Nov 26, 2018
The U.S. Department of Defense (DoD) and U.S. Department of Veterans Affairs (VA) health systems provide services through a mix of direct care, delivered at government facilities, and purchased care, provided through the private sector, mainly by community-based providers who have entered into contracts with third-party administrators (TPAs). In the interest of expanding DoD-VA resource sharing that may lead to greater efficiencies and cost savings, the DoD/VA Joint Executive Committee is exploring options to integrate DoD and VA's purchased care programs. This preliminary feasibility assessment examined how an integrated approach to purchasing care could affect access, quality, and costs for beneficiaries, DoD, and VA and identified general legislative, policy, and contractual challenges to implementing an integrated purchased care program.
An integrated approach to purchasing care is feasible under current legal and regulatory authorities, but policy changes may be needed — and the practicality of such an approach depends on the contract and network design. For example, legal/regulatory changes in how contracts are established would be required to achieve any real savings to the government. There are also differences in the populations served by TRICARE (DoD health care) and VA, particularly in terms of age and geographic location. Implementation would be further complicated by contractual differences in the TPA contracts for VA and DoD as they relate to network standards, provider payments, network participation requirements, and reporting requirements and incentive structures. As a result, there are significant uncertainties with respect to increased efficiency or cost savings for the government.
Overview of DoD and VA Health Care
DoD and VA Use of Purchased Care and Overview of Existing Purchased Care Provider Networks
Legal and Regulatory Authorities Underlying an Integrated Approach to Purchased Care for DoD and VA
Barriers with Respect to Operational Execution of an Integrated Purchased Care Approach
Potential Impact on Patients and Providers
Potential Impact on Costs
Summary Observations and Recommendations