VA readies massive contract for veterans’ private sector health care
The Department of Veterans Affairs is preparing to overhaul how it manages healthcare for veterans, initiating a contract process potentially worth up to $700 billion over the next decade. This restructuring aims to improve oversight of the VA’s role as a healthcare payer and foster greater competition among healthcare management firms.
A Shift in Community Care Management
This move represents the second time the VA has contracted with health plans to coordinate private sector care for veterans. The first such effort followed the passage of the MISSION Act in 2018, and those contracts are now nearing expiration. Richard Topping, VA’s assistant secretary for management and chief financial officer, stated that the previous program was “unmanaged since its inception,” lacking essential tools and controls for quality, outcomes, and cost management.
The new “Community Care Network Next Generation” contract seeks to address these shortcomings. The VA intends to solicit bids from a wide range of vendors, including smaller, regional providers, not just large national insurers. Vendors awarded a spot on the contract will collaborate with the VA program management team to shape future task orders.
Value-Based Care and Oversight
The VA plans to utilize the contract for up to ten years, beginning with a three-year base period and potential extensions. A key component of this new approach is a shift towards value-based payment models, starting with episode-based payments for lower extremity joint replacements. The department also intends to implement utilization management, actively monitoring inpatient admissions, emergency department use, and high-cost drug administration to reduce unnecessary care.
Topping explained that the VA will implement a quality program based on measures from the Agency for Healthcare Research and Quality, tracking patient safety events and using predictive analytics to identify at-risk veterans. The VA will retain control over clinical referrals and eligibility for community care, steering veterans towards higher-performing providers.
Congressional Scrutiny and Concerns
The department faced questions from members of the House Veterans Affairs Committee, with some expressing concern over the lack of transparency in the planning process. Chairman Rep. Mike Bost (R-Ill.) noted that details of the contract were released to vendors simultaneously with briefings to Congress. Democrats on the committee also voiced worries that the contract could lead to further privatization of VA healthcare, given that over 40% of veterans’ care is already provided by private providers.
Rep. Morgan McGarvey (D-Ky.) expressed skepticism about large insurance companies prioritizing profit over patient care. However, Topping emphasized that the VA will maintain control over referrals and eligibility, ensuring veterans receive care at the highest quality and lowest cost.
Vendors have until March 16 to submit proposals for the contract.
Frequently Asked Questions
What is the potential value of the new VA contract?
The new indefinite delivery/indefinite quantity contract has a total potential value of $700 billion over the next ten years.
What is the “Community Care Network Next Generation” contract designed to do?
The contract is meant to rigorously manage the VA’s community care network, increase competition among healthcare management firms, and improve the quality and cost-effectiveness of care for veterans.
Who will decide where veterans receive community care?
The VA will continue to make clinical referrals and determine eligibility for community care, driving where and how veterans receive care.
As the VA moves forward with this massive contract, will it successfully balance the goals of improved oversight, cost control, and quality care while addressing the concerns of both lawmakers and veteran advocates?