Colorado SpringsMilitaryNews

Veterans’ health care is in crisis. A Colorado Springs man has a complex solution.

Author: Stephanie Earls, The Gazette - April 8, 2018 - Updated: April 8, 2018

Jeffry Anderson, office manager, to the Colorado Dermatology Institute writes down the voicemails he received on April 4 in Colorado Springs. Jeffry and his son Dr. Reagan Anderson have been outspoken about the need for major reforms to the veterans health care system, and especially Vet Choice, whose third party administrator is suspected of skimming tens of millions of dollars from the VA while it failed to pay providers and effectively crippled the program on the ground. (Dougal Brownlie, The Gazette)

COLORADO SPRINGS — The veterans health care system is in crisis, and creating a model that works will take commitment and cooperation, said Colorado Springs dermatologist and retired Navy surgeon Dr. Reagan Anderson.

“The answer is complex and the answer needs to be an amalgam of public and private,” he said. “It needs to be comprehensive and it can’t be partisan. If partisan gets in the middle, someone’s going to make some silly bill that only addresses one part of this.”

Partisan forces have helped redefine the country’s bureaucratic and policy landscape over the last 15 months, but according to former Veterans Affairs Secretary David Shulkin, they also made it impossible for him to do his job.

In a New York Times op-ed published the day after he was fired last month by President Trump, Shulkin sketched a disturbing portrait of an agency rendered divided and dysfunctional over pressure to privatize the government’s second-largest Cabinet department.

“I have fought to stand up for this great department and all that it embodies. In recent months, though, the environment in Washington has turned so toxic, chaotic, disrespectful and subversive that it became impossible for me to accomplish the important work that our veterans need and deserve,” he wrote.

The ex-VA secretary’s termination-by-tweet came after a watchdog report revealed the lavish upgrades and perks he and his wife enjoyed while traveling on the public dime. Shulkin, however, attributes his ouster more to power players at the Department of Veterans Affairs that saw him as a vocal opponent and “obstacle to privatization who had to be removed.”

As Washington weathers yet another top transition amid a philosophical battle over who gets to care for America’s veterans, America’s veterans are fighting a real one, at home, for the benefits they were guaranteed when they laid their lives on the line.


Unraveling the red tape
The programs established to provide care to veterans as a benefit of their military service are great in concept, but as concepts concede to reality they can become wrapped in enigma, rolled in red tape.

To attempt to decipher is to be frustrated.

More than 9 million veterans access free and low-cost health care through the Department of Veterans Affairs’ Veterans Health Administration, at more than 1,200 VA medical centers and outpatient sites and – for almost four years, under the Vet Choice Act – in the offices of private practice providers in the community.

The Department of Defense also has a health care plan open to qualifying veterans, Tricare, that operates like traditional private health insurance, with deductibles, copays, family plans and options for preferred provider or HMO-style coverage, where enrollees choose a primary care doc and must get referrals and authorizations for all specialty care. About 9.4 million active-duty service members, retirees and their families worldwide are covered by Tricare, including about 247,000 beneficiaries in Colorado, roughly 60 percent of whom are military retirees and their family members.

Both the Department of Veterans Affairs and the Department of Defense delegate management of the health care plans and programs they run in the civilian world to for-profit companies that compete in bidding wars for the multibillion-dollar contracts.

When the partnership works, it works comparatively well. When it doesn’t, the questions that arise feel like ones that should have been asked at the get-go.

“Basically what you have is a huge, unresponsive, unaccountable bureaucracy that’s laying down regulations and then contractors that are implementing the regulations who are incentivised to save money and not incentivised to provide service. It should be the reverse,” said Air Force veteran Jeffry Anderson, Dr. Reagan Anderson’s father and practice manager at Colorado Dermatology Institute. “You have a very toxic brew that results in a veteran not being treated or not getting treated in time.”


Major failings at public VA
In his New York Times op-ed, Shulkin argues that the private sector is ill-equipped to deal with the medical and psychological needs of the nation’s growing veteran population, many of whom are returning from active combat with acute physical and psychological treatment needs.

But the VA, too, has been rocked by recent scandals that revealed major failings in its mandate to care for vets, both nationwide and in the Springs, where a 2016 report by the agency’s Office of Inspector General found that within two years of its grand opening, the new Floyd K. Lindstrom outpatient clinic – the only site providing such services in a city with one of the nation’s highest veteran concentrations – was routinely subjecting patients to wait times in excess of 30 days, often significantly longer. In a number of cases, patient records had been falsified to cover up that fact.

Congress passed the Veterans Access, Choice and Accountability Act – aka Vet or VA Choice – in late 2014 specifically to address such backlogs at its hospitals and clinics. The program, operated to date on slightly more than $14 billion and extended, with an additional $1.9 billion, into the next fiscal year, allows veterans facing long waits or excessive travel to VA appointments to access copay-free services from community providers who are close by and can see them more quickly.

After a few rocky months, the hastily drafted, sweeping and first-of-its-kind initiative seemed to hit its groove. Forces conspired to make that a brief respite.

Among the list of troubling findings in the 2016 watchdog report on Lindstrom was that only a fraction of the veterans eligible for Vet Choice were receiving timely referrals from VA. The report seemed to cue a sea change. By the end of 2016, the community provider base had been greatly expanded and the volume of Vet Choice patients being treated had reached a point that Health Net Federal Services – one of two companies contracted to administer the Vet Choice program nationwide for VA – was running months’ behind in processing claims, approving authorizations and paying providers.

It got better for a few months before getting worse, and staying there.


Spending half-days on hold
Colorado Springs psychologist Michael Sunich signed on as a Vet Choice provider in July 2016, after getting a call from the VA asking if he’d see a patient under the new, federally funded program. He said he saw it as an ideal opportunity to give back to the veteran community while helping build his fledgling private practice.

“There was a delay in getting payments at first, but I figured that was because I was the new guy,” said Sunich, who estimates he’s owed around $20,000 for unreimbursed claims dating back to late 2017. “I didn’t realize then that was pretty much what it was going to be like — a constant fight — from there on.”

Karen Lee, owner of the Springs’ Ponderosa Medical Billing Service, had to dedicate a member of her staff to the job of shepherding Vet Choice claims through their series of systemic stalls.

“Whenever you call, it’s half a day or longer on hold until you get someone and more than likely the problem still doesn’t get resolved and you’re back on the phone doing the whole thing again,” said Lee, whose company serves 11 private sector mental health care providers who, by late February, were owed more than $70,000 for unresolved Vet Choice claims.

As the situation dragged deeper into 2017, the pool of doctors, therapists and counselors on which the program relies began to dry up as more community providers chose to drop out, limit their Vet Choice patient loads, or avoid the program altogether.

Many of those still hanging on do so with a loose grip.

“It happens all over, but our problems with VA Choice have gotten to the point that our administrator is actually considering not accepting the program any longer,” said Christine Caywood, business office manager at Audubon Ambulatory Surgery Center. “We have written off tens of thousands of dollars in procedures, billings and claims. We still have $50,000 to $100,000 in claims that we may possibly have to write off. We’ve got claims we’ve filed five times and they tell us they have no record of it. It’s so incredibly frustrating, and I really feel for the patients.”

With the provider exodus, patients who qualify for the program are finding it more difficult to make Vet Choice appointments, and when they do, wait times can rival those they faced at the VA.

“I wait months for an appointment, see someone for a month, and then I’m dropped because they’re not getting paid,” said Scott Quaife, a 35-year-old Army veteran who lives in Monument.

The father of two narrowly survived a mortar round attack while serving in Iraq, and now suffers from PTSD, traumatic brain injury and physical and psychological issues so severe his wife serves as his full-time caregiver.

“I really need to see a therapist, but I’m done with Vet Choice. I’m done with this dog and pony show,” he said.


Tens of millions in overpayment
An audit by the VA’s internal watchdog last year found that Health Net Federal Services and the other regional contractor that processes Vet Choice reimbursements to civilian providers, TriWest Healthcare Alliance, had collected around $39 million they shouldn’t have due to payment errors in approximately 224,000 of 2 million individual claims processed between the program’s start date in November 2014 and Sept. 30, 2016.

The results of a second audit focusing on an error-prone “bulk payment” processing method the companies instituted in 2016, to help speed things up when business mushroomed, are expected in May. Preliminary findings from that audit, however, estimated overpayments collected by Health Net totaled “at least” $50 million, an amount the company could be on the hook to repay.

Remember: This public facing entity is privately held. Health Net Federal Services, LLC is a wholly owned subsidiary of the Centene Corp., a large, publicly traded company that – since 2014 – has seen stock prices rise from around $30 to $107 a share.

For Dr. Reagan Anderson, the possibility that financial misdeeds at the top sabotaged a life-saving program on the ground is beyond shameful, and potentially criminal.

“You have a patriotic duty and a commitment to see these people . but it shouldn’t be a commitment to possibly go bankrupt and have to close your doors,” said Anderson. “These should be our honored members of our society who have sacrificed and now it’s our turn to take care of them.”

Aside from the issues with payments and communication, getting authorization from Vet Choice for critical procedures, such as a biopsy of a possible melanoma, shouldn’t be the struggle that it invariably is.

“This is something that’s medically necessary for life, but it’s not unusual for us to spend 8 to 10 hours of one of my staff’s time to trying to get the VA to pay for something they must pay for,” he said.

Jeffry Anderson recalled one odyssey in the quest for authorization to treat a veteran that resulted in an insightful conference call.

“We are trying to talk to Health Net to get authorization, the VA Choice rep in Denver is trying to help us get authorization, and Health Net is refusing to talk and being very, very rude, transferring us around and around and finally saying ‘We’d really like the VA Choice rep to get off the phone so we can just talk to you,'” he said.

The Vet Choice representative refused, and ultimately the authorization was approved.

“That’s the kind of blatant disregard for patient care and the worst example of inefficient, uncaring bureaucracy,” he said. “The system is very, very badly broken.”


New management
Fundamental changes to that broken system are on the horizon, though.

In an unexpected message to providers late last month, VA announced it would be assuming Health Net’s duties managing Vet Choice in the 37-state Eastern region – of which Colorado, oddly, is a part – when its contract with the company expires Sept. 30. The contract with TriWest Healthcare Alliance, to administer Vet Choice for the rest of the country, is unaffected.

The letter didn’t mention damning audits or red flags, only an agreement that “has run its normal course.”

Seems today’s decimated Vet Choice is a much more manageable beast for the agency whose shortcomings led lawmakers to draft the bill creating Vet Choice in the first place.

“VA has observed a decreasing volume of care, claims and payment activity being performed by Health Net over the past year,” said the VA in an emailed response to questions from The Gazette. The agency said it’s been laying groundwork for the transition over the past 12 months by expanding its base of Choice Program Provider Agreements, so more community health professionals and private practices already are dealing directly with VA for patient authorizations, claims and payment.

The VA is in the “solicitation process” for a new third-party administrator, but until that’s complete, it expects its own medical facilities will “easily” be able to take over and handle the Vet Choice activities previously managed, or not, by Health Net.

“This will have no impact on Veterans’ care, as VA will be assuming the work currently performed by Health Net,” the agency promised.

The fact that the program will now be managed by the very agency it was created to fix, at such a politically charged moment, is cause for pause. Even so, Michael Sunich said he’s optimistic. Several of his patients have shared positive feedback about their recent Vet Choice dealings directly with the VA.

There are other undeniable upsides, as well.

“Not having to deal with Health Net anymore? That day can’t come soon enough,” Sunich said.

For many of the region’s healthcare providers who want to continue treating veterans, however, turning their backs on Health Net Federal Services isn’t an option.

Despite the troubling federal report and ongoing audit, last year the Department of Defense awarded Health Net its contract administering Tricare benefits for the approximately 3 million program participants in the western region. (Yes, for Tricare purposes, Colorado is in the Western region.)

In a response to questions from The Gazette, the Defense Health Agency said it was aware of the issues that had emerged in the inspector general’s report, but considered Health Net Federal Services’ performance managing the Vet Choice program as well as “a number of other contracts” before awarding it the $18 billion, five-year regional Tricare contract last year.

It seems the DHA cut Health Net some slack due to a “contract structure” with the VA that was “relatively new” and contained many “contract functions had not yet matured at the time the DHA conducted its proposal evaluation.”

Health Net recoups most of its administrative costs managing Tricare through a “per member, per month contract line item,” but DHA said its contract with the company prevents it from disclosing precisely what those rates and costs are.


Health Net problems persist
Health Net’s Jan. 1 takeover of Tricare in the Western region cued a series of systemic problems familiar to those who’ve dealt with Vet Choice.

“Since Health Net took over, we had a bit of a rough go of it and that rough go of it started with contracting, just simply getting a contract to see a patient and it carried on to getting prior authorizations and referrals,” said Dr. Reagan Anderson.

It continued to complaints of epic call wait times, and missing and delayed payments.

A year ago, when United Healthcare still held the Tricare contract, Colorado Dermatology Clinic would get “between 10 and 20 new referrals a day,” Reagan Anderson said.

By early March, two months into the new Health Net regime, the number of Tricare referrals had dwindled to one a week.

“That really speaks to people not even being able to get referrals to see a specialist,” he said.

When problems began to emerge earlier this year, Reagan and Jeffry Anderson took their concerns to U.S. Rep. Doug Lamborn. Soon after, the Defense Health Agency announced it would temporarily waive the usual referral and authorization requirements while Health Net gets up to speed.

After a last minute two-week extension, that waiver for network providers is set to expire April 15.

“Since that waiver has happened, we have been able to do our job and get paid for it, but what happens when they expire? Am I going to look at you and say, I’ll do the procedure for free, because I don’t want you to die, or I’ll do it but you’re going to have to pay the pathologist out of your own pocket,” Dr. Anderson said. “What they’re doing is the game of medicine and insurance; they’re trying to limit care as much as possible so they don’t have to pay for things. And that’s what my fear is going to happen after the waivers expire.”

Erin Prater

Erin Prater is Colorado Politics' digital editor. She is a multimedia journalist with 15 years of experience writing, editing and designing for newspapers, magazines, websites and publishing houses. Her previous positions include military reporter at The Gazette, general assignment reporter at The Huerfano County (Colo.) World, copy editor at David C. Cook publishing house and adjunct mass communication instructor at Pueblo Community College. Her bylines include The New York Times Upfront, The Argus Leader (Sioux Falls, S.D.), Military Spouse magazine and Omaha Magazine (Omaha, Neb.). Her syndicated bylines include The Denver Post,, and wire services.