[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
U.S. DEPARTMENT OF VETERANS AFFAIRS BUDGET REQUEST FOR FISCAL YEAR 2014 

=======================================================================

                                HEARING

                               before the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                        THURSDAY, APRIL 11, 2013

                               __________

                           Serial No. 113-15

                               __________

       Printed for the use of the Committee on Veterans' Affairs


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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman

DOUG LAMBORN, Colorado               MICHAEL H. MICHAUD, Maine, Ranking
GUS M. BILIRAKIS, Florida            CORRINE BROWN, Florida
DAVID P. ROE, Tennessee              MARK TAKANO, California
BILL FLORES, Texas                   JULIA BROWNLEY, California
JEFF DENHAM, California              DINA TITUS, Nevada
JON RUNYAN, New Jersey               ANN KIRKPATRICK, Arizona
DAN BENISHEK, Michigan               RAUL RUIZ, California
TIM HUELSKAMP, Kansas                GLORIA NEGRETE MCLEOD, California
MARK E. AMODEI, Nevada               ANN M. KUSTER, New Hampshire
MIKE COFFMAN, Colorado               BETO O'ROURKE, Texas
BRAD R. WENSTRUP, Ohio               TIMOTHY J. WALZ, Minnesota
PAUL COOK, California
JACKIE WALORSKI, Indiana

            Helen W. Tolar, Staff Director and Chief Counsel

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
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further refined.



                            C O N T E N T S

                               __________

                             April 11, 2013

                                                                   Page

U.S. Department Of Veterans Affairs Budget Request For Fiscal 
  Year 2014......................................................     1

                           OPENING STATEMENTS

Hon. Jeff Miller, Chairman, Full Committee.......................     1
    Prepared Statement of Chairman Miller........................    45
Hon. Michael Michaud, Ranking Minority Member, Full Committee....     3
    Prepared Statement of Hon. Michaud...........................    46
Hon. Jackie Walorski, Prepared Statement only....................    47

                               WITNESSES

Hon. Eric K. Shinseki, Secretary, U.S. Department of Veterans 
  Affairs........................................................     5
    Prepared Statement of Hon. Shinseki..........................    47
    Accompanied by:

      Hon. Robert A. Petzel, M.D., Under Secretary for Health, 
          Veterans Health Administration

      Hon. Allison Hickey, Under Secretary for Benefits, Veterans 
          Benefits Administration, U.S. Department of Veterans 
          Affairs

      Hon. Steve L. Muro, Under Secretary for Memorial Affairs, 
          National Cemetery Administration, U.S. Department of 
          Veterans Affairs

      Mr. W. Todd Grams, Executive in Charge for the Office of 
          Management and Chief Financial Officer, U.S. Department 
          of Veterans Affairs

      Mr. Stephen W. Warren, Acting Assistant Secretary, Office 
          of Information and Technology, U.S. Department of 
          Veterans Affairs
Jeffrey Hall, Assistant National Legislative Director, Disabled 
  American Veterans..............................................    31
    Prepared Statement of Mr. Hall...............................    59
Carl Blake, National Legislative Director, Paralyzed Veterans of 
  America........................................................    32
    Prepared Statement of Mr. Blake..............................    65
Diane Zumatto, National Legislative Director, AMVETS.............    34
    Prepared Statement of Ms. Zumatto............................    69
Ray Kelley, Legislative Director, Veterans of Foreign Wars of the 
  United States..................................................    36
    Prepared Statement of Mr. Kelley.............................    77
Louis Celli, Jr., Legislative Director, The American Legion......    37
    Prepared Statement of Mr. Celli..............................    80

                        QUESTIONS FOR THE RECORD

Letter From: Hon. Michael H. Michaud, Ranking Member, To: VA.....    89
Questions Submitted by Rep. Beto O'Rourke........................    90
Questions Submitted by Rep. Corrine Brown........................    90
Questions Submitted by Rep. Negrete McLeod.......................    91
Questions Submitted by Ranking Member Michaud....................    91
Pre-Hearing Questions From HVAC Majority and VA Responses........    93
Post-Hearing Questions From HVAC Majority and VA Responses.......    98
Post-Hearing Questions From HVAC Minority and VA Responses.......   108
Additional Post-Hearing Questions From HVAC Minority and VA 
  Responses......................................................   110


U.S. DEPARTMENT OF VETERANS AFFAIRS BUDGET REQUEST FOR FISCAL YEAR 2014

                        Thursday, April 11, 2013

                     U.S. House of Representatives,
                            Committee on Veterans' Affairs,
                                                   Washington, D.C.
    The Committee met, pursuant to notice, at 10:00 a.m., in 
Room 334, Cannon House Office Building, Hon. Jeff Miller 
[Chairman of the Committee] presiding.
    Present: Representatives Miller, Bilirakis, Roe, Runyan, 
Benishek, Huelskamp, Wenstrup, Cook, Walorski, Michaud, Brown, 
Titus, Kirkpatrick, Ruiz, Negrete McLeod, Kuster, O'Rourke, 
Walz.

              OPENING STATEMENT OF CHAIRMAN MILLER

    The Chairman. This hearing will come to order and I want to 
welcome everybody to the VA Committee room to talk about the 
2014 budget request for the Department of Veterans Affairs.
    As everybody already knows, this budget is a couple of 
months late. It comes after the House and Senate have both 
passed their respective budget resolutions.
    Unfortunately, it is a little late to influence the House 
and the Senate budgets that have already been passed, but I am 
sure that we have appropriations and authorization work that is 
ahead of us. And so our oversight on this request is still 
very, very important.
    Mr. Secretary, thank you for being here. Welcome. As you 
know, Committee Members, and this is not on you, but Committee 
Members have had less than 24 hours to review some of the 
details associated with the budget request in advance of this 
hearing.
    It is likely, therefore, that we will have follow-up 
questions after we have had a chance to look a little bit 
closer at the details.
    I appreciate your attendance today and ask for your 
cooperation in getting timely answers to the Committee so that 
we can move forward.
    My initial reaction to the budget is mixed. On the one 
hand, we see a proposed 4.3 percent increase in discretionary 
spending amidst what most would say is a stagnant or declining 
budget request for other agencies, most of which have, unlike 
VA, had to absorb sequester cuts. And that demonstrates that VA 
funding is clearly a priority in a very tight fiscal climate.
    On the other hand, I am concerned that we are not really 
seeing the results for the money that Congress has provided to 
VA over the years. For example, the budget proposes a 7.2 
percent increase for expanding mental health services.
    I am still waiting, Mr. Secretary, for information from VA 
showing that veterans with mental illnesses are, in fact, 
getting healthier with the resources that we provided. After 
all, I know that that is an outcome that you and this entire 
Committee are both after.
    Dr. Petzel, I asked that question of you at our mental 
health hearing two months ago and we are still awaiting a 
response, so would ask if you would help us in getting an 
answer to some questions.
    Then we get into the funding request for the Veterans 
Benefits Administration which is a 13.4 percent increase over 
the current year, but I am at a loss because we are seeing 
performance that does not match the dollars that have been put 
forward.
    Despite already high record investments in technology, 
record numbers of employees available to process claims the 
situation is worse today than it ever has been before.
    When last year's budget was released, VA issued a press 
release saying that with the funding provided, and I quote, 
``By 2013, no more than 40 percent of compensation and pension 
claims will be more than 125 days old.''
    Here we are today and we have 70 percent of claims out 
there that are older than 125 days. And the same is true for 
prior budget requests: lofty promises, excitement about new 
initiatives in technology, but lackluster at best results, and 
we do not have what this Committee would contend is a positive 
trend.
    VA has missed its own performance goals every single year 
and I think most Committee Members here are really very tired 
of the excuses that we keep hearing from those that come before 
us to testify.
    Look, I understand that more claims are being filed and 
that those claims are complex, but that has been true for 
decades. We all know that.
    The workload created because of good decisions that you 
made for Agent Orange veterans, Mr. Secretary, Congress 
provided resources for an IT solution that you requested to 
help with that effort. And by establishing presumptions for 
combat post-traumatic stress and Gulf War illness, those 
claims, most of which would have been filed anyway, should have 
been easier to process, not cited as a contributing cause of 
the perennial failure.
    As for technology improvements, I know many are pinning 
their hopes on the VBMS system on which we have already spent 
close to half a billion dollars. We have already had reports of 
VBMS problems from VA's inspector general. We also have reports 
of the system crashing just this week because all raters were 
caused at that point to temporarily transition back to their 
old computer system.
    But what is worse, I have looked at the backlog numbers for 
the regional officers where VBMS went live at the end of last 
year, 2012, and 14 of the 18 offices have a higher percentage 
of backlogged cases now than when VBMS came online.
    The other four have seen marginal improvement, but it is 
nowhere close to what it needs to be if we are going to meet 
the goal of 2015 that you have established.
    I have been outspoken, as you know, in my efforts to 
protect VA funding and we have worked for over a year to ensure 
that VA was, in fact, exempt from sequester. I have introduced 
a bill along with the Ranking Member to advance fund all of 
VA's budget to protect it from the effects of continuing 
resolutions or threatened government shutdowns.
    I am proud of the efforts that this Committee has made to 
protect the resources that are important to VA, but the point 
of those efforts is to ensure improved benefits and services to 
the veterans of this country. And right now I am not seeing the 
improvement that I think most of us want to see in many key 
areas. I am seeing the opposite.
    And, Mr. Secretary, I continue to say we have got to see 
results and I am sure you want the same thing. We need to see 
the outcomes the Administration has promised with the resources 
that Congress has provided. No more excuses.
    I have supported you and your leadership up to this point. 
I believe that this Committee and the Congress has provided you 
with everything that you have asked for and it is time to 
deliver.
    So with that, Mr. Secretary, I will yield to the Ranking 
Member, Mr. Michaud, for his opening statement.

    [The prepared statement of Chairman Miller appears in the 
Appendix]

           OPENING STATEMENT OF HON. MICHAEL MICHAUD

    Mr. Michaud. Thank you very much, Mr. Chairman.
    And, Mr. Secretary, I would like to thank you and your 
staff for being here today. I look forward to your testimony on 
the funding needs of the VA.
    I would also like to thank the VSO representatives who are 
also going to be testifying in the second panel. The Committee 
has relied on the veterans' community and the VSOs are 
testifying next to provide additional insight into the needs of 
VA.
    You help us understand the pressing issues facing our 
veterans and their families, but you also help us find 
solutions to the current problems that we currently have. I 
especially appreciate the Independent Budget that you prepare 
as well.
    Mr. Secretary, I applaud the Administration for providing a 
concrete example of the priority that our Nation gives to our 
veterans. As you heard the Chairman mention, in a time of 
austerity, a $2.5 billion increase over fiscal year 2013 levels 
represent the Nation's ongoing commitment to those who have 
served and sacrificed.
    The key question today is, does this budget give you the 
resources that you need to complete your transformational 
efforts? The Independent Budget has recommended nearly $2 
billion more than your fiscal year 2014 request.
    Many of your transformational initiatives will come to 
fruition in the next year and a half. This includes your goal 
of eliminating the VA claims backlog by 2015. So again, does 
this budget give you the resources that you need to complete 
your transformational efforts, specifically achieving 
elimination of the backlog in 2015?
    If the answer is yes, I will definitely work closely with 
you and my colleagues on this Committee and in Congress to get 
the resources that you need.
    I can remember sitting on this Committee when I first got 
elected to Congress and we asked former Secretary Tony Principi 
whether or not he had the resources to provide the help that he 
needs for our veterans. He hesitated and his answer was he 
requested an additional billion dollars, but he will live with 
what he receives. So that is why it is important that we know 
whether or not you got what you asked for.
    When you look at it in a time of forced budget cuts and 
sacrifices within other agencies, you do have an increase with 
these funds, in these specific times come an increase in 
responsibility to show that tangible return on investment that 
we are investing in the VA.
    It is imperative that over the next year we have an open 
dialogue about the accomplishments and achievements that this 
funding will give you and your agency. There must be a robust 
discussion of the programs you are moving forward and 
particularly the transformation system.
    We need hard data and information if we are to share your 
confidence that the backlog will be addressed.
    This year, you are asking for an additional $157.5 million 
in medical service funding. To me, this indicates the need for 
better, and more detailed planning in programming. The process 
of putting a budget together and making informed policy and 
program decisions is a fundamental management tool.
    And as we begin the discussion of providing advanced 
appropriations for all of VA discretionary accounts, we need to 
also discuss whether the VA has the management processes and 
infrastructure in place to make strategic decisions that can 
inform budget estimates far into the future.
    I believe we would all like to see a planning, program and 
budgeting process that is driven by the long-term strategic 
needs of the VA. All too often VA has been working on a crisis-
by-crisis mode. There is not that long-term vision. And I think 
we need that.
    It should be one that also would assist VA leadership at 
the very highest level as well to make the tough and smart 
decisions to improve on how we provide benefits and services to 
veterans and to evaluate the successes or failures of efforts 
over the long haul.
    You have requested a large increase in Informational 
Technology as well. I understand the critical nature of IT 
spending. This is especially important within the context of 
your transformational efforts. But I want to be assured that we 
are wisely spending IT resources.
    For example, as part of your proposed increase, you have 
requested $251 million to ``fund the required development 
activities within the IEHR Interagency Program Office (IPD).'' 
In light of the recent decision by DoD and VA regarding the 
integrated electronic health record, is this funding still 
required? Would these resources be better spent to support your 
claims backlog initiative?
    I would also like to mention, actually in the 
Administration proposal that actually I oppose to, is the 
Administration budget's includes a proposal to utilize what is 
called a ``chained CPI'' in place of the current method of 
calculating inflation.
    The Administration believes that the $44 million in savings 
over five years and $230 million over ten years. I line up with 
our different veterans' groups and the Senate share of the 
Veterans' Affairs Committee and our seniors to oppose this CPI 
change.
    I am not convinced that it is a sounder manner in which to 
calculate inflation. Until I am convinced of that, I will be 
opposing it. I believe it would be a real damaging effort among 
many of our vulnerable citizens including veterans and their 
families.
    So, once again, Mr. Secretary, I want to thank you and the 
staff for your leadership. I know these have been very tough, 
difficult times as you go into the transformation and look 
forward to working with you as we move forward over the next 
two years.
    Once again, thank you very much, Mr. Chairman. I yield 
back.

    [The prepared statement of Hon. Michaud appears in the 
Appendix]

    The Chairman. Thank you very much to the Ranking Member.
    Our first panel this morning, we have got the Honorable 
Eric Shinseki, Secretary of the U.S. Department of Veterans 
Affairs.
    Mr. Secretary, your complete statement will be made a part 
of the record, and I will forego introducing those you have 
with you at the table. And should you choose to introduce them, 
I would welcome that. You are recognized now, sir, and the 
clock is not running on you today.

 STATEMENT OF ERIC K. SHINSEKI, SECRETARY, U.S. DEPARTMENT OF 
   VETERANS AFFAIRS, ACCOMPANIED BY ROBERT A. PETZEL, UNDER 
  SECRETARY FOR HEALTH, VETERANS HEALTH ADMINISTRATION, U.S. 
DEPARTMENT OF VETERANS AFFAIRS; ALLISON HICKEY, UNDER SECRETARY 
FOR BENEFITS, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT 
    OF VETERANS AFFAIRS; STEVE L. MURO, UNDER SECRETARY FOR 
   MEMORIAL AFFAIRS, NATIONAL CEMETERY ADMINISTRATION, U.S. 
  DEPARTMENT OF VETERANS AFFAIRS; W. TODD GRAMS, EXECUTIVE IN 
  CHARGE, OFFICE OF MANAGEMENT, CHIEF FINANCIAL OFFICER, U.S. 
   DEPARTMENT OF VETERANS AFFAIRS; STEPHEN W. WARREN, ACTING 
ASSISTANT SECRETARY, OFFICE OF INFORMATION AND TECHNOLOGY, U.S. 
                 DEPARTMENT OF VETERANS AFFAIRS

    Secretary Shinseki. Thank you, Mr. Chairman.
    Chairman Miller, Ranking Member Michaud, distinguished 
Members of the Committee, thank you for this opportunity to 
present the President's 2014 budget and 2015 advanced 
appropriations requests for VA.
    We value your partnership, always have, and that will 
continue, your partnership and support in providing the 
resources needed to assure quality care and services for 
veterans.
    Let me also acknowledge other partners here today, our 
veteran services organization whose insights and support make 
us much better at our mission of caring for veterans, their 
families, and our survivors.
    Let me take the time, Mr. Chairman, to introduce members of 
the panel sitting with me. To my far left, your right, Mr. 
Stephen Warren, our Acting Assistant Secretary for Information 
and Technology. Next to him is Todd Grams, our Chief Financial 
Officer. To my right is Dr. Andy Petzel, our Under Secretary 
for Health and to his right Allison Hickey, our Under Secretary 
for Benefits, and then to the far right, Mr. Steve Muro, our 
Under Secretary for Memorial Affairs.
    Mr. Chairman, thank you for accepting my written statement 
for the record.
    Let me just say very quickly the 2014 budget and 2015 
advanced appropriations requests demonstrates the President's 
unwavering commitment to our Nation's veterans.
    I thank the Members for your own commitment to veterans as 
well and seek your support of these requests.
    The latest generation of veterans is enrolling in VA at a 
higher rate than previous ones. Sixty-two percent of those who 
deployed on Operations Enduring Freedom and Iraqi Freedom, 
Afghanistan and Iraq have used some benefit or service from VA.
    VA's requirements are expected to continue growing for 
years to come and our plan must be robust enough to accommodate 
that. We must be ready to care for them.
    The President's 2014 budget for VA requests $152.7 billion. 
As the Chairman indicated, $66.5 billion of that is in 
discretionary funding and $86.1 billion in mandatory funds. The 
increase of $2.7 billion in discretionary funds is 4.3 percent, 
as the Ranking Member indicated, above the 2013 level.
    This is a strong budget which enables us to continue 
building momentum for delivering three long-term goals we set 
for ourselves roughly four years ago, increase veterans' access 
to our benefits and services, eliminate the claims backlog in 
2015, and end veterans' homelessness in 2015.
    These were bold and ambitious goals then. They remain bold 
and ambitious goals today. But our veterans deserve a VA that 
advocates for them and then puts muscle into the words.
    Access. Of the roughly 22 million veterans, more than 11 
million now receive at least one benefit or service from VA, an 
increase of a million veterans in four years. That has been 
achieved by opening new facilities, renovating others, 
increasing investments in telehealth and telemedicine, sending 
mobile clinics and vet centers to remote areas where veterans 
live, using every means available including social media to 
connect more veterans to VA. Increasing access is a success 
story for us.
    The backlog. Too many veterans wait too long to receive 
benefits they deserve. We know this is unacceptable and no one 
wants to turn this situation around more than the workers at 
our Veterans Benefits Administration. Fifty-two percent of them 
are veterans themselves. We are resolved to eliminate the 
claims backlog in 2015 when claims will be processed in 125 
days or less at a 98 percent accuracy level.
    Our efforts mandate investments in VBA's people, processes, 
and technology.
    People. More than 2,100 claims processors have completed 
training to improve the quality and productivity of claims 
decisions. More are being trained and VBA's new employees now 
complete more claims per day than their predecessors.
    Processes. Use of disability benefits questionnaires, what 
we call the DBQs, online forms for submitting medical evidence 
has dropped average processing times in medical exams and 
improved accuracy.
    There are now three lanes for processing claims, an express 
lane, about 30 percent of our claims go through that, for those 
that will predictably take less time; a special lane, special 
operations lane, if you will, for about ten percent of the 
claims for unusual cases or those requiring special handling; 
and then the core lane where roughly 60 percent of the 
processing is done.
    Technology is critical to ending the backlog. Our paperless 
processing system, VBMS, Veterans Benefits Management System, 
will be faster, improve access, drive automation, reduce 
variance. Thirty regional offices now use VBMS. All 56 will be 
on VBMS by the end of this year.
    Homelessness. The last of our three priority goals is to 
end homelessness in 2015. Since 2009, we have reduced the 
estimated number of homeless veterans by more than 17 percent. 
The January 2012 estimate is the latest available figure and 
that has the number at 62,600.
    There is more work to be done here, but we have mobilized a 
national program that reaches into communities all across the 
Nation and partnered with the experts in those communities on 
dealing with homelessness.
    Prevention of veterans' homelessness is a major effort and 
that will be the follow-on major effort to the rescue mission 
which we have given ourselves until 2015.
    Mr. Chairman, we are committed to the responsible use of 
the resources you and this Committee provide.
    Again, thank you for the opportunity to appear here today 
and for your support of veterans. We look forward to your 
questions.

    [The prepared statement of Eric K. Shinseki appears in the 
Appendix]

    The Chairman. Thank you very much, Mr. Secretary, for your 
testimony.
    I am going to start with a question that does not have 
anything to do with the backlog, but we will get there.
    There is a witness on the second panel from the VFW who in 
testimony observes that major construction project backlog is 
upwards of $25 billion and at the current rate, it would take 
some 40 years to fully fund.
    This budget proposes $342 million for major construction, 
putting us on a course, I believe, for completion of all the 
projects in 70 years.
    So what I want to know from you, Mr. Secretary, what is the 
plan going forward in light of the severe funding restraints in 
this particular area and do you think we need a strategic 
reassessment of VA's Capital Asset Program going forward?
    Secretary Shinseki. Mr. Chairman, let me just say the 
budget request that we submitted for construction is $2.39 
billion for major and minor construction, NRM, nonrecurring 
maintenance, and medical lease programs.
    These programs remain stable with an emphasis on providing 
safe, secure, sustainable, and accessible facilities for our 
veterans.
    Our minor construction request is for $715 million. It is 
an increase of 17 percent compared to 2013. The reason minor 
construction receives attention from us is it is the program 
that impacts more VA facilities and delivers services to 
veterans more quickly.
    Medical lease requests, $626.7 million, an increase of 12 
percent compared to 2013, allows VA to provide services closer 
to where veterans live.
    Major construction request is $342 million, as you 
indicated. With those funds, we intend to purchase three new 
national cemeteries in central east Florida, Brevard County 
Omaha, Nebraska, and Tallahassee, Florida. It also funds the 
completion of a mental health building in Seattle to replace 
the one that is seismically unsafe.
    In terms of nonrecurring maintenance requests, $709.8 
million, remains stable compared to 2013. The request funds 
projects with safety facility condition deficiencies and other 
high priority needs. And this is another one of those 
categories in which hospital directors can make quickest use of 
that kind of----
    The Chairman. Mr. Secretary, I apologize, but my time is 
short and I appreciate it. But I was talking specifically about 
major construction.
    Secretary Shinseki. Major? Okay.
    The Chairman. Do we need to look at the capital assets plan 
again?
    And, you know, we discussed the issues on some leasing 
problems with CBOCs. I see there are 13 in the budget this 
year. We have already got 12 plus three backlogged because of 
CBO and what they are requiring us to do in regards to an 
offset.
    But, again, do we need a strategic reassessment of VA's 
Capital Asset Program going forward?
    Secretary Shinseki. Mr. Chairman, we have a process by 
which we review all of our construction projects. As I think 
you know, we created a construction review council that did not 
exist before. We also have a process by which we strategically 
look at our capital infrastructure plan and those reviews are 
ongoing.
    I would say that we do look at these closely and I am happy 
to share with you the results of those studies.
    The Chairman. Okay. Thank you.
    Let me real quick. VA submitted a strategic plan to 
eliminate the compensation claims backlog. That plan was 
submitted in January of this year in which it forecast expected 
numbers of claims it will decide in the years 2013, 2014, and 
2015. And now three months later, the budget assumes a lower 
number of claims will be decided.
    For example, the strategic plan assumed 1.6 million claims 
would be completed in 2014, but now the budget as it has been 
submitted assumes only 1.32 million will be completed.
    So I think this is consistent with my opening statement 
where I said we talk about bold predictions about performance 
year after year, but the results are not backing up.
    And, you know, my question is, it happens all the time. The 
goal posts keep shifting. And I would like just as brief an 
answer as possible because we will go to a second round of 
questioning and we will talk about the backlog further.
    But why does the goal post keep moving on one of the most 
important issues that are out there within the veteran 
community today and that is the backlog?
    Secretary Shinseki. Fair enough, Mr. Chairman. I am going 
to call on Secretary Hickey to provide some detail.
    But I would say any time you write a long-term, large plan 
that describes solving a complex problem, they are assumptions 
based and we rely on those assumptions being fulfilled, one of 
which is there are no additional complicators that get added to 
the workload.
    And another assumption is that we are going to be funded 
for the things we say we need. If either of those things 
change, it is going to change the work flow.
    I believe the plan that you are referring to, the common 
operating plan delivered in January did not include VOW VEI as 
part of that discussion. The current estimate does. And so 
there is an additional requirement that we have accommodated.
    I think, you know, we can explain the difference in those 
two numbers. We have a resource plan now with submission of 
this budget and I believe our latest estimates are accurate.
    Let me just see if Secretary Hickey has anything to add.
    Ms. Hickey. So, Chairman, we do create a plan and then we 
look at our actuals. And I know that most of you all have 
individuals that are checking our weekly reports that we send 
to you through the Monday morning workload report or through 
ASPIRE.
    And I will tell you that we try to adjust for what we see 
in real life. And you will see right now there is a slight 
decrease in applications being made for claims compensation, 
not a ton, but there is a little bit of a decrease.
    These are objectives we look at. These are estimates for 
the future in terms of past veteran behavior. We have to base, 
you know, what we are looking at in the future in terms of, you 
know, what we are seeing and adjust for that year over year.
    So we will be making those adjustments on a regular basis 
and as we start to see changes, we will certainly keep this 
Committee and you up to speed on where we are.
    Secretary Shinseki. Mr. Chairman, I would just add as 
closeout here, I believe I am correct that the COP you saw in 
January did not have VOW VEI in it. This latest set of 
estimates does and that is why you see an adjustment.
    The Chairman. And, Mr. Secretary, I have got a follow-up to 
that, but I will do it in the second round.
    Mr. Michaud.
    Mr. Michaud. Thank you very much, Mr. Chairman.
    And, once again, I want to thank you, Mr. Secretary, and 
your team for being here today and for what you are doing for 
our veterans.
    One of the issues, as you know, I have been a little 
skeptical of the 2015 backlog issue and primarily, because when 
you look at your plan that you put forward, I believe part of 
that plan also requires the Department of Defense to move 
forward, in a different mode as far as that seamless transition 
between DoD and the VA. And that is the concern that I have. I 
know we have a new secretary of DoD.
    My question to you is, have you had any recent discussions 
with the new secretary of Department of Defense and are they 
willing to move forward with that seamless transition, i.e. are 
they willing to accept the VistA system that VA currently has?
    It is my understanding VistA VA owns, VA operates. The DoD 
system is actually, I believe that they purchased the L-3, I 
believe. I am not sure. You will have to correct me on that if 
I am wrong.
    So is DoD willing to accept the VistA system and, if so, 
how soon?
    Secretary Shinseki. Thank you, Congressman Michaud.
    I would tell you that VA has decided that VistA is our core 
system and we are moving forward on the IEHR and still focused 
on an initial operating capability 2014.
    And as you might expect, this has been a topic of 
discussion with the new secretary of Defense, Secretary Hagel. 
He is getting into the discussion. It is a complex one. And he 
wants to be sure he is structured correctly.
    He and I have discussed this as recently as yesterday. I 
believe we are on the same path here and that is to look to 
develop a single common, joint, integrated electronic health 
record that is open in architecture and nonproprietary in 
design. And all of those terms are code word to get us to where 
we believe a seamless transition demands that we make the right 
decisions and the investments.
    Secretary Hagel is working this hard personally. I know 
that. And I look forward to our next discussion.
    Mr. Michaud. If they are not willing to accept it, what 
will that do towards the 2015 backlog issue that you are 
committed to breaking the backlog by 2015 if DoD does not do 
it?
    Secretary Shinseki. Well, as a separate discussion, as we 
were building VBMS, the automation tool for benefits 
processing, we have also had a parallel discussion with other 
agencies, but primarily with DoD because, as I have said 
before, very little of what we work on in VA originates here. 
Most of what we work on originates over in DoD.
    And so this partnership between not just our two 
secretaries but our two departments, entirely important if we 
are going to have this seamless transition where all of our 
energies are focused on--the focal point being the young 
individual serving in uniform and that individual coming to us 
as a veteran. That should be seamless. They should not have to 
do anything about it. We should adjust.
    And so while we are talking about the integrated electronic 
health record, that is one piece of this larger discussion of a 
digital hookup with DoD.
    As we were developing VBMS, we have consulted with DoD and 
indicated to them that in 2014 when we are VBMS'd, we are 
looking for digits from them and they are committed to working 
to make that happen.
    Mr. Michaud. Good. My last question actually deals with how 
you calculate claims. When you look at VBMS, you can have a 
claim that might have four medical conditions. Actually, I have 
seen some that actually has about a hundred medical conditions. 
I think that is probably outside the norm.
    But normally if you have a claim that has 20 medical 
conditions, my concern is how do you really calculate it? How 
do you determine productivity among the employees by dealing 
with just a claim versus breaking it down to the medical 
conditions which you could have several in one claim?
    Secretary Shinseki. Let me call on Secretary Hickey here to 
just give us a short synopsis of the issue versus claims 
discussion and I will look to close out.
    Ms. Hickey. Thank you, Congressman Michaud.
    You well noted that there has been a change in terms of 
what the content of a claim is. In the past, we might have 
found one or two medical issues inside of a claim. Our current 
veterans coming back from Iraq and Afghanistan are claiming at 
much higher levels, 12 to 15 medical issues per claim.
    What we have done here of late is we have taken the claim, 
our employees, and we are now capable of going down inside the 
claim and assessing how they do at the individual medical issue 
level, giving different points for claims that have more 
medical issues in it, so that the different complexity and 
workload associated with that claim, you know, has an 
expectation for our employees of additional workload 
acknowledgment.
    I will tell you as I look at the claim level quality versus 
the medical issue quality which really is what a veteran cares 
about today, that veteran cares that we are doing his knee or 
his hearing well at that issue level, we are actually across 
the board, across the Nation at 95 percent on our quality when 
I look at the medical issue level of how we do a claim.
    Secretary Shinseki. Just to close out, Mr. Michaud, you 
bring up a good point. You know, if you are dealing with a 
claim with ten issues and you solve nine of them and you are 
taking care of that veteran, but the one issue remains open, 
that claim is still unresolved and, yet, 90 percent of it has 
been decided in favor of the veteran.
    So there is this distinction between getting 90 percent of 
your work done or just counting the claim and it is a one or 
zero result.
    We need to be better at this and how we explain it, but we 
will do that with the help and insights and, you know, support 
of the VSOs who have great experience here.
    The Chairman. Mr. Bilirakis, you are recognized for five 
minutes.
    Mr. Bilirakis. Thank you, Mr. Chairman. Appreciate it very 
much.
    Thank you, General, for testifying today. Thank you for 
your service to our country and thank you for your commitment 
to our veterans.
    I would like to elaborate on the process that the VA uses 
to reevaluate its projects that had already been funded, that 
have been appropriated.
    As you know, James A. Haley Medical Center in Tampa, the 
most highly trafficked VA polytrauma center in the Nation, not 
only serves my constituents, but also severely injured veterans 
across the Nation.
    Years ago, officials at Haley developed a proposal that 
would allow them to build a brand new hospital in lieu of 
renovating their existing facility using major construction 
funding already appropriated to the location.
    If started now, the new hospital will save $500 million 
over 30 years, very significant, without interrupting current 
hospital operations, while better serving the future needs of 
our veterans, yet the VA has not allocated funding for this 
cost-saving project.
    In fact, I notice that the budget request that this 
proposal was a priority 78 with no funding requested.
    Why has the VA been reluctant to prioritize such projects 
and I question if there are other similarly meritorious 
projects on the horizon when the timing is optimal to build a 
facility that will not only better serve our Nation's veterans 
but also will save hundreds of millions of dollars over time? 
What obstacles must the VA overcome to consider such projects 
and ensure taxpayers' dollars are used wisely?
    Secretary Shinseki. Thank you for that question.
    Let me call on Dr. Petzel to provide some details here.
    Dr. Petzel. Congressman Bilirakis, let me give you the 
latest update on the Tampa project. As you know, originally the 
proposal was to renovate the bed tower. There is much other 
construction that was going to be new.
    We reassessed the situation at Tampa and I believe that 
both the network and the facility have come to the conclusion 
that they really do need to build a new tower.
    A proposal to re-scope that project is working its way now 
through central office and when it is approved, we will then 
begin the process of evaluating that project.
    I believe there is enough money left so that we are not 
going to have to ask for additional money. It is a matter of 
just re-scoping it and that is in process.
    Mr. Bilirakis. There is enough money left and then some.
    Dr. Petzel. Right.
    Mr. Bilirakis. I appreciate that. Can I follow-up with you 
on this?
    Dr. Petzel. Certainly.
    Mr. Bilirakis. Please. Thank you very much. I appreciate 
it.
    I yield back, Mr. Chairman.
    The Chairman. Ms. Brown.
    Ms. Brown. Thank you, Mr. Chairman and Ranking Member.
    Secretary, first of all, let me thank you for your service 
to the country and to the Department of Veterans Affairs.
    As I look out in the audience in the room, my first thought 
is whether we are doing all we can for the veterans. Since we 
enacted the advanced appropriation policy three years ago, 
veterans' health care has not been the subject of the whims of 
the Congress and for that I am very grateful.
    I want to thank Dr. Petzel for coming to Jacksonville to 
open the clinic. As the Secretary said, the clinic is probably 
one of the best clinics in the entire country and we will be 
able to do 90 percent of the procedures right there in this 
clinic. And I know that is the future of how we want to do 
outpatient clinics.
    I do most of my health care at Bethesda and it would be 
good for every Member to have an opportunity to go out there 
and visit because the veterans that are there, their injuries 
are so different from what they were 20 years ago or 10 years 
ago. It is a lot more serious. When you say one issue, they 
have a multiplicity of issues.
    And what are we doing as a department to work with the 
local agencies to help deal with the problem that we have?
    I really do not feel that the veterans can do it by 
themselves. It is like the partnership we have down in Florida 
where we are working with the University of Florida.
    What are we doing to forge those relationships? Do you 
understand my question?
    Secretary Shinseki. Let me try to answer it.
    Ms. Brown. Yes, sir.
    Secretary Shinseki. I am going to ask Dr. Petzel to 
describe what we are doing, have done and are doing in 
establishing a polytrauma system of care----
    Ms. Brown. Yes.
    Secretary Shinseki. --so that you see this end as military 
members who are severely injured. And, by the way, today I 
think we have six quadruple amputees and just very, very 
difficult situations.
    What we have created in VA are five polytrauma centers that 
ring the country, Tampa, Richmond, Minneapolis, Palo Alto, and 
San Antonio. But this is where these patients are initially 
handed off from the military to us.
    Polytrauma, the word we created to describe serious 
injuries where it is not just one thing but multiple injuries.
    And then as part of that tiering, is as they come through 
that first phase of stabilization, so they are not there 
forever, there has to be a second tier that moves them closer 
to home, third tier, and finally get them as close to home as 
we can.
    Let me ask Dr. Petzel to describe the effort here and then 
the numbers of facilities and people we have dedicated to this.
    Dr. Petzel. Thank you, Mr. Secretary.
    Congresswoman Brown, as the secretary described, it is a 
tiered system, begins with the very intensive five polytrauma 
centers. We have done 23 polytrauma network sites around the 
country which would be the next level of care as a person moves 
closer to their community.
    And then we have 86 polytrauma support teams so that when 
you put this together, most all of our medical centers have a 
polytrauma program that is relatively close to the individual's 
home.
    The goal here is always to de-institutionalize people and 
to get them into their home. The 86 polytrauma support teams 
and then the other 39 polytrauma points of contact are really 
the connection that that patient and his family has with the VA 
system and the VA medical care.
    We will do whatever we need to in order to support someone 
at home. It may be buying care in the community. It may be 
providing that care ourselves. But the goal here, again, is to 
return people into their community and into their homes.
    Secretary Shinseki. Congresswoman, just take a second here. 
Our effort here in connecting VA's electronic health record 
system takes these five polytrauma centers as a priority and it 
is the next coming step and connect it to Bethesda. So we have 
that electronic hookup between the premier military hospital in 
the country and there may be a couple others, but certainly our 
five polytrauma centers.
    Ms. Brown. Thank you.
    Orlando, Florida Medical Center status report?
    Secretary Shinseki. Let me call on Dr. Petzel.
    Dr. Petzel. Congresswoman Brown, work is proceeding at pace 
at Orlando. There are now over 900 people on the site working 
and we are in discussions with Brasfield & Gorrie, the 
contractor, about completion dates and continuing the project. 
We are optimistic that this is going to get done. And as I 
said, it is proceeding at pace.
    Ms. Brown. Thank you very much.
    I was just there less than a month ago reviewing the 
project. You know, I wanted it completed yesterday, but thank 
you as we move forward together.
    And thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Dr. Benishek, you are recognized for five minutes.
    Mr. Benishek. Thank you, Mr. Chairman.
    And thank you, Secretary Shinseki, for being here this 
morning along with your team.
    I guess my concern is to tell you the truth, Mr. Secretary, 
is, I know how difficult it must be managing a bureaucracy the 
size of the Veterans Administration and I guess my concern is 
about the management of these projects that are going on here.
    We are constantly being told that we are just not making 
it, you know, we did not get the IT thing done, we did not get 
this thing done, but we are working on it and it is going to be 
better.
    I am just wondering is there any system in the management 
plan which rewards or disincentivizes people for not meeting 
these goals?
    I just get a little bit frustrated when I see that, well, 
we had a goal for an integrated IT thing and now it all broke 
down and now we are kind of working on it again. It seems to me 
that, you know, if I have got somebody in charge of a project 
and all of a sudden the project is a mess and I have to explain 
it like you have had to do, I would make sure that that person 
was no longer in charge of that project or there is some 
incentive. If they are going to say they are going to do a 
project that they get it done like they say.
    And you end up being an apologist for what your staff and, 
you know, the administration of, you know, the whole projects 
under you because you cannot be doing it yourself.
    So I am wondering what exactly is in place in your 
management team to incentivize or disincentivize those people 
that are in charge of all these little projects that we are 
talking about here because I see it as a difficulty in 
management.
    Could you kind of go through that with me a little bit?
    Secretary Shinseki. Sure. Congressman, thanks for 
recognizing it is a large and complex operation.
    And if you want to do everything well, you have got to go 
at the whole organization and think about change.
    You know, when I arrived, I took a good look at the level 
of training we provided our people. It was not what I thought 
it needed to be. And in the four years, that has been 
validated.
    So you will see in our effort tremendous expenditure of 
resources and commitment to get our people trained. It is 
difficult to hold someone accountable for a standard if you 
have not trained them to it. All you do is you keep changing 
out the players.
    So for us as an organization, we are after building a 
competent organization not just at the top but all the way 
throughout the organization. And to do that, we must train 
people on the jobs we expect them to do. Get them to that 
standard and then we can hold them accountable by measuring 
performance against that standard.
    And usually in a training discussion, that gap between the 
standard and an individual's performance is what is called the 
training gap. That is what you have to train on.
    If we have trained them to the standard and they do not 
perform, then we have some actions we can take.
    Mr. Benishek. Isn't there some point where, you know, 
training is over? You are on the job. You have not performed. I 
mean, I am a surgeon. I am sort of responsible for the stuff 
that I do.
    Secretary Shinseki. Sure.
    Mr. Benishek. You know, I had a training period. But after 
a while, your training is over and you get better as you go on. 
But to me, the answer of more training does not ring true.
    Secretary Shinseki. Well, there is sufficient turnover in 
an organization that, you know, training is an ongoing process. 
The ones we have trained definitely we can hold them 
accountable. And then we provide them the tools to do their 
job.
    And earlier there was some discussion about VBMS having 
crashed this week. The term crash is not an appropriate 
description when you field a large IT program. We started with 
VBMS 1.0. We are now up to 4.2. And in the 4.2 program, there 
was one of those patches that did not take.
    And so as we fielded 4.2 two weekends ago, we noticed that 
that patch was not working and we pulled the patch offline to 
work it, but the rest of 4.2 went in and continued to function. 
VBMS was available.
    We have now fixed that patch which is usually what happens 
and we have put it in place and VBMS is functioning. It is a 
powerful tool in the hands of trained people.
    Mr. Benishek. You know, I know the person on the ground 
dealing with, you know, a program or something, that is an 
employee. But I am talking about the management, you know, the 
management of these individual sectors.
    You know, it just seems to me that if you keep missing your 
goals, does anybody change? I mean, does management change? Are 
you changing somebody out? Are the people held responsible for 
not meeting their goals or the answer is that, well, we just 
could not meet the goals and that was an unrealistic goal and 
we are going to have to reassess it? But that is the answer we 
get all the time. Is there never a situation that arises where 
somebody is incompetent?
    Secretary Shinseki. I will just say in 2009, this 
department rated executives above 53 percent. All of them were 
rated outstanding. Today those ratings are around 25 percent.
    Mr. Benishek. I think there needs to be some sort of an 
incentive program for producing a goal that you get or a 
disincentive program that if you do not make it--you understand 
what I am saying because to me, it does not seem as if there is 
any consequences for not getting these things done?
    So I think my time is up.
    Secretary Shinseki. Fair enough. I am happy to have 
discussion with you, Congressman, on that. I am open to 
suggestions. We have to train our leaders as well as our 
workforce and that has been an ongoing process as well.
    Mr. Benishek. Thank you, sir.
    The Chairman. Mr. O'Rourke, you are recognized for five 
minutes.
    Mr. O'Rourke. Mr. Secretary, I would also like to thank you 
for your service and what you describe as a very ambitious set 
of goals and agenda that is matched with the muscle necessary 
to implement it.
    And I know that part of what we are considering today is 
the addition to the muscle of resources that you can allocate 
towards achieving these goals.
    And I also want to thank you personally and your under 
secretaries for their responsiveness on issues that we brought 
to their attention. And case in point for us is the 19.5 full-
time mental health positions that have gone unfilled for far 
too long in El Paso.
    Since bringing that to your attention, we are down to 11 
which is progress and we would like to see it get down to zero, 
of course. And we would appreciate your help with that.
    Another issue that we brought to your attention is the poor 
performance of the regional office in Waco serving benefit 
claims throughout Texas including the 80,000 veterans who live 
in El Paso. And as you know, I think the average wait time is 
439 days. Eighty percent of those claims are over 125 days.
    So from the new resources being requested in the 
President's budget, how will you use those in regional offices 
like Waco to improve performance?
    Secretary Shinseki. I am going to call on Secretary Hickey 
here to talk about Waco.
    I would just say, Congressman, if you will recall, back in 
2010, we made a decision to provide Agent Orange service-
connection for Vietnam veterans 40 years ago who are 
experiencing three new diseases. That increased our workload.
    Waco was one of those sites where a large number of those 
claims were brokered. And as a result, they had an increased 
workload unlike others. And so it took them two years to work 
through that and it slows other claims processing. Unfortunate. 
No veteran should wait. But, again, the decision made in 2010 
was also the right decision to take care of Vietnam veterans. 
That is sort of the background on Waco.
    Let me ask Secretary Hickey to address your details about 
how it looks going forward.
    Ms. Hickey. Congressman, so Waco is actually in the process 
of going through several of the transformation initiatives. To 
start with, we are running all of the individuals who are new 
to their positions through the new challenge training which 
allows people to be--new employees coming into the system with 
that new challenge training to do 150 percent more claims and a 
30 percent increase in quality than their predecessors could, 
effectively making them a much more helpful rater or claims 
evidence gatherer earlier in their career.
    Second thing I will tell you is we have put quality review 
teams inside of Waco as we have done in every one of our other 
regional offices reducing the amount of cycle time we have for 
errors that we catch downstream.
    I can tell you nationally, we have reduced the number of 
errors we have found on our exams by 12 percent and I can tell 
you nationally, we have reduced the number of errors we found 
on our letters by 23 percent. Those are both things that take 
time and create some of those long wait periods for our 
veterans that we want to get rid of so we do it right the first 
time by them.
    The other thing I will tell you is we have put Waco into 
our new organizational model as we have done for now all of our 
regional offices nine months ahead of schedule. They now have 
that express lane, that core lane, that special operations 
lane.
    They had a number of claims that could have been done in 
that express lane. Once we sort of broke them into the lanes, 
we could see that lift that work that is faster and easier to 
do because it has just one or two medical issues. They are 
pushing right now on that express lane really hard and they 
have staffed that lane to make sure it happens.
    The last thing I will say is my appreciation to the State 
of Texas, the Texas Veterans Commission for the partnership 
that they are providing us in bringing us in more fully 
developed claims. That is where they help us go find all that 
evidence we need to make that decision. They have been 
particularly helpful in finding private medical records and my 
appreciation to the State for what they are contributing and 
helping us.
    Mr. O'Rourke. Thank you for your answer and your attention 
to this.
    And as I have said before in previous hearings, we look 
forward to working with you collaboratively to make sure that 
we can do a better job out of Waco.
    And I know I have very limited time, Mr. Secretary, but I 
am interested in hearing your response to how we can protect 
low and moderate income veterans from the negative consequences 
of chained CPI and how we make sure that we still take care of 
them and do not introduce an undue hardship to them and their 
families.
    Secretary Shinseki. Congressman, I would just say, and here 
again, it is consistent with what the President has done 
elsewhere, and that is the desire to protect the vulnerable 
populations.
    The proposal excludes veterans' pensions which are provided 
to low income wartime veterans who are age 65 or older or who 
are under age 65 but remain totally and permanently disabled as 
a result of conditions unrelated to their military service.
    The budget proposal also excludes certain veterans' 
education benefit programs, for example, Post-9/11 GI Bill, 
Montgomery GI Bill active duty because inflationary adjustments 
for these programs are decided by the National Center for 
Educational Statistics.
    Mr. O'Rourke. Okay.
    The Chairman. Dr. Roe.
    Mr. Roe. I thank the Chairman.
    And thank you all, General Shinseki, for being here and all 
the veterans that are here today. And, again, to echo, thank 
you all for your service all in the room.
    You mentioned and as I read your testimony last night that 
you wanted to increase access to veterans' benefits and 
services and, of course, eliminate the claims backlog and 
homelessness.
    I would add another and that is to reduce the alarming rate 
of suicide among our active duty military and veterans.
    You and I when we spoke, I guess six weeks or so ago, 
looked at the budget, the VA budget and just from a 40-year 
look as I have had since I was in the military and looking at 
the last ten years, we have gone from $100 billion now to this 
budget request $152 billion. And you told me you thought you 
had the resources to do what you needed to do.
    And I believe I have never seen the VA provide more 
services than it has right now at this point in time. It never 
has. So I think that is a good thing and certainly this 
Committee, I think, will continue to do that.
    There are lots of problems in a bureaucracy this big. And 
as I have listened, one of the things that Dr. Benishek brought 
up and was brought up is that if you hear Mr. Bilirakis had an 
issue and Ms. Brown had an issue. It seems like it is the 
squeaky wheel that gets some noise. If we bring it to you, it 
gets looked at.
    But I think that Dr. Benishek made a great point is that if 
there are 19 places unfilled, why in the world did that happen?
    An issue I brought to you six weeks ago was when a veteran 
dies, and there is no discussion about that, you have a death 
certificate, this veteran dies, their spouse sometimes takes 
months or maybe as much as year to get their benefit. That is 
absolutely unacceptable.
    When you have got a veteran out there, a spouse, man or 
woman, especially the older veterans that are out there that 
are living on a very meager income and then to have them wait 
and, as we talked about, they have a house payment, they have 
food to buy, they should not miss a check.
    I mean, that should not even be questioned and why we 
cannot do that--I had Veterans Benefit people come in and talk 
to me about this and they had one that was a year long. And 
this person was in dire straits. So, anyway, I will listen for 
that.
    I guess another question I have was brought up is that you 
mentioned the significant percentage of OIF/OEF members who are 
using veteran services, but that is only about ten percent of 
all veteran patients.
    And as you all look forward, do you have the resources 
going forward to take care of those veterans that you expect to 
come in? I mean, I know you know they are going to. Are the 
resources there?
    Secretary Shinseki. Congressman, just let me touch on the 
spouse issue you mention and go forward. I do have it from you 
and we are working it.
    I am equally, you know, concerned and frustrated as you are 
by having to do this. I think we are required to do this. We 
are looking for a way not to have to revalidate the spouse on, 
you know, the death of a veteran. But we will work with you on 
that.
    Mr. Roe. Thank you.
    Secretary Shinseki. Regarding our resourcing for Iraq and 
Afghanistan veterans as they return, what we have is the 
understanding that over the next five years, up to a million 
veterans will be leaving the military and becoming veterans. 
And based on that, we have at least described what we think 
that flow rate will be as best we understand it and then 
provided a resource request for the 2014, 2015 piece of that.
    We are in the process of developing a five-year look at our 
budgeting process, this is VA internally, so that we look at a 
planning phase out there that is beyond the two-year budgets 
that we are fortunate to have because of the Congress, but then 
a programming and then a budgeting execution phase. So that 
gives us a way of describing what our requirements are going to 
be when we come to budget.
    Based on what we know today, the two-year look we are 
providing here accommodates what we expect will be the flow.
    Mr. Roe. Another question I have is the integration between 
DoD and VA on the electronic health records and the benefits. 
Should we have a joint meeting between DoD--and I realize that 
Defense Secretary Hagel has a lot on his plate with North Korea 
and the Middle East right now, but this is one of my concerns 
when we changed was the fact that this will get a back burner 
again.
    And are we going to be sitting here, and you and I have 
spoken about this and that was a private conversation, it will 
remain that way, but are we going to be sitting here a year 
from now or two years or three years because it is not a 
resource--there is plenty of money--to be able to integrate 
these systems?
    I mean, it has really become very frustrating to me to sit 
here year after year. Now, unless the voters have a different 
idea, I plan to be here in 2015, and to see if we complete 
these things that we are saying we are going to do. Is it 
there?
    Secretary Shinseki. Yeah. I would say, again, Congressman, 
Secretary Hagel and I have discussed this on at least two, 
maybe three occasions. He is, again, putting in place a system 
to assure the way ahead for him to make this decision and be 
the partner that we need here. He is committed to an integrated 
electronic health record between the two departments.
    VA has made its decision on the core and we are prepared to 
move forward.
    Mr. Roe. Somebody has to blink and that would be one of 
you. I mean, obviously we cannot integrate them, so it is going 
to have to be one system or the other. And I think what I heard 
you say was you have decided the VA is going to stay with what 
it has. That means that he is going to have to blink.
    Secretary Shinseki. I would say the VA system is government 
owned, government operated. We have put VistA into the open 
architecture trade space so anyone who wants to use it can use 
it. It is used in other countries. I believe it is a powerful 
system and I am just awaiting a discussion with Secretary 
Hagel.
    Mr. Roe. I thank the Chairman. I yield back.
    The Chairman. Thank you, Mr. Secretary, for your words on 
VistA. I think the Committee is in full agreement.
    I would remind he probably does not know, my colleague, yet 
that we are working on another joint meeting with both 
secretaries specifically on this issue because I am encouraged 
by some of the words that I have received regarding Secretary 
Hagel and his willingness to move forward. He has been involved 
in it for a long time and I think it may move in the right 
direction finally.
    Mr. Walz, you are recognized for five minutes.
    Mr. Walz. Well, thank you, Mr. Chairman.
    And, Mr. Secretary, and your team, thank you for being 
here. I am grateful for that. Always grateful for the work we 
are doing. But as we all know, until every veteran is served at 
the highest level we can, we have work to do. And I know this 
team understands that clearly.
    I am hopeful now that the public understands the need to 
care for our veterans. I think the silver lining in the backlog 
is it has come to the attention of the American public and then 
that is a good thing.
    Even some of our colleagues I have noticed outside of this 
Committee, have been using terms like seamless transition. That 
is good.
    I think it is important for this Committee, though, to 
maybe gently remind them they are not the first people to think 
of it. There are complexities to this that have been thought 
about. And the Committee process works, at least in this place, 
where Members are trying to find it and looking through this.
    So I am grateful for that, but I also know, General, you 
sense the frustration that grows. You have it yourself and I 
have seen you express that. And I have said it. I am convinced 
we have got the right people there, but we have got to bust 
this thing.
    So it is an opportunity. It is an opportunity to talk to 
the American public. It is an opportunity for us to talk about 
what we do right, but it is an opportunity for us to work on 
getting things better.
    And not to miss the opportunity for my wheel to squeak, Dr. 
Roe, since we are here, I did have this maybe parochial, but I 
think it is bigger than that, General. I just have a question.
    Looking at the budget, there is no mention in here, and, 
Dr. Petzel, this may be for you, I see no mention of long-term 
TBI rehab provisions that came out of the Lejeune Act.
    You know, when Congressman Boozeman was over here and now 
Senator Boozeman, we worked on this. It was the ambiguities in 
the law on TBI treatment to move beyond the holistic approach, 
to move beyond physical, move to get these folks back, mental 
needs as well as quality of life, long-term recovery, and 
process.
    I see no hint that this provision is being implemented in 
the budget proposal. Indeed, the select medical program 
projects a reduction in TBI care for OEF and OIF veterans for 
2014 and 2015.
    Other than the non-reoccurring maintenance the Chairman 
spoke about, no other program is going to see a reduction. So 
we passed this bill, passed the House, passed the Senate. 
President signed it in there. It was crafted with the VSOs. It 
was crafted with the caregivers. It was to make sure that our 
warriors are brought back to the highest level possible as the 
research catches up and takes them forward.
    And looking at the budget, it is hard for me to see how we 
are going to implement that. So, yes, parochial, but I think an 
issue we all in this room deeply care about is returning care 
of those warriors, especially TBI.
    Secretary Shinseki. Let me call on Dr. Petzel and then I 
will add something to close out.
    Dr. Petzel. Congressman Walz, thank you very much. It is an 
acute observation about the TBI budget.
    We are anticipating that the acute TBI cases that we have 
seen as a result of the war are going to be decreasing, that we 
will not see as many people coming for the acute care.
    But we do have in the process of being developed a plan for 
the holistic long-term care that you described before and there 
will be as a result of the fewer acute patients we are caring 
for, there will be money available to develop that program.
    Mr. Walz. Dr. Petzel, what we were asking for was, as the 
VA often does, is almost unprecedented. We were not seeing it 
in the civilian sector. We were asking for an approach to care 
that was at that cutting edge as it was going.
    How are you seeing that implemented? What are some of the 
things that we do on that care to move them beyond just getting 
them back to a physical baseline? How are we not just 
maintaining that? How are we moving further on all those 
aspects of their life?
    Dr. Petzel. Well, first of all, it starts at the acute 
rehabilitation phase, Congressman, where you do not just have 
physical therapists doing physical therapy. You have behavioral 
scientists. You have recreational therapists. You have people 
who are even at that point in time working to reintegrate these 
people into their community and working with their families to 
do that.
    And each one of our polytrauma centers now has a transition 
unit, if you will, an apartment that is suited to teach people 
how to survive and live by themselves or with minimal help. And 
as that is being done, all these other more holistic things in 
a person's life are being integrated into what that individual 
does.
    And then as I mentioned earlier when we were talking about 
polytrauma, we progressively are moving people towards their 
community and towards their home.
    I am very pleased that the huge majority of the people that 
we see in polytrauma are now back in their homes being cared 
for by home-based primary care, home-based care, et cetera.
    Mr. Walz. Dr. Petzel, do you feel like what this act did 
has been incorporated into the cultural treatment of how we see 
now what our responsibility is at VA?
    Dr. Petzel. Yes, I believe it is being incorporated. 
Absolutely.
    Mr. Walz. Very good. I appreciate that.
    Secretary Shinseki. I just had just one small point here. 
Congressman, I think you are aware of this. At our polytrauma 
centers, we have an awakening awareness program and here is 
where our most severely injured, brain injured veterans go. And 
most of them are deeply comatose when they arrive there.
    Through great work, cutting-edge work at these polytrauma 
centers, I believe we are about 69 percent of those deeply 
comatose and in some cases declared vegetative patients are 
being brought back to consciousness and then worked back into 
the capability to communicate and go on living, you know, a 
life that has more independence with it.
    Mr. Walz. I am appreciative of that.
    I yield back, Mr. Chairman.
    The Chairman. Thank you very much.
    Mr. Runyan.
    Mr. Runyan. I have nothing right now, Chairman. Yield back.
    The Chairman. Let's see. Ms. Kuster. Hi. How are you?
    Ms. Kuster. Thank you very much, Mr. Chairman, and thank 
you, Ranking Member Michaud, for holding this hearing.
    General Shinseki, great to see you again and thank you.
    I want to cover two topics and I know our time is short. 
The first is a cultural shift similar to one we were just 
discussing. I am a new Member of Congress and I am extremely 
concerned about the treatment of women in the military when we 
have one out of every three women and a fair number of men 
experiencing sexual assault and the trauma that comes with 
that.
    And so I would like to hear from you about your mental 
health treatment and how you intend to incorporate the very 
sensitive and cutting-edge treatment models for victims of 
sexual assault, particularly in the circumstance where they may 
or may not have had the opportunity to properly adjudicate 
those claims and they may have been re-victimized in the 
process, separated from service, separated from their unit. So 
I would like to hear from you and particularly whether those 
services are available throughout the veteran system.
    Secretary Shinseki. Congresswoman, I am going to call on 
Secretary Hickey to talk a little bit about the claims that go 
along with this because I think her insights will be helpful.
    I would just say I think the use of the term as you did, 
sexual assault, is an appropriate description of what we are 
dealing with. Somehow other terms make it sound like it is a 
condition. This is a crime and we ought to look at it that way. 
And then, you know, leaders ought to take charge here.
    I would just point out that in this year's budget, if we 
were to look back to 2009 and come forward through our budgets, 
women veterans' programs have been increased by 134 percent. 
And so much of your concern about are we paying attention here 
and doing the right things, I think we are. It is reflected in 
the budget. But we are always open to insights on what we 
should be doing better.
    With regard to disability claims, we are going back to take 
a look at decisions that may have been rendered earlier and 
just checking ourselves.
    Let me ask Secretary Hickey to take that one on.
    Ms. Kuster. Thank you.
    Ms. Hickey. Thank you, Congresswoman.
    Let me tell you when I arrived here in June of 2011, one of 
the first things I did within the first two weeks was to ask to 
have a comparison of our grant-denial rates between PTSD 
associated with sexual assault and PTSD associated with all the 
three other major conditions: combat, fear, and terrorism.
    And I did note in June, 2011, this was an action I took of 
my own accord, that we had a disparity between the ways in 
which we granted and denied those. We put in some very fast 
action; it was together, both a VHA and a VBA action. We 
identified very specific people to deal with the situation from 
the VBA perspective. We heard from our veterans who were 
dealing with this issue; they wanted to talk to women. So, 
there is now a dedicated person in every regional office who 
handles these claims. We have trained together both those on 
the health side who are working with our victims here and put 
into play some new processes.
    I can tell you every quarter I ask for an update. By June 
the next year, we were clearly at par with the way we grant and 
deny other PTSD environments. We have remained that way. I 
continue to pull them and adjust to assess it to make sure it 
happens. And Dr. Petzel, also in VHA, provides the health care, 
the ongoing health care, for these victims to ensure that they 
are cared for in that perspective as well.
    Ms. Kuster. So, thank you very much.
    I am going to go on to my next question--my time is very 
short--but I would love to work with you, and I know there are 
others on this Committee and throughout the Congress that would 
like to work with you on that subject.
    This is a much more parochial subject, but I think it 
probably impacts other areas. I have a very rural part in the 
north country of New Hampshire. We recently, with the New 
Hampshire delegation, sent a letter to you about both a 
telehealth and a clinic in Colebrook, New Hampshire, but more 
broadly, I would be interested in a conversation about 
expanding telehealth facilities, one-day-a-week facilities, and 
any information you might have to share with us about the new 
patient center community care program in New Hampshire and I 
would love to work with you and your team going forward to 
increase accesses to service for veterans living in a rural 
community.
    Thank you.
    Secretary Shinseki. I would just say--let me call on Dr. 
Petzel to try to provide as much detail--I think the letter is 
recent enough. I don't have a comprehensive plan to come back 
with, but let me see what Dr. Petzel can provide.
    Dr. Petzel. Thank you, Mr. Secretary, Congresswoman Kuster.
    We are very empathetic with the ruralness of northern New 
Hampshire. Telemedicine is a burgeoning part of the way we 
deliver care and we would very much like to sit down with you 
and talk about how we can increase availability of those kinds 
of services.
    We have places where we do this in the Veterans' Service 
Club where the telemedicine is there and it is connected to 
either a hospital or a large-scale clinic. There are many, many 
ways that we can provide this service in rural areas, and we 
would like to talk to you.
    Secretary Shinseki. I would just add that this budget has 
$460 million in it for telehealth to address those kinds of 
things that you are talking about.
    In addition, in those areas where we don't link well or we 
don't have a presence, we do have non-VA fee-care as an 
available option so we can go on the local economy and veterans 
can be served. We have over $5 billion into paying fee-based, 
fee-care costs.
    Ms. Kuster. Thank you very much and thank you.
    Mr. Roe. [Presiding] Thank you.
    After yielding, Mr. Huelskamp is recognized for five 
minutes.
    Mr. Huelskamp. Thank you, Mr. Chairman.
    I appreciate the opportunity. I apologize for slipping in 
here, and I want to follow-up on that last comment about the 
issue about non-VA fee-basis care.
    Can you describe--you gave us the numbers, Mr. Secretary, 
nationwide--can you describe the response of how often is it 
used and what services in general it can be used on and then I 
would like to follow-up on your response.
    Secretary Shinseki. I just gave you the rough numbers 
nationwide. It is about $5.9 billion. Decisions on the use of 
fee-care is done locally by, you know, the attending physician 
to decide whether to and how much.
    Let me call on Dr. Petzel to provide more detail.
    Dr. Petzel. Thank you, Mr. Secretary and Congressman 
Huelskamp.
    It is a widely used program. It is used particularly in 
rural areas, but not exclusively. And as the secretary said, 
the decision is made on the part of the physician. They are 
prescribing or asking for some care that is not available in 
the community-based outpatient clinic or in the medical center 
or it may not be conveniently located to the individual's home, 
and that is when a fee-care authorization is asked for.
    In Kansas, specifically, the Wichita VA Medical Center 
spends about $15 million a year on fee-care program, and as you 
know, we have in Kansas, Project ARCH, which is a pilot project 
using fee-care more extensively in a community to bring care 
into rural communities. We think it is a very important tool, 
if you will, to provide better access, along with telemedicine, 
community-based outpatient clinics and those other things we 
have.
    Mr. Huelskamp. And, Doctor, a follow-up on the Project 
ARCH. I presume that is in reference to the pilot project in 
Pratt, Kansas?
    Dr. Petzel. That is correct.
    Mr. Huelskamp. What is the local response to that?
    A few months ago, it didn't seem very positive, that it 
wasn't working very well is what I was hearing from that 
community. Since it has been redistricted out of my 
congressional district, I don't have as much contact. Do you 
have more information on that?
    Dr. Petzel. The information I have, there are 223--as of 
January--223 patients that were using Project ARCH and the 
feedback that I have gotten was that they were satisfied. There 
may not be--there may be people who are not involved in the 
project that want to get involved, and I will find out about 
that.
    Mr. Huelskamp. Uh-huh. You said how many were--how many 
patients?
    Dr. Petzel. Two hundred and twenty-three.
    Mr. Huelskamp. Well, that has changed considerably from the 
last information that I had.
    But back on the issue, the non-VA fee basis, I was at a 
hospital in La Harpe, Kansas--by the way, my congressional 
district is so big that two days ago, the difference in 
temperature across the district was 75 degrees from end to end. 
It was minus 2 degrees on the western edge and 73 on the other 
end, so it is a big area and I will note that Pratt being 
fairly close to Wichita is not what we consider rural in terms 
of access; it is the 200 or 300-mile, but I was in La Harpe, 
Kansas and they said for every hour of patient care, they were 
filling out 30 minutes--spending 30 minutes filling out 
paperwork for every patient and the response was is that we 
can't do that. We just can't do that.
    And so, I would like some more information on that. Is that 
what we are hearing as well? So, I mean, I know we spend--you 
are talking about the dollars we spend but there is incredible 
potential and need out there and not just for the veterans 
themselves, it is for the spouses that get to drive and drive 
and drive and the volunteers that drive from--by the way, 
thanks for finding a physician in Liberal, Kansas, and filling 
that this summer; I really appreciate that. We are talking 250-
mile drives for volunteers and patients and spouses.
    So, I would like to follow-up a little bit more, a little 
more information about the success of this non-VA fee basis, 
because it seems like it is underutilized particularly because 
of the heavy paperwork requirements.
    Dr. Petzel. We will particularly, Congressman, follow up 
with you about the paperwork requirements that you were talking 
about. I want to just add that in addition to a fee basis, 
telehealth in Kansas, as well as other parts of the country, is 
really very popular and rapidly growing way of delivering 
specialty care, particularly.
    Mr. Huelskamp. Okay. Thank you.
    I yield back, Mr. Chairman.
    Mr. Roe. I thank the gentleman for yielding.
    Congresswoman Negrete McLeod?
    Mrs. Negrete McLeod. Thank you.
    Mr. Secretary, thank you for being here.
    Homelessness among veterans is a serious problem in any 
district, and I am sure it is in other districts.
    How many housing vouchers through the HUD VASH program do 
you anticipate will be funded by your requested amount of the 
$278 million?
    Secretary Shinseki. Dr. Petzel?
    Dr. Petzel. Thank you, Mr. Secretary, Congresswoman McLeod.
    We are expecting in the 2014 budget another 10,000 
additional HUD VASH vouchers and that will bring, I believe, 
the number of vouchers we have to over 46,000.
    Mrs. Negrete McLeod. Okay. My second question--thank you--
as you mentioned in your testimony, the number of women 
veterans enrolled in the VA health care has increased by 22 
percent since 2009.
    What is the VA's timeline for increasing the number of 
facilities that have comprehensive women's clinics beyond the 
current 50 percent?
    Dr. Petzel. Another good question, Congresswoman McLeod.
    The VA has three ways that we try to meet the special needs 
of women veterans. The first is, as you mentioned, a 
comprehensive women's clinic that we find in places that have 
over a thousand women patients and that is bringing together 
all the services that might be needed into one clinical 
setting, so, mental health, OB/GYN, primary care, whatever 
might be needed is fixed in that area, and we have about 86 of 
those clinics, if I remember correctly, around the country.
    The next level is having a primary care clinic that is 
designated specifically for women, in which the primary care 
providers are specially trained to be able to recognize and 
manage issues that might be specific to women veterans. In 
virtually all of our medical centers and most of our large 
outpatient clinics, we have that circumstance.
    And then the last area, in very small places where we have 
one or two providers, we have trained about 2,500 physicians 
and nurse practitioners in the special needs that women may 
have and that is the way we manage it.
    So, we have the three levels and we will--whenever we can 
see a large enough number of women who need it, we will set up, 
and do set up, a comprehensive women's clinic. I want to point 
out that the budget devoted specifically to women's needs has 
grown since 2009 by 134 percent.
    Mrs. Negrete McLeod. Because of the number of women who are 
joining the forces and are coming home?
    Dr. Petzel. That's correct. We have well over 300,000 now 
enrolled in veterans' health care.
    Mrs. Negrete McLeod. Thank you.
    The Chairman. [Presiding] Thank you very much.
    Dr. Wenstrup?
    Mr. Wenstrup. Thank you, Mr. Chairman.
    Secretary Shinseki, we met a while ago, maybe three or four 
weeks ago, and I was wondering if you could update us. We 
talked about putting in place a way to increase the efficiency 
of the clinics and the ORs in our VA hospitals, from the 
standpoint, especially, of physicians having too much 
administrative duties that virtually anyone could do and it 
takes them away from patient care, and if we could do that, we 
could allow health care providers to see more patients in a 
day, do more surgeries in a day, things like that. I was just 
wondering if you could give me an update on that.
    Secretary Shinseki. I am going to call on Dr. Petzel to 
provide some detail here, but this leads to our discussion of 
the Patient Aligned Care Team where the physician is sort of 
the focal point, but surrounded by other members of the care 
team that allow the physician to concentrate on what he or she 
does best, and that is see patients, take care of their needs, 
and then the administration, the tracking of pharmacy 
requirements is done by others, all part of that team. It is 
called PACT, Patient Aligned Care Team. That is our initiative 
and we are implementing that across VA as we resource it.
    Dr. Petzel?
    Dr. Petzel. Thank you, Mr. Secretary.
    Congressman, we absolutely agree with you that getting the 
most of the people that we have and operating our crowded 
facilities sometimes, like operating rooms, et cetera, in the 
most efficient manner, I think, is very, very important. And as 
the secretary described, we are involved in trying to set up a 
circumstance where people, first of all, work in teams, and, 
secondly, where each individual works at the top of their 
license, so that physicians are only doing those things that 
physicians have to do; nurses are only doing those things that 
you have to have a nurse do; and then the administrative 
personnel, pharmacists, whatever, are doing only the things 
that they have to do.
    The place where we have begun doing this first is in our 
primary care clinics, and as the secretary mentioned, they are 
called Patient Aligned Care Teams. We are moving this now into 
specialty areas, so that we are doing this in orthopedic--some 
orthopedic, ophthalmology, and other subspecialty clinics and 
cardiology. It is the way that we have to operate and it is the 
way that things need to be done in the operating room, as well 
as any of the other procedure rooms. So, we absolutely agree 
with you and we are embarked on trying to do that.
    Mr. Wenstrup. Thank you.
    And, as I did that day, I, again, offer you my time to 
participate in that process as a physician and surgeon who has 
had private practice, as well as serving with DoD, and it might 
help to build a bridge between us and you.
    Dr. Petzel. That would be great. We would welcome that.
    Secretary Shinseki. Congressman, I would just add, and so, 
the value of the physician's time in terms of being able to see 
patients, if you think about the network of health care we 
provide in very rural areas, the last thing we need to do is 
put that physician on a road trying to get someplace to see a 
patient. And that is why our investments in telehealth and 
telemedicine, about $460 million in this budget, is intended to 
allow patients to come to the nearest VA facility. If the 
specialist is not there, then this system hooks them up to the 
specialist they need to see, at least get that initial consult 
going, and then we can decide from there what needs to happen 
next.
    Mr. Wenstrup. Thank you. I yield back my time.
    The Chairman. Ms. Kirkpatrick?
    Mrs. Kirkpatrick. Thank you, Mr. Chairman.
    Thank you, Secretary Shinseki, for your appearance today 
before the Committee, and for your transformational vision for 
the VA.
    My question is: Does this 2014 budget reflect all of the 
resources you need to continue and achieve that transformation 
within the VA?
    Secretary Shinseki. Congresswoman, thanks for that 
question.
    We have described, as I said earlier, a very bold and 
ambitious plan. It is a plan that has been resourced and it is 
one that will give us the 2014 objectives that we need to 
deliver on leading to 2015 and on out, but it does give us the 
resources we need.
    Mrs. Kirkpatrick. Do you have any concerns or expectations 
that you are going to need additional funding to meet those 
goals, especially your goal to reduce the backlog by 2015?
    Secretary Shinseki. I will say as I said earlier, the plan 
that we laid out is an assumption-based plan, that we know the 
variables out there. If there is a change, a sudden surge in 
the arrival of patients, we will have to adjust.
    What we do know, you know, from the Department of Defense, 
is over the next five years, up to a million servicemembers 
will be leaving the military, and so we have been given an 
understanding that there will be a flow here, as opposed to a 
spike on day one or spike on day last, and so we have 
accommodated that flow. If that changes, then we will have to 
readjust the plan, and if needed, we will come back.
    Mrs. Kirkpatrick. That is my concern. That is a lot of 
veterans to process in a system that already has backlogs, and 
so I really have a concern about that, but we will be watching 
that process, but obviously, you have factored that into your 
budget and you are making those planning changes.
    Secretary Shinseki. And all the more reason that we have to 
automate now. We are in paper; we have been in paper too long; 
we still receive paper. And all of this effort is not just to 
automate our systems, but to get others to provide us digits so 
that we have a seamless handoff of our veterans.
    Mrs. Kirkpatrick. Thank you.
    Thank you, Secretary, and I yield back.
    The Chairman. Ms. Walorski?
    Mrs. Walorski. Thank you, Mr. Chairman.
    Mr. Secretary, good to see you again.
    And I understand your testimony, you had spoken about since 
2009, the VA has opened an additional 57 community-based 
outpatient clinic, CBOCs, and as you are aware, a new CBOC is 
planning to open in my district in 2015. Since I saw you last, 
my understanding is that that project is behind.
    Is there any kind of a status report that you guys can 
provide to the veterans in my district as to what the status is 
of that CBOC?
    Secretary Shinseki. I would like to give you the best 
answer I can. I am going to call on Dr. Petzel here, to give 
you exactly the status of that CBOC.
    Mrs. Walorski. Okay. Thank you.
    Dr. Petzel. I have information about the South Bend CBOC--
--
    Mrs. Walorski. Correct.
    Dr. Petzel. --and that is, as I understand it--thank you--
that, as I understand it, did have a delay, but as I am told, 
it is back on pace. I can't give you a date when it is opened, 
but we will get back to you and see if we could do that.
    Mrs. Walorski. I appreciate that. Thank you very much.
    And in that getting back to us, is there some kind of 
timeline where we can expect to know the status report?
    Dr. Petzel. Oh, immediately.
    I will have someone get back to you within the next week at 
the latest.
    Mrs. Walorski. Great. Thank you very much.
    Thank you, Mr. Chairman. I yield back my time.
    The Chairman. Thank you very much.
    Mr. Ruiz?
    Mr. Ruiz. Thank you, Mr. Chairman.
    Thank you, Secretary Shinseki, for all the work that you 
are doing. It is great to see you again.
    I just want to, initially, before I ask my question, 
follow-up with Dr. Wenstrup's comment to ensure that the 
paperwork that physicians have to do, in general, is not only a 
problem in the VA, but in the private sector, and I think that 
looking at the private sector would be a good way of looking at 
how we can cut down on the amount a physician spends on the 
paperwork.
    One of the things we have done in the emergency 
department--for example, as you know, I am an emergency 
medicine physician--is to use scribes and we utilize oftentimes 
pre-med students in the VA system. It could be medics who can 
deal with the paperwork, the forms, that have been trained. 
That will allow physicians more time to spend with the patients 
as the goal should be. Now, so I am hoping that the scribe 
model would possibly be under the PACT team that will 
specifically address the paperwork and the forms that the 
physicians have to fill.
    In terms of my question, I want to talk about the claims 
backlog, and I know that this is a very complicated system and 
I know that in order to address this and address the 
efficiency, we break it down into different parts of what a 
veteran has to go through from initially understanding what 
their benefits are to what they want to claim, and then to the 
end result.
    In that systemic process, what, in your opinion, is the top 
one or two bottlenecks in the system that takes a long time?
    Ms. Hickey. Thank you, Congressman Ruiz.
    The biggest bottleneck is collecting the evidence, finding 
the evidence. Whether that is--basically three big pieces we 
need: we need the DoD medical records while they were in 
service; we need the DoD personnel records for the character of 
their service, awards, declarations, DD-214 kinds of forms that 
let us know dates and times and how they served and whether 
that qualifies; and we need private medical records. We also 
need VHA medical records, but that is the easiest thing for us 
to do. We literally have access directly in VBA right into the 
medical record. We can look at it, bring that data forward, use 
that instantaneously. It is those other three parts are the 
parts that make it very difficult to do.
    Mr. Ruiz. Thank you.
    Secretary Shinseki. And that is why there is very 
significant effort to connect, digitally connect, VA to DoD for 
personnel records, for medical health records. Right now we 
rely on veterans to provide so much of this information and 
they shouldn't have to carry that burden. We ought to be able 
to do this as a department and that is what we are working on.
    Mr. Ruiz. That is a very good point.
    I have spoken to some veterans in the district that I am 
from, the 36th in California by Palm Springs, Coachella Valley, 
and some of them--most of them are seniors and they have very 
difficult time getting to their hearings for their claims in 
front of the VA Board due to many reasons, financial, 
transportation, et cetera.
    Let me ask you: Is video conferencing an efficient way of 
decreasing that burden on our seniors?
    Secretary Shinseki. I am going to ask Secretary Hickey to 
add some detail here, but the virtual hearings are a way that 
we are able to cut down on travel and also increase efficiency 
and decision-making. And when we review the face-to-face 
hearings and what happens on the virtual hearings, the results 
are comparable; there is no disadvantage. And so, this would be 
our preference to resolve the issue you described, but the 
veterans have a choice and I know that some would prefer to be 
face-to-face and we accommodate when that request is made.
    Ms. Hickey. Congressman, the only thing I will add is that 
our partners, as in the entire claims process, are critical to 
our ability to assist, especially, our elderly patients--I mean 
our elderly veterans and their survivors and family members. 
So, we do work very closely with our VSOs and our state county 
service officers to facilitate those VTC exams and we are 
seeing a very large increase in willingness to take that 
process and so we are seeing that as a good thing.
    The other thing that I would just share with you is that 
about 40 percent, right now, of our Board's efforts to do the 
teleconferencing are done via--I mean to do the face-to-face 
with the appeals process are done, via the teleconference--
tele--VTC environment.
    Mr. Ruiz. Thank you very much.
    I appreciate all the work that you do, and I yield back my 
time.
    The Chairman. Thank you very much.
    Mr. Secretary, I know I promised we would have a second 
round of questions, but we are running out of time and I know 
that you have been here for an hour and a half and when I say 
running out of time, I mean legislative time. We have all the 
time in the world to help you in solving the problems that 
exist out there today, but a lot of the Members have expressed 
a desire to send additional questions. We will try and bring 
them all together into one document, if we can, to make it a 
little bit easier for you and your staff to be able to respond. 
We appreciate you being here this morning.
    Secretary Shinseki. We will do that.
    Thanks, again, Mr. Chairman, for this opportunity to be 
here to present our budget. We appreciate the past support and 
we look forward to your support on this one as well.
    Thank you very much.
    The Chairman. Thank you very much, and you are now excused.
    And as the first panel is excused, I want to invite the 
second panel to start making their way forward, if you will, 
and we will wait for introductions until folks are seated at 
the table.
    Thank you very much.
    We will welcome the second panelists to the table.
    With us this morning, Jeffrey Hall, Assistant National 
Legislative Director for the Disabled American Veterans; Carl 
Blake, National Legislative Director of the Paralyzed Veterans 
of America; Diane Zumatto, National Legislative Director of 
AMVETS; Ray Kelley, Legislative Director for the Veterans of 
Foreign Wars of the United States; and Mr. Louis Celli, 
Legislative Director of the American Legion.
    Your complete written statements will be made a part of the 
hearing this morning.
    Mr. Celli, I would say we didn't receive the Legion's 
testimony until less than an hour before this hearing. That has 
never happened that I am aware of, and so hopefully we won't 
have to--it is very difficult when we get the President's 
budget late and then we get comments from organizations late. 
It makes it very difficult for Members to be able to absorb the 
testimony that you are giving here today.
    So, again, your complete written statements will be made 
part of the hearing record.
    And, Mr. Hall, you are recognized for five minutes.

  STATEMENTS OF JEFFREY HALL, ASSISTANT NATIONAL LEGISLATIVE 
  DIRECTOR, DISABLED AMERICAN VETERANS; CARL BLAKE, NATIONAL 
 LEGISLATIVE DIRECTOR, PARALYZED VETERANS OF AMERICA; DIANE M. 
  ZUMATTO, NATIONAL LEGISLATIVE DIRECTOR, AMVETS; RAY KELLEY, 
  LEGISLATIVE DIRECTOR, VETERANS OF FOREIGN WAR; LOUIS CELLI, 
           LEGISLATIVE DIRECTOR, THE AMERICAN LEGION

                   STATEMENT OF JEFFREY HALL

    Mr. Hall. Thank you, Mr. Chairman.
    Chairman Miller, Ranking Member Michaud, and Members of the 
Committee, on behalf of DAV, I am pleased to be here today to 
present recommendations of the Independent Budget for fiscal 
year 2014 related to veterans' benefits and the Veterans 
Benefits Administration.
    This year's IB contains numerous recommendations to improve 
benefits programs and the claims processing system; however, I 
will be highlighting only a few of the more critical ones.
    Mr. Chairman, with VBA committed to processing all 
disability claims in less than 125 days with a 98 percent 
accuracy by 2015, they have their work cut out for them. VBA is 
currently rolling out new organizational models and practices 
and continuing to develop and deploy new technologies almost 
daily. In the midst of the massive transformation it can be 
hard to get or keep the proper perspective to measure whether 
they will achieve their ambitious goals.
    So, the question is: Will transformation be completely 
successful?
    The simple answer is: We still think it is too early to 
tell, but we do believe that VBA is on the right path and has 
made sufficient progress to warrant continued support of the 
current transformation efforts.
    Mr. Chairman, now is not the time to stop or change 
direction and Congress must continue to perform aggressive 
oversight particularly of the new IT programs, but must also 
continue to provide sufficient funding to complete the 
transition away from paper.
    Additionally, in the middle of the comprehensive 
transformation, including the new IT system, which changes the 
roles and responsibilities of VBA's employees, it is difficult 
to determine whether or not staffing levels are or will be 
adequate to handle the workload once these changes are fully 
implemented. For that reason, the IB is not recommending a 
specific staffing increase for claims processing in fiscal year 
2014; however, we are recommending modest staffing increases 
for the Board of Veterans' Appeals, as well as the Vocational 
Rehabilitation and Employment Service.
    Although the board has been authorized to have up to 544 
full-time employees in fiscal year 2011, its appropriated 
budget fell short and could only support 532 full-time 
employees that year. In fiscal year 2012, that number was 
further reduced to 510. And at present, the board's fiscal year 
2013 budget may be able to support as many as 518 full-time 
employees; however, based on an expected workload increase for 
fiscal year 2014 through conversations with the board, even 
while adjusting for the projected productivity gains, the 
Independent Budget VSOs recommend that the board be provided 
funding for at least 544 full-time employees for fiscal year 
2014 in order to reduce its backlog and reduce the wait times.
    Also in fiscal year 2012, VA's Vocational Rehabilitation & 
Employment Program, also known as VetSuccess Program had 
121,000 participants, a 12 percent--12.3 percent more than in 
fiscal year 2011 and VRE anticipates a 10 percent workload 
increase for both fiscal year 2013 and 2014.
    To meet this need, we are recommending that the VRE be 
provided funding for approximately 230 additional counselors in 
fiscal year 2014 in order to meet the rising workload demand 
and reduce their counselor-to-client ratio down to their stated 
goal of one counselor for every 125 veterans.
    Mr. Chairman, in the past year, there has been much 
discussion about replacing the current CPI formula used for 
calculating the annual Social Security COLA with a new formula 
commonly called the chained CPI in an attempt to lower the 
Federal deficit by reducing the rates paid to Social Security 
recipients. Since the Social Security COLA is also applied 
annually to the rates of VA disability compensation and DNC, 
this would also mean a reduction in veterans' benefits. The IB 
VSO has urged Congress to reject any proposal to use the 
chained CPI or any other scheme that would attempt to reduce 
the Federal deficit on the back of America's wounded heroes.
    And finally, Mr. Chairman, the IB VSOs call on Congress to 
correct some longstanding injustices in how certain disabled 
veterans and their surviving spouses are treated under current 
law. Congress must finally repeal the inequitable requirement 
that the veteran's military longevity retired pay be offset by 
the amount equal to disability compensation awarded to disabled 
veterans rated less than 50 percent; the same that exists for 
those rated 50 percent or greater.
    And finally, Congress must finally repeal the inequitable 
offset between DIC and SBP. There is no duplication between 
these two benefits; they are separate and distinct.
    And lastly, Congress should enact a legislation to enable 
survivors to retain their DIC on remarriage at the age of 55 
for all eligible surviving spouses.
    This concludes my statement. I will be happy to answer any 
questions.

    [The prepared statement of Jeffrey Hall appears in the 
Appendix]

    The Chairman. Thank you very much, Mr. Hall.
    Mr. Blake?

                    STATEMENT OF CARL BLAKE

    Mr. Blake. Thank you, Mr. Chairman.
    On behalf of the co-authors of the Independent Budget, I 
would like to thank you for the opportunity to be here today to 
testify.
    I will say up front that we certainly believe that the 
Administration is committed to delivering timely, quality 
health care benefits to veterans. That being said, an increase 
in funding does not automatically lead to the assumption that 
sufficient funding is being provided.
    I will note that the Independent Budget released our 
recommendations back in February and for the first time we 
included advanced appropriation recommendations for fiscal year 
2015 for health care. I am going to limit my comments to the 
health care funding, in particular, to the 2015 advanced 
appropriations.
    Just based on a quick analysis of the Administration's 
numbers released yesterday, you will see that they provide for 
approximately $1.1 billion in total medical care dollars from 
what was just recently enacted for 2014 to 2015. Certainly, 
that is not a small amount of money, but I would offer that we 
don't believe that $1.1 billion is sufficient to meet even 
current services increases.
    Medical care inflation in general trends about three 
percent right now. One point one billion dollars is about 1.9 
percent, so I would question whether the increase that they 
projected would even meet current services. That is without 
even considering the fact that they, once again, reduced 
spending or planned to reduce spending in medical facilities, 
particularly at the expense of non-reoccurring maintenance. And 
I won't talk about construction issues. I know my colleague 
from the VFW will get into that.
    We reviewed their utilization and I think there is some 
sound reasoning in all of the utilization. I would point to one 
concern that we have, and we have raised this concern in the 
past about OIF, OEF, and OND utilization. I would note that 
they project for 2014 and 2015 the same exact number for both 
years.
    My immediate concern would be that we are all aware of the 
status of the military funding as it has projected a plan to 
not only start withdrawing from Afghanistan in 2014, but also 
to start to draw down the military, which is actually going on 
right now, and we believe, certainly, that will have some sort 
of an impact on utilization in the VA.
    A couple of particular concerns that we have, first with 
collections. We have voiced this concern many times in the past 
as well. Ultimately, the VA continues to over-project and 
underperform. I will use fiscal year 2013 as an example.
    Last year they projected $2.9 billion, approximately, in 
collections. You now see from their budget request release 
yesterday, they are projecting about $2.8 billion, about $125 
million. I know that is small change in the context of a 
multibillion dollar budget, but our concern would be that what 
is going to fill the gap now left by the $125 million in 
collections that they don't achieve?
    Ultimately, that is dollars that need to be found 
somewhere, because that $2.9 billion was the basis for the 
assumption of providing care in the coming fiscal year.
    We would draw your attention to the fact that their 
projections for this year and next year are around $3.1, $3.2 
billion. It will be interesting to see if they can even come 
close to achieving those projections. I would suggest that 
their track record on collections would suggest that they 
cannot.
    Another concern that we have raised over and over again is 
with proposed savings and management improvements. In fact, it 
specifically says in the appendix for the VA budget this year, 
that due to projected management improvements that they would 
achieve in 2013, 2014, and 2015, that they will be able to 
reduce the need for appropriations in 2014 and 2015. It is not 
clear how much they have reduced their projection for needed 
appropriations.
    I will suggest that in their budget they show $482 million 
in proposed savings for 2014 and 2015 and $1.3 billion in 2014 
and 2015 for operational improvements. I don't know what 
portion of those two dollars--two dollar figures are factored 
into that reduction in appropriations, but those two together 
equal a large sum of money.
    I will draw your attention, also, to some questions we have 
about the Affordable Care Act. The VA does mention that in 2014 
they project a new cost associated with implementation of the 
ACA, about $85 million, which suggests that their assumptions 
are that between the number of veterans leaving the system and 
coming in is probably a net, not a large effect. Interestingly, 
though, for 2015, they project no new dollars needed for the 
implementation of the ACA. I would be curious to know what the 
basis for that is exactly.
    We have concerns about funding for research. For the fourth 
year in a row, research funding is essentially being kept flat. 
I know it is like a three or four million dollar increase over 
last year. That is not substantial; that is essentially flat.
    Lastly, Mr. Chairman and Mr. Michaud, we would like to 
thank you for the introduction of H.R. 813. The four co-authors 
of the Independent Budget all support your legislation. We hope 
the Committee will move that legislation pretty quickly.
    I would also support the legislation introduced by Ms. 
Brownley, H.R. 806, that would extend the GAO requirement for 
reporting on advanced appropriations.
    And with that, Mr. Chairman, I would like to thank you and 
I would be happy to answer any questions you may have.

    [The prepared statement of Carl Blake appears in the 
Appendix]

    The Chairman. Thank you very much, Mr. Blake, also for your 
information.
    In two weeks, the Full Committee is going to have a hearing 
on the impact of the ACA on VA, so we would welcome you to 
participate and be here to hear the testimony during that 
hearing.
    Ms. Zumatto, you are recognized for five minutes.

                   STATEMENT OF DIANE ZUMATTO

    Ms. Zumatto. Thank you, Mr. Chairman.
    I appreciate the opportunity to be here today to share the 
recommendations from the Independent Budget for fiscal year 
2014.
    In light of the ongoing fiscal challenges facing our Nation 
and the growing demands for VA services, the IB VSOs call on 
Congress and the Administration to make it their priority to 
ensure that the VA continually receives sufficient, timely, and 
predictable funding. It is unfortunate that the 
Administration's funding recommendations for the VA in fiscal 
year 2014, as well as the advanced appropriation 
recommendations for 2015, have been delayed by almost two 
months and the IB VSOs are greatly concerned about how VA 
program funding may be impacted going forward.
    Additionally, the ongoing breakdown in the appropriations 
process is a major concern to the IB VSOs and will most 
certainly have a negative effect on all VA operations.
    In fiscal year 2014, IB covers a myriad of veteran-related 
issues and makes numerous recommendations to improve veterans' 
benefit programs and the claims processing system; however, I 
will focus my remarks today on employment.
    Some of the reasons for the persistently high unemployment 
rate for veterans can be found in a June 2012 study done by the 
Center for a New American Security on employing America's 
veterans, and it examined the effect of military service on 
former servicemembers as it relates to their employment 
opportunities.
    And while there are many positive reasons listed in the 
report for hiring veterans, it also noted that there were 
several challenges facing veterans when they are out seeking 
employment, and the focus of that was they have difficulty in 
skill translation; there is a problem of negative stereotype; 
there is the skill mismatch; there is the fear of employers, 
that if they hire national guard or reserve troops that they 
are going to be deployed; there is difficulty in acclimation 
and many employers say they just can't find veterans.
    In considering the many challenges that are facing the 
transitioning veterans, it appears that the toughest barrier 
for them right now is employment and it seems abundantly clear 
that transitioning veterans seeking employment, especially 
those with health issues, face some unique obstacles, including 
the process of securing the licenses and credentials required 
by some professions. The issue of veteran licensing and 
credentialing continues to be of concern to those within the 
military and veterans' communities and is made especially 
difficult for veterans due to its highly parochial nature; the 
complexities within the civilian credentialing system itself; 
the fact that each of the military services has its own unique 
training and credentialing programs; the need to overcome real 
or perceived gaps in military training, experience and 
education; the ambiguity about which of the roughly 4,000 
different credentials are most important to civilian employers; 
and perhaps most significantly, many military occupations, 
unlike their civilian equivalents, have no credentialing 
requirements.
    Military service and training are provided at both the 
state level for members of the national guard or the Federal 
level for active duty and reserve personnel. In light of this, 
a massive collaboration between DoD, VA and DoL, as well as the 
Department of Education, and the individual states, will be 
required.
    The IB VSOs applaud the fact that the Administration has 
offered its support to ensure that servicemembers leave the 
military career-ready by proposing the following: increased 
veteran and service-disabled veteran tax credits, challenge the 
private sectors to commit to hiring or training veterans, and 
the career-ready military, which calls for DoD and VA to 
leave--to lead a joint task force with the White House economic 
and domestic policy teams and other agencies to develop 
proposals to maximize the career-readiness of all 
servicemembers, including a reverse boot camp and an initiative 
to deliver enhanced job search services to transitioning 
veterans through American job centers, including improved TAP 
workshops.
    That concludes my testimony this morning and I will be 
happy to answer any questions.

    [The prepared statement of Diane Zumatto appears in the 
Appendix]

    Mr. Benishek. [Presiding] Mr. Kelley, you are now 
recognized for five minutes.

                    STATEMENT OF RAY KELLEY

    Mr. Kelley. Mr. Chairman, Mr. Michaud, Members of the 
Committee, thank you for the opportunity on behalf of the two 
million members of the Veterans of Foreign Wars and our 
auxiliary to be here today.
    As a partner of the Independent Budget, the VFW is in 
charge of the construction portion, so I will limit my 
testimony to that. For the past few years, I have testified on 
how transparent the VA's Strategic Capital Investment Plan, or 
SCIP, has been in identifying gaps in safety, utilization, and 
access and how this plan outlined to accomplish--to close those 
gaps within a decade. I still believe that SCIP is an 
exceptional tool and is based on industry models and best 
practices.
    At the same time that we praise SCIP, the IB called for 
funding levels that would keep pace with VA's own model to 
close these existing gaps within ten years. This model has not 
been met. In three years, the level of funding for major 
construction projects has fallen from $1.2 billion in fiscal 
year 2010 to $532 million in fiscal year 2013, and now the 
Administration is requesting only $342 million for fiscal year 
2014.
    The Independent Budget is requesting $1.1 billion to fund 
major construction projects in fiscal year 2014. This is 
nowhere enough to put VA back on track, to close all major 
construction gaps within ten years, but it is an amount that 
can be responsibly invested within one fiscal year. This 
funding request does address the IB's greatest infrastructure 
concern, which is safety, specifically, seismic deficiencies.
    There are currently six projects on VA's fiscal year 2014 
top 20 major medical facility projects list that are seismic 
safety projects. All of these projects have been initially 
funded, one as early as fiscal year 2009, but none have been 
funded in this year's budget proposal. Only one project in the 
2014 top 20 list is receiving any funding at all, and the 
VA's--to the VA's credit, this project will replace seismic 
deficient buildings with a new facility.
    More must be done. The President has requested in his 
larger budget proposal that $50 billion be spent on capital 
infrastructure. The IB suggests that a discussion take place to 
use some portion of this $50 billion to close the seismic 
safety gaps within VA.
    What is more important, repairing potholes and building 
bike paths or ensuring that our veterans and VA staff are 
protected from the horrors that took place 42 years ago in 
Sylmar, California, when a 6.6 magnitude earthquake collapsed a 
VA hospital killing 49 and costing $2.8 billion in today's 
dollars to fix those damages?
    The IB is also concerned about the current state of capital 
leasing. Prior to 2012, the Congressional Budget Office treated 
major capital leasing and short-term leases for already-
existing facilities or renewal of leases. In evaluating the 
cost of VA major construction authorization at the end of 2012, 
CBO changed their perception of these leases. Under the new 
rules, VA will have to fund all major leasing projects like 
CBOCs, treatment centers, and research facilities in the first 
year of that lease.
    Under current VA budgeting practices, this is impossible. 
The IB understands that this Committee and VA are exploring 
every way for VA to continue the pre-2012 leasing practice 
while staying within the current budget rules; however, if a 
solution cannot be found, the IB partners recommend that 
Congress should forego its own rules to ensure these leases can 
move forward and without further delay while a long-term 
solution is found.
    In closing, the IB would like to thank VA for requesting 
funding for activation costs associated with new medical 
facilities. This will take undue pressure off of VA to find the 
money necessary to make new facilities operational once they 
have been completed.
    Mr. Chairman, this concludes my remarks and I look forward 
to any questions you or the Committee may have.

    [The prepared statement of Ray Kelley appears in the 
Appendix]

    Mr. Benishek. Thank you, Mr. Kelley.
    Mr. Celli, you are now recognized for five minutes.

                 STATEMENT OF LOUIS CELLI, JR.

    Mr. Celli. The American Legion has spent thousands of hours 
intimately working with the Department of Veterans Affairs. We 
appreciate their willingness to be transparent while reviewing 
their portion of the budget just last night and we applaud the 
President's support and commitment to increasing VA funding in 
areas that will help eliminate the growing backlog, as well as 
care for our wounded veterans.
    Chairman Miller, Ranking Member Michaud, Members of this 
Committee, on behalf of Commander Koutz and the two and a half 
million members of the American Legion, we welcome this 
opportunity to comment on the Federal budget and specific 
funding programs for the Department of Veterans Affairs.
    In October of last year, national commander, Jimmy Koutz, 
provided the Committee the American Legion's guidance for a 
robust Department of Veterans Affairs' budget that adequately 
provides for the health care and benefits for veterans of all 
wars during this period of difficult financial times.
    As thousands of troops return from deployments from 
Afghanistan and elsewhere in the world, the United States 
shifts its policies in Iraq and Afghanistan, thus producing a 
new national security focus. The American Legion reminds the 
Committee that the national security change does not change the 
fact that the veterans of these wars, as well as prior 
conflicts, must be taken care in the aftermath of these wars 
and this care will extend for these veterans and their 
caregivers for the next 60 years.
    While grateful for prior VA funding, the American Legion 
remains vigilant to ensure the VA is not going to be 
shortchanged of the funding that it truly needs. The lack of 
appropriate funding will endanger veterans' care and benefits.
    The American Legion has for years been testifying before 
the Congress of these United States reminding them that the 
cost of war, especially prolonged war, is expensive and that 
the true costs are only realized decades after the war is over. 
Last month, the Harvard Kennedy School issued a report that 
projected the total costs of these current conflicts to cost 
between four and six trillion dollars.
    The American Legion is encouraged with the proposed 
increases in the areas of claims processing, electronics 
records development, and medical care, and believe this is a 
step in the right direction.
    Lastly, as this Committee just pointed out earlier and my 
colleagues have highlighted, VA receives sufficient 
appropriations to continue to fund and operate, at least, 
facilities in 2012, but in 2013, the appropriations for these 
same facilities was eliminated due to a scoring change 
initiated by the Congressional Budget Office.
    As a result of the Congressional Budget Office's adjustment 
in scoring review, Congress refused to introduce a fiscal year 
2013 appropriations required to keep these community-based 
centers opened. As these leases now become due, there are 15 
major medical facilities that will be forced to close unless 
Congress acts quickly to provide the appropriate funding to 
these centers.
    The American Legion urges Congress to fund these centers 
immediately and continue to provide the medical support to 
these veterans in these remote areas. Based on the very short 
time that we have had to review this budget proposal, we 
prepared our preliminary review, which is reflected in our 
written testimony, and we look forward to answering any 
questions that the Committee may have.
    Thank you.

    [The prepared statement of Louis Celli, Jr. appears in the 
Appendix]

    Mr. Benishek. Thank you, Mr. Celli.
    We will now begin the first round of questions. I guess I 
will start.
    Mr. Hall, on behalf of the Independent Budget co-authors, 
you testified that we believe that there has been sufficient 
progress to merit continued support of the current 
transformation effort.
    Can you demonstrate some of these evidence of projects' 
progress? I mean, I am frustrated, as you can probably listen 
to my questions, you know, I have been frustrated by changing 
goals. Tell me what you see as a positive.
    Mr. Hall. Well, there are several things--thank you for the 
question--there are several things that, I guess, but it is not 
certainly inclusive of others that I could mention, but simple 
things like the DBQ process, okay, which didn't exist, which is 
helpful to the discovery of evidence in a claim; QRTs, quality 
review teams, that has been a positive step in the right 
direction towards accuracy; the e-benefits; the stakeholder 
enterprise portal.
    These are all really good things that are going to matter 
to the system. All of them are in motion and still being worked 
out at the present time, so we certainly understand the 
frustration, but these are things, what we feel, are positives 
in the right direction. As well as the Veterans Claims Intake 
Processing, the VCIP, for the scanning, those are all things 
that--when I say sufficient progress.
    Mr. Benishek. Well, thanks.
    I want to get a little input from you all about my question 
to Mr. Shinseki about, you know, what incentives are there for 
the administrators of the program to fulfill these goals.
    Do any of you have any input how this can be better managed 
so we don't have a moving goal post all the time so that, you 
know, the projects that the VA starts, you know, get finished 
on time or that people are responsible for the failure of 
getting things done on time? Does any one of you have an idea 
as to how to better manage that?
    I mean, you have been involved with this probably longer 
than I have on an individual basis in dealing with that 
frustration, so just take a minute to see if you could each 
give me a comment as to how I can change the way the VA works 
to try to make it better.
    Mr. Hall. Well, I will start and just simply say that, yes, 
VSOs enjoy an open, collaborative effort with VA at different 
levels. Given the different types of programs that I 
highlighted in my previous comment, service organizations or 
stakeholders were able to provide that input, number one. So, 
do they listen to it?
    Well, they certainly listen to a lot of the 
recommendations; more so, it seems to me after 20 years of 
working in this business, that this Administration is more open 
towards receiving recommendations and not only receiving them, 
but actually implementing them.
    Now, when it comes to, I guess, your question of 
accountability if there is a problem, they don't normally ask 
us----
    Mr. Benishek. I know they are not going to ask you, but I 
am asking you.
    Mr. Hall. Well, if we provide them feedback and say, You 
have to hold these folks accountable, that is something that is 
a little bit elusive at this particular time, Mr. Benishek.
    Mr. Benishek. Yeah, I know that.
    Mr. Blake, do you have any comments?
    Mr. Blake. Mr. Benishek, the first thing I want to say is, 
I want to echo the comments of Mr. Hall. We were fortunate to 
have the opportunity to participate in VBMS as they are working 
out the bugs in that, too, and I think having met with the head 
of our benefits department on a number of occasions, he feels 
comfortable that they are really heading in the right direction 
with VBMS in particular.
    To your actual question, when you asked the question 
earlier, I leaned in and I told my colleague, I said it sounds 
like the question ought to be: Can you fire a Federal employee?
    And I am not sure that is a--as hard as it is to hire a 
Federal employee, it is probably equally as hard to fire a 
Federal employee--and I am not suggesting that that is what 
needs to happen--but it certainly points to the difficulty of 
accountability through sort of a hard-knocks approach.
    I am not suggesting that, you know--I don't envy any of the 
senior leadership of VA, because I think--I can't imagine the 
tasks that they are responsible for and particularly for 
General Hickey. I mean, that might be the toughest job in 
Washington from my opinion given the responsibilities placed on 
her and what the expectation and outcome is supposed to be.
    It is certainly not an easy answer. I mean, I am not 
suggesting that anybody should be punished any particular way. 
There certainly should be incentives and disincentives in some 
fashion.
    Mr. Benishek. Well, that is what I am thinking. It just 
seems to me that there should be better accountability and 
better reward--for the managers, I am not talking about the 
employee out, you know, delivering the service--but the 
managers, the way the system is run should be more, you know, 
accountable, because I see Mr. Shinseki's job as very tough.
    Does anybody else have a comment while I still have a 
minute?
    Mr. Kelley. I will echo what they said as well. The VFW 
would be very open to furthering the discussion of how to do 
that accountability. We think it is very important to have 
leaders held accountable to----
    Mr. Benishek. Well, I will look forward to some 
conversations in the office. Thank you.
    Mr. Celli. And I just wanted to say that, you know, with 
the multitude of programs that the Department of Veterans 
Affairs has, there is a lot of work to be done. The fully 
developed claims project that the American Legion is involved 
with, with the Department of Veteran Affairs is a result of the 
collaboration that the VA has had with the VSOs. We think that 
that transparency needs to continue. We feel comfortable that, 
at this time, the Department of Veterans Affairs has opened and 
welcomed us in to try to work with us on some of their 
problems.
    With regard to oversight, that is clearly your area.
    Mr. Benishek. Thank you.
    My time is up.
    Mr. Michaud?
    Mr. Michaud. Thank you very much, Mr. Chairman.
    And, once again, I would like to thank the panel.
    When you look at accountability and part of that is to make 
sure that the employees know what the clear standards are, the 
metrics that they are going to be held accountable to and for, 
so I want to follow-up on what Dr. Roe had mentioned during the 
first panel when he looks at the survivors' benefits and the 
widow's claim and he is absolutely right. The backlog has 
increased tremendously, which you wouldn't think it would, 
particularly with those particular types of claims.
    And my big concern is, actually, as you know, Togus is a 
high-performing RO. We used to do the pension claims at Togus, 
however, VA decided to centralize that in Pennsylvania and, 
unfortunately, since it went to Pennsylvania, all we are 
getting are complaints now from our veterans in Maine and that 
is concerning. And I think it gets back to training, making 
sure that employees are trained properly. It comes back to the 
turnover rates, whether or not you have an RO that really has a 
high turnover rate in those particular facilities.
    So, my question for each of you is: What do you think the 
VA should do as far as metrics in dealing with the backlog? As 
you noticed my first question with the secretary is, you know, 
you have a claim that could have several medical conditions, 
another claim that actually might have 20 or so, compared to 
one that might have five. Do you think that we ought to be 
looking differently at how we calculate the performance of an 
employee and whether that is a better standard to hold them 
accountable for it?
    I guess I would ask each one of you if you could do a quick 
yes or no. Should we do it the way it is done now or should we 
focus on medical conditions?
    Mr. Hall. There should be some changes in the way they do 
that, and to answer your question a little bit more, if you are 
counting a claim that has a claim, but that contains eight 
contentions in that, you know, in the past it was or currently 
an error in one of those issues is an error for the claim.
    If you are going to change that and make that metric, you 
know, each contention, now, is worth, you know, where the error 
is counted in each one of those contentions, but the overall 
claim isn't, those are things that they need to be looking at, 
and I know that the VA is looking at different ways. But, in 
doing so, the employee has to know exactly what it is that, you 
know, that they are responsible for or the complexity of it.
    What I am getting at is if you are going to score an 
employee and you have a senior rater that is getting inherently 
the more difficult or more complex claims, you know, the 
special-ops claims type issues, I can't see how VA is going to 
be able to credit their employees or give them credit for their 
daily workload without changing how they score that.
    Mr. Blake. I am certainly not the expert on the benefits 
side and I would like to take your question and spend a little 
bit of time talking to the head of our benefits department 
about that, but it is my understanding that the VA is looking 
at--and I think Mr. Hall referenced this--is looking at the way 
that they view a claim.
    We complained in the years past about the numbers game 
associated with claims processing and finishing a claim is 
getting a one for that and so it puts an emphasis on just 
moving claims quickly, which leads to getting a lot of the easy 
stuff done quickly and the harder stuff being left behind, and 
it is my understanding that they are either looking at or maybe 
even moving towards an idea where if a claim has ten issues in 
it, each issue is scored individually for a credit as either a 
positive or a negative.
    And we think that is probably the right way to go. We have 
always, I think, sort of argued that that made more sense 
because you have created a sort of disincentive to do the hard 
work if you are only going to get one credit for a ten-issue 
claim versus one credit for a four-issue claim.
    Mr. Kelley. Yes, there needs to be changes. Carl and Jeff 
pretty much summed it up, so I will return your time.
    Mr. Celli. Okay. We agree, and yes, the American Legion has 
actually submitted a comprehensive proposal to the Department 
of Veterans Affairs just last week, which works similarly to a 
checkbook system to where the claims are rated based on the 
difficulty and actually negative points are given when the 
claim is adjudicated improperly.
    Mr. Michaud. Could you also provide that to the Committee 
as well?
    Mr. Celli. We would be happy to.
    Mr. Michaud. Thank you.
    Thank you, Mr. Chairman.
    Mr. Benishek. Thanks, Mr. Ranking Member.
    Mr. Walz?
    Mr. Walz. Thank you, Mr. Chairman.
    I appreciate it.
    Thank you all for being here, as always, your services and 
most importantly, thank you for being there every minute of the 
day for decades to make sure we get this right and bring this 
expertise to it. I am grateful in looking at the IB, some of 
those things.
    And I know, Mr. Hall, it is sometimes hard to find the 
positives in things that are very frustrating, especially in 
the backlog of claims, but I think it is important that we 
understand that it is the outcome that matters, effectiveness 
is what matters, and we have got to look at this.
    We all want it fixed, and there is a lot--as I have said I 
am glad they are there. Now they have recognized this as an 
issue and now they want to get it fixed, but we have to do it 
in a manner that works, so I am very appreciative of you doing 
that.
    And I think Mr. Benishek is right, this issue of 
accountability, I think we all want it. When we figure this 
out, let us know so we can apply it to this Congress, then we 
will get things going.
    But I have a specific issue--again, this comes out of your 
critical issues report--and I am not sure which one of you 
wants to take this. It is just an issue--it was on channel--or, 
excuse me, on page 27 where it talks about in there the DoD and 
VA should act on the recommendations provided in the Institute 
of Medicine's report to determine and address the long-term 
health effects resulting from airborne hazards. I am just 
concerned we have got Nehmer claims here on the horizon, if you 
will, that are going to be addressed.
    Do changes need to be made--do any of you--if you have an 
expertise on this--need to be made in the way that IOM partners 
with VA and if there is enough transparency there? This looks 
like a pretty solid study. It is one that we have been waiting 
on. It is one we have been looking at and we are starting to 
see some implications there. I think the implications are 
generational and we have never crossed that path and I think we 
may have to of what are the implications on the children of 
these exposures.
    So, I don't know if any of you-- are we getting this right? 
IOM laid out what I think is some solid evidence. Now what is 
going to happen with it?
    Mr. Blake. No.
    Mr. Walz. Okay.
    Mr. Blake. I think the issue is it is much like any other 
report. The IOM has done a number of great studies on issues 
under the umbrella of the VA over the years and whether those 
recommendations necessarily see the light of day, I am not 
sure.
    You know, I don't know if that has to do with the 
connection between VA and IOM. I would be surprised if anybody 
could honestly tell you what that connection here actually is, 
but, to the specific report, certainly, there is some great 
ideas there that the VA needs to look at, but I think that same 
statement has been made about a number of things over the 
years, too, so----
    Mr. Walz. And I, of course, worded my question in a very 
good Minnesota passive-aggressive fashion. I agree with you, 
but I don't think it is being implemented. I don't know if it 
is going any further and I have deep concern on numerous ones, 
but this one, specifically, that I think there is some research 
on there. I think we are moving and the VA is taking a very 
aggressive approach to be addressing whether it was Agent 
Orange or other things.
    This seems like one to me, that this opened the door for 
more collaboration, more transparency for us to look at, and 
then to do it. I mean, this is a door that we need to go 
through to see what are the implications, genetically, on 
generational impact of exposures to these.
    So, with that, I appreciate, again, all of you being here, 
and I really think it is important that you are here and with 
the Independent Budget focusing on the whole spectrum of care 
to our veterans.
    I think Dr. Roe summed it up right. I don't think any of us 
have seen the level of services being provided by the VA. Many 
of them are top quality, best practices, you know, verified and 
some of them are not.
    And I think it is important for us to never lose the focus. 
If we spend too much energy in one area at the expense of 
others, then we all know that is detrimental to the veteran and 
I know that you get that and I appreciate you being here.
    Mr. Benishek. Thank you, Mr. Walz.
    We are just about out of questions, but Mr. Michaud 
expressed to ask another question while you are here.
    Mr. Blake. Yes?
    Mr. Michaud. Just one quick question.
    I know you support the advanced appropriation of all of VA. 
Would you also support--my biggest concern with just giving 
budgets on a yearly basis or a two-year basis is the long-term 
planning--would you support requiring, if we are going to do 
advanced appropriation for the rest of VA that they have to 
provide, say, a five-year plan to the Committee, as well, 
because I think DoD does that, but I am wondering if you think 
that the VA should do the same thing, long-term planning?
    Mr. Blake. No comment.
    I think it is a reasonable idea, when they release the 
entire Federal budget, it is done on a long-term plan. I think 
a fear would be that we wouldn't want that to set down the 
benchmarks for the preceding years, you know, if the VA were to 
project next year and three or four years beyond that as dollar 
figures.
    You know, what we have seen with advanced appropriations 
now that raises some concerns is the VA projects a number for 
advanced appropriations and very little change occurs in the 
next year when we are looking at it in that current year----
    Mr. Michaud. No, that is not what I am asking for money. I 
am talking about a plan.
    For instance, if you look at the aging population of 
veterans, Vietnam veterans, for instance, and you look at the 
budget, there is actually a decrease in State veterans' homes 
reimbursement rate. So the long-term plan, five, ten, twenty 
years down the road, is there is going to be more need for 
long-term health care. When you look at five, ten, twenty years 
down the road, more of the soldiers coming back from Iraq and 
Afghanistan that has traumatic brain injury or PTSD, prosthetic 
issues, probably will increase.
    I am not talking about setting a budget to it beyond the 
two years. I am talking about a plan beyond the two years 
because that plan--the budget might say, well, we are going to 
do a transformational and here is what it is going to be for 
the next two years, but the third year out, they plan to have a 
huge increase in their budget because that is the 
implementation of it, so I am not talking about the budget. I 
am talking about a plan of where they plan on going.
    Mr. Kelley. I would say that VA already does that to some 
extent especially with their capital infrastructure, which does 
take into account where veterans are going to live, how many of 
them are going to be migrating from one area to another, what 
specialty needs they may need, and I think they do that.
    Could it be expanded, should it be reported? I would be 
happy to discuss that.
    Mr. Celli. We are certainly proponents of prior planning, 
of course, we just wouldn't want to see a situation, as brought 
up by our colleague where the tail is wagging the dog, where in 
future years we need a service or we need some additional 
support that wasn't in the plan and then we are now afraid to 
introduce it because it wasn't pre-thought of.
    Mr. Benishek. I would like to thank you all for being here 
today.
    There is going to be further written questions from the 
Committee to you all and we will look forward to those answers 
and I personally look forward to you coming to me and bringing 
forth some of these questions you may not have wanted to 
testify too much about today.
    But you are all now excused. I would like to reiterate my 
thanks to all of today's witnesses, especially Secretary 
Shinseki for being with us today, and I ask unanimous consent 
that all Members have five legislative days to revise and 
extend their remarks and include extraneous material, and 
without objection, so ordered.
    The hearing is now adjourned.

    [The statement of Hon. Jackie Walorski appears in the 
Appendix]

    [Whereupon, at 12:24 p.m., the Subcommittee was adjourned.]



                            A P P E N D I X

                              ----------                              

            Prepared Statement of Hon. Jeff Miller, Chairman
    This hearing will come to order. Good morning everyone. Welcome to 
our hearing on the President's Fiscal Year 2014 budget request for the 
Department of Veterans Affairs. As everyone knows, this budget is a 
couple of months late and comes after the House and Senate have both 
passed their respective budget resolutions. Unfortunately, this budget 
is too late to influence that process. However, we do have 
appropriations and authorization work coming up, so our oversight on 
this request is still very important.
    Mr. Secretary, welcome. Committee Members have had less than 24 
hours to review some of the details associated with the budget request 
in advance of this hearing. It is therefore likely that we'll have 
numerous follow-up questions after we have had the chance to take a 
closer look at those details. With that said, I appreciate your 
attendance today and ask for your cooperation in getting timely 
responses back to the many questions we will undoubtedly have.
    My initial reaction to the budget request is mixed. On the one 
hand, a proposed 4.3 percent increase in discretionary spending amidst 
stagnant or declining budget requests for other agencies, most of which 
have, unlike VA, absorbed sequester cuts, demonstrates that VA funding 
is clearly a priority in a tight fiscal climate. On the other hand, I'm 
concerned that we're not seeing the results for all the money Congress 
has provided VA over the years.
    For example, the budget proposes a 7.2 percent increase for 
expanding mental health services. I'm still waiting on information from 
VA showing that veterans with mental illness are getting healthier with 
the resources we've already provided. After all, that's the ultimate 
outcome we're after. Dr. Petzel, I asked that question of you at our 
mental health hearing two months ago and still we don't have a 
response.
    Then we get into the funding request for the Veterans Benefits 
Administration - a staggering 13.4 percent increase over the current 
year - and I'm really at a loss, because the claims processing 
performance just isn't there. Despite already record high budgets, 
numerous investments in technology, record numbers of employees 
available to process claims, the situation is worse today than ever 
before.
    Mr. Secretary, when last year's budget was released VA issued a 
press release saying that with the funding provided (quote) ``By 2013 . 
. . no more than 40 percent of compensation and pension claims will be 
more than 125 days old . . . .'' Well, here we are, and we're now at 
over 70 percent of claims being older than 125 days. The same is true 
for prior budget requests: lofty promises, excitement about new 
initiatives and technologies, but no results . . . we don't even have a 
positive trend. VA has missed its own performance goals every single 
year.
    I am tired of the excuses. I understand more claims are being filed 
and that they're complex . . . but that's been true for decades. And 
the workload created because of good decisions you made for Agent 
Orange veterans, Mr. Secretary, Congress provided resources for an IT 
solution that you requested to help with that effort. And by 
establishing presumptions for combat Post Traumatic Stress and Gulf War 
Illness, those claims - most of which would have been filed anyway -
should have been easier to process, not cited as a contributing cause 
of perennial failure.
    As for the technology improvements, I know many are pinning their 
hopes on the VBMS system, which we've already spent close to a half-a-
billion dollars. We've already had reports of VBMS problems from VA's 
Inspector General; we also have reports of the system crashing just 
this week causing all raters to temporarily transition back to the old 
computer system. But what's worse, I've looked at the backlog numbers 
for the Regional Offices where VBMS went live by the end of 2012, and 
14 of the 18 offices have a higher percentage of backlogged cases now 
than when VBMS came online. The other four have seen marginal 
improvement, but it's nowhere close to where it needs to be.
    I have been outspoken in my efforts to protect VA funding. We 
worked for over a year to ensure VA was exempt from sequestration. I've 
introduced a bill with the Ranking Member to advance fund all of VA's 
budget to protect it from the effects of continuing resolutions or 
threatened government shutdowns. I'm proud of the efforts this 
Committee has made to protect VA's resources. But the point of those 
efforts is to ensure improved benefits and services to America's 
veterans. And, right now, I'm not seeing improvement in many key areas. 
I'm seeing the opposite.
    Mr. Secretary, we need to see results. We need to see the outcomes 
the Administration promised with the resources Congress provided. The 
excuses must stop. I have supported you and your leadership up to this 
point. I believe the Committee and the Congress has provided you with 
everything you have asked. It's time to deliver.
    I yield to the Ranking Member . . . .

                                 
               Prepared Statement of Hon. Michael Michaud
    Thank you, Mr. Chairman.

    Secretary Shinseki, thank you for coming today.
    I look forward to your testimony on the funding needs of the VA.

    Welcome also to the VSO representatives on our second panel.
    This Committee relies on the veterans' community to provide 
additional insight into the needs of the VA. You help us understand the 
pressing issues facing veterans and their families.
    I especially appreciate the Independent Budget you prepare each 
year.

    Mr. Secretary, I applaud the Administration for providing a 
concrete example of the priority that our Nation gives to veterans.
    In a time of austerity, a $2.5 billion increase over FY2013 levels 
represents the Nation's ongoing commitment to those who have served and 
sacrificed.

    The key question today is: Does this budget give you the resources 
you need to complete your transformational efforts?
    The Independent Budget has recommended nearly
    $2 billion more than your FY2014 request.
    Many of your transformational initiatives will come to fruition in 
the next year and a half. This includes your goal of eliminating the VA 
claims backlog by 2015.
    So again, does this budget give you the resources you need to 
complete your transformational efforts - specifically, to achieve 
eliminating the backlog in 2015?
    If the answer is yes, I will work closely with my colleagues on 
this Committee, and in this Congress, to get you the resources you 
need.

    To whom much is given much will be required.
    In a time of forced budget cuts and scarce Federal resources, you 
have proposed an increase.
    With these funds, in these times, comes an increased responsibility 
to show tangible return-on-investment.
    It is imperative, that over the next year, we have open dialogue 
about the accomplishments and achievements this funding allows you.
    There must be robust discussion of the progress you are making 
toward finalizing VA's transformation. We need hard data and 
information if we are to share your confidence of success.
    Since the advent of advanced appropriations, you have consistently 
asked for additional funding beyond what was requested and provided.
    This year, you are asking for an additional $157.5 million in 
medical services funding.
    To me, this indicates the need for better, more detailed planning 
and programming.
    The process of putting a budget together and making informed policy 
and program decisions is a fundamental management tool.
    As we begin the discussion of providing advance appropriations for 
all of VA's discretionary accounts, we need to also discuss whether VA 
has the management processes and infrastructure in place to make 
strategic decisions that can inform budget estimates far into the 
future.
    I believe we would all like to see a planning, programming and 
budgeting process that is driven by the long-term, strategic needs of 
the VA.
    It should be one that assists VA leadership, at the very highest 
levels, to make tough and smart decisions to improve how we provide 
benefits and services to veterans, and to evaluate the success or 
failure of efforts over the long run.

    You have requested a large increase for Information Technology.
    I understand the critical nature of IT spending.
    This is especially important within the context of your 
transformational efforts.
    But I want to be assured that we are wisely spending our IT 
resources.
    For example, as part of your proposed increase you have requested 
$251 million to ``fund the required development activities within the 
iEHR Interagency Program Office (IPO).''
    In light of the recent decision by DoD and VA regarding the 
integrated electronic health record, is this funding still required? 
Would these resources be better spent to support your claims backlog 
initiative?
    I would like to mention an Administration proposal I oppose.
    The Administration's budget includes a proposal to utilize what is 
called a ``chained-CPI'' in place of the current method of calculating 
inflation.
    The Administration believes that this will result in a $44 million 
dollar in savings over 5 years and $230 million over ten years.
    I line up with our veterans' groups and our seniors in opposing 
this proposal.
    I am not convinced that it is a sounder manner in which to 
calculate inflation.
    I believe it would have a real and damaging effect on many of our 
most vulnerable citizens - including veterans and their families.

    This Nation is committed to its veterans.
    This budget reflects that commitment.

    I stand with you, as part of this Nation's government, committed to 
delivering on that commitment.
    Thank you, Mr. Chairman. I yield back the balance of my time.

                                 
               Prepared Statement of Hon. Jackie Walorski
    Mr. Chairman and Ranking Member, it's an honor to serve on this 
Committee.
    I would like to thank you for holding this hearing, and I would 
also like to thank the Secretary and the veteran organizations 
appearing before the Committee today.
    Yesterday, the President unveiled his Fiscal Year 2014 Budget. The 
Budget highlights issues this Committee has tirelessly advocated to 
improve.
    This being said, Mr. Chairman, I agree that increased funding must 
produce greater access to quality care. The Department of Veterans 
Affairs has greatly improved the services it provides, but there is 
still much more work to be done.
    We owe it to these men and women who have served and their families 
to ensure they are receiving treatment that thoroughly addresses their 
individual and unique needs.
    I look forward to working with my colleagues and our panelists, 
today, to ensure the funding for the Department of Veterans Affairs 
will be used to increase access for care and improve services.
    Thank you.

                                 
              Prepared Statement of Hon. Eric K. Shinseki
    Chairman Miller, Ranking Member Michaud, Distinguished Members of 
the House Committee on Veterans' Affairs:
    Thank you for the opportunity to present the President's 2014 
Budget and 2015 advance appropriations requests for the Department of 
Veterans Affairs (VA). This budget continues the President's historic 
initiatives and strong budgetary support and will have a positive 
impact on the lives of Veterans, their families, and survivors. We 
value the unwavering support of the Congress in providing the resources 
and legislative authorities needed to care for our Veterans and 
recognize the sacrifices they have made for our Nation.
    The current generation of Veterans will help to grow our middle 
class and provide a return on the country's investments in them. The 
President believes in Veterans and their families, believes in 
providing them the care and benefits they've earned, and knows that by 
their service, they and their families add strength to our Nation.
    Twenty-two million living Americans today have distinguished 
themselves by their service in uniform. After a decade of war, many 
Servicemembers are returning and making the transition to Veterans 
status. The President's 2014 Budget for VA requests $152.7 billion - 
comprised of $66.5 billion in discretionary funds, including medical 
care collections, and $86.1 billion in mandatory funds. The 
discretionary request reflects an increase of $2.7 billion, 4.3 percent 
above the 2013 level. Our 2014 budget will allow VA to operate the 
largest integrated healthcare system in the country, with more than 9.0 
million Veterans enrolled to receive healthcare; the ninth largest life 
insurance provider, covering both active duty members as well as 
enrolled Veterans; an education assistance program serving over 1 
million students; 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 leads the Nation 
as a high-performing organization, with projections to inter about 
121,000 Veterans and family members in 2014.
                             Priority Goals
    Over the next few years, more than one million Veterans will leave 
military service and transition to civilian life. VA must be ready to 
care for them and their families. Our data shows that the newest of our 
country's Veterans are relying on VA at unprecedented levels. Through 
January 31, 2012, of the approximately 1.58 million Veterans who 
returned from Operations Enduring Freedom, Iraqi Freedom, and New Dawn, 
at least 62 percent have used some VA benefit or service.
    VA's top three priorities - increase access to VA benefits and 
services; eliminate the disability compensation claims backlog in in 
2015; and end Veterans homelessness, also in 2015 - anticipate these 
changes and identify the performance levels required to meet emerging 
needs. These ambitious goals will take steady focus and determination 
to see them through. As we enter the critical funding year for VA's 
priority goals, this 2014 budget builds upon our multi-year effort to 
position the Department through effective, efficient, and accountable 
programming and budget execution for delivering claims and homeless 
priority goals.
                        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. Effective stewardship requires an 
unflagging commitment to use resources efficiently with clear 
accounting rules and procedures, to safeguard, train, motivate, and 
hold our workforce accountable, and to assure the effective use of time 
in serving Veterans on behalf of the American people. Striving for 
excellence in stewardship of resources is a daily priority. At VA, we 
are ever attentive to areas in which we need to improve our operations, 
and are committed to taking swift corrective action to eliminate any 
financial management practice that does not deliver value for Veterans.
    VA's stewardship of resources begins at headquarters. Recognizing 
the very difficult fiscal constraints facing our country, the 2014 
request includes a 5.0 percent reduction in the Departmental 
Administration budget from the 2013 enacted level. This reduction 
follows a headquarters freeze in the 2013 President's Budget--a two-
year commitment.
    Recent audits of the Department's financial statements have 
certified VA's success in remediating 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. In the past four years, we 
have also dramatically reduced the number of significant financial 
deficiencies from 16 to 1.
    At VA, we believe that part of being responsible stewards is 
shutting down information technology (IT) projects that are no longer 
performing. Developed by our Office of Information and Technology, the 
Project Management Accountability System (PMAS) requires 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. Through PMAS, the 
cumulative, on-time delivery of IT functionality since its inception is 
82 percent, a rate unheard of in the industry where, by contrast, the 
average is 42 percent. By implementing PMAS, we have achieved at least 
$200 million in cost avoidance by shutting down or improving the 
management of 15 projects.
    Through the effective management of our acquisition resources, VA 
has achieved savings of over $200 million by participating in Federal 
strategic sourcing programs and establishing innovative IT acquisition 
contracts. In 2012, VA led the civilian agencies in contracting with 
Service-Disabled Veteran-Owned Small Businesses, which, at $3.4 
billion, accounted for 19.3 percent of all VA procurement awards. In 
addition, we have reduced interest penalties for late payments by 19 
percent (from $47 to $38 per million) over the past four years.
    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. Since taking on 
this responsibility, NCA has advised families of the burial benefits 
available to them, assisted in averting overpayments of some $142 
million in benefit payments and, thereby, helped survivors avoid 
possible collections. In addition, we implemented the use of Medicare 
pricing methodologies at the Veterans Health Administration (VHA) to 
pay for fee-basis services, resulting in savings of over $528 million 
since 2012 without negatively impacting Veteran care and with improved 
consistency in billing and payment.
                               Technology
    To serve Veterans as well as they have served us, we are working on 
delivering a 21st century VA that provides medical care, benefits, and 
services through a digital infrastructure. Technology is integrated 
with everything we do for Veterans. Our hospitals use information 
technology to properly and accurately distribute and deliver 
prescriptions/medications to patients, track lab tests, process MRI and 
X-ray imaging, coordinate consults, and store medical records. VA IT 
systems supported over 1,300 VA points of healthcare in 2012: 152 
medical centers, 107 domiciliary rehabilitation treatment programs, 821 
community-based outpatient clinics, 300 Vet Centers, 6 independent 
outpatient clinics, 11 mobile outpatient clinics, and 70 mobile Vet 
Centers. Technology supports Veterans' education and disability claims 
processing, claims payments, home loans, insurance, and memorial 
services. Our IT infrastructure consists of telephone lines, data 
networks, servers, workstations, printers, cell phones, and mobile 
applications.
    No Veteran should have to wait months or years for the benefits 
that they have earned. We will eliminate the disability claims backlog 
in 2015; technology is the critical component for achieving our goal. 
VA is deploying technology solutions to improve access, drive 
automation, reduce variance, and enable faster and more efficient 
operations. Building on the resources Congress has provided in recent 
years to expand our claims processing capacity, the 2014 budget 
requests $291 million for technology to eliminate the claims backlog? 
$155 million in Veterans Benefits management System (VBMS) for our new 
paperless processing system, and $136 million in the Veterans Benefits 
Administration (VBA) to support a Veterans Claims Intake Program, our 
new online application system that will allow for the conversion of 
paper to digital images for our new paperless processing system, the 
Veterans Benefits Management System (VBMS). Without these resources, VA 
will be unable to meet its goal to eliminate the disability claims 
backlog in 2015.
Information Technology
    At VA, advances in technology--and the adoption of and reliance on 
IT in our daily commercial life--have been dramatic. Technology is 
integral to providing high quality healthcare and benefits. The 2014 
budget requests $3.683 billion for IT, an increase of $359 million from 
the President's 2013 Budget, reflecting the critical role technology 
plays in VA's daily work in serving and caring for Veterans and their 
families. Of the total request, $2.2 billion will support the operation 
and maintenance of our digital infrastructure and $495 million is for 
IT development modernization and enhancement projects.
    The 2014 budget includes $32.8 million for development of VBMS, our 
new paperless processing system that enables VA to move from its 
current paper-based process to a digital operating environment that 
improves access, drives automation, reduces variance, and enables 
faster, more efficient operations. As we increase claims examiners' use 
of VBMS version 4.2 to process rating disability claims, our major 
focus is on system performance, as we tune the system to be responsive 
and effective. VA will complete the rollout of VBMS in June 2013.
    In addition, the 2014 budget includes $120 million for development 
of the Veterans Relationship Management (VRM) initiative, which 
enhances Veterans' access to comprehensive VA services and benefits, 
especially in the delivery of compensation and pension claims 
processing. The program gives Veterans secure, personalized access to 
benefits and information and allows a timely response to their 
inquiries. Recently, VRM released Veterans Online Application Direct 
Connect (VDC), which enables Veterans to apply for VBA benefits by 
answering guided interview questions through the security of the 
eBenefits portal. Claims filed through eBenefits use VDC to load 
information and data directly into VBMS.
    The Virtual Lifetime Electronic Record (VLER) is an overarching 
program which aims to share health, benefits, and administrative 
information, including personnel records and military history records, 
among DoD, VA, SSA, private healthcare providers, and other Federal, 
State and local government partners. eBenefits is already reaching 2 
million Veterans and Servicemembers and 1 million active users with 
BlueButton. The 2014 budget requests $15.4 million for VLER to develop 
and support these functions as well as the Warrior Support Veterans 
Tracking Application; the Disability Benefits Questionnaires; a VA/DoD 
joint health information sharing project known as Bidirectional Health 
Information Exchange; and a storage interface known as Clinical Data 
Repository/Health Data Repository. All of these efforts are designed to 
enable the sharing of health, military personnel and personal 
information among VA, other Federal agencies, Veteran Service 
Organizations and private health care providers to expedite the award 
and processing of disability claims and other services such as 
education, training and job placement.
                     Eliminating the Claims Backlog
    Too many Veterans wait too long to receive benefits they have 
earned. This is unacceptable. Today's claims backlog is the result of 
several factors, including: increased demand; over a decade of war with 
many Veterans returning with more severe, complex injuries; decisions 
on Agent Orange, Gulf War, and combat PTSD presumptions; and, 
successful outreach to Veterans informing them of their benefits. These 
facts, in no way, diminish the urgency that we all feel at VA to fix 
this problem which has been decades in the making. VA remains focused 
on eliminating the disability claims backlog in 2015 and processing all 
claims within 125 days at a 98-percent accuracy level.
    To deliver this goal, the Veterans Benefits Administration (VBA) is 
implementing a comprehensive transformation plan based on more than 40 
targeted initiatives to boost productivity by over the next several 
years However, as VBA transforms its people, processes, and 
technologies, its claims demand is expected to exceed on million 
annually. From 2010 through 2012, for the first time in its history, 
VBA processed more than one million claims in three consecutive years. 
In 2013, VBA expects to receive another million claims and similar 
levels of demand are anticipated in 2014. This is driven by successful 
outreach, claims growth not previously captured in VBA's baseline, and 
new requirements. Included are mandatory Servicemember participation in 
VOW/VEI benefits briefings and an expected increase upon successful 
completion of a transition assistance program, revamped by the 
President as Transition: Goals, Plan, Success (GPS). As more than one 
million troops leave service over the next 5 years, we expect our 
claims workload to continue to rise. In addition, VBA is experiencing 
an unprecedented workload growth arising from the number and complexity 
of medical conditions in Veterans' compensation claims. The average 
number of claimed conditions for our recently separated Servicemembers 
is now in the 12 to 16 range - roughly 5 times the number of 
disabilities claimed by Veterans of earlier eras. While the increase in 
compensation applications presents challenges, it is also an indication 
that we are being successful in our efforts to expand access to VA 
benefits.
    Investments in transformation of our people, processes, and 
technologies are already paying off in terms of improved performance. 
For example:

      People: More than 2,100 claims processors have completed 
Challenge Training, which improves the quality and productivity of VBA 
compensation claims decision makers. As a result of Challenge Training, 
VBA's new employees complete more claims per day than their 
predecessors - with a 30 percent increase in accuracy.

    VBA's new standardized organizational model incorporates a case-
management approach to claims processing that organizes its workforce 
into cross-functional teams that work together on one of three 
segmented lanes: express, special operations, or core. Claims that 
predictably can take less time will flow through an express lane (30 
percent); those taking more time or requiring special handling will 
flow through a special operations lane (10 percent); and the rest of 
the claims flow through the core lane (60 percent). Initially planned 
for deployment throughout 2013, VBA accelerated the implementation of 
the new organizational model by nine months due to early indications of 
its positive impact on performance.
    VBA instituted Quality Review Teams (QRTs) in 2012 to improve 
employee training and accuracy while decreasing rework time. QRTs focus 
on improving performance on the most common sources of error in the 
claims processing cycle. Today, for example, QRTs are focused on the 
process by which proper physical examinations are ordered; incorrect or 
insufficient exams previously accounted for 30 percent of VBA's error 
rate. As a result of this focus, VBA has seen a 23 percent improvement 
in this area.

      Process: Disability Benefits Questionnaires (DBQs) are 
online forms used by non-VA physicians to submit medical evidence. Use 
of DBQs has improved timeliness and accuracy of VHA-provided exams - 
average processing time improved by 6 days from June 2011 to October 
2012 (from 32 to 26 days).

    Fully developed claims (FDCs) are critical to reducing ``wait 
time'' and ``rework.'' FDCs include all DoD service medical and 
personnel records, including entrance and exit exams, applicable DBQs, 
any private medical records, and a fully completed claim form. Today, 
VBA receives 4.5 percent of claims in fully developed form and 
completes them in 117 days, while a regular claim takes 262 days to 
process. Fulfilling the Veterans Claims Assistance Act, to search for 
potential evidence, is the greatest portion of the current 262-day 
process. The Veterans Benefit Act of 2003 allows Veterans up to 365 
days, from the date of VA notice for additional information or 
evidence, to provide documentation. Of the 262 days to complete a 
regular claim, approximately145 days are spent waiting for potential 
evidence to qualify the application as a fully developed claim.
    VBA built new decision-support tools to make our employees more 
efficient and their decisions more consistent and accurate. Rules-based 
calculators provide suggested evaluations for certain conditions using 
objective data and rules-based functionality. The Evaluation Builder 
uses a series of check boxes that are associated with the Veteran's 
symptoms to help determine the proper diagnostic code of over 800 
codes, as well as the appropriate level of compensation based on the 
Veteran's symptoms.

      Technology: The centerpiece of VBA's transformation plan 
is VBMS - a new paperless electronic claims processing system that 
employs rules-based technology to improve decision speed and accuracy. 
For our Veterans, VBMS will mean faster, higher-quality, and more 
consistent decisions on claims. Our strategy includes active 
stakeholder participation (Veterans Service Officers, State Departments 
of Veterans Affairs, County Veterans Service Officers, and Department 
of Defense) to provide digital electronic files and claims pre-scanned 
through online claims submission via the eBenefits Web portal.

      VBA recently established the Veterans Claims Intake 
Program (VCIP). This program will streamline processes for receiving 
records and data into VBMS and other VBA systems. Scanning operations 
and the transfer of Veteran data into VBMS are primary intake 
capabilities that are managed by VCIP. As VBMS is deployed to 
additional regional offices, document scanning becomes increasingly 
important as the main mechanism for transitioning from paper-based 
claim folders to the new electronic environment.

    There are other ways that VA is working to eliminate the claims 
backlog. VHA has implemented multiple initiatives to expedite timely 
and efficient delivery of medical evidence needed to process a 
disability claim by VBA. As a result, timeliness improved by nearly 
one-third, from an average of 38 days in January 2011 to 26 days in 
October 2012. Recently, VA launched Acceptable Clinical Evidence (ACE), 
an initiative that allows clinicians to review existing medical 
evidence and determine whether they can use that evidence to complete a 
DBQ without requiring the Veteran to report for an in-person 
examination. This initiative was developed by both VHA and VBA in a 
joint effort to provide a Veteran-centric approach for disability 
examinations. Use of the ACE process opens the possibility of doing 
assessments without an in-person examination when there is sufficient 
information in the record.
    Another way to eliminate the claims backlog is by working closely 
with the DoD. The Integrated Disability Evaluation System (IDES) is a 
collaborative system to make disability evaluations seamless, simple, 
fast and fair. If the Service member is found medically unfit for duty, 
the IDES gives them a proposed VA disability rating before they leave 
the service. These ratings are normally based on VA examinations that 
are conducted using required IDES examination templates. In FY 2012, 
IDES participants were notified of VA benefit entitlement in an average 
of 54 days after discharge. This reflects an improvement from 67 days 
in May 2012 to 49 days in September 2012.
    The Benefits Delivery at Discharge (BDD) and Quick Start programs 
are two other collaborations for Servicemembers to file claims for 
service-connected disabilities. This can be done from 180 to 60 days 
prior to separation or retirement. BDD claims are accepted at every VA 
Regional Office and at intake sites on military installations in the 
U.S., and at two intake site locations overseas. In 2012, BDD received 
more than 30,300 claims and completed 24,944--a 14% increase over 
2011's productivity (21,657). During this same period of time Quick 
Start decreased their rating inventory by over 44 percent.
               Expanding Access to Benefits and Services
    .
    VA remains committed to ensuring that Veterans are not only aware 
of the benefits and services that they are entitled to, but that they 
are able to access them. We are improving access to VA services by 
opening new or improved facilities closer to where Veterans live. Since 
2009, we have added 57 community-based outpatient clinics (CBOCs), for 
a total of 840 CBOCs through 2013, and increased the number of mobile 
outpatient clinics and mobile Vet Centers, serving rural Veterans, to 
81. Last August, we opened a state-of-the-art medical center in Las 
Vegas, the first new VAMC in 17 years. The 2014 medical care budget 
request includes $799 million to open new and renovated healthcare 
facilities and includes the authorization request for 28 new and 
replacement medical leases to increase Veteran access to services.
    Today, access is much more than the ability to walk into a VA 
medical facility; it also includes technology, and programs, as well 
as, facilities. 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 scarce, or by using social 
media sites like Facebook, Twitter, and YouTube to connect Veterans to 
VA benefits and facilities. Telehealth is a major breakthrough in 
healthcare delivery in 21st century medicine, and is particularly 
important for Veterans who live in rural and remote areas. The 2014 
budget requests $460 million for telehealth, an increase of $388 
million, or 542 percent, since 2009.
    As more Veterans access our healthcare services, we recognize their 
unique needs and the needs of their families--many have been affected 
by multiple, lengthy deployments. VA provides a comprehensive system of 
high-quality mental health treatment and services to Veterans. We are 
using many tools to recruit and retain our large mental healthcare 
workforce to better serve Veterans by providing enhanced services, 
expanded access, longer clinic hours, and increased telemental health 
capabilities. In response to increased demand over the last four years, 
VA has enhanced its capacity to deliver needed mental health services 
and to improve the system of care so that Veterans can more readily 
access them. Since 2006, the number of Veterans receiving specialized 
mental health treatment has risen each year, from over 927,000 to more 
than 1.3 million in 2012, partly due to proactive screening. Outpatient 
visits have increased from 14 million in 2009 to over 17 million in 
2012. VA believes that mental healthcare must constantly evolve and 
improve as new knowledge becomes available through research.
    The 2014 budget includes $168.5 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. Most recently, in November 2012, VRM 
added new features to eBenefits, a Web application that allows Veterans 
to access their VA benefits and submit some claims online. Veterans can 
now enroll in and manage their insurance policies, select reserve 
retirement benefits, and browse the Veterans Benefits Handbook from the 
eBenefits Website. With the help of Google mapping services, the update 
also enables Veterans to find VA representatives in their area and 
where they are located. Since its inception in 2009, eBenefits has 
added more than 45 features allowing Veterans easier, quicker, and more 
convenient access to their VA benefits and personal information.
    VBA has aggressively promoted eBenefits and the ease of enrolling 
into the system. We currently have over 2.5 million registered 
eBenefits users. Users can check the status of claims or appeals, 
review VA payment history, obtain military documents, and perform 
numerous other benefit actions through eBenefits. The Stakeholder 
Enterprise Portal (SEP) is a secure Web-based access point for VA's 
business partners. This electronic portal provides the ability for VSOs 
and other external VA business partners to represent Veterans quickly 
and efficiently.
    VA also continues to increase access to burial services for 
Veterans and their families through the largest expansion of its 
national cemetery system since the Civil War. At present, approximately 
90 percent of the Veteran population--about 20 million Veterans--has 
access to a burial option in a national, state, or tribal Veterans 
cemetery within 75 miles of their homes. In 2004, only 75 percent of 
Veterans had such access. This dramatic increase is the result of a 
comprehensive strategic planning process that results in the most 
efficient use of resources to reach the greatest number of Veterans.
                      Ending Veteran Homelessness
    The last of our three priority goals is to end homelessness among 
Veterans in 2015. Since 2009, we have reduced the estimated number of 
homeless Veterans by more than 17 percent. The January 2012 Point-In-
Time estimate, the latest available, is 62,619. We have also created a 
National Homeless Veterans Registry to track our known homeless and at-
risk populations closely to ensure resources end up where they are 
needed. In 2012, over 240,000 homeless or at-risk Veterans accessed 
benefits or services through VA and 96,681 homeless or at -risk 
Veterans were assessed by VHA's homeless programs. Over 31,000 homeless 
and at-risk Veterans and their families obtained permanent housing 
through VA specialized homeless programs.
    In the 2014 budget, VA is requesting $1.393 billion for programs to 
assist homeless Veterans, through programs such as Department of 
Housing and Urban Development-VASupportive Housing (HUD-VASH), Grant 
and Per Diem, Homeless Registry, and Health Care for Homeless Veterans. 
This represents an increase of $41 million, or 3 percent over the 2013 
enacted level. This budget will support our long-range plan to end 
Veteran homelessness by emphasizing rescue and prevention--rescue for 
those who are homeless today, and prevention for those at risk of 
homelessness.
    Our prevention strategy includes close partnerships with some 150 
community non-profits through the Supportive Services for Veteran 
Families (SSVF) program; SSVF grants promote housing stability among 
homeless and at-risk Veterans and their families. The grants can have 
an immediate impact, helping lift Veterans out of homelessness or 
providing aid in emergency situations that put Veterans and their 
families at risk of homelessness. In 2012, we awarded $100 million in 
Supportive Service grants to help Veterans and families avoid life on 
the streets. We are currently reviewing proposals for the $300 million 
in grants we will distribute later this year. In 2012, SSVF resources 
directly helped approximately 21,000 Veterans and over 35,000 household 
members, including nearly 9,000 children. This year's grants will help 
up to 70,000 Veterans and family members avoid homelessness. The 2014 
budget includes $300 million for SSVF.
    To increase homeless Veterans' access to benefits, care, and 
services, VA established the National Call Center for Homeless Veterans 
(NCCHV). The NCCHV provides homeless Veterans and Veterans at-risk for 
homelessness free, 24/7 access to trained counselors. The call center 
is intended to assist homeless Veterans and their families, VA medical 
centers, federal, state and local partners, community agencies, service 
providers, and others in the community. Family members and non-VA 
providers who call on behalf of homeless Veterans are provided with 
information on VA homeless programs and services. In 2012, the National 
Call Center for Homeless Veterans received 80,558 calls (123 percent 
increase) and the center made 50,608 referrals to VA medical centers 
(133 percent increase).
    VA's Homeless Patient Aligned Care Teams (H-PACTs) program provides 
a coordinated ``medical home'' specifically tailored to the needs of 
homeless Veterans. The program integrates clinical care with delivery 
of social services and enhanced access and community coordination. 
Implementation of this model is expected to address health disparity 
and equity issues facing the homeless population. Expected program 
outcomes include reduced emergency department use and hospitalizations, 
improved chronic disease management, and improved ``housing readiness'' 
with fewer Veterans returning to homelessness once housed.
    During 2012, 119,878 unique homeless Veterans were served by the 
Health Care for Homeless Veterans Program (HCHV), an increase of more 
than 21 percent from 2011. At more than 135 sites, HCHV offers 
outreach, exams, treatment, referrals, and case management to Veterans 
who are homeless and dealing with mental health issues, including 
substance use. Initially serving as a mechanism to contract with 
providers for community-based residential treatment for homeless 
Veterans, many HCHV programs now serve as the hub for myriad housing 
and other services that provide VA with a way to outreach and assist 
homeless Veterans by offering them entry to VA medical care.
    VA's Homeless Veterans Apprenticeship Program was established in 
2012--a 1-year paid employment training program for Veterans who are 
homeless or at risk of homelessness. This program created paid 
employment positions as Cemetery Caretakers at five of our 131 national 
cemeteries. The initial class of 21 homeless Veterans is simultaneously 
enrolled in VHA's Homeless Veterans Supported Employment program. 
Apprentices who successfully complete 12 months of competency-based 
training will be offered permanent full-time employment at a national 
cemetery. Successful participants will receive a Certificate of 
Competency which can also be used to support employment applications in 
the private sector.
    Another avenue of assistance is through Veterans Treatment Courts, 
which were developed to avoid unnecessary incarceration of Veterans who 
have developed mental health problems. The goal of Veterans Treatment 
Courts is to divert those with mental health issues and homelessness 
from the traditional justice system and to give them treatment and 
tools for rehabilitation and readjustment. While each Veterans 
Treatment Court is part of the local community's justice system, they 
form close working partnerships with VA and Veterans' organizations. As 
of early 2012 there are 88 Courts.
    The Veterans Justice Outreach (VJO) program exists to connect these 
justice-involved Veterans with the treatment and other services that 
can help prevent homelessness and facilitate recovery, whether or not 
they live in a community that has a Veterans Treatment Court. Each VA 
Medical Center has at least one designated justice outreach specialist 
who functions as a link between VA, Veterans, and the local justice 
system. Although VA cannot treat Veterans while they are incarcerated, 
these specialists provide outreach, assessment and linkage to VA and 
community treatment, and other services to both incarcerated Veterans 
and justice-involved Veterans who have not been incarcerated.
                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. The legislation requires VA to plan its medical 
care budget using a multi-year approach. This policy ensures that VA 
requirements are reviewed and updated based on the most recent data 
available and actual program experience.
    The 2014 budget request for VA medical care appropriations is $54.6 
billion, an increase of 3.7 percent over the 2013 enacted level of 
$52.7 billion. The request is an increase of $157.5 million above the 
enacted 2014 advance appropriations level. Based on updated 2014 
estimates largely derived from the Enrollee Health Care Projection 
Model, the requested amount would allow VA to increase funding in 
programs to eliminate Veteran homelessness; continue implementation of 
the Caregivers and Veterans Omnibus Health Services Act; fulfill 
multiple responsibilities under the Affordable Care Act; provide for 
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 
assumes that VHA will carry over negligible unobligated balances from 
2013 into 2014 - consistent with the 2013 budget submitted to Congress.
    The 2015 request for medical care advance appropriations is $55.6 
billion, an increase of $1.1 billion, or 1.9 percent, over the 2014 
budget request. Medical care funding levels for 2015, including funding 
for activations, non-recurring maintenance, and initiatives, will be 
revisited during the 2015 budget process, and could be revised to 
reflect updated information on known funding requirements and 
unobligated balances.
                          Medical Care Program
    The 2014 budget of $57.7 billion, including collections, provides 
for healthcare services to treat over 6.5 million unique patients, an 
increase of 1.3 percent over the 2013 estimate. Of those unique 
patients, 4.5 million Veterans are in Priority Groups 1-6, an increase 
of more than 71,000 or 1.6 percent. Additionally, VA anticipates 
treating over 674,000 Veterans from the conflicts in Iraq and 
Afghanistan, an increase of over 67,000 patients, or 11.1 percent, over 
the 2013 level. VA also provides medical care to non-Veterans through 
programs such the Civilian Health and Medical Program of the Department 
of Veterans Affairs (CHAMPVA) and the Spina Bifida Health Care Program; 
this population is expected to increase by over 17,000 patients, 2.6 
percent, during the same time period.
    The 2014 budget proposes to extend the Administration's current 
policy to freeze Veterans' pharmacy co-payments at the 2012 rates, 
until January 2015. Under this policy, which will be implemented in a 
future rulemaking, co-payments will continue at $8 for Veterans in 
Priority Groups 2 through 6 and at $9 for Priority Groups 7 through 8.
    The 2014 budget requests $47 million to provide healthcare for 
Veterans who were potentially exposed to contaminated drinking water at 
Camp Lejeune as required by the Honoring America's Veterans and Caring 
for Camp Lejeune Families Act of 2012, enacted last August. Since VA 
began implementation of the law and in January 2013, 1,400 Veterans 
have contacted us concerning Camp Lejeune. Of these, roughly 1,100 were 
already enrolled in VA healthcare. Veterans who are eligible for care 
under the Camp Lejeune authority, regardless of current enrollment 
status with VA, will not be charged a co-payment for healthcare related 
to the 15 illnesses or conditions recognized, nor will a third-party 
insurance company be billed for these services. In 2015, VA expects to 
start treating family members as authorized under the law and has 
included $25 million for this purpose within the 2015 advance 
appropriations request. VA continues a robust outreach campaign to 
these Veterans and family members while we press forward with 
implementing this complex new law.
Mental Healthcare and Suicide Prevention
    At VA, we have the opportunity and the responsibility to anticipate 
the needs of returning Veterans. Mental healthcare at VA is a system of 
comprehensive treatments and services to meet the individual mental 
health needs of Veterans. VA is expanding mental health programs and is 
integrating mental health services with primary and specialty care to 
provide better coordinated care for our Veteran patients. Our 2014 
budget provides nearly $7.0 billion for mental healthcare, an increase 
of $469 million, or 7.2 percent, over 2013. Since 2009, VA has 
increased funding for mental health services by 56.9 percent. VA 
provided mental health services to 1,391,523 patients in 2012, 58,000 
more than in 2011.
    To serve the growing number of Veterans seeking mental healthcare, 
VA has deployed significant resources and is increasing the number of 
staff in support of mental health services. Consistent with the 
President's August 31, 2012 Executive Order, VHA is on target to 
complete the goal of hiring 1,600 additional mental health clinical 
providers and 300 administrative support staff by June 30, 2013 to meet 
the growing demand for mental health services. In addition, as part of 
VA's efforts to implement the Caregivers and Veterans Omnibus Health 
Services Act of 2010, VA has hired over 100 Peer Specialists in recent 
months, and is hiring and training nearly 700 more. Additionally, VA 
has awarded a contract to the Depression and Bipolar Support Alliance 
to provide certification training for Peer Specialists. This peer staff 
is expected to be hired by December 31, 2013, and will work as members 
of mental health teams.
    In addition to hiring more mental health workers, VA is developing 
electronic tools to help VA clinicians manage the mental health needs 
of their patients. Clinical Reminders give clinicians timely 
information about patient health maintenance schedules, and the High-
Risk Mental Health National Reminder and Flag system allows VA 
clinicians to flag patients who are at-risk for suicide. When an at-
risk patient does not keep an appointment, Clinical Reminders prompt 
the clinician to follow-up with the Veteran.
    Since its inception in 2007, the Veterans Crisis Line in 
Canandaigua, New York, has answered over 725,000 calls and responded to 
more than 80,000 chats and 5,000 texts from Veterans in need. In the 
most serious calls, approximately 26,000 men and women have been 
rescued from a suicide in progress because of our intervention--the 
equivalent of two Army divisions.
    We recently completed a 2012 VA suicide data report, a result of 
the most comprehensive review of Veteran suicide rates ever undertaken 
by VA. We are working hard to understand this issue--and VA and DoD 
have jointly funded a $100 million suicide research project. We will be 
better informed about suicides, but while research is ongoing, we are 
taking immediate action and are not waiting 10 years for final study 
outcomes. These actions include Veterans Chat on the Veterans Crisis 
Line, local Suicide Prevention Coordinators' for counseling and 
services, and availability of VA/DoD Suicide Outreach resources.
The Affordable Care Act
    The Affordable Care Act (ACA) expands access to coverage, reins in 
health care costs, and improves the Nation's health care delivery 
system. The Act has important implications for VA. Beginning in 2014, 
many uninsured Americans, including Veterans, will have access to 
quality, affordable health insurance choices through Health Insurance 
Marketplaces, also known as Exchanges, and may be eligible for premium 
tax credits and cost-sharing reductions to make coverage more 
affordable. The 2014 budget requests $85 million within the Medical 
Care request and $3.4 million within the Information Technology request 
to fulfill multiple responsibilities as a provider of Minimum Essential 
Coverage under the Affordable Care Act, including: (1) providing 
outreach and communication on ACA to Veterans related to VA health 
care; (2) reporting to Treasury on individuals who are enrolled in the 
VA healthcare system; and (3) providing a written statement to each 
enrolled Veteran about their coverage by January 2015.
Medical Care in Rural Areas
    VA remains committed to the delivery of medical care in rural areas 
of our country. For that reason, in 2012, we obligated $248 million to 
support the efforts of the Office of Rural Health to improve access and 
quality of care for enrolled Veterans who live in rural areas. Some 3.4 
million Veterans enrolled in the VA healthcare system live in rural or 
highly rural areas of the country; this represents about 41 percent of 
all enrolled Veterans. For that reason, VA will continue to emphasize 
rural health in our budget planning, including addressing the needs of 
American Indian and Alaska Native (AI/AN) Veterans.
    VA is committed to expanding access to the full range of VA 
programs to eligible AI/AN Veterans. Last year, VA signed a Memorandum 
of Agreement with the Indian Health Service (IHS), through which VA 
will reimburse IHS for direct care services provided to eligible 
American Indian and Alaska Native Veterans. While the national 
agreement applies only to VA and IHS, it will inform agreements 
negotiated between the VA and tribal health programs.
    This follows the agreement already in place between VA and IHS 
whereby nearly 250,000 patients served by IHS have utilized a 
prescription program that allows IHS pharmacies to use VA's 
Consolidated Mail Outpatient Pharmacy (CMOP) to process and mail 
prescription refills for IHS patients. By accessing the service, IHS 
patients can now have their prescriptions mailed to them, in many cases 
eliminating the need to pick them up at an IHS pharmacy.
Women Veterans Medical Care
    Changing demographics are also driving change at VA. Today, we have 
over 2.2 million women Veterans in our country; they are the fastest 
growing segment of our Veterans' population. Since 2009, the number of 
women Veterans enrolled in VA healthcare increased by almost 22 
percent, to 591,500. However, by 2022--less than a decade from now--
their number is projected to spike to almost 2.5 million, and an 
estimated 900,000 will be enrolled in VA healthcare.
    The 2014 budget requests $422 million, an increase of 134 percent 
since 2009, for gender-specific medical care for women Veterans. Since 
2009, we have invested $25.5 million in improvements to women Veterans' 
clinics and opened 19 new ones. Today, nearly 50 percent of our 
facilities have comprehensive women's clinics, and every VA healthcare 
system has designated women's health primary care providers, and has a 
women Veteran's program manager on staff.
    In 2012, VA awarded 32 grants totaling $2 million to VA facilities 
for projects that will improve emergency healthcare services for women 
Veterans, expand women's health education programs for VA staff, and 
offer telehealth programs to female Veterans in rural areas. These new 
projects will improve access and quality of critical healthcare 
services for women. This is the largest number of one-year grants VA 
has ever awarded for enhancing women's health services.
                            Medical Research
    Medical Research is being supported with $586 million in direct 
appropriations in 2014, with an additional $1.3 billion in funding 
support from VA's medical care program and through Federal and non-
Federal grants. VA Research and Development will support 2,224 projects 
during 2014.
    Projects funded in 2014 will be focused on supporting development 
of New Models of Care, identifying or developing new treatments for 
Gulf War Veterans, 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 2014 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 - potentially helping the health of 
America's Veterans and the general public. MVP recently enrolled its 
100,000th volunteer research participant, and by the end of 2013, the 
goal is to enroll at least 150,000 participants in the program.
                    Veterans Benefits Administration
    The 2014 budget request of $2.455 billion for VBA, an increase of 
$294 million in discretionary funds from the 2013 enacted level, is 
vital to the transformation strategy that drives our performance 
improvements focused most squarely on the backlog.
    Virtually all 860,000 claims in the VBA inventory, including the 
600,000 claims that have been at VA for over 125 days and are 
considered backlogged, exist only in paper. Our transition to VBMS and 
electronic claims processing is a massive and crucial phase in VBA 
transformation. VA awarded two VCIP contracts in 2012 to provide 
document conversion services that will populate the electronic claims 
folder, or eFolder, in VBMS with images and data extracted from paper 
and other source material. Without VCIP, we cannot populate the eFolder 
on which the VBMS system relies. The 2014 request for $136 million for 
our scanning services contracts will ensure that we remain on track to 
reach this key goal. In addition, the budget request includes $4.9 
million for help desk support for Veterans using the Veterans On-Line 
Application/eBenefits system.
    VBA projects a beneficiary caseload of 4.6 million in 2014, with 
more than $70 billion in compensation and pension benefits obligations. 
We expect to process 1.2 million compensation claims in 2014, and we 
are pursuing improvements that will enable us to meet the emerging 
needs of Veterans and their families.
Veterans Employment
    Under the leadership of President Obama, VA, DoD, the Department of 
Labor, and the entire Federal government have made Veterans employment 
one of their highest priorities. In August 2011, the President 
announced his comprehensive plan to address this issue and to ensure 
that all of America's Veterans have the support they need and deserve 
when they leave the military, look for a job, and enter the civilian 
workforce. He created a new DoD-VA Employment Initiative Task Force 
that would develop a new training and services delivery model to help 
strengthen the transition of our Veteran Servicemembers from military 
to civilian life. VA has worked closely with other partners in the Task 
Force to identify its responsibilities and ensure delivery of the 
President's vision. On November 21, 2012, the effective date of the VOW 
Act, VA began deployment of the enhanced VA benefits briefings under 
the revised Transition Assistance Program (TAP), called Transition GPS 
(Goals, Plans, Success). VA will also provide training for the optional 
Technical Training Track Curriculum and participate in the Capstone 
event, which will ensure that separating Servicemembers have the 
opportunity to verify that they have met Career Readiness Standards and 
are steered to the resources and benefits available to them as 
Veterans. Accordingly, the 2014 budget requests $104 million to support 
the implementation of Transition GPS and meet VA's responsibilities 
under the VOW Act and the President's Veterans Employment Initiative.
Veterans Job Corps
    In his State of the Union address in 2012, President Obama called 
for a new Veterans Job Corps initiative to help our returning Veterans 
find pathways to civilian employment. The 2014 budget includes $1 
billion in mandatory funding to develop a Veterans Job Corps 
conservation program that will put up to 20,000 Veterans back to work 
over the next five years protecting and rebuilding America. Jobs will 
include park maintenance projects, patrolling public lands, 
rehabilitating natural and recreational areas, and administrative, 
technical, and law enforcement-related activities. 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.
Post 9-11 and other Education Programs
    Since 2009, VA has provided over $25 billion in Post-9/11 GI Bill 
benefits to cover the education and training of more than 893,000 
Servicemembers, Veterans, family members, and survivors. We are now 
working with Student Veterans of America to track graduation and 
training completion rates.
    The Post-9/11 GI Bill continues to be a focus of VBA transformation 
as it implements the Long-Term Solution (LTS). At the end of February 
we had approximately 60,000 education claims pending, 70 percent lower 
than the total claims pending the same time last year. The average days 
to process Post-9/11 GI Bill supplemental claims has decreased by 17 
days, from 23 days in September 2012 to 6 days in February 2013. The 
average time to process initial Post-9/11 GI Bill original education 
benefit claims in February was 24 days.
                    National Cemetery Administration
    The 2014 budget includes $250 million in operations and maintenance 
funding for the National Cemetery Administration (NCA). As we move 
forward into the next fiscal year, NCA projects our workload numbers 
will continue to increase. For 2014, we anticipate conducting 
approximately 121,000 interments of Veterans or their family members, 
maintaining and providing perpetual care for approximately 3.4 million 
gravesites. NCA will also maintain 9,000 developed acres and process 
approximately 345,000 headstone and marker applications.
Review of National Cemeteries
    For the first time in the 150-year history of national cemeteries, 
NCA has completed a self-initiated, comprehensive review of the entire 
inventory of 3.2 million headstones and markers within the 131 national 
cemeteries and 33 Soldiers' Lots it maintains. The information gained 
was invaluable in validating current operations and ensuring a 
sustainment plan is in place to enhance our management practices. The 
review was part of NCA's ongoing effort to ensure the full and accurate 
accounting of remains interred in VA national cemeteries. Families of 
those buried in our national shrines can be assured their loved ones 
will continue to be cared for into perpetuity.
Veterans Employment
    NCA continues to maintain its commitment to hiring Veterans. 
Currently, Veterans comprise over 74 percent of its workforce. Since 
2009, NCA has hired over 400 returning Iraq and Afghanistan Veterans. 
In addition, 82 percent of contracts in 2012 were awarded to Veteran-
owned and service-disabled Veteran-owned small businesses. NCA's 
committed, Veteran-centric workforce is the main reason it is able to 
provide a world-class level of customer service. NCA received the 
highest score--94 out of 100 possible--in the 2010 American Customer 
Satisfaction Index (ACSI) sponsored by the University of Michigan. This 
was the fourth time NCA participated and the fourth time it received 
the top rating in the Nation.
Partnerships
    NCA continues to leverage its partnerships to increase service for 
Veterans and their families. As a complement to the national cemetery 
system, NCA administers the Veterans Cemetery Grant Service (VCGS). 
There are currently 88 operational state and tribal cemeteries in 43 
states, Guam, and Saipan, with 6 more under construction. Since 1978, 
VCGS has awarded grants totaling more than $500 million to establish, 
expand, or improve Veterans' cemeteries. In 2012, these cemeteries 
conducted over 31,000 burials for Veterans and family members.
    NCA works closely with funeral directors and private cemeteries, 
two significant stakeholder groups, who assist with the coordination of 
committal services and interments. Funeral directors may also help 
families in applying for headstones, markers, and other memorial 
benefits. NCA partners with private cemeteries by furnishing headstones 
and markers for Veterans' gravesites in these private cemeteries. In 
January of this year, NCA announced the availability of a new online 
funeral directors resource kit that may be used by funeral directors 
nationwide when helping Veterans and their families make burial 
arrangements in VA national cemeteries.
                         Capital Infrastructure
    A total of $1.1 billion is requested in 2014 for VA's major and 
minor construction programs. The capital asset budget reflects VA's 
commitment to provide safe, secure, sustainable, and accessible 
facilities for Veterans. The request also reflects the current fiscal 
climate and the great challenges VA faces in order to close the gap 
between our current status and the needs identified in our Strategic 
Capital Investment Planning (SCIP) process.
Major Construction
    The major construction request in 2014 is $342 million for one 
medical facility project and three National Cemeteries. The request 
will fund the completion of a mental health building in Seattle, 
Washington, to replace the existing, seismically deficient building. It 
will also increase access to Veteran burial services by providing a 
National Cemetery in Central East Florida; Omaha, Nebraska; and 
Tallahassee, Florida.
    The 2014 budget includes $5 million for NCA for advance planning 
activities. VA is in the process of establishing two additional 
national cemeteries in Western New York and Southern Colorado, 
according to the burial access policies included in the 2011 budget. 
These two new cemeteries, along with the three requested in 2014, will 
increase access to 550,000 Veterans. NCA has obligated approximately 
$16 million to acquire land in 2012 and 2013 for the planned new 
national cemeteries in Central East Florida; Tallahassee, Florida; and 
Omaha, Nebraska.
Minor Construction
    In 2014, the minor construction request is $715 million, an 
increase of 17.8 percent from the 2013 enacted level. It would provide 
for constructing, renovating, expanding and improving VA facilities, 
including planning, assessment of needs, gravesite expansions, site 
acquisition, and disposition. VA is placing a funding priority on minor 
construction projects in 2014 for two reasons. First, our aging 
infrastructure requires a focus on maintenance and repair of existing 
facilities. Second, the minor construction program can be implemented 
more quickly than the long-term major construction program to enhance 
Veterans' services.
    In light of the difficult fiscal outlook for our Nation, it's time 
to carefully consider VA's footprint and our real property portfolio. 
In 2012, VA spent approximately $23 million to maintain unneeded 
buildings. Achieving significant reduction in unneeded space is a 
priority for the Administration and VA. To support this priority, the 
President has proposed a Civilian Property Realignment Act (CPRA), 
which would allow agencies like VA to address the competing stakeholder 
interests, funding issues, and red tape that slows down or prevents the 
Federal Government from disposing of real estate. If enacted by 
Congress, this process would give VA more flexibility to dispose of 
property and improve the management of its inventory.
                              Legislation
    Besides presenting VA's resource requirements to meet our 
commitment to the Nation's Veterans, the President's Budget also 
requests legislative action that we believe will benefit Veterans. 
There are many worthwhile proposals for your consideration, but let me 
highlight a few. For improvements to Veterans healthcare, our budget 
includes a measure to allow VA to provide Veterans with alternatives to 
long-stay nursing homes, and enhance VA's ability to provide 
transportation services to assist Veterans with accessing VA healthcare 
services. Our legislative proposasl also request that Congress make 
numerous improvements to VA's critical homelessness programs, including 
allowing an increased focus on homeless Veterans with special needs, 
including women, those with minor dependents, the chronically mentally 
ill, and the terminally ill.
    We also are putting forward proposals aimed squarely at the 
disability claims backlog - such as establishing standard claims 
application forms--that are reasonable and thoughtful changes that go 
hand-in-hand with the ongoing transformation and modernization of our 
disability claims system. We are offering reforms to our Specially 
Adaptive Housing program that will remove rules that in some 
circumstances can arbitrarily limit the benefit. The budget's 
legislative proposals also include ideas for expanding and improving 
services in our national cemeteries.
    Finally, this budget includes provisions that will benefit Veterans 
and taxpayers by allowing for efficiencies and cost savings in VA's 
operations - for example, we are forwarding a proposal that would 
require that private health plans treat VA as a `participating 
provider' - preventing those plans from limiting payments or excluding 
coverage for Veterans' non-service-connected conditions. VA merits 
having this status, and the additional revenue will fund medical care 
for Veterans. We are also requesting spending flexibility so that we 
can more effectively partner with other federal agencies, including 
DoD, in pursuit of collaborations that will benefit Veterans and 
Servicemembers and deliver healthcare more efficiently.
                                Summary
    Veterans stand ready to help rebuild the American middle class and 
return every dollar invested in them by strengthening our Nation. And 
we, at VA, will continue to implement the President's vision of a 21st 
century VA, worthy of those who, by their service and sacrifice, have 
kept our Nation free. Thanks to the President's leadership and the 
solid support of Congress, we have made huge strides in our journey to 
provide all generations of Veterans the best possible care and benefits 
through improved technology that they earned through their selfless 
service. We are committed to continue that journey, even as the numbers 
of Veterans using VA services increase in the coming years, through the 
responsible use of the resources provided in the 2014 budget and 2015 
advance appropriations requests. Again, thank you for the opportunity 
to appear before you today and for your steadfast support of our 
Nation's Veterans.

                                 
                 Prepared Statement of Jeffrey C. Hall
    Chairman Miller, Ranking Member Michaud and Members of the 
Committee:
    On behalf of the DAV (Disabled American Veterans) and our 1.2 
million members, all of whom are wartime disabled veterans, I am 
pleased to be here today to present recommendations of The Independent 
Budget (IB) for the fiscal year (FY) 2014 budget related to veterans 
benefits and the Veterans Benefits Administration (VBA). The IB is 
jointly produced each year by DAV, AMVETS, Paralyzed Veterans of 
America and Veterans of Foreign Wars. This year's IB contains numerous 
recommendations to improve veterans benefit programs and the claims 
processing system; however, in today's testimony I will highlight just 
some of the most critical ones for this Committee to consider. 
Unfortunately, the Administration's budget proposal was still not 
available at the time this testimony was due, and therefore it does not 
offer comments about the sufficiency or adequacy of that budget 
proposal; however, we are aware that the Administration is proposing a 
13.6 percent increase in funding in an effort to reduce the backlog of 
disability claims, although we do not know the details of how the 
increase will be allocated or the resources used.
    Mr. Chairman, the timely delivery of earned benefits to the 
millions of men and women who have served in our Armed Forces is one of 
the most sacred obligations of the federal government. The award of a 
service-connected disability rating does more than provide compensation 
payments; it is the gateway to an array of benefits that support the 
recovery and transition of veterans, their families and survivors. 
However, when these benefits are delayed or unjustly denied, the 
consequences to veterans and their families can be devastating. For 
those wounded heroes who file claims for disability compensation, the 
wait to receive an accurate rating decision and award can take anywhere 
from a few months to several years; longer if they have to appeal 
incorrect decisions.
    Today there are about 900,000 claims for compensation and pension 
awaiting decisions at VBA, more than double the number pending four 
years ago. Of those, fully 70 percent have been waiting more than 125 
days, VBA's official target for measuring the backlog, which is double 
the number from just two years earlier. Moreover, the length of time it 
takes to process veterans' claims also continues to rise, with the 
average processing time now almost 280 days, far from VBA's target of 
80 days. Looking at these numbers, it is clear that the challenges 
facing VBA are enormous, and in many ways they are the same core 
problems that have plagued VBA for decades. The solution will require 
new technologies and business processes, and most importantly, a 
cultural transformation built upon the foundations of quality, accuracy 
and accountability.
    In early 2010, Secretary Shinseki laid out an extremely ambitious 
goal for VBA to achieve by 2015: process 100 percent of claims in less 
than 125 days, and do so with 98 percent accuracy. Since that time, VBA 
has worked to completely transform their IT systems, business processes 
and corporate culture, while simultaneously continuing to process more 
than a million claims each year. VBA is actively rolling out new 
organizational models and practices, and continuing to develop and 
deploy new technologies almost daily. In the midst of this massive 
transformation, it can be hard to get the proper perspective to measure 
whether their final systems will be successful, but we believe there 
has been sufficient progress to merit continued support of the current 
transformation efforts.
    We urge this Committee and Congress to provide the support and 
resources necessary to complete this transformation as currently 
planned, while continuing to exercise strong oversight to ensure that 
VBA remains focused on the long term goal of creating a new claims 
processing system that decides each claim right the first time. It is 
absolutely essential that VBA complete transformation from an outdated, 
paper-based claims system to a modern, paperless, automated claims 
system. Now is not the time to stop or change direction.
    One of the most important signs of positive change over the past 
four years has been VBA's unprecedented openness and partnership with 
VSOs. Our organizations possess significant knowledge and experience of 
the claims process and collectively we hold power of attorney (POA) for 
millions of veterans who are filing or have filed claims. VBA 
recognized that close collaboration with VSOs could not only reduce its 
workload but also increase the quality of its work. We make VBA's job 
easier by helping veterans prepare and submit better claims, thereby 
requiring less time and resources for VBA to develop and adjudicate 
them. The IBVSOs have also been increasingly consulted about 
initiatives proposed or underway at VBA, including Fully Developed 
Claims (FDC), Disability Benefit Questionnaires (DBQs), the Veterans 
Benefit Management System (VBMS), the Stakeholder Enterprise Portal 
(SEP), and the update of the Department of Veterans Affairs (VA) 
Schedule for Rating Disabilities (VASRD). Both Secretary Shinseki and 
Under Secretary Hickey have consistently reached out to consult and 
collaborate with VSOs and we are confident that this partnership will 
result in better service and outcomes for veterans.
    Since 2009, VBA has made some significant changes in how claims are 
processed. The most important amongst these is the development of the 
new Veterans Benefits Management System (VBMS), its new IT system. VBMS 
has been rolled out to 20 Regional Offices and is scheduled to be fully 
deployed to all remaining Regional Offices (ROs) by mid-year. It is 
important to remember that VBMS is not yet a finished product; rather, 
it continues to be developed and perfected as it is deployed so it is 
still premature to judge whether it will ultimately deliver all of the 
functionality and efficiency required to meet VBA's future claims 
processing needs.
    Another very important milestone was VBA's decision and commitment 
to scan all paper claims files for every new or reopened claim 
requiring a rating-related action, and creating digital e-folders to 
serve as the cornerstone of the new VBMS system. E-folders facilitate 
instantaneous transmission and simultaneous reviewing of claims files. 
At present, there are an estimated 200,000 e-folders and that number 
will continue to grow as the remaining ROs convert to VBMS this year. 
In addition, the Appeals Management Center (AMC) is now working in VBMS 
and able to review e-folders. The Board of Veterans Appeals (BVA) will 
also begin receiving appeals in VBMS on a pilot basis.
    VBA also continues to strengthen its e-Benefits and SEP systems, 
which allow veterans and their representatives to file claims, upload 
supporting evidence and check on the status of pending claims. VBA has 
rolled out a new transformation organizational model (TOM) to every 
Regional Office that has reorganized workflow by segmenting claims into 
different processing lanes depending upon the complexity of the issues 
to be decided for each claim. Other key process improvements that we 
strongly support include the FDC program, which expedites ready-to-rate 
claims, and DBQs, which standardize and encourage the collection of 
private medical evidence to aid in rating decisions. To improve the 
accuracy of their work, VBA also fulfilled one of our longstanding 
recommendations by creating local Quality Review Teams (QRTs), whose 
primary function is to monitor claims processing in real time to catch 
and correct errors before rating decisions are finalized.
CLAIMS PROCESSING RECOMMENDATIONS
    Over the next year, Congress must continue to perform aggressive 
oversight of VBA's ongoing claims transformation efforts, particularly 
new IT programs, while actively supporting the completion and full 
implementation of these vital initiatives. In order for VBA's current 
transformation plans to have any reasonable chance of success, VBA must 
be allowed to complete and fully implement them. Congress must continue 
to fully fund the completion of VBMS, including providing sufficient 
funding for digital scanning and conversion of legacy paper files, as 
well as the development of new automation components for VBMS. At the 
same time, the IBVSOs recommend that Congress encourage an independent, 
expert review of VBMS while there is still time to make course 
corrections.
    Congress must also encourage and support VBA's efforts to develop a 
new corporate culture based on quality, accuracy and accountability, as 
well as strengthen the transmission and adoption of these values and 
appropriate supportive policies throughout all VBA Regional Offices. 
The long-term success of all of VBA's transformation efforts will 
depend on the degree to which these changes are institutionalized and 
disseminated from the national level to the local level. In addition to 
strengthening training, testing and quality control, VBA must be 
encouraged to properly align measuring and reporting functions with 
desired goals and outcomes for both its leadership and employees. For 
example, as long as the most widely reported metric of VBA's success is 
the Monday Morning Workload Reports, particularly the weekly update on 
the size of the backlog, there will remain tremendous pressure 
throughout VBA to place production gains ahead of quality and accuracy. 
Similarly, if individual employee performance standards set unrealistic 
production goals, or fail to properly credit ancillary activity that 
contributes to quality but not production, those employees will be 
incentivized to focus on activities that maximize only production. VBA 
must develop more and better measures of work performance that focus on 
quality and accuracy, both for the agency as a whole and for individual 
employees. Furthermore, VBA must ensure that employee performance 
standards are based on accurate measures of the time it takes to 
properly perform their jobs.
    Congress must also ensure that VBA does not change its reporting or 
metrics for the sole purpose of achieving statistical gains, commonly 
referred to as ``gaming the system,'' in the absence of actual 
improvements to the system. For example, VBA recently announced that 
they will change how errors are scored for multi-issue claims. 
Previously, a claim would be considered to have an error if one mistake 
on at least one issue in the claim was detected during a STAR review. 
Under the new error policy, if there are 10 issues in the claim and a 
single error is found on one of the issues, that would now be scored as 
only 0.1 errors for that claim. While this may be a more valid way of 
measuring technical accuracy, it also has the effect of lowering the 
error rate without actually lowering the number of errors committed.
    To make the system more efficient, Congress should enact and 
promote legislation and policies that maximize the use of private 
medical evidence to conserve VBA resources and enable quicker, more 
accurate rating decisions for veterans. The IBVSOs have long encouraged 
VBA to make greater use of private medical evidence when making claims 
decisions, which would save veterans time and VBA the cost of 
unnecessary examinations. DBQs, many of which were developed in 
consultation with IBVSO experts, are designed to allow private 
physicians to submit medical evidence on behalf of veterans they treat 
in a format that aids rating specialists. However, we continue to 
receive credible reports from across the country that many Veterans 
Service Representatives (VSRs) and Rating Veterans Service 
Representatives (RVSRs) do not accept the adequacy of DBQs submitted by 
private physicians, resulting in redundant VA medical examinations 
being ordered and valid evidence supporting veterans' claims being 
rejected.
    Although there are currently 81 approved DBQs, VBA has only 
released 71 of them to the public for use by private physicians. In 
particular, VBA should allow private treating physicians to complete 
DBQs for medical opinions about whether injuries and disabilities are 
service connected, as well as DBQs for PTSD, which current VBA rules do 
not allow; only VA physicians can make PTSD diagnoses for compensation 
claims. Congress should work with VBA to make both of these DBQs 
available to private physicians.
    To further encourage the use of private medical evidence, Congress 
should amend title 38, United States Code, section 5103A(d)(1) to 
provide that, when a claimant submits private medical evidence, 
including a private medical opinion, that is competent, credible, 
probative, and otherwise adequate for rating purposes, the Secretary 
shall not request a VA medical examination. This legislative change 
would require VSRs and RVSRs to first document that private medical 
evidence was inadequate for rating purposes before ordering 
examinations, which are often unnecessary.
VBA STAFFING AND RESOURCE RECOMMENDATIONS
    Over the past five years, the VBA has seen a significant staffing 
increase because Congress recognized that rising workload, particularly 
claims for disability compensation, could not be addressed without 
additional personnel and thus provided additional resources each year 
to do so. More than 5,000 full time employee equivalents (FTEE) were 
added to VBA over the past five years, a 33 percent increase, with most 
of that increase going to the Compensation Service. In fiscal year (FY) 
2013, VBA's budget supports an additional 450 FTEE above the FY 2012 
authorized level.
Compensation Service Staffing
    Since VBA is in the middle of a comprehensive transformation that 
makes changes in the roles and responsibilities of its employees, it is 
difficult to determine whether Compensation Service's staffing levels 
are sufficient now or will be in the near future. Without knowing the 
outcome of the transformation, it is difficult to estimate whether they 
will require additional or even fewer personnel to address the future 
workload they will need to process. For this reason, the IB does not 
recommend a specific staffing increase for FY 2014, although it is 
important that Congress and VBA be certain that staffing levels are 
regularly adjusted to remain aligned with changes in workload and 
productivity.
    In this regard, it is imperative that VBA and Congress continue to 
closely monitor Compensation Service's actual and projected workload, 
measurable and documented increases in productivity resulting from the 
new organizational model and the VBMS, as well as personnel changes, 
such as attrition, in order to ensure that staffing is sufficient. 
Furthermore, VBA must develop a better, more consistent and data-driven 
method of determining future staffing requirements to more accurately 
inform future funding requirements.
Board of Veterans' Appeals Staffing
    Based on historical trends, the number of new appeals to the Board 
averages approximately 5 percent of all claims received, so as the 
number of claims processed by the VBA is expected to rise 
significantly, so too will the Board's workload rise accordingly. Yet 
the budget provided to the Board has been declining, forcing it to 
reduce the number of employees. Although the Board had been authorized 
to have up to 544 FTEE in FY 2011, its appropriated budget could 
support only 532 FTEE that year. In FY 2012, that number was further 
reduced to 510. At present, due to cost-saving initiatives, the Board 
may be able to support as many as 518 FTEE with the FY 2013 budget; 
however, this does not correct the downward trend over the past several 
years, particularly as workload continues to rise. Based on the 
expected workload increase in FY 2014, and adjusting for projected 
productivity gains, the IBVSOs believe that the Board should have at 
least 544 FTEE in FY 2014 in order to reduce its backlog.
Vocational Rehabilitation and Employment Service Staffing
    In FY 2012, VA's Vocational Rehabilitation and Employment (VR&E) 
program, also known as the VetSuccess program, had 121,000 participants 
in one or more of the five assistance tracks of VR&E's VetSuccess 
program, an increase of 12.3 percent above the FY 2011 participation 
level of 107,925 veterans. In FY 2012, VR&E had a total of 1,446 FTEE, 
and anticipates an increase of approximately 150 FTEE for FY 2013. 
Given the estimated 10 percent workload increases for both FY 2013 and 
FY 2014, the IB estimates that VR&E would need an additional 230 
counselors in FY 2014 in order to reduce their counselor-to-client 
ratio down to their stated goal of 1:125.
    An extension for the delivery of VR&E assistance at a key 
transition point for veterans is through the VetSuccess on Campus 
program. This program provides support to student veterans in 
completing college or university degrees. VetSuccess on Campus has 
developed into a program that places a full-time Vocational 
Rehabilitation Counselor and a part-time Vet Center Outreach 
Coordinator at an office on campus specifically for the student 
veterans attending that college. These VA officers are there to help 
the transition from military to civilian and student life. The 
VetSuccess on Campus program is designed to give needed support to all 
student veterans, whether or not they are entitled to one of VA's 
education benefit programs.
    VA is expected to increase its VetSuccess on Campus program from 34 
colleges in FY 2012 to 50 colleges in FY 2013. In FY 2014, the IBVSOs 
recommend that VR&E further expand this program to create a presence on 
a total of at least 70 college campuses, which would require 
approximately 20 additional FTEE.
RECOMMENDATIONS FOR IMPROVEMENTS TO VA BENEFITS
Automatic Annual Cost-of-Living Adjustment (COLA)
    Congress has annually authorized increases in compensation and 
dependency and indemnity compensation (DIC) by the same percent as 
Social Security is increased. Under current law, the government 
monitors inflation throughout the year and, if inflation occurs, 
automatically increasing Social Security payments by the percent of 
increase for the following year, which the Congress then applies to 
veterans programs.
    While Congress has always increased compensation and DIC based on 
inflation, there have been years when such increases were delayed, 
which puts unnecessary financial strain on veterans and their 
survivors. The IB veterans service organizations urge Congress to enact 
legislation indexing compensation and DIC to Social Security COLA 
increases.
End Rounding Down of Veterans' and Survivors' Benefits Payments
    In 1990, Congress, in an omnibus reconciliation act, mandated that 
veterans' and survivors' benefit payments be rounded down to the next 
lower whole dollar. While this policy was initially limited to a few 
years, Congress eventually made it permanent. The cumulative effect of 
this provision of the law effectively levies a tax on totally disabled 
veterans and their survivors. Congress should repeal the current policy 
of rounding down veterans' and survivors' benefits payments.
Reject Any Proposal to Use the ``Chained CPI''
    In the past year, there has been much discussion about replacing 
the current CPI formula used for calculating the annual Social Security 
COLA with the Bureau of Labor Statistics (BLS) new formula commonly 
termed the ``chained CPI.'' Such a change would be expected to 
significantly reduce the rates paid to Social Security recipients, and 
thereby help to lower the federal deficit. Since the Social Security 
COLA is also applied annually to the rates for VA disability 
compensation, DIC, and pensions for wartime veterans and survivors with 
limited incomes, its application would mean systematic reductions for 
millions of veterans, their dependents and survivors who rely on VA 
benefit payments. The IBVSOs urge Congress to reject any and all 
proposals to use the ``chained CPI'' for determining Social Security 
COLA increases, which would have the effect of significantly reducing 
the level of vital benefits provided to millions of veterans and their 
survivors.
    The IBVSOs also note that the CPI index used for Social Security 
does not include increases in the cost of food or gasoline, both of 
which have risen significantly in recent years. While no inflation 
index is perfect, the IBVSOs believe that VA should examine whether 
there are other inflation indices that would more appropriately 
correlate with the increased cost of living experienced by disabled 
veterans and their survivors.
End Prohibition against Concurrent Receipt of VA Disability 
        Compensation and Military Longevity Retired Pay
    Many veterans retired from the armed forces based on longevity of 
service must forfeit a portion of their retired pay, earned through 
faithful performance of military service, before they receive VA 
compensation for service-connected disabilities. This is inequitable--
military retired pay is earned by virtue of a veteran's career of 
service on behalf of the nation, careers of usually more than 20 years. 
Entitlement to compensation, on the other hand, is paid solely because 
of disability resulting from military service, regardless of the length 
of service. Most nondisabled military retirees pursue second careers 
after serving in order to supplement their income, thereby justly 
enjoying a full reward for completion of a military career with the 
added reward of full civilian employment income. In contrast, military 
retirees with service-connected disabilities do not enjoy the same full 
earning potential since their earning potential is reduced commensurate 
with the degree of service-connected disability.
    In order to place all disabled longevity military retirees on equal 
footing with nondisabled military retirees, there should be no offset 
between full military retired pay and VA disability compensation. To 
the extent that military retired pay and VA disability compensation 
offset each other, the disabled military retiree is treated less fairly 
than is a nondisabled military retiree by not accounting for the loss 
in earning capacity. Moreover, a disabled veteran who does not retire 
from military service but elects instead to pursue a civilian career 
after completing a service obligation can receive full VA disability 
compensation and full civilian retired pay--including retirement from 
any federal civil service position.
    While Congress has made progress in recent years in correcting this 
injustice, current law still provides that service-connected veterans 
rated less than 50 percent disabled who retire from the armed forces on 
length of service may not receive disability compensation from VA in 
addition to full military retired pay. The IBVSOs believe the time has 
come to remove this prohibition completely. Congress should enact 
legislation to repeal the inequitable requirement that veterans' 
military longevity retired pay be offset by an amount equal to the 
disability compensation awarded to disabled veterans rated less than 50 
percent, the same as exists for those rated 50 percent or greater.
SURVIVOR BENEFITS
Increase DIC for Surviving Spouses of Servicemembers
    The current rate of compensation paid to the survivors of certain 
deceased veterans rated permanently and totally disabled and deceased 
service members is inadequate and inequitable. Under current law, the 
surviving spouse of a veteran who had a total disability rating is 
entitled to the basic rate of Dependency and Indemnity Compensation. A 
supplemental payment is provided to those spouses who were married for 
at least eight years during which time the veteran was rated 
permanently and totally disabled. However, surviving spouses of 
veterans or military service members who die before the eight-year 
eligibility period, or who die on active duty, respectively, only 
receive the basic rate of DIC.
    Insofar as DIC payments are intended to provide surviving spouses 
with the means to maintain some semblance of financial stability after 
losing their loved ones, the rate of payment for service-related deaths 
of any kind should not vastly differ. Surviving spouses, regardless of 
the status of their sponsors at the time of death, face the same 
financial hardships once deceased sponsors' incomes no longer exists. 
Congress should authorize DIC eligibility at increased rates to 
survivors of service members who died either before the eight-year 
eligibility period passes or while on active duty at the same rate paid 
to the eligible survivors of totally disabled service-connected 
veterans who die after the eight-year eligibility period.
Repeal of the DIC-SBP Offset
    The current requirement that the amount of an annuity under the 
Survivor Benefit Plan (SBP) be reduced on account of, and by an amount 
equal to, DIC is inequitable. A veteran disabled in military service is 
compensated for the effects of service-connected disability. When a 
veteran dies of service-connected causes, or following a substantial 
period of total disability from service-connected causes, eligible 
survivors or dependents receive DIC from the VA. This benefit 
indemnifies survivors, in part, for the losses associated with the 
veteran's death from service-connected causes or after a period of time 
when the veteran was unable, because of total disability, to accumulate 
an estate for inheritance by survivors.
    Career members of the armed forces earn entitlement to retired pay 
after 20 or more years of service. Survivors of military retirees have 
no entitlement to any portion of the veteran's military retirement pay 
after his or her death, unlike many retirement plans in the private 
sector. Under the SBP, deductions are made from the veteran's military 
retirement pay to purchase a survivor's annuity. This is not a 
gratuitous benefit, but is purchased by a retiree. Upon the veteran's 
death, the annuity is paid monthly to eligible beneficiaries under the 
plan. If the veteran died from other than service-connected causes or 
was not totally disabled by service-connected disability for the 
required time preceding death, beneficiaries receive full SBP payments. 
However, if the veteran's death was a result of military service or 
after the requisite period of total service-connected disability, the 
SBP annuity is reduced by an amount equal to the DIC payment. When the 
monthly DIC rate is equal to or greater than the monthly SBP annuity, 
beneficiaries lose the SBP annuity in its entirety.
    The IBVSOs believe this offset is inequitable because no 
duplication of benefits is involved. Payments under the SBP and DIC 
programs are made for different purposes. Under the SBP, coverage is 
purchased by a veteran and at the time of death, paid to his or her 
surviving beneficiary. On the other hand, DIC is a special indemnity 
compensation paid to the survivor of a service member who dies while 
serving in the military, or a veteran who dies from service-connected 
disabilities. In such cases, DIC should be added to the SBP, not 
substituted for it. Surviving spouses of federal civilian retirees who 
are veterans are eligible for DIC without losing any of their purchased 
federal civilian survivor benefits. The offset penalizes survivors of 
military retirees whose deaths are under circumstances warranting 
indemnification from the government separate from the annuity funded by 
premiums paid by the veteran from his or her retired pay. Congress 
should repeal the inequitable offset between DIC and the SBP because 
there is no duplication between these two distinct benefits.
Retention of Remarried Survivors' Benefits at Age 55
    Congress should lower the age required for remarriage for survivors 
of veterans who have died on active duty or from service-connected 
disabilities to be eligible for retention of DIC to conform with the 
requirements of other federal programs. Current law allows retention of 
DIC on remarriage at age 57 or older for eligible survivors of veterans 
who die on active duty or of a service-connected injury or illness. 
Although the IBVSOs appreciate the action Congress took to allow 
restoration of this rightful benefit, the current age threshold of 57 
years is arbitrary.
    Remarried survivors of retirees of the Civil Service Retirement 
System, for example, obtain a similar benefit at age 55. This would 
also bring DIC in line with SBP rules that allow retention with 
remarriage at the age of 55. Equity with beneficiaries of other federal 
programs should govern Congressional action for this deserving group. 
Congress should enact legislation to enable survivors to retain DIC on 
remarriage at age 55 for all eligible surviving spouses.
    Mr. Chairman, that concludes my statement and I would be happy to 
answer any questions you or other members of the Committee may have.

                                 
                    Prepared Statement of Carl Blake
    Chairman Miller, Ranking Member Michaud, and members of the 
Committee, as one of the four co-authors of The Independent Budget 
(IB), Paralyzed Veterans of America (PVA) is pleased to present the 
views of The Independent Budget regarding the funding requirements for 
the Department of Veterans Affairs (VA) for FY 2014.
    As the country faces a difficult and uncertain fiscal future, the 
VA likewise faces significant challenges ahead. Congress and the 
Administration continue to face immense pressure to reduce federal 
spending. With these thoughts in mind, we cannot emphasize enough the 
importance of ensuring that sufficient, timely and predictable funding 
is provided to the VA. While we are disappointed that it has taken 
nearly two additional months for the Administration to release its 
funding recommendations for VA programs for FY 2014, and the advance 
appropriation recommendation for FY 2015, we are particularly 
interested in reviewing in greater detail the updated analysis of the 
funding needs for health care programs for FY 2014 in light of the 
complex budget deficit and debt negotiations that have been going on 
for over a year now.
    Meanwhile, The Independent Budget co-authors are particularly 
concerned that the broken appropriations process continues to have a 
negative impact on the operations of the VA. Once again this year 
Congress failed to fully complete the appropriations process in the 
regular order, instead choosing to fund the federal government through 
a 6-month Continuing Resolution and subsequently completing the 
appropriations work for the current fiscal year nearly 6 months into 
the year. As a result of the enactment of advance appropriations, the 
health care system is generally shielded from the difficulties 
associated with late appropriations (an occurrence that has become the 
rule, not the exception). However, we cannot be certain that health 
care operations have not been negatively impacted by this 6-month 
continuing resolution. Moreover, the rest of the operations of the VA 
have most certainly been hampered by this broken process.
    The Independent Budget co-authors remain concerned about steps VA 
has taken in recent years in order to generate resources to meet ever-
growing demand on the VA health-care system. The Administration 
continues to rely upon ``management improvements,'' a popular gimmick 
that was used by previous Administrations to generate savings and 
offset the growing costs to deliver care. Unfortunately, these savings 
were often never realized leaving VA short of necessary funding to 
address ever-growing demand on the health-care system.
    Additionally, the VA continues to overestimate and underperform in 
its medical care collections. Overestimating collections estimates 
affords Congress the opportunity to appropriate fewer discretionary 
dollars for the health care system. However, when the VA fails to 
achieve those collections estimates, it is left with insufficient 
funding to meet the projected demand. As long as this scenario 
continues, the VA will find itself falling farther and farther behind 
in its ability to care for those men and women who have served and 
sacrificed for this nation. The fact that the VA continues to 
experience problems with its medical care collections reflects an even 
greater need to Congress to properly analyze, and if necessary, revise 
the advance appropriations from the previous year to ensure that the VA 
health care system is getting the resources it needs.
Funding for FY 2014
    For FY 2014, The Independent Budget recommends approximately $58.8 
billion for total medical care, an increase of $3.3 billion over the FY 
2013 operating budget. Meanwhile, the Administration recommended, and 
Congress recently approved in P.L. 113-6, the ``Full-Year Continuing 
Appropriations Act,'' an advance appropriation for FY 2014 of 
approximately $54.4 billion in discretionary funding for VA medical 
care. When combined with the $3.1 billion Administration projection for 
medical care collections, the total available operating budget 
recommended for FY 2014 is approximately $57.5 billion. We will be very 
interested to see if the Administration thoroughly revises the original 
advance appropriations estimate for FY 2014 in the budget for this 
year.
    The medical care appropriation includes three separate accounts--
Medical Services, Medical Support and Compliance, and Medical 
Facilities--that comprise the total VA health-care funding level. For 
FY 2014, The Independent Budget recommends approximately $47.4 billion 
for Medical Services, approximately $800 million more than the advance 
appropriations included in P.L. 113-6 (when medical care collections 
are also taken into account). Our Medical Services recommendation 
includes the following recommendations:

    Current Services Estimate . . . . . . . . . . . . . . . . . . . . . 
. . . . . . . . . $45,552,079,000
    Increase in Patient Workload . . . . . . . . . . . . . . . . . . . 
. . . . . . . . ..$1,184,999,000
    Additional Medical Care Program Costs . . . .. . . . . . . . . . . 
. . . . . . $675,000,000
    Total FY 2014 Medical Services . . . . . . . . . . . . . . . . . . 
. . . . . . . . $47,412,078,000

    Our growth in patient workload is based on a projected increase of 
approximately 81,200 new unique patients--priority groups 1-8 veterans 
and covered nonveterans. We estimate the cost of these new unique 
patients to be approximately $827 million. The increase in patient 
workload also includes a projected increase of 96,500 new Operation 
Enduring Freedom and Operation Iraqi Freedom (OEF/OIF), as well as 
Operation New Dawn (OND) veterans at a cost of approximately $358 
million. Our recommendations represent an increase in projected 
workload in this population of veterans over previous years as a result 
of the withdrawal of forces from Iraq, the drawdown of forces in 
Afghanistan, and a potential drawdown in the actual number of service 
members currently serving in the Armed Forces. And yet, we believe that 
growth in demand for this cohort specifically could be far greater 
given the changing military policies mentioned above. In fact, we 
believe that recent reporting from the VA suggests that the actual 
number of new unique OEF/OIF/OND veterans is greater than 120,000. This 
leads us to conclude that our estimate of cost for this population 
should be even greater.
    Finally, The Independent Budget believes that there are additional 
projected funding needs for VA. Specifically, we believe there is real 
funding needed to address issues in the VA's long-term care program and 
to provide additional centralized prosthetics funding (based on actual 
expenditures and projections from the VA's prosthetics service). In 
order to support the rebalancing of VA long-term care in FY 2014, we 
believe $112 million should be provided. Additionally, we believe $75 
million should be targeted at the VA's Veteran Directed-Home and 
Community Based Services (VD-HCBS) program. The remainder of the $375 
million that the IB recommends for long-term care services would begin 
to restore the VA's long-term care capacity to the level mandated by 
Public Law 106-117, the ``Veterans Millennium Health Care and Benefits 
Act.'' In order to meet the increase in demand for prosthetics, the IB 
recommends an additional $300 million. This increase in prosthetics 
funding reflects an increase in expenditures from FY 2012 to FY 2013 
and the expected continued growth in expenditures for FY 2014.
    For Medical Support and Compliance, The Independent Budget 
recommends approximately $5.84 billion. Finally, for Medical 
Facilities, The Independent Budget recommends approximately $5.57 
billion. While our recommendation does not include an additional 
increase for nonrecurring maintenance (NRM), it does reflect a FY 2014 
baseline of approximately $750 million. While we appreciate the 
significant increases in the NRM baseline over the last couple of 
years, total NRM funding still lags behind the recommended two to four 
percent of plant replacement value. In fact, VA should actually be 
receiving at least $1.7 billion annually for NRM. Meanwhile, we have 
serious concerns with the fact that the advance appropriation for 
Medical Facilities included in P.L. 113-6 slashes funding for this 
account and for NRM specifically. This level of funding, particularly 
if the trend continues in the coming years, will have a devastating 
impact on the ability of the VA to meet the maintenance needs of the 
health care system.
    For Medical and Prosthetic Research, The Independent Budget 
recommends $611 million. This represents approximately a $28 million 
increase over the FY 2013 appropriated level. The VA research program 
is a jewel within the VA that we support without hesitation or 
reservation. That program and its nearly 4,000 principal investigators 
have made myriad improvements not only to veterans' health in VA care, 
but have elevated the standard of health care of the nation and the 
world. Despite scientific discoveries and prosthetic inventions too 
numerous to mention here but that are well known, the Administration 
for the third year running requested either reduced or flat funding for 
VA research, and Congress effectively acquiesced. From FY 2011 through 
the FY 2013 appropriation, virtually nothing has been added by Congress 
to that program's budget baseline. No allowance has been made to cover 
uncontrollable research inflation, which averages around 3 percent 
annually; no funds have been provided for new initiatives beyond the 
baseline; and no funds have been requested or provided to help repair 
or upgrade VA's research laboratories, concerning which a 2012 
independent evaluation estimated that almost $800 million would be 
required to bring them up to par. And disappointingly, no funds have 
been requested for special research initiatives focused on the needs of 
Iraq and Afghanistan veterans. These are major lapses that deserve 
correction.
Advance Appropriations for FY 2015
    As explained previously, P.L. 111-81 required the President's 
budget submission to include estimates of appropriations for the 
medical care accounts for FY 2013 and subsequent fiscal years. With 
this in mind, the VA Secretary is required to update the advance 
appropriations projections for the upcoming fiscal year (FY 2014) and 
provide detailed estimates of the funds necessary for the medical care 
accounts for FY 2015.
    For the first time this year, The Independent Budget offers 
baseline projections for funding for the medical care accounts for FY 
2015. While we have previously deferred to the Administration and 
Congress to provide sufficient funding through the advance 
appropriations process, we have growing concerns that this 
responsibility is not being taken seriously. The fact that for two 
fiscal years in a row the Administration recommended funding levels 
that were not changed in any appreciable way upon review, and the fact 
that Congress simply signed off on those recommendations without 
thorough analysis, leads us to conclude that VA funding is falling 
farther and farther behind the growth in demand for services. We 
believe the continued feedback from veterans around the country about 
long wait times and lack of access to services affirms this belief. As 
such, we have decided to offer our own estimates of what we believe the 
true resource needs will be for the VA health care system in FY 2015.
    For FY 2015, The Independent Budget recommends approximately $61.6 
billion for total medical care. Our recommendation includes 
approximately $49.8 billion for Medical Services. Our Medical Services 
recommendation includes the following recommendations:

    Current Services Estimate . . . . . . . . . . . . . . . . . . . . . 
. . . . . . . . . $48,042,797,000
    Increase in Patient Workload . . . . . . . . . . . . . . . . . . . 
. . . . . . . . ..$1,105,821,000
    Additional Medical Care Program Costs . . . .. . . . . . . . . . . 
. . .$675,000,000
    Total FY 2015 Medical Services . . . . . . . . . . . . . . . . . . 
. . . . . . . . .$49,823,618,000

    Our growth in patient workload is based on a projected increase of 
approximately 60,000 new unique patients--priority groups 1-8 veterans 
and covered nonveterans. We estimate the cost of these new unique 
patients to be approximately $737 million. The increase in patient 
workload also includes a projected increase of 96,500 new OEF/OIF/OND 
veterans at a cost of approximately $369 million. Meanwhile, we are 
particularly interested to see the trends that the VA Budget Request 
projects for new utilization in the coming years. While the growth in 
utilization of some new unique patients seems to be trending downward, 
we believe that the OEF/OIF/OND population will continue to trend 
upward as the military services drawdown their forces and as worldwide 
conflicts end. Additionally, it remains to be seen what impact the full 
implementation of the Affordable Care Act will have on utilization of 
VA health care services.
    As with FY 2014, The Independent Budget believes that there are 
additional projected funding needs for VA. In FY 2015, the IB once 
again believes that $375 million should be directed towards VA's long-
term care program. Additionally, we believe that a continued increase 
in centralized prosthetics funding will be essential. In order to meet 
the continued increase in demand for prosthetics, the IB recommends an 
additional $300 million. Finally, for Medical Support and Compliance, 
The Independent Budget recommends approximately $6.14 billion. 
Meanwhile, for Medical Facilities, The Independent Budget recommends 
approximately $5.69 billion.
    Additionally, GAO's responsibility is more important than ever, 
particularly in light of their findings concerning the FY 2012 budget 
submission last year. The GAO report that analyzed the FY 2012 
Administration budget identified serious deficiencies in the budget 
formulation of VA. Yet these concerns were not appropriately addressed 
by Congress or the Administration. This analysis and the subsequent 
lack of action to correct these deficiencies simply affirm the ongoing 
need for the GAO to evaluate the budget recommendations of VA. For this 
reason, we would like to thank Representative Brownley for introducing 
H.R. 806, the ``Veterans Healthcare Improvement Act.'' This legislation 
permanently establishes the Government Accountability Office's 
reporting requirements as a part of VA advance appropriations. We hope 
that the Committee will give this legislation consideration as soon as 
possible, and we urge all members of the Committee to support the bill.
    Finally, we would like to applaud Chairman Miller and Ranking 
Member Michaud for introducing H.R. 813, the ``Putting Veterans Funding 
First Act of 2013.'' This legislation requires all accounts of the VA 
to be funded through the advance appropriations process. It would 
provide protection for the operations of the entire VA from the 
political wrangling that occurs as a part of the appropriations process 
every year.
    In the end, it is easy to forget that the people who are ultimately 
affected by wrangling over the budget are the men and women who have 
served and sacrificed so much for this nation. We hope that you will 
consider these men and women when you develop your budget views and 
estimates, and we ask that you join us in adopting the recommendations 
of The Independent Budget.
    This concludes my testimony. I will be happy to answer any 
questions you may have.
Information Required by Rule XI 2(g)(4) of the House of Representatives
    Pursuant to Rule XI 2(g)(4) of the House of Representatives, the 
following information is provided regarding federal grants and 
contracts.
                            Fiscal Year 2013
    No federal grants or contracts received.
                            Fiscal Year 2012
    No federal grants or contracts received.
                            Fiscal Year 2011
    Court of Appeals for Veterans Claims, administered by the Legal 
Services Corporation--National Veterans Legal Services Program--
$262,787.

                                 
                 Prepared Statement of Diane M. Zumatto
    Chairman Miller, Ranking Member Michaud and Members of the 
Committee:
    On behalf of AMVETS (American Veterans) and our over 500,000 
members, I appreciate the opportunity to be here today to share 
recommendations from The Independent Budget (IB) for fiscal year (FY) 
2014. In light of the ongoing fiscal challenges facing our nation and 
the growing demanding for VA services, the IBVSOs call on Congress and 
the Administration to make it their priority to ensure that the VA 
continually receives sufficient, timely and predictable funding. It is 
unfortunate that the Administration's funding recommendations for VA in 
FY 2014, as well as, the advance appropriations recommendation for FY 
2015, have been delayed by almost two months and The IBVSOs are greatly 
concerned about how VA programs funding may be impacted going forward. 
Additionally, the ongoing breakdown in the appropriations process is a 
major concern to the IBVSOs and it will most certainly have a negative 
effect on all VA operations.
    In the midst of all the budget and spending woes, the IBVSOs hope 
that neither Congress nor the Administration forgets the sacred 
obligation they have to those who serve and protect this country. Our 
nation must remain steadfast and committed to ensuring that our 
military, veterans, their families and survivors receive their earned 
benefits in a timely and efficient manner. This commitment begins when 
an individual raises their hand during their enlistment ceremony and 
should never end. Among the most important parts of this commitment to 
veterans involves the transition process and finding post-military 
employment. Congress and the Administration need to ensure that 
veterans have every opportunity to find living-wage work when they 
return home, receive the health care and benefits they've earned and 
have the chance to get a college education through VA's education 
benefit programs, such as the post-9/11 GI Bill.
    The FY 2014 Independent Budget (IB) covers a myriad of veteran 
related issues and makes numerous recommendations to improve veterans 
benefit programs and the claims processing system; however, the focus 
of my testimony will be limited to:

      the Transition Assistance Program (T.A.P.);
      Veterans and Post-Service Licensure and Credentials, and
      the National Cemetery Administration

    Since, the Administration's budget proposal is still not available 
at this time; this testimony does not include any comments about the 
satisfactoriness or un-satisfactoriness of the upcoming budget 
proposal.
National Cemetery Administration (NCA)
    It must always be remembered that the most important obligation of 
the NCA is to honor the memory of America's brave men and women who 
have so selflessly served in the United States armed forces. Therefore 
there is no more sacrosanct responsibility than the dignified and 
respectful recovery, return and burial of our men and women in uniform. 
This responsibility makes it incumbent upon NCA to maintain our NCA 
cemeteries as national shrines dedicated to the memory of these heroic 
men and women.
    The IBSVOs would like to acknowledge the dedication and commitment 
demonstrated by the NCA leadership and staff in their continued 
devotion to providing the highest quality of service to veterans and 
their families. It is the opinion of the IBVSOs that the NCA continues 
to meet its goals and the goals set forth by others because of its true 
dedication and care for honoring the memories of the men and women who 
have so selflessly served our nation. We applaud the NCA for 
recognizing that it must continue to be responsive to the preferences 
and expectations of the veterans' community by adapting or adopting new 
interment options and ensuring access to burial options in the 
national, state and tribal government-operated cemeteries.
    One of the areas that NCA does a good job in is forecasting the 
future needs of our veterans by:

      securing land for additional cemeteries, including two 
new national cemeteries in Florida and working in CO & NY;
      getting the word out on burial benefits to stakeholders. 
Including developing new online resources for Funeral Directors;
      making it easier for family members to locate and 
chronicle loved ones by partnering with Ancestry.com to Index historic 
burial records. This partnership will bring burial records from 
historic national cemetery ledgers (predominantly of Civil War 
interments) into the digital age making them available to researchers 
and those undertaking historical and genealogical research. From the 
1860s until the mid-20th century, U.S. Army personnel tracked national 
cemetery burials in hand-written burial ledgers or ``registers.'' Due 
to concern for the fragile documents and a desire to expand public 
access to the ledger contents, VA's National Cemetery Administration 
(NCA) duplicated about 60 hand-written ledgers representing 36 
cemeteries using a high-resolution scanning process. The effort 
resulted in high quality digital files that reproduced approximately 
9,344 pages and 113,097 individual records. NCA then transferred the 
original ledgers to the National Archives and Records Administration 
(NARA) where they will be preserved. In addition to the NCA's ledgers, 
NARA was already the steward of at least 156 military cemetery ledgers 
transferred from the Army years ago.
      awarding grant money for State and Tribal Veterans 
Cemeteries; and
      expanding burial options in rural areas - The Rural 
Initiative. This program provides full burial services to small rural 
Veteran populations where there is no available burial option from 
either a VA national, State or Tribal Veterans cemetery. This 
initiative will build small National Veterans Burial Grounds in rural 
areas where the unserved Veteran population is less than 25,000 within 
a 75-mile radius. VA's current policy for establishing new national 
cemeteries is to build where the unserved Veteran population is 80,000 
or more within a 75-mile radius.
      A National Veterans Burial Ground will be a small three 
to five acre NCA-managed section within an existing public or private 
cemetery. NCA will provide a full range of burial options and control 
the operation and maintenance of these lots. These sections will be 
held to the same National Shrine Standards as VA national cemeteries. 
Over the next six years VA plans to open eight National Veterans Burial 
Grounds in: Fargo, North Dakota; Rhinelander, Wisconsin; Cheyenne, 
Wyoming; Laurel, Montana; Idaho Falls, Idaho; Cedar City, Utah; Calais, 
Maine; and Elko, Nevada. This option will increase access to burial 
benefits to rural veterans and will help NCA to reach its strategic 
goal of providing a VA burial option to 94 percent of Veterans within a 
reasonable distance (75 miles) of their residence.

    The IBVSOs also believe it is important to recognize the NCA's 
efforts in employing both disabled and homeless veterans, which is 
another area that NCA leads the way among federal agencies. Programs 
include:

      The Homeless Veteran Supported Employment Program (HVSEP) 
provides vocational assistance, job development and placement, and 
ongoing supports to improve employment outcomes among homeless Veterans 
and Veterans at-risk of homelessness. Formerly homeless Veterans who 
have been trained as Vocational Rehabilitation Specialists (VRSs) 
provide these services;
      VA's Compensated Work Therapy (CWT) Program is a national 
vocational program comprised of three unique programs which assist 
homeless Veterans in returning to competitive employment: Sheltered 
Workshop, Transitional Work, and Supported Employment. Veterans in CWT 
are paid at least the federal or state minimum wage, whichever is 
higher; VA's National Cemetery Administration and Veterans Health 
Administration have also formed partnerships at national cemeteries, 
where formerly homeless Veterans from the CWT program have received 
work opportunities; and
      The Vocational Rehabilitation and Employment (VR&E) 
VetSuccess Program assists Veterans with service-connected disabilities 
to prepare for, find, and keep suitable jobs. Services that may be 
provided include: Comprehensive rehabilitation evaluation to determine 
abilities, skills, and interests for employment; employment services; 
assistance finding and keeping a job; and On the Job Training (OJT), 
apprenticeship, and non-paid work experiences.
Veterans Cemetery Grant Programs
    The Veterans Cemetery Grants Program (VCGP) complements the 
National Cemetery Administration's mission to establish gravesites for 
veterans in areas where it cannot fully respond to the burial needs of 
veterans. Since 1980, the VCGP has awarded more than $482 million to 41 
states, territories and tribal organizations for the establishment, 
expansion or improvement of 86 state veteran cemeteries. For example, 
the NCA can provide up to 100 percent of the development cost for an 
approved cemetery project, including establishing a new cemetery and 
expanding or improving an established state or tribal organization 
veterans' cemetery. New equipment, such as mowers and backhoes, can be 
provided for new cemeteries. In addition, the Department of Veterans' 
Affairs may also provide operating grants to help cemeteries achieve 
national shrine standards.
    In FY 2012, with an appropriation of $46 million, the VCGP funded 
15 state cemeteries and one tribal organization cemetery. These grants 
included the establishment or ground breaking of one new state cemetery 
and one new tribal organization cemetery, expansions and improvements 
at ten state cemeteries, and six projects aimed at assisting state 
cemeteries to meet the NCA national shrine standards.
    In fiscal year 2011, NCA-supported Veterans cemeteries provided 
nearly 29,500 interments. Since 1978 the Department of Veterans Affairs 
has more than doubled the available acreage and accommodated more than 
a 100 percent increase in burial through this program. The VCGP faces 
the challenge of meeting a growing interest from states to provide 
burial services in areas not currently served. The intent of the VCGP 
is to develop a true complement to, not a replacement for, our federal 
system of national cemeteries. With the enactment of the ``Veterans 
Benefits Improvement Act of 1998,'' the NCA has been able to strengthen 
its partnership with states and increase burial services to veterans, 
especially those living in less densely populated areas without access 
to a nearby national cemetery. Through FY 2012, the VCGP has provided 
grant funding to 88 state and tribal government veterans' cemeteries in 
41 states and U.S. territories. In FY 2011 VA awarded its first state 
cemetery grant to a tribal organization. This is an extremely cost 
effective program which will need to continue to grow in order to keep 
pace with ever increasing needs.
Veteran's Burial Benefits
    Since the original parcel of land was set aside for the sacred 
committal of Civil War Veterans by President Abraham Lincoln in 1862, 
more than 4 million burials, from every era and conflict, have occurred 
in national cemeteries under the National Cemetery Administration.
    In 1973, the Department of Veterans' Affairs established a burial 
allowance that provided partial reimbursement for eligible funeral and 
burial costs. The current payment is $2,000 for burial expenses for 
service-connected deaths, $300 for non-service connected deaths and a 
$700 plot allowance. At its inception, the payout covered 72 percent of 
the funeral costs for a service-connected death, 22 percent for a non-
service connected death and 54 percent of the cost of a burial plot.
    Burial allowance was first introduced in 1917 to prevent veterans 
from being buried in potter's fields. In 1923 the allowance was 
modified. The benefit was determined by a means test until it was 
removed in 1936. In its early history the burial allowance was paid to 
all veterans, regardless of their service connectivity of death. In 
1973, the allowance was modified to reflect the status of service 
connection.
    The plot allowance was introduced in 1973 as an attempt to provide 
a plot benefit for veterans who did not have reasonable access to a 
national cemetery. Although neither the plot allowance nor the burial 
allowance was intended to cover the full cost of a civilian burial in a 
private cemetery, the recent increase in the benefit's value indicates 
the intent to provide a meaningful benefit. The IBVSOs are pleased that 
the 111th Congress acted quickly and passed an increase in the plot 
allowance for certain veterans from $300 to $700 effective October 1, 
2011.
    However, we believe that there is still a serious deficit between 
the original value of the benefit and its current value. In order to 
bring the benefit back up to its original intended value, the payment 
for service-connected burial allowance should be increased to $6,160, 
the non-service connected burial allowance should be increased to 
$1,918 and the plot allowance should be increased to $1,150. The IBVSOs 
believe Congress should divide the burial benefits into two categories: 
veterans within the accessibility model and veterans outside the 
accessibility model.
    The IBVSOs further believe that Congress should increase the plot 
allowance from $700 to $1,150 for all eligible veterans and expand the 
eligibility for the plot allowance for all veterans who would be 
eligible for burial in a national cemetery, not just those who served 
during wartime. Congress should increase the service-connected burial 
benefits from $2,000 to $6,160 for veterans outside the radius 
threshold and to $2,793 for veterans inside the radius threshold.
    Additionally, the IBVSOs believe that Congress should increase the 
non-service connected burial benefits from $300 to $1,918 for all 
veterans outside the radius threshold and to $854 for all veterans 
inside the radius threshold. The Administration and Congress should 
provide the resources required to meet the critical nature of the 
National Cemetery Administration's mission and to fulfill the nation's 
commitment to all veterans who have served their country so honorably 
and faithfully.
    Finally, the IBVSOs call on Congress and the Administration to 
provide the resources required to meet the critical nature of the NCA 
mission so that it can fulfill the nation's commitment to all veterans 
who have served their country so honorably and faithfully.
    Does this mean that there are no areas needing improvement at NCA - 
absolutely not. From October 2011 through March 2012, NCA conducted an 
internal gravesite review of headstone and marker placements at VA 
National cemeteries. During that review a total of 251 discrepancies at 
93 National cemeteries were discovered which included:

      218 misplaced headstones;
      25 unmarked graves;
      8 misplaced veteran remains

    While these incidents were corrected in a respectful, professional 
and expeditious manner, the initial phase of NCA's internal review 
failed to identify, and therefore to report, all misplaced headstones 
and unmarked gravesites. Additional discrepancies came to light thanks 
to the diligent oversight of Chairman Miller and the HVAC which had 
tasked the IG with conducting an audit of the internal NCA review. The 
IG report highlighted several concerns and made corrective 
recommendations. Based on those recommendations, the Under Secretary 
for Memorial Affairs developed an appropriate action plan and the 
IBVSOs recommends continued oversight to ensure the carrying out of all 
corrective actions.
Veterans and Post-Service Licensure and Credentials
    Perhaps some of the reasons for the persistently high unemployment 
rate among veterans may be found in a June 2012 study conducted by the 
Center for New American Security. The report entitled, `Employing 
America's Veterans: Perspectives from Businesses', examined the effect 
of military service on former service members as it relates to their 
employment opportunities. While there were many positive reasons for 
hiring veterans noted in the report, twenty-five out of the thirty 
companies involved in the study reported some specific challenges 
associated with hiring veterans, including:

      difficulty in skill translation;
      negative stereotype;
      skill mismatch;
      possible deployments (National Guard & Reserve members);
      difficult acclimation process; and
      difficulty finding veterans

    In considering the many challenges facing transitioning veterans, 
it appears that perhaps the toughest barrier to breach is employment. 
It is abundantly clear that transitioning veterans seeking employment, 
especially those with health issues, face some unique obstacles, 
including the process of securing the licenses and credentials required 
by some professions.
    The issue of veteran licensing and credentialing continues to be of 
concern to those within the military and veteran communities and is 
made especially difficult for veterans due to: its highly parochial 
nature; the complexities within the civilian credentialing system 
itself; the fact that each of the military services has its own unique 
training and credentialing programs; the need to overcome real or 
perceived gaps in military training, education and experience; the 
ambiguity about which of the roughly 4,000 different credentials are 
most important to civilian employers; and perhaps most significantly, 
many military occupations, unlike their civilian equivalents, have no 
credential requirements.
    Due to its very nature, the problem of credentialing cannot be 
resolved solely by the Federal government and its agencies. The 
National Council of State Legislatures (NCSL) and the National 
Governors Association (NGA) as two of the chief players in the 
credentialing game should also have a substantial role to play and 
especially since licensure and certifications are handled at the state-
level in most cases. Military service and training are provided at both 
the state-level for members of the National Guard or the federal-level 
for active duty and Reserve personnel. In light of this, a massive 
collaboration between DoD, VA and DOL as well as the Department of 
Education (DoED), and the individual states will be required. In an 
ideal world, all proposed legislation or regulations dealing with the 
credentialing issue would be initiated by NCSL and NGA in order to 
provide the basic structure for linking military skills, training and 
service to the requirements and opportunities within each state.
    As an invested player in the area of veteran credentialing, VETS is 
engaged in: sponsoring major conferences to bring together the 
important players in the licensing and credentialing field; publicizing 
this specific barrier to employment; identifying on-going difficulties 
and helping to develop veteran-friendly policies to overcome those 
challenges; helping to bridge the gap that hampers veterans needing 
credentials through the involvement of its staff members on a number of 
national certification advisory boards, committees and regulatory 
bodies; and by providing grants to a variety of Workforce Investment 
credentialing projects.
    The IBVSOs applaud the fact that the Administration has offered its 
support to ensure that servicemembers leave the military career-ready 
by proposing the following: increased veteran and service-disabled 
veteran tax credits; a challenge to private sector firms to commit to 
hiring or training 100,000 unemployed veterans or their spouses by the 
end of 2013 (this challenge has led to a public private partnership to 
develop a `Troops to Energy Jobs' program and a `Veterans on Wall 
Street' program; both of which seek to help support, educate and 
recruit military veterans and their families as they transition to the 
civilian workplace); `A Career-Ready Military' which calls for DoD and 
VA to lead a joint task force with the White House economic and 
domestic policy teams and other agencies to develop proposals to 
maximize the career-readiness of all servicemembers including a 
`Reverse Boot Camp'; and an initiative to deliver enhanced job search 
services to transitioning veterans through American Job Centers, 
including improved TAP workshops.
    Adequate funding is the key to the protecting these kinds of 
programs from fiscal jeopardy in the future.
    The IBVSOs recommend that Congress continue to monitor and hold 
accountable DOL's ongoing implementation of the VOW to Hire Heroes Act 
provisions, including: mandating that DOD, VA, and DOL work together to 
identify equivalencies between military and civilian occupations and 
the credentialing, licensing, and certification so military training 
meets civilian certification and licensure requirements in each state; 
the design and implementation of a `skill equivalencies' study; and the 
development and execution of the required multi-state demonstration 
project in order to determine the best way to prepare veterans for 
transition into civilian employment as well as ways to accelerate their 
attainment of civilian credentials.
    The IBVSOs further recommend that the demonstration project 
mentioned above must include the development of a clear process so that 
wherever a veteran chooses to reside after military service, that state 
will grant an expedited licensure or certification for the civilian 
equivalent job he or she held while in the military.
    Additionally, we recommend that the DOD and other federal agencies 
tasked with assisting transitioning service members should reach out to 
and educate private sector employers on the value of their employing 
veterans. This outreach must include engaging all employers including 
federal agencies, for-profit and non-profit corporations as well as 
small businesses.
    Congress should engage in a national dialogue, working closely with 
the Administration generally, and the DOD, VA, and DOL specifically, as 
well as State Governors and Adjutant Generals, employers, trade and 
professional associations, and licensure and credentialing entities at 
all levels, to establish a process so military training meets civilian 
certification and licensure requirements for states in which veterans 
choose to live once they leave the military.
Transition Assistance Program (T.A.P.)
    The IBVSOs feel it is imperative that Congress ensure proper 
funding for transition assistance programs and that the programs 
themselves need to be continually updated and monitored to meeting the 
ongoing needs of servicemembers repatriating from overseas deployments.
    he Transition Assistance Program (TAP), an interagency program, 
pursuant to section 502 of the ``National Defense Authorization Act for 
Fiscal Year 1991'' (P.L. 101-510), was established as a partnership 
between the Departments of Defense, Veteran Affairs and Labor to 
provide resources and expertise to assist and prepare Veterans and 
Service Members to obtain meaningful careers, maximize their employment 
opportunities, and protect their employment rights. DOL/VETS continues 
to provide wide-ranging services to meet the ongoing employment and 
training needs of transitioning veterans, especially those injured or 
disabled, and to bring together employers and qualified veterans to 
fill open positions.
    A brief overview of some of the programs/initiatives under the 
auspices of DOL/VETS, according to their FY 2011 Report to Congress 
(see the full report at http://www.dol.gov/vets/media/FY2011Annual 
ReportToCongress.pdf. includes:

      the Jobs for Veterans State Grant (JVSG) program 
distributes funding to states for Disabled Veterans' Outreach Program 
(DVOP) specialists who work with veterans experiencing the most 
significant barriers to employment and Local Veterans' Employment 
Representative (LVER) staff, whose main task is work with employers to 
cultivate employment opportunities for veterans. These individuals 
provide concentrated case management services to veterans and encourage 
the hiring of veterans through direct marketing and outreach activities 
with employers (FY 2013 budget request $170,049,000);
      the Homeless Veterans' Reintegration Program (HVRP) has 
as its noble goal the reintegration of homeless veterans into both 
society and the workforce. In FY 2011, the HVRP helped place thousands 
of previously homeless veterans on the road to recovery and integration 
FY 2013 budget request $38,185,000);
      the Recovery & Employment Assistance Lifelines 
(REALifelines) initiative, focuses on services to those transitioning 
Service Members and Veterans wounded and injured in the wars in Iraq 
and Afghanistan;
      the Veterans' Workforce Investment Program (VWIP), 
pursuant to P.L. 105-220, Section 168, provides resources for the 
training necessary to prepare Veterans for meaningful employment and to 
encourage effective implementation of services for eligible Veterans 
facing significant barriers to employment; and
      the focus of this article, the Transition Assistance 
Program (TAP) Employment Workshops provide critical assistance to 
Service Members and their spouses by giving them the tools necessary 
for a successful transition from military to civilian life (FY 2013 
budget request $12,000,000). See full VETS budget request at http://
www.dol.gov/dol/budget/2013/pdf/cbj-2013-v3-05.pdf)

    The Department of Labor's (DOL), Veterans' Employment and Training 
Service (VETS), which originally began providing TAP employment 
workshops in 1991, provided more than 4,200 TAP classes to nearly 
145,000 participants around the world in FY 2011and those figures are 
expected to increase in 2013 to 5,700 TAP classes provided to over 
200,000 participants worldwide. The total budget request submitted by 
VETS for 2013 was in the amount of $258,870,000 of which $12,000,000 
was designated to fund the TAP program.
    The need to fully fund ongoing TAP classes cannot be underestimated 
due to the importance and complexity of transitioning to civilian life. 
Both the TAP and the Disabled Transition Program (DTAP) will, 
generally, be mandatory thanks to the ``VOW to Hire Heroes Act'' (P.L. 
112-56) and will result in the program becoming an even greater benefit 
in meeting the needs of separating service members as they transition 
into civilian life. The VOW to Hire Heroes Act:

      Directs the DOD and DHS to, generally, require the 
participation of members of the armed forces being separated from 
active duty, and their spouses. Waivers of participation would be 
permitted for those whose participation is not, and would not be, of 
assistance since such members are unlikely to face major readjustment, 
health care, employment, or other challenges associated with transition 
to civilian life; and for those with specialized skills who are needed 
to support imminent deployment;
      Requires the DOL to conduct a study and provide a report 
to Congress to identify any equivalencies between the skills developed 
by members through various military occupational specialties and the 
qualifications required for various positions of civilian employment. 
These skills equivalencies will be published on the Internet and 
updated regularly;
      Directs the DOD to ensure that each member participating 
in TAP receives an individualized equivalencies assessment and to make 
each assessment available to VA and the DOL;
      Requires VA to contract, within two years, with 
appropriate contractors to provide members being separated from active 
duty, and their spouses, with appropriate TAP services. Retirees may 
begin TAP classes 2 years prior to retirement and non-retiree service 
members may begin TAP classes 1 year prior to separation;
      Authorizes the DOL, VA, the DHS, and the DOD, in carrying 
out TAP, to contract with private entities that have experience with 
instructing members on relevant topics on job training and job 
searching, including academic readiness and educational opportunities;
      Authorizes the DOD and DHS, as part of TAP, to permit an 
eligible member to participate in an apprenticeship or pre-
apprenticeship program that provides them with the education, training, 
and services necessary to transition to meaningful employment;
      Directs the Comptroller General to conduct a review of 
TAP, and to submit review results and recommendations to Congress;
      Treats an individual as a veteran, a disabled veteran, or 
a preference eligible for purposes of appointments to federal 
competitive service positions if the individual meets all other 
qualifications except for the requirement of discharge or release from 
active duty under honorable conditions, as long as such individual 
submits to the federal officer making the appointment a certification 
that he or she is expected to be discharged or released under honorable 
conditions within 120 days after submission of the certification. 
Requires the director of the Office of Personnel Management to (1) 
designate agencies to establish a program to provide employment 
assistance to members being separated from active duty and (2) ensure 
that such programs are coordinated with TAP; and
      Requires the inclusion of TAP performance measures in 
annual DOL reports on veterans' job counseling, training, and placement 
programs.

    As noted above, as part of the first major redesign of the TAP 
program in 20 years, eligible members will be allowed to participate in 
an apprenticeship or pre-apprenticeship program that provides them with 
education, training, and services necessary to transition to meaningful 
employment. These new TAP classes will also upgrade career counseling 
options and resume writing skills, as well as ensuring the program is 
tailored for the 21st century job market.
    Currently, TAP consists of the following five components:

      pre-separation counseling conducted by the respective 
military services;
      employment workshops presented by the Department of 
Labor;
      veterans benefits briefings conducted by VA;
      DTAP facilitated by VA; and
      personalized coaching and practicum.

    Since 2005, TAP classes have been offered to eligible, demobilizing 
Reserve Component members (upon their return from mobilization of 180 
days or more). These TAP classes are designed to address the following 
four areas:

    1.transition counseling--mandatory and conducted by the military 
services;

    2.``Uniformed Services Employment and Reemployment Rights Act'' 
(USERRA) briefing (normally conducted by the DOL);

    3.veterans benefits briefings--facilitated and sponsored by VA; and

    4.DTAP facilitated and sponsored by VA

    Efforts to improve both TAP and DTAP are under way. The scope of 
the changes was noted in DOL testimony before the House Veterans 
Affairs Committee of June 2, 2011:

      redesign both TAP and DTAP to assess each individual's 
readiness for employment, and their interests;
      updating the content of the employment workshop, to 
include workshops on employment readiness;
      providing skilled contract facilitators who are trained 
using newly developed program standards;
      providing an online, e-learning platform that will serve 
as a comprehensive resource for all service members, veterans, Reserve 
component members, wounded warriors, and spouses.
      providing customized coaching by phone or online for 60 
days after participants attend the workshop; and
      performing metrics and satisfaction surveys after program 
completion, during the job search phase, and once employment has been 
obtained.

    The Independent Budget Veterans' Service Organizations (IBVSOs) 
understand the plan is to begin piloting the redesigned workshops 
starting in January 2013 and to roll out the new workshops to all CONUS 
DVOP/LVER facilitated TAP sites by the end of FY 2012 and to the 
remainder of the overall sites by Dec. 31, 2012. We look forward to the 
fielding of the improved TAP and DTAP whose classes are often the only 
opportunity a service member, or qualifying family member, has to 
receive the critical information vital to sustaining their quality of 
life after the military.
    The transition from a military career to a civilian and corporate 
sector career involves a major cultural shift. Veterans not only need 
employment but often need assistance in making this life-changing 
adjustment as well. This time of transition is one of the most 
stressful and challenging times experienced by many veterans. After 
spending years becoming part of a military culture, service members who 
leave the military face a new unknown culture when they step into a 
civilian role or corporate career. This transition is often complicated 
by injuries they received, both visible and invisible, while serving 
their country. As battlefield medicine continues to save more lives, VA 
and the DOD, DOL, and DHS must be ready to adapt and change their 
current transition and education programs to meet the needs of today's 
veterans.
    Service members leaving the military with service-connected 
disabilities are offered DTAP, a program that includes the normal 
three-day TAP workshop, plus additional hours of individual instruction 
and advice to determine employability and to address their unique needs 
related to disabilities. DTAP provides important information to wounded 
service members and their families at a critical nexus. Often these 
individuals are hospitalized or receiving medical rehabilitation away 
from their regular units during their military service discharge 
periods. Because these individuals are no longer located on or near a 
military installation, they are often forgotten in the transition 
assistance process. In this respect, DTAP has not scored the level of 
success that TAP has achieved, and it is critical that coordination be 
closer between the DOD, VA, and Veterans Employment and Training 
Service (VETS) to reduce this disparity for these severely disabled 
service members.
    The IBVSOs believe Congress, the DOD, VA, and the DOL should 
provide increased funding for TAP and DTAP to support mandatory 
attendance for all personnel being discharged.
    The IBVSOs have also been concerned with the large numbers of 
reserve and National Guard service members moving through the discharge 
system with only the benefit of the abbreviated TAP as opposed to the 
more comprehensive program attended by active component members. 
Neither the DOD nor VA seems prepared to handle the large numbers and 
prolonged activation of reserve forces for the global war on terrorism. 
The greatest challenge with these service members is their rapid 
transition from active duty to civilian life. If service members are 
uninjured, they may clear the demobilization station in a few days, and 
little if any of this time is dedicated to informing them about 
veterans' benefits and services. Additionally, the DOD personnel at 
these sites are most focused on processing service members through the 
sites. Lack of space and facilities often restricts contact between 
demobilizing service personnel and VA representatives. To ensure full 
participation in this important program, the IBVSOs have long 
recommended making participation in the more comprehensive TAP 
mandatory for all discharging service members. The VOW to Hire Heroes 
Act should finally bring closure to this issue.
    The IBVSOs recommend the following:

      All Transition Assistance Program (TAP) classes should 
include in-depth VA benefits and health-care education sessions and 
time for question and answer sessions;
      The Departments of Veterans Affairs, Defense, Labor, and 
Homeland Security should design and implement a stronger Disabled 
Transition Assistance Program (DTAP) for wounded service members who 
have received serious injuries, and for their families;
      Chartered veterans service organizations should be 
directly involved in TAP and DTAP or, at minimum, serve as an outside 
resource to TAP and DTAP;
      The DOD, VA, DOL, and DHS must do a better job educating 
the families of service members on the availability of TAP classes, 
along with other VA and DOL programs regarding employment, financial 
stability, and health-care resources;
      Increase the funding for DVOPs to ensure that there are 
enough to meet the expected demand, with special focus on rural areas;
      Establish an incentivized Grant process for any 
innovative programs utilizing improved methods of meeting the needs of 
veterans; and
      Improve internal audit system capabilities in order to 
monitor compliance with appropriate rules and regulations.

    Congress and the Administration must provide adequate funding to 
support TAP and DTAP to ensure that all transition service members, 
whether Active or Reserve Component, receive proper services during 
their transition periods.

    9 April 2013

    The Honorable Representative Jeff Miller, Chairman
    Committee on Veterans' Affairs
    U.S. House of Representatives
    335 Cannon House Office Building
    Washington, DC 20510

    Dear Chairman Miller:

    Neither AMVETS nor I have received any federal grants or contracts, 
during this year or in the last two years, from any agency or program 
relevant to the upcoming 11 April 2013, House Committee on Veterans' 
Affairs hearing on the U.S. Department of Veterans' Affairs Budget 
Request for Fiscal Year 2014.

    Sincerely,

    Diane M. Zumatto, AMVETS
    National Legislative Director

                                 
                  Prepared Statement of Raymond Kelley
    MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE:

    On behalf of the more than 2 million men and women of the Veterans 
of Foreign Wars of the U.S. (VFW) and our Auxiliaries, I would like to 
thank you for the opportunity to testify today. The VFW works alongside 
the other members of the Independent Budget (IB) - AMVETS, Disabled 
American Veterans and Paralyzed Veterans of America - to produce a set 
of policy and budget recommendations that reflect what we believe would 
meet the needs of America's veterans. The VFW is responsible for the 
construction portion of the IB, so I will limit my remarks to that 
portion of the budget.
    As VA strives to improve the quality and delivery of care for our 
wounded, ill and injured veterans, the facilities that provide that 
care continue to erode. With buildings that have an average age of 60 
years, VA has a monumental task of improving and maintaining these 
facilities. Since 2004, utilization at VA facilities as grown from 80 
percent to 120 percent, while the condition of these facilities has 
eroded from 81 percent to 71 percent over the same period of time. It 
is important to remember that VA facilities are where our veterans 
receive care, and they are just as important as the doctors who deliver 
it. Every effort must be made to ensure these facilities remain safe 
and sufficient environments to deliver that care. A VA budget that does 
not adequately fund facility maintenance and construction will reduce 
the timeliness and quality of care for our veterans.
    The vastness of VA's capital infrastructure is rarely fully 
visualized or understood. VA currently manages and maintains more than 
5,600 buildings and almost 34,000 acres of land with a plant 
replacement value (PRV) of approximately $45 billion. Although VA has 
decreased the number of critical infrastructure gaps, there remain more 
than 4,000 gaps that will cost between $51 and $62 billion to close 
with an additional $11 billion in activation costs.
    The two categories that concern The Independent Budget veterans 
service organizations (IBVSOs) the most are condition and access. To 
determine and monitor the condition of its facilities, VA conducted a 
Facility Condition Assessment (FCA). These assessments include 
inspections of building systems, such as electrical, mechanical, 
plumbing, elevators and structural and architectural safety; and site 
conditions consist of roads, parking, sidewalks, water mains, water 
protection. The FCA review team can grant ratings of A, B, C, D, and F. 
A through C assessments conclude the rating is in new to average 
condition. D ratings mean the condition is below average and F means 
the condition is critical and requires immediate attention. To correct 
these deficiencies, VA will need to invest nearly $9.8 billion.
    To close the gaps in access, VA will need to invest between $30 and 
$35 billion dollars in major and minor construction and leasing. The 
remaining $20 billion is needed to close the remaining non-recurring 
maintenance (NRM) deficiencies.
    Quality, accessible health care continues to be the focus for the 
IBVSOs, and to achieve and sustain that goal, large capital investments 
must be made. Presenting a well-articulated, completely transparent 
capital asset plan is important, which VA has done, but funding that 
plan at nearly half of the prior year's appropriated level and at a 
level that is only 25 percent of what is needed to close the access, 
utilization and safety gaps will not fulfill VA's mission: ``to care 
for him who shall have borne the battle . . . ''
Major Construction Accounts:
    Decades of underfunding has led to a major construction backlog 
that has reached between $21 billion and $ 25 billion. There are 
currently 21 VHA major construction projects that have been partially 
funded dating back to 2007. None of these projects are funded through 
completion and only four received funding in FY 2013. The total 
unobligated amount for all currently budgeted major construction 
projects exceeds $2.9 billion. Yet the total budget proposal for FY 
2013 major construction accounts was less than $533 million.
    To finish existing projects and to close current and future gaps, 
VA will need to invest at least $21.7 billion over the next 10 years. 
At current requested funding levels, it will take between 40 years to 
complete VA's 10-year plan.
    In the short-term, VA must start requesting and Congress must start 
funding major construction at a level that begins to reduce the 
backlog. The IBVSOs recommend doubling the requested level, providing 
VA with $1.1 billion in major construction funding in FY 2014. VA must 
also begin presenting long-term proposals that will outline how the 
Department will address closing all major construction gaps.
Minor Construction Accounts:
    To close all the minor construction gaps within their 10-year 
timeline, VA will need to invest between $8.5 billion and $10.5 
billion, up $1 billion from last year. For several years VA minor 
construction was funded at a level to meet its 10-year goal. However, 
the Administration and Congress have lost their commitment and proposed 
a drastic funding decrease for minor construction over the past two 
years. The budget proposal for FY 2013 was $607.5 million, an increase 
from the prior year, but still underfunded to close existing minor 
construction gaps. At this funding rate, current minor construction 
gaps will take more than 16 years to close.
    The IBVSOs believe that minor construction accounts can be brought 
back on track by investing approximately $880 million per year over the 
next decade to close existing gaps and to prevent unmanageable future 
gaps in minor construction.
    Additionally, for capital infrastructure, renovations, and 
maintenance, we recommend $50 million or more for up to five major 
construction projects in VA research facilities; and $175 million in 
non-recurring maintenance and Minor Construction funding to address 
Priority 1 and 2 deficiencies identified in the capitol infrastructure 
report (in accounts that are segregated from VA's other major, minor, 
and maintenance and repair appropriations).
Nonrecurring Maintenance Accounts:
    Even though non-recurring maintenance (NRM) is funded through VA's 
Medical Facilities account and not through construction account, it is 
critical to VA's capitol infrastructure. NRM embodies the many small 
projects that together provide for the long-term sustainability and 
usability of VA facilities. NRM projects are one-time repairs, such as 
modernizing mechanical or electrical systems, replacing windows and 
equipment, and preserving roofs and floors, among other routine 
maintenance needs. Nonrecurring maintenance is a necessary component of 
the care and stewardship of a facility. When managed responsibly, these 
relatively small, periodic investments ensure that the more substantial 
investments of major and minor construction provide real value to 
taxpayers and to veterans as well.
    VA is moving further from closing current NRM safety, utilization 
and access gaps, and continues to fall behind on preventing future gaps 
from occurring. Just to maintain what they have, in the condition that 
it is in, VA's Non-Recurring Maintenance (NRM) account must be funded 
at $1.35 billion per year, based on The Independent Budget veterans 
service organizations (IBVSO) estimated Plant Replacement Value. It is 
currently being funded at $712 million per year. More will need to be 
invested to prevent the $22.4 billion NRM backlog from growing larger.
    Because NRM accounts are organized under the Medical Facilities 
appropriation, it has traditionally been apportioned using the Veterans 
Equitable Resource Allocation (VERA) formula. This formula was intended 
to allocate health-care dollars to those areas with the greatest demand 
for health care, and is not an ideal method to allocate NRM funds. When 
dealing with maintenance needs, this formula may prove 
counterproductive by moving funds away from older medical centers and 
reallocating the funds to newer facilities where patient demand is 
greater, even if the maintenance needs are not as intense. We are 
encouraged by actions the House and Senate Veterans' Affairs Committees 
have taken in recent years requiring NRM funding to be allocated 
outside the VERA formula, and we hope this practice will continue.
Capital Leasing:
    The fourth cornerstone to VA's capital planning is leasing. The 
current lease plan calls for little more than $2 billion over the next 
10 years. The VA enters into two types of leases. First, VA leases 
properties to use for each Agency within VA, ranging from community-
based outpatient clinics (CBOC) and medical centers, to research and 
warehouse space. These leases do not fall under the larger construction 
accounts, but under each Administration's and Staff Office operating 
accounts.
    VA faces a new problem regarding leasing protocols for major 
medical facilities; facilities that average an annual rental payment of 
more than $1 million. Prior to 2012 the Congressional Budget Office 
(CBO) used the assumption that these leases were short-term agreements 
used for existing and renewed leases only. While CBO prepared its cost 
estimate for H.R. 6375, the VA Major Construction Authorization and 
Expiring Authorities Extension Act of 2012, budget analysts realized 
most of the leases were for newly-built facilities over extended 
periods of time.
    CBO views these types of leases in the same vein as purchasing a 
facility, and therefore concluded that VA must fully account for 
funding of such leases in first year of the lease.
    Under these rules, VA would have to base its major facility leases 
by using a revolving fund similar to the General Services 
Administration's (GSA). This is problematic for VA because the agency 
would now have to offset approximately $1.2 billion this fiscal year to 
comply with current budget rules and proceed with the current requested 
leases.
    In the absence of VA rewording these leases in a way that would 
prompt CBO to calculate major facility leases in their pre-2012 method, 
the IBVSOs request that Congress forego current budget rules, enabling 
these leases to move forward while a long-term solution is determined. 
Providing quality, timely and accessible health care should be the 
highest priority, even above current budget rules.
    The second type of lease, called enhanced-use lease (EUL), allows 
VA to lease property they own to an outside-VA entity. These leases 
allow VA to lease properties that are unutilized or underutilized for 
projects such as veterans' homelessness and long-term care. Proper use 
of leases provides VA with flexibility in providing care as veterans' 
needs and demographics changes.
    EUL gives VA the authority to lease land or buildings to public, 
non-profit or private organizations or companies as long as the lease 
is consistent with VA's mission and that the lease ``provides 
appropriate space for an activity contributing to the mission of the 
Department.'' Although, EUL can be used for a wide range of activities, 
the majority of the leases result in housing for homeless veterans and 
assisted living facilities. Unfortunately, EUL authority has expired, 
leaving the VA struggling to enter into agreements for under and unused 
property. Congress must reauthorize this authority.
Empty or Underutilized Space at Medical Centers:
    The Department of Veterans Affairs maintains approximately 1,100 
buildings that are either vacant or underutilized. An underutilized 
building is defined as one where less than 25 percent of space is used. 
It costs VA from $1 to $3 per square foot per year to maintain a vacant 
building.
    Studies have shown that the VA medical system has extensive amounts 
of empty space that can be reused for medical services or reapportioned 
for another use. It has also been shown that unused space at one 
medical center may help address a deficiency that exists at another 
location. Although the space inventories are accurate, the assumption 
regarding the feasibility of using this space is not. Medical facility 
planning is complex. It requires intricate design relationships for 
function, as well as the demanding requirements of certain types of 
medical equipment. Because of this, medical facility space is rarely 
interchangeable, and if it is, it is usually at a prohibitive cost. 
Unoccupied rooms on the eighth floor used as a medical surgical unit, 
for example, cannot be used to offset a deficiency of space in the 
second floor surgery ward. Medical space has a very critical need for 
inter- and intradepartmental adjacencies that must be maintained for 
efficient and hygienic patient care.
    When a department expands or moves, these demands create a domino 
effect on everything around it. These secondary impacts greatly 
increase construction expense and can disrupt patient care.
    Some features of a medical facility are permanent. Floor-to-floor 
heights, column spacing, light, and structural floor loading cannot 
necessarily be altered. Different aspects of medical care have various 
requirements based upon these permanent characteristics. Laboratory or 
clinical spacing cannot be interchanged with ward space because of the 
different column spacing and perimeter configuration. Patient wards 
require access to natural light and column grids that are compatible 
with room-style layouts. Laboratories should have long structural bays 
and function best without windows. When renovating empty space, if an 
area is not suited to its planned purpose, it will create unnecessary 
expenses and be much less efficient if simply renovated.
    Renovating old space, rather than constructing new space, often 
provides only marginal cost savings. Renovations of a specific space 
typically cost 85 percent of what a similar, new space would cost. 
Factoring in domino or secondary costs, the renovation can end up 
costing more while producing a less satisfactory result. Renovations 
are sometimes appropriate to achieve those critical functional 
adjacencies, but are rarely economical.
    As stated earlier in this analysis, the average age of VA 
facilities is 60 years. Many older VA medical centers that were rapidly 
built in the 1940s and 1950s to treat a growing war veteran population 
are simply unable to be renovated for modern needs. Another important 
problem with this existing unused space is often location. Much of it 
is not in a prime location; otherwise, it would have been previously 
renovated or demolished for new construction.
    Public Law 108-422 incentivized VA's efforts to properly dispose of 
excess space by allowing VA to retain the proceeds from the sale, 
transfer, or exchange of certain properties in a Capital Asset Fund. 
Further, that law required VA to develop short- and long-term plans for 
the disposal of these facilities in an annual report to Congress. VA 
has identified 494 buildings that have been identified for repurposing. 
Building Utilization Review and Repurposing or BURR will focused on 
identifying sites in three major categories; housing for veterans who 
are homeless or at risk for being homeless; senior veterans capable of 
independent living and veterans who require assisted-living and 
supportive services. The three phases planned include identifying 
campuses with buildings and land that are either vacant or 
underutilized; sites visit to match the supply of building and land 
with the demand for services and availability of financing and lastly 
identifying campuses using VA's enhanced-use leasing authority. Under 
the BURR initiative, if no repurposing for a building is identified, VA 
will begin to assess its vacant capital inventory by demolishing or 
disposing of buildings that are unsuitable for reuse or beyond their 
usefulness.
    The IBVSO's have stated that VA must continue to develop these 
plans, working in concert with architectural master plans, community 
stakeholders and clearly identifying the long-range vision for all such 
sites.

                                 
               Prepared Statement of Louis J. Celli, Jr.
``On or after the first Monday in January but not later than the first 
Monday in February of each year, the President shall submit a budget of 
     the United States Government for the following fiscal year.''
                   Budget and Accounting Act of 1921
    Chairman Miller, Ranking Member Michaud, and Members of the 
Committee:

    On behalf of Commander Koutz and the 2 and a half million members 
of The American Legion, we welcome this opportunity to comment on the 
federal budget, and specific funding programs of the Department of 
Veterans Affairs.
    The American Legion is a resolution based organization; we are 
directed and driven by the millions of active legionnaires who have 
dedicated their money, time, and resources to the continued service of 
veterans and their families. Our positions are guided by nearly 100 
years of consistent advocacy and resolutions that originate at the 
grassroots level of the organization - the local American Legion posts 
and veterans in every congressional district of America. The 
Headquarters staff of the Legion works daily on behalf of veterans, 
military personnel and our communities through roughly 20 national 
programs, and hundreds of outreach programs led by our posts across the 
country.
    As thousands of troops return from deployments to Afghanistan and 
elsewhere in the world, and the United States shifts its policies in 
Iraq and Afghanistan, thus producing a new national security focus, The 
American Legion reminds the Committee that national security changes do 
not change the fact that veterans of these wars, as well as prior 
conflicts, must still be taken care of in the aftermath of these wars, 
and this care will extend for these veterans and their caregivers for 
the next sixty years.
    In October of last year National Commander James Koutz provided the 
Committee The American Legion's guidance for a robust Department of 
Veterans Affairs (VA) budget that adequately provides for the health 
care and benefits for veterans of all wars during this period of 
difficult fiscal times. The VA will continue to be faced by the growing 
number of thousands of new patients and claimants even though the wars 
are winding down, and the Department of Defense is reducing its 
authorized endstrength of military personnel. This increase in veterans 
will continue for the foreseeable future and this Committee must 
provide the Department the resources necessary to care for these 
veterans and their families.
    While grateful for prior VA funding, The American Legion remains 
vigilant to ensure that VA is not going to be shortchanged of the 
funding it truly needs, because the lack of appropriate funding will 
ultimately endanger veteran care and benefits. The American Legion has, 
for years, been testifying before the Congress of The Unites States, 
reminding them that the cost of war, especially prolonged war, is 
expensive and that the true costs are only realized decades after the 
war is over. Last month the Harvard Kennedy School issued a report that 
projected the total cost of these current conflicts to cost between $4 
and $6 trillion. The report goes on to say;

    ``The single largest accrued liability of the wars in Iraq and 
Afghanistan is the cost of providing medical care and disability 
benefits to war veterans. Historically, the bill for these costs has 
come due many decades later. The peak year for paying disability 
compensation to World War I veterans was in 1969 - more than 50 years 
after Armistice. The largest expenditures for World War II veterans 
were in the late 1980s. Payments to Vietnam and first Gulf War veterans 
are still climbing. The magnitude of future expenditures will be even 
higher for the current conflicts \1\''
---------------------------------------------------------------------------
    \1\ Bilmes, Linda J. Harvard Kennedy School. The Financial Legacy 
of Iraq and Afghanistan: How Wartime Spending Decisions Will Constrain 
Future National Security Budgets Faculty Research Working Paper Series. 
March 2013
---------------------------------------------------------------------------
    American Legion members have answered the call to service. Our 
members, 22 million American veterans, and their families, have paid 
for the defense of this nation with our blood, sweat, and tears. And 
while Senator McCain, who has so many homes that he has lost count, 
stands before the Senate to proclaim ``I know of no one who joined the 
military because of Tricare, (though) I hear (it) from all the retirees 
... I have not yet met a single 18-year-old, including my own son who 
joined the Marine Corps, who said: `Gee, I want to join the Marine 
Corps because of Tricare.'', The American Legion agrees. 18 year old 
millionaires don't join the military for the benefits; they also don't 
make the military a career. Those committed men and women who do 
dedicate their lives to wearing the uniform of this nation, however, do 
expect this government to honor its promise to our military families, 
and provide the health care and other benefits promised them. In 2001 I 
retired at the top of the enlisted pay grade. At that time, the monthly 
base pay for an E-8 in the military was $3,138 a month. After taxes, 
that's about $15 an hour for a senior manager with 22 years of 
experience, so no, 18 year old enlistees don't join for the TRICARE, 
but mid level military members definitely calculate the value of their 
TRICARE benefit versus the financial sacrifice they make while wearing 
the uniform when they make decisions to reenlist, and think about how 
they are going to continue to provide for their families.
    In December, while fighting to increase TRICARE costs, Senator 
Coburn told colleagues on the Senate floor;

    ``We have used a trick ... that will require (more funding for) the 
health account ... which means we will not have $1.7 billion for naval 
exercises, for flight training, for tank training, for range 
training.''

    The President's budget calls for increasing TRICARE fees for 
retirees so the Department of Defense can dedicate more of their budget 
to funding personnel and equipment; and adjusting the Cost of Living 
Allowance (COLA) calculation that supports disabled military retiree 
payments in an attempt to reduce spending. The estimated ``savings'' of 
these two programs combined, the President hopes, will offset future 
spending by approximately $600 billion through the next 10 years.
    It is unthinkable to ask less than one percent of the American 
population to volunteer to defend the United States, against all 
enemies, foreign and domestic, to pay them wages far lower than their 
nonmilitary peers, require them to move their families every three 
years, sustain multiple deployments year after year, suffer 
extraordinary wounds, and protect the men women and children of the 
world, then require them to ``pitch in'' yet again once they get home 
because DoD feels we have become too expensive to maintain.
                    VA Leased Facilities in Jeopardy
    In FY 2012 H.R. 2646 authorized the VA sufficient appropriations to 
continue to fund and operate leased facility projects that support our 
veterans all across the country. In November of 2012 the FY 2013 
appropriations for the same facilities was eliminated from 
appropriations due to a ``scoring change'' initiated by the 
Congressional Budget Office (CBO). While the locations, projects, 
leases, and funding requirements did not change - the way in which CBO 
scored the projects did, which resulted in the appearance that the 
project would cost more than 10 times the actual needed revenue. As a 
result of CBO's adjustment in scoring review, Congress refused to 
introduce the FY 2013 appropriations bill needed to keep these 
community based centers open. As these leases now become due, there are 
15 major medical facilities that will be forced to close unless 
Congress acts quickly to provide the appropriate funding to these 
centers.
    If these centers are allowed to close due to insufficient funding, 
the impact on our veterans, and the VA would be devastating. Not only 
would the center employees have to either relocate within the VA or be 
terminated, the VA could be subject to legal action for prematurely 
defaulting on their leases. The veterans currently being served by 
these facilities would then have to either travel long distances to the 
nearest VA facility, or would have to find care at local hospital that 
the VA would be required to pay for, at a fee-for-services basis. This 
would ultimately cost the VA an estimated 4 times what the original 
appropriations would have cost for these shuttered facilities. The 
facilities currently in jeopardy are located in; Albuquerque, New 
Mexico, Brick, New Jersey, Charleston, South Carolina, Cobb County, 
Georgia, Honolulu, Hawaii, Lafayette, Louisiana, Lake Charles, 
Louisiana, New Port Richey, Florida, Ponce, Puerto Rico, San Antonio, 
Texas, West Haven, Connecticut, Worchester, Massachusetts, Johnson 
County, Kansas, San Diego, California, and Tyler, Texas.
    The American Legion implores Congress to fund these centers as 
originally planned. The funds that these centers need has already been 
obligated, and refusal to fund these centers will cause a false 
perception of excess monies to exist within the federal budget, which 
The American Legion is afraid will be falsely reported as a money 
saving initiative.
                   Advance Appropriations for FY 2015
    The Veterans Health Administration manages the largest integrated 
health-care system in the United States, with 152 medical centers, 
nearly 1,400 community-based outpatient clinics, community living 
centers, Vet Centers and domiciliaries serving more than 8 million 
veterans every year. The American Legion believes those veterans should 
receive the best care possible.
    The needs of veterans continue to evolve, and VHA must ensure it is 
evolving to meet them. The rural veteran population is growing, and 
options such as telehealth medicine and clinical care must expand to 
better serve that population. Growing numbers of female veterans mean 
that a system that primarily provided for male enrollees must now 
evolve and adapt to meet the needs of male and female veterans, 
regardless whether they live in urban or rural areas.
    An integrated response to mental health care is necessary, as the 
rising rates of suicide and severe post-traumatic stress disorder are 
greatly impacting veterans and active-duty servicemembers alike.
    If veterans are going to receive the best possible care from VA, 
the system needs to continue to adapt to the changing demands of the 
population it serves. The concerns of rural veterans can be addressed 
through multiple measures, including expansion of the existing 
infrastructure through CBOCs and other innovative solutions, 
improvements in telehealth and telemedicine, improved staffing and 
enhancements to the travel system.
    Patient concerns and quality of care can be improved by better 
attention to VA strategic planning, concise and clear directives from 
VHA, improved hiring practices and retention, and better tracking of 
quality by VA on a national level.
Better Care for Female Veterans
    A 2011 American Legion study revealed several areas of concern 
about VA health-care services for women. Today, VA still struggles to 
fulfill this need, even though women are the fastest-growing segment of 
the veteran population. Approximately 1.8 million female veterans make 
up 8 percent of the total veteran population, yet only 6 percent use VA 
services.
    VA needs to be prepared for a significant increase of younger 
female veterans as those who served in the War on Terror separate from 
active service. Approximately 58 percent of women returning from Iraq 
and Afghanistan are ages 20 to 29, and they require gender-specific 
expertise and care. Studies suggest post-traumatic stress disorder is 
especially prevalent among women; among veterans who used VA in 2009, 
10.2 percent of women and 7.8 percent of men were diagnosed with PTSD.
    The number of female veterans enrolled in the VA system is expected 
to expand by more than 33 percent in the next three years. Currently, 
44 percent of Iraq and Afghanistan female veterans have enrolled in the 
VA health-care system.
    VA needs to develop a comprehensive health-care program for female 
veterans that extend beyond reproductive issues. Provider education 
needs improvement. Furthermore, as female veterans are the sole 
caregivers in some families, services and benefits designed to promote 
independent living for combat-injured veterans must be evaluated, and 
needs such as child care must be factored into the equation. 
Additionally, many female veterans cannot make appointments due to the 
lack of child-care options at VA medical centers. Since the 2011 
survey, The American Legion has continued to advocate for improved 
delivery of timely, quality health care for women using VA. The 
American Legion is encouraged that the President's budget recognizes 
the need for additional funding in this critical area, and has proposed 
an increase of almost 14% over last year's authorization levels, which 
combined with years 2009 through 2013 represents an increase in funding 
of more than 130%.
                    Repair Problems in Mental Health
    During the past half decade, VA has nearly doubled their mental 
health care staff, jumping from just over 13,500 providers in 2005 to 
over 20,000 providers in 2011. However, during that time there has been 
a massive influx of veterans into the system, with a growing need for 
psychiatric services. With over 1.5 million veterans separating from 
service in the past decade, 690,844 have not utilized VA for treatment 
or evaluation. The American Legion is deeply concerned about nearly 
700,000 veterans who are slipping through the cracks unable to access 
the health care system they have earned through their service.
    Post-traumatic stress disorder and traumatic brain injury are the 
signature wounds of today's wars. Both conditions are increasing in 
number, particularly among those who have served in Operation Iraqi 
Freedom and Operation Enduring Freedom. The President's request for a 
57% increase in funding in this area is appropriate considering that a 
2011 Senate Committee on Veterans Affairs survey of 319 VA mental 
health staff revealed that services for veterans coping with mental 
health issues and TBI are lacking considerable support. Among the 
findings:

      New mental health patient appointments could be scheduled 
within 14 days, according to 63 percent of respondents, but only 48.1 
percent believed veterans referred for specialty appointments for PTSD 
or substance abuse would be seen within 14 days.
      Seventy percent of providers said their sites had 
shortages of mental health space.
      Forty-six percent reported that a lack of off-hours 
appointments was a barrier to care.
      More than 26 percent reported that demand for 
Compensation and Pension (C&P) exams pulled clinicians away from direct 
care.
      Just over 50 percent reported that growth in patient 
numbers contributed to mental health staff shortages.

    VHA and, at the request of Congress, VA's Office of the Inspector 
General have studied the problem since the survey was conducted. On 
April 23, 2012, the VAOIG released the report, ``Review of Veterans' 
Access to Mental Health Care.'' It found that VHA's mental health 
performance data was neither accurate nor reliable. In VA's fiscal 2011 
Performance and Accountability Report, VHA grossly over-reported that 
95 percent of first-time patients received a full mental health 
evaluation within 14 days. However, it was found that VHA completed 
approximately 64 percent of new-patient appointments for treatment 
within 14 days of their desired date, but approximately 36 percent of 
appointments exceeded 14 days. VHA schedulers also were not following 
procedures outlined in VHA directives, and were scheduling clinic 
appointments on the system's availability rather than the patient's 
clinical need.
    The American Legion believes VA must focus on head injuries and 
mental health without sacrificing awareness and concern for other 
conditions afflicting servicemembers and veterans. As an immediate 
priority, VA must ensure staffing levels are adequate to meet the need. 
The American Legion also urges Congress to invest in research, 
screening, diagnosis and treatment for PTSD and TBI and will continue 
to monitor VA to ensure that they remain good stewards of the people's 
money
    The American Legion was a strong proponent of funding VHA in 
advance of the traditional budget cycle. All accounts - medical 
services, medical support and compliance, and medical facilities - 
should receive increased funding to offset the increase in cost of 
living and Congress should supplement these accounts if necessary.
    Although The American Legion supports advance appropriations, we 
remain concerned accurate projections on population and utilization and 
other challenges still remain.
    One such challenge this year regards the procurement of medical 
equipment and Information Technology (IT) purchases. When IT within the 
VA was combined together across the entire agency it was implemented to 
improve efficiency, contracting, management, and other challenges 
inherent with three disjoint IT management teams. This has proved 
somewhat successful. However we are hearing that procurement of medical 
equipment and IT is hampered at medical facilities due to budget 
implementation failures through continuing resolutions. While a VA 
medical center director might have his/her operational funding 
beginning October 1 because of advance appropriations, much needed IT 
or medical equipment might be delayed due to a continuing resolution 
impasse in Congress. This has a detrimental impact on the veteran and 
his/her care. Therefore, The American Legion recommends the IT portion 
of the budget be added to advance appropriations and help smooth those 
budget challenges. Additionally, The American Legion remains committed 
to working with the VA in any way possible to move the VA toward their 
goal of becoming a paperless system. We are eager to see how the VA 
plans to spend the $155 million improving the Veterans Benefits 
management System, and the $136.4 million that is proposed to convert 
the paper to electronic files.
                            Medical Services
    Over the past two decades, VA has dramatically transformed its 
medical care delivery system. Through The American Legion visits to a 
variety of medical facilities throughout the nation during our System 
Worth Saving Task Force, we see firsthand this transformation and its 
impact on veterans in every corner of the nation.
    While the quality of care remains exemplary, veteran health care 
will be inadequate if access is hampered. Today there are over 23 
million veterans in the United States. While 8.3 million of these 
veterans are enrolled in the VA health care system, a population that 
has been relatively steady in the past decade, the costs associated 
with caring for these veterans has escalated dramatically.
    For example between FYs 2007 and 2010, VA enrollees increased from 
7.8 million to 8.3 million \2\. During the same period, inpatient 
admissions increased from 589 thousand to 662 thousand. Outpatient 
visits also increased from 62 to 80.2 billion. Correspondingly, cost to 
care for these veterans increased from $29.0 billion to $39.4 billion. 
This 36% increase during those two years is a trend that dramatically 
impacts the ability to care for these veterans.
---------------------------------------------------------------------------
    \2\ Source: Department of Veterans Affairs, Veterans Health 
Administration, Office of the Assistant Deputy Under Secretary for 
Health for Policy and Planning. Prepared by the National Center for 
Veterans Analysis and Statistics
---------------------------------------------------------------------------
    While FY2010 numbers seemingly leveled off - to only 3% annual 
growth - will adequate funding exist to meet veteran care needs? If 
adequate funding to meet these needs isn't appropriated, VA will be 
forced to either not meet patient needs or shift money from other 
accounts to meet the need.
    Even with the opportunity for veterans from OIF/OEF to have up to 5 
years of care following their active duty period, we have not seen a 
dramatic change in overall enrollee population. Yet The American Legion 
remains concerned that the population estimates are dated and not 
reflective of the costs. If current economic woes and high unemployment 
rates for veterans remain and with the Vietnam Era veterans beginning 
to retire and needing healthcare that may no longer be provided by 
their employers, VA medical care will become enticing for a veteran 
population that might not have utilized those services in the past.
    Finally, ongoing implementation of programs such as the PL 111-163 
``Caregiver Act'' will continue to increase demands on the VA health 
care system and therefore result in an increased need for a budget that 
can adequately deal with the challenges.
    The final FY 2013 advanced appropriations for Medical Services was 
$41.3 billion. In order to meet the increased levels of demand, even 
assuming that not all eligible veterans will elect to enroll for 
coverage, and keep pace with the cost trend identified above, there 
must be an increase to account for both the influx of new patients and 
increased costs of care.
                     Medical Support and Compliance
    The Medical Support and Compliance account consists of expenses 
associated with administration, oversight, and support for the 
operation of hospitals, clinics, nursing homes, and domiciliaries. 
Although few of these activities are directly related to the personal 
care of veterans, they are essential for quality, budget management, 
and safety. Without adequate funding in these accounts, facilities will 
be unable to meet collection goals, patient safety, and quality of care 
guidelines.
    The American Legion has been critical of programs funded by this 
account. We remain concerned patient safety is addressed at every 
level. We are skeptical if patient billing is performed efficiently and 
accurately. Moreover, we are concerned that specialty advisors/
counselors to implement OIF/OEF outreach, ``Caregiver Act'' 
implementation, and other programs are properly allocated. If no need 
for such individuals exists, should the position be placed within a 
facility? Simply throwing more money at this account, increasing staff 
and systems won't resolve all these problems.
    During the previous budget, this account grew by nearly 8% to $5.31 
billion. The American Legion questions the necessity for that rate to 
continue at this time.
                           Medical Facilities
    During FY 2012, VA unveiled the Strategic Capital Investment 
Planning (SCIP) program. This ten-year capital construction plan was 
designed to address VA's most critical infrastructure needs within VA. 
Through the plan, VA estimated the ten-year costs for major and minor 
construction projects and non-recurring maintenance would total between 
$53 and $65 billion over ten years. Yet during the FY 2012 budget, 
these accounts were underfunded by more than $4 billion.
    The American Legion is supportive of the SCIP program which 
empowers facility managers and users to evaluate needs based on patient 
safety, utilization, and other factors. While it places the onus on 
these individuals to justify the need, these needs are more reflective 
of the actuality as observed by our members and during our visits. Yet, 
VA has taken this process and effectively neutered it through budget 
limitations thereby underfunding the accounts and delaying delivery of 
critical infrastructure.
    So while failing to meet these needs, facility managers will be 
forced to make do with existing aging facilities. While seemingly 
saving money in construction costs, the VA will be expending money 
maintaining deteriorating facilities, paying increased utility and 
operational costs, and performing piecemeal renovation of properties to 
remain below the threshold of major or minor projects.
    This is inefficient byproduct of budgeting priorities. Yet, as will 
be noted later, the reality remains that the SCIP program is unlikely 
to be funded at levels necessary to accomplish the ten year plan. 
Therefore, this account must be increased to meet the short term needs 
within the existing facilities.
                    Medical and Prosthetic Research
    The American Legion believes VA research must focus on improving 
treatment for medical conditions unique to veterans. Because of the 
unique structure of VA's electronic medical records (VISTA), VA 
research has access to a great amount of longitudinal data incomparable 
to research outside the VA system. Because of the ongoing wars of the 
past decade, several areas have emerged as ``signature wounds'' of the 
Global War on Terror, specifically Traumatic Brain Injury (TBI), 
Posttraumatic Stress Disorder (PTSD) and dealing with the effects of 
amputated limbs.
    Much media attention has focused on TBI from blast injuries common 
to Improved Explosive Devices (IEDs) and PTSD. As a result, VA has 
devoted extensive research efforts to improving the understanding and 
treatment of these disorders. Amputee medicine has received less 
scrutiny, but is no less a critical area of concern. Because of 
improvements in body armor and battlefield medicine, catastrophic 
injuries that in previous wars would have resulted in loss of life have 
led to substantial increases in the numbers of veterans who are coping 
with loss of limbs.
    As far back as 2004, statistics were emerging which indicated 
amputation rates for US troops were as much as twice that from previous 
wars. By January of 2007, news reports circulated noting the 500th 
amputee of the Iraq War. The Department of Defense response involved 
the creation of Traumatic Extremity Injury and Amputation Centers of 
Excellence, and sites such as Walter Reed have made landmark strides in 
providing the most cutting edge treatment and technology to help 
injured service members deal with these catastrophic injuries.
    However, The American Legion remains concerned that once these 
veterans transition away from active duty status to become veteran 
members of the communities, there is a drop off in the level of access 
to these cutting edge advancements. Ongoing care for the balance of 
their lives is delivered through the VA Health Care system, and not 
through these concentrated active duty centers.
    Many reports indicate the state of the art technology available at 
DoD sites is not available from the average VA Medical Center. With so 
much focus on ``seamless transition'' from active duty to civilian life 
for veterans, this is one critical area where VA cannot afford to lag 
beyond the advancements reaching service members at DoD sites. If a 
veteran can receive a state of the art artificial limb at the new 
Walter Reed National Military Medical Center (WRNMC) they should be 
able to receive the exact same treatment when they return home to the 
VA Medical Center in their home community, be it in Gainesville, Battle 
Creek, or Fort Harrison.
    American Legion contact with senior VA health care officials has 
concluded that while DoD concentrates their treatment in a small number 
of facilities, the VA is tasked with providing care at 152 major 
medical centers and over 1,700 total facilities throughout the 50 
states as well as in Puerto Rico, Guam, American Samoa and the 
Philippines. Yet, VA officials are adamant their budget figures are 
sufficient to ensure a veteran can and will receive the most cutting 
edge care wherever they choose to seek treatment in the system.
    The American Legion remains concerned about the ability to deliver 
this cutting edge care to our amputee veterans, as well as the ability 
of VA to fund and drive top research in areas of medicine related to 
veteran-centric disorders. There is no reason VA should not be seen at 
the world's leading source for medical research into veteran injuries 
such as amputee medicine, PTSD and TBI.
    In FY 2011 VA received a budget of $590 million for medical and 
prosthetics research. Only because of the efforts of the House and 
Senate, was this budget kept at that level during the FY 2012 budget 
due to significant pressure from The American Legion. Even at this 
level, The American Legion contends this budget must be increased, and 
closely monitored to ensure the money is reaching the veteran at the 
local.
                  Medical Care Collections Fund (MCCF)
    In addition to the aforementioned accounts which are directly 
appropriated, medical care cost recovery collections are included when 
formulating the funding for VHA. Over the years, this funding has been 
contentious because they often included proposals for enrollment fees, 
increased prescription rates, and other costs billed directly to 
veterans. The American Legion has always ardently fought against these 
fees and unsubstantiated increases.
    Beyond these first party fees, VHA is authorized to bill health 
care insurers for nonservice-connected care provided to veterans within 
the system. Other income collected into this account includes parking 
fees and enhanced use lease revenue. The American Legion remains 
concerned that the expiration of authority to continue enhanced use 
leases will greatly impact not only potential revenue, but also 
delivery of care in these unique circumstances. We urge Congress to 
reauthorize the enhanced use lease authority with the greatest amount 
of flexibility allowable.
    In May 2011, the VA Office of Inspector General (OIG) issued a 
report auditing the collections of third party insurance collections 
within MCCF. Their audit found that ``VHA missed opportunities to 
increase MCCF by . . .46%.'' Because of ineffective processes used to 
identify billable fee claims and systematic controls, it was estimated 
VHA lost over $110 million annually. In response to this audit, VHA 
assured they'd have processes in place to turn around this trend.
    Yet even if those reassurances were met, the MCCF collection would 
not meet the quarterly loss beneath the budgeted amounts. Without those 
collections, savings must be garnered elsewhere to meet these 
shortfalls, thereby causing facility administrators and VISN directors 
to make difficult choices that ultimately negatively impact veterans 
through a lack of hiring, delay of purchasing, or other savings 
methods.
    It would be unconscionable to increase this account beyond the 
previous levels that were not met. To do so without increasing co-
payments or collection methods would be counterproductive and mere 
budget gimmickry. While we recognize the need to include this in the 
budget, The American Legion cannot be part of a budget that penalizes 
the veteran for administrative failures.
                       Appropriations for FY 2014
    The remainder of the accounts within VA are being allocated funding 
for FY 2014. These include funding for general operation of VA Central 
Office (VACO), the National Cemetery Administration (NCA) and Veteran 
Benefits Administration (VBA).
                    Veteran Benefits Administration
    National Commander Koutz testified in October that when speaking to 
The American Legion National Convention in August 2010, VA Secretary 
Eric Shinseki declared VA would ``break the back of the backlog by 
2015'' by committing to 98 percent accuracy, with no claim pending 
longer than 125 days. Over the past three years, VA has gone backward, 
not forward, in both of these key areas.
    According to VA's own figures, over 65 percent of veterans with 
disability benefits claims have been waiting longer than 125 days for 
them to be processed. In contrast, when Secretary Shinseki made his 
promise, only 37.1 percent of claims had been pending longer than 125 
days. The American Legion has found through its field research the 
problem varies greatly by regional office. While some regional offices 
may have an average rate of 76 days per claim, others take 336 days--a 
troubling inconsistency.
    Unfortunately, accuracy is also a problem, according to Legion site 
visits and field research. VA has been reluctant to publicly post 
accuracy figures in its Monday Morning Workload reports, but VA's own 
STAR reports for accuracy place the rate in the mid 80s. The American 
Legion's Regional Office Action Review (ROAR) team typically finds an 
even higher error rate, sometimes up to two thirds of all claims 
reviewed.
    VA is hopeful that the Veterans Benefits Management System (VBMS) 
will eliminate many of the woes that have led to the backlog, but 
electronic solutions are not a magic bullet. Without real reform for a 
culture of work that places higher priority on speed rather than 
accuracy, VA will continue to struggle, no matter the tools used to 
process claims.
    The American Legion has long argued that VA's focus on quantity 
over quality is one of the largest contributing factors to the claims 
backlog. If VA employees receive the same credit for work, whether it 
is done properly or improperly, there is little incentive to take the 
time to process a claim correctly. When a claim is processed in error, 
a veteran must appeal the decision to receive benefits, and then wait 
for an appeals process that may take months and months to resolve and 
possibly years for before delivery of the benefit.
    The American Legion believes VA must develop a processing model 
that puts as much emphasis on accuracy as it does on the raw number of 
claims completed. Nowhere does VA publicly post its accuracy figures. 
America's veterans need to have confidence in the work done by VA, and 
that requires transparency.
    The VBMS system could allow VA to develop more effective means of 
processing claims, such as the ability to separate single issues that 
are ready to rate, starting a flow of relief to veterans while more 
complex medical issues are considered and decided.
                         Information Technology
    In addition to the VBMS system, the greatest long awaited project 
is the launch of the joint VA and Department of Defense (DoD) lifetime 
record - Virtual Lifetime Electronic Record (VLER). American Legion 
Resolution 42-2012 supports a single unified medical record for 
military members and veterans. We have heard from VA that this 
initiative is still vital and an important piece of their overall 
solution, but The American Legion remains concerned that DoD has yet to 
commit to ensuring this project is completed.
    During the previous budgeting, VA was unable to provide information 
on the overall cost of creating such a system, but assured veteran 
advocates there was enough flexibility to address any costs associated 
with the project. In the meantime, several releases and announcements 
have been issued by VA towards the continued evolution of this project, 
but there is little to demonstrate we're any closer to producing a 
ready model. The American Legion calls upon Congress to continue to 
pressure VA and DoD to move towards this system as expeditiously as 
possible. With the development and launch of VBMS nearly complete, the 
entire IT focus should center on VLER.
    In order to provide the necessary resources for the nationwide 
rollout of VBMS and still maintain efforts towards development of VLER, 
The American Legion believes a small increase is justified within IT.
                      Major and Minor Construction
    After two years of study the VA developed the Strategic Capital 
Investment Planning (SCIP) program. It is a ten-year capital 
construction plan designed to address VA's most critical infrastructure 
needs within the Veterans Health Administration, Veterans Benefits 
Administration, National Cemetery Administration, and Staff Offices.
    The SCIP planning process develops data for VA's annual budget 
requests. These infrastructure budget requests are divided into several 
VA accounts: Major Construction, Minor Construction, Non-Recurring 
Maintenance (NRM), Enhanced-Use Leasing, Sharing, and Other Investments 
and Disposal. The VA estimated costs were between $53 and $65 billion.
    The American Legion is very concerned about the lack of funding in 
the Major and Minor Construction accounts. Based on VA's SCIP plan, 
Congress underfunded these accounts. Clearly, if this underfunding 
continues VA will never fix its identified deficiencies within its ten-
year plan. Indeed, at current rates, it will take VA almost sixty years 
to address these current deficiencies.
    The American Legion also understands there is a discussion to refer 
to SCIP in the future as a ``planning document'' rather than an actual 
capital investment plan. Under this proposal, VA will still address the 
deficiencies identified by the SCIP process for future funding requests 
but rather than having an annual appropriation, SCIP will be extended 
to a five year appropriation, similar to the appropriation process used 
by the Department of Defense as its construction model. Such a plan 
will have huge implications on VA's ability to prioritize or make 
changes as to design or project specifications of its construction 
projects. The American Legion is against this five year appropriation 
model and recommends Congress continue funding VA's construction needs 
on an annual appropriations basis.
    The American Legion recommends Congress adopt the 10-year action 
plan created by the SCIP process. Congress must appropriate sufficient 
funds to pay for needed VA construction projects and stop underfunding 
these accounts. In FY 2014 Congress must provide increased funding to 
those accounts to ensure the VA-identified construction deficiencies 
are properly funded and these needed projects can be completed in a 
timely fashion.
                 State Veteran Home Construction Grants
    Perhaps no program facilitated by the VA has been as impacted by 
the decrease in government spending than the State Veteran Home 
Construction Grant program. This program is essential in providing 
services to a significant number of veterans throughout the country at 
a fraction of the daily costs of similar care in private or VA 
facilities. As the economy rebounds and states are pivoting towards 
resuming essential services, taking advantage of depressed construction 
costs, and meeting the needs of an aging veteran population, greater 
use of this grant program will continue. The American Legion encourages 
Congress to maintain the funding level of this program.
                 National Cemetery Administration (NCA)
    No aspect of the VA is as critically acclaimed as the National 
Cemetery Administration (NCA). In the 2010 American Customer 
Satisfaction Index, the NCA achieved the highest ranking of any public 
or private organization. In addition to meeting this customer service 
level, the NCA remains the highest employer of veterans within the 
federal government and remains the model for contracting with veteran 
owned businesses.
    While NCA met their goal of having 90% of veterans served within 75 
miles of their home, their aggressive strategy to improve upon this in 
the coming five years will necessitate funding increases for new 
construction. Congress must provide sufficient major construction 
appropriations to permit NCA to accomplish this goal and open five new 
cemeteries in the coming five years. Moreover, funding must remain to 
continue to expand existing cemetery facilities as the need arises.
    While the costs of fuel, water, and contracts have risen, the NCA 
operations budget has remained nearly flat for the past two budgets. 
Unfortunately recent audits have shown cracks beginning to appear. Due 
predominantly to poor contract oversight, several cemeteries 
inadvertently misidentified burial locations. Although only one or two 
were willful violations of NCA protocols, the findings demonstrate a 
system about ready to burst.
    To meet the increased costs of fuel, equipment, and other resources 
as well as ever-increasing contract costs, The American Legion believes 
a small increase is necessary. In addition, we urge Congress to 
adequately fund the construction program to meet the burial needs of 
our nation's veterans.
                      State Cemetery Grant Program
    The NCA administers a program of grants to states to assist them in 
establishing or improving state-operated veterans' cemeteries through 
VA's State Cemetery Grants Program (SCGP). Established in 1978, this 
program funds nearly 100% of the costs to establish a new cemetery, or 
expand existing facilities. For the past two budgets this program has 
been budgeted $46 million to accomplish this mission.
    New authority granted to VA funds Operation and Maintenance 
Projects at state veterans cemeteries to assist states in achieving the 
national shrine standards VA achieves within national cemeteries. 
Specifically, the new operation and maintenance grants have been 
targeted to help states meet VA's national shrine standards with 
respect to cleanliness, height and alignment of headstones and markers, 
leveling of gravesites, and turf conditions. In addition, this law 
allowed VA to provide funding for the delivery of grants to tribal 
governments for native American veterans. Yet we have not seen the 
allocation of funding increased to not only meet the existing needs 
under the construction and expansion level, but also the needs from 
operation and maintenance and tribal nation grants. Moreover, as these 
cemeteries age, the $5 million limitation must be revoked to allow for 
better management of resources within the projects.
               Additional concerns of The American Legion
                 Turn Military Experience Into Careers
    Servicemembers and veterans receive some of the finest technical 
and professional training in the world. Many have experience in health 
care, electronics, computers, engineering, drafting, air-traffic 
control, nuclear energy, mechanics, carpentry, and other fields. Many 
of these military acquired skills require some type of license or 
certificate to qualify for civilian jobs. In too many cases, this 
license or certificate requires schooling already completed through 
military training programs. The American Legion is fighting for a major 
overhaul of the licensure and certification policies as they relate to 
military job skills, on the national and state levels alike. As demand 
for qualified workers in a diverse range of occupations continues to 
grow, veterans offer skills, training, dedication and discipline that 
translate well into specialized fields and trades.
    The American Legion is working with credentialing and licensing 
agencies to help veterans receive credit for their experiences, 
maximize their abilities and move quickly into productive careers. 
While the VOW to Hire Heroes Act and the Veterans Skills to Jobs Act of 
2012, are important steps that The American Legion strongly supported 
and helped shape, they are only a good start in a long march to improve 
career opportunities for those who have served in uniform.
                Ease the Military-to-Civilian Transition
    Unfortunately, this transition has been hampered by poor 
communication and coordination between DoD and VA. Efforts have been 
made to correct the process, which is improving, but too many veterans 
still slip through the cracks and fail to receive the benefits they 
earned and deserve or the support they need to restart their lives. 
Transition Assistance Programs (TAP) are now mandatory across all 
branches of military service, a change The American Legion commends. 
While TAP will require much fine tuning to accurately deliver what 
veterans need, implementing the program universally already is a major 
improvement.
    Current DoD policy requires new inductees to enroll in the 
eBenefits portal, which will help all future generations of veterans. 
While VA and DoD still try to iron out differences in electronic data 
systems necessary to make the Virtual Lifetime Electronic Record (VLER) 
effective, the eBenefits portal holds great promise.
    Fast-tracking the VLER program to ensure seamless transfer of 
medical records must be a top priority, and necessary funds must be 
allocated to fulfill it. The delays that have plagued this program are 
inexcusable. The American Legion urges Congress and the administration 
to work together to put the program back on track.
    While The American Legion is encouraged by the progress made in 
TAP, the program is still new and will require dedicated oversight and 
attention to ensure it is meeting the needs of the servicemembers it is 
designed to help.
                               Conclusion
    In conclusion, The American Legion is optimistic the President has 
proposed a budget that addresses many of the needs that the almost two 
million service members who are returning after deployments in support 
of the Global War on Terror will soon need. We're hopeful savings 
generated through downsizing of the military are leveraged against the 
need of thousands of servicemembers who are or soon will be discharged 
to create the savings. However, The American Legion has seen in 
previous years, these are not used to provide the care and benefits 
afforded to our nation's veterans. Too often while veteran advocates 
celebrate dramatically increased budgets, the veteran patient, 
claimant, or widow is left wondering where the money went.
    Our nation's veterans deserve adequate and responsible funding to 
the fullest extent possible. After over a decade of service, our newest 
era of veterans will now join the ranks of generations of their 
brothers and sisters who served in prior wars and conflicts and all are 
owed a great debt.

                                 
                        Questions For The Record

      Letter From: Hon. Michael H. Michaud, Ranking Member, To: VA

    April 18, 2013

    The Honorable Eric K. Shinseki
    Secretary
    U.S. Department of Veterans Affairs
    810 Vermont Avenue, NW
    Washington, DC 20420

    Dear Mr. Secretary:

    In reference to our Full Committee hearing entitled, ``U.S. 
Department of Veterans' Affairs Budget Request for Fiscal Year 2014'' 
that took place on April 11, 2013, I would appreciate it if you could 
answer the enclosed hearing questions by the close of business on May 
24, 2013.

    Committee practice permits the hearing record to remain open to 
permit Members to submit additional questions to the witnesses. 
Attached are additional questions directed to you.

    In preparing your answers to these questions, please provide your 
answers consecutively and single-spaced and include the full text of 
the question you are addressing in bold font. To facilitate the 
printing of the hearing record, please e-mail your response in a Word 
document, to Carol Murray at [email protected] by the close 
of business on May 24, 2013. If you have any questions please contact 
her at 202-225-9756.

    Sincerely,

    MICHAEL H. MICHAUD
    Ranking Member

    MHM:cm

                                 
               Questions Submitted by Rep. Beto O'Rourke
    1. What is your process for determining what regions get a full 
service VA hospital?

    2. Exactly how will low and moderate income veterans be protected 
from benefit cuts under the President's Chain CPI proposal? When will 
those details be provided?

                                 
               Questions Submitted by Rep. Corrine Brown
    1. In FY13, there was a line item for 508 compliance of $9.43 
million. However, there is no line item in the FY14 budget for 508 
compliance, specifically 508 compliance to IT systems. What staffing 
resources and line item funding will be available for FY14? Please 
explain.

    2. In the fall of 2012, Congress passed HR 1627, which became PL 
112-154. Section 111 of the law directed the VA to develop a plan for 
recovery and collection of amounts for Department of Veterans Affairs 
Medical Care Collections Fund. Congress approved this language so that 
the VA would develop and implement a better process and system of 
controls to ensure accurate and full collections by the VA health care 
system.

    a. Please provide details on the plan and the VA's efforts to 
implement its provisions.

    3. The issue of third party payers and the Veterans Health 
Administration's Medical Care Collections Fund has been the subject of 
a number of government reports over the years. To help better 
understand this issue, please provide the following data:

    a. Total amount the VA sought in third party billings for each of 
the past 6 years.

    b. The percentage increase in billings for each year compared to 
the previous year's billing.

    c. The percentage of collections for each year for the past 6 
years.

    d. The collection rate for claims over $1500 for each of the past 6 
years.

    e. The collection rate for claims under $1500 for each of the past 
6 years.

                                 
               Questions Submitted by Rep. Negrete McLeod
    1. Homelessness among veterans is a serious problem in my district 
in California. How many housing vouchers through the HUD-VASH program 
do you anticipate will be funded by your requested amount of $278 
million?

    2. In order to receive payment from VA, mental health providers are 
often required to have a COAMFTE certification. This is not available 
in most California universities, resulting in 95% of licensed 
therapists not qualifying to receive payment. These therapists are 100% 
qualified to treat Veterans. What can VA do to work with California 
therapists to ensure access to mental health care despite this 
bureaucratic barrier?

    3. As you mentioned in your testimony, the number of women Veterans 
enrolled in VA healthcare has increased by 22% since 2009. What is VA's 
timeline for increasing the number of facilities that have 
comprehensive women's clinics beyond the current 50%?

                                 
             Questions Submitted by Ranking Member Michaud
    1. We have received numerous complaints that the performance and 
adjudication of pension claims for the veterans of Maine has gotten 
worse since the consolidation of pension claims at the Philadelphia VA 
Regional Office.

    a. Please provide the Committee with the reasons for this shift 
from a high performing Regional Office such as Togus to Philadelphia.

    b. Please provide the Committee with the average days to complete 
these claims at the Togus VA Regional Office for the three years prior 
to shifting this workload to the Philadelphia. In addition, since the 
shift in workload, please provide the information relating to 
timeliness and quality metrics of the Philadelphia VA Regional Office.

    c. Has there been any consideration to shifting this workload back 
to high performing regional offices such as Togus?

    2. It has come to the Committee's attention that the VA is planning 
to shift additional FTE back to some of the worst performing VA 
Regional Offices. Many of the worst VA Regional Offices are in high 
cost-of-living areas where it is difficult for VA to recruit and, most 
importantly, retain employees.

    a. In light of VA's plan to move to an electronic processing 
system, where claims could be processed at any station in the country 
simultaneously, what are reasons for providing additional FTE to these 
lower-performing stations instead of moving workload to higher-
performing stations?

    b. Has the VA considered reviewing where it will be able to recruit 
the most talented workforce and considered expanding at those locations 
for the best return on investment?

    3. In terms of meeting your stated goal of ending the claims 
backlog by 2015, does your FY 2014 budget provide additional resources 
for overtime pay? Is this a strategy you plan to utilize in the coming 
fiscal year?

    4. Continued investment in technology is a big component of VA's 
strategy to expand access to benefits and services, eliminate the 
claims backlog, and end veteran homelessness, the top three priorities 
of the VA. You have requested nearly an 11 percent increase.

    a. Can you point to specific programs and initiatives that support 
your top three priorities that you will be able to undertake with this 
increase?

    b. Please provide the Committee with any strategic plan that is in 
place that directly correlates your IT systems and software with your 
three stated priorities, including proposed lifespan of these systems 
and software and identified necessary investments in the next five 
fiscal years.

    5. A large component of your IT budget, $2.2 billion, is for 
``sustainment.'' This includes spending on legacy systems.

    a. Do you have a long-term strategy to reduce your expenditures on 
legacy systems? What are the short and medium term steps in this plan?

    b. Is VA's spending on legacy systems in line with other Federal 
agencies and the private sector?

    6. Your information technology budget for FY 2014 projects $252 
million, or 51 percent of the development budget request of $495 
million, to fund the Interagency Program Office (IPO), which will 
manage the integrated Electronic Health Record (iEHR) and the Virtual 
Lifetime Electronic Record (VLER). Given the problems with the 
management of the IPO that were examined in a recent hearing, what 
substantive changes have been made to the structure of the IPO that 
will improve its performance and what are the measurable outcomes you 
expect to achieve with this $252 million dollar expenditure?

    7. You have requested an increase of 13.6 percent in discretionary 
spending for the Veterans Benefits Administration.

    a. Can you point to specific program elements and achievements that 
this increase supports in terms of your goal of ending the claims 
backlog by 2015?

    b. If you were provided an additional $300 million for this 
account, what specifically could you do with such an increase that 
would provide the biggest bang for the buck this year in terms of 
ending the claims backlog?

    8. Your budget estimates a 16 percent increase in mandatory 
spending for Compensation and Pension.

    a. Please provide the Committee with information regarding the 
factors driving these large increases in mandatory spending?

    9. I understand that VA has been generally successful in addressing 
the issue of veteran homelessness. According to your budget submission, 
you plan to spend just under $1.4 billion on this initiative. I also 
understand that there is a group of veterans out there who are 
chronically homeless and suffer from co-morbid issues such as substance 
abuse and post-traumatic stress disorder and are the most in need of 
veteran homeless services.

    a. Please provide the Committee with detailed information regarding 
how current programs and initiatives address this population.

    b. Have these programs and initiatives been effective in terms of 
this population, and has the VA seen a decrease in the numbers of this 
homeless population as a result of these programs and initiatives?

    10. In your FY 2014 budget submission you have proposed new savings 
of $482 million dollars in your medical care accounts, $370 million 
from new acquisition savings and $112 million from improved operations.

    a. Please provide the Committee with detailed explanations 
regarding these proposed savings, including details on how they will be 
achieved and how VA will determine whether these proposals have been 
successful.

    b. VA's current estimates for its FY 2013 budget include $200 
million in savings, $150 million from ``Acquisition Proposals'' and $50 
million from ``Travel Campaign to Cut Waste.'' Have these savings been 
realized?

    c. In terms of savings related to ``Acquisition Proposals'' you 
attribute $150 million in FY 2013, and $370 million respectively in FY 
2014 and FY 2015. Please provide detailed information regarding how the 
VA will realize $890 million in savings over these three fiscal years. 
Once these savings have been realized for a specific fiscal year, 
should future savings not realized by additional efforts and 
initiatives be reflected in the VA's base budget and not listed as an 
additional saving?

    d. Please explain the $257 million dollars of clinical and 
pharmaceutical savings that are embedded in the actuarial model used to 
project VA health care requirements.

    11. In your budget submission you estimate that VA will spend $258 
million in 2014 on new models of care such as the patient centered 
medical home model. Over the last four years VA has put the structure 
in place to bring the initiatives to fruition. Some of the outcomes VA 
would like to achieve in the next 7 to 10 years include improved 
patient satisfaction, access, and efficiency.

    a. What is the strategic plan VA has in place to assess the 
outcomes of this major initiative that, by your own admission, will 
take close to a decade to achieve?

    b. The budget also references improving access by adopting various 
eHealth technologies. Can you provide some examples of what those might 
be and is the cost for those various technologies part of the $258 
million?

    12. Providing effective, timely, and quality mental health care is 
a challenge that faces not just the VA but the nation as a whole. We 
know that provider shortages, nationally, affect VA's ability in some 
areas to provide timely mental health care. I think we can all agree 
that VA cannot do it alone. VA projects to spend $7 billion dollars on 
mental health programs in fiscal year 2014.

    a. Please provide the Committee with information regarding VA's 
efforts to work with other Federal agencies, States, and communities to 
address this issue in a strategic way nationally.

    13. It is estimated that medical inflation is currently running at 
an annual rate of 3.7 percent. This would seem to indicate, looking 
ahead, an approximate $2 billion increase for medical care accounts for 
2015, $1 billion more than VA have requested.

    a. Is VA assuming a drastically lower rate of medical inflation or 
are there programmatic changes that you expect to undertake in order to 
provide the same level of medical care in 2015 that you are providing 
today?

                                 
       Pre-Hearing Questions From HVAC Majority and VA Responses
    Question 1: The President's Fiscal Year 2014 updated request and 
the Fiscal Year 2015 advance appropriation request for medical care was 
formulated using, in part, projected resource estimates derived from 
VA's Enrollee Healthcare Projection Model (EHCPM).

    a. What was the updated EHCPM estimate of total resources for 
Fiscal Year 2014 medical care and the Fiscal year 2015 medical care 
advance?

    VA Response: The 2012 VA Enrollee Health Care Projection Model 
estimates for total expenditures for modeled services were $50.43 
billion for FY 2014 and $52.85 billion for FY 2015. The estimates 
include the projections for ambulatory care, inpatient care, 
rehabilitation care, mental health care, prosethetics care, and dental 
care.

    b. When will the Spring EHCPM update occur?

    VA Response: The VA Enrollee Health Care Projection Model is 
updated annually. The 2013 Model update will be completed in April 2013 
and will be used to inform the development of the VA medical care 
budget that will be sent to Congress in early 2014.

    c. Do you agree to share with the Committee the updated EHCPM 
estimates this Spring and the impact those revised estimates will have 
on

    1) the current 2013 budget and initiatives contained within it;

    2) the 2014 budget and initiatives within it; and

    3) the 2015 medical care advance?

    VA Response: The 2013 Model estimates are the starting point for 
informing VA's medical care budget. These projections will likely be 
updated as additional guidance is received on issues such as wage 
policies. These estimates are pre-decisional and for internal use only 
until the final budget submission is released.

    d. What is the total resource estimate for VA medical care in 2014 
and the 2015 advance derived from both EHCPM estimates and non-EHCPM 
estimates?

    VA Response: The total resource estimate for VA medical care in FY 
2014 is $57.9 billion, and the FY 2015 advance appropriation is $59.1 
billion. The direct appropriation request for FY 2014 is $54.6 billion 
and in FY 2015 is $55.6 billion.

    The total resource estimate for VA medical care in FY 2014 is $57.9 
billion, and the FY 2015 advance appropriation is $59.1 billion (see 
detailed breakout below).

                          Dollars in Thousands
------------------------------------------------------------------------
                                                  2014          2015
                 Description                    Estimate      Estimate
------------------------------------------------------------------------
Appropriation (including transfers).........  $54,447,000   $55,619,227
Annual Appropriation Adjustment.............     $157,500
Collections.................................   $3,064,000    $3,174,000
Reimbursements..............................     $265,000      $272,000
------------------------------------------------------------------------
Total Obligations...........................  $57,933,500   $59,065,227
------------------------------------------------------------------------

    Question 2: What is the budgetary effect on VA, if any, of the 
impending full implementation of the Affordable Care Act? Please 
explain the impact and how/where it may occur.

    VA Response: The FY 2014 VA medical care budget requests $85 
million to ensure VA is prepared to respond to additional Veteran 
enrollment and utilization of health care services due to the 
implementation of the Affordable Care Act (ACA). In addition, the FY 
2014 VA IT budget includes $3.4 million to build functionality needed 
to deliver statements to enrolled Veterans and beneficiaries enrolled 
in CHAMPVA and Spina Bifida who maintain Minimal Essential Coverage 
through VA. This funding will also go towards building the tool to 
identify and report on individuals who are enrolled in VA health 
programs identified as Minimal Essential Coverage. VA expects to see a 
modest increase in enrollment as a result of ACA implementation. VA 
continues to engage with its Federal partners to identify collaborative 
opportunities on areas that affect VA and Veterans.

    Question 3: Please provide a listing of all Senior Executive 
Service bonuses/performance awards for Fiscal Year 2012. In providing 
the listing, please include the following information:

    a. The name of the individual approved to receive the bonus or 
performance award;

    b. The title of the individual;

    c. The VA organizational unit the individual belongs to; and

    d. The amount of the bonus or performance award.

    VA Response: A final decision regarding FY 2012 performance awards 
has not been made. VA will provide a response after the final decisions 
have been made.

    Question 4 - Part 1: In hearing testimony last Congress VA 
indicated it would re-evaluate the size and structure of the various 
VISN headquarters. What is the result of that re-evaluation?

    VA Response: To ensure consistent and efficient use of staffing 
resources in each Veterans Integrated Service Network (VISN) office, 
the Deputy Under Secretary for Health for Operations and Management 
(DUSHOM) chartered a VISN Staffing Levels Implementation Work Group to 
conduct a review of each VISN office. The workgroup reviewed the 
mission and function of each VISN and attempted to identify core staff 
and certain flexible additional staff to support the mission and 
function of the VISN. This review was intended to achieve an alignment 
of resources to the mission of the VISN, and to essentially allow 
certain resources to be returned to facilities in closer support of 
patient care. The workgroup established definitions of VISN staff 
functions, identified targeted staffing levels, developed an 
implementation timeline and plan for each VISN's adjustment in staffing 
levels, and created a monitoring mechanism to assure achievement and 
ongoing management of the targeted staffing levels.
    The Under Secretary for Health approved the DUSHOM workgroup's 
proposal to adapt a standard set of core positions for all VISN 
headquarters, with an additional allocation of staff provided to each 
VISN based on the complexity of the VISN health network. Implementation 
of VISN staffing realignments started in the fourth quarter of FY 2012 
and will be monitored and executed through December 31, 2013.

    Question 4 - Part 2: What impact did the re-evaluation have on the 
number of employees working at the various VISN headquarter offices?

    VA Response: Under the approved structure, each VISN will have 47.5 
base staff and 6 administrative support staff, for a total of 53.5 core 
FTEE. In addition, each network received a variable staffing level 
above the base staffing allotment to utilize at their discretion to 
meet local needs. This additional staffing allotment varies from 2 to 
12 FTEE, based upon the size, complexity and scope of each VISN. The 
number of staff at each VISN will range between 55 and 65, resulting in 
an overall decrease in VISN staff levels from 1,719.9 FTE to a total of 
1,235 FTE. The average VISN size will decrease from approximately 82 
FTE to 59 FTE - a reduction of 23 FTE on average, per VISN.
    VHA does not expect any layoffs or other adverse actions to 
employees to occur as a result of the VISN staffing realignment. 
Adjustments are primarily expected to be accomplished through the 
transfer of functions to facilities, attrition or other similar 
processes. Further, VISN organizations contain ``legacy'' positions 
that VISN leadership would not be inclined to refill if the incumbent 
vacated the position. VISNs are being allotted more than 12 months to 
effect staffing changes, so that any disruption to employees and/or 
mission is minimized. VISN management teams were instructed to ensure 
employees are provided every available opportunity to be involved in 
their new assignments and follow, as appropriate, any bargaining 
agreements with labor unions. VHA and the VISNs are engaging the 
workforce throughout the implementation to ensure their issues and 
concerns are addressed for all affected employees.

    Question 4 - Part 3: Please provide a breakdown, by VISN, of 
headquarter staffing for each of Fiscal Years 2011, 2012, and 2013.

    VA Response: Below are FTEE assigned to VISN offices in FY 2011. 
These totals were based on a data call with each VISN providing the 
number of individuals considered to be VISN staffing. This total was 
collected as the baseline to begin the VISN staffing review. There was 
no additional data call in FY 2012 as the staffing review was well 
underway. Also included below are the targeted FTEE VISN staffing 
levels to be reached at the completion of this process on December 31, 
2013.


------------------------------------------------------------------------
                                                 FY2011        FY 2013
                    VISN                         Actual        Target
------------------------------------------------------------------------
1...........................................        132.7          59.5
------------------------------------------------------------------------
2...........................................         95.3          55.5
------------------------------------------------------------------------
3...........................................         55.2            57
------------------------------------------------------------------------
4...........................................           61            59
------------------------------------------------------------------------
5...........................................           53          55.5
------------------------------------------------------------------------
6...........................................         68.2            59
------------------------------------------------------------------------
7...........................................        163.3            61
------------------------------------------------------------------------
8...........................................         81.6          65.5
------------------------------------------------------------------------
9...........................................         85.9            59
------------------------------------------------------------------------
10..........................................           67            57
------------------------------------------------------------------------
11..........................................          103            59
------------------------------------------------------------------------
12..........................................         87.8            59
------------------------------------------------------------------------
15..........................................           73            57
------------------------------------------------------------------------
16..........................................        118.3            63
------------------------------------------------------------------------
17..........................................         75.4            59
------------------------------------------------------------------------
18..........................................         67.6            59
------------------------------------------------------------------------
19..........................................         55.8            57
------------------------------------------------------------------------
20..........................................         70.3            59
------------------------------------------------------------------------
21..........................................         59.5            59
------------------------------------------------------------------------
22..........................................         60.7            59
------------------------------------------------------------------------
23..........................................         85.3            59
------------------------------------------------------------------------
TOTAL.......................................       1719.9          1237
------------------------------------------------------------------------

    Question 5: How much has been spent on the Veterans Benefits 
Management System? Was that system based, in part, on VA's ``Virtual 
VA'' initiative? If so, how much was spent on Virtual VA and when was 
it initiated?

    VA Response: VA will have invested $325.6 million (IT) into VBMS 
development from FY 2010 through FY 2013. Additionally, VBA invested 
$103.3 million in general operating expenses (GOE) funding (non-IT) 
into VBMS during this same period to support development.
    Virtual VA remained a separate project from VBMS. Virtual VA was 
initiated in 1999. VBMS and Virtual VA development teams began 
discussions on Virtual VA to VBMS migration efforts in November 2012.
    Question 6: The President's budget will likely contain new policy 
initiatives for VA. What is the number and total dollar amount of these 
initiatives? Does the budget request for the initiatives represent full 
funding, or will subsequent appropriations in future years be required?

    VA Response: The FY 2014 President's Budget will propose a number 
of initiatives, and the details will be available on April 10, 2013. 
Future requirements will be evaluated as part of the budget process in 
FY 2015 and beyond.

    Question 7: The President's budget will likely request extension of 
certain expiring legal authorities. Does the appropriation request in 
the budget submission assume that those legal authorities will, in 
fact, be extended?

    VA Response: Yes. The 2014 President's Budget scheduled for release 
on April 10th, does request extension of certain expiring provisions 
and assumes enactment of these authorities.

    Question 8: What was the administrative impact on the various VA 
administrations/accounts which, unlike medical care, were operating 
under a continuing resolution until a week ago? Should consideration be 
given to advance fund additional or all VA accounts? Please explain.

    VA Response: In general, VA would have been able to begin full 
execution of all of its annual operating plans without delays or 
uncertainties, had full-year funding been enacted at the start of the 
fiscal year. The impact of operations under a Continuing Resolution 
(CR) in other than Medical accounts varied in accordance with 
comparisons of the levels of funding from 2012 to 2013. VBA had no 
administrative impact under the CR, which included anomaly funding at 
the President's request level. NCA felt minimal impact as most of its 
contracts are awarded in the second half of the fiscal year. The 
General Administration account funding requested in the 2013 
President's budget was at the 2012 level and thus the CR had no or 
minimal impact to operations. For the Office of Information Technology 
account, the CR created significant uncertainty.

    Question 9: Please describe the efforts made and the results 
obtained in reducing improper payments across all VA elements.

    VA Response: VA's number one financial initiative is identifying, 
preventing, and recovering improper payments.
    Three years ago, VA established a set of goals and initiatives to 
strengthen financial management across the Department. We have been 
successful in implementing these initiatives, including: (1) 
eliminating the three long-standing material weaknesses in our 
financial systems, financial operations and estimation of liabilities, 
(2) reducing the number of significant deficiencies found in our annual 
audit from 16 to one, (3) increasing compliance from 44 percent to over 
95 percent in a $14 billion purchasing program - greatly reducing the 
risk of fraud, waste and abuse, (4) updating all of our financial 
policies and procedures to ensure that our employees know what is 
expected of them in performance of their duties, and (5) providing 
training to over 5,000 financial management employees so that they had 
the knowledge to do their jobs correctly.
    These initiatives were prioritized as we entered each fiscal year 
to determine what was most important to the Department (for example, 
our top financial managementt priority in 2010 was to eliminate the 
three material weaknesses). Once priorities were set, we worked each 
initiative accordingly. Following that same approach, the Department 
entered fiscal year 2013 making our latest, and current, top priority 
for financial management the elimination of improper payments.
    It is important to note at the outset of this discussion that in 
taking measures to eliminate improper payments at VA, we must be 
conscious of the need to ensure we do not cause hardship for our 
Veterans and their families. In some instances, the law governing 
payments takes this balance into account and may even require VA to 
make ``improper'' payments (as counted by current accounting 
guidelines) in order to protect Veterans' interests. A good example is 
our pension program, where we make initial payments to Veterans before 
the income data provided by the Veteran can be verified and, once it is 
verified, we may learn that it was not accurate.
    As a result, there are improper payments that we ``cannot stop'' as 
well as improper payments that we ``can stop.'' The total $2.2 billion 
of improper payments in 2011 includes both of these types of payments. 
For the ``cannot stop'' improper payments, our focus must be on 
utilizing debt collection tools in an attempt to recover the payments. 
For the ``can stop,'' we must eliminate these improper payments up 
front so they never occur. A key component of our plan over the next 
several months is to determine which improper payments are ``cannot 
stop'' and which are ``can stop.'' Only when we know this distinction 
will we be positioned to learn and address the root causes of the 
improper payments we ``can stop.''
    Attached as enclosures are VA's plans for achieving compliance with 
the Improper Payments Elimination and Recovery Act (IPERA), which was 
provided to Congress on August 13, 2012, in accordance with IPERA, and 
OMB Circular A-123 and corrective action plans published in VA's FY 
2012 Performance and Accountability Report.
    For many years, VA has been implementing initiatives to reduce 
improper payments. These initiatives include data matching programs 
with the Social Security Administration and the Internal Revenue 
Service, recovery auditing, and the use of software designed to detect 
improper payments. These efforts have had a positive impact, but 
clearly, we can do more - and we will.

    Question 10: In testimony last Congress VA indicated that both, the 
number of, and costs associated with, conferences would be reduced. 
Please provide information that this has occurred.

    VA Response: In accordance with Office of Management and Budget 
(OMB) Memoranda 11-35, and 12-12, in February 2013, VA reported costs 
of approximately $72.7 million for 127 individual conferences and 
training events which exceeded $100,000, for Fiscal Year 2012. OMB's 
memos define a conference as ``[a] meeting, retreat, seminar, symposium 
or event that involves attendee travel. The term 'conference' also 
applies to training activities that are considered to be conferences 
under 5 CFR 410.404.'' Additionally, in accordance with Public Law 
(P.L.) 112-154, section 707, VA is required to report to Congress on 
``covered conferences'' on a quarterly basis. Under the law's 
definition, a covered conference is ``a conference, meeting, or other 
similar forum that is sponsored or co-sponsored by the Department and 
is-- (1) attended by 50 or more individuals, including one or more 
employees of the Department; or (2) estimated to cost the Department at 
least $20,000.'' VA's First Quarter FY 2013 report to Congress, as 
required by P.L. 112-154, estimated approximately $12 million was spent 
on 93 conference and training events. In the submission, it was noted 
that not all data required for full reporting for that quarter had been 
received and processed. An update to the First Quarter Report reflected 
actual costs to be approximately $9.8 million for those 93 events. The 
First Quarter update will be submitted to Congress with the Second 
Quarter FY 2013 report due on April 30, 2013.

                                 
       Post-Hearing Questions From HVAC Majority and VA Responses
             Questions Submitted by Ranking Member Michaud
    Question 9: I understand that VA has been generally successful in 
addressing the issue of veteran homelessness. According to your budget 
submission, you plan to spend just under $1.4 billion on this 
initiative. I also understand that there is a group of veterans out 
there who are chronically homeless and suffer from co-morbid issues 
such as substance abuse and post-traumatic stress disorder and are the 
most in need of veteran homeless services.

    a. Please provide the Committee with detailed information regarding 
how current programs and initiatives address this population.

    VA Response: The Department of Veterans Affairs (VA) is committed 
to serving chronically homeless Veterans. VA serves chronically 
homeless Veterans who, as defined by McKinney-Vento Act, have been 
continuously homeless for a year or more or who have experienced 4 or 
more episodes of homelessness in the past 3 years. VA focused on 
chronically homeless Veterans through the Housing and Urban Development 
- VA Supportive Housing (HUD-VASH) Program. HUD-VASH is an evidence-
based intervention with a proven ability to get the most chronically 
homeless Veterans off the street, and into stable housing with 
wraparound treatment services to help maintain housing and improve 
their quality of life. With the adoption of Housing First principles, 
discussed more thoroughly below, and the provision of ongoing case 
management services, this program has not only housed some of our most 
chronically homeless Veterans, but it has been able to maintain them in 
recovery, addressing many of the issues that contributed to them 
becoming homeless.
    Since the first expansion of the HUD-VASH Program in fiscal year 
(FY) 2008, VA has recognized the need to prioritize chronically 
homeless Veterans. HUD-VASH Program leadership regularly communicates 
with program field staff about best practices for aiding chronically 
homeless Veterans. VA has partnered with the ``100,000 Homes'' Campaign 
and other community-based organizations to identify and engage 
chronically homeless Veterans in HUD-VASH. HUD-VASH Program leadership 
has provided objective screening and assessment tools to help program 
field staff determine chronic homelessness and vulnerability 
characteristics. VA's focus on targeting the chronically homeless was 
further formalized in the HUD-VASH Program Handbook. VA has also 
emphasized its commitment to targeting the chronically homeless by 
installing a performance measure in FY 2013 that requires a minimum 
threshold of 65 percent of Veterans enrolled in HUD-VASH in FY 2013 to 
be chronically homeless. In the first 2 quarters of FY 2013, 65 percent 
of the admissions to HUD-VASH were chronically homeless Veterans. 
However, based on VA's experience in the field, HUD-VASH also admits 
Veterans who, while having a clear history of long-term chronic 
homelessness do not technically meet the definition of ``chronically 
homeless'' at the time of the assessment. This is usually due to 
incarceration, or other long-term institutional placement. Although not 
represented in VA's data as ``chronically homeless,'' VA continues to 
serve these vulnerable Veterans who have many of the same 
characteristics as the chronically homeless population.
    Beyond the performance measure referenced above, the HUD-VASH 
Program has also embraced a Housing First philosophy and model. Housing 
First is a form of permanent supportive housing that centers on 
providing homeless individuals rapid access to permanent housing and 
then wrapping treatment and other support services around the 
individual to help him/her maintain permanent housing and improve his/
her quality of life. What differentiates a Housing First approach from 
other strategies, such as housing ready or treatment first approaches, 
is that within Housing First, there is an immediate and primary focus 
on helping homeless individuals rapidly access and sustain permanent 
housing. The adoption of Housing First signifies VA's heightened 
commitment to ensuring that Veterans who have experienced chronic 
homelessness are the priority for HUD-VASH services, and that they 
receive the intensive long-term case management supports they need to 
both obtain and sustain permanent housing. Preliminary data from the 
Housing First Initiative, a demonstration sponsored by the VA National 
Center on Homelessness among Veterans in 14 high priority cities, shows 
a 93 percent focus on chronically homeless Veterans. Within these 14 
high priority cities, the Housing First model is rapidly assisting 
chronically homeless Veterans transition from the streets to a home and 
then supporting them with services that assist with health care and 
other community reintegration supports. The Housing First model is 
being fully implemented across VA in support of the goal of ending 
Veteran homelessness in 2015.
    In addition to HUD-VASH, VA has also implemented Homeless Patient 
Aligned Care Teams (H-PACT), comprising a 32-site demonstration 
project. H-PACTs provide comprehensive, wrap-around primary care 
coupled with homeless programming to help Veterans make the transition 
out of homelessness and to help keep them housed. Beginning in January 
2012, the H-PACT initiative created a structure that formally links 
health care to housing status, providing a vehicle for the case 
management and longitudinal care necessary for the Housing First model 
to succeed. During the first 9 months of program operations, Veterans 
enrolled in H-PACTs had over 8,160 primary care visits, 4,100 specialty 
care appointments, and 90 percent of the H-PACT Veterans were actively 
receiving homeless program supports. At H-PACT sites, VA observed a 66 
percent reduction in emergency department use as compared with care 
received prior to enrolling in H-PACT. VA plans to expand the use of H-
PACT in FY 2013, with H-PACTs representing a part of the larger VA 
effort to implement system-wide services focused on rapid access to 
health care and permanent housing.

    b. Have these programs and initiatives been effective in terms of 
this population, and has the VA seen a decrease in the numbers of this 
homeless population as a result of these programs and initiatives?

    VA Response: VA has had considerable success in reducing the number 
of homeless Veterans. Volume I of the 2012 Annual Homeless Assessment 
Report, which reports the Point-In-Time (PIT) estimates of 
homelessness, indicates that on a single night in January 2012, 62,619 
Veterans were homeless in the United States; 56 percent were living in 
emergency shelters or transitional housing, while the remaining were 
living in an unsheltered location. The 2012 PIT estimate is a more than 
7 percent decline from 2011 and a 17 percent decline from 2009. 
Furthermore, VA continues to have success in placing homeless Veterans 
in permanent housing. For example, in FY 2011, VA successfully housed 
26,238 unique Veterans in permanent housing. By FY 2012, this number 
continued to grow, VA housed another 31,493 unique Veterans in 
permanent housing, a substantial increase over VA's efforts the 
previous fiscal year. Similarly, in FY 2011, VA successfully housed 
4,454 unique chronically homeless Veterans in permanent housing. That 
number more than doubled in FY 2012, when VA housed another 9,316 
unique chronically homeless Veterans housed in permanent housing. These 
permanent housing numbers are evidence that VA, and in particular HUD-
VASH, has been effective in reducing chronic homelessness. For example, 
based on VA's experience in the field, many local HUD-VASH sites, 
including New York City, are reporting significant decreases in 
Veterans who meet the chronically homeless criteria. Many HUD-VASH 
sites are reporting difficulties in locating VA-health-care-eligible 
Veterans who meet the Federal definition of ``chronically homeless,'' 
indicating a significant decrease in this population. Furthermore, VA 
continues to target chronically homeless Veterans throughout all of VA 
homeless programs. For example, in FY 2011, 21,175 Veterans throughout 
VA homeless programs were assessed as chronically homeless in the 
Homeless Operations Management and Evaluation System. In FY 2012, the 
number of unique Veterans assessed as chronically homeless rose to 
31,331.

    Question 10: In your FY 2014 budget submission you have proposed 
new savings of $482 million dollars in your medical care accounts, $370 
million from new acquisition savings and $112 million from improved 
operations.

    a. Please provide the Committee with detailed explanations 
regarding these proposed savings, including details on how they will be 
achieved and how VA will determine whether these proposals have been 
successful.

    VA Response: Specific acquisition savings initiatives, estimated at 
a total of $370 million in FY 2014, include:

      Sourcing of Generic Pharmaceuticals - VA Acquisition 
Regulations require the use of Federal Supply Schedule (FSS) contracts 
before VA makes open market purchases. The intent of this requirement 
was to ensure that VA pays the lowest price possible for goods and 
services. In practice, however, the rule has had the opposite effect, 
with many generic drugs available through direct contracts at prices 
well below FSS prices. By exempting pharmaceuticals from this 
requirement, VA will use spot contracts for purchasing generic 
pharmaceuticals to take advantage of periodic price reductions.
      Reverse Auctions - The Government Accountability Office 
(GAO) has approved the use of reverse auctions to increase efficiency 
and enhance competition. By increasing the use of reverse auction 
tools, VA will drive increased price competition into commodities and 
standard service contracts.
      Pharmacy Prime Vendor Discounts - VA has negotiated a new 
5-year contract that includes higher discounts than the previous 
contract.
      Increased use of Medical Surgical Prime Vendor - 
Increased use of this procurement method will generate rebates from the 
distributor, reducing VA cost for these items.
      Strategic Sourcing - Establishment of national contracts 
will introduce improved pricing associated with volume discounts.
      Medical Sharing Agreements - Increased negotiation of 
Sharing Agreement contracts under VA's 38 U.S.C. Sec.  8153 authority 
will result in reduced prices for medical services and support 
contracts.

    Specific improved operations savings initiatives, estimated at a 
total of $112 million in FY 2014, include:

      Employee Travel Reduction (-$50 million) - In support of 
the President's Campaign to Cut Waste, Veterans Health Administration 
(VHA) employee travel will be capped in 2014 at the budgeted level for 
2013.
      Patient-Centered Community Care (-$13 million) - Patient-
Centered Community Care will provide centrally supported health care 
contracts throughout VHA for purchasing Non-VA Medical Care. Savings 
will be achieved by standardizing Non-VA Care processes and rates 
through contractual agreements, replacing more costly individual 
authorizations for purchasing health care services from non-VA sources.
      Corporate Office Reduction (-$24 million) - VA's medical 
program offices located at the VA Central Office in Washington, DC, 
will have their annual recurring budgets, compared to 2013 levels, 
reduced in 2014 to achieve these savings.
      New VISN Structure (-$25 million) - VA's 21 Veteran 
Integrated Service Networks (VISN) are being reorganized around a 
standard staffing structure for each VISN. Each VISN Director has 
authority to customize a portion of the new VISN structure, but the 
majority of the staffing will be standard for each VISN. Total VISN 
staffing will be reduced through this initiative by realigning current 
staff to fill other vacancies within VA.

    b. VA's current estimates for it FY 2013 budget include $200 
million in savings, $150 million from ``Acquisition Proposals'' and $50 
million from ``Travel Campaign to Cut Waste.'' Have these savings been 
realized?

    VA Response: These savings were removed prospectively from the FY 
2013 budget and VHA operated within the reduced budget.

    c. In terms of savings related to ``Acquisition Proposals'' you 
attribute $150 million in FY 2013, and $370 million respectively in FY 
2014 and FY 2015. Please provide detailed information regarding how the 
VA will realize $890 million in savings over these three fiscal years. 
Once these savings have been realized for a specific fiscal year, 
should future savings not realized by additional efforts and 
initiatives be reflected in the VA's base budget and not listed as an 
additional saving?

    VA Response:
Medical Sharing Agreements
    VA has taken steps over the last year to improve the business 
relationship with its affiliate partners through collaborative meetings 
and has launched a strategic plan to formulate partnerships with 
stakeholders and the academic community. The Medical Sharing/Affiliate 
Office (MSO) developed a basic and advance training course for 
healthcare procurements. These courses have a defined curriculum to 
enhance and increase the competencies of contracting officials by 
understanding the complex clinical organization of medical schools and 
their reimbursement models.
    Significant progress has been made in improving and establishing 
formalized professional negotiation teams for high dollar procurements. 
The MSO has direct oversight of these teams to ensure standardized 
methodologies are consistent with regulation and agency policy. Steps 
were included in the procurement to maximize the use of longer term 
contracts to allow VA to take advantage of its buying power while at 
the time meeting its strong commitment to the resident education 
mission defined by statutory authority.
Reverse Auctions
    This cost saving program allows VA buyers to compete commodity 
requirements in an online reverse auction marketplace where multiple 
sellers compete by lowering their prices through online bidding. VA 
will utilize reverse auctions to increase efficiency, enhance 
competition, and realize savings on commodity supply and service 
acquisitions. VA policy that governs first consideration and use of 
reverse auctions for all commodity procurements has already been 
implemented.
    VA reverse auction utilization and savings reporting metrics are in 
place and reviewed on a weekly basis. Day-to-day program support is 
provided through the reverse auction program office. VA training 
courseware has been developed and is delivered to all VA acquisition 
professionals through scheduled online and onsite training sessions. 
The VA reverse auction training program which incorporates VA policy 
and procedures, and provides supplemental job aids, has already been 
conducted for over 2,500 VHA acquisition professionals.
Increased Use of Medical/Surgical Prime Vendor
    It is necessary for VHA to maximize the value of Medical/Surgical 
Prime Vendor (MSPV) contracts. To this end, the MSPV will receive 
considerable focus to ensure that VA medical centers are appropriately 
leveraging this vehicle. The maximization of MSPV will improve the 
quality (e.g. accuracy and compliance) of hospital supply acquisitions 
and will improve logistics/supply chain operations.
    Strategies to enhance use of this contracting strategy include 
reviewing and redefining business processes, defining inventory 
management processes to fully support supply chain operations and 
developing a continuous improvement methodology to incorporate industry 
best practices.
Strategic Sourcing
    Strategic sourcing will advance standardization of major health 
care services, technology, and supplies. This will occur through a 
partnership between VHA Chief Business Office, VHA Healthcare 
Technology Management, VHA Logistics and the VA Strategic Acquisition 
Center and will focus on the following activities:

      Sourcing of Non-VA Care: VHA will award a national 
contract to introduce standard pricing, quality and information 
sharing. A Request for Proposals was issued in December, 2012, with 
industry submitting proposals in March 2013 and VHA evaluation 
occurring in March and April.
      Standardization of High Cost High Tech Medical Equipment: 
VHA will award national or regional contracts for the acquisition of 
surgery, telemetry and imaging technologies. Multiple procurement 
packages to improve pricing associated with volume discounts are 
underway.
      Standardization of hospital supply and improved supply 
chain management: VHA will maximize use of the MSPV contract as 
described above.

    d. Please explain the $257 million dollars of clinical and 
pharmaceutical savings that are embedded in the actuarial model used to 
project VA health care requirements.

    VHA Response: VA is continually striving to improve the quality and 
efficiency of the VA health care system. The VA Enrollee Health Care 
Projection Model includes assumptions that VA's level of health care 
management will continue to improve over the 20-year projection period. 
Future improvements will result from a wide range of activities that 
collectively improve VA's level of management in medical and pharmacy 
services, including:

      Improved coordination of care from activities that result 
in reductions in hospitalizations for ambulatory care sensitive 
conditions (i.e., Patient Aligned Care Team (PACT), home Telehealth 
expansion, and improved disease management);
      A focus on creating alternative services, such as 
intensive outpatient mental health programs, support services, and 
alternative locations of care; and
      VHA's inpatient systems redesign initiatives, including 
admission appropriateness and continued stay reviews.

    Question 11: In your budget submission you estimate that VA will 
spend $258 million in 2014 on new models of care such as the patient 
centered medical home model. Over the last four years VA has put the 
structure in place to bring the initiatives to fruition. Some of the 
outcomes VA would like to achieve in the next 7 to 10 years include 
improved patient satisfaction, access, and efficiency.

    a. What is the strategic plan VA has in place to assess the 
outcomes of this major initiative that, by your own admission, will 
take close to a decade to achieve?

    VA Response: An integral part of the New Models of Care Initiative 
has been an ongoing evaluation. From the outset, a team of analysts in 
the VHA Office of Analytics and Business Intelligence, Office of 
Informatics and Analytics (OIA) has worked closely with the Offices of 
Primary Care and Primary Care Operations to construct a comprehensive 
database related to this initiative, concentrating on the largest 
component, Patient-Aligned Care Teams (PACT). This database is housed 
within VA's Corporate Data Warehouse and contains extensive information 
on all patients who are enrolled in primary care. To date, this 
evaluation has yielded a broad-range of highly relevant results 
including clinical outcomes, patient experience (satisfaction), access, 
continuity, coordination, team function, provider attitudes.
    To accurately assess satisfaction, VA revised its ongoing Survey of 
Health Experiences of Patients (SHEP) to include a module that was 
recently developed by the National Center for Quality Assurance (NCQA) 
to assess Patient-Centered Medical Homes. To measure access, the 
evaluation team has gathered information not only about availability of 
face-to-face appointments but also access by telephone, telehealth and 
secure messaging. In terms of efficiency, a team of health economists 
has performed a detailed analysis to estimate the return-on-investment 
(ROI) of the PACT and overall New Models of Care initiatives. This 
analysis has provided estimates of ROI during the first two years of 
these initiatives as well as projections through 2019. Results of these 
analyses have been reported on a quarterly basis to the PACT steering 
committee and regularly to the VHA Office of the Undersecretary for 
Health.
    In addition to the national evaluation, VA has created five PACT 
Demonstration Laboratories that have conducted detailed local 
assessments of various aspects of PACT. The Demonstration Labs work 
with local clinical leadership and primary care teams to monitor and 
evaluate PACT implementation and are actively engaged in collection of 
qualitative and quantitative evaluation data from VA staff and 
administrative data sources.
    Examples of the assessments that have recently been completed 
include: formative and outcomes evaluations of PACT implementation, 
including training opportunities, team development and organizational 
process; staff, patient and caregiver experiences of PACT; assessment 
of PACT implementation at academic medical centers and rural CBOCs; and 
dual use of VA and non-VA services. Arguably, the prospective 
evaluation of the New Models of Care Initiative that has been 
undertaken by VA is more extensive and ambitious than that for any new 
delivery system implemented by a health care system.

    b. The budget also references improving access by adopting various 
eHealth technologies. Can you provide some examples of what those might 
be and is the cost for those various technologies part of the $258 
million?

    VA Response: Under the New Models of Care Transformation Initiative 
in VA, $65.2 million is budgeted to sustain and further develop 
telehealth. This includes the following areas of telehealth:

      Home Telehealth
      Clinical Video Telehealth between VA Medical Centers and 
CBOCs
      Telemental Health
      Teleaudiology
      Teledermatology
      Teleretinal Imaging
      Telepathology

    Question 12: Providing effective, timely, and quality mental health 
care is a challenge that faces not just the VA but the nation as a 
whole. We know that provider shortages, nationally, affect VA's ability 
in some areas to provide timely mental health care. I think we can all 
agree that VA cannot do it alone. VA projects to spend $7 billion 
dollars on mental health programs in fiscal year 2014.

    a. Please provide the Committee with information regarding VA's 
efforts to work with other Federal agencies, States, and communities to 
address this issue in a strategic way nationally.

    VA Response: Facilities and VISNs have held long-standing 
agreements with community agencies to improve access to care in areas 
with shortages. For example, in Montana, part or all of 54 of the 
state's 56 counties are designated mental health care shortage areas 
per the Department of Health and Human Services regulations. Montana 
has the second-highest Veteran per capita population. The availability 
of mental health providers, a geographically large area, and population 
dispersion are factors that pose challenges for Montana's Veterans in 
need of mental health services.
    VA mental health care in Montana is based on a wide ranging 
strategy to build ways to provide care and enhance engagement with the 
public agencies in the state.
    Montana is divided into four regions for non-VA community mental 
health services: the Eastern Montana Community Mental Health Centers 
(EMCMHC), the South Central Regional Mental Health Centers (SCRMHC), 
the Centers for Mental Health (CMH), and the Western Montana Mental 
Health Centers (WMMHC). Each region consists of a regional mental 
health center and several satellite offices.
    VA Montana Health Care System contracted with SCRMHS in 2001 to 
provide mental health care to Veterans at their various satellites/
clinics. In 2003, VAMTHS contracted with WMMHC and CMH for mental 
health services, and the EMCMHC clinical sites were sub-contracted 
under the SCRMHC contract.
    Under these contracts, Veterans are seen by mental health providers 
at 45 sites including 11 EMCMHS sites, 11 CMH sites, 8 SCRMH sites, and 
14 WMMHC sites. Patients access contract care through the Ft. Harrison 
VA Medical Center Access to Care Unit. If the patient has not been seen 
within 24 hours by a VA mental health professional, a telephone 
assessment will be conducted within 24 hours. An assigned provider 
completes the telephone assessment and a written note is sent to Access 
to Care Unit clinicians, who then set up a referral to an appropriate 
contract provider nearest to the patient. The choice of contract 
provider depends on the type of clinical services required.
    At a national level, VA is using the experience of facilities like 
Montana to develop a national model. In response to the Executive 
Order, ``Improving Access to Mental Health Services for Veterans, 
Service Members, and Military Families,'' from August 31, 2012, VA is 
working with the Department of Health and Human Services (HHS) to 
establish pilot projects whereby VA contracts or develops formal 
arrangements with community based providers, such as community mental 
health clinics, community health centers, substance abuse treatment 
facilities, and rural health clinics, to test the effectiveness of 
community partnerships in helping to meet the mental health needs of 
Veterans in a timely way. HHS has been consulted and is providing 
information on a list of HHS certified community healthcare providers. 
HHS has also provided informational points of contact.
    VA has established initial pilot projects through formal 
arrangements with 15 community-based mental health and substance abuse 
providers across 7 states and 4 VISNs. VA expects to add additional 
pilots in the future. The current 15 pilots have been established 
across Georgia, Tennessee, Wisconsin, Mississippi, South Dakota, 
Nebraska, and Iowa. By the end of May, the program expects to expand to 
include additional partnerships in the Pacific Northwest, Coastal 
Texas, and Indiana, as well as additional counties in Mississippi, and 
Georgia. Pilot programs are varied and may include provisions for 
inpatient, residential, and outpatient mental health and substance 
abuse services. VA has developed interagency agreements with the Indian 
Health Service (IHS) to allow Veterans to use IHS facilities, and VA is 
exploring other forms of partnership, as well including the recruitment 
and sharing of providers with community agencies.

    Question 13: It is estimated that medical inflation is currently 
running at an annual rate of 3.7 percent. This would seem to indicate, 
looking ahead, an approximate $2 billion increase for medical care 
accounts for 2015, $1 billion more than VA have requested.

    a. Is VA assuming a drastically lower rate of medical inflation or 
are there programmatic changes that you expect to undertake in order to 
provide the same level of medical care in 2015 that you are providing 
today?

    VA Response: VA's Enrollee Health Care Projection Model (EHCPM) 
assumes inflation trends of 2.3 perent in FY 2013; 2.6 percent in FY 
2014; and 2.3 percent in FY 2015. These inflation trends reflect the 
following assumptions:

    1) Reflects the Civilian Wage Policy iassumption of 1 percent in 
Calendar Year (CY) 2014. For purposes of the FY 2015 advance 
appropriations request, VA also assumes 1 percent in CY 2015;

    2) Non-Personnel inflation (excluding pharmacy and prosthetics) is 
estimated using Medicare market basket inflation trends weighted by VA 
obligations; and

    3) Excludes non-modeled services: State nursing home, domiciliary 
programs, readjustment counseling, foreign medical, and spina bifida.

    Reference page 1A-6 of Department of Veterans Affairs, Volume II, 
Medical Programs & Information Technology Programs, Congressional 
Submission, FY 2014 Funding and FY 2015 Advance Appropriations Request:
    VA's budget development process under the Veterans Health Care 
Budget Reform and Transparency Act of 2009 (P.L. 111-81) requires VA to 
submit its medical care budget for 2 years in each budget submission. 
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 85 
percent of its medical program using a sophisticated actuarial model 
that estimates the health care services requirements for enrolled 
Veterans. Each year, VA updates the model estimates to incorporate the 
most recent data on health care utilization rates, actual program 
experience, and other factors, such as economic trends in unemployment 
and inflation.
    By updating the model's inputs and revisiting the assumptions that 
underlie the actuarial projections each year, VA is able to produce 
budget estimates that more accurately reflect the projected medical 
demands of enrolled Veterans.
    VA's approach to advance appropriations for Medical Care is to 
provide essential funding to ensure continuity of health care services 
for Veterans in the event of budget delays. In 2014, funding shown for 
initiatives reflects the total estimated costs of these programs. The 
2015 advance appropriations request will be revisited during the 2015 
budget process. At that time, any necessary adjustments will be made 
based on updated data and workload requirements.
           Questions Submitted by Congresswoman Corrine Brown
    Question 2: In the fall of 2012, Congress passed HR 1627, which 
became P.L. 112-154. Section 111 of the law directed the VA to develop 
a plan for recovery and collection of amounts for Department of 
Veterans Affairs Medical Care Collections Fund. Congress approved this 
language so that the VA would develop and implement a better process 
and system of controls to ensure accurate and full collections by the 
VA health care system.

    a. Please provide details on the plan and the VA's efforts to 
implement its provisions.

    VA Response: P.L. 112-154, Section 111 requires VA to develop and 
implement a plan no later than 270 days after the date of enactment to 
ensure recovery and collection from Veterans' health insurance for 
medical care and services provided through VA's Fee Basis authorities. 
VA has completed all actions associated with the requirements of 
Section 111 as described below:

      Improved identification of billable fee claims: The VHA 
Chief Business Office chartered a workgroup to re-engineer business 
processes that support maximizing the cost recovery of billable fee 
services. The team developed and implemented new Standard Operating 
Procedures for billing and pre-certification processes of applicable 
fee claims.
      Training: Training on the identification of billable fee 
claims has been provided to applicable fee and revenue operations staff 
within a number of different functional areas. Staff received both 
written guidebooks and fact sheets to help them improve the 
identification of billable fee opportunities.
      Fee Revenue Goals: Beginning in FY 2012, VHA established 
station-level third party collection goals for fee care utilizing an 
Integrated Collections Forecasting Model.
      Monitors: To better track fee performance related to 
collections, VHA deployed four new performance metrics to be monitored 
beginning in FY 2012. These metrics are monitored on a monthly basis.

    Policies and Procedures for Medical Care Collections Fund (MCCF) 
Recovery: Deployment of seven industry best Consolidated Patient 
Account Centers (CPACs) is the cornerstone of ensuring long term 
success in MCCF Recovery. These CPACs, which were fully deployed in FY 
2012, operate based on standardized processes and procedures utilizing 
intensive employee training to ensure maximum accountability.

    Question 3: The issue of third party payers and the Veterans Health 
Administration's Medical Care Collections Fund has been the subject of 
a number of government reports over the years. To help better 
understand this issue, please provide the following data:

    a. Total amount the VA sought in third party billings for each of 
the past 6 years.

    VA Response:


------------------------------------------------------------------------
            Fiscal  Year                 Total Third Party  Billings
------------------------------------------------------------------------
2007...............................                      $3,325,052,175
------------------------------------------------------------------------
2008...............................                      $4,107,259,321
------------------------------------------------------------------------
2009...............................                      $5,290,964,587
------------------------------------------------------------------------
2010...............................                      $5,490,122,279
------------------------------------------------------------------------
2011...............................                      $5,775,314,495
------------------------------------------------------------------------
2012...............................                      $5,556,546,698
------------------------------------------------------------------------

    b. The percentage increase in billings for each year compared to 
the previous year's billing.

    VA Response:


----------------------------------------------------------------------------------------------------------------
                                                                                                  Percent (%)
                      Fiscal  Year                           Total Third Party  Billings       Change from Prior
                                                                                                  Fiscal Year
----------------------------------------------------------------------------------------------------------------
2007...................................................                      $3,325,052,175                   -
----------------------------------------------------------------------------------------------------------------
2008...................................................                      $4,107,259,321              23.52%
----------------------------------------------------------------------------------------------------------------
2009...................................................                      $5,290,964,587              28.82%
----------------------------------------------------------------------------------------------------------------
2010...................................................                      $5,490,122,279               3.76%
----------------------------------------------------------------------------------------------------------------
2011...................................................                      $5,775,314,495               5.19%
----------------------------------------------------------------------------------------------------------------
2012...................................................                      $5,556,546,698              -3.79%
----------------------------------------------------------------------------------------------------------------

    c. The percentage of collections for each year for the past 6 
years.

    VA Response:


------------------------------------------------------------------------
                                                    Percent of Total
                 Fiscal  Year                          Collections
------------------------------------------------------------------------
2007..........................................                    46.9%
------------------------------------------------------------------------
2008..........................................                    43.7%
------------------------------------------------------------------------
2009..........................................                    41.1%
------------------------------------------------------------------------
2010..........................................                    39.3%
------------------------------------------------------------------------
2011..........................................                    35.7%
------------------------------------------------------------------------
2012..........................................                    36.2%
------------------------------------------------------------------------

    d. The collection rate for claims over $1500 for each of the past 6 
years.

    VA Response:


------------------------------------------------------------------------
                                                   Collection rate for
                 Fiscal  Year                       Claims over $1500
------------------------------------------------------------------------
2007..........................................                    46.3%
------------------------------------------------------------------------
2008..........................................                    43.1%
------------------------------------------------------------------------
2009..........................................                    40.6%
------------------------------------------------------------------------
2010..........................................                    38.8%
------------------------------------------------------------------------
2011..........................................                    35.2%
------------------------------------------------------------------------
2012..........................................                    36.0%
------------------------------------------------------------------------

    e. The collection rate for claims under $1500 for each of the past 
6 years.

    VA Response:


------------------------------------------------------------------------
                                                   Collection rate for
                 Fiscal  Year                      Claims under $1500
------------------------------------------------------------------------
2007..........................................                    47.8%
------------------------------------------------------------------------
2008..........................................                    44.6%
------------------------------------------------------------------------
2009..........................................                    41.9%
------------------------------------------------------------------------
2010..........................................                    40.1%
------------------------------------------------------------------------
2011..........................................                    36.3%
------------------------------------------------------------------------
2012..........................................                    36.4%
------------------------------------------------------------------------

          Questions Submitted by Congresswoman Negrete McLeod
    Question 1: Homelessness among veterans is a serious problem in my 
district in California. How many housing vouchers through the HUD-VASH 
program do you anticipate will be funded by your requested amount of 
$278 million?

    VA Response: The HUD-VASH Program has been funded by Congress 
through special appropriations for this program. Congress has provided 
funding to the Department of Housing and Urban Development (HUD) to 
provide section 8 Housing Choice Vouchers and provided funding to VA 
for supportive wrap around case management services to the Veterans 
housed in HUD-VASH units. VA does not provide HUD-VASH vouchers; 
rather, VA solely provides the necessary case management services 
associated with these vouchers.
    VA has requested $278 million to cover the cost of all HUD-VASH 
Program staff in FY 2014. VA's specific purpose funding request will be 
used to hire multidisciplinary case management teams to provide the 
supportive wrap-around case-management and other services necessary to 
assist these homeless Veterans in searching for appropriate permanent 
housing, connecting to treatment and other supportive services, and 
achieving and maintaining stability in their recovery. Increased 
funding in each fiscal year is used to sustain existing staff and hire 
new program staff. To further expand the HUD-VASH Program, HUD is 
requesting an additional $75 million to fund approximately 10,000 
vouchers in FY 2014. VA's budget request of $278 million will provide 
services to Veterans utilizing these additional 10,000 along with all 
previously appropriated HUD-VASH vouchers; VA expects there will be a 
total of approximately 68,000 HUD-VASH vouchers in FY 2014. Presently, 
HUD has 48,335 vouchers allocated to Public Housing Authorities to 
administer the vouchers. Although HUD is still finalizing the FY 2013 
allocation of HUD-VASH vouchers, HUD's FY 2013 appropriation will bring 
the total to approximately 58,335 vouchers by the end of FY 2013.
    VA recognizes that the State of California continues to have the 
highest percentage of homeless Veterans in the nation, and in the past, 
vouchers have been disbursed accordingly. In FY 2008 through FY 2012, 
California received almost 17 percent of the allocated HUD-VASH 
vouchers for the entire country. This is the largest percentage of 
vouchers allocated to any one state. The VA Greater Los Angeles (GLA) 
Health Care System was allocated 3,320 vouchers in FY 2008 through FY 
2012, to be used for the homeless Veteran population in Los Angeles and 
adjoining communities. In FY 2012 alone, 950 HUD-VASH vouchers were 
allocated for GLA. The Loma Linda VA Medical Center (VAMC), which 
includes the San Bernardino area, received 440 vouchers from FY 2008 
through FY 2012; in FY 2012 alone, Loma Linda VAMC received 175 
vouchers. Vouchers in FY 2013 will be allocated based on relative need. 
Presently, HUD is working on finalizing the voucher allocations and 
expects that notification for the FY 2013 HUD-VASH vouchers will occur 
in late May or early June 2013.

    Question 2: In order to receive payment from VA, mental health 
providers are often required to have a COAMFTE certification. This is 
not available in most California universities, resulting in 95% of 
licensed therapists not qualifying to receive payment. These therapists 
are 100% qualified to treat Veterans. What can VA do to work with 
California therapists to ensure access to mental health care despite 
this bureaucratic barrier?

    VA Response: The Commission on Accreditation for Marriage and 
Family Therapy Education (COAMFTE) certification requirement is a 
hiring requirement only for the occupational series of Licensed 
Marriage and Family Therapists (LMFT). While VA is increasing the 
number of LMFTs hired, this profession currently represents a small 
minority of VA mental health professionals. The requirement is 
important as it allows VA to be assured of the quality of the 
educational program at the university, as attested to by subject matter 
experts within the LMFT community. This type of educational requirement 
is found in all VA occupational series to ensure that VA is hiring only 
the most qualified healthcare professionals to provide care to Veterans 
within VA.

    Question 3: As you mentioned in your testimony, the number of women 
Veterans enrolled in VA healthcare has increased by 22% since 2009. 
What is VA's timeline for increasing the number of facilities that have 
comprehensive women's clinics beyond the current 50%?

    VA Response: In the past 5 years, VA has enhanced provision of care 
to women Veterans by focusing on the goal of developing Designated 
Women's Health Providers (DWHP) at every site where women access VA. By 
April 30, 2013, VA had trained over 1,500 women's health providers, and 
by the end of FY 2012, VA had at least one DWHP at all of VA's 
Healthcare Systems. In addition, 84 percent of community-based 
outpatient clinics (CBOC) had a DWHP in place. VA is in the process of 
training additional providers to ensure that every woman Veteran has 
the opportunity to receive her primary care from a DWHP.
    For each site of care, the local community of Veterans must have 
input into how care will be delivered. We have found that for some 
women Veterans, separate clinic space is very important, however, for 
other women such clinics are seen as not ideal because they are being 
isolated from other Veterans. In accordance with VHA Handbook 1330.01, 
``Health Care Services for Women Veterans,'' (2010) a VHA facility may 
choose one or more of the following Comprehensive Primary Care Clinic 
Models to best meet the needs of women Veterans and to achieve the 
standards for Comprehensive Primary Care for Women Veterans:

    ``a. Model 1. General Primary Care Clinics. Comprehensive primary 
care for the women Veteran is delivered by a designated Women's Health 
Primary Care Provider (WH PCP) who is interested and proficient in 
women's health. Women Veterans are incorporated into the WH PCP panel 
and seen within a general gender-neutral Primary Care clinic. Mental 
health services for women should be co-located in the general gender-
neutral Primary Care Clinic in accordance with the Primary Care-Mental 
Health Integration. Efficient referral to specialty gynecology service 
must be available either on-site or through fee-basis, contractual or 
sharing agreements, or referral to other VA facilities within a 
reasonable traveling distance (less than 50 miles).

    b. Model 2. Separate but Shared Space. Comprehensive primary care 
services for women Veterans are offered by designated WH PCP(s) in a 
separate but shared space that may be located within or adjacent to 
Primary Care clinic areas. Gynecological care and mental health 
services should be co-located in this space and readily available.

    c. Model 3. Women's Health Center. VHA facilities with larger women 
Veterans populations are encouraged to create Women's Health Centers 
(WHC) that provide the highest level of coordinated, high quality 
comprehensive care to women Veterans.

    (1) WHC offers comprehensive primary care services by a designated 
WH PCP(s) in an exclusive separate space. Whenever possible, a WHC 
needs to have a separate entrance into the clinical area and a separate 
waiting room with attention to privacy, sensitivity and physical 
comfort.

    (2) Specialty gynecological care, mental health and social work 
services must be co-located in this space.

    (3) Other sub-specialty services such as breast care, 
endocrinology, rheumatology, neurology, cardiology, nutrition, etc., 
may also be provided in the same physical location.

    (4) Women Veterans receiving comprehensive primary care through 
general primary care clinics in sites with WHC need to be referred to 
the WHC for gynecological care, mental health treatment, and other sub-
specialty care.''

    To summarize, Model 3 clinics are Comprehensive Women's Centers 
that have dedicated separate space, Model 2 are women's clinics that 
also have a separate space, but the space may be shared with other 
services when the women's clinic is not in session. Model 1 clinics 
provide women's health primary care in integrated settings. All three 
models should have DWHPs and can be available at either medical centers 
or CBOCs. Accordingly, all Model 2 and Model 3 are defined as ``women's 
clinics.''
Number of Women's Clinics
    Within VA's 140 Healthcare Systems, 150 Medical Centers and 795 
CBOCs provide Primary Care Services for Women Veterans. According to 
the FY 2012 Women's Assessment Tool for Comprehensive Health survey, 
VHA reported:

    Total Model 1 = 783 clinics
    Total Model 2 = 101 clinics
    Total Model 3 = 79 clinics

                                 
       Post-Hearing Questions From HVAC Minority and VA Responses
                         Ranking Member Michaud
    4. Continued investment in technology is a big component of VA's 
strategy to expand access to benefits and services, eliminate the 
claims backlog, and end veteran homelessness, the top three priorities 
of the VA. You have requested nearly an 11 percent increase.

    a. Can you point to specific programs and initiatives that support 
your top three priorities that you will be able to undertake with this 
increase?

    VA Response: VA's information technology (IT) development budget 
includes significant investments in meeting the agency's priority goals 
of expanding access to benefits and services, eliminating the claims 
backlog, and ending Veteran homelessness, including:

      $150 million to support elimination of the backlog 
(Veterans Benefits Management. System, Veterans Relationship 
Management, legacy systems)
      $250 million to support integrated Electronic Health 
Record development.
      Expanded healthcare, benefits and services for our 
Nation's Veterans.

      I  New Models of Care and Healthcare Access = $36.2 million.
      I  Veterans Relationship Management = $120.1 million.
      I  Virtual Lifetime Electronic Record = $11.3 million.
      I  Affordable Care Act = $3.4 million.

      Continued work on Virtual Lifetime Electronic Record.
      Finishing our work on the other Transformational 
Initiatives such as GI Bill automation enhancements.
      Improving efficiency and effectiveness of operations and 
maintenance of existing systems and infrastructure.
      International Statistical Classification of Diseases and 
Related Health Problems, revision 10 (ICD-10).

    The increase in VA's IT budget also supports sustainment of ongoing 
efforts to meet its priority goals. Some of these IT sustainment costs 
include:

      Providing the IT equipment and solutions needed for new 
users given the full time equivalent (FTE) growth throughout the 
Department;
      As new applications supporting agency goals are added to 
the infrastructure, they must be supported and maintained;
      New facilities have been activated; once activated, those 
facilities require continued IT dollars to sustain the equipment suite;
      Telecom cost increases driven by telework, telehealth, 
telemedicine applications; and
      Increases in telecom use generally by the VA user 
community.

    b. Please provide the Committee with any strategic plan that is in 
place that directly correlates your IT systems and software with your 
three stated priorities, including proposed lifespan of these systems 
and software and identified necessary investments in the next five 
fiscal years.

    VA Response: As part of VA strategic planning process, VA is 
working on a revised strategic plan, which includes IT. VA will provide 
the completed plan to the committee upon publication.

    5. A large component of your IT budget, $2.2 billion, is for 
``sustainment.'' This includes spending on legacy systems.

    a. Do you have a long-term strategy to reduce your expenditures on 
legacy systems? What are the short and medium term steps in this plan?

    VA Response: VA is committed to ensuring that it gets the best 
possible return on its IT investment for Veterans and taxpayers. VA has 
aggressively addressed rising sustainment costs in order to ensure 
every IT dollar at VA is well spent.
    VA has been working to develop and pursue approaches to reducing 
spending on IT systems, services, and processes that may be 
inefficient, redundant, or overpriced, specifically through its 
Ruthless Reduction Task Force. These efforts are focused on both new 
and legacy systems. VA is continuously soliciting ideas and 
recommendations, following up with research and analysis, and 
initiating reduction projects as warranted. Each approved project will 
be assigned a budget, a project manager or managers, target dates, and 
cost avoidance targets.
    VA has identified many areas where potential savings may exist, 
including data consolidation (with no impact to patient care) and data 
reuse, retiring expensive legacy systems, and reducing duplicative 
system processes. Not only will these efforts allow VA to better spend 
critical IT dollars, they should introduce better business value by 
increasing system response times. Other sustainment divestment plans 
include consolidating data warehouses, controlling the number of mobile 
devices assigned, moving to multifunction printing devices instead of 
desktop printers, and eliminating dedicated fax lines.

    b. Is VA's spending on legacy systems in line with other Federal 
agencies and the private sector?

    VA Response: The private sector and public sector are very 
different in terms of financial management, budgeting, and financial 
tracking. While the private sector is concerned with revenue and 
expenditures, public sector leaders focus on appropriations and 
obligations, making it difficult to match performance to expenditure. 
The lack of information technology cost data makes it difficult to 
compare legacy IT costs to the private sector.
    However, this is why VA instituted the Project Management 
Accountability System (PMAS). PMAS allows VA to focus its resources in 
a way that can be accurately and objectively measured (time and 
functionality) versus those that cannot (cost and progress). Today, VA 
has 256 active development projects, tracked in real-time through a 
dashboard. PMAS principles enforce fiscal discipline by limiting 
software deliveries to six months or less, detecting and stopping 
wasteful programs early in their lifecycle. Since PMAS was required for 
all IT projects in 2010, VA has delivered 83 percent of projects on 
time, and a total of 98 percent of all IT projects ultimately deliver 
on their requirements, compared to the industry rate of approximately 
42 percent.

    6. Your information technology budget for FY 2014 projects $252 
million, or 51 percent of the development budget request of $495 
million, to fund the Interagency Program Office (IPO), which will 
manage the integrated Electronic Health Record (iEHR) and the Virtual 
Lifetime Electronic Record (VLER). Given the problems with the 
management of the IPO that were examined in a recent hearing, what 
substantive changes have been made to the structure of the IPO that 
will improve its performance and what are the measurable outcomes you 
expect to achieve with this $252 million dollar expenditure?

    VA Response: VA's $252 million request is for iEHR. VA is working 
with DoD and the IPO to implement the spending and project management 
approaches at the IPO that we have at the VA. This includes managing 
iEHR deliverables under the VA's Project Management Accountability 
System (PMAS), including the key PMAS principles of incremental 
delivery and ``3 strikes'' for projects. By using an incremental focus, 
VA delivers software and feature enhancements with direct value to the 
customer every six months or less. The 3 strikes rule mandates that any 
project missing three delivery dates will be stopped for review, after 
which the project will either be refactored with a new project team or 
canceled. Moreover, many projects are reviewed and restructured or 
canceled before reaching a third strike. At VA, these changes have 
allowed us to meet an on-time delivery rate of over 83 percent, and all 
projects ultimately meet their delivery requirements 98 percent of the 
time. We are working with the IPO to require incremental delivery for 
iEHR projects. VA hopes that instituting these changes at IPO will help 
better position IPO to meet its critical iEHR delivery dates.
                           Rep. Corrine Brown
    1. In FY13, there was a line item for 508 compliance of $9.43 
million. However, there is no line item in the FY14 budget for 508 
compliance, specifically 508 compliance to IT systems. What staffing 
resources and line item funding will be available for FY14? Please 
explain.

    VA Response: Previously, VA's Section 508 IT compliance efforts 
were divided between the ``Section 508 Program Office'' within the 
Office of Information and Technology (OIT), and the ``Health 508 
Office'' in the Veterans Health Administration (VHA). In FY 2014, all 
508 efforts will be centralized within OIT.
    In FY 2014, the combined government IT staff for both offices will 
be 11 FTE. The FY 2014 President's Budget has $37.265 million 
identified for ``Product Development Tools Management Competency.'' 
This line item includes funding for Product Development IT's ``Product 
Assessment Competency Division'' of which $11,871,309 is for VA's 508 
program.''
    Funding will cover:

      Contracted resources to support the development and 
execution of Section 508-related training for developers, testers and 
non-technical staff.
      Testing support services to: (1) bring new software into 
compliance with Section 508 requirements, and (2) audit existing 
Section 508-compliant software to ensure that it remains compliant.
      Maintenance of hardware and software that is used to test 
IT systems for Section 508 compliance.
      Development of an enterprise-wide approach to bring all 
VA SharePoint repositories into compliance with Section 508 
requirements.

                                 
 Additional Post-Hearing Questions From HVAC Minority and VA Responses
             Questions Submitted by Ranking Member Michaud
    1. We have received numerous complaints that the performance and 
adjudication of pension claims for the veterans of Maine has gotten 
worse since the consolidation of pension claims at the Philadelphia VA 
Regional Office.

    a. Please provide the Committee with the reasons for this shift 
from a high performing Regional Office such as Togus to Philadelphia.

    VBA Response: In fiscal year (FY) 2003, the Veterans Benefits 
Administration (VBA) completed the consolidation of pension maintenance 
work to three regionally-aligned Pension Management Centers (PMCs) in 
Philadelphia, Pennsylvania; St. Paul, Minnesota; and Milwaukee, 
Wisconsin. VBA consolidated pension, dependency and indemnity 
compensation, and burial benefit claims at the PMCs in FY 2009. The 
consolidation provides greater processing efficiency and focuses 
attention and resources on the needs of survivors and wartime Veterans 
who require supplemental income.
    In addition to providing dedicated resources for survivors and 
certain wartime Veterans, consolidation of claims at the PMCs included 
the development of new performance measures that increased transparency 
and accountability and improved program oversight.
    The success of consolidation can be seen in the quality of our 
pension claim adjudications. The accuracy rate for pension entitlement 
decisions improved from 87% to 96.8% from FY 2008 to the end of March 
2013, while the accuracy of pension maintenance work improved from 93% 
to 97.6% over the same period.

    b. Please provide the Committee with the average days to complete 
these claims at the Togus VA Regional Office for the three years prior 
to shifting this workload to the Philadelphia. In addition, since the 
shift in workload, please provide the information relating to 
timeliness and quality metrics of the Philadelphia VA Regional Office.

    VBA Response: The chart below shows the average days to complete 
(ADC) for original Veterans pension claims at the Togus RO prior to 
consolidation in 2008.


----------------------------------------------------------------------------------------------------------------
                                             FY 2005                   FY 2006                   FY 2007
----------------------------------------------------------------------------------------------------------------
Original Pension - ADC............                     85.2                      74.4                      79.1
----------------------------------------------------------------------------------------------------------------

    The chart below shows the quality and ADC for original Veterans 
pension claims at the Philadelphia PMC after consolidation in 2008. The 
ADC for pension claims increased at the Philadelphia PMC due to the 
increased workload following consolidation. Quality at the Philadelphia 
RO for pension claims has been historically high following 
consolidation. Quality data for FY 2008 and 2009 is unavailable.


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                              FYTD 2013
                                                                         FY 2008       FY 2009       FY 2010       FY 2011       FY 2012      (through
                                                                                                                                              March 31)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Original  Pension.....................................           ADC         63.4          85.1         129.0         115.1         102.1         127.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Original  Pension.....................................      Quality             -             -         93.4%         96.8%         94.6%         93.6%
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The ADC for all types of compensation and pension claims has 
increased nationwide over this period due to the dramatic growth in the 
volume of incoming claims. For comparison purposes, similar increases 
in ADC can be seen at the Togus RO in processing compensation rating 
claims, as shown below:


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                              FYTD 2013
                                                                         FY 2008       FY 2009       FY 2010       FY 2011       FY 2012      (through
                                                                                                                                              March 31)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rating  Workload......................................           ADC        145.1         140.4         142.2         203.7         200.0         127.3
--------------------------------------------------------------------------------------------------------------------------------------------------------

    c. Has there been any consideration to shifting this workload back 
to high performing regional offices such as Togus?
    VBA Response: There are no plans to decentralize the PMC workload, 
VBA continuously looks for ways to create additional efficiencies, such 
as the recent elimination of pension eligibility verification reports 
and improved data exchange agreements with the Internal Revenue Service 
and Social Security Administration.

    2. It has come to the Committee's attention that the VA is planning 
to shift additional FTE back to some of the worst performing VA 
Regional Offices. Many of the worst VA Regional Offices are in high 
cost-of-living areas where it is difficult for VA to recruit and, most 
importantly, retain employees.

    a. In light of VA's plan to move to an electronic processing 
system, where claims could be processed at any station in the country 
simultaneously, what are reasons for providing additional FTE to these 
lower-performing stations instead of moving workload to higher-
performing stations?

    VBA Response: The Veterans Benefits Management System (VBMS) is a 
web-based, electronic claims processing solution, complemented by 
improved business processes, that serves as the technology platform for 
quicker, more accurate claims processing. As of May 24, 2013, 51 
regional offices (ROs) and our Appeals Management Center have fielded 
this capability. The remaining ROs will field VBMS by the end of June 
2013. As VBMS is deployed, all new incoming claims are being 
established and processed using the new system, which will gradually 
eliminate paper processing of claims.
    VBMS allows VBA to seamlessly manage and route workload throughout 
the nation, with no cost associated with moving and shipping paper. 
Although VA is moving from paper-based processing into an electronic 
environment, ROs are still processing pending workload previously 
established in our legacy systems using paper.
    VBA provided additional FTE to specific lower-performing ROs to 
help reduce their backlog and increase production.

    b. Has the VA considered reviewing where it will be able to recruit 
the most talented workforce and considered expanding at those locations 
for the best return on investment?

    VBA Response: As we transition into an electronic environment, VBA 
will be able to assign the workload without regard to the location of 
the Veteran's residence. VBA will also be able to expand its telework 
capacity. As VBA continues to expand in a virtual environment, we will 
continue to evaluate how to most effectively carry out workforce 
recruitment.

    3. In terms of meeting your stated goal of ending the claims 
backlog by 2015, does your FY 2014 budget provide additional resources 
for overtime pay? Is this a strategy you plan to utilize in the coming 
fiscal year?

    VBA Response: VBA's FY 2014 budget request includes at least $53 
million in overtime pay. VBA will continue utilizing overtime as a 
strategy in targeting production capacity where it is most effective. 
On May 15, 2013 VA announced mandatory overtime for claims processors 
in its 56 regional benefits offices through the end of fiscal year 2013 
to help eliminate the backlog, with continued emphasis on high-priority 
claims for homeless Veterans and those claiming financial hardship, the 
terminally ill, former Prisoners of War, Medal of Honor recipients, and 
Veterans filing fully developed claims.

    4. You have requested an increase of 13.6 percent in discretionary 
spending for the Veterans Benefits Administration.

    a. Can you point to specific program elements and achievements that 
this increase supports in terms of your goal of ending the claims 
backlog by 2015?

    VBA Response: VBA's FY 2014 budget request includes a $63.4 million 
increase in discretionary spending over the FY 2013 baseline of $2.16 
billion to cover inflation in current services, such as pay, benefits, 
rent, and utilities. The remaining $228 million increase supports the 
following improved services to our transitioning Servicemembers and 
Veterans, survivors, and their families:

      I  The Veterans Claims Intake Program (VCIP) increase of $119 
million supports VBA's Transformation Plan designed to eliminate the 
claims backlog and achieve our goal of processing all claims within 125 
days with 98 percent accuracy in 2015. VCIP is responsible for the 
conversion of claims from paper to an electronic format for processing 
in VBMS.
      I  Increased resources to eBenefits/Veterans Online Application 
(VONAPP) of $5 million for greater capability and support for Veterans, 
survivors, and their families to apply for benefits directly online. 
There are currently 47 self-service features available via the 
eBenefits portal, with 2.5 million registered users as of March 31, 
2013. VONAPP Direct Connect provides ``Turbo Tax''-like claims 
submission for original and supplemental compensation claims, as well 
as dependency adjustments.

    The remaining $104 million increase is needed to implement the VOW 
to Hire Heroes Act of 2011 (P.L. 112-56). This increase supports 
mandatory participation in the Transition Assistance Program that helps 
separating Servicemembers understand the benefits and services that VA 
offers and successfully make the transition from military to civilian 
life.

    b. If you were provided an additional $300 million for this 
account, what specifically could you do with such an increase that 
would provide the biggest bang for the buck this year in terms of 
ending the claims backlog?

    VBA Response: The FY 2014 budget submission invests heavily in 
VBA's plan to eliminate the disability claims backlog in 2015, a goal 
which VA is making progress toward. Given additional resources, VA 
would take actions that would provide positive, near-term improvement 
toward the claims backlog, specifically those that would increase 
claims production capacity. An increase in planned overtime for the 
processing of compensation and pension claims would provide an increase 
in production capacity, and VA has already reallocated resources to 
expand overtime for the remainder of fiscal year (FY) 2013.
    VA would also use additional funding to reduce claims development 
time, such as the time awaiting medical exams. VBA has the authority to 
contract for medical exams under Public Law 108-183 and will execute an 
estimated 27,380 examinations at six regional offices in FY 2013 at an 
average cost of $785 per examination. If VBA was provided additional 
resources for contract medical exams, there would be near-term gains in 
claims production as more claims are made ``ready for decision'' 
earlier in the process. These production gains, however, are not 
unbounded. As more resources are added to contract medical exams, there 
comes a point of diminishing returns as the process flow becomes 
constrained by the processing capacity at each regional office.

    5. Your budget estimates a 16 percent increase in mandatory 
spending for Compensation and Pension.

    a. Please provide the Committee with information regarding the 
factors driving these large increases in mandatory spending?

    VBA Response: The FY 2014 budget authority for the Compensation and 
Pension (C&P) account increased 16 percent over the FY 2013 level; 
however, total obligations increased 7.3 percent over the FY 2013 
level. Unobligated balances of $5 billion at the end of FY 2012 reduced 
the FY 2013 appropriation request. The C&P account is authorized to 
obligate until expended. The $5 billion in carryover was previously 
authorized and was therefore not included in budget authority again in 
FY 2013.
    The budget authority also reflects a request for a transfer from 
the Readjustments Benefits account to the C&P account to fully fund FY 
2013 expected obligations. This request is consistent with the 
Administrative Provision Sec. 201, and when coupled with the $5 billion 
in previously authorized funding available for obligation in FY 2013, 
and $60.6 billion in appropriations, supports anticipated obligations 
of $66.4 billion.
    The FY14 appropriation request does not anticipate an unobligated 
balance carried forward from FY 2013; therefore, FY 2014 budget 
authority equals obligations.
    Obligations for the C&P account increase to $71.2 billion in FY 
2014. This is a 7.3 percent increase over FY 2013 obligations of $66.4 
billion. This increase in obligations is consistent with historical 
annual increases due to net increases in caseload, an upward trend in 
Veterans' average degree of disability, and cost-of-living adjustments 
to monthly payments. An estimated 4.2 million Veterans and survivors 
will receive compensation, and over 517 thousand will receive pension 
benefits in 2014.

                                 
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