VA Awards Contracts Worth Up to $55 Billion for Private-Sector Care

An Air force veteran makes a visit to his doctor. (Image:
An Air force veteran makes a visit to his doctor. (Image:

The Department of Veterans Affairs has awarded the first of several regional contracts for its new Community Care Network that will replace various private-sector health care programs for veterans with VA health benefits.

The VA announced Dec. 28 that it awarded management contracts for three regions covering 36 states, plus Washington, D.C.; Puerto Rico; and the U.S. Virgin Islands, to Optum Public Sector Solutions Inc., a government-services arm of Optum, the health services arm of UnitedHealth Group.

The contracts, for Regions 1, 2 and 3, are for a base period of one year, starting Jan. 18, and seven renewable one-year options through 2026, worth a total of $55.2 billion, if all options are exercised.

The VA Mission Act, signed into law last June, stipulated that the VA consolidate its multiple private-sector care programs, including the VA Choice and Patient Centered Community Care programs, into a single, comprehensive community care system that will supplement the VA's own system of medical centers and clinics.

By law, the VA must have the framework for the new Community Care Network in place by June. The VA currently is ironing out rules regarding how and when veterans can get medical care in the private sector, paid for by the VA, rather than receive medical care at VA facilities.

According to the VA, the new private care management companies will be responsible for project management, establishing medical networks and overseeing them, handling referrals from the VA and managing claims, providing quality control and administering pharmacy benefits networks, as well as dental networks and other services.

VA spokesman Terrence Hayes said that, while current contracts provide primary care, inpatient and outpatient specialty care, third-party administration and other services, the new contractors will cover these areas and more, providing expanded health care services as well as medical management services, claims processing and audits, data analytics and exchange of health care information.

About 30 percent of VA medical appointments occur in the private sector. At a hearing on implementation of the VA Mission Act on Dec. 19, VA Secretary Robert Wilkie told lawmakers that the department is in the process of crafting eligibility and access standards to determine who can receive care in the private sector under the new program.

Lawmakers at that hearing, a joint meeting of the Senate and House Veterans Affairs Committees, expressed concern that the VA would go too far in allowing access to private care -- a move Democrats say would undermine VA health care and be a step toward privatizing the VA.

Republicans also said the VA's lack of transparency regarding rules and costs is a cause for concern.

VA officials said a contract award for Region 4, which covers most of the western states, is expected in April. Awards for Regions 5 and 6, which include Alaska and the Pacific territories, will be given by the end of the year.

Contractors are expected to have their networks up and running at two sites within 180 days of a contract award and be fully operational within a year of the award.

"These contract awards reflect our ongoing commitment to increasing veterans' access to care," Wilkie said in the release on Optum on Dec. 28. "As part of VA's modernization efforts, we designed the new network based on feedback from veterans and other stakeholders, along with lessons learned from the Veterans Choice Program. We are confident this new network will greatly improve customer service for veterans and timeliness of payments to community providers."

-- Patricia Kime can be reached at Follow her on Twitter @patriciakime.

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