Originally published VA, DoD expand shared health care efforts but struggle to measure their impact on by https://federalnewsnetwork.com/defense-main/2025/07/va-dod-expand-shared-health-care-efforts-but-struggle-to-measure-their-impact/ at Federal News Network
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The Department of Veterans Affairs and the Defense Department have increased the use of health care sharing agreements over the years, expanding access to care for veterans while reducing costs for the federal government. But long-standing implementation challenges of those agreements still persist — and neither agency has a process for evaluating how well the agreements are working.
As of April 2025, there were 185 active sharing agreements in place, a 14% increase from 162 agreements in 2022. The agreements allow the two agencies to share facilities, medical staff and administrative personnel, and provide non-medical services like training or even laundry services.
The Government Accountability Office (GAO), which recently completed a yearlong review of these agreements, found that while VA and DoD collect basic data — such as the number and types of agreements and VA patient referrals to DoD facilities — the agencies fail to assess the effectiveness of these agreements and identify opportunities for new or expanded sharing agreements.
“One key area where this would be important is in cost avoidance. We are all interested in saving taxpayer dollars, and with these agreements, there can be great opportunities for cost employment avoidance,” Alyssa Hundrup, Government Accountability Office’s health care director, told Federal News Network.
One example of cost savings from VA–DoD health care sharing agreements is the reimbursement rate. When the VA refers a veteran to a Defense Department medical facility, it reimburses DoD at a 20% discounted rate.
“That’s 20% lower than they would pay in the community, which is based on a Medicare rate. There are real cost-avoidance measures that they could be tracking to understand the types of cost avoidance, the types of cost savings, and then to see where they could apply that in other agreements, in other areas, in other ways, and set targets and goals and measure against that,” Hundrup said.
“They had explained to us that just the existence of the agreement demonstrated that it was of value, which we don’t dispute. But I think there’s more about the agreement and about how well it’s working that could really take a data-informed approach and help not only the agreements that are in place, but could help inform whether there are agreements that could be enhanced, changed, expanded, since we know that the different agreements have different levels and where there are opportunities maybe at other facilities where they could initiate and think about new agreements or new opportunities,” she added.
The types of services covered under the agreements vary widely. About a quarter of the 185 agreements are basic arrangements between VA and DoD facilities that intermittently share services, such as referring patients for specialized care.
Level two and level three agreements involve regular collaboration, including shared services, and in some cases, shared staff. About 30% of agreements involve embedded personnel, where VA or DoD clinicians or administrative staff work directly at the other agency’s facility. Less than 1% of agreements represent fully integrated healthcare operations.
In 2012, the watchdog identified some of the main barriers to implementing these shared agreements — and many of them haven’t changed much in over a decade.
Accessing military bases, for instance, continues to be a challenge for veterans.
“That is just the nature of the protections and the approvals that one must get in order to get on to a military base and have the right access. That is a constant challenge that DoD was aware of, and we continue to see steps that they’re taking, especially at individual bases, to ensure that veterans have access to that,” Hundrup said.
Another long-standing issue is incompatible health data systems. While the DoD has transitioned to MHS Genesis, its new electronic health record system, the VA is still working toward full implementation. As a result, clinicians often face duplicative work and navigate fragmented patient records. And while some workarounds exist, this lack of interoperability will remain a barrier to making sharing agreements more effective.
Billing practices have also been an issue. At one point, the VA had a backlog of more than $87 million in unpaid claims to DoD facilities from fiscal 2018 through 2022. The backlog was cleared in 2024, but the agencies still face administrative hurdles.
One emerging area of concern is developing non-reimbursable agreements, or arrangements to share health care resources instead of billing each other.
“These are really important, because there may be some services where doing the reimbursable or the dollar amount may just not make the most sense, or it may be easier. For example, DoD may have specialized equipment, and VA may have the technician available. Costing it out and figuring out the dollars, it may just be more efficient and more useful to have a non-reimbursable agreement, and this is where it’s services in kind,” Hundrup said.
The Defense Department, however, limited the use of these agreements following concerns in 2020 that some of the non-reimbursable agreements were not mutually beneficial. The watchdog recommended that DoD finalize guidance on when and how to pursue non-reimbursable agreements. The DoD agreed with the recommendation but did not provide a timeline for issuing new procedures.
Identifying new opportunities for sharing also remains a challenge. While some national-level coordination exists — including a Joint Executive Committee and a Capital Asset Planning Committee for facility construction — most new agreements are still initiated at the local level.
“This is a real opportunity to both increase access to health care at a time when access is so important, and to get additional opportunities for whether it’s service members or veterans or beneficiaries to increase the access to care as well as save money. It’s such a unique opportunity. I think when you have both at the same time, it’s just a real opportunity for the government to ensure that they’re providing the necessary health care to our veterans and service members and save the taxpayer dollars,” Hundrup said.
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Originally published VA, DoD expand shared health care efforts but struggle to measure their impact on by https://federalnewsnetwork.com/defense-main/2025/07/va-dod-expand-shared-health-care-efforts-but-struggle-to-measure-their-impact/ at Federal News Network
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