EM Sharing Agreements - VHA Diagnostic Electron Microscopy Program
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VHA Diagnostic Electron Microscopy Program


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EM Sharing Agreements


Enhanced Health Care Resources Sharing Authority


The VHA goal of "30, 20, 10", urges medical centers to earn 10% of their annual operating budget. For laboratories, one way is doing tests for DoD and/or the private sector in addition to their own workload. A few months ago we mailed to each EM Program a packet containing information on the enhanced health care resources sharing authority. Also included were attachments explaining the costing methodology to be used according to VHA Directives. Included with the mailing of this Newsletter is a copy of a change made to the VHA Handbook, #1660.1 titled "VA-DOD HEALTH CARE RESOURCES SHARING" signed by Under Secretary for Health, Kenneth Kizer, M.D., M.P.H. in July 1997. Please share this information with your P&LMS administrative staff if they are not yet aware of these changes.

New provisions of "The Veterans Health Care Eligibility Reform Act of 1996" or Public Law 104-262 significantly expand the VA health care resources sharing authority in current regulations (Title 38 U.S.C. sections 8151-8153).

These Provisions include eliminating some existing barriers and disincentives to the sharing of health care resources with non-VA entities.

The types of resources that can be shared and who qualifies as a sharing partner, are expanded with this new directive.

VA will publish regulations establishing simplified competitive procurement procedures applicable to sharing contracts as permitted under the provisions of the Reform Act of 1996.

The statue expands the opportunity for VA health care facilities to sell services and generate revenue, thereby maintaining and expanding services to veterans. One effect of such measures could be the preservation of jobs that otherwise would have to be eliminated to meet budget reductions and cost efficiency targets.

Under this authority "health care providers" with whom VHA may enter into sharing contracts include health care plans and insurers, and any organization, institution or other entity or individual who furnishes health care resources.

The term "health care resources" includes hospital and ambulatory care, mental health services, medical and surgical services, exams, treatments, rehab services and appliances, preventive health care, prosthetics and other services and supplies.

The term also includes any health care support services (e.g. biomedical equipment repair) and administrative services, as well as use of medical equipment or space.

  • VA may enter into non-competitive sharing contracts with affiliated health professional schools, practice groups and other entities associated with an affiliate (e.g., another hospital which has a residency training program with the VA affiliate), blood banks, organ banks, and research centers for health care resources consisting of commercial services. The term "commercial services" includes medical or professional services as well as other services. For these non-competitive contracts a simple justification, citing the use of the sharing authority established in the Reform act and stating that the sharing partner meets the criteria is required.
  • Sharing authority may be used to provide or "sell" health care resources to any eligible sharing partner. Contracts to provide or sell health care resources to other than eligible veterans may only be executed if specific determination is made (1) that veterans will receive priority for the services provided and (2) the agreement is either necessary to maintain an acceptable level and quality of service to veterans, or will result in the improvement of services to eligible veterans. Certification that these conditions have been met are required by either the VISN or the medical center director. Proceeds from providing or selling services are credited to the appropriate medical appropriation at the facility providing the service.
  • Threshold limits will also be changed so that "competitive" sharing agreement contracts which are less than $100,000 can be approved locally with written justification by a "simplified" contracting procedure (this is kept at the local level as long as a higher contracting approving official at the local site approves the contract). An important point in this threshold level is that it is the NET total flow of dollars which cannot exceed the limit, i.e., as long the shared services dollar net "flow" does not exceed the threshold limit.
  • Sole source contract of less than $100,000 with an affiliate do not require justification under the simplified contract procedures. (previous limit - $50,000).
  • Simplified contracting procedures with appropriate justifications may be used for "commercial services" contracts for up to 5 million dollars with affiliates which provide or sell health care resources.

Examples of innovative programs at VAMC’s include: One VAMC is renting space on its roof for a commercial microwave tower. Another VAMC is renting or leasing one entire ward to its affiliate, who uses this ward for its own patients.

In other words, the old barriers to more efficient and productive use of our EM laboratories have now been removed. We strongly encourage each of you to be creative and to take advantage of these new regulations.

To facilitate VAMC and VISN implementation of the enhanced sharing authority a "Rapid Response Team" has been established to assist Contracting Officers and Program Officials with application of this new authority.

Katherine Galos, Office of A&MM (202) 273-8823, Phil Kauffman, Office of General Council (202) 273-8622, Karen Walters, Medical Sharing Office (202) 273-8404.