Why Better Data Sharing Doesn’t Fix Claims Processing
By Mike Esworthy, Chief Strategy Officer, EnableComp
LinkedIn: Mike Esworthy
LinkedIn: EnableComp
Healthcare providers serving veterans face a growing paradox: While the VA has made tremendous strides in sharing health data through its interoperability initiatives, the financial and administrative challenges of VA claims processing remain largely unresolved. The result is a disconnect that threatens both provider sustainability and veteran care.
As healthcare leaders navigate this complex landscape, they must understand that interoperability alone won’t solve the revenue cycle challenges that continue to burden providers who treat veterans.
The Promise of VA Interoperability
The Department of Veterans Affairs has undertaken an ambitious journey toward true interoperability through the Federal Electronic Health Record Modernization (FEHRM) program. The VA aims to create a unified health record system that seamlessly follows service members from active duty through veteran status by adopting the same Oracle Cerner platform the Department of Defense uses.
The expanded Joint Health Information Exchange (HIE) now connects federal systems with over 2,000 hospitals, 8,800 pharmacies, and 33,000 clinics nationwide. This means that veterans’ clinical records can now more effectively move between VA, military, and civilian healthcare providers.
These improvements represent significant progress for veterans and their care providers. Clinicians can now access more comprehensive medical histories, reducing duplicate testing and improving continuity of care. This clinical data sharing has undoubtedly enhanced patient care coordination and expanded veterans’ access to community providers.
The Persistent Claims Processing Challenge
Despite these clinical data-sharing advances, financial and administrative hurdles in VA reimbursements remain a significant pain point for healthcare providers. A recent report by the Government Accountability Office (GAO) highlights the significant growth in both veteran healthcare volume and claims involving Community Care Network (CCN) providers, which is expected to continue with the current administration. According to the GAO, the number of veterans receiving care from community healthcare providers increased from approximately 1.1 million in 2014 to about 2.8 million in 2023. This surge is attributed to policy changes and legislative acts to expand veterans’ access to care. The report also notes that the cost of the Veterans Community Care Program (VCCP) dramatically increased from $14.8 billion in FY 2018 to $28.5 billion in FY 2023, with a projected 19% increase from FY 2023 to FY 2024. These rising costs are expected to continue, potentially impacting the VA’s budget and resource allocation.
This surge, driven partly by the PACT Act’s expansion of benefits for toxic exposure, caused the backlog of pending claims to swell to over 400,000 cases by early 2024 – the highest since 2014. While the VA has hired thousands of additional claims processors and is making progress on the backlog, ongoing uncertainty around the stability of staffing levels creates administrative challenges that have direct consequences for healthcare providers.
VA claims processing faces several persistent challenges that impact healthcare systems nationwide. VA claims fall outside the standard “80/20” processing model that hospitals are equipped to handle efficiently. Each claim requires deep subject matter expertise and specialized processes that many providers lack. Common issues lead to denials in roughly one out of every eight submissions. And unlike commercial insurance, VA claims often allow only one appeal level, creating significant pressure on providers to perfect their initial submission or risk permanent denial.
While interoperability has improved access to clinical data, the financial and administrative systems supporting claims adjudication haven’t kept pace. Many VA claims processes remain manual or run on dated software tools that haven’t been modernized.
The Technology and Expertise Gap
The VA itself has acknowledged these challenges, with leaders noting that “[Veterans] are struggling with 1950s-era procedures and a hodgepodge of dysfunctional IT systems.” Claims examiners spend too much time on menial tasks that could be automated, while complex decision-making that requires human judgment sometimes gets shortchanged.
For healthcare providers, this means investing in specialized technology solutions designed specifically for VA claims. However, technology alone isn’t the answer. Experience has consistently shown that specific human expertise in VA claims is an essential complement to any technological solutions. The rules vary state by state, payer by payer, and contract by contract, creating complexities that require human interpretation and experience.
The most effective approach combines purpose-built technology with deep subject matter expertise. Advanced AI, automation, and machine learning tools can help identify patterns and optimize workflows, but they must be guided by specialists who understand the nuances of VA claims processing. Ultimately, AI is a tool that is only useful if it’s used for the right job.
A Path Forward
For healthcare leaders grappling with these challenges, there are several critical steps to consider:
- Specialized Partnerships: Consider partnering with specialized service providers who bring both the technology and expertise needed to navigate complex VA claims. This allows organizations to focus on core operations while improving VA claims outcomes.
- Early Identification: Implement procedures to identify VA patients at registration, reducing the likelihood of incorrect commercial insurance submissions and subsequent denials.
- Staff Education: Provide targeted education to front-line staff about VA benefits and claims processes, helping them gather the right information from the start.
- Technology Investment: Evaluate the current technology stack for VA claims processing. Organizations relying on general-purpose systems designed for commercial claims may need specialized tools for VA reimbursement.
- Data Analysis: Use analytics to track VA claims performance, identifying common denial reasons and process breakdowns that can be systematically addressed.
As VA claims volume continues to surge and interoperability initiatives expand, healthcare providers face both opportunities and challenges. The clinical care improvements from better data sharing are undeniable, but they must be matched with equivalent advances in administrative and financial processes.
By addressing the disconnect between clinical interoperability and financial processes, the healthcare industry can ensure that veterans receive the care they deserve while healthcare providers receive timely and appropriate reimbursement. This balanced approach will be essential as we navigate the future of veteran healthcare in an increasingly complex landscape.