The Department of Veterans Affairs is preparing to issue what\u2019s likely to become one of the largest service contracts in government history as it restructures its arrangements, aiming for rigorous management of the department\u2019s role as a health care payer and greater competition among health care management firms.<\/p>\n
The massive contract vehicle represents only the second time VA has signed large contracts with health plans to coordinate private sector care for veterans. The first was shortly after the MISSION Act was signed in 2018. Those contracts are now expiring, and in their place, VA is preparing one large indefinite delivery\/indefinite quantity contract with a total potential value of $700 billion over the next ten years.<\/p>\n
Among the changes the department is aiming for is a much more rigorous approach to program management in its \u201ccommunity care network,\u201d said Richard Topping, VA\u2019s assistant secretary for management and chief financial officer.<\/p>\n
\u201cThis program has been unmanaged since its inception. None of the tools, none of the controls that we are talking about introducing here have been available,\u201d he told the House Veterans Affairs Committee on Thursday. \u201cVA had no ability to manage this program, to drive quality, to focus on the outcomes for veterans, to focus on cost. We\u2019ve now got the ability to do that in this contract. The way we designed this unmanaged program also made it very difficult for industry to partner with us. It made it very difficult for community providers to serve our veterans, because it didn\u2019t operate like any other payer program.\u201d<\/p>\n
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The new contract, called Community Care Network Next Generation, is meant to change much of that. VA says the department intends to cast a wide net for vendors \u2014 creating an indefinite delivery\/indefinite quantity contract that doesn\u2019t only attract large, national health insurers.<\/p>\n
\u201cWe are very intentionally not limiting it to the large vendors. The intention is to open this up to competition, to non-large vendors, to those who might bring regional capabilities, regional capacity, and that would not be able to operate on a national or semi-national scale,\u201d Topping said. \u201cThey will incur a cost to bid and be awarded a spot on the vehicle. But once they do that, the vendors who are on the vehicle with us, large and small, have a seat at the table with VA, with our program management team to design the task orders. There are two initial task orders in the initial award, those look a lot like what we have now. But we are going to immediately partner with the vendors on the vehicle to begin to build the next more regional, more adaptable, more local models in our task orders.\u201d<\/p>\n
Value-based payment models and utilization management<\/p>\n
VA plans to use the ID\/IQ for its purchased health care for up to ten years. The contract includes a three-year base period, followed by three two-year option periods, and a final one-year option period. During that time, the department plans to use on-ramps and off-ramps to bring new vendors onto the contract \u2014 and remove ones that aren\u2019t meeting performance standards.<\/p>\n
And contract performance will be overseen and measured by VA program officials who plan to start implementing measures that value quality care over numbers of procedures performed, Topping said.<\/p>\n
\u201cVA will implement a comprehensive quality program for community care providers based on nationally recognized measures from the Agency for Healthcare Research and Quality. Contractors will track patient safety events, identify veterans at risk of avoidable visits and readmissions through predictive analytics, and while respecting their choice, guide veterans towards higher performing providers,\u201d he said. \u201cNext Gen will modernize how VA pays its contractors for the care furnished to veterans by implementing value-based payment models. We will begin with episode-based payments for lower extremity joint replacements. As we gain the data and the expertise to manage alternative payments, we will introduce at least three additional models over the performance period of the contract to continually improve care. These models will shift payment away from volume and toward outcomes and total cost of care, which aligns contractor incentives with veterans\u2019 health and system sustainability. We will introduce utilization management. This includes active management of inpatient admissions, emergency department use, concurrent hospital reviews, and high cost drugs administered in clinical settings. This will reduce unnecessary hospitalizations and inappropriate care while protecting veterans\u2019 access to medically necessary services.\u201d<\/p>\n
Questions from Congressional overseers<\/p>\n
But the department faced bipartisan skepticism during the hearing, partly because VA officials have been slow to detail their plans for the CCN Next Gen effort to members of Congress. VA\u2019s overseers on the House Veterans Affairs Committee say they found out the details of the contract at the same time vendors did \u2014 when the request for proposals was released a little over a month ago.<\/p>\n
\u201cI understand the VA finds it unprecedented to hold a hearing on an active contract solicitation. I appreciate the sensitivity of the contract, but it is also unprecedented to avoid Congress\u2019s oversight of $1 trillion of spending,\u201d said Rep. Mike Bost (R-Ill.), the committee\u2019s chairman. \u201cMy staff and the ranking member\u2019s staff have been told that some topics are off limits because of the sensitive nature of the contract and solicitation. We\u2019ve tried to create a venue in which VA would feel comfortable to speak candidly to our members, but unfortunately, VA failed to assure us of such candor.\u201d<\/p>\n
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Meanwhile, Democrats on the committee also worry that the new contract will serve as a way to further privatize VA health care \u2014 pointing out that more than 40% of veterans\u2019 care is already delivered by private providers through the existing contracts.<\/p>\n
Rep. Morgan McGarvey (D-Ky.) said he worried that the contract will lead to large, vertically-integrated conglomerates driving veterans into facilities they control, and away from smaller community-based providers.<\/p>\n
\u201cI don\u2019t trust big insurance companies to take care of anybody. The sole thing that motivates them is profit. It\u2019s not people, and it\u2019s certainly not our veterans,\u201d he said. \u201cWe have the right to be skeptical when we are talking about private insurance companies taking care of people, because right now they don\u2019t.\u201d<\/p>\n
But Topping said the department believes it can avoid problems like the ones McGarvey is worried about through strong oversight and program management.<\/p>\n
\u201cThe vendors, our health plan partners on this, don\u2019t make the clinical referral from the direct care system to community care. VA does that,\u201d he said. \u201cThey don\u2019t make the referral to the provider or determine eligibility [for community care], VA determines that. VA drives where and how our veterans receive care, and we want to know what we\u2019re buying. We want to steer our veterans to the highest quality, lowest cost providers. That goal is not unique to VA \u2014 it\u2019s new to us, but we\u2019re bringing this into this program.\u201d<\/p>\n
Vendors hoping for a spot on the contract have until March 16 to submit their proposals.<\/p>\n
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