On August 7, 2014, President Obama signed into law the Veterans Access, Choice, and Accountability Act of 2014 (Public Law 112-146).  Section 101 of the Act requires the U.S. Department of Veterans Affairs (VA) to implement the Veteran’s Choice Program (Choice Program).  The Choice Program intends to improve veterans’ access to health care by allowing certain Veterans to use health care providers outside of the VA system (non-VA care).

Non-VA care is crucial to veterans. In 2014, the VA obligated almost seven billion dollars to non-VA care for veterans. The Choice Program provides an additional ten billion dollars for non-VA care to eligible veterans, which must be spent by August 7, 2017. The Choice Program intends to supplement the Patient-Centered Community Care (PC3) program, which historically is the VA’s method for purchasing non-VA care. PC3 is a nationwide program that provides veterans with access to non-VA care when the nearest VA medical facility lacks a specialist, is geographically inaccessible, or has long wait times for appointments.  The program builds on PC3 by covering more services and allowing veterans more choices when selecting a non-VA provider. The Choice Program will utilize the same third- party administrators (TPAs) as the PC3 program—Health Net Federal and TriWest Healthcare Alliance.

The Choice Program allows eligible veterans to choose non-VA care for a period of up to three years if the veteran lives more than 40 miles from a VA facility, faces significant difficulties travelling to a VA facility, or experiences wait times that exceed 30 days. The Act did not define the way the VA was to calculate the distance from VA facilities to veterans’ residences.  As supported by the legislative history, the VA used a straight-line method for determining the distance between the two locations rather than following the actual driving path. The U.S. Senate Committee on Veterans’ Affairs (Committee) held a hearing on March 24, 2015 centered on the implementation of the Choice Program that criticized the way the VA implemented the so-called “40-mile rule.”  Deputy Secretary Sloan D. Gibson defended the VA’s implementation of the 40-mile rule citing directly from the Committee’s Conference Report on the Act. However, on April 24, 2015, the VA released new regulations using driving distance as the methodology for determining the distance between two locations under the Choice Program.  This change will likely expand eligibility for the Choice Program.

Federally qualified health centers (FQHCs) are eligible to serve as non-VA providers under both PC3 and the Choice Program.  If an FQHC is a provider under PC3, the health center is automatically eligible to participate in the Choice Program. If an FQHC is not part of PC3 and would like to participate in the Choice Program, then the health center must establish a contract with Health Net, TriWest, or another TPA. The contract with a TPA must be in place before the delivery of health care services in order for the VA to reimburse care provided under PC3 or the Choice Program.  Rates for health care services vary based on program participation.  If an FQHC is participating in both PC3 and the Choice Program, the provider agreement with the TPA will determine reimbursement amounts for the health center. If an FQHC only wants to participate in the Choice Program, the health center must accept Medicare rates. Nonetheless, the PC3 and the Choice Program offer unique opportunities for health centers to serve veterans in their community.