA.
    Our previous efforts at addressing this issue have included 
numerous increase sent from our Congressmen and Senators in 
many States, and the responses from VA have remained wholly 
inaccurate and inadequate.
    My colleagues and I are not ignorant to the magnitude that 
this issue presents for VA. However, after numerous offers of 
assistance and requests for relief from the private and public 
sector, we have seen very little change. In fact, our company, 
American Medical Response, and many members of the American 
Ambulance Association have seen a recent escalation of the 
problem, with our accounts receivable due from VA growing in 
excess of $30 million over 90 days.
    VISN 16 has sent reports to our congressional delegates 
with a number that would indicate improvement, but our data 
clearly indicates the opposite. On May 14 of this year, just a 
few weeks ago, we had yet another conference call with VISN 16, 
specifically the Flowood, Mississippi, office, and requested 
that they provide us with all claims that we filed to them 
since 2012 in order to reconcile our records with theirs.
    That audit, which we completed last Tuesday, indicated that 
they showed no record of 768 claims which were sent certified 
mail with confirmation of receipt. Last Thursday, just a few 
days ago, they said they would investigate the discrepancy and 
get back with us on Friday. As of this morning, when I spoke 
with my staff at 9 o'clock, we still had not heard from their 
office regarding that.
    The Federal Government has a responsibility to ensure that 
our veterans receive the best health care we can provide. It 
also has the responsibility to ensure that they are not 
required to bear an unjustified financial burden because VA 
fails to pay non-VA providers in a timely and accurate manner.
    It is our recommendation that Congress remove all claims 
processing for non-VA providers from the Department of Veterans 
Affairs and place it with a single fiscal intermediary, 
providing guidelines and policies to address the issues stated 
here today. These steps would ensure consistency, efficiency, 
and expertise in personnel, as well as sufficient, dedicated 
resources to process claims timely. Several other government 
programs, such as TRICARE and Medicare, utilize this strategy 
successfully, but note that time is of the essence.
    Thank you for giving me this opportunity to provide this 
information and serve those who have sacrificed so much for our 
Nation. I look forward to answering the committee's questions 
and serving as a resource as the committee's work continues 
beyond this hearing.

    [The prepared statement of Asbel Montes appears in the 
Appendix]

    Dr. Benishek. Thank you, Mr. Montes.
    Mr. Leist, please go ahead.

                    STATEMENT OF VINCE LEIST

    Mr. Leist. Thank you.
    Chairman Benishek and Ranking Member Brownley, on behalf of 
the American Hospital Association's nearly 5,000 member 
hospitals, health systems, and other healthcare organizations, 
I thank you for the opportunity to testify today.
    I am Vince Leist. I am president and CEO of North Arkansas 
Regional Medical Center. We are a county-owned facility that is 
operated by a separate 501(c)(3), a not-for-profit 
organization, serving the comprehensive healthcare needs of 
rural communities of four counties in north-central Arkansas. 
Like every community in America, we are proud of the men and 
women who have served our great Nation, and we are honored to 
care for them in their time of need.
    America's hospitals strive to ensure patients get the right 
care at the right time in the right setting. We have a 
longstanding history of collaboration with VA and are eager to 
assist the Department and our veterans in any way that we can.
    However, hospitals' continued inability to obtain a timely 
payment from VA and its contractors hinders access for care for 
veterans who need non-VA services and undermines the ability 
and viability of non-VA hospitals and the essential services 
they provide to their communities.
    We also are concerned about the process in which VA 
processes claims. Medical records have been lost or unaccounted 
for, leading to questions about the privacy of our veterans' 
records. In addition, many veterans worry about their claims 
that are not paid promptly or left unpaid completely, and they 
are left in a difficult position of trying to get their claims 
paid while they are battling illness. This is an untenable 
position for both the hospital and for the veterans.
    Last month, at a hearing before the House VA Committee, VA 
Deputy Secretary Sloan Gibson acknowledged the lack of 
timeliness in promptly reimbursing non-VA hospitals and 
expressed his commitment to improve the payment process. 
Hospitals and health systems welcome this commitment. However, 
many non-VA hospitals have outstanding payments spanning many 
months, some dating back years.
    While North Arkansas Regional Medical Center is very 
dedicated to serving the veterans in our community, we accept 
each and every one who walk through our door. We have decided 
against contracting with VA due to slow or no payment for 
claims and the bureaucracy involved in getting reimbursement 
for claims.
    Since 2011, we have had 215 claims, totaling more than 
$750,000, that have not been paid by VA. We have attempted to 
work with VA to resolve these claims. However, those efforts 
have resulted in long periods on hold to speak to VA 
representatives, limitations on the number of cases that can be 
discussed in any one particular phone call, and, once again, 
countless lost medical records.
    In addition, according to data from the Arkansas Hospital 
Association, more than 4,400 claims, many dating back 3 years, 
totaling more than $24 million, are currently owed 60 hospitals 
in the State of Arkansas. In March, VA reported a national 
backlog of more than $878 million in delayed payments for 
veterans' emergency medical services delivered by non-VA 
providers.
    Even though our hospital has not been paid by VA for 
services going back 4 years, we continue to provide care for 
the veterans in our communities we serve. However, continued 
lack of prompt payment and further reductions in Medicare and 
Medicaid reimbursement would force our hospital and many other 
hospitals across this country to reduce or eliminate services 
offered to patients, resulting in reduced access to care for 
the entire community.
    To help address this problem of prompt pay, the American 
Hospital Association recommends that VA do:
    One, review claims as soon as practicable and, after 
receipt, determine whether they are proper. When a claim is 
determined to be improper, the Department should return the 
claim to the hospital as soon as practicable but no later than 
7 days after the initial receipt. VA also should specify the 
reasons why the claim was improper and request a corrected 
claim.
    Two, pay claims within 30 days of the receipt of a proper 
claim.
    Three, make interest payments to hospitals when claims are 
paid outside of this 30-day window.
    And, four, Congress should require VA to develop a metric 
to measure effectiveness of the claims processing, including 
soliciting feedback from non-VA providers. VA also should 
report to Congress on a regular basis the information it 
obtains from the effectiveness of this claims processing.
    In conclusion, VA health system does extraordinary work 
under very difficult circumstances for a growing and complex 
population of patients. While the system is working to overcome 
operational changes, America's hospitals are eager to assist 
the Department and the veterans in any way that we can. The AHA 
stands ready to work with the committee to ensure prompt 
payment to non-VA providers so that hospitals can continue to 
provide vital services to veterans and all of the patients in 
the communities that they serve.
    Thank you, sir.

    [The prepared statement of Vince Leist appears in the 
Appendix]

    Dr. Benishek. Thank you, Mr. Leist.
    Mr. Cook, you may begin.

                     STATEMENT OF SAM COOK

    Mr. Cook. Good morning. My name is Sam Cook. I am president 
of Superior Van & Mobility. I operate nine mobility dealerships 
in four States: Kentucky, Indiana, Tennessee, and Louisiana.
    I am president of and am here on behalf of the National 
Mobility Equipment Dealers Association. NMEDA is a nonprofit 
trade association which includes more than 300 highly qualified 
mobility dealers representing the small-business community. We 
specialize in modifying, selling, servicing specially equipped 
vehicles so that people with physical disabilities can drive 
safely and be transported on public roads in accordance with 
Federal motor vehicle safety standards. I would first like to 
say the NMEDA members are proud and honored to serve American 
veterans, especially those with disabilities, who have 
sacrificed so much for our country.
    I want to thank the chairman and the committee for focusing 
their attention on VA slow-payment issue.
    However, this investigation should not come as a surprise 
to VA. Over the past 5 years, NMEDA has attempted to work with 
VA prosthetics department and the Veterans Benefit 
Administration to help remedy these chronic slow-payment 
practices of local VAs. Over that time, NMEDA has submitted 
nearly 4,000 past-due invoices, totaling over $34 million. To 
be fair, VA at times has assisted in getting past-due invoices 
paid, but after 5 years the situation has not improved.
    According to the Prompt Payment Act, a payment is due 30 
days after a government agency receives a proper invoice. This 
simply is not happening in most VA facilities. For example, a 
mobility dealer in North Carolina was owed $247,000 from just 
one VA facility that included 15 separate invoices, all past 
due for an average of 150 days. A mobility dealer in Texas was 
owed $295,000 from one VA facility that included 55 separate 
invoices, all past due an average of 312 days. At one point, my 
own company was owed a total of $645,000 from five different VA 
facilities over four States, 68 invoices, all past due an 
average of 396 days.
    These are just a few examples. This is completely 
unacceptable. Mobility dealers are small-business owners, and 
they simply cannot afford to carry this kind of debt on their 
books and pay suppliers and meet payroll.
    It also bears mentioning that, in most cases, mobility 
dealers are not paid interest on these past-due invoices.
    There are other payment process inconsistencies related to 
how a dealer submits proper invoices to even qualify for 
payment.
    Finally, another VA inconsistency is VA has no criteria for 
selecting automotive mobility dealers. Anyone can claim to be a 
modifier without any training, appropriate facilities, 
equipment, or accreditation and then bill the government.
    The lack of any meaningful or timely effort by VA to 
address slow payment, lack of conformity, and payment 
submission policy, and having no measurable selection criteria 
leads to a potential outcome of unsafe vehicles driven by 
disabled vets, placing them, their families, and the driving 
public at risk.
    Based on NMEDA input, NMEDA has concluded that the reason 
for VA not being responsive to this constant outcry is 
multifold: number one, failure to communicate VA policy to the 
field; number two, inconsistent enforcement of the policy; 
number three, understaffing at VA; and, number four, supplier 
payment not being a VA priority.
    Those of us that deal with different VA facilities have to 
deal with a different interpretation of the rules and policies 
at each one. As the saying goes, if you have been to one VA, 
you have been to one VA.
    For the record, there is also evidence that this issue may 
be worse than either reported or imagined due to reluctance to 
speak out against VA in fear of losing future business. To be 
clear, there are no written or verbal threats; the local VA 
just stops calling or awarding business.
    While $34 million may not seem like a lot in terms of 
Federal budgeting, it is a huge amount to small-business owners 
who have to bankroll VA's inability to manage the payment 
process. We admit that not all VA facilities are guilty of slow 
payment, and dealers appreciate those who pay promptly, but our 
experience is the majority foster a culture of inconsistent, 
unenforced, or ignored policy.
    We respectfully ask Congress to demand VA ensure that 
quality goods and services be delivered to our veterans and 
those businesses delivering those be paid in a timely manner. 
We all know our veterans deserve better.
    Thank you. I would be glad to answer any questions.

    [The prepared statement of Sam Cook appears in the 
Appendix]

    Dr. Benishek. Thank you, Mr. Cook. Thirty-four million 
dollars sounds like a lot of money to me.
    Dr. Migliaccio [continuing]. Is that how you say it?
    Dr. Migliaccio ``Migliaccio.''
    Dr. Benishek. ``Migliaccio.''
    Dr. Migliaccio. Yes, sir.
    Dr. Benishek. All right. Doctor, you have 5 minutes. Thank 
you.

             STATEMENT OF GENE MIGLIACCIO, DR.P.H.

    Dr. Migliaccio. Good morning, Chairman Benishek, Ranking 
Member Brownley, and members of the subcommittee. Thank you for 
the opportunity to discuss VA's reimbursement efforts for non-
VA care providers.
    I am accompanied today by Mr. Joseph Enderle, Director of 
Purchased Care Operations.
    There are three important points I want to share with the 
committee this morning: First, we own the problem of aged 
claims. Second, we are fixing the problem. And, third, we will 
lean forward with continuous improvement and accountability.
    VA's community care programs provide high-quality and 
accessible care to veterans. To ensure that care is available, 
VA understands the importance of complying with requirements of 
the Prompt Pay Act and making timely payments to our partners.
    Section 106 of the Veterans Choice Act required the 
Department to transfer authority to pay for health care 
furnished through VA community providers and the associated 
budget to the Chief Business Office for Purchased Care no later 
than October 1, 2014. VA met this target.
    In just 7 weeks, we quickly realigned about 2,000 
positions, of which 50 percent of those positions are veterans, 
to the Purchased Care Office from the VISNs and our medical 
centers. This realignment established a single, unified shared-
service organization responsible for payment functions and 
centralized management, allowing us to leverage business 
process efficiencies going forward.
    VA has experienced tremendous growth in the volume of 
claims from community providers since we started the 
Accelerated Care Initiative in May of 2014. VHA has received 34 
percent more claims from January 2015 through April 2015 
compared to the same timeframe in 2014. We are making every 
effort to ensure claims are processed timely. Our current 
standard is to have at least 80 percent of our claims inventory 
under 30 days old.
    Processing timeliness is measured from the point the claim 
is received to when the claim is processed and, as a result, 
marked as complete. As of May 22, 2015, our nationwide 
performance was 73 percent. And if our metric was aligned with 
Medicare processing standards for other than claims with no 
impropriety, which is about 45 days, our performance would be 
76 percent. As of today, we are processing clean claims within 
22 days.
    Claims received by VA without prior authorization is one 
significant factor in the delay of claims processing. When 
claims without an authorization are received from community 
providers, our staff spends time to ensure those claims are 
adjudicated based on the veterans' eligibility. Based on 
regulatory and statutory authority, not all veterans are 
eligible for community care in all situations. When claims are 
denied, veterans are notified timely, along with the right to 
appeal.
    I want to describe what we are doing to better our payment 
processes.
    First, we are refining standard processes and performance 
targets and monitoring to ensure processing activities are 
performed and measured consistently across VA.
    Second, to better process claims, we established the 
Support Claims Processing Division in March of 2015. This 
division was established to assist with processing claims when 
sites have high turnover, we see a sudden increase in claims, 
or need assistance with verification of claims. To address the 
increasing inventory, more staff was recently added to the 
division.
    Third, the Chief Business Office established a contract to 
add support staff to process claims at those sites with 
significant inventories. Currently, 145 full-time employees and 
contractors are on board at Support Claims Processing Division. 
Over 40 more employees are expected to be onboard this month. 
VHA also plans to hire up to an additional 220 full-time 
employees.
    Fourth, VHA is implementing technical fixes for issues 
preventing claims from being processed in a timely manner. All 
community care referrals require authorization. Without the 
authorization, claims cannot be processed, delaying payment. In 
some cases, authorizations are not entered timely in VA payment 
system due to administrative process. This is a processing 
issue we must resolve. We are working with non-VA care 
coordination staff to ensure authorizations are entered before 
a claim is received.
    Finally, we are working with VA Center for Applied Systems 
Engineering to standardize business processing to increase 
efficiencies and reduce variation using Lean methodology. We 
have also completed technical site visits to evaluate how the 
current software design is meeting business needs.
    We are finding better and more frequent ways to communicate 
the status of claims processing timeliness with stakeholders. 
Ongoing training is also being provided to community providers 
on the resources available to address their information needs.
    Our recent actions have had a significant impact on 
processing volume. From January to May of 2015, VHA processed 
almost 6 million claims, a 21-percent increase from the roughly 
5 million claims processed January to May of 2014.
    We are thankful for the work of our community providers and 
their work in providing timely, high-quality care to fellow 
veterans, and we thank you for that. We are working hard to 
expedite payments and streamline our claims services in order 
to make this an effective and efficient system for all.
    Mr. Chairman, I appreciate the opportunity to appear before 
you today. We are prepared to answer any questions you or other 
members of the committee may have. Thank you very much.

    [The prepared statement of Gene Migliaccio appears in the 
Appendix]

    Dr. Benishek. Thank you, Dr. Migliaccio.
    I yield myself 5 minutes for questions.
    Dr. Migliaccio, how long have you been on the job there at 
VA doing this job?
    Dr. Migliaccio. Sir, this is my fourth week.
    Dr. Benishek. Yes.
    This is not the first time that we have been at a hearing 
where we several people have testified about how things are, 
you know, in their perspective, and then we have had a VA 
person come and give us a litany of all the great things that 
VA is doing to improve the situation.
    The fact that you make that statement and the fact that 
what is going on with these folks over here is still going on, 
it doesn't really jibe very well. Do you understand what I am 
saying?
    Dr. Migliaccio. Yes, sir.
    Dr. Benishek. I hate to beat you up because you have just 
been here for 4 weeks, right?
    Let me just list a couple of the things here that distress 
me, one of the things you said was, ``we don't have a 
documentation for the claim sometimes due to the administrative 
process.'' That was one of the things you just said. The 
administrative process is a lot of the problem, Doctor.
    One of the things that Mr. Montes mentioned was the 768 
claims where they sent the documentation to VA. They have a 
certified mail receipts that it was signed for by VA. And yet 
VA doesn't seem to have the documentation necessary to pay the 
claim, despite the fact that it was signed before by a VA 
employee.
    So what happened to those records? What is the story there? 
You should have those claims. Somebody signed for it. Where are 
they? Who is looking at them? Is it secure? You apparently 
don't know, as far as I can tell.
    Can you answer that question for me?
    Dr. Migliaccio. Well, I thank you for the question.
    I also thank the members of the committee and also Congress 
for the Choice Act because it has allowed us to standardize our 
processes and centralize.
    And so, with questions such as where are the records, it is 
difficult to answer that question. I can ask my colleague, Joe 
Enderle, to answer. But when we are looking at the 150-plus 
medical centers and CBOCs that we have----
    Dr. Benishek. Well, let's ask Mr. Enderle. Maybe he has a 
better idea.
    Dr. Migliaccio. Okay.
    Dr. Benishek. What is the story there?
    Mr. Enderle. Thank you, sir.
    We do recognize that we have some internal process issues. 
Claims come in, paper claims come in EDI. And most of the time, 
especially with inpatient claims, unauthorized claims, and Mill 
Bill claims, we must have the clinical documentation to 
adjudicate those claims.
    Dr. Benishek. Yes, we know that. But you apparently have 
them; you just don't know where they are. Where are they?
    Mr. Enderle. Actually, when the clinical documentation 
comes in, we scan those claims into our Fee-Basis Claim System. 
Sometimes those claims are delivered directly to our file room. 
Those claims are subsequently again scanned in our VistA 
Imaging System.
    We acknowledge that we have had difficulty in pockets of 
the country where the processes aren't, you might say, 
functioning seamlessly and timely. So we are addressing----
    Dr. Benishek. 768 claims is a lot of claims. It is 
thousands of dollars, I am sure, for these folks here.
    I guess what I need and the problem that I always get with 
this is, can I have you be the one responsible for coming up 
with an answer of why these claims are gone? Who is going to 
take responsibility?
    The problem I have with VA is it is never anybody's fault. 
There is nobody actually responsible, so----
    Dr. Migliaccio. I will take responsibility.
    Dr. Benishek. Well, then, what that means is that I want an 
answer to this 768-claim business. The administrative processes 
answer doesn't really wash very well.
    Dr. Migliaccio. Yes, sir. We will work with our community 
providers. If we can get the data, the details, we can start 
doing the research.
    Dr. Benishek. Well, I will expect an answer to that 
question within a month then.
    Now, the other question I have is, what do you think of 
this idea of having a third-party person do the claims thing? 
It seems like Medicare or Blue Cross does a much better job, 
adjudicating these claims, millions and millions of claims at a 
time. What do you think of VA contracting that service out?
    Dr. Migliaccio. It is something to think about. We would 
certainly take a look at--we could do a cost-benefit analysis 
to see where it makes sense.
    Dr. Benishek. Yes, okay. All right. Appreciate that.
    Mr. Montes, do you think that would be a viable offer for 
VA, to have them contract that claims processing out to 
somebody that actually does it for a living?
    Mr. Montes. Absolutely. I mean, we do it for the TRICARE 
claims through Humana, so some of our Active Duty, their claims 
are processed through a fiscal intermediary. So the precedent 
has really already been set.
    Dr. Benishek. All right. So there is an idea.
    I will yield now to Ms. Brownley. Thank you.
    Ms. Brownley. Thank you, Mr. Chairman.
    Mr. Cook, I had a question for you. You mentioned VA 
inconsistency and the lack of criteria for selecting mobility 
dealers in your testimony. Can you elaborate a little bit more 
and explain what you mean by this?
    Mr. Cook. Sure.
    You know, right now, you and I could open a mobility 
business and register with the government. We just send our 
paperwork in, nobody looks at us, and we are a mobility dealer 
and we can do business with VA.
    And the handbook that VA is going off of, which I have in 
my hand, on the first page is dated October 30 of 2000. That is 
October 30 of 2000. Several different administrations of both 
parties have been through, so it is not an issue there. 
Supposed to be updated by 2005.
    And we have met with VA, and because technology has changed 
in our industry, the nature of it, from being high-tech 
vehicles that are being produced now, there have to be some 
standards, so to know that the person has insurance, to know 
that the person has 24-hour service, to know that the person 
providing has facilities that are even ADA-compliant. And these 
are things that VA does not ask for.
    And we have gone to VA and they say that is a good idea, 
but we are still here.
    Ms. Brownley. So you have gone to VA; they have said it is 
a good idea. But we are now in 2015. We are operating under 
2000 standards that were supposed to be--or at least the 
handbook--updated by 2005?
    Mr. Cook. Correct. And when each year we go and we meet 
with them, they say, ``Well, we are working on it. It will be 
the next year. We will have you something.'' And it has just 
been, you know, a slow process. It is supposedly in the 
regulatory process at this point now.
    But, again, veterans are still being--have the potential to 
have unsafe vehicles out there that it not only affects the 
veteran, it affects all of us on the road. When you take a 
vehicle and you put a 300-pound wheelchair and a 200-pound lift 
on the back of a Toyota Prius, which happens, the vehicle's 
rear end goes way down and the front end goes way up. We have 
all seen it at our local grocery stores. And that is an unsafe 
practice.
    Ms. Brownley. So you could provide some evidence of dealers 
out there that are not modifying automobiles correctly for the 
veteran that could be quite dangerous for them rather than 
assisting them?
    Mr. Cook. Yes, ma'am.
    Ms. Brownley. Thank you.
    And, Mr. Migliaccio, are you aware of this issue, that it 
has been 15 years and VA still hasn't updated the handbook?
    Dr. Migliaccio. I am not aware of the issue about the 
handbook, but I am aware of the issue in terms of the durable 
medical equipment that VA purchases.
    Veterans Benefit Administration takes care of service-
connected veterans, and I believe Mr. Cook alluded to that in 
his testimony. The non-service-connected veterans are handled 
by the VHA through our prosthetics program.
    We know that Mr. Cook and his team met with our staff at 
VHA about 3 weeks ago. We know there are no outstanding claims 
from the VHA side. We also know that, from a quality 
standpoint, in terms of the request for VA to endorse one 
association over another is something that many Federal 
agencies just aren't in--it is not in our wheelhouse to do. So 
what I can say is that I understand the issues that Mr. Cook 
has, but within the VHA side and with our Business Office it is 
a little out of our wheelhouse. But we can certainly work with 
Mr. Cook.
    Ms. Brownley. Thank you.
    And, Mr. Cook, do you agree that there are no outstanding 
claims?
    Mr. Cook. No, ma'am. There are--I have three right here of 
my own company. 9/25 of 2014 for $25,600. I have--there are 
millions of dollars right now that are past due nationwide. 
That is bizarre, to hear somebody say that there are not VA 
claims out there right now.
    Right now, the issue--the VBA goes through the prosthetics 
to handle the service-connected veteran. They administer the 
program. The service-connected vet is being taken care of by 
the prosthetics department, which then sends the bill back to 
the VBA for processing. So you have two different hands on the 
program, which makes it very confusing.
    So the prosthetics department approves it, sees it out, and 
then it goes back to the VBA for payment. So they are always 
pointing fingers at each other, saying, well, no, it is their 
fault; no, it is their fault, we have sent it in. The mobility 
dealer sends the invoice to the prosthetics department. They 
sign off on it, then send it to the VBA regional office for 
payment.
    Ms. Brownley. Thank you very much.
    My time is over, and I yield back.
    Dr. Benishek. Dr. Huelskamp.
    Dr. Huelskamp. Thank you, Mr. Chairman. I appreciate the 
topic of this hearing.
    I have heard consistently concerns about a lack of prompt 
payment. I would like to ask the doctor from VA, can you 
describe how the Prompt Payment Act applies to VA and how 
quickly you are required under that act to make payments?
    Dr. Migliaccio. Yes, sir.
    The Prompt Payment Act from 1982 states that Federal 
agencies have an obligation to pay timely, within 30 days, and 
there is a privity of contract between a Federal agency and a 
provider.
    In our case, we do pay interest on late claims. We pay 
those----
    Dr. Huelskamp. Could you provide for the committee how much 
interest you paid on these claims in the last fiscal year?
    Dr. Migliaccio. Last year, close to $200,000.
    Dr. Huelskamp. What is the interest rate you pay?
    Dr. Migliaccio. Well, I would have to get back to you on 
that.
    Dr. Huelskamp. Okay.
    All right. What is the application of--or what is your 
expectation for prompt payment for those that are not payments 
that would not be covered under the Prompt Payment Act, 
noncontracted providers, which is where I hear those complaints 
at? How quickly do those get paid?
    Dr. Migliaccio. Well, as I mentioned in testimony, we pay 
our claims right now within 22 days, clean claims. Claims that 
are pended, we----
    Dr. Huelskamp. Twenty-two days of receipt of the claim or 
processing of the claim, scanning of the claim? What is the 
start of the claim with your statement?
    Dr. Migliaccio. As soon as it is scanned into the system.
    Dr. Huelskamp. Okay. Well, that is a good point.
    I am looking here at a copy of a status report, or a 
response to a request for a status update from one VA facility. 
And they said, ``Please be aware''--it is of January 1, 2015--
``there is a scanning backlog of approximately 90 to 120 
days.''
    So, based on your statement, then, your definition, 22 days 
is after 120 days, perhaps, before the claim is even scanned 
in, and then the 22 days? Am I understanding that correctly?
    Mr. Enderle. If I may address that, sir, we did check into 
that issue. The large backlog with scanning that you are 
referencing is actually scanning of clinical documentation. It 
is not associated with scanning the claims. The claims are----
    Dr. Huelskamp. Certainly you don't process the claim 
without documentation.
    Mr. Enderle. The claims, if they are preapproved, 
authorized claims, outpatient services, we do not require the 
clinical documentation to process those claims for payment. So 
the outpatient, preauthorized claims, as long as it meets the 
authorization requirements, it is in our system. We process 
those claims. And those typically, as has been mentioned, are 
processed within 22 days.
    Dr. Huelskamp. So why would you send a provider--this is 
basically an excuse of why they have been waiting months to be 
paid. And, again, told them 90 to 120 days before you even 
start the claim. Is this because they are a noncontracted 
provider? Or what is the distinction between those two as far 
as you handle them?
    Mr. Enderle. Sir, we process the claims the same, whether 
it is contract or noncontract. They come in electronically, 
they come in paper, they are scanned.
    If the claims require clinical review and clinical 
documentation, that clinical documentation has to be scanned so 
that we can review it. We acknowledge that there is a backlog 
in scanning that clinical documentation. And you are absolutely 
right; it does impact the processing of those claims associated 
with the requirement of clinical documentation review. So we 
have----
    Dr. Huelskamp. I am a little confused, Mr. Chairman.
    If you are not looking at documentation except in certain 
circumstances--so you are paying claims without documentation, 
even though we are hearing here you aren't paying many claims 
on time at all--but you are saying--what percentage of claims 
do you pay with absolutely no documentation? You are scanning 
the documentation months after you pay the claim; is that what 
you are telling the committee?
    Mr. Enderle. At that one particular location, there is a 
backlog in scanning that clinical documentation.
    Dr. Huelskamp. So they paid thousands of claims with no 
documentation?
    Mr. Enderle. Outpatient, preauthorized services are paid 
without clinical documentation, that is correct. The only 
requirement of clinical documentation are for those claims that 
are----
    Dr. Huelskamp. Why are you scanning them in 3 months later, 
4 months later, if you have already paid the claim? That is 
your claim for the committee.
    Mr. Enderle. Specific claims that require clinical 
documentation are inpatient claims, emergency outpatient 
claims, emergency inpatient claims. We require the clinical 
documentation to adjudicate the point of stability, if an 
emergency existed, and the length of stay that the veteran is 
in that particular hospital.
    Dr. Huelskamp. Well, your statement doesn't match with what 
VA facility was saying.
    And I will enter this in for the record for the committee.
    Dr. Huelskamp. But, also, the entity was told to wait 60 
days to even call in. I mean, is this actually occurring, that 
you are saying, ``Well, don't even call us for 60 days''? Or 
when you call in--another example--when you call in, ``We will 
only let you discuss four claims on the same call, and then we 
have to hang up on you.'' Is that actually occurring?
    Mr. Enderle. That was occurring, sir. We acknowledge that, 
as we took over, with the implementation of the VACA law, we 
did go out to the sites, we met with sites, we did find 
situations like this. When we discovered these situations, we 
immediately stopped it.
    In this particular case, we did reach out to the site. We 
instructed the site that they are not to issue that document 
you are referencing again. And we implemented processes to 
ensure that when callers call in that they can resolve any 
issues of the claims that they have on hand.
    Dr. Huelskamp. I yield back, Mr. Chairman.
    Dr. Benishek. Thank you, Mr. Huelskamp.
    Mr. Takano.
    Mr. Takano. Thank you, Mr. Chairman.
    My first question for the panel, for anyone who wishes to 
answer it: The Choice Act has led to a lot of rapid change at 
VA, and I understand that claims for non-VA care have increased 
by 34 percent over this time last year, and VA has consolidated 
claims processing under the Chief Business Office.
    Has the late payment situation improved since the Choice 
program has been instituted?
    I guess, Dr. Migliaccio, you might want to answer that 
question.
    Dr. Migliaccio. I will start.
    It has improved. We have brought together--when you 
centralize anything, it is going to take some time. And that 
process is behind us now, and what we are starting to see is 
some phenomenal traction, especially when you look at that we 
are processing clean claims within 22 days. And that--we are 
following the standards in the industry.
    Mr. Takano. And a clean claim is a prior-authorized claim?
    Dr. Migliaccio. Yes, sir.
    Mr. Takano. Now, my colleague Mr. Huelskamp was asking a 
line of questions about the scanning that goes on with the 
medical documentation afterwards. Am I correct in--my 
understanding is, from listening to you, Mr. Enderle, that that 
scanning of claims or the documentation afterwards is for the 
non-clean claims. Is that right, or am I wrong?
    Mr. Enderle. Anytime that we receive claims associated with 
inpatient stays, emergency admissions to emergency rooms or 
emergency admissions, we require clinical documentations.
    In addition, if we receive a claim that has not been 
previously authorized, which is considered an unauthorized 
claim or a Millennium Health Care Act claim, in that scenario, 
we require the clinical documentation so that we can adjudicate 
the claim and determine if we can pay the claim on behalf of 
the veteran.
    Mr. Takano. So for those first types of claims that you 
described earlier, those could be preauthorized. It is just 
that the inpatient hospital stays are of a different nature, 
and do you have to get the documentation, the medical 
documentation for that?
    Mr. Enderle. Yes, sir. They could be preauthorized, and 
that is what we of course encourage, is that when a veteran 
shows up at a non-VA facility, if they have an emergency, we 
encourage that non-VA facility to contact the closest VA so 
that we can preauthorize that claim.
    Mr. Takano. I mean, so the nonpreauthorized claims and 
these other types of claims you mentioned, how much of the 
delay is due to medical records being inoperable? I mean, you 
are dealing with a lot of non-VA providers who have different--
I am assuming that all these records are coming in paper; that 
is why you have to scan them. Is that right?
    Mr. Enderle. That is correct. We try to work with the 
providers to provide them information on the best way to send 
those claims in.
    Mr. Takano. And, as I recall, some of the hesitancy of VA, 
when we were talking about moving toward non-VA care to address 
the backlog, was this concern about the interoperability of 
medical records with non-VA providers. I mean, that is what I 
recall.
    Is it reasonable to say that this is a significant part of 
the problem in terms of paying late claims?
    Mr. Enderle. Yes, sir, I agree. If we can receive the 
clinical documentation with the claim, we can expedite the 
processing of that claim.
    We also have a couple initiatives we are working on with 
working with providers themselves to turn that into an 
electronic access so we can access their system, pull down 
those clinical documents, so we do not have to mail the claims 
back and forth.
    Mr. Takano. Mr. Leist, you mentioned this issue of lost 
medical records. And it is lost paper records mainly; isn't 
that right?
    Mr. Leist. Yes, sir. Thank you for the question.
    Yes, it is lost paper records. But I have to reiterate 
that, when we send records to VA for processing, they are sent 
certified mail. So we know those records arrived. We are being 
told----
    Mr. Takano. I don't think the problem is that the--I mean, 
I think the problem is also in the manpower or the personnel it 
takes to scan those records. So they may receive them, but it 
sounds like the volume of medical records is also the issue.
    Is that true, Mr. Enderle?
    Mr. Enderle. That is correct. And in the particular 
location that Mr. Leist is referring to, we did identify 
significant issues at that location both with vacancies and the 
internal processes that they utilize to acknowledge and scan 
those documents. There was----
    Mr. Takano. So you could see there were some significant 
administrative snafus at that particular site?
    Mr. Enderle. At that particular site, that is correct. It 
is not a problem that we experience----
    Mr. Takano. Mr. Leist, do you have something more to add?
    Mr. Leist. Mr. Takano, I appreciate the comment. We would--
I will speak for my hospital. Hopefully the other hospitals 
that are represented by the American Hospital Association would 
say the same thing. We would welcome electronic transmission of 
records to VA. We would be very interested ----
    Mr. Takano. I am very interested in trying to facilitate 
that. And if we can get the funding--I don't recall if we ever 
inserted that into the Choice Act. But that is a high priority 
of my office, is to facilitate--I think non-VA care would be 
highly facilitated between--if we were to get this 
interoperability to work with all those providers.
    Dr. Benishek. Thank you.
    Dr. Wenstrup, you are recognized.
    Dr. Wenstrup. Thank you, Mr. Chairman. I appreciate it.
    Dr. Migliaccio, one question I have is, where is your 
predecessor now? Still working within VA?
    Dr. Migliaccio. No. I believe she retired, sir.
    Dr. Wenstrup. Okay. Because there has been a pattern here 
that we get new people when there have been issues that have 
been difficult. And so I am wondering if there is a reason for 
that, that you get somewhat thrown to the wolves in this 
situation, but we get somebody that has only been there 4 weeks 
to have to answer all these questions. It makes it difficult 
for us and certainly for you, as well. But it is a pattern that 
we have seen.
    My next question is going to claims that were submitted and 
signed for and what is the process for tracking down the person 
that signed for that claim that came in and trying to find that 
claim. Because they get a card back that tells them who signed 
it. So do you have a process in place of trying to track down 
the person that signed for the claim that seems to be missing?
    Mr. Enderle. The claims are typically received in the main 
mailroom at the facility. When those claims do come in at the 
mailroom, that is typically when those are signed by certified 
mail.
    They are subsequently then delivered to the non-VA care 
payment office, where they are scanned into our doc manager 
system. Or if the mailroom for whatever reason believes those 
medical records should be sent directly to the medical record 
file room, they may be scanned into what we call VistA Imaging.
    So we have identified an internal problem with that 
process, and we are attempting to fix that issue.
    Dr. Wenstrup. Yes, I would suggest that the person at the 
mailroom that signed for that gets a signature for who they 
turned it over to so there is some level of responsibility 
here, rather than blaming a computer glitch or a scanner that 
didn't work. Then you might be able to actually track these 
claims. And that is a large number of claims that were signed 
for and lost.
    My last question is to you again, Doctor. Would you be in 
favor of accepting bids right now from an outside source to 
process their claims?
    You talk about increasing the technology to do electronic 
claims. There are a lot of people that are already doing it and 
doing it successfully. And these gentlemen will tell you that, 
because they submit those claims and they get their payment.
    So will you take the lead for us on getting some bids? That 
shouldn't cost us anything. And maybe we can start to begin to 
assess whether this would be a good business move for everyone 
involved.
    Dr. Migliaccio. We currently have a request for information 
on the street right now to look at a new system.
    In terms of contracting out the entire process, we could 
certainly do the cost-benefit analysis and see what makes 
sense.
    Dr. Wenstrup. Well, I think that would be part of it. You 
know, you talk about the cost of a new system. How about the 
cost of outsourcing it and actually getting the job done? I 
think that is a component that we need to look at if we are 
going to make a good, wise business decision that helps not 
only our providers but our patients.
    So I would hope that at our next meeting we have some of 
those numbers that maybe some of the outside sources give us a 
bid on that. And I would appreciate that.
    Dr. Migliaccio. Thank you, sir.
    Dr. Wenstrup. Thank you.
    And I yield back.
    Dr. Benishek. Thank you.
    Ms. Kuster, you are recognized.
    Ms. Kuster. Thank you, Chairman Benishek.
    And thank you to all of you for providing services to our 
veterans. We are grateful for that.
    I think I want to follow up on the line of questioning my 
colleague Mr. Takano started. But, also, just to comment on 
this approach of a third-party vendor, I am not opposed to 
that; I just don't know that that is going to solve the problem 
unless we solve the issue of the electronic records.
    And I think where this seems to be headed is that the 
backlog--it is not a question of who signs for it in the 
mailroom. It is a question of you are ending up with boxes and 
boxes and boxes of medical records that aren't getting into the 
system in a timely way.
    So I want to follow up on that issue of electronic records. 
And if I could start with you, Mr. Leist, in the private 
sector, when you are dealing with a claims processing, how do 
you transfer the records? And just walk us through what that 
process looks like. I am going to assume it is not reams of 
paper records.
    Mr. Leist. Thank you for the question.
    First, I would like to comment a little bit on the entire 
process of submitting a claim. I have found, as I have compared 
the preauthorization process for patients with VA system and 
according to the commercial processes, VA system is extremely 
cumbersome. And, often, as reported in a recent document that 
was submitted to this committee, it requires the signature of a 
department head in the area where this particular procedure 
would be performed.
    Also, there are many issues I would like to address with 
the Veterans Choice Program.
    But, to answer your question, we submit claims 
electronically to many commercial providers. They pay us in a 
timely manner. If there are claims that are not supported by 
documentation, we can address those immediately and resubmit 
those documents. The communication between our hospital and 
commercial providers is open, it is active. We are not limited 
to the number of cases we can address over a phone call. Their 
claims processing people are available to us, which has 
heretofore been very different with VA system.
    Ms. Kuster. Well, I think we have an opportunity here. We 
have a Secretary that comes from the private sector. He is 
looking to make these kinds of changes.
    And I think we can find bipartisan support to get us to the 
place where we can meet that standard. And it sounds to me, 
from the testimony from our VA representatives, that on the 
preauthorized claims we are getting close to that commercial 
standard, that the complication here is on the other types of 
claims--emergency room, inpatient, et cetera.
    So I will cut my questions short, because I just would like 
to work with you all going forward to get us to this commercial 
standard. I think this is reminiscent--I am in my second term, 
but when we first got here and started having hearings about 
literally warehouses collapsing under the weight of paper 
records that were being kept in boxes Lord knows where--and I 
think what we have to do is try to get VA to the 21st century. 
And this is a clearly a place where there is room for 
improvement.
    I would like to work with VA and with my colleagues on the 
other side of the aisle to get us to that commercial standard 
so that, number one, our veterans are served best and foremost; 
number two, our small businesses are paid in a timely way to be 
vendors to our government and to our veterans; and, number 
three, the taxpayers are served. Because this particular system 
doesn't seem to be working for any of those three.
    So thank you for your patience, and we will look to work 
with VA to move forward on this.
    Thank you, Mr. Chair.
    Dr. Benishek. Thank you, Ms. Kuster.
    Mr. Coffman.
    Mr. Coffman. Thank you, Mr. Chairman.
    Well, there is just a pattern here where I bet you 3 years 
from now we will be holding the same hearing with the same 
results, and the only difference is there will be a new 
director who will have been there for 4 weeks. He will be here, 
and he will be telling the same thing that you are telling us.
    And when you have a culture that is so inbred where bad 
people can't be fired, where the good people that fundamentally 
care about serving our Nation's veterans become whistleblowers 
and they are retaliated against by the system, and the only 
people that come before this committee to represent the 
Veterans Administration are the get-along, go-along folks that 
are just good at answering questions but they are not good at 
doing anything--and so, you know, there is one solution here, 
and that is to outsource it by the people that professionally 
do this.
    I am a retired military person. I am in TRICARE. And 
TRICARE uses third-party payers that efficiently, you know, 
reimburse providers. And so it is not being done by VA, and I 
can't imagine that it will be done, but we will make changes on 
the margins, I hope, and, I guess, that is considered progress 
here in Washington, DC
    So, Mr. Migliaccio, there is a company in my district, AMR, 
American Medical Response, and I think they were owed $10 
million. Now the number is up to $12 million over 90 days. I 
understand you are having--at least there are phone conferences 
with them on a routine basis. But what plan would you suggest 
to provide AMR with some resolution to their backlog of claims 
at VA?
    Dr. Migliaccio. Thanks for the question.
    Sir, for the record, I wanted to state also, I am a retired 
uniformed officer, too, Air Force and Public Health Service, so 
I get TRICARE also.
    And we will take a look at this, but I have to tell you----
    Mr. Coffman. Well, we are both lucky.
    Dr. Migliaccio [continbuing]. We are going to get this 
done. That is why I came here. I came from Health and Human 
Services. So I chose this path to be here to make a difference.
    Mr. Coffman. Well, I hope so.
    Dr. Migliaccio. Yes, sir. But we have been having 
conversations with AMR, and I am going to let Joe handle it 
because he's been closer to it and also done some visits on 
site.
    Mr. Enderle. Thank you for the question.
    In response to the question, the ambulance reimbursement 
process is very complicated. It also falls under different 
authorities and regulations. We authorize ambulance transports, 
which falls under Beneficiary Travel. And the ambulance 
transports that are taken care of in Purchased Care are those 
transports that are associated with unauthorized and Millennium 
Health Care Act claims. Because of that, we have to meet the 
regulatory requirements. We review those claims, we review the 
clinical documentation, and then we must make a determination 
whether we can pay those ambulance claims.
    Believe me, we would like to pay all the ambulance claims 
for all veterans, because we do appreciate the fact that they 
are transporting our veterans and taking care of them. But, as 
mentioned earlier in the testimony, not all veterans meet all 
the eligibility requirements, and in order to make that 
determination, we have to do a clinical and administrative 
review.
    Many of the veterans are not eligible under unauthorized 
claims or service-connected veterans or non-service-connected 
to veterans who have no means to pay. But we take extra steps 
to ensure that those veterans' claims are reviewed thoroughly 
to make sure that if they do meet all the eligibility and 
regulatory requirements that we can pay those claims on their 
behalf.
    Mr. Coffman. Yes. And how can this problem be resolved so 
that the claims for veterans' ambulance service are not held 
hostage, waiting for records that are completely outside the 
control of ambulance service personnel?
    Mr. Enderle. We recently reviewed the processes associated 
with unauthorized and Millennium Health Care Act claims. Staff 
in the field have been informed that they could use the 
ambulance report. If they can determine it meets, you know, the 
stipulation that it was an emergency for a layman's 
interpretation and the clinical documentation on the ambulance 
report is sufficient, we are not requiring the facility 
clinical documentation to adjudicate those claims. So we have 
made a change in that process.
    Mr. Coffman. And, Mr. Montes, what type of excuses other 
than the ones that you discuss in your testimony are commonly 
heard from VISNs when they are asked about past-due ambulance 
claims? And, with your work directly with VA, have they given 
you any idea or ideas on how they plan to resolve them?
    Mr. Montes. So there is a twofold issue.
    One is those transports that are done under contract with 
VA, so they are more authorized. And when you are actually 
speaking--usually there is just one individual at that local 
facility that is doing them. So if something happens or they go 
on FMLA, a lot of times the processing just stops until they 
come back.
    If it is unauthorized or it is going through the Fee Basis 
unit for payment, we have heard every excuse. There is not 
enough time, or there are too many claims; we don't have enough 
people to process those claims. They don't call you back. They 
are taking a lot of effort to try to allow you to do more than 
four claims to check, but it is just--it is an insurmountable--
or it is the wrong VA, you need to send it to another VA, this 
VA doesn't provide 911 service.
    So the emergency benefit of it is one issue. The 
nonemergent or the transports that are actually originating out 
of VA facility is typically under authorized care, and that is 
a different issue in itself.
    Mr. Coffman. Thank you, Mr. Chairman. I yield back.
    Dr. Benishek. Thank you, Mr. Coffman.
    Dr. Ruiz, you are recognized.
    Dr. Ruiz. Thank you, Chairman Benishek and Ranking Member 
Brownley, for holding this hearing.
    And thank you to the panelists for your participation.
    Last Congress, I was proud to come together with committee 
members in both chambers to streamline VA's payment processing 
systems. As VA implements this centralized processing and 
payment system for all VA fee-basis care, we must ensure that 
the focus remain on the veterans, that inefficient 
reimbursement does not hamper veterans' access to services, 
make it harder for veterans to seek answers from VA, or expose 
veterans to financial harm. In this vein, VA must make certain 
that veterans are held harmless from any problems the agency 
has paying its bills, which are certainly no fault of our 
veterans.
    A Vietnam veteran in my district, a good friend of mine, 
who has been approved to obtain 100-percent fee-basis care for 
more than a decade, still reports frequent delays in VA 
payments to his providers. When unpaid by VA, these bills go to 
collection agencies, which can damage the veteran's credit 
rating and expose the veteran to stressful harassment from 
collection agencies and to financial harm.
    So, Mr. Migliaccio, in the interest of preventing veterans 
from enduring similar struggles, what safeguards are in place 
to prevent veterans from incurring financial harm, poor credit 
ratings because of delayed VA reimbursements to fee-basis care 
providers?
    Dr. Migliaccio. Thanks. I will start.
    We want to put some systems in place so it doesn't get to 
where the veteran is harmed at all. So we want to start from 
the front end, and that is in terms of developing really a 
solid system. And I won't get into this now to take the time, 
but I am going to focus on our people, and we are going to 
focus on business processes, and I want to look at technology, 
also, so we can prevent this from getting to our veterans.
    Dr. Ruiz. Okay. So, in other words, you are going to 
prevent it by improving----
    Dr. Migliaccio. Yes, sir.
    Mr. Ruiz [continuing]. Your reimbursements.
    However, you have hundreds, if not hundreds of thousands, 
of veterans out there who already have poor credit ratings 
because of VA's fault and no fault of their own. So what are 
you going to do about them?
    Dr. Migliaccio. Well, I have looked at the issue, and I 
have looked at the information that we have provided back to 
your office. I don't know if it is--the extent of the issue is 
there. It is not as severe as we think because our relationship 
is really with the provider. And if a provider----
    Dr. Ruiz. Time out, time out, time out.
    Dr. Migliaccio. Yes, sir.
    Dr. Ruiz. When you say it is not as severe as you think, 
now, I know that you are thinking as an epidemiologist, and you 
are looking at the big picture, and it is systemic-wide. But 
for one veteran whose credit rating makes it a matter of 
whether he can pay rent or not, it is severe.
    Dr. Migliaccio. Yes, sir.
    Dr. Ruiz. So, for those veterans, whether it is 1, 2, 10, 
20, who are barely making ends meet, if you are not paying 
their bills and they are getting poor credit ratings, they 
could be evicted, and then you have just increased your 
homeless veteran problem, right? So what mechanisms can you do 
to remedy that poor credit rating?
    Dr. Migliaccio. Well, one veteran being affected is one too 
many. We have some situations in place right now. We will go on 
behalf and work with our veterans. If this situation arises, we 
will work with the providers that sent the bills so we can 
adjudicate those claims quickly and check that out. We also 
will write letters to credit agencies to clear up credit 
reports for our veterans----
    Dr. Ruiz. Okay. So I would like you to commit to working 
with this one veteran so that we can use that as a case study 
and you can demonstrate what you can do not only for this 
veteran, for the other veterans.
    The other issue that I want to touch on is that I am very 
concerned about what just transpired here. Mr. Cook said that 
there are millions, if not billions, of dollars left unpaid, 
and, prior to that, you had said that there are no outstanding 
claims. So there are some serious discrepancies between what 
Mr. Cook said and what you are saying.
    So if you don't identify a problem, you are not even going 
to attempt to fix it. So if there are--and he can show you 
examples of late payments. So what are you going to commit to 
do to remedy and rectify this discrepancy?
    Dr. Migliaccio. Well, I will definitely work with Mr. Cook, 
and I will ask for the information that he has brought forward, 
and we will see how we can work.
    I did my research with the Veterans Health Administration 
to ensure that there were no outstanding claims there. If there 
are, I would like to take a look at them, because we are going 
to fix that.
    Dr. Ruiz. Okay. I will follow up with you and with Mr. Cook 
to make sure that these different examples are handled in a 
timely fashion so that we can get an example and maybe build 
some trust with our new Administrator here that he can 
demonstrate to us that things may change.
    So this is going to be a trust exercise between you and 
this committee.
    Dr. Migliaccio. Thank you.
    Dr. Ruiz. Is that okay?
    Dr. Migliaccio. I am on.
    Dr. Ruiz. Okay.
    I yield back my time.
    Dr. Benishek. Good. Nice job.
    Dr. Abraham.
    Dr. Abraham. Thank you, Mr. Chairman.
    Well, certainly, we have two gentlemen that do business in 
my State of Louisiana. And I appreciate the testimony of the 
three of you, because, as Dr. Benishek alluded to his opening 
statement, it takes moral courage to be here because of the 
retaliatory that VA may or may not do. So, again, I appreciate 
you three gentlemen being here.
    Mr. Montes, you said that--and Mr. Leist--that you all had 
sent certified mail and they were signed for.
    Mr. Enderle, you are telling me you are 120 days behind on 
scanning, which is fine, I guess, in a way. But the claims that 
Mr. Montes and Mr. Leist are talking about are far more than 
120 days, so hopefully they have been scanned in. But Mr. 
Montes says that he checked today with his office and there is 
still no record of those 768 claims. So I suggest that maybe VA 
has a HIPAA compliance issue also here, because you are 
responsible now for those medical records.
    I guess my question--Mr. Montes, let me ask you first. 
Based upon VA's written testimony, they indicate that many 
providers submit duplicate claims. Can you explain why this may 
be occurring?
    Mr. Montes. And this is from experience that we have 
regarding the duplicate claims.
    There are a lot of times that you can actually submit--and 
some of the veterans' claims you can actually submit 
electronically, either through a clearinghouse--they let you 
know you can send through a clearinghouse, but they will need 
the medical records, so you will have to send a paper record 
along with it. So, in our opinion, when we are actually doing 
the audit and we see that there is a mass amount of duplicate 
claims that we are getting, that that probably has something to 
do with it.
    The second thing is, especially with an authorized claim 
that we are under contract with VA, a lot of times they want us 
to send that via email to that contracting officer so they can 
first approve the claim before you submit it into their 
electronic system, which is the OB10 system. And then at that 
point in time is when the clock really starts.
    So it is--I mean, just to kind of give you an update on 
that, there is a lot of that practice happening with the 
contracting officer at the local VA. When you are contracted, 
it is: Send us the claims first, let us review them to make 
sure everything is correct, then put them into the OB10 system. 
So then the clock actually starts at that point from the Prompt 
Pay Act provision.
    So there is probably a dual thing going there, Congressman.
    Dr. Abraham. Okay.
    And a quick followup to that, and I will get to Mr. 
Enderle.
    You indicated, Mr. Montes, in your statement that your 
accounts receivables have doubled since 2014. Can you give me 
some numbers?
    Mr. Montes. Absolutely.
    Probably about 2-1/2 years ago, when we actually started 
this process, we were at about $1.2 million in aging 
receivables in 180 days. And we worked diligently with VA, with 
our local VISNs. We actually got it down the end of last year, 
around September, October, to about $500,000 over 180 days. And 
we were doing high-fives and having champagne because that was 
exciting.
    But ever since October, it has now doubled. We are back at 
about $1.8 million now.
    Dr. Abraham. Thank you.
    Mr. Enderle and Doctor, I will ask you these questions. You 
stated that the delay sometimes in processing is caused by the 
preauthorization process. Now, I have been on the doctor end of 
it, and I know that if a claim is not preauthorized it is 
usually not paid.
    And what these gentlemen here are telling us is sometimes 
they are having to stay on the phone minutes, if not hours, 
just to get a preauthorization. And I can assure you, there are 
many, many times, probably the majority of the times, that you 
can't wait to get a preauthorization on a CT, MRI, or something 
of that nature but you have to take care of that patient.
    Is preauthorization required for 911 claims?
    Mr. Enderle, I will ask you that question.
    Mr. Enderle. Thank you for the question, sir. Could you--I 
didn't hear the last part of your question.
    Mr. Abraham. Well, is preauthorization required for 911 
claims?
    Mr. Enderle. For 911 claims, where they call the emergency 
room, the veteran would--it depends. If there is a contract in 
place and the veteran meets the eligibility----
    Dr. Abraham. All right, let's get past that. But you are 
saying the answer is, then, at least some are needed to be 
preauthorized----
    Mr. Enderle. Yes, sir.
    Dr. Abraham. Okay. Well, that negates the purpose of a 911 
call to begin with. If you have to go through the 
preauthorization contract, to get on the phone, reach somebody 
that may or may not give you an answer, that you may wait 20 to 
30 to an hour long, that negates the definition of 
``emergent.''
    Mr. Enderle. If we are talking about an inpatient stay, 
however, they do have 72 hours to contact the local VA 
facility.
    Dr. Abraham. Yes, but no inpatients are 911 calls. These 
are outpatients that are having a heart attack or a stroke or 
some issue like that.
    I am out of time, Mr. Chairman. I yield back. Thank you.
    Dr. Benishek. Thank you, Dr. Abraham.
    Well, I still have one more question I want to ask. And I 
think, since we have one panel, if others would like to ask 
questions, then we will try to give people an opportunity to do 
that.
    There are so many things that I want to get at. One thing 
here that came up in some written testimony. Apparently, AMR, 
American Medical Response, referenced $12 million in backlogged 
ambulance claims. Mr. Boustany from Louisiana mentioned $878 
million in emergency care claims.

    [The prepared statement of Hon. Charles W. Boustany appears 
in the Appendix]

    Dr. Benishek. And a statement for the record by AMR said, 
``We are often told that VISNs are out of funds appropriated 
for ambulance services in their budgets and we will have to 
wait until the next fiscal year to be paid for our claim.'' 
This can occur as early as the first quarter of the year.
    Dr. Migliaccio or Mr. Enderle, how much money is currently 
available in VA's non-VA care fund?
    Mr. Enderle. The specific----
    Dr. Benishek. Some people are being told that there is no 
money in their budget to pay the ambulance; you will have to 
wait till next year.
    Mr. Enderle. Actually, that is a great question.
    Dr. Benishek. So I am trying to figure out what is the 
story with that?
    Mr. Enderle. Yes, sir. Whenever a claim is authorized, the 
obligation for the funds to pay for that authorization is 
obligated up front. There should be funds available to pay 
those claims.
    Dr. Benishek. So you don't have any idea how much money 
there is available in VA's non-VA care fund?
    Mr. Enderle. It is substantial.
    Dr. Benishek. Can you just get me that number in the next 
month?
    Mr. Enderle. Yes, sir.
    Dr. Benishek. All right. Thank you.
    The other question I want to ask is that, Mr. Montes, there 
was this meeting, apparently, in August of 2014, where AMR--and 
VA officials addressed some of the backlog issues. You guys had 
a conversation about how things were going to get better, and 
we are going to work on things, and you made some 
recommendations and offers for collaboration and problem-
solving.
    Did anything happen after that meeting and collaboration? 
Did things improve? That is what the whole process we are 
trying to figure out today is, can VA learn from you guys and 
make things better. What has happened since then?
    Mr. Montes. So this was a collaboration with American 
Medical Response and Acadian Ambulance Service when we met in 
Atlanta, Georgia, with the national VA facilities as well as 
several representatives from the VISNs. It actually got 
probably a little better. They started actually having phone 
calls. They were trying to research, try to figure what things 
happened.
    But whenever VA Choice Act was implemented, things just 
started to break down at that point. And my colleagues at 
American Medical Response, even with their phone calls that 
they were having every other week, it just seemed it was the 
same information being given back to them.
    Dr. Benishek. Rehashed.
    Mr. Montes. So it started off good. It started off as a 
partnership. And then it just kind of became one-sided at that 
point, because then there was just a lot of inaction.
    Dr. Benishek. Right. Right. That is the problem we have.
    Ms. Brownley, do you have a question?
    Ms. Brownley. I do. Thank you, Mr. Chairman.
    It was said earlier, I think by Mr. Migliaccio, that you 
have paid $200,000 worth of late interest payments. Was that 
within the last year or within the last couple of years?
    Dr. Migliaccio. Last fiscal year.
    Ms. Brownley. This fiscal year?
    Dr. Migliaccio. This fiscal year.
    Ms. Brownley. So I just wanted to ask the other panelists 
if you have received late interest payments on any of the bills 
that have been resolved with you.
    Mr. Cook. I don't believe so. I don't know that there is a 
process. You know, once the form that is sent in for the 
adaptive equipment on there, it is what the total is. You don't 
want to restart the process again to go back and add interest.
    Ms. Brownley. Yes.
    Mr. Cook. So I don't know that our members know how.
    I would like to clarify something that VA said about NGO-
certified programs. They do have those with service animals 
right now. They do this on anything that VA doesn't have 
specialty, that are specialized industries, like ours. And we 
did not--sure, we would like for them to endorse our QAP 
program, quality assurance program, but we had just asked for 
basic criteria. We will settle for that.
    Ms. Brownley. And I hear you on that and also believe that 
something absolutely needs to be done.
    Any late interest payments that you have received, Mr. 
Leist?
    Mr. Leist. Thank you for the question. No, we have not 
received any late interest payments at all.
    But I want to take just a moment to clarify something I had 
in my testimony. I had stated that our hospital had decided not 
to contract with the Veterans Choice Program. And the reason we 
had done that was because we are not in the position, a small 
hospital in northern Arkansas, to contract for additional bad 
debt. In other words--and I want to state clearly that if the 
process improves we will contract to do those services.
    But I also want to say that we will never turn away a 
veteran in our facility for any reason. So, until this gets 
resolved, we will continue taking care of those veterans, 
without question.
    Ms. Brownley. Well, thank you for that, Mr. Leist.
    Mr. Montes.
    Mr. Montes. The main issue is with the Millennium bill and 
with the unauthorized care to the emergency--when you look at 
it, our company actually did an estimation for fiscal year----
    Ms. Brownley. I was just wondering if you had received any 
interest----
    Mr. Montes. No, we have not.
    Ms. Brownley [continuing]. Late interest payments.
    Mr. Montes. No, ma'am.
    Ms. Brownley. Thank you. Thank you.
    Dr. Migliaccio, so who do you report to exactly?
    Dr. Migliaccio. I report to the Chief Business Officer.
    Ms. Brownley. To the Chief Business Officer. So is he, you 
know, the person who is ultimately responsible for all of these 
issues?
    Dr. Migliaccio. Well, the Chief Business Office reports up 
to the leadership over at VHA.
    Ms. Brownley. So the Chief Business Officer reports to the 
Secretary?
    Dr. Migliaccio. No, reports to one of the under 
secretaries.
    Ms. Brownley. To one of the under secretaries. Okay.
    So do you have some sense--well, let me go back on the 
interest payment thing. So, if you are saying $200,000 of late 
interest payments for this fiscal year, I don't know what the 
formula is for late interest, but, you know, what is the common 
denominator here? So how much of outstanding or late payments 
have there--I mean, what is the number for that? So is it a 
million dollars? So you have $200,000 of late payments. Can you 
give me a sense of that?
    Dr. Migliaccio. Without--I really will have to get back 
with you on that. I don't know the interest rate and what it 
was based on.
    Mr. Enderle. If I could supplement his comments, the 
interest payments are paid when the payment goes through the 
system. So, on the back end, when FMS cuts the check, if it is 
a contract payment, and only if it is a contract payment, would 
interest be applied, because we have a contract in place.
    Ms. Brownley. Okay. But I am just saying, if there are late 
payments of $200,000, it is based on, you know, late payment to 
vendors and the contracts that you have, and I am looking for 
what that number is. Because, based on the testimony we have 
heard so far, it seems like, you know, it is millions and 
billions of dollars, and the $200,000 late payment just doesn't 
add up for me. So I am just trying to sort of reconcile that.
    Dr. Migliaccio, so, you know, you are new, and we recognize 
that it is hard to come into a new position in 4 months and 
truly get your arms wrapped around, you know, all of the 
problems and how to resolve it. And I think it takes a little 
bit more time than that.
    But, you know, I am just curious, you know, to hear from 
you when you think you will get your arms wrapped around the 
whole problem and when you would be able to present, you know, 
a full plan to the committee and a timeframe of which you see 
success down the road. So can you give me just a little bit of 
a sense of that?
    Dr. Migliaccio. Well, in my--thanks for the question.
    I mentioned before that I am framing the assessment that I 
am doing right now in the new position looking at our people, I 
am looking at all of our processes, and I am looking at 
technology. I have kind of defined where are the areas that I 
want to look at, and claims is number one. Number two on my 
list is the Choice Program, and I want to work with PC3----
    Ms. Brownley. Do you have a sense of how many more people 
you need to hire?
    Dr. Migliaccio. Yes. When we onboarded--we onboarded about 
2,000 positions we received for the transfer from our VISN and 
medical centers. It was really 1,982. We only have----
    Ms. Brownley. Those were unfilled positions?
    Dr. Migliaccio. No. Those are--those are the positions that 
came over. Not all the bodies were in those positions. So, 
currently, we have around 220 vacancies.
    And I think, once we can get our staff hired, trained, and 
motivated on the work that we have in front of us, it is a very 
mission-driven organization----
    Ms. Brownley. So how long would that take, to hire 220 
people?
    Dr. Migliaccio. Well, I am a little fast on how I approach 
an organization, so I would like to see it done yesterday. But 
I think it is going to have to take us a minimum of 3 months, 
working through the personnel system, to bring people on board.
    Ms. Brownley. So you believe by 3 months, though, you would 
be able to hire 220.
    Dr. Migliaccio. That is a goal. And I hope it is not a 
stretch goal.
    Ms. Brownley. I yield back, Mr. Chairman.
    Dr. Benishek. Thank you.
    Dr. Huelskamp, do you have any more questions?
    Dr. Huelskamp. I do, Mr. Chairman. I wanted to follow up on 
an earlier issue and try to understand the distinction from the 
gentleman from VA, as far as authorized and unauthorized care.
    Oncology, cancer care, is that generally preauthorized, or 
it is after the fact? Because the instance that has been shared 
with VA over a month ago that we are talking about, that was 
for cancer care.
    Dr. Migliaccio. Well, I will let Joe handle this. But if it 
is--if VA is going to send a veteran out from one of the 
medical centers into the community for care, we are going to 
get a preauthorization and make that appointment.
    Dr. Huelskamp. I would hope so.
    Dr. Migliaccio. Yes, sir.
    Dr. Huelskamp. But, again, this is--then, in that case, as 
I would anticipate, it is preauthorized, and we are still 
waiting back on the 120 days to scan the claim. And so--but 
that was always for unauthorized care.
    So do you know--I mean, you have had this complaint from us 
for a month. I would presume it is preauthorized, then.
    Mr. Enderle. If it is the oncology----
    Dr. Huelskamp. Yes, sir.
    Mr. Enderle [continuing]. It would be preauthorized, yes, 
sir. And that claim for outpatient services should be paid 
without any requirement for clinical documentation.
    However, the clinical documents that there is a delay in 
scanning at this location, we are working with the local VA 
medical center medical records department to make sure that 
we--and, in fact, we have moved some of our staff over there to 
assist them with scanning that clinical documentation to catch 
up with that backlog.
    Dr. Huelskamp. That is what is confusing me. It is 
preauthorized, so scanning has nothing to do with it, the 
scanning delay. But that is what you told the oncology folks, 
that that is the reason. So that was inaccurate, then?
    Mr. Enderle. Based on what I saw in that document, that 
would be inaccurate.
    Dr. Huelskamp. Okay.
    Mr. Enderle. They should be able to process the claim for a 
preauthorized claim without clinical documentation if it was 
for outpatient services.
    Dr. Huelskamp. Okay. Well, we sent the issue to you weeks 
ago, and I don't know if you ever scanned in our email to you 
about it, but maybe that is the problem, as well. So we are 
still waiting for you to respond, to respond to them, and still 
maintaining with them somehow it is a scanning issue, but it 
clearly is not, then.
    So how soon will you have an answer for making certain 
these veterans can still go to preauthorized oncology care 
without having to get in a vehicle and driving a long ways? So 
when will we get an answer for them?
    Mr. Enderle. From what I understand, the answer to your 
inquiry is going through concurrence at this time.
    Dr. Huelskamp. Describe ``concurrence.''
    Mr. Enderle. Concurrence, our leadership concurrence. Once 
the response is concurred on, it will be sent to you.
    Dr. Huelskamp. Okay. Describe that. Who is concurring in 
this?
    Mr. Enderle. We draft the response to your inquiry; then it 
is routed through concurrence and released.
    Dr. Huelskamp. The real issue, when will they get paid for 
helping the veterans and providing the care that you 
preauthorized?
    Mr. Enderle. The paid part should have already been 
processed. In other words, if they already invoiced us for the 
oncology care, we received an EDI claim. That claim should have 
been processed and paid already--within 22 days, on average.
    Dr. Huelskamp. Okay. It has not. I mean, that is my 
question.
    Mr. Enderle. Okay.
    Dr. Huelskamp. It has been more than 22 days since we 
contacted you about that. So you should be paying interest, 
significant amounts of interest, on that.
    But, clearly, you don't know. It hasn't been paid that we 
know of.
    Mr. Enderle. We need to look into it to see what the status 
of that claim is, sir.
    Dr. Huelskamp. Okay.
    And another issue, just trying to clarify and understand 
the process. I have another issue with a doctor of 
chiropractic, that you called him and said, hey, would you 
treat this patient for us? So I presume it is preauthorized.
    Mr. Enderle. Yes, sir.
    Dr. Huelskamp. So, again, it is not a scanning issue.
    They started treatments in September and still waiting. You 
called him, said, hey, can you take care of him because it is a 
long ways from Wichita.
    So is this the case, again, that--not a scanning issue--it 
simply is a payment problem in this whole section of 
preauthorized care?
    Mr. Enderle. It sounds to me that that is a payment 
problem, yes, sir.
    Dr. Huelskamp. Okay.
    Thank you, Mr. Chairman.
    Dr. Benishek. Mr. Coffman.
    Dr. Abraham, any questions?
    Dr. Abraham. Yes. Thank you, Mr. Chairman.
    The three witnesses from the private sector, I am assuming, 
with your testimony, that the fiscal intermediary such as 
Medicare and the tracker used would be certainly better than 
this system that we have now. Would that be a statement we 
could agree with?
    Mr. Leist. Yes, sir.
    Dr. Abraham. Okay.
    And I will go to you, Doc and Mr. Enderle, that we 
understand, and I have no doubt, personally, that your heart 
and mind is in the right place for our veterans. I think 
everybody in this room and on this panel agree. But, again, we 
are dealing with government bureaucracy. And I won't be quite 
as nice, I guess, as Ms. Brownley as far as giving you guys 
time to hire.
    Why not take the $200,000 on interest--and we know in this 
room it is going to be a lot more once that back money comes 
in--pay all the claims, and then go back to the providers on 
the unclaimed claims and maybe let them reimburse you?
    We are talking about veterans that are getting--I have a 
list here of veterans that are having negative credit ratings. 
I would imagine--and you can correct me, Mr. Enderle, if I am 
wrong--that the number of veterans that don't qualify for 911 
services are very small compared to the overall.
    Why not pay the claims, use some of this money we are 
paying in interest, and then, if you do find an unclaimed claim 
that does not qualify, so to speak, well, go to Acadian, go to 
Cook, and then let them reimburse? But don't hold up millions 
of dollars that these gentlemen are providing for our heroes, 
trying to do the right thing, and they are getting left holding 
the bag.
    I have a surgical hospital in my district, as I have said, 
that, to their disappointment, to their severe disappointment, 
have had to stop servicing veterans. We wrote VA about it. I 
have yet to receive any response. And this goes back a few 
months ago that I have yet to get a response as to why this has 
happened.
    But, again, we go back--this is just such an unacceptable 
procedure. I am just looking for some comments here.
    Mr. Enderle, I will take yours.
    Mr. Enderle. Thank you for the question. That is a very 
good question. I wish we could just process the claim for 
payment and issue the check on behalf of our veterans, who 
deserve the best from us.
    Because of regulatory requirements, we have to determine 
eligibility criteria of that individual veteran who the claim 
is submitted on. And that process requires us, based on 
regulation, that if that veteran does not have preapproval or 
preauthorization, that claim, in essence, becomes what we call 
an unauthorized----
    Dr. Abraham. Well, I understand the process, but is that 
regulation dictated by VA itself? Is that the rule that VA put 
in place?
    Mr. Enderle. It is both regulation and statute. So it is a 
requirement that we have to determine eligibility based on 
those claims that had not been prior-authorized. That prevents 
us, based on the eligibility, to make that lump-sum payment 
that you are referencing.
    Dr. Abraham. Well, perhaps we can work on that.
    Mr. Enderle. Yes, sir.
    Dr. Abraham. Okay.
    Thank you, Mr. Chairman. I yield back.
    Dr. Benishek. All right. Thank you, Dr. Abraham.
    I just have one more question for--maybe Mr. Enderle can 
answer it. I don't know if you can do it, Doctor.
    But I just got some information that the non-VA care budget 
for fiscal year 2015 was set at, $5.4 billion, but then 
apparently VA withdrew $700 million from that to cover 
hepatitis C medication that has become expensive for VA. We are 
also told that is why VA is making the Choice Program the 
default option for outside care.
    Is that true? Anybody aware of that?
    Mr. Enderle. I am not aware of----
    Dr. Benishek. Are there any other deductions from this 
account for other VA expenses that anyone is aware of?
    Mr. Enderle. I am not aware of any other deductions.
    Dr. Migliaccio. I am not either.
    Dr. Benishek. So what I would like to get to, then, is what 
is the money remaining in that non-VA care fund for the 
remainder of the fiscal year? So that is the number that I am 
expecting from you all within the next month, okay?
    Dr. Migliaccio. Chairman, is that under the Choice fund?
    Dr. Benishek. Well, no. No, there is the non-VA care 
budget.
    Dr. Migliaccio. Okay.
    Dr. Benishek. And then, we have been told that the Choice 
has now become the default non-VA care option because of the 
diminished amount of this fund due to other expenses. And I am 
just trying to find out if this fund is being used for other VA 
expenses and making it more difficult to get outside care.
    Dr. Migliaccio. Not to my knowledge, but we will check into 
it, sir.
    Dr. Benishek. Well, I understand that hepatitis C treatment 
is becoming expensive, but we need to deal with that and not 
cut back on this part of care, as well.
    Thank you all for being here today. I really appreciate it. 
It has been enlightening. I appreciate the providers' being 
here today and, actually, as many have said, for your 
willingness to be here today and take the heat from VA for what 
you are doing. If you hear from them in a negative fashion, I 
would appreciate hearing from you.
    And I appreciate both your presence here today, Doctor and 
Mr. Enderle. I know what kind of a situation you are in, but I 
am trying to hold people personally responsible for what they 
are doing here. Because, typically, we get great responses from 
VA, but then 6 months later, nothing has changed and there is a 
different person giving us a great response. So it is very 
frustrating on my part. The accountability of individuals is 
paramount here.
    So thanks, all, again.
    The subcommittee may be submitting additional questions for 
the record, and I would appreciate your assistance in assuring 
expedient responses to those inquiries.
    Dr. Benishek. If there are no further questions, the panel 
is now excused.
    And I ask unanimous consent that all members have 5 
legislative days to revise and extend their remarks and include 
extraneous material.
    Without objection, so ordered.
    The hearing is now adjourned.
    [Whereupon, at 11:35 a.m., the subcommittee was adjourned.]

                                APPENDIX

                   Prepared Statement of Asbel Montes

    My name is Asbel Montes and I am the Vice President of 
Reimbursement and Government Affairs for Acadian Ambulance Service, the 
largest private, employee-owned ambulance service in the nation. The 
Chairman & CEO of our company, Richard Zuschlag, founded the ambulance 
service division in 1971 with eight Vietnam veterans. Today, we now 
have over 4,000 employee owners, with over 400 of those owners being 
military veterans.
    I am honored to sit before you today to represent not only the 
industry, but even more so, the veterans we serve.

Background

    Prior to coming before you today, our company, along with American 
Medical Response, the largest public ambulance provider in the nation, 
and the American Ambulance Association have worked diligently with our 
Congressional delegations, other healthcare stakeholders, the Veteran 
Integrated Network Services (VISNs), as well as the national leadership 
at the VA to assist, recommend and frankly demand that the VA's 
internal processes be updated and modified to ensure that they are 
fulfilling their intended purpose, but also not placing financial 
burden on the men and women who have served our nation so selflessly.
    Despite these efforts, we have not seen any significant positive 
movement from the VA and therefore find ourselves here today.
    For a real life look at the issue, please allow me to provide one 
example that a veteran in Louisiana experienced who called 911 for 
emergency medical care and transport in 2014. We filed a claim and 
provided all necessary medical records and appropriate documentation 
within 30 days to the VA. We sent this information via certified mail. 
The VA signed for it confirming receipt five days later. Almost a year 
later on March of 2015, the veteran appeared on two local TV channels 
describing how his claim was still unpaid. He was subsequently 
contacted by a VA representative on March 18, 2015, indicating that his 
claim would be paid and he would receive notification. The claim was 
finally processed and paid in April of 2015, over a year and 3 months 
from the time the claim was originally filed.
    There are many more examples just like this one that could be given 
by providers and veterans alike across the nation, but suffice it to 
say, the GAO report in 2014 which highlighted issues regarding 
excessive claims processing times and paperwork requirements for non-VA 
providers is absolutely correct. This problem is especially acute for 
the majority of ambulance service providers that serve as the local 911 
responders in their communities, who are prohibited from refusing 
emergency treatment for any patient, regardless of payor source or 
ability to pay. This failure to pay providers in a timely and accurate 
manner puts providers in the difficult position of having to bill 
veterans for emergency treatment, placing an unfair financial burden on 
the veteran due to the lack of response, invalid denial or payment by 
the VA.
    Our previous efforts at addressing this issue have included 
numerous inquiries sent from Congressmen and Senators in many states 
and the responses from the VA have remained wholly inaccurate and 
inadequate.
    My colleagues and I are not ignorant to the magnitude that this 
issue presents for the VA. However, after numerous offers of assistance 
and requests for relief from the private and public sector, we have 
seen very little change. In fact, our company, American Medical 
Response, and many members of the American Ambulance Association have 
seen a recent escalation of the problem with our accounts receivables 
due from the VA growing in excess of $30M outstanding over 90 days.
    VISN 16 has sent reports to our Congressional Delegates with a 
number that would indicate improvement, but our data clearly indicates 
the opposite. On May 14th of this year, we had yet another conference 
call with VISN 16, specifically the Flowood, MS office and requested 
that they provide us with all claims filed to them since 2012 in order 
to reconcile our records with theirs. That audit, which was completed 
on last Tuesday, indicated that they showed no record of 768 claims 
which were sent certified mail with confirmation of receipt by the VA.

Solution

    2The federal government has a responsibility to ensure that our 
veterans receive the best healthcare we can provide. It also has a 
responsibility to ensure they are not required to bear an unjustified 
financial burden because the VA fails to pay non-VA providers in a 
timely and accurate manner. It is our recommendation that Congress 
remove all claims processing for non-VA providers from the Department 
of Veterans' Affairs and place it with a single Fiscal Intermediary, 
providing guidelines and policies to address the issues stated here 
today. This step would ensure consistency, efficiency and expertise in 
personnel as well as sufficient dedicated resources to process claims 
timely. Several other government programs, including Medicare and 
Tricare, utilize this strategy successfully. Please note that time is 
of the essence.
    Thank you for giving me this opportunity to provide information and 
to serve those who have sacrificed so much for our nation. I look 
forward to answering the Committee's questions and serving as a 
resource as the Committee's work continues beyond this hearing.

                                 ______
                                 
                                 
                   Prepared Statement of Vince Leist

    On behalf of the American Hospital Association's (AHA) nearly 5,000 
member hospitals, health systems and other health care organizations, 
and its 43,000 individual members, I thank you for the opportunity to 
testify on the Department of Veterans Affairs' (VA) ability to promptly 
pay non-VA providers and the challenges hospitals and health systems 
throughout the country have faced in receiving payment for services 
provided to our veterans.
    I am Vince Leist, president and CEO of North Arkansas Regional 
Medical Center (NARMC) located in Harrison, Ark. NARMC is county-owned 
and operated by a not-for-profit health care system serving the 
comprehensive health needs of rural communities in northern Arkansas 
and includes a 174-bed hospital and three rural clinics. We also 
provide hospice, home health, urgent care and ambulance services and 
operate six primary care clinics. With 101 staff physicians and nearly 
800 employees, NARMC is the second-largest employer in Harrison County. 
Like every community in America, we are proud of the men and women who 
have served our great nation, and we are eager to serve them. These 
brave veterans are our neighbors, and as a small community, we know 
them well and are honored to care for them in their time of need.
    America's hospitals strive to ensure patients get the right care at 
the right time, in the right setting. As such, they have a long-
standing history of collaboration with the VA and are eager to assist 
the department, and our veterans, in any way they can, including 
providing care through the Veterans Choice Program, the Patient-
Centered Community Care (PC3) program, direct contracting with the VA 
and, of course, serving the urgent health care needs of our veterans as 
they arise when there is or is not a contract with VA in place. 
However, hospitals' continued inability to obtain timely payment from 
the VA and its contractors hinders access to care for veterans who need 
non-VA services and undermines the viability of non-VA hospitals across 
the country and the essential services they provide to their 
communities.
    We also are concerned about the process by which the VA processes 
claims. Medical records have been lost or unaccounted for, leading to 
questions of privacy for our veterans. Unfortunately, there are no 
prompt payment laws for care that is provided to veterans if the 
hospital does not have a contract, and there is limited oversight of 
how these claims are processed. In addition, many veterans worry about 
claims that are not paid promptly or are left unpaid, and they are left 
in a difficult position of trying to get claims paid, often while 
battling illness. It is an untenable position for both veterans and 
hospitals.
    Below, I outline why the lack of prompt payment impedes access to 
care for veterans and offer recommendations to address this important 
issue to ensure that high-quality care is provided to veterans and our 
communities.

Background On Veterans Choice Program

    The Veterans Choice Program is a new, temporary benefit allowing 
some veterans to receive health care from non-VA health care providers 
rather than waiting for a VA appointment or traveling to a VA facility. 
It was authorized under the Veterans Access, Choice, and Accountability 
Act of 2014 and provides $10 billion for non-VA medical care to 
eligible veterans until the required end date of Aug. 7, 2017. The 
temporary program will end early if the allocated funds of $10 billion 
are used prior to that date.
    While we understand that the VA had an extraordinarily short 
timeframe in which to implement the program, hospitals, as well as 
veterans, have faced many roadblocks when attempting to provide and 
access care under the program. These roadblocks have resulted in a very 
small number of eligible veterans being able to access the program. 
With our shared goal of ensuring that America's veterans receive the 
care they need at the time they need it, the AHA in March provided the 
VA with suggestions for improving the Veterans Choice Program with 
respect to the mileage requirement, timely payment of claims and 
contracting to provide care.

Lack of Prompt Payment Hinders Access to Care for Veterans

    Non-VA providers have experienced and continue to face problems 
obtaining timely payment from the VA and its contractors. This hinders 
access to care for veterans who need non-VA services and is a 
disincentive for non-VA hospitals to either participate in the Veterans 
Choice Program, the PC3 program or to contract with the VA to provide 
healthcare services to veterans.
    Last June, a witness from the Government Accountability Office 
(GAO) testified at a House Committee on Veterans' Affairs hearing on 
claim-processing discrepancies that delayed or denied payments for 
health care provided by non-VA providers. According to GAO, these 
delays or denials create an environment where non-VA entities are 
hesitant to provide care due to fears they will not be paid for 
services provided. In addition, a March 2014 GAO report found a non-VA 
hospital often either received no response after claims were sent to 
the VA or experienced lengthy delays, in some cases of years, in the 
processing of their claims. The hospital had approached the VA to try 
to discuss ways to improve the claims process, but those efforts were 
unsuccessful.
    Last month, at a hearing before the full House VA committee, VA 
Deputy Secretary Sloan Gibson acknowledged the lack of timeliness in 
promptly reimbursing non-VA hospitals and expressed his commitment to 
improve the payment process. Hospitals and health systems welcome that 
commitment from the VA leadership; however, many non-VA hospitals have 
outstanding payments spanning many months--and some date back for 
years--so it is essential to work quickly to solve the problem of not 
paying promptly.
    NARMC strongly believes that we need to serve the needs of our 
veterans. The closest VA health facility to NARMC is a small VA 
outpatient clinic down the street from the hospital. The closest VA 
hospital is 70 miles away, and the nearest non-VA hospital is 60 miles 
away. NARMC regularly accepts patients who are seen at the VA 
outpatient clinic but are too sick to travel to the VA hospital or any 
other hospital. These veterans are referred to our hospital by the VA 
outpatient physician. We also regularly see veterans who come to our 
emergency room because they have an urgent health care issue. Our 
mission is to heal, and while we wish we did not have to focus on the 
financial responsibility of running a hospital, we must--that is the 
only way we can keep our doors open. While we are very dedicated to 
serving the veterans in our community, and we accept each and every one 
who walks through our doors, we have decided against contracting with 
the VA due to slow or no payment for claims and the bureaucracy 
involved with getting claims through the payment process.
    Since 2011, NARMC has 215 claims totaling more than $750,000 that 
have not been paid by the VA. NARMC has attempted to work with the VA 
to resolve these claims; however, those efforts have resulted in, among 
other frustrations, long periods on hold to speak to VA service 
personnel, limitations on the number of cases to be discussed per phone 
call and lost medical records. In Arkansas, NARMC is not alone in not 
receiving prompt pay for services it provides veterans. More than 4,400 
claims - many dating back more than three years - totaling $24 million 
is currently owed to 60 Arkansas hospitals that are non-VA providers, 
according data from the Arkansas Hospital Association. Our elected 
officials have attempted to assist us with this difficult situation, 
but those efforts have had limited success. Additionally, in March, the 
VA reported a national backlog of more than $878 million in delayed 
payments for veterans' emergency medical services delivered by non-VA 
providers.
    Even though NARMC has not been paid by the VA for services going 
back four years, our hospital continues to provide care for the 
veterans in the communities we serve. However, lack of prompt payment 
from the VA combined with continued reductions to Medicare and Medicaid 
payments for hospitals are jeopardizing access to care for patients. 
From 2010 to 2014 alone, Medicare and Medicaid payments for hospital 
services were cut by more than $121 billion. In addition, government 
programs continue to pay less than the cost of providing services to 
their beneficiaries--underpayment by Medicare and Medicaid to hospitals 
was $51 billion in 2013 alone. Lack of adequate and prompt payment is 
particularly challenging for small and rural hospitals that already are 
contending with challenges such as remote geographic location, small 
size, limited workforce, physician shortages and often constrained 
financial resources.
    If the VA does not pay claims promptly and further reductions in 
payments for hospital care continue, NARMC would be forced to reduce or 
eliminate services offered to patients or seek assistance from already-
strapped counties in Arkansas. For example, our hospital offers life-
saving ambulance services to four counties in rural Arkansas with no 
support from tax dollars, but those services could be scaled back or 
eliminated. Many hospitals throughout the country would have to make 
similar decisions, resulting in decreased access to care for patients 
and communities. We want to continue to provide essential health care 
services to our communities, including our veterans, but will not be 
able to do so without the proper resources, including prompt payment 
from the VA.

Recommendations to Ensure Prompt Payment

    As required by the Veterans Access, Choice and Accountability Act, 
the VA must establish a nationwide claims processing system to receive 
requests for payment and to provide accurate and timely payments for 
claims. However, an interim final rule implementing the law does not 
set forth the timeframes within which the VA must review claims and 
make payment. The VA and its contractors should commit to paying non-VA 
hospitals in a timely manner for Veterans Choice Program services, as 
well as other services provided to veterans. Specifically, the VA 
should:

         Review claims as soon as practicable after receipt to 
        determine whether they are proper. When a claim is determined 
        to be improper, the department should return the claim to the 
        hospital as soon as practicable, but no later than seven days 
        after its initial receipt. The VA also should specify the 
        reasons why the claim is improper and request a corrected 
        claim.
         Pay claims within 30 days of the receipt of a proper 
        claim.
         Make interest payments to hospitals when claims are 
        not paid according to the 30-day standard.

    In addition, Congress should consider requiring the VA to develop a 
metric to measure effectiveness in its claims processing, including 
soliciting feedback from non-VA providers, and have the VA report to 
Congress on a regular basis the information it obtains on the 
effectiveness of its claims processing.

Conclusion

    The VA health system does extraordinary work under very difficult 
circumstances for a growing and complex patient population. While the 
system is working to overcome operational challenges, America's 
hospitals are eager to assist the department, and our veterans, in any 
way they can. The AHA stands ready to work with the committee to ensure 
prompt payment to non-VA providers so that hospitals can continue to 
provide vital services to veterans and all of the patients and 
communities they serve.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 

             Prepared Statement of Gene Migliaccio, Dr.P.H.

    Good morning, Chairman Benishek, Ranking Member Brownley, and 
Members of the Committee. Thank you for the opportunity to discuss the 
VA's reimbursement efforts for non-VA care providers. I am accompanied 
today by Mr. Joseph Enderle, Director, Purchased Care Operations.
    VA provides care to Veterans directly in a VHA facility or 
indirectly through contracts, including contracts formed when providers 
accept individual authorizations, or through reimbursements, such as 
for emergency care. This mix of in-house and
    VA Community Care provides Veterans the full continuum of health 
care services covered under our medical benefits package. VA's care in 
the community programs are designed to ensure high-quality care is 
provided effectively and efficiently to Veterans.
    As Deputy Secretary Gibson remarked to the full House Committee on 
Veterans' Affairs at a hearing on May 13, 2015, VA understands the 
importance of complying with requirements of the ``Prompt Payment Act'' 
and making timely payments to community medical care providers. The 
organizational changes, implemented in Section 106 of the Veterans 
Access, Choice, and Accountability Act of 2014 (Veterans Choice Act), 
which consolidated payment of claims under centralized authority, serve 
as the basis for further improvements in making prompt payments.
    Section 106 of the Veterans Choice Act required the Department to 
transfer authority to pay for health care furnished through VA 
Community providers and the associated budget to the Chief Business 
Office--Purchased Care (CBOPC) no later than October 1, 2014. VHA met 
this target and quickly re-aligned more than 2,000 positions and over 
$5 billion dollars in health care funding to CBOPC from the Veterans 
Integrated Service Networks (VISN) and VA medical centers. This 
realignment established a single, unified shared services organization 
responsible for payment functions and centralized management allowing 
us to leverage business process efficiencies going forward.
    VA has experienced tremendous growth in the volume of claims 
provided by community providers since implementation of the Accelerated 
Care Initiative which began on Wednesday, May 21, 2014. VHA has 
received 34 percent more claims from
    January 2015 through April 2015 compared to January 2014 through 
April 2014. Our current standard is to have at least 80 percent of our 
claims inventory under 30 days old. VHA staff makes every effort to 
ensure claims are processed timely. Processing timeliness is measured 
from the point the claim is received to when the claim is processed, 
and as a result, marked as complete. As of May 22, 2015, our nationwide 
performance was 72.50 percent, and if our metric was aligned with 
Medicare processing standards for other than ``clean claims'' (45 
days), our performance would be at 76.15 percent. A ``clean claim'' is 
a claim that has no defect or impropriety, such as a coding error.
    However, when claims without authorization are received from 
Community Providers , VHA reviews all authorities to ensure those 
claims are adjudicated based on the Veteran's eligibility. Claims 
received by VA without prior authorization is one significant factor in 
the delay of claims processing.
    Information on community care is available to Veterans on the VA 
website as well as the Federal Benefits for Veterans, Dependents, and 
Survivors booklet. Based on regulatory and statutory authority, all 
Veterans are not eligible for community care in all situations. An 
example would be when a claim is received for a non-service connected 
Veteran who also is not enrolled in VA care. When claims are denied, 
Veterans are notified timely along with their right to appeal. As 
detailed later in the testimony, VHA staff are also reaching out to 
Community Providers and providing resources to educate them on Veteran 
eligibility and timely notification requirements.

Improvement Strategies

    VA acknowledges that claims processing timeliness must improve. As 
a result, we are in the process of refining and implementing standard 
processes and performance targets, and monitoring to ensure processing 
activities are performed and measured consistently across VA. This will 
enable us to deliver exceptional customer service to Veterans and 
Community Providers.
    In an effort to better process claims, CBOPC established the 
Support Claims Processing Division (SCPD) in March 2015. The SCPD was 
established in the Denver location to assist with processing claims 
when sites have high turnover, when sites receive a sudden increase of 
claims, and to assist with verification of claims. To address the 
increasing inventory and work the growing backlog, CBOPC identified a 
need to add more staff to SCPD in Denver. However, available space was 
not sufficient to add additional staff, so SCPD established a second 
shift to better utilize existing space. VHA is currently in the process 
of implementing second shifts at other claims processing centers across 
the country. The new shift has the benefit to VHA of opening 
recruitment to a pool of candidates seeking to work non-traditional 
hours for the Federal Government.
    Additionally, CBOPC established a contract to add offsite contract 
staff support to process claims at those sites which have significant 
claims inventories. The first task order was issued in May 2015 to 
provide claims processing staff support to process 400,000 invoices, 
with a projection to increase processing to 600,000 claims by the end 
of this fiscal year. Currently, 145 full-time employees and contractors 
are onboard at SCPD. Over 40 more should be added by the end of June 
2015, with additional staff projected to be added to a night shift by 
the end of September 2015. VHA continues to explore ways to add 
resources to better comply with the Prompt Payment Act and ensure that 
our community partners are well situated to continue providing care to 
our Nation's Veterans. In compliance with the Veterans Choice Act, 
approximately 2,000 positions were transferred from VISNs and VA 
medical centers to the VHA CBOPC. VHA has advertised positions for 
claims processing at over 75 different geographical locations and plan 
to hire up to an additional 220 full-time employees. We are also 
advertising an open-continuous Merit Promotion Announcement for Voucher 
Examiners to include targeting special appointment candidates.
    Currently, VHA is implementing technical fixes and process changes 
for issues preventing claims from being processed in a timely manner. 
All community care referrals require authorization. To obtain 
authorization in an emergency care situation, a Veteran should contact 
the closest VA medical center within 72 hours of admission to community 
care. Without the authorization, claims cannot be processed delaying 
payment processing. In some cases, authorizations are not entered 
timely in the VA payment system due to the administrative process. This 
is a processing issue we realize we must resolve. To address those 
situations, we are working with non-VA Care Coordination Staff to 
ensure authorizations are entered before a claim is received.
    Many community providers submit duplicate claims, due to the fact 
that their original claim was not paid in a timely manner. In an effort 
to identify duplicate claims within the payment processing system, 
software scripts were developed to identify the duplicates which will 
reject duplicate claims, leaving the oldest claim in inventory for 
processing.
    VHA is continuing to find ways to improve our systems. Currently, 
we are working with the VA Center for Applied Systems Engineering to 
standardize business processing to increase efficiencies and reduce 
variation using Lean methodology. Starting in July 2015, testing of the 
standardized business processing will take place in VISN 19. National 
employee performance standards are being developed to improve 
accountability and performance. Lastly, a Centralized Call Center Pilot 
is underway in VISN 16, with calls being answered by CBOPC staff in 
Denver. This pilot has dramatically reduced customer service wait times 
and abandonment rates. We have also completed technical site visits to 
evaluate how well the current software design is meeting business needs 
in order to implement corrective actions.
    Another important aspect is our improved outreach efforts with 
stakeholders. We are finding better and more frequent ways to 
communicate the status of claims processing timeliness with non-VA care 
providers, Members of Congress, and Veterans. Ongoing training is being 
provided to community providers on the resources available to address 
the provider accounts receivables reports, to include monthly calls 
held with providers on account claim concerns. Later this year, we hope 
to begin distributing quarterly bulletins to providers on claims 
processing changes and issues. A future project could include 
developing a claims status portal for providers to access claims status 
information. Call Center staff will receive refresher training to 
address unique community provider issues.

Process Improvement Results

    Our recent actions have had a significant impact in processing 
volume. From January 2015 to May 2015, VHA processed 5,988,117 claims, 
a 21-percent increase from the 4,946,989 claims processed from January 
2014 to May 2014.
    VISN 16 is a strong example of improvement based on our recent 
actions. In December 2014, 35.58 percent of claims were paid in under 
30 days. In May 2015, 82.13 percent of claims were paid in under 30 
days. At the facility level, in May 2015, 83.13 percent of claims in 
the Southeast Louisiana Veterans Health Care System's inventory were 
paid in under 30 days. This is a significant improvement from the 35.29 
percent in December 2014.

Conclusion

    In conclusion, VA strongly values its relationship with our 
community providers. We realize the vital role they play in assisting 
us in providing timely and high-quality care to Veterans. We are 
working hard to expedite payments and streamline our claims services in 
order to make this an effective and efficient process for all.
    Mr. Chairman, I appreciate the opportunity to appear before you 
today. We are prepared to answer any questions you or other Members of 
the Committee may have.
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