Implications of the VA’s Proposed Rule Regarding Provider Agreements for Extended Care Services and Recommendations for Interested Providers

As previously discussed, the U.S. Department of Veterans Affairs (the “VA”) issued a proposed rule in February providing long-awaited guidance regarding an exemption to the Service Contract Act (“SCA”) for certain providers of extended care programs entering into agreements with the VA under the Veterans Health Care, Capital Asset and Business Improvement Act. The SCA imposes prevailing wage rate and fringe benefit standards, as well as various reporting requirements, on certain contractors and subcontractors.

We recently interviewed the Director of the Purchased Long-Term Care Group at the VA regarding implications of the proposed rule and steps providers can take to begin preparing for the changes. Highlights of our interview appear below:

What are the implications of the new rule? Providers will be exempt from the SCA’s reporting and wage payment requirements, effectively removing the ability of the Department of Labor to audit them for SCA compliance. Providers therefore have discretion to determine their own wages. The removal of these reporting requirements will likely result in increased veteran care by small providers of extended care services. Such providers were previously unable or unwilling to admit VA patients, concluding that reimbursement from VA for caring for one or two veterans was not worth the cost of compiling and reporting the data required by general federal contract law.

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Source: Healthcare Employment Counsel

This information is intended to be educational and should not be considered legal advice on any specific matter.