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Highlights

What GAO Found

The Department of Veterans Affairs' (VA) fee basis care spending increased from about $3.04 billion in fiscal year 2008 to about $4.48 billion in fiscal year 2012. The slight decrease in fiscal year 2012 spending from the fiscal year 2011 level was due to VA's adoption of Medicare rates as its primary payment method for fee basis providers. VA's fee basis care utilization also increased from about 821,000 veterans in fiscal year 2008 to about 976,000 veterans in fiscal year 2012.

GAO found that several factors affect VA medical centers' (VAMC) utilization of fee basis care--including veteran travel distances to VAMCs and goals for the maximum amount of time veterans should wait for VAMC-based appointments. VAMCs that GAO reviewed reported that they often use fee basis care to provide veterans with treatment closer to their homes--particularly for veterans who are not eligible for travel reimbursement. In addition, VAMC officials reported that veterans are often referred to fee basis providers to ensure that VAMC-based clinics that would otherwise treat them can meet established VA wait time goals for how long veterans wait for an appointment. However, GAO found that VA has not established goals for and does not track how long veterans wait to be seen by fee basis providers.

VA's monitoring of fee basis care spending is limited because fee basis data do not currently include a claim number or other identifier that allows all charges from a single office visit with a fee basis provider or an inpatient hospital stay to be analyzed together. GAO found that without the ability to analyze spending in this way, VA is limited in its ability to assess the cost of fee basis care and verify that fee basis providers were paid appropriately.

Why GAO Did This Study

While VA treats the majority of veterans in VA-operated facilities, in some instances it must obtain the services of non-VA providers to ensure that veterans are provided timely and accessible care. These non-VA providers are commonly reimbursed by VA using a fee-for-service arrangement known as fee basis care. VA's fee basis care program has grown rapidly in recent years--rising from about 8 percent of VA's total health care services budget in fiscal year 2005 to about 11 percent in fiscal year 2012. GAO was asked to review fee basis care program spending and utilization and factors that influence VAMC fee basis utilization. This report examines how fee basis care spending and utilization changed from fiscal year 2008 to fiscal year 2012, factors that contribute to the use of fee basis care, and VA's oversight of fee basis care program spending and utilization.

GAO reviewed relevant laws and regulations, VA policies, and fee basis spending and utilization data from fiscal year 2008 through fiscal year 2012. In addition, GAO reviewed the fee basis care operations of six selected VAMCs that varied in size, services offered, and geographic location.

GAO Recommends

GAO recommends that VA revise its beneficiary travel regulations to allow reimbursement for veterans seeking similar care from a fee basis provider, apply the same wait time goals to fee basis care as VAMC-based care, and ensure fee basis data includes a claim number. VA generally concurred with GAO's conclusions and five recommendations.

For more information, contact Randall Williamson at (202) 512-7114 or williamsonr@gao.gov.
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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Veterans Affairs 1. To effectively manage fee basis care spending, the Secretary of Veterans Affairs should revise the beneficiary travel eligibility regulations to allow for the reimbursement of travel expenses for veterans to another VAMC to receive needed medical care when it is more cost-effective and appropriate for the veteran than seeking similar care from a fee basis provider.
Closed - Not Implemented
The VA Mission Act, which was signed into law on June 6, 2018, consolidated fee-basis and all other non-VA care under the Veterans Community Care Program. The purpose of the law was to provide the right care to veterans at the right time and place. Among other things, the VA Mission Act expanded veteran eligibility for VA Community Care, including reducing the distance that veterans would be required to travel for care in a VA medical center. As a result of these changes, there is very little need for VA to revise beneficiary travel eligibility regulations to allow for the reimbursement of travel expenses for veterans referred to another VA medical center to receive needed medical care when it is more cost-effective and appropriate for the veteran than seeking similar care from a community-based (fee basis) provider. Additionally, VA assessed the cost of such a revision and determined it would likely outweigh any benefits.
Department of Veterans Affairs 2. To effectively manage fee basis care wait times and spending, the Secretary of Veterans Affairs should direct the Under Secretary for Health to require during the fee basis authorization process that VA providers and fee basis officials determine the cost-effectiveness of reimbursing medically stable veterans eligible for beneficiary travel for travel to another VAMC rather than referring them to a fee basis provider for similar care.
Closed - Implemented
In December 2013, VA added the following statement to the procedures for preparing a referral to a non-VA provider:"before determining to purchase care through the Non-VA Medical Care program, a cost benefit analysis including associated Beneficiary Travel costs must be performed." By analyzing the potential cost-effectiveness of reimbursing veterans for travel to other VAMCs and arranging for such care when it is more cost-effective, VA may be able to reduce overall fee basis care program expenditures.
Department of Veterans Affairs
Priority Rec.
This is a priority recommendation.
3. To effectively manage fee basis care wait times and spending, the Secretary of Veterans Affairs should direct the Under Secretary for Health to analyze the amount of time veterans wait to see fee basis providers and apply the same wait time goals to fee basis care that are used as VAMC-based wait time performance measures.
Closed - Not Implemented
This recommendation is superseded by a more recent GAO recommendation, specifically GAO-18-124, Recommendation 1. The more recent recommendation better reflects the current community care environment given the passage of the VA Maintaining Systems and Strengthening Integrated Outside Networks Act, known as the VA MISSION Act of 2018. Both GAO recommendations urge VA to establish a wait-time goal for community care that is comparable to wait times for VA care.
Department of Veterans Affairs 4. To effectively manage fee basis care wait times and spending, the Secretary of Veterans Affairs should direct the Under Secretary for Health to establish guidance for VAMCs that specifies how fee basis care should be incorporated with other VAMC utilization management efforts.
Closed - Implemented
VA officials reported that as of September 30, 2013, VA's fully-implemented Non-VA Care Coordination (NVCC) program requires NVCC unit staff to complete and update a standardized care coordination note in the veteran's medical record to manage information transfers from non-VA providers to VA staff who support VAMC utilization management. By better managing information about veterans who are stable enough to transfer back to VAMC-based care after receiving inpatient care from non-VA providers, VA may be able to reduce overall non-VA medical care program expenditures.
Department of Veterans Affairs 5. To ensure that VA Central Office effectively monitors fee basis care, the Secretary of Veterans Affairs should direct the Under Secretary for Health to ensure that fee basis data include a claim number that will allow for VA Central Office to analyze the episode of care costs for fee basis care.
Closed - Implemented
As of November 2019, VA consults have a newly created unique identifier (unique consult ID or UCID), which follows the consult on its journey to new referral and authorization system, called HealthShare Referral Manager (HSRM) and the downstream systems and is included on every claim and third party administrator invoice. When a referral is transmitted to HSRM the UCID populates in the referral and an HSRM referral number is created. The UCID and HSRM referral number follow the consult to downstream claim processing systems and are included at the time of claims submission. The UCID and referral number allow VHA to map the consult/episode of care to a claim and analyze episode of care costs for care in the community.

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