Veterans Choice Program: Further Improvements Needed to Help Ensure Timely Payments to Community Providers

Questions have been raised about the lack of timeliness of TPAs' payments to community providers under the Choice Program and how this may affect the willingness of providers to participate in the program as well as in the forthcoming Veterans Community Care Program. You asked GAO to review issues related to the timeliness of TPAs' payments to community providers under the Choice Program.

This report examines, among other things, (1) the length of time TPAs have taken to pay community providers' claims and factors affecting timeliness of payments, and (2) actions taken by VA and the TPAs to reduce the length of time TPAs take to pay community providers for Choice Program claims.

GAO reviewed TPA data on the length of time taken to pay community provider claims from November 2014 through June 2018, the most recent data available at the time of GAO's review. GAO also reviewed documentation, such as the contracts between VA and its TPAs, and interviewed VA and TPA officials. In addition, GAO interviewed a non-generalizable sample of 15 community providers, selected based on their large Choice Program claims volume, to learn about their experiences with payment timeliness.

The Department of Veterans Affairs' (VA) Veterans Choice Program (Choice Program) was created in 2014 to address problems with veterans' timely access to care at VA medical facilities. The Choice Program allows eligible veterans to obtain health care services from providers not directly employed by VA (community providers), who are then reimbursed for their services through one of the program's two third-party administrators (TPA). GAO's analysis of TPA data available for November 2014 through June 2018 shows that the length of time the TPAs took to pay community providers' clean claims each month varied widely—from 7 days to 68 days. VA and its TPAs identified several key factors affecting timeliness of payments to community providers under the Choice Program, including VA's untimely payments to TPAs, which in turn extended the length of time TPAs took to pay community providers' claims; and inadequate provider education on filing claims.

VA has taken actions to address key factors that have contributed to the length of time TPAs have taken to pay community providers. For example, VA updated its payment system and related processes to pay TPAs more quickly. According to VA data, as of July 2018, VA was paying at least 90 percent of the TPAs' invoices within 7 days. In addition, VA and the TPAs have taken steps to improve provider education to help providers resolve claims processing issues. However, 9 of the 15 providers GAO interviewed said they continue to experience lengthy telephone hold times. According to VA and TPA officials, steps have been taken to improve the customer service offered to community providers. However, VA officials do not collect data on or monitor TPA compliance with customer service requirements—such as calls being answered within 30 seconds or less—for provider calls because they said they are not enforcing the requirements and are allowing TPAs to prioritize calls from veterans. Without collecting data and monitoring compliance, VA does not have information on challenges providers may face when contacting TPAs to resolve payment issues.

GAO is making two recommendations, including that VA should collect data on and monitor compliance with its requirements pertaining to customer service for community providers. VA concurred with GAO's recommendations and described steps it will take to implement them.

The Veterans Access, Choice, and Accountability Act of 2014 created the  Veterans Choice Program (Choice Program) to address problems with  veterans’ timely access to care at Department of Veterans Affairs (VA)  medical facilities. Under the Choice Program, when eligible veterans  face long wait times, lengthy travel distances, or other challenges  accessing care at VA medical facilities, they may obtain health care  services from community providers—that is, providers who are not  directly employed by VA. The program is primarily administered by two  contractors, known as third-party administrators (TPA)—TriWest  Healthcare Alliance (TriWest) and Health Net Federal Services (Health  Net)—which are responsible for, among other things, establishing  nationwide networks of community providers, scheduling appointments  for veterans, and paying community providers for their services.

Since its implementation, the Choice Program has faced challenges and  drawn scrutiny. External reviews, media reports, and congressional  hearings held over the course of the Choice Program’s implementation  and operation have highlighted several programmatic weaknesses. These  weaknesses have included insufficient community provider networks,  significant delays in scheduling appointments, and a lack of timely  payments by the TPAs to community providers.  Media reports suggest  that the untimely payments to community providers have created financial  hardship for some and a reluctance to continue participating in the Choice  Program. This has raised concerns that a reduction in participating  community providers will increase wait times for veterans and result in  longer travel distances, especially in rural areas. Due to these and other  concerns, we concluded that VA health care is a high-risk area and added  it to our High Risk List in 2015.

Congress recently passed legislation to help address some of the  challenges faced by the Choice Program and VA’s other community care  programs. Specifically, the VA MISSION  Act of 2018, signed into law in  June 2018, requires VA to consolidate the Choice Program and its other  VA community care programs into one community care program—the  Veterans Community Care Program—in addition to authorizing VA to  utilize a TPA for claims processing and requiring VA to reimburse  community providers in a timely manner.  Currently, VA is in the process  of evaluating proposals for the Veterans Community Care Program.  Under the current request for proposals (RFP) there will be an up to 1- year implementation period, and the new program is expected to begin  serving veterans in fiscal year 2019. The Choice Program is expected to  continue until that time and will statutorily sunset after June 6, 2019.

You asked us to review issues related to the timeliness of TPAs’  payments to community providers under the Choice Program. In this  report, we examine  1. the length of time TPAs have taken to pay community providers’  claims under the Choice Program, VA’s efforts to monitor these time  frames, and factors that affected timeliness of payments, and  2.  actions taken by VA and the TPAs to reduce the length of time TPAs  take to pay community providers for Choice Program claims.

To examine the length of time TPAs have taken to pay community  providers’ claims under the Choice Program, factors affecting timeliness  of payments, and VA’s efforts to monitor these time frames, we reviewed  TPA data on the length of time it took TPAs to pay claims and the number  and percentage of claims rejected or denied over the course of the  Choice Program, from November 2014 through June 2018, the most  recent data available at the time of our review.  To assess the reliability of  these data, we collected information from TPA officials regarding the  reliability of the data and reviewed the data for obvious errors and missing  values. We discussed and worked with TPA officials to resolve any  identified data issues. On the basis of these steps, we determined the  claim payment data were sufficiently reliable for the purposes of our  reporting objectives. However, data limitations prohibited us from  assessing the extent to which the two TPAs rejected or denied claims.  We also reviewed VA and TPA documentation, such as the contracts  between VA and its TPAs, contract modifications, and VA’s RFP for its  new contracts for the Veterans Community Care Program. We  interviewed VA contracting officials and officials from the Office of  Community Care (the office within VA’s Veterans Health Administration  responsible for implementing and overseeing the Choice Program) as  well as TPA officials about VA’s efforts to monitor TPA data on payment  time frames, as well as claim rejections and denials, and factors that  contributed to the length of time VA’s TPAs have taken to pay providers.  In addition, between April and June 2018, we interviewed a non- generalizable sample of 15 providers—including 7 that either currently  participate or previously participated in the TriWest community provider  network and 10 that either currently participate or previously participated  in the Health Net community provider network—to identify any additional  factors affecting payment time frames. We selected the providers with  the largest Choice Program claims volume from July 2017 through  December 2017, based on the most recent TPA data available at the time  we selected these providers.

To examine the actions taken by VA and the TPAs to reduce the length of  time TPAs take to pay community providers for Choice Program claims,  we reviewed VA and TPA documentation, such as contract modifications  and policy documents. We also interviewed VA contracting officials and  Office of Community Care officials as well as TPA officials. In addition, we  interviewed the 15 selected providers to determine how claim payment  timeliness issues have affected them. We assessed the actions taken by  VA and the TPAs to address the factors that contributed to the length of  time taken to pay providers against federal standards for internal control  for performing monitoring activities.

We conducted this performance audit from February 2018 through  September 2018 in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform our  work to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.

The Veterans Access, Choice, and Accountability Act of 2014 provided up  to $10 billion in funding for veterans to obtain health care services from  community providers through the Choice Program when veterans faced  long wait times, lengthy travel distances, or other challenges accessing  care at VA medical facilities. The temporary authority and funding for  the Choice Program was separate from other previously existing  programs through which VA has the option to purchase care from  community providers. Legislation enacted in August and December of  2017 and June 2018 provided an additional $9.4 billion for the Veterans  Choice Fund. Authority of the Choice Program will sunset on June 6,  2019.

Responsibilities of the Choice Program TPAs

In October 2014, VA modified its existing contracts with two TPAs that  were administering another VA community care program—the Patient- Centered Community Care program—to add certain administrative  responsibilities associated with the Choice Program. For the Choice  Program, each of the two TPAs—Health Net and TriWest—are  responsible for managing networks of community providers who deliver  care in a specific multi-state region. (See fig. 1.) Specifically, the TPAs  are responsible for establishing networks of community providers,  scheduling appointments with community providers for eligible veterans,  and paying community providers for their services. Health Net’s contract  for administering the Choice Program will end on September 30, 2018,  whereas TriWest will continue to administer the Choice Program until the  program ends, which is expected to occur in fiscal year 2019.

Choice Program Claim Processing and Payment

VA’s TPAs process claims they receive from community providers for the  care they deliver to veterans and pay providers for approved claims.  Figure 2 provides an overview of the steps the TPAs follow for processing  claims and paying community providers.

VA’s contracts with the TPAs do not include a payment timeliness  requirement applicable to the payments TPAs make to community  providers. Instead, a contract modification effective in March 2016  established a non-enforceable “goal” of processing—approving, rejecting  or denying—and, if approved, paying clean claims within 30 days of  receipt.

To be reimbursed for its payments to providers, the TPAs in turn submit  electronic invoices—or requests for payment—to VA. TPAs generate an  invoice for every claim they receive from community providers and pay.  VA reviews the TPAs’ invoices and either approves or rejects them.  Invoices may be rejected, for example, if care provided was not  authorized. Approved invoices are paid, whereas rejected invoices are  returned to the TPAs. The federal Prompt Payment Act requires VA to  pay its TPAs within 30 days of receipt of invoices that it approves.

VA’s Planned Consolidated Community Care Program

The VA MISSION  Act of 2018, among other things, requires VA to  consolidate its community care programs once the Choice Program  sunsets 1 year after the passage of the Act, authorizes VA to utilize a  TPA for claims processing, and requires VA to reimburse community  providers in a timely manner. Specifically, the act requires VA (or its  TPAs) to pay community providers within 30 days of receipt for clean  claims submitted electronically and within 45 days of receipt for clean  claims submitted on paper.

In December 2016, prior to enactment of the VA MISSION  Act of 2018,  VA issued an RFP for contractors to help administer the Veterans  Community Care Program. The Veterans Community Care Program will  be similar to the current Choice Program in certain respects. For  example, VA is planning to award community care network contracts to  TPAs, which would establish regional networks of community providers  and process and pay those providers’ claims. However, unlike under the  Choice Program, under the Veterans Community Care Program, VA is  planning to have medical facilities—not the TPAs—generally be  responsible for scheduling veterans’ appointments with community  providers.

The Length of Time Taken by TPAs to Pay Claims from Community Providers Has Varied Widely, and VA’s Monitoring of This Timeliness Has Been Limited

The Time TPAs Have Taken to Pay Claims Has Varied Widely, and Available Data Do Not Account for Payment Delays Due To Rejected or Denied Claims

From November 2014 through June 2018, VA’s TPAs paid a total of  about 16 million clean claims—which are claims that contain all required  data elements—under the Choice Program, of which TriWest paid about  9.6 million claims and Health Net paid about 6.4 million. Data on the  median number of days VA’s TPAs have taken to pay clean claims each  month show wide variation over the course of the Choice Program—from  7 days to 68 days. As discussed previously, in March 2016, VA  established a non-enforceable goal for its TPAs to process and, if  approved, pay clean claims within 30 days of receipt each month. Most  recently, from January through June 2018, the median number of days  taken to pay clean claims ranged from 26 to 28 days for TriWest, while it  ranged from 28 to 44 days for Health Net. (See fig. 3.)

In addition to the 16 million clean claims the TPAs paid from November  2014 through June 2018, during this time period they also paid  approximately 650,000 claims (or 4 percent of all paid claims) that were  classified as non-clean claims when first received after obtaining the  required information. Non-clean claims are claims that are missing  required information, which the TPA must obtain before the claim is paid.  From November 2014 through June 2018, TriWest paid around 641,000  non-clean claims (or 6 percent of all paid claims) while Health Net paid  about 9,600 non-clean claims (or less than 1 percent of all paid claims).  Data on the median number of days VA’s TPAs have taken to pay non- clean claims each month also show wide variation over the course of the  Choice Program—from 9 days to 73 days. (See fig. 4.)

The data on the time TPAs have taken to pay approved clean and non- clean claims do not fully account for the length of time taken to pay  providers whose claims are initially rejected or denied, as, according to  the TPAs, providers are generally required to submit a new claim when  the original claim is rejected or denied. Thus, providers that submit  claims that are rejected or denied may experience a longer wait for  payment for those claims or may not be paid at all. In some cases,  providers’ claims may be rejected or denied multiple times after  resubmission.

Stakeholders Identified Three Key Factors Affecting the Timeliness of Claim Payments to Community Providers under the Choice Program

VA and its TPAs identified three key factors affecting the timeliness of  claim payments to community providers under the Choice Program: (1)  VA’s untimely payments of TPA invoices; (2) Choice Program contractual  requirements related to provider reimbursement; and (3) inadequate  provider education on filing Choice Program claims, as discussed below.

VA’s untimely payments of TPA invoices. According to VA and TPA  officials, VA made untimely invoice payments to its TPAs—that is,  payments made more than 30 days from the date VA received the TPAs’  invoices—which resulted in the TPAs at times having insufficient funds  available to pay community providers under the Choice Program.  A VA  Office of Inspector General (OIG) report estimated that from November  2014 through September 2016, 50 percent of VA’s payments to its TPAs  during this time frame were untimely.  VA officials stated that VA’s  untimely payments to the TPAs resulted from limitations in its fee-basis  claims system, which VA used at the beginning of the Choice Program to  process all TPA invoices. In addition, the VA OIG found that VA  underestimated the number of staff necessary to process Choice  Program invoices in a timely manner.

Choice Program reimbursement requirements. According to VA and  TPA officials, three Choice Program requirements, some of which were  more stringent than similar requirements in other federal health care  programs, led to claim denials, which, in turn, contributed to the length of  time TPAs have taken to pay community providers when the providers did  not meet these requirements:  1.  Medical documentation requirement. Prior to a March 2016  contract modification, VA required providers to submit relevant  medical documentation with their claims as a condition of payment  from the TPAs. According to TriWest officials, those Choice  Program claims that did not include medical documentation were  classified by TriWest as non-clean claims and placed in pending  status until the documentation was received. When community  providers did not provide the supporting medical documentation after  a certain period of time, TriWest typically denied their claims.  According to Health Net officials, Choice Program claims that did not  include medical documentation were denied by Health Net.  2.  Timely filing requirement. VA requires providers to file Choice  Program claims within 180 business days from the end of an episode  of care. TPAs deny claims that are not filed within the required time  frame.  3.  Authorization requirement. VA requires authorizations for  community providers to serve veterans under the Choice Program  and receive reimbursement for their services; however, if community  providers deliver care after an authorization period or include services  that are not authorized, the TPAs typically deny their claims.  According to TPA data, denials related to authorizations are among  the most common reasons the TPAs deny community provider claims.

Inadequate provider education on filing Choice Program claims.  According to VA and TPA officials as well as providers we interviewed,  issues related to inadequate provider education may have contributed to  the length of time it has taken the TPAs to pay community providers  under the Choice Program. These issues have included providers  submitting claims with errors, submitting claims to the wrong payer, or  otherwise failing to meet Choice Program requirements. For example,  some VA community care programs require the claims to be sent to one  of VA’s claims processing locations, while the Choice Program requires  claims to be sent to TriWest or Health Net. Claims sent to the wrong  entity are rejected or denied and have to be resubmitted to the correct  payer. Ten of the 15 providers we interviewed stated that that they lacked  education and/or training on the claims filing process when they first  began participating in the Choice Program, including knowing where to  file claims and the documentation needed to file claims that would be  processed successfully. Four of these 10 providers stated that they  learned how to submit claims through trial and error.

VA’s Monitoring of Claim Payment Timeliness Has Been Limited under the Choice Program, but VA Plans to Strengthen Monitoring under the Veterans Community Care Program

At the infancy of the Choice Program, November 2014 through March  2016, VA was unable to monitor the timeliness of its TPAs’ payments to  community providers because it did not require the TPAs to provide data  on the length of time taken to pay these claims. Effective in March 2016,  VA modified its TPA contracts and subsequently began monitoring TPA  payment timeliness, requiring TPAs to report information on claims  processing and payment timeliness as well as information on claim  rejections and denials. However, because VA had not established a  payment timeliness requirement, VA officials said that VA had limited  ability to penalize TPAs or compel them to take corrective actions to  address untimely claim payments to community providers. Instead, the  March 2016 contract modification established a non-enforceable goal for  the TPAs to process and pay clean claims within 30 days of receipt. As of  July 2018, according to VA officials, VA did not have a contractual  requirement it could use to help ensure that community providers  received timely payments in the Choice Program.

Officials from VA’s Office of Community Care told us that VA’s experience  with payment timeliness in the Choice Program informed VA’s RFP for  new contracts for the Veterans Community Care Program, which includes  provisions that strengthen VA’s ability to monitor its future TPAs. For  example, in addition to requiring future TPAs to submit weekly reports on  claim payment timeliness as well as claim rejections and denials, VA’s  RFP includes claim payment timeliness standards that are similar to  those in the Department of Defense’s TRICARE program.  Specifically,  according to the RFP, TPAs in the Veterans Community Care Program  will be required to process and pay, if approved, 98 percent of clean claims within 30  return claims, other than clean claims, to the provider with a clear  explanation of deficiencies within 30 days of original receipt, and process resubmitted claims within 30 days of resubmission receipt.

The RFP also identifies monitoring techniques that VA may employ to  assess compliance with these requirements, including periodic  inspections and audits. VA officials told us that VA will develop a plan for  monitoring the TPAs’ performance on these requirements once the  contracts are awarded.

VA Has Addressed Some but Not All of the Key Factors Affecting the Timeliness of Claim Payments to Community Providers under the Choice Program

We found that VA has made system and process changes that improved  its ability to pay TPA invoices in a timely manner. However, while VA has  modified two Choice Program requirements that contributed to provider  claim payment delays, it has not fully addressed delays associated with  authorizations for care. Furthermore, while VA and its TPAs have taken  steps to educate community providers in order to help prevent claims  processing issues, 9 of the 15 providers we interviewed reported poor  customer service when attempting to resolve these issues.

VA Has Changed Its System and Processes for Paying TPA Invoices in order to Improve Its Ability to Pay TPAs in a Timely Manner

VA has taken steps to reduce untimely payments to its TPAs, which  contributed to delayed TPA payments to providers, by implementing a  new system and updating its processes for paying TPA invoices so that it  can pay these invoices more quickly. Specifically, VA has made the  following changes:  In March 2016, VA negotiated a contract modification with both TPAs  that facilitated the processing of certain TPA invoices outside of the  fee basis claims system from March 2016 through July 2016.   According to VA officials, due to the increasing volume of invoices that  the TPAs were expecting to submit to VA during this time period,  without this process change, VA would have experienced a high  volume of TPA invoices entering its fee basis claims system, which  could have exacerbated payment timeliness issues.

In February through April 2017, VA transitioned all TPA invoice  payments from its fee basis claims system to an expedited payment  process under a new system called Plexis Claims Manager.  VA  officials told us that instead of re-adjudicating community provider  claims as part of its review of TPA invoices, Plexis Claims Manager  performed up front checks in order to pay invoices more quickly, and  any differences in billed and paid amounts were addressed after  payments were issued to the TPAs.

In January 2018, VA transitioned to a newer version of the Plexis  Claims Manager that enabled VA to once again re-adjudicate  community provider claims as part of processing TPA invoices, but in  a timelier manner compared with the fee basis claims system.  According to VA officials, this is due to the automation of claims  processing under Plexis Claims Manager, which significantly reduced  the need for manual claims processing by VA staff that occurred  under the fee basis claims system. Based on VA data, as of July  2018, VA is paying 92 percent of TriWest’s submitted invoices within 7  days, with payments being made in an average of 4 days, and 90  percent of Health Net’s invoices within 7 days, with payments being  made in an average of 4 days under the newer version of Plexis  Claims Manager.

In addition to steps taken to address untimely payments to the TPAs  under the current Choice Program contracts, VA has taken steps to help  assure payment timeliness in the forthcoming Veterans Community Care  Program. Specifically, the RFP includes a requirement for VA to  reimburse TPAs within 14 days of receiving an invoice. VA officials stated  that to achieve this metric, they are implementing a new payment system  that will replace Plexis Claims Manager and will no longer re-adjudicate  TPA invoices prior to payment.

VA Has Modified Two Choice Program Requirements That Contributed to Provider Payment Delays, but Has Not Fully Addressed Delays Associated with Authorizations for Care

VA has issued a contract modification and waivers for two Choice  Program contract requirements that contributed to provider payment  delays—(1) the medical documentation requirement and (2) the timely  filing requirement. However, while VA issued a contract modification to  amend the requirements for obtaining authorizations for Choice Program  care, provider payment delays associated with requesting these  authorizations may persist, because VA is not ensuring that VA medical  centers review and approve these requests within required time frames.

Elimination of medical documentation requirement. Effective  beginning March 2016, VA issued a contract modification that eliminated  the requirement that community providers must submit medical  documentation as a condition of receiving payment for their claims. Data  from one TPA showed a reduction in non-clean claims following the  implementation of this contract modification. For example, starting in  April 2016, after this modification was executed, almost 100 percent of claims submitted to TriWest were classified as clean claims, as opposed  to 49 percent of claims submitted in March 2016. However, when the  modification first went into effect in March 2016, TriWest and Health Net  officials stated that they processed a large amount of claims from  community providers that had previously been pended or denied because  they lacked medical documentation and, in turn, submitted a large  number of invoices to VA for reimbursement. As previously discussed, to  help address the increased number of TPA invoices, VA issued lump-sum  payments to the TPAs during this time period.

Modification of timely filing requirement. In February and May 2018,  VA issued waivers that gave TPAs the authority to allow providers to  resubmit rejected or denied claims more than 180 days after the end of  the episode of care if the original claims were submitted timely—that is,  within 180 days of the end of the episode of care. VA officials stated that  the waivers were intended to reduce the number of rejected and denied  claims by giving community providers the ability to resubmit previously  rejected or denied claims for which the date of service occurred more  than 180 days ago. VA’s waivers were implemented as follows:  In February 2018, VA issued a waiver that allowed community  providers to resubmit certain claims rejected or denied for specific  reasons when the provider or TPA could verify that the provider made  an effort to submit the claim prior to the claims submission deadline.

In May 2018, VA issued a second waiver that removed the 180 day  timeliness requirement for all Choice Program claims. The waiver also  provided instructions to the TPAs on informing providers that they  may resubmit claims rejected or denied for specific reasons and how  the TPAs are to process the resubmitted claims.

In regards to the first waiver, TPA officials stated that the processing of  those resubmitted claims adversely affected the timeliness of the TPAs’  payments to community providers because the waiver resulted in a large  influx of older claims. As the second waiver was in the process of being  implemented by the two TPAs at the time we conducted our work, we  were unable to determine if the second waiver affected the TPAs’  provider payment timeliness.

Changes to authorization of care requirement. VA issued a contract  modification in January 2017 to expand the time period for which  authorizations for community providers to provide care to veterans under  the Choice Program are valid.  In addition, in May 2017, VA expanded  the scope of the services covered by authorizations, allowing them to  encompass an overall course of treatment, rather than a specific service  or set of services. According to VA officials, the changes VA made  related to the authorization of care requirement were also intended to  reduce the need for secondary authorization requests (SAR). Community  providers request SARs when veterans need health care services that  exceed the period or scope of the original authorizations. Community  providers are required to submit SARs to their TPA, which, in turn,  submits the SARs to the authorizing VA medical facility for review and  approval. Both Health Net and TriWest officials told us that since VA  changed the time frame and scope of authorizations, the number of SARs  has decreased.

Despite efforts to decrease the number of SARs, payment delays or claim  denials are likely to continue if SARs are needed. We found that VA is not  ensuring that VA medical facilities are reviewing and approving SARs  within required time frames. VA policy states that VA medical facilities are  to review and make SAR approval decisions within 5 business days of  receipt. However, officials from one of the TPAs and 7 of the 15  providers we interviewed stated that VA medical facilities are not  reviewing and approving SARs in a timely manner. According to TriWest  officials, as of May 2018, VA medical facilities in their regions were taking  an average of 11 days to review and make approval decisions on SARs,  with four facilities taking over 30 days for this process.

According to an official from VA’s Office of Community Care, VA does not  currently collect reliable national data to track the extent of nonadherence  to the VA policy to review and make SAR approval decisions within 5  business days. The official told us that instead, VA relies on employees  assigned to each Veterans Integrated Service Network to monitor data on  VA medical facilities’ timeliness in making these SAR approval  decisions. If a VA medical facility is found not to be in adherence with  the SAR policy, the official told us that staff assigned to the Veterans  Integrated Service Network attempt to identify the reasons for  nonadherence, and perform certain corrective actions, including providing  education to the facility. Despite these actions, the official told us that  there are still VA medical facilities not in adherence with VA’s SAR  approval policy.

According to a VA official, VA is in the process of piloting software for  managing authorizations that will allow VA to better track SAR approval  time frames across VA medical facilities in the future. However, even after  this planned software is implemented, if VA does not use the data to  monitor and assess SAR approval decision time frames VA will be unable  to ensure that all VA medical facilities are adhering to the policy.  Standards for internal control in the Federal Government state that  management should establish and operate monitoring activities to  evaluate whether a specific function or process is operating effectively  and take corrective actions as necessary. Furthermore, monitoring such  data will allow VA to identify and take actions as needed to address any  identified challenges VA medical facilities are encountering in meeting the  required approval decision time frames. Without monitoring data to  ensure that all VA medical facilities are adhering to the SAR approval  time frames as outlined in VA policy, community providers may delay care  until the SARs are approved or provide care without SAR approval. This  in turn increases the likelihood that the community providers’ claims will  be denied. Further, continued nonadherence to VA’s SAR policy raises  concerns about VA’s ability to ensure timely approval of SARs when VA  medical facilities assume more responsibilities for ensuring veterans’  access to care under the forthcoming Veterans Community Care  Program.

TPAs Have Taken Steps to Improve Provider Education to Help Providers Resolve Claims Processing Issues, but Many Providers Still Report Poor Customer Service

We found that VA and its TPAs have taken steps to educate community  providers in order to help prevent claims processing issues that have  contributed to the length of time TPAs have taken to pay these providers.  Despite these efforts, 9 of the 15 providers we interviewed reported poor  customer service when attempting to resolve claims payment issues.

While VA’s contracts with the TPAs do not include requirements for  educating and training providers on the Choice Program, both TPAs have  taken steps to educate community providers on how to successfully  submit claims under the Choice Program. Specifically, TriWest and  Health Net officials told us that they have taken various steps to educate  community providers on submitting claims correctly, including sending  monthly newsletters, emails, and faxes to communicate changes to the  Choice Program; updating their websites with claims processing  information; and holding meetings with some providers monthly or  quarterly to resolve claims processing issues. Officials from both TPAs  also told us that they provided one-on-one training to some providers on  the claims submission process to help reduce errors when submitting  claims. In addition, VA’s RFP for the Veterans Community Care Program  contracts includes requirements to provide an annual training program  curriculum and an initial on-boarding and ongoing outreach and education  program for community providers, which includes training on the claims  submission and payment processes and TPA points of contact.

VA and the TPAs have also made efforts to help providers resolve claims  processing issues and outstanding payments. For example,

VA launched its “top 20 provider initiative” in January 2018 to work  directly with community providers with high dollar amounts of unpaid  claims and resolve ongoing claims payment issues. This initiative  included creating rapid response teams to work with community  providers to settle unpaid claim balances within 90 days and working  with both TPAs to increase the number of clean claims paid in less  than 30 days. In addition, VA has developed webinars on VA’s  community care programs and—in conjunction with trade  organizations and health care systems—has delivered provider  education on filing claims properly.

TriWest officials stated that it has educated the customer service staff  at its claims processing sub-contractor, who field community provider  calls regarding claims processing issues, to help ensure that the staff  are familiar with Choice Program changes and can effectively assist  community providers and resolve claims processing issues. Internal  TriWest data show that providers’ average wait time to speak to a  customer service representative about claims processing issues  decreased from as high as 18 minutes in 2016 to as low as 2.5  minutes in 2018.

Health Net officials were unable to provide data, but stated that since  the fourth quarter of 2017, Health Net has decreased the time it takes  for a community provider to speak with a customer service  representative by adding additional staff and extending the hours in  which providers can call with questions. In addition, Health Net  officials stated that they have required customer service staff to  undergo additional training related to resolving claims processing  issues.

Despite these efforts, 7 of the 10 providers that participate in the Health  Net network and 2 of the 7 providers that participate in the TriWest  network we interviewed between April and June 2018 told us that when  they contact the TPAs’ customer service staff to address claim processing  questions, such as how to resolve claim rejections or denials, they  experience lengthy hold times, sometimes exceeding one hour. In  addition, 7 of the 15 providers we spoke with told us they typically reach  employees who are unable to answer their questions. According to these  providers, this experience frustrated them, as they often did not  understand why a claim had been denied or rejected, and they required  assistance correcting the claim so it could be resubmitted. One  community provider stated that their common practice to resolve  questions or concerns was to call customer service enough times until  they received the same answer twice from a TPA representative. In  addition, 5 of the 10 Health Net providers we interviewed stated that they  have significant outstanding claim balances owed to them. One of these  providers—who reported over $3 million in outstanding claims—stressed  the importance of being able to effectively resolve claims issues with TPA  customer service staff, as the administrative burden of following up on  outstanding claim balances takes time away from caring for patients.

The issues concerning customer service wait times and TPA staff inability  to resolve some claims processing issues reported by community  providers appear to be inconsistent with VA contractual requirements.

VA’s current Choice Program contracts require the TPAs to establish a  customer call center to respond to calls from veterans and non-VA  providers. The contract requires specified levels of service for telephone  inquiries at the call center. For example, VA requires TPA representatives  to answer customer service calls within an average speed of 30 seconds  or less and requires 85 percent of all inquiries to be fully and completely  answered during the initial telephone call. However, VA officials explained  that VA does not enforce the contractual requirement for responding to  calls from community providers. Furthermore, according to these officials,  VA allows the TPAs to prioritize calls from veterans. Officials from VA’s  Office of General Counsel, Procurement Law Group, confirmed that this  requirement does apply to the TPAs’ handling of calls from community  providers. Because VA does not enforce the customer service  requirement for providers, VA has not collected data on or monitored the  TPAs’ compliance with these requirements for providers’ calls.

As previously stated, standards for internal control in the Federal  Government state that management should establish and operate  monitoring activities to evaluate whether a specific function or process is  operating effectively and take corrective actions as necessary. Without  collecting data and monitoring customer service requirements for provider  calls, VA does not have information on the extent to which community  providers face challenges when contacting the TPAs about claims  payment issues that could contribute to the amount of time it takes to  successfully file claims and receive reimbursement for services under the  Choice Program. This, in turn, poses a risk to the Choice Program to the  extent that community providers who face these challenges decide not to  serve veterans under the Choice Program.

Looking forward, VA has included customer service requirements in its  RFP for the Veterans Community Care Program contracts, and VA  officials have told us that these requirements are applicable to provider  calls. For example, the RFP includes a requirement for its future TPAs to  establish and maintain call centers to address inquiries from community  providers and has established customer service performance metrics to  monitor call center performance.  Monitoring data on provider calls under  the contracts will be important as Veterans Community Care Program  TPAs will continue to be responsible for building provider networks,  processing claims, and resolving claims processing issues.

The Choice Program relies on community providers to deliver care to  eligible veterans when VA is unable to provide timely and accessible care  at its own facilities. Although VA has taken steps to improve the  timeliness of TPA claim payments to providers, VA is not collecting data  or monitoring compliance with two Choice Program requirements, and  this could adversely affect the timeliness with which community providers  are paid under the Choice Program. First, VA does not have complete  data allowing it to effectively monitor adherence with its policy for VA  medical facilities to review SARs within 5 days of receipt, which impacts  its ability to meet the requirement. To the extent that VA medical facilities  delay these reviews and approvals, community providers may have to  delay care or deliver care that is not authorized, which in turn increases  the likelihood that the providers’ claims will be denied and the providers  will not be paid. Second, VA requires the TPAs to establish a customer  call center to respond to calls from veterans and non-VA providers.  However, VA does not enforce the contractual requirement for responding  to calls from community providers and allows the TPAs to prioritize calls  from veterans. Consequently, VA is not collecting data, monitoring, or  enforcing compliance with its contractual requirements for the TPAs to  provide timely customer service to providers. As a result, VA does not  have information on the extent to which community providers face  challenges when contacting the TPAs about claims payment issues,  which could contribute to the amount of time it takes to receive  reimbursement for services.

To the extent that these issues make community providers less willing to  continue participating in the Choice Program and the forthcoming  Veterans Community Care Program, they pose a risk to VA’s ability to  successfully implement these programs and ensure veterans’ timely  access to care.

We are making the following two recommendations to VA:  Once VA’s new software for managing authorizations has been fully  implemented, the Undersecretary for Health should monitor data on SAR  approval decision time frames to ensure VA medical facilities are in  adherence with VA policy, assess the reasons for nonadherence with the  policy, and take corrective actions as necessary. (Recommendation 1)

The Undersecretary for Health should collect data and monitor  compliance with the Choice Program contractual requirements pertaining  to customer service for community providers, and take corrective actions  as necessary. (Recommendation 2)

We provided a draft of this report to VA for review and comment. In its  written comments, reproduced in appendix I, VA concurred with our two  recommendations and said it is taking steps to address them. For  example, VA plans to implement software in spring 2019 that will  automate the SAR process and allow for streamlined reporting and  monitoring of SAR timeliness to ensure ongoing compliance. Additionally,  VA has included provider customer service performance requirements  and metrics in its Veterans Community Care Program RFP, and will  require future contractors to provide a monthly report to VA on their call  center operations and will implement quarterly provider satisfaction  surveys.

We are sending copies of this report to the Secretary of Veterans Affairs,  the Under Secretary for Health, appropriate congressional committees,  and other interested parties. This report is also available at no charge on  the GAO Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  Sharon M. Silas at (202) 512-7114 or silass@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs are on the last  page of this report. GAO staff who made major contributions to this report  are listed in appendix II.

Appendix I: Comments from the Department of Veterans Affairs

Appendix II: GAO Contact and Staff Acknowledgments

In addition to the contact named above, Marcia A. Mann (Assistant  Director), Michael Zose (Analyst-in-Charge), and Kate Tussey made  major contributions to this report. Also contributing were Krister Friday,  Jacquelyn Hamilton, and Vikki Porter.

The VA's Veterans Choice Program allows veterans to get health care from providers not directly employed by VA (community providers), such as when facing long wait times at VA facilities.

VA uses contractors to pay providers for their services to veterans. But contractor payment times have varied, sometimes causing delays in providers' payments. The result: providers may not want to continue participating in the Choice Program, which may decrease veterans' access to health care.

A Veterans Community Care Program to replace the Choice Program is to begin in 2019. We recommended that VA take steps to correct provider payment issues.

Question: Why was the VA Choice Program created?

Answer: The Department of Veterans Affairs' (VA) Veterans Choice Program (Choice Program) was created in 2014 to address problems with veterans' timely access to care at VA medical facilities.

Question: How does the VA Choice Program aid veterans?

Answer: The Choice Program allows eligible veterans to obtain health care services from providers not directly employed by VA (community providers), who are then reimbursed for their services through one of the program's two third-party administrators (TPA).

Question: What does the GAO's analysis of the TPA data show?

Answer: GAO's analysis of TPA data available for November 2014 through June 2018 shows that the length of time the TPAs took to pay community providers' clean claims each month varied widely—from 7 days to 68 days.

Question: What factors were identified as affecting timeliness of payments?

Answer: VA and its TPAs identified several key factors affecting timeliness of payments to community providers under the Choice Program, including VA's untimely payments to TPAs, which in turn extended the length of time TPAs took to pay community providers' claims; and inadequate provider education on filing claims.

Responsibilities of the Choice Program TPAs

The Length of Time Taken by TPAs to Pay Claims from Community Providers Has Varied Widely, and VA’s Monitoring of This Timeliness Has Been Limited

The Time TPAs Have Taken to Pay Claims Has Varied Widely, and Available Data Do Not Account for Payment Delays Due To Rejected or Denied Claims

Stakeholders Identified Three Key Factors Affecting the Timeliness of Claim Payments to Community Providers under the Choice Program

Question: What factors did the VA identify?

Answer: VA has taken actions to address key factors that have contributed to the length of time TPAs have taken to pay community providers. For example, VA updated its payment system and related processes to pay TPAs more quickly. According to VA data, as of July 2018, VA was paying at least 90 percent of the TPAs' invoices within 7 days.

Question: How has the VA attempted to improve timeliness?

Answer: In addition, VA and the TPAs have taken steps to improve provider education to help providers resolve claims processing issues.

Question: How effective have these efforts been?

Answer: However, 9 of the 15 providers GAO interviewed said they continue to experience lengthy telephone hold times.

Question: What else has been done to improve the VA experience?

Answer: According to VA and TPA officials, steps have been taken to improve the customer service offered to community providers.

Question: Has this been successful?

Answer: However, VA officials do not collect data on or monitor TPA compliance with customer service requirements—such as calls being answered within 30 seconds or less—for provider calls because they said they are not enforcing the requirements and are allowing TPAs to prioritize calls from veterans. Without collecting data and monitoring compliance, VA does not have information on challenges providers may face when contacting TPAs to resolve payment issues.

VA Has Addressed Some but Not All of the Key Factors Affecting the Timeliness of Claim Payments to Community Providers under the Choice Program

VA Has Changed Its System and Processes for Paying TPA Invoices in order to Improve Its Ability to Pay TPAs in a Timely Manner

TPAs Have Taken Steps to Improve Provider Education to Help Providers Resolve Claims Processing Issues, but Many Providers Still Report Poor Customer Service

Question: What did the GAO review?

Answer: GAO reviewed TPA data on the length of time taken to pay community provider claims from November 2014 through June 2018, the most recent data available at the time of GAO's review.

Question: What supplemental material did they use?

Answer: GAO also reviewed documentation, such as the contracts between VA and its TPAs, and interviewed VA and TPA officials.

Question: How did GAO gather data to assess the TPA?

Answer: In addition, GAO interviewed a non-generalizable sample of 15 community providers, selected based on their large Choice Program claims volume, to learn about their experiences with payment timeliness.

VA’s Monitoring of Claim Payment Timeliness Has Been Limited under the Choice Program, but VA Plans to Strengthen Monitoring under the Veterans Community Care Program