VA’s Private Health Plan Faces Huge Cost Overruns

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VA’s Private Health Plan Faces Huge Cost Overruns

The program was supposed to save money and lead to better health outcomes. It’s done neither.

In 2014, Congress passed the Veterans Access, Choice, and Accountability Act, which set up a temporary program that outsourced veterans’ care from the Veterans Health Administration (VHA) to private sector providers. In 2018, President Donald Trump signed the VA MISSION Act, which made this outsourcing program permanent and greatly expanded it. Indeed, the legislation set up a parallel private sector network—the Veterans Community Care Program or VCCP—which pays private sector providers to treat more than a third of the nine million veterans enrolled in the VHA.

The Veterans Community Care Program promised to give veterans speedier access to high-quality care if they couldn’t get a timely appointment at the VHA or had to drive too long to get to one. Instead, as many studies have documented, VCCP care is of lower quality than that provided by the VHA. It also takes longer, on average, to get an appointment with a VCCP provider than it does with one at the VHA, and perhaps most importantly, the cost of this private sector program is soaring. Between 2014 and 2024, expenses for veterans’ care in the community quadrupled from $8 billion to $31 billion, accounting for a third of the budget for veterans’ medical services.

One reason for surging costs is that too many VCCP providers are unnecessarily utilizing high-cost tests and procedures and fraudulently billing for care that was never delivered.

These skyrocketing expenses have caught the attention of key Senate Committee on Veterans’ Affairs members. In a June 2023 hearing, Bill Cassidy, a Louisiana Republican and physician, observed that over-treatment may be a contributing cause. Three months later, Jon Tester, the panel’s chair and a Montana Democrat, picked up on Cassidy’s astute connection between private sector treatment practices and the increased billions in community care expenses. Tester asked, “How do we control that?”

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