Estimating private sector professional fees for VA providers.

OBJECTIVES: To describe new methods used to estimate inpatient and outpatient Medicare-based professional fees for Veterans Health Administration (VA) services.
METHODS: National VA utilization files provided estimates of inpatient physician services, whereas local provider and utilization files gave counts of outpatient services by physicians, nurse practitioners, physician assistant, clinical psychologists, and clinical social workers. Services from ambulatory surgery, emergency room, and clinics (eg, dermatology and gastroenterology) were coded by study health information management staff (coders). VA-based billing information was edited against Medicare guidelines. Estimates for VA services without comparable Medicare fees were obtained from other commercial sources.
RESULTS: Hypothetical professional fees for VA services were 17% more ($109 million vs. $93 million) than the VA budget for physicians over 1 fiscal year at six sites. Total payments of nearly $21 million were generated for VA inpatient care. In fiscal year 1999, there were 30,209 admissions (of which 4549 were psychiatric) to the study sites; 30,518 discharges; 229,783 inpatient days, including 27,235 in critical care units; and 38,348 surgical days of care. DISCUSSION: Differences between the VA and the private sector maybe overstated because VA salaries of nonphysicians were not included in the VA budgets. Conversely, the extent to which VA professional services were undercounted in VA information systems used in this study may understate the difference. Future research may consider additional data collection approaches or information systems enhancements to enumerate more accurately all provider services that are reimbursable in the private sector.