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Tuesday, April 9, 2013

Health Care for Rural Veterans: The Example of Federally Qualified Health Centers

Elayne J. Heisler
Analyst in Health Services

Sidath Viranga Panangala
Specialist in Veterans Policy

Erin Bagalman
Analyst in Health Policy

The Department of Veterans Affairs (VA) is statutorily required to provide VA-enrolled veterans with access to timely and quality medical care. It does so through the nation’s largest integrated health care delivery system. Despite the existence of this system, Congress remains concerned that veterans, in particular rural veterans, may not be able to access VA health services. Among veterans enrolled in VA health care, 41% reside in rural or highly rural areas. Compared to urban veterans, rural veterans have higher prevalence of physical illness, lower health-related quality of life, and greater health care needs. Congress has demonstrated continuing interest in modifying VA delivery of care to expand access for rural veterans. Such interest has been demonstrated through report language, statutory mandates, appropriation of funds, and authorization of demonstration projects. In particular, Congress has encouraged the VA to collaborate with federally qualified health centers (FQHCs)—facilities that receive federal grants and are required to be located in areas where there are few providers, particularly rural areas.

The VA is generally a provider—rather than a financer—of health care services; however, the VA has statutory authority to reimburse non-VA providers for services that are not readily available within the VA’s integrated health care delivery system. VA facilities may consider contracting with outside providers to provide services to rural veterans. One type of facility that the VA has contracted with in the past are FQHCs. Although FQHCs are one type of facility that the VA can collaborate with, FQHCs may be candidates for VA collaboration because, as a condition of receiving a federal grant, they must meet certain requirements that include providing specific types of services, maintaining certain records, and meeting certain quality standards. These requirements, and the leverage that the federal government may have as a funding source, may facilitate VA-FQHC collaboration to provide care to veterans in rural areas.

The report discusses four scenarios under which an FQHC might provide health care services to veterans: (1) without reimbursement from the VA, (2) under the VA’s fee basis care program, (3) under a contract for specific services, or (4) as a contractor-operated community-based outpatient clinic (a type of outpatient VA facility). Each of these scenarios is discussed because the scenario used for collaboration affects the considerations that may arise.

Some considerations that may arise during attempts to increase VA-FQHC collaboration include the costs of care to an FQHC, the VA, and veterans; the capacity of an FQHC to serve veterans in addition to its existing patients; and the compatibility of the VA and an FQHC in terms of the services available, quality initiatives, accreditation, and use of electronic health records.

To address these considerations and encourage VA-FQHC collaboration, there are a number of policy levers that Congress might use. These include oversight, an incentive fund, directed spending, statutory mandates, and watchful waiting. Congress may also consider a combination of these levers.

This report discusses considerations that may arise during possible attempts to increase VAFQHC collaboration, and describes policy levers Congress might use to encourage VA-FQHC collaboration. These approaches might also be employed to encourage collaboration between the VA and other types of facilities that may serve rural veterans.

Date of Report: April 3, 2013
Number of Pages: 30
Order Number: R43029
Price: $29.95

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