Payer Relations—Frequently Asked Questions
For the purposes of VA health benefits and services, a person who served in the active military service for at least 24 months and who was discharged or released under conditions other than dishonorable is considered a Veteran. VA operates an annual enrollment system that helps to manage the provision of healthcare. VA applies a variety of factors during the application verification process when determining a Veteran’s eligibility for enrollment, but once a Veteran is enrolled, that Veteran remains enrolled in the VA healthcare system and maintains access to certain VA health benefits. Insurance is only billed for Veterans with nonservice-connected conditions and through commercial insurance.
Healthcare is provided at no cost to the Veteran, although the Veteran may be responsible for a copayment. VA funding for the care and treatment provided to Veterans is primarily through congressional appropriations. However, care and treatment for Veterans with nonservice-connected conditions is offset through collections from private insurance companies, typically referred to as third party payer collections. 38 USC 1729, Title 38, United States Code (USC) is VA’s authority to seek reimbursement from third party insurance carriers, including Medigap and other Medicare supplemental insurances. More information about why VA bills private health insurance is available on VA’s health benefits website.
38 C.F.R 17.101 stipulates the basic methodology by which VA bills third party insurance carriers. In order to generate a charge for medical services, VA establishes reasonable charges for five categories of charges:
- Inpatient facility
- Skilled nursing facility (SNF)/sub-acute inpatient facility
- Outpatient facility
- Nonphysician providers
Reasonable charges are developed nationally and then adjusted locally by each VA medical center based on their Geographical Area Adjustment Factor (GAAF). Billing for inpatient facilities and skilled nursing facilities are on a per diem basis. For inpatient facility charges, the per diem charges vary by the treated condition as classified by Medicare Severity Diagnosis Related Groups (MS-DRG) codes. Billing for outpatient facility and provider charges vary by procedure performed as classified by current procedural terminology (CPT) codes and Healthcare Common Procedure Coding System (HCPCS) level II codes. Data for calculating actual charge amounts are published in a notice within the Federal Register or can be viewed on the VHA OCC website.
VA will bill using its most recent published or posted charge based on the date of service for the treatment provided.
A national contract or agreement between VA and a TPP outlines VA’s provider network and the medical services expected to be covered.
VA’s provider network, administered by the Veterans Health Administration (VHA), includes:
- Veteran Affairs Medical Centers (VAMCs)
- Physicians/providers (employed)
- Outpatient clinics
- All states and territories
Medical services expected to be covered include:
- Durable Medical Equipment (DME)
- Home Health
- Mental Health
- Skilled Nursing Facility (SNF)
- Substance Abuse
- Transplant Services
The contractual relationship between VA and third party payers applies to eligible Veterans for nonservice-connected conditions only.
VA suggests that health insurance companies use VA tax ID numbers to generate internal reports on past VA service utilization to estimate probable volume and utilization of services by Veterans.
Yes, VA can provide third party payers with a sample template that identifies key provisions related to VA operations and federal payment requirements that must be included in any agreement between VA and the third party payer. Contact the CPAC Program Management Office (PMO), Payer Relations Office to request more information.
VA provides internal communication to private health insurance companies for billing, operations, and collection purposes only. It is not the intent of VA to communicate and market the relationship to solicit business.
VA’s Regional Counsel has the authority to establish a one-time agreement.