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Regulations Keep Nursing Homes from Long-Term Care Contracts with VA

Department of Veterans Affairs

WASHINGTON -- World War II veteran Morton Kessler, 91, was forced to leave a skilled nursing facility in Missoula, Montana, less than two weeks after he moved into it.

The facility's owner, the Goodman Group, had dropped its contract with the Department of Veterans Affairs because of "extensive" regulations required in order to accept VA benefits, a company spokesman told the Missoulian newspaper in March 2015.

The family needed Kessler's VA benefits to pay for care, and in rural Montana, the options were limited.

"It ended up costing us time and money and a lot of stress -- on my family, but also on him," said Kessler's son, Jeff. "It really just seemed not right. We were hoping to have closure that wasn't fraught with logistical and financial issues."

The Kesslers found a place 30 miles away in Stevensville, Montana, and Kessler's wife, Roseann, drove from Missoula every day to visit him. He died four months after the move of complications from Alzheimer's.

Dana Halvorson, with the American Health Care Association, said the situation isn't unique among the 13,000 skilled care and assisted living facilities her organization represents. The VA has also acknowledged that veterans are losing support from long-term care providers who don't want to go through the red tape.

"We've had members that have dropped because of the contracting requirements over the years; that's why we've been fighting this," she said.

According to the Centers for Disease Control and Prevention, there were about 15,600 nursing homes in the United States in 2014. VA data shows that only 1,800 of them have contracts to accept VA benefits.

Nursing home care is not part of Veterans Choice, a $10 billion program to give veterans outside health care.

AHCA and VA leadership have spent years trying to simplify the way nursing homes work with the VA. They've proposed that long-term care providers enter into individual agreements with the department, rather than become federal contractors -- a designation that comes with regulations that Halvorson and long-term care providers said were complex and costly.

In 2015, VA Secretary Bob McDonald said long-term care was the VA's "top legislative priority for the year."

But they've faced challenges in making the change. Different versions of legislation addressing the issue have stalled, and civil rights organizations have fought the measure. They've said regulations that health care providers are trying to bypass are necessary to protect against workforce discrimination.

A fix from Congress?

In this brief, lame-duck congressional session, the issue finally has "momentum," Halvorson said.

"We've been fighting this for so long at this point, and this is the closest we've ever come," she said. "There's some tension on this."

Sen. John Hoeven, R-North Dakota, introduced legislation in spring 2015 that said long-term care facilities that want to work with the VA would not be treated as federal contractors. Instead, they would be subject to other requirements to ensure quality of care, he said.

He said about the current process: "It's not just additional reporting and inspections; they may even have to change their facilities and things like that. There's a whole set of regulations."

His provision ended up as part of a large veterans' reform bill, the Veterans First Act, which the Senate Committee on Veterans' Affairs passed unanimously in June. The measure would allow the VA secretary to enter into "veterans care agreements" for extended care.

Hoeven is hopeful the Veterans First Act will move before the end of the year, and McDonald and some veterans service organizations are advocating for a vote. But lawmakers have only a short session, and it's uncertain whether there will be time to consider the 400-page bill.

"If it doesn't happen, we'll absolutely take a look at the next Congress and continue to work with the VA to think of options," Halvorson said. "We're not going to give up now."

A similar measure was tacked onto a House bill earlier this year but was removed before the legislation passed in September.

Earlier that month, Human Rights Campaign, Leadership Conference on Civil and Human Rights, National Partnership for Women & Families and the National Women's Law Center came out against the idea. They said in written testimony that exempting the health care providers from federal contract regulations would "send a disturbing message."

They warned it would allow providers to ignore anti-discrimination protections, affirmative action rules and other requirements under the Department of Labor's Office of Federal Contract Compliance.

The change "represents a step backward from equal opportunity," the groups wrote.

Long fight

Three years ago, the VA tried to make the change without going through Congress. The department proposed a new federal rule to enter into agreements with extended care providers, including nursing facility care, geriatric evaluation, domiciliary services, adult day health care, respite care and hospice and home health care -- services needed as the veteran population continues to age.

At the time, Daniel Schoeps, the director of purchased long-term services for the VA, said he expected the change to lower administrative costs and increase the number of outside providers that work with the department.

One year later, when the executive branch hadn't made a decision, McDonald received a letter from 109 members of Congress who wanted to move forward.

"Veterans who need these extended care services deserve access to this critical care," the lawmakers wrote.

When the VA learned it would have to go through Congress, McDonald wrote a letter to leaders of the House and Senate in May 2015, along with a draft bill.

"Failure to address this issue will have an enormous negative impact on veterans' access to health care," he wrote.

Since then, the different legislation addressing the issue, including Hoeven's, has deviated from what McDonald proposed. In a written statement, the VA wrote that none of the bills fully accomplishes the goals the department requested.

President-elect Donald Trump is likely to soon appoint McDonald's replacement. As he finishes out his time in the position, McDonald has publicly called on Congress to "fulfill its responsibility," including with veterans' access to long-term care.

A November update to McDonald's "MyVA" initiative said: "Thus far, inaction on this issue has resulted in complications with extended-care providers and other non-Veterans Choice care. Some small long-term care facilities have already withdrawn their support of veterans due to the overwhelming administrative requirements."

Limited access to care

With only 1,800 extended-care facilities nationwide that contract with the VA, some veterans have had to be housed far from family.

"The problem you run into is, it limits where veterans can go and get care," Hoeven said. "It limits their ability to stay in their community and be close to family and friends."

In the Kesslers' case, the family was lucky, Jeff Kessler said. The home in Stevensville took good care of his father, he said, and his mother was able to visit every day. But it did eliminate his twice-weekly lunch visits with his father and limit his visits to weekends.

Michael Wemple, the administrator of The Living Centre in Stevensville -- where Morton Kessler was moved -- said five other veterans came to his facility the month the Goodman Group dropped its contract.

The Goodman Group owns several facilities in the area, and the company left a shortage of options for veterans in that part of western Montana when it dropped its VA contract, Wemple said. The Goodman Group declined to comment on whether they accept VA benefits.

Though he doesn't foresee dropping his facility's contract with the VA, Wemple does understand how others could get to that point, he said. He cited some issues he faces in working with the department, such as not receiving timely payments and not being reimbursed at a rate comparable with Medicaid.

"I don't want to put any facility down for their decisions," Wemple said. "We're a business, but at the same time if anybody deserves proper care, it's our veterans."

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