STATEMENT OF
THOMAS L. GARTHWAITE, MD
ACTING UNDER SECRETARY FOR HEALTH
DEPARTMENT OF VETERANS AFFAIRS
ON
VA'S EXPERIENCE IN IMPLEMENTING
PATIENT ENROLLMENT UNDER PUBLIC LAW 104-262
BEFORE THE
SUBCOMMITTEE ON HEALTH
COMMITTEE ON VETERANS' AFFAIRS
U. S. HOUSE OF REPRESENTATIVES

July 15, 1999

Mr. Chairman and members of the subcommittee, I am pleased to appear before you this morning to provide you with an overview of the Department of Veterans Affairs’ (VA) experience in implementing patient enrollment under § 104 of Public Law 104-262. Appearing with me today are Dr. Gregg Pane, Chief Officer, Policy and Planning; Mr. James Farsetta, Director of Veterans Integrated Service Network (VISN) 3; Dr. Robert Roswell, Director of VISN 8; Mr. Vincent Ng, Director of VISN 14; Dr. John Higgins, Director of VISN 16; Dr. Ted Galey, Director of VISN 20; and, Mr. Walt Hall, Assistant General Counsel.

The Veterans Eligibility Reform Act of 1996, Public Law 104-262, fundamentally realigned access to VA health care. It eliminated the distinctions between eligibility for inpatient care and eligibility for outpatient care, expanded the spectrum of health-care services available to eligible veterans, and based care delivery on patient need. The Eligibility Reform Act also established an enrollment process as the primary tool by which VA manages access to health care within its limited resources and specified seven categories of veterans in order of their priority for enrollment.

VHA can now provide health care in the most appropriate setting – inpatient, outpatient, or in-home – and has an enhanced ability to provide care through contracts and sharing authorities, which improves veterans’ access to care in communities closer to where they live. VHA also has expanded authority to provide preventive care, primary care services, and prosthetic and orthotic devices.

Under eligibility reform, emphasis has shifted from what care a patient is eligible to receive, to what care an enrolled patient needs. We have defined "need" as any treatment, procedure, supply, or service that is considered medically necessary when, in the judgment of the patient's clinical care provider and in accord with generally accepted standards of clinical practice, it will promote, preserve, or restore health.

To promote consistency in the services available to eligible veterans and allow for more clinical flexibility in treating patients, we developed a broad benefits package, known as the uniform benefits package. Each VISN must make this benefits package available to all enrolled veterans, but has the flexibility to decide where and how the care will be provided. For example, VISNs may make arrangements to provide care directly or by contract, at only one or a limited number of sites, or, when necessary, in another VISN. In addition, certain highly specialized programs, such as transplants, may be provided at only a few sites nationwide. The uniform benefits package helps to ensure that all veterans will receive a consistent level of care and services regardless of the VISN providing the care or where the veteran lives. It also enhances our ability to project the resources required, as well as the number of veterans for whom care can be provided. Some veterans may also be eligible for types of care that are not included in the uniform benefits package. These include nursing home care, domiciliary care, non-VA hospitalization or medical services, dental care, readjustment counseling services, adult day health care, homeless veterans programs, and sexual trauma counseling and treatment.

VA began accepting applications for enrollment on October 1, 1997, the beginning of FY 1998. This was a trial year for the VA enrollment process. An automatic application for VA health care enrollment was created for all veterans who had received care from October 1, 1996, through January 1998. Any veteran who was not enrolled automatically could apply for enrollment at any VA medical facility at any time. Enrollment officially began October 1, 1998.

On July 10, 1998, we published the proposed regulations implementing the enrollment provisions of Public Law 104-262, including the categories of veterans to be enrolled, the enrollment and disenrollment process, the definition of "catastrophically disabled," and the contents of the uniform benefits package. After considering the several comments received in regard to this proposal, we have submitted a draft of the final rule for departmental review. We hope to have it published by the end of the summer.

To ensure that all veterans were well- informed about changes in the VA health care system and what they must do to receive VA care, VHA developed a communications strategy. Communications products, including radio and television public service announcements, an enrollment brochure for veterans, and an enrollment brochure and handbook for VA employees have been widely used by VA health care facilities.

In June 1998, VHA established the Veterans Enrollment Service Center (or Call Center) to ensure that all veterans would have a single point of access for requesting assistance and information on eligibility reform policies and enrollment. This center has a national toll-free telephone number, 1-877-222-VETS (8387), and is operated by a contract vendor, with oversight provided by offices within VHA. In its first year of operation, the Call Center handled nearly 254,000 calls, processed 49,000 requests for information brochures, and sent 58,000 enrollment applications to veterans.

After an initial application for healthcare and enrollment is processed at the veteran's local VA healthcare facility, the Health Eligibility Center (HEC) is responsible for verification of the veteran's enrollment and income information, assignment of the enrollment priority, and disposition of the enrollment application. Updated eligibility and enrollment information is automatically transmitted to VHA facilities involved in the veteran's care. The HEC generates a letter that provides the veteran with notification of enrollment in the VA’s health care system, general enrollment information, and, as applicable, their eligibility for income-based healthcare benefits. To date, the HEC has generated 3.8 million enrollment letters.

The HEC will also facilitate the re-enrollment process. It will mail enrolled veterans in the income-based priority categories a VA Form 10-10EZ prior to the expiration of the annual enrollment period. Veterans will be asked to review and update the form and return it to the HEC for processing. Veterans will be notified by letter of their re-enrollment and priority status.

Enrollment Data

As of April 26, 1999, VHA had processed or received enrollment applications from 4,055,397 veterans. This number includes 210,888 veterans who died subsequent to being enrolled, 4,692 who ultimately declined enrollment, and 16,500 who have been found ineligible. Thus, as of April 26, 1999, there were 3,823,317 veterans who were currently enrolled or who had an application on file. Past user enrollees, defined as those who used the system at some point during FYs 1996, 1997, or 1998 (the three FYs immediately prior to the official beginning of enrollment on October 1, 1998), make up about 84.6 percent (3,233,873) of current enrollees/applicants. The remaining 15.4 percent (589,444) are new enrollees, 45% of which are estimated to be Priority 7 veterans. The unprioritized group is largely due to veterans not having a current means test on file.

The following table shows the breakdown of total enrollees/applicants according to priority groups.

Not all enrollees are users (patients) in the VA health care system. As of April 26, 1999, there were 2,549,835 enrollees who have been users since the beginning of FY 1999. Distribution of enrollee patients across priorities is shown in the following table:

Recently updated actuarial projections through FY 2004 indicate that the number of enrollees is projected to increase through FY 2000 and then steadily decrease. The following table shows the projections as of the end of the FYs indicated:

Enrollment Determinations

Public Law 104-262 requires that VA "establish and operate a system of annual patient enrollment" in accordance with the seven specified priorities. In designing and managing its enrollment system, VA must ensure that it provides health care that is "timely and acceptable in quality." For FY 1999, VA projected the demand for enrollment and the utilization and cost of projected enrollees. While the lack of current data necessitated complex sensitivity analyseis around uncertain parameters, VA found no quantitative or qualitativesubstantive reason not to open the system to all priorities for enrollment in FY 1999.this FY. Based on data and experience to date, it appears that, actuarially, VA is on target with the initial projections for FY 1999.

In making a determination for enrollment in FY 2000, just as last year, VA will, as was done last year, use both an internal VA model and an external actuarial model to make projections about the number of enrollees we might expect, their utilization, and costs. An enrollment level decision paper will integrate findings from both models and will be provided to senior management in the near futurelater this summer. These analyses will allow VA officials to assess the enrollment priority level supportable for FY 2000 in light of budgetary expectations. It is too early to report any of the results from this year’s current enrollment level analyses from the VA and actuarial projection models. For FY99, however, it appears that actuarially VA is on target with initial projections.

Priority 7 Veterans

Although concerns have been expressed concerning our decision to enroll all veterans in FY 1999, so far this year we have been able to serve these veterans without significant impact on the system. I regret that we cannot report to you specific costs, today. The Administration is still discussing these figures. I can report, however, that through the second quarter of FY 1999, the cumulative cost of all new users, including Priority 7s, has been less than half of the average of all enrollee patients. Further, veterans who are in Priority 7 bring in revenue from co-payments and third-party payments, and we currently are examining the extent to which this revenue offsets the costs of Priority 7 users. Finally, VHA believes it treats Priority 7 veterans at the margin – i.e., less than the average cost, depending on location, because of fixed investments. We are examining this issue, as well.

Patient Waiting Times

In the last 4 years, VHA has seen the beginnings of an unprecedented transformation of VA health care services, of which eligibility reform and enrollment are important parts. Since 1995, VHA has made significant progress in transitioning from a disease-oriented, hospital based, professional-discipline focused health care system to a system that is patient centered, prevention-oriented, community based, and which has universal primary care as its foundation. As you know, our re-engineering efforts are continuing.

As has been discussed, numerous factors are affecting the system’s ability to provide care to enrollees. As we have improved services, increased the number of access points into the system, and generally improved the overall quality of VA health care, we have seen increased demand. In addition, coupled with ambitious budget targets, unforeseen clinical requirements, new technologies and new treatments for diseases, an infrastructure and processes not conducive to rapid change, and transition to outpatient primary care situations are challenges that, taken as a whole, have contributed to less than desirable access and waiting times in some areas.

Concerns have also been expressed about increased waiting times, both in specialty care clinics and primary care clinics. Anecdotally, the increases have been thought to be the result of enrollment. I am aware that some sites have reported an unanticipated increase in demand as a result of eligibility reform. The recent actuarial data suggest that these increases are initial reactions to the new eligibility criteria and will level off or decrease over time. Further, iIt should be noted at the outset that there are no data by which to compare current waiting times, with or without association to veteran priority, with waiting times prior to eligibility reform.

Waiting times for appointments in both primary and specialty care clinics vary across the system and within VISNs. Delays in obtaining appointments are due primarily to three circumstances: 1) a transition to universal primary care; 2) unanticipated increases in demand for care in some areas; and 3) processes that restrict our ability to promptly respond to infrastructure and human resource needs. Specialty care waiting delays are also affected by the need to recruit appropriate numbers of specialists in locations where they are needed; this was true prior to eligibility reform.

Recently, VHA sought to obtain estimates of local waiting times for primary care. These data are preliminary based on an informal survey, and we are still examining it to assess its accuracy. Additionally, they represent "point in time" information and thus may not be representative. The most important issues raised by this preliminary data are: 62% of patients nationally can obtain a primary care appointment within VHA's 30-day goal; and there is much variation among VISN’s in waiting times. The preliminary data show that six VISNs have all of their patients scheduled for the first primary care appointment in 30 days or less, while two VISNs have not provided primary care appointments to any patients within the 30 day goal. As we continue to analyze this data and other data on waiting times, we will keep you informed and share our information with you. Clearly our goal is to achieve 100% compliance with this measure. In the near-term, however, we are especially cognizant of the need to reduce waiting times in areas that are experiencing particularly long waits, and we have several initiatives underway (described below) to address this matter.

As we have implemented primary care and the care management it implies, we have faced the challenges of concurrently restructuring VA health care and taking other actions to generate the resources needed for this effort. These efforts are hampered by an infrastructure and processes not conducive to rapid change. We have also experienced difficulty in recruiting in some areas of the country in which recruitment is particularly challenging because the area is either not attractive for recruitment or the competition is particularly keen.

Some sites also continue to have problems obtaining non-physician providers, who could increase primary care capacity and free physicians.

Some sites have reported an unanticipated increase in demand as a result of eligibility reform. The recent actuarial data suggest that these increases are initial reactions to the new eligibility criteria and will level off or decrease over time.

As the Congress, the Administration, VSOs, and other stakeholders know, VA’s medical care budget is austere. Providing care with a flat-line budget over the past four years, without consideration for healthcare inflation, staff salaries, and uncontrollable costs (such as those associated with pharmaceuticals, prosthetics, emerging diseases, and current treatment modalities), has resulted in VA operating at the limit of its ability to adapt. This is true even with the many changes to become more cost-efficient instituted over the past four years. For that reason, funds to effect some of the needed changes in terms of outpatient staffing, as well as to underwrite modification of physical plants, must be balanced against other priorities.

To meet the current challenges regarding waiting time, VHA:

Conclusion

Thus far in FY 1999, we have maintained our ability to provide acute inpatient, outpatient and in-home care to all veterans, as medically indicated, and we have been able to meet the health care needs of all enrolled veterans. Nonetheless, we continue to monitor changes in access, outcomes, utilization, expenditures, and capacity of the system to provide the specialty and rehabilitation services, as well as enhanced primary and preventive care services. Above all, we are committed to providing the right care, in the right way, at the right time, in the right place, and for the right cost.

As I indicated earlier, we will be reviewing our total experience with enrollment, the level of resources that will be available in FY 2000, and other impacts on VA health care. We will be recommending an enrollment decision to the Secretary in the late summer. As the Congress, the Administration, VSOs, and other stakeholders know, VA’s medical care budget is challenging.

Mr. Chairman, this concludes my opening statement and I would be pleased to answer any questions you or the members of the subcommittee might have.