[Senate Hearing 107-393]
[From the U.S. Government Publishing Office]
S. Hrg. 107-393
PRESIDENT'S FISCAL YEAR 2002 BUDGET PROPOSAL FOR VA
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HEARING
BEFORE THE
COMMITTEE ON VETERANS' AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
MARCH 13, 2001
__________
Printed for the use of the Committee on Veterans' Affairs
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76-697 WASHINGTON : 2002
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COMMITTEE ON VETERANS' AFFAIRS
ARLEN SPECTER, Pennsylvania, Chairman
STROM THURMOND, South Carolina JOHN D. ROCKEFELLER IV, West Virginia
FRANK H. MURKOWSKI, Alaska BOB GRAHAM, Florida
JAMES M. JEFFORDS, Vermont DANIEL K. AKAKA, Hawaii
BEN NIGHTHORSE CAMPBELL, Colorado PAUL WELLSTONE, Minnesota
LARRY E. CRAIG, Idaho PATTY MURRAY, Washington
TIM HUTCHINSON, Arkansas ZELL MILLER, Georgia
E. BENJAMIN NELSON, Nebraska
William F. Tuerk, Chief Counsel and Staff Director
William E. Brew, Minority Chief Counsel
(ii)
C O N T E N T S
__________
March 13, 2001
SENATORS
Page
Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado,
prepared statement............................................. 51
Craig, Hon. Larry E., U.S. Senator from Idaho, prepared statement 7
Rockefeller, Hon. John D., IV, U.S. Senator from West Virginia,
prepared statement............................................. 86
Thurmond, Hon. Strom, U.S. Senator from South Carolina, prepared
statement...................................................... 2
WITNESSES
Cullinan, Dennis M., Director, National Legislative Service,
Veterans of Foreign Wars of the United States.................. 83
Prepared statement........................................... 84
DeWolf, Howie, National Service Director, AMVETS................. 73
Prepared statement........................................... 75
Fischl, James R., Director, Veterans Affairs and Rehabilitation
Commission, The American Legion................................ 63
Prepared statement........................................... 64
Principi, Hon. Anthony J., Secretary, U.S. Department of Veterans
Affairs........................................................ 8
Prepared statement........................................... 9
Response to written questions submitted by:
Hon. Arlen Specter....................................... 11
Hon. Ben Nighthorse Campbell............................. 25
Hon. John D. Rockefeller IV.............................. 29
Surratt, Rick, Deputy National Legislative Director, Disabled
American Veterans.............................................. 76
Prepared statement........................................... 77
Thomas, Harley, Health Policy Analyst, Paralyzed Veterans of
America........................................................ 80
Prepared statement........................................... 81
APPENDIX
Weidman, Richard, Director, Government Relations, Vietnam
Veterans of America, prepared statement........................ 89
(iii)
PRESIDENT'S FISCAL YEAR 2002 BUDGET PROPOSAL FOR VA
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TUESDAY, MARCH 13, 2001
U.S. Senate,
Committee on Veterans' Affairs,
Washington, DC.
The committee met, pursuant to notice, at 9:35 a.m. in room
SR-418, Russell Senate Office Building, Hon. Arlen Specter
(chairman of the committee) presiding.
Present: Senators Specter, Thurmond, Campbell, Craig,
Hutchinson, Wellstone, Murray, Miller, and Nelson.
Chairman Specter. Good morning, ladies and gentlemen.
We will now proceed with the hearing of the Veterans'
Affairs Committee.
Senator Rockefeller, our distinguished Ranking Member, will
be joining us shortly. His staff advises that he would prefer
that we proceed, which we shall do at this time.
We are pleased to have with us this morning the new
Secretary of Veterans Affairs, Anthony Principi, and his
distinguished staff. We welcome you here again, Mr. Secretary.
I personally thank you for attending the session in
Philadelphia last week at the Veterans Hospital there, and then
you proceeded with Congressman Christopher Smith up to North
Jersey, Congressman Smith being the chairman of the Veterans
Committee in the House.
We have a very pleasant proceeding at this time, and that
is the recognition of the distinguished President pro tempore
of the U.S. Senate, a man who has established an extraordinary
record. Without further preliminaries, I will ask the Clerk to
make a reading at this time.
The Clerk [reading]:
Resolution Designating the Honorable Strom Thurmond, President Pro
Tempore of the Senate, as Chairman Emeritus of the U.S. Senate
Committee on Veterans' Affairs
Resolved,
Whereas, Senator Strom Thurmond was instrumental in the
founding of the Committee on Veterans' Affairs and has served
continuously on the Committee since its creation in 1971; and
Whereas, Senator Thurmond has served for forty-seven years
in the U.S. Senate, and has served with distinction as Chairman
of the Judiciary Committee, Chairman of the Armed Services
Committee, and was designated in 1999 as Chairman Emeritus of
the Armed Services Committee; and
Whereas, Senator Thurmond has not heretofore served as
Chairman of the Committee on Veterans' Affairs despite his
status as the senior member of the Committee; and
Whereas, Senator Thurmond was commissioned a 2nd Lieutenant
in the United States Army Reserve in 1924 and served in the
Army Reserve and on active duty for thirty-six years rising to
the rank of Major General; and
Whereas, Senator Thurmond received the Purple Heart for
injuries received while participating in the Normandy invasion
with the 82d Airborne Division on D-Day, June 6, 1944; and
Whereas, Senator Thurmond, in addition to the Purple Heart,
was awarded five Battle Stars for his military service and, in
addition, earned eighteen decorations, medals, and ribbons
including the Legion of Merit with Oak Leaf Cluster, Bronze
Star for Valor, Belgian Order of the Crown and French Croix de
Guerre; and
Whereas, Senator Thurmond's leadership and devotion to duty
have been dedicated to his fellow veterans through his
sponsorship of such legislation as: the Department of Veterans'
Affairs Act, establishing the Veterans Administration as an
executive department; the Veterans Cemetery Protection Act; and
the establishment of the Department of Labor Assistant
Secretary for Veterans Employment and Training; and
Whereas, Senator Thurmond has been recognized by the
American Legion, the Veterans of Foreign Wars, AMVETS, the
Disabled American Veterans, the Paralyzed Veterans of America,
and by many other veterans service organizations, for his
sincere dedication and enormous contributions to veterans:
Now, therefore, be it
Resolved, that the Honorable Strom Thurmond, President Pro
Tempore of the Senate, in recognition of his outstanding and
selfless service to America's veterans, is hereby designated
Chairman Emeritus of the U.S. Senate Committee on Veterans'
Affairs, and he shall hereafter receive the same
acknowledgement and recognition as that fitting other Senators
who have served as Chairman of this Committee. [Applause.]
Chairman Specter. It is too late at this point to call for
a vote. [Laughter.]
So, as the lesser chair of the committee, I will determine
that the resolution is adopted by acclamation.
Senator Thurmond, would you care to make a comment?
Senator Thurmond. Thank you very much, Mr. Chairman.
Thirty years ago the Senate passed a resolution organizing
the committee for the first time. Since that time, I have had
the privilege of serving on this committee with many fine men
and women. Although the faces have changed over the years, the
dedication of the members of this committee has remained
constant. I enjoy my service on this committee and the
association I have had with those who have served and with each
of you who presently serve on this important committee.
I am pleased that Secretary Principi and representatives
from the various veterans service organizations are here today.
I appreciate their service and the veterans they represent. I
know they continue to care about issues we originally faced and
which are still areas of concern: compensation and pensions;
improving medical care; and veterans education, training, and
employment.
I greatly appreciate the honor which this committee has
bestowed on me. I express my great appreciation to you, to the
other members, and to the staff for this recognition as
Chairman Emeritus. Thank you again.
[The prepared statement of Senator Thurmond follows:]
Prepared Statement of Hon. Strom Thurmond, U.S. Senator From South
Carolina
Mr. Chairman: Thirty years ago, on January 28, 1971, the
Senate passed a Resolution organizing this Committee for the
first time. On that day five members of the majority party
where named as members--Senator Hartke as Chairman, joined by
Senators Talmadge, Randolph, Hughes and Cranston. The following
day, January 29, the Republican members of the Committee were
elected. Joining me were Senators Hansen, Cook and Stevens.
Since that time, I have had the privilege of serving on
this Committee with many fine men and women. Although the faces
have changed over the years, the dedication of the Members of
this Committee have remained constant. I enjoy my service on
this Committee and the association I have had with those who
have served and with each of you who presently serve on this
important Committee.
I reviewed the Congressional Record for the 92nd Congress,
that first year of this Committee's existence. The issues which
we faced then might seem familiar. Our agenda then including
Veterans loans, compensation and pensions, improving medical
care, grants for adapted housing for disabled veterans,
national service life insurance, establishment of a National
Cemetery system, the Health Professions Training Act, and the
Veterans Education and Training Assistance Act.
These were not new issues to the Congress. Prior to the
establishment of this Committee, however, veterans issues were
divided among other Committees of the Senate, including the
Labor Committee and Finance Committee. The establishment of
this Committee ensured that veterans issues would receive the
attention they deserved in a comprehensive manner. I supported
the establishment of this committee and continue to be a strong
advocate.
Veterans issues have been very important to me. Mr.
Chairman, the veterans who are with us today, and those they
represent, served with honor and distinction. They fulfilled
the highest obligation of American citizenship by defending
this country in time of need. Accordingly, our Nation has an
equal responsibility to care for these men and women who have
sacrificed and suffered as a result of their service. We must
continue to work to ensure that the great debt owed to our
veterans is honored. They deserve no less. Therefore, as a
member of this Committee, I will continue to look after the
interests of our Veterans.
I greatly appreciate the honor which this Committee has
bestowed on me. I express my great appreciation to you, to the
other Members and to the staff for this recognition.
Mr. Chairman, with regard to the subject matter of this
hearing, It is a pleasure to be here this morning to consider
the budget requests for the Department of Veterans Affairs for
fiscal year 2002. I join you and the members of the Committee
in welcoming the Honorable Anthony J. Principi, Secretary of
Veterans Affairs and representatives of the Veterans Service
Organizations. I look forward to each of their statements.
Mr. Chairman, the President has outlined his budget
blueprint. He referred to that document as ``A Responsible
Budget for America's Priorities.'' I am pleased that among the
President's priorities is his commitment to revitalize National
Defense. Included in that priority is his focus on high-quality
health care and timely benefits. I look forward to working with
you and the Administration in ensuring this priority is met,
and the promise to our Veterans is fulfilled.
Mr. Chairman, I thank the witnesses for appearing here
today and I look forward to reviewing the testimony.
Chairman Specter. Thank you very much, Chairman Emeritus
Strom Thurmond. You honor us by being the President pro tempore
of the U.S. Senate, and you honor us with your presence here
and by being Chairman Emeritus.
The resolution recites only a few of the achievements
during your extraordinary service of 47 years in the U.S.
Senate, and before that Governor of South Carolina, and
candidate for the Presidency of the United States in 1948, and
your extraordinary devotion to duty including parachuting
behind the lines in World War II when most men in excess of 40
at that time would have been at home enjoying comfortable
leisure. But you have, indeed, set an example and have made a
milestone.
Just one personal recollection. When Senator Howard Baker
was the majority leader in 1981-82-83-84 he made it a practice
to have all night Senate sessions to finish the work of the
Senate. One evening, illustratively, when we were on the
finance bill, at 11:45, standing next to the chairman of the
Finance Committee, Senator Dole, he said, ``There are 63
amendments pending, and amendments, like mushrooms, grow
overnight. So we are just going to work through the bill.'' At
6:30 a.m. when the sun came up, we finished the bill. We had
about four or five roll call votes, many amendments had been
withdrawn, some voice votes, and it was amazing how short the
debate gets at about 3 a.m.----
[Laughter.]
Chairman Specter [continuing]. With 60 or 70 Senators on
the floor, and 30 or 40 sleeping in the Cloakroom, and the
shouts ``a vote, a vote'' would be heard, and the speeches were
abbreviated.
But during those all night sessions, I made it a point to
have a protracted bowl of soup with Senator Thurmond. And I
learned about his tenure in the service with that young fellow
Jack Kennedy, and Lyndon Johnson, his work with President
Roosevelt and President Truman, and all of the legends. And,
Strom, you are a living legend in your time.
In the absence of the ranking member, we will alternate
across the aisle. I believe Senator Wellstone is next ranking
Democrat.
Would you care to make a comment, Senator Wellstone?
Senator Wellstone. Mr. Chairman, I am sorry to be late.
Have we heard from the Secretary yet?
Chairman Specter. We have not. But we will just take a
moment or two.
Senator Wellstone. I will just take 1 minute to put the
Secretary's comments at least in my context as a Senator. I was
just meeting with the DAV, and have been at the joint hearing
with PVA not too long ago with a lot of other organizations,
and I know that the chairman has spoken out on this as well--
and I think we have got a great Secretary of Veterans Affairs,
I have said this to Tony, if I could call him Tony, when I met
him, and I am so thrilled--but there is a concern about the
budget.
And if I could make an announcement, Mr. Chairman, with
your forbearance. On Wednesday at noon, I do want members of
the committee to know that there is going to be an unveiling of
the portrait of Secretary Jesse Brown at the VA building. It
would mean everything in the world to Secretary Brown if we
could be there. So I hope as many Senators as possible can be
there. He is struggling with a difficult disease now. So it is
really important for people to celebrate his work. So I want to
mention that.
And then to say to you, I have no doubt about this
Secretary's commitment. I have grave reservations about the
budget in the context of the overall tax cuts budget. I do not
think $1 billion does the job, for reasons that are real
clear--Millennium Care, veterans' mental health services,
uninsured veterans and how we deal with them. I think we are
going to have to have a better budget. I think most all of us
are committed to that.
And the only other thing I will say to you, Mr. Secretary,
and to everybody, is I had the opportunity to be at a press
conference with Heather French the other day introducing the
bill that deals with homeless veterans, with Lane Evans on the
House side, and I want to get that to all of my colleagues.
About 30 percent of homeless adults in the country are veterans
and this is a wonderful effort to put more of a focus on how we
can really put the services to them. I want to get this, Mr.
Chairman, to all of my colleagues, and I look forward to
working with the Secretary. Thank you so much.
Chairman Specter. Thank you, Senator Wellstone.
Senator Campbell?
Senator Campbell. Thank you, Mr. Chairman.
Mr. Secretary, welcome. I hope you will bear with us a
moment or two while we say a few things about our colleague and
friend, Strom Thurmond.
We live in a country, Mr. Chairman, where the word ``hero''
is bandied around pretty lightly. We hear about movie heroes
and sports heroes and so on. My view of what a hero is, is a
person that has made a commitment at great personal risk and
sacrifice to make this a better Nation. Certainly, from that
context, our colleague Strom Thurmond is a hero in my view.
About 5 years ago, Strom was down by the lower level about
to get on the subway, and there was a man down there who was, I
guess, partly deranged. And, maybe you remember this, Mr.
Chairman, he hit Strom with his elbow, and Strom did not pay
much attention to it. But I did, and the policeman down there
did, too. The policeman and I both wrestled this guy down to
the floor and got some handcuffs on him and turned him over to
the Capitol Police where he was taken out of the building. But
a few days later somebody said to me, ``That sure was nice of
you for coming to the aid of Strom Thurmond.'' I told them, ``I
was not coming to his aid, I was trying to protect that guy
from Strom.'' [Laughter.]
Because knowing Strom's history as a real warrior, I am
sure he could have done very well on his own.
There has been a lot written about Senator Thurmond. But I,
like you, have had opportunities in the past on late nights
when we would sit down in the Senate buffet at the table where
Senators sometimes sit around and eat, to have coffee with him
and talk. I can tell you, the things that are not written in
those books about Strom are equally valuable. I would often ask
him about his personal interaction with Harry Truman or John
Kennedy or some of the people that you mentioned, some of the
people that I will never have the good fortune of knowing.
Those personal recollections of his about what he said and what
Harry Truman said, things of that nature, they were absolute
gems. They may never be recorded, but they were just a
marvelous experience for me and something that I am going to be
able to take away from here and consider myself fortunate and
lucky, indeed, that I served with one of the really great men
in American history.
I heard that he has been in office about one-fifth of the
whole time we have had a United States form of government. That
is a lot of years of service. I notice even now with all the
years he has been here, and with all the wonderful awards he
has gotten, and all the accolades from people who have
cherished him and admire him, he is never too busy to talk to
anybody. This is a body where egos tend to get fed a little
bit, and some of us maybe get the idea we are a little more
important than we really are. But if you watch Strom in the
halls, it does not make any difference if he is speaking to a
world leader or the young lady that operates the elevator. He
treats them all the same, with dignity and graciousness,
caring, and understanding. I think that is the real quality of
a really great man.
He has never forgotten his roots. I lived in Japan a few
years, and they have a saying in Japan, Mr. Chairman, and it
is, ``Be kind to the people you meet climbing Mount Fuji
because they are the same ones you are going to meet on the way
back down.'' Which is just a way of saying that you should
never forget where you came from and the people that make this
Nation great. Strom has not forgotten that. And, it has just
been a delight for me to be able to work with him. Thank you,
Mr. Chairman.
Chairman Specter. Would anybody else care to make a comment
about Senator Thurmond?
[No response.]
Chairman Specter. Well, we have a busy agenda, Strom, so we
shall proceed.
Yes, Senator Craig?
Senator Craig. Mr. Chairman, I am going to have to step out
in a few moments to go Chair the Senate, so I would like to
make a few comments, if I could.
Chairman Specter. We recognize Senator Craig.
Senator Craig. Mr. Chairman, first of all, let me thank you
for the honor you have by this resolution bestowed on Senator
Strom Thurmond. It is appropriate and befitting a person who we
have all cherished knowing and who we have all benefited a
great deal from knowing, and continue to do so.
The Chairman and I were in the elevator coming over here
this morning and we were hustling to get here because we were
reminded that if we were late, we would be late and Strom
Thurmond would be early. I think that says so much about a
person who at 98 years of age still serves and serves on
schedule and on time. And that is exactly the case here. And as
someone who has known Strom Thurmond by name and by reputation
all of my political life, and then to have the privilege of
serving with him in the U.S. Senate, that is, in fact, a great
honor.
So, Mr. Chairman, thank you for honoring him today with
this resolution.
Strom, congratulations on becoming the Chairman Emeritus of
this committee.
I want to recognize our new Secretary. I look forward to
working with him in the coming months and years as he works to
build the confidence and the dignity of the Veterans
Administration and provide the kinds of services to veterans
that this committee expects our Government to do for our
veterans. We will work with you in a cooperative manner. There
will be times when we may criticize you but it will be in the
constructive way of urging you on to make sure that the
Veterans' Administration provides the services to America's
veterans that are befitting and that in most instances were
promised.
Over the last several years this committee has stepped
forward and actually gone beyond what was the intent of the
past administration because we did not feel we were meeting the
targets and/or the responsibilities to our veterans. We will
continue to do the same. I am not pleased with the level of
budget that we see at this time. We are going to have to work
to solve those problems to make sure that we maintain those
levels of service. But I look forward to you being here, and I
apologize that I will have to step out of the committee.
Mr. Chairman, let me ask unanimous consent that my full
statement be made a part of the record.
[The prepared statement of Senator Craig follows:]
Prepared Statement of Hon. Larry E. Craig, U.S. Senator From Idaho
Mr. Chairman, it is indeed a pleasure to be here with
Veterans Administration (VA) Secretary Principi and
representatives of five of our veterans service organizations.
You all share a commitment to our Nations veterans and their
families that honors their sacrifice and service. The American
Legion, Veterans of Foreign Wars, Disabled American Veterans,
Paralyzed Veterans of America, and AMVETS provide a wonderful
service to our veterans which does not go unnoticed. I look
forward to your testimony as we develop a budget that
recognizes the immeasurable contributions veterans have made to
this great country.
Last year we provided the VA with a blueprint for
desperately needed services. We must review the President's
preliminary budget proposal to ensure that it enforces the
legislation that has been passed as well as looking forward to
the future. I strongly support a VA which is committed to
providing accessible high quality medical care and other
veterans benefits and services in a timely and effective
manner. The heroic defenders of our democratic way of life
deserve nothing less.
I am looking forward to working with Mr. Principi to
restore confidence of so many of our veterans who lost faith in
the VA's ability to fairly and promptly respond to their many
needs. Of primary concern is the time it takes to process
benefit claims for compensation. Another concern is the long
list of veterans waiting to receive various services,
especially medical care. In recent years there were tremendous
staff reductions that resulted in reduced services. The
necessary steps must be taken to reverse this trend.
I also realize there are several additional issues that are
a concern to America's heroes. The National Defense
Authorization Act for Fiscal Year 2001 established a new
Department of Defense (DoD) benefit for military retirees over
age 64 who have Medicare coverage. We must work with DoD to
ensure our veterans are properly served.
I expect a healthy and sometimes controversial debate
related to the 2002 Department of Veterans Affairs budget
submission. Because of the proposed increase from the FY01
appropriation, this budget should help enforce our commitment
to our Nation's veterans. In order to do that we must recognize
the tough fiscal decisions that must be made, and work hard to
find the most cost effective ways to provide high quality
services.
As a fiscal conservative, I believe it's critical to keep
program funding consistent with a balanced Federal budget. In
the long run, a balanced budget will serve all Americans,
including our veterans. But, I also know that along with this
commitment to a balanced budget, comes the responsibility to
ensure our government honors its promises to our veterans.
In making policy decisions on veterans services, we must
ensure the highest standards of care and service delivery. When
we restructure the VA health care system to enhance our ability
to provide healthcare to eligible veterans, we must not forget
those living in underserved geographic areas and rural States.
In southern Idaho, the initial steps were taken and clinics
were provided in Pocatello and Twin Falls. But we must not
forget the large population of veterans in the north who must
drive over twelve hours to a clinic. A third clinic in Lewiston
would provide desperately needed access to essential services.
I look forward to hearing from our representatives today.
As the Congress continues to work on addressing the President's
budget, the information from our witnesses will be crucial in
providing ways to improve the delivery of services and benefits
to our Nation's veterans.
In closing, Mr. Chairman, there is no way to over emphasize
the honor and respect this Nation owes the military men and
women who sacrificed so much. I look forward to working with
all of our veterans service organizations who continue to
contribute to the long-range vision for the Department of
Veterans Affairs.
Senator Thurmond. Thank you for your kind words.
Senator Wellstone. Mr. Chairman, thank you for your
resolution. I did not thank you for your resolution earlier.
And to Senator Thurmond, thank you.
Senator Thurmond. Thank you very much.
Chairman Specter. Since we have a very crowded agenda, I
have two votes stacked at 11, and Secretary Principi would like
to speak to the American Legion at 11, we will proceed at this
time.
Mr. Secretary, we note that the President has submitted a
total figure of $23.4 billion for fiscal year 2002, which is an
increase of $1 billion from fiscal year 2001. We do not have
any specification or details. We all know that we are looking
at a very sacred obligation to America's veterans at a time of
escalating cost and an aging veterans population.
We turn to you at this time.
STATEMENT OF HON. ANTHONY J. PRINCIPI, SECRETARY, U.S.
DEPARTMENT OF VETERANS AFFAIRS ACCOMPANIED BY: THOMAS
GARTHWAITE, MARK CATLETT, JOSEPH THOMPSON, AND ROGER RAPP
Mr. Principi. Thank you, Mr. Chairman. May I proceed with a
short opening statement, or would you prefer, in the interest
of time, to----
Chairman Specter. Your full statement will be made a part
of the record, and a short opening statement would be fine.
Mr. Principi. Thank you, Mr. Chairman, and members of the
committee. Congratulations, Senator Thurmond, on this very
distinguished naming of you as Chairman Emeritus of this great
committee. I applaud you, sir, for your service to our Nation.
It is good to be before the members of the committee. We
are requesting more than $51 billion for veterans' benefits and
services--$28.1 billion for entitlement programs, and $23.4
billion for discretionary programs such as medical care, burial
services, and the administration of veterans' benefits. Our
budget increases VA's discretionary funding by $1 billion or
4.5 percent over the fiscal year 2001 level. With an increase
in medical care collections which will remain with the VA of
approximately $200 million, this brings the total increase in
discretionary spending to $1.2 billion or 5.3 percent.
Although all of the specifics of this increase are not
quite worked out, I would like to give you a quick overview of
how I intend to allocate those dollars.
The lion's share of the increase would go, of course, to
medical care. Approximately $1 billion or 4.8 percent would be
allocated to medical care. Of the $1.2 billion, 13 percent
would be for the Veterans Benefits Administration. That is an
increase of 13 percent or $134 million to allow us to get a
handle on this enormous crisis we face in the claims backlog.
An 11-percent increase, approximately $12 million, would be for
the National Cemetery Administration to continue our expansion
of National Cemeteries and to make a downpayment on the backlog
of repair and maintenance to bring our cemeteries up to the
status of national shrines. And, we would make our first
investment in capital infrastructure a 20-percent increase over
the 1991 levels of $78 million for major construction.
The budget ensures veterans will receive high-quality
health care, that we will keep our commitment to maintain
veterans' cemeteries as national shrines, and that we have the
resources to tackle this ever-growing claims situation.
The President promised a top-to-bottom review of our
benefits claims processing. He has designated this area as a
key budget initiative and I have made it my most important
priority. I know you share our commitment to restore the
confidence of many veterans who have lost faith in our ability
to provide timely and quality evaluations of their claims.
This requests fully implements the new legislation that
strengthens VA's ``duty to assist'' role in helping veterans
prepare their claims. We will be hiring 800 new people in our
Veterans Benefits Administration; 100 of the 800 would be for
our educational processing, 700 would go to rating claims in
the disability compensation and pension area.
Additional resources will be coupled with a proactive
approach to solving problems. I plan to establish a task force
this month that will address claims processing and developing
hands-on, practical solutions.
Our future approach to benefits delivery will incorporate a
paperless technology. The Veterans Benefits Administration
plans to consolidate the aging data centers into VA's core data
center in Austin, TX. This is an important first step in
realizing our vision for the future.
For veterans' health care, the budget request reaffirms our
primary commitment to provide high-quality health care for
service-connected disabilities or veterans with low incomes who
really have no other option for health care. VA provides
important specialty care and we need to ensure that we are
funding spinal cord injuries, Post-Traumatic Stress Disorder,
issues related to homelessness, mental health, drug and alcohol
abuse treatment programs, to ensure we are in compliance with
the Millennium Act and we are maintaining capacity at 1998
levels to provide for the specialized treatment and
rehabilitative needs of disabled veterans, including veterans
with spinal cord dysfunction, blindness, amputations, and
mental illness, within distinct programs or facilities of the
Department.
We also will be convening a task force to take a look at
how our health care system interrelates with the Department of
Defense, and to see how we can bring down the barriers between
the two systems so that they can work closer together in
partnership.
In our National Cemetery System, as I have indicated, we
are increasing the Cemetery System's budget 11 percent. We have
a lot to do to restore the situation in our National Cemeteries
with regard to repair and maintenance.
In view of the time, Mr. Chairman, I will submit the rest
of my statement for the record. Thank you very much.
[The prepared statement of Mr. Principi follows:]
Prepared Statement of Hon. Anthony J. Principi, Secretary, U.S.
Department of Veterans Affairs
Mr. Chairman, and members of the Committee, good morning. Thank you
for inviting me here today to discuss the President's FY 2002 budget
proposal for the Department of Veterans Affairs.
As you know, the President released his budget blueprint on
February 28, 2001. Additional information regarding specific funding
levels for each of our programs will be provided early next month. I
look forward to addressing the details of our request at that time.
Until then, I am pleased to discuss the overall budget request for VA
and my priorities for the next fiscal year.
We are requesting more than $51 billion for veterans' benefits and
services: $28.1 billion for entitlement programs and $23.4 billion for
discretionary programs, such as medical care, burial services, and the
administration of veterans' benefits. Our budget increases VA's
discretionary funding by $1 billion or 4.5 percent over the FY 2001
level. With an increase in medical care collections of approximately
$200 million, this brings the total increase to $1.2 billion or 5.3
percent.
The budget ensures veterans will receive high-quality health care,
that we will keep our commitment to maintain veterans' cemeteries as
national shrines, and that we will have the resources to tackle the
challenge of providing veterans more timely and accurate benefits
claims determinations.
The President promised a top-to-bottom review of our benefits
claims processing. He has designated this area as a key budget
initiative and I have made it one of my top priorities. I know you
share this Administration's commitment to restore the confidence of
many veterans who have lost faith in VA's ability to fairly and
promptly decide their benefits claims.
Mr. Chairman, as we all know, VA is not completing work on benefits
claims in as timely a manner as our veterans deserve. I am proud to say
this budget will rejuvenate VA's efforts to process compensation claims
promptly and accurately.
This request fully implements new legislation that strengthens VA's
``duty to assist'' role in helping veterans prepare their claims. It
also will enable us to carry out the new policy of adding diabetes to a
list of presumptive conditions associated with exposure to herbicides.
The 2002 budget provides additional staffing for these efforts.
Additional resources will be coupled with a proactive approach to
solving problems. I plan to establish a task force that will address
claims processing and develop hands-on, practical solutions.
Our future approach to benefits delivery will incorporate a
paperless technology. The Veterans Benefits Administration plans to
consolidate its aging data centers into VA's core data center in
Austin, Texas. This is an important step in realizing our vision for
the future.
For veterans' health care, the budget request reaffirms our primary
commitment to provide high-quality medical care to veterans with
service-connected disabilities or low incomes. VA provides
comprehensive specialty care that other health care providers do not
offer, such as services related to spinal cord injury, Post Traumatic
Stress Disorder, prosthetics and addiction programs. I am proud of our
unique accomplishments and will insist on full funding to continue our
leadership role in these areas.
We recognize the need to improve access to health care for eligible
veterans. The budget supports the President's new health care task
force, which will make recommendations for improvements. The task force
will be comprised of representatives from VA and the Department of
Defense (DoD), service organizations, and the health care industry.
The budget request also ensures that our National Cemeteries will
be maintained as shrines, dedicated to preserving our Nation's history,
nurturing patriotism, and honoring the service and sacrifice of our
veterans. Funding will be used to renovate gravesites and to clean,
raise and realign headstones and markers.
Mr. Chairman, our 2002 budget is not simply a petition for
additional funding. It also reflects opportunities for cost savings and
reform. VA will do its part to ensure the most efficient use of limited
resources, while maintaining the highest standards of care and service
delivery.
The National Defense Authorization Act for Fiscal Year 2001
established a new DoD benefit for military retirees over age 64 who
have Medicare coverage. These retirees will be able to use their own
private doctors for free care and receive a generous drug benefit.
Currently, 240 thousand of these retirees are enrolled in VA's health
care system. Our budget assumes that 27 percent of them will switch to
the DoD benefit in 2002, which shifts $235 million in VA medical
liabilities to DoD.
This recent legislative change underscores a critical need for
better coordination between VA and DoD. The Administration will seek
legislation to ensure DoD beneficiaries who are eligible for VA medical
care enroll with only one of these agencies as their health care
provider. We will work with DoD to avoid duplication of services and
enhance the quality and continuity of care.
Restructuring efforts in our health care system will continue in
2002. VA has begun an infrastructure reform initiative that will
enhance our ability to provide health care to eligible veterans living
in underserved geographic areas. Savings from this effort will allow us
to redirect funds from the maintenance of underused facilities to
patient care. As we await the results of this assessment--referred to
as ``CARES''--we will continue to expand sharing agreements and
contracting authorities with other health care providers.
The budget also includes legislation for several proposals that
will yield mandatory savings totaling $2.5 billion over the next ten
years. Most of these proposals will extend previously enacted mandatory
savings authorities that would otherwise expire over the next several
years.
Finally, we will continue to reform our information technology. New
technology offers VA opportunities for innovation. It also offers a
means to break down the bureaucratic barriers that impede service
delivery to veterans, divide VA from other Federal government
departments, and create inefficiencies within VA itself.
I have gone on record as stating that I will not initiate any new
technology-related activities until an integrated strategy for
addressing our information systems and telecommunications is developed.
We will continue to improve coordination among our three
administrations to implement a technology plan that serves veterans
first. Reforms will include developing a common architecture,
establishing common data definitions, and coordinating systems across
VA.
Mr. Chairman, that concludes a general overview of VA's 2002 budget
request. I thank you and the members of this Committee for your
dedication to our Nation's veterans. I look forward to working with
you. My staff and I would be pleased to answer any questions.
______
Response to Written Questions Submitted by Hon. Arlen Specter to
Anthony J. Principi
health care issues
Question 1. The Veterans Health Care Eligibility Reform Act of 1996
requires that VA maintain capacity to treat special needs populations
such as veterans with spinal cord injuries, blindness, mental illness,
and homeless veterans. Will the current funding proposal be adequate to
continue timely and quality health care for these special populations?
Answer. Yes, the current funding proposal will be adequate to
continue timely and quality health care for these special populations.
Question 2a. Over the past few years, VA has been transformed from
a hospital-based provider to one that relies on ambulatory settings to
meet veterans' needs. This surely assists VA in meeting the primary
care needs of veterans--but I am concerned that specialty care is being
compromised. Can VA provide adequate mental health services in an
outpatient setting?
Answer. VA has been providing the bulk of its mental health
services on an outpatient basis for many years. In the 1960's VA
pioneered the development of partial hospitalization programs such as
Day Hospitals and Day Treatment Centers, as supplements to traditional
outpatient clinics, in an effort to keep more VA patients in the
community. It is true that in recent years more of our mental health
care has shifted to outpatient settings. In FY 1994, VA served 125,045
veterans in inpatient mental health units, 23 percent of the 541,261
mental health patients seen that year. In FY 2000, only 75,745 veterans
had inpatient mental health care, 11.2 percent of the 678,932 seen that
year. Although VA is increasing its outpatient mental health services
for veterans, nonetheless, we are still mindful of those veterans whose
severity of illness requires inpatient care. It should also be noted
that nearly 99 percent of veterans who received inpatient mental health
care in FY 2000 also received outpatient mental health services.
VA has been working to enhance our outpatient capabilities for our
most severely mentally ill veterans through the development of Mental
Health Intensive Case Management (MHICM) programs, which are designed
help these patients adapt to community life. Forty of these programs
are now operating, and we are currently engaged in a system-wide
increase in MHICM activity. We also are working to increase the mental
health capability of our Community Based Outpatient Clinics (CBOCs),
which are designed to bring health care closer to where veterans live.
Currently, about 50 percent of CBOCs have mental health capability, and
we are striving to increase that percentage. Furthermore, we are
developing ways to enhance the involvement of mental health staff in
medical and geriatric primary care settings to provide care to veterans
who need mental health services in the familiar surroundings of the
primary care clinic.
Question 2b. Can it provide adequate blind rehabilitation services
in an outpatient setting?
Answer. VA cannot provide comprehensive blind rehabilitation in an
outpatient setting. Limited portions of blind rehabilitation programs
can be met in an outpatient setting, but early preliminary data from
outcome measures indicate that VA residential programs are far superior
to all other models of blind rehabilitation, including state, private,
and VA outpatient models. Nonetheless, as the number of older veterans
increases, VA's Blind Rehabilitation Outpatient Specialists (BROS) may
play a more significant role in blind rehabilitation. Currently, VA has
only 19 BROS, and they have proven to be most effective in
supplementing the services provided by the residential programs.
Question 3. There are close to 500,000 veterans service-connected
for mental illness. Over the past five years, VA spending on mental
health care has declined by 8 percent. To what do you attribute this
decline in spending? Has VA become a markedly more efficient provider
of mental health services? Or is VA neglecting the need of veterans
with mental illnesses?
Answer. In 1996, there were 456,527 veterans service-connected (SC)
for a mental health disorder. Of these, 167,845 (37 percent) were
receiving care in VA facilities. By FY 2000, there were 452,890
veterans SC for a mental health disorder. Of these, 191,243 (42
percent) were treated in VA facilities. This reflects a 14 percent
increase in the number of veterans treated in VA facilities for an SC
mental health disorder.
For patients with a serious mental illness, VA has shifted from a
system of care that heavily relied on hospital care to a comprehensive
continuum of care, ranging from outpatient care in the community
through partial hospitalization settings, residential care, and
intermediate hospital settings, to high intensity hospital care. Our
clinicians have found that many patients with serious mental disorders
could be treated for much shorter lengths of stay, and in intermediate,
residential, or supportive community settings. In these settings,
patients have a larger participation and role in their treatment and
more freedoms than in often over-protective hospital settings.
Over the last five years, we have seen an 8 percent increase in the
number of veterans with a mental illness who were either hospitalized
or received significant outpatient mental health treatment (6 or more
visits per year). This has been accompanied by an 8 percent decrease in
specialized mental health costs. The lower mental health costs most
likely reflect two factors: (1) a 33 percent decrease in the number of
psychiatric inpatients, from 113,719 in FY 1996 to 75,745 in FY 2000;
and (2) a 39 percent decrease in overall average length of stay, from
27.3 days in FY 1996 to 16.6 days in FY2000.
Thus, the decreased costs actually reflect a more modern and
effective approach and philosophy for treating veterans with mental
disorders, rather than a neglect of their needs.
Question 4. While the total veteran population is declining, the
female veteran population is rising; now there are over 1.2 million
women veterans. Even so, approximately one-third of VA hospitals do not
have women's clinics. Does this budget contain funds to increase
services and provide appropriate facilities for women veterans? If not,
should it?
Answer. With the exception of the elderly veteran population,
female veterans are the fastest growing segment of the veteran
population. In FY 2000, women veterans comprised roughly 1.4 million of
the Nation's 26 million veterans, or approximately 5.5 percent. In
facilities without formal ``women's clinics'', gender-specific health
services are provided by women's health personnel in women's health
specialty clinics, while primary and preventive medicine services are
performed by gender-neutral primary care teams. VA has acknowledged the
growing population of women veterans by establishing Women Veterans
Health as a special program with designated headquarters and field
staff. The needs of women veterans are included in the VERA model in
the FY 2002 budget. Infrastructure challenges related to privacy exist
and are being addressed.
Question 5a. VA leads the nation--as it should--in the treatment of
Post Traumatic Stress Disorder (PTSD). I want VA to continue to so lead
the nation. Can VA effectively treat PTSD in an outpatient care
setting?
Answer. Yes. Consistent with all health care systems, the
preponderance of care for PTSD can be and is being provided effectively
on an outpatient basis.
Question 5b. Is this an area where VA must continue to provide care
on an inpatient basis?
Answer. Yes. Although the preponderance of care can be provided
effectively on an outpatient basis, VA is committed to maintain
appropriate inpatient capacity to provide clinically-indicated and
necessary treatment.
Question 5c. Can VA adequately provide needed care for PTSD under
this budget proposal?
Answer. Yes. Public Law 106-117 provided $15 million for new
specialized PTSD and Substance Use Disorder care in VHA. These funds
were awarded through a competitive Request for Proposal (RFP) process.
Approximately $5.5 million of this amount was distributed to fund new
PTSD treatment programs. VISNs received this funding with the
requirement to maintain these services through FY 2002.
Question 6. During the appropriations process in the Senate last
year, Chairman Bond of the Senate VA-HUD Appropriations Subcommittee
placed a moratorium on new major construction projects until VA showed
positive movement implementing its Capital Asset Realignment for
Enhanced Services (``CARES'') process. Where does VA now stand on
``CARES''? Will VA need to proceed with any major construction this
year-prior to completion of the CARES process?
Answer. The CARES contractor, Booz-Allen & Hamilton, has projected
that they will complete their CARES Report on VISN 12 by the end of
May. I am to receive recommendations in June. During the May-July
period, we will be consulting with stakeholders, evaluating the overall
CARES process, and applying lessons learned from the Phase I pilot to
the Statement of Work for the Phase II markets. Since the remaining 21
VISNs will follow the process and methodology developed in Phase I, VA
is carefully working through the process the first time. Adjustments to
the database and communications portions of the task have been
required, and it is anticipated that more adjustments to the CARES
process will be made following the lessons learned overview of Phase I.
Phase II is targeted to be started in summer 2001, and Phase III in
summer 2002. Phase II and III will be completed a little more than one
year after initiation.
VA will need to proceed with select major construction projects
prior to the completion of the CARES process, especially those
addressing safety-related issues for our patients and employees. For FY
2002, we are proposing an emergency electrical project at Miami, FL, in
the major construction account. Over the next several years, while the
CARES studies are underway, increased funding for such projects will be
required. In particular, projects to correct seismic deficiencies
should proceed at those facilities we expect to be identified as health
care sites in the CARES studies.
Other needed improvements and renovations at over 4000 aging
buildings at VA medical centers, national cemeteries and regional
offices will be addressed through the minor construction program. Our
FY 2002 request includes $178.9 million for minor construction
projects, $25 million of which is dedicated to CARES projects.
Question 7. The Veterans Millennium Health Care and Benefits Act of
1999 requires VA to provide nursing home care to all veterans who are
70 percent or more service-disabled if they seek--and need--such care.
At the time of enactment of this mandate, VA advised the Committee that
it might have problems implementing this charge. Has VA had such
problems? Are any ``70-percenters'' who need nursing home care being
denied such care by VA? Will they be under this budget request?
Answer. VA has not had difficulty in implementing the mandate to
provide nursing home (NH) services to veterans who need such care for a
service-connected disability or who have a disability rated 70 percent
or greater and need NH care. VA estimates that approximately half of
the service-connected veterans rated 70 percent or higher who are
eligible for NH care under this Act receive their care through one of
the three VA-sponsored NH Programs. The budget request for FY 2002
contains sufficient funds to meet the NH care needs of all the service-
connected veterans covered by this statute who might seek NH services
from VA.
Question 8a. Last year, VA announced its ``30-30-20'' initiative--a
program designed to reduce patients' waiting times by assuring that a
veteran would receive an initial visit at a VA facility within 30 days
of requesting enrollment; see a specialist within 30 days of referral;
and been seen by a provider within 20 minutes of arriving at a VA
facility. Despite this initiative, veterans are experiencing waiting
times that are unacceptable--for example, in Lebanon, Pennsylvania,
veterans seeking to enroll for VA care are forced to wait up to 7
months or more before they can see a primary care provider. Are the
goals of the ``30-30-20'' initiative realistic?
Answer. VHA's goal is that clinic wait times will be significantly
reduced over several years. The specific targets established for 2003
are:
90 percent of non-urgent primary care patients scheduled
within 30 days.
90 percent of non-urgent specialty care referrals (eye
care, audiology, orthopedics, cardiology, urology) scheduled within 30
days.
90 percent of patients seen within 20 minutes of their
scheduled appointment time.
I believe that the 30-30-20 goals are very aggressive and
benchmarks are not available for access and waiting times goals in
other health care systems. However, VA believes that these goals are
important and are consistent with veteran expectations, and I am told
that they are obtainable over time. Performance data will soon be
available showing the progress we are making towards meeting these
specific targets. We will begin monitoring our progress, nationally and
by medical center, in June. I will be receiving regular reports, which
will be available to you, as well as all of the members of our
authorizing and appropriations committees.
Performance Data on Access--July 2001
VHA's Fiscal Year (FY) 2002 budget submission included goals for
clinic wait times:
90% of enrolled veterans will be able to obtain a non-
urgent patient appointment with their primary care provider or other
appropriate provider within 30 days.
90% of patients will be able to obtain a non-urgent
appointment with a specialist within 30 days of the date of referral.
In May of 2001, 87% of all primary care appointments were scheduled
within 30 days of the desired date and 82% of specialty clinic
appointments were scheduled within 30 days of the desired date.
Attachment A includes longitudinal data on average clinic waiting
times (for non-urgent, next available appointments) and best
demonstrates the dramatic improvements made by VHA over the last year.
attachment a
Average Waiting Time To Next Available Appointment--2000
----------------------------------------------------------------------------------------------------------------
VHA Apr May Jun Jul Aug Sep Oct Nov Dec
----------------------------------------------------------------------------------------------------------------
Prim.................................... 65.1 64.4 63.8 62.8 61.8 60.4 60.5 58.2 58.5
Eye..................................... 101.0 94.2 93.8 88.0 90.1 83.7 86.7 89.8 89.1
Audio................................... 49.9 50.1 52.1 50.2 47.1 40.3 43.8 44.4 47.1
Cardio.................................. 51.7 53.0 48.0 47.0 45.4 44.5 44.3 43.6 44.7
Ortho................................... 44.6 46.7 44.8 42.0 44.6 40.1 43.3 43.4 43.1
Uro..................................... 80.7 78.7 74.1 72.5 69.3 69.1 67.8 71.6 74.1
----------------------------------------------------------------------------------------------------------------
Average Waiting Time To Next Available Appointment--2001
----------------------------------------------------------------------------------------------------------------
May 01-Apr 00
VHA Jan Feb Mar Apr May -----------------
Dif % Dif
----------------------------------------------------------------------------------------------------------------
Prim.................................................. 56.1 54.6 44.4 42.6 42.6 -22.5 -34.6
Eye................................................... 80.6 83.7 72.9 72.3 69.6 -31.4 -31.1
Audio................................................. 43.9 45.3 39.7 38.2 40.4 -9.5 -19.0
Cardio................................................ 41.6 40.6 40.4 37.5 41.9 -9.8 -19.0
Ortho................................................. 45.3 40.6 39.7 39.2 38.3 -6.3 -14.1
Uro................................................... 77.1 67.8 52.7 53.0 52.8 -27.9 -34.6
----------------------------------------------------------------------------------------------------------------
VHA's FY 2002 goal for in-clinic waiting times is:
90% of patients should be seen within 20 minutes of the
scheduled appointment time.
The time that patients wait to see their provider has greatly
improved VHA-wide. The chart in Attachment B shows the percentage of
patients who report waiting longer than 20 minutes beyond their
appointment time to see their provider. The decreasing percentage
demonstrates the clear performance improvement. (Source: Veterans
Customer Satisfaction Surveys 1995-2000.)
attachment b.--percent of outpatient respondents who report waiting >20
minutes to see their provider
Question 8b. If so, what financial resources will be devoted to
implementation of the ``30-30-20'' plan for fiscal year 2002?
Answer. An increase of $164 million is requested in the FY 2002
budget for this purpose. According to the Networks financial plans,
this increase would be in addition to an estimated $294 million
recurring in the base and would increase the program funding level to
$458 million in FY 2002.
Question 8c. When can veterans expect to see results?
Answer. I too continue to hear complaints from veterans and others
about excessive clinic waiting times. However, I am told that
improvements are being made. Between April 2000 and December 2000,
primary care clinic times decreased by ten percent and specialty clinic
waiting times decreased by approximately nine percent. It is important
to note that these decreases were accomplished at a time when the total
number of VHA outpatient visits was significantly increasing due to
greater demand for outpatient care.
Of equal or possibly greater importance are patients' perceptions
of waiting times. VHA's most recent customer satisfaction survey (FY
2000) shows that 80 percent of patients report appointments scheduled
at times that are convenient to them. Similarly, 85 percent of patients
report waiting less than 30 minutes to be seen by their providers.
Specifically, at Lebanon VAMC, information from patient interviews
with veterans during the past several months indicates that the
majority of veterans are enrolling because Medicare HMO's are pulling
out of central Pennsylvania. This dramatic recent increase in
enrollees, coupled with an 11 percent general increase in enrollees
using the facility in FY 2000, has resulted in the establishment of the
current waiting list.
To deal with this issue, the medical center has initiated
recruitment of 18 additional Primary Care staff positions. These
positions will be located where the need is greatest. An additional
primary care team (M.D., Nurse Practitioner, RN, LPN, and two clerks)
is being added to the Lebanon VA Medical Centers. An additional
Physician Assistant, LPN, and clerk will be added at both the Lancaster
and Berks CBOCs. Recruitment of staff for the newly approved York
County CBOC (M.D., Physician Assistant, RN, LPN, and two clerks) should
allow CBOC opening in May 2001. The Lebanon VA Medical Center has
briefed area veterans' organizations, County Directors of Veterans
Affairs, and congressional offices on a bimonthly basis on the status
of this waiting list. The medical center also has provided stakeholders
an opportunity to provide input and to gain an understanding of why the
waiting list has occurred and what specific strategies are being
implemented to eliminate the list. These briefings have fostered a
clear understanding of the situation and have enlisted the
stakeholders' unanimous support.
Recognizing these indications of improvement, complaints about
waiting times are consistent at all of my visits to our medical
facilities. As we monitor these standards, we will ensure accurate
reporting with appropriate oversight by the Inspector General and other
auditing offices.
Question 9a. It is reported that the Nation--and VA--will soon
experience a significant nursing shortage. How can VA assure adequate
nurse staffing?
Answer. VA closely monitors nursing staff demographics, gauging the
sufficiency and availability of nursing staff at a national level. In
addition, every effort is made to support VAMCs as competitive
employers in local communities. VA has begun comprehensive policy
development related to nurse staffing, including competitive pay,
recruitment, and retention bonuses, work environment, occupational
health and safety, as well as education initiatives and a loan
repayment program.
Question 9b. Do you believe that VA has a role to play in helping
to recruit more young people into the field of nursing?
Answer. VA facilities do have a role in recruiting more young
people into the field of nursing. One such successful program is the VA
Cadet program implemented at VA Medical Center Salem, VA. This program
brings high school students into the VAMC for educational and volunteer
experiences in nursing. VA would welcome the opportunity to participate
in a broader, national effort to increase the number of individuals
choosing nursing and other health care profession careers.
Question 9c. Does VA have any plans or programs in place to help
sustain the proper level of nursing staff?
Answer. VA has initiated the Nursing Workforce Planning Group with
the directive to identify the impact of the predicted nursing shortage
on VA and to recommend strategies and actions to maintain a qualified
nursing workforce in VA. This multidisciplinary group is engaged in a
number of comprehensive activities that will lead to immediate, short-
range, and long-range activities. Currently, VA operates the Veterans
Affairs Learning Opportunities Residency Program (VALOR), an internship
program aimed at recruiting high-performing baccalaureate students for
specialized clinical experiences and eventual hire by VA facilities.
VA's National Nursing Educational Initiative (NNEI) has made $50
million available to registered nurses who are obtaining baccalaureate
or higher degrees and the Employee Incentive Scholarship Program (EISP)
provides funds to VA employees enrolled in programs leading to a degree
in nursing.
Question 10. You have stated that you are reviewing the costs
associated with providing care to so-called ``Priority 7'' patients-
those who are not service-connected, poor, or entitled to priority
enrollment on other grounds. As I understand it, ``Priority 7'' now
comprise 20 percent of VA's patient population--up from only 4 percent
just five years ago. VA asked for ``eligibility reform''--the change in
the law that has made the full continuum of VA care available to even
non-``priority'' patients. In so doing, VA led Congress to believe that
it would be able to handle such an influx of patients--due, in part, to
the fact that VA would be able to collect, and retain, insurance
reimbursements and co-payments from such patients. Is that no longer
the case?
Answer. I will make the enrollment decision for FY 2002 later this
year. If availability of sufficient resources becomes an issue,
different policy decisions and options will need to be considered.
Enrollment of Priority 7s is anticipated for FY 2002 with the
recognition that fewer will be treated by the VA than in FY 2001 due to
TRICARE for Life and higher copayments for Priority 7 veterans we
expect to implement this fall. However, let me assure you that the FY
2002 budget request reaffirms our primary commitment to provide high-
quality medical care to veterans with service-connected disabilities or
with low income.
Question 11. I led the fight some years ago for legislation
allowing VA to retain insurance company collections so that VA would
have an incentive to pursue such reimbursements. I then followed up
with legislation allowing the collecting VA Medical Center to retain
any and all funds collected by its staff. Even so, should I conclude
that there are not sufficient incentives for VA to pursue such funds?
What else can Congress do to energize collections? What will you do to
energize collections?
Answer. VA is committed to improving revenue and collections and
increases are already occurring. For the first half of FY 2001, monthly
collections have been 50 percent ahead of last year. For FY 2002,
increased co-payments for pharmacy, long-term care, and outpatient care
will provide additional revenue. Specific proposals for improvements to
increase the collections from insurance companies will be identified
soon. I am directing VHA to provide a detailed plan in 90 days to
improve dramatically the documentation and coding by physicians,
identification of insurance, and identification of changes in the
billing and collections process. These will be implemented in FY 2002
with accountability for these improvements to the local facility and
individuals as necessary.
Question 12. The VA State Home Grant Program--a partnership that
allows the Federal Government and the States to work together to
provide high quality long-term care to veterans--has been a major
success in Pennsylvania and throughout the U.S. Will this budget
proposal allow this program to grow? What are your plans for the State
Home Grant Program?
Answer. Yes. The funding request in 2002, when combined with
unobligated funding from previous years' appropriations, represent a
continued commitment to support VA-sponsored nursing home care through
less expensive State and community programs.
The Veterans Millennium Health Care and Benefits Act (Public Law
106-117) required VA to revise the State Home Construction Grant
regulations. Interim regulations will be issued in June and in place
for the FY 2002 grant funding cycle. The revised methodology provides a
higher priority for renovation projects with the highest priority for
projects that remedy life safety problems. The new methodology also
requires that existing VA and community nursing home beds be considered
when ranking bed-producing projects for funding.
Question 13. The Veterans Millennium Health Care and Benefits Act
of 1999 requires VA to pay for veterans' emergency room visits in
certain circumstances--starting in May 2000. Even so, I am advised VA
has not implemented this mandate and that it is collecting information
from veterans about their emergency room visits. Why is VA collecting
information rather than paying bills? When will VA implement this
statutory mandate?
Answer. Section 111 of the Veterans Millennium Health Care and
Benefits Act of 1999 required VA to prescribe regulations to establish
the maximum amount payable and to delineate the circumstances under
which payments may be made. The implementing regulations for the
emergency care provision were completed and forwarded to OMB for review
in November 2000. On February 3, VA withdrew all regulations to allow
my staff to review any regulations developed by the previous
administration. The revised regulations were returned to OMB on April
11, 2001. Among revisions made to the proposed rules prior to their
resubmission to OMB was the addition of a requirement that a claimant
must certify, in writing, that a claim meets all of the conditions for
payment and that he or she is aware of the criminal penalties for
obtaining payments with the intent of defrauding the United States.
Because regulations were not published prior to the May 2000
effective date, VA health care facilities were advised in July 2000 to
begin tracking and documenting claims that may meet the criteria of the
emergency care provisions. It is anticipated that these implementing
regulations will become effective before the end of this year. Once
final regulations are published, VA will retroactively reimburse any
claimant back to the effective date of the legislation if the veteran
meets the eligibility requirements set forth in the regulation.
Question 14a. The operation of VA's Veterans Equitable Resource
Allocation (VERA) system has raised many concerns among members of this
Committee. As I understand it, this funding allocation formula does not
take into account the number of ``Category 7'' veterans that a given
Veterans Integrated Service Network (VISN) is treating. As a result,
areas like Pennsylvania that have many ``Category 7'' veterans who are
coming to VA seeking care are squeezed by this formula. Do you
anticipate any changes in the methodology used in calculating resource
allocation among the various VISNs to rectify this situation?
Answer. VERA provides funding for Priority 7 veterans who are
classified in the Complex Care category. VHA is currently examining the
issue of providing workload and funding credit for Basic Care Priority
7 veterans in VERA. This issue will be carefully considered and will be
influenced by the improvement in cost recovery from insurance companies
and Priority 7 veterans to be outlined in the detailed plan mentioned
in my response to question 11.
Question 14b. Do you think it is right for VA to open outpatient
clinics and stimulate demand for VA care and then to deny--of at least
delay unreasonably--such care when veterans seek to enroll?
Answer. The relationship of the large increase in Priority 7
veterans and the complaints on waiting times that I am hearing will be
evaluated. There will be no new CBOCs approved for opening until I have
approved a policy on placement of CBOCs. VHA is committed to ensuring
that patients do not experience delays in receiving care and, to that
end, has undertaken significant initiatives to reduce patient waiting
times. We will continue to monitor and evaluate our CBOCs and patient
waiting times.
Question 15. It has been proposed that VA modify VERA to account
for the fact that veterans who are classified as ``priority'' patients
on the basis of a ``means test'' might properly have their ``means''
judged by different measures in different parts of the country because
of variances in the costs of living from place to place. Does this
proposal make sense to you? Is VA considering it?
Answer. Linking a veterans ``means'' to geographic cost-of-living
variances might serve veterans better than the current one-tier test.
However, reviews performed in 1989 and 2000 indicate that it would pose
a number of challenges for the Department. For example, veterans living
in close proximity of one another, and receiving health care at the
same facility, could potentially have their ``means'' judged
differently, even though they may have identical or similar income.
Another challenge would be how to properly handle veterans who
relocate at certain times of the year to another State. VA would need
to decide which county or region to use in calculating their ``means.''
Lastly, since VA currently uses a one-tier test to determine a
veteran's means, this proposal would have a major impact on VA's
Information System. I believe we must study this proposal carefully and
evaluate the impact it would have on VERA against the potential
benefits veterans may derive from this or a similar proposal. The Under
Secretary for Health has convened a group to examine the impact of this
proposal on VERA as well as on VA's Information System. Upon completion
of their review, I will submit a full report of their findings to the
Committee on Veterans' Affairs.
Question 16a. Advances in pharmaceutical science have assisted VA
in its transition from hospital-based to an outpatient care-based
health care provider. Along with these advances, VA's cost for
medications has increased dramatically--making pharmacy costs a large
percentage of total medical care expenditures. Please describe the
strategies VA has undertaken to keep pharmacy costs under control.
Answer. VA supported the passage of Public Law 102-585, which gives
VA, DoD, the Coast Guard, Public Health Service, and the Indian Health
Service pricing for many high cost medications base-lined at the non-
federal average manufacturer's price, minus 24 percent. VHA also
supported a pilot allowing a commercial vendor to supply drugs to VA
medical facilities. This eventually led to closure of VA's historic
depot system. By closing the depots, VA moved from expending $18
million annually in 1992 dollars for drug warehousing and distribution
to receiving approximately $50 million annually today for procuring
most of its pharmaceuticals through a commercial prime vendor--a
savings rate of approximately $68 million per year.
In 1992, the development of VA's national drug utilization database
began, which served as the foundation for the establishment, in 1995,
of a systems approach to pharmacy benefits management. National
contracts and FSS blanket purchase agreements directly linked to the
development and promulgation of pharmacological treatment guidelines
helped VA avoid nearly $778 million in unnecessary drug costs from 1995
through 2000. Pharmacy benefits management has contributed to VA's
ability to treat 500,000 new patients between 1995 and 2000, has
increased equitable access to needed pharmaceuticals through the
implementation of a national formulary process in 1997, and has driven
unit costs downward. VA's pharmacy benefit management process is driven
from the grass roots and receives substantial support from practicing
physicians across the system.
Question 16b. Are VA formulary policies adequate to keep costs down
while still assuring that VA patients get the best care possible?
Answer. Yes. VA's formulary policy is designed to manage costs and
provide quality care, while assuring access to medically necessary
drugs. VA's guiding principle for formulary management and the overall
management of the pharmacy benefit is to provide enrolled veterans with
``quality medical care at an affordable price.'' Operating within this
maxim, the decisions VA makes regarding the pharmaceuticals available
to treat veterans are driven by groups comprising 12 practicing
physicians and representatives from each of the 22 Veterans Integrated
Service Networks. These two groups determine the appropriate clinical
strategy at a given point in time, which then drives the contracting
process. VA's ability to determine an evidenced-based clinical strategy
that best fits the needs of veteran patients, solicit bids in selective
high-volume/high cost therapeutic classes, and then utilize the
contracted products has produced significant cost avoidance, while
increasing access to needed pharmaceuticals. The Institute of Medicine
(IOM) in its June 2000 report on VA's National Formulary Process
documented this outcome. The study by IOM and the preparation of the
report was mandated by language contained in the House Report (105-
610), which accompanied Public Law 105-276, the Fiscal Year 1999
Department of Veterans Affairs and Housing and Urban Development
Appropriations Act. A copy of the report is attached.*
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* Note: The information referred to has been retained in the
committee files.
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VA, through its Pharmacy Benefits Management Strategic Healthcare
Group, is committed to regular physician surveys on pharmacy benefits.
These surveys assess the perceived impact of our formulary policies on
access to appropriate pharmaceuticals and the quality of care. Two
surveys have been completed, and the results of these surveys are used
to inform and assist policy. The results of the first survey were
published in the March 2001 edition of the American Journal of Managed
Care.
Inasmuch as VA's national formulary system is dynamic, adjustments
are planned based upon recommendations from the above-referenced IOM
report and two General Accounting Office reports on the formulary
process (December 1999 and January 2001). However, in spite of the
success of VA's formulary system, outlays for pharmaceuticals are
expected to increase. The increases are being driven by utilization and
new technology.
Question 17a. Last year's Defense Authorization Act created a new
benefit dubbed ``TRICARE for Life'' by allowing military retirees over
age 64 to remain under DoD-funded care despite Medicare eligibility.
The Administration's budget proposal apparently assumes savings of $235
million in VA health care costs as a result of this legislation, based
on the assumption that military retirees who had lost TRICARE
eligibility at age 65 and who had come to VA for care will now stay
within DoD's TRICARE system. What is the basis for the assumption that
it will save $235 million? How did the Administration arrive at this
number?
Answer. The Administration estimated that approximately 27 percent
of military retirees who are age 65 or older and currently enrolled in
the VA health care system would voluntarily choose to shift their
medical care to the TRICARE system. The following figures were used in
the calculations:
64,540 enrollees at an average cost of $3,705 per enrollee
equal $239,120,700.
This amount is then reduced by the nearly $4 million in
collections that would otherwise have been anticipated for those
enrollees.
The net savings is, thus, approximately $235 million.
Question 17b. I am told that VA may request legislation to require
military retirees over age 64 to choose either VA- or DoD-provided
care. Is this so? Do you believe it is fair to require men and women
who have served 20 or more years and who, therefore, are eligible for
care under both systems to waive eligibility to either?
Answer. At this time the Administration has proposed legislative
language to allow DoD beneficiaries, who are also eligible for VA
medical care, to enroll with only one of those agencies for their
health care. Coordination within the Administration among OMB, DoD, and
VA has begun. More details in the proposal should be available soon.
White Paper--VA Requesting Legislation to Require Military Retirees
Over Age 64 to Choose VA or DoD Provided Care
Medical Sharing Office (176), June 2001
The President's Budget Message, ``A Blueprint for New Beginnings''
(February 28, 2001), proposed that DoD beneficiaries, who are also
eligible for VA medical care, enroll with only one of these Federal
government health systems as their health care program. This concept
has been under review at VA, DoD and the Office of Management and
Budget. DoD is considering proposing legislation for annual enrollment
for care in either health system to avoid duplication of benefits and
enhance continuity of care. VA is unable to provide an estimate on when
DoUs review will be completed.
In addition, improving coordination of VA and DoD health care will
be addressed by the ``President's Task Force to Improve Health Care
Delivery for Our Nation's Veterans,'' created by Executive Order on May
28, 2001. The task force will also identify ways to improve benefits
and services for veterans who are also military retirees. The Executive
Order states that the task force will issue an interim report in nine
months and a final report within two years.
Question 18. As you may know, I strongly support Federal
investments in medical and biological research, and I am pleased that
President Bush agrees that Federal funding of medical research must
increase dramatically. VA's research budget for FY 2001 is $350
million. Do you anticipate requesting that VA research funding be
increased in fiscal year 2002? If so, by how much?
Answer. An increase of $10 million is requested for the research
appropriation to reach a level of $360.237 million in FY 2002.
non health care benefits issues
Question 19. The President has promised a ``top to bottom'' review
of the disability claims process, and you, in your confirmation
testimony, announced that a task force would be created to put the
President's promise into effect. Has this task force yet been
appointed? When will it be? When will it conclude its deliberations?
Answer. On April 16, 2001, we held a preliminary meeting of the
special Claims Processing Task Force that will address claims
processing and develop hands-on, practical solutions to the challenges
we face. The 10-person task force, headed by retired Vice Admiral
Daniel L. Cooper, will examine a wide range of issues affecting the
processing of claims, from medical examinations and information
technology, to efforts to shrink the backlog and increase the accuracy
of decisions. The panel's final report is due to me in approximately
120 days.
Question 20a. In your testimony, you proposed a specific increase
in VBA spending to address the backlog in VA's disability claims
process.
Inasmuch as your task force has not yet, I believe, made
recommendations for reforms, how would you propose that this additional
money be spent?
Answer. Of the total VBA request, $775.5 million in total
obligations will fund the Compensation and Pension Program reflecting
an increase of $94.6 million over the FY 2001 current estimate.
Included in this total is $44.5 million dedicated to initiative
funding. Direct FTE levels for C&P increases by 863 for a total of
7,351 FTE in FY 2002. The majority of the increased FTE counters the
effects of recently enacted Veterans Claims Assistance Act and Diabetes
regulations. Our efforts are focused on effectively training these new
hires to ensure we continue in our mission to process claims more
efficiently and with greater accuracy. Continued support of initiatives
like the Training and Performance Support Systems, Benefits Payment
Replacement System (VETSNET Migration), Virtual VA, and the One VA
Telephone Access, moves VBA towards achieving its vision of processing
claims accurately and in a timely manner. We are committed to utilizing
our most recent information technology advances while pursuing an
aggressive strategy to address the current situation. Funding will
allow continued and deliberate actions to maintain current
achievements, invest in productive endeavors, and research enhanced
business practices. In addition to these initiatives, many of which
fall into the category of long-term process improvement efforts, I look
to the Task Force to recommend practical changes that will result in
immediate cycle time reductions.
Question 20b. Do you believe that your task force will necessarily
issue recommendations consistent with the proposal under which you
intend to spend that additional funding if it is granted to you?
Answer. Yes, I fully expect the task force recommendations will
support our budget request. However, if our current outline for
spending funds is not supported by the task force findings, we will
align resources to provide optimal service to veterans.
Question 20c. If you are now recommending very substantial
increases in VBA funding, what function do you intend your task force
to serve?
Answer. The kind of systemic challenges that exist and inhibit
timely and accurate claims processing need a top-management focus and a
plan of action that can be embraced at the Department level, and
supported through the ranks as an aggressive plan for long-term action.
I believe the task force can focus on such a plan and present me with
the blueprint for changes, which can improve our service in this area.
The short-term initiatives shown in the budget are necessary and will
have an impact in dealing with our current crisis, but we need to go
beyond that and fix this problem once and for all.
Question 21a. During your confirmation hearing, you stated that VA
had spent $30 million, since 1995, on information technology
resources--without noticeable improvements. Do you now believe that you
were wrong in suggesting that information technology spending had been
ineffective?
Answer. No. In my opinion, information technology spending has not
been as effective as it should be. I remain concerned that our IT
achievements have not lived up to expectations. I have stated in
previous testimony that we will not throw good money after bad. The
approach VBA is now taking as they proceed with the VETSNET program
illustrates the critical review to which I believe all major IT
expenditures must be subjected.
I have directed that before we proceed to a fully operational
status on VETSNET, we will conduct an independent audit of the overall
system. This audit will provide us with the assurance that this system
will meet all of the security, functional, and performance requirements
we have set for it. If it passes these tests, we will go forward with
its implementation on the current schedule. If not, we will develop a
plan to extend the life of the current systems and immediately begin
the development of a replacement system.
If this current version of VETSNET does not meet our needs for the
next several years, we will terminate its development. Conversely, if
it does meet our needs, we will not hold past failures against it, and
we will go into production with the system. I have been assured that
VETSNET is being developed in an open architecture to facilitate
eventual integration into a future system and that it should fit within
the framework of the Enterprise Architecture I have previously
discussed. That system will be part of an integrated, whole solution to
the needs of our veterans.
Question 21b. Despite this testimony just a few weeks ago, you now
propose a specific increase in VBA spending to address the issue of
backlogs in VA's disability claims process. Would any of this funding
be directed to information technology resources? If so, are you now
adopting a plan to expend funds on such resources in accordance with a
plan that, just a few weeks ago, you had criticized?
Answer. As I have previously stated, there will be no spending on
new IT initiatives until a comprehensive, integrated IT Enterprise
Architecture has been adopted.
Question 22a. The Veterans Benefits Administration (VBA) faces both
short-term and long-term challenges in addressing the backlog of
pending veterans claims for benefits. This budget proposal requests a
total increase of only $1.0 billion--the lion's share of which will go,
I presume, to medical care spending increases. How much of this funding
increase will go to the Veterans Benefits Administration?
Answer. Total discretionary funding (GOE Budget Authority and
Credit Reform Budget Authority) of $1,116,300,000 and 12,019 FTE
reflect increases of $133,531,000 and 904 FTE.
Question 22b. You stated during the confirmation process that the
adjudication backlog was the biggest challenge that you face. Does this
budget proposal address that challenge?
Answer. Yes. Compensation and Pension (C&P) receives the lion's
share of total obligations ($775.5 million), as well as the largest
increase in direct FTE (863). With these resources, VBA will be better
able to counteract the increases in workload generated from recently
enacted Duty to Assist legislation and regulations regarding diabetes.
The strategy calls for these specialized claims to be worked in newly
formed SDN Service Centers. The Centers are composed of Veterans
Service Representatives (VSRs) and Rating VSRs, with lower graded
employees to perform data entry and reemployed annuitants to guide and
mentor trainees.
The challenges facing VBA, specifically improving accuracy and
timeliness in claims processing, will not be solved overnight. VBA has
developed an aggressive plan contained in this budget request to
continue progress in many areas while mitigating the effects of recent
legislative and regulatory actions. To the extent that resources become
available in FY 2002, VBA's new initiatives and additional FTE will
reinvigorate and improve the current process. This task is not
insurmountable. VBA is poised to implement the Secretary's commitment
to processing claims in 100 days with a manageable pending workload of
250,000 by summer 2003 and that is achievable with hard work,
determination, ingenuity and a deliberate emphasis on accuracy.
Question 22c. I understand that one of VA's most significant
longer-term challenges is the issue of the impending retirement of
VBA's most experienced adjudicators. Does this proposal address that
challenge?
Answer. VBA has recognized the need to hire and train new personnel
as increasing numbers of employees become eligible to retire, We have
included a request for 485 FTE in FY 2000, 243 additional FTE in FY
2001, as well as reprogramming from other areas in order to increase
C&P direct FTE. We believe that the additional 863 FTE requested for FY
2002 mainly associated with the recently enacted legislation and
regulations, will help prevent a skills gap as VBA experiences
increased attrition rates in the next several years. As the workload
generated by Duty to Assist legislation and diabetes regulations
becomes more manageable, VBA envisions assigning these specialized VSRs
and RVSRs to broader claims work.
Question 23. In each off the past three budget cycles, VA has
requested--and has received--funding to address its 1998 estimate that
255 of compensation and pension ``decision makers'' would retire by
fiscal year 2004. VA's Under Secretary for Benefits testified last July
that fiscal year 2002 would be the last year funding would be requested
for ``succession planning'' purposes. In your view, is this still the
case? How many experienced decision makers have retired already.
Answer. The FY 2002 Budget request does not include a ``Succession
Planning FTE Initiative.'' However, we believe that the additional 863
FTE mainly associated with the recently enacted legislation and
regulations will go a long way toward precluding a skills gap as VBA
experiences increased attrition rates in the near future. As the
workload generated by Duty to Assist legislation and Diabetes
regulations becomes more manageable, VBA envisions assigning these
specialized VSR's and RVSR's to broader claims work. VBA still
maintains the need to hire and train now to prepare for heavy attrition
losses due to retirements. Due to aggressively pursuing this issue, VBA
has been able to plan ahead for this inevitable wave of retirements. No
further succession planning FTE requests beyond FY 2002 are planned at
this time. Since 1998, VBA has lost approximately 900 decision makers.
Question 24. While improvements have been made in recent years, it
takes roughly two years for an appeal to be resolved once a veteran
files a Notice of Disagreement. What is your assessment of the staffing
needs within the Board of Veterans Appeals to address the appeals
backlog and the two-year wait for final appeals resolution? Does the
budget reflect funding levels consistent with your assessment?
Answer. Since 1998, the Department has reported on ``appeals
resolution time.'' Appeals resolution time measures the time from the
receipt of the Notice of Disagreement (NOD) to the issuance of a final
decision, which could include a decision by the regional office
granting benefits. (A remand by the Board of Veterans' Appeals is not a
final decision.) As such, it is a combined measure of timeliness of
both the Board and the Veterans Benefits Administration (VBA). To
achieve meaningful improvement in this timeliness measure, VA must
optimally manage appeals workloads both at the Board and in regional
offices and balance resources accordingly.
Appeals resolution time has been steadily decreasing, from 745 days
in 1999 to 682 days in FY 2000. We currently project 650 days for FY
2001 and 590 days for FY 2002. While additional improvements must be
made to achieve VA's appeals resolution time goal of 365 days, we
believe this budget reflects the appropriate balance of resource levels
for both the Board and VBA.
Question 25. As you know, the Committee has worked hard to increase
Montgomery GI Bill (MGIB) benefits over the past two Congresses, and we
have achieved success: an increase of 87 percent in the maximum monthly
payout under MGIB. Do you recommend that the Congress enact further
increases in MGIB benefits?
Answer. The President's Budget includes the annual cost-of-living
increase for education benefits for veterans and service members, but
does not include an additional benefit increase. The Administration
fully supports these benefits and is evaluating how to continue to
improve them. Consistent with MGIB's mission, the Administration will
work to strike the appropriate balance between improving veterans'
readjustment to civilian life and enhancing military recruitment and
retention.
Question 26. Does this proposed budget address expected workload
increases in VBA's education service due to recent increases in basic
benefits under MGIB? If so, how?
Answer. The Tuition Assistance Top Up legislation, effective
October 30, 2000, is expected to create 161,000 new claimants in FY
2001 and 214,000 additional claimants in FY 2002. Legislation allowing
for payment of Licensure and Certification exams became effective March
1, 2001. We anticipate this legislation to generate 25,000 new
claimants for FY 2001 and 100,000 additional claimants in FY 2002.
These provisions could dramatically affect workload and our ability to
process claims in a timely and effective manner.
VBA is planning to combat the increased workload through increased
staffing for FY 2002, overtime usage, and the use of Virtual Help
Teams. In addition, the current benefits delivery system, which cannot
efficiently process the new workload, will undergo programming
modifications. However, systems changes are long-term solutions and
will not have a positive impact by 2002. The proposed budget has money
to enable us to do all these things.
We have already started to address the increased workload in the
current fiscal year. First, 25 additional FTE were allocated in the
fall, 40 FTE were earmarked in December 2000, and 60 more FTE were
allotted to Education in February 2001. Seasonal employees will
constitute some portion of the 125 additional FTE because they can be
used effectively during critical periods and make a dramatic impact on
workload. The goal is that the additional resources for increased
staffing in Education will be a top priority for the remainder of FY
2001, as well as FY 2002.
Second, overtime money will continue to be committed as needed
during peak enrollment periods and to combat increased workload from
new legislation. More than $300,000 has been used so far this fiscal
year. In addition, during the workload crisis in fall 2000, mandatory
overtime was implemented at the four Regional Processing Offices (RPOs)
and will be used as needed to control cyclical workloads and increased
workload due to new legislation.
Third, new ways of processing claims were tried and tested in fall
2000. With technology enhancements, RPOs were able to go beyond normal
help teams and use Virtual Help Teams by pointing workstations towards
other RPOs. The electronic environment puts all pertinent information
related to a claim at one's fingertips, regardless of location. This
allows personnel to process claims for another station without having
to be on site physically, thus eliminating travel costs. In addition,
virtual brokering work relieves the burden of having to ship claims to
another office as well as eliminating the potential loss of claims in
the mail. Because RPO workload peaks vary among offices, Virtual
brokering can be used to manage part of the increase in workload.
Question 27. The President's budget recommends that VA's vendee
loan program be eliminated. Why? How would elimination of this program
save VA money?
Answer. The vendee home loan program, which is a non-veteran
program, interacts with several accounts (saving money in one account
and costing money in another). While vendee loans allow the Department
to sell properties faster and at higher prices, thus reducing VA's cost
of providing veterans with guaranteed loans, the cost of offering
vendee loans to the general public is not offset by this reduction.
Past cost estimates did not formally score all the components and
interactions between these accounts. OMB and VA recently completed this
complex scoring, which takes into consideration all of the components
and interactions, and determined that the elimination of the vendee
loan program will have a net savings of $226.7 million over the next
ten years.
Question 28. Do you think VA will be able to ``unload'' excess
properties-particularly in depressed areas and during ``bad'' times--if
VA ceases financing purchasers? If VA cannot sell its properties
because it is unable to finance purchasers, how will the Government
have saved money by continuing to hold onto distressed properties that
VA cannot sell?
Answer. It is possible, if not probable, that there would be a
build-up of property inventory in areas with distressed real estate
markets, with or without the vendee loan program. In the past, the
vendee loan financing tool has been very beneficial in holding
inventory levels down. However, our ten-year savings estimate ($226.7
million) takes into account our best economic and property inventory
assumptions.
Question 29. What does the Administration's budget propose for the
administration, operation, and maintenance of the National Cemetery
Administration's burial service and programs?
Answer. The National Cemetery Administration (NCA) appropriation
funds the operation and maintenance of VA's 19 national cemeteries. A
total of $121.2 million and 1,499 FTE are requested for 2002. This is
an increase of $11.3 million and 33 FTE over the 2001 current estimate
level.
The budget request includes an increase of $5 million for the
National Shrine Commitment. This increase is in addition to the $5
million provided for this initiative in the 2001 appropriation,
bringing the total funding for the program in 2002 to $10 million. The
National Shrine Commitment is a program to improve the appearance of
burial grounds and historic structures required for NCA to fulfill its
commitment to maintain our national cemeteries as national shrines. The
resources provided in the 2001 appropriation and requested in this
budget will be used to address currently identified deficiencies in the
appearance of a number of headstones and markers and the condition of
some gravesites. The VA national cemeteries continue to experience an
increase in the number of gravesites and developed acres that must be
maintained. This budget requests $1.6 million to address an increase of
67,700 gravesites, and an additional 217 acres of developed land in
2002 that will require maintenance.
As the rate of death of the veteran population continues to
increase, the annual number of interments at VA national cemeteries
continues to increase, In order to maintain the quality of our
interment service, this budget requests $1.1 million and 25 FTE to
address the 3.1 percent increase in projected interments in 2002. This
increase in veteran deaths will also result in an increase in the
number of headstones and markers ordered, not only for veterans buried
in national cemeteries, but also state veterans' cemeteries and private
cemeteries. This budget requests an additional $51,000 and one IFTE to
maintain the efficiency of the headstone and marker ordering process
with the projected increase of over six thousand orders in 2002.
NCA continues to expand the capacity and improve the infrastructure
of existing cemeteries to ensure that they continue to meet the needs
of veterans and other stakeholders. NCA will add four IFTE to perform
in-house architectural and engineering efforts and construction
contract support that were previously performed by the Veterans Health
Administration (VHA). These will be funded within existing resources by
ending the reimbursement to VHA for these services. An additional
$241,000 is requested to support two more FTE for contracting support
and one FTE to establish the position of Information Technology
Security Officer.
The 2002 budget request also includes an additional $3.3 million
for federal pay raises and projected inflation.
Question 30. What is the status of each of the six cemeteries for
which VA has received either design funding or full funding? What is
the construction timetable for each of the cemeteries? Does the fiscal
year 2002 budget request full construction funding for any national
cemeteries?
Answer. The status of the efforts to establish six new national
cemeteries is described below. Land has been acquired for the Ft. Sill,
Oklahoma and Atlanta, Georgia areas. In addition, full construction
funding was provided in the FY 2001 appropriation for the Ft. Sill
location and full construction funding is requested in the FY 2002
President's budget for the Atlanta location. Progress in identifying
and acquiring land for each of the remaining four locations is ongoing.
Atlanta, Georgia--The Department has acquired an approximately 770-
acre site in Cherokee County, north of Atlanta. Mr. Scott Hudgens, a
World War II veteran, donated this site. A contract for developing the
cemetery's Master Plan is scheduled to be awarded this summer. The 2002
President's Budget requests $28.2 million for Phase I construction of
this new national cemetery. If these requested funds are appropriated,
the construction contract award is expected in August 2002, and
completion of the construction is expected in May 2004.
Detroit, Michigan--Representatives of the National Cemetery
Administration (NCA) actively worked with the Michigan Veterans Affairs
Directorate, area real estate agents, and the Veterans Benefits
Administration's (VBA) Loan Guaranty officials at the Detroit VA
Regional Office to identify available property for evaluation as a new
national cemetery. Eight potential parcels of land were identified for
further consideration. Pending full evaluation of the characteristics
of each site, the best sites for environmental assessment will be
selected. After all environmental assessments are completed, a
recommendation for final selection will be forwarded to the Secretary
of Veterans Affairs. An appraisal of the preferred site will also be
conducted.
The 2002 President's Budget includes $18 million to be available
for the purchase of land for new cemeteries in the vicinity of Detroit,
Michigan; Pittsburgh, Pennsylvania; and Sacramento, California.
Miami, Florida--Representatives of the National Cemetery
Administration (NCA) and the Florida Department of Veterans Affairs
visited eleven prospective sites in south Florida and developed a
recommendation of ``top sites'' for further consideration. The Acting
Under Secretary for Memorial Affairs and the Director, Florida
Department of Veterans Affairs visited the top three sites in August
2000. As a result, two top sites were selected. Both sites are located
in Palm Beach County.
In October 2000, URS, Greiner, Woodward, and Clyde began conducting
the environmental assessment process on each of the two top sites to
assess the impacts of developing the land for use as a cemetery.
Subsequently, the owner of one site removed it from consideration. The
environmental assessment is being completed for the remaining location,
which is near the West Palm Beach VA Medical Center. Very recently the
EA consultant has identified two factors that will require further
investigation. Realizing the negative potential of these findings, NCA
is directing the EA consultant to expand their review to two additional
sites that had been identified during initial site evaluation visits.
After all environmental assessments are completed, a recommendation
for final selection will be forwarded to the Secretary of Veterans
Affairs. An appraisal of the preferred site will also be conducted.
The 2001 appropriation contained $15 million for land acquisition,
and the 2002 President's Budget requests Design Funding for the
preparation of Construction Documents.
Oklahoma City, Oklahoma--The National Cemetery Administration (NCA)
anticipates that a construction contract will be awarded in order for
construction to begin before the end of 2001. NCA's goal is to complete
construction in the fall of 2003. Design is being made for a ``fast
track'' section that will permit interments to begin prior to full
completion of all construction activities at the new cemetery. NCA
projects that the ``fast track'' section will be available for burials
in the fall of 2001.
The 2001 appropriation included $12 million for construction- All
Phase I development costs are fully funded.
Pittsburgh, Pennsylvania--The Governor of Pennsylvania established
a Cemetery Site Selection Committee to serve as a primary evaluation
mechanism for locating sites and scheduling site visits. The National
Cemetery Administration (NCA) staff visited Pittsburgh during June 2000
to meet with the State's Cemetery Site Selection Committee. NCA staff
toured eleven proposed sites. In October 2000, the Under Secretary for
Memorial Affairs toured the three top sites. Based upon these visits,
the Under Secretary identified the Morgan Farms site, 15 miles
southwest of Pittsburgh, as the most desirable and feasible location.
The Morgan Farms location was also the preferred site named in the
Cemetery Site Selection Committee's report that was submitted to the
Pennsylvania House of Representatives.
A contract for an environmental assessment of the Morgan Farms site
was awarded in December 2000 and the final report is expected by May
2001. An appraisal of the preferred site will be undertaken as a part
of the environmental assessment contract. If the site is purchased, NCA
anticipates that a contract for master planning will be awarded in the
fall of 2001.
The 2002 President's Budget includes $18 million to be available
for the purchase of land for new cemeteries in the vicinity of Detroit,
Michigan; Pittsburgh, Pennsylvania; and Sacramento, California.
Sacramento, California--The National Cemetery Administration (NCA)
officials worked closely with representatives of the California
Department of Veterans Affairs and local realtors to identify suitable
locations for consideration as a new national cemetery. A joint VA/
State site evaluation team visited nine sites in the Sacramento area
during October 2000. Several potential cemetery sites were identified.
NCA continues to analyze each site's characteristics. Pending full
evaluation of each site the best sites for environmental assessment
will be selected. After all environmental assessments are completed, a
recommendation for final selection will be forwarded to the Secretary
of Veterans Affairs. An appraisal of the preferred site will also be
conducted.
The 2002 President's Budget includes $18 million to be available
for the purchase of land for new cemeteries in the vicinity of Detroit,
Michigan, Pittsburgh, Pennsylvania; and Sacramento, California.
______
Response to Written Questions Submitted by Hon. Ben Nighthorse Campbell
to Anthony J. Principi
Question 1. I know you are supportive of innovative and creative
ideas for modernizing and streamlining the health care services
provided to our veterans. In my home State of Colorado, there is the
unique opportunity to build new facilities on the old Fitzsimons site
that would be shared by both the Veterans Administration Medical Center
(VAMC) and the University of Colorado Hospital (UCH). I understand a
joint study shows this sharing of location and facilities could save
the VA Medical Center one billion dollars over 20 years. Veterans in
Colorado are generally supportive of this move. How would you see such
collaboration fitting in with the mission and priorities of the VA?
Answer. In 1999, the University of Colorado Health Sciences Center
(UCHSC) and University of Colorado Hospital (UCH) decided to relocate
to the former Fitzsimons Army Base. The entire campus of the UCHSC,
including UCH, will be relocated over the next several years. It will
be part of a larger complex that is expected to draw world-class
research and development, talent, and resources. All of this will have
great impact upon the quality, timeliness, and cost of care at the
Denver VAMC, which is directly adjacent to the current campus and about
eight miles away from the Fitzsimons site.
As a result of this decision to relocate, representatives from the
VA Rocky Mountain Network (VISN 19), the Denver VA Medical Center
(VAMC), UCHSC, UCH, and veterans service organizations began meeting to
assess future collaborative arrangements between VA and the UCHSC and
UCH. A subcommittee was charged with developing a preliminary concept
for a collaboration of the Denver VAMC with UCH at Fitzsimons. A
consultant was hired to develop a conceptual plan to propose several
options for a possible relocation of the Denver VAMC.
The consultant's report included options that ranged from building
a new VA hospital totally separated from the UCH to full integration of
the VAMC and UCH. One option also provided for integrating some
services between the two organizations. The report indicated that VA
might save as much as one billion dollars over a twenty-year period due
to reduced maintenance, remodeling, and replacement costs, if co-
location was accomplished with the University at Fitzsimons. Co-
location could facilitate continued recruitment and retention of
clinicians with faculty appointments at the University, rather than
requiring a commute to the current VAMC site.
VA and University of Colorado planning groups are continuing to
discuss the options proposed by the consultant. These are early
discussions and no proposal has been submitted to VA Central Office for
review. Initial indications are that the University of Colorado will
ask VA for a decision on relocating to the Fitzsimons campus by July
2003. The next step is to determine which, if any, of the options
outlined in the consultant's report is a better way to provide high-
quality health care to veterans. In addition, the Department will be
performing Capital Asset Realignment for Enhanced Services (CARES)
studies of this area in the near future. If it is determined to be in
the best interest of VA that the Denver VAMC be relocated to the
Fitzsimons campus, then a further decision will be needed on the type
and extent of integration with UCH.
Question 2. Is there a process in place for a private property
owner to donate his/her land to the Department of Veterans Affairs,
some other government entity, or non-profit organization for the
express purpose of establishing a local, State or federal military
cemetery? If so, please provide the Committee with a brief outline of
the process. If such donations are allowed, are they considered
deductible for tax purposes?
Answer. The concentration of veterans in any particular geographic
area, and their need for a national cemetery, is a primary
consideration in the selection or acceptance of land. The Federal
Government is authorized to accept donations of land from individuals
to be used for creation or expansion of national cemeteries. The
Federal Government cannot accept real property for the purpose of
establishing local or State cemeteries. The site of the pending
Atlanta-area national cemetery is a donation from a private individual,
and the site of the San Joaquin Valley National Cemetery in California
is formed from a private donation. Many of our existing cemeteries have
expanded on land donated by adjacent property owners (Fort Smith N/C
(AR), Camp Butler N/C (IL), Port Hudson N/C (LA)). The acceptance of
land to create a State veterans' cemetery would be the responsibility
of the respective State government, subject to any rules or criteria
that the State may require.
The process by which the Department of Veterans Affairs (VA) may
accept a donation of land is relatively simple, yet subject to legal
review in order to protect the interest of the Government. A basic
``Offer to Donate Real Property'' form is completed and signed by the
owner; authorization to proceed with acceptance is signed by the
Secretary; a survey and title search are conducted by the Government;
an environmental assessment is conducted by the Government in
compliance with National Environmental Protection Act (NEPA)
provisions; and, if all legal aspects are in proper order, closing is
held. Most States exercise these same or similar procedures for
accepting donated land.
VA defers to the Internal Revenue Service (IRS) on the issue of
whether donations of land for national cemeteries are deductible for
tax purposes. The IRS is responsible for determining whether donations
of real property are tax deductible under the Internal Revenue Code.
Question 3. Many service organizations have expressed interest in
improving women's care in VA hospital--such as providing equipment and
training staff to perform mammograms. How do you see the future of
health care for women in the VA?
Answer. Women veterans are one of the fastest growing segments of
the veteran population, second only to elderly veterans. In FY 2000,
they comprised 5.5 percent of the total veteran population, an increase
from 4.7 percent in FY 1997. Women veterans currently represent
approximately 5 percent of all users of the VA health care system. The
Veterans Health Administration (VHA) estimates that by 2010, women will
comprise 10 percent of veterans utilizing VA health care services.
The needs of women veterans are often different than those of male
veterans. In addition to access to primary care, medical subspecialty
care, mental health services, and geriatric care, women veterans also
require access to gynecological care and, for younger women, obstetric
and infertility services. Maternity and infertility services, except
invitro fertilization, are a part of VHA's uniform health care benefits
package, which was published in October 1999, and makes the full
spectrum of health care available to women veterans through VA. We will
ensure that these programs remain available and expand in scope in
order to accommodate the projected increase in women veterans using the
VA health care system.
It is VHA policy that breast screening services be included as part
of the complete primary care examination for women. VA facilities
performing mammograms are required to be certified by the Food and Drug
Administration (FDA) to provide screening and diagnostic services. When
VA facilities have the necessary equipment and staff training, and do
enough mammograms each year to be certified, they are encouraged to do
so. When mammography services are obtained through contractual
arrangements or sharing agreements, the referring VA facility must
ensure that the provider has current accreditation and FDA
certification.
Educational opportunities designed to develop clinical skills and
knowledge for VA clinicians is available through traditional training
programs. For example, the Annual Ambulatory Care Conference, to be
held this year in San Diego from August 28 through 30, includes women's
health topics such as cancer screening, breast disease, pregnancy care,
and sexual trauma. Videotapes on these topics are available in the VA
Medical Center libraries and local educational programs are held
regularly. Veterans service organizations have cooperated with VA staff
in developing women's health educational and training efforts in areas
related to experiences specific to women veterans or to health care
problems prevalent in the women veteran population, particularly sexual
trauma. The Disabled American Veterans co-sponsored the National Summit
on Women Veterans in June 2000, which was very useful in educating VA
staff on the needs and views of women veterans.
To ensure that women veterans receive appropriate, timely, and
compassionate health care, VHA established the Women Veterans Health
Program (WVHP) in 1997. The program director is based in VHA Central
Office in Washington, DC, and is assisted by four Deputy Field
Directors. At the local medical facility level, Women Veterans
Coordinators are responsible for coordinating health care services for
women veterans.
In March 2000, VA's Under Secretary for Health requested the Women
Veterans Health National Strategic Work Group to evaluate the current
status of women's health care in VA and make recommendations for
strategic planning for women's health. The culmination of the work
group activities will be a National Women Veterans Health Program
Strategic Plan for FY 2002 through 2007. The plan is expected to be
completed by October 2001.
Question 4. In the past, the Veterans Administration has seemed to
ignore the grass roots input from veterans around the country
concerning care and services they receive. What would be your position
on forming a fact-finding commission that would go to areas of high
concentrations of veterans to conduct town hall meetings where
veterans' concerns could be aired?
Answer. Veterans Health Administration (VHA)--VHA has numerous
mechanisms in place to seek input from both the veterans we serve and
veterans service organizations (VSOs) at all levels. VHA uses this
information to formulate policy and refine its services and program
activities. We do not believe that a special ``fact-finding
commission'' is needed at this time.
VHA's Veterans Integrated Service Networks (VISNs) and local
medical facilities conduct frequent Town Hall meetings to allow
veterans an opportunity to express their concerns and have these
concerns addressed. These forums are used to explain changes in
programs and services and to facilitate dialogue with veterans.
The VISNs have advisory groups, called Management Assistant
Councils, whose members include VSOs, Congressional staffs, and other
stakeholders. The groups meet regularly with directors and other
facility and network officials. At headquarters, regional and local
levels, VHA enjoys a collaborative working relationship with the VSOs,
who very capably represent the views and interests of their members.
There are literally hundreds of community events across the country
attended by VA leadership, including service chiefs, associate
directors, and directors. At these events, VHA officials provide
information to small and large groups of veterans on VHA services and
answer questions on VA health care. VHA's directors and other senior
officials also participate in panel discussions and question-and-answer
opportunities at local, State, and national VSO conventions and
meetings.
Veterans with Internet access have opportunities to ask questions
and voice concerns through VA's interactive Web sites. These are
routed, based on subject matter, to the appropriate individuals for a
direct response to the veteran. Since January of this year, for
example, VA's Office of Consumer Affairs has averaged about 400
Internet, phone, and letter inquiries per month, much of it health-care
related.
Each VA medical center (VAMC) has a patient advocate office that
can be used by veterans as a forum to air their concerns. Veterans are
informed of the right to request Patient Advocate assistance through
the distribution of patient rights brochures, Patient Advocate
brochures, and posters and signs throughout the medical center. VAMC
staff members are informed of the Patient Advocate Program through
orientation meetings. Patients may contact the Patient Advocate in
person, by phone, letter, or e-mail. A response to all patient
complaints, with documentation of the resolution effort, occurs as soon
as possible, but no longer than 7 days after the patient's complaint.
Many complaints are resolved immediately.
VHA is committed to a process of continuous assessment of patient
satisfaction. National Veteran Satisfaction Surveys are administered
semi-annually by mail to a sample of veteran patients meeting
qualifying factors in six different survey cohorts (ranked by size).
The survey cohorts include Ambulatory Care, Inpatient Care, Gulf War,
Prosthetics/Sensory Aids, Spinal Cord Injured, and Home Based Primary
Care.
The standardized survey instrument, methods, and analyses support
comparisons between facilities or VISNs, as well as comparisons of
performance over time. These analyses help VHA managers, clinicians,
and employees better understand veterans' perceptions and needs. The
information provided by the surveys drives process improvement at all
levels of the organization in support of VHA's strategic plan and
service commitments. VHA is committed to surveying because we have
learned that surveys are a valuable, systematic way of listening to the
needs and concerns of Veterans.
The Office of Quality and Performance has developed a hand held
electronic Patient Satisfaction Survey Toolkit. The Toolkit is designed
to support field-based patient satisfaction survey initiatives. The
Toolkit will greatly enhance the local facility's ability to gather
real-time patient feedback data to support improvements of care
delivery. The Toolkit is currently being pilot-tested at the VA medical
centers in Columbia, SC, Durham, NC, Lexington, KY, Richmond, VA, and
Valley Healthcare System, NY.
In an effort to provide services to homeless veterans, and in
conjunction with many community agencies, VHA plays a major role in
stand-downs. These one, two, and three-day events offer a variety of
services: housing and shelter referrals, Social Security benefit
counseling, Agent Orange information and counseling, mental health and
other health care services, and legal services. From November 1999 to
December 2000, VA participated in 216 stand-downs and benefits
assistance fairs in 47 States, the District of Columbia, and Puerto
Rico. Nearly 36,000 veterans (including 1,573 women veterans), 4,225
spouses, and 1,576 children attended these events, received assistance,
and were given the opportunity to speak with and express their
interests and concerns to VA staff and volunteers.
VHA will continue to seek feedback and dialogues with veterans in
each community it serves and with the organizations that represent
them, both through new and current initiatives and through patient
satisfaction surveys.
Veterans Benefits Administration (VBA)--Many Regional Offices
initiate and participate in a variety of forums to reach out into the
veteran communities within their jurisdictions. They use these forums
to provide information, to hear veterans' concerns, and to counsel
veterans and receive claims applications. Regional Offices do hold Town
Hall meetings. The Boise Regional Office conducted the most recent of
these in April 2001.
VBA participates in VA initiatives such as stand-downs for homeless
veterans and in health fairs held in a variety of community settings.
Regional Offices participate in other types of community outreach as
well, including information fairs held at local shopping malls. Another
effective way Regional Offices receive veteran feedback is by
participating in call-in radio programs. These programs offer veterans
an opportunity to provide VA with their input on a broad range of
issues. Each of these outreach efforts affords VBA with an opportunity
to hear veterans' concerns.
Staffs at Regional Offices interact with VSOs in ways other than
through daily contact in the Regional Offices. Regional Office staffs
attend conventions and local meetings to interact not only with
organization executives but also with local memberships. These are
opportunities for VBA to provide information and receive feedback from
the local veteran communities and from those who represent veterans in
the local communities.
Outreach efforts such as these give VBA important information on
services and benefits we are providing. These efforts can supplement,
in a more current manner, the information and feedback that we receive
through our customer surveys. VBA will continue to encourage these
types of outreach activities in order to provide needed information and
services to the community, as well as to gather information from
veterans about their concerns.
National Cemetery Administration (NCA)--Collecting ``voice of the
veteran'' feedback is an important component of NCA's customer
satisfaction strategy. For many years NCA has used focus groups to
gather first hand accounts about the level and quality of services
provided by national cemeteries, as well as the expectations and
preferences held by veterans regarding their national shrines. For
example, NCA conducted focus groups with local VSOs, members of the
veteran community at large, and their family members, and funeral homes
prior to the opening of the four newest national cemeteries: Saratoga,
New York, Abraham Lincoln (Chicago, Illinois); Ohio Western Reserve
(Cleveland, Ohio), and Dallas-Fort Worth, Texas. These focus groups
were used to ascertain the expectations, requirements, needs and hopes
that veterans, their families and funeral professionals held for the
new national cemetery being constructed in their area. Results of these
sessions were shared with the local cemetery director and his/her staff
as well as NCA senior leadership for potential changes or adaptations
to plans for cemetery operations. As a follow up to the ``Pre Opening''
focus groups, NCA is in the process of planning and conducting ``Post
Opening'' focus groups at these cemeteries, as a way to determine if
NCA met the expectations and requirements of its customers. NCA
anticipates utilizing this same strategy for the six new national
cemeteries currently being developed a part of the implementation of
the Veterans Millennium Health Care and Benefits Act of 1999.
Question 5. Recent actuarial records show that World War II
veterans are dying at the rate of 1,000 per day, and other veterans at
586 per day. The existing State and federal veterans cemeteries are
almost at capacity. The previous administration had selected sites and
planned to build an additional six federal cemeteries. What would be
your policy concerning adding more federal cemeteries and increasing
the federally subsidized State veterans cemetery program?
Answer. Veterans cemeteries are solemn shrines to those who served
their country in time of need. VA is keeping this promise to America's
veterans to honor them with a final resting place and lasting memorials
that commemorate their service to the Nation. VA is accomplishing its
mission to provide burial space for veterans in three ways:
Establishing new national cemeteries--The FY 2002 Budget
includes $48 million for land acquisition, design, and construction of
new cemeteries in Atlanta, Georgia; Detroit, Michigan; Pittsburgh,
Pennsylvania; Sacramento, California; and Miami, Florida.
Expanding existing national cemeteries wherever and
whenever possible--The President's FY 2002 budget includes $16 million
to fund the expansion of existing cemeteries in Massachusetts and
Washington.
Helping States establish, expand, or improve State
veterans cemeteries through the State Cemetery Grants Program--The FY
2002 budget includes $25 million for this program.
The majority of the Department's current national cemeteries are
open with available unassigned gravesites for both casketed and
cremated remains, many with capacity beyond the year 2030. NCA
continually monitors the inventory of gravesites at the national
cemeteries, and where appropriate, NCA attempts to acquire additional
land to extend the service life of these cemeteries. In many other
instances where cemeteries have, or will soon close, NCA works in
partnership with the States to establish State veterans cemeteries to
ensure that the veterans in that area continue to be served by a burial
option.
NCA is projecting that the percent of veterans served by a burial
option in a national or State veterans cemetery within a reasonable
distance of their residence will increase from 76 percent in FY 2001 to
88 percent by FY 2006 with the opening of the six new national
cemeteries and additional planned new State veterans cemeteries. At the
end of 2001, of the 119 existing national cemeteries, 87 will have
space for first interments, whether full-casket or cremated remains, to
include either in-ground or in columbaria. The other 32 national
cemeteries will have exhausted their space for first interments of
full-casket or cremated remains and can only perform interments in the
same gravesite as a previously deceased family member.
As you know, we are establishing new national cemeteries to serve
veterans in the areas of Oklahoma City, Oklahoma, at Ft. Sill; Atlanta,
Georgia; Detroit, Michigan; Miami, Florida; Pittsburgh, Pennsylvania;
and Sacramento, California. Beyond the opening of these six new
national cemeteries, section 613 of The Millennium Act directed that VA
contract for an independent study to, among other things, identify
those areas of the United States with the largest number of unserved
veterans and identify the number of new cemeteries needed from 2005 to
2020. This study will guide us in the future as we strive to achieve
our long-range goal of providing all eligible veterans reasonable
access to a burial option.
Public Law 105-368, which provided for Federal participation of up
to 100 percent for State cemetery grants, has effectively encouraged
participation in the State Cemetery Grants Program. This program is an
important part of our strategy for meeting the burial needs of our
veterans. It is a successful program, and I support it wholeheartedly.
In FY 2000, 43 operational State veterans cemeteries provided 14,354
burials to veterans and eligible family members. This figure
represented a 7.7 percent increase over the previous year and accounted
for approximately 15 percent of the total number of burials provided by
VA national cemeteries and VA-assisted State cemeteries combined. VA
will continue to work closely with the members of the National
Association of State Directors of Veterans Affairs (NASDVA) to increase
State participation in this program.
______
Response to Written Questions Submitted by Hon. John D. Rockefeller IV
to Anthony J. Principi
general
Question 1. How will the $1 billion dollar increase for VA proposed
in the President's budget be divided among the various elements in VA?
Answer. The attached table lists VA's discretionary program budget
submission to Congress. The budget provides for $896 million in medical
care and millennium collections. The millennium collections of $121
million (* below), which were not available in 2001, are now available
in 2002 and are scored as mandatory.
Budget Authority Net Comparison of the FY 2002 Budget Request
[dollars in thousands]
----------------------------------------------------------------------------------------------------------------
President's
Discretionary Programs -----------------------------------------------
FY 2001 Request Difference
----------------------------------------------------------------------------------------------------------------
Medical Programs:
Medical Care 1 ............................................... 20,229,799 20,979,742 +749,943
Medical Care Collections Fund............................... 675,000 775,000 +100,000
Health Services Improvement Fund collections *.............. .............. 121,000 +121,000
-----------------------------------------------
Subtotal, Medical Care.................................... 20,904,799 21,875,742 +970,943
Medical and Prosthetic Research............................... 350,228 360,237 +10,009
MAMOE......................................................... 61,780 67,628 +5,848
-----------------------------------------------
Total Medical Programs.................................... 21,316,807 22,303,607 4,986,800
Construction Programs:
Construction, Major Projects.................................. 65,895 183,180 +117,285
Construction, Minor Projects.................................. 165,974 178,900 +12,926
Parking Revolving Fund........................................ 6,486 4,000 -2,486
Grants for State Extended Care................................ 99,780 50,000 -49,780
Grants for State Cemeteries................................... 24,945 25,000 +55
-----------------------------------------------
Total Construction Programs................................. 363,080 441,080 +78,000
Veterans Benefits Administration:
Education Loan Program Account (subsidy)...................... 1 1 0
Vocational Rehabilitation Loans Program Account (subsidy)..... 52 72 +20
-----------------------------------------------
Total Veterans Benefits Administration...................... 53 73 +20
General Operating Expenses & Misc.:
Veterans Benefits Administration (GOE only) 1 ................ 825,832 955,352 +129,520
Veterans Housing Benefits Program Fund Program Account........ 157,239 161,483 +4,244
Proposed legislation........................................ .............. -1,400 -1,400
Native American Veterans Housing Loan Program Account......... 514 527 +13
Education Loan Program Account................................ 220 64 -156
Vocational Rehabilitation Program Account..................... 431 274 -157
-----------------------------------------------
Subtotal, Credit Reform..................................... 158,404 160,948 +2,544
-----------------------------------------------
Total, Veterans Benefits Administration w/Credit............ 984,236 1,116,300 +132,064
General Administration 1 ....................................... 226,521 239,479 +12,958
Credit Reform (General Counsel)
Veterans Housing Benefits Program Fund Program Account........ 4,404 4,414 +10
Native American Veterans Housing Loan Program Account......... 17 17 0
-----------------------------------------------
Subtotal, Credit Reform (General Counsel)................... 4,421 4,431 +10
-----------------------------------------------
Subtotal, General Administration w/Credit................... 230,942 243,910 +12,968
-----------------------------------------------
Total General Operating Expenses w/out Credit............... 1,052,353 1,194,831 +142,478
-----------------------------------------------
Total, Credit Reform--Administrative........................ 162,825 165,379 +2,554
National Cemetery Administration 1 ............................. 109,045 121,169
+12,124
Office of Inspector General 1 .................................. 46,284 48,308 +2,024
-----------------------------------------------
Total General Operating Expenses and Misc................... 1,370,507 1,529,687 +159,180
-----------------------------------------------
Total Discretionary with Collections (including HSI 23,050,447 24,274,447 1,224,000
collections which are scored as mandatory).................
Proprietary Receipts:
Medical Care Collections Fund................................. -675,000 -775,000 -100,000
Veterans Health Service Improvement *......................... .............. -121,000 -121,000
-----------------------------------------------
Total Discretionary Programs................................ 22,375,447 23,378,447 +1,003,000
----------------------------------------------------------------------------------------------------------------
1 Excludes the transfers and reprogramming to General Operating Expenses--General Administration for the Office
of Employment Discrimination Complaint Adjudication and the Office of Resolution Management activities in
2001. For 2002, VA is proposing that funding for these activities be handled on a reimbursable basis.
health care
Question 2. What more could be done if the VA health care account
received an additional increase above what the President is requesting?
Answer. I believe that the President's budget request for VA health
care is sufficient and supports the continuation and strengthening of
very important health care initiatives impacting the health and well-
being of veterans. As with the rest of the budget, details of VA health
care appropriations and accounts were released on April 9,2001.
Question 3. Great progress has been made in expanding long-term
care services to veterans-nursing home care for those with
disabilities. rated 70 percent and higher, and non-institutional care
for all enrollees. What is your view about including all long-term care
services in the standard benefits package?
Answer. As authorized by the Veterans Millennium Health Care and
Benefits Act, VA plans to add all non-institutional extended care
services to the Medical Benefits Package, thus providing access to
these services for enrollees. These high-priority, non-institutional
extended care programs will join Home-Based Primary Care, Homemaker/
Home Health Aide, and Hospice Care, in creating a comprehensive array
of home and community-based care for enrolled veterans.
VA believes it is appropriate to keep nursing home and domiciliary
eligibility separate from home and community-based care at this time.
VA believes it can meet its mandate for nursing home and domiciliary
care without including these services in the Medical Benefits Package.
At the same time, VA expects to meet many of the transitional needs of
veterans requiring nursing home care. VA is interested in fostering the
idea of coordination of federal health benefits, and this may be
especially beneficial in the area of long-term care.
Question 4. The current network structure has seen various forms.
The networks were originally envisioned as small entities with
managerial control over a group of hospitals. Today, networks are
rather large operations, some of which have line control over hospital
services. Are you confident that the network structure allows you to
oversee health care operations and to make sure that your priorities--
on quality and on access--are being met?
Answer. Perhaps the principal distinction between the VA health
care system at the beginning of the last decade and today is the degree
to which service delivery is integrated across discrete geographic
areas. This has been, in large measure, the result of the network
organizational structure adopted by the Veterans Health Administration
(VHA) in the early 1990s. This model, now a hallmark of high performing
private health care delivery systems, has been instrumental in VA's
impressive progress in controlling costs and unnecessary utilization
while dramatically improving service delivery, patient safety, and
quality. These strides have allowed the VA health care system to emerge
from the last decade as an acknowledged leader in the health care
industry. Another principal strength of the Veterans Integrated Service
Network (VISN) management structure is its operational ability to keep
pace with a rapidly changing health care. environment. The VISN
structure allows VHA to maximize policy oversight and compliance while
maintaining the flexibility to respond to local health needs and
stakeholders more quickly.
VA emphasizes managing health care versus managing facilities.
Through a major transformation effort, VA has improved safety and
quality of care, veteran satisfaction, enhanced veterans' access to
care, reduced gaps and overlaps in services and reduced administrative
overhead. It also emphasizes collaborations, with other federal
agencies, academic affiliates, and community partners to achieve these
goals.
As the Department continues to improve services for our Nation's
veterans, we have imposed a number of requirements on the field, such
as the need for each facility and Network to have dedicated information
security officers and dedicated patient safety staff. Implementation of
bar code medication administration, the emphasis on wafting times,
clinical practice guidelines, and the increased reliance on the
Institute for Healthcare Improvement principles to improve waiting
times are issues discussed continuously in VHA, including a review
during the Network Director quarterly performance reviews. I am paying
close attention to waiting times for clinic appointments and pharmacy
waiting times specifically and feel confident that the network
directors will continue to make improvements in these areas.
Question 5. Despite the fact that GAO has not done an actual audit
of VA's capital assets, many have been quick to cite GAO findings that
VA is wasting a million dollars a day on its physical plant. What is
your sense about how much of that $1 million is actually wasted (for
example, heating an abandoned building), and how much is actually the
cost of caring for patients?
Answer. GAO's $1 million per day estimate of the ``cost of asset
ownership'' included a combination of indirect operating costs and
fixed costs. Some of the costs included in this estimate were
administration, engineering, environmental, security, textile, food
service, and capital investment in VHA's infrastructure. GAO stated
that their basis for including all these activities was founded on
OMB's definition of the cost of asset ownership: ``the total of all
costs incurred by the owners and users to obtain the benefits of a
given acquisition.'' While VA agrees with GAO that these costs are, in
fact, part of the total costs incurred by VA to obtain the benefit of
our capital assets, this is entirely different from a concept of
``waste.'' Many of the costs included in this estimate, such as
utilities, food preparation, housekeeping services, textile management,
and security, are essential elements for the delivery of patient care.
VA does not believe that these essential indirect costs of patient care
should be included as part of asset ownership costs in the context of
this question. However, VA does expect to realize significant cost
savings by investing resources in realigning VA's existing capital
assets through the implementation of Capital Asset Realignment for
Enhanced Services (CARES) options. These savings would be a result of
reduced costs including direct, indirect, and operations and
maintenance costs.
VA recognizes that there are efficiencies that can be achieved
through possible integration and/or consolidation of facilities and
services. VHA will carefully monitor maintenance and operation
expenditures and significant efforts will be undertaken to reduce or
eliminate unnecessary expenditures such as the cost of heating and
maintaining vacant space as referenced in this question. CARES studies
and identification of CARES options are needed to help VHA identify
excess or underutilized capital and specific capital restructuring
options to reduce the cost of asset ownership while simultaneously
improving both access and quality of patient care.
Question 6a. The President's budget will likely contain proposals
to manage the increase in demand for health care services. The data I
have received indicates that less than 20 percent of the patients using
the system are ``higher income'' veterans and that they use 6 percent
of the resources. These numbers do not indicate to me that these
veterans are seriously taxing the entire system. What is your view?
Answer. Your perceptions are a fair assessment of the utilization
of priority 7 (``higher income'') veterans. Our FY 2001 Enrollment
Report shows that 21 percent of the users will be priority 7 veterans,
and they will consume 9 percent of the resources equal to $1.6 billion.
Data for FY 2000 show the average cost for a priority 7 veteran patient
was $1,844, compared to $4,856 for all veteran patients. Sixty percent
of the priority 7 veterans had annual patient costs of less than
$1,000. Additionally, 23 percent of our priority 7 patients did not
receive any prescription drug benefit from VHA.
Data from the FY 1999 and FY 2000 Enrollee Surveys show that
``new'' enrollees (i.e., those new to the system since enrollment began
in FY 1999) do not rely as heavily on VA for their health care as do
``past'' enrollees, veterans who used VA anytime in the three years
prior to enrollment (FY 1996-FY 1998). According to these surveys,
``new'' priority 7 enrollees received only 26 percent of their
outpatient care and 7 percent of their inpatient care from VA. ``Past''
enrollees demonstrated higher reliance on VHA (up to 50 percent of
their outpatient health care and 33 percent of their inpatient care).
Another issue that may affect priority 7 reliance on VA is the new
TriCare for Life. Approximately 10 percent of priority. 7 enrollees are
retired military, and half of these retirees are eligible for Medicare.
With the introduction of TriCare for Life in October 2001, we estimate
15,000 of these enrollees will revert to reliance on TriCare and
Medicare for most of their health care. Although not seriously taxing
the system, the needs for specialty care and timely access for
priorities 1 through 6 are concerns that will be considered when we
make the enrollment decision for FY 2002.
Question 6b. Given that the proposed budget may not allow for
continued enrollment of higher income veterans, how specifically will
you reduce expenditures?
Answer. VA will continue to deliver high-quality and cost-effective
health care to all veterans who enroll in the VA health care system to
receive treatment. VA will operate within its appropriated medical care
resources and continue to enhance those resources through effective
collections of alternative revenues. The President's budget request
reaffirms our primary commitment to provide high-quality medical care
to veterans with service-connected disabilities or low income. The
enrollment decision for FY 2002 is not scheduled until August. However,
if availability of sufficient resources becomes an issue, different
options will be considered, including limiting the enrollment of
veterans in the ``priority 7'' enrollment priority. Increased co-
payments to recover more of the cost of care provided to veterans who
are required to make co-payments for their VA health care will be
implemented.
Question 7. We know that Medicare is failing beneficiaries when it
comes to prescription drug coverage. Many would be surprised to learn
that the VA health care system is picking up the slack for the absence
of drug coverage in Medicare. Indeed, large numbers of higher income
veterans are now turning to the VA for drug coverage--and they only
want the drug coverage. Do you believe VA should become a pharmacy--
simply handing out the medications prescribed by non-VA doctors? If
not, are there ways to better ensure that patients come for care,
rather than just prescriptions?
Answer. I do not believe that VA should become a pharmacy. My
belief is based on two important considerations. First, and most
importantly, we believe that coordination of care by one provider is
the cornerstone of high-quality health care. The accurate and up-to-
date medical information that can only be provided by a single Primary
Care provider (e.g., detailed medical history, complete medication use
summary, and other pertinent clinical information) can reduce the risk
that a course of treatment for an individual patient could lead to
significant negative outcomes. Practicing, pharmacy in a fragmented,
non-integrated manner is conducive to medication misadventures. It is
VA's experience that providing pharmaceuticals as an integrated portion
of VA's total health care benefit is both effective and efficient.
Second, dispensing prescriptions prescribed by non-VA doctors would
dramatically increase VA's outlays for pharmaceuticals above today's 11
percent of the VA health care dollar. VA's current outlays for
pharmaceuticals are below those of most managed-care organizations in
the United States, largely for two reasons. First, the infrastructure
is in place to develop and promulgate drug treatment guidelines and an
effective National Formulary process. Second, and perhaps more
importantly, VA's clinical pharmacists are members of primary care
teams.
Question 8. Community-based outpatient clinics are terrific access
points for our veterans. VA's own studies have found that care provided
at CBOCs was similar to care provided at the hospitals. However, VA's
own evaluations only looked at a small number of clinics, and still,
found a lack of available information on clinics run by contractors.
Are you confident that VA is able to manage the great proliferation of
the clinics? And what is your sense of quality and timeliness concerns
at these clinics?
Answer. VHA currently operates about 600 CBOCs and is in the
process of opening close to 100 additional clinics. These CBOCs have
been extremely successful, providing veterans with improved access to
health care services.
VHA recently completed a 3-year study of new CBOCs, using a
statistically significant sample of clinics. The study found that,
overall, CBOCs have met their goals in improving access and providing
quality care, consistent with that provided by VA hospitals. VHA
studies have also shown that, regardless of contractual relationship,
quality of care at the CBOC is comparable to care provided at the
medical center clinics, with the exception of Ophthalmology. The
finding regarding Ophthalmology was not surprising given that it is a
specialty service and is more likely to be available at a VA medical
center setting.
VHA monitors the quality of care at CBOCs through the Performance
Measurement Program (PMP). CBOC patients are included in the random
sampling of VHA cases that are selected for the External Peer Review
Process (EPRP). Given the rapid growth in the numbers of CBOCs, VHA
recently determined that it would increase the number of CBOC cases
sampled through EPRP to provide better data about the quality of care
provided at CBOCs.
Primary Care Clinics are the most frequently accessed clinics at
the CBOCs. Average clinic wafting times at CBOCs nationwide are within
10-percent of the average waiting times at the parent facilities. VHA
includes CBOC data in its assessment of performance relative to VHA's
appointment waiting time goals, which are as follows:
90 percent of requested next available, non-urgent primary
care appointments should be scheduled within 30 days.
90 percent of requested next available, non-urgent
specialty (eye care, audiology, orthopedics, cardiology, urology)
appointments should be scheduled within 30 days.
CBOCs are planned and managed by the local VISN, within the context
of national policies and procedures. Decisions are made by the VISNs
regarding the scope of CBOC services and mode of service delivery,
based on local circumstances, including veteran demographics,
availability of health care providers, demand for services, etc. We
remain confident that we can continue to manage the proliferation of
these clinics in this manner.
Question 9. The VA health care system--with its relatively closed
system of care--could be a wonderful model for other systems. For
example, the recent changes in law to provide all needed non-
institutional long-term care would seem to provide a perfect
opportunity for translation to other health care systems. VAs long-term
care could be the model to prove something to the larger health care
system, which is so woefully inadequate when it comes to long-term
rare. VA has also led the nation on assessing and treating pain for
patients at the end of life. Do you see an opportunity for the VA to
serve as a model for other health care systems? And if so, what will
you do to make it happen?
Answer. VA does see the opportunity to serve as a, model to other
health care systems for providing long-term care in an effective and
efficient manner. Over the past several years, VA has developed and
evaluated a number of geriatric and long-term care models, including
geriatric evaluation and management, home-based primary care, and adult
day health care. VA is also recognized as a national leader both in
training geriatric clinicians for VA and other health care systems and
in pain management at the end of life.
VA believes that the recent changes in law will facilitate our
ability to better coordinate services for veterans who need long-term
care. Specifically, VA plans to standardize the assessment of veterans
referred for long-term care, in order to better target the services
needed by patients over time. VA is also in the process of implementing
three pilot projects for all-inclusive long-term care and one pilot
project for assisted living, as authorized by law. VA health service
research experts carefully designed the evaluation plans both for these
pilots and for VA's overall experience in implementing the changes in
the law. They will be collecting information on patient outcomes,
utilization of services, and other variables over the next three years.
The results of the evaluations will inform VA and other health care
systems of the most effective and efficient ways of providing health
care services to patients with long-term rare needs.
Question 10. Several grant programs for substance abuse and PTSD
were recently awarded. Congress saw these grants as necessary to
compensate, in some cases, for the elimination of inpatient programs.
Before programs are eliminated-like inpatient substance abuse or PTSD-
should VA be doing more to assess the potential effect? Do we at least
need to know if a new type of care is as effective as the old one?
Answer. VHA Directive 99-030 requires that VISNs notify VHA
Headquarters prior to making changes to mental health programs,
including changes in mission, staffing, or bed levels. Proposals are
reviewed by VHA's Mental Health Strategic Health Group (MHSHG) and
forwarded to the Chief Network Officer. Approval must then be obtained
from both the Chief Patient Care Services Officer and the Under
Secretary for Health.
The Directive requires that all proposals include methods used to
monitor the clinical impact of the change and an indication of outcome
measures that will be used to assure continuation of high-quality care
to affected patients. Proposals recommending bed closures must also
include specific plans for assuring:
the availability of intensive case management services and
community-based services;
increased access to outpatient follow-up care;
uniform access to appropriate anti-psychotic or substance
abuse therapies, including medications and psychotherapy;
ready access to crisis management support comparable to
that available to patients with other conditions or healthcare needs;
continuity of care.
Given the social and economic burdens of many veterans who suffer
from substance abuse or PTSD, the availability of the support and
structure of inpatient/residential care may be important for them, not
only in times of crisis but also when working through severe trauma or
addiction issues. Therefore, VHA's MHSHG is engaged in continuous
follow up on those programs that have changed to ensure that quality of
care is maintained.
Question 11. On the subject of spinal cord injury centers, VA
officials in the last. administration made a commitment to add beds and
staff, returning the program to the capacity level mandated in the 1996
eligibility reform law. Still, compliance to the directives was spotty.
What will you do to make sure that these staffing levels will be
maintained? For example, does the budget contain the needed funds to
bring the system up to current staffing levels?
Answer. VHA Directive 2000-022, issued in July 2000, identifies the
number of available and staffed beds for each SCI Center, and
articulates minimal staffing of SCI physicians, nurses, social workers,
psychologists, and therapists. The Paralyzed Veterans of America and VA
conduct monthly collaborative surveys to assess compliance with the
directive. Although recruitment has been challenging, staffing and bed
numbers are increasing. VHA has achieved nurse staffing for 91 percent
of the beds expected within the SCI Centers. The goal is to fully staff
100 percent of the beds as specified in the directive. Network
Directors are charged to devote adequate funding from existing
resources to support this commitment.
Question 12. Many proposals to offer drug coverage to Medicare
beneficiaries are tied to drug management and procurement. One tool VA
uses to get these price breaks is the Federal Supply Schedule. What are
your thoughts today about VA's price protection, in light of the fact
that expanding the list of FSS purchasers will, in effect, raise the
price of drugs for the VA?
Answer. I am concerned that VA prices will increase. VA's price
protection applies to ``covered'' drugs (i.e., prescription drugs
marketed under an NDA from the FDA and licensed biologicals), pursuant
to P.L. 102-585 Sec. 603. Generic and even ``covered'' drugs that sell
below the Federal price ceiling receive only temporary price
protection. Increased access to new non-Government purchasers will
increase the price of drugs as elements of the pharmaceutical industry
seek to abandon their FSS contract or raise prices. Additional access
to the FSS with anticipated per unit drug cost increases might decrease
VA's capacity to provide health care to enrolled veterans. I believe
efficient and effective drug coverage in other organizations is
possible through other methods. Specifically, a private-sector
pharmaceutical benefit management process, like the one used in VA's
health care. system that recognizes all health care as local, can
achieve effective pharmaceutical pricing and distribution without a
link to FSS if properly organized.
Question 13. VA has done excellent work in treating veterans
afflicted with Hepatitis C. Still, there is a sense that there are
veterans with specific health concerns who have not sought treatment.
Do you believe that VA is doing an adequate job of reaching out to
veterans With specific health concerns, like Hepatitis C or AIDS? What
more can be done to treat veterans with such health concerns, such as
those with substance abuse problems, who may not be appropriate
candidates for treatment right now?
Answer. To ensure that veterans with Hepatitis C receive state-of-
art health care services and treatments, VA continues to expand and
refine implementation of its Hepatitis C initiatives. Screening for
Hepatitis C risk factors, followed by blood tests when appropriate, is
performed throughout the VA health care system. For veterans who are
Hepatitis C positive, treatment options are available when clinically
appropriate for patients. All drugs and diagnostic tests approved for
the treatment of Hepatitis C are available for use in VA. If treatment
for Hepatitis C is not appropriate, veterans receive education and
counseling in risk reduction and further transmission, as well as long-
term monitoring or ``watchful waiting.'' During FY 2000, 27,855
veterans had positive lab tests for Hepatitis C infection, and over
70,000 veterans with Hepatitis C infection received care in VA
facilities. In order to reach out to veterans with specific concerns
about Hepatitis C, VA has worked with the American Liver Foundation to
develop an informational brochure to provide all veterans with
important information about Hepatitis C risk factors, natural history,
and testing. This brochure will be distributed to approximately 3.5
million veterans currently utilizing VA medical services.
In the arena of care for HIV-infected veterans, VHA has implemented
policies and procedures for testing and counseling for HIV infection;
updated and improved treatment guidelines for clinicians; conducted
clinician education and training programs on HIV issues, HIV prevention
screening, and risk reduction; and catalyzed HIV research conducted by
VA scientists.
To address the specific health concerns of veterans with particular
needs, a full range of health care services are offered in a variety of
clinical settings. These settings include infectious disease clinics,
homeless health care programs, Vet Centers, mental health programs,
substance abuse programs, women veterans health programs, and primary
health care settings. Provision of the most advanced diagnostic
technology and treatment modalities, in conjunction with attention to
the co-existing health and social problems of veterans with Hepatitis C
or HIV/AIDS, remains a focus of VA.
Question 14. In pre-hearing questions before your confirmation
hearing, I asked you about specific examples where sharing with DoD has
been successful--both in terms of savings and improvements in the
delivery of services. Your response was a less than impressive list of
smaller projects. Do you think VA should be doing more to promote
sharing? What kinds of projects do you envision?
Answer. VA and DoD have made a significant effort to establish a
cooperative relationship with each other. VA's goal is to work with DoD
to create a health care partnership that: (1) offers beneficiaries a
seamless transition from one system to the other; (2) provides
beneficiaries the highest possible return on the human and physical
assets invested in the two systems; and (3) empowers each Department to
fulfill its unique core missions. As described in the FY 2002
blueprint, the President will convene a Veterans Health Care Task
Force. This group will be composed of officials and clinicians from VA
and DoD, leaders of veterans and military service organizations, and
leaders in health care quality to make recommendations for improvement.
The Congressional Commission on Service Members and Veterans
Transition Assistance Report made many recommendations regarding joint
VA and DoD procurement, to include joint procurement of
pharmaceuticals, medical/surgical supplies, and equipment. In response
to that report, in December 1999, VA entered into a Memorandum of
Agreement (MOA) with DoD to combine the purchasing power of the two
Departments and eliminate redundancies. The MOA has three appendices.
One deals with pharmaceuticals; the second encompasses medical and
surgical supplies. The third appendix covers high-tech medical
equipment.
While the negotiations have not always been easy, a major
breakthrough occurred in late calendar year 2000 when DoD agreed to
eliminate their Distribution and Pricing Agreements (DAPAs) for
pharmaceuticals, and instead rely upon VA's Federal Supply Schedule
(FSS) as the primary source for pharmaceuticals. As a result, DoD DAPAs
were eliminated in January 2001, for all pharmaceuticals that are
available in the FSS. This is a major step toward implementing the
intent of the ``Transition Commission.''
A joint VA/DoD Data Management Group is developing data gathering
and assessment plans for medical/surgical items. However, a major
impediment toward standardizing and consolidating medical/surgical
supply items is the lack of a Universal Product Numbering (UPN) system.
VA is currently taking the lead by developing requisite cost-benefit
analyses to support requiring Federal contractors to provide UPNs for
medical/surgical commodities. This proposed requirement will undergo
scrutiny at the Office of Management and Budget under the auspices of
the Office of Information and Regulatory Affairs (OIRA) and will
undergo public rulemaking.
As of March 1, 2001, there are 33 joint VA/DoD national committed
use contracts for pharmaceuticals. The total estimated cost savings in
FY 2000 for both Departments from these contracts were $42.5 million
($30.8 million for VA and $11.7 million for DoD). These savings were
realized from 24 contracts. To date in FY 2001, eight additional
national contracts have been awarded with discounts off the lowest FSS
price, ranging from 0.19 percent to 53.75 percent. Once purchase/
utilization data are available for these eight new contracts, cost
savings data will be updated. Also, as of March 1, 2001, 24 additional
joint contracts are pending award; four joint contracts were not
awarded due to no cost savings afforded the government under the offers
received. It is difficult to project how much additional savings will
be achieved due to the dynamics of the pharmaceutical market place,
i.e., branded products going generic and the clinical strategies
employed by both Departments in the provision of their drug benefit.
Many other drug categories will be considered for joint VA/DoD
contracting activity as the contract period expires for their
individual contracts.
The next major phase of the MOA implementation, converting
Distribution and Pricing Agreements for medical/surgical products to
FSS, and identifying joint opportunities for standardization that would
promote even greater savings, is underway. VHA's Office, of Logistics
will be working With the VA National Acquisition Center and respective
DoD counterparts to facilitate shared acquisition strategies through
the VA and DoD product standardization committees.
VA is pursuing many other sharing activities with DoD, e.g., the
Government Computerized Patient Record, patient safety, depleted
uranium research, the Military and Veterans Health Coordinating Board,
and common treatment protocols for asthma, bad backs, and high
cholesterol. VA remains committed to finding opportunities to share
resources with DoD to expand quality services to veterans in a cost-
effective manner.
Question 15. A number of new quality management programs have been
developed since my staffs 1997 Staff Report on Quality Management. Do
you believe that VA's quality management program is where it should be?
Answer. Quality management is never a completed task. However, VA's
strides in quality and leadership in health rare quality management
were specifically cited at the recent Institute of Medicine briefing
accompanying the publication of their report, ``Crossing the Quality
Chasm.''
The recommendations of your staff report were taken seriously. As
recommended, the Office of Quality and Performance was created to
specifically support the Under Secretary for Health's leadership and
responsibility for the provision of consistent, high-quality care for
veterans. Your report stressed the need for staff dedicated to quality
management. We are pleased to report that a number of highly talented
staff with excellent credentials have been recruited. All have
significant experience and training in quality management, data
analysis, clinical care, and health system operations.
VA is increasingly able to measure and report on quality. The
ability to measure allows us to identify areas for improvement. It also
allows recognition of areas where quality is excellent. In areas of
preventive health, such as cancer screening, women's health care, and
immunization, VA quality is not merely good but is increasingly
surpassing government targets and private sector performance.
For example, improvements in pneumonia vaccination rates, from
rates already above community performance, translate into important
outcomes for veterans. Almost 4,000 lives have been saved because of
improved pneumonia vaccination of patients with chronic lung disease
alone.
Improvements are also occurring in areas of disease treatment. VA
diabetes care programs are increasingly regarded as national models.
Treatment of heart attack patients with aspirin and beta-blocker
medications, and heart failure patients with ACE-inhibitor medications,
is consistently better than reported elsewhere, including major
teaching hospitals. This also translates into the very real outcome of
lives saved.
Our ``Quality Enhancement Research Initiatives,'' the QUERI
programs, are specifically noted in the Institute of Medicine report as
a model for translating the best research evidence into the best
patient care. These ``best practices'' are supported through clinical
practice guidelines and clinical reminders in the computerized patient
record system. The combination of measurement and accountability
provided through our Performance Measurement Program ensures that best
practices are consistently provided.
Increasingly, VA's outcomes are validated in the most prestigious
scientific journals. Dr. Laura Petersen described our quality in heart
care in a recent New England Journal of Medicine article. The fact that
these quality outcomes include all patients is also critical; a recent
article in the Journal of the American Medical Association by Dr.
Ashish Jha found that African Americans fared at least as well, if not
better than, white patients in all of the conditions studied.
VA has also been recognized widely for its progressive approach to
improving patient safety. Our National Center for Patient Safety is
increasingly receiving more thorough ``Root Cause Analyses'' of both
adverse events and close calls. Only through creating a culture in
which people report freely will we learn, and avoid having the same
situations recur. This process has revealed lessons valuable to both
patients in VA and elsewhere, such as a programming defect in a widely
used pacemaker.
VA is a complex organization. Quality management is not an
afterthought or an ancillary program. It is embedded in our core
processes. VHA's strategic goals establish a framework for measuring
outcomes, and the performance management process requires
accountability. In addition to the Office of Quality and Performance
and the National Center for Patient Safety, the Office of the Medical
Inspector is critical for investigating specific issues of concern.
Program leaders in Patient Care Services are responsible for
development of state-of-the-art clinical strategies for providing
optimal care, and the network office must ensure the operational
underpinnings for all of these activities. Each of these offices is
represented on the Under Secretary's Coordinating Council for Quality
and Safety. All leadership offices are represented on the Quality
Management Integration Committee, which meets with field leadership and
quality and safety managers via video teleconference each month for
discussion of critical issues and to share best practices.
VA is also leading in terms of data-driven management of surgical
outcomes. There is no more comprehensive and ongoing evaluation of
surgical outcomes than VA's National Surgical Quality Improvement
Program (NSQIP), or the parallel Continuous Improvement in Cardiac
Surgery Program (CICSP). Continuous improvement in surgical morbidity
and mortality has been sustained for more than a decade. Most
remarkable, though, is that mortality rates in VA surgical programs are
now consistently lower than would be expected on the basis of a
patient's clinical risks. The American Surgical Association has cited
the NSQIP model and is considering its use for surgeon re-
credentialing.
While we have experienced many excellent outcomes, we have
opportunities for improvement. We are working to ensure that care is
not only of consistent, high quality, but that it is accessible. The
30/30/20 access goals are ambitious, yet appropriate. We will provide
90 percent of new primary care and specialty care visits within 30
days, and see 90 percent of patients within 20 minutes of their
scheduled appointment time. Of course, patients with emergencies or
urgent needs are seen as immediately as appropriate.
One of the key challenges for improving access and for monitoring
and improving quality in VA is information management. Good data about
clinical outcomes and core business processes is required. It should be
obtained in a manner that is not intrusive to patient care or
burdensome to the system, and in a manner that extends across all sites
of care. An Information Letter has been released and additional policy
is imminent which requires the provision of quality and safety data in
all contracted care services. As well, we are enhancing mechanisms to
better assess and report on care provided through our CBOCs. This
includes use of electronic data where available and expansion of our
External Peer Review Program (EPRP). Our information systems have
improved and will continue to improve for the dual purposes of
supporting and assuring high quality care.
In summary, improvement in quality and safety in VA are unmatched
in scope, scale, or speed by any other health system. Increasingly,
these improvements are recognized as model systems--by authoritative
external appraisal. We are empathetic to any veteran whose care is
poor, untimely, or dissatisfying. We accept and appreciate the
tremendous responsibility of examining both individual breaches of
quality or safety, as well as the need to ensure that we are a leader
in assessing, supporting, and improving the delivery of consistent,
high-quality care.
Toward identifying gaps in our processes, in information, and in
best meeting the needs of our patients, VHA is embarking on a process
of critical self-evaluation through Baldrige-based self-assessment. The
reward of this effort is in better addressing these issues for the
veterans we serve.
Question 16. Despite the recent improvements in developing better
billing methods, I think there is general recognition that VA's
collections efforts could be better. Given your familiarity with the
collections effort, does it make sense to contract out the collections
function?
Answer. We agree VA's medical care collections could be better. VA
is committed to improving its revenue, collections, and billing
procedures. We are open to the possibility of contracting out
collection functions. In fact, VHA has a contract in place with a
private vendor, TransWorld, Inc., to assist in the collections of third
party claims to insurance carriers. Our experience with TransWorld has
been quite favorable. We have invested slightly over $2 million and
have recouped $57 million. We recognize that identifying and fixing
process deficits must be done at the outset and we will continue to
make these types of improvements. VA also needs to do a better job of
identifying on insurance company bills which services we have provided.
Finally, it is important that we better document services provided to
veterans, and identify the insurance coverage that they hold. Perhaps
the private sector can help with that process.
Currently, VA is running two pilots which contract for the
collections and preparation of bills. Ongoing feedback from these
pilots will be evaluated during the next year.
Question 17. In your testimony today, you indicated that in
actuality, the proposed budget includes $1.2 billion in additional
funds, including $200 million more in Medical Care Cost Fund
collections. What is this increase predicated upon?
Answer. Two factors contribute to the estimated $200 million
additional Medical Care Cost Fund collections. First, collections for
the Medical Care Cost Funds are well above our FY 2001 goal. We are
currently collecting at a rate of $57 million a month for the first
five months. As you know, we now bill reasonable charges rather than a
per them rate. This has greatly contributed to the increased
collections, which we believe will continue in future years. The second
factor is the increased revenue that we are anticipating from increased
pharmacy co-payments as authorized by the Veterans Millennium Health
Care and Benefits Act.
Question 18. Without a detailed budget request, it's difficult to
discuss appropriate funding levels. This is especially true in the
construction account. We do know, however, that we've seen a trend
toward low requests for construction. What can we expect for this
account? Are you willing to push for increased funding?
Answer. A system as large as the VA health care system cannot
maintain quality and productivity over time without appropriate
recognition of the need for infrastructure improvements. We believe
that the VA health care system will require larger construction budget
requests in the future for a variety of reasons: to correct seismic
safety concerns, to provide for an orderly reinvestment in the system's
infrastructure, and to implement CARES decisions.
As VHA proceeds through the CARES process, we expect to gain a more
settled picture of the future need for VHA medical facilities. The
first CARES studies will be done in 2001, and are expected to identify,
among other things, options for reengineering VHA's physical
infrastructure. Implementing these options will no doubt require major
construction funding in many instances, but final decisions will come
after careful consideration of the options available to meet VHA's
health care missions. In the interim, the absence of completed CARES
studies should not prohibit funding of a major project, but careful
analysis is required before such a proposal can be made. For these
reasons, I support the level of construction in the FY 2002 President's
Budget.
Question 19. VA plans to reduce a hospital presence in some areas.
At the same time, we are opening up more and more outpatient clinics.
Both of these will naturally lead to reductions in training
opportunities for medical residents. Do you believe that affiliations
are important to VHA in the 21st century? If so, how can VA maintain
the emphasis placed on teaching, given the budget request?
Answer. VA's medical school affiliations are essential to VA in the
215t century in accomplishing its missions. For over 50 years, VA has
worked in partnership with this country's medical schools and other
academic institutions to provide high quality health care to America's
veterans, train physicians, and train other health care professionals
to meet the patient care needs of VA and the Nation.
The academic mission in VA, as reflected in its academic
affiliations, requires nurturing in these times of dramatic change in
health rare. I will continue to meet regularly with the leadership of
various clinical and academic components of VA to provide my commitment
to their value to VA and veterans' health care. Just like VA health
care, VA's academic affiliates are being impacted by the dramatic
changes that are taking place in health care. We maintain active
dialogues with our affiliates regarding how the affiliations can
contribute substantively to improvement in many complex areas of change
in health care. However, the rapidity of change requires extra efforts
at communication and I am establishing a cadre of VA staff to lead a
group to address VA academic relations. There are many issues to
address, including expanding education and training opportunities in
ambulatory care, primary care, specialty care, care for patients near
the end of life, systematic approaches to improving quality of care,
more effective inter-professional care and education, and more
efficient use of scarce health care resources.
I believe VA.'s academic affiliations are robust and vigorous
opportunities for providing the best approaches for continuous
improvement of health care for veterans while contributing to
strengthened academic medical institutions throughout the country. I
also believe that we must work hard to keep them healthy even in times
of budget constraints.
veterans benefits
Question 20. What will the targeted amount for VBA buy for VBA--how
many people? What kind of technology? What gains in processing and
timeliness will be tied to this funding?
Answer. The $133.5 million requested increase over the FY 2001
enacted budget authority level, will provide for a net increase of 890
IFTE and $89.4 million in increased payroll. This increase includes 701
FTE to counter the expected increased workload from the recently
enacted Duty to Assist legislation and new regulations regarding
diabetes. New legislation impacting the education program requires 193
FTE for projected workload increases. Additional FTE for compensation
and pension (C&P) initiatives, e.g., C&P Evaluation Redesign (CAPER)--
10 FTE, Overseas Benefits Delivery at Discharge--12 FTE, and Systematic
Individual Performance Assessment (SIPA)--80 FTE, are also funded.
Decreases in information technology FTE and loan guaranty FTE
associated with the proposed legislation eliminating the vendee loan
program partially offset these increases.
The requested increase will also provide for continued and new
investments in. technology, including Benefits Payment Replacement
System (VETSNET Migration), Training and Performance Support Systems
(TPSS), Virtual VA, Security and Infrastructure Protection (SIPO),
Configuration Management, Operational Data Store, WINRS, EDI/EFT, and
One VA Telephone Access. Information technology (IT) investments are
requested only after they have passed a rigorous review from the
Department's Capital Investment Board. The Veterans Benefits
Administration (VBA) ensures solid IT investments that will deliver
fully automated systems that are secure and which provide the access
and ease of use that will ultimately produce the kind of accuracy,
timeliness, and customer satisfaction VBA strives to achieve. However,
there will be no spending on new IT initiatives until a comprehensive,
integrated IT Enterprise Architecture has been adopted.
The increase over the FY 2001 enacted level will mitigate the
performance setbacks we will encounter in claims processing and will be
a first step to achieving the Department's goal of processing rating-
related claims in 100 days by summer 2003.
Question 21. You have said that the budget includes a 13 percent
increase in funding for VBA. Is this sufficient to achieve the goals
you have set for VBA? If you had more money for VBA, what would you do
with it?
Answer. VBA believes a 13 percent increase over the appropriated FY
2001 level represents a firm commitment and sufficient resources to
achieving improvements in service and delivery of benefits. The
Administration has designated claims processing as a Presidential
initiative and has made funding for it a priority. This budget will
allow VBA to hire 890 new employees, make IT investments as
appropriate, and identify best practices as it strives to improve the
service and delivery of benefits to veterans and their families. As you
know, it takes 2 to 3 years for a newly hired claims adjudicator to
become productive. Moreover, training, supervising, and mentoring new
hires, which is necessary and invaluable, takes current staff away from
their primary responsibility of processing claims. As such, the
Administration's budget strikes the appropriate balance between
investing in new employees and the immediate task of processing a
backlog of claims.
Question 22. The Veterans Claims Adjudication Commission issued its
report in December 1996. Have you reviewed it as part of your
preparation to become Secretary or before issuing the Transition
Commission Report? As Secretary, do you plan to pursue any of its
findings?
Answer. While I am familiar with the report of the Veterans Claims
Adjudication Commission in general, I did not review the report in
preparation for assuming the responsibilities of Secretary. While the
report was a portion of the body of knowledge available to the
Congressional Commission on Servicemembers and Veterans Transition
Assistance, it did not form the basis for the Commission's report. I
would have to be briefed on the report before making any decisions as
to the desirability of pursuing its findings.
Question 23. In 1991, Congress enacted legislation charging VA to
contract with the National Academy of Sciences to periodically review
the scientific literature to determine associations between health
conditions and exposure to herbicides like Agent Orange. The NAS
reports are intended to advise the Secretary in determining what
conditions warrant presumptive service connection. In 1998 Congress
mirrored this bill, providing a similar process for Gulf War veterans.
However, veterans exposed to ionizing radiation have experienced a more
piecemeal approach to compensation. In your view, is there value in
crafting authority for atomic veterans similar to Agent Orange and Gulf
War legislation?
Answer. We do not see much value in crafting authority for atomic
veterans similar to the Agent Orange and Gulf War legislation. The
primary reason is that many of the diseases that are believed to be
radiogenic commonly appear only after exposure to relatively large
doses of radiation, such as those used in cancer therapy. Applying the
``positive association'' standard does not resolve this issue.
Therefore, any approach that does not address the issue of
radiation exposure levels would be vastly over-inclusive. If Congress
were to draft such legislation, we would recommend that: (1) it not use
the ``positive association'' standard, but rather a standard based on
the probability of causation; (2) it be expanded to cover all veterans
exposed to radiation during active military service, not just those
present at Hiroshima, Nagasaki; or the atmospheric nuclear tests; and
(3) it replace the presumptions established under Public Law 100-321.
Question 24a. Last year, we passed legislation reinstating VA's
duty to assist veterans in developing their claims for benefits. I am
very concerned about the impact that this legislation will have on
veterans' claims. The U.S. Court of Appeals for Veterans Claims ruled
last month, in Holliday, that it could not decide the applicability of
this new law on pending claims until VA had addressed it first. This
may result in remands back to the Board of Veterans' Appeals for
virtually all claims.
A concerted, coordinated effort by VA will be needed to address
this development. All elements within VA--the General Counsel, the
Board, the Regional Offices, and the C&P Service--must work together. I
am concerned that this may not be happening. What is VA's plan to
tackle this? Please specify who is leading the effort.
Answer. Veterans Benefits Administration (VBA) action--C&P Service:
The C&P Service has undertaken four main initiatives to address the
impact of the Veterans Claims Assistance Act of 2000 (VCAA):
It has made regulatory changes to implement the VCAA.
These regulations were drafted in conjunction with input from the
National Service Organizations, the Board of Veterans' Appeals, and VA
General Counsel.
The C&P Service has established interim claims processing
procedures, incorporating the notice and development requirements of
the VCAA. These interim procedures were conveyed to regional offices in
several Fast Letters, conference calls, and via VA Internet sites. This
interim guidance was reviewed for concurrence by VA General Counsel,
who continues to review interim instructions disseminated via the
Internet to field stations.
The Compensation and Pension Service continues to meet
regularly with members of the Board of Veterans' Appeals, General
Counsel, and the Office of Field Operations to coordinate VCAA policy
and procedures. Most recently, during the week of March 12, 2001, the
Deputy Vice Chairman of the Board of Veterans' Appeals met with the
Under Secretary for Benefits, the Deputy Under Secretary for Benefits,
and the Acting Director of the C&P Service to discuss additional steps
to take to minimize the impact of VCAA on pending workload.
The C&P Service has kept the National Service
Organizations informed of VA's proposed policy and procedures to
implement VCAA and has solicited input from these organizations. In
addition, they were consulted while VA was drafting the proposed
regulation. We look forward to their comments on the proposed
regulation, which was published in the Federal Register on April 4,
2001.
Board of Veterans' Appeals (Board) action: The Board expects that
the vast majority of cases pending at the Court of Appeals for Veterans
Claims (CAVC) will be remanded so that they may be considered under the
provisions of the VCAA. In the first five months of FY 2001 (October
through February), we have received more that 1, 100 CAVC remands-an
amount roughly equal to the total number of cases remanded to the Board
during all of FY 1999 (1,412 cases) and FY 2000 (1,060 cases).
Although the Chairman has no authority to tell a Board member how
to decide a case, the Board is not taking the position that these cases
are all automatic remands to the regional office. Board members are
reviewing each case on its merits based on the law currently
available--statutes, court precedents, and precedent decisions of the
General Counsel--to determine the proper outcome.
Among other things, there are appeals the Board can allow--26
percent in 2000--and it intends to allow them. In addition, there will
be situations where it is clear that the regional office had, in fact,
complied with the substance of the VCAA, and such cases can be decided
on other grounds.
Nevertheless, it is likely that there will be a very high
percentage of remands to regional offices. Indeed, we are seeing that
already. The remand rate, which was 30 percent for FY 2000, was 56
percent for the month of February 2001.
The Board is also concerned about continuing to receive cases from
the regional offices, as those offices struggle to comply with the new
Duty to Assist features of the VCAA. Chairman Clark and Under Secretary
Thompson are working together to ensure that the Board continues to
receive appeals from regional offices.
Question 24b. What are the real costs of the new law? What portion
of those costs are new staff time? Where do you plan to spend the
money?
Answer. There are no significant benefits costs associated with the
Veterans Claims Assistance Act of 2000. However, in developing the FY
2002 President's Budget, the C&P program gained 863 direct FTE. Of this
total, 701 FTE, at a cost of $45.9 million, are slated for specialized
work to counter the effects of the recently enacted Duty to Assist
legislation and diabetes regulations. VBA has developed a strategy that
calls for these claims to be worked in newly formed SDN service
centers. The centers are composed of veterans service representatives
(VSR) and rating VSRs, with lower graded employees to perform data
entry and reemployed annuitants to guide and mentor trainees. While
timeliness performance data for FY 2002 remains high, this plan
presents a path toward achieving the Secretary's intent of processing
claims in 100 days by March 2003. The Board does not anticipate any
increased costs based on the VCAA.
Question 25. Last year, Congress also passed significant
enhancements to the GI Bill--increasing the basic monthly benefit,
paying for licensure and certification exams, and covering the
remaining costs of servicemembers' courses after payment from DoD's
tuition assistance. I have been told that these provisions are
projected to double the workload of the education service, adding
further stress on top of some recent increases in your backlog due to
the imaging of claims at one of your four processing centers. What are
you plans to address this new wave of claims?
Answer. The Tuition Assistance Top Off legislation, effective
October 30, 2000, is expected to result in 161,000 new claimants in FY
2001 and 214,000 additional claimants in FY 2002. Legislation allowing
for payment of Licensure and Certification exams became effective March
1, 2001. We anticipate this legislation to generate 25,000 new
claimants for FY 2001 and 100,000 additional claimants in FY 2002.
These provisions could dramatically affect workload and our ability to
process claims in a timely and effective manner.
VBA is planning to address the increased workload through increased
staffing for FY 2002, overtime usage, and the use of Virtual Help
Teams. In addition, the current benefits delivery system, which cannot
efficiently process the new workoad, will undergo programming
modifications. However, systems changes are long-term solutions and
will not have a positive impact by 2002. The proposed budget has money
to enable us to do all these things.
We have already started to. address the increased workload in the
current fiscal year. First, 25 additional FTE were allocated in the
fall, 40 FTE were earmarked in December 2000, and 60 more FTE were
allotted to Education in February 2001. Seasonal employees Will
constitute some portion of the 125 additional FTE because they can be
used effectively during critical periods and make a dramatic impact on
workload. The goal is that the additional resources for increased
staffing in Education will be a top priority for the remainder of FY
2001, as well as FY 2002.
Second, overtime money will continue to be committed as needed
during peak enrollment periods and to combat increased workload from
new legislation. More than $300,000 has been used so far this fiscal
year. In addition, during the workload crisis in fall 2000, mandatory
overtime was implemented at the four Regional Processing Offices (RPOs)
and will be used as needed to control cyclical workloads and increased
workload due to new legislation.
Third, new ways of processing claims were tried and tested in fall
2000. With technology enhancements, RPOs were able to go beyond normal
help teams and use Virtual Help Teams by pointing workstations towards
other RPOs. The electronic environment puts all pertinent information
related to a claim at one's fingertips, regardless of location. This
allows personnel to process claims for another station without having
to be on site physically, thus eliminating travel costs. In addition,
virtual brokering work relieves the burden of having to ship claims to
another office as well as eliminating the potential loss of claims in
the mail. Because RPO workload peaks vary among offices, Virtual
brokering can be used to manage part of the increase in workload.
Question 26. I understand that VBA is hiring additional, previously
not programmed staff to address the growing backlog of claims. Does VA
need a supplemental appropriation for the current fiscal year to pay
for this additional staff? What will VBA do or what initiatives will be
cut short if it does not receive a supplemental appropriation this
year?
Answer. To address the significant increase in workload caused by
recently enacted Duty to Assist and diabetes legislation, VBA has begun
hiring new employees. As you know, it takes 2 to 3 years for a newly
hired claims adjudicator to become fully productive. Consequently, the
earlier they are hired, the earlier they can become productive. The
Administration has identified resources within the FY 2001 budget to
help accelerate the hiring of claims adjudicators and will be seeking
transfer authority to move the resources into VBA. It is important to
note that the Administration is not seeking new budgetary resources,
but new authority necessary to effectuate the transfer.
Question 27. Sadly, our veterans population is aging rapidly, which
means that we must focus on providing them with a place of honor to be
laid to rest. Does the President's budget provide sufficient funds to
move ahead on construction of the six new cemeteries authorized by
Congress in 1999?
Answer. The status of the efforts to establish six new national
cemeteries is described below. Land has been acquired for the Ft. Sill,
Oklahoma and Atlanta, Georgia areas. In addition, full construction
funding was provided in the FY 2001 appropriation for the Ft. Sill
location and full construction funding is requested in the FY 2002
President's budget for the Atlanta location. Progress in identifying
and acquiring land for each of the remaining four locations is ongoing.
Atlanta, Georgia--The Department has acquired an approximately 770-
acre site in Cherokee County, north of Atlanta. Mr. Scoff Hudgens, a
World War II veteran, donated this site. A contract for developing the
cemetery's Master Plan is scheduled to be awarded this summer. The 2002
President's Budget requests $28.2 million for Phase I construction of
this new national cemetery. If these requested funds are appropriated,
the construction contract award is expected in August 2002, and
completion of the construction is expected in May 2004.
Detroit, Michigan--Representatives of the National Cemetery
Administration (NCA) actively worked with the Michigan Veterans Affairs
Directorate, area real estate agents, and the Veterans Benefits
Administration's (VBA) Loan Guaranty officials at the Detroit VA
Regional Office to identify available property for evaluation as a new
national cemetery. Eight potential parcels of land were identified for
further consideration. Pending full evaluation of the characteristics
of each site, the best sites for environmental assessment will be
selected. After all environmental assessments are completed, a
recommendation for final selection will be forwarded to the Secretary
of Veterans Affairs. An appraisal of the preferred site will also be
conducted.
The 2002 President's Budget includes $18 million to be available
for the purchase of land for new cemeteries in the vicinity of Detroit,
Michigan; Pittsburgh, Pennsylvania; and Sacramento, California.
Miami, Florida--Representatives of the National Cemetery
Administration (NCA) and the Florida Department of Veterans Affairs
visited eleven prospective sites in South Florida and developed a
recommendation of ``top sites'' for further consideration. The Acting
Under Secretary for Memorial Affairs and the Director, Florida
Department of Veterans Affairs visited the top three sites in August
2000. As a result, two top sites were selected. Both sites are located
in Palm Beach County.
In October 2000, URS, Greiner, Woodward, and Clyde began conducting
the environmental assessment process on each of the two top sites to
assess the impacts of developing the land for use as a cemetery.
Subsequently, the owner of one site removed it from consideration. The
environmental assessment is being completed for the remaining location,
which is near the West Palm Beach VA Medical Center. Very recently the
EA consultant has identified two factors that will require further
investigation. Realizing the negative potential of these findings, NCA
is directing the EA consultant to expand their review to two additional
sites that had been identified during initial site evaluation visits.
After all environmental assessments are completed, a recommendation
for final selection will be forwarded to the Secretary of Veterans
Affairs. An appraisal of the preferred site will also be conducted.
The 2001 appropriation contained $15 million for land acquisition,
and the 2002 President's Budget requests Design Funding for the
preparation of Construction Documents.
Oklahoma City, Oklahoma--The National Cemetery Administration (NCA)
anticipates that a construction contract will be awarded in order for
construction to begin before the end of 2001. NCA's goal is to complete
construction in the fall of 2003. Design is being made for a ``fast
track'' section that will permit interments to begin prior to full
completion of all construction activities at the new cemetery. NCA
projects that the ``fast track'' section will be available for burials
in the fall of 2001.
The 2001 appropriation included $12 million for construction. All
Phase I development costs are fully funded.
Pittsburgh, Pennsylvania--The Governor of Pennsylvania established
a Cemetery Site Selection Committee to serve as a primary evaluation
mechanism for locating, sites and scheduling site visits. The National
Cemetery Administration (NCA) staff visited Pittsburgh during June 2000
to meet With the State's Cemetery Site Selection Committee. NCA staff
toured eleven proposed sites. In October 2000, the Under Secretary for
Memorial Affairs toured the three top sites. Based upon these visits,
the Under Secretary identified the Morgan Farms site, 15 miles
southwest of Pittsburgh, as the most desirable and feasible location.
The Morgan Farms location was also the preferred site named in the
Cemetery Site Selection Committee's report that was submitted to the
Pennsylvania House of Representatives.
A contract for an environmental assessment of the Morgan Farms site
was awarded in December 2000 and the final report is expected by May
2001. An appraisal of the preferred site will be undertaken as a part
of the environmental assessment contract. If the site is purchased, NCA
anticipates that a contract for master planning will be awarded in the
fall of 2001.
The 2002 President's Budget includes $18 million to be available
for the purchase of land for new cemeteries in the vicinity of Detroit,
Michigan; Pittsburgh, Pennsylvania; and Sacramento, California.
Sacramento, California--The National Cemetery Administration (NCA)
officials worked closely with representatives of the California
Department of Veterans Affairs and local realtors to identify suitable
locations for consideration as a new national cemetery. A joint VA/
State site evaluation team visited nine sites in the Sacramento area
during October 2000. Several potential cemetery sites were identified.
NCA continues to analyze each site's characteristics. Pending full
evaluation of each site the best sites for environmental assessment
will be selected. After all environmental assessments are completed, a
recommendation for final selection will be forwarded to the Secretary
of Veterans Affairs. An appraisal of the preferred site will also be
conducted.
The 2002 President's Budget includes $18 million to be available
for the purchase of land for new cemeteries in the vicinity of Detroit,
Michigan; Pittsburgh, Pennsylvania; and Sacramento, California.
Question 28. VA is long overdue in its efforts to deal in a more
coherent, uniform basis with the U.S. Court of Appeals for Veterans
Claims. Decisions are not properly disseminated; litigation positions
are inconsistent with practice in the field. Who leads the overall
effort to interpret the Court's rulings, to disseminate that
information, and to monitor compliance with the Court's rulings?
Answer. Over time, a multi-tiered system for analyzing and
disseminating Court decisions has evolved at VA. It involves the Office
of General Counsel (OGC), the Board of Veterans' Appeals (BVA), and the
Compensation and Pension (C&P) Service.
The Appellate Litigation Group of the OGC, Professional Staff Group
VII (PSG VII) distributes the court's orders and decisions to BVA, OGC
(PSG II), and the Judicial Review staff of the C&P Service on a daily
basis. The principals of those activities regularly discuss the
decisions and the impact that they will have on operations throughout
VA. Discussions are conducted by phone and e-mail, on an as-needed
basis, and there is a scheduled meeting the first Thursday of every
month. That meeting includes the senior leaders of PSG VII, PSG II, BVA
and the Judicial Review staff of the C&P Service. That group leads the
effort to interpret the court's rulings, disseminate information, and
monitor compliance with the court's rulings. BVA and C&P Service
produce timely written assessments of the court's case law and
disseminate them to decision makers in Washington and in VBA's 57 field
stations. BVA, C&P Service, and OGC frequently participate in
nationwide video broadcasts regarding the court's case law, and each of
the activities participate in training sessions conducted around the
country.
I agree that this process is likely to function most effectively
and efficiently if one organization within VA were to lead the overall
effort. I believe OGC is best positioned to assume this leadership
role, and I have asked VA's General Counsel to develop a plan
describing how he will manage this process.
Question 29. A VA contractor recently completed a report on the
burial benefits administered by VA and found that funeral expenses had
increased faster than the rate of inflation, and that the VA burial and
plot allowances had not even kept pace with the rate of inflation. Do
you have any plans to submit a request for legislation to increase the
benefit rates?
Answer. H.R. 801, the Veterans' Opportunities Act of 2001, Title
III--Memorial Affairs, Insurance, and Other Provisions, Section 301(a)
would increase the burial and funeral expense allowances payable for
service-connected deaths from $1,500 to $2,000, and for nonservice-
connected deaths from $300 to $500. Section 301(b) would increase the
plot allowance payable for veterans buried in state or private
cemeteries from $150 to $300. Pursuant to section 301(c), these amounts
would be indexed to increases in Social Security benefits under section
5312 of title 38. The initial increases in the various rates would be
applicable to deaths occurring on or after the date of enactment of
this legislation.
The adequacy of the current rates must be judged in the context of
the overall package of burial benefits available to veterans, and with
reference to other competing needs for finite budget dollars. The
Government has responded to veterans' burial needs in recent years by
establishing several new national cemeteries and by significantly
enhancing the grant program under which state veterans cemeteries are
established. The State Cemetery Grants Program now provides up to 100
percent of the costs of construction associated with the establishment,
expansion, or improvement of state veterans cemeteries. This
partnership between VA and the states helps to support the Department's
strategic goal of providing veterans with reasonable access to burial
in a veteran's cemetery. Since the 1998 enactment of Public Law 105-
368, which in effect increased the permissible grant amount from 50 to
100 percent of construction costs, there has been an increased interest
from the states in the program, as reflected in the increased number of
pre-applications received.
Given the expanding availability of burial options within both
national and state veterans cemeteries, and the competing demands for
scarce VA resources, we can at this time support only that portion of
section 301 that would increase to $2,000 the burial and funeral
expense allowance for service-connected deaths. The last increase (from
$1,000 to $1,500) occurred in 1988. The greatest obligation is owed to
the families of those who have paid the ultimate price for their
service, and we believe such an increase is warranted in their case.
Our preliminary cost estimate indicates that section 301 would
result in benefit costs of $35 million in FY 2002 and a total benefit
cost of $201 million for FYs 2002-2006. We estimate that an increase in
only the service-connected burial allowance, from $1,500 to $2,000,
would result in benefit costs of $5.3 million in FY 2002 and a 5-year
benefit cost of $31.7 million.
VA is currently conducting a program evaluation and analyzing the
contractor's report on burial benefits that was submitted to Congress
in February 2001. Once VA's evaluation and analysis is complete, we can
provide you with the results.
Question 30a. VBA specifically--and VA generally--has not had a
history of stellar development and implementation of information
technology systems. What strategies do you have for acquisition of new
technology and ensuring VA-wide compatibility?
Answer. VA has adopted several strategies for acquiring current and
emerging technologies, as well as ensuring compatibility across VA's
Administrations and all of its diverse business lines. Foremost among
these strategies is the integration of VA's IT capital investment
process with the Department's capital investment program. This process
requires VA's organizations to specifically address issues of
interoperability when designing, developing, implementing, and
maintaining IT systems. The VA capital investment process also
evaluates an acquisition's ability to advance the idea of One VA
customer service, requiring organizations to address issues regarding
the compatibility and transfer of data.
As a complementary strategy to ensure compatibility in acquiring
information technology, the Department is in the process of developing
and implementing for the first time an enterprise-wide architecture
that will bring together information on all of VA's business processes,
information flows, applications, data, and systems infrastructure. It
will serve as an integrated framework that, when tied to the capital
investment process, will be an integrated framework of principles,
guidelines, and rules for evolving and maintaining existing systems and
acquiring new information technology. In addition, VA is including as
part of its enterprise architecture, an updated Technology Reference
and Standards Model that was developed several years ago and has been
used as a guide in the acquisition of new technology since its
adoption. When submitting an initiative into the capital investment
review process, organizations are required to discuss conformance to
VA's technical architecture to ensure compliance with VA standards.
This adherence will cause compatibility issues to be sharply reduced.
To further ensure compatibility across VA, the Department uses its
corporate IT contract, known as the Procurement of Computer Hardware
and Software (PCHS) Contract, to encourage VA organizations to acquire
computer products that conform to VA's Technology Reference and
Standards Model. PCHS has been successful in implementing a common
infrastructure across the Department.
In summary, VA is aggressively working to ensure that information
technology is used in an integrated and compatible manner across the
Department and that it supports VA's business operations in a One VA
manner.
Question 30b. Do you think VBA is pursuing appropriate strategies?
Has this determination been ratified by any outside entity?
Answer. VBA's experience in developing and implementing IT systems
has not been without problems. However, we believe we are beginning to
turn the corner toward success.
As a specific example, we can look at VETSNET. VETSNET has been
under development far too long. Its development was delayed as new
technologies and technical approaches came. and went. Over time, it has
suffered from a lack of focus, the absence of clear goals and, at some
points, inadequate management. These problems are behind us. The
current VETSNET management plan addresses these problems. What began as
too comprehensive an effort is now focused as a replacement system for
the C&P claims processing system that was developed in the 1960s and
1970s. Still, concern remains about critical issues of performance and
effective systems integration. Therefore, before we proceed to a fully
operational status on VETSNET, we will conduct an independent audit of
the overall system. If it passes all tests, we will go forward with its
implementation on the current schedule. If not, we will develop a plan
to extend the life of the current system and immediately begin the
development of a replacement system.
VA is not spending any new funds on IT until we have defined an
Enterprise Architecture that ends ``stove-pipe'' systems design,
incompatible systems development, and the collection of data that do
not yield useful information. We are convening a panel of world experts
in the area of systems architecture to team with key business unit
decision makers throughout VA to develop a comprehensive Integrated
Enterprise Architecture Plan. It is VA's top management's highest
priority, and in a matter of months, this new plan should be finalized.
All projects will be developed in an open architecture to
facilitate eventual integration into a future system that will fit
within the framework of the Enterprise Architecture previously
discussed. All of VBA's IT strategies will be developed with this
philosophy, as well as ensuring that systems will be part of an
integrated, whole solution to the needs of our veterans.
Chairman Specter. Thank you very much, Mr. Principi.
We will now proceed with 5 minute rounds for the members.
Starting with the Veterans Millennium Health Care and Benefits
Act which provides access to nursing home care for veterans, we
now have the largest aged veterans population in history, over
9 million veterans over age 65. In another decade, 42 percent
of the entire veteran population will be 65 or older. What
strategies is the VA adopting to increase long-term care, and
does this budget proposal address this need?
Mr. Principi. Mr. Chairman, our nursing home census has
gone down since 1998. We have dropped 9 percent, based upon the
statistics I have before me, in the number of veterans who are
occupying long-term beds. And, clearly, with the burgeoning
elderly population, veterans over the age of 65 and, in some
cases, quite a few over the age of 85, we need to do more. And,
we are taking steps to do more, by building a model so that we
clearly know how many beds we are operating on any given day in
our system.
Chairman Specter. Mr. Principi, let's focus on the issue of
resources. Does this budget enable you to apply adequate
resources to this need?
Mr. Principi. Yes, I believe it does. One of our highest
priorities is long-term care. So as we look at our budget and
the allocation of those dollars within medical care, I will
ensure that adequate dollars are provided to long-term care
beds.
Chairman Specter. Would you give the committee a figure as
to what you deem to be adequate for long-term care and an
analysis as to how those funds can be provided from the
existing budget. I am not asking you to make that rather
complex computation at the moment, but I would like to go
beyond the generalization and see what funding you anticipate
for this line and where the money will come from.
Mr. Principi. Mr. Chairman, I can tell you that in our
long-term care budget for 2002, we estimate we will spend in
excess of $3 billion for long-term care. That is an increase
over the fiscal year 2001 estimate of $2.8 billion. So, we are
increasing our long-term care needs by approximately $200
million over the 2001 level.
Chairman Specter. How do you calculate the sufficiency of
that increase compared to the need? And Mr. Garthwaite, do you
want to supplement the Secretary's answer?
Dr. Garthwaite. We believe that there is considerable need
beyond what we are able to meet. Based on the total amount of
appropriations in 2002, we think we will meet the total need
for 17 to 19 percent of long-term care needs of all veterans.
We will meet 100 percent of the mandated needs.
Chairman Specter. Are you saying you will need more?
Dr. Garthwaite. I am saying we will meet 100 percent of the
mandated need for the 70 percent and above, and we will meet
about 17 percent--we currently believe we are about in the 15
or 16 percent range of all long-term care needs. So we will
maintain and slightly gain on the market share for the
nonmandated portion.
Chairman Specter. I do not understand that at all. Will the
$3 billion be adequate to cover the needs for long-term care?
Dr. Garthwaite. Well, it will be adequate to cover the
mandated needs for the 70-percent service-connected and above
who are mandated to get long-term care from the VA. We will
maintain our current effort and slightly increase it for the
remainder of veterans.
Chairman Specter. Mr. Secretary, I would like a written
response on the details as to how you evaluate the need for
long-term care and how the allocated resources will meet that
need.
[The information referred to follows:]
FY 2002 Increase: The FY 2002 increase of $200 million was
developed in two parts. First, state nursing home (NH) increase
was estimated on the basis of the additional workload
associated with activation of nursing homes funded through the
Grants for Construction of State Extended Care facilities
program. Second, VHA's networks, as part of their financial
planning, estimated increases in other institutional and non-
institutional programs. On the basis of (1) their estimated
needs for LTC services in their geographical areas and (2) the
overall FY 2002 budget request, networks provided estimates of
resources that could be devoted to LTC. The total investment
represents a 9.2 percent increase in resources and supports a
census increase of 7,145 (1,879 increase in institutional care,
and a 5,266 increase in non-institutional care).
Assessment of Long-Term Care Needs: VHA uses the LTC
Planning Model to determine demand for LTC services. The model
predicts demand for NH care and home and community based care
(H&CBC) by priority group at a national, VISN, and local level.
It is based on the 1996 Medical Expenditures Panel Survey for
NH care and the 1998 National Home and Hospice Care Survey. The
Federal Advisory Committee on Long Term care endorsed the use
of this model. The model is sensitive to different utilization
rates by age and disability level.
Future Projections: VA is in the process of validating data
from the LTC Planning model within the Administration, along
with other outyear budget estimates. Once completed, we will
forward data projections to the Committee.
As with the demand for all health care by the VA, long term
care demand, and an ability to provide this care, must be
addressed. Policies for the type of long term care to be
provided by priority group and its funding need to be clear. We
will work with you on this issue over the next year.
Chairman Specter. Before my red light goes on, it is
reported that you suggested in a briefing to staff that VA may
have to limit enrollment at some point in the near future. What
do you mean by limiting enrollment?
Mr. Principi. Since 1998, we have seen a dramatic increase
in the number of Category VII's who have enrolled in VA's
health care system. Category VII's are the lowest priority
nonservice-connected, higher income veterans. That number has
grown from approximately 350,000 to over 1 million who have
enrolled in the system. Of that number, approximately 700,000
actually seek their care in the VA health care system.
If that trend in this Category VII continues at the same
dramatic rate as the past few years, we may have to limit the
enrollment of Category VII's. And, Category VII now comprises
20 percent of the care provided in VA health care facilities,
about a third in some of the Networks. New York is an example
of a Network where about a third of their workload is the
Category VII's. Many of these Category VII's come to the VA in
order to have their prescriptions filled. The VA has a very,
very generous prescription program and we see a lot of the
nonservice-connected, higher income veterans are coming into
the system to avail themselves of that benefit.
So, clearly, as we look at the future of the VA, we need to
consider balancing out the needs for our service-connected,
lower income veterans, and balancing the needs of the Category
VII's as well. But, it was strictly Category VII's.
Chairman Specter. The red light went on in the middle of
your answer. So I will observe it and turn now to Senator
Wellstone.
Senator Wellstone. Thank you, Mr. Chairman.
Mr. Secretary, I want to followup on the chairman's
question. By the way, part of my context is the Independent
Budget that a number of veterans organizations put together. A
couple of years ago, veterans organizations were being told you
are always criticizing and to be proactive, so they came up
with their budget. I do not get the arithmetic of this. I want
to be a harsh critic, not of you, of the budget, because,
frankly, I have to believe that both you and Mr. Garthwaite and
others would like to have more resources to work with. I
believe that.
If you just take medical inflation alone, my understanding
is we are talking about $900 million, or there about. We are
only talking about an additional $1 billion now. The CBO, going
back to the Millennium Health Care Act, they estimate that the
noninstitutional--and that is what we want to do, right, want
the veterans to be able to live at home; I would argue we want
all people to be able to live at home in as near normal
circumstances as possible, with dignity--CBO says this will
cost more than $400 million a year. The Independent Budget puts
this at $500 million a year.
And I cannot tell you how important it is. I bet everyone
of my colleagues has had the same experience, that when I am at
the medical center in Minneapolis, you know it well, if I am
visiting a veteran in a room, and say it is a World War II
veteran and he has had a hip replacement, or maybe he is
struggling with a disease, and if I get a minute with his wife
and we go out in the lobby and sit down and talk to one
another, maybe over a cup of coffee, she does not have a clue
what she is going to do when he gets home. She is terrified.
She loves him dearly, but she does not know how she is going to
take care of him.
So, we are talking about $900 million just medical
inflation. Another $400 million or $500 million more just for
the Millennium. Then there is a commitment we have made to
additional mental health care services which could run up to
several hundred million as well. Then there is the spinal cord
injury program that PVA talks about. They want to make sure
that is adequately funded. Then there is the presumptive
compensation of Vietnam veterans for diabetes and other
diseases associated with Agent Orange, that's another $132
million according to the President's Blueprint. And then I
would argue, and I want to ask you about this Heather French
homeless veterans bill that we have introduced, that we ought
to be putting services there. This does not add up.
Tell me how we can possibly give the veterans the health
care that we are committed to giving them with this budget. The
arithmetic does not add up, does it?
Mr. Principi. Again, I am not sure there is any Cabinet
secretary who would not like to have a larger budget.
Senator Wellstone. Just say that.
Mr. Principi. Clearly, that is the case. We fought very,
very hard. I am proud, and it is not a political issue, but
this budget is 63 percent higher than the average percentage
increases over the past 8 to 10 years. It is 14 percent higher
in health care alone over the past 8 to 10 years--average
percentage increase.
So, clearly, Mr. Wellstone, sure, there are lots of
unfunded mandates that we have to comply with--important ones.
The emergency care, to provide veterans with emergency care who
cannot get to a VA hospital----
Senator Wellstone. That is another issue. Thank you, I
forgot that one.
Mr. Principi. It is almost $500 million to private sector
hospitals that will come out of the direct health care system.
So, yes, sir, with more dollars we can certainly do more in
extended care, and we can do more across the board. What we
have to do when you give us a final number is to make sure that
it is spent in accordance with the priorities and dictates of
the committee, as well as our own. If it is a $1 billion
increase, then we will apply it to the important issues of
homelessness and extended care.
Senator Wellstone. I would like to thank you, my time is
going to run out, thank you for adding that additional because
the sort of scandal of this is we have got another 1 million
veterans who do not have any coverage and we are going to try
and cover them through emergency care.
My point is, look, this is not Democrat going after a
Republican administration. I hated the flatline budgets. I was
as openly critical of those flatline budgets as anybody in the
Senate, and I understand what you are saying. But I just will
tell you, and I followup on the chairman, I add up the
arithmetic and I look at the needs and I look at the
commitment, and this budget does not do it. We are going to
have to do better.
Might I just ask you whether or not, not a yes or a no
answer, but I am very focused on--Heather French has been a
Miss America who has been a great advocate, I think her dad was
a DAV member, for homeless veterans--this Homeless Veterans
Assistance Act that I am introducing with Lane Evans and I hope
many other colleagues, I want to get your quick reaction
whether we are going in the right direction with this.
Mr. Principi. I think you are certainly going in the right
direction. I spoke to the Homeless Coalition last week and I
told them of my unswerving commitment to this issue. I want to
see homelessness amongst the veteran population eradicated. I
intend to walk the talk. I intend to establish a Secretary's
advisory committee on homelessness issues. I believe that I
have the commitment of Dr. Garthwaite and his people so we will
be able to dedicate the resources and, we will work with you to
do what is necessary. Such as the grant per diem program that
has done so well, the multifamily housing program, which we
just got approval to make loans so that we can start buying or
building multifamily homes for veterans who are in transition,
homeless veterans. These are the kinds of things we should do.
And we should also hold people accountable to make sure the
dollars we are spending are working, that veterans are indeed
getting jobs, that they are able to stay away from drugs and
alcohol abuse. We need to put the money to the programs that
are working and succeeding, and we need to have milestones and
metrics by which we can determine what is working and what is
not working.
Senator Wellstone. Thank you, Mr. Secretary.
Chairman Specter. Senator Campbell?
Senator Campbell. Thank you, Mr. Chairman.
Mr. Secretary, I was interested in your comments. I think I
can speak for all of us in saying we appreciate the increase in
the budget. But I have to say that Senator Wellstone is right
on. It is still not meeting the needs. The veterans are all in
town now, as you probably know. The last few weeks the American
Legion, the VFW, the Paralyzed Veterans, and so on, are all
coming in and talking to us and they are all pretty much saying
the same thing, that the budget is not keeping up with the
needs.
I also was very appreciative that you are going to try and
focus on increasing the speed of the claims process. That is
one of the biggest complaints we get in our individual offices,
people that have long waiting periods before they are taken
care of.
But with the limited time, I want to focus just a question
or two on the veterans' cemeteries. As I understand it, about
1,000 veterans are dying a day, World War II veterans, and we
are simply running out of space. I am a veteran, by the way,
and I have no intention of availing myself to that process in
any near future. But I would still like to know the answer on
how we address that. Let me ask you just a couple of specific
questions.
Since we do have budgetary constraints, if someone, a
nonprofit individual, has a piece of land and they want to
donate it to the Veterans Administration for the expressed
purpose of using it for a veterans' cemetery, can that be done,
and how do they do that?
Mr. Principi. Yes, it can be done, and it is done. I
believe the new cemetery that will be opened in Atlanta is the
result of a grant by a family of 700 acres to us.
Senator Campbell. Do you need legislative approval to
accept it, or can you just accept it?
Mr. Principi. No, we can accept it once a determination is
made, I believe, that we are going to expand a cemetery in that
area. So, I think, we need to have an understanding that there
is going to be a National Cemetery in a given location, at
which time our people go out and look at the possibility of
land being purchased or granted.
Mr. Rapp. I am Roger Rapp. I am the Acting Under Secretary
for Memorial Affairs, the one involved with doing these new
cemeteries. The cemetery that the Secretary referenced in
Atlanta is the result of a donated property, donated to the
Federal Government to do a National Cemetery, in a spot that we
had identified to do a National Cemetery. The Secretary has
statutory authority to accept donated land.
Senator Campbell. Are those grants of land tax deductible?
Mr. Rapp. Yes, they are.
Senator Campbell. Just one last comment, Mr. Chairman. I
happened to speak to the Secretary just a little bit before we
started and he tells me he is going to be visiting Fitzsimons
in Colorado in the near future. Some years ago when we were
dealing with the base closure acts--you know how tough those
were to get through--when you talk about closing a base, every
community in the area gets very worried about the loss of jobs,
loss of access, and so on.
Fitzsimons has really been a model, and I think you are
going to find that the local community, Aurora and Denver, is
very, very happy with that transition. They have a terrific
interaction with the University of Colorado and with the local
community, and they have used that relationship to interest
some pharmaceutical companies and all kinds of health care
allied industries in moving into that area.
I do not know what other people are doing in other areas
with those closed bases, but you might take a look at that as a
model. They have generated just hundreds of millions of dollars
of private sector money with the little amount that we put into
the transfer.
Mr. Principi. Dr. Garthwaite and his team will look into
the possibility of whether Fitzsimons can be converted into a
VA-university hospital and some of the repair and modifications
that would have to be made to Fitzsimons. So it is under
review, sir. I do not know where it is going to lead, but we
will keep in close touch with your office.
Senator Campbell. Thank you. And one last little comment. I
guess one of the very, very few complaints I have had about the
VA is that when they decide to close a place, they have not in
the past taken the locals into consideration very much. We have
an old hospital called Fort Lyons, it is probably not cost-
efficient to keep open, and it is being closed, as you know, in
southeast Colorado. The biggest complaint down there was, of
course, the anxiety of what happened after it closed. It is
going to be turned over to the State of Colorado. But I would
encourage you, when there are any changes that affect local
communities, to have somebody go out there and do some town
meetings or some old fashioned public hearings so the VA can
hear from people about what is going to happen. That will help
us because I will not get so many angry calls and letters, as
you might guess.
Mr. Principi. Yes, sir, we will.
Senator Campbell. Thank you, Mr. Chairman.
[The prepared statement of Senator Campbell follows:]
Prepared Statement of Hon. Ben Nighthorse Campbell, U.S. Senator From
Colorado
Thank you, Mr. Chairman. I would like to welcome you, Mr.
Secretary, and thank you for appearing before the committee
today. I am looking forward to your testimony which will give
us a better picture of how the Administration is going to
address the serious issues facing the VA as we begin a new
century.
I am encouraged that President Bush has said his goal is to
modernize our veterans' health care system and to speed up the
agency's notoriously slow claims process. And, I see your
appointment, Mr. Secretary, as a powerful sign that this
administration wants to take better care of its veterans.
You have said that the nation can not ignore its debt to
its military veterans. That attitude will go a long way in
tackling the tough job ahead of you. I think we can all agree
that one of our greatest national responsibilities is the
welfare of our nation's veterans. It is critical that we find a
balanced way to make good on the promises to them.
I have looked at the testimony of the many service
organizations testifying at the joint hearings during the past
month, and I have listened carefully to the Colorado veterans
who have met with me.
Though I am encouraged with the overall FY 2002 funding
increase, and particularly the increase for medical care, I
continue to be concerned that we find a way to take care of
what will be an increasing number of elderly veterans. They
will need nursing homes and long term care facilities, they
will need state of the art health facilities and services, and
they will need new ways to access that care. Access to quality
health care for women veterans is also an important issue.
And, I remain concerned for the present backlog that
continues to hinder the adjudication process of veterans'
claims appeals. I understand that is one of your top
priorities, and I heartily support you in that objective.
I look forward to hearing more details of your budget plan
and how you plan to address these issues in an efficient and
effective manner within the proposed budget.
Speaking as a veteran, I want to do all we can to serve
those who have so honorably served all of us.
I thank the chair and look forward to today's testimony.
Chairman Specter. Thank you, Senator Campbell.
Senator Miller?
Senator Miller. Mr. Secretary, I applaud your appointment
and I believe that you are going to be a great Secretary who is
going to be able to look after our veterans and also be, at the
same time, a steward of taxpayer dollars. And I think you can
do both at the same time.
I know that you have spoken about there be a better
coordination between the Veterans Administration and the
Department of Defense. We know that this lack of communication
has resulted sometimes in duplication of services, with some
beneficiaries actually being enrolled in health care programs
with both agencies. Do we have any idea of what could be saved
by eliminating these duplications of service? Have you spoken
to Secretary Rumsfeld?
Mr. Principi. I have, Senator. I have spoken to Secretary
Rumsfeld on several occasions. We are planning a meeting in the
very near future. My staff is in the process now of developing
a strategy paper on how we will proceed with some form of
interagency understanding addressing some of the cross-cutting
issues of both departments. I know they are having their own
share of challenges and problems with TriCare and the costs
associated there.
When I was Chairman of the Congressional Commission on
Servicemembers in Veterans Transition Assistance, we believed
that by consolidating the procurement activities of DoD and VA
in pharmaceuticals and supplies and equipment, that the savings
in this alone would be enormous. And by adopting a national
formulary and using universal product numbers, we could save I
think it was close to $400 million a year. I believe the
Department of Defense IG also found that there were savings in
excess of what the Commission had found.
So I believe there are opportunities for efficiencies,
greater effectiveness that can expand the reach of health care.
It is troubling to me any time we leave money on the table that
goes in someone else's pocketbook, so to speak, and that we
cannot use the money to provide more care to more needy people,
whether they are dependents of military personnel, retirees, or
needy veterans.
I look forward to getting together with the Secretary. I
think we have made great steps, great progress over the past
several years, and I applaud my predecessors for the work they
have done. But I think more can be done, and certainly we need
to do that.
Senator Miller. I hope you will keep us informed as you
move along with that.
Mr. Principi. I will, sir.
Senator Miller. Thank you, Mr. Chairman.
Chairman Specter. Thank you very much, Senator Miller.
Senator Hutchinson?
Senator Hutchinson. Thank you, Mr. Chairman, and thank you
for calling the hearing today. It is very timely.
Mr. Secretary, I want to thank you. I think the last time
we had you before this committee I raised a question about VA
architects and a long-term facility in northwest Arkansas and
you responded promptly and got me the answers I needed. I
appreciate that very much and compliment you for that.
Help me to understand the numbers a little bit. The $23.4
billion is a 4.5-percent increase. That is a $1 billion
increase. And then you said there was another $200 billion that
would be retained----
Mr. Principi. $200 million.
Senator Hutchinson. $200 million, which puts us at $1.2
billion. That is what, a 5----
Mr. Principi. A 5.3-percent increase.
Senator Hutchinson. A 5.3-percent increase.
Dr. Garthwaite, what is medical inflation right now?
Dr. Garthwaite. I am not 100 percent sure. One figure that
has been quoted is 4.36 percent. I would say that the average
increase that employers expect to pay or the Federal Employee
Health Benefits folks, like many of us in this room have to
pay, is closer to 8 and 10 percent.
Senator Hutchinson. My understanding was that health care
inflation is running quite a bit higher than the CPI and
inflation in general. On the surface at least, it would appear
we are going in the wrong direction on this, that the amount of
increase does not really even meet the increased health care
inflation rate.
Mr. Principi. You know, Senator, an interesting point,
since 1994, Medicare costs have increased in the 30's, I want
to say 33 or 36 percent. In that same period, the medical CPI
has gone up about 26 percent. And in that same period of time,
VA's average costs have declined per patient 2 percent. So,
clearly, we are very efficient.
I fully agree with what Dr. Garthwaite said. The medical
CPI is high and, you are right, employers are paying 8 or 10
percent and even more than that a year. And we feel those cost
increases. But we provide a lot of care. When you look at what
has happened in Medicare and the medical CPI, the VA has done
very, very well in controlling cost, bringing cost down, and
moving more to outpatient care. We can do a lot. And with more
resources, we can keep people off of the Medicare rolls and the
Government would be saving money. That is the point I would
make.
Senator Hutchinson. I do not dispute that at all. I think
VA has done an excellent job. To me, that is a concern, with
that aging veteran population, more acute health care needs,
and a very modest increase, how you meet those competing
interests.
The National Cemetery budget increased 11 percent, and the
Benefits Administration increased was it 13 percent?
Mr. Principi. Yes, sir.
Senator Hutchinson. OK. If you have a 13-percent increase
in benefits and an 11-percent increase in the cemeteries, what
is the percentage increase on the medical care side? It has to
be less than the 5.3 percent.
Mr. Principi. It is 4.8 percent. Taking the $1.2 billion
and rounding it to $1.2, it is actually a little above $1.2
billion, but when you divide it up that is what I come up with,
about 4.5 or 4.8 percent in medical care, 13 percent in
veterans benefits, 11 percent in cemeteries.
Senator Hutchinson. How are those priorities determined on
the amount of increase in each area?
Mr. Principi. I think collectively. The senior leadership
team works together and ultimately I have to make a decision.
But it is done in consultation with the Under Secretaries,
staff offices, and the comptroller.
Senator Hutchinson. Mr. Secretary, you mentioned that the
Category VII's had gone from 350,000 to over 1 million and that
700,000 were seeking their care in the VA. So that is doubling
the Category VII's, 350,000 to 700,000 who are using the VA. To
what do you attribute that dramatic increase?
Mr. Principi. I think, clearly, veterans are seeing the
attractiveness of the VA for a high-quality health care
provider, in view of the fact that we have moved from a
traditional hospital-based health care system to a more
contemporary veterans-focused health care system with
outpatient clinics within close proximity of their homes.
Senator Hutchinson. Let me stop you because I think you are
right on and I am about to run out of time. The outpatient
clinics, the whole goal of which was to increase access and to
make health care closer to the veterans, is working. We are
seeing that happen. But now you are talking about capping
enrollment or stopping enrollment.
Mr. Principi. That is one option if it continues to grow.
But, I think ideally we would like to see Category VII's
continue to enroll in the system. We do have to do a better job
of recovering some of the cost from the higher-income,
nonservice-connected veteran. It was always, I believe,
premised on Category VII's contributing more to the cost of the
care.
Senator Hutchinson. I agree.
Mr. Principi. Today, we are collecting less than 15 cents
on the dollar from these Category VII's for cost of care. I
think we need to do better than that.
Senator Hutchinson. Let's work on that, higher-income
veterans, we ought to be able to recoup more----
Mr. Principi. From insurance companies and----
Senator Hutchinson. Rather than keeping them from being in
the system.
I know my time is up, but let me just followup one thing
that was from the briefing you presented to congressional
staffers last week, and I appreciate your doing that. But this
chart indicates on the inventory of unprocessed claims a
projection of going from 309,000 last year to over 600,000.
That is not your fault, you are inheriting this. But that is
very discouraging. What are your plans to get your arms around
this problem?
Mr. Principi. Well, we have now lots of plans in the works.
Certainly, the cornerstone is a task force comprised of the
best minds of people who are in the VA who understand this
area, the private sector management people, and CEO's of
companies who can teach us some lessons they learned. Together
they hopefully can come up with some practical, hands-on
solutions on how to better manage, organize, and process
claims.
We are also taking steps to hire more people. We are
changing the way we do training. We are moving workload around
to more productive stations, to resource centers. We are
looking at technologies that we have implemented which have
caused a logjam in productivity, and to maybe suspend some of
that until we get out from under this mess.
The bottom line is I want to see the inventory at 250,000
claims, and processing times of 90 days in 2 years. We need to
have milestones to get to that point by March 2002-2003, to
hold people accountable, to hold people's feet to the fire, and
measure it every 6 months to see how well we are doing. So, we
are going to implement new steps. We are gong to take some of
the money you have given us to process claims, hire more
people, train them differently than we have in the past, move
workload around, and procure expert systems that will allow a
rating specialist to do work more efficiently. Hopefully, the
combination of these steps, and watching it, will allow us to
get there.
Senator Hutchinson. Thank you, Mr. Secretary. Thank you,
Mr. Chairman.
Chairman Specter. Thank you, Senator Hutchinson.
Senator Nelson?
Senator Nelson. Thank you, Mr. Chairman.
Congratulations, Mr. Secretary. This is the first time I
have had occasion to see you since your confirmation. We
appreciate very much what you are doing.
Mr. Principi. Thank you, Mr. Nelson.
Senator Nelson. During the President's Day recess, I had
the occasion to tour the Grand Island, NE facility and found
that a lot of improvements have been made there. There are
others that are on the schedule for the future. I found it to
be a facility very well-received by the public, but also a
functioning facility. I appreciate very much what your
Administration will do to continue to see that those
improvements occur.
We may be victims of our own success in terms of
utilization as we try to expand the availability of services.
People take us at our word and they avail themselves of our
services. So utilization increases will continue I am sure as
we do that. Likewise, the medical care costs, inflationary
costs, they are only one of the factors. Utilization will
continue on its own even as you try to sort out the challenge
of Category VII members.
What I am hopeful is that we will be able to put together a
budget not just simply for veterans, but overall, for all the
needs of our country and that we will be able to work together
to do this on a bipartisan basis. Otherwise, I am very
concerned that the veterans may be part of the process that is
left out or not included at the level that we need them to be
included.
Let me also comment that as I toured the facility in
Nebraska, there were two things that came to mind. One is that
the President put a statement in the budget that this special
effort would be made to serve veterans who live in an
underserved geographic area. Nebraska, like many other rural
States, would be in that category. I am hopeful that we will be
able to see that promised carried out in a meaningful way.
The final thing that I would like to say, and this is not
just a statement but is, in fact, a question for you, one of
the concerns about the means test is that in a rural area you
can be land rich and cash poor. Is there any thought about
excluding family farm land from the means test in establishing
whether or not a veteran would qualify for care? I would hate
to see veterans have to sell their family farm to realize the
assets necessary so that they can pay for their care. It seems
to me that there may be a way to look at the means test that
takes into account assets that can be reduced to cash in some
meaningful way versus those that cannot. And as a Senator from
a rural State, I have a great deal of interest, I am sure
others share that interest, too.
Mr. Principi. I am sure. It is a unique problem. I think it
is a problem shared in some urban areas as well, where mom and
pop have owned----
Senator Nelson. Right, the family business.
Mr. Principi. They have owned a business and live above the
business, and they have the assets tied up in that grocery
store or clothing store, but they are not wealthy in terms of
how they qualify. We have talked about that, sir, and I think
we need to continue to do so to make sure that it is fair, and
that people can access the system, so that they are not
unwittingly thrown into a Category VII group, but that they can
gain access. I hope by working in a bipartisan manner we can
get the resources we need so we can allow them to come into the
system, irrespective of what category they are--Category VII's
or Category I service-connected. We need to do that.
Senator Nelson. Thank you.
Chairman Specter. Thank you very much, Senator Nelson.
Senator Murray?
Senator Murray. Thank you very much, Mr. Chairman, for
having this hearing. I apologize for being late.
Mr. Secretary, it is great seeing you again. I really want
to welcome you to this committee and let you know how much I am
looking forward to working with you. But I want you to know the
veterans in my State are really delighted that you are doing
this and give you their best as well.
I think you have one of the toughest and most important
jobs in the cabinet because you represent a group of people who
really do not often feel like they have a voice. They have
served our country with honor and pride and they do not like
asking. But they are today in a position of having to ask
because their needs are not being met. I know that President
Bush has promised a $1 billion increase in the VA budget. I am
happy about that but I am also very concerned about whether a
surplus will materialize and we will have the ability to put
that increase in there.
I am curious as to whether you think that increase is
sufficient to address the real needs that are out there for our
veterans, particularly with the health care system. I would
just love to hear your comments on what you think the needs are
in our health care system and what we need to address that.
Mr. Principi. Thank you, Senator Murray, for your kind
words. It is, indeed, the greatest job in the Cabinet and, I
think a very difficult one, and I certainly accept that.
I am pleased with the budget. I need to tell you that the
first couple of weeks after I arrived and saw what OMB passed
back to me, I thought I would have the shortest tenure in
history because I did not think I could survive, or would want
to survive. But, we managed to get it up to a $1 billion
increase. Certainly, as I mentioned to Senator Wellstone, I
know I am not the only one in the budget who believes they need
more money or would like more money, but I am grateful for what
I consider a significant increase relative to past years when--
again, not a political issue--when we did not even get that
high.
I believe it is a workable budget. I know it is only the
first step in the process and the Congress has a say in this
matter as well. But, I believe it is workable. We need to be
careful on how we prioritize for long-term care and other
special programs that the Congress has spoken about. We need to
make a better effort of collecting medical care cost recovery.
You have given us the authority, when I was here as a young
staffer more than 10 years ago, to collect from insurance
companies for the nonservice-connected care of veterans who
have insurance. I do not think we have done a very good job in
collecting that. You have told us we can keep that money in our
medical centers and that it can be used to expand the reach of
care. We have improved, but I think we have a long way to go.
And we have the CARES process underway now to take a look
at our infrastructure to see how it should be realigned. We are
not really in the real estate business, we are in the health
care business. And if there is real estate that we have that
can be used for other purposes, for assisted living or whatever
it might be, that allow us to cut down our infrastructure cost,
more efficiently utilize our infrastructure, I think we can
further expand the reach of health care.
So I think there are things that we can do, and must do, to
improve the delivery of health care. Opening all these
outpatient clinics is a much more effective way to reach
veterans and provide health care rather than having them drive
to an inpatient facility maybe hundreds of miles away. And, we
are doing that. We are transitioning the health care system. So
I think it is a good start.
Senator Murray. I look forward to working with you, hearing
your ideas, and working with our committee to make sure that we
fund these really important needs. I urge you to really have
good communications with veterans because change is not easy
for people who have seen an awful lot of change and do not
trust what the word ``change'' means anymore. I really would
like to work with you on that.
In your testimony, you state that the VA will fully
implement the VA's ``duty to assist'' role. As an author of
that legislation, I want to know exactly what you mean by that.
Mr. Principi. I am sorry we had to get into the situation
where we had to overturn the court and have legislation. The
``duty to assist'' legislation will require us to review
approximately 342,000 claims for well-groundedness. But, we are
allocating $134 million of this budget increase, 13 percent
increase over last year, Senator, that will be used to bring on
800 additional employees into our Benefits Administration. A
significant number will be used to allow us to work on ``duty
to assist'' and the claims backlog. Coupled with other steps,
procurement of expert systems, I believe we will, indeed, fully
implement the legislation and get on with reducing the backlog.
Senator Murray. Great. I am delighted to hear that. Let me
just also thank the Secretary for his work with one of my
constituents. I really appreciate it and hope we can resolve it
very quickly.
Mr. Principi. I hope so. I think we are well on our way to
getting that resolved, Senator.
Senator Murray. Thank you. Thank you, Mr. Chairman.
Chairman Specter. Thank you, Senator Murray.
Secretary Principi, in looking at the overall budget, we do
not have any specification yet as to the breakdown, we simply
have the total figure. I note that the House Committee has
recommended an increase of $2.4 billion as opposed to $1
billion, raising the same question which has been raised at
this hearing, which is whether the administration's budget is
adequate. I am skeptical that it is but I am going to reserve
judgment until I see the fine print as to how you are going to
make your allocations and also until we see how you may
undertake some other measures within the VA to help on the
funding side.
You had mentioned briefly the issue of insurance carriers
paying. The estimate has been submitted that the VA is
collecting less than 15 percent of the money spent on the care
of the priority VII patients. Do you know if that is true?
Mr. Principi. Yes, that is true.
Chairman Specter. What can be done to collect on those
insurance policies which might add substantially to the
resources of the Veterans Administration?
Mr. Principi. Well, certainly, I think one of the first
steps is to identify the veterans in Category VII, the
nonservice-connected, who carry insurance and finding a way to
obtain that data. That is the first thing.
Chairman Specter. Is there any problem with obtaining that
data?
Mr. Principi. Well, I think we just have not done very well
in learning whether veterans have insurance. Dr. Garthwaite is
closer to it, maybe he can just talk about that for a moment.
Dr. Garthwaite. I think there are several aspects that are
important. One is that veterans believe that if they use their
insurance too much, they might lose it. So they do not always
want to share the fact that they have insurance. And it is a
voluntary process for them to give us that information.
Chairman Specter. Dr. Garthwaite, what do you mean it is
voluntary? Does the VA ask the veteran if they have insurance?
Dr. Garthwaite. Right. We ask, but we do not have a good
way to check to see if they have given us accurate information
and told us about insurance policies that they might have.
Chairman Specter. Let's back up just a minute. Does the VA
always ask?
Dr. Garthwaite. We do ask and means test any nonservice-
connected veterans, yes.
Chairman Specter. In what way do you make the request, is
it orally, is it in writing?
Dr. Garthwaite. They sign a form.
Chairman Specter. It is a serious matter to provide false
information to the Federal Government. What I would like you to
do, I may be wrong, but I note some hesitancy in the response
about--well, let me put it this way, give us a written report
as to how you make the request; is it oral, is it in your
regulations, do you put it in writing, do you put on the
writing the kind of language which appears on the tax return
about subject to the penalties if you do not provide an
accurate answer. I think that kind of information is something
VA is entitled to obtain. And you are talking about Category
VII. I know that the Veterans Administration would not like to
cut down on the priority VII people, but you have to establish
your priorities. So, really, in asking them for their
insurance, you are saying to them we need the resources in
order to continue the coverage. But provide the committee in
writing with precisely what is the way of seeking the
information and what you could propose to do to sharpen it up.
Dr. Garthwaite. We would be happy to.
[The information referred to follows:]
Insurance Identification Process: Insurance identification has been
problematic for the VA. Although insurance information is requested
during the enrollment process and is recorded on the VAF 10-10EZ form,
we believe that we miss a substantial number of individuals with some
type of billable insurance coverage.
Questions concerning insurance information are contained on the VAF
10-10EZ. This information is also updated periodically throughout the
year. A veteran can also provide updates at any time to reflect any
changes in data. Medical centers obtain insurance information using
several methods:
1. During the initial interview process: Intake personnel
request the information during the enrollment registration
process. Each veteran is queried for a health insurance card as
well as any applicable spousal coverage. If the veteran has an
insurance card, a copy of the card is made. If the veteran does
not have an insurance card, they are asked to provide the name
of the insurance company that provides their health insurance
coverage. Veterans are also asked to provide their employment
information, as well as spousal employment information.
Insurance and employment information is verified and recorded
into the VistA system.
2. Using the `pre-registration' process: Pre-registration
clerks use a call list to contact veterans two weeks prior to
their scheduled outpatient appointment. The purpose of the pre-
registration process is to update demographic data, including
health insurance information prior to the outpatient visit.
Insurance verification clerks use a similar process and contact
veterans two weeks before an inpatient admission for updating
demographic data, to include all health insurance data.
3. Mailing of Questionnaires: Medical centers can generate
reports detailing information for patients with upcoming
scheduled appointments where there is no listed health
insurance. Staff then mail these patients a questionnaire to be
completed and returned to the medical center. The questionnaire
requests updated addresses, employer, next-of-kin, telephone
number, and pertinent health insurance information.
Insurance Verification Process: Insurance verification is the
process used by the insurance verification clerk to contact the
veteran's insurance company to determine the policy benefits and
exclusions for appropriate billing action. The insurance verification
clerk uses the information in the VHA data system insurance buffer file
for verification with the applicable insurance companies. Information
that is verified includes the name of the policyholder, policy number,
effective date of coverage, expiration date of coverage, type of
coverage, special riders, applicable exclusions and addresses for
claims submissions. The process also includes determining if the
insurance policy covers inpatient, outpatient, mental health, substance
abuse, dental, prosthetics, skilled nursing, and home health care
services.
Pre-certification requirements for inpatient and outpatient care
are obtained during the verification process. The pre-certification
information is particularly important for inpatient care. Many
insurance companies require pre-certification for outpatient services
such as ambulatory surgery and psychiatric treatment. The insurance
verification clerk also determines the percentage that the insurance
will reimburse on submitted claims and obtains information about
deductibles and out of pocket expenses, as well as lifetime maximum
benefits coverage.
After verification of the information, it is entered into the
patient insurance file and is readily available for all users. The
overall benefit for insurance verification and re-verification is that
it enables the VA to send accurate claims to the insurance companies,
decreases the number of claims that need to be cancelled and submitted
to different insurance companies.
Planned Actions: VHA recently initiated several pilots with private
sector firms that indicate that they can assist in identifying billable
data to improve insurance identification. VHA is also in the
preliminary stages of discussing with the Health Care Financing
Administration (HCFA) the development of a match with the Medicare
common working file primary insurance data base that may help us
identify billable insurance for veterans. Finally, VHA is in the
process of revising VA Form 10-10EZ to include a certification that the
information the veteran is providing is true and accurate. The form
will also include a notification of penalties for false reporting.
Chairman Specter. In 1999, the Veterans Administration
requested, and the Congress approved, legislation authorizing
the VA to modify existing copayment rates for a variety of
services. Despite the congressional action over a year ago, no
such changes have been proposed. What do you have in mind on
that, Mr. Secretary?
Mr. Principi. You are absolutely correct, sir. We have not
done so. We are in the process. Dr. Garthwaite and I have
talked about it as late as this morning that we need to get on
with taking a look at the copayments to ensure that they are at
the right level, that they do not discourage or deny veterans
the opportunity to come to the VA for care, and that, at the
same time, especially in the Category VII's again, your higher
income veterans who have average incomes of about $40,000, pay
a more realistic cost for their care.
I think pharmaceutical prescriptions is a good area, where
we have been at $2 for a long time, and we all know that for a
30-day or a 90-day prescription for certain medications, many
Americans, unfortunately, pay hundreds upon hundreds of
dollars. We believe we should raise that a slight amount, to
perhaps $7 for the more expensive medications, that would allow
those dollars to be used to offset some of the cost of the
rapid growth in pharmacy costs, and allow us to provide
prescriptions for more veterans.
At the same time, we need to look at lowering the copayment
for outpatient care. Right now we charge a veteran, nonservice-
connected, $50 to come to a clinic for a simple examination.
That is way too high. That should be more like $15. At the same
time, if we do sophisticated outpatient surgery, whether it be
a cataract surgery or something else, then there should be a
higher copayment for that. So, we need to make our copayments
much more realistic, which would provide us some income, some
revenues for the system.
Chairman Specter. Mr. Secretary, what do you think is a
reasonable period of time to give you to submit to the
committee a report on this copay issue? 60 days?
Mr. Principi. No more than 60 days. Perhaps even as short
as 30 days. We have been at it a long time. So we need to get
on with it. We need to make some decisions and report to you.
Chairman Specter. No more than 60, perhaps as short as 30?
Mr. Principi. Yes.
Chairman Specter. Settle on 45? [Laughter.]
Mr. Principi. Deal.
Chairman Specter. In 45 days, Mr. Secretary, give the
committee a report on the copay issue. You have already
indicated your sensitivity to not discouraging veterans from
seeking the service on an ability to pay. But it ought to be
reevaluated. I believe if we are to hold down spending, in
accordance with President Bush's request, and additional
funding, that we ought to be looking very closely within the
existing resources.
[The information referred to follows:]
Background: Public Law 106-117, The Veterans Millennium
Health Care and Benefits Act authorized the Secretary,
Department of Veterans Affairs, to set an applicable outpatient
copayment rate, to increase the medication copayment amount, to
establish maximum monthly and annual medication copayment
amounts and to establish copayments for extended care services.
Current Status: VA is currently reviewing copayment-setting
options for long-term care, medication, and outpatient
treatment. Proposed regulations are being developed for each
copayment category. Since these proposals are subject to the
Notice and Comment Procedures of the Administrative Procedure
Act, they are required to go through the normal regulatory
process.
The normal process can take eight to ten months once we
submit the proposed regulation to OMB. We intend to work
closely with OMB to expedite this process. It is my intention
that the long term care, revised outpatient, and revised
medication copayment regulations be in effect in October, at
the beginning of the fiscal year. General Counsel and the
Office of Management will assist VHA in this effort. These
regulations have been delayed long enough. This is a high
priority for the VA to complete this work.
Chairman Specter. On Medicare subvention, Mr. Secretary,
what do you think might be doable there?
Mr. Principi. Part of this discussion that we had earlier
in response to Senator Miller's question about more cooperation
with DoD in health care delivery, more coordination and
partnership between the two systems. And I think the same holds
true with HHS. I think Secretary Thompson should be involved in
this discussion because of overlapping eligibilities.
On the whole issue of Medicare subvention, clearly, I would
like to see us get reimbursed from Medicare for the cost of
some of this care that we provide. HCFA has a different view of
the whole thing. But I believe when we coordinate health care
policy in this country, the VA needs to be part of that because
we are such a large provider of health care. So I think
Rumsfeld, Thompson, and Principi need to sit down with our
leadership in health care and talk about some of these issues,
and how we could provide it.
Chairman Specter. Mr. Secretary, I think your work with the
Department of Defense is an excellent idea. Let me ask you to
take the lead on the Medicare subvention idea, and give us a
response, again within 45 days, as to what you see there.
Because as we look at budgetary shortfalls, and again trying to
honor the new President's request that we not add to his
budget, those may be areas where we can come up with the
funding and recognize the President's figure. But there is
going to have to be some innovation and some ingenuity to work
it out.
[The information referred to follows:]
As you know, much work and negotiation on this issue
occurred in the last Administration. We have not had the time
to review this proposal within the Administration. Just as
before, much coordination and cooperation will be needed in the
development of any proposal in this matter.
Chairman Specter. We have a vote in 14 minutes and we have
five more witnesses.
Senator Murray, do you have anything you would like to add?
Senator Murray. Mr. Chairman, if I could just do a quick
followup.
Mr. Secretary, you talked a minute ago about outpatient
clinics, which I think are important in order to bring VA
health care closer to veterans. But I want to make sure we do
not lose sight of specialty care needs, specifically, spinal
cord injuries, which is important in my State. If you could
just comment really quickly on your commitment to that.
Mr. Principi. We are certainly cognizant of the issue, the
Millennium Care Act, that we maintain capacity at 1998 levels.
I believe in all areas, with the exception of substance abuse,
we have done well. We have increased funding. We are very, very
close to meeting our capacity requirements in spinal cord
injury, and we will continue to do so to make sure we maintain
those levels.
Senator Murray. Good. Also, I am concerned about the
staffing needs for specialty care, especially nursing
shortages. If you could comment on that really quickly.
Mr. Principi. Well, I think it is a crisis that we need to
deal with. That is another issue that is very, very important.
I am certainly receiving reports from various sources that not
only in specialty care, but around the system, there is a
shortage of registered nurses. And we are losing some nurses to
the private sector because the salary rates are going up
because of the shortage. When you get to that intensive care,
whether it be nursing home care or spinal cord injury, where
the demands are even greater on the nurses, I think we have to
be more innovative there. I know Dr. Garthwaite, we are looking
at new equipment that allows us to transport spinal cord injury
patients without the nurse having to do a lot of the lifting.
So we are trying to find new ways to bring nurses into the
system; more attractive salary rates, better education,
scholarship programs. But this is an issue that all American
health care is going to have to grapple with.
Senator Murray. Absolutely. Thank you. And I would love to
have you come out to the Seattle VA and see some of the work
they are doing there with spinal cord injuries.
Mr. Principi. I would love to. And I am pleased that we
were fortunate not to sustain damage at Seattle, Portland, or
Vancouver, although, as you know, Senator, we did have some
minor damage at American Lake. We have addressed that, we sent
a team out there.
Senator Murray. He is talking about the earthquake, Mr.
Chairman. Thank you.
Chairman Specter. Thank you, Senator Murray.
Thank you, Secretary Principi, Dr. Garthwaite, Mr.
Thompson, Mr. Rapp, Mr. Catlett. We appreciate your being here.
I would like now to call Mr. James Fischl, Mr. Howie
DeWolf, Mr. Rick Surratt, Mr. Harley Thomas, Mr. Dennis
Cullinan. We very much appreciate the activity and the inputs
of the veterans service organizations. In representing
America's veterans, you have a very high degree of
responsibility. As we so frequently find, we are squeezed on
the scheduling with votes at 11. But we do appreciate your
being here.
Let us start with you, Mr. James Fischl, Director of the
Veterans Affairs and Rehabilitation Commission of the American
Legion.
STATEMENT OF JAMES R. FISCHL, DIRECTOR, VETERANS AFFAIRS AND
REHABILITATION COMMISSION, THE AMERICAN LEGION
Mr. Fischl. Thank you, Mr. Chairman. Good morning, Mr.
Chairman and members of the committee. The American Legion
appreciates the opportunity to appear before you this morning.
Our submitted statement outlines what we believe are VA's real
funding needs for fiscal year 2002. Our budget recommendations
are unchanged from those initially presented to this committee
last September by Commander Ray Smith.
In the fiscal year 2002 outline for the Department of
Veterans Affairs, the President calls for $1 billion increase
for the entire VA. Simply put, the American Legion believes
that this is not good enough. It is not good enough to continue
to provide quality health care for eligible veterans. It is not
good enough to offset fixed cost increases and medical
inflation, and to address long-term care mandates contained in
the Millennium Act. It is not good enough to support a strong
medical and prosthetic research program. It is also not good
enough to hire and train enough veteran service representatives
to expedite the delivery of earned benefits for veterans and
for their dependents.
The American Legion recommends a minimum $1.3 billion
increase in health care appropriations for fiscal year 2002.
Maintaining current health care services alone requires nearly
a $900 million increase. The Veterans Health Administration has
made significant progress over the past two fiscal years in
correcting years of funding neglect and now is not the time to
take a step backward from these recent gains.
The American Legion supports Medicare subvention and
generating new revenue sources for Veterans Health
Administration. We believe that the G.I. Bill of Health is a
large part of the solution to VHA's annual budgetary dilemma.
It is up to this Congress to provide VHA with the tools it
needs to help improve its own financial situation.
In the past there has been much opposition to Medicare
subvention. And as we heard this morning, part of the problem
seems to be collection of benefits. We feel very strongly that
collection of benefits is something that can, and should, be
done. We look forward to the report that the VA will make on
how they will collect money from third party sources. We
believe that third party revenue is extremely important to the
streamline of funds into the Department of Veterans Affairs.
The American Legion over the past few years supported a
number of initiatives within VHA and VBA to improve the
efficiency and effectiveness of service. The American Legion
will continue to support reform that clearly enhances services
to veterans.
Mr. Chairman, the American Legion notes for the record that
the House Veterans' Affairs' Committee has called for a $2.1
billion increase in discretionary VA spending, stating that the
Administration's recommended $1 billion, or 4.4 percent,
increase outlined by Secretary Principi would just about keep
veterans health care even. The American Legion urges this
committee to act in the same bipartisan spirit as your
colleagues in the House and to recommend an appropriate
increase.
The American Legion looks forward to working with this
committee to seek a long-term solution to VA's recurrent
problems. We applaud your positive comments this morning that
express the need for additional revenue. We look forward to
working with you and joining with you in recommending an
adequate increase in VA's discretionary budget for fiscal year
2002.
Mr. Chairman, that concludes my remarks, and I will be
happy at some point to answer any questions the committee may
have.
[The prepared statement of Mr. Fischl follows:]
Prepared Statement of James R. Fischl, Director, Veterans Affairs and
Rehabilitation Commission, The American Legion
Mr. Chairman and Members of the Committee:
Thank you for the opportunity to appear before you today to express
the views of The American Legion concerning the Fiscal Year (FY) 2002
Department of Veterans Affairs (VA) appropriations. Last September, The
American Legion's National Commander Ray G. Smith offered many of these
same recommendations during a joint session of the Veterans' Affairs
Committees. The National Commander called for an overall increase in
discretionary spending of approximately $1.75 billion in appropriations
for VA in FY 2002. The purpose of the joint hearing was to paint a
clear budgetary picture for the next administration and Congress. These
recommendations were also provided to the major political parties, to
all incumbents seeking re-election, and to those candidates who
requested copies of the testimony.
The American Legion believes the formulation of the VA budget must
be based on the needs of America's veterans, especially those with
service-connected disabilities. This is especially important if the
Department of Defense (DoD) plans to effectively resolve its
recruitment and retention problems. America must honor those promises
(implied or not) made previous generations of veterans. The American
Legion believes taking proper care of those who have already served is
the linchpin to future veterans. Veterans and their families are DoD's
very best recruiters. Young men and women considering military service
will seek out active-duty personnel, veterans and their family members
for advice. Their voices will carry more weight in the decision process
than slogans, recruitment materials or glowing promises.
Honorable military service must provide a veteran with more than
individual pride, personal dignity and self-respect. Broken promises,
hollow pledges and meaningless gestures do not strengthen national
resolve, build morale, or promote unselfish devotion to duty. The
thanks of a grateful Nation must be much more than holidays and
parades. Long after the guns are silenced, the parades are over and the
dead are buried, medals and citations do not help feed, house, educate
or heal a veteran.
Mr. Chairman, The American Legion notes for the record that the
House Veterans' Affairs Committee has called for a $2.1 billion dollar
increase in discretionary VA spending, stating that the
Administration's recommended billion-dollar, 4.4 percent increase
outlined by Secretary Principi would ``just about keep veterans health
care even.'' The American Legion urges this Committee to act in the
same bipartisan spirit as your colleagues in the House and to recommend
an appropriate increase.
Over the years, Congress has implemented an array of programs
designed to meet the needs of the veterans' community. Many veterans
have never turned to VA for any assistance until now. Many of them
never thought that VA would become an important part of their lives,
but due to external factors (time, money and health), VA has become
their life support system!
In addition to the specific budgetary recommendations outlined
below, The American Legion believes Congress needs to focus on other
budgetary solutions that involve both mandatory and discretionary
funding. Medicare subvention is one such issue. Why must a Medicare-
eligible veteran have to pay for treatment from VA for a nonservice-
connected medical condition out of his or her own pocket, especially if
he or she has purchased Part B? Congress allows VA to bill, collect,
and retain third-party reimbursements, except Medicare. Why? Medicare-
eligibility is not, and never has been, a priority or criteria for
treatment in VA. When VA treats a Medicare-eligible veteran for a
nonservice-connected condition, the veteran is billed. If these
Medicare-eligible veterans want to seek health care in VA facilities,
why can't they use their Medicare dollars to cover the cost of care for
nonservice-connected medical conditions?
TRICARE is another such issue. All military retirees are eligible
to seek treatment in VA medical facilities. Should they receive
treatment for nonservice-connected conditions, the veteran or TRICARE
will be billed. If the military retiree receives a prescription from
VA, he or she can get the prescription filled at no charge in a DoD
pharmacy. If the prescription is filled in the VA pharmacy, he or she
may or may not have to pay a copayment (depending on the status of the
veteran). This does not make sense, since the Federal government buys
the medications for both agencies! This is but one instance where
greater cooperation and coordination between VA and DoD could provide
better quality, more timely and accessible health care coverage for all
veterans and their families.
The American Legion greatly appreciates the actions of all Members
of Congress regarding the increases in VA health care funding for FY
2000 and FY 2001 of approximately $3 billion. The American Legion
believes such an increase was long overdue and has allowed VA to better
meet the needs of veterans seeking care for their many medical
problems. The American Legion believes VA should continue to receive
full funding in to order to continue providing world-class health care.
However, in order to do so, the Veterans Health Administration (VHA)
requires just a billion dollars in new funding each year just to
maintain existing services. With a mediocre budget request from a new
Administration, the veterans' community must, once again, turn to
Congress to make sure ``no veteran is left behind.''
The American Legion is very appreciative that Congress has realized
that the flat-line funding imposed on VA health care under the Balanced
Budget Act of 1997 was a bad idea. Just like the Medicare and Medicaid
programs, the VA health care budget requires an annual increase to
maintain its existing service level and to fund new mandates. For
years, VA managers were asked to do more with less. The recent funding
increases now allow VHA to do more with more, and will repair some of
the problems related to long patient waiting times and limitations on
access to care. Congress must not allow the recent funding gains to
regress back to the day of doing more with less.
The past eight years have witnessed a significant reorganization
and realignment of VHA resources and programs. Many dramatic and bold
changes were initiated to improve VA's ability to meet the health care
needs of the veterans' community. Now over four million veterans seek
their health care in VA medical care facilities and even more veterans
would come, if additional resources were available to cover the cost of
care. VA continues to provide outstanding quality care that is
recognized and praised by health care critics internationally. VA's
medical research is still, dollar-for-dollar, the Nation's best
investment. Quality, efficiency and effectiveness are the hallmarks of
today's VHA.
Congress must continue to support increased VHA funding to maintain
a world-class health care system. There are precious little additional
efficiency savings expected throughout the system. Yet, those veterans
now enrolled and using the system will continue to rely on VHA for the
foreseeable future. Therefore, The American Legion believes that
Congress must examine how to balance the annual appropriations process
with additional funding that will not be offset by the Office of
Management and Budget (OMB). The American Legion believes that a
strategic goal of VHA should be to seek opportunities to increase
funding sources, both appropriated and nonappropriated.
The overall guiding principle for VA must be improved service to
veterans, their dependents, and survivors. This requires improving
access to and the timeliness of veterans' health care, increasing
quality in the benefit claims process, and enhancing access to national
and state cemeteries. Specific American Legion objectives yet to be met
by Congress include:
Set the veterans' health care system on a sound financial
footing for meaningful long-term strategic planning and program
performance,
Improve clinic appointment scheduling for access to
medical treatment,
Enact Medicare subvention legislation,
Establish pilot programs to provide health care to certain
dependents of eligible veterans,
Improve cooperative arrangements between VA and DoD's
TRICARE system,
Reduce the benefits claims backlog and improve the quality
of the claims process,
Continued enhancement of the Montgomery GI Education Bill,
Repeal of section 1103, title 38, U.S.C., removing the bar
to concerning service-connection for tobacco-related illnesses,
Increase the rate of beneficiary travel reimbursement, and
All third-party reimbursements collected by VA should be
used to supplement, rather than offset, the annual Federal
discretionary appropriations.
The American Legion offers the following budgetary recommendations
for FY 2002:
budget proposals for selected va programs
----------------------------------------------------------------------------------------------------------------
FY 2001 Appropriations The American Legion's Proposal
----------------------------------------------------------------------------------------------------------------
Medical Care............................ $20.2 billion $21.6 billion
Medical and Prosthetic Research......... 350 million 375 million
Construction:
Major................................. 66 million 250 million
Minor................................. 166 million 175 million
Grants for State Extended Care 100 million 80 million
Facilities.............................
National Cemetery Administration........ 109 million 115 million
State Cemetery Grants Program........... 25 million 25 million
VBA's General Operating Expenses........ 1.08 billion 1.2 billion
----------------------------------------------------------------------------------------------------------------
medicare subvention
Public Law 105-33, the Balanced Budget Act of 1997, established
VA's Medical Care Collection Fund (MCCF) and requires that amounts
collected or recovered after June 30, 1997, be deposited in this
account. Beginning October 1, 1997, amounts collected in the fund are
available only for furnishing VA medical care and services during any
fiscal year; and for VA expenses for identifying, billing, auditing,
and collecting of amounts owed the Federal government fore such care.
Public Law 105-33 also extended to September 30, 2002, the following
Omnibus Budget Reconciliation Act (OBRA) provisions:
Authority to recover co-payments for outpatient
medications, nursing home and hospital care;
Authority for certain income verification; and
Authority to recover third-party insurance payments from
service-connected veterans for nonservice-connected conditions.
The Health Service Improvement Fund was established to serve as a
depository for amounts received or collected under the following areas
as authorized by title 38, U.S.C., Section 1729B:
Reimbursements from DoD for TRICARE-eligible military
retirees;
Enhanced-use lease proceeds; and
Receipts attributable to increases in medication co-
payments.
The Extended Care Revolving Fund was also established to receive
per diems and co-pays from certain patients receiving extended care
services authorized in title 38, U.S.C., Section 1710B. Amounts
deposited in the fund are used to provide extended care services.
Congress is providing VA with the authority to bill, collect,
retain, and use revenues from sources other than Federal
appropriations. However, the country's largest health care insurer
(Medicare) is exempt from billing; yet, its beneficiaries are welcomed
and encouraged to receive treatment in VA medical facilities.
Currently, approximately 10.1 million veterans are Medicare-
eligible solely based on their age. Criteria for Medicare-eligibility
are different than eligibility for treatment in VA. In the VA health
care network, certain veterans are eligible for treatment at no cost
for medical conditions determined to be service-connected. Medicare-
eligibility is not a priority or criteria for health care at no cost in
the VA health care system. Other veterans are eligible for treatment at
no cost, because they are economically indigent. All other veterans
must pay for treatment received.
Medicare subvention would allow VA to seek reimbursement from the
Health Care Financing Administration (HCFA) for treatment of
nonservice-connected medical conditions of Medicare-eligible veterans.
VA and HCFA should explore either the Fee-For-Service or
Medicare+Choice options or both. Medicare-eligible veterans should not
forfeit their Medicare health care dollars because they prefer VA
health care to health care offered in the private sector.
More than 734,000 Medicare beneficiaries have lost HMO coverage
over the past two years and another 934,000 seniors will be dropped by
their HMO plans next year. Many VA-eligible beneficiaries are included
in those dropped from coverage and will eventually come to VA for care.
The argument that VHA is already reimbursed for its Medicare population
and that Medicare subvention will result in double funding is mistaken.
VHA is now mandated to provide care to all seven priority groups. As
more Medicare-eligible veterans seek first time care in VHA, health
care costs and subsequent waiting times will increase. It is imperative
that Congress examine this issue and take the actions necessary to
ensure that VHA receives all funding necessary to execute its health
care mission with quality and in a timely manner.
Medicare subvention for VA must be included in any planned Medicare
reform legislation passed in the 107th Congress. Access to VA health
care is an earned benefit. No Medicare-eligible veteran, treated for a
nonservice-connected medical condition, should be deprived of his or
her Federal health care insurance dollars to pay for the care received
in a VA medical facility.
veterans health administration (vha)
The American Legion commends VHA for the evolutionary changes made
over the past several years. Most, if not all, of these alterations
were long overdue and necessary. This includes eligibility reform,
enrollment, the reorganization of the 172 medical centers into 22
integrated service networks, the elimination of certain fiscal
inefficiencies, and the expansion of community-based outpatient
clinics. For many years, VHA's annual budget appropriation was the
guiding principle behind its management decisions. To a degree this is
still true. However, today there is growing evidence that VHA strategic
planning will help guide future budget development.
The primary short-term objectives of VHA must be to improve patient
access and health services delivery. The American Legion's VA Local
User Evaluation (VALUE) guidebook cites patient access as the largest
single source of continuing veteran complaints. In accordance with its
strategic planning, VA annual inpatient admissions have decreased by 32
percent since 1994; ambulatory care visits have increased 35 percent.
However, in some areas, like substance abuse, the number of veterans
actually being able to access treatment has declined. This phenomenon,
along with a large decrease in administrative and clinical staff, and a
significant increase in patient enrollments over the past few years,
has placed a huge strain on VHA's ability to meet its workload in a
timely and consistent manner. As VHA becomes more proficient in
attracting new patients, it must also provide consistent access to care
across all 22 Veterans Integrated Service Networks (VISNs).
Currently, the national average waiting time for a routine, next-
available appointment for Primary Care/Medicine is 64 days (with a
range of 36-80 days). The next available appointments for specialty
care:
------------------------------------------------------------------------
Average
Specialty Care Days Range
------------------------------------------------------------------------
Eye Care (Ophthalmology & Optometry).......... 94 42-141
Audiology..................................... 50 22-91
Cardiology.................................... 53 19-78
Orthopedics................................... 47 12-69
Urology....................................... 79 39-108
------------------------------------------------------------------------
There are additional concerns about the average clinic appointment
waiting times for dermatology and pulmonary clinics. However, these
specialty clinics are not included in the VISN director's performance
standards. Therefore, no national average waiting times were reported.
These waiting times indicate that there are serious access differences
between VA health care and private sector health care.
There are also reported concerns about long distances that veterans
in rural areas have to travel for certain care. For example, veterans
in eastern Montana must travel nearly 700 miles to Fort Harrison, MT
for routine inpatient surgery. For complex surgical procedures, these
same veterans are required to travel to Salt Lake City or Denver. This
excessive travel places great strain on veterans and their families.
Since 1994, the Miles City, MT VA Medical Center has reduced its
payroll over $7 million per year by eliminating nearly 145 full time
employee positions. The American Legion questions why contract services
for required surgery have not been acquired to reduce excessive travel
requirements?
In some cases, The American Legion believes VHA has gone too far,
too fast in attempting to improve its fiscal efficiency. Veterans
should not have to increase their travel time for the benefit of VA.
Rather, VHA needs to improve its cooperation with other federal, state
and private health care providers to improve the quality and timeliness
of care for veterans.
VHA's short-term and long-term future must be clearly defined to be
responsive to the needs of the veterans' community. All individuals who
enter military service should be assured that there is a health care
system dedicated to serving their needs upon leaving the military. That
concept is especially important to disabled veterans and military
retirees. The GI Bill of Health would ensure that all honorably
discharged veterans would be eligible for VA health care on a permanent
basis, as they would fall into one of the core entitlement categories.
A unique feature of the GI Bill of Health is that it would also permit
certain dependents of veterans to enroll in the VA health care system.
The American Legion advocates that dependents of veterans be allowed to
use the system and that VA retain any third-party reimbursements for
treatment. An additional significant step will be to enact VA-Medicare
subvention.
At the current workload level, VHA requires an annual appropriation
increase of approximately $1 billion to maintain current services and
meet its prosthetics and pharmacy costs. The amount of potential
efficiency savings is decreasing yearly. The projected $3 billion
funding increase over FY 2000-2001 must compensate for the flat line
budgets of FY 1997-99, and fully fund the provisions of the Millennium
Act involving emergency and long-term care, Hepatitis C treatment.
Consequently, there is a continuing need to adequately fund VHA's
uncontrollable cost increases at an acceptable level in order to
maintain capacity in the Special Emphasis Programs (Mental Health, SCI,
Blind Rehab, etc).
Change within VHA, over the past several years, has been the result
of a series of small steps. The American Legion acknowledges that the
progress made within VHA has been extraordinary. However, this progress
has to be sustained and reinforced. In order to accomplish this goal,
Congress must unlock the creative potential of VHA to develop
alternative revenue sources to complement the annual appropriations
process, but these additional sources of revenue should not be used to
offset the appropriated dollars from Congress.
At a recent VA planning meeting, VHA unveiled six strategic goals
to be accomplished by 2006:
Put quality first,
Provide easy access to medical knowledge, expertise and
care,
Enhance, preserve and restore patient function,
Exceed customers' expectations,
Maximize resource use to benefit veterans, and
Build healthy communities.
The American Legion believes these are important goals. However, we
believe VHA must explore all opportunities to develop alternative
revenue sources to complement its annual appropriations. To do less
will continue to force VHA to solely rely on the annual budget process
to establish patient treatment priorities. There is a distinct
possibility that if future funding does not keep pace with the growing
needs of veterans who seek treatment through VHA; the current open
access to all seven-priority groups will close.
The American Legion recommends $21.6 billion in VHA.
tricare
The most significant recent change in military health care is the
introduction of TRICARE (DoD's regional managed care program). TRICARE
is facing many challenges to providing and maintaining a quality health
care delivery system for active duty military personnel, military
retirees, and dependents.
DoD continues to confront severe administrative problems with
TRICARE. The American Legion is extremely concerned how DOD will fix
these problems and if DoD can guarantee TRICARE's long-term success.
There are multiple reasons why TRICARE is failing to meet the
expectations of its beneficiaries:
Infrastructure and financial problems,
Problems with provider networks--resulting in weak network
links to subcontractors,
The inability to attract and retain qualified health care
contractors,
No financial tracking system outside of the military
treatment facilities,
Difficulties in processing claims in a timely manner,
TRICARE lacks portability between all 12 regions, and
Military retirees and their dependents are required to pay
an annual enrollment fee.
The American Legion believes that VHA can greatly assist DoD
through expanded authority to provide care to TRICARE beneficiaries.
With limited budgets, both VA and DoD must discover innovative ways to
provide care to active duty personnel, to all veterans and military
retirees, and to eligible dependents.
Congress recognized the utility of having VHA play a greater role
in the treatment of TRICARE beneficiaries when it passed the Veterans'
Millennium Health Care and Benefits Act (PL 106-117). This legislation
requires VA and DoD to enter into an agreement to reimburse VA for the
cost of care provided to retired servicemembers who are eligible for
TRICARE and who are enrolled as Priority 7 veterans. These veterans
would not be required to pay VA inpatient and outpatient copayments.
The program is to be phased in as DoD enters into TRICARE contracts
after November 30, 1999.
Five years ago, it was impractical to suggest that VHA was capable
of assisting DoD in resolving many of its patient treatment problems.
Today, although not without concerns of its own, VA is in a much better
position, both financially and organizationally, to assist with the
delivery of health care to DoD beneficiaries. The American Legion
believes that VA and DoD should better coordinate medical care and
services to the extent possible, thereby eliminating duplication of
effort and achieving greater cost efficiencies. With proactive
planning, VHA can become the largest single provider of health care to
America's veterans, military retirees and their dependents. DoD could
then assume the responsibility of providing health care to active duty
servicemembers, Reserve Component members and their dependents.
medical and prosthetic research
The contributions of VA medical research include many landmark
advances, such as the successful treatment for tuberculosis, the first
successful liver and kidney transplants, the concept that led to
development of the CAT scan, drugs for treatment of mental illness, and
development of the cardiac pacemaker. The VA biomedical researchers of
today continue this tradition of accomplishment. Among the latest
notable advances are identification of genes linked to Alzheimer's
disease and schizophrenia, new treatment targets and strategies for
substance abuse and chronic pain, and potential genetic therapy for
heart disease. Many more important potentially groundbreaking research
initiatives are underway in spinal cord injury, aging research, brain
tumor treatment, diabetes and insulin research, and heart disease,
among others.
VA devotes 75 percent of its research funding to direct clinical
investigations and 25 percent to bioscience. Patient-centered research
comprises one of every two dollars spent on research within VA. In FY
2001, VA's appropriations funding for research is $350 million.
Gulf War Veterans' Illnesses
The American Legion continues to actively support Gulf War veterans
and their families, as it has since August 1990. The American Legion
created two programs specifically for Gulf War veterans, the Family
Support Network in October 1990, and the Persian Gulf Task Force in
October 1995. Today, The American Legion serves Gulf War veterans and
their families at the community, state, and national levels through
15,000 local posts and an array of programs and services.
Thousands of Gulf War veterans, who suffer undiagnosed illnesses
with a range of symptoms, know as ``Gulf War veterans' illnesses,'' are
not receiving adequate care or compensation from VA and DoD. As the
number of sick Gulf War veterans has continued to increase, it is
apparent that VA has narrowly interpreted and implemented the Persian
Gulf War Veterans' Benefits Act (Public Law 103-446), effectively
denying compensation to some of the veterans the law was designed to
help. It is clear that the intent of Congress was not only to
compensate Gulf War veterans with conditions that can not be diagnosed,
but to also compensate sick veterans diagnosed with poorly defined
conditions such as chronic fatigue syndrome and fibromyalgia. As a
result of VA's narrow interpretation of PL 103-446, it has become quite
clear that legislation is needed to amend Title 38 USC Sec. 1117,
Compensation for Disabilities Occurring in Persian Gulf War Veterans.
The American Legion makes the following recommendations in addition
to the legislative course of action discussed above:
VA and DoD should conduct their respective exams in a
standard and uniform way as well as create a database that will merge
the individual data from both exams so that patterns in health can be
better analyzed,
VA and DoD should aggressively move to educate its medical
doctors about newly defined illnesses (Chronic Fatigue Syndrome,
fibromyalgia, etc.) that are commonly misdiagnosed as psychological
conditions. VA should also discourage its doctors from giving diagnoses
for common symptoms unless diagnosed properly, so that the VA's Persian
Gulf War Registry and DoD's Comprehensive Clinical Evaluation Program
(CCEP) data will be accurate,
VA and DoD should conduct extensive follow-up to Gulf War
veterans who participate in the Registry and CCEP examinations to
monitor health status.
Additionally, this past September the Institute of Medicine (IOM)
released a much-anticipated report on the health effects of exposures
during the Gulf War. Unfortunately, due to the lack of evidence and
quality research on the long-term health effects of the various
exposures these veterans faced during the Gulf War, IOM was unable to
make any determinations regarding veterans' health due to exposures.
IOM recommended additional research for long-term health effects. In
light of the inconclusive findings and IOM's call for additional
research, appropriate action should be taken to extend the presumptive
period for VA undiagnosed illness compensation claims which is set to
expire January 1, 2002.
Additional research on the long-term health effects of the various
hazards veterans were potentially exposed to during the Gulf War, as
called for by IOM, will require additional funding. Anticipated
extension of priority health care for sick Gulf War veterans will also
require additional funding. The American Legion urges Congress to
continue aggressive oversight of the implementation of the landmark
Gulf War legislation passed by the 105th Congress (PL 105-368).
The American Legion recommends that Medical and Prosthetics
Research be increased to $375 million.
medical construction and infrastructure support
Major Construction
The VA major construction program is not being funded in an
adequate manner. The major construction appropriation over the past few
years has allowed for only one or two projects per year. Meanwhile, the
number of priority projects continues to accumulate. For FY 2001, 16
major ambulatory care or seismic correction projects were submitted to
Office of Management and Budget. Of this number, only one major VHA
project is recommended. For FY 2002, 28 major projects are to be
submitted for funding. The American Legion does not believe that the FY
2001 funding level of $66 million is sufficient to meet this goal.
The American Legion recommends $250 million for Major Construction.
Minor Construction
Annually, VHA must meet the infrastructure requirements of a system
with approximately 4,700 buildings, 600,000 admissions and over 35
million outpatient visits. To do so requires a substantial inventory
investment. The FY 2001 appropriation of $166 million for minor
construction needs additional funding to meet future physical
improvement needs. It is penny-wise and pound-foolish to reduce this
investment. VHA was forced to delay approximately one-third of its
priority minor projects. The American Legion believes that Congress
must be consistent from year to year in the amount invested in VHA's
infrastructure.
The American Legion recommends $175 million for minor construction.
grants for the construction of state extended care facilities
Currently, this nation is faced with the largest aging veterans'
population in its history. VA estimated the number of veterans 65 years
of age or older will peak at 9.3 million in the year 2000. By 2010, 42
percent of the entire veteran population, an estimated 8.5 million
veterans, will be 65 or older, with half that number above 85 years of
age. By 2030, most Vietnam Era veterans will be 80 years of age or
older. The State Veterans' Home Program must therefore continue, and
even expand its role as an extremely vital asset to VA. Additionally,
state homes are in a unique position to help meet the long-term care
requirements of the Veterans' Millennium Health Care and Benefits Act.
State veterans' homes provide over 24,000 beds with a 90 percent
occupancy rate that will generate more than seven million days of
patient care each year. The authorized bed capacity of these homes is
90 nursing care units in 40 states (17,844 beds); 46 domiciliaries in
32 states (5,841 beds); and 5 hospitals in 4 states (469 beds). For FY
2000, VA spent approximately $255 per day to care for each of their
long term nursing care residents, while paying private-sector contract
nursing homes an average per diem of $149 per contract veteran. The
national average daily cost of caring for a state veterans' home
nursing care resident during FY 2000 was $137. VA reimbursed state
veterans' homes a per diem of only $40 per nursing care resident.
On the basis of the available funding in FY 2001, a total of 42
priority one state home construction grant projects with an estimated
cost of $110 million remain unfunded. As many VA facilities reduce
long-term care beds and VA has no plans to construct new nursing homes,
state veterans' homes are relied upon to absorb a greater share of the
needs of an aging veteran population. If VA intends to provide care and
treatment to greater numbers of aging veterans, it is essential to
develop a proactive and aggressive long-term care plan. VA should work
with the National Association of State Veterans' Home Directors to
convert some of its underutilized facilities on large multi-building
campuses to increase the number of available long-term care beds.
The American Legion recommends $80 million for the State Veterans'
Home Extended Care Construction Grants Program.
national cemetery administration (nca)
Currently, NCA oversees 119 national cemeteries in 39 states and
Puerto Rico. The Department of the Army or the Department of the
Interior administers sixteen other national cemeteries. Sadly, there
are 57 national cemeteries closed to first interments. Recently, new
national cemeteries were opened in Chicago, IL; Albany, NY; Cleveland,
OH; and Dallas, TX. Major construction projects are planned at other
existing sites to extend the active life of the cemeteries for as long
as possible.
The National Cemetery Administration has no national cemeteries in
some critically needed areas. Among these are Atlanta, GA; south
Florida; Pittsburgh, PA; Sacramento, CA; Detroit, MI; and Oklahoma
City, OK. Additionally, some existing cemeteries will soon run out of
available space without significant expansion.
The National Cemetery Administration statistics project over 80,000
burials during FY 2001. The number of veterans' deaths is projected to
peak at 620,000 in 2008 and slowly return to the 1995 level of 500,000
by 2020. Notwithstanding the development of six new national cemeteries
over the past 10 years, there is an urgent requirement to continue the
recent expansion. Without a strong commitment from Congress to take on
this effort, VA will not be able to improve access to burial in
national cemeteries for millions of veterans and their eligible
dependents.
The American Legion believes that Congress should remove the
current restriction on eligibility to an appropriate government
furnished marker for veterans that have a marked grave. This outmoded
statute affects over 20,000 families per year. This restriction should
be removed so NCA can be of assistance to all families that seek
appropriate recognition of a veteran's honorable military service.
The American Legion recommends $115 million for NCA. Additionally,
Congress should commit to building six new national cemeteries by 2008
and provide appropriate funding in VA's major construction program for
this purpose.
grants for the construction of state veterans' cemeteries
The State Cemetery Grants Program is an excellent complement to
NCA. The enactment of PL 105-368 in November 1998 significantly
improves the state grants program, but does not ensure that the states
will commit to developing veterans' cemeteries in the areas of greatest
need. Therefore, to strengthen the program, Congress must increase the
burial plot allowance paid to the states and make the allowance
applicable to all veterans. Additionally, to lessen the demand to
invest millions of dollars in the construction and long-term
maintenance of new national cemeteries, a significant increase in state
grants applications funding must be provided.
The American Legion recommends $25 million in new State Veterans'
Cemetery Grants.
veterans benefits administration
Mandatory spending for the payment of compensation, pension, and
burial benefits by the Veterans Benefits Administration (VBA) for FY
2002 is expected to exceed $23 billion. This reflects the impact of
recent new regulatory and legislative entitlements as well as higher
average benefit payments, certain new proposed legislation, and a cost-
of-living adjustment.
The proposed increase in discretionary funding for FY 2002 will do
little, if anything, to improve VBA's claims adjudication process. The
promised improvements in service cannot be achieved without a
substantial staffing in the regional offices. This is clearly evident
in the fact that the current backlog of pending claims, new appeals,
and remanded cases from the Board of Veterans Appeals is continuing to
grow rather than decrease. In addition, there will be a substantial
increase in the regional offices' workload associated with new claims
for diseases such as diabetes related to Agent Orange exposure,
Hepatitis C, and radiation-related claims, as well as the
readjudication of claims as a result of the Veterans' Claims Assistance
Act of 2000. Additional funding is also needed to enable VBA to
continue its efforts to reengineer their business processes, improve
training, continue succession planning, and improve the overall quality
and timeliness of the service provided to veterans and their families.
The American Legion is supportive of the broad performance and
service improvement goals set forth in VBA's strategic management plan.
Progress has been made in a number of areas under the current year
budget. However, this is a long-term process and many significant
challenges remain. Without adequate funding support at this critical
period, VBA's implementation of a broad spectrum of operational,
programmatic, technological, and administrative initiatives now
underway or planned will be delayed and service will deteriorate.
Disabled veterans must now wait months and sometimes years for their
benefit claims to be decided. They are deeply frustrated and
disappointed by a bureaucratic system that appears to be ``not very
user friendly'', inefficient, and frequently unresponsive to their
personal problems and needs. VBA's budget for FY 2002 must ensure that
progress toward its stated service improvement goals will continue and
that veterans and their survivors receive the benefits and services
they are entitled to in a timely manner
benefit programs
In FY 2002, the estimated number of compensation, pension,
education, and burial claims is expected to increase over the FY 2001
workload projections. While the number of pension claims will decline,
due to the high mortality among World War II veterans, this will be
substantially offset by the expected influx of claims for diabetes,
Hepatitis C, additional radiation-related diseases, and requests for
readjudication under the Veterans' Claims Assistance Act of 2000. It is
apparent from the growing backlog of pending claims and appeals, which
is now in excess of 500,000 cases, that present staffing levels are
inadequate to meet the current workload and provide veterans and other
claimants the level and quality of service they are entitled to and
deserve.
One of the biggest challenges facing VBA over the next several
years, in addition to the much needed modernization of its computer
systems, is the prospect of the large scale turnover among its most
experienced and senior personnel within the next three to five years.
This issue was recognized as a major concern in the FY 1999 budget
request and we were pleased that additional staff for VBA has been
authorized in each of the past three-year budgets. However, currently,
only 45 percent of authorized decisionmakers have three years or more
of experience. The prevailing level of inexperience, the sheer number
of claims and appeals to be processed, and the legal and medical
complexities of all types of claims has contributed to an unacceptable
error rate and a growing backlog of pending cases. VBA is continuing
its efforts to recruit new personnel, improve the level, and the
availability of training. It has also instituted several initiatives
that will not only help identify errors in adjudication and improve the
quality of decisions, but will make individuals and managers personally
accountable for the quality of their work. It is essential that these
initiatives continue and be fully funded.
Hepatitis C Claims
Hepatitis C has become a national public health challenge and The
American Legion is deeply concerned by the prevalence of the Hepatitis
C virus in the veteran population. According to government estimates,
there are approximately 4 million Americans with this virus and many
have serious health problems, such as cirrhosis of the liver and liver
cancer. According to VA estimates, 400,000 veterans may be infected
with this disease. The reason why veterans are more likely to have
Hepatitis C than the non-veteran population is because of the presence
of a variety of risk factors inherent in military life and the
increased risk of exposure by those serving on active duty.
The American Legion has been generally pleased by VA's
responsiveness to the Hepatitis C problem. In light of study data
showing an increased incidence of this disease among the veteran
population, The American Legion asked the VA Secretary to consider
issuing regulations providing for presumptive service connection.
Proposed regulations are now under development and will, hopefully, be
available for public comment later this year. When finalized, these are
expected to result in a substantial influx of claims for disability
compensation and VA medical care. While these regulations will assist
veterans in establishing entitlement to disability and medical care
benefits, we believe that Congress should codify by statute the
presumptions which will apply to Hepatitis C claims. This will ensure
VA has the necessary resources to fully and fairly adjudicate this type
of claim and provide the support needed for its outreach, information,
and treatment programs.
The American Legion recommends $1.2 billion in VBA-GOE.
board of veterans appeals
The American Legion believes the Board of Veterans Appeals (BVA)
will require additional staffing resources for FY 2002, so that efforts
to improve productivity and reduce their response time can continue.
Staffing at the BVA is currently 520 FTEE. However, due to a number of
internal and external factors, the BVA's workload is expected to remain
high and their response time increase to over 220 days. In FY 2002, BVA
expects to increase production slightly and reduce the number of
pending appeals at the Board. However, these modest gains will be
largely offset by the impact of directives of the Court of Appeals for
Veterans Claims that require additional time, effort and resources in
deciding appeals and those cases remanded from the Court to the Board
for readjudication. In addition, the Board's long-term workload
continues to trend upward, despite VBA's many quality and service
improvement initiatives, including the establishment of the Decision
Review Officer program and greater cooperation between the regional
offices and the BVA. The number of new appeals filed each year remains
in excess of 60,000 and the number of substantive appeals filed is at
least 32,000, most of which will eventually reach the BVA. In addition,
there are thousands of cases remanded to the regional offices over the
last several years and a majority of these will return to the BVA.
summary
Immediately after seeing the new Administration's budget request
for FY 2002 and its recommendation of only a billion dollar increase in
VA discretionary funding, National Commander Smith said, ``The
administration's suggested increase is simply not good enough.''
The American Legion believes VA must receive at least $750 million
more than the $1 billion in discretionary spending requested by
President Bush and Secretary Principi. The American Legion specifically
recommends the following minimal funding levels:
------------------------------------------------------------------------
------------------------------------------------------------------------
Medical Care........................ $21.6 billion
Medical and Prosthetic Research..... 375 million
Construction:
Major............................. 250 million
Minor............................. 175 million
Grants for State Extended Care 80 million
Facilities.........................
National Cemetery Administration.... 115 million
State Cemetery Grants Program....... 25 million
VBA's General Operating Expenses.... 1.2 billion
------------------------------------------------------------------------
If VA is to provide quality health care to America's veterans more
funding is absolutely necessary. A billion dollars will not begin to
address Hepatitis C treatment or long-term care mandated by the
recently enacted Veterans' Millennium Health Care and Benefits Act. A
billion-dollar increase will just about cover the on-going costs
associated with maintaining current health care services, but there
will be nothing left to address the claims adjudication crisis. VA must
hire enough new claims adjudicators to expedite the delivery of
benefits and replace the large number of retiring experienced
adjudicators
This budget request is insufficient to fulfill the campaign
promises made by President Bush, Vice President Cheney, and Secretary
Principi to America's veterans and their families:
Improve health care delivery,
Modernize the claims process,
Closer cooperation with TRICARE, and
Full utilization of health care facilities throughout the
system.
Mr. Chairman and Members of the Committee, adequate health care for
veterans is important because veterans are important. Their sacrifice
is the human cost of failed foreign policy. Whenever the VA budget
suffers, it hurts America's veterans, and adversely impacts on their
families. Many of you know of classic examples of your constituents
that waited months, and sometimes years, for a claim to be processed.
You know of others that must wait weeks, and sometimes months, for a
medical appointment. Yet, when this Nation called on them to fight,
their response was immediate!
Sadly, many veterans do not live long enough to see their claims
resolved. Years of suffering, frustration, and financial hardship all
too often follow them to their grave. The American Legion knows this is
wrong and you know this is wrong. These problems cannot be properly
resolved without adequate discretionary funding.
Thank you Mr. Chairman, this concludes my testimony.
Chairman Specter. Thank you very much, Mr. Fischl.
We now turn to Mr. Howie DeWolf, National Service Director
for AMVETS.
Mr. DeWolf.
STATEMENT OF HOWIE DeWOLF, NATIONAL SERVICE DIRECTOR, AMVETS
Mr. DeWolf. Mr. Chairman, members of the committee, I am
Howie DeWolf, the National Service Director for AMVETS. AMVETS
is honored to join our fellow veteran service organizations in
providing you with our best estimate of the resources necessary
to carry out a responsible budget for the fiscal year 2002
programs of the Department of Veterans Affairs.
Mr. Chairman, I have submitted my written statement for the
record and request that it be accepted, with your approval.
Chairman Specter. It will be made a part of the record in
full.
Mr. DeWolf. Thank you, sir. Sir, I will briefly summarize
our recommendations as they pertain to the National Cemetery
Administration. The three remaining Independent Budget veteran
service organizations will follow me to cover the remainder of
the document.
The Independent Budget veteran service organizations
acknowledge the dedication of the National Cemetery
Administration staff that provides the highest level of service
to veterans and their families. To provide this service, they
oversee an infrastructure of 119 National Cemeteries, and they
perform over 77,000 internments yearly. With this level of
effort, the addition of new cemeteries and the anticipated
increased internment rate of the aging veteran population, the
Independent Budget veteran service organizations recommend the
following:
First, the National Cemetery Administration operating
budget should be funded at $119 million for fiscal year 2002, a
$10 million increase over 2001. This ensures our Nation's
veterans are honored with a final resting place and lasting
memorial to commemorate their service to our Nation.
Second, we recommend the State Cemetery Grants Program be
funded at $30 million. The Grants Program provides funds to
assist States in establishing, expanding, and improving State-
owned cemeteries. We need to encourage their participation.
Lack of participation is due in part to the low plot allowance
of $150. We recommend it be increased to $600. Additionally, we
recommend that the eligibility be expanded for all veterans who
would be eligible for burial in a National Cemetery, not just
those who served during wartime.
Finally, we recommend that the National Cemetery
Administration establish a strategic plan for the years 2003 to
2008, the period of greatest demand, and that Congress make
funds available for planning and fast-track construction of
needed National Cemeteries.
We ask you to remember the service of all our Nation's
veterans who have guaranteed our freedoms by honoring them with
a final resting place and lasting memorials. Your support of
proper funding for the National Cemetery Administration will
help accomplish that goal.
The Independent Budget provides a well-developed and
comprehensive summary of our recommendations to properly fund
the Department of Veterans Affairs for the fiscal year 2002. By
funding the budget's discretionary programs at $23.3 billion,
you will assist greatly in ensuring veterans are provided the
benefits they so rightly deserve for the personal sacrifices
they have made on behalf of all Americans. That completes my
statement, sir.
[The prepared statement of Mr. DeWolf follows:]
Prepared Statement of Howie DeWolf, National Service Director, AMVETS
Mr. Chairman, Senator Rockefeller, and members of the
Committee:
I am Howie DeWolf, National Service Director for AMVETS.
AMVETS is honored to join fellow veterans service organizations
in providing you our best estimates on the resources necessary
to carry out a responsible budget for the fiscal year 2002
programs of the Department of Veterans Affairs.
AMVETS testifies before you today as a co-author of The
Independent Budget. For over 15 years AMVETS has worked with
the Disabled American Veterans, the Paralyzed Veterans of
America, and the Veterans of Foreign Wars to produce an
Independent Budget. This document provides our spending
recommendations on veterans' programs for the new fiscal year.
Besides working collaboratively on the overall publication
effort, AMVETS' primary responsibility has focused on
developing the recommendations in the National Cemetery
Administration section of The Independent Budget.
Neither AMVETS nor I have been the recipient of any federal
money for grants or contracts. All of the AMVETS activities and
services are accomplished completely free of any federal
funding.
Before I address budget recommendations for the National
Cemetery Administration, I would like to say that AMVETS fully
appreciates the strong leadership and continuing support
demonstrated by the Senate Veterans Affairs Committee. AMVETS
is truly grateful to the members who serve on this important
committee. Clearly, you have at heart the best interests of
veterans and their families and have distinguished yourselves
as willing to work in a bipartisan manner to address numerous
issues of great importance to the Nation's veterans.
Since its establishment, the VA National Cemetery
Administration (NCA) has provided the highest standards of
service to veterans and eligible family members in the system's
119 national cemeteries in 39 states, the District of Columbia,
and Puerto Rico. Recently opened NCA cemeteries in Chicago, IL;
Albany, NY; Cleveland, OH; and Dallas, TX., continue this
tradition of remarkable achievement and service. Additionally,
the NCA expects to begin the second phase of construction on
four new cemeteries in 2001 and the completion of the planning
process on a fifth.
While the National Cemetery Administration maintains more
than 2.3 million gravesites in over 13,000 acres of cemetery
land, there remains a need to establish additional national
cemeteries in some critically needed areas. AMVETS supports the
Committee's active review of encouraging the Administration to
add more cemeteries to meet the growing demand for space.
Clearly, without the strong commitment of Congress and its
authorization, VA will likely fall short of burial space for
millions of veterans and their eligible dependents.
The members of The Independent Budget recommend that
Congress provide $119 million for the operational requirements
of NCA in fiscal year 2002. Currently, the NCA averages more
than 77,000 interments annually. The aging veteran population
has created great demands on NCA operations. The NCA is a
labor-intensive workplace. We believe that the continued high
standard of service cannot be maintained without the provision
of adequate resources of new staff and equipment improvements.
$119 million for the NCA will provide the additional full-time
employees and necessary supplies and equipment for grounds
maintenance and program operations.
For funding the State Cemetery Grants Program, the members
of The Independent Budget recommend $30 million for the new
fiscal year. The State Cemetery Grants Program serves a
critically important function working in complement with the
National Cemetery Administration to encourage states to
establish state veterans cemeteries. Through the State Grants
Program, VA can provide up to 100 percent of the development
cost for an approved cemetery project. This type of support can
greatly assist in establishing gravesites for veterans in those
areas where NCA cannot fully respond to burial needs.
To properly support veterans who desire burial in state
facilities, members of The Independent Budget support
increasing the plot allowance to $600 from the current,
unreasonably low level of $150. In addition, we firmly believe
the plot allowance should be extended to all veterans who are
eligible for burial in a national cemetery not solely those who
served in wartime.
Based on National Cemetery Administration statistics
projecting a dramatic increase in the interment rate until
2010, members of The Independent Budget recommend that the
National Cemetery Administration establish a strategic plan for
the period 2003 to 2008. We must plan for a truly national
system, and it must have congressional and administrative
budgetary support. We call on Congress to make funds available
for planning and fast-track construction of needed national
cemeteries.
Mr. Chairman, this concludes my statement. I thank you
again for the privilege to present our views, and I would be
pleased to answer any questions you might have.
Chairman Specter. Thank you very much, Mr. DeWolf.
We turn now to Mr. Rick Surratt, Deputy National
Legislative Director of the Disabled American Veterans. Thank
you for joining us, Mr. Surratt, and the floor is yours.
STATEMENT OF RICK SURRATT, DEPUTY NATIONAL LEGISLATIVE
DIRECTOR, DISABLED AMERICAN VETERANS
Mr. Surratt. Good morning, Mr. Chairman. I am Rick Surratt
with the Disabled American Veterans. My remarks today will
focus on the budget and policy for the benefit programs, the
DAV's primary area of responsibility in the Independent Budget.
Also, because the President's budget does not offer details for
us to address, I will highlight the IB recommendations for
legislation and resources.
Typically, the administration's budget proposes a cost-of-
living increase for compensation and dependency and indemnity
compensation. The IB also recommends an increase to keep
compensation in line with the increase in the cost of living.
To stay even with the cost of living, compensation must be
increased by the same percentage as the annual rise in the cost
of goods and services as measured by the Consumer Price Index.
However, as temporary deficit reduction measures and to offset
other spending, the COLA's have been rounded down to the
nearest whole dollar. Regrettably, the new administration's
budget continues the same old objectionable recommendation of
prior administrations that you make this rounding down a
permanent requirement.
Mr. Chairman, we are at a loss to find any legitimate
reason for that recommendation. We all know that many disabled
American veterans barely survive on the modest compensation
they receive. It is bad enough to reduce benefits for disabled
veterans in the name of budget reconciliation. But we simply
cannot understand why the administration wants to take such
advantage of our Nation's disabled veterans when no reason
exists for doing so. To us, that certainly is not in keeping
with the obligation this Nation has to care for those disabled
in service to our country.
Fortunately, the President cannot do this without your
concurrence. We look to you to make a strong statement that you
will not move legislation for this purpose. We also urge you to
reject the administration's proposal to make permanent the user
fees and other temporary deficit reduction measures imposed
upon veterans.
Now let me turn to the delivery of benefits. For years, VA
has struggled to overcome poor quality and large backlogs in
its compensation and pension claims processing system. Adequate
resources are a central issue. In the IB, we recommend an
additional $60 million to cover the cost of 830 new full-time
employees for VA's compensation and pension service. VA
desperately needs these additional employees to make up for
unwarranted past reductions in staffing and to meet increased
workload demands.
It also needs those employees to improve adjudicator
proficiency and accountability and thus improve efficiency of
the system. To do this, VA needs not only to increase the
number of decisionmakers, it needs employees to train
adjudicators in the law and procedures, and employees to
perform quality control reviews and enforce quality standards.
These additional employees are absolutely essential to any hope
of fixing the problems in VA's claims processing system.
Mr. Chairman, that concludes my statement. Thank you for
allowing us to come before you today to offer our views on the
fiscal year 2002 budget related matters. Certainly, I would be
happy to answer any questions you may have.
[The prepared statement of Mr. Surratt follows:]
Prepared Statement of Rick Surratt, Deputy National Legislative
Director, Disabled American Veterans
Mr. Chairman and Members of the Committee:
I am pleased to appear before you on behalf of the more
than one million members of the Disabled American Veterans
(DAV) and the members of its Women's Auxiliary to discuss the
fiscal year (FY) 2002 budget for the Department of Veterans
Affairs (VA) and to present the alternative recommendations of
the Independent Budget (IB).
This year marks the 15th year the DAV has joined with
AMVETS, Paralyzed Veterans of America (PVA), and the Veterans
of Foreign Wars of the United States (VFW) to assess the
funding needs and make recommendations for veterans' programs.
With the shared goal of ensuring that the needs of America's
veterans are adequately addressed, we engage in this
collaborative effort to present our collective views on policy
questions, programmatic issues, and resource requirements for
the effective and efficient delivery of benefits and services
to veterans and their families.
The DAV has primary responsibility for the portions of the
IB that deal with Benefit Programs, General Operating Expenses,
and Judicial Review of Veterans Matters. My focus will
therefore be on those areas of policy and the budget. The
members of IB group appreciate the courtesy this Committee has
extended by permitting us to present our views together in this
format.
Because the President submitted only a broad budget outline
without details, we are unable to compare in any depth his
funding recommendations with our assessment of VA's resource
needs. Unquestionably, his recommended $1 billion increase in
discretionary budget authority will fall far short of what is
necessary to maintain adequate delivery of benefits and
services for veterans, however.
Similarly, the President's budget submission contains few
details on the Administration's policy positions and
legislative proposals for veterans' benefits. The narrative
does indicate that the budget includes ``several proposals''
for legislation designed to ``yield net mandatory savings
totaling $2.5 billion over the next 10 years.'' According to
the discussion, these several proposals comprise one to
eliminate VA's vendee home loan program and other proposals to
``extend permanently mandatory savings authorities that would
otherwise expire over the next several years.''
If it will result in savings, we have no objection to
elimination of vendee loans. Vendee loans are those that VA
provides to purchasers of properties VA has acquired by reason
of default on guaranteed loans. We agree that such loans are
outside VA's mission of providing benefits and services to
veterans and their families.
However, we strongly oppose recommendations to permanently
extend budget reconciliation measures that were enacted for a
limited period to reduce budget deficits. Most of these
measures adversely affected veterans. They reduced veterans'
benefits or imposed upon them such things as user fees and co-
payments. Especially repugnant is the one that requires
rounding down compensation rates to the nearest whole dollar
amount after adjustment for increase in the cost of living.
Veterans have borne a substantial part of the burden of deficit
reduction. No justification exists for permanently imposing
these burdens upon veterans. We urge you, in the strongest
possible terms, to reject these proposals as unfair,
unwarranted, and unconscionable.
In the IB, we have presented several positive proposals to
improve veterans' benefit programs to make them more effective
and make them better meet veterans' special needs. For benefits
funded under the compensation and pension appropriation, we
recommended changes in law to:
Provide a cost-of-living adjustment (COLA) for
compensation and dependency and indemnity compensation
Permit career military veterans to receive
disability compensation and military longevity pay without
offset
Remove the offset between military nondisability
separation, severance, or readjustment pay and disability
compensation
Permit veterans to recover taxes withheld on
disability severance pay or exempt retired pay beyond the
current 3-year period
Include certain radiogenic diseases in the list of
disabilities that may be presumed service connected on the
basis of radiation exposure
Presume all Vietnam veterans were exposed to
herbicides containing dioxin
Authorize presumption of service connection for
amyotrophic lateral sclerosis affecting Persian Gulf War
veterans
Repeal the prohibition on service connection for
smoking-related disabilities
Authorize presumption of service connection for
hearing loss and tinnitus for combat veterans and veterans that
had military duties typically involving high levels of noise
exposure
Authorize temporary increases in compensation to
be effective on the date of hospitalization or medical care
that resulted in temporary total disability
Restore the reimbursement for a headstone or
marker acquired privately in lieu of furnishing a Government
headstone or marker
Increase the amounts of the burial allowances
Permit payment of fees under the Equal Access to
Justice Act to nonattorneys who successfully represent eligible
VA claimants before the Court of Appeals for Veterans Claims
For readjustment benefits, the IB proposes legislation to:
Permit refund of Montgomery GI Bill (MGIB)
contributions when the individual becomes ineligible for the
benefits by reason of a ``general'' discharge or a discharge
``under honorable conditions''
Increase the amount of specially adapted housing
grants, provide for automatic annual COLAs, and authorize a
grant for adaptations to replacement homes
Increase the allowances for specially equipped
automobiles to 80% of the average cost of a new automobile and
to provide for automatic annual COLAs
Increase the maximum home loan guaranty amount to
$63,175
For veterans life insurance programs, the IB recommends
legislation to:
Exempt the cash value, dividends, or proceeds from
consideration in determining entitlement under other Federal
programs
Authorize VA to revise its premium schedule for
Service-Disabled Veterans Insurance to reflect current
mortality rates
The IB also recommends repeal of the 2-year limitation on
the payment of accrued benefits to survivors and repeal of the
estate limitation for mentally incompetent veterans.
Without specifics, the Administration's budget indicates
that it will provide the means to ``rejuvenate'' the VA's
``efforts to ensure the timely and accurate processing of
veterans' disability compensation claims.'' The budget states
that it will ``fully fund the Veterans Benefits
Administration's (VBA) additional workload'' from last year's
legislation that restored the VA's ``duty to assist'' and the
additional workload from a presumption of service connection
for diabetes related to herbicide exposure. We support these
recommendations in concept.
Problems with claims processing, accurate decisions, and
timely benefits delivery have plagued and challenged VA for
years. VBA has a number of initiatives and reforms under way to
correct these problems. While Congress must hold VA accountable
for effective and efficient administration of benefit programs,
Congress must support VA with resources adequate to overcome
past inefficiencies and to meet increasing demands. Without the
necessary resources, the existing major problems will only grow
worse.
To bring about positive change, VA must train both its new
and experienced adjudicators in the procedural and substantive
aspects of veterans' law without losing additional ground to
the claims backlogs while adjudicators' time is spent
administering or undergoing training. VA must increase staffing
levels to meet the workload demands; it must devote sufficient
time to claims development and analysis in decisions to allow
for complete records, thorough reviews of the law and evidence,
and well-reasoned, well-explained decisions. VA must devote
additional resources to quality assurance, an area where its
vigilance has been lacking and a crucial aspect of proficiency,
performance, and accountability. VA is already understaffed in
its claims processing personnel, yet it also desperately needs
an infusion of substantial numbers of new employees to offset
the expected retirement of many of its experienced adjudicators
in the near future. Thus, a sizable number of additional full-
time employees (FTE) is essential to meet real needs and make
up for past staffing reductions.
In the IB, we recommend that VA add 200 FTE to deliver
training on a systematic and system-wide basis. We have
recommend that VA add 170 new adjudicators to bring its
staffing to the minimum level necessary to meet its workload
demands. VA's appellate workload in field offices places great
demands on its personnel. We recommend that VA add 200 new
Decision Review Officers to address this appellate workload.
VA needs additional staff to perform quality reviews of the
work of each of its claims adjudicators to assess performance,
impose accountability, and remedy deficiencies on an individual
employee level. Through its ``Systematic Individual Performance
Assessment'' (SIPA) initiative, VA intends to review 100
decisions of each adjudicator per year. To accomplish this
task, VA needs 260 additional new employees.
Accordingly, we have recommended that VA be authorized a
total of 830 additional FTE for its Compensation and Pension
Service in FY 2002.
Even with optimum quality, an irreducible number of errors
are inevitable in a mass adjudication system as large and
complex as VA's. With the necessarily and intrinsically complex
statutes and regulations that govern disability and
compensation issues, errors and legitimate differences of
interpretation are unavoidable. In veterans' benefits, as it
has often been acknowledged generally, law is not an exact
science. The variables of human interactions and the
corresponding nuances inherent in the factual bases on which
legal rights rest require the intervention of human judgment.
Such judgment is, of course, not infallible. Meaningful and
effective judicial review is essential to maintain fairness and
uniformity and to remedy the injustices that result from human
error. To make judicial review a more effective enforcement
mechanism for veterans, the IB recommends legislative changes
in three areas.
First, we recommend a change in the legal standard under
which the United States Court of Appeals for Veterans Claims
reviews VA's findings of fact. In veterans' benefits law, the
``benefit-of-the doubt'' rule is a fundamental element of the
process designed to favor veterans. This rule mandates that VA
decide a factual question in favor of the veteran unless the
evidence against the veteran is stronger than that supporting
him or her. However, under its ``clearly erroneous'' standard
of review, the Court allows VA's decision to stand unless a
factual finding is without a plausible basis. The Court's lack
of enforcement of the benefit-of-the-doubt rule nullifies and
renders it meaningless. We have therefore recommended a change
in the Court's standard of review to require that it set aside
any finding of fact adverse to a veteran when the finding is
not reasonably supported by a preponderance of the evidence.
Second, we recommend that the jurisdiction of the Court of
Appeals for the Federal Circuit be expanded to permit it to
review questions of law. Under its jurisdiction now, the
Federal Circuit can review disputes involving the
interpretation of a statute or regulation, but it cannot review
ordinary questions of law decided in the first instance by the
Court of Appeals for Veterans Claims. These questions of law
arise when the Court of Appeals for Veterans Claims imposes its
own new rule of law to govern a matter of substance or
procedure. This situation presents an anomaly inasmuch as it
insulates decisions on such questions of law from any appellate
review whatsoever.
Third, we recommend that the law be amended to authorize a
direct challenge in the Federal Circuit of VA's changes to its
schedule for disability rating. Currently, VA regulations are
subject to such direct challenge, but regulations in the form
of rating schedule changes are immune to such challenge. That
means there is no remedy for changes to the rating schedule
that are clearly unlawful or arbitrary and capricious. No
unlawful or arbitrary and capricious regulation, especially one
governing disability rating, should be immune to correction. As
it should, this very narrow basis for challenge would leave
protected VA's lawful exercise of discretion in establishing
disability rating criteria.
We hope our analyses of these issues and VA's funding needs
will be helpful to you. We appreciate the opportunity to
present our views, and we thank this Committee for its
continuing support of our Nation's veterans.
Chairman Specter. Thank you very much, Mr. Surratt.
We now call upon Mr. Harley Thomas, Health Policy Analyst,
Paralyzed Veterans of America.
Mr. Thomas.
STATEMENT OF HARLEY THOMAS, HEALTH POLICY ANALYST, PARALYZED
VETERANS OF AMERICA
Mr. Thomas. Good morning, Mr. Chairman. On behalf of the
Paralyzed Veterans of America and the Independent Budget, it is
indeed a pleasure to give our views and estimates on the
Independent Budget's health care budget for fiscal year 2002
for the Department of Veterans Affairs.
The Independent Budget recommends for fiscal year 2002 a
$2.7 billion increase for VA medical care. For fiscal year
2002, the Independent Budget estimates that uncontrollables
such as salary increases and inflation increases alone will
require an increase of $1.3 billion.
In addition, the IB has identified a necessary increase of
$848 million to cover the costs of institutional and
noninstitutional long-term care initiatives mandated by the
Veterans Millennium Health Care and Benefits Act.
Over the past 5 years the capacity of the VA to provide SCI
care has been seriously degraded by substantial staff
reductions, despite the mandate instituted by the 1996 Congress
to maintain system capacity. Local hospital officials reduced
SCI staff to a point that they could only operate about 65
percent of the SCI/D beds reported as operational in 1996. Last
year, the VA issued a directive establishing a minimally
acceptable level of staffing and staffed beds at each SCI
center, and issued a memorandum regarding the need for local
managers to identify and provide additional resources required
to restore the mandatory staffing levels.
Based upon actual site inspections, we have identified the
need for at least 212 FTEE's which would allow for full
staffing of SCI beds. We have identified the need for 128
specialty nurses, 19 psychologists, 47 PT's, and 7 social
workers. Additionally, we believe there should be an increase
of at least 11 medical doctors with SCI specialty. The IB has
requested $25 million additional in funding to begin this
restoration work.
The IB has estimated increased costs of pharmaceuticals
will total $65 million because of increased patient load
projected by the VA.
The IB recommends $100 million increase for mental health
programs, a first step in a 3-year recommendation to add a
total of $300 million to these vital programs.
The IB has recommended an increase for Medical
Administration and Miscellaneous Operating Expenses of $12
million, bringing this account up to $74 million.
We also advocate $45 million to increase the Medical and
Prosthetic Research Program account, up to $395 million.
On February 28, the President released his Administration
Blueprint for New Beginnings. A $1 billion increase, of course,
will not fully be realized by the veterans' health care.
Traditionally, only approximately 90 percent of discretionary
increases accrue to health care. As I stated before, the VA
requires at least $1.3 billion increase just to keep pace with
2001. This means that the President's budget blueprint falls
far short of what is required to maintain the status quo.
We recognize this committee does not appropriate dollars,
but you do authorize them. You serve as a resource and as an
advocate to the appropriators as they fashion budget policy.
The authorization process must recognize the real resource
requirements of the VA. We look to you, and to your expertise
in veterans' issues, to help us carry forward this message to
your colleagues and to the public.
That concludes my statement.
[The prepared statement of Mr. Thomas follows:]
Prepared Statement of Harley Thomas, Health Policy Analyst, Paralyzed
Veterans of America
Chairman Specter, Ranking Minority Member Rockefeller,
members of the Committee, the Paralyzed Veterans of America
(PVA) is honored, on behalf of our members and the Independent
Budget, to present our views on the Department of Veterans
Affairs' (VA) budget for fiscal year (FY) 2002. We are proud to
be one of the four co-authors, along with AMVETS, the Disabled
American Veterans, and the Veterans of Foreign Wars, of the
15th Independent Budget, a comprehensive policy document
created by veterans for veterans.
The Independent Budget is an annual budget and policy
review for veterans programs and represents an unprecedented
joint effort by the veterans' community to identify the major
issues facing the veterans' community today while serving as an
independent assessment of the true resource and policy needs
facing veterans. It is our distinct pleasure, once again, to be
responsible for the health care recommendations and analysis,
and I shall address these in my testimony today.
The VA medical system is a national asset. After years of
chronic under-funding and fiscal neglect, the VA has seen
budget increases for the past two fiscal years. It is essential
that the health care increases realized over the last two years
be continued in FY 2002. There must be continued and sustained
investment in the national resource which is the VA health care
system, investment in protecting and strengthening specialized
services and in improving access and ensuring that the
infrastructure exists to provide first-rate health care, as
promised by the President and sought by our members.
To accomplish these goals, the Independent Budget
recommends, for FY 2002, a $2.7 billion increase for VA medical
care.
Every year, the VA requires additional funding in order to
remain in the same place it was the previous year. This
additional funding is required because of mandatory salary
increases and the effects of inflation. For FY 2002, the
Independent Budget estimates that these ``uncontrollables''
will require an increase of $1.3 billion.
In addition, the Independent Budget has identified a
necessary increase of $848 million to cover the costs of
institutional and non-institutional long-term care initiatives
mandated by the Veterans Millenium Health Care and Benefits Act
(P.L. 106-117) enacted last Congress.
This $848 million represents start up costs for the long-
term care initiatives established in the Millennium Act two
years ago that have yet to be implemented. The VA has a
responsibility, and an historic duty, to meet the long-term
care needs of an aging veteran population. It has the
opportunity to do so in the most cost-effective and appropriate
way by implementing the community and home-based care programs
called for in the bill. It can also show that it can become a
leader in the United States in providing long-term care in a
country that has no broad based long-term care programs for
older Americans and all Americans with disabilities.
The remainder of the recommended increase, $523 million, is
slated to fund vitally needed initiatives. These initiatives
include restoring spinal cord injury/dysfunction capacity,
meeting the challenge of rising pharmaceutical costs, and
maintaining VA capacity for mental health services.
Over the past 5 years the capacity of the VA to provide SCI
care has been seriously degraded by substantial staff
reductions despite the mandate instituted in 1996 by Congress
to maintain system capacity. Local hospital officials reduced
SCI staff to a point that they could operate only 65 percent of
SCI/D beds reported as operational in 1996. Last year, the VA
issued a directive establishing the minimally acceptable level
of staffing and staffed beds at each SCI Center, and issued a
memorandum regarding the need for local managers to identify
and provide additional resources required to restore the
mandatory staffing levels. The Independent Budget has requested
$25 million in additional funding to begin this restoration
work.
We have all read the news stories concerning the increased
costs of pharmaceuticals faced by our citizens. The Independent
Budget has estimated that these increased costs will total $65
million because of the increased patient load projected by the
VA.
The Independent Budget recommends a $100 million increase
for mental health programs, a first step in a three-year
recommendation to add a total of $300 million to these vital
programs. We have witnessed an unprecedented erosion of the
VA's capacity to provide specialized treatment within distinct
dedicated programs for veterans with serious mental illness,
substance-abuse problems, and post traumatic stress disorder.
Extensive closures of specialized inpatient mental health
programs, coupled with slashed budgets, have lead to the
emergency situation faced by these vital programs. These
programs must be protected and expanded in order to meet the
needs of veterans.
The Independent Budget has recommended an increase for
Medical Administration and Miscellaneous Operating Expenses
(MAMOE) of $12 million, bringing this account up to $74
million. Funding shortfalls in the MAMOE account have left the
VA unable to adequately implement quality assurance efforts or
to provide adequate policy guidance within the 22 Veterans
Integrated Service Networks (VISN). Veterans Health
Administration headquarters staff play the essential role of
providing leadership, policy guidance, and quality assurance
monitoring under the decentralized VA health care system. It is
important that these important roles be strengthened.
Another important asset of the VA is its Medical and
Prosthetic Research Program. VA research plays a critical role
in attracting first-rate clinicians to practice medicine and
conduct research in VA health care facilities, keeping
veterans' health care at the cutting-edge of modern medicine.
Advancements in medical treatment and technology developed in
VA hospitals and laboratories have revolutionized modern health
care and pioneered advances that are sustaining the health and
quality of life of veterans and all Americans. As has been
stated, ``today's research indeed creates tomorrow's health
care.''
With the bipartisan push to increase research funding for
the National Institutes of Health (NIH), to double its funding
over the course of five years, the VA Medical and Prosthetic
Research program must not be left behind. The President is
seeking a $2.8 billion increase for the NIH. VA research is an
important component of our national research effort. The
Independent Budget advocates a $45 million increase to bring
this account up to $395 million.
The President, on February 28, 2001, released his
Administration's ``Blueprint for New Beginnings.'' PVA has many
questions concerning the Administration's plans for the VA.
Although we were heartened by the fact that the Administration
has proposed an increase in discretionary spending for the VA,
this ``Blueprint'' raises more questions than it answers. We
look forward to seeing the full scope, and the complete
rationale, of the Administration's FY 2002 budget request for
the VA in April.
The President's ``Blueprint'' trumpets a discretionary
spending increase for veterans of $1 billion. This $1 billion
increase, of course, will not be fully realized by veterans'
health care. Traditionally, only approximately 90 percent of
discretionary increases accrue to health care. As I stated
before, the VA requires at least a $1.3 billion increase just
to keep pace with FY 2001. This means that the President's
budget ``Blueprint'' falls short of what is required to
maintain the status quo of the health care system for this
coming year.
In addition, any additional funding needed to address
claims backlogs will come at the expense of VA health care
because these additional funds would lay claim to the finite
pot of discretionary spending. It is essential that the claims
process be fixed--we have argued for years that a benefit
delayed is a benefit denied--but this vital work must not come
at the expense of sick and disabled veterans.
The ``Blueprint'' assumes a transfer of health care
liabilities. The Administration may argue that the increase for
VA health care will be higher because of its assumption that
$235 million in VA health care ``liabilities'' will be shifted
to the Department of Defense (DOD). This will be implemented by
proposed legislation that would mandate that veterans choose
either DOD or VA to receive their health care. The budget
assumes that 27 percent will switch to the DOD. There seems to
be no justification for this percentage, and we have questions
concerning how the figure of 27 percent was settled upon.
The President's ``Blueprint'' assumes that the VA will
realize ``net mandatory savings totaling $2.5 billion over the
next 10 years.'' The OBRA Extenders are slated to save $2.3
billion over ten years and the elimination of the VA's vendee
home loan program is slated to save $228 million over the same
time frame. None of these savings are available for FY 2002,
and, in fact, eliminating the vendee home loan program is
estimated to cost $19 million in FY 2002. Finally, these
savings would not be available for discretionary programs
unless budgetary legerdemain is employed.
PVA awaits the final budget numbers to ascertain the role
played by the Medical Care Collections Fund (MCCF) in any of
these projections. As we have stated in the past, and firmly
hold today, these funds should be used to augment, not replace,
appropriated dollars to enhance the health care provided to
veterans. The inflated collection estimates have never been
reached in the past, and, in fact, have steadily declined each
year since 1995 despite highly exaggerated yearly estimates of
soaring receipts. Veterans should not be forced to pay the
price for these failures to reach these rosy estimates.
The President's ``Blueprint'' states that the ``VA has
begun the assessment phase of an infrastructure reform
initiative that will result in a health care system with
enhanced capabilities to treat veterans with disabilities or
lower incomes living in underserved geographic areas. Savings
from the disposal of underused VA facilities will support these
improvements.'' We await the details and we urge caution. It is
not clear how, in a budget sense, these savings will be
realized and directed to VA health care. We applaud the
President's desire to protect and augment the VA's core
missions, but we insist that the needs of veterans, not the
needs of budgets, must come first.
We believe that the Administration's ``Blueprint'' is a
step in the right direction, but much more is needed, and much
more must be done.
We recognize that this Committee does not appropriate
dollars, but you do authorize them. You serve as a resource,
and as advocates, to the appropriators as they fashion
budgetary policy. The authorization process must recognize the
real resource requirements of the VA. We look to you, and your
expertise in veterans' issues, to help us carry this message
forward, to your colleagues and to the public.
We need your help, and we offer our assistance, to ensure
that the VA receives the funding it needs to ensure that
veterans receive the health care they have earned, and the
health care they have been promised. Let us move forward from
our accomplishments of the last couple of years and build a
strong, and continuing base, for the national asset that is the
VA.
On behalf of the co-authors of the Independent Budget, I
thank you for this opportunity to testify concerning the
resource requirements of VA health care for FY 2002. I will be
happy to answer any questions you might have.
Chairman Specter. Thank you very much, Mr. Thomas.
And now we recognize Mr. Cullinan, Director of the National
Legislative Service, Veterans of Foreign Wars.
Mr. Cullinan.
STATEMENT OF DENNIS M. CULLINAN, DIRECTOR, NATIONAL LEGISLATIVE
SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED STATES
Mr. Cullinan. Good morning, Mr. Chairman. On behalf of the
entire VFW membership, I thank you for including us in today's
most important discussion of funding for the Department of
Veterans Affairs.
The authorizing/oversight activities of this Committee are
paramount to the effective and compassionate operation of the
VA. We thank you for past accomplishments, and we look forward
to working with you into the future.
As in the past, the VFW has dealt with the construction
portion of the VA budget, and I will now briefly turn to the
main points of my oral statement.
Past year shortfalls in construction funding, even as the
population of sick and elderly veterans is rapidly on the rise,
have seriously eroded VA's ability to sustain a physical plant
adequate to meeting veterans' needs. Major and minor
construction projects funding has plummeted dangerously since
fiscal year 1993 to the current fiscal year, from $600 million
to just over $200 million. Among other things, this has
resulted in an untenable backlog of nonrecurring maintenance
needs that have not been adequately funded under the medical
care account.
For major construction, we recommend an increase of $308
million, for a total funding level of $374 million. This
increase is needed for a major portion of the seismic
correction needs of $250 million, such as the one that needs to
be carried out at Palo Alto VAMC.
An increase of $265 million to the minor construction
account is recommended, for a total funding level of $431
million. This increase will support inpatient and outpatient
care delivery infrastructure improvements, research facility
upgrades, and a historic preservation initiatives.
VA must be provided with the requisite dollars to update
facilities and services for women veterans. All necessary steps
must be taken to ensure their privacy and comfort at VA
facilities. Women in uniform have continued to serve with
distinction, and they deserve the very best from us.
In another area, while we of the VFW and the IB applaud
congressional and VA efforts to more effectively configure and
apply existing resources so that more veterans may be better
served, resources must be placed in response to need, not
circumstance or expediency. We are deeply concerned, however,
that as VA attempts to achieve this objective through
implementing its CARES process, it does not result in a de
facto moratorium in needed construction and renovation
projects. There are, and will continue to be, certain projects
that need to be completed well in advance of the conclusion of
the CARES process, and we urge that this happen.
Mr. Chairman, this concludes my statement. Thank you.
[The prepared statement of Mr. Cullinan follows:]
Prepared Statement of Dennis M. Cullinan, Director, National
Legislative Service, Veterans of Foreign Wars of the United States
Mr. Chairman and members of the committee:
This year, as in the past, Mr. Chairman, the Veterans of
Foreign Wars of the United States is proud to be one of the co-
authors of the Independent Budget. Our primary responsibility
is for the Construction Programs and my remarks will be focused
on that major area.
The capacity to provide timely access to quality care for
service disabled and low income veterans, while further
transforming the VA into the health care provider of choice for
those veterans whose cost of care can be covered by third party
payers, symbolizes an acknowledgement of the special debt of
gratitude owed by our nation to those who faithfully served to
ensure our freedom and security. That this unique system of
delivering health care to America's veterans has undergone a
major transformation is in itself a major understatement. The
many milestones that have marked the VA health care system
during the past decade have had the ironic effect of both
helping in its transformation into a world-class medical
system, while at the same time placing it in a dilemma that can
potentially lead to the deterioration of the system and,
eventually, to its inexorable collapse.
Succeeding Administrations and Congresses have promulgated
numerous measures that have made possible the significant
improvements of the system. These efforts, however, have been
neither sufficiently consistent nor amply sustained to ensure
the Veterans Health Administration timely evolvement into a
streamlined, cost-effective provider of health care that will
stay ready to change with the times. The present condition of
the substantial capital assets held by the VA, through which it
is expected to deliver most of the services it's mandated to
provide to veterans and their dependents and survivors, stands
out as a glaring example of the deleterious consequences of an
on-again-off-again approach to funding VA programs.
The improvements in VA health care, coupled with the
advancing age of the entire veterans population, have resulted
in a substantial increase of the number of veterans seeking
services from the system. At the same time the level of
investment in maintaining the physical infrastructure, through
Major and Minor Construction projects, has plummeted
dangerously since fiscal year 1993 to the current fiscal year,
from $600 million to just over $200 million. Understandably,
the focus of construction projects has had to change from one
of building large centralized physical plants to a design of
having more access points to state of the art facilities that
can provide primary and specialty care, backed by centers of
excellence ready to provide more complex care for acute and
chronic or long-term ailments. But this strategy has been
weakened by the lack of consistent funding. In addition to the
lack of attention to the construction needs, this neglect has
created an untenable backlog of non-recurring maintenance needs
which have not been adequately funded under the medical care
account.
VA must maintain and improve its existing facilities to
support delivery of veterans' benefits and health care
services, while protecting the nation's investment by assuring
the continued viability of this infrastructure. The ongoing
evaluation under the Capital Assets Realignment for Enhanced
Services (CARES) to design a reconfiguration of the
Department's physical plant that will free up--or generate
new--resources to provide more timely access to quality care
for more veterans, while a worthy effort, should not be an
impediment to meeting ongoing construction and maintenance
needs. Regrettably, the defacto moratorium on funding already
approved construction projects since the start of the CARES
studies has further exacerbated the manifest lack of
stewardship of the system's facility assets.
As the Committee is well aware, an independent study by
Price Waterhouse concluded that the VA should be investing an
amount equal from 2 to 4 percent of the value of its facilities
to improve and update them. It recommended a similar amount
annually for non-recurring maintenance. Not to do so would
amount to a plan for the deterioration of the system that would
lead to its closure. We are much encouraged, Mr. Chairman, by
the legislative measure you--along with Messrs. Evans, Moran
and Filner--have introduced to address this and the other
construction concerns cited in the Independent Budget.
The construction needs of the VA are evident, and can only
be missed--or ignored--by those who would like to see the
Veterans Health Administration deteriorate out of existence.
Men and women of good will, both in Congress and throughout the
nation, want to see the right thing done. As daunting as the
funding requirements to meet these needs may seem, a strategic
approach would validate the need for a major investment today
that would save much unnecessary waste in the future. The
demonstrated need for a $30 million project in Veterans
Integrated Service Network 1, which would facilitate the
consolidation of certain services in the Boston area, resulting
in an annual operating savings of $50 million, is a poignant
example of how the current approach to approving and funding VA
construction needs is seriously flawed. Failure to realize
these improvements since they were first identified in 1998
will cost the VA over $100 million in extra operating costs.
This is just not a good way to run a business. It is,
particularly, not the way to care for the trust placed on the
Administration and Congress by America's taxpayers.
As we are all well aware, the VA has an inventory of
seismic improvement projects that continue to go unfunded. Just
in the last budget cycle, Congress failed to fund a much-needed
seismic project in the Palo Alto VA Medical Center at a cost of
$26.6 million. The critical nature of this need was,
ironically, poignantly underscored on the same day the
President released his budget proposal, when the 6.8 magnitude
earthquake in the state of Washington damaged two buildings at
the American Lake VA Medical Center resulting in the temporary
evacuation of many of the patients. These buildings were part
of the VA inventory of seismic needs. While we are relieved
that the damage wasn't extensive, and no one was injured, the
timing would seem almost providential. We should all be
thankful that, by Divine grace, the earthquake did not occur
hundred miles to the south at that other more seismically
unstable area where the Palo Alto facility is located. But,
this is a warning that should not go unheeded.
Continued neglect of all the VA construction needs
constitutes a tragic mismanagement of what is the free world's
most cost-effective system for delivering quality health care,
education, research and pioneering in the delivery of medical
care and rehabilitation. Moreover, not allowing the system to
go beyond the threshold, at which it is presently poised, of
fulfilling its potential for being all that it can be in
serving America's veterans, would be tantamount to squandering
what is a national health care treasure that indirectly
benefits all citizens.
In order to prevent this tragic consequence, the
Independent Budget recommends a total funding level for
construction in Fiscal Year 2002 of $804 million as a down
payment to complement the total transformation of the Veterans
Health Administration into a more agile and cost effective
deliverer of quality health care for today and tomorrow's
veterans.
For Major Construction, we recommend an increase of $308
million, for a total funding level of $374 million. This
increase is needed for a major portion of the seismic
corrections needs of $250 million.
An increase of $265 million to the Minor Construction
account is recommended, for a total funding level of $431
million. This increase will support inpatient and outpatient
care delivery infrastructure improvements, research facility
upgrades, and a historic preservation grant program that will
protect the VA facilities which are part of the historical
heritage of our nation. We also recommend that the current $4
million ceiling authority for Minor Construction projects be
increased to $16 million. The current limitation results in a
piecemeal approach to design and completion of projects that
adds delays, facility disruptions and promotes poor fiscal
management practices.
Other programs covered by the Independent Budget with
recommended construction funding increases include grants for
construction of state extended care facilities and state
veteran's cemeteries. In addition, we are recommending an
increased funding in the medical care account for nonrecurring
maintenance to the level of $391 million. This would be a
modest step in the right direction towards addressing the
considerably higher funding needed to address the problems
cited in the Price Waterhouse report.
Finally, Mr. Chairman, the Independent Budget calls for
Congress to provide sustained support for Major and Minor
Construction so that planning and design for future projects
can continue without interruption.
Mr. Chairman, this concludes my statement. I will be happy
to answer any question you or members of the Committee may
have.
Chairman Specter. Thank you very much, Mr. Cullinan.
I regret that there is not time for questioning. I just
have a few minutes left on a vote which is now pending. But the
committee very much appreciates your coming forward to testify,
and we very much appreciate the work that you do for the
veterans.
Just a personal note from me. My father was a veteran of
World War I. He served in the Argonne Forest and was wounded in
action. I recall living in Wichita, KS, and how my father
received benefits from the Veterans Administration Hospital
there for the wounds he sustained and also for nonservice-
connected injuries. He was severely injured when a spindle bolt
broke on a pickup truck, a brand new pickup truck, that rolled
over and crushed his right arm. So, in addition to the
disability of his legs, he had metal wires put in his arm,
which was the best they could do for him at that time. So when
I hear of cutting back on nonservice-connected help for
veterans who are in need, and this was 1937, in the midst of
the Depression, I am very much concerned.
We will be submitting questions to you for the record. This
committee will take a very, very close look at the budget
submissions. We are mindful of the increase which has been
requested already by the House Committee and I have talked to
Chairman Smith about that directly. And we will be reviewing
other sources of income. And as you know, this committee was
instrumental, as was this Senator, in an increase of $1.4
billion last year, and $1.7 billion the year before.
Without objection, Senator Rockefeller's statement will be
made a part of the record.
[The prepared statement of Senator Rockefeller follows:]
Prepared Statement of Hon. John D. Rockefeller IV, U.S. Senator From
West Virginia
The Congress faces tremendous challenges this year, as we
begin the budget process without any of the detail that usually
accompanies the President's budget. Indeed, I understand that
VA may not be able to provide more information until sometime
in April, long after the Committee will have provided its
required input to the Budget Committee. It is, therefore,
vitally important that we use our time wisely this morning to
learn as much as we can about VA's needs, and how the
President's budget proposes to meet those needs.
While we currently lack the details of the President's
submission, the proposed budget provides for a net
discretionary increase of $1 billion, or 4.5 percent, above the
FY 2001 level. Notably, the consortium of veterans services
organizations that authors the Independent Budget for Fiscal
Year 2002 recommends an increase of $3.5 billion over FY 2001
funding.
We haven't been provided with information about how the
President's proposed $1 billion is to be allocated among the
various accounts. Clearly, though, the amount requested for the
health care system is far from adequate. If the appropriation
is actually less than $1 billion more than last year, I believe
we can expect to shrink the system, to contract out for more
and more care, to reduce staff, and to slash programs. These
reductions would be occurring at a time when vast numbers of
our veterans are in need of long-term care and specialized
services, and they are increasingly turning to the VA health
care system for care. The situation is tenuous, at best.
I have no doubt that the proposed budget would have a
devastating effect on our four West Virginia VA Medical
Centers. In spite of the decrease in the total number of
veterans statewide, more and more West Virginia veterans are
turning to the VA for care. For example, the Martinsburg VAMC
has had an increase in new enrollees of 25.8 percent over the
last two years. Expanded enrollment at all four medical centers
has resulted in financial crises, threatening their ability to
provide high quality care in a timely fashion.
What level of funding is appropriate for the VA in the
coming fiscal year? We need to understand what is required to
deal with the impact of inflation, to fund existing
initiatives, and to move forward in the ways we all want the
system to go.
There are many reasons to provide additional funds for VHA
medical care. Landmark legislation signed into law late in 1999
significantly increases noninstitutional long-term care, which
for the first time is available to all veterans who are
enrolled with the VA health care system. While I am enormously
proud of this legislation, there is no doubt it is costly, as
are all long-term health care expansions. Providing long-term
care to all Americans is a priority; VA can begin this effort
for our Nation's veterans, but it must have sufficient funds to
do so.
The Millennium Act also ensures emergency care coverage for
veterans who have no other health insurance options. This is a
costly, but necessary provision: nearly 1 million veterans
enrolled with the VA are uninsured, and they are in poorer
health than the general population. While this legislation has
not yet been implemented or publicized, the claims for this new
benefit are already mounting and will require substantial new
resources.
VA must also contend with higher expenses of medical care
caused by inflation and wage increases, which are estimated to
cost nearly a billion dollars annually. Between these two
large-scale initiatives--long-term care and emergency care
coverage--and simply maintaining current services, we know that
we must meet a minimum funding threshold. The President's
entire discretionary increase would not be sufficient to cover
these baseline costs.
Simply maintaining current services may not be enough to
ensure that VA can meet the health care needs of veterans.
Chronic illnesses of the aging veterans population and newly
recognized challenges--such as the need to shape new programs
for veterans affected by Hepatitis C--will further strain VA's
resources. We must anticipate increased and changing demands
for treating complex diseases, such as HIV and Hepatitis C, and
ensure that veterans with multiple, overlapping medical
problems receive all the treatment that they need.
What level of funding is needed for VA to develop
consistent outcome measures for specialized services, or to
restore the capacity for PTSD and substance abuse treatment to
the legislatively mandated level? In West Virginia, many
veterans not only wait months and months for specialty care,
but have to travel hundreds of miles to get it. While opening
community outpatient clinics has allowed VA to increase
veterans' access to primary health care, we must ensure that
the many veterans who require more intensive specialized
services can turn to adequately funded inpatient programs.
VA has been progressing slowly toward equitable payment for
care in state veterans homes, the largest providers of long-
term nursing care in the United States. Without an increase in
the budget, can we expect VA to adequately staff its State Home
Program office, or adequately support nursing and domiciliary
care?
VA research not only makes a major contribution to our
national effort to combat disease, but also serves to maintain
a high quality of care for veterans through its impact on
physician recruitment and retention. The proposed budget would
allow, at best, for a stagnant research budget. Not only might
this hamper VA researchers in their search for new and better
medical treatments, but it could weaken efforts to protect
human subjects in VA-sponsored studies. The Independent Budget
suggests that an increase of $45 million will be required
merely to offset the costs of inflation and increasingly
stringent research guidelines.
There are certainly savings to be gained through
resourceful management of VA hospitals and clinics, and VA is
pursuing this possibility through the Capital Asset Realignment
and Enhancement Studies (CARES). However, I am resolved that
efficiencies not come at the expense of veterans who turn to
the VA health care system for needed treatment. It is
imperative that VA not neglect essential repairs and
maintenance of its infrastructure while awaiting the outcome of
the CARES process. A shortsighted focus on immediate gains from
halting necessary construction, or from failing to preserve
existing facilities, will most likely prove costly to VA and
veterans in the long run.
I realize that there may be budget constraints on VHA's
ability to carry out its many missions, but we must know what
the impact would be of funding at different levels. Only then
can we make informed choices.
Clearly, there is also a need for a focused, sustained
effort to improve claims processing and other activities within
VBA. Again, we need to know what level of funding is needed.
We already know that VBA needs a significant increase in
staffing to eliminate its increasing backlog. New legislation
reestablishing the duty to assist, regulations presumptively
connecting diabetes to Agent Orange exposure in Vietnam
veterans, and new software systems have severely affected VBA's
workload and slowed output. West Virginia veterans are already
receiving letters from the Regional Office warning them to
expect a 9-12 month delay for initial consideration of their
claims.
If VBA is unable to hire new staff and continue with its
technology pilot programs, the backlog of claims is expected to
grow from the current 400,000 claims (up from 309,000 in
September 2000) to 600,000 by March 2002. We need to make
certain that VBA receives sufficient funding to deal with this
crisis.
VBA also faces an aging workforce, with projections that 25
percent of their current decisionmakers will retire by 2004.
These losses would be in addition to the staff that has already
left service. It takes 2-3 years to fully train a new
decisionmaker. Therefore, it is critical that VBA hire new
employees now to fully train them before the experienced
trainers and mentors have retired.
We cannot forget our commitment to provide a final resting
place of honor for our Nation's veterans. Sadly, the aging of
our veterans population has created great demands on the
National Cemetery Administration, and projections suggest that
the need will continue to grow, peaking in 2008. We must act
quickly to ensure that we are prepared to meet this solemn
duty. How much funding will be required to maintain the current
facilities, to implement fully the National Shrine initiative,
and to fund construction of the six new cemeteries authorized
by Congress in 1999?
While Congress is deciding how to cut taxes responsibly, we
mustn't lose sight of our other critical priorities. We all
need to agree on how much goes to tax cuts and how much should
be saved to strengthen Medicare, invest in education, and fully
address the needs of the men and women who have served our
Nation. The budget before us does not fully recognize our
responsibility to this Nation's veterans and their families. I
will be working to make sure that it does.
Chairman Specter. As I say, we will be submitting questions
for the record to you gentlemen, also to the Secretary.
Thank you for coming this morning.
That concludes our hearing.
[Whereupon, at 11:10 a.m., the committee was adjourned, to
reconvene at the call of the Chair.]
A P P E N D I X
----------
Prepared Statement of Richard Weidman, Director, Government Relations,
Vietnam Veterans of America
Mr. Chairman, on behalf of Vietnam Veterans of America (VVA), I
thank you and your distinguished colleagues for the opportunity to
express our views for the record in regard to the President's proposed
FY 2002 budget for the United States Department of Veterans Affairs
(VA).
While we appreciate President Bush speaking with emphasis about the
nation's responsibility toward veterans in his recent address to
Congress, a one billion dollar increase in discretionary spending at VA
is not an acceptable increase. VVA is very concerned about the effects
of this grossly inadequate proposal will have on vitally needed
services for veterans. VVA is equally concerned about accountability;
will the resources made available by Congress be utilized for maximum
impact, and will VHA actually spend funds in the manner directed by
Congress.
The rate of medical inflation in the United States varies from
about 8-12 percent (+) per year. An $800 million dollar increase for
the Veterans Health Administration (VHA) from FY 2001 to FY 2002 is
represents a 4 percent increase. In other words, the administration's
proposal for VHA is less than half of the conservative estimate of what
VHA simply to maintain its ability to serve veterans. Congress can and
must do better than this.
Vietnam Veterans of America enthusiastically endorse the
Independent Veteran Service Organization (IBVSO) budget. At least $1.7
billion in additional funds over the FY 2001 level is needed in the VHA
just to keep up with inflation. This level of funding for VHA does not
address the need to restore the organizational capacity to serve
veterans that was lost because of flat-lined appropriations in FY 1996,
FY 1997, and FY 1998.
Specialized care services at VHA (e.g., spinal cord injury
treatment, blind & visually impaired services, Post-Traumatic Stress
Disorder (PTSD) treatment programs and services have all been
dramatically eroded in the past five years. When the Veterans
Eligibility Reform Act was enacted in 1996, Congress mandated that the
level of resources and capacity to deliver the specialized services,
which is really the heart of the VHA mission, be maintained at least at
the FY 1996 level of effort. That has not happened. Rather, such
services have been diminished and truncated due to a lack of resources
and a lack of emphasis on these programs by key managers at the VHA the
local health care delivery level, the Veterans Integrated Services
Network (VISN) level, and at the national level.
One example of this diminishment of services is to the Seriously &
Chronically Mentally Ill (SCMI) patients, which includes Post-Traumatic
Stress Disorder (PTSD) treatment and substance abuse treatment. The
funding for SCMI has dropped dramatically below the funding provided in
FY 1996. At least five VISNs have no inpatient or resident treatment
for chronic, acute PTSD. Substance abuse treatment programs have
disappeared or been dramatically cut. Yet VA maintains that they are in
compliance with the capacity requirements of the 1996 law.
The General Accounting Office (GAO) has determined that the
management information systems and documentation of where it spends
resources (much less the outcomes and results for the veteran) are
woefully inadequate or non existent. VVA believes that even without
adequate systems it is clear that VA is not in compliance with the 1996
law and needs to move to restore needed capacity, particularly in the
specialized services.
Therefore, VVA recommends that an average of $1 billion per year be
dedicated to restoration of vitally needed organizational capacity in
VHA. This would probably be $600 million the first year, $1 billion the
second year, and $1.4 billion the third year. The overwhelming majority
of these funds (75-90 percent) would go to specialized services, with
the balance going to staffing needs in acute care areas such as
hepatitis C.
It is the belief of Vietnam Veterans of America that centralized
control of funding is required in the specialized services and in some
other key areas. The decentralized allocation of funds to the VISNs for
the past five years has resulted in dramatic reductions in specialized
services. After the flood of complaints of denial of service from
veterans who needed prosthetics to Congress, and the resulting seeming
inability of VHA central management to win cooperation of the VISN
Directors, it was determined that the only way to ensure that veterans
could get proper prosthetics services, no matter where they lived in
the United States, was to centralize the funding. That effort has been
successful.
VVA believes that the same centralized control of funding is
necessary for all specialized services and other key areas, such as
services to homeless veterans, and outreach, testing, and treatment of
hepatitis C. This requirement for centralized control can be removed
once the VHA has actually developed a sensible and workable
computerized management information system, and has proven that there
is a working system for holding VISN directors and other managers truly
accountable for results and performance of the right measures.
Although VHA has done a great deal to address hepatitis C in terms
of national policy, there still has not been the kind of outreach,
testing, treatment, and case management program, on a consistent
facility to facility basis that is needed. Nor has there generally been
proper moves to acquire new staff at the medical center level needed to
deal with the more than 70,000 veterans who have tested positive for
the hepatitis C virus, even with only sporadic testing and virtually no
outreach. Congress appropriated $350 million to deal with this problem,
but VHA cannot account for these funds. The same could be said about
any of the specialized services.
The bottom line is that VVA recommends a minimum of at least $2.3
billion in discretionary funding be appropriated to VHA over the FY
2001 level, with special tight controls over at least $ 600 million of
these funds to ensure that these funds are utilized as intended by
Congress (for the restoration of vitally needed organizational
capacity, mostly in specialized services and the VA Vet Centers).
readjustment counseling service (rcs) vet centers
Readjustment counseling is provided through a national system of
206 community-based Vet Centers. The Vet Centers are located outside of
the larger medical facilities, in easily accessible, consumer-oriented
facilities highly responsive to the needs of the local veterans. For
many veterans who would not otherwise receive VA assistance, the Vet
Centers are the community-access points for VA healthcare. Vet Centers
also prioritize care to high-risk groups such as minorities, women,
disabled, high combat exposed, rural and homeless veterans. Comprising
a unique more-than-medical VHA program, Vet Centers report to the Chief
Readjustment Counseling Officer at VA Headquarters. Locally, the Vet
Centers function in full partnership with the medical facilities in
each of the 22 VISNs to effect a coordinated spectrum of care for local
veterans.
Vet Center counselors are well-trained clinicians operating close
to the veterans in the community and tailoring the services provided to
the needs of the local veterans. The Vet Center program service mission
features a holistic mix of direct counseling and multiple community-
access functions: psychological counseling for veterans exposed to
psychological war trauma, or who were sexually assaulted during
military service, family counseling, community outreach and education,
and extensive case management and referral activities. The latter
activities include the full range of social and psychological services
designed to assist veterans improve their quality of life and their
level of social and economic functioning.
However, the lack of consistent employment services at the Vet
Centers needs to be addressed by the VA and the U.S. Department of
Labor. Given that neither Labor or VHA is seemingly prone to address
this need (otherwise they would have addressed it long ago), Congress
must reform the Department of Labor's Veterans Employment & Training
Service grant programs to the states to make them much more accountable
for results, and to ensure much collaboration with the Vet Centers as
well as VA Vocational Rehabilitation & Education Service.
In the past two years, the Vet Centers have also acquired the
additional function of providing education and counseling to veterans
treated for HIV and hepatitis C at VA medical centers. The latter
services also include assistance to veterans' family members. In
addition, Vet Center community access functions are used to facilitate
provision of VA primary care closer to veterans' communities through
collocation and tele-health initiatives.
There has been no specific augmentation of Vet Center resources in
over 10 years. Small annual incremental budget increases have enabled
the program to meet inflationary increases and to maintain the same
level of services over the years. With no increase in program
resources, the Vet Centers have, nonetheless, systematically extended
the scope of their mission to include new veteran populations from the
Gulf War; the peace-keeping missions in Somalia; Bosnia and Kosovo;
World War II; the Korean War; as well as taking on the largest
component of VHA's sexual-trauma counseling.
Through stringent cost saving approaches, the Vet Centers continue
to be one of VA's most cost-effective programs. The Vet Centers have
managed to remain cost-effective without sacrificing services to
veterans; they have the highest rate of consumer satisfaction for any
VA program. Additional FTEE and associated salary dollars for the Vet
Centers will ensure the program's capacity to fully provide its unique
service mission in those communities needing staff augmentation.
RCS currently has 206 Vet Centers and 941 FTEE. The operating
budget for FY 2001 (minus field travel dollars and the contracts
program budget) is $70.6 million. Vietnam Veterans of America urges
that for FY 2002, the RCS Vet Centers be specifically authorized and
appropriated an additional 60 FTEE, and be specifically accorded $3.8
million in additional funds, for a total of $74.4 million and 1,001
FTEE for FY 2002.
veterans benefits administration
In regard to the Veterans Benefits Administration (VBA) we
recommend at least $80 million increase, with the proviso that
increased attention be paid to the hiring and proper training of new
adjudicators, ensuring that these new personnel are attuned to
knowledgeably, accurately, and equitably adjudicate veterans claims in
a timely manner, with presumption in favor of approving a substantiated
claim. To train new personnel and to look for reasons to deny a claim,
as opposed to working with veteran to identify evidence that supports
the claim, is not acceptable.
Furthermore, the VBA needs to take significant meaningful steps
toward holding their staff in particularly the supervisors and
managers, on more accountable for the accuracy and quality of their
work. As of now, the predominant measurement emphasis is on volume of
processed veteran claims, irrespective of how well or accurately the
decisions were made. Because veterans know this, the number of appeals
and remands by the Court of Veterans Appeals and the Board of Veterans
Appeals back to the Regional Office of the Veterans Benefits is very
high.
Veterans have lost confidence in the system and appeal everything.
The number of remands and regional office decisions overturned indicate
that veterans are correct to have little faith in the fairness and
accuracy of decisions in many regional offices. Moreover, the high
remand rate on appeal is directly responsible for increasing the
pending claims backlog at the regional offices. Returned claims are
afforded expedited consideration, pushing new claims that have been
languishing in piles even further down the docket.
If we are ever going to eliminate the backlog of claims, the focus
has to be on doing it right the first time. A few years ago the Ford
Motor Company almost went out of business because the emphasis on the
production line was solely on speed and volume, and not on quality.
Once Ford focused on getting it right the first time, production costs
went down Ford survived and earned the trust of the American people.
The same sort or improvement in performance and results can also
happen at the VA if Congress moves to assist Secretary Principi in this
task. While at least $80 million more is required for VBA, VVA is
equally concerned about performance and results. Vietnam Veterans of
America is very concerned that the money that is being spent toward
accomplishing the objectives set by Congress and the Secretary.
The National Cemetery Administration needs a significant increase
to keep pace with inflation (at least $10 to $12 million). The Office
of the Inspector General appropriation should be significantly
increased, at the same time that Congress help refocus their mission.
Too much time is being spent on recurring reviews that result in few
changes or improvements of services to veterans. VA management needs to
be held accountable for following through with decisive action.
Mr. Chairman, Vietnam Veterans of America urges you and your
distinguished colleagues to push hard for a significant increase in the
administration's request for the FY 2002 VA appropriation. VVA also
urges that you push hard for safeguards to ensure accountability for
actual performance and results in all areas of the VA.
VVA strenuously objects to the proposal to transfer $235 million
from the Veterans Health Administration (VHA) to the Department of
Defense (DoD) to help pay for the recently expanded Tri Care benefits.
This is an outrageous suggestion, and we urge Congress to reject it out
of hand. The Defense side of the budget has plenty of room under the
cap to pay for these benefits that retirees have earned by virtue of
longevity retirement. General Motors does not ask Medicare to pay part
of the ``retiree benefits'', nor should a resource-rich DoD ask an
under-funded VA to pay their bills.
VVA also strongly urges you and your distinguished colleagues on
this Committee to hold a series of oversight hearings this year
focusing on what VA said they were going to do with both the money
appropriated for FY 1999 and FY 2000. Since Congress gave significantly
more funds than VA said they needed to accomplish the goals set forth
in their submittal, the central question should be about results and
performance.
Mr. Chairman, Vietnam Veterans of America thanks you for this
opportunity to share our views on the budget for FY 2002 for the
Veterans Administration. We stand ready to actively support you and
your colleagues on this Committee in every way we can to achieve proper
funding for vitally needed services and treatment of veterans, and to
ensure that those funds are spent effectively to achieve the best
performance.
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