# The Effect of Reduction and Standardization of Reimbursements in the VA Fee-Basis Program: Impact on Quality of Care and Health Outcomes

> **NIH VA I01** · PROVIDENCE VA  MEDICAL CENTER · 2020 · —

## Abstract

Many Veterans enrolled in the VHA who require dialysis receive this service from non-VA dialysis
providers. Historically reimbursement to non-VA dialysis providers was highly variable, with payments up to
roughly 3-times the uniform Medicare reimbursement rate. In 2010 the VHA standardized and reduced dialysis
reimbursements to about 130 percent of the Medicare fee schedule in order to curb rising Fee Basis
expenditures for dialysis care. The VA further streamlined non-VA dialysis care payments in 2013 by issuing
national dialysis contracts to ensure a more efficient process of identifying and reimbursing dialysis providers
for Veterans. The new payment mechanism to non-VA dialysis providers was expected to reduce “fee dialysis”
expenditures by 50%, but the realized cost savings may not materialize if the payment policy adversely
impacts the quality of care provided to Veterans. There was little evidence to guide these efforts and now,
more than ever, rigorous evaluation is needed to understand how these payment models for outsourced
dialysis services changed the patterns of dialysis care delivery and to understand how policy changes may
have altered the quality of dialysis services to Veterans.
 Now, more than ever, rigorous evaluation is needed to: (1) understand how these payment models for
outsourced dialysis services affect the pattern of dialysis care delivery; (2) determine how changes in
purchasing policy affected Veterans' access to care and the quality of their experience; and (3) provide insight
about how the delivery of outsourced dialysis care for Veterans can be improved. This study will estimate the
impact of these policy changes on Veterans and to determine whether a geographically contingent, value
based model for purchasing dialysis services from non-VA vendors could improve the overall outcomes
experienced by Veterans requiring dialysis.
 In order to address the Aims of our proposal, we bring together a multi-site, multi-disciplinary research
team that is aptly suited to conduct this study. We employ a rich array of data sets from the VA, United States
Renal Data System, and Medicare that span a decade of patient care (2006-2015). In order to unravel the
causal effect of the policy on dialysis-related hospitalization and mortality, we estimate a difference-in-
difference model that compares the average pre-post policy differences in the outcomes between Veterans
that are undergoing dialysis in non-VA facilities (treatment group) and their counterparts that are undergoing
dialysis in VA-owned facilities (control group). Findings from this study will provide much needed evidence to
understand the extent to which VA's payment and purchasing policies for non-VA care have impacted the
quality of dialysis care and Veterans' outcomes. Furthermore, results will inform future policies and practices
for purchasing dialysis care as well as those governing implementation of the Veteran's Choice Act. By
informing the future direction of VA ...

## Key facts

- **NIH application ID:** 9757710
- **Project number:** 5I01HX002067-03
- **Recipient organization:** PROVIDENCE VA  MEDICAL CENTER
- **Principal Investigator:** Vincent Mor
- **Activity code:** I01 (R01, R21, SBIR, etc.)
- **Funding institute:** VA
- **Fiscal year:** 2020
- **Award amount:** —
- **Award type:** 5
- **Project period:** 2017-02-01 → 2020-01-31

## Primary source

NIH RePORTER: https://reporter.nih.gov/project-details/9757710

## Citation

> US National Institutes of Health, RePORTER application 9757710, The Effect of Reduction and Standardization of Reimbursements in the VA Fee-Basis Program: Impact on Quality of Care and Health Outcomes (5I01HX002067-03). Retrieved via AI Analytics 2026-05-22 from https://api.ai-analytics.org/grant/nih/9757710. Licensed CC0.

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