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“Building a 21st Century VA Health Care System: Assessing the Next Generation of VA’s Community Care Network”

Senate Veterans Affairs Committee Hearing

February 11, 2026 (recording here)

HEARING INFORMATION

Witnesses & Written Testimony (linked):

• The Honorable Richard F. Topping: Assistant Secretary for Management and Chief Financial Officer, Office of the Secretary, U.S. Department of Veterans Affairs

• Alicia Skolrood: Executive Director, Integrated External Networks, Office of Integrated Veteran Care, Veterans Health Administration, U.S. Department of Veterans Affairs

• Leigh Ann Searight: Deputy Assistant Inspector General for Audits and Evaluations, Office of the Inspector General, U.S. Department of Veterans Affairs

TOP-LINES TO SHOW YOU ARE IN THE KNOW

1. Community care spending has surged over the past several years, and lawmakers are pressing the VA to prove it has the oversight tools in place to manage both cost and quality.

2. The Next Gen contracts would overhaul how the VA buys care in the community, adding quality metrics, value-based payments, and stronger program integrity safeguards.

3. A major concern throughout the hearing was whether the VA has enough staff and systems in place to properly oversee these multibillion-dollar contracts.

4. Senators raised repeated concerns about continuity of care, especially for veterans in rural states who rely heavily on community providers.

5. There was bipartisan agreement that community care should complement, not replace, VA direct care, and that the standard of care must be the same no matter where a veteran is treated.

PARTY LINE PERSPECTIVES

OPENING STATEMENTS FROM THE COMMITTEE

• Chairman Jerry Moran stated that the hearing was intended to evaluate how the VA’s community care system was fulfilling the promise of expanded access and meaningful choice established under the MISSION Act of 2018. He said the law was designed to ensure that no veteran would be limited by geography, long wait times, or bureaucratic barriers in accessing care. He acknowledged recent VA actions, including new requests for proposals for the next generation of Community Care Network (CCN) contracts and a national dental contract, as positive steps toward innovation, accountability, and value-based care. He underlined that the contracts must produce measurable improvements in access, outcomes, and costs, and he encouraged the department to respond promptly to congressional oversight requests.

• Ranking Member Richard Blumenthal said the Committee was reviewing the VA’s next generation of community care contracts, which he noted would total approximately one trillion dollars and begin in 2027. He stressed the importance of strong congressional and Inspector General oversight, particularly given the indefinite nature of the contracts and the potential impact on the VA’s direct care system. He expressed concern about staffing losses and resource constraints within VA facilities and argued that community care should supplement, not supplant, direct VA care. The Ranking Member called for greater transparency, timely information from the department, and clear guardrails before approving expanded funding for community care.

SUMMARY OF KEY POINTS

• Mr. Richard Topping testified that the VA’s community care program was central to ensuring veterans received care when and where they needed it, complementing the VA’s direct care system. He explained that the Next Gen procurement would modernize provider networks, increase competition, implement value-based payment models, strengthen utilization management, and enhance program integrity. The new contracts were structured as a 10-year multiple-award IDIQ designed to promote flexibility, competition, and continuous improvement. Mr. Topping projected that the reforms would improve quality and generate significant taxpayer savings, estimated between $54 billion and $100 billion over the life of the contract.

• Ms. Leigh Ann Searight shared that the Office of Inspector General (OIG) provided oversight to improve the efficiency, timeliness, quality, and integrity of both direct and community care. She claimed that while VA staff were committed to serving veterans, persistent challenges remained, including barriers to timely care, insufficient oversight of quality concerns, workforce gaps, and outdated financial systems. She identified risks in the current third-party administrator (TPA) contracts, including failures in medical record sharing, provider network adequacy, opioid safety compliance, and payment accuracy. Ms. Searight concluded that the Next Gen contracts presented an opportunity for improvement but underscored that strong oversight, enforceable standards, and proactive fraud prevention would be essential.

• Chairman Moran asked whether the VA’s planned efforts in the new contracts had met the OIG’s recommended requirements and whether the witnesses had reviewed the contract language to confirm alignment. Ms. Searight answered that the OIG had conducted preliminary reviews of the performance work statement language and had seen positive indications, but she said the OIG could not fully assess compliance until the contracts were awarded and negotiations were finalized. Chairman Moran then asked Mr. Topping whether he agreed with the OIG recommendations and intended to pursue them in the contract, and Mr. Topping agreed with most of them and said the VA was working with the OIG to implement them.

• The Chairman referenced an April OIG report on the Omaha VA Medical Center that found VA staff had limited veterans’ access to community care by manipulating clinically indicated dates, and he had heard a similar allegation at another facility. He asked Mr. Topping to commit to investigating the allegations and making prompt course corrections if needed, and Mr. Topping stated that he would do so.

• Chairman Moran then said he believed the VA had historically discouraged community care and asked whether Mr. Topping recognized that problem and whether it had been corrected. Mr. Topping replied that he understood the concern and explained that VA leadership had directed community care to function as its own payer “vertical,” with separate management and funding accountability from direct care, to reduce confusion and better meet statutory requirements.

• Chairman Moran pointed to indications that community care spending had risen faster than direct care spending, and he argued that the term “cost” could be misleading because the increase might reflect utilization rather than inefficiency. He noted that the MISSION Act allowed community care when it was in the veteran’s best medical interest and said he understood that major spending growth had been driven largely by emergency care and geriatric and extended in-home care, including changes associated with the Elizabeth Dole Act. He asked what he was missing and requested confirmation or correction of his understanding. Mr. Topping agreed that the Chairman’s points were accurate and explained that spending had increased alongside utilization, that the figures were not risk-adjusted for case mix, and that Next Gen was intended to add tools for managing quality and cost and improving accountability across the program.

• Ranking Member Blumenthal shared that community care funding had increased from about $9 billion in 2019 to more than $48 billion in the VA’s FY 2026 request and asked whether Mr. Topping agreed it was a staggering increase. Mr. Topping agreed the increase was large, and the Ranking Member then asked why direct care funding had risen far less over the same period. Mr. Topping answered that the spending figures did not reflect risk adjustment and said growth had been influenced by higher-cost services such as emergency care, home care, and geriatric care, while also emphasizing that the key question was what the VA received for the dollars spent.

• Ranking Member Blumenthal pressed on whether the VA had sufficient oversight to ensure quality and value, and Mr. Topping replied that the current community care program lacked tools common to other payer programs, such as quality management, value-based payments, utilization management, and program integrity controls. He said Next Gen was designed to introduce those capabilities so the VA could answer questions about value and outcomes.

• The Ranking Member cited an OIG recommendation that community care providers should be incentivized to meet the same training and quality standards as VA providers and asked whether “incentivized” was too weak and whether providers should be required to meet equivalent standards. Ms. Searight reported that community and VA providers both followed baseline professional standards, but she explained that the VA also trained providers in veteran-specific culture and expectations. She said contract provisions could require community providers to meet specified requirements.

• Ranking Member Blumenthal then asked about overpayments and contract enforcement since the MISSION Act, and Ms. Searight replied that the OIG had done substantial work on payment oversight, services, and fraud investigations. She said the VA had reported about $4 billion in improper overpayments to TPAs since 2021, which she described as about 4% of total amounts paid.

• Sen. Dan Sullivan raised concerns that a multi-vendor framework could leave high-cost, remote states like Alaska without bidders, which could threaten veterans’ access to care. He asked how the VA would ensure vendors would bid in such areas and how reimbursements would reflect higher costs without discouraging participation. Mr. Topping claimed the multiple-award IDIQ approach would allow both national and regional plans to bid, enabling the VA to select vendors with Alaska-specific expertise and to use regional models rather than a one-size-fits-all approach. He said the department could maintain quality requirements while being willing to pay more where geography and rural conditions made cost control less feasible.

• Sen. Sullivan also asked whether the VA would continue coordinating with tribal health organizations under the new framework, and Mr. Topping pledged to continue that coordination.

• Sen. Maggie Hassan mentioned continuity of care and asked how the VA would ensure veterans could keep seeing preferred community providers without interruption as Next Gen contracts began. Mr. Topping stated that the VA had extended authorization periods so veterans could stay with a provider for a full episode of care and said “best medical interest” criteria could support continued treatment with a community provider. Sen. Hassan responded that continuity often extended beyond a single episode for chronic conditions and warned against disruptions caused by contract changes.

• Sen. Hassan then asked how the VA would address access for rural veterans and what mechanisms would ensure robust rural provider networks. Mr. Topping discussed a major problem with providers finding it difficult to do business with the VA due to referrals, authorizations, and reimbursement challenges, and he said Next Gen aimed to make the VA’s payer operations more like Medicare by using familiar codes and payment structures. He believed that approach could make participation easier for rural providers and allow veterans to receive local care when appropriate, while still enabling referrals to higher-level or specialized care when needed.

• Chairman Moran agreed that provider burden remained a barrier and claimed the MISSION Act was intended to reduce authorization delays, referral hurdles, recordkeeping problems, and payment issues that discouraged community providers. He described hearing repeatedly from Kansas hospitals that the process was improving but still problematic, and he said simplifying community provider participation had to remain a priority. Mr. Topping conveyed that he had not met providers who did not want to serve veterans and agreed that the VA had to make the program easier to participate in by improving referrals, eligibility, authorization, and timely, accurate payment.

• The Chairman raised a continuity-of-care example in which a veteran receiving cancer treatments in the community was required to return to a VA facility for the final treatments due to a time-and-distance eligibility issue, and he also cited cases where chiropractic care was pulled back in-house after long-term community treatment. He said he wanted to ensure the VA avoided those circumstances and asked Mr. Topping to recognize that the problem had existed. Mr. Topping stated that he was aware of the specific cancer-treatment case and characterized it as an anomaly but called it unacceptable, explaining that Next Gen’s utilization management and automation were intended to better align authorizations with diagnoses and reduce manual eligibility and scheduling processes. He held that the goal was a seamless process that did not require veteran involvement and that the VA was working to address those issues through the procurement.

• Sen. Tammy Duckworth asked whether VA outpatient care scored higher than private sector care based on the VA’s own patient experience surveys. Mr. Topping responded that the VA did not currently measure quality data in the community care program and therefore could not benchmark direct care against community care. When pressed on why the VA did not collect comparable data on community care experiences, Mr. Topping explained that while the VA gathered internal quality data for direct care, it did not manage provider-level quality metrics in community care under the current structure. Next Gen was set to introduce standardized quality measures to allow benchmarking.

• Sen. Duckworth asked whether the VA had data consistent with veterans’ service organizations’ testimony that veterans preferred the VA as their primary care provider. Mr. Topping was not aware of a specific survey but stated that many veterans valued having both direct and community care options. Sen. Duckworth then requested details about a previously referenced trillion-dollar investment plan for direct care, and Mr. Topping outlined ongoing investments in new clinics and facility maintenance and agreed to provide the broader plan to the Committee.

• Sen. Duckworth noted that community care spending had nearly doubled between 2018 and 2023 and asked whether the VA had similarly increased its contract oversight workforce, particularly given prior staffing shortages. Mr. Topping replied that the VA was restructuring community care into a dedicated management “vertical” and building a program management office to strengthen accountability, though he did not provide current staffing percentages and agreed to follow up. He stated that the program management capacity would be built in advance of contract awards expected in January 2027.

• Sen. Mazie Hirono asked for clarification about the purpose of the Next Gen contract renewals and whether the VA was moving toward a privatized care model. Mr. Topping said the VA was not privatizing care but was introducing five new program pillars (quality, program integrity, value-based care, utilization management, and alternative payments) and shifting to a multiple-award Indefinite Delivery, Indefinite Quantity (IDIQ) structure to increase competition and flexibility.

• Sen. Hirono questioned how competition would meaningfully improve care quality and asked who would oversee these contracts amid staffing freezes. Mr. Topping responded that the VA was building internal program management capacity alongside the procurement process to ensure oversight and accountability.

• Sen. Tim Sheehy asked about improving the transfer of service members’ medical records from the Department of Defense to the VA at separation, so that records would seamlessly transfer without redundant examinations. Mr. Topping confirmed that leadership at both departments was actively engaged in addressing the “Zero Day” record issue and working toward automatic record transfer upon separation.

• Sen. Sheehy then raised concerns that the VA had made it difficult for rural hospitals to participate in community care and urged VA to simplify referrals, authorizations, and payment processes, and Mr. Topping agreed that VA needed to operate more like Medicare to make participation easier and more seamless for rural providers.

• Ranking Member Blumenthal asked how the VA had used $6 billion in supplemental funding and clarified prior statements about deferred resignation payouts. Mr. Topping responded that approximately $581 million had been used for deferred resignation payouts, while $5.8 billion had funded community care services and $200 million had purchased medical equipment.

• The Ranking Member then asked whether the OIG had adequate access to information for oversight. Ms. Searight said the audit office had sufficient access, but investigators had faced challenges obtaining information directly from providers, which was why the OIG sought contract language eliminating the need for subpoenas.

• Chairman Moran asked how the VA defined and measured quality of care. Mr. Topping explained that direct care had a robust internal quality system, while Next Gen would require community care contractors to track nationally recognized outcome and safety metrics, including disease outcomes and hospital performance indicators. He acknowledged that current legacy contracts lacked required quality measurement provisions but said Next Gen would incorporate them and align oversight with expiring contracts to ensure continuity.

• The Chairman asked about the decision to create a separate national dental contract under Next Gen. Mr. Topping explained that dental services had previously been embedded in broader medical contracts but would now be separated into a specialized national contract to improve network robustness and address prior payment and oversight issues.

• Chairman Moran also asked about the ACCESS Act and whether it would align with Next Gen’s framework. Mr. Topping stated that the goals of expanding mental health access were compatible and that Next Gen included the operational tools needed to implement such legislation.

• Ranking Member Blumenthal questioned whether significant variation existed among current provider contracts and whether such variation would continue under Next Gen. Mr. Topping replied that there was considerable variation due to regional differences and administrative complexity, and he stated that while regional flexibility would remain under Next Gen, core standards and quality goals would remain consistent nationwide. The Ranking Member underscored that standards and oversight should be uncompromising across all states, and Mr. Topping affirmed the VA’s commitment to consistent standards and strengthened program management oversight.

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