By 2006, the concept of a three-phase implementation process was adopted. Phase 1 was the shifting of inpatient mental health services from the Naval Hospital Great Lakes (NHGL) to the NCVAMC that had taken place in 2003. Phase 2 was the shifting of emergency services and inpatient medical, surgical, and pediatric services from the Navy hospital to the NCVAMC in 2006, after the NCVAMC’s emergency department (ED) and surgical facilities were upgraded by the VA. Phase 3 was the shift of all Navy outpatient services to the new ACC building and other renovated spaces on the west campus of the Lovell FHCC, as well as the implementation of the FHCC as a single organization under a single chain of command in 2010.

Phase 1

In accordance with the October 2002 EDM, the Navy and the VA entered into a resource sharing agreement in which the Navy would discontinue acute inpatient psychiatric services at 200H and the NCVAMC would assume responsibility for the treatment of Navy patients in its acute mental health inpatient unit and lodge discharged mental patients in its psychiatric medical holding unit. According to the agreement, the Navy would compensate the NCVAMC for the services as a TRICARE network provider (i.e., at 90 percent of the CHAMPUS2 maximum allowable charge for the specific diagnosis related group) and provide several psychiatric support staff (Harnly, 2005). The agreement was implemented in October 2003, when six patients were transferred to the NCVAMC (Kuczka, 2003).

In August 2004, the Navy and the VA signed another resource sharing agreement in which the Navy operates a blood donor processing center in the NCVAMC in return for providing the NCVAMC with blood products. The NCVAMC agreed to provide 3,242 square feet of unused laboratory space and utilities, in addition to staff to monitor the cooling equipment after hours. The Navy agreed to pay $40,000 for renovations and $46,600 in rent. In exchange, the NCVAMC agreed to buy 415 units of blood products annually at a cost that was approximately equal to the rent (Harnly, 2005). The arrangement has benefited the Navy because the space in which it was located at Building 81H on the Navy base was no longer adequate and would have cost more than $3 million to renovate; in return, the NCVAMC has benefited by paying less for blood products (Hassan et al., 2008).

Neither of the sharing agreements was free of problems at first. The Navy and the NCVAMC disagreed on the amount of air-conditioning that would be needed for the blood processing laboratory, and experience


2 CHAMPUS stands for the Civilian Health and Medical Program of the Uniformed Services.

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