[Senate Hearing 109-217]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-217
 
                PENDING HEALTH CARE RELATED LEGISLATION

=======================================================================

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 9, 2005

                               __________

       Printed for the use of the Committee on Veterans' Affairs


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                     COMMITTEE ON VETERANS' AFFAIRS

                      LARRY CRAIG, Idaho, Chairman
ARLEN SPECTER, Pennsylvania          DANIEL K. AKAKA, Ranking Member, 
KAY BAILEY HUTCHISON, Texas              Hawaii
LINDSEY O. GRAHAM, South Carolina    JOHN D. ROCKEFELLER IV, West 
RICHARD BURR, North Carolina             Virginia
JOHN ENSIGN, Nevada                  JAMES M. JEFFORDS, (I) Vermont
JOHN THUNE, South Dakota             PATTY MURRAY, Washington
JOHNNY ISAKSON, Georgia              BARACK OBAMA, Illinois
                                     KEN SALAZAR, Colorado
                  Lupe Wissel, Majority Staff Director
               D. Noelani Kalipi, Minority Staff Director


                            C O N T E N T S

                              ----------                              

                              June 9, 2005
                                SENATORS

                                                                   Page
Craig, Hon. Larry E., U.S. Senator from Idaho....................     1
Akaka, Hon. Daniel K., U.S. Senator from Hawaii..................     3
Salazar, Hon. Ken, U.S. Senator from Colorado....................     4
Murray, Hon. Patty, U.S. Senator from Washington.................     6
Obama, Hon. Barack, U.S. Senator from Illinois...................     7
Rockefeller, Hon. John D. IV, U.S. Senator from West Virginia....     8
Thune, Hon. John, U.S. Senator from South Dakota.................    54
    Prepared statement...........................................    55

                               WITNESSES

Nicholson, Hon. R. James, Secretary, U.S. Department of Veterans 
  Affairs........................................................     9
    Prepared statement...........................................    11
Mooney, Donald, Assistant Director, Veterans Affairs and 
  Rehabilitation, The American Legion............................    24
    Prepared statement...........................................    25
Cullinan, Dennis M., Director, National Legislative Service, 
  Veterans of Foreign Wars of the United States..................    31
    Prepared statement...........................................    32
Atizado, Adrian, Assistant National Legislative Director, 
  Disabled Veterans..............................................    36
    Prepared statement...........................................    37
Blake, Carl, Associate National Legislative Director, Paralyzed 
  Veterans of America............................................    43
    Prepared statement...........................................    44
Jones, Richard National Legislative Director, AMVETS.............    48
    Prepared statement...........................................    49

                                APPENDIX

Response to written questions submitten by Hon. Daniel K. Akaka 
  to James R. Nicholson..........................................    59


                PENDING HEALTH CARE RELATED LEGISLATION

                              ----------                              


                         THURSDAY, JUNE 9, 2005

                               U.S. Senate,
                    Committee on Veterans' Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:06 a.m., in 
room SR-418, Russell Senate Office Building, Hon. Larry Craig 
(chairman of the committee) presiding.
    Present: Senators Craig, Thune, Akaka, Rockefeller, Murray, 
Obama, and Salazar.

 OPENING STATEMENT OF HON. LARRY CRAIG, U.S. SENATOR FROM IDAHO

    Chairman Craig. Good morning everyone and welcome to the 
committee. The Senate Committee on Veterans' Affairs will be in 
order.
    Today, the committee meets to receive testimony on several 
legislative proposals that have been introduced by Senators 
during the first session of the 109th Congress. We have a total 
of 10 items on the agenda today. All of the bills focus on 
changes in VA's health care system. They include four bills 
from the Ranking Member, Senator Akaka, three bills from 
Senator Salazar, one from Senator Obama, and one bill from 
Senator Specter. Last, and I certainly hope not least, 
legislation that I have introduced.
    I am very pleased that the Secretary of Veterans Affairs, 
Jim Nicholson, is here this morning to offer VA's views. And I 
want to welcome the veterans service organizations as well. I 
understand we had some difficulty providing complete language 
from some of the bills and because of that the witnesses may be 
unable to comment fully on all of today's agenda. I certainly 
hope that the witnesses will make every effort to follow up as 
quickly as possible with their views so that we might have them 
and they will become a part of the committee's record. It is 
important that we know the Administration's view about 
legislation and what our veterans themselves also think about 
these individual legislative proposals.
    As I mentioned, I have one bill on today's agenda, S. 1182. 
I outlined all of the provisions of the legislation in great 
detail in my statement to the Senate when I introduced the 
measure so I will not take up a lot of the committee's time 
this morning to restate what I have said, but I do want to take 
just a moment to highlight some of the important aspects of the 
bill.
    S. 1182 offers a few important policy markers that I 
believe this committee and Congress must discuss and grapple 
with during the 109th Congress. The first of these is the 
provision of long-term care for our veterans. In S. 1182 I 
propose to remove from the law the so-called capacity 
requirement that VA maintain the same number of long-term care 
beds as it had in operation in 1998. I raise this provision to 
my colleagues' attention because I want to make it clear that I 
am not suggesting that VA should abandon its institutional 
long-term care program. Instead, I view this proposal as the 
first step in fostering a discussion about how we can develop a 
rational, sustainable and workable program for long-term care 
for our veterans that focuses on choices and options rather 
than beds and buildings. Of course in saying that, it should 
also be pretty clear that the current statutory mandate is not, 
in my opinion, a rational, workable program.
    I welcome all of my colleagues' views on this discussion. I 
know we share a desire to ensure that the best services be 
available to our veterans. We also share a desire to make 
certain that the resources we devote to the health care system 
are spent as effectively as possible with no dollar wasted. I 
hope we can move closer toward those goals in VA's long-term 
care program.
    Second, I want to point out that the provision in S. 1182 
would allow VA to provide or pay for the first few days of 
hospital care for newborn babies of women veterans who give 
birth under VA care. VA claims to offer a comprehensive package 
of health care services to enrolled veterans. In my humble 
opinion, because the package does not offer any coverage for a 
newborn child it is not a comprehensive package for our women 
veterans. These brave women make up an increasing part of our 
military force and the military is changing in many ways to 
reflect this new reality. VA must do the same. I hope this 
provision will move us forward in that goal.
    Finally, I want to mention the section of S. 1182 that 
makes improvements in VA's mental health programs. I know that 
many of you on this committee and in the audience have concern 
about returning troops and their need for mental health 
services. To that end, there have been a number of proposals 
put forward by Senators and Representatives to deal with this 
issue. All of them have the best intentions in mind.
    My approach to this important issue is consistent with my 
belief that Congress should not micromanage the VA's care 
system. In fact over the past few years, largely on its own 
initiative, VA has become one of the Nation's best health care 
systems. So my legislation sets forth a few areas which I 
believe VA can expand and improve on its past successes in the 
provisions on mental health services. I attach a reasonable 
amount of money to the effort to make those improvements and I 
intend to monitor the progress closely from the committee. I 
hope other Members will join me in this approach so we can make 
real and necessary improvements while at the same time not 
trying to over manage VA's clinical care program to the 
detriment of other important needs.
    Let me stop there and turn to our Ranking Member first who 
has several pieces of legislation that he may wish to speak 
about this morning in his opening comments, and then I will 
turn to the balance of the committee. With that, let me turn to 
Senator Akaka.

          OPENING STATEMENT OF HON. DANIEL K. AKAKA, 
                    U.S. SENATOR FROM HAWAII

    Senator Akaka. Thank you very, Mr. Chairman. Again I want 
to reiterate my pleasure in working with you on this committee 
and your staff as well. I feel that we have made tremendous 
progress thus far, and of course, we need so much more 
together. I want to thank you for this hearing and welcome our 
good friends, Secretary Nicholson and Undersecretary Perlin and 
General Counsel McClain, as well as our veterans service 
organizations who are here.
    As we have a full legislative agenda before us today I want 
to take just a moment here. Over the last few months I have 
introduced several pieces of legislation. They share a common 
theme. The goal of each is to make sure that returning service 
members get the care they need while continuing to improve care 
for veterans already in the system. First is legislation to 
allow a full 5 years of VA health coverage to returning service 
members without bureaucratic hassles and stringent eligibility 
rules. This can further the seamless relationship we talk about 
of military personnel from active duty to VA.
    Today, any active duty service member who is discharged or 
separates from active duty following deployment to their Iraqi 
theater of combat, even Reservists or Guard who stand down but 
remain on duty, will be immediately eligible for VA health care 
for a 2-year period. There are good reasons to give returning 
service members more than just 2 years. Most notably, it is 
clear that 2 years may not be enough time for symptoms related 
to PTSD to manifest. Even if symptoms present in the 2-year 
timeframe, it might be some time before a service member 
decides to seek care. VA opposes this legislation on the 
grounds that returning veterans could enter the system like 
other veterans. Looking at the proposals in the President's 
budget and the decision to cut middle income veterans out of 
the system in 2003, I am not as confident and do not want to 
take that chance.
    We also have legislation before us to specifically address 
mental health. I truly believe that VA mental health is in 
jeopardy due to budget constraints. Increased demand and flat 
line budget increases over the past few years have literally 
starved the system. The demand is about to grow. Experts have 
conservatively estimated that up to 20 percent of men and women 
who are currently serving in Iraq and Afghanistan will require 
treatment for a mental illness health issue.
    Congress has already recognized the merits of all 
specialized programs, including mental health. As such, we 
enacted legislation that required VA to retain its ability to 
provide services at the levels in place in 1996. Unfortunately, 
the VA was not required to adjust this figure for inflation. 
Quite obviously, using 1996 dollars in 2005 is not working. As 
we are on the precipice of burgeoning demand for care we need 
to be talking about real dollars, not 1996 dollars, to get a 
true sense of VA's capacity to care for veterans with mental 
health needs.
    Mr. Chairman, I look forward to working with you on the 
days ahead to move the committee's agenda forward, and today I 
look forward to the views of our witnesses. Thank you very 
much, Mr. Chairman.
    Chairman Craig. Senator Akaka, thank you very much for that 
opening statement and those pieces of legislation.
    Now let me turn to Senator Salazar. The Senator has 
introduced three pieces of legislation that are on the agenda 
today for hearing. Ken, please proceed.

   OPENING STATEMENT OF HON. KEN SALAZAR, U.S. SENATOR FROM 
                            COLORADO

    Senator Salazar. Thank you very much, Chairman Craig and 
Senator Akaka for putting together this hearing. Thank you, 
Secretary Nicholson and Undersecretary Perlin and General 
Counsel McClain for being here as well, and all the members of 
the veterans service organizations who are here today.
    I want to start out by commenting on what I see as a 
positive development here in Washington, DC. In my short time 
here in Washington I have seen how the poison of partisan 
politics can slow down the process on important legislation for 
the people of our country. People in Colorado and across the 
country are rightly concerned that Congress is sometimes more 
interested in partisan infighting than in working together to 
make their lives better. This committee, however, Mr. Chairman, 
under your leadership I believe is an exception. Members in 
this committee do have some important policy differences and 
the majority and minority do have different approaches for 
fixing some of the problems that our veterans face. But we do 
share much more in common than many realize.
    We both recognize that the VA is under funded and facing 
bigger workloads every year. We recognize that the VA needs to 
do more to improve mental health care. We believe that there 
are many pockets of rural America where there is not enough 
access to veterans health care. We share outrage that hundreds 
of thousands of veterans are homeless every night. We see the 
need to improve outreach at vet centers to make life easier for 
veterans returning from Iraq and Afghanistan, and to extend low 
price prescription drugs to more veterans. There is much in 
that common agenda.
    We will discuss a number of important pieces of legislation 
today. Senator Craig's bill has a number of very good 
provisions. I would like to see some changes in this bill, 
including the VA's nursing home capacity requirements and look 
forward to working with you on that legislation. Senator Akaka 
has introduced a number of important bills, including one I am 
proud to co-sponsor which will improve mental health care 
across the spectrum. I urge the committee to pass this 
legislation sponsored by Senator Akaka. I also urge the 
committee to review and approve Senator Obama's homeless 
veterans bill and to embrace the goals of Senator Specter's 
prescription drug bill.
    I want to thank Senator Craig and Akaka for adding three 
simple but straightforward and important bills that I have 
introduced to help improve care for rural veterans, expand 
services for blinded vets, and to push the VA on its strategic 
planning for long-term care. These are three bills that are 
roundly supported by the VSO community. They will improve the 
lives of thousands of veterans, they are fiscally responsible, 
and we can afford them now.
    First, let me speak for a minute about Senate bill 1191, 
the Vets Ride Act bill for rural vets. This bill would provide 
critically needed transportation services in remote, rural 
pockets of the country by having the VA partner with veterans 
service organizations and State veterans service offices. In 
Colorado, the American Legion has partnered with Routt County 
State veteran service officers to fulfill this gap and provide 
transportation options to veterans across northwest Colorado. 
They rent vans, pick up elderly vets and drive them to Grand 
Junction to the VA medical center and put together what is 
essentially a 300-mile round trip to help these veterans.
    Such ad hoc arrangements have developed all over the 
country. Although they have community support, many of these 
travel arrangements suffer from chronic under funding. This is 
an area where a relatively small amount of Federal investment 
can result in significantly better care for our Nation's rural 
veterans. I urge this committee to support my bill to create a 
small grant program to support VSOs and State officials through 
this vet ride program.
    Second, the blind vets, Senate bill 1190, the Blinded 
Veterans Continuum of Care Act improves care for blinded 
veterans by increasing the number of outpatient specialists at 
VA medical centers. This is another area where a relatively 
small Federal investment can make a major difference in the 
quality of life for veterans. There are 135,000 blinded 
veterans, including 1,400 in Colorado today. For these 
veterans, the right type of expert long-term care can mean the 
difference between being imprisoned at home, unable to work, 
and living independent, rewarding lives. It is literally a 
difference between night and day.
    In 1996, the VA introduced blind rehabilitation outpatient 
specialists at a small number of facilities. These programs 
offer training with living skills, mobility, and technology. 
They offer outpatient and in-home care. They provide pre-
screening and follow-up care for blind rehabilitation centers. 
While the program has grown, there are still not enough of them 
to meet the demand. The bill I propose would expand this 
successful program and ensure that thousands more blind 
veterans have the services they need.
    Finally, Mr. Chairman, Senate bill 1189 on long-term care 
would require the VA to publish its strategic plan for long 
term within the 6 months. Last month at a hearing of this 
committee, Undersecretary Perlin and Members of this committee 
and myself had an ongoing dialog about the vision for long-term 
care that Dr. Perlin so eloquently stated. I believe we need to 
move forward and put that vision into a strategic plan.
    The CARES Commission recommended that VA develop a 
strategic plan for long-term care. More than a year later I 
know that the VA is still working on that plan, and I believe 
making progress. My bill simply sets a deadline. It also 
includes some reasonable but critical requirements on that 
plan. For instance, the plan, I believe, should include cost 
and quality analysis of the entire spectrum of care for 
veterans. A comprehensive plan will not only help the VA but 
also help Congress in its oversight of the important challenge 
of long-term care for our veterans.
    I thank you again, Chairman Craig, for your leadership and, 
Senator Akaka, for your participation in leadership of this 
committee. Thank you.
    Chairman Craig. Ken, thank you for those explanations of 
your legislation.
    Senator Murray, do you have any opening comments?

   OPENING STATEMENT OF HON. PATTY MURRAY, U.S. SENATOR FROM 
                           WASHINGTON

    Senator Murray. I do. Thank you very much, Mr. Chairman, 
and thank you to all of our panelists for being here today to 
testify on these important pieces of legislation.
    Mr. Chairman, I really share my colleagues' concern 
regarding the need for increased access to health care for our 
American veterans and I am really disappointed that inadequate 
funding has really led to some severe barriers for health care 
for a lot of our veterans. I support many of the proposals that 
are before us today, especially Ranking Member Akaka's veterans 
mental health care capacity enhancement act.
    A few months ago I had the opportunity to visit with some 
troops from Washington State in Iraq and they told me their 
biggest concern is health care for their families and 
themselves once they finish their tour of duty. I have also 
held field hearings and I have spoken with veterans from all 
over my State about their need for health care. The veterans I 
have met with in Washington State have made it very clear that 
reductions in mental health resources are coming at the worst 
possible time, just as veterans from Iraq and Afghanistan are 
returning home with PTSD and other mental health concerns. The 
VA does not have the resources available to handle their needs.
    I also have some concerns with other parts of the 
legislation being reviewed today. Specifically, I just want to 
say that I do oppose the provision in S. 1182 that repeals the 
Millennium bill's long-term care bed census requirements. This 
committee just heard a few weeks ago from Alfie Alvarado-Ramos, 
the assistant director of Washington State Department of 
Veterans Affairs and president of the National Association of 
State Veterans Homes, about the demand that is increasing for 
long-term care facilities. The population of veterans over the 
age of 85, the most likely to need VA long-term care, is 
expected to double over the next 10 years.
    I believe the Administration and this committee need to 
aggressively look at serious solutions to meet that need and 
not back away from our commitment and avoid the problem.
    Secretary Nicholson, I looked over your testimony and I am 
happy to hear that you do support increased mental health 
resources for our veterans, and especially for those soldiers 
and sailors and airmen and marines that are returning from 
overseas. Over the past month I met with some Guardsmen and 
Reservists in Washington State who just got back from Iraq and 
many of them commented to me on the need for increased 
resources for mental health needs, especially in the area PTSD. 
I think it is really vital that we provide the resources to 
them and the VA to help them integrate back into our 
communities and prevent the long-term psychological and health 
damage that can result.
    As you know, Mr. Secretary, I supported increased funding 
for that and other needs as part of my veterans amendment to 
the supplemental, and I was disappointed that the 
Administration did not support us on this. I am very concerned 
that this committee is going to move with some very important 
needed VA programs just to see them under funded by billions of 
dollars by the VA, and limiting our ability for veterans to get 
access to these program. The current funding reality is a major 
reason why I support Senator Johnson's assured funding for 
veterans health care act which would make VA health care 
funding mandatory.
    So with that said, I look forward to your testimony, 
Secretary Nicholson, on how the VA is going to pay for these 
expanded services while still maintaining our current levels of 
service.
    Thanks very much, Mr. Chairman.
    Chairman Craig. Senator Murray, Patty, thank you very much.
    Let me turn to Senator Obama. A bit out of order, but 
Senator Rockefeller has agreed here. The Senator has to go to 
another committee as soon as he can and yet he has a couple of 
pieces of legislation before this committee so, Senator, we 
will turn to you.

            OPENING STATEMENT OF HON. BARACK OBAMA, 
                   U.S. SENATOR FROM ILLINOIS

    Senator Obama. Thank you so much, Mr. Chairman, and let me 
thank my senior colleague--senior in experience, not in years--
Jay Rockefeller for letting me go first.
    First of all before I begin, let me thank Secretary 
Nicholson. He had committed to come to Illinois to talk about 
disparities in payments for disability veterans. I just want to 
let the committee know that Secretary Nicholson is a man of his 
word. He came, met with veterans there, and responded. We very 
much appreciate that and we will be working with him diligently 
to solve some of those issues.
    Mr. Chairman, Ranking Member Akaka, I would like to thank 
you for holding this hearing so that this committee can learn 
more about pending veterans health care legislation. I am very 
impressed with the pieces of legislation that have been 
presented by the various Members of the committee. I am also 
pleased that a bill that I have introduced, the Sheltering All 
Veterans Everywhere Act, or SAVE Act, made it on the docket for 
today's hearing.
    As many of you know, our Nation's veterans suffer from 
homelessness at a rate far higher than the average population. 
The VA estimates that more than 250,000 veterans are homeless 
on any given night, and that more than 500,000 experience 
homelessness at some point each year. That is obviously an 
embarrassment to the Nation that veterans who served our 
country would find themselves disproportionately in such 
circumstances. Male veterans are twice as likely to become 
homeless as their non-veteran counterparts. Female veterans are 
almost four times more likely to become homeless than their 
non-veteran counterparts. Those are remarkable statistics.
    The bill I introduced will reauthorize and expand several 
important homeless veterans programs. I am proud that the SAVE 
Act has the support of more than 10 national homeless and 
veterans advocacy groups, groups ranging from the National 
Coalition for Homeless Veterans to the Paralyzed Veterans of 
America, from the Volunteers of America to the American Legion, 
have all endorsed the bill that I have proposed.
    I thank very much the Chairman, the Ranking Member, and my 
colleagues on the committee for considering this bill. I look 
forward to working with my colleagues on this and other 
important veterans health care initiatives.
    Secretary Nicholson, I understand that you were not able to 
prepare a VA position on the SAVE Act in time for this hearing, 
so I just want to make sure that you will be willing to submit 
for the record VA's position on the bill and look forward to 
reading your response. So thank you very much.
    Chairman Craig. Senator Obama, thank you. Before you came 
in I did make mention that some of the text of the legislation 
was not available and that the record will be left open so that 
the Administration can produce testimony for these pieces of 
legislation for the record.
    Senator Obama. Thank you, Mr. Chairman.
    Chairman Craig. Now let me turn to certainly one of the 
senior Members of this committee, Senator Jay Rockefeller.
    Senator.

       OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Rockefeller. Thank you, Mr. Chairman. I will be 
extremely brief because I also have to go to a committee 
hearing. Actually, just so Secretary Nicholson does not have to 
think that all problems are veterans problems, it is 
interesting in our aviation transportation security, two-thirds 
of all the planes that fly around in the air at any given 
moment are private, corporate, individual, or whatever. They 
are subject to no security whatsoever. People getting on, 
people getting off. It's amazing. So we have spent billions on 
the commercial and not a nickel on the other.
    I just wanted to pay my respects to the Chairman and to the 
Ranking Member; say that I agree very much with Patty Murray 
when she indicated about the Millennium Act; express some 
reservations on Senator Specter's S. 416; obviously support the 
Salazar bills, and the homeless and other bills. But simply 
just to say that this all becomes important. I had to make two 
more phone calls to West Virginia mothers last night about 
soldiers who had been killed. Not wounded, but killed. And it 
goes on. They will not be veterans, but this is all going on 
and it just makes it tremendously important for us to do the 
right thing.
    So I wanted to stop by, even if I could only say that. I 
thank the Chairman whose leadership is always good, for his 
courtesy, and I thank the Secretary.
    Chairman Craig. Jay, thank you very much.
    Now let us turn to our first panel. In part, they have been 
introduced by other of our colleagues, but let me formally 
welcome to the committee and our first panel, the Honorable Jim 
Nicholson, Secretary of Veterans Affairs. He is accompanied by 
the Honorable Jonathan Perlin, Undersecretary for Health, and 
the Honorable Tim McClain, General Counsel to the Veterans 
Affairs or the Administration. We thank you for being here.
    Mr. Secretary, please proceed.

       STATEMENT OF HON. R. JAMES NICHOLSON, SECRETARY, 
              U.S. DEPARTMENT OF VETERANS AFFAIRS

    Secretary Nicholson. Thank you, Mr. Chairman, and good 
morning Senator Salazar, Senator Murray. I appreciate your 
being here. I also would mention that I have to be very careful 
this morning because my sister is also here visiting from 
Colorado as part of Senator Allard's----
    Chairman Craig. Why don't you introduce her to the 
committee?
    Secretary Nicholson. All right, there she is. We call her 
Bunny.
    Chairman Craig. Good morning; welcome.
    Also, before you proceed, somebody brought a pipe organ in 
with them. Would you turn it on vibrate? Thank you.
    Please proceed.
    Secretary Nicholson. Just to mention, my sister is a very 
respected advocate for children, used to be in Colorado, now 
nationally. She lectures nationally and I am very proud of her.
    With your permission, Mr. Chairman, I would like to 
summarize my written testimony and submit the full text of my 
remarks for the record.
    Chairman Craig. Without objection, your full comments will 
be a part of the record.
    Secretary Nicholson. This year marks the Department of 
Veterans Affairs' 75th anniversary. The creation of the 
Veterans Administration in 1930 was a watershed event for 
America's citizen soldiers. VA's birth represented the 
realization of the four pillars of President Lincoln's promise: 
the steel and stone of VA facilities where veterans receive the 
care and benefits they earned in freedom's defense, the 
compassion and commitment of VA employees to serve their fellow 
citizens who had selflessly served them, the law of the land as 
legislated for veterans by the Congress of the United States on 
behalf of a grateful Nation, and the stewardship of the Chief 
Executive and Commander in Chief sworn to care for him and her 
who shall have borne the battle.
    I am taking the liberty of mentioning our 75th anniversary, 
Mr. Chairman, one, because I am proud to lead such a fine and 
honorable organization, and two, because even after 75 years it 
is clear as I read the legislation you and your colleagues are 
proposing that the Congress and VA, despite some differences, 
are still partners and advocates for our Nation's veterans.
    Mr. Chairman, we are certainly in step with provisions of 
the Veterans Health Care Improvements Act of 2005. My written 
response reflects that harmonious occasion when legislators and 
the White House are able to plow common ground together. I 
commend you, Mr. Chairman, for your prescience in creating and 
crafting legislation that will certainly benefit America's 
deserving veterans, young and old, who depend on my department 
to be there for them fairly, compassionately, and sensibly.
    Your legislation addresses the same issues President Bush 
identified as needing timely and equitable corrections in order 
to level the playing field of out-of-pocket reimbursements for 
emergency care costs. Consistency and fairness must go hand-in-
hand and we fully support your efforts on our veterans behalf.
    Mr. Chairman, you and I know all too well the impact PTSD 
and other mental health disorders have not only had on 
servicemen and women who bear that burden, but also on their 
families, and their friends, employers, and the communities who 
look to us for compassionate care for their loved ones and 
fellow citizens. Any legislative path that we can travel to 
help alleviate mental health suffering of our young men and 
women returning from their overseas duties is a path we must 
take, and I commend you for paving that path with durable and 
considerate legislation.
    Mr. Chairman, I also want to applaud you for understanding 
the mechanics of my department, how we accomplish the good work 
we do, and how certain laws have impeded our ability to fulfill 
our health care promise to our veterans. Your bill repeals two 
laws that are outdated, unnecessary, and costly to VA's 
mission. Most importantly, your legislation removes the 
barriers to caring for veterans where they may need care the 
most, at home or in settings of their choice.
    With respect to Senate bills 481, 614, and 716, Mr. 
Chairman, we either do not concur with the assumptions on which 
the legislation is based, or we take issue with the 
consequences of the legislation, or we believe that we are 
already providing veterans with the services proposed in the 
bill, rendering redundant the legislative intent. In the 
interest of time I will reserve my comments on our specific 
differences should the Members of the committee have questions 
following my statement.
    Finally, Mr. Chairman, there are several additional draft 
bills that we have not yet had an opportunity to carefully 
review. One is titled the Sheltering All Veterans Everywhere 
Act. While I cannot comment on the specific bill, I do want to 
state for the record that VA is a relentless advocate for 
stemming, reversing, and eliminating the tide of homelessness 
that overwhelms literally hundreds of thousands of veterans 
every year. The Department of Veterans Affairs devotes more 
than $1.1 billion every year to provide health care services to 
more than 100,000 homeless veterans. The Veterans Health 
Administration has provided specialized services to 300,000 
veterans under its homeless-specific programs.
    Mr. Chairman, 11 years ago in 1994, VA began awarding funds 
under the Homeless Grant and Per Diem Program. By the end of 
this fiscal year we will have awarded approximately $90 million 
in funding to 350 organizations to create 10,000 transitional 
housing beds, more than 40 service centers, and 100 vans for 
transportation. We would not be so successful without the 
partnerships we have forged with businesses, communities, and 
faith-based non-profit organizations. I will put our record of 
compassionate care for homeless veterans up to any bright light 
inspection. I am proud of our record on behalf of homeless 
veterans, and the VA always is a champion for any man or woman 
who is outside looking in. In fact, I currently chair the 
intergovernmental agency for homelessness in the Federal 
Government.
    Mr. Chairman, the VA is moving at a very brisk pace these 
days. We are leading in health care. We are ahead of the curve 
in the use of new electronic records management technologies. 
We are exploring innovative rehabilitation therapies and 
prosthetics. We are expanding our community care base. We are 
in a major facilities realignment and expansion. We are more 
sensitive than ever to our aging veterans' needs. We are 
developing new employment opportunities for our veterans 
returning from Southwest Asia. We are honoring our fallen 
veterans and we are providing benefits and compensation in 
record amounts.
    Our good works are too many to enumerate in the time I have 
left, but let me just say in closing that as we look back over 
the last 75 years of service to America's veterans, VA's 
success would not have been possible without the bonds of 
cooperation between the Congress and the Administration. 
William Wrigley once said, when two men in a business always 
agree, one of them is unnecessary. Mr. Chairman, over the years 
there have been many collegial disagreements about process 
between our respective institutions. But those differences, in 
the end, strengthened our mutual progress to care for him and 
her who bore the battle.
    Thank you, Mr. Chairman. I would be pleased to answer any 
questions you or the committee members may have.
    [The prepared statement of Mr. Nicholson follows:]

    Prepared Statement of Hon. R. James Nicholson, Secretary, U.S. 
                              Department 
                          of Veterans' Affairs

    Good afternoon Mr. Chairman and Members of the committee:
    I am pleased to be here this morning to present the Department's 
views on several different bills being considered by the committee. 
They cover a wide range of subjects related to VA's provision of health 
care services to veterans.
             veterans health care improvements act of 2005
    Mr. Chairman, I will begin by commenting on your draft bill that 
includes an array of provisions, many of which would carry out 
proposals that were included in the President's budget submitted to 
Congress earlier this year. We strongly support enactment of this 
measure and we appreciate your inclusion of provisions to carry out the 
President's plans for assisting veterans and for assisting the 
Department to carry out its mission.
    One major provision in the bill would expand VA's authority to 
assist with payment for emergency-care costs that veterans incur in 
private hospitals. As you may know, a major study found that veterans 
with cardiac emergencies, despite having health insurance, often 
deliberately forgo emergency treatment at the closest community 
hospital (where they might incur out-of-pocket expenses) in favor of 
receiving care from the nearest VA facility at no or minimal cost. 
Delaying needed emergency medical treatment can jeopardize their health 
status and hinder the Department's ability to timely and successfully 
manage their emergent medical conditions. Under current law, a veteran 
who obtains emergency care in the private sector for a nonservice-
connected condition is not eligible for VA reimbursement for the 
related expenses if the veteran has any insurance or other coverage for 
the cost of the care, in whole or in part. Your proposal would amend 
the law to enable the Department to reimburse a veteran for out-of-
pocket expenses not covered by insurance or other coverage, thereby 
ensuring that veterans, whether insured or not, have consistent access 
to optimal care for emergency health conditions.
    Unfortunately, the stress of combat leaves scars on many veterans. 
Your bill contains several new authorities that will help assist us in 
caring for those returning from overseas who are suffering from PTSD 
and other mental health disorders. The bill also contains a provision 
to exempt former POWs from having to pay co-payments in connection with 
the receipt of extended-care services, and a second provision to exempt 
veterans from co-payments for hospice care in a hospital or at home. 
These provisions will be extremely beneficial to the affected veterans. 
The bill would also authorize time-limited care for newborn children 
when veterans deliver the children under VA auspices.
    Finally, Mr. Chairman, your bill contains two provisions that would 
repeal laws that have seriously hindered our efforts at VA to provide 
veterans with high-quality care by the best and most cost-effective 
means. The bill would repeal a law that requires VA to maintain at 
least the same staffing and level of extended-care services in 
Department facilities as was provided in fiscal year 1998. That law has 
seriously limited our ability to provide or pay for extended care 
services for veterans in a variety of institutional and non-
institutional settings outside VA, including private nursing homes in 
the community and State nursing home facilities. As you know, many 
veterans prefer to remain in their homes and communities, and it is 
often cost-effective to provide care in those settings. Your bill would 
also repeal an old law that generally bars the Department from using 
appropriated funds to compare the costs of providing services directly, 
or by contract, which impedes our ability to obtain the best possible 
value for veterans. On a government-wide basis, public-private 
competitions completed in FYs 2003 and 2004 are estimated to generate 
savings, or cost avoidances, for the taxpayer of more than $2.5 billion 
over the next 3 to 5 years. The tailored and responsible use of 
competitive sourcing at VA will help the Department free up resources 
that can be dedicated to our veterans.

                                 S. 481

    Several years ago, Congress enacted a law authorizing VA to provide 
treatment to veterans returning from combat service for conditions that 
might be related to that service, even when there is not sufficient 
evidence to conclude that the condition is attributable to service. VA 
can provide that treatment for a 2-year period following release from 
service, during which it would be expected that the veteran might apply 
for service-connection for the condition.
    S. 481 would extend the period of eligibility under this law from 2 
years to 5 years. Apparently, the intent is to ensure that a combat 
veteran can continue receiving VA care for 5 years, rather than just 2 
years. We do not believe this measure is necessary.
    The current 2-year post-combat eligibility period provides ample 
opportunity for a veteran to apply for enrollment in the VA system. 
When such a veteran does enroll, VA places that veteran in enrollment 
priority category 6 during the 2-year period, and provides cost-free 
care for any disorder that may be attributable to the combat service. 
VA will also provide care for any other disorder, but the veteran would 
be charged any co-payments that may apply based upon the veteran's 
income. At the end of the 2-year period, the veteran could continue 
receiving VA care, but would be placed in the appropriate priority 
group, and might be subject to co-payments for all care.

                                 S. 614

    Mr. Chairman, S. 614 is a bill that is identical to a measure that 
was considered during the 108th Congress, when the Department voiced 
its opposition. It would provide all Medicare-eligible veterans with a 
new prescription drug benefit through VA. Specifically, the bill would 
provide this new benefit to Medicare-eligible veterans with a 
compensable service-connected disability. It would be in addition to 
the health care benefits they are currently eligible to receive from 
VA. Those who do not have a compensable service-connected disability 
could choose to receive the new prescription drug benefit in lieu of 
all other VA health care benefits.
    Before this committee last year, Deputy Secretary Mansfield 
testified that it is not clear how the VA benefit proposed in this bill 
would interact with the new Medicare benefit. As you know, we are now a 
year closer to full implementation of that new Medicare benefit. We 
continue to have the same concerns. Mr. Mansfield also stated that the 
proposal could have significant effects on other public and private 
health care programs by jeopardizing the current discount prices VA 
receives on pharmaceuticals. That concern also remains. Additionally, 
enactment of this measure could encourage situations where a veteran is 
receiving care and prescriptions from VA, and from outside sources, 
yielding increased costs, increased confusion, and decreased patient 
safety. Accordingly, I again must say that we cannot support this bill.

                                 S. 716

    I next turn to S. 716, which deals with VA's outreach to veterans 
returning from Operation Enduring Freedom and Operation Iraqi Freedom 
(OEF/OIF) regarding services they can receive from VA's Readjustment 
Counseling Program and other VA mental health programs. The bill would 
specify that VA may provide bereavement counseling to the families of 
those who die in active military service. We fully support the intent 
of S. 716, and in fact are currently carrying out most of its 
requirements. That being the case, enactment of the bill is 
unnecessary.
    Specifically, S. 716 would require that VA employ 50 new 
individuals, all of whom must be veterans of either Operation Enduring 
Freedom or Operation Iraqi Freedom, to provide outreach to other 
veterans when they return from service in those operations. As we have 
previously advised the committee, last year VA employed and trained an 
additional 50 veterans from the ranks of those recently separated from 
OEF/OIF to work in Vet Centers providing outreach, and we have 
committed to hiring an additional 50 veterans this year. The 50 persons 
hired last year were all given career-conditional appointments. That 
means that these veterans can expect to retain their employment. This 
bill further provides that any limitation on the duration of employment 
for these employees is terminated, and it would require that the 
additional 50 appointments that we make this year also receive career-
conditional appointments. The latter provision is imprudent.
    We do not intend to terminate any of the positions in question, but 
at the same time we do not expect that the conflicts in Central Asia 
will continue indefinitely. We hope the day will come when we will no 
longer have to undertake the outreach contemplated by this bill. If the 
need for these positions ends at some point in the future, the 
employees would likely move into other positions in VA, or be 
eliminated by attrition. However, to permit wise and efficient 
stewardship of the Department, we urge amendment of this legislation so 
as not to restrict the nature and duration of the appointments we make.
    S. 716 would also more explicitly provide that VA has authority to 
provide bereavement counseling for the families of deceased active duty 
servicepersons, including parents, and that VA can provide the 
counseling in Vet Centers. In August 2003, former Secretary Principi 
directed that Vet Centers develop a program to provide such bereavement 
counseling, and we are now actively providing that service. In the 
operation of that program, we have permitted counseling various members 
of the family, including the parents of the deceased. Since the 
inception of the program, the families of over 365 servicepersons who 
have died on active duty have been referred to the Vet Centers for 
counseling assistance, and the Centers have provided services to over 
555 family members. The average number of counseling sessions provided 
to each family member has been six. Program clinical experience has 
been that most families need a supportive therapeutic environment to 
assist them in processing the immediate stages of grief and to 
stabilize their situation sufficient to mobilize their own coping 
resources.
    Finally, S. 716 would authorize $180 million to be appropriated for 
the provision of readjustment counseling and related mental health 
services through Vet Centers. In the current fiscal year, VHA allocated 
a total of $94 million for all Readjustment Counseling Service 
activities. We estimate that the additional services that this bill 
would direct, and that we are in fact already implementing, will 
require only about $8 million. There is no necessity or justification 
for nearly doubling the amount we spend on Readjustment Counseling 
Service.
    Mr. Chairman, the agenda for today's hearing also includes three 
additional draft bills identified as the ``Mental Health Capacity 
Enhancement Act of 2005,'' the ``Neighbor Islands Veterans Health Care 
Improvements Act,'' and the ``Sheltering All Veterans Everywhere Act.'' 
Because we received copies of these draft bills only very recently, we 
do not have cleared positions on the measures. We will provide written 
comments on those bills for the record.
    Mr. Chairman, this completes my prepared statement. I would be 
happy to answer any questions you may have.

    Chairman Craig. Mr. Secretary, thank you for those opening 
comments and we will have a series of questions to address some 
of these legislative issues.
    You mentioned, Jim, the importance of changing the law to 
ensure that veterans who use community facilities for emergency 
care are treated the same financially as those who use the VA 
center. Is VA confident that the criteria you will use to 
define an emergency will be fair enough to ensure veterans are 
not unreasonably denied coverage, but tight enough to ensure 
that we do not begin providing all primary care in emergency 
room settings? It is a fine line.
    Secretary Nicholson. That is a very good question, Mr. 
Chairman. First, let me say that the spirit of this is to cover 
that situation which is occurring in increasing numbers where a 
veteran has become so accustomed to service in a VA hospital, 
and he may even have insurance or other benefits, but 
experiences an emergency condition and is insistent that he go 
to a VA hospital for treatment, either because of the comfort 
level, and/or because of his fear that this is going to be too 
expensive if he goes to a nearby private hospital. We are 
seeing an increasing number of situations like that, so this 
would cover that and give them the confidence that they can go 
to that nearest hospital and get the most immediate emergent 
care and it would not be a cost burden on them.
    Your question is a good one: Would they take advantage of 
this and would that become the way that they start going for 
normal emergency room care. And the answer to that is that 
there is a standard in medicine which is called the reasonable 
review criteria and a veteran would have to have a serious 
condition, the most prevalent of which would be chest pains, 
indicating serious possibilities. He could not go there for a 
flu shot, he could not go there for a cold. It would not cover 
that. That would not fulfill that reasonable review criteria 
that they apply to this.
    Chairman Craig. I know that we will be concerned about 
that, that it would be, as I have said, good enough to work and 
yet not so good that that becomes the primary care approach for 
our veterans. Choices will need to be made in this instance.
    Obviously, with the introduction of my legislation, 1182, 
and concern about long-term care, already some of my colleagues 
have spoken to that and it does remove the capacity requirement 
for long-term care beds. I, for one, believe we should work 
toward establishing a program of long-term care services, not 
just a bed count. I said in my opening comments, I used the 
phrase focusing on choices and options instead of buildings and 
concrete. We, and certainly the Veterans Administration, over 
the years have gotten involved in building an awful lot of 
buildings. Therefore, then the political base to support them 
comes up, even though some of them might be half full and not 
serving the purpose that they did 20 or 30 or 40 years ago. We 
get bound up in that.
    So I guess my concern and my question is: Does VA share the 
basic belief reflected in 1182? And if so, and I think you have 
made some comment on that, can you share with the committee 
some of the thoughts and considerations of what should be 
included in such a program if, obviously, our approach is 
toward long-term care but we are not going to put hundreds of 
millions of dollars into beds and facilities?
    Secretary Nicholson. Again, I think a very good question, 
an important one, because I think the answer is that this 
should be determined not by some mechanistic set number but by 
the need and by the imperative that we provide the right care 
at the right place. The standard I think now in long-term care 
is for it to be as least restrictive as possible, and yet for 
it to be adequate, and to have people be as close as they can 
to their regular habitat, their family, their friends, their 
community. To the extent that we can facilitate that, and that 
ability is growing, the new tools that we have for telemedicine 
and communication, and there are clinic programs so that the 
need, at least some objective number to fill beds we do not 
think is appropriate.
    Chairman Craig. Thank you very much. Let me turn to my 
colleague, Ranking Member Senator Akaka.
    Danny.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Secretary Nicholson, Senators Salazar, Murray and 
Rockefeller and I have new mental health legislation. In 
fairness, I know that you did not receive this legislation with 
much advance time, and I think VA would be most concerned with 
the provision to adjust capacity requirements for inflation and 
I mentioned that in my statement. The goal is to use current 
year dollars rather than 1996 dollars for determining if VA is 
meeting its specialized care requirements.
    Mr. Secretary, what is your view of this?
    Secretary Nicholson. Yes, Senator, I would say that we 
would like to have more time to analyze this and to think about 
it. We have stepped up our program on mental health in our 
request for next fiscal year an additional $100 million 
requested for this. We screen every veteran at enrollment for 
PTSD. We screen every veteran at their annual physical for 
PTSD. Our clinics are providing screening and referral 
services. We have over 850 of them, plus over 200 vet centers. 
So there is a lot being done.
    It is a concern. It is a priority of ours, because as we 
have heard already this morning about the anticipation of this 
being problematic from those returning from Operations Iraqi 
and Enduring Freedom. I was over there myself a few weeks ago 
with the Chairman and some other Members of Congress talking to 
troops and commanders, and there is an anticipation that we 
need to get on top of this and intercept it early and treat it 
early because that is the best way to deal with it.
    Senator Akaka. Undersecretary Dr. Perlin, back at your 
confirmation hearing I asked you where the mental health 
strategic plan was and you indicated it was forthcoming at that 
time. This is a critical document. As I understand it, it sets 
forth an agenda for mental health which has been lacking up to 
this point. Given the growing and even burgeoning demand for 
mental health, we need this plan. If it is being held up at 
OMB, I certainly would like to know about that.
    Dr. Perlin, when will we be receiving that report?
    Dr. Perlin. Senator, thank you very much for your 
endorsement of the mental health strategic plan. I am very 
proud of this plan that takes its roots from the President's 
new Freedom Commission on Mental Health, which seeks a new 
vision which looks not to maintenance of patients with mental 
illness but to restoration of function and recovery. It is a 
very bold plan and I am proud to tell you that that plan can be 
shared now. We will make sure that you have a copy of that 
plan.
    The plan is being used in the system as a working document, 
and with Secretary Nicholson's encouragement, the additional 
$100 million in the budget for 2005, another $100 million in 
2006 are focusing on the high priority areas you and Chairman 
Craig and others on this committee have mentioned: PTSD, 
outreach to OIF and OEF veterans. My own personal focus is on 
increasing access to specialty mental health care services, 
increasing access to substance use treatment, and increasing 
access for community health services for individuals with 
serious mental illness like schizophrenia, psychosis, with a 
program we call mental health intensive case management which 
is known as assertive case management in the community.
    So we will get you that this afternoon.
    Senator Akaka. Thank you very much.
    Mr. Chairman, I have other questions but my time is almost 
up.
    Chairman Craig. We will return for a second round.
    Senator Salazar.
    Senator Salazar. Thank you very much.
    Secretary Nicholson, I would like your reaction to the 
legislation that I introduced in three bills that I talked 
about 1189, 1190, and 1191. Let us take them one at a time. 
One, the rural VSO assistance for vet rides. A simple bill. 
Basically, it would provide grant money to VSOs to help 
especially in the transportation of vets who live far away from 
where they can receive their medical care. I have seen it 
happen firsthand in our native State of Colorado up in the 
northwestern part of the State. I would hope that you would be 
able to support this legislation.
    Secretary Nicholson. Senator Salazar, I appreciate the 
spirit behind the legislation and, again, we have not had 
enough time with this so we do not have a final cleared 
position on this, but I want you to know that there is a great 
deal of this going on and there has been for a long time. The 
VSO community has been providing this. The Disabled American 
Veterans in particular, with the assistance of Ford Motor which 
provided vans, provide literally hundreds of thousands of trips 
for veterans to go for medical care in this country every year. 
It is being done by people who are volunteers. They have the 
compassion and the feeling for what they are doing. There may 
be exceptions out there, but in general our read on it is that 
it is working pretty darn well and that we do not need Federal 
Government intervention of money into that relationship.
    Senator Salazar. Let me just say, I would appreciate 
getting a formal response from you on this, but I will tell you 
that I think what the VSO organizations do out there, Secretary 
Nicholson, is a wonderful, compassionate work on behalf of our 
veterans and I certainly applaud everything that they do. But I 
can tell you when I talk to Jim Stanko up in Steamboat, 
Colorado and he tells me about their efforts in terms of trying 
to serve that whole northwestern part of Colorado and taking 
the vets down into Grand Junction, that it would be helpful if 
they did have some financial assistance. I know that there are 
many things that we will do and that you are currently doing 
with the non-profit community and with the private sector to 
bring assistance to them, but I think just a little bit of 
money here can go a long way. This is not asking for a lot, but 
I think these kinds of grants can help incentivize the good 
work that is already going on and even make it better. So I 
would appreciate it if you would keep an open mind and 
hopefully support the legislation.
    Let me quickly, speak on 1189 on long-term care. When Dr. 
Perlin and I had this conversation here a month or so ago we 
talked about the creation of this long-term strategic plan. The 
legislation I have introduced, 1189, will simply put a deadline 
in place when we would have that plan put together 6 months 
out, 180 days out. I think for all of us who have worked in 
many different kinds of processes and different kinds of 
situations, there is nothing like a deadline to get to the 
result. So I would also appreciate it if this is something that 
you would support.
    Secretary Nicholson. Again, Senator, because of the time 
constraints, we have not fully completed our review of it or 
our analysis so we do not have a position. We do appreciate the 
spirit of it. We are now gathering actuarial data. We have some 
new tools with which to do that that we have not had in the 
past. And we have an ongoing CARES process, the 18 locations 
are still being studied, and we will plan to synergize this new 
actuarial data with what we learn in those 18 cases and 
certainly plan to come back to you with that.
    Senator Salazar. I would appreciate it. I think at the end 
of the day there are constraints that we will all face that we 
may not be able to get to our ideals because of fiscal 
constraints. But I think having that kind of long-term plan 
that gives us the cost-benefit analysis of the different 
options would be helpful to us as we struggle with the issue of 
long-term care with respect to our veterans.
    I know my time is up but there was another piece of 
legislation that we----
    Chairman Craig. Why don't you complete so that we will have 
your three pieces?
    Senator Salazar. Thank you very much, Senator Craig.
    That is the legislation numbered 1190 with respect to 
blinded vets. I called it the Blinded Veterans Continuum of 
Care Act of 2005. It essentially would put in an additional 
effort for us to address the major problems that our blinded 
vets face here in our Nation. I know you have not had an 
opportunity yet to review that legislation but I also think 
that it is a very important piece of legislation that would 
address the very specific and very difficult challenges that 
are faced by our over 100,000 blinded veterans in our Nation.
    Secretary Nicholson. Again, I appreciate your concern about 
blind veterans. It is certainly shared. We are analyzing your 
legislation. I do want you to know that we have, in 99 of our 
medical centers, a visual impairment team right now. We are 
incentivizing some of our other facilities to do outpatient 
blind rehabilitation care, which is a change. For some more 
reason the incentive ran the other way, which was to admit 
them, make them an inpatient. That cut down capacity because it 
was limited by beds. That is not necessary that we are changing 
that to incentivize seeing them as outpatients. We also are 
recruiting some additional blind rehabilitative specialists. 
This is a very narrow specialty, and that will, I think, result 
in us having enhanced ability in the relatively few places that 
we do not yet have it.
    So we are doing quite a lot there. We will respond to you 
in a more specific way with respect to your legislation. We, 
generally I would say, Senator Salazar, think that it might be 
overly specific. We do not think we need that specificity. But 
we share the principle.
    Senator Salazar. I would appreciate your taking a 
thoughtful look and having an open mind. I do know that where 
we have these programs for blinded vets within the system they 
are working very well. My own sense is that this bill would 
help us do an even better job and I would very much appreciate 
you taking a look at it. Again I am going to ask you for your 
support.
    Chairman Craig. Ken, thank you very much.
    Let me state again for the record the administration has 
not yet been prepared to give full testimony on some of these 
for purposes of OMB clearance and all of that. I wanted to 
accelerate the process, and that is why these items are on the 
agenda today. I do not think it should be viewed as somebody 
did not do their homework. That is not the case at all here, 
whether it is on our side of the issue or the administration's 
side of the issue. I wanted to get these pieces of legislation 
active in the process.
    We will have another hearing in 2 weeks on the balance of 
the legislative package of members that brought it before us, 
and that will be a similar environment at that time for that 
purpose, to make all of this active for consideration, and/or 
for combination as we do markup and other pieces, move forward. 
As we know, sometimes they may not be stand-alones. We might be 
able to effectively combine pieces to share in, so I think it 
was important to say that for the record of the committee.
    Senator Murray.
    Senator Murray. Thank you very much, Mr. Chairman.
    As I said in my opening statement, I represent thousands of 
returning guardsmen from Iraq and Afghanistan in my State, and 
I am very concerned about the fact that we do not have current 
mental health capability to serve our current veterans, let 
alone these men and women who are returning. As you just said, 
you have been over there, you know that there is going to be a 
high rate of need for help with those men and women who are 
returning for mental health, PTSD. Both Chairman Craig's and 
Senator Akaka's bills expand mental health resources, and in 
your testimony you mentioned Chairman Craig's mental health 
provisions as extremely beneficial.
    Given your support of those provisions, do you believe that 
there are other efforts that should be pursued to increase 
mental health access for our veterans, especially those who are 
just coming back now from Iraq and Afghanistan?
    Secretary Nicholson. We are continually looking at that, 
trying to assess it and make sure that we have what we need 
because of the priorities, and also because what we have 
learned about this in the Vietnam experience particularly in 
that there seems to be a latent period for many of these----
    Senator Murray. I think particularly for guardsmen and 
women because they come home, they just want to get out. They 
answer the questions and go out to their communities far away 
from a regular military facility, and that is when they start 
having problems and do not have access.
    Secretary Nicholson. Well, we are trying to mitigate that 
with an outreach effort that we have going. We have teams going 
to the points of deployment, that is, deployment back, in 
mobilization I guess I should say, and we actually have people 
in Germany. We have these seamless transition teams that also 
have members of the military on them. This was one of the 
things that we talked about in Iraq, was using the chain of 
command more to make sure that the young trooper down in the 
squads knew and was listening, because they get pretty focused 
on going home and getting back, that they are eligible for 
certain VA benefits, and inform them as to how they can access 
them. So we are making very robust efforts to inform them.
    Senator Murray. Is there anything we can do as part of any 
of these initiatives to help prevent veterans with PTSD from 
stopping to seek care?
    Secretary Nicholson. To help them do what?
    Senator Murray. The veterans who stop seeking care, is 
there anything we can do? Because many of them choose not to 
continue to get care, and then develop larger problems later.
    Secretary Nicholson. I think that is a really good 
question, and it has broader implications in my opinion than 
maybe even you intend, because of the benefit side of the VA as 
well, because people who end up being permanently impaired from 
a mental condition, just like a physical condition, are 
entitled to benefits and compensation. What we are looking at 
is to make sure that these individuals do go to therapy, and 
will subject themselves. We have not implemented this, I do not 
want it to sound like it is a done thing, but it is something 
we are looking at, so that they go to rehabilitation therapy 
and they get into a program before we make a final adjudication 
of their final condition. So their incentive is there, and I 
think that is going to help.
    Senator Murray. Interesting, OK.
    As I mentioned earlier, few of these programs will become a 
reality without adequate funding for veterans funding. And we 
know that when adjusted for inflation the VA is spending 25 
percent less per patient than it did in fiscal year 2000. 
Veterans are having to wait 3 years for surgery today. In my 
home State at the American Lake Facility, you can only get an 
appointment if you are 50 percent or more service connected 
disability, and in Puget Sound, as of January, there was an $11 
million deficit that is forcing a lot of our VA hospitals not 
to fill some vacant positions. Every indication is that we do 
not have enough funding for our current services.
    It is just not right and it is not what the veterans are 
promised. As you know, I am very concerned about it. We are now 
talking about adding some new programs, programs I strongly 
support, but I am unsure that they will ever get off the ground 
if we do not have adequate funding for them.
    So I would just like to ask you, Mr. Secretary, if we were 
to pass some or all of today's bills into law, would you 
request additional funding to make Chairman Craig's mental 
health problems--provisions and other provisions a reality?
    [Laughter.]
    Senator Murray. What did I say?
    Chairman Craig. My mental health problems.
    [Laughter.]
    Senator Murray. No. He is from Idaho, my next door neighbor 
State. I apologize.
    Chairman Craig. It is not unusual. I have been accused. 
Please proceed.
    Senator Murray. His mental health provisions in his bill. 
Thank you.
    Secretary Nicholson. We do not think it will cost much to 
fix Chairman Craig.
    [Laughter.]
    Secretary Nicholson. When I took this job, you know, the 
President's charge to me was to take care of our veterans, so 
my answer to that is that when and if I am convinced that we do 
not have what we need to fulfill our mission, I will be part of 
requesting more resources to do that.
    Senator Murray. Specifically, if I were to introduce an 
amendment in the Military Construction and Veteran Affairs 
Subcommittee to increase funding for VA's mental health 
programs that are included in today's bills, would you support 
those?
    Secretary Nicholson. I could not answer that right now, 
Senator. I would have to have a lot more information about your 
bill and how it would fit with what we are doing. As we have 
said, we have an additional 100 million in this budget for 2006 
for mental health and that goes on top of--Dr. Perlin, we are 
spending on mental health specifically, what?
    Dr. Perlin. Yes, Mr. Secretary. For patients with 
definition of mental illness as statutorily defined, it is $2.2 
billion. When you look at all expenses for just mental health 
it is in excess of $3 billion. When you look at all health care 
for patients with mental illness, it is in excess of $10 
billion. And the 2005 budget, as the Secretary has indicated, 
will increase by 100 and in 2006 again by 100 million.
    Senator Murray. Let me ask you. The House Military Quality 
of Life and VA passed onto the House floor 2 weeks ago, and it 
set aside 2.2 billion for specialty mental health care. Do you 
support that level of funding?
    Secretary Nicholson. What we think we have at an adequate 
level right now is what we have submitted in the 2006 budget, 
which is that increase of 100 billion.
    Senator Murray. It is hard to understand. If we are to pass 
Chairman Craig's bill, I assume you realize that we will need 
increased funding, correct?
    Secretary Nicholson. No, I am not sure. I am not sure of 
that.
    Senator Murray. I find it difficult to understand how we 
increase services. We already are behind how we pay for that.
    So I hope that, Mr. Chairman, as part of our discussion, we 
talk about how we are going to pay for the increased services. 
We have more people returning from Iraq and Afghanistan. They 
are going to need these services. We cannot just expect the 
already long lines to incorporate all these people into them 
and not have a real challenge out there, and I think we have to 
discuss the funding of this.
    Chairman Craig. Senator Murray, I appreciate that line of 
questioning, and I think that if 1182 become law, you and I and 
Secretary Nicholson are going to sit down and spread it out and 
look at it and see how it gets implemented, plain and simple. 
And if it cannot be implemented at current resources, then we 
will look for new ones, because I think we all show--I think 
our sensitivity to this issue is real and important, and we 
will move it forward.
    Senator Murray. I just do not want promises out there that 
we are not keeping when we do not fund them.
    Chairman Craig. I hear you. Thank you.
    Senator Thune has left us. Let me ask a couple more 
questions of this panel before we move to our next panel.
    I recently had the opportunity, Mr. Secretary, to review in 
more detail S. 614, Senator Specter's Prescription Drug 
Assistance Act. Arlen is not here this morning to speak for 
himself or the legislation, but I understand that VA was 
opposed to this legislation last year and is again this year, 
basically on the grounds that we do not know how such a program 
would interact with other prescription drug programs. However, 
I would like to begin to study exactly how those interactions 
might take place and see whether it might not be an interesting 
approach to managing some of our outpatient population.
    I guess my question of the Department is, is the Department 
willing to spend a little more time and effort this year to 
analyze a drug-only benefit and how it might work with the new 
Medicare drug program or private prescription drug coverage, 
how all of those might interact in this particular case?
    Secretary Nicholson. Mr. Chairman, as you know, this has 
been looked at before, and our view is that this will not do 
what I think is a well-intentioned goal. There are several 
parts to it. Number 1, it would not be cost neutral, and it 
would end up becoming cost prohibitive to patients if it was 
going to be put on a pay as a cost which is also in the 
legislation.
    The reasons are that we have these huge facilities that are 
needed to support issuing pharmaceutical prescriptions. They 
are called CMOPs, Consolidate Mail of Pharmaceuticals, huge 
facilities. I think we have six of them throughout the United 
States. I visited one in Chicago recently. They are very 
expensive capital items. This would need tremendous IT support. 
There would be many more pharmacists needed, labor intensive, 
and probably most nettlesome is the fact that we would have to 
have a much broader inventory of pharmaceuticals on hand 
because the formulary that the VA follows in the tests that 
have been done of this, have not been followed by the 
prescribing physicians. So that when the veteran comes with his 
prescription, in many cases, a high incidence, cannot fill it 
because we do not use those kinds of drugs. We have generally 
similar but not the same in our formulary. Because we have a 
set formulary we have been able to buy pharmaceuticals at a 
very attractive price, deeply discounted, and that is in large 
measure because of this fixed formulary. In fact, I was just 
looking at a number I had here on a note, that in that pilot 
program, 47 percent of those prescriptions did not follow our 
formulary.
    This also, we think, could threaten this VA's favored 
pricing structure that we now have. Another problem that we 
have--and Dr. Perlin could speak to this better than I--but the 
VA likes to think of itself as providing comprehensive health 
care to its patients, and in a holistic approach, so that if a 
person has problems, we want to know about it, we have the 
electronic health record that is imputed into and available all 
over the world literally, so a doc that is seeing one of these 
veterans wherever he or she is, can see what is going on and 
then they can prescribe. Where if we got into becoming just an 
issuer of pharmaceuticals we would lose that comprehensive care 
that we have with our patients.
    So on balance, we think it is problematic.
    Chairman Craig. Well, we will leave the question at that.
    Let me turn to Senator Akaka for any additional questions 
he may have.
    Senator Akaka. Thank you, Mr. Chairman.
    Mr. Secretary and Dr. Perlin, I direct this question to 
both of you. I recently introduced legislation regarding health 
care access issues in Hawaii. While I understand that, again, 
you had not had enough time to officially comment on the 
substance of this bill, I would like to know why on a more 
general level the clinics in my State are not in compliance 
with the Millennium Bill requirements that relate to non-
institutional long-term care such as home care. We have very 
few nursing home beds in my State. Nearly all of the veterans 
in those beds are highly service-connected, so the relief you 
are seeking by way of the chairman's bill would not free up 
resources for home care. Can you please address this question, 
Mr. Secretary and Dr. Perlin?
    Secretary Nicholson. Yes, sir. Thank you, Senator. I am 
going to ask Dr. Perlin to respond to this. He has some 
specific objective numbers about the situation in your State in 
the various locations.
    Dr. Perlin. Thank you, Senator Akaka for the question. I 
want to get back with you with a full report on the numbers, 
but I have that interest in making sure that veterans of Hawaii 
get the appropriate care. Understand in terms of long-term 
care, that we have 60 beds at the center for aging on Oahu, 
which serves veterans throughout the system and is actually, to 
the best of my understanding, operation within the provisions 
of the Millennium Act.
    Senator Akaka. I think you understand the problem that we 
are looking at.
    Mr. Secretary, in your statement you indicated that at the 
end of the 2-year period afforded to combat veterans for easy 
access, a veteran could continue receiving VA care, but would 
be placed on the appropriate priority group. That was your 
statement. Does this not imply that in fact a veteran who had 
been receiving care for those 2 years could effectively be out 
of the system if they did not have an adjudicated service 
connected disability and they had modest income?
    Secretary Nicholson. Yes. Senator Akaka, we have looked at 
that. We would like to have more time to do that. We understand 
the spirit of your legislation and its intent. Let me make a 
few points about it.
    No. 1, any veteran, any reserve component, active duty 
person that is in the theater who comes back is eligible for 
full VA medical access for 2 years without being charged the 
medical care co-payment. If they have any service connected 
impairment, their care will continue right on, indefinitely, as 
you know, for life. And once they are enrolled they become a 
Category 6, and at that point they receive cost free care for 
any disorder attributable to that combat theater experience.
    If the 2 years is up and they are in an ongoing treatment, 
that will continue indefinitely. And then they all, after 2 
years, may continue to receive VA care as enrolled veterans. So 
in short then, we really right now, subject to thinking about 
this some more, do not see a need for this legislation.
    Senator Akaka. First, I want to commend Senator Salazar for 
his long-term care legislation. Along those lines, Secretary 
Nicholson, I am curious as to how VA arrived at the conclusion 
that the institutional long-term care bed census requirement 
should be eliminated when we have yet to see the long-term care 
strategic plan. Do we need to know how many beds are necessary 
before we start to eliminate beds?
    Secretary Nicholson. That is a fair question, Senator 
Akaka, and we had some discussion about this earlier. We think 
the guiding principle here should be the need, not some 
objective number, but what do we need? And we are working on 
that. We are studying 18 more locations in the CARES process 
right now, and we have some new actuarial tools that are going 
to help us make long-term care projections, that we are 
synergizing into the results of that second round of CARES 
study.
    But to the point, to the principle, we are trying to 
redirect long-term health care so that the beneficiaries, the 
patients can get it either in their home or closer to where 
they live or have lived, nearer their family, their friends, 
their church, people they are used to. And that is not new. 
That has been an ongoing process which has driven down the 
number of bed occupancy in our long-term facilities, and it is 
working very well, using also the new opportunities of 
telemedicine. So when we get this new CARES round 2 finished, I 
think we will be in a good position to make some projections.
    Meanwhile, we do not think we should be bound to some 
number that has been derived because it is mechanical, it does 
not relate really to what is going on.
    Dr. Perlin, do you have anything you would like to expand 
on that?
    Dr. Perlin. Thank you, Mr. Secretary. That has been our 
experience. As we have been able to deploy more home-based care 
and community care, we have actually found that we move 
patients to those sorts of environments. In fact, in our VA 
nursing home beds, we are actually artificially elevating the 
population, the census, by holding network directors 
accountable for maintaining patients to a certain number. We 
believe that the patients should go to the long-term care 
institutional or non-institutional depending on need not roll, 
and in fact, our VA care, we want to make sure it is always 
there for the very aggressive rehabilitation after 
hospitalization for those individuals who have special needs 
like spinal cord injury or mental illness, or are on a 
ventilator. So that our beds become a very special set of beds 
for those individuals which require staffing at a level and 
with the skills that simply would not be available in 
community.
    It is the addition though that because patients with family 
members around want to be in communities--even when I say to a 
patient that I may have, ``You know, we have a beautiful 
nursing home here in Washington,'' or when I used to see 
patients in Richmond, they say, ``Well, we live 45 miles away, 
80 miles away, and really do not want dad, mom, brother, 
sister, whomever, or parent, at a facility that is very 
distant.''
    So we actually know now that there we are actually 
requiring veterans to be in those beds simply to meet a 
legislative mandate, not because of need.
    Senator Akaka. Thank you very much for your responses.
    Mr. Chairman, thank you.
    Chairman Craig. Senator Akaka, thank you very much.
    Mr. Secretary, Dr. Perlin, we again thank you all very much 
for your testimony this morning. We will look forward to your 
additional comments as it relates to this other legislation, 
and that will become a part of our record. So again, thank you 
very much for your presence.
    Secretary Nicholson. Thank you, Mr. Chairman, Senator 
Akaka.
    Chairman Craig. I look forward to our continuing work.
    Now we will ask our second panel to come forward, please.
    [Pause.]
    Chairman Craig. If we could ask our second panel to get 
seated and the room to be cleared so we can proceed, please, 
cleared of those who are leaving or planning to leave.
    Let me welcome the second panel of veterans service 
organizations, and introduce them. We are pleased that Donald 
Mooney, Assistant Director of Veterans Affairs and 
Rehabilitation for the American Legion is with us; Dennis M. 
Cullinan, Director, National Legislative Service, Veterans of 
Foreign Wars; Adrian Atizado, Assistant National Legislative 
Director, Disabled American Veterans; Carl Blake, Associate 
National Legislative Director, Paralyzed Veterans of America; 
and Richard Jones, National Legislative Director for AMVETS.
    Donald, we will ask you to proceed, please.

   STATEMENT OF DONALD MOONEY, ASSISTANT DIRECTOR, VETERANS 
        AFFAIRS AND REHABILITATION, THE AMERICAN LEGION

    Mr. Mooney. Thank you, Chairman Craig, Senator Salazar. The 
American Legion appreciates this opportunity to express our 
views on the many important bills being considered today by the 
committee. We also appreciate the ability to supplement the 
written record with our views because of the late arrival of 
some of the draft legislation to our offices.
    Chairman Craig. Yes. To all of you, that will stand as it 
did for the first panel. The record will remain open so that we 
can get an inclusive amount of testimony on these pieces. Thank 
you.
    Mr. Mooney. Thank you, sir. On the first bill we are 
commenting on today, is the Veterans Health Care Improvements 
Act of 2005. The Millennium Health Care Act of 1997 required VA 
to maintain its in-house nursing home bed inventory at the 1998 
level. However, this capacity has significantly eroded, rather 
than been maintained. The President's budget request projected 
only 9,975 beds in fiscal year 2006, a 27 percent decrease from 
the Mill Bill mandate. This language was rejected in the House 
Military Quality of Life and Veterans Affairs Appropriations 
bill. Simply put, VA does not know what its future long-term 
capacity will need to be. The American Legion supports Senator 
Salazar's bill to accomplish this within 6 months.
    In the meanwhile, it continues to be the position of the 
American Legion that VA should comply with the intent of 
Congress to maintain the minimum long-term nursing home 
capacity for those disabled veterans who are in the most 
intense resource groups, clinically complex, special care, 
extensive care and special rehabilitation case mix groups, at 
least until a study of VA future requirements is completed.
    The Nation has a special obligation to these veterans. The 
American Legion opposes this provision of Section 2. This 
section also exempts former prisoners of war for co-payments 
for extended care services for non-service connected 
disabilities. Veterans who have suffered hardships, 
deprivations and the indignities of captivity by an enemy 
government should receive the best care that we have to offer 
at no cost. They have already bought and paid for it. The 
American Legion is pleased to support this provision.
    The Veterans Prescription Drugs Assistance Act of 2005, S. 
614, requires VA to fill prescriptions for any condition where 
a Medicare eligible veteran makes an annual, irrevocable, 
renewable election to get his or her medications from VA. The 
bill takes care to make sure that the new benefit is cost 
neutral to VA by allowing VA to establish new schedules of 
annual enrollment fees, co-payments, and allowing VA to charge 
the full cost of medication to the veterans.
    The American Legion believes that while well-intentioned, 
this bill has serious problems. First, it requires the Medicare 
eligible veteran to make a decision as to where to get his or 
her medications based on information that is not yet available 
and further complicates already unfathomable extant and pending 
regulation for Federal prescription drug benefits. Unforeseen 
and unintended consequences will be rife. For example, the new 
Medicare Part D drug benefit includes penalties for late 
enrollment. Therefore, should a veteran elect to use VA, and 
then elect to use Medicare Part D, the veteran would end up 
paying a premium for having elected to use VA first.
    Secondly, despite VA's renowned buying power in the 
pharmaceutical markets, manufacturers will react predictably to 
hundreds of thousands of new beneficiaries receiving 
medications with pricing predicated on the Federal supply 
schedule for pharmaceuticals or on VA's negotiated off-schedule 
pricing. If history is any indication, the pharmaceutical 
industry will react negatively to siphoning off of more 
profitable non-FSS-P volume by raising prices to VA.
    Lastly, this bill represents yet another windfall for the 
Centers for Medicare and Medicaid Services, which already 
subsidizes--which VA already subsidizes for the non-service 
connected care of Medicaid eligible veterans to the tune of 
billions of dollars per year.
    I see the light has turned red. Mr. Chairman, this 
concludes my testimony. I will be happy to answer any 
questions. Thank you.
    [The prepared statement of Mr. Mooney follows:]

   Prepared Statement of Donald Mooney, Assistant Director, Veterans 
            Affairs and Rehabilitation, The American Legion

    Mr. Chairman and Members of the Committee:
    The American Legion appreciates this opportunity to express our 
views on the many important bills being considered today by the 
committee. We applaud the committee for holding hearings on these vital 
issues. Due to the late arrival of some of the draft legislation to our 
offices, we are unable to comment on all of them at this time. We 
therefore ask permission of the committee to supplement the written 
record with our views as soon as we have the opportunity.

     S. ----, ``THE VETERANS HEALTH CARE IMPROVEMENTS ACT OF 2005''
              SEC. 2. COPAYMENT EXEMPTION FOR HOSPICE CARE

    This section would exempt veterans receiving end-of-life outpatient 
hospice care from co-payments for those services. The American Legion 
supported legislation in the 108th Congress, which subsequently became 
law, applying to inpatient care. We support the extension of this 
exemption to outpatient care as well as the exemption of co-payments 
for inpatient hospice care.

SEC. 3. NURSING HOME BED LEVELS AND EXEMPTION OF EXTENDED CARE SERVICES 
                CO-PAYMENTS FOR FORMER PRISONERS OF WAR

    The President's fiscal year 2006 VA budget request contains a 
legislative proposal to repeal the provision of the Millennium Act 
requiring VA to maintain its Nursing Home Care Unit (NHCU) bed capacity 
at the 1998 level of 13,391. The language in the budget request refers 
to this mandate as ``a baseline for comparison.'' The Millennium Health 
Care Act requires VA to maintain its in-house bed inventory at the 1998 
level; however, this capacity has significantly eroded rather than been 
maintained. In 1999 there were 12,653 VA NHCU beds, 11,812 in 2000, 
11,672 in 2001 and 11,969 in 2002. VA estimated it had 12,239 beds in 
2003 and 12,245 in 2004. The President's budget request projects only 
9,975 in fiscal year 2006, a 27 percent decrease from the Millennium 
Act mandate. VA claims that it cannot maintain both the mandated bed 
capacity and implement all the non-institutional programs required by 
the Millennium Act.
    According to VA's fiscal year 2002 Annual Accountability Report 
Statistical Appendix, in September 2002, there were 93,071 World War II 
and Korean War era veterans receiving compensation for service-
connected disabilities rated 70 percent or higher. The American Legion 
believes that VA should comply with the intent of Congress to maintain 
a minimum LTC nursing home capacity for those disabled veterans who are 
in the most resource intensive groups; clinically complex, special 
care, extensive care and special rehabilitation case mix groups. The 
Nation has a special obligation to these veterans. They are entitled to 
the best care that VA has to offer and they should not be dumped onto 
Medicaid, as is now the trend. Providing adequate inpatient LTC 
capacity is good policy and good medicine. The American Legion opposes 
this provision of Section 3.
    This section also exempts former prisoners-of-war from co-payments 
for extended care services for non-service-connected disabilities. 
Veterans who have suffered the hardships, deprivations and indignities 
of captivity by an enemy government or other entity should receive the 
best care that we have to offer at no cost. They have already bought 
and paid for it. The American Legion is pleased to support this 
provision of Section 3.

 SEC. 4. AUTHORIZE VA REIMBURSEMENT FOR NON-VA-PROVIDED EMERGENCY CARE

    This section will authorize VA to reimburse emergency medical care 
for which veterans are personally liable; either directly to the 
veteran, to the facility providing the emergency care or to a third 
party that paid for the care. To qualify, the veteran must be enrolled 
in VA healthcare and must have received treatment from VA within 24 
months prior to the emergency care. The veteran must have insurance or 
other third party coverage that pays some of the costs and leaves the 
veteran liable for uncovered costs such as deductibles and co-payments. 
This section is separate from similar statute that provides similar 
coverage to veterans who have no insurance or who needed emergency 
treatment for a service-connected condition, a non-service-connected 
condition aggravating a service-connected one, a totally service-
connected disability or who is enrolled in VA vocational 
rehabilitation.
    The American Legion supports this section; however, we note that it 
does nothing to correct the problems with VA policy on non-VA emergency 
treatment, generally, especially as regards local ambulance 
transportation. This has become an issue of concern to many American 
Legion veterans advocates around the country.
    We relate a case-specific in which a veteran rated 60 percent 
disabled and 100 percent individually unemployable had had bilateral 
knee replacements for his service-connected condition. He ambulates 
with the assistance of braces and a cane. On a visit to the local mall, 
the veteran's knees gave out and he fell forward, injuring his hands, 
elbows and knees. The veteran's wife called the local rescue squad 
because the veteran was in extreme pain. The nearest VA Medical Center 
was in Roseburg, Oregon, 150 miles to the north, so the decision was 
made to transport the veteran to the local hospital for stabilization. 
The VA Outpatient Clinic in White City, 15 miles away, was not staffed 
for emergencies or orthopedic trauma and the veteran was not seen there 
until several days after the incident. The attending at the VAOPC 
confirmed that the veteran's left knee was fractured. The veteran 
requested that VA pay the charges from the local hospital, but VA 
denied on the basis that the injury was not emergent; that is, life-
threatening, and the injury could have been handled within the VA 
system. This, despite the fact that, even if the VAMC was close enough 
to use, it was on ``divert'', meaning it would not receive inbound 
ambulances. The denial of the veteran's claim is currently on appeal.
    The American Legion believes Congress should closely examine the 
criteria under which VA is authorized to reimburse emergency non-VA 
treatment versus how it actually does.

SEC. 5. AUTHORIZE VA, FOR A 14-DAY PERIOD, TO PROVIDE CARE FOR NEWBORN 
   INFANTS OF VETERANS WHO HAVE DELIVERED IN A VA FACILITY (OR AT VA 
                                EXPENSE)

    This section adds 2 weeks of neonatal care of a newborn infant that 
has been delivered to a veteran in a VA medical facility or at VA 
expense. As of March 2005, 1.7 million of the Nation's 24.7 million 
veterans are women. Women now account for 15 percent of active duty 
military personnel and are currently serving in Iraq and Afghanistan 
under identical conditions as male servicemembers. VA now provides a 
full continuum of comprehensive medical services including health 
promotion and disease prevention, primary care, women's gender-specific 
health care; e.g., hormone replacement therapy, breast and 
gynecological care, maternity and limited infertility (excluding in-
vitro fertilization), acute medical/surgical, telephone triage, 
emergency and substance abuse treatment, mental health, domiciliary, 
rehabilitation and long-term care. Given the unknowns of military 
environmental exposures in the current conflicts, Congress is wise to 
extend this care to the newborn children of these veterans. The 
American Legion supports this section.

   SEC. 6. ALLOW PROVIDERS OF CARE TO VIETNAM VETERANS' SPINA BIFIDA 
  CHILDREN AND CHILDREN WITH COVERED BIRTH DEFECTS TO SEEK FROM THIRD 
   PARTY PAYERS PAYMENT FOR THE DIFFERENCE BETWEEN AMOUNT BILLED AND 
                        AMOUNT REIMBURSED BY VA

    VA will provide a Vietnam veteran's child who has been determined 
to suffer from spina bifida and children with covered birth defects 
with such health care as the VA determines is needed by the child for 
spina bifida or covered birth defects. Under 38 C.F.R. 17.901, VA is 
the ``exclusive payer'' for spina bifida services and services related 
to covered birth defects regardless of any third party insurer, 
Medicare, Medicaid, health plan, or any other plan or program providing 
health care coverage. The rates paid by VA for the care of children of 
Vietnam veterans with spina bifida and covered birth defects, in many 
cases, do not cover the amounts billed by non-VA providers, exposing 
the parents to ``balance billing'' for the amounts not reimbursed. This 
legislation would clarify that the ``exclusive payer'' language in 38 
C.F.R. 17.901 does not preclude providers from balance billing third-
party payers and relieves the parents of responsibility for VA 
underpayment by holding harmless the parents of beneficiary children 
from balance billing by providers.
    Caring for a child with spina bifida and/or covered birth defects 
imposes economic and emotional burdens on the parent that may be 
compounded by medical debt incurred as a result of balance billing. The 
American Legion supports this provision.

SEC. 7. AUTHORIZE ON A PERMANENT BASIS GRANTS AND PER DIEM PAYMENTS TO 
PROVIDERS OF SERVICES TO THE HOMELESS, AND INCREASE FROM $99 MILLION TO 
                         $130 MILLION PER YEAR

    Homelessness in America is a travesty, and veterans' homelessness 
is disgraceful. Left unattended and forgotten, these men and women, who 
once proudly wore the uniforms of this Nation's armed forces and 
defended her shores, are now wandering the streets in desperate need of 
medical and psychiatric attention and financial support. While there 
have been great strides in ending veteran homelessness there is much 
more that needs to be done. We must not forget them. The American 
Legion supports funding of the Homeless Veterans Grants and Per Diem 
Program at $133 million.

                  SEC. 8. MARRIAGE AND FAMILY THERAPY

    This section adds Marriage and Family Therapy to the list of 
professionals authorized to practice in VA facilities. A major 
criticism of VA Post-Traumatic Stress Disorder Treatment programs has 
been the exclusion of spouses and children from the recovery process. 
In many cases, the residuals of the veteran's traumatic experiences 
impact the family members of the veteran as severely as the veteran him 
or herself. Education about post-traumatic stress reactions, training 
in coping skills, the use of efficacious therapies such as exposure 
therapy, cognitive restructuring and family counseling are generally 
accepted as methods of care for PTSD. The addition of Marriage and 
Family Therapy to multi-disciplinary treatment in VA will add a needed 
dimension to the holistic treatment model required to successfully help 
the veteran and his loved ones recover from the trauma of war. The 
American Legion supports this provision.

    SEC. 9. AUTHORIZE SENIOR EXECUTIVE SERVICE COMPENSATION TO THE 
                               DIRECTOR, 
                           VA NURSING SERVICE

    The American Legion has no position on this issue.

         SEC. 10. REPEAL OF COST COMPARISON STUDIES PROHIBITION

    The American Legion has no position on this issue.

            SEC. 11. MENTAL HEALTH/PTSD SERVICE IMPROVEMENTS

    In the 2003 report of the Special Commission on Post-Traumatic 
Stress Disorder, released before the invasion of Iraq, it was noted 
that demand for VA PTSD specialized services is growing. Fifty percent 
of all veterans service-connected for PTSD became service-connected 
within the last 5 years and the population served by VA specialized 
PTSD outpatient programs grew by 86 percent between fiscal year 1995 
and fiscal year 2001. The Commission noted that the intensity of 
services provided to veterans service-connected for PTSD actually fell 
by 9.3 percent over the 5 years preceding the report. This decline in 
capacity is illustrated by the fact that of the 205,996 veterans who 
had a VA clinic visit where PTSD was the focus of treatment, only 28 
percent received it in a specialized PTSD program. The other 72 percent 
received treatment in some other setting, including 17 percent who were 
seen in a non-mental health setting. Additionally, of the 128,000 
veterans seen in Vet Centers in fiscal year 2002, only 55 percent were 
receiving services of any kind in a VA medical center. In its 2002 
report, the Commission noted that the average waiting time to enter a 
specialized PTSD inpatient program was 47 days with waits approaching 1 
year in some facilities. The Commission concluded that VA's specialized 
PTSD services are so fully saturated that that they cannot absorb new 
patients (now, Iraq war returnees) without diluting the intensity of 
service provided to each veteran.
    This section directs VA to: (1) Expand the number of clinical 
treatment teams dedicated to Post-Traumatic Stress Disorder (PTSD) in 
VA medical facilities (funded at $5 million in each of fiscal years 
2006 and 2007); (2) expand and improve diagnosis and treatment of 
substance abuse ($50 million); (3) expand and improve tele-health 
services where veterans are remote from VA facilities ($10 million); 
(4) improve education of VA primary care professionals to diagnose and 
treat mental health issues ($1 million); expand the delivery of mental 
health services in VA Community Based Outpatient Clinics ($20 million) 
and; (5) expand and improve Mental Health Intensive Case Management 
Teams for veterans with serious and chronic mental illness ($5 
million).
    These improvements come at a time when VA is experiencing an 
upswing in demand for mental health services by veterans of Operations 
Iraqi Freedom and Enduring Freedom. The American Legion has long 
advocated the reinstatement of mental health and substance abuse 
capacity that was severely curtailed in the 1990's and we support this 
section of this bill. However, we have concerns that by earmarking the 
$95 million the bill would appropriate in fiscal years 2006 and 2007, 
VA will be forced to further ration other programs and services. VA's 
fiscal year 2006 appropriation already falls well short of what VA 
needs to maintain currents levels of service and access. The American 
Legion believes the Congress should authorize additional funding to 
cover the costs of implementing this section.

                   SEC. 12. DATA SHARING IMPROVEMENTS

    This section authorizes the exchange of protected health 
information between VA and the Department of Defense (DoD) on patients 
receiving treatment from VA and any person who may receive treatment 
from VA including ``current and former members'' of the Armed Services. 
This language is vague and seems to propose that VA become the 
repository of all medical records of ``all current and former'' members 
of the Armed Services. This would place an extreme burden on VA and 
require it to take over some of the functions of the National Archives' 
National Personnel Records Center (NPRC) that currently manages the 
service medical and personnel records of millions of former 
servicemembers at its facility in Saint Louis. When VA requires the 
medical records of an individual, usually for compensation and pension 
claims purposes, it requests them from NPRC. For soldiers separated or 
released from active duty after October 1994, their health records 
already go directly to the Department of Veterans Affairs' Record 
Management Center (VA RMC), also in St. Louis. Additionally, VA and DoD 
currently have a number of ongoing information exchange initiatives in 
development in their efforts to meet the Seamless Transition mandates 
of Congress. The American Legion defers comment on this section and 
requests the committee to provide clarification.

      SEC. 13. EXPANSION OF NATIONAL GUARD OUTREACH AND ASSESSMENT

    This section directs VA to collaborate with State National Guard 
officials and expand the total number of VA employees dedicated to 
outreach under the VA's Rehabilitation Counseling Service's Global War 
on Terrorism Outreach Program. The American Legion supports this 
section.
    Many of our servicemembers returning home from duty on Operations 
Iraqi Freedom and Enduring Freedom are not being properly advised of 
the benefits and services available to them from the Department of 
Veterans Affairs and other Federal and State agencies. This is 
especially true of Reserve and National Guard units that are 
demobilized at hometown Reserve Centers and National Guard armories, 
rather than at active duty demobilization centers. To assist in making 
sure that these servicemembers are aware of the services and benefits 
they have earned through their honorable service in the Global War on 
Terrorism, The American Legion has developed a Welcome Home brochure. 
This brochure outlines the basic entitlements and benefits available 
from VA and provides contact phone numbers and Internet web sites from 
which servicemembers may obtain more information. The American Legion 
intends to distribute this document to demobilization centers, Reserve 
Centers, National Guard armories and Transition Assistance Programs 
nationwide.

               SEC. 14. EXPANSION OF TELE-HEALTH SERVICES

    This section directs VA to install tele-medicine technology in a 
larger number of Veterans Readjustment Counseling Services facilities 
(Vet Centers) and to report to Congress its plan to do so in fiscal 
years 2005 through 2007. The American Legion supports this section and 
further believes that Vet Centers in highly rural and isolated areas 
should receive priority for this technology.

               SEC. 15. MENTAL HEALTH DATA SOURCES REPORT

    This section requires VA to submit a report to the Congress on the 
mental health data maintained by VA, including a list of the sources of 
such data, and assessment of the advantages and disadvantages of the 
current data and recommendations for improving the collection, use and 
location of such data. The American Legion has no position on this 
issue.

    S. ----, ``THE BLINDED VETERANS CONTINUITY OF CARE ACT OF 2005''

    In this bill, Congress has found that approximately 1,500 veterans 
are on waiting lists for admission to VA blind rehabilitation programs 
nationally and that this situation is due largely to shortages of blind 
rehabilitation specialists in VA facilities. This legislation directs 
VA to establish blind rehabilitation specialist positions at VA 
facilities having 150 or more currently enrolled legally blinded 
veterans and prioritizes implementation by fiscal year starting with VA 
facilities having the highest numbers of blind veterans. The bill 
further appropriates $5 million a year for each of fiscal years 2006 
through 2010 for implementation. The American Legion supports this 
initiative; however, we have concerns that by earmarking the $5 million 
the bill would appropriate in fiscal years 2006 through 2010, VA will 
be forced to further ration other programs and services. VA's fiscal 
year 2006 appropriation already falls well short of what VA needs to 
maintain currents levels of service and access. The American Legion 
believes the Congress should authorize supplementary funding to cover 
the costs of implementing this section.

 S. ----, ``TO REQUIRE THE SECRETARY OF VETERANS AFFAIRS TO PUBLISH A 
      STRATEGIC PLAN FOR LONG-TERM CARE, AND FOR OTHER PURPOSES''

    The American Legion supports this bill, however, due to restraints 
of time the American Legion requests the committee to allow us to 
submit our views as an addendum to the written record.

     S. ----, ``TO ESTABLISH A GRANT PROGRAM TO PROVIDE INNOVATIVE 
      TRANSPORTATION OPTIONS TO VETERANS IN REMOTE RURAL AREAS.''

    The American Legion supports this bill; however, due to restraints 
of time The American Legion requests the committee to allow us to 
submit our views as an addendum to the written record.

          S. ----, ``THE MENTAL HEALTH CAPACITY ACT OF 2005.''

    The American Legion supports this bill; however, due to restraints 
of time The American Legion requests the committee to allow us to 
submit our views as an addendum to the written record.

 S. ----, ``THE NEIGHBORING ISLANDS VETERANS HEALTH CARE IMPROVEMENTS 
                                 ACT.''

    The American Legion has consistently supported the establishment of 
VA facilities to serve veterans in remote and underserved areas. The 
American Legion supports this bill; however, due to restraints of time 
The American Legion requests the committee to allow us to submit our 
views as an addendum to the written record.

 S. 481, ``TO EXTEND COMBAT VETERANS' POST-DISCHARGE 2-YEAR PERIOD OF 
              ELIGIBILITY FOR VA HEALTH CARE TO 5 YEARS''

    The American Legion supports this bill; however, due to restraints 
of time The American Legion requests the committee to allow us to 
submit our views as an addendum to the written record.

   S. 614, ``THE VETERANS PRESCRIPTION DRUGS ASSISTANCE ACT OF 2005''

    This bill mandates VA to provide prescription medications to 
Medicare-eligible veterans who are receiving disability compensation, 
nonservice-connected pension, aid and attendance or are housebound. VA 
must fill prescriptions written by ``a duly licensed physician'' for 
any condition under this legislation. Veterans receiving nonservice-
connected pension who are also receiving aid and attendance may 
continue to receive this benefit even if their incomes exceed maximum 
income limitations by not more than $1,000.00. Under current law, such 
veterans would lose eligibility for any VA care or services once their 
incomes exceed the maximum income limitation.
    This bill also requires VA to fill prescriptions written by ``duly 
licensed physician[s]'' for any condition where the Medicare-eligible 
veteran makes an annual, irrevocable, renewable election to get his or 
her medications from VA. VA is required to provide the veteran making 
the election with information about the benefits, costs and 
consequences prior to permitting the election. The bill takes care to 
make sure that the new benefit is cost-neutral to VA by allowing VA to 
establish new schedules of annual enrollment fees, co-payments and 
allowing VA to charge the full cost of medications to veterans. VA is 
also authorized to provide immunizations to Medicare-eligible veterans, 
provided that the vaccines required are furnished to VA by the 
Department of Health and Human Services at no charge.
    Mr. Chairman, The American Legion believes that while well-
intentioned, this bill has serious problems.
    First, it requires the Medicare-eligible veteran to make a decision 
as to where to get his or her medications based on information that is 
not yet available and it further complicates already unfathomable 
extant and pending regulation and criteria for Federal prescription 
drug benefits. Unforeseen and unintended consequences will be rife; for 
example, the new Medicare Part D drug benefit includes penalties for 
late enrollment, therefore, should a veteran elect to use VA, then 
later elect to use Medicare Part D, the veteran could end up paying a 
premium for having elected to use VA first. If enacted, implementation 
of this benefit should be delayed for several years to allow the entire 
Federal drug benefit landscape to stabilize.
    Second, despite VA's renowned buying-power in pharmaceutical 
markets, it is unclear how manufacturers will react to hundreds of 
thousands of new beneficiaries receiving medications with pricing 
predicated on the Federal Supply Schedule for Pharmaceuticals (FSS-P) 
or VA's negotiated off-schedule pricing. If history is any indication, 
the pharmaceutical industry will react negatively to any siphoning-off 
of more profitable non-FSS-P volume with predictable effects on VA's 
drug costs.
    Last, this bill represents yet another windfall for the Center for 
Medicare and Medicaid Services (CMS), which VA already subsidizes for 
the nonservice-connected care of Medicare-eligible veterans to the tune 
of billions of dollars per year. The requirement that VA recover all 
its costs for filling prescriptions through enrollment fees, new co-
payment schedules and direct cost billing relieves CMS of fiscal 
exposure for this population of beneficiaries and places it on the 
backs of veterans. VA should be authorized to recover incurred costs 
not covered by existing co-payments in this new benefit from CMS.
    The American Legion has consistently opposed enrollment fees for VA 
eligibility, including any prescription-only benefit. We restate that 
position today and express adamant opposition to the introduction of 
new co-payment schedules not already in law. Additionally, The American 
Legion has opposed the filling of prescriptions written by non-VA 
providers. VA Consolidated Mail Outpatient Pharmacies (CMOPs) are 
already running at over-capacity and would require significant 
additional infrastructure to meet the demand imposed by this bill.

           S. 716, ``THE VET CENTER ENHANCEMENT ACT OF 2005''

    The American Legion supports this bill; however, due to restraints 
of time The American Legion requests the committee to allow us to 
submit our views as an addendum to the written record.

        S. ----; ``THE SHELTERING ALL VETERANS EVERYWHERE ACT''

    This bill authorizes funding of the VA Grants and Per Diem Program 
at the full rate for domiciliary care and appropriates $200 million per 
fiscal year for fiscal years 2006 through 2011, expands eligibility for 
veterans at imminent risk of homelessness and appropriates an 
additional $50 million for that purpose for those years expands 
outreach to at-risk veterans, including those separating from active 
duty. It further extends authorization for treatment and rehabilitation 
for seriously mentally ill and homeless veterans and permanently 
reinstates VA authority to transfer properties obtained through 
foreclosure of VA home mortgages wherein VA may sell, donate, lease, or 
lease with option those properties to nonprofit organizations, States 
or localities for use in sheltering homeless veterans. The bill 
reauthorizes $5 million per year for fiscal years 2005 through 2011, 
funds the Homeless Veterans Service Provider Technical Assistance 
program at $1 million for the same period, expands eligibility for 
dental care for homeless veterans, requires an annual report to 
Congress from VA on the status of its assistance to homeless veterans 
and extends the life of the VA Advisory Committee on Homeless Veterans.
    The current Administration has vowed to end the scourge of 
homelessness within 10 years. The clock is running on this commitment, 
yet words far exceed deeds. On any given night in this Nation, there 
are as many as 300,000 homeless veterans with as many as 600,000 
homeless during the year. While less than 9 percent of the Nation's 
population are veterans, 34 percent of the nation's homeless are 
veterans and 75 percent are wartime veterans. This bill is the first 
major proposal in years to fund veterans homelessness programs at 
levels that have a potential to make a real impact and The American 
Legion vigorously supports it. The American Legion has concerns that by 
earmarking the funding required by this bill from existing 
appropriations, VA will be forced to further ration other programs and 
services. VA's fiscal year 2006 appropriation already falls well short 
of what VA needs to maintain currents levels of service and access. The 
American Legion believes Congress should authorize additional funding 
to cover the costs of implementing this forward-thinking legislation.
    Mr. Chairman, this concludes my testimony. I will be happy to 
answer any questions.

    Chairman Craig. Don, thank you very much, and again, your 
full statement will be part of the record and any additional 
comments you wish to make on these individual pieces of 
legislation will also become a part of the record.
    Now let me go to Dennis Cullinan, Director, National 
Legislative Service, Veterans of Foreign Wars.
    Dennis.

STATEMENT OF DENNIS M. CULLINAN, DIRECTOR, NATIONAL LEGISLATIVE 
     SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED STATES

    Mr. Cullinan. Thank you very much, Mr. Chairman, and on 
behalf of the men and women of Veterans of Foreign Wars, I want 
to thank you for inviting us to participate in today's most 
important hearing.
    For the purposes of today's hearing, I am just going to 
extract briefly from our written statement.
    With respect to the Veterans Health Care Act of 2005, 
Section 3, while we support exempting former POWs from co-pays 
for extended care services, we must oppose the provision that 
would eliminate the VA's statutory requirement to maintain 1998 
staffing and service levels of the extended care facilities.
    With respect to Section 5, this section would allow newborn 
children of mothers who have been receiving maternity care to 
receive 14 days of care at VA facilities. We strongly support 
this provision because it closes a loophole and is fair to the 
mother and to the family.
    Currently, no direct health care coverage is provided to 
the children's families, and they must find outside health care 
insurance to help pay for the child's treatment. The 14-day 
window this bill provides allows the parents of the child to 
secure additional health care coverage, whether through a 
private company or through Medicaid, and would ease VA's 
ability to find a local hospital to accommodate the family.
    Next I will address S. 481. The VFW supports Senator 
Akaka's bill that would give separating service members who 
have served in a combat zone an additional 3 years of access to 
the VA health care system. Extending this limit to 5 years give 
these men and women an important safety net, and can also give 
them peace of mind as they return from the stress of combat, 
safe in the knowledge that their health care safety net will be 
there should they need it or should they fall ill as a result 
of their service.
    With respect to S. 716, the Vet Center Enhancement Act, the 
VFW applauds the introduction of this legislation that would 
enhance services provides to vet centers, to clarify and 
improve the provision of bereavement counseling by the 
Department of Veterans Affairs.
    This legislation will allow VA to hire 50 more OIF and OEF 
veterans to help reach out to the newly transitioning veterans 
adjusting back to civilian life. And we must ask who better to 
explain services and help ease their transition than someone 
who has served alongside them, who can relate to their 
experiences, and has already navigated VA's many benefit 
programs. This legislation will also go one step further to 
help surviving family members who have suffered the loss of a 
loved one by clarifying who can use the benefit from vet center 
bereavement counseling services.
    The VFW feels that we have an obligation to help make the 
transitioning period for returning service members and the 
readjustment period for survivors, those killed in battle, as 
smooth and as problem free as possible.
    Thank you, Mr. Chairman. That concludes my statement.
    [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:
    On behalf of the 2.6 million men and women of the Veterans of 
Foreign Wars of the United States and our Auxiliaries, I would like to 
thank you for inviting us to today's hearing on veterans' health care 
legislation.
    With the changes in the Appropriations committee, much of our focus 
to this point has been on the proper of level of funding for the 
Department of Veterans Affairs (VA), especially the amount going toward 
the Veterans Health Administration (VHA).
    But, it is also important to focus on the actual programs receiving 
that funding, how effectively they treat veterans, and whether there 
are any necessary corrections or additions.
    And the bills under consideration today do just that.
            draft bill, the veterans health care act of 2005
    Section 2: VFW supports this provision, which would exempt hospice 
care from services that require co-payments.
    Section 3: While we support exempting former POWs from co-payments 
for extended care services, we must oppose the provision that would 
eliminate VA's statutory requirement to maintain 1998 staffing and 
service levels of extended care facilities.
    Although VA has failed to live up to this target, eliminating this 
provision would get rid of a very important target. VA must live up to 
its obligations, not shirk from them.
    With the Administration's budget proposal, there was much 
discussion about VA's long-term care programs. If changes, such as 
this, are to be made, then VFW feels that there must be a larger 
discussion about the role of VA in long-term care.
    But, for now, our membership strongly supports maintaining the 
current spectrum of VA long-term care services. We cannot support this 
statutory reduction in service.
    Section 4: We agree with this section, which would close the 
loopholes in the reimbursement process for veterans seeking emergency 
care. Too frequently, because of these complex regulations that the 
veteran, or non-VA hospitals, might not be aware of, veterans are 
unnecessarily being charged for their emergency care.
    This problem is especially evident for our rural veterans, who, 
when emergencies occur, cannot take the time to make the trip to VA; 
they must go to the closest hospital.
    VA must ensure that all veterans are treated fairly and that they 
not be unfairly punished or harmed because of their need for emergency 
care.
    Section 5: This section would allow newborn children of mothers who 
have been receiving maternity care to receive 14 days of care at VA 
facilities. We support this provision, because it closes a loophole, 
and is fair to the mother and family.
    Currently, no direct health care coverage is provided to the 
children and families must find outside health insurance to help pay 
for the child's treatment. The 14-day window this bill provides allows 
the parents of the child to secure health care coverage, whether 
through a private company or through Medicaid, and would ease VA's 
ability to find a local hospital to accommodate the family.
    This would give the families an important peace of mind allowing 
them to focus on the joys of becoming parents. It makes a small change 
in the law to do what is right for veterans.
    Section 6: VFW also agrees with this section, which would allow 
health care providers to seek reimbursement for extra expenses not 
covered by VA for treatment of children with spina bifida of certain 
Vietnam veterans.
    This provision is important because of the complex nature of their 
health care problems, and the difficult and frequent treatment these 
children require. Making payment easier will encourage more facilities 
to provide the kinds of treatment these children need by eliminating an 
economic hurdle.
    Improved access to health care is nothing but a good thing for 
these veterans and their families.
    Section 7: While we support the increased grants for homeless 
veterans contained in this section, we feel that the funding level in 
Senator Obama's draft bill, which we discuss later, to be more 
appropriate.
    Section 8: The VFW does not take a position on this section, so 
long as the changes in qualification do not mean impaired access to 
marriage and family counseling. As we are seeing, today's long and 
frequent deployments are creating an increased need for these kinds of 
services.
    Section 9: The VFW has no position on this section.
    Section 10: The VFW takes no position on this provision.
    Section 11: We are pleased with this section, which improves and 
expands VA's ability to provide mental health care services. It 
includes $95 million in funding to improve treatment for PTSD and 
substance abuse problems. It also makes access to health care more 
efficient by pursuing tele-health initiatives, and expanding the number 
of clinical treatment teams.
    With the difficulties of the unique nature of combat our men and 
women are facing, these mental health services will take on an 
increasingly important role. While much of our concern has focused on 
those with physical wounds, just as much effort must be focused on the 
unseen psychological wounds, which can linger and manifest themselves 
in many other problems for years.
    Giving veterans easier access and de-stigmatizing the treatment of 
these issues prevents future difficulties from arising, and helps the 
veteran transition smoothly back into society.
    Section 12: The VFW supports this provision, which would eliminate 
any bureaucratic barriers toward VA-DoD health care sharing, by 
allowing the two departments to fully share any protected health 
information for their patients.
    The seamless transition between these two departments has long been 
a VFW goal. We hope that this provision would lead us one step closer 
toward that goal.
    Section 13: We are pleased to support this section which improves 
outreach to National Guard members to inform them of their benefits and 
rights with VA.
    We have frequently heard that the information they receive upon 
returning is confusing. We hope that expanding this program would 
alleviate some of the confusion surrounding their benefits status, and 
would enable those who need assistance to find a VA program that meets 
their needs.
    Section 14: The VFW would also support this provision, which 
improves health care by increasing the number of Readjustment 
Counseling Centers which can provide tele-health services with VHA 
facilities.
    We believe that expanding veterans' access to health care 
facilities with this simple technology would be beneficial and help 
these veterans get treatment for illnesses and disabilities. Improved 
access means that more veterans can receive care, often with less of a 
burden. That is undoubtedly a good thing.
    Section 15: We have no position on this section.

                                 S. 481

    The VFW supports S. 481, Senator Akaka's bill that would give 
separating servicemembers, who have served in a combat zone, an 
additional 3 years of access to the VA health care system.
    Public Law 105-627 provided Gulf War veterans, as well as those who 
serve in any future combat zones, 2 years of eligibility for VA health 
care. This was part of a larger package of improvements for Persian 
Gulf veterans in response to the health problems many of them faced. 
Given the uncertainty surrounding the health of many of them, and the 
difficulties of diagnosis that many of them faced, they were granted 
continued access to VA health care so that these problems could be 
monitored, or any new symptoms could be treated.
    Unfortunately, because of the prohibition on new category 8 
veterans, many of these veterans will have their access to health care 
completely curtailed. In the past, they could have continued to access 
the system.
    Extending these veterans' eligibility is especially important when 
you factor in the difficulty VA has with disability claims processing, 
and the role that VA disability now has in health care eligibility. 
With disability claims taking many months to process, veterans who may 
ultimately prove to be disabled will slip through the cracks and denied 
their earned health care because of an overly bureaucratic process. 
That is clearly not right, and it does not do what is right for 
America's veterans.
    Extending this limit to 5 years gives these men and women an 
important safety net, and can also give them peace of mind as they 
return from the stresses of combat, safe in the knowledge that their 
health care safety net will be there, should they need it, or should 
they fall ill as a result of that service.

          S. 614 THE VETERANS PRESCRIPTION DRUG ASSISTANCE ACT

    This legislation would permit Medicare-eligible veterans to receive 
an out-patient medication benefit from the VA provided that they forgo 
medical care and services from VA during the year they choose such 
benefit.
    By way of background, the Veterans' Health Care Eligibility Reform 
Act of 1996 provides all veterans enrolled in Categories 1-8 full 
access to all of the health services described in VA's Medical Benefits 
Package, which includes prescription drugs.
    The Final Report of the President's Task Force To Improve Health 
Care Delivery for Our Nation's Veterans, released in May, 2003, noted 
that ``According to a November 2002 [Government Accountability Office 
(GAO)] report, of the $3 billion VA spent on outpatient pharmacy drugs 
in fiscal year 2001, 13 percent of the total cost, or $418 million, was 
for former Priority Group 7 veterans.'' Other surveys have also 
suggested that former Priority Group 7 veterans are significantly 
affecting VA's pharmacy workload, and anecdotal evidence suggests that 
many of these veterans are coming to VA only for prescription drugs. 
The GAO study reported that in fiscal year 1999, 400,000 of the former 
Priority Group 7 veterans had 11 million prescriptions filled. ``In 
fiscal year 2001, the number of veterans in this group seeking 
prescription drugs increased to 800,000 and the number of prescriptions 
filled grew to 26 million.''
    These numbers are alarming when one considers that many of these 
veterans come to VA with prescriptions from their private physicians 
already written and in-hand only to find out that they cannot get their 
prescription filled until they see a VA physician. The VA Inspector 
General noted ``frequent comments in patient medical records reflecting 
the frustration of veterans in having to go through VA's extended 
process of scheduling exams and tests and then spending sometimes the 
entire day at the medical center solely, from their perspective, to 
have their prescriptions filled or refilled.''
    In addition, the VA Inspector General also found once veterans 
received appointments with VA physicians, these VA physicians 
``routinely review and approve the orders of the private physicians--
[and] exams frequently duplicate tests and exams that have already been 
performed by the patient's private physician and are conducted to allow 
the VA physician to support filing a prescription that the patient 
brought from his/her private physician.''
    Given the current situation and the opportunity to potentially 
mitigate the impact of long waiting times and produce cost savings by 
streamlining an inefficient and overly bureaucratic process, the VFW 
supports the creation of an out-patient prescription benefit that would 
free up VA health care appointments and potentially reduce the backlog. 
In addition, we support providing an outpatient medication benefit to 
Medicare-eligible Category 8 veterans who are currently precluded from 
enrolling in VA health care.
    VFW, however, does not support the language that requires veterans 
to forgo their earned VA health care in favor of Medicare. Veterans are 
unique in that they have an entitlement to Medicare by way of financial 
contribution and have also earned the right to VA health care through 
virtue of their service to this Nation. They must not be forced to give 
up their rights to either. VFW will continue to fight for adequate 
appropriations to allow all veterans access to VA's full Medical 
Benefits Package.

             S. 716, THE VET CENTER ENHANCEMENT ACT OF 2005

    VFW applauds the introduction of S. 716, The Vet Center Enhancement 
Act of 2005, legislation that would amend title 38, U.S.C. to enhance 
services provided by vet centers, to clarify and improve the provision 
of bereavement counseling by the Department of Veterans Affairs, and 
for other purposes.
    In February 2004, the Department of Veterans Affairs (VA) 
authorized the Vet Center program to hire 50 Operation Iraqi Freedom 
(OIF) and Operation Enduring Freedom (OEF) veterans to provide outreach 
to their returning comrades. As time passes and more and more veterans 
of OIF and OEF as well as those serving all over the globe in the War 
on Terror return home with both physical and mental battle scars, the 
need for enhanced services provided by VA is critical. Community based 
Vet Centers provide a safe haven and offer a wide-variety of 
readjustment services designed to assist transitioning veterans. 
Currently, 60 percent are staffed by veterans who have served in 
combat. This legislation will allow VA to hire 50 more OIF and OEF 
veterans to help reach out to those newly transitioning veterans 
adjusting back to civilian life. Who better to explain services and 
help ease their transition than someone who served along side them, can 
relate to their experiences, and has already navigated VA's many 
benefit programs?
    This legislation will also go one step further to help surviving 
family members who have suffered the loss of a loved one by clarifying 
who can use and benefit from vet center bereavement counseling 
services. The VFW feels that we have an obligation to help make the 
transitioning period for returning servicemembers and the readjustment 
period for survivors of those killed in battle as smooth and as 
problem-free as possible.

                  DRAFT BILL, SAVE REAUTHORIZATION ACT

    The VFW offers our support for Senator Obama's draft bill which 
would expand and improve upon VA's homelessness programs.
    VA estimates that there are approximately 250,000 homeless 
veterans. That is a national tragedy. These men and women have served 
this country, and now find themselves in an unfortunate situation. We 
must not leave these men and women behind. This bill greatly helps our 
homeless veterans, and is a positive step toward ending this national 
problem.
    The legislation includes provisions that would provide $200 million 
in funding for the homeless providers grant and per diem programs 
annually through fiscal year 2011, and $50 million per year for the 
Homeless Veterans Reintegration Program.
    The programs it would extend are of great benefit to homeless 
veterans, helping them to make the sometimes-difficult transition back 
into society. We applaud this legislation and thank the committee for 
considering it.
    We received two draft bills from Senator Akaka's office, which, we 
were not able to review in time. We would be happy to offer our 
comments for the record, after we've had sufficient time to review 
them.
    This concludes my statement, Mr. Chairman. I would be happy to 
answer any questions that you, or the Members of this committee, may 
have.

    Chairman Craig. Thank you very much. Your full statement 
will be a part of the record.
    Now, Adrian Atizado, Assistant National Legislative 
Director, Disabled American Veterans. Welcome before the 
committee.

  STATEMENT OF ADRIAN ATIZADO, ASSISTANT NATIONAL LEGISLATIVE 
              DIRECTOR, DISABLED AMERICAN VETERANS

    Mr. Atizado. Mr. Chairman, Members of the committee, on 
behalf of the members of the Disabled American Veterans and its 
auxiliary, we wish to express our appreciation for this 
opportunity to present our views on the bills and draft bills 
on today's agenda.
    For the sake of brevity, I will limit my oral remarks to 
highlight notable provisions of the bills, and ask the 
committee to refer to my written testimony for additional 
information.
    The DAV supports Section 2 of the Veterans Health Care Act 
of 2005, which would prohibit collection of co-payments from 
veterans receiving hospice care furnished by VA. As you may 
already know, Public Law 108-422 does not exempt veterans from 
co-pay for hospice care, provided in other VA settings such as 
hospital inpatient as well as in the home.
    Similarly, DAV supports the provisions in Section 3 that 
would exempt former POWs from inpatient long-term care service 
co-payments.
    As part of the independent budget the DAV strongly opposes 
the provision of Section 3 that would eliminate VA's 
requirement to maintain nursing bed capacity. This provision 
recognizes and strengthens the importance of the Veterans 
Health Administration specialized services and reflects the 
vulnerability of these high-cost services in an under funded 
system, especially at a time when the projected workload of VA 
chronic care services will continue to rise in the future.
    Section 4 would allow VA to reimburse a veteran for any 
remaining expenses for having received emergency treatment at a 
private facility. Now, DAV does have a resolution to support 
this legislation. However, we do object to the eligibility 
limitations for reimbursement of emergency services on veterans 
enrolled in a VA health care system.
    DAV Resolution 47 calls for adequate funding and permanency 
of all veterans employment and training programs, including 
homeless programs. Therefore, we support Section 7 of this 
bill. However, we do note that any improvements and expansions 
gained would be lost in the following years due to rising costs 
such as inflation which affects the reimbursement rate, which 
increases annually.
    DAV Resolution 175 calls for the appeal of all co-payments 
for veterans' medical services and prescriptions. Accordingly, 
we do oppose the co-payment provision in S. 614, the Veterans 
Prescription Drug Assistance Act.
    The proposed legislation which would require VA to publish 
a long-term care strategic plan to address the significant 
needs of sick and disabled veterans for chronic care, DAV has a 
resolution calling for legislation to establish a comprehensive 
program of extended care services for veterans. However, as 
part of the IB, the DAV is opposed to the provision in the bill 
which requires the strategic plan to include specific plans to 
utilize Medicare, Medicaid and private insurance companies to 
expand care. Specifically, under tight budget constraints, this 
provision would allow a shift in VA's responsibility to 
veterans and reduces internal capacity to care for America's 
aging veterans.
    I see my time has run out. I do appreciate again the 
opportunity to testify and welcome any questions you may have.
    [The prepared statement of Mr. Atizado follows:]

 Prepared Statement of Adrian Atizado, Assistant National Legislative 
                  Director, Disabled American Veterans

    Mr. Chairman and Members of the Committee:
    On behalf of the members of the Disabled American Veterans (DAV) 
and its Auxiliary, I wish to express my appreciation for this 
opportunity to present the views of our organization on the bills and 
draft bills on today's agenda. As always, we appreciate this 
committee's efforts to improve benefits and services for disabled 
veterans. With a few exceptions, the provisions of these bills are 
beneficial and justified.

           DRAFT LEGISLATION VETERANS HEALTH CARE ACT OF 2005

    Public Law 108-422, Section 204, only exempted veterans from 
extended care co-payments for VA hospice care services provided in a 
nursing home setting. However, hospice care is provided in other 
settings such as hospital inpatient, and in the home. Section 2 of this 
legislation would prohibit the collection of co-payments from veterans 
receiving hospice care furnished by the Department of Veterans Affairs 
(VA) in any setting. The DAV testified in support of the same provision 
in S. 2486 last year, and the DAV fully supports Section 2 in this 
draft bill.
    Similarly, the DAV supports the provision in Section 3 that would 
exempt former POWs from inpatient long-term care service co-payments. 
The DAV has a resolution calling for the repeal of all co-payments for 
veterans' medical services and prescriptions. We commend this committee 
for recognizing the tremendous undue burden placed on veterans in need 
of end-of-life care that provides dying patients and their loved ones 
with comfort, compassion, and dignity. Furthermore, veterans in no 
other group as a whole have borne a greater burden on behalf of our 
Nation and deserve more in return than our former POWs. Many suffered 
unimaginable horrors from torture, humiliation, other physical and 
psychological trauma and abuse, deprivation, isolation, and 
malnutrition. In addition to the effects of physical and mental trauma, 
many suffered from diseases caused by unsanitary conditions and 
inadequate diets. Many, perhaps, never fully recover from a life 
experience that is far more traumatic than most in society ever have to 
endure. To the extent we can provide former POWs benefits that address 
their special needs or afford some general recompense in proportion to 
their suffering and sacrifices, we should never hesitate to do so.
    Section 3 has another provision that, if passed, would eliminate 
the required nursing bed capacity to be no less than the level during 
fiscal year 1998. As part of The Independent Budget (IB), the DAV 
strongly opposes the provision in Section 3 that would eliminate VA's 
requirement to maintain nursing bed capacity. This provision recognizes 
and strengthens the importance of the Veterans Health Administration's 
(VHA's) specialized services and reflects the vulnerability of these 
high-cost services in an under funded system. The projected workload 
for VA chronic care services will continue to rise in the future. To 
address this burgeoning demand VA has testified that it will increase 
capacity in its non-institutional long-term care program. However, the 
Government Accountability Office's (GAO) review of this program found 
high variations in the availability of six VA non-institutional long-
term care programs. Until it can be verified that these non-
institutional programs are increased and functioning at a level of 
satisfaction to veterans who would need these services, it seems an 
unwise decision to relieve VA from the requirement that it protect the 
vulnerability of its institutional long-term care capacity.
    Section 4 would allow the VA to reimburse a veteran for any 
remaining expenses from having received emergency treatment at a 
private facility. The DAV has a resolution to support legislation to 
authorize enrolled veterans to receive emergency medical care in 
private medical facilities at VA's expense when VA facilities are not 
reasonably available. However, we object to the eligibility limitations 
for reimbursement of emergency services on veterans enrolled in the VA 
health care system. Due to the existing eligibility criteria for VA 
reimbursement of emergency treatment, many veterans do not seek 
emergency treatment in non-VA facilities. When they do, they are 
charged for emergency care as a result of denial of payment by VA for 
such care based on the existing eligibility criteria. For example, the 
eligibility criteria indicate veterans must not only be enrolled in the 
VA health-care system, but they also must have been seen by a VA 
health-care professional within the previous 24 months. As part of the 
ill, the DAV believes all enrolled veterans should be eligible for 
emergency medical services at any medical facility. It is outrageous to 
penalize a veteran for seeking emergency care when he or she is 
experiencing symptoms that manifest a life-threatening condition.
    Section 5 of this bill would authorize care for newborn children of 
enrolled women veterans following delivery. Women Veteran Coordinators 
have complained that it is very difficult to secure a contract for care 
for a woman veteran for the delivery of a baby without securing a 
contract for initial post-delivery newborn care. Private hospitals are 
reluctant to accept a sole contract for care for the mother and risk 
financial responsibility for the care of the newborn infant following 
delivery. The promise of comprehensive health care services includes 
prenatal care and delivery. Health care professionals consider the 
initial newborn care immediately following delivery as part and parcel 
of the delivery itself this legislation would authorize VA to pay for 
the initial care of the newborn infant for 14 days after the date of 
birth or until the mother is discharged from the hospital, which ever 
is the shorter period. DAV has no resolution from our membership on 
this issue; however, its purpose is beneficial. We have no objection to 
the committee's favorable consideration of this section of the measure.
    Because of an apparent correlation between veterans' service in 
Vietnam and spina bifida and other birth defects in the children of 
veterans, Congress authorized special programs including medical 
treatment to these children. Section 6 of this bill addresses the 
disparity between billed charges for medical services rendered and 
payments received by non-VA health care providers for treating children 
of Vietnam veterans who are suffering from the effects of exposure to 
Agent Orange. While protecting the veteran and family against the 
difference between the amount billed and the amount paid by VA, this 
provision would allow non-VA health care providers to seek third party 
payments to compensate for the difference. Having no mandate from our 
membership on this issue, we do not have a position on this section.
    Section 7 would authorize increased appropriations for homeless 
providers' grants to $130 million beginning in fiscal year 2006. DAV 
Resolution No. 047 calls for adequate funding and permanency for all 
veterans' employment and training programs, including homeless 
programs. We thank the committee for recognizing the value and 
importance of this program, which serves a vulnerable portion of the 
veteran population; however, we note that any improvements and 
expansions gained would be lost in the following years due to rising 
costs such as inflation and the annual increase of reimbursement rates.
    Section 8 would allow VA to employ marriage and family therapists 
and require VA to submit a report to both the House and Senate 
Veterans' Affairs committees. The report would include the actual and 
projected workloads for providing marriage and family counseling 
related to posttraumatic stress disorder (PTSD) treatment, an 
assessment of the effectiveness of this treatment, and any 
recommendations for improvement. DAV has no position on these 
provisions since our membership has not provided us with a mandate on 
this issue.
    Section 9 of this bill would authorize Senior Executive Service 
compensation to VA's Nursing Service Director. The DAV supports this 
provision of the bill in keeping with DAV Resolution No. 199, which 
seeks the enactment of legislation providing for competitive salary and 
pay levels for VA physicians, pharmacists, dentists, and nurses.
    Section 10 would eliminate the prohibition to utilize funds 
appropriated for veterans medical care toward any cost comparison study 
between VA services and similar commercial services. The DAV does not 
have a resolution on this issue; however, due to the perennially 
inadequate level of medical care funding, we are concerned this 
provision would have a deleterious affect on VA's ability to deliver 
needed medical care to sick and disabled veterans in a timely manner.
    VA supplies one-third of all care provided for this Nation's 
chronically mentally ill and have developed broad-reaching programs to 
meet the psycho-social needs of homeless veterans. Without these 
specialized services many veterans who are homeless or suffer severe 
mental illness or substance use problems would return to the street, 
end up in jail, or rely on more expensive and less comprehensive State-
sponsored programs. The private sector is ill-equipped to provide these 
kinds of specialized services VA patients frequently need. Section 11 
of this bill would expand VA's mental health services. To increase the 
number of PTSD Clinical Teams (PCTs), Mental Health Intensive Case 
Management teams (MBICMs), substance abuse treatment, improve mental 
health education and training programs for providers, increase access 
to VA's mental health services through tele-health initiatives, and 
increase the availability of mental health services in Community-Based 
Outpatient Clinics (CBOCs), $95 million would be authorized. With the 
authorization of additional funds for these programs, the DAV supports 
these provisions that would enhance VA's ability to provide mental 
health services.
    On May 19, 2005, a hearing was conducted by the House Veterans' 
Affairs committee on seamless transition. GAO provided testimony, which 
indicates the Department of Defense (DoD) and VA have been working on a 
data sharing agreement for over 2 years, but have not reached an 
agreement. GAO cited differences between the two agencies in their 
interpretation of the Health Insurance Portability and Accountability 
Act of 1996 (HIP AA) and the HIP AA privacy rule, which governs the 
sharing of individually identifiable health data. Section 12 seeks to 
address this impasse by allowing both agencies to exchange protected 
health information despite any other provision of law. This would 
enable VA to locate, identify, and follow up with servicemembers who 
are injured while on active duty and may be eligible for VA benefits 
and services.
    VA has indicated, of the nearly 86,000 veterans from Operation 
Enduring Freedom (OEF) and Iraqi Freedom (OIF) that have sought medical 
care from VA, over half are from the National Guard and Reserve. 
Moreover, over 9,000 veterans from Operation Enduring Freedom and Iraqi 
Freedom suffer from PTSD, and over 2,000 have sought care in Vet 
Centers. Outreach to National Guard and Reserves is now considered a 
form of psychosocial intervention and provides direct access to Vet 
Centers by providing information to individuals about the availability 
of specialized services they may require and may be entitled. Section 
13 would expand VA's outreach to the National Guard and Reserve 
component of the military by increasing the number of employees in the 
Readjustment Counseling Service's Global War on Terrorism Outreach 
Program, requiring that information on VA benefits and services be made 
available to returning Guardsmen, and an appropriate needs assessment 
be conducted on all VA benefits and services. In addition, this section 
would allow for collaboration between VA and appropriate State National 
Guard officials to facilitate this outreach program. Section 14 would 
require VA to submit a plan to both the House and Senate Veterans' 
Affairs committees to increase the number of Vet Centers capable of 
providing tele-mental health for fiscal years 2005 through 2007. 
According to VA, the Veterans Readjustment Counseling Service maintains 
206 Vet Centers, of which there are currently 20 Vet Centers across 14 
Veterans Integrated Service Networks (VISNs) that have linkages to 
provide tele-mental health services. The DAV does not have a resolution 
on these issues; however, the purpose of this provision appears 
beneficial and we look forward to favorable consideration by this 
committee.
    Section 15 would require the Secretary of Veterans Affairs to 
submit a report to both the House and Senate Veterans' Affairs 
Committees with data regarding the source of VA's mental health data, 
such as the locations of facilities maintaining such data. 
Additionally, the report is to include an assessment of the information 
and recommendations for improving data collection, use, and repository 
locations. The DAV does not have a resolution on this issue; however, 
the provisions appear beneficial.

                                 S. 481

    This bill would extend the eligibility period for veterans who 
served in combat during or after the Persian Gulf War, from 2 years 
following discharge or release from active military service to 5 years, 
to receive VA medical care. The DAV has no resolution pertaining to the 
bill. However, because it would benefit recently discharged veterans 
and their family members, the DAV has no objection to its favorable 
consideration.

                                 S. 614

    In addition to allowing Medicare-eligible veterans to elect to 
receive from VA outpatient prescription medication prescribed by a 
physician, the Veterans Prescription Drugs Assistance Act, would direct 
VA to collect co-payments and/or an enrollment fee to furnish 
prescription medications for veterans in receipt of compensation and 
increased pension. Furthermore, the bill would require VA to inform 
each veteran considering an election to receive VA medication under 
these provisions of the terms of the election.
    As this committee may be aware, veterans service organizations 
acquiesced to the use of co-payments which were only imposed upon 
veterans under urgent circumstances and as a temporary necessity to 
contribute to reduction of the Federal budget deficit. Accordingly, the 
Omnibus Budget Reconciliation Act of 1990 established VA's authority to 
charge co-payments to veterans for prescription medication and medical 
services with a sunset date of September 30, 1991. However, since 1997, 
Congress and the Administration have used the amount estimated that VA 
might collect from veterans to offset appropriations for VA. Most 
recently, on September 20, 2003, Public Law 108-7 eliminated the sunset 
provision making co-payments permanent without debate through hearings 
and other authorizing committee processes.
    DAV Resolution No. 175 calls for the repeal of all co-payments for 
veterans' medical services and prescriptions. Accordingly, we oppose 
the co-payment provisions of this bill, which would require a veteran 
to pay an annual enrollment fee and the full cost of prescription 
medication VA would otherwise pay. Such provisions move VA farther down 
the road of shifting the costs of care onto the backs of sick and 
disabled veterans. Moreover, this provision is fundamentally contrary 
to the spirit and principles underlying the provision of benefits to 
veterans by a grateful Nation. We believe that providing our Nation's 
veterans with high quality health care is a continuing cost of national 
defense and should be our first priority, without cost to veterans.

                                 S. 716

    The Vet Center Enhancement Act of 2005 requires that VA employ, in 
career conditional status, up to an additional 50 veterans of 
Operations Enduring Freedom or Iraqi Freedom to provide outreach to 
veterans on the availability of readjustment counseling and related 
mental health services at Vet Centers. The bill also eliminates any 
limitation on duration of employment of veterans for the aforementioned 
program. Moreover, VA's authority to provide bereavement counseling at 
Vet Centers would be revised to include parents of military 
servicemembers who die while serving on active military duty. For 
fiscal year 2006, $180 million would be authorized to be appropriated 
for the Readjustment Counseling Service Program. The DAV has no 
official mandate from our membership on this measure. However, its 
purpose is beneficial, and we do not object to its favorable 
consideration.
    Draft Bill to be entitled the, ``Sheltering All Veterans Everywhere 
Act'' or the ``SAVE Reauthorization Act of 2005''.--This bill would 
improve or reauthorize the following programs servicing the needs of 
homeless veterans.
    Homeless Providers Grant and Per Diem Program.--The Homeless 
Providers Grant and Per Diem (GPD) Program provides competitive grants 
to community-based, faith-based, and public organizations to offer 
transitional housing or service centers for homeless veterans. This 
provision would reauthorize the GPD program through fiscal year 2011 at 
$200 million annually. GPD is set to expire September 30, 2006. The 
current annual authorization level for the program is $99 million.
    Homeless Veterans' Reintegration Program.--The Homeless Veterans' 
Reintegration Program (HVRP) is an employment services program 
established to help homeless veterans reintegrate into the labor force 
and attain financial independence. HVRP assists homeless veterans via 
grants to State and local Workforce Investment Boards, commercial 
agencies, and non-profit organizations, including faith-based and 
community-based organizations. Qualified agencies directly assist 
homeless veterans with job placement, training, counseling, and resume 
preparation. This provision would reauthorize the HVRP through fiscal 
year 2011 at $50 million annually.
    VA Outreach Services.--The VA would be required to provide 
information concerning homelessness, including risk factors, awareness, 
and contact information for preventative assistance, to members of the 
Armed Forces separating from active duty.
    Grant Program for Homeless Veterans With Special Needs.--The grant 
program authorizes VA to make grants to assistance providers to assist 
homeless veterans with special needs, including women (with and without 
children), frail elderly, terminally ill, or chronically mentally ill. 
The special needs program has enabled VA and GPD providers to devote 
attention to underserved subpopulation within the homeless veteran 
population. It is currently authorized through fiscal year 2005 at $5 
million annually. This bill would continue the program at current 
levels through 2011.
    Dental Care.--This provision would expand eligibility for dental 
care by eliminating the criteria that veterans must be receiving 
treatment in an approved homeless program for a period of 60 
consecutive days prior to becoming eligible for dental treatment.
    Authorization of appropriations for the Homeless Veterans Service 
Provider Technical Assistance Program.--This program authorizes VA to 
make competitive grants to qualified organizations that provide 
technical assistance to nonprofit groups that provide assistance to 
homeless veterans. It is necessary because community-based and faith-
based organizations serving homeless veterans lack the technical 
expertise to acquire grants via the complex set of funding and service 
delivery streams associated with housing and supportive services. This 
bill would reauthorize the program through 2011 at $1 million annually.
    Annual Report.--This provision would require VA to report on 
homeless veteran coordination efforts with other Federal departments 
and agencies, including the Department of Defense, Department of Health 
and Human Services, Department of Housing and Urban Development, 
Department of Justice, Department of Labor, Interagency Council on 
Homelessness, and the Social Security Administration.
    Advisory Committee.--This provision would add the Executive 
Director of the Interagency Council on Homelessness (ICH) to the 
Advisory Committee on Homeless Veterans.
    Study on Military Sexual Trauma and Homelessness.--This provision 
would authorize a study on the relationship between military sexual 
trauma and homelessness. The VA Secretary's Advisory Committee on Women 
Veterans recommended in 2004 that a study be conducted on the possible 
correlation between military sexual trauma and homelessness among 
veterans and effective service models for assembling various treatment 
modalities and environments.
    The DAV supports this draft legislation and encourages the 
committee to consider it favorably. The DAV is very supportive of HVRP 
and other homeless veterans' initiatives. It is an unfortunate and sad 
fact that many veterans, for various reasons, have been unable to make 
their way in the society they swore to defend. Such veterans exist 
without decent shelter, adequate nutrition, or medical care. Services 
provided by homeless veterans can mean the difference between a veteran 
living on the streets or living in transitional housing until they are 
capable of providing for themselves. As a member of the National 
Coalition for Homeless Veterans (NCHV), the DAV supports the testimony 
and recommendations submitted by the Coalition, which include all of 
the provisions of this bill.
    In addition to legislative advocacy on behalf of homeless veterans, 
it is important to note that the DAV takes an active role in seeking to 
prevent and end homelessness among our Nation's veterans. The DAV 
Homeless Veterans Initiative, which is supported by our Charitable 
Service Trust and Colorado Trust, promotes the development of 
supportive housing and services to help homeless veterans become 
productive, self-sufficient members of society. Since 1989, DAV 
allocations for homeless projects have exceeded $2 million.

DRAFT BILL TO BE ENTITLED, THE ``BLINDED VETERANS CONTINUUM OF CARE ACT 
                               OF 2005''

    According to VA, of the 160,000 veterans eligible for Blind 
Rehabilitation Services, over 38,000 are currently enrolled to receive 
services. The impact of blindness is individualized and includes both 
the older veteran whose vision gradually worsens due to macular 
degeneration or diabetes and the serviceperson who is rendered totally 
blind by traumatic injury. Each of these veterans requires 
individualized, specialized care and treatment suited to the cause of 
blindness, physical and medical condition, age, ability to cope with 
frustrating situations, learning ability, and the overall needs and 
lifestyle of the veteran. The Blinded Veterans Continuum of Care Act of 
2005 would require VA to establish Blind Rehabilitation Outpatient 
Specialists (BROS) at designated VA medical facilities with Visual 
Impairment Service Teams (VIST) or with more than 150 enrolled veterans 
who are legally blind.
    The IB places special emphasis on VA's specialized programs such as 
the Blind Rehabilitation Service (BRS), which is known worldwide for 
its excellence in delivering comprehensive blind rehabilitation to our 
Nation's blinded and severely visually impaired veterans. Favorable 
consideration of this bill by this committee would preserve VA's 
mission and role as a provider of blind rehabilitation services, as 
well as benefit the approximately 120 servicemembers from Operations 
Enduring Freedom and Iraqi Freedom who suffer from visual impairments.

  DRAFT BILL TO REQUIRE VA TO PUBLISH A LONG-TERM CARE STRATEGIC PLAN

    The proposed legislation would require VA to publish a long-term 
care strategic plan to address the significant need of sick and 
disabled veterans for chronic care in both institutional and non-
institutional settings. According to VA, the veteran population is 
projected to decline to 20 million by 2010, but over the same time 
period those age 75 and older will increase from 4.5 to 4.7 million and 
those 85 and older will nearly triple from 510,000 to over 1.3 million. 
Older veterans, particularly those over 85, are especially likely to 
have multiple, complex chronic diseases requiring comprehensive health 
care including long-term care services. Of equal importance is the fact 
that current VA patients are not only older in comparison to the 
general population, but they are much more likely to be disabled and 
unable to work, generally have lower incomes, and lack health 
insurance.
    With a constrained budget, an increasing and aging veteran 
population, and the high cost of providing inpatient long-term care, VA 
is struggling with the issue of long-term care. An attempt was made to 
address long-term care through the Capital Asset Realignment for 
Enhanced Services (CARES) initiative. GAO's May 2003 report, ``VA LONG-
TERM CARE: Service Gaps and Facility Restrictions Limit Veterans' 
Access to Non-Institutional Care'' (GAO03-487), confirmed veterans' 
access to non-institutional long-term care services is limited and 
highly variable across the Nation.
    Extensive gaps in service exist due in part to restrictions based 
on veterans' levels of service-connected disability that are 
inconsistent with existing eligibility standards. GAO cites VA 
headquarters as the source of such disparity as a result of not 
providing clear and adequate guidance on making non-institutional long-
term care services available. Furthermore, VA headquarters has failed 
to emphasize non-institutional long-term care as a priority, and has 
failed to develop a performance measure to ensure the provision of 
these services consistently across VA facilities.
    The DAV has a resolution calling for legislation to establish a 
comprehensive program of extended care service for veterans in need of 
such care for a service-connected disability. However, as part of the 
IB, the DAV is opposed to the provision in the bill, which requires the 
strategic plan to include specific plans to utilize Medicare, Medicaid, 
and private insurance companies to expand care. Under tight budget 
constraints, this provision would allow a shift in VA's responsibility 
to veterans and reduce its internal capacity to care for America's 
aging veterans. Care for aging veterans should not be shifted to 
private providers because it is more convenient or more cost-effective 
to do so. VA nursing home care is an integral part of VA's health care 
benefit package and is an entitlement to certain eligible veterans, and 
these individuals should not be forced to accept other forms of nursing 
home care because VA has reduced its capacity.

   DRAFT BILL TO ESTABLISH A GRANT PROGRAM TO PROVIDE TRANSPORTATION 
                   TO MEDICAL CARE FOR RURAL VETERANS

    VA currently operates 100 outpatient clinics in 27 States that are 
located in areas considered as rural or highly rural. Veterans residing 
in such areas experience difficulty in accessing adequate health care 
in a timely manner, which in turn reduces the continuity and quality of 
care provided to existing enrollees in the VA health care system. 
Because so many sick and disabled veterans lack transportation to and 
from VA medical facilities for needed treatment, the DAV operates a 
nationwide Transportation Network. This program continues to show 
tremendous growth as an indispensable resource for veterans. Across the 
Nation, DAV Hospital Service Coordinators operate 183 active programs. 
They have recruited 9,657 volunteer drivers who logged 26,429,512 miles 
last year, taking over 725,084 veterans to and from VA medical 
facilities. Since 1987, our volunteer drivers have driven 8,958,755 
veterans more than 338 million miles to and from their VA medical 
appointments.
    This proposed legislation would establish a grant program 
administered by VA to provide innovative transportation options to 
veterans in remote rural areas. DAV's mission of service reflected in 
the commitment of men and women in our Transportation Network to assist 
veterans who have no other means of getting to their VA medical 
appointment, coupled with a mandate from our membership calling for 
timely access to quality health care and medical services; we support 
this bill and urge favorable consideration by the committee.
    Due to the timeliness in receiving the remaining three draft bills 
scheduled for today's agenda, the DAV is unable to provide position on 
these measures at this time. However, we request the opportunity to 
submit our written testimony for the record at a later time.
    On behalf of the DAV, I want to thank the committee for its 
consideration of these important legislative matters and for the 
opportunity to present our views. We sincerely appreciate your 
continuing support of veterans.

    Chairman Craig. Adrian, thank you very much and your full 
statement will be a part of the record.
    Next Carl Blake, Associate National Legislative Director, 
Paralyzed Veterans of America. Thank you.

    STATEMENT OF CARL BLAKE, ASSOCIATE NATIONAL LEGISLATIVE 
            DIRECTOR, PARALYZED VETERANS OF AMERICA

    Mr. Blake. Thank you, Chairman Craig. PVA would like to 
thank you for the opportunity to testify today on the proposed 
legislation. I will limit my remarks to just a select few of 
the legislative proposals.
    PVA strongly opposes the provision of the Veterans Health 
Care Improvements Act that would repeal section 1710(b), 
subsection B of title 38. This section ensures that the VA 
maintains bed and staffing levels at the same level established 
by Public Law 106-117 of the Veterans Millennium Health Care 
and Benefits Act. Despite an aging veteran population and 
passage of Public Law 106-117, the VA's average daily census 
has continued to decline since 1998 and is projected to reach a 
new low of 9,795 for fiscal year 2006. We feel that the VA is 
ignoring the law by providing services to fewer and fewer 
veterans in the nursing home care program.
    PVA opposes section 10, which would allow the VA to use 
money appropriated for health care to be used to conduct cost 
comparison studies between the provision of care by the VA and 
private and other types of contractors. Now is not the time to 
allow the VA to draw much-needed health care dollars when the 
medical system is already struggling to meet the demands being 
placed on the system. Furthermore, we do not believe that the 
contracted care is more cost effective and cost efficient than 
that provided by the VA, and we certainly do not believe that 
that care will be as high quality as that provided by the VA.
    S. 614 would allow a Medicare eligible veteran to receive 
medications from the VA on an outpatient basis. These veterans 
will not otherwise be eligible for Medicare services from the 
VA. PVA has expressed concerns in the past about similar 
expansions of prescription drug benefits. We believe that 
opening up the VA pharmacy system in the way that this 
legislation does could ultimately change the basic primary 
mission of the VA, which is to provide health care to sick and 
disabled veterans. The VA does not need to become the veterans' 
drug store at this time.
    As a participating member of the National Coalition of 
Homeless Veterans, PVA also supports the provisions of the 
Sheltering All Veterans Everywhere Act.
    PVA supports the proposed legislation introduced by Senator 
Salazar that would require the VA to publish a strategic plan 
for long-term care. PVA is astounded by the fact that the VA 
has a proposal on the table such as the legislation being 
considered today to repeal the Millennium Health Care 
requirements, the horrific budget proposal, even though aging 
veterans are a significant part of the population the VA will 
have to care for in the future.
    Congress must make every effort to ensure that the VA 
develops a reasonable and effective strategic plan to provide 
long-term care and to ensure that the VA immediately implements 
that plan.
    Mr. Chairman, I would like to thank you again for the 
opportunity to testify, and I would be happy to answer any 
questions that you might have.
    [The prepared statement of Mr. Blake follows:]

   Prepared Statement of Carl Blake, Associate National Legislative 
                Director, Paralyzed Veterans of America

    Chairman Craig, Ranking Member Akaka, members of the committee, 
Paralyzed Veterans of America (PVA) would like to thank you for the 
opportunity to testify today on the ``Veterans Health Care Improvements 
Act of 2005,'' the ``Mental Health Capacity Enhancement Act of 2005,'' 
the ``Neighbor Islands Veterans Health Care Improvements Act,'' S. 481, 
S. 614, the ``Veterans Prescription Drugs Assistance Act,'' S. 716, the 
``Vet Center Enhancement Act of 2005,'' and the ``Sheltering All 
Veterans Everywhere Act.'' As more and more veterans are entering the 
Department of Veterans Affairs (VA) health care system, it is important 
that we continue to upgrade the health care options available to them.

         THE ``VETERANS HEALTH CARE IMPROVEMENTS ACT OF 2005''

    PVA appreciates the efforts of the committee to address the many 
health care issues facing veterans with this proposed legislation. PVA 
supports the provision of Section 3 of the bill that would exempt 
former prisoners of war from paying co-payments for extended care 
services. It is only right that we recognize the extreme hardships that 
these men and women faced in defense of this country.
    However, we strongly oppose the provision that would repeal Section 
1710B(b). This section ensures that the VA maintains bed and staffing 
levels at the same level established by the P.L. 106-117, the 
``Veterans Millennium Health Care and Benefits Act.'' Despite an aging 
veteran population and passage of P.L. 106-117, the VA has continuously 
failed to maintain its 1998 VA nursing home required average daily 
census (ADC) mandate of 13,391. VA's average daily census (ADC) for VA 
nursing homes has continued to decline since 1998 and is projected to 
decrease to a new low of 9,795 in fiscal year 2006. The VA is ignoring 
the law by serving fewer and fewer veterans in its nursing home care 
program.
    PVA is deeply troubled by this move to eliminate the mandatory ADC 
requirement contained in the Millennium Health Care bill. This proposed 
change is not driven by current or future veteran nursing home care 
demand. In fact, the General Accounting Office (GAO) reported ``the 
numbers of aging veterans is increasing rapidly, and those who are 85 
years old and older, who have increased need for nursing home care, are 
expected to increase from approximately 870,000 to 1.3 million over the 
next decade.''
    PVA strongly feels that the repeal of the capacity mandate will 
adversely affect veterans and is a step toward allowing VA to reduce 
its current nursing home capacity. This is not the time for reducing VA 
nursing home capacity with increased veteran demand looming on the near 
horizon.
    PVA does not oppose the provisions of Section 3 which would allow 
the VA to reimburse a veteran for expenses incurred while receiving 
emergency treatment at a non-VA medical facility. However, we have 
concerns about some of the eligibility criteria that determine what 
veterans are eligible for this reimbursement. In accordance with The 
Independent Budget for fiscal year 2006, we believe that the 
requirement that a veteran must have received care within the past 24 
months should be eliminated. Furthermore, we believe that the VA should 
establish a policy allowing all veterans enrolled in the health care 
system to be eligible for emergency services at any medical facility, 
whether at a VA or private facility. PVA supports Section 4 of the 
legislation that would authorize the VA to provide care to newborn 
children of women veterans who are receiving maternity care. The woman 
veteran may be receiving care at a VA medical center or at a non-VA 
facility that the woman's care was contracted to.
    PVA supports the authorization of the Homeless Providers Grant and 
Per Diem Program at a level of $130 million. This reflects a 
significant increase over the current authorized level of $99 million. 
However, as a participating member in the National Coalition of 
Homeless Veterans (NCHV) we would like to recommend that the 
authorization level be increased to $200 million. This provision is 
necessary because as the per diem rate to cover the daily cost of care 
rises annually, there could be an actual reduction in the number of 
beds if the authorization level is not increased.
    PVA has no position on Section 7 which established qualifications 
for marriage and family therapy and calls for a report on marriage and 
family therapy workload. PVA supports Section 8 of the bill which would 
authorize the VA Chief Nursing Officer to receive a salary at the 
Senior Executive Service level. PVA has no position on Section 9.
    PVA opposes Section 10 which would allow the VA to use money 
appropriated for health care to be used to conduct cost-comparison 
studies between the provision of care by the VA and private and 
commercial contractors. Now is not the time to allow the VA to draw 
away critical health care dollars when the medical system is already 
struggling to meet the demand being placed on the system. Furthermore, 
we do not believe that contracted care is more cost-effective than the 
care provided by the VA, and we certainly do not believe that the VA 
will find the same level of high-quality care in the private sector.
    PVA supports the provisions of Section 11 which would improve and 
expand the mental health services provided by the VA. We believe that 
mental health disorders and Post-Traumatic Stress Disorder (PTSD) will 
prove to be common problems that the men and women returning from Iraq 
and Afghanistan will have to face. The additional authorization for 
funds for these programs is also critical to ensure that the VA has the 
resources it needs to meet what we believe will be significant demand.
    PVA supports the remaining sections of the proposed legislation. We 
are particularly pleased with Section 13 which would expand the number 
of personnel serving as readjustment counselors so that they can 
conduct additional outreach to National Guard members. It is important 
that National Guard members and Reservists not be left out as we expand 
the services available to those men and women who have served and are 
serving in the military.

                                 S. 481

    PVA fully supports this legislation which would extend the 
eligibility for hospital care, medical services, and nursing home care 
from 2 years to 5 years for a veteran who served on active duty in a 
theater of combat operations during a period of war after the Persian 
Gulf War or in combat against a hostile force after November 11, 1998. 
This provision has proven especially important to the men and women who 
have recently served in Iraq and Afghanistan and have exited military 
service.
    However, PVA believes that the ability of the VA to provide this 
essential care is threatened by the strain being placed on the 
veterans' health care budget. We know that the VA will continue to meet 
this important requirement for the young men and women who have 
sacrificed so much; however, at what cost will the VA meet this demand? 
The VA must receive adequate funding to ensure that it can provide the 
care to veterans who are eligible under this provision of Title 38 as 
well as all other veterans eligible for health care. The VA should not 
be placed in a position to determine which veterans will be denied care 
so that it might treat other veterans.

       S. 614, THE ``VETERANS PRESCRIPTION DRUGS ASSISTANCE ACT''

    The proposed legislation would allow a Medicare-eligible veteran to 
receive medications from the VA on an outpatient basis. These veterans 
will not otherwise be eligible for medical care services from the VA. 
PVA has expressed concerns in the past about similar expansions of 
prescription drug benefits. We believe that opening up the VA pharmacy 
system in the way that this legislation does could ultimately change 
the basic primary mission of the entire VA which is to provide health 
care to sick and disabled veterans. The VA does not need to take on the 
role of the veterans' drug store.
    PVA fears that if we embark upon this path of only providing 
certain limited health benefits to certain categories of veterans, we 
could very well see the erosion of the VA's mission. The VA would 
essentially revert back to the way it determined who received care and 
services prior to eligibility reform, when health care was not governed 
by medical needs but rather by arbitrary budget-driven classifications 
stratifying veterans' health care eligibility into ``have'' and ``have 
not'' categories.
    With the VA having taken steps to drastically reduce access by 
denying enrollment to Category 8 veterans 2 years ago and a budget 
situation that could lead to even further restrictions on enrollment, 
now is not the time to take chances with the lives and health of 
veterans by dramatically, and fundamentally, changing the nature of the 
VA health care system. The VA would then take on the new role of 
managing a prescription drug plan for a whole new category of eligible 
veterans.
    PVA opposes the provision of this legislation that would shift the 
cost burden of administering this program onto the backs of veterans. 
This is yet one more attempt to shift the responsibility for providing 
quality care and services away from the Federal Government. This 
measure would be unnecessary if Congress provided adequate funding to 
meet the needs of these veterans.

           S. 716, THE ``VET CENTER ENHANCEMENT ACT OF 2005''

    PVA supports S. 716, the ``Vet Center Enhancement.'' The Vet 
Centers managed by the VA provide vital readjustment services to the 
men and women who have placed themselves in harm's way and to their 
families. Vet Centers offer various types of readjustment counseling, 
including bereavement counseling, as well as related mental health 
services. The mental health services are especially important as the 
men and women returning from Iraq and Afghanistan seek to cope with the 
stress and related difficulties they faced while in combat.
    This legislation would authorize the VA Secretary to hire 50 
additional Operation Enduring Freedom and Operation Iraqi Freedom 
veterans to serve as outreach coordinators for the Vet Centers. These 
men and women are a valuable resource because they can closely relate 
to the new veterans and their families who they will be helping 
readjust. We also appreciate the provision that clarifies the 
availability of bereavement counseling to the parents of those 
servicemembers who have made the ultimate sacrifice. In many cases, the 
parents are the next of kin to the men and women who have been killed 
because there is no surviving spouse.

             THE ``SHELTERING ALL VETERANS EVERYWHERE ACT''

    The VA estimates that more than 200,000 veterans are homeless on 
any given night, and that more than 500,000 veterans experience 
homelessness in a year. PVA believes that the key to overcoming 
homelessness among the veterans population is employment. A veteran is 
unable to provide for himself or herself, much less a family, without 
the benefit of gainful employment.
    As a participating member of the NCHV, PVA supports Section 3 of 
this legislation. As we previously testified, increasing the 
authorization level for the Grant and Per Diem Program from $99 million 
to $200 million will ensure that the number of beds and the services 
provided are not reduced as the daily cost of care continues to 
increase.
    PVA supports Section 4 of the bill that would expand the Homeless 
Veterans Reintegration Program to include veterans who are deemed to be 
at imminent risk of homelessness. PVA also supports the reauthorization 
of the HVRP through fiscal year 2011. The change reflects one of the 
goals of the NCHV. Moreover, PVA, as a member of the National Coalition 
for Homeless Veterans (NCHV), also supports the reauthorization of the 
program at a $50 million funding level. The HVRP is perhaps the most 
cost-effective and cost-efficient program in the Federal Government. In 
spite of the success of HVRP, it remains severely under-funded. Even 
more tragically, DOL does not request a full appropriation in its 
budget submission. For fiscal year 2006, the Administration only 
requested $22 million to support this program. Enactment of this 
legislation would ensure that homeless veterans who need a high level 
of support get it.
    PVA supports Section 5 which would clarify the outreach efforts of 
the VA toward veterans and members of the Armed Forces to help them 
avoid homelessness. We also support the continuation of treatment and 
rehabilitation for the seriously mentally ill and homeless through 
2011. PVA supports the remaining sections of the proposed legislation.

  THE ``VETERANS MENTAL HEALTH CARE CAPACITY ENHANCEMENT ACT OF 2005''

    PVA supports the proposed legislation introduced by Senator Akaka 
that would improve mental health care services within the VA. We 
believe that quality mental health services will become vital as the 
rigors of combat in Iraq and Afghanistan begin to take their toll on 
the men and women serving there. PVA is pleased to see the 
strengthening of the performance measures for mental health programs 
outlined in Section 3. We appreciate the indexing requirement for 
funding specialized treatment and rehabilitation services in Section 4.
    PVA also understands the need to create a joint workgroup between 
the VA and Department of Defense (DoD) to address the mental health 
problems that servicemen and women returning from overseas face. It is 
important that the agencies work to educate servicemembers that there 
is no stigma associated with treatment for a potential mental health 
disorder. This is particularly true of the DOD who we believe has 
helped perpetuate this belief in servicemembers through adverse 
personnel actions in the past. It is important that the DOD and VA 
identify the men and women who have potential mental health problems 
early so that they can get the treatment that they need.

 THE ``NEIGHBOR ISLANDS VETERANS HEALTH CARE IMPROVEMENTS ACT OF 2005''

    PVA supports the proposed legislation introduced by Senator Akaka 
that would improve the provision of health care and services to 
veterans who live in Hawaii. We recognize the unique challenges faced 
by veterans who live there. They do not have easy access to all of the 
same services available to veterans who live on the mainland. We 
support the requirements to build health care clinics on selected 
islands of Hawaii. This will ease the travel burden for those veterans 
seeking to get health care from the VA.
    PVA supports Section 6 which authorizes the VA to conduct a study 
on the demand and access to specialized care and fee-basis care from 
the VA on the Hawaiian Islands. It is important that the VA maintains 
the capability to provide whatever care is needed to veterans living 
there.

         THE ``BLINDED VETERANS CONTINUUM OF CARE ACT OF 2005''

    PVA shares a unique relationship with Blinded Veterans of America 
(BVA) and the veterans that they represent. Much like PVA members, BVA 
members live with a catastrophic disability every day. Blinded veterans 
also rely on the specialized services provided by the VA just as spinal 
cord injured veterans rely on the same services. PVA fully supports the 
``Blinded Veterans Continuum of Care Act of 2005.'' The establishment 
of specialists at designated VA medical centers to improve the ability 
of the VA to meet the needs of blinded veterans is essential. The 
nature of the fighting in Iraq and Afghanistan has led to increasing 
numbers of men and women with visual impairments.

                     LONG-TERM CARE STRATEGIC PLAN

    PVA supports the proposed legislation introduced by Senator Salazar 
that would require the VA to publish a strategic plan for long-term 
care. The VA has recognized the massive needs that the Nation's oldest 
veterans, veterans of World War II and the Korean War, will present as 
they near the end of their lives. The VA has done incomparable work 
when it comes to studies of aging as well as the establishment of 
clinical approaches, research, education and new treatment models to 
deal with diseases of old age. VA has established 130 VA nursing home 
care units, and has aided the States in establishing and sustaining 128 
State homes for the long-term care of elderly veterans. Despite these 
efforts, the VA continues to struggle to meet the long-term care needs 
of America's aging veterans. Furthermore, the Capital Asset Realignment 
for Enhanced Services (CARES) Commission originally avoided the issue 
all together. And now the VA is proposing to shift the burden of 
providing long-term care and move into a type of niche market where it 
provides care to only that subset physically amenable to 
rehabilitation.
    It is imperative that the VA develop and implement a viable 
strategy to meet the ever-growing long-term care needs of the aging 
veterans' population. PVA is astounded by the fact that the VA has 
proposals on the table, such as the legislation considered today to 
repeal the Millennium Health Care bill capacity requirements and a 
horrific budget proposal, even though aging veterans are a significant 
part of the population that the VA will have to care for in the future. 
Congress must make every effort to ensure that the VA develops a 
reasonable and effective strategic plan to provide long-term care, and 
that the VA immediately implements that plan.

                   TRANSPORTATION FOR RURAL VETERANS

    Although PVA recognizes the difficulties some veterans have in 
accessing health care within the VA, PVA believes that it is a viable 
system. With over 800 community-based outpatient clinics, the VA has 
established a good network for meeting the needs of a vastly spread 
veterans population.
    PVA supports the legislation proposed by Senator Salazar that would 
establish a grant program to provide innovative transportation options 
to veterans who live in remote areas. This program would allow veterans 
to continue to access the high quality care provided at VA medical 
facilities without placing a financial burden for travel costs on the 
veteran. It will also keep veterans from venturing into the private 
sector to receive care that in many cases is substandard as compared to 
the VA.
    PVA appreciates the efforts the committee is making to address the 
many issues facing veterans today. We would be happy to address any 
additional legislative proposals for the record. Thank you.

    Chairman Craig. Carl, thank you very much. Your full 
statement will be a part of the record.
    Now let me turn to Richard Jones, National Legislative 
Director for AMVETS. Richard, good to see you. Welcome.

  STATEMENT OF RICHARD JONES, NATIONAL LEGISLATIVE DIRECTOR, 
                             AMVETS

    Mr. Jones. Thank you, Mr. Chairman. Thank you for the 
opportunity to present out testimony.
    Throughout AMVETS' 61-year history in serving American 
veterans, the members of AMVETS have held to the belief that 
America's promises to veterans for the military service needs 
to be recognized and honored as our forbears intended.
    Mr. Chairman, in reading our submitted testimony you will 
see that AMVETS agrees mostly with our colleagues in nearly 
every case, so let me address one point that is a bit 
different, and that is Senator Specter's bill, Senate Bill 614, 
the Veterans Prescription Drug Assistance Act.
    As introduced, the legislation would allow Medicare 
eligible veterans to obtain prescription drugs from VA. It 
would provide a partial remedy to the situation faced by older 
Priority 8 banned veterans from the VA health care system, who 
were banned under the 2003 decree that halted their access to 
medical care. Under this legislation, a veteran who has been 
diagnosed and prescribed medication by a non-VA health care 
provider, could have a prescription filled at VA at a steeply 
reduced price.
    As the committee knows, the Department of Veterans Affairs 
Secretary has banned health care access to approximately 
495,000 veterans who would otherwise have been able to enroll 
except for the January 17, 2003, decision which closed off 
their health care benefits and denied them their earned 
benefits.
    These so-called high-income veterans are outside looking 
in, as some have described them. They remain eligible for VA 
care, but neither Congress nor the administration has supported 
the funding necessary to ensure adequate resources for their 
care. It is important, we believe at AMVETS, to never forget 
who these so-called Priority 8 veterans are, and they are the 
brave Americans who answered our Nation's call, and with 
fortune and God's grace, they returned to this country 
following their service whole and able to continue their lives 
without disabling injury.
    In today's war on terrorism it may be the priority 8 
veteran who takes a post or a stand on a day following a day 
where another has been killed or injured. He puts his life on 
the line knowing he may return injured. But we do not win 
without these priority 8 veterans who stand the ground that we 
hope to liberate. These patriots serve voluntarily, and the 
members of AMVETS believe each of them earns access to the 
health care system through military service. These men and 
women did not fail us in our Nation's time of need, and we 
should not fail them.
    They held in their hands for a brief period in history the 
determination on whether or not we would win or lose the fight 
for freedom. It is the least our Nation can do for those on 
whom America depends to defend her liberty. Senate Bill 614 
offers veterans an opportunity to access earned benefits that 
might otherwise be denied them. To that extent we support the 
bill.
    Thank you, sir, for the opportunity to present testimony 
today on these 10 bills.
    [The prepared statement of Mr. Jones follows:]

       Prepared Statement of Richard Jones, National Legislative 
                            Director, AMVETS

    Chairman Craig, Ranking Member Akaka, and Members of the committee:
    Thank you for the opportunity to present testimony to the Veterans' 
Affairs Committee on legislation subject to this hearing devoted to 
healthcare related matters. My name is Richard Jones, AMVETS national 
legislative director.
    AMVETS is pleased to present our views on the ten bills before the 
committee: The Chairman's proposed legislation called the ``Veterans 
Health Care Improvements Act of 2005''; Ranking Member Akaka's four 
proposals, the ``Mental Health Capacity Enhancement Act of 2005'', the 
``Neighbor Islands Veterans Health Care Improvements Act'', and S. 481, 
a bill to extend combat veterans' post-discharge 2-year period of 
eligibility for VA health care to 5 years, and S. 716, the ``Vet Center 
Enhancement Act of 2005''; Senator Specter's bill, S. 614, the 
``Veterans Prescription Drugs Assistance Act''; Senator Obama's bill 
the ``Sheltering All Veterans Everywhere Act''; and Senator Salazar's 
bills to require VA to publish a strategic plan for long-term care; to 
establish a grant program to provide transportation for rural veterans; 
and the ``Blinded Veterans Continuum of Care Act of 2005''.
    Mr. Chairman, AMVETS has been a leader since 1944 in helping to 
preserve the freedoms secured by America's Armed Forces. Today, our 
organization continues its proud tradition, providing not only support 
for veterans and the active military in procuring their earned 
entitlements but also an array of community services that enhance the 
quality of life for this Nation's citizens.
    Throughout our sixty-one year history, our focus and indeed our 
passion have been to represent the interests of veterans as their 
advocates. In this regard, this committee and our organization share a 
common purpose--we support veterans in their efforts to receive the 
benefits that a grateful Nation intended them to have in recognition of 
their dedicated service to our country.
    As a Nation, we owe veterans an enormous debt of gratitude--for 
their service, their patriotism, and their sacrifices. The benefits to 
which they are legally entitled are not the product of some social 
welfare program, as some might argue. Rather they are yet another cost 
of freedom that unfortunately is too often forgotten.
    As a national veterans service organization, chartered by Congress, 
AMVETS is committed to assisting veterans in their times of need. For 
example, during the past 18 years, we, together with DAV, PVA, and VFW, 
have co-authored a document titled, ``The Independent Budget'' in which 
we identify the funding requirements necessary to support the 
Department of Veterans Affairs.
    We believe that America's promises made to veterans for their 
military service need to be recognized and honored as our forebears 
intended. We believe that veteran's benefits should be provided in a 
timely and compassionate manner. We believe that to do less dishonors 
those whose service in defense of this Nation provides a central 
underpinning for the prosperity and freedoms we all enjoy.
    We appreciate the opportunity you provide to testify on pending 
legislation to enhance, update, and strengthen veterans legislation.

         S. 614, THE VETERANS PRESCRIPTION DRUGS ASSISTANCE ACT

    Mr. Chairman, AMVETS supports the goal of this legislation. As 
introduced, the legislation would allow Medicare-eligible veterans to 
obtain prescription drugs from the Department of Veterans Affairs at 
the significantly discounted cost that VA, as a high-volume purchaser 
of prescriptions medications, is able to secure in the marketplace.
    S. 614 would provide a partial remedy to the situation faced by 
older Priority 8s ``banned'' from the VA healthcare system under the 
2003 decree that halted their access to medical care. Under this 
legislation, a veteran who has been diagnosed and prescribed medication 
by a non-VA healthcare provider could have a prescription filled by VA 
at a steeply reduced price.
    As the committee knows, the Department of Veterans Affairs 
Secretary has banned healthcare access to an estimated 495,000 veterans 
who could have enrolled for care prior to January 17, 2003, when former 
Veterans Affairs Secretary Anthony Principi closed off their healthcare 
benefits and denied them access to VA medical care.
    These so-called high-income veterans or ``Priority 8s'' remain 
eligible for VA care, but neither Congress nor the administration has 
supported the funding necessary to ensure adequate resources for their 
care.
    Currently, veterans are eligible to receive prescription 
medications from the VA only if a VA physician prescribes the 
medication. While insisting that a VA doctor see the patient may not 
seem like too great an imposition, many veterans waiting for a doctor's 
appointment are waiting solely to have a prescription written at VA, so 
it can be filled.
    It is commonly noted that the majority of the Priority 8s have 
entered the system to gain access to the VA prescription drug program. 
For these veterans, once they are under the care of a VA physician, 
they can see dramatically reduced prescription drug costs versus the 
private sector. The current VA prescription cost for enrolled patients 
is $7.00 per prescription for a 30-day supply.
    VA dispenses over 100 million prescriptions yearly to its nearly 5 
million patients, and with this volume, VA can negotiate very favorable 
drug prices. Figures from the National Association of Chain Drug Stores 
claim that for 2001, VA cost per prescription was almost half the cost 
found in the private sector. With the ever increasing cost of 
prescriptions, it is little wonder Priority 8 veterans have availed 
themselves of this benefit after Congress allowed them access to the VA 
system.
    It is important to understand that AMVETS remains deeply 
disappointed in the continuing ban of Priority 8 veterans, which began 
on January 17, 2003. In past years, this committee and its members have 
fought for adequate funding for VA, yet VA has not been adequately 
resourced.
    It is also important to never forget who these so-called Priority 8 
veterans are. These are brave Americans who answered our Nation's 
military call, and with fortune and God's grace they have returned from 
service whole and able to continue their lives without disabling injury 
or illness.
    In today's war on terrorism, the Priority 8 veteran may be one of 
the soldiers, sailors, airmen or marines who stand a post or walk a 
patrol in Iraq or elsewhere across the globe, replacing a fellow 
soldier who was injured or who gave his life in defense of freedom and 
our way of life.
    These patriots serve, voluntarily, and the members of AMVETS 
believe each of them has earned access to the VA healthcare system 
following their military service, as statute provides. For a moment in 
our history they held in their hands the defense of our Nation and its 
cherished freedoms. These men and women did not fail us in our Nation's 
time of need, and we should not fail them. It is the least our Nation 
can do for those on whom America depends to defend her liberty.

           S. 716, THE ``VET CENTER ENHANCEMENT ACT OF 2005''

    Introduced by Ranking Member Akaka, S. 716 would enhance care and 
services provided through Vet Centers. The bill recognizes the need to 
augment these centers especially at a time when there are an increasing 
number of troops returning from Operation Enduring Freedom and 
Operation Iraqi Freedom. The legislation would also increase authorized 
funding for Vet Centers to $180 million from $93 million to help 
returning service members and surviving family members through a 
smoother readjustment period. AMVETS supports this legislation.

 S. 481, A BILL TO EXTEND COMBAT VETERANS POST-DISCHARGE 2-YEAR PERIOD 
              OF ELIGIBILITY FOR VA HEALTH CARE TO 5 YEARS

    Introduced by Ranking Member Akaka, S. 481 would extend policies 
and procedures for providing free health care services and nursing home 
care to combat veterans for a period of 5 years beginning on the date 
of separation from active military service. Under current coverage, 
recently separated service members, including National Guard and 
reserve personnel, are eligible for health care for 2 years. The 
benefit covers all illnesses and injuries except those clearly 
unrelated to military service such as the common cold and injuries from 
accidents that occurred after discharge. Dental services are also not 
included. Unlike other veterans there is no burden to prove they have 
low-income to qualify for VA health care. This is an important change. 
In past conflict, veterans have reported medical problems that have 
been hard to explain or difficult to diagnose. Providing an extended 
period of eligibility, common medical problems may be better diagnosed 
and care more properly applied in a timely manner. AMVETS supports this 
legislation.

S. ----, A BILL TO REQUIRE VA TO PUBLISH A STRATEGIC PLAN FOR LONG-TERM 
                                  CARE

    Senator Salazar proposes legislation to direct VA to develop and 
publish a strategic plan for long-term care. The bill recognizes that 
long-term care was not included in VA's Capital Asset Realignment for 
Enhanced Service (CARES) process and is therefore lacking in 
appropriate consideration. AMVETS supports restructuring the VA system 
through the CARES process, but it must be done with a sharp eye for the 
future and with sound facilities and operations planning. With the 
number of veterans over the age of 85-years old and older expected to 
nearly double over the next decade to 1.3 million from 870,000, AMVETS 
supports this legislation.

S. ----, A BILL TO ESTABLISH A GRANT PROGRAM TO PROVIDE TRANSPORTATION 
                           FOR RURAL VETERANS

    Senator Salazar proposes legislation to establish a grant program 
managed through VA to provide critically needed transportation services 
to veterans in rural remote areas. But there probably are hardly any 
States in the Union with the exception of maybe Rhode Island or 
Connecticut or someplace like that where we do not have at least some 
veterans who are somewhat isolated from VA hospitals and are having to 
go great lengths to get their medical care. Provision of a grant 
program would offer a degree of opportunity to veterans who live in 
these areas to access the health care benefits to which they are 
entitled through honorable military service. AMVETS supports this 
legislation.

    S. ----, THE ``BLINDED VETERANS CONTINUUM OF CARE ACT OF 2005''

    Senator Salazar's proposed legislation would provide critical 
enhancements to the care provided blinded veterans. The bill would 
establish Blind Rehabilitation Outpatient Specialists positions at 
medical centers with Visual Impairment Service Teams (VISTs) with a 
full-time coordinator or with more than 150 currently enrolled legally 
blind veterans. Blind Rehabilitation Outpatient Specialists play an 
important role in helping blinded veterans with a number of living 
skills. In many cases, these blinded individuals achieve successful 
careers despite their blindness. Clearly however, many sensory disabled 
veterans have not had the same opportunities afforded them or the same 
veterans assistance programs. Accordingly, this legislation would 
pursue its goals of enhancing these types of services which combined 
with research, rehabilitation and re-employment can make a critical 
difference in the lives of blinded veterans. AMVETS supports this 
legislation.

 S. ----, THE ``NEIGHBOR ISLANDS VETERANS HEALTH CARE IMPROVEMENTS ACT 
                               OF 2005''

    Senator Akaka's legislation would establish vet centers and clinics 
on certain islands of Hawaii. The bill would also provide staffing 
enhancements to assist in adjustment counseling and related mental 
health services for veterans. It also would establish a mental health 
center in Hilo for the provision of mental health care and treatment. 
In addition, it authorizes construction of a mental health center at 
Tripler Army medical center. The facilities in Hawaii are superb and 
AMVETS supports this legislation.

  S. ----, THE ``MENTAL HEALTH CARE CAPACITY ENHANCEMENT ACT OF 2005''

    The proposed legislation of Senator Akaka would take a number of 
steps to strengthen and improve VA capacity to provide mental health 
care and treatment. The bill would establish patient-staff ratios and 
foster collaborative approaches for primary and mental health care 
providers. The bill would also require VA to have onsite, contract, or 
tele-mental health services available at not less than 90 percent of 
Community-Based Outpatient Clinics. In addition the bill would 
establish a joint VA-DoD workgroup on mental health tasked to study how 
to recognize signs of and to deal with mental health disorders. Under 
the bill, the workgroup would also consider collaborative approaches to 
improve the transition of servicemembers to veterans status, care, and 
treatment. AMVETS supports the goal of improving mental health 
treatments and ensuring the availability of care at outpatient clinics 
and throughout the VA healthcare system.

          S. 1180, ``SHELTERING ALL VETERANS EVERYWHERE ACT''

    Senator Obama has introduced S. 1180, the Sheltering All Veterans 
Everywhere Act, to reauthorize the Homeless Providers Grant and Per 
Diem (GPD) program, the Homeless Veterans Reintegration Program (HVRP), 
and the Grant Program for Homeless Veterans With Special Needs. The GPD 
and HVRP programs sunset in 2006 and VA homeless programs expire later 
this year. The bill also calls for VA to study the interrelationship 
between military sexual trauma and homelessness and effective service 
models for addressing trauma among homeless veterans. AMVETS goal is to 
bring a continuity of commitment to getting homeless veterans back on 
their feet and into the mainstream of our communities. AMVETS clearly 
recognizes that progress is being made, and our members support this 
legislation, to defeat homelessness and help veterans.

     S. ----, THE ``VETERANS HEALTH CARE IMPROVEMENTS ACT OF 2005''

    It is critical that service men and women who have sacrificed for 
their country in the Armed Services be taken care of upon their return 
to home and community. To abandon our responsibilities would bring 
dishonor and send a message that the contributions of our 
servicemembers are not fully appreciated.
    Our First President George Washington warned us to be careful about 
honoring our veterans, ``The willingness with which our young people 
are likely to serve in any war, no matter how justified, shall be 
directly proportional to how they perceive the Veterans of earlier wars 
were treated and appreciated by their Nation.''
    The ``Veterans Health Care Improvements Act of 2005,'' introduced 
by Chairman Craig, would undertake a number of changes in veterans 
healthcare. Section 2 of this legislation completes the exemption from 
hospice co-payments as enacted last year. It eliminates co-payment for 
veterans using outpatient hospice care as well as previously enacted 
co-payment for institutional hospice care. AMVETS supports this section 
of the bill. AMVETS also supports the elimination of co-payments for 
former POWs. However, we oppose the elimination of VA requirement for 
maintaining a certain nursing home bed level, also contained in this 
section. AMVETS supports improvements in the reimbursement of expenses 
for veterans using emergency room facilities, and we support as well 
Section 5 designed to care for newborn children of women veterans. It 
is also appropriate to enhance payer provisions for health care 
furnished to certain children of Vietnam veterans for Spina Bifida and 
associated disabilities. Section 7 authorizes appropriations for the 
homeless providers grant and per diem program. This is an important and 
competitive program. And AMVETS is pleased to support this 
authorization. AMVETS also supports the sections dealing with 
improvements in tele-health, marriage therapists, and mental health 
services. AMVETS also supports the bill's authorization of additional 
VA personal to expand National Guard outreach programs. The upward 
spiral of Guard deployment over the recent past dictates action to 
improve understanding of benefits available to those who serve in our 
National Guard.
    This concludes AMVETS testimony. Again, thank you for the 
opportunity to testify on these important bills, and thank you as well 
for your continued support of America's veterans.

    Chairman Craig. Gentlemen, thank all of you for being here 
and providing testimony and working with us as we move some of 
this legislation through. Each of your organizations opposes 
the provision in S. 1182 that would repeal the bed-level 
capacity requirement, but each of you has some differing reason 
as to why you are against the legislation, and I frankly 
appreciate the concerns that all have expressed.
    Would each of you agree that having some defined package of 
long-term care options is better than a bed-level requirement? 
Would that be a more welcome alternative? Response?
    Mr. Cullinan. Mr. Chairman.
    Chairman Craig. Dennis, please.
    Mr. Cullinan. If a policy were put in place that would 
provide access to veterans requiring long-term care, that would 
certainly be an improvement over the current situation. But the 
fact is that through the years this idea of eliminating that 
census has come up over and over again. It has always been 
primarily budget driven, and our concern is that right now in 
absence of some sort of defining policy providing proper access 
to veterans to long-term care, it would simply allow VA to 
divest itself of its long-term care resources, and we strongly 
suspect that any resources that would be freed up through this 
action would not go to VA and help pay for veterans health 
care. It would be lost in the general treasury fund.
    Chairman Craig. Further comment?
    Mr. Mooney. Senator, I would like to note that VA is only 
required statutorily to provide long-term care to veterans who 
are 70 percent and greater service connected disabled. Even 
that does not automatically mean that a veteran will be placed 
in a nursing home. They are assessed by a geriatric assessment 
team, and they are given the services that the veteran wants in 
the least restrictive, least costly environment.
    As I said in my testimony, VA has not conducted a 
comprehensive long-term care needs assessment. There have been 
two reports in the last 20 years that predicted this problem, 
and no action has been really taken on any of them, on either 
of them. We think before VA starts dismantling its long-term 
care infrastructure, especially as regards these frail elderly 
veterans who tend to have more problems than the average 
nursing home resident, we need to--the VA needs to know what 
their requirements will be before they start taking apart the 
system that exists. I think Congress in 1997, when they 
mandated this, had a sense of that, that they knew this wave of 
elderly was coming, and they told VA, you need to maintain this 
capacity. VA still does not know what they are going to need, 
and we think until they do, they should comply with the Mill 
Bill.
    Chairman Craig. Carl.
    Mr. Blake. Mr. Chairman, I want to refer to something that 
Mr. Mooney said about 70 percent requirement for institutional 
long-term care. That points out the fact that those individuals 
who would be getting institutional long-term care are the most 
severely disabled, and in most, maybe not all, but in most 
cases, the best care that they will get is in the institutional 
setting. That is not to say that we do not support the idea of 
non-institutional care as well. That kind of parallels a common 
held belief of PVA that we should do everything to help a 
veteran become independent or seek the best independent living 
possibilities for him or her.
    However, I would say that it will be better if you had a 
combination of the two, and not to just close off what their 
current infrastructure is by eliminating the bed and staffing 
requirements. The unfortunate thing about this is we deal with 
the same type of issue with regards to spinal cord injury 
centers, and we have an agreement with the VA that the VA will 
maintain a certain bed and staffing level for SCI centers, and 
that is yet another area where they fail to meet their 
requirements. And every month we go out and evaluate SCI 
centers, and yet it is a continuing process. But I do not think 
we should push off the responsibility from the VA so that they 
can just focus solely on what appears to be a move toward non-
institutional care.
    Mr. Jones. Sir, thank you for the question. We look at the 
most recent proposal on the 2006 budget from the administration 
which suggests cutting per diem payments to State nursing 
homes, and we just wonder where are they headed?
    Chairman Craig. Well, they are not headed there.
    Mr. Jones. Well, they are not headed there because Congress 
has wisely seen----
    Chairman Craig. They thought they were. Congress told them 
no.
    Mr. Jones. Absolutely, and we are so pleased with that 
because it was headed in the wrong direction. We think this is 
wrong also. Regarding 1998 bed status for a nursing home, we 
face a period now where we expect to double the population of 
those over the age of 85 over the next period of 8 years. As we 
look to doubling the population over the next few years, as we 
look to reduced per diem payments, we need to have wisdom again 
and retain what Congress had put in place before. It is simply 
wrongheaded and wrong directional.
    Chairman Craig. Thank you. My time is up, and I think 
Senator Thune is moving to depart. He has been quiet all 
through this, in and out, and I did want to recognize his 
presence.
    Senator, do you have any questions of this panel?

 OPENING STATEMENT OF HON. JOHN THUNE, U.S. SENATOR FROM SOUTH 
                             DAKOTA

    Senator Thune. Mr. Chairman, thank you to you for holding 
this hearing, and to the panel members for the good work that 
you do representing our Nation's veterans, and this is an 
important subject, the various pieces of pending legislation I 
look forward to having a vigorous debate about that, about 
things that we can do to improve the overall quality of health 
care to America's veterans.
    I think it is really important, as we do that, that we do 
it in a very open manner. I have got a bill as well, which I 
would at some point like to have considered. Right now it is 
over at the Finance Committee because it deals with Medicare 
and they have jurisdiction, and the Finance Committee is very 
particular about their jurisdiction on these issues, but it has 
got a number of other provisions that I also believe would fall 
under this committee's jurisdiction, and some things that 
hopefully we will get a chance to have all of you--I know some 
of you have already reviewed some of those things, and get a 
chance to comment on as we try to put together a package, a 
proposal that will do a better job of addressing the health 
care needs of our Nation's veterans.
    But my view is it is important that we get that consensus, 
that we put together something that will address the needs, 
especially as we have more veterans coming home from Operation 
Enduring Freedom and Operation Iraqi Freedom. We obviously owe 
them a great debt of gratitude and need to make sure that we 
are giving them access to the very best care possible.
    So thank you for holding the hearing.
    Thank you to your organizations, and again for the good 
work that you do on behalf of America's veterans, and we look 
forward to working with you on a consultive basis as 
legislation moves forward so that we can get the very best 
possible product put in place for our Nation's veterans.
    I will look forward to discussing these issues further.
    I have to go to a meeting now to talk about BRAC, which is 
another issue of great importance. So thank you all very much.

 Prepared Statement of Hon. John Thune, U.S. Senator from South Dakota

    Good morning Chairman Craig and Ranking Member Akaka, Thank you for 
holding today's hearing on pending veterans' healthcare legislation. I 
look forward to a productive hearing. Before I begin I would like to 
welcome Secretary Nicholson and Undersecretary Perlin back to the 
committee. I know your schedules are busy and I thank you for taking 
the time to work with us in providing the best possible healthcare for 
America's Veterans. I would also like to welcome the representatives of 
the Veterans Service Organizations, who often serve as the voice of 
America's veterans before the committee. Thank you for your service.
    Veterans' healthcare is one of the most important issues facing our 
country. I am glad to see this committee addressing the matter in an 
open bipartisan manner. My concern regarding veterans' healthcare is 
the reason I introduced S. 963, The Veterans' Health Care and Equitable 
Access Act of 2005. I believe there is a growing need to address 
veterans' healthcare issues and it must be done without the affects of 
politics as usual. All too often, the issue of veterans' healthcare is 
exploited for its emotional value and used for partisan purposes. 
Neither veterans nor this committee are served by such baseless 
actions.
    America's men and women are returning home from Operation Enduring 
Freedom and Operation Iraqi Freedom and we owe them a debt of gratitude 
and access to the best care possible. Many of our returning veterans 
will have mental and physical wounds that need to be healed. I applaud 
Chairman Craig and Ranking Member Akaka for holding this hearing and I 
look forward to reviewing the pending legislation, both Democratic and 
Republican, whose sole aim is to fulfill America's promise to our 
veterans.
    Thank you Mr. Chairman, I yield back.

    Chairman Craig. Senator, thank you very much. And knowing 
the situation in your State with BRAC, I suspect that is a 
higher priority.
    Senator Thune. This is a high priority as well.
    Chairman Craig. Yes, it is.
    A couple more question of this panel. Let me tell you where 
I am coming from when it relates to static numbers of beds and 
locations and facilities. In another life, just a year ago, I 
chaired the Special Committee on Aging, spent a good deal of 
time and consistently heard from a non-vet population though, 
that they wanted to receive their services at home, near home, 
around home, not at some distant location that the compensation 
and/or the provider might take them. And because we have these 
expanding and then declining populations, and we also have 
mobility today in our population like we have never had it 
before, I thought it was reasonable and appropriate that we 
ought to be looking a little bit differently than we have.
    And possibly to reassure your concern, we ought to get the 
horse in front of the cart. We ought to see what we could do 
and/or look at what the administration is proposing as it 
relates to long-term care before we propose to tear down that 
which we have.
    But I do believe there is some sensibility to looking at 
ways to deliver service that our not static and locational and 
cannot be moved, but are tied to the veteran wherever he or she 
may be. And I appreciate, Carl, some of the unique care 
characteristics that are out there with certain veterans, that 
is not to say that they could not be cared for in a specialized 
institutional setting that is non-veteran or non-VA in its 
character. That does not mean that we would not provide some of 
that also.
    Anyway, those are some of my concerns, and why I felt it 
was appropriate to bring this to the forefront and have a 
healthy debate with all of us about it.
    I think one of the great frustrations we have today--and it 
is part of what we are examining, what the past administration 
of the Veterans Administration did and is still ongoing--is to 
look at some of these large institutional facilities today that 
cost hundreds if not millions of dollars a year to maintain, 
that are located over here and the veteran is over here, and 
how we do not get ourselves locked into that again. If we were 
to meet the true needs of long-term care veterans today in this 
bubble that we are in, we would be pouring an awful lot of 
concrete to probably have it emptied 10 years down the road or 
at least maybe not as necessary.
    So it is my concern that we look at a variety of options of 
service--and I do not blame you for buying off on something you 
cannot see, feel or touch in your advocacy for our veterans. So 
I think that is where I am coming from and where I will 
continue to come from as we pursue this issue. I think it is an 
important one, because I think long-term health care is 
extremely important. That is why I placed the priority on it in 
this legislation.
    Any of you wish to comment further on that general area?
    Carl.
    Mr. Blake. Senator, I would like to thank you very much.
    I think some of this goes to the heart of what Senator 
Salazar's bill is about. I think we can make assumptions of 
what the VA plans to do based on budget recommendations and 
other things that we see going on, but until we have a clear 
strategic plan that has been outlined by the VA, a lot of this 
is just rhetoric and us voicing our concern and you doing the 
same, and trying to address an issue that we do not really know 
what the clear facts are yet.
    So I think we cannot emphasize enough the need to know what 
the VA's strategic plan for long-term care is going to be. Once 
we have that in our hands, then we can proceed from there. That 
will not probably change the concerns that I have expressed, 
but at least it gives us a framework for something to work 
from.
    Chairman Craig. Thank you.
    Don.
    Mr. Mooney. Senator Craig, I would like to submit that the 
elderly health care crisis is already affecting VA in other 
ways. It was mentioned by Secretary Nicholson or one of the 
other--it might have been Dr. Perlin--that it takes a year to 
schedule an elective surgery in some places in VA, and part of 
that reason is because so many elderly veterans are using VA in 
the intensive care units.
    Dr. Kussman once related to me that there is a bottleneck 
of aging veterans in VA's intensive care units, and that VA, it 
is well-known that veterans die in VA intensive care units at 
about 4 times the rate they do in a standard private sector 
hospital. That is how the population is affecting VA's capacity 
right now. So it is already here.
    Chairman Craig. Adrian, comment?
    Mr. Atizado. Yes, sir. Thank you. Looking back at the 
testimony that DAV provided on the capacity provision in the 
Millennium Health Care Act, I get a sense that not only--
without reading our testimony but the testimony of the other 
organizations as well as VA, I believe that a major concern 
that had driven the capacity law to be passed, was a certain 
amount of protection, a certain amount of responsibility that 
must be kept by VA. DAV is certainly sensitive to the veterans' 
desires as far as where they want to receive care. We do know 
VA has made many strides in non-institutional settings, and 
they continue to do so both in the lab as well as practical 
work.
    I would say that the capacity law represents more than just 
the number of beds, it represents exactly that the protection 
of a service, a needed service that veterans will require in 
the near future, which has its vulnerabilities based on the 
environment the VA operates in, under funded system, different 
populations moving all over the place and the kind of care that 
VA can provide, both institutional and non-institutional. And I 
think that a certain amount of reassurance has to be had to the 
veteran community before we do away with this law.
    Chairman Craig. Well, gentlemen, I appreciate that obvious 
concern and heartfelt comment as it relates to this type of 
care and the importance of it, and we will continue to pursue 
that and work with you and the Veterans Administration to see 
if we might not clarify that vision a bit.
    And I think, Adrian, what you are talking about, at least 
it came to my mind as you were relating, if beds are a target 
and a symbol, and not a structure, but a level of care required 
to be provided, that may be a definitional term or that may in 
itself be a way of an indicator. My great frustration today is 
still getting into the business of pouring a lot of concrete 
and large capital expenditures, only to have them obsolete a 
very few years down the road in a very dynamic environment. And 
therefore focusing on service and delivery of service under 
certain criteria, and how do veterans become assured that 
Congress and the VA are going to provide that? How do we tag 
that provision in a way that is ongoing based on a certain 
level of requirement?
    I think we have all learned some lessons, and that is that 
you can build a facility and you can turn the lights on, but 
depending on budget requirements, it might not mean you allow 
access through the front door. And so you sometimes have large 
capital expenditures setting out there, but by criteria of 
Congress and VA, depending on certain availabilities of 
resources, the door may be limited, and those who can access 
it, and so I am wrestling through some of these issues as we 
work on them with the administration and certainly with all of 
you to see where we get.
    I want to thank you all sincerely for being here today. I 
appreciate it. I am going to probably submit some additional 
questions to you as it relates to Senate Bill 614. I can 
understand your frustration about it, what it may or may not 
mean as it relates to pharmaceutical drugs and gaining access 
to them, or the reaction to them. We thought it was going to be 
unanimous opposition. It was not quite. But I think there are 
some legitimate underlying concerns. The question is how do you 
address it and what is the impact of it on the existing service 
because we know that one has been relatively successful.
    Thank you all very much. As I said, the record will remain 
open as we finalize this testimony, and the committee will 
stand adjourned. Thank you.
    [Whereupon, at 12:05 p.m., the committee was adjourned.]

                            A P P E N D I X

                              ----------                              

Response to Written Questions Submitted by Hon. Senator Daniel K. Akaka 
                    to Secretary James R. Nicholson

    Question 1. In your statement before the committee, you stated that 
the increased services required by the Vet Center Enhancement Act will 
require only an additional $8 million and that ``there is no necessity 
or justification'' for authorizing the amount of funding included in 
the bill. Can you please elaborate on why you feel such a small 
increase is needed when in 2004, Vet Centers cared for 9,597 OEF/OIF 
veterans, and projections for 2005 are that Vet Centers will see 12,656 
OEF/OIF veterans?
    Answer. The $8 million referenced above in Department of Veterans 
Affairs' (VA) statement to the committee was an estimate based on 
projections of the cost of the additional services this bill would 
direct.
    The Vet Center program's mission is central to VA and its operation 
is extremely cost effective. Approximately 80 percent of the annual Vet 
Center program budget of $89 million for fiscal year (FY) 2005 goes 
directly into the care of veteran and family members. This covers the 
cost of 206 community-based Vet Centers and 943 staff.
    In February 2004, Veterans Health Administration (VHA) authorized a 
staff augmentation program for the centers to enhance its ability to 
outreach to the veterans returning from combat operations in Operation 
Enduring Freedom (OEF) and Operations Iraqi Freedom (OIF). 
Specifically, the Vet Centers have hired and trained a cadre of up to 
50 new outreach workers from among the ranks of recently separated OEF 
and OIF veterans at targeted Vets Centers. These 50 new staff members 
were hired on 3-year term appointments. Including the add-on for this 
initiative, the actual program operating budget for fiscal year 2005 is 
$94 million.
    In March 2005, based upon the demonstrated success of the Global 
War on Terrorism (GWOT) veteran outreach initiative to locate and 
inform new returning veterans, VHA authorized the Vet Centers to hire 
an additional 50 GWOT veterans to further enhance the program's 
outreach capacity. Additionally, VA is in the process of converting the 
initial 50 GWOT veteran outreach counselors to career status. The 
latter action will increase the Vet Center program's annual budget by 
$2.5 million starting in fiscal year 2006. Including the 3-year term 
cost for the salaries of the second 50 GWOT new hires, this initiative 
will cost $5 million a year for fiscal year 2006 through fiscal year 
2008. Also, in November 2004, VHA approved of a plan to establish a new 
four-person Vet Center in Nashville, TN. This will increase the number 
of Vet Centers to 207, and increase the program's recurring base by 
$393,000 annually. The first full year funding for the new Vet Center 
will be realized in fiscal year 2006.
    In fiscal year 2004, the Vet Centers system-wide served 125,737 
veterans and provided slightly more than one million visits to veterans 
and family members. For the first two quarters of fiscal year 2005, the 
Vet Centers system-wide served 76,567 veterans and provided more than 
half a million visits to veterans and family members. A continuation of 
this rate of service delivery for the remainder of the year will 
produce 153,134 veterans served and more than one million visits 
provided. This represents an increase in veterans seen of 21.7 percent 
while maintaining the same number of visits.
    Following Secretarial authorization in the wake of hostilities in 
Afghanistan and Iraq, the Vet Centers commenced in 2003 to actively 
outreach and provide readjustment counseling to the new cohort of war 
veterans returning from OEF and OIF and their family. To date the Vet 
Centers have provided substantive services to over 19,500 veteran 
returnees from OEF and OIF. Given a continuation of the current rate of 
service delivery, the Vet Centers collectively will have served over 
25,000 OEF/OIF veterans cumulative by the close of fiscal year 2005. 
For fiscal year 2005, this amounts to over 14,000 OEF/OIF veterans 
served. This represents approximately 9 percent of the projected Vet 
Center workload for 2005.
    Following Secretarial authorization in August 2003, the Vet Centers 
initiated a program to provide bereavement counseling to military 
family members whose loved ones were killed while on active duty in 
Afghanistan and Iraq. Since inception of the program, over 400 cases of 
active duty, military-related deaths have been referred to the Vet 
Centers for bereavement counseling, resulting in services to over 600 
family members. This is a new component of the Vet Center mission.
    Question 2. S. 1182, the Veterans Health Care Improvement Act of 
2005, would eliminate the prohibition in Title 38, Section 8110(a)(5) 
against using VHA appropriated funds for cost-comparison studies in 
public-private competitions without specific authorization from 
Congress. Please explain your views on this provision.
    Answer. Title 38 U.S.C. Sec. 8110(a)(5) prohibits the Department of 
Veterans Affairs (VA) from using health-care appropriations to fund ``. 
. . any activity in connection with, the conduct of any study comparing 
the cost of the provision by private contractors with the cost of the 
provision by the Department of commercial or industrial products and 
services for the Veterans Health Administration unless such funds have 
been specifically appropriated for that purpose.'' The provision in 
question has had the effect of prohibiting VA from conducting cost-
comparison studies to determine whether it would be more cost-effective 
for VA to directly furnish services, or obtain them by contract. The 
President's Management Agenda stipulates that agencies increase their 
focus on competitive sourcing and expand the number of activities 
subjected to cost comparisons with commercial sources. This cannot be 
accomplished with the prohibition in place.
  

                                  
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