Healthcare company executives make millions as veterans wait for care

Healthcare company executives make millions as veterans wait for care

CHARLOTTE, NC (WBTV) - Documents filed with federal regulators show executives at the company responsible for administering a program designed to give veterans faster access to specialty care made millions of dollars in 2015, even as a growing chorus of veterans and doctors highlighted problems with the program.

The VA Choice program was created by Congress in the wake of revelations that veterans were having to wait months or years to be seen by specialists at some VA clinics across the country.

Under the program, any veteran who would have to wait more than 30 days or who lives far away from a VA healthcare facility is eligible to be seen by a private specialist.

In the southeast, including North Carolina and South Carolina, and elsewhere across the country the program is administered by a company called Health Net.

The company has been on the defensive for months, as On Your Side Investigates and outlets across the country chronicled problems with the program meant to speed veterans' access to care.

Since February, a series of reports have revealed veterans who have waited more than 30 days just to schedule a VA Choice appointment; doctors who have had to stop accepting payments because Health Net coordinators are slow to authorize treatment or reimburse providers; and veterans who have been debilitated following surgeries performed through the VA Choice program because Health Net administrators failed to authorize required post-operation physical therapy.

One of the first veterans to call On Your Side Investigates for help getting treatment from the VA and the VA Choice Program was Jim Bancroft, an ex-Marine who lives in Rock Hill, SC.

Bancroft received a VA Choice referral for multiple orthopedic issues in his spine and shoulder. One issue was treated by a doctor in Charlotte.

But Health Net referred Bancroft to a doctor further from home to be treated for a second problem. Bancroft was surprised to see a number he didn't recognize when he looked at the information for an orthopedic surgeon's office he had just gotten through the VA Choice Program.

"I looked at his phone number and I said 'where in the world is that? Is that somewhere up near Raleigh?' I didn't recognize the area code, Bancroft said in a recent interview with On Your Side Investigates. "So I Google the guy's name – the doctor's in Indiana! Well, I live in Rock Hill, South Carolina. "

Bancroft said the referral for the Indiana doctor came in April, for an issue that was first spotted on an MRI done at a VA facility in mid-December 2015. He tried to get a different referral for a doctor in the Charlotte area but couldn't get someone to help him sort out the mix-up until after a call from On Your Side Investigates.

He is scheduled to see a specialist on September 15, 2016, more than nine months since his original diagnosis for which he will see the orthopedic surgeon.

Story: Slow VA Choice authorization, reimbursements frustrate doctors' offices

Bancroft has a simple message for Health Net's executives.

"What you are doing is not health care. What you are doing is medical neglect," he said.

So he was surprised to hear that Health Net's CEO, Jay Gellert, made more than $14 million in 2015, up from nearly $12.5 million the year before.

Included in Gellert's 2015 compensation included $3.3 million in incentive compensation, or performance-based bonus money.

In making the decision to award Gellert a bonus that amounted to 270 percent of his base salary, the company's board of directors noted the following in a filing with the Securities and Exchange Commission:

Mr. Gellert's leadership and significant contributions in support of the Company's successful performance with regard to the Strategic Initiatives, positioning the Company to continue to benefit from the unprecedented changes in the managed care industry, and negotiating and effectuating the Merger Agreement.

Story: Breakdown in VA Choice program leaves some veterans permanently injured

Health Net's President, Government Relations, Steven Tough, made $2.3 million in total compensation in both 2014 and 2015. Although his incentive plan compensation, or bonus money, was down roughly six percent year-over-year, he still pulled in more than $500,000.

The company's SEC filing noted its board of directors decided to give Tough a bonus amounting to 88 percent of his base salary because of the new business he helped the company win from the government, not on its performance in carrying out existing government contracts, like the VA Choice program.

"Mr. Tough's significant contributions in support of our Government Contracts segment, including growing the State Health and Government Programs businesses and responding to the Department of Defense's request for proposal for the next generation of the TRICARE contract," the company's SEC filing reads.

A spokesman for the company declined to make an executive available for an on-camera interview to explain the performance-based compensation decisions. Instead, the company sent the following statement:

"All Health Net Federal Services employees, including our executive team, are committed to serving veterans and delivering the Veterans Choice Program efficiently and effectively."

"Our employees, including our executive team, generally have targeted compensation within a competitive range of market levels."

"The 2014 and 2015 proxy statements were filed with the SEC by Health Net, Inc. (the former publicly traded parent company of Health Net Federal Services). The executive officers named in those filings had responsibilities that expanded beyond, or did not include, Health Net Federal Services."

"We know there is still more work to be done to fix the Veterans Choice Program and we continue working in partnership with the leadership of the VA to bring about continuous improvement."

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