Location Based Payments for Community Care

Full Title:
To amend title 38, United States Code, to modify the rate of pay for care or services provided under the Community Care Program of the Department of Veterans Affairs based on the location at which such care or services were provided, and for other purposes.

Summary#

This bill would change how the Department of Veterans Affairs (VA) pays non-VA providers for care given to veterans under the Community Care Program. It would require the VA to set payment rates that differ by the physical location where care is provided (for example, inpatient hospital vs. physician office). It also requires a geographically specific provider-location identifier on claims and says the VA must pay the lowest applicable rate when more than one rate could apply.

  • Main change: Requires location-specific rates for payments to community providers for VA-covered care (inpatient hospital; on-campus outpatient hospital; off-campus outpatient hospital; ambulatory surgical center; physician office).
  • Claim data change: Requires a unique, geographically specific national provider identifier for the provider location on payment claims.
  • Payment rule: If more than one rate could apply to the same care, the VA must pay the lowest of those rates.
  • Timing: The changes would start on January 1, 2026.
  • What is unclear: The bill does not explain how the VA should set each location-specific rate, how these rates relate to current VA payment methods, or how existing contracts and state laws would be handled.

What it means for you#

  • Veterans

    • This does not change which services are covered. It could affect which community providers accept VA patients if payment rates to those providers change. The bill itself does not change veterans’ eligibility or benefits.

  • Community health providers (hospitals, surgical centers, physician offices)

    • Payments from VA for a visit or procedure could vary depending on the physical location where the care was given, not just on who bills or where the provider’s headquarters are.
    • Providers will need to include a geographically specific location identifier on VA claims. That may require changes to billing systems.
    • Some providers could receive lower payments if a lower location rate applies or if multiple rates apply and the VA chooses the lowest.

  • VA administrators and billing staff

    • VA systems and claims processing will need to handle location-specific rates and enforce the rule to pay the lowest applicable rate. That could require software, policy, and staff changes.

  • Taxpayers and the federal budget

    • The bill may change how much the VA pays overall for community care, but the direction and size of any change are not specified in the bill text.

Expenses#

No publicly available information.

  • The bill text does not include a fiscal estimate or cost breakdown.
  • Possible administrative costs (inferred): updating claims systems, training, and staffing to process location-specific identifiers and multiple rate rules.
  • Possible payment changes (inferred): overall VA spending on community care could go up or down depending on how the new location-specific rates compare with current payments. The bill does not state how rates will be set or whether any offsets are required.

Proponents' View#

  • The bill appears intended to make VA payments more specific to the place where care is delivered.
  • A possible argument for the bill is that location-specific rates could improve payment accuracy by recognizing that the same service can cost different amounts at a hospital outpatient department versus a physician office.
  • Requiring a geographically specific provider-location identifier could improve claims tracking and help the VA match payments to the actual site of care.

Opponents' View#

  • One concern is that paying the lowest applicable rate when multiple rates apply could lower payments to some providers and make them less willing to see VA patients, potentially reducing access.
  • The bill does not explain how the VA will set each location-specific rate, which raises questions about fairness and transparency.
  • Implementing location-specific rates and new location identifiers could increase administrative and IT costs for both providers and the VA.
  • It is unclear how the change would interact with existing contracts, state payment rules, or other VA payment policies; that uncertainty could complicate implementation.