[Senate Hearing 112-]
[From the U.S. Government Publishing Office]



 
   MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2012

                              ----------                              


                        THURSDAY, MARCH 31, 2011

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:05 a.m. in room SD-124, Dirksen 
Senate Office Building, Hon. Tim Johnson (chairman) presiding.
    Present: Senators Johnson, Inouye, Reed, Nelson, Tester, 
Kirk, Murkowski, Blunt, and Hoeven.

                     DEPARTMENT OF VETERANS AFFAIRS

STATEMENT OF HON. ERIC K. SHINSEKI, SECRETARY
ACCOMPANIED BY:
        HON. ROBERT PETZEL, M.D., UNDER SECRETARY FOR HEALTH
        MICHAEL WALCOFF, ACTING UNDER SECRETARY FOR BENEFITS
        STEVE MURO, ACTING UNDER SECRETARY FOR MEMORIAL AFFAIRS
        HON. ROGER BAKER, ASSISTANT SECRETARY FOR INFORMATION 
            TECHNOLOGY
        TODD GRAMS, ACTING ASSISTANT SECRETARY FOR MANAGEMENT 
            TECHNOLOGY


                opening statement of senator tim johnson


    Senator Johnson. Good morning. The hearing will come to 
order.
    We meet today to review the President's fiscal year 2012 
budget request and fiscal year 2013 advanced appropriation 
request for the Department of Veterans Affairs (VA).
    Secretary Shinseki, I welcome you and your colleagues, and 
I thank you for appearing before our subcommittee.
    I also welcome Senator Kirk as the new ranking member, and 
I look forward to working with him and with all the new and 
returning members of the subcommittee as we move the fiscal 
year 2012 budget process forward.
    Before getting started with my opening statement, I want to 
recognize the chairman of the full Committee and the most 
senior member of the subcommittee, Senator Inouye, for any 
opening remarks he may have.


                 statement of senator daniel k. inouye


    Senator Inouye. All right. Thank you very much, Mr. 
Chairman.
    I am here to acknowledge and commend the work of the 
Secretary of VA because while bringing about a new culture of 
efficiency, he has been able to set up a system wherein 
hospitals are now working with universities and major 
hospitals. Men and women who we consider to be hopeless cases 
are now hopefully getting up--comatose patients. I have seen 
those men and women who are now benefiting from the work of 
this Department in new prosthetic appliances, and that is a new 
specialty on my part.
    What you have achieved here is almost miraculous, and I 
want to commend you.
    I am also here for a personal reason. I have the pride of 
having nominated General Eric Shinseki when I was in the House 
of Representatives. That is a long time ago. That makes me 
ancient. And here he is now the head of VA and former Chief of 
the Staff of the Army.
    I wish I could stay here, General Shinseki, but as you 
know, we are trying to resolve the budget, if it goes well, we 
will do it. So if you will excuse me, sir, and Mr. Chairman, 
you will excuse me. Thank you very much.
    Senator Johnson. Thank you, Mr. Chairman.
    In order to reserve the majority of the time for questions, 
our procedure will be to have opening statements by the 
chairman and ranking member, followed by an opening statement 
from the Secretary. We will limit the first round of questions 
to 6 minutes per member, but we can have additional rounds 
should we need them.
    The overall fiscal year 2012 budget--discretionary budget 
request for the VA totals $58.8 billion, $1.8 billion more than 
last year's request. Additionally, the submission also includes 
a fiscal year 2013 medical care request of $52.5 billion.
    Mr. Secretary, I would note that outside of the increase 
for medical care in the fiscal year 2012 budget submission, 
that the Department's request for all other functions is down, 
a combined $859 million from last year's request.
    I understand and appreciate that as budgets get tighter, 
Departments are being asked to do more with less. But I want to 
make sure that these cuts will not erode services or diminish 
the quality of care that veterans receive.
    In particular, I am concerned about the 25-percent 
reduction in the request for the construction and facilities 
accounts, and the impact this may have on the adequacy of VA 
medical facilities and healthcare deliveries in future years.
    VA has a $9 billion backlog in repairs and improvements to 
existing buildings, and I am concerned that this budget does 
not adequately address that requirement.
    Before I turn to my ranking member, I want to point out 
that the VA is estimating that the average wait time for 
disability claims will reach 230 days in fiscal year 2012. This 
is totally unacceptable. This subcommittee has provided the VA 
with significant resources over the past several years, 
including an additional $460 million in the current continuing 
resolution for fiscal year 2011, which the Department said was 
needed to reduce the wait time and backlog. Yet the problem is 
getting worse, not better.
    I understand that the decision on Agent Orange claims and 
the complexity of new claims have added to the problem, but the 
VA needs to come up with a comprehensive plan to solve this 
problem sooner rather than later.
    I will have specific questions on these and other topics 
after your testimony. So I will end my opening statement here.
    Senator Kirk, welcome, and do you have an opening statement 
that you would like to make?


                     statement of senator mark kirk


    Senator Kirk. Thank you, Mr. Chairman, and thank you for 
having me to be a new member of this subcommittee. And, Senator 
Reed, it's an honor to be serving with you, especially after 
your nasty habit of jumping out of perfectly good airplanes on 
behalf of the----
    Senator Reed. I was just trying to emulate the Secretary.
    Senator Kirk. That's right.
    Mr. Chairman, I really look forward to working with you, 
Tina, Chairman Culberson, and Tim, and especially Dennis 
Balkam, Ben Hammond, Patrick Magnusson, and you, Mr. Secretary.
    After Operation Iraqi Freedom, you have been very much a 
personal hero of mine, and I particularly have been proud of 
your work on the Stryker, and in a reserve capacity, I was a 
customer of that vehicle. And I want to touch on Stryker later 
during this hearing because I think its philosophy has bearing 
on the Department.
    Now, I have served in the Navy Reserve for 23 years, and on 
top of that, 10 years in the Congress. My major work with the 
VA was regarding the North Chicago Veterans Medical Care 
Center, which was the first ever to truly combine with a 
military hospital, Great Lakes. And that combination has led to 
a number of groundbreaking precedents, to be topped off by it 
being named after the Commander of Apollo 13, Captain James A. 
Lovell.
    We have about 780,000 veterans in Illinois, 5 Senators, 26 
clinics, 12 veteran Senators. And I am looking at your budget 
now, and it is a hefty sum, needed for our veterans, $181 
billion. We are aware that 40 cents of every Federal $1 is 
borrowed. Now, that would mean $72 billion of this money is 
borrowed, one-half of it from abroad. And so, the increased 
scrutiny that that has given us a chance to look at your 
budget. I know that you are at about $5.7 billion more than 
last year.
    Key issues for me are medical records, and the Stryker 
model is the model that I hope we follow here on this 
subcommittee and in the Department--no new invention; 
commercial-off-the-shelf only, with a complete inability for 
beltway bandits and propeller heads to get into your 
decisionmaking cycle and procurement and try to invent 
something new that in the end will be too ambitious, too 
expensive, and will fail during your operational time with us. 
The Stryker model was to bring in a project and complete it 
within your secretary-ship, and my hope is that we are able to 
do that with medical records of inventing as little as 
possible.
    On the care provided to veterans, I first was concerned 
about incidents in my own State of Marion, Illinois. We also 
understand that we have had 2,500 veterans exposed to HIV in 
Miami. In Philadelphia, the cancer unit at the VA botched 92 of 
116 radioactive treatments over 6 years and then tried to cover 
it up. The VA suspended similar programs in Cincinnati, Ohio, 
and Jackson, Mississippi. And in St. Louis, very much a part of 
our State's veteran's picture as well, we had to improperly 
sterilize tools, exposing 1,800 veterans to HIV.
    I think that much of this has come to light because of you 
and your added scrutiny and focus on medical standards. And I 
hope that we will hear about how we are upgrading that, 
especially at those facilities.
    I share the chairman's concern about claims. Justice 
delayed is justice denied. My understanding is this 
subcommittee has provided $277 million extra since 2007 for 
additional claims processing, but as the chairman highlighted, 
adjudication times have climbed from 165 days to 230 days just 
in the last 2 years.
    I am particularly concerned about the idea of a contingency 
fund. I talked about this with Chairman Culberson. I do not 
have a big problem with your top line, and so I think we should 
just roll it into your regular budget. Estimate what you need, 
then the subcommittee should provide it. But I think the House 
of Representatives is not going to be approving any contingency 
funds. I just talked to the full Committee chairman; he 
understood that, and I think he is amenable to going in the 
same direction, at least as of this morning. And so, my hope is 
that we do not set the precedent here. I think it would be a 
very failed precedent in the House anyway. My hope is just to 
team up on a good top line which reflects your actual needs.
    With that, Mr. Chairman, let me just say my only hope for 
you, General Shinseki, was that you had gone Navy instead of 
Army, but it has been a very impressive career.
    And Mr. Chairman, I yield back.
    Senator Johnson. Thank you, Senator Kirk.
    Mr. Secretary, again, I welcome you to the subcommittee. I 
understand that yours will be the only opening statement. Your 
full statement will be included in the record, so please feel 
free to summarize your remarks.
    Mr. Secretary.


               summary statement of hon. eric k. shinseki


    Secretary Shinseki. Thank you, Mr. Chairman.
    Chairman Johnson, Ranking Member Kirk, distinguished 
members of the subcommittee, thank you for this opportunity to 
present the President's fiscal year 2012 budget and fiscal year 
2013 advanced appropriations request as two documents for this 
Department.
    I thank the members of the subcommittee for the generosity 
of time and meeting with me prior to this hearing.
    Let me also acknowledge the presence of some of our veteran 
service organizations. Their insights are helpful as we 
structure our programs to best meet the needs of veterans. And 
so, their insights are useful.
    Mr. Chairman, thank you for allowing the introduction of my 
written statement.
    Let me just very quickly say that the President's fiscal 
year 2012 budget request would provide $132.2 billion to VA to 
meet its responsibilities; $61.9 billion of that is in 
discretionary funding, which is our primary discussion today, 
and the remainder of that, $70.3 billion, in the mandatory 
account.
    Our discretionary budget request represents an increase of 
$5.9 billion or a 10.6-percent increase over the last enacted 
budget, which was fiscal year 2010.
    The budget request for fiscal year 2012 and advanced 
appropriations request for fiscal year 2013 continue the 
strategic cultural change that has been underway in VA now for 
at least 2 years. They also enable our pursuit of three urgent 
priorities that have also guided our efforts for the past 2 
years, namely expanding access to VA benefits and services to 
the topic that both the chairman and ranking member addressed, 
reducing and ultimately eliminating the claims backlog, and 
then third, ending veterans homelessness by 2015.
    I would like to touch on each of those very quickly.


                                 access


    In 2008, 7.8 million veterans were enrolled in VA for 
healthcare. Today, that number is 8.4 million, and it is 
estimated to go to 8.6 million veterans in 2012, the year of 
the budget we are looking at is an increase of 800,000 
enrollments in 4 years.
    Veterans continue to be among the oldest and sickest 
patients in any medical system, and the youngest of them are 
challenged by increasingly complex injuries and the insidious 
wounds that we all know about from these current conflicts. 
Most of them are challenged economically, and so this budget 
request allows VA to address this surge in demand at this time 
given the circumstances facing our veterans.


                              the backlog


    VA's highest priority is to eliminate the disability claims 
backlog in 2015, ensuring all veterans receive a quality 
decision with an accuracy of 98 percent in no more than 125 
days. We have a ways to go to meet that goal.
    Major information technology (IT) investments have been 
made to supplant the Veterans Benefits Administration's (VBA's) 
paper-bound processes with Veterans Benefits Management System 
(VBMS), being piloted today in Providence, Rhode Island, 
something that has been underway since November of last year, 
and Veterans Relationship Management (VRM), another initiative 
in the process of being fielded. We anticipate significant 
progress in 2012.
    The fiscal year 2011 and fiscal year 2012 budget requests 
are intended to posture us to begin reducing that backlog in 
disability claims.


                              homelessness


    Two years ago, there were approximately 131,000 homeless 
veterans on any given night. Today, that estimate is down to 
76,000 veterans. We intend that number to be less than 60,000 
by June 2012. We have made progress, and this budget request 
allows us to put in place the detailed plans to both rescue and 
prevent homelessness amongst veterans. Healthcare for homeless 
veterans costs three-and-one-half times more than what it costs 
to care for veterans who are not homeless. There is a cost 
factor associated here. This budget request enables pursuit of 
our goal to eliminate veterans' homelessness by 2015.
    For more than 2 years now, we have established and 
reinforced the importance of the right behaviors, disciplines, 
processes, and the leadership it takes to become more 
effective, accountable, and efficient as a Department. Our 
budget is large and complex with the country's largest 
integrated healthcare system, the largest national cemetery 
system in the country, repeatedly recognized as the country's 
top performer in customer satisfaction over the past 10 years, 
the country's second-largest educational assistant program, the 
only zero-down payment guaranteed home loan program in the 
Nation with the lowest foreclosure rates in all categories of 
mortgage loans, and, finally, the seventh-largest life 
insurance enterprise in the country with a 96-percent customer 
satisfaction rating.
    In the past, these services were either not available or 
affordable for the men and women who wore our country's 
uniforms, and, hence, the VA's mission to care for those who 
have borne the battle and for their spouses and orphans. This 
budget request is VA's plan for meeting our obligation to all 
veterans of all generations.
    I will continue to do everything possible to ensure that we 
wisely use the funds that the Congress appropriates for us to 
improve the quality of life for our veterans innovatively and 
transparently so that you can see the decisions we make and how 
those funds are being invested.


                           prepared statement


    Again, thank you for this opportunity to appear before the 
subcommittee and for your unwavering support. I look forward to 
your questions.
    [The statement follows:]
              Prepared Statement of Hon. Eric K. Shinseki
    Chairman Johnson, Ranking Member Kirk, distinguished members of the 
Senate Appropriations Committee, Subcommittee on Military Construction, 
Veterans Affairs and Related Agencies.
    Thank you for the opportunity to present the President's fiscal 
year 2012 budget and fiscal year 2013 advance appropriations requests 
for the Department of Veterans Affairs (VA). Budget requests for this 
Department deliver the promises of Presidents and fulfill the 
obligations of the American people to those who have safeguarded us in 
times of war and peace.
    Today, the Nation's military remains deployed overseas as it has 
during the last 9 years of major conflict. Our requirements have grown 
over the past 2 years as we addressed longstanding issues from past 
wars and watched the requirements for those fighting the current 
conflicts grow significantly. These needs will continue long after the 
last American combatant departs Iraq and Afghanistan. It is our intent 
to continue to uphold our obligations to our veterans when these 
conflicts have subsided, something that we have not always done in the 
past. Not upholding these obligations in the past has left at least one 
generation of veterans struggling in anonymity for decades. We, who 
sent them, owe them better.
    VA has an obligation to track, communicate to stakeholders, and 
take decisive action to consistently meet the requirements of our 
Nation's veterans for care and services. We pay great attention to 
detail but there are many factors in the healthcare market that we 
cannot control. We must mitigate the risk inherent when requirements 
for veterans' care and services, and costs in the healthcare market, 
exceed our estimates. This request is the Department's plan for 
managing that risk and meeting our obligations to all veterans 
effectively, accountably, and efficiently.
    The President's budget for fiscal year 2012 requests $132 billion--
$62 billion in discretionary funds and $70 billion in mandatory 
funding. Our discretionary budget request represents an increase of 
$5.9 billion, or 10.6 percent, more than the fiscal year 2010 enacted 
level.
    Our plans for fiscal years 2012 and 2013 pursue strategic goals we 
established 2 years ago to transform VA into an innovative, 21st 
century organization that is people-centric, results-driven, and 
forward-looking. These strategic goals seek to reverse in-effective 
decisionmaking, systematic inefficiency, and poor business practices in 
order to improve quality and accessibility to VA healthcare, benefits, 
and services; increase veteran satisfaction; raise readiness to serve 
and protect in a time of crisis; and improve VA internal management 
systems to successfully perform our mission. We seek to serve as a 
model of governance, and this budget is shaped to provide VA both the 
tools and the management structure to achieve that distinction.
    For almost 146 years now, VA and its predecessor institutions have 
had the singular mission of caring for those who have ``borne the 
battle'' and their survivors. This is our only mission, and to do that 
well, we operate the largest integrated healthcare system in the 
country; the eighth-largest life insurance entity covering both Active-
Duty members as well as enrolled veterans; a sizable education 
assistance program; a home mortgage enterprise which guarantees more 
than 1.4 million veterans' home loans with the lowest foreclosure rate 
in the Nation; and the largest national cemetery system, which 
continues to lead the country as a high-performing institution.
    For 2 years now, we have disciplined ourselves to understand that 
successful execution of any strategic plan, especially one for a 
Department as large as ours, requires good stewardship of resources 
entrusted to us by the Congress. Every $1 counts, both in the current 
constrained fiscal environment and during less stressful times. 
Accountability and efficiency are behaviors consistent with our 
philosophy of leadership and management. The responsibility of caring 
for America's veterans on behalf of the American people demands 
unwavering commitment to effectiveness, accountability, and in the 
process, efficiency. In the past 2 years, we have established and 
created management systems, disciplines, processes, and initiatives 
that help us eliminate waste.
                        stewardship of resources
    VA has made great progress instilling accountability and 
disciplined processes by establishing our Project Management 
Accountability System (PMAS). This approach has created an information 
technology (IT) organization that can rapidly deliver technology to 
transform VA. PMAS is a disciplined approach to IT project development 
whereby we hold ourselves and our private-sector partners accountable 
for cost, schedule, and performance. In just 1 year, PMAS exceeded an 
80-percent success rate of meeting customers' milestones.
    In addition to PMAS, we adopted a new acquisition strategy to make 
more effective use of our IT resources. This new strategy, 
Transformation Twenty-One Total Technology (T4), will consolidate our 
IT requirements into 15 prime contracts, leveraging economies of scale 
to save both time and money and enable greater oversight and 
accountability. T4 also includes significant goals for subcontractors 
and other protections to make sure veteran-owned small businesses get a 
substantial share of the work. Seven of the 15 prime contracts are 
reserved for veteran-owned small businesses, and four of the seven are 
reserved for service-disabled small businesses.
    In developing the fiscal year 2012 budget, VA used an innovative, 
Department-wide process to define and assess VA's capital portfolio. 
This process for strategic capital investment planning (SCIP) is a 
transformative tool enabling VA to deliver the highest quality of 
services by investing in the future and improving efficiency of 
operations. SCIP has captured the full extent of VA infrastructure and 
service gaps and developed both capital and noncapital solutions to 
address these gaps through 2021. SCIP also produced VA's first-ever 
Department-wide integrated and prioritized list of capital projects, 
which is being used to ensure that the most critical infrastructure 
needs are met, particularly in correcting safety, security, and seismic 
deficiencies, and creating consistent standards across the system.
    The use of metrics to monitor and assess performance is another key 
strategy we employ to ensure the effective use of resources and 
accountability. For example, in November 2010, VA launched two online 
dashboards to offer transparency of the clinical performance of our 
healthcare system to the general public. First, VA's Linking 
Information Knowledge and Systems (LinKS) provides outcome measurement 
data in areas such as acute, intensive, and outpatient care. This 
allows management to assess a specific medical facility's performance 
against other facilities while, at the same time, serving as a 
motivational tool to improve performance. The dashboard, Aspire, 
compiles data from VA's individual hospitals and hospital systems to 
measure performance against national private-sector benchmarks. 
Financial and performance metrics also provide the foundation for 
monthly performance reviews that are chaired by the Deputy Secretary. 
These monthly meetings play a vital role in monitoring performance 
throughout the Department, and are designed to ensure both operational 
efficiency and the achievement of key performance targets.
    We also demonstrated our ongoing commitment to effective 
stewardship of our financial resources by obtaining our 12th 
consecutive unqualified (clean) audit opinion on VA's consolidated 
financial statements. In 2010, we were successful in remediating three 
of four longstanding material weaknesses, a 75-percent reduction in 
just 1 year. We also began implementation of a number of key management 
initiatives that will allow us to better serve veterans by getting the 
most out of our available resources:
  --Reducing improper payments and improving operational efficiencies 
        in our medical fee care program will result in estimated 
        savings of $150 million in 2011. This includes continued 
        expansion of the Consolidated Patient Account Centers to 
        standardize VA's billing and collection activities.
  --Implementing Medicare's standard payment rates will allow VA to 
        better plan and redirect more funding into the provision of 
        healthcare services. The estimated savings of this change in 
        business practices in 2011 is $275 million.
  --Consolidating contracting requirements, adopting strategic sourcing 
        and other initiatives will reduce acquisition costs by an 
        estimated $177 million in 2011.
    The effective use of IT is critical to achieving efficient 
healthcare and benefits delivery systems for veterans. To accelerate 
the process for adjudicating disability claims for new service-
connected presumptive conditions associated with exposure to Agent 
Orange, we implemented a new online claims application and processing 
system.
    A recent independent study, which covered a 10-year period between 
1997 and 2007, found that VA's health IT investment during the period 
was $4 billion, while savings were more than $7 billion.\1\ More than 
86 percent of the savings were due to the elimination of duplicated 
tests and reduced medical errors. The rest of the savings came from 
lower operating expenses and reduced workload. VA is continuing to 
modernize its electronic medical records to optimally support 
healthcare delivery and management in a variety of settings. This 
effort includes migrating the current computerized patient record 
system (CPRS) into a modern, Web-based electronic health record (EHR).
---------------------------------------------------------------------------
    \1\ ``The Value From Investments in Health Information Technology 
at the U.S. Department of Veterans Affairs'', Colene M. Byrne, Lauren 
M. Mercincavage, Eric C. Pan, Adam G. Vincent, Douglas S. Johnston, and 
Blackford Middleton, Health Aff, April 2010 29:4629-638.
---------------------------------------------------------------------------
    Advance appropriations for VA medical care require a multi-year 
approach to budget planning whereby 1 year builds off the previous 
year. This provides opportunities to more effectively use resources in 
a constrained fiscal environment as well as to update requirements.
                multi-year plan for medical care budget
    The fiscal year 2012 budget request for VA medical care of $50.9 
billion is a net increase of $240 million more than the fiscal year 
2012 advance appropriations request of $50.6 billion in the fiscal year 
2011 budget. This is the result of an increase of $953 million 
associated with potential increased reliance on the VA healthcare 
system due to economic employment conditions, partially offset by a 
rescission of $713 million which reflects the cumulative impact of the 
statutory freeze on pay raises for Federal employees in fiscal years 
2011 and 2012. The fiscal year 2013 request of advance appropriations 
is $52.5 billion, an increase of $1.7 billion more than the fiscal year 
2012 budget request.
    The establishment of a contingency fund of $953 million for medical 
care is requested in fiscal year 2012. These contingency funds would 
become available for obligation if the administration determines that 
additional costs, due to changes in economic conditions as estimated by 
VA's Enrollee Health Care Projection Model, materialize in 2012. This 
economic impact variable was incorporated into the model for the first 
time this year. Based on experience from 2010, the need for this fund 
will be carefully monitored in 2011 and 2012. This cautious approach 
recognizes the potential impact of economic conditions as estimated by 
the model to ensure funds are available to care for veterans, while 
acknowledging the uncertainty associated with the new methodology 
incorporated into the model estimates.
    Another key building block in developing fiscal years 2012 and 2013 
budget requests for medical care is the use of unobligated balances, or 
carryover, from fiscal year 2011 to meet projected patient demand. This 
carryover of more than $1 billion, which includes savings from 
operational improvements, supports anticipated costs for providing 
medical care to veterans in fiscal years 2012 and 2013 and is factored 
into VA's request for appropriations. This is a vital component of our 
multi-year budget and any reductions in the amount of fiscal year 2011 
projected carryover funding would require increased appropriations in 
fiscal years 2012 and 2013.
            transforming the department of veterans affairs
    The Department faces an increasingly challenging operating 
environment as a result of the changing population of veterans and 
their families and the new and more complex needs and expectations for 
their care and services. Transforming VA into a 21st-century 
organization involves a commitment to many broad challenges:
  --to stay on the cutting edge of healthcare delivery;
  --to lay the foundation for safe, secure, and authentic health record 
        interoperability;
  --to deliver excellent service for veterans who apply for disability 
        and education benefits; and
  --to create a modern, efficient, and customer-friendly interface that 
        better-serves veterans.
    In this journey, we are focusing on opportunities to improve our 
efficiency and effectiveness and the individual performance of our 
employees.
    Our health informatics initiative is a foundational component for 
VA's transition from a medical model to a patient-centered model of 
care. The delivery of healthcare will be better tailored to the 
individual veteran, yet utilize treatment regimens validated through 
population studies. Veterans will receive fewer unnecessary tests and 
procedures and more standardized care based on best practices and 
empirical data.
    The purpose of the VA Innovation Initiative (VAi2) is to identify, 
fund, and test new ideas from VA employees, academia, and the private 
sector. The focus is on improving access, quality, performance, and 
cost. VA remains committed to the best system of delivering quality 
care and benefits to veterans. VAi2 plays an important role by enabling 
the use of promising technologies in the design of cost-effective 
solutions. For example, the TBI Toolbox pilot, located at McGuire VA 
Medical Center in Richmond, Virginia, will test a software tool to 
standardize data gathered from brain injury treatments. The strategy 
will allow sharing of rapidly evolving treatment guidelines at VA 
polytrauma centers and Department of Defense (DOD) medical facilities, 
as well as patient progress and outcomes.
    The fiscal year 2012 budget continues our focus on three key 
transformational priorities I established when I became Secretary:
  --expanding access to benefits and services;
  --reducing the claims backlog; and
  --eliminating veteran homelessness by 2015.
These priorities address the most visible and urgent issues in VA.
               expanding access to benefits and services
    Expanding access to healthcare and benefits for underserved 
veterans is vital to VA's success in best-serving veterans of all eras.
    The Veterans Relationship Management (VRM) initiative will provide 
veterans, their families, and survivors with direct, easy, and secure 
access to the full range of VA programs through an efficient and 
responsive multi-channel program, including phone and Web services. VRM 
will provide VA employees with up-to-date tools to better serve VA 
clients, and empower clients through enhanced self-service 
capabilities. Expanding the self-service capabilities of the eBenefits 
online portal is one of the early successes of the VRM program in 2010, 
and expansion of eBenefits functionality continues through quarterly 
releases and programs to engage new users.
    VA also saw significant progress in expanding access to veterans. 
In July 2010, the Center for Women veterans sponsored a forum to 
highlight enhancements in VA services and benefits for women veterans 
which resulted in an information toolkit for advocates such as veteran 
service organizations to share with their constituencies.
    Outreach was extended directly to women when, for the first time in 
25 years, VA surveyed women veterans across the country to:
  --identify in a national sample the current status, demographics, 
        healthcare needs, and VA experiences of women veterans;
  --determine how healthcare needs and barriers to VA healthcare differ 
        among women veterans of different generations; and
  --assess women veterans' healthcare preferences in order to address 
        VA barriers and healthcare needs.
    The interim report, released in summer 2010, informs policy and 
planning and provides a new baseline for program evaluation with regard 
to veterans' perceptions of VA health services. The final report will 
be released in spring 2011.
    The Enhancing the Veteran Experience and Access to Healthcare 
Initiative will expand healthcare for veterans, including women and 
rural populations. Care alternatives will be created to meet these 
special population access needs, including the use of new technology. 
Where technology solutions safely permit, VA has already transitioned 
from inpatient to outpatient settings through the use of tele-medicine, 
in-home care, and other delivery innovations.
    One area of success is our expansion of telehome health-based 
clinical services in rural areas, which increases access, and reduces 
avoidable travel for patients and clinicians. In 2010, the total 
average daily census in telehome health was 31,155. This program will 
continue to expand to an estimated average daily census of 50,147 in 
2012, an increase of 60 percent more than 2010.
    Through the Improve Veteran Mental Health Initiative more veterans 
will have access to the appropriate mental health services for which 
they are eligible, regardless of their geographic location. VA is 
leveraging the virtual environment with services such as the Veterans' 
Suicide Prevention Chat Line and real-time clinical video conferences.
                      reducing the claims backlog
    One of VA's highest priority goals is to eliminate the disability 
claims backlog by 2015 and ensure all veterans receive a quality 
decision (98-percent accuracy rate) in no more than 125 days. The 
Veterans Benefits Administration (VBA) is attacking the claims backlog 
through a focused and multi-pronged approach. At its core, our 
transformational approach relies on three pillars:
  --a culture change inside VA to one that is centered on advocacy for 
        veterans;
  --collaborating with stakeholders to constantly improve our claims 
        process using best practices and ideas; and
  --deploying powerful 21st century IT solutions to simplify and 
        improve claims processing for timely and accurate decisions the 
        first time.
    The Veterans Benefits Management System (VBMS) initiative is the 
cornerstone of VA's claims transformation strategy. It integrates a 
business transformation strategy to address process and people with a 
paperless claims processing system. Combining a paperless claims 
processing system with improved business processes is the key to 
eliminating the backlog and providing veterans with timely and quality 
decisions. The Virtual Regional Office, completed in May 2010, engaged 
employees and subject-matter experts to determine system specifications 
and business requirements for VBMS. The first VBMS pilot began in 
Providence in November 2010. Nationwide deployment of VBMS is expected 
to begin in 2012.
    VA is encouraging veterans to file their Agent Orange-related 
claims through a new online claims application and processing system. 
Vietnam veterans are the first users of this convenient automated 
claims processing system, which guides them through Web-based menus to 
capture information and medical evidence for faster claims decisions. 
While the new system is currently limited to claims related to the new 
Agent Orange presumptive conditions of Parkinson's disease, ischemic 
heart disease, and hairy cell leukemia, we will expand it to include 
claims for other conditions.
    VA also published the first set of streamlined forms capturing 
medical information essential to prompt evaluation of disability 
compensation and pension claims, and dozens more of these forms are in 
development for various disabilities. The content of these disability 
benefit questionnaires is being built into VA's own medical information 
system to guide in-house examinations. Veterans can provide them to 
private doctors as an evidence guide that will speed their claims 
decisions.
    Another initiative to reduce the time needed to obtain private 
medical records utilizes a private contractor to retrieve the records 
from the provider, scan them into a digital format, and send them to VA 
through a secure transmission. This contract frees VA staff to focus on 
processing claims more quickly.
    Additional claims transformation efforts deployed nationwide in 
2010 include the Fully Developed Claims Initiative to promptly rate 
claims submitted with all required evidence and an initiative to 
proactively reach out to veterans via telephone to quickly resolve 
claims issues.
    VA needs these innovative systems and initiatives to expedite 
claims processing as the number of claims continue to climb. The 
disability claims workload from returning war veterans, as well as from 
veterans of earlier periods, is increasing each year. Annual claims 
receipts increased 51 percent when comparing receipts from 2005-2010 
(788,298-1,192,346). We anticipate claims receipts of nearly 1.5 
million in 2011 (including new Agent Orange presumptive) and more than 
1.3 million claims in 2012. The funding request in the President's 
budget for VBA is essential to meet the increasing workload and put VA 
on a path to achieve our ultimate goal of no claims over 125 days by 
2015.
                    eliminating veteran homelessness
    VA has an exceptionally strong track record in decreasing the 
number of homeless veterans. Six years ago, there were approximately 
195,000 homeless veterans on any given night; today, there are about 
75,600. VA uses a multifaceted approach by providing safe housing; 
outreach; educational opportunities; mental healthcare and treatment; 
support services; homeless prevention services; and opportunities to 
return to employment. The National Call Center for Homeless has 
received 13,000 calls since March 2010, and 18,000 veterans and 
families of veterans have been provided permanent housing through VA 
and Department of Housing and Urban Development (HUD) programs. These 
veterans were also provided with dedicated case managers and access to 
high-quality VA healthcare.
    The Building Utilization Review and Repurpose (BURR) study is using 
VA's inventory of vacant/underutilized buildings to house homeless and 
at-risk veterans and their families, where practical. The Congress 
allocated $50 million to renovate unused VA buildings and VA has 
identified 94 sites with the potential to add approximately 6,300 units 
of housing through public/private ventures using VA's enhanced-use 
lease authority. This legislative authority is scheduled to lapse at 
the end of calendar year 2011. The administration remains committed to 
this important program, and a proposal to address the expiration will 
accompany the Department's legislative package submitted through the 
President's Program. In addition to helping reduce homelessness, vacant 
building reuse is being considered for housing for Operation Enduring 
Freedom/Operation Iraqi Freedom/Operation New Dawn ()veterans, 
polytrauma patients, assisted living, and seniors.
    Homelessness is both a housing and healthcare issue, heavily 
burdened by depression and substance abuse. Our fiscal year 2012 budget 
plan also supports a comprehensive approach to eliminating veteran 
homelessness by making key investments in mental health programs.
    The fiscal year 2012 budget includes $939 million for specific 
programs to prevent and reduce homelessness among veterans. This is an 
increase of 17.5 percent, or $140 million more than the fiscal year 
2011 level of $799 million. This increase includes an additional $50.4 
million to enhance case management for permanent housing solutions 
offered through the HUD-VA Supported Housing program. These funds are 
required to maintain the services that keep veterans rescued from 
homelessness sheltered; get the remaining men and women off the streets 
whom we have not reached in the past; and, prevent additional veterans 
from becoming homeless during a time of war and difficult economic 
conditions.
                             mental health
    The mental health of veterans is a more important issue now than 
ever before, as increasing numbers of veterans are diagnosed with 
mental health conditions, often coexisting with other medical problems. 
More than 1.2 million of the 5.2 million veterans seen in 2009 in VA 
had a mental health diagnosis. This represents about a 40-percent 
increase since 2004.
    Veterans of Iraq and Afghanistan rely on mental healthcare from VA 
to a greater degree than earlier groups of veterans. Diagnosis of post-
traumatic stress disorder (PTSD) is on the rise as the contemporary 
nature of warfare increases both the chance for injuries that affect 
mental health and the difficulties facing veterans upon their return 
home. In addition, mental health issues are often contributing factors 
to veterans' homelessness.
    In order to address this challenge, VA has significantly invested 
in our mental healthcare workforce, hiring more than 6,000 new mental 
healthcare workers since 2005. In 2010, VA hired more than 1,500 
clinicians to conduct screenings and provide treatment as well as 
trained more than 1,000 clinicians in evidenced-based practices. The 
Department has also established high standards for the provision of 
mental healthcare services through the recent publication of our 
Handbook on Uniform Mental Health Services in VA medical centers and 
clinics, and we have developed an integrated mental health plan with 
DOD to ensure better continuity of care--especially for veterans of 
Iraq and Afghanistan. The fiscal year 2012 budget includes $6.2 billion 
for mental healthcare programs, an increase of $450 million, or 8 
percent more than the fiscal year 2011 level of $5.7 billion.
                          medical care program
    We expect to provide medical care to more than 6.2 million unique 
patients in fiscal year 2012, a 1.4-percent increase more than fiscal 
year 2011. Among this community are nearly 536,000 veterans of Iraq and 
Afghanistan, an increase of more than 59,000 or 12.6 percent more than 
fiscal year 2011.
    The fiscal year 2012 budget will support several new initiatives in 
addition to our efforts to eliminate veteran homelessness. For example, 
$344 million is provided for the activation of newly constructed 
medical facilities. In addition, we provide $208 million to implement 
provisions of the Caregivers and Veterans Omnibus Health Services Act 
and improve the quality of life for veterans and their families.
    The fiscal year 2012 budget also includes operational improvements 
that will make VA more effective and efficient in this challenging 
fiscal and economic environment. VA is proposing $1.2 billion of 
operational improvements which include aligning fees that VA pays with 
Medicare rates, reducing and improving the administration of our fee-
based care program, clinical staff realignments, reducing indirect 
medical and administrative support costs, and achieving significant 
acquisition improvements to increase our purchasing power.
    Beginning in 2010, VHA embarked on a multi-year journey to enhance 
significantly the experience of veterans and their families in their 
interactions with VA while continuing to focus on quality and safety. 
This journey required the VHA to develop new models of healthcare that 
educated and empowered patients and their families, focused not only on 
the technical aspects of healthcare but also designed for a more 
holistic, veteran-centered system, with improved access and 
coordination of care. New Models of Healthcare is a portfolio of 
initiatives created to achieve these objectives. We are re-designing 
our systems around the needs of our patients and improving care 
coordination and virtual access through enhanced secure messaging, 
social networking, telehealth, and telephone access.
    An essential component of this approach is transforming our primary 
care programs to increase our focus on health promotion, disease 
prevention, and chronic disease management through multidisciplinary 
teams. The new model of care will improve health outcomes and the care 
experience for our veterans and their families. The model will 
standardize healthcare policies, practices, and infrastructure to 
consistently prioritize veterans' healthcare over any other factor 
without increasing cost or adversely affecting the quality of care. 
This important initiative will enable VA to become a national leader in 
transforming primary care services to a medical home model of 
healthcare delivery that improves patient satisfaction, clinical 
quality, safety, and efficiencies. VA Tele-Health and the Home Care 
Model will develop a new generation of communication tools (i.e., 
social networking, micro-blogging, text messaging, and self-management 
groups) that VA will use to disseminate and collect critical 
information related to health benefits and other VA services.
    VA is taking this historic step in redefining medical care for 
veterans with the adoption of a modern healthcare approach called 
Patient Aligned Care Team (PACT). PACT is VA's adaptation of the 
popular contemporary team-based model of healthcare known as Patient 
Centered Medical Home designed to provide continuous and coordinated 
care throughout a patient's lifetime.
                            medical research
    VA's many trailblazing research accomplishments are a source of 
great pride to our department and the Nation. Today's committed VA 
researchers are focusing on traumatic brain injury, PTSD, post-
deployment health, women's health, and a host of other issues key to 
the well-being of our veterans. As one of the world's largest 
integrated healthcare systems, VA is uniquely positioned to not only 
conduct and fund research, but to develop solutions and implement them 
more quickly than other healthcare systems--turning hope into reality 
for veterans and all Americans.
    VA's budget request for fiscal year 2012 includes $509 million for 
research, a decrease of $72 million less than the 2010 level. In 
addition, VA's research program will receive approximately $1.2 billion 
from medical care funding and Federal and non-Federal grants. These 
research funds will continue support for genomic medicine, point-of-
care research, and medical informatics and IT. Genomic medicine, also 
referred to as personalized medicine, uses information on a patient's 
genetic make-up to tailor prevention and treatment for that individual. 
The Million Veteran Program invites users of the VA healthcare system 
nationwide to participate in a longitudinal study with the aim of 
better understanding the relationship between genetic characteristics, 
behaviors, and environmental factors and veteran health.
    To leverage data in the EHR, VA Informatics and Computing 
Infrastructure (VINCI) is creating a powerful and secure environment 
within the Austin Information Technology Center. This environment will 
allow VA researchers to access more easily a wide array of VHA 
databases using custom and off-the-shelf analytical tools. The 
Consortium for Healthcare Informatics Research (CHIR) will provide 
research access to patient information in VA's CPRS narrative text and 
laboratory reports. Together, VINCI and CHIR will allow data mining to 
accelerate findings and identify emerging trends. Ultimately, this 
critical work will lead to greater effectiveness of our medical 
system--improving value by assisting in the prevention and cure of 
disease.
                            veteran benefits
    The fiscal year 2012 budget request for VBA is $2 billion, an 
increase of $330 million, or 19.5 percent, more than the fiscal year 
2010 enacted level of $1.7 billion. This budget supports ongoing and 
new initiatives to reduce disability claims processing time, including 
development and implementation of further redesigned business 
processes. It funds an increase in full-time equivalents (FTE) of 716 
more than fiscal year 2010 to 20,321 to assist in reducing the benefits 
claims backlog. It also supports the administration of expanded 
education benefits eligibility under the Post-9/11 GI Bill, which now 
includes benefits for noncollege degree programs, such as on-the-job 
training, flight training, and correspondence courses. In addition, the 
fiscal year 2012 budget request supports the following initiatives:
    Integrated Disability Evaluation System Program.--The Integrated 
        Disability Evaluation System (IDES) simplifies the process for 
        disabled servicemembers transitioning to veteran status, 
        improves the consistency of disability ratings, and improves 
        customer satisfaction. An IDES claim is completed in an average 
        of 309 days; 43 percent faster than in the legacy system. VA 
        and DOD worked together to increase the number of sites for the 
        IDES program from 21-27 in 2010. The six new sites are Fort 
        Riley, Fort Benning, Fort Lewis, Fort Hood, Fort Bragg, and 
        Portsmouth Naval Hospital, and VA and DOD will continue to 
        expand the IDES program.
      IDES is being expanded to provide Vocational Rehabilitation and 
        Employment (VR&E) services to Active-Duty servicemembers 
        transitioning through the IDES. These services range from a 
        comprehensive rehabilitation evaluation to determine abilities, 
        skills, and interests for employment purposes as well as 
        support services to identify and maintain employment. The 
        budget request includes $16.2 million for 110 FTE for the VR&E 
        program to support IDES.
    Veterans Benefits Management System.--In 2011, we will conduct two 
        of three planned pilot programs to test the Veterans Benefits 
        Management System (VBMS), the new paperless claims processing 
        system. Each pilot will expand on the success of the first 
        pilot by adding additional software components. In the fiscal 
        year 2012 budget request for IT, we will invest $148 million to 
        complete pilot testing and initiate a national rollout.
    VetSuccess on Campus.--In July 2009, VA established a pilot program 
        at the University of South Florida called VetSuccess on Campus 
        to improve graduation rates by providing outreach and 
        supportive services to veterans entering colleges and 
        universities and ensuring that their health, education, and 
        benefit needs are met. The program has since expanded to 
        include an additional seven campuses, serving approximately 
        8,000 veterans. The campus vocational rehabilitation counselor 
        and the vet center outreach coordinator liaise with school 
        certifying officials, perform outreach, and communicate with 
        veteran-students to ensure their health, education, and benefit 
        needs are met. This will enable veterans to stay in college to 
        complete their degrees and enter career employment. In 
        addition, it provides veterans the skills necessary to gain 
        employment after graduation, which can help prevent veteran 
        homelessness. The fiscal year 2012 budget includes $1.1 million 
        to expand the program to serve an additional 9,000 veteran 
        students on nine campuses, more than doubling the size of the 
        current program.
                    national cemetery administration
    The budget plan includes $250.9 million in operations and 
maintenance funding for the National Cemetery Administration (NCA). The 
funding will allow us to provide more than 89.8 percent of the veteran 
population a burial option within 75 miles of their residences by 
keeping existing national cemeteries open and establishing new State 
veterans cemeteries, as well as increasing outreach efforts.
    VA expects to perform 115,500 interments in fiscal year 2012, a 1-
percent increase more than fiscal year 2011. In fiscal year 2012, NCA 
will provide maintenance of 8,759 developed acres, 3 percent more than 
the fiscal year 2011 estimate, while 3,228,000, or 2.6 percent more, 
gravesites will be given perpetual care.
    The budget request will allow NCA to maintain unprecedented levels 
of customer satisfaction. NCA achieved the top rating in the Nation 
four consecutive times on the prestigious American Customer 
Satisfaction Index (ACSI) established by the University of Michigan. 
ACSI is the only national, cross-industry measure of satisfaction in 
the United States. On the most recent 2010 survey and over the past 
decade, NCA's scores bested more than 100 Federal agencies and the 
Nation's top corporations including Ford, FedEx, and Coca Cola, to name 
a few. Our own internal surveys confirm this exceptional level of 
performance. For 2010, 98 percent of the survey respondents rated the 
appearance of national cemeteries as excellent; 95 percent rated the 
quality of service as excellent.
    NCA has implemented innovative approaches to cemetery operations:
  --the use of pre-placed crypts that preserve land and reduce 
        operating costs;
  --application of ``water-wise'' landscaping that conserves water and 
        other resources; and
  --installation of alternative energy products such as windmills and 
        solar panels that supply power for facilities.
    NCA has also utilized bio-based fuels that are homegrown and less 
damaging to the environment. NCA is developing an independent study of 
emerging burial practices throughout the world to inform its planning 
for the future.
    Support for the Veterans Cemetery Grants Program continues in 2012 
with $46 million to fund the highest priority veterans cemetery grant 
requests ready for award. In addition to State cemetery grants, NCA is 
engaged in discussions with tribal governments regarding the 
construction of veterans' cemeteries on their land and is awarding six 
such grants in 2011. The inclusion of tribal governments as grant 
recipients recognizes and empowers the authority of these groups to 
represent a unique group of veterans and respond to their needs.
                         capital infrastructure
    Congressional support of VA has resulted in 63 major construction 
projects funded in whole or, in part, since 2004. When combined with 
investments in our minor construction and major lease programs, this 
has contributed to a plant inventory which includes 5,541 owned 
facilities, 1,629 leased facilities, 155 million square feet of 
occupied space (owned and leased), and 33,718 acres of owned real 
property.
    To best utilize resources, VA has reduced its inventory of owned 
vacant space by 34 percent, from 8.6 million square feet in 2001 to 5.7 
million square feet in 2010. As discussed previously, we are using the 
BURR effort to reuse vacant space for homeless veterans and their 
families. BURR also identifies other potential reuses of vacant and 
underutilized space and land within VA's inventory such as assisted 
living, senior housing, and housing for veterans of Iraq and 
Afghanistan and their families. VA also houses homeless veterans in 
public and private ventures through enhanced-use leasing.
Major Construction
    The major construction request in fiscal year 2012 is $589.6 
million in new budget authority. In addition, VA has been the 
beneficiary of a favorable construction market and, as a result, is 
able to reallocate $135.6 million from previously authorized and 
appropriated projects to accomplish additional project work--resulting 
in a total of $725.2 million for the major construction program. This 
reflects the Department's continued commitment to provide quality 
healthcare and benefits through improving its infrastructure to provide 
for modern, safe, and secure facilities for veterans. It includes seven 
ongoing medical facility projects (New Orleans, Denver, San Juan, St. 
Louis, Palo Alto, Bay Pines, and Seattle) and design for three new 
projects (Reno, West Los Angeles, and San Francisco) primarily focused 
on safety and security corrections. One cemetery expansion will be 
completed to maintain and improve burial service in Honolulu, Hawaii.
Minor Construction
    In fiscal year 2012, the minor construction request is $550.1 
million. In support of the medical care and medical research programs, 
minor construction funds permit VA to realign critical services, make 
seismic corrections, improve patient safety, enhance access to 
healthcare and patient privacy, increase capacity for dental care, 
improve treatment of special emphasis programs, and expand our research 
capability. We also use minor construction funds to improve the 
appearance of our national cemeteries. Further, minor construction 
resources will be used to comply with energy efficiency and 
sustainability design requirements.
Greening the Department of Veterans Affairs
    The ``greening VA'' effort continues to be strong. There are 21 
facilities Green Globe-certified and 4 facilities LEED-certified. We 
have completed energy efficiency benchmarking for 99 percent of VA-
owned facilities and obtained the ENERGY STAR label for 30 VA sites 
since 2003. Electric meter installations were completed for 60 percent 
of targeted buildings and we are installing solar energy systems at 35 
sites for a total capacity of 30 megawatts. VA has installed wind 
turbines at two sites, awarded two ground source heat pump projects, 
awarded five renewably fueled cogeneration projects, and completed one 
fuel cell project.
    In fiscal year 2012, we plan to invest $27 million for solar 
photovoltaic projects, $51 million in energy infrastructure 
improvements, $21 million in renewably fueled cogeneration using 
biomass (wood waste) or biogas (waste methane), $1 million in 
sustainable building, $14 million for wind projects, and $10 million 
for alternative fueling projects and expansion of environmental 
management systems.
                         information technology
    IT is integral to the delivery of efficient and effective service 
to veterans. IT is not a supplementary function--it is key to the 
delivery of efficient, modern healthcare. The fiscal year 2012 budget 
includes $3.161 billion to support IT development, operations, and 
maintenance expenses. The fiscal year 2012 budget will fund the 
Department's highest IT priorities as well as information security 
programs, which protect privacy and provide secure IT operations across 
VA. Under our disciplined development program, Project Management 
Accountability System (PMAS), the delivery of customer software 
milestones exceeds 80 percent which is up from just 20 percent before 
the implementation of PMAS. The budget request will also fund systems 
that VA will develop and implement under the Caregivers and Veterans 
Omnibus Health Services Act of 2010.
    In 2010, VA made the sound business decision to discontinue the 
Integrated Financial Accounting System and the data warehouse component 
of the Financial and Logistics Integrated Technology Enterprise. The 
Office of Information and Technology will fund other continuing 
projects such as Compensation and Pension Records Interchange (CAPRI) 
which offers VBA rating veteran service representatives and decision 
review officers help in building the rating decision. CAPRI does this 
by creating a more efficient means of requesting compensation and 
pension examinations and navigating existing patient records.
Veterans Relationship Management
    The fiscal year 2012 IT budget for VRM is $108 million, and it will 
support continued development of the online portal as well as the 
development of customer relationship management capabilities.
                   virtual lifetime electronic record
    The Virtual Lifetime Electronic Record (VLER) is a Federal, 
interagency initiative to provide portability, accessibility, and 
complete health, benefits, and administrative data for every 
servicemember, veteran, and their beneficiaries. The goal of this major 
initiative is to establish the interoperability and communication 
environment necessary to facilitate the rapid exchange of patient and 
beneficiary information that will yield consolidated, coherent, and 
consistent access to electronic records between DOD, VA, and the 
private sector.
    VLER will not create a new data record, but it will ensure 
availability of reliable data from the best possible source. The VLER 
health component of this initiative is in operation at two pilot sites 
with a plan to add nine more pilots this fiscal year. VLER will work 
closely with other major initiatives including VBMS and VRM. A total of 
$70 million in IT funds in 2012 is required to complete the effort and 
move to national production and deployment of initial VLER 
capabilities. The VLER partnership between VA and DOD will serve as a 
positive model for EHR interoperability in the country, which has been 
an administration priority.
                                summary
    VA is the second largest Federal department and has more than 
300,000 employees. Among the many professions represented in the vast 
VA workforce are physicians, nurses, counselors, claims processors, 
cemetery groundskeepers, statisticians, engineers, architects, computer 
specialists, budget analysts, police, and educators--all working with 
the greatest determination to best serve all generations of veterans. 
In addition, VA has approximately 140,000 volunteers serving veterans 
at our hospitals, vet centers, and cemeteries. There are things that 
they do that cannot be converted into dollar values--patience, dignity 
and respect for veterans, some of whom are heavily challenged by the 
memories of their wars.
    As advocates for veterans and their families, VA is committed to 
providing the very best services. I will do everything possible to 
ensure that we wisely use the funds the Congress appropriates for VA to 
improve the quality of life for veterans and the efficiency of our 
operations--innovatively and transparently--as we deliver on the 
enduring promises of Presidents and the obligations of the American 
people to our veterans.
    I am honored to present the President's fiscal year 2012 budget 
request for VA, and to represent all VA employees and the interests of 
those outside of VA, who share our commitment to veterans.

                           CONTINGENCY FUNDS

    Senator Johnson. Mr. Secretary, the budget includes a 
request for $953 million of contingency funds for medical 
services. As you described in your testimony, the need for this 
is due to the incorporation of current unemployment rates into 
the model, which may lead to greater demand for VA healthcare 
in fiscal year 2012. As you know, contingency funds are often 
viewed with skepticism by the Congress, especially in the House 
of Representatives. Can you explain the requirement and the 
rationale for this fund, and do you see this fund as a one-time 
only requirement?
    Secretary Shinseki. Mr. Chairman, an important question.
    As I think most members of the subcommittee know, we 
anticipate our requirements for healthcare through a process of 
modeling. It's called the Milliman model and it has been tuned 
to VA's factors.
    Over the past 7 years, the model has gotten refined and 
quite precise to the point that it enjoys confidence in the 
Office of Management and Budget (OMB) and the Government 
Accountability Office, who have both looked at this. For the 
first time, the model has raised the requirement for an 
unemployment rate factor. It has never done that before. What 
we understand is because of the extended economic conditions, 
the model has raised this issue, indicating in 2012, it is 
likely we will need $953 million to address the unemployment 
rate factor.
    While I have great confidence in the basic model because we 
have worked with it so closely over years, the unemployment 
rate factor is a first-year requirement. I do not have the 
history to be able to speak confidently about the accuracy of 
its prediction. The modelers advise me to pay attention because 
the model is usually correct.
    I guess I could have tucked that money inside the budget. I 
thought it best to be transparent about it and demonstrate my 
concern that we are addressing a first-year new modeling 
requirement. We have scored our budget, put the $953 million 
into the budget, but set it aside, and allowed that to be 
called, unfortunately, a contingency fund, which I understand 
is a less than comfortable term. We have set it aside so that 
we cannot use it unless the unemployment rate factor does kick 
in, and I then have to take evidence of that and get a release 
from OMB. If that factor does not kick in, then the money goes 
back to the Department of the Treasury, or whatever unused 
portion remains goes back to the Treasury.
    I would offer this was my effort to be transparent about my 
concern that this is a first year factor being introduced, and 
I wanted folks to understand that we are doing this. We scored 
it. We have done the right things. It is really risk mitigating 
as a decision that otherwise we would have to come and seek the 
Congress' support on a supplemental in 2012. I thought it was 
prudent to advance that decision in this way. I am open to any 
suggestions that the Congress deems appropriate.

                           CLAIMS PROCESSING

    Senator Johnson. Mr. Secretary, you are to be commended for 
your effort to be transparent. But Senator Kirk and others will 
debate this.
    Mr. Secretary, as you and I have discussed many times, the 
time it takes the VA to process a claim is a recurring 
complaint I have received from South Dakota. This subcommittee 
has provided the VA every dime it has asked for, and then some, 
to try and help you get a handle on the problem, yet the wait 
time is predicted to get even worse in fiscal year 2012. We are 
seeing the VA make significant strides in the past several 
years in shrinking the number of days veterans have to wait to 
see a doctor, yet on the benefits side, delays keep growing.
    My first question is a very basic question. What is it 
about this process that makes processing claims in a timely 
fashion so difficult? And what is the comprehensive plan 
forward?
    Secretary Shinseki. Mr. Chairman, just a little bit of 
history, when I arrived in 2009. For the first time our VBA, 
the people who do the claims processing who are good folks who 
come to work every day and try to do the right thing here--for 
the first time ever, they produced 977,000 claims decisions 
going out the door, and at the same time, there were 1 million 
claims arriving. The following year, 2010, we put 1 million 
claims decisions out the door and received in 1.2 million 
claims. We estimate this year, we are likely to receive 1.4-1.5 
million claims.
    To address this growth in the past, with great support from 
the Congress, our solutions have been to hire more people, and 
so every year we address the growth and have hired more people. 
Well, right now we have 14,000 people processing claims, and 
just looking at our most recent history, I can tell that hiring 
more people will give us an incremental improvement in 
production, but it will not get us to where we are knocking 
this backlog down. So we have to do something different.
    And the issue here is automation. We have invested heavily 
in automation tools. The key one is being piloted today in 
Providence. It is the VBMS I talked about. We anticipate in 
2012 VBMS is going to provide us with a tool that we can 
distribute nationwide and begin to use to go after the backlog. 
That is where we are in this process.
    IT is the elephant in our house, and we have to get this 
done. This year in 2011, we provided an unprecedented increase 
for the folks in the VBA. We plussed them up by 27 percent, 
which is where a lot of the money that you have seen is 
affiliated with the increase in IT. We weighed an outcome on 
the 2011 decisions, and hope the increase for tools in VBA will 
be sustained so we can deliver this tool.
    That is where we are, and our plan is, as soon as these 
tools are available, to begin knocking down the backlog.
    I came in 2009 with the intent of going to work on the 
backlog as the first priority. When I arrived, we had a brand 
new program called the Post-9/11 GI Bill, and all of my efforts 
had to go into getting the Post-9/11 GI Bill up and running, 
beginning in January 2009, because in August 2009 we had 
youngsters in classes going to school. It is a wonderful 
program; it is just that we had no automation tools at that 
time. Everything had to be done by hand. By the summer of that 
year, our efforts paid off. We had kids in school about 173,000 
of them, put there, again, by working with about 6,500 
different educational institutions. In the meantime, we built 
the automation tools that were going to change the environment 
for us. Today, we have in this program alone about 423,000 
youngsters in school, all the processes, for the most part, are 
automated. It is because of what we went through, this sort of 
dark knight of the soul with the Post-9/11 GI Bill from full 
stop to up-and-running automation wise. I am confident that the 
investments we are making in VBMS are the right tool, and the 
payoff will be equally significant.

                              UNEMPLOYMENT

    Senator Johnson. Senator Kirk.
    Senator Kirk. Thank you, Mr. Chairman.
    Is the unemployment factor in the fiscal year 2013 budget 
request as well?
    Secretary Shinseki. I'm sorry, Senator.
    Senator Kirk. Is the unemployment factor in the fiscal year 
2013 budget request as well?
    Secretary Shinseki. I am not sure I have a good answer for 
you on that.
    Senator Kirk. Can you get back to us?
    Secretary Shinseki. I will. I am happy to provide that.
    Senator Kirk. I also want to make sure that the White House 
prediction of unemployment is your prediction, because my guess 
is the White House is going to predict over next year 
unemployment will fall dramatically. So I want to make sure 
left hand and right hand are actually talking to each other.
    Secretary Shinseki. Yes. Again, the unemployment rate 
factor is an unknown for me, and I have put this in there 
because the model says so, and this is something I will have to 
deal with. I will have a better answer for you in 2012 when we 
see whether or not the unemployment rate factor kicks in. I am 
happy to provide that information.

                               CARRYOVER

    Senator Kirk. Thank you.
    And, of course, for you and Secretary Baker--as I 
understand it, when Secretary Baker came in as the Chief 
Information Officer in 2009, a significant portion of the 
Department's projects were behind schedule by more than 1 year 
and over budget by more than 50 percent. You halted the 
development of 44 projects and ultimately canceled 12 of them. 
As a result of halting development on so many projects, the 
Department fell short of spending its money that the Congress 
appropriated in fiscal year 2009. As a result, the IT/VA 
account carried $676 million from fiscal year 2009 to fiscal 
year 2010. And, with all that carryover funding to supplement 
your fiscal year 2010 appropriation, you then carried another 
$675 million from fiscal year 2010 to fiscal year 2011.
    In this time of budget constraints, and especially the 
pretty heavy scrutiny you are going to go through over in the 
House Appropriations Committee, I think the days of carrying 
more than $600 million are pretty much over. I think it would 
help us, Mr. Chairman, if we divided the IT account into three 
areas, and I hope our bill can do this--one line for salaries, 
one line for operations and maintenance, and one line for 
development so that we can keep a track of what has been a real 
problem child here. Is that possible to do?
    Mr. Baker. Thank you, Senator. We have looked just briefly 
at that. Clearly, we carry over primarily on the development 
side, but we also have a reason to carry over on the operations 
and maintenance side occasionally--equipment purchases and 
licenses and other things that may not get executed in August 
or September rolling into October or November. But as you 
identified, the primary reason for that carryover comes from 
development projects that we have slowed down or stopped.
    I do not think that the proposal causes me any great angst. 
I think we lay those out in individual lines at this point in 
time, so I would certainly want to work with the staff on the 
implications of that.
    Senator Kirk. Mr. Secretary, do you think--is there a way 
to have sort of, for lack of a better term, a Shinseki 
principle here that this IT effort is brought to bed by 
November of next year so that we make sure that we have full 
Shinseki management from start to finish exactly as we had for 
Stryker so that there is full accountability and no new 
personalities? If you screw up, you go back to the same boss.
    Secretary Shinseki. I think in essence we have that now. It 
is called the Program Management Accountability System, and the 
key words in that are management accountability. This is 
Secretary Baker's creation.
    Senator Kirk. My thinking is, is the deadline so that it 
all comes in while you are definitely with us?
    Secretary Shinseki. We can certainly set it up.
    Senator Kirk. Okay.
    Secretary Shinseki. I would not speak about the deadlines, 
but the key words in the Program Management Accountability 
System are management accountability. Initially when you 
tighten the screws down and people have to explain why they are 
either over budget or over schedule, you get that initial delay 
in the execution and hence, the early carryover. I predict in 
2011 and 2012 the carryover will be significantly less because 
we now have momentum and execution. Eighty percent of our 
projects are being executed at a very high standard, which was 
much less of the case in 2009 when I arrived.

                         GENERAL ADMINISTRATION

    Senator Kirk. Okay. One other question. The Department's 
fiscal year 2012 request that proposes a record high $448 
million for the VA's General Administration offices in 
Washington, DC, that is about $51 million higher than in fiscal 
years 2010 and 2011. The increase includes $23.5 million for an 
OMB initiative on reform for the Federal Government's 
acquisition force, but still it is a pretty high disconcerting 
request.
    To put it in context, as recently as 2006, VA Central 
Office budget was just $275 million. That is a 63-percent 
increase for central offices just in 4 years.
    Can you give us a compelling reason why the central 
administration costs so much so quickly?
    Secretary Shinseki. Senator, I am happy to provide the 
details; I just do not have the details you are referring to 
today.
    [The information was not available at press time.]
    Let me just offer that part of that growth has been in the 
Office of the Secretary--primarily, a $834,000 increase over 
the fiscal year 2011 budget request. In reality, there is not 
another person working in my office this year that was not 
there last year. What I am trying to correct here, and again, I 
will chalk this up to transparency is in the past we have had a 
method of detailing people into the Office of the Secretary. 
They were paid elsewhere, but they actually worked in the 
Office of the Secretary. What I have tried to do is clean up 
the accounts so, if they work in the Office of the Secretary, 
they get paid there. It just made it clear where they were 
being employed.
    Senator Kirk. Right.
    Secretary Shinseki. That is part of what is here also. 
Acquisition is a Governmentwide initiative, and 50 percent of 
that funding is tied to that initiative. I am happy to provide 
the details and the remaining percentage.
    Senator Kirk. Thank you.
    Thank you, Mr. Chairman.
    Senator Johnson. Before recognizing Senator Reed, I want to 
remind members that I am recognizing members in order of 
arrival.
    Senator Reed.

                             CLAIMS BACKLOG

    Senator Reed. Thank you very much, Mr. Chairman, and thank 
you, Mr. Secretary, and your colleagues for your testimony 
today and for your service.
    Both the chairman and Senator Kirk have raised very 
important questions about the IT funding. One other aspect that 
I would like to touch upon is, to what extent is that 
critical--the amount of money that you are carrying over--to 
addressing what we are all concerned about as a backlog in 
claims applications and processing? Another way to ask that if, 
in fact, this money is sort of recaptured or diverted, will 
that materially affect your ability to reduce significantly, 
and we hope eliminate, the claims backlog?
    Secretary Shinseki. Senator, I am going to call on some of 
our administration leadership here because they really can 
describe the impact. But you know, we centralized IT because we 
wanted better execution. When it was distributed throughout the 
Department, we had uneven decisions being made. We centralized 
it under an assistant secretary so we could have greater 
visibility and greater control.
    The effect of what that creates is as though there is an IT 
entity. There is no IT entity. The IT is in medical, it is in 
benefits, and it is in cemeteries. Although you look over here 
and you see a fairly large program, the dots connect over here. 
Whenever we talk about reducing or reviewing the IT budget, 
those reductions end up impacting medical care and, most 
importantly, veterans' benefits where the backlog is what we 
are trying to take down. Even our cemeteries are tied to that.
    I am happy to have Secretary Baker talk about the IT 
pieces, but I think it is important to ask the administrations 
what the impact to them is, if that is okay.
    Senator Reed. Go right ahead, please.
    Mr. Walcoff. Thank you, Senator. I am really glad that I 
have the opportunity to address this because it is something 
that I feel really strongly about.
    As has been mentioned by several members, we have certainly 
gotten resources for people over the last several years. We 
have added a large number of people, yet we have not been able 
to accomplish what all of us want to accomplish, which is to 
eliminate this backlog.
    Senator Reed. For the benefit, can you identify your 
position?
    Mr. Walcoff. Okay, I am sorry. My name is Mike Walcoff. I 
am the Acting Under Secretary for Benefits.
    Senator Reed. Right.
    Mr. Walcoff. There has not been in the past the investment 
in technology in VBA that there really needed to be, 
particularly for this business line. If there is one reason 
that I would focus on for how we got to this point of a 
backlog, that would be it. What I would say is, that is being 
remedied in the fiscal year 2012 budget. It started in 2011, 
and it is being remedied in 2012 by the existence of two 
particular projects, one being the VBMS. This is the initiative 
that is going to take us away from a paper-laden, cumbersome 
system that has been the same as it was 50 years ago, to an 
electronic system, where everything is done through technology. 
It is going to allow us not only to produce more claims but, 
more importantly, I believe, increase our quality. Right now, 
our quality is at 84 percent. The Secretary has set a goal for 
us of 98 percent, a pretty significant increase.
    What this system is going to do is by being rules-based, it 
is going to make it so when our rating specialists go in to 
work a claim, some of the issues that they have to decide, or 
the forks in the road that they came to in the past and 
possibly gone down the wrong road, this system is going to 
guide them to making the right decision on each of those 
decision points.
    They will still be making the decision, but they will be 
greatly aided by the technology. It is extremely important that 
this go through, since it is really the key to allowing us to 
get over the hump of the situation where we keep getting more 
claims in than we complete, even though we keep increasing our 
production.
    The second initiative is called the VRM system. The 
Secretary referred to it. This has to do with the methods that 
veterans use to interact with us. Right now, when a veteran 
wants to interact with us, basically he is confined to waiting 
until the normal business hours and calling us on the 
telephone. What the VRM initiative is going to do is enable a 
veteran to do a lot of things with self-service whenever he 
wants. If he wants, at 3 o'clock in the morning, to get up to 
change his address, instead of having to wait till the next 
morning to make a phone call, he can go in the system himself 
and do it. He can come in and check the status of his claim 
instead of having to call an agent the next day. He can change 
his direct deposit. There are all kinds of things that he can 
do with VRM that he can do with most other businesses he deals 
with that he has not been able to do with us before. It is 
extremely important.
    The other question I get is, why are you so confident that 
these initiatives are going to be successful? I would tell you 
that my confidence is primarily because I have seen what 
technology has been able to do for the GI Bill. I think most of 
you remember we had some problems with the GI Bill in the 
beginning. We had to do a couple of things to work out of that, 
but the fact is we are in much better shape now. The main 
reason we are in such good shape now is because of the 
technology that was developed by our IT organization under 
Secretary Baker's leadership.
    I appreciate the opportunity to answer. As you can tell, I 
am excited about this because it really is what is going to 
turn us around in the backlog area.
    Senator Reed. Thank you very much. My time has expired. But 
I think one of the--and I am no expert in business management, 
but private companies are able to reserve up front a 
significant amount of money for investment in new technologies, 
etc. One of the problems with our budgeting is everything is 
the same--personnel is the same, investing in technology is the 
same, etc. And this seems to me one of those examples where if 
we are able to reserve sufficient resources and invest them 
wisely, we will be able to save going forward and serve our 
veterans more effectively.
    But thank you, gentlemen. Thank you, Mr. Chairman.
    Senator Johnson. Senator Nelson.

                              CONSTRUCTION

    Senator Nelson. Thank you, Mr. Chairman.
    Secretary Shinseki, let me just briefly say that under your 
leadership, I really believe the VA is making the kinds of 
gains that we are really taking care of the veterans in a much, 
much more responsible way, and in a way that is far more 
current in dealing with their needs. Obviously, there are 
commitments that need to be met, and we need to be as good at 
taking care of our veterans as we are at creating them. And I 
commend you for all your efforts and success in improvement.
    The commitment made in last year's budget request to the 
Omaha VA hospital is very good news for thousands of veterans 
in Nebraska and western Iowa. The fiscal year 2011 budget 
request addresses the needs of the Omaha VA hospital by 
providing a plan and design money for what will be a much 
needed 21st century healthcare facility. And I understand the 
plan and design of this facility can take as much as 18-24 
months.
    Mr. Secretary, as we are still operating under a continuing 
resolution, you have indicated in a previous conversation that 
the budget stalemate in Washington presents the possibility of 
a delay for the Omaha VA project. And if that is a possibility 
of the delay, perhaps maybe you can help me understand, as we 
have spoken privately, about what this might do to the 
construction and fulfilling the needs of veterans in that 
region of our country.
    Secretary Shinseki. Certainly, Senator. I think, as you 
know, the project is to replace most of the existing campus. It 
will involve a new surgical suite, bed tower, intensive care 
unit, clinical and administrative services, and parking, so it 
is a significant project.
    The request in the fiscal year 2011 budget request is for 
$56 million of design monies. We have within our capability to 
do advanced planning, and so we are in the process of doing 
advanced planning now. Schematic design as it is called; we 
expect it will be probably completed by July of this summer. We 
would then look for the design dollars to be awarded so we can 
go forward.
    As long as the money arrives this year, we can go to the 
next phase, and we will then offer to the Congress the 
opportunity to allow us to carry that over for a 18-24 month 
period over the next few budget years. We would not be asking 
for new money, but it is the design monies that were awarded 
with the fiscal year 2011 budget. There may be a little delay, 
but we would be able to continue with the project.
    Following that design, we expect construction documents and 
an offering for bids. It is a phase sequence. Right now, the 
$56 million is critical because it will allow us to begin the 
next phase. Any request for dollars will be based on what that 
design criteria ends up being. That is where we are, Senator.
    Senator Nelson. And Dr. Pretzel, you are so very familiar 
with the Omaha facility. Can you give us an idea of how 
healthcare will be improved for veterans in--that will be 
accessing that hospital--that facility?
    Dr. Petzel. Thank you, Senator Nelson, I can.
    There are several major problems at the facility right now 
that are going to be corrected. The heating, ventilation, and 
air conditioning systems are out of date and they cannot be 
improved. The operating room suites are very much undersized 
and not in appropriate relationship to the intensive care unit. 
We have difficulties with water seeping through the inner and 
outer walls, etc. There are multiple problems, Senator, that 
will be corrected by this within the facility. I think, most 
importantly, we will have a state-of-the-art new facility, 
state-of-the-art intensive care unit, and state-of-the-art 
operating rooms. We will be able to operate this facility much 
more efficiently than we are able to operate the Omaha facility 
now and do a better job of accommodating the needs of the 
veterans in Nebraska and western Iowa.
    Senator Nelson. We have even experienced, as I recall, 
power outage in the middle of surgical operations, which have 
created more than a slight challenge for the healthcare of the 
veterans.
    Dr. Petzel. Yes, sir, that is true.

                               CEMETERIES

    Senator Nelson. Let me ask first with the time I have left. 
The plans that are underway for the new veterans' cemetery in 
Satrapy County, and could you comment on--I know that 
cemeteries are under your direction. Could you let us know how 
things are going that way, Mr. Muro?
    Mr. Muro. Thank you, Secretary. Thank you, Senator.
    Right now, we have two sites that have risen to the top 
that we are reviewing, and once we get through the process, we 
will actually provide the Secretary with a recommended site 
that is the best for the area. That process is moving along 
very well. Once we get to that point, the offer to sell will be 
probably mid-summer, early summer. Then we will move forward 
and we will request funding in future years for construction. 
We have the funding to purchase and to design and to conduct 
all the studies we need at this point.
    Senator Nelson. My time has expired, Mr. Chairman. Thank 
you.
    And thank you, gentlemen, for your answers.

                              CONSTRUCTION

    Senator Johnson. Senator Tester.
    Senator Tester. Thank you, Mr. Chairman. I want to thank 
you, Secretary Shinseki, and all the folks up at the table 
today. I appreciate your service. I will tell you that being on 
the Veterans Affairs Committee and on this subcommittee we get 
to see a lot of one another. I hope you appreciate that. I 
appreciate that, and I appreciate the work you do.
    A couple of things: First of all, I want to thank you, Mr. 
Secretary, and Dr. Petzel for your work on a veterans clinic in 
Billings and because it is going to help a lot. It is going to 
help prevent rural veterans in Montana from traveling 
potentially 400 miles to get a clinic once this baby is built.
    And I just wanted to talk about VA construction for 1 
minute. I know these are tight times, but in your budget, how 
do you feel--the infrastructure portion of this budget, the VA 
construction portion of this budget. Does it meet the needs of 
our veterans? I am looking at it from a rural end in rural 
America, so if you would comment, I would appreciate that.
    Secretary Shinseki. Certainly, Senator. As part of our 
review of our construction projects, one of the things we had 
to make sure of is we were focused on safety and security, both 
of veterans and the workforce. When you look at our projects, 
those projects that we are going to improve the safety and 
security of facilities migrate to the top, so there is a little 
bit of reordering. We are looking for new budget authority of 
$1.27 billion. It is not at the level that past budgets have 
been, but we have had to make some tough choices. But what it 
does do is provide balance in this budget. We support State 
cemetery grants out of this amount. State extended care grants 
also get attention. We did not zero those out to take care of 
just construction for VA; we understand that there is a 
partnership here between this Department and the States and 
being able to look after veterans.
    Minor construction request, $550 million; major 
construction request, a total of $725 million. That is a 
combination of appropriations of $590 million plus $135 million 
that we are putting into the account because we have written 
tough contracts. We have competed them, and we get a better 
rate, because of the economic situation; a better price break 
on those returns. So, $135 million of efficiencies have been 
rolled back into our major construction account.
    Major construction: 10 medical facility projects are in our 
priority list. As you know, we do partial funding as the 
requirements occur, so there are seven major medical facility 
projects underway, and then we are designing three new medical 
projects and one new cemetery project. It is a robust program.
    Senator Tester. You have got two wars, maybe more, who 
knows. Does it meet the needs of the demand of the folks you 
have got coming back from the theater converting into veterans 
in civilian life?
    Secretary Shinseki. It does at this point.

                         MILEAGE REIMBURSEMENT

    Senator Tester. Okay, good.
    Vet centers--first of all, thanks once again for getting us 
a couple more over the last few years and getting them opened 
up. They are going to be a big benefit to veterans, especially 
those with unseen injuries.
    My question is, when you go to a clinic, there is a mileage 
reimbursement. If you go to a vet center, there is not. There 
is not a mileage reimbursement for the veterans, the disabled 
veterans. I have got a bill in to remedy that situation because 
I do not think it is right, and I will get into homelessness 
and mental illness here in a second. But the question is, what 
is your perspective? You probably have not had a chance to look 
at it because we just dropped it in recently. But what is your 
overall thoughts about potentially paying disabled veterans 
mileage reimbursement to get to vet centers? Go ahead.
    Secretary Shinseki. Let me ask Dr. Petzel to comment on 
this.
    Dr. Petzel. Thank you, Mr. Secretary. Senator, that is an 
issue that we have been looking at.
    Senator Tester. Good.
    Dr. Petzel. We have been looking at that issue now over 
this last year and are in the process of developing a pilot to 
look at how this might be done and what it would cost.
    Senator Tester. Okay.
    Dr. Petzel. The issue is that in a fundamental way, because 
the vet centers are an alternate program, they are not viewed 
as being treatment. And the law, as you know, says----
    Senator Tester. Understand.
    Dr. Petzel [continuing]. That we reimburse for treatment. 
We would be delighted to work with you to try and find----

                              UNEMPLOYMENT

    Senator Tester. Yes. I would love to have that opportunity, 
and I think there is a lot of really, really, really--and that 
is why you guys--I know--I mean, there are a lot of them 
around, and rightfully so. With the unseen injuries we are 
getting out of Iraq and Afghanistan, I think they are 
critically important. And if we are keeping people away, that 
would not be good either.
    Real quick, and I just want your perspective on this. We 
talk about unemployment. What I am reading and what I am 
hearing is we have got two different kinds of unemployment in 
this country. We have got unemployment among general civilian 
population, and then we have got unemployment among our 
veterans in our civilian population. It is much, much, much 
higher. Do you have anything in this budget that will help 
remedy that?
    Secretary Shinseki. We do see the difference, Senator, and 
this is what this contingency fund is intended to look at, and 
that is, the model tells us we are going to be facing this 
factor next year. It is a first year factor for us, but we have 
mitigated the risks.
    Senator Tester. Okay. Thank you. My time is up. I just want 
to close by saying one thing, Mr. Chairman. We have six people 
at the table up here. Three of them are confirmed and three of 
them are not. I think that is a sad statement. I think that you 
guys that are not confirmed hanging out there is ridiculous in 
an agency that is so critically important as we create more and 
more veterans, to have you guys sitting there and not being 
confirmed and you have been in that position for a while. So I 
appreciate your service, especially under those conditions.
    Thank you.
    Secretary Shinseki. Thank you, Senator.

                        EQUIPMENT STERILIZATION

    Senator Johnson. Senator Blunt.
    Senator Blunt. Thank you, Chairman.
    I am going to make one positive comment about what is 
happening at the VA and share one concern of mine. Then, I 
would like to ask a question about the John Cochran Division in 
St. Louis, regarding whether there is anything in either design 
or land acquisition that is included in this budget.
    The positive comment is one I shared with you the other 
day, General Shinseki. The veterans' clinic in Branson, 
Missouri, in my old congressional district, and obviously a 
community I still represent, is likely unique in that at least 
a majority and probably a substantial majority of the people 
that visit this clinic only go there once. It is a real example 
of health IT at work. This is one of the areas where VA is 
clearly ahead of the overall medical environment. It is a good 
example of how much time, energy, and effort, you save and the 
better care that is available if doctors have access to an out-
of-town patient's file. I believe that only about 25 percent of 
the people that visit the facility go multiple times. These are 
the people who are traveling. There are a number of doctors at 
the Branson Clinic. It is a substantially sized facility. VA is 
out there in a significant way showing how health IT works, and 
I'm appreciative.
    The John Cochran Division in St. Louis, on the other hand, 
continues to have challenges. Last summer, they notified 
approximately 1,800 people who had used the dental clinic that 
the equipment had not been properly sterilized. It was a 
terrifying thing for all 1,800 people to get that notice.
    Recently, a concern about surgical sterilization of 
equipment shut down the surgical part of the facility for a few 
days, both of which led to really low ratings from the 
consumers of their confidence in the facility. The last time I 
was there, I noticed that part of their problem is the age of 
the facility. My understanding is the John Cochran Division is 
at some position in land acquisition near the facility. I am 
wondering if there is anything in this budget that impacts 
either design or land acquisition there, or other things that 
might solve those problems at the John Cochran Division.
    Secretary Shinseki. Let me call on Dr. Petzel.
    Dr. Petzel. Thank you, Mr. Secretary.
    Senator Blunt, first of all, just briefly to describe what 
is happening and go back to what has happened.
    Senator Blunt. Well, I actually think I know what has 
happened. So, I do not have much time.
    Dr. Petzel. All right.
    Senator Blunt. Just tell me----
    Dr. Petzel. I will.
    Senator Blunt [continuing]. What we are going to do about 
it.
    Dr. Petzel. There is the project that you are aware of that 
is ongoing right now which is the redoing of the Sterile 
Processing Department (SPD)----
    Senator Blunt. The sterilization.
    Dr. Petzel [continuing]. The sterilization. That is going 
to be accomplished by July 2012. It involves creating a new 
area for SPD, and then renovating the present SPD and moving 
back into it.
    We would have to get back to you about the specific things 
that are in the queue for St. Louis. There are a number of 
projects that are going to impact St. Louis in the future. We 
are just not prepared to be able to comment on that now.
    Senator Blunt. And I think one of them may involve 
Jefferson Barracks and the facility there.
    Dr. Petzel. That is another project. Jefferson Barracks is 
undergoing----
    Senator Blunt. Right.
    Dr. Petzel [continuing]. An extensive renovation.
    Senator Blunt. Yes.
    Dr. Petzel. Part of that is going to entail moving some of 
the spinal cord injury work that is done down at Jefferson 
Barracks up into the Cochran area where it is going to be 
surrounded by the intensive medical support that is needed.
    There are also additional projects that are in the queue, 
and I would like to be able to get back to you----
    Senator Blunt. That would be great, Dr. Petzel----
    Dr. Petzel [continuing]. Post-hearing.
    Senator Blunt [continuing]. If you would do that. I would 
like to see what those projects are, and how any of them may be 
impacted by this budget, and the status of where both of those 
facilities are headed.
    Dr. Petzel. Yes, sir.

                           ARLINGTON CEMETERY

    Senator Blunt. Mr. Muro, I saw this morning again another 
report on concerns about Arlington. Every one of those reports, 
I am sure, creates questions in the minds of families who now 
wonder how accurate the information is on the graves of those 
they care about. Can you give me a little update on what we are 
doing there?
    Secretary Shinseki. Senator, may I----
    Senator Blunt. Certainly.
    Secretary Shinseki [continuing]. Respond to that----
    Senator Blunt. Certainly.
    Secretary Shinseki [continuing]. Because I saw the same 
article, and I took the opportunity to pick up the phone and 
call the Secretary of the Army, John McHugh.
    Senator Blunt. Yes.
    Secretary Shinseki. Secretary McHugh assures me that he is 
working on this and is going to resolve these issues. At the 
same time, I have committed to him that all of our capabilities 
at VA are at his disposal. We have some of his people going 
through our training programs. We have provided some of our 
workforce there to augment his workforce, even as he is hiring 
folks. We are committed to helping him solve the issues he is 
wrestling with, and I think there will be a good outcome here. 
That is where we are.
    Senator Blunt. Is there a different arrangement for 
memorial affairs at Arlington than at some other veterans 
facilities? Are they all under the direct control of the 
service branches?
    Secretary Shinseki. I will ask Mr. Muro to address this.
    Mr. Muro. Are you wanting me to address how they control it 
at Arlington or at our cemetery?
    Senator Blunt. I am asking if it is different--is Arlington 
not considered one of your cemeteries. Is that right?
    Mr. Muro. Correct, it is not one of ours.

                        ADVANCED APPROPRIATIONS

    Senator Blunt. Okay. Alright. Thank you, Secretary, for 
explaining your follow-up there to me. I think I am out of 
time, though I did want to ask just briefly your sense of the 
merits of the 2-year budgeting appropriation cycle that you are 
in. Just a brief sense of that because I think that is the 
direction we ought to try to head and many other areas, if we 
could.
    Secretary Shinseki. Senator, I attribute this to the wisdom 
of the Congress in providing the advanced appropriations to 
this Department. I think we are one of very few departments to 
have this.
    What it has allowed us to do is to get away from annual 
budgeting, sort of internal pressures where at the end of the 
year if you have any money left over, you are encouraged to 
spend it because you are going to give it up anyway. As I have 
said earlier, it may even be punitive, because your next year's 
budget is reduced by that amount.
    What it has allowed us to do is to put in front of our 
leadership, the folks who bring to bear these ideas, the need 
to write good, tough contracts, which lets us be business 
oriented. We need to write good, tough contracts, and then 
compete them. You always get a better outcome. We look for an 
opportunity to have veterans who own small business, be part of 
this which is important to us because veterans hire veterans, 
and that addresses some of the other issues regarding veteran 
unemployment.
    If we do those things, at the end of the year there will be 
savings. I have guaranteed leadership there is going to be 
savings, and I have invited them not to fall into the old bad 
habits, and spend at the end of the year. Let us collect 
savings and let me work with the Congress to explain what we 
have been able to accomplish, and then take those savings and 
reinvest in future budgets so we are buying down the 
requirement for new monies.
    I know this is different. I know it is unusual. Some would 
say not a wise thing to do, but I just think this is the right 
thing to do with how we treat the monies we are entrusted with.
    Out of this year, we have a full year's budget in 
healthcare. I can see at the end of this year a $1.1 billion in 
savings. We have taken $600 million of that and bought down our 
requirement in 2012. Our budget top line remains the same, but 
$600 million of that is how we have bought down the budget with 
our savings. In 2013, $500 million is a second piece of the 
$1.1 billion. We have bought down our requirement for new 
dollars, and I am anticipating now that this will allow us to 
save another $1 billion in 2011-2012 and another $1 billion in 
2013, so that out of this 3-year cycle, I am looking for a $3 
billion reinvestment opportunity. I just think this is the 
right way for us to approach our responsibilities.
    Senator Blunt. Thank you, Secretary.
    Thank you, Chairman.
    Senator Johnson. Senator Hoeven.
    Senator Hoeven. Thank you, Mr. Chairman.
    Secretary Shinseki, I want to pick up kind of on that point 
that Senator Blunt was just talking about. I really appreciate 
your comments.
    First, I want to start, though--thank you for your service 
on behalf of our veterans. It is such incredibly important 
work, and I truly appreciate it. We all do.
    The second thing I want to mention is the VA medical 
facility in Fargo, North Dakota is outstanding. It is 
outstanding. You serve not only all of North Dakota, you serve 
a big chunk of Minnesota. You also serve into eastern Montana. 
I have toured it on a number of occasions. The facility is a 
good facility, and you are improving it, and your people there 
are caring people. And when I have gone through that facility 
and I have talked to veterans, they across the board have 
expressed appreciation for the quality of care and the quality 
of service that they get. I would encourage you, some time when 
it works for you, to come out. I would like to invite you to 
tour the facility. They are making some expansion improvements 
to it right now. But I think it is a clear demonstration of 
quality work on behalf of our great veterans, and I thank you 
for that.
    Given the budget challenges we face, which are very, very 
real, and the incredible importance of taking care of our 
veterans, what ideas do you have--and I think you started down 
that trail on Senator Blunt's last question. What can we do to 
try to make these dollars go further when we talk about taking 
care of our veterans? What kind of things can we do to help? I 
mean, flexibility and the 2-year budget cycle. What ideas do 
you have that we can help make these dollars go further?
    Secretary Shinseki. That is an excellent question, Senator. 
What we have tried to do over the past 2 years was change the 
culture here in VA into a more business orientation, and we 
have done a lot, but we still have work to do inside our 
Department. Great people come to work every day trying to do 
the right thing, but if we are not synchronized and all looking 
at the same objectives, you won't have a tendency to get 
efficiency and accountability. Those things are then bumper 
stickers that you never really get delivery on.
    The 2-year budget helps because it allows us to get away 
from the pressures of that year-to-year budget. Senator Kirk 
asked about the growth in the general account, which is the 
overhead. Well, suggesting that we ought to be more efficient 
does not usually result in efficiency. You have to put plans 
into place, you have to make clear objectives, and then you 
have to supervise, and that is the only way you get the right 
outcomes. A little bit of this issue is the growth and overhead 
that is of concern. I am happy to provide details, but it is 
the results we are looking at here.
    If I can turn $3 billion in a 3-year span of budgets, I 
think there is other opportunity here that we would like to 
continue what we believe are the right behaviors and culture. 
Long after any of us are departed from this table, if we have 
put the right behaviors, the right disciplines, and processes 
in place, then this will be a new way of doing business in this 
Department. The support of this Congress would be crucial to 
our being able to deliver that system.
    IT is the lifeblood here. Unfortunately, because we wanted 
to get control over IT, we centralized it over in Secretary 
Baker's account, so it looks like IT, but IT isn't an entity. 
It is everything we do over in healthcare. There is no 
separation between healthcare and medical IT, the same for 
benefits, and the same for cemeteries. My interest is being 
able to sustain the priorities that we have invested in so we 
can continue to deliver these returns.

                          BUDGET REQUIREMENTS

    Senator Hoeven. What are the key pressure points in terms 
of your budget and your ability to take care of veterans right 
now? You know, they are coming with post-traumatic stress 
disorder (PTSD), brain tissue injuries. We have been at war for 
more than 10 years. What are the pressing pressure points in 
terms of you taking care and meeting these needs of veterans 
vis-a-vis your budget constraints?
    Secretary Shinseki. Well, it is the growth in the number of 
veterans coming to enroll with us. As I have indicated, in 
2008, just before I arrived, we had 7.8 million veterans 
enrolled in healthcare; in 2012, that number is estimated to be 
8.6 million, or about an 800,000 growth in population over 4 
years. My expectation is that will continue to rise, and so, 
the investments in IT, in research and the quality of 
healthcare that we have underway today must continue.
    The investments in IT for veterans' benefits decisions have 
to be sustained so that we can accept this increase in the 
number of claims being submitted. As I indicated, 1 million 
claims a year is not unusual. Now we expect it will be 1.4-1.5 
million in this year alone.
    I just think that the program we have described is a good 
one. The budget supports that. We have a new strategic program 
for looking at our footprint with all of our facilities. We are 
trying to anticipate in the future where the veterans are going 
to populate, and how our current footprint is designed to meet 
that requirement. If it does not do that very well, how are we 
going to adjust over time? That is going to take a lot of work 
and a lot of engagement with the Congress to understand what 
that future plan will look like.
    Senator Hoeven. Mr. Chairman, if I might, one short follow-
up to that.
    Do you have the ability to move resources the way you need 
to provide care, and do you need significant more fixed asset 
or fixed facility to meet that population need you talked 
about, or can you focus your dollars into taking care of 
people?
    Secretary Shinseki. You know, this is a great question 
because I am trying to answer the question looking forward.
    Right now, I think we have the capability to respond in the 
way you have expressed. We do, however, from time-to-time, have 
to review our priorities, and that involves discussing them 
with the Congress. I am comfortable that we have a relationship 
and dialogue with the Congress so we can do that.
    I believe that we have the tools at this point, Senator, 
and I am happy to come back and work with you and provide a 
better answer.
    Senator Hoeven. Thank you.
    Senator Johnson. Senator Murkowski.

                          HEALTHCARE REFERRAL

    Senator Murkowski. Thank you, Mr. Chairman.
    Good morning, gentlemen.
    Mr. Secretary, thank you for your service, for your 
commitment to our veterans, to all of you. You do an 
exceptional job by them.
    Mr. Secretary, when we were here at this same hearing last 
year, I had an opportunity to discuss the practice that we see 
in Alaska of sending far too many of our veterans outside to 
Seattle for their care. And at the hearing last year, you told 
me--and I quote from the transcript--you said, ``We are going 
to look at very closely why we would send a veteran on a 2,000-
mile journey if there is competent, safe healthcare available 
close by.'' And then, Dr. Petzel, you also said, ``It's one 
thing to come down for open heart surgery, which may be a super 
special kind of thing to do, but on the other hand, routine 
surgery that could be performed in Anchorage on a contract or 
in-fee basis probably ought to be looked at.''
    And as I mentioned to the Secretary in our meeting this 
week, which I appreciate, we are making some progress in 
certain areas. We are seeing that when it relates to veterans 
who are receiving chemotherapy treatment. We are now seeing 
that care provided locally.
    The report from the VA inspector general in 2010 looked at 
the referral patterns over the years 2008 through 2009--591 
veterans were required to travel to the lower 48 during that 
time period; 63 percent of those veterans resided in either 
Anchorage or the Matsu area, which is just outside of 
Anchorage. It is the home to the most sophisticated medical 
care that we have available in Alaska.
    This week, Secretary, when we spoke, I shared with you the 
cases of two of our veterans, one a 79-year-old Anchorage 
veteran who was required to travel to Seattle for an orthopedic 
consult. The other one was a 74-year-old Anchorage veteran who 
had been directed to Seattle for goiter surgery. Both of these 
procedures could have been done, and when we asked the VA there 
in Anchorage, the standard response is, well, VA regulations 
provide that it must be done in a VA facility. Even if it is in 
Seattle, that is where the care has to be provided.
    So I am going to take this opportunity again to ask, Mr. 
Secretary, why would we send a veteran on a 2,000-mile journey 
if there is competent, safe healthcare available close by? And 
Dr. Petzel, I would ask you if you stand by your statement from 
last year that if routine surgery can be performed in 
Anchorage, it ought to be provided by contract or a fee basis 
if it cannot be done in a VA facility. So, if we can just go 
back to that colloquy that we had last year.
    Mr. Secretary.
    Dr. Petzel. Thank you, Mr. Secretary.
    Senator Murkowski, you accurately did quote what I said 
back in the hearing last year. I was pleased when we reviewed 
this to see that the chemotherapy patients have been provided 
for in Anchorage. I am not pleased with the progress we have 
made. I think there are more things that could be done. 
Specifically, we would like to work with the Indian Health 
Service (IHS), the Native tribes, and the Air Force to see, 
like the Air Force and others who contract in the community, if 
we could do a consolidated bit of contracting to get a better 
price.
    One of the issues has been the difficulty, with only one 
provider, of getting a contract that would be possible to work 
with. You have my promise that we are going to look much more 
carefully at being able to provide more of the care in the 
community. There will be an occasional thing, such as the 
example used before of open heart, where it might be in the----
    Senator Murkowski. Sure.
    Dr. Petzel [continuing]. Veteran's best interest to move. I 
stand by what I said before, and we will do a better job now of 
looking for alternatives in the community.
    Senator Murkowski. Okay. Well, we want to work with you.
    Mr. Secretary.
    Secretary Shinseki. Yes. Senator, let me just add, I think 
Dr. Petzel's response was significant. I would just say, as I 
am looking at the numbers I have, and the numbers you cited for 
2010, these numbers are based on a 2009----
    Senator Murkowski. Right.
    Secretary Shinseki [continuing]. Survey. For 2011, thus 
far, up till March, we are down to inpatient referrals to 26. 
Still, I would want to get into the 26 and then answer your 
question about why are we still sending folks. I do not have 
that detail, but from 200 or so down to 26, we are moving in 
the right direction.
    And then in outpatient referrals, from the 2009 numbers of 
600-plus, we are down to 278. So again, I would want to get in 
the details of the numbers.
    I would also add that for non-VA care, fee-basis care, we 
are paying, about $4 billion a year, and that is going to go up 
significantly over the 2012-2013 time frame. We do have the 
ability to refer patients to the economy for civilian 
healthcare in communities when we are not able to provide it. I 
will work with Dr. Petzel and with you to have a better idea of 
what we are going to try to accomplish, set some objectives, 
and then let us work at them.
    Senator Murkowski. I appreciate you stating not only that 
you will work with us on this. Again, we recognize we have made 
some progress, but I think it is clear that we can and we must 
do more.
    When you state you want to set some objectives, I 
appreciate that because you operate over there within the VA 
system from a very businesslike perspective using benchmarks 
and matrixes. I guess I would ask whether or not you can give 
me a matrix in terms of what we can anticipate or what we would 
hope to reduce the number of Alaska veterans that are being 
sent outside for care in this next fiscal year. If that is not 
something that you can give me today, maybe we can work on 
defining what that is.
    Secretary Shinseki. I am not able to give you those numbers 
today, but I am happy to work with you and try to look forward 
and anticipate what the requirements are going to be, and at 
least have a common vision of what is the likely outcome.
    Senator Murkowski. I want to try to better understand. 
Again, we keep getting the message out of Anchorage VA that 
they are limited in their ability to provide for a level of 
flexibility if the regulations say we are stuck with it. Is it 
necessary for the Congress to provide you with any additional 
legislative authority in order to reduce the number of veterans 
that are sent outside for care, because I am getting a mixed 
message out of what is coming from the State and then what I 
hear from you and your clear willingness to work with us. But 
do we need more to ensure that there is no question but that 
that authority exists to provide that care locally?
    Secretary Shinseki. I do not think at this point, Senator, 
we need any more assistance on this. Just let me get into it a 
little more deeply, and then come back and work with you on 
those outcomes. Then if you still feel that it is not 
sufficient, I am happy to work legislation with you.
    Senator Murkowski. I appreciate that, and I look forward to 
further defining how we address the care of the many veterans 
in our State. And I appreciate that.
    Thank you, Mr. Chairman.

                            NATIVE AMERICANS

    Senator Johnson. I will permit a brief second round of 
questioning.
    Secretary Shinseki, it remains important to me that we meet 
the unique needs of our Indian veterans. The Wagner State block 
was a groundbreaking partnership between the VA and IHS, and 
was long overdue. Mr. Secretary, now that the facility has been 
open for almost 1 year, how has cooperation between these two 
agencies been going, and does the VA plan on duplicating those 
efforts at other locations?
    Secretary Shinseki. Mr. Chairman, the real hero here is Dr. 
Petzel, so I am going to let him provide the details.
    Dr. Petzel. Thank you, Mr. Secretary.
    Senator Johnson, as you know, I am very familiar with the 
clinic in Wagner. It started a long time ago when I was a 
network director in Minneapolis and you and I shared the podium 
when we did the groundbreaking at----
    Senator Johnson. Yes.
    Dr. Petzel [continuing]. That place. It was a precedent-
setting effort. It is a VA-owned and operated clinic that sits 
on reservation land almost in the middle of the city of Wagner, 
and it is used by both American Indians and non-Indian 
veterans. It is an example that we would like to transmit to 
other parts of the country.
    There have been a few others now, and we do have a number 
of clinics that are located proximate to reservations, but 
really not very many of them that are on reservations. Wagner 
has been a good example. It is operating. They have 370 
patients enrolled. We think it is something that could be done 
in other parts of the country.
    But the difficulty, and the big lesson learned there, was 
the fact it was very difficult to get the tribes, the IHS, the 
VA, and the local community all together on the same page 
deciding what to do. It took us actually 10 years to develop 
that. With the new memorandum of understanding (MOU) between 
the VA and the IHS, I am hoping that we can truncate that 
process and accomplish getting more of these clinics built in a 
much, much shorter period of time.
    Senator Johnson. Do you have a concrete example of another 
VA-IHS combination?
    Dr. Petzel. Well, I do in South Dakota actually----
    Senator Johnson. Yes.
    Dr. Petzel [continuing]. Where there has been a lot of 
progress made. We have a PTSD treatment program on the 
reservation at Pine Ridge. We do telehealth in both Rosebud and 
Pine Ridge in South Dakota. We have compensated work therapy 
programs at four Indian reservations in South Dakota. So there 
are a lot of examples of us being present on the reservations.
    They are very remote, and they are underserved. There is 
just no doubt about the fact they are underserved. Just to 
point out the value and the importance of doing this, in South 
Dakota, 50 percent of the American Indian males are veterans.
    Senator Johnson. Yes.
    Dr. Petzel. This is a warrior society. They participate in 
our military extensively, and I think we need to do a better 
job, quite frankly, of meeting their needs on the reservation.
    Senator Johnson. Dr. Petzel, the healthcare reform bill 
authorized the IHS to enter into arrangements with the VA to 
share not just medical facilities, but also services. Are there 
plans underway to expand the sharing of healthcare services 
between the VA and IHS for Indian veterans in Wagner?
    Dr. Petzel. Senator, thank you, Mr. Secretary.
    Senator, I cannot point to a specific thing that is going 
on in Wagner. I will go back and we can look and hopefully get 
back to you, as a post-hearing response. I do know that in a 
general sense across the country, once our attorneys in the IHS 
and the VA have agreed on what exactly the legislation means 
there will be substantial opportunities to share services 
around the country, particularly for us to provide specialty 
care referral services for the IHS, and for us to, as you had 
mentioned earlier, co-locate some of our primary care and 
mental health facilities on reservations. I anticipate there 
will be a growth in our activity.
    [The information was not available at press time.]
    Senator Johnson. Mr. Secretary, what is the VA doing to 
improve access to VA healthcare and counseling on tribal lands?
    Secretary Shinseki. Mr. Chairman, the basis for our 
approach here, and we are just at the inaugural stages of this, 
is we just signed an MOU with the IHS in October of last year, 
and that is now beginning to promulgate the activities that I 
think over time will deliver what Dr. Petzel is describing.
    Just as an example here, the Wagner community-based 
outpatient clinic, as Dr. Petzel describes, is built on Yankton 
Sioux tribal lands, and it is bringing in more than just tribal 
veterans to that location. It is sized to fit about 700-800 
veterans, and right now, the population is growing. We are 
about at the 370-400 mark, and there are lots of opportunity 
for growth. A lot of what will be required will be driven by 
the veterans who come there looking for services. Right now, we 
provide primary care, mental health services, and home-based 
primary care out of Wagner, as well as contracted specialty 
care. It is open 5 days a week, with normal working hours, so 
there is great access for veterans in the 10-county area that 
is serviced by Wagner.

                            INTEROPERABILITY

    Senator Johnson. Senator Kirk.
    Senator Kirk. Thank you, Mr. Chairman.
    Back to health IT, especially medical records, what would 
be the difficulty in just saying across the board that all 
imagery are JPEGs, all documentation is Word documents, all 
databases are Access databases, so that we could just kill the 
proprietary thing right off the bat and have almost 
interoperability tomorrow?
    Mr. Baker. Thank you, Senator.
    I think the one in there that I would be most concerned 
about would be specifying on the database side. Data 
representation is probably the toughest part of that one.
    I would tell you that we are very focused on incorporating 
a lot more commercial-off-the-shelf--private-sector software, 
into what we do. It is our entire strategy.
    Senator Kirk. Right.
    Mr. Baker. We recognize that we cannot build electronic 
health records (EHRs) at the rate that private sector does. If 
you look, we are blessed by the fact that we build and own one, 
and it is still one of the best EHR systems out there.
    Our entire strategy going forward is to figure out how to 
bring in a lot more commercial-off-the-shelf into what we do 
and turn that into our entire strategy for EHRs.
    Senator Kirk. What is wrong with just having you use the 
Department of Defense (DOD) stuff since they are generating 
veterans, or since you are a little bit larger than them right 
now, having them just surrender and using the VA standard? I 
mean, honestly.
    Secretary Shinseki. I would just say that this has been a 
discussion that has been underway for 2 years now, and I think 
between the two of us, DOD understands that its current system 
capabilities are not going to be what they need in the future, 
so they are looking for a new direction.
    We have a terrific EHR, but again, it is about 20 years in 
being. We are going to have to just also ensure the 
sustainability of that system. It is a great opportunity for 
both of us to put our heads together. Secretary Gates and I and 
our staffs met on the 17th of March to come to an agreement on 
a joint common platform. We have done that. Our staffs now have 
the responsibility by our next meeting in early May to come 
back with an implementation plan and the details of what that 
means. At that point, I am happy to come back and explain what 
our future will look like, and I expect that commercial-off-
the-shelf will be very heavily represented.
    Senator Kirk. The chairman and I were briefly talking. I 
think it would be great if he and I had you and Secretary Gates 
up here in mid-May to discuss how far you got and to have the 
Appropriations Committee propel you forward on defeating one 
side or the other, and just going with a common standard so 
that we are not inventing very much.
    Secretary Shinseki. I am happy to come back and provide 
that update to the subcommittee. I cannot speak for Secretary 
Gates' calendar.
    Senator Kirk. I was just talking with Tina. She said, you 
know, if we include Chairman Inouye and Chairman Cochran, it 
might propel attendance.
    Secretary Shinseki. I think we have a good solution. This 
is what he and I have been working on for 2 years, and I think 
there is real potential for an outcome here that is different 
than anything that has been tried over the previous decades.

                          CLAIMS ADJUDICATION

    Senator Kirk. Great. I read the House transcript of your 
hearing pretty closely. In it, Chairman Culberson laid out an 
inspector general (IG) report that said callers to the VA had 
only a 49-percent chance of reaching an agent and getting 
correct information; that in claims processing, 23 percent of 
claims were processed incorrectly, and 50 percent of the 
compensation determinations were unnecessarily delayed. How 
have you responded to that IG report that the House 
Appropriations Committee focused so much attention on?
    Secretary Shinseki. Mr. Walcoff.
    Mr. Walcoff. Senator, what you are actually quoting from 
are several different reports that the IG has done involving 
different parts of the VBA operation.
    The reports on the quality of the claims adjudication, I 
would tell you that we recognize the fact that we have got to 
do something to improve the quality of our adjudications. That 
is why the technology part is so important because we recognize 
that just doing more claims at the current accuracy rate that 
we are doing is not the answer, we have got to make sure we 
improve our quality. We are working to do that.
    Senator Kirk. I guess more worrying is the--only 49 percent 
chance of a caller----
    Mr. Walcoff. I am going to make a statement on that. We had 
some disagreement with them on the methodology they used to 
come up with that statistic. We did not concur with that fact 
the way that was quoted. Now, that being said, I will tell you 
that there is a lot of room for improvement in the quality of 
the call agent's work at our call centers. I am not going to 
deny that. We have done a lot of work since that report came 
out on reorganizing our training, having it more centralized, 
and having the individual call centers more accountable for how 
the training is being implemented. While I might not 
necessarily agree with that specific number, I will tell you 
that there is definitely room for improvement, and we are 
definitely trying to improve.
    Senator Kirk. Last question, Mr. Chairman. The Congress 
appropriated a very large amount of money for health IT over at 
the Department of Health and Human Services (HHS). Can you 
describe how you have reached out to HHS who has what I would 
technically describe as a vast amount of money that we 
appropriated on the IT side?
    Secretary Shinseki. Senator, we have been working with HHS. 
Part of the effort between Secretary Gates and I, first of all, 
we have two good EHRs, and our belief is that if we can merge 
our capabilities here and come out with this joint common 
platform in a way that is useful--if we are attentive to 
everyone else, not just the two of us, and have it be useful 
for HHS to use as a model as it looks forward, it will be 
cheaper and faster as well.
    Senator Kirk. If I called Secretary Sebelius and said, how 
about the VA electronic record becoming the Medicare record, 
would she fight me?
    Secretary Shinseki. I do not know the answer to that, but I 
can tell you that we have been working with her IT folks in 
this arena and keeping them abreast of our work with DOD.
    Senator Kirk. Great.
    Mr. Chairman, thank you.
    Secretary Shinseki. May I just add, Mr. Chairman, to Mr. 
Walcoff's remarks? And the question is the IG report. I do not 
quarrel with the IG report. I think what you will see in our 
efforts to automate addresses most of those sort of 
observations in the report.
    First of all, we have a growth in veterans coming to us, 
and that is accompanied by a growth in the amount of claims we 
are getting every year. The numbers are significant. Our 
ability to intervene here with just hiring more people, we have 
realized, at least I have realized in 2 years, you cannot hire 
and train fast enough because the quality you want comes with 
20-30 years of claims processing. That is where the experience 
and the insights make for good, high-quality outcomes. Frankly, 
our quality employees with 2 or 3 years' experience cannot 
match that.
    What we can match is if designing this rules-based engine 
that takes advantage of that 30-year set of experience and put 
it into the rules, then the 2- or 3-year experienced employee 
fills out the right data, pushes the button, and the computer 
can take over.
    Senator Kirk. And by rules-based, you know, for people out 
in the public, this is like TurboTax.
    Secretary Shinseki. It is.
    Senator Kirk. It asks you a set of questions, and based on 
those answers, generates a tax return. This would ask a set of 
questions and would generate a disability determination.
    Secretary Shinseki. Absolutely.
    Senator Kirk. Yes.
    Secretary Shinseki. Last year we produced 1 million claims 
in 2010. Just so there is clear sighting on what is involved in 
here, I would tell the subcommittee that 57.6 percent of those 
claims that we produced were reopened compensation claims, 
either a request for increase, a new condition that wanted us 
to take cognizance of, or a claim that had been previously 
denied. When you are in paper, every resubmission is a new 
start.
    Senator Kirk. Right.
    Secretary Shinseki. When you get that information in 
automation, 60 percent of the work is already done. It has 
already developed, and what you are doing is you are pulling 
that data up and reviewing it. That is why we want to get to 
this automation piece and why that is going to make a 
tremendous change in the way we have been doing business.
    I would say of the phone calls that come in and cannot get 
a satisfactory answer, 50 percent of the calls are 
administrative like I want to change my number of 
beneficiaries; I want to change my mailing address; or I want 
to change my bank account. It is either those administrative 
calls or what is the status of my claim. It is sort of like 
that, with where is my FedEx package en route. All of this is 
through automation, and that is why the other project, VRM, is 
really the opportunity for a veteran to check in the system 
without having to make a phone call and wait for a call back or 
try to find someone with the right information. They can 
influence their interactions with us at a time and a place of 
their choosing, and that is why I think this automation 
solution in both these categories, claims and relationship 
management, hold the best opportunity for a major and 
significant change in how veterans interact with us and their 
satisfaction.

                             RURAL VETERANS

    Senator Johnson. Senator Murkowski, do you have any follow-
up questions?
    Senator Murkowski. Just very quickly, Mr. Chairman, if I 
may. And this follows on your inquiry about working with the 
IHS.
    Mr. Secretary, we have been talking for a number of years 
now about how we can better provide access for our Alaska 
Native veterans that are living in some pretty far flung parts 
of the State, some pretty remote areas, and how we can provide 
care for them closer to their homes, utilizing the Alaska 
Native Health System. And I appreciate your comment earlier 
about working together more collaboratively within IHS and with 
the tribes.
    We have got a tribal liaison that has been created within 
the VA. I appreciate that. I really hope that we are able to 
see some positive action out of that. We will await that.
    A couple of years ago, the Anchorage VA launched this pilot 
project to provide our rural veterans with a limited number of 
appointments at Native health facilities or community centers. 
We had an opportunity to discuss the independent report that 
came out August of last year, and it was not surprising that it 
was as big a disappointment, I think, as the report concludes. 
I had sent you a letter earlier saying that I was concerned 
about the design of this and how we were really going to be 
able to get the information out. What we learned was that 92 
percent of the veterans surveyed indicated they had never heard 
of it. Many others said they did not use the pilot because they 
did not understand how it worked. Providers expressed their 
concerns that it was too limited in scope to provide for 
adequate level of care.
    So we are through that. We are now where we are, and it 
does not seem like we have figured out what that solution is, 
how we provide for that better level of access to our rural 
veterans and more specifically, to our Alaska Native veterans.
    Have we learned anything from this pilot project? What--and 
this is a very general question to you, but where do we go next 
in our efforts to provide care for our rural veterans?
    Secretary Shinseki. Let me call on Dr. Petzel, and I will 
conclude.
    Dr. Petzel. Thank you, Mr. Secretary.
    Senator Murkowski, you accurately described the results of 
that pilot. My personal feeling is that not all of the right 
things were done in terms of implementing that pilot. As you 
pointed out, for making people aware, and providing for a case 
manager coordinator to see that people actually used it and 
then follow through to see that the people that were eligible 
and in the area could actually use the clinic.
    I think with the new MOU with the IHS and then the sharing 
arrangements that are described in that MOU, we have got an 
opportunity to go back and look at veterans using IHS clinics.
    One of the issues that has arisen around the country, not 
just in Alaska, is the difficulty sometimes of having non-
Native people use a facility that was dedicated to Natives. The 
fact that we have the interest on the part of the IHS at the 
national level in seeing that this occurs and that we do this, 
I think is going to go a long ways toward overcoming that 
resistance that we felt in some areas.
    I think one of the immediate answers to your question is 
that we need to go back and re-look at and reinvigorate the 
idea of us using Native clinics for non-Native veterans, number 
one.
    Number two is what I mentioned earlier, and that is a 
concerted effort at contracting for-fee care with the Air Force 
and the Alaska Native community. I just believe that we would 
provide a substantial amount of leverage if all three of us got 
together and looked for one contract with a network perhaps of 
providers that could better meet the needs of the Air Force, 
the VA, and the Native community.
    You have got my promise that we are going to go back and 
look at trying to reinvigorate our using the Native clinics.
    Secretary Shinseki. Senator, let me just conclude. I think 
if we were to look at the history of VA healthcare delivery, I 
think we would all recognize decades ago we had large 
hospitals, and healthcare delivery was, come to the hospital 
and get your healthcare. In the past 15 years or so, some 
bright folks at VA decided to change that delivery model and to 
push from those hospitals out to the communities where veterans 
live. That is why we have community-based outpatient clinics 
and vet centers and mobile clinics, and so forth. I think that 
they were a good first step in trying to outreach to where the 
veteran populations were.
    With the chairman's leadership, we have begun a rural 
program within VA, which takes that outreach to the next step 
with $250 million a year now for several years and that 
addresses the rural requirements, which is creating more 
opportunities for access to veterans.
    I do not think what we have done is quite visualized what 
you are describing, and that is the longer reach to the highly 
rural areas where there are no roads, and it is difficult to 
get in to provide healthcare in the way we have traditionally 
provided it. That is why this MOU with the IHS is significant 
for us. I do not think we have maximized yet the capabilities 
here, and we probably need to take that vision--that next 
step--and codify some very specific objectives that we intend 
to accomplish here. I'm happy to do that with you and your 
staff and also with the chairman, who has been helpful here in 
the rural efforts.
    Senator Murkowski. I think the answer is clearly there. It 
is not as if we need to create or build VA facilities in every 
small community in America. That is not our answer. But where 
you do have systems, Federal healthcare systems, whether it is 
within the military, the DOD, or whether it is within IHS. 
Looking at it from the veteran's perspective, they are looking 
it and they are saying, ``It is all Federal money here. I am a 
veteran. I am a Native. There ought to be some ability to work 
within this Federal system.'' It is not unlike what Senator 
Kirk has been talking about in terms of the electronic records. 
I think the average individual just cannot fathom that the VA 
does not connect with, speak with, DOD when it comes to the 
records of that individual who at one point in time was active 
military, then moved to the veteran. He has not changed. His 
health status has not changed, and yet his records do not 
travel with him. And it is not unlike being able to receive a 
level of care. You are working within different Federal health 
systems. There must be some better way that we can help to 
facilitate this. So again, I urge you as we look to these 
systems that we are setting up, whether it is our tribal 
liaisons to work within--between the VA and the IHS, the MOUs 
that we have. I think we need to get more aggressive because 
right now what happens is the promise that we have made to our 
veterans when it comes to healthcare seems to be only able to 
be fulfilled if you happen to live in the right part of the 
country. And that was not the promise. So we have got to be a 
little more flexible.
    I think you have given the commitment to work with us, and 
I look forward to working with the chairman on this as well.
    Thank you.
    Secretary Shinseki. Senator, I would just conclude that the 
MOU we signed with the IHS is significant because we have begun 
to implement and to define what that really means. To this 
point, it includes pharmaceutical support, telehealth, homeless 
services, cultural competence education, co-managing patients, 
physician cross-credentialing, and building of community-based 
outpatient clinics located near and even on tribal lands, which 
you know is a serious discussion, including transportation 
programs. We have begun to flush out what that MOU represented, 
and we just need to do that faster and better.
    Senator Murkowski. Thank you, Mr. Chairman.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Johnson. I would like to thank the Secretary and 
those that accompanied him for appearing before this 
subcommittee. We look forward to working with you this year.
    For the information of the members, questions for the 
record should be submitted to the subcommittee staff by the 
close of business on April 7.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
               Questions Submitted by Senator Tim Johnson
            strategic capital investment plan (10-year plan)
    Question. Mr. Secretary, the budget release was accompanied by the 
Department's Strategic Capital Investment Plan (SCIP). This plan 
outlines the Department of Veterans Affairs' (VA's) capital needs 
totaling between $55 and $60 billion over 10 years. Yet the VA is 
estimating it will spend a combined $720 million less on all of its 
construction programs in fiscal year 2012 than in fiscal year 2011.
    How do you plan to achieve completion of the plan if budget 
requests continue to shrink?
    Answer. The intent of the SCIP process is to provide, for the first 
time, a comprehensive and complete picture of VA's current inventory 
and outline the steps needed to enable VA to continually improve the 
delivery of benefits and services to veterans, their families, and 
their survivors. The fiscal year 2012 SCIP process identified $53-$65 
billion in cost estimates over the course of the 10-year planning 
horizon.
    The SCIP plan provides a rational, data-driven strategic framework 
to ensure all capital investments are focused on the most critical 
infrastructure needs first and funded in priority order. Safety and 
security is the criteria with the highest weight so projects that have 
the greatest impact in this area typically rank high and are included 
in our budget request. For example the highest ranking major 
construction projects address seismic issues at West Los Angeles and 
San Francisco, California, and Reno, Nevada. Furthermore, because the 
plan is data-driven and prioritizes projects based on identified needs, 
it ensures that VA uses the best value solutions to provide the highest 
quality benefits and services to veterans, their families, and 
survivors. The SCIP process also emphasizes the use of noncapital 
solutions to close gaps.
    VA's fiscal year 2012 budget submission reflects choices that are 
made each year balancing the construction needs identified in the SCIP 
10-year plan with other VA priorities. The advantage to the SCIP 
process is that the plan focuses resources on the highest capital asset 
priorities.
                  veterans benefits management system
    Question. Mr. Secretary, the Department has been in the process of 
developing its new paperless claims processing system--or Veterans 
Benefits Management System (VBMS)--for several years now. I understand 
that the first phase of VBMS is currently being tested at the VA in 
Providence, Rhode Island.
    Can you tell us when you expect this system to be fully deployed?
    Answer. The VBMS initiative involves business transformation 
efforts coupled with incremental technology releases to modernize the 
benefits adjudication process. There are three successive phases that 
are designed to develop and test process improvements and VBMS 
technology solutions in a production claims setting. Full national 
deployment is scheduled to begin in calendar year 2012, with completion 
projected in calendar year 2013.
    As you have pointed out, VBMS is a critical part of your 
transformation initiative and seems to be one of the key pieces in your 
plan to eliminate the claims backlog and wait times.
    Question. When can we expect to see tangible results from this 
system?
    Answer. National deployment of VBMS will begin in calendar year 
2012, with a staggered rollout to regional offices. Regional offices 
will deploy VBMS in groups of three to five offices. Offices should 
expect to see tangible results within 6-9 months postdeployment as they 
work through their existing inventory of paper-based claims and 
transition to the paperless environment. All offices in the Veterans 
Benefits Administration are projected to transition to VBMS by the end 
of calendar year 2013.
    Question. In other words, when will this system actually lower the 
average time a vet has to wait for a claim to be processed?
    Answer. As VBMS is deployed in small groups, processing times for 
those regional offices will be reduced as they work through the paper-
based inventory and transition into the paperless environment. Veterans 
should expect to see a reduction in processing time within 6-9 months 
of their regional office of jurisdiction transitioning to VBMS. 
Ultimately, VBMS will provide the technology solution to achieve the 
goal of no veterans waiting more than 125 days for a quality decision 
on their claim.
    Question. The VA was a pioneer in the development of electronic 
health records. However, the current system was designed in the 1980s 
and needs to be updated. The Department of Defense (DOD) is in the same 
boat. Over the years, this subcommittee has strongly encouraged both 
Departments to develop systems based on the same designs so that each 
aren't reinventing the wheel and doubling the cost to taxpayers.
    Have you and Secretary Gates made a decision to pursue systems 
based on the same architecture?
    Answer. Yes. In a meeting on May 2, 2011, Secretary Shinseki and 
Secretary Gates agreed to pursue a joint electronic health record.
    Question. If not, why not, and if you have, when will development 
begin?
    Answer. DOD Secretary Gates and VA Secretary Shinseki formally 
agreed on March 17, 2011, that the two Departments will work 
cooperatively toward a common electronic health record (iEHR). The iEHR 
is currently in the early planning phases. Planners have agreed to 
transform the team structure to best support the proposed governance 
model.
                             medicare rates
    Question. Mr. Secretary, the VA is moving toward charging Medicare 
rates for certain services. I believe you are in the process of 
shifting to that model with dialysis right now and your budget assumes 
that you will also begin doing the same with ambulatory services in 
fiscal year 2012. There has been concern raised that moving to the 
lower Medicare rates could disrupt services for vets, especially in 
rural areas.
    How do you plan to ensure that services for vets are not disrupted?
    Answer. Dialysis is a service provided by VA as part of the 
veterans medical benefits package, and VA provides dialysis treatment 
within VA or by purchasing dialysis treatments from non-VA providers 
when such care is unavailable internally. VA is currently evaluating 
the risks associated to veteran access and VA costs if large provider 
groups decide to not accept veterans at the Centers for Medicare & 
Medicaid Services (CMS) rates. We believe many, if not most, providers 
will accept the CMS rates as these are the same rates reimbursed by 
other Federal payers. As a result we anticipate that there will be 
little to no impact on access to care for veterans. If we observe any 
negative impact new contractual agreements may be utilized to ensure 
our veterans continue to receive dialysis services closer to home. If 
contracts are required, VA will work in those specific areas to ensure 
no negative impact to access for these healthcare services.
                     black hills health care system
    Question. Secretary Shinseki, 1 year ago, as rumors were swirling 
in South Dakota about changes to the Black Hills Health Care System, 
you assured me that before any final decisions were made, the VA would 
hold local town hall meetings to receive input from veterans and 
employees. I noticed that in the Department's SCIP, a project to build 
a new domiciliary in Rapid City, South Dakota, ranked No. 7. Such a 
project would have a significant impact on the Hot Springs VA campus 
and the Hot Springs community, where the domiciliary is located. I also 
understand there are efforts underway to expand the Rapid City 
community-based outpatient center.
    Secretary Shinseki, what is the VA's overall, long-term plan for 
the Black Hills Health Care System?
    Answer. We are working to develop a feasible long-term plan for VA 
Black Hills that aligns services to veterans needs and locates more 
services closer to where the larger groups of veterans live. 
Demographic changes and migration of veterans, jobs, and other services 
to larger population centers in western South Dakota and northwestern 
Nebraska are forcing us to evaluate whether the current service 
configuration and locations of care are appropriate for optimal service 
to veterans both now and in the future. I can assure you that prior to 
any final decisions being made about Black Hills, veterans and 
stakeholder input will be received.
    Question. When will this be communicated to the veterans and VA 
staff in the Black Hills?
    Answer. No specific plan for re-configuration has been presented to 
the Secretary at this time. As options are developed, VA will ensure 
that all stakeholders, including veterans, Members of Congress, service 
organizations, employees, and the community are included in the 
discussion.
                                 ______
                                 
             Question Submitted by Senator Mary L. Landrieu
                            contingency fund
    Question. In the current fiscal environment, it is important that 
we look for inventive solutions to meet the needs of our growing 
veteran population while remaining fiscally responsible. We are also at 
a time when transparency is paramount in the way that we build and 
execute our budgets. I would like to commend Secretary Shinseki for 
innovative use of a contingency fund for veterans medical services.
    Based on this backdrop, what are the trigger points that would 
warrant the use of the $940 million contingency fund?
    Answer. Section 226 of the Administrative Provisions proposed in 
the 2012 President's budget states that:

``. . . such funds shall only be available upon a determination by the 
Secretary of Veterans Affairs, with the concurrence of the Director of 
the Office of Management and Budget, that:
  (a) The most recent data available for:
    (1) National unemployment rates,
    (2) Enrollees' utilization rates, and
    (3) Obligations for Medical Services,
validates the economic conditions projected in the Enrollee Health Care 
Projection Model, and
  (b) Additional funding is required to offset the impact of such 
        factors.''
                                 ______
                                 
               Questions Submitted by Senator Ben Nelson
                  medical certification and employment
    Question. I recently met with a group of Iraq and Afghanistan 
veterans, two of whom were medically trained personnel who served on 
the front lines treating injured servicemembers. When they separated 
from the military, these veterans tried to continue their medical 
service in the community, but found that they lacked the State and 
local certifications to secure a job. Now both of these vets are 
unemployed and are faced with the decision to take 1 year or more, 
using their GI Bill benefits, to go through certification programs for 
skills they may already have. This seems to me to be a misutilization 
of two great resources: our combat veterans who have great training and 
real-world experience, and our GI Bill funds which may be paying for 
duplicate training. I understand it is not just our medical personnel 
who are facing this dilemma, this problem crosses multiple disciplines, 
including mechanics, firefighters, military police, etc.
    Has the VA looked into this particular issue of specialized fields 
that require certification and what could perhaps be done for veterans 
to capitalize on their military training and service, so that we aren't 
duplicating money, time and training for the same specialties?
    Answer. The Veterans Health Administration (VHA) staff is actively 
engaged with the Office of Personnel Management, and participated in a 
March 29, 2011, mini-summit on this issue. The purpose of the summit 
was to better understand the environment affecting veterans and 
transitioning servicemembers with medical backgrounds seeking Federal 
nursing positions. Additionally, there was discussion regarding the 
creation of a career track to assist and guide these former medics and 
corpsmen who desire Federal nursing careers. Executives from VHA are 
assigned and actively working on subgroups to assist in developing 
strategies to improve recruitment into nursing and other allied health 
occupations. Federal agencies, colleges and universities, and other 
organizations are collaborating on these teams to identify potential 
solutions.
    Qualification standards for nursing and some other occupations do 
require that candidates be licensed and/or credentialed to practice in 
their fields. Licensing standards traditionally rest with organizations 
external to VHA.
    GI Bill benefits may be used to pay the costs associated with 
licensing and/or certification. If specific additional training is 
required to achieve a license or certification, the GI Bill could also 
be used for that training.
    Question. What are we doing to help our veterans translate their 
military service into the civilian workforce?
    Answer. The Department of Veterans Affairs (VA) will work with the 
Departments of Defense and Labor, accrediting agencies, and certifying 
bodies to ensure that the training and work experience that 
servicemembers receive will be acceptable for civilian employment.
    At the present time, all schools and programs approved for VA 
education benefits must have processes in place to grant credit for 
prior training and experience. Each individual student's records must 
be evaluated, and credit granted as appropriate. Schools and programs 
make the final determination of whether a student will receive credit 
for prior training and experience.
    Additionally, vocational rehabilitation and employment (VR&E) 
counselors meet individually with each veteran or servicemember seeking 
our services to assess their rehabilitation needs, set employment 
goals, and determine the most effective means to achieve successful 
outcomes.
    As part of a comprehensive assessment, VR&E counselors conduct a 
transferable skills analysis to determine how an individual's previous 
education or experience may be used to qualify for employment in a 
similar occupation or related field. As a result of the assessment, the 
individual may be able to identify a shorter path to suitable 
employment that is compatible with his or her interests, aptitudes, and 
abilities. The individual and the VR&E counselor may develop a 
rehabilitation plan focused on VR&E's rapid access to employment track. 
VR&E provides employment assistance services that include short-term 
training or certification examinations, if needed to qualify for 
employment in the chosen occupation.
    If the comprehensive assessment indicates that a longer period of 
education or training is needed to prepare for competitive employment, 
VR&E can help with transitional employment while the individual 
participates in VR&E's long-term services track. Depending on the 
individual's financial needs and the rate of pursuit of training, 
assistance may be provided through a work-study position or through job 
placement services focused on supplementing the monthly subsistence 
allowance with full-time or part-time work that would not interfere 
with completion of the rehabilitation plan.
                                 ______
                                 
               Questions Submitted by Senator Mark Pryor
                                savings
    Question. On March 1, 2011, the Government Accountability Office 
(GAO) released a report with recommendations to reduce duplication and 
save money across almost every Federal agency. On March 8, 2011, I sent 
letters to various agencies asking them to review the recommendations 
and report back to me regarding whether or not the agency agrees with 
GAO's findings and advise me of any actions taken or planned to be 
taken to address GAO's findings. I sent a letter to the Department of 
Veterans Affairs (VA) but have not gotten a response. GAO had three 
specific areas for the VA to look at.
    Opportunities for the Department of Defense (DOD) and the VA to 
jointly modernize electronic health record systems.
    Answer. The VA is responding to Senator Pryor's letter. In a 
meeting on May 2, 2011, Secretary Shinseki and Secretary Gates agreed 
to pursue a joint electronic health record. This is a complex, large-
scale effort to modernize the health records systems of the two 
Departments in a manner that will allow for unprecedented amounts of 
data-sharing. This effort will produce enormous cost-savings for 
taxpayers over the long term through the use of large-scale 
efficiencies.
    The integrated electronic health record (iEHR) when completed, will 
be a national model for capturing, storing, and sharing electronic 
health information, and will eliminate the costly duplicative medical 
testing that typically occurs as Active-Duty service personnel 
transition out of the military and over to VA healthcare facilities for 
medical care.
    Question. The need to control drug costs and increase joint 
contracting when cost-effecting within the VA and DOD.
    The VA and DOD currently have 88 joint national generic 
pharmaceutical contracts. The VA/DOD joint contracting subcommittee of 
the Federal Pharmacy Executive Steering Committee (FPESC) is focusing 
on increasing this number. There are currently 30 joint proposed 
contracts undergoing clinical review, and 8 joint pending contracts in 
various stages of contracting at the National Acquisition Center. It 
should be noted that because VA and DOD contract requirements can be 
extensive, a joint contract may actually decrease the number of bids 
and may result in no award.
    Under the current formulary management systems, the opportunity for 
VA/DOD joint national contracting for pharmaceuticals is limited to 
generic drugs. Alteration of the structure of one or both formulary 
systems used by VA and DOD would be required in order to increase joint 
contracting opportunities for branded drugs; requiring legislative and/
or regulatory changes. The FPESC subcommittee for joint contracting 
will continue to review both new and existing drugs for the possibility 
of joint contracting. The DOD and VA will continue to optimize joint 
contracts for generic drugs as joint contracts are currently in 
negotiations for previous blockbuster drugs such as losartan, 
tamsulosin, and ramipril.
    Question. The need to improve cost-effectiveness and enhance 
services for transportation-disadvantaged persons. Have you had a 
chance to look at these recommendations? What are your thoughts on 
them?
    Answer. The VA has included the VA Beneficiary Travel Program as 
part of its Health Care Efficiency Initiative. The program has been 
closely reviewed and areas for improvement identified with revised 
policy, procedures, and technical solutions currently being implemented 
that will result in improved efficiencies and cost-savings in the 
provision of this benefit.
    VA recently initiated the Veterans Transportation Service (VTS) 
which seeks to overcome barriers to access, especially for veterans who 
are visually impaired, elderly, or immobilized due to disease or 
disability, and those living in rural and highly rural areas. VTS will 
increase transportation resources and options for all veterans, but 
also focus on improving efficiency of existing transportation resources 
through use of 21st century technology including ridesharing software 
and global positioning system (GPS) units. The program is established 
at four sites and is currently being implemented at an additional 22 
facilities.
    In addition to the long-standing collaborative effort with the 
Disabled American Veterans' Veterans Transportation Network that 
provides transport to veterans otherwise not eligible for beneficiary 
travel, VA is drafting regulations and procedural guidance to implement 
section 307 of Public Law 111-163, which authorized a program of grants 
for veterans service organizations to provide transportation services 
to highly rural veterans. This program will allow VA to support 
veterans service organization efforts to provide innovative means to 
transport veterans to healthcare. Once the program is operational, 
access to VA healthcare will increase for certain veterans currently 
experiencing barriers to VA healthcare due to transportation issues.
    VA currently utilizes public and commercial transport services for 
both special mode (ambulance, wheelchair van, etc.) and common carrier 
(bus, taxi, airplane, train, boat, or ferry) transportation of eligible 
beneficiaries. Veterans integrated service networks and individual 
healthcare facilities are encouraged to enter into contracts for such 
services whenever possible. They also have authority to arrange 
services on an individual basis as required, and to reimburse for 
transport not previously authorized in certain circumstances. Field 
stations are encouraged to explore all available local, regional, 
State, and Federal transportation resources to provide services to 
eligible veterans at VA expense, as well as to assist veterans who do 
not meet beneficiary travel eligibility with potential transportation 
options.
    In addition, as an agency member of United We Ride, VA is working 
with the Departments of Labor, Defense, and Transportation (among 
others) on a veterans initiative that will make it easier for veterans, 
military families, and other community members to learn about and 
arrange for locally available transportation services that connect them 
with work, education, healthcare, and other vital services.
                              homelessness
    Question. In the Department's fiscal year 2012 budget proposal, the 
administration requests a 17.5-percent increase in funding for programs 
that prevent and reduce homelessness among veterans. Part of this 
increase includes additional funding to better coordinate case 
management with the Department of Housing and Urban Development (HUD) 
through the HUD-Veterans Affairs Supported Housing (HUD-VASH) program. 
In the recently released GAO report on duplicative Government programs, 
GAO found that there are seven Federal agencies and more than 20 
programs that address homelessness and that better coordination would 
minimize fragmentation and overlap.
    How are you coordinating with the other agencies involved in 
addressing homelessness?
    Answer. To eliminate homelessness among veterans, VA must 
coordinate these and other efforts with internal and external 
stakeholders. This strategy is a cornerstone of VA's Plan to End 
Homelessness Among Veterans. VA, along with other Federal partners and 
key stakeholders, has been an active participant in the planning and 
implementation of the U.S. Interagency Council on Homelessness's 
(USICH's) Federal Strategic Plan to Prevent and End Homelessness. Both 
VA and USICH plans require close partnerships with Federal, State, 
local, and tribal governments; faith-based, nonprofit, and private 
groups; outreach to veterans, people, and organizations providing 
services to veterans and the general public.
    The strong partnership and coordination between VA and HUD is 
evidenced by the implementation and expansion of the HUD-VASH program 
and VA's participation in the 2011 Point in Time Count. The coordinated 
efforts between HUD, VA, and the Department of Labor (DOL) are also 
demonstrated in the HUD-VA Homelessness Prevention Pilot. This 3-year 
pilot is a partnership among VA, HUD, DOL, and local community agencies 
to provide housing assistance and supportive services to veterans 
returning/transferring from military service in the following 
locations:
  --MacDill Air Force Base in Tampa, Florida;
  --Camp Pendleton in San Diego, California;
  --Fort Hood in Killeen, Texas;
  --Fort Drum in Watertown, New York; and
  --Joint Base Lewis-McChord near Tacoma, Washington.
    At VA's National Forum on Homelessness Among Veterans Conference 
held in December 2010, each VA Medical Center (VAMC) was charged with 
holding a homeless veteran summit to confer with key partners in VA's 
efforts to end homelessness among veterans. Key partners of these local 
homeless veteran summits included local public housing authorities, 
Continuums of Care, HUD, DOL, State VA Departments, other key Federal, 
State, and local organizations. These meetings enabled VAMC leadership, 
staff, and local organizations to determine ways to more efficiently 
and effectively assist homeless veterans in accessing needed supportive 
services and suitable permanent housing in order to achieve and 
maintain stabilization. More than 170 local summits have been held 
since January 1, 2011. These summits have improved existing 
partnerships and assisted in building new partnerships.
    Also at this conference, each VAMC was directed to participate in 
the 2011 Point in Time Count of the homeless held in January 2011, and 
in their local Continuum of Care. These directives have served to 
foster closer cooperation and collaboration between VA staff and 
community providers, including those in rural areas. These meetings 
will continue and further strengthen the ability of VA and other 
housing and service provider partners to effectively work together to 
end homelessness among veterans.
    VA's Community Homelessness Assessment, Local Education and 
Networking Groups Program (CHALENG) is an innovative program designed 
to enhance the Continuum of Care for homeless veterans provided by the 
local VA and its surrounding community service agencies. The guiding 
principle behind Project CHALENG is that no single agency can provide 
the full spectrum of services required to help homeless veterans become 
productive members of society. Project CHALENG enhances coordinated 
services by bringing the VA together with community agencies and other 
Federal, State, and local governments who provide services to the 
homeless to raise awareness of homeless veterans' needs and to plan to 
meet those needs. The fiscal year 2009 CHALENG report indicates that 
local VAMCs have established almost 4,000 formal and informal 
collaborative agreements to serve homeless veterans.
                                research
    Question. The administration is requesting $509 million for medical 
and prosthetic research for fiscal year 2012, which is $72 million less 
than the 2010 levels. I've had several veteran service organizations 
express concern regarding this drop in funding given the type and 
number of injuries we see sustained by returning veterans.
    Can you address how your agency is addressing these concerns and 
the current efforts being made in these areas?
    Answer. VA supports research projects based on merit review, and 
within the fiscal year 2012 budget, VA will support approximately 135 
fewer projects from all services when compared with the fiscal year 
2010 level. While there will be fewer projects, VA will continue to 
emphasize research on deployment and veteran-specific health issues. 
Areas of particular focus, such as gulf war veterans illnesses, women 
veterans, and mental health, will be preserved or increased, with the 
reductions being realized across the board in other areas.
    VA's Office of Research and Development is adopting International 
Organization of Standardization (ISO) 9001 principles to increase 
management efficiencies in conducting clinical trials. The ISO is 
widely considered to be the standard for efficient and effective 
management systems. These improvements will further reduce the cost of 
performing clinical trials by reducing administrative costs and 
streamlining processes.
                                 ______
                                 
                Questions Submitted by Senator Mark Kirk
                   unemployment rate (milliman model)
    Question. Mr. Secretary, in last year's budget submission, the 
Department of Veterans Affairs (VA) requested $50.611 billion in 
advance appropriations for its medical care accounts in fiscal year 
2012. However, the Department has since informed us that its budget 
estimates were based on 2008 actuarial data that did not account for a 
high unemployment rate. This year's request includes an additional $953 
million for veterans' medical care, appropriated as a ``Contingency 
Fund,'' if the Department needs additional resources due to high 
unemployment. However, we have no information about how unemployment 
has affected the fiscal year 2013 advance request.
    Is the unemployment rate a factor in the 2013 advance request; if 
so, what is the assumed unemployment rate; and do you expect to submit 
a revised request for 2013 based on economic conditions?
    Answer. Our actuarial model projection run for fiscal year 2013 
assumed an unemployment rate of 7.4 percent. The budgetary impact of 
this economic factor on VA medical care for fiscal year 2013 will be 
considered during the development of the fiscal year 2013 President's 
budget, similar to the update of the fiscal year 2012 estimate in the 
fiscal year 2012 budget submission.
                           claims processing
    Question. Mr. Secretary, one of the biggest problems facing the 
Department is claims processing. Since 2007, this subcommittee has 
provided $277 million in additional resources for extra claims 
processors, plus $150 million in stimulus funding, in order to 
accelerate adjudications and reduce the disability claims backlog. Yet 
the stubborn fact remains that the Department hasn't been able to get 
its arms around this enormous problem. This budget predicts that 
average adjudication times and the disability claims backlog will be 
the worst they've ever been, with average adjudication times increasing 
from 165 days to 230 days in only 2 years due to the influx of Agent 
Orange claims.
    What is it in this process that takes so much time? Do you need 
legislative fixes? New regulations? Or is it simply that the Department 
hasn't yet been able to balance new technologies with its claims 
processing method?
    Answer. The number of disability claims received continues to 
increase at record pace. This challenge is due to a number of factors, 
including:
  --The addition of three presumptive conditions associated with 
        exposure to Agent Orange;
  --VA's successful outreach efforts;
  --The return of servicemembers from Iraq and Afghanistan;
  --More complex medical issues; and
  --An increasing number of issues claimed by each veteran.
    VA is confident that our transformation efforts will enable us to 
eliminate the claims backlog in 2015. The cornerstone of VA's claims 
transformation strategy is the Veterans Benefits Management System 
(VBMS). VBMS integrates a business transformation strategy to address 
process and people with a paperless claims processing system. Combining 
a paperless claims processing system with improved business processes 
is the key to eliminating the backlog and providing veterans with 
timely and quality decisions.
    Question. I understand that the Department hopes to roll out the 
VBMS to revolutionize the disability benefits claims process. But given 
the Government's history of developing IT projects, I just want to be 
sure we're not pinning all our hopes on one IT program to solve all of 
these problems. Is that what we're doing?
    Answer. We believe that VBMS will be a valuable tool in eliminating 
the backlog starting in 2012. Evolving to a paperless process is 
essential, but we are aggressively pursuing our claims transformation 
initiatives right now, in order to lay the technological and business 
transformation groundwork to streamline claims processing and eliminate 
the claims backlog. Our end goal is a smart, paperless, electronic 
claims processing system.
    While we work to develop the paperless system, we are making 
immediate changes to improve the efficiency of our business activities. 
New calculators for certain medical conditions guide claims 
decisionmakers with intelligent algorithms similar to tax preparation 
software or through simple spreadsheet buttons and drop-down menus. A 
growing body of evidence-gathering tools, called disability benefits 
questionnaires, brings new efficiencies to collection of medical 
information needed to rate each claim. The Fully Developed Claims 
Program speeds the decision process by empowering veterans and helping 
them submit claims that are ready for VA decision as soon as they are 
received.
    Question. Are you looking at making it easier for veterans to 
clearly know what documentation he or she needs to submit to the VA 
when making a particular disability claim, and thereby simplifying the 
back-and-forth between the veteran and the Department that consumes 
much of the adjudication process?
    Answer. VA has implemented several initiatives designed to inform 
and help veterans with their claim submissions. Three disability 
benefits questionnaires are available online, and more on the way, for 
veterans to provide to their private or VHA physician. Each disability 
benefits questionnaire is for a specific condition, and the questions 
guide the physician's response to ensure we receive the data we need to 
make a decision on the veteran's claim.
    VA also offers an online application system, Veterans Online 
Application, that is accessible through e-Benefits and the VA Web site. 
The application system allows a veteran to file a claim for 
compensation, pension, education, or vocational rehabilitation and 
employment benefits.
    VA implemented the Fully Developed Claims Program, partnering with 
veterans service organizations to assist veterans in submitting 
everything VA needs at the time of their application. VA is working to 
improve its processes with a goal of completing fully developed claims 
within 90 days of receipt.
    In addition, the Veterans Claims Assistance Act requires VA to 
notify all claimants of the information and evidence necessary to 
substantiate their claims, which portion of the information and 
evidence VA will try to obtain for them, and which portion they are 
expected to provide.
                             north chicago
    Question. Mr. Secretary, one of my biggest priorities since I 
entered the Congress has been the Captain James A. Lovell Federal 
Health Care Center (FHCC), a first-of-its-kind partnership between the 
VA and the Department of Defense (DOD) to fully integrate all medical 
care into a single mission. The facility not only integrates the two 
facilities, but also serves 40,000 Navy recruits, 67,000 military and 
retiree beneficiaries each year, and veterans throughout northern 
Illinois and southern Wisconsin. I look forward to working with you to 
make sure this first-of-its-kind partnership with the DOD is a success.
    Can you provide me with an update on this facility, how has 
integration gone thus far, and do you view it initially as a success?
    Answer. As of May 5, 2011, after 216 days, the James A. Lovell FHCC 
continues to work through the change management processes as the new 
organization evolves. The FHCC is currently meeting the needs of all 
beneficiaries. Because there are no shortages of clinicians, healthcare 
providers at the FHCC currently serve all beneficiaries not requiring 
urgent or emergent care on a first come, first served basis. As of 
April 2011, the facility does not have a wait list for patient access. 
The close monitoring of Navy recruit medical readiness ensures we are 
able to maintain the ``pipeline to the fleet'' of enlisted sailors. 
Integration is completed in a number of areas and the new ambulatory 
care facility is fully operational. The joint governance structure was 
fully implemented on October 1, 2010. Information management/
information technology (IT) efforts are beginning to yield successful 
results, in particular in joint registration and single medical sign on 
for both DOD and VA record systems. Successes and lessons learned from 
FHCC are helping to contribute the way forward of an integrated 
electronic health record (iEHR) maximizing joint interoperability of 
records and care for the DOD and VA beneficiaries.
    The FHCC is continuing the development of an integrated budgeting 
and financial reconciliation process. For fiscal year 2011 through 
fiscal year 2013, the FHCC plans to use historical financial data to 
budget and determine the amount each department will transfer to the 
Joint Fund and expects to manually conduct the year-end reconciliation 
process. By fiscal year 2014, the FHCC plans to have an automated year-
end financial data reconciliation process. However, as of April 2011, 
the integration of fiscal authority had not been fully implemented 
because there was no legal authority to transfer appropriations to the 
Joint Fund. For fiscal year 2011, the FHCC is being funded through an 
alternative funding mechanism (resource-sharing agreement) established 
by the executive agreement. However, with funding now authorized for 
transfer to the Joint Fund, the FHCC will be funded through the Joint 
Fund beginning July 1, 2011.
    In the workforce management and personnel integration area, 469 DOD 
civilian personnel were transferred to VA as of October 10, 2010--the 
deadline established in the executive agreement. FHCC completed 
integration of the staff training programs through an integrated 
education department, as stated in the executive agreement. One 
component of staff education is the maintenance of medical and dental 
skills for the FHCC's Navy healthcare providers. One of the benefits of 
the integration is that dental school graduates obtaining advanced 
education in the Navy can see Veteran patients while completing their 
residencies and have opportunities to be exposed to different dental 
conditions than those normally seen in the generally younger and 
healthier recruit population. This is especially helpful training for 
dentists who will be placed on ships, where they are often the only on-
site dentist. There is a similar benefit for healthcare professionals 
providing inpatient care.
    GAO is conducting a study of the Lovell FHCC due to the Congress 
this summer and DOD contracted the Institute of Medicine to evaluate 
whether the integrated DOD/VA healthcare facility in North Chicago is 
more beneficial to DOD and VA than their independent facilities in 
serving the needs of their eligible populations. The Institute of 
Medicine is expected to evaluate health outcomes, patient satisfaction, 
provider satisfaction, quality of care, and costs of care and prepare a 
written report with findings, conclusions, and recommendations for DOD 
and VA that will be available to the general public in 2012.
    Question. As I understand it, the VA and the DOD have pledged $100 
million for an IT project at this unique facility to allow their 
medical software communicate with one another. Can you provide me with 
an update on that project?
    Answer. In a meeting on May 2, 2011, Secretary Shinseki and 
Secretary Gates agreed to move forward with joint solutions for the 
remaining capabilities not yet delivered at the Captain James A. Lovell 
FHCC. The refined implementation will be informed by the work being 
done on the iEHR Way Ahead.
    The current status of the IT projects is:
  --Medical single sign-on with context management:
    --Production: December 13, 2010;
    --Current status: Sustainment;
  --Single patient registration:
    --Production: December 13, 2010;
    --Current status: Maintenance and enhancements;
  --Pharmacy (iEHR):
    --Current status: On-hold pending iEHR business policy review: July 
            7, 2011;
  --Laboratory and radiology orders:
    --Production Limited/Controlled: March 2011;
    --Current status:
      -- Radiology:
         -- Production: Projected to go live June 15, 2011;
         -- Current status: Preparing for live production;
      -- Laboratory:
         -- Production: Projected full production July 15, 2011;
         -- Current status: Currently in limited production to a 
            controlled number of physicians.
    Question. That brings to me a larger question about joint 
collaboration between the DOD and the VA. As I understand it, each 
Department is in the process of developing its own electronic medical 
record at a cost of billions of dollars to taxpayers. However, GAO 
recently reported the departments lack the mechanisms to jointly 
address collaborative opportunities for common development. I want to 
be sure that DOD and VA aren't on separate, parallel tracks that 
duplicate costs.
    Are the Departments working together on these massive efforts, and 
has everyone agreed to build to the same standards, and where have you 
identified potential economies of scale for joint development?
    Answer. Yes. The VA and the DOD are working together to jointly 
develop an electronic health record that will provide information to 
both agencies about our soldiers, sailors, airmen, and veterans. Both 
agencies have agreed to consolidate data where applicable, use common 
services, and develop a joint platform in order to realize economies of 
scale.
    Question. One approach that would make sense to me is for the 
Congress to require each Cabinet Secretary to certify that all new 
development on an electronic medical record is both interoperable 
between VA and DOD and that neither Department is reinventing the 
wheel. Do you have any response to that potential approach?
    Answer. The Secretaries of VA and DOD agreed to meet on a 
continuous basis to monitor and discuss the progress made on the joint 
electronic health record being developed by their staff. These 
recurring meetings will afford the Secretaries to continue to move 
forward with joint solutions for the remaining capabilities not yet 
delivered at the Captain James A. Lovell FHCC and to discuss and remove 
any impediments that stand in the way of making progress.
                             staff offices
    Question. Mr. Secretary, as you well know, this country faces 
record-high deficits and debt, and we are now entering a period of 
fiscal restraint and budget cuts.
    So I couldn't help but notice that the Department's fiscal year 
2012 budget request proposes a record-high amount of $448 million for 
the VA's General Administration offices in Washington, DC. This amount 
is $51 million higher than in fiscal years 2010 and 2011. Now I 
understand that this increase includes a $23.6 million Office of 
Management and Budget initiative to reform the Federal Government's 
acquisition workforce, but I find this specific request disconcerting.
    To put this in some context, as recently as 2006, funding for VA 
central offices was $275 million. That's a 63-percent increase in the 
budgets for VA central offices since 2006.
    Question. Can you give us a compelling reason why these offices 
should be increased by $51 million over last year when almost all other 
agencies and Departments across our Government are taking painful 
budget cuts, particularly in their administrative overhead in 
Washington, DC?
    Answer. Much of this staff office increase is driven by new 
capabilities necessary to oversee and enhance enterprise-wide 
performance in critical areas such as safety and security, 
acquisitions, human capital and financial management. For example, the 
fiscal year 2012 request includes $23.6 million to increase the 
capacity and capability of VA's acquisition workforce. In addition, 
$2.9 million will be invested to enhance VA's Emergency Preparedness 
capability and to fully implement Homeland Security Presidential 
Directive 12. This will lead to improvements in veteran and employee 
safety and greater protection of VA facilities. Overall, staff office 
capability seeks greater enterprise-wide efficiency, accountability, 
and effectiveness.
    Question. Putting aside the $23.6 million Office of Management and 
Budget initiative to reform the Federal Government's acquisition 
workforce, can you please provide us with the impacts if General 
Administration remains at the fiscal year 2010 enacted level of $397.5 
million?
    Answer. The fiscal year 2012 budget supports the establishment of a 
corporate management infrastructure that will lead to greater 
accountability, efficiency, and effectiveness throughout VA. Some of 
the major investments that would not be supported at fiscal year 2010 
levels include the following:
  --Enhance VA's Emergency Preparedness capability and full 
        implementation of Homeland Security Presidential Directive 12 
        (HSPD-12) initiated August 27, 2004. This makes facilities 
        safer for veterans and employees.
  --Increase the use of the Alternative Dispute Resolution (ADR) 
        program which will lead to a safer work environment and provide 
        cost-savings. Use of the ADR program in VA has increased to 55 
        percent which VA estimates has resulted in $81 million in cost 
        avoidance in 2010.
  --Build a facilities management system that will maximize life cycle 
        performance and reduce project costs
  --Perform audits of the non-VA Care (fee) program expected to 
        identify $4 million in improper payments and further cost 
        avoidance.
  --Improve VA/DOD collaboration, and build a corporate analysis and 
        evaluation process to improve analysis and data that drive 
        corporate level decisions.
  --Establish the Office of Tribal Government Relations to increase 
        Nation-to-nation partnerships and increase access and awareness 
        and utilization rates of American Indian/Alaska Native veterans 
        and their families.
  --Leverage new media tools to improve VA's ability to get the right 
        information to the right veteran at the right time and 
        incorporate their feedback
    In addition to strengthening corporate-level oversight, the General 
Administration account also funds the Board of Veterans Appeals (BVA) 
and the Office of General Counsel (OGC):
  --If the BVA were funded at the fiscal year 2010 level, this would be 
        a reduction of $4.7 million below the budget request. BVA would 
        need to reduce staffing by 35 full-time equivalents which would 
        reduce the number of appeals decided by 5,460 cases and 
        increase the time all veterans must wait for a final decision 
        on appeals of their disability claims.
  --Funding OGC operations in fiscal year 2012 at the fiscal year 2010 
        level would represent a reduction of $3.3 million and 24 full-
        time equivalents. That would adversely impact OGC's ability to 
        keep pace with an increasing legal workload, including meeting 
        litigation deadlines set by the U.S. Court of Appeals for 
        Veterans Claims (so that veterans would wait longer for 
        decisions), and also keep VA from timely issuing regulations to 
        implement acts of the Congress.
                           polytrauma centers
    Question. Mr. Secretary, I want to commend the VA for the quality 
of its care to wounded veterans recovering at VA polytrauma centers. I 
understand that veterans in deep comas at VA polytrauma centers are 
returning to consciousness at a higher than average rate.
    Can you provide the subcommittee with a detailed background of this 
encouraging development?
    Answer. As veterans and servicemembers with catastrophic injuries 
started coming to the VA Polytrauma Rehabilitation Centers for care, it 
became apparent that patients who were slow to recover consciousness 
required a specialized clinical program to address their medical and 
rehabilitation needs. These patients require high complexity and 
intensity of medical services and associated resources in order to 
improve the level of responsiveness and decrease the occurrence of 
medical complications. Furthermore, there are few programs specifically 
designed for patients with disorders of consciousness outside of VA.
    VA charged a workgroup of subject matter experts from VA, Defense 
and Veterans Brain Injury Center, and the private sector to develop a 
specialized emerging consciousness program for veterans and 
servicemembers who are slow to recover consciousness after severe 
traumatic brain injury (TBI) and polytrauma. This is a clinical 
algorithm prescribing the main elements of the medical, nursing, 
therapy, technology, and family education and support services required 
for the care of patients in an emerging consciousness state. The 
Emerging Consciousness Program was implemented in 2007, and is 
continually updated to reflect advances in medical science.
    The VA Emerging Consciousness Programs at the Polytrauma 
Rehabilitation Centers maintain the highest standards of accreditation 
and certification for rehabilitation facilities awarded by the 
Commission on Accreditation of Rehabilitation Facilities. These 
programs admit both Active-Duty servicemembers and veterans with 
various forms of acquired brain injury, including TBI, anoxia (or lack 
of oxygen), stroke, and infectious causes (e.g., encephalopathy). 
Approximately 65 percent of the admissions have been Active-Duty 
servicemembers. Of the Active-Duty servicemembers, approximately 45 
percent were injured while serving in a foreign theater of operations. 
Mechanisms of injury have included combat injuries (blast, 
penetrating), motor vehicle collisions, violence, and metabolic damage 
from underlying medical conditions.
    Retrospective review of outcomes from 121 veterans with impaired 
level of consciousness admitted to the four Polytrauma Rehabilitation 
Centers from 2003 through third quarter of 2009 were compiled and 
analyzed using a research approved protocol. Results showed emergence 
from coma in 70 percent of veterans with blast related TBI, 85 percent 
of nonblast-related TBI, and 60 percent with anoxic brain injury. Of 
those who emerged, 75 percent did so by 4 months post-injury. These 
results were presented at the American Congress of Rehabilitation 
Medicine in October of 2010, and are being submitted to medical 
journals for publication.
                                 ______
                                 
             Questions Submitted by Senator Mitch McConnell
              kentucky community-based outpatient centers
    Question. Of the contract-run community-based outpatient centers 
(CBOCs) in Kentucky, what is the level of patient satisfaction with 
their care?
    Answer. [Follows:]

                                              OVERALL SATISFACTION
                                                  [Percentage]
----------------------------------------------------------------------------------------------------------------
                                                                                                    Fiscal year
                            Facility                              September 2010    Fiscal year    2011 year-to-
                                                                                   2010 average        date
----------------------------------------------------------------------------------------------------------------
Hopkinsville, Kentucky..........................................            89.6            55.3            53.3
Bowling Green, Kentucky.........................................            28.7            49.5            41.1
----------------------------------------------------------------------------------------------------------------


    Question. How is this satisfaction measured, if at all?
    Answer. Satisfaction with Department of Veterans Affairs (VA) 
healthcare is measured using the Survey of Healthcare Experiences of 
Patients (SHEP). After a healthcare visit, veterans may receive a 
confidential questionnaire in the mail from VA's Office of Quality, 
Safety and Value asking about their satisfaction with recent outpatient 
or inpatient treatment at the specific medical center. The survey is 
used to communicate any concerns, complaints, compliments, or questions 
about the care received. Survey responses are compiled in the result of 
a SHEP score.
    To what extent are CBOCs provided incentives to provide good 
patient care?
    Answer. VA has the same high expectations for performance and 
quality for its CBOCs as for its VA Medical Centers (VAMCs). To enhance 
staff engagement in quality and process improvement, VAMC and CBOC 
providers' incentive pay incorporates metrics that reward meeting and 
exceeding VA-wide performance measures, and their performance plans 
incorporate performance accountability on these metrics. Performance 
measures that receive particular emphasis in provider evaluation 
include measures of veteran access and clinic management for common 
chronic conditions, such as diabetes, congestive heart failure, and 
pneumonia.
                              homelessness
    Question. What is the VA doing to enhance efforts to locate 
homeless veterans and to help them?
    Answer. VA operates the largest system of homeless treatment and 
assistance programs in the Nation. The hallmark of VA's homeless 
programs is that they provide comprehensive care and benefits including 
medical, psychiatric, substance use, rehabilitation, dental care, and 
expedited claim processing for these veterans. In the past decade, 
major VA homeless initiatives on outreach, treatment, residential 
services, and vocational rehabilitation have touched the lives of tens 
of thousands of veterans. Outreach, especially to the homeless on the 
street, is an essential component of VA's plan to end homelessness 
among veterans. VA's outreach workers engage veterans in the community 
who are living on the streets and assist them to acquire appropriate 
services and housing. VA's outreach efforts are also essential in the 
prevention of homelessness. Identification of a veteran who may be at-
risk of homelessness is crucial to keeping that veteran from falling 
into the cycle of homelessness.
    In fiscal year 2010, outreach teams from VA's Health Care for 
Homeless Veterans (HCHV) Program conducted more than 42,000 clinical 
assessments and the community-based residential treatment component of 
this program admitted more than 3,500 homeless veterans. VA provides 
homeless outreach at all 152 VAMCs and has several programs targeted 
toward outreach efforts.
    Health Care for Homeless Veterans.--The central goal of the HCHV 
Program is to reduce homelessness among veterans by conducting outreach 
to those who are the most vulnerable and are not currently receiving 
services and engaging them in treatment and rehabilitative programs. 
The HCHV Outreach Program has served approximately 90,237 veterans in 
fiscal year 2010 and more than 36,000 veterans during the first quarter 
of fiscal year 2011.
    The Health Care for Homeless Veterans Contract Residential 
Treatment Program.--The contract residential treatment component of the 
HCHV Program ensures that veterans with serious mental health diagnoses 
can be placed in community-based residential treatment programs which 
provide quality housing and services. HCHV provides ``in place'' 
residential treatment beds through contracts with community partners 
and VA outreach and clinical assessments to homeless veterans who have 
serious psychiatric and substance use disorders. The HCHV Contract 
Residential Treatment Program has served 54,723 unique veterans since 
1987; approximately 3,519 veterans were served in fiscal year 2010.
    Stand Downs.--Stand downs are primarily focused on services. They 
are collaborative events, coordinated between local VAs, other 
Government agencies, and community agencies who serve the homeless. 
Over the years, stand downs have become increasingly crucial components 
in VA's efforts to outreach to homeless veterans. Since the first stand 
down was held in San Diego in 1988, literally tens of thousands of 
veterans have benefited from the array of services made available 
through these events. During fiscal year 2010, VA assisted in 
supporting 196 stand down events where 44,325 veterans were served. 
Thirteen sites held their first stand down in 2010.
    Supportive Services for Veteran Families Program.--The Supportive 
Services for Veteran Families (SSVF) Program will make available grant 
funds for community providers to help veteran families rapidly exit 
homelessness, or to avoid entering homelessness. In addition to 
providing linkage to VA healthcare and other services, grantee 
organizations will have the ability to directly address the type of 
emergent needs that, if unmet, can be deciding factors in a family's 
struggle to remain stably housed. Funds for emergency rental 
assistance, security, and utility deposits, food and other household 
supplies, child care, one-time car repairs, and other needs will help 
to keep veterans and their families housed--as families. A notice of 
funding availability was announced earlier this calendar year and the 
application period closed on March 11, 2011. VA is in the process of 
reviewing these applications and awarding grants. VA expects to 
announce awards in June 2011.
    Veterans Homelessness Prevention Demonstration Program.--The 
Veterans Homelessness Prevention Demonstration (VHPD) (also referred to 
as the HUD-VA Pilot Program) is designed to explore ways for the 
Federal Government to offer early intervention homeless prevention, 
primarily to veterans returning from wars in Iraq and Afghanistan. This 
demonstration program provides an opportunity to understand the unique 
needs of a new cohort of veterans and will support efforts to identify, 
outreach, and assist them to regain and maintain housing stability. 
This 3-year HUD-VA prevention pilot is a partnership among VA, the 
Department of Housing and Urban Development (HUD), the Department of 
Labor (DOL), and local community agencies. VHPD will serve the 
following locations:
  --MacDill Air Force Base in Tampa, Florida;
  --Camp Pendleton in San Diego, California;
  --Fort Hood in Killeen, Texas;
  --Fort Drum in Watertown, New York; and
  --Joint Base Lewis-McChord near Tacoma, Washington.
As the lead agency, HUD is awarding grants for the provision of housing 
assistance and supportive services to prevent veterans and their 
families from becoming homeless, or reduce the length of time veterans 
and their families are homeless. HUD's Office of Special Needs 
Assistance Programs executed the grant agreements with the pilot site 
Continuum of Care grantees on February 3, 2011. The first veterans were 
seen on April 1, 2011.
    The National Call Center for Homeless Veterans.--The National Call 
Center for Homeless Veterans (NCCHV) was founded to ensure that 
homeless veterans or veterans at risk for homelessness have free, 24/7 
access to trained counselors. The hotline is intended to assist 
homeless veterans and their families, VAMCs, Federal, State, and local 
partners, community agencies, service providers, and others in the 
community. The NCCHV (1-877-4AID VET) was fully implemented on March 1, 
2010. From March 1, 2010, to February 28, 2011, there were 25,771 calls 
to the NCCHV. Of the calls received, 20,831 callers identified as 
veterans; 6,578 veteran callers identified as being homeless; and 
11,769 veteran callers identified as being at risk of homelessness.
    Veterans Justice Programs.--As part of VA's Plan to End 
Homelessness Among Veterans, VA is focused on serving veterans involved 
with the criminal justice system, who may be homeless or at risk for 
homelessness. In fiscal year 2010, the Health Care for Re-Entry 
Veterans Program and the Veterans Justice Outreach Program continued to 
provide outreach and linkage to services to justice-involved veterans 
at high risk of homelessness. Many of these vulnerable veterans were 
diverted from homelessness and provided healthcare, residential, and 
benefits assistance. Studies have shown that for adult males, 
incarceration is the most powerful predictor of homelessness (Burt et 
al., 2001). The Health Care for Reentry Veterans (HCRV) Program 
provides outreach and linkage to post-release services for veterans in 
State and Federal prisons; HCRV specialists have provided reentry 
services to 24,244 reentry veterans since fiscal year 2008. The 
Veterans Justice Outreach (VJO) Program focuses on veterans in contact 
with law enforcement, jails, and courts, including the rapidly 
expanding veterans treatment courts. VJO specialists have served a 
total of 8,004 justice-involved veterans since the start of the 
program.
    National Homeless Registry.--Although not a program itself, VA's 
comprehensive Homeless Registry is intended to provide up-to-date 
information about the prevalence of homelessness among veterans and key 
demographics of the homeless veteran population seen in VA homeless 
programs. The registry is also intended to provide information 
regarding VA homeless programs, enabling VA to identify and monitor 
program utilization and treatment outcomes. VA is working with other 
Federal partners to expand this capability. The registry includes 
information on more than 367,230 veterans, and includes data from 2006 
to the present.
    VA and community partners participated in the 2011 Homeless Point 
in Time (PIT) Count conducted by the local Continuums of Care. 
Participation and engagement of VA staff during the PIT Count ensured 
that homeless veterans were provided immediate information about VA 
services and programs.
    VA continues efforts to identify and contact homeless veterans, 
improve access to services, create new connections both within and 
outside VAMCs, and educate healthcare providers and veterans regarding 
VA homeless services and benefits.
    Women Veterans.--Women veterans make up nearly 6 percent of 
homeless veterans. Eleven percent of those accepted for Federal housing 
vouchers are women. In addition, women veterans are more likely than 
nonveteran women to become homeless. Risk factors for homelessness 
among women veterans include mental health conditions, substance abuse, 
and a prior experience of military sexual trauma. The Women Veteran's 
Health Strategic Healthcare Group is developing a screening instrument 
to identify women veterans at risk of homelessness. This screening 
instrument will identify women at risk, before they become imminently 
homeless, and enable efficient and timely referral to social and mental 
health services.
    Question. What more can be done in this area?
    Answer. The VA National Center on Homelessness Among Veterans 
(NCHV) has adopted a research agenda with a focus on the epidemiology 
of homelessness among veterans and the effectiveness of services 
intended to prevent and end homelessness among veterans. These studies 
are aimed at closing gaps in the research related to the prevalence of 
homelessness among veterans, characteristics of veterans who experience 
homelessness, and factors that predict homelessness among veterans as 
well as veterans' utilization of services and whether these services 
are both efficient and effective.
    The initial studies conducted by the NCHV are focusing on 
developing a definitive count of homeless veterans. The NCHV 
collaborated with HUD to develop Veteran Homelessness: A Supplemental 
Report to the 2009 Annual Homeless Assessment, Report to Congress 
February 2011 which provides a point-in-time count of homeless veterans 
in the United States, as well as the characteristics and locations of 
homeless veterans. An additional investigation by the NCHV of the 
prevalence and risk of homelessness among veterans in a selection of 
communities provides more detailed analyses of homelessness risk. These 
studies suggest that veterans are over-represented in the homeless 
population. Specifically, the multi-site investigation found that, 
after controlling for poverty, age, race, and geographic variation, 
female veterans were three times as likely as female nonveterans to 
become homeless, and male veterans were twice as likely as male 
nonveterans to become homeless.
    Another study underway will identify specific risk factors for 
homelessness among veterans in order to accurately prioritize 
prevention resources for those who are at imminent risk of 
homelessness. The NCHV is developing a homelessness risk assessment, 
which will be piloted in a variety of settings, to include VAMC 
emergency rooms, CBOCs, and other specialty clinics. The homelessness 
risk assessment will be tested for reliability and validity. The 
assessment instrument is a brief, two-stage assessment. It first 
assesses whether a veteran has a safe and stable place to stay for at 
least 90 days. If the veteran appears to be at risk, the second stage 
of the instrument assesses the veteran's current living situation, 
barriers to living independently, and supports that the veteran may 
have or require to access and maintain safe and stable housing. The 
assessment will inform appropriate referrals to homelessness prevention 
or other services. In addition, data collected through the assessment 
process will guide decisions regarding need for and targeting of 
resources moving forward, including specific characteristics that may 
pose risk for homelessness.
    While homelessness among veterans in the Operation Enduring Freedom 
(OEF), Operation Iraqi Freedom (OIF), and Operation New Dawn (OND) 
service era is a priority concern, there is limited empirical data 
about the extent to which or dynamics whereby they do become homeless. 
To address this, the NCHV is examining the onset of homelessness among 
recent veterans, including those returning from the OEF and OIF 
conflicts. Working in conjunction with the VA Office of the Inspector 
General and municipal shelter providers in Columbus, Ohio; New York 
City, New York; and Philadelphia, Pennsylvania, researchers at the NCHV 
are compiling an array of data that will facilitate identifying risk 
factors for homelessness among OEF/OIF veterans at the time of their 
separation from the military. This promises to inform prevention 
programs and potentially increase their efficiency. Service use 
patterns among this group will also be examined to assess the extent to 
which they use VA services, community services, or a combination of the 
two. The review of service use patterns will increase the understanding 
of how veterans access the services available to them, and may 
facilitate better coordination of services between VA and mainstream 
homeless service systems.
    The NCHV is also organizing a series of studies around the general 
topics of mortality, morbidity, and aging among homeless veterans. The 
overall goal of this project is to assess the demographic trends among 
the homeless veteran population to project future trends in the size 
and makeup of this population, and to anticipate future demand for 
services. Research conducted by study investigators has shown the 
overall single adult (i.e., not family) homeless population to be 
steadily aging. If this trend continues, it would lead to higher risk 
for early mortality and greater needs for long-term care. Research is 
currently underway to assess whether the trend also holds for homeless 
veterans, and the impact that providing homeless veterans with housing 
has on subsequent health and mortality.
                      women veterans medical care
    Question. What is the VA doing to assist female veterans?
    Answer. VA works to ensure that timely, equitable, and high-quality 
comprehensive healthcare services are provided in a sensitive and safe 
environment at VHA facilities nationwide. The VA strives to be a 
national leader in the provision of healthcare for women.
    Since 2009 VA has ensured that full-time women veteran program 
managers are in place at all VAMCs. These employees are women veteran 
champions who improve advocacy for women veterans, oversee outreach, 
and work to improve quality of care by implementing new policies and 
evidenced-based best practices in healthcare for women.
    VHA Handbook 1330.01, released in May 2010, requires that every 
female veteran have access to primary care from a proficient and 
interested provider who can provide primary care, gender-specific care, 
and mental healthcare. VHA is currently assessing the ongoing system-
wide enhancement of access to comprehensive primary care with a 
structured tool and validated external site visits.
    Ensuring privacy, dignity, and safety of women veterans in VA 
healthcare settings is a top VA priority. VA has clarified safety and 
security policies in VHA Handbook 1330.01 which requires a female 
chaperone present at all gender-specific examinations and procedures. 
In addition, VA has been assessing the environment of care on a monthly 
basis, and tracking correction of any privacy deficiencies.
    Another top priority is education of primary care providers to 
maintain a proficient work force for care of women veterans. VA has 
educated more than 800 primary care providers in a mini-residency for 
women's health. Through extensive trainings offered this summer, VA 
will fulfill the goal of having at least 1,200 providers trained by end 
of fiscal year 2011. It is important that wherever a woman veteran 
access VA healthcare she can be seen by a women's health provider for 
her primary care.
    Working with VA researchers, in 2010 VA completed a National Survey 
of Women Veterans to assess healthcare needs and barriers to care. In 
addition, in order to benchmark services to women veterans, VA will 
soon release Sourcebook Volume 1 of the Women's Health Evaluation 
Initiative which describes the socio-demographic characteristics and 
healthcare utilization patterns of women veterans.
    Ongoing work will improve patient care coordination by improving 
emergency department care for women veterans, identifying high-risk 
medications in pregnant or lactating patients, and creating a novel 
system in the computerized patient medical record system for tracking 
abnormal mammogram results.
    Question. What is the VA doing to ensure that female veterans have 
sufficient privacy during their medical visits to VA facilities?
    Answer. Following the Government Accountability Office's (GAO) 
report, ``VA Has Taken Steps to Make Services Available to Women 
Veterans, but Needs to Revise Key Policies and Improve Oversight 
Processes,'' (March 2010), VA has undertaken an extensive evaluation of 
its facilities, identifying existing deficiencies in the environment of 
care, including bathrooms, privacy curtains, locks, and other areas. 
These deficiencies have been prioritized and tracked for correction. In 
fiscal year 2011, VA has budgeted $21 million in nonrecurring 
maintenance projects that will be used at the facility level to correct 
bathroom privacy deficiencies in addition to the $241.8 million of 
gender-specific care (from treatment funds) and $2.89 billion for total 
care for women veterans. In fiscal year 2010, VA spent more than $214 
million in gender-specific care and nearly $2.6 billion in total care 
for women veterans.
    Question. What more can be done in this area?
    Answer. Access to care, including making care available outside of 
typical operating hours, continues to be a part of the prospective 
changes to support ever increasing patient-centeredness of VA 
healthcare. According to information gathered in March 2011, 29 
facilities across 24 States currently offer extended primary care hours 
for women. Overall, 20.4 percent of facilities offer extended primary 
care hours (operating hours outside of usual operating hours 8 a.m. to 
4:30 p.m.) for women, and 24 percent offer extended primary care hours 
for men. It is anticipated that these numbers will continue to increase 
as the transformation to patient-aligned care teams and the focus on 
more patient-centered care continues.
    Question. What efforts are being done specifically at Kentucky VA 
facilities in this vein?
    Answer. The Louisville and Lexington VAMCs both have active women 
veteran's health programs. Full-time women veteran program managers are 
in place at each facility and are working to improve advocacy, 
outreach, and quality of care for women veterans. As a result of their 
efforts, there has been a steady increase in numbers of women veterans 
using Kentucky VA facilities. In addition, primary care providers from 
Louisville and Lexington have attended women's health mini-residency 
training to improve their proficiency in providing comprehensive 
primary care to women veterans.
                      women veterans appointments
    Question. I am informed that the percentage of female veterans who 
do not show up for their medical appointments is in many cases greater 
than the percentage of male veterans that do not show up for theirs.
    What is the VA doing to better understand why this occurs, and what 
is being done to reduce this higher percentage?
    Answer. VA has been collecting data on no-shows and missed 
appointment opportunities for several years. While there are small 
absolute differences in no-show rates by gender, further analysis 
demonstrates that these differences are not statistically significant.
    In 2008, the VHA Under Secretary for Health (USH) released a report 
that surveyed the current state of healthcare delivery to women 
veterans. This report called attention to gaps that existed in the care 
for women veterans, noting that the delivery of primary care for women 
veterans is frequently fragmented requiring women to travel to multiple 
locations or make several appointments to receive primary care. 
Recommendations from the USH report to improve service delivery were 
incorporated into policy changes outlined in VHA Handbook 1330.01 
released in May 2010.
    VHA Handbook 1330.01 requires that every female veteran have access 
to primary care from one provider who can provide primary care, gender-
specific care, and mental healthcare. This policy will reduce 
fragmentation of care and need for women to return for separate 
appointments for gender-specific services. VA is also evaluating the 
ongoing system-wide enhancement of access to comprehensive primary care 
with a structured tool and validated external site visits. Increasing 
numbers of VA facilities are providing extended hours for women's 
health services (more than 20 percent of facilities).
    VA has conducted a scientifically validated National Survey of 
Women Veterans to assess barriers to use of VA Care and will soon 
undertake another national survey of women veterans as required by 
Public Law 111-163.
    VA recognizes that needs of women are different from men and is 
enhancing facility and clinic designs to better meet the needs of women 
veterans. The VHA transformation to patient-aligned care teams improves 
access for women by incorporating alternatives to face-to-face care 
including increased access to telehealth and e-health communications 
through the My Healthe Vet secure messaging system. These enhancements 
will improve access for women veterans as they balance their own needs 
for healthcare with their priorities for their children and their jobs.
                 outreach for kentucky medical facility
    Question. The location of the new VA hospital in Louisville, 
Kentucky, is of great importance to the local veterans community. In 
this vein, the VA's initial efforts at outreach to the veterans 
community to determine their views on a site location has been poorly 
planned and executed. Veterans were given little notice about the last 
public hearing and many were unable to participate. I therefore would 
urge the VA to better consider the views of local veterans, 
particularly African-American and younger veterans, in regards to the 
location of the hospital.
    How will the VA improve its outreach efforts in this respect?
    Answer. VA is committed to maximizing the dissemination of 
information to all veterans the Robley Rex VAMC serves. Our efforts 
were designed with all veterans in mind and are intended to reach all 
populations.
    Two public meetings were conducted on May 11, 2011. The purpose of 
the meetings was to inform veterans and the general public on the 
status of the due diligence process and the locations of the five sites 
under consideration. Methods used to make veterans and the public aware 
of this event consisted of the following:
  --Beginning April 25, 2011, a mass mailing to approximately 45,000 
        veterans seen by the Robley Rex VAMC was sent advising of the 
        public meeting and inviting them to attend. The mailing was 
        done to ensure all veterans seen by the medical center were 
        aware of the public meeting and invited to attend.
  --Letters providing notification of the public meeting date and times 
        were also mailed to veterans service organizations, legislative 
        offices, Kentucky VA, and to the medical center's major 
        affiliates.
  --On January 3, 2011 (Frankfort), March 2, 2011 (Frankfort), and 
        April 6, 2011 (Owensboro), the medical center sent 
        representatives to the Joint Executive Council for Veteran 
        Organizations. This also occurred on April 21, 2011, for the VA 
        Voluntary Service meetings to provide status updates on the due 
        diligence process, announce the upcoming public meeting, and 
        answer questions.
  --Public notices have been placed in the medical center's volunteer 
        newsletter (May 4, 2011) and local newspaper (May 1, 2011, and 
        May 8, 2011). Media advisories were issued on April 26, 2011, 
        and May 11, 2011.
  --Flyers and posters have been placed throughout the medical center 
        and CBOCs.
  --The medical center has recently launched an Internet site where 
        visitors, at their convenience, can review progress updates and 
        other related issues.
    Question. In addition, how are the opinions of local veterans being 
incorporated into the decisionmaking process of the VA?
    Answer. Time will be allowed during both meetings for participants 
to ask questions and provide comments concerning site preference.
  --Verbal comments will be recorded, transcribed, and collated.
  --Participants will be provided with a form they may use to 
        prioritize site preferences and provide written comments.
  --Participants had the opportunity to submit their preferences/
        comments either at the public meetings on May 11, 2011, or via 
        mail from May 11-20, 2011.
    The medical center is also in the process of conducting another 
veterans preference survey using a third-party vendor in order to 
scientifically determine veteran preferences for the five sites under 
consideration.
    Results from the verbal and written comments of the public meeting 
and the veterans preference survey will be included with the findings 
and recommendations of the due diligence process and submitted to the 
Secretary for consideration while making his final decision.
                         employment assistance
    Question. With the rate of veterans returning from combat 
increasing, and with an already high unemployment rate, what is the VA 
doing to help ensure that these brave servicemembers are able to find 
jobs when they return to civilian life?
    Answer. VA administers a number of programs and works with the 
Departments of Labor and Defense to assist servicemembers in their 
transition to civilian life.
    VA's Vocational Rehabilitation and Employment (VR&E) Program 
assists disabled veterans prepare for and obtain sustainable 
employment. VR&E provides employment services such as:
  --Translation of military experience to civilian skill sets;
  --Direct job placement services;
  --Short-term training to augment existing skills to increase 
        employability (e.g., certification preparation tests and 
        sponsorship of certification); and
  --Long-term training including on-the-job training, apprenticeships, 
        college training, or services that support self-employment.
Additionally, under the Coming Home to Work Program, full-time VR&E 
counselors are assigned to 13 military treatment facilities to assist 
disabled servicemembers plan their future career.
    VA's Post-9/11 GI Bill education benefits cover the cost associated 
with the education or training needed to help veterans as they 
transition back into civilian life. This includes tuition and fees, a 
monthly housing allowance, and an annual books and supplies stipend up 
to $1,000.
    Additionally, VA will work with the DOD and DOL, accrediting 
agencies, and certifying bodies to ensure that the training and work 
experience that servicemembers receive will be acceptable for civilian 
employment.
    The Transition Assistance Program (TAP) is a partnership among the 
Departments of Defense, Veterans Affairs, Transportation, and Labor's 
Veterans Employment and Training Service (VETS) to provide employment 
and training information to servicemembers within 180 days of 
separation and retirement. Servicemembers learn about job searches, 
career decisionmaking, current occupational and labor-market 
conditions, resume preparation, and interviewing techniques. They are 
also receive an evaluation of their employability relative to the job 
market and information on veterans' benefits.
    DOD, DOL, and VA administer a Web site for Wounded Warriors that 
provides access to thousands of services and resources at the national, 
State, and local levels to support recovery, rehabilitation, and 
community reintegration. The National Resource Directory Web site 
(www.nationalresourcedirectory.gov) provides extensive information for 
veterans seeking resources on VA benefits, including disability and 
education benefits.
      department of veterans affairs hospital at eastern kentucky
    Question. I am informed that many veterans in eastern Kentucky are 
forced to travel several hours to Lexington or Huntington, West 
Virginia to undergo procedures at VA hospitals.
    I would like to know what the feasibility is for a new, centrally 
located hospital in eastern Kentucky.
    Answer. VA bases planning for future healthcare facilities on 
projected demand for healthcare services by veterans within specific 
market areas. These projections are obtained from the VA enrollee 
healthcare projection model, which is produced in partnership with 
Milliman USA, Inc, the largest healthcare actuarial firm in the United 
States. Demand for acute inpatient services for veterans in eastern 
Kentucky is projected to decrease over the next 10 and 20 years, which 
would make a new, centrally located hospital in eastern Kentucky not 
feasible. Decreasing demand in patient services is primarily due to 
changing demographics, as well as continuing shifts in the healthcare 
industry from inpatient to outpatient care. A hospital sized to meet 
the small demand would be inefficient to operate and could not offer 
the breadth and scope of services required to maintain safety and 
quality of services.
    Question. What criteria (infrastructure, veterans' population, 
etc.) does a community need to meet to warrant a VA hospital and what 
can the eastern Kentucky region do to try to facilitate and hasten 
construction of a VA hospital there?
    Answer. VA engages in thorough and continuous analyses of several 
factors when planning healthcare delivery in communities. These factors 
include the enrolled veteran population, the projected demand for 
healthcare over a 20-year horizon, and existing and planned points of 
service in that area. Population and demand projections take into 
account current servicemembers and veterans from ongoing conflicts 
(OEF/OIF/OND), to include gender-specific healthcare needs. Demand 
projections address both inpatient and outpatient services, including 
specialty care.
                             prescriptions
    Question. It is my understanding that, based on a November 21, 
2006, VA memorandum, that VA officials as a general matter are 
restricted in their authority to write prescriptions to commercial 
pharmacies. It is also my understanding that many low-income veterans 
might benefit from significant cost-savings if their non-service-
related prescriptions could be filled at commercial pharmacies.
    What is the rationale for this policy?
    Answer. The November 21, 2006, memorandum (attached below) does not 
restrict VA prescribers in their authority to write prescriptions that 
veterans may have filled in commercial pharmacies. Paragraph 4b on the 
November 21st memo states:

``VA practitioners are permitted to write prescriptions for veterans to 
be filled in private sector pharmacies, if they meet all prescribing 
requirements for the State where the prescriptions will be filled.''.

    The memorandum also provides guidance to VA prescribers to ensure 
patients do not receive duplicate prescriptions from VA and non-VA 
pharmacies that the electronic medical record is updated with a 
reference to the prescriptions being filled in a non-VA pharmacy and 
that DEA registration numbers should not ordinarily be used for 
identification purposes.
    Paragraph 4.a prohibits the ``transfer'' of a prescription 
previously filled in VA to a non-VA pharmacy. This requirement does not 
prohibit VA prescribers from writing a new prescription, only from 
transferring an existing prescription. The reason paragraph 4.a. was 
included in the memorandum was for safety reasons. If an error were to 
be made by the non-VA pharmacy in their understanding of the existing 
VA prescription, the patient could be harmed. For this reason, VA has 
instructed prescribers to cancel the VA prescription and issue a new 
one upon the patient's request.
    [The memorandum follows:]




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Question. What can be done to fix this problem?
    Answer. Since there is no prohibition for writing prescriptions to 
be filled in non-VA pharmacies, we don't believe that corrective action 
is required.
                             claims backlog
    Question. Although the Congress approved the hiring of more than 
1,200 new claims processors for fiscal year 2010, I am told that 
veterans continue to wait far too long to have their claims processed.
    What is the average time between when a claim is filed and when the 
VA finalizes the process?
    Answer. The average time to process a VA disability claim is 
currently 182 days. A significant factor contributing to the recent 
increase in processing time is Secretary Shinseki's decision of October 
13, 2009, to add three new conditions to disabilities currently 
presumed related to exposure to herbicides used in the Republic of 
Vietnam (ischemic heart disease (IHD), Parkinson's disease (PD) and 
hairy cell (B-cell) leukemia (HCL). While a very positive decision for 
our veterans, VA must readjudicate previously denied claims for IHD, 
PD, or HCL filed by Nehmer-class members (Vietnam veterans and their 
survivors) in order to provide retroactive benefits pursuant to 38 CFR 
section 3.816. This requirement involves claims filed or denied from 
September 25, 1985, to the date Secretary Shinseki announced his 
decision on October 13, 2009. Approximately 93,000 cases were 
identified fitting this criterion. Due to the complexity of 
readjudicating claims in this category, all Nehmer readjudication 
claims are currently being reviewed and readjudicated by the Veterans 
Benefits Administration's (VBA's) 13 nationwide resource centers, along 
with some employees at the St. Paul regional office.
    VA is also adjudicating a second group of claims under Nehmer 
provisions that were received between Secretary Shinseki's announcement 
on October 13, 2009, and the date VA published the final regulation 
establishing a presumption of service connection on August 31, 2010. 
Approximately 50,000 cases were received during this period. Completion 
of these Nehmer claims often requires review of multiple volumes of 
claims folders to ensure accuracy of effective dates. Unfortunately, 
there are no technological enhancements to this review process. It is 
extremely labor-intensive, and one case alone may take 4 to 6 hours to 
review.
    VA currently has 1,300 employees at resource centers around the 
country devoted to the readjudication of Nehmer claims. Another 1,800 
VA employees across VA's 56 regional offices are adjudicating Agent 
Orange claims received after October 13, 2009. All other regional 
office employees continue to process non-Agent Orange workload.
    Question. As the number of veterans and claims continue to 
increase, what is being done going forward to ensure that claims are 
processed in a more efficient and timely manner?
    Answer. Our approach to transformation is a holistic approach that 
changes our culture, improves our processes, and integrates innovative 
technologies. Through our claims transformation initiatives, we are 
laying technological and business transformation groundwork to 
streamline claims processing and eliminate the claims backlog. VA's end 
goal is the Veterans Benefits Management System (VBMS), a smart, 
paperless, electronic claims processing system.
    VBMS will dramatically reduce the amount of paper in the current 
claims process, and will employ rules-based claims development and 
decision recommendations where possible. Utilizing automated workflows 
and business rules engines will prevent common errors, thereby 
improving quality. Additionally, by using a services-oriented 
architecture and commercial off-the-shelf products, VA will be 
positioned to take advantage of future advances in technology developed 
in the marketplace to respond to the changing needs of veterans.
    While we work to develop the paperless system, we are making 
immediate changes to improve the efficiency of our business activities. 
New calculators guide decisionmakers with intelligent algorithms 
(similar to tax preparation software) or through simple spreadsheet 
buttons and drop-down menus in evaluating certain medical conditions. A 
growing body of evidence-gathering tools, called disability benefits 
questionnaires, brings new efficiencies to collection of medical 
information needed to rate each claim. The Fully Developed Claims 
Program speeds the decision process by empowering veterans and helping 
them submit claims that are ready for VA decision as soon as they are 
received.
    Question. Also, what is currently being done to address the massive 
existing backlog of VA claims?
    Answer. VBA increased the claims processing workforce in 2010 by 
converting 2,400 temporary employees, previously funded through the 
American Recovery and Reinvestment Act, to full-time employees, and 
hiring an additional 600 new employees. We currently employ more than 
11,000 full-time claims processors. VBA will begin to realize 
additional gains in production beginning in the fourth quarter of 
fiscal year 2011 as our new employees complete their training and gain 
in experience. We are continuing to hire claims processors in fiscal 
year 2011.
    In addition, all veterans service representatives and rating 
veterans service representatives with more than 1 year of experience in 
their position are now mandated to perform 20 hours of overtime per 
month. VBA realized positive results when a similar overtime strategy 
was implemented to reduce the backlog of education claims in the first 
year of post-9/11 GI Bill implementation.
    VBA recognizes that continuing to increase our full-time equivalent 
levels is not a sufficient solution. The need to better serve our 
veterans requires bold and comprehensive business process changes to 
transform VBA into a high-performing 21st century organization that 
provides the best services available to our Nation's veterans, 
survivors, and their families.
    VA's multi-tiered approach for addressing the dramatically 
increasing volume of incoming claims includes a number of innovations. 
VA deployed two rules-based calculators to streamline and improve 
decision quality, with more tools in the pipeline. VA is providing 
veterans with improved online access to claims status information and 
other self-service options (such as ordering copies of discharge 
records) through the eBenefits portal. This increases client 
satisfaction while freeing VA staff to work on claims. A recently 
deployed Agent Orange (AO) miner tool links AO-related databases 
together and facilitates data search in developing veterans' AO claims. 
New evidence-gathering tools are being developed, such as the 
disability benefits questionnaires, which sharpen the focus in medical 
examinations to ensure all information needed to rate the claim is 
gathered the first time in the medical examination process and is 
presented succinctly. VA's Fully Developed Claims Program operating in 
all 56 regional offices puts veterans in the driver's seat for 
submitting claims that are ready to rate when received.
    We estimate that in late 2012, production will begin to outpace 
receipts. At that same time, we plan to begin the deployment phase of 
the VBMS. VBMS will provide powerful new tools to claims examiners to 
boost efficiency and productivity. Gains in accuracy through rules-
based processing will reduce re-work and appeals. Rules-based 
processing and calculator tools also speed the rating process, which 
will increase employee productivity and provide additional staff hours 
to rate other claims.
  post-traumatic stress disorder/traumatic brain injury/mental health
    Question. Post-traumatic stress disorder (PTSD) and traumatic brain 
injury (TBI) continue to be serious conditions for many veterans, as 
are a host of other mental health issues.
    What more can be done to help veterans coping with PTSD, TBI, and 
mental health issues?
    Answer. VA has established a comprehensive system of clinical care 
for veterans with mental disorders including those veterans who suffer 
from TBI and other physical problems. These services are fully 
described in VHA Handbook 1160.01, Uniform Mental Health Services in VA 
Medical Centers and Clinics, published in 2008. This handbook defines 
requirements for those mental health services that must be available to 
all veterans, and those that must be directly provided by VA staff in 
VA facilities--medical centers, very large, large, mid-sized, and small 
CBOCs. Uniform access to evidence based clinical care across the VA 
system is a core feature of VA mental health services, as is a recovery 
orientation, providing services that will help veterans with serious 
mental illness fulfill their personal goals and live meaningful lives 
in a community of their choice. VA continues to work toward full 
implementation of the services described in the handbook; we have 
accomplished most implementation, but efforts remain for full 
implementation and sustainment.
    As of the first quarter of fiscal year 2011, 50.7 percent of OEF/
OIF/OND veterans who have come to VAMCs and clinics for care have 
received a provisional diagnosis of mental disorder. Of these 53.4 
percent have a provisional diagnosis of PTSD and 39.3 percent have a 
provisional diagnosis of depressive disorder. It is clear that mental 
health issues are prominent among returning servicemembers, but also 
that PTSD is not the only diagnosis manifested by these veterans.
    Recognizing that TBI is another common problem among veterans of 
the Southwest Asia wars, VA collaborated with the Defense Centers of 
Excellence for Psychological Health and Traumatic Brain Injury (DCoE) 
to hold a 2-day consensus conference of clinical and scientific experts 
on April 27-28, 2009. That conference concluded, based on a thorough 
review of the published evidence, that the assessment and treatment of 
veterans with co-occurring PTSD and mild TBI could be approached using 
the evidence-based approaches identified in the VA/DOD clinical 
practice guidelines. This information is the current standard of 
practice for these disorders and has been disseminated across the VA 
system through a variety of face to face, satellite broadcast, and Web-
based educational programs. VA mental health and rehabilitation 
services collaborate to address the needs of veterans with co-occurring 
PTSD, other mental health problems, and TBI. This coordination is 
typical of VA's integration of mental health with primary care and 
other medical services in order to enhance access of veterans to mental 
health services.
    With a clinical infrastructure based on evidence-based assessment 
and treatment, and enhanced mental health staffing since 2005, VA 
mental health services are left with two goals--sustaining and 
expanding the capability to provide these services and promoting access 
of veterans to these services. Sustaining services is being achieved by 
tracking the implementation of the Uniform Mental Health Services 
Handbook. Increasing access is being addressed by initiatives such as 
providing VA staff at colleges and universities, in a current pilot 
program, and enhancing availability of VA services in rural areas. 
Expanding the public's awareness of VA mental health services is being 
achieved through multiple activities, including (but not limited to):
  --Large public outreach campaigns;
  --Dissemination of a version of the Uniform Mental Health Services 
        Handbook developed to communicate about required mental health 
        services in language readily understood by veterans and their 
        families;
  --Web-based activities such as MyHealtheVet;
  --The National Center for PTSD Web site;
  --Collaborating with the Caregiver Initiative being implemented by VA 
        Social Work Service;
  --Information on VA services and ways to access these services made 
        available through social media such as Facebook;
  --A recently released PTSD app for iPhones; and
  --Collaborations with community partners, including initiatives such 
        as the VA/DOD Integrated Mental Health Strategy and the 
        Substance Abuse and Mental Health Services Administration 
        Policy Academy Technical Assistance Center.
                              rural access
    Question. What is the VA doing to provide improved access to 
healthcare services for the large population of rural veterans, 
especially in Kentucky?
    Answer. For fiscal year 2011, VA Rural Health Initiative funding of 
$250 million has been appropriated for National Telehealth/Telemedicine 
Expansion, Project Access Received Closer to Home, Veterans Rural 
Resource Centers, Teleradiology Services Sustainment, and veterans 
integrated service network (VISN) rural initiatives to include outreach 
clinics and mental health projects.
    Approximately 3.3 million veterans enrolled in the veterans 
healthcare system live in rural and highly rural areas. This represents 
41 percent of the approximately 8 million total enrolled veterans. 
Access to care for rural veterans is increasing which is partly due to 
the addition of 26 new rural CBOCs. As 25 additional rural CBOCs open, 
the numbers of enrolled veterans reported are expected to quickly grow.
    Rural access is also expanded through opening new rural outreach 
clinics, mobile units, and telehealth. Data from fiscal year 2009, 
fiscal year 2010 and fiscal year 2011 quarter one reports show that 
416,131 VA encounters/services were provided for rural veterans, 
including 8,927 rural OEF/OIF veterans and 11,704 rural women veterans.
    The State of Kentucky has seen a steady increase in VHA enrollment 
for rural veterans, across all enrollment categories. In fiscal year 
2010, 269 additional rural veterans enrolled in VHA. The State of 
Kentucky is part of VISN 9. VA currently funds 11 projects in VISN 9, 
all designed to expand access to high quality healthcare. Approximately 
5,734 VA encounters/services have been provided to/for rural veterans 
through these projects.
    In fiscal year 2010, there were 1,485 veterans in Kentucky that had 
telehealth-based care in VA clinics; these patients received 3,120 
encounters. Of this population receiving clinic-based care via 
telehealth, 88 percent (1,314) were in rural areas. Currently, as of 
June 6, 2011, 1,024 veterans in Kentucky are enrolled in VA's home 
telehealth programs, and 64 percent (656) of these patients live in 
rural areas.
    VA has opened two new rural health CBOCs, expanding both primary 
and specialty care, and has made significant expansion of available 
rehabilitation services in the area. VISN 9 is especially proud of 
expansion of teleretinal screening at the Clarksville CBOC.
    With funding from VA, VISN 9 has been a key contributor to the 
Rural Health Professions Institute (RHPI). RHPI collaborated with 
Mountain Home VAMC to deliver training to CBOCs and VISN 
representatives from across the Nation. The RHPI developed new teaching 
tools and technologies to facilitate understanding of rural culture and 
delivery of care. RHPI educated staff to the array of VA telehealth 
technologies, which offered rural veterans the opportunity to receive 
care from a variety of specialists. Although these projects are not 
located in Kentucky, they do provide access and care to veterans from 
Kentucky.
    Question. What measures are being taken by the VA to expand the use 
of telemedicine to help rural veterans who lack access to major VA 
facilities?
    Answer. VA provides funding of initiatives that optimize the use of 
available and emerging technologies to enhance services to veterans 
residing in rural and highly rural areas. VA continues to fund 
innovative and diverse pilot projects and service initiatives that 
improve access and quality of primary, mental health, and specialty 
care; and enhance care through advances in technology and telehealth 
services. In addition, the Veterans Rural Health Resource Center--
Eastern Region focuses on the education and training of VA and non-VA 
service providers caring for rural veterans and bringing specialty care 
to community-based clinics via telehealth technology. In fiscal year 
2010, VA telehealth programs provided care to veterans residing in 
rural and highly rural areas as follows:
  --Approximately 20,000 veterans using Home Telehealth;
  --Approximately 45,000 veterans using Clinical Video Telehealth; and
  --Approximately 77,000 veterans using Store and Forward Telehealth.
    VA plans to expand by 50 percent, both its Home Telehealth Program 
and capacity to undertake clinical consultations using real-time 
clinical video telehealth in fiscal year 2011. The capability to 
remotely review clinical digital images via Store and Forward 
Telehealth (nonradiology) is planned to increase by 30 percent in 
fiscal year 2011. VA also has other specific initiatives to expand the 
scope of its telehealth services that include:
  --Spinal cord injury (Tele-SCI);
  --Audiology (Tele-audiology); and
  --Pathology (Tele-pathology) clinical consultation networks.
    VA is developing a rural telehealth communications plan, which will 
include an annual report of accomplishments. The products and tool 
developed as a result of the communication plan will be distributed 
VHA-wide. VA places the highest priority on telehealth services and 
will continue to support expansion of telehealth services nationally.
          fort knox ireland community-based outpatient clinic
    Question. I am informed that DOD will begin budgeting for the 
replacement of the Fort Knox Ireland Army Community Hospital in fiscal 
year 2013. Currently, Ireland has a CBOC affiliated with it.
    What steps are being taken by the VA to ensure that efforts on the 
CBOC are synchronized with those of DOD and the new hospital?
    Answer. There is an ongoing dialogue between the VA and DOD 
concerning this issue. Efforts are being coordinated through the VA's 
DOD-sharing office and involve discussion at both the local and 
national levels. VA is developing a business case to best address the 
needs of veterans served by the CBOC at Fort Knox, which will be 
evaluated in VA's strategic capital investment planning process.

                          SUBCOMMITTEE RECESS

    Senator Johnson. This hearing is concluded.
    [Whereupon, at 11:54 a.m., Thursday, March 31, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
