Panel Recommends New Pay and Benefits System for Much of VA Workforce

This story has been updated.

A panel studying comprehensive reform to vets’ health care recommends moving the entire Veterans Health Administration workforce under one personnel category, which ultimately could increase employees’ pay but also make it easier to fire them.

The congressionally-mandated Commission on Care has proposed creating “a new alternative personnel system under Title 38 authority to simplify human capital management in VHA, increase fairness for employees, and improve flexibility to respond to market conditions,” according to a working draft of the report obtained by Government Executive that the panel plans to submit to Congress and President Obama at the end of the month.

The commission recommended giving the VHA -- the largest organization within the VA – more flexibility in hiring and setting pay across-the-board, and establishing one standardized system for all employees when it comes to leave, performance evaluations, and disciplinary standards and processes. The draft report suggested making pay raises based on performance and expertise and not "time-in-grade." 

Congress would have to enact any of those personnel system reforms. The commission proposed grandfathering in current employees with respect to their pay and benefits.

J. David Cox Sr., president of the American Federation of Government Employees, called the recommendation to move the VHA workforce into one, new personnel system “a disgrace” that would deter medical personnel from working at the department. AFGE represents a large part of the VA workforce.

“The VA will not be able to compete for top health care professionals if all employees are placed under Title 38, resulting in the loss of MSPB rights, fair and competitive pay that also rewards experienced providers, and full veterans’ preference rights for many VA health care personnel,” Cox said. The draft report did not say that employees would lose MSPB rights, or veterans’ preference, under a new personnel system.

The commission draft criticized the VHA for an outdated, inflexible approach to recruiting, retaining, and managing employees properly. That has resulted in staffing shortages and vacancies from top to bottom within the agency, as well as inconsistent delivery of quality health care to vets, commissioners said. Part of the problem, according to the draft, is that VA uses “a confusing mix” of personnel authorities and standards that make “staffing and management a struggle for both supervisors and human resources personnel.”

The VHA workforce is composed of Title 5 and Title 38 employees -- the latter category includes doctors, nurses and other categories of health care workers. Within Title 38, things become even more complicated: There are employees considered “pure” Title 38, meaning they do not have the same standard Merit Systems Protection Board appeal rights that Title 5 employees have. But hybrid Title 38 employees, including social workers, pharmacists and psychologists at VHA, have the same rights to appeal adverse actions to MSPB as Title 5 employees. The separate title and the two tracks within it emerged as a way to help the VA secretary fill certain jobs faster through the federal hiring process. 

But the different authorities have outlived their usefulness, according to the commission, making it difficult to recruit, train, and reward talented employees adequately. The draft report said “an internal VHA workgroup that examined HR concluded that a complete break with Title 5 and a reworking of current Title 38 hiring authority is required.” Supervisors also need to do a better job holding poor performers accountable, the commission said. “VA must have a technology infrastructure to actively track and manage poor performance (annual ratings and disciplinary actions) that both human capital managers and supervisors can use to keep track of issues.”

VA leadership and many lawmakers already support shifting more employees into Title 38 so the department can pay top officials more—and fire poor performers faster. The Veterans First Act, introduced in April by Senate Veterans’ Affairs Committee Chairman Johnny Isakson, R-Ga., and Ranking Member Richard Blumenthal, D-Conn., would move senior health care executives into Title 38, and take away the MSPB appeal rights of all VA senior executives, including those remaining under Title 5. The bill would give senior executives the opportunity to appeal adverse actions to an internal department review board, the same right those currently under Title 38 have. Under that scenario, the secretary would have the final say over the type of punishment meted out, including firing, suspension and demotion.

The Commission on Care urged the Office of Personnel Management to continue overseeing benefits for VHA employees under a new personnel system, but not to restrict management flexibilities. “This includes no limitations on pay, performance awards, or performance and disciplinary processes other than those imposed under Title 38.” The proposed role of MSPB in any new system was less clear as outlined in the draft report, which said the MSPB “should continue to provide access to VHA employees to the appeal process for terminations, but the rules used to adjudicate each case are based on the new regulatory standards established by VHA for the new alternative personnel system.”

The 258-page draft report, which includes several other recommendations related to VHA’s governance, leadership, and contract management, urged the agency to modernize its operations to better reflect its status as the country’s largest health care system. “The quality of VA health care is generally comparable to that of the private sector and by some measures superior, but it is inconsistent from facility to facility and serves some populations better than others,” the commission said.

The panel also suggested:

• Creating a fiduciary-like oversight board of directors to provide guidance and set long-term strategy for the VHA.
• Simplifying performance management using private-sector metrics.
• Establishing a new performance management system for VHA health care leaders that is separate from performance measurement, and better assesses those employees’ leadership ability.
• Appointing a chief of talent management.

The panel acknowledged that overhauling workforce management at the VHA won’t be easy. “Establishing a new human capital management system in VHA will neither be easy or quick, nor will it be a panacea that alone will fix all that is wrong with recruitment, retention, development and advancement,” said the draft. “In designing and implementing a new system, VHA must take full advantage of private-sector resources and expertise in human resource management and ensure that the new system is built to be compatible with the private sector.”

Eric Katz contributed to this report.