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Department of Veterans Affairs Releases Revised Draft Reimbursement Agreement

The Department of Veterans Affairs (VA) recently released a revised draft Reimbursement Agreement between the VA and Tribal Health Programs (THPs) in the lower 48. The Lower 48 Reimbursement Agreement (Agreement) is critical, as it will establish the basic underlying terms for reimbursement from the VA to the THPs for care provided to American Indian and Alaska Native (AI/AN) Veterans at Tribally operated facilities. This most recent version reflects the collaborative efforts between the VA, the Indian Health Service (IHS), and Tribes to ensure that the federal government honors its trust responsibility and that all eligible AI/AN veterans receive the care owed and promised to them. 

The draft Agreement is one of three agreements between the VA, the Indian Health Service, and Tribally operated health programs. Recently, the VA and the IHS finalized a separate agreement between the two agencies to reimburse the IHS for care provided to AI/AN veterans at IHS facilities. A third agreement is being negotiated and will update an existing reimbursement agreement between the VA and THPs operating in Alaska.

The progress made in this most recent draft of the Lower 48 Reimbursement Agreement reflects over two years of collaboration and feedback gathered by the VA during several listening sessions, engagements with Tribal leaders and Indian Organizations, and meetings with the IHS. Last June, NIHB attended one of those listening sessions hosted by the VA at the 2023 Tribal Self-Governance Conference in Tulsa, OK. At that conference and in our formal written comments, NIHB made several recommendations that the VA addressed in this version. For example, telemedicine, home health services, and durable medical equipment (prosthetics) are all included as reimbursable services at the IHS all-inclusive rate (AIR), which is also referred to as the Office of Management and Budget (OMB) rate. The section describing preauthorization requirements for prescription drugs was taken out at the suggestion of NIHB. For the first time, purchased/referred care will be reimbursed at the actual cost paid by the THP. The most recent draft also addressed NIHB’s concerns regarding preauthorization requirements for pharmacy prescriptions. This most recent draft has no preauthorization requirements, allowing THPs greater authority to provide adequate care. Additionally, the VA confirmed that it would host a formal consultation on the Reimbursement Agreement before it finalizes it, something NIHB also recommended in our previous comments.

This version of the draft Agreement is not final, and there are many more issues that NIHB believes should be addressed before the VA issues a final lower 48 Reimbursement Agreement. Several changes must be made to ensure that AI/AN veterans receive the pharmacy benefits they deserve. Previously, NIHB expressed concerns over the draft Agreement’s reimbursement rate for outpatient pharmacy services. All pharmacy prescriptions must be reimbursed at the AIR rate. Many state-operated Medicaid programs use this reimbursement rate, and utilizing this rate will help create consistency for pharmacy billings.

Additionally, NIHB still has concerns over the VA’s use of paper claims for pharmacy reimbursement from the VA to THPs. The added difficulty of processing and recording accurate payments based on paper invoices will delay payment from the VA to IHS. While the VA’s transition from paper to electronic billing for pharmacy benefits may lay outside of the Reimbursement Agreement’s scope, NIHB addressed this this in our formal comments which were filed March 21, 2024. NIHB will continue to engage with the VA collaboratively as the agency continues to incorporate changes to the draft agreement.

If you have any questions on this issue, please contact Garrett Lankford at [email protected] or (202) 996-4302.

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