[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
POTENTIAL BUDGETARY SAVINGS WITHIN VA:
RECOMMENDATIONS FROM VETERANS' SERVICE ORGANIZATIONS
=======================================================================
HEARING
before the
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
NOVEMBER 15, 2011
__________
Serial No. 112-34
__________
Printed for the use of the Committee on Veterans' Affairs
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COMMITTEE ON VETERANS' AFFAIRS
JEFF MILLER, Florida, Chairman
CLIFF STEARNS, Florida BOB FILNER, California, Ranking
DOUG LAMBORN, Colorado CORRINE BROWN, Florida
GUS M. BILIRAKIS, Florida SILVESTRE REYES, Texas
DAVID P. ROE, Tennessee MICHAEL H. MICHAUD, Maine
MARLIN A. STUTZMAN, Indiana LINDA T. SANCHEZ, California
BILL FLORES, Texas BRUCE L. BRALEY, Iowa
BILL JOHNSON, Ohio JERRY McNERNEY, California
JEFF DENHAM, California JOE DONNELLY, Indiana
JON RUNYAN, New Jersey TIMOTHY J. WALZ, Minnesota
DAN BENISHEK, Michigan JOHN BARROW, Georgia
ANN MARIE BUERKLE, New York RUSS CARNAHAN, Missouri
TIM HUELSKAMP, Kansas
MARK E. AMODEI, Nevada
ROBERT L. TURNER, New York
Helen W. Tolar, Staff Director and Chief Counsel
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Veterans' Affairs are also
published in electronic form. The printed hearing record remains the
official version. Because electronic submissions are used to prepare
both printed and electronic versions of the hearing record, the process
of converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
__________
November 15, 2011
Page
Potential Budgetary Savings Within VA: Recommendations from
Veterans' Service Organizations................................ 1
OPENING STATEMENTS
Chairman Jeff Miller............................................. 1
Prepared statement of Chairman Miller........................ 36
Hon. Michael H. Michaud, Democratic Member....................... 2
Hon. Corrine Brown, Acting Ranking Democratic Member............. 9
Prepared statement of Congresswoman Brown.................... 37
WITNESSES
Joseph A. Violante, National Legislative Director, Disabled
American Veterans.............................................. 4
Prepared statement of Mr. Violante........................... 37
Carl Blake, National Legislative Director, Paralyzed Veterans of
America........................................................ 5
Prepared statement of Mr. Blake.............................. 41
Accompanied By:
Ian de Planque, Deputy Director, National Legislative Commission,
The American Legion............................................ 4
Raymond C. Kelley, Director, National Legislative Service,
Veterans of Foreign Wars of the United States.................. 4
Diane M. Zumatto, National Legislative Director, American
Veterans (AMVETS).............................................. 4
Todd Grams, Executive in Charge for the Office of Management and
Chief Financial Officer, U.S. Department of Veterans Affairs... 27
Prepared statement of Mr. Grams.............................. 46
Accompanied By:
Diana M. Rubens, Associate Deputy Under Secretary for Field
Operations, Veterans Benefits Administration, U.S. Department
of Veterans Affairs............................................ 27
William Schoenhard, FACHE, Deputy Under Secretary for Health for
Operations and Management, Veterans Health Administration, U.S.
Department of Veterans Affairs................................. 27
Belinda J. Finn, Assistant Inspector General for Audits and
Evaluations, Office of Inspector General, U.S. Department of
Veterans Affairs............................................... 29
Prepared statement of Ms. Finn............................... 53
Accompanied By:
Linda Halliday, Deputy Assistant Inspector General for Audits and
Evaluations, Office of Inspector General, U.S. Department of
Veterans Affairs............................................... 27
Sondra McCauley, Deputy Assistant Inspector General for Audits
and Evaluations, Office of Inspector General, U.S. Department
of Veterans Affairs............................................ 27
MATERIAL SUBMITTED FOR THE RECORD
Deliverable from the Department of Veterans Affairs.............. 60
Post-Hearing Questions and Responses for the Record:
Hon. Bob Filner, Ranking Member, Committee on Veterans'
Affairs, Letter to Joseph A. Violante, National Legislative
Director, Disabled American Veterans....................... 62
Hon. Bob Filner, Ranking Member, Committee on Veterans'
Affairs, Letter to Carl Blake, National Legislative
Director, Paralyzed Veterans of America.................... 63
Responses from Joseph A. Violante, National Legislative
Director, Disabled American Veterans and Carl Blake,
National Legislative Director, Paralyzed Veterans of
America.................................................... 64
Hon. Jeff Miller, Chairman, Committee on Veterans' Affairs,
Letter to Honorable Eric K. Shinseki, Secretary, U.S.
Department of Veterans Affairs............................. 67
Response from Honorable Eric K. Shinseki, Secretary, U.S.
Department of Veterans Affairs to Hon. Jeff Miller,
Chairman, Committee on Veterans' Affairs................... 68
Follow-Up Questions from Hon. Jeff Miller, Committee on
Veterans' Affairs and Responses from Honorable Eric K.
Shinseki, Secretary, U.S. Department of Veterans Affairs... 74
Hon. Bob Filner, Ranking Democratic Member, Committee on
Veteran's Affairs, Letter to Honorable Eric K. Shinseki,
Secretary, U.S. Department of Veterans Affairs............. 75
Response from Honorable Eric K. Shinseki, Secretary, U.S.
Department of Veterans Affairs to Hon. Bob Filner, Ranking
Democratic Member, Committee on Veterans' Affairs.......... 78
Question 8 Attachment 1 for Hon. Bob Filner, Ranking
Democratic Member, Committee on Veterans' Affairs.......... 90
Question 11 Attachment 2, Fee Data Disbursed Amounts......... 94
Question 11 Attachment 3, Wait Times......................... 95
POTENTIAL BUDGETARY SAVINGS WITHIN VA: RECOMMENDATIONS FROM VETERANS'
SERVICE ORGANIZATIONS
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TUESDAY, NOVEMBER 15, 2011
U.S. House of Representatives,
Committee on Veterans' Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 10:01 a.m., in
Room 334, Cannon House Office Building, Hon. Jeff Miller
[Chairman of the Committee] presiding.
Present: Representatives Miller, Bilirakis, Roe, Stutzman,
Denham, Runyan, Benishek, Buerkle, Huelskamp, Turner, Brown,
Reyes, Michaud, Sanchez, McNerney, Donnelly, Walz, and Barrow.
OPENING STATEMENT OF CHAIRMAN MILLER
The Chairman. Good morning, everybody. Welcome to this
morning's hearing. Ms. Brown will be the Ranking Member when
she arrives but I want to go ahead, in view of the witnesses
that are here with us today, so thank you for joining each of
us this morning. We are going to review recommendations from
several veterans' service organizations for possible savings
within the Department of Veterans Affairs. And I want to say at
the onset, thank you to the VSOs for answering the call and
sending some information in that we could have a hearing on and
talk about ways that money can be saved at VA.
We are in an unprecedented time of fiscal restraint in
America, one that is long overdue. The Budget Control Act is
the law of the land. It has put in place caps for the next
decade. It is on discretionary spending for every account in
government, including VA. These caps will permit overall
government spending to grow at roughly 2.5 percent annually.
Needless to say, the next 10 years that we are looking at will
look very differently than the last decade.
Now it is my belief that veterans spending and defense
spending remain an absolute top priority to this Nation and to
this Congress. Maintaining our defense is a clear
constitutional charge of this Congress and I include the care
for those who have fought for our freedom as an inextricable
part of that constitutional charge.
With that said, no agency should ever be exempt from a
constant effort to become more efficient or root out waste,
fraud, and other questionable spending. It is with this in mind
that I solicited the help of the veterans' service
organizations, some of which are here today, to help find
savings within VA which then could be redirected to provide
better care and benefits to our veterans. The VSO response was
outstanding. And again, I say thank you for that response.
They provided nine areas for us to examine. And I am so
pleased that they are here today to discuss those savings and
other areas of potential savings within our government. Some of
what they recommended, such as VA's questionable payment of
bonuses that go to already well paid employees, are addressed
in legislation reported from this committee and has already
been passed by the House.
Other recommendations require ongoing scrutiny and today's
hearing continues our committee's oversight to that end. I want
to also thank the VA for its participation in today's hearing.
I believe that there are sincere efforts underway. It has been
documented in several ways, the successes that they have
already enjoyed which shows that Secretary Shinseki is in fact
serious about VA's stewardship of taxpayer dollars.
Nevertheless there are areas that need improvement and
continued oversight. The VA Office of Inspector General's
testimony will confirm that this morning what we have talked
about in regards to bonuses being paid, and I want to thank the
VA OIG for its work with the Committee with VA and with
veterans advocates in all of our common purpose.
Before I close let me touch on one other issue that is on
everyone's mind, one that Carl Blake raises in his opening
statement for the Paralyzed Veterans of America. Namely, the
question of whether VA medical care is exempt from
indiscriminate cuts that would occur across government accounts
under a sequester order. Now it is my firm hope and my
expectation that the Joint Select Committee will rise to its
calling and produce a bill which saves a minimum of $1.2
trillion over the next decade that can clear the Congress and
be signed by the President. However, should that not happen a
week from tomorrow veterans and their loved ones deserve to
know now whether VA will be affected by a looming sequester
order. It is my belief that VA is absolutely exempt. But only
the Office of Management and Budget is vested with the
authority to determine the sequester rules. To date, OMB has
not been clear on this point. Mr. Grams, I hope that you can
shed some light on the administration's position when you
appear on our second panel this morning
Again, I thank all of our witnesses for their attendance
this morning. I now turn to our Ranking Member for his opening
statement. Mr. Michaud, you are recognized.
[The prepared statement of Jeff Miller appears on p. 36.]
OPENING STATEMENT OF HON. MICHAEL H. MICHAUD, DEMOCRATIC MEMBER
Mr. Michaud. Thank you very much, Mr. Chairman, for holding
this hearing today. I also would like to thank our witnesses
for joining us and helping this committee continue its
important work ensuring that veterans get the resources they
need while making sure that the VA is a careful steward of
these resources. Some of my colleagues here in Congress look at
potential budget savings within the VA as a way to reduce our
overall budget deficit. In my view, we should be looking at
ways to provide services and benefits that are more cost
effective in order to provide resources where we need them the
most down the road, as we continue to ensure that the VA has
what it needs, but needs what it gets.
This way, the VA's budget request will be better aligned to
meet the needs we are all hearing about from our veterans and
our constituents. I applaud our VSOs for being active
participants in this conversation and in this process as well.
It is vital that you continue to point out where improvements
in VA programs are necessary and continue to identify programs
that are not working as well as they should be. I also want to
thank the VA Inspector General for the fine work your office
has done in identifying where improvements can be made and
areas where the VA can improve.
One of my foremost concerns is to make certain that the
resources get to the veterans. There simply must be oversight
and accountability within the VA system. This is also important
to ensure that all of you get the accurate information you need
in order to formulate realistic budgets that are truly need
based. I am troubled that in the audits and reports that we get
from the Inspector General's Office there seems to be a
consistent pattern in what they find wrong, in lack of
financial controls, and in lack of policies and procedures to
ensure that staff follow management directives.
I would like to know what the VA is doing to fix these
problems. And even more importantly, what the VA is doing to
proactively identify problems that lead to wasteful spending
and lack of accountability. This is the key role of effective
management. And I would like to be assured that these issues
are being identified and addressed routinely and not merely in
response to the IG reports and congressional oversight.
One of the areas of concerns identified by the VSOs is the
issue of funding holdbacks at the VA central office and in the
VISNs. We all have heard anecdotal stories of local hiring
freezes or our local facilities not having the resources that
they need. I look forward to the discussion on this issue.
I also look forward to learning how the VA is currently
doing with its budget projections and third party collections
estimates, and what in general terms we should expect in
looking forward to the budget submission in February.
I have the utmost faith in Secretary Shinseki and
wholeheartedly support his efforts to transform the VA. The VA
faces many problems and I understand it takes time to change
course. I just want to be sure that we are heading in the right
direction and moving in the right direction we will need the
input from the VSOs as you go back and talk to your members
about where they think the VA has gone astray and where we can
continue trying to get it back on track.
So once again, Mr. Chairman, I want to thank you for having
this hearing and I want to thank our panelists as well for
coming. And I yield back the balance of my time.
The Chairman. I thank Mr. Michaud for his fine comments. I
associate myself with them. And I thank the first panel for
being here. We have two witnesses that are here with us. First,
Joe Violante, National Legislative Director for the Disabled
American Veterans; and Mr. Carl Blake, the National Legislative
Director for the Paralyzed Veterans of America. They are
accompanied by other folks with them today. We appreciate all
of you appearing. And I don't know if Joe, you are first? We
will recognize you for your opening statement.
STATEMENTS OF JOSEPH A. VIOLANTE, NATIONAL LEGISLATIVE
DIRECTOR, DISABLED AMERICAN VETERANS; AND CARL BLAKE, NATIONAL
LEGISLATIVE DIRECTOR, PARALYZED VETERANS OF AMERICA;
ACCOMPANIED BY IAN DE PLANQUE, DEPUTY DIRECTOR, VETERANS
AFFAIRS AND REHABILITATION COMMISSION, THE AMERICAN LEGION;
RAYMOND C. KELLEY, DIRECTOR, NATIONAL LEGISLATIVE SERVICE,
VETERANS OF FOREIGN WARS OF THE UNITED STATES; AND DIANE M.
ZUMATTO, NATIONAL LEGISLATIVE DIRECTOR, AMVETS
STATEMENT OF JOSEPH A. VIOLANTE
Mr. Violante. Thank you, Mr. Chairman. And thank you for
holding this hearing this morning about inefficiencies,
duplication, and waste within the VA. Mr. Chairman, earlier
this year in response to your request our organizations
developed and presented to the Committee a number of
recommendations regarding possible waste and inefficiency
within VA and we appreciate the opportunity today to discuss
these further.
First, however, it is important to recognize that simply
cutting VA's budget in the absence of detailed justifications
and evidence of savings will more likely result in a loss of
accessibility, quality, and safety of services veterans depend
on rather than lead to true deficit reduction. For example, a
decade earlier VA proposed and Congress approved several
successive budgets that cut billions based primarily on the
presumption of unspecified management efficiencies. In the end,
no savings were actually realized and Congress was forced to
provide supplemental appropriations. But not before thousands
of veterans were turned away or forced to wait for VA health
care services.
So in order to ensure that VA actually eliminates
duplication, inefficiency, and waste rather than just cut
services we must begin with an accurate and transparent budget
process to measure whether savings are achieved. Based on VA's
fiscal year 2012 budget proposal there are a number of
questions about the year ahead, such as: did VA's planned
carryover funding from fiscal year 2011 to fiscal year 2012 and
2013 actually occur? And how will VA measure whether savings
from proposed operational improvements materialized?
In addition, as you look for savings in VA keep in mind
that there exists sufficient unfunded and underfunded needs.
For example, VA's Strategic Capital Investment Planning Process
identified about 5,000 capital projects that should be
completed within 10 years at a cost estimated between $50
billion and $60 billion.
Looking ahead as this Committee, the Supercommittee, and
Congress look to reduce the national debt, we hope you will
draw the line at taking money away from disabled veterans. Both
the Senate and the House recently passed legislation to provide
a COLA increase to veterans disability compensation without one
dissenting vote. It would be disgraceful if the Supercommittee
now tried to take this money back.
Mr. Chairman, in the spirit of eliminating duplication of
our own my colleague from PVA will focus on the first five
areas discussed in our letter and I will focus on the last
four, beginning with inspection at state veterans homes.
Currently most state homes undergo regular inspection by
both the VA and the Centers for Medicare and Medicaid services.
Given that the CMS inspections already cover 150 of the 158
criteria required by VA, why not consider eliminating this
overlap of effort to reduce the administrative burden of both
the VA and state veterans homes?
Turning to VBA, we regularly hear reports that the regional
offices spend an inordinate amount of time and resources
shredding nonessential paperwork sometimes right down to Post-
it notes, and even assigning senior GS level employees to
oversee this work. It is our understanding that VBA has made
changes over the past 6 months. However, we recommend the
Committee examine whether current shredding practices are
appropriate to protect and preserve veterans' records.
Another area that merits scrutiny is the practice of
brokering claims between VBA regional offices, particularly the
cost of transporting these brokered claims. According to the
Inspector General report released in September VA brokered over
200,000 claims in fiscal year 2010 and it is our understanding
that these claims are usually transported via FedEx. Why not
consider reallocating the money spent on shipping paper files
to digitizing them instead, especially considering VBA's
ongoing transition to paperless processing?
We also have concerns about VBA's use of mandatory or
authorized overtime as a regular practice to address increased
workloads. Is mandatory overtime the most effective way to
increase employee productivity? And does heavy reliance on
overtime have negative effects on the quality of the work
performed? We would recommend that the Committee ask VBA for
answers to these important questions.
Mr. Chairman, that concludes my testimony. I will be more
than happy to respond to questions.
[The prepared statement of Joseph A. Violante appears on p.
37.]
The Chairman. Thank you. Mr. Blake.
STATEMENT OF CARL BLAKE
Mr. Blake. Chairman Miller, Members of the Committee, on
behalf of Paralyzed Veterans of America I am pleased to be here
today to discuss the ongoing debate about deficit and debt
reduction and how it might affect the Department of Veterans
Affairs.
As you know and as Joe mentioned, PVA along with AMVETS,
the Disable American Veterans, the American Legion, and the
Veterans of Foreign Wars addressed this issue in a letter
provided to the Committee in April of 2011. Since my statement
fully explains the ideas addressed in our joint letter from
earlier this year I will limit my comments to the issues of
immediate concern. However, we all here on the panel look
forward to questions as it relates to the many issues that we
outline in our letter.
Once again this year Congress has failed to fulfill its
obligations to complete work on the appropriations bill funding
the Department of Veterans Affairs by the start of the new
fiscal year on October 1, 2011, nearly 2 months ago. Meanwhile,
the VA is operating based on the parameters of Public Law 112-
36, the Continuing Appropriations Act for Fiscal Year 2012. As
we understand it the VA has implemented an across the board
reduction in all program spending of approximately 1.5 percent.
For the advance appropriation for VA health care to be
superceded or misinterpreted by short term CRs and result in a
reduction of VA health care funding that was already approved
is absolutely outrageous. This concern is further amplified by
the points we raised in our letter concerning the growth in
various levels of administration, the holdbacks that occur at
the VA, and the SES bonus levels. And yet we are here today to
further discuss savings that can be realized within the VA. As
we outlined in our letter to the Committee earlier this year
the veterans' service organizations are not so naive as to
think that cost savings cannot be found within the VA. But the
question remains, to what end?
The context of this hearing is to identify savings within
the VA that can presumably be returned to the Treasury for
deficit and debt reduction. However, we believe the VA is
already failing to meet the demands being placed on its health
care and benefits systems. And I do not even need to go into
great detail to discuss those concerns. We would argue that any
savings realized by the VA should be used to fill gaps in
services now or be immediately reinvested into the system to
make it function more effectively and efficiently.
Ultimately discretionary spending in the VA accounts for
approximately $62 billion. Of that amount nearly 90 percent of
that funding is directed towards the VA health care programs.
As the Joint Select Committee addresses the possibility of
reductions in discretionary spending across the entire Federal
Government, including the VA, it is important to emphasize that
any cuts to VA spending will have a direct impact on the
delivery of health care services and benefits to veterans and
their families.
Additionally we are concerned that in the event the Joint
Select Committee fails to agree to a bipartisan solution or the
House or Senate fails to approve the Committee's
recommendations, an automatic trigger would occur that would
immediately cut an additional $1.2 trillion in Federal
spending. The triggers would target two principal areas of the
Federal budget, national security spending and all other
domestic programs. While we believe all VA programs are
excluded from automatic cuts by Public Law 111-139 the
statutory Pay As You Go Act of 2010 questions remain about
whether or not VA health care spending in particular could be
included broader discretionary spending reductions. And Mr.
Chairman, we appreciate your comments in your opening about
your view on how this should be handled.
However, we have been informed that the final arbiter that
will determine whether or not spending is cut from VA programs
is the Office of Management and Budget. To say that this fact
is worrisome would be a major understatement. As you know, the
VA is the best health care provider for veterans, providing
primary care and specialized health services is an integral
component of VA's core mission and responsibility to veterans.
Across the Nation VA is a model health care provider that has
led the way in various areas of medical research, specialized
services, and health care technology. Any reduction in spending
on VA health care programs would only serve to degrade these
critical services. In the end it is easy to forget that the
people who are ultimately affected by the wrangling over the
budget and this ongoing debate about cutting the deficit are
the men and women who have served and sacrificed so much for
this Nation. We hope that you will consider these men and women
as you continue to investigate areas for potential savings
within the VA.
This concludes my testimony. I would be happy to answer any
questions about my statement and the letter that we have
provided. Thank you.
[The prepared statement of Carl Blake appears on p. 41.]
The Chairman. Thank you, Mr. Blake. Mr. Blake, you talked
about the VSO recommendation on fee basis care coordination.
And I am trying to kind of wrap my head around how we can
encourage VA to move on this front. And I guess the question
that I ask is are you suggesting that VA move towards having a
large network of regional providers? Where we can be assured
that the same prices are being paid to all of the providers?
And how do we move forward? I mean, I am an advocate, as many
know, for being able to provide that health care as close to
home as we can possibly get it. And if necessary in the private
sector and outside the VA network. So could you expound on
that? And Mr. Violante, if you would add to it as well I would
appreciate it.
Mr. Blake. Well I will do my best to answer that question.
I am not sure that we are suggesting a large regional network
that might look something like TRICARE in the way it provides
its benefits to servicemembers. However, you know, one of the
complaints that we hear quite often is when particularly PVA
members get fee service out in the community there are
complications because more often than not that VA has no
provider agreements with providers in the area. Which
complicates the pay for the care that's provided. And it can
ultimately lead to higher costs because I guess you could argue
that with some competition or with the provision of agreements
that you might have a better system.
There has also been some ongoing discussion, and I am not
saying that we, or the Independent Budget, or the American
Legion have advocated for it, there has also been some
discussion about more of a nationalized plan for how fee basis
care gets done. Which we just do not believe actually occurs at
this time. So I do not know if that really answers the
question.
Mr. Violante. I do not know that I could add any more to
that. I mean, what we would like to see is a more effective
program out there when individuals are sent out to the private
sector to ensure, number one, that the care will be totally
provided for, the payments will be provided for, and that VA
continues to manage that veteran's care instead of just sending
them out to any doctor that is out there.
The Chairman. And I concur that VA does need to continue to
help manage that veteran's care. But I, in listening to both of
your answers I think it is clear that there probably needs to
be some type of a network that is established where you do know
where the providers are, that VA knows what the reimbursement
rate is going to be for those providers, and you will actually
have, as you said Mr. Blake, competition where folks will be
wanting to get onto that provider list so that they too can be
providing health care to our veteran population.
I wanted to talk a little bit, yesterday, I am sure you
probably already have seen it, but the Office of Inspector
General has released their report on retention bonuses. It was
not a very positive result. I think basically they said 80
percent of the bonuses that were given either were not, I think
the term not justified or appropriate. And there is a lot of
money out there that unfortunately does not appear to meet the
test that those of us on this committee would want them to
meet, nor the veterans' service organizations. So I would like
to ask, and I know this is a softball to you, but what do you,
if you have seen this report, what do you think about what the
report says?
Mr. Violante. Mr. Chairman, I have not seen that report
yet. One thing though I think we do want to make clear is when
you are looking at the bonuses that VA not be singled out.
Because we certainly do not want to put VA at a disadvantage
throughout the government. But we certainly would like the
structure of who gets what and why they get it looked at. And
we would hope that Congress would do the same government wide.
The Chairman. Let me just take a moment and read to you the
summary portion, where it says that VA lacked clear guidance,
oversight, and training to effectively support the program. VHA
and VHCO approving officials did not adequately justify and
document retention incentive awards in accordance with VA
policy. VA officials did not effectively use the personnel and
accounting integrated data system to generate timely review
notices. And VA officials also did not always stop retention
incentives at the end of set payment periods. Mr. De Planque?
Mr. de Planque. Well, thank you, Mr. Chairman. And I think,
and dovetailing on what Mr. Violante said, I think this is a
problem that is kind of endemic across the board. But one of
our greatest concerns, and this is exactly what you were
addressing there, is that there is not a clear indication of
what the standards are for these things. I think the VA put
out, the Secretary put out their goal of 125 days, no case
pending more than 125 days and 98 percent accuracy. And in the
year 2010 where both of those figures went back the number of
cases over 125 days almost doubled and the accuracy rate
dropped several percentage points, that all of these bonuses
were still going out. And so if that was kind of your mission
statement, this is what was concerning I think to the American
Legion and to the other groups as well, if that is your mission
statement, 125 days and 98 percent accuracy, and you fail in
both of those categories, why are there still bonuses going
out?
I understand the importance of retention and that you want
to be able to keep employees in place and that it is a
competitive job market and there are things that are there. But
I think there is also a natural reaction on behalf of people,
and you have seen this in Wall Street companies that took a
bail out and their executives were getting bonuses and a lot of
people were very angry about things like that in other
organizations. When you see that attitude, that you are not
meeting the goals that are apparent and yet people are still
getting bonuses for that, that is what causes the confusion.
And if we could get a more clear indication of what are these
bonuses based on? Are they not based on the stated mission
statement of 125 days and 98 percent? That is what we are
looking for as organizations, is more clarity in that range.
Mr. Blake. And Mr. Chairman I think, you know, there are
sort of two levels of questions here. Because our letter
addresses SES bonuses but that trickles down even to the lower
levels and individuals who receive bonuses. And it is sort of
a, there are two ways of looking at this. One is our concern
about whether they should get bonuses if they are failing to
presumably meet performance standards which may or may not
exist. The other is, and we have had this discussion with the
VA, sometimes it just does not seem to pass the smell test. And
Ian referenced this. You know, when times are tight and people
are struggling people do not want to be reminded that, you
know, some people are going to get bonuses regardless. And
whether they are justified or not, because we are not here to
suggest that some folks in the VA, and maybe many folks in the
VA, do not deserve a bonus. But sometimes you have to make hard
choices. And this falls into that category also.
Notwithstanding the comments that Mr. DePlanque made about our
concerns about performance standards and whether bonuses are
even justified in the first place.
The Chairman. Thank you very much. Ms. Brown, I understand
that you have to leave us a little early so Mr. Michaud has
passed to you for the first questions.
OPENING STATEMENT OF CORRINE BROWN, ACTING DEMOCRATIC MEMBER
Ms. Brown. Thank you, and I want to thank you for holding
this hearing. We just had Veterans Day and I know we all were
involved in many, many activities around Veterans Day. I want
to thank all of the veterans for their service. I ask that my
full statement be submitted for the record. There are a few
things here I want to focus in on. We ran two wars on the
credit card. And so the idea that we are going to penalize
veterans who have already paid their dues is totally
unacceptable to me. My grandmama always said when you have your
head in the lion's mouth, you ease it out. And so we cannot
penalize people that have already paid their dues.
I am very proud of the fact that I was involved in the
Congress that gave veterans advanced appropriations and gave
the Department of Veterans Affairs the largest budget increase
in the history of the United States. And this Office of
Management and Budget, I do not know exactly who they report
to, I mean, they do not, I do not necessarily think they report
to the Congress or the administration. They make the decisions
independent it seems. How to find out who is in charge of them
is something I have not found out in nineteen years. Because
when we send certain bills, or we pass certain bills, they come
back and say, ``We are not doing it.'' And it is not
implemented. So, you know, that is a challenge.
I want to focus in on the fact that one-third of the
veterans on the streets are homeless. And I have been working
with different agencies. And I want to know what we can do as
far as getting the VA to work with these different agencies.
Because I understand that they are the hardest to get
refinanced, or get them from foreclosing. Not the VA but
working with them and that administration.
And another area as far as how we get additional employees.
One of the problems is how long it takes, let us say a nurse,
to go through the system. The nurse is already certified by the
state, certified by the organization. But yet we are losing to
other hospitals because it takes so long for the processing. So
we have many, many challenges. The Secretary is working on it.
We have other safety issues pertaining to how we do certain
procedures in the hospitals, in the VA. Those are the things
that I am interested in. And any savings that we have from
deficit reduction, and we can all look at how we can cut back,
should go directly into veterans programs, assistance, and you
know, when you talk about rules and regulations, that is where
we need to cut down on some. So with that, does anyone wish to
respond to my comments?
[The prepared statement of Corrine Brown appears on p. 37.]
Mr. de Planque. Thank you, Congresswoman. I would actually
like to address specifically where you were just mentioning
homeless veterans, which is definitely a very big concern. And
I know Mr. Blake and Mr. Violante also brought up our concerns
about sequestration. While VA programs may be protected from
sequestration as we believe, Department of Labor and Housing
and Urban Development programs, many of which help homeless
veterans, are not necessarily going to be protected by this.
And so this is a big concern of the American Legion with the
sequestration issue looming. In that sometimes we fail to see
that the issues of veterans encompass more than just the
Department of Veterans Affairs.
Ms. Brown. And we are just getting HUD to start working
with the VA, which is major. So that we can work in conjunction
to stop them from becoming homeless vets. So we are now getting
HUD, Labor, and VA working together. And when you cut, even
though if you do not cut VA, when you cut these programs some
of my colleagues do not see a correlation between the three.
Does anyone else have anything to add? I have 35 seconds.
Mr. Violante. I would just like to say we certainly agree.
And we said in our letter that any savings that are found
should be reinvested in VA because there are so many unmet
needs that need to be addressed. And personally I agree that,
you know, we are fighting a war off budget. We should be able
to care for those men and women who we have put in harm's way
when they come back. And hopefully Congress will continue to
keep VA funded at the proper levels.
Ms. Brown. Well you can rest assured I will continue to do
my part. Thank you, sir, for your service.
The Chairman. Mr. Roe.
Mr. Roe. Thank you, Mr. Chairman. And thank the Committee
for being here. I, too, want to associate myself with the
remarks of Ms. Brown. I feel like that veterans who carried the
war, that we have as a country placed in harm's way to do what
we have asked them to do to protect our freedoms, that now we
provide the benefits we promised them, period. Very simple. We
do need to be more efficient, however, though. I mean we had an
Oversight and Investigation Subcommittee hearing not long ago
where a wounded warrior had eight different caregivers. I could
not figure that many of them out and neither could the wounded
warrior. So there are things that we need, to be streamlined
within the balance.
Secondly, Ms. Brown is absolutely right. I happened to be
sitting next to a veteran yesterday who works at the VA and
spoke with him. I will not say what he does, but he is fairly
high up in our local VA, who had taken almost 6 months to hire
a physician and, actually no, this was a nurse practitioner.
And he had lost several to the private sector because they
could not make a decision. About how he had interviewed them,
but they could just not get them through the steps. And so he
is losing quality people. The VA needs to look at its own, get
in a mirror and look at how it can do its own business more
efficiently. Because I can tell you in the private sector, if I
find a good employee, I hire them. Period. If I find somebody
that is good here in the Congress, I hire them and I put them
to work. And I do not know what the VA does to take 6 months to
hire a nurse practitioner, but that is ridiculous. There are
things we can do to improve that.
I totally agree with everyone who said that savings that we
find in the VA should be reinvested in the program. Because
there are needs out there that are going to be coming forward
in the very near future when these soldiers matriculate out of
the military and into the VA system that we do not have the
resources right now budgeted to take care of them. And I think
those efficiencies should be placed back in. I 100 percent
agree with you on that. Any comments on those things?
Mr. Blake. Well I would first address the point about the
efficiencies. The one caution I would have is if we are going
to find efficiencies they cannot be vague, they have to be
specific. We have to know exactly where the VA is finding those
dollars from and how they are going to be reinvested. To simply
say, ``Well, we are going to save $500 million,'' that is a
little too vague for our liking. Because inevitably without
some clear understanding of how that is going to happen that
may never actually be realized. And so it is a false
assumption.
Your point about hiring, it is no coincidence that the
House is getting ready to take up the Vow to Hire Heroes Act,
which I believe all of us here have supported. And you spoke
not only to the problem of hiring in the VA, there was a
gentleman who spoke at the press conference last week who was
an Iraq veteran who talked about the problems in getting hired
in the private sector. Who has all the skills to presumably
perform a function in the health care field and yet no job
opportunity opened itself up because of the problems with
certification, and licensure, and stuff like that. So we look
forward to all these opportunities to allow veterans in
particular to come back into the workforce. And I think the VA
is, I think the VA has set a pretty good example already. And
it could certainly help improve its workforce we believe by
bringing a lot of these newer veterans back into the workforce,
its own workforce.
Mr. Roe. One of the things we worked on while I was home
was some veterans homeless issues. And where they, the veteran
had a case coordinator in the HUD VASH program. If they slipped
down into the HUD system they did, but they did not have case
coordinator if they had just the voucher program. I looked at
that and I said, ``Well how many people would it take here
locally at our VA medical center to solve that problem?''
Because without the care coordinator, someone to do that with
them, they just slip right back to where they were. You do not
gain anything. You actually go backwards. And it looks like it
is not that many people, where you could get a case coordinator
with that veteran who is just on the voucher program. I did not
realize it until I was walked through it exactly how that
worked. Where HUD VASH has got a clinical case coordinator. The
HUD system does it, they fall down there, they cannot get the
HUD VASH just yet. But if you are just out where you are in a
voucher program you do not have that case coordinator. I think
that is something we definitely need to look at that would help
reduce homelessness. And it would not take that many more
people, I think, to do that. Are you all aware of that?
Mr. Violante. I am not. But we certainly would be willing
to take a look at that and see how we can improve that program.
Mr. Roe. Thank you. I yield back.
The Chairman. Mr. Michaud.
Mr. Michaud. Thank you very much, Mr. Chairman. If I recall
correctly the Appropriations Committee mandated that the VA get
a handle on the fee based services that the VA provides. And
the underpinning of the program that the VA undertook was
Project HERO, which I understand has not been a big success. My
question is, do you believe that the VA should get back to the
original intent and actually try to standardize fee-based
services?
Mr. Blake. I do not think I can give a yes or no
specifically, but it is certainly something we think needs to
be addressed further. Since you mentioned HERO, I cannot say
that I know for certain but I believe we have been told that
they are looking at now rolling out HERO onto a national level,
which is of real concern to us given the questions you just
raised. So while that is going on we are not convinced that
that necessarily fixes any of the problems as it relates to the
fee based problem.
Mr. Michaud. Do you agree?
Mr. Violante. I agree with Carl.
Mr. Michaud. My second question, you mentioned the survey
for state veterans nursing homes. Actually, I was at the
Caribou State Veterans Nursing Home in August. CMS came in 1
week and did their survey and rated them 100 percent. The VA
came in the next week, did their survey, and they also got 100
percent. So there is a lot of duplication within two sister
Federal agencies. It is my understanding also that there are
about 43 state veterans nursing homes that CMS does not come in
to do their survey. How would you address that issue with these
43 state veterans nursing homes? I agree that they should get
rid of that duplication, but there could be a problem with the
43.
Mr. Blake. VA would have to sign a contract. They already
signed a contract with all the nursing homes. Just reduce the
number of contracts that they do and still continue to have
those 43 under contract.
Mr. Michaud. Okay. My question relating to nursing home as
well, when you look at cost it is also my understanding that it
is a lot cheaper with state veterans nursing homes than VA
nursing homes themselves. Would you comment on the fact that we
might want to look at utilizing state veterans nursing homes if
the beds are available versus VA since it is more costly?
Mr. Blake. I think the fact that it is more cost effective
is definitely something worth considering. The problem is
ensuring you have the capacity. One of the challenges we have
dealt with in recent years is the VA has a mandate to have a
certain number of beds capacity within its own system and it is
woefully under the number that it is mandated to have. And yet
it becomes an excuse to sort of get out of the long term care
business altogether because you are not backfilling the
capacity outside of the VA, which goes back to my original
point about our concern about whether that demand could be met
outside of the VA system or not. Even though it is certainly
more cost effective.
Mr. Michaud. And my next question, and I know we are
focused on the VA, but if you look at the other sister agency
where there is a lot of cost is the Department of Defense. When
you look at cost efficiencies within the VA system is there a
way that you might be able to utilize the Department of
Defense? A good example is for instance one of the problems
with troop readiness among the Guard and Reserves is dental
care. However, the VA in some of their facilities does not
offer dental care because they say the need is not there. Here
might be a situation where they could actually do a joint
project with the Department of Defense on dental care. And that
is just one example. Any comments?
Mr. de Planque. Well I think we certainly need to look at
all sorts of things. However, historically the Department of
Defense and VA do not have a very good record of communicating
well with each other. This is something that has been a point
of contention I think for all of our organizations for several
years now. And so if we were going to move towards a direction
towards that I think we would want to make sure that we had
really clear lines of communication sorted out. Because as it
is now in terms of virtual lifetime electronic record and
everything, that seems so far behind at this point. And so the
ability of those two organizations to communicate with each
other is really troubling. And if you were going to double down
on that bet with other efficiencies you may be creating more
problems. And that would be a concern that we would want to
look at.
Mr. Michaud. Thank you. I see I have run out of time, Mr.
Chairman. Thank you very much.
The Chairman. Mr. Stutzman.
Mr. Stutzman. Thank you, Mr. Chairman. And thank you to the
panel for being here today, and thank you for your work, and
what you do for our veterans. And thank you for your service as
well. I had a really good couple of weeks over the past couple
of weeks meeting with veterans across the district and also in
Iowa with Mr. Braley where we did a Subcommittee hearing on
economic opportunity in both Waterloo and in Fort Wayne. And
the challenges that we see for our veterans right now is they
face a tough economy.
I want to talk a little bit about some of the notes in your
letter, joint letter. And as, obviously as the Economic
Opportunity Subcommittee focuses on utilizing the VA for
connecting veterans with businesses and those who are looking
to hire, some of the challenges that we heard during these
hearings and also during the open house that I had in Fort
Wayne was some of the frustration with just the delay in the
care, from our local hospital, and just the challenges. They
are trying to figure out what are the challenges that our VA
has. And you mention in here, while funding was indeed reduced
the demand and need for resources were not. And, you know, our
veterans are obviously the ones that we want to make sure are
receiving these services that they need. Could you talk a
little bit about that. Is it just funding? Is it administrative
costs? What is taking some of the time for VA to make sure the
services are provided and are prompt and are making sure that
it is in a timely fashion for veterans? Are there budget
challenges? I mean, I know there is a lot to go on. But I would
like to comment a little bit about that.
Mr. Violante. Well certainly there are budget challenges.
And one of the things that we talk about is transparency in the
budget process. And we are very grateful for the fact that we
were able to get advance appropriations for VA because that has
been helpful. But one of our concerns was that while VA's model
is excellent and we believe that if you put the right numbers
in you get the right numbers out, but there is tinkering that
goes on. And I think the GAO report shows that the numbers that
come out are not always what is presented to Congress for the
needs. And OMB shaves some dollars off.
So we need transparency in the process. We need to know
that the assumptions that VA are making are accurate. And that
what is coming out, their needs, the veterans' needs, are being
accurately presented to Congress for VA's needs. We have seen
too many gimmicks that have gone on over the years in
efficiencies, where we can save $1 billion here. But we have
never seen any of those savings put forth to show us that the
money was indeed saved. So what happens is services are cut
back. So what we need is to see some transparency in this
process. And we hope that we can see that over the next year.
Again, with the GAO reporting on VA's model and the numbers.
But if you look at last year, the last one that GAO did you can
see that we are not getting an accurate reflection of what is
needed.
We also have concerns too about some of the carryover that
is going on from the current year, or from 2011, and whether or
not that was actual savings that were generated or just cut
back. And we are seeing examples down in Florida, in Arizona,
of fee based care that is being denied because they do not have
sufficient funding.
Mr. Blake. And I think it is, it all can sort of be traced
back to a budget concern. But it has an impact on staffing and
capacity concerns. And it has a trickle down effect. You know,
we hear fairly frequently from a lot of local facilities that
say I have run out of money, or I cannot hire the people, or,
you know, have these issues. And it is impacting their ability
to meet demand. And yet the Under Secretary for Health
testified earlier this year during the budget hearings that a
lot of these complaints that come from the facilities are a
conflict between what they want and what they need. Well that
makes for a good sound bite but how do you qualify that?
Because if a facility comes to me and says they are running out
of resources and they cannot meet the demand, where is the
disconnect?
You know, it kind of boggles our mind when, you know, when
every year in July we start hearing from facilities who are
saying, ``I am going to be out of money by the end of the month
and the fiscal year starts 2 months from now.'' And it
certainly runs a red flag up the pole for us and we start
asking questions. And there is no clear answer as to how that
happens. We have pointed to some of this in our letter and in
discussions in the past about, you know, it is a fact that the
VA has seen substantial increases in its overall budget in the
last several years. And yet it seems like on a regular basis
when we talk to people at the local facility what might have
been a 10 percent increase at the national level translates to
a 1 percent at the hospital. And that is sort of
oversimplifying it because there is obviously more to it than
that. But if it is simply based on some demonstrated need
qualify that a little better for us so that we understand.
Because we are not convinced that that is happening the way it
should.
Mr. Stutzman. Thank you very much. I appreciate both of
your comments. I yield back.
The Chairman. Mr. Reyes.
Mr. Reyes. Thank you, Mr. Chairman. And thank you,
gentlemen, for being here. One of the, in a series of meetings
with veterans, and including town halls, one of the big
frustrations expressed to me, and I have a veteran population
basically of about 70,000 in the West Texas, Southern New
Mexico area, is the inconsistency in terms of, through the
veterans grapevine, in terms of the types of services that
veterans get in different VA facilities. That, I was wondering
if you could comment on that? And I am trying to get hold of
whether or not it is an isolated complaint, or is it something
that you hear collectively through your organizations?
Mr. Blake. I would say it is a vague complaint because
veterans all have their own view of what their services should
be and then there is ultimately a determination of what
services they are eligible for and what benefits they are
eligible for. And so it is, it is hard to say. It could be an
isolated situation. We certainly hear on at least a few
occasions from other facilities around the country where people
are concerned about whether they are getting consistent
services. But I, I am not sure that there is a clear answer to
the problem. We would almost have to hear directly from them
and let them explain to us exactly what the problem is that
they see and sort of dig down deeper than that.
Mr. de Planque. One of the things that we have come across
in the System Worth Saving Reports, and you know we will talk
about if you have seen one VA facility you have seen one VA
facility. And you know there is a balance in, I have a healthy
respect for VA and what they try to do in balancing a level of
standardization so that you are getting the same quality of
care everywhere that you get but also reflecting different
regional areas have different regional challenges. You know,
the challenges you would face running a health care system in
the State of Montana are going to be different from the State
of New Jersey, just in terms of access to urban centers and
things like that.
So it is difficult, again, and I think Carl made an
excellent point about, without knowing specifics and being able
to compare that I think it is a difficult line that VA walks.
And I have a respect for that they are trying to do that. I
know we would like to see more standardization and more
consistency VISN to VISN in terms of delivery of what they can
do. But also you have to reflect that there are going to be
different challenges in different areas, and not everything is
going to necessarily be feasible in every area. And so we also
try to recognize that as well.
Mr. Reyes. Anybody else? The other question most often
addressed to me, deals with the Secretary's priority for
identifying homeless veterans. We have made a concerted effort
in my district to try to get to as many of the homeless as
possible to identify them. Is, do you have any recommendation
individually as organizations about what else we might be
trying to do that? I mean, it is a major priority. But it is
very frustrating because we seem to be missing many of the,
many of the people with the most urgent needs in the homeless
community.
Mr. Violante. That is a very tough question, Congressman. I
mean it, I know the Secretary has put a big emphasis on
reducing the number of homeless vets and eliminating them in 5
years. How do you find them is another question. I do not know
the answer to that. I know that people are trying to do
everything they can, even at the local levels, chapters, going
out and trying to find them. But as to how we find them all, I
just do not know the answer to that one.
Mr. de Planque. One of the things that, and I think Dr. Roe
made the point earlier in terms of coordinators and that is
something we want to look into. Coordination I think is a big
thing. When you have multiple organizations like the Department
of Veterans Affairs, you also have the Housing and Urban
Development. But then you also have community organizations,
the American Legion, VFW, all of our veterans' organizations
that are out there in the community trying to reach out. You
have faith based organizations that are doing a lot of work
that are out there. So the tricky part is coordination of so
many moving pieces. I think you hope that if enough people are
out there casting nets, you are going to get everything. But,
it is a concern that there will always be people who are going
to slip through. And it is just aggressively being out there
and trying to coordinate that.
Mr. Reyes. Good. Thank you, Mr. Chairman. Thank you,
gentlemen.
The Chairman. Mr. Denham.
Mr. Denham. Thank you, Mr. Chairman. First of all I also
chair the Committee on Public Buildings. One of the things we
are looking at across the Nation is all of the government owned
buildings for each different agency on where we can
consolidate, where we can sell off things that we do not need,
and bring revenue back to the government. Has VA inventories
surplus or underutilized properties that could either be sold
off or rehabilitated to accommodate increasing needs of our
veteran community?
Mr. Kelley. Yes, they have. There are, I do not have the
number off the top of my head, but they have over 1,000
buildings that are being evaluated for repurposing or being
demolished. And every time, they have a list of criteria to try
to find some other use for it either internally or externally
through a partnership with either another government
organization or a private organization to use that. And the
majority of those are being used for homeless veterans.
Mr. Denham. Thank you. And I would request that this
committee receive a list of that evaluation. Secondly, cost of
brokering, it seems like that has become a standard practice
and continues to escalate in price as well as overtime is
continuing to be reauthorized. Every veteran town hall that we
have conducted in the district and throughout the state, the
issue always comes up about how quickly or how long it takes,
to process a claim. And at the same time, it seems like it
continues to come at a great expense. What efforts are being
done to digitize that and make sure that we are not going back
over and over and over on the same information?
Mr. de Planque. Well I know one of the things that was
addressed earlier was the idea of taking some of the money that
they are using for brokering, and hopefully VA can look at
this, and moving it towards digitizing the claims. We all have
a lot of hope that as they move to a fully electronic system,
as that process continues that it is going to make it a lot
easier if they do have to broker or share information between
offices. That you can do it instantaneously once that system is
up. VA has been very good about meeting with the veterans'
organizations and keeping us posted on the capabilities of the
electronic system. And it certainly should have the capability
to do that. And hopefully there will be some savings there and
they can start turning that towards getting a lot of these
cases moved towards that. VA can probably answer better exactly
what they are doing on that, though.
Mr. Violante. And there may be legitimate reasons for the
brokering, such as the Agent Orange Nehmer cases. But the
question becomes then in a lot of different offices what we
hear from our national service officers is that their regional
office is brokering 150 cases to some other offices. And then
in turn they are receiving 200 cases from some other office
that they are working on now. So it creates quite a problem for
the representatives of the veterans and for the veterans in
some cases when their case is being dealt with at another
regional office instead of their local one.
Mr. Denham. My concern and my frustration continues to be
that we have the Department of Defense not working with the VA,
who is not working with the local veterans' centers. And if we
had one system that we were able to have communication you
would not only decrease the backlog and create more efficiency
in the case work but you would reduce costs at the same time.
Congressman Roe and I just went over to a, and Mr. Walz,
Congressman Walz, went over to Afghanistan recently. And one of
the things we saw was the lack of communication between the
various parties. You know, it started with me going to get
shots. And, you know, we all do not keep our shot records over
the decades. And yet there is no reason that information should
not be in the system itself. So rather than create casework for
every single instance that we need information we ought to have
that accessible throughout the process and reduce costs at the
same time.
The same situation came up with disabled veterans that were
at Ramstein. There was no question that they were disabled. But
yet they were going to have to go through an exhaustive process
to transfer from DoD to VA. One would think that this would not
only be our number one priority in the case of making sure our
veterans are receiving the proper benefits, but the best
opportunity to save costs at the same time.
Mr. Violante. Well the administration announced a couple of
years ago I believe that one of their lofty, long term goals
was to have essentially a seamless system, from the day you
enter the military until the day you died as a veteran. And
that should be the ultimate goal and fashion----
Mr. Denham. I understand. And the frustration is that is
the long term goal. We are going to have more veterans
returning home in the next year than we have since Vietnam. We
cannot afford for the long term.
Mr. Violante. Congressman, I agree wholeheartedly. And what
I was going to say is it has been my experience since that one
of the real roadblocks in this has been DoD's reluctance to
come to the table and really work with the VA on getting some
of these things done. I think the VA, the VA is ultimately in
the business of serving the veteran and anything that can make
that process better they are working towards that end. But you
have to have a willing partner. And in my time here in
Washington, I would argue that DoD has not been the most
willing partner in fixing that problem.
Mr. Denham. And I would agree in my short time that I have
been here. But this committee is looking at cost savings for
the VA. And you have a Supercommittee that is meeting, as well
as sequestration that is on the horizon that between the two of
them we ought to have many willing partners to reduce costs.
And I think that there is a way to increase benefits and
decrease costs at the same time. So what we are looking for is,
you know, that best case scenario. You know, timing is
everything in politics. And right now we have the timing to be
able to push something through that should not be based on the
long term but should be based on right now. So we are looking
for recommendations in that area and we would look forward to
seeing your recommendations on digitizing the entire system.
Mr. de Planque. One really quick note, and I just think we
would also be remiss at this point if when we talk about DoD
and VA here, we cannot forget that the states are involved in
this. The National Guards and the communication of those
records, that often gets overlooked. And that is a big problem.
And we run into that a lot where you have a veteran coming back
who has records that are in Afghanistan, and Landstuhl, and
whatever active duty post that they mobilized through, and
their state has got the records. And DoD and VA communication
is its own problem, but we also cannot forget the state
National Guards. That is a big component of that and has
especially been over the last 10 years.
The Chairman. Ms. Sanchez.
Ms. Sanchez. Thank you, Mr. Chairman. I want to thank our
panelists for being here today. Over the break that we just had
I had an opportunity to visit the VA facility in Long Beach,
which is undergoing quite a bit of modernization and
construction. And it's nice to see the upgrade of that
facility. And just in speaking with veterans during the past
week there seems to be an agreement generally speaking that
services at the VA are improving. So it looks like there is a
path of improvement that VA is undergoing that folks seem to be
happy with. However, there are still many areas that are ripe
for improvement and there are still many veterans that are
underserved in many capacities. It strikes me that if we could
find efficiencies, or find the inefficiencies rather, in the VA
in terms of how it delivers care and help fix those then there
would not be a need for cuts overall because the savings that
you get from inefficiencies could be put towards trying to do
more outreach, or trying to make sure that the need is being
met for returning veterans. And it seems to me that that is the
better case scenario than just random overall cuts which are
not targeted and could cut some essential programs where in
fact more resources are needed.
And while I am heartened to hear about the improvements,
and one of the things that I got a chance to see firsthand were
these new patient centered care models, where patients are not
having to run all over the place to different specialists that
they need but the doctors are actually brought to the patients
themselves. There is still this, the IG has still identified a
consistent pattern regarding the lack of financial controls and
the lack of procedures to ensure that staff are following
management directives. And that seems to be a persistent theme
with the IG.
I am curious, and I know there are many areas that people
have discussed where there could be cost savings, what you
think the single best approach is to trying to confront that
intractable problem would be with respect to the lack of
financial controls and making sure that staff are following
management directives? Because it seems to me that if we could
fix that one problem there are a lot more efficiencies that
would follow. Any of the panelists?
Mr. Violante. I certainly agree with your assessment. But
you probably need to ask VA what problems they are seeing in
getting the word down to all of their employees to follow what
has to be done. I mean, in this Committee and the Subcommittee
on Oversight has a big part to play in that, too, by getting VA
in here and exploring some of these areas. And that was
basically the hope of our letter was to identify some areas to
get the Committee to start focusing on and getting VA in here
to explain. I mean, they may have some legitimate reasons for
why things are happening the way they do, or what is going on.
But you know, we would like to see those areas explored. And
certainly what you are speaking about is one of those areas.
Ms. Sanchez. So your belief is that through increased
congressional oversight of VA you think that those
inefficiencies can be identified and dealt with?
Mr. Violante. Well it would certainly help to identify
those inefficiencies. I mean, you know, we get information from
our members, from our employees who are out there. But we do
not have, you know, all the answers. We do not know why certain
things are happening, if there is legitimate reasons for it.
But certainly to get VA in here to explain those is what we are
really looking for. Because we do not have all the
explanations. We just have a lot of questions.
Ms. Sanchez. Anybody else?
Mr. Blake. I do not think congressional oversight is the
magic bullet. You know, the GAO and the Inspector General do
reports quite frequently on the internal workings of the VA and
more often than not there are lists of recommendations. And the
question becomes, what steps has the VA taken to address any of
those recommendations? As sort of a side example, PVA has an
agreement with the VA where we do site visits with the spinal
cord injuries around the country. Long Beach is one of them. We
identify problems and we raise questions. And the VA takes
steps to address the problems that we raise. But I am not, but
when the GAO or the IG provides a similar report I am not sure
that similar actions take place. And so----
Ms. Sanchez. So it would be, would you say if there were
some kind of enforcement mechanism that would correlate to
findings and recommendations, that that might----
Mr. Blake. Well I am not sure what enforcement is because
it sort of implies punishment. And I am not sure that you want
to punish the VA for not taking active steps towards some end.
But I guess something down that road is what we are looking
for.
Mr. de Planque. I think if we all look at this as
partnership. I think all of the groups that are here, we have a
partnership with your committee here, we have a partnership
with the VA. And we can offer advice. And when we write a
letter and come up with things, we are meaning to start a
dialogue. And to start that process back and forth. And you are
right, you do not want to create the idea of punishment. But
consequences.
Ms. Sanchez. Well that is what I am saying. I mean----
Mr. de Planque. And there needs to be some sort of follow
through. And I do feel like we may have a lot of these
hearings, and we may say a lot of the same things at a lot of
the hearings, and it does not seem like things get done
sometimes. And so, that can lead to a lot of frustration with
people. But as long as we maintain the idea that we have a
partnership, and that we have an open dialogue, and that we are
all working towards the same end, trying to deliver the best
services we can get for the veterans, I think making sure that
all of the partners at the table maintain that attitude towards
partnership and towards being open with their dialogue
discussions, and being receptive to saying to the critiques and
different viewpoints offered by others. I think keeping an open
mind about that will certainly help.
Ms. Sanchez. Thank you. Thank you, Mr. Chairman.
The Chairman. Mr. Runyan.
Mr. Runyan. Thank you, Mr. Chairman. And thank you all for
your testimony. I raise it all the time when ultimately you are
talking about partnerships, and Secretary Shinseki says it all
the time, it is accountability. I mean, it is holding each
other accountable throughout those partnerships. But it is
ironic that in your access to care example you used Montana and
New Jersey. Because, quite frankly, my constituents a lot of
time their biggest problem is access to that care. Whether in
South Jersey you have to go to East Orange, Philadelphia, or
Wilmington. It is an issue.
The thing that puzzles me about it, because the chairman
kind of spoke about it earlier, you know, do we develop a
network? Obviously, you know, the signature injuries of this
conflict we have been in, and will continue to be, PTSD and
TBI. Are we prepared to tackle that? We still have not
conquered what veteran came back from Vietnam with, with Agent
Orange. And we are going to pile this on top of that. Are we
able to tackle that? And without the access to the care, are we
pushing these medical decisions, are veterans pushing them off
just because they do not want to make the commitment to travel?
Specifically our young ones coming back where they are still
out, they are trying to battle this, you know, 20 percent, 40
percent unemployment thing. They cannot take two, three, two
days off to go try to get the treatment and figure out what it
is. Is there an avenue there that we can possibly, you know,
look at something like this to help them? And not to prolong
these issues? Because we know when we prolong health decisions
they pile up and become more costly at the end of the day.
Mr. Blake. I am not sure if I am going to answer your
question but I am going to try. I think the problem is framing
the question of access. I am a regular user of the VA and I
talk to a lot of veterans when I go to the VA on a regular
basis. And you hit the nail on the head. It is always a
question of access. And generally the complaint I hear is
actually getting into the VA in a timely fashion, their access.
I rarely if ever hear a complaint about the quality of the
services that are provided. However, that gets spun into their
concern about access so they want to go to their local
provider. That is not the same thing. And I think the question
of access differs depending on whether you are talking about
Montana or New Jersey. Because the access problem in Montana
is, there is no health care. But there may not be a VA
facility, but there may not be any health care in some rural
areas. Look at Alaska and the options they have there.
Whereas in New Jersey the problem is you have a very
centralized population and massive demand into a single
facility. And most of those people still want to go to that
facility. So it is hard to satisfy their concerns because at
the end of the day they want to get into the VA because they
know that is where the best care is. And so I am not sure that
even if you give them another, a different opportunity, that
addresses their ultimate access concern. I don't know I
answered that question.
Mr. Runyan. Well but giving them the opportunity could
potentially avoid critical health care decisions that have to
be made down the road.
Mr. de Planque. Mr. Runyan, I think part of the issue is,
for access is the amount of service. Right now VA is at 121
percent capacity at their VA facilities. In 2002 they were
around 90 percent capacity. So growth of demand, the facilities
have not grown at the same rate.
VA has an exceptional capital assessment plan in place.
They have really studied hard, understand where the gaps are,
what needs to be done to fill those gaps. Funding is the issue,
we continually underfund VA, to make sure that they can fill
those gaps. To make sure there is enough facilities in New
Jersey to cover everybody that comes in, make sure that there
are CBOCs in rural Montana. We do not have the funding to do
that right now. And at the end of the day, that is your access
issue.
Mr. Blake. And there is another problem. Because you could
also look at it in terms of if I want to go see my primary care
doctor I want to just go see my local primary care doctor. But
then if a veteran incurs something much more significant, a
serious illness, or a spinal cord injury, or incurs some other,
much more specialized type of service is required, they are not
going to have access to that in the private setting, no matter
where they are at. The fact is the VA is the best in this
country when it comes to providing all the broad array of
specialized services. And so while we might allow for
convenience, which is going to see your local provider, then
you could ultimately have a negative impact on that veteran's
care if they cannot then get into the VA when they need real
serious health care services.
Mr. de Planque. One thing to bring up on this, and this is
something we used to deal with on a regular basis in the Army,
is that when a problem would come up you could easily develop a
work around that would work for that moment. Which is good, and
you have to adapt, and overcome. The problem was all too often
the work around became the standard at that point. And so you
basically set up a flawed system. So rather than saying there
is a flaw in the system right now, we all understand that it is
very important to be able to get that care to those veterans
immediately and we want to do that. But we want to make sure
that we are not overlooking that flaw because we came up with a
work around and we do not have to pay attention to it anymore.
And so as a long term system I think most of us agree that
we want to be able to deliver VA care. And there is a lot of
things when we talked about making sure VA management is still
available, if people were getting outside care, because there
are things with VA's record keeping that they do that no other
health care system in the world does in terms of being able to
oversee total patient management and see potential issues
outside of things and identify things that might slip by hidden
as unseen wounds. There are things VA can do with that. And so
I think ultimately we want to be able to get VA access for
those people. However, in the short term we still have to get
the care to the people. And so we want to look at a system that
is going to be able to get care to the people right now when
they need it but not overlook the error that there is a, say a
cadre of people that are not getting care in the Pine Barrens
or wherever it is. And that is the thing that we want to
remember. Is not forget the error that caused us to do that
work around.
Mr. Runyan. Thank you, Chairman. I yield back.
The Chairman. Mr. McNerney.
Mr. McNerney. Thank you, Mr. Chairman. You know the
Committee and the Congress has increased the VA budget
significantly over the last four or 5 years. And I really like
hearing from your point of view that it is a partnership
between this committee, the VSOs, and the VA, because that is,
while we do not always have the same thing in mind, we want the
veterans to get the best service we can, but we also want to
see the best bang for the buck. My first question is general,
have we gotten the best bang for the buck over the last 5
years? Has that increase in spending really filtered down to
increased benefits? Mr. de Planque, do you want to take a shot
at that?
Mr. Blake. Somebody mentioned earlier that the capacity of
the VA is at 120 percent. Well that would suggest to me that we
are getting far more bang for the buck than we might have
anticipated. Is there some unsatisfaction? Sure. But the VA
must be doing something right if there is that kind of demand
on the system even with it being apparently seriously
overburdened.
Mr. de Planque. People are using it and wanting to use it.
And we are, and this is something we definitely have to keep
track of, because they are talking about big force scale downs
and things like that. So we are putting a lot more veterans who
are going to be out there into the system and there is going to
be a lot more load on the VA. I think we have seen the volume
even of VBA, and what VBA is dealing with, the number of claims
that they are having to deal with, their volume is increasing
exponentially. And so we are sympathetic in some ways to what
they are trying to deal with as far as that. However, we do
have concerns. Carl mentioned earlier and he was picking random
numbers out but the idea that you might increase a budget 8
percent but only 1 percent is trickling down. And that is where
I think a lot of us have concerns, that the budgets are going
out there.
And you know, my colleague Ray just talked about that we
are not meeting the construction budgets. And all of us sitting
here at this table back in the budget talks in the spring
mentioned that we thought that the construction budgets, major
and minor construction, were underfunded. And that the proposal
was not going to meet the needs that they need to meet their
infrastructure needs for the future.
So spending is going there but there are probably concerns
that not all of it is getting to the right places. And we are
still raising the flags about those things. So that is
infrastructure spending that you have to do if you want to be
able to maintain the system to deal with the volume. The demand
for veterans is there, and there was a time when I think
veterans were afraid of or did not want to go to the VA. I
think that is largely changing. I think that you know we have
all talked about, when you can get the access to the care, and
when you can get there, I know Carl mentioned it, I use the VA
as my health care provider and I could not be happier with the
care that I get. So we are delivering a good quality product
when we can get the veterans to it. But I think we are falling
short in some places of getting those dollars down to the
street level and making sure that the investment is getting to
all the places it needs to get to.
Mr. McNerney. Thank you. Well I appreciated the effort that
went into the letter, the VSO letter. One of the things you
mentioned was the size of the general administration budget. Is
there some concern there that that could be an area where
trimming could be done?
Mr. Violante. That is a question we hope you are going to
ask VA when their panel gets here. Our estimation is that there
may be too many administrative staff. I mean, obviously you
need administrative staff. But are they at a number that far
exceeds the benefit? Should some of those people doing hands on
service, whether it is claims work for veterans, or health care
work on the medical side, it is a real issue. When you look at
the increases over the years in admin I think they are growing
at a very rapid rate. And the question becomes can we get a
better bang for our buck if those people were in different
positions?
Mr. Blake. And it is not to say that there might not be a
logical reason for that increase. The VA sort of tried to
explain back in the beginning of the year, when that was the
first question that popped up in a lot of people's minds is
this does not, I got back to it does not pass the smell test. I
look under their chart and directly underneath general
administration is the Veterans Benefits Administration, which
was recommended at a decrease from the previous year. And that
may be justified as well but we all know the struggles that VBA
is obviously facing with regards to processing claims. And
those two things just do not seem to line up with the world
view of what is going on within the VA.
Mr. de Planque. And you know when they are talking about
kind of record amounts of overtime for VA employees. And yet
when they are asked, you know, do you have the number of
employees on the ground level to meet the needs and they say
yes, and then they start plussing up the central office staff,
but all the people out in the regional office are working
overtime, and double shifts, and things like that. That is what
raises flags for us. And obviously, VA is going to be better
able to answer that. And there may be very, very good answers
for why the expansion is where it is. But these are the reasons
that these flags come up for groups like us as we look at this,
is because we see that they are struggling out on the pointy
end of things dealing with the situation. And we want to make
sure that the resources are getting there so they can deal with
that. And so that you are not overtaxing the employees who are
having to deal with that on a daily basis. Because if you are
working 60, 70 hour weeks, the quality of those individual
hours may be going down a little bit. And we do not want that
to be happening either.
The Chairman. Mr. Walz.
Mr. Walz. Well thank you, Mr. Chairman, for holding this,
and thank you to all of you. As a veteran I cannot tell you how
happy I am that you are out there. This has been very good for
me again. I know you are always there. Ian, I had at the top of
my sheet, ``Great partners with VA and us,'' this partnership
idea that we have always been there. And I think the best
partners are those that are holding us accountable to every
dollar. That we are the strongest supporters of the VA and the
harshest critics, and I think it should run amongst all of us.
So I think you brought up some great points.
I think there are some, and you brought up some great
truisms. My frustration with the whole, you know, this is such
great stuff I wish the Supercommittee could be here. But since
we are not on the politburo we are here to try and pass that
on, to pass it on.
But it is very frustrating to me that this, these false
choices or whatever that all spending is created equal. We are
here to make sure that no taxpayer dollar is wasted. And I said
the VA is a sacred responsibility because that is one less
dollar going to the care of veterans. That is the way you see
it, about making sure the needs are there, making sure they are
accountable. So this is not harsh criticism about that. I want
to know this too, where they are going. But we do these blanket
statements, that all spending is bad, we cut it, we do all
this, without asking what are your specifics? Where would you
say that? What about the need? And yes, we need to get
processing times down but we added an awful lot of Agent Orange
folks to that. And did we give them the resources to address
that need?
So I guess for me, and I think all of us know this, I just
came out of a meeting before this one started without outgoing
Surgeon General Schumacher and the great work that has been
done in Army medicine. The incredible work that has been down
range identifying mild traumatic brain injuries and percussive
blast with the idea that addressing them early will reduce the
long term costs and the long term danger and loss of
productivity to those members.
But my frustration, and all of us have beat our heads
against the wall over this issue, we all know this is a
seamless transition, where the heck is Armed Services? We sit
here and hold these hearings by ourselves, talking about DoD,
and talking about they do not cooperate, they do not get along
together, VA and DoD do not cooperate. Are we doing it? Are we
making a strong effort here to hold that joint meeting, to
bring those folks in, to make the decision makers there, get
that in. I know you guys have been there. You are absolutely
right on, you are spot on on this, you are at the point. I hear
your concerns too on this, Carl, you are talking about this,
the nine to one. I hear it from folks out there and I go right
to the point of where they are delivering it. How many more
nurses have been added to this ward? None since then. Well we
gave money out there. How many more patients have been added?
Seventeen percent more. That is the issues I am looking at, the
numbers we are out trying to look at.
So I do think VA needs to have some answers on that. I am
one, the teacher in me always was complaining any time the
principals got something, or whatever. Or why are they getting
it? Or whatever. Well I know the research shows the best
schools are the ones that have the best principals. I also know
that administration means a lot and it does a lot, it allows
our people to do their jobs. But it has to be appropriate.
And somehow we are going to have to crack this
congressional barrier between Armed Services and VA, get
serious about this. I don't know, we, and this was last
Congress, Mr. Chairman, it was all of us in this, but the
previous one before your chairmanship we had offers from
Secretary Shinseki and Gates to sit together here with this on
that. We never brought them. They have never been here.
So I apologize for my frustration on this. I am not telling
you anything. I am preaching to the choir. Keep where you are
at. Keep talking about this. Force these accountabilities. Make
us more efficient. Make a realization. As Mayo Clinic says, we
have two of the most fantastic hospitals in the world 90
minutes from each other, Mayo Clinic and the VA hospital in
Minneapolis. Those are two, not just the best VA hospital, the
best hospital. And that is what we owe to these warriors.
So I do not necessarily have a question but you brought up
some great suggestions. I just want you to know that I think my
responsibility, maybe you could respond to this, would it help
if we collaborated here with Armed Services? If you want to, I
am the one who will get in trouble for complaining so you can--
--
Mr. Violante. I think that would help greatly. It is
something we would like to see is this Committee and Armed
Services Committee sit down with VA and DoD and find out where
the glitch is. I think about what Senator Webb said when he
first came into the Senate that when he was a staffer on the
Committee 25 years ago, 30 years ago, they were talking about
seamless transition and here we are still talking about it. And
I do not quite understand why there is a problem. But I think
having both of the parties sit down in front of the Committees
and talk about where the problems are may help to resolve the
situation.
Mr. Walz. Well I, this is important, your institutional
knowledge is critical on this. Because when I came, you know,
oh, I'm cutting edge here, I am asking, because I could see
people looking at me, ``Really? You are the first guy who ever
mentioned seamless transition.'' You know? And now I see new
members getting excited about it. But they get it, they are
there. But we seem to keep passing this on to each new members
and then members of Congress leave, and a new one comes in, and
say, ``I have this great idea. DoD and VA should communicate.''
And at some point it has got to go. We have to get it done.
So I yield back, Mr. Chairman. Thank you for indulging me
in that mini-rant, there.
The Chairman. Thank you, Mr. Walz. Point well taken. An
invitation is in the printer as we speak, and we will work on
doing that as quickly as possible. Mr. Bilirakis has waived his
questions and we appreciate you being here to testify at this
hearing. And with that, you are excused.
I would like to call the second panel forward. As they are
making their way to their seats I will go ahead and introduce
them. Mr. Todd Grams, Executive in Charge of the Office of
Management and Chief Financial Officer for the U.S. Department
of Veterans Affairs. He is accompanied by Diana Rubens, the
Associate Deputy Under Secretary for Field Operations of
Veterans Benefit Administration. Mr. William Schoenhard, the
Deputy Under Secretary for Health Operations and Management of
the Veterans Health Administration. We have Belinda Finn, the
Assistant Inspector General for the Audits and Evaluations for
the VA Office of Inspector General, who is accompanied by Ms.
Linda Halliday, the Deputy Assistant Inspector General for
Audits and Evaluations, and Sondra McCauley, the Deputy
Assistant Inspector General for Audits and Evaluations for the
VA Office of Inspector General. Mr. Grams, you are recognized.
STATEMENTS OF TODD GRAMS, EXECUTIVE IN CHARGE FOR THE OFFICE OF
MANAGEMENT AND CHIEF FINANCIAL OFFICER, U.S. DEPARTMENT OF
VETERANS AFFAIRS; ACCOMPANIED BY DIANA M. RUBENS, ASSOCIATE
DEPUTY UNDER SECRETARY FOR FIELD OPERATIONS, VETERANS BENEFITS
ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS; AND
WILLIAM SCHOENHARD, FACHE, DEPUTY UNDER SECRETARY FOR HEALTH
OPERATIONS AND MANAGEMENT, VETERANS HEALTH ADMINISTRATION, U.S.
DEPARTMENT OF VETERANS AFFAIRS; AND BELINDA J. FINN, ASSISTANT
INSPECTOR GENERAL FOR AUDITS AND EVALUATIONS, OFFICE OF
INSPECTOR GENERAL, U.S. DEPARTMENT OF VETERANS AFFAIRS;
ACCOMPANIED BY LINDA HALLIDAY, DEPUTY ASSISTANT INSPECTOR
GENERAL FOR AUDITS AND EVALUATIONS, OFFICE OF INSPECTOR
GENERAL, U.S. DEPARTMENT OF VETERANS AFFAIRS; AND SONDRA
MCCAULEY, DEPUTY ASSISTANT INSPECTOR GENERAL FOR AUDITS AND
EVALUATIONS, OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT OF
VETERANS AFFAIRS
STATEMENT OF TODD GRAMS
Mr. Grams. Good morning, Chairman Miller, Ranking Member
Filner, and Members of the Committee, and Congressman Michaud.
I am accompanied today by Bill Shoenhard, VHA's Deputy Under
Secretary for Health for Operations and Management; and Diana
Rubens, VBA's Deputy Under Secretary for Benefits for Field
Operations. I am pleased to be here with my colleagues and to
be at the table with Belinda Finn and her colleagues from VA's
Inspector General's Office. I also want to recognize our
partners and friends, the Veterans' Service Organizations. They
continue to serve as tireless advocates for our Nation's
veterans.
Mr. Chairman, today's letter is centered on a joint VSO
letter provided to this committee earlier this year. The letter
responded to your request for ways that VA could identify areas
where there are opportunities for greater value of VA resources
and in the end provide more and better services to veterans. I
have two central points in my remarks this morning. First, VA
has taken significant steps over the past 3 years to become
more effective and efficient. And second, there is more we need
to do.
Any large organization intent on maximizing value must have
strong financial management operations. The release today of
our auditors' fiscal year 2011 report on VA's financial
statements marks the second year in a row of strong
improvement. The most significant problems auditors can find
are referred to as material weaknesses and the second most
significant are called significant deficiencies. In 2008 VA had
three material weaknesses and 16 significant deficiencies in
financial management. Today we have no material weaknesses in
financial management and two significant deficiencies.
These and other accomplishments have strengthened our
financial management and we must continue to get better. For
example, although we have reduced improper payments in pension
and education programs, the continuing issues in fee basis care
have to be effectively addressed to stop unnecessary
expenditures. And while we have reduced retention allowances
across the VA, an audit released by the IG yesterday confirms
that this is an area for improvement.
Collections by VA are a major funding source for our health
care systems and we are working to turn the tide in our revenue
collections with initiatives such as the Consolidated Patient
Accounting Centers which centralize and standardize collection
activities.
The Veterans Equitable Resource Allocation system, or VERA,
is the way we ensure that health care dollars get to where
veterans need care. There is a belief however that the recent
increases in health care funding are not reaching veterans who
need it when in fact over 97 percent of our medical care budget
goes either to the field or to national health care programs
like CHAMPVA. It is also worth mentioning that if at any time
during the year a VAMC or a VISN director believes they require
more funding we have an open and equitable process to ensure
those needs are analyzed and, if justified, funded.
For performance awards at the Senior Executive Service
level we have taken action to make our executives more
accountable and to tie performance to results. More
specifically the percentage of executives at the VA who receive
a top outstanding rating has been reduced by one-third since
2008. The VSOs also raised questions about the growth in staff
offices. A strong headquarters is required to drive
transformation. It is important to note that increases in staff
offices have increased proportionately with the VA system over
the past 3 years and, as such, staff offices continue to
consume about 1 percent of VA's total staffing. The increases
we have made in staff offices have allowed us to establish
organizations that are leading efforts to provide outreach to
let veterans know about what benefits they have earned, to
address our wounded warriors' transition from DoD, to eliminate
homelessness, and to provide greater assistance to survivors.
On conference and travel expenditures, VA has tightened its
guidelines to demand examination of teleconference
alternatives, use of local venues, and trainer approaches
before approval of each conference event.
My written statement, Mr. Chairman, also highlights changes
underway at VBA that are centered on eliminating the disability
claims backlog, changes that focus on our people, our
processes, and our technology, all at the same time. The
written statement also responds in some detail to the benefits
issues raised by the VSOs in their letter.
Mr. Chairman, in closing, I do believe the VSO letter that
is the center of attention today raises the right question. How
do we do more for veterans and how do we do it better, in a
time of fiscal constraint? Thank you for the opportunity to
appear before your committee this morning.
[The prepared statement of Todd Grams appears on p. 46.]
The Chairman. Thank you, sir. Ms. Finn.
STATEMENT OF BELINDA J. FINN
Ms. Finn. Thank you, Chairman Miller. Chairman Miller and
Members of the Committee, thank you for the opportunity to
testify this morning. With me today are Linda Halliday and
Sondra McCauley, the Deputy Assistant Inspectors General who
are directly responsible for the work I will be discussing. As
auditors we are deeply committed to identifying budgetary
savings in the Department of Veterans Affairs and we have read
the recommendations from the veterans' service organizations
with great interest.
Of the many issues raised by the VSO, we believe the
improved management and oversight of medical care provided
outside of VA facilities, commonly known as fee care, offers
the greatest opportunity for savings. Under the program VA
medical centers authorize veterans to receive treatment from
non-VA health care providers when VA cannot provide the care.
Fee care costs increased from $1.6 billion in fiscal year 2005
to $4.4 billion in 2010. And this amount will continue to grow
as health care costs rise and the demand for health care
increases.
Our findings in the area of fee basis care have addressed
the processes to authorize and pay fee claims, inefficiencies
in VHA's payment processing organization, controls to prevent
and detect fraud, and opportunities to bill third party
insurers for fee care claims. We estimated that VA could save
$293 million annually from improving authorization and payment
procedures and $134 million annually from streamlining its
payment model. Also, VA could be paying at least $114 million
in fraudulent payments and missed revenue opportunities of
about $110 million annually. Between these four reports we
identified approximately $650 million in annual potential
savings. VHA has agreed with all of our recommendations and is
taking action to streamline its fee care payment process.
Our written statement also outlines the results of our
audit work related to other issues raised by the VSOs, such as
claims brokering, employee compensation issues, and the use of
overtime in VBA. As Chairman Miller just mentioned, we just
released our latest report on employee retention incentives
yesterday. In this report covering retention incentives at the
VA central office and VHA, we questioned the appropriateness of
126 out of 158 incentives, or approximately 80 percent. These
problems happened because the VA personnel needed guidance,
oversight, and training to effectively administer the program.
Both VHA and VA have agreed with our recommendations and
findings and will be taking corrective actions.
In addition to the issues raised by the VSOs we believe VA
can reap substantial benefits by improving its processes in
acquisition, delivery of health care and compensation benefits,
information technology management, and workers compensation for
employees injured on the job. Improving acquisition practices
seems particularly prone to savings since VA purchases goods
and services in excess of $10 billion annually.
VA has also long experienced challenges in managing its
information technology investments. In response to these
problems VA implemented the Program Management Accountability
System, known as PMAS, in 2009. In September of this year we
reported that VA lacks controls to ensure data reliability of
the information in PMAS, verify project compliance with the
PMAS process, and track the project cost. Until these issues
are addressed VA risks further IT cost overruns, schedule
slippages, and performance problems.
Several of our ongoing audits address other concerns raised
by the VSOs, or have the potential to identify significant
savings. We expect to issue final reports on these audits in
calendar year 2012.
Mr. Chairman and Members of the Committee, thank you again
for the opportunity to be here. We will be pleased to answer
any questions that you may have.
[The prepared statement of Belinda J. Finn appears on p.
53.]
The Chairman. Thank you very much, Ms. Finn. I would like
to start, Mr. Grams, with you. I told you in my opening
statement that I was going to ask a question in regards to
sequestering. We all know that it is OMB that actually is the
one that interprets the sequester rules. And so our question,
the VSOs raised it, this committee has raised it, are veteran
dollars exempt if we go into sequestering?
Mr. Grams. Thank you, Mr. Chairman. We did note that in the
letter that you and Ranking Member Filner sent to the
Supercommittee you indicated your view that existing law
exempted all VA programs from sequestration. The administration
and the Secretary are committed to ensuring veterans get the
care that they need. Your letter to the Supercommittee also
noted possible legal ambiguities to the Budget Control Act and
how it applies to VA with regard to sequestration.
We are researching those ambiguities. We are working with
OMB. As soon as we have the resolution to that legal question
we will inform the Committee right away.
The Chairman. We have been working on the issue now for 3
months. How long do you think it is going to take to get an
answer? I mean, the Supercommittee has to make their
recommendations next week. And this Congress has to approve or
disapprove of them right before Christmas. So I mean, 90 days
is not long enough to get a ruling from OMB?
Mr. Grams. Mr. Chairman, we are hoping to have the issue
resolved shortly so that we can know----
The Chairman. Could you give us an idea of when the request
was made to them as to whether or not veterans were exempt?
Mr. Grams. Mr. Chairman, that request went from our General
Counsel's Office to OMB General Counsel's Office. I will go
back and get you that date, sir.
The Chairman. I think all of us would appreciate if that is
something that immediately when the law was signed by the
President, if it was something that VA recognized was important
to get an answer to this committee. I think all members of this
committee certainly expect to know something very quickly. So I
would like to hear something as quickly as possible.
Mr. Grams, in your testimony you highlighted the importance
of conferences, because they enable VA to among other things
share best practices and provide opportunities for your
employees to establish and enhance their professional contacts
with relationships within VA. From a cost standpoint, fiscally
only, how much does VA spend annually on conferences of 50
people or more? And what over the last few years has been the
trend of conferences? Are we having more of them or are we
having less of them?
Mr. Grams. Mr. Chairman, in 2011 we spent a little over
$100 million for conferences at the VA. Those conferences are
used for a variety of goals and objectives. They can include
symposia. They can include leadership meetings. For example, in
VBA when their leadership and teams get together to evaluate
the updating and the reevaluation of the VBA compensation
schedules, that falls under the title of conferences. When
VHA's leadership gets together to set and discuss major
clinical and health care policy and financial policy across
VHA, that also falls under that category.
You asked for the trend, sir? In looking at this, in 2009
it was about $92 million so it has gone up a bit over the last
2 years. And I think that reflects our efforts to try to
integrate the VA, have better communication, and better
coordinate among leaders and managers.
The Chairman. Is that the dollar amount has increased? Or
the number of conferences have increased?
Mr. Grams. That is the dollar amount that I was giving you.
The Chairman. Do you know whether or not conferences have
increased? Or is that something you need to take for the record
as well?
Mr. Grams. If I could take that for the record, I will get
that for you.
The Chairman. Absolutely. You have mentioned
teleconferencing. I know that the Chief of Staff has called, or
submitted a directive calling for maximizing the use of
teleconferences. Can you give the Committee an idea of where VA
is now? Has that risen? And because of the maximization have we
seen fewer conferences?
Mr. Grams. Mr. Chairman, we are making greater use of VTC
through the efforts of our Chief Information Officer. And not
only was teleconferencing part of the August memo that you are
referring to from our Chief of Staff tightening up on
conferences, he is requiring a detailed business case for each
conference as well as ensuring that we are selecting economical
venues. We are looking at holding things, if possible, within a
50-mile radius of the vast majority of the people who need to
be at the conference--having those events being at VA venues,
as opposed to having to buy the venue from the private sector.
It is also worth noting in that same memo that you referred
to, Mr. Chairman, that the Chief has charged us with reducing
the costs of travel and conferences by 25 percent below the
2010 level. That is consistent with the President's new
executive order that is requiring a 20 percent reduction across
a variety of areas such as multiple IT units, printing, travel,
and what they call swag.
The Chairman. No $16 muffins, though?
Mr. Grams. No, sir.
The Chairman. Mr. Michaud.
Mr. Michaud. Thank you very much, Mr. Chairman. Mr. Grams,
I would like to follow up on the chairman's question as far as
the sequestration issue. What is the VA's position and General
Counsel's?
Mr. Grams. Our General Counsel is, has looked at the
history of everything building up all the way back to I think
Gramm-Rudman, up to the act for today. They are continuing to
discuss this with OMB, sir. And as soon as they have an answer
to that question we will let the Committee know.
Mr. Michaud. When you deal with OMB on this issue but other
issues, do you say this is the way you feel it should be?
Mr. Grams. Our General Counsel will be providing to OMB
during that exchange what they have found as they have looked
at the law and the statute.
Mr. Michaud. And what is that? Do you support the
Committee's understanding of what the law is?
Mr. Grams. I think as the Committee pointed out in their
letter that, based on history, it would appear that VA would at
least to a large extent be exempt from sequestration. But as
the Committee also noted in your letter, there are ambiguities
to the law and that is what we have asked our lawyers to----
Mr. Michaud. Okay. I do not know how to make this question
clearer. Do you agree with the Committee's recommendation?
Because the problem that I see is if we are saying this is our
interpretation of the law. You are saying you are waiting for
OMB to answer. But on the sideline you are saying well we
really do not care. Do you have a position or do you not have a
position on this?
Mr. Grams. At this point we do not have an official
position, Congressman. We are working with OMB to develop the
administration's interpretation of the law.
Mr. Michaud. So your General Counsel does not know what the
laws say? They do not have a position?
Mr. Grams. Have they taken a position? No, sir. That is not
their role before they discuss these matters with OMB. They
have researched the law and my understanding is that they are
working with OMB to come up with the right answer to that
question.
Mr. Michaud. So they do not have a position on it? They are
waiting, well I guess my only concern is what is the use of
having your General Counsel if they cannot take a position and
make a recommendation to OMB?
Mr. Grams. Well, I think it, if I am misunderstanding you
or if it is semantics, I apologize, sir, I think it is not our
General Counsel's role to take a position, per se. This has to
be worked out within the administration so the administration
provides Congress with one consistent answer. The General
Counsel has taken a technical review of the law and provided
their information to OMB as part of those deliberations.
Mr. Michaud. Okay. So in their technical review of the law,
what is that? What is their recommendation under their
technical review of the law?
Mr. Grams. The General Counsel with the information that
they have provided to OMB will lead to their final conclusion
in working this out, sir, so that we can give Congress one
answer.
Mr. Michaud. So they provided their technical review to OMB
already?
Mr. Grams. That is my understanding.
Mr. Michaud. Can you provide the Committee with a copy of
that?
Mr. Grams. I will go back and make that request of our
General Counsel, sir.
The Chairman. Will the gentleman yield?
Mr. Michaud. Yes.
The Chairman. A 2010 law, it says this specifically, and
this is where I do not understand why there is so much
consternation. Veteran programs, the following programs shall
be exempt from reduction under any order issued under this
subchapter. The subchapter being emergency powers to eliminate
budget deficits. All programs administered by the Department of
Veterans Affairs. And that is why I am trying to, I do not
think any of us understands where the fogginess is coming from
in regards to that comment.
Mr. Grams. Mr. Chairman, as you know when interpreting the
law, it is not only looking at a particular provision at a
given time but it is going back and looking at the history and
other provisions that it may or may not reference. I would, if
I recall right, believe that in the letter going to the
Supercommittee, it raised issues about potential ambiguities
and that is what we are trying to work out, sir, so that when
we give Congress the answer we give you, the right answer one
time.
The Chairman. So using that rationale if I went up to
subsection A it says benefits payable under old age, survivors,
and disability insurance program established under Title 2 of
social security it also says shall be exempt from reduction
under any order issued under this sub, so social security
beneficiaries better be concerned too, correct?
Mr. Grams. Sir, as the CFO of the VA I am hesitant to
comment on the law as it applies to social security. But I
appreciate your question and concern.
Mr. Michaud. So what you are telling me is the General
Counsel does not have a legal opinion on this matter?
Mr. Grams. Congressman Michaud, if it is okay I would like
to go back and relay your concern to our General Counsel's
Office and request that they respond appropriately.
Mr. Michaud. I just want to know if they have a legal
opinion on the matter. I mean, if they do not have a legal
opinion then why do we have a General Counsel? Probably we
could save money there. I mean that is why you have a General
Counsel, to give you legal opinions. And this appears to be a
question of whether or not it is, whether or not we will have
to comply with sequestration. but if you could get back to the
Committee I would appreciate it.
My other question when you look at cost savings, and it is
an issue that was brought up by the VSOs. And I know the Under
Secretary as well had talked about saving costs. It gets back
to the nursing home issue. Is that something that you are
looking at? Is trying to streamline the process so if there is
duplications with CMS and the VA as far as the surveys for
nursing homes, to eliminate duplication?
Mr. Grams. Congressman, I will ask Mr. Schoenhard to
respond to that.
Mr. Michaud. Thank you.
Mr. Schoenhard. Congressman, yes, we are looking at that.
As you pointed out, sir, in the earlier panel there is a number
of facilities that are not CMS certified. And we take very
seriously the oversight and the review of veterans for which we
have fiduciary responsibility for their care as we are
providing these funds. So we would need to work through the
large number of facilities that are not certified. We need to
balance how we would do that with access. I guess one could
take the position they should all be CMS certified. That might
restrict access. I am not sure that is the answer. There are a
number of areas that we look at that CMS does not look at, but
we appreciate the efficiency with which that might be achieved.
And we will continue to study that. But we need to do so most
mindful of the safety and the quality of care for our veterans.
Mr. Michaud. I agree. And if I recollect when I saw the two
surveys they are very similar, number one. Number two, actually
there was a report, and I believe it was a former admiral, a
former member of Congress, talked about a nursing home facility
the VA operated that was not very good. When you looked at the
safety, as matter of fact, I think the report talked about
maggots coming out of wounds of a veteran that was in a VA
facility. And that was a couple of years ago. And it was
Admiral Sestak, I believe, that brought that forward to the
Committee. So if you really could look at that. And I would
like to see a side by side of what the VA asks as well as the
CMS. Because I think this is an area we might be able to save,
you know, some money. So.
Mr. Schoenhard. We will certainly do that, sir.
Mr. Michaud. Thank you. I yield back.
Mr. Bilirakis [presiding]. Mr. Grams, I am concerned about
the antiquated process the VA is using to broker claims.
Approximately how much does the VA spend per year on brokering
claims?
Mr. Grams. Thank you, Congressman. I am going to ask Ms.
Rubens from VBA operations to address your question.
Mr. Bilirakis. Very good. You are recognized.
Ms. Rubens. Thank you, Mr. Grams. The prospect of brokering
is one that VBA utilizes currently. I say currently because we
have some longer-term plans in place, allowing us to increase
some organization capacity and ensuring that veterans are being
served as effectively as possible. The stations that we
currently broker to are our more effective and efficient
offices.
Long-term, though, we also understand and having heard the
comments from the first panel as well, the need to move away
from physical shipment. The issue becomes one of establishing
that paperless approach to allow us to do away with brokering
to ensure that that is a cost that we no longer have to incur.
As we establish that capacity to manage surges, if you will, in
a handful of regional offices we've also had the opportunity to
benefit from the IG's report on brokering. Some of its
recommendations will allow us to see some savings by avoiding
shipping cases that have been prepared for a rating decision to
another office to be rated. This has been put in place at the
IG's suggestion as well as the suggestion that we consolidated
the Nehmer readjudication claims during fiscal year 2011. We
felt as though we needed to ensure we had the most effective
utilization of those resources.
Mr. Bilirakis. Approximately how much would it cost to
implement a paperless system?
Ms. Rubens. Mr. Bilirakis, I apologize. I do not have the
full figures with me for implementing that full paperless
implementation. It is an overarching approach that VBA is using
to engage in transformation, recognizing that we cannot
continue to do business as we have and expect to meet the needs
of today's veterans. The receipt of claims has increased
tremendously in the last 3 years. As we change not only the
training that we provide people, we are changing the process
that we are utilizing, and implementing technology; we have
components for each of those. I will need to get for you the
record, the technology portion, for implementing our Veterans
Benefits Management System.
Mr. Bilirakis. Give me a time frame. I know you want to
implement this. When will it become reality? Give me an
approximate time frame.
Ms. Rubens. Certainly. For the efforts that are all
encompassing, across people, process, and technology, we are in
the midst of the implementation for it. The full component,
that will begin in January. For the technology piece, the
implementation of the Veterans Benefits Management System is
actually a three-phased approach. We are into the third phase.
We have two offices that are currently engaged in helping us to
establish the appropriate requirements, provide testing and
feedback to ensure that the new paperless system provides us
what we need from the repository where the electrons will be
housed and that the systems themselves will allow us to operate
in that paperless environment, replacing our current processing
systems.
Mr. Bilirakis. How much time do you think we will save as
far as for the constituents regarding processing of claims if
we move to a paperless system?
Ms. Rubens. Yes, sir. Today as we look at the overall
transformation we are targeting to meet the Secretary's very
ambitious goals of completing all claims within 125 days at 98
percent quality by 2015.
Mr. Bilirakis. Very good. Thank you very much. Anyone else
want to ask a question? Did you have any? I think we are
basically finished here. On behalf of the Committee I thank
each and every one of you for your testimony and we look
forward to working with you of course in the future. Based on
what I have heard today there is no small amount of work. It
can be done. In other words, we have to keep working on it. I
repeat my earlier desire to work with members on both sides of
the aisle to ensure America's veterans have access to the
benefits and services that they deserve.
I ask unanimous consent that all members have five
legislative days in which to revise and extend their remarks.
Hearing no objection, so ordered. I want to thank the panel for
their testimony. Thanks again for your attendance at today's
hearing. And the Committee is adjourned. Thanks so much.
[Whereupon, at 12:00 p.m., the Committee was adjourned.]
A P P E N D I X
----------
Prepared Statement of Hon. Jeff Miller, Chairman,
Committee on Veterans' Affairs
Good morning everyone. Welcome to this morning's hearing.
Today we will review recommendations from several veterans service
organizations for possible savings within the Department of Veterans
Affairs.
As everyone knows, we are in an unprecedented time of fiscal
restraint in America, one that is long overdue. The Budget Control Act,
now the law of the land, has put in place for the next decade caps on
discretionary spending for every account in government, including VA.
These caps will permit overall government spending to grow at roughly
2.5 percent annually.
Needless to say, the next 10 years will look vastly different than
the last 10 in terms of spending. Now, it is my belief that veterans'
spending and defense spending remain the absolute top priority going
forward. Maintaining the Nation's defense is a clear constitutional
charge of the Congress--and I include the care of those who have fought
for our country's freedom as an inextricable part of that charge.
With that said, no agency should ever be exempt from a constant
effort to become more efficient in its operations, or root out waste,
fraud, and other questionable spending.
It is with this in mind that I solicited the help of the leading
veterans' organizations to highlight areas of potential savings within
VA, which could be redirected to provide better care and benefits to
veterans.
The VSO response was outstanding. They provided nine areas for the
Committee to examine, and I am so pleased they are here today to
discuss those and other areas of potential savings. Some of what they
recommended, such as VA's questionable payment of bonuses to already
well-paid employees, were addressed in legislation reported from the
Committee and passed by the house.
Other recommendations require ongoing scrutiny, and today's hearing
continues the Committee's oversight function to that end. I also want
to thank the participation of VA at this hearing.
I believe there are sincere efforts underway--and documented
success in several areas already--which show that Secretary Shinseki is
serious about VA's stewardship of taxpayer dollars.
Nevertheless, there are many areas that need improvement and
continued oversight.
The VA Office of Inspector General's testimony will confirm that
this morning and I thank the VA OIG for its work with the Committee,
VA, and veterans' advocates in our common purpose.
Before I close, let me touch on one other issue that is on
everyone's mind, one that Carl Blake raises in his opening statement
for the Paralyzed Veterans of America. Namely, the question of whether
VA medical care is exempt from indiscriminate cuts that would occur
across government accounts under a sequester order.
Now, it's my firm hope and expectation that the Joint Select
Committee will rise to its calling and produce a bill which saves a
minimum of $1.2 trillion over the next decade that can clear the
Congress and be signed by the President. Should that not happen a week
from tomorrow, however, veterans and their loved ones deserve to know,
now, whether VA will be affected by a looming sequester.
It's my belief that VA is absolutely exempt. But only the Office of
Management and Budget is vested with the authority to determine the
sequester rules. To date, OMB has not been clear on this point.
Mr. Grams, I hope you can shed some light on the Administration's
position when you appear on our second panel.
Again, I thank all of our witnesses for their attendance this
morning.
I now turn to our Ranking Member for her opening statement. Ms.
Brown, you are recognized.
Prepared Statement of Hon. Corrine Brown
Chairman Miller, Ranking Member Filner, thank you for holding this
hearing today.
It is important to make sure that veterans get the resources they
need while making sure the resources are not wasted.
I am pleased to have been a member of this Committee who worked
with leadership to increase the VA budget by its largest amount in its
history. We need to continue to support these increases while not
wasting the resources that need to help both current and future
veterans. And at no time have I ever advocated to balance the budget on
the backs of our veterans. When the VA saves money, it puts those
resources back into the veteran, not the General Fund.
I thank the VSOs for the work they do and their involvement in this
process. Their Independent Budget helps keeps this committee honest
when allocating resources for the upcoming fiscal year and makes sure
the accounts that need funding, get it.
One of my foremost concerns is to ensure that the resources get to
the veterans. It is important that the Departments of Veterans Affairs,
Housing and Urban Development and Labor work together to help veterans.
Housing and Veterans. Homeless veterans are one of the worst marks on
our policies. How can these young men and women be cast off to the side
after serving their country? The three departments need to work
together to solve the problem, because it is not happening separately.
I fully support the work that Secretary Shinseki has begun at the
VA. As this committee has said repeatedly, the culture of working
against the veterans needs to change to where they are the advocate for
the veteran. The Secretary is moving the VA in that direction. It takes
time.
I look forward to hearing the testimony of the witnesses today.
Thank you Mr. Chairman.
Prepared Statement of Joseph A. Violante, National
Legislative Director, Disabled American Veterans
Chairman Miller, Ranking Member Filner, and Members of the
Committee:
Thank you for inviting me to testify about areas within the
Department of Veterans Affairs (VA) that should be scrutinized by
Congress to ensure that inefficiency, duplication and waste are
minimized or eliminated. On behalf of the Disabled American Veterans
(DAV), and in partnership with my colleagues from The American Legion,
Veterans of Foreign Wars (VFW), AMVETS, and Paralyzed Veterans of
America (PVA), I am pleased to appear before you this morning.
Earlier this year, in response to your request, DAV, VFW, PVA,
AMVETS and The American Legion worked together to develop
recommendations for areas within VA where inefficiency or waste might
be uncovered and eliminated. We have been pleased to see that since we
submitted our recommendations on April 4, both the General
Accountability Office (GAO) and VA's Office of Inspector General
(VAOIG) have produced reports that touch on several of our
recommendations, and we have incorporated some of their comments into
our testimony. Like you and all members of this Committee, we believe
that the precious resources allotted to VA must be wisely and
efficiently spent, especially when our Nation faces fiscal and economic
crises resulting from massive government deficits and debt. Every
dollar that is misspent is one that cannot be used to help a veteran in
need.
However, it is also important to recognize that simply cutting VA's
budget in the absence of detailed justifications or evidence of
savings, is more likely to result in a loss of accessibility, quality
and safety of the services veterans depend on, rather than true deficit
reduction. Furthermore, we believe such an approach will likely lead in
the future to additional, avoidable spending to ``fix'' problems that
manifest as a direct result of underfunding essential services for
veterans.
For example, a decade ago, the Bush Administration proposed several
successive VA budgets, each of which proposed to make substantial
``management efficiencies'' and thereby reduce the need for billions of
dollars in direct appropriations. Although funding was indeed reduced,
no efficiencies were ever documented to have been achieved while the
demand and need for resources continued to rise. As a consequence,
after several such budget cycles, newly-confirmed Secretary Nicholson
in 2005 returned to Capitol Hill just weeks after presenting the FY
2006 budget and admitted VA was seriously underfunded by more than a
billion dollars. In the end, Congress provided the requested
supplemental appropriations to cover the unmet demand, but not before
thousands of veterans were turned away or forced to wait for vital VA
health care services.
For these reasons, we urge this Committee to closely examine a
number of troubling elements of VA's budget and appropriations that
seem to echo these same problems from the past. For example, the FY
2012 budget presented in February for VA health care by the Obama
Administration relies on several ``gimmicks'' to reduce the real dollar
appropriations provided by Congress, including a projected $1.2 billion
in savings from ``operational improvements,'' $500 million in carryover
funding from FY 2011, an unexplained or justified reduction in non-
recurring maintenance, and an approximate $1 billion contingency fund
for medical care that may or may not be released to VA. All of these
assumptions have been built into VA's FY 2012 budget, thereby lowering
the level of appropriations approved by Congress, yet there are serious
questions about whether these ``savings'' will indeed reduce VA's need
for direct funding.
Further straining VA's medical care budget, receipts from the
Medical Care Collections Fund (MCCF) have been dropping. In February of
this year, VA indicated that contrary to prior assumptions used to
build the FY 2012 advance appropriation for medical care, MCCF receipts
were expected to drop by $600 million. Later in July, Secretary
Shinseki reported to Congress that ``MCCF collections are 8.5 percent
below plan . . . ,'' further reducing funding available to VA for FY
2012 medical care programs.
In July, the Secretary reported that implementation of the new
caregiver programs would cost almost $100 million more in FY 2012 than
previously estimated. He also stated that VA's ``. . . ability to
achieve operational improvements . . . remains an element of risk to
the sufficiency of the FY 2012 budget.'' In a report released in June,
GAO raised these same concerns about the ``operational improvements,''
citing similarities to ``management efficiencies'' proposed by VA in
prior years that did not materialize and were never documented as
having been achieved. In addition, GAO reported that in VA's FY 2012
medical care budget submission, funding for non-recurring maintenance
had been lowered $900 million below the level that VA's own Enrollee
Health Care Projection Model (EHCPM) had already projected was needed
to maintain its health care facilities.
Mr. Chairman, if we are to ensure that VA actually eliminates
duplication, inefficiency and waste from its budget, rather than just
cutting services for veterans, we must have an accurate and transparent
budget process to measure whether savings are achieved. First, did the
carryover funding from FY 2011 to FY 2012 actually take place? What is
the current projection for MCCF in FY 2012? How will VA measure whether
savings from proposed ``operational improvements'' actually
materialize? Does VA anticipate requesting the funding designated for
contingency purposes?
Moreover, as we work to find areas where real savings might
actually be achieved, we must keep in mind that VA has significant
underfunded needs that are essential to the integrity of the system
itself, especially its health care infrastructure. VA's Strategic
Capital Investment Planning (SCIP) process has estimated that VA space
is over-utilized at 114 percent of its intended capacity. SCIP has
identified at least 4,808 capital projects that should be completed
within 10 years, at a cost estimated to be between $53 and $65 billion.
Yet funding for major and minor construction has gone down, not up, and
funding for non-recurring maintenance and equipment purchases are being
cut below what VA's own actuarial model estimates is needed.
Although Congress has funded a significant number of new facilities
in recent years, the vast majority of existing VA medical centers and
other associated buildings are, on average, more than 60 years old.
Aging facilities create an increased burden on VA's overall maintenance
requirements. All facilities must be maintained aggressively so that
their building systems--electrical, plumbing, capital equipment, etc.--
are up to date and that these facilities are able to continue to
deliver health care in a clean and safe environment.
Unless VA effectively responds to these needs, we fear that VA's
capital programs and the significant effects on the system as a whole,
as well as the veterans individually, will go unchanged; ultimately
risking a diminution of the care and services provided by VA to sick
and disabled veterans in substandard facilities. Older, out dated
facilities do not only present patient safety issues, but from VA's
perspective, older buildings often have inefficient layouts and
inefficient use of space and energy. This means that even with
modification or renovation, VA's operational costs will be higher than
they would be in a more modern structure. For these reasons, we believe
that if Congress is able to find true ``savings'' the first obligation
must be to use them to help fund the essential long-term maintenance
needs of the VA health care system.
Mr. Chairman, I would also like to comment on one proposal to make
``savings'' that may be considered by the so-called ``Super
Committee:'' to take back all or part of the cost-of-living-adjustment
(COLA) increase for veterans disability compensation and survivors'
disability indemnification compensation (DIC) payments that Congress
just approved. As you know, disabled veterans have not had a COLA
increase since December 2009.
On October 19, it was announced that there would be a 3.6 percent
COLA for Social Security recipients next year, and the Senate
immediately and unanimously passed legislation (S. 894) to apply this
same COLA increase to veterans disability compensation payments. On
November 2, the House also passed this COLA legislation unanimously,
just as it had done with companion House legislation (H.R. 1407)
earlier this year. We expect the President will sign this legislation
any day now. Mr. Chairman, we want to thank you and all members of this
Committee for helping to pass this vital legislation. As you have
stated, for the past ``. . . 2 years, our veterans have not received an
increase. This additional income will help them make ends meet in the
coming year.''
However, we are distressed to hear that the ``Super Committee'' may
consider a proposal to freeze, delay or cut this very COLA that
Congress just passed without one dissenting vote. While we recognize it
is difficult to make reductions in Federal spending, we believe it
would be irresponsible to target cuts at those who have already
sacrificed so much for their country. For many of these veterans,
particularly those with severe and catastrophic disabilities, these
payments may be their primary or even their only source of income.
For the past 2 years, disabled veterans have seen no COLA
increases, and for many it has become increasingly harder to make ends
meet. While the official COLA may have been zero for those years, it is
important to understand that the CPI index upon which the COLA is
calculated does not take into account increases in the cost of food or
gasoline. In addition, as disabled veterans grow older, their needs may
also increase due to declining health and increased morbidity. We agree
with the sentiment that Mr. Filner expressed on the House floor when he
said, ``. . . [Congress] would be derelict in our duty if we failed to
guarantee that those who sacrificed so much for this country are able
to receive benefits and services that keep pace with their needs and
inflation.''
Mr. Chairman, in this context, our veterans organizations have
worked together to identify specific areas throughout VA where we
believe the Committee could focus additional attention to find
inefficiency, duplication and waste. Many of the ideas we developed
were already on the Committee's oversight agenda, so in our joint
letter of April 4, we focused on nine additional areas that offered new
opportunities for the Committee to consider. In the spirit of
eliminating duplication and being efficient, my colleague from PVA will
focus on the first five areas from our letter and I will focus on the
last four.
Duplicative Surveys of State Veterans Homes
Currently, State Veteran Homes must undergo regular evaluation by
VA inspection teams. Many of these same veterans' homes are also
inspected by the Centers for Medicare and Medicaid Services (CMS). The
CMS survey has approximately 185 criteria and is considered the more
stringent survey. The VA survey has 158 criteria, 150 of which are
already contained in the CMS survey. VA could quickly review its eight
unique criteria as part of the CMS survey team or on its own, in order
to cease such duplication of efforts. Such overlap in inspection
regimes appears unwarranted and we understand that VA itself has been
seeking to engage CMS to consider ways to eliminate this duplication,
however so far they have been unable to make much progress. We urge the
Committee to examine this overlap of efforts in order to reduce the
administrative burden on both VA and State Veterans Homes and
potentially achieve savings.
VBA Records Management and Shredding Practices
In response to alarming instances of security lapses and the
discovery of the destruction of veterans' claims files by employees,
VBA in recent years has instituted a number of new security protocols,
including records management practices. While VBA absolutely needed to
take corrective action to ensure that essential veterans' records were
never again destroyed in the future, we have heard credible reports
that some VA Regional Offices (VARO) may have gone too far and spent
too much time and resources on shredding non-essential paperwork. We
understand each VARO has designated a ``Records Management Officer,''
often at one of the higher GS levels, who spends an inordinate amount
of time focused on the shredding of documents. We have been told that
such records management practices have become overly complicated; in
fact, some VAROs even have procedures for shredding Post-It notes,
further burdening VBA employees struggling to properly adjudicate
hundreds of thousands of pending claims. It is our understanding that
VBA has made some changes over the past 6 months in this area, however,
we would recommend that the Committee continue to investigate whether
current records management practices are effective and appropriate to
meet the requirements of protecting and preserving veterans' records,
without wasting precious VA resources.
The Costs of Brokering VBA Claims Work
Another area of the VBA claims process that needs scrutiny is the
practice of brokering claims between and amongst VBA regional offices,
and particularly the significant costs of transporting such brokered
claims files. Brokering has become a standard practice in recent years
as some VAROs have been overwhelmed with the sheer volume of work. VBA
has created more than a dozen specialized Resource Centers at VAROs to
handle brokered claims; four doing development phase work, eight doing
rating, award and authorization work, and one ``Tiger Team'' that does
all phases of the claims process on the oldest and most complex
brokered claims. According to a VA Inspector General (VAOIG) report in
September, the number of brokered claims has been rising in recent
years, reaching 18 percent in FY 2010. Although that number has dropped
over the past 18 months as these resource centers have been shifted to
work on Nehmer claims, but as the Nehmer workload ends later this year
the resource centers will once again start to receive large numbers of
brokered claims.
While VBA is still awaiting a paperless solution to its claims
processing problems, it must maintain and process virtually all claims
using paper files, many of which contain hundreds of pages. It is our
understanding that claims are transported using FedEx services in both
directions. Furthermore, some claims are brokered twice: once from the
home VARO to a resource center doing development, then after being
returned to the home VARO, the claims file is sent to another resource
center for the rating, award and authorization work, and then back
again to the home VARO. The costs of transporting these claims using
express delivery services must be quite substantial. In addition, the
number of personnel involved in locating, organizing, delivering,
receiving and distributing these paper files must also be quite
substantial. The VAOIG report also found other areas of concern related
to the timeliness and quality of the work done through this brokering
process that the Committee needs to review.
We would recommend that the Committee examine the entire brokering
system, particularly the paper-centric logistical demands of the
current practices. We believe that VA should consider transitioning
rapidly to digitizing all claims files that are to be brokered. If
feasible, such a change could redirect spending from shipping paper
files to digitizing files in anticipation of future paperless
processing.
Regular Use of Authorized Overtime
One additional area in VBA that merits scrutiny by the Committee is
the use of mandatory or ``authorized overtime'' as a regular practice
to address increased workload. While VBA continues its myriad efforts
to develop a new paperless, rules-based process for developing and
adjudicating claims, it has relied on increased manpower to meet the
current workload requirements. As the total number of claims filed has
grown to over 1.2 million per year, VBA has hired several thousand new
employees to try and keep pace. In addition, we understand that most
VAROs have also increased the regular use of ``authorized overtime'' by
employees in an attempt to meet production goals. We have concerns
about whether sufficient and cost-effective productivity gains can be
achieved through heavy reliance on overtime. More importantly, we have
concerns about the effects on quality if employees are being mandated
to work under the pressure and strain from extended hours. We recommend
that the Committee examine VBA's use of overtime and further examine
whether VBA's personnel projections and staffing models are accurately
meeting their workload requirements.
Finally, I do want to add one comment about the issue of Senior
Executive Service (SES) bonuses that was discussed in our joint VSO
letter and in my colleague's testimony today. While it is important for
Congress and VA to consider whether it is appropriate to provide SES
bonuses at a time when Federal employees are in the midst of a 2-year
Federal pay freeze, we would not want to see VA put at a competitive
disadvantage to other Federal agencies. If Congress were to consider
reducing or eliminating SES bonuses for any time period, it must do so
across all Federal agencies, not just target VA. We must ensure that
those dedicated men and women who choose work that serves our veterans
are equally valued and compensated as those who work elsewhere in the
Federal Government.
Mr. Chairman, as we have pledged to you previously, we will
continue to work with this Committee and others in Congress to identify
areas within VA where there may be duplicative, ineffective,
inefficient or wasteful use of VA resources. We share your desire to
ensure that the precious funding dedicated to the care of America's
veterans, especially disabled veterans, achieve its intended purposes.
That concludes my testimony and I would be happy to respond to any
questions you may have.
Prepared Statement of Carl Blake, National
Legislative Director, Paralyzed Veterans of America
Chairman Miller, Ranking Member Filner, and Members of the
Committee, Paralyzed Veterans of America (PVA) is pleased to be here
today to discuss the ongoing debate about deficit and debt reduction
and how that might affect the Department of Veterans Affairs (VA). This
Committee has expressed an interest in this issue since the beginning
of the year. In fact, as you know, PVA, along with AMVETS, Disabled
American Veterans, The American Legion, and Veterans of Foreign Wars,
addressed this issue in a letter provided to the Committee in April
2011. Today, we will address the various issues that were outlined in
our letter to the Committee. Additionally, we will address the larger
budget and appropriations process and ongoing activities within the VA
related to this process.
Before discussing the ideas put forth by the five veterans service
organizations represented here today, I would like to focus my comments
on the current status of the budget and appropriations process. Once
again, Congress has failed to fulfill its obligations to complete work
on appropriations bills funding all Federal departments and agencies,
including the VA, by the start of the new fiscal year on October 1,
2011. Fortunately, as has become the new normal, last year the
enactment of advance appropriations shielded the VA health-care system
from the political wrangling and legislative deadlock. However, the
larger VA system is still negatively affected by the incomplete
appropriations work. VA still faces the daunting task of meeting ever-
increasing health-care demand as well as demand for benefits and other
services.
Meanwhile, the VA is operating based on the parameters of P.L. 112-
36, the ``Continuing Appropriations Act for FY 2012.'' As we understand
it, the VA has implemented an across-the-board reduction in all program
spending of approximately 1.5 percent. As you know, one of the main
reasons that Congress passed, and the President signed, legislation
creating advance appropriations was precisely to allow the VA health
care system to be able to function efficiently and without
interruptions caused by budget showdowns and stop-gap continuing
resolutions. That is why Congress included a full year FY 2012 advance
appropriations for VA medical care in P.L. 112-10, the ``Full Year
Continuing Appropriations Act for FY 2011,'' passed in April 2011. For
this legislation to be superseded or misinterpreted by short term CRs
and result in a reduction of VA health care funding that was already
approved is absolutely outrageous.
Moreover, we are particularly concerned about steps the VA has
taken in recent years to generate resources to meet ever-growing demand
on the VA health care system. In fact, the FY 2012 and FY 2013 advance
appropriation budget proposal released by the Administration earlier
this year includes ``management improvements,'' a popular gimmick used
by previous Administrations to generate savings and offset the growing
costs to deliver care. Unfortunately, these savings were often never
realized leaving the VA short of necessary funding to address ever-
growing demand on the health care system. We believe that continued
pressure to reduce Federal spending will only lead to greater reliance
on gimmicks and false assumptions to generate funding. In fact, the
Government Accountability Office (GAO) outlined its concerns with this
budget accounting technique in a report released to the House and
Senate Committees on Veterans' Affairs in June 2011. In its report, GAO
states:
If the estimated savings for fiscal years 2012 and 2013 do not
materialize and VA receives appropriations in the amount
requested by the President, VA may have to make difficult
tradeoffs to manage within the resources provided.\1\
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\1\ U.S. Government Accountability Office. (2011, June). GAO-11-
622. Veterans' Health Care Budget Estimate: Changes Were Made in
Developing the President's Budget Request for Fiscal Year 2012 and
2013.
This observation reflects the real possibility that exists should
VA health care, as well as other programs funded through the
discretionary process, be subject to spending reductions.
And yet, we are here today to further discuss savings that can be
realized within the VA. As we outlined in our letter to the Committee
earlier this year, the veterans service organizations are not so naive
as to think that cost-savings cannot be found within the VA, but the
question remains: ``To what end?'' The context of this hearing is to
identify savings within the VA that can be presumably returned to the
Treasury for deficit and debt reduction. However, we believe the VA is
already failing to meet the demands being placed on its health care and
benefits systems. We would argue that any savings realized by the VA
should be used to fill gaps in services now or be immediately
reinvested into the system to make it function more efficiently and
effectively. This is especially true when discussing the maintenance
and modernization of the infrastructure necessary to deliver the
benefits and services authorized under current law.
In response to your budget hearing questions posed after the
release of the Administration's budget request in February about
``savings'' and ``waste'' within VA, we presented our shared views on
the need for Congress to conduct aggressive oversight of Federal
veterans' programs and services to ensure that they are providing
maximum value to our Nation's veterans. Like you, we are committed to
working collaboratively to identify areas of inefficiency, duplication
or waste so that the resources provided by Congress to the VA are
effectively and efficiently used to deliver the benefits and services
due to our Nation's veterans. However, to simply cut spending across-
the-board, in the absence of detailed justifications or evidence of
savings, will likely result in the loss of accessibility, quality and
safety of the services veterans depend on, rather than true deficit
reduction. We believe such an approach will likely lead to additional,
unnecessary and avoidable spending to ``fix'' problems created by
underfunding essential services for veterans.
Within this context, we have worked together to identify specific
areas throughout VA where we believe the Committee should focus its
attention in efforts to find inefficiency, duplication and waste. Many
of our ideas are already on the Committee's oversight agenda. My
comments will focus on the issues identified in our joint letter
targeted at the administration of the VA and the health care system.
Growth of General Administration
In recent years, increased scrutiny has been placed upon the
administrative sections of the VA, most notably on General
Administration. The VA's General Administration budget request includes
funding for the Office of the Secretary, the Board of Veterans'
Appeals, the General Counsel, and the Offices of Management, Human
Resources, Policy and Planning, Operations and Security, Public and
Intergovernmental Affairs, Congressional and Legislative Affairs, and
Acquisitions, Logistics, and Construction. In FY 2012, the
Administration recommended an 11.3 percent increase in funding for its
General Administration accounts, the largest account increase within
the VA. As we expressed, and as the Committee likewise emphasized,
during the hearing held in conjunction with the release of the FY 2012
Budget Request in February, we have serious concerns that rising VA
Central Office (VACO) management budgets and expanding personnel
comprise a significant portion of FY 2012 budget growth. In fact, it
was particularly troubling to our organizations that the Administration
requested a considerable increase in funding for General Administration
while simultaneously requesting a decrease in funding for the Veterans
Benefits Administration
The scale of the increases sought in General Administration do not
appear reasonable and we have concerns about whether such bureaucratic
growth is necessary during a time when veterans face delays in
accessing medical care and proper claims adjudication. However, we
would like to impress upon the Committee that some of the changes to
administrative funding in the VA are the result of new requirements and
programs authorized by Congress. It is not surprising that the VA might
choose to direct more funding to its administrative functions in order
to respond to the actions of Congress. Ultimately, when budgets are
limited, it is essential that every penny reach the veteran at the
ground level. We urge this Committee to scrutinize the General
Administration account, including travel and meeting costs, and to
limit funding increases only where necessary, and to redirect these
funds to the services and programs that immediately impact veterans.
Moreover, it is imperative that the Committee consider the
ramifications of any new programs authorized or requirements placed
upon the VA.
Size of VISN Administrations
Similarly, we are concerned about the size and growth of the VISN
(Veterans Integrated Service Networks) bureaucracies within the
Veterans Health Administration (VHA). When this new organizational
model was developed, the plan called for VISNs to employ a small number
of managers and support staff, perhaps a dozen or so, and any
additional expertise needed would come from existing personnel at
medical centers and other existing facilities. Today, however, some
VISNs employ hundreds of administrative personnel and have built
enormous buildings to serve as their permanent headquarters.
We understand that VA leadership is beginning to take steps that
will better align the VISN administrative structure with the duties and
responsibilities placed upon those offices. However, we hope that as
the VA reorganizes its personnel alignment at the VISN level that these
changes do not translate to simply administrative staff at a different
location. Any change in VISN organization should have quality, timely
health care delivery as its priority. Ultimately, while we believe
there is certainly value in the regional network model that VHA
employs, we urge the Committee to carefully examine the growth of VISNs
and the increasing share of the budget that they currently consume.
Funding ``Hold Back'' at VACO and VISNs
Related to concerns about VACO and VISN growth is the manner in
which Congressionally-appropriated funds for medical care are
distributed to the field. In particular, we have concerns about the
practice of ``hold back'', by which VACO or VISNs may withhold medical
care appropriations from being distributed to facilities as directed by
the Veterans Equitable Resource Allocation (VERA) system. VERA
determines the level of funding each facility should receive annually
based upon the quantity and value of services provided in prior years,
relative to the amount of medical care appropriations in the current
budget. However, it has become a common practice that VACO ``holds
back'' a significant amount of this funding and retains it to be
distributed as it determines for special programs or projects, or to
meet contingencies that may arise throughout the year. Similarly, VISNs
``hold back'' portions of the VERA funding they receive to fund their
operations and for other programs and projects that they manage.
In fact, as we have already explained in this testimony, the VA is
currently holding back approximately 1.5 percent of the advance
appropriations (as well as other VA funding) for health care as a
result of its interpretation of the current ``Continuing Resolution.''
Preventing funds from being disbursed to the field ultimately
diminishes the care being provided. As we have already testified, all
of our organizations have received credible reports from VHA facilities
across the country in recent years that despite significant year-to-
year increases for VA medical care, local facilities received only
small or no increases.
This is particularly troublesome when we continue to hear about
funding shortfalls occurring at medical centers around the country.
Likewise, there continue to be reports everyday of the VA falling short
in provision of various health care services. In fact, The New York
Times recently reported on a survey of VA mental health professionals
in an article on October 24, 2011:
Only 29 percent of respondents--272 psychologists,
psychiatrists, nurses and social workers at dozens of hospitals
and clinics--said their workplace had enough staff to meet
demand. Nearly 40 percent said they could not schedule an
appointment for a new patient within the 2-week window the
veterans department requires. Nearly 70 percent said they
lacked enough space. And nearly half said some patients were
being denied care because no appointments were available
outside regular office hours.
We regularly hear reports of hiring freezes that seem inconsistent
with the growth of VA's medical care appropriations. Several VA medical
center (VAMC) directors have reported budget shortfalls that would
preclude them from moving forward with hiring. In fact, the American
Federation of Government Employees (AFGE) testified earlier this year
that in the VAMC in Delaware, budget shortfalls resulted in leadership
leaving beds empty in emergency rooms and therefore limiting the
ability to provide necessary care to the community's veterans. Last
fall, the Director of the Indianapolis VAMC, in a newsletter to his
staff, informed them that the facility expected to be $28 million short
of the resources required for FY 2011; this despite VA having received
a significant funding increase through advance appropriations. And yet,
the VACO response has been that directors ``want'' more money than they
``need.'' We would beg to differ with this assertion. We urge the
Committee to examine how VA ``holds back'' medical care appropriations
from being distributed through VERA, how VISNs do similar ``hold
backs,'' and whether such practices are properly using medical care
funding, including focusing on the growth of administrative personnel
and ``special projects.''
Additionally, we must reemphasize that often the VA is forced to
withhold funding to VISN and local levels in order to address new
program requirements created through Congressional authorization.
SES Bonuses
Another area that has drawn significant scrutiny in recent years is
the distribution of bonuses to the Senior Executive Service (SES)
employees at a time when there are serious questions about management
performance, particularly in an environment where Federal funding is
constrained. For example, last year the Veterans Benefits
Administration (VBA) distributed $417,152 in bonuses to 30 SES
employees while veterans wait interminably long periods to receive
their proper disability benefits. During 2010, the backlog of
compensation and pension entitlement claims pending over 125 days
(VBA's standard) rose from just less than 180,000 to over 290,000
claims. Furthermore, a March 2010 GAO report found that accuracy as
noted by VBA's own STAR program had not increased, but fallen from 86
percent accuracy to below 84 percent accuracy. When every metric of
VBA's performance drops, it appears unreasonable that management should
be rewarded.
Given that the VA's workforce has dealt with a pay freeze for all
Federal employees for the last 2 years, the payment of bonuses seems
completely unjustified. Overall, focused solely on bonuses paid to the
SES employees, last year VA paid out over $3.4 million dollars to 238
SES employees with an average SES Performance Bonus exceeding $14,000.
This is nearly half of the Bureau of Labor Statistics estimate of the
average American salary of $32,708 for 2010.
We understand that executive bonuses serve an important purpose. In
order for the VA to be competitive in the marketplace for senior
executive leadership, it must be able to provide financial incentives
to candidates and employees. However, given the tight fiscal situation
facing the VA, rather than taking $3.4 million dollars to reward senior
executives of VA, we believe this funding might be better directed to
ensure essential programs are funded to assist those who have fought to
defend our Nation. We urge Congress to scrutinize the bonus practices
within VA, particularly while a Federal pay freeze is in effect.
Additionally, we believe Congress should not limit its scrutiny of SES
bonuses to the VA, but to all other Federal agencies which you have
oversight authority over in other committees.
Care Coordination for VA Fee-Based Care
Another area we urge the Committee to address is the lack of
coordination of non-VA purchased care and the process of referring
veterans to local providers. A veteran who is approved for fee-based
care is not currently provided a list of providers who are certified,
licensed, or accredited to practice. Furthermore, VA does not identify
local providers in the veteran patient's community that accept VA's
payment rate. VA's General Counsel has indicated that this
``identification and referral'' process may not adhere to full and open
competition requirements as well as other quality oversight issues.
Failure to adopt such an identification and referral process can lead
to veterans being unable to find qualified providers. It can also lead
to VA paying higher rates than necessary because savings could have
been achieved if VA would identify and contract with local networks or
providers at lower rates. We urge Congress to conduct oversight of non-
VA purchased care to ensure coordination of care and to avoid improper
payments.
Joint Select Committee on Deficit Reduction
Ultimately, discretionary spending in the VA accounts for
approximately $62.0 billion. Of that amount, nearly 90 percent of that
funding is directed towards VA medical care programs. As the Joint
Select Committee addresses the possibility of reductions in
discretionary spending across the entire Federal Government, including
the VA, it is important to emphasize that any cuts to VA spending will
have a direct impact on the delivery of health care services and
benefits to veterans and their families.
We are concerned that in the event that the Joint Select Committee
fails to agree to a bipartisan solution or the House or Senate fails to
approve the Committee's recommendations, an automatic ``trigger'' would
occur that would immediately cut an additional $1.2 trillion in Federal
spending. The triggers would target two principle areas of the Federal
budget--national security spending and all other domestic spending. For
FY 2012 and FY 2013, the VA would be included in the national security
category along with the Department of Defense, Department of Homeland
Security, Department of State, and similar agencies. While we believe
all VA programs are excluded from automatic cuts by P.L. 111-139, The
``Statutory Pay-As-You-Go Act of 2010,'' questions remain about whether
or not VA health care spending in particular could be included in
broader discretionary spending reductions. In fact, Section 11 (Exempt
Programs and Activities) of P.L. 111-139 specifically states:
(b) VETERANS PROGRAMS--The following programs shall be exempt
from reduction under any order issued under this part:
``All programs administered by the Department of Veterans
Affairs.''
We believe this language is crystal clear in outlining the priority
that Congress has placed on funding for VA programs, even in the face
of pressure to reduce the deficit.
The VA is the best health care provider for veterans. Providing
primary care and specialized health services is an integral component
of VA's core mission and responsibility to veterans. Across the Nation,
VA is a model health care provider that has led the way in various
areas of medical research, specialized services, and health care
technology. The VA's unique system of care is one of the Nation's only
health care systems that provide developed expertise in a broad
continuum of care. Currently, VHA serves more than 8 million veterans,
and provides specialized health care services that include program
specific centers for care in the areas of spinal cord injury/disease,
blind rehabilitation, traumatic brain injury, prosthetic services,
mental health, and war-related polytraumatic injuries. Such quality and
expertise on veterans' health care cannot be adequately duplicated in
the private sector. Any reduction in spending on VA health care
programs would only serve to degrade these critical services.
In the end, it is easy to forget, that the people who are
ultimately affected by wrangling over the budget are the men and women
who have served and sacrificed so much for this Nation. We hope that
you will consider these men and women as you continue to investigate
areas for potential savings within the VA budget.
This concludes my testimony. I will be happy to answer any
questions you may have.
Information Required by Rule XI 2(g)(4) of the House of Representatives
Pursuant to Rule XI 2(g)(4) of the House of Representatives, the
following information is provided regarding Federal grants and
contracts.
Fiscal Year 2011
Court of Appeals for Veterans Claims, administered by the Legal
Services Corporation--National Veterans Legal Services Program--
$300,000 (estimated).
Fiscal Year 2010
Court of Appeals for Veterans Claims, administered by the Legal
Services Corporation--National Veterans Legal Services Program--
$287,992.
Fiscal Year 2009
Court of Appeals for Veterans Claims, administered by the Legal
Services Corporation--National Veterans Legal Services Program--
$296,687.
Prepared Statement of W. Todd Grams, Executive in
Charge for the Office of Management and Chief Financial
Officer, U.S. Department of Veterans Affairs
Good morning, Chairman Miller, Ranking Democratic Member Filner,
and Members of the Committee. I am accompanied today by Mr. William
Schoenhard, FACHE, Deputy Under Secretary for Health for Operations and
Management, Veterans Health Administration and Ms. Diana Rubens, Deputy
Under Secretary for Benefits for Field Operations, Veterans Benefits
Administration.
I am pleased to be here with my colleagues and to share this forum
with representatives of the Department of Veterans Affairs (VA) Office
of Inspector General (OIG). I also want to recognize as our partners
and friends, the Veterans Service Organizations (VSO). They serve as
tireless advocates for Veterans and support, in so many ways, VA's
mission to serve Veterans across the array of health care, disability
compensation, memorial benefits and other services they have richly
earned. The VSOs also provide VA with useful observations on VA's
performance, from their own professional staff as well as their
members.
This hearing is centered on a joint VSO letter sent to you, Mr.
Chairman, on April 4, 2011, spurred by your questions at the budget
hearings earlier this year. Their letter states our central challenge
very well: how do we provide the maximum value and excellence of
service to Veterans, at the same time we are becoming more efficient,
reducing waste, and respecting every dollar entrusted to us by the
taxpayer? The letter also explains why this has to be a careful and
studied exercise to avoid taking actions that, while appearing to be
fiscally responsible, would ``likely result in the loss of
accessibility, quality, and safety of the services Veterans depend on''
and actually could lead to additional avoidable spending. It is clear
this Committee is--and has been--committed to taking a careful and
deliberate path, as we strive to achieve fiscal discipline while
improving quality and access for those returning Servicemembers and for
Veterans of all eras--as well as their families and survivors.
We set out in this testimony some of our more significant
initiatives that are already delivering better services to Veterans and
cost savings. While acknowledging our successes, we must also recognize
that in an organization with missions as large, complex, and varied as
VA, there are times when these operations and systems need improvement
or correction. In those circumstances we must take action. The
Congress, the VSOs, and our OIG are important contributors in our
efforts to always learn and improve, as they provide an outside view of
how we are living up to the commitments the Nation makes to Veterans.
The hearing invitation asked VA to testify on the recommendations
made in the VSO letter. We would like to do so in the context of
speaking to the Department's broader transformational efforts that are
central to both improving our benefits and services and using resources
wisely. The Secretary began these efforts after taking over the helm of
VA when he focused the Department to be ``people-centric, results-
driven, and forward-looking.'' It is hard to overstate how important
the `people-centric' element is in the work we do. We live necessarily
in the world of systems, processes, organizations, and policies--but
they all exist--and we all at VA are here--to serve Veterans. This
personal dedication is exhibited every day in extraordinary ways by our
employees. Being a People-centric organization means having our
leadership, management, and systems be as good as our individual
employees--to empower that sense of mission, and not frustrate it.
Being results-driven means that we do more to measure our
performance and hold ourselves accountable. We will be measured by our
accomplishments, not by our promises. VA's leadership has been
developing systems and processes to better measure the results we are
securing for Veterans. And being forward-looking means modernizing VA's
business practices and using technology to its fullest advantage. We
will seek out opportunities to deliver the best services with available
resources, continually challenging ourselves to do things smarter and
more effectively.
VA Efficiencies and Savings through Transformation--Office of
Management
With those principles in mind, I will first highlight those
transformation efforts I am responsible for as VA's Chief Financial
Officer (CFO). These are not issues in the VSO letter, but it is
important for the Committee to know that these significant improvements
in financial management systems and integrity serve as a foundation in
securing efficiencies and savings across the Department.
Shortly after joining VA in November 2009, I led the CFO team in
establishing a set of top priorities for VA financial management. It
has been my pleasure to brief this Committee's staff of the status of
these initiatives on a quarterly basis. Our priorities included fixing
long-standing issues in financial management, which have been concerns
for VA and this Committee. These included material weaknesses in our
financial systems as well as a lack of adequate internal controls over
$14 billion in spending categorized as miscellaneous obligations, VA's
independent auditor certified at the end of fiscal year (FY) 2010, we
had remediated our three material weaknesses related to financial
management. In terms of internal controls and financial integrity, this
was a major accomplishment. It has been over a decade since VA had no
financial management material weaknesses. We have also dramatically
reduced the number of financial issues the auditors categorize as
significant deficiencies. Since 2008, VA has reduced those significant
deficiencies from sixteen to two.
Internal controls related to `miscellaneous obligations' have been
a long-standing issue of concern to this Committee, VA's OIG and the
Government Accountability Office (GAO). About 18 months ago, I made
this a top priority for VA financial management. With a comprehensive
plan and the dedication of our VA team, we have increased compliance in
this program dramatically from 49 percent in 2009 to nearly 100 percent
today. And we can account and report on how these funds are being spent
across the VA system.
There are many other improvements we have been able to make in
financial management, including a thorough revision and standardization
of VA financial policies, and improved financial management training.
Today, our Financial Services Center processes over 1 million
payments annually to commercial vendors. Payment timeliness, measured
by the amount of interest penalties paid per million dollars disbursed
for late payments in accordance with the Prompt Payment Act,
dramatically improved from $48 per million in FY 2008 to just $18 per
million in FY 2011. At the same time, VA earned $5.1 million in
discounts for prompt payment (nearly 97 percent of the discounts
offered by vendors)--savings that we are able to use to provide
additional funding for Veterans programs. This past fiscal year 23
percent of the vendor payments VA processed used data obtained from
electronic invoices, which improved both the timeliness and accuracy of
our payment process.
VA continues to aggressively use the Government-wide purchase card
program as a cost effective method of acquiring goods and services. We
processed nearly 7 million purchase card transactions valued at $3.6
billion during FY 2011 compared to 4.8 million transactions worth $3.0
billion during FY 2008. We pay our credit card provider daily for
credit card purchases, allowing VA to maximize the bank rebate offered
for prompt payment. As a result, during FY 2011 VA earned $73.8 million
in purchase card rebates, a dramatic increase over the $49.4 million
earned in FY 2008. The benefit of those rebates goes directly to
Veterans programs.
VA aims to save even more by essentially eliminating all paper
check payments to vendors by the end of FY 2012. We made a significant
down payment towards that goal. Over 97 percent of commercial vendors
now receive payment by electronic funds transfer (EFT). We are reducing
check payments to our medical providers supporting the fee basis and
Civilian Health and Medical Program of the Department of Veterans
Affairs (CHAMPVA) programs. Our outreach to medical providers helped
these programs improve EFT usage by 20 percent this year and eliminated
1.5 million checks VA-wide.
We are proud of these achievements in financial management, but
realize there is always more we can do to be more effective and
efficient across the Department.
The VSO letter raised questions about recent staff increases in
some offices. Many of these increases in staffing are tied to the very
transformation efforts to modernize VA, and are items that the VSOs
have historically supported. For example, staff increases enhanced VA's
outreach to Veterans and tribal governments as well as improved VA's
ability to manage costs and programs that deliver services to Veterans,
their families and survivors. Other staff office increases are tied to
meeting the needs of Congress for extensive and significantly expanding
information requirements to conduct oversight, formulate policy, and
serve individual constituents. Especially now, taxpayers need to be
assured that staffing levels are justified as a good return on
investment for Veterans.
I would also like to address the issue of travel and conferences, a
subject of Congressional interest that has been in the news for VA as
well as other agencies. For a Department with many different and
complex missions, and with facilities throughout the country, travel
and conferences provide important opportunities to train and conduct a
range of other essential activities to include: share best practices,
maintain critical clinical skills and readiness, conduct oversight and
compliance inspections, increase professional certification of our
employees, and provide opportunities for our employees to establish and
enhance their professional contacts and relationships within the VA and
with other Federal, state and local agencies as well as private sector
stakeholders. These all are important to activities that enable VA to
provide high quality care and services to Veterans. The role of
conferences is too important for us to treat casually--that is why VA
requires a very strong business case supporting each conference. Since
FY 2009, the VA has mandated VA Chief of Staff review and approval for
all conferences involving 100 or more VA employees. For FY 2012, the VA
Chief of Staff issued guidance requiring his office's pre-approval of
any conference involving 50 or more employees. His directive calls for
maximizing teleconferencing, and for managers to challenge the
assumption that an event needs to occur, including making a business
case analysis of the benefits of a meeting, and consideration of
alternatives that might serve the same purpose. We would be glad to
share with your staff the scrutiny that proposed conferences and travel
receive and welcome VSO and Congressional staff analysis of what
reductions could be taken without adverse impact to the programs and
proficiency we seek in the delivery of care and benefits.
For the past 3 years, spending for Senior Executive Service (SES)
bonuses has been reduced, as well as the number of outstanding ratings
issued. VA understands the need for fiscal restraint, and is following
the Secretary's guidance, as well as Office of Personnel Management and
Office of Management and Budget limitations. Mr. Chairman, VA has
detailed to you in a letter dated October 14, 2011 what it has done to
ensure the integrity of the performance awards process. We emphasized
in that letter the importance of VA being able to attract and retain
the most talented leaders and managers from within the Federal
workforce and from the private sector. We are especially wary of
restrictions on performance awards that would not be undertaken as a
government-wide policy--in that case VA would be specifically
disadvantaged with respect to other Federal employers, weakening our
ability to compete for and retain the talent we need to best manage VA
and serve our Nation's Veterans.
VA Efficiencies and Savings Through Transformation--Veterans Health
Administration
VHA is undertaking its most significant transformation since the
1990's by realigning the organization to focus and target resources on
delivering clinically appropriate, quality care for eligible Veterans
when they want and need it. These efforts are supporting our goals of
improving access and quality of care. Systems Redesign is one of the
key tools we are using to achieve these goals--it involves multiple
strategies that address transportation, options for Veterans to improve
access, use of advances in medical technology, and local partnerships.
Complementing the Systems Redesign initiatives, we are instilling a
culture throughout our system that pursues continuous improvement and
empowers staff members to solve problems at the front line or at any
point in the health care system. As a result of these steps, VHA is
improving efficiency and reducing costs by consolidating data,
analytic, and reporting systems, and using the power of our electronic
health record to collect clinical performance measures using fully
automated processes.
VA is using telephone care, telemedicine, secure messaging, My
HealtheVet, and traditional postal mail to reduce the need for
additional clinic visits concerning relatively simple matters.
Telehealth is a particularly critical area where VHA is identifying
significant potential for cost savings. Home Telehealth provides non-
institutional care and chronic care management services. It is
predicated upon proactively intervening when a patient's symptoms,
behavior, or lack of knowledge about his or her conditions places them
at a high risk for hospital admission or institutional care. Home
Telehealth helps to reduce unnecessary hospital bed days of care and
provides Veterans with additional support at home.
Clinical video telehealth (CVT) provides services through clinical
video conferencing between VA medical centers (VAMC) and community-
based outpatient clinics (CBOC) or other VAMCs. VA has established that
use of CVT reduced the total number of hospital bed days of care for
patients needing mental health by more than 20 percent. Telehealth not
only improves the quality of care available to Veterans but also
reduces the cost to VA for providing such care. For Veterans living in
rural areas, expanded telehealth services improve their access to high
quality specialty care services previously only offered at major
medical centers.
Moreover, the infrastructure that supports telehealth also supports
the training and education needs of our staff; for example, specialists
can more easily provide ongoing medical education to primary care staff
about the management of Veterans with complex needs. We are also
gaining additional value from this allied infrastructure by using it to
deliver training to administrators, analysts, and users of our IT
systems through video-conferencing.
Another critical technology to improve care and reduce costs is an
integrated electronic health record (iEHR) between VA and DoD. The two
Departments are already in the process of jointly modernizing our
respective EHR systems, but an integrated joint system will allow both
Departments to achieve economies of scale. It will enable us to acquire
needed functionality and reduce future sustainment costs, increase the
amount of patient information shared through the use of national data
standards, and improve the delivery of health care and services to more
than 15 million VA and DoD patients.
VA operates a world class pharmacy program that excels in several
key areas: Clinical pharmacy practice, pharmacy automation, medication
safety, drug formulary management and the strategic sourcing of
pharmaceuticals. In several of these areas, VA is an innovator and
benchmark within the pharmacy profession. VA's pharmacy activities have
yielded many billions of dollars in savings over the past 15-plus
years. While aggressively pursuing savings, VA's customer service
performance remained excellent, as evidenced by an independent customer
survey conducted by J.D. Powers and Associates. This survey ranked VA's
Consolidated Mail Outpatient Pharmacy (CMOP) as ``Among the Best'' in
2009; for 2010 and 2011. VA's CMOPs scored higher than any other mail
order pharmacy in the country. Based on customer feedback from 20
industries and 800 brands, in 2011 CMOP was one of only 40 brands
designated as Customer Service Champions by J.D. Powers.
Effective earlier this year, VHA adopted the Centers for Medicare
and Medicaid Services (CMS) payment methodologies for outpatient
services. This aligned VHA with standard Federal payment methodologies
and ensures all payments from VA utilize the same structure. VA
estimates that this change will result in savings of almost $1.5
billion over FYs 2011-2015. Veteran care will remain uninterrupted, and
existing contracts will not be affected. We are using the savings from
this change to reinvest into our health care system and provide more
accessible and better quality care to America's Veterans.
VA's Consolidated Patient Account Center (CPAC) business model is
designed to enhance VHA billing and collection activities by
consolidating traditional revenue program functions into seven
regionalized centers of excellence. Four CPACs are already operational,
and the final three CPACs will be activated in FY 2012. By
standardizing and improving business processes, VA has improved key
revenue metrics from FY 2010 to FY 2011. The average number of days to
bill for the Nation declined by 3.5 (8.3%), while the percentage of
accounts receivable greater than 90 days was reduced 3.3 percent.
However, VHA has not seen the same level of collections recently for a
variety of reasons--an increase in the number of hardship waivers and
copayment exemptions connected to the condition of the economy, a
reduction in third party ``collections to billings'' ratios, and
movement of Veterans from lower Priority Group enrollment categories to
higher levels. An aging Veteran population receiving coverage from
Medicare, which becomes the primary insurance provider when a Veteran
becomes 65 years old, has also significantly reduced the amount of
funds VA can collect. Even with these challenges, VHA's improved
business practices are capturing available collections more
efficiently. Continued improvements are a necessity to maximize this
critical piece of our medical care budget.
The VSO letter raised issues relating to VA's purchase of fee-basis
care. VA provides care to Veterans directly in a VA medical center, or
indirectly, through either fee-basis care or through contracts with
local providers. This strategic mix of in-house and external care
provides Veterans the full continuum of health care services covered
under our benefits package. VHA provides Veterans care within VA's
health care system, whenever feasible. When VA is unable to provide
care within the system, the VA medical center director first considers
sending patients to another VA medical center. Contracting for
necessary services is considered only if these options are
inappropriate or not viable. If contracting for services is required,
VA's first option is to use a competitive bid. This step ensures that
taxpayer funds are used to the greatest effect.
VA appreciates Congress' support of the use of fee-basis care as a
complement to VA services; the Department has been able to provide
services closer to Veterans' homes as a result of a number of
congressionally mandated programs and directives intended to improve
the management and oversight of fee-basis and to expand access to care
for Veterans in rural areas.
Earlier this year, VA conducted a pilot program that used
standardized templates for purchasing care, ensured more consistent
assessment of other VA options, and resulted in better control over and
management of the care we purchased. We have instituted controls to
track timeliness of initial approvals for non-VA care, appointments,
and return of clinical information. Pilot results have seen positive
improvements in each of these areas. For example, pilot sites document
initial approvals for use of non-VA care at 4 days, appointments made
within 8 days and return of clinical information within 20 days.
VA will realize approximately $200 million in savings for fee basis
care in FY 2012 through the use of electronic re-pricing tools,
contract and blanket ordering agreements, reduced duplicate payments,
and other efforts. We are also consolidating contracting for multi-
facility, Veterans Integrated Service Networks (VISN) or regional
contracts, increasing the use of competitive contracts, bringing back
contracted functions in house, reutilizing existing VA property, and
related measures.
We would also like to address the role of VISNs in ensuring
Veterans receive top quality health care in the most efficient way
possible. The VISN structure encourages innovation and has been the
basis for many of the significant advances within VHA over the last 15
years. The responsibilities of VISNs have grown, which has necessitated
corresponding staffing adjustment. This increase in the number of
employees is mostly the result of a consolidation of functions
previously performed at the facilities within the Network to achieve
economies of scale. For example, some VISNs have created service lines
dedicated to either specialty care areas or to administrative functions
that provide support to all VHA facilities within the Network. This
approach more effectively utilizes our resources and allows us to
achieve efficiencies not otherwise possible. For example, by
consolidating equipment purchasing at the VISN level, some Networks
have saved millions of dollars by negotiating high volume contracts
with low per unit prices and saved money on maintenance costs while
improving the consistency of quality of care through equipment
uniformity.
One of VHA's most important tools in ensuring the fair distribution
of resources is the Veterans Equitable Resource Allocation (VERA)
model, which helps VA provide equitable access to care for the Nation's
Veterans. In short, VERA ensures we put the money where the work is.
VERA has been assessed positively in independent reviews by
PricewaterhouseCoopers, the RAND Corporation, and the Government
Accountability Office (GAO).
VERA addresses the many complexities of Veterans' health care by
recognizing differences in patients (those who use some health care but
are less reliant on VA care exclusively, those who seek routine care
from VA, and those with special or complex health care needs),
variations in costs of care across the country, movement of Veterans
across the country, research and education demands, and the need for
investments in non-recurring maintenance. The system must also account
for differences in the types of funds--including general purpose funds,
which are allocated based on patients treated, and specific purpose
funds, which are allocated to comply with statutory or programmatic
requirements.
After VISN Directors receive the Network's allocation, they are
responsible for making the allocations to their facilities. In 2011, VA
implemented a standard VISN work-performed allocation model to ensure
VISNs provided resources to facilities in a consistent, timely, and
efficient manner. This enables the VISN Director to hold a portion of
the allocation for such requirements as central equipment purchases,
central management of non-recurring maintenance (NRM) projects, and for
changing workload requirements among facilities. VISN Directors have
the discretion to make appropriate adjustments to that model to reflect
local realities, such as the activation of new CBOCs and changes in
patient demand.
To help ensure the Department achieves its financial and program
performance goals, VA conducts monthly reviews that include metrics
that measure financial performance, workload, and access. These reviews
provide data for risk analysis and serve as a warning system to
highlight potential operational or funding problems. VHA facility and
VISN directors also maintain frequent oversight of their budgets and
communicate with VHA Central Office to provide timely information to
ensure necessary resources are available. The Secretary also meets with
each VISN Director at least twice during the year to ensure each VISN
has sufficient resources to provide services consistent with the needs
of Veterans.
The VSO letter cites reports of local budget shortfalls or ``hiring
freezes.'' VA will be glad to discuss any of these specific reports
with the Committee or with our VSO partners.
VA Efficiencies and Savings through Transformation--Veterans Benefits
Administration (VBA)
VBA is committed to achieving the Secretary's 2015 strategic goals
of completing all rating-related compensation and pension claims within
125 days at a 98 percent accuracy level. VBA has embarked on a wide-
scale Transformation Plan to achieve new efficiencies, greater
effectiveness, improved quality and consistency, and a workplace that
is recognized as an ``employer of choice.'' Our transformation strategy
builds on VA's strategic plan, goals, and integrated objectives.
Initiatives that help improve our business processes are encouraged.
Ideas are solicited from employees and other internal and external
stakeholders including VSO's, state and county service officers,
industry partners, as well as Veterans themselves.
Our plan incorporates an integrated approach to people, process,
and technology solutions, including a strong focus on a career-ready
military transition program, national training standards, paperless
rules-based systems, case management, and automated capability to
process an increased number of claims and a greater number of complex
conditions per claim--all at a high quality level for our Veterans,
their families, and survivors. Best practices in claims processing are
being tested at regional offices to validate the potential of the
initiatives to help us achieve our 2015 strategic goals. The effective
implementation of this transformation plan is driving VBA to achieve
standardization among all regional offices and a methodology for
governing implementation. Our implementation strategy includes
effective communications and change management, detailed implementation
planning, and effective and measurable training, ensuring that new
ideas are sustainable for the future.
A primary focus of our plan is managing our relationships with
Veterans throughout their lives--from the day they join the military
service, and well into their transition to Veteran status and beyond.
Seventy-three percent of our Veterans seek new ``on-line'' ways of
engaging with VA to facilitate their claims and benefits. In September
2011, VA and DoD, in a collaborative partnership, registered its one-
millionth user on eBenefits, the one-stop shop that provides
information about military and Veterans benefits and serves as the
client-services portal for lifelong engagement.
Today, the eBenefits portal provides an on-line capability to check
the status of a claim, an appeal, the history of VA payments, request
and download personnel records, secure a certificate of eligibility for
a VA home loan, and numerous other benefit actions. In the next 6
months, Veterans will be able to file a claim online in a ``Turbo
Claim'' like approach, where claims data can be entered by prompting
software that self-checks for data errors, and upload supporting claims
information that feeds our paperless claims process. Every 3 months, VA
and DoD release additional eBenefits functionality that provides new
ways for our Veterans, their families, and survivors--with support if
they choose from their representatives--to conduct self-service benefit
actions at a time and place of their choosing.
VBA's organizational transformation will be deliberate, sweeping,
and multifaceted. Specific initiatives incorporated in the
transformation plan include:
The Veterans Benefits Management System (VBMS), a
holistic and integrated technology solution delivering paperless
processing capability in 2012 to support our business process
transformation. Combining a paperless processing system with improved
business processes is key to providing Veterans with timely and high-
quality decisions.
The Veterans Relationship Management (VRM), an initiative
to expand eBenefits access and self-service capabilities, improve VBA
call center technology, increase initial call resolution, and establish
life-long relationships with our Veterans.
Rules-based calculators for automated adjudication of
basic compensation, pension, and dependency claims. These calculators
will guide decision makers through the process with intelligent
algorithms similar to tax-preparation software.
New evidence-gathering tools, known as Disability
Benefits Questionnaires, which allows VBA to bring new efficiencies to
the collection of medical information needed for claims decisions.
An 8-week national Challenge training program for
recently hired claims processors, as well as refresher training for
more experienced staff, that ensures intense, high-quality and
standardized training of the VBA workforce.
Simplified rating decisions and notification letters to
more effectively communicate with Veterans and streamline the decision-
making process.
Systemic Technical Accuracy Review STAR-trained local
Quality Review Teams to conduct ``in-progress'' quality checks and
regular end-of-month reviews.
Cross-functional teams (case management) of cross-trained
raters, co-located to increase knowledge transfer, speed, and accuracy.
Specialized processing ``lanes'' based on claims
complexity and priorities (``Express Lane'' for less complex work;
``Core Lane'' for the majority of the workload; and ``Special
Operations Lane'' to case manage special missions, such as former
prisoners of war and military sexual trauma cases).
Intake Processing Centers for quick, accurate triage of
claims.
These major transformations will be implemented using multi-year
timelines. Changes in people, processes, and technology will be rolled
out in a progressive, intentional sequence that enables efficiency
gains while minimizing risks to performance.
We would like to address the three VBA management issues mentioned
in the VSO letter: records management, cost of brokering of claims
work, and use of authorized overtime.
The VSO letter notes concern that, ``too much time and resources
are now being devoted to the protection and/or shredding of non-
essential paperwork.'' Based on findings from VA's OIG in 2008, VBA
took action to ensure that Veterans' records are protected, maintained,
and disposed in accordance with Federal regulations, statutes and
policies. While VA's policy was initially based on OIG findings,
updates have been made to incorporate lessons learned. In FY 2011, VBA
established the Records Management Technician (RMT) position. The RMT
position has enabled VBA to reduce the supervisory review and approval
process to ``claims-related material only,'' providing the supervisors
more time to facilitate increased claims productivity. The RMT assists
the Records Management Officers (RMO) in managing, maintaining, and
properly disposing of Veterans' records and personally identifiable
information. The duties of RMOs and RMTs are absolutely vital in
protecting Veteran, employee, and other sensitive information.
A second VBA area of concern identified in the VSO letter is the
cost of brokering claims. For a number of years, VBA has pursued this
strategy to allocate additional resources to regional offices that
perform at a higher level. This strategy is intended to increase VBA
organizational performance and capacity by assisting regional offices
experiencing workload challenges and performance difficulties. To do
this, claims are brokered for processing to Resource Centers at 13
high-performing offices throughout the country.
This past fiscal year was challenging because VBA utilized our
Resource Center brokering capacity to readjudicate previously denied
claims for newly established Agent Orange presumptive conditions (B-
cell leukemia, Parkinson's disease, and Ischemic heart disease). Due to
the complexity of readjudicating these claims, they are all being
processed at VBA's Resource Centers. Our Resource Centers were
therefore temporarily unavailable for brokering work during FY 2011.
VA recognizes that transporting paper claims is neither ideal nor
sustainable. VBMS will significantly reduce our reliance on the
receipt, movement, and storage of paper. By eliminating the dependence
on paper, VBA will be better positioned to make use of available
resources, regardless of geographic location.
The third VBA area of concern noted in the VSO letter is the use of
authorized overtime. While VA works to transform the delivery of
benefits and services, overtime funding is essential to manage claims
workload and put VA on a path to achieve our ultimate goal of having no
Veteran wait longer than 125 days to receive a quality rating decision.
Although VBA has significantly increased the numbers of primary
decision makers through internal promotions and external recruitment
actions to address the growing workload, the normal training time for
these positions is 18 to 24 months. While in training status, these
individuals are not fully productive and often require 100 percent
review of their cases by a more experienced employee with greater
technical knowledge. Overtime is a necessary tool to allow VBA to
maintain production as we continue to work to increase our productive
capacity and ensure thorough training.
VBA's workload continues to dramatically increase due to the
unprecedented volume of disability claims being filed. This growth is
driven by a number of factors, including our successful outreach
efforts, improved access to benefits, the growing number of returning
Veterans from 10 years at war, the aging Veteran population, economic
conditions prompting Veterans to pursue the benefits they earned during
military service, and presumptive disabilities for Veterans who were
exposed to Agent Orange or other herbicides during military service.
In FY 2011, VBA received nearly 230,000 additional claims as a
result of the approval of three new Agent Orange presumptive conditions
(B-cell leukemia, Parkinson's disease, and Ischemic heart disease)
based on the latest evidence of an association between those illnesses
and exposure to herbicides. Of the over 180,000 Agent Orange claims
processed last year, approximately 93,000 were covered by the Nehmer
court settlement requiring readjudication of previously denied claims.
Pursuant to a court order from the U.S. District Court for the Northern
District of California in Nehmer v. U.S. Department of Veterans
Affairs, C.A. No. C-86-6160 TEH (N.D. Cal.), VA provides retroactive
benefits to certain Nehmer class members (Vietnam Veterans and their
survivors) who filed claims for the three new presumptive conditions
during the period from September 25, 1985, to the effective date of the
VA regulation establishing a presumption of service-connection for
these diseases. These claims are very complex and take more than twice
the resource levels to complete, which significantly slowed production
in 2011. As we have nearly completed processing Nehmer claims, overtime
funding related to claims processing will be reduced.
We continue to devote significant resources, including overtime
resources, to processing claims for our wounded, ill, and injured
Servicemembers separating from active duty through the Integrated
Disability Evaluation System (IDES). Overtime resources are essential
if we are to meet our processing goal of 100 days for IDES claims.
Additionally, overtime allows our regional offices to increase
production while VBA's pilot initiatives are tested, enabling us to
determine which concepts are suitable for nationwide deployment.
Overtime funding is also critical to the delivery of education
benefits in all of the education programs VA administers. Because of
the fluctuations in workload inherent in the processing cycles
associated with school enrollment periods, it is essential that we
continue to make effective use of overtime funds to ensure our Veteran-
students and their schools timely receive their benefit payments. With
full automation of Post-9/11 GI Bill enrollment processing through the
Long Term Solution, we anticipate that our need for overtime funds in
the education program will be reduced.
Closing
VA appreciates this opportunity to have this exchange with the
Committee, with the participation of the VA OIG and our VSO partners.
As noted at the beginning of the testimony, the key question is an
important one: how does VA provide the maximum value and excellence
service to Veterans, at the same time we are becoming more efficient,
reducing waste, and respecting every dollar entrusted to us by the
taxpayer? VA is committed to keep this question foremost across every
administration and office, in Washington and at medical facilities,
regional offices, and national cemeteries in every area of the Nation.
Prepared Statement of Belinda J. Finn, Assistant
Inspector General for Audits and Evaluations, Office of
Inspector General, U.S. Department of Veterans' Affairs
Mr. Chairman and Members of the Committee, thank you for this
opportunity to testify on the potential for budgetary savings within
the programs and operations of Department of Veterans Affairs (VA). We
read the recommendations made by Veterans Service Organizations (VSOs)
for budgetary savings within VA with great interest and can comment on
VA's performance in several of these areas. My testimony today will
highlight a broad range of programs and issues where we have identified
possible cost savings, recoveries, better uses of funds, and
opportunities for VA to achieve economies and efficiencies.
VA FEE CARE PROGRAM
Of the many issues raised by the VSOs, improved management and
oversight of medical care provided outside of VA facilities, commonly
known as fee care, offers the greatest opportunity for savings. Under
the program, VA medical centers authorize veterans to receive treatment
from non-VA health care providers when certain services are unavailable
at VA facilities; cannot be economically provided in the veteran's
geographic area; or in emergencies when delays may be hazardous to life
or health. The cost for fee care has increased from $1.6 billion in
fiscal year (FY) 2005 to $4.4 billion in FY 2010. This amount is
expected to increase further in future years as both the demand and
cost of health care rises. We have issued four audit reports related to
fee care since August 2009.
In August 2009, we reported that the Veterans Health Administration
(VHA) improperly paid 37 percent of outpatient fee claims, resulting in
$225 million in overpayments and $52 million in underpayments in FY
2008 and an estimated $1.1 billion in overpayments and $260 million in
underpayments over a 5-year period. Also, serious weaknesses in the
processes for authorizing outpatient fee care resulted in 80 percent of
payments lacking proper justification. Clinicians typically documented
the diagnosis and treatment plan but no rationale for using fee care.
Fee staff did not conduct required cost analyses to determine if lower
cost alternatives, such as transporting patients to other VA
facilities, were available. In August 2010, we reported that VHA
improperly paid 28 percent of inpatient fee claims, resulting in net
overpayments of $120 million in FY 2009 and an estimated $600 million
in improper payments over a 5-year period. Between these two audits of
inpatient and outpatient medical care, we estimated potential improper
payments of $1.5 billion through FY 2015 could be avoided by more
effective policies and procedures to oversee and manage fee care
services. (Audit of Veterans Health Administration's Non-VA Outpatient
Fee Care Program, August 3, 2009, and Veterans Health Administration--
Audit of Non-VA Inpatient Fee Care Program, August 18, 2010)
During the audit of inpatient claims, we found the Fee Program's
inadequate payment processing system, Veterans Health Information
Systems and Technology Architecture (VistA) Fee, contributed to the
high rate of payment errors. VHA was aware of the shortcomings of VistA
Fee and has fielded an integrated claims processing and management
system. Further, the average cost per claim for the Fee Care Program
was $9.96 compared to $2.55 for Civilian Health and Medical Program of
the Department of Veterans Affairs (CHAMPVA), a difference of $7.41 per
claim. In addition, sites that processed fee payments for a single VA
medical center (VAMC) had an average cost per claim of $10.78.
Consolidated sites, which processed claim payments for multiple VAMCs,
had an average cost per claim of $6.85, or about one-third less. As a
result, we conservatively estimated that current claims processing
inefficiencies cost VHA $134 million through FY 2015 and recommended VA
evaluate alternative organizational models and payment processing
options, which they agreed to do.
Consolidation of processing activities is one solution to lowering
the average cost per claim, but not the only alternative. Commercial
claims processing organizations already process claims for Federal
Government agencies, such as Medicare and TRICARE. Since our first
audit in 2009, VA has adopted Medicare payment methodologies for common
services such as ambulatory surgery, anesthesia, dialysis, and the
payment of professional services. With business changes, VA may be able
to leverage competition for the claims processing services. In response
to our recommendation, VA contracted with the National Academy of
Public Administration to study organizational alternatives, including
consolidation or contracting out for services.
We also evaluated VHA's controls to prevent and detect fraud and
reported VHA had not identified fraud as a significant risk to the Fee
Care Program. Health care industry experts have estimated that 3 to 10
percent of all claims involve fraud and we see VA facing similar risks.
We estimated that VA could be paying between $114 million and $380
million annually for fraudulent claims and recommended VA establish a
fraud management program with data analysis and high-risk payment
reviews, system flags for suspicious payments, employee fraud awareness
training, and fraud reporting. (Veterans Health Administration--Review
of Fraud Management for the Non-VA Fee Care Program, June 8, 2010)
In the 2\1/2\ years since our 2009 report on the Fee Care Program,
VHA has made many changes to the program. However, fundamental controls
are still problematic, as illustrated by our recent report, Review of
Alleged Mismanagement of Non-VA Fee Care Funds at the Phoenix VA Health
Care System (November 8, 2011). We reported the medical facility
mismanaged fee care funds and experienced a budget shortfall of $11.4
million, which was 20 percent of the health care system's FY 2010 fee
care program funds. One cause of the shortfall was the lack of
effective pre-authorization procedures, the same problem we reported in
2009. In fact, the facility processed about $56 million in fee claims
without adequate review to ensure services were medically necessary.
Our most recent national audit on VA's fee care program reported
VHA missed opportunities to bill third-party insurers for 46 percent of
billable fee care claims, reducing third-party revenue by $110.4
million annually or by as much as $552 million through FY 2016. VA
bills third-party health insurers for nonservice-connected medical
services provided by VA or non-VA care as part of the Medical Care
Collection Fund (MCCF) Program, which supplements VA's medical care
appropriations. In FY 2010, the MCCF Program collected approximately
$1.9 billion in total third-party revenue, which was about 69 percent
of the total $2.8 billion revenue. The potential for third-party
revenue from the Fee Care Program is expected to increase in future
years due to increased demand for care and increased health care costs.
(Audit of Veterans Health Administration's Medical Care Collection Fund
Billing of Non-VA Care, May 25, 2011)
CLAIMS BROKERING
The VSOs noted the potential inefficiencies of the Veterans
Benefits Administration's (VBA) claims brokering process. We have
testified several times on the many challenges that VBA faces to
improve the accuracy and timeliness of disability claims decisions,
managing an ever-increasing inventory of claims, and maintaining
efficient VA Regional Office (VARO) operations. One of the steps VBA
has taken to address these challenges is to establish 13 resource
centers that process compensation claims brokered from other VAROs. VBA
believes effectively shifting claims from one VARO to another allows
VBA to better align workload with available staffing resources and
reduce claims backlogs by expediting claims processing.
Our nationwide audit of the brokering process identified
opportunities for VAROs to improve brokering effectiveness (Audit of
VBA's Compensation Claims Brokering, September 27, 2011). We evaluated
the overall effectiveness of claims brokering and reviewed available
documentation on the costs of transporting hardcopy claims folders from
one location to another. VBA and VAROs do not consistently track or
report the costs of transporting brokered claims between VAROs. In
fact, only one of seven audited VAROs was tracking the costs of
transporting brokered claims. During 1 year, this VARO spent about
$40,000, or approximately $2.00 per claim, for the one-way
transportation of approximately 18,500 brokered claims folders. Based
on the one VARO's cost information, we estimated that VBA could have
spent almost $740,000 to transport brokered claims using express
delivery services during FY 2009.
We also reported VBA can improve brokering effectiveness by
addressing ineffective practices such as untimely brokering of claims
by the original regional office, reducing excess inventories of
unprocessed claims at resource centers, brokering to separate
facilities for development and rating, and brokering claims to resource
centers with lower claim processing accuracy rates than the original
office. For nearly 171,000 brokered claims completed during FY 2009, we
projected the average processing time of 201 days would have been 49
days less, or 152 days, if VBA had avoided the claims-processing delays
identified during the audit. VBA agreed it can improve the overall
effectiveness of brokering. We will monitor the implementation of the
recommendations.
VBA could eliminate transportation costs associated with brokering
claims and improve claims processing timeliness by digitizing claims
folders. We caution that even digitized claims will require
infrastructure and management controls to ensure VAROs consistently and
accurately maintain documents to allow claims processing personnel
complete and timely access to veterans' claims folders documents.
VA EMPLOYEE COMPENSATION ISSUES
The VSOs noted concerns with general administrative costs and
overly generous employee bonus programs. We have issued several reports
dealing with retention incentives that identified consistent themes
regarding where VA falls short in its administration of this program.
Retention incentives are a valuable tool to retain quality and
critical employees. VA uses retention incentives to retain employees in
hard-to-fill positions and employees who possess high-level or unique
qualifications that VA does not want to lose. Our review of retention
incentives at the VA Medical Center in Providence, Rhode Island,
concluded that for 17 (85 percent) of 20 cases, justification for
retention incentive awards was not available or was inadequate,
resulting in approximately $179,000 in questioned costs annually and
over $895,000 over the next 5 years (Review of Retention Incentive
Payments at VA Medical Center, Providence, Rhode Island, January 20,
2011). In response to our report recommendations, VHA outlined actions
to accomplish a 100 percent review of Providence employees' retention
incentives, establish controls to ensure incentives meet VA policy,
develop standard operating procedures, and establish a system for
maintaining this information.
In FY 2010, VA paid nearly $111 million in retention incentives to
16,487 employees. In a nationwide audit of VHA and VA Central Office
(VACO) retention incentives that was recently issued, we questioned the
appropriateness of 96 (80 percent) of 120 VHA incentives, and 30 (79
percent) of 38 VACO incentives, totaling approximately $1.06 million
during FY 2010. (Audit of Retention Incentives for Veterans Health
Administration and VA Central Office Employees, November 15, 2011)
As with the Providence review, we determined VHA and VACO approving
officials did not adequately justify and document retention incentive
awards. This occurred because VA lacked clear guidance, oversight, and
training to effectively support the program. Also, VA did not
effectively use the Personnel and Accounting Integrated Data system to
generate timely incentive re-evaluation notices and did not always stop
retention incentives at the end of set payment periods. VHA and VA
officials agreed with our report recommendations and outlined
corrective actions to address the issues identified.
VBA OVERTIME
The VSOs' letter raises concerns about VBA's use of overtime to
meet claims production goals. In 2010, the OIG conducted a review to
assess VBA's efforts to meet its hiring goals and the impact of VBA's
increased workforce on Compensation and Pension (C&P) claims workload.
We found that VBA could not assess the impact of overtime on its
capacity to complete claims and recommended that VBA collect data on
the number of overtime hours worked to assess the capacity of its
current workforce and project future workforce needs. VA agreed and
have reported to us that they have implemented a plan to address this
issue. (Review of New Hire Productivity and the American Recovery and
Reinvestment Act Hiring Initiative, February 18, 2010)
OTHER AREAS FOR POTENTIAL SAVINGS
In addition to the potential improvements identified by the VSOs,
VA can reap substantial benefits by improving its processes in several
areas: acquisition, delivery of health care and compensation benefits,
information technology system development, and workers' compensation
for employees injured on the job.
Acquisition Process
VA purchases goods and services in excess of $10 billion annually.
In November 2009, the Secretary reported to the Office of Management
and Budget that he had established a 2-year departmental goal of $958
million in acquisition savings by FY 2011. We have identified issues
with processes at all levels and all phases of the procurement
process--planning, solicitation, award, and administration.
Historically, problems in VA procurement have led to inadequate
competition for many contracts and a general lack of assurance that VA
has obtained fair and reasonable prices or the best value for goods and
services. In the past, only about 50 percent of VA's contract awards
were competitive. We strongly believe competition is a proven strategy
to achieve better value for the Government. For example, VA originally
planned to contract for approximately 940 non-recurring maintenance
projects with its $1 billion in American Recovery and Reinvestment Act
(ARRA) funds. VA reported that as they executed the ARRA program, it
competed approximately 98 percent of these contracts, which resulted in
cost savings that allowed VA to fund almost 1,125 projects, a 19
percent increase in projects to improve VA medical facilities. We
validated the completion rate in our report, ARRA Oversight Advisory
Report Review of VHA's Efforts to Meet Competition Requirements and
Monitor Recovery Act Awards, (September 17, 2010).
VA can achieve savings by fully leveraging its buying power and
improving the administration of contracts. The following examples
highlight opportunities where VA can strengthen the integrity of its
contracts and realize significant acquisition-related cost savings over
5 years:
Savings of about $22 million by procuring aortic valves,
coronary stents, and thoracic grafts through consolidating requirements
using national contracts and blanket purchase agreements instead of
making open market purchases. (Audit of the Acquisition and Management
of Selected Surgical Device Implants, September 28, 2007)
Savings of about $41 million through improved acquisition
planning and oversight processes to increase the use of the Federal
Supply Schedules for the purchase of medical equipment and supplies.
(Audit of Veterans Health Administration Open Market Medical Equipment
and Supply Purchases, July 21, 2009)
Savings of about $60 million through improved clinical
sharing agreement monitoring and negotiation practices when using
noncompetitive clinical sharing agreements for professional medical
personnel. (Audit of Veterans Health Administration Noncompetitive
Clinical Sharing Agreements, September 28, 2008)
Savings of about $38.5 million in health care staffing
costs through increased competition, better price evaluations, and
improved ordering practices. (Review of Federal Supply Schedule 621I--
Professional and Allied Healthcare Staffing Services, June 7, 2010)
Reduce unsupported costs and improper payments by about
$16.8 million by strengthening contract administration practices in
VHA's Home Respiratory Care Program. (Audit of Veterans Health
Administration's Home Respiratory Care Program, November 28, 2007)
Preventing $85.3 million in overpayments by effectively
competing, awarding, and administering patient transportation
contracts. (Veterans Health Administration--Audit of Oversight of
Patient Transportation Contracts, May 17, 2010)
Management of Rural Health Initiatives
In addition to identifying potential savings, we also evaluate how
funds are managed and used to meet a program's intended outcomes. In
FYs 2009 and 2010, VA's Office of Rural Health (ORH) received $533
million in funds designated for improving access and quality of care
for veterans residing in rural areas. We reported ORH lacked reasonable
assurance that its use of $273 million of the $533 million improved
access and quality of care for veterans residing in rural areas. For
example, ORH provided $200 million of rural health funds to VISNs to
cover fee expenditures for rural veterans through a project called the
Rural Health Fee Usage Plan. ORH's goals for the use of these funds
were to improve the percentage of fee care dollars spent on rural
veterans and the percentage of rural patients utilizing VHA services.
However, the health care facilities were unable to demonstrate that the
use of these funds improved access to care for rural veterans. For
example, one VAMC received $3.2 million of Fee Usage Plan funds. The
VAMC transferred $3 million of these funds to their general account
then used the funds without any restrictions. By the end of FY 2010,
the VAMC's overall planned fee care expenditures increased only about
$252,000.
We also noted concerns with the project review and selection
process used to select projects for execution in FYs 2010 and 2011. In
addition to improved organizational and management controls, we
recommended that VA reassess ORH's FY 2012 budget requirements to align
planned use of resources to their greatest rural health needs. As a
result of our report, the Government Accountability Office recommended
to the Appropriations Committees that ORH's budget resources for FY
2012 be restricted. VA has taken our recommendations seriously and
strengthened its controls to provide increased oversight and
transparency to ensure that future funds will be used as intended.
Temporary 100 Percent Disability Evaluations
Veterans' disability compensation payments are not usually an
avenue for cost savings. We have, however, identified one area where a
systemic problem leads to veterans receiving long-term payments to
which they are not entitled. VBA grants veterans a temporary 100
percent disability evaluation for service-connected disabilities
requiring surgery, convalescence, or specific treatment. At the end of
a mandated period of convalescence or cessation of treatment, VA staff
are required to review the veteran's medical condition to determine
whether to continue the temporary evaluation. If a medical exam shows a
change in the veteran's condition, and VARO staff determines that a
reduced benefit is warranted, then VBA staff initiate action to reduce
benefits. In January 2011, we issued a report detailing our concerns
with VBA's processing of temporary 100 percent disability evaluations.
We projected that regional office staff did not correctly process
claims of about 27,500 (15 percent) veterans with temporary 100 percent
evaluations and that since January 1993 VBA overpaid these veterans a
net amount of about $943 million. Without timely corrective action, we
conservatively projected that VBA will overpay veterans $1.1 billion
over the next 5 years.
The primary message in our report is that VBA paid veterans a
temporary 100 percent benefit without adequate medical evidence.
Further, VBA rarely attempts to recover any monies paid to the veteran
in error and once a temporary 100 percent rating has been in place for
20 years, VBA cannot reduce the rating unless the veteran committed
fraud in obtaining the benefits. The then Acting Under Secretary for
Benefits did not agree with the projected overpayment amounts, but
agreed to implement the recommendations we made. We stand behind our
statistical projection as a reasonable and conservative estimate of
overpayments and potential future overpayments based on our review of
compensation records available at the time of the audit. We monitor
VBA's actions to correct this condition during the OIG's VARO Benefits
Inspections program and we continue to find claims files without
suspense dates for reexaminations. VBA has just recently started work
to identify veterans who need reexamination, and to establish suspense
dates to drive timely examinations.
Information Technology Issues
Information technology (IT) is critical to support VA in
accomplishing its mission of providing benefits and services to
veterans. For FY 2012, VA requested approximately $655 million for new
product development out of a total budget of $3.2 billion for IT
systems and support. If managed effectively, these IT capital
investments can significantly enhance operations and increase
efficiency in a range of VA programs, from medical care to compensation
and pensions.
However, IT management at VA is a longstanding high-risk area. VA
experienced significant challenges in managing its IT investments,
including cost overruns, schedule slippages, performance problems, and
in some cases, complete project failures. For example, VA spent over 14
years and $308 million developing the Veterans Services Network
(VETSNET) to consolidate compensation and pension benefits processing
into a single system. Although VETSNET has now achieved most of the
planned functionality, VA has yet to identify a date for migrating all
claims and decommissioning the legacy system, which costs about $7
million a year to maintain.
Also, VA has tried twice to develop an integrated financial
management system. In 2004, after 6 years and spending more than $249
million, VA halted the Core Financial and Logistics System (CoreFLS)
project due to significant project management weaknesses. In 2005, VA
began work on the Financial and Logistics Integrated Technology
Enterprise (FLITE) program, comprised of an accounting system, an asset
management system, and a data warehouse component--all scheduled for
deployment by FY 2014 at an estimated cost of approximately $609
million. In July 2010, VA cancelled two FLITE components, partly
because of the same project management issues that had plagued CoreFLS.
In October 2011, VA cancelled the remaining component after spending
more than $127 million on the entire FLITE program.
VA recently began planning for a new financial system. Reviewing
and applying the lessons learned from the previous failed attempts will
be crucial to any future success. In September 2009, we reported VA
needed to better manage its major IT development projects, valued at
that time at over $3.4 billion, in a more disciplined and consistent
manner (Audit of VA's System Development Life Cycle Process, September
30, 2009). In general, we found that VA's processes were adequate, but
VA's Office of Information Technology (OI&T) did not communicate,
comply with, or enforce its mandatory requirements.
In June 2009, OI&T implemented the Program Management
Accountability System (PMAS) to proactively manage VA's IT projects to
complete system development efforts on time and within budget. PMAS was
designed as a performance-based management discipline that provides
incremental delivery of IT system functionality--tested and accepted by
customers--within established schedule and cost criteria. In September
2011, we reported OI&T had not established key management controls to
ensure PMAS data reliability, verify project compliance, and track
project costs. Until these issues are addressed, VA will risk cost
overruns, schedule slippages, and poor performance in future efforts to
deliver the systems essential to accomplishing the Department's
missions and programs.
Workers' Compensation Program Case Management
Ineffective workers' compensation program (WCP) case management
leads to potential program fraud, as well as increased costs to VA.
Over the past two decades, VA's WCP costs have increased 57 percent to
approximately $182 million; VHA comprises 93 percent of these total
costs.
We recently reported that VHA could reduce WCP costs by an
estimated $264 million over the next 5 years through improved program
case management oversight. (Audit of VHA's Workers' Compensation Case
Management, September 30, 2011) While VHA submitted employee
compensation forms timely, it often lacked the medical evidence
necessary to support the employee's continued disabilities. VHA also
missed opportunities to return able employees to work. Overall, we
attributed these issues to a lack of oversight to ensure compliance
with WCP statutory requirements.
We recommended that VHA provide oversight and assign dedicated
resources to control costs and reduce the potential for future waste
and abuse. The Assistant Secretary for Human Resources and
Administration and the Under Secretary for Health agreed with our
findings and recommendations and plan to complete all corrective
actions by December 31, 2011. We will assess and monitor the
implementation of corrective actions.
We also recommended that VA support legislation currently pending
to convert claimants 65 years of age or older to more appropriate
benefit programs. VA responded that they will contact the Department of
Labor in support of its proposed change in legislation.
WORK IN PROGRESS
The VSOs expressed concerns about the size and growth of Veterans
Integrated Service Networks (VISN) in VHA. We have ongoing audit work
to examine VISN management structures and fiscal operations. Although
our work is not yet complete, we believe the VSOs have raised valid
concerns. When VHA created the VISNs in 1995, VHA specifically
decentralized budgetary, planning, and decision-making functions to the
Networks to promote accountability and improve oversight of the daily
operations of its medical facilities. VHA estimated the overall size of
the original 22 VISNs would range between 154-220 FTE with total
operating costs of about $26.7 million annually. Today, we estimate the
existing 21 VISNs employ at least 1,098 staff at an annual cost of over
$165 million.
We also have concerns about the existence of national and regional
fiscal controls and data that would allow VHA to effectively evaluate
and compare the reasonableness of VISN staffing levels and costs.
Strong financial management and fiscal controls would provide VHA the
opportunity to identify inefficiencies in VISN operations and possibly
reallocate funds back to direct patient care.
While not referenced in the VSOs' letter, we also have ongoing
projects in several areas that could potentially result in cost
savings. We are currently examining the extent to which the MCCF
program effectively bills third-party health insurers for VA provided
medical care. VHA is currently centralizing MCCF billings and
collections processes nationwide, however medical centers are
continuing to perform some MCCF functions. Although our work is
ongoing, VHA continues to miss opportunities to increase MCCF revenue
by not billing third-party insurers for billable fee care services
provided. We expect to issue a final report by the spring of 2012.
We are also evaluating the effectiveness of VHA's acquisition and
management practices used to purchase prosthetic limbs. Our preliminary
results show that VA is paying more for prosthetic limbs than the
agreed upon prices in the contracts in place. VA can reduce its risks
for paying excessive prices by strengthening its oversight and controls
with actions to ensure the review of vendor quotes, purchase orders,
and to verify the costs of items billed on invoices match agreed upon
prices in the associated contracts. We expect to issue a final report
on this early in 2012.
CONCLUSION
As an agency whose primary mission is to deliver benefits and
services, it is a challenge to achieve meaningful cost savings but it
is not insurmountable. The suggestions from the VSOs are a good
starting point for the discussion but we believe the Committee and VA
should consider other areas, including those we have raised. The VA OIG
is committed to continue reviewing VA programs and operations to ensure
that they function economically, efficiently, and effectively. We will
continue to put forth recommendations that not only produce savings but
more importantly provide better services to our Nation's veterans.
Mr. Chairman and Members of the Committee, this concludes my
statement today. I will be pleased to answer any questions you may
have.
MATERIAL SUBMITTED FOR THE RECORD
Deliverables from House Committee on Veterans' Affairs
Hearing on Potential Budgetary Savings within VA:
Recommendations from Veteran Service Organizations
November 15, 2011
Below are VA's responses to questions asked during the November 15,
2011 HVAC hearing on potential budgetary savings within the Department
of Veterans Affairs.
Question 1: Please provide a legal conclusion from OMB on the
application of sequestration to VA.
Response: This question will be addressed in VA's responses to the
post-hearing questions stemming from this hearing.
Question 2: Please provide the trend in the number of conferences
over the past several years.
Response: Leadership of the Department has centralized the approval
process for all conferences involving more than 50 employees, and
applied much greater scrutiny to them, requiring a strong business case
to show a clear purpose and desired outcomes from the proposed
conference, as well as encouraging wider use of teleconferences. When
there is a case made for an in-person conference, there is a strong
push for more economical venues and ensuring the number of participants
is appropriate. The future trendline for both conference expenditures
and the number of conferences will be downward. With regard to the
request on historical information, however, an accurate, reliable
figure on the number of conferences is not available.
Question 3: Please provide a side-by-side review of CMS and VA
survey questions for State Homes for certification.
Crosswalk--38 CFR 51 VA's State Veteran Home (SVH) Survey Areas
with Centers for Medicaid & Medicare Services (CMS) SVH Survey
Standards (38 CFR 483)--(8) eight areas of difference:
11-18-11
Below are the 8 areas identified by Ascellon which differ between
the VA's SVH Survey Standards and those of CMS. Each of these (8) eight
areas are discussed and provided below.
1. VA area--Administration
38 CFR 51.210 Notification of change of administration to
Geriatrics and Extended Care
Compliance with Section 504 of the Rehabilitation Act 1973, Annual
Certification of Drug Free workplace, Annual Certification r/t
lobbying, Annual certification compliance with Title VI of Civil Rights
Acts, percentage of Veterans, State employee if contract out management
of SVHs.
These are VA specific with no correspondence in CMS.
2. VA area--Credentialing and Privileging (C&P)
38 CFR 51.210 j. Credentialing and Privileging.
VA Specific area--no corresponding Credentialing & Privileging
process in CMS.
Specific to VA is (38 CFR 51.10); the CMS SVH survey regulation 38
CFR 483 does not identify a C&P process, it simply states: ``The
facility must operate and provide services in compliance with
applicable Federal, State, and local laws, regulations, and codes, and
with accepted professional standards and principles that apply to
professionals providing services in such a facility.
3. VA area--Basic Per Diem
Basic Per Diem 51.41
VA Specific area--no corresponding CMS area
4. Per Diem and drugs and medicines: 38 CFR 51.42 & 43 (all VA
specific)
VA--specific--no corresponding CMS area.
5. Social Worker qualifications
VA's qualifications are more comprehensive than those of CMS as
described below:
VA Social Work Qualifications
38 CFR 51.100 (h) Social Services.
(1) The facility management must provide medically related social
services to attain or maintain the highest practicable mental and
psychosocial well-being of each resident.
(2) A nursing home with 100 or more beds must employ a qualified
social worker on a full-time basis.
(3) Qualifications of social worker. A qualified social worker is
an individual with----
(i) A bachelor's degree in social work from a school
accredited by the Council of Social Work Education (Note: A
master's degree social worker with experience in long-term care
is preferred), and
(ii) A social work license from the State in which the State
home is located, if offered by the State, and
(iii) A minimum of 1 year of supervised social work experience
in a health care setting working directly with individuals.
(4) The facility management must have sufficient support staff to
meet patients' social services needs.
(5) Facilities for social services must ensure privacy for
interviews.
CMS Social Work Qualifications:
Sec. 483.15 Quality of life.
``(3) Qualifications of social worker. A qualified social worker is
an individual with----
(i) A bachelor's degree in social work or a bachelor's degree
in a human services field including but not limited to
sociology, special education, rehabilitation counseling, and
psychology; and
(ii) One year of supervised social work experience in a health
care setting working directly with individuals.''
6. Registered Nursing Services Coverage--VA more specific than CMS
in required coverage
VA Nursing Service Standards--38 CFR 51.130 Nursing services
``(b) The facility management must provide registered nurses 24
hours per day, 7 days per week.
(d) The facility management must provide nursing services to
ensure that there is direct care nurse staffing of no less than 2.5
hours per patient per 24 hours, 7 days per week in the portion of any
building providing nursing home care.
(e) Nurse staffing must be based on a staffing methodology that
applies case mix and is adequate for meeting the standards of this
part. (Authority: 38 U.S.C. 101, 501, 1710, 1741-1743).''
CMS Nursing Service:
38 CFR 493 483.30
States that: ``facility must provide services by sufficient numbers
of each of the following types of personnel on a 24-hr basis to provide
nursing care to all residents in accordance with resident care plans,''
with waivers to this requirement by the State for a variety of reasons-
ex. when the state determines that doing so will not endanger the
health of the residents, when the facility has been unable to recruit
appropriate personnel, etc.
7. Issue: Nursing Services: Issue of designation of a supervising
nurse for each tour of duty--
VA more specific than CMS
VA Nursing Service Standards
Sec. 51.130 Nursing services.
``Facility must designate a supervising nurse for each tour of
duty.''
CMS Nursing Service Standard
See Item #6 above for CMS Nursing Service--38 CFR 493.30 states a
facility must designate a licensed nurse to serve as a charge nurse on
each tour of duty except when waived.
8. Nursing Services Issue: VA's Hours Per Patient per 24 Hours
(HPPD) of no less than 2.5 hours:
VA more specific than CMS
VA Nursing Service Standards
38 CFR Sec. 51.130 Nursing services.
``(d) The facility management must provide nursing services to
ensure that there is direct care nurse staffing of no less than 2.5
hours per patient per 24 hours, 7 days per week in the portion of any
building providing nursing home care.''
See Item #6 for CMS Nursing Service standards--does not specify
hours of nursing care per patient.
Question 4: Please provide a complete cost to implement paperless
claims.
Response: The Veterans Benefits Management System (VBMS) lifecycle
cost estimate (as revised in the September 2011 E300A submission) is
$934,795,000. This cost estimate consists of VBMS development,
technology, operation and maintenance (O&M), and government full time
employees from fiscal year 2010 through 2017. The top cost and schedule
drivers are development, technology, and O&M.
Development: The major cost driver is the Workflow and Business
Rules development costs. Man-hours required to interpret the vast set
of business rules surrounding Workflow and Workload management will be
more extensive than any other functional component of the system. This
is where the most ``custom'' code development will most likely be
incurred. Another major driver is the security required for a HIGH
system accreditation. The development activities surrounding these
controls and the additional documentation will be a larger cost than
most systems incur.
Technology: By far, the largest cost driver is the Document
Repository (FileNET) and associated technology required for the image-
processing. Scanning and, more to the point, back-scanning of image
data will be a large cost. The physical requirements to store and
transmit this data, operationalize in a performant manner and deliver
end capability will be a major long term cost and initial
operationalizing cost. The network connectivity required along with the
associated hardware and software are all major drivers for cost.
O&M: Scanning will also be one of the larger cost drivers along
with data storage. VA 6500 and Legal requirements to store data within
accessible means impact long term storage requirements and transmission
needs. Licensing and repeated incurring costs to support the document
management will be an operational cost.
Questions and Responses for the Record
Questions for Joseph A. Violante, National Legislative
Director, Disabled American Veterans and Carl Blake,
National Legislative Director, Paralyzed Veterans of America:
November 30, 2011
Joseph A. Violante
National Legislative Director
Disabled American Veterans
807 Maine Avenue, SW
Washington, DC 20024
Dear Joe:
In reference to our full Committee hearing entitled, ``Potential
Budgetary Savings Within the U.S. Department of Veterans Affairs:
Recommendations from Veterans' Service Organizations,'' that took place
on November 15, 2011, I would appreciate it if you could answer the
enclosed hearing questions by the close of business on January 11,
2012.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for materials for all full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively and single-spaced. In
addition, please restate the question in its entirety before the
answer.
Due to the delay in receiving mail, please provide your response to
Carol Murray at [email protected], and fax your responses to
Carol at 202-225-2034. If you have any questions, please call 202-225-
9756.
Sincerely,
BOB FILNER
Ranking Democratic Member
__________
Questions for the Record
November 15, 2011
Questions for Joseph Violante, National Legislative
Director, Disabled American Veterans
Question 1: Out of the nine recommendations discussed in your
testimony, please tell the Committee your top three issues that you
believe the Committee should focus on in order of priority.
Question 2: Does your organization generally support the VISN
structure or do you think it is time to take another look at how the
provision of medical care is organized and managed? If you are
generally supportive of the current VISN structure, do you believe that
the present VISN boundaries are optimally drawn or do you have
suggestions as to how to better draw these boundaries to reflect local
needs and national centralization?
Letter to Carl Blake, National Legislative Director,
Paralyzed Veterans of America
November 30, 2011
Carl Blake
National Legislative Director
Paralyzed Veterans of America
801 18th Street, NW
Washington, DC 20006
Dear Carl:
In reference to our full Committee hearing entitled, ``Potential
Budgetary Savings Within the U.S. Department of Veterans Affairs:
Recommendations from Veterans' Service Organizations,'' that took place
on November 15, 2011, I would appreciate it if you could answer the
enclosed hearing questions by the close of business on January 11,
2012.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for materials for all full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively and single-spaced. In
addition, please restate the question in its entirety before the
answer.
Due to the delay in receiving mail, please provide your response to
Carol Murray at [email protected], and fax your responses to
Carol at 202-225-2034. If you have any questions, please call 202-225-
9756.
Sincerely,
BOB FILNER
Ranking Democratic Member
__________
Questions for the Record
November 15, 2011
Questions for Carl Blake, National Legislative Director,
Paralyzed Veterans of America
Question 1: Out of the nine recommendations discussed in your
testimony, please tell the Committee your top three issues that you
believe the Committee should focus on in order of priority.
Question 2: Does your organization generally support the VISN
structure or do you think it is time to take another look at how the
provision of medical care is organized and managed? If you are
generally supportive of the current VISN structure, do you believe that
the present VISN boundaries are optimally drawn or do you have
suggestions as to how to better draw these boundaries to reflect local
needs and national centralization?
Responses from Joseph A. Violante, National Legislative
Director, Disabled American Veterans and Carl Blake, National
Legislative Director, Paralyzed Veterans of America:
Question 1: Out of the nine recommendations discussed in your
testimony, please tell the Committee your top three issues that you
believe the Committee should focus on in order of priority.
Answer: On behalf of The American Legion, AMVETS, Disabled American
Veterans, Paralyzed Veterans of America and Veterans of Foreign Wars:
Ranking Member Filner, our organizations believe it is imperative that
the funding provided to VA must be efficiently and effectively spent in
order to care for our Nation's veterans. Every dollar that is misspent
or wasted is a dollar that cannot be used to provide benefits or
services to veterans in need. For this reason, we worked jointly to
identify a number of areas that the Committee might examine as possible
ways to reduce waste and achieve savings within certain VA programs. In
both our letter to the Committee dated April 4, 2011, and in our
subsequent testimonies offered on November 15, 2011, we stressed the
overriding importance of maintaining sufficient funding for VA health
care and infrastructure remediation, each of which requires significant
focus by the Committee over the coming year.
Health Care Funding
Our organizations have worked with you and your colleagues for a
number of years to gain sufficient, timely and predictable funding for
VA's many programs. One extraordinary success was the passage of the
Veterans Health Care Budget Reform and Transparency Act, Public Law
111-81, an Act that created the advance appropriations process to
govern VA health care funding. That Act was designed to allay the
Veterans Health Administration's (VHA) chronic annual anxiety about the
availability of funds on the first day of a fiscal year, and has begun
to change management behaviors in a very positive way for the
betterment of health care for veterans.
However, as detailed in our testimony, the Administration and the
Office of Management and Budget continue to introduce budget variables
and make individual decisions irrespective of VA's internal Enrollee
Health Care Projection Model and the advance appropriations process,
actions that undermine our joint efforts to stabilize VHA funding. We
have grave concerns about a number of budgetary ``gimmicks'' that were
proposed by the Administration and accepted by the Congress. Moreover,
the entire benefit of advance appropriations was recently overridden by
Congress itself when a provision in the short-term continuing
resolutions approved at the beginning of FY 2012 forced VA to spend
less than Congress had previously provided to VHA through the advance
appropriations process.
Thus, we believe a clear priority for the Committee's time and
resources in the new Session and the next Congress should be allocated
to the Administration's VA budget formulation practices, with oversight
of any new variables, ``management improvements,'' or other budget
gimmicks that may threaten the advance appropriations process--which
functions optimally when based on honest and transparent actuarial
forecasting. Therefore, we believe this must be the Committee's top
oversight function for the foreseeable future.
Maintaining and Improving VA's Physical Plant
VA's capital infrastructure is another top concern of our
organizations. Diminution of VA through neglect and attrition of
capital infrastructure, whether in the health or benefits systems, will
over time reduce the quality and quantity of services for veterans.
Without properly functioning buildings and major building systems, VA
cannot sustain quality programs. Without these investments, VA will
experience steadily increasing inefficiencies and ever-greater
difficulty attracting talented people to work within the VA system.
Over the past two decades (with the partial exception of seismic
improvements), no Administration or Congress has adequately funded VA's
infrastructure needs. While VA buildings today are still serviceable,
they and their component parts need to be maintained, renovated,
replaced and kept contemporary in order for VA facilities to remain
viable institutions for veterans who need services and for the staffs
who work in them. We believe that it is a major responsibility of
Congress and, more specifically, this Committee, to ensure that VA
receives adequate funding to keep its infrastructure safe and
functional. Congress has reserved to itself the sole power to approve
and authorize appropriations for major medical facility construction on
a per-project basis, and provides oversight on minor construction and
VA's maintenance and repair accounts. We believe this critical area of
VA weakness and lack of resources warrants much closer attention and
leadership by the Committee.
While all the recommendations discussed in our testimony are
important, these two items are a priority.
Question 2: Does your organization generally support the VISN
structure or do you think it is time to take another look at how the
provision of medical care is organized and managed? If you are
generally supportive of the current VISN structure, do you believe that
the present VISN boundaries are optimally drawn or do you have
suggestions as to how to better draw these boundaries to reflect local
needs and national centralization?
Answer: VA's adoption of VISNs as a regional health care
organization was derived from the geographic service area concept of
the 1991 VA Commission on the Future Structure of Veterans Health Care,
a Federal advisory commission chartered by then-VA Secretary Edward J.
Derwinski to make recommendations for organizational, structural,
quality, safety and cultural improvement in VA health care, among other
aims. VA considered the Commission's recommendations for 3 years before
implementing this one as a part of VHA's 1995 administrative
reorganization. Initially, 22 VISNs were established but two of them--
the smallest in terms of patient workload, staff and funding--were not
independently viable and were consolidated, so that today 21 networks
remain, covering the continental U.S., Hawaii, Puerto Rico and U.S.
possessions.
We supported the VA's decision to restructure the VA health care
system, the principal benefit being a regionalization of health care
delivery, coordination of leadership and decentralization of decision-
making with a corresponding reduction of VA Central Office's
involvement in local health care management matters. Like Congress, we
believed that health care decisions were best left to local VA facility
managers and clinicians, while VA Central Office should focus on
national strategy and policies, program development, practices and
standards-setting. The idea was simple: policy is set at the top;
implementation occurs at the local level.
Recent testimony before the Senate Committee on Veterans Affairs
suggested VA facility managers are ``gaming the system'' to meet goal
numbers established by the VISNs, rather than providing needed care to
veterans as provided for by law and is also one of our concerns. We
receive much anecdotal information from our members and VA employees
that is consistent with such allegations--although these troubling
reports are difficult to prove in any systematic way. The Committee's
recent oversight hearing on chronic problems at the Miami VA Medical
Center is illustrative of how such challenges can fester undetected
because of lack of adequate public reporting and the general
unavailability of documentary data.
A second concern and one about which we wrote you in our April 2011
letter and testified at your November 15 hearing, is the number of
staff now assigned to the VISNs. When the networks were formed, VA
asserted that they would be staffed by network directors with small
cadres of staff. Management functions that exceeded this staff's
ability to perform them were to be accomplished by working groups
composed of VAMC staffs on temporary assignments. Over the past 15
years, however, the network offices have grown dramatically, and have
morphed into 21 permanent mini-central offices, staffed with full-time
professional staffs focused on operations, clinical care, human
resources, quality, safety, internal and external review, media, press,
public affairs, budget, academic affairs, and numerous other functions.
Perhaps the most worrisome concern with the VISN organization is
the enormous administrative overhead that is being incurred by these
seemingly bloated numbers of staff. We believe thousands of VA
permanent, full time staff may now be assigned to VISN offices (but
exact numbers are elusive due to lack of publicly available
information). Within VA these network positions are popular because
they represent opportunity for career mobility, professional
advancement, and promotion of local VA employees. We believe a large
number are clinicians who in their network assignments no longer
provide clinical care to veterans. While we believe that clinical
leadership is a strength of VA health care, we believe that the size
and complexity of the current VISNs depart from the recommendations of
the Commission's report, and from the original vision of those who
implemented the geographic service area recommendation. Not only are
clinical staff members being taken away from front line positions but
also valuable technical and administrative staff have been drained from
medical centers to VISN offices.
Many of the additional positions were VACO-mandated to respond to
the ``crisis of the day'' phenomena. Instead of developing thoughtful
solutions for recognized problems, previous Administrations simply
added new mandatory positions, functions or new offices.
Our third concern with the networks deals with the geographical
boundaries of VISNs. With the exception of the one major consolidation
change mentioned above, no adjustment of VISN boundaries has occurred
in the 15-plus years of the life of this organizational model. The
original VISN geographic boundaries were drawn based on VA patient-
referral patterns and delivery systems from well over 20 years ago;
these may well have changed. Also, some historical anomalies of the
VISN map seem to cry out for review, for example, the small state of
West Virginia remains subdivided into parts of four VISNs; the western
Panhandle of Florida is part of the eight-state VISN 16, while the
remainder of the large state of Florida is in VISN 8. We see other
examples in the current VISN map that raise questions as well.
Another concern is the allocation of appropriated medical care
funds below the level of the network offices. VA's VERA system is a
risk-adjusted capitation model that allocates Congressional
appropriations to the networks rather than the facilities.
Theoretically, this model enables regional coordination and funding of
highly specialized, scarce medical resources, while the facilities
remain the major delivery systems and serve as VHA's basic building
blocks to formulate VHA's annual budget request. VHA's appropriations
have grown dramatically over the past several years--yet VA facilities
often indicate to us that they are significantly underfunded and must
ration spending for numerous categorical needs across the operating
year. We believe the resource allocation model or the systems being
employed by the VISN offices to allocate resources to the VAMCs might
need scrutiny and possibly re-balancing for their effects on local
operations.
With these thoughts in mind, we would recommend the Committee
commission an independent, outside review of the VA network concept,
subsequent implementation and current status, with recommended changes
that may be warranted by review findings. We believe the time has come
for a critical review of the organization, functions, operations, and
budgeting process at the VISN and VAMC levels. We recommend the review
be conducted by the Institute of Medicine (IOM) rather than by VA or a
private contractor. Involving the IOM would ensure a thoroughgoing,
apolitical and unbiased review. In addition to examining the current
referral patterns, the analysis should account for future demand,
changes in veteran and family expectations, and the changing trends in
health care delivery.
Also, we would recommend that the IOM's review and analysis be
comprehensive to include a review of the VHA Central Office
organization. This evaluation should address a value-based analysis of
those programs that are optimally managed and funded at a national,
VISN or VAMC service level.
While the IOM's report should be made to the Committee, VA should
be permitted to comment on the report. We would also recommend the
Committee hold hearings on the results of this review to include
testimony from this community and other interested parties. The IOM
reviewers should be carefully instructed as to the goals of the study,
which we believe should focus on ways to improve health care quality,
safety, satisfaction, consistency and access. The study should focus on
delivery of comprehensive, patient-centered care to today's veterans
that builds on the obvious progress VA has made over the past 16 years.
The IOM's work on this project should be closely monitored by the
Committee as the process occurs to ensure your goals are met.
We thank the Ranking Member for your questions, and we would be
happy to furnish any additional information that might be of use to the
Committee as it conducts its oversight of VA programs.
Letter from Hon. Jeff Miller, Chairman, Committee on
Veterans Affairs to Hon. Eric Shinseki, Secretary,
U.S. Department of Veterans Affairs
November 30, 2011
The Honorable Eric K. Shinseki
Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420
Dear Mr. Secretary:
In reference to our full Committee hearing entitled, ``Potential
Budgetary Savings Within the U.S. Department of Veterans Affairs:
Recommendations from Veterans' Service Organizations,'' that took place
on November 15, 2011, I would appreciate it if you could answer the
enclosed hearing questions by the close of business on January 11,
2012.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for materials for all full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively and single-spaced. In
addition, please restate the question in its entirety before the
answer.
Due to the delay in receiving mail, please provide your response to
Bernadine Dotson at [email protected]. If you have any
questions, please call 202-225-3527.
Sincerely,
JEFF MILLER
Chairman
Post-Hearing Questions for the Record
Submitted by Chairman Jeff Miller
Hearing on Potential Budgetary Savings Within the
U.S. Department of Veterans Affairs: Recommendations
from Veterans' Service Organizations
November 15, 2011
1. According to the VA IG testimony, VHA estimated in 1995 that
the original size of all 22 VISNs would range between 154 to 220 with
total operating costs of about $26.7 million annually. The IG now
estimates the existing 21 VISNs employ at least 1,098 staff at an
annual cost of over $165 million.
1. Please detail what is being done to assess this growth in
VISN staffing levels.
2. What is the FTE range of VISN headquarter staff nationwide?
3. Is there a correlation between a growing headquarter staff
and VISNs meeting key performance measures?
2. Please provide information on newly hired employees in the VHA
positions of Medical Center Director, Associate Network Director, and
Network Director for the years 2008 through 2011, broken down by year
and the Pay Grade and Step at which these individuals were hired.
3. Please provide information on the number of VA employees,
broken down by Administration, whose work-related business activities
permit such employee to receive reimbursement for travel and other
expenses incurred for having a temporary duty location (basically
having two residences) and the cost to the Department as a result of
payments for air fare; per diem; or mortgage, interest, property taxes
and utility costs for purchasing a home at the temporary duty location.
4. The IG testimony stated that fundamental controls continue to
be problematic for the fee care program. Why is that? What is being
done about it?
5. How many individual fee-basis care contracts does VHA have?
Would consolidation of contracts into larger networks of providers
(similar to a Tricare model) be more economical and improve care
coordination? Has there been any analysis of the feasibility of moving
to a Tricare-like model for VA's fee-basis program? What about moving
to a larger network model for only certain kinds of care, e.g., mental
health?
6. In the past year the VA IG has uncovered instances of fraud in
VA's beneficiary travel program. In essence, veterans who lived only a
few miles from a medical center claimed residences that were over 100
miles away, then obtained a travel reimbursement based on the
fictitious residence.
1. What methods does VA have to guard against this kind of
fraud? Are veterans' addresses matched against other government
records to ensure valid residences are reported?
2. What oversight is conducted on individual medical centers'
beneficiary travel offices in terms of correct determinations
being made regarding a veteran's eligibility for travel
reimbursement?
3. How much money is spent annually on VA's beneficiary travel
program? How much is spent administering the program? Has any
thought been given to consolidating the beneficiary travel
function (similar to a CPAC model) to improve efficiency and
promote consistent decision-making?
7. Do VA employees ever fly business class to conferences or other
VA-sponsored travel destinations?
8. Please provide the Administration's position regarding whether
VA programs are exempt from sequestration. Please provide the Office of
General Counsel legal opinion/recommendation to the Office of
Management and Budget regarding whether all VA-administered programs,
including VA medical care, are exempt from sequestration.
9. In the November 14, 2011 IG report regarding VA retention
incentives, Dr. Petzel committed to a 100 percent review of all SES/SES
Equivalent retention incentives by November 30, 2011. Please provide
the Committee with the results of that review.
Questions for the Record
Chairman Jeff Miller
House Committee on Veterans Affairs
Potential Budgetary Savings within the
U.S. Department of Veterans Affairs:
Recommendations from the Veterans' Service Organizations
November 15, 2011
Question 1: According to VA IG testimony, VHA estimated in 1995
that the original size of all 22 VISNs would range between 154 to 220
with total operating costs of about $26.7 million annually. The IG now
estimates the existing 21 VISNs employ at least 1,098 staff at an
annual cost of over $165 million.
1. Please detail what is being done to assess this growth in VISN
staffing levels.
2. What is the FTE range of VISN headquarter staff nationwide?
3. Is there a correlation between a growing headquarter staff and
VISNs meeting key performance measures?
Response:
1. Please detail what is being done to assess this growth in VISN
staffing levels.
In 1995, VHA began a reorganization that included the establishment
of 22 VISNs. Staffing began with each VISN having ten core staff. Over
time, staffing has grown commensurate with increased VISN
responsibilities. In August 2011, VHA conducted a preliminary review of
VISN management variation and staffing data, and determined that a more
detailed analysis was necessary. VHA established work teams to examine
the following sub-areas:
VISN Role and Function
VISN Core Staff
VISN Regional Variations
VISN Strong Practice Sharing
Structured Business Reviews of VISNs
Expected deliverables
VISN Role and Function. Since the mid-1990s, the VISN's role has
evolved into that of a fundamental operating unit of VHA. VISNs have
been charged with increased oversight responsibilities and programmatic
implementation, which vary according to complexity of care, specialized
services, staff sizes and other local factors. A specific and
comprehensive definition of the role and functions of the VISN Network
Office will be developed, to ensure that the VISN Network Office role
relative to operation, oversight and implementation of programs within
facilities is adequately covered.
VISN Core Staff. VHA has increasingly come to rely on VISNs to
provide ``reach'' into the field, for added oversight and operational
direction for the Deputy Under Secretary for Health for Operations and
Management (DUSHOM), program office implementation efforts and VHA
leadership. A work team will formally match this and other
responsibilities into the broader VHA organizational structure. As form
follows function, the organizational structure (form) will be mapped to
the explicit roles and functions of the VISN. The work team will
generate a document that maps the VISN role and function to an
organization structure. The structure will include a breakdown of types
of positions (core/leadership, mandated, discretionary, etc.).
VISN Regional Variations. Develop a methodology to identify and
monitor positions that provide (direct) support to facilities through
coordinated regional effort for those positions or services that do not
meet the criteria for core VISN staff.
VISN Strong Practice Sharing. Develop a process (to include
expected outcomes) for VISN identification, validation (measurement)
and sharing of strong practices in the VISN.
Structured Business Reviews of VISNs. Develop a management agenda
that will serve as the DUSHOM (10N) structured business review of the
VISNs.
Work teams comprised of VISN and VHACO leadership are expected to
report the results of their efforts to the Office of the DUSHOM during
the first quarter of calendar year (CY) 12.
2. What is the FTE range of VISN headquarter staff nationwide?
VISN staffing ranges between a high of 104 fulltime-equivalent
employees (FTEE) and a low of 38. A November 2011 survey of VISNs
indicates there is a direct correlation between the complexity of the
VISN (number of campuses) and the number of Veterans the VISN serves
(coverage area).
3. Is there a correlation between a growing headquarter staff and
VISNs meeting key performance measures?
As VHA undertakes new and expanded initiatives, the variance in
interpretation and assignment of functions and personnel assigned to
the VISN has increased. Compounding this situation, the escalating role
of the VISN in the oversight and implementation of programs and
policies has led to substantial variation in VISN structure.
While geographic and Veteran population differences provide for
valid reasons for some level of variation among VISN structures, the
incremental expansion of VISN mission, coupled with variation in
structures, creates variations in both the functions performed by VISNs
and interpretation about the purpose of the VISN. While it is desirable
that VISN structure and function are evaluated and standardized to
disseminate strong practices across all VISNs that align in mission,
VHA's current efforts to assess VISN staffing will accommodate those
geographic and population differences that are found among the
Networks.
A corollary to VHA's VISN staffing assessment will be the
identification of candidate reporting sources for use in the
development of a balanced view of VISN performance. VHA anticipates
that structured business reviews will guide the integrated outcome,
process and associated measurement framework to incorporate the
following traditional dimensions of a balanced scorecard: client,
process/quality, financial, operational efficiencies and employee/
learning. A team was formed to develop this complementary activity,
whose timeline for completion is also first quarter CY 12. A
significant factor in VHA's VISN staffing assessment is the finding
that the appropriate VISN-level FTEE to provide leadership and
expertise has contributed to better performance at the VAMC-level in
such areas as mental health, geriatrics, prosthetics and patient
safety.
Question 2: Please provide information on newly hired employees in
the VHA positions of Medical Center Director, Associate Network
Director, and Network Director for the years 2008 through 2011, broken
down by year and the Pay Grade and Step at which these individuals were
hired.
Response: Please see attached.
Question 3: Please provide information on the number of VA
employees, broken down by Administration, whose work-related business
activities permit such employee to receive reimbursement for travel and
other expenses incurred for having a temporary duty location (basically
having two residences) and the cost to the Department as a result of
payments for air fare; per diem; or mortgage, interest, property taxes
and utility costs for purchasing a home at the temporary duty location.
Response: VA does not have access to records that identify
individuals who own a second home at the TDY location. Under that
scenario, the traveler should not claim lodging costs for the period of
travel. Also, there would be no lodging receipt for review/approval by
the supervisor as required by travel regulations. The travel voucher
should reflect no lodging costs.
However, such travelers could receive a Travel Savings Award. These
incentives are not exclusively provided to individuals who own a home
in a temporary duty location and could include situations where
travelers stayed with friends or stayed in lower cost accommodations as
well. VA's Travel Savings Award policy can be found at: http://
10.222.13.221/scan/jobs/13320/DC-260-80B7761018.pdf
VA records show that in 2011 a total of $59,795 was paid out to 105
employees as ``Travel Savings Awards.''
Question 4: The IG testimony stated that fundamental controls
continue to be problematic for the fee care program. Why is that? What
is being done about it?
Response: VHA has been developing and implementing initiatives to
resolve program issues. Most significant issues center on the manual
nature of the program and variability in business practices. VHA's
Chief Business Office for Purchased Care has taken several steps to
improve this program, focusing in several areas. The program has been
supported by manual processes; key changes described below are underway
to standardize, reduce or eliminate manual processes supporting the
program.
Technology Improvements: Fee Basis Claims System (FBCS): The VistA
Fee package was developed more than 20 years ago and was not designed
for the sophistication and volume of claims that the VA is now
processing. As a result, VA has implemented an interim automation
system, FBCS, to support and improve the Purchased Care claims
management operations. VA has seen improvements in payment accuracy and
timeliness since this implementation began in October 2009, with
significant reductions in the manual work required to manage this
program. In addition, enhancements are underway that will address the
top audit findings, reducing the significant manual processes currently
supporting the program. These are planned to be implemented in late
calendar year 2012.
Program Integrity Tools: VA has implemented an aggressive Fraud/
Waste/Abuse (FWA) Program with specific awareness and training efforts
accomplished in FY 2011 through the creation of the VHA CBO Program
Integrity Department which combats fraud, waste and abuse using various
system safeguards, detailed auditing and the development of fraud
detection and awareness training classes. During FY 2011, quarterly
Fraud, Waste and Abuse training sessions were conducted through Live
Meeting presentations, which covered: code gaming, ambulance upcoding,
``bundled'' billable claims, common fraud schemes, and detection and
prevention of health care fraud. In addition, VA has developed routine
monthly reporting that provides detailed information on FWA cases to
each facility for review; if payment errors are validated, these
results are included in the quarterly High Dollar Overpayment report to
the Office of Management and Budget (OMB). Finally, VA has procured
industry standard technology tools that utilize known health care
industry algorithms to identify potential fraudulent or erroneous
claims. VA will implement these tools by the end of calendar year 2012
which will consist of the following:
Claims Scoring Tool
Data Repository
Data Integration/Extraction, Transform and Load (ETL)
tool, and
Reporting Tool
Business Process Changes:
Non-VA Care Coordination: VHA is implementing the following
standardized business processes to reduce variability and inefficiency
across all program areas including:
Consult/Referral review: initial decision point for use
of Non-VA Care.
Appointment Management: control and oversight of the Non-
VA appointments.
Clinical Documentation Management: assure appropriate
clinical information is received in a timely manner.
Emergency Care: assure appropriate oversight and
management of emergent care provided at Non-VA facilities; assure
claims associated with emergent care are adjudicated in a standardized
manner.
Appeals Management: assure timeliness and quality
standards are met when Veterans appeal benefit decisions.
These standardized business processes are scheduled to be fully
deployed throughout all 21 VISNs by the end of FY 2012. Early results
have seen positive progress in the timeliness of approvals and
appointments for non-VA care, and the receipt of clinical documentation
for these non-VA care visits.
Site Assessment Visits: VA's Chief Business Office has expanded its
Non-VA Care Field Assistance Program to provide enhanced assistance
visits designed to assist with site specific process improvements and
assessment of key business practices supporting the program. In FY
2011, 30 site assistance visits were performed, which included
providing staff guidance and training to approximately 180 Fee field
facility staff. The site assistance visits also included an extensive
analysis of the clinical utilization review aspect of Fee care, proper
authorizations, obligations of funds, staff understanding of payment
methodologies and the Fee Basis Claims System (FBCS) and an overview of
management controls within the Fee office. Upon conclusion of the
visit, a final report and extensive action plan for process improvement
is shared with the facility leadership and follow-up conducted to
ensure that action plan findings are implemented.
Training and Education: The Fee Academy is the primary training
program provided to VISN and VAMC Non-VA Care (Fee) employees
nationwide. The Fee Academy is organized into a four-tiered,
progressive level of curriculums designed to improve performance,
enhance internal controls and be in compliance with program policies--
461 employees completed this training in FY 2011. The Fee Academy is
augmented by `just in time' mini-courses delivered via LiveMeeting on
myriad topics concerning new or changed processes--over 13,000
employees attended 60+ mini-courses in FY 2011. Future efforts will
include a link to core competencies and associated mandatory training
requirements.
Non-VA Purchased Care Claims Audit Contract (CCAC): This external
contract conducts post-payment reviews and analysis that identify
errors in payment methodologies and procedures for Non-VA Care (Fee)
claims processing. In FY 2011, 12 VISNs were audited, addressing
findings at 24 VA facilities. Each VISN prepared an action plan
specific for their findings. In addition, the findings from audits have
been utilized to prioritize technology and business process changes
required to support overarching program improvement initiatives.
Recovery Audit: The Purchased Care Business Line (PCBL) manages the
national contract for an external audit of non-VA care inpatient
payments. These audits have been in place since 2002, with recoveries
exceeding $100 million. In March 2011, PCBL expanded the recovery audit
to include outpatient services. To date, this audit has identified
approximately 1,800 cases with the potential for $557,000 in
collections to the government. The results will be used to reinforce
training and field communications and develop additional audit and
corrective actions plans.
Question 5: How many individual fee-basis care contracts does VHA
have? Would consolidation of contracts into larger networks of
providers (similar to a Tricare model) be more economical and improve
care coordination? Has there been any analysis of the feasibility of
moving to a Tricare-like model for VA's fee-basis program? What about
moving to a larger network model for only certain kinds of care, e.g.
mental health?
Response: On a national basis, VA currently has fee-basis care
national contracts for Dialysis/End Stage Renal Disease (ESRD) services
and pilot contracts in select VISNs for Project HERO (medical,
surgical, and dental care), mental health services, and Project ARCH
(Access Received Closer to Home) pilot program. Also, within VA Medical
Centers, specific contracts do exist on a limited basis and they are
developed, awarded and managed at the local level based on need.
Approximately 30 percent of Non-VA Care (Fee) payments are covered
under a contract or local agreement. VA facilities also issue
individual authorizations, which serve as contracts once accepted by
non-VA providers. The Project HERO pilot, while different than TRICARE,
has some similarities to the broader model of contracting with larger
networks of providers.
VA will be moving to a larger network model of contracts for health
care services with awards anticipated in late calendar year 2012 and
operations beginning in the mid-year 2013. These contracts utilize
lessons learned from Project HERO and other pilot efforts and the
effort is referred to as Patient-Centered Community Care (PCCC). This
new effort seeks to connect VA with networks of providers across the
country through centrally supported health care contracts. The
contracts will leverage economies of scale to provide community-based
care that is coordinated, timely and of high clinical quality. The
requirements for the contract are in development and are based on
lessons learned from Project HERO and other Purchased Care pilot
programs, such as:
Standardize business processes;
Require medical documentation return;
Include timeliness and access standards to ensure best
possible access to care;
Ensure provider quality by requiring they meet
credentialing, licensure and board certification standards; and
Establish performance measures and objectives.
Question 6: In the past year the VA IG has uncovered instances of
fraud in VA's beneficiary travel program. In essence, Veterans who
lived only a few miles from a medical center claimed residences that
were over 100 miles away, then obtained a travel reimbursement based on
the fictitious residence.
1. What methods does VA have to guard against this kind of fraud?
Are Veterans' addresses matched against other government records to
ensure valid residences are reported?
2. What oversight is conducted on individual medical centers'
beneficiary travel offices in terms of correct determinations being
made regarding a Veteran's eligibility for travel reimbursement?
3. How much money is spent annually on VA's beneficiary travel
program? How much is spent administering the program? Has any thought
been given to consolidating the beneficiary travel function (similar to
a CPAC model) to improve efficiency and promote consistent decision-
making?
Response:
1. What methods does VA have to guard against this kind of fraud?
Are Veterans' addresses matched against other government records to
ensure valid residences are reported?
VA acknowledges that the Beneficiary Travel Program (BT) is a high
risk area. Veterans in accordance with BT regulations at 38 Code of
Federal Regulations (CFR) 70.30 (b) may receive travel benefits for
travel from either their residence or other point travel initiated;
however, payment cannot exceed the amount payable from the Veteran's
residence. Also, current Health Insurance Portability and
Accountability Act (HIPAA) laws provide for an individual to have a
mailing address that does not reflect their residence. In addition,
some rural residences do not have an established street address.
VA currently does not have address-matching capabilities with other
Federal agencies. However, for reasons noted above, another agency's
address on file may or may not reflect where the Veteran currently
resides or initiated travel. Therefore, such matching could be of
limited value. As such, when a questionable address is identified by
the local VA Medical Center, program office guidance has been for the
VA Medical Center, in accordance with 38 CFR 70.20 (e), to request from
the Veteran a document, generally a utility bill, in his or her name
indicating current residence. If the Veteran does not have such a
document, a notarized letter from an individual where the Veteran is
staying may be requested. VA is also exploring the use of web-based
services which provide automated real time verification of residence.
This may include use of HHS or SSA address verification tools.
In addition, VA released to the field in June 2011, a tool that
provides the ability to analyze BT mileage reimbursement data at the
facility or Network (VISN) level to determine: total and average cost
per patient; total and average cost per zip code; different patient
populations according to total number (count) of payments made and
total amount paid (sum); total and average number of claims per clerks;
and patient behavior and clinic usage trends. As such, stations can
identify: clinic and patient population outliers by sum and count;
total amount paid in mileage reimbursement within pre-determined
parameters; how efficiently travel clerks are performing; geographic
travel trends; and possible patient behavior trends. Feedback obtained
from VHA field staff is that this tool has proven extremely beneficial
in identifying potential BT issues for further evaluation and
appropriate action by the using station. VA is also currently in the
final production test of a ``BT Dashboard'' tool that will allow field
stations to more effectively and efficiently process beneficiary travel
claims. The tool will expedite claims process to reduce waiting time
for patients and increase accuracy of mileage determinations through
system-wide use of a standardized mileage calculator and creation of a
detailed clinical inventory for surrounding facilities and VISNs.
2. What oversight is conducted on individual medical centers'
beneficiary travel offices in terms of correct determinations being
made regarding a Veteran's eligibility for travel reimbursement?
VA is currently in the final stages of implementing internal
controls for the BT program by both descriptive/deductive and inductive
modeling through 6 identified Veteran behaviors relating to BT
reimbursement. Behaviors describe Veterans who:
1. ``Unbundle'' appointments by scheduling them on multiple days
even though they could be scheduled on the same day; and drop-in for
medical services without a scheduled appointment.
2. Provide incorrect income information, which may render them
eligible for BT benefits irrespective of their service-connected (SC)
rating; have a SC disability rating of less than 30 or have a non-
service-connected (NSC) disability; and have an annual income higher
than the VA pension level.
3. Frequently change their addresses in order to increase their BT
payments.
4. Choose a VA facility for care that is further than the closest
VA facility providing the same care; and Veterans receiving care at
multiple facilities concurrently or sequentially; some of these
Veterans may have been denied BT benefits at some of the facilities;
moreover, the care sought may be similar at each facility.
5. Travel together (in the same vehicle) but file BT claims
separately.
6. File for BT benefits for multiple visits occurring on the same
day. Improper BT payments may occur when the time needed to travel
roundtrip is longer than the time between the appointments.
Behaviors are to be run against national VA data and then
distributed to VISNs on a monthly basis for review, action and
reporting back to the program office to track, trend, and provide
national level reports regarding results. Information will also assist
the program office to identify potential deficiencies for review and
take corrective action, if required. Development is anticipated to be
completed by the end of January 2012 with first reporting expected in
March 2012.
3. How much money is spent annually on VA's beneficiary travel
program? How much is spent administering the program? Has any thought
been given to consolidating the beneficiary travel function (similar to
a CPAC model) to improve efficiency and promote consistent decision-
making?
While BT is generally thought of as mileage reimbursement, Title 38
United States Code (U.S.C.), Sec. 111, ``Payments or allowances for
beneficiary travel'' as regulated in 38 CFR Part 70 authorizes VA to
pay for special mode (ambulance, wheelchair, van, etc.) and common
carrier (plane, bus, train, ferry, etc.) transportation of certain
eligible Veterans and other beneficiaries. VA can provide or reimburse
for the actual cost of bridge tolls, road tolls, tunnel tolls, parking,
and in case of air transport luggage costs, when supported by a
receipt. The actual cost for meals, lodging or both, not to exceed 50
percent of the amount allowed for government employees may also be
provided in limited circumstances. As such, VA tracks costs via three
cost centers which are:
Inter-FacilityTravel (Budget Object Code (BOC) 2112):
Travel costs associated with the transfer of a patient from one
facility to another when the transfer is necessary for the continuation
of care. The transfer may occur between VA facilities, non-VA
facilities or any combination as long as the treatment is at VA
expense;
Other than Mileage (BOC 2119): All beneficiary travel
charges, except mileage. This includes special mode transport and
certain eligible associated costs of travel: lodging, meals; and
Mileage (BOC 2120): Mileage reimbursement and associated
costs: road, bridge, tunnel tolls, parking.
Obligations for the past three Fiscal Years (FY) are:
------------------------------------------------------------------------
FY 2009 FY 2010 FY 2011
Type (000) (000) (000)
------------------------------------------------------------------------
Inter-Facility $69,910 $71,752 $63,201
------------------------------------------------------------------------
Other Than Mileage $244,275 $242,045 $276,803
------------------------------------------------------------------------
Mileage $314,754 $431,518 $484,829
------------------------------------------------------------------------
Total $628,939 $745,315 $824,833
------------------------------------------------------------------------
VA has previously given consideration to consolidating certain
aspects of the BT program; however, because of the eligibility
requirements of the program, unique clinic needs, physical layout of
medical center and associated community based outpatient clinics and
available resources at each facility (as well as unique local
resources), program operations and functions are better suited for
local implementation. VA, is however, currently evaluating several
options to increase oversight, and this may lead to centralizing
certain aspects of the BT program. The Chief Business Office has
estimated FY 2012 administrative costs for managing the Beneficiary
Travel program to be $645,263. In addition, during FY 2012, the Chief
Business Office expects to award an analytics support contract for BT
program, at an estimated cost of $624,000. Total FY 2012 administrative
costs for the program office are estimated to be $1,269,263. These
figures do not include the costs incurred at VA health care facilities
for administering the program.
Question 7: Do VA employees ever fly business class to conferences
of other VA-sponsored travel destinations?
Response: Yes, but only on a very infrequent basis. The Federal
Travel Regulations (FTR) and VA travel policy permit employees, under
certain circumstances, to use business or first class ``other-than-
coach'' (OTC) class travel with proper justification and approval. OTC
travel is always to be the exception, and approval is strictly limited.
VA recently tightened the authorization process for obtaining such
approval. VA employees are required to exercise the same care in
incurring expenses that any person would exercise if traveling on
personal business and consider the least expensive class of travel that
meets his or her needs. Authorization for OTC travel may be justified
as a result of a traveler's medical condition, properly documented by a
medical authority; a total flight time in excess of 14 hours (business
class, but not first class); or other reason allowed under the FTR.
Approved use of OTC travel entails authorization by the employee's
direct supervisor, a senior approving official, the respective Under
Secretary or Assistant Secretary, and VA's Chief Financial Officer.
Otherwise, if OTC travel does not fall within one of the exceptions to
the FTR, the only way an employee could fly OTC is using personal funds
to pay for the upgrade.
Question 8: Please provide the Administration's position regarding
whether VA programs are exempt from sequestration. Please provide the
Office of General Counsel legal opinion/recommendation to the Office of
Management and Budget regarding whether all VA-administered programs,
including VA medical care, are exempt from sequestration.
Response: This issue remains under Administration legal review.
Question 9: In the November 14, 2011, IG report regarding VA
retention incentives, Dr. Petzel committed to a 100 percent review of
all SES/SES Equivalent retention incentives by November 30, 2011.
Please provide the Committee with the results of that review.
Response: In September 2011, the Under Secretary for Health
established a VHA Retention Incentive Technical Review Board (RITRB) to
review all proposals for retention incentives for SES and SES
Equivalent employees. All VHA entities were directed to review
retention incentives currently in place and determine if all
requirements were met for the retention incentives to be continued. If
all criteria were not met, the retention incentives were to be
terminated. Requests for continuation of retention incentives were to
be submitted for RITRB review by October 31, 2011. The RITRB completed
their review by November 30, 2011.
The RITRB reviewed all submissions and made recommendations. The
Under Secretary for Health has also made his recommendations to the
Department, which are now under consideration.
Follow-up to Questions for the Record
Chairman Jeff Miller
House Committee on Veterans Affairs
Potential Budgetary Savings within the U.S. Department of Veterans
Affairs:
Recommendations from the Veterans' Service Organizations
November 15, 2011
Question:
A question was asked to Mr. Grams at the Nov. 15 hearing regarding
the date VA sent it's legal review/recommendation to OMB on the
sequestration issue. We still need VA's response to that question.
Further, a request was made for the Committee to receive a copy of VA's
review/recommendation. That request was repeated in Chairman Miller's
post-hearing questions as part of question 8. That was not responded to
as well.
Understanding that the broader question on sequestration is still
under legal review (according to the responses to Mr. Miller's post
hearing questions), we still await responses on the two issues above.
Since Mr. Grams spoke of a review that had already been completed and
submitted, I suspect letting the Committee know of its contents and
date submitted shouldn't take any time at all.
Response:
The Administration continues to believe that balanced deficit
reduction, not across-the-board sequestration, is the way to put the
Nation on the path to fiscal stability.
The President's Budget includes a comprehensive and balanced
deficit-reduction proposal. Congress should enact that proposal and
then halt the sequestration scheduled to take place on January 2, 2013.
If Congress does not Act on the President's deficit-reduction
proposals, the Administration will provide guidance on the
implementation of the sequestration. It is committed to doing so well
in advance of January 2, 2013, to facilitate orderly planning.
Letter to Hon. Eric Shinseki, Secretary, U.S.
Department of Veterans Affairs from Hon. Bob Filner,
November 30, 2011
The Honorable Eric K. Shinseki
Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420
Dear Mr. Secretary:
In reference to our full Committee hearing entitled, ``Potential
Budgetary Savings Within the U.S. Department of Veterans Affairs:
Recommendations from Veterans' Service Organizations,'' that took place
on November 15, 2011, I would appreciate it if you could answer the
enclosed hearing questions by the close of business on January 11,
2012.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for materials for all full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively and single-spaced. In
addition, please restate the question in its entirety before the
answer.
Due to the delay in receiving mail, please provide your response to
Carol Murray at [email protected], and fax your responses to
Carol at 202-225-2034. If you have any questions, please call 202-225-
9756.
Sincerely,
BOB FILNER
Ranking Democratic Member
Questions for the Record
November 15, 2011
Questions for W. Todd Grams, U.S. Department of Veterans Affair
Question 1: Your written testimony states that VA is ``instilling a
culture throughout our system that pursues continuous improvement and
empowers staff members to solve problems at the front line or at any
point in the health care system.'' Please provide the Committee with
the specific policies or procedures VA has implemented or issued, Since
January 1, 2011, to achieve this change in culture. Which specific
policies or procedures can you point to as being of primary importance
in instituting this change? In what other ways are you ``instilling''
this culture?
Question 2: In February, Secretary Shinseki testified regarding the
VA's reliance on ``carryover'' funding, or funding not obligated in the
previous fiscal year. For many years, a small portion of VA's medical
care budget was provided in the form of 2-year authority to better
enable the VA to manage its resources. Arguably, the need for 2-year
authority for a portion of the VA's medical care budget is not as
strong in the era of advance appropriations. The continued reliance of
the VA on carryover funding may provide a perverse incentive at the
local level not to obligate funds in order to provide VA Central Office
with carryover funding to plug funding gaps in the next fiscal year.
What specific steps has VA Central Office taken to negate this
incentive? What specific steps has VA Central Office taken, and
communicated to the VISN level, to ensure that funds are obligated when
needed and on a timely basis?
Question 3: VAOIG audits and reports have identified hundreds of
millions of dollars in potential savings through better management of
VA programs. Please explain to the Committee why these savings and
improvements were not identified by VA prior to being identified by
VAOIG audits or reports. What specific steps has the VA taken to
improve day-to-day internal management in order to proactively identify
program deficiencies? Does VA feel confident that it is better able
today to identify future problems?
Question 4: According to your testimony, earlier this year VA
``conducted a pilot program that used standardized templates for
purchasing care, ensured more consistent assessment of other VA
options, and resulted in better control over management of the care
[VA] purchased.'' What was the impetus behind starting this pilot
program, and why wasn't this degree of standardization implemented in
the past?
Question 5: VAOIG testified that improved management and oversight
of the Fee Basis program offers the greatest opportunity for savings.
VAOIG also states in testimony that the Fee program, still lacks
fundamental controls. Please explain what VA is doing to tighten up the
pre-authorization process and management controls? What has VA done
proactively that will prevent the same mistakes happening in the
future?
Question 6: VAOIG evaluated the Veterans Health Administration's
controls to prevent and detect fraud. VHA had not identified fraud as a
significant risk to the Fee Care Program. Health care industry experts
have estimated that 3 to 10 percent of all claims involve fraud. What
is your progress on the VAOIG's recommendations from the Veterans
Health Administration--Review of Fraud Management for the Non-VA Fee
Care Program, June 8, 2010 report that VA should establish a fraud
management program with data analysis and high-risk payment reviews,
system flags for suspicious payments, employee fraud awareness
training, and fraud reporting?
Question 7: VSOs have raised concerns with the VA's practice of
holding back medical care appropriations from being distributed to the
field. Particularly they mention VA is currently holding back 1.5
percent of the advance appropriations for health care. Please explain
the policy rationale for this practice.
Question 8: In testimony, the VAOIG listed several other areas for
potential savings. One of these areas was the management of rural
health initiatives. In FYs 2009 and 2010, the VAOIG reported that the
Office of Rural Health (ORH) lacked reasonable assurance that its use
of $273 million of the $533 million it received improved access and
quality of care for veterans. Please provide the Committee with a
progress report on the six recommendations listed by the VAOIG in the
report Veterans Health Administration--Audit of the Office of Rural
Health dated April 29, 2011
Question 9: According to a New York Times article dated September
12, 2011, entitled ``Government Pays More in Contracts, Study Finds,''
a study, conducted by the Project on Government Oversight ``found that
in 33 of 35 occupations, the government actually paid billions of
dollars more to hire contractors than it would have cost government
employees to perform comparable services.'' In what areas is VA
currently studying the differences in contracting costs comparable to
providing services in house? In those areas where the VA has contracted
out services in the past, has the VA undertaken any follow-up studies
to ascertain if projected savings were indeed realized?
Question 10: It is our understanding that the Veterans Benefits
Administration has recently awarded a contract to ACS, Inc. It is also
our understanding that VBA is training this company on how to develop
claims and that at some time next year, ACS employees will be charged
with developing 190,000 claims. Please provide the Committee with
details of the contract, including cost, and the policy rationale for
contracting this function out.
Question 11: According to the National Academy of Public
Administration's white paper entitled ``Veterans Health Fee Care
Program,'' dated September, 2011, ``VA's Fee Care Program expenditures
have grown 275 percent since [FY] 2005. There are now approximately
2400 Full Time Employees (FTEs) working in the program. Paid claims
rose from $3 billion in FY 2008 to $4.4 billion in FY 2010 (46 percent
increase), while the number of unique patients served increased from
820,000 to 952,000 (16%) in the same period. NAPA also reported that in
``recent years, Fee Care has been increasingly used to meet patient
wait-time standards. That is, when a medical service cannot be provided
at a VA facility within wait-time performance standards, VA Medical
Centers (VAMCs) often use the Fee Care Program.
Please detail why paid claims increased 46 percent while the number
of unique patients served increased only 16 percent. How much of this
46 percent increase in paid claims is attributable to VA attempts to
meet patient wait-time performance standards? Please provide the
Committee with wait-time reports from FY 2008 to the present, and a
detailed breakdown, by VISN, of Fee Care Program expenditures since FY
2008 and the amount expended, by VISN, since FY 2008 of Fee Care
Program expenditures utilized to meet wait-time performance standards.
Question 12: The NAPA white paper recommended that substantial
changes be made in the VA Fee Care Program and that a strategic change
management plan be developed as quickly as possible. Does VA agree that
substantial changes should be made in the Fee Care Program? Is the VA
developing, or planning on developing, a strategic change management
plan? What is the specific timetable for changes that have been
identified as needed in the Fee Care Program to be implemented?
Question 13: The NAPA white paper states that ``[g]iven the
significant organizational and productivity challenges within the Fee
Care Program, VHA has a limited understanding of the services it is
procuring through its program and their cost. The Fee Care Program does
not appear to have been well managed at any level of VA. VHA provides
limited VISN-wide executive oversight of its purchased care program,
and the program lacks clearly defined operational objectives or goals,
and it is not guided by a coherent strategy for managing program
expenditures.'' Does VA believe the Fee Care Program has been well
managed? Does VA believe that there is sufficient level of VISN-wide
executive oversight? Does VA believe that the Fee Care Program has
clearly defined operational objectives and goals and a coherent
strategy for managing program expenditures?
Question 14: The NAPA white paper states that the ``Chief Business
Office estimates the error rates (that is, erroneous payments) at 12
percent per year, which equates to approximately $500 million in FY
2011. By contrast, TRICARE has a reported error rate of 0.42 percent.
Productivity varies across operating sites by nearly ten folds between
the most and least efficient sites [footnotes omitted].'' Please
provide a detailed explanation to the Committee as to why the VA
experiences such a high error rate compared to TRICARE and why there is
a divergence across the VA system in the level of error rates. What
policies or procedures are currently in place, or have been in place
previously, that contribute to this high error rate and divergence, and
what specific policy and procedural steps is the VA taking to address
this high error rate and divergence?
Question 15: During the hearing, VA stated that it was going to
roll-out Project HERO nationwide. What are the detailed policy
rationales behind implementing this program nationwide? Please provide
the Committee with a detailed plan on the proposed nationwide roll-out
including detailed time frames, benchmarks, and costs associated with
the roll-out. In addition, please provide the Committee with any
detailed cost studies that have been prepared estimating any cost-
savings, by VISN, that VA will achieve with Project HERO. If VA has not
prepared detailed cost estimates, please provide the Committee with
estimates regarding these proposed savings.
Questions for the Record
Ranking Democratic Member Bob Filner
House Committee on Veterans Affairs
Potential Budgetary Savings within the
U.S. Department of Veterans Affairs:
Recommendations from the Veterans' Service Organizations
November 15, 2011
Question 1: Your written testimony states that VA is ``instilling a
culture throughout our system that pursues continuous improvement and
empowers staff members to solve problems at the front line or at any
point in the health care system.'' Please provide the Committee with
the specific policies or procedures VA has implemented or issued, since
January 1, 2011, to achieve this change in culture. Which specific
policies or procedures can you point to as being of primary importance
in instituting this change? In what other ways are you ``instilling''
this culture?
Response: The creation and nurturing of a culture of continuous
improvement and organizational learning is a multifaceted
organizational imperative in health care. The Veterans Health
Administration (VHA) understands that drivers of sustained change
include the organizational impetus to change over time, leadership
commitment and support of the change, improvement initiatives that
actively engage staff in meaningful problem solving, alignment from the
top to bottom to achieve consistency of organizational-wide goals with
resource allocation and actions, and integration to bridge traditional
intra-organizational boundaries between individual components.
VHA is moving forward with a variety of organizational initiatives
and training efforts to influence culture in a way to harness its power
to speed the capacity for the provision of safe, high quality care
characterized by continuous improvement and learning. VHA's Offices of
Quality, Safety, and Value (QSV), Workforce Services, Office of Patient
Centered Care & Cultural Transformation, and Nursing Services are key
partners in these efforts. The functions and activities of all of these
offices are fundamental to the success of efforts to facilitate
cultural transformation as these functions draw upon the belief that
culture is related to organizational performance.
Quality, Safety, and Value
VHA has had a long history of commitment to, and development of a
culture of safety through the establishment of the National Center for
Patient Safety (NCPS) in 1999. This culture of safety provides the
foundation of improvement and learning. Over the years since NCPS was
established, and with the support of VHA, the elements of a culture of
safety have been developed and expanded. These include the following:
Just Culture--a just culture is the lynchpin of any
safety culture and is one in which human error is recognized as an
inevitable product of highly complex processes. With the 2011
establishment of the Office of QSV, VHA has clearly re-committed to the
continued support and expansion of the just culture.
Understand Complexity--human error occurs because of the
complex environment in which individuals operate. To improve the safety
of this environment, a deep understanding of why errors occur must be
developed so that improved systems may be created. Because people have
difficulty discussing the errors they make, it is imperative for a just
culture to exist so that people may admit to, and discuss, the errors
they have made without fear of retribution. Only with such a culture
may health care professionals and staff completely understand the
systems issues that lead to medical errors. VHA leadership has fully
supported NCPS in developing and training VA staff and leadership in
the concepts of a just culture and this has helped improve the
willingness of front line providers to report errors when they see
them. NCPS conducts a Safety Culture Survey to track perceptions of
patient safety at the facility and Veterans Integrated Service Network
(VISN) level over time.
High Functioning Teams--because of the inherent
complexity of medical systems, it is difficult for even the most
intelligent and diligent individual to catch all possible failures that
may occur. Highly functioning teams are imperative to improve patient
outcomes. To this end, VHA strongly supported NCPS in the development
of programs to enhance team performance. Medical Team Training (MTT)
focuses on enhancing the performance of teams in high risk areas such
as intensive care units (ICU), operating rooms, and emergency
departments. The face-to-face training sessions have been running since
2005 and help develop the skills that improve team functioning. In
2011, the program was expanded to other areas of VHA where well defined
teams must interact together such as dental, podiatry, and orthopedic
clinics. The training results in improved safety attitudes, higher
morale, and reduced staff turnover. A key outcome of VHA's training has
been reductions in risk-adjusted surgical mortality rates (VA's
findings were published in JAMA 2010; 304 (15); 1693). Another team
program, Clinical Crew Resource Management (CCRM) has recently been
added to focus on the more informal teams that interact at the ward
level. This training focuses on the empowerment of the
multidisciplinary front line staff that come together to care for
patients at the ward level. Over 800 people have been trained since the
pilot in 2010 and as of 2011 the program will be introduced in an
additional 5-7 sites. Results pre- and post-training note improved
average teamwork scores as well as improvement in the error reporting
culture. This strongly suggests that people feel more comfortable in
discussing errors when a just culture exists. This training has also
resulted in reductions of unit acquired pressure ulcers, medication
errors per patient day, hyper- and hypo-glycemic events, and failure to
rescue.
Engaged Leadership--as part of any team training that a
facility undertakes there must be leadership support and engagement.
NCPS ensures that facility leadership understands that for a culture of
safety to be fully developed leadership must engage in walk rounds so
that they may hear about safety and quality concerns from front line
providers and show them that their concerns have been heard. VHA
leadership has supported such training and with the 2011 reorganization
has specifically created an arm within VHA that focuses on QSV--
concepts of teamwork and leadership have been reinforced in vision and
mission of the new Office of QSV.
Additional initiatives focusing on a culture of safety and
continuous improvement include:
Select executive leadership teams have participated in a
variety of site visits to non-Department of Veterans Affairs (VA)
health care entities. These medical organizations (Virginia Mason,
ThedaCare, Henry Ford, Baptist Health care, Barnes-Jewish, et al.) have
been nationally recognized for successfully navigating change
management and commitment to knowledge sharing. Eight Veterans
Integrated Service Networks (VISNs) have participated, and site visits
will continue to all remaining Networks.
In support of VA's transformational initiatives, senior
leaders from all VISNs are participating in customized Leading
Organizational Improvement workshops. These workshops include an
organizational assessment of the existing leadership structure and
function, and then combine didactic training with real-time strategic
planning to facilitate cultural transformation towards a culture of
continuous improvement. To date, 10 of 21 VISNs have completed the
workshop. More than 90 percent of the FY 2011 workshop participants
rated the materials, instruction, and exercises as ``Good to
Excellent.''
In July 2011, VHA leaders participated in a conference
entitled ``VHA Culture of Improvement'' to thoughtfully develop action
plans to help change the culture.
The Enhancing a Culture of Continuous Improvement
Guidebook will be piloted in early 2012 with plans for widespread
deployment later that same year. VHA's Systems Redesign function within
the QSV Office is developing the guidebook with the assistance of a
multidisciplinary committee of field-based and national experts
(Systems Redesign Leadership Committee). The guidebook focuses on how
to change organizational culture to foster a culture of continuous
improvement.
Approximately 25 hospital teams per year participate in
training academies in order to learn and apply systems redesign and
operations management techniques to leadership-identified strategic
priorities. Academy sessions focus on outpatient access, inpatient
flow, and systems redesign methodologies that include the application
of systems engineering principles.
Veteran Engineering Resource Centers conduct Rapid
Process Improvement Workshops (RPIWs), which enable facility-based
teams to apply improvement principles to real projects. More than 300
staff attended RPIWs in FY 2011.
VHA continues to use Learning Collaboratives to engage
and train facility based teams in achieving patient-centered,
continuously improving, team-based care in a data driven health care
delivery organization.
Patient Aligned Care Teams (PACT) improved access, care
coordination, and redesigned practices;
The Human Resources (H.R.) Recruitment Community of
Practice initiative built upon the FY 2008-FY 2009 H.R. Recruitment
Collaborative to continue support, training, and sharing of information
and strong practices in improving recruitment and hiring of skilled
health care workers;
The FIX/Flow Collaborative is transforming inpatient ward
care and building cohesive care teams through innovative improvements
in quality, safety, nurse and physician communication, and work
efficiencies;
The Patient Flow Collaborative focuses on management of
hospital flow, communications, and coordination, and incorporation of
the deployment of the electronic bed management system within VA
medical centers.
The Transitioning Levels of Care Collaborative improved
and smoothed the transitions of patients between levels of care. The
main focus was on movement from acute care to lesser acuity settings
such as home, long term care, etc.
Ensuring Correct Surgery (ECS) continues to be offered to
facility teams. This training program was developed in 2011 in
collaboration with Surgical Service and resulted in a series of virtual
training modules available to all operating room/procedure area staff.
While this training is still new, VISN leadership in surgery and
anesthesia have all been trained in this high-risk area.
QSV is aggressively pursuing implementation of the
International Standards Organization (ISO) 9001 quality standards. ISO
9001 is the preeminent international standard for quality management
systems that ensure reliable delivery of services and products. These
standards are created, updated, and sustained through the International
Organization for Standardization (ISO). Starting with the reprocessing
of reusable medical equipment, VHA is one of the few health care
organizations bringing non-health care industry rigor and discipline to
the execution of scope cleaning processes.
VHA is successfully changing the culture in primary care
practices to include patient-centered, team-based primary care. PACT
aims to improve patient access to appointments with health care
providers, enhance access to providers through the telephone, secure
messaging, group visits and home telehealth, and engage patients more
aggressively in care for chronic disease to keep more patients out of
the emergency department and hospital.
The Office of QSV is leading the revision of VHA's
``Framework for Excellence'' overarching policy on quality functions.
VHA partners with the Office of Inspector General (OIG) on numerous
actions that result in reported change and continual improvement.
Specifically, OIG has verified organizational improvement for more
effective operations in areas specific to procurement; improvement in
how the Workers Compensation Program is managed and monitored to
maximize savings and efficiencies; implementation of significant
controls over the payment of executive retention incentives; and
reduction in the number of improper payments with new monitoring
processes involving VHA Finance.
Workforce Services
VHA's Office of Workforce Services is another fundamental component
of instilling a culture of continuous improvement and empowering staff
to solve problems in the health care system. The primary function of
Workforce Services is managing and developing human capital, supporting
organizational health, and transforming VA into a learning
organization. Achievements in 2011 encompass four core themes: improved
recruitment and appointment processes, transformation and system
redesign, ensuring a sense of workplace psychological safety and
engagement, and development of the future clinical workforce.
Recruitment and appointment processes:
In FY 2011, VA implemented a new WebHR system in response
to enterprise-wide assessment and modernization of processes and
systems to enhance recruitment, management, and retention of VA's
300,000-person workforce and to support VA's human capital investment.
The WebHR application has been identified as foundational in VA's
overall human capital management systems modernization initiative by
providing a singular point of automatic document creation. WebHR
provides a starting point, via the information contained in the SF-52,
for many key H.R. functions. WebHR and the Form SF-52 are common to all
VA H.R. components, with the result of centralizing and facilitating
management of information across VA for applicants, trainees (including
affiliates), and employees.
The Under Secretary for Health granted authority to VISN
Directors to approve leadership positions prior to review by the
Leadership Management & Succession Board (LMSB). This new process has
accelerated the selection and placement of Executive Career Field
senior leadership positions at Medical Centers throughout VHA.
Professional clinical recruiters were hired and placed in
each VISN to engage local H.R. staff and clinical hiring managers in a
concerted effort to resolve long-term staffing issues. Over 1,700
qualified candidates were referred, and over 350 selections were made
in the past 18 months.
Transformation and system redesign:
VHA is transforming to provide health care excellence for
the 21st century, and in doing so, more than 30 percent of the
programs, products, and services delivered in FY 2011 were related to
transformational initiatives.
Employee Education Service (EES) manages the clinical
training needs of fifteen major VHA health care transformational
initiatives. For example, in FY 2011, EES conducted 132 Center of
Excellence trainings resulting in PACT education of 8,087 participants.
A strategic partnership with VHA's Office of QSV to
implement critical organizational improvement initiatives was
developed. As detailed above, these initiatives included improving
access to care, improving inpatient flow, and implementation of PACT.
Significant training has been provided to VHA leadership
on improvement principles and how to create a culture of improvement
throughout the organization.
Psychological safety and engagement in the workplace:
VHA offers on-site executive coaching expertise to
current and developing leaders within the organization, including the
creation of personal development plans, and offers on-site consultation
and assistance. In 2010, the National Center for Organizational
Development (NCOD) provided executive coaching to 630 VA clients. In
2011, NCOD provided one-time executive coaching to 223 VA clients and
ongoing executive coaching to 116 VA clients.
Civility, Respect, and Engagement in the Workplace (CREW)
was initiated in 2005. As of 2011, over 1,000 workgroups at 109 VA
Medical Centers have participated in CREW. Each cohort of CREW has
reported statistically significant improvements in civility as a result
of the CREW intervention. CREW is now available to Veterans Benefits
Administration (VBA), National Cemeteries Administration (NCA), and VA
Central Office (VACO) staff as a Human Capital Investment Plan
initiative.
The VA All Employee Survey (AES) has been administered
annually to all VHA employees from 2006. In 2010, the AES was expanded
to all VA employees across all VA administrations (VACO, VHA, VBA, and
NCA).
In FY 2010, NCOD provided 360-Degree Assessment reports
to 1,800 VA employees, including 560 VA executives, and provided 180-
Degree Assessment reports to 1,000 VA employees. In FY 2011, it is
projected that NCOD will provide 360-Degree Assessment reports to 1,500
VA employees, the Executive 360-Degree Assessment reports to 550 VA
employees, and the 180-Degree Assessment reports to 900 VA employees.
In 2011, NCOD provided ongoing, intensive consultation
services to 67 VA organizations (including VISN offices, Medical
Centers, VA program offices, VBA, and NCA). Additionally, NCOD experts
provided focused, one-time consultative services to 106 VA
organizations (including VISN offices, Medical Centers, VA program
offices, VBA, and NCA).
In FY 2011, VHA developed an executive team model to
support the provision of services that are Veteran-centric, evidence-
based, and delivered by engaged, effective, collaborative teams in an
integrated environment that supports learning, discovery, and
continuous improvement. To date, a total of 162 executive teams,
including 704 executives from medical centers and network offices in
the field, have completed a new Executive Team Assessment. The
Executive Team Assessment is currently being administered to all
executive teams in VHA Central Office.
Development of the future clinical workforce:
One of the primary missions of VA is to have the
leadership in place today to lead us into the future. But it is equally
important to educate health care professional trainees for practice in
the 21st century health care workplace.
In FY 2011, VHA stood up five Centers of Excellence in
primary care education with the goal of transforming care delivery and
the education of VA's future clinical workforce.
In FY 2011, VA also expanded the size of the Chief
Residents in Quality and Safety program, which is designed to introduce
the foundational principles of patient safety and quality improvement
to medical residents.
Nursing Services
The Office of Nursing Services (ONS) is implementing the Clinical
Nurse Leader role (CNL), a new master's prepared general RN provider at
the point of care. The CNL will coordinate and deliver complex clinical
care; improve clinical and cost outcomes, and provide continuous
quality and safety improvements at the Microsystems level; translate
and apply research findings at the point of care; and enhance staff
competence and empowerment to solve problems at the front line. Since
2009, VHA has demonstrated significant positive CNL outcomes related to
quality, safety, value, cost savings, cost avoidance and innovative
clinical practice. CNL practice aligns with both the Patient Aligned
Care Team and Specialty Care Transformation, thereby creating an
efficient, transparent, and collaborative health care environment. As
of December 2011, ONS has made significant progress implementing the
CNL role throughout the entire VA health care system.
The Office of Patient Centered Care & Cultural Transformation
The Office of Patient Centered Care & Cultural Transformation was
created in January 2011. A vision, strategy, and implementation plan
has been formulated, and many presentations have taken place at all
levels of our system (National Leadership Council, VISN, Medical
Center, program offices) to communicate this plan and engage the
organization. Nine Centers of Innovation have been identified and
established to pilot new models of care and approaches to enrich the
Veteran's experience. Since August 2011, Field Based Implementation
Team members have been hired and are undergoing intensive training. As
a result, the Office has a framework and strategic plan established to
implement this significant cultural transformation.
Health Equity
Following a multidisciplinary work group meeting in August, 2011,
the Under Secretary for Health committed to support for a new
initiative to champion the advancement of health equity and reduction
of health disparities for our Veterans. This initiative will position
VHA as a national leader in achieving equity in health care and
outcomes among disadvantaged patient populations and lead efforts to
address health disparities by promoting and providing education/
training, communications and information to Veterans and our workforce.
VHA will coordinate programs, projects and other activities to bring
synergy within the organization. Representatives from the work group
will represent VA and VHA to serve as liaison to other governmental and
non-governmental organizations working to achieve health equity. They
will capitalize on the existing network of Minority Veteran
Coordinators, Operation Enduring Freedom/Operation Iraqi Freedom/
Operation New Dawn (OEF/OIF/OND) Coordinators, Women Veterans Program
Managers, Homeless Veterans Coordinators, Center for Faith-based and
Neighborhood Partnerships, Office of Rural Health, Office of Diversity
and Inclusion, Office of Patient-Centered Care and Cultural
Transformation and other key partners to coordinate efforts to advance
health equity.
This initiative will be implemented using the framework provided in
the National Stakeholder Strategy for Achieving Health Equity, using
five VHA goals for a Veteran-centric approach. These goals include:
Leadership--Strengthen and broaden the ability of VA
leadership to address health inequalities and reduce health disparities
through operations, policy oversight and research.
Awareness--Increase awareness of the significance of
health inequalities and disparities, their impact on the Nation and the
actions necessary within VHA to improve health care and health outcomes
for disadvantaged populations.
Health Outcomes--Improve health and health care outcomes
for Veteran sub-populations experiencing health disparities.
Diversity and Cultural Competency of the Workforce--
Improve cultural and linguistic competency and the diversity of the VA
workforce involved in advancing the health and well-being of Veterans.
Data, Research and Evaluation--Improve the availability,
coordination and utilization of data and the diffusion of research and
evaluation outcomes in order to track progress towards the achievement
of health equity.
Question 2: In February, Secretary Shinseki testified regarding the
VA's reliance on ``carryover'' funding, or funding not obligated in the
previous fiscal year. For many years, a small portion of VA's medical
care budget was provided in the form of 2-year authority to better
enable the VA to manage its resources. Arguably, the need for 2-year
authority for a portion of the VA's medical care budget is not as
strong in the area of advance appropriations. The continued reliance of
the VA on carryover funding may provide a perverse incentive at the
local level not to obligate funds in order to provide VA Central Office
with carryover funding to plug funding gaps in the next fiscal year.
What specific steps has VA Central Office taken to negate this
incentive? What specific steps has VA Central Office taken, and
communicated to the VISN level, to ensure that funds are obligated when
needed and on a timely basis?
Response: The Department of Veterans Affairs (VA) Central Office
allocates all available funds, including funds carried over from the
previous fiscal year, at the beginning of each year. The exception is a
small National Reserve that is used to fund emerging requirements
during the fiscal year.
In previous years, Congress has provided a small portion of each VA
Medical Care appropriation (Medical Services, Medical Support and
Compliance, and Medical Facilities) as being available for two fiscal
years. This has allowed VA to accommodate unanticipated delays in
implementation of new programs, acquisition delays, activation of new
facilities that have experienced construction delays, and other
activities that have crossed fiscal years. This has enabled VA to
ensure that the funds appropriated by Congress are used for purposes
that best enhance health care for Veterans, rather than for items that
can be obligated by the end of the current fiscal year.
In Fiscal Year 2011, VA implemented a new resource allocation
process called the VA Medical Center Allocation System that includes a
standardized model for VISNs to use in allocating funding to their
medical facilities. The model was designed to provide consistency in
the allocation process across VISNs but still allow necessary
flexibility to make adjustments to medical facility allocations.
Question 3: VAOIG audits and reports have identified hundreds of
millions of dollars in potential savings through better management of
VA programs. Please explain to the Committee why these savings and
improvements were not identified by VA prior to being identified by
VAOIG audits or reports. What specific steps has the VA taken to
improve day-to-day internal management in order to proactively identify
program deficiencies? Does VA feel confident that it is better able
today to identify future problems?
Response: VA is committed to mitigating risk, ensuring compliance,
and improving the identification of program deficiencies. While an
Office of the Inspector General (OIG) review may identify issues that
are not already being addressed by program offices and leadership, many
issues identified in these reports are those that the Department has
already begun to address prior to the review.\1\
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\1\ For example, the VHA response to the OIG report ``Review of
Sole-Source Contracts with Affiliated Institutions'' indicated:
It is important to note that the Veterans Health Administration has
within the last year, after also identifying significant concerns about
health care contracting and spending with affiliates for health care
services, taken aggressive action to address these issues. Steps
include:
Bolstering leadership and employment in the Medical
Sharing Office;
Instituting new processes and procedures for tracking
this health care contracting and spending;
Improving training;
Beginning to develop updated standard operating
procedures for acquisition planning, establishment of backup plans for
alternate sources for services, additional scrutiny of sole source
justifications, and implementation of new checklist processes.
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VA action plans to address OIG recommendations and findings often
indicate efforts that VA has proactively taken to address self-
identified concerns. A good example is the recent response to the OIG
Report ``Audit of Veterans Integrated Service Network Contracts'' that
noted a number of actions VHA had already taken to address concerns
such as:
creation and implementation of the Acquisition Quality
Compliance Audit Program;
creation of Quality Assurance (QA) positions at the
Network Contracting Activity (NCA), Service Area Office (SAO) and
National levels; and
implementation of a Responsibility Determination Standard
Operation Procedures (SOP).
Also, OIG reviews often help to accelerate those processes that
have already begun. Throughout this review, VHA was able to identify
how VHA had already identified areas for improvement and solutions that
were underway. In a collaborative effort, the OIG auditors advised VHA
officials about their views of what VHA was doing or planned to do. In
the end, the solutions were improved.
The recent establishment of the Office of QSV is a proactive way to
identify and address concerns sooner, rather than later. QSV enhances
the quality, safety, reliability, and value of VHA's clinical and
business systems by enabling innovative, enterprise-wide approaches to
compliance, risk awareness, and continuous improvement. QSV is
currently implementing educational and consultative resources for the
deployment of the ISO 9001 Quality Management System standard. The
deployment provides a framework in which VHA may implement and sustain
consistent quality management systems.
VA must also continue its efforts to identify efficiencies, seek
improvement, and strengthen day-to-day internal management in order to
proactively identify program deficiencies. To this end, several steps
have been initiated. VA recently engaged a system-wide review of
existing programs, structures, and skill sets that support the
development of an Enterprise Risk system. Building upon the background
research provided from this overview, the Under Secretary for Health
asked the Office of QSV to introduce the concept of Enterprise Risk
Management (ERM) to VHA leadership. Following this introduction, QSV
has been further educating VHA leadership on the ERM concepts. The
education process will be followed by a roll-out of the operational
details that may help guide implementation of ERM at the VISN and
hospital levels.
ERM is broadly understood to be a practice that helps organizations
understand their risks so as to better identify, analyze, mitigate,
monitor, and evaluate those risks. Thus, the benefits of ERM include
more effective strategic planning and understanding of risk exposures.
ERM represents an opportunity for VHA to begin to better manage risks
across the organizational structure and function, rather than within an
individual office or facility. While ERM is in the early roll-out phase
in VHA, it has been well received by much of the VISN leadership, and
interest in how such the ERM process will work across the VISNs has
been high.
As is the case with VHA, VBA officials work closely with the Office
of Inspector General and value its critical role and diligence in
helping to meet that commitment to mitigate risk, ensure compliance,
and improve the identification of program deficiencies.
VBA partners with OIG through all phases of its audits. OIG reports
identify specific areas in need of process and/or systemic
improvements, as well as compliance issues. At the regional office
level, the OIG Benefits Inspection reports identify compliance issues
and important areas where additional training is needed.
Often, issues identified in OIG reports are already in the process
of being addressed by VBA program offices. The OIG reviews also have
the benefit of looking at the administration of our programs
retroactively. For all reports, VBA provides action plans addressing
OIG recommendations and quarterly status updates for OIG validation and
ultimate closure. Each VBA business line performs regular site visits
to regional offices to review compliance with policy and procedures as
well as to provide assistance and training where necessary.
VBA's ongoing transformation efforts also focus on improving
decision quality, mitigating risk, and strengthening day-to-day
internal management. For example, VBA has developed rules-based
calculators for automated adjudication. Calculators will guide decision
makers through the process with intelligent algorithms similar to tax-
preparation software. VBA has also started to use new evidence-
gathering tools, known as Disability Benefits Questionnaires, which
allow us to bring new consistency to the collection of medical
information needed for claims decisions. Additionally, local Quality
Review Teams are being implemented to conduct ``in-process'' quality
checks as well as regular end-of-month reviews. Throughout our change
management efforts, we will identify risks up front and build in
necessary controls and procedures to avoid potential deficiencies.
Proactive risk management, recurring quality reviews, and compliance
inspections will enable VBA to avoid potential program deficiencies.
VA is committed to building compliance and risk management into
every process, policy, and procedure before implementation. We must
identify risks and ensure compliance proactively, not rely on
inspections after something is implemented. Inspections have a role,
and we need to review lessons learned and then retool what we are doing
when we do identify an ongoing concern. By ensuring enterprise risk
management, building in compliance, and appropriately inspecting and
measuring success, VA can and will be a system of continuous
improvement.
Question 4: According to your testimony, earlier this year VA
``conducted a pilot program that used standardized templates for
purchasing care, ensured more consistent assessment of other VA
options, and resulted in better control over management of the care
[VA] purchased.'' What was the impetus behind starting this pilot
program, and why wasn't this degree of standardization implemented in
the past?
Response: The Non-VA Care Coordination (NVCC) initiative was
established in October 2010 in response to findings from the Managing
Variation Workgroup which identified organizational weaknesses and
variations in both business and clinical areas. Non-VA Care was
identified as one of several focus areas and included in the Health
Care Efficiency Transformational Initiative. The Non-VA Care
Coordination model was developed to reduce and/or eliminate variations
and inefficiencies among Fee programs nationally. Prior efforts to
standardize the program focused on back-end claims processing. This
2010 effort was a natural progression of the many programmatic changes
previously underway for improving this program.
The pilot resulted in positive improvements in business processes,
including improved controls in the timeliness of initial approvals for
Non-VA Care, appointments for these services, and return of clinical
information. Examples include improving initial approvals for Non-VA
Care within 4 days, appointments made within 8 days and return of
clinical information within 20 days.
Due to these positive results, VHA has initiated deployment of
these standardized business practices in FY 2012. Deployment has been
completed at the champion sites in VISNs 11, 18 and 16. Deployment will
continue at all sites with completion prior to the end of FY 2012.
Question 5: VAOIG testified that improved management and oversight
of the Fee Basis program offers the greatest opportunity for savings.
VAOIG also states in testimony that the Fee program still lacks
fundamental controls. Please explain what VA is doing to tighten up the
pre-authorization process and management controls. What has VA done
proactively that will prevent the same mistakes happening in the
future?
Response: The objective of the national deployment of the Non-VA
Care Coordination initiative is to establish standardized business
processes and tools within all Fee programs across VA, with a strong
focus on the pre-authorization process. A primary goal is to reduce or
eliminate program variations and inefficiencies, thereby providing
consistent and equitable delivery of Fee services to eligible Veterans.
These changes will provide much greater management controls over this
key programmatic component. This will be accomplished by facilitating
and coordinating the Veteran's Fee care, and following up by ensuring
care was rendered and supporting documentation is returned to VA, and
appropriate follow-up is scheduled that returns the Veteran to VA
health care. VA is currently deploying this initiative across all
Veterans Integrated Service Networks (VISNs), with full implementation
expected prior to the end of FY 2012. These significant efforts to
standardize the program will provide VA with more stringent controls
over the entire program scope.
Question 6: VAOIG evaluated the Veterans Health Administration's
controls to prevent and detect fraud. VA had not identified fraud as a
significant risk to the Fee Care Program. Health care industry experts
have estimated that 3 to 10 percent of all claims involve fraud. What
is your progress on the VAOIG's recommendation from the Veterans Health
Administration--Review of Fraud Management for the Non-VA Fee Care
Program, June 8, 2010 report that VA should establish a fraud
management program with data analysis and high-risk payment reviews,
system flags for suspicious payments, employee fraud awareness
training, and fraud reporting?
Response: VA has implemented an aggressive Fraud/Waste/Abuse (FWA)
Program with specific awareness and training efforts accomplished in FY
2011. Within VHA's Chief Business Office, this new FWA Program works
with all stakeholders to identify and mitigate health care fraud, waste
and abuse, provide training, research fraud cases, and assist in the
development of process solutions to prevent and recover all improper
payments. The program provides detailed fraud, waste, and abuse
training to all Purchased Care personnel, VA Compliance Business
Integrity staff, and other VA stakeholders. Prevention strategies
include publications, VA and Medicare conferences, numerous training
opportunities, employee orientation, and national conference calls. In
addition, VA has developed routine monthly reporting that provides
detailed information on potential FWA cases to each facility for
review; if payment errors are validated, these results are included in
the quarterly High Dollar Overpayment report to the Office of
Management and Budget (OMB). Finally, VA has a contract with IBM to
implement a ``state-of-the-art'' Program Integrity Tool, which will
evaluate medical claims data and provide pre-payment notifications to
aggressively monitor improper payments. This is a significant
improvement and will eliminate the need for ``pay and chase''
activities and identify providers that engage in fraud, waste, and
abuse. VA anticipates implementing these tools by the end of 2012.
Question 7: VSOs have raised concerns with the VA's practice of
holding back medical care appropriations from being distributed to the
field. Particularly they mention VA is currently holding back 1.5
percent of the advance appropriations for health care. Please explain
the policy rationale for this practice.
Response: The Veterans Equitable Resource Allocation (VERA)
methodology is used by VA Central Office to fund each of VA's 21
Veterans Integrated Service Networks (VISNs). VERA does not allocate
funds to the medical centers. VERA ensures that the funds are equitably
distributed based on the number of Veterans who use the health care
system. Its objectives are to provide health care to the greatest
number of Veterans having the highest priority for health care, and
provide for special health care needs. VERA makes adjustments for VISN
variances in the case-mix/complexity of care provided, labor and
contract costs, research support, education support, equipment, non-
recurring maintenance (NRM), and high-cost patients.
In Fiscal Year 2011, VA implemented a new resource allocation
process called the VA Medical Center Allocation System that includes a
standardized model for VISNs to use in allocating funding to their
medical facilities. The model was designed to provide consistency in
the allocation process across VISNs but still allow necessary
flexibility to make adjustments to medical facility allocations.
VISNs retain some resources allocated to them by VERA for centrally
managed VISN activities and initiatives and for ensuring that medical
facilities meet their mission requirements. This includes, but is not
limited to, start-up costs for new VISN initiatives to reduce non-VA
care costs; the funding of consolidation of services shared across the
Network; and up to a maximum of 1.5 percent of the total allocation
amount for a contingency reserve. The contingency reserve is used for
unanticipated medical facility costs, such as increased patient
workload for a non-declared natural disaster or high-cost non-VA care
patients, and is normally all allocated to the medical facilities
during the course of the year to provide health care services to
Veterans.
Question 8: In testimony, the VAOIG listed several other areas for
potential savings. One of these areas was the management of rural
health initiatives. In FYs 2009 and 2010, the VAOIG reported that the
Office of Rural Health (ORH) lacked reasonable assurance that its use
of $273 million of the $533 million it received improved access and
quality of care for Veterans. Please provide the Committee with a
progress report on the six recommendations listed by the VAOIG in the
report Veterans Health Administration--Audit of the Office of Rural
Health dated April 29, 2011.
Response: VA's Office of Rural Health (ORH) successfully completed
the six recommendations listed by the VAOIG in the report Veterans
Health Administration-Audit of the Office of Rural Health (ORH) dated
April 29, 2011. ORH developed and deployed a robust set of financial
and program controls and measures to monitor continuously and trend ORH
performance and outcomes. These measures are evaluated proactively to
ensure effective and efficient operations, cost savings and positive
health care outcomes for Veterans served in rural and highly rural
areas. Please see Attachment 1--the ORH report to the Appropriations
Committees, dated November 17, 2011, which provides a status update of
all six VAOIG recommendations.
Question 9: According to a New York Times article dated September
12, 2011, entitled ``Government Pays More in Contracts, Study Finds,''
a study, conducted by the Project on Government Oversight ``found that
in 33 of 35 occupations, the government actually paid billions of
dollars more to hire contractors than it would have cost government
employees to perform comparable services.'' In what areas is VA
currently studying the differences in contracting costs comparable to
providing services in house? In those areas where the VA has contracted
out services in the past, has the VA undertaken any follow-up studies
to ascertain if projected savings were indeed realized?
Response:
1. In what areas is VA currently studying the differences in
contracting costs comparable to providing services in-house?
The Consolidated Appropriations Act of 2010 required civilian
Federal agencies to complete an annual inventory of their service
contracts for review and analyze that information to understand how
contracted services are being used and whether contractors are being
used in an appropriate manner. In compliance with this Act, VA
submitted its fiscal year (FY) 2010 annual service contract inventory
to the Office of Management and Budget (OMB) in December 2010.
VA is actively participating in the government-wide OMB led effort
to ``buy less'' and ``buy smarter.'' Toward this end, VA is actively
working on several initiatives to improve acquisition practices and
avoid inefficiency and waste. These initiatives are as follows:
Reduction of High Risk Contracts: OMB challenged agencies
to reduce the use of contracts which, if not managed appropriately, can
result in excessive cost increases to the government. Contracts
considered high risk are sole source, competitive one bid, cost
reimbursement, and Time and Material/Labor hours. Since FY 2010, VA has
been able to reduce contracting in each high risk category.
Review of Management Service Contracts: OMB noted a
government-wide increase in the use of service contracts over the past
decade. Of particular concern is the use of professional and management
services contracts. These functions were identified by OMB for
heightened management consideration, based on concerns of increased
risk of losing control of mission and operations. VA is currently
conducting an extensive review of the need for all management service
contracts.
In July 2009, the VA Office of Human Resources and
Administration in conjunction with the Office of Information and
Technology (OI&T) conducted a pilot study in accordance with OMB
memorandum M-09-26, Managing the Multi-sector Workforce, which required
all agencies to develop a pilot study on insourcing. OI&T was selected
for the pilot due to the high ratio of contractors to Federal employees
and their interest in changing the ratio. This study found that the
average salary for contractors was 29 percent more expensive than the
Federal employee. As a result of the study OI&T was able to transition
9 contracting positions to government FTE.
2. In those areas where VA has contracted out services in the
past, has VA undertaken any follow-up studies to ascertain if projected
savings were indeed realized? Yes. However, VA has not converted any
functions from in-house to contract via a standard or streamlined A-76
study since 2003 when the Veterans Benefits Administration converted
their property management function from in-house to contract under an
A-76 ``standard competition,'' due to a legal prohibition for
conducting cost comparisons that can be found in appropriations law. VA
was required by Section 647(b) of Division F of the Consolidated
Appropriations Act, FY 2004, Public Law 108-188, to report savings from
the conversion to contract for 5 years after the conversion.
Question 10: It is our understanding that the Veterans Benefits
Administration has recently awarded a contract to ACS, Inc. It is also
our understanding that VBA is training this company on how to develop
claims and that at some time next year, ACS employees will be charged
with developing 190,000 claims. Please provide the Committee with
details of the contract, including cost, and the policy rationale for
contracting this function out.
Response: VBA identified a temporary need for claims processing
support following the Secretary's decision to add three new Agent
Orange presumptive conditions (Parkinson's disease, ischemic heart
disease, and chronic B-cell leukemia) for Veterans who were exposed to
herbicides used in the Republic of Vietnam during the Vietnam era. The
influx of new claims for these conditions significantly increased VBA's
claims workload and backlog. More than 1.3 million claims were received
in FY 2011, including over 230,000 claims for the new Agent Orange
presumptive conditions. To assist VBA in addressing the dramatic growth
in the pending inventory and claims backlog, VBA decided to pursue a
one-time professional services contract to assist with claims
development. This contract was funded in FY 2011. ACS was awarded a 1-
year contract on September 12, 2011. The total cost of the contract is
$18.6M.
This services contract includes expedited development of evidence
to support certain types of claims, including claims for increase,
original compensation claims, original pension claims, and dependency
verification. The required development also includes providing an
evidence summary and medical index, and return of the claims
development package electronically in OCR readable format (paperless)
for decision by VBA. The contractor performs claims development
activities only--all claims decisions remain the responsibility of VA
employees. Having the contractor gather the needed evidence will allow
VBA claims processors to focus on review of the claims and increasing
decision output. If full contract volume is achieved, ACS will develop
300,000 claims.
Additional components to the contract include:
Veteran self-service communications plan/outreach for
increased enrollment in eBenefits (level II) self-service portal--
target goal is 805,000 new enrollees.
Process improvement (Lean Six Sigma based) capture and
presentation to VBA stakeholder/leadership.
Transformational training--2,400 hours of process
improvement/change management training for field staff.
These additional services complement our plan to reduce the
backlog.
Question 11: According to the National Academy of Public
Administration's white paper entitled ``Veterans Health Fee Care
Program,'' dated September 2011, ``VA's Fee Care Program expenditures
have grown 275 percent since [FY] 2005. There are now approximately
2400 Full Time Employees (FTEs) working in the program. Paid claims
rose from $3 billion in FY 2008 to $4.4 billion in FY 2010 (46 percent
increase), while the number of unique patients served increased from
820,000 to 952,000 (16%) in the same period. NAPA also reported that in
``recent years, Fee Care has been increasingly used to meet patient
wait-time standards. That is, when a medical service cannot be provided
at a VA facility within performance standards, VA Medical Centers
(VAMCs) often use the Fee Care Program.'' Please detail why paid claims
increased 46 percent while the number of unique patients served
increased only 16 percent. How much of this 46 percent increase in paid
claims is attributable to VA attempts to meet patient wait-time
performance standards? Please provide the Committee with wait-time
reports from FY 2008 to the present, and a detailed breakdown, by VISN,
of Fee Care Program expenditures since FY 2008 and the amount expended,
by VISN, since FY 2008 of Fee Care Program expenditures utilized to
meet wait-time performance standards.
Response: Numerous changes have occurred over this time frame to
include new clinical treatment/technology tools, our aging population
(requiring complex specialty treatment), additional services for
returning OEF/OIF/OND Veterans, expanded authority for payment of
emergency claims, expanded initiatives within the Women's Health arena
including coverage for newborn care (up to 7 days), a significant
number of initiatives to improve claims processing timeliness, and
other key initiatives to assure key controls are in place to manage and
monitor the program. Payment files likely include prior year payments
and are not always correlated to patients treated. VA's desire to
provide Veteran centric care closer to home (such as our Rural Health
initiatives) and increased use of home health services are focused on
providing the right care in the right location. These efforts to
provide Veteran centric care result in additional Non-VA costs. VA is
analyzing options to assure the right care is provided at the right
time--standardization of the initial decision points to utilize non-VA
care is a major initiative to improve this area.
In addition, VA saw increases in billed charges during this time
frame. In certain areas, VA addressed this issue by developing
contracts to stabilize pricing. In addition, VA recently published
regulations that permit VA in certain situations to utilize the same
payment methodology as Medicare, resulting in significant cost
avoidance in this program.
Please see spreadsheets listed as Attachment 2 for more details on
Fee Data and Attachment 3 for more details on Wait Times.
Question 12: The NAPA white paper recommended that substantial
changes be made in the VA Fee Care Program and that a strategic change
management plan be developed as quickly as possible. Does VA agree that
substantial changes should be made in the Fee Care Program? Is the VA
developing, or planning on developing a strategic change management
plan? What is the specific timetable for changes that have been
identified as needed in the Fee Care Program to be implemented?
Response: VA does agree that substantial changes are needed in the
health care claims processing systems as pointed out by NAPA. A work
group, formed and represented by senior members of VHA, is in place to
study the issues, identify and recommend a solution to health care
claims processing for VA. The complexities of such a significant
organizational change will likely require approximately 3 to 5 years
for full implementation. VA intends to have a plan in place by mid-year
2012.
This work group is charged to deliver:
Recommendations on deployment of a regional/central
approach to the back office claims processing functions to support the
Non-VA Care Program (Fee Care Program);
A tentative deployment schedule, to include pilot
assessment;
An assessment of capital investment requirements; and
Recommendations for additional teams for research/
analysis, planning, and implementation of selected solutions.
Question 13: The NAPA white paper states that ``[g]iven the
significant organizational productivity challenges with the Fee Care
Program, VA has a limited understanding of the services it is procuring
through its program and their costs. The Fee Care Program does not
appear to have been well managed at any level of VA. VA provides
limited VISN-wide executive oversight of its purchased care program,
and the program lacks clearly defined operational objectives or goals,
and it is not guided by a coherent strategy for managing program
expenditures.'' Does VA believe the Fee Care Program has been well
managed? Does VA believe that there is sufficient level of VISN-wide
executive oversight? Does VA believe that the Fee Care Program has
clearly defined operational objectives and goals and a coherent
strategy for managing program expenditures?
Response: VA acknowledges the management and oversight of the Fee
Care program could be improved and is actively pursuing program
changes, IT solutions, and other initiatives to improve the oversight
of the program. However VA believes the Fee Care Program does have
clearly defined operational objectives and goals established at the
enterprise level and several of these improvements are included below.
Program Improvement Initiatives:
Non-VA Care Coordination;
Use of Contracts to Stabilize or Reduce Pricing;
Internal Controls/Audit tools;
Program Integrity/Fraud, Waste, Abuse training and
technology; and
External audits to assure positive results from
programmatic changes.
Technology Enhancements
Implementing key technology changes to reduce payment
errors and address key audit findings; expected delivery end of 2012.
Question 14: The NAPA white paper states that the ``Chief Business
Office estimates the error rates (that is, erroneous payments) at 12
percent per year, which equates to approximately $500 million in FY
2011. By contrast, TRICARE has a reported error rate of 9.42 percent.
Productivity varies across operating sites by nearly ten folds between
the most and least efficient sites [footnotes omitted].'' Please
provide a detailed explanation to the Committee as to why the VA
experiences such a high error rate compared to TRICARE and why there is
a divergence across the VA system in the level of error rates. What
policies or procedures are currently in place, or have been in place
previously, that contribute to this high error rate and divergence, and
what specific policy and procedural steps is the VA taking to address
this high error rate and divergence?
Response: The high payment error rate in the Non-VA Care program
can be attributed to the manual nature of the technology within a
decentralized claims processing system that is the root cause for many
errors. The payment program has more than 2,000 claims processors
distributed across 153 medical centers. Given such a working
environment, with multiple decentralized software products in place and
technology that relies on manual payment processing, significant
changes are being implemented to resolve these issues.
VA is currently pursuing technology changes that will address the
top payment errors identified with our Improper Payments Elimination
and Recovery Act IPERA and other audits conducted in FY 2011. These
technology changes are expected to be released by the end of 2012.
Question 15: During the hearing, VA stated that it was going to
roll-out Project HERO nationwide. What are the detailed policy
rationales behind implementing this program nationwide? Please provide
the Committee with a detailed plan on the proposed nationwide roll-out
including detailed time frames, benchmarks, and costs associated with
the roll-out. In addition, please provide the Committee with any
detailed cost studies that have been prepared estimating any cost-
savings, by VISN, that VA will achieve with Project HERO. If VA has not
prepared detailed cost estimates, please provide the Committee with
estimates regarding these proposed savings.
The Project HERO contracts with Delta Dental Federal Government
Programs and Humana Veteran Health care Services are scheduled to end
September 30, 2012. Once those contracts are closed, Project HERO will
end.
Detailed cost studies/expenditures for health care services through
Project HERO have been completed for fiscal years (FY) 2009-2011.
Project HERO has realized a net cost-avoidance of $24,380,746 in the
three measured fiscal years. Cost savings, by FY, are noted below:
----------------------------------------------------------------------------------------------------------------
FY09 FY10 FY11 Totals
----------------------------------------------------------------------------------------------------------------
Totals $1,864,834 $16,197,039 $6,318,873 $24,380,746
----------------------------------------------------------------------------------------------------------------
VHA is leveraging the lessons learned from Project HERO and other
pilot programs to develop requirements for new competitively awarded
contracts. The effort to create these contracts, Patient-Centered
Community Care, is focused on creating centrally supported, regional
health care contracts available throughout the VHA. The goal is to
provide Veterans coordinated, timely access to high quality care from a
comprehensive network of high quality non-VA providers. Patient-
Centered Community Care is still in the requirements development stage.
An Independent Government Cost Estimate (IGCE) will be prepared as
requirements are known. We are confident that within the cost of the
program we will be able to assure high quality, access, and timely
return of medical documentation not always seen in traditional Non-VA
Care (Fee) programs.
The schedule for development of the contracting vehicles,
solicitation, evaluation, award, and implementation are as follows:
Requirements development: August 2011--January 2012
RFP Development, review and finalization: December 2011--April
2012
RFP Release: May 2012
Evaluations: June 2012--July 2012
Award of new contracts: September 2012
Implementation/Start up: September 2012--February 2013
Honorable Bob Filner, Question 8 Attachment 1
OIG Recommendation 5: ``. . . that the Under Secretary for Health
establish procedures to monitor performance measures to determine the
impact of rural health care funding on improving access and quality of
care for rural Veterans.''
Actions Taken: ORH has put in place a robust system of policies and
procedures to monitor projects and their costs and measure performance
for all funded projects and activities. To ensure appropriate
monitoring, VA staff regularly visits Veterans Integrated Service
Networks (VISN) to validate project activity and formally measure
project status quarterly or as needed. ORH requires performance and
impact data in the funding request application, and the Office assesses
this required data in each application submission. As a result of this
process, ORH evaluated the measurement and performance data and
information when reviewing and approving rural health initiatives for
FY 2012 project funding, to determine project performance and impact on
rural Veterans. Based on these data, ORH was able to identify the
greatest rural health needs and support projects with the greatest
impact on Veterans.
In March 2011, ORH completed implementation of the Microsoft Access
database and project monitoring system. The monitoring system uses a
Microsoft Excel spreadsheet to collect and track project activity,
progress, and performance. Because both tools have strengths and
weaknesses, ORH continues to improve and develop them to ensure
efficiency and effectiveness of use and response to customer needs. An
electronic database system is needed to improve efficiency of
measurement and performance collection, analysis, and reporting.
ORH has defined quality measures and applied them to all projects.
The measures are dynamic and change over time to ensure accurate
demonstration of performance and accountability. Some measurement data
are difficult to access (e.g., the number of Native American unique
patients seen for treatment) because they are self reported and often
unreliable; other data are difficult to collect because specific
tracking systems have not been developed yet in VA. Also, some clinical
measures are not conducive to data collection and tracking currently at
the CBOC or rural health clinic level. In response to these challenges,
ORH is working with VA's Offices of Quality Management and Business
Intelligence to establish and implement this capability. In addition,
at this time, VISN Rural Consultants (VRC) and local project leaders
manually report project-specific data.
To ensure accountability for funded projects, equipment, and
programs, ORH Program Analysts are making site visits to the VISNs to
evaluate project and program performance.
In coordination with the VHA Support Service Center (VSSC), ORH
completed and deployed a Rural Health Briefing Book in April 2011. The
following month, ORH deployed a Rural Health Dashboard in May 2011.
These new information resources provide timely and relevant information
on socio-demographics, service use, diagnosis, clinical quality,
outcomes, and cost data about over three million Veterans living in
rural and highly rural areas.
Quality Measurement is an ongoing process. Further plans for action
steps and follow-up include the following:
1. Ensure VISNs and VRHRCs report quarterly measures and
accomplishment of any relevant milestones.
2. Develop the ORH Microsoft Access database output reports by
December 31, 2011.
3. Evaluate data quality each quarter.
4. Establish a mechanism to over-sample patient satisfaction data
in rural and highly rural areas by December 31, 2011.
5. Continue to develop standardized measures for all VISN projects
and align them with national program measures when possible.
OIG RECOMMENDATION 3:
OIG Recommendation 3: ``. . . that the Under Secretary for Health
implement an effective communication plan to effectively coordinate and
collaborate with key rural health care stakeholders in the use of rural
health care funds.''
Actions Taken: ORH has fully complied with the IG recommendation to
implement an effective communication plan.
For internal stakeholders and partners, ORH leadership maintains:
1) bi-monthly teleconferences with leadership of the Veterans Rural
Health Resource Centers (VRHRC); 2) monthly calls with VRCs; and 3)
weekly meetings with ORH VA Central Office (VACO) staff. Minutes are
taken and distributed. In addition, ORH hosts a face-to-face meeting
with VRCs, VRHRC Leadership, and VACO staff twice a year, most recently
in Iowa City, Iowa, on September 12-14, 2011.
For both external and internal stakeholders, ORH staff develops
content for and manages both an Internet and Intranet Web site,
publishes a quarterly newsletter featuring ORH-sponsored initiatives
and demonstration projects, publishes a monthly fact sheet highlighting
recently published research studies and policies relevant to rural
Veterans' health issues, and utilizes Webinars to help educate VA
health care providers. In addition, ORH staff create videos
demonstrating the impact of ORH-sponsored programs on health care for
rural Veterans and develop policy briefs based on evaluations of ORH-
funded programs.
The latest addition to the ORH Web site is a new section devoted to
the ORH Veterans Rural Health Resource Centers. These pages include
information on each Center's focus, initiatives, leadership, and staff.
The most recent newsletter was published in July 2011 and focuses on
ORH-sponsored outreach programs for rural Veterans. It can be accessed
online at: http://www.ruralhealth.va.gov/news3/
ORH_The_Rural_Connection_Newsletter.asp.
ORH distributes quarterly newsletters via an e-mail contact list,
which resides in the ORH Contacts Database (see below). The most recent
ORH Fact Sheet features up-to-date statistics on the number of rural
Veterans enrolled in VA's health care system, the number of Veterans
impacted by ORH projects, and the percentage of rural Veterans who
served in Operation Enduring Freedom/Operation Iraqi Freedom/Operation
New Dawn. An additional nine Fact Sheets are available on the ORH Web
site for download. Archived ORH newsletters and fact sheets are
available on the ORH Web site for download at: http://
www.ruralhealth.va.gov/publications.asphttp://www.ruralhealth.va.gov/
publications.asp.
Finally, ORH has created five videos about ORH and ORH-sponsored
initiatives and how they impact rural Veterans. These are currently
available on the ORH Web site for viewing at: http://
www.ruralhealth.va.gov/index.asp. ORH distributed these videos at the
National Rural Health Association (NRHA) annual meeting in Austin,
Texas, as well as at the VHA Open House in New Orleans, Louisiana, this
past August 2011.
ORH has used its Contacts Database to send several targeted
messages to key stakeholders, who can in turn forward or print these
messages for other interested parties. For instance, ORH sends e-mails
to staff at rural VA CBOCs and Outreach Clinics. We suggest they print
out copies of the ORH newsletter for Veterans to read while in the
waiting area. Stakeholder groups in the database include:
the general public
Veterans Service Organizations (e.g., Disabled American
Veterans, Paralyzed Veterans of America, etc.)
Veterans Service Offices (state and local)
Rural Health Program Offices (Federal, state, and local)
Rural Health Associations (National and state)
Other Federal agencies (e.g., Health Resources and
Services Administration, U.S. Department of Education, etc.)
Academic institutions
Representatives and Senators
Native American Tribal organizations
VA program offices and facilities, including:
VISN Offices
VA Medical Centers
VA CBOCs
Vet Centers
Office of Public and Intergovernmental Affairs
My HealtheVet staff
All ORH staff (VACO, VRHRCs, VRCs)
Veterans Rural Health Advisory Committee
ORH continually updates and supplements contact data, and there are
currently 1,466 active stakeholder e-mails sent each quarter, an
increase from the initial 1,017. In late March 2011, we added a
subscription function to the ORH Newsletter Web page, which has
resulted in an additional 140 contacts. We continue to work to identify
key stakeholders who should be informed about ORH initiatives and
improvements to access and quality of care for rural Veterans.
Use of Social Media: ORH staff are utilizing social media to
provide even greater outreach and communication. For example, ORH has
used the VA blog ``VAntage Point'' (http://www.blogs.va.gov/VAntage/)
twice this year to discuss VA rural health initiatives and impacts. The
first blog post was focused on increasing access to rural Veterans
(April 5, 2011), and the second was an update on the work of ORH (June
28, 2011).
Rural health-related posts have appeared on the VHA Facebook page
five times since February 2011 under the following titles:
VA Reaching Out to Rural Veterans With Telehealth (August
19, 2011)
VA's Mobile Clinics--``Grillin' on the River'' Video
(July 3, 2011)
Rural Health: Exchanging Information--Health Care (April
23, 2011)
Rural Health: A Health Frontier (March 28, 2011)
``The Rural Connection'' Newsletter (February 2, 2011)
Rural health-related posts have appeared on the VA Facebook page
(www.facebook.com/VeteransAffairs) six times since February 2010 under
the following titles:
Rural Veterans and the Tyranny of Distance (August 6,
2011)
VA Reaches Out to Tribal Governments (July 5, 2010)
Update: VA's Office of Rural Health--Mary Beth Skupien
(June 29, 2011) (also on the VA Blog, VAntage Point, http://
www.blogs.va.gov/VAntage/)
Salem VAMC Holds Ribbon Cutting Ceremony for Wytheville,
VA. CBOC (June 20, 2011)
VA Secretary Learns What''Rural'' Means for Alaska Vets
(May 31, 2011)
Reaching Out to Tribal Governments (February 1, 2010)
VA has also begun using Twitter to inform others about ORH. The
following rural health-related ``tweets'' have been distributed through
VA's Twitter account (@DeptVetAffairs) since October 1, 2010:
Rural Veterans and the Tyranny of Distance: http://t.co/
akpBxM9 (August 8, 2011--Re-tweeted by 5 others).
VA is taking measures to improve health care for Vets in
rural areas. Learn more: http://t.co/qPZjNu9 (July 1, 2011--Re-tweeted
by 22 others).
Guest post on VAntage Point: Increasing Access: Reaching
Out to Rural Veterans http://go.usa.gov/TlM (April 6, 2011--Re-tweeted
by 4 others).
If you live in a rural area & it's a pain for you to
reach the nearest VA facility, Project ARCH will be welcome news.
http://go.usa.gov/agz (October 9, 2010--Re-tweeted by 18 others).
ORH Communications--FY 2012
For FY 2012, communications plans include regular ``IN THE
SPOTLIGHT: Rural Health Publications'' e-mails, as well as special
edition e-mails, such as ``Bringing Ethics Consultation Services to
Rural Veterans.'' ORH will continue to use the social media tools
outlined above.
ORH will develop and implement a Project Access Received Closer to
Home (ARCH) Communication Plan by December 2011 and will have a booth
at the National Rural Health Association (NRHA) 2012 Annual Rural
Health Conference in Denver, Colorado, April 17-20, 2012.
OIG RECOMMENDATION 6:
OIG Recommendation 6: ``. . . that the Under Secretary for Health
reassess the rural health initiatives approved for funding by Office of
Rural Health in their fiscal year 2012 budget to align planned use of
resources to their greatest rural health needs.''
Actions Taken: ORH has reassessed the rural health initiatives
requested in the FY 2012 budget to align planned use of resources to
the greatest rural health needs.
(1) As discussed previously, ORH has instituted a robust system of
measurement and performance monitoring for the budget and for all
projects and activities it funds.
(2) ORH has completed needs assessments for health care and
geographic areas and evaluated and trended them for all VA VISNs (see
trend reports below). ORH has used this information to identify the
greatest rural health needs and posted it on the ORH SharePoint site,
and will continue to use it throughout the year for planning and
program evaluation purposes. During the September 2011 ORH bi-annual
meeting, ORH staff and leaders evaluated the needs assessment process
to determine how it might be improved in the future.
(3) From the geographic needs assessment, ORH has developed a
detailed national geographic map and used it to assist ORH and VISNs
with aligning their use of resources with identified health care needs.
The map demonstrates that 96.5 percent of all VA enrollees are within
60 minutes travel time to VHA primary care services. It also shows, by
VISN, the percent of enrollee coverage meeting FY 2010 access standards
(see attachment below).
(4) In FY 2011, ORH has funded projects and activities identified
as priorities, including the Secretary's initiatives to address women
and homeless Veterans, and through priorities established by the ORH
Advisory Committee and the ORH Strategic Plan. This Strategic Plan
addresses efforts to improve outreach, mental health, telehealth, and
recruitment and retention of providers into rural and highly rural
areas. ORH has completed the ``refresh'' of its Strategic Plan and
finalized it at the end of FY 2011.
(5) Finally, ORH completed several Veteran and community agency
focus groups in FY 2011 to help determine the greatest needs for
funding. The Western and Central Region VRHRCs are continuing outreach
activities targeting rural and highly rural Veterans and have planned
further focus groups to assess the needs of Veterans within the
community-at-large for both enrolled and non-enrolled Veterans.
OFFICE OF RURAL HEALTH STRATEGIC PLAN, FY 2012
Overview: The Senate Appropriations Committee recommended that VA's
reassessment take into consideration both geographic and specific
health needs and encourages the Department to compile Veterans' records
from multiple systems to create a single view of Veterans and the
geographic area in which they live.
Actions Taken: ORH has compiled Veterans' records from multiple
systems to create a single view of Veterans and the geographic areas in
which they live. This profile of rural Veterans helped VA target
funding to programs for FY 2012. In FY 2011, ORH implemented a plan to
meet with and collect data and information directly from Veterans in as
many geographic locations, systems, and regions nationally as possible.
ORH leadership and staff have participated in a variety of events
(including town hall meetings, listening sessions, outreach events, and
round table discussions) with Veterans, to increase awareness and
understanding of Veterans' needs, issues, and perceptions. To obtain
more information, ORH invited Veterans to participate in the health
care needs assessment processes by contributing ideas at informational
meetings, providing data on comment cards, and answering satisfaction
and perception questionnaires.
In 2011, the ORH Director and staff have participated in town hall
events and listening sessions in Montana, Texas, South Dakota, Florida,
and Maine. The VRHRCs in Eastern and Central regions have provided
outreach events and have held numerous Veterans' focus groups in Utah,
California, Nevada, Iowa, and Illinois, and more are planned. ORH has
integrated and evaluated information from the geographic and health
care needs assessments by identifying local, regional, and national
trends and connecting these findings with the Secretary's initiatives,
the ORH Advisory Committee recommendations, and the ORH strategic
priorities. All of these sources of information help ORH determine as
objectively as possible the areas of greatest need for funding. During
the FY 2012 proposal review sessions, all reviewers were required to
utilize findings from the sources to help guide them in making funding
decisions in an informed and effective way.
ORH has refreshed its Strategic Plan with details for all rural
health activities in FY 2012. The full plan is embedded. A summary of
the Strategic Plan follows.
Prior studies indicate that Veterans who live in rural settings
have greater health care needs than their urban counterparts.
Specifically, compared to urban Veterans, rural Veterans have lower
health-related quality-of-life scores and experience a higher
prevalence of physical illness. While prevalence of most psychiatric
disorders is lower for rural Veterans compared to urban Veterans, rural
Veterans with psychiatric disorders are sicker as measured by lower
health-related quality-of-life. These differences in health-related
quality-of-life scores, which equate to lower self-rated health status
among rural dwelling Veterans, are substantial, clinically meaningful,
and associated with increased demand for health care services. Despite
greater health care needs, rural Veterans are less likely to access
health services for both physical and mental illness, either through VA
or the private sector. In particular, rural Veterans have lower access
to care for chronic conditions such as hypertension and post-traumatic
stress disorder.
To ensure that ORH programs and initiatives are meeting the health
care needs of rural Veterans, ORH used several different sources to
develop a profile on rural Veterans. First, ORH conducted a
geographical needs assessment to determine VA facility gaps in rural
areas. It then conducted a clinical needs assessment to better
understand unmet clinical needs. ORH leadership has participated in
numerous town hall meetings and listening sessions to better understand
the perspective of rural Veterans on accessing VA health care and has
met with the Veterans Rural Health Advisory Committee (VRHAC) on 10
occasions to discuss its recommendations on how to improve the ORH
program. This information, together with the Secretary's priorities on
improving care for women, Native American, and homeless Veterans,
provided the framework for the refresh of the ORH 2012 Strategic Plan.
In FY 2011, ORH formed a committee of internal and external
stakeholders to refresh the ORH Strategic Plan for FY 2012 through FY
2014. Committee members represented the following groups: the VRHAC,
VRCs, the VRHRCs, ORH Central Office, VA medical center directors, the
Office of Telehealth Services, the Office of Mental Health Services,
the Office of Geriatrics and Extended Care, the Utah State VA Office,
VA's Office of Health Informatics, VA's Office of Academic
Affiliations, VA's Employee Education System, and VA's Health care
Retention and Recruitment Office. Six workgroups were created from the
Committee to refresh the initiatives and action items associated with
the strategic goals of ORH. ORH disseminated the draft compilation of
all recommendations to a broad spectrum of VA field and program offices
including all VISN directors and VISN planners.
Veterans Health Administration
November 2011
Honorable Bob Filner, Question 11 Attachment 2,
Fee Data Disbursed Amounts
Filner Question 11 Attachment 2 Fee Data Disbursed Amounts
All Payment
Locations FY08 FY09 FY10 FY11
$3,028,962,367 $3,818,112,936 $4,416,267,157 $4,561,833,762
V01 $139,641,704 $168,825,720 $188,174,706 $169,174,226
V02 $51,489,344 $69,644,612 $81,036,946 $65,054,534
V03 $45,040,208 $51,824,172 $52,159,050 $49,001,434
V04 $150,207,208 $194,650,669 $209,107,662 $213,771,370
V05 $51,766,320 $69,997,271 $67,925,599 $66,693,619
V06 $171,051,337 $227,459,348 $262,310,696 $244,605,261
V07 $173,436,112 $216,977,473 $316,154,124 $345,743,207
V08 $271,965,844 $299,863,068 $372,462,614 $413,079,860
V09 $159,000,541 $203,506,465 $215,568,620 $210,201,823
V10 $122,347,224 $167,294,344 $237,650,491 $172,680,508
V11 $109,686,203 $153,285,222 $163,211,029 $145,382,413
V12 $84,189,137 $108,029,431 $128,735,652 $131,510,900
V15 $161,454,995 $200,388,460 $209,312,890 $252,454,316
V16 $229,161,049 $289,354,762 $361,412,448 $328,289,259
V17 $111,111,520 $167,465,263 $233,663,473 $252,076,371
V18 $162,456,908 $205,022,885 $222,857,447 $242,174,849
V19 $112,950,006 $137,654,118 $163,636,814 $174,346,824
V20 $196,148,762 $219,976,592 $231,026,120 $297,091,637
V21 $166,685,471 $194,384,255 $210,417,304 $254,719,719
V22 $183,267,837 $214,861,462 $250,646,232 $239,626,188
V23 $175,904,636 $257,647,345 $238,797,237 $294,155,442
Hon. Bob Filner, Question 11 Attachment 3, Wait Times
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FY 2011 Primary Care Specialty Care
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# of Pt Total # of Pt # of Pt Total % of Pt
VISN Patient Appts <=14 Patient Appts <=14 Appts <=14 Patient Appts <=14
Category Days Appts Days Days Appts Days
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1 NewPts Desire 23,234 25,015 92.90% 129,285 143,062 90.40%
Dt
----------------------------------------------------------------------------------------------------------------
1 Estab Pts 470,113 488,974 96.10% 890,986 928,656 95.90%
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2 New Pts 12,946 14,810 87.40% 67,054 75,663 88.60%
Desire Dt
----------------------------------------------------------------------------------------------------------------
2 Estab Pts 259,501 277,762 93.40% 490,215 507,014 96.70%
----------------------------------------------------------------------------------------------------------------
3 New Pts 18,431 22,497 81.90% 120,066 136,261 88.10%
Desire Dt
----------------------------------------------------------------------------------------------------------------
3 Estab Pts 269,128 300,769 89.50% 889,940 943,243 94.30%
----------------------------------------------------------------------------------------------------------------
4 New Pts 27,999 33,763 82.90% 147,671 159,921 92.30%
Desire Dt
----------------------------------------------------------------------------------------------------------------
4 Estab Pts 549,032 568,447 96.60% 967,192 999,592 96.80%
----------------------------------------------------------------------------------------------------------------
5 New Pts 15,767 16,715 94.30% 80,652 83,049 97.10%
Desire Dt
----------------------------------------------------------------------------------------------------------------
5 Estab Pts 233,811 243,464 96.00% 483,563 495,184 97.70%
----------------------------------------------------------------------------------------------------------------
6 New Pts 39,198 42,954 91.30% 192,272 202,929 94.70%
Desire Dt
----------------------------------------------------------------------------------------------------------------
6 Estab Pts 606,879 638,404 95.10% 998,535 1,030,376 96.90%
----------------------------------------------------------------------------------------------------------------
7 New Pts 47,163 53,223 88.60% 183,792 211,303 87.00%
Desire Dt
----------------------------------------------------------------------------------------------------------------
7 Estab Pts 648,931 693,161 93.60% 1,060,181 1,122,361 94.50%
----------------------------------------------------------------------------------------------------------------
8 New Pts 58,287 68,146 85.50% 303,660 356,929 85.10%
Desire Dt
----------------------------------------------------------------------------------------------------------------
8 Estab Pts 1,111,542 1,213,968 91.60% 1,923,540 2,055,938 93.60%
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9 New Pts 27,390 32,684 83.80% 151,091 169,636 89.10%
Desire Dt
----------------------------------------------------------------------------------------------------------------
9 Estab Pts 544,176 576,678 94.40% 931,626 976,146 95.40%
----------------------------------------------------------------------------------------------------------------
10 New Pts 27,536 29,691 92.70% 142,814 149,006 95.80%
Desire Dt
----------------------------------------------------------------------------------------------------------------
10 Estab Pts 516,402 533,653 96.80% 848,878 870,001 97.60%
----------------------------------------------------------------------------------------------------------------
11 New Pts 27,680 35,789 77.30% 137,279 155,688 88.20%
Desire Dt
----------------------------------------------------------------------------------------------------------------
11 Estab Pts 455,037 492,124 92.50% 774,831 812,512 95.40%
----------------------------------------------------------------------------------------------------------------
12 New Pts 23,320 24,540 95.00% 135,313 143,905 94.00%
Desire Dt
----------------------------------------------------------------------------------------------------------------
12 Estab Pts 447,364 458,969 97.50% 927,229 951,779 97.40%
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15 New Pts 25,037 26,990 92.80% 118,168 137,322 86.10%
Desire Dt
----------------------------------------------------------------------------------------------------------------
15 Estab Pts 468,302 486,604 96.20% 714,178 745,270 95.80%
----------------------------------------------------------------------------------------------------------------
16 New Pts 52,572 55,686 94.40% 240,270 260,906 92.10%
Desire Dt
----------------------------------------------------------------------------------------------------------------
16 Estab Pts 871,964 904,590 96.40% 1,403,157 1,463,219 95.90%
----------------------------------------------------------------------------------------------------------------
17 New Pts 41,198 44,087 93.40% 150,631 160,046 94.10%
Desire Dt
----------------------------------------------------------------------------------------------------------------
17 Estab Pts 589,057 609,556 96.60% 829,917 852,195 97.40%
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18 New Pts 25,981 35,362 73.50% 114,587 135,127 84.80%
Desire Dt
----------------------------------------------------------------------------------------------------------------
18 Estab Pts 450,535 507,013 88.90% 709,936 759,101 93.50%
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19 New Pts 21,601 23,735 91.00% 83,828 88,808 94.40%
Desire Dt
----------------------------------------------------------------------------------------------------------------
19 Estab Pts 332,808 347,836 95.70% 525,300 540,463 97.20%
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20 New Pts 32,842 39,647 82.80% 116,602 136,966 85.10%
Desire Dt
----------------------------------------------------------------------------------------------------------------
20 Estab Pts 419,833 455,675 92.10% 675,126 723,520 93.30%
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21 New Pts 30,502 35,777 85.30% 135,335 154,310 87.70%
Desire Dt
----------------------------------------------------------------------------------------------------------------
21 Estab Pts 419,213 456,712 91.80% 796,658 849,194 93.80%
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22 New Pts 40,367 46,893 86.10% 176,835 196,906 89.80%
Desire Dt
----------------------------------------------------------------------------------------------------------------
22 Estab Pts 577,499 606,777 95.20% 1,056,806 1,101,986 95.90%
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23 New Pts 29,963 34,723 86.30% 131,454 157,427 83.50%
Desire Dt
----------------------------------------------------------------------------------------------------------------
23 Estab Pts 515,346 547,931 94.10% 852,946 908,992 93.80%
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