Duke doctors say they cut off VA's vets

BY JIM SHAMP, The Herald-Sun
February 23, 2005   10:04 pm

DURHAM -- A group of Duke University physicians says it will no longer treat military veterans referred by the Veterans Affairs Medical Center because the VA won't pay enough.

Executives of Duke's Private Diagnostic Clinic physicians' group voted to stop treating the veterans Jan. 15 because the VA system wouldn't agree to pay them more than 100 percent of current Medicare reimbursement rates.

PDC Executive Director Paul Newman wrote in a Jan. 7 memo that "physicians in the PDC will no longer treat, except as required under applicable law ... eligible VA beneficiaries at Duke University Hospital, Durham Regional Hospital and any of the various clinic locations of the PDC when the Department of Veterans Affairs is responsible for payment for such services."

The new rule was to take effect Jan. 15, according to the memo.

But according to Hal Hummell, spokesman for the local VA hospital, the threatened cutoff has not actually happened.

"As far as we're aware it's never been implemented," he said. "They haven't stopped seeing our patients. It's being held in abeyance until these issues are resolved. We're in ongoing negotiations with Duke about the future reimbursement rate that we'll be paying to them for services they provide to our patients when we refer them to any of these PDC physicians for treatment."

If an eligible veteran goes to the local VA hospital and doctors there determine the facility can't provide the care needed, they'll generally try to refer the patient to another VA facility, said Hummell. "But if it's something that would be more advantageous to the veteran to have our affiliate across the street do, we'll refer the veteran across the street [to Duke University Hospital] and pay for it on a fee-for-service basis."

Hummell said the price the VA can pay referral doctors is set nationally and is pegged to the Medicare rate schedule. The VA pays 100 percent of the Medicare-established price of a procedure when veterans are referred to specialists outside the VA system, he said.

Hummell said he knew of no other situations across the country in which VA hospitals paid physicians more than the going Medicare rate.

Newman wrote in his Jan. 7 memo to PDC members that the group had failed in negotiations with the VA "regarding our desire to execute a contract at a fair market rate." So Newman said in the memo that the PDC administrative board had notified the VA hospital officials that the Medicare reimbursement rate was unacceptable.

PDC physicians, who hold faculty positions at Duke's medical school, treat more than 100,000 patients a year.

Newman's memo noted that there could be instances when the VA has "no other option than to arrange for care by PDC physicians."

In such a case, "if they are willing to enter into a patient specific special pricing arrangement they will be directed to our Managed Care Contracting department for negotiation," according to the memo.

Duke officials, asked by The Herald-Sun late Tuesday afternoon for more information about the situation, confirmed the ongoing negotiations between PDC and the VA. But Duke was otherwise unable to respond to questions by Wednesday evening, according to spokeswoman Tracey Koepke.

For example, Koepke said she wasn't able to say how many physicians are members of the PDC.

Rodney Williams, manager of service access for PDC, also said he was unable to shed any light on the status of the contract negotiations, though Newman's memo listed Williams' phone number and said, "Rodney will be the point of contact for the VA."

"I don't know what the scenario is at this point," Williams told The Herald-Sun Wednesday afternoon. "I don't know anything about those discussions."

Hummell said VA physicians also sometimes refer patients to private facilities other than those run by Duke.

Randi Tisko, chief executive officer of the non-Duke-affiliated N.C. Specialty Hospital, said she knows of no reason that her institution would turn away patients referred by the VA.

N.C. Specialty accepts Medicare patients, she said. "And if you're going to be a Medicare provider you have to accept the rates they set forth." So she said she saw no reason not to accept a comparable rate from a VA referral.

Tisko said she didn't know how many VA patients Specialty Hospital has cared for, if any.

Duke is also a Medicare provider. In fact, nearly 42 percent of Durham Regional Hospital's patients are on Medicare. In 2004, when Durham Regional was threatened with losing its Medicare reimbursements, it faced losing $67 million in revenue.

Newman's memo didn't include any details about what the PDC doctors unsuccessfully sought in negotiations with the VA. And Hummell said he didn't know and was unable to get details Wednesday.

"The basic take-home message is that we're in ongoing negotiations with Duke over these reimbursements," Hummell said. "But our patients will continue to be taken care of by the VA one way or the other. They shouldn't be concerned that they might be left without medical care."