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