Does Fee-For-Service Payment Increase Visits and Improve Quality among Veterans with Heart Failure? A Retrospective...

Veterans Health Administration (VHA) direct care (DC) specialists receive salaried compensation, while community care (CC) outpatient services are purchased by VHA under fee-for-service (FFS). As CC utilization expands, evidence remains limited regarding whether FFS incentives drive higher utilization or impact care quality.

To assess the effects of FFS payment on outpatient cardiology care utilization and quality among Veterans with heart failure.

This study used a retrospective cohort analysis of veterans newly diagnosed with heart failure from July 2021 to July 2024, each with at least one cardiology visit in either DC or CC within 90 days post-diagnosis. We applied a two-stage instrumental variable model adjusting for demographics, geographic factors, and facility and year fixed effects.

A total of 70,841 eligible Veterans were newly diagnosed with heart failure from July 2021 to December 2023.

The exposure was the ratio of CC cardiology outpatient visits to total cardiology outpatient visits. Outcomes included 180-day total cardiology outpatient visits, potentially preventable heart failure admissions, and all-cause admissions.

Within 180 days of heart failure diagnosis, Veterans had an average of 4.01 cardiology outpatient visits (SD = 4.14); 14% experienced potentially preventable heart failure hospitalization, and 35.1% had an all-cause admission. Patients exclusively using CC had more cardiology outpatient visits (mean = 5.39; SD = 4.89) compared to DC-only patients (mean = 3.18; SD = 3.42), fewer preventable admissions (10.07% vs. 14.40%), and fewer all-cause admissions (27.68% vs. 36.06%). Adjusted models showed increased cardiology visits associated with higher CC ratio (IRR = 2.09; 95% CI = 2.03, 2.15), but no significant improvement in preventable admissions (OR = 0.92; 95% CI = 0.84, 1.01) and marginal improvement in all-cause admissions (OR = 0.93; 95% CI = 0.87, 1.00).

FFS payments substantially increase cardiology outpatient utilization without meaningfully improving measured quality. Further work is needed to determine whether this increased utilization has other benefits.