WASHINGTON, D.C. – U.S. Senators Daniel K. Akaka (D-Hawaii), Chairman of the Veterans’ Affairs Committee, and Mark Begich (D-Alaska), Member of the Committee, urged the Department of Veterans Affairs to carefully study potential consequences of its proposal to adopt Medicare physician payment rates and other outpatient facility payment rates for non-VA contracted care, a proposal that would reduce payment to those providers.  In a letter sent Friday, Akaka and Begich recommended that VA phase in the proposed rule to avoid unintentionally harming veterans’ access to health care, especially those in rural areas.

“I applaud VA’s intent to control health care costs and replace its inconsistent fee-basis reimbursement system, but the Department must ensure that these changes do not harm the quality of care veterans receive,” said Akaka.  “Veterans rely on the Department to reimburse local health care providers for the care they have earned, especially in rural and remote communities where VA has a limited presence.  I urge VA to carefully study the potential impact their proposal will have on veterans who rely on contract care, and consider a measured phase-in approach to help community providers make the transition.”

Senator Begich said, “I have very strong concerns about the VA’s move to adopt Medicare payment rates for non-VA health care services.  We already are facing a crisis in Alaska with Medicare rates and don’t need to expand that to veterans.  The VA needs to slow down this transition and very carefully consider the effect it will have on veterans’ access to care.”

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VA runs the largest integrated health care system in the nation, but in certain situations veterans must rely on non-VA entities that are reimbursed by the Department.  VA spent $3,407,441,000 on fee-basis care in fiscal year 2009.  The Department estimates that by adopting Medicare payment rates, taxpayers would save $1.5 billion over the next five years.   

Akaka and Begich's letter to VA can be viewed here: LINK

VA’s proposed rule is open for public comment, and can be viewed here: LINK

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April 21, 2010