VA Payments for Physicians in New Program Fall Short of Expectations

February 25, 2015 12:28 pm News Staff

The Veterans Access, Choice and Accountability Act was signed into law in August with the intent of expanding health care access for veterans, but the AAFP is concerned that restrictive payment policies included in the interim final rule implementing provisions of the act could limit physician participation.

[Soldier and doctor shaking hands in front of US flag]

The AAFP sent a comment letter(3 page PDF) this week to Department of Veterans Affairs (VA) Secretary Robert McDonald asking the agency to consider increasing its payments and revising its billing procedures.

The law stipulates that the maximum payment for care provided outside a VA facility would be no higher than Medicare rates, but it did not establish a minimum payment.

Currently, the VA contracts with only two third-party administrators (TPAs) to handle the Veterans Choice Program established by the law, and payments these TPAs are offering physicians are much lower than anticipated. The Academy's letter urges the VA to at least meet Medicare rates.

"Many family physicians are reporting that these TPAs, if they've even yet bothered to approach the practice about participating in the Veterans Choice Program, are then offering reimbursement rates that are 30 percent less than the Medicare physician payment rate," the AAFP letter reads.

Story highlights
  • The AAFP wrote a letter to the Department of Veterans Affairs (VA) urging the agency to pay physicians who treat veterans outside a VA facility at a rate equal to or above Medicare rates.
  • Only two third-party administrators handle insurance that pays physicians working outside VA facilities, and they are offering less reimbursement than expected.
  • There also is no assurance that VA contractors will pay claims within 30 days.

"Simply put, any public or private payer health plan contract that does not at least meet the Medicare payment rate will remain financially impossible for most medical practices that already operate on extremely thin margins," the letter reads.

Moreover, although the AAFP had urged Congress to include prompt payment provisions in the legislation, ensuring that claims without errors would be paid within 30 days, nothing in the VA regulation addresses payment deadlines. Absent this guidance, claims could be outstanding for extended periods.

Finally, under current rules, physician practices participating in the Veterans Choice Program are prohibited from collecting co-payments from veterans at the time of service. Practices can bill patients only after the VA processes claims, a policy the AAFP opposes.

"This puts participating physician practices in the position of collecting copayments and deductibles long after the patient has received the service and left the office, when it is harder and less cost-effective to do so," the letter reads.

The issue of veterans' access arose when media reports surfaced in 2014 about military veterans waiting long periods -- and, in some cases, traveling long distances -- to see a VA physician. In response, Congress moved swiftly to enact legislation that would expand access for veterans by allowing them to see physicians who work outside the VA.

Specifically, the legislation allowed the VA to contract with community-based physicians and loosened restrictions on referrals and prescribing medications.

When President Obama signed the bill, optimism was high that veterans would gain greater access to primary care physicians and needed medications, but provisions of the interim final rule, which went into effect Nov. 5, appear to preclude that goal.

"It is unfortunate that this interim final rule does not do much more to expand veterans' access to care from non-VA family physicians," the letter reads.

The agency will continue to accept comments on the interim final rule through March 5.

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