VA Fee Basis Care Spending and Utilization Increased from Fiscal Year 2008 to Fiscal Year 2012, with the Majority of Spending and Utilization in Outpatient Care

		VA Fee Basis Care Spending and Utilization Increased from Fiscal Year 2008 to Fiscal Year 2012

VA’s 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 decline in fee basis care spending  between fiscal year 2011 and fiscal year 2012 is likely due to VA’s  adoption of Medicare rates for its fee basis care program. According to VA officials, the increase in the number of unique  veterans receiving care from fee basis providers from fiscal year 2008 to  fiscal year 2012 was likely due to VA’s use of fee basis care to meet  goals for the maximum amount of time veterans wait for VAMC-based  appointments. Outpatient Services Accounted for the Majority of VA Fee Basis Care Spending and Utilization from Fiscal Year 2008 through Fiscal Year 2012

VA spent about $11.22 billion on outpatient fee basis care and about  $9.07 billion on inpatient fee basis care from fiscal year 2008 through  fiscal year 2012. Three Main Factors Influence Fee Basis Care Utilization, and VAMCs Reviewed Used Several Methods to Reduce Fee Basis Spending and Utilization

During our review of six VAMCs, we identified three common factors that  affected these facilities’ utilization of fee basis care—clinical service  availability, veteran travel distances, and VA wait time goals. In order to allow VAMCs to reimburse additional veterans  for travel, VA would need to revise its regulations to include additional  categories of veterans. While serving veterans in a timely way is important and sending them to  fee basis providers may provide veterans more timely service, VA does  not track how long it takes veterans to be seen by fee basis providers at   For example, officials from the Alexandria VAMC explained  all VAMCs.that they often refer veterans to fee basis providers when the Alexandria  VAMC’s wait times are too long, but fee basis providers in their  community also face capacity limitations and may not be able to schedule  appointments for veterans any sooner than the VAMC-based provider. Conclusions

VA’s fee basis care program is a critical means for providing accessible  health care to veterans. 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. To ensure that VA Central Office effectively monitors fee basis care, we  recommend that the Secretary of Veterans Affairs direct the Under  Secretary for Health to take the following action:
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. To address our second recommendation, VA noted that it is working to  revise procedures for both its new fee basis care administration model,  referred to as Non-VA Care Coordination, and the beneficiary travel  program to ensure that the cost-effectiveness of a veterans’ travel to  another VAMC or to a non-VA care provider is reviewed as part of the  authorization of fee basis care and is included in standard operating  procedures and training. GAO staff who made major contributions to  this report are listed in appendix IV.
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.

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.

What 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.