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



 
   MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2013

                              ----------                              


                        THURSDAY, MARCH 15, 2012

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:03 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Tim Johnson (chairman) presiding.
    Present: Senators Johnson, Inouye, Landrieu, Reed, Nelson, 
Murkowski, Blunt, and Coats.

                     DEPARTMENT OF VETERANS AFFAIRS

STATEMENT OF HON. ERIC K. SHINSEKI, SECRETARY
ACCOMPANIED BY:
        HON. ROBERT A. PETZEL, M.D., UNDER SECRETARY FOR HEALTH
        ALLISON HICKEY, UNDER SECRETARY FOR BENEFITS
        STEVE L. MURO, UNDER SECRETARY FOR MEMORIAL AFFAIRS
        HON. ROGER W. BAKER, ASSISTANT SECRETARY FOR INFORMATION AND 
            TECHNOLOGY
        W. TODD GRAMS, EXECUTIVE IN CHARGE FOR THE OFFICE OF MANAGEMENT 
            AND CHIEF FINANCIAL OFFICER


                opening statement of senator tim johnson


    Senator Johnson. Good morning. This hearing will come to 
order. We meet today to review the President's fiscal year 2013 
budget request and fiscal year 2014 advance 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.
    Before we begin, I want to acknowledge the temporary 
absence of my friend and ranking member, Senator Mark Kirk. 
Senator Kirk has been a great partner as we try to provide the 
VA with the necessary funds and oversight to transform the VA 
into a modern 21st century department. In fact, I'm told that 
when his staff met with him very recently, his first question 
was, ``What progress has the VA and DOD made on electronic 
health records?'' I look forward to Senator Kirk's speedy 
return so that we can continue to work together for our 
Nation's vets.
    In order to reserve the majority of time for the questions, 
I'm going to keep my opening statement short. The overall 
discretionary budget request for the VA totals $61 billion, 
$2.5 billion over the fiscal year 2012 enacted level. 
Additionally, the submission includes $54.5 billion in fiscal 
year 2014 advance appropriations for VA medical care.
    Mr. Secretary, since taking the reins at the VA, you have 
made speeding up the disability claims process a top priority. 
The amount of time a vet has to wait to have his disability 
claim processed is one of the top complaints most elected 
officials hear from vets. Over the past 5 years, this 
subcommittee has given the Department all that it has asked for 
and more to assist in breaking through this logjam.
    Your budget this year requests an additional $145 million 
for Veterans Benefits Administration (VBA) and $128 million for 
the Veterans Benefits Management System, better known as the 
paperless claims processing system. I'm eager to hear where the 
VA is regarding deployment of the new paperless system and how 
these investments are speeding up the delivery of benefits.
    The budget request also includes $169 million for the 
development of the integrated Electronic Health Record (iEHR). 
This new system, being developed jointly with the Department of 
Defense (DOD), is envisioned to modernize the existing 
electronic health record systems at both the VA and the 
military services.
    While I am very pleased to see the VA and DOD working 
together to develop a system that will allow the two 
Departments to share electronic health information, I remain 
concerned about the lack of details accompanying the budget 
request. I will have specific questions about iEHR development 
and other topics during the question rounds.
    Again Mr. Secretary, welcome and thank you for appearing 
before the subcommittee today. 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. General Shinseki, please proceed.


               SUMMARY STATEMENT OF HON. ERIC K. SHINSEKI


    Secretary Shinseki. Thank you, Mr. Chairman.
    Chairman Johnson, Senator Murkowski, other distinguished 
members of the subcommittee, thank you for this opportunity to 
present the President's 2013 budget and 2014 advance 
appropriations request for the Department of Veterans Affairs.
    Let me take a moment, Mr. Chairman, also, to note the 
absence of Ranking Member Mark Kirk and to convey to him, on 
behalf of the VA, our best wishes for his speedy recovery.
    I would also like to acknowledge in the room today veterans 
service organizations that always work very closely with us and 
have been helpful in developing, resourcing, and improving the 
programs that we provide to better serve and care for veterans, 
for their families, and for survivors.
    I would note that this subcommittee has been unwavering in 
its support for our Nation's veterans. And I say that now, 
having worked through this budget process three times, and 
having been before you. The President has clearly demonstrated 
his priority for the requirements for this Department, and you 
have supported those requests each time we've been here.
    With these 2013 budget and 2014 advance appropriations 
requests, the President once again firmly demonstrates his 
respect and sense of obligation for our Nation's 22 million 
veterans. I thank the members for your longstanding commitment 
to veterans and seek, again, your support for these requests.
    If I might, let me introduce VA leaders who are joining me 
here at the witness table. From your right going to the left, 
Roger Baker, Assistant Secretary for Information and 
Technology; then Mr. Todd Grams, our Executive in Charge of the 
Office of Management, also our Chief Financial Officer; to my 
right, Dr. Randy Petzel, Under Secretary for Health; to his 
right, General Allison Hickey, Under Secretary for Benefits; 
and finally, the Hon. Steve Muro, Under Secretary for Memorial 
Affairs.
    And Mr. Chairman, thank you for allowing me to have my 
written statement submitted for the record.
    An important transition is underway, and VA must anticipate 
its outcomes. Our troops have already departed Iraq, and their 
numbers in Afghanistan are expected to decline. VA's history 
suggests that VA's requirements, for veterans who need our care 
and services, will continue to grow long after the last 
combatant leaves Afghanistan, perhaps for another decade or 
more.
    In the next 5 years, more than 1 million veterans are 
expected to leave military service. Through September 2011, of 
the approximately 1.4 million veterans who deployed to and 
returned from Afghanistan and Iraq, some 67 percent have used 
at least one VA benefit or service, a far higher percentage 
than previous generations.
    The President's 2013 VA budget request of $140.3 billion 
provides $64 billion in discretionary funding and $76.3 billion 
in mandatory funds. Our discretionary budget request represents 
an increase of $2.7 billion or 4.5 percent over the 2012 
enacted level.
    This request would allow VA to fulfill the requirements of 
our mission: Healthcare for 8.8 million enrolled veterans, 
compensation and pension benefits for nearly 4.2 million 
veterans, life insurance covering 7.1 million Active Duty 
servicemembers and enrolled veterans at a 95-percent customer 
satisfaction rating, educational assistance for over 1 million 
veterans and family members on over 6,500 campuses, home 
mortgages that guarantee over 1.5 million servicemember and 
veteran loans with the Nation's lowest foreclosure rate, burial 
honors for nearly 120,000 heroes and eligible family members in 
our 131 national cemeteries befitting their service to our 
Nation.
    The 2013 budget request builds momentum in our three 
priorities--and you've heard me talk about these in past budget 
testimonies--increasing access to care, benefits, and services; 
eliminating the claims backlog; and ending veteran 
homelessness.
    Access--the 2013 budget request balances capital 
requirements with operating needs. It allows VA to continue 
improving access by opening new or improved facilities closer 
to where veterans live and providing telehealth, telemedicine, 
including in veterans' homes; by also fundamentally 
transforming veterans' access to benefits through a new 
electronic tool called the Veterans Relationship Management 
System; by collaborating with DOD to turn the current 
Transition Assistance Program called TAP into an outcomes-based 
training and education program that fully prepares departing 
servicemembers for the next phase of their lives; and then, 
finally, by better serving rural and women veterans.
    Of the 1 million veterans who are expected to leave the 
military over the next 5 years, we are expecting that at least 
600,000 of them will likely seek VA care, benefits, and 
services.
    Regarding the backlog, from what we can see today, fiscal 
year 2013 is likely to be the first year in which our claims 
production exceeds the number of incoming claims. The paperless 
initiative we have been developing over the past 2 years is 
critical to increasing the quality of our claims decisions and 
the speed with which we are able to process them. Processing 
speed and quality will eliminate the backlog.
    Your support of our information technology (IT) priorities 
in the past, very helpful, has been essential to delivering 
benefits, healthcare, and memorial services to our veterans. We 
approach the tipping point in ending the backlog in disability 
claims. Stability in IT funding is key to eliminating that 
backlog.
    Finally on homelessness, from January 2010 to January 2011, 
alone, the estimated number of homeless veterans declined by 12 
percent. We have momentum here, but more momentum is needed to 
end veteran homelessness in 2015.
    We are building a dynamic homeless veterans registry which 
contains over 400,000 names of current and formerly homeless 
veterans. And in the years ahead, this information will allow 
us to see, to track, to understand, and most importantly, to 
prevent veterans from falling into homelessness, and this 
budget supports that plan.


                           PREPARED STATEMENT


    We are committed to the responsible use of the resources 
you provide. And again, thank you for this opportunity to 
appear before this subcommittee. We look forward to your 
questions.
    [The statement follows:]

              Prepared Statement of Hon. Eric K. Shinseki

    Chairman Johnson, 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 2013 budget and 2014 advance appropriations 
requests for the Department of Veterans Affairs (VA). For the past 
three budget requests, the Congress has supported the very high 
priority that the President has placed on funding for programs that 
provide care and benefits for our Nation's 22 million veterans and 
their families. This submission seeks your support of the President's 
continued high priority support for veterans who have earned this 
Nation's respect and the benefits and services we provide.
    We meet at an historic moment for our Nation's Armed Forces, as 
they turn the page on a decade of war. Recently, the President outlined 
a major shift in the Nation's strategic military objectives--with a 
goal of a more agile, more versatile, more responsive military focused 
on the future. The President also outlined another important 
objective--keeping faith with those who serve as they depart the 
military and return to civilian life. As these newest veterans return 
home, we must anticipate their transitions by readying the care, the 
benefits, and the job opportunities they have earned and they will need 
to smoothly and successfully make this transition.
    The President's 2013 budget for VA requests $140.3 billion--
comprised of $64 billion in discretionary funds, including medical care 
collections, and $76.3 billion in mandatory funds. The discretionary 
budget request represents an increase of $2.7 billion, or 4.5 percent, 
over the 2012 enacted level. Our 2013 budget will allow the Department 
to operate the largest integrated healthcare system in the country, 
with more than 8.8 million veterans enrolled to receive healthcare; the 
eighth largest life insurance provider covering both Active Duty 
members as well as enrolled veterans; a sizeable education assistance 
program serving over 1 million participants; a home mortgage service 
that guarantees over 1.5 million veterans' home loans with the lowest 
foreclosure rate in the Nation; and the largest national cemetery 
system that continues to lead the country as a high-performing 
organization--for the fourth time in a 10-year period besting the 
Nation's top corporations and other Federal agencies in an independent 
survey of customer satisfaction. In 2013, VA national cemeteries will 
inter about 120,000 veterans or their family members.
    The Department of Veterans Affairs fulfills its obligation to 
veterans, their families, and survivors of the fallen by living a set 
of core values that define who we are as an organization: ``I CARE''--
integrity, commitment, advocacy, respect, and excellence--cannot be 
converted into dollars in a budget. But veterans trust that we will 
live these values, every day, in our medical facilities, our benefits 
offices, and our national cemeteries. And where we find evidence of a 
lack of commitment to our values, we will aggressively correct them by 
re-training employees or, where required, removal. We provide the very 
best in high quality and safe care and compassionate services, 
delivered by more than 316,000 employees, who are supported by the 
generosity of 140,000 volunteers.

                        STEWARDSHIP OF RESOURCES

    Safeguarding the resources--people, money, time--entrusted to us by 
the Congress, managing them effectively and deploying them judiciously, 
is a fundamental duty at VA. Effective stewardship requires an 
unflagging commitment to apply budgetary resources efficiently, using 
clear accounting rules and procedures, to safeguard, train, motivate, 
and hold our workforce accountable; and to assure the proper use of 
time in serving veterans on behalf of the American people.
    During the audit of the Department's fiscal year 2010 financial 
statement, VA's independent auditor certified that we had remediated 
all three of our remaining material weaknesses in financial management, 
which had been carried forward for over a decade. In terms of internal 
controls and fiscal integrity, this was a major accomplishment. We have 
also dramatically reduced the number of significant financial 
deficiencies since 2008, from 16 to 2.
    Another example of VA's effective stewardship of resources is the 
Project Management Accountability System (PMAS) developed by our Office 
of Information Technology. PMAS requires information technology (IT) 
projects to establish milestones to deliver new functionality to its 
customers every 6 months. Now entering its third year, PMAS continues 
to instill accountability and discipline in our IT organization. In 
2011, PMAS achieved successful delivery of 89 percent of all IT project 
milestones. VA managed 101 IT projects during the year, establishing a 
total of 237 milestones and successfully executing 212 of them. Of the 
25 IT projects that missed their delivery milestone date, more than 
half delivered within the next 14 days. Ensuring IT projects meet 
established milestones means that savings and delivery of solutions are 
achieved throughout development, and that veterans reap improvements 
sooner. By implementing PMAS, we have achieved at least $200 million in 
cost avoidance by stopping or improving the management of 45 projects.
    VA's stewardship of resources continues with the expansion of our 
ASPIRE dashboard to the Veterans Benefits Administration (VBA). 
Originally established in 2010 for the Veterans Health Administration 
(VHA), ASPIRE publicly provides quality goals and performance measures 
of VA healthcare. The success of this approach was reflected in its 
contribution to VHA's receipt of the Annual Leadership Award from the 
American College of Medical Quality. On June 30, 2011, VBA established 
an ASPIRE Web site at http://www.vba.va.gov/reports/aspiremap.asp for 
aspirational goals and monthly progress for 46 performance metrics 
across six business lines. The new effort expands the Department's 
commitment to unprecedented public transparency by sharing performance 
and productivity data in the delivery of veterans' benefits, including 
compensation, pension, vocational rehabilitation and employment, 
education, home loans, and insurance.
    Through the effective management of our acquisition resources, VA 
achieves positive results for veteran-owned small businesses. VA leads 
the Federal Government in contracting with service-disabled, veteran-
owned small businesses (SDVOSB). In 2011, more than 18 percent of all 
VA procurements were awarded to SDVOSBs, exceeding our internal goal of 
10 percent and far exceeding the Governmentwide goal of 3 percent.
    Finally, VA's stewardship achieved savings in several other areas 
across the Department. The National Cemetery Administration (NCA) 
assumed responsibility in 2009 for processing First Notices of Death to 
terminate compensation benefits to deceased veterans. This allows the 
timely notification to next-of-kin of potential survivor benefits. 
Since that time, NCA has avoided possible collection action by 
discontinuing $100.3 million in benefit payments. In addition, we 
implemented the use of Medicare pricing methodologies at VHA to pay for 
certain outpatient services in 2011, resulting in savings of over $160 
million without negatively impacting veteran care and with improved 
consistency in billing and payment.

                           VETERANS JOB CORPS

    In his State of the Union address, President Obama called for a new 
Veterans Job Corps initiative to help our returning veterans find 
pathways to civilian employment. The budget includes $1 billion to 
develop a Veterans Job Corps conservation program that will put up to 
20,000 veterans back to work over the next 5 years protecting and 
rebuilding America. Veterans will restore our great outdoors by 
providing visitor programs, restoring habitat, protecting cultural 
resources, eradicating invasive species, and operating facilities. 
Additionally, veterans will help make a significant dent in the 
deferred maintenance of our Federal, State, local, and tribal lands 
including jobs that will repair and rehabilitate trails, roads, levees, 
recreation facilities, and other assets. The program will serve all 
veterans, but will have a particular focus on post-9/11 veterans.

                MULTI-YEAR PLAN FOR MEDICAL CARE BUDGET

    Under the Veterans Health Care Budget Reform and Transparency Act 
of 2009, which we are grateful to Congress for passing; VA submits its 
medical care budget that includes an advance appropriations request in 
each budget submission. This legislation requires VA to plan its 
medical care budget using a multi-year approach. This approach ensures 
that VA requirements are reviewed and updated based on the most recent 
data available and actual program experience.
    The 2013 budget request for VA medical care appropriations is $52.7 
billion, an increase of 4.1 percent over the 2012 enacted appropriation 
of $50.6 billion. This request is an increase of $165 million above the 
2013 advance appropriations enacted by Congress in 2011. Based on 
updated 2013 estimates largely derived from the Enrollee Health Care 
Projection Model, the requested amount would also allow VA to increase 
funding in programs to eliminate veteran homelessness, fully fund the 
implementation of the Caregivers and Veterans Omnibus Health Services 
Act, support activation requirements for new or replacement medical 
facilities, and invest in strategic initiatives to improve the quality 
and accessibility of VA healthcare programs. Our multi-year budget plan 
continues to assume $500 million in unobligated balances from 2012 that 
will carryover and remain available for obligation in 2013--consistent 
with the 2012 budget submitted to Congress.
    The 2014 request for medical care advance appropriations is $54.5 
billion, an increase of $1.8 billion, or 3.3 percent, over the 2013 
budget request.

                             PRIORITY GOALS

    Our Nation is in a period of transition. As the tide of war 
recedes, we have the opportunity, and the responsibility, to anticipate 
the needs of returning veterans. History shows that the costs of war 
will continue to grow in VA for a decade or more after the operational 
missions in Iraq and Afghanistan have ended. In the next 5 years, 
another 1 million veterans are expected to leave military service. Our 
data shows that the newest of our country's veterans are relying on VA 
at unprecedented levels. Through September 30, 2011, of the 
approximately 1.4 million living veterans who were deployed overseas to 
support Operation Enduring Freedom and Operation Iraqi Freedom, at 
least 67 percent have used some VA benefit or service.
    VA's three priorities--to expand access to benefits and services, 
eliminate the claims backlog, and end veteran homelessness--anticipate 
these changes and identify the performance levels required to meet 
emerging needs. The 2013 budget builds upon our multi-year effort to 
achieve VA's priority goals through effective, efficient, and 
accountable program implementation.

               EXPANDING ACCESS TO BENEFITS AND SERVICES

    Expanding access for veterans is much more than boosting the number 
of veterans walking in the front door of a VA facility. Access is a 
three-pronged effort that encompasses VA's facilities, programs, and 
technology. Today, expanding access includes taking the facility to the 
veteran--be it virtually through telehealth, by sending mobile vet 
centers to rural areas where services are sparse, or by using social 
media sites like Facebook, Twitter, and YouTube to connect veterans to 
VA benefits and facilities. Expanding access also means finding new 
ways to break down artificial barriers so that veterans are aware of 
and can gain access to VA services and benefits. Technology is the 
great enabler of all VA efforts. IT is not a siloed segment of the 
budget, providing just computers and monitors, but rather the vehicle 
by which VA is able to extend the reach of its healthcare to rural 
America, process benefits more quickly, and provide enhanced service to 
veterans and their families.
    The 2013 budget request includes $119.4 million for the Veterans 
Relationship Management (VRM) initiative, which is fundamentally 
transforming veterans' access to VA benefits and services by empowering 
VA clients with new self-service tools. VA has already made major 
strides under this initiative. VRM established a single queue for VBA's 
National Call Centers ensuring calls are routed to the next available 
agent, regardless of geography. Call-recording functionality was 
implemented that allows agents to review calls for technical accuracy 
and client contact behaviors. VA recently deployed ``Virtual Hold ASAP 
call-back'' technology. During periods of high call volumes, callers 
can leave their name and phone number instead of waiting on hold for 
the next available operator, and the system automatically calls them 
back in turn. The Virtual Hold system has made nearly 600,000 return 
calls since November 2011. The acceptance rate for callers is 46 
percent, exceeding the industry standard of 30 percent, and our 
successful re-connect rate is 92 percent. Since launching Virtual Hold, 
the National Call Centers have seen a 15-percent reduction in the 
dropped-call rate. In December 2011, VA deployed ``Virtual Hold 
scheduled call-back'' technology, which allows callers to make an 
appointment with us to call them at a specific time. Since deployment, 
over 185,000 scheduled call-backs have already been processed.
    In December, VA deployed a pilot of its new ``unified desktop'' 
technology. This initiative will provide National Call Center agents 
with a single, unified view of VA clients' military, demographic, and 
contact information and their benefits eligibility and claims status 
through one integrated application, versus the current process that 
requires VA agents to access up to 13 different applications. This will 
help ensure our veterans receive comprehensive and accurate responses.
    Key to expansion of access is the eBenefits portal--one of our 
critical VRM initiatives. eBenefits is a VA/DOD initiative that 
consolidates information regarding benefits and services and includes a 
suite of online self-service capabilities for enrollment/application 
and utilization of benefits and services. eBenefits enrollment now 
exceeds 1.2 million users, and VA expects enrollment to exceed 2.5 
million by the end of 2013. VA continues to expand the capabilities 
available through the eBenefits portal. Users can check the status of a 
claim or appeal, review the history of VA payments, request and 
download military personnel records, generate letters to verify their 
eligibility for veterans' hiring preferences, secure a certificate of 
eligibility for a VA home loan, and numerous other benefit actions. In 
2012, servicemembers will complete their servicemembers' Group Life 
Insurance applications and transactions through eBenefits. Also, 2012 
enhancements will allow veterans to view their scheduled VA medical 
appointments, file benefits claims online in a ``turbo claim'' like 
approach, and upload supporting claims information that feeds our 
paperless claims process. In 2013, funding supports enhanced self-
service tools for the Civilian Health and Medical Program of the 
Department of Veterans Affairs (CHAMPVA) and VetSuccess programs, as 
well as the veterans online application for enrolling in VA healthcare.
    VA and the Department of Defense (DOD) have broken new ground in 
the development and implementation of the Integrated Disability 
Evaluation System (IDES). This system supporting the transition of 
wounded, ill, and injured servicemembers is fully operational and 
available to servicemembers as of October 1, 2011. Because of the 
complexity of these cases, the Veterans Benefits Administration devotes 
four times the level of staffing resources to processing IDES cases 
than claims from other veterans. VA has reduced its claims processing 
time in IDES from 186 days in February 2011 to 104 days in December 
2011. The 2013 budget requests an additional $13.2 million and 90 FTE 
to support IDES enhancements.
    The DOD/VA team is further developing programs to enhance the 
transition of all servicemembers to veteran status. Together we are 
transforming the current Transition Assistance Program (TAP) from a 
series of discrete efforts to one that uses an outcome-based approach. 
This approach will be more integrated and, once complete, will be 
mapped to the lifecycle of every servicemember, from recruitment 
through separation or retirement. In July 2011, VBA launched online TAP 
courseware, which provides the capability for servicemembers to 
complete the course without attending the classroom session. VA and DOD 
also are collaborating on a policy for implementing mandatory TAP 
participation.
    VA will improve access to VA services by opening new or improved 
facilities closer to where veterans live. The 2013 medical care budget 
request includes $792 million to open new and renovated healthcare 
facilities, including resources to support the activation of four new 
hospitals in Orlando, Florida; Las Vegas, Nevada; New Orleans, 
Louisiana; and Denver, Colorado. These new VA medical centers are 
projected to serve 1.2 million enrolled veterans when they are 
operational. This budget also includes an initiative to establish a 
national cemetery presence in eight rural areas where the veteran 
population is less than 25,000 within a 75-mile service area. In 
addition to expanding access at fixed locations, VA is deploying an 
additional 20 mobile vet centers in 2012 to increase access to 
readjustment counseling services for veterans and their families in 
rural and underserved communities across the country. These new 
specialty vehicles will expand the existing fleet of 50 mobile vet 
centers already in service by 40 percent. In 2011, mobile vet centers 
participated in more than 3,600 Federal, State, and locally sponsored 
veteran-related events. More than 190,000 veterans and family members 
made over 1.3 million visits to VA vet centers in 2011.
    The Board of Veterans Appeals (BVA) leverages video conference 
technology to increase the capability of, and access to, video hearings 
to provide veterans with more options for a hearing regarding their 
appeal. The VA is currently upgrading this video conference technology 
both at BVA and at VBA regional offices. In 2011, the number of video 
hearings increased from 3,979 to 4,355 or 9.4 percent. The Board is 
also working with VBA and VHA to allow video hearings to be held from 
more locations in the field, which will be more convenient for 
veterans. Initially, the expanded video capability will be used to 
reduce the backlog of hearings and the time veterans have to wait for 
them.
    We are working harder than ever to reach out to women veterans. 
Women represent about 8 percent of the total veteran population. In 
recent years, the number of women veterans seeking healthcare has grown 
rapidly and it will continue to grow as more women enter military 
service. Women comprise nearly 15 percent of today's Active Duty 
military forces and 18 percent of National Guard and Reserves. For the 
estimated 337,000 women veterans currently using the VA healthcare 
system, VA is improving their access to services and treatment 
facilities. The 2013 budget includes $403 million for the gender-
specific healthcare needs of women veterans, an increase of 17.5 
percent over the 2012 level.
    VHA regularly updates its standards for improving and measuring 
veterans' access to medical care programs. In 2010, VHA implemented new 
wait time measures that assess performance meeting the new standard of 
providing medical appointments within 14 days of the desired date, 
replacing the previous 30-day desired-date standard. In 2011, 89 
percent of medical care appointments for new patients occurred within 
14 days of the desired date, an increase of 5 percentage points over 
the 2010 level of 84 percent. The President's request for 2013 ensures 
we are able to continue to improve our performance in providing this 
service.
    Access improvements are central to VHA's new patient-aligned care 
teams (PACT) model. VA views appointments as a partnership. We are 
implementing a national initiative to reduce costly no-show 
appointments. Also, veterans can manage appointments by visiting 
MyHealtheVet Web site, where they can view all of their pending 
appointments. In another effort to help veterans make and keep 
appointments, VA is implementing a pilot program that offers child care 
to eligible veterans seeking medical appointments at three VA medical 
centers in 2012 and 2013. The first of these facilities, the Buffalo 
VAMC, began providing services in October 2011. Each pilot site will be 
operated onsite by licensed childcare providers. Drop-in services will 
be offered free of charge to veterans who are eligible for VA care and 
who are visiting a medical facility for an appointment.
    VA is taking full advantage of technology to expand access to its 
medical centers. In 2008, VA established a presence on Facebook with a 
single Veterans Health Administration (VHA) page. In 2009, VA 
established the Post-9/11 GI Bill Facebook page to raise awareness 
about the implementation of this new benefit program. With over 39,000 
subscribers (or fans), this page serves as our primary real-time tool 
to communicate GI Bill news and directly interact with our clients. VA 
also launched a general VBA benefits page, which describes all of our 
services. VBA posts to its followers 7 days a week and is followed in 
18 different countries and 15 different languages. In June 2011, VA 
outlined a Department-wide social media policy that provides guidelines 
for communicating with VA online. By November 2011, VA had established 
Facebook pages for all 152 of its medical centers. This event marks an 
important milestone in our effort to transform how the Department 
communicates with veterans and provides them access to healthcare and 
benefits. By leveraging Facebook, VA continues to embrace transparency 
and engage veterans in a two-way conversation. VA currently has over 
345,000 combined Facebook fans. As of January 2012, the Department's 
main Facebook page has over 154,000 fans and its medical centers have a 
combined following of over 69,000.

                     ELIMINATING THE CLAIMS BACKLOG

    To transform VA for the benefit of veterans, we must streamline the 
claims processing system and eliminate the claims backlog. We are 
vigorously pursuing a claims transformation plan that will adopt near-
term innovations and break down stubborn obstacles to providing 
veterans the benefits they have earned.
    As we pursue a multi-focused approach to eliminate the claims 
backlog, workload in our disability compensation and pension programs 
continues to rise. VA has experienced a 48-percent increase in claims 
receipts since 2008, and we expect that the incoming claims volume will 
continue to increase by 4.2 percent in 2013, to 1,250,000 claims from 
1,200,000 in 2012. At the same time, veterans are claiming many more 
disabilities, with Iraq and Afghanistan veterans claiming an average of 
8.5 disabilities per claim--more than double the number of disabilities 
claimed by veterans of earlier eras. As more than 1 million troops 
leave service over the next 5 years, we expect our claims workload to 
continue to rise for the foreseeable future. In 2013, our goal is to 
ensure that no more than 40 percent of the compensation and pension 
claims in the pending inventory are more than 125 days old. While too 
many veterans will still be waiting too long for the benefits they have 
earned, it does represent a significant improvement in performance over 
the 2012 estimate of 60 percent of claims more than 125 days old, 
demonstrating that we are on the right path.
    VA is attacking the claims backlog through an aggressive 
transformation plan that includes initiatives focused on the people, 
processes, and technology that will eliminate the backlog. We are 
implementing a new standardized operating model in all our regional 
offices beginning this year that incorporates a case-management 
approach to claims processing. It establishes distinct processing lanes 
based on the complexity and priority of the claims and assigns 
employees to the lanes based on their experience and skill levels. 
Integrated, cross-functional teams work claims from start to finish, 
facilitating the quick flow of completed claims and allowing for 
informal clarification of claims processing issues to minimize rework 
and reduce processing time. More easily rated claims move quickly 
through the system, and the quality of our decisions improves by 
assigning our more experienced and skilled employees to the more 
complex claims. The new operating model also establishes an intake 
processing center at every regional office, adding a formalized process 
for triaging mail and enabling more timely and accurate distribution of 
claims to the production staff in their appropriate lanes.
    VA is increasing the expertise of our workforce and the quality of 
our decisions through national training standards that prepare claims 
processors to work faster and at a higher quality level. Our training 
and technology skills programs will continue to deliver the knowledge 
and expertise our employees need to succeed in a 21st century 
workplace. We are establishing dedicated teams of quality review 
specialists at each regional office. These teams will evaluate decision 
accuracy at both the regional office and individual employee levels, 
and perform in-process reviews to eliminate errors at the earliest 
possible stage in the claims process. Personnel trained by our national 
quality assurance staff comprise the quality review teams to assure 
local reviews are consistently conducted according to national 
standards.
    Using design teams, VBA is conducting rapid development and testing 
of process changes, automated processing tools, and innovative 
workplace incentive programs. The first design team developed a method 
to simplify rating decisions and decision notification letters that was 
implemented nationwide in December 2011. This new decision notification 
process streamlines and standardizes the development and communication 
of claims decisions. This initiative also includes a new employee job-
aid that uses rules-based programming to assist decisionmakers in 
assigning an accurate service-connected evaluation. VBA's 
Implementation Center, established at VBA headquarters as a program 
management office, streamlines the process of innovation to ensure that 
new ideas are approved through a governance process. This allows us to 
focus on initiatives that will achieve the greatest gains.
    VA continues to promote the Fully Developed Claims (FDC) program. 
We believe utilization of the FDC program will significantly increase 
as a result of the public release last month of 68 more disability 
benefits questionnaires (DBQs), bringing the total number of DBQs 
publicly available to 71. DBQs are templates that solicit the medical 
information necessary to evaluate the level of disability for a 
particular medical condition. Currently used by Veterans Health 
Administration examiners, the release of these DBQs to the public will 
allow veterans to take them to their private physicians, facilitating 
submission of a complete claims package for expedited processing. VA 
plans an aggressive communications strategy surrounding the release of 
these DBQs that will promote the FDC program. We also continue to work 
with the VSO community to identify ways to boost FDC program 
participation and better inform and serve veterans and their advocates.
    This year VA is also beginning national implementation of our new 
paperless processing system, the Veterans Benefits Management System 
(VBMS). We are implementing VBMS using a phased approach that will have 
all regional offices on the new system by the end of 2013. We will 
continue to add and expand VBMS functionality throughout this process. 
Establishment of a digital, near-paperless environment will allow for 
greater exchange of information and increased transparency to veterans, 
our workforce, and stakeholders. Increased use of state-of-the-art 
technology plays a major role in enabling VA to eliminate the claims 
backlog and redirect capacity to better serve veterans and their 
families. Our strategy includes active stakeholder participation 
(veterans service officers, State Departments of Veterans Affairs, 
county veterans service officers, and Department of Defense) to provide 
digitally ready electronic files and claims pre-scanned through online 
claims submission using the eBenefits Web portal. VBA has aggressively 
promoted the value of eBenefits and the ease of enrolling into the 
system. The 2013 budget invests $128 million in VBMS.

                      ENDING VETERAN HOMELESSNESS

    The administration is committed to ending homelessness among 
veterans by 2015. Between January 2010 and January 2011 homelessness 
declined by 12 percent, keeping VA on track to meet the goal of ending 
veteran homelessness in 2015. The VA's homeless veteran registry is 
populated with over 400,000 names of current and formerly homeless 
veterans who have utilized VA's Homeless Programs--allowing us to 
better see the scope of the issues so we can more effectively address 
them.
    In the 2013 budget, VA is requesting $1.352 billion for programs 
that will prevent and treat veteran homelessness. This represents an 
increase of $333 million, or 33 percent over the 2012 level. This 
budget will support our long-range plan to eliminate veteran 
homelessness by reducing the number of homeless veterans to 35,000 in 
2013 by emphasizing rescue and prevention.
    To get veterans off the streets and into stable environments, VA's 
Grant and Per Diem Program awards grants to community-based 
organizations that provide transitional housing and support services. 
VA's goal is to serve 32,000 homeless veterans in this program in 2013. 
Transitional housing is also provided through the Healthcare for 
Homeless Veterans program. Permanent housing is achieved with Housing 
Choice vouchers in the Department of Housing and Urban Development 
(HUD)-VA Supportive Housing (HUD-VASH) Program, and by 2013 VA plans to 
provide case management support for the nearly 58,000 HUD Housing 
Choice vouchers available to assist our most needy homeless veterans.
    Culminating 2 years of work to end homelessness among veterans, the 
Building Utilization Review and Repurposing (BURR) initiative helped 
identify unused and underused buildings and land at existing VA 
property with the potential for repurposing to veteran housing. The 
BURR initiative supports VA's goal of ending veteran homelessness by 
identifying excess VA property that can be repurposed to provide safe 
and affordable housing for veterans and their families. As a result of 
BURR, VA began developing housing opportunities at 34 nationwide 
locations for homeless or at-risk veterans and their families using its 
enhanced use lease (EUL) authority (now expired). The housing 
opportunities developed through BURR will add approximately 4,100 units 
of affordable and supportive housing to the projects already in 
operation or under construction, for an estimated total of 5,400 units.
    Although the Department's enhanced use lease authority has expired, 
the administration will work with Congress to develop future 
legislative authorities to enable the Department to further repurpose 
the properties identified by the BURR process. Beyond reducing 
homelessness among our veterans, additional opportunities identified 
through BURR may include housing for veterans returning from Iraq and 
Afghanistan, assisted living for elderly veterans, and other possible 
uses that will enhance benefits and services to veterans and their 
families.
    Of all claimants served by the Veterans Benefits Administration 
(VBA), homeless veterans represent our most vulnerable population and 
require specialized care and services. The 2013 budget requests $21 
million for the Homeless Veterans Outreach Coordinator (HVOC) 
initiative, which would provide an additional 200 coordinators 
nationwide to expedite disability claims; acquire housing and prevent 
veterans from losing their homes; expedite access to vocational 
training and job opportunities; and resolve legal issues at regional 
justice courts. These new case managers would significantly improve 
outcomes on behalf of the Nation's homeless veterans. For example, the 
initiative would improve the timeliness of disability claims decisions 
for homeless and at-risk veterans by reducing the claims processing 
times by nearly 40 percent between 2011 and 2015.
    In 2011, VHA hired 366 (or 90 percent of 407 total positions) 
homeless or formerly homeless veterans as vocational rehabilitation 
specialists to provide individualized supported employment services to 
unemployed homeless veterans through the Homeless Veterans Supported 
Employment Program. Recent initiatives to increase employment of 
veterans in Federal and other public sector jobs will help to reduce 
homelessness and also ensure their families are supported. On January 
18, 2012, VA hosted a career fair for veterans in Washington, DC. Over 
4,000 veterans attended this event to explore and apply for thousands 
of public and private sector job opportunities.
    The VA also helps veterans obtain employment with education and 
training assistance. The National Cemetery Administration (NCA) is 
helping to provide employment opportunities for homeless veterans 
through a new, paid apprenticeship training program serving veterans 
who are homeless or at risk of homelessness. The program will be based 
on current NCA training requirements for positions such as cemetery 
caretakers and cemetery representatives. Veterans who successfully 
complete the program at national cemeteries will be guaranteed full-
time permanent employment at a national cemetery or may choose to 
pursue employment in the private sector. The Veterans Retraining 
Assistance Program is a joint effort with VA and the Department of 
Labor to provide 12 months of retraining assistance. The program is 
limited to 54,000 participants from October 1, 2012, through March 31, 
2014. Education and training assistance are preventive programs.
    Other preventive services programs include the Supportive Services 
for Veteran Families, which provides rapid case management and 
financial assistance, coordinated with community and mainstream 
resources, to promote housing stability. In time, VA will transition 
its homeless efforts primarily to prevention. Through coordinated 
partnerships with other Federal and local partners and providers, VA 
will assist at-risk veterans in maintaining housing, accessing 
supportive services that promote housing stability, and identifying the 
resources to rapidly re-house veterans and their dependents if they 
should fall into homelessness. This shift to increased preventive 
efforts will require us to be much more knowledgeable about the causes 
of veterans' homelessness, about the details of our current homeless 
and at-risk veteran populations, and about creating action plans that 
serve veterans at the individual level.

                          MEDICAL CARE PROGRAM

    The 2013 budget requests $52.7 billion for healthcare services to 
treat over 6.33 million unique patients, an increase of 1.1 percent 
over the 2012 estimate. Of those unique patients, 4.4 million veterans 
are in priority groups 1-6, an increase of more than 64,000 or 1.5 
percent. Additionally, VA anticipates treating over 610,000 veterans 
from the conflicts in Iraq and Afghanistan, an increase of over 53,000 
patients, or 9.6 percent, over the 2012 level.
Medical Care in Rural Areas
    The delivery of healthcare in rural areas faces major challenges, 
including a shortage of healthcare resources and specialty providers. 
In 2011, we obligated $18.8 billion to provide healthcare to veterans 
who live in rural areas. Some 3.6 million veterans enrolled in the VA 
healthcare system live in rural or highly rural areas of the country; 
this represents about 42 percent of all enrolled veterans. For that 
reason, VA will continue to emphasize rural health in our budget 
planning, including addressing the needs of Native American veterans. 
The 2013 budget continues to invest in special programs designed to 
improve access and the quality of care for veterans residing in rural 
areas. For example, in the remote, sparsely populated areas of Montana, 
Utah, Wyoming, and Colorado, VA has supported the development and 
expansion of a network-wide operational telehealth infrastructure that 
supports a virtual intensive care unit, tele-mental health services, 
and primary care and specialty care to 67 fixed and mobile sites. 
Again, IT investment is the foundation of our work in all of these 
areas.
    In rural areas with larger populations, funding supports the 
opening of new rural clinics, such as the one located in Newport, 
Oregon, which serves over 1,200 veterans. This clinic is a unique 
partnership between VA and the local Lincoln County government. The 
county government provides clinical space, equipment, and supplies, 
while VA funds the salaries for the primary care and mental health 
providers.
Mental Healthcare
    The budget requests $6.2 billion for mental health programs, for an 
increase of $312 million over the 2012 level of $5.9 billion. VA is 
increasing outreach opportunities to connect with and treat veterans 
and their families in new, innovative ways. In April 2011, VA launched 
the first in a series of mobile smartphone applications, the PTSD 
Coach. It provides information about PTSD, self-assessment and symptom 
management tools, and information on how to get help. VA developed this 
technology in collaboration with DOD and with input from veterans, who 
let the development team know what they did and did not want in the 
application (app). As of the end of 2011, the app had just over 41,000 
downloads in 57 countries. In addition, VA is developing PTSD Family 
Coach that will complement the Coaching into Care National Call Center, 
which provides support to family members of veterans.
    In 2011, VA also launched Make the Connection, a national public 
awareness campaign for veterans and their family members to connect 
with other veterans to share common experiences, and ultimately to 
connect them with information and resources to help with the challenges 
that can occur when transitioning from military service to civilian 
society. This is an important effort in breaking down the stigma 
associated with mental health issues and treatment. The campaign's 
central focus is a Web site, www.MakeTheConnection.net, featuring 
numerous veterans who have shared their experiences, challenges, and 
triumphs. It offers a place where veterans and their families can view 
the candid, personal testimonials of other veterans who have dealt with 
and are working through a variety of common life experiences, day-to-
day symptoms, and mental health conditions. The Web site also connects 
veterans and their family members with services and resources they may 
need.

Long-Term Medical Care
    As the veteran population ages, VA will expand its provision of 
both institutional and non-institutional long-term care services. These 
services are designed not just for the elderly, but for veterans of all 
ages who have a serious chronic disease or disability requiring ongoing 
care and support, including those returning from Iraq and Afghanistan 
suffering from traumatic injuries. Veterans can receive long-term care 
services at home, at VA medical centers, or in the community. In 2013, 
the long-term care budget request is $7.2 billion. VA will continue to 
provide long-term care in the least restrictive and most clinically 
appropriate settings by providing more non-institutional care closer to 
where veterans live. This budget supports an increase of 6 percent in 
the average daily census in non-institutional long-term care programs 
in 2013, resulting in a total average daily census of approximately 
120,100.

                            MEDICAL RESEARCH

    Medical research is being supported with $583 million in direct 
appropriations in 2013, an increase of nearly $2 million above the 2012 
level. In addition, approximately $1.3 billion in funding support for 
medical research will be received from VA's medical care program and 
through Federal and non-Federal grants. Projects funded in 2013 will 
support fundamentally new directions for VA research. Specifically, 
research efforts will be focused on supporting development of new 
models of care, improving social reintegration following traumatic 
brain injury, reducing suicide, evaluating the effectiveness of 
complementary and alternative medicine, developing blood tests to 
assist in the diagnosis of post-traumatic stress disorder and mild 
traumatic brain injury, and advancing genomic medicine.
    The 2013 budget continues support for the Million Veteran Program 
(MVP), an unprecedented research program that advances the promises of 
genomic science. The MVP will establish a database, used only by 
authorized researchers in a secure manner, to conduct health and 
wellness studies to determine which genetic variations are associated 
with particular health issues. The pilot phase of MVP was launched in 
2011. Surveys were sent to 17,483 veterans and approximately 20 percent 
of those then completed a study visit and provided a small blood 
sample. By the end of 2013, the goal is to enroll at least 150,000 
participants in the program. Like with so much of VA research, the 
impact will be felt not just through improved care for veterans but for 
all Americans, as well.

                    VETERANS BENEFITS ADMINISTRATION

    The 2013 budget request for the general operating expenses of the 
Veterans Benefits Administration (VBA) is $2.2 billion, an increase of 
$145 million, or 7.2 percent, over the 2012 enacted level. With the 
support of Congress, we have made great strides in implementing our 
comprehensive plan to transform the disability claims process. This 
budget sustains our investments in people, processes, and technology in 
order to eliminate the claims backlog by 2015. In addition, this budget 
request includes funding to support the administration of other VBA 
business lines.

Post-9/11 and Other Education Programs
    The Post-9/11 GI Bill program provides every returning 
servicemember with the opportunity to obtain a college education. As 
expected, the Post-9/11 GI Bill program has become the most used 
education benefit that VA offers. Just as with the original GI Bill, 
today's program provides veterans with tools that will help them 
contribute to an economically vibrant and strong America. In 2013, VA 
estimates that 606,300 individuals will participate in this benefit 
program. The timeliness and accuracy of processing Post-9/11 GI Bill 
claims continues to improve. From 2010 to 2011, VA processing times for 
original and supplemental claims improved by 15 days (from 39 to 24 
days) and 4 days (from 16 to 12 days), respectively. Over the last 2 
years, VA has successfully deployed a new IT system to support 
processing of Post-9/11 GI Bill education claims. With improved 
automation tools in place, VA will be able to begin reducing education 
benefit processing staff in 2013.

Vocational Rehabilitation and Employment
    The Vocational Rehabilitation and Employment (VR&E) program is 
designed to assist disabled servicemembers in their transition to 
civilian life and obtaining employment. The budget request for 2013 is 
$233.4 million or a 14.2-percent increase from 2012. The number of 
participants in the program increased to 107,925 in 2011 and is 
expected to grow to over 130,000 by 2013.
    VA is also expanding VR&E counseling services available at IDES 
sites to assist servicemembers with disabilities in jumpstarting their 
transition to civilian employment. In 2012, VA will assign 110 
additional counselors to the largest IDES sites, serving an additional 
12,000 wounded, ill, and injured servicemembers. Funds requested in 
2013 will support further expansion, adding 90 more counselors to the 
program.
    In 2009, VA established a pilot program called VetSuccess on Campus 
to provide outreach and supportive services to veterans during their 
transition from the military to college, ensuring that their health, 
education, and benefit needs are met. By the end of 2012, the program 
will be operational on 28 campuses. The 2013 budget includes $8.8 
million to expand the program to a total of 80 campuses serving 
approximately 80,000 veterans.

                    NATIONAL CEMETERY ADMINISTRATION

    VA honors our fallen soldiers with final resting places that serve 
as lasting tributes to commemorate their service and sacrifice to our 
Nation. The 2013 budget includes $258 million in operations and 
maintenance funding for the National Cemetery Administration (NCA). In 
2013, NCA estimates that interments will increase by 1,500 (1.3 
percent) over 2012. Cemetery maintenance workload will also continue to 
increase in 2013 over the 2012 levels: The number of gravesites 
maintained will increase by 82,000 (2.5 percent) and the number of 
developed acres maintained will increase by 138 (1.6 percent).
    The 2013 budget will allow VA to provide more than 89.6 percent of 
the Veteran population, or 19.1 million veterans, a burial option 
within 75 miles of their residence by keeping existing national 
cemeteries open, establishing new State veterans cemeteries, as well as 
increasing access points in both urban and rural areas. VA's first 
grant to establish a veterans cemetery on tribal trust land, as 
authorized in Public Law 109-461, was approved on August 15, 2011. This 
cemetery will provide a burial option to approximately 4,036 unserved 
Rosebud Sioux Tribe veterans and their families residing on the Rosebud 
Indian Reservation near Mission, South Dakota.
    NCA provides an unprecedented level of customer service, which has 
been achieved by always striving for new ways to meet the burial needs 
of veterans. In 2011, NCA initiated an independent study of emerging 
burial practices including ``green'' burial techniques that may be 
appropriate and feasible for planning purposes. The study will also 
include a survey of veterans to ascertain their preferences and 
expectations for new burial options. The completed study will provide 
comprehensive information and analysis for leadership consideration of 
new burial options.

                         CAPITAL INFRASTRUCTURE

    A total of $1.14 billion is requested in 2013 for VA's major and 
minor construction programs, an increase of 6.3 percent over the 2012 
enacted level. VA is also proposing legislation in 2013 that would 
enhance the ability of the Department to collaborate with other Federal 
Departments and Agencies, including the Department of Defense (DOD) on 
joint capital projects. This legislative proposal would allow 
appropriated funds to be transferred among Federal agencies to 
effectively plan and design joint projects when determined to be cost-
effective and improve service delivery to veterans and servicemembers.
Major Construction
    The major construction request in 2013 is $532 million in new 
budget authority. The major construction request includes funding for 
the next phase of construction for four medical facility projects in 
Seattle, Washington; Dallas, Texas; Palo Alto, California; and St. 
Louis (Jefferson Barracks), Missouri. Additionally, funds are provided 
to remove asbestos from Department-owned buildings, improve facility 
security, remediate hazardous waste, fund land acquisitions for 
national cemeteries, and support other construction related activities.

Minor Construction
    In 2013, the minor construction request is $608 million. It would 
provide for constructing, altering, extending, and improving VA 
facilities, including planning, assessment of needs, architectural and 
engineering services, and site acquisition and disposition. It also 
includes $58 million to NCA for land acquisition, gravesite expansions, 
and columbaria projects. NCA projects include irrigation and drainage 
improvements, renovation and repair of buildings, and roadway repairs.

                         INFORMATION TECHNOLOGY

    The 2013 budget requests $3.327 billion for information technology 
(IT), an increase of $216 million over the 2012 enacted level of $3.111 
billion. Veterans and their families are highly dependent upon the 
effective and efficient use of IT to deliver benefits and services. In 
this day and age, every doctor, nurse, dentist, claims processor, 
cemetery interment scheduler, and administrative employee in the VA 
cannot do his or her jobs without adequate IT support. Approximately 80 
percent of the IT budget supports the direct delivery of healthcare and 
benefits to veterans and their families.
    We have made dramatic changes in the way IT projects are planned 
and managed at the VA. As described earlier in this testimony, the 
Project Management Accountability System (PMAS) has reduced risks by 
instituting effective monitoring and oversight capabilities and by 
establishing clear lines of accountability. Additionally, we have 
strengthened security standards in software development and established 
an Identity Access Management program that allows VA to increase online 
services for veterans.
    The IT infrastructure supports over 300,000 employees and about 10 
million veterans and family members who use VA programs, making it one 
of the largest consolidated IT organizations in the world. This budget 
request includes nearly $1.8 billion for the operation and maintenance 
of the IT infrastructure, the backbone of VA. A sound and reliable 
infrastructure is critical to support the VA workforce and all of our 
facilities nationwide in the effective and efficient delivery of 
healthcare and benefits to veterans. It is also critical that we 
support new facility activations, our major transformational 
initiatives, and the increased usage of VA services while maintaining a 
secure IT environment to protect veteran sensitive information.
    Improving services for veterans and their beneficiaries requires 
using advanced technologies. For example, VA will continue to utilize 
MyHealtheVet to improve access to information on appointments, lab 
tests and results, and reduce adverse reactions to medications. The 
2013 budget continues an investment strategy of funding the development 
of new technologies that will have the greatest benefit for veterans.
    The delivery of high-quality medical care to an increasing number 
of veterans is highly dependent upon adequate IT funding. VA's health 
IT investments have, and will continue, to greatly improve the delivery 
of medical care with regards to quality, patient safety and cost 
effectiveness. This includes transformation of mental health service 
delivery through IT-enabled self-help, providing data and IT analytical 
tools for VA's research community, and creating an open exchange for 
collaboration and innovation in the development of clinical software 
solutions. Additionally, initiatives focused on ``care at a distance'' 
are heavily reliant on technology and require a robust IT 
infrastructure.
    The 2013 budget request for integrated Electronic Health Record 
(iEHR) is $169 million. The iEHR is a joint initiative with DOD to 
modernize and integrate electronic health records for all veterans to a 
single common platform. We must take full advantage of this historic 
opportunity to deliver maximum value through joint investments in 
health IT. When DOD and VA healthcare providers begin accessing a 
common set of health records, iEHR will enhance quality, safety, and 
accessibility of healthcare--setting the stage for more efficient, 
cost-effective healthcare systems. In 2013, we plan to leverage open 
source development to foster innovation and speed delivery for a 
pharmacy and immunization solution.
    An integral part of iEHR is the Virtual Lifetime Electronic Record 
(VLER), which is enabling VA transformation. VLER creates information 
interoperability between DOD, VA, and the private sector to promote 
better, faster, and safer healthcare and benefits delivery for 
veterans. The 2013 budget will ensure continued delivery of enhanced 
clinical and benefits information connections and build increased 
capability to support women's healthcare. Additionally, we will develop 
a modern memorial affairs system for the dynamic mapping of gravesite 
locations. The 2013 budget request for VLER is $52.9 million.
    In addition, the 2013 budget requests $92 million in the IT 
appropriation for VBMS. As noted earlier, the VBMS initiative is the 
cornerstone of VA's claims transformation strategy. It is a 
comprehensive solution that integrates a business transformation 
strategy to address people and processes with a paperless claims 
processing system. Achieving paperless claims processing will result in 
higher quality, greater consistency, and faster claims decisions. 
Nationwide deployment of VBMS is on target to begin in 2012 with 
completion in 2013.
    This budget also includes funding to transform the delivery of 
veterans' benefits. The 2013 IT budget requests $111 million for the 
Veterans Relationship Management (VRM) initiative. We will use this 
funding to improve communications between veterans and VA that occur 
through multiple channels--phone, Web, mail, social media, and mobile 
apps. It will also provide new tools and processes that increase the 
speed, accuracy, and efficiency of information exchange, including the 
development of self-service technology-enabled interactions to provide 
access to information and the ability to execute transactions at the 
place and time convenient to the veteran. In 2013, veterans will see 
enhanced self-service tools for the Civilian Health and Medical Program 
of the Department of Veterans Affairs (CHAMPVA) and VetSuccess 
programs, as well as the veterans online application for enrolling in 
VA healthcare.

                          LEGISLATIVE PROGRAM

    VA has outlined in this budget a strong legislative program that 
will advance our mission to end veteran homelessness and help wounded 
warriors by improving our system of grants for home alterations so 
veterans can better manage disabilities and live independently. Our 
legislative proposals would also make numerous other common-sense 
changes that improve our programs, including provisions that will 
reduce payment complexities for both our student veterans and the 
schools using the Post-9/11 GI Bill.

                                SUMMARY

    VA is the second largest Federal department with over 316,000 
employees. Our workforce includes physicians, nurses, counselors, 
claims processors, cemetery groundskeepers, statisticians, engineers, 
IT specialists, police, and educators. They serve veterans at our 
hospitals, community-based outpatient clinics, vet centers, mobile vet 
centers, claims processing centers, and cemeteries. Through the 
resources provided in the President's 2013 budget, VA is enabled to 
continue improving the quality of life for our Nation's veterans and 
their families and to completing the transformation of the Department 
that we began in 2009. Thanks to the President's leadership and the 
solid support of all members of the Congress, we have made huge strides 
in our journey to provide all generations of veterans the best possible 
care and benefits that they earned through selfless service to the 
Nation. We are committed to continue that journey, even as the numbers 
of veterans will increase significantly in the coming years, through 
the responsible use of the resources provided in the 2013 budget and 
2014 advance appropriations requests.

    Senator Nelson. Before I start on my questions, I want to 
recognize the chairman of the full committee first for any 
statement or questions he might have.
    Senator Inouye.

                              CONSTRUCTION

    Senator Inouye. Thank you very much, Mr. Chairman.
    Mr. Secretary, my first question relates to the 
Department's construction budget. Would you please explain the 
construction account's various parts and why the Department 
chose to fund it in this manner?
    Secretary Shinseki. Certainly, Mr. Chairman. This budget 
that we provide strikes the right balance between our capital 
requirements in construction and our operating needs. And 
overall, this balance between major, minor construction, and 
nonrecurring maintenance programs, and even leasing programs 
are part of the equation. But for the purposes of this budget 
line, major, minor, and nonrecurring maintenance programs, 
overall, remain stable.
    This year, in 2013, we've placed emphasis on minor 
construction, which we've increased by 26 percent. But on major 
construction, the emphasis is on completing prior appropriated 
projects by the Congress for which we have been provided 
authority. And those projects provide for healthcare, memorial, 
and benefits delivery services.
    The reason we are stressing minor construction dollars in 
2013 is it's particularly helpful for us at this time to have 
money that touches more veterans; impacts a wider range of VA 
medical centers; corrects more seismic, safety, and security 
issues in less time; very agile; and with money that we can get 
out there and hospital directors can employ. So we've placed 
our emphasis on minor construction.
    Major construction, as I said is the Department being 
fiscally responsible, and focusing on completing ongoing 
projects that you've already authorized. And we need to do that 
by addressing about $6 billion in ongoing, partially funded 
projects.
    For nonrecurring maintenance, our request will fund the 
design of about 181 new nonrecurring maintenance projects that 
ultimately result in an estimated $780 million in construction. 
For 2012 and 2013, our focus for nonrecurring maintenance has 
been on safety, security, and equally importantly, correcting 
the seismic issues that have been out there for some time.
    Since 2008, VA has obligated about $7.2 billion in 
nonrecurring maintenance projects to address these priorities. 
And I think you can see where our great activity has been in 
nonrecurring maintenance and now in minor. Major construction--
we continue to execute the plan you've authorized.

                     INFORMATION TECHNOLOGY BUDGET

    Senator Inouye. Mr. Secretary, are you planning to use part 
of the IT budget resources on the iEHR? In addition, could you 
please let us know what its status is and what portion of the 
IT budget will go towards the iEHR?
    Secretary Shinseki. Mr. Chairman, I'm happy to provide that 
update. I'm going to call, at a point, on Secretary Baker to 
provide the details of the program. I would just say that this 
is one of those projects that I have worked for 3 years now, 
first with Secretary Gates and now with Secretary Panetta.
    There is agreement between the Secretaries that a single, 
joint, common electronic health record, a platform that is open 
in architecture and nonproprietary in design, is what both 
Departments are going to develop together. We have that 
agreement. It's taken a bit of work, and now we're in the 
process of building that.
    Let me turn to Secretary Baker to provide the details of 
where we are.
    Mr. Baker. Thank you, Secretary Shinseki.
    Senator, to give you a succinct answer, about $169 million 
of the 2013 budget will go directly to the iEHR and building 
that. For 2012, we have currently 23 ongoing projects in the 
iEHR, much of which is to take the budget that we have spent in 
the past on medical and move it towards the single joint record 
with DOD. We have staffed the office, we have hired the 
director, and we're moving out on those 23 projects. So I think 
we're making good progress.
    The key thing here is the Secretaries' attention. Both 
Departments understand that the answer is yes to the joint 
electronic health record system at this point, and we're just 
defining how yes becomes reality.
    Secretary Shinseki. Mr. Chairman, if I might just close out 
on that point, in the past, this subcommittee has been 
particularly supportive on our IT priorities. And I thank you 
for that support, and I seek your support again on this issue.
    As I say, the electronic health record, all by itself, is 
important because it provides the seamlessness that we've been 
after so that a youngster serving in uniform coming to the VA 
doesn't go through this records drill, and that we have, in 
effect, all that we need. It will create this seamlessness that 
serves us in many other ways so that we get on with the 
business of also dealing with the disability claims, making 
that a more efficient process because we have the information 
we need. So the IT here is crucial to at least these two 
administrations, and the leadership here is provided by 
Secretary Baker.

                          VA/DOD COLLABORATION

    Senator Inouye. A final question, Mr. Secretary. You 
somehow alluded to this. I know you have been working with the 
Secretary of Defense on creating a seamless transition between 
DOD and VA. Would you please elaborate on the progress being 
made on the collaborative effort?
    Secretary Shinseki. Mr. Chairman, this is one of those 
areas in which in the past 3 years, both Secretaries have 
devoted considerable thought and energy to, and that is 
developing a relationship between the two Departments that 
acknowledges the obvious. Very little of what we do in VA 
originates in VA. Much of what we end up working on originates 
in DOD, and so this relationship at the secretarial level 
permeates down through our organizations, all the levels, where 
collaborative work goes on to work on important issues like the 
iEHR, but also creating the conditions that our paperless 
processing of disability claims has facilitated.
    Beyond that, we are looking at how we can better transition 
and assist with the transition of servicemembers leaving the 
military as they prepare for the next phase of their lives. 
Transition Assistance Program--we have met jointly in task 
forces to put together what we think is a good program for 
ensuring that when the uniform comes off, every servicemember 
is on a vector that will take them to success in the next phase 
of their lives. All of that planning and detail work is 
underway, and at some point we look forward to the opportunity 
to share the details of the plan with the subcommittee.
    Senator Inouye. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Johnson. Thank you.

                          MEDICAL CARE BUDGET

    Mr. Secretary, I understand you have updated your fiscal 
year 2013 budget estimate for medical care and found $2 billion 
in savings which you have redirected to other initiatives and 
priorities. Given the tight fiscal environment, why are you 
asking this subcommittee for an additional $165 million over 
what the Congress provided to the VA in the 2013 advance 
appropriations?
    Secretary Shinseki. Mr. Chairman, thanks for that question. 
As we go through the budgeting process, because we are a 2-year 
cycle, we look out as far as we can, and the initial budget 
estimate is what it is. Then as we get closer to the submission 
of a budget, those numbers adjust and refine. Sometimes there 
are changes to it, and they're usually minor increases or 
reductions.
    So each year we run our actuarial projections for the 
budget estimate, and the advance appropriation request attempts 
to incorporate the most recent data. In the case of our last 
run last spring, the model did show an adjustment, a downward 
reduction of about $2 billion. Those monies were reinvested in 
programs that were funded, but more funding would have been 
helpful in strengthening the programs. And these programs, I 
would point out, were things like caregivers, improved mental 
health, expanded access for veterans, homelessness, and 
activations of our medical facilities.
    Following these reinvestments, Mr. Chairman, we found that 
we still required another $165 million to meet healthcare 
requirements of our veterans in 2013, and that's the reason 
that request is in the budget. We believe that we should apply 
the $165 million to meet the intent of the Caregivers Act, also 
to open new facilities on time, and then to fully fund our 
efforts to end veteran homelessness.

                         COST-BENEFIT ANALYSIS

    Senator Johnson. Secretary Shinseki, as you know from our 
correspondence and conversations with you, I have concerns 
about the proposal that the VA announced in December for the 
Black Hills Healthcare System. In response to the South Dakota 
delegation's January 4 letter, you said that the VA is 
currently conducting a cost comparison between new construction 
and a full renovation of the existing domiciliary building.
    This information is essential, and I found it odd that the 
cost-benefit analysis wasn't completed as the Black Hills 
proposal was formed. When does the VA anticipate completing 
this analysis, and how will the results shape the proposal?
    Secretary Shinseki. I'm going to ask Dr. Petzel to provide 
an update here.
    Dr. Petzel. Thank you, Mr. Secretary.
    Senator Johnson, I can't explain why the estimate was not 
included originally. But we are in the process now of doing a 
cost-benefit analysis and a comparison of those two 
alternatives. We will not proceed with the proposal until 
that's finished and until we've had our interactions with the 
subcommittee and with you over what that shows.
    Senator Johnson. I'm grateful that you agreed to extend the 
comment period for the stakeholders to offer feedback and 
counter proposals. I see the VA Committee has been formed in 
Hot Springs, and the community is diligently working on forming 
a counter proposal to offer to the VA. Can you provide 
assurances that this proposal will receive all due 
consideration?
    Secretary Shinseki. Certainly, Mr. Chairman. I can give you 
that assurance. This proposal was intended to begin a dialog on 
the future of how we provide safe, high-quality, accessible 
healthcare to veterans in this rural part of the country. We've 
conducted 14 community briefings now. We are willing to 
continue having those discussions, and that's part of the 
reason that we've extended the comment period to the end of 
April. I can assure you we'll take a very good look at the 
proposal and a dialog continues.

                   VA/IHS MEMORANDUM OF UNDERSTANDING

    Senator Johnson. Mr. Secretary, on March 5, 2012, the VA 
and the Indian Health Service (IHS) sent a letter to tribal 
leaders informing them of a draft agreement that outlines how 
VA will reimburse IHS and the tribes for care they provide to 
American Indian and Alaska Native vets who are eligible for VA 
healthcare. Better collaboration between the VA and IHS is 
essential to ensuring that vets that live on reservations or in 
tribal villages do not fall through the cracks and receive the 
benefits to which they are entitled.
    Can you please describe what this draft agreement 
encompasses, how the VA plans to make sure that the tribes have 
been consulted, and when a reimbursement agreement will be 
finalized?
    Secretary Shinseki. Mr. Chairman, I'm going to call on Dr. 
Petzel to answer the specifics here. But in general, let me 
just say that ensuring that our Native American and Alaska 
Native veterans have access to high-quality and safe healthcare 
the way any veteran living elsewhere would have has been a 
particular interest of mine. It is part of the reason that I 
visited Alaska and visited South Dakota, been to Montana, and 
been to Guam to get a sense of the rural aspects of what we 
face. This dialog that you're referring to is part of the 
effort to get clarity on how we can work together to achieve 
what for both of us ought to be joint objectives.
    Dr. Petzel.
    Dr. Petzel. Thank you, Mr. Secretary.
    The agreement to date has made very good progress. First of 
all, we've agreed on what sort of services are going to be 
provided, at least initially, and that's direct care, that are 
associated with the benefits that one might get if they were 
getting their care at the VA.
    The second thing is we've agreed on the eligibility 
criteria, that is, all veterans who are enrolled with the VA 
healthcare system would be eligible to receive care in an IHS 
or tribal facility.
    Third, we've decided upon how we're going to deal with 
pharmaceuticals and medications. We're going to use the VA's 
mail-out pharmacy program, which is a very efficient way of 
providing medication. And, in fact, we're looking at the IHS 
adopting our mail-out pharmacy program for all of its patients 
and all of its clients.
    And then finally, we've come to an agreement about payment 
methodologies, how the reimbursement is actually going to 
occur. There are still some issues that we need to work our way 
through. But in the meantime, we are going to begin the 
demonstration projects to prove, if you will, these concepts 
that we've described, and they will be both with IHS facilities 
and with tribal facilities across the country. In fact, it's a 
likely possibility that this will be in Alaska and this will be 
in South Dakota where we've already begun some negotiations 
with the tribes.
    Senator Johnson. Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    I'm pleased to hear that we are making a little bit of 
progress on these memorandums of agreement. You mentioned the 
demonstration, and I understand that there is an individual 
memorandum of agreement with the tribal facilities there in 
Ketchikan with the Ketchikan Indian community. As the first one 
in the State, we would certainly encourage the Department to 
work to facilitate other such agreements. I think that they 
will be important, and I appreciate that.
    Mr. Secretary, thank you for your leadership and that of 
your team. We greatly appreciate it.
    I will tell you, Mr. Chairman, I've had the opportunity to 
be on many committees where we have interaction with our 
Secretary of the VA.
    And Mr. Secretary, I am just particularly pleased with the 
very personal attention and initiative that you have placed on 
some of the issues that face our veterans in Alaska. You have 
given me your commitment to work on the Closer to Home 
Initiative, and we have seen some real progress in that.
    You've given me your commitment to work on our backlog, and 
we have seen some forward progress. You've given me your 
commitment to work to better integrate what happens within the 
VA with IHS, and I understand how difficult that has been. But 
in that area, too, we are making some incremental progress. So 
I appreciate the good work that you have done for Alaska's 
veterans, and I look forward to continuing to work with you.
    On the issue of the Care Closer to Home, I had asked that 
there be a report to the subcommittee, to Congress, in 
implementing this initiative. And we have seen a 38-percent 
reduction in the number of veterans who are tasked to travel 
outside of the State for care. It's gone down from 545 in 2010 
to 336 in 2011. That's good progress, we think.
    But as we had an opportunity to discuss, there are still 
many who are sent outside, whether it's to Seattle or to other 
VA facilities, when there is care and specialists that are 
available within the State of Alaska. Orthopedics is one area. 
It represented more than 10 percent of the referrals outside, 
even though there's clearly many specialists available in the 
State. Cardiology is also another area where nearly 10 percent 
of the referrals went outside and where we have good quality 
care in the State.
    Can you speak to where you see the trends going in terms of 
numbers of referrals outside and the VA's goal for further 
reducing these referrals in the outlying years?

                               REFERRALS

    Secretary Shinseki. Senator, I would just say that we have 
overall intent here, and that is to deliver high-quality, safe 
care as close to home as possible. And where we see all those 
factors being met, that is what we set out to do. We wanted to 
get a first start and sort of feel our way into what were the 
possibilities here, and I think we have demonstrated that. My 
numbers say we've reduced it by about 43 percent, so we've 
gotten good momentum.
    I'll just assure you we'll continue to look at this. We 
know what the intent here is, and where all those 
considerations are balanced, we'll decide in favor of the 
veteran being closer to home. And I'll call on Dr. Petzel if 
he's got any more specifics.
    Dr. Petzel. Thank you, Mr. Secretary.
    Just to elaborate a little bit, there are three or four 
entities that could provide the care that you're describing, 
Senator. The IHS has some absolutely phenomenally good 
facilities surrounding Anchorage and Fairbanks. Particularly, 
we're hoping that this memorandum of understanding that we have 
will not only provide for care for veterans in IHS facilities 
in a general sense, but we also want to set up separate sharing 
agreements so we can get the specialty care for veterans that 
are non-Native in those facilities. That's one.
    Two is that there are excellent private facilities. We've 
had some difficulty in coming to agreements with the private 
facilities, but we are continuing to pursue that.
    And then finally, there's the Air Force. There are 
opportunities for us to share with the Air Force that we need 
to capitalize. And from the DOD, Dr. Jonathan Woodson and I are 
going to be traveling to Alaska, probably in May, to 
specifically explore what we can be doing with the Air Force.
    I want to just reiterate what the Secretary said. We do not 
want to be sending people down to Seattle, which is a 3- to 5-
hour ride in a plane, for care that can be delivered at a good 
price in the community. That is our goal.
    Senator Murkowski. I appreciate that. I think it's 
important that we be looking to the various alternatives that 
do exist, as you point out, the military, on the private side, 
and the very credible IHS facilities that we have out there.
    I think it is important to recognize, though, that when we 
talk about flying outside, that is a 3-hour flight, 3 hours and 
15 minutes, from Anchorage. But for many of our veterans who 
live in the rural outlying areas, it's also a 3-hour flight. It 
might be a full day trip to get from a small village to a hub 
village to Anchorage. So it's not just closer to home in the 
sense that we're not going to send outside the State, but I've 
also asked for an assessment as to how we can deliver that care 
closest to home.
    And so when we have the opportunities with these sharing 
arrangements with the IHS facilities, with the clinics that are 
in the village, to provide for a level of care, this is where 
this becomes so important, because whether it's 3\1/2\ hours to 
Seattle, or whether it's 3\1/2\ hours from Aleknagik to 
Anchorage, it still requires the veteran to leave their home. 
It still requires them to be in a big city with no family, with 
high expenses for transportation and lodging while they're 
there.
    So, again, we start the conversation by talking about the 
memorandums of agreement that are out there with IHS. And 
again, I think that this is one area where we can focus on, 
where we can truly make a difference in ensuring that good 
quality care that is affordable and reasonable is provided to 
our veterans near home.
    Thank you, Mr. Chairman.
    Senator Johnson. Senator Nelson.

                           OMAHA VA HOSPITAL

    Senator Nelson. Thank you, Mr. Chairman.
    Thank you, Secretary Shinseki and the members of your VA 
support system. The commitment that was made back in fiscal 
year 2011 in that budget, the request for the Omaha VA 
Hospital, has been and continues to be very good news for the 
thousands of veterans in Nebraska and western Iowa. The $56 
million enacted in fiscal year 2011 addressed the needs of the 
Omaha VA Hospital by providing plan and design money for what 
will be a much needed 21st century healthcare facility.
    And I understand that the plan and design of this facility 
is about 40 percent complete and is still on track to conclude 
this fall with construction to begin in fiscal year 2014. I 
think it's true--and I've often said it--that we need to be as 
good at taking care of our veterans as we are at creating them. 
And your commitment to improving the Omaha VA Hospital is just 
another example that caring for America's veterans remains one 
of the Nation's highest priorities and one of your personal 
priorities as well, and we all appreciate that very much.
    Can you speak to why the new Omaha VA Hospital facility 
continues to be a priority for the Department and why it's 
imperative as improving the care for our veterans? And I know 
Dr. Petzel has had a great deal of involvement in this as well 
and would welcome his comments as well.
    Secretary Shinseki.
    Secretary Shinseki. Let me call on Dr. Petzel to provide 
the details here, and then I'll close out.
    Senator Nelson. OK.
    Dr. Petzel. Thank you, Mr. Secretary.
    Senator Nelson, I was involved in the beginning when I was 
a network director, as you know, in that area in the initial 
planning of and decisions about building that hospital. 
Presently, we're in the second of three design phases. The 
schematic designs have been completed. We're doing what is 
called design development right now with the $56 million that 
was there for advance planning.
    And now that that has been finished, i.e., the design 
development, we're going to begin the process of developing the 
construction documents. They would be finished sometime in 
2013, which would mean that the earliest that funding for 
construction might occur would be in 2014. And of course, 
that's going to depend on what the 2014 budget looks like. But 
again, just to reiterate what the Secretary has said and what 
you have said, this is a priority for us and for the Omaha 
veterans.
    Senator Nelson. Thank you.
    Secretary Shinseki. Senator, I would just say you are 
familiar with what we are going to do, in essence, to replace 
much of the campus. What is useful there is going to be 
retained. But I know from my staff, who have visited, that 
heating, air conditioning, and electrical work are all very old 
and needed to be replaced for safety issues, if nothing else. 
It is a major project that we're committed to in terms of 
assuring that veterans in Nebraska and in the region have high-
quality, safe access to healthcare.

                           VETERAN CEMETERIES

    Senator Nelson. And Congress needs to be a partner in this 
in making certain that the funding is available. That's why I 
say we need to be as good at caring for our veterans as we are 
at creating them. And so I hope that that will continue to be 
on track.
    Secretary Shinseki, one of the most difficult things to 
talk about is the end of life issues and finding a resting 
place for our veterans when that time comes. One year ago, you 
gave us the status of the Sarpy County National Cemetery, and 
you mentioned there were two sites at the top of your list that 
were being reviewed and that you had funding to purchase, 
design, and conduct the required studies.
    Can you comment on the current status of the Sarpy County, 
Mr. Secretary? For example, has the site been selected? Is 
there something you can tell us about that yet, or does it 
remain a bit of a non-disclosed fact?
    Secretary Shinseki. Now, let me call on Secretary Muro to 
provide an update here.
    Mr. Muro. Thank you, Mr. Secretary.
    Thank you for that question, Senator Nelson. Unfortunately, 
I can't give you the name of the location, but we are down to 
one site. We should have by the end of this month the deed and 
the sale confirmed, and we'll move forward to do the deed, or 
the transfer of the deed. We've already agreed on the price. 
Once we have the sale price set, then we'll come to the 
Secretary and sign off on it. Then we'll be able to advertise 
which site it is. It's a beautiful site. I've been on it. It 
will serve our veterans there for many years.

                          SEAMLESS INTEGRATION

    Senator Nelson. I appreciate the work that you've all done 
to get this accomplished. I know it's a site selection process 
and that there are details that, obviously, had to be worked 
out, and confidentiality was important. But I know my veterans 
back home are very interested, because they ask me when they 
come in to see me, ``Where is it going to be?'' And it's been a 
little awkward to say, ``Well, I know it is. I just don't know 
where it is.'' So it'll be nice to have that fully disclosed. I 
appreciate very much what you've been doing.
    We've had quite a bit of discussion this morning already on 
how to have seamless integration from Active Duty, Guard, and 
Reserve, into the VA system, and much work has already been 
accomplished. I know much remains to be done.
    Do we have some idea of a timeline? We don't want this to 
be the never-ending story, and I know you don't, either. But 
sometimes if we have some focus on when there might be an 
ending point to where you see integration at least beginning--
and then is there a midpoint where there would be improvement? 
And then is there any idea of, time-wise, finality to where we 
can say we have an integrating system?
    Secretary Shinseki. Secretary Baker.
    Mr. Baker. Thank you, Senator.
    At their last meeting, the two Secretaries agreed that 
within 2 years, we would install the initial version of the 
iEHR in two facilities shared between DOD and VA. That's a 
challenge that we welcome. It means that we'll be moving out in 
certain aspects of that. We have projected the whole project to 
take between 4 and 6 years. It is a large-scale system.
    Senator Nelson. I know it is.
    Mr. Baker. Today, we serve about 15 million servicemembers 
and veterans between the two Departments, and we're talking 
about changing the underlying IT system there. On the topic of 
completely done, I would just observe that we have continually 
updated the Veterans Health Information Systems and Technology 
Architecture system known as VistA, since its introduction in 
the 1980s. So these systems, to stay up with modern healthcare 
and to ensure that we are running the best IT system at every 
hospital, require continued evolution.
    The thing we're doing different this time from the past is 
we have strong involvement of the private sector. So we'll be 
continually looking at what the best private sector approach is 
to providing these types of systems and these types of packages 
and incorporating that as well.
    Senator Nelson. I was going to suggest that. I'm glad you 
are, because, obviously, when it comes to processing claims, 
there are private sector examples that are investing 
considerable amounts of money on new technology and improving 
techniques for claim processing, which would be good to get the 
benefit of their experience without having to pay for the costs 
of achieving it yourself.
    Mr. Baker. Senator, two things to assure you of there are 
as we build our claims processing system, we're involving 
what's called commercial-off-the-shelf (COTS) software, or a 
private sector piece. They're the fundamentals of it. Because 
what we do at VBA is different from DOD there are unique parts 
of the process; for each there is what you'd call custom code 
or customization that goes into that. So it is a large-scale 
project unto itself.
    We've also gone out, Secretary Hickey and I, and looked at 
other systems to make certain we're getting any lessons learned 
we can from other insurance organizations and folks that do 
business with the VA right now. They're doing the same sort of 
things and we want to make certain that we're not going off and 
recreating the wheel, if you will, but learning as much as we 
can from what the private sector has already done in this area.
    Senator Nelson. I certainly appreciate and applaud the work 
that you're doing. When we passed the Wounded Warriors Act a 
few years ago, one of the most important points of it was to 
make certain we were achieving something seamless so that 
people don't have to start from the very beginning at the end 
of their uniformed days. And so I appreciate what you are 
already accomplishing and encourage you to continue to stay the 
course. And if you can meet those deadlines, maybe you can 
maybe even advance them with a little bit of help.
    So, thank you, Mr. Chairman.
    Senator Johnson. Senator Reed.

                     INFORMATION TECHNOLOGY BUDGET

    Senator Reed. Thank you very much, Mr. Chairman.
    Secretary Shinseki and your colleagues, thank you for your 
great service to veterans. General Shinseki, thank you for your 
great service in the Army, and I think you qualify not only as 
a head of VA but a recipient of VA programs as a disabled 
veteran. So you've seen it from both sides of the equation.
    You have made in your budget submissions IT a central part. 
My colleagues have reflected the importance of it by the 
questions they've posed on IT. And let me just follow up--there 
are so many different ways that this affects the operation of 
the VA in terms of medical records. One other operation is the 
paperless disability claims processing. I thank you for 
starting a pilot program in the Providence regional office.
    The question, I think, is giving you an opportunity just to 
expand--what would be the impact in all these areas or the most 
important impact if we were not to fully fund your request for 
IT?
    Secretary Shinseki. Senator, thanks for that question. 
Three years ago, we began this journey on ending the backlog, 
and we've worked mighty hard at it. I'd just tell you that in 
that first year, we put 900,000 claims decisions out the door, 
but we got 1 million-plus claims in.
    The following year, we put 1 million claims decisions out 
the door, and we got 1.2 million in. Last year, another--second 
year in a row, 1 million claims decisions going out the door, 
and 1.3 million, I think, coming in, which tells you that the 
backlog is not static. We are constantly getting claims 
decisions out. The challenge is the number of claims that 
continue to override our ability to manually process.
    And so we're at the tipping point. We spent the last 2 
years developing this paperless tool that, in the hands of 
folks who have been manually putting out 1 million decisions a 
year, is going to give them what they don't have right now, and 
that's the ability to leverage both speed and quality in making 
more and better of these decisions. And this is that paperless 
tool called the Veterans Benefits Management System (VBMS).
    We increased the IT budget by 6.9 percent for 2013 in order 
to ensure that VBMS would be fully fielded. In that increase is 
also the electronic health record we've been talking about. And 
so I used the comment in my opening remarks, we're at a tipping 
point, where we need to just nudge this over and see the 
benefit of the last 2 years of hard work and investment on the 
part of folks that have been doing manual work at a tremendous 
rate and also building the electronic tool that they see as 
their opportunity to dominate the numbers here.
    And we're at that tipping point in 2013, and it would be 
very important for us not to miss that opportunity to deliver 
to veterans what they've been, at least, talking to this 
Secretary about for the last 3 years, and that's to get control 
over this claims backlog.
    Senator Reed. The issues of integrated health records have 
been raised, the issues of an integrated disability evaluation 
system, the IT connection. And I wonder if you or Dr. Petzel 
have any additional comments you feel would be necessary for 
the record in either of these.
    Dr. Petzel. Thank you very much, Senator.
    Thank you, Mr. Secretary. I just want to make a point about 
the importance of IT, in general, to the work that we do in 
health. Virtually nothing any longer that's done in healthcare 
can be done without good IT support. Whether it's improving the 
connectivity you have with your patients by using telehealth, 
text messaging, the telephone, telemedicine, or taking care of 
patients in the clinic setting or in the hospital, IT is 
absolutely essential.
    I use the phrase--and I get kidded about it by the 
Secretary now and again--that it's like the bloodstream in the 
human body. I mean, you can't function, obviously, without your 
bloodstream. We cannot do healthcare without adequate IT, and 
we are on the cutting edge, and we want to remain there. It's a 
very important perspective from our point of view.
    Just one other thing about the iEHR that's fundamentally 
important, particularly from our point of view. Everything that 
happens that we take care of virtually is a result of something 
that may have gone on during the service. And having those 
service records available, being able to view them instantly, 
et cetera, would be a wonderful step forward.

                       FUTURE VETERANS HEALTHCARE

    Senator Reed. Thank you very much, doctor.
    Secretary Shinseki. Senator, if I could just close----
    Senator Reed. Yes, sir.
    Secretary Shinseki [continuing]. I said we've worked IT 
very hard in the last 3 years, and we can usually talk about it 
in terms of these various projects. But I think there's another 
metric I would like to point out to you.
    When we arrived 3 years ago, I think we executed our IT 
budget in terms of deliverables on projects that we invested in 
at about 30 percent. OK, because I think the industry average 
is about 32 percent. But we weren't getting the return on 
investment that we needed to very quickly leverage IT.
    Today, with Secretary Baker's leadership here and imposing 
a program management accountability system on our IT programs, 
if you're off budget or you're behind schedule, you're going to 
have a discussion. And if you miss those more than once, you're 
likely not to continue your project.
    Today, we execute 89 percent of our IT projects. And so I 
am very confident that when we talk about VBMS or the paperless 
disability claims process and this electronic health record, we 
have a good bit of experience to leverage here on how we do 
this.
    Senator Reed. Thank you, Mr. Secretary.
    My time is rapidly expiring, so let me just pose a 
question, and I'll communicate it in writing, too. And that is 
one of the realities here is we have some remarkable young men 
and women who have been grievously injured in Iraq and 
Afghanistan. They are in their twenties, many of them. They 
will eventually and quite quickly get into the VA system, which 
means that we are probably looking at 50 years of support, 50 
years of commitment. And at this juncture in time, everyone is 
standing up shoulder to shoulder, and we're going to do this.
    What are you doing--again, I don't want to deprive Senator 
Coats of his time. But you could think about this, and then 
I'll ask for a written response. What is in your budget that is 
going to assure these young men and women that 50 years from 
now, 40 years from now, they and their families are going to 
get the same kind of, not only support, but respect that 
they're getting today, which they justifiably assume? It's a 
big question, and I don't want to take away from the 
Senator's----
    Secretary Shinseki. Mr. Chairman, may I give about a 10-
second response here?
    Senator Reed. Yes, sir.
    Secretary Shinseki. What I would say is, Senator, we are 
very much focused on that. And I would say that that was the 
President's charge to me when he asked me to take this job. 
One, make things better today for veterans, but transform the 
Department so that in the 21st century, down the road, veterans 
are going to continue to benefit from the programs, the 
processes, the disciplines you put in place today. And I'll 
provide a more complete written response.
    Senator Reed. And we'll get you a better question, and 
we'll ask for a complete response, and thank you.
    And thank you, Senator Coats.
    Senator Johnson. Senator Coats.

                      FORT WAYNE HEALTHCARE CENTER

    Senator Coats. Thank you, Mr. Chairman.
    Senator Reed, no problem there. That's a question for all 
of us to address and to ensure that we enable the Veterans 
Department to provide that kind of ongoing care that's going to 
be necessary.
    I say General Shinseki. I say that because I want to 
commend you for your time of service in uniform and the 
leadership that you provided. I thought it was exceptional, and 
I thank you for that. And I thank you for continuing now in a 
different uniform but still looking out for our soldiers and 
sailors and airmen and marines in the way that you have and the 
kind of leadership you're bringing to the VA. So thank you very 
much for that.
    I like to use these appropriations hearings to talk about 
the larger issues and the macro subjects. How do we continue to 
provide essential services from the Federal Government, given 
the budget constraints that we have? For me, national security 
and taking care of our veterans rises to a higher level than a 
lot of programs. And normally, I ask people, how can you do 
more with less? And of course, that applies to the VA also, 
but--bringing efficiencies.
    But it doesn't apply from the standpoint that it's on an 
equal par with a lot of other functions that perhaps could--in 
other departments that can be done better outside the Federal 
role. Clearly, this is a Federal role, and we owe our members 
of the service the very best that we can provide them. But 
having said that, the work that you're doing to bring the 
efficiencies and effectiveness to the organization and prepare 
for the future is important, and I commend you for doing all 
that.
    Now, if I could just turn to a parochial question for a 
minute--first of all, thank you for coming by my office to help 
discuss and work through this Fort Wayne situation with the 
veterans hospital there. This started way back in 2003. I 
haven't been in the Congress. I'm just sort of picking up the 
baton here from my predecessors.
    In 2009, the VA issued a letter, basically, and I quote, 
``VA proposes to deliver quality comprehensive inpatient care 
by partnering with the local community hospitals, healthcare 
systems in Fort Wayne and South Bend, Indiana, and to 
construct, `a new primary and specialty care facility,' a 
healthcare center that would double the size of the existing 
clinic, adding many services not currently available.''
    Now, as you know, the situation is much different than 
that. We're looking at a mental healthcare facility that will 
be a 27,000 square foot annex, as opposed to a 220,000 square 
foot center for extensive outpatient services. You and I have 
discussed this. I'm just wondering for the record if you could 
give some sense of what has changed and why the decision was 
made to so dramatically alter what the commitment was back in 
2009.
    Secretary Shinseki. Let me call on Dr. Petzel, and then 
I'll close out.
    Dr. Petzel. Thank you, Mr. Secretary.
    Senator Coats, you described it accurately in terms of what 
has happened. There was a proposal for a healthcare center, an 
HCC, that was reevaluated, and based upon that reevaluation, it 
was decided that the better alternative would be to renovate 
some of the space that was in the Fort Wayne campus, to use 
some of the facilities in the community, and to build a new 
27,000 square foot mental health facility. That was based upon 
the evaluation of the demographics, where people went for care, 
how many veterans there were in the area.
    Rest assured that we are committed in Fort Wayne, as well 
as across the country, to providing the care that veterans in 
that community needed and need. That will be done with a robust 
ambulatory care center. That will be done by using some of the 
facilities that exist now and buying those, again, in the 
community that we need to. But our commitment is to provide the 
same level if not a better level of care to the residents that 
use the Fort Wayne facility now.
    Secretary Shinseki. Senator, just to close out, I think 
we're planning on this summer going to solicitation, and then 
early in 2012, February timeframe, spring timeframe, to have a 
lease award with delivery of an outpatient clinic of 
significant capability in the 2014 timeframe.

                        HOMELESS HOUSING PROGRAM

    Senator Coats. I thank you for that, and I want you to know 
I'm more than willing to work with you to help achieve the 
goals. There are budget constraints that have caused decisions 
to be made elsewhere. But I think what we want to make sure is 
that we give those veterans every full measure of service that 
they need, and to the extent we can work together to do that, I 
want to continue to do so.
    And then just real quickly, in my remaining time, the 
homeless housing program that's underway there--could you just 
give me a little bit of update in terms of where the VA stands 
with that project? I've heard from several who have submitted 
bids, and they haven't heard back. I'm just curious as to where 
we are in that review process and what the time table might be 
for that.
    Secretary Shinseki. I believe the folks who are interested 
in the bidding process are looking for the SSVF program, 
Supportive Services to Veterans' Families, and that is in the 
process now. The bids are being received. We will probably go 
to a decision this summer and announce prior to the start of 
the next fiscal year where the grants were assigned.
    We have put about $100 million on the table for what I call 
our partners, about 600 of them throughout the various 
communities, who are doing the front line work of engaging the 
homeless, including homeless veterans, and finding shelter, 
bringing them to our attention as we work on this program. So 
the bids are being received, and then we'll go through a 
scoring process sometime before the end of the summer.
    Senator Coats. OK. Thank you. My time has expired.
    Thanks, Mr. Chairman.
    Senator Johnson. Senator Landrieu.

                           MEDICAL FACILITIES

    Senator Landrieu. Thank you, Mr. Chairman.
    And, General Shinseki, welcome, and I'm sorry I couldn't be 
here earlier. I had several prior commitments. But I've 
reviewed your testimony, and I want to first thank you for your 
extraordinary service. And I know this is a real heartfelt 
passion of yours, to help our veterans--after your 
distinguished service on many battlefields to come back and 
help our veterans, to help the United States keep our 
commitment to honor their service, and--to our veterans and to 
their families.
    So I really appreciate the hard work that you do, and I 
thank you, particularly, for your focus on the rebuilding of 
the New Orleans hospital that was significantly damaged beyond 
repair in Katrina and the flooding that ensued and your 
continued commitment to work with a variety of partners in New 
Orleans and in Louisiana to rebuild that medical complex. And I 
think things are coming along pretty well there, and I'd like a 
comment in a minute.
    But the real question I want to ask you--because this is 
not coming along very well, and I need your insight. In 
addition to the hospital in New Orleans that's under 
construction, you and your agency committed to build two 
clinics, one in Lafayette, Louisiana, and one in Lake Charles. 
And in fact, this subcommittee, under the leadership of this 
chairman, allocated the funding to do so. And we were all quite 
encouraged with the--Gracie Specks, who is our new leader--
regional leader in Alexandria.
    And just recently, Mr. Chairman, we received a letter that 
both of these clinics are going to now be delayed because of 
some errors that were made in the solicitation for bid.
    Could you please tell us how these errors were made, what 
your understanding is? And is there anything that you can do to 
get these two projects, which have the money, have been noted 
as a priority, back on track?
    Secretary Shinseki. Senator, you have my assurance that we 
are all hands on deck looking at both these projects. I'm as 
disappointed as you are with what happened here. On the one 
hand, we can take a big project like a new hospital in New 
Orleans and execute that with great precision, and then we just 
missed these two, Lake Charles and Lafayette. It got off to a 
bad contracting start and was discovered later, and now we are 
correcting that. But we are focused as I said, all of us 
focused, on this to get this as quickly executable as we can so 
that we keep our promise to the veterans in both of those 
parishes.
    Senator Landrieu. But so that I can answer the many 
questions that are coming in from constituents and, of course, 
organizations, the error was, in fact, on your side or on the 
veterans side. It wasn't on our side, was it?
    Secretary Shinseki. The error was made in our contracting 
process, and so----
    Senator Landrieu. Is there anything that this subcommittee 
can do or this Congress to give you any latitude to expedite or 
to move around this? Because the veterans have been, of course, 
waiting for a long time, and this is just--that's one question.
    The second is if we don't move around or find an expedited 
way, what is your timeframe? What does the new timeframe look 
like?
    Secretary Shinseki. I'll turn to Dr. Petzel for the 
timeframe. I would just say, Senator, we're doing everything we 
can to get this moving. And if assistance is required, I'll be 
certainly prepared to come to the subcommittee for that kind of 
help.
    This is a contracting issue right now. And so there's a 
process we have to go through. Let me call on Dr. Petzel.
    Dr. Petzel. Thank you, Mr. Secretary.
    Senator Landrieu, just a couple of points. One is that 
we're centralizing the solicitation of and the execution of 
this contract to Washington and our real property so we can be 
absolutely certain that, number one, it's done right, and, 
number two, that it's done as quickly as possible.
    The solicitation right now is expected to go out shortly, 
during 2012, and we hope that by this time in 2013 we'll have a 
lease award. And, of course, this is basically a year's delay 
in the process that you'd been told we were going to be able to 
follow previously. But we will do absolutely everything that we 
can here in Washington and out there to get this done as 
quickly as we can. If there's any possibility of shaving weeks 
or months off of it, we will take advantage of that.

                           DISABILITY APPEALS

    Senator Landrieu. OK. I really appreciate that commitment, 
and I will send that on. But I also want to just reiterate 
again if there's anything that you need this subcommittee or 
the Congress to do or change, given what was done, please let 
us know, because I think the chairman would be willing, 
understanding the details here, to make some adjustments if 
there is a necessity for that.
    And the final question--I'm sorry. I have 1\1/2\ minutes 
left. The other question I have--and I thank you very much for 
that, and I'll relay that to our folks at home. The other is 
have you all testified this morning about the lines and the 
wait time for disability appeals? Are those lines growing? Is 
the time expanding? Are we contracting either the days or 
months or years that people have to wait? Or how many veterans 
are actually in line?
    Do we have any way to measure that? Because I've been 
getting a few complaints from veterans at home about their 
appeals taking literally years to be processed.
    Secretary Shinseki. Secretary Hickey?
    Ms. Hickey. Senator Landrieu, thank you for your question. 
I will tell you that of the 1,032,000 claims that we did last 
year, on average, there's about 11.2 percent of them that we 
receive a notice of disagreement on. We resolve about half of 
those before they ever even make it into the appeals process, 
largely because a veteran brings another new piece of 
information and we're able to work that.
    But an important thing for us all to know is that we, right 
now, as part of our transformation plan, have a design team. 
That's our governance process that looks at how to improve 
processes, working specifically on the appeals management 
process. And we're testing it in Houston right now, literally 
today. We started it the first of this month. And if it proves 
successful, we have the opportunity to cut that time in half.
    Senator Landrieu. And what does your time show it is now 
for the half that you can't resolve before they go to appeal?
    Ms. Hickey. It's typically in a couple of years period of 
time, ma'am. Yes, ma'am.
    Senator Landrieu. And Mr. Chairman, I just think you have 
been wonderful, and I think this subcommittee has been very 
generous. And I think this administration has been trying to 
put more resources to this effort. But we have got to try to 
find a way to cut this down. I just think it's not right to ask 
our veterans to wait sometimes 3 and 4 years for a resolution 
of their case.
    But anyway, thank you, and I'm going to be focusing with 
you on this through this year.
    Thank you.
    Ms. Hickey. Yes, ma'am.
    Senator Johnson. Senator Blunt.

                        ST. LOUIS MEDICAL CENTER

    Senator Blunt. Thank you, Chairman.
    And I want to agree, particularly, with the last point that 
Senator Landrieu made about this waiting time. Whatever we can 
do about that should be done. I was pleased to see the 
President's budget request has an increase in this budget, as 
you and I talked about, Mr. Secretary, when you were kind 
enough to come by the office the other day.
    I've got three Missouri specific questions.
    One, Dr. Petzel, last year when you were here, we talked 
about--and on a couple of other occasions--the St. Louis 
Veterans Hospital, which was really going through some 
significant changes at the time. I wonder if you've got an 
update on that.
    Dr. Petzel. Thank you, Senator. We've made tremendous 
progress, I think, and I hope that you've had some contact and 
I know you have with the people there. We're very pleased with 
the leadership. I think that Ms. Nelson has really taken hold 
of the problems.
    Number one is that we're in the process of redoing this 
general processing unit. That should be, I think, opening up in 
the summer of 2013, perhaps earlier. There are also a series of 
other projects that are occurring to provide ease of access and 
improved care.
    The things that I'm most pleased with are what has gone on 
internally: The atmosphere of openness that Ms. Nelson has 
created; the fact that people feel free to be able to raise 
concerns, et cetera, and that those things will be listened to 
and dealt with; and then the improvement in the quality of 
care. The measures that we follow indicate that there's been 
tremendous progress in improving the general quality of care. I 
think now, when we look at patient satisfaction and employee 
satisfaction at St. Louis, it's been tremendously improved.
    Senator Blunt. And facility update--that continues?
    Dr. Petzel. Absolutely.

                      JEFFERSON BARRACKS CEMETERY

    Senator Blunt. OK. Thank you.
    On Jefferson Barracks Cemetery, my understanding is that 
within this decade, we'd run out of space there. Of course, 
that's one of our oldest military cemeteries anywhere in the 
country. It's been used for 200 years now. And I'd like to hear 
any thoughts you have on expansion, and then I'd like to keep 
updated on any discussions you're having with the county. I'm 
talking to the county executive, Mr. Dooley, about this, as 
well. I understand one of the options is the Sylvan Springs 
Park, all or part of that, as an addition to the cemetery. I 
think there's another park close that serves the community.
    The Jefferson Barracks Cemetery is just such an integral 
part of who we have always been as a Nation and how we've 
treated our veterans. Do you have any thoughts on what needs to 
happen there?
    Secretary Shinseki. We sure do. Let me call on Secretary 
Muro here to provide an update.
    Senator Blunt. Good.
    Mr. Muro. Thank you, Secretary.
    Thank you, Senator, for that question.
    Senator Blunt. Is your mike on?
    Mr. Muro. Yes, it is. I'll try and speak up some more so 
you can hear.
    We just completed construction and are in the final phase 
of the inspection of the expansion that's going to take us out 
to 2019, and we recently installed new crypts and a 
columbarium. Actually, the columbarium will take us out to 
2030. We are working with the Veterans Health Administration 
(VHA) to transfer additional land for another expansion of the 
cemetery, plus we are working with the county on that park to 
try to get that. We can keep you up to date on it.
    Senator Blunt. But you have some options in addition to 
parts of the county park property?
    Mr. Muro. Yes, we do. Adjacent to where our expansion is 
now, we have other parcels that VHA will be transferring to us 
in the future.
    Senator Blunt. And you see no problems with that happening?
    Mr. Muro. I don't. I think NCA and VHA have worked together 
on that transfer, so it shouldn't be a problem.
    Secretary Shinseki. Now, this land is part of the 
healthcare campus.
    Mr. Muro. Right.
    Secretary Shinseki. Maybe as much as 30 acres we are 
looking at.
    Senator Blunt. That would be a great solution to this, I 
would think, for a significant amount of time, if you've got 
that kind of space.
    Mr. Muro. Right.

                           OUTPATIENT CLINIC

    Senator Blunt. All right. Good. The other thing I wanted to 
discuss was our clinic in Mt. Vernon, Missouri. There's a 
discussion in the 10-year plan of community-based outpatient 
clinics of opening clinics in both Springfield and Joplin. But 
concern that the Mt. Vernon clinic, that's between the two, 
might be closed.
    It's one thing to close that clinic if these other two 
clinics are actually built. It would be a different matter, I 
think, if either one of them didn't happen. While Mt. Vernon is 
not a very big community, it's centrally located, and there are 
lots of veterans in our State, specifically in that part of the 
State.
    Can somebody give me an update on that? I'm not sure I'd 
said I was going to ask this. So, if you can, that would be 
good--if not, I'd be happy to have an update later.
    Secretary Shinseki. I'm not current on it. Let me call on 
Dr. Petzel.
    Senator Blunt. OK.
    Dr. Petzel. Actually, Senator, I'm not current on it, 
either. But we can easily find out what the plan is, and we'll 
get back to you post haste.
    Senator Blunt. That would be good if you did, and how those 
three projects would come together at some point would make a 
big difference. But that outpatient clinic in Mt. Vernon now 
serves lots of people, and I would hate to get halfway through 
a plan and find out that the other half of the plan wasn't 
going to occur.
    So if you can get back to me on how all three of those 
discussions are going and your confidence level on all of them, 
that would be helpful. And it's fine to respond to me at a 
later date.
    Secretary Shinseki. Certainly.
    Senator Blunt. Not very much later, but later than today.
    Secretary Shinseki. We'll do that.
    Senator Blunt. OK. Thank you.
    Senator Blunt. Thank you, Mr. Chairman. Thank you for the 
time.
    Senator Johnson. I have one more question.
    Mr. Secretary, the VA and DOD have agreed to work together 
on the development of a new iEHR system to be managed by a 
joint DOD-VA interagency program office. Three years ago, VA 
established the Project Management Accountability System (PMAS) 
to set accountability standards and to monitor the development 
of its projects.
    As you mentioned in your written testimony, this system has 
achieved at least $200 million in cost avoidance by either 
canceling or improving the management of 45 projects. With iEHR 
being run by the joint interagency program office and not the 
VA, how can we be assured that the PMAS accountability 
standards and project milestones will continue to be enforced?
    Secretary Shinseki. Mr. Chairman, thanks for that very, 
very important question. I'm going to call on Secretary Baker 
to describe the process that's underway here. But we are very 
much confident in our PMAS system. It's served us well, and we 
will ensure that this will be a perspective we bring to the 
discussions with DOD.
    Secretary Baker.
    Mr. Baker. Thank you, Senator. The DOD has agreed that we 
need to use the principles of PMAS to deliver the iEHR. And I 
really appreciate you noting our success in this area. As the 
Secretary said, we've delivered 89 percent of our milestones in 
2011. Most critically, that delivers new functionality for 
veterans, the new GI Bill system, delivering on the VBMS 
system, and many things in healthcare.
    And it's part of our approach to ensure that every IT $1 
that you appropriate to us is well spent for veterans. I can 
assure you that every $1 of VA funds spent on the iEHR will be 
managed under PMAS. We will certify those in our letters to 
you. And, as I said, DOD and VA have agreed that that's the way 
that we'll manage the iEHR.
    Now, there are some regulatory things relative to what DOD 
has to do as they manage their programs under DOD 5000 that 
causes a little bit of a wrestle in there. But we're working 
through those and attempting to make certain that we use the 
strong success of PMAS to help us ensure the success of the 
iEHR.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Johnson. I would like to thank Secretary Shinseki 
and those accompanying him for appearing before this 
subcommittee today. We look forward to working with you this 
year.
    For the information of members, questions for the record 
should be submitted by the close of business on March 23.
    [The following questions were not asked at the hearing but 
were submitted to the Department for response subsequent to the 
hearing:]

              Questions Submitted to Hon. Eric K. Shinseki
               Questions Submitted by Senator Tim Johnson

                CLAIMS BACKLOG: TIMELY PROCESSED CLAIMS

    Question. In fiscal year 2013, the VA is requesting $2.16 billion 
for VBA's administrative costs and claims processors. The subcommittee 
has consistently supported the Department in efforts to reduce not only 
the claims wait time, but also the claims backlog by providing all, and 
in some cases, more money than was requested. Yet the number of days a 
vet must wait to have a claim processed is still unacceptably high.
    I know that you have made this one of the VA's top priorities, but 
when can we expect the process to become more efficient? More 
importantly, when will vets in our home States start seeing more timely 
processed claims?
    Answer. VA shares the sense of urgency evident in your question and 
is doing all it can to expedite the claims process for our veterans. VA 
is committed to--and actively pursuing--comprehensive improvements to 
the processes and systems veterans use to access our benefits and 
services. The Veterans Benefits Administration (VBA) has developed a 
comprehensive transformation plan that we are currently implementing. 
The plan includes a series of integrated people, process, and 
technology initiatives designed to improve veterans' access to benefits 
and services, eliminate the claims backlog, and achieve our goal of 
processing all claims within 125 days with 98-percent accuracy in 2015.
    Before reviewing VA's progress in implementing the transformation 
plan, it is important to understand the complex factors that have 
contributed to the growth in the disability claims workload and its 
impact on the timeliness of claims processing. In August 2010, VA 
published its final regulation establishing new presumptions of service 
connection for three disabilities associated with agent orange 
exposure: Ischemic heart disease, Parkinson's disease, and hairy cell 
and other chronic B-cell leukemias. As a result of these new 
presumptions, VA devoted significant resources in fiscal year 2011 to 
processing approximately 231,000 claims received for these three 
disabilities. VA's 13 resource centers were dedicated exclusively to 
readjudicating over 90,000 previously denied claims for these three 
conditions. This readjudication is required by the order of the U.S. 
District Court for the Northern District of California in Nehmer v. 
U.S. Department of Veterans Affairs, 712 F. Supp. 1404, 1409 (N.D. Cal. 
1989).
    Additionally, over 50,000 claims received after the decision to 
establish the new presumptive conditions was announced, but before the 
effective date of the final regulation implementing the decision, were 
also subject to Nehmer review. As a result of these Nehmer reviews, VA 
has as of June 19 awarded more than $3.6 billion in retroactive 
benefits for the three new presumptive conditions to nearly 131,000 
veterans and their survivors.
    The complexity of the Nehmer claims processing significantly 
reduced decision output throughout fiscal year 2011. Although VBA is 
nearing completion of the Nehmer workload, a residual impact on claims 
processing timeliness continues into this fiscal year. While the focus 
on processing these complex claims slowed the processing of other 
veterans' claims, this decision was the right thing to do for Vietnam 
veterans and their survivors, who in many cases have waited years to 
receive the benefits they earned through their service and sacrifice.
    There are a number of other factors that significantly contribute 
to VA's dramatically increasing claims inventory. They include:
  --Growing Claims Volume.--Over the last 4 years, annual disability 
        claims receipts, representing all generations of veterans, 
        increased 48 percent, from 888,000 in 2008 to 1.3 million in 
        2011.
    --VA anticipates receiving 1.2 million claims in 2012 and 1.25 
            million claims in 2013.
  --Greater Claims Complexity.--Veterans now claim greater numbers of 
        disabilities--and the nature of the disabilities (e.g., post-
        traumatic stress disorder, combat injuries, diabetes and its 
        complications, and environmental diseases) is becoming 
        increasingly more complex.
    --Last year, veterans who served in Iraq and Afghanistan identified 
            an average of 8.5 disabilities per claim package.
    --Veterans of earlier eras identified far fewer disabilities per 
            claim package (e.g., World War II veterans claimed 2.5 
            disabilities and gulf war veterans claimed 4.3 
            disabilities).
    Even with the unprecedented workload increases, VA has achieved a 
15-percent increase in output over the last 4 years, completing over 1 
million disability claims in each of the past 2 years. VA plans to 
process a record 1.4 million compensation claims in 2013, with 
increasing production levels to continue each year as VA aggressively 
works to transform the delivery of benefits and services.
    This year VBA is beginning national implementation of its new 
operating model and paperless and rules-based processing system, the 
Veterans Benefits Management System (VBMS). VBMS is a comprehensive 
solution that integrates a business transformation strategy with a 
paperless claims processing system resulting in higher quality, greater 
consistency, and faster claims decisions. VBMS will move VBA's 
internal, paper-based process to an automated system that integrates 
streamlined claims processes, rules-based processing, and Web-based 
technology. The new operating model and VBMS are being deployed using a 
phased approach that will have all regional offices operating under the 
new model and using VBMS by the end of 2013. We will continue to add 
and expand VBMS functionality throughout this process. The fiscal year 
2013 budget submission includes $128 million for VBMS.
    Earlier this year, VBA implemented three nationwide 
transformational initiatives that will result in meaningful 
improvements in the service we provide to our clients. They include:
  --Disability benefits questionnaires to change the way medical 
        evidence is collected. Veterans now have the option of having 
        their private physicians complete a standardized form that 
        provides the medical information necessary to process their 
        claims, avoiding the need for a VA examination. These 
        questionnaires have the potential to reduce processing time and 
        improve quality.
  --Simplified notification letters streamline and standardize the 
        communication of claims decisions and increase decision output. 
        Veterans receive one simplified notification letter in which 
        the substance of the decision, including a summary of the 
        evidence considered and the reason for the decision are 
        rendered in a single document. This initiative also includes a 
        new employee job-aid that uses rules-based programming to 
        assist decisionmakers in assigning an accurate service-
        connected evaluation.
  --Dedicated teams of quality review specialists at each regional 
        office. These teams are evaluating decision accuracy at both 
        the regional office and individual employee levels, and perform 
        in-process reviews to eliminate errors at the earliest possible 
        stage in the claims process. The quality review teams are 
        comprised of personnel trained by our national quality 
        assurance Statistical Technical Accuracy Review (STAR) staff to 
        assure local reviews are consistently conducted according to 
        national STAR standards.
    These transformational initiatives are being deployed using a 
phased approach that will have all regional offices operating under the 
new model and using VBMS by the end of 2013. We will continue to add 
and expand VBMS functionality throughout this process.
    The new operating model includes the following components:
  --Intake Processing Center.--Enabling quick, accurate claims triage 
        (getting the right claim, in the right lane, the first time).
  --Segmented Lanes.--Improves the speed, accuracy, and consistency of 
        claims decisions by organizing claims processing work into 
        distinct categories, or lanes, based on the amount of time it 
        takes to process the claim.
  --Cross-Functional Teams.--Reducing rework time, increasing staffing 
        flexibility, and better balancing workload by facilitating a 
        case-management approach to completing claims.
    VA is making the investments necessary to transform VA to meet the 
needs of our veterans and their families. We would welcome the 
opportunity to provide a briefing on VBA's transformation progress at 
your convenience.

                  CLAIMS PROCESS: ACCURACY AND QUALITY

    Question. While VA should be very focused on speeding up the 
process, I do not believe it should neglect accuracy and quality of 
claims processed. How is the VA's transformation of the claims process 
taking into account quality, and how do you currently evaluate a claims 
processor's performance?
    Answer. VA agrees. As discussed in the response to question 1, the 
people, process, and technology initiatives included in VBA's 
transformation plan (including the new rules-based and paperless claims 
processing system, our new operating model, quality review teams, 
disability benefits questionnaires, and redesigned processes such as 
simplified notification letters) will help VA achieve our goals for 
timely and accurate benefits delivery. In addition, the national-level 
Challenge training provides a standardized curriculum for all new 
claims processors to help ensure high quality and productivity. 
Challenge training is an 8-week training program for new rating veteran 
services representatives that provides classroom instruction and 
supervised case work that allows for immediate feedback on their 
review. Veteran service representatives go through a 4-week training 
program that will provide each student with the skills necessary to 
complete the development phase of the claims process.
    VBA has negotiated national performance standards with our labor 
partners for all claims processors (i.e., veterans service 
representatives, rating veterans service representatives, and decision 
review officers). These standards include performance elements that 
measure quality of work, productivity, and customer service.

                  VETERANS BENEFITS MANAGEMENT SYSTEM

    Question. Part of your strategy deals with modernizing the VA and 
developing a paperless claims processing IT system. As you mentioned in 
your testimony, the system, known as the Veterans Benefits Management 
System (VBMS) is currently being tested and is expected to begin 
deployment this year. Has the VA developed clear criteria to determine 
whether the pilot has met the goals of the project? If so, what do you 
anticipate the impact of the nation-wide rollout will be on improving 
the timeliness of the claims processed, and when do you believe we will 
see tangible results?
    Answer. The fiscal year 2013 budget includes $128 million to 
support VBMS development and deployment. VBA has developed an 
evaluation plan with clear criteria for each phased deployment of VBMS, 
which stated specific goals and metrics for determining success. The 
overarching goal for VBMS phase 1 (November 2010-May 2011) was the 
development and testing of software, and ensuring claims could be 
processed in an electronic environment. The criteria for success were 
the ability to enter claims into an electronic system and the ability 
to process the claims to completion.
    The goal for VBMS phase 2 (May 2011-November 2011) was to further 
strengthen the capability for VA to process veterans' claims in an 
electronic environment by expanding the functionality developed in 
phase 1 and increasing the number of sites, users, claims, and claim 
types. The criterion for success was the ability to process multiple 
claim types with increased system usage.
    In August 2011, VA identified several transformation initiatives 
focused on integrating people, process, and technology. These 
transformation initiatives are designed to enable the strategic vision 
for improved benefits delivery. VBMS is a component of the technology 
solution which will enable disability compensation claims to be 
completed within VA's goal of 125 days, at 98-percent accuracy by the 
end of 2015.
    National deployment of VBMS began in July 2012 and will follow a 
prescribed deployment schedule, which integrates with VA's overall 
business transformation efforts. During the period immediately 
following VBMS national deployment, VA expects minimal timeliness 
improvements as regional offices adjust to new processes and a new 
system. However, regional offices will see tangible results as they 
work through their existing inventory of paper-based claims and 
transition to an electronic environment complemented by improved 
business processes.
                                 ______
                                 
                Question Submitted by Senator Jack Reed

          BUDGET: SUPPORT VETERANS WITH SERVICES AND BENEFITS

    Question. One of the realities we face as a result of more than 10 
years of fighting in Iraq and Afghanistan is that we now have some 
remarkable young men and women, many of them in their twenties, who 
have been grievously injured. They'll enter the VA system, and may need 
many decades of support. We have to be prepared to honor our commitment 
to care for these veterans.
    How does your budget assure these young men and women that many 
years from now they and their families will get the same kind of 
support, respect, and care that they're getting today? How are we 
planning and investing in programs now to make sure we don't fall short 
in the future?
    Answer. The VA is committed to providing veterans and other 
eligible beneficiaries timely access to high-quality health services. 
VA's healthcare mission covers the continuum of care providing 
inpatient and outpatient services, including pharmacy, prosthetics, and 
mental health; long-term care in both institutional and non-
institutional settings; and other healthcare programs, such as CHAMPVA 
and readjustment counseling. To meet VA's focuses, this budget provides 
the resources required to fund the following initiatives: Ending 
homelessness among our Nation's veterans, creating new models of 
patient-centered care, expanding healthcare access, improving mental 
health, improving the quality of healthcare, and establishing world-
class health informatics capability.
    VA's budget development process requires VA to submit its medical 
care budget for 2 years in each budget submission under the Veterans 
Health Care Budget Reform and Transparency Act of 2009 (Public Law 111-
81). This allows the administration to review the initial advance 
appropriations request during the development of the next budget. As 
part of this process, VA produces budget estimates for more than 80 
percent of its medical program using a sophisticated actuarial model 
that estimates the healthcare services requirements for enrolled 
veterans. Each year VA updates the model estimates to incorporate VA's 
most recent data on healthcare utilization rates, actual program 
experience, and other factors, such as economic trends in unemployment 
and inflation. The model also incorporates data and estimates of the 
population of eligible and enrolled veterans by age, gender, and 
geographic location. By updating the model's inputs and revisiting the 
assumptions that underlie the actuarial projections each year, VA is 
able to produce budget and workload (i.e., enrollees) estimates that 
not only reflect the projected medical demands of currently enrolled 
veterans, but also incorporates the projected demands of veterans in 
future years.
                                 ______
                                 
                Questions Submitted by Senator Mark Kirk

                         INFORMATION TECHNOLOGY

iEHR Budget Request
    Question. Mr. Secretary, the VA agreed in March 2011, along with 
the Department of Defense, to develop an integrated Electronic Health 
Record (iEHR) for use by both Departments. Last year, the Department of 
Veterans Affairs was given $73.42 million to begin development on the 
integrated Electronic Health Record. In 2013, you are requesting $169 
million to continue the development of this joint program.
    Are you on track to spend all of last year's appropriation for this 
program, and if not, do you still need the $169 million requested this 
year?
    Answer. Yes, the Integrated Program Office is on plan to spend all 
of last year's appropriation. The President's 2013 budget request is 
critically important to ensuring continued progress toward developing 
the iEHR.
Electronic Service Bus Contract
    Question. What are the financial and scheduling impacts of the 
recent set back regarding the electronic service bus's contract? When 
do you expect the contract will be re-awarded?
    Answer. The DOD/VA IPO has assessed the impact of the contract stop 
on the development of iEHR enterprise service bus and determined that 
impact will be minimal. With that said, the contract has now been re-
awarded. Specific information regarding the financial implications of 
the cancellation of the initial contract award cannot be released at 
this time due to potential legal issues related to the termination of 
the contract.

           CLAIMS PROCESSING: MEETING GOALS AND ACCURACY RATE

    Question. Mr. Secretary, claims processing is a recurring concern 
for this subcommittee, and in spite of additional personnel and funding 
committed to fixing this problem, the backlog continues to grow. This 
subcommittee is interested in the Department's roll out of the Veterans 
Benefits Management System, its expected impact on the current claims 
backlog, and the outcome of ongoing pilot programs. In your 2013 
request, you are asking for $2.2 billion for claims processing, which 
is $146 million above the 2012 enacted level.
    Would you provide us with an update as to how the Department is 
doing in meeting the goals of all claims receiving a quality decision, 
with a high accuracy rate of 98 percent, in no more than 125 days?
    Answer. As we replied to Chairman Johnson and Senator McConnell, VA 
shares the sense of urgency evident in your question and is doing all 
it can to expedite the claims process for our veterans. VA is committed 
to--and actively pursuing--comprehensive improvements to the processes 
and systems veterans use to access our benefits and services. VBA has 
developed a comprehensive transformation plan that includes a series of 
rigorously integrated people, process, and technology initiatives 
designed to improve veterans' access to benefits and services, 
eliminate the claims backlog, and achieve our goal of processing all 
claims within 125 days with 98-percent accuracy in 2015.
    Before reviewing VA's progress in implementing the transformation 
plan, it is important to understand the complex factors that have 
contributed to the growth in the disability claims workload and the 
impact of that growth on the timeliness of claims processing. In August 
2010, VA published its final regulation establishing new presumptions 
of service connection for three disabilities associated with agent 
orange exposure: Ischemic heart disease, Parkinson's disease, and hairy 
cell and other chronic B-cell leukemias. As a result of these new 
presumptions, VA devoted significant resources in fiscal year 2011 to 
processing approximately 231,000 claims received for these three 
disabilities. VA's 13 resource centers were dedicated exclusively to 
readjudicating over 90,000 previously denied claims for these three 
conditions. This readjudication is required by the order of the U.S. 
District Court for the Northern District of California in Nehmer v. 
U.S. Department of Veterans Affairs, 712 F. Supp. 1404, 1409 (N.D. Cal. 
1989).
    Additionally, over 50,000 claims received after the decision to 
establish the new presumptive conditions was announced, but before the 
effective date of the final regulation implementing the decision, were 
also subject to Nehmer review. As a result of these Nehmer reviews, VA 
has as of June 19 awarded more than $3.6 billion in retroactive 
benefits for the three new presumptive conditions to nearly 131,000 
veterans and their survivors. The complexity of the Nehmer claims 
processing significantly reduced decision output throughout fiscal year 
2011.
    Although VBA is nearing completion of the Nehmer workload, a 
residual impact on claims processing timeliness continues into this 
fiscal year. While the focus on processing these complex claims slowed 
the processing of other veterans' claims, this decision was the right 
thing to do for Vietnam veterans and their survivors, who in many cases 
have waited years to receive the benefits they earned through their 
service and sacrifice.
    There are a number of other factors that significantly contribute 
to VA's dramatically increasing claims inventory. They include:
  --Growing Claims Volume.--Over the last 4 years, annual disability 
        claims receipts, representing all generations of veterans, 
        increased 48 percent, from 888,000 in 2008 to 1.3 million in 
        2011.
    --We anticipate receiving 1.2 million claims in 2012 and 1.25 
            million claims in 2013.
  --Greater Claims Complexity.--Veterans now claim greater numbers of 
        disabilities--and the nature of the disabilities (e.g., post-
        traumatic stress disorder, combat injuries, diabetes and its 
        complications, and environmental diseases) is becoming 
        increasingly more complex.
    --Last year, veterans who served in Iraq and Afghanistan identified 
            an average of 8.5 disabilities per claim package.
    --Veterans of earlier eras identified far fewer disabilities per 
            claim package (e.g., World War II veterans claimed 2.5 
            disabilities and gulf war veterans claimed 4.3 
            disabilities).
    Even with the unprecedented workload increases, VA has achieved a 
15-percent increase in output over the last 4 years, completing over 1 
million disability claims in each of the past 2 years. VA plans to 
process a record 1.4 million compensation claims in 2013, with 
increasing production levels to continue each year as VA aggressively 
works to transform the delivery of benefits and services.
    This year VBA is beginning national implementation of its new 
operating model and paperless and rules-based processing system, the 
Veterans Benefits Management System (VBMS). VBMS is a comprehensive 
solution that integrates a business transformation strategy with a 
paperless claims processing system resulting in higher quality, greater 
consistency, and faster claims decisions. VBMS will move VBA's 
internal, paper-based process to an automated system that integrates 
streamlined claims processes, rules-based processing, and Web-based 
technology. The new operating model and VBMS are being deployed using a 
phased approach that will have all regional offices operating under the 
new model and using VBMS by the end of 2013. We will continue to add 
and expand VBMS functionality throughout this process. The fiscal year 
2013 budget submission includes $128 million for VBMS.
    Earlier this year, VBA implemented three nationwide 
transformational initiatives that will also result in meaningful 
improvements in the service we provide to our clients. They include:
  --Disability benefits questionnaires to change the way medical 
        evidence is collected. Veterans now have the option of having 
        their private physicians complete a standardized form that 
        provides the medical information necessary to process their 
        claims, avoiding the need for a VA examination. These 
        questionnaires have the potential to reduce processing time and 
        improve quality.
  --Simplified notification letters streamline and standardize the 
        communication of claims decisions and increase decision output. 
        Veterans receive one simplified notification letter in which 
        the substance of the decision, including a summary of the 
        evidence considered and the reason for the decision are 
        rendered in a single document. This initiative also includes a 
        new employee job-aid that uses rules-based programming to 
        assist decisionmakers in assigning an accurate service-
        connected evaluation.
  --Dedicated teams of quality review specialists at each regional 
        office. These teams are evaluating decision accuracy at both 
        the regional office and individual employee levels, and perform 
        in-process reviews to eliminate errors at the earliest possible 
        stage in the claims process. The quality review teams are 
        comprised of personnel trained by our national quality 
        assurance Statistical Technical Accuracy Review (STAR) staff to 
        assure local reviews are consistently conducted according to 
        national STAR standards.
    These transformational initiatives are being deployed using a 
phased approach that will have all regional offices operating under the 
new model and using VBMS by the end of 2013. We will continue to add 
and expand VBMS functionality throughout this process.
    The new operating model includes the following components:
  --Intake Processing Center.--Enabling quick, accurate claims triage 
        (getting the right claim, in the right lane, the first time).
  --Segmented Lanes.--Improves the speed, accuracy, and consistency of 
        claims decisions by organizing claims processing work into 
        distinct categories, or lanes, based on the amount of time it 
        takes to process the claim.
  --Cross-Functional Teams.--Reducing rework time, increasing staffing 
        flexibility, and better balancing workload by facilitating a 
        case-management approach to completing claims.
    VA is making the investments necessary to transform VA to meet the 
needs of our veterans and their families. We would welcome the 
opportunity to provide a briefing on VBA's transformation progress at 
your convenience.

                     NON-RECURRING MAINTENANCE CUTS

    Question. Mr. Secretary, within your construction request non-
recurring maintenance (NRM) continues its downward trend. For 2013, you 
received $710.5 million in advance appropriations, $158.3 million less 
than your current estimate for 2012 and $1.3 billion less than the 2011 
actual expenditures. You request only $464.6 million in your advance 
appropriation for 2014.
    With such cuts to the non-recurring maintenance accounts, how do 
you expect to maintain your Department's facilities at their optimal 
level?
    Answer. The non-recurring maintenance (NRM) requirements are 
considered each year as part of the SCIP. This process integrates 
capital requirements that are funded from three separate appropriations 
(the major construction appropriation, minor construction 
appropriation, and NRM in the medical facilities appropriation). It 
produces a balanced capital investment strategy.
    VA does an engineering-based review of the condition of all of its 
buildings on a rotating basis every 3 years. This results in the 
development of VISN-level projects that are annually reviewed and 
ranked for the overall capital investment process. VA sets the funding 
level of the NRM program as part of the determination for the overall 
budget during the final deliberation process.
    Developed first in the fiscal year 2012 budget process, SCIP is a 
VA-wide planning tool to evaluate and prioritize capital infrastructure 
needs for the current budget cycle and for future years. SCIP 
quantifies the infrastructure gaps that must be addressed for VA to 
meet its long-term strategic capital targets. These targets include 
providing access to veterans, ensuring the safety and security of 
veterans and VA employees, and leveraging current physical resources to 
benefit veterans.
    VA has dedicated approximately 30 percent for NRM projects in the 
2013 capital budget request. The 2013 NRM request is $710 million. The 
$464.6 million for fiscal year 2014 represents the initial fiscal year 
2014 advance appropriation request, which will be updated, as 
appropriate, with the submission of the 2014 President's budget 
submission in February 2013. Within the spending targets established in 
the President's 2013 budget request, VA's allocation for capital 
projects, including NRM projects, is one that:
  --Emphasizes completing prior appropriated projects that provide 
        healthcare, memorial, and benefits delivery services to 
        veterans;
  --Impacts more VAMCs and corrects more seismic, safety, and security 
        issues in less time through a focus on minor construction 
        projects;
  --Completes a large number of grandfathered projects, attacking and 
        reducing the capital backlog; and
  --Recognizes the importance of alternative strategies to traditional 
        capital approaches to meet overall needs, such telemedicine, 
        extended hours, mobile clinics, and fee basis contract care.
    VA will continue to update this plan in order to capture changes in 
the environment, including evolving veteran demographics, newly 
emerging medical technology, advances in modern healthcare delivery and 
construction technology, and increased use of non-capital means (when 
appropriate) in a continuous effort to better serve veterans, their 
families, and their survivors.

                          VETERANS JOBS CORPS


Timeline for Authorization Language
    Question. In his State of the Union address, the President 
announced the creation of a Veterans Jobs Corps program. Congress has 
not yet seen any suggested bill language from the White House or from 
your Department on this new program. The President estimates this 
program will cost $1 billion over 5 years.
    What is your timeline for working with Congress to create the 
legislation required to authorize this program?
    Answer. VA officials briefed staff from VA's authorization 
committees in March and April on the Veterans Job Corps initiative. In 
addition, legislation has been introduced by House and Senate 
congressional members that include provisions that align with 
components of the administration's proposal. Those bills can serve as a 
focus of discussion. VA looks forward to continuing to work with 
Congress on this proposal.

Impact in Future Budgets
    Question. The administration has stated the funding for this new 
program will come from mandatory accounts, and therefore will not cut 
into the discretionary budget you have already put together for 2013. 
At a time when our discretionary spending is restrained, how you are 
working with the administration to ensure the creation of such a 
program will not impact other important accounts in future budgets?
    Answer. The Veterans Job Corps initiative, which requires 
legislative authorization and funding from Congress, would provide 
employment opportunities for veterans from all eras, but focus on post-
9/11 veterans VA, in consultation with a Federal Steering Committee 
composed of policy officials representing implementing Federal 
agencies, will select projects for funding based on selected criteria. 
The projects will be implemented through contracts to businesses, 
cooperative agreements and grants to non-Federal entities, and by 
directly hiring a small number of veterans for positions. VA will serve 
as the lead for the Federal Steering Committee, which will be composed 
of policy officials representing implementing Federal agencies, 
including United States Department of Agriculture (USDA), the 
Department of Interior (DOI), National Oceanic and Atmospheric 
Administration (NOAA) at Department of Commerce, and the Department of 
Defense (DOD) Army Corps of Engineers (ACOE).
    In September the administration put forward the American Jobs Act 
together with a plan for deficit reduction that had a net savings of $4 
trillion. The administration is willing to work with Congress to draw 
on that list to find a mutually acceptable funding source for options. 
Although VA will lead the Federal Steering Committee, funding for the 
initiative will not come from VA's budget.

Program Redundancy
    Question. Is the Department working to ensure this new program is 
not creating unnecessary redundancy, as you already have on-going 
programs which provide job training and job placement for veterans?
    Answer. As proposed, VA would coordinate the Veterans Job Corps 
(VJC) initiative through a Federal Steering Committee that would 
evaluate competing proposals from implementing Federal agencies. VA 
would be authorized to transfer funding to those agencies for approved 
projects.
    VA is working to ensure the VJC does not create any redundancies 
with other VA benefit programs. The VJC will complement VA's existing 
educational and training benefits and vocational rehabilitation and 
employment programs. VA plans to use it to strengthen and enhance 
current veterans benefits and services in a number of areas.

                           ENHANCED USE LEASE

Additional Authority
    Question. Mr. Secretary, I understand the Department is facing a 
situation where you may have excess capacity at many sites. Last year 
this subcommittee endorsed the administration's effort to dispose of 
unneeded Federal real estate. I believe the Department should use every 
avenue available to manage its real estate portfolio at an optimal 
level. Enhanced use leasing is one way for the Department to leverage 
your underutilized assets in support of the Department's mission.
    If you had additional enhanced use lease (EUL) authority would you 
be able to encourage private sector development on current excess 
properties?
    Answer. Yes. The Department's EUL authority expired on December 31, 
2011, and has not been reauthorized by Congress. There were projects 
that could not be awarded prior to the December 31, 2011, expiration 
date representing housing facilities, mixed-use developments, and 
campus realignments and other mission compatible developments. All of 
these potential EUL projects would repurpose as many as 210 buildings 
on more than 1,000 acres of land.
    VA remains committed to this important program and will continue to 
seek the authority to effectively leverage and manage its inventory of 
underutilized properties. The administration will work with the 
Congress to develop future legislative authorities to enable the 
Department to further repurpose its underutilized properties using 
similar third-party development public-private partnerships. VA 
anticipates submitting a revised proposal that will enhance benefits 
and services to veterans and their families in the near future.

Better Manage Real Estate
    Question. What does the Department need from this subcommittee to 
better manage your real estate?
    Answer. On December 31, 2011, VA's EUL authority expired; however, 
VA remains committed to this important program and continues to seek 
the authority to effectively leverage and manage its inventory of 
underutilized properties.
    The expiration of this authority limits VA's ability to reduce 
underutilized/vacant inventory and also limits its ability to realize 
operational and maintenance cost savings that would result from the 
reduced inventory. As a direct result of the EUL program, VA has 
repurposed more than 6 million square feet of property. Reauthorization 
of this valuable tool is critical to continued success in managing our 
real property portfolio.
                                 ______
                                 
             Questions Submitted by Senator Mitch McConnell

                           VETERAN POPULATION

    Question. The VA estimates that over a million current Active Duty 
military personnel will return as veterans over the next 5 years. 
Successfully accommodating this large influx of veterans into the VA 
system is of deep concern to my constituents and to me. What specific 
steps are the VA taking in this regard?
    Answer. Veteran healthcare delivery needs are assessed based on the 
VA Enrollee Health Care Projection Model (EHCPM) projections and on 
criteria such as existing and planned points of service (both VA and 
non-VA), access standards, market penetration, cost effectiveness, 
waiting times, and other unique factors (such as whether rural or 
minority veterans will be particularly benefited) using the VHA Health 
Care Planning Model (HCPM). The HCPM provides a standard 10-step study 
methodology to proactively evaluate the comprehensive healthcare needs 
of veterans in Veterans Integrated Service Network (VISN) markets, and 
develop strategies to meet those needs. The HCPM uses a live portal for 
systematic data analysis and data entry. The appropriate data sources 
are built into the portal to maximize the time VISNs spend in analysis 
versus data gathering. Healthcare delivery plans resulting from the 
assessment identify the mix of services to be provided, the sites and 
modalities for delivering services, and inform space requirements for 
capital planning.
    VA is also pursuing a goal to process disability claims in fewer 
than 125 days with 98-percent accuracy by the end of 2015. Efforts 
underway to accomplish these goals will position VA to proactively 
adapt to the projected influx in servicemembers and veterans disability 
benefit claims. VA is building and deploying new electronic systems and 
technological solutions that support decreased processing times while 
increasing quality, such as the Veterans Benefits Management System, 
eBenefits, and the Veterans Lifetime Electronic Record to decrease the 
time it takes to obtain claims-supporting documentation.
    Streamlining claims forms and application processes ensures 
returning servicemembers and veterans experience transparency in the 
claims process. When combined, these efforts expand VA's outreach 
opportunities and provide servicemembers with improved access to 
electronic claims records.
    VA is taking steps to eliminate the claims backlog by developing 
solutions that reduce processing times through programs such as the 
fully developed claims program, fast track, and disability benefits 
questionnaires. VA's pre-discharge programs, Benefits Delivery at 
Discharge and Quick Start, are also undergoing enhancements, while VA 
and DOD continue to refine the Integrated Disability Evaluation System. 
VA continues to pilot new programs focused on decreasing claims 
processing times with innovative ideas like cross-functional teams, 
which increase claim development speed and accuracy by creating a team 
structure that encourages internal knowledge-sharing. A core element of 
VA's preparation for the influx of claims is the new operating model 
and paperless and rules-based processing system, the Veterans Benefits 
Management System (VBMS). The fiscal year 2013 budget submission 
includes $128 million for VBMS.

                             MENTAL HEALTH

    Question. I have heard from Vietnam War-era veterans who are 
concerned that they are being neglected by post-traumatic stress 
disorder (PTSD) specialists and are instead being discharged to primary 
care specialists for their mental health needs. I would like 
reassurance from the VA that it will be accommodating the mental health 
needs of our pre-9/11 veterans as well as those who have recently 
returned from overseas.
    Answer. VA is committed to providing the highest quality mental 
healthcare to veterans of all eras of service and recognizes that it is 
never too late to receive evidence-based treatment for conditions such 
as PTSD.
    VA is in the midst of a transformation to the Patient Centered 
Medical Home model, known as the Patient Aligned Care Team (PACT). The 
team provides primary care services and, in addition to primary care 
providers, includes a broader group of professionals such as mental 
health clinicians. This interdisciplinary care team model links 
treatment planning and delivery of treatment for all of the veteran's 
problems, rather than separating PTSD care from the overall clinical 
understanding and care of the veteran.
    The Primary Care-Mental Health Integration (PCMHI) staff provides 
onsite mental health expertise to the rest of the team. This support 
includes consultative advice, patient follow-up, and direct clinical 
care. Many veterans receive all of their mental healthcare within the 
PACT by mental health professionals. Others are referred into specialty 
mental healthcare if they have need of more intensive or specialized 
care.
    Many veterans who have been effectively treated in specialty mental 
health clinics and whose symptoms have stabilized can be returned to 
the care of the PACT, with the continued support of the mental health 
experts in the PCMHI program.
    In addition to PACT, VA is pioneering the use of telemedicine to 
insure quality treatment resources reach rural and highly rural 
veterans. Many of these veterans are Vietnam-era veterans. More than 
half of the 49,000 patients currently using the telemedicine program 
are receiving mental health services for conditions such as PTSD and 
depression.
    The Uniform Mental Health Services Handbook (UMHSH) requires all 
facilities to provide evidence-based therapies for PTSD in outpatient 
settings and requires a PTSD Clinical Team (PCT) or PTSD specialists. 
However, specialty treatment for PTSD is not limited to the PCT. VA has 
trained over 4,400 clinicians in specialty PTSD treatments. Many of 
these clinicians provide treatment in general mental health clinics or 
in primary care, working in tandem with PCMHI clinics.
    VA continues outreach efforts to veterans of all deployments. For 
example, the Make the Connection campaign, www.maketheconnection.net, 
has a feature that allows veterans to personalize their experience on 
the site by specifying the era in which they served. For example, a 
visitor to the site can specify: ``male, Vietnam War, Army, exposed to 
combat.'' These filters will produce resources for needs most often 
associated with this cohort of veterans including videos of same era 
veterans speaking to common problems, conditions, and routes to care.

                             MEDICAL STAFF

    Question. I have been informed that no new medical staff have been 
hired to meet the increasing demands on the VA medical clinic in 
Owensboro, Kentucky. Are there any plans to add additional staff or 
offer rotating, specialized medical services at the clinic? If not, why 
not?
    Answer. The Owensboro, Kentucky, community-based outpatient clinic 
(CBOC) is in compliance with staffing guidelines for a CBOC caring for 
2,676 veterans, when a third primary care physician came on board in 
early June 2012. With the new physician, current staffing includes 
three primary care providers, a nurse manager, a dietician, four 
registered nurses, four licensed practical nurses, three medical 
support assistants, a full-time social worker and part-time 
psychiatrist.

                    LEXINGTON, KENTUCKY CONSTRUCTION

    Question. Please provide me with an update on plans for the VA 
outpatient clinic and nursing home in Lexington, Kentucky.
    Answer. Description of Project.--The proposal is to construct a new 
healthcare facility on the Leestown campus to replace the 85-plus-year-
old structures. This would provide the space, parking, and modern 
facilities to do the following:
  --Move and consolidate many specialty services to the new location on 
        the Leestown campus, allowing the downtown campus, adjacent to 
        the University of Kentucky Medical Center, to focus on the 
        inpatient needs of its patient base. This decompression of the 
        inpatient campus would allow VA to continue the conversion of 
        multi-patient rooms to private rooms. This initiative is a 
        proven strategy toward reducing infection rates and improving 
        patient satisfaction scores by increasing patient privacy and 
        reducing noise levels.
  --Replace the current community living center (CLC) with modern 
        space, equipped with private, home-like rooms for veterans 
        needing nursing home care.
  --Replace the current residential rehabilitation beds with modern 
        space similar to CLC.
  --Stagger hiring of additional personnel to provide the services 
        needed (estimated at 40 FTE per year growth for the next 10 
        years).
  --Re-utilize the historic buildings on the campus for other, more 
        appropriate uses, such as enhanced use lease arrangement or 
        addressing veteran homelessness.
    Notification to Congress was made for the Lexington, Kentucky 
Clinical Realignment Project to use advanced planning funds in the 
fiscal year 2013 budget (see volume 4, page 6-3). The planning funds 
will first be used for development of a comprehensive master plan. VA 
awarded the architect/engineer contract for master planning efforts in 
June 2012. Funding for the project will be considered in a future 
budget.

                   LOUISVILLE, KENTUCKY CONSTRUCTION

    Question. Please provide me with an updated timeline for the final 
site selection, ground breaking and construction phases for the new 
Robley Rex VA Medical Center in Louisville, Kentucky.
    Answer. The following information is current as of June 28, 2012. 
The public meeting for VA's programmatic environmental assessment (PEA) 
for the selection of a site for the new Louisville VAMC took place on 
April 18, in Louisville, Kentucky. The meeting was held at a middle 
school located within the immediate vicinity of the top-preferred site, 
Brownsboro Road. Approximately 200-250 people attended the meeting, 
including staff from congressional members' offices, and the local 
media. The attendees were briefed on National Environmental Policy Act 
(NEPA) findings for both preferred site options and had an opportunity 
to provide comments and questions. The public comment period ended 
April 29.
    VA completed its environmental due diligence by issuing the final 
programmatic environmental assessment (PEA) and finding of no 
significant impact (FONSI) for the preferred site, Brownsboro Road, on 
June 15, 2012. VA anticipates executing an offer to sell with the 
landowner by the end of June 2012. Closing is scheduled to take place 
in July/August 2012. The ground breaking and construction phases for 
Louisville are dependent on availability of future construction 
funding.

                             CLAIMS BACKLOG

    Question. I consistently hear from Kentucky veterans about the 
length of time it takes the VA to settle a claim. What steps are the VA 
taking to reduce the average waiting time for a claim to be settled and 
generally to reduce the backlog of claims? What, if any, additional 
legislative authority might the VA need to reduce its turnaround time?
    Answer. As we replied to Chairman Johnson and Senator Kirk, VA 
shares the sense of urgency evident in your question and is doing all 
it can to expedite the claims process for our veterans. VA is committed 
to--and actively pursuing--comprehensive improvements to the processes 
and systems veterans use to access our benefits and services. VBA has 
developed a comprehensive transformation plan that includes a series of 
rigorously integrated people, process, and technology initiatives 
designed to improve veterans' access to benefits and services, 
eliminate the claims backlog, and achieve our goal of processing all 
claims within 125 days with 98-percent accuracy in 2015.
    Before we discuss our progress in implementing the transformation 
plan, it is important to understand the complex factors that have 
contributed to the growth in the disability claims workload and the 
impact of that growth on the timeliness of claims processing. In August 
2010, VA published its final regulation establishing new presumptions 
of service connection for three disabilities associated with agent 
orange exposure: Ischemic heart disease, Parkinson's disease, and hairy 
cell and other chronic B-cell leukemias. As a result of these new 
presumptions, VA devoted significant resources in fiscal year 2011 to 
processing approximately 231,000 claims received for these three 
disabilities. VA's 13 resource centers were dedicated exclusively to 
readjudicating over 90,000 previously denied claims for these three 
conditions. This readjudication is required by the order of the U.S. 
District Court for the Northern District of California in Nehmer v. 
U.S. Department of Veterans Affairs, 712 F. Supp. 1404, 1409 (N.D. Cal. 
1989).
    Additionally, over 50,000 claims received after the decision to 
establish the new presumptive conditions was announced, but before the 
effective date of the final regulation implementing the decision, were 
also subject to Nehmer review. As a result of these Nehmer reviews, VA 
has as of June 19 awarded more than $3.6 billion in retroactive 
benefits for the three new presumptive conditions to nearly 131,000 
veterans and their survivors. The complexity of the Nehmer claims 
processing significantly reduced decision output throughout fiscal year 
2011.
    Although the VBA is nearing completion of the Nehmer workload, a 
residual impact on claims processing timeliness continues into this 
fiscal year. While the focus on processing these complex claims slowed 
the processing of other veterans' claims, this decision was the right 
thing to do for Vietnam veterans and their survivors, who in many cases 
have waited years to receive the benefits they earned through their 
service and sacrifice.
    There are a number of other factors that significantly contribute 
to VA's dramatically increasing claims inventory. They include:
  --Growing Claims Volume.--Over the last 4 years, annual disability 
        claims receipts, representing all generations of veterans, 
        increased 48 percent, from 888,000 in 2008 to 1.3 million in 
        2011.
    --We anticipate receiving 1.2 million claims in 2012 and 1.25 
            million claims in 2013.
  --Greater Claims Complexity.--Veterans now claim greater numbers of 
        disabilities--and the nature of the disabilities (e.g., post-
        traumatic stress disorder, combat injuries, diabetes and its 
        complications, and environmental diseases) is becoming 
        increasingly more complex.
    --Last year, veterans who served in Iraq and Afghanistan identified 
            an average of 8.5 disabilities per claim package.
    --Veterans of earlier eras identified far fewer disabilities per 
            claim package (e.g., World War II veterans claimed 2.5 
            disabilities and gulf war veterans claimed 4.3 
            disabilities).
    Even with the unprecedented workload increases, VA has achieved a 
15-percent increase in output over the last 4 years, completing over 1 
million disability claims in each of the past 2 years. VA plans to 
process a record 1.4 million compensation claims in 2013, with 
increasing production levels to continue each year as VA aggressively 
works to transform the delivery of benefits and services.
    This year VBA is beginning national implementation of its new 
operating model and paperless and rules-based processing system, the 
Veterans Benefits Management System (VBMS). VBMS is a comprehensive 
solution that integrates a business transformation strategy with a 
paperless claims processing system resulting in higher quality, greater 
consistency, and faster claims decisions. VBMS will move VBA's 
internal, paper-based process to an automated system that integrates 
streamlined claims processes, rules-based processing, and Web-based 
technology. The new operating model and VBMS are being deployed using a 
phased approach that will have all regional offices operating under the 
new model and using VBMS by the end of 2013. We will continue to add 
and expand VBMS functionality throughout this process. The fiscal year 
2013 budget submission includes $128 million for VBMS.
    Earlier this year, VBA implemented three nationwide 
transformational initiatives that will also result in meaningful 
improvements in the service we provide to our clients. They include:
  --Disability benefits questionnaires to change the way medical 
        evidence is collected. Veterans now have the option of having 
        their private physicians complete a standardized form that 
        provides the medical information necessary to process their 
        claims, avoiding the need for a VA examination. These 
        questionnaires have the potential to reduce processing time and 
        improve quality.
  --Simplified notification letters streamline and standardize the 
        communication of claims decisions and increase decision output. 
        Veterans receive one simplified notification letter in which 
        the substance of the decision, including a summary of the 
        evidence considered and the reason for the decision are 
        rendered in a single document. This initiative also includes a 
        new employee job-aid that uses rules-based programming to 
        assist decisionmakers in assigning an accurate service-
        connected evaluation.
  --Dedicated teams of quality review specialists at each regional 
        office. These teams are evaluating decision accuracy at both 
        the regional office and individual employee levels, and perform 
        in-process reviews to eliminate errors at the earliest possible 
        stage in the claims process. The quality review teams are 
        comprised of personnel trained by our national quality 
        assurance Statistical Technical Accuracy Review (STAR) staff to 
        assure local reviews are consistently conducted according to 
        national STAR standards.
    These transformational initiatives are being deployed using a 
phased approach that will have all regional offices operating under the 
new model and using VBMS by the end of 2013. We will continue to add 
and expand VBMS functionality throughout this process.
    The new operating model includes the following components:
  --Intake Processing Center.--Enabling quick, accurate claims triage 
        (getting the right claim, in the right lane, the first time).
  --Segmented Lanes.--Improves the speed, accuracy, and consistency of 
        claims decisions by organizing claims processing work into 
        distinct categories, or lanes, based on the amount of time it 
        takes to process the claim.
  --Cross-Functional Teams.--Reducing rework time, increasing staffing 
        flexibility, and better balancing workload by facilitating a 
        case-management approach to completing claims.
    VA is making the investments necessary to transform VA to meet the 
needs of our veterans and their families. We would welcome the 
opportunity to provide a briefing on VBA's transformation progress at 
your convenience.

                   DEPENDENTS INDEMNITY COMPENSATION

    Question. As I understand it, VA Dependents Indemnity Compensation 
(DIC) claims had previously been decided at the local and State level, 
but are now, in the case of Kentucky, decided in Milwaukee, Wisconsin. 
This has reportedly resulted in much longer wait times for veterans' 
spouses and dependents to receive their claims. What caused the initial 
decision to relocate that DIC claims processing office and what steps 
are the VA taking to reduce the time it takes to make final DIC claims 
decisions?
    Answer. In previous studies VA identified that consolidation of 
field structure can allow VBA to assign the most experienced and 
productive adjudication officers and directors to consolidated offices; 
facilitate increased specialization and as-needed expert consultation 
in deciding complex cases; improve the completeness of claims 
development, the accuracy and consistency of rating decisions, and the 
clarity of decision explanations; improve overall adjudicative quality 
by increasing the pool of experience and expertise in critical 
technical areas; and facilitate consistency in decisionmaking.
    In January 2002, VBA consolidated pension maintenance work at three 
regional offices--St. Paul, Minnesota; Philadelphia, Pennsylvania; and 
Milwaukee, Wisconsin. In fiscal year 2004, the pension maintenance 
centers completed over 200,000 pension maintenance actions. In addition 
to consolidating pension maintenance, VBA also consolidated in-service 
dependency and indemnity compensation claims at the Philadelphia 
regional office. These claims are filed by survivors of servicemembers 
who die while in military service. VBA consolidated these claims as 
part of its efforts to provide expedited service to these survivors, 
including servicemembers who died in Operations Enduring Freedom and 
Iraqi Freedom.
    VBA considers the processing of survivor claims a high priority. 
The objective of the DIC claims consolidation process is to improve 
accuracy, timeliness, and administration of these benefits.
    In 2011, processing of DIC claims was impacted by the shift in 
overall VA resources needed to process the approximately 231,000 agent 
orange presumptive claims affected by the Nehmer court decision. This 
readjudication affected claims processing timeliness in all areas.
    In an effort to increase the timeliness with which VBA processes 
these DIC claims VBA has initiated a targeted review of DIC cases 
pending nationwide. Field offices are conducting a concentrated review 
of DIC cases to identify and process cases ready for decision.
    VA is also reviewing DIC procedures to maximize operational 
efficiencies and analyzing performance data to identify areas needing 
improvement. Additionally, VA is exploring transformational changes 
that will reduce development and decision time.

                           VETERANS OUTREACH

    Question. Constituents have communicated to me that the VA has 
difficulty locating and communicating with veterans who do not have 
access to computers and the Internet. What efforts has the VA 
undertaken to reach this group of veterans? Is there legislative 
authority that could be provided to the VA to improve its performance 
in this respect?
    Answer. VBA uses a variety of methods to reach out to veterans and 
beneficiaries including face-to-face interviews, outreach events, 
telephone contact (via the National Call Centers), printed materials, 
stand-downs, National Veterans Service Organization conferences, social 
media, and Web services. Outreach activities are planned and designed 
to ensure information is provided to the right beneficiary at the right 
time using the right delivery method.
    VA has maximized the use of mass mailings to reach veterans on 
significant changes in legislation. Examples of these include additions 
of new presumption conditions for former prisoners of war and agent 
orange presumptions for Vietnam veterans. VA is currently in the 
planning stages of determining the feasibility of a direct mailing to a 
considerable population of veterans and survivors who may be eligible 
for Aid and Attendance or Housebound benefits.
    VA ROs are encouraged to collaborate with VA medical centers, 
community-based outpatient clinics, vet centers, other Federal 
partners, and community and local organizations that can facilitate the 
distribution of information on benefits and services.
    VA also partners with Veterans Service Organizations and State and 
county Department of Veterans Affairs offices to assist with outreach 
efforts. In addition, VA makes a concentrated effort to partner with 
faith-based organizations in local communities to reach veterans by 
conducting panels, seminars, and workshops.
    The National Cemetery Administration (NCA) uses a multi-tiered 
approach to communicate with veterans and their families. Through the 
annual surveys of next of kin, NCA knows there is a preference for 
print media, as opposed to electronic or social media, to convey 
information regarding its benefits. Therefore, NCA has an active 
outreach program as well as a partnership with funeral directors who 
act as a liaison with families making burial decisions.
    NCA actively participates in both national and local outreach 
activities. NCA representatives participate in Veteran Service 
Organization, professional, and other stakeholder conventions and 
conferences at the national level, including American Legion, VFW, DAV, 
AARP, and the National Funeral Directors Association (NFDA). Memorial 
Service Network representatives and national cemetery staff members 
participate in local outreach events. In 2011, NCA conducted 3,178 
local and national outreach events and reached approximately 450,200 
people.
    To support the partnership with funeral directors, the Under 
Secretary for Memorial Affairs has participated in an NFDA Webinar and 
has spoken at the organization's annual conference. NCA is actively 
developing a funeral director kit that supports NCA's strategic plan to 
educate and empower veterans and their families through outreach and 
advocacy. Funeral director kits will use pre-existing content as well 
as newly developed videos to increase awareness of and access to 
information about VA national cemeteries and NCA's burial benefits and 
services. These kits will complement the publications (brochures, fact 
sheets, newsletters, flyers, local news articles, and television news 
reports) that NCA currently produces or supports.
    VHA uses multiple mechanisms to reach out to veterans. The 
following are examples of those mechanisms:
  --Interagency Health Affairs is reaching out to veterans working in 
        military-heavy career paths through partnerships with their 
        employers. At recent national conferences for border security, 
        law enforcement executives and fire employees, VA educated 
        employers and veterans on VA benefits.
  --VA is partnering with Federal and local agencies to educate 
        veterans, their families, and communities on VA benefits; 
        including the Department of Health and Human Services, the 
        Department of Housing and Urban Development, and the Department 
        of Agriculture.
  --VA partners with the Yellow Ribbon Reintegration Program (YRRP) a 
        DOD-wide effort to support National Guard and Reserve 
        servicemembers and their families with events featuring 
        information on benefits and referrals throughout the entire 
        deployment cycle (before, during, and after deployments).
  --VA reaches veterans at post-deployment health reassessment (PDHRA) 
        events, where staff may conduct briefings, staff table top 
        information displays, enroll veterans in the VA healthcare 
        system and arrange follow-up appointments at VA medical centers 
        and vet centers. The PDHRA is a healthcare screening for all 
        National Guard and Reserve servicemembers returning from 
        deployment.
  --VA's participation in Individual Ready Reserve (IRR) Musters to 
        inform IRR reservists of their enhanced VA health and dental 
        benefits and to sign them up for VA healthcare. VA typically 
        mails an application for VA healthcare in advance to those 
        reservists who are not enrolled in VA healthcare. VA works 
        jointly with DOD at these IRR Musters, held year-round 
        throughout the United States, to reach this population.

                                PHARMACY

    Question. Constituents have informed me that many VA pharmacies are 
short on medical supplies, particularly supplies that assist veterans 
who are paraplegic or quadriplegic. What can be done to improve the 
stocking of VA pharmacies to minimize reliance on shipping 
complications? What can be done to communicate to veterans about when 
these supplies arrive? Is there legislative authority that could be 
provided to the VA to improve its performance in this respect?
    Answer. VA, like its private sector counterparts, is affected by 
national shortages of pharmaceuticals. This is a national, and in some 
cases, a global problem that is not limited to VA. VA staff members 
utilize all the tools at their disposal to mitigate the impact these 
shortages can have on veterans' drug therapy. For example, in a few 
cases, VA has had to temporarily reduce the quantities of drugs it 
supplies for individual prescriptions from 90-day supplies to 30-day 
supplies until adequate supplies are once again available. In extreme 
cases of national or global shortages, VA has had to change from using 
one drug to using another which is not in short supply.
    VHA is also aware of instances where it could not provide some 
medical/surgical supply items in a timely manner due to a lapse in the 
Federal Government's Federal supply schedule (FSS) contract. In such 
instances, the shortages of supplies are not believed to be 
significantly impacted by delays in shipping completed orders. It is 
believed to be due primarily to delays in acquiring the products via 
alternate sources of supply when they are no longer on the FSS, which 
is a simplified, expedited acquisition process. VA takes all reasonable 
steps to ensure that follow-on FSS contracts are awarded in a timely 
manner. When product delivery to a patient is delayed and VA records 
suggest a patient may run out, it is usual practice to contact the 
patient and work out a substitute product or an emergency delivery.

                           MEDICAL EQUIPMENT

    Question. I am informed by constituents that there is, apparently, 
a discrepancy as to quality of certain medical equipment that is 
provided to veterans. I am told this is particularly acute with respect 
to motorized wheelchairs depending on whether a patient receives a 
wheelchair through a clinic versus a spinal cord medical center. What 
accounts for this reported discrepancy? What can be done to fix it? Is 
there legislative authority that could be provided to the VA to improve 
its performance in this respect?
    Answer. Any discrepancies that are perceived to exist with regard 
to wheelchairs prescribed by a clinic (e.g., physical medicine and 
rehabilitation) versus a spinal cord injury (SCI) center are likely the 
result of the severity of disability and medical needs of the veteran; 
not due to different standards of quality of medical equipment across 
facilities. Patients with SCI typically require wheelchairs with more 
advanced options (e.g., motorized, tilt in space, power recline, 
advanced seating systems) than what may be medically indicated for a 
non-SCI patient. Individuals will see certain wheelchairs that are 
uniquely equipped for veterans with SCI or other severe disabilities, 
but are not medically indicated for other patients.
    Medical devices, assistive technologies, and/or adaptive equipment 
are provided by VA throughout the continuum of care, ranging from 
specialized regional rehabilitation centers (e.g., SCI, polytrauma, and 
blind rehabilitation), to comprehensive outpatient clinics at major 
hospitals, and community-based outpatient clinics. In all clinical 
settings, each veteran receives a comprehensive clinical evaluation and 
individualized plan of care. Specific recommendations for medical 
equipment, when medically indicated, are based upon each veteran's 
individual needs and prescribed care plan. The veteran's clinical team 
recommends and orders the appropriate product, and provides the 
necessary counseling and training to the patient.
    VA continually strives to set the professional standard for 
excellence to ensure that veterans have access to high-quality power 
wheelchairs that meet or exceed industry standards. VA national 
contracts for power wheelchairs and scooters require that all products 
be objectively tested and compliant with Rehabilitation and Engineering 
Society of North America standards to ensure that devices are reliable 
with respect to safety, durability, design, and performance. Over 400 
VA clinical providers also completed a 16-hour online course on 
``Fundamentals of Wheelchair Seating and Mobility'' recently 
coordinated by the University of Pittsburgh in collaboration with 
Paralyzed Veterans of America.

                         MENTAL HEALTH VACANCY

    Question. Constituents have informed me that several important 
mental health positions at the VA hospital in Lexington, Kentucky, 
remain unfilled. With many veterans suffering from post-traumatic 
stress disorder (PTSD) and traumatic brain injuries (TBI), mental 
health treatment through the VA is of great importance to our veterans 
and of deep concern to me. Why have these positions remained unfilled 
and when do you expect them to be filled?
    Answer. On May 11, 2012, Lexington VA Medical Center (VAMC) has 12 
mental health (MH) vacancies. These positions include both social 
workers and psychologists. Eleven of the positions are in some phase of 
active recruitment. Of these, three positions are pending selection. 
The remaining two positions have been posted. One position was posted 
on May 18, 2012, and closed May 29, 2012. The position was filled on 
June 29, 2012. These positions were modified to meet the needs of our 
veterans. New position descriptions and advertisements are being 
developed. Additionally, Lexington VAMC will receive funding to hire an 
additional 15 MH clinicians and 4 MH support staff. Preparatory work is 
being accomplished to ensure immediate recruitment of these positions. 
Mental health and social work leadership are working together to review 
existing and planned resources and matching those to meet the needs of 
our veterans.

            VETERANS INTEGRATED SERVICE NETWORK ALLOCATIONS

    Question. Veterans in central Kentucky have conveyed to me their 
concerns that VA facilities in Lexington, Kentucky, are apparently 
often targeted for funding cuts over regions in other States that are 
part of the VA's Mid South Healthcare Network (VISN 9). What is being 
done to ensure that any VISN 9 budgetary constraints do not 
disproportionately affect facilities in one region over another? What 
steps is the VA taking to ensure that Lexington, Kentucky's VA 
facilities receive the proper attention and investment they deserve?
    Answer. Since fiscal year 2009, VISN 9 has used the Veterans 
Equitable Resource Allocation (VERA) model as a budget methodology to 
distribute funding to VISN 9 medical centers. This model identifies the 
correct funding level for a facility. The Louisville VAMC has been 
fully funded at that VERA distribution but the Lexington VAMC has 
received significantly more than its allocated amount in order to 
continue its operations. Additional funding is required because 
Lexington's operational costs have increased over the past several 
years at a rate above their growth in unique patients. The VERA model 
ensures that Lexington VAMC receives the proper attention and 
investment they deserve. Resources are allocated equitably to the 
networks and spending is focused on the highest priority veterans. 
Allocations are also adjusted for geographic differences in labor 
costs.

                          SUBCOMMITTEE RECESS

    Senator Johnson. This hearing is recessed.
    [Whereupon, at 11:24 a.m., Thursday, March 15, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]
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