Veter­ans back out of VA pro­gram af­ter de­lays in pay­ments, ser­vices

The Herald-Sun (Sunday) - - Front page - BY ISAAC ARNSDORF ProPublica AND JON GREEN­BERG Poli­tiFact

For years, con­ser­va­tives have as­sailed the U.S. De­part­ment of Veter­ans Af­fairs as a dys­func­tional bu­reau­cracy. They said pri­vate en­ter­prise would mean bet­ter, eas­ier-to-ac­cess health care for veter­ans. Pres­i­dent Don­ald Trump em­braced that po­si­tion, en­thu­si­as­ti­cally mov­ing to ex­pand the pri­vate sec­tor’s role.

Here’s what has ac­tu­ally hap­pened in the four years since the gov­ern­ment be­gan send­ing more veter­ans to pri­vate care: longer waits for ap­point­ments and, a new anal­y­sis of VA claims data by ProPublica and Poli­tiFact shows, higher costs for tax­pay­ers.

Since 2014, 1.9 mil­lion for­mer ser­vice mem­bers have re­ceived pri­vate med­i­cal care through a pro­gram called Veter­ans Choice. It was sup­posed to give veter­ans a way around long wait times in the VA. But their av­er­age waits us­ing the Choice Pro­gram were still longer than al­lowed by law, ac­cord­ing to ex­am­i­na­tions by the VA in­spec­tor gen­eral and the Gov­ern­ment Ac­count­abil­ity Of­fice. The watch­dogs also found wide­spread blun­ders, such as book­ing a vet­eran in Idaho with a doc­tor in New York and telling a Florida vet­eran to see a spe­cial­ist in Cal­i­for­nia. Once, the VA re­ferred a vet­eran to the Choice Pro­gram to see a urol­o­gist, but in­stead he got an ap­point­ment with a neu­rol­o­gist.

The win­ners have been two pri­vate com­pa­nies hired to run the pro­gram, which be­gan un­der the Obama ad­min­is­tra­tion and is poised to grow sig­nif­i­cantly un­der Trump. ProPublica and Poli­tiFact ob­tained VA data show­ing how much the agency has paid in med­i­cal claims and ad­min­is­tra­tive fees for the Choice pro­gram. Since 2014, the two com­pa­nies have been paid nearly $2 bil­lion for over­head, in­clud­ing profit. That’s about 24 per­cent of the com­pa­nies’ to­tal pro­gram ex­penses — a rate that would ex­ceed the fed­eral cap that gov­erns how much most in­surance plans can spend on ad­min­is­tra­tion in the pri­vate sec­tor.

Ac­cord­ing to the agency’s in­spec­tor gen­eral, the VA was pay­ing the con­trac­tors at least $295 ev­ery time it au­tho­rized pri­vate care for a vet­eran. The fee was so high be­cause the VA hur­riedly launched the Choice Pro­gram as a short-term re­sponse to a cri­sis. Four years later, the fee never sub­sided — it went up to as much as $318 per re­fer­ral.

“This is what hap­pens when peo­ple try and pri­va­tize the VA,” Sen. Jon Tester of Mon­tana, the rank­ing Demo­crat on the Se­nate veter­ans com­mit­tee, said in a state­ment re­spond­ing to these find­ings. “The VA has an

obli­ga­tion to tax­pay­ers to spend its lim­ited re­sources on car­ing for veter­ans, not pay­ing ex­ces­sive fees to a gov­ern­ment contractor. When VA does need the help of a mid­dle­man, it needs to do a bet­ter job of hold­ing con­trac­tors ac­count­able for miss­ing the mark.”

The Af­ford­able Care Act pro­hibits large group in­surance plans from spend­ing more than 15 per­cent of their rev­enue on ad­min­is­tra­tion, in­clud­ing mar­ket­ing and profit. The pri­vate sec­tor stan­dard is 10 per­cent to 12 per­cent, ac­cord­ing to An­drew Nau­gle, who ad­vises health in­sur­ers on ad­min­is­tra­tive op­er­a­tions as a con­sul­tant at Mil­li­man, one of the world’s largest ac­tu­ar­ial firms. Over­head is even lower in the De­fense De­part­ment’s Tri­care health ben­e­fits pro­gram: only 8 per­cent last year.

Even ex­clud­ing the costs of set­ting up the new pro­gram, the Choice con­trac­tors’ over­head still amounts to 21 per­cent of rev­enue.

“That’s just un­ac­cept­able,” Rick Wei­d­man, the pol­icy direc­tor of Viet­nam Veter­ans of Amer­ica, said in re­sponse to the fig­ures. “There are peo­ple con­stantly bang­ing on the VA, but this was the pri­vate sec­tor that made a to­tal muck of it.”

Trump’s prom­ises to veter­ans were a cen­tral mes­sage of his cam­paign. But his plans to shift their health care to the pri­vate sec­tor put him on a col­li­sion course with veter­ans groups, whose mem­bers gen­er­ally sup­port the VA’s med­i­cal sys­tem and don’t want to see it pri­va­tized. The con­tro­versy around pri­va­ti­za­tion, and the out­size in­flu­ence of three Trump as­so­ci­ates at Mar-a-Lago, has sown tur­moil at the VA, en­dan­ger­ing crit­i­cal ser­vices from pay­ing stu­dent stipends to prevent­ing sui­cides and up­grad­ing elec­tronic med­i­cal records.

A spokesman for the VA, Curt Cashour, de­clined to pro­vide an in­ter­view with key of­fi­cials and de­clined to an­swer a de­tailed list of writ­ten ques­tions.

One of the con­trac­tors, Health Net, stopped work­ing on the pro­gram in Sep­tem­ber. Health Net didn’t re­spond to re­quests for com­ment.

The other contractor, TriWest Health­care Al­liance, said it has worked closely with the VA to im­prove the pro­gram and has made ma­jor in­vest­ments of its own. “We be­lieve sup­port­ing VA in en­sur­ing the de­liv­ery of qual­ity care to our na­tion’s veter­ans is a moral re­spon­si­bil­ity, even while oth­ers have avoided mak­ing these in­vest­ments or have with­drawn from the mar­ket,” the com­pany said in a state­ment.

TriWest did not dis­pute ProPublica and Poli­tiFact’s es­ti­mated over­head rate, which used to­tal costs, but suggested an al­ter­nate cal­cu­la­tion, us­ing an av­er­age cost, that yielded a rate of 13 per­cent to 15 per­cent. The com­pany de­fended the $295-plus fee by say­ing it cov­ers “highly man­ual” ser­vices such as sched­ul­ing ap­point­ments and co­or­di­nat­ing med­i­cal files. Such func­tions are not typ­i­cally part of the con­tracts for other pro­grams, such as the mil­i­tary’s Tri­care. But Tri­care’s con­trac­tors per­form other du­ties, such such as ad­ju­di­cat­ing claims and mon­i­tor­ing qual­ity, that Health Net and TriWest do not. In a re­cent study com­par­ing the pro­grams, re­searchers from the Rand Cor­po­ra­tion con­cluded that the role of the Choice Pro­gram’s con­trac­tors is “much nar­rower than in the pri­vate sec­tor or in Tri­care.”

Be­fore the Choice Pro­gram, TriWest and Health Net per­formed es­sen­tially the same func­tions for about a sixth of the price, ac­cord­ing to the VA in­spec­tor gen­eral. TriWest de­clined to break down how much of the fee goes to each ser­vice it pro­vides.

Be­cause of what the GAO called the con­trac- tors’ “in­ad­e­quate” per­for­mance, the VA in­creas­ingly took over do­ing the Choice Pro­gram’s re­fer­rals and claims it­self.

In many cases, the con­trac­tors’ $295-plus pro­cess­ing fee for ev­ery re­fer­ral was big­ger than the doc­tor’s bill for ser­vices ren­dered, the anal­y­sis of agency data showed. In the three months end­ing Jan. 31, 2018, the Choice Pro­gram made 49,144 re­fer­rals for pri­mary care to­tal­ing $9.9 mil­lion in med­i­cal costs, for an av­er­age cost per re­fer­ral of $201.16. A few other types of care also cost less on av­er­age than the han­dling fee: chi­ro­prac­tic care ($286.32 per re­fer­ral) and op­tom­e­try ($189.25). There were cer­tainly other in­stances where the med­i­cal ser­vices cost much more than the han­dling fee: TriWest said its av­er­age cost per re­fer­ral was about $2,100 in the past six months.

Be­yond what the con-

As con­gres­sional lead­ers hud­dled with ad­min­is­tra­tion of­fi­cials in the Sit­u­a­tion Room, where wars and covert ac­tions are mon­i­tored, Home­land Se­cu­rity Sec­re­tary Kirst­jen Nielsen threw out an alarm­ing num­ber that took mem­bers of Con­gress by sur­prise.

Sit­ting around a con­fer­ence ta­ble in the se­cure White House base­ment cham­ber on Wednes­day, Nielsen told the group that in­cluded Pres­i­dent Don­ald Trump, ad­viser Jared Kush­ner and top con­gres­sional lead­ers of both par­ties that bor­der of­fi­cials had ap­pre­hended more than 3,000 ter­ror­ists and 17,000 crim­i­nals along the U.S.-Mex­ico bor­der in the past year, ac­cord­ing to a per­son fa­mil­iar with the pri­vate meet­ing.

Nielsen was try­ing to per­suade Democrats of the need for a com­plete wall along the bor­der. But the claim back­fired, with mem­bers push­ing back on the claim three min­utes into her re­marks, the per­son said. To bol­ster the point, Trump pub­licly re­leased a let­ter to all mem­bers of Con­gress mak­ing the point and staff took to tele­vi­sion to em­pha­size the ter­ror­ist threat.

But bor­der en­force­ment ex­perts say those fig­ures aren’t ac­cu­rate.

“It’s very un­likely that 4,000 peo­ple on ter­ror­ist watch list have been ap­pre­hended as op­posed to 4,000 peo­ple from travel banned coun­tries were ap­pre­hended,” said Leon Fresco, who served as deputy as­sis­tant at­tor­ney gen­eral for the of­fice of im­mi­gra­tion lit­i­ga­tion in the Obama ad­min­is­tra­tion. “If so, where are they?”

Home­land Se­cu­rity of­fi­cials are now say­ing that 3,755 known or sus­pected ter­ror­ists were stopped try­ing to en­ter­ing the U.S. by land in fis­cal year 2017. Dur­ing a news con­fer­ence in the Rose Gar­den on Fri­day, Nielsen de­scribed those cap­tured as “spe­cial in­ter­est aliens.”

“Those are aliens who the in­tel com­mu­nity has iden­ti­fied as a con­cern,” Nielsen said. “They ei­ther have travel pat­terns that are iden­ti­fied as ter­ror­ist travel pat­terns or they have known or sus­pected ties to ter­ror­ism.”

But statis­tics from the Jus­tice De­part­ment and DHS be­lie Nielsen’s num­bers. In fis­cal 2017, DHS en­coun­tered 2,554 peo­ple on the ter­ror­ist watch list trav­el­ing to the United States. But of those, only 335 were at­tempt­ing to en­ter by land.

The ma­jor­ity, 2,170 were at­tempt­ing to en­ter through air­ports, and 49 were at­tempt­ing to en­ter by sea.

Those in­side the con­tentious meet­ing Wednes- day said Nielsen spoke about the ter­ror­ism threat for three min­utes when House Speaker Nancy Pelosi ques­tioned whether those num­bers in­cluded peo­ple cross­ing the bor­der il­le­gally.

Nielsen said that was not the case.

In the let­ter, Trump crit­i­cized Democrats for not al­low­ing Nielsen to give a more in-depth pre­sen­ta­tion on the depth and sever­ity of what he called the hu­man­i­tar­ian and se­cu­rity cri­sis at the south­ern bor­der.

The stand­off con­tin­ued through Fri­day, where Trump held an­other tense meet­ing with lead­ers demon­strat­ing how far apart the two sides con­tinue to be.

Se­nate Mi­nor­ity Leader Chuck Schumer de­scribed the dis­cus­sion as con­tentious and Trump warned the shut­down could last months, if not years.

“The bot­tom line is we made a plea to the pres­i­dent: ‘Don’t hold mil­lions of Amer­i­cans and hun­dreds of thou­sands of work­ers hostage,’ ” Schumer said.

At the news con­fer­ence, Trump ap­peared to back off the threat and promised a work­ing group would meet over the week­end to try to find a com­pro­mise with Democrats, who want to re­open the shut­tered parts of the gov­ern­ment be­sides DHS. But he also warned that he could use emer­gency pow­ers to build the wall if needed.

“We can call a na­tional emer­gency be­cause of the se­cu­rity,” Trump said. “I haven’t done it. I may do it, but we can call a na­tional emer­gency and build it very quickly.”

In his let­ter, Trump out­lined that 17,000 adults with crim­i­nal records were ap­pre­hended by Bor­der Pa­trol. He noted that more than 20,000 mi­nors were smug­gled into the United States and that the im­mi­gra­tion court’s back­log is years long with nearly 800,000 cases wait­ing to be heard.


Viet­nam vet­eran John Moen faced a 10-week wait with a pri­vate provider of the Veter­ans Choice Pro­gram when he sought phys­i­cal ther­apy closer to his home in Plano, Texas. “The Choice Pro­gram for me has com­pletely failed to meet my needs,” Moen said.


For­mer Pres­i­dent Barack Obama, flanked by Se­nate Veter­ans Af­fairs Com­mit­tee Chair­man Sen. Bernie Sanders, I-Vt., left, signs the Veter­ans' Ac­cess to Care through Choice, Ac­count­abil­ity, and Trans­parency Act in 2014.


Pres­i­dent Don­ald Trump lis­tens as Home­land Se­cu­rity Sec­re­tary Kirst­jen Nielsen, left, speaks Fri­day at the White House af­ter a meet­ing with con­gres­sional lead­ers on bor­der se­cu­rity. Nielsen claimed in the meet­ing that bor­der of­fi­cials had ap­pre­hended more than 3,000 ter­ror­ists and 17,000 crim­i­nals along the U.S.-Mex­ico bor­der in the past year.

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