[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
THE U.S. DEPARTMENT OF VETERANS AFFAIRS
BUDGET REQUEST FOR FISCAL YEAR 2008
=======================================================================
HEARING
before the
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 8, 2007
__________
Serial No. 110-1
__________
Printed for the use of the Committee on Veterans' Affairs
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COMMITTEE ON VETERANS' AFFAIRS
BOB FILNER, California, Chairman
CORRINE BROWN, Florida STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine DAN BURTON, Indiana
STEPHANIE HERSETH, South Dakota JERRY MORAN, Kansas
HARRY E. MITCHELL, Arizona RICHARD H. BAKER, Louisiana
JOHN J. HALL, New York HENRY E. BROWN, JR., South
PHIL HARE, Illinois Carolina
MICHAEL F. DOYLE, Pennsylvania JEFF MILLER, Florida
SHELLEY BERKLEY, Nevada JOHN BOOZMAN, Arkansas
JOHN T. SALAZAR, Colorado GINNY BROWN-WAITE, Florida
CIRO D. RODRIGUEZ, Texas MICHAEL R. TURNER, Ohio
JOE DONNELLY, Indiana BRIAN P. BILBRAY, California
JERRY McNERNEY, California DOUG LAMBORN, Colorado
ZACHARY T. SPACE, Ohio GUS M. BILIRAKIS, Florida
TIMOTHY J. WALZ, Minnesota
Malcom A. Shorter, Staff Director
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Veterans' Affairs are also
published in electronic form. The printed hearing record remains the
official version. Because electronic submissions are used to prepare
both printed and electronic versions of the hearing record, the process
of converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
__________
February 8, 2007
Page
The U.S. Department of Veterans Affairs Budget Request for Fiscal
Year 2008...................................................... 1
OPENING STATEMENTS
Hon. Bob Filner, Chairman, Full Committee on Veterans' Affairs... 1
Prepared statement of Chairman Bob Filner.................... 62
Hon. Steve Buyer, Ranking Republican Member, Full Committee on
Veterans' Affairs.............................................. 3
Prepared statement of Congressman Buyer...................... 63
Hon. Michael H. Michaud, Chairman, Subcommittee on Health........ 7
Hon. John J. Hall, Chairman, Subcommittee on Disability
Assistance and Memorial Affairs................................ 8
Hon. Phil Hare................................................... 8
Hon. Ginny Brown-Waite........................................... 9
Prepared statement of Congresswoman Brown-Waite.............. 67
Hon. Ciro D. Rodriguez........................................... 9
Hon. John T. Salazar............................................. 9
Prepared statement of Congressman Salazar.................... 67
Hon. Doug Lamborn................................................ 10
Prepared Statement of Congressman Lamborn.................... 67
Hon. Joe Donnelly................................................ 10
Hon. Gus M. Bilirakis............................................ 10
Prepared statement of Congressman Bilirakis.................. 66
Hon. Zachary T. Space............................................ 10
Hon. Timothy J. Walz............................................. 11
Prepared Statement of Congressman Walz....................... 68
Hon. Henry E. Brown, Jr., prepared statement of.................. 65
Hon. Jeff Miller, prepared statement of.......................... 65
Hon. Corrine Brown, prepared statement of........................ 68
Hon. Cliff Stearns, prepared statement of........................ 69
WITNESSES
U.S. Department of Veterans Affairs, Hon. R. James Nicholson,
Secretary; accompanied by Michael J. Kussman, M.D., MS, MACP,
Acting Under Secretary for Health, Veterans Health
Administration; Hon. Daniel L. Cooper, Under Secretary for
Benefits, Veterans Benefits Administration; Hon. William F.
Tuerk, Under Secretary for Memorial Affairs, National Cemetery
Administration; Paul J. Hutter, Acting General Counsel; Hon.
Robert J. Henke, Assistant Secretary for Management; and Hon.
Robert T. Howard, Assistant Secretary for Information
Technology and Chief Information Officer....................... 11
Prepared statement of Secretary Nicholson.................... 70
______
American Legion, Paul A. Morin, National Commander............... 46
Prepared statement of Mr. Morin.............................. 82
American Veterans (AMVETS), David G. Greineder, Deputy National
Legislative Director........................................... 52
Prepared statement of Mr. Greineder.......................... 79
Disabled American Veterans, Brian Lawrence, Assistant National
Legislative Director........................................... 49
Prepared statement of Mr. Lawrence........................... 93
Paralyzed Veterans of America, Carl Blake, National Legislative
Director....................................................... 44
Prepared statement of Mr. Blake.............................. 97
Veterans of Foreign Wars of the United States, Dennis M.
Cullinan, Director, National Legislative Service............... 50
Prepared statement of Mr. Cullinan........................... 99
Vietnam Veterans of America, John Rowan, National President...... 53
Prepared statement of Mr. Rowan.............................. 105
MATERIAL SUBMITTED FOR THE RECORD
Pre-Hearing Questions and Responses for the Record:
Hon. Bob Filner, Chairman, Committee on Veterans' Affairs, to
Hon. R. James Nicholson, Secretary, U.S. Department of
Veterans Affairs, letter dated January 25, 2007............ 111
Post-Hearing Questions and Responses for the Record:
Written questions for the record submitted to the VA follow:
Hon. Bob Filner, Chairman, Committee on Veterans' Affairs, to
Hon. R. James Nicholson, Secretary, U.S. Department of
Veterans Affairs, letter dated March 5, 2007............... 130
Hon. John Salazar to Hon. R. James Nicholson, Secretary, U.S.
Department of Veterans Affairs, questions dated February 8,
2007....................................................... 132
Hon. Steve Buyer, Ranking Republican Member, Committee on
Veterans' Affairs, to Hon. R. James Nicholson, Secretary,
U.S. Department of Veterans Affairs, letter dated February
20, 2007................................................... 133
Hon. Henry E. Brown, Jr., to Hon. R. James Nicholson,
Secretary, U.S. Department of Veterans Affairs, questions
dated February 8, 2007..................................... 138
Hon. Gus M. Bilirakis to Hon. R. James Nicholson, Secretary,
U.S. Department of Veterans Affairs, questions dated
February 8, 2007........................................... 139
Hon. John Boozman, Ranking Republican Member, Subcommittee on
Economic Opportunity, to Hon. R. James Nicholson,
Secretary, U.S. Department of Veterans Affairs, questions
dated February 8, 2007..................................... 140
Hon. Ginny Brown-Waite to Hon. R. James Nicholson, Secretary,
U.S. Department of Veterans Affairs, questions dated
February 8, 2007........................................... 145
Hon. Michael R. Turner to Hon. R. James Nicholson, Secretary,
U.S. Department of Veterans Affairs, questions dated
February 8, 2007........................................... 147
Reports:
``The Fiscal Year 2008 Independent Budget for the Department
of Veterans Affairs''...................................... 148
``Soldiers Returning from Iraq and Afghanistan: The Long-term
Costs of Providing Veterans Medical Care and Disability
Benefits, Faculty Research Working Papers Series,'' by
Linda Bilmes, John F. Kennedy School of Government, Harvard
University, January 2007................................... 285
THE U.S. DEPARTMENT OF VETERANS AFFAIRS
BUDGET REQUEST FOR FISCAL YEAR 2008
----------
THURSDAY, FEBRUARY 8, 2007
U.S. House of Representatives,
Committee on Veterans' Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 9:30 a.m., in
Room 334, Cannon House Office Building, Hon. Bob Filner
[Chairman of the Committee] presiding.
Present: Representatives Filner, Brown of Florida, Snyder,
Michaud, Herseth, Mitchell, Hall, Hare, Salazar, Rodriguez,
Donnelly, McNerney, Space, Walz, Buyer, Stearns, Moran, Baker,
Brown of South Carolina, Miller, Boozman, Brown-Waite, Turner,
Lamborn, Bilirakis.
OPENING STATEMENT OF CHAIRMAN FILNER
The Chairman. Good morning. This hearing of the House
Committee on Veterans' Affairs is in order. Thank you all for
being here. I thank the Members of the Committee.
We are here to welcome the Secretary of the VA and your
staff, and we appreciate your spending the morning with us,
maybe the afternoon, maybe all night. I do not know. But thank
you for being here.
You have characterized the budget for fiscal year 2008, Mr.
Secretary, as a ``landmark budget,'' and we certainly
appreciate that you are submitting a budget that calls for an
increase for veterans' healthcare, unlike the budget that was
submitted 2 years ago.
And I believe it does give us a basic framework from which
to begin our analysis as to whether the VA's budget submission
will meet the needs of veterans in the coming fiscal year.
Of course, our job as a Committee is to make sure that as
we follow this ``landmark budget'', we do not get off course
and lose our way.
You have requested an increase for VA medical care of $1.9
billion over the level provided in the Joint Funding Resolution
for 2007. That is a 6 percent increase.
We did provide this fiscal year a 12 percent increase over
2006. Both the Independent Budget that we will discuss in the
panel after you, and The American Legion, both recommend more
than a 12 percent increase for fiscal year 2008.
The Vietnam Veterans of America recommend substantially
more. So I look forward to your explanation as to why you
believe the 6 percent increase will suffice for our veterans.
Your budget submission also states that $1.4 billion of
your increase for medical care is attributable to inflation.
Once this is factored in, the recommended increase leaves
precious few dollars to meet the increasing needs of our
nation's veterans.
And although the waiting list for new enrollees has indeed
declined, and you are obviously to be applauded for that and we
all appreciate that, I believe that no veteran should have to
wait for healthcare appointments simply because the VA does not
have the resources to care for that veteran. I would hope that
you can assure the Committee that the budget request before us
has the dollars to address this problem.
Last year, your budget request claimed $197 million in
efficiencies for a total of $1.1 billion. This year's budget
submission also claims ``clinical and pharmacy cost
avoidance,'' in your words.
Our Committee would like to know whether you believe you
will achieve these efficiencies for 2007 and what exactly are
your dollar estimates as to your efficiencies in these two
areas for 2008.
I see that you are requesting an additional $56 million for
a total of $360 million for your mental health initiative. Your
submission also claims that the VA plans to spend $3 billion
for mental health services and, yet, the GAO reported last
November that you failed to fully allocate the resources you
pledged in 2005 and 2006 for that mental health initiative.
In light of this report, I hope that the VA will fully
allocate the $306 million for this initiative in 2007 and $360
million for 2008, and I hope you can assure us of that. And I
would like to make sure you do answer the question, ``Do you
currently have the resources you need to address the mental
healthcare needs of our veterans, especially in light of the
significant mental issues that seem to plague those coming back
from Iran and Afghanistan.''
I have to note, and I know many on this Committee agree, if
not all, that we are disappointed that you have once again
brought forward legislative proposals as part of your budget
submission. Instituting enrollment fees and increasing pharmacy
co-payments have been rejected, as you know, year after year by
this Congress.
Last year, you claimed that the enactment of these
proposals would reduce your need for discretionary healthcare
dollars. This year, your proposals are deemed mandatory
spending and are taken out of your own mandatory spending
allocation.
I hope you will explain to this Committee why you have
offered these proposals again and the policy reasons for
deeming the expected receipts from these proposals mandatory
dollars.
We both agree, we all agree, that the VA is facing an ever
greater claims processing crisis--over 600,000 backlogged as of
today. In light of this, I would expect your budget submission
to aggressively request additional dollars to address this
growing problem.
But as I read the budget, and correct me if I am wrong when
you testify, I see that your request for General Operating
Expenses Account, which funds the claims processors at the
heart of the process, is close to $9 million less than the
amount provided for in the 2007 funding resolution.
I would like to know what steps you are taking to meet that
challenge and why the VA has not requested a sizable increase
in this account to address the claims backlog.
Your VA research request seeks less than you will receive
under this year's Joint Funding Resolution. I think you should
be requesting at least an $18 million increase just to keep up
with inflation. This is especially true when, once again, you
are seeking more resources from other Federal sources and the
budget for NIH is going to be static.
I look for a full explanation of your information
technology request, including transfers from other accounts. We
have to ensure that the VA is moving in the right direction in
Information Technology and that the funding level you receive
in 2008 will lead to better security, more innovation, and
fewer incidents like the one that occurred in Birmingham,
Alabama last week.
I know that you are seeking increases in both the Major and
Minor Construction accounts, and I am sure we will all be
interested in learning how you selected the projects for this
request.
There is much work to be done to ensure that the VA has the
funding it needs in the coming fiscal year and to ensure that
the VA spends the resources it receives properly and
diligently.
Mr. Secretary, we look forward to hearing from you this
morning, to work closely with you to make sure that the needs
of our veterans, especially in the midst of war and those
returning from Iraq and Afghanistan and the veterans from our
previous conflicts, are met.
I would like to just add a personal note for my colleagues.
As the Secretary and I have met and talked together on more
than a few occasions since the change in the Congress, I
appreciate that dialog. I appreciate your keeping me in touch
with things that need to be touched upon. We will be traveling
together to see some things in the VA that we want to do
together. I think we have set up a good working relationship,
Mr. Secretary, and I appreciate the response to the new
situation, the new majority in this Congress.
And I want to assure our colleagues on both sides of the
aisle that we have, I think, established the basis of a
relationship that we will be working together and that we will
seek what is best for our veterans.
I think your commitment does not need to be questioned on
that, Mr. Secretary, and this Committee will work with you to
ensure that every one of our veterans is cared for properly.
I will yield to the Ranking Republican, Mr. Buyer, for a
statement.
[The prepared statement of Chairman Filner appears on p.
62.]
OPENING STATEMENT OF HON. STEVE BUYER
RANKING REPUBLICAN MEMBER
FULL COMMITTEE ON VETERANS' AFFAIRS
Mr. Buyer. Thank you, Mr. Chairman, and good morning. I
would like to welcome everyone to the first hearing of the
110th session of Congress.
And, wow, Mr. Chairman, you have come a long way from
sitting in this chair demanding that the Secretary resign 9
months ago. So I am glad you two have been able to work this
out.
For housekeeping, before we move into these questions, I
have sent you a letter, Mr. Chairman, requesting next week for
us to bring in the VSOs and the MSOs to go over the budget.
As you know, last year when we ended the joint hearings, we
opened up the unprecedented access for the VSOs and the MSOs so
we could get all of their testimonies prior to doing the budget
views and estimates. And we also then did the look back, look
ahead. So never before had the VSOs and the MSOs had such
access to this Committee, and I am hopeful that you will give
consideration to the request.
Secondly, you still have not submitted to the minority a
proposed budget for the operations of this Committee, and so
you and I need to start out on a bipartisan basis and you do
that by talking about the budget of this Committee. So I am
still utterly dumbfounded, and so I still await that draft
budget so you and I can move on with business.
Mr. Secretary, I am glad you could be with us today to
share with the Committee the President's proposed budget for
2008. I commend you yet again for embracing the challenge of
improving the VA's budget process.
Building on last year's progress, when we had that hearing
to examine the budget modeling and you disclosed the shortfall
on a budget that you had inherited, you said you were going to
take ownership of that budget, and you did that. And you are a
man of your word, and you submitted to us a pretty big budget
increase.
Obviously with the challenges last fall, the Senate not
completing its work, I compliment the Democrat majority in
working with the budget that we had last year and we got that
CR. We are interested in your input from us.
I am sure you have had some management challenges over
those last four months and what impact that is going to have
upon your budget and whether or not you expect any carry-over
funds into next year would be interesting to find out.
Mr. Secretary, as you observe your second anniversary as
the chief steward of our nation's veterans, we can look back
and note it has been a year of challenges and successes. I
thank you for your willingness to squarely meet the challenges
and commend you on your successes as you work with all Members
of this Committee.
Based on the priorities in the last Congress, this
Committee focused on the disabled veterans, those with special
needs, and the indigent veterans. We passed major legislative
initiatives, Public Law 109-461, the ``Veterans Benefits,
Health Care, and Information Technology Improvement Act.'' This
bill was the result of a strong bipartisan effort of this
Committee in concert with our colleagues in the Senate. They
brought issues to the table. We brought issues to the table.
And the democratic process worked.
We also listened to 20 VSOs and MSOs and incorporated many
of their suggestions. We authorized 24 major construction
projects in 15 States, approved continued leasing of eight
medical facilities and required VA to explore options for
construction of a new medical facility in San Juan, Puerto
Rico.
With regard to our returning Iraq and Afghanistan veterans,
we added 65 million to increase the number of clinicians
treating post-traumatic stress disorder and improve their
training. Public Law 109-451 further authorized spending for
collaboration in PTSD diagnosis and treatment between the VA
and DoD.
We authorized more funding for additional blind
rehabilitation specialists and increased the number of
facilities where these specialists could be located.
We expanded the eligibility for dependents' education
assistance to the spouse and child of a servicemember
hospitalized or receiving outpatient care before the
servicemember's discharge for a total permanent service-
connected disability. The intent here was to help enhance the
spouse's earning power as early as possible before discharge of
the servicemember. We made Chapter 35 more flexible for you,
Mr. Secretary, so you can be responsive to the spouses and the
dependents.
We restored entitlements for members of the National Guard
and Reserves who care for the active duty during the school
year. We extended work study provisions to ensure a veteran did
not lose a job during the school year, and required the VA to
report ways to streamline administration of the GI Bill to
shorten the time to get that first check.
And I look forward to working with the Chairman on his
proposed improvements to the GI Bill.
Listening to the VSOs and MSOs who expressed concerns about
the veteran's ability to afford a home, we authorized VA to
guarantee co-op housing units, which are often the most
affordable housing in many areas. And so if you have any
comments on it, Mr. Secretary, please let us know.
This Committee also focused on the disabled veteran-owned
businesses, so we gave the VA the tools to increase the amount
of business they do with veterans by giving service-disabled
veterans-owned business preference over all other set-side
groups and ensuring that the survivors of veterans business
owners who acquired ownership continue their veteran-owned
status with the VA.
The VSOs and MSOs also expressed the need to revitalize the
veterans employment programs at the Veterans Employment and
Training Service, so we made several changes to strengthen
mandatory training for DVOPs and LEVRs, revise the incentive
program to make it more effective, and establish a pilot
licensing and credentialing program.
And the VVA especially noted that the Department of Labor
needed to develop regulations to implement the ``Jobs For Vets
Act,'' so we did that too.
Since this time last year, we have seen the Department
embrace the idea of centralizing its IT under the VA's CIO. I
believe that this innovation has been seen as part of your
legacy, Mr. Secretary, to the Department of Veterans Affairs,
and I congratulate you. And I am sure Mr. Filner joins all
Members of this Committee who unanimously supported and
endorsed that move, and we congratulate you.
As part of our work on IT, we engaged in a bipartisan
fashion to increase data security in order to protect our
Nation's veterans. Recognizing that as you centralize that
system, breaches are still going to occur, we set forth those
mitigation efforts and gave you the tools.
And so that is why we recognize that when you had this
latest breach in Alabama, you did not see the outrage of alarm
from Mr. Filner and myself because we pragmatically have given
you the tools and we understand these things are going to
happen, and we want to work with you when they do. And we
appreciate also the notification process that you have been
giving to the Committee and to the Senate and the Armed
Services Committee.
We also worked through the complexities and will continue
to work with the Charleston model, whether it is in Charleston,
South Carolina or as we move with the facility in New Orleans.
This is a new way and exciting way to build a hospital, and we
want to work with you.
It is our job also to preserve those areas of excellence
and to work together in a bipartisan fashion to ensure every
service of the Department meets its highest standards. One of
the most important services remains the determination awarding
of benefits, and I think, Mr. Chairman, you said it about
right. The claims backlog has reached an all-time high. It is
the big elephant in the room, and we have to go after this.
To help lead the way, Mr. Chairman, I organized a Compensa-
tion of
Benefits Accountability Task Force in December of 2005, and it
had almost 1 year of work. They provided me a powerful work
product with numerous recommendations, and I want to commend
those who spent many hours working on this valuable product.
Mr. Wartman, the Associate Legislative Director of
PVA; Mr. Dorn, the National Service Director of AMVETS; Rick
Wiedman the National Legislative Director of Vietnam Veterans
of America; John Lopez, Chairman of the Association of Service-
Disabled Veterans; and Mr. Smithston, the Assistant Director of
the National Veterans Affairs and Rehabilitation Commission of
The American Legion.
Gentlemen, I thank you for your efforts. We will take that.
We will work with the Chairman as we approach these issues
along with the Secretary.
It is also worth noting again this year, the President
proposed substantial increases in the budgets of agencies
focused on fighting the War on Terror, the Department of
Defense and the Department of Homeland Secretary.
I am pleased again this year, the Department of Veterans
Affairs, an agency focused on caring for those who have borne
the battle, also received a substantial increase of
approximately 8 percent over the level contained in House Joint
Resolution 20.
At a time when much of the rest of the government received
a 2.2 percent increase, I believe this reflects a commitment of
you, Mr. Secretary, and of the Administration to care for our
nation's veterans during time of war.
As you know, Mr. Secretary, a budget is more than numbers
and in the end, it must translate into real actions on the
ground, for a positive effect on America's veterans. As I look
at this budget, I view it in light of my three top priorities
which I discussed, focusing on the disabled, caring for the
special needs, and the indigent.
We have an obligation to those who bear those burdens of
war and military service and their survivors, and our work must
move toward fulfillment of that obligation. Therefore, I will
judge this budget not just by the numbers, but for what it does
for America's veterans given these priorities.
When you send us a budget of this magnitude, Mr. Secretary,
I expect also to find those outcomes you seek successful. This
Congress is not a blank check. We will be looking for
accountability. Generally I think this is a good budget.
As we look at desired outcomes, we will work with the VSOs
and the MSOs. I am hopeful we can do those hearings. If we
cannot do those hearings, I invite all the VSOs and MSOs to be
in touch with me to get your input. If you choose not to be in
touch with me, then I understand what your positions are.
Mr. Secretary, I applaud you for the direct and forthright
budget process that you have used in developing this year's
budget. It appears to be the gimmicks of years past have been
removed. And so I want to applaud you for that. That is a
leadership statement that I took out of this budget when I
looked at it.
Mr. Secretary, last year, you brought us similar requests
for the enrollment fees and co-pays. I recognize I am a
minority here in Congress. I support co-pays. I support
enrollment fees. When I created TRICARE for Life, I included
those.
There was an error that we made. When we opened up the
process here on this Committee, we did not give sufficient
management tools to the Executive Branch. That is an error that
we made. And there is a lack of will for people to now give you
those tools. So I understand what you are doing.
At this point, I will yield back.
[The prepared statement of Congressman Buyer appears on
p. 63.]
The Chairman. Thank you, Mr. Buyer.
I will entertain short opening statements from our
colleagues.
Mr. Michaud.
OPENING STATEMENT OF HON. MICHAEL H. MICHAUD
CHAIRMAN, SUBCOMMITTEE ON HEALTH
Mr. Michaud. Thank you very much, Mr. Chairman.
This is an extremely important first hearing for our
Committee. We have a responsibility to make sure that the VA is
provided with the dollars that it needs and that the VA spends
those dollars in a wise manner.
Budgets do reflect our priorities and I think it is
important for this Congress to make sure that veterans are high
on our priority list. We have a lot of work to do in this
Congress dealing with PTSD, homeless veterans, and making sure
that the CBOCs under the CARES process are implemented.
So with that, Mr. Chairman, I look forward to working with
you and Ranking Member Buyer and the Ranking Member of my
Subcommittee, the Subcommittee on Health, Mr. Miller, as we
move forward in this Congress. Thank you very much, and I am
looking forward to hearing both panels today as well.
I yield back.
The Chairman. Mr. Moran?
Mr. Moran. I have no opening statement.
The Chairman. Thank you.
Mr. Baker?
Mr. Baker. No statement at this time.
The Chairman. Mr. Brown?
Mr. Brown of South Carolina. No statement.
[The prepared statement of Congressman Brown of South
Carolina appears on p. 65.]
The Chairman. Mr. Miller?
Mr. Miller. No statement.
[The prepared statement of Congressman Miller appears on
p. 65.]
The Chairman. Mr. Boozman?
Mr. Boozman. I have got a statement that I would like to
submit----
The Chairman. Thank you.
Mr. Boozman.--in the interest of time. Thank you.
[No statement was submitted.]
The Chairman. Mr. Mitchell, Chairman of our Oversight
Investigations Committee?
Mr. Mitchell. No.
The Chairman. Mr. Hall, Chairman of our Disability
Committee?
OPENING STATEMENT OF HON. JOHN J. HALL
CHAIRMAN, SUBCOMMITTEE ON DISABILITY ASSISTANCE
AND MEMORIAL AFFAIRS
Mr. Hall. I would just say that I am looking forward to
working with you, Mr. Chairman, and Mr. Ranking Member and the
Secretary and staff in providing a more seamless transition
from active duty to veteran status, in retaining the facilities
and not prematurely closing or discarding of Veterans
Administration facilities before we know what the true demand
will be in returning veterans coming back from the wars that we
are currently fighting, and mainly in reducing what most people
consider to be a scandalous backlog of claims and also a
scandalous number of homeless veterans. So those are the
priorities that would leap to the top of many for me, and look
forward to working with you and thank you.
The Chairman. Thank you, Mr. Hall.
Mr. Hare?
OPENING STATEMENT OF HON. PHIL HARE
Mr. Hare. Thank you, Mr. Chairman. I look forward to
serving with you on the Committee.
I actively sought this Committee out because after working
for Congressman Evans for 23 and a half years, I saw firsthand
what veterans go through in our district and whether they are
homeless and having to do stand-downs or whether it is the
backlog, as my colleague has mentioned on the disability
claims, you know, we can do better.
And I think we have a responsibility to the veterans. I am
concerned about the numbers of veterans that are coming back,
whether or not we have the personnel and the facilities. And
also, as you said, Mr. Secretary, in your statement, for those
who have given the ultimate price to make sure that our
veterans are honored with the services and the type of funeral
befitting heroes.
So I look forward to serving on the Committee, and thank
you very much, Mr. Chairman.
The Chairman. Thank you, Mr. Hare.
Ms. Brown-Waite.
OPENING STATEMENT OF HON. GINNY BROWN-WAITE
Ms. Brown-Waite. Thank you, Mr. Chairman. I have a
statement that I will submit.
Once again, we are seeing the imposition of enrollment fees
for category seven and eight. The Committee has rejected it
soundly in the past and probably will again, and I am sorry to
see that this keeps popping up.
I look forward to hearing from the Secretary, but I will
submit the full statement. I think we are all here to hear the
Secretary and discuss the budget.
The Chairman. Thank you.
Ms. Brown-Waite. But thank you for the opportunity.
[The prepared statement of Congresswoman Brown-Waite
appears on p. 67.]
The Chairman. And all the opening statements will be
printed as part of the record.
Mr. Rodriguez?
OPENING STATEMENT OF HON. CIRO D. RODRIGUEZ
Mr. Rodriguez. Thank you, Mr. Chairman, for being here and
thank you for allowing me just a few comments.
I know my concerns, I still have a district that is spread
some 700 miles. We still have people that have to travel two,
three hundred miles for services, and so I am going to continue
to work on trying to get access to some of those individuals,
as well as now the concerns that I personally have in terms of
a lot of our national Guard and Reservists that are out there
doing the Lord's work and representing us in Iraq.
Over 40 percent of our soldiers are out there and, yet,
when they do retire will not have similar access to veteran
services, and I think it is an area that we need to kind of
revisit and check out.
And in addition, I am also extremely concerned in terms of
the waiting list that we are seeing and also the vacancies
throughout our hospital systems and those areas that have not
filled those vacancies.
Thank you.
The Chairman. Thank you.
I skipped Mr. Salazar. I apologize.
OPENING STATEMENT OF HON. JOHN T. SALAZAR
Mr. Salazar. Thank you, Mr. Chairman. I will submit my full
statement for the record.
Mr. Secretary, I have enjoyed working with you over the
years, being from Colorado as well. Two things that really have
concerned me.
I was out at Walter Reed Hospital on Monday and saw many of
our soldiers returning from Iraq and Afghanistan. I spent time
with a 25-year-old double amputee. I also met with a third
soldier, a native from Colorado, out from Burlington, who was
recently fitted with a prosthetic leg. And it is my
understanding that this budget cuts funding for research of
prosthetic limbs. I would certainly appreciate you looking into
that and making sure that we can care for our returning troops.
So with that, Mr. Chairman, I yield back.
[The prepared statement of Congressman Salazar appears on
p. 67.]
The Chairman. Thank you.
Mr. Lamborn?
OPENING STATEMENT OF HON. DOUG LAMBORN
Mr. Lamborn. Thank you, Mr. Chairman. I do have a full
statement that I will submit for the record.
But very briefly, I just want to say I am honored to be on
this Committee and to be helping where I can with my other
colleagues here for those who have served our country. And so I
am just very excited and honored to be on this Committee.
[The prepared statement of Congressman Lamborn appears on
p. 67.]
The Chairman. Thank you.
Mr. Donnelly?
OPENING STATEMENT OF HON. JOE DONNELLY
Mr. Donnelly. Thank you, Mr. Chairman, and thank you, Mr.
Secretary, for being here.
During the time I was back home in the past few years, in
our district, we had a complete meltdown in clinic service and
wait times, and the pledge I gave to the folks back home was
that I would come here to try and make sure that never happens
again. And I actively sought out the opportunity to be on this
Committee.
In addition, we have been in limbo in our State in regards
to our VA Hospital in Fort Wayne for a long, long time. And my
commitment is to try to make sure, Mr. Secretary, with your
help, that we end that limbo and make sure Fort Wayne is
buttoned down and will be in service to us for a long, long
time in the VA system in the years ahead.
It is an honor to be on this Committee, and I want to make
sure that those who are serving not only from my district but
from all across the country that when they come back, they can
get not only the physical care they need but the counseling
that they may require as well.
Thank you very, very much, Mr. Chairman.
The Chairman. Thank you, Mr. Donnelly.
Mr. Bilirakis?
OPENING STATEMENT OF HON. GUS M. BILIRAKIS
Mr. Bilirakis. Yes. Thank you, Mr. Chairman. Thanks for
scheduling this hearing.
And I want to welcome the Secretary. And it is a top
priority of mine to take care of our true American heroes, and
it is an honor to serve on the Committee. And I will submit my
statement to the record. Thank you.
[The prepared statement of Congressman Bilirakis appears on
p. 66.]
The Chairman. Thank you.
Fresh from his appearance on the ``Colbert Report,'' Mr.
Space.
OPENING STATEMENT OF HON. ZACHARY T. SPACE
Mr. Space. Thank you for reminding me, Mr. Chairman.
The Chairman. You may speak as a Republican if you want.
You had to watch the show to know what it is.
Mr. Space. Rather than simply reiterate the remarks of my
colleagues, let me state that I am just honored to be on this
Committee and looking forward to the challenges that it
represents.
The Chairman. Thank you.
Mr. Walz?
OPENING STATEMENT OF HON. TIMOTHY J. WALZ
Mr. Walz. Thank you, Mr. Chairman, and thank you, Mr.
Secretary, and all the gentlemen joining us today.
I would like to give a special thank you to those of you
who are from our VSOs who are sitting out here. For many years,
I am a member of multiple organizations with you. I am a life
member of some of those, and I spent a lot of years trying to
make sure the people setting here heard what you had to say.
So I cannot tell you how much I appreciate you being here.
The only thing better is if you were sitting right alongside
me. I am not quite sitting high enough on this thing to make
that decision, but we appreciate you being here.
Please know that this Committee is absolutely committed to
solving these problems in a nonpartisan--it does not need to be
bipartisan--these are nonpartisan issues of taking care of our
veterans.
And I thank the Chairman profusely for giving me this
opportunity to do exactly that.
[The prepared statement of Congressman Walz appears on p.
68.]
The Chairman. Mr. Secretary, again, welcome. We hope you
will introduce your staff at the table and then the floor is
yours.
STATEMENT OF HON. R. JAMES NICHOLSON, SECRETARY, U.S.
DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY
MICHAEL J. KUSSMAN, M.D., MS, MACP, ACTING UNDER SECRE- TARY
FOR HEALTH, VETERANS HEALTH ADMINISTRATION; HON. DANIEL L.
COOPER, UNDER SECRETARY FOR BENEFITS, VETERANS BENEFITS
ADMINISTRATION; HON. WILLIAM F. TUERK, UNDER SECRETARY FOR
MEMORIAL AFFAIRS, NATIONAL CEMETERY ADMINISTRATION; PAUL J.
HUTTER, ACTING GENERAL COUNSEL; HON. ROBERT J. HENKE, ASSISTANT
SECRETARY FOR MANAGEMENT; AND HON. ROBERT T. HOWARD, ASSISTANT
SECRETARY FOR INFORMATION TECHNOLOGY AND CHIEF INFORMATION
OFFICER
Secretary Nicholson. Thank you, Mr. Chairman, and good
morning all. I have a written statement that I would like to
submit for the record of this hearing, Mr. Chairman.
The Chairman. So ordered.
Secretary Nicholson. And I would like to introduce my
colleagues that are with me at the table. I will start at my
left and your right with the Under Secretary of Veterans
Affairs for the National Cemetery Administration, Mr. Bill
Tuerk.
Next is the Under Secretary for Veterans Benefits
Administration, Admiral Dan Cooper. You will have to grant him
some indulgence. He spent most of his life below the sea in a
submarine, but he is doing a great job. Next is the Acting
Under Secretary for the Health Administration, Dr. Mike
Kussman. Mike has had a lot of experience including that of
commanding Walter Reed Hospital. To my far right and your left
is the Acting General Counsel of the VA, Mr. Paul Hutter.
Next is the Assistant Secretary of the VA for Information
Technology, and he is the Chief Information Officer of the VA,
Mr. Bob Howard, or I should probably say General Bob Howard.
And next to me is Assistant Secretary for Management of the
VA. He is also the Chief Financial Officer of the VA, Mr. Bob
Henke.
Mr. Chairman, if you would permit me to preface my remarks
by saying that I look forward very much to working with you in
the 110th Congress and particularly our Veterans Committee in a
bipartisan, bicameral way as someone said, and I believe it
strongly that taking care of veterans is not a partisan matter.
It is a patriotic matter.
And I look forward very much in that vein to working
together, for us benefiting from your scrutiny, your oversight,
and your support.
I am here today to discuss President Bush's 2008 budget
proposals for the Department of Veterans Affairs. The President
is requesting, using your term and mine, Mr. Chairman, a
landmark budget of nearly $87 billion to fund our nation's
commitment to America's veterans.
This budget will allow us to expand the three core missions
of the VA, those being to provide world-class healthcare,
provide broad, fair, and timely benefits, and dignified burials
in shrine-like settings for our nation's veterans.
This budget will allow us to continue our progress toward
becoming a national leader in information technology and data
security. I believe that with the right resources in the hands
of the right people, anything and everything is possible when
it comes to taking care of America's veterans.
At the VA, we have the right dedicated people. With the
President's proposed budget, we have the right resources too.
The $87 billion requested for the VA represents a 77 percent
increase in veteran spending since this President took office
on January 20th, 2001. Medical care spending is up 83 percent.
Mr. Chairman, I will outline the major portions of our
proposed budget at this time. For the Veterans Health
Administration, our total medical care request is $36.6 billion
in budget authority for healthcare. VA healthcare is the best
care anywhere. That sounds boastful. It is perhaps. Where I
come from, they used to say it is not bragging if it is true.
We have asked your staff to distribute to you some
materials for you to peruse about what others are saying about
the VA and the quality, the supremacy of its healthcare,
medical journals, national media, institutions such as the
Harvard University, who twice in the last 12 months cited the
VA as providing the best healthcare and leading this Nation in
healthcare delivery, safety, and technology.
During 2008, we expect to treat about 5.8 million patients.
This total is more than 134,000 or 2.4 percent above the 2007
estimate. Patients in priorities one to six, veterans with
service-connected conditions, lower incomes, special healthcare
needs, and service in Iraq and Afghanistan will comprise 68
percent of the total patient population in 2008. They will
account for 85 percent of our healthcare costs. I repeat, 68
percent of them will take 85 percent of our resources.
The number of patients in priorities one to six will grow
by 3.3 percent from 2007 to 2008. In 2008, we expect to treat
about 263,000 veterans who served in Operation Iraqi Freedom
and Operation Enduring Freedom. This is an increase of 54,000
or 26 percent above the number of veterans from these two
campaigns that we anticipate will come to the VA for healthcare
in this fiscal year. And it is 108,000 or 70 percent more than
the number we treated in 2006.
Regarding access to care, with the resources requested for
medical care in 2008, the Department will be able to continue
our exceptional performance dealing with access to healthcare.
Ninety-six percent of primary care appointments and 95 percent
of specialty care appointments will be scheduled within 30 days
of the patient's desired time for an appointment.
We will minimize the number of new enrollees waiting for
their first appointment to be scheduled. In the last 8 months,
we reduced this number by 94 percent, and we will continue to
place strong emphasis on this effort.
Regarding mental health services, the President's request
includes nearly $3 billion to continue our effort to improve
access to mental health services across the country. The VA is
a respected leader in mental health and PTSD research and care.
About 80 percent of the funds for mental health go to treat
seriously mentally ill veterans, including those suffering from
post-traumatic stress disorder.
On medical research, the 2008 budget includes $411 million
to support the VA's unparalleled medical and prosthetic
research program. This amount will fund nearly 2,100 different
high-priority research projects to expand knowledge in areas
most critical to veterans' particular healthcare needs.
Most notably, research in areas of mental illness, 49
million; aging, 42 million; health services delivery
improvement, 36 million; cancer, 35 million; and heart disease,
31 million. Nearly 60 percent of our research budget is devoted
to OIF-OEF healthcare issues.
Regarding polytrauma care, I have traveled to three of our
four polytrauma centers, and there is no doubt that these
centers of compassion are where miracles are performed every
day.
In response to the need for such specialized medical
services, the VA has expanded its four traumatic brain injury
centers, which are in Minneapolis, Palo Alto, Richmond, and
Tampa, expanded the system to have regional polytrauma centers,
17 additional of those accompanying the specialties of these
traumatic brain injury centers, but in 17 more locations making
them more accessible, more convenient to veterans who settle
outside and around the country.
These expanded 21 polytrauma network sites and clinic
support teams will provide state-of-the-art treatment and, as I
said, will provide it closer to the injured veterans' homes.
On seamless transition, one of the most important features
of the President's 2008 budget request is to ensure that
servicemembers' transition from active duty to veteran status
or a demobilized National Guard or Reserve person to civilian
life is as smooth and hassle-free, as seamless as possible.
And we will not rest until every seriously injured or ill
service man or woman returning from combat in Iraq or
Afghanistan receives the treatment that they need in a timely
way and in a manner free of tension and hassle.
The Veterans Benefits Administration, let me focus on
veterans' benefits and VA's primary focus within the
administration of benefits remains unchanged. As I said,
delivering timely and accurate benefits to veterans and their
families and improving the delivery of compensation and pension
benefits has become an increasingly challenging issue, as
several of you have noted so far, during the last few years.
The volume of claims applications has grown substantially
during just the last few years and is now the highest that it
has been in a decade and a half. We received more than 806,000
claims in 2006. We expect this high volume of claims to
continue as we are projecting to receive about 800,000 claims a
year in both 2007 and 2008.
However, through a combination of management and
productivity improvements and our 2008 request to add
approximately 450 additional staff, we will improve our
performance while maintaining the high quality that we have
today.
We expect to improve the timeliness of processing claims to
145 days with this 2008 budget. We will make better use of new
technologies and have more trained people to process and
evaluate claims. With this budget, we project that we can
reduce our claims processing time by 18 percent.
For the National Cemetery Administration, we expect to
perform nearly 105,000 interments in 2008 or 8.4 percent higher
than those done in 2006. This is primarily the result of the
aging of the World War II and Korean War veteran population and
the opening of new cemeteries. Parenthetically, especially for
those of you who are new in the Committee, every day in our
country now, about 1,800 veterans die. There are slightly more
than 24 million veterans, and about 1,800 every day pass away.
About 600,000 a year pass away. And on a net basis, the veteran
population in our country decreases between 400 and 500,000 a
year currently.
The President's 2008 budget request includes $167 million
in operations and maintenance funding to activate six new
cemeteries and to meet the growing workload at existing
cemeteries by increasing staffing and funding for contract
maintenance, supplies, and equipment.
For capital programs relating to the National Cemetery
Administration, this budget request includes overall 1.1
billion in new budget authority for capital programs. It
includes $727 million for major construction projects, $233
million for minor, $85 million in grants for State extended-
care facilities, and $32 million in grants to build State
veterans' cemeteries.
The 2008 request for construction funding for healthcare
programs is $750 million. These resources will be devoted to
the continuation of the Capital Asset Realignment for Enhanced
Services or CARES Program. Over the last 5 years, $3.7 billion
in total funding has been provided for CARES. Within our
request for major construction, resources are there to continue
six medical facility projects that are already underway. They
are in Pittsburgh, Las Vegas, Denver, Orlando, Lee County,
Florida, and Syracuse, New York.
Funds are also included for six new national cemeteries in
Bakersfield, California; Birmingham, Alabama; Columbia-
Greenville, South Carolina; Jacksonville, Florida; southeastern
Pennsylvania; and Sarasota County, Florida.
For information technology, the VA's 2008 budget request is
$1.8 billion, which includes the first phase of our
reorganization of IT functions within the Department, and
establishes a new IT management system in VA. This major
transformation of IT will bring our program in line with the
best practices in the IT industry. Greater centralization will
play a significant role in ensuring that we fulfill my promise
to make the VA the gold standard for data security within the
Federal Government. To that end, our 2008 IT budget includes
almost $70 million for enhanced cyber-security.
Mr. Chairman, I know the Committee shares with me the
concern about the VA's ability to secure all our veterans'
personal information. There have been security incidents that
are simply unacceptable, and I have made it a priority to
assure our veterans that we are addressing their concerns. It
is not that these incidents will never occur. But when they do,
the VA now has a process to properly respond to them.
We are encouraging all of our employees to report,
including self-reporting, thefts or other losses of equipment
whether in the workplace, at home, or on travel, so that we can
strengthen our information security procedures through lessons
learned, reviews, and personal accountability.
The most critical IT project for our medical care program
is the continued operation and improvement of the Department's
electronic health records. I have made it a point for the past
year to praise our electronic health records for their ability
to survive hurricanes Katrina and Rita, for example, where we
had over 50,000 veterans affected, and not one of them lost a
health record. Compare that to the civilian record, where over
a million people lost health records.
Electronic health records are a presidential priority, and
VA's electronic health record system has been recognized
nationally for increasing productivity, quality, and patient
safety.
Within this overall initiative, we are requesting $131.9
million for ongoing development and implementation of the
Healthy Vet-VISTA system. This is the program to modernize our
existing electronic health records. It will make use of
standards that will enhance the sharing of data within VA as
well as with other Federal agencies and public and private
organizations.
Additionally, Mr. Chairman, in closing, I want to take this
opportunity to inform you and the Members of the Committee of
my plan to create a new Special Advisory Committee to the
Secretary. We have several of these Committees, some chartered
by statute, some by regulation. This will be a very important
Advisory Committee to me. It will be on the subject of OIF, OEF
veterans and their families.
The panel of the Committee will include veterans, spouses,
parents, combat veterans, and survivors. It will report
directly to me and will focus on ensuring that all men and
women with active military service in Iraq and Afghanistan are
transitioned to the VA in that seamless manner that I spoke of
earlier, seamless and informed. The Committee will pay
particular attention to severely disabled veterans and their
families.
Mr. Chairman, this concludes my remarks. I look forward to
your questions. Thank you.
[The prepared statement of Secretary Nicholson appears on
p. 70.]
The Chairman. Thank you, Mr. Secretary, and I think all of
us have had experience with advisory committees. They can
really work well, so we congratulate you on setting that up.
We will have a first round of questions, 5 minutes from
each Member. That will include the Chair and the Ranking
Member.
The audience cannot see it, but we have a green, yellow,
and red light system in front of us. So when you see the yellow
light, you have got one more minute. And we will have a first
round, and if there is a need for a second, we will do that
too.
Mr. Secretary, on the enrollment fees, last year you
estimated that the proposal would cause almost 200,000 veterans
to leave the VA. This year, you do not have an estimate as to
the number of veterans who might leave the VA if the proposal
is enacted and we start charging an enrollment fee in 2009.
In addition, differently than last year, you deem any
revenue that would be collected from an enrollment fee to be
mandatory instead of discretionary revenue and subtracted,
therefore, from the VA mandatory amounts.
Do you have an estimate for how many veterans would leave
the system if the enrollment fee was proposed? What is the
policy that led you to change from the use of those fees from
discretionary to mandatory?
And I guess the same question enters all of our minds.
Every year that you have been there, you have submitted an
enrollment fee proposal. Each year, we reject it. Do you think
this year will be any different, and why is it still in there?
Why does it keep popping up like this?
Secretary Nicholson. You are right, Mr. Chairman, we had
had this discussion in the two previous times I have been up
here on the budget. And I will tell you and the Members of the
Committee that I support this system of a modest enrollment fee
and co-payments.
I think there is an equity there with retired military, for
example, who go on TRICARE, and pay an enrollment fee and they
pay a co-pay. These are people that may have served 30 or 35
years in the active military. And to ask a person to whom the
VA is providing full medical care, which are only people, by
the way, who have no service-connected disabilities, and who
are working and have jobs and have incomes, to pay these modest
fees to participate in this great system, to me, makes sense.
It makes sense because of the equity that I have described, and
it allows the VA again to give better care, have a system that
serves those that really need it better.
And as to your question about why we did not have it in our
proposal, again, it only applies to categories seven and eight.
And the thing that is different about this year--there are two,
I think, substantial differences.
First, the approval of it is not assumed in this budget. So
if you do not approve it, you the Congress, it will not work a
deduction from this budget and the application of the funds in
this budget. That is a change.
Second, we have a progressive schedule in here. There would
be no enrollment fee for anyone--and, again, we are only
talking about people that have no service-connected injuries--
but there would be no enrollment fee for anyone making less
than $50,000, and that is new. For those that are in the income
of 50 to 75,000, it would be $250 a year and so forth.
Because we are not showing it as a policy initiative with
efficiencies that would help fund this budget, it would take 18
months to implement and the funds would go to the Treasury in
2009 and subsequent years. And for a 10-year period, it would
accrue to $1.1 billion.
The Chairman. Thank you. I agree it is better than last
year's. If it does not go through the mandatory budget,
somewhere in the budget it is affected. So it is not as if it
is free money somewhere that the President has not counted on
in his mandatory budget. But I think it is dead on arrival, and
you can tell the President he is going to have to make it up
somewhere else.
Mr. Buyer, you have 5 minutes.
Mr. Buyer. Mr. Secretary, that is the attitude that I said
that is here in Congress. We erred, yet Congress never likes to
live up to our error when it is our fault. We love to bash you.
We love to bash other people, blame other people for our
mistakes. But these management tools are necessary. And we did
not put them in, and we should have.
And I erred when I created TRICARE for Life. I should have
given some more of these cost containment management
utilization tools to the Secretary of Defense and asked for
these annual increases. That did not happen. Congress is
unwilling to do that and especially at a time of war.
And so the political speeches that could be used against a
Member are so easy. So they are frightened, Members are. And so
they would rather then throw their arm around the veteran and
say I am going to stand with you rather than effectively
managing government programs that we created.
Now, I do compliment you because you adapted the
recommendations that I did on the tiered process with regard to
enrollment fees. And I agree with you, Mr. Secretary. I am the
first to apologize because when I created the TRICARE for Life,
I created those enrollment fees and co-pays, and now you have
got that military retiree that you described, 30-year military
retiree paying those things sitting next to someone who served
one tour of duty who does not have to.
And then there are Members of Congress who would tell that
person who had one tour of duty, oh, well, you are entitled to
lifetime healthcare. And then there are veterans' groups out
there that are advocating, well, that is the cost of national
security. Socialism? I do not think so. We fight for freedom.
And if these individuals can then gain access to government
programs, they ought to be willing to pay for it.
I compliment you because you are having to manage a ghost
population that is ebbing and flowing in and out of this system
and it is very, very challenging. It is very, very difficult.
Yet, we are not going to give you any management tools.
You know what I would suggest when you have got these fees?
I wish Congress would adopt them. I would not do them for
deficit reduction as recommended. You know what I would do with
them since you have got them on the mandatory side of the
House? I would apply it to DIC. I would take those dollars. I
would eliminate the offset with the survivor benefit plan. I
would take those and say I will stand with the widows and the
orphans. I mean, there are some things that we can do with
those dollars. But you had an idea. I have one. Everybody has a
particular idea.
For an example of how difficult, Mr. Secretary, your
challenge is, you came to us and we went into the budget
modeling and we found out the errors and the stale data, and
you said to this Committee I have a $975 million shortfall.
Then the Senate, playing one-upmanship with the House, put in
1.5. Then a few months later, the carryover into the budget
that you are to claim ownership over is $1.1 billion.
Now, nobody ever even said anything about it. They said,
oh, my gosh, you said $975 million. They gave you $1.5 billion.
Your carryover was $1.1 billion. It is the challenge of trying
to manage that system.
And, Dr. Kussman, when you were on active duty, it was no
different than managing TRICARE. When I chaired Personnel, guys
would come over and you would testify on the military budgets
and you would come up with shortfalls, and we would have to
then come in in a military appropriations supplemental and plus
it up because you are trying to manage the ghost population.
And you are doing the very same thing in the ebbing and flowing
of these people in and out of the systems.
And you are absolutely right, Mr. Secretary, these are not
the disabled. They are individuals who by choice are gaining
access to that system. And why? A lot of them wanted access to
the low-cost medications.
So let me ask you this specific question. Mr. Secretary, I
am sure you are aware in previous Congresses, in particular,
the 102nd Congress back in the 1990, 1992 time frame, there
were changes that were made to the Medicare, Medicaid programs
to allow purchasing and gaining access to the Federal supply
schedule. The Democratic controlled Congress immediately
repealed it because it had an impact upon the price of drugs
for veterans.
What would the financial impact be on the VA of House
Resolution 4 that just passed this House here in January when
we said, alright, we are going to let Medicare Prescription
Drug Purchasing Bill? What is the impact of that bill on VA
drug pricing?
Secretary Nicholson. Well, it is difficult for us to know
that because we do not know whether we are going to be able to
continue to access our pharmaceuticals in the same way and at
the same prices that we have been, which has been very
efficient. And we certainly hope that we can continue to do
that.
We have a very unique distribution of pharmaceuticals in
the VA, and it is extremely efficient. And it is another area
of innovation that the VA has created that a lot of people look
at. We dispense most of our pharmaceuticals through the mail.
And I would invite any of you on the Committee, and I will
say this generally, to visit any of these unique facilities we
have, polytrauma centers and so forth.
But one other unique thing that we have is called CMOP,
which is a consolidated mailing of pharmaceuticals. And if you
want to think Home Depot for the minute and maybe a bigger
version, mega store, you go in there and you see these little
carts running around on ball-bearing driven things, all
computer driven, we dispense in those things about 100,000
prescriptions a day. And they go out UPS, FedEx, or through the
mail, including registered and controlled substances in certain
instances.
So we have a very efficient system that allows us to serve
so many patients. We dispensed over 200 million individual
prescriptions last year. And I can only say I hope it does not
affect us. I could not predict that.
Mr. Buyer. Mr. Chairman, I note that the light is on. You
provided information that it would cost between six to seven
hundred million would be the maximum financial impact annually
to the VA. Was that accurate?
Secretary Nicholson. That this bill would?
Mr. Buyer. Yes.
Secretary Nicholson. I cannot verify that, Mr. Buyer.
Mr. Buyer. Please do that.
Secretary Nicholson. I will look and respond back.
[The information was provided in the response to question
one from Mr. Buyer's post-hearing questions for the record,
which appears on p. 133.]
Mr. Buyer. Thank you.
The Chairman. Thank you, Mr. Buyer. I see your new slogan.
We can do it, you can help.
Mr. Buyer. We what?
The Chairman. We can help. You can do it, we can help. It
is Home Depot's slogan.
[Laughter.]
The Chairman. Alright. Mr. Michaud, you are recognized for
5 minutes.
Mr. Michaud. Thank you very much, Mr. Chairman.
Thanks once again, Mr. Secretary. A couple of questions.
How much of the money that you are requesting in this
budget dealing with minor construction will be allocated for
the construction of the new CBOCs that are recommended under
the CARES process, and how many of the 156 high-priority CBOCs
recommended under CARES have been built and are fully
operational?
Secretary Nicholson. At the end of fiscal 2006, we had 717
fully operational community-based outpatient clinics, CBOCs.
Mr. Michaud. What is the number again?
Secretary Nicholson. Seven hundred and seventeen.
Mr. Michaud. Thank you.
Secretary Nicholson. There was an addition of eight new
CBOCs in fiscal 2006. We have approved 24 so far in fiscal year
2007. For 2008, we have not yet finalized the total.
Mr. Michaud. Okay. And how much of the money in the minor
construction are for the--have you set a certain amount aside
or is all that going for----
Secretary Nicholson. Congressman Michaud, the CBOCs are not
in the minor construction budgets. They are in the operating
budgets of the VISNs.
Mr. Michaud. Okay. Thank you.
My next question dealing with PTSD. We have heard
statistics that over 25 percent of the men and women coming
back from Iraq or Afghanistan have some form of mental health
issue or PTSD. I was reading an article the other day where the
Minister of Defense of England figures that only 2 percent of
their folks have a lasting form of PTSD.
My question is, as it relates to PTSD, how does the VA, and
how does the Department of Defense, determine or diagnose PTSD?
Is there a difference in the diagnosis of PTSD?
Secretary Nicholson. No, there is no difference. And I
would maybe ask Dr. Kussman to expand on this very important
subject. Let me give you an overview.
Of those who have returned from OIF-OEF, which is over a
million servicemembers, about 610,000 of them have returned to
civilian life, either having been discharged or having come off
active duty as a Reservist or Guardsman.
Of that number, we have seen about a third. We have seen a
little over 200,000, and we have screened each of them for any
mental health problems, just as we do for physical health.
And of that number, that 200,000, I think it is about
206,000 we have seen, for about 60,000 of them we have
identified some mental health issue; that is because they have
noted that they are having sleeplessness or some other symptom.
And of that number, about half of them we are treating for
PTSD. It is actually a little over half. That is about 39,000.
So, you know, each of them, individually it is an important
case. But as a percentage, you can see that, of the 200,000, it
is a little less than 20 percent.
I would ask, Dr. Kussman, do you have anything to add?
Dr. Kussman. Thank you, sir.
The diagnosis and evaluation of PTSD is the same for DoD
and the VHA. We have a joint clinical practice guideline that
we do together. So I think it is pretty standard how you
evaluate people.
Furthermore, besides all the outreach that we have in
reference to mental health and PTSD in particular, when anybody
comes to us of the 205,000 that the Secretary mentioned, there
is a drop-down menu, as he said, to ask people whether you have
the symptoms.
The Chairman. Dr. Kussman, is your microphone on?
Dr. Kussman. I thought it was on. I was too far away.
So I think that we have a very aggressive outreach both
with our own system and in partnering with DoD for the post-
deployment health risk assessment programs that are
aggressively done, particularly with National Guard and Reserve
90 to 180 days after they come back, to ask them if they have
any issues related to the things consistent with mental health
and PTSD.
The Chairman. Thank you.
Mr. Moran.
Mr. Moran. Mr. Chairman, thank you very much.
Mr. Secretary, thank you for joining us this morning.
I recently had what I call a veterans' forum in one of my
communities, and we had both the healthcare side of the VA and
the benefits side of the VA. And it was evident that the
healthcare side continues to receive more and more compliments
all the time.
In the time that I have been in Congress, it is clear to me
that the VA has improved its delivery of healthcare, and
veterans are appreciative, not that it is not without
challenges and problems and individual circumstances. But on
the benefit side, constant criticism of the time frame, the
wait, the backlog.
And I have a couple of questions, a specific question
about, does this budget--how successfully will we be if we
adopt the administration's budget in eliminating the backlog of
cases on the benefit side?
And also a second question. I would like to see an
Administration budget that tells us how we eliminate the
category seven and eight discrimination. I would like to see
the categories eliminated. I believe you have the authority
every year to make that determination. And my assumption is
that, based upon priorities and resources, you make the
determination that the category seven and eight will remain in
place.
What would it take for us to work with the Department of
Veterans Affairs to eliminate that distinction?
And, finally, I want to tell you that I am working very
closely with the VISN Director in Denver. The eastern part of
your State and the western part of my State are inadequately
cared for when it comes to clinics, and I am pleased to know
that the VISN Director is in the process of adding a CBOC in
our region.
As you know, the eastern part of Colorado, the western part
of Kansas is sparsely populated and many veterans have a 4- or
5-hour drive to either Wichita or to Denver in order to access
even routine care. So I am thankful for the process as I see it
occurring, and I am hopeful that you will encourage that a CBOC
be located in western Kansas.
And, finally, we are working on a veterans' cemetery, and
this may be a question for Under Secretary Tuerk, near Fort
Riley, a State veterans' cemetery. And I am interested in
knowing whether the Administration's budget provides for money
for construction in fiscal year 2008.
Thank you, Mr. Secretary.
Secretary Nicholson. Thank you, Mr. Moran. Let me address
these issues in the order you did.
I appreciate the kind remark about veterans' healthcare.
Veterans' benefits is a very important part of what we do. It
is a very important part of the predicate for the VA in the
first place, which is to make whole a person who raises their
hand, takes the oath, and goes off and is in some way
diminished as a result of that service, either physically or
mentally.
And so while we take care of them on a contemporary basis
in our healthcare, many of them need to be supported. So it is
a very important activity, and we take it that way. And I
wanted to compliment Chairman Filner and thank him because we
are going to have a roundtable just on the subject of veterans'
benefits because it is a very complicated, massive undertaking.
And I think it would benefit those that could make it to really
learn about the internal workings of the veterans benefits
system.
I do not want to sound overly defensive in my response
because I do not mean it that way. One of the reasons for the
current condition is that our outreach, which has been very
robust, is really working because veterans are responding, and
the outreach is unprecedented.
For example, those people that are on active duty in the
military today benefit from the presence of over 140 outreach
VA counselors imbedded in these active military installations
to get them tutored, if you will, on what they are entitled to
before they come off active duty.
Well, we are doing a good job in marketing ourselves
because they are coming in in very big numbers. As I said, last
year, 806,000 individuals presented themselves for benefits.
But the other thing that is happening is that some of them
are like me, they are getting longer in the tooth, and when you
do that, you know, it is not just the arthritis in your knee,
but it is the rotator in your shoulder and maybe it is
something in your plumbing.
And so the average of these now is about six different
issues which means that they have to go to six different
clinics for evaluations. And our system under the law is that
we have to make some causal connection to that malady to their
service, unless they are a Vietnam veteran where there are
certain presumptions now due to their service in Vietnam,
things like diabetes and leukemia. They do not have to make
that verification if they served in Vietnam.
And if we want to maintain the integrity of this system,
you have to do it that way and you have to plumb for those
records. And so that is kind of an overlay, and I hope this
workshop, we can really get into it, maybe even walk you
through a case and take a look at some of these files, some of
which are two or three feet high for a 30-year member of the
service.
In this budget, we have a plan to bring this number down by
18 percent. And I will say that when this Administration took
over, the waiting time was well over 200 days. It is now at 171
days, which is too long. It is longer than I want it to be and
certainly longer than the veterans want it to be.
If we get this funding, we will be able to pull it down to
145 days. We are also going to employ additional technology to
perfect this VETSNET System, which is really starting to kick
in and help. That is the overlay on that.
The question about category sevens and eights is an
important one. Historically there was open enrollment until
January of 2003 when eights were no longer enrollable. Eight is
a person with no service-connection disability and have an
income above a certain threshold. Priority seven veterans have
lower incomes than priority eights.
It is a matter of resources. We have a war going on. We
have people coming back with a very high priority. We have a
record number of veterans coming to us for care. If you want to
accept the proposition that there are not unlimited resources
for this, then it is a matter of priority and that that
priority judgment is right now that they are not enrollable.
Most of them, by the way, have health insurance.
Mr. Moran. Mr. Secretary, what amount of money would it
take to eliminate the distinction on seven and eight?
Secretary Nicholson. My Chief Financial Officer just told
me it would take $1.7 billion a year. But it is progressive and
over 10 years, it would be an additional $33 billion.
Quickly on your mention of rural health, that is another
legitimate challenge that we have in trying to be available to
all veterans wherever they decide to live in our country. And
many of them decide to live in rural areas. As we just said, we
have 717 clinics now, and 39 more in the pipeline. We are
trying to get ourselves out there closer to where veterans are.
We also are doing a lot more in our rural healthcare
initiative for telehealth and telemedicine. At the end of the
last Congress, the omnibus veterans bill mandated to us to put
together an enhanced rural healthcare initiative, which we have
now put a planning committee together to do that.
The Chairman. Thank you, Mr. Moran. You brought up issues
that I think we are going to take up as a Committee just
focusing in on both those questions.
Mr. Moran. I thank the Secretary and I look forward to
attending your forum on benefits.
The Chairman. Thank you.
Ms. Herseth.
Ms. Herseth. Thank you, Mr. Chairman. I would defer to any
Member who was here prior to me.
The Chairman. Okay. Mr. Hall, please. You have 5 minutes.
Mr. Hall. Thank you, Mr. Chairman, and thank you, Mr.
Secretary.
The VA announced yesterday that it will be opening a new
veterans center in Middletown, New York, right on the edge of
my district, but in a location that will serve many veterans
who live in my district, and I am grateful for that.
I want to thank you on their behalf and mine and thank the
Department and say that I look forward to working with you to
make sure that it is fully staffed. I cannot say enough good
things about these regional vet centers.
And the first question for you is, is the VA allocating
enough resources to ensure that these vet centers are fully
staffed and functioning?
Secretary Nicholson. I suppose, sir, that would be a value
judgment that someone could decide. We think we are, and they
are growing. Currently there are 207 Vet Centers and through
this budget, there would be 232 of them.
And additionally, in these Vet Centers, we are imbedding a
mental health specialist and we are trying to staff them with
Global War on Terror veterans to the extent that we can, as
long as they meet the qualifications.
Mr. Hall. Thank you for that information. I guess time will
tell, you know, as we see how well it is working.
My second question is that I have heard feedback from
veterans in my district and also from the management and staff
at the Montrose and Castle Point VA facilities that they would
be interested in a paperless outreach program so that veterans
who are newly returning and maybe are shying away from getting
involved in the system for various reasons can be spoken to by
a staffer who visits them without having to fill out paperwork
and at least have an offer of, you know, or a description of
the services and benefits available to entice them to take that
step of signing up.
Have you considered such a thing?
Secretary Nicholson. A paperless enrollment?
Mr. Hall. Paperless outreach.
Secretary Nicholson. Paperless outreach. Well, we do some
of that. I mean, some of it is using technology such as e-mails
and the Internet. I would have to consider it and, I guess,
fully understand what you are envisioning there.
Mr. Hall. Maybe at the round table, we can get into that.
It may come up from other people, but I first heard that from
vets and VA staff in my district.
And as the Chair of the Subcommittee, which I am honored to
be chairing, on Disability Assistance and Memorial Affairs, I
wanted to ask you about the backlog. How many of those 600,000
or whatever the actual number is, approximate number of backlog
claims are due to--how much of the problem is due to a
technology fix that is needed and how much of it is due to a
personnel shortage to process the claims or is there a third
factor that I am missing?
Secretary Nicholson. The question is that waiting time to
adjudicate a claim, how much is personnel and how much is
technology? It is probably a little bit of both of those. And,
again, I do not know how much time you want to spend on this.
But this system, as soon as it is kicked off, when a
veteran files a claim, then we start doing what they call
developing the claim. And they have to write, call, fax the
veteran for certain pieces of information to verify the
incident that is the subject of the claim. They have 60 days to
respond. By law, they have 60 days to respond to each request.
And the truth is that they have more than that because we
are lenient on that. If they did not make the 60 days, that is
not an absolute. But it can stretch the time period out.
The technology piece that we are implementing with VETSNET
is going to help more on the back end after we finally get the
claim developed and adjudicated, to get it processed and get
the pay starting to flow because then that is not a judgmental
issue anymore. We are going to pick up several days with that.
That is overdue, that technology, because this is the 21st
century, and it is high time we do that. But that is going to
happen in this budget.
Mr. Hall. Thank you, Mr. Secretary and Mr. Chairman.
The Chairman. Thank you. We will resume with Mr. Baker
after a 5-minute recess. We will return at eleven o'clock
exactly.
[Recess.]
The Chairman. The Committee will resume. Thank you, Mr.
Secretary, for spending this time with us. Mr. Baker from
Louisiana is next for 5 minutes.
Mr. Baker. Thank you, Mr. Chairman. I shall work very
diligently to get my comments in within the 5-minute
allocation.
Mr. Secretary, I need to provide a short narrative for the
record and for Members of the Committee to understand the
particular frustration which I share, but wish to make clear at
the outset my frustration is neither with you, the
Administration, nor the agency which you are charged to
operate.
For the Members, I need to go through just a quick
explanation of how I got to where I am so it will make sense as
to the questions I finally offer.
Pre Katrina, the New Orleans veterans hospital served about
500,000 visits annually of veterans in the region. Post
Katrina, we have no hospital. We have been working since that
point a conclusion as to how to best address this healthcare
need.
Six months after the storm's land arrival, there was an MOU
signed by the VA and State officials on February 23rd to
evaluate the best and most advisable method of healthcare
delivery. Only 2 months later, on April 30th, there was issued
a collaborative opportunity study group report which set out a
way in which the LSU healthcare facility and the veterans'
healthcare needs could be jointly met.
On page 30 of that report, Mr. Chairman, there was a time
line established to set clear landmarks for the steps
necessary. The LSU planning and programming was to have
concluded by early 2007, VA planning and programming to have
concluded by early 2007, with LSU land acquisition to have
begun 2006, to be completed by 2007, with the ultimate
completion of the facility, and opening by 2012.
This plan was ultimately delivered to the Louisiana
Recovery Authority, the entity created for resolution of post
Katrina recovery. I would note as just some basic observations
about very simple elements of the plan as outlined at that
time, there were some concerns.
First, the first 15 feet of elevation of the new structure
would not be for patient occupancy. There would be a defend in
place strategy adopted where people could stay within the
facility for up to 8 days without external assistance. There
would be consideration of an elevation of the perimeter of the
site of post Katrina flood levels. I call that a levy in our
terms.
So what it means is that if we had a recurrence of the same
circumstance, we would have an isolated facility capable of
standing for 8 days surrounded by water that you could not get
through by highway access.
Whether or not an isolated island is appropriate for
veterans' healthcare, I do not know. Those are certainly things
that need to be considered. But when the Recovery Authority
considered adoption of the plan requiring $300 million of State
funding, they denied all elements of the plan save for three.
The legislature reacted to that by, since they are not in
session, by consideration of an interim emergency ballot, a
mail ballot to force the LRA to spend $300 million on the
completion of this plan.
The trouble with that is the $300 million will actually
come from the Department of HUD or CDBG money which the
Secretary of HUD must approve, so we will have the State using
Federal dollars to match Federal dollars.
The further difficulty with the matter is to date, I am not
aware of a plan that has been publicly submitted by any of the
State officials for public discussion or consideration, and I
do not know if there has been a demographic survey of patient
distribution and where our veterans are, why there is necessity
to insist on construction of a facility in urban New Orleans
given the apparent concerns for patient safety, and whether or
not there is a way to calculate the overall cost of the project
without an operating plan in hand.
Therefore, how could we possibly come up with a dollar cost
figure for the State to match either on the Federal or State
end without having such a business plan in the public domain?
At the end of the day, I am only concerned about one thing
from this perspective on this Committee, and that is getting
healthcare restored for veterans in Louisiana at the earliest
possible date. Given the time line in the well-conceived plan
that I hope would be executed as it is outlined, it will be
2012 before we would open doors on a facility.
Now, given the State's inability, and this is my
conclusion, given the State's clear inability to provide the
agency with a business plan outlining what it is we choose to
do and how the shared responsibilities will be designated, Mr.
Secretary, the MOU provides only one methodology for
cancelation of the contract, and that is by either party to
unilaterally withdraw by written notice to the other. There is
no other term for elimination of the MOU.
Will you at some point take it as an important public
policy matter to establish a clear-cut date by which the State
of Louisiana must provide you with a clear operating plan that
outlines financial terms, business operations, and
relationships between VA and the LSU healthcare providers or,
in the alternative, how long do I tell veterans in Louisiana
they have got to wait for Louisiana to get its act together?
Secretary Nicholson. Well, thank you for that question,
Congressman. It has a lot of parts to it and it is important.
We have been working that really since just after Katrina. We
have a collaborative work group.
And I had a meeting in my office several weeks ago and told
the people that were up from Louisiana, the decisionmakers from
both LSU and the Recovery Authority that we at the VA
essentially are ready to start a hospital. We have even
selected the architectural and engineering firm.
And we have entered into that memorandum of understanding
with LSU because we think it makes great sense.
Mr. Baker. Mr. Secretary, if I may, because my time is
limited, I want to commend you for your effort. As I said at
the outset, this is not about your agency's failure. This is
about Louisiana's failure to meet any reasonable time line.
As I understand it, this was supposed to have been done and
submitted to you and to Secretary Levitt, because this has a
lot of moving parts, Mr. Chairman--this is also a general
healthcare issue that must be considered with another agency--
but to have submitted to you in 2006 a plan for consideration
and adoption.
I am appreciative of the fact you are ready to move
forward. The trouble is I do not know what we are ready to move
forward with and where the State of Louisiana is going to get
its money and by what time can I say either do it or do not. We
are going to provide a healthcare facility in Louisiana one way
or another. If they want to get their act together and be a
participant, great.
I think you are absolutely on target. This is a great plan
if it can be better refined. But if they do not get to you,
when? March, June, December? Is there any signal we can send
back to folks in Louisiana and say let us get this thing done?
Secretary Nicholson. There is a signal I think you can go
back with, which is that our patience is wearing a little thin
in that we want to get going.
Mr. Baker. Mine is gone.
Secretary Nicholson. You know, it is not so easy. The sites
do not grow on trees around there. The site that we are sort of
focused on with LSU, the site is five feet under sea level and
it is----
Mr. Baker. Mr. Secretary, that is why in the authorization
language adopted by this Committee 6, 8 months ago, I insisted
on the inclusion of in or near New Orleans. That was of some
controversy. People thought I was trying to move it to my back
yard in Baton Rouge. I am not. I am trying to get a facility
that will not flood, that veterans can get to when they need
it.
Siting is not the big issue. The State has to come up with
an operational agreement on who is going to do what and who is
going to pay for what. They have not done that. That is
unacceptable.
Secretary Nicholson. Well, you are right. And as I started
to say, we told them we are ready to go. You show us that you
have the site confirmed and that you have the money to do your
part.
Mr. Baker. And they are going to get that from HUD.
Secretary Nicholson. And when you have that, we are ready
to be a partner and move out----
Mr. Baker. Mr. Secretary, I do not----
Secretary Nicholson. --because it makes good sense to----
Mr. Baker. I do not want to harangue endlessly, but I will
formally write to you asking for a date by which you expect the
State to give you an answer. We have to have closure. And if
the State cannot perform to your expectations in a reasonable
time line, it is the veterans who have the expectation of being
served here.
And this is not Democrat, Republican. This is not anything
but people who are still dealing with the aftermath of a storm
which was devastating, and this is an essential component of
our recovery and it is absolutely necessary that we get this
project underway.
I again state for the record I appreciate your diligence,
your work, your agency's direction and motivation. This is not
about you or your agency nor the Administration. This is about
getting something done that is inexcusable if we do not move
ahead.
I thank you, Mr. Chairman.
The Chairman. Thank you, Mr. Baker. And this is not just a
problem for you. I think this is a national problem. And I just
want to inform the Committee at Mr. Baker's request, this
Committee will go to New Orleans and the surrounding area, have
a tour, and have a hearing on this within a few months. And we
can let Mr. Baker----
Mr. Baker. And let me express my appreciation to you for
that, Mr. Chairman.
The Chairman. So we will be looking at this because it is
part of a national necessity that we do this.
Ms. Brown of Florida. Mr. Chairman, would you yield to me--
--
The Chairman. I yield to Ms. Brown.
Ms. Brown of Florida. --on that subject because I have
already gone and taken a look at the facility and was involved
in the negotiations with the House and the Senate to make sure
that it was authorized, and now I understand that it is funded
and it is moving forward.
A lot of times, New Orleans gets bogged down in a lot of
things. I do not want the veterans in that area to be like the
veterans in Orlando, waiting 25 years for a facility.
So I am pleased that it is moving forward, working with the
ultimate kind of campus when you have the urban campus, a
college, and the community working together. So I am pleased
that it is moving forward.
And I have already gone down and taken a look at it. And
the people in that area, they have waited too long for
assistance. And the government has reacted too slowly, and I am
very pleased that you are moving forward with this facility.
The Chairman. Thank you, Ms. Brown.
Mr. Mitchell, you are recognized for 5 minutes. Mr.
Mitchell.
Mr. Mitchell. Thank you, Mr. Chairman.
Mr. Secretary, I want to thank you and your staff for
appearing before this Committee. I want you to know that I look
forward to working with you. I believe that the best
organizations are those that monitor their own performance and
solve problems before they become too large and even more
difficult to solve.
I am proud to be the new Chairman of the Oversight and
Investigations Subcommittee, and I look forward to working with
you to find and correct small problems before they grow into
large and costly catastrophic ones.
As you know, since fiscal year 1999, the VA's Inspector
General's Office has delivered a return on investment of over
twenty-five to one for every dollar we have invested. This is
accomplished in part through fines, penalties, restitution,
savings, and cost avoidance.
The Inspector General's contract reviews have returned
millions of dollars to the VA, yet the VA's Inspector General's
Office is the smallest relative to its parent agency from among
all the statutory Inspector Generals. If the number of
employees in the IG's Office were to grow to meet the ratio of
the next smallest IG to parent agency ratio, the number of
employees in the Office of the VA's Inspector General would
double.
In fiscal year 2007, the IG had a significant budget
shortfall. And in the Administration's budget, the number of IG
employees is cut even more. If the VA is to find and correct
internal problems, find and implement best practices, and the
Inspector General has a history of providing the VA with a
significant and positive return on investment, shouldn't the
size, and this is the question, shouldn't the size of the
Inspector General's Office grow instead of shrink in this and
future budgets? I think it should, and I am curious to find out
why the Administration disagrees, and how can you explain the
shortsightedness?
Secretary Nicholson. First, let me say that I agree with
your statement of the importance and cost effectiveness of the
IG. In fact, since I have been in this job in 2 years, I really
have come to respect the brilliance of the people that put this
IG system into place in the government.
I really welcome them and their services because this is a
vast organization spread all over the world, including the
Philippines and Guam, and it gives me some comfort that people
are helping me watch these activities.
And my impression based on discussions with our IG, who I
consider a vital part of my management team, is that he is
adequately staffed. They work very hard over there. And he
would probably welcome your overture to expand, but he is a
pretty forthcoming guy. And my impression is that he has got
what he needs to do the job.
Now, we did get an increase in this 2008 request right at
the end so that he can hire some additional people.
Mr. Mitchell. Mr. Secretary, you are saying then that the
IG is satisfied with the number of people he has and he thinks
he can do an adequate job with the people he has?
Secretary Nicholson. Yes, sir.
Mr. Mitchell. Thank you.
The Chairman. I think you have a topic for one of your
Subcommittee meetings.
Mr. Mitchell. Yes, we do. Thank you.
The Chairman. Mr. Lamborn.
Mr. Lamborn. Thank you, Mr. Chairman.
And, Mr. Secretary, thank you for coming today. And I have
a broad question and a narrow question.
First, my narrow question is, part of the length of time,
and we are all concerned about how long it is taking for claims
to be processed, is a mandatory 60-day waiting period on the
part of the VA while the claimant is gathering material and
information to substantiate his claim. And that is for the
benefit of the claimant, the veteran, but has the consequence
of prolonging this what, 170-day average period right now.
So if we were as a Committee to take action to reduce that
60 days to 50 or 40 days or something like that, and I know it
is only procedural, it would have the effect of speeding up the
whole process, but would require the veteran making a claim to
speed up his or her activity. What would you feel about a
proposal like that?
Secretary Nicholson. It would speed it up, but it could
work a hardship on some veterans because some of them use that
time, either because they really need it to try to find a
colleague that was in a unit to verify that they took a
parachute jump that day and, you know, he did get hurt or he
did land in a tree or he did serve here or there, which is the
purpose of that. But if you narrowed that time period, it would
speed it up. There is no question about it.
Mr. Lamborn. Well, I know it is a waivable period right
now, but maybe we should consider shortening that with
extensions easily available.
And then my second broader question is for you or the Under
Secretary, Admiral Cooper. What does the budget propose for new
technology or personnel to process claims and is that doing
enough or at least can you tell us what you are proposing in
the budget?
Secretary Nicholson. I will comment and then ask Admiral
Cooper if he would elaborate.
We really need to be making better use of technology and we
are now finally getting there. And Dan will comment on the
VETSNET part of that. We could really highlight this in a
workshop if we can have it and demonstrate to you that every
veteran comes to us from the Department of Defense with a paper
file.
Now, this is parenthetical to your question, but we are now
finally really starting to collaborate with DoD to get a common
interconnected electronic medical record. We had a very good
meeting and, in fact, announced this at a joint press
conference the week before last.
I had lunch this week with Deputy Secretary England of DoD
with his key staff. This is finally starting to happen. But
that is very prospective, and that will really help this down
the road because those new veterans will come to us with
electronic files. We do not have this paper chase that goes on.
But we cannot do anything about it with the millions that are
currently there. We have to deal with that.
But I am going to ask Admiral Cooper if he would elaborate
on the technology.
Admiral Cooper. Yes, sir. Let me mention a couple of
things. One, there is an increase in our budget this year for
our primary resource, which is people. And we will have an
increase with this budget of about 450 people.
On top of that, the primary technology that we work with is
a system called VETSNET. This system has had a rather tortuous
past, but we have made a lot of progress in the last couple
years.
We have three of five components and we are fully utilizing
those at every regional office today. Those are the components
that help us to take in the claim and adjudicate the claim.
The components we are working on now are those to help us
pay the claim, pay it faster, pay it more effectively, and
ensure the retroactive pay we send to a veteran is computed
properly. It will also fight fraud.
So it is the VETSNET System that we are working on
wholeheartedly that will help us as far as technology goes.
The Chairman. Thank you.
Ms. Herseth, you are recognized for 5 minutes.
Ms. Herseth. Thank you, Mr. Chairman.
And, Mr. Secretary, thank you for your testimony.
As you may know, I am the Chair of the Economic
Opportunities Subcommittee, continuing to work with my friend,
Mr. Boozman from Arkansas, as we focus on the myriad of issues
under our jurisdiction I want to pose a question specifically
with regard to the VA Education Service in a moment.
But some of the questions raised have already dealt with
access to healthcare for rural veterans. And in South Dakota,
we have some CBOCs and others that have been proposed, and I
just need to clarify with you a couple of things.
First, you had mentioned in response to Mr. Michaud's
question about the minor construction projects that the CBOCs,
actually, come out of the operating budget of the VISNs, but my
understanding is that the VISNs submit business proposals for
these clinics to the CARES Program, that the actual
construction of the clinics comes under the minor construction
projects and then the operation of the clinics does come out of
the operating budget.
So could you just clarify how that has worked in the past
and then I do want to ask a parochial question about where you
are with the fiscal year 2008 list that has yet to be
finalized.
Secretary Nicholson. I am pondering whether there are any
exceptions because I know we are building almost a 100,000
square foot clinic in Columbus, Ohio, a non-inpatient clinic.
So I reserve that question.
But generally, the CBOCs do not fall into the minor
construction budgets. They are funded out of the operating
budgets of the VISNs and they are consequent to the CARES
analysis that has gone on using a lot of demographic
information. And the plans should be compliant with that master
plan.
As I said, we have 717. We did eight in 2006 and for 2007,
we have approved 24 so far. And in 2008, can somebody help me?
I do not think we know that, what that number is going to be.
We are working on those business plans.
Ms. Herseth. I appreciate that, but as you determine that
number, I assume you are analyzing what number you are going to
finalize and propose for fiscal year 2008 based on the budget.
And so which budget line item would you direct me to evaluate
as it relates to how many new CBOCs would be approved and
operational in fiscal year 2008?
Secretary Nicholson. Well, for you, probably the best path
would be to go take a look at the VERA allocation that would be
for your VISN and what the CARES study has said about the needs
of that VISN.
I was just handed a note saying that our planning predicate
in that number for 2008 is 29 new CBOCs.
Ms. Herseth. Twenty-nine additional?
Secretary Nicholson. Yes.
Ms. Herseth. Okay. We will follow up on others, but let me
just ask a question particular to the jurisdiction of the
Economic Opportunities Subcommittee.
For fiscal year 2006, as well as fiscal year 2007, the VA's
Education Service was allocated $19 million from the
readjustment benefits account to enter into contracts with
State Approving Agencies for purposes of approving courses for
education under the Montgomery GI Bill and other related
activities.
Now, under Section 301 of Public Law 103-330, at the end of
fiscal year 2007, the SAA funding would decrease to $13
million. Is the VA planning to, or are you requesting within
what has been submitted already, resources to maintain funding
levels at the 2007 level?
Secretary Nicholson. I am going to ask Admiral Cooper to
answer that, if you would.
Admiral Cooper. No, ma'am. We have not requested that. That
money, as you know, goes to the States who then hire the SAAs.
It is my understanding that about 5 years ago it was increased
to 19 million, and it was stated that at this time, it would be
reduced to 13 million.
We are meeting next week or the following week with the SAA
group as they come in to determine just what we will have to do
with that.
Ms. Herseth. Thank you.
Thank you, Mr. Chairman.
The Chairman. Mr. Bilirakis.
Thank you, Ms. Herseth.
Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it.
I have a specific question with regard to my district. The
James Hailey VA Medical Center in Tampa, Florida, is one of the
busiest, if not the busiest, medical centers in the country.
Parking is a critical issue at the facility. Veterans complain
about having to drive for long periods of time to find a
parking space.
As part of the fiscal year 2007 budget submission, the
Department included a project to, ``improve patient parking at
the Tampa VA Center, as a potential site for future
construction.''
What is the status of this proposed project and--well, if
you can answer that question first, please.
Secretary Nicholson. You are right, Congressman. We have
had a real parking problem down there and we have taken steps
to improve it. We have gotten and have applied about two and a
half million dollars to that problem and acquired, I want to
say--I remember looking at this yesterday--I think it is 2.6
acres of land that we have been able to acquire for additional
parking on. And that is well underway, which will go a long way
to alleviate the parking problem that does exist there.
Mr. Bilirakis. Okay. I appreciate it. One additional
question.
An issue that I am particularly interested in is helping
our servicemembers--I think John talked about this--returning
from Operation Iraqi Freedom and Operation Enduring Freedom
transition back into civilian life.
Your testimony highlights the VA's Coming Home to Work
Initiative. How many veterans have taken advantage of this
program?
Secretary Nicholson. I will have to see if someone can help
me with that number. One hundred and eighty-eight, I'm told.
Mr. Bilirakis. One hundred and eighty-eight. What can we do
to enhance or improve the program?
Secretary Nicholson. That is a good question and is one
that concerns me when I first came into this job and looked at
those unemployment numbers of that age cohort of 20 to 25,
which was then about three times the national rate for people
that age. It has gone down now. It is about one and a half
times more than the national rate. So it is still too high.
I have made a lot of presentations to trade groups,
National Governors Association trying to get people to reach
out to hire veterans. The lead on this in the government is
really at the Department of Labor, and so we are now
collaborating with them.
It is a combined effort that is needed to get the employees
of this country to realize what outstanding prospects for
employment these veterans are, and certainly to include the
injured veterans or the seriously injured veterans. We are
doing that. We are trying to model that ourselves, and we have
twenty-some people working in our headquarters now, some still
as interns from Walter Reed and Bethesda.
We have one boy that I would like to talk about so much
because he came back in a coma, was in a coma for weeks. He had
a spinal cord injury. They did not think he would ever walk.
The system really performed miracles on him. He now works for
us full time and came into my office recently with a smile on
his face telling me he was going to run a 5K race.
But his real satisfaction in the restoration--he is still
handicapped some--but is the fact that he is working. He has a
job. He has value. And that is the best thing we could do for
these veterans.
And so we are trying to leave no stone unturned. The lead
with Federal resources for that is really DoL.
Mr. Bilirakis. Thank you, Mr. Secretary.
The Chairman. If I had not assumed this position, I would
be tempted to say something like it seems like the coma is a
good background for some people.
Ms. Brown.
Ms. Brown of Florida. Thank you.
Mr. Secretary, first of all, I always like to start out
with the words of the first President of the United States,
George Washington. The willingness with which our young people
are likely to serve in any war, no matter how justified, shall
be directly proportional as to how they perceive the veterans
of earlier wars were treated and appreciated by their country.
And with that, I want to thank you. The veterans in central
Florida have been waiting 20 years in Orlando for a hospital
and it is going to be announced soon, and that thank you for
the cemetery in Jacksonville. And last, I understand yesterday
a new vet center will be built in Gainesville.
But coming to the overall issues that I am concerned with,
every year, you all come forward and put up increasing co-
payments and enrollment fees that the Congress rejects. And in
your own estimate, it discourages veterans from enrolling, at
least 200,000. And you still are not allowing new priority
eight veterans into the system.
And I was just doing a quick analysis. To fund that entire
program, how much did you say it was, sir, $1.7 billion? Is
that what you said?
Secretary Nicholson. One point seven billion dollars for
2008 and $33 billion over the next 10 years.
Ms. Brown of Florida. Well, you know, I was just looking at
the news and most people up here cannot visualize a billion.
But it's my understanding, about $12 billion in Iraq that is
unaccounted for. $12 billion.
So we could entirely fund the veterans if we could just
identify $1.7 billion, and that is one point--how many millions
of veterans that we could fund, over a million veterans that we
could fund if we could identify those funds. So I think it is
important that Members on both sides figure out where that
money is.
But another area. You all issued cuts to research that will
come up with innovative ways to help people who have lost limbs
because of this recent war. I do not understand that. Why would
we be cutting research in that area?
And lastly, we have had round-table discussions, lengthy
discussions on security. And recently in Alabama, a portable
computer hard drive containing personal information on veterans
was reported missing from a VA facility in Birmingham, Alabama.
I mean, I do not understand how that could happen after all of
our discussions.
So, thank you for your investment in Florida. Please
address those issues that I pointed out.
Secretary Nicholson. Yes, ma'am. Prosthetics, our
prosthetics budget is up in this budget by 9 percent, up $1.3
billion in prosthetics.
Ms. Brown of Florida. Yes. I was asking about research
because that is coming up with the newest technology to assist
them. Is there a cut in the research? I guess that is what I am
asking.
Secretary Nicholson. The research budget, the overall VA
portion of it is about level because we get grants both from
Federal and non-Federal sources each year. So our overall
research budget will be up in 2008 if it is approved. And the
total amount would be about almost $1.4 billion, and that
includes just under 2,100 different research projects which
includes prosthetic research. And it is at 114 different
locations around the United States.
Ms. Brown of Florida. And the question about the computer?
Secretary Nicholson. I am sorry?
Ms. Brown of Florida. The computer, the computer that is
missing from Birmingham, Alabama.
Secretary Nicholson. Yes, ma'am. That is a data breach. It
does not make you happy and it does not make me happy.
Ms. Brown of Florida. Did we fire anybody?
Secretary Nicholson. Pardon?
Ms. Brown of Florida. Did we dismiss anyone, terminate?
Secretary Nicholson. Well, no, we have not yet because it
is still under a very active investigation by our Inspector
General. And we do not have all of the facts in yet on it. We
do not know yet the magnitude of it and we do not know yet what
has happened in our chain of command. But those are under
active investigation and, believe me, it has my attention and
focus.
And I will say about that, we have made a lot of progress.
We are transforming that system. We have moved thousands of
people that were decentralized into this IT sector, and they
now work under an identified commander, if you will, and
Assistant Secretary Howard.
But I was asked this question a few weeks ago up here. At a
press conference, somebody said can you guarantee me that there
will be no more data breaches at the VA, and I said I cannot.
And I cannot at this time.
If I thought, you know, I had such a good team that we were
going to win the pennant, but I could not guarantee we would
not make any errors during the season, I cannot sit here today
and tell you we are even ready to win the pennant, let alone
make any errors.
But we have made tremendous progress. But we have a lot
more to go because the system, this was a research--one of
these 114 research sites. People need to get disciplined in the
way they handle this data. In this case, this person alleges
that his hard drive was lost. We do not know if it was lost. We
do not know yet what was on it.
Ms. Brown of Florida. Mr. Secretary, how can we help you?
Because when this happened, it compromises the veterans, their
families, the entire system. I mean, because they could take
that and they could--identity theft is so rampant. What can we
do?
Secretary Nicholson. I appreciate that question, maybe more
than you realize.
Ms. Brown of Florida. I am sincere about this question.
Secretary Nicholson. First and foremost, it is the
violation of the privacy of the people that are involved, but
it also sort of damps out all the other great work that we are
doing here in this really great agency. And it gets a lot of
attention and it pains me.
I think you can help, A, by understanding it and as B, we
may need some help in dealing with personnel, as far as ability
to discipline them, because that is what it is going to take in
the end is to have some examples, to have people realize that
this is serious business, that we are serious, that they need
to deal with encrypted information, they need to open that
password protected device every time they go back on it instead
of leaving it open. They need to deal with other people's
information as they would deal with their own privacy. And we
are not there yet, but we have made a lot of progress.
Ms. Brown of Florida. Thank you, Mr. Secretary.
The Chairman. Thank you.
Mr. Brown.
Mr. Brown of South Carolina. Thank you, Mr. Chairman, and
thank you, Mr. Secretary for being here today and bringing your
team along.
My question is centered around the Charleston model that we
have been working on for a goodly number of years. We are
grateful for you and Dr. Perlin and others from the VA that
have been down to try to work out some kind of a solution that
will be able to unite some services between the VA and the
Medical University of South Carolina.
We are grateful for Mr. Michaud for coming down, who is now
the Chairman of the Health Committee, and certainly the
Chairman at that time, Mr. Buyer, for his interest and for all
the consolidation and concerted efforts that have been put
forth up to this time.
I know last year as we passed the Construction Bill through
the House and then finally to the Senate, there was a lot of
debate about where we would go with it and finally, at the last
moment, with the help of a lot of people--I am glad Ms. Brown
was in the room as we debated with the Senate--finally come up
with a resolve. And I think at that time, they included some
$36 million for the Charleston plan.
And I am just wondering, in this budget, with moving
forward the plan that you have for construction for the VA,
where does the Charleston model fit into that?
Secretary Nicholson. Thank you, Mr. Brown.
As you know, I think we have an agreement with the Medical
University of South Carolina to create a new model, a prototype
of sharing medical equipment to avoid the redundancies when we
are essentially collocated. And we expect a final contract for
that, for implementation to be signed by the end of this month.
Thirty-six point eight million dollars has been authorized
for the continued planning and design of a collocated facility
in Charleston, but it has not been appropriated. And we have
not in this budget asked for an appropriation of that money. We
support very much the collaboration. I think it makes a lot of
sense avoiding redundancies, efficiencies and better care by
having more acute care offerings in one location.
But, again, we have to take a look at the whole panoply of
issues and we have a CARES process also that guides us in
prioritizing where new hospitals should go. And our estimate
for the cost of this project would be about $550 million and on
our priority list right now it is not on there.
Mr. Brown of South Carolina. As we listened, you know,
intently to Mr. Baker and his concern with New Orleans, and I
did have the privilege to go there with you to look at the
situation in New Orleans, Mr. Secretary, what we were hoping to
do is be proactive in this location. We recognize that
Charleston is in the same hurricane plain as New Orleans and we
would be devastated with the current VA facilities if, in fact,
we had a similar tide rise as we had in New Orleans.
What we were hoping to do, particularly with the
construction process now at the Medical University, is somehow
or another coordinate some of those construction savings by
including the VA hospital under this same time line. It seemed
like by being proactive, it would save the taxpayers money, not
just from the Federal level, but also from the State level in
order to be able to work in a coordinated method now rather
than try to duplicate the VA hospital at some later date once
the whole plan has been implemented through the Medical
University.
I would hope, Mr. Secretary, that you would be more
proactive in trying to implement some process now to try to get
the process moving along.
Secretary Nicholson. Well, I think, Congressman Brown, that
this opportunity steering group that we have underway would be
a good first step. And if we do some shared facilities, shared
acquisitions, expensive diagnostic equipment and so forth, it
would help demonstrate the value of that kind of collaboration.
We also have a CMOP there in Charleston and we have that
hospital which is generally in pretty good shape. Those that
are new to the Committee may not know. We have 154 of these
hospitals around the United States existing and the average age
is 56 years old. The average age of the hospital in the
civilian economy today is about 14 years. So we have some
hospitals, some Members in the room know, that were built right
after the Civil War. So it is a matter of prioritization. But
we will continue to work it.
Mr. Brown of South Carolina. Okay. And I appreciate that. I
know this hospital is probably in the high 40s itself. And I
know with the planning, as it moves along, you know, will add
another 10 to 12 years to that.
But I am saying there are some economics of scale that we
can all benefit for the taxpayers if we can move that project
forward now, and at least I would hope that we would commit
some kind of design or engineering funding in this
appropriation so we can at least, you know, do something
besides just talk about it.
Secretary Nicholson. Well, if, as I said, it is authorized
and if it is appropriated, we will go to work. That is our job.
Mr. Brown of South Carolina. Thank you very much.
Mr. Boozman, I appreciate you yielding your time for me to
make those questions. Thank you so much.
The Chairman. Thank you, Mr. Brown.
Mr. Snyder.
Mr. Snyder. That is ``Boze'' not ``Booze,'' Mr. Brown,
Boozman. If we start calling him ``Boozeman'' he loses like 11
percent of his vote.
[Laughter.]
Mr. Brown of South Carolina. Yeah. But this is South
Carolina talk.
Mr. Snyder. At least 11 percent.
Mr. Secretary, I appreciate the work that you do on behalf
of veterans. You have been at this long enough now that when
you come before us, you probably can predict what Members are
going to ask certain questions. And I want to follow up on what
Ms. Brown was asking about, which is the research budget. We
have talked about this in past years.
The President's request is for a fiscal year 2008 level of
$411 million out of the VA budget. In fiscal year 2004, that
was $405 million. And so if you just look at the biomedical
inflation rate alone, we are down. That means we are down by
almost $60 million.
And so you can look at this two ways. One of them is that
is $60 million, that is in real dollars, that is real money.
And so I hope you are talking to your researchers about the
level of their morale and what things, you know, could be being
done and what you call the high-priority research projects if
you had the real dollars.
Now, what you all will say is, well, you leverage other
dollars, but there is two aspects to that. Number one is you
expect help from other parts of the Federal budget. You expect
help from NIH because you do not fund properly in your VA line
item for research and have not for several years.
Number two is if you would fund that at a level at least
commensurate with the biomedical inflation rate, you would be
able to leverage more dollars. I will accept your argument that
you leverage moneys.
And so I do not understand why we go through this each
year, that we are not looking to at least keep up with the
biomedical inflation rate.
By the way, you are not alone in this. The Defense budget
came out at our hearing a couple days ago or yesterday with
Secretary Gates that the President's budget and the Defense
budget cuts basic research by 9 percent and applied research by
18 percent. And Secretary Gates was very concerned when he
heard that because he did not--I mean, I do not expect him to
know. I do not expect you to know all these numbers. He did not
know that that was what was being done. He was going to
readdress that.
So, again, please address this issue. Why do you all not
feel a responsibility to at least have the President's number,
your number, keep pace with biomedical inflation, and it has
not done that for several years now?
Secretary Nicholson. Congressman, we look a lot at the
total number and we have been pretty adroit at getting grants
and matching. And if the research budget for 2006 was $1.29
billion, this research budget is up $1.38 billion in 2 years.
So the overall budget----
Mr. Snyder. You mean your prediction of what you will be
able to leverage from other parts of the Federal budget at a
time when we are under great fiscal stress in this country, you
are betting on the ability of pulling dollars from other parts
of the budget?
Why not step forward and say you are right, fiscal year
2004, we have not kept pace with inflation, we are going to
make our budget this year $469 million coming from the VA and
we are going to leverage even more projects? I mean, how many
more beyond the 2,100 high-priority projects could you be
funding if you would do what I have suggested?
Secretary Nicholson. Well, I am going to point out to you,
Congressman Snyder, that we also get money from the private
sector. In fact, in----
Mr. Snyder. I am aware of that.
Secretary Nicholson. It is over $200 million. So it will
not all be dependent on other parts of the Federal----
Mr. Snyder. I did not say it all would. But substantial
portions of it, you are counting on other parts of the Federal
budget.
Secretary Nicholson. I would also like to add that we
analyzed the application of this and 60 percent of this
research contemplated under this, and I think what is true of
that is that what we are spending currently is applicable to
OIF and OEF combatants.
Mr. Snyder. I appreciate what you are saying and I
appreciate your chasing after the dollars from both private and
public funds. But it still does not make sense to me why your
number for medical research and what I think is one of the
great medical research institutions in the world, in the
world----
Secretary Nicholson. Thank you.
Mr. Snyder [continuing]. Does not even keep pace with the
rate of biomedical inflation. It just does not make sense to
me. On another topic, you mentioned the seamless transition
with regard to medical records. Where are we at with regard to
the single exit exam?
Secretary Nicholson. I have a good report for that. That is
working extremely well and expanding and allowing us to be very
timely in the decisions that are coming out of those BDD sites.
We now have that enterprise going at over 140 locations; most
of those being DoD sites pre-
separation mode. We are very pleased with that.
Mr. Snyder. Thank you, Mr. Secretary. Thank you for your wor
k.
The Chairman. Thank you.
Mr. Boozman.
Mr. Boozman. Thank you, Mr. Chairman.
Thank you, Mr. Secretary, and your staff for being here. I
appreciate your hard work.
We had the opportunity to go to Iraq together and I really
enjoyed that. And, you know, when you were there, you were
there not as the former ambassador to the Vatican or, you know,
as the Secretary of the VA, but I was really impressed that
when you, you know, talked with the men and women that were
over there, it was as an old Marine. So I really understand
that you----
Secretary Nicholson. Excuse me. I am not a Marine. I am an
Army Ranger.
Mr. Boozman. Okay. I am sorry. I am sorry for insulting
you.
[Laughter.]
Mr. Boozman. My dad did 20----
Secretary Nicholson. No disrespect to the Marines.
Mr. Boozman. Well, again, as a guy that understands. My dad
did 20 years in the Air Force, so we look down on all of you.
[Laughter.]
Mr. Boozman. But I appreciate the fact that you brought out
that when you look at the record over the past 6 years, the VA
spending has gone up dramatically. And in looking at the fiscal
2007 request when you were here and really got beat up pretty
good about veterans' health and things, the reality is and the
continued resolution, the numbers are the same,
$25,512,000,000, on the total fiscal year 2007 request,
$34,000,000,986. The House actually passed last year
$35,024,000,000 and then we wound up in the continued
resolution with $35 billion.
So I appreciate your leadership on that. We also had the
opportunity of getting a vet center and we are very pleased
with that. And that is much needed. And, you know, there was
some comment and some concern, and I share the concern about
the staffing, that we are able to do that.
But the reality is that staffing is not dependent on you.
It is dependent on whether or not Congress gives you the funds
to staff the center. Is that not right, if we are really----
Secretary Nicholson. Yes, sir. We would have to----
Mr. Boozman. So, again, you know, we cannot have it both
ways, you know.
I have got just a quick question for Admiral Cooper about
the expert education system, the TEES Program. What level of
funding is proposed? And I guess again, what are the milestones
that you hope to accomplish with that? Is that something that
you need to get back with me on or----
Admiral Cooper. I can get back to you with a full answer.
The fact is that the TEES system is one that we are looking
forward to, but it is in really an embryo stage. We are in the
development part of it.
We have the different education programs and the goal is to
be able to settle 90 percent of the claims without any hands-
on. But we have a good ways to go, so let me get back to you
with a more developed answer.
Mr. Boozman. Very good. One other thing real quick,
Admiral. The Independent Living Program. Right now, I guess my
question is, if Congress removed the 2,500 limitation on the
new entrance into the program in the Independent Living, how
many additional FTEs would you require? What would be the cost
involved in doing that?
Admiral Cooper. The limitation is strictly on the number of
people we can bring into the program per year. I do not think I
would need more FTE in order to allow more people to come in,
but it does present a problem over each year when more than
2,500 come in. So the limitation, I think, should be lifted,
but I do not require, as I see it now, more FTE to execute
that.
Mr. Boozman. So that is something that you feel also that
we ought to look at lifting the limitation?
Admiral Cooper. I think it is very important today to lift
that, yes, sir.
Mr. Boozman. Okay. Thank you very much.
Thank you, Mr. Chairman.
The Chairman. Thank you.
Ms. Brown-Waite.
Ms. Brown-Waite. I apologize for responding to an e-mail,
and I want to thank the Secretary for being here.
You know, as we look at the backlog of cases that are
waiting a decision, I wonder how you can justify awarding five-
figure bonuses to senior executives in VBA when there is such a
rising backlog of cases.
Secretary Nicholson. Well, let me review the numbers a bit.
I said that we had 806,000 new claimants in 2006, the highest
number of claimants in 15 years. And that is an extraordinarily
large amount of claims, especially once you know what is
involved in dealing with each one of these. And they did almost
800,000 claims. They completed almost 800,000 claims. So they
did pretty good yeoman work.
We are requesting another 500 people in anticipation of the
continued growth in claims. We are going to make better use of
the VETSNET technology and with that, we will drive that time
down. But that is going to take constant command attention and
a lot of work by trained people.
So I do not think it has been a shortcoming of theirs. It
is not, I do not think, lack of diligence. It is just that it
is a market phenomenon that people have really come in and we
have worked outreach.
I was in San Antonio 2 weekends ago for the dedication of
the new Center for the Intrepid and I did not know they were
going to be here, but there was a very nice display of VA
benefits with several VA employees there handing out materials
to the thousands of servicemembers who will become veterans,
acquainting them with what they are entitled to. They are the
same people that work in our regional office in Houston.
So, you know, they are outreaching as well as processing.
And it is just a matter of the dynamics of supply and demand
and handling the demand, and we are driving down. And we will
have it down to 145 days. So I would defend the compensation
that we gave to those people.
Ms. Brown-Waite. Just a quick question on that. Is the
criteria for the bonuses public information or is it arbitrary?
Secretary Nicholson. I guess I would refer to counsel. I am
sure it is public. It is not secret.
Ms. Brown-Waite. Because you cannot find out what the
bonuses are throughout the system unless you do a Freedom of
Information request. So I just wanted to know if the
information is available, what the criteria actually are for
the bonuses.
Mr. Hutter. Yes, ma'am. The criteria are what we call the
executive core qualifications, and all bonuses are measured
against an evaluation by a senior manager, most of whom are at
this table, of how an executive has met these executive core
qualifications. They measure how well they lead change, how
well they lead, are they results driven, and so forth. And
those are public.
Ms. Brown-Waite. Okay. If you would make sure that my
office gets a copy of that. I have another question. I want to
make sure that my time is not all used up.
The Chairman. If the gentle lady would yield. On behalf of
the Committee, we want to ask for that information to get to
Ms. Brown-Waite. The criteria and the amount of the bonuses----
Ms. Brown-Waite. Correct.
The Chairman [continuing]. All that information, please if
you would get that to Ms. Brown-Waite.
[The information has been provided to Ms. Brown-Waite and
the Subcommittee on Oversight and Investigations in preparation
for a hearing on this subject being held on June 12, 2007.]
Ms. Brown-Waite [continuing]. The people who are enrolled
in VA research. How long did it take to notify Congress? Was
the data encrypted and was it password protected? And, you
know, when did you find out because I know last year when we
were here, it took so long for you to find out. I certainly
hope you found out in an expedited manner. And I would like to
know how soon Congress was notified.
Secretary Nicholson. First let me say that incident is
still under active investigation, and I do not know the
magnitude of it. And it may be larger than that. We just do not
know at this point.
But I will say that the system that we put in place after
the May incident worked and that the response was immediate. I
found out immediately. The IG and FBI were brought into it
immediately. Our team that we have organized for this went into
effect.
Again, the IG is working with the subject and there is some
sensitivity about how public they really wanted this to be
because of the investigation. But virtually everybody knew this
the next day that we----
Ms. Brown-Waite. Who is everybody?
Secretary Nicholson. Well, that is a good----
Ms. Brown-Waite. Who was everybody, sir?
Secretary Nicholson. That is a fair question. Everybody did
not know. We did not want everybody to know it. We notified the
Chairman. We called the four corners, the Chairman of this
Authorizing Committee, the Appropriating Committee in the House
and similarly in the Senate, both Majority and Ranking Members.
I, of course, notified the White House that this had occurred.
So the response to the notifications, I think, were timely this
time.
Again, the whole thing is still under analysis, including
forensic analysis of the devices. It appears it was not all
encrypted. Some of it was. All this is still under
investigation. I would be happy to talk to you about it, I
guess privately or in camera. But the IG has asked us to try to
limit all we know.
The Chairman. Ms. Brown-Waite, I do want to say that the
Secretary tracked me down right away, gave me that information,
I believe in full public disclosure, not just to one person.
But the Secretary did convince me that a short time should
be granted where the investigation could take place, and
publication would harm that investigation. I took his advice on
that, although the information eventually, you know, got out
beyond that.
And then at that point, the Secretary did do a press
release and availability on that. But he notified all the
people. We talked to each other and agreed that he ought to
have that time.
And I think the information through Birmingham got out
faster than they would have wanted it, but we accepted the
Secretary's judgment that some more time--I mean, it was not a
matter of months or weeks. It was a matter of days or hours
that they wanted more time.
We do need to get on to the second panel. Mr. Buyer, you
asked for hopefully one question.
Mr. Buyer. Well, I have got a couple here briefly.
Mr. Hutter, as General Counsel, I want to thank you for the
positive actions you took in the Regional Counsel's Office in
Indianapolis following the security breaches, so thank you very
much for getting hold of that one.
Next is to Under Secretary Tuerk. I would like for you to
tell us about the National Shrine Program, where we stand with
that.
With regard to General Howard, our CIO, Mr. Secretary,
thank you for bringing him.
I note that for the IT account, you list $1.3 billion in
nonpayroll and then $555 million in payroll because you now own
these people. You have the personnel tail now. Does this
include contractors? That is one of my questions.
The other is, there is an inclusion of $231.9 million for
information security in accordance with section 902 of Public
Law 109-461. What exactly is that number? What are you buying
to become compliant?
And the last comment I had really is to you, Mr. Secretary.
So as soon as I finish this comment, Mr. Secretary, if you can
answer those questions.
Mr. Secretary, I want to thank you for a couple of your
initiatives. One is your innovative Coming Home to Work Program
whereby you reach out to the disabled veterans and you get them
into work as they are doing their rehabilitation, tapping into
hope. Thank you very much.
The other is the National Rehabilitative Special Events,
your partnership with the United States Olympic Committee. Your
contacts and your ties with the Olympic Committee have paid
great dividends. You are giving great hope to a lot of disabled
veterans and senior veterans as they participate in your
events.
Now, with this partnership, it helps not only in the
rehabilitation, but it allows them now to aspire to levels
within those sports that they never ever dreamed would be
possible. So I want to thank you for your innovation in both of
those.
Mr. Howard. Sir, your first question regarding the money to
pay for contractors, that money is in the nonpay area. The 555
pays for full-time equivalent of VA employees, but all of the
pay of people, so to speak, as well as material and what have
you is in the nonpay portion for contractors.
Mr. Buyer. I do not understand what that means.
Mr. Howard. In other words, we have many, many contracts,
you know, throughout all of our facilities and some of them are
for equipment. Some of them are for services. Some of them are
for both.
Mr. Buyer. But you have control of that now?
Mr. Howard. Yes, sir.
Mr. Buyer. All right. Thank you.
Mr. Tuerk. Thank you, Mr. Buyer. I am glad to speak to you
about our National Shrine Commitment.
Through 2006, we had expended $99 million on projects with
money that was discretely fenced off for National Shrine
projects. In 2007, we intend to spend another approximately $16
million on National Shrine projects which will bring us up to
$115 million.
Since the consultant's report came out in 2002, which
identified some 928 projects that needed to be done with an
estimated cost of some $280 million, through 2006, we had
completed 269 of those projects.
In this budget request, we are requesting $9.1 million to
be fenced in our operations and maintenance account for
National Shrine projects, and an additional two million to be
expended from our minor construction account for National
Shrine projects.
I would also add, though, Mr. Buyer, that beyond the
projects that are financed with National Shrine money
specifically, everything we are doing in our maintenance
activities, outside of money specifically fenced for National
Shrine purposes, is geared toward improving the excellence of
our cemeteries' appearance.
Furthermore, many of our other construction projects fold
in National Shrine upgrades as part of a larger major or minor
construction project. So the money that is fenced off
specifically for National Shrine projects only tells part of
the story of the progress we are making.
A number that we look at that tells us how we are doing
relates to feedback from the public. And in 2006, 97 percent of
the people we asked in a survey rated the appearance of our
National cemeteries as excellent. We have now set a goal to
achieve a 99 percent response of excellent to that question.
But that summarizes where we have been and where we are headed
and where we are right now.
Mr. Buyer. All right. Thank you, Mr. Chairman.
The Chairman. I thank the panel. And, Mr. Secretary, just
one more followup to Ms. Brown-Waite's issue that she raised. I
wanted to thank you for getting our relationship off to the
kind of start that we talked about by your quick notification
of us.
Again, we may not always agree on what should be public and
what should not, but that communication is vital and I thank
you. It turns out we were all at the same place, so the people
you talked to were able to talk about it. But we appreciate the
real rapid response.
You mentioned round tables. Several other people mentioned
them. We are going to try on the Committee to have problem-
solving sessions as opposed to hearings in which all the
Members of the Committee, the stakeholders such as Veterans
Service Organizations and, of course, the experts from your
Administration would be around the same table trying to say,
well, how do we solve the 600,000 claim backlog, how do we get
to where we all want to be. And I hope that we can try that and
it becomes productive.
Just lastly, as an introduction to the next panel also,
just so the people who put together the Independent Budget and
saw me waving it around for the last 5, 6 years or 8 years or
10 years, I am going to still wave it around even in this seat.
They asked, I think, for a reasonable amount of additional
funding, and I think this Committee when we have to formalize
our own budget submissions will be closer to this figure than
the Administration's figure.
I know that does not pain you to get more money and I know
you have to back the President's budget, but there were some
questions raised, whether it is research or other areas that we
think should be increased, and we will be getting our
submission to the Budget Committee shortly.
Thank you again for being here all morning.
Secretary Nicholson. Thank you, Mr. Chairman.
The Chairman. The next panel may join us. I promised in the
past that the VSOs would come first and let the VA wait for
that, but we will do that in the future.
We want to thank the four groups that took the lead in
putting together the Independent Budget for being here,
Paralyzed Veterans of American, Disabled American Veterans, the
Veterans of Foreign Wars, and AMVETS. Of course, we have The
American Legion to give its thoughts on the budget and also the
Vietnam Veterans of America will also do that.
Again, I thank you for your efforts. We have looked at the
Independent Budget for years and years and it has been closer
to the mark than other budget recommendations. And I think the
Committee's advice to the Budget Committee that we have to do
soon will be much closer to yours. I hope we endorse the
Independent Budget.
I have Mr. Blake from Paralyzed Veterans as first, but
however you have decided to do that.
STATEMENT OF CARL BLAKE, NATIONAL LEGISLATIVE DIRECTOR,
PARALYZED VETERANS OF AMERICA
Mr. Blake. Thank you, Mr. Chairman. Mr. Chairman, Members
of the Committee, on behalf of the four organizations who co-
authored the Independent Budget, I would like to thank you for
the opportunity to testify today on the healthcare
recommendations for fiscal year 2008.
Before I begin, I would just like to mention that in the
spirit of openness and cooperation, the IB VSOs extended an
invitation last week to all the Committee staff and to all of
the LAs for the Members of the Committee to come to a briefing
where we could lay out the recommendations for the Independent
Budget in advance of the President's budget release.
I feel like by doing that, it fosters more cooperation
among us all. I feel like the only way we can really get to
where we need to go is for us to work together to get there.
Unfortunately, even as we testify today, the Appropriations
Bill for fiscal year 2007 has not been completed. Despite a
positive outlook outlined in House Joint Resolution 20, the VA
has been placed in a critical situation where it is
cannibalizing dollars for other accounts to continue to provide
medical services, jeopardizing not only the VA healthcare
system but the actual healthcare of veterans.
For fiscal year 2008, the Administration has requested
$34.2 billion for veterans' healthcare, about a $1.9 billion
increase over the levels established in House Joint Resolution
20. Although we recognize this as another step forward, it
still does not meet the recommendations of the Independent
Budget.
For fiscal year 2008, we recommend approximately $36.3
billion, an increase of $4 billion over the 2007 level
established in House Joint Resolution 20 and approximately $2.1
billion over the Administration's request.
For fiscal year 2008, the IB recommends approximately $29
billion for medical services. Our medical services'
recommendation includes $26.3 billion for current services,
$1.4 billion for the increase in patient workload, 105 million
for additional FTE, and a $1.1 billion increase for policy
initiatives.
For medical administration, the Independent Budget
recommends approximately $3.4 billion and, finally, for medical
facilities, the IB recommends approximately $4 billion.
This recommendation also includes an additional $250
million above the fiscal year 2008 baseline in order to begin
to address the nonrecurring maintenance needs of the VA.
Although the Independent Budget healthcare recommendation
does not include additional funding to provide for the
healthcare needs of category eight veterans now being denied
enrollment into the system, we believe that adequate resources
should be provided to overturn this policy decision.
VA estimates that more than one and a half million category
eight veterans will have been denied enrollment into the system
by fiscal year 2008. Assuming a utilization rate of about 20
percent in order to reopen the system to these deserving
veterans, the IB estimates that the VA will require about 366
million discretionary dollars.
Although not proposed to have a direct impact on veterans'
healthcare, we are deeply disappointed that the Administration
chose to once again recommend an increase in prescription drug
co-payments from eight to fifteen dollars and an index
enrollment fee based on veterans' incomes.
Although the VA does not overtly explain the impact of
these proposals, similar proposals in the past have estimated
that nearly 200,000 veterans will leave the system and more
than one million veterans will choose not to enroll.
It is astounding that this Administration would continue to
recommend policies that would push veterans away from the best
healthcare system in the world. Congress has soundly rejected
these proposals in the past and we urge you to do so once
again.
For medical and prosthetic research, the Independent Budget
is recommending $480 million. This represents a $66 million
increase over the 2007 level in the continuing resolution and
$69 million over the administration's request for fiscal year
2008.
We are very concerned that the medical and prosthetic
research account continues to face a virtual flat line in its
funding level. Research is a vital part of veterans' healthcare
and an essential mission for our National healthcare system.
In closing, to address the problem of adequate resources
provided in a timely manner, the Independent Budget has
proposed funding for veterans' healthcare be removed from the
discretionary process and be made mandatory.
The budget and appropriations process over the last number
of years demonstrates conclusively how the VA labors under the
uncertainty of how much money it is going to get and equally
important when it is going to get that money.
In the end, it is easy to forget that the people who are
ultimately affected by wrangling over the budget are the men
and women who have served and continue to serve in harm's way.
Mr. Chairman and Members of the Committee, 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 appears on p. 97.]
The Chairman. Thank you, Mr. Blake.
Commander Morin of The American Legion needs to get a
plane, so we will hear from you next. Thank you, sir.
STATEMENT OF PAUL A. MORIN
NATIONAL COMMANDER, THE AMERICAN LEGION
Mr. Morin. Thank you, Mr. Chairman and Members of the
Committee. Thank you for allowing me to testify before you
today on the President's fiscal year 2008 budget request on
behalf of The American Legion.
I will summarize and respectfully request that my complete
statement be placed in the record.
I trust each of you share the frustration of the veterans
community over the imperfect budget process that is currently
in place. Today we are here to discuss the fiscal year 2008 VA
budget. At the same time, Congress is still considering the
fiscal year 2007 budget 4 months after the start of the fiscal
year.
Operating on a continuing resolution makes it very
difficult for the Department of Veterans Affairs to serve
veterans in an optimal manner.
Praise of the VA healthcare delivery system continues to be
expressed by medical experts and prestigious journals. However,
across the country, VA officials are encouraged to try to
outwit, outplay, and outlast the Federal budget process.
Who will get how much and when is hardly the best business
practice for an industry leader in providing healthcare and
conducting research.
The President's budget request for fiscal year 2008 calls
for medical care funding at $36.6 billion, which is about $1.8
billion less than The American Legion's recommendation of $38.4
billion.
As the leader of America's largest veterans' organization,
I want to express The American Legion's thanks to the President
for recommending a level of funding similar to that of which we
proposed for medical care. The major difference is that the
President's budget request continues to offset the
discretionary appropriations, its medical care collection fund
goal of $2.4 billion, whereas The American Legion considers
these funds as a supplement since they are for treatment of
nonservice-connected medical conditions.
Mr. Chairman, as you are aware, the President's fiscal year
2008 budget has proposed enrollment fees which would require
some veterans to pay from $250 to $750 each year for VA
healthcare. The proposal would also increase co-payments for
prescription drugs to $15.00. Congress rejected similar
proposals last year and The American Legion urges you to do the
same this year.
With respect to another issue of importance, The American
Legion remains steadfastly in support of achieving adjudication
of VA disability claims. As a nation at war, the expectation of
increasing the number of new disability claims is obvious. The
newest generation of wartime veterans rightly deserve timely
adjudication of their claims.
Again, the Secretary, Congress, and the veterans community
must work toward meaningful solutions to the ever-increasing
backlog of veterans' disability claims. Increased funding and
additional staffing is a solid first step toward change, and
The American Legion appreciates the proposed increases in
funding and additional personnel included in the President's
budget.
The purpose of my being here is to discuss the President's
budget, reaffirm The American Legion's budget recommendations,
and continue to urge you and your colleagues to adequately fund
the Nation's best healthcare delivery system, 7-year CARES
construction plan, medical and prosthesis research, State
Extended Care Grant Program, State Veteran Cemetery Grant
Program, VA claims and adjudication process, and a national
Cemetery Administration.
Each of these important areas is discussed in detail in our
full statement. We are a Nation at war. Each of these budgetary
concerns is clearly a part of the ongoing cost of war.
Since becoming The American Legion's National Commander in
August, I have traveled across the Nation and overseas visiting
with active-duty servicemembers, Reserve, and National Guard
troops, veterans and their family. I am pleased to report that
they all continue to do what this Nation expects of them. The
men and women of the Armed Forces are truly dedicated
professionals.
Veterans also continue to serve this Nation. You see them
at burial details providing honors for their fallen comrades.
You see them in the VA hospitals as volunteers. You see them
responding to natural disasters to lend a helping hand. And you
see them running programs that benefit children and youth of
our country.
Mr. Chairman, we must never forget that the families also
continue to serve. In many ways, their service is far more
demanding both emotionally and physically. Many survive those
who have made or will be making the ultimate sacrifice in
uniform of this Nation.
The American Legion budget recommendations that I presented
in September 2006 are based in large part on the findings of
boots on the ground, visits to medical facilities. We have
found that the quality of treatment and service remains
impressive. But the timely access to care is inconsistent at
best.
In addition, there are many deserving veterans locked out
of the system because of the means test. They are categorized
as priority eight veterans. These honorably discharged
veterans, most, if not all, with the means of providing third-
party reimbursement are prohibited from enrolling in the VA
healthcare system. This includes, among others, military
retirees and wartime veterans.
Welcoming the newest generation of wartime veterans into
the VA healthcare system is the right thing to do, and The
American Legion supports the legislation that will extend VA
healthcare from 2 years to 5 years for returning servicemembers
in the current Global War on Terrorism. However, denying this
group of eligible veterans access to the system is wrong.
Mr. Chairman and Members of the Committee, I know you may
question how would we pay for reopening access to all eligible
veterans. One way is quite simple. It is widely reported that
the cost of VA medical care is approximately $2,000 less per
patient than that of Medicare. If so, VA could be annually
saving Medicare approximately four billion in mandatory
funding. Should additional Medicare eligible veterans be
enrolled, the potential savings to Medicare would be increased
as well.
Clearly allowing the VA to collect third-party
reimbursements from Medicare is not only a cost savings
measure, it is the right thing to do. The American Legion urges
this Committee to explore the concept of Medicare
reimbursement.
Mr. Chairman, as I mentioned at the beginning of my
statement, the budget process is not working as it should. The
American Legion strongly believes changing VA medical care
funding from discretionary to mandatory funding would go a long
way toward healing the currently crippled budget process. And
as we submit to members the booklet put out by a majority of
the Veterans Service Organizations on assured funding.
President Lincoln's words, to care for him who shall borne
the battle, guided the efforts of more than 218,000 VA
employees who are committed to providing the best possible
medical care, benefits, social support, and lasting memorials
to veterans and their dependents and recognition of honorable
service to this Nation.
The American Legion looks forward to working with this
Committee to ensure that these dedicated VA employees have the
resources they need to carry out their important mission.
Thank you, Mr. Chairman, for this opportunity to comment on
the President's fiscal year 2008 budget request for the
Department of Veterans Affairs.
[The prepared statement of Mr. Morin appears on p. 82.]
The Chairman. Thank you, Commander, and thank you for what
you do for your membership and our Nation's veterans.
Mr. Brian Lawrence from the DAV.
STATEMENT OF BRIAN LAWRENCE, ASSISTANT NATIONAL LEGISLATIVE
DIRECTOR, DISABLED AMERICAN VETERANS
Mr. Lawrence. Mr. Chairman, Members of the Committee, on
behalf of the 1.3 million members of the Disabled American
Veterans, thank you for the opportunity to present the
recommendations of the 2008 Independent Budget and compare them
to the President's proposed budget for veterans' programs.
As you know, the IB is a budget and policy document that
sets forth the collective views of the DAV, AMVETS, Paralyzed
Veterans of America, and the Veterans of Foreign Wars. Each
organization has a principal responsibility for a major
component of the budget. My testimony focuses on the Veterans
Benefits Administration.
The President recommends that funding for VBA be increased
by approximately $30 million. Obviously we are quite pleased
that the President shares our perspective that increased
funding is needed. Our recommendations for increases exceed the
Administration's both in overall dollar amounts and numbers of
employees. However, our differences are relatively minor
compared with other areas of the Federal budget.
We hope that such minor differences can be resolved during
the upcoming budget cycle in favor of disabled veterans who
will rely on the services that VBA provides.
The IB recommendation for overall VBA funding is $1.9
billion as compared to the President's recommendation of $1.2.
Differences in our recommendations are primarily due to the
following reasons:
One, the IB anticipates a continuation of a high number of
disability claims. We based these estimates on two factors,
ongoing hostilities in Iraq and Afghanistan and an aging
veterans population. The Administration also expects an
inclined rate in the number of claims, but does not expect it
to be as sharp as in past years.
The other reason for differences between the IB and the
Administration's numbers is that we believe VA Rating Board
personnel should concentrate more on making accurate decisions
and less on producing high numbers. Therefore, our ratio of
workers to claims is larger than the Administration's,
resulting in a higher number of full-time employees.
Along with recommendations for funding levels, the IB makes
several suggestions for policy improvements. Since I am running
short on time, I am going to focus on just the recent enactment
of the provision allowing attorneys into the claims process. We
are deeply concerned about the negative impact this might have.
The VA claims system was designed to be open, informal, and
helpful to veterans. It is reasonable to expect that the
involvement of fee-charging lawyers and agents will impede
productivity in the claims process and further bog down the
system and eventually lead to the need for even more increases
in staffing.
For example, VA will have the responsibility of oversight
and administration of fee agreements under which the Secretary
is to pay the attorney directly from past-due benefits awarded
to the veter- an.
Added costs to do so are likely to be substantial without commen
- surate added advantages or benefits for either the VA or
veterans.
We hope that such unintended consequences will be
considered by the Committee and this provision would be
repealed. Once again, we appreciate the Committee's interest in
these issues and we appreciate the opportunity to testify
today.
Thank you.
[The prepared statement of Mr. Lawrence appears on p. 93.]
The Chairman. Thank you. And the full statements of all
will be entered into the record.
Mr. Cullinan.
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
distinguished Members of the Committee. On behalf of the men
and women of the Veterans of Foreign Wars and the constitute
Members of the Independent Budget, I thank you for holding
today's most important hearing. This is truly an essential
component in doing the right thing by America's veterans.
Before I go into the construction budget, Mr. Chairman, I
would like to again publicly thank you for restoring our joint
hearings. We communicate with you and the various Members of
this Committee and the Congress, all of us, the VFW, all of us
do in a variety of ways directly, indirectly through hearings,
through a lot of staff interaction, our grass roots. But these
joint hearings are about more than just communication. They are
very important, symbolic events for our membership to see their
nationally elected leader present to you, the Congress.
And I think that this event is also emblematic of the
special relationship that the veterans community has with
Congress, so it reflects well on all of us. So, again, I just
want to thank you for that.
I have a little aside on that matter too. The VFW's
national commanders have been presenting over in the Senate for
the past 3 years, and they have done a terrific job over there
helping us out. But the truth be known, they do not have a room
big enough for all of our people to fit into. So the prospect
of being back in the caucus room again is again heartening. So
I just thought I would mention that too.
Getting to the construction programs, the Department of
Veterans Affairs construction budget for the past year has been
dominated by the capital asset for enhanced services, CARES.
Through the CARES process, the IB VSOs were greatly concerned
with the underfunding of the construction budget.
Congress and the Administration did not devote many
resources to VA's infrastructure, preferring to wait for the
final result of CARES. In past IBs, we warned against this,
pointing out that there was a number of legitimate construction
needs identified by local managers of VA facilities. A number
of facilities were authorized, including the House passage of
the ``Veterans Hospital Emergency Repair Act,'' but funding was
never appropriated, with the ongoing CARES review being used as
a justification.
Within this context, while pointing to the fact that this
is generally a very good budget, the President's budget, for
VA, unfortunately, the construction portion is far from
adequate.
Mr. Chairman, in constructing the IB, we looked to our in-
house resources. We talked to experts outside of the veterans
community. We use industry standards, things like the
PricewaterhouseCoopers study. The Presidential Task Force's
report on construction has been extremely important in helping
us formulate our calculations on how much funding should be
increased.
When we are looking at the condition of VA properties, the
infrastructure, we will look at things like the facility
construction assessment to come up with our general assessment
of what needs to get done for VA. And I think our projections
have been not only good but actually quite moderate through the
years.
The PTF recommends a recapitalization rate about 5 to 8
percent. We are only asking for 4 percent. And, again, in this
context, I think VA has been recapitalizing at something like
half a percent a year, which means the average VA facility
would have to stay functioning for 155 years. And that is just
not going to happen.
So I would argue that our recommendations are indeed
moderate. When I reflect back to 2004, when then Secretary
Anthony Principi testified before this Committee, he said it
would take a billion dollars a year to fund CARES, which was
then just an element of the construction planning process, $1
billion a year.
Since that time, in 2004, they got about 750 million and
every year after that, they have only gotten about half that
much. So there is a real deficit there. There is a real
problem.
The President's budget for medical care, not the entire,
but the medical care portion of the construction is $511
million. The IB is asking for $1.4 billion. Again, that is
about 4 percent of the capital value.
Clearly the President's recommendation, especially with
everything that is going on now and the need to not only
recapitalize, but there are urgent needs. We heard Mr. Baker
speak earlier of what is going down in New Orleans. There is a
lot of need for construction out there, and we have a lot of
buildings that need help.
For example, last year, in the 2007 capital plan, only
eight of the partially funded projects out of the top twenty
got any consideration whatsoever. The cost of these, by the
way, would have been about $700 million. That is eight out of
twenty only got any kind of consideration at all.
In 2008, the $511 million that the President calls for in
his budget would only fund six projects of the twelve partially
funded projects. Six others are not funded at all. And that
plan for 2008 for the scored projects--scored projects are
those projects that have some degree of priority in the VA's
overall scheme of things of what does and does not need to get
built or done--none of the 27 would get any funding at all.
So the short form of what I am saying here is there is no
funding for any new construction in this particular budget, and
clearly that just will not do.
With respect to minor construction, the need for some 300
projects has been identified. I see I am going over my time
here. I am sorry, sir. Has been identified. The IB is calling
for a funding level of $450 million. The President's budget
would only provide for about $180 million for VHA. It is not
enough money.
The last point I will make, and it is an urgent one, with
the initial planning process of CARES, they identified the need
for $2 billion alone for minor construction.
With that, I will conclude. Thank you, Mr. Chairman. Sorry
I went over.
[The prepared statement of Mr. Cullinan appears on p. 99.]
The Chairman. Thank you, sir.
And, Mr. Greineder, from AMVETS.
STATEMENT OF DAVID G. GREINEDER, DEPUTY NATIONAL LEGISLATIVE
DIRECTOR, AMERICAN VETERANS (AMVETS)
Mr. Greineder. Thank you. Mr. Chairman, Members of the
Committee, thank you for the opportunity to be here today.
As a co-author of the Independent Budget, AMVETS is pleased
to give you our best estimates on the resources necessary to
carry out a responsible National Cemetery Administration budget
for fiscal year 2008.
I would first like to commend the committed NCA staff who
provide the highest qualify of service to veterans and their
families in times of tremendous grief. The devoted staff
provides aid and comfort to hurting families in very difficult
times, and we thank them for that.
The Administration requests approximately $166.8 million in
discretionary funding for operations and maintenance of NCA, as
well as $32 million for the State Cemetery Grants Program.
The Members of the Independent Budget recommend Congress
provide $218.3 million for the operational requirements of the
NCA, a figure that includes our national Shrine initiative. In
total, our funding recommendation represents a $51.5 million
increase over the Administration request.
The National Cemetery system continues to be seriously
challenged. Though there has been noteworthy progress made over
the years, the NCA is still struggling to remove decades of
blemishes and scars from military burial grounds across the
country. Therefore, we again recommend Congress establish a 5-
year, $250 million National Shrine initiative to restore and
improve the condition and character of NCA cemeteries. We
recommend $50 million in fiscal year 2008 to begin this
important initiative.
By enacting a 5-year program with dedicated funds and an
ambitious schedule, the National Cemetery system can fully
serve all veterans and their families with most dignity,
respect, and compassion.
For funding the State Cemetery Grants Program, the
Independent Budget recommends $37 million for fiscal year 2008.
The State Cemetery Grants Program is an important component of
the NCA. It has greatly assisted States to increase burial
services to veterans, especially those living in less densely
populated areas not currently served by a national veterans
cemetery.
Many States have difficulty meeting the 170,000 veterans
within 75 miles requirement for a national cemetery, which is
why the State Grant Program is so important. Since 1978, the VA
has more than doubled the acreage available and accommodated
more than 100 percent increase in burials through these grants.
The Independent Budget also strongly recommends Congress
review a series of burial benefits that have seriously eroded
in value over the years. While these benefits were never
intended to cover the full cost of burial, they now only pay
for just 6 percent of what they covered when the program
started in 1973.
These recommendations are contained in my written
testimony, but I would like to say our recommendations which
represent a modest increase would restore the allowance to its
original proportion of burial expense about 22 percent, and
tell veterans that their sacrifice is given the appreciation it
so well deserves.
The NCA honors veterans with a final resting place that
commemorates their service to this Nation. More than 2.7
million soldiers who died in every war and conflict are honored
by a burial in a national cemetery. Each Memorial Day and
Veterans Day, we honor the last full measure of devotion they
gave for this country. Our national cemeteries are more than a
final resting place; they are hallowed grounds to those who
died in our defense and a memorial to those who served.
Mr. Chairman, this concludes my statement.
[The prepared statement of Mr. Greineder appears on p. 79.]
The Chairman. Thank you.
And, finally, the National President of the Vietnam
Veterans of America, Mr. John Rowan.
STATEMENT OF JOHN ROWAN
NATIONAL PRESIDENT, VIETNAM VETERANS OF AMERICA
Mr. Rowan. Thank you, Mr. Chairman, Mr. Buyer, and the rest
of the Members of the Committee.
VVA, of course, is interested, and we have seen you swap
chairs. One of you moved over to the left, left to the right.
But we hope that the Committee as always will continue to work
on behalf of veterans, and I believe that in a bipartisan,
nonpartisan, whatever you want to call it, we have hope that
you will work together to help us do the best we can.
You have my statement, which will be added. I would also
appreciate it if you could add into our official statement a
report that was put out by Ms. Linda Bilmes from the Harvard
University School, John F. Kennedy School of Government called
``Soldiers Returning from Iraq and Afghanistan, the Long-Term
Cost of Providing Veterans Medical Care and Disability
Benefits.'' If we could have that added into the record as part
of our statement----
The Chairman. Without objection, that will occur.
[The report by Linda Bilmes appears on p. 285.]
Mr. Rowan. It is very clear from looking at that study of
the new veterans that we also need to go back and get Congress
to reauthorize, or it has been authorized, to get the VA to
finally complete the Vietnam veterans longitudinal study
because that, too, we believe, will show the problems of the VA
long term in their fiscal needs to deal with the problems of
veterans long after the war has been over.
It is within that regard that we talk about some of the--it
is interesting. My five colleagues, one of them had to leave,
we really appreciate a lot of the work done by the Independent
Budget and group and go along with a lot of what they are
saying. We just think we need a little bit more than what,
frankly, they are asking for.
And we are looking particularly in the medical services
alone almost seven billion extra, and we believe it is needed
for many different reasons, not the least of which is that we
do not believe that the increase in demand that the VA was even
considering when the VA developed their budgets in the last
several years and including even the new one.
And it is not just the demand of the OIF or OEF new
veterans coming out. It is the demand of the Vietnam veterans
who are now coming to deal with the terms that they have
received for having been exposed to Agent Orange, in my case 40
years ago. Many of us now are coming down with all of these
conditions that are related to our service in Vietnam that are
now causing us to go to the VA.
I would be very interested to see that 800,000 claim number
broken down into who actually reported new claims. Who are
they? Obviously I think the number that was mentioned was 200
and something thousand of the new vets coming in by the
Secretary. That means there has got to be about another 500,000
older veterans, coming into the system for the first time many
of them. And we are coming in with our diabetes and our
prostate cancer and all of these other issues.
And to get back to the priority eights question, many of
those people would be seven and eights because they have never
had any problems until now all of a sudden they face these
problems as they get them again in their later years.
And even in the sevens, the zero percent disability people,
it is interesting how many of them get a hundred percent, for
example, prostate cancer and then drop back down to zero when
they go through treatment. But they have to be monitored for
the rest of their lives. They should be monitored in the VA
system and not be forced to go out to the outside system if
they have their own healthcare.
So that is part of it. Again, part of our assessment of why
we need additional money, in the budget, supposed budget
savings the last time around, the so-called management
efficiencies, they were not management efficiencies. They were
staff deficiencies, because often when you go out to the VISN
levels, you found that these people were cutting staff to
accommodate their budget.
And that is one of the reasons why we see a lot of places
where they are having difficulty finding enough doctors, enough
nurses, getting the people to get into those clinics, why we
are seeing times being dragged on again with people not getting
clinic appointments in reasonable time frames.
And there are a whole bunch of other things that we think
is just medical inflation. They do not keep up with it. We also
think they use wrong formulations in the fact that they do not
take into consideration we are not like the general population.
Again, going back to the Vietnam veterans issues and even
to some of the newer veterans, we have more healthcare issues
than the general public does and we are coming down with them
as we get older and, unfortunately, because of our exposures,
either in Vietnam or in the Gulf War, to whatever was out
there.
And one of the things on a smaller note, we would like to
see the 300 million go back in to restore the services for
Agent Orange exposed veterans. We want to bring these veterans
into the system, many of them for the first time. They have
just never gone there. Some of them, you know, just again what
is a disabled veteran?
If you got out of the war and you managed to walk away from
Vietnam and you did not get shot and you did not get hurt and
you figure I am safe, I am good to go, you come home and 30
years later, you have got prostate cancer or you have got
diabetes and you have got neuropathy and all of these other
things are hitting you, and you read in the paper, well, it is
because everybody has got diabetes or prostate cancer is now on
television, everybody has got it, I am just getting old. No.
You got it probably because you stepped foot in Vietnam 40
years ago and that is why you got it.
We have a presumption of it. You are entitled to
compensation for it. And if you are not in the system and you
are not getting treated by the VA and even sometimes when you
are treated by the VA, the doctors there do not know that you
are entitled to compensation for some of these things.
So we would urge you to take a look at all of that and
particularly to deal with these newer veterans with some of
their mental issues too. We do not believe anywhere near enough
money is going to the mental health questions, to dealing with
their PTSD problems or other problems when they come home.
And, again, I just look forward to working with the new
Committee and its new reconstruction, but, really old friends
on the Committee on both sides of the aisle. And as we go
forward, we are looking forward to seeing your working groups
that you are talking about having.
Thank you.
[The prepared statement of Mr. Rowan appears on p. 105.]
The Chairman. Thank you. Thank all of you.
John, you used the phrase ``step foot in Vietnam.'' Did you
do that explicitly because there is some concern over those who
were in the Navy that maybe have been affected and did not step
foot and, therefore, are not entitled to----
Mr. Rowan. Well, there is a lot of discussion about
stepping foot in a lot of places. Unfortunately, the law says
now you had to step into the place.
And there is an issue with regards to the Navy. There is
also an issue with regards to people in other places. We are
finally seeing more and more recognition of Korea, for example.
We are finding out about all kinds of other exposures even in
the stateside places.
There is a real question somebody brought up to me one
time. I forget what islands it was now. It was either
Marshall's or some place where again they stored this stuff
while it was in transit and some of them are saying that they
have been exposed to it there.
The key question I believe is in the Vietnam veterans
longitudinal studies. If we went back to that study and
completed that study, we may find out a lot more information.
If we look at our colleagues in Australia who have done a
tremendous amount of work on this stuff, we would see that, not
only for the Vietnam veterans but for their family members.
One of the things that still bothers us is that, you know,
we only have spina bifida as the only example of an issue of
secondary problems with relation to exposure to Agent Orange.
Talking to a lot of our Vietnam veterans, we believe there is a
lot more out there in that regard for a lot of other child
illnesses that ought to be covered.
The Chairman. Thank you.
I would yield to Mr. Michaud.
Mr. Michaud. Thank you very much, Mr. Chairman.
A question for anyone from the Independent Budget. Looking
at the number the Secretary gave us this morning of the $1.7
billion to restore priority eights compared to what the
Independent Budget gives for a number, why such a disparity in
the numbers?
Mr. Blake. The $1.7 billion, I assume, includes the total
amount for collections that would be received from that group
of veterans that come in. The $366 million that we project is
actual discretionary dollars.
We have done some analysis to determine what we believe the
total cost would be if the amount that would be received in
collections from those veterans were brought into the system.
We projected about $1.1 or $1.2 billion, but for real
discretionary dollars for that group of veterans, we estimate
about $366.
Mr. Michaud. A question for Mr. Blake. You had mentioned
that the enrollment fees will drive veterans out of the system.
These enrollment fees and co-pays are different than what were
presented in previous budgets.
Do you really think that if someone is making $200,000, if
they have to pay a $750 enrollment fee, it is going to drive
them out of the system?
Mr. Blake. Well, I would probably say that if somebody is
making $200,000, I would believe that they probably have other
healthcare to begin with. But that is not necessarily the case.
To be perfectly honest with you, I believe this is a question
that we are going to have to address this year.
Kind of addressing what Mr. Buyer had brought up about this
earlier, I think this is a case of where the Independent Budget
just principally disagrees with the idea that these fees and
co-pays should be increased or added. I would say that our
response to the idea that it is an equalization with the
retirees, 20- and 30-year retirees, that that question--our
answer to that would be, well, if you want to equalize it, then
remove the fees for those 20- and 30-year retirees, and then
they are still equal. It is just a different way to accomplish,
I guess, the same thing.
And I am not certain that I believe the idea that it is
strictly for a government management tool. I mean, I still
believe that there is obvious budget implications that go along
with these. So we recognize that this is an issue that is going
to have to be addressed.
I have to say from my perspective I find it not amusing,
but quite interesting that the VA chose the method that they
did to--they made it easy for Congress to reject these co-pays
and fees because they do not have any immediate impact on the
discretionary budget of the VA healthcare system.
So I think they recognize the will of Congress with this
issue and, yet, they continue to push the issue, and it
concerns us that ultimately it would still force people to
leave the system. I do not believe they have factored into that
200,000 who would leave the
system, that does not necessarily include the higher-
income veterans.
There are a lot of veterans who are on the margin who would
probably fall into that category of veterans that would leave
the system. But we do not have an exact analysis of how that
would impact it. It would be kind of interesting to see maybe
how that would play out over time.
Mr. Michaud. And if we could, Mr. Chairman, request from
the VA, I would be interested in finding out, since they did
break it out to under $50,000, between $50,000 and $74,999, the
number of veterans falling in those categories because I do not
believe it is going to drive them out, if they are making
$200,000, of the system.
My next question is, and I know Mr. Lawrence brought it up,
on attorney fees, and I know the VSOs are split on allowing
attorneys to get involved into the system, how often do you
think attorneys will get involved in the system? Do you think
there is going to be a huge influx of attorneys or do you think
it might be on an occasional basis?
I guess I will ask those who are against them, and I guess
the veterans who are in favor of the attorneys being involved
in the system exactly how do you think the attorneys will be
involved in the system?
Mr. Lawrence. Well, their money, their funding comes from
retroactive payments that the veteran would get, and there are
some sizable retroactive benefits. And some of them, I mean,
they would cherry pick. That is one of our concerns. You know,
an attorney is not going to represent somebody that they do not
see, you know, a payout at the end.
We represent everybody and, you know, we provide a service.
And I can see attorneys not doing that, cherry picking through
the system, abusing the system, maybe even delaying claims
longer so that the retroactive amount is larger.
And, you know, it is conceivable that it would come to the
point where people would feel they needed an attorney to
accomplish something that should not require an attorney. As I
stated, it is an open and simple system. And I just do not see
how adding attorneys to that process would improve it.
Mr. Cullinan. Mr. Michaud, the VFW is also in the against
them camp, so I would like to speak to that next. I mean, along
with the prospect of individual abuse, the concern, of course,
is what effect will the introduction of attorneys have on the
system. Will it make it more adversarial? Will it compel our
service officers to play a more litigious approach to, you
know, pursuing veterans' claims.
The other thing I would like to talk about, though, is the
prospect of an underlining irony. You know, in tort claims
actions, you will have firms that are set up and they will come
in representing various individuals in the courts, and
oftentimes they have their own boards of expert witnesses. And
I know there are a couple of examples of this where they are
actually getting involved with veterans' law. I think it is in
Missouri that Joe was talking about.
And what they are doing is they will bring on--its
tinnitus. There is a type of severe tinnitus. This firm, I
think it is in Nebraska, has their own audiologist on board.
And they are representing veterans with a severe form of
tinnitus and, sure enough, their allowance rate is
extraordinarily high.
Now, by extension, I could see this applying to all sorts
of other things. Take individual unemployability. For example,
you could suddenly have attorneys getting very successful at
representing lots of veterans before VA where suddenly I, you
who might not have--and it costs the government then. And the
consequences that could have for the survival of the system are
a little bit daunting.
Mr. Greineder. Mr. Michaud, AMVETS is also against the
attorney bill that passed back in December. We join our
colleagues at the DAV and VFW against it. And we actually
passed a national resolution at our convention in August
against the bill.
One of our concerns is that any good lawyer entering the VA
system will use the system to their advantage and, you know,
causing more delays. We are already at a 600,000 backlog, so we
are concerned about entrance of lawyers, what that will do to
the system.
Mr. Rowan. We take the exact opposite opinion, I guess,
from my colleagues. We have been always in favor of Vietnam
Veterans of America bringing lawyers into the system. We think
that veterans are entitled to legal representation like anybody
else.
And one only has to look at the Social Security system
where lawyers have been brought in and nothing disastrous has
occurred, and we have not seen people running amuck. In fact,
what we have seen is people finally getting their due.
Having been service rep and done claims work, anybody who
says that system is not adversarial, boy, I tell you, it seemed
to be very adversarial.
And the other thing is, when you are filing claims and
doing all that claims work, anything beyond the simplest claim
and the most presumptive claims, for example, you are getting
into some very interesting areas where you are writing briefs.
Really good service reps who have been out there are
practically parallels. They have to read law. They have to read
sections of Title 38. They have got to quote things all over
the place.
We are really looking at, when we get into the appeals
level of things, when you are up to the Board of Veterans
Appeals, you are talking to attorneys all the time. In the
Court of Veterans Appeals, you have got to be an attorney. I
mean, who are we kidding here? I mean, attorneys are all over
this place. They are all over the VA. They are the ones who are
writing half the Title 38 in the first place. So attorneys are
everywhere in the system except on our side of the table most
of the time.
The other thing is, you know, the gentleman just said what
happens if we get all of these unemployability claims. Well,
they are not going to get accepted unless they have got some
legitimacy. Just because a lawyer goes in and brings the claim
does not mean we are going to win.
And if they are winning all these claims that they deserve,
then that only means the system undeservedly kept veterans out
from getting their due.
So, you know, I think it needs to be watched, monitored
very clearly. The Bar Association has to get involved, and
these lawyers cannot just be any lawyer. They need to go
through some kind of training. We think that they ought to have
that. But they would
end up having some sort of practicality like Social Security law
yers.
I had to go unfortunately through a process with my son who
had a problem when he crushed his foot in a motorcycle accident
and had to go on Social Security Disability, and we had to
bring the lawyers into the system because there is no other way
to beat
that system. They just beat you down with all the legal aspects
of it.
And so, you know, unfortunately, the adversarial manner of
the VA at certain levels, when you get into certain types of
claims, you may very well have to have somebody able to write a
really good legal brief to get past them. And so we are in
favor of it. We do not think it is going to clog the system or
make it any worse than it already is.
The Chairman. Thank you. This is a subject we have not
exhausted yet.
Mr. Buyer.
Mr. Buyer. Thank you.
It is unfortunate The American Legion Commander had to
leave to catch a plane. I think this was the first time in 15
years that I have been on this Committee that an American
Legion Commander has testified at a budget hearing, and so I
want to thank The American Legion Commander for coming.
Up until the last Congress, Mr. Rowan, is the first time
VVA had ever been invited to sit at the table. And therein lies
part of the challenge this Committee has had. You have got the
Independent Budget. We try to go through this budgetary
process, but there are many Military Service Organizations and
other organizations that get excluded and they do not get to
this table.
So, Mr. Cullinan, therein lies the huge difference between
a philosophical approach. You choose theater over substance.
Now, I understand as a military man the importance of a
military parade. I am going to put on my uniform here in about
10 days, so I understand what a military parade can do,
discipline, command and control, all those things are
important.
But to this Committee, the most important thing is for us
to get timely input. And if you think that your input is the
only input--actually, I do not think you believe that. But
right now that is all we get. We just get the Independent
Budget, The American Legion, and yours. And there is a whole
bunch of other input that we need.
But, yet, what is going to happen? We do not get that input
until much later and it is going to be done in theater whereby
the Commander then plays to his audience, i.e., the Members. We
sit there and listen as the Commander plays to his audience,
and then they give us input. But the input is now after the
budget process has already been done, so now you have been
relegated to the back bench and all you can do is play the part
of the critic.
And you cheer that. You say that is wonderful. That is
great. I get my theater. I get to be a critic. No. I want you
to participate substantively in the process, not just you, but
the 20 VSOs and MSOs. The Military Service Organizations have
been excluded from this process. And I am stunned now. I put
together a process to bring them in and now they are being
silenced.
I mean, let me just say this. In the 2 years that I chaired
this Committee, here are the individuals that actually came
into my office to work with me. It was not anyone from the big
four. It was not anyone sitting at this table. It was not your
organizations. It was General Matz with NAUS. It was Admiral
Ryan with MOAA. It was Mr. Rowan with VVA. It was Rolling
Thunder and the Patriot Guard Riders. That is who would come
into my office and see me.
The only time the commanders of the big four ever came in
to see me is because they wanted to have their joint hearings
back. No one even picked up the phone. No one even came to see
me personally on any substantive issue in the 2 years which I
chaired this Committee. I think that is stunning. I think
America needs to know that.
And so what did I have to do? I had to then put together a
process on how to get their timely input. The best of all
worlds, Mr. Cullinan, would have been to have done joint
hearings prior to our budget views and estimates. I proposed
that. That does not work because you want to do them at a time
when you do your spring conferences when you bring all your
Members out. So I understand all that, and we just could not
get it worked out.
Mr. Lawrence, I need some help. Where did you come up with
FTE productivity being 100 claims per year? Where do you get
that, because that is nine fewer than VBA? So where do you get
that?
Mr. Lawrence. That is just the formula that the IB has
used.
Mr. Buyer. Say again.
Mr. Lawrence. We want claims workers to be able to
concentrate more on quality rather than numbers. So logically
that is going to require them to have a fewer number of claims,
and the estimate that the IB has traditionally used is 100 per
worker, 100 claims per worker.
Mr. Buyer. So it is an arbitrary number?
Mr. Lawrence. No more arbitrary than 109 for the VA. Sir, I
would also like to add--maybe I did not make a great impact on
you when we did meet--but I personally met with you in a
handful of meetings over the course of the last year.
Mr. Buyer. I am referring to commanders. I am referring to
commanders.
Mr. Lawrence. You said nobody at this table.
Mr. Buyer. Nobody at this table who represents national
organizations.
Mr. Lawrence. All right.
Mr. Buyer. I apologize. Thank you for correcting me.
Let me ask a question on burial details. Are your
organizations getting the resources they need for burial
details, ammunition necessary, upgrading of weapons? Can
anybody answer that question?
Mr. Cullinan. I know that it has gotten better. There was a
real problem for a while. For one thing, there was a type of
per diem which was not made available unless certain uniform
members. And that has been corrected, so that has helped quite
a bit.
You know, we would really have to poll our membership,
though, to find out how well it is actually going. We are not
getting a lot of complaints about it, and I know that that
change in law really made a difference for our people. And a
lot of our people who volunteer for these assignments, they are
not wealthy by any stretch of the imagination. This money was
coming out of their own pockets. So that change helped a lot.
Mr. Buyer. All right. Please go back and look at that a
little bit further. If there are things that we need to do from
our standpoint or communicate with the Armed Services Committee
because for this increase the Secretary talked about with
regard to burials, we are going to be responsive to you. Okay?
Thank you.
Mr. Blake. Mr. Buyer, can I make one statement real quick?
Mr. Buyer. Yes, sir.
Mr. Blake. I think I made clear last year that if I know I
am not the subject matter expert on a particular issue, I will
be glad to forward the question along or bring that person with
me the next time.
With regards to your question about the 100 claims per FTE,
I would suggest maybe submit that question to us in writing
because if you look inside the IB, there are a number of people
involved in the writing. And I know who the individual is. I am
pretty certain who the individual is who is responsible for
that section and I am sure he would be glad to give you a
better explanation of your question there.
Mr. Buyer. Gentlemen, your answers, I think, coincide with
the task force, that we want to make sure we get the best
qualified people to adjudicate these claims. And I do not even
know what the number would be if I were an adjudicator. But
thank you.
The Chairman. I want to thank you all. I want to personally
thank everyone at the table for helping educate me over the
last decade about your organizations. I think the Independent
Budget is a tremendous job. As I said, I am going to recommend
that we follow it in our own budget deliberations.
I also want to make sure, everybody, again, thank you for
agreeing to participate. On Monday, at one o'clock, all the
Members of the Committee, Mr. Buyer, are invited to participate
in what I am calling a summit, not a round table, but a square
table, to, in fact, put in writing the agenda that we are going
to pursue as a Committee over the next year.
And we look forward to your participation in that, and we
look forward to working with you. I love commanders, but I love
you all too. And I appreciate that you all will be helping us
as we progress.
Mr. Buyer. Will the gentleman yield?
The Chairman. I yield to Mr. Buyer.
Mr. Buyer. As a gentleman from California, you recognize
the challenges for Members to get back for those votes at 6:30,
so as we do these round tables, I think it is a great idea to
just recognize that Members are returning on these Mondays. So
it makes it challenging for attendance.
The Chairman. I appreciate hearing that, and I complained
about that as a Californian for a long time. So we will make
sure that that is taken into account.
This meeting is adjourned, and we thank you all for
participating.
[Whereupon, at 1:30 p.m., the Committee was adjourned.]
A P P E N D I X
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Prepared Statement of Hon. Bob Filner
Chairman, Full Committee on Veterans' Affairs
Welcome everyone to the hearing on the Fiscal Year 2008 Budget
Submission of the Department of Veterans Affairs.
Secretary Nicholson on Monday characterized the VA's FY 2008 budget
as a ``landmark'' budget.
I applaud the VA for submitting a budget that calls for an increase
for veterans' medical care, unlike the budget it submitted 2 years ago,
and I believe it presents us a framework from which to begin our
analysis as to whether the VA's budget submission will meet the needs
of veterans in the coming fiscal year. Our job as a Committee is to
make sure that as we follow this ``landmark'' we are not led off course
and lose our way.
The VA has requested an increase for VA medical care of $1.9
billion over the level provided for in the joint funding resolution.
This represents a 6 percent increase. The amount we provided this
fiscal year is 12 percent more than we provided in FY 2006. The
Independent Budget and The American Legion both recommend more than a
12 percent increase for FY 2008. The Vietnam Veterans of America
recommend substantially more. I look forward to your explanations as to
why you believe your 6 percent increase will suffice.
Your budget submission states that $1.4 billion of your increase
for medical care is attributable to inflation. Once this is factored
in, your recommended increase leaves precious few dollars to meet the
increasing needs of veterans.
Although the waiting list for new enrollees has indeed declined,
and I applaud you for that, I believe that no veteran should have to
wait for a healthcare appointment simply because the VA does not have
the resources to care for that veteran. Can you assure this Committee
that your budget request has the dollars you need to address this
problem?
Last year, your budget request claimed an additional $197 million
in ``efficiencies'' for FY 2007, for a total of $1.1 billion. This
year's budget submission also claims clinical and pharmacy ``cost
avoidance.'' This Committee would like to know whether you believe you
will achieve these ``efficiencies'' for FY 2007, and what exactly are
your dollar estimates as to your ``efficiencies'' in these two areas
for FY 2008.
In the area of mental health, I see that you are requesting an
additional $56 million for a total of $360 million for your Mental
Health Initiative. Your budget submission also claims that the VA plans
to spend $3 billion for mental health services. The GAO has reported in
November that you failed to fully allocate the resources you pledged in
FY 2005 and FY 2006 for your Mental Health Initiative.
In light of this report, will the VA fully allocate the $306
million for this initiative in FY 2007, and the $360 million for FY
2008? Does the VA currently have the resources it needs to address the
mental healthcare needs of our veterans, especially our veterans
returning from Iraq and Afghanistan?
I must note that I am disappointed that you have once again brought
forward legislative proposals as part of your FY 2008 submission.
Instituting enrollment fees and increasing pharmacy co-payments have
been rejected year after year by Congress. Last year you claimed that
enactment of these proposals would reduce your need for discretionary
healthcare dollars. This year, your proposals are deemed ``mandatory''
spending and are taken out of your overall mandatory spending.
I would like you to explain to this Committee why you have offered
these proposals again, and the policy reasons for deeming the proposed
receipts from these proposals mandatory dollars.
The VA is facing an ever-greater claims processing crisis. In light
of this I would expect your FY 2008 budget submission to aggressively
request additional dollars to address this growing problem. But I see
that your request for General Operating Expenses, which funds claims
processors, is close to $9 million less than the amount provided for in
the joint funding resolution. What steps are you taking to meet this
challenge, and why has the VA not requested a sizable increase in this
account in order to address the claims processing backlog?
Your VA research request seeks less than you will receive under the
joint funding resolution. You should be requesting at least an $18
million increase just to keep pace with inflation. This is especially
true when once again you are seeking more resources from other Federal
sources and the budget for the National Institutes for Health promises
to be static.
I look forward to a full explanation of your Information Technology
request, including transfers from other accounts. We must ensure that
the VA is moving in the right direction in IT and that the funding
level you receive in FY 2008 will lead to better security, more
innovation, and fewer incidences like the one that occurred in
Birmingham, Alabama last week.
I note that you seek increases in both Major and Minor
construction. I know this Committee will be interested in learning how
the VA selected the projects included in the FY 2008 request.
There is much work to be done to ensure that the VA has the funding
it needs in the coming fiscal year, and to ensure that the VA spends
the resources it receives diligently. Mr. Secretary, we look forward to
hearing from you this morning, and to working closely with you to make
sure that the needs of our veterans, those returning from Iraq and
Afghanistan, and the veterans from our previous conflicts, are met.
Prepared Statement of Hon. Steve Buyer
Ranking Republican Member, Full Committee on Veterans' Affairs
Thank you. Mr. Chairman, good morning. I'd also like to welcome
everyone to our first hearing of the 1st Session of the
110th Congress.
Mr. Secretary, I am glad you can be with us today to share with the
Committee the President's proposed budget for 2008. I commend you for
yet again embracing the challenge of improving the VA's budgeting
process. Building on last year's progress, it appears that improving
the integrity of the process has borne fruit with this budget.
Mr. Secretary, as you observe your second anniversary as chief
steward of our nation's veterans we can look back and note that it has
been a year of challenges and successes. I thank you for your
willingness to squarely meet the challenges and commend you on those
successes.
Since this time last year, we passed a major legislative
initiative--Public Law 109-461--the Veterans Benefits, Health Care, and
Information Technology Improvement Act of 2006. This bill was the
result of a bipartisan effort led by this Committee in concert with our
colleagues in the Senate. We listened to 20 VSOs and MSOs and
incorporated many of their suggestions. We authorized 24 major
construction projects in 15 states, approved continued leasing of 8
medical facilities and required VA to explore options for construction
of a new medical facility in San Juan, Puerto Rico. With regard to our
returning Iraq and Afghanistan veterans, we added $65M to increase the
number of clinicians treating post traumatic stress disorder and
improve their training. It further authorizes spending for
collaboration in PTSD diagnosis and treatment between VA and DoD. We
authorized more funding for additional blind rehabilitation specialists
and increased the number of facilities where these specialists will be
located. We expanded eligibility for Dependents Education Assistance to
the spouse or child of a servicemember hospitalized or receiving
outpatient care before the servicemember's discharge for a total and
permanent service-connected disability. The intent here was to help
enhance the spouse's earning power as early as possible before
discharge of the servicemember.
We made chapter 35 more flexible for spouses and dependents, we
restored the entitlements for members of the National Guard and
Reserves who are called to active duty during the school year, we
extended work study provisions to ensure a veteran didn't lose a job
during the school year, and we required VA to report ways
to streamline administration of the GI Bill to shorten the time to get t
hat first check.
Some expressed concerns about veterans ability to afford a home so
we authorized VA to guarantee co-op housing units which are often the
most affordable housing in many areas.
Many asked us to help veteran, especially service-disabled veteran-
owned businesses, so we gave VA the tools to increase the amount of
business they do with veterans by giving service-disabled veteran-owned
businesses preference over all other set-aside groups and ensuring the
survivors of veteran businessowners who acquire ownership continue
their veteran-owned status with VA.
Service organizations also expressed the need to revitalize the
veterans employment programs at the Veterans Employment and Training
Service. So, we made several changes to strengthen mandatory training
for DVOPs and LVERs, revised the incentive program to make it more
effective, and established a pilot licensing and credentialing program.
And VVA especially, noted that DOL needed to develop regulations to
implement the Jobs for Veterans Act. We did that too.
Since this time last year, we have seen the Department embrace the
idea of centralizing its IT under the VA's CIO. I believe that this
innovation will be seen as part of your legacy to the Department of
Veterans Affairs. As part of our work on IT, we engaged in a bipartisan
fashion to increase data security in order to protect our nation's
veterans. We have also worked through the complexities of the Charles-
ton model, forging an exciting new way to approach hospital design and c
onstruction.
It is our job to preserve those arenas of excellence and to work
together in a bipartisan fashion to ensure every service the Department
provides meets the highest standards.
One of the most important services remains the determination and
awarding of benefits. As you know, Mr. Secretary, the claims backlog
has reached an all-time high. To help lead the way ahead, I organized a
Compensation and Benefits Accountability Task Force in December 2005.
After almost 1 year, they provided me a powerful work product with
numerous recommendations. I want to commend those who spent many hours
working on this valuable product--Blake Ortman, the Associate
Legislative Director of PVA, James Doran, the National Service Director
for AMVETS, Rick Weidman the National Legislative Director for Vietnam
Veterans of America, John Lopez, the Chairman for the Association of
Service Disabled Veterans, and Steve Smithson the Assistant Director,
National Veterans Affairs and Rehabilitation Commission, the American
Legion. Gentlemen, thank you for your good work. Mr. Secretary, I look
forward to sharing this with you, as well as the Members of this
Committee as we tackle this serious problem.
It's worth noting that again this year, the President has proposed
substantial increases in the budgets of agencies focused on fighting
the war on terror--the Department of Defense and the Department of
Homeland Security. I am pleased that again this year, the Department of
Veterans Affairs--an agency focused on caring for those who have borne
the battle--has also received a substantial increase of approximately 8
percent over the level contained in H.J. Res. 20. At a time when much
of the rest of government received a 2.2 percent increase, I believe
this reflects the commitment of this Administration to care for our
nation's veterans during time of war.
As you know Mr. Secretary, a budget is much more than numbers. In
the end, it must translate into real actions on the ground that has a
positive affect on America's veterans. As I look at this budget, I view
it in light of my top three priorities, which remain:
Caring for veterans who have service-connected
disabilities, those with special needs, and the indigent.
Ensuring a seamless transition from military service to
the VA.
And providing veterans every opportunity to live full,
healthy lives.
We have an obligation to those who bear the burdens of war and of
military service--and to their survivors. Our work must move us toward
the fulfillment of that obligation.
Therefore I want to judge this budget not just by the numbers, but
for what it does for America's veterans. When you send us a budget of
this magnitude, Mr. Secretary, I expect to also find those outcomes you
seek for success. The Congress is not a blank check. We will be looking
for accountability. Generally, I think this is a good budget. But as we
look at desired outcomes, I want to review what we learned from the 20
VSOs and MSOs at last September's ``look back, look ahead hearing.'' At
that time, the issues most frequently cited as concerns were: (1) VBA
and the claims backlog, (2) seamless transition, mental healthcare, and
healthcare funding, and (3) improving the GI Bill. Mr. Secretary, I'd
ask you to explain how this budget addresses each of these issues and
improves the lives of our veterans.
Mr. Secretary, I applaud you for the direct and forthright
budgeting process that you have used in developing this year's budget.
There appear to be none of the gimmicks that were used in years past.
That said, there are some concerns in the budget before us today:
Mr. Secretary, last year you brought us a similar request for
enrollment fees and increased co-pays. I personally agree that it is
appropriate to ask for cost-sharing of veterans without service-
connected disabilities. I applaud the fact that these legislative
proposals do not reduce the discretionary medical care appropriations.
However, I am concerned that this year, any funds collected under these
proposals go directly to the U.S. Treasury.
Further, VA's projects nearly 2.8 billion dollars in collections, 7
percent above last year's projected collections. Given the agency's
track record, this appears to be overly optimistic.
I am also concerned with your answer to the claims backlog. Simply
throwing more money at the problem, is not the answer. I am troubled by
what I would characterize as an insufficient use of technology and
instead, the status quo--throw more people at the problem. We'll
continue this discussion throughout the year, Mr. Secretary, but I want
you to know up front, I am not pleased.
Budgets, systems, and programs are, after all, about service to
veterans. As you mentioned in your opening remarks Mr. Secretary, you
and I, along with Dr. Boozman and Mr. Salazar, traveled last year to
Iraq and traced the path of wounded military personnel back through
Germany to state-side military treatment facilities and ultimately to
the VA hospitals. For me, this experience brought into sharp focus the
issues facing today's veterans. These brave men and women have
sacrificed everything for this nation and we owe them our energy and
diligence in making them whole again.
Mr. Secretary, I thank you for appearing here today and look
forward to your testimony. I also look forward to hearing from our
second panel--those VSOs representing the Independent Budget and the
American Legion.
Mr. Chairman, I yield back.
Prepared Statement of Hon. Henry E. Brown, Jr.
Mr. Chairman and Ranking Member Buyer, thank you for calling this
hearing to examine the Administration's budget request for Fiscal Year
2008. I look forward to hearing from Secretary Nicholson on our first
panel and from representatives from many of our nation's veterans
service organizations later in the day.
As past chair of both the Health and former Benefits Subcommittees,
I am pleased that this budget continues the hard work our Committee and
the Administration embarked upon just a few short years ago. In 2001,
we had a VA that was receiving just over $20 billion for medical care.
In the budget proposal we are discussing today, VA is in line to
receive upward of $36 billion for veterans' medical care. This
accomplishment would not have been possible had it not been for the
commitment made by this Committee, the Administration, and so many
others in and out of Congress to our nation's veterans.
As the Congress and this Committee looks at the Administration's
current budget proposal, I am hopeful that we will do so in a way that
focuses on the bipartisan concern we all have for the wellbeing of our
nation's veterans. The work done in our VA medical centers is of such
importance, not only to veterans, but also for our entire nation. From
developing new treatments to leading the world in the use of electronic
medical records, the work of the VA truly is world class.
That said, as with any organization, especially one as large as the
VA, there is room for improvement. I am especially glad to see that
this budget includes something that this Committee has called for the
VA to do for a very long time. The centralized management of
information technology (IT) systems and security contained in this
budget will lead to improved security for the personal information of
our nation's veterans as well as provide the VA with the ability to
improve service from the top down.
In addition, I want to praise Secretary Nicholson and the
Department of Defense for coming together under the banner of common
sense to develop a joint medical records system for our service
personnel and veterans. This will go a long way toward achieving the
goal of seamless transition that this Committee has so actively
pursued.
In closing, Mr. Chairman, while I certainly have concerns with this
budget and some of the funding decisions made by the Administration
within certain accounts, overall I believe it sets a very solid
starting point for Congress to build upon. I look forward to that
process in the coming months. Again, Mr. Chairman, thank you for the
time, which I now yield back.
Prepared Statement of Hon. Jeff Miller
Thank you, Mr. Chairman for holding this hearing to discuss the
fiscal year 2008 funding for the Department of Veterans Affairs.
I am committed to our responsibility to ensure that the budget we
adopt will continue to meet both the complex needs of our new
generation of younger veterans as well as maintain and improve the
quality of services for our older veterans.
I want to thank the Secretary for his appearance before the
Committee today and I thank you for your leadership. I also want to
commend the manner in which you and your staff have responded to the
emergent challenges in taking care of our veterans.
I also appreciate the Veterans Service Organization representatives
for participating in our hearing today. Your outlook on funding
recommendations for veterans programs and input into the budget is of
great value to me in this process.
It is satisfying to see that after this Committee uncovered
weaknesses in the process VA used to develop its healthcare budget in
2005, the budget request for fiscal year 2008 is more transparent. The
Department proposes $36.6 billion for VA healthcare--the largest amount
ever requested by any Administration.
However, I would be remiss in not expressing my concern about the
inclusion of legislative proposals to establish fees and increases in
pharmacy co-payments for certain veterans without service-connected
conditions similar to requests that Congress has rejected year after
year.
Having chaired the Subcommittee on Disabilities and Memorial
Affairs last year, I am cautiously encouraged that the budget includes
increased funding to reduce compensation processing time and improve
accuracy.
In the State of Florida, the VA patient workload is among the
highest in the Nation and the demand for VA healthcare continues to
grow, especially in Okaloosa County, the center of my Congressional
District.
Three years ago, the Capital Asset Realignment for Enhanced
Services (CARES) Commission identified this Florida Panhandle region as
underserved for inpatient
care. In fact, it is the only market area in the VISN, VISN 16, without
a medical center.
The absence of a VA inpatient facility continues to be one of the
biggest concerns of veterans who live in this area. Currently, many of
these veterans have to drive to Mississippi to receive inpatient care.
Bringing a full service VA hospital to the first district is
something I have been fighting for. I look forward to working with the
Department in support of VA's overall capital construction program to
address the issue of providing timely access to inpatient healthcare
for veterans living in and around Okaloosa County.
Collectively, we share the same goal of providing exceptional
service to those who have served in our Armed Forces and sacrificed so
much for our freedom.
I hope that our hearing this morning will point the way toward
close cooperation among all of us as advocates of our Nation's veterans
to respond to their evolving needs and those of their families.
Prepared Statement of Hon. Gus M. Bilirakis
Mr. Chairman, I want to commend you for scheduling this timely
hearing on the Administration's Fiscal Year 2008 budget request for the
Department of Veterans Affairs. I would also like to take a moment to
welcome VA Secretary, Jim Nicholson, and our other witnesses to the
Committee this morning.
As a new Member of the Committee, I am anxious to hear directly
from Secretary Nicholson on the Administration's overall budget request
for the upcoming fiscal year and how it addresses the needs of our
nations' veterans. I am also looking forward to hearing the
recommendations of the authors of the Independent Budget as well as
those of the other veterans' service organizations (VSOs) testifying
today. The VSOs often provide us with valuable insight into the day-to-
day operations of the VA and its needs.
There are a number of issues in the budget which are of specific
interest to me, but rather than spending time to raise them now, I will
wait until the question and answer period to discuss them. However, I
do have some concerns regarding the legislative proposals that were
included in the Administration's budget request.
As I understand these proposals, they would implement annual
enrollment fees and increased prescription drug co-payments for
Priority 7 and 8 veterans. I know that the Administration has made
similar proposals in the past which Congress has rejected. I am very
concerned about the impact these proposals would have on our nation's
veterans. As the Representative of a district with a large veterans'
population, I strongly believe that we must do everything we can to
repay the great debt that we owe the men and women who answered the
call to duty, and I hope that
the Committee will carefully review these proposals before taking any ac
tion on them.
Mr. Chairman, I look forward to working with you and the other
Members of our Committee to ensure that our veterans receive the
benefits they earned through their service to our country.
Prepared Statement of Hon. Ginny Brown-Waite
Thank you, Mr. Chairman,
First, I would like to thank Secretary Nicholson for testifying
before the Committee today. I have a great deal of respect for the work
you have done since taking office, and am confident that you will
continue to serve our nation's veterans well.
I am pleased that the President's budget request would provide
$86.75 billion for the Department of Veterans Affairs--a nearly 8
percent increase from the previous year. Having said that, I do have
concerns about this budget. Once again, the President has included a
proposal establishing an enrollment fee and increased prescription drug
co-payments for category 7 and 8 veterans. I have always said that
Congress should not impose any new fees without expanding access to
care. In fact, I recently introduced legislation, H.R. 92, to ensure
that veterans receive timely access to healthcare. Too many veterans
are waiting too long for care, or worse, shut out of the VA's system
altogether. The President submits this proposal year after year, and
every time I vehemently oppose it. This year will be no different.
Some are saying that this budget does not provide adequate funding
to the VA. I want to make certain that this budget will adequately meet
the needs of those veterans seeking benefits and medical care. With
increasing numbers of our brave men and women returning from Iraq and
Afghanistan, the VA will face a significant strain for the near future.
As Members of Congress, we have an obligation to ensure that those who
served are receiving the care they need. Therefore, it is essential
that Congress continue to direct funds and resources to areas in need,
while bringing greater efficiency to the VA.
Once again, thank you to all of today's witnesses. I look forward
to working with my colleagues in the 110th Congress to
ensure that our nation's veterans receive the care and support to which
they are entitled.
Prepared Statement of Hon. John T. Salazar
Mr. Chairman, Monday I visited with four soldiers from Colorado at
the Walter Reed Army Medical Center. Monday also happens to be the day
the President released his budget proposal for 2008.
While at Walter Reed, I sat with a young man who took a shot gun
blast at point blank range.
Then I spent some time with a 25-year-old double amputee.
The third soldier, a native of the Colorado plains, was recently
fitted with a prosthetic left leg.
And the fourth is a Lt. Col recovering from a bullet shattered
right leg.
These brave soldiers are representatives of the thousands of
injured men and women of the U.S. Armed Forces that have returned from
Afghanistan and Iraq.
Over 50,000 troops have sustained serious injuries in this war. Yet
the President is proposing an increase in VA health funding that fails
to adequately fund the basic necessities of our future generation of
war veterans.
The President says his budget meets the growing healthcare needs of
our Nation's Veterans, yet fails to adequately fund medical care for
Colorado's 400,000 veterans, and troops returning from Iraq and
Afghanistan.
The President claims he's expanding the Department's ability to
provide mental healthcare, yet this proposed budget fails the thousands
of servicemembers returning from war with PTSD and other psychological
traumas of war.
With the President's proposed budget, the Veteran's Administration
will be forced to shift resources from the care of our aging veteran
population to address the needs of our most severely injured veterans
returning from combat today.
Mr. Chairman, the cost of this war must not be shouldered solely by
the brave men and women who have fought for our freedoms. It is our
responsibility to guarantee that our veterans get the benefits that
they were promised the day they signed up for service.
Prepared Statement of Hon. Doug Lamborn
Thank you, Mr. Chairman.
It is an honor to be here in my first Veterans' Committee hearing
among veterans and their families, and those who have, in turn,
dedicated themselves to serving these great patriots who have secured
our nation's very freedoms.
Mr. Buyer, thank you for your service as Ranking Member of this
Committee and for your confidence in this freshman. I assure you that
my service will be marked by energy, and a focus to ensure our
veterans, their families, and their survivors that we have a system
that makes timely and accurate decisions and efficiently delivers
benefits to deserving beneficiaries.
Admiral Cooper, I was glad to have been able to visit with you
briefly; this is a complex area and has profound impact on our veterans
and their families.
These beneficiaries, we would all agree, shouldn't have to grapple
with the complexities, laws, regulations, and pressures generated from
one side of Washington to another. They are already grappling with the
pressures of illness, injury, the need for a pension, some college
tuition, perhaps a life insurance policy or a home loan.
No veteran should wait 6 months for a claims decision or years for
an appeals decision. We must--and we will--work together in a
bipartisan fashion and with you in the Administration to solve this
problem.
We will welcome fresh ideas, make room for promising partnerships,
and keep the end goal in mind: veterans who are well-served by their
government.
Secretary Tuerk, I look forward to working with you. Your
Administration has a reputation for efficiency and customer
satisfaction. More must be done so that all of our national cemeteries
meet shrine commitment standards.
As we expand the number of national and state cemeteries, we should
preserve if not accelerate our progress toward this vital commitment,
which has enjoyed the Committee's enduring support.
Much must also be done before we can offer our veterans a burial
option in a national or state cemetery within a reasonable drive from
their residence.
I look forward to the opportunity today to hear more on these and
other issues of importance to our veterans and their families.
Mr. Chairman, I yield back my time.
Prepared Statement of Hon. Timothy J. Walz
Mr. Chairman, Members of the Committee and guests, let me express
what a true honor it is for me to serve on this distinguished
Committee. Having served 24 years in the Army National Guard and having
deployed to Europe in support of Operation Enduring Freedom, I
understand the need to keep our promise to America's veterans. These
brave men and women have admirably served their country with
unflinching courage and valor. Crafting policy that serves their best
interests is this Committee's chief goal, and so I sincerely express my
eagerness to work with each of you to meet that important goal.
Today we turn our attention to the President's Fiscal Year 2008
budget requests for the Department of Veterans Affairs and I want to
thank the Secretary and other Department officials for joining us here
today. I also want to thank the leaders of the various veterans service
organizations that are here today. Thank you for the work that you do
on behalf of all of our nation's veterans.
I am eager to listen to today's testimony on the President's budget
request. While I am pleased to see a 6 percent increase in requested
funding for VA medical care, a significant jump from the .4 percent
increase requested for FY2006, I am concerned with some of the
President's proposals. The President's request to increase
pharmaceutical co-payments and to impose an enrollment fee on priority
7 and 8 veterans presents serious concerns. Furthermore, the President
has proposed a cut to VA Medical and Prosthetic Research, a far cry
from increases drastically needed by NIH and requested by the
Independent Budget. Finally, while the size and increasing workload of
the Department of Veterans Affairs would seem to require considerable
funding increases for the Office of the Inspector General, the
President's budget has instead proposed only slight increases for
oversight.
In conclusion, this budget request leaves me with important
questions and concerns. I look forward to today's testimony and to the
opportunity to work with each of the Members of this Committee on the
problems facing America's veterans.
Thank you.
Prepared Statement of Hon. Corrine Brown
Chairman Filner, thank you for holding this hearing and inviting
the Secretary to discuss the budget of the Department of Veterans
Affairs.
I would like to thank all the groups here today to speak on the VA
budget. The groups that authored the Independent Budget: AMVETS, DAV,
PVA and VFW; you have continued to serve your country with this budget.
Showing the inadequacies of veterans funding, whether Democrat or
Republican, is important to the advancement of veterans rights.
Mr. Secretary, thank you for coming today to discuss this budget. I
do not agree with most of it, and there is much that I would change.
First, I would like to thank you for all the building that will be
going on in my district. I see there is money for the Orlando VA
Medical Center and the Jacksonville cemetery. And yesterday the
announcement of a new vet center to be built in Gainesville.
Next, however, are the proposals that hurt individual veterans, the
men and women who have served their country and have paid into THEIR
system with their blood and sweat.
Every year you include drug co-pays and enrollment fees. Every
year, you do what you can to drive veterans out of the VA system. By
your own estimate, enrollment fees would drive out over 200,000
veterans from the healthcare system they built and deserve. You still
do not allow new Priority 8 veterans into the system.
Every year, the Congress, Members of both the Republican and
Democratic parties, reject co-pays and enrollment fees.
And this year, you are balancing the budget on the backs of
veterans even more blatantly than ever. The money raised with this tax
on veterans' health would go directly into the U.S. Treasury.
How dare you use budget gimmicks and tricks to fund tax cuts for
the wealthy?
I cannot believe you are cutting VA medical and prosthetic research
when ever more young men and women are coming back from Afghanistan and
Iraq without limbs. We are doing remarkable things for these soldiers
and to cut funding at this time says to current and future soldiers to
not get hurt, because you will be on your own.
And what about information security? Recently a portable computer
hard drive, potentially containing personal information on veterans,
was reported missing from a VA facility in Birmingham, AL. We held
hearing after hearing last year about the loss of veterans' data,
obviously to no effect.
Tell me, Mr. Secretary, what is going on with the data security
promises you gave last year?
Once again I am reminded of the words of the first President of the
United States, George Washington:
``The willingness with which our young people are likely to serve
in any war, no matter how justified, shall be directly proportional as
to how they perceive the veterans of earlier wars were treated and
appreciated by their country.''
Prepared Statement of Hon. Cliff Stearns
Mr. Chairman, thank you for holding this hearing today on the
Fiscal Year 2008 budget for the Department of Veterans Affairs, and I
thank Secretary Nicholson and our Veterans Service Organizations for
being here.
First I would like to take a moment to compliment the Secretary for
the Department's handling last year of the data breach incident. The
Department responded quickly and effectively to the crisis to protect
the identities of many veterans, averting what could have been an even
greater breach of privacy.
I would also like to say that we have worked well in the past with
the Secretary on issues that are critical to veterans, increasing the
number of clinics and working to bring a new veteran's cemetery to the
Jacksonville area. I am very pleased that one of your three highest
priorities you have mentioned previously is to ``ensure the burial
needs of veterans and their eligible family members are met, and
maintain veterans' cemeteries as national shrines.'' I was very pleased
that the President authorized six new VA cemeteries Veterans' Day 2004,
including my over-a-decade-old bill for a VA cemetery in North Central
Florida.
I am pleased with the progress we have made on these issues, and
look forward to more opportunities for collaboration. Florida is a
premier retirement area for our nation's veterans, with one of the
highest numbers of veterans in its population, so naturally I am very
interested in hearing suggestions for improvements from Secretary
Nicholson.
Mr. Secretary, I am greatly concerned about the claims backlog that
is inhibiting the ability of veterans to receive benefits. It is an
issue that we have worked on in the past, and it is my hope that we
will accomplish much in this area through close collaboration with your
Department in the coming year.
I stand firmly behind the President in his strengthening of the VA
for today's veterans. Taking care of veterans disabled by their
service, and without other means, is a national commitment we must
honor.
I appreciate our veterans that are here today. I know that many of
you travel great distances to come before us, and we are grateful to
see you.
Thank you again, Chairman Filner for the opportunity to hear our
panelists, and examine the budget.
Prepared Statement of Hon. R. James Nicholson
Secretary, U.S. Department of Veterans Affairs
Mr. Chairman and Members of the Committee, good morning. I am
pleased to be here today to present the President's 2008 budget
proposal for the Department of Veterans Affairs (VA). The request
totals $86.75 billion--$44.98 billion for entitlement programs and
$41.77 billion for discretionary programs. The total request is $37.80
billion, or 77 percent, above the funding level in effect when the
President took office.
The President's requested funding level will allow VA to continue
to improve the delivery of benefits and services to veterans and their
families in three primary areas that are critical to the achievement of
our mission:
to provide timely, high-quality healthcare to a growing
number of patients who count on VA the most--veterans returning from
service in Operation Iraqi Freedom and Operation Enduring Freedom,
veterans with service-connected disabilities, those with lower incomes,
and veterans with special healthcare needs;
to improve the delivery of benefits through the
timeliness and accuracy of claims processing; and
to increase veterans' access to a burial option in a
national or state veterans' cemetery.
Ensuring a Seamless Transition from Active Military Service to Civilian
Life
The President's 2008 budget request provides the resources
necessary to ensure that service members' transition from active duty
military status to civilian life continues to be as smooth and seamless
as possible. We will continue to ensure that every seriously injured or
ill serviceman or woman returning from combat in Operation Iraqi
Freedom and Operation Enduring Freedom receives the treatment they need
in a timely way.
Earlier this week I announced plans to create a special Advisory
Committee on Operation Iraqi Freedom/Operation Enduring Freedom
Veterans and Families. The panel, with membership including veterans,
spouses, and parents of the latest generation of combat veterans, will
report directly to me. Under its charter, the Committee will focus on
the concerns of all men and women with active military service in
Operation Iraqi Freedom or Operation Enduring Freedom, but will pay
particular attention to severely disabled veterans and their families.
We will expand our ``Coming Home to Work'' initiative to help
disabled service members more easily make the transition from military
service to civilian life. This is a comprehensive intergovernmental and
public-private alliance that will provide separating service members
from Operation Iraqi Freedom and Operation Enduring Freedom with
employment opportunities when they return home from their military
service. This project focuses on making sure service members have
access to existing resources through local and regional job markets,
regardless of where they separate from their military service, where
they return, or the career or education they pursue.
VA launched an ambitious outreach initiative to ensure separating
combat veterans know about the benefits and services available to them.
During 2006 VA conducted over 8,500 briefings attended by more than
393,000 separating service members and returning reservists and
National Guard members. The number of attendees was 20 percent higher
in 2006 than it was in 2005 attesting to our improved outreach effort.
Additional pamphlet mailings following separation and briefings
conducted at town hall meetings are sources of important information
for returning National Guard members and reservists. VA has made a
special effort to work with National Guard and reserve units to reach
transitioning service members at demobilization sites and has trained
recently discharged veterans to serve as National Guard Bureau liaisons
in every state to assist their fellow combat veterans.
Each VA medical center and regional office has a designated point
of contact to coordinate activities locally and to ensure the
healthcare and benefits needs of returning service members and veterans
are fully met. VA has distributed specific guidance to field staff to
make sure the roles and functions of the points of contact and case
managers are fully understood and that proper coordination of benefits
and services occurs at the local level.
For combat veterans returning from Iraq and Afghanistan, their
contact with VA often begins with priority scheduling for healthcare,
and for the most seriously wounded, VA counselors visit their bedside
in military wards before separation to assist them with their
disability claims and ensure timely compensation payments when they
leave active duty.
In an effort to assist wounded military members and their families,
VA has placed workers at key military hospitals where severely injured
service members from Iraq and Afghanistan are frequently sent for care.
These include benefit counselors who help service members obtain VA
services as well as social workers who facilitate healthcare
coordination and discharge planning as service members transition from
military to VA healthcare. Under this program, VA staff provide
assistance at 10 military treatment facilities around the country,
including Walter Reed Army Medical Center, the National Naval Medical
Center Bethesda, the Naval Medical Center San Diego, and Womack Army
Medical Center at Ft. Bragg.
To further meet the need for specialized medical care for patients
with service in Operation Iraqi Freedom and Operation Enduring Freedom,
VA has expanded its four polytrauma centers in Minneapolis, Palo Alto,
Richmond, and Tampa to encompass additional specialties to treat
patients for multiple complex injuries. Our efforts are being expanded
to 21 polytrauma network sites and clinic support teams around the
country providing state-of-the-art treatment closer to injured
veterans' homes. We have made training mandatory for all physicians and
other key healthcare personnel on the most current approaches and
treatment protocols for effective care of patients afflicted with brain
injuries. Furthermore, we established a polytrauma call center in
February 2006 to assist the families of our most seriously injured
combat veterans and service members. This call center operates 24 hours
a day, 7 days a week to answer clinical, administrative, and benefit
inquiries from polytrauma patients and family members.
In addition, VA has significantly expanded its counseling and other
medical care services for recently discharged veterans suffering from
mental health disorders, including post-traumatic stress disorder. We
have launched new programs, including dozens of new mental health teams
based in VA medical facilities focused on early identification and
management of stress-related disorders, as well as the recruitment of
about 100 combat veterans as counselors to provide briefings to
transitioning service members regarding military-related readjustment
needs.
Medical Care
We are requesting $36.6 billion for medical care in 2008, a total
more than 83 percent higher than the funding available at the beginning
of the Bush Administration. Our total medical care request is comprised
of funding for medical services ($27.2 billion), medical administration
($3.4 billion), medical facilities ($3.6 billion), and resources from
medical care collections ($2.4 billion).
Legislative Proposals
The President's 2008 budget request identifies three legislative
proposals which ask veterans with comparatively greater means and no
compensable service-connected disabilities to assume a small share of
the cost of their healthcare.
The first proposal would assess Priority 7 and 8 veterans with an
annual enrollment fee based on their family income:
------------------------------------------------------------------------
Annual Enrollment Fee
------------------------------------------------------------------------
Under $50,000 None
------------------------------------------------------------------------
$50,000-$74,999 $250
------------------------------------------------------------------------
$75,000-$99,999 $500
------------------------------------------------------------------------
$100,000 and above $750
------------------------------------------------------------------------
The second legislative proposal would increase the pharmacy co-
payment for Priority 7 and 8 veterans from $8 to $15 for a 30-day
supply of drugs. And the last provision would eliminate the practice of
offsetting or reducing VA first-party co-payment debts with collection
recoveries from third-party health plans.
While our budget requests in recent years have included legislative
proposals similar to these, the provisions identified in the
President's 2008 budget are markedly different in that they have no
impact on the resources we are requesting for VA medical care. Our
budget request includes the total funding needed for the Department to
continue to provide veterans with timely, high-quality medical services
that set the national standard of excellence in the healthcare
industry. Unlike previous budgets, these legislative proposals do not
reduce our discretionary medical care appropriations. Instead, these
three provisions, if enacted, would generate an estimated $2.3 billion
in mandatory receipts to the Treasury from 2008 through 2012.
Workload
During 2008, we expect to treat about 5,819,000 patients. This
total is more than 134,000 (or 2.4 percent) above the 2007 estimate.
Patients in Priorities 1-6--veterans with service-connected conditions,
lower incomes, special healthcare needs, and service in Iraq or
Afghanistan--will comprise 68 percent of the total patient population
in 2008, but they will account for 85 percent of our healthcare costs.
The number of patients in Priorities 1-6 will grow by 3.3 percent from
2007 to 2008.
We expect to treat about 263,000 veterans in 2008 who served in
Operation Iraqi Freedom and Operation Enduring Freedom. This is an
increase of 54,000 (or 26 percent) above the number of veterans from
these two campaigns that we anticipate will come to VA for healthcare
in 2007, and 108,000 (or 70 percent) more than the number we treated in
2006.
Funding Drivers
Our 2008 request for $36.6 billion in support of our medical care
program was largely determined by three key cost drivers in the
actuarial model we use to project veteran enrollment in VA's healthcare
system as well as the utilization of healthcare services of those
enrolled:
inflation;
trends in the overall healthcare industry; and
trends in VA healthcare.
The impact of the composite rate of inflation of 4.45 percent
within the actuarial model will increase our resource requirements for
acute inpatient and outpatient care by nearly $2.1 billion. This
includes the effect of additional funds ($690 million) needed to meet
higher payroll costs as well as the influence of growing costs ($1.4
billion) for supplies, as measured in part by the Medical Consumer
Price Index. However, inflationary trends have slowed during the last
year.
There are several trends in the U.S. healthcare industry that
continue to increase the cost of providing medical services. These
trends expand VA's cost of doing business regardless of any changes in
enrollment, number of patients treated, or program initiatives. The two
most significant trends are the rising utilization and intensity of
healthcare services. In general, patients are using medical care
services more frequently and the intensity of the services they receive
continues to grow. For example, sophisticated diagnostic tests, such as
magnetic resonance imaging (MRI), are now more frequently used either
in place of, or in addition to, less costly diagnostic tools such as x-
rays. As another illustration, advances in cancer screening
technologies have led to earlier diagnosis and prolonged treatment
which may include increased use of costly pharmaceuticals to combat
this disease. These types of medical services have resulted in improved
patient outcomes and higher quality healthcare. However, they have also
increased the cost of providing care.
The cost of providing timely, high-quality healthcare to our
Nation's veterans is also growing as a result of several factors that
are unique to VA's healthcare system. We expect to see changes in the
demographic characteristics of our patient population. Our patients as
a group will be older, will seek care for more complex medical
conditions, and will be more heavily concentrated in the higher cost
priority groups. Furthermore, veterans are submitting disability
compensation claims for an increasing number of medical conditions,
which are also increasing in complexity. This results in the need for
disability compensation medical examinations, the majority of which are
conducted by our Veterans Health Administration, that are more complex,
costly, and time consuming. These projected changes in the case mix of
our patient population and the growing complexity of our disability
claims process will result in greater resource needs.
Quality of Care
The resources we are requesting for VA's medical care program will
allow us to strengthen our position as the Nation's leader in providing
high-quality healthcare. VA has received numerous accolades from
external organizations documenting the Department's leadership position
in providing world-class healthcare to veterans. For example, our
record of success in healthcare delivery is substantiated by the
results of the 2006 American Customer Satisfaction Index (ACSI) survey.
Conducted by the National Quality Research Center at the University of
Michigan Business School, the ACSI survey found that customer
satisfaction with VA's healthcare system increased last year and was
higher than the private sector for the seventh consecutive year. The
data revealed that inpatients at VA medical centers recorded a
satisfaction level of 84 out of a possible 100 points, or 10 points
higher than the rating for inpatient care provided by the private-
sector healthcare industry. VA's rating of 82 for outpatient care was 8
points better than the private sector.
Citing VA's leadership role in transforming healthcare in America,
Harvard University recognized the Department's computerized patient
records system by awarding VA the prestigious ``Innovations in American
Government Award'' in 2006. Our electronic health records have been an
important element in making VA healthcare the benchmark for 294
measures of disease prevention and treatment in the U.S. The value of
this system was clearly demonstrated when every patient medical record
from the areas devastated by Hurricane Katrina was made available to
all VA healthcare providers throughout the Nation within 100 hours of
the time the storm made landfall. Veterans were able to quickly resume
their treatments, refill their prescriptions, and get the care they
needed because of the electronic health records system--a real,
functioning health information exchange that has been a proven success
resulting in improved quality of care. It can serve as a model for the
healthcare industry as the Nation moves forward with the public/private
effort to develop a National Health Information Network.
The Department also received an award from the American Council for
Technology for our collaboration with the Department of Defense on the
Bidirectional Health Information Exchange program. This innovation
permits the secure, real-time exchange of medical record data between
the two departments, thereby avoiding duplicate testing and surgical
procedures. It is an important step forward in making the transition
from active duty to civilian life as smooth and seamless as possible.
In its July 17, 2006, edition, Business Week featured an article
about VA healthcare titled ``The Best Medical Care in the U.S.'' This
article outlines many of the Department's accomplishments that have
helped us achieve our position as the leading provider of healthcare in
the country, such as higher quality of care than the private sector,
our nearly perfect rate of prescription accuracy, and the most advanced
computerized medical records system in the Nation. Similar high praise
for VA's healthcare system was documented in the September 4, 2006,
edition of Time Magazine in an article titled ``How VA Hospitals Became
the Best.'' In addition, a study conducted by Harvard Medical School
concluded that Federal hospitals, including those managed by VA,
provide the best care available for some of the most common life-
threatening illnesses such as congestive heart failure, heart attack,
and pneumonia. Their research results were published in the December
11, 2006, edition of the Annals of Internal Medicine.
These external acknowledgments of the superior quality of VA
healthcare reinforce the Department's own findings. We use two primary
measures of healthcare quality--clinical practice guidelines index and
prevention index. These measures focus on the degree to which VA
follows nationally recognized guidelines and standards of care that the
medical literature has proven to be directly linked to improved health
outcomes for patients. Our performance on the clinical practice
guidelines index, which focuses on high-prevalence and high-risk
diseases that have a significant impact on veterans' overall health
status, is expected to grow to 85 percent in 2008, or a 1 percentage
point rise over the level we expect to achieve this year. As an
indicator aimed at primary prevention and early detection
recommendations dealing with immunizations and screenings, the
prevention index will be maintained at our existing high level of
performance of 88 percent.
Access to Care
With the resources requested for medical care in 2008, the
Department will be able to continue our exceptional performance dealing
with access to healthcare--96 percent of primary care appointments will
be scheduled within 30 days of patients' desired date, and 95 percent
of specialty care appointments will be scheduled within 30 days of
patients' desired date. We will minimize the number of new enrollees
waiting for their first appointment. We reduced this number by 94
percent from May 2006 to January 2007, to a little more than 1,400, and
we will continue to place strong emphasis on lowering, and then
holding, the waiting list to as low a level as possible.
An important component of our overall strategy to improve access
and timeliness of service is the implementation on a national scale of
Advanced Clinic Access, an initiative that promotes the efficient flow
of patients by predicting and anticipating patient needs at the time of
their appointment. This involves assuring that specific medical
equipment is available, arranging for tests that should be completed
either prior to, or at the time of, the patient's visit, and ensuring
all necessary health information is available. This program optimizes
clinical scheduling so that each appointment or inpatient service is
most productive. In addition, this reduces unnecessary appointments,
allowing for relatively greater workload and increased patient-directed
scheduling.
Funding for Major Healthcare Programs and Initiatives
Our request includes $4.6 billion for extended care services, 90
percent of which will be devoted to institutional long-term care and 10
percent to non-institutional care. By continuing to enhance veterans'
access to non-institutional long-term care, the Department can provide
extended care services to veterans in a more clinically appropriate
setting, closer to where they live, and in the comfort and familiar
settings of their homes surrounded by their families. This includes
adult day healthcare, home-based primary care, purchased skilled home
healthcare, homemaker/home health aide services, home respite and
hospice care, and community residential care. During 2008 we will
increase the number of patients receiving non-institutional long-term
care, as measured by the average daily census, to over 44,000. This
represents a 19.1 percent increase above the level we expect to reach
in 2007 and a 50.3 percent rise over the 2006 average daily census.
The President's request includes nearly $3 billion to continue our
effort to improve access to mental health services across the country.
These funds will help ensure VA provides standardized and equitable
access throughout the Nation to a full continuum of care for veterans
with mental health disorders. The resources will support both inpatient
and outpatient psychiatric treatment programs as well as psychiatric
residential rehabilitation treatment services. We estimate that about
80 percent of the funding for mental health will be for the treatment
of seriously mentally ill veterans, including those suffering from
post-traumatic stress disorder (PTSD). An example of our firm
commitment to provide the best treatment available to help veterans
recover from these mental health conditions is our ongoing outreach to
veterans of Operation Iraqi Freedom and Operation Enduring Freedom, as
well as increased readjustment and PTSD services.
In 2008 we are requesting $752 million to meet the needs of the
263,000 veterans with service in Operation Iraqi Freedom and Operation
Enduring Freedom whom we expect will come to VA for medical care.
Veterans with service in Iraq and Afghanistan continue to account for a
rising proportion of our total veteran patient population. In 2008 they
will comprise 5 percent of all veterans receiving VA healthcare
compared to the 2006 figure of 3.1 percent. Veterans deployed to combat
zones are entitled to 2 years of eligibility for VA healthcare services
following their separation from active duty even if they are not
otherwise immediately eligible to enroll for our medical services.
Medical Collections
The Department expects to receive nearly $2.4 billion from medical
collections in 2008, which is $154 million, or 7.0 percent, above our
projected collections for 2007. As a result of increased workload and
process improvements in 2008, we will collect an additional $82 million
from third-party insurance payers and an extra $72 million resulting
from increased pharmacy workload.
We have several initiatives underway to strengthen our collections
processes:
The Department has established a private-sector based
business model pilot tailored for our revenue operations to increase
collections and improve our operational performance. The pilot
Consolidated Patient Account Center (CPAC) is addressing all
operational areas contributing to the establishment and management of
patient accounts and related billing and collections processes. The
CPAC currently serves revenue operations for medical centers and
clinics in one of our Veterans Integrated Service Networks but this
program will be expanded to serve other networks.
VA continues to work with the Centers for Medicare and
Medicaid Services contractors to provide a Medicare-equivalent
remittance advice for veterans who are covered by Medicare and are
using VA healthcare services. We are working to include additional
types of claims that will result in more accurate payments and better
accounting for receivables through use of more reliable data for claims
adjudication.
We are conducting a phased implementation of electronic,
real-time outpatient pharmacy claims processing to facilitate faster
receipt of pharmacy payments from insurers.
The Department has initiated a campaign that has resulted
in an increasing number of payers now accepting electronic coordination
of benefits claims. This is a major advancement toward a fully
integrated, interoperable electronic claims process.
Medical Research
The President's 2008 budget includes $411 million to support VA's
medical and prosthetic research program. This amount will fund nearly
2,100 high-priority research projects to expand knowledge in areas
critical to veterans' healthcare needs, most notably research in the
areas of mental illness ($49 million), aging ($42 million), health
services delivery improvement ($36 million), cancer ($35 million), and
heart disease ($31 million).
VA's medical research program has a long track record of success in
conducting research projects that lead to clinically useful
interventions that improve the health and quality of life for veterans
as well as the general population. Recent examples of VA research
results that are now being applied to clinical care include the
discovery that vaccination against varicella-zoster (the same virus
that causes chickenpox) decreases the incidence and/or severity of
shingles, development of a system that decodes brain waves and
translates them into computer commands that allow quadriplegics to
perform simple tasks like turning on lights and opening e-mail using
only their minds, improvements in the treatment of post-traumatic
stress disorder that significantly reduce trauma nightmares and other
sleep disturbances, and discovery of a drug that significantly improves
mental abilities and behavior of certain schizophrenics.
In addition to VA appropriations, the Department's researchers
compete for and receive funds from other Federal and non-Federal
sources. Funding from external sources is expected to continue to
increase in 2008. Through a combination of VA resources and funds from
outside sources, the total research budget in 2008 will be almost $1.4
billion.
General Operating Expenses
The Department's 2008 resource request for General Operating
Expenses (GOE) is $1.472 billion. This is $617 million, or 72.2
percent, above the funding level in place when the President took
office. Within this total GOE funding request, $1.198 billion is for
the administration of non-medical benefits by the Veterans Benefits
Administration (VBA) and $274 million will be used to support General
Administration activities.
Compensation and Pensions Workload and Performance Management
VA's primary focus within the administration of non-medical
benefits remains unchanged--delivering timely and accurate benefits to
veterans and their families. Improving the delivery of compensation and
pension benefits has become increasingly challenging during the last
few years due to a steady and sizeable increase in workload. The volume
of claims applications has grown substantially during the last few
years and is now the highest it has been in the last 15 years. The
number of claims we received was more than 806,000 in 2006. We expect
this high volume of claims filed to continue, as we are projecting the
receipt of about 800,000 claims a year in both 2007 and 2008.
The number of active duty service members as well as reservists and
National Guard members who have been called to active duty to support
Operation Enduring Freedom and Operation Iraqi Freedom is one of the
key drivers of new claims activity. This has contributed to an increase
in the number of new claims, and we expect this pattern to persist. An
additional reason that the number of compensation and pension claims is
climbing is the Department's commitment to increase outreach. We have
an obligation to extend our reach as far as possible and to spread the
word to veterans about the benefits and services VA stands ready to
provide.
Disability compensation claims from veterans who have previously
filed a claim comprise about 55 percent of the disability claims
received by the Department each year. Many veterans now receiving
compensation suffer from chronic and progressive conditions, such as
diabetes, mental illness, and cardiovascular disease. As these veterans
age and their conditions worsen, we experience additional claims for
increased benefits.
The growing complexity of the claims being filed also contributes
to our workload challenges. For example, the number of original
compensation cases with eight or more disabilities claimed nearly
doubled during the last 4 years, reaching more than 51,000 claims in
2006. Almost one in every four original compensation claims received
last year contained eight or more disability issues. In addition, we
expect to continue to receive a growing number of complex disability
claims resulting from PTSD, environmental and infectious risks,
traumatic brain injuries, complex combat-related injuries, and
complications resulting from diabetes. Each claim now takes more time
and more resources to adjudicate. Additionally, as VA receives and
adjudicates more claims, this results in a larger number of appeals
from veterans and survivors, which also increases workload in other
parts of the Department, including the Board of Veterans' Appeals.
The Veterans Claims Assistance Act of 2000 has significantly
increased both the length and complexity of claims development. VA's
notification and development duties have grown, adding more steps to
the claims process and lengthening the time it takes to develop and
decide a claim. Also, we are now required to review the claims at more
points in the adjudication process.
We will address our ever-growing workload challenges in several
ways. First, we will continue to improve our productivity as measured
by the number of claims processed per staff member, from 98 in 2006 to
101 in 2008. Second, we will continue to move work among regional
offices in order to maximize our resources and enhance our performance.
Third, we will further advance staff training and other efforts to
improve the consistency and quality of claims processing across
regional offices. And fourth, we will ensure our claims processing
staff has easy access to the manuals and other reference material they
need to process claims as efficiently and effectively as possible and
further simplify and clarify benefit regulations.
Through a combination of management/productivity improvements and
an increase in resources in 2008 to support 457 additional staff above
the 2007 level, we will improve our performance in the area most
critical to veterans--the timeliness of processing rating-related
compensation and pension claims. We expect to improve the timeliness of
processing these claims to 145 days in 2008. This level of performance
is 15 days better than our projected timeliness for 2007 and a 32-day
improvement from the average processing time we achieved last year. In
addition, we anticipate that our pending inventory of disability claims
will fall to about 330,000 by the end of 2008, a reduction of more than
40,000 (or 10.9 percent) from the level we project for the end of 2007,
and nearly 49,000 (or 12.9 percent) lower than the inventory at the
close of 2006. At the same time we are improving timeliness, we will
also increase the accuracy of our decisions on claims from 88 percent
in 2006 to 90 percent in 2008.
Education and Vocational Rehabilitation and Employment Performance
With the resources we are requesting in 2008, key program
performance will improve in both the education and vocational
rehabilitation and employment programs. The timeliness of processing
original education claims will improve by 15 days during the next 2
years, falling from 40 days in 2006 to 25 days in 2008. During this
period, the average time it takes to process supplemental claims will
improve from 20 days to just 12 days. These performance improvements
will be achieved despite an increase in workload. The number of
education claims we expect to receive will reach about 1,432,000 in
2008, or 4.8 percent higher than last year. In addition, the
rehabilitation rate for the vocational rehabilitation and employment
program will climb to 75 percent in 2008, a gain of 2 percentage points
over the 2006 performance level. The number of program participants
will rise to about 94,500 in 2008, or 5.3 percent higher than the
number of participants in 2006.
Our 2008 request includes $6.3 million for a Contact Management
Support Center for our education program. These funds will be used
during peak enrollment periods for contract customer service
representatives who will handle all education calls placed through our
toll-free telephone line. We currently receive about 2.5 million phone
inquiries per year. This initiative will allow us to significantly
improve performance for both the blocked call rate and the abandoned
call rate.
The 2008 resource request for VBA includes about $4.3 million to
enhance our educational and vocational counseling provided to disabled
service members through the Disabled Transition Assistance Program.
Funds for this initiative will ensure that briefings are conducted by
experts in the field of vocational rehabilitation, including
contracting for these services in localities where VA professional
staff are not available. The contractors would be trained by VA staff
to ensure consistent, quality information is provided. Also in support
of the vocational rehabilitation and employment program, we are seeking
$1.5 million as part of an ongoing project to retire over 650,000
counseling, evaluation, and rehabilitation folders stored in regional
offices throughout the country. All of these folders pertain to cases
that have been inactive for at least 3 years and retention of these
files poses major space problems.
In addition, our 2008 request includes $2.4 million to continue a
major effort to centralize finance functions throughout VBA, an
initiative that will positively impact operations for all of our
benefits programs. The funds to support this effort will be used to
begin the consolidation and centralization of voucher audit, agent
cashier, purchase card, and payroll operations currently performed by
all regional offices.
National Cemetery Administration
The President's 2008 budget request includes $166.8 million in
operations and maintenance funding for the National Cemetery
Administration (NCA). These resources will allow us to meet the growing
workload at existing cemeteries by increasing staffing and funding for
contract maintenance, supplies, and equipment. We expect to perform
nearly 105,000 interments in 2008, or 8.4 percent higher than the
number of interments we performed in 2006. The number of developed
acres (over 7,800) that must be maintained in 2008 will be 7.3 percent
greater than last year.
Our budget request includes $3.7 million to prepare for the
activation of interment operations at six new national cemeteries--
Bakersfield, California; Birmingham, Alabama; Columbia-Greenville,
South Carolina; Jacksonville, Florida; southeastern Pennsylvania; and
Sarasota County, Florida. Establishment of these six new national
cemeteries is directed by the National Cemetery Expansion Act of 2003.
The 2008 budget has $9.1 million to address gravesite renovations
as well as headstone and marker realignment. These improvements in the
appearance of our national cemeteries will help us maintain the
cemeteries as shrines dedicated to preserving our Nation's history and
honoring veterans' service and sacrifice.
With the resources requested to support NCA activities, we will
expand access to our burial program by increasing the percent of
veterans served by a burial option within 75 miles of their residence
to 84.6 percent in 2008, which is 4.4 percentage points above our
performance level at the close of 2006. In addition, we will continue
to increase the percent of respondents who rate the quality of service
provided by national cemeteries as excellent to 98 percent in 2008, or
4 percentage points higher than the level of performance we reached
last year.
Capital Programs (Construction and Grants to States)
VA's 2008 request includes $1.078 billion in appropriated funding
for our capital programs. Our request includes $727.4 million for major
construction projects, $233.4 million for minor construction, $85
million in grants for the construction of state extended care
facilities, and $32 million in grants for the construction of state
veterans cemeteries.
The 2008 request for construction funding for our healthcare
programs is $750 million--$570 million for major construction and $180
million for minor construction. All of these resources will be devoted
to continuation of the Capital Asset Realignment for Enhanced Services
(CARES) program, total funding for which comes to $3.7 billion over the
last 5 years. CARES will renovate and modernize VA's healthcare
infrastructure, provide greater access to high-quality care for more
veterans, closer to where they live, and help resolve patient safety
issues. Within our request for major construction are resources to
continue six medical facility projects already underway:
Denver, Colorado ($61.3 million)--parking structure and
energy development for this replacement hospital
Las Vegas, Nevada ($341.4 million)--complete construction
of the hospital, nursing home, and outpatient facilities
Lee County, Florida ($9.9 million)--design of an
outpatient clinic (land acquisition is complete)
Orlando, Florida ($35.0 million)--land acquisition for
this replacement hospital
Pittsburgh, Pennsylvania ($40.0 million)--continue
consolidation of a 3-division to a 2-division hospital
Syracuse, New York ($23.8 million)--complete construction
of a spinal cord injury center.
Minor construction is an integral component of our overall capital
program. In support of the medical care and medical research programs,
minor construction funds permit VA to address space and functional
changes to efficiently shift treatment of patients from hospital-based
to outpatient care settings; realign critical services; improve
management of space, including vacant and underutilized space; improve
facility conditions; and undertake other actions critical to CARES
implementation. Our 2008 request for minor construction funds for
medical care and research will provide the resources necessary for us
to address critical needs in improving access to healthcare, enhancing
patient privacy, strengthening patient safety, enhancing research
capability, correcting seismic deficiencies, facilitating realignments,
increasing capacity for dental services, and improving treatment in
special emphasis programs.
We are requesting $191.8 million in construction funding to support
the Department's burial program--$167.4 million for major construction
and $24.4 million for minor construction. Within the funding we are
requesting for major construction are resources to establish six new
cemeteries mandated by the National Cemetery Expansion Act of 2003. As
previously mentioned, these will be in Bakersfield ($19.5 million),
Birmingham ($18.5 million), Columbia-Greenville ($19.2 million),
Jacksonville ($22.4 million), Sarasota ($27.8 million), and
southeastern Pennsylvania ($29.6 million). The major construction
request in support of our burial program also includes $29.4 million
for a gravesite development project at Fort Sam Houston National
Cemetery.
Information Technology
VA's 2008 budget request for information technology (IT) is $1.859
billion. This budget reflects the first phase of our reorganization of
IT functions in the Department which will establish a new IT management
structure in VA. The total funding for IT in 2008 includes $555 million
for more than 5,500 staff who have been moved to support operations and
maintenance activities. Prior to 2008, the funding and staff supporting
these IT activities were reflected in other accounts throughout the
Department.
Later in 2007 we will implement the second phase of our IT
reorganization strategy by moving funding and staff devoted to
development projects and activities. As a result of the second stage of
the IT reorganization, the Chief Information Officer will be
responsible for all operations and maintenance as well as development
activities, including oversight of, and accountability for, all IT
resources within VA. This reorganization will make the most efficient
use of our IT resources while improving operational effectiveness,
providing standardization, and eliminating duplication.
This major transformation of IT will bring our program under more
centralized control and will play a significant role in ensuring we
fulfill my promise to make VA the gold standard for data security
within the Federal Government. We have taken very aggressive steps
during the last several months to ensure the safety of veterans'
personal information, including training and educating our employees on
the critical responsibility they have to protect personal and health
information, launching an initiative to expeditiously upgrade all VA
computers with enhanced data security and encryption, entering into an
agreement with an outside firm to provide free data breach analysis
services, initiating any needed background investigations of employees
to ensure consistency with their level of authority and
responsibilities in the Department, and beginning a campaign at all of
our healthcare facilities to replace old veteran identification cards
with new cards that reduce veterans' vulnerability to identify theft.
These steps are part of our broader commitment to improve our IT and
cyber security policies and procedures.
Within our total IT request of $1.859 billion, $1.304 billion (70
percent) will be for non-payroll costs and $555 million (30 percent)
will be for payroll costs. Of the non-payroll funding, $461 million
will support projects for our medical care and medical research
programs, $66 million will be devoted to projects for our benefits
programs, and $446 million will be needed for IT infrastructure
projects. The remaining $331 million of our non-payroll IT resources in
2008 will fund centrally managed projects, such as VA's cyber security
program, as well as management projects that support department-wide
initiatives and operations like the replacement of our aging financial
management system and the development and implementation of a new human
resources management system.
The most critical IT project for our medical care program is the
continued operation and improvement of the Department's electronic
health record system, a Presidential priority which has been recognized
nationally for increasing productivity, quality, and patient safety.
Within this overall initiative, we are requesting $131.9 million for
ongoing development and implementation of HealtheVet-VistA (Veterans
Health Information Systems and Technology Architecture). This
initiative will incorporate new technology, new or reengineered
applications, and data standardization to improve the sharing of, and
access to, health information, which in turn, will improve the status
of veterans' health through more informed clinical care. This system
will make use of standards accepted by the Secretary of Health and
Human Services that will enhance the sharing of data within VA as well
as with other Federal agencies and public and private sector
organizations. Health data will be stored in a veteran-centric format
replacing the current facility-centric system. The standardized health
information can be easily shared between facilities, making patients'
electronic health records available to them and to all those authorized
to provide care to veterans.
Until HealtheVet-VistA is operational, we need to maintain the
VistA legacy system. This system will remain operational as new
applications are developed and implemented. This approach will mitigate
transition and migration risks associated with the move to the new
architecture. Our budget provides $129.4 million in 2008 for the VistA
legacy system. Funding for the legacy system will decline as we advance
our development and implementation of HealtheVet-VistA.
In veterans benefits programs, we are requesting $31.7 million in
2008 to support our IT systems that ensure compensation and pension
claims are properly processed and tracked, and that payments to
veterans and eligible family members are made on a timely basis. Our
2008 request includes $3.5 million to continue the development of The
Education Expert System. This will replace the existing benefit payment
system with one that will, when fully deployed, receive application and
enrollment information and process that information electronically,
reducing the need for human intervention.
VA is requesting $446 million in 2008 for IT infrastructure
projects to support our healthcare, benefits, and burial programs
through implementation and ongoing management of a wide array of
technical and administrative support systems. Our request for resources
in 2008 will support investment in five infrastructure projects now
centrally managed by the CIO--computing infrastructure and operations
($181.8 million); network infrastructure and operations ($31.7
million); voice infrastructure and operations ($71.9 million); data and
video infrastructure and operations ($130.8 million); and regional data
centers ($30.0 million).
VA's 2008 request provides $70.1 million for cyber security. This
ongoing initiative involves the development, deployment, and
maintenance of a set of enterprise-wide controls to better secure our
IT architecture in support of all of the Department's program
operations. Our request also includes $35.0 million for the Financial
and Logistics Integrated Technology Enterprise (FLITE) system. FLITE is
being developed to address a longstanding material weakness and will
effectively integrate and standardize financial and logistics data and
processes across all VA offices as well as provide management with
access to timely and accurate financial, logistics, budget, asset, and
related information on VA-wide operations. In addition, we are asking
for $34.1 million for a new state-of-the-art human resource management
system that will result in an electronic employee record and the
capability to produce critical management information in a fraction of
the time it now takes using our antiquated paper-based system.
Summary
Our 2008 budget request of $86.75 billion will provide the
resources necessary for VA to:
strengthen our position as the Nation's leader in
providing high-quality healthcare to a growing patient population, with
an emphasis on those who count on us the most--veterans returning from
service in Operation Iraqi Freedom and Operation Enduring Freedom,
veterans with service-connected disabilities, those with lower incomes,
and veterans with special healthcare needs;
improve the delivery of benefits through the timeliness
and accuracy of claims processing; and
increase veterans' access to a burial option by opening
new national and state veterans' cemeteries.
I look forward to working with the Members of this Committee to
continue the Department's tradition of providing timely, high-quality
benefits and services to those who have helped defend and preserve
freedom around the world.
Prepared Statement of David G. Greineder
Deputy National Legislative Director, American Veterans (AMVETS)
Chairman Filner, Ranking Member Buyer, and Members of the
Committee:
AMVETS is honored to join our fellow veterans service organizations
and partners at this important hearing on the Department of Veterans
Affairs budget request for fiscal year 2008. My name is David G.
Greineder, Deputy National Legislative Director of AMVETS, and I am
pleased to provide you with our best estimates on the resources
necessary to carry out a responsible budget for VA.
AMVETS testifies before you as a co-author of The Independent
Budget. This is the 21st year AMVETS, the Disabled American
Veterans, the Paralyzed Veterans of America, and the Veterans of
Foreign Wars have pooled their resources together to produce a unique
document, one that has stood the test of time.
The IB, as it has come to be called, is our blueprint for building
the kind of programs veterans deserve. Indeed, we are proud that over
60 veteran, military, and medical service organizations endorse these
recommendations. In whole, these recommendations provide decisionmakers
with a rational, rigorous, and sound review of the budget required to
support authorized programs for our nation's veterans.
In developing this document, we believe in certain guiding
principles. Veterans should not have to wait for benefits to which they
are entitled. Veterans must be ensured access to high-quality medical
care. Specialized care must remain the focus of VA. Veterans must be
guaranteed timely access to the full continuum of healthcare services,
including long-term care. And, veterans must be assured burial in a
state or national cemetery in every state.
Today, I will specifically address the National Cemetery
Administration (NCA), however, I would like to briefly comment on the
Administration's budget request coming out of the Office of Management
and Budget (OMB) just 3 days ago.
Everyone knows that the VA healthcare system is the best in the
country, and responsible for great advances in medical science. VHA is
uniquely qualified to care for veterans' needs because of its highly
specialized experience in treating service-connected ailments. The
delivery care system can provide a wide array of specialized services
to veterans like those with spinal cord injuries and blindness. This
type of care is very expensive and would be almost impossible for
veterans to obtain outside of VA.
Because veterans depend so much on VA and its services, AMVETS
believes it is absolutely critical that the VA healthcare system be
fully funded. It is important our nation keep its promise to care for
the veterans who made so many sacrifices to ensure the freedom of so
many. With the expected increase in the number of veterans, a need to
increase VA healthcare spending should be an immediate priority this
year. We must remain insistent about funding the needs of the system,
and the recruitment and retention of vital healthcare professionals,
especially registered nurses. Chronic under funding has led to
rationing of care through reduced services, lengthy delays in
appointments, higher co-payments and, in too many cases, sick and
disabled veterans being turned away from treatment.
Looking at the Administration's budget, released on Monday, The
Independent Budget recommends Congress provide $36.3 billion to fund VA
medical care for fiscal year 2008. We ask you to recognize that the VA
healthcare system can only bring quality healthcare if it receives
adequate and timely funding.
One option, and we believe the best choice, to ensure VA has access
to adequate and timely resources is through mandatory, or assured,
funding. I would like to clearly state that AMVETS along with its
Independent Budget partners strongly supports shifting VA healthcare
funding from discretionary funding to mandatory. We recommend this
action because the current discretionary system is not working. Moving
to mandatory funding would give certainty to healthcare services. VA
facilities would not have to deal with the uncertainty of discretionary
funding, which has been inconsistent and inadequate for far too long.
Most importantly, mandatory funding would provide a comprehensive and
permanent solution to the current funding problem.
The National Cemetery Administration
The Independent Budget acknowledges the dedicated and committed NCA
staff who continue to provide the highest quality of service to
veterans and their families despite funding shortfalls, aging
equipment, and increasing workload. The devoted staff provides aid and
comfort to hurting veterans' families in a very difficult time, and we
thank them for their consolation.
The NCA currently maintains more than 2.7 million gravesites at 124
national cemeteries in 39 states and Puerto Rico. At the end of 2007,
66 cemeteries will be open to all interments; 16 will accept only
cremated remains and family members of those already interred; and 43
will only perform interments of family members in the same gravesite as
a previously deceased family member.
VA estimates that about 27 million veterans are alive today. They
include veterans from World War I, World War II, the Korean War, the
Vietnam War, the Gulf War, the conflicts in Afghanistan and Iraq, and
the Global War on Terrorism, as well as peacetime veterans. With the
anticipated opening of the new national cemeteries, annual interments
are projected to increase from approximately 102,000 in 2006 to 117,000
in 2009. It is expected that one in every six of these veterans will
request burial in a national cemetery.
The NCA is responsible for five primary missions: (1) To inter,
upon request, the remains of eligible veterans and family members and
to permanently maintain gravesites; (2) to mark graves of eligible
persons in national, state, or private cemeteries upon appropriate
application; (3) to administer the state grant program in the
establishment, expansion, or improvement of state veterans cemeteries;
(4) to award a Presidential certificate and furnish a United States
flag to deceased veterans; and (5) to maintain national cemeteries as
national shrines sacred to the honor and memory of those interred or
memorialized.
NCA Budget Request
The Administration requests $166.8 million for the NCA for fiscal
year 2008. The members of The Independent Budget recommend that
Congress provide $218.3 million and 30 FTE for the operational
requirements of NCA, the National Shrine Initiative, and the backlog of
repairs. We recommend your support for a budget consistent with NCA's
growing demands and in concert with the respect due every man and woman
who wears the uniform of the United States Armed Forces.
The national cemetery system continues to be seriously challenged.
Though there has been progress made over the years, the NCA is still
struggling to remove decades of blemishes and scars from military
burial grounds across the country. Visitors to many national cemeteries
are likely to encounter sunken graves, misaligned and dirty grave
markers, deteriorating roads, spotty turf and other patches of decay
that have been accumulating for decades. If the NCA is to continue its
commitment to ensure national cemeteries remain dignified and
respectful settings that honor deceased veterans and give evidence of
the nation's gratitude for their military service, there must be a
comprehensive effort to greatly improve the condition, function, and
appearance of all our national cemeteries.
In accordance with ``An Independent Study on Improvements to
Veterans Cemeteries,'' which was submitted to Congress in 2002, The
Independent Budget again recommends Congress establish a 5-year, $250
million ``National Shrine Initiative'' to restore and improve the
condition and character of NCA cemeteries as part of the FY2008
operations budget.
It should be noted that the NCA has done an outstanding job thus
far in improving the appearance of our national cemeteries, but we have
a long way to go to get us where we need to be. By enacting a 5-year
program with dedicated funds and an ambitious schedule, the national
cemetery system can fully serve all veterans and their families with
the utmost dignity, respect, and compassion.
The State Cemetery Grants Program
The State Cemetery Grants Program (SCGP) complements the NCA
mission to establish gravesites for veterans in those areas where the
NCA cannot fully respond to the burial needs of veterans. Several
incentives are in place to assist states in this effort. For example,
the NCA can provide up to 100 percent of the development cost for an
approved cemetery project, including design, construction, and
administration. In addition, new equipment, such as mowers and
backhoes, can be provided for new cemeteries. Since 1978, the
Department of Veterans Affairs has more than doubled acreage available
and accommodated more than a 100 percent increase in burials through
this program.
To help provide reasonable access to burial options for veterans
and their eligible family members, The Independent Budget recommends
$37 million for the SCGP for fiscal year 2008. The availability of this
funding will help states establish, expand, and improve state-owned
veterans' cemeteries.
Many states have difficulties meeting the requirements needed to
build a national cemetery in their respective state. The large land
areas and spread out population in these areas make it difficult to
meet the ``170,000 veterans within 75 miles'' national veterans
cemetery requirement. Recognizing these challenges, VA has implemented
several incentives to assist states in establishing a veterans
cemetery. For example, the NCA can provide up to 100 percent of the
development cost for an approved cemetery project, including design,
construction, and administration.
Burial Benefits
There has been serious erosion in the value of the burial allowance
benefits over the years. While these benefits were never intended to
cover the full costs of burial, they now pay for only a small fraction
of what they covered in 1973, when the Federal Government first started
paying burial benefits for our veterans.
In 2001 the plot allowance was increased for the first time in more
than 28 years, to $300 from $150, which covers approximately 6 percent
of funeral costs. The Independent Budget recommends increasing the plot
allowance from $300 to $745, an amount proportionally equal to the
benefit paid in 1973.
In the 108th Congress, the burial allowance for service-connected
deaths was increased from $500 to $2,000. Prior to this adjustment, the
allowance had been untouched since 1988. The Independent Budget
recommends increasing the service-connected burial benefit from $2,000
to $4,100, bringing it back up to its original proportionate level of
burial costs.
The non-service-connected burial allowance was last adjusted in
1978, and also covers just 6 percent of funeral costs. The Independent
Budget recommends increasing the non-service-connected burial benefit
from $300 to $1,270.
The NCA honors veterans with a final resting place that
commemorates their service to this nation. More than 2.7 million
soldiers who died in every war and conflict are honored by burial in a
VA national cemetery. Each Memorial Day and Veterans Day we honor the
last full measure of devotion they gave for this country. Our national
cemeteries are more than the final resting place of honor for our
veterans, they are hallowed ground to those who died in our defense,
and a memorial to those who survived.
Mr. Chairman, this concludes my testimony. I thank you again for
the privilege to present our views, and I would be pleased to answer
any questions you might have.
Statement of Paul A. Morin, National Commander, The American Legion
Mr. Chairman and Members of the Committee:
As The American Legion's National Commander, I thank you for this
opportunity to present the views of its 2.7 million members on the
President's Fiscal Year 2008 budget request.
The President's FY 2008 budget request is designed to allow VA to
address its three highest priorities:
Provide timely, high-quality healthcare to veterans who
need VA the most--those with service-connected disabilities, lower
incomes, special healthcare needs, and service in Operation Iraqi
Freedom and Operation Enduring Freedom.
Address the significant increase in claims for
compensation and pension.
Ensure the burial needs of veterans and their eligible
family members are met, and maintain veterans' cemeteries as national
shrines.
The American Legion will continue to work with the Secretary,
Congress and the entire veterans' community to ensure that VA is indeed
capable of providing the highest quality healthcare services ``. . .
for him who shall have borne the battle and for his widow and his
orphan.'' In 1996, Eligibility Reform was enacted to reopen the VA
healthcare system to all eligible veterans within existing
appropriations. Therefore, the challenge faced is to make sure no
veteran in need of healthcare is ever turned away from a VA medical
care facility as a result of budgetary shortfalls.
There is no question that all service-connected disabled veterans
and economically disadvantaged veterans must receive timely access to
quality healthcare; however, their comrades-in-arms should also receive
their earned benefit--enrollment in the VA healthcare delivery system.
Rather than supporting legislative proposals designed to drive veterans
from the world's best healthcare delivery system, The American Legion
will continue to advocate new revenue streams to allow any veteran to
receive VA healthcare.
Equally as important, The American Legion remains steadfastly in
support of achieving timely adjudication of VA disability claims and
pensions. As a nation at war, the expectation of an increase in the
number of new disability claims is apparent. The newest generation of
wartime veterans rightly deserve timely adjudication of their claims.
Again, the Secretary, Congress and the veterans' community must work
toward meaningful solutions to the ever-increasing backlog of veterans'
disability claims. Increased funding and additional staffing is a solid
first step toward change.
The American Legion fully supports the goals of the National
Cemetery Administration. The addition of new national cemeteries and
state veterans' cemeteries is critical in meeting the growing need.
With that in mind, The American Legion offers the following
budgetary recommendations for selected discretionary programs within
the Department of Veterans Affairs for FY 2008:
----------------------------------------------------------------------------------------------------------------
FY06 Funding President's Request Legion's Request
----------------------------------------------------------------------------------------------------------------
Medical Care $30.8 billion $36.6 billion $38.4 billion
----------------------------------------------------------------------------------------------------------------
Medical Services $22.1 billion $27.2 billion $29 billion
----------------------------------------------------------------------------------------------------------------
Medical Administration $3.4 billion $3.4 billion $3.4 billion
----------------------------------------------------------------------------------------------------------------
Medical Facilities $3.3 billion $3.6 billion $3.6 billion
----------------------------------------------------------------------------------------------------------------
Medical Care Collections ($2 billion) ($2.4 billion) $2.4 billion*
----------------------------------------------------------------------------------------------------------------
Medical and Prosthetics
Research $412 million $411 million $472 million
----------------------------------------------------------------------------------------------------------------
Construction
----------------------------------------------------------------------------------------------------------------
Major $1.6 billion $727 million $1.3 billion
----------------------------------------------------------------------------------------------------------------
Minor $233 million $233 million $279 million
----------------------------------------------------------------------------------------------------------------
State Extended Care
Facilities Grant Program $85 million $85 million $250 million
----------------------------------------------------------------------------------------------------------------
State Veterans' Cemetery
Grants Program $32 million $32 million $42 million
----------------------------------------------------------------------------------------------------------------
National Cemetery
Administration $149 million $166 million $178 million
----------------------------------------------------------------------------------------------------------------
General Administration $294 million $274 million $300 million
----------------------------------------------------------------------------------------------------------------
Information Technology $1.2 billion $1.9 billion $1.9 billion
----------------------------------------------------------------------------------------------------------------
* Third-party reimbursements should supplement rather than offset discretionary funding.
MEDICAL CARE
The Department of Veterans Affairs' standing as the nation's leader
in providing safe, high-quality healthcare in the healthcare industry
(both public and private) is well documented. Now VA is also recognized
internationally as the benchmark for healthcare services:
December 2004, RAND investigators found that VA
outperforms all other sectors of the U.S. healthcare industry across a
spectrum of 294 measures of quality in disease prevention and
treatment;
In an article published in the Washington Monthly (Jan/
Feb 2005) ``The Best Care Anywhere'' featured the VA healthcare system;
In the prestigious Journal of the American Medical
Association (May 18, 2005) noted that VA's healthcare system has ``. .
. quickly emerged as a bright star in the constellation of safety
practice, with system-wide implementation of safe practices, training
programs and the establishment of four patient-safety research
centers.'';
The U.S. News and World Report (Jul 18, 2005) issue
included a special report on the best hospitals in the country titled
``Military Might--Today's VA Hospitals Are Models of Top-Notch Care''
highlighting the transformation of VA healthcare;
The Washington Post (Aug 22, 2005) ran a front-page
article titled ``Revamped Veterans' Health Care Now a Model'' that
spotlights VA healthcare accomplishments;
In 2006, VA received the highly coveted and prestigious
``Innovations in American Government'' Award from Harvard's Kennedy
School of Government for its advanced electronic health records and
performance measurement system; and
Recently, in January 2007, the medical journal Neurology
wrote: ``The VA has achieved remarkable improvements in patient care
and health outcomes, and is a cost-effective and efficient
organization.''
Although VA is considered a national resource, the Secretary of
Veterans Affairs continues to prohibit the enrollment of any new
Priority Group 8 veterans, even if they are Medicare-eligible or have
private insurance coverage. This prohibition is not based on their
honorable military service, but rather on limited resources provided to
the VA medical care system. For 2 years following receiving an
honorable discharge, veterans from Operations Enduring Freedom and
Iraqi Freedom are able to receive healthcare through VA, but many of
their fellow veterans and those of other armed conflicts may very well
be denied enrollment due to limited existing appropriations. This is
truly a national tragedy.
As the Global War on Terrorism continues, fiscal resources for VA
will continue to be stretched to their limits and veterans will
continue to go to their elected officials requesting additional money
to sustain a viable VA capable of caring for all veterans, not just the
most severely wounded or economically disadvantaged. VA is often the
first experience veterans have with the Federal Government after
leaving the military. This nation's veterans have never let this
country down; Congress and VA should do its best to not let veterans
down.
The President's budget request for FY 2008 calls for Medical Care
funding to be $36.6 billion, which is about $1.8 billion less than The
American Legion's recommendation of $38.4 billion. The major difference
is the President's budget request continues to offset the discretionary
appropriations by its Medical Care Collection Fund's goal ($2.4
billion), whereas The American Legion considers this collection as a
supplement since it is for the treatment of nonservice-connected
medical conditions.
Medical Services
The President's budget request assumes the enrollment of new
Priority Group 8 veterans will remain suspended. The American Legion
strongly recommends reconsidering this ``lockout'' of eligible
veterans, especially for those veterans who are Medicare-eligible,
military retirees enrolled in TRICARE or TRICARE for Life, or have
private healthcare coverage. Successful seamless transition from
military service should not be penalized, but rather encouraged. This
prohibition sends the wrong message to recently separated veterans. No
eligible veteran should be ``locked out'' of the VA healthcare delivery
system.
The VA healthcare system enjoys a glowing reputation as the best
healthcare delivery system in the country, so why ``lock out'' any
eligible veteran, especially those that have the means to reimburse VA
for services received? New revenue streams from third-party
reimbursements and co-payments can supplement the ``existing
appropriations,'' but sound fiscal management initiatives are required
to enhance third-party collections of reasonable charges.
In FY 2008, VA expects to treat 5.8 million patients (an increase
of 2.4 percent). According to the President's budget request, VA will
treat over 125,000 more Priority 1-6 veterans in 2008 representing a
3.3 percent increase over the number of these priority veterans treated
in 2007. Priority 7 and 8 veterans are projected to decrease by over
15,000 or 1.1 percent from 2007 to 2008. However, VA will provide
medical care to non-veterans; this population is expected to increase
by over 24,000 patients or 4.8 percent over this same time period. In
2008, VA anticipates treating 263,000 Operation Iraqi Freedom (OIF) and
Operation Enduring Freedom (OEF) veterans, an increase of 54,000
patients, or 25.8 percent, over the 2007 level.
The American Legion supports the President's mental health
initiative to provide $360 million to deliver mental health and
substance abuse care to eligible veterans in need of treatment of
serious mental illness, to include post-traumatic stress disorder.
The American Legion remains opposed to the concept of charging an
enrollment fee for an earned benefit. Although the President's new
proposal is a tiered approach targeted at Priority Groups 7 and 8
veterans currently enrolled, the proposal does not provide improved
healthcare coverage, but rather creates a fiscal burden for the 1.4
million Priority Groups 7 and 8 patients. This initiative clearly
projects further reductions in the number of Priority Groups 7 and 8
veterans leaving the system for other healthcare alternatives. This
proposed vehicle for gleaning of veterans would apply to both service-
connected disabled veterans as well as nonservice-connected disabled
veterans in Priority Groups 7 and 8.
The American Legion also remains opposed to the President's
proposed increase in VA pharmacy co-pays from the current $8 to $15 for
enrolled Priority Groups 7 and 8 veterans. This proposal would nearly
double current pharmacy costs to this select group of veterans.
The American Legion recommends $29 billion for Medical Services,
$1.8 billion more than the President's budget request of $27.2 billion.
Medical Administration
The President's budget request of $3.4 billion is a slight increase
in FY 2006 funding level. VA plans to transfer 3,721 full-time
equivalents from Medical Administration to Information Technology in FY
2008. The American Legion applauds the President recommending this
level of funding.
Medical Facilities
The President's budget request of $3.6 billion is about $234
million more than the FY 2006 funding level. The American Legion agrees
with this recommendation to maintain VA existing infrastructure of
4,900 buildings and over 15,700 acres. In FY 2008, VA will transfer
5,689 full-time equivalents from Medical Facilities to Medical
Services. It has been determined that the costs incurred for hospital
food service workers, provisions and related supplies are for the
direct care of patients which Medical Services is responsible for
providing.
Medical Care Collection Fund (MCCF)
The Balanced Budget Act of 1997, Public Law 105-33, established the
VA Medical Care Collections Fund (MCCF), requiring that amounts
collected or recovered from third-party payers after June 30, 1997 be
deposited into this fund. The MCCF is a depository for collections from
third-party insurance, outpatient prescription co-payments and other
medical charges and user fees. The funds collected may only be used for
providing VA medical care and services and for VA expenses for
identification, billing, auditing and collection of amounts owed the
Federal Government. The American Legion supported legislation to allow
VA to bill, collect, and reinvest third-party reimbursements and co-
payments; however, The American Legion adamantly opposes the scoring of
MCCF as an offset to the annual discretionary appropriations since the
majority of the collected funds come from the treatment of nonservice-
connected medical conditions. Historically, these collection goals far
exceed VA's ability to collect accounts receivable.
In FY 2006, VA collected nearly $2 billion, a significant increase
over the $540 million collected in FY 2001. VA's ability to capture
these funds is critical to its ability to provide quality and timely
care to veterans. Miscalculations of VA required funding levels result
in real budgetary shortfall. Seeking annual emergency supplemental is
not the most cost-effective means of funding the nation's model
healthcare delivery system.
Government Accountability Office (GAO) reports have described
continuing problems in VHA's ability to capture insurance data in a
timely and correct manner and raised concerns about VHA's ability to
maximize its third-party collections. At three medical centers visited,
GAO found an inability to verify insurance, accepting partial payment
as full, inconsistent compliance with collections follow-up,
insufficient documentation by VA physicians, insufficient automation
and a shortage of qualified billing coders were key deficiencies
contributing to the shortfalls. VA should implement all available
remedies to maximize its collections of accounts receivable.
The American Legion opposes offsetting annual VA discretionary
funding by the arbitrarily set MCCF goal, especially since VA is
prohibited from collecting any third-party reimbursements from the
nation's largest Federally mandated health insurer--Medicare.
Medicare Reimbursement
As do most American workers, veterans pay into the Medicare system
without choice throughout their working lives, including active-duty. A
portion of each earned dollar is allocated to the Medicare Trust Fund
and although veterans must pay into the Medicare system, VA is
prohibited from collecting any Medicare reimbursements for the
treatment of allowable, nonservice-connected medical conditions. This
prohibition constitutes a multi-billion dollar annual subsidy to the
Medicare Trust Fund. The American Legion does not agree with this
policy and supports Medicare reimbursement for VHA for the treatment of
allowable, nonservice-connected medical conditions of allowable
enrolled Medicare-eligible veterans.
As a minimum, VA should receive credit for saving the Centers for
Medicare and Medicaid Services billions of dollars in annual mandatory
appropriations.
MEDICAL AND PROSTHETICS RESEARCH
The American Legion believes that VA's focus in research should
remain on understanding and improving treatment for conditions that are
unique to veterans. The Global War on Terrorism is predicted to last at
least two more decades. Service members are surviving catastrophically
disabling blast injuries in Iraq, Afghanistan and elsewhere due to the
superior armor they are wearing in the combat theater and the timely
access to quality triage. The unique injuries sustained by the new
generation of veterans clearly demands particular attention. There have
been reported problems of VA not having the state-of-the-art
prostheses, like DoD, and that the fitting of the prostheses for women
has presented problems due to their smaller stature.
In addition, The American Legion supports adequate funding for
other VA research activities, including basic biomedical research as
well as bench-to-bedside projects. Congress and the Administration
should encourage acceleration in the development and initiation of
needed research on conditions that significantly affect veterans--such
as prostate cancer, addictive disorders, trauma and wound healing,
post-traumatic stress disorder, rehabilitation, and others jointly with
DoD, the National Institutes of Health (NIH), other Federal agencies,
and academic institutions.
The American Legion recommends $472 million for Medical and
Prosthetics Research in FY 2008, $61 million more than the President's
budget request of $411 million.
CONSTRUCTION
Major Construction
Over the past several years, Congress has kept a tight hold on the
purse strings that control the funding needs for the construction
program within VA. The hold out, presumably, is the development of a
coherent national plan that will define the infrastructure VA will need
in the decades to come. VA has developed that plan and it is CARES. The
CARES process identified more than 100 major construction projects in
37 states, the District of Columbia, and Puerto Rico. Construction
projects are categorized as major if the estimated cost is over $7
million. Now that VA has a plan to deliver healthcare through the year
2022, it is up to Congress to provide adequate funds. The CARES plan
calls for, among other things, the construction of new hospitals in
Orlando and Las Vegas and replacement facilities in Louisville and
Denver for a total cost estimate of well over $1 billion alone for
these four facilities. VA has not had this type of progressive
construction agenda in decades. Major construction money can be
significant and proper utilization of funds must be well planned out.
The American Legion is pleased to see six medical facility projects
(Pittsburgh, Denver, Orlando, Las Vegas, Syracuse, and Lee County, FL)
included in this budget request.
In addition to the cost of the proposed new facilities are the many
construction issues that are virtually ``put on hold'' for the past
several years due to inadequate funding and the moratorium placed on
construction spending by the CARES process. One of the most glaring
shortfalls is the neglect of the buildings sorely in need of seismic
correction. This is an issue of safety. Hurricane Katrina taught a very
real lesson on the unacceptable consequences of procrastination. The
delivery of healthcare in unsafe buildings cannot be tolerated and
funds must be allocated to not only construct the new facilities, but
also to pay for much-needed upgrades at existing facilities. Gambling
with the lives of veterans, their families and VA employees is
absolutely unacceptable.
The American Legion believes that VA has effectively shepherded the
CARES process to its current state by developing the blueprint for the
future delivery of VA healthcare--it is now time for Congress to do the
same and adequately fund the implementation of this comprehensive and
crucial undertaking.
The American Legion recommends $1.3 billion for Major Construction
in FY 2008, $573 million more than the President's budget request of
$727 million to fund more pending ``life-safety'' projects.
Minor Construction
VA's minor construction program has suffered significant neglect
over the past several years as well. The requirement to maintain the
infrastructure of VA's buildings is no small task. Because the
buildings are old, renovations, relocations and expansions are quite
common. When combined with the added cost of the CARES program
recommendations, it is easy to see that a major increase over the
previous funding level is crucial and well overdue.
The American Legion recommends $279 million for Minor Construction
in FY 2008, $46 million more than the President's budget request of
$233 million to address more CARES proposal minor construction
projects.
Capital Asset Realignment for Enhanced Services (CARES)
In March 1999, GAO published a report on VA's need to improve
capital asset planning and budgeting. GAO estimated that over the next
few years, VA could spend one of every four of its healthcare dollars
operating, maintaining, and improving capital assets at its national
major delivery locations, including 4,700 buildings and 18,000 acres of
land nationwide.
Recommendations stemming from the report included the development
of asset-restructuring plans for all markets to guide future investment
decisionmaking, among other initiatives. VA's answer to GAO and
Congress was the initiation and development of the Capital Asset
Realignment for Enhanced Services (CARES) program.
The CARES initiative is a blueprint for the future of VHA--a fluid
work in progress, in constant need of reassessment. In May 2004, the
long awaited final CARES decision was released. The decision directed
VHA to conduct 18 feasibility studies at those healthcare delivery
sites where final decisions could not be made due to inaccurate and
incomplete information. VHA contracted Pricewaterhouse Cooper (PwC) to
develop a broad range of viable options and, in turn, develop business
plans based on a limited number of selected options. To help develop
those options and to ensure stakeholder input, then-VA Secretary
Principi constituted the Local Advisory Panels (LAPs), which are made
up of local stakeholders. The final decision on which business plan
option will be implemented for each site lies with the Secretary of
Veterans Affairs.
The American Legion is dismayed over the slow progress in the LAP
process and the CARES initiative overall. Both Stage I and Stage II of
the process include two scheduled LAP meetings at each of the sites
being studied with the whole process concluding on or about February
2006.
It wasn't until April 2006, after nearly a 7-month hiatus, that
Secretary Nicholson announced the continuation of the services at Big
Spring, Texas, and like all the other sites, has only been through
Stage I. Seven months of silence is no way to reassure the veterans'
community that the process is alive and well. The American Legion
continues to express concern over the apparent short-circuiting of the
LAPs and the silencing of the stakeholders. The American Legion intends
to hold accountable those who are entrusted to provide the best
healthcare services to the most deserving population--the nation's
veterans.
Upon conclusion of the initial CARES process, then-Secretary
Principi called for a ``billion dollars a year for the next seven
years'' to implement CARES. The American Legion continues to support
that recommendation and encourages VA and Congress to ``move out'' with
focused intent.
STATE EXTENDED CARE FACILITY GRANTS PROGRAM
Since 1984, nearly all planning for VA inpatient nursing home care
has revolved around State Veterans' Homes and contracts with public and
private nursing homes. The reason for this is obvious; VA paid a per
diem of $59.48 for each veteran it placed in State Veterans' Homes,
compared to the $354 VA pays to maintain a veteran for 1 day in its own
nursing home care units.
Under the provisions of title 38, United States Code, VA is
authorized to make payments to states to assist in the construction and
maintenance of State Veterans' Homes. Today, there are 109 State
Veterans' Homes in 47 states with over 23,000 beds providing nursing
home, hospital, and domiciliary care. Grants for Construction of State
Extended Care Facilities provide funding for 65 percent of the total
cost of building new veterans homes. Recognizing the growing long-term
healthcare needs of older veterans, it is essential that the State
Veterans' Home Program be maintained as a viable and important
alternative healthcare provider to the VA system. The American Legion
opposes any attempts to place moratoria on new State Veterans' Home
construction grants. State authorizing legislation has been enacted and
state funds have been committed. The West Los Angeles State Veterans'
Home, alone, is a $125 million project. Delaying this and other
projects could result in cost overruns from increasing building
materials costs and may result in states deciding to cancel these much-
needed facilities.
The American Legion supports:
increasing the amount of authorized per diem payments to
50 percent for nursing home and domiciliary care provided to veterans
in State Veterans' Homes;
the provision of prescription drugs and over-the-counter
medications to State Veterans' Homes Aid and Attendance patients along
with the payment of authorized per diem to State Veterans' Homes; and
allowing for full reimbursement of nursing home care to
70 percent service-connected veterans or higher, if the veteran resides
in a State Veterans' Home.
The American Legion recommends $250 million for the State Extended
Care Facility Construction Grants Program in FY 2008, $165 million more
than the President's budget request. This additional funding will
address more pending life-safety projects and new construction
projects.
STATE CEMETERY GRANTS PROGRAM
The State Veterans' Cemetery Grant Program is not intended to
replace National Cemeteries, but to complement them. Grants for state-
owned and operated cemeteries can be used to establish, expand and
improve on existing cemeteries. States are planning to open 24 new
state veterans' cemeteries between 2007 and 2012. There are 60
operational cemeteries and two more under construction. Since NCA
concentrates its construction resources on large metropolitan areas, it
is unlikely that new national cemeteries will be constructed in all
states. Therefore, individual states are encouraged to pursue
applications for the State Cemetery Grants Program. Fiscal commitment
from the state is essential to keep the operation of the cemetery on
track. NCA estimates it takes about $300,000 a year to operate a state
cemetery.
The American Legion recommends $42 million for the State Cemetery
Grants Program in FY 2008, $10 million more than the President's budget
request.
NATIONAL CEMETERY ADMINISTRATION
The mission of the National Cemetery Administration is to honor
veterans with final resting places in national shrines and with lasting
tributes that commemorate their service to this Nation. The National
Cemetery Administration's vision is to serve all veterans and their
families with the utmost dignity, respect, and compassion. Every
national cemetery should be a place that inspires visitors to
understand and appreciate the service and sacrifice of this Nation's
veterans.
National Cemetery Expansion
The American Legion supported P.L. 108-109, the National Cemetery
Expansion Act of 2003, authorizing VA to establish new national
cemeteries to serve veterans in the areas of: Bakersfield, Calif.;
Birmingham, Ala.; Jacksonville, Fla.; Sarasota County, Fla.;
southeastern Pennsylvania; and Columbia-Greenville, S.C. All six areas
have veterans' populations exceeding 170,000, which is the threshold VA
has established for new national cemeteries. By 2009, all six new
national cemeteries should be open to serve veterans in these areas.
There are approximately 24 million veterans alive today. Nearly
688,000 veteran deaths are estimated to occur in 2008. The total number
of graves maintained by VA is expected to increase from 2.8 million in
2006 to just over 3.2 million by 2012. The VA expects that at least 12
percent of these veterans will request burial in a national cemetery.
Considering the growing costs of burial services and the excellent
quality of service the NCA is providing, The American Legion foresees
that this percentage will be much greater. By 2012, four more national
cemeteries are expected to exhaust their supply of available,
unassigned gravesites.
Congress must provide sufficient major construction appropriations
to permit NCA to accomplish its stated goal of ensuring that burial in
a national or state cemetery is a realistic option by locating
cemeteries within 75 miles of 90 percent of eligible veterans.
National Shrine Commitment
Maintaining cemeteries as National Shrines is one of NCA's top
priorities. This commitment involves raising, realigning and cleaning
headstones and markers to renovate gravesites. The work that has been
done so far has been outstanding; however, adequate funding is key to
maintaining this very important commitment. The American Legion
supports NCA's goal of completing the National Shrine Commitment within
5 years. This commitment includes the establishment of standards of
appearance for national cemeteries that are equal to the standards of
the finest cemeteries in the world. Operations, maintenance and
renovation funding must be increased to reflect the true requirements
of the NCA to fulfill this commitment.
The American Legion recommends $178 million for the National
Cemetery Administration in FY 2008, $12 million more than the
President's budget request.
INFORMATION TECHNOLOGY
The data theft that occurred in May of last year serves as a
monumental wake up call to the nation. VA can no longer ignore IT
security. The recovery of the laptop is indeed cause for optimism;
however, we must not discount the possibility that every name on that
list could still be subject to possible identity theft. The complete
overhaul of VA IT is only in its beginning stages. Meanwhile, there are
still unresolved security breaches within VA including the most recent
theft of a laptop from a VA contractor. How many computers need to be
stolen before veterans get some real assurances from the Federal
Government that their information is not only safe, but that safeguards
will be in place to help protect them against identity theft? The
American Legion once again calls on VA and the Administration to keep
its promise to veterans and provide free credit monitoring for 1 year.
The American Legion is hopeful that the steps VA takes to strengthen
its IT security will renew the confidence and trust of veterans who
depend on VA for the benefits they have earned.
Funding for the IT overhaul should not be paid for with money from
other VA programs. This would in essence make veterans pay for VA's
gross negligence in the matter. The American Legion hopes that Congress
will not attempt to fix this problem on the backs of America's veterans
and from scarce fiscal resources provided to the VA healthcare
delivery.
VA has shown it can be a leader in the areas of care and service.
Its accomplishments, from providing high quality medical care to
leading the world in the development of electronic records, are
indicators that VA can also be the nation's leader in IT security.
The American Legion believes that there should be a complete review
of IT security governmentwide. VA isn't the only agency within the
government that needs to overhaul its IT security protocol. The
American Legion would urge Congress to exercise its oversight authority
and review each Federal agency to ensure that the personal information
of all Americans is secure.
The American Legion agrees with the President's budget request for
$1.9 billion for Information Technology in FY 2008.
VA's LONG-TERM CARE MISSION
Historically, VA's Long-Term Care (LTC) has been the subject of
discussion and legislation for nearly two decades. In a landmark July
1984 study, Caring for the Older Veteran, it was predicted that a wave
of elderly veterans had the potential to overwhelm VA's long-term care
capacity. Further, the recommendations of the Federal Advisory
Committee on the Future of Long-Term Care in its 1998 report VA Long-
Term Care at the Crossroads, made recommendations that serve as the
foundation for VA's national strategy to revitalize and reengineer
long-term care services. It is now 2006 and that wave of veterans has
arrived.
Additionally, Public Law 106-117, the Millennium Act, enacted in
November 1999, required VA to continue to ensure 1998 levels of
extended care services (defined as VA nursing home care, VA
domiciliary, VA home-based primary care, and VA adult day healthcare)
in its facilities. Yet, VA has continually failed to maintain the 1998
bed levels mandated by law.
VA's inability to adequately address the long-term care problem
facing the agency was most notable during the CARES process. The
planning for the long-term care mission, one of the major services VA
provides to veterans, was not even addressed in the CARES initiative.
That CARES initiative is touted as the most comprehensive analysis of
VA's healthcare infrastructure that has ever been conducted.
Incredibly, despite 20 years of forewarning, the CARES Commission
report to the VA Secretary states that VA has yet to develop a long-
term care strategic plan with well-articulated policies that address
the issues of access and integrated planning for the long-term care of
seriously mentally ill veterans. The Commission also reported that VA
had not yet developed a consistent rationale for the placement of long-
term care units. It was not for the lack of prior studies that VA has
never had a coordinated long-term care strategy. The Secretary's CARES
decision agreed with the Commission and directed VHA to develop a
strategic plan, taking into consideration all of the complexities
involved in providing such care across the VA system.
The American Legion supports the publishing and implementation of a
long-term care strategic plan that addresses the rising long-term care
needs of America's veterans. We are, however, disappointed that it has
now been over 2 years since the CARES decision and no plan has been
published.
It is vital that VA meet the long-term care requirements of the
Millennium Health Care Act and we urge this Committee to support
adequate funding for VA to meet the long-term care needs of America's
Veterans. The American Legion supports the President's $4.6 billion
funding recommendation for FY 2008.
HOMELESS VETERANS
VA has estimated that there are at least 250,000 homeless veterans
in America and approximately 500,000 experience homelessness in a given
year. Most homeless veterans are single men; however, the number of
single women with children has drastically increased within the last
few years. Homeless female veterans tend to be younger, are more likely
to be married, and are less likely to be employed. They are also more
likely to suffer from serious psychiatric illness.
Approximately 40 percent of homeless veterans suffer from mental
illness and 80 percent have alcohol or other drug abuse problems. It
cannot go unnoticed that the increase in homeless veterans coincides
with the under-funding of VA healthcare, which resulted in the
downsizing of inpatient mental health capabilities in VA hospitals
across the country. Since 1996, VA has closed 64 percent of its
psychiatric beds and 90 percent of its substance abuse beds. It is no
surprise that many of these displaced patients end up in jail, or on
the streets. The American Legion applauds VA's recent plan to restore a
good portion of this capacity. The American Legion believes there
should be a focus on the prevention of homelessness, not just measures
to respond to it. Preventing it is the most important step to ending
it.
The American Legion has a vision to assist in ending homelessness
among veterans, by ensuring services are available to respond to
veterans and their families in need before they experience
homelessness. Toward that objective, The American Legion in partnership
with the National Coalition for Homeless Veterans created a Homeless
Veterans Task Force. The mission of the Task Force is to develop and
implement solutions to end homelessness among veterans through
collaborating with government agencies, homeless providers and other
veteran service organizations. In the last 2 years, 16 homeless
veterans workshops were conducted during The American Legion National
Leadership Conferences, National Convention and Mid-Winter Conferences.
Currently, there are 51 Homeless Veterans Chairpersons within The
American Legion who act as liaison to Federal, state and community
homeless agencies and monitor fundraising, volunteerism, advocacy and
homeless prevention activities within participating American Legion
Departments.
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. While less than 9 percent of the nation's
population are veterans, 34 percent of the nation's homeless are
veterans and of those 75 percent are wartime veterans.
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 her streets in desperate need of
medical and psychiatric attention and financial support. While there
have been great strides in ending homelessness among America's
veterans, there is much more that needs to be done. We must not forget
them. The American Legion supports funding that will lead to the goal
of ending homelessness in the next 10 years.
Homeless Providers Grant and Per Diem Program Reauthorization
In 1992, VA was given authority to establish the Homeless Providers
Grant and Per Diem Program under the Homeless Veterans Comprehensive
Service Programs Act of 1992, P.L. 102-590. The Grant and Per Diem
Program is offered annually (as funding permits) by the VA to fund
community agencies providing service to homeless veterans.
The American Legion strongly supports changing the Grant and Per
Diem Program to be funded on a 5-year period instead of annually and a
funding level increase to the $200 million level annually.
VETERANS BENEFITS ADMINISTRATION (VBA)
The VA has a statutory responsibility to ensure the welfare of the
nation's veterans, their families, and survivors. Providing quality
decisions in a timely manner has been, and will continue to be, one of
the VA's most difficult challenges.
Workload and Claims Backlog
There are approximately 3.5 million veterans and beneficiaries
currently receiving VA compensation and pension benefits. In 2006, VA
added almost 250,000 new beneficiaries to the compensation and pension
rolls. VA anticipates receiving about 800,000 claims a year in 2007 and
2008. The current staffing levels do not enable VA to reduce the
pending claims inventory and provide timely service to veterans;
therefore, the President is requesting an increase of 457 full-time
equivalents compensation and pension personnel. The productivity of the
additional staff will increase throughout 2008 and in subsequent years
as these new employees receive training and gain experience. VA
believes the additional staffing will enable VBA to improve claims
processing timeliness, reduce appeals workload, improve appeals
processing timeliness, and enhance services to veterans returning from
the Global War on Terrorism.
The increasing complexity of VA claims adjudication continues to be
a major challenge for VA rating specialists. Since judicial review of
veterans' claims was enacted in 1988, the remand rate of those cases
appealed to the United States Court of Appeals for Veterans Claims
(CAVC) has, historically, been about 50 percent. In a series of
precedent-setting decisions by the CAVC and the United States Court of
Appeals for the Federal Circuit, a number of longstanding VA policies
and regulations have been invalidated because they were not consistent
with statute. These court decisions immediately added thousands of
cases to regional office workloads, since they require the review and
reworking of tens of thousands of completed and pending claims.
As of August 19, 2006, there were more than 389,000 rating cases
pending in the VBA system. Of these, 92,047 (23.6 percent) have been
pending for more than 180 days. According to the VA, the appeals rate
has also increased from a historical rate of about 7 percent of all
rating decisions being appealed to a current rate that fluctuates from
11 to 14 percent. This equates to more than 152,000 appeals currently
pending at VA regional offices, with more than 132,000 requiring some
type of further adjudicative action.
Staffing
Whether complex or simple, VA regional offices are expected to
consistently develop and adjudicate veterans' and survivors' claims in
a fair, legally proper, and timely manner. The adequacy of regional
office staffing has as much to do with the actual number of personnel
as it does with the level of training and competency of the
adjudication staff. VBA has lost much of its institutional knowledge
base over the past 4 years, due to the retirement of many of its 30-
plus year employees. As a result, staffing at most regional offices is
made up largely of trainees with less than 5 years of experience. Over
this same period, as regional office workload demands escalated, these
trainees have been put into production units as soon as they completed
their initial training.
Concern over adequate staffing in VBA to handle its demanding
workload was addressed by VA's Office of the Inspector General (IG) in
a report released in May 2005 (Report No. 05-00765-137, dated May 19,
2005). The IG specifically recommended, ``in view of growing demand,
the need for quality and timely decisions, and the ongoing training
requirements, reevaluate human resources and ensure that the VBA field
organization is adequately staffed and equipped to meet mission
requirements.'' The Under Secretary for Benefits has conceded that the
number of personnel has decreased over the last few years. And the
congressionally mandated Veterans' Disability Benefits Commission is
also closely looking at the adequacy of current staffing levels.
It is an extreme disservice to veterans, not to mention
unrealistic, to expect VA to continue to process an ever increasing
workload, while maintaining quality and timeliness, with less staff.
Our current wartime situation provides an excellent opportunity for VA
to actively seek out returning veterans from Operations Enduring
Freedom and Iraqi Freedom, especially those with service-connected
disabilities, for employment opportunities within VBA. To ensure VA and
VBA are meeting their responsibilities, The American Legion strongly
urges Congress to scrutinize VBA's budget requests more closely. Given
current and projected future workload demands, regional offices clearly
will need more rather than fewer personnel and The American Legion is
ready to support additional staffing. However, VBA must be required to
provide better justification for the resources it says are needed to
carry out its mission and, in particular, how it intends to improve the
level of adjudicator training, job competency, and quality assurance.
GI BILL EDUCATION BENEFITS
Over 96 percent of recruits currently sign up for the MGIB and pay
$1,200 out of their first year's pay to guarantee eligibility. However,
only one-half of these military personnel use any of the current
Montgomery GI Bill benefits. We believe this is directly related to the
fact that current GI Bill benefits have not kept pace with the
increasing cost of education. Costs for attending the average 4-year
public institution as a commuter student during the 1999-2000 academic
year was nearly $9,000. On October 1, 2005, the basic monthly rate of
reimbursement under MGIB was raised to $1,034 per month for a
successful 4-year enlistment and $840 for an individual whose initial
active duty obligation was less than 3 years. The current educational
assistance allowance for persons training full-time under the MGIB
Selected Reserve is $297 per month.
The Servicemen's Readjustment Act of 1944, P.L. 78-346, the
original GI Bill, provided millions of members of the Armed Forces an
opportunity to seek higher education. Many of these individuals may not
have been afforded this opportunity without the generous provisions of
that act. Consequently, these former service members made a substantial
contribution not only to their own careers, but also to the economic
wellbeing of the country. Of the 15.6 million veterans eligible, 7.8
million took advantage of the educational and training provisions of
the original GI Bill. Between 1944 and 1956, when the original GI Bill
ended, the total educational cost of the World War II bill was $14.5
billion. The Department of Labor estimates that the government actually
made a profit, because veterans who had graduated from college
generally earned higher salaries and, therefore, paid more taxes.
Today, a similar concept applies. The educational benefits provided
to members of the Armed Forces must be sufficiently generous to have an
impact. The individuals who use MGIB educational benefits are not only
improving their career potential, but also making a greater
contribution to their community, state, and nation.
The American Legion recommends the 110th Congress make the
following improvements to the current MGIB:
The dollar amount of the entitlement should be indexed to
the average cost of a college education including tuition, fees,
textbooks, and other supplies for a commuter student at an accredited
university, college, or trade school for which they qualify;
The educational cost index should be reviewed and
adjusted annually;
A monthly tax-free subsistence allowance indexed for
inflation must be part of the educational assistance package;
Enrollment in the MGIB shall be automatic upon
enlistment; however; benefits will not be awarded unless eligibility
criteria have been met;
The current military payroll deduction ($1,200)
requirement for enrollment in MGIB must be terminated;
If a veteran enrolled in the MGIB acquired educational
loans prior to enlisting in the Armed Forces, MGIB benefits may be used
to repay those loans;
If a veteran enrolled in MGIB becomes eligible for
training and rehabilitation under Chapter 31, of title 38, United
States Code, the veteran shall not receive less educational benefits
than otherwise eligible to receive under MGIB;
Separating service members and veterans seeking a
license, credential, or to start their own business must be able to use
MGIB educational benefits to pay for the cost of taking any written or
practical test or other measuring device;
Eligible veterans shall have an unlimited number of years
after discharge to utilize MGIB educational benefits;
Eligible veterans should have the right to transfer their
earned benefits to their spouse and dependents; and
Eligible members of the Select Reserves, who qualify for
MGIB educational benefits shall receive not more than half of the
tuition assistance and subsistence allowance payable under the MGIB and
have up to 5 years after their date of separation to use MGIB
educational benefits.
VOCATIONAL REHABILITATION AND EMPLOYMENT SERVICE (VR&E)
The mission of the VR&E program is to help qualified, service-
disabled veterans achieve independence in daily living and, to the
maximum extent feasible, obtain and maintain suitable employment. The
American Legion fully supports these goals. As a nation at war, there
continues to be an increasing need for VR&E services to assist
Operations Iraqi Freedom and Enduring Freedom veterans in reintegrating
into independent living, achieving the highest possible quality of
life, and securing meaningful employment. To meet America's obligation
to these specific veterans, VA leadership must focus on marked
improvements in case management, vocational counseling, and--most
importantly--job placement.
The successful rehabilitation of our severely disabled veterans is
determined by the coordinated efforts of every Federal agency (DoD, VA,
DoL, OPM, HUD, etc.) involved in the seamless transition from the
battlefield to the civilian workplace. Timely access to quality
healthcare services, favorable physical rehabilitation, vocational
training, and job placement play a critical role in the ``seamless
transition'' of each and every veteran, as well as his or her family.
Administration of VR&E and its programs is a responsibility of the
Veterans Benefits Administration (VBA). Providing effective employment
programs through VR&E must become a priority. Until recently, VR&E's
primary focus has been providing veterans with skills training, rather
than providing assistance in obtaining meaningful employment. Clearly,
any employability plan that doesn't achieve the ultimate objective--a
job--is falling short of actually helping those veterans seeking
assistance in transitioning into the civilian workforce.
Vocational counseling also plays a vital role in identifying
barriers to employment and matching veterans' transferable job skills
with those career opportunities available for fully qualified
candidates. Becoming fully qualified becomes the next logical objective
toward successful transition.
Veterans Preference in Federal hiring plays an important role in
guiding veterans to career possibilities within the Federal Government
and must be preserved. There are scores of employment opportunities
within the Federal Government that educated, well-trained, and
motivated veterans can fill--given a fair and equitable chance to
compete. Working together, all Federal agencies should identify those
vocational fields, especially those with high turnover rates, suitable
for VR&E applicants. Career fields like information technology, claims
adjudications, debt collection, etc., offer employment opportunities
and challenges for career-oriented applicants that also create career
opportunities outside the Federal Government.
GAO has also cited exceptionally high workloads for a limited
number of staff members at VR&E offices. This increased workload
hinders the staff's ability to effectively assist individual veterans
with identifying employment opportunities. In April 2005, the average
caseload of a typical VR&E counselor approached 160 veterans. The
American Legion is pleased that an additional number of 150 full-time
equivalents will be hired and we applaud the President's budget request
for $159.5 million in FY 2008. It is vital that Congress approve this
request to adequately address the expected increase of veterans needing
assistance.
HOME LOAN GUARANTY PROGRAM
VA's Home Loan Guaranty program has been in effect since 1944 and
has afforded nearly 17 million veterans the opportunity to purchase
homes. The Home Loan programs offer veterans a centralized, affordable
and accessible method of purchasing homes in return for their service
to this nation. The program has been so successful over past years that
not only has the program paid for itself but has also shown a profit in
recent years. The American Legion believes that it is unfair for
veterans to pay high funding fees of 2 to 3 percent, which can add
approximate $3,000 to $11,000 for a first time buyer. The VA funding
fee was initially enacted to defray the costs of the VA guaranteed home
loan program. The current funding fee paid to VA to defray the cost of
the home loan has had a negative effect on many veterans who choose not
to participate in this highly beneficial program. Therefore, The
American Legion strongly recommends that the VA funding fee on home
loans be reduced or eliminated for all veterans whether active duty,
reservist, or National Guard.
Specially Adapted Housing
The American Legion believes that with the increasing numbers of
disabled veterans returning from Iraq and Afghanistan, the need for
specially adapted housing is paramount. Therefore, The American Legion
strongly recommends that the current $50,000 grant for specially
adapted housing be increased to $55,000 and special home adaptations be
increased from $10,000 to $12,300. Specially adapted housing grants are
available for the installation of wheelchair ramps, chair lifts,
modifications to kitchens and bathrooms and other adaptations to homes
for veterans who cannot move about without the use of wheelchairs,
canes or braces or who are blind and suffer the loss or loss of use of
one lower extremity. Special home adaptation grants are available for
veterans who are legally blind or have lost the use of both hands.
SUMMARY
Mr. Chairman and Members of the Committee, The American Legion
appreciates the strong relationship we have developed with this
Committee. With increasing military commitments worldwide, it is
important that we work together to ensure that the services and
programs offered through VA are available to the new generation of
American service members who will soon return home. You have the power
to ensure that their sacrifices are indeed honored with the thanks of a
grateful nation.
The American Legion is fully committed to working with each of you
to ensure that America's veterans receive the entitlements they have
earned. Whether it is improved accessibility to healthcare, timely
adjudication of disability claims, improved educational benefits or
employment services, each and every aspect of these programs touches
veterans from every generation. Together we can ensure that these
programs remain productive, viable options for the men and women who
have chosen to answer the nation's call to arms.
Thank you for allowing me the opportunity to appear before you
today.
Statement of Brian Lawrence
Assistant National Legislative Director, Disabled American Veterans
Mr. Chairman and Members of the Committee:
I am pleased to appear before you on behalf of the Disabled
American Veterans (DAV), which is one of the four member organizations
of The Independent Budget (IB). We appreciate the opportunity to
present the recommendations of the fiscal year (FY) 2008 IB and compare
them to the President's proposed FY 2008 budget for veterans' programs.
As you know, the IB is a budget and policy document that sets forth the
collective views of the DAV, AMVETS, the Paralyzed Veterans of America
(PVA), and the Veterans of Foreign Wars of the United States (VFW).
Each organization has a principal responsibility for a major component
of the budget. My testimony focuses on Department of Veterans (VA)
benefit programs, which are administered by the Veterans Benefits
Administration (VBA). VBA is further divided into the following
services: Compensation and Pension (C&P), Vocational Rehabilitation and
Employment (VR&E), Education, Loan Guaranty, and Insurance. VBA and its
constituent departments are funded under the General Operating Expenses
(GOE).
The level of funding sought in the President's FY 2008 budget for
VBA is approximately $1.2 billion, an increase of $30 million over last
year's level. This amount falls far short of the IB assessment, which
anticipates that VBA will require more than $1.9 billion to meet the
needs of disabled veterans. The difference between the Administration's
and the IB proposals is more than $700 million.
C&P Service
With the Administration's proposed budget, C&P Service would be
authorized total 9,559 FTE, which is a total increase of 114. This
recommendation does not appear to be aligned with the Administration's
stated goal to decrease the number of backlogged compensation claims.
For nearly a decade, C&P has struggled to find a way to address claims
processing problems and establish a viable long-term claims process.
Despite its ongoing efforts, the backlog remains unacceptably high, and
disabled veterans and their families suffer the consequences. While a
number of factors play a role, the backlog has persisted primarily
because of inadequate resources compounded by higher claims volumes.
The disability claims workload from returning war veterans and veterans
of previous periods has steadily increased since 2000. The IB
anticipates that this trend will continue, considering the ongoing
hostilities in Iraq and Afghanistan, as well as an aging veteran
population. However, the VA perspective is that a slight decrease in
the number of claims receipts will occur during 2007 and 2008. This
prediction is somewhat troubling, considering that the VA funding
shortfall that occurred in 2005 was attributed to error in estimating
the number of future claims receipts.
During both FY 2005 and FY 2006, the total number of compensation,
pension, and burial claims increased by an average annual rate of 4.5
percent. During this same period, the number of pending claims
increased by a total of more than 33 percent. With an aging veterans'
population and ongoing hostilities in Iraq and Afghanistan, it is
reasonable to expect a continuation of inclined rates. Assuming the
annual percentage rate of growth remains the same as in preceding
years, VA can expect 874,136 claims for C&P in FY 2007. Further
complicating this issue is legislation requiring VA to invite veterans
in six states to request review of past claims decisions and disability
ratings. It is estimated that this outreach project will produce 56,000
additional claims. Given past claims processing times, much of this
workload will carry over into FY 2008, making the new total more than
930,000 claims in FY 2008. Clearly, VA will require more resources just
to keep the backlog from growing, and it will require a significant
increase in resources to fulfill the President's goal to reduce and
eventually eliminate the claims backlog.
In its budget submission for FY 2007, VA projected production based
an output of 109 claims per direct program FTE. The Independent Budget
Veterans Service Organizations have long argued that VA's production
requirements do not allow for thorough development and careful
consideration of disability claims, resulting in compromised quality,
higher error and appeal rates, and even more overload on the system,
and adding to the claims backlog. The IB asserts a more reasonable
estimate of accurate productivity is 100 claims per FTE. With an
estimated 930,000 claims in FY 2008, that would require 9,300 direct
program FTE. With the FY 2007 level of 1,375 support FTE added, this
would require C&P to be authorized 10,675 total FTE for FY 2008.
The IB estimates for the numbers of FTE do not accommodate the
kinds of demands that may arise as a consequence of Congressional
injection of attorneys into the claims process. The VA claims system
was designed to be open, informal, and helpful to veterans. It is
reasonable to expect that the involvement of fee-charging lawyers and
agents will negatively impact productivity in the claims adjudication
process and further bog down the system and eventually lead to the need
for even more increases in C&P staffing. For example, VA will have the
responsibility of oversight and administration of fee agreements under
which the Secretary is to pay the attorney directly from past-due
benefits awarded on the basis of the claim. We believe this leaves open
the possibility for abuse. Allowing fee-charging lawyers and agents
into the system will profoundly change the administrative claims
process to the detriment of veterans and other claimants. We believe
there is a potential for wide-ranging unintended consequences that will
be beneficial for neither claimants nor the government. Beyond the cost
to veterans, added administrative costs for VA are likely to be
substantial, without commensurate added advantages or benefits for
either.
In addition to recommending additional resources, the IB has
identified two other critical areas that VA must address before it can
reach its goal to reduce the backlog. First, it must continue to
establish and improve training programs to enable newly hired C&P
personnel to absorb the tremendous volume of information contained in
the laws, regulations, and court decisions pertaining to veterans'
benefits claims. This is a monumental task in itself, and it is
understandable that newly hired FTE require a considerable `ramp-up'
period before they are able to make accurate claims decisions. As you
know, the DAV maintains a National Service Officer (NSO) corps of
approximately 260 employees who represent and assist disabled veterans
and their dependents throughout the claims process. Each NSO goes
through a mandatory training period that lasts anywhere from 16 to 26
months before they are allowed to conduct unsupervised work. A similar
extensive training program for VA claims personnel would help to reduce
errors along with the number of appeals that are accumulating into a
mountainous backlog.
Second, C&P personnel must be accountable for the quality of work
they produce. In the past, focus has primarily been on productivity.
But producing a high number of claims decisions is detrimental if a
significant number of them have to be reworked during an appeals
process that adds months or years to the amount of time disabled
veterans must wait for the benefits to which they are entitled. C&P
personnel who consistently make errors and fail to improve despite
remedial training must not be retained in a position where their
numerous poor decisions impact disabled veterans.
VA must establish a long-term strategy focused principally on
attaining quality and not merely achieving production quotas in claims
processing, or emphasizing how well and efficient it deals with the
needs of new veterans of current wars. It must obtain supplementary
resources for VBA, and it must invest these in that long-term strategy
rather than reactively targeting them to short-term, temporary, and
superficial gains. Only then can VBA proceed in a way that veterans'
needs are addressed timely with the effects of disability alleviated by
prompt delivery of appropriate benefits.
VR&E
For VR&E Service, the President's budget seeks funding for 1,260
FTE. The IB recommends 1,375 FTE for this business line. VR&E's
workload is expected to continue to increase primarily as a consequence
of the war in Iraq and ongoing hostilities in Afghanistan. Also, given
its increased reliance on contract services, VR&E needs additional FTE
dedicated to management and oversight of contract counselors and
rehabilitation and employment service providers. As a part of its
strategy to enhance accountability and efficiency, the VA Vocational
Rehabilitation and Employment Task Force recommended in its March 2004
report creation and training of new staff positions for this purpose.
Other new initiatives recommended by the Task Force also require an
investment of personnel resources. To implement reforms to improve the
effectiveness and efficiency of its programs, the Task Force
recommended that VA should add new FTE positions to the VR&E workforce.
The FY 2007 total of 1,125 FTE for VR&E should be increased by 250, to
1,375 total FTE.
Education Service
For Education Service, the President's budget seeks funding for 894
FTE. While we appreciate the additional support, we believe the
President's recommended staffing level for Education Service falls
short of what is needed. As it has with its other benefit programs, VA
has been striving to provide more timely and efficient service to its
claimants for education benefits. Though the workload (number of
applications and recurring certifications, etc.) increased by 11
percent during recent years, direct program FTE were reduced from 708
at the end of FY 2003 to 675 at the end of FY 2005. Based on experience
during FY 2004 and FY 2005, it is very conservatively estimated that
the workload will increase by 5.5 percent in FY 2008. VA must increase
staffing to meet the existing and added workload, or service to
veterans seeking educational benefits will decline. Based on the number
of direct program FTE at the end of FY 2003 in relation to the workload
at that time, VBA must increase direct program staffing in its
Education Service in FY 2008 to 873 FTE, 149 more direct program FTE
than authorized for FY 2007. With the addition of the 160 support FTE
as currently authorized, Education Service should be provided 1,033
total FTE for FY 2008.
Other Suggested Benefit Improvements
The benefit programs are effective for their intended purposes only
to the extent VBA can deliver benefits to entitled veterans and
dependents in a timely fashion. However, in addition to ensuring that
VBA has the resources necessary to accomplish its mission in that
manner, Congress must also make adjustments to the programs from time
to time to address increases in the cost of living and needed
improvements. The IB makes a number of recommendations to adjust rates
and improve the benefit programs administered by VBA. Some of those
recommendations are:
Establish cost-of-living-adjustments (COLAs) for
compensation, dependency and indemnity compensation (DIC).
Reject extension of provisions for rounding down
compensation COLAs and allow current temporary provisions to expire.
Increase specially adapted housing grants and provide for
automatic annual COLAs.
Increase automobile and adaptive equipment grants and
provide for automatic annual COLAs.
Establish a grant to cover the costs of home adaptations
for veterans who replace their specially adapted homes with new
housing.
Increase rates of payment to veterans who are housebound
or in need of regular aid-and-attendance due to service-connected
disabilities.
Establish presumption of service connection for hearing
loss and tinnitus for veterans whose military duties involved high
level noise exposure or combat.
Protect veterans' benefits against awards to third
parties in divorce actions.
Eliminate remaining offset between career military
retirement pay and VA compensation.
Eliminate offset between DIC and the Survivor Benefit
Plan.
Increase DIC for survivors of military personnel who died
on active duty.
Lower age requirement for reinstatement of DIC to re-
married survivors of service-connected veterans, from 57 to 55 years of
age.
Repeal funding fees for VA home loan guaranty.
Update premium schedule for SDVI to reflect current
mortality tables.
Increase maximum protection of SDVI policies to at least
$50,000.
Increase maximum protection of Veterans' Mortgage Life
Insurance from $90,000 to $150,000.
Reject recommendations to compensate service-connected
disabilities through payment of lump-sum settlements to veterans.
We invite the Committee's attention to the section of the IB
addressing the Benefit Programs for details on these and other IB
recommendations for improvement.
Another important component of our system of veterans' benefits is
the right to appeal VA's benefits decisions to an independent court.
The IB includes recommendations to improve the processes of judicial
review in veterans' benefits matters. Again, we invite the Committee's
attention to the IB for the details of these recommendations. In
addition, the IB recommends that Congress enact legislation to
authorize and fund construction of a courthouse and justice center for
the United States Court of Appeals for Veterans Claims.
Closing
In preparing the IB, the four partners draw upon their extensive
experience with the workings of veterans' programs, their firsthand
knowledge of the needs of America's veterans, and the information
gained from their continual monitoring of workloads and demands upon,
as well as the performance of, the veterans' benefits system.
Historically, this Committee has acted favorably on many of our
recommendations to improve services to veterans and their families, and
we hope you will give our recommendations full and serious
consideration again this year.
Statement of Carl Blake
National Legislative Director, Paralyzed Veterans of America
Mr. Chairman and Members of the Committee, as one of the four co-
authors of The Independent Budget, Paralyzed Veterans of America (PVA)
is pleased to present the views of The Independent Budget regarding the
funding requirements for the Department of Veterans Affairs (VA)
healthcare system for FY 2008.
PVA, along with AMVETS, Disabled American Veterans, and the
Veterans of Foreign Wars, is proud to come before you this year marking
the beginning of the third decade of The Independent Budget, a
comprehensive budget and policy document that represents the true
funding needs of the Department of Veterans Affairs. The Independent
Budget uses commonly accepted estimates of inflation, healthcare costs
and healthcare demand to reach its recommended levels. This year, the
document is endorsed by 53 veterans' service organizations, and medical
and healthcare advocacy groups.
Last year proved to be a unique year for reasons very different
from 2005. The VA faced a tremendous budgetary shortfall during FY 2005
that was subsequently addressed through supplemental appropriations and
additional funds added to the FY 2006 appropriation. For FY 2007, the
Administration submitted a budget request that nearly matched the
recommendations of The Independent Budget. These actions simply
validated the recommendations of The Independent Budget once again.
Unfortunately, even as we testify today, Congress has yet to
complete the appropriations bill more than one-third of the way through
the current fiscal year. Despite the positive outlook for funding as
outlined in H.J. Res. 20, the FY 2007 Continuing Resolution, the VA has
been placed in a critical situation where it is forced to ration care
and place freezes on hiring of much needed medical staff. Waiting times
have also continued to increase. Furthermore, the VA has had to
cannibalize other accounts in order to continue to provide medical
services, jeopardizing not only the VA healthcare system but the actual
healthcare of veterans. It is unconscionable that Congress has allowed
partisan politics and political wrangling to trump the needs of the men
and women who have served and continue to serve in harm's way.
For FY 2008, the Administration has requested $34.2 billion for
veterans' healthcare, a $1.9 billion increase over the levels
established in H.J. Res. 20, the continuing resolution for FY 2007.
Although we recognize this as another step forward, it still falls well
short of the recommendations of The Independent Budget. For FY 2008,
The Independent Budget recommends approximately $36.3 billion, an
increase of $4.0 billion over the FY 2007 appropriation level yet to be
enacted and approximately $2.1 billion over the Administration's
request.
The medical care appropriation includes three separate accounts--
Medical Services, Medical Administration, and Medical Facilities--that
comprise the total VA healthcare funding level. For FY 2008, The
Independent Budget recommends approximately $29.0 billion for Medical
Services. Our Medical Services recommendation includes the following
recommendations:
(Dollars in
Thousands)
Current Services Estimate $26,302,464
Increase in Patient Workload $ 1,446,636
Increase in Full-time Employees $ 105,120
Policy Initiatives $ 1,125,000
------------------
Total FY 2008 Medical Services $28,979,220
In order to develop our current services estimate, we used the
Obligations by Object in the President's Budget to set the framework
for our recommendation. We believe this method allows us to apply more
accurate inflation rates to specific accounts within the overall
account. Our inflation rates are based on 5-year averages of different
inflation categories from the Consumer Price Index-All Urban Consumers
(CPI-U) published by the Bureau of Labor Statistics every month.
Our increase in patient workload is based on a 5.5 percent increase
in workload. This projected increase reflects the historical trend in
the workload increase over the last 5 years. The policy initiatives
include $500 million for improvement of mental health services, $325
million for funding the fourth mission (an amount that nearly matches
current VA expenditures for emergency preparedness and homeland
security as outlined in the 2007 Mid-Session Review), and $300 million
to support centralized prosthetics funding.
For Medical Administration, The Independent Budget recommends
approximately $3.4 billion. Finally, for Medical Facilities, The
Independent Budget recommends approximately $4.0 billion. This
recommendation includes an additional $250 million above the FY 2008
baseline in order to begin to address the non-recurring maintenance
needs of the VA.
Although The Independent Budget healthcare recommendation does not
include additional money to provide for the healthcare needs of
category 8 veterans now being denied enrollment into the system, we
believe that adequate resources should be provided to overturn this
policy decision. VA estimates that more than 1.5 million category 8
veterans will have been denied enrollment in the VA healthcare system
by FY 2008. Assuming a utilization rate of 20 percent, in order to
reopen the system to these deserving veterans, The Independent Budget
estimates that VA will require approximately $366 million. The
Independent Budget veterans service organizations (IBVSO) believe the
system should be reopened to these veterans and that this money should
be appropriated in addition to our Medical Care recommendation.
Although not proposed to have a direct impact on veterans'
healthcare, we are deeply disappointed that the Administration chose to
once again recommend an increase in prescription drug co-payments from
$8 to $15 and an indexed enrollment fee based on veterans' incomes.
These proposals will simply add additional financial strain to many
veterans, including PVA members and other veterans with catastrophic
disabilities. Although the VA does not overtly explain the impact of
these proposals, similar proposals in the past have estimated that
nearly 200,000 veterans will leave the system and more than 1,000,000
veterans will choose not to enroll. It is astounding that this
Administration would continue to recommend policies that would push
veterans away from the best healthcare system in the world. Congress
has soundly rejected these proposals in the past and we call on you to
do so once again.
For Medical and Prosthetic Research, The Independent Budget is
recommending $480 million. This represents a $66 million increase over
the FY 2007 appropriated level established in the continuing resolution
and $69 million over the Administration's request for FY 2008. We are
very concerned that the Medical and Prosthetic Research account
continues to face a virtual flatline in its funding level. Research is
a vital part of veterans' healthcare, and an essential mission for our
national healthcare system. VA research has been grossly underfunded in
comparison to the growth rate of other Federal research initiatives. We
call on Congress to finally correct this oversight.
The Independent Budget recommendation also recognizes a significant
difference in our recommended amount of $1.34 billion for Information
Technology versus the Administration's recommended level of $1.90
billion. However, when compared to the account structure that The
Independent Budget utilizes, the Administration's recommendation
amounts to approximately $1.30 billion. The Administration's request
also includes approximately $555 million in transfers from all three
accounts in Medical Care as well as the Veterans Benefits
Administration and the National Cemetery Administration. Unfortunately,
these transfers are only partially defined in the Administration's
budget justification documents. Given the fact that the veterans'
service organizations have been largely excluded from the discussion of
how the Information Technology reorganization would take place and the
fact that little or no explanation was provided in last year's budget
submission, our Information Technology recommendation reflects what
information was available to us and the funding levels that Congress
deemed appropriate from last year. We certainly could not have foreseen
the VA's plan to shift additional personnel and related operations
expenses.
Finally, we remain concerned that the Major and Minor Construction
accounts continue to be underfunded. Although the Administration's
request includes a fair increase in Major Construction from the
expected appropriations level of $399 million to $727 million, it still
does not go far enough to address the significant infrastructure needs
of the VA. Furthermore, the actual portion of the Major Construction
account that will be devoted to Veterans Health Administration
infrastructure is only approximately $560 million. We also believe that
the Minor Construction request of approximately $233 million does
little to help the VA offset the rising tide of necessary
infrastructure upgrades. Without the necessary funding to address minor
construction needs, these projects will become major construction
problems in short order. For FY 2008, The Independent Budget recommends
approximately $1.6 billion for Major Construction and $541 million for
Minor Construction.
In closing, to address the problem of adequate resources provided
in a timely manner, The Independent Budget has proposed that funding
for veterans' healthcare be removed from the discretionary budget
process and made mandatory. The budget and appropriations process over
the last number of years demonstrates conclusively how the VA labors
under the uncertainty of not only how much money it is going to get,
but, equally important, when it is going to get it. No Secretary of
Veterans Affairs, no VA hospital director, and no doctor running an
outpatient clinic knows how to plan and even provide care on a daily
basis without the knowledge that the dollars needed to operate those
programs are going to be available when they need them.
Making veterans healthcare funding mandatory would not create a new
entitlement, rather, it would change the manner of healthcare funding,
removing the VA from the vagaries of the appropriations process. Until
this proposal becomes law, however, Congress and the Administration
must ensure that VA is fully funded through the current process. We
look forward to working with this Committee in order to begin the
process of moving a bill through the House, and the Senate, as soon as
possible.
In the end, it is easy to forget, that the people who are
ultimately affected by wrangling over the budget are the men and women
who have served and sacrificed so much for this nation. We hope that
you will consider these men and women when you develop your budget
views and estimates, and we ask that you join us in adopting the
recommendations of The Independent Budget.
This concludes my testimony. I will be happy to answer any
questions you may have.
Statement of Dennis M. Cullinan, National Legislative Director
Veterans of Foreign Wars of the United States
On behalf of the 2.4 million men and women of the Veterans of
Foreign Wars of the U.S. (VFW), this nation's largest combat veterans'
organization, I would like to thank you for the opportunity to testify
today on the Fiscal Year 2008 budget for the Department of Veterans
Affairs (VA).
The VA construction budget has, for the past few years, been
dominated by the Capital Asset Realignment for Enhanced Services
(CARES) process.
CARES is a system-wide, data-drive assessment of VA's capital
infrastructure. It aimed to identify the needs of veterans to aid in
the planning of future and realignment of current VA facilities to most
efficiently meet those needs. It was not just a one-time evaluation but
also the creation of a process and framework to continue to determine
veterans' future requirements.
Throughout the entire CARES process, The Independent Budget
veterans' service organizations (IBVSOs) were highly supportive, as
long as VA emphasized the ``ES''--enhanced services--portion of the
acronym.
2001--CARES pilot study in Network 12 (Chicago, Illinois;
Wisconsin; and Upper Michigan) completed.
2002--Phase II of CARES began in all other networks of VA
individually, to be compiled in the Draft National CARES Plan.
2003--August: Draft National CARES Plan submitted to
CARES Commission to review and gather public input.
2004--February: VA Secretary receives CARES Commission
recommendations.
2004--May: VA Secretary announces his decision on CARES,
but calls for additional ``CARES Business Plan Studies'' at 18 sites
throughout the country.
These CARES Business Plan Studies are available on VA's CARES
website, www.va.gov/cares. As of December 2006, only ten of these
studies have been completed, despite VA's stated June 2006 deadline.
The IBVSOs look forward to the final results so that implementation of
these important plans can go forward.
The IBVSOs believe that all decisions on CARES should be consistent
with the CARES Decision document and its established priorities, or
with the findings of the CARES review commission that largely confirmed
those priorities. Proposed changes or deviation from the plan should
undergo the same rigorous data validation as the original projects.
CARES was intended to be an apolitical, data-driven process that
looked out for the best interest of veterans throughout the entire
system. We are certainly pleased that the Secretary and Members of
Congress are interested in the future of VA capital facilities, but we
urge all involved to maintain consistency with the apolitical process
that, as agreed to by all parties--stakeholders included--would provide
the best way to determine future VA infrastructure needs to
sufficiently care for all veterans. This was the hallmark of the CARES
plan.
Throughout the CARES process, the IBVSOs were greatly concerned
with the underfunding of the construction budget. Congress and the
Administration did not devote many resources to VA's infrastructure,
preferring to wait for the final results of CARES. In past Independent
Budgets we warned against this, pointing out that there were a number
of legitimate construction needs identified by the local manager of VA
facilities. A number of facilities were authorized, including House
passage of the ``Veterans Hospital Emergency Repair Act,'' but funding
was never appropriated, with the ongoing CARES review being used as the
primary excuse.
At the time, the IBVSOs argued that a de facto moratorium on
construction was unnecessary because of our conviction that a number of
these projects needed to go forward and that they would be fully
justified in any future plans produced through CARES. Despite this
reasonable argument, funding never came, and VA lost progress on
hundreds of millions of dollars that otherwise would have been invested
to meet the system's critical infrastructure needs.
The IBVSOs continue to believe that this deferral of all major VA
construction projects was poor policy. In the five-plus years the
process took, construction and maintenance improvements lagged far
beyond what the system truly needed. With CARES nearly complete,
funding has not yet been proposed by the Administration nor approved by
Congress to address the very large project backlog that has grown.
We note this year that both Veterans' Committees have considered
legislation that would authorize resumption of VA major medical
facility construction projects, but with the breakdown of the
appropriations process, these projects died with the end of the 109th
Congress.
In July 2004, VA Secretary Anthony Principi testified before the
Health Subcommittee of the House Committee on Veterans' Affairs. In his
testimony, he noted that CARES ``reflects a need for additional
investments of approximately $1 billion per year for the next 5 years
to modernize VA's medical infrastructure and enhance veterans' access
to care.'' Since that statement, however, the amount actually
appropriated by Congress for VA major medical facility construction has
fallen far short of that goal; in fiscal year 2007, the Administration
recommended a paltry $399 million for major construction.
After that 5-year de facto moratorium and without additional
funding coming forth, VA facilities have an even greater need than they
did at the start of the CARES process. Accordingly, we urge the
Administration and the Congress to live up to the Secretary's words by
making a steady investment in VA's capital infrastructure to bring the
system up to date with the needs of 21st century veterans.
For major construction, the IBVSOs recommend $1.602 billion in
funding. This includes funding for the projects on VA's priority list,
advanced planning, and for construction costs for a number of new
national cemeteries in accordance with the NCA strategic plan.
------------------------------------------------------------------------
Funding
(Dollars in
Thousands)
------------------------------------------------------------------------
CARES 1,400,000
Master Planning 20,000
Advanced Planning 45,000
Asbestos 5,000
Claims Analyses 3,000
Judgment Fund 2,000
Hazardous Waste 2,000
National Cemetery Administration 95,000
Staff Offices 5,000
Historic Preservation 25,000
----------------
TOTAL $1,602,000
------------------------------------------------------------------------
For minor construction, the IBVSOs recommend a total of $541
million, the bulk of which will go toward the more than 100 minor
construction projects identified by VA in its 5-year capital plan in
fiscal year 2008.
------------------------------------------------------------------------
Funding
(Dollars in
Thousands)
------------------------------------------------------------------------
CARES/Non-CARES 450,000
National Cemetery Administration 40,000
Veterans Benefits Administration 35,000
Staff 6,000
Advanced Planning 10,000
----------------
TOTAL $ 541,000
------------------------------------------------------------------------
Department of Veterans Affairs (VA) does not have adequate provisions
to protect against deterioration and declining capital asset value.
The last decade of underfunded construction budgets has led to a
reduction in the recapitalization of VA's facilities. Recapitalization
is necessary to protect the value of VA's capital assets by renewing
the physical infrastructure to ensure safe and fully functional
facilities. Failure to adequately invest in the system will result in
its deterioration, creating even greater costs down the road.
As in past years, we continue to cite the Final Report of the
President's Task Force to Improve Health Care Delivery for our Nation's
veterans (PTF). The PTF noted that in the period from 1996-2001, VA's
recapitalization rate was 0.64 percent, which corresponds to an assumed
building life of 155 years. When maintenance and restoration are
factored into VA's major construction budget, VA annually invests less
than 2 percent of plant replacement value in the system. The PTF
observed that a minimum of 5 to 8 percent per year is necessary to
maintain a healthy infrastructure and that failure to adequately fund
could lead to unsafe, dysfunctional settings.
Congress and the Administration must ensure that there are adequate
funds for major and minor construction so that VA can properly reinvest
in its capital assets to protect their value and ensure that healthcare
can be provided in safe and functional facilities long into the future.
The deterioration of many Department of Veterans Affairs (VA)
properties requires increased spending on nonrecurring maintenance.
A Price Waterhouse study looked at VA facilities management and
recommended that VA spend at least 2 to 4 percent of its plant
replacement value on upkeep. Nonrecurring maintenance (NRM) consists of
small projects that are essential to the proper maintenance and to the
preservation of the lifespan of VA's facilities. Examples of these
projects include maintenance to roofs, replacement of windows, and
upgrades to the mechanical or electrical systems.
Each year, VA grades each medical center, creating a facility
condition assessment (FCA). These FCAs give a letter grade to various
systems at each facility and assign a cost estimate associated with
repairs or replacement. The latest FCAs have identified $4.9 billion
worth of necessary repairs in projects with a letter grade of ``D'' or
``F.'' F's must be taken care of immediately, and D's are in need of
serious repairs or represent pieces of equipment reaching the end of
their usable life. Most of these projects would be reparable using NRM
funds.
Another concern with NRM is with how it is allocated. NRM is under
the Medical Care account and is distributed to various VISNs through
the Veterans Equitable Resource Allocation (VERA) process. While this
does move the money toward the areas with the highest demand for
healthcare, it tends to move money away from facilities with the oldest
capital structures, which generally need the most maintenance. It also
could increase the tendency of some facilities to use maintenance money
to address shortfalls in medical care funding.
VA should spend $1.6 billion on NRM to make up for the lack of
proper funding in previous years and to keep VA on the right track with
maintenance for the future.
VA must also resist the temptation to dip into NRM funding for
health-care needs, as this could lead to far greater expenses down the
road.
Veterans and staff continue to occupy buildings known to be at
extremely high risk because of seismic deficiencies.
The Independent Budget veteran's service organizations (IBVSOs)
continue to be concerned with the seismic safety of the Department of
Veterans Affairs (VA) facilities. The July 2006 Seismic Design
Requirements report noted the existence of 73 critical VA facilities
that, based on FEMA definitions, are at a ``moderately high'' or
greater risk of seismic incident. Twenty-four of these have been deemed
``very high'' risk, the highest standard.
To address the safety of veterans and employees, VA includes
seismic corrections in its annual list of projects to Congress. In
conjunction with the Capital Asset Realignment for Enhanced Services
process, progress is being made on eight of these facilities. More is
needed, and, accordingly, funding will need to increase.
For efficiency, most seismic correction projects should also
include patient care enhancements as part of their total scope. Seismic
correction typically includes lengthy and widespread disruption to
hospital operations; it would be prudent to make medical care
improvements at the same time to minimize disruptions in the future.
While this approach is the most practical for the delivery of
healthcare and services as well as for cost-effectiveness, it also
results in higher up front project costs, which would require an
increase in the construction budget.
Congress must appropriate adequate construction funding to correct
these critical seismic deficiencies.
VA should schedule facility improvement projects concurrently with
seismic corrections.
Each Department of Veterans Affairs (VA) medical center needs to
develop a detailed master plan.
This year's construction budget should include at least $20 million
to fund architectural master plans. Without these plans, the Capital
Asset Realignment for Enhanced Services (CARES) medical benefits will
be jeopardized by hasty and short-sighted construction planning.
The Independent Budget veteran's service organizations believe that
each VA medical center should develop a facility master plan to serve
as a clear roadmap to where the facility is going in the future. It
should be an inclusive document that includes multiple projects for the
future in a cohesive strategy.
In many cases, VA plans construction in a reactive manner. Projects
are funded first and then fitted onto the site. Each project is planned
individually and not necessarily with respect to other ongoing projects
or ones planned for the future. It is essential that each medical
center has a plan that looks at the big picture to efficiently utilize
space and funding. If all projects are not simultaneously planned, for
example, the first project may be built in the best site for the second
project. Master plans would prevent short-sighted construction that
restricts, rather than expands, future options.
Every new project in the master plan is a step in achieving the
long-range CARES objectives. These plans must be developed so that all
future projects can be prioritized, coordinated and phased. They are
essential to efficiently use resources, but also to minimize disruption
to VA patients and employees. Medical priorities, for example, must be
adjusted for construction sequencing. If infrastructure changes must
precede new construction, master plans will identify this so that
schedules and budgets can be adjusted. Careful phasing is essential to
avoid disrupting the delivery of medical care, and the correct planning
of such will ensure that cost estimates of this phased-construction
approach will be more accurate.
There may be cases, too, where master planning will challenge the
original CARES decisions, whether due to changing demand, unidentified
need, or other cause. If CARES, for example, calls for the use of
renovated space for a relocated program and a more comprehensive
examination as part of a master plan later indicates that the site is
impractical, different options should be considered. Master plans will
help to correct and update invalid planning assumptions.
VA must be mindful that some CARES plans involve projects
constructed at more than one medical center. Master plans, as a result,
most coordinate the priorities of both medical centers. Construction of
a new SCI facility, for example, might be a high priority for the
``gaining'' facility, but a lower priority for the ``donor'' facility.
It may be best to fund and plan the two actions together, even though
they are split between two different facilities.
Another essential role of master planning is its use to account for
three critical programs that VA left out of the initial CARES process:
long-term care, severe mental illness, and domiciliary care. Because
these were omitted, there is a strong need for a comprehensive plan,
and a full facility master plan will help serve as a blueprint for each
facility's needs in these essential areas.
VA must ensure that each medical center develops and continues to
work on long-range master plans to validate strategic planning
decisions, prepare accurate budgets, and implement efficient
construction that minimizes wasted expenses and disruptions to patient
care.
Congress must appropriate $20 million to allow each VA medical
facility to develop architectural master plans to serve as roadmaps for
the future.
Each facility master plan should address long-term care, including
plans for those with severe mental illness, and domiciliary care
programs, which were omitted from the CARES process.
VA must develop a format for these master plans so that there is
standardization throughout the system, even though planning work will
be performed by local contractors in each Veterans Integrated Service
Network.
The Department of Veterans Affairs (VA) must develop a strategic plan
for the infrastructure needs of these important programs.
The initial Capital Asset Realignment for Enhanced Services (CARES)
plan did not take long-term care or the mental health considerations of
veterans into account when making recommendations. We were pleased that
the CARES Review Commission recognized the need for proper accounting
of these critical components of care in VA's future infrastructure
planning. However, we continue to await VA's development of a long-term
care strategic plan to meet the needs of aging veterans. The Commission
recommended that VA ``develop a strategic plan for long-term care that
includes policies and strategies for the delivery of care in
domiciliary, residential treatment facilities and nursing homes, and
for older seriously mentally ill veterans.''
Moreover, the Commission recommended that the plan include
strategies for maximizing the use of state veterans' homes, locating
domiciliary units as close to patient populations as feasible and
identifying freestanding nursing homes as an acceptable care model. In
absence of that plan, VA will be unable to determine its future capital
investment strategy for long-term care.
VA must take a proactive approach to ensure that the infrastructure
and support networks needed by veterans will be there for them in the
future.
We also concur with the CARES Commission's recommendations that VA
take action to ensure consistent availability of mental health services
across the system to include mental healthcare at community-based
clinics along with the appropriate infrastructure to match demand for
these specialized services. This is important in light of the growing
demand for these types of services, especially among those returning
from overseas in the wars in Iraq and Afghanistan.
VA must develop a long-term care strategic plan to account for the
needs of aging veterans now and into the future. This should include
care options for older veterans with serious mental illnesses.
VA must also develop plans to provide for the infrastructure needs
associated with mental healthcare services, especially with the
unprecedented current need for these services, and the likely
tremendous long-term need of our returning service members.
The Department of Veterans Affairs (VA) must not use empty space
inappropriately.
Studies have suggested that the VA medical system has extensive
amounts of empty space that can be reused for medical services. It has
also been suggested that unused space at one medical center may help
address a deficiency that exists at another location. Although the
space inventories are accurate, the assumption regarding the
feasibility of using this space is not.
Medical facility planning is complex. It requires intricate design
relationships for function, but also because of the demanding
requirements of certain types of medical equipment. Because of this,
medical facility space is rarely interchangeable, and if it is, it is
usually at a prohibitive cost. Unoccupied rooms on the eighth floor,
for example, cannot be used to offset a deficiency of space in the
second floor surgery ward. Medical space has a very critical need for
inter- and intradepartmental adjacencies that must be maintained for
efficient and hygienic patient care.
When a department expands or moves, these demands create a domino
effect of everything around it, and these secondary impacts greatly
increase construction expense and they can disrupt patient care.
Some features of a medical facility are permanent. Floor-to-floor
heights, column spacing, light, and structural floor loading cannot be
altered. Different aspects of medical care have different requirements
based upon these permanent characteristics. Laboratory or clinical
spacing cannot be interchanged with ward space because of the needs of
different column spacing and perimeter configuration. Patient wards
require access to natural light and column grids that are compatible
with room-style layouts. Labs should have long structural bays and
function best without windows. When renovating empty space, if the area
is not suited to its planned purpose, it will create unnecessary
expenses and be much less efficient.
Renovating old space rather than constructing new space creates
only a marginal cost savings. Renovations of a specific space typically
cost 85 percent of what a similar, new space would. When you factor in
the aforementioned domino or secondary costs, the renovation can end up
costing more and produce a less satisfactory result. Renovations are
sometimes appropriate to achieve those critical functional adjacencies,
but it is rarely economical.
Many older VA medical centers that were rapidly built in the 1940s
and 1950s to treat a growing veteran population are simply unable to be
renovated for more modern needs. Most of these Bradley-style buildings
were designed before the widespread use of air conditioning and the
floor-to-floor heights are very low. Accordingly, it's impossible to
retrofit them for modern mechanical systems. They also have long,
narrow wings radiating from a small central core, which is an
inefficient way of laying out rooms for modern use. This central core,
too, has only a few small elevator shafts, complicating the vertical
distribution of modern services.
Another important problem with this unused space is its location.
Much of it is not located in a prime location; otherwise it would have
been previously renovated or demolished for new construction. This
space is typically located in outlying buildings or on upper floor
levels and is unsuitable for modern use.
VA should develop a plan for addressing its excess space in non-
historic properties that are not suitable for medical or support
functions due to their permanent characteristics or locations.
The Department of Veterans Affairs (VA) must continue to develop and
revise facility design guides for spinal cord injury/spinal cord
disorders.
With the largest healthcare system in the U.S., VA has an advantage
in its ability to develop, evaluate, and refine the design and
operation of its many facilities. Every new clinic's design can benefit
from lessons learned from the construction and operation of previous
clinics. VA also has the unique opportunity to learn from medical
staff, engineers, and from its users--veterans and their families--as
to what their needs are, allowing them to generate improvements to
future designs.
As part of this, VA provides design guides for certain types of
facilities that provide care to veterans. These guides are rough tools
used by the designer, clinician, staff, and management during the
design process. These design guides, which are viewable on the
Facilities Management webpage, cover a variety of types of care.
These design guides, due to modernization of equipment and lessons
learned at other facilities, should be revised regularly. Some of the
design guides have not been updated in over a decade, despite the
massive transition of the VA healthcare system from an inpatient-based
system. The Independent Budget veterans' service organizations (IBVSOs)
understand that VA intends to regularly update these guides, and we
would urge that increased funding be allocated to the Advanced Planning
Fund to revise and update these essential guides.
As in past years, the IBVSOs would note the need for guides for
long-term care at spinal cord injury/dysfunction (SCI/D) centers. It is
important that these guides be separate from the guides that call for
acute care as the needs of the two are dramatically different.
These facilities must be less institutional in their character with
a more homelike environment. Rooms and communal space should be
designed to accommodate patients who will be living at these facilities
for a long time. They must include simple ideas that would improve the
daily life of these patients. Corridor length should be limited. They
should include wide areas with windows to create tranquil places or
areas to gather. Centers should have courtyard areas where the climate
is temperate and indoor solariums where it is not. We believe that a
complete guideline for these facilities would also include a discussion
of design philosophies that emphasize the quality of life of these
patients, and not just the specific criteria for each space. Because
the type of care these patients need is unique, it is essential that
this type of design guidance is available to contracted architects.
VA must revise and update their design guides on a regular basis.
VA should develop a long-term care design guide for SCI/D centers
to accommodate the special needs of these unique patients.
The Department of Veterans Affairs' extensive inventory of historic
structures must be protected and preserved.
VA has an extensive inventory of historic structures, which
highlight America's long tradition of providing care to veterans. These
buildings and facilities enhance our understanding of the lives of
those who have worn the uniform, and who helped to develop this great
nation. Of the approximately 2,000 historic structures, many are
neglected and deteriorate year after year because of a lack of funding.
These structures should be stabilized, protected, and preserved because
of their importance.
Most of these facilities are not suitable for modern patient care,
and, as a result, a preservation strategy was not included in the
Capital Asset Realignment for Enhanced Services process. As a first
step in addressing its responsibility to preserve and protect these
buildings, VA must develop a comprehensive program for these historic
properties.
VA must make an inventory of these properties, classifying their
physical condition and their potential for adaptive reuse. Medical
centers, local governments, nonprofit organizations or private sector
businesses could potentially find a use for these important structures
that would preserve them into the future.
The Independent Budget veterans' service organizations recommend
that VA establish partnerships with other Federal departments, such as
the Department of the Interior, and with private organizations, such as
the National Trust for Historic Preservation. Their expertise would be
helpful in creating this new program.
As part of its adaptive reuse program, VA must ensure that
facilities that are leased or sold are maintained properly for
preservation's sake. VA's legal responsibilities could, for example, be
addressed through easements on property elements, such as building
exteriors or grounds. We would point to the partnership between the
Department of the Army and the National Trust for Historic Preservation
as an example of how VA could successfully manage its historic
properties.
P.L. 108-422, the Veterans Health Programs Improvement Act,
authorized historic preservation as one of the uses of a new capital
assets fund that receives funding from the sale or lease of VA
property. We applaud its passage, and encourage its use.
VA must begin a comprehensive program to preserve and protect its
inventory of historic properties.
We thank you for allowing us to testify today, and we would be
happy to answer any questions that you or the Committee may have.
Statement of John Rowan
National President, Vietnam Veterans of America
Chairman Filner, Ranking Member Buyer and distinguished Members of
the Committee, on behalf of all of our officers, Board of Directors,
and members, I thank you for giving Vietnam Veterans of America (VVA)
the opportunity to testify regarding the President's fiscal year 2008
budget request for the Department of Veterans Affairs today. I am
pleased to welcome so many new and returning Members onto the Committee
this year. VVA looks forward to working with all of you to address the
needs of the unique system created to serve our nation's veterans.
I particularly wish to thank you, Mr. Chairman, for your
impassioned and erudite speech to the Majority caucus that resulted in
$3.6 billion being added to the continuing resolution for healthcare at
the Veterans Health Administration. Your willingness to take a strong
stand when it was not yet the conventional wisdom once again helped
America, particularly America's veterans and our families. VVA thanks
you for your strong leadership, and salutes your lifelong willingness
to ``speak truth to power.''
Mr. Chairman, several years ago, Vietnam Veterans of America
developed a White Paper in support of the need for assured funding for
the veterans healthcare system, which I know you have read and shared
with others. I also know you have been a long-time supporter of
legislation to achieve assured funding. You have always understood the
need for such a mechanism to correct the problems in the current system
of funding. As we have this discussion in regard to the FY '08 budget
for VA, the readily apparent need for this legislation has never been
more pressing. We look forward to working with you to ensure its
enactment.
VVA does wish to recognize that this year's request from the
President for the VA Budget, while lacking in many other respects, is
relatively free of budget gimmicks that have so plagued discussions in
the past. VVA believes that this is due to the strong efforts of
Secretary Nicholson in doing battle to strip out the favorite
gimcrackery of that permanent staff over at the Office of Management
and Budget (OMB). VVA commends the Secretary of Veterans' Affairs in
this regard for seeking to have an honestly presented budget proposal.
Veterans Health Administration
VVA is recommending an increase of $6.9 billion to the expected
fiscal year 2007 appropriation for the medical care business line. We
recognize that the budget recommendation VVA is making this year is
extraordinary, but with troops in the field, years of underfunding of
healthcare organizational capacity, renovation of an archaic and
dilapidated infrastructure, and updating capital equipment and several
cohorts of war veterans reaching ages of peak healthcare utilization,
these are extraordinary times. It's past time to meet these needs.
In contrast to what is clearly needed, we believe the
Administration's fiscal year 2008 request for $2 billion more than the
expected 2007 appropriation in the continuing resolution is inadequate.
Unfortunately, we still are unsure of the bottom line for fiscal year
2007. While we certainly appreciate that the Congress is planning to
restore funding for veterans healthcare in the continuing resolution
(and it is essential that it does so to ensure the Department's ability
to meet ongoing obligations), the fact that VA is still uncertain about
the amount of funding it will receive a third of the way through the
fiscal year does, in and of itself, make the case for assured funding.
The $2 billion increase the Administration has requested for
medical care may almost keep pace with inflation, but it will not allow
VA to enhance its healthcare or mental healthcare services for
returning veterans, restore diminished staff in key disciplines like
clinicians needed to care for hepatitis C, restore needed long-term
care programs for aging veterans, or allow working-class veterans to
return to their healthcare system. VVA's recommendation does
accommodate these goals, in addition to restoring eligibility to
veterans exposed to Agent Orange for the care of their related
conditions.
I need not tell you about the many successes of the Department of
Veterans Affairs in recent years. The veterans' service organizations
are often seen as critics of the Department. While we sometimes take
exception to its policy decisions, we are also its most stalwart
champions. Over the last decade the Veterans Health Administration
(VHA) at VA has taken steps to become a higher quality, more accessible
healthcare system. It has demonstrated great efficiency by almost
doubling the number of veterans it treats while holding per capita
costs relatively constant. It has developed hundreds of Community Based
Outreach Clinics (CBOC). VHA has received many prestigious awards for
excellence and innovation. While VVA remains extremely concerned about
recent breaches that compromised veterans' personal data, VVA
appreciates the fact that VA has put together a computerized system of
medical records that sets the standard for modern healthcare delivery.
These achievements are to be celebrated.
Yet these advances have not come without cost. For years, the
veterans' healthcare system has been falling behind in meeting the
healthcare needs of some veterans. At the beginning of 2003, the former
Secretary of Veterans Affairs made the decision to bar so-called
priority 8 veterans from enrolling. In most cases, these veterans are
not the well-to-do--they are working class veterans or veterans living
on fixed incomes whose incomes are as little as $28,000 a year. It's
not uncommon to hear about such veterans choosing between getting their
prescription drug orders filled and paying their utility bills. The
decision to bar these veterans is still standing, and it is still
troubling to thoughtful Americans.
In addition to the current bar on healthcare enrollment, in recent
years VA has sent Congress a budget that requires more cost sharing
from veterans, and eliminates options for their care--particularly long
term care. We appreciate that VA's proposal this year has not presumed
enactment of some of the cost-sharing legislative proposals Congress
has opposed in the past. This may allow Congress more leeway to augment
its request in concrete ways rather than merely filling deficits left
by the Administration presuming that revenues and savings from these
unpopular initiatives will be realized.
Congress is to be commended for turning back many legislative
requests for enrollment fees and outpatient cost increases, which would
have jeopardized hundreds of thousands of veterans' access to
healthcare. Hard-fought Congressional add-ons, such as the $3.6 billion
for fiscal year 2007 currently being debated as part of the continuing
resolution, have kept the system afloat. The budget recommended by VVA
in addition to the enactment of some assured funding mechanism will
enable a robust healthcare system to meet the needs of all eligible
veterans--now and in the future.
Medical Services
For medical services for fiscal year 2008, VVA recommends $34.5
billion including collections. This is approximately $5 billion more
than the Administration's request for fiscal year 2008. VVA is making
its budget recommendations based on re-opening access to the millions
of veterans disenfranchised by the Department's policy decision of
early 2003, that was supposed to be ``temporary.'' The former Ranking
Member of this Committee, Lane Evans, discovered that a quarter million
priority 8 veterans had applied for care in fiscal year 2005. Similar
numbers of veterans have likely applied in each of the years since
their enrollment was barred. Our budget allows 1.5 million new priority
7 and 8 veterans to enroll for care in their healthcare system. While
this may sound like too great a lift for the system, use rates for
priority 7 and 8 veterans are much lower than for other priority
groups. Based on our estimates, it may yield only an 8% increase in
demand at a cost of about $1.5 billion to the system for additional
personnel, supplies and facilities.
The budget ax has fallen hard on long-term care programs in the VA.
About a decade ago, there was a major policy shift throughout the
healthcare industry including with VA, which encouraged programs to
deliver as much care as possible outside of beds. In many cases this
has been a productive policy. Veterans value the convenience of using
nearby community clinics for primary care needs, for example.
However, the change took a great toll on the neuro-psychiatric and
long-term care programs that housed and cared for thousands of
veterans, often keeping them institutionalized for years. Instead of
developing the significant community and outpatient infrastructures
that would have been necessary to adequately replace the care for these
most vulnerable veterans, the resources were largely diverted to other
purposes.
Where have these vets gone? The fiscally challenged Medicaid
program supports many of those who need long-term care, adding an
additional burden to the states. State homes play an important role in
remaining the only VA-sponsored setting that provides ongoing, rather
than rehabilitative or restorative, long-term care. VA's mental health
programs--some of the finest in the nation--as well as significant
advances in pharmaceuticals continue to serve and allow many veterans
to recover. However, what are in fact increasing waiting times for
mental health programs and the lack of treatment options often
contribute to incarceration and homelessness for the most vulnerable of
these veterans. Sadly, we hear increasing numbers of stories of
veterans of Iraq and Afghanistan whose inability to deal with
readjustment post-deployment have lead them to the streets or even
suicide.
Mr. Chairman, Vietnam Veterans of America's founding principle is:
Never again will one generation of veterans abandon another. This is
why we are imploring this Committee to ensure that VA has the
imperative and the resources to bolster the mental health programs that
should be readily available to serve our young veterans from Iraq and
Afghanistan. Experts from within the Department of Defense estimate
that as many as 17% of those who serve in Iraq will have issues
requiring them to seek post-deployment mental health services and
recent studies have shown that four out of five of the veterans who may
need post-deployment care are not properly referred to such care. There
is good reason to believe that even the rates forecast by DoD may be
too low.
VA has not made enough progress in preparing for the needs of
troops returning from Iraq and Afghanistan--particularly in the area of
mental healthcare. Its own internal champions--the Committee on Care of
the Seriously Mentally Ill and the Advisory Committee on Post Traumatic
Stress Disorder, for example, have expressed doubts about VA's mental
healthcare capacity to serve these newest vets. As recently as last
March, VHA's Undersecretary for Health Policy Coordination told one
Commission that mental health services were not available everywhere,
and that waiting times often rendered some services ``virtually
inaccessible.'' The doubts about capacity to serve new veterans have
reverberated in reports done by the Government Accountability Office
(GAO). In addition, one recent working paper by Linda Bilmes of the
John F. Kennedy School of Government at Harvard University estimates
that in a ``moderate'' scenario in 2008 VA will require $1.8 billion to
treat the veterans returning from Iraq and Afghanistan--much of this
funding would be used to augment mental healthcare to properly serve
these veterans. VA has projected that approximately 260,000 Global War
on Terrorism (GWOT) veterans will use the VA healthcare system in FY
2008. VVA and others believe that more than 300,000 ``new'' veterans
will use the VHA system in FY 2008.
A further reason that VA has underestimated the need for medical
services is that they continue to use the same formula that they use
for CARES, which is a civilian-based model. Mr. Chairman, VVA has
testified many times that the VHA must be a veterans' healthcare system
and not a general healthcare system that happens to see veterans. The
model VA uses was designed for middle-class people who can afford HMOs
or other such programs. It projects only one to three ``presentations''
(things wrong with) patients as opposed to the five to seven that is
the average at VHA for veterans. Obviously one using the VA model will
continually underestimate overall resources needed to care for the
veterans who come to the system by using this civilian formula.
Further, VHA has been consistent in underestimating the number of GWOT
returnees who will seek services from the system in each of the last 4
years. VVA has corrected these errors in our projections.
In addition to the funds VVA is recommending elsewhere, we
specifically recommend an increase of an additional billion dollars to
assist VA in meeting the long term care and mental healthcare needs of
all veterans. These funds should be used to develop or augment with
permanent staff at VA Vet Centers (Readjustment Counseling Service or
RCS), as well as PTSD teams and substance use disorder programs at VA
Medical Centers and CBOC, which will be sought after as more troops
(including demobilized National Guard and Reserve members) return from
ongoing deployments. In addition, VA should be augmenting its nursing
home beds and community resources for long term care, particularly at
the State veterans' homes.
To assist in developing these programs and augmenting all areas of
veterans' care, VVA recommends funding to approximate the staff-to-
patient ratio VA had in place before so much of its neuro-psychiatric
and long-term care infrastructure was dismantled. This would allow VA
to better ensure timely access to care and services. Studies have shown
that inadequate staffing--particularly of nurses involved in direct
care--is correlated with poorer healthcare outcomes in all medical
disciplines. To allow the staffing ratios that prevailed in 1998 for
its current user population, VA would have to add more than 20,000
direct care employees--MDs and nurses--at a cost of about $2.2 billion.
The $2.2 billion funding for the staff shortfalls identified by VVA
closely corresponds to the funding from unspecified so-called
``management efficiencies'' VA has had to shoulder throughout this
Administration. It is important to realize that the effect of leaving
these funding deficiencies unfulfilled is cumulative. That is, each
year VA is forced to live with a greater hole in its budget. GAO has
joined VSOs and Congress in questioning the extent to which VA has been
able to identify and realize the so-called ``savings'' created by such
proposed efficiencies. VA officials have advised GAO that the
efficiencies identified in at least two recent budget proposals--FY
2003 and 2004--were developed to allow VA to meet its budget guidance
rather than by detailed plans for achieving such savings (GAO-06-359R).
In other words, the savings were justified only by the need to meet the
Administration's ``bottom line.'' I hope Congress agrees that this is
no way to fund our veterans' healthcare system.
Finally, VVA believes Congress did a grave injustice to Vietnam-era
veterans. For decades, veterans exposed to Agent Orange and other
herbicides containing dioxin had been granted healthcare for conditions
that were presumed to be due to this exposure. This special eligibility
expired at the end of 2005 and, despite our request, Congress did not
reauthorize it. Had Congress simply reauthorized existing authority, VA
would have realized no new costs. Now we have heard that the
Congressional Budget Office estimates that it will cost more than $300
million to restore this eligibility. Why this eligibility was allowed
to expire seems more a matter of dollars than sense to VVA, given the
ever mounting body of research that clearly points to conditions such
as diabetes being linked to dioxin exposure. However, the pressing need
now is to reinstate veterans with these conditions for the higher
priority access to services that they deserve.
Medical Facilities
For medical facilities for fiscal year 2008, VVA recommends $5.1
billion. This is approximately $1.5 billion more than the
Administration's request for fiscal year 2008. Maintenance of the
healthcare system's infrastructure and equipment purchases are often
overlooked as Congress and the Administration attempt to correct more
glaring problems with patient care. In FY 2006, in just one example,
within its medical facilities account VA anticipated spending $145
million on equipment, yet only spent about $81 million. (The rest of
the funds went just to meet operating costs to keep the facilities open
and operating.) However, these projects can only be neglected for so
long before they compromise patient care, and employee safety in
addition to risking the loss of outside accreditation. The remainder of
the funding was apparently shifted to other more immediate priority
areas (i.e., keeping facilities operating in the short run).
VA undertook an intensive process known as CARES (Capital Asset
Realignment to Enhance Services) to ``right size'' its infrastructure,
culminating in a May 2004 policy decision that identified approximately
$6 billion in construction projects. While for the reasons noted above
the VA has consistently underestimated future needs by using a fatally
flawed formula, thus far Congress and the Administration have only
committed $3.7 billion of this all-too-conservative needed funding.
We believe the CARES estimate to be extremely conservative given
that the models projecting healthcare utilization for most services
were based on use patterns in generally healthy managed care
populations rather than veterans and that the patient population base
did not include readmitting Priority 8 veterans, or significant
casualties from the current deployments. Notwithstanding our concerns
about the methods used in CARES, very few of the projects VA agrees are
needed have been funded since this time. Non-recurring maintenance and
capital equipment budgets have also been grievously neglected as
administrators have sought to shore up their operating funds.
In a system in which so much of the infrastructure would be deemed
obsolete by the private sector (in a 1999 report GAO found that more
than 60% of its buildings were more than 25 years old), this has and
may again lead to serious trouble. We are recommending that Congress
provide an additional $1.5 billion to the medical facilities account to
allow them to begin to address the system's current needs. We also
believe that Congress should fully fund the major and minor
construction accounts to allow for the remaining CARES proposals to be
properly addressed by funding these accounts with a minimum of
remaining $2.3 billion.
Medical and Prosthetic Research
For medical and prosthetic research for fiscal year 2008, VVA
recommends $460 million. This is approximately $50 million more than
the Administration's request for fiscal year 2008. VA research has a
long and distinguished portfolio as an integral part of the veterans'
healthcare system. Its funding serves as a means to attract top medical
schools into valued affiliations and allows VA to attract distinguished
academics to its direct care and teaching missions.
VA's research program is distinct from that of the National
Institutes of Health because it was created to respond to the unique
medical needs of veterans. In this regard, it should seek to fund
veterans' pressing needs for breakthroughs in addressing environmental
hazard exposures, post-deployment mental health, traumatic brain
injury, long-term care service delivery, and prosthetics to meet the
multiple needs of the latest generation of combat-wounded veterans.
Further, VVA brings to your attention that VA Medical and
Prosthetic Research is not currently funding a single study on Agent
Orange or other herbicides used in Vietnam, despite the fact that more
than 300,000 veterans are now service-connected disabled as a direct
result of such exposure in that war. This is unacceptable.
Mr. Chairman, finally I urge this Committee to at long last urge
your colleagues on the Appropriations Committee to use the power of the
purse to compel VA to obey the law (Public Law 106-419) and conduct the
long-delayed National Vietnam Veterans Longitudinal Study. VVA asks
that you specifically request report language in the Appropriations
bill for Military Construction, Veterans Affairs, and Related Areas
that compels VA to advise the Appropriators and the Authorizers as to
how VA plans to complete this study properly within 2 years, as a
comprehensive mortality and morbidity study.
Assured Funding for Veterans Health Care
Once this Congress provides a budget that shores up VA medical
services and facilities, it will need to ensure that VA continues to be
funded at a level that allows it to provide high-quality healthcare
services to the veterans that need them. That is where enactment of
assured funding will come in. Once enacted, an assured funding
mechanism will ensure that, at a minimum, annual appropriations cover
the cost of inflation and growth in the number of veterans using VA
healthcare. It will allow VA administrators some predictability in both
how much funding it will receive and when it will be received resulting
in higher quality and ultimately more cost-effective care for our
veterans.
Veterans Benefits Administration
The Veterans Benefits Administration (VBA) is in even more acute
need of additional resources and enhanced accountability measures now
than they were a year ago. VVA recommends an additional 400 over and
above the roughly 470 new staff members that are requested in the
President's proposed budget for all of VBA.
Compensation & Pension
VVA recommends adding one hundred staff members above the level
requested by the President for the Compensation & Pension Service (C&P)
specifically to be trained as adjudicators. Further, VVA strongly
recommends adding an additional $60 million dollars specifically
earmarked for additional training for all of those who touch a
veterans' claim, institution of a competency based examination that is
reviewed by an outside body that shall be used in a verification
process for all of the VA personnel, veteran service organization
personnel, attorneys, county and state employees, and any others who
might presume to at any point touch a veterans' claim.
Vocational Rehabilitation
VVA recommends that you seek to add an additional three hundred
specially trained vocational rehabilitation specialists to work with
returning servicemembers who are disabled to ensure their placement
into jobs or training that will directly lead to meaningful employment
at a living wage. It is clear that the system funded through the
Department of Labor simply is failing these fine young men and women
when they need assistance most in rebuilding their lives.
VVA has always held that the ability to obtain and sustain
meaningful employment at a living wage is the absolute central event of
the readjustment process. Adding additional resources and much, much
greater accountability to the VA Vocational Rehabilitation process is
absolutely essential if we as a nation are to meet our obligation to
these Americans who have served their country so well, and have already
sacrificed so much.
Accountability at VA
So much of what VVA and the Congress find wrong or disturbing at
the VA revolves around the pervasive issue of little or no
accountability, or imprecise fixing of authority commensurate with
accountability mechanisms that are meaningful (and vice versa) in all
parts of the VA.
Within the past year VA has finally made significant progress in
meeting the minimum goal of at least 3% of all contracts and 3% of all
subcontracts being let to service disabled veteran businessowners.
Secretary Nicholson, and Deputy Secretary Mansfield, is to be commended
on setting the pace for the Federal Government. It is instructive in
this discussion, however, that the action directed by the Secretary to
put achievement or substantial real progress toward meeting or
exceeding the 3% minimum into the performance evaluation of each
Director of the twenty-one Veterans Integrated Service Networks (VISNs)
was a key element in VA to be the first large agency to reach the goal
mandated by law. (Eighty-five percent of all VA procurement is through
VHA, primarily through the VISNs) was the key element in this
achievement.
All people (particularly people with a great deal of responsibility
who work long hours) care about what they feel they have to care about.
Putting it in the performance evaluations means that those managers who
ignore a requirement do not get an outstanding or superior rating, and
hence no bonus. VVA, and now the VA in at least this one instance, has
always found that it is amazing how reasonable almost all people can be
when you have their full attention.
There is no excuse for the dissembling and lack of accountability
in so much of what happens at the VA. It can be cleaned up and done
right the first time, if there is the political will to hold people
accountable for doing their job properly.
Lastly, there is no excuse for the continuation of the practice of
VHA to ``lose'' tens of millions (sometimes hundreds of millions) of
taxpayer dollars that are appropriated to VHA for specific purposes,
whether that purpose be to restore organizational capacity to deliver
mental health services, particularly for PTSD and other combat trauma
wounds, or to conduct outreach to GWOT veterans as well as de-mobilized
National Guard and Reserves returnees from war zone deployments. There
is a consistent pattern of VA, particularly VHA, to either really not
know what happened to large sums of money given to them for specific
reasons, or they are not telling the truth to the Congress and the
public. In either case, it is unacceptable, and cannot be tolerated any
longer.
In the proposed budget submittal, VVA struggled with accounting for
the dollars footnoted in the President's submittal as ``Adjusted for
IT.'' We could not find an accurate accounting. When we asked in the 27
hours we had to prepare this submittal, it turns out that no one else
that we have spoken to, including the VA officials, can fully explain
at least $200(+) million of this ``adjustment'' either. And this is
before they get their hands on the dollars. VVA urges this Committee
and your colleagues on Appropriations to make this the year that this
sloppy nonsense and dissembling is stopped once and for all.
Accountability will only come about when the Congress absolutely
demands that these folks be fully accountable for performance, and for
accounting for each and every taxpayer dollar.
Thank you again, Mr. Chairman. We look forward to working with you
and this distinguished Committee to obtain an excellent budget for VA
in this fiscal year, and to ensure the next generation of veterans'
wellbeing by enacting assured funding. I will be happy to answer any
questions you and your colleagues may have.
PRE-HEARING QUESTIONS FOR THE RECORD
Questions from Hon. Bob Filner, Chairman, Committee on Veterans' Affairs
, to Hon. R. James Nicholson, Secretary, U.S. Department of Veterans
Affairs
Committee on Veterans' Affairs
Washington, DC
January 25, 2007
Honorable R. James Nicholson
Secretary
Department of Veterans Affairs
Washington, DC 20420
Dear Mr. Secretary:
In preparation for the Committee's consideration of the President's
Budget for Fiscal Year 2008, we have developed the attached questions.
If we do not get to all of them in the hearing, please respond in
writing by February 16, 2007.
Sincerely,
BOB FILNER
Chairman
Enclosures
Benefits:
Question 1: The President has called for an increase in troops to
Iraq. In light of the fact that the VA already has a 600,000 claims
backlog, please describe in detail how the escalation of the war in
Iraq will impair the VA's ability to provide benefits. Also, does the
Administration's budget request for FY 2008 reflect this increased
demand of VA services that will result from the additional troops
serving in Operation Iraqi Freedom (OIF)? If yes, in what areas and in
what amounts has the budget been altered to reflect the so-called
``surge''?
Response: The 600,000 number referenced in your question represents
total pending claims whether or not they require a disability rating
decision. As of December 2006, there were 395,539 claims pending that
required a rating decision.
The vast majority of the non-rating issues pending are not likely
to be affected by the current escalation in the war since they
primarily deal with maintenance of veterans' accounts that are already
in receipt of benefits. Additionally many of these issues involve non-
service connected disability and death pension. While we receive a high
volume of non-rating issues, generally, they require minimal external
development and are resolved quickly.
There are several factors relating to increasing the size of
Operation Iraqi Freedom (OIF) forces that may affect our ability to
handle claims volume resulting from any increase in the number of
troops deployed as part of OIF. Included in these are the following:
1. The single strongest predictor of claim activity is the size of
the active force. If the forces used for the ``surge'' are drawn from
existing personnel serving on active duty, we believe that the
downstream impact on claims will be less than if they are drawn from
reserve component forces which would increase the size of the active
force.
2. The number of deployments impact claims activity. Multiple
deployments increase the likelihood a service member will suffer from
combat related disabilities such as post traumatic stress disorder.
Additionally, there is an increased incidence of non-combat related
disabilities based on the mere fact that the service member is on
active duty for a longer duration.
3. The duration of the deployment will also affect claim activity
in the future. Lengthened tours expose soldiers to increased potential
for injury.
The Department of Veterans Affairs' (VA) fiscal year (FY) 2008
budget submission does not reflect increased demand for benefits due to
the surge since this strategy had not been decided when the budget was
prepared. If the surge in forces in the combat theaters is drawing from
existing active duty and already planned activation of Guard and
reserve forces, we believe that we have already accounted for the surge
in our 2008 projections. If not, we would anticipate some increase in
claims receipts in FY 2008.
Question 2: Since the VA has previously failed to adequately
predict the demand of services from returning veterans from OIF/
Operation Enduring Freedom (OEF) what new methodology is the VA using
to properly estimate need and services for these returning veterans?
How does the FY 2008 budget reflect this new methodology?
Response: We believe that we have accurately projected disability
claims receipts since the beginning of combat operations in Afghanistan
and Iraq. The table below shows our projections and actual receipts.
------------------------------------------------------------------------
Receipts
Fiscal Year -----------------------------------
Projected Actual
------------------------------------------------------------------------
2004 767,051 771,115
------------------------------------------------------------------------
2005 794,248 788,298
------------------------------------------------------------------------
2006 811,947* 798,382*
------------------------------------------------------------------------
* These figures reflect the core rating receipts and do not include
estimated/actual receipts due to the six state outreach effort.
We believe that our current methodology is accurate. VA will be
able to adjust its projections once the nature of the surge effort is
known.
Question 3: Please provide data concerning the number of claims
received from veterans who served in the theater of operations for OIF/
OEF and their survivors and the disposition (grant, denial) of such
claims for compensation, pension, DIC and death pension.
Response: Available data is based on a match between Department of
Defense data on service members deployed in support of the Global War
on Terrorism (GWOT) for the period September 11, 2001, through
September 30, 2006, and VA data covering September 11, 2001, through
August 30, 2006.
This data reflects summary counts of compensation and pension (C&P)
benefit activity among veterans deployed overseas in support of GWOT.
This data match only identifies deployed GWOT veterans who have also
filed a VA disability claim either prior to or following their GWOT
deployment. Many GWOT veterans had earlier periods of service, and had
filed for and received VA disability benefits before being reactivated.
The Veterans Benefit Administration's (VBA) computer systems do not
contain any data that would allow us to attribute veterans'
disabilities to a specific period of service or deployment.
For the period covered, 176,111 of nearly 634,000 GWOT veterans
have filed a claim for disability benefits either prior to or following
their GWOT deployment (approximately 28 percent). This includes
survivors' claims for dependency and indemnity compensation (DIC) and
death pension. VA has processed nearly 2,000 DIC claims for survivors
of Operation Enduring Freedom/Operation Iraqi Freedom (OEF/OIF) service
members who died in service.
Question 4: With respect to question number three, what was the
breakdown among Active Duty, Reservists and National Guard claimants?
What percentages of claims were denied for each component? It has been
reported that while 37% of Active Duty veterans have filed for service-
related disability claims, only 20% of those in the National Guard or
Reserves have filed similar claims. However, 18% of the claims filed by
National Guard members and Reservists are denied, while only 8% of
Active Duty claims are denied.
Response: The following chart displays the disposition of claims
filed by all identified GWOT veterans.
----------------------------------------------------------------------------------------------------------------
Reserves Active Duty Total
----------------------------------------------------------------------------------------------------------------
Deployed Servicemembers 371,974 952,445 1,324,419
----------------------------------------------------------------------------------------------------------------
Deployed Veterans 339,498 294,369 633,867
----------------------------------------------------------------------------------------------------------------
Claims Filed 68,623 107,488 176,111
----------------------------------------------------------------------------------------------------------------
20% 37% 28%
----------------------------------------------------------------------------------------------------------------
Claims Processed 50,953 85,343 136,296
----------------------------------------------------------------------------------------------------------------
74% 79% 77%
----------------------------------------------------------------------------------------------------------------
Claims Granted 41,744 78,716 120,460
----------------------------------------------------------------------------------------------------------------
82% 92% 88%
----------------------------------------------------------------------------------------------------------------
Claims Denied 9,209 6,627 15,836
----------------------------------------------------------------------------------------------------------------
18% 8% 12%
----------------------------------------------------------------------------------------------------------------
Claims Pending 17,670 22,145 39,815
----------------------------------------------------------------------------------------------------------------
26% 21% 23%
----------------------------------------------------------------------------------------------------------------
The following definitions are provided to assist in understanding
this data:
Claims Denied: None of the veterans' conditions meet
eligibility requirements for service connection. This category includes
a small number of veterans receiving nonservice-connected disability
pension.
Claims Filed: The sum of ``Claims Granted,'' ``Claims
Denied,'' and ``Claims Pending.''
Claims Granted: At least one claimed condition meets
eligibility requirements for service connection. For veterans who filed
for more than one condition, this category includes full grants of all
conditions as well as all combinations of disabilities granted and
denied. It includes grants of all service-connected disabilities, from
0 to 100 percent, regardless of whether the veteran receives monetary
compensation.
Claims Pending: VA is reviewing these veterans' claims
for compensation or pension benefits. This category includes appeals.
Claims Processed: The total of ``Claims Granted'' and
``Claims Denied.'' This does not include ``Claims Pending.''
VA makes absolutely no distinctions in processing claims from
active duty or reserve personnel. All claims are considered using the
same laws and regulations to determine entitlement to benefits and
disability evaluations, and our goal is to ensure all veterans receive
the benefits they have earned in service to this nation. We continue to
examine the differences in this data for active duty and reserve
veterans. While we do not yet fully understand the differences, we
believe a significant factor may be length of service. The majority of
service-related disabilities are chronic diseases or disabilities that
develop over time. Generally, reserve service is shorter than regular
active duty service, resulting in a reduced likelihood that these
veterans developed chronic service-related disabilities.
Question 5: With respect to individuals residing outside of the
United States, please provide data concerning the number of claims
received from veterans and their survivors and the disposition (grant,
denial) of such claims for compensation, pension, DIC and death
pension. Also, how many individuals living in the Philippines received
VA benefits and what was the total amount? How many of these
individuals do you expect to file for benefits in FY 2008 and what is
the predicted amount?
Response: Claims for individuals residing outside the United States
are processed based on their country of residence. The Houston Regional
Office processes claims for those residing in Mexico, the Caribbean and
Central and South America. Claims from residents of Canada are
processed by the White River Junction, Vermont Regional Office. The
Pittsburgh Regional Office processes claims from all other
international claimants. VA does not separately maintain data on the
number of claims received or the disposition of those claims for
individuals residing outside the United States.
In January 2007, VA benefits totaling $12,655,000 were paid to
14,968 residents of the Philippines, during FY 2005, the last year for
which data is available. VA does not project numbers of expected claims
or benefit amounts based on place of residence. Rather, budget
projections are based on national projections of expected workload and
other factors.
Question 6: Please provide the breakdown of each insurance program
under the jurisdiction of the VA. How many of these programs are self
funded through premiums? What insurance programs and at what percent
and amount derive funds from the Servicemembers Group Life Insurance
(SGLI) program?
Response: The insurance program administers six life insurance
programs and supervises two additional programs for the benefit of
servicepersons, veterans, and their beneficiaries.
Self-Supporting Insurance Programs--The United States Government
Life Insurance (USGLI), National Service Life Insurance (NSLI),
Veterans' Special Life Insurance (VSLI) and Veterans' Reopened
Insurance (VRI) are fully self-supporting programs with the exception
of a small amount of funding in the NSLI program which is paid from
appropriated funds for the costs of claims traceable to the extra
hazards of service in the armed forces. Appropriated funds were
$886,000 in 2006. These programs are no longer open to new issues and
were established to meet the insurance needs of veterans at the time of
their service. Each of these funds is operated in basically the same
manner. Obligations are financed from offsetting collections and
redemption of investments in U.S. Treasury securities. Expenses
associated with the administration of each of these programs are
financed from excess revenues of each fund.
Service-Disabled Insurance Programs--The Service-Disabled Veterans'
Insurance (S-DVI) and Veterans' Mortgage Life Insurance (VMLI) require
annual subsidies to support these programs. The S-DVI program requires
a subsidy because it provides life insurance protection to veterans
with service-connected disabilities at standard premium rates and is,
therefore, not self-supporting. Similarly, the VMLI program requires a
subsidy because it provides mortgage protection life insurance at
standard premium rates to disabled veterans who have received a grant
for specially adapted housing. The subsidy required from appropriated
funds for the S-DVI program in 2006 was $37.2 million. The VMLI program
required $7.8 million of appropriated funds in 2006.
Service Members' Group Life Insurance (SGLI)--The SGLI program
provides low cost group life insurance protection to persons on active
duty and reservists in the military service. Service personnel
separated from active duty and the reserves have the right to convert
their SGLI coverage to renewable term insurance coverage offered by the
VGLI program. SGLI also offers Family Service Members' Group Life
Insurance coverage for a service member's spouse and children if the
service member is on active duty or in the reserves. Maximum coverage
for spouses is $100,000, or the amount of the service member's SGLI,
whichever is less. All dependent children are insured for $10,000 at no
charge. The SGLI program is supervised by VA and administered, under a
contractual agreement, by Prudential Financial through the Office of
Service Members' Group Life Insurance (OSGLI). The SGLI program is
entirely self-supporting, except for any costs resulting from excess
mortality traceable to the extra hazard of duty in the uniformed
services. The extra hazard costs are reimbursed to the SGLI program by
the Department of Defense (DoD). Extra hazard costs received from DoD
were $405.2 million in 2006.
Traumatic Injury Protection TSGLI--TSGLI is a traumatic injury
protection rider under SGLI that provides for payment between $25,000
and $100,000 (depending on the type of injury) to any member of the
uniformed services covered by SGLI who sustains a traumatic injury
resulting in certain severe losses. The premium charged for this
coverage is $1 per month from each service member insured under SGLI.
This premium covers only the civilian incidence of such injuries with
any excess program costs above the premiums collected to be paid by
DoD. Public Law 109-13 established the TSGLI program as a rider under
the SGLI program effective December 1, 2005. This law also contains a
retroactive provision that provides a service member who suffered a
qualifying loss on or after October 7, 2001, through and including
November 30, 2005, with a benefit under TSGLI if the loss was a direct
result of a traumatic injury incurred in OEF or OIF. DoD reimbursed the
TSGLI program $202.7 million dollars in 2006, which was comprised of
$28.0 million in startup funds for the TSGLI program, $157.6 for
retroactive TSGLI claims, and $17.1 million for prospective TSGLI
claims.
Question 7: Last year, Congress required that Vet Centers provide
bereavement counseling to ``all'' immediate family members of a member
of the Armed Forces who dies while on Active Duty. Will this new
requirement significantly impact the VA? Does the VA need to hire
additional bereavement counselors to handle this increased mission
requirement?
Response: VA has addressed the need for Vet Center support in
anticipation of OIF/OEF requirements.
Since the inception of the Vet Center bereavement program in FY
2004, the families of over 900 military casualties have received
bereavement services. Of these 900 cases, almost 75 percent of the
casualties were from Operation Enduring Freedom and Operation Iraqi
Freedom. The number of visits provided to families is approximately
6,500 and the cost for the services is approximately $600,000. The
capacity for the increase in current workload was factored into the
current budget. The VA is providing these services; increases were
anticipated and included in the current Vet Center budget estimate.
In response to the growing numbers of veterans returning from
combat in OEF/OIF, the Vet Centers have hired additional staff and
opened new centers. In February 2004, 50 global war on terrorism (GWOT)
veterans were hired to augment the Vet Center existing staff. VA
authorized a new 4-person Vet Center in Nashville, Tennessee in
November 2004. An additional 50 GWOT veterans were hired in April 2005
to further enhance services to veterans returning from combat in
Afghanistan and Iraq. VA established two new Vet Centers (Atlanta,
Georgia and Phoenix, Arizona) in April 2006.
In February 2007 a major expansion of the Vet Center program was
announced, 23 new vet centers have been announced to be located in
Montgomery, Alabama; Fayetteville, Arkansas; Modesto, California; Grand
Junction, Colorado; Orlando, Fort Myers, and Gainesville, Florida;
Macon, Georgia; Manhattan, Kansas; Baton Rouge, Louisiana; Cape Cod,
Massachusetts; Saginaw and Iron Mountain, Michigan; Berlin, New
Hampshire; Las Cruces, New Mexico; Binghamton, Middletown, Nassau
County and Watertown, New York; Toledo, Ohio; Du Bois, Pennsylvania;
Killeen, Texas: and Everett, Washington.
Question 8: Pursuant to section 5313 of title 38, the VA limits the
amount of VA compensation that may be paid to a veteran who is
incarcerated in a ``Federal, State or local penal institution'' for
more than 60 days for conviction of a felony. In FY 2006, what was the
total amount of funds withheld under this statute? This statute was
amended last year to include penal facilities run by private entities.
What total amount of funds is the VA expected to withhold because of
this change in law in FY 2008?
Response: VA does not track funds withheld. We track overpayments,
which are the amounts erroneously paid to beneficiaries who are
incarcerated. For FY 2005, overpayments from the prison match with
Social Security totaled approximately $23,786,000. Data is not yet
available for FY 2006.
VA does not separately track overpayments resulting from
incarcerations in penal facilities run by private entities. However, VA
withheld benefits, even prior to this legislation, if the privately
operated penal facility was under contract to a governmental entity. We
do not believe this change in law will significantly impact the amount
of withholdings or overpayments due to incarceration in FY 2008.
Question 9: Please provide for FY 2005 through 2006, the number of
claims processed in each regional office in each year for each separate
program: compensation (provide separate data concerning the number of
claims involving 8 or more issues and 7 issues or less); dependency and
indemnity compensation (DIC); disability pension; pension based upon
age and death pension.
Response: The attached spreadsheets contain the data requested.
Disability pension includes veterans who have established eligibility
based on age. VA does not track separately disability and age-based
pension recipients. The specific claim types reported are:
Original compensation claims with one to seven issues
Original compensation claims with eight or more issues
Reopened compensation claims
All other rating related claims
Original pension claims
Reopened pension claims
Claims for death pension
Claims for dependency and indemnity compensation (DIC)
Question 10: Please provide for each regional office and the
Appeals Management Center the number of remanded appeals pending as of
September 30, 2006, the date the Notice of Disagreement was filed, the
date of each remand by the Board of Veterans Appeals and the current
status of the claim.
Response: VBA and the Board of Veterans Appeals are currently
gathering the data to respond to this request. We will provide this
information when it becomes available.
Question 11: Please provide the methodology and rationale for
allocating resources to the six regional offices with the highest ratio
of pending claims to full time employee equivalents (FTEE) and the six
regional offices with the lowest ratio of pending claims to FTEE.
Please include data on the number and type of FTEE at these offices,
the number of pending claims and the total number of new claims (by
type, compensation, pension, DIC, and death pension) for each such
office in FY 2006.
Response: VBA's compensation and pension resource allocation model
does not allocate staffing based on pending work, or on the ratio of
pending work to full time employee equivalents (FTEE) levels. Doing so
would have the undesirable consequence of rewarding offices who are
unable to reduce their pending inventories. Rather, the model is based
on the following four factors: (1) receipts of incoming work, (2)
accuracy, (3) timeliness, and (4) appellate work. Receipts are given
the greatest weight as the single most important factor driving
staffing requirements in regional offices and the factor least under an
office's control. The use of accuracy and timeliness measures balance
one another, ensuring that staffing decisions are based on both output
and accuracy. However, additional FTE is distributed to ROs who
demonstrate high levels of quality and productivity. The appellate
factor is derived from both output and timeliness measures, rewarding
offices that effectively manage their appellate workload. To minimize
large variations in staffing allocations from year to year, the model
employs a 2-year average for each of these factors.
The methodology is intended to allocate more resources to offices
that receive a greater share of the workload, and process claims more
efficiently and accurately. However, it is not viewed as an absolute
standard for final staffing decisions. VBA leaders use the model as a
guide, but then make some adjustments for special circumstances or
unique missions performed by a regional office. To assist regional
offices experiencing workload difficulties, VBA brokers claims that are
ready for a decision to designated resource centers and to offices with
higher capacity to finalize claims.
Question 12: Please provide information concerning the number of
FTEE assigned to the Board of Veterans Appeals and the Group 7 staff
assigned to represent the Secretary at the Board and the ratio of staff
to pending appeals at the Board and the Court respectively.
Response: The Board of Veterans' Appeals (Board) will be authorized
437 FTEE in FY 2007 upon passage of the FY 2007 Military Construction
and Veterans Affairs and Related Agencies Appropriations Act. Under the
third continuing resolution for FY 2007, the Board is authorized 427
FTEE. On September 30, 2006, there were 40,265 appeals pending before
the Board. The number of appeals pending before the Board includes the
number of appeals physically at the Board (31,707), plus those appeals
still in the field that the field offices have identified as ready for
a Board hearing (8,558). Accordingly, the ratio of staff to pending
appeals at the Board is 1 to 92.1, based on 437 FTEE, and 1 to 94.3,
based on 427 FTEE. There are 97 FTEE, in the Office of General Counsel,
currently assigned to Professional Staff Group VII (PSG VII), the
Veterans Court Appellate Litigation Group. During FY 2006, PSG VII
received a total of 4,906 new cases. That number was comprised of 3,656
new appeals from Board decisions, 79 new petitions for extraordinary
relief, and 1,171 new applications for attorney fees under the Equal
Access to Justice Act. During the first quarter of FY 2007, PSG VII
received an additional 1,942 new cases, which consisted of 1,555 new
appeals from Board decisions, 18 new writ petitions, and 369 new
applications for attorney fees. As of December 31, 2006, the latest
date for which we have complete data, there were 5,183 cases pending
before the Veterans Court. Accordingly, the ratio of staff (97) to
pending cases (5,183) is approximately 1 to 53 at the moment.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Lowest Ratio of Pending Claims to Full Time Employee Equivalents (FTEE)
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Original
Ratio of VSR/Claims Clerk/ Compen- Original Initial Death/
Pending Division DRO RVSR Examiner/ LIE/ Claims sation Pension DIC Claims
Claims to Level Managers Supervisory VSR FE Asst. Claims Claims Received
FTE Received Received
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Salt Lake City 22.29 1 2 48 53 2 19 10,686 281 112
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Jackson 23.93 2 5 26 57 6 15 2,689 527 398
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Muskogee 25.29 2 8 62 100 11 28 4,344 574 856
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Columbia 26.78 3 3 47 101 9 28 4,057 990 586
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Fargo 31.15 1 2 7 19 2 2 1,060 173 90
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Sioux Falls 32.53 1 1 8 16 3 5 812 167 90
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Highest Ratio of Pending Claims to Full Time Employee Equivalents (FTEE)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Original
Ratio of VSR/Claims CompeOriginal Initial
Pending Division Examiner/ Clerk/ sation Pension Death/DIC
Claims Level Supervisory Claims Claims Claims Claims
Station to FTE Managers DRO RVSR VSR LIE/FE Asst. Received Received Received
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Atlanta 68.76 2 12 43 128 11 40 6,838 1,358 1,024
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
New York 68.91 2 6 27 58 10 24 3,395 735 418
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Montgomery 75.37 3 8 30 91 7 28 4,600 1,575 809
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Detroit 78.23 2 10 33 85 8 30 5,404 811 463
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Chicago 84.07 2 10 33 85 8 30 5,404 877 463
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Des Moines 85.13 1 4 10 31 3 12 2,354 670 200
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Question 13: Please provide a list of the number of cases in which
the Secretary requested more than one extension of time for the same
specific filing (such as record on appeal, brief or motion) in the
United States Court of Appeals for Veterans Claims for cases which were
filed in FY 2006.
Response: Our data reflect that the Secretary sought more than one
extension of time for a specific pleading in a total of 1,527 cases
during FY 2006. It is worthy to note, however, that under the Court's
Rules of Practice and Procedure a party is not permitted to seek more
than 45 days of extension time for a specific pleading, absent
extraordinary circumstances. Thus, even when the Secretary sought more
than one extension of time, the total extension time for that pleading
rarely consumed more than 45 days. The Secretary filed a total of
27,238 pleadings during FY 2006, or an average of approximately 2,270
pleadings per month.
Question 14: Please provide an update to the National Cemetery
Administration's strategic plan concerning national cemetery repair and
maintenance efforts, including costs for activities completed in Fiscal
Year 2006 and cost estimates for activities anticipated for Fiscal Year
2008.
Response: The Millennium Act Report to Congress (Volume 2, National
Shrine Commitment), issued in August 2002 provides a comprehensive
assessment of the condition of VA's national cemeteries. This
information is used in the National Cemetery Administration's (NCA)
planning process to assist in prioritizing national shrine projects
over a multi-year period. The report identified the need for 928 repair
projects at an estimated cost of $280 million to ensure a dignified and
respectful setting appropriate for each national cemetery. NCA is using
the information and data provided in the report to plan and accomplish
the repairs needed at each cemetery. Through FY 2006, NCA completed
work on 269 projects, and initiated work on additional projects, with
an estimated cost of $99 million. These projects account for about 44
percent of the deficiencies identified in the Millennium Act report.
Repairs to address repair/maintenance needs are addressed in a
variety of ways. Gravesite renovation projects to raise, realign, and
clean headstones and markers and to repair sunken graves are addressed
through NCA's operations and maintenance (O/M) account. Infrastructure
improvements to buildings, roads, irrigation systems, and historic
structures are addressed with capital expenditures through the major
and minor construction programs. In addition, cemetery staff are used
to complete some repairs.
The 2008 budget includes $9.1 million in NCA's O/M account and $2
million in the minor construction request for national shrine projects.
Future budget requests tied specifically to the shrine commitment will
be prioritized within the context of Departmental priorities. For
example, critical gravesite expansion projects require our immediate
focus in order to keep existing cemeteries open and to ensure continued
service to our nation's veterans and their families.
In addition to specific national shrine projects, a commitment to
enhancing the appearance of the national cemeteries underlies all NCA
activities. Over 30 percent of NCA's operating budget is used for
routine tasks such as mowing, trimming, and other maintenance work.
These functions are equally critical to providing an enduring memorial
to those we serve.
NCA has also established an organizational assessment and
improvement (OAI) program to ensure regular and consistent assessment
of performance against established standards. Each national cemetery
will be evaluated through site visits conducted on a cyclical basis. A
total of 47 national cemeteries have been reviewed under OAI since the
program's inception in 2004. In addition, NCA has developed additional
performance metrics that will be used to improve the appearance of its
national cemeteries. Baseline data was collected in 2004 for three new
performance measures designed to assess the condition of individual
gravesites, including the cleanliness and proper alignment of
headstones and markers. With this baseline data, NCA has identified the
gap between current performance and the strategic goal for each
measure.
Question 15: Please provide data concerning the State Cemetery
Grant Program, including the number of grants awarded in fiscal year
2006, total grant amounts, average grant amounts, and award locations.
Response: In FY 2006, VA spent $17.8 million for grants associated
with four projects to establish, expand, or improve State veterans
cemeteries. The average grant award was $4.4 million. Grant funding was
provided at the following locations:
Anderson, South Carolina ($5.2 million--New Cemetery)
Radcliff (Ft. Knox), Kentucky ($8.5 million--New Cemetery)
Redding, California ($300,000--New Cemetery)
Wrightstown, New Jersey ($3.8 million--Cemetery Expansion)
The FY 2007 and 2008 budget requests include $32 million for this
program in each year. There is sufficient State interest in the grant
program to use these funds.
Question 16: For fiscal years 2006 and 2007, the VA's Education
Service was allocated $19 million from the Readjustment Benefits
Account to enter into contracts with State Approving Agencies for
purposes of approving courses of education under the Montgomery GI Bill
and other related activities. Per section 301 of P.L. 103-330 at the
end of fiscal year 2007, the SAA funding will decrease to $13 million.
Does the VA plan to request resources to maintain funding at the fiscal
year 2007 levels?
Response: VA does not plan to request resources to maintain funding
at FY 2007 level.
Question 17: If not why not, and what is the Education Service's
plan to maintain program and outreach services, as well as fraud
prevention and general oversight over the Montgomery GI Bill programs
without the full complement of SAA personnel?
Response: VA deeply values the outreach services performed by the
State Approving Agencies (SAA). SAA's are able to travel to many
institutions across the United States and fulfill outreach efforts as
well as their supervisory and approval functions.
VA will assume their outreach duties, but has not yet had an
opportunity to truly evaluate the impact of the reduction in SAA
program funding. VA will evaluate the impact in the coming months if it
becomes apparent that some necessary outreach is not being
accomplished, we will reallocate resources.
Question 18: Does the VA expect to hire additional Education
Service staff?
Response: In FY 2007, 32 direct FTEE are added for the Education
program and another 14 FTEE will be added in FY 2008.
Question 19: What are the current pending claim workloads for the
following Montgomery GI Bill education programs: Ch. 30, Ch. 1606, Ch.
1607 and Ch. 35?
Response: As of the end of January 2007, the numbers were as
follows:
Chapter 30: 33,620
Chapter 1606: 10,734
Chapter 1607: 3,213
Chapter 35: 11,807
Question 20: Please provide FTEE data with respect to all of VBA's
business lines, including any projected plans to increase or decrease
in fiscal year 2008.
Response: The table below depicts VBA FTEE data for 2006-2008 for
our five business lines: (1) compensation & pensions (C&P) including
burial, (2) education, (3) vocational rehabilitation & employment,
(VR&E) (4) housing, and insurance. Increases to direct C&P, Education,
and VR&E FTE levels will allow us to better address increasing workload
and improve timeliness of claims processing.
----------------------------------------------------------------------------------------------------------------
2006 FTE Levels (Actuals)
-----------------------------------------------------------------------------------------------------------------
C&P Edu VR&E Hsg Ins VBA
----------------------------------------------------------------------------------------------------------------
Direct 7,858 726 948 747 397 10,676
----------------------------------------------------------------------------------------------------------------
IT 439 73 44 147 30 732
----------------------------------------------------------------------------------------------------------------
Support 989 91 119 148 55 1,402
----------------------------------------------------------------------------------------------------------------
Totals 9,286 889 1,110 1,042 482 12,810
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
2007 FTE Levels (Projected)
-----------------------------------------------------------------------------------------------------------------
C&P Edu VR&E Hsg Ins VBA
----------------------------------------------------------------------------------------------------------------
Direct 7,863 758 1,063 762 422 10,868
----------------------------------------------------------------------------------------------------------------
IT 488 66 44 102 30 730
----------------------------------------------------------------------------------------------------------------
Support 1,094 106 148 107 51 1,506
----------------------------------------------------------------------------------------------------------------
Totals 9,445 930 1,255 971 503 13,104
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
2008 FTE Levels (Requested)
-----------------------------------------------------------------------------------------------------------------
C&P Edu VR&E Hsg Ins VBA
----------------------------------------------------------------------------------------------------------------
Direct 8,320 772 1,102 762 408 11,364
----------------------------------------------------------------------------------------------------------------
IT 154 621 14 32 0 221
----------------------------------------------------------------------------------------------------------------
Support 1,085 101 144 99 51 1,506
----------------------------------------------------------------------------------------------------------------
Totals 9,559 894 1,260 893 459 13,065
----------------------------------------------------------------------------------------------------------------
Note: In the 2008 budget request, 509 information technology (IT) FTEE have been transferred to the IT
appropriation.
Question 21: Please provide the Committee with any relevant data
concerning fines, sanctions, penalties or fees assessed, pending or in
negotiation thereof with a contractor concerning the Loan Guaranty
Service's property management program.
Response: On December 19, 2006, VA notified Ocwen Loan Servicing
LLC, VA's property management service provider, of the intention to
impose a penalty for deficiencies in performance during three different
quarters. The penalty being assessed is in the amount of $1,322,001.43.
Ocwen is filing an appeal of the proposed penalty; this appeal process
is authorized by the contract. VA will consider the appeal and issue a
decision upon completing its review of the documentation provided by
Ocwen.
Question 22: Please provide the total number of VR&E participants
for each of the last three fiscal years, including the Independent
Living program; additionally, please provide the VR&E caseload for each
Regional Office for each of the last 3 fiscal years; and finally, what
is the amount needed to fully implement the VR&E Five Track Program
throughout all the Regional Offices?
Response: The table below represents the number of participants in
the VR&E program, which represents all veterans actively involved in
the program at the end of each fiscal year. The participants can be in
any of the following case statuses: applicant, evaluation planning,
extended evaluation, independent living, rehabilitation to
employability, job ready status, and interrupted.
------------------------------------------------------------------------
Number of
Fiscal Year Participants
------------------------------------------------------------------------
2006 89,791
------------------------------------------------------------------------
2005 92,703
------------------------------------------------------------------------
2004 94,851
------------------------------------------------------------------------
The following table illustrates the average caseload for VR&E
counselors at each of the regional offices (RO) for the last 3 fiscal
years. These figures do not reflect any impact of contractor support,
which varies from RO to RO. A VR&E counselor's workload may vary among
ROs depending on their use of contractors for specialized services.
----------------------------------------------------------------------------------------------------------------
FY04 FY05 FY06
Station Number Average Average Average
Caseload Caseload Caseload
----------------------------------------------------------------------------------------------------------------
340 Albuquerque Regional Office, NM 170 206 137
----------------------------------------------------------------------------------------------------------------
463 Anchorage VAMROC, AK 148 168 242
----------------------------------------------------------------------------------------------------------------
316 Atlanta Regional Office, GA 210 133 122
----------------------------------------------------------------------------------------------------------------
313 Baltimore Regional Office, MD 150 149 164
----------------------------------------------------------------------------------------------------------------
301 Boston Regional Office, MA 135 124 118
----------------------------------------------------------------------------------------------------------------
307 Buffalo Regional Office, NY 179 165 207
----------------------------------------------------------------------------------------------------------------
328 Chicago Regional Office, IL 203 166 131
----------------------------------------------------------------------------------------------------------------
325 Cleveland Regional Office, OH 160 158 142
----------------------------------------------------------------------------------------------------------------
319 Columbia Regional Office, SC 159 161 137
----------------------------------------------------------------------------------------------------------------
339 Denver/Cheyenne Regional Office, CO 141 146 135
----------------------------------------------------------------------------------------------------------------
333 Des Moines Regional Office, IA 94 181 136
----------------------------------------------------------------------------------------------------------------
329 Detroit Regional Office, MI 149 172 150
----------------------------------------------------------------------------------------------------------------
437 Fargo VAMROC, ND 107 129 139
----------------------------------------------------------------------------------------------------------------
436 Fort Harrison VAMROC, MT 91 94 96
----------------------------------------------------------------------------------------------------------------
308 Hartford Regional Office, CT 168 310 226
----------------------------------------------------------------------------------------------------------------
459 Honolulu VAMROC, HI 116 112 103
----------------------------------------------------------------------------------------------------------------
362 Houston Regional Office, TX 204 217 145
----------------------------------------------------------------------------------------------------------------
315 Huntington Regional Office, WV 174 189 147
----------------------------------------------------------------------------------------------------------------
326 Indianapolis Regional Office, IN 212 254 173
----------------------------------------------------------------------------------------------------------------
323 Jackson Regional Office, MS 173 171 179
----------------------------------------------------------------------------------------------------------------
334 Lincoln R259onal Offi277 NE 198
----------------------------------------------------------------------------------------------------------------
350 Little Ro200Regional 161ice, AR 158
----------------------------------------------------------------------------------------------------------------
344 Los Angel285Regional 301ice, CA 186
----------------------------------------------------------------------------------------------------------------
327 Louisvill198egional O154ce, KY 167
----------------------------------------------------------------------------------------------------------------
373 Manchester Regional Office, NH 84 93 102
----------------------------------------------------------------------------------------------------------------
358 Manila Regional Office, Philippines 142 148 130
----------------------------------------------------------------------------------------------------------------
330 Milwaukee Regional Office, WI 123 111 108
----------------------------------------------------------------------------------------------------------------
322 Montgomery Regional Office, AL 145 128 110
----------------------------------------------------------------------------------------------------------------
351 Muskogee Regional Office, OK 139 135 110
----------------------------------------------------------------------------------------------------------------
320 Nashville Regional Office, TN 156 190 147
----------------------------------------------------------------------------------------------------------------
321 New Orleans Regional Office, LA 195 169 162
----------------------------------------------------------------------------------------------------------------
306 New York Regional Office, NY 175 164 141
----------------------------------------------------------------------------------------------------------------
309 Newark Regional Office, NJ 314 197 194
----------------------------------------------------------------------------------------------------------------
343 Oakland Regional Office, CA 206 228 201
----------------------------------------------------------------------------------------------------------------
310 Philadelphia Regional Office, PA 145 154 145
----------------------------------------------------------------------------------------------------------------
345 Phoenix Regional Office, AZ 151 163 198
----------------------------------------------------------------------------------------------------------------
311 Pittsburgh Regional Office, PA 114 131 131
----------------------------------------------------------------------------------------------------------------
348 Portland Regional Office, OR 156 208 143
----------------------------------------------------------------------------------------------------------------
304 Providence Regional Office, RI 132 95 133
----------------------------------------------------------------------------------------------------------------
354 Reno Regional Office, NV 188 131 160
----------------------------------------------------------------------------------------------------------------
314 Roanoke Regional Office, VA 293 270 164
----------------------------------------------------------------------------------------------------------------
341 Salt Lake City101gional Of 87e, UT 112
----------------------------------------------------------------------------------------------------------------
377 San Diego Regional Office, CA 167 171 137
----------------------------------------------------------------------------------------------------------------
355 San Juan Regional Office, PR 111 111 108
----------------------------------------------------------------------------------------------------------------
346 Seattle Regional Office, WA 122 151 137
----------------------------------------------------------------------------------------------------------------
438 Sioux Falls VAMROC, SD 167 184 150
----------------------------------------------------------------------------------------------------------------
331 St. Louis Reg121al Office169O 149
----------------------------------------------------------------------------------------------------------------
335 St. Paul Regional Office, MN 245 192 143
----------------------------------------------------------------------------------------------------------------
317 St. Petersburg Regional Office, FL 163 155 119
----------------------------------------------------------------------------------------------------------------
402 Togas VAMROC, ME 148 347 221
----------------------------------------------------------------------------------------------------------------
349 Waco Regional Office, TX 90 185 147
----------------------------------------------------------------------------------------------------------------
372 Washington Regional Office, DC 194 247 152
----------------------------------------------------------------------------------------------------------------
405 White River Junction VAMROC, VT 79 69 79
----------------------------------------------------------------------------------------------------------------
452 Wichita VAMROC, KS 133 138 127
----------------------------------------------------------------------------------------------------------------
460 Wilmington VAMROC, DE 151 154 162
----------------------------------------------------------------------------------------------------------------
318 Winston-Salem Regional Office, NC 223 224 179
----------------------------------------------------------------------------------------------------------------
The VR&E Five-Track to Employment Model has been fully deployed and
implemented throughout all the regional offices.
Health
Question 1: The VA has been operating under a continuing resolution
since the start of the fiscal year on October 1, 2006. P.L. 109-383
(H.J. Res. 102) provided the VA with the legal authority to transfer up
to $683,970,000 from other accounts to the Medical Services Account.
Question 1(a): On September 30, 2006, what unobligated funds were
available to the VA? Please detail specific amounts for specific
accounts. Please list unobligated balances at the start and end of FY
2006, FY 2005, and FY 2004 and please explain why the amounts available
as unobligated were greater or less than the amounts from the previous
two fiscal years.
Response: The chart below shows start of year and end of year
unobligated balances for FY 2004-FY 2006 for the total of the three
medical care appropriations.
------------------------------------------------------------------------
(Dollars in Thousands)
Unobligated Balances --------------------------------------
FY 2004 FY 2005 FY 2006
------------------------------------------------------------------------
Start of Year $823,282 $710,682 $1,149,225
------------------------------------------------------------------------
End of Year $710,682 $1,149,225 $590,611
------------------------------------------------------------------------
VA reported to Treasury (via the SF 133) that the FY06
EOY unobligated balance was $589,863, or 748K lower than the amount
shown above; please verify that $590,611 is the correct amount and
whether the first quarter FY07 SF 133 SOY balance will reflect the
higher amount.
The FY 2006 start of year unobligated balance was greater
than FY 2004 and FY 2005 due to resources provided by the budget
amendment (P.L. 109-54) and Hurricane supplemental received in late FY
2005 and increased collections.
The FY 2006 end of year unobligated balance was less than
FY 2004 and FY 2005 due to a higher level of expenditures supporting
veterans' healthcare.
Question 1(b): As of September 30, 2006, please list all
``carryover'' funding available to the VA. Please detail specific
amounts for specific accounts as well as listing which amounts were
provided as 2-year funding as well as noting for which fiscal year
amounts, or portions of these amounts, were first provided.
Response: The chart below lists all carryover funding available to
the three medical care appropriations as of September 30, 2006.
------------------------------------------------------------------------
Dollars in
Thousands
------------------------------------------------------------------------
Medical Services:
------------------------------------------------------------------------
No-Year $227,745
------------------------------------------------------------------------
2-Year $139,617
------------------------------------------------------------------------
Hurricane Supplemental $34,389
------------------------------------------------------------------------
Total $401,751
------------------------------------------------------------------------
Medical Administration:
------------------------------------------------------------------------
2-Year $145,543
------------------------------------------------------------------------
Hurricane Supplemental $5,924
------------------------------------------------------------------------
Total $151,467
------------------------------------------------------------------------
Medical Facilities:
------------------------------------------------------------------------
No-Year $1,227
------------------------------------------------------------------------
2-Year $3,592
------------------------------------------------------------------------
Hurricane Supplemental $32,574
------------------------------------------------------------------------
Total $37,393
------------------------------------------------------------------------
Grand Total:
------------------------------------------------------------------------
No-Year $228,972
------------------------------------------------------------------------
2-Year $288,752
------------------------------------------------------------------------
Hurricane Supplemental $72,887
------------------------------------------------------------------------
Total $590,611
------------------------------------------------------------------------
Question 1(c): As of January 26, 2007, have you made any transfers
pursuant to your authority under P.L. 109-383? Please provide detailed
information if you have used this transfer authority, including from
which accounts funds were transferred, and the amounts of any such
transfers.
Response: As of January 26, 2007, no transfers have been made
pursuant to VA's authority under Public Law 109-383.
Question 1(d): Does the VA anticipate using this authority between
January 26, 2007 and February 5, 2007?
Response: The Department has not used and does not anticipate using
this authority between January 26, 2007 and February 5, 2007.
Question 1(e): What consequences, by specific account, do you
foresee operating under a continuing resolution will have on VA
activities at the end of FY 2007 and the start of FY 2008?
Response: The proposed funding level of $32.7 billion approved by
the House (H.J. Res. 20) on January 29, 2007, would fully fund medical
care for veterans this fiscal year. If however, Congress were to hold
us to the 2006 funding level VA would be short approximately $3 billion
of the funding needed to meet the estimated demand for care in FY 2007.
A shortage of this magnitude would have serious implications in all
three accounts--existing employment levels could not be sustained,
patient waiting times would increase dramatically, and healthcare
operations could not be sustained at their current levels for the
remainder of FY 2007.
Question 2: CBOCs--Please provide a detailed list regarding the
number of Community-Based Outpatient Clinics (CBOCs) which were
approved in FY 2006 and FY 2005, as well as those approved for FY 2007
through January 26, 2007. Please also provide a detailed list regarding
the facilities approved and whether or not they have been activated. Of
those activated, please provide detailed estimates as to the costs of
each activation and the funding source, by account, of each activation.
Response: Table 1 below depicts the Community-Based Outpatient
Clinics (CBOCs) approved and activated FY 2005 and FY 2006. Table 2
below depicts CBOCs approved and not yet activated. No CBOCs have been
activated in FY 2007.
Table 1: CBOCs Approved and Activated FY 2005 and FY 2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
Type of
Clinic: Cost To
VISN CBOC Name City State Contract Establish
(C) or VA Clinic
(VA)
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 2005
--------------------------------------------------------------------------------------------------------------------------------------------------------
3 Eastern Dutchess Pine Plains NY V $247,490
--------------------------------------------------------------------------------------------------------------------------------------------------------
4 Gloucester Sewell NJ V $54,525
--------------------------------------------------------------------------------------------------------------------------------------------------------
4 Northampton County Bangor PA V $198,853
--------------------------------------------------------------------------------------------------------------------------------------------------------
4 Warren North Warren PA V $183,438
--------------------------------------------------------------------------------------------------------------------------------------------------------
4 Uniontown Uniontown PA V $6,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4 Venango Oil City PA V $156,685
--------------------------------------------------------------------------------------------------------------------------------------------------------
7 Goose Creek North Charleston SC V $101,087
--------------------------------------------------------------------------------------------------------------------------------------------------------
8 The Villages/Sumter County The Villages FL V $500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
9 Dupont LouisvKYle V $0
--------------------------------------------------------------------------------------------------------------------------------------------------------
9 Standiford Field LouisvKYle V $0
--------------------------------------------------------------------------------------------------------------------------------------------------------
9 Memphis-South Clinic Memphis TN V $1,050,717
--------------------------------------------------------------------------------------------------------------------------------------------------------
9 Covington Memphis TN V $183,852
--------------------------------------------------------------------------------------------------------------------------------------------------------
9 Vine Hill Nashville TN V $120,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
10 New Philadelphia New Philadelphia OH V $1,939,553
--------------------------------------------------------------------------------------------------------------------------------------------------------
10 Marion Marion OH V $487,166
--------------------------------------------------------------------------------------------------------------------------------------------------------
10 Ravenna Ravenna OH V $1,372,455
--------------------------------------------------------------------------------------------------------------------------------------------------------
15 Hanson/Hopkins County Hanson KY V $71,539
--------------------------------------------------------------------------------------------------------------------------------------------------------
16 Galveston County Site 1 Galveston Island TX C $123,227
--------------------------------------------------------------------------------------------------------------------------------------------------------
16 Galveston County Site 2 Galveston Island TX C $123,277
--------------------------------------------------------------------------------------------------------------------------------------------------------
18 Anthem/New River Anthem AZ V $114,117
--------------------------------------------------------------------------------------------------------------------------------------------------------
19 Rock Springs Rock Springs WY V $250,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
21 Sail Bruno/North San Mateo San Bruno CA V $597,258
County
--------------------------------------------------------------------------------------------------------------------------------------------------------
7 Athens Athens GA V $1,222,893
--------------------------------------------------------------------------------------------------------------------------------------------------------
16 Slidell Slidell LA V $260,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
16 LaPlace/St. John* LaPlacLA V $2,260,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
16 Hammond* Hammond LA V $2,260,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs to establish a clinic include all non-recurring startup costs such as equipment, furniture, IT needs and any lease buildout or construction costs.
The costs do not include annual expenditures such as salary.
* Startup costs are high due to having to purchase modular buildings.
Table 2: Approved and To Be Activated
------------------------------------------------------------------------
VISN State
------------------------------------------------------------------------
4 Dover DE
------------------------------------------------------------------------
6 Hickory NC
------------------------------------------------------------------------
6 LynchbuVA
------------------------------------------------------------------------
6 Norfolk VA
------------------------------------------------------------------------
6 Franklin NC
------------------------------------------------------------------------
6 Hamlet NC
------------------------------------------------------------------------
7 Bessemer AL
------------------------------------------------------------------------
8 Eastern Puerto Rico PR
------------------------------------------------------------------------
9 Morehead City KY
------------------------------------------------------------------------
9 Hazard KY
------------------------------------------------------------------------
9 Morristown/Hamblen TN
------------------------------------------------------------------------
16 Eglin AFB FL
------------------------------------------------------------------------
17 Conroe TX
------------------------------------------------------------------------
17 NE Bexar TX
------------------------------------------------------------------------
18 Globe/Miami AZ
------------------------------------------------------------------------
18 NW Tucson AZ
------------------------------------------------------------------------
18 SE Tucson AZ
------------------------------------------------------------------------
18 Thunderbird AZ
------------------------------------------------------------------------
20 Metro East OR
------------------------------------------------------------------------
20 Canyon County ID
------------------------------------------------------------------------
20 Central Washington WA
------------------------------------------------------------------------
20 Metro West OR
------------------------------------------------------------------------
21 American Samoa HI
------------------------------------------------------------------------
21 Fallon NV
------------------------------------------------------------------------
22 Orange City CA
------------------------------------------------------------------------
23 Bemidji MN
------------------------------------------------------------------------
23 Holdrege NE
------------------------------------------------------------------------
23 Spirit Lake IA
------------------------------------------------------------------------
23 Western Wisconsin WI
------------------------------------------------------------------------
Question 3: Non-Recurring Maintenance--Please list total
expenditures for non-recurring maintenance from the Medical Facilities
Account, by month, for FY 2006. Please explain any variance from spend-
out rates from the previous two fiscal years.
Response: The table below presents non-recurring maintenance (NRM)
expenditures, by month, for the past 3 fiscal years. The variance in
first half of FY 2004 relates to the implementation of the new three-
appropriation structure directed in the appropriations act. The other
variances between months are due to execution timing of NRM projects.
------------------------------------------------------------------------
NRM by Month (Cumulative) (Dollars in Millions)
-------------------------------------------------------------------------
FY 2004 FY 2005 FY 2006
------------------------------------------------------------------------
Oct $0 $5 $16
------------------------------------------------------------------------
Nov $0 $10 $20
------------------------------------------------------------------------
Dec $0 $18 $27
------------------------------------------------------------------------
Jan $0 $26 $35
------------------------------------------------------------------------
Feb $0 $37 $45
------------------------------------------------------------------------
Mar* $1 $49 $53
------------------------------------------------------------------------
Apr $14 $57 $68
------------------------------------------------------------------------
May $32 $73 $80
------------------------------------------------------------------------
Jun $67 $90 $93
------------------------------------------------------------------------
Jul $103 $102 $119
------------------------------------------------------------------------
Aug $154 $146 $168
------------------------------------------------------------------------
Sep $360 $475 $412
------------------------------------------------------------------------
* Represents establishment of the three medical care appropriation
accounting structure in FY 2004.
Question 4: Priority 8 Veterans--Please provide VA estimates as to
the number of veterans affected by the Administration's decision in
January 2003 to end enrollment of new Priority 8 veterans. Please
provide a total number, as well as the number by fiscal year. Please
also provide an estimate as to amount of resources required to lift the
enrollment ban, as well as the estimated amount contributed to the
Medical Care Collection Fund (MCCF) per Priority 8 veteran per fiscal
year.
Response: The following table shows the impact of Priority 8
suspension on unique enrollment by fiscal year.
----------------------------------------------------------------------------------------------------------------
2004 Cu- 2005 Cu- 2006 Cu- 2006 2007 2008
2003 Cu- mulative\1\ mulative\2\ mulative\3\ mulative\4\ Estimate\5\ Estimate\5\ Estimate\5\
----------------------------------------------------------------------------------------------------------------
Total Total Total Total Total Total Total
----------------------------------------------------------------------------------------------------------------
93,228 192,419 263,257 331,754 830,203 1,254,460 1,570,503
----------------------------------------------------------------------------------------------------------------
\1\ Totals are cumulative and do not include enrollees who were initially denied enrollment and subsequently
enrolled in an eligible priority.
\2\ Does not include ineligible enrollees who died prior to FY 2004.
\3\ Does not include ineligible enrollees who died prior to FY 2005.
\4\ Does not include ineligible enrollees who died prior to FY 2006.
\5\ FY 2006-2008 data represent estimated cumulative impact of Priority 8 suspension--``pent-up demand.''
Data Source: ADUSH End of Year/Fiscal Year to Date Enrollment Files--Sep03, Sep04, Sep05, Sep06.
March 2006 Model Enrollment Projections (BdgE1F0D0R0A0M5)
Reopening Priority 8 enrollment in FY 2008 is estimated to increase
enrollment in Priority 8 by approximately 1.6 million and require an
increase in funding of $1.7 billion. If the suspension on Priority 8
enrollees were lifted, the revenue associated with use by new Priority
8 enrollees for Medical Care Collections Fund (MCCF) first party co-
payments and third party collections is estimated to be $591 million in
FY 2008. VA has serious concerns that this additional demand will
strain VA's capacity to provide timely, quality care for all enrolled
veterans and lead to longer waits for care. VA must also consider the
impact of this policy in future years. In 2017, this policy would
increase Priority 8 enrollment by an estimated 2.4 million and would
require an additional $4.8 billion. Over the next 10 years, resumption
of Priority 8 enrollment would require $33.3 billion in funding
requirements.
Question 5: OIF/OEF Veterans--Your estimate for the numbers of
returning OIF/OEF veterans for FY 2006 was substantially off from the
demand that you experienced. In addition, your estimates of the average
medical care costs per returning servicemember were higher than what
you experienced. Please provide us with the numbers of returning
servicemembers you saw in FY 2006 as well as the total number of these
veterans per priority group and the average cost per servicemember.
Response: The chart below provides FY 2006 data for OEF/OIF
veterans.
------------------------------------------------------------------------
FY 2006 OIF/OEF Unique Patients
-------------------------------------------------------------------------
Priority Group Unique Patients
------------------------------------------------------------------------
1 16,360
------------------------------------------------------------------------
2 17,891
------------------------------------------------------------------------
3 29,500
------------------------------------------------------------------------
4 677
------------------------------------------------------------------------
5 49,461
------------------------------------------------------------------------
6 20,040
------------------------------------------------------------------------
7 2,799
------------------------------------------------------------------------
8 18,544
------------------------------------------------------------------------
Total Patients 155,272
------------------------------------------------------------------------
Obligations ($000) $404,840
------------------------------------------------------------------------
Cost Per Patient $2,607
------------------------------------------------------------------------
Oversight
Question 1: Testimony at previous Budget Hearings indicates that VA
projects its budget requirements based on planned utilization of
services by veterans. Budgeting problems arose in previous years when
the Administration used improper projections to plan for its budget
requirements in the ``out years.'' How do the ongoing military efforts
in Iraq and Afghanistan affect VA's budget projections? What ``in-
country''--in harm's way--troop levels are used for this projection?
What is the source or rationale for these troop level and veterans
service needs estimates?
Response: VA does not use ``in-country'' troop levels in budget
projections. VA has made every effort to account for the needs of OEF/
OIF veterans within the actuarial model. The model has had several key
methodological improvements, including development of separate
enrollment, morbidity, and reliance assumptions for OEF/OIF veterans
based on their actual enrollment and usage patterns. However, many
unknowns can impact the number and type of services that VA will need
to provide OEF/OIF veterans, including the duration of the conflict,
when OEF/OIF veterans are demobilized, and the impact of our enhanced
outreach efforts.
The number of veterans returning from Afghanistan being treated in
the VA healthcare system is relatively small compared to the overall
number of veterans already accessing VA healthcare and benefits (over
5.3 million).
Question 2: In post-hearing questions following the February 8,
2006 budget hearing in response to ``Efficiency'' question ``1.f,''
concerning a lack of proper documentation for claimed savings, the
Department advised the Committee that it had just begun to review the
major process to establish policies and procedures to assure proper
documentation is identified and control systems are developed to
adequately track, monitor, validate, and record authentic instances of
bona fide management savings throughout the 157 medical centers for
which it is responsible. What is current ability for VA to adequately
track, monitor, validate, and record authentic instances of bona fide
management savings? What time and expense has been expended in
designing and implementing this tracking, monitoring, validating, and
recording system?
Response: Management efficiencies are no longer included in the
budget estimates and other assumptions and calculations are verified to
enhance the fundamental quality of the estimates. VA has taken steps to
improve its overall quality control and made technical changes to
strengthen the accuracy of its formulation methodologies and
assessments of cost savings in the FY 2007 and future budgets.
During the execution year, VA is also monitoring budget performance
with monthly reports to VA senior leaders and to the Office of
Management and Budget (OMB), as well as with quarterly reports to
Congress.
Question 3: In post-hearing questions following the February 8,
2006 budget hearing in response to questions regarding VA's Management
Analysis/Business Process Reengineering (MA/BPR) program, VA advised
the Committee that it was embarking on two pilot studies under MA/BPR.
VA's response provided a listing of items for monitoring and
measurement beginning with ``(1) baseline costs and Key Performance
Indicators (KPIs)'' and ending with ``(4) costs to conduct the study
and implement the MEO.'' Please provide this information for each of
the two pilot studies to the Committee for review.
Response: The information requested is not yet available. Under the
MA/BPR design, baseline operational costs and key performance
indicators are established no later than the ANALYZE phase. For the
pilot studies, VA's objective is to complete the ANALYZE phase on or
about July 31, 2007, at which time this information should be available
for the majority of the sites being studied. Costs to conduct the
study, which are considered part of the costs to implement the most
efficient organization (MEO), are recorded cumulatively through the
completion of each phase. Accordingly, information on pilot study costs
accumulated through completion of the ENVISION phase should be
available about April 30, 2007. Accumulated study costs through all
phases should be available by VA's target date for completion of the
pilot studies, which is December 31, 2007 for the majority of sites.
Other costs to implement the MEO, such as the purchase of new capital
equipment, are reported as part of actual operational costs incurred
during the SUSTAIN phase, which is the ongoing operation of the
approved MEO after the study has been completed. Information on such
costs is recorded and available when incurred.
Question 4: Last year VA advised the Committee that the offices of
the VA Inspector General were staffed at the lowest ratio--OIG FTE to
Parent Agency FTE--among all statutory Inspectors General in the
Federal Government. The Committee acknowledges VA's previous estimates
that the VA OIG returns 15-20 dollars for each dollar invested in the
OIG through fines, and other means. What was the rate of return for
funds invested in the OIG in both FY 2005 and 2006 and what is the
projected rate of return for FY 2007? What would be the impact of
increasing the staffing of the VA OIG in terms of total dollars
``returned''?
Response: In FY 2005 and 2006, the Office of the Inspector General
(OIG) returned 30:1 and 13:1 for each dollar invested, respectively,
through audit and inspection recommendations on the better use of
funds; fines, penalties, restitution, savings and cost avoidance, and
civil judgments as a result of criminal and administrative
investigations; and $21.7 million in actual dollar contract review
recoveries for the 2-year period--funds deposited back into VA's Supply
Fund. OIG estimates its return in FY 2007 will approximate 10:1 for
each dollar invested, and will include an estimated $11 million in
actual dollar recoveries from contract reviews going back into the
Supply Fund. The decline in cost-benefit ratio for FY 2007 is partially
attributed to a 40 FTEE reduction from the previous year. We would
expect additional staffing resources to continue providing similar
incremental returns.
POST-HEARING QUESTIONS FOR THE RECORD
Questions from Hon. Bob Filner, Chairman, Committee on Veterans' Affairs
, to Hon. R. James Nicholson, Secretary, U.S. Department of Veterans
Affairs
Committee on Veterans' Affairs
Washington, DC
March 5, 2007
Honorable R. James Nicholson
Secretary
Department of Veterans Affairs
Washington, DC 20420
Dear Mr. Secretary:
In reference to our Full Committee hearing on the VA Fiscal Year
2008 budget on February 8, 2007, I would appreciate it if you could
answer the enclosed hearing questions by the close of business on March
30, 2007.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for materials for all Full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively and single-spaced. In
addition, please restate the question in its entirety before the
answer.
Sincerely,
BOB FILNER
Chairman
Projected Costs for OEF/OIF Veterans (Bilmes Study)--Linda Bilmes
of the John F. Kennedy School of Government at Harvard, in a paper
released in January entitled ``Soldiers Returning From Iraq and
Afghanistan: The Long-Term Costs of Providing Veterans Medical Care and
Disability Benefits,'' has estimated that 255,000 returning
servicemembers will seek VA healthcare in 2007 at a total cost of $1.4
billion. Bilmes further estimates that this number will increase to
308,000 in 2008 and cost $1.8 billion. The VA is estimating 209,000
returning servicemembers in 2007 and 263,000 in 2008. Bilmes estimates
that the total costs of providing care to these veterans will be $315
billion by 2014.
Question 1(a): In light of this study do you stand by your
estimates concerning the number of returning OEF/OIF veterans?
Response: In fiscal year (FY) 2008, the Department of Veterans
Affairs (VA) estimates that it will treat over 263,000 Operation
Enduring Freedom/Operation Iraqi Freedom (OEF/OIF) veterans at a cost
of approximately $752 million. This estimate is based on the actual
enrollment rates, age, gender, morbidity, and reliance on VA healthcare
services of the enrolled OEF/OIF population. OEF/OIF veterans have
significantly different VA healthcare utilization patterns than non-
OEF/OIF enrollees, and this is reflected in the estimates above. For
example, when modeling expected demand for post traumatic stress
disorder (PTSD) residential rehab services for the OEF/OIF cohort, the
model reflects the fact that they are expected to need three times the
number of these services than non-OEF/OIF enrollees. The model also
reflects their increased need for other healthcare services, including
physical medicine, prosthetics, and outpatient psychiatric and
substance abuse treatment. On the other hand, experience indicates that
OEF/OIF enrollees seek about half as much inpatient acute medicine and
surgery care from the VA as non-OEF/OIF enrollees.
Question 1(b): Do you believe these cost estimates are accurate,
and what is the VA currently doing to meet the increased costs and
demands on the healthcare system that these veterans represent?
Response: Many unknowns will influence the number and type of
services that VA will need to provide OEF/OIF veterans, including the
duration of the conflict, when OEF/OIF veterans are demobilized, and
the impact of our enhanced outreach efforts. VA has estimated the
healthcare needs of OEF/OIF veterans based on what we currently know
about the impact of the conflict. To ensure that we are able to care
for all returning OEF/OIF veterans, we have made additional investments
in our medical care budget.
State Approving Agencies/Montgomery GI Bill--State Approving
Agencies have partnered with the VA in the administration of veterans
educational and training programs for nearly 60 years. Through the
program approval and supervision process, they ensure that money spent
on the Montgomery GI Bill is money well spent. Moreover, SAAs provide a
critical assist in reducing the opportunities for fraud, waste and
abuse throughout the system. For FY 2006 and 2007 the VA's Education
Service was allocated $19 million from the Readjustment Benefits
Account to enter into contracts with State Approving Agencies for
purposes of approving courses of education under the Montgomery GI Bill
and other related activities. Per section 301 of P.L. 103-330 at the
end of fiscal year 2007, the SAA funding will decrease to $13 million.
Question 2(a): Does the VA plan to request resources to maintain
funding at the fiscal year 2007 levels?
Response: VA does not plan to request resources to maintain funding
at FY 2007 level.
Question 2(b): If not why not, and what is the Education Service's
plan to maintain program and outreach services, as well as fraud
prevention and general oversight over the Montgomery GI Bill programs
without the full complement of 8M personnel?
Response: VA will assume the outreach duties performed by the State
Approving Agencies (SAA). VA will evaluate the impact in the coming
months. If it becomes apparent that some necessary outreach is not
being accomplished, we will reallocate resources. Additionally, VA will
continue to monitor the performance of SAAs in conducting program
approvals, fraud prevention, and general oversight. If SAAs operating
at the new funding levels are unable to perform these services, then
the Department will reallocate existing VA staff and resources to cover
the services previously provided by the SAAs. Our ultimate concern is
always for the effective administration of educational benefits to our
veterans.
Mental Health Spending--The VA's FY 2008 budget submission requests
an additional $56 million, for a total of $360 million, for the VA's
Mental Health Initiative. The GAO reported in November that you failed
to fully allocate the resources you had pledged for the Mental Health
Initiative in FY 2005 and FY 2006.
Question 3: Will the VA fully allocate the $306 million for this
initiative in FY 2007, and the $360 million sought in FY 2008?
Response: Yes. More than 95 percent of the funds for FY 2007 have
been committed. We are closely monitoring the use of the funds in the
field. We are prepared to recover those funds that may go unspent as a
result of delays in hiring and to reinvest them in meritorious projects
proposed by the Veterans Integrated Service Networks (VISN).
Funds for FY 2008 will be committed for continuation of programs
initiated in FY 2007.
VA Mental Health Effort--According to the VA's FY 2008 budget
submission, the VA ``plans to spend a total of $3 billion to continue
our efforts to improve access to mental health services across the
country.'' The GAO report on spending on the Mental Health Initiative
from November stated that for FY 2006, the VA was ``expected to spend
more than $2 billion on mental health services.'' The FY 2008 budget
submission includes $360 million for the Mental Health Initiative, and
$311 million for outpatient mental health.
Question 4(a): Can you provide details concerning the remainder of
your mental health spending for FY 2008?
Response: For efficiency, the allocation of FY 2007 and FY 2008
funds were combined. A number of programs will be implemented and
expanded during FY 2007, and continued during FY 2008 to ensure
spending of the total amount of funding for the 2 years. The allocation
of FY 2008 funds to specific programs is outlined in the table as
follows.
------------------------------------------------------------------------
FY 2007 and FY 2008 Proposed
Mental Health Initiative Spending FY 2007 FY 2008 Change
Plan
------------------------------------------------------------------------
Continuation of FY 2005 and FY
2006 Recurring
Initiated Activities 166,296,744 166,296,744 0
------------------------------------------------------------------------
Primary Care/Mental Health 38,380,506 55,691,153 17,310,647
Integration
------------------------------------------------------------------------
Suicide prevention coordinators 8,624,890 16,249,780 7,624,890
(156 sites)
------------------------------------------------------------------------
Psychosocial Rehabilitation (PSR) 15,138,061 23,587,385 8,449,324
------------------------------------------------------------------------
Mental Health Intensive Case
Management
(MHICM): Rural, multiple teams, 10,185,091 12,345,644 2,160,553
etc.
------------------------------------------------------------------------
Homeless Program Initiatives 17,556,002 17,342,238 -213,764
------------------------------------------------------------------------
Substance Use Disorders 4,624,702 9,096,072 4,471,370
------------------------------------------------------------------------
Mental Health staff in Community
Based Out-
patient Clinics (CBOCs) 15,290,157 21,883,139 6,592,982
------------------------------------------------------------------------
Operation Enduring Freedom/
Operation Iraqi
Freedom (OEF/OIF) in reach 3,490,567 5,102,231 1,611,664
------------------------------------------------------------------------
Post Traumatic Stress Disorder
(PTSD), including
Dual Diagnosis and Military
Sexual Trauma
(MST) Resource program 4,979,157 5,115,401 136,244
------------------------------------------------------------------------
Telemental Health 7,018,000 3,100,000 -3,918,000
------------------------------------------------------------------------
EES training 600,000 600,000 0
------------------------------------------------------------------------
Centers of Excellence 3,000,000 4,950,000 1,950,000
------------------------------------------------------------------------
Gulf Coast market survey 196,659 0 -196,659
------------------------------------------------------------------------
Vet Center staff enhancement 3,379,923 10,531,046 7,151,123
------------------------------------------------------------------------
TBI Transitional Housing 2,500,000 5,000,000 2,500,000
------------------------------------------------------------------------
Other activities including
training in evidence-
based psychotherapy 4,849,541 3,109,167 -1,740,374
------------------------------------------------------------------------
TOTAL 306,110,000 360,000,000 53,890,000
------------------------------------------------------------------------
Question 4(b): Although your budget states that you are spending $3
billion on mental health, is this enough to meet the needs of veterans?
In what areas, given additional resources, do you believe the VA should
be doing more?
Response: The total budget of $3 billion is adequate both to meet
the needs of returning veterans and those from prior eras. It will
allow expansion of access for veterans entering the VA, and expansion
of programs for veterans from prior eras. One area in which VA could be
doing more is in working with families of veterans with mental health
problems. It would be useful for VA mental health providers to work
with families, even before the veteran came to VA for care. Providers
could meet with families, help to evaluate symptoms they report,
educate them about care needs and available resources, counsel them
about how to manage symptoms, and collaborate with them to get the
veteran into treatment. VA does provide bereavement counseling to
families of servicemembers killed in action.
Questions from Hon. John Salazar to Hon. R. James Nicholson, Secretary,
U.S. Department of Veterans Affairs
Question 1: Mr. Secretary, I represent Colorado's 3rd Congressional
District.
Colorado's 3rd makes up over 50 percent of the State of Colorado.
Much of which is rural.
There are approximately 75,000 veterans that live in my district.
Many of these veterans must travel as much as 5 hours through winding
mountain roads to reach the VA Center in Denver. Can you tell me how
you plan to address the issue of access to healthcare services for our
veterans living in rural areas and can you please tell me the status of
the CBOC proposed for Craig, Colorado?
Response: VA plans to establish an outreach clinic in the Craig,
Colorado area this fiscal year. An Outreach Clinic is a part-time, VA-
staffed clinic that will provide access to healthcare services for
veterans living in rural Colorado.
Question 2: In the past, you have opposed allowing VA to contract
for services in rural areas. Do you plan to oppose similar legislation
if it's introduced again and why?
Response: VA contracts for services on a case by case basis in
rural (and urban) settings when VA does not have the capability,
capacity, or expertise to provide the necessary service within a
defined service area. VA also has contracted for care for extraordinary
hardship or humanitarian reasons. VA does not support a general policy
of contracting out all care for patients in rural settings.
Questions from Hon. Steve Buyer, Ranking Republican Member,
Committee on Veterans' Affairs, to Hon. R. James Nicholson, Secretary,
U.S. Department of Veterans Affairs
Committee on Veterans' Affairs
Washington, DC
February 20, 2007
Honorable R. James Nicholson
Secretary
Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420
Dear Mr. Secretary:
In reference to our Committee hearing of February 8, 2007, I would
appreciate your response to the enclosed additional questions for the
record by close of business Wednesday, March 14, 2007.
It would be appreciated if you could provide your answers
consecutively on letter size paper, single spaced. Please restate the
question in its entirety before providing the answer.
Thank you for your cooperation in this matter.
Sincerely,
Steve Buyer
Ranking Republican Member
Question 1: In January, the House passed H.R. 4, which would
eliminate the prohibition on the Department of Health and Human
Services (HHS) from interfering in setting prescription drug prices and
require HHS to negotiate prices charged under Medicare prescription
drug plans. What impact would this change in law have on VA's ability
to negotiate favorable discounts from pharmaceutical companies and VA's
prescription drug costs?
Response: H.R. 4 amends the Medicare Modernization Act by removing
the noninterference language which prevents the Secretary of the
Department of Health and Human Services (HHS) from negotiating drug
prices directly with pharmaceutical manufacturers and by requiring
semi-annual reports to Congress on the impact of the negotiations. H.R.
4 does not permit HHS to establish drug formularies as a negotiation
tool.
H.R. 4 itself, as currently proposed, is likely to have no negative
financial impact on the Department of Veterans Affairs (VA) drug
procurement costs because it does not reference in any way section 603
of Public Law (P.L.) 102-585 which gives VA a 24 percent discount off
commercial drug prices.
Question 2: In recent years, VA has experienced significant cost
escalation in the construction of medical facilities. For example, the
estimate for the construction of a new medical facility in Denver has
almost doubled, now topping over $646 million.
Question 2(a): What are the causes for these increases?
Response: The Department, along with other government agencies and
private sector businesses and individuals, is experiencing a
significant growth in the cost of construction as a result of the
booming construction economy worldwide. The significant demand for
contractors, labor and building materials has produced significant
increases in pricing. This has been further exacerbated by higher
petroleum prices on both petroleum based building products and fuel as
well as construction related impacts of the hurricanes of 2004 and 2005
including Katrina.
Question 2(b): What steps has VA taken to prevent such escalation
in the future?
Response: In order to position the Department to best deal with
this situation, VA has taken several steps. These include developing a
more detailed market analysis of individual geographic location to
ensure the best available information is used when establishing the
escalation rates to be used in the cost estimate. There is
consideration to market timing to the extent practical in order to bid
the project at a time when there is the best opportunity to have the
greatest competition by the contracting community. VA has also begun to
employ more extensive preplanning before a project is placed in the
budget to be sure that all issues relating to scope, building systems,
and constructability have been identified and their costs identified.
Question 2(c): What is the status of a possible collaborative
arrangement in Denver between VA and 000 or the University of Colorado?
Response: The University of Colorado Hospital has completed its
plan for build-out for the Fitzsimons Campus. Sharing of space with VA
is not included in their build-out plans. The possible areas for short
term clinical collaboration remain much the same as they currently
exist: buying and selling of services between the facilities. Once VA
has relocated to the Fitzsimons Campus, other opportunities might arise
for the buying and selling of services related to high technology
equipment, specialized laboratory tests, and specialized patient
treatments.
The Department of Defense (DoD) has renewed its interest in sharing
in the Denver VA facility replacement project and that option is being
explored. The project initially included outpatient and administrative
space for DoD that would be constructed by VA and then leased by DoD.
The need for inpatient care was addressed by additional hospital beds
that would be used to care for DoD patients. VA would charge DoD for
inpatient care at a reduced cost. This option remains viable today but
would increase the square footage and the cost of the current project.
Question 3: In 2004, the Secretary agreed with the CARES
Commission's recommendation that a new medical facility was needed in
Orlando. However, almost 3 years later, this project has not advanced.
Question 3(a): When will the site for the new Orlando facility be
identified? (Originally, the site was scheduled to be identified last
summer.)
Response: The Secretary announced on March 1, 2007, the selection
of Lake Nona as the site for the new Orlando facility.
Question 3(b): What is the cause for delay?
Response: A number of actions have taken place since the decision
was made to construct a new VA medical center in Orlando. These have
included:
a study to determine whether the site of the existing
clinic would be adequate to support a new medical center (it was
determined that a new site was required);
appointment of a site selection board by the Secretary to
recommend the best site for the new medical center;
advertisement for new sites;
a comprehensive technical evaluation of proposed sites;
a public hearing with veterans and other stakeholders;
an environmental assessment of the two preferred sites:
Lake Nona and International Corporate Park; and
publication of a finding of no significant impact (FONSI)
and notice of availability.
These many actions were required to assure the best site was
selected for the new Orlando medical center, and to satisfy Federal
land acquisition requirements.
Question 3(c): How will this impact the cost of and time table for
constructing a new facility?
Response: As site selection was underway, VA also contracted for
preliminary studies and schematic design. As a result preliminary
studies, work on schematic design, and studies to define space
requirements are underway. By performing site selection and schematic
design concurrently, VA has minimized the impact on cost and time for
the project.
Question 4: VA was required to submit to Congress a master plan for
the West Los Angeles campus in 1998. To date, a master plan has not
been submitted.
Response: To comply with section 707 of the Veterans Programs
Enhancement Act of 1998 (P.L. 105-368), a 25 year master plan was
developed for the West Los Angeles campus in April 2001. The master
plan was completed and involved public meetings and the formation of a
land use action committee. The master plan also included an
environmental assessment. The master plan was shelved due to
overwhelming public comments against the plan. Numerous letters were
written opposing adoption of the proposed master plan.
Question 4(a): What is the cause for the delay in developing a
master plan for West Los Angeles?
Response: After the 2001 master plan was shelved, the decision was
made to develop a master plan as part of the Capital Asset Realignment
for Enhanced Services (CARES) initiative. The CARES initiative would
set some of the parameters about functions and probable locations of
healthcare facilities on the campus that could be used to develop a new
master plan. This approach seemed to fit best with the overall intent
of CARES, which is to determine the best use of VA's assets and the
best configuration of these assets. Once these decisions on assets are
made, the local communities can interact with VA through publicly held
CARES local advisory panel meetings.
Question 4(b): When do you expect to issue a final decision on the
options for reusing excess land at West Los Angeles?
Response: The final Stage 2 CARES Report for West Los Angeles will
be completed in July 2007. It will provide information to the Secretary
on the advantages and disadvantages of each option selected for
detailed study.
Question 5: As part of the President's Management Agenda, the
Executive Brand Management Scorecard is used to track how well agencies
are executing governmentwide initiatives. VA achieved ``green'' status
on the scorecard for the Federal Government's real property initiative
in 2006. What is VA doing to maintain this ``green'' status?
Response: VA continues to move forward aggressively on the Federal
Government's real property initiative with a true capital investment
life cycle approach. Real property is managed from planning/investment
through performance monitoring and disposal.
Planning/Investment
The Department will continue to work toward achieving the goals,
objectives, and milestones laid out in the VA Asset Management Plan, 5-
Year Capital Plan, disposal plans, and sustainment model (used to
maintain VA infrastructure at the current level). Development will
continue through (1) implementation of VA's CARES program and (2) focus
on deferred maintenance.
CARES Implementation Status
A total of 36 CARES projects are in process. One project, an
enhanced-use lease in Chicago, is complete. Two projects are new; the
status of the remaining 33 is as follows:
Construction documents prepared--6
Construction begun--14
Schematics/design development in process--13
Eighteen sites were selected for further independent study. The
one in Gulfport has been eliminated due to its loss during Hurricane
Katrina.
CARES Business Plan Studies
Along with previous CARES projects selected in FY 2006 and FY 2007
for implementation, there are a number of sites where further study is
required to determine suitability for future healthcare and re-use
activities. These studies will include evaluating outstanding
healthcare issues to recommend healthcare delivery options, developing
capital plans, as well as determining the highest and best use for
unneeded VA property. Completion of the studies going into more
detailed analyses (Stage 2) is anticipated by the end of 2007.
Firms have been awarded the contract to assist the Secretary in
reaching final healthcare decisions and re-use options. CARES planning
data have been updated with FY 2003 actual use and refinement in
planning assumptions for categories of care, including long-term and
mental healthcare. This improved data will be utilized in the
validation of construction plans and the annual strategic planning
process.
The following table identifies the locations being studied and
their current status:
----------------------------------------------------------------------------------------------------------------
Health Care, Capital Plan and Re-Use Studies Comprehensive Capital Plan and Re-Use Studies
----------------------------------------------------------------------------------------------------------------
Study current in Stage 2: Study pending Stage 1 decision:
Boston, MA West Los Angeles, CA
Completed studies: Studies currently in Stage 2:
New York--Reject consolidation of 2 VA Canadaigua, NY
medical centers Lexington, KY
Louisville, KY--Study validated need for Livermore, CA
replacement hospital Montrose/Castle Point, NY
Big Spring, TX--Keep existing service in
Big Spring; use Planning process to Completed studies:
explore contracting and/or expansion in
market including domiciliary White City, OR--Construct new
Walla Walla, WA--Construct new ambu- domiciliary
latory care center contract inpatient care St. Albans--Replace existing
facilities
in capital planning process with nursing home outpatient clinics and
Montgomery, AL--Maintain inpatient domiciliary; VA to develop capital plan
services; major modernization for new construction on site and a re-use
Waco, TX--Retain all current services plan for the campus
Muskogee, OK--Keep facility and imple- Perry Point, MD--Upgrade entire
ment increase in psychiatric beds campus, continue and complete re-use
plan.
Removed from the study due to damage from
Hurricane Katrina:
Gulfport, MS
----------------------------------------------------------------------------------------------------------------
Financial Analysis Study
Poplar Bluff--Keep facility; is cost effective to provide inpatient care
----------------------------------------------------------------------------------------------------------------
At Walla Walla, St. Albans, Louisville, Perry Point and Montgomery
VA medical centers (VAMC), capital investment proposals were developed
for consideration in the next (FY 2009-2014) 5-year capital plan. For
the new Louisville VAMC, a site selection committee has been
established by the Under Secretary for Health.
The Secretary decided to retain all current services at Waco,
Texas, and establish a center of excellence for post-traumatic stress
disorder as part of VA's internal planning process. Waco will also
pursue reuse of vacant buildings and land through VA's enhanced-use
lease program.
The Secretary directed the VAMC in Walla Walla, Washington, to use
existing contracting authority to provide inpatient and nursing home
care and to explore partnerships and other opportunities to better use
the historic campus.
In White City, Oregon, the Secretary directed that a capital plan
be developed that (1) combines new construction and renovation; (2)
replaces several domiciliary buildings through new construction; and
(3) expands ambulatory specialties and outpatient mental health
services. The master plan is also to consider enhanced-use leasing
opportunities, which are currently being reviewed by the ``reuse''
contractor under Phase 3 reuse/redevelopment. For St. Albans, New York,
the Secretary directed that a capital plan for new construction be
developed for a new nursing home, domiciliary and outpatient clinic.
The VAMC is leading the effort, designing the new medical components of
the campus, and the reuse contractor has developed the Phase 3 Reuse/
Redevelopment report.
Deferred Maintenance
VA will continue to fund construction to upgrade and replace
existing facilities and fund repairs needed to improve VA-owned
buildings.
Performance Monitoring
VA will continue to integrate its efforts on real property with
VA's energy program. Real property management focuses on the inventory
of assets, their mission alignment, use, condition and cost. The energy
program is implementing metering, energy sustainability and a renewable
program. Goals include reducing energy use in both existing and planned
buildings, and increasing the use of renewable energy as a percent of
facility electricity use. These programs are mutually supportive and
together provide a global strategy for improved real property
performance management.
VA will continue to monitor real property performance in each of
the areas noted above, reporting to the Office of Management and Budget
(OMB) and VA Management Performance Review Board. Analysis will be
conducted and actions identified for improved performance.
Disposal and Enhanced Use Leases
Lastly, VA will continue to use disposal and enhanced use lease
(EUL) authority to relieve the Department of its responsibility for non
mission-dependent, underused and vacant space. In FY 2006, VA was no
longer responsible for 77 buildings. VA used the following methods to
transfer responsibility: 6 buildings via sales, 19 buildings via
demolition, and 52 buildings via enhanced-use lease. In FY 2007, 4
buildings (18,000 square feet) have been disposed of; an additional 99
buildings (including Gulfport and Marlin) and over 2.2 million gross
square feet are planned for disposal or EUL by the end of the year.
Question 6: To your knowledge, are you or the Under Secretary for
Health or any of your staff pursuing a proposal to standardize self
monitoring blood glucose supplies and equipment at this time? Is the
Department continuing to pursue a proposal to standardize self
monitoring blood glucose equipment through a single national contract,
even though the FY 2006 VA Appropriations Act specifically prohibits VA
from replacing the current system by which VISNs select and contract
for blood glucose testing supplies and monitoring equipment?
Response: VA, to include the Secretary, Under Secretary for Health
or any of the staff, is not pursuing a national proposal to standardize
self monitoring blood glucose (SMBG) supplies and equipment at this
time. The Military Quality of Life and Veterans Affairs and Related
Agencies Appropriations Act of 2006 prohibits VA from pursuing new
contracts. Specifically, section 220 ``prohibits the expenditure of any
funds available to the Department on implementation of a national
standardization contract for diabetes monitoring systems.''
Decisions on which SMBG products are offered to veterans cannot be
made at the national level and now must be made at the Veterans
Integrated Service Network (VISN) level.
Question 7: I understand that in March of 2006, the Deputy Under
Secretary of Health for Operations and Management sent a memo to the
VISN directors notifying them of enacted legislation prohibiting VA
from replacing the current system by which VISNs select and contract
for blood glucose testing supplies and monitoring equipment. However,
it has been reported that some VISN directors are continuing to prepare
for a national standardization of diabetes monitoring supplies and
equipment. Are you aware of any correspondence to the VISN directors on
this topic since last year?
Response: The memo entitled ``Termination of Proposal to
Standardize Blood Glucose Devices'' dated March 17, 2006 is still in
effect. No other direction has been given to the field to reverse or
change this memorandum. VISN field sites continue to use VISN
procedures to select and contract for these supplies and equipment.
Question 8: I understand that notwithstanding Congressional actions
that prohibit VA from moving forward with the standardization of blood
glucose testing supplies, vendor competition has produced VA savings on
the purchase of such supplies. Please provide me with VA's purchasing
costs for blood glucose testing supplies and the annual savings the
Department has achieved since September 2005?
Response: Vendor competition has not produced meaningful savings on
blood glucose testing supplies. With the exception of a $0.01 price
reduction for one low volume blood glucose testing strip, VA's unit
prices have remained unchanged for the period September 2005 through
December 2006. VA's expenditures during this time period were
$77,346,967. Without the $0.01 reduction, VA's costs would have been
$77,440,347. Therefore, VA saved a modest $93,380 (0.1 percent) from
the price reduction from September 2005 through December 2006.
Questions from Hon. Henry E. Brown, Jr. to Hon. R. James Nicholson,
Secretary, U.S. Department of Veterans Affairs
Question 1: Mr. Secretary, you budget request $40 million for
advance planning under the Veterans Health Administration. Can you
provide a breakdown of where the Department plans to dedicate those
funds?
Response: The FY 2008 advance planning funds will be used for
several purposes including the early planning and design of projects
expected to be included in the FY 2009 budget, support for the VISNs in
developing the project capital asset applications for the FY 2010
projects, development of space and design standards, environmental and
other studies, as well as supporting our ongoing CARES projects design.
Question 2: Mr. Secretary, I have reviewed the Department's 5-year
capital plan and find only one mention, in passing, of the joint-use
advanced planning at Johnson VAMC in Charleston. Is this because the VA
was only authorized to conduct planning activities at the end of the
109th Congress, or are there additional reasons why this
important project was not included in the Department's 5-year plan or
budget request?
Response: The $36.8 million intended for advanced planning funds
were authorized at the end of the 109th Congress, but not
appropriated. The Veterans Health Administration (VHA) has many major
construction projects that are identified in our 5-year capital plan
that have a higher priority, based on significant safety and
environmental quality concerns, for funding at this time.
Question 3: Outside of the absence of advance planning for
Charleston in this year's budget, are you continuing to support
development of that project, and who are the new national VA leaders
from VHA who are leading the effort for VA?
Response: Replacement of the Ralph H. Johnson VA Medical Center in
Charleston, SC is an undertaking that has a competitive disadvantage
when viewed with the other major construction priorities of VA at this
time. The Medical Center Director at Charleston, and the President of
Medical University of South Carolina (MUSC), will continue to lead a
local group who will explore collaboration options in Charleston
between VA and MUSC.
Question 4: Mr. Secretary, I understand that you have recently made
favorable comments about the innovative plan for increased VA and
university collaboration/integration being developed at Charleston
between the Johnson VAMC and the Medical University of South Carolina.
If Congress appropriates the funds to proceed with planning as
authorized under last year's VA Authorization bill, will you proceed
aggressively with that planning, given that Charleston is at high risk
for hurricane damage? Can we make progress fast enough to avoid a New
Orleans/Katrina-like catastrophe in Charleston?
Response: VA and MUSC have long enjoyed a productive and mutually
beneficial affiliation. The local group headed by the Medical Center
Director and the President of MUSC, will continue to explore
collaboration opportunities between VA and MUSC. An example of this
collaboration is the procurement of high cost medical equipment.
Contracts for these arrangements are very close to being signed, and VA
is poised to procure the equipment. VA will purchase the equipment and
it will be placed in MUSC facilities. In return, veterans will receive
free or significantly discounted clinical services up to the purchase
price of the equipment. Veterans and the citizens of South Carolina
will both benefit from this arrangement.
Normally to deal with hurricanes, VA's policy is to harden, or
hurricane strengthen. A VA study showed we would not need a new
facility to do this, and the Johnson VAMC meets current hurricane
structural standards. We still believe the priorities outlined in the
President's Budget should be enacted into law. If, however, Congress
funds a project not in the President's Budget and the President signs
the bill into law, this would be considered direction and we would
proceed. In such a scenario, where it would rise to a top priority, it
is projected that it would take 5 to 6 years to build a hurricane-
strengthened facility.
Questions from Congressman Gus M. Bilirakis to Hon. R. James Nicholson,
Secretary, U.S. Department of Veterans Affairs
Tampa Parking Situation:
The James Haley VA Medical Center (VAMC) in Tampa, Florida is one
of the busiest, if not the busiest, medical centers in the country.
Parking is a critical issue at the facility. Veterans complain about
having to drive around for long periods of time looking for an
available parking space. This issue has been highlighted in numerous
paper stories in my local papers.
Question 1: As part of the Fiscal Year 2007 budget submission, the
Department included a project to ``improve patient parking'' at the
Tampa VAMC as a potential future construction project. What is the
status of this proposed project?
Response: The 2007 Construction Budget Submission (5-Year Capital
Plan) identified an effort to improve patient parking at the Tampa
VAMC. Toward that end, VISN 8 submitted a major construction proposal
for FY 2008 to expand the Tampa polytrauma unit that included a parking
garage to increase access for these patients and relieve parking
congestion at Tampa. While the project scored high, it was not funded
due to other priorities ahead of it.
VA is presently going through the major project application review
and scoring cycle for the FY 2009 budget. The Tampa proposal, for
polytrauma unit expansion to include a parking garage, has been revised
and resubmitted as part of the FY 2009 budget planning cycle. It is
currently going through the validity review process where it will again
be scored to determine its standing in VHA's national prioritization
list for FY 2009 major construction funding cycle.
Question 2: What is the Department doing to address the parking in
the interim?
Response: The medical center currently leases parking spaces at a
nearby mall and operates continuous shuttles for patients, visitors,
and employees from approximately 6 a.m. to 9 p.m. Additionally, they
participate in the North Tampa Transportation Initiative, which
supports van pooling and public transportation. Through this
initiative, they have established 10 van pools, thereby reducing the
number of parking spaces needed for employees by 51. An additional
acquisition proposed for FY 2007, is the Alpha property (3.6 acres)
across the street from the Tampa VAMC, which will produce approximately
650 parking spaces. A station level project will be required to address
necessary grading and drainage of the property before parking can
commence. The project to purchase this property is on the FY 2007 list
for funding.
PVA Land Purchase:
Question 3: The Tampa VA is also in the process of purchasing some
land near the facility from a local Paralyzed Veterans of America (PVA)
chapter. I've been told that the sale is just awaiting your signature
to be finalized. When do you anticipate signing the approval papers?
Response: The Secretary has approved the purchase and the offer to
sell has been accepted, VA closed on March 12.
Coming Home to Work Program:
Question 4: One issue that I am particularly interested in is
helping our servicemembers returning from Operation Iraqi Freedom and
Operation Enduring Freedom transition back into civilian life. Your
testimony highlights the VA's ``Coming Home to Work'' initiative. How
many veterans have taken advantage of this program?
Response: Information for FY 2007 through the end of January shows
that:
16 service members are participating in active work
experience programs with Federal agencies while awaiting discharge or
return to duty orders;
121 service members are receiving early intervention
services in preparation for work experience programs, including
vocational counseling, testing, and administrative support necessary
for successful placement in a work experience program;
108 veterans participating in the ``Coming Home to Work''
(CHTW) program at a military treatment facility were referred to their
local regional office for continuation of Vocational Rehabilitation and
Employment (VR&E) services;
24 service members have returned to active duty following
early intervention services; and
7 veterans have been hired directly by their work
experience employers upon discharge from active duty.
Questions from Hon. John Boozman, Ranking Republican Member,
Subcommittee on Economic Opportunity, to Hon. R. James Nicholson,
Secretary, U.S. Department of Veterans Affairs
Question 1: The Budget shows education performance goals as 25 and
12 days for original and supplemental claims respectively and
translates to reductions of 37.5% and 31%, based on the latest FY 2007
performance reports. How do you propose to accomplish these very
significant reductions with only 12 additional direct FTE and
anticipated increase of claims by about 33,000?
Response: We expect to make substantial progress toward these FY
2008 goals by the end of FY 2007. In the first 5 months of FY 2007, we
have reduced the average age of pending original claims by 30 percent,
and the average age of supplemental claims by 39 percent. Our current
targets for the end of FY 2007 are 35 days to process original claims
and 15 days to process supplemental claims, leaving reductions of 10
days for original claims and 3 days for supplemental claims to be
achieved in FY 2008. In FY 2003, with similar resources, we achieved
similar reductions: from 34 days to 23 days for original claims, and
from 16 days to 12 days for supplemental claims.
Question 2: In addition to having sufficient staff to meet
performance goals, it is necessary to distribute those resources
properly throughout the system. For example, there is significant
difference in the time to determine eligibility for the voc rehab
program ranging from about a month in San Diego to about 4 months here
in DC, with other stations being only slightly more timely than the DC
office. Several weeks ago, the staff asked for a report comparing the
percentage of national workload and direct staff for each business line
in each regional office. When do you anticipate we will receive that
report?
Response: One of the largest influences on timeliness of vocational
rehabilitation and employment (VR&E) is the variance of services
provided to service members and veterans at each regional office (RO).
The San Diego RO and the Washington RO are good examples of how
timeliness is affected due to the nature and scope of individualized
services provided at each station. For example, San Diego supports an
extensive Disabled Transition Assistance Program (DTAP), which is a key
element in receiving completed claims with assigned disability ratings.
Rapid claims processing through DTAP enables the San Diego VR&E office
to provide immediate case management services to applicants of the
program. Both organizations support their diversified case management
needs by using a balance of vocational rehabilitation counselors and
contractors.
The attached spreadsheet compares the percentage of the national
workload and direct staff for each business line in each regional
office. The following information will further clarify the employee
distribution for the compensation and pension programs.
The compensation and pension resource allocation model is based on
four factors: (1) receipts of incoming work, (2) appellate work, (3)
accuracy, and (4) timeliness. Receipt of incoming work is given the
greatest weight as the single most important factor driving staffing
requirements. Receipts include the rating workload shown on the
attached spreadsheet as well as the non-rating workload (income and
dependency adjustments, burial claims, etc.), public contact and
outreach activities, and work performed by the fiduciary staff.
Factoring in accuracy and timeliness ensures that staffing decisions
are based on both output and quality. To minimize large variations in
staffing allocations from year to year, the model uses a 2-year average
for each of these factors.
Adjustments are made to the allocations developed by the model for
special missions assigned to many of our ROs. The attached spreadsheet
shows that compensation and pension staffing for FY 2006 was 7,377 full
time employees (FTE). Of these, 431 FTE (6 percent) were allocated to
stations with special claims processing missions. The largest segment
of special mission staffing supports workload ``brokering.'' Cases are
sent from offices with high inventories to one of 12 ROs staffed with a
resource center to assist other ROs in developing and/or rating
``brokered'' claims. These resource centers and the ``brokering''
strategy help to balance workload and staffing across all ROs.
Beginning in 2006, rating work for Benefits Delivery at Discharge
(BOD) claims was consolidated at the Salt Lake City and Winston-Salem
ROs. There are currently 136 employees at Winston-Salem and Salt Lake
City processing only BOD claims. Other consolidations of claims
processing and related functions include, radiation exposure claims to
Jackson; claims from residents of Mexico to Houston; foreign claims to
Pittsburgh; and the Special Issues Helpline at St. Louis.
Pension Maintenance Centers in Philadelphia, St. Paul, and
Milwaukee are allocated a combined total of 448 employees to process
pension maintenance actions, such as income and dependency adjustments.
On the spreadsheet, these resources are shown under the heading of
``Pension'' and are not included in the totals under the heading
``Compensation.''
The ``FY2007 Dee'' columns for FTE on the spreadsheet show the
actual number of personnel on hand at each station. Most regional
offices have hired subsequent to that date and are continuing to
recruit additional claims processors and support personnel.
Question 3: What is the level of funding proposed for The Expert
Education System (TEES), and what major milestones will that funding
accomplish, and when do you anticipate that application coming online,
and what will be the total cost to develop and field that system?
Response: The Expert Education System (TEES) comprises a suite of
business applications engineered with a common architecture that work
synergistically to achieve the goal of automated processing of
education benefit claims with minimal human intervention. TEES
incrementally delivers business improvements that will enable VA to
provide educational benefits to veterans in a more timely and efficient
manner. TEES will be accomplished in two distinct phases.
The first phase comprises near-term delivery of business
applications to replace aging stand-alone applications. This strategy
enables VA to quickly target critical business functionality.
The focus of phase two will be the development and deployment of
the new education rules-based automated eligibility and award
processing system. Incorporating rules-based technology will ensure
consistency and accuracy of decisions rendered. The following are major
milestones and associated levels of funding for TEES:
----------------------------------------------------------------------------------------------------------------
FY 2008
Description Projected Funding
Duration (Millions)
----------------------------------------------------------------------------------------------------------------
Phase I
----------------------------------------------------------------------------------------------------
Business Assess the continued development of TEES, 07/07-10/07
Assessment including reviewing the potential for
integration with the Financial Award
Processing System (FAS).
----------------------------------------------------------------------------------------------------
Requirements Gather and define business requirements 08/07-01/08
Definition associated with ECAP, Chapter 30 PC and
Workstudy.
----------------------------------------------------------------------------------------------------------------
Design and Build Design and build ECAP, Chapter 30 PC and 10/07-09/08 $2.5
Workstudy.
----------------------------------------------------------------------------------------------------------------
Test and Certify Test and certify the ECAP, Chapter 30 PC and 01/08-10/08 $0.5
Workstudy applications.
----------------------------------------------------------------------------------------------------------------
Implementation Deploy ECAP, Chapter 30 PC and Workstudy to 04/08-12/08 $0.5
Regional Processing Offices.
----------------------------------------------------------------------------------------------------------------
Phase 2
----------------------------------------------------------------------------------------------------
Requirements Gather and define business requirements 07/07-09/08
Definition for building a new rules-based automated
eligibility and award processing system.
----------------------------------------------------------------------------------------------------
Data Conversion Convert legacy Educational data and 10/08-09/11
incorporating it into the new Education
System.
----------------------------------------------------------------------------------------------------
Design and Build Design and build the new rules-based 10/08-09/11
automated eligibility and award processing
system.
----------------------------------------------------------------------------------------------------
Test and Certify Test and certify the new rules-based 10/08-09/11
automated eligibility and award processing
system.
----------------------------------------------------------------------------------------------------
Implementation Deployment of the new rules-based automated 10/08-09/11
eligibility and award processing system.
----------------------------------------------------------------------------------------------------------------
FY 2008 Total $3.5
----------------------------------------------------------------------------------------------------------------
Question 4: VA projects a 2.5% increase in Voc Rehab workload and
is requesting about 40 additional staff to bring the total VR&E staff
to 1,260 to meet that increase. The Independent Budget suggests you
will need 1,375 FTE. First how do you estimate the workload increase?
Second, what positions will the new FTE fill? And third, what will be
the average caseload for your direct service staff at that manning
level?
Response: The workload for the Vocational Rehabilitation &
Employment (VR&E) program, which dictates staffing levels, is projected
to increase based on factors such as the Global War on Terrorism, the
economy, and the processing rate of claims. The national workload at
the beginning of FY 2007 was 89,126, with 621 counselors. This yields
an average caseload per counselor of 144. VR&E service estimates the
workload for FY 2008 will increase to 93,865 cases. To manage the
increase in workload, the FY 2008 budget submission includes an
additional 59 FTE, including 5 contract specialists, 5 employment
coordinators, 4 FTE to support the new FY 2008 process consolidation
initiative, and 45 vocational rehabilitation counselors (VRCs). VR&E
service recommends that the ROs with the highest workload to counselor
ratios be allocated the majority of the additional VRCs. This would
balance the caseload ratio at each RO and bring the average caseload
per counselor to 141. VR&E service uses contract professionals to meet
the needs of variances in caseloads. Contract professionals augment
VR&E staff by conducting initial evaluations, program case management,
and job readiness and employment services.
Question 5: VA has had significant problems fielding new computer
systems to support the Department's missions. To this point, the
Veterans Affairs Committee has given VA a relatively free hand in
developing and fielding new systems. I believe it is time that we do an
annual authorization of VA IT programs just as we do for construction.
What is The Department's position on an annual authorization for IT
systems?
Response: Committee on Veterans' Affairs has encouraged the
Department over the past year to centralize the management of
information technology (IT). The VA Chief Information Officer (CIO) now
has control over the development of IT systems and solutions, and has
begun to implement rigorous standards and processes for articulating IT
needs and managing IT development projects. These process improvements
will result in outcome improvements in the delivery and fielding of IT
solutions. IT is a demanding and challenging environment. As such, the
VA CIO needs flexibility to meet rapidly changing requirements as well
as respond to unforeseen circumstances. VA does not believe use of an
annual authorization process will lead to better planning and execution
of IT efforts. VA would look forward to in-depth discussions during the
year with Members and staff on the direction and challenges VA is
facing with critical projects. VA believes this would better serve the
development and implementation of the necessary IT systems to support
delivery of services to the Nation's veterans. This would ensure an
ever changing environment that the VA CIO would have the flexibility to
address issues within programs.
Question 6: How many veterans are currently waiting to enter the
Independent Living program? If Congress removed the 2,500 limitation on
new entrants into the independent living, how many additional FTE and
other costs would be needed?
Response: No veterans are currently waiting to enter the
Independent Living (IL) program. The count of veterans who have entered
the program begins on the first day of each fiscal year. Action must
usually be taken in early August to prevent exceeding the statutory
limit of 2,500 new cases. From then until the end of the fiscal year on
September 30, veterans may experience a delay in entering the program.
VR&E anticipates that there will be a steady increase of new IL
cases over the next 10 years based on historical data and the need for
increased IL by Operation Enduring Freedom/Operation Iraqi Freedom
(OEF/OIF) veterans. It is anticipated that the steady increase will
occur given that disabilities worsen over time and the need for IL may
arise several years after discharge.
The following table provides a 10-year projection of the number of
cases over the 2,500 cap for each year, the costs associated with the
extra cases, and the FTE needed over the current staffing level.
The first year cost is $2,095,500. The cost over 5 years is
$26,598,145. The 10-year cost is $76,765,365. We estimate that there
will be a growth rate of 10 percent in 2008 and 2009, and that this
rate will diminish to 5 percent in 2010 and reach a normal growth rate
of around 2 percent beginning in 2011, assuming that the OEF/OIF
conflicts have ended.
----------------------------------------------------------------------------------------------------------------
$ Increase over FTE Increase over
Fiscal Year # Above Limit Current Limit* Current Staffing**
----------------------------------------------------------------------------------------------------------------
2008 250 2,095,500 5
----------------------------------------------------------------------------------------------------------------
2009 525 4,505,025 11
----------------------------------------------------------------------------------------------------------------
2010 676 5,940,012 14
----------------------------------------------------------------------------------------------------------------
2011 739 6,649,552 15
----------------------------------------------------------------------------------------------------------------
2012 804 7,408,056 16
----------------------------------------------------------------------------------------------------------------
2013 870 8,216,280 17
----------------------------------------------------------------------------------------------------------------
2014 937 9,070,160 19
----------------------------------------------------------------------------------------------------------------
2015 1,006 9,981,532 20
----------------------------------------------------------------------------------------------------------------
2016 1,076 10,942,920 22
----------------------------------------------------------------------------------------------------------------
2017 1,147 11,956,328 23
----------------------------------------------------------------------------------------------------------------
* An economic assumption for the President's budget cost-of-living increase was used in the calculations for FY
2008 through 2017.
** Assuming caseloads of 50 IL-only cases per counselor, rounded to whole FTE.
Question 7: Much is made about the backlog in disability claims.
Would you describe for the Members what happens to a cohort of 1,000
claims as they work through the system from the regional office to the
Court of Appeals for Veterans claims?
Response:
Rating Process
When a veteran submits a claim, a claim file is established or
requested from storage and the file is placed under control. The
Veterans Claims Assistance Act (VCAA) requires VA to provide written
notice to claimants of the evidence required to substantiate a claim
and of which party (VA or the claimant) is responsible for acquiring
that evidence. Under VCAA, VA's duty to assist the claimant in
perfecting and successfully prosecuting his or her claim extends to
obtaining government and private records, and obtaining all necessary
medical examinations and medical opinions. The claimant has 60 days to
respond to VA's request for information or submit substantiating
evidence. As a claim progresses, additional notifications to the
veteran may be required. After the evidence is received or after all
notice periods have ended, the claim and evidence are reviewed. A
rating decision is then prepared and the award or denial is processed.
Appeal Process
Veterans can appeal decisions denying service connection for any
conditions claimed. They may also appeal the effective date of an award
and the evaluation assigned to a disability. An appeal is initiated
when the veteran files a Notice of Disagreement (NOD). Approximately 13
percent of all rating decisions result in an NOD. For every 1,000
rating decisions, 130 veterans on average would file a notice of
disagreement.
If the appeal cannot be resolved at the regional office, VA issues
a Statement of the Case (SaC). The veteran may then perfect the appeal
and have it sent to the Board of Veterans' Appeals (Board) by filing a
VA Form 9. About 50 percent of veterans who initially file an NOD
formalize an appeal. This means around 65 of the 130 veterans appeal to
the Board.
If the veteran submits new evidence that does not resolve the
appeal, VA will issue a Supplemental Statement of the Case (SSOC).
After the regional office issues an SSOC, the claims file is reviewed
for completeness and is certified as ready for the Board. The regional
office then transfers the record to the Board. The Board reviews the
appeal and decides to grant the appeal, deny the appeal, or remand the
appeal to the regional office or the Appeals Management Center for
additional development and processing.
If the veteran disagrees with the Board's decision, he or she has
120 days from the date of the final Board decision to file an appeal to
the Court of Appeals for Veterans Claims (CAVC). The CAVC may grant,
deny, dismiss, or remand the appeal. Less than 1 percent of all
regional office decisions are appealed to the CAVC.
Growth of Disability Claims Workload
The number of veterans filing initial disability compensation
claims and claims for increased benefits has increased every year since
FY 2000. Disability claims from veterans of all periods increased from
578,773 in FY 2000 to 806,382 in FY 2006. For FY 2006 alone, this
represents an increase of nearly 228,000 claims or 38 percent over the
2000 base year.
The primary factors leading to the sustained high levels of claims
activity are: Operation Enduring Freedom/Operation Iraqi Freedom (OEF/
OIF); more beneficiaries on the rolls, with resulting additional claims
for increased benefits; improved and expanded outreach to active-duty
service members, guard and reserve personnel, survivors, and veterans
of earlier conflicts; and implementation of combat related special
compensation (CRSC) and concurrent disability and retired pay (CDRP)
programs by the Department of Defense (DoD).
The number of veterans receiving compensation has increased by
almost 400,000 since 2000--from just over 2.3 million veterans to
nearly 2.7 million in 2006. This increased number of compensation
recipients, many of whom suffer from chronic progressive disabilities
such as diabetes, mental illness, and cardiovascular disabilities, will
continue to stimulate more claims for increased benefits in the coming
years as these veterans age and their conditions worsen.
VA is committed to increased outreach efforts to active-duty
personnel. These outreach efforts result in significantly higher claims
rates. Original claim receipts increased from 111,672 in FY 2000 to
217,343 in FY 2006--a 95 percent increase.
The Veterans' Claims Assistance Act (VCAA) has significantly
increased both the length of time and the specific requirements of
claims development. VA's notification and development duties increased
as a result of VCAA, adding more steps to the claims process and
lengthening the time it takes to develop and decide a claim. Since
enactment, we are required to review the claims at additional points in
the decision process.
The greater number of disabilities veterans now claim, the
increasing complexity of the disabilities being claimed, and changes in
law and Court decisions affecting the decision process pose additional
challenges to timely processing the claims workload. As the number of
claimed conditions increases, the potential for additional unclaimed
but secondary, aggravated, and inferred conditions increases as well.
The increasing number of claimed conditions also significantly
increases the potential for appeal.
Question 8: Housing construction costs are escalating rapidly and
the average adapted housing grant is bumping up against the maximum
$50,000 limit. The budget request does not include additional funding
for an increase in the limit. Does the Department intend to submit a
legislative request to improve this important program to improve the
lives of our most seriously disabled veterans?
Response: VA intends to consider such a legislative proposal during
the upcoming FY 2009 legislative cycle.
Question 9: How many FTE are needed to administer the chapter 1606/
1607 education programs, what are the other costs such as equipment,
and does 000 reimburse VA for those costs?
Response: We estimate that both of these programs combined will
represent approximately 20 percent of the students receiving benefits
in FY 2008. The same percentage of claims processing FTE will be needed
to administer these programs, equating to 80 FTE, plus equipment needs
(PCs, printers, etc.).
Chapters 1606 and 1607 are processed using VBA's existing Benefits
Delivery Network (BON). We have not distributed the costs of operating
and maintaining the BON by benefit program. There are other
administrative costs involved with these programs such as direct
mailing, outreach, etc.
DoD reimburses VA for the actual benefit moneys that are disbursed
but not for the administrative costs.
Question 10: Your goal for veteran home ownership is 104% of the
non-veteran ownership rate. The U.S. Census lists the national home
ownership for the general population at 68.9%. What is the current
veteran home ownership rate?
Response: Our goal is for veteran home ownership to be 104 percent
of the home ownership rate of the general population. The U.S. Census
Bureau reports the home ownership rate for the general population was
68.9%, at the close of FY 2006. The corresponding figure for veteran
home ownership was 82 percent.
Questions from Hon. Ginny Brown-Waite to Hon. R. James Nicholson,
Secretary, U.S. Department of Veterans Affairs
Question 1: What has the VHA done to correct the serious
malpractice of data storage that endangers all veterans' data in VA
research facilities?
Response: Recent events both inside and outside VA have highlighted
the potential vulnerability of sensitive information, including patient
data in research studies. VA is committed to protecting this sensitive
information, and on February 6, 2007, implemented a comprehensive
Security and Privacy Review of all VA research activities. The review
consists of new training requirements and a project-by-project
certification process focused on research data storage and security for
all VA research. In response to the data incident at the Birmingham
VAMC, on January 25, 2007, all research at the Birmingham VAMC Health
Services Research and Development (HSR&D) Research Enhancement Award
Program (REAP) was suspended. A formal review by the Office of
Inspector General and the Office of Research Oversight is ongoing. As a
precaution, on February 16, 2007, all research at the other six HSR&D
REAP sites was suspended, pending a site visit assessment by the Office
of Information and Technology accompanied by the Office of Research and
Development and VHA Privacy Office.
Question 2: The FY2008 IT cyber-security budget requests $70.1
million. What are the specific initiatives by line item that this money
purchases?
Response: The IT cyber security program includes 18 initiatives, as
follows:
------------------------------------------------------------------------
FY 2008
------------------------------------------------------------------------
Cyber Security Management $28.7M
------------------------------------------------------------------------
Certification & Accreditation 7.5
------------------------------------------------------------------------
Identity Safety and Risk Management 6.0
------------------------------------------------------------------------
Policy Development and Maintenance 5.7
------------------------------------------------------------------------
Training, Awareness and Education 5.4
------------------------------------------------------------------------
FISMA Reporting 2.3
------------------------------------------------------------------------
Security Inspection 1.8
------------------------------------------------------------------------
Field Security Operations $41.4M
------------------------------------------------------------------------
Enterprise Encryption and Data Protection 7.0
------------------------------------------------------------------------
Maintenance/Support Services 6.5
------------------------------------------------------------------------
Enterprise Framework 5.5
------------------------------------------------------------------------
Antivirus 5.4
------------------------------------------------------------------------
Vulnerability Assessment and Penetration 4.0
------------------------------------------------------------------------
Patch Management 3.4
------------------------------------------------------------------------
Encryption 2.7
------------------------------------------------------------------------
Testing 2.2
------------------------------------------------------------------------
Intrusion Prevention 1.9
------------------------------------------------------------------------
E-Authentication 1.9
------------------------------------------------------------------------
Media Disposal 0.5
------------------------------------------------------------------------
COOP 0.4
------------------------------------------------------------------------
Total $70.10M
------------------------------------------------------------------------
Question 3: When will the Department fully deploy the Education
Expert System?
Response: The projected date to fully deploy TEES is September
2011. The phased approach of delivering discrete modules of business
functionality enables VA to target priority business functionality and
benefit from their incorporation into the business process as more
strategic modules are developed.
Question 4: The budget requests $35 million in FY2008 for the FLITE
program, which is the rebranding of the failed debacle of the CoreFLS
program. How much was spent on the CoreFLS program before it bellied
up?
Response: The core financial and logistics system (coreFLS) project
was designed to provide VA with a state-of-the-art integrated financial
and logistical capability that would eliminate existing material
weaknesses, and replace legacy financial and logistic applications.
However, unexpected technical and programmatic challenges forced VA to
shut down coreFLS and reexamine our approach. As a result, VA is now
pursuing the development and implementation of the FLITE program which
will also provide an integrated financial/logistics management solution
that will satisfy the Federal Financial Management Improvement Act and
related regulatory requirements. More importantly, FLITE will expand
upon the work completed under coreFLS by refining the list of business
requirements and interface specifications, standardizing business
processes, and incorporating lessons learned into program and risk
management plans associated with the creation of a simple, high
performance, cost effective financial management component. FLITE is
different from coreFLS because VA is engaged in more upfront planning,
communication and coordination across the administrations. Out year
budget request will enable VA to complete development and integration
of these components and deploy the system accordingly. The total
expended on the coreFLS project was $233.5 million.
Question 5: Please provide a line-by-line authorization of each
modernization project and a hard date of implementation.
Response: VA modernization projects are defined as those
initiatives currently planned or underway to: (1) move applications off
the benefits delivery network (BON) platform and/or (2) move legacy
client-server applications to the One VA ``to be'' enterprise
architecture. These projects are:
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
VETSNET Compensation and August 2007--complete
Development Pension Maintenance and compensation
Operations OMB Exhibit 300 February 2008--Survivor
Benefits
August 2008--Income Based
Pension
May 2009--conversion of
all SON records complete
----------------------------------------------------------------------------------------------------------------
TEES TEES OMS Exhibit 300 Effort undergoing scope
and
Development re-baseline review
----------------------------------------------------------------------------------------------------------------
BON Migration VA Computing Effort in planning stage
(rough
Project Infrastructure OMB Exhibit estimate)
300 September 2011
----------------------------------------------------------------------------------------------------------------
YBA Application YBA Application FY 2008 initiative--
planning
Migration Pro- Migration Project OMS estimate
gram (VAMP) Exhibit 300 July 2012
----------------------------------------------------------------------------------------------------------------
Question 6: Development of the VHA scheduling application is over
10 years old and still not implemented. Why? How much money has been
spent on the scheduling project to date?
Response: The purpose of the VA scheduling project, which began in
May 2001, is to develop a future business model intended to support (1)
improved access to care for veterans, (2) decreased wait times for
appointments, and (3) increased provider availability all intended to
improve patient care. Application development began in 2002 and has
been underway for 5 years. VA is taking a phased approach to implement
the application, as the move from a 25-year-old legacy system to a new
infrastructure is understandably complex. This phased approach is part
of the HealtheVet overarching strategic plan to modernize veterans
health information systems and technology architecture (VistA)
software. The scheduling project is now nearing development completion
with costs to date (FY 2001 through FY 2006) totaling $66.5 million.
Initial testing for both the application and new HealtheVet platform
will be fielded at the first VA medical center in summer 2007.
Questions from Hon. Michael R. Turner to Hon. R. James Nicholson,
Secretary, U.S. Department of Veterans Affairs
Question 1: In the budget proposals reviewed by the House Veteran's
Affairs Committee, two main categories of VA long-term care include
Non-institutional Extended Care (which includes home care), and Nursing
Home Care (which includes VA nursing facilities and contract
facilities). VA nursing facilities allow our nation's veterans long-
term care often connected with a range of other medical services. It
has been the policy of the VA that home care and contract facilities
are used to supplement VA nursing home care. However, neither home care
nor contract facilities are to be used as a substitute for traditional
VA nursing facility when a VA nursing home facility is available and
better suited to meet the veteran's needs. Does this continue to be the
policy of the VA, and in light of the Administration's current budget
request, how can the VA ensure that the use of home care and contract
facilities won't undermine veteran's access to VA nursing facilities?
Response: VA continues to hold to the philosophy, in keeping with
practice patterns in the private sector, to provide patient-centered
long-term care services in the least restrictive setting that is
suitable for a veteran's medical condition and personal circumstances,
and whenever possible in home and community-based settings. This
approach honors veterans' preferences at the end of life and helps to
maintain relationships with the veteran's spouse, family, friends, and
faith community. Nursing home care should be reserved for situations in
which the veteran can no longer be safely maintained in the home and
community.
The current budget request will support continued expansion of
access to VA's spectrum of non-institutional home and community-based
long-term care services while sustaining capacity in VA's own nursing
home care units and the community nursing home program, and continuing
to support modest growth in capacity in the State veterans home
program. VA long-term care is comprised of a dynamic array of services
provided in residential, outpatient, and inpatient settings that can be
deployed as needed to meet a veteran's changing healthcare needs over
time.
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SOLDIERS RETURNING FROM IRAQ AND AFGHANISTAN: The Long-term Costs of
Providing Veterans Medical Care and Disability Benefits
Linda Bilmes
Kennedy School of Government, Harvard University
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
The views expressed in the KSG Faculty Research Working Paper Series are those of the author(s) and do not
necessarily reflect those of the John F. Kennedy School of Government or of Harvard University. Faculty Research
Working Papers have not undergone formal review and approval. Such papers are included in this series to elicit
feedback and to encourage debate on important public policy challenges. Copyright belongs to the author(s).
Papers may be downloaded for personal use only.
----------------------------------------------------------------------------------------------------------------
EXECUTIVE SUMMARY:
This paper analyzes the long-term needs of veterans returning from
the Iraq and Afghanistan conflicts, and the budgetary and structural
consequences of these needs. The paper uses data from government
sources, such as the Veterans Benefit Administration Annual Report. The
main conclusions of the analysis are that:
(a) the Veterans Health Administration (VHA) is already overwhelmed
by the volume of returning veterans and the seriousness of their
healthcare needs, and it will not be able to provide a high quality of
care in a timely fashion to the large wave of returning war veterans
without greater funding and increased capacity in areas such as
psychiatric care;
(b) the Veterans Benefits Administration (VBA) is in need of
structural reforms in order to deal with the high volume of pending
claims; the current claims process is unable to handle even the current
volume and completely inadequate to cope with the high demand of
returning war veterans; and
(c) the budgetary costs of providing disability compensation
benefits and medical care to the veterans from Iraq and Afghanistan
over the course of their lives will be from $350-$700 Billion,
depending on the length of deployment of U.S. soldiers, the speed with
which they claim disability benefits and the growth rate of benefits
and healthcare inflation.
Key recommendations include: increase staffing and funding for
veterans medical care particularly for mental health treatment; expand
staffing and funding for the ``Vet Centers,'' and restructure the
benefits claim process at the Veterans Benefit Administration.
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
This paper was prepared for the Allied Social Sciences Association Meetings in Chicago, January, 2007. The
views expressed here are solely those of the author and do not represent any of the institutions with which she
is affiliated, now or in the past.
----------------------------------------------------------------------------------------------------------------
Introduction
The New Year has brought with it the grim fact that 3,000 American
soldiers have been killed so far in Iraq. A statistic that merits equal
attention is the unprecedented number of U.S. soldiers who have been
injured. As of September 30, 2006, more than 50,500 U.S. soldiers have
suffered non-mortal wounds in Iraq, Afghanistan and nearby staging
locations--a ratio of 16 wounded servicemen for every fatality.\1\ This
is by far the highest killed-to-wounded ratio in U.S. history. For
example, in the Vietnam and Korean wars there were 2.6 and 2.8 injuries
per fatality, respectively. World Wars I and II had fewer than 2
wounded servicemen per death.\2\
---------------------------------------------------------------------------
\1\ Department of Veterans Affairs, Office of Public Affairs,
``America's Wars,'' September 30, 2006. This document shows that the
number of non-mortal woundings in the Global War on Terror (combining
Iraq, Afghanistan and surrounding duty stations) as of 9/30/06 was
50,508 compared with 2,333 deaths in battle plus 707 other deaths in
theater. The comparison numbers for previous conflicts are as follows:
Desert Storm/Desert Shield: 1.2 wounded per fatality; Vietnam: 2.6
wounded per fatality; Korea: 2.8 wounded per fatality; World War II:
1.6 wounded per fatality; World War I: 1.8 wounded per fatality; Civil
War (union): .7 wounded per fatality; War of 1812: .5 wounded per
fatality; American Revolution: .7 wounded per fatality. Note: the VA
defines non-mortal wounded as those who are ``medically evacuated from
theatre.'' The Pentagon has several definitions, but the daily casualty
reports on its website use a narrower definition referring to those
wounded by shrapnel, bullets, and so forth. Using this narrow
definition, the Iraq conflict has a ratio of 8 wounded per fatality--
still much higher than any previous war in U.S. history.
\2\ Ibid.
---------------------------------------------------------------------------
While it is welcome news and a credit to military medicine that
more soldiers are surviving grievous wounds, the existence of so many
veterans, with such a high level of injuries, is yet another aspect of
this war for which the Pentagon and the Administration failed to plan,
prepare and budget. There are significant costs and requirements in
caring for our wounded veterans, including medical treatment and long-
term healthcare, the payment of disability compensation, pensions and
other benefits, reintegration assistance and counseling, and providing
the statistical documentation necessary to move veterans seamlessly
from the Department of Defense payroll into Department of Veterans
Affairs medical care, and to process VA disability claims easily.
To date, 1.4 million U.S. servicemen have been deployed to the
Global War on Terror (GWOT), the Pentagon's name for operations in and
around Iraq and Afghanistan.\3\ The servicemen who have been officially
wounded are a small percentage of the veterans who will be using the
veteran's administration medical system. Hundreds of thousands of these
men and women will be seeking medical care and claiming disability
compensation for a wide variety of disabilities that they incurred
during their tours of duty.\4\ The cost of providing such care and
paying disability compensation is a significant long-term entitlement
cost that the U.S. will be paying for the next 40 years.\5\
---------------------------------------------------------------------------
\3\ As of September 30, 2006, 1,406,281 unique service members have
been deployed to the wars in Iraq and Afghanistan, according to the
Department of Defense, Defense Manpower Data Center, and ``Contingency
Tracking System.'' The Veterans Health Administration (VHA) Office of
Public Health and Environmental Hazards, November 2006 uses the number
1.4 million (as of November 2006). The Veterans Benefits Administration
(VBA) lists 1,324,419 unique servicemen deployed to GWOT as of May 2006
(prepared by VBA/OPA&I, 7/20/06).
\4\ Based on an analysis of the first Gulf War in 1991, using the
Gulf War Veterans Information System (GWVIS August 2006, chart on
``Gulf War Veteran Outpatient Stays''), there were 297,125 veterans
from that conflict who used VA medical care, or 48.4%. If the same
percentages of Iraq/Afghan veterans use VA medical care then VA should
expect approximately 700,000 new patients from the 1.4 million existing
servicemen. Increasing the number of unique servicemen deployed will
increase medical and disability usage.
\5\ Veterans' disability pay is an entitlement program, like
Medicare and Social Security. Once a veteran has been approved to
receive disability pay, he or she is entitled to receive an annual
payment and cost-of-living adjustments. The average age of a servicemen
is about 25 years of age, therefore given current life expectancy
rates, 40 years is a reasonable amount of years to project payment of
benefits, even assuming the veteran does not claim for some years
following the period of service.
---------------------------------------------------------------------------
The objective of this paper is to examine the structural and
budgetary requirements for caring for the returning war veterans from
Iraq and Afghanistan, in terms of U.S. capacity to pay disability
compensation, provide high quality medical care, and provide other
essential benefits. The paper grew out of a previous paper that was co-
authored in January 2005 with Columbia University professor Joseph
Stiglitz, in which the overall costs of the war in Iraq were estimated
to exceed $2 trillion. One of the long-term costs cited in that paper
was the cost associated with providing healthcare and disability
benefits to veterans.\6\ This paper expands on that topic.
---------------------------------------------------------------------------
\6\ Bilmes, Linda and Stiglitz, Joseph, The Economic Costs of the
Iraq War: An Appraisal Three Years After the Beginning of the Conflict,
NBER Working Paper 12054 (http://www.nber.org/papers/w12054), February
2006. The long-term budgetary costs associated with veterans health and
disability cited in that paper ranged from $77bn to $179bn (depending
on the length of the war), based on a population of 550,000 unique
Iraqi war veterans. After we published this paper, a number of
veteran's organizations including the American Legion and Veterans for
America, contacted us in appreciation of our highlighting the needs of
veterans. Veterans for America has particularly encouraged further
research to understand the needs of the returning GWOT veteran's
community.
---------------------------------------------------------------------------
Unlike the previous paper,\7\ this study does not differentiate
between veterans returning from Iraq, or Afghanistan or adjacent
locations (such as Kuwait, an important staging post for Iraq) in the
GWOT, for three reasons. First, nearly one-third of the servicemen
involved in the war have been deployed two or more times and many of
them have served both in Iraq and Afghanistan, and/or other
locations.\8\ Second, the data available from the VA does not
distinguish between the wars in Iraq and Afghanistan. Third, for the
purposes of estimating the long-term costs of taking care of the
returning veterans it does not matter where they served. However it is
worth noting that the overwhelming majority of the deaths and injuries
incurred in the GWOT have been in Iraq. Among those listed as wounded
on the Pentagon's casualty reports, more than 95% have been injured in
Iraq.\9\
---------------------------------------------------------------------------
\7\ The Bilmes/Stiglitz cost of war paper did not include the costs
of Afghanistan or other areas outside of Iraq in the GWOT. Had we
included those costs, the total cost of war would have increased by 15-
20%.
\8\ As of 9/30/06, some 421,206 (30%) of 1,406,281 unique service
members had been deployed twice or more to the wars in Iraq and
Afghanistan. Army Times, December 11, 2006, page 14, from the
Department of Defense, Defense Manpower Data Center, ``Contingency
Tracking System.''
\9\ As of 12/28/06, the DoD website listed 22,565 wounded in
Operation Iraqi Freedom and 1,084 wounded in Operating Enduring Freedom
(Afghanistan). As noted previously, this is a narrower definition of
injuries than the one used by the Veterans Administration, which lists
50,508 non-mortal woundings as of 9/30/06.
---------------------------------------------------------------------------
This paper will analyze the following aspects of the returning
veterans' needs.
1. Disability compensation
Projected Cost
Backlog of Pending Claims
2. Medical care
Capacity issues
Projected Cost
Veterans Centers
Transitioning from the Department of Defense to VA care
3. Overall assessment of U.S. readiness to meet its obligations to
veterans
4. Recommendations
Methodology
All statistics used in this paper are from government sources,
including publications of the Veterans Benefit Administration (VBA),
Veterans Health Administration (VHA), and other VA offices, as well as
from the Congressional Budget Office, the Government Accountability
Office, the Department of Defense, and Congressional testimony. The
numbers are based on the servicemen involved in Operation Iraqi Freedom
(OIF) and Operation Enduring Freedom (OEF, Afghanistan) unless
otherwise noted.
The cost and structural requirements for returning veterans will
depend on several factors, including the number of U.S. troops
stationed in the region and how long they are deployed; the rate of
claims and utilization of health resources by returning troops, and the
rate of increase in disability payment and healthcare costs over time.
The model developed allows the user to vary these assumptions and may
be obtained with permission from the author's website. The current
analysis has been performed under three ``base'' scenarios that
reflect, broadly the three options now under consideration for the war.
Low Scenario: The low scenario assumes that the U.S. begins
withdrawing troops in 2007 and that all U.S. servicemen are home by
2010. This pattern is roughly in parallel with the recommendations of
the bipartisan Baker Commission that reported to President Bush in
November 2006. This scenario assumes that we will not deploy any new
troops beyond the 1.4 million already participating in the war. It
assumes that 44% of U.S. troops will claim for disability payment over
a period of years, with 87% of claims granted, following the same
claims pattern as the first Gulf War in 1991.\10\ The low scenario
assumes that soldiers will initially receive the VA's 2005 average
recurring benefit and that the annual rate of increase will be 2.8% to
reflect a cost-of-living adjustment only. (As opposed to the actual
growth rate over the past 10 years which is 6.1%). The medical usage in
this scenario is based on the lowest possible uptake of medical care
and a rate of increase that is below the historical rate of healthcare
inflation. In short, this scenario shows the absolute basement level--
the lowest possible cost of providing medical care and disability
benefits to soldiers returning from Iraq and Afghanistan under the most
optimistic assumptions.
---------------------------------------------------------------------------
\10\ Using the claims patterns from Gulf War I is almost certainly
too conservative because that war was much shorter and relied primarily
on aerial bombardment, whereas the current wars involve long
deployments and ground warfare. However it provides a baseline for the
current Iraq/Afghan wars.
---------------------------------------------------------------------------
Moderate Scenario: The moderate scenario is based on the
current course of the war. This scenario uses the Congressional Budget
Office's expected deployment figures, which would involve a gradual
drawdown of troops but maintain a small U.S. force in the region
through 2015. Under this scenario, the total unique servicemen involved
in the conflict will be 1.7 million, that is, 300,000 additional troops
rotated in over the period of years. Nearly 20,000 new troops are
regularly deployed into the two war zones each month, before any
``surge'' or escalation of the conflict is considered.\11\ This
scenario uses the first Gulf War as the basis for predicting the level
of troops who will claim disability benefits, the rate of approval of
the claims, and the utilization of medical resources. However a growth
rate of 4.4% is projected for claims benefits, half way between the
base cost-of-living adjustment and the actual growth rate of 6.1%.
---------------------------------------------------------------------------
\11\ Footnote: Analysis of DMDC's Contingency Tracking System shows
57,462 new first-time deployments between June 2006 and September 2006,
an average 19,154 per month.
---------------------------------------------------------------------------
High ``Surge'' Scenario: This scenario assumes that troop
levels will surge in 2007 and that the total participation in the war
over time will eventually reach 2 million unique servicemen by 2016. It
also models the potential that half the veterans claim disability
payments, which is a reasonable possibility given the ferocity of the
conflict and the number of second and third deployments. This model
also looks at the impact of growth in claims benefit payments and
healthcare costs based on the actual growth rates over the past 10
years. If the U.S. decides to increase troops and all trends on
disability and healthcare continue as they have in the past, this model
presents the resulting cost consequences.
The costs estimated in this study are budgetary costs to the U.S.
government directly associated with the payment of disability benefits
and medical treatment for returning OIF/OEF war veterans. The costs do
not include the interest payments on the debt that is being incurred in
borrowing money to finance the war. Future cash flows were discounted
at a rate of 4.75% reflecting current long-term U.S. borrowing rates.
1. Disability Compensation
There are 24 million living veterans, of whom roughly 11% receive
disability benefits. Overall, in 2005 the U.S. currently paid $23.4
billion in annual disability entitlement pay to veterans from previous
wars, including 611,729 from the first Gulf War, 916,220 from Vietnam,
161,512 Korean War veterans, 356,190 World War II veterans and 3
veterans of World War I.\12\
---------------------------------------------------------------------------
\12\ Ibid, page 33, ``Benefits delivery network,'' RCS 20-0221.
---------------------------------------------------------------------------
All 1.4 million servicemen deployed in the current war effort are
potentially eligible to claim some level of disability compensation
from the Veterans Benefits Administration. Disability compensation is a
monetary benefit paid to veterans with ``service-connected
disabilities''--meaning that the disability was the result of an
illness, disease or injury incurred or aggravated while the soldier was
on active military service. Veterans are not required to seek
employment nor are there any other conditions attached to the program.
The explicit congressional intent in providing this benefit is ``to
compensate for a reduction in quality of life due to service-connected
disability'' and to ``provide compensation for average impairment in
earnings capacity.'' The principle dates back to the Bible at Exodus
21:25, which authorizes financial compensation for pain inflicted by
another.\13\
---------------------------------------------------------------------------
\13\ See Veterans Benefits Administration ``Annual Benefits
Report'' (ABR), 2005, page 17 for definition of disability compensation
and see VA Disability Compensation Program, Legislative History, VA
Office of Policy, Planning and Preparedness 2004 for principles behind
the program.
---------------------------------------------------------------------------
Disability compensation is graduated according to the degree of the
veteran's disability, on a scale from 0 percent to 100 percent, in
increments of 10%. Annual benefits range from a low of $1,304 per year
for a veteran with a 10% disability rating to about $44,000 in annual
benefits for those who are completely disabled.\14\ The average benefit
is $8,890 although this varies considerably; Vietnam veterans average
about $11,670.\15\ Additional benefits and pensions are payable to
veterans with severe disabilities. Once deemed eligible, the veteran
receives the compensation payment as a mandatory entitlement for the
remainder of their lives, like Medicare and Social Security.
---------------------------------------------------------------------------
\14\ Ibid, page 24, lists $1,304 for 10% and $31,611 for 100%, but
those with 100% disability also receive additional payments that
combined result in an annual payment of approximately $44,000.
\15\ Ibid, page 33.
---------------------------------------------------------------------------
There is no statute of limitations on the amount of time a veteran
can claim for most disability benefits. The majority of veteran's
claims are within the first few years after returning, but some
disabilities do not surface until years later. The VA is still handling
hundreds of thousands of new claims from Vietnam era veterans for post-
traumatic stress disorder and cancers linked to Agent Orange exposure.
The process for ascertaining whether a veteran is suffering from a
disability, and determining the percentage level of a veteran's
disability, is complicated and lengthy. A veteran must apply to one of
the 57 regional offices of the Veterans Benefits Administration (VBA),
where a claims adjudicator evaluates the veteran's service-connected
impairments and assigns a rating for the degree to which the veteran is
disabled. For veterans with multiple disabilities, the regional office
combines the ratings into a single composite rating. If a veteran
disagrees with the regional office's decision he or she can file an
appeal to the VA's Board of Veterans Appeals. The Board makes a final
decision and can grant or deny benefits or send the case back to the
regional office for further evaluation. Typically a veteran applies for
disability in more than one category, for example, a mental health
condition as well as a skin disorder. In such cases, VBA can decide to
approve only part of the claim--which often results in the veteran
appealing the decision. If the veteran is still dissatisfied with the
Board's decision to grant service connection or the percentage rating,
he or she can further appeal it to two even higher levels of
decisionmakers.\16\
---------------------------------------------------------------------------
\16\ GAO, ``Veterans Benefits Administration: Problems and
Challenges Facing Disability Claims Processing,'' GAO Testimony before
the Subcommittee on Oversight and Investigations, House Committee on
Veterans' Affairs, May 18, 2000.
---------------------------------------------------------------------------
Most employees at VA are themselves veterans, and are predisposed
to assisting veterans obtain the maximum amount of benefits to which
they are entitled. However, the process itself is long, cumbersome,
inefficient and paperwork-intensive. The process for approving claims
has been the subject of numerous GAO studies and investigations over
the years. Even in 2000, before the current war, GAO identified
longstanding problems in the claims processing area. These included
large backlogs of pending claims, lengthy processing times for initial
claims, high error rates in claims processing, and inconsistency across
regional offices.\17\ In a 2005 study, GAO found that the time to
complete a veteran's claim varied from 99 days at the Salt Lake City
regional office to 237 days at the Honolulu, Hawaii office.\18\
---------------------------------------------------------------------------
\17\ Ibid.
\18\ ``Veterans Benefits: Further Changes in VBA's Field Office
Structure could help improve disability claims processing,'' GAO-06-
149, December 2005.
---------------------------------------------------------------------------
The backlog of pending claims has been growing since 1996. In 2000,
VBA had a backlog of 69,000 pending initial compensation claims, of
which one-third had been pending for more than 6 months.\19\ Today, due
in part to the surge in claims from the Iraq/Afghan wars, VBA has a
backlog of 400,000 claims.\20\ VBA now takes an average of 177 days (6
months) to process an original claim, and an average of 657 days
(nearly 2 years) to process an appeal.\21\ This compares unfavorably
with the private sector healthcare/financial services industry, which
processes an annual 30 billion claims in an average of 89.5 days per
claim, including the time required for claims that are disputed.\22\
---------------------------------------------------------------------------
\19\ Ibid.
\20\ The VBA's backlog of pending claims was 399,751 as of December
9, 2006 (VBA Monday Morning Workload Report).
\21\ The average time to process a claim is 177 days as of 9/06 and
average time to process an appeal is 657 days (VA Performance and
Accountability Report FY 2006).
\22\ Bearing Point, Health Care/Financial Services industry report,
September 14, 2006.
---------------------------------------------------------------------------
Projected Demand for Benefits among OIF/OEF Veterans
It is difficult to predict with certainty the number of veterans
from the two current wars who will claim for some amount of disability.
The first Gulf War provides a baseline number although the Iraq and
Afghanistan war has been longer and has involved more ground warfare
than the Desert Storm conflict, which relied largely on aerial
bombardment and 4 days of intense ground combat. However, in both
conflicts, a number of veterans were exposed to depleted uranium that
was used in anti-tank rounds fired by U.S. M1 tanks and U.S. A10 attack
aircraft. Many disability claims from the first Gulf War stem from
exposure to depleted uranium, which has been implicated in raising the
risk of cancers and birth defects. Gulf War veterans also filed
disability claims related to exposures to oil well fire pollution, low-
levels of chemical warfare agents, experimental anthrax vaccines, and
experimental anti-chemical warfare agent pills called pyridostigmine
bromide, the anti-malaria pill Lariam, skin diseases, and disorders
from living in the hot climate,\23\ which are likely to be cited in the
current conflict. However, the number of disability claims in the Iraq/
Afghan wars is likely to be higher due to the significantly longer
length of soldier's deployments, repeat deployments, and heavier
exposure to urban combat.
---------------------------------------------------------------------------
\23\ Veterans for America, interview with Paul Sullivan, program
director, 11/06.
---------------------------------------------------------------------------
Following the Gulf War the criteria for receiving benefits were
widened by Congress based on evidence of widespread toxic
exposures.\24\ The same criteria for healthcare and benefits
eligibility still apply to veterans of the Iraq and Afghanistan
wars.\25\ Forty-four percent of those veterans filed disability claims
for a variety of conditions and 87% were approved.\26\ The U.S.
currently pays about $4 billion annually in disability payments to
veterans of Desert Storm/Desert Shield.\27\
---------------------------------------------------------------------------
\24\ ``Veterans Benefits Improvement Act of 1994'' (Public Law 103-
446) and ``Persian Gulf War Veterans Act of 1998 (P.L. 105-277).
\25\ In fact, the VA does not distinguish, for the purpose of
claims processing, between the end of the first Gulf War and the
present conflict (38 USC section 101(33) defines the Gulf War as
starting on August 2, 1990, and continuing until either the President
or the Congress declares an end to it and 38 CFR 3.317 defines the
locations of the conflict).
\26\ For Gulf War, the total claims filed to date are 271,192, of
which 205,911 have been approved, 20,382 were denied and 34,899 are
still pending (GWVIS, August 2006, p. 7: Granted Service Connection +
Denied Service Connection + Claims Pending).
\27\ Gulf War total annual payment $4.3 billion (Ibid., VBA, ABR
2005 pp. 33).
---------------------------------------------------------------------------
Of the 1.4 million U.S. servicemen who have so far been deployed in
the Iraq/Afghan conflicts, 631,174 have been discharged as of September
30, 2006. Of those 46% are in the full-time military and 54% are
reservists and National Guardsmen.\28\ Therefore the total population
that is potentially eligible for disability benefits is this number
(631,174). To date 152,669 servicemen have applied for disability
benefits and of those, 104,819 have been granted, 34,405 are pending
and 13,445 have been rejected. This implies an approval rate of 88% to
date.\29\
---------------------------------------------------------------------------
\28\ VHA, Office of Public Health and Environmental Hazards,
November 2006.
\29\ VBA ``Compensation and Benefit Activity among Veterans
Deployed to the GWOT,'' July 20, 2006, obtained under Freedom of
Information Act by the National Security Archive at George Washington
University.
---------------------------------------------------------------------------
We have estimated the cost of providing disability benefits to
veterans under three scenarios. Under the low scenario, we expect that
as in the first Gulf War, 44% of the current veterans will eventually
claim disability, with an approval rate of 87%. We estimate that the
remaining 900,000 troops will be discharged in equal installments over
the next 4 years bringing all U.S. troops home by 2010. We expect the
same percentage of these troops to claim for disabilities, with the
same approval rate, within a further 5 years. We have assumed that on
average, claims are lower than average rate, at the lower rate of new
claimants from the first Gulf War of $6,506.\30\ This is probably an
excessively conservative assumption because it projects the same rate
of serious injuries as occurred in Gulf War I, when in fact we already
know that more than the actual rate of serious injuries is much
higher.\31\
---------------------------------------------------------------------------
\30\ Ibid, ABR 2005, p. 33.
\31\ Of the 50,508 non-mortally wounded soldiers in OIF/OEF there
are at least 10,000 serious injuries such as brain injuries, spinal and
amputations, according to DoD sources. See also Wallsten and Kosec,
AEI-Brookings Working Paper 05-19, September 2005, estimate of 20%
serious brain injuries, 6% amputees and 24% other serious injuries.
---------------------------------------------------------------------------
The moderate scenario assumes that the war continues through 2014
with a total deployment of 1.7 million over the course of the war, and
with gradually reduced deployment. It assumes that a slightly higher
percentage of eligible veterans (50%) make claims, which is more
realistic given deployment lengths. This scenario uses the actual
average VA benefit payment of $8,890. It assumes the rate of increase
in benefits is 4.4%, midway between the mandatory Cost of Living
Adjustment and the actual 10-year growth rate of 6.1%. The high
scenario models the impact of a surge in forces bringing the total
unique deployments to 2 million. It assumes 50% of eligible forces
claim benefits and a rate of 6.1% increase, which is the actual rate
over the past 10 years. It further assumes a higher rate of medical
inflation (10% vs. 8% in the low and moderate scenarios).
Table 1: Long-term Cost of Veterans Disability Benefits \32\
------------------------------------------------------------------------
Low Moderate High
------------------------------------------------------------------------
Disability Benefits ($bn) 67.63 109.98 126.76
------------------------------------------------------------------------
Backlog of Pending Disability Claims
The issue is not simply cost but also efficiency in providing
disabled veterans with their benefits. In addition to all the problems
detailed above, the Iraq and Afghan war veterans are filing claims of
unusually high complexity (see table 3). To date, the backlog of
pending claims from these recent war veterans is 34,000, but the vast
majority of servicemen from this conflict have not yet filed their
claims. Even without the projected wave of claims, the VA has an
overall backlog of 400,000, including thousands of Vietnam era claims.
Including all pending claims and other paperwork, the VA's backlog has
increased from 465,623 in 2004 to 525,270 in 2005 to 604,380 in
2006.\33\
---------------------------------------------------------------------------
\32\ The figures in Table 1 represent the present value of
disability benefits over 40 years for eligible veterans projected under
the three scenarios described.
\33\ VBA's ``Monday Morning Report'' of pending claims and other
work performed at regional offices, cites: 11/25/06: 604,380; 11/26/05:
525,270; 11/27/04: 465,623.
---------------------------------------------------------------------------
The fact that the VBA is largely sympathetic to the plight of
disabled veterans should not obscure the fact that this system is
already under tremendous strain. If only one-fifth of the returning
veterans who are eligible claim in a given year, and the total claims
reaches a high of 38% effective rate (44%-88% approval rate), the
number of likely claims at the VBA over the next 10 years can be
expected to rise from 104,819 to more than 600,000.\34\ (See table 2).
---------------------------------------------------------------------------
\34\ This projection based on the moderate scenario described
previously, based on 1.7 million unique servicemen and CBO troop
deployment figures through 2014.
Table 2: Projected Increase in Disability Claims (moderate scenario)
----------------------------------------------------------------------------------------------------------------
2006 2007 2008 2009 2010 2011 2012
----------------------------------------------------------------------------------------------------------------
Discharged 118,758 118,758 118,758 118,758 118,758 118,758
cum 118,758 237,517 356,275 475,034 593,792 712,551
Eligible claimants
Existing discharged
non-claimants 526,355 526,355 526,355 526,355 526,355 526,355 526,355
Newly discharged -- 118,758 237,517 356,275 475,034 593,792 712,551
Total potential claimants 645,113 763,872 882,630 1,001,389 1,120,147 1,238,906
Claim rate 22% 22% 27% 33% 38% 44% 44%
New claims -- 140,312 207,678 287,958 381,154 487,264 538,924
Current beneficiaries 104,819 104,819 104,819 104,819 104,819 104,819 104,819
Total claims (number) 104,819 245,131 312,497 392,777 485,973 592,083 643,743
------------------------------------------------------------------------
Total claims ($bn) 0.93 2.27 2.89 3.63 4.49 5.47 5.95
----------------------------------------------------------------------------------------------------------------
If nothing is done to address the problem, the claims backlog will
continue to grow throughout the period of the war, along with growing
inequity between different regional offices. A key question is: what is
a reasonable amount of time for the U.S. to make a disabled veteran
wait for a disability check? This paper proposes several actions that
could reduce the length of time for processing from zero to 90 days.
(Described in more detail in section 4: Recommendations). These
include: (a) greater use of the ``Vet Centers'' to provide assistance
for veterans to file their claims, (b) automatically granting all or
some of the claims, with subsequent audits to deter fraud, and (c)
streamlining and technologically upgrading the claims system into a
``fast track'' where veterans receive a quick decision on most claims.
2. Veterans Medical Care Shortfall
The VA's Veterans Health Administration provides medical care to
more than 5 million veterans each year. This care includes primary and
secondary care, as well as dental, eye and mental healthcare, hospital
inpatient and outpatient services. The care is free to all returning
veterans for the first 2 years after they return from active duty;
thereafter the VA imposes co-payments for various services, with the
amounts related to the level of disability of the veteran.\35\
---------------------------------------------------------------------------
\35\ 38 USC section 1710.
---------------------------------------------------------------------------
The VA has long prided itself on the excellence of care that it
provides to veterans. In particular, VA hospitals and clinics are known
to perform a heroic job in areas such as rehabilitation. Medical staff
is experienced in working with veterans and provides a sympathetic and
supportive environment for those who are disabled. It is therefore of
utmost importance that the quality of care be maintained as the demand
for it goes up.
However, the demand for VA medical treatment is far exceeding what
the VA had anticipated. This has produced long waiting lists and in
some cases simply the absence of care. To date, 205,097, or 32% of the
631,174 eligible discharged OEF/OIF veterans have sought treatment at
VA health facilities. These include 35% of the eligible active duty
servicemen (101,260) and 31% of the eligible Reservists/Guards
(103,837). To date, this number represents only 4% of the total patient
visits at VA facilities--but it will grow. According to the VA, ``As in
other cohorts of military veterans, the percentage of OIF/OEF veterans
receiving medical care from the VA and the percentage of veterans with
any type of diagnosis will tend to increase over time as these veterans
continue to enroll for VA healthcare and to develop new health
problems.'' \36\
---------------------------------------------------------------------------
\36\ VHA, Office of Public Health and Environmental Hazards,
November 2006, Ibid, p. 14.
---------------------------------------------------------------------------
The war in Iraq has been noteworthy for the types of injuries
sustained by the soldiers. Some 20% have suffered brain trauma, spinal
injuries or amputations; another 20% have suffered other major injuries
such as amputations, blindness, partial blindness or deafness, and
serious burns.
However, the largest unmet need is in the area of mental
healthcare. The strain of extended deployments, the stop-loss policy,
stressful ground warfare and uncertainty regarding discharge and leave
has taken an especially high toll on soldiers. Thirty-six percent of
the veterans treated so far--an unprecedented number--have been
diagnosed with a mental health condition. These include PTSD, acute
depression, substance abuse and other conditions. According to Paul
Sullivan, a leading veterans advocate, ``The signature wounds from the
wars will be (1) traumatic brain injury, (2) post-traumatic stress
disorder, (3) amputations and (4) spinal chord injuries, and PTSD will
be the most controversial and most expensive.'' \37\ (See Table 3.)
---------------------------------------------------------------------------
\37\ Paul Sullivan, Program Director of Veterans for America, 12/
23/06 interview.
Table 3: VHA Office of Public Health, November 2006
------------------------------------------------------------------------
Frequency of Possible Diagnoses Among Recent Iraq and Afghan Veterans
-------------------------------------------------------------------------
(n = 205,097)
------------------------
Frequency * %
------------------------------------------------------------------------
Infectious and Parasitic Diseases (001-139) 21,362 10.4
Malignant Neoplasms (140-208) 1,584 0.8
Benign Neoplasms (210-239) 6,571 3.2
Diseases of Endocrine/Nutritional/Metabolic 36,409 17.8
Systems (240-279)
Diseases of Blood and Blood Forming Organs (280- 3,591 1.8
289)
Mental Disorders (290-319) 73,157 35.7
Diseases of Nervous System/Sense Organs (320- 61,524 30.0
389)
Diseases of Circulatory System (390-459) 29,249 14.3
Disease of Respiratory System (460-519) 36,190 17.6
Disease of Digestive System (520-579) 63,002 30.7
Diseases of Genitourinary System (580-629) 18,886 9.2
Diseases of Skin (680-709) 29,010 14.1
Diseases of Musculoskeletal System/Connective 87,590 42.7
System (710-739)
Symptoms, Signs and Ill Defined Conditions (780- 67,743 33.0
799)
Injury/Poisonings (800-999) 35,765 17.4
------------------------------------------------------------------------
* Hospitalizations and outpatient visits as of 9/30/2006; veterans can
have multiple diagnoses with each healthcare encounter.
A veteran is counted only once in any single diagnostic category but can
be counted in multiple categories, so the above numbers add up to
greater than 205,097.
Additionally, far more returning Iraqi war veterans (than those in
previous conflicts) are likely to seek such help, in part due to
awareness campaigns run by veteran's organizations through the press.
There is no reliable data on the length of waiting lists for returning
veterans, but even the VA concedes that they are so long as to
effectively deny treatment to a number of veterans. In the May 2006
edition of Psychiatric News, Frances Murphy, M.D., the Under Secretary
for Health Policy Coordination at VA, said that mental health and
substance abuse care are simply not accessible at some VA facilities.
When the services are available, Dr. Murphy asserted that, ``waiting
lists render that care virtually inaccessible.'' \38\
---------------------------------------------------------------------------
\38\ Frances Murphy, May 2006, Psychiatric News.
---------------------------------------------------------------------------
The VA curiously maintains that it can cope with the surge in
demand, despite much evidence to the contrary. For the past 2 years,
the VA ran out of money to provide healthcare. In FY 2006, the VA was
obliged to submit an emergency supplemental budget request for $2
billion, which included $677 million to cover an unexpected 2% increase
in the number of patients (half of which were OIF/OEF patients), $600
million to correct its inaccurate estimate of long-term care costs, and
$400 million to cover an unexpected 1.2% increase in the costs per
patient due to medical inflation. The previous year, (FY 2005), VA
requested an additional $1 billion, of which one-quarter was for
unexpected OIF/OEF needs and remainder was related to overall under-
estimation of patient costs, workload, waiting lists, and dependent
care. The GAO analysis of these shortfalls concluded that they were due
to the fact that VA was modeling its projections based on 2002 data,
before the war in Iraq began.\39\
---------------------------------------------------------------------------
\39\ GAO-06-430R, ``VA Health Care Budget Formulation,'' pp. 18-20.
---------------------------------------------------------------------------
The budget shortfalls and the statement by Dr. Murphy suggest that
the volume of veterans returning from Iraq and Afghanistan will not be
able to obtain the healthcare they need, particularly for mental health
conditions. Such veterans are at high risk for unemployment,
homelessness, family violence, crime, alcoholism, and drug abuse, all
of which impose an additional human and financial burden on the nation.
In addition, many of these social services are provided by state and
local governments which are already under tremendous strain.
Projected Medical Costs
The number of veterans who will eventually require treatment can be
estimated using a baseline of the utilization during the first Gulf
War, in which the VA is providing medical care to 48% of veterans. The
average annual cost of treating veterans in the system is now
$5,000,\40\ although it is difficult to know whether the more grievous
injuries and disabilities of the current conflict will drive up costs
per patient.
---------------------------------------------------------------------------
\40\ This amount is calculated by estimating the budget 2006
supplemental budget request for OIF/OEF veterans per additional
patient, using the GAO analysis in GAO-06-430R.
---------------------------------------------------------------------------
The costs of providing medical care have been calculated under the
three scenarios. Under the low scenario, under which the U.S. will
deploy no new troops, the ceiling for medical care is 48% of OIF/OEF
veterans. If half of all veterans eventually seek medical treatment
from the VA that will produce a demand of some 700,000 veterans.
However, due to the fact that veterans are eligible for free care
during the first 2 years after discharge, we can expect a wave of
returning war veterans within 2 years of their discharge date.
Additionally, since active duty veterans claim medical care at a higher
rate (than Guards/Reservists) and have been deployed in more of the
most hazardous front-line task come home, we can expect that the
average cost of treating such veterans increases as well as a high
level of demand.\41\
---------------------------------------------------------------------------
\41\ VHA, Office of Public Health and Environmental Hazards, Ibid.
---------------------------------------------------------------------------
If the demand for medical care increases as projected to some
700,000 or more veterans, there is a serious risk that the VA, which is
already overwhelmed, will be unable to meet the medical needs of
returning OIF/OEF veterans. Additional staff is needed in important
areas such as brain trauma units and mental health. The VA also needs
to expand systems such as triage nursing, to help leverage scarce
medical resources.
Even assuming that no more troops are deployed, the long-term cost
of treating returning veterans will reach $208 billion. This however
assumes that the supply of healthcare exists to treat them. If the
number of troops continues to grow as in the moderate then cost of
providing lifetime care rises to $315 billion. The annual budget
payment under this scenario will reach $3bn by 2010 and more than
double by 2014. (See Table 4.)
Table 4: Projected Cost of Providing VA Medical Care (moderate scenario) \42\
--------------------------------------------------------------------------------------------------------------------------------------------------------
2006 2007 2008 2009 2010 2011 2012 2013 2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Discharged 631,174 749,932 868,691 987,449 1,106,208 1,224,966 1,343,725 1,462,483 1,581,242
% OIF/OEF veterans seeking
care 32.50% 33.96% 35.49% 37.09% 38.76% 40.50% 42.32% 44.23% 46.22%
Total OIF/OEF veterans
seeking care 205,132 254,696 308,305 366,224 428,731 496,123 568,711 646,827 730,822
Cost/medical claim $ 5,000 $ 5,400 $ 5,832 $ 6,299 $ 6,80 $ 7,34 $ 7,93 $ 8,56 $ 9,25
2 7 4 9 5
Total cost ($bn) 1.0 1.4 1.8 2.3 2.9 3.6 4.5 5.5 6.8
---------------------------------------------------------------------
NPV $315.23
--------------------------------------------------------------------------------------------------------------------------------------------------------
However, these scenarios are conservative in assuming that only
half of the returning veterans will eventually seek medical treatment
from the VA and that the level of healthcare inflation will remain
constant at 8%. Under a worst-case scenario, if troops levels rise to 2
million and if health inflation rises to the double-digit levels
experienced during the 1990s, we can expect the total cost of providing
lifetime medical care to veterans to reach $600bn.\43\
---------------------------------------------------------------------------
\42\ The NPV is calculated over 40 years, at a discount rate of
4.75%, with a peak rate of 50% veterans claiming care by 2016.
\43\ High scenario assuming 10% medical inflation rate.
---------------------------------------------------------------------------
Veterans Centers
How can the VA possibly handle the number of returning troops who
require care, as well as their families, especially for mental health
conditions? Perhaps the most creative and successful innovation in the
VA in the past two decades has been the introduction of the ``Vet
Centers''--207 walk-in storefront centers where veterans or their
families can obtain counseling and reintegration assistance. The
centers, operated by VA's ``Readjustment Counseling Service'' are
popular with veterans and their families and--at a total cost of some
$100m per year--provide a highly cost-effective option for veterans who
are not in need of acute medical care. The Vet Centers are particularly
helpful for families, for example they provide a venue for a soldier's
spouse to seek guidance if the veteran is showing mental distress but
will not seek help. They also supply bereavement counseling to
surviving families of those killed during military service. And they
offer a friendlier environment often staffed with recent OEF/OIF combat
veterans and other war veterans--unlike VA regional offices which tend
to be stuffy, bureaucratic offices located in downtown locations.\44\
---------------------------------------------------------------------------
\44\ Opinion based on conversations with veterans organizations.
---------------------------------------------------------------------------
To date, 144,000 veterans have sought assistance at these
centers.\45\ However the demand for their services is threatening their
ability to provide care. Vet Center managers recently surveyed by
Congress said that in 50% of the Centers, the increasing workload is
affecting their ability to treat veterans. Some 40% of the Vet Centers
have directed veterans for whom individualized therapy would be
appropriate into group therapy, and more than one-quarter of the
Centers have limited or plan to limit family therapy. Nearly 17% have
established waiting lists (or are in the process of setting them
up).\46\
---------------------------------------------------------------------------
\45\ Vet Center costs document, page 3B-11.
\46\ October 2006 report issued by the House Veterans Affairs
Committee, testimony by Vet Center managers.
---------------------------------------------------------------------------
Currently the centers do not assist veterans in filing disability
claims, but provided that the facility had sufficient secure storage
space to handle such documents, there is no reason why they could not.
The VA has recommended hiring an additional 1,000 claims adjudicators--
who could be placed in the Vet Centers (an average of 5 each) to help
veterans figure out how to claim. The cost of expanding the number of
centers, hiring additional staff and placing more claims adjudicators
in the centers is minimal.
Transition from DoD Payroll to VA Care
One of the chief bottlenecks in the current system is the soldier's
transition from the DoD payroll into the VA benefit system. There are
three primary ways that a soldier makes this transition.
A veteran who is discharged regularly, and has some level of
disability will typically have to wait 6 months before receiving his or
her disability check from the VA. This is a period during which the
veterans, particularly those in a state of mental distress, are most at
risk for serious problems, including suicide, falling into substance
abuse, divorce, losing their job, or becoming homeless.
A second route is to exit via the ``Benefits Delivery at
Discharge'' (BDD) program. This successful program allows soldiers to
process their claims up to 6 months prior to discharge, so they can
begin receiving benefits as soon as they leave the military. However,
the use of this route has become much more difficult due to the
extended deployments, the use of ``stop-loss'' orders, and the
resulting unpredictability about when a soldier will be discharged.
Additionally, this program is not available to Reservists and
Guardsmen, who comprise 40% of the forces in Iraq and Afghanistan. The
VBA claim denial rate is twice as high for Reserve and Guard veterans,
possibly due in part to their lack of access to BDD.\47\ Consequently
the usage of this apparently better route has not been increasing as
would have been expected.\48\
---------------------------------------------------------------------------
\47\ Active Duty denial rate is 7.6 percent compared with National
Guard and Reserve denial rate of 17.8 percent. See Footnote 28.
\48\ Congressional testimony of Jack McCoy, VBA, March 16, 2006,
http://www.va.gov/OCA/testimony/hvac/sdama/060316JM.asp and a VA fact
sheet indicate 26,000 BDD claims in 2003, 39,000 in 2004, and 46,000 in
2005. http://www1.va.gov/opa/fact/tranasst.asp.
---------------------------------------------------------------------------
For veterans who are more seriously wounded, the process is more
complicated as they transition from medical facilities run by DoD into
medical facilities run by the VA. For example a wounded veteran may be
treated initially at Walter Reed Army Hospital and then transferred to
a VA facility. Veterans experience some difficulties in securing the
maximum amount of disability benefits at discharge during such
transitions, due to a lack of compatibility between the DoD and VA
paperwork and tracking systems. The VA complains that the records they
receive from DoD are delayed or contain errors, in many cases it is the
situation where the data that is tracked is not compatible. This not
only creates unnecessary problems in moving veterans through the system
but it also makes it more difficult for the data to be analyzed in
medical and other studies.
Additionally there are the problems caused by the Pentagon's poor
accounting system. GAO investigators have found that DoD pursued
hundreds of battle-injured soldiers for payment of non-existent
military debts--because DoD financial systems erroneously reported that
they were indebted. For example, one Army Reserve Staff Sergeant, who
lost his right leg below the knee, was forced to spend 18 months
disputing an erroneously recorded debt of $2,231 which prevented him
from obtaining a mortgage to purchase a home. Another staff sergeant
who suffered massive brain damage and PTSD had his pay stopped and
utilities turned off because the military erroneously recorded a debt
of $12,000. Hundreds of injured soldiers may be in this situation.\49\
---------------------------------------------------------------------------
\49\ GAO-06-494, ``Hundreds of Battle-Injured GWOT Soldiers Have
Struggled to Resolve Military Debts.''
---------------------------------------------------------------------------
Overall Assessment and Cost
Overall the U.S. is not adequately prepared for the influx of
returning servicemen from Iraq and Afghanistan. There are three major
areas in which it is not prepared: claims processing capacity for
disability benefits; medical treatment capacity, in terms of the number
of healthcare personnel available at clinics throughout the country,
particularly in mental health; and third, there is no preparation for
paying the cost of another major entitlement program.
As discussed earlier, the backlog in claims benefit is already
somewhere between 400,000 and 600,000. Unless major changes are made to
this process, the number of claims pending and requiring attention will
reach some 750,000 within the next 2 years and the pendency period will
increase proportionately, resulting in more veterans falling though the
cracks that could have been avoided. In addition, veterans whose claims
reach different centers in different parts of the country will have
widely different experiences, proving highly unfair to those who just
happen to be located in areas of greater backlog.
The quality of medical care is likely to continue to be high for
veterans with serious injuries treated in VA's new polytrauma centers.
However, the current supply of care makes it unlikely that all
facilities can offer veterans a high quality of care in a timely
fashion. Veterans with mental health conditions are most likely to be
at risk because of the lack of manpower and the inability of those
scheduling appointments to distinguish between higher and lower risk
conditions. If the current trends continue, the VA is likely to see
demand for healthcare rising to 750,000 veterans in the next few years,
which will overwhelm the system in terms of scheduling, diagnostic
testing, and visiting specialists, especially in some regions.\50\
---------------------------------------------------------------------------
\50\ However, the availability of medical care may vary
significantly by region.
---------------------------------------------------------------------------
The cost of providing disability benefits and medical care, even
under the most optimistic scenario that no additional troops are
deployed and the claims pattern is only that of the previous Gulf War,
would suggest that at a minimum the cost of providing lifetime
disability benefits and medical care is $350 billion. If the number of
unique troops increases by another 200,000 to 500,000 over a period of
years, this number may rise to as high as nearly $700bn. (See Table 5.)
The funding needs for veterans' benefits thus comprise an additional
major entitlement program along with Medicare and Social Security that
will need to be financed through borrowing if the U.S. remains in
deficit. This will in turn place further pressure on all discretionary
spending including that for additional veterans' medical care.
Table 5: Total Veterans Disability and Medical Costs \51\
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LOW MODERATE HIGH
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Disability 67.6 109.5 126.8
Medical 282.2 315.2 536.0
TOTAL ($Bn) 349.8 424.7 662.8
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In the Context of the Overall Costs of the War
Veteran's disability benefits and medical care are two of the most
significant long-term costs of the war. As shown in our previous
analysis of the costs of the war, the war has both budgetary and
economic costs. This paper focuses only on the budgetary costs of
caring for veterans. It does not take into account the value of lives
lost, or effectively lost due to grievous injury. Nor does it take into
account the economic impact of the large number of veterans living with
disabilities who cannot engage in full economic activities.\52\
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\51\ Total lifetime costs over 40 years, discounted at 4.75% under
scenarios described.
\52\ This paper considers only the budgetary costs of veterans
care. Standard economic theory would treat disability benefits as a
transfer payment and deduct these from the economic and social loss
associated with veteran's reduced economic lives. This was the
methodology used in (stiglitz paper).
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Recommendations
(a) Medical Care
The Veterans Health Administration will not be able to sustain its
high quality of care without greater funding and increased capacity in
areas such as psychiatric care and brain trauma units. In addition,
more funding should be provided for readjustment counseling services by
social workers at the Vet Centers. Even doubling the amount of funding
for counseling at the Vet Centers is a small amount compared to the
funds now being requested for additional recruiting of new soldiers.
(b) Disability Claims Backlog
There are at least three potential methods of reducing the number
of pending claims. Perhaps the easiest would be to ``fast track''
returning Iraq and Afghan war veteran's claims in a single center
staffed with a highly experienced group of adjudicators who could
provide most veterans with a decision within 90 days. At a minimum, all
simple claims could be dispatched in this manner. During the past
decade, private sector health insurance companies have reengineered
their processes and adopted technologies, such as new automated data
capture and document processing systems that have dramatically improved
their ability to handle large volumes of information. This has allowed
the industry to bring the average claim processing time down to 89.5
days. For example, the firm Noridian used technology to enable
operators to process four to five times more claims in the same amount
of time as under their old system, and to speed the form retrieval
process for better customer service.\53\
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\53\ KM World, June 1999.
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The VA has proposed a more typically governmental solution of
adding 1,000 more claims adjudicators. Even apart from the cost of $80m
or so of adding these personnel, the question is whether adding
additional personnel to a cumbersome system is the best possible way to
speed up transactions and improve service. A better idea would be to
expand the Vet Centers to offer some assistance in helping veterans
figure out their disability claims. The 1,000 claims experts could be
placed inside the Vet Centers (5 per center), thus enabling veterans
and their families to obtain quick assistance for many routine claims.
Vet Centers would only require minor modifications (secure storage
space, additional computers and offices) to fill this role.
The best solution might be to simplify the process--by adopting
something closer to the way the IRS deals with tax returns. The VBA
could simply approve all veterans' claims as they are filed--at least
to a certain minimum level--and then audit a sample of them to weed out
and deter fraudulent claims. At present, nearly 90 percent of claims
are approved. VBA claims specialists could then be redeployed to assist
veterans in making claims, especially at VA's ``Vet Centers.'' This
startlingly easy switch would ensure that the U.S. no longer leaves
disabled veterans to fend for themselves.
The cost of any solution that reduced the backlog of claims is
likely to be an increased number of claims, and a quicker pay-out. If
88% of claims were paid within 90 days instead of the 6 months to 2
years currently required, the additional budgetary cost is likely to be
in the range of $500m in 2007.
Conclusions
President Bush is now asking for more money to spend on recruiting
in order to boost the size of the Army and deploy more troops to Iraq.
But what about taking care of those same soldiers when they return home
as veterans? The number of veterans who are returning home with
injuries or disabilities is large and growing. We have not paid careful
enough attention, or devoted sufficient resources, to planning for how
to take care of these men and women who have served the nation.
There has been a tendency in the media to focus on the number of
U.S. deaths in Iraq, rather than the volume of wounded, injured, or
sick. This may have led the public to underestimate the deadliness and
long-term impact of the war on civilian society and the government's
pocketbook. Were it not for modern medical advances and better body
armor, we would have suffered even more loss of life.
One of the first votes facing the new Democratic-controlled
Congress will be yet another ``supplemental'' budget request for $100+
billion to keep the war going. The last Congress approved a dozen such
requests with barely a peep, afraid of ``not supporting our troops.''
If the new Congress really wants to support our troops, it should start
by spending a few more pennies on the ones who have already fought and
come home.
Limitations of Data
This paper has been prepared based on the best available data from
VA sources, CBO, GAO, and veterans organizations. Reconciling this data
has therefore been done to try to generate realistic estimates, but is
not precise. It is also difficult to predict with certainty the uptake
in the military of benefits and medical care. In all cases this study
has been done conservatively, for example it is entirely possible that
after the length and grueling nature of this war, that a much higher
number--perhaps \2/3\ of returning veterans--would seek disability
benefits and/or healthcare and the estimates in this paper prove too
low.
Issues Not Addressed
This paper has not attempted to address the cost of taking care of
wounded and disabled Iraqi soldiers in Iraq. A number of studies have
estimated the fatalities in Iraq, but there are few studies of the
number of injuries among the Iraqi military. As the U.S. continues to
place an emphasis on developing the Iraqi military to replace it, it is
worth asking what the cost to that country will be of providing medical
care and any kind of long-term benefits to those who are fighting. This
study excludes VBA benefits such as education, insurance, vocational
rehabilitation, and home loan guaranty programs. This study also
excludes private, state, and local healthcare, disability, and
employment benefits for returning veterans.
Acknowledgements
This paper was prepared with the invaluable assistance of Tony
Park, a student at the Kennedy School of Government, and Paul Sullivan,
Director of Research and Analysis at Veterans for America. Their
contributions are gratefully acknowledged.