Joseph A. Williams, Jr. Acting Deputy Under Secretary for Operations and Management,VHA, appeared before the Senate Committee on Veterans Affairs on September 30th. He appeared before the Committee to discuss the Department of Veterans Affairs oversight of healthcare organizations contracting with the VA and in particular discussed how Project HERO operates.
There are two principal avenues that the VA uses to contract for healthcare services and this includes contracting with conventional commercial providers and contracting through academic affiliates. All VA healthcare resource contracts are reviewed through the Office of General Counsel, VHA’s Patient Care Services, VHA’s Office of Academic Affiliations, and VHA’s Procurement and Logistics Office. A formal Medical Sharing Review Committee is in place to provide management oversight on healthcare contracting requirements and the acquisition process.
Acting Deputy Under Secretary Williams explained that medical center directors determine when additional healthcare resources are required. When the VA is unable to provide care within the system, for example of a qualified clinician cannot be recruited, the medical director then must consider sending patients to another VA medical center. Contracting for necessary services will only be considered if these options are not appropriate or viable. If contracting for services is required, a competitive bid is the first option considered.
He further explained that since the VHA is not always able to provide veterans care within VA facilities, the VA has a continued need for non-VA services. An initiative established to closely manage the services the VA purchases is called the “Project on Healthcare Effectiveness through Resource Optimization or Project HERO. Project HERO is predominantly an outpatient program providing specialty services such as dental, ophthalmology, physical therapy, and other services not always available in the VA. Project HERO is in year two of a proposed five year contracting pilot to increase the quality and to decrease the cost for purchased (fee) care.
Project HERO contracts for medical prices with Humana Veterans Health Care Services (HVHS) at or below Medicare rates, and the VA’s contract rates with Delta Dental are less than 80 percent of National Dentistry Advisory Service Comprehensive Fee Report for dental services.
The HERO pilot program is currently available at VA Sunshine Healthcare Network (VISN 8), South Central VA Health Care Network (VISN 16), Northwest Network (VISN 20), and the VA Midwest Health Care Network (VISN 23). These VISNs have historically had high expenditures for non-VA purchased care.
According to Tim S McClain President and CEO, of HVHS in his testimony before the September 20th Senate Committee, that there are several myths out there circulating on the effectiveness of Project HERO. Myth number 1 is that Project HERO seeks to undermine the care currently provided inside VA Facilities. He reports that this is false because traditional VA fee-basis care provided through Project HERO are only authorized and provided when the requisite capacity inside the VA cannot support timely access to care or provide care through a specialty available in the VA.
Myth number 2 is that Project HERO reduces the need for the VA’s current fee-basis offices and staff due to services being outsourced. McClain reports that this is not true and explained that all referrals provided to Humana Veterans are generated out of the fee-basis offices at local VA facilities. Once a VA physician sends a referral to the fee office, it has already been determined that the VA does not have the capacity to provide for the care of the veteran, and at that point, the VA needs to decide what avenues are available to the veteran for care rendered outside the system..
However, there has been criticism of the Project HERO program. Mary A. Curtis, Psychiatric Clinical Nurse Specialist and Clinical Application Coordinator at the Boise VA Medical Center appeared at the September 30th hearing on behalf of the American Federation of Government Employees, AFL-CIO. She presented her objections to the Project HERO program.
She described how the Boise VA has a strong Community Care Home Telehealth program that treats veterans with congestive heart failure, diabetes, and other chronic conditions using remote equipment for blood pressure readings, other tests, and the program uses telehealth in their implantable defibrillator clinic. In addition, their mental health team travels to the CBOCs and to other outpatient settings to provide care and the Vet Center now has a new mobile clinic that is able to reach veterans in rural areas.
Curtis continued to explain that one of the specific complaints about the Project HERO is that the implementation and ongoing operations of Project HERO have been conducted largely behind closed doors. Based on the limited objective data available and observations by members in facilities participating in HERO, it appears that HERO has little or no “value added” and HERO contractors are simply not doing a better job at managing contract care than the VA.
In an action on July 29, 2009, the Office of Management and Budget directed federal agencies to end their overreliance on contractors, conduct an inventory of their in-house and contract workforce, and bring appropriate work back into the government.