[Senate Hearing 110-]
[From the U.S. Government Publishing Office]



 
   MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2009

                              ----------                              


                        THURSDAY, APRIL 10, 2008

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:08 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Tim Johnson (chairman) presiding.
    Present: Senators Johnson, Landrieu, Murray, Reed, 
Hutchison, Craig, and Allard.

                     DEPARTMENT OF VETERANS AFFAIRS

STATEMENT OF HON. JAMES B. PEAKE, M.D., SECRETARY
ACCOMPANIED BY:
        PAUL HUTTER, GENERAL COUNSEL
        ADMIRAL PAT DUNNE, ACTING ASSISTANT SECRETARY FOR BENEFITS
        DR. MIKE KUSSMAN, UNDER SECRETARY FOR HEALTH
        BOB HOWARD, ASSISTANT SECRETARY FOR INFORMATION TECHNOLOGY
        WILLIAM TUERK, UNDER SECRETARY FOR MEMORIAL AFFAIRS
        BOB HENKE, ASSISTANT SECRETARY FOR MANAGEMENT


                opening statement of senator tim johnson


    Senator Johnson. The hearing will come to order. Mr. 
Secretary, thank you for appearing before the subcommittee to 
discuss the President's 2009 budget request for the Department 
of Veterans Affairs.
    We welcome you and your associates and we look forward to 
your testimony.
    Over the past several years, Congress has provided the VA 
with substantial increases over the president's annual budget 
requests to address some of the most pressing unmet needs 
facing our country's vets. Last year, Congress provided $3.7 
billion above the president's budget request for the 
department. The bulk of this funding was dedicated to the 
Veterans Health Administration to provide medical care to vets.
    However, we also provided needed increases for hospital 
construction, benefits claims processors, and grants to correct 
deficiencies at State vet homes and cemeteries.
    All of these increases were designed to put the VA on a 
glide path to providing not just high-quality services but 
high-quality services in a timely manner and in facilities 
befitting those who have served this country.
    This year, the president's discretionary budget request for 
the VA totals $44.8 billion. This is a $1.7 billion increase, a 
mere 3.8 percent over the 2008 enacted level.
    While I understand that record budget deficits and a 
teetering economy are going to require belt tightening, I am 
nevertheless deeply concerned that this level of funding may 
not be sufficient to continue to modernize the VA system while 
providing timely services.
    At a time when we should be increasing funding for research 
in complex combat-related injuries, the budget cuts funding for 
medical research. Additionally, the budget cuts over $788 
million for the construction accounts. This is coming at a time 
when there is already a backlog of construction projects on the 
books and when many new construction projects are pending 
before the VA.
    Mr. Secretary, I fear that we are seeing only the tip of 
the iceberg in terms of the challenges the VA will be facing in 
years to come. This subcommittee stands ready to help in every 
way we can to ensure that the VA meets those challenges.
    I look forward to hearing the testimony and working with 
you as the process moves forward.
    I will now turn to Senator Hutchison for her opening 
statement.


               STATEMENT OF SENATOR KAY BAILEY HUTCHISON


    Senator Hutchison. Thank you very much, Mr. Chairman, and I 
want to say how much I appreciate, Secretary Peake, your first 
official visit as the Secretary. I also want to say that I have 
been so pleased to work so closely with you already in such a 
short time. I have worked with both you and Secretary Kussman 
before and you have been so attentive to the questions that 
we've asked. I appreciate it.
    Having been down to the Rio Grande Valley in Texas and 
looking at the facilities that are going to go in there, it has 
been a substantial improvement in veterans care, and I want to 
say that I wrote you a letter yesterday regarding the El Paso 
Veterans Center which, as you know, came in with the lowest 
grade given in the books of all the veterans facilities. You 
have already responded and I appreciate that you are now on top 
of that because not only do we have a number of veterans in El 
Paso, but we have a whole lot more who will be veterans in the 
future with the 30,000 plus-up that we're going to have at Fort 
Bliss.
    I thank you for that.
    I have just a couple of points and then I want to submit my 
full statement in the record.
    There are two areas where the VA has responded and which we 
must continue to assure that it does respond. The first is in 
the injuries that we are seeing in this war, the present new 
veterans, and that would be the posttraumatic stress syndrome 
and the mental health disorders. That program has now under our 
leadership grown to nearly $4 billion and you now have PTSD 
specialists or treatment teams in every VA medical center, 
including an increasing number of programs for women veterans.
    I'm very pleased with this priority. As you know, Senator 
Murray and I have just introduced a bill that would focus more 
on the unique women's needs in our veterans health care and you 
again, Secretary Peake, have already said that that will be a 
priority for you as well.
    And I think that the other area, of course, is the 
traumatic brain injury treatment research--that we are 
committed to, that the Veterans Administration is also doing a 
great job of promoting as well as the gulf war syndrome 
research, which is still a lingering need--and the treatment 
for the loss of limbs and the rehab that is associated with 
that.


                          PREPARED STATEMENTS


    So, we have a lot of priorities but I can't think of 
anything more important than doing it right and I know that the 
team that you are putting together is going to do that.
    So, I want to thank you. As the former chairman and present 
ranking member, I know that the Veterans Administration has 
grown a lot in the health care field and we will work with you 
to continue that growth.
    Thank you, Mr. Chairman.
    [The statements follow:]

           Prepared Statement of Senator Kay Bailey Hutchison

    Thank you, Mr. Chairman. I am pleased to welcome Secretary Peake 
and our other witnesses and guests. Today, we will examine the 
President's budget request for the Department of Veterans Affairs, 
including funds for veterans' benefits, health care, and our national 
cemeteries.
    Mr. Secretary, this subcommittee has always put our Nation's 
veterans first, and I can say with great assurance that we will do 
whatever it takes, in a bipartisan manner, to work with you to continue 
these efforts. From my experience as the recent Chair of this 
subcommittee and now as the ranking member, I respect the dedication 
and hard work of every member on this subcommittee and can assure you 
and our veterans of our support and cooperation.
    There has certainly been a lot of public discussion lately about 
the ability of the Department of Veterans Affairs to deliver on its 
promises to America's veterans. This budget requests $91 billion to 
provide health care and benefits to the men and women whom we have 
asked to secure and protect our Nation. This is $46 billion in 
mandatory benefits and $45 billion for discretionary spending, which 
includes $39 billion for medical programs.
    The Medical Services and Administration account request is $34.1 
billion, a 4.5 percent increase over the fiscal year 2008 appropriated 
level, and the Medical Facilities request is $4.7 billion, a 14 percent 
increase over the fiscal year 2008 level. I know this growth is 
necessary to keep pace with the increasing costs of medical care and 
the heightened strain on our medical facilities.
    As our brave men and women return from war, we want to be certain 
they receive the very best medical care our Nation can provide. I am 
pleased to see that your budget request keeps us on that track. I know 
it is difficult to anticipate every need, but this subcommittee will 
certainly make every effort to not only provide you the resources you 
need, but also to work with you so you can make adjustments as 
necessary to carry out your mission.
    As more of our soldiers return home with delayed Post Traumatic 
Stress Disorder (PTSD), I am pleased to see the emphasis your budget 
places on mental health and rehabilitation. The VA's mental health 
program has grown to nearly $4 billion, and the department now has PTSD 
specialists or treatment teams in every VA Medical Center, including an 
increasing number of programs for women veterans. This subcommittee 
will continue to work with you to respond to the mental health needs of 
our returning veterans.
    I am very appreciative of your recent visit to the Waco Center of 
Excellence in Mental Health. I am confident this facility is fast 
becoming a model for how consolidating personnel, training, 
collaboration and specialized resources produces world class care in 
psychiatric rehabilitation and treatment. Their work includes close 
collaboration with the research facilities at Baylor University, Texas 
A&M University Medical School, Fort Hood Army Hospital, and the Mental 
Health Association from the State of Texas. It is one of the many great 
success stories of the VA.
    I would also like to commend the VA for its research efforts. The 
VA has become the world's leader in traumatic brain injury treatment 
and research, and I am pleased with the collaborative efforts that have 
been put into investigating gulf war illness. I ask for your assurance 
that research into Gulf War illness will continue until we find a cure. 
We do not understand all of the factors that have caused serious health 
problems for our veterans who fought in the gulf region, but we are 
seeing the many effects. I am committed, as you are, to understanding 
and treating the service-connected illnesses of our gulf war veterans.
    As more of our soldiers return home with multiple traumatic 
injuries, they must receive the very best health care our Nation can 
provide. The VA manages the only nationwide network to care for 
polytrauma patients and has become the world's leader in traumatic 
brain injury rehabilitation. I am extremely pleased with the VA's 
decision to build its fifth Level I polytrauma center in San Antonio. 
The San Antonio facility will assist veterans in rehabilitation, 
transitional living, and prosthetics, and based on the VA's experiences 
at the other four facilities, I am confident we can leverage that 
knowledge to make this new facility the VA's flagship for our Nation's 
most seriously wounded veterans.
    New major construction projects like the one in San Antonio are 
vital to expand the VA's health infrastructure and handle its 
heightened workload. This has been an issue discussed many times on 
this subcommittee, but I note this year's major construction request is 
roughly half of last year's appropriation, despite the fact that there 
is more than $2.2 billion in ongoing projects that are not fully 
funded. I hope you will speak to this in your remarks, as I would like 
to hear more on the long-term capital plan of the VA.
    I would also like to thank you again for your visit to Harlingen, 
Texas and the South Texas Valley and for your support of the health 
care needs of the veterans there. I believe the current plan for health 
care in this area could be a great model for VA health care in other 
parts of the Nation. I am most interested in your thoughts and vision 
on this particular model of health care for the future, and I hope you 
will address it in your remarks.
    Mr. Secretary, I would also like to raise some concerns regarding 
the quality of veteran healthcare in El Paso, Texas. As you are aware, 
an internal Department of Veterans Affairs study on performance 
standards and healthcare delivery ranked the El Paso outpatient clinic 
well below the national average, and I find this most disturbing. I am 
committed to making sure that all of our veterans in Texas, and 
elsewhere in this country, receive the very best medical care this 
Nation can provide. I am very concerned about the veterans in El Paso 
experiencing unusually long waiting times for appointments, 
particularly specialty appointments, and having limited access to 
healthcare. I would like to know what the Department is doing to 
improve this situation and how I can be helpful to ensure that the 
veterans in the El Paso area receive the highest quality of healthcare.
    On the subject of Electronic Health Records, it is the goal of 
everyone here today to have veterans seamlessly transition from the DOD 
to the VA. As I have done many times, I would like to commend the VA 
for taking the first step in that process by setting the ``gold 
standard'' for its use of electronic health care records. I hope you 
are able to convince the Department of Defense to build on your proven 
successes and not slow this effort down. Our veterans and our Nation's 
health care professionals need this innovative technology as soon as 
possible. The VA and DOD must be able to transfer medical information 
electronically and in both directions. I witnessed the value of this 
project first hand after the devastating hurricanes that damaged so 
much of our gulf coast in 2005, and I am very proud to say that no 
veteran went untreated, a fabulous achievement for the VA and the 
electronic health records program. As this program continues to be 
developed, I hope you can tell me when it will be completed and what 
the total cost will be.
    Mr. Secretary, not only would a complete and interoperable 
electronic health care record system advance health care, it would 
speed up claims processing times, and we are very aware of the large 
backlog of claims. We are concerned that the average number of days to 
process benefits claims rose to 183 days in 2007 instead of dropping to 
160 days, as initially estimated. We don't want our veterans waiting 
any longer than absolutely necessary to have their claims processed. We 
recognize that you have aggressively hired claims examiners over the 
past 2 years, but we are concerned that the IT management practices 
designed to help process claims are not what you or we would want them 
to be. This has become one of the major issues before this 
subcommittee. As we learned from the Dole-Shalala Commission it is 
worth looking at the entire claims processing methodology to see if a 
new business process reengineering study is warranted. I welcome your 
comments on this issue as well.
    Mr. Secretary, thank you for taking on this most challenging and 
critically important position of Secretary of the Department of 
Veterans Affairs and I am very confident that your accomplishments as a 
doctor and as a Surgeon General and your vision for health care in 
America make you the right person to lead our Nation's veterans today.
                                 ______
                                 

               Prepared Statement of Senator Patty Murray

    Chairman Johnson and Senator Hutchison, thank you for holding 
today's hearing to examine the President's proposed VA Budget for 
fiscal year 2009.
    Senator Johnson, if I'm not mistaken, this is your first committee 
hearing as Chairman. Given your history of fighting for veterans, I 
know that you will do a fantastic job leading the committee.
    Secretary Peake, it is good to see you again. Nearly 2 months ago, 
you testified in front of the Senate Veterans' Affairs Committee, of 
which I am a member, on the President's proposed fiscal year 2009 VA 
budget.
    I told you then that many veterans--and many members of this 
committee--have placed a tremendous amount of faith in your ability to 
rise to the unprecedented challenges facing the VA today.
    At that time, you had only been on the job for a month and a half. 
You have now been on the job for nearly 4 months. In the short time 
that you have served as VA Secretary, I am sure that you have gained a 
better perspective on the many challenges confronting the VA system.
    That includes issues like:
  --the increasing number of Iraq and Afghanistan veterans suffering 
        from TBI and PTSD,
  --the massive claims backlog,
  --VA infrastructure upgrade needs,
  --the growing number of women veterans using the system,
  --and the unique challenges facing rural veterans, which you saw 
        firsthand when you visited Walla Walla--in my home State of 
        Washington--in February.
    I believe that while that list is long, we can make progress.
    However, I was very troubled to read the Associated Press report on 
Sunday, which found that VA employees had racked up hundreds of 
thousands of dollars on government credit cards at casinos, hotels and 
high-end retailers.
    That report raises serious questions about spending oversight at 
the VA.
    So I look forward to hearing your assessment of what happened--and 
I hope that steps have already been taken to ensure that waste and 
abuse can't happen in the future.
    Mr. Secretary, you also know from our hearing in February that I 
have a number of problems with the President's proposed VA budget.
    First and foremost, I am concerned that it closes the VA's door to 
thousands of our Nation's veterans by proposing new fees and increased 
co-pays that will discourage veterans from accessing the VA.
    While the exact cost of these new taxes on veterans is not included 
in this year's budget, in previous budgets, the administration has 
estimated that these fees and co-pays would result in:
  --nearly 200,000 veterans leaving the system,
  --and more than 1 million veterans choosing not to enroll.
    I'm also extremely disappointed that this budget continues to bar 
Priority 8 veterans from enrolling in the VA healthcare system.
    I understand that you are conducting an in-depth review of this 
policy and I will have some questions for you about this issue later.
    Second, I am concerned that this budget won't meet the real needs 
of veterans once medical inflation and other factors are considered.
    The Independent Budget estimates that the true cost of VA medical 
care is actually $1.6 billion more than the President's request.
    Along the same line, I'm also troubled that the President is 
proposing an 8 percent cut for VA medical and prosthetic research.
    As we all know, one of the signature injuries of the war in Iraq is 
traumatic brain injury. But there is still a great deal we don't know 
about the condition.
    Cutting funding for research seems like the wrong thing to do as we 
attempt to better understand the injuries our veterans are 
experiencing.
    Third, I am incredibly concerned that the President's budget 
proposes cutting funding for major and minor construction by nearly 50 
percent--at a time when the list of needed repairs and expanded 
facilities is stacking up.
    The administration's own budget documents detail the numerous 
projects that won't receive funding this year, including projects in 
Seattle, American Lake and Walla Walla.
    I continue to be absolutely shocked that at a time when thousands 
of new veterans are entering the VA system with serious medical needs 
as a result of the wars in Iraq and Afghanistan, the administration is 
underestimating the cost of medical care, and it is cutting funding for 
construction and medical and prosthetic research.
    And at a time when older veterans are seeking care in record 
numbers, I am stunned that the President is proposing fees and co-pays 
that will shut the door to thousands of patients.
    We know all too well what happens when the VA gets shortchanged. 
The men and women who have served us end up paying the biggest price.
    Our veterans are our heroes, and they deserve the best we can give 
them. I believe we can do a lot better than this budget.
    So, Secretary Peake, I have a number of questions for you, and I'm 
looking forward to your answers.

                    STATEMENT OF SENATOR LARRY CRAIG

    Senator Johnson. Senator Craig.
    Senator Craig. Mr. Chairman, thank you, and it's great to 
see you back chairing the committee.
    Mr. Chairman and Ranking Member Hutchison, let me thank you 
for the hearing today, and Secretary Peake, it's good to see 
you again and thank you for being with us. It's also good to 
see Under Secretary Tuerk. Thank you for being here.
    As many of you know, he served with me as chief counsel on 
the Veterans Affairs Committee when I chaired that a few years 
ago and did an exemplary job there and under his current 
service, I am sure that is the same.
    I'm proud to be in the unique position to serve as an 
appropriator and an authorizer for veterans issues. I think all 
of us realize the challenges that our veterans are facing. It 
is difficult but it is also fluid. Modern day veterans are 
facing issues that a generation ago were either not recognized 
or simply not understood.
    During a time of war, it is essential that the Government 
not turn a blind eye on the needs of veterans, and I think this 
Congress has provided unprecedented increases for our veterans 
to try to meet these demands. We should be proud as a Congress 
of the work we are doing and the work we've done.
    But over the past few years, I've been making the case that 
a better VA doesn't simply mean a more expensive VA. I 
mentioned the unprecedented increases over the past 5 years, 
Mr. Chairman, 11 percent, 13 percent, 15 percent. Last year, I 
believe we topped a near 18 percent in increases for VA and 
there's a practical question to be asked.
    Is that sustainable? Is that a figure that this Congress 
and with all of our budget constraints can sustain? I fully 
expect the President's budget request of $93.7 billion to reach 
upwards of a $100 billion before Congress gets through with it 
and through with the VA MILCON bill, Mr. Chairman.
    This is an enormous figure and it begs the question as to 
whether the VA can effectively and efficiently spend that kind 
of money. Simple systems of bricks and mortar? Well, I have 
suggested that we adapt to current realities. In fact, I must 
say, Mr. Chairman, there were a group of veterans in my office 
yesterday from all parts of Idaho, young men and women who had 
just served in Iraq and Vietnam, and one of them held up a 
credit card and said why can't I have a VA health card that 
allows me to enter any health care facility in my State and 
gain my benefits through this system instead of having to go to 
a specific location 400 miles from where I live to a specific 
hospital?
    In other words, he was a contemporary man, a contemporary 
veteran talking about a contemporary idea, and while I know 
that is an anathema in the system of bricks and mortars and 
bureaucracies today, I suggested to him that he as a young 
veteran start a drumbeat with veterans service organizations 
and by the time he was as old as I am, he might realize the 
opportunity to change the system, to modernize it, and to make 
it so fluid and accessible to veterans in a way that, frankly, 
I think we have to go to in the future.
    Having said that, that doesn't happen tomorrow and it 
certainly isn't going to happen in this budget, but flexibility 
in the system is growing and it should grow. We're going to 
open a new community outpatient--a CBOC, I got it right, in 
Lewiston, and that CBOC is going to contract with the local 
hospital for some of the services they cannot provide and we 
feel must be provided for the veterans. So already that type of 
thing has started.
    Last, Mr. Chairman, I would like to mention a project that 
was started in my home State of Idaho by a former director of 
the Idaho Veterans Cemetery. It's called the Missing in America 
Project and I think it serves a very worthy case.
    Mr. Chairman, I'd like to introduce into the record a 
letter I received from that former director of the Idaho 
Veterans Cemetery regarding this special program and the letter 
contains the information and five specific points I'd like the 
VA to answer and get back to me on.

                       Letter From Richard Cesler

Honorable Senator Larry Craig,
U.S. Senator Washington, DC.
    Dear Senator: I appreciate your efforts concerning the ``Missing In 
America Project'' begun in Idaho in 2006 and resulting that year in the 
recovery of 21 veterans and one spouse from Funeral Homes. On November 
9, 2007, 13 additional veterans and three spouses were given honor and 
placed in the Idaho State Veterans Cemetery.
    Those abandoned veterans deserved that honorable placement in our 
State Veterans Cemetery.
    First, however, let me thank you personally for your actions to 
remove the 2 year limitation for plot allowance claim from the Federal 
Code by the enacting of Public Law 110-157, December 26, 2007. This is 
one step towards addressing the issues of recovering our veteran 
heroes.
    My estimation is that there are at least 1,000 or more still left 
for discovery in Idaho alone. There is no law established at this time 
to extract the information from those Funeral Homes that refuse to 
corporate or ignore repeated request to at least provide a list of 
their shelved cremains. This must happen to begin the process of 
identification.
    I would like to pose several questions for the Veterans Affairs 
Secretary Dr. Peake and his staff Directors and Under Secretaries:
  --Are you aware of the issue of abandoned veterans in Funeral Homes, 
        coroner offices and other facilities around our nation.
  --What steps has the VA taken to address the issue.
  --Can the VA initiate authority to set up a new division/office to 
        address this matter.
  --Is the VA aware that several States have taken action through their 
        legal process to help in this recovery. Please be aware that 
        this is a slow and painful way to resolve what must truly be a 
        Veterans Affairs matter.
  --Will the VA take the steps necessary to begin discussion of this 
        issue.
    Thank you for allowing me to honor your achievements with regards 
to veterans during your tenure as my State Senator.
            Best regards,
                                                    Richard Cesler.

    Senator Craig. Essentially, this program works to find 
unclaimed veterans remains in coordination with funeral homes 
across the State, to identify and reinter veterans in State VA 
cemeteries. This seems like the kind of effort the VA should be 
taking a lead on and I hope that you will respond to this 
challenge.
    Related to this subject, I am pleased that the language I 
worked out last year to assist States with the interment of 
unclaimed veterans was signed into law at the close of 2007. 
This law allows the VA to reimburse States, such as Idaho, 
which identify unclaimed remains and reinter them in the State 
VA cemeteries.
    I'm very pleased that I was able to work on this 
legislation, not only to help Idaho but now to help the Nation 
with this kind of an opportunity.
    So once again, gentlemen of the VA, thank you for being 
with us and, Mr. Chairman, thank you, look forward to working 
with you as we bring about the critical and necessary budget 
for our veterans.
    Senator Johnson. There is a vote called, Floor votes.
    Senator Craig. Just now?
    Senator Johnson. Just now. Senator Allard, would you like 
to make a brief statement?
    Senator Allard. Yes, I would like to, if I might, then be 
ready to line up with everybody else for the questioning 
period.
    You're going to continue with questions after our votes, I 
assume?
    Senator Johnson. Yes.
    Senator Allard. Okay. Very good.

                   STATEMENT OF SENATOR WAYNE ALLARD

    Senator Allard. Thank you, Mr. Chairman, for holding this 
important hearing today, and I appreciate all our witnesses 
appearing before the committee this afternoon.
    You know, it's a very difficult time in our Nation's 
history. We have currently in the United States more than 23 
million living veterans, 800,000 of which are veterans 
returning from Operation Enduring Freedom and Operation Iraqi 
Freedom operations.
    As this war continues, the United States will be faced with 
an increasing need for veteran services. Our men and women 
returning from war deserve our utmost care and attention as 
does all our veterans who have so admirably served in the past.
    We're dealing with a different kind of injury than what we 
had in conflicts in the past that we will have to continue to 
deal with throughout the life of the soldiers.
    While it's vitally important to provide our veterans with 
the best service possible, it's also important that we watch 
our Federal spending and look to reduce our Federal debt 
wherever possible in the coming years.
    That being said, it's important that we continue to 
prioritize programs and ensure efficient spending. I hope that 
we're able to answer the needs for all these men and women who 
have been called to serve their country and have done so 
courageously.
    Mr. Secretary, I look forward to discussing these issues 
further this afternoon, and I'd like to again reiterate my 
thanks for appearing in front of us today and looking forward 
to your testimony.
    Thank you, Mr. Chairman.
    Senator Johnson. Yes.
    Senator Hutchison. Mr. Chairman, were you going to recess 
the meeting until after all of the votes?
    Senator Johnson. After all the votes.
    Senator Hutchison. The five?
    Senator Johnson. After the five votes. Mr. Secretary, I 
apologize, but we need to put this hearing into a short recess.
    Senator Hutchison. Five votes, an hour and a half or so.
    Senator Johnson. Yes.
    Senator Hutchison. Sorry.
    Senator Johnson. This hearing will come to order. I 
apologize for the delay.

                      STATEMENT OF JAMES B. PEAKE

    Secretary Peake. With your permission, Mr. Chairman, I have 
a written statement that I would like to submit for the record.
    Senator Johnson. That will be fine.
    Secretary Peake. Mr. Chairman, ladies and gentlemen of the 
committee, I am honored to be here as the sixth Secretary of 
Veterans Affairs and now responsible for the care of our 
veterans. I appreciate the opportunity that the President has 
given to be able to make a difference.
    With me today to present the President's 2009 budget 
proposal for VA is the leadership of our Department. On my far 
left are General Counsel Paul Hutter, Admiral Pat Dunne, our 
Acting Assistant Secretary for Benefits, Dr. Mike Kussman, 
Brigadier General Mike Kussman, our Under Secretary for Health. 
On my far right, Bob Howard, our Assistant Secretary for 
Information Technology, our Under Secretary for Memorial 
Affairs Bill Tuerk, and Mr. Bob Henke, Assistant Secretary for 
Management.
    In my now nearly 3\1/2\ months at the VA, I have seen both 
the compassion and the professionalism of our employees. It is, 
frankly, just what I expected. The culture is one of deep 
respect for the men and women that we serve.
    This group at the table and the VA at large understands 
that America is at war and it is not business as usual. I 
appreciate the importance of and I look forward to working with 
this committee to build on VA's past successes but also to look 
to the future to ensure veterans continue to receive timely, 
accessible delivery of high-quality benefits and services 
earned through their sacrifice and service and that we meet the 
needs of each segment of our veterans population.
    The President's request totals nearly $93.7 billion, $46.4 
billion for entitlement programs and $47.2 billion for 
discretionary programs. The total request is $3.4 billion above 
the funding level for 2008 and that funding level is the one 
that includes a $3.7 billion plus-up from the emergency 
funding.
    This budget will allow the VA to address the areas critical 
to our mission; i.e., providing timely, accessible, high-
quality health care to our highest-priority patients. We will 
advance our collaborative efforts with the Department of 
Defense to ensure the continued provision of worldclass health 
care and benefits to VA and DOD beneficiaries, including the 
progress toward development of secure interoperable electronic 
medical records systems.
    We will improve the timeliness and accuracy of our claims 
processing and ensure the burial needs of veterans and their 
eligible family members are met and maintain veteran cemeteries 
as national shrines.
    The young men and women in uniform who are returning from 
Iraq and Afghanistan and their families represent a new 
generation of veterans. Their transition and reintegration into 
our civilian society when they take off that uniform is a prime 
focus. Those seriously injured must be able to transition 
between the DOD and VA systems as they move on their journey of 
recovery.
    This budget funds our polytrauma centers and sustains the 
network of polytrauma care that Dr. Kussman and his team have 
put in place. It funds the Federal recovery coordinators 
envisioned by the report of the Dole-Shalala Commission and 
sustains the ongoing case management at all levels of our 
system.
    We know that our prostheses must keep pace with the newest 
generation of prostheses as our wounded warriors transition 
into the VA system and you will see a 10 percent increase in 
our budget for this.
    In 2009, we expect about 333,000 OEF/OIF veterans, a 14 
percent increase. With the potential of rising costs per 
patient, we have budgeted a 21 percent increase in our costs. 
That is nearly $1.3 billion to meet the needs of the OEF/OIF 
veterans that we expect will come to the VA for medical care.
    This budget will sustain our outreach activities that range 
from more than 799,000 letters to the greater than 205,000 
engagements that our vet center outreach personnel have made 
with returning National Guard and Reserve units as part of the 
Post Deployment Health Reassessment process. VBA alone 
conducted about 8,000 military briefings to nearly 300,000 
service men and women. This is also part of seamless 
transition.
    Now with the authority to provide care for 5 years of 
service-related issues, we can without bureaucracy offer the 
counseling, support and care that might be needed to avert or 
mitigate future problems. I highlight the outreach because we 
want these men and women to get those services.
    Mental health, from PTSD to depression to substance abuse, 
are issues that I know are of concern to you and of great 
concern to us. This budget proposes $3.9 billion for mental 
health across the board, a 9 percent increase from 2008. It 
will allow us to sustain an access standard that says if you 
show up for mental health, you will be screened in 24 hours and 
within 14 days have a full mental health evaluation, if needed. 
It will keep expanding mental health access according to a 
uniform mental health package. Trained mental health 
professionals in each CBOC, and there are 51 new CBOCs, by the 
way, planned for 2009, in addition to the 64 that are coming 
from 2008.
    Our vet centers will bring on yet an additional hundred 
OIF/OEF counselors and Dr. Kussman is prepared, as needed, to 
identify and add additional vet centers.
    We appreciate the issues of rural access in this arena and 
our vet centers are budgeted for 50 new vans to support remote 
access and this budget supports their operation as well as 
expanding telemental health to 25 locations.
    But this budget and our mission is more than just about 
these most recently returning service men and women. We should 
remember that 20 percent of VA patients, who in general are 
older and with more comorbid conditions than the general 
population have a mental health diagnosis.
    In fiscal year 2007, we saw 400,000 veterans of all eras 
with PTSD. This budget will sustain VA's internationally 
recognized network of more than 200 specialized programs for 
the treatment of posttraumatic stress disorder through our 
medical centers and clinics that serve all of our veterans.
    We have a unique responsibility to serve those who have 
served before. We still have one World War I veteran in our 
fold. World War II and Korea veterans are recipients of our 
geriatric care and our efforts are aimed at improving long-
term, not institutional, care where in this budget we have 
increased funding by 28 percent will make a huge difference in 
their quality of life.
    We have currently 32,000 people served by home telehealth 
programs. This budget continues our work in this area and in 
the expansion of home-based primary care. Overall, the 
President's 2009 budget includes a total of $41.2 billion for 
VA medical care, an increase of $2.3 billion over the 2008 
level and more than twice the funding available at the 
beginning of the administration.
    With it, we will provide quality care, improve access, and 
expand special services to the 5,771,000 patients we expect to 
treat in 2009. That is 1.6 percent above our current 2008 
estimate.
    In April 2006, there were over 250,000 unique patients 
waiting more than 30 days for their desired appointment date. 
That's too many. As of January 1, 2008, we had reduced the 
waiting list to just over 69,000. At the end of March, it was 
down to 45,000. Our budget request for 2009 provides the 
resources to virtually eliminate the waiting list by the end of 
next year.
    Information technology crosscuts the entire Department and 
this budget provides more than $2.4 billion for this vital 
function, 19 percent above our 2008 budget, and reflects the 
realignment of all IT operations and functions under the 
management control of our chief information officer.
    A majority, $261 million, of that increase in IT funds will 
support VA's Medical Care Program, particularly VA's electronic 
health record system. I emphasize it here because it is so 
central to the care that we provide, touted in such 
publications as the book ``Best Care Anywhere'' as the key to 
our quality that is lauded worldwide.
    This IT budget also includes all the infrastructure 
support, such as hardware, software, communications systems for 
those 51 CBOCs that I mentioned, and there is $93 million for 
cyber security, continuing us on the road to being the gold 
standard.
    IT will also be key as we begin to move our claims model 
down the road to a paperless process. It is an investment we 
must make. This budget sustains the work in VetsNet that is 
giving us management data to really get after our claims 
processing and Virtual VA, our electronic data repository.
    In addition to IT, this budget sustains a 2-year effort to 
hire and train 3,100 new staff to achieve our 145-day goal for 
processing comp and pension claims in 2009. This is a 38-day 
improvement in processing timeliness from 2007 and a 24-day or 
14 percent reduction from this year.
    This is important because the volume of claims receipts is 
projected to reach 872,000 in 2009, a 51 percent increase since 
2000. The active, Reserve and National Guard returning from OIF 
and OEF have contributed to an increase in new claims and bring 
with them an increased number of issues with each claim.
    If you look at the graph there, you see the claims going up 
in the bottom line. The issues, the number of individual pieces 
of that claim, number of individual issues growing 
significantly at a faster rate, and what our VBA has been able 
to do, even with that, as you see in the middle, the average 
number of days to complete has remained relatively stable and 
we intend to bring that down with these new people.
    The President's 2009 budget includes seven legislative 
proposals totaling $42 million. One of these proposals expands 
legislative authority to cover payments for specialized 
residential care and rehab in VA-approved medical foster homes 
for OIF and OEF veterans with TBIs, as an example.
    We again bring to you a request for enrollment fees for 
those who can afford to pay and for a raise in the co-pays. 
Again this does not affect our VA budget as the funds would 
return to the Treasury, that's $5.2 billion over 10 years, but 
it does reflect the matter of equity for those veterans who 
have spent a full career in the service and under TRICARE do 
pay an annual enrollment fee for life care.
    The 442 million to support VA's Medical and Prosthetic 
Research Program, though less than what we have from the 
augmented 2008 budget, is actually 7.3 percent more than what 
we received in 2006 and about 7.5 percent more than what we 
actually asked for in 2007 and 2008.
    It does contain $252 million devoted to research projects 
focused specifically on veterans returning from service in 
Afghanistan and Iraq, including projects on TBI and polytrauma 
and spinal code injury and prosthetics and burn injury and pain 
and postdeployment mental health. In fact, we anticipate with 
Federal and other grants a full research portfolio of about 
$1.85 billion.
    This budget request includes just over a billion in capital 
funding for VA, with resources to continue five medical 
facility projects already underway in Denver, in Orlando, in 
Lee County, Florida, San Juan and St. Louis, and to begin three 
new medical facility projects at Bay Pines, Tampa, Palo Alto, 
two of which relate to the polytrauma rehabilitation centers 
and continue our priority for this specialized area of 
excellence.
    And finally, we will perform 111,000 interments in 2009, 11 
percent more than in 2007. The $181 million in this budget for 
the National Cemetery Administration is 71 percent above the 
resources available to the Department's Burial Program when the 
President took office.
    These resources will operationalize the six new national 
cemeteries that will open this year, providing a VA burial 
option to nearly 1 million previously unserved veteran families 
and will maintain our cemeteries as national shrines that will 
again earn the highest marks in the government or private 
sector for customer satisfaction.

                           PREPARED STATEMENT

    This budget of nearly $93.7 billion, nearly double from 7 
years ago, and with a health care component more than twice 
what it was 7 years ago, will allow us to make great progress 
in the care of all of our veterans and will keep us on this 
quality journey in health and the management of an 
extraordinary benefit and in ensuring the excellence of our 
final tribute to those who shall have borne the battle.
    It's an honor to be with you today and I look forward to 
your questions.
    [The statement follows:]

                  Prepared Statement of James B. Peake

    Mr. Chairman and members of the committee, good afternoon. I am 
happy to be here and I am deeply honored that the President has given 
me the opportunity to serve as Secretary of Veterans Affairs. I look 
forward to working with you to build on VA's past successes to ensure 
veterans continue to receive timely, accessible delivery of high-
quality benefits and services earned through their sacrifice and 
service in defense of freedom.
    I am here today to present the President's 2009 budget proposal for 
VA. The request totals nearly $93.7 billion--$46.4 billion for 
entitlement programs and $47.2 billion for discretionary programs. The 
total request is $3.4 billion above the funding level for 2008. The 
President's ongoing commitment to those who have faithfully served this 
country in uniform is clearly demonstrated through this budget request 
for VA. Resources requested for discretionary programs in 2009 are more 
than double the funding level in effect when the President took office 
7 years ago.
    The President's request for 2009 will allow VA to achieve 
performance goals in four areas critical to the achievement of our 
mission:
  --provide timely, accessible, and high-quality health care to our 
        highest priority patients--veterans returning from service in 
        Operation Enduring Freedom and Operation Iraqi Freedom, 
        veterans with service-connected disabilities, those with lower 
        incomes, and veterans with special health care needs;
  --advance our collaborative efforts with the Department of Defense 
        (DOD) to ensure the continued provision of world-class health 
        care and benefits to VA and DOD beneficiaries, including 
        progress towards the development of secure, interoperable 
        electronic medical record systems;
  --improve the timeliness and accuracy of claims processing; and
  --ensure the burial needs of veterans and their eligible family 
        members are met and maintain veterans' cemeteries as national 
        shrines.

ENSURING A SEAMLESS TRANSITION FROM ACTIVE MILITARY SERVICE TO CIVILIAN 
                                  LIFE

    One of our highest priorities is to ensure that veterans returning 
from service in Operation Enduring Freedom and Operation Iraqi Freedom 
receive everything they need to make their transition back to civilian 
life as smooth and easy as possible. We will take all measures 
necessary to provide them with timely benefits and services, to give 
them complete information about the benefits they have earned through 
their courageous service, and to implement streamlined processes free 
of bureaucratic red tape.
    We will provide timely, accessible, and high-quality medical care 
for those who bear the permanent physical scars of war as well as 
compassionate care for veterans who suffer from less visible but 
equally serious and debilitating mental health issues, including 
traumatic brain injury (TBI) and post-traumatic stress disorder (PTSD). 
Our treatment of those with mental health conditions will include 
veterans' family members who play a critical role in the care and 
recovery of their loved ones. To help meet the increased need for 
mental health services, especially those returning from the Global War 
on Terror, VA is expanding its training program for psychologists. The 
best resource for VA recruitment of psychologists has been the 
Department's own training program. Nearly three-quarters of the 
psychologists hired in the last 2 years have had VA training.
    The President's top legislative priority for VA is to implement the 
recommendations of the President's Commission on Care for America's 
Returning Wounded Warriors (Dole-Shalala Commission). The Commission's 
report provides a powerful blueprint to move forward with ensuring that 
service men and women injured during the Global War on Terror continue 
to receive the health care services and benefits necessary to allow 
them to return to full and productive lives as quickly as possible. VA 
has initiated studies to determine appropriate payment levels for 
quality of life, transition assistance, and loss of earnings. The next 
step is for Congress to pass the President's legislation, which will 
modernize the disability compensation system. VA is working closely 
with officials from DOD on the recommendations of the Dole-Shalala 
Commission that do not require legislation to help ensure veterans 
achieve a smooth transition from active military service to civilian 
life.
    For example, VA and DOD signed an agreement in October 2007 to 
provide Federal recovery coordinators to ensure medical services and 
other benefits are provided to seriously-wounded, injured, and ill 
active duty service members and veterans. VA hired the first recovery 
coordinators, in coordination with DOD, and they are located at Walter 
Reed Army Medical Center, National Naval Medical Center, and Brooke 
Army Medical Center. They will coordinate services between VA and DOD 
and, if necessary, private-sector facilities, while serving as the 
ultimate resource for families with questions or concerns about VA, 
DOD, or other Federal benefits.
    In November 2007, VA and DOD began a pilot disability evaluation 
system for wounded warriors at the major medical facilities in the 
Washington, DC area--Washington VA Medical Center, Walter Reed Army 
Medical Center, National Naval Medical Center, and Malcolm Grow Medical 
Center. This initiative is designed to eliminate the duplicative and 
often confusing elements of the current disability processes of the two 
departments. Key features of the disability evaluation system pilot 
include one medical examination and a single disability rating 
determined by VA. The single disability examination is another 
improvement resulting from the recommendations of the Dole-Shalala 
Commission and is aimed at simplifying benefits, health care, and 
rehabilitation for injured service members and veterans.
    VA will continue to work with Congress, DOD, and other Federal 
agencies to aggressively move forward with implementing the Dole-
Shalala Commission recommendations.

                              MEDICAL CARE

    The President's 2009 request includes total budgetary resources of 
$41.2 billion for VA medical care, an increase of $2.3 billion over the 
2008 level and more than twice the funding available at the beginning 
of the Bush administration. Our total medical care request is comprised 
of funding for medical services ($34.08 billion), medical facilities 
($4.66 billion), and resources from medical care collections ($2.47 
billion). We have included funds for medical administration as part of 
our request for medical services. Merging these two accounts will 
improve and simplify the execution of our budget and will make it 
easier for us to respond rapidly to unanticipated changes in the health 
care environment throughout the year. We appreciate Congress providing 
us with the authority to transfer funding between our medical care 
accounts. We will need to exercise this authority in 2008 to help 
ensure we operate a balanced medical program.
    Information technology (IT) plays a vital role in direct support of 
our medical care program and VA is requesting a significant increase in 
IT funding in 2009, much of which will help ensure we continue to 
provide timely, safe, and high-quality health care services. The most 
critical component of our medical IT program is the continued operation 
and improvement of our electronic health record system, a Presidential 
priority which has been recognized nationally for increasing 
productivity, quality, and patient safety. We must continue the 
progress we have made with DOD to develop secure, interoperable 
electronic medical record systems which is a critical recommendation in 
the Dole-Shalala Commission report. The availability of medical data to 
support the care of patients shared by VA and DOD will enhance our 
ability to provide world-class care to veterans and active duty 
members, including our wounded warriors returning from Afghanistan and 
Iraq.

Workload
    During 2009, we expect to treat about 5,771,000 patients. This 
total is nearly 90,000 (or 1.6 percent) above the 2008 estimate. Our 
highest priority patients (those in priorities 1-6) will comprise 67 
percent of the total patient population in 2009, but they will account 
for 84 percent of our health care costs.
    We expect to treat about 333,000 veterans in 2009 who served in 
Operation Enduring Freedom and Operation Iraqi Freedom. This is an 
increase of 40,000 (or 14 percent) above the number of veterans from 
these two campaigns that we anticipate will come to VA for health care 
in 2008, and 128,000 (or 62 percent) more than the total in 2007.
Funding for Major Health Care Initiatives
    In 2009 we are requesting nearly $1.3 billion to meet the needs of 
the 333,000 veterans with service in Operation Enduring Freedom and 
Operation Iraqi Freedom whom we expect will come to VA for medical 
care. This is an increase of $216 million (or 21 percent) over our 
resource needs to care for these veterans in 2008.
    The Department's resource request includes $3.9 billion in 2009 to 
continue our effort to improve access to mental health services across 
the country. This is an increase of $319 million, or 9 percent, above 
the 2008 level. These funds will help ensure VA continues to realize 
the aspirations of the President's New Freedom Commission Report, as 
embodied in VA's Mental Health Strategic Plan, to deliver exceptional, 
accessible mental health care. The Department will place particular 
emphasis on providing care to those suffering from PTSD as a result of 
their service in Operation Enduring Freedom and Operation Iraqi 
Freedom. An example of our firm commitment to provide the best 
treatment available to help veterans recover from these mental health 
conditions is our increased outreach to veterans of the Global War on 
Terror, as well as increased readjustment and PTSD services. Our 
strategy for improving access includes increasing mental health care 
staff and expanding our telemental health program that allows us to 
reach about 20,000 additional patients with mental health conditions 
each year.
    Our 2009 request includes $762 million for non-institutional long-
term care services, an increase of $165 million, or 28 percent, over 
2008. By enhancing 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 health care, home-based primary care, 
purchased skilled home health care, homemaker/home health aide 
services, home respite and hospice care, and community residential 
care. During 2009 we will increase the number of patients receiving 
non-institutional long-term care, as measured by the average daily 
census, to about 61,000. This represents a 38 percent increase above 
the level we expect to reach in 2008.
    VA's medical care request includes nearly $1.5 billion to support 
the increasing workload associated with the purchase and repair of 
prosthetics and sensory aids to improve veterans' quality of life. This 
is $134 million, or 10 percent, above the funding level in 2008. This 
increase in resources for prosthetics and sensory aids will allow the 
Department to meet the needs of the growing number of injured veterans 
returning from combat in Afghanistan and Iraq.
    Requested funding for the Civilian Health and Medical Program of 
the VA (CHAMPVA) totals just over $1 billion in 2009, an increase of 
$145 million (or 17 percent) over the 2008 resource level. Claims paid 
for CHAMPVA benefits are expected to grow by 9 percent (from 7.0 
million to 7.6 million) between 2008 and 2009 and the cost of 
transaction fees required to process electronic claims is rising as 
well.
    Our budget request contains $83 million for facility activations. 
This is $13 million, or 19 percent, above the resource level for 
activations in 2008. As VA completes projects within our Capital Asset 
Realignment for Enhanced Services (CARES) program, we will need 
increased funding to purchase equipment and supplies for newly 
constructed and leased buildings.
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 health care. VA has received numerous accolades from 
external organizations documenting the Department's leadership position 
in providing world-class health care to veterans. For example, our 
record of success in health care delivery is substantiated by the 
results of the December 2007 American Customer Satisfaction Index 
(ACSI) survey. Conducted by the National Quality Research Center at the 
University of Michigan Business School and the Federal Consulting 
Group, the ACSI survey found that customer satisfaction with VA's 
health care system was higher than the private sector for the eighth 
consecutive year. The data revealed that patients at VA medical centers 
recorded a satisfaction level of 83 out of a possible 100 points, or 6 
points higher than the rating for care provided by the private-sector 
health care industry.
    In December 2007 the Congressional Budget Office (CBO) issued a 
report highlighting the success of VA's health care system. In this 
report--The Health Care System for Veterans: An Interim Report--the CBO 
identified organizational restructuring and management systems, the use 
of performance measures to monitor key processes and health outcomes, 
and the application of health IT as three of the major driving forces 
leading to high-quality health care delivery in VA. In October 2007, 
the Institute of Medicine released a report--Treatment of PTSD: An 
Assessment of The Evidence--that states VA's use of exposure-based 
therapies for the treatment of PTSD is effective. This confirms the 
Department's own conclusions and bolsters our efforts to continue to 
effectively treat veterans of the Global War on Terror who are 
suffering from PTSD and other mental health conditions.
    These external acknowledgments of the superior quality of VA health 
care reinforce the Department's own findings. We use two primary 
measures of health care 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 86 percent in 2009, or a 1 percentage 
point rise over the level we expect to achieve in 2008. As an indicator 
aimed at primary prevention and early detection recommendations dealing 
with immunizations and screenings, the prevention index will also grow 
by 1 percentage point above the estimated 2008 level, reaching 89 
percent in 2009.
    To deal with a nationwide shortage of nurses and to improve the 
quality of care for veterans, VA has created a travel nurse corps to 
enable nurses to travel and work throughout the Department's health 
care system. Beginning as a 3-year pilot, the travel nurse corps is 
based at the Phoenix VA Health Care System and will place as many as 75 
nurses at VA medical centers around the country. Participating nurses 
may be temporarily assigned to distant medical centers and clinics to 
help nursing staffs that have vacancies, reduce wait times, or maintain 
high-skill services and procedures.

Access to Care
    In April 2006 there were over 250,000 unique patients waiting more 
than 30 days for their desired appointment date for health care 
services. As of March 1, 2008, we had reduced the waiting list to fewer 
than 49,000. Our budget request for 2009 provides the resources 
necessary for the Department to virtually eliminate the waiting list by 
the end of next year. Improvements in access to health care will result 
in part from the opening of new community-based outpatient clinics 
during the next 2 years, bringing the total number to 846 by the end of 
2009.
    The Department will expand its telehealth program which is a 
critical component of VA's approach to improve access to health care 
for veterans living in rural and remote areas. Other strategies include 
increasing the number of community-based outpatient clinics and 
enhancing VA's participation in the National Rural Development 
Partnership that serves as a forum for identifying, discussing, and 
acting on issues affecting those residing in rural areas. In 2009 the 
Department's Office of Rural Health will conduct studies to evaluate 
VA's rural health programs and develop policies and additional programs 
to improve the delivery of health care to veterans living in rural and 
remote areas. In addition, VA created a Rural Health National Advisory 
Committee in February 2008 to advise the Department's senior leaders 
about health care issues affecting veterans in rural areas. The 
committee members will come from the Federal, State, and local sectors, 
as well as from academia and veterans service organizations.

Medical Collections
    The Department expects to receive nearly $2.5 billion from medical 
collections in 2009, which is $126 million, or more than 5 percent, 
above our projected collections for 2008. About $8 of every $10 in 
additional collections will come from increased third-party insurance 
payments, with almost all of the remaining collections resulting from 
growing pharmacy workload. We will continue several initiatives to 
strengthen our collections processes, including expanded use of both 
the Consolidated Patient Account Center to increase collections and 
improve operational performance, and the Insurance Card Buffer system 
to improve third-party insurance verification. In addition, we will 
enhance the use of real-time outpatient pharmacy claims processing to 
facilitate faster receipt of pharmacy payments from insurers and will 
expand our campaign to increase the number of payers accepting 
electronic coordination of benefits claims.

Legislative Proposals
    The President's 2009 budget includes seven legislative proposals 
totaling $42 million. One of these proposals expands legislative 
authority to cover payment of specialized residential care and 
rehabilitation in VA-approved medical foster homes for veterans of 
Operation Enduring Freedom and Operation Iraqi Freedom who suffer from 
TBI. Another proposal would reduce existing barriers to the early 
diagnosis of human immunodeficiency virus (HIV) infection by removing 
requirements for separate written informed consent for HIV testing 
among veterans. This change would ensure that patients treated by VA 
receive the same standard of HIV care that is recommended to non-VA 
patients.
    The 2009 budget also contains three legislative proposals which ask 
veterans with comparatively greater means and no compensable service-
connected disabilities to assume a modest share of the cost of their 
health care. They are exactly the same as proposals submitted but not 
enacted in the 2008 budget. The first proposal would assess Priority 7 
and 8 veterans with an annual enrollment fee based on their family 
income:

------------------------------------------------------------------------
                                                              Annual
                      Family Income                         Enrollement
                                                                Fee
------------------------------------------------------------------------
Under $50,000...........................................         ( \1\ )
$50,0000-74,999.........................................            $250
$75,000-99,999..........................................             500
$100,000 and above......................................             750
------------------------------------------------------------------------
\1\ None.

    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 equalize co-payment 
treatment for veterans regardless of whether or not they have 
insurance.
    These legislative proposals have been identified in VA's budget 
request for several years. The proposals are consistent with the 
priority system of health care established by Congress, a system which 
recognizes that priority consideration must be given to veterans with 
service-disabled conditions, those with lower incomes, and veterans 
with special health care needs.
    These proposals have no impact on the resources we are requesting 
for VA medical care as they do not reduce the discretionary medical 
care resources we are seeking. Our budget request includes the total 
funding needed for the Department to continue to provide veterans with 
timely, accessible, and high-quality medical services that set the 
national standard of excellence in the health care industry. Instead, 
these three provisions, if enacted, would generate an estimated $2.3 
billion in revenue from 2009 through 2013 that would be deposited into 
a mandatory account in the Treasury.
    One of our highest legislative priorities is to establish the 
position of Assistant Secretary for Acquisition, Logistics, and 
Construction. The person occupying this new position would serve as 
VA's Chief Acquisition Officer, a position required by the Services 
Acquisition Reform Act of 2003. This will elevate the importance of 
these critical functions to the level necessary to coordinate their 
policy direction across the Department's programs and other government 
agencies. An Assistant Secretary with focused policy responsibility for 
acquisition, logistics, and construction would ensure these vital 
activities receive the visibility they need at the highest levels of 
VA. Legislation to accomplish this was introduced in the Senate on 
October 4, 2007, as S. 2138. We would appreciate Congress' support of 
this legislation.

                            MEDICAL RESEARCH

    VA is requesting $442 million to support VA's medical and 
prosthetic research program. Our request will fund nearly 2,000 high-
priority research projects to expand knowledge in areas critical to 
veterans' health care needs, most notably research in the areas of 
mental illness ($53 million), aging ($45 million), health services 
delivery improvement ($39 million), cancer ($37 million), and heart 
disease ($33 million).
    One of our highest priorities in 2009 will be to continue our 
aggressive research program aimed at improving the lives of veterans 
returning from service in Operation Enduring Freedom and Operation 
Iraqi Freedom. The President's budget request for VA contains $252 
million devoted to research projects focused specifically on veterans 
returning from service in Afghanistan and Iraq. This includes research 
in TBI and polytrauma, spinal cord injury, prosthetics, burn injury, 
pain, and post-deployment mental health. Our research agenda includes 
cooperative projects with DOD to enhance veterans' seamless transition 
from military treatment facilities to VA medical facilities, 
particularly in the treatment of veterans suffering from TBI.
    The President's request for research funding will help VA sustain 
its 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 have direct application to 
improved clinical care include the use of a neuromotor prosthesis to 
help replace or restore lost movement in paralyzed patients, continued 
development of an artificial retina for those who have lost vision due 
to retinal damage, use of an inexpensive generic drug (prazosin) to 
improve sleep and reduce trauma nightmares for veterans with PTSD, and 
advancements in identifying a new therapy to prevent or slow the 
progression of Alzheimer's disease.
    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 2009. Through a combination of VA resources and funds from 
outside sources, the total research budget in 2009 will be almost $1.85 
billion.

                       GENERAL OPERATING EXPENSES

    The Department's 2009 resource request for General Operating 
Expenses (GOE) is $1.7 billion. Within this total GOE funding request, 
nearly $1.4 billion is for the management of the following non-medical 
benefits administered by the Veterans Benefits Administration (VBA)--
disability compensation; pensions; education; housing; vocational 
rehabilitation and employment; and insurance. The 2009 budget request 
provides VBA over two times the level of discretionary funding 
available when the President took office and underscores the priority 
this administration places on improving the timeliness and accuracy of 
claims processing. Our request for GOE funding also includes $328 
million to support General Administration activities.
Compensation and Pensions Workload and Performance Management
    A major challenge in improving the delivery of compensation and 
pension benefits is the steady and sizeable increase in workload. The 
volume of claims receipts is projected to reach 872,000 in 2009--a 51 
percent increase since 2000.
    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 at 
least for the near term. 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 54 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, cardiovascular disease, orthopedic problems, 
and hearing loss. As these veterans age and their conditions worsen, VA 
experiences 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 increased by 
168 percent during the last 7 years, reaching over 58,500 claims in 
2007. Over one-quarter of all 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, TBI, environmental and infectious risks, 
complex combat-related injuries, and complications resulting from 
diabetes. Claims now take 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 and the Office of the General Counsel.
    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, the Department is now required to review the 
claims at more points in the adjudication process.
    VA will address its ever-growing workload challenges in several 
ways. For example, we will enhance our use of information technology 
tools to improve claims processing. In particular, our claims 
processors will have greater on-line access to DOD medical information 
as more categories of DOD's electronic records are made available 
through the Compensation and Pension Records Interchange project. We 
will also strengthen our investment in Virtual VA, which will reduce 
our reliance upon paper-based claims folders and enable accessing and 
transferring electronic images and data through a Web-based 
application. Virtual VA will also dramatically increase the security 
and privacy of veteran data. The Department will continue to move work 
among regional offices in order to maximize our resources and enhance 
our performance. Also, this year we will complete the consolidation of 
original pension claims processing to three pension maintenance centers 
which will relieve regional offices of their remaining pension work. In 
addition, we will further advance staff training and other efforts to 
improve the consistency and quality of claims processing across 
regional offices.
    Using resources available in 2008, we are aggressively hiring 
additional staff. By the beginning of 2009, we expect to complete a 2-
year effort to hire about 3,100 new staff. This increase in staffing is 
the centerpiece of our strategy to achieve our 145-day goal for 
processing compensation and pension claims in 2009. This represents a 
38-day improvement (or 21 percent) in processing timeliness from 2007 
and a 24-day (or 14 percent) reduction in the amount of time required 
to process claims this year.
    In addition, we anticipate that our pending inventory of disability 
claims will fall to about 298,000 by the end of 2009, a reduction of 
more than 94,000 (or 24 percent) from the pending count at the close of 
2007. At the same time we are improving timeliness, we will also 
increase the accuracy of the compensation claims we adjudicate, from 88 
percent in 2007 to 92 percent in 2009.
Education and Vocational Rehabilitation and Employment Performance
    With the resources provided in the President's 2009 budget request, 
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 13 days during the 
next 2 years, falling from 32 days in 2007 to 19 days in 2009. During 
this period, the average time it takes to process supplemental claims 
will improve from 13 days to just 10 days. These performance 
improvements will be achieved despite an increase in workload. The 
number of education claims we expect to receive will reach about 
1,668,000 in 2009, or 9 percent higher than last year. In addition, the 
rehabilitation rate for the vocational rehabilitation and employment 
program will climb to 76 percent in 2009, a gain of 3 percentage points 
over the 2007 performance level. The number of program participants is 
projected to rise to 91,700 in 2009, or 5 percent higher than the 
number of participants in 2007.
Funding for Initiatives
    Our 2009 request includes $10.8 million for initiatives to improve 
performance and operational processes throughout VBA. Of this total, 
$8.7 million will be used for a comprehensive training package covering 
almost all of our benefits programs. A little over one-half of the 
resources for this training initiative will be devoted to compensation 
and pension staff while nearly one-quarter of the training funds will 
be for staff in the vocational rehabilitation and employment program. 
These training programs include extensive instruction for new employees 
as well as additional training to raise the skill level of existing 
staff. Our robust training program is a vital component of our ongoing 
effort to improve the quality and consistency of our claims processing 
decisions and will enable us to be more flexible and responsive to 
changing workload demands.

                    NATIONAL CEMETERY ADMINISTRATION

    Results from the December 2007 ACSI survey conducted by the 
National Quality Research Center at the University of Michigan and the 
Federal Consulting Group revealed that for the second consecutive time 
VA's national cemetery system received the highest rating in customer 
satisfaction for any Federal agency or private sector corporation 
surveyed. The Department's cemetery system earned a customer 
satisfaction rating of 95 out of a possible 100 points. These results 
highlight that VA's cemetery system is a model of excellence in 
providing timely, accessible, and high-quality services to veterans and 
their families.
    The President's 2009 budget request for VA includes $181 million in 
operations and maintenance funding for the National Cemetery 
Administration (NCA), which is 71 percent above the resources available 
to the Department's burial program when the President took office. The 
resources requested for 2009 will allow us to meet the growing workload 
at existing cemeteries by increasing staffing and funding for contract 
maintenance, supplies, and equipment, open new national cemeteries, and 
maintain our cemeteries as national shrines. We will perform 111,000 
interments in 2009, or 11 percent more than in 2007. The number of 
developed acres (7,990) that must be maintained in 2009 will be 8 
percent greater than in 2007.
    Our budget request includes an additional $5 million to continue 
daily operations and to begin interment operations at six new national 
cemeteries--Bakersfield, California; Birmingham, Alabama; Columbia-
Greenville, South Carolina; Jacksonville, Florida; Sarasota, Florida; 
and southeastern Pennsylvania. Establishment of these six new national 
cemeteries is directed by the National Cemetery Expansion Act of 2003. 
We plan to open fast track burial sections at five of the six new 
cemeteries in late 2008 or early 2009, with the opening of the cemetery 
in southeastern Pennsylvania to follow in mid-2009.
    The President's resource request for VA provides $9.1 million in 
cemetery operations and maintenance funding to address gravesite 
renovations as well as headstone and marker realignment. When combined 
with another $7.5 million in minor construction, VA is requesting a 
total of $16.6 million in 2009 to improve the appearance of our 
national cemeteries which will help us maintain 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 88 percent in 2009, which is 4.6 percentage points above our 
performance level at the close of 2007. 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 2009, or 
4 percentage points higher than the level of performance we reached 
last year.

          CAPITAL PROGRAMS (CONSTRUCTION AND GRANTS TO STATES)

    The President's 2009 budget request includes just over $1 billion 
in capital funding for VA, $5 million of which will be derived from the 
sale of assets. Our request for appropriated funds includes $581.6 
million for major construction projects, $329.4 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 2009 request for construction funding for our health care 
programs is $750.0 million--$476.6 million for major construction and 
$273.4 million for minor construction. All of these resources will be 
devoted to continuation of the Capital Asset Realignment for Enhanced 
Services (CARES) program. CARES will renovate and modernize VA's health 
care infrastructure, provide greater access to high-quality care for 
more veterans, closer to where they live, and help resolve patient 
safety issues. Some of the construction funds in 2009 will be used to 
expand our polytrauma system of care for veterans and active duty 
personnel with lasting disabilities due to polytrauma and TBI. This 
system of care provides the highest quality of medical, rehabilitation, 
and support services.
    Within our request for major construction are resources to continue 
five medical facility projects already underway:
  --Denver, Colorado ($20.0 million)--replacement medical center near 
        the University of Colorado Fitzsimons campus
  --Lee County, Florida ($111.4 million)--new building for an 
        ambulatory surgery/outpatient diagnostic support center
  --Orlando, Florida ($120.0 million)--new medical center consisting of 
        a hospital, medical clinic, nursing home, domiciliary, and full 
        support services
  --San Juan, Puerto Rico ($64.4 million)--seismic corrections to the 
        main hospital building
  --St. Louis, Missouri ($5.0 million)--medical facility improvements 
        and cemetery expansion.
    Major construction funding is also provided to begin three new 
medical facility projects:
  --Bay Pines, Florida ($17.4 million)--inpatient and outpatient 
        facility improvements
  --Tampa, Florida ($21.1 million)--polytrauma expansion and bed tower 
        upgrades
  --Palo Alto, California ($38.3 million)--centers for ambulatory care 
        and polytrauma rehabilitation center.
    In addition, we are moving forward with plans to develop a fifth 
Polytrauma Rehabilitation Center in San Antonio, Texas with the $66 
million in funding provided in the 2007 emergency supplemental.
    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. Further, minor construction resources will be used to 
comply with the energy efficiency and sustainability design 
requirements mandated by the President.
    We are requesting $130.0 million in construction funding to support 
the Department's burial program--$105.0 million for major construction 
and $25.0 million for minor construction. Within the funding we are 
requesting for major construction are resources for gravesite expansion 
and cemetery improvement projects at three national cemeteries--New 
York (Calverton, $29.0 million); Massachusetts ($20.5 million); and 
Puerto Rico ($33.9 million).
    VA is requesting $5 million for a new land acquisition line item in 
the major construction account. These funds will be used to purchase 
land as it becomes available in order to quickly take advantage of 
opportunities to ensure the continuation of a national cemetery 
presence in areas currently being served. All land purchased from this 
account will be contiguous to an existing national cemetery, within an 
existing service area, or in a location that will serve the same 
veteran population center.

                         INFORMATION TECHNOLOGY

    The President's 2009 budget provides more than $2.4 billion for the 
Department's IT program. This is $389 million, or 19 percent above our 
2008 budget, and reflects the realignment of all IT operations and 
functions under the management control of the Chief Information 
Officer.
    IT is critical to the timely, accessible delivery of high-quality 
benefits and services to veterans and their families. Our health care 
and benefits programs can only be successful when directly supported by 
a modern IT infrastructure and an aggressive program to develop 
improved IT systems that will meet new service delivery requirements. 
VA must modernize or replace existing systems that are no longer 
adequate in today's rapidly changing health care environment. It is 
vital that VA receives a significant infusion of new resources to 
implement the IT-related recommendations presented in the Dole-Shalala 
Commission report.
    Within VA's total IT request of more than $2.4 billion, 70 percent 
(or $1.7 billion) will be for IT investment (non-payroll) costs while 
the remaining 30 percent (or $729 million) will go for payroll and 
administrative requirements. Of the $389 million increase we are 
seeking for IT, 86 percent will be devoted to IT investment. The 
overwhelming majority ($271 million) of the IT investment funds will 
support VA's medical care program, particularly VA's electronic health 
record system.
    VA classifies its IT investment functions into two major 
categories--those that directly impact the delivery of benefits and 
services to veterans (i.e., veteran facing) and those that indirectly 
affect veterans through administrative and infrastructure support 
activities (i.e., internal facing). For 2009, our $1.7 billion request 
for IT investment is comprised of $1.3 billion in veteran facing 
activities and $418 million in internal facing IT functions. Within 
each of these two major categories, IT programs and initiatives are 
further differentiated between development functions and operations and 
maintenance activities.
    The increase in this budget of 94 full-time equivalent staff will 
provide enhanced support in two critical areas--information protection 
and IT asset management. Additional positions are requested for 
information security: testing and deploying security measures; IT 
oversight and compliance; and privacy, underscoring our commitment to 
the protection of veteran and employee information. The increase in IT 
asset management positions will bring expertise to focus on three 
primary functions--inventory management, materiel coordination, and 
property accountability.
    Our 2009 budget request contains $93 million in support of our 
cyber security program to continue our commitment to make VA the gold 
standard in data security within the Federal Government. We continue to 
take aggressive steps 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. We are progressing with the implementation of the Data 
Security--Assessment and Strengthening of Controls Program established 
in May 2006. This program was established to provide focus to all 
activities related to data security.
    As part of our continued operation and improvement of the 
Department's electronic health record system, VA is seeking $284 
million in 2009 for development and implementation of the Veterans 
Health Information Systems and Technology Architecture (HealtheVet-
VistA) program. This includes a health data repository, a patient 
scheduling system, and a reengineered pharmacy application. HealtheVet-
VistA will equip our health care providers with the modern tools they 
need to improve safety and quality of care for veterans. The 
standardized health information from this system can be easily shared 
between facilities, making patients' electronic health records 
available to all those providing health 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 $99 million in 2009 for the VistA 
Legacy system.
    In support of our benefits programs, we are requesting $23.8 
million in 2009 for VETSNET. This will allow VA to complete the 
transition of compensation and pension payment processing off of the 
antiquated Benefits Delivery Network. This will enhance claims 
processing efficiency and accuracy, strengthen payment integrity and 
fraud prevention, and position VA to develop future claims processing 
efficiencies, such as our paperless claims processing strategy. To 
further our transition to paperless processing, we are seeking $17.4 
million in 2009 for Virtual VA which will reduce our reliance on paper-
based claims folders through expanded use of electronic images and data 
that can be accessed and transferred electronically through a Web-based 
platform.
    We are requesting $42.5 million for the Financial and Logistics 
Integrated Technology Enterprise (FLITE) system. FLITE is being 
developed to address a long-standing internal control material weakness 
and will replace an outdated, non-compliant core accounting system that 
is no longer supported by industry. Our 2009 budget also includes $92.6 
million for human resource management application investments, 
including the Human Resources Information System which will replace our 
current human resources and payroll system.

                                SUMMARY

    Our 2009 budget request of nearly $93.7 billion will provide the 
resources necessary for VA to:
  --provide timely, accessible, and high-quality health care to our 
        highest priority patients--veterans returning from service in 
        Operation Enduring Freedom and Operation Iraqi Freedom, 
        veterans with service-connected disabilities, those with lower 
        incomes, and veterans with special health care needs;
  --advance our collaborative efforts with DOD to ensure the continued 
        provision of world-class health care and benefits to VA and DOD 
        beneficiaries, including progress towards the development of 
        secure, interoperable electronic medical record systems;
  --improve the timeliness and accuracy of claims processing; and
  --ensure the burial needs of veterans and their eligible family 
        members are met and maintain veterans' cemeteries as national 
        shrines.
    I look forward to working with the members of this committee to 
continue the Department's tradition of providing timely, accessible, 
and high-quality benefits and services to those who have helped defend 
and preserve liberty and freedom around the world.

    Senator Johnson. Thank you, Secretary Peake. Before we 
begin with questions, I suggest we limit the time to 7 minutes 
per member. After each member has had their opportunity to ask 
questions, we can determine whether a second round is 
necessary.
    Mr. Secretary, the VA's fiscal 2009 budget request proposes 
to cut $38 million for medical and prosthetic research. Your 
testimony states that the VA will allocate $53 million on 
research into mental illness. I will note that this is a $9.3 
million cut into this designated research area.
    Why is the VA cutting funding for research in the areas 
such as mental health at a time when more and more vets are 
being diagnosed with complex mental health disorders?
    Secretary Peake. Sir, we do appreciate the importance and 
emphasize the importance of continuing research in the area of 
mental health, particularly in PTSD, given the current 
situation.
    We have--we also work with DOD and bring in other grants to 
help support our efforts. We have mental health system centers 
that are in place to study PTSD and mental health issues of our 
service men and women. Some of that is actually supported also 
by Dr. Kussman's operational dollars, some $440 million, 
supports some of the people that actually work in those 
centers.
    So, I think with--given the fact that we have $252 million 
really designated for the specific OIF/OEF kind of related 
research and the ability to bring in other dollars will allow 
us to keep our emphasis on this very important problem.
    Senator Johnson. South Dakota is home to many Native 
Americans. What is the VA doing to address the needs of Native 
American veterans who live on reservations which can be 
hundreds of miles from a VA medical facility? How does this fit 
into the VA's plan to better serve those vets who live in rural 
areas?
    Secretary Peake. Sir, I think the point that some of our 
Native American veterans have been some of our under served 
veterans is real and as a matter of fact, in some of my first 
trips, we went to Walla Walla, Washington, and Billings, 
Montana, Helena, Montana, and some of the town hall meetings 
made some of these points.
    We have already put a video teleconferencing link in 
Montana to try to prove that point as an access point for 
people being able to understand their benefits. We have just 
recently established a Native American Council that we are 
putting together within the VA. It will actually be chaired by 
a Native American who is one of our hospital directors but to 
bring all the various pieces of the VA together around these 
issues.
    We are working on a new memorandum with the Indian Health 
Service to find better ways to do partnerships with them and so 
we also recognize the importance and this was highlighted when 
I spoke with one of the large Native American organizations 
recently, that we really have to be able to work with 57 
different sovereign nations and we absolutely understand that 
and are looking to ways to be able to do that more effectively.
    Senator Johnson. Mr. Secretary, the ban on new priority 8 
veterans that's been growing in the system has been in place 
for 5 years. This year, our vets with no service-connected 
disability and an annual salary as low as $28,430 would not be 
able to enroll in this system.
    Have you considered raising the threshold to allow more 
priority 8 vets in?
    Secretary Peake. Sir, we have. We are looking at what the 
impact of that might be, depending on different threshold 
levels. We want to make sure that we are able to meet the 
standards for those who are highest-priority patients, those 
with service-connected disabilities, those with special needs 
and those with truly significant income problems.
    It is more than just a money issue. It is the facilities 
issue and we have already talked about trying to work down our 
backlog so that we do have the capacity to meet the needs of 
those who are currently enrolled and are users and so we want 
to make sure that we can meet that priority first, but we are 
studying, just as you say, sir, looking at the level of it.
    Senator Johnson. What is the timeline on the decisionmaking 
process? How soon will we know one way or the other about 
Category 8?
    Secretary Peake. Well, sir, I don't know exactly when we 
will have that analysis back. I would expect to be able to get 
it back this year and be able to then work through what the 
right level would be, if indeed we would raise it.
    Senator Johnson. The construction of medical facilities is 
of paramount importance. The backlog of urgently needed 
projects is growing.
    Why has the VA not budgeted adequately to accelerate the 
pace of construction?
    Secretary Peake. Well, sir, we've--$1 billion for 
construction is not an insignificant amount, but we have also 
been working on using leases, finding other ways of partnership 
to try to help. We have also been putting money, you may 
notice, into the repair and maintenance to try to eat away at 
the backlog, to maintain some of our buildings that we do have.
    It is--and we are trying to understand the best way to 
partner with our, as an example, our academic partners, as we 
were talking about in Denver, to try to find ways to get the 
most bang for the buck.
    Senator Johnson. $1 billion is an impressive amount of 
money on the one hand, but on the other hand, when you have a 
war costing $10 to $12 billion a month, it is not so much.
    Senator Allard.
    Senator Allard. Thank you, Mr. Chairman. Again, I'd like to 
welcome the Secretary, and as we discussed just before we 
reconvened here, you had been to Denver this last week and so 
I'm curious to just hear what your impressions are, address the 
progress that you've seen, and how you would evaluate the 
project from what you saw on this weekend's briefing and tour 
there of the new site that was set up in Denver.
    Secretary Peake. Well, sir, on Sunday, I met with Senator 
Salazar and Congressman Pomodor and we walked and went around 
the site. I think I would just say that I'm enthused and 
optimistic about the opportunity to really be able to make a 
cornerstone of our integrated health care system for that 
region.
    We understand that it is not Denver standalone as we look 
to our planning and when you look at the synergy that we can 
have with that wonderful medical center that has developed out 
there on the old Fitzsimmons campus, I think we have tremendous 
opportunity.
    In fact, we will have a meeting Monday with the leadership. 
We had a meeting with the leadership also this last Monday in 
Denver and then we'll have a meeting in Washington with the 
leadership to really hammer out our road ahead. The site is 
coming together.
    There's an issue about the swimming pool, just a 
legislative correction that's going to be needed to be able to 
give us the site, and then the UPI building, that paper is 
coming to my desk this week. So, I think that will give us the 
area to do the work in, and then we need to figure exactly what 
work to do and we will be putting that together this next week.
    Senator Allard. Now there's been some speculation about 
some comments you made about redesign of the project. You're 
not talking about a total comprehensive redesign, are you? 
You're talking about looking at maybe adjustments to perhaps 
the current design to make sure that you have the most modern 
facility is the way I understand without a complete overhaul.
    I wonder if you could kind of clarify that.
    Secretary Peake. Well, sir, what I--I think what we are 
looking to do is ensure that we can meet the needs of the 
veterans with the light rail coming in to the site, to be able 
to make sure we have the right-sized ambulatory environment, to 
make sure that we have the best mix with the university of the 
bedded requirement and we will have a bedded requirement for 
some time.
    So, we may be able to leverage the university, give them 
the opportunity to build their bed tower earlier as we become a 
part of that, while we then optimize that particular location 
for the ambulatory piece. It is a redesign but it is--we're at 
a stage where that's not going to be a major--a slowdown or a 
setback. As a matter of fact, it probably will speed things up 
potentially.
    Senator Allard. I mean that's good news to see it speeding 
up, and I think there was concern that if the design was too 
radical, it would slow down the project, meaning we'd have to 
start all over.
    Secretary Peake. Working with the university, they could 
probably get it up quicker than we could.
    Senator Allard. Yes. Well, that's all good news. Now, in 
this year's budget, 2008 budget, there's a $168.3 million 
allocated for the project, and this year in the president's 
budget, they had $20 million was requested.
    Now do you believe the amount is sufficient to keep the 
project on track for a spring 2013 opening?
    Secretary Peake. Sir, I do. I think, part of it is when you 
get the money that you can spend. So, I think we've got enough 
money to be able to complete the acquisition of the land and 
get moving on the design. We will need more money obviously in 
the 2010 budget. This is a project that we're going to move 
along.
    Senator Allard. We actually have another partner in this 
thing. We've got the Veterans Administration, plus the CU 
Medical School, but then there's the city and county of Aurora.
    Secretary Peake. And I met with the mayor, Mayor Tauer, as 
well.
    Senator Allard. And they very much want to see things move 
forward.
    Secretary Peake. His vision with the light rail has been 
very--I mean that really adds to the value of our proposal.
    Senator Allard. Yes, I would think so, and we've encouraged 
him and we've pushed for the light rail in that particular part 
of the city in order to provide a number of transportation 
alternatives to the veterans that might want to go the CU 
Medical Center, including the veterans hospital that we 
anticipate having close by.
    Okay. Let me move on to the cemetery needs for the State of 
Colorado, and I think, Bill, Mr. Tuerk, you have been out to 
Colorado and kind of understand our needs. Logan Cemetery, I've 
been told, is--and we've discussed this, I think, with 
representatives from the--if not you, at least representatives 
from the Veterans Administration, that it's been projected that 
by 2020, it's going to be full.
    Mr. Tuerk. That's correct, Senator. I visited the cemetery 
last week to get a real lay of the land on the area that had 
not yet been buried out and we figure that space will be 
depleted in about 2020.
    Senator Allard. So you would agree with those estimates 
then, and I guess it's hard, you know. We have had a lot of 
retired veterans move into Colorado, particularly the Colorado 
Springs area. I think they've got the second highest population 
of retired--I shouldn't say veterans, retired military in the 
country and so there is concern about, you know, space, 
particularly in the Colorado Springs area because of the rapid 
growth of retirees.
    They get stationed there and then they decide they like 
Colorado and they want to come back there and retire, and I 
guess it's kind of hard to anticipate just what the retired 
military and veterans population would be in Colorado, but 
you're fairly comfortable with the 2020?
    Mr. Tuerk. Well, Senator, let me say this. I'm comfortable 
that 2020, give or take a year, maybe two, is a good solid 
estimate, based on current burial rates and current capacity at 
Fort Logan.
    I'm also confident that the cities of Denver and Colorado 
Springs will have an ongoing need for VA burial services after 
Fort Logan is filled, and this budget request specifically is 
designed to start addressing the need in cities like the 
Denver-Colorado Springs area by asking for a separate land 
acquisition line item, so that we may start now to plan for the 
transition from a cemetery like Fort Logan that's going to have 
to close. We can't expand Fort Logan, we're landlocked at this 
point.
    We're asking for that funding for the purpose of starting 
the transition to the successor cemetery to be built in 
anticipation of the closing of Fort Logan.
    Senator Allard. We're filling up, yes. Now, is that under 
the construction initiative? Is that the $5 million that's in 
the----
    Mr. Tuerk. That is correct, sir.
    Senator Allard. Okay. And so I wanted you to speak to that 
but you've already pretty well spoke to it.
    You're comfortable with that money there to meet your 
current needs as far as cemetery expansion? Do we need any more 
money there?
    Mr. Tuerk. Well, I don't know yet, Senator, to be honest, 
because we don't have the authority to go scout for land yet 
and I don't yet have a sense of what it might cost for the 
acres that we might need.
    It seems to me the ideal location for the successor 
cemetery would be somewhere between Denver and Colorado 
Springs, somewhere on the I-25 corridor, and I'm advised that 
land there is not going to be inexpensive, but I----
    Senator Allard. You've got that right.
    Mr. Tuerk [continuing]. Have not yet gotten a sense of the 
precise quantum of funding we'll need to acquire a property.
    Senator Allard. Yes, and I think the other thing, too, is 
water, if you get an area that's too rural there, water could 
be a problem. Even if you don't get one, the whole area in 
Douglas County, that would be the area between Colorado Springs 
and Denver, there is some water issues, and I think when you're 
shopping for land, I hope that you will pay attention to the 
utilities and availability of water because you plant a lot of 
grass and in a State like Colorado, it's semi-arid, you'll use 
a fair amount of water.
    So, I would just caution you to be careful about where you 
go. Just don't--you have to look at the value of the land 
obviously but you need to look at the water availability and 
utility availability.
    Mr. Tuerk. We'll be very conscious of the factors, Senator.
    Senator Allard. That's a rapidly growing county and at one 
time it was the fastest-growing county in the country and I 
think they're among the fastest now, but still there's a lot of 
growth in that area and I wouldn't expect that the land values 
in there would depreciate much, if at all.
    Mr. Tuerk. I understand.
    Senator Allard. More inclined to go up. So, the sooner you 
can get those purchases kind of nailed in, I think it would be 
better, frankly, because I don't see it being cheaper with 
time.
    Okay. I just wanted to make sure that on those two projects 
for Colorado, that we were moving forward. They're projects 
that I've worked hard with the previous Secretary and the 
Secretary before that Secretary and I support your mission. I 
think it's vital that we provide good care.
    I'm pleased with what has happened in Colorado where we had 
the closing of one VA hospital down on the Arkansas River there 
and we replaced it with clinics and so those clinics now with 
electronic records, I see where there was some opposition. The 
patients aren't much happier because they're much more 
available on a local basis and they don't like that and then 
they get referred to a now central facility in Denver. We want 
that to be a good facility. So, the electronic records, I was 
very pleased to see what you're doing in the electronic 
records. It brings accountability, brings some uniformity and 
helps you, I think, manage and set up goals and objectives to 
be able to measure results.
    So, I'm pleased with your direction in that and I commend 
you for it and I do think that at one time veterans were 
hesitant to go to veterans facilities. They're looking at it as 
top-of-the-line now and looking forward to getting medical 
services from the VA and I compliment you on your efforts.
    Senator Johnson. Senator Landrieu.
    Senator Landrieu. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary, and I appreciate the testimony.
    I just have three questions. One of the major projects that 
we have ongoing in Louisiana, and I'm sure you are familiar 
with it, is the Veterans Hospital that we lost in the storms, 
it will be 3 years this August, and I want to first commend 
your staff there and the staff of the Veterans Administration 
for the excellent job they did in terms of evacuation and 
response.
    I don't think we lost a single patient. The team there 
performed magnificently, and given the stress on many of the 
other hospitals, public and private, the veterans team is 
really to be commended.
    In that regard, as you know, we have already appropriated 
$625 million for the replacement of the medical center. There 
have been some plans laid out, of course, and to rebuild that 
center. There's some questions--or hospital. There's some 
questions about its size and et cetera, but my question is do 
you--is the regional planning commission downtown site still 
the preferred location for the new medical center, to your 
knowledge?
    Secretary Peake. Yes, ma'am, and it's across the street 
from the LSU complex that they're looking at.
    We think we have made some breakthroughs here. There was 
some question about whether we're going to have to do a full 
environmental study or not and what our folks have been down--
actually, Mr. Hutter has been down there working and we have--
we're going to resign the MOU with the city to allow them to go 
ahead and get moving on the land acquisition.
    We think we have good support now from the historic people 
which was up in the air and we've got a game plan for 2012 
opportunity to open.
    Senator Landrieu. Well, I appreciate that because that was 
my next question.
    The chairman is well aware of the struggle that we are 
going through to try to streamline this recovery process and 
one of the maddening requirements because we're using the 
community development block grant as we thought, we've learned 
since then, but initially we thought might be the quickest way 
to get money to locals has become a difficult way because of 
the requirement of the national environmental protection 
review, not because that's a problem but because FEMA also 
requires it and so for every project being built in the gulf 
coast, it's not one environmental review but two.
    It's costly, it's expensive, it's a waste of time and 
money. So, I'm very pleased to see that you all have found a 
way legally through getting one that would be accepted by both 
Federal agencies, and is that what you're testifying to today, 
Mr. Hutter? Could I ask you?
    Mr. Hutter. Yes, Senator. We had a very successful meeting, 
two actually, in the last month with not only the city but the 
State and our Federal partners in this regard to move forward 
with one focused study with respect to the NEPA requirements 
and one focused study with respect to the historic preservation 
requirements, and we are--I'm glad to report that we are arm in 
arm with our partners in that regard.
    Senator Landrieu. And I just want to show the chairman. 
This is the study that's been completed. As you can see, it's 
quite lengthy. I have not read it but intend to skim it, but 
this is a study and I'd like to show the staff, it's already 
been done and to require another study that basically is going 
to do the same thing just because of the, you know, technical 
part of having to use community development block grant, I 
think, is unnecessary. So, I'm very happy that progress has 
been made.
    My second question relates actually to blind veterans. It's 
something that I've decided to try to concentrate on for a 
variety of reasons. I understand that there are 52,000 blind 
veterans enrolled in the VA Blind Services.
    Currently, according to DOD, there have been 1,169 combat 
eye trauma injuries evacuated from OIF and OEF operations and 
about 16 percent of all wounded evacuated have eye injuries, 
plus there's some other indications that we should focus on 
this.
    Last year or January, Secretary Nicholson announced plans 
for a 3-year commitment to this continuum of care and I'm sure, 
Mr. Secretary, you're aware of this.
    My question is, is the VA continuing this program? Can you 
provide an update about where we are in implementing this 
program to the visually impaired?
    Secretary Peake. Yes, ma'am. We are continuing the program. 
I was just out at Hines looking at our new center and it's 
really spectacular.
    In terms of the--we have the inpatient centers as well as 
the network that's reaching out to allow more ambulatory care 
which is kind of the direction we are going in generally to 
allow people to stay near their homes and be able to get the 
kind of care that they need.
    I think we'll reach out and get more people actually 
availing themselves of our services rather than having to make 
them come to just the inpatient centers, but we have those 
programs still.
    I was at our blind center at West Palm not too long ago and 
they had actually shortened down some of the time that people 
come and spend with us because it made it more available to 
them. So, I think we are--there have been about 58, I think, 
OIF/OEF folks admitted to our inpatient blind rehab programs, 
but as you point out, there are others with optical injuries 
that have the opportunity to come and see us. So, I think we 
are well prepared to continue that.
    Senator Landrieu. You know, and all injuries are, you know, 
heart-wrenching, but the plight sometimes of these individuals 
who are otherwise relatively healthy but have just lost their 
sight, with the right kind of training and opportunities, can 
re-engage in a very significant way, either, you know, 
operating within the military or continuing to, you know, be 
very, very productive, and I'm happy that you said that we're 
trying to be creative with using outpatient services because 
you can see here on the map that the inhouse places are really 
one in Puerto Rico, Birmingham, Alabama, Georgia, Connecticut.
    There are very few in the West, and although I don't 
represent a Western State, it does concern me that we really 
don't have enough sites in the Western part of the country, so 
we might want to think about that as we develop this network, 
and then most importantly and cost effectively, using some 
university-based centers that might be effective in sort of a 
partnership.
    The reason I raise this, and I'll finish with this in a 
moment, is I helped to create such a center not for veterans 
but for Louisiana citizens, a combination of the National 
Conference of Blind with the University Tech in one of our 
cities in North Louisiana and it's become a real sort of model 
for rehabilitation of individuals.
    So, I'm going to pursue that with you later, and my final 
question is, I was rereading the Critical Health Care Mission 
of Veterans Affairs, Mr. Chairman, and, of course, one of them 
is Health Care to Veterans, obviously, to educate and train 
health care professionals, to conduct medical research, but the 
fourth was interesting.
    It says, ``To serve as a back-up to DOD health system in 
war or in other emergencies and support to communities 
following domestic terrorist incidents and other major 
disasters.''
    And again based on the experience that Louisiana, 
Mississippi just went through with this, my question is, have 
you not requested a special line item to meet the directions of 
this fourth stated mission, and if so, where is it, and if not, 
what could we do to maybe plus up this particular aspect of 
your agency?
    Secretary Peake. We have an Assistant Secretary for 
Emergency Preparedness and Operations. If you really think 
about it and you look at Dr. Kussman's integrated health 
system, we are forward deployed all across this country and so 
the day to day operations of those extraordinary facilities, as 
you described the work that went on down there in Louisiana, 
and I agree with you about the credit that is due to them for 
that extraordinary effort, is available really everywhere.
    As a senior medical Army guy for Hurricane Andrew relief, I 
integrated with the VA Medical Center down there very early on 
because they had the infrastructure to support other things 
that we were bringing in. So, it is an extremely important part 
of our readiness, but I'm not sure that it is all captured in a 
single line item that is part of our day to day operations.
    Senator Landrieu. Well, I'd like to pursue that with you. 
My time is up, but I do see that--and I know you've got many 
missions to accomplish and this is not, you know, your primary, 
but I think an important secondary mission to be models of, you 
know, top-level evacuation and disaster response and it's a 
culture within, of course, the military that I think could be 
very helpful to local communities and so your budget, I know, 
is very tight, but as a member of the Homeland Security 
Committee and now a veteran of this recovery effort myself, I 
look forward to working with you all to see what I can do to be 
helpful to that part of your mission because I think it's 
critical in the event that we have another major disaster or a 
major terrorist attack, note that the one we had in New York 
was quite major, but something that really displaces millions 
of people.
    It gets to be very hairy, as you know, in what happens at 
home. So, I thank you very much and I'll wait for additional 
time for my second round of questions.
    Senator Johnson. Senator Reed, thank you so much for 
substituting for me during recent months.
    I now recognize Senator Reed.
    Senator Reed. Thanks very much, Mr. Chairman, and let me 
just tell you the most electrifying sight of recent days to me 
is to see you sitting in that chair and presiding. So, I want 
to thank you for being the chairman of this committee and for 
your participation. It was a pleasure to work with you, Mr. 
Chairman, as you were there, both inspirationally and very, 
very practically. Thank you so much, sir. Thank you.
    General Peake, good to see you onboard, sir. You are 
probably the best qualified person in a long time for the 
position, combat veteran of Vietnam, a general officer, 
somebody who understands your department's missions in every 
dimension. So, thank you very much. Gentlemen, thank you all, 
too, for what you do.
    We are all concerned and I think you will second this 
concern about the mental health of our soldiers. This is 
something that is becoming one of the signature injuries of 
these conflicts, both TBI and also mental health stress, and 
there are lots of reasons for it. We don't have to go into 
them.
    But we have a particular problem in the VA system, I 
believe, because these veterans are qualified to some health 
benefits, but their spouses and their children are also subject 
to these stresses. Regular forces, uniformed forces, their 
dependents are eligible for mental health care. They're on 
bases typically. They can go to the clinics. They can get the 
support. That's not the case too often with the veterans 
populations you're dealing with and just a for instance, our 
National Guard troops deploy from Rhode Island. They're in the 
middle of the fight.
    I just visited last January the 69th MP Company that are 
training the Iraqi Highway Patrol in Ramadi. Their families, 
their children, their spouses back home in Rhode Island, the 
only place they can go to in proximity is a VA system.
    So, the bottom line question is, what are you trying to do 
to reach that population? Do you need authority? Do you need 
resources? What can you tell us, sir?
    Secretary Peake. Sir, first of all, those soldiers that are 
in Iraq or Afghanistan or on active duty, their families do 
have TriCare. They do have that opportunity.
    The real issue for us, and you hit on something that we're 
concerned about, is when they come back, get separated and 
they're not medically retired, you know, the Reserve is back, 
they can avail themselves for 5 years of our services. They can 
come in and we can see them for service-connected issues, even 
without having to go through the adjudication process, and we 
can give counseling to their family members if it's part of the 
counseling of the soldier, of the veteran, in many cases a 
reservist, and what we can't do is write a prescription 
legally. You know, you can do it on the side and then you're 
medically legally liable yourself.
    So, there are some issues that we are interested in 
exploring about how to better take care of the family because, 
frankly, the health any more is not just about the veteran, 
it's veterancentric, so that means we need a healthy family 
around it, and we agree with you that's an issue that we need 
to deal with.
    Senator Reed. I would very much like to work with you, sir, 
because I think also you're right, because when I've talked--
you have an excellent VA facility in Rhode Island. Mr. Ing is 
the director there and his staff, down to the men and women 
that clean the facility, are impressive and they've impressed 
me tremendously.
    But sometimes they have to stretch a bit to make it when it 
comes to the family because of counseling the soldier. That's 
something else I think we should work on with them. I want to 
work with you on this. This, I think, is a critical issue going 
forward.
    I'm going to change the subject slightly. You're 
undertaking a major development, the HealtheVet System 
Information Technology. Staff has gone through and they looked 
at your budget. It's not clear what the total cost is, not 
clear if you've got a scheduled deployment over time with costs 
associated, and so let me just say do you have a total cost 
figure? Do you have a deployment schedule, something that we 
can look at?
    Secretary Peake. Well, sir, we are working very vigorously 
right now to get that all laid out in a programmatic kind of 
Palm fashion here and, you know, we have got ballparks that, 
you know, we can--this is a very, very big project. It is one 
that is essential to our future.
    As Senator Allard said, this medical record piece is more 
than--it's really just more than the medical record. It's 
really the whole system of care integrated and it will be--I 
think it will take us right now till 2018 probably to get it 
all done with maybe somewhere in the $10 billion range to be 
able to really effect it and so we're going to need to be able 
to come back to you with really good plans and good costing 
because I know that's a lot of money, but it is a very critical 
thing for our future.
    Senator Reed. Thank you, General, very much, and this is a 
topic, I think, related to the first line of treating these 
current veterans.
    What we see and what you see, too, is that you've got a 
soldier or a marine or a sailor, Air Force man or woman who 
comes through the system, they're up at Walter Reed, they're 
discharged, they're separated, now they're back home, miles 
away from the VA center, you know. They've been briefed about 
their benefits, but for 18-20 or even 50-year-olds, they want 
to go home after an injury, the briefing is sort of not 
retained sometimes.
    What are you doing to reach out to identify all these 
reservists and Guardsmen, tracking them down, making sure in 
good faith that they know what they deserve and they're 
consciously saying I don't need it?
    Secretary Peake. Well, sir, you're right. You want to hit 
them at the teachable moment and that teachable moment may be 
after they've gone and so we do a number of things already. We 
reach out with letters and follow-up letters from both the 
Secretary and the VBA and those folks, but those sometimes wind 
up in File 13 just like lots of other things.
    We are working hard with our vet centers to do outreach so 
that there's somebody physically. We are hiring additional OIF/
OEF people to be a part of that outreach so they have somebody 
they can recognize and hook up with.
    We are expanding our community-based outreach centers, 64 
this year, 51 in the 2009 budget, and then the other thing that 
we are doing which will start in May is to reach out 
telephonically. You know, if you think about it, sir, there are 
a 1.5 million people deployed, about 800,000 have separated, 
about half of those are active, half of them are Reserve and 
Guard. About 300,000 have already touched us at the VHA health 
system.
    When they come and they touch us, they get mental health 
screening, TBI screening, suicide kinds of screening, but 
that's 500,000 out there that haven't, and so we're going to be 
telephoning. We're setting up the call centers to try to make 
those contacts, to find out if they need case management. It's 
really refreshing the relationship that the VA has maybe at the 
time when it is the teachable moment. So, we are enabled now by 
the fact that for 5 years, we're able to see them because of 
the NDAA and we want to make sure that they're aware of that. 
So, we're reaching out in a marketing connection and actually 
teaching and I think that that will go a long way to achieving 
what you're talking about.
    Senator Reed. And I presume you'll be prepared to brief us 
periodically about how successful and you're going to develop 
the metrics to----
    Secretary Peake. Yes, sir.
    Senator Reed [continuing]. What percent of the population 
you're contacting?
    Secretary Peake. Exactly.
    Senator Reed. Thank you, sir. Just a final question because 
my time is rapidly expiring.
    You've mentioned that the extension from 2 to 5 years now 
for OEF/OIF veterans to come into the system virtually without 
any questions or qualifications, just come on in, that, 
together with the normal flow of patients.
    Have you recast your projections about the number of 
patients who come to see you and are they reflected in the 
budgets that you're looking at, not just this year but going 
out 5 years?
    Secretary Peake. Well, sir, it's reflected in the budget 
for this year. We're anticipating about 14 percent. We budgeted 
21 percent. So, yes, I think we've got it covered for this year 
and we will assess ourselves and as we build our budget for 
next year, we will then try to accommodate for what we believe 
is a reasonable number.
    Senator Reed. Thank you, sir. One of the things that--and 
again, because of Chairman Johnson's insistence and also the 
effort of Senator Hutchison, who is the ranking member, and the 
whole--on a bipartisan basis, we have significantly increased 
resources. I suspect we're going to do it again.
    My fear is 5 years from now, when the memories fade but the 
veterans are still here, we won't be as responsive. So, I would 
hope everything you do now points the way and lets us know that 
5 years from now we're going to need this much money and more 
and I will appreciate that.
    Secretary Peake. Thank you, sir. We do appreciate this 
window of interest.
    Senator Reed. Thank you very much, sir. Gentlemen, thank 
you.
    Senator Johnson. Mr. Secretary, thank you for appearing 
before the subcommittee today.
    We all look forward to working with you this year as the 
2009 budget process moves forward.

                     ADDITIONAL COMMITTEE QUESTIONS

    For the information of the subcommittee members, if you 
have questions for the record that you would like to submit, 
please do so by the close of business on April 15, 2008.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

               Questions Submitted by Senator Tim Johnson

    Question. The fiscal year 2008 Milcon/VA bill provided additional 
funding which allowed the VA to raise the travel reimbursement rate. On 
February 1, 2008, the VA increased the rate to 28.5 cents per mile from 
11 cents per mile. Additionally the bill directed the VA to study the 
feasibility of establishing a transportation pilot program aimed at 
improving access to medical facilities. Veterans residing in rural 
areas have voiced serious concern over the ability to get 
transportation to medical facilities.
    In South Dakota, the Rural Transit Authority is recognized by the 
Center for Medicare and Medicaid Services and the transit authority can 
bill them for travel expenses that they provide. In the VA's evaluation 
of transportation programs, have you considered implementing a similar 
program?
    Answer. While VA does not have all the details about the 
arrangement between the Rural Transit Authority and the Centers for 
Medicare and Medicaid Services, VA's existing statutory authority (38 
U.S.C. 111) does not authorize VA to recognize a transit entity to 
directly bill VA for services provided to veterans.
    VA currently has authority to provide a mileage reimbursement 
benefit or fund special mode transport (when medically indicated) to 
certain eligible veterans, including those living in rural areas, when 
traveling to VA or VA authorized health care. Mileage reimbursement 
provides an offset for a veteran's necessary travel expenses, while 
VA's special mode authority (e.g. ambulance, wheelchair van) allows 
arrangement of medically required travel at VA expense.
    In addition, most Veterans Health Administration (VHA) Veterans 
Integrated Service Networks (VISNs) have established travel networks 
that provide transportation to and from their facilities. While these 
do not guarantee transportation for all veterans, they have increased 
accessibility for many.
    The Disabled American Veterans (DAV) Veteran Service Organization 
also provides transportation for veterans, including rural veterans in 
some areas who do not otherwise have means of travel. This volunteer 
system has increased accessibility to veteran health care.
    Finally, in response to Executive Order 13330, Human Service 
Transportation, that established the Federal Interagency Transportation 
Coordinating Council on Access and Mobility (CCAM), VA has been working 
with the CCAM to enhance transportation services for veterans. In 
response to a 2006 policy issued by the CCAM on March 2, 2007, VHA 
issued Under Secretary for Health Information Letter (IL) 10-2007-006, 
Human Service Transportation Coordination. The purpose of the IL was to 
provide medical centers appropriate guidance for implementation of 
``Human Transportation Services Coordination.''
    The IL strongly recommended that each facility take the following 
steps to comply with Executive Order 13330:
  --Evaluate transportation services offered within the facility.
  --Participate in any coordinated transportation planning processes in 
        the local community.
  --Consider offering any excess capacity in VA transportation services 
        to other Federal agencies under agreements that provide for 
        reimbursement to VA.
  --Consider the feasibility of using any excess capacity in the 
        transportation service of another Federal agency under an 
        agreement that provides for reimbursement to that agency.
  --Consider informing veterans of the transportation services of other 
        government agencies that might be available to them.
    Question. Also, given skyrocketing gasoline costs, does the VA plan 
to raise the beneficiary travel reimbursement rate higher in fiscal 
year 2009?
    Answer. In accordance with Title 38 USC Section 111(g)(1), which 
requires the Department to undertake an evaluation of mileage rates 
when GSA changes employee travel reimbursement rates, VA will continue 
to evaluate the reimbursement rate taking into consideration veterans 
travel costs, including the rising cost of gasoline, and resources 
available for delivery of health care benefits for all eligible 
veterans.
                                 ______
                                 

            Questions Submitted by Senator Daniel K. Inouye

    Question. The State of Hawaii and the U.S. territories in the 
Pacific region have a high number of veterans. This remote geographic 
location makes it difficult for these veterans to travel the great 
distances that may be required to treat their conditions or to address 
their needs. What kind of plan does VA have in mind to address the 
needs of veterans located in Hawaii and U.S. territories in the Pacific 
region in the next 5 years, and what is being done to implement some of 
these goals?
    Answer. The VA Pacific Island Health Care System (VAPIHCS) was 
established to meet the needs of veterans located in Hawaii and U.S. 
territories in the Pacific region. The VAPIHCS is an integrated 
healthcare system consisting of Community Based outpatient Clinics, 
outreach clinics and other programs tailored to provide quality 
healthcare to veterans in outlying and rural areas.
    VAPIHCS has six CBOCs located on Kauai, Maui, Hawaii (Hilo and 
Kona), Guam, and American Samoa. A VA physician visits the two VA 
outreach clinics located on Lanai monthly. Traveling providers also 
include affiliate faculty specialist physicians who travel to Hawaiian 
neighboring islands to provide face to face consultations. Veterans on 
Molokai have access to contracted providers for healthcare, including 
mental healthcare. VA expends approximately $3.5 million on veteran 
beneficiary travel related to their medical care referrals.
    We also employ a range of service delivery methods administered at 
the local level to address rural and highly rural veterans' access to 
care. For example, VA's Telehealth program provides a variety of 
medical specialty consultations and mental health services to all VA 
CBOCs. VA has also increased CBOCs, mail-order pharmacy, My-HealtheVet, 
and specialty programs--such as Home Based Primary Care and Mental 
Health Intensive Care Management programs.
    Question. Could you please provide an update regarding the VA's 
plan to achieve the Congressional mandate in section 1635 of the 2008 
National Defense Authorization Act for developing and implementing a 
fully interoperable and capable electronic health record system by 
September 2009?
    Answer. VA is working closely with DOD to implement the provisions 
of Section 1635 of the 2008 National Defense Authorization Act (NDAA). 
On April 29, 2008, VA and DOD delivered a joint NDAA Implementation 
plan to Congress (Implementation Plan). The Implementation Plan 
includes a detailed schedule for electronic health record (EHR) 
requirements development, acquisition and testing activities, and 
implementation milestones to achieve the interoperable EHR by September 
2009.
    The Implementation Plan provides that by September 2009, VA and DOD 
will have implemented improvements and enhancements to the currently 
planned and existing bidirectional exchange of viewable electronic 
health information. For example, VA and DOD providers already exchange 
electronic pharmacy data, allergy data, theater clinical data, provider 
notes, problem lists, and procedures. VA and DOD exchange also 
inpatient information, such as consultations and discharge summaries, 
where available, from key military treatment facilities such as 
Landstuhl Regional Medical Center, Pre- and Post-Deployment Health 
Assessments and Post-Deployment Health Reassessments. By the end of 
2008, VA and DOD will add the capability to share more data, such as 
vital signs, history information and questionnaires.
    To validate that existing and planned data exchanges are supporting 
essential capabilities, and to move beyond the planned 2008 data 
exchange, VA and DOD established a Joint Clinical Information Board 
(JCIB). The JCIB is a joint board of clinician experts and treating 
physicians that has been given the lead to define the requirements for 
the interoperable EHR. This work includes defining what information 
must be shared and how that information must be shared. The JCIB will 
close the gap between what we are now sharing in viewable format, and 
what we must share in viewable and other formats, such as computable to 
achieve full interoperable capability.
    The JCIB has already defined and validated EHR requirements, and 
those requirements are now in coordination for approval. Upon approval 
of the JCIB's EHR requirements and funding, the Departments plan to 
proceed with acquisition and development activities, testing, and 
implementation of interoperable electronic health record capabilities. 
VA is confident that it will achieve the target of fully interoperable 
electronic health record capability with DOD by September 2009.
    In addition to having formed the JCIB, on April 17, 2008, VA and 
DOD formed the Interagency Program Office (IPO) as required by the law. 
On that date, the Departments appointed an acting director from DOD and 
an acting deputy director from VA. The IPO will be responsible for 
coordinating management oversight of VA and DOD projects supporting an 
interoperable electronic health record.
    Question. How does VA intend to provide effective case management 
to the thousands of veterans who have sustained serious wounds since 
September 11, 2001, with six Federal Recovery Coordinators in place? At 
this time, it appears the resources dedicated to addressing this issue 
does not come close to meeting the need.
    Answer. VA has a fully integrated case management team approach to 
assist veterans with access to care and in applying for benefits. On 
October 30, 2007, VA and DOD signed a Memorandum of Understanding for 
the joint oversight of the Federal Recovery Coordination Program 
(FRCP). The FRCP provides an integrated patient centered approach to 
care management and access to severely wounded, ill and injured service 
members, families, and veterans.
    Federal Recovery Coordinators (FRC) provide oversight, management, 
and implement the Federal Individualized Recovery Plan (FIRP). The FIRP 
describes the objectives and resources necessary to assist the severely 
wounded, ill and injured service member, family, and veteran. This 
enables this group to achieve their life long needs and goals through 
the recovery, rehabilitation, and reintegration phases of care. In 
addition to the FRCP director and supervisor, VA has been actively 
recruiting for additional staff to join the FRCP. This effort has 
yielded the recruitment of an additional five FRC staff members who 
will be joining the program by mid June. The additional five FRCs will 
be located in the following locations: National Naval Medical Center, 
Balboa Naval Medical Center, Brooks Army Medical Center, Providence 
Rhode Island VA Medical Center, and Houston VA Medical Center. 
Unfortunately, due to personal reasons one existing FRC staff member 
located at Walter Reed Army Medical Center will be leaving the program 
the first of June; however, with the five additional staff members now 
joining the FRCP, a total staff of 10 FRCs will be in place by mid 
June.
    Phase One of the FRCP, scheduled to be completed in May 2008, 
targeted those catastrophically wounded, ill or injured arriving from 
theatre to the military treatment facility (MTF). Phase Two, which will 
begin immediately after phase one is completed, will expand FRCP's 
scope to include those service members and veterans who were discharged 
from an MTF prior to January 2008.
    In support of the second phase, as well as ongoing activities of 
the FRCP, VA is recruiting a registered nurse (RN) case reviewer. The 
RN case reviewer, located at VA Central Office, will conduct patient 
interviews to determine if the patient would benefit from an FRC or any 
other care management program.
    VA is also advertising for three additional FRC positions, beyond 
the initial 10 FRCs, who will be located at VA Medical Centers to 
assist patients who have already been through the MTF and are now in 
the community. These individuals will in turn become part of the FRC 
staff and should be in place by July 2008. Contact with these patients 
will be via televised (V-tel) meetings, phone and eventually secure 
email.
    While the FRCP provides for the severely wounded, ill and injured 
service members, families, and veterans, other VA employees are 
stationed at eleven of the major military treatment facilities 
receiving casualties from Iraq and Afghanistan. VA staff brief service 
members about VA benefits, including healthcare, disability 
compensation, vocational rehabilitation, and employment. VA registers 
these veterans into the VA system and begins the process for applying 
for service connected compensation benefits. Beginning these processes 
prior to discharge from military service helps eliminate any gaps in 
services or benefits. VA social workers and nurses facilitate the 
transfer of veterans from these major MTFs to the VA polytrauma center 
or medical center closest to their home of record, whichever is most 
appropriate for the specialized services their medical condition 
requires.
    Additionally, each VA Medical Center has an OEF/OIF case management 
team in place. Members of the team include: a program manager, clinical 
case managers, VBA Veterans Service Representatives, and Transition 
Patient Advocates (TPA). The program manager, who is either a nurse or 
social worker, has overall administrative and clinical responsibility 
for the team. The program manager must ensure that all OEF/OIF veterans 
are screened for case management. Severely injured OEF/OIF veterans are 
provided with a case manager and any other OEF/OIF veteran screened may 
be assigned a case manager upon request. Clinical case managers, who 
are either nurses or social workers, coordinate patient care activities 
and ensure that all VHA clinicians providing care to the patient are 
doing so in a cohesive and integrated manner. VBA team members assist 
veterans by educating them about VA benefits and assisting with the 
benefit application process. The TPAs serve as liaisons between the 
VISN, the VA Medical Centers, VBA and the patients. As the liaison, the 
TPA acts as a communicator, facilitator and problem solver.
                                 ______
                                 

              Questions Submitted by Senator Patty Murray

    Question. Secretary Peake, earlier this week the AP reported on 
$2.6 billion in credit card charges by VA employees. Most of the 
charges were routine, but as you know, some charges raised red flags 
among government auditors. I understand that the VA Inspector General 
and the GAO are now investigating the charges, but this report raises 
serious questions about spending controls at the VA.
    Can you share with the committee what you know about the charges 
and what you are doing to prevent any similar problems from happening 
in the future?
    Answer. During November 2007, VA provided the Associated Press (AP) 
with a summary of the purchases made with VA purchase cards in response 
to their Freedom of Information Act request. The data included the 
amounts of the purchases and merchant/vendor information. It did not 
include specific details about each purchase. The AP reported VA 
employees spent specific amounts at certain merchants which were deemed 
questionable, but because the AP did not have specific purchase 
details, their implications of inappropriate use were not based on 
fact.
    What's noteworthy is the AP reported the purchase card data 
provided revealed ``few outward signs of questionable spending, with 
hundreds of purchases at prosthetic, orthopedic and other medical 
supply stores.''
    The AP reported purchases were made at casinos and luxury hotels in 
Las Vegas. VA, like many public and private groups, hosts conferences 
and meetings in Las Vegas due to the ease of participant travel, the 
capacity of the facilities, and the overall cost associated with 
hosting a large conference. Our investigation of the purchases made at 
these locations has shown that all charges were related to securing 
conference and meeting room space. The AP reported VA employees were 
using the card at casinos and luxury hotels and gave the false 
impression that VA employees used the card for personal use and or 
gain, which is not the case.
    The AP also reported the card was used at movie theaters. Once 
again, this report creates a false impression. The Veterans Health 
Administration participates in various forms of outpatient recreational 
therapy for patients. Hosting supervised outpatient therapy treatments 
in a controlled setting such as a movie theater is often used to 
provide patients with an opportunity to spend a small amount of time 
away from a hospital setting, socializing them in the community, as 
they progress in their care. Card usage for such events is appropriate. 
In this case, the AP reported erroneous conclusions about particular 
purchases and created the false impression of misconduct. However, if 
we do find evidence of fraud, waste, or abuse in a program such as 
this, appropriate disciplinary action will be taken.
    With respect to what VA is doing to prevent misuse of these cards, 
internal controls are established to prevent such misuse. VA has 
recently developed online training for cardholders and requires that 
cardholders and approving officials complete the training. This new 
training platform allows VA to monitor completion of training 
nationally and at the facility level via electronic reports, rather 
than file folders of training certificates. The platform is 
automatically set to require cardholders and approving officials to 
take refresher training every 2 years. Cardholders who do not complete 
the training within the allotted timeframe will have their cards 
cancelled.
    Also cardholders are required to reconcile their accounts monthly 
and each cardholder has an approving official, typically the 
supervisor. The approving official is responsible for reviewing the 
purchases made by the cardholder, approving them for payment and 
ensuring cardholders are held responsible for inappropriate charges.
    Since the release of the 2004 Inspector General and Government 
Accountability Office (GAO) reports, VA has focused on actively 
monitoring the more than 4 million annual purchase card transactions 
totaling over $2 billion. VA currently performs three audit processes 
in the review of purchase card transactions: a random audit of all 
transactions (selection criteria provides a 95 percent confidence 
level), a quarterly data mining audit, and on-site facility reviews.
    During the quarterly process, all transactions are tested against 
specific rules in an effort to identify fraud, waste, and abuse. The 
transactions identified in this process are sent to the facility 
responsible for the purchase. The facility is required to provide 
supporting documentation. Less than 0.0008 percent of total 
transactions show potential fraud, waste, or abuse. Of these, the 
majority involved compromised card numbers. These are reported 
immediately and active measures are put in place to prevent future 
reoccurrence.
    These audit processes also identify VA employee missteps. Annually 
about 0.002 percent of the 4 million transactions, or about $300,000 in 
purchases, involve procedural missteps usually where a cardholder 
exceeded his or her warrant or limit. These actions are ratified or 
corrected by local facility management, usually within 30 days. Since 
2004, the number of these procedural missteps has significantly 
decreased from 419 to 95.
    GAO conducted a forensic audit of government charge card programs 
at the request of the U.S. Senate Permanent Subcommittee on 
Investigations, Committee on Governmental Affairs. The auditors 
selected transactions randomly and used data mining techniques to 
identify questionable transactions. VA responded to multiple inquiries 
from December 2006 through April 2007.
    The majority of the transactions were for equipment purchases; 
however, transactions for hotels, training, services, and awards were 
also selected. In the recently released report from GAO pertaining to 
this audit, VA was not specifically identified as being noncompliant 
with current regulations. More than 50 transactions were researched 
with a total dollar value in excess of $300,000. In conclusion, the 
vast majority of VA employees have a demonstrative record of 
appropriate purchase card use.
    Question. Secretary Peake, at the Senate Veterans' Affairs 
Committee hearing in February, you said that you were willing to work 
with the committee to consider modifying the policy, adopted in 2003, 
that prohibits middle-income veterans, also known as Priority 8 
veterans, from enrolling in the VA health care system. I understand 
that the VA is now developing actuarial modeling and will soon be 
conducting in-depth analysis to assess the timeline needed to build 
capacity for such a policy change.
    Can you share with the committee where those studies stand and when 
they will be complete?
    Answer. VA recently conducted an in-depth study to evaluate the 
impacts on the VA health care system under current enrollment policy 
and full enrollment entitled Analysis of the Requirements to Reopen 
Enrollment of Priority 8 Veterans. The analysis identified significant 
challenges with regard to building capacity, both in terms of 
infrastructure and staffing, required to reopen enrollment to Priority 
8 veterans in the near term without severely disrupting VA's ability to 
provide timely, high quality care to currently eligible veterans.
    Demand for VA health care services is projected to continue to grow 
under the current enrollment policy due to new enrollment of veterans 
in Priorities 1 through 7 and the aging of the enrolled population. 
While VA expects to virtually eliminate waiting lists by the end of 
next year, we need to continue to build capacity to meet the projected 
growth in demand for health care from currently eligible veterans
    Currently, VA is developing actuarial estimates to assess the 
impact of reopening enrollment based on various income levels above the 
current VA Means Test and Geographic Means Test thresholds.
    Question. Secretary Peake, as you know, it is projected that the 
number of female veterans who use the VA system will double in the next 
5 years, assuming current enrollment rates stay the same, making female 
veterans one of the fastest growing subgroups of veterans. Last week, I 
introduced legislation with Senator Hutchison and other members to help 
the VA better care for the growing number of women veterans who will be 
entering the VA system.
    Have you had a chance to review our bill--the Women Veterans 
Healthcare Improvement Act of 2008 (S.2799)--and if so, do you have a 
position on it?
    Answer. VA provided its views on S.2799, the Women Veterans Health 
Care Improvement Act of 2008, in testimony before the Senate Committee 
on Veterans' Affairs on May 21, 2008. This testimony also provides 
information about current efforts by VA to respond to the needs of 
women veterans. An excerpt from the testimony is noted below. On May 2, 
VA began reaching out to nearly 570,000 combat veterans of the Global 
War on Terror to ensure they know about VA medical services and other 
benefits. The Department will reach out and touch every veteran of the 
war to let them know it is here for them. This is an example of VA 
acting proactively, and it enhances our ability to make women veterans 
aware of the many services and benefits VA provides.

    EXCERPT FROM MAY 21, 2008 SENATE COMMITTEE ON VETERANS' AFFAIRS

    In general, title I of S. 2799 would require VA to conduct a number 
of studies related to health care benefits for women veterans. Section 
101 would require VA, in collaboration with VHA's War-Related Injury 
and Illness Study Centers, to contract for an epidemiologic cohort 
(longitudinal) study on the health consequences of combat service of 
women veterans who served in OEF/OIF. The study would need to include 
information on their general, mental, and reproductive health and 
mortality and include the provision of physical examinations and 
diagnostic testing to a representative sample of the cohort.
    The bill would require VA to use a sufficiently large cohort of 
women veterans and require a minimum follow-up period of 10 years. The 
bill also would require VA to enter into arrangements with the 
Department of Defense (DOD) for purposes of carrying out this study. 
For its part, DOD would be required to provide VA with relevant health 
care data, including pre-deployment health and health risk assessments, 
and to provide VA access to the cohort while they are serving in the 
Armed Forces.
    We do not support section 101. It is not needed. A longitudinal 
study is already underway. In 2007, VA initiated its own 10-year study, 
the ``Longitudinal Epidemiologic Surveillance on the Mortality and 
Morbidity of OIF/OEF Veterans including Women Veterans.'' Several 
portions of the study mandated by section 101 are already incorporated 
into this project and planning for the actual conduct of the study is 
underway. The study has already been approved to include 12,000 women 
veterans. However, section 101 would require us to expand our study to 
include women active duty service members. We estimate the additional 
cost of including these individuals in the study sample to be $1 
million each year and $3 million over a 10-year period.
    Section 102 would require VA to conduct a comprehensive assessment 
of the barriers to the receipt of comprehensive VA health care faced by 
women veterans, particularly those experienced by veterans of OEF/OIF. 
The study would have to research the effects of 9 specified factors set 
forth in the bill that could prove to be barriers to access to care, 
such as the availability of child care and women veterans' perception 
of personal safety and comfort provided in VA facilities.
    Neither do we support section 102. It is not necessary because a 
similar comprehensive study is already underway. VA contracted for a 
``National Survey of Women veterans in fiscal year 2007-2008,'' which 
is a structured survey based on a pilot survey conducted in VISN 21. 
This study is examining barriers to care (including access) and 
includes women veterans of all eras of service. Additionally, it 
includes women veterans who never used VA for their care and those who 
no longer continue to use VA for their health care needs. We estimate 
no additional costs for section 102 because VA's own comparable study 
is underway, with $975,000 in funding committed for fiscal years 2007 
and 2008.
    Section 103 would require VA to conduct, either directly or by 
contract, a comprehensive assessment of all VA programs intended to 
address the health of women veterans, including those related to PTSD, 
homelessness, substance abuse and mental health, and pregnancy care. As 
part of the study, the Secretary would have to determine whether the 
following programs are readily available and easily accessed by women 
veterans: health promotion programs, disease prevention programs, 
reproductive health programs, and such other programs the Secretary 
specifies. VA would also have to identify the frequency such services 
are provided; the demographics of the women veteran population seeking 
such services; the sites where the services are provided; and whether 
waiting lists, geographic distance, and other factors obstructed their 
receipt of any of these services.
    In response to the comprehensive assessment, section 103 would 
further require VA to develop a program to improve the provision of 
health care services to women veterans and to project their future 
health care needs. In so doing, VA would have to identify the services 
available under each program at each VA medical center and the 
projected resource and staffing requirements needed to meet the 
projected workload demands.
    Section 103 would require a very complex and costly study. While we 
maintain data on veteran populations receiving VA health care services 
that account for the types of clinical services offered by gender, VA's 
Strategic Health Care Group for Women Veterans already studies and uses 
available data and analyses to assess and project the needs of women 
veterans for the Under Secretary for Health. Furthermore, we lack 
current resources to carry out such a comprehensive study within the 
18-month time-frame. We would therefore have to contract for such a 
study with an entity having, among other things, significant expertise 
in evaluating large health care systems. This is not to say that 
further assessment is not needed. We recognize there may well be gaps 
in services for women veterans, especially given that VA designed its 
clinics and services based on data when women comprised a much smaller 
percentage of those serving in the Armed Forces. However, the study 
required by section 103 would unacceptably divert significant funding 
from direct medical care. Section 103 would have a cost of $4,354,000 
in fiscal year 2008.
    Section 104 would require VA to contract with the Institute of 
Medicine (IOM) for a study on the health consequences of women 
veterans' service in OEF/OIF. The study would need to include a review 
and analysis of the relevant scientific literature to ascertain 
environmental and occupational exposure experienced by women who served 
on active duty in OEF/OIF. It would then have to address whether any 
associations exist between those environmental and occupational 
exposures and the women veterans' general health, mental health, or 
reproductive health.
    We do not object to section 104. We suggest the language be 
modified to allow VA to decide which organization is best situated to 
carry out this study (taking into account the best contract bid). While 
IOM has done similar studies in the past, this provision would 
unnecessarily foreclose the possibility of using other organizations. 
We estimate the one-time cost of section 104 to be $1,250,000, which 
can be funded from existing resources.
    Section 201 would authorize VA to furnish care to a newborn child 
of a woman veteran who is receiving VA maternity care for up to 30 days 
after the birth of the child in a VA facility or a facility under 
contract for the delivery services. We can support this provision with 
modifications. As drafted, the provision is too broadly worded. We 
believe this section should be modified so that it applies only to 
cases where a covered newborn requires neonatal care services 
immediately after delivery. The bill language should also make clear 
that this authority would not extend to routine well-baby services.
    We are currently unable to estimate the costs associated with 
section 201 without data on projected health care workload demands and 
future utilization requirements. We have contracted for that data and 
we will forward the estimated costs for this section as soon as they 
are available.
    Section 202 would require the Secretary to establish a program for 
education, training, certification and continuing medical education for 
VA mental health professionals furnishing care and counseling services 
for military sexual trauma (MST). VA would also be required to 
determine the minimum qualifications necessary for mental health 
professionals certified under the program to provide evidence-based 
treatment. The provision would establish extremely detailed reporting 
requirements. VA would also have to establish education, training, 
certification, and staffing standards for VA health care facilities for 
full-time equivalent employees who are trained to provide MST services.
    We do not support the training-related requirements of section 202 
because they are duplicative of existing programs. In fiscal year 2007, 
VA funded a Military Sexual Trauma Support Team, whose mission is, in 
part, to enhance and expand MST-related training and education 
opportunities nationwide. VA also hosts an annual 4-day long training 
session for 30 clinicians in conjunction with the National Center for 
PTSD, which focuses on treatment of the after-effects of MST. VA also 
conducts training through monthly teleconferences that attract 130 to 
170 attendees each month. VA has recently unveiled the MST Resource 
Homepage, a webpage that serves as a clearinghouse for MST-related 
resources such as patient education materials, sample power point 
trainings, provider educational opportunities, reports of MST screening 
rates by facility, and descriptions of VA policies and benefits related 
to MST. It also hosts discussion forums for providers. In addition, VA 
primary care providers screen their veteran-patients, particularly 
recently returning veterans, for MST, using a screening tool developed 
by the Department. We are currently revising our training program to 
further underscore the importance of effective screening by primary 
care providers who provide clinical care for MST within primary care 
settings.
    We object strongly to the requirement for staffing standards. 
Staffing-related determinations must be made at the local level based 
on the identified needs of the facility's patient population, workload, 
staffing, and other capacity issues. Retaining this flexibility is 
essential to permit VA and individual facilities to respond to changing 
needs and available resources. Imposition of national staffing 
standards would be an utterly inefficient and ineffective way to manage 
a health care system that is dynamic and experiences continual changes 
in workload, utilization rates, etc.
    Section 203 would require the Secretary to establish, through the 
National Center for PTSD, a similar education, training, and 
certification program for health care professionals providing evidence-
based treatment of PTSD and other co-morbid conditions associated with 
MST to women veterans. It would require VA to provide these 
professionals with continuing medical education, regular competency 
evaluations, and mentoring.
    VA does not support section 203 because it is duplicative of, and 
would divert resources from, activities already underway by the 
Department. VA is strongly committed to making state-of-the-art, 
evidence-based psychological treatments widely available to veterans 
and this is a key component of VA's Mental Health Strategic Plan. We 
are currently working to disseminate evidence-based psychotherapies for 
a variety of mental health conditions throughout our health care 
system. There are also two programs underway to provide clinical 
training to VA mental health staff in the delivery of certain therapies 
shown to be effective for PTSD, which are also recommended in the VA/
DOD Clinical Practice Guidelines for PTSD. Each training program 
includes a component to train the professional who will train others in 
this area, to promote wider dissemination and sustainability over time.
    Section 204 would require the Secretary, commencing not later than 
6 months after the date of enactment, to carry out a 2-year pilot 
program, at no fewer than three VISN sites, to pay veterans the costs 
of child care they incur to travel to and from VA facilities for 
regular mental health services, intensive mental health services, or 
other intensive health care services specified by the Secretary. The 
provision is gender-neutral. Any veteran who is a child's primary 
caretaker and who is receiving covered health care services would be 
eligible to participate in the pilot program. VA does not support this 
provision. Although the inability to secure child care may be a barrier 
to access to care for some veterans, funding such care would divert 
those funds from direct patient care. We estimate the cost of section 
204 to be $3 million.
    Section 205 would require VA, not later than 6 months after the 
date of enactment, to conduct a pilot program to evaluate the 
feasibility of providing reintegration and readjustment services in a 
group retreat setting to women veterans recently separated from service 
after a prolonged deployment. Participation in the pilot would be at 
the election of the veteran. Services provided under the pilot would 
include, for instance, traditional VA readjustment counseling services, 
financial counseling, information on stress reduction, and information 
and counseling on conflict resolution.
    VA has no objection to section 205; however, we are unclear as to 
the purpose of and need for the bill. We note the term ``group retreat 
setting'' is not defined. We would not interpret that term to include a 
VA medical facility, as we do not believe that would meet the intent of 
the bill. We also assume this term would not include Vet Centers as we 
could not limit Vet Center access to any one group of veterans. 
Moreover, many Vet Centers, such as the one in Alexandria, Virginia, 
are already well designed to meet the individual and group needs of 
women veterans. Section 205 would have no costs.
    Section 206 would require the Secretary to ensure there is at least 
one full-time employee at each VA medical center serving as a women 
veterans program manager. We strongly support this provision. The 
position of the women veterans program manager has evolved from an 
overseer of local programs to ensure access to care for women veterans 
to a position requiring sophisticated management and administrative 
skills necessary to execute comprehensive planning for women's health 
issues and to ensure these veterans receive quality care as evidenced, 
in part, by performance measures and outcome measurements. The duties 
of this position will only continue to grow as we strive to expand 
services to women veterans. Thus, we believe there is support for the 
dedication of a full-time employee equivalent at every VA medical 
center. We estimate section 206 would result in additional costs of 
$7,131,975 for fiscal year 2010 and $86,025,382 over a 10-year period.
    Next, section 207 would require the Department's Advisory Committee 
on Women Veterans, created by statute, to include women veterans who 
are recently separated veterans. It would also require the Department's 
Advisory Committee on Minority Veterans to include recently separated 
veterans who are minority group members. These requirements would apply 
to committee appointments made on or after the bill's enactment. We 
support section 207. Given the expanded role of women and minority 
veterans serving in the Armed Forces, the committees should address the 
needs of these cohorts in carrying out their reviews and making their 
recommendations to the Secretary. Having their perspective may help 
project both immediate and future needs.
    Question. What VA is doing with regard to the increasing numbers of 
women veterans coming to the system and how is VA ensuring that their 
needs are being met?
    Answer. In fiscal year 2007-08 VA funded a telephone-based survey 
of 3500 women veterans (both users and non-users of VA) to assess 
access to care, barriers to care and their specific healthcare needs. 
We have just completed an educational needs assessment of primary care 
providers and have planned a series of five ``mini residencies'' in 
fiscal year 2008, each training 40 providers, to update skills in 
women's health. We are also offering a national conference for primary 
care providers in summer, 2008.
    In fiscal year 2007, women comprised 5.19 percent of all veteran 
users. However, the number of women using VA health care will continue 
to rise dramatically, and is projected to be 8.11 percent of all 
veteran users by fiscal year 2011. Since 2002, almost 39 percent of 
those women who have been deployed in OEF/OIF and discharged from 
active duty have enrolled in VA health care. We are very committed to 
not only addressing the current health needs of these returning women 
veterans but of keeping them healthy for life. We are creating new 
prevention programs directed to this young, relatively fit and healthy 
population.
    The average age of all women seen by VA in fiscal year 2007 is 48.8 
years old. This means that fully half of the women veterans seen in VA 
are of child-bearing age. Of the OEF/OIF women veterans, 86 percent are 
under age 40. This presents challenges for VA to address the 
reproductive health needs of our women veterans and to design and 
implement programs which address inadvertent exposure to medications 
which carry an increased risk of birth defects.
    While we are focusing on our young returning women veterans, we are 
committed to not losing sight of the health needs of aging women 
veterans. We have addressed this population through:
  --Cardiac risk intervention proposed initiative: American Heart 
        Association Guidelines
  --Cancer prevention proposed initiative: implementing tracking 
        processes to address breast, cervical and colorectal cancer 
        screenings in women
  --Updating and improving our ongoing programs in gender specific care 
        such as cervical cancer screening (pap Smears) and management 
        of menopausal symptoms.
    Question. Secretary Peake, when you were in front of the VA 
Committee in February, you mentioned that the average age of VA 
infrastructure is 57 years. All across the country there VA facilities 
in need of major repair. Yet, the President's budget cuts funding for 
major and minor construction programs by nearly 50 percent. In my home 
State of Washington, that means four major construction projects on the 
VA's priority list won't receive funding. In Seattle, I have two 
construction projects that are ranked at number 4 and number 5 on the 
fiscal year 2009 list that won't receive any funding. I also have 
important projects at the American Lake and Walla Walla VA Medical 
Centers that score well on this year's priority list, but do not 
receive funding under this budget.
    Why is the administration cutting the VA construction budget by 
nearly half when, all across the country, VA facilities are in 
desperate need of repair?
    Answer. VA deeply appreciates the support of Congress in providing 
funds for maintaining and improving its capital infrastructure. VA 
capital needs are evaluated, along with other Department needs on 
annual basis, and all funding decisions are reflected in the 
President's Budget submission. The Department is requesting $800 
million for non-recurring maintenance projects which is a $227 million 
increase over what was originally requested in fiscal year 2008. This 
account is used to maintain and repair VA medical facilities. 
Additionally, as reflected in the fiscal year 2009 VA budget 
submission, (Construction and 5-Year Capital Plan, Volume 4--pages 7-
200 and 7-201) there are currently 40 ongoing VA major medical facility 
projects. Congress has appropriated $3.7 billion to date for projects 
and other related medical major construction line items since fiscal 
year 2004.
    Question. (VHA) DE Mr. Secretary, you recently sent me a response 
for the record to my earlier question stating that the VA has no 
intention of exercising the transfer authority we provided you for 
fiscal year 2008 that would assist the VA in building a training 
pipeline for psychologists skilled in treating PTSD, TBI and other post 
deployment issues. The Graduate Psychology Education Program at HHS has 
been up and running for 7 years and could easily be augmented to 
address VA concerns in setting up training sites.
    With at least a third of returning Iraq and Afghanistan veterans 
suffering with mental health challenges, don't you think there is 
benefit--certainly there is available funding to find $5 million--for 
the VA to institute multiple approaches to building up a pipeline of 
specialists for the next several decades?
    Answer. No--VA believes there would be limited benefits to 
increasing the pipeline of psychologists at the level proposed. 
Currently, there is an oversupply of psychology doctoral students 
relative to the number of available internship positions nationally. 
Each year, 20 percent or more students coming out of doctoral programs 
and seeking internships fail to match with an internship program 
because there is an oversupply of graduate students relative to the 
numbers of internship positions available. For the current year, 743 of 
3492 applicants failed to match an internship position.
    Instead of creating more doctoral students in psychology and 
enlarging the imbalance, VA believes that the pipeline would be better 
enhanced by creating additional internship positions. Through its 
Psychology Education Enhancement Initiative, VA in fact has committed 
an additional $5.3 million annually to increasing its psychology 
training positions nationally. About 60 of these are for Internship 
positions, while 100 are for Postdoctoral Fellowship positions.
    It is not clear, as stated in the question, that augmenting the HHS 
Graduate Psychology Education program would facilitate VA training 
opportunities or the care of veteran patients. It is our understanding 
that the Graduate Psychology Education program does not have provisions 
for VA service commitments, through which graduates would be obligated 
to come to VA or to treat veteran patients.
    Question. Secretary Peake, when Congress passed the Wounded Warrior 
bill as part of the of the Defense Authorization bill last year, we 
authorized the creation of three military centers of excellence--for 
TBI, PTSD, and Eye Trauma. The language of this Bill stated that these 
Centers would be a collaboration between the VA and the DOD, promoting 
the free exchange of information and ultimately benefitting our wounded 
warriors with these devastating injuries. The Pentagon is moving 
forward with Centers of Excellence for TBI and Mental Health. However, 
it is my understanding that the Pentagon is not going to establish the 
Military Eye Trauma Center called for in the Wounded Warrior bill, 
despite there having been approximately 1,400 combat eye wounded 
evacuated from Iraq and Afghanistan.
    Can you tell me where things stand and why this has not been 
implemented?
    Answer. VA and DOD are collaborating to develop the Center of 
Excellence in Eye Trauma pursuant to the National Defense Authorization 
Act. The Departments have held several planning meetings. One option 
under consideration is to use the existing TBI Center of Excellence as 
a model. The Center of Excellence in Eye Trauma is anticipated to be 
completed in fiscal year 2009.
    Question. Once again, the President has proposed to send the money 
generated by the new veterans' healthcare user fees and increased co-
pays directly to the Treasury. These new taxes on veterans have been 
rejected by Congress each and every year President Bush has proposed 
them. Yet, here we are again, having to fight the same old budget 
gimmick. Moreover, the President's proposed tax on veterans would be 
used to balance his budget--including to finance tax cuts for the 
wealthy.
    Can you tell the veterans across the country why you think the 
President's proposed tax on them is necessary and should be used to 
balance the budget?
    Answer. The 2009 budget contains three legislative proposals that 
ask veterans with comparatively greater means and no compensable 
service-connected disabilities to assume a modest share of the cost of 
their health care. The first proposal would assess Priority 7 and 8 
veterans with an annual enrollment fee based on their family income:

------------------------------------------------------------------------
                                                              Annual
                      Family Income                       Enrollment Fee
------------------------------------------------------------------------
Under $50,000...........................................         ( \1\ )
$50,000--74,999.........................................            $250
$75,000--99,999.........................................             500
$100,000 and above......................................             750
------------------------------------------------------------------------
\1\ None.

    The second 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 third proposal would eliminate the practice of offsetting or 
reducing VA first-party co-payment debts with collection recoveries 
from third-party health plans.
    The three proposals are consistent with the priority system of 
health care established by Congress, a system which recognizes that 
priority consideration must be given to veterans with service-connected 
disabilities, those with lower incomes, and veterans with special 
health care needs.
    These proposals have no impact on the resources we are requesting 
for VA medical care as they do not reduce the discretionary medical 
care resources we are seeking. Our budget request includes the total 
funding needed for the Department to continue to provide veterans with 
timely, accessible, and high-quality medical services that set the 
national standard of excellence in the health care industry. Instead, 
these three provisions, if enacted, would generate an estimated $2.3 
billion in revenue from 2009 through 2013 that would be deposited into 
a mandatory account in the Treasury.
    Question. Dr. Peake, the administration's budget proposes a $4 
million cut to the office of the VA Inspector General. As you know, the 
VA IG regularly conducts assessments at each and every VA health care 
facility across the country, and has played a constructive role in 
identifying issues relating to wait times, traumatic brain injury, and 
cases of waste, fraud and abuse.
    At a time when the VA is taking on more responsibilities and an 
increasing workload, how does the administration justify a cut to the 
IG?
    Answer. While the 2009 IG budget request does support fewer 
positions for the Office of Inspector General (OIG) in fiscal year 
2009, the resource level is sufficient to meet its mandated obligations 
and to respond to the most urgent issues raised by Congress and the VA. 
OIG will continue to assess and prioritize its workload to maximize 
productivity and ensure the greatest impact possible. This level of 
funding will allow OIG to continue to address the challenges and 
growing demand for VA services.
    Question. Secretary Peake, according to the Independent Budget for 
fiscal year 2009, in the past, population-based surveys have 
demonstrated that veterans report higher rates of alcohol abuse than 
nonveterans and are more likely to meet criteria for alcohol abuse and 
dependence. Recent studies have demonstrated no reduction in overall 
veteran need for substance abuse services and an increase in alcohol 
concerns by OEF/OIF veterans.
    What should the VA be doing to address the increasing incidence of 
substance abuse problems?
    Answer. VA is involved in a variety of initiatives to better 
address substance abuse. This includes enhancing substance abuse 
services integrated with primary care and as a component of general 
mental health services as well as substance abuse specialty services. 
Services in these three settings are necessary to address the needs of 
patients with distinct clinical profiles differing in terms of the 
severity of the substance use problem and the extent to which it 
coexists with other conditions.
    To help recognize substance abuse problems, VA screens veterans in 
primary care and general mental health services at a minimum of once 
per year to identify patients who are consuming alcohol at hazardous 
levels. Patients who score positive on the screen are to be given an 
intervention immediately within primary care or, if the problem appears 
more severe than can be handled in this manner, the patient is to be 
referred to a specialty substance abuse clinic. Another important 
initiative is providing integrated care for substance use disorder 
treatment to patients who suffer co-occurring problems with substance 
abuse, e.g., integrated care for PTSD and substance abuse.
    Question. Secretary Peake, I really appreciated the time that you 
took to visit the Walla Walla VA Medical Center in February. I think 
you gained a unique perspective on the issues affecting the 69,000 
veterans who rely on that facility. As you can imagine, I stay in close 
contact with the veterans in the Walla Walla region. They continue to 
tell me how grateful they are for your support of a new residential 
rehab unit for mental health. Despite this, they remain very concerned 
about the stalled action on construction of a new outpatient clinic. I 
share that concern. As you know, the project is ranked 14th on the 
major construction list. But it will not receive any funding in this 
year's budget.
    Will you pledge to work with me to make sure that the Walla Walla 
outpatient clinic receives design funding in next year's budget?
    Answer. I assure you that the Multi-Speciality Clinic at Walla 
Walla will again be considered for funding in fiscal year 2010. If it 
is determined through the VA's established capital investment process, 
that the Walla Walla project is one of the Departments highest ranked 
projects, I pledge that I will work closely with you and other members 
of Congress to ensure that the design of this project (along with VA's 
other highest priority projects) is funded in fiscal year 2010.
    Question. Secretary Peake, in February, the VA set up a temporary 
CBOC in Northwest Washington that is operating out of a van. As you may 
know, the permanent CBOC in Northwest Washington was supposed to be 
fully operational by February 2008.
    Can you tell me when veterans in Northwest Washington can expect 
the permanent CBOC to be fully open?
    Answer. On May 27, 2008 the mobile clinic in Northwest Washington 
moved to a 2,400 square foot interim building on the campus of the 
United General Hospital in Sedro-Woolley. Puget Sound expects to 
activate a permanent site in early fiscal year 2009.
                                 ______
                                 

          Questions Submitted by Senator Kay Bailey Hutchison

    Question. Mr. Secretary, I would like to compliment the VA for its 
successes in the area of electronic health records. The VA is the 
leader in its use of electronic health records and is truly second to 
none, including the Department of Defense. However, these two agencies 
are not electronically sharing medical records as well or as fast as we 
had hoped. We all are working hard to see that our injured veterans 
receive world class care, and I think we all agree that in order for 
that to happen, veterans must move seamlessly from active duty in the 
Department of Defense to the Department of Veterans Affairs. We have 
discussed this a number of times but we still cannot completely 
transfer medical records between Departments and many records are still 
being lost between the time a soldier leaves the Department of Defense 
and arrives at the VA. Being a retired general officer, you know 
firsthand the challenges the VA faces in this area. My staff has asked 
for a separate detailed briefing on this project which I hope will 
answer many questions.
    Mr. Secretary, please separate the Electronic Health Records 
project from the larger HealtheVet program and tell this committee when 
will this electronic health records project be finished, how much will 
it cost, and what is the schedule and cost for the larger program?
    Answer. VA considers the pursuit of an electronic health record 
integral to nearly all of its healthcare operations and cumulative--it 
is a complete health record including all aspects of a patient's care. 
It is imperative to understand the electronic health record as a view 
of data that is generated as a by-product of conducting daily 
healthcare operations. This method of collecting personal health 
information provides the best assurance of its timeliness, 
completeness, and accuracy. Because of this comprehensive scope, 
integral relationship to IT support for healthcare operations, and the 
close integration of the Electronic Health Record with HealtheVet, VA's 
budget data does not excerpt Electronic Health Record capability as a 
separate line item. It would be counter to the key design paradigm the 
VA is following described above to do so; both cost and schedule of 
electronic health record development mirror that of the transition to 
HealtheVet. Portions of the health record are already underway, and 
some will be complete as VA delivers portions of the VistA-HealtheVet 
Transition Plan as early as 2010. Final components are slated for later 
release, delivering in 2018. HealtheVet is currently estimated just 
over $10 billion for the full lifecycle, a significant portion of which 
is dedicated to the electronic health record. Already underway are 
extensive cost estimation and validation activities for the HealtheVet 
transition.
    Will you tell us your perception as to why the VA and the DOD have 
not been able to bridge this electronic gap as soon as we had hoped, 
and what are you doing to address this problem?
    Answer. VA and DOD have had significant success in sharing 
electronic health information that is available to be shared in 
enterprise-wide VA and DOD systems and for this reason, are 
successfully sharing the vast majority of information that is needed in 
the care and treatment of patients. For instance, our current 
bidirectional exchange makes almost all essential health information 
viewable, where that information is available from DOD's AHLTA system 
and legacy system, CHCS. Recent efforts have improved our ability to 
access available electronic inpatient information from DOD, as DOD has 
worked to standardize its implementation of an inpatient capability 
across major military treatment facilities.
    Some DOD medical information was stored in paper format, or in 
stand alone DOD systems that did not interface with enterprise systems. 
In this instance, VA and DOD worked to together to ensure that 
necessary information was shared, even if not in electronic format.
    VA and DOD are jointly developing an Information Interoperability 
Plan. The scope of this plan is to define a VA/DOD strategy for 
achieving the level of information interoperability essential to 
ensuring seamless continuity of care and benefits to our Nation's Armed 
Forces and Veterans. Specifically, the plan will:
  --Define a strategic information interoperability maturation and 
        organizing framework;
  --Map the current and future essential health, personnel, and benefit 
        information sharing;
  --Identify capability gaps;
  --Determine milestones to measure progress of near-, mid-, and long-
        term interoperability goals; and
  --Leverage the national standardization activities led by the 
        Department of Health and Human Services to foster health 
        information sharing.
    Question. Mr. Secretary, I would like to discuss another area of 
Information Technology. I understand that electronic health records are 
a way to provide better healthcare and claims service to our veterans 
and is your number one priority, but Congress has funded other VA 
programs, Financial Logistics Integrated Technology Enterprise (FLITE), 
for example, to modernize and integrate the VA's financial and 
healthcare systems. I would like to commend the staff of FLITE for 
creating the first and only VA IT program that has established a change 
management board, locked the program's scope, and set a clear timetable 
with recognizable milestones. This is a tremendous accomplishment. As 
we all have seen from failed IT projects at other Departments, the 
number one cause of the failure is the lack of defined requirements and 
management discipline. (The Census Bureau just announced losing a $3 
billion project because they had 417 requirement changes after 
development began.)
    I am interested to know VA's priority for FLITE and ask why VA 
reduced its budget and stretched the schedule out 12-18 months when 
this project is correcting a material weakness identified by several 
independent reports, and I'm told is doing exceedingly well?
    Answer. VA had many difficult decisions to make regarding where IT 
funding would be allocated for fiscal year 2008 and fiscal year 2009. 
Our commitment to invest in veteran facing development initiatives 
coupled with needed resources to improve our infrastructure limited the 
funding for other high priority IT needs. The FLITE Program is a high 
priority in VA. Significant progress continues to be made developing 
both logistics and financial components of the program.
    Question. Mr. Secretary, this subcommittee is committed to 
providing the veterans of Operation Enduring Freedom and Operating 
Iraqi Freedom with the best medical care our Nation can provide. No one 
has ever questioned that. Many of our veterans are returning from these 
conflicts with wounds that transcend the medical traditions of 
compartmentalized care and require extremely specialized and more 
collaborative treatments. I know VA is working very well with many 
major medical and research universities to provide this specialized 
care.
    From your experience as a doctor and Surgeon General, and now VA 
Secretary, please tell me what steps you are taking to fully 
rehabilitate these patients with combinations of traumatic brain 
injury, post-traumatic stress disorder, chronic pain and other highly 
specialized abnormalities by capitalizing on collaborative efforts with 
major medical and research universities.
    Answer. As a result of new modes of injury (improvised explosive 
devices), improved body armor, and surgical stabilization at the 
frontline of combat, more soldiers are returning with complex, multiple 
injuries (polytrauma), including amputations, brain and spinal cord 
injuries, eye injuries, musculoskeletal injuries, vision and hearing 
loss, burns, nerve damage, infections, and emotional adjustment 
problems.
    In response, VA's Office of Research and Development has expanded 
its efforts in polytrauma research and established a Polytrauma and 
Blast-Related Injury (PT/BRI) Quality Enhancement Research Initiative 
(QUERI) coordinating center to promote the successful rehabilitation, 
psychological adjustment, and community reintegration of these 
veterans. Two priorities have been identified: (1) traumatic brain 
injury (TBI) with polytrauma, and (2) traumatic amputation with 
polytrauma. The primary target is Operation Enduring Freedom and 
Operation Iraqi Freedom (OEF/OIF) VA patients, many of whom remain on 
active duty during their initial course of treatment in VA. However, 
these activities will benefit all VA patients with complex injuries, 
regardless of service era and mechanism of injury.
    VA also recently issued a special solicitation for research 
projects on the long-term care and management, including family and 
community reintegration, of veterans with polytrauma, blast-related 
injuries, or TBI.
    VA investigators are actively leveraging expertise in TBI and 
associated co-morbidities including post-traumatic stress disorder, 
depression, substance abuse, and chronic pain, as well as in best 
practices for medically complex patients within the broader academic/
scientific community. In addition to their VA roles, nearly all the 
principal investigators on these VA projects have affiliations at major 
medical and research universities including the University of 
Minnesota, University of Florida, Stanford University, Yale University 
and Virginia Commonwealth University, to name a few. In addition, 
experts from major universities and research institutions who do not 
hold VA appointments serve as co-investigators and consultants on many 
of these projects.
    Question. Mr. Secretary, I understand the VA is experiencing a 
serious challenge to reduce the backlog of claims that have built up 
since 2000. I also understand that the number of claims has increased 
by roughly 50 percent since 2000--from 550,000 to 850,000--and that 
roughly one in four claims have eight or more disability issues, which 
increases complexity. Many of these claims have to be re-adjudicated 
several times, which has further slowed the processing time of new 
claims. Last year, the VA set its priority to reduce claims processing 
times to 160 days. Instead, the average waiting time has increased to 
183 days. The claims backlog still stands at roughly 400,000 claims. As 
I have said to this subcommittee before, we do not want our veterans 
waiting any longer than necessary for the VA to process their claims. 
The Dole-Shalala commission recommended the VA reassess the overall 
process for claims and benefit processing.
    Have you begun to reassess the overall claims and benefit processes 
to see if a complete process reengineering or methodology change may 
solve the problem?
    Answer. The President's Commission on Care for America's Returning 
Wounded Warriors (Dole/Shalala Commission) recommended that VA 
compensate veterans for lost quality of life due to disability in 
addition to its current statutory requirement to compensate veterans 
for average loss of earning capacity resulting from injury or disease 
incurred in or aggravated by service. In February 2008, VA contracted 
with Economic Systems Inc. to do two 6-month studies in response to the 
Dole/Shalala recommendations. One study is focused on transition 
benefits that would assist veterans and their families as they 
transition from military status to veteran status. The second study is 
focused on quality of life and earnings loss payments. The study is 
scheduled to be completed by early August 2008.
    VA and DOD are jointly piloting a streamlined Disability Evaluation 
System (DES) process for service members being separated due to 
disability. Our stated goal is to be able to authorize any compensation 
to service members who are eligible on the date of separation from 
service. Although very early in the process, one service member has 
completed the process and was awarded benefits on the date of 
separation.
    VA is actively looking at consolidating the adjudication of claims 
for certain types of benefits to improve overall service delivery. This 
would include sending all pension claims to the Pension Maintenance 
Centers and sending all service-connected survivor benefit claims to 
centralized processing centers. We believe this specialization will 
improve service delivery of these benefits while freeing up additional 
resources to focus on disability claims.
    Question. How do you plan to reduce this backlog and make 
electronic claims processing a priority for the VA in order to improve 
accuracy and reduce processing times? What can Congress do to assist 
you in these efforts?
    Answer. The Veterans Benefits Administration (VBA) is aggressively 
pursuing measures to decrease the pending inventory of disability 
claims and shorten the time veterans must wait for decisions on their 
claims.
    We are devoting additional resources to claims processing. 
Increasing staffing levels is essential to reducing the pending 
inventory and providing the level of service expected by the American 
people. We began aggressively hiring additional staff in fiscal year 
2007, increasing our on-board strength by over 2,650 employees between 
January 2007 and April 2008. With a workforce that is sufficiently 
large and correctly balanced, VBA can successfully meet the needs of 
our veterans.
    Because it requires an average of 2 or 3 years for our decision-
makers to become fully productive, increased staffing levels do not 
produce immediate production improvements. Performance improvements 
from increased staffing are more evident in the second and third years. 
We have therefore also increased overtime funding this year and 
recruited retired claims processors to return to work as reemployed 
annuitants in order to increase decision output.
    VBA, in collaboration with VA's Office of Information and 
Technology (OI&T), is developing the Paperless Delivery of Veterans 
Benefits Initiative. This initiative is envisioned to employ a variety 
of enhanced technologies to support end-to-end claims processing. In 
addition to imaging and computable data, we will also incorporate 
enhanced electronic workflow capabilities, enterprise content and 
correspondence management services, and integration with our modernized 
payment system, VETSNET. In addition, we are also exploring the utility 
of business rules engine software for both workflow management and to 
potentially support improved decision making by claims processing 
personnel.
    The initiative builds on two pilot programs currently underway. 
These pilot projects have demonstrated the utility of imaging 
technology in our Compensation and Pension business line. Both projects 
utilize our Virtual VA imaging platform, which is a document and 
electronic claims-folder repository.
    To fully develop this initiative, VBA will be engaging the services 
of a Lead Systems Integrator (LSI). The LSI will work closely with VBA 
and our OI&T partners to fully document business and system 
requirements. In addition, we will document demonstrable milestones and 
performance metrics, as well as life-cycle funding requirements. 
Ensuring a consistent funding stream to support this business 
transformation effort will be a critical success factor.
    The recent Claims Processing Improvement study, conducted by IBM 
Global Business Systems, endorsed this strategy as a means to increase 
the efficiency of claims processing and enhance service delivery to our 
veterans.
    Question. Mr. Secretary, as you know, we are all committed to 
ensuring that our soldiers returning from the War on Terror receive 
treatment for mental health problems as well as physical health needs. 
As more of our soldiers return home with Post Traumatic Stress Disorder 
(PTSD), this has become more of an issue. In 2006, Congress instructed 
the VA to establish three new Mental Health Centers of Excellence 
across the country to improve treatment, prevention, rehabilitation, 
and clinical services for our Nation's veterans. As I mentioned earlier 
you were kind enough to visit the center in Waco, Texas. I understand 
the VA has undertaken new initiatives to reduce the stigma associated 
with mental health disease and to reach out to more veterans and their 
families. I want to emphasize how important families are in the 
recovery of our wounded veterans.
    What is the VA doing to expand access to mental health care for 
returning OIF/OEF veterans and their families, and tell us about the 
VA's attempts to reduce the stigma associated with mental health care?
    Answer. The Mental Health Enhancement Initiative (MHEI) has 
expanded programs and access to mental health services in PTSD (e.g., 
outpatient PTSD capability in every VAMC and many CBOCS). Another 
component of MHEI has been to create Services for Returning Veterans-
Mental Health teams; these are specifically created to provide rapid 
assessment and care for emotional/behavioral health issues of returning 
veterans.
    Other MHEI expansions in mental health and substance use disorders 
also benefit OEF/OIF veterans. VA mental health is increasingly 
integrating mental health services in primary care venues through 
evidence based care management and collaborative care models. Receiving 
mental health care in the primary care setting is an especially 
effective way to reduce stigma and to communicate that mental health 
needs are an integral component of the overall health care needs of 
returning veterans.
    Evidence Based Practices in exposure-based therapy of PTSD (the 
approach strongly endorsed by the recent Institute of Medicine report 
on PTSD treatment) are being disseminated across the system. The VA 
Office of Mental Health Services (OMHS) also has implemented a 
continuum of family services that includes family consultation, family 
education, and family psychoeducation for eligible veterans within 
existing statutory/regulatory authority. In providing this continuum, 
the OMHS has offered specialized evidence-based family psychoeducation 
training for clinicians.
    The Mental Health Strategic Plan has initiatives to reduce the 
stigma associated with mental illness through partnership with other 
agencies and within VA. Many VA Medical Centers hold Recovery 
Celebrations that recognize veterans who have made significant strides 
towards their recovery. The VA also hires peer counselors as a way to 
reduce stigma.
    Vet Centers provide mental health services to veterans and family 
members through a network of non-institutionalized community based Vet 
Centers. A majority of Vet Center staff are veterans themselves and 
understand the unique circumstances surrounding the veteran's 
readjustment to civilian life and its impact on his or her family. This 
helps to reduce the stigma associated with mental health care. Vet 
Centers provide typical mental health services such as individual and 
group counseling sessions. Since the beginning of the Global War on 
Terror, the Vet Center program has expanded from 206 Vet Centers in 
fiscal year 2003 to 232 Vet Centers by the end of fiscal year 2008.
    Question. What training programs are the VA developing for the 
families of wounded soldiers to help them provide care once the service 
member returns home?
    Answer. With regard to readjustment and mental health problems of 
returning veterans, the National Center for PTSD, in collaboration with 
the Department of Defense, has developed an excellent guide for 
families, titled Returning from the War Zone: A Guide for Families; 
this guide is available on the Web at http://www.ncptsd.va.gov/ncmain/
veterans/. It covers important topics for families to understand during 
the readjustment process and when a veteran is having more significant 
mental health problems. It has frequent hits and downloads and we have 
received very positive feedback on it. The introduction gives a good 
sense of the content:
    This guide is for services members and their families. It contains 
information to help military family members understand what to expect 
during the reintegration following time in a war zone, and to help them 
adapt back to home life with their loved one.
    Reintegration is an adjustment for all involved. This information 
aims to make this process as smooth as possible and covers:
  --A description of the common reactions that occur following 
        deployment to a war zone
  --How expectations about homecoming may not be the same for service 
        members and family members
  --Ways to talk and listen to one another in order to re-establish 
        trust, closeness and openness
  --Information about possible problems to watch out for
  --How to offer and find assistance for your loved ones
  --What help is available and what it involves . . . 
    In addition to the web-based guide, current best practices in 
mental health care emphasize intensive outpatient care, with the family 
involved in planning and implementing care and with the family 
receiving training on readjustment and handling mental health problems, 
along with the veteran. This helps send the message that recovery is 
possible and that the goals of treatment are to enhance the veteran's 
active roles in the community, family, workplace, etc. This recovery-
oriented approach is greatly enhanced by family involvement during 
outpatient mental health care, and VA clinicians have been encouraged 
to emphasize this approach to the extent they can under current law. 
However, for those veterans who are not service-connected the current 
law only permits VA to provide counseling, training and mental health 
services to family members if those services were initiated during the 
veteran's hospitalization and the continued provision of these services 
on an outpatient basis is essential to permit the discharge of the 
veteran from the hospital. In addition, current regulations generally 
do not allow VA to provide counseling, training, and mental health 
services to the family unless the veteran is enrolled and gives his or 
her permission for the family to be involved in the processes of 
diagnosis, treatment planning, and treatment implementation.
    While Vet Centers do not provide training to assist family members 
in taking care of service members at home, they do provide family 
counseling and care-giver support as it relates to the readjustment of 
the veteran subject to the limitations for family members of 
nonservice-connected veterans noted above.
    Question. Mr. Secretary, as you are aware, we had quite a 
revelation this week concerning the El Paso, Texas outpatient clinic 
being rated well below the national average by your own internal 
survey. As I mentioned in my letter to you yesterday I found this most 
disturbing and I want to be sure we work together to turn this around 
immediately. I am concerned that the veterans in the El Paso area are 
experiencing unusually long waiting times for specialty care 
appointments, particularly orthopedics and ophthalmology, and that 
their access to care in general is certainly not up to the standards we 
have come to expect from the Department of Veterans Affairs. After 
discussions with the VISN 18 Director it is my understanding that the 
Department is implementing a management plan to correct these issues to 
ensure that the veterans in the El Paso area receive the highest 
quality of health care this Nation can provide.
    Mr. Secretary, would you please comment on the details of this 
management plan to correct the situation in El Paso and what I can do 
to assist you in these efforts?
    Answer.
Wait times
    The El Paso VA Health Care System (EPVAHCS) has improved the wait 
times for access to care in many areas. As the table below shows, 
EPCAHCS is currently seeing:

------------------------------------------------------------------------
                                                              Average
        March 2008 data from VSSC          Percent seen    patient wait
                                          within 30 days       time
------------------------------------------------------------------------
Primary Care--New Patients..............           98.80            13.1
Primary Care--Established Patients......          100.00             1.0
Ophthalmology--New Patients.............           88.20            22.3
Ophthalmology--Established Patients.....           97.70             1.9
Orthopedics--New Patients...............           98.20            12.9
Orthopedics--Established Patients.......           96.80            10.4
------------------------------------------------------------------------

Management Plan
    The Veterans Health Administration prepares a quarterly report with 
data on access, clinical care, and patient satisfaction at VA Medical 
Centers. Based on the fiscal year 2007 quarterly results for the 
EPVAHCS, a number of actions have been implemented to improve all 
aspects of quality, access, and patient satisfaction. This action plan 
includes five major areas of concern: access to care, customer service, 
telephone responsiveness, employee morale, and organizational health. 
The following summary provides the actions, goals, and timelines for 
continued improvement.
Access to care
  --The EPVAHCS secured the assistance of a national consultation team 
        in September 2007 to help their primary care staff work on 
        improving access to care. For February 2008, 100 percent of 
        EPVAHCS primary care patients were seen within 30 days. For 
        specialty care, 97 percent were seen within 30 days.
  --Facility leadership has asked the Advanced Clinic Access (ACA) 
        National Consultation Team to return in July 2008 to assist 
        with implementation of ACA in specialty care.
  --EPVAHCS continues to move forward with an after hours clinic. In 
        March 2008, pharmacy hours were extended to cover the later 
        hours of operation. Due to concerns about the safety of 
        patients, EPVAHCS has initiated discussions with William 
        Beaumont Army Medical Center to jointly staff an urgent care 
        center that will provide urgent care during both normal clinic 
        hours and also evenings and weekends. It is anticipated that 
        this process will be initiated by September 2008.
  --Customer Service.--A customer service program has been initiated to 
        educate staff about expectations for professional interactions 
        with customers. EPVAHCS plans to have 75 percent of their staff 
        educated about the customer service standards by June 2008 and 
        100 percent no later than September 2008. EPVAHCS has a goal of 
        achieving a 2 percent improvement in customer service scores by 
        the end of the fiscal year and 5 percent improvement by the 
        second quarter of fiscal year 2009.
  --Telephone Responsiveness.--Telephone equipment was installed on 
        February 28, 2008. Data from the new system became available in 
        March 2008. As a result of the initial data, a decision was 
        made to add staff to primary care, pharmacy, and the telephone 
        operations units. A systems redesign team for telephone 
        responsiveness was initiated to explore both the hardware and 
        human factor issues related to the telephone system, and has a 
        long term goal of answering all calls by the third ring.
  --Employee Morale.--The national VA All Employee Survey data for the 
        three most recent surveys shows that employees rated their 
        overall satisfaction as 3.8, 3.7 and 3.7 (on a scale of 1 to 
        5); the results show that satisfaction is stable. This compares 
        to the national satisfaction level of 3.77. EPVAHCS has worked 
        with the National Center for Organizational Development (NCOD) 
        to hold an annual management retreat, supplemented by quarterly 
        retreats with front line staff, to engage employees at all 
        levels of the organization in strategic planning and follow-up 
        of ongoing improvement efforts.
  --Organizational Health.--The management team has instituted several 
        new processes in an effort to lead changes in staff 
        interactions with veterans and each other. EPVAHCS has held 
        several all employee meetings to discuss corporate expectations 
        that both supervisors and staff adhere to national standards 
        and expectations. NCOD is currently conducting a review of the 
        organization's overall health.
Staffing Improvements
    The following positions have been, or are in the process of, being 
filled:
  --Nurse Practitioner, Primary Care, Las Cruces Community Based 
        Outpatient Clinic (LCCBOC), filled April 28, 2008.
  --Physician, LCCBOC, vacant since December 2007, still under 
        recruitment. Temporarily filled with a locum tenens contractor 
        since March 2008. Current contract extended through August 1, 
        2008.
  --Nurse Practitioner, El Paso, filled effective May 8, 2008.
  --Another Nurse Practitioner position, filled with a Physician, 
        January 2008.
  --Other Physician positions in the process of being filled at the El 
        Paso site:
  --Two physician positions filled March 2008; credentialing is in 
        process.
  --Physician position filled; start date May 27, 2008.
  --Physician position filled; new employee has a private practice to 
        shut down, therefore a starting date is pending.
  --Physician position selected on May 9, 2008; credentialing is in 
        process.
  --There is ongoing recruitment for an additional two new Physician 
        positions and a new Nurse Practitioner position at the El Paso 
        site. Applications are currently being accepted.
  --A second Orthopedic Surgeon in Specialty Care will start at the end 
        of July or early August. This new physician will increase 
        orthopedic services by 100 percent.
  --Another Teleretinal Imager is being recruited. This will increase 
        teleretinal imaging by 50 percent.
  --In addition, two more optometrist positions have been approved and 
        are in the process of recruitment.
  --For all specialty care areas, El Paso has been referring patients 
        who cannot be seen within 30 days to the private sector (when 
        there are specialists available).
    Question. Mr. Secretary, over the past several years, the VA has 
faced a heightened medical workload. I understand the challenges of 
working within fiscal constraints, but I am concerned that major 
construction projects for new hospitals and clinics are vital to expand 
the VA's health infrastructure and give our veterans the best health 
care this nation can provide. This has been an issue discussed many 
times on this subcommittee, but I particularly note this year's major 
construction request is roughly half of last year's appropriation.
    Will you comment on the VA's long-term capital plan and how you see 
it evolving?
    Answer. The main purpose of the VA 5-Year Capital Plan is to 
provide a systemic and comprehensive framework for the effective 
management of the Department's capital investments, the ultimate goal 
of which is to lead to improved health care and benefits (including 
burial services) delivery for our Nation's veterans. Although the 
overall goal of the plan will remain constant, the mode of attaining it 
will mostly likely change in the future.
    The plan will continue to provide important information on the top 
construction priorities (existing and future) and the continued 
implementation of CARES decisions. As also shown in the fiscal year 
2009 budget submission, the future funding needs for these existing 
ongoing projects is currently $2.3 billon. Along with the existing 
projects, there are a number of known potential major medical facility 
projects which are also listed in the VA budget submission 
(Construction and Capital Plan, Volume 4--pages 7-86 through 7-89). The 
list of potential projects are updated each year as part of the annual 
VA capital investment process, and projects may be added or deleted 
from this list.
    VA will also continue to work to better assist homeless veterans. 
The Department is currently performing a Site Review Initiative whose 
goal is, to decrease the amount of underutilized real property and 
maximize its value through VA's enhanced-use leasing program. VA would 
reinvest realized proceeds to enhance services to veterans.
    In addition, future capital plans will continue to place increased 
emphasis on the utilization of renewable energy. The growing importance 
of physical security of VA infrastructure will also be reflected in 
future plans. VA will continue to strive to be a leader in these areas 
as well as ensuring we are caretakers to the environment.
                                 ______
                                 

             Questions Submitted by Senator Mitch McConnell

    Question. In the context of the Department of Veterans Affairs, 
what Dole-Shalala Commission recommendations still require legislative 
remedies?
    Answer. For each Dole-Shalala Commission recommendation, there are 
action steps that provide VA with guidance on how to implement a 
specific recommendation. The following action steps within a specific 
recommendation still require legislation.
      recommendation 2--completely restructure the disability and 
                          compensation systems
Action Step
    Congress should clarify the objectives for DOD and VA disability 
systems, in line with this recommendation.
    Status--Legislation Required
    The administration submitted draft legislation to Congress on 
October 16, 2007, to address this recommendation.
Action Step
    Congress should restructure VA disability payments to include:
  --``transition payments''--to cover living expenses for disabled 
        veterans and their families. They should receive either 3 
        months of base pay, if they are returning to their community 
        and not participating in further rehabilitation OR longer-term 
        payments to cover family living expenses, if they are 
        participating in further rehabilitation or education and 
        training programs.
  --once transition payments end, disabled veterans should receive 
        earnings-loss payments--to make up for any lower earning 
        capacity remaining after training
  --quality-of-life payments--to compensate for non-work-related 
        effects of permanent physical and mental combat-related 
        injuries
Status--Legislation Required
    The administration submitted draft legislation to Congress on 
October 16, 2007, to address this recommendation. In order to be 
prepared for legislative changes consistent with this recommendation, 
VA contracted with Economic Systems, Inc. to conduct two studies. The 
results of both studies are to be reported in August 2008.
Action Step
    To improve completion rates in its VRE program, VA should:
  --pay a bonus (10 percent of annual transition pay) for completing 
        first and second years of VRE training and 5 percent for 
        completing the third year
    Status--Legislation Required
    The administration submitted draft legislation to Congress on 
October 16, 2007, to address this recommendation.
    recommendation 4--significantly strengthen support for families
Action Step
    DOD and VA should provide families of service members who require 
long-term personal care with appropriate training and counseling to 
support them in their new care giving roles.
    Status--Legislation Required
    The administration submitted draft legislation to Congress on 
October 16, 2007 to address this recommendation.
    Question. Could you please provide a status update on the 
community-based outpatient clinic slated for Owensboro, Kentucky?
    Answer. Owensboro is a Marion VAMC CBOC and it is expected to open 
by the end of fiscal year 2008. The CBOC will provide primary care and 
mental health services.
    Question. Could you please provide a status update on the 
community-based outpatient clinic slated for Grayson County, Kentucky?
    Answer. Grayson County is a Louisville VAMC CBOC and it is expected 
to open by the end of fiscal year 2008. The CBOC will provide primary 
care and mental health services.
    Question. Since I represent a State with a significant population 
of rural veterans, I am concerned about access to health care for 
veterans who live in remote areas. What is the Department doing to look 
after rural veterans in States such as Kentucky?
    Answer. VHA has established the Office of Rural Health (ORH) to 
address the needs and challenges of providing healthcare to veterans in 
rural areas. The ORH collaborates with other VA program offices and 
leverages rural health expertise from the public and private sector, to 
identify service delivery gaps and assess multiple care delivery models 
to ensure those veterans in rural and highly rural locations have 
access to health care.
    VHA employs a range of service delivery methods, administered at 
the local level, to address rural and highly rural veterans' access to 
care. Examples of these include expanded Telehealth services, increased 
CBOCs, mail-order pharmacy, My-HealtheVet, and specialty programs such 
as Home Based Primary Care and Mental Health Intensive Care Management.
    The most recent ORH initiatives to increase access in rural areas 
included development of outreach clinics, which are part time 
outpatient clinics providing primary care and mental health care, and a 
pilot project to establish Mobile Health Clinics. Specific to Kentucky, 
VHA currently has 13 CBOCs opened in Kentucky, seven of which are 
located in rural areas:
  --Prestonburg (Floyd County)
  --Somerset (Pulaski County)
  --Morehead (Rowan County)
  --Bowling Green (Warren County)
  --Fort Campbell (Christian County)
  --Hanson (Hopkins County)
  --Paducah (McCracken County)
    An additional seven CBOCs have been approved. They will open before 
the end of fiscal year 2008, with one slated for early fiscal year 
2009. All will be located in rural areas:
  --Berea (Madison County)
  --Hazard (Perry County)
  --Leitchfield (Grayson County)
  --Carollton (Carroll County)
  --Hopkinsville (Christian County)
  --Owensboro (Daviess County)
  --Mayfield (Graves County)
    Question. Does the Department of Veterans Affairs need any 
additional legislative authority to improve its delivery of health-care 
services to veterans, in particular, those suffering from post-
traumatic stress disorder or traumatic brain injury?
    Answer. We continuously evaluate the need to ensure that veterans, 
including those with post-traumatic stress disorder or traumatic brain 
injury, receive optimal care. The President's 2009 budget includes a 
proposal to expand legislative authority in title 38, United Stated 
Code, section 1720, to cover payment of Specialized Residential Care 
and Rehabilitation for OIF/OEF Traumatic Brain Injured (TBI) Veterans. 
This expansion of authority will permit VA payment for residential 
rehabilitation of TBI veterans with special needs through the Medical 
Foster Home component of VA's Community Residential Care Program. This 
legislation allows VA to develop comprehensive treatment programs for 
OIF/OEF TBI patients that can be located close to the patient's 
hometown. We look forward to working with Congress to enact this 
legislative proposal. The administration will send to Congress any 
additional legislative proposals as they are identified.
                                 ______
                                 

            Question Submitted by Senator Robert F. Bennett

    Question. Mr. Secretary, over the last several months the 
Department of Veterans Affairs has announced the establishment of a 
number of Vet Centers around the country. I have been provided a brief 
overview of the decision making process for determining the locations 
of these new Vet Centers, but many questions remain. Can you or your 
staff provide me with a more comprehensive explanation and also discuss 
considerations for future centers?
    Answer. Vet Center site selection is based on an evidence-based 
analysis of demographic data from the U.S. Census Bureau, DOD Defense 
Manpower Data Center (DMDC), VetPop2007 (VA's latest official estimate 
and projection of the veteran population) and by input from the seven 
Readjustment Counseling Services regional offices.
    The main criteria for new Vet Center site selection is the veteran 
population, area veteran market penetration by Vet Centers, 
geographical proximity to VA Medical Centers, and Community Based 
Outreach Clinics in the Vet Center's Veterans Service Area. This 
analysis includes information from the DMDC as to the current number of 
separated OEF/OIF veterans and the reported distribution of home zip 
codes of separated OEF/OIF veterans, as well as the number who were 
married and those with children. Special consideration for relatively 
under-served veterans residing in rural areas at a distance from other 
VA facilities is also reviewed. Proposals are developed and vetted 
through local and regional Vet Center leadership, and then submitted to 
the Under Secretary for Health for review and approval.

                          SUBCOMMITTEE RECESS

    Senator Johnson. Again, thank you, Mr. Secretary, for your 
testimony.
    This hearing is recessed.
    [Whereupon, at 4:43 p.m., Thursday, April 10, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
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