State Veterans' Homes--Opportunities To Reduce VA and State Costs and Improve Program Management

HRD-82-7: Published: Oct 22, 1981. Publicly Released: Nov 23, 1981.

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State homes provide hospital, nursing home, and domiciliary care to needy, disabled veterans. The Veterans Administration (VA) helps states defray the costs of operating and constructing state homes through per diem payments and construction grants. GAO reviewed the state home program to find out if: (1) VA was effectively administering the program; (2) if the method used to help states pay for the care provided should be changed; and (3) the homes were capable of providing quality care.

Because VA was not properly certifying the levels of care needed by veterans admitted to state homes, hospital and nursing home per diem rates were paid unnecessarily for many veterans requiring lower levels of care. The improper certifications occurred because VA physicians were not independently verifying the patients' need for the levels of care requested by the homes. Changes in the method of reimbursing states for the care provided to veterans in state homes are not needed. The homes have been able to maintain or expand the services provided to veterans under the current method. Alternatives to increased VA funding exist. State homes could obtain more revenues from veterans receiving VA pensions, and part of the cost of care provided to some veterans could be recovered from Medicare or private health insurance. Because VA has not effectively planned and coordinated the construction or use of VA hospitals, state homes, and contract community nursing homes, VA and state home facilities may be constructed in areas having too many community or state nursing home beds while not enough beds may be available in other areas. State homes are capable of providing quality nursing home and domiciliary care to their patients, but they have only limited acute hospital care capabilities. VA inspections may not identify deficiencies because inspectors were not evaluating the surgical care provided by state home hospitals and were limiting the scope of their assessments because of a lack of guidance on how to assess compliance.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: When we determine what steps the Congress has taken, we will provide updated information.

    Matter: In any deliberations on legislative proposals to change the reimbursement method to increase VA funding, Congress should consider the extent to which the states are taking advantage of the alternative sources of revenue identified by GAO.

  2. Status: Closed - Not Implemented

    Comments: Although Congress may amend 38 U.S.C. 3203 in the future, its action would be based on more current information than the 1981 GAO report.

    Matter: Congress should consider amending 38 U.S.C. 3203 to extend the pension reduction criteria to cover care being furnished in state homes and to authorize VA to transfer the money withheld to the states to help pay for the veterans' care.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Construction requests were coordinated with internal planning.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should determine the need for state home construction projects before approving their construction.

    Agency Affected: Veterans Administration

  2. Status: Closed - Implemented

    Comments: Planning will include recommended coordination and will be included in the 5-year plan.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should establish, in coordination with state and local planning agencies, and the National Association of State Veterans Homes, more realistic medical district plans for the construction and/or use of VA, community, and state nursing homes to provide care to veterans.

    Agency Affected: Veterans Administration

  3. Status: Closed - Implemented

    Comments: VA recommended this action in a letter to the National Association of State Veterans Homes.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should encourage state homes to collect from veterans receiving pensions an amount equal to the reduction that would occur if the veterans obtained care in a VA facility.

    Agency Affected: Veterans Administration

  4. Status: Closed - Implemented

    Comments: VA made this a part of its annual review process.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should follow up on inspection reports to ensure that compliance with all standards is assessed.

    Agency Affected: Veterans Administration

  5. Status: Closed - Implemented

    Comments: Standards were published on October 1, 1984.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should revise state home standards to provide specificity and guidance, such as that provided in the Joint Commission on Accreditation of Hospitals and Department of Health and Human Services (HHS) standards.

    Agency Affected: Veterans Administration

  6. Status: Closed - Not Implemented

    Comments: Legislation was introduced which could eliminate hospital care from the state home program. VA has no further plans to develop surgical standards.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should develop standards on surgical care and related services as part of the state home hospital standards.

    Agency Affected: Veterans Administration

  7. Status: Closed - Not Implemented

    Comments: VA plans no action to implement this recommendation. It feels that the limited hospital per diem discourages state homes from operating hospital beds.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should encourage state homes to convert hospital beds, other than those needed to meet the short-term acute-care needs of home patients, to nursing home beds.

    Agency Affected: Veterans Administration

  8. Status: Closed - Implemented

    Comments: A circular was issued on June 28, 1982.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should direct VA medical centers that are clinics of jurisdiction for the state home program to review the appropriateness of the per diem rates paid for veterans already in state homes and adjust per diem payments as necessary. The appropriateness of per diem rates should be determined by a VA physician using the level of care definitions in the state home manual.

    Agency Affected: Veterans Administration

  9. Status: Closed - Implemented

    Comments: VA addressed this in a conference call to all medical center directors.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should inform VA physicians of their options to request additional data from the state home to justify the requested level of care and to authorize payment of per diem at a rate other than that requested.

    Agency Affected: Veterans Administration

  10. Status: Closed - Implemented

    Comments: VA addressed this in a conference call to all medical center directors and in a Geriatrics and Extended Care letter.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should reemphasize to VA physicians the importance of independently verifying the needed level of care of veterans admitted to state homes.

    Agency Affected: Veterans Administration

  11. Status: Closed - Not Implemented

    Comments: Congress changed the per diem reimbursement for hospital care, making it less than the reimbursement for nonacute nursing home care.

    Recommendation: The Administrator of Veterans Affairs, through the Chief Medical Director, should direct VA physicians to approve payment of the hospital per diem rate only if the patient needs acute hospital care.

    Agency Affected: Veterans Administration

 

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