    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

         MILITARY CONSTRUCTION, VETERANS AFFAIRS, AND RELATED AGENCIES
                            APPROPRIATIONS FOR 2016

                                  __________

                                              Wednesday, March 4, 2016.

                         DEPARTMENT OF VETERANS AFFAIRS

                                    WITNESS

    ROBERT A. McDONALD, SECRETARY, DEPARTMENT OF VETERANS AFFAIRS
              ACCOMPANIED BY:
                  DR. CAROLYN M. CLANCY, INTERIM UNDER SECRETARY
              FOR HEALTH
                  ALLISON A. HICKEY, UNDER SECRETARY FOR BENEFITS
                  STEPHEN W. WARREN, EXECUTIVE IN CHARGE FOR
              INFORMATION AND TECHNOLOGY
                  HELEN TIERNEY, EXECUTIVE IN CHARGE FOR THE
              OFFICE OF MANAGEMENT AND CHIEF FINANCIAL OFFICER
                  GLENN R. POWERS, DEPUTY UNDER SECRETARY FOR
              FIELD PROGRAMS

                           Chairman Opening Statement

        Mr. Dent [presiding]. Good morning.
        I would like to bring to order this hearing for Veterans
    Affairs--for the MILCON V.A. Subcommittee. Thank you all for
    attending.
        And today, I am very pleased to welcome Secretary Robert A.
    McDonald, Secretary of the Department of Veterans Affairs, for
    his first appearance before this subcommittee, defending his
    fiscal year 2016 budget request.
        Mr. Secretary, we know you have a lot of important material
    you want to present to us today, and subcommittee members have
    a lot of questions for you and I know competing hearings as
    well. So we would appreciate you being willing to keep your
    opening remarks to within 10 minutes.
        I will also keep my opening remarks to a minimum.
        Secretary Bob, you come before us at a challenging time for
    the V.A. You are trying to recover from the wait list scandal
    and implement the complex new Choice legislation.
        And you are trying to bring about a transformation of the
    agency to make it more veteran-service-centric and certainly
    more customer-friendly, and we appreciate those very good and
    sincere efforts.
        You are also defending an enormous budget increase in your
    discretionary budget of about $5.1 billion, or a 7.8 percent
    increase, which is financed by offsets in the President's
    budget that Congress, frankly, is unlikely to accept.
        I have to be frank with you, Mr. Secretary. Any increases
    are going to be extremely difficult to fund under the
    constraints we have, and all departments are going to be
    affected under the BCA, the Budget Control Act, with a
    government-wide increase in the non-defense discretionary cap
    of $1.1 billion. We can't make room for a $5.1 billion increase
    without taking a machete to important programs in other
    subcommittees. I suspect the chairman may agree with me on that
    point.
        We fully appreciate the complex mission you have at the
    V.A. and share your dedication to making it work better. You
    have a lot of great employees out there, and when I visit
    facilities, I am always extraordinarily impressed by your
    medical team and all the allied health professionals.
        The subcommittee welcomes the opportunity to learn about
    your vision for addressing the V.A.'s problems and reforming
    the agency so that we are sure we are giving veterans who want
    to use the V.A. the services they deserve.
        Mr. Bishop is not here at the moment.
        I am going to quickly yield to the chairman and then to the
    ranking member of the full committee for their opening
    statements.

                   Full Committee Chairman Opening Statement

        Mr. Rogers. Thank you, Mr. Chairman, and congratulations,
    by the way, on assuming this chair.
        Mr. Dent. Thank you.
        Mr. Rogers. This is your first hearing?
        Mr. Dent. Third hearing.
        Mr. Rogers. Third hearing? Well, Okay. You are off to a
    good start.
        Anyway, congratulations to you, and best wishes.
        Mr. Secretary, we are glad to have you here.
        You have ranked some very impressive credentials to this
    job from the private sector, and we are looking for great
    things from you and your staff. You've got your headaches,
    you've got your problems, but I feel like you are the man for
    the job. We congratulate and welcome you to this subcommittee
    for your first time.
        The V.A. is charged with carrying out an essential
    responsibility of the U.S. government, and that is ensuring the
    health and well-being of our nation's vets, who selflessly
    serve with dignity and honor.
        This charge brings a host of challenges: providing our
    veterans with timely access to quality health care, ensuring
    that they receive appropriate compensation for disabilities,
    and fighting the persistent problems of veterans' homelessness
    and substance abuse.
        Just last summer, we were made aware of gross mismanagement
    and negligence on the part of this department. Veterans were
    kept on wait lists for months, awaiting health care services
    and treatments that they have been guaranteed by their
    government and deservedly so.
        We can all agree that treating our veterans this way is
    unacceptable, and I commend you for your willingness to face
    these serious issues head on and the actions you have taken to
    right the ship.
        Among the changes you have made to the V.A. care model is
    the implementation of the Veterans Choice program. The Choice
    program has offered thousands of veterans the opportunity to
    get off lengthy wait lists and seek treatment outside of the
    V.A. health care system.
        We are beginning to see progress on the wait lists, and
    veterans now have access to health care facilities closer to
    their homes. But even with this progress, more work remains.
        Many veterans who should qualify for the Choice program
    have been denied access by the V.A. These veterans either live
    more than 40 miles from a V.A. facility or must drive distances
    in excess of 40 miles to reach one due to geographical
    impediments.
        This department must take steps to ensure that the 40-mile
    rule and qualifying exceptions are applied evenly and in a
    timely manner.
        While we continue to hone and improve new programs, such as
    Veterans Choice, it is critical that V.A. does not lose sight
    of important modernization initiatives that Congress has been
    promoting for years.
        One such initiative is digitizing V.A.'s medical records.
        Mr. Secretary, your budget includes $141 million for
    scanning files and medical records into digital format, which
    is the same as your fiscal 2015 allocation.
        For 2015, the committee provided an additional $40 million
    for three specific purposes--regional-office staffing,
    digitized scanning and the centralized-mail initiative--yet you
    have only allocated $10 million of that for scanning and
    centralized mail.
        Eliminating the need to locate and transfer paper records
    will streamline the claim and benefit process tremendously. We
    need a strong commitment from the department to make this a
    reality.
        I have visited one such center and noticed the huge bundles
    in a file, bound maybe this thick--paper, that is shipped all
    around the country trying to find its place.
        You are digitizing those records, which means you can
    electronically, instantaneously access that file without having
    to ship it from Burbank, California. So I really hope that we
    can see more of this.
        Another initiative Congress has been emphasizing for some
    time now is the implementation of the electronic health-record
    system that is interoperable with the DOD system.
        Your budget requests $233 million for the V.A. electronic
    health record and sets aside $50 million of that for achieving
    the interoperable capacity.
        I appreciate your commitment to that initiative in the
    budget and the work you have done to stand up a framework that
    will allow your record system to work with DOD's. And you have
    all heard me talk about this one instance a few years ago. A
    vet from my district was injured by a bomb in Iraq, and he lost
    one eye. The other eye was severely injured.
        Then he was discharged, and the eye begins to act up. So he
    goes to the V.A. hospital in Lexington, and V.A. declines to
    treat him. They were afraid to operate not knowing what had
    happened in the DOD hospital in Germany, and they couldn't get
    the records.
        So he lost his other eye simply because of the incapability
    of these two bureaucratic agencies to work together. That is
    going to stop, and you are making a really good start, and I
    appreciate that very much.
        I continue to be concerned that until DOD awards a contract
    to produce its record and V.A. shows demonstrable progress with
    modernization of its record, we can't be sure that this goal
    will be achieved in the near term.
        I can't emphasize strongly enough the importance of
    achieving interoperability with DOD's electronic health-record
    system. If these two systems can't talk to each other, which I
    find incomprehensible, we continue to run the risk of service
    members receiving inadequate care and undergoing inadvisable
    procedures.
        We need more than words on this critical issue; we need
    results. In fact, we are demanding results.
        We had a meeting less than a year ago with the Secretary of
    Defense, and the Secretary of V.A., and we talked about this
    extensively. Both sides agreed to work it out. But both sides
    are protecting their own turf.
        And so you will find language in your appropriations that
    puts you under the gun on this, and we are going to do the same
    with the DOD, which we have been doing for several years.
        And finally, let me stress to you the seriousness of the
    problem of prescription-drug abuse among our vets.
        We have all seen in the news the V.A. hospital in Tomah,
    Wisconsin that some are referring to as ``Candy Land.'' We now
    know that officials there have been overprescribing opioids and
    possibly even contributing to the abuse of these drugs by our
    veterans.
        I am pleased to see that the V.A. Office of Inspector
    General is investigating that case. It is my hope that this
    investigation will lead to safer practices among those treating
    patients suffering from drug addiction.
        This committee is also interested to know what other
    actions the department is taking, regarding these disturbing
    developments in Wisconsin, and I hope you touch on that today.
        As part of your opioid-safety initiative, it is important
    that the V.A. continue to pursue alternative remedies to
    prescription opioids and consider new technology such as abuse-
    deterrent drug formulations and tamper-resistant packaging.
        It is also critical that we continue to invest in tried and
    true models like veterans treatment courts. These courts which
    require regular court appearances, drug testing and treatment
    sessions are integral to helping our veterans find a way
    forward and out of addiction.
        This committee stands ready and willing to tackle these
    issues with you head on, and we hope that your department will
    remain a committed partner in the fight against prescription
    drugs, which the Center for Disease Control now says is a
    national epidemic.
        We look forward to learning how you plan to offer more
    timely and accessible health care to our vets and fulfill the
    promise that both Congress and the V.A. have made to serve
    them.
        Thank you.
        I have to go to another couple of hearings. I am going to
    miss part of your testimony, which I regret.
        Mr. Chairman, thank you.
        Mr. Dent. Thank you, Mr. Chairman.
        I want to second your statement, particularly the issue of
    the interoperability between the V.A. and the DOD health
    record. It is very important. It is a priority, I think, for
    all of us.
        At this time, I would like to recognize distinguished
    ranking member, Mrs. Lowey.

                Full Committee Ranking Member Opening Statement

        Mrs. Lowey. I too would like to thank my friend, Chairman
    Dent. Congratulations.
        And unfortunately, Ranking Member Bishop, who has worked on
    these issues for a long time, I know he has worked with you, he
    couldn't be here today.
        But this is a very important hearing, and I would like to
    welcome Secretary McDonald and your assistants and all of our
    distinguished guests this afternoon.
        As the subcommittee reviews the fiscal year 2016
    President's budget request, we have the tough mission and
    responsibility to ensure the funding of the Department of
    Veterans Affairs adequately addresses some very serious issues.
        The number of current veterans and those transitioning into
    the V.A. health care system is staggering. We must ensure that
    we have the right programs and services these men and women
    deserve for their service to our nation. We made certain
    promises to our veterans. We are obligated to deliver.
        In your short time, Mr. Secretary, your efforts have led to
    reductions in the claims backlog, accountability in your
    workforce and initiation of several new programs to meet the
    growing demand and concern of all veterans.
        Specifically, I applaud the use of technology in the V.A.
    to further automate the claims submission and approval process,
    which I understand has reduced the overall wait time by 138
    days for a decision.
        And I just want to say, the chairman and I have been so
    frustrated. We have had four hearings. A couple of public
    hearings, a couple of closed door hearings. It is beyond me,
    frankly, that you can't get this done. And I know you are
    working towards that end. I won't put up pictures of all the
    old files that were kept in boxes. But it is such a disservice
    to the men and women who served our country with such
    distinction. Frankly, I still can't understand that the people
    who send our young men and women in harm's way, our government,
    can't get this done. But I am glad you are working on it, I am
    glad there is progress.
        It is amazing to me, in the private sector, you leave a
    job, you take the chip, bring your health care information to
    the next employer, and we are still going through boxes. But
    thank you for the progress that has been made.
        And I look forward to the day, Mr. Chairman, and Mr. Big
    Chairman, when we can hear ``mission accomplished,'' and that
    it would be completed. Because we know there is so much more
    work to be done.
        At last count, by the way, the claims backlog was still
    around 214,000. And then there are more claims that are
    continuously added into the system.
        I hope you move this process forward expeditiously.
        I am also very concerned about the amount of qualified
    medical personnel necessary to address the increasing number of
    veterans in serious issues like mental illness, post traumatic
    stress disorder, traumatic brain injury, and suicide
    prevention, especially in remote areas where there are limited
    or no V.A. facilities.
        I know we are in a fiscally uncertain environment. The
    Budget Control Act remains. There may be some impact to certain
    services in programs where veterans are a top priority. And
    while there is cause to celebrate some successes, we can and
    must do better. We are committed to working with you going
    forward.
        And I think it is important, Mr. Chairman, and I know the
    chairman is struggling with the numbers, and we don't know
    exactly the numbers that we are dealing with but I think it is
    important when the numbers are released and we get an analysis
    of what those numbers will do to the whole process.
        So, Mr. Secretary, again, welcome. I, too, want to
    apologize, because we have about four hearings today. But I
    look forward to continuing to talk with you, working with you.
    And I just want to say in closing and expedite that process--I
    am glad to know that you have new facilities for records, but I
    still can't understand why it is taking so long.
        Thank you very much for the progress you have made and
    thank you for your service.
        Mr. Dent. Thank you, Mrs. Lowey, for your comments.
        At this time, Mr. Secretary, your full statement will be
    included in the official record. After you introduce those who
    are accompanying you today, please feel free to begin.
        And members are reminded that we will be operating on a 5-
    minute rule for questions. So, with that, Secretary Bob.

                         Secretary's Opening Statement

        Mr. McDonald. Thank you. Thank you, Mr. Chairman.
        I have with me today Under Secretary Hickey and Under
    Secretary Clancy, who will join me, as well as our CFO, Helen
    Tierney and Steph Warren, who runs our I.T. operation. And
    hopefully, we will get a chance to get into detail on some of
    the issues that you all raised, like the electronic health
    record.
        Chairman Rogers, Chairman Dent, Ranking Member Lowey,
    Ranking Member Bishop, members of the subcommittee, thanks for
    the opportunity to discuss the 2016 budget and 2017 Advanced
    Appropriations request.
        I appreciate the opportunity to speak with many of you
    prior to this hearing. We deeply appreciate Congress' and the
    President's steadfast support for veterans, their families, and
    survivors, as well as the assistance of veterans service
    organizations.
        As V.A. emerges from one of the most serious crises the
    department has ever experienced, we have before us a critical
    opportunity to improve care for veterans, and to build a more
    effective system. With your support, the V.A. intends to take
    full advantage of this opportunity.
        Members of this Committee and VSOs share my goal to make
    the V.A. a model agency with respect to customer experience, an
    example for other government agencies. With efficient and
    effective operations, we look to be comparable to the top
    private sector businesses.
        The cost of fulfilling our obligations to veterans rose
    over time because veterans' demands for services and benefits
    continue to increase as wars end.
        In 2014, 22 percent of Vietnam veterans were receiving
    service-connected disability benefits. That is four decades
    after the war ended. We expect the percentage will continue to
    increase. And it is worth remembering that today, almost 150
    years after the Civil War, V.A. is still providing benefits to
    the child of a Civil War veteran.
        We still have troops in both Afghanistan and Iraq. Yet, in
    the last decade, we have already seen dramatic increases for
    demand for benefits and care.
        From 1960 to 2000, the percentage of veterans receiving
    V.A. compensation was stable at about 8.5 percent. But in just
    14 years, since 2001, the percentage dramatically increased to
    19 percent, more than double.
        Simultaneously, the number of claims and medical issues in
    claims has soared. In 2009, VBA completed almost 980,000
    claims. In 2017, we project we will complete over 1.4 million
    claims. That is a 47 percent increase.
        But there has been more dramatic growth in the number of
    medical issues in every single claim; 2.7 million in 2009 and a
    projected 5.9 million in 2017. That is a 115 percent increase
    over just 8 years.
        These increases were accompanied by a dramatic rise in the
    average degree of veterans' disability compensation. For 45
    years, from 1950 to 1995, the average period of disability was
    30 percent. Since 2000, the average period of disability has
    risen to 47.7 percent.
        So, while it is true that the total number of veterans is
    declining, the number of those seeking care and benefits is
    increasing dramatically. Fueled by more than a decade of war,
    Agent Orange-related claims, an unlimited claims appeal
    process, increased medical claims issues, far greater survival
    rates for those wounded on the battlefield, more sophisticated
    methods for identifying and treating veterans' medical issues,
    and importantly, the demographic shifts--our veterans are
    aging, veterans' demands for services and benefits exceeded
    V.A.'s capacity to meet them. It is important that Congress and
    the American people understand why that is happening.
        The most important consideration is that American veterans
    are aging and retiring. Just 40 years ago, only 2.2 million
    veterans were 65 years old or older. That is 7.5 percent of the
    population. In 2017, we expect 9.8 million veterans will be 65
    years or older. That is 46 percent of all veterans.
        We now serve an older population with a greater demand for
    care, more chronic conditions, less able to afford private
    sector care. Currently, 11 million of the 22 million veterans
    in this country are registered, enrolled, or use at least one
    V.A. benefit or service. More are demanding V.A. services and
    care than ever before.
        Requirements for women veterans and mental health care have
    increased dramatically. Over 635,000 women veterans are now
    enrolled for health care. And over 400,000 actively use V.A.
    That is double the number in the year 2000.
        Annual increases in women veterans seeking care, about 9
    percent. And this trend will continue.
        Our women veteran call center now connects with over
    100,000 women veterans per year.
        In 2014, over 1.4 million veterans with a mental health
    diagnosis entered VHA. And we had 19.6 million mental health
    outpatient encounters. That is an increase of 64 percent and 72
    percent, respectively, since only 2005.
        Since its inception in 2007, our veterans' crisis line has
    answered over 1.6 million calls, and assisted in over 45,000
    rescues. As veterans witness the positive changes V.A. is
    making, and as the military downsizes, the number of veterans
    choosing V.A. services will continue to rise. It should, and
    they have earned it.
        We are listening hard to what veterans, Congress, employees
    and veterans service organizations are telling us. What we hear
    drives us to a historic department-wide transformation,
    changing V.A.'s culture and making veterans the center of
    everything we do.
        We call it MyVA, and it entails many organizational reforms
    to better unify the department's efforts on behalf of veterans.
    MyVA focuses on five objectives to revolutionize culture and
    reorient V.A. on veterans' outcomes, rather than internal
    metrics.
        First is improving the veteran experience so that every
    veteran has a seamless, integrated and responsive customer
    service experience every single time.
        Second, improving the employee experience by eliminating
    barriers to customer service and focusing on our people and our
    culture so that we can better serve veterans.
        Third, improving our internal support services.
        Fourth, establishing a culture of continuous improvement to
    identify and correct problems faster and replicate solutions at
    all facilities.
        And last, enhancing strategic partnerships. The American
    people, many partners want to join us in this effort, and we
    welcome them inside the tent.
        MyVA is reorganizing the department geographically and
    that's the first substantial step in achieving this goal. In
    the past, V.A. had nine disjointed geographic organizational
    structures, one for each one of our nine lines of business. Our
    new unified organizational framework has one national
    structure, which is five regions.
        This aligns V.A.'s disparate organizational boundaries into
    a single framework. This facilitates internal coordination and
    collaboration among our business lines, creates opportunities
    for local level integration, and promotes effective customer
    service. Veterans will see one V.A. rather than individual
    disconnected organizations.
        Last, MyVA is also about ensuring sound stewardship of
    taxpayer dollars. We will integrate management improvement
    systems, such as Lean Six Sigma, across operations to ensure we
    balance veteran-centric service with operational efficiency.
        But we need the help of Congress. V.A. cannot be a sound
    steward of the taxpayers' resources with the asset portfolio we
    carry. No business would carry such a portfolio, and veterans
    deserve better.
        It is time to close V.A.'s old substandard and
    underutilized infrastructure. Nine hundred V.A. facilities are
    over 90 years old, and more than 1,300 are over 70 years old.
    V.A. currently has 336 buildings that are vacant, or less than
    50 percent occupied.
        That is 10.5 million square feet of excess space costing an
    estimated $24 million annually to maintain. These funds could
    be used to hire roughly 200 registered nurses for a year, pay
    for 144,000 primary care visits for veterans, or support 41,900
    days of nursing home care for veterans in community living
    centers.
        We need your support to do the right thing. MyVA reforms
    will take time, but over the long term they will enable us to
    better provide veterans with services and benefits they have
    earned, and that our nation has promised them.
        Our 2016 budget will allow us to continue transforming to
    meet the intent of MyVA. It requests $168.8 billion; a $73.5
    billion in discretionary funds, and $95.3 billion in mandatory
    funds for benefit programs. The discretionary request is an
    increase of $5.2 billion, or 7.5 percent above the 2015 enacted
    level, providing resources to continue serving the growing
    number of veterans seeking care and benefits.
        The budget will increase access to medical care and
    benefits for veterans. It will address infrastructure
    challenges, including major and minor construction,
    modernization and renovation. It will end the backlog of
    claims, and it will end veteran homelessness in calendar year
    2015. It will fund medical and prosthetics research, and it
    will address important I.T. infrastructure and modernization.
        The resources required in the 2016 budget request are in
    addition to those Congress provided last year in the Veterans
    Choice Act. V.A. has implemented the Act. We want to be
    successful, and we will be expanding our outreach, and
    providing more information to veterans with a nationwide
    public-service announcement, which we will share with you the
    link so that you can see it.
        But we don't know at this time how many veterans will use
    the provisions of the Act to seek non-V.A. care, or how much
    that care will cost. There is a high degree of uncertainty, as
    there is in any free marketplace with choice. Our current
    estimates of demand range from a low of about $4 billion for
    Choice Act, to a high of about $13 billion over a 3-year
    program.
        We will need flexibility within our budget to ensure that
    we have the right resources at the right place, at the right
    time, to provide veterans the timely care they need, regardless
    of where they choose to get that care. As an example of this
    flexibility, we are currently exploring options to review the
    40-mile provision of the Choice Act to get more veterans the
    care that they want.
        I look forward to working with this committee, with other
    members of Congress, with veteran stakeholders, on this
    critical issue. We meet today at a historically important time
    for V.A. and our nation. Today marks the 150th anniversary of
    President Lincoln's solemn promise to care for those ``who
    shall have borne the battle,'' and for their families and their
    survivors.
        That is V.A.'s primary mission, the noblest mission
    supporting the greatest clients of any agency in the country.
    Mr. Chairman, members of the committee, thanks again for your
    support for veterans, for working with us on these budget
    requests, and for making things better for all veterans. We
    look forward to your questions, sir.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                 THE CHOICE ACT

        Mr. Dent. Thank you, Mr. Secretary. Mr. Secretary, I have
    to begin with an issue I view as critical to the future of the
    V.A., and we have discussed this. And I know this view is
    shared with members of the subcommittee.
        The Choice Act, as you know, is bifurcated, reflecting the
    different views of the members of the House and Senate
    authorizing committees at the time. On the one hand, the Choice
    Act sets up a system for non-V.A. care to be provided in
    situations where distance or wait time prevent access to direct
    V.A. health care.
        But it also finances a hiring of almost 10,000 new V.A.
    medical staff, and more than 200 facility leases and
    construction projects in an effort to strengthen capacity for
    direct V.A. care. This is a rhetorical question, but is this
    bifurcated system sustainable in the long term? Can we afford
    to build up the V.A. system with its aging infrastructure, at
    the same time as we develop non-V.A. care alternatives?
        I personally think that non-V.A. care is a great and
    underutilized alternative, particularly in the aftermath of
    what happened in Phoenix and elsewhere around the country. Many
    veterans have high-quality, non-V.A. facilities in their
    neighborhoods, but aren't able to use them, and instead have to
    travel great distances for V.A. care.
        Let me be clear, I understand and support the need for the
    V.A. to provide specialty services in areas like polytrauma
    injury, PTSD, TBI, Agent Orange, behavioral health, and other
    areas. But why shouldn't we rely on high-quality, private-
    sector providers for more routine, non-service-related care?
        That is really my question. And for you, Mr. Secretary,
    given where I live and many members live, we have some world-
    class facilities that just really cannot be utilized by many of
    our nation's veterans who deserve the best.
        Mr. McDonald. Mr. Chairman, we share your vision for hybrid
    or integrated system of the future, an integrated system of
    V.A. care and non-V.A. care. Looking at it from the veterans'
    perspective, we want the veteran to get the care they need,
    wherever it is most convenient and that care is available.
        Outside care is something the V.A. has been about for quite
    a while. In fact, over the last year, our non-V.A. care
    appointments have increased about 48 percent. So that is a
    large increase. That is even before the Choice Act.
        With the Choice Act, we now have the ability, as you said,
    if you are outside 40 miles, if you are beyond 30 days of
    getting more people access to outside care. It is very early in
    the days of the Choice Act. The last cards were mailed in
    January. We started in November.
        We set up the program in a period of months. And so we are
    not yet certain how many veterans will take advantage of the
    Choice Act. And we would like to continue opening the aperture
    of the Choice Act so more veterans can take advantage of it.
        We are now getting in contact with all veterans to make
    sure they are aware of it, since many of the cards were sent
    out over the holidays, and may have been lost. We are also
    airing a public service ad, which is on our web-site, and we
    would be happy to share that ad with you. And we are doing
    everything we can to get more providers into the system.
        But so far, we have not seen the full impact of the Choice
    Act. And we want to work with you on redefining it in order to
    get more people into it.
        Mr. Dent. In my observation, is many veterans are aware of
    the program, but for whatever reasons, they are not eligible;
    either they don't meet the 40-mile requirement, or a scheduling
    issue. But as a quick follow up, would the idea of a mix, or
    integration of the V.A. in private sector, could that help us
    to address the facility challenges that you so clearly
    articulated in your testimony? Would this help us predict where
    veterans will be geographically in order to build the
    facilities years in advance?
        Mr. McDonald. We think it will. If you look over our recent
    past, we have been leasing more facilities and creating more
    community-based outpatient clinics than we have the big, large
    hospitals. That is a trend in the medical industry. And it is
    one that we think is appropriate in order to get care out to
    where the veterans actually live.

                         RESTRUCTURING V.A. HEALTH CARE

        Mr. Dent. And I would also mention, too, last week a group,
    Concerned Veterans for America, released a report called
    ``Fixing Veterans Health Care.'' The report prescribes a major
    restructuring of the V.A. health care.
        Among its proposals, this bipartisan task force recommends
    that future veterans be required to enter a new V.A. insurance
    system with varying levels of coverage. Currently-enrolled
    veterans would be able to continue using V.A. health
    facilities, or shift to subsidized care to private providers.
        It also calls for the closure of inefficient V.A. medical
    facilities similar to your testimony. Mr. Secretary, I know you
    issued a statement rejecting the report saying that, ``Although
    there is an important role for non-V.A. care in supplementing
    V.A. health care, reform cannot be achieved by dismantling the
    V.A. system or preventing veterans from receiving V.A. care.''
        I am certainly not endorsing the report in its entirety,
    but I do think it could jumpstart a healthy debate about how to
    more efficiently and cost-effectively provide care to veterans.
    I would be curious about your thoughts.
        Mr. McDonald. Well, as you said in the statement that I
    issued, we felt that many of the proposals advocated
    contracting out this sacred mission that we have for care for
    those who have borne the battle. We think there is an important
    role for outside care, as I have said. We think there will be a
    hybrid system, an integrated system in the future, to
    supplement V.A.'s own care.
        But we don't think that diminishes or obscures the
    importance of V.A.'s health care system. We think reforming
    V.A. health care can't be achieved by dismantling it and
    preventing it, or preventing veterans from receiving the
    specialized care and services that can be provided by V.A.
        Our goal continues to be to provide that care for veterans,
    and we are happy to meet with anyone to discuss any ideas. We
    believe every idea is on the table. But we are going to look at
    it through the lens of what is best for veterans.
        Mr. Dent. Thank you. My time is expired. I would like to
    recognize the very distinguished ranking member.
        Mr. Bishop. Thank you very much, Mr. Chairman. At this
    time, Mr. Farr, he is ranking member of the Agriculture
    Subcommittee, and he has a hearing that he needs to be in
    presently. So I am going to yield to him, and allow him to go
    first.
        Mr. Farr. Thank you very much for yielding, Mr. Bishop. And
    thank you, Mr. Chairman. Thank you very much, Mr. Secretary,
    for coming here. And thank you for your service. You know, the
    most frequently asked question in Congress is ``why don't we
    run government like a business?''
        I don't think anybody has come before this committee with
    more business background than you have; CEO and President of
    Procter & Gamble, which was awarded the best company for
    developing leader talent. The list goes on and on.
        Also, I think your training in the military in the 82nd
    Airborne and in jungle warfare is going to be very helpful. You
    are coming before a Congress, which has just told you that
    despite this incredible testimony with probably more reform and
    suggestion in it than any opening statement I have ever heard
    from a secretary in any department, that you are not going to
    get the money you are after.
        I hope, Mr. Chairman, when we finally get these numbers,
    and we are taking the Veterans' budget and cutting and
    squeezing and trimming it, we can bring the Secretary back and
    have a real, transparent discussion on what those cuts are
    going to mean and what is going to happen as a result. Mr.
    Secretary, you put in here how we can fix the things that are
    broken, you also indicate that you are going to need money to
    do that. It can't all be done just by savings. For example, I
    think your idea of a ``BRAC for veterans facilities'' may be
    worth looking into but endeavors like that cost money.
        Also I want to tell you that I appreciate you going out and
    seeing cemeteries, as you have. A week from Friday, I am
    dedicating the California Central Coast Veterans Cemetery in my
    district. Your department has been very helpful in its creation
    and I wanted to thank those in your department who worked in
    that.

                           HEALTH CARE ACCREDITATION

        You indicated in one of the Chairman's questions about some
    sort of combined professional network involving the public and
    private sector that could help provide more mental health
    practitioners. I am very concerned that because of PTSD TBI,
    and other mental health issues, our veterans in California are
    suffering unnecessarily due to a shortage of appropriate
    doctors. I know that Congresswoman Barbara Lee is very
    concerned about this, too. We can't find marriage and family
    therapists to work for the V.A. because the V.A. has an
    accreditation issue in California. I really want you to go back
    and find out what initiated the ruling on this issue. We can't
    hire marriage and family therapists in the V.A. unless they
    have graduated from institutions that have specific
    accreditation curriculum.
        California has 95 percent of certified marriage and family
    therapists who cannot qualify to work for the V.A. They went to
    Stanford, they went to Berkeley. I mean, this is nuts. I can't
    believe that they can't take steps to correct that.
        We are opening the first jointly designed DOD/V.A. clinic
    on the Monterey peninsula, next year and we are having a heck
    of a problem trying to hire a psychiatrist to come there. You
    are having even a harder time getting marriage and family
    therapists. A lot of them in the community would love to go
    work for the V.A. I hope that you will check what steps the
    V.A. is taking in providing and maintaining a significant
    number of mental health practitioners.
        When can you accept the credentialing of California
    marriage and family therapists as part of that professional
    core that you want to increase?
        Let me also ask you to look into the backlog with the board
    of appeals. Mr. Secretary, the amount of money you are
    committing to that is going to be cut, in these reductions the
    chair is talking about. He is not the only chair--every chair
    of every appropriations committee is giving the warning, Mr.
    Secretary. What we do here is, we have all these nice hearings
    on what the President has proposed. Then we get the numbers
    from the Budget Committee. And then we go behind closed doors,
    and cut the hell out of everything. Then we adopt it without
    any public transparency. I hope this year will change that, and
    that we have subsequent hearings once we get the numbers,
    saying ``this is what you are asking'', ``this is what you are
    going to get.''
        What are the consequences? Because that is what we are
    supposed to relay to our constituents. So, if you could look
    into the marriage and family counseling and the backlog on the
    board of appeals, I would appreciate it.

                            LOCAL COMMUNITY SUPPORT

        Lastly, let me just ask, if local law enforcement officers
    are coming to me and they say that the V.A. needs to assist
    local law enforcement officers and VSOs in dealing with
    suicidal veterans who should they contact to help these people
    that they know from the local community are in harms' way?
    There is no kind of crisis core in the V.A. who can go out with
    law enforcement and intervene in these crises with veterans,
    who have real problems. I would like to see if we could develop
    that enterprise. Thank you.
        Mr. Dent. Would you like to respond quickly, Mr. Secretary?
        Mr. McDonald. Yes, sir.
        First of all, relative to our employment initiative, we are
    recruiting. This week I was at the University of Delaware
    School of Nursing, and it was my 13th medical school trying to
    recruit people. So we do desperately need people.
        We talked about the issue in California. I would ask Dr.
    Clancy to do a deep dive on that. Maybe let her report on that.
        Dr. Clancy. So, thank you, Mr. Secretary. Congressman, we
    have a group taking a very hard look at this again. You have
    the facts exactly right, in terms of our initial interest in
    hiring marriage and family therapists who have graduated from
    an accredited program by a commission with a very long name,
    because we wanted to make sure that we had people with the best
    skills to meet the needs of veterans, which can be fairly
    complex. My understanding is that some of the newer programs
    have actually sought that accreditation. But we would be happy
    to follow up in terms of looking at other opportunities for us
    to bring this cadre of folks in to help veterans.
        Mr. McDonald. Relative to the peace organizations, we do
    have a national peace organization, well trained to deal with
    veterans, particularly those with traumatic brain injury. It is
    their role to reach out to the community, connect with the
    community, make sure that the local community is aligned.
        Mr. Farr. What they need when the crisis occurs, is to have
    somebody they can call who knows the veterans. Local law
    enforcement can't always talk them out of a situation.
        Mr. McDonald. Absolutely. We will follow up on that. We are
    working very hard to strengthen our security organization,
    particularly in light of what happened in El Paso, and this
    will be one of the things we build into it.
        Mr. Farr. Thank you.
        Mr. Dent. Thank you. At this time, I would like to
    recognize Mr. Jolly, of Florida.
        Mr. Jolly. Thank you, Mr. Chairman. Mr. Secretary, thank
    you for being here this morning.
        I have a couple quick questions, specifically on
    appropriations matters.

                                 CLAIMS BACKLOG

        You and I spoke about the backlog in benefits; it is a
    priority of mine. And I think the next story after the V.A. is
    going to be the VBA if we don't solve the backlog.
        Your budget requests $85 million, for 770 new FTEs, as well
    as $230 million additional for I.T., sorry, an addtional $85
    million. Mr. Secretary, do you believe that will have a
    demonstrable impact on clearing the backlog, or are we just
    keeping up, as best we can?
        Mr. McDonald. I think we will have a demonstrable impact.
    And, as we talked, the number of claims is going up. The number
    of issues per claim is going up. We have committed to ending
    the backlog by 2015 and then keeping it down. I would draw your
    attention to the pictures in my written testimony of the
    Winston Salem VBA office, where on one picture, you see all the
    files that Chairman Rogers was talking about. The other
    picture, you see no files. Because everything has been
    digitized.
        We have done all we can with digitization, with mandatory
    overtime. Now, we need more people.
        Mr. Jolly. And ending the backlog is defined how?
        Mr. McDonald. 125 days.
        Ms. Hickey. So, I just wanted to let you know, Congressman,
    that actually, we are well on target to end the disability
    rating claims back on the 125 days. We are--right now, we have
    reduced that backlog from 611,000 down to 214,000--almost
    400,000 that are no longer in backlog.
        We also have at the same time increased the quality of our
    claims. Well over 90 percent on the medical issues level and 96
    percent on--90 percent claim level, 96 percent at the medical
    issue level. We will do that. But your question is about the
    current budget.
        The current budget is focused on the appeals, non-rating
    and fiduciary requirements. Those are all direct results of
    doing 1.32 million claims.

              OFFICE OF INSPECTOR GENERAL'S FY 2016 BUDGET REQUEST

        Mr. Jolly. Well, I understand. And I appreciate your
    attention to this. Quite frankly, it was something that I would
    support; this is an issue of significant concern. Very quickly,
    on the OIG budget, what is the increase in the OIG budget?
        Mr. McDonald. The increase that was in the----
        Mr. Jolly. Request.
        Mr. McDonald [continuing]. The real request--we have had
    subsequent conversations with the OIG--is $15 million. We
    support that request.

        [Clerk's note: The official request is $355,000 above FY
    2015.]

        Mr. Jolly. What percentage is that?
        Mr. McDonald. I don't know exactly.
        Mr. Jolly. Is the increase in the OIG budget comparable to
    the 7.5 percent increase in the overall VA discretionary
    request? Is it less?
        Mr. McDonald. We will do the math and get back to you. It
    is $15 million. We have a lot of investigations going on and we
    need to get through them, get them over with.

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                      COMMUNITY MENTAL HEALTH PARTNERSHIP

        Mr. Jolly. Another appropriations question--fisal year
    2014, there was a request for the department to pursue
    community mental health partnerships. To use excess capacity in
    major metro areas to provide non-V.A. mental health services.
    Has there been any movement on that?
        Mr. McDonald. There has been a significant movement. In
    fact, I will let Carolyn talk about it. I wanted to mention
    something you and I had talked about earlier--strategic
    partnerships. Home-Base, in Boston where I visited, funded by
    the Boston Red Sox. Serving veterans with TBI, with PTSD. We
    are very supportive of activity. We want to create more of this
    strategic partnership.
        Dr. Clancy. So, we do actually actively partner with a
    number of practitioners in the private sector to help serve the
    needs of veterans. And the good news is, we just learned that
    we have figured out how to make sure that they have easy access
    to our continuing education materials. Rather than our kind of
    shipping them in paper, now they can actually get online
    directly and get their continuing education credits, which I
    think only strengthens them.
        Mr. Jolly. The 2014 bill directive actually provides for a
    demonstration project. Is there anything--have you actually
    defined a demonstration project in this? Or are you just using
    non-V.A. providers when you need them?
        Dr. Clancy. I think that we have done some of both, but I
    am going to have to follow up with you on that one.

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                          FALSE NOTIFICATION OF DEATH

        Mr. Jolly. And then one last thing just for the record. You
    and I spoke about this. I appreciate your attention to it. But
    I do want it to be on the record. We have had several cases of
    veterans and veteran beneficiaries, who have been notified
    falsely of their own death.
        I understand from the V.A.'s perspective that it results
    from the Social Security Administration sending over a notice.
    We know it is disruptive to the veteran. The V.A. has always
    resolved it, but it is a disruption that takes a month or 2 to
    solve. So I would appreciate your continued attention.
        Mr. McDonald. We actually talked this morning after our
    discussion, and we are going to go big into the Social Security
    Administration and find out what is going on. Because we have
    to take responsibility for that. The veterans are ours.
        It is devastating.
        Mr. Jolly. Thank you for that. I appreciate it. Thank you,
    Mr. Chairman.
        Mr. Dent. Thank you, Mr. Jolly. That reminds me of the old
    George Bernard Shaw statement that ``the rumors of my death
    have been greatly exaggerated.'' Something we certainly don't
    want to have happen. Mr. Bishop.

                         VETERANS CLAIM INTAKE PROGRAM

        Mr. Bishop. Thank you very much, Mr. Secretary, Dr. Clancy,
    and the other panel members. Your fiscal year 2016 budget
    request includes $140.8 million for the Veterans Claim Intake
    Program, which is a continuation of a scanning program that
    began scanning in September of 2012.
        I have a couple of questions about this. First, how many
    scanning contracts does the V.A. have for that program? And
    second, how many documents are scanned per month, and what
    happens to the documents after they are scanned? And then once
    the document has been scanned, how long does it take to get the
    completed package to a claims processor?
        Mr. McDonald. Let me let Allison answer that, but I just
    want to say that the scanning process is absolutely essential.
    It allows us to digitize the claim, which allows us to have a
    national workflow. We can move those claims anywhere in the
    country that has time and effort to get it done. It is one of
    the things that has led to the reduction, the backlog. Allison?
        Ms. Hickey. So Mr. Ranking Member, first of all, one
    contract. It is a performance-based contract, so we have two
    large companies that participate in it. And they are rewarded
    for doing better. So there is a performance competition base
    there.
        Four sites, one of which is in Newnan, Georgia, another in
    Kentucky, a third in Wisconsin, and a fourth in Iowa. We have
    successfully scanned more than 1.3 billion images since the
    start, at 99 percent quality. And that has effectively allowed
    us to reduce our paper inventory down to a remaining 25,000
    claims out of the 477,000 in the inventory.
        So we are 95 percent paperless right now. And we do all of
    our claims works now in the digital environment, minus those
    25,000 we are trying to get out. The companies have done a very
    good job of building quality assurance into this. We have
    mandated that for the contract. They have four to five layers
    of quality assurance to ensure the reliability.
        But to the point of what happens to the paper? We are
    paying a lot of money for the contractors to hold the paper
    while they are waiting on the DOD decision, because these are
    DOD records. We are working actively with DOD to the Benefits
    Executive Committee to make that decision. We will be involving
    our veteran service organizations in that final decision on
    what is the proper disposition of those records.
        I will tell you that I have today, sitting in regional
    offices across the country, half a million cubic feet of paper
    we are no longer using or touching. We are waiting on the
    simple disposition decision on what to do with those paper
    records. Because we are doing most of our business through the
    electronic digital environment; in fact, more than a million
    claims, and more than 2 million rating decisions.
        Mr. Bishop. Thank you. So when do you think that decision
    will come?
        Ms. Hickey. So Congressman, I am going to try to talk a
    little quieter. I apologize. My good Irish voice carries loud.
        So we are working literally right now on a decision with
    DOD. They are newly incentivized to move faster on this issue,
    because they are now storing paper from what they are scanning
    in their central cells for the services to bring us the records
    across from HAIMS.
        So we are literally right now, as we are working, I suspect
    sometime this year we will have a final decision. When we do,
    that will, as I expect, require resources to move us into that
    environment of proper disposition of those records. And that is
    not in the current budget right now.

                         V.A. AND DOD INTEROPERABILITY

        Mr. Bishop. All right. I recently read that VistA is no
    longer in contention to use by DOD for the electronic health
    records, which is not surprising, because it was clear that DOD
    historically has wanted nothing to do with VistA. What steps
    are being taken to make sure that whatever system that DOD
    chooses, this will be able to share information with it?
        I know that this is well before your time, Mr. Secretary.
    But as you know, the veterans department and DOD were directed
    to develop an electronic health record system. And can you tell
    us why it has been so difficult to achieve?
        Mr. McDonald. Ranking Member Bishop, I have said many times
    since I came in this job that we shouldn't punish veterans or
    servicemembers by having boundaries between organizations that
    get in the way of their care.
        So we take it very seriously that we have got to integrate
    with DOD on the electronic health record. It is one of the
    first things I looked at. And I have been to our sites, San
    Antonio, for example, where we run a hospital with DOD, and we
    have V.A. and DOD doctors looking at the same medical
    information on the screen.
        So I would like Steph Warren, if I could, to do a little
    bit of a deep dive on this, to bring the committee up to speed.
    And we would be happy to come over and do demonstrations for
    you in your office for your staff.
        Mr. Warren. So to hit your point about interoperability,
    top question was with whatever system DOD purchases, is
    interoperability guaranteed?
        DOD, no matter what system is bought, the requirement to
    maintain the interoperability that we have accomplished will
    continue. So we talked in prior hearings about a tool called
    Janus, which today, allows us to look at the DOD record and the
    V.A. record in the same screen simultaneously. So that
    interoperability, the ability to see the record in the care
    setting is happening today.
        Mr. Bishop. May I just interrupt you for a second? Didn't
    we in Congress, both the authorizers and the appropriators,
    direct DOD and V.A. to use one system, as opposed to two
    systems?
        Mr. Warren. So the interoperability in terms of the
    information sharing and doing, we are doing that using the same
    services. Both of the departments approximately 2 years ago--
    and I believe we had a joint hearing. I think it was the
    largest hearing I had ever been in, with 50-plus members.
        We talked through how the mission differs between V.A. and
    DOD and drove DOD to a decision in terms of buying an end-to-
    end system with a logistics tail, and that we would continue to
    work with the VistA system, which is a veteran-centric
    solution, and keep evolving it forward.
        Mr. Bishop. It is my understanding, though, that the system
    that you are using prohibits the manipulation of the data. So
    basically, it is viewing only. So it is not really
    interoperable, because, you know, a doctor at V.A. can't
    manipulate the information there, so that is not very helpful
    in what we are trying to get to. And we really instructed both
    DOD and V.A. to have one seamless system.
        And of course, this was before the Secretary's tenure, both
    departments seemed to have backed off from that and just said,
    ``Well, we wanted interoperability.''
        But it just makes no sense to me. And I have continued to
    really labor over the question of why it is that DOD and V.A.
    want to have stovepipe systems that is just going to allow them
    to view it.
        Mr. Warren. If I could, the viewer is to show the ability
    to view the data. There is a key point that we need to make
    sure we lay out there.
        If you look at the DOD side with respect to care, the
    majority of their care takes place outside of their health care
    delivery system--it will also take care of--it will be given
    outside of whatever their new system is.
        On the V.A. side, with the third-party care we have been
    giving, as well as what the Choice Act will be doing, a large
    amount of our care will also be outside of that health care
    system. Our biggest challenge is how do you move the data
    between different systems? How do you present it up in a care
    setting?
        Janus shows that you can do it. The data gets translated so
    it is the same. All Janus did was to show that you could do it,
    yes, in a read-only. Right now, the enterprise health
    management program, which is--in San Diego, moves it to the
    next step, which is the ability to go in--
        Mr. Bishop. Why couldn't both departments have one system?
    And if you have outside care, have the outside providers
    certify it to utilize and to enter that system with secured
    access so that only people who are authorized can enter the
    system? But if you have one system, everybody is going to
    access. It is simple.
        Mr. Warren. Sir, I wish it was that simple. When we talk
    about health care delivery, the viewer is how the clinicians
    interact with the data. But the systems we are talking about
    are more than just the viewing of the data. It is the pharmacy
    system, it is the immunization system, it is all of the other--
    --
        Mr. Bishop. I understand that.
        Mr. Warren [continuing]. A medical center.
        Mr. Bishop. I understand that.
        Mr. Warren. So buying one big system that does all that
    stuff, if you go look at the national health service in the
    U.K., they showed that one system could not do all that stuff
    across all those different places.
        And so what is key is how do you make sure the data moves
    between the systems, not just V.A. and DOD--in a way that
    clinical care can take place. And I believe that is the path we
    are on, and we have been able to show that we can accomplish--
    but glad to come and sit down more, walk you through and show
    you how those systems are working together, and how the data is
    formed.
        Mr. Bishop. I am just not convinced that the technology
    can't be fashioned to accomplish that. But my time is up, and I
    will come back a little later.
        Mr. Dent. Thank you. Thank you, Mr. Ranking Member. And I
    am sure there will be more questions on that particular topic.
    Mr. Rooney.
        Mr. Rooney. Thank you, Mr. Chairman.
        I appreciate, Mr. Secretary, our visit yesterday. And I
    appreciate the spirit of the other testimony that we have
    heard. You know, it is okay if you speak too loud, especially
    with issues that frustrate not only members of this committee,
    your agency, as well as the veterans and the people that we
    serve. Certainly, South Central Florida has its share of
    retirees and veterans.
        One of the things that I was most impressed with, Mr.
    Secretary, when we visited was the kind of background that you
    have, and the business acumen that you bring to the table. And
    I think that when people read your resume and get to know you,
    not to say that previous secretaries haven't been able to
    accomplish what they set out to do, but the fact of the matter
    is, we are still talking about a lot of the same things that we
    have been talking about since I got to Congress 6 years ago.
        You know, as Mr. Bishop alludes to, one of the big
    frustrations for me, as a veteran myself, is when you join the
    Army and things are kind of prescribed for you, and you are
    sort of told where to stand, what to say and what to do, and
    then when you get out of the Army, and you kind of hear this,
    ``Well, you know, the orders for the prescriptions aren't
    exactly the same,'' or, ``We are just getting around to our
    computer systems being able to communicate and understand each
    other,'' that is the kind of thing that when you join the Army,
    or you join one of the other branches, you assume are already
    taken care of. And when you find out that they are not, I think
    that that is the most frustrating thing.

                       FRUSTRATIONS AND FUTURE INNOVATION

        So my question revolves around your background and some of
    the things and the frustrations that we have heard. You don't
    have a lot of time in this job, I assume. And what time you
    have here with being a former CEO of a major company, what do
    you honestly think that you are going to be able to accomplish
    for veterans? What kind of innovation?
        I have a question, drafted out here for me about VSOs and
    our local counties that want to be able to be more active in
    screening, and things like that, at the county level. Maybe
    that is part of it. And you talked yesterday about, you know,
    consolidation of some of the people that are doing the same
    job. And that is all great.
        But I think that you as a spokesman, getting out there and
    showing the kind of frustration that we have heard, the
    American people were responding to me like, ``I like that guy.
    I agree with him. He is a CEO. He is not,'' you know, no
    disrespect again to former secretaries, but what can you--what
    has been your biggest frustration? What kind of innovation do
    you think you will be able to bring to the table so 6 years
    from now, this committee isn't still talking about these same
    things, like prescription orders aren't marrying up, and
    computers aren't talking to each other? So if you could talk to
    that, I would appreciate it.
        Mr. McDonald. First of all, Congressman Rooney, thank you
    for the question, and thank you for your service. Everything we
    put together, we are not looking at as a time-bound exercise.
    But I would hope that everything we have talked to you about in
    terms of MyVA, the reorganization we are talking about, I think
    we can certainly get done over the next couple of years.
        My biggest frustration from the very beginning was the lack
    of focus on the veteran. It was a sense that we were an
    organization, as I went around--and I have been to over 100
    sites now of V.A.--employees were telling me they felt like
    they were prisoners of a system that they couldn't change.
        The single message I am giving employees every time I go
    somewhere and I do a town-hall meeting is, ``No, this is your
    V.A., too, and you can change it.''
        I have embraced union leadership, 65 percent of our
    employees are union members. This leadership team, this group
    of employees, is going to change the V.A., is going to put the
    veteran at the center of everything we do.
        My first national press conference, which I think was in
    September, I gave out my cell phone number nationally. It is
    available on the Internet. And I would like members of Congress
    to do the same.
        And I get calls every single day from veterans. And I like
    that, because I am able to figure out what is going on. We
    stood up a team of people to help me with it, but I like to
    answer the phone.
        I did that deliberately, because I wanted to demonstrate to
    everybody during a time of crisis, it is normal organization
    dynamic, and normal human dynamic, that people turn inward, and
    in a sense become more bureaucratic, and worry about their own
    survival.
        What we need to do is turn outward, care about veterans,
    embrace veterans. And I see those changes happening right now.
    I hear it on my phone at night when I am able to answer the
    calls. And I get a lot of letters. And we respond to every
    single one of them. That is a big change.
        Ms. Hickey. So, Congressman, first thing I will ask you as
    a veteran, if you have your eBenefit account, if you don't, I
    would like to come over and help you get it. But you don't need
    me to, because we have built a complete online capability from
    a veteran at 2:00 in the morning, if you are reading a long
    bill, and you decide you want to file a claim, you can go
    online, you can file your claim online.
        You can upload your own medical evidence online, and your
    three-and-one computer, turn it into a PDF and give it to us.
    You can find out the status of your claim online. And it all
    goes now into the VBMS system where the digitization has
    occurred that was spoken about earlier. And the decisions can
    be projected to you when they come out online.
        All that has been built in the last 3 or 4 years while we
    have been transforming VBA. While I will fly on the airplane
    while we were building it--sorry, former airmen as well, so I
    am going to use that analogy. So we have fundamentally changed
    VBA already, but we are not done yet.
        There are a lot of things in this budget that we need to
    fundamentally change three other parts of a benefit allowance
    to a veteran. And I will tell you straight up, appeals. Appeals
    are wired in law, worse than tax code.
        There are two opportunities for you to help us with
    appeals. One is change the law, and there doesn't seem to be a
    lot of appetite for it. But I have submitted all the
    legislative proposals.
        And the second is you have got to give me a whole lot more
    people to do that work. I have got no other way to do that
    better. Law or people, authorizers or appropriators. I don't
    care. What I care about is veterans getting a better answer.
        Mr. Rooney. Thank you.
        Mr. Dent. Thank you. I just want to point out for the
    record, I made that particular quote about the rumors of my
    death being greatly exaggerated. I attributed it to George
    Bernard Shaw. I believe it was Mark Twain. So with that, I
    recognize Mr. Price.
        Mr. Price. Thank you, Mr. Chairman. Mr. Secretary, I want
    to welcome you and your colleagues to the committee. We
    appreciate the energy and determination you have brought to the
    V.A. in a short period of time.
        And I appreciate the background you bring to this; the
    business background, the military background, and I should say
    also the educational background, because I am well aware of the
    value you have rendered to Duke University's Fuqua School of
    Business, as one of their major advisers.
        A lot of handwringing today, as there always is, about the
    constraints we are operating under. Maybe we need to remind
    ourselves that these are not written in stone. They are the
    results of very explicit political failings.
        The Budget Control Act still hovers over us, and haunts the
    work of this subcommittee with its centerpiece of
    sequestration. Sequestration, however, is self-inflicted
    damage. It was not supposed to occur. It is the result of a
    very specific failure to address the main drivers of the
    deficit; tax expenditures and entitlement spending.
        This body, having failed to address those, has fallen back
    again and again on appropriated spending. So we need to do more
    than just decry this, we need to change it, need to take
    specific steps to overcome it, that really would mean a
    comprehensive budget deal that deals with the main drivers of
    the deficit.
        But if we can't get that, we at least need another year-
    long budget deal, a la Ryan-Murray, to get us off of
    sequestration and with some numbers we can work with here. And
    this applies of course to this subcommittee, and probably even
    more to other subcommittees.
        So the resource constraints are serious here. And yet, a
    lot of the problems that you have identified call for
    additional resources, particularly personnel resources. And
    that is what I want to ask you about very specifically.
        We are all aware of the unacceptable wait times for primary
    care, mental health, patients at various facilities in my
    district, around the country. We know that this is linked in
    part--this is what I want to ask you to assess--linked in part
    to a lack of primary and mental health care providers in the
    system, particularly at more rural locations.
        So I want to give you a chance to address that problem
    system-wide. Is the lack of manpower, womanpower, a primary
    obstacle to achieving acceptable wait times, and adequate care
    in general? I know you visited a lot of medical schools,
    including Duke University, I would say. Glad you came there.
    You spoke to medical students about coming to work for the V.A.

                      HEALTH CARE STAFFING AND RECRUITMENT

        How did you do? How are you doing? What can you do to
    recruit the best and brightest young people in the medical
    field? Where are the most serious shortages? What specialties,
    what areas of practice?
        And then how much is this a matter of compensation? What
    else is going on here? What is your assessment, having looked
    at this, I know, very carefully? What is it going to take
    besides an adequate appropriation to solve the problem?
        Mr. McDonald. Thank you, Congressman Price. Great
    questions. Staffing is a big issue for us. Roughly, we are
    short about 4,000 physicians and about 10,000 nurses.
        I have been to roughly over a dozen medical schools. Duke
    University was the first medical school I visited. And we are
    competing against some of the for-profit systems in the country
    to attract the best and brightest doctors and nurses we can
    find.
        One of the first things I did as Secretary was to raise the
    salary bands of our doctors in order to pay them competitively.
    That has helped our recruiting effort. And if I look over the
    last nine months, we have hired roughly 900 doctors, net-new.
        So in other words, we have had some leave. Our retention
    rate is very good. We have had some leave. But we have got
    roughly 900 more new doctors. And that is good. We have hired
    over 1,000 nurses.
        So that has been very helpful. But while getting the
    providers is helpful, and paying them competitively is helpful,
    the other thing I am up against is just in a sense the aura
    that exists in this country that V.A. is somehow a terrible
    place to work. And I am pleased that the Chairmen and Ranking
    Members of our two committees, House and Senate, Veterans
    Affairs committees, have come to V.A. We have town-hall
    meetings, national town-hall meetings, so that the members of
    the committee could express themselves to the employees about
    how much they respect what they are doing, and how important it
    is.
        The other barrier we face is the infrastructure. We have
    11.5 percent roughly female veterans right now. It is going to
    grow to 20 percent. And our buildings are over 50 years old.
    They were built at a time when you had one gender of bathroom,
    where you didn't have space for women's clinics. And one of the
    things we know about women veterans is they prefer to enter the
    building and exit the building in a different place than the
    men. So we are in the process of trying to retrofit those
    entries. But that is why our construction budget is so
    important.
        One last example, and I will end, is part of the problem in
    Phoenix that we talked about was providers, was the doctors and
    nurses. When I went there, we needed 1,000 new people the day I
    was there. That was right after I was confirmed.
        But one of the problems that didn't get much publicity, is
    we only had one clinical room for each doctor. And the average
    doctor has three clinical rooms; one where the patient is
    getting ready, one where the patient is being examined, one
    where the patient is getting ready to leave. So this is a
    fundamental issue.
        Last point is, I talk a lot about V.A. being the canary in
    the coal mine for American medicine. Our shortage of primary
    care physicians, our shortage of mental health professionals,
    is a national shortage. And that is why I go to the medical
    schools, is to try to increase the throughput, and increase the
    residency, so we can get a greater number of mental health
    professionals and family care physicians.
        Dr. Clancy. Just a couple of other points, because I know
    that you expressed a particular interest in rural health care.
    One of the areas I think where we are doing very well is in
    virtual care, particularly telemental health, which frankly,
    makes it very--much, much easier for some veterans who don't
    always find any complex facility all that easy to navigate, and
    so forth.
        We are doing enough of it that we are starting to talk now
    about whether we actually need to train and hire people who are
    virtualists. There are companies that do this now. We could
    actually have an internal group that does that.
        The other part--and I just want to thank you and your
    colleagues for--is the loan reduction program. We now have, for
    the first time, the opportunity to pay the lenders back
    directly. What we have been doing before, if you think about
    how indebted many of these students emerge from post-graduate
    training with, is when they paid, then we reimbursed.
        So if they fell behind, they didn't get the reimbursement.
    You can see where this gets into a kind of vicious cycle. Now
    we can pay the lender back. So not only can we offer that to
    new people coming in, we can actually help some of our own--it
    is both a recruitment and a retention tool, which I think is
    going to be phenomenal.
        And ultimately, the mission is what really attracts people.
    You ask, though, what is the hardest? I would say primary care
    and mental health. Both, as you probably are aware, are not
    incredibly well-paid specialty areas. Both were in stiff
    competition with the private sector.
        You probably saw the report yesterday from the Association
    of American Medical Colleges I think saying we are short 90,000
    physicians or something along those lines. But that is what we
    are working at.
        The point about spaces, we actually do have a tool now to
    assess productivity so that in addition to broad messages about
    we need space, people, and so forth, we can actually help
    facilities figure out what is the rate limiter for them. Is it
    really more the space, the people, and so forth?
        Mrs. Roby. Thank you, Mr. Chairman, and thank you for being
    here. I do want to echo the sentiment of my colleague, that we
    appreciate the time that you have taken to meet with us prior
    to today's hearing.
        But I think a couple of the points that were discussed are
    worth mentioning again for the benefit of those that are in
    this hearing room today, and for the American people, and for
    my constituents in Alabama, too, who have suffered. These
    veterans have suffered horribly at the hands of bad actors.
        Mr. Chairman, Central Alabama V.A. Health System is one of
    the worst in the country. We had one of the first directors
    actually removed under the new law that we passed because his
    behavior and the decisions that he made and the culture he
    created was so disastrous and horrible, that he was actually
    removed.
        And you of course know all of this. And you are keenly
    aware of the situation. I appreciate Sloan Gibson, Deputy
    Secretary, for his presence in Alabama consistently working
    with my staff to provide us updates.
        As I told you, Mr. Secretary, last evening, that I am
    looking forward to the day when I can stand with you behind the
    podium and celebrate the successes of the V.A. But we are not
    there, and you know that.

                         ACCESS TO CARE--THE CHOICE ACT

        And there is still a real distrust, because the numbers
    that we were presented as it relates to access to care, were so
    false and wrong. So we will continue to work with you on that.
        I do think, as you mentioned, that you are dealing with a
    huge bureaucracy, and feeling your way through it, that there
    are some real solid ideas here that you have heard from the
    chairman and others throughout this as it relates to access to
    care. And we know the V.A. does a lot more than just that. But
    for right now, we have a lot of sick veterans that need access
    to care.
        And for me, in light of what took place in Southeast
    Alabama, I really want the focus to be down there on how do we
    get more veterans access to good-quality care in a timely
    fashion, and both with Choice--the Choice cards and with PC3,
    Patient-Centered Community Care, which is a huge priority to
    me. We have wonderful private medical facilities in Southeast
    Alabama, where these veterans could access care immediately,
    rather than having to go to Atlanta, or some other facility.
        So I want to continue to be helpful in any way that I can,
    to push these programs, that this committee could be helpful in
    ensuring that we allow veterans to have access to outside
    providers. And then we have all these aging facilities that
    need repair how do we figure out a way to find the cost savings
    in bricks and mortars, and use that money for our veterans to
    access care?
        So I know these are all priorities of yours, because I have
    heard you say that. The one thing that I did want you to
    elaborate on is the authority to reallocate the Choice funding,
    as you have stated, that you have been mischaracterized on what
    your ideas are.
        One thing I am concerned about is that Congress gave the VA
    $15 billion for Choice. And you were saying that there is
    uncertainty right now in knowing how much access veterans and
    how many veterans will utilize the Choice program.
        So if we could just talk about that in a little bit more
    detail, because I really think that this is a huge part of the
    solution to getting towards this hybrid system that would allow
    our veterans to have good-quality health care.
        Mr. McDonald. I was--one of my surprises when I came back
    to government was the inflexibility of being able to serve
    customers. I am used to the private sector. I am used to, if a
    customer wants to buy Tide, we have Tide for them. If they want
    to buy Dash or whatever, we have Dash for them.
        The inflexibility of moving money from one line item to the
    other, despite the fact that the consumer, the veteran, has a
    choice, doesn't make much sense to me. It is analogous to
    having two checking accounts at home; one is for gasoline, one
    is for food. And you can't move money between the two. The
    price of gasoline falls in half, and you are hungry, you want
    to buy food. But you can't do that.
        Because of the Choice program, we have given the veterans a
    choice. You, the Congress, have defined by law the benefits
    that veterans get. I am trained to execute and provide those
    benefits, but yet, you control both the benefits they get, and
    you control the money I have to spend to deliver those
    benefits. I am kind of a prisoner of the system.
        All I was saying with the request for flexibility was--and
    I am happy to come back with you at the appropriate time--as
    these programs, as we begin to integrate these programs with
    the only intention of serving veterans, let's make sure we have
    a discussion that we have the money in the right place, and
    that we have enough money in the right place, that we can
    provide the veterans the care that the laws that we pass said
    they deserve.
        I just want to make sure we have that conversation, because
    I can't predict the free market with 100 percent certainty.

                                 40 MILES RULE

        Mrs. Roby. Sure, I appreciate that. Mr. Chairman, one quick
    thing about the 40-mile rule. I am concerned that the
    definition is not clear about the distance driving, or as the
    crow flies. What do we need to do to modify language so that we
    ensure that it truly is for those that are 40 miles away.
        Mr. McDonald. When the law was passed, and the way the
    Congressional Budget Office scored it, it was 40 miles
    geodesic, meaning as the crow flies. We have been given
    enthusiastic support by both of our authorizing committees to
    take another look at that 40-mile criteria.
        We are in the process of doing the review right now. We are
    going to come back to the Congress with a reinterpretation in
    an effort to open the aperture. We have had roughly a half a
    million calls to our call center about the Choice Act. But
    only--that has resulted in only about 30,000 appointments or
    so. And about half of those are because of 40 miles, about half
    of those are because of 30 days, the 30-day limit.
        That is just not a big enough take rate. So we are trying
    to do a better job marketing. We are contacting veterans. We
    are also running a public-service ad I talked about. We want to
    see how far we can push it.
        At the same time, we want to, as quickly as possible,
    redefine that 40-mile limit, which is the biggest barrier, and
    come back to members of Congress with that reinterpretation.
        Mrs. Roby. Okay, great. Thank you. I yield back. Thank you,
    Mr. Chairman.
        Dr. Clancy. Can I just add one thing? Congresswoman, I just
    wanted to thank you for your commitment to, and persistent
    attention to the Central Alabama facility. So today, our top
    analytics team is visiting with them, both helping them
    understand their data, which I think has been a big, big change
    for us, this relentless focus on how we are doing, and also how
    to deploy tools that we have built, so that they can identify
    some of the problems that occurred there at a much earlier
    stage. So just wanted you to know that.
        Mr. Dent. I would like to recognize Ms. Lee at this time.
        Ms. Lee. Thank you very much, Mr. Chairman. Good to see
    you, Mr. Secretary, Dr. Clancy, Secretary Hickey.
        Now, I tell you, a couple of things--I have to preface the
    question and statement. First of all, I am the daughter of a
    veteran. My dad died several years ago. So as the daughter of a
    veteran, I know the V.A. system very personally. And I just
    want to say to the three of you that I think you made a lot of
    progress. I have had to deal with the V.A. on a personal basis.

                     OAKLAND REGIONAL OFFICE CLAIMS BACKLOG

        But not enough yet. And I have a lot of concerns, very
    grave concerns regarding the funds that have already been spent
    on updating our veterans claims backlog. Again--and I think
    Secretary Hickey--we have met several times with the California
    Delegation as it relates to the Oakland V.A. Regional Office,
    which is in my district.
        And we have seen money appropriated to fix the backlog. But
    it still remains--and veterans still, who deserve their
    benefits, they are still dying before they can receive their
    benefits.
        And I want to read to you just a brief excerpt from--now
    this was February 25, 2014, just recently, CBS News report.
    Okay, and I want to make sure that this is accurate or not. I
    hope it is not.
        ``Last week, the V.A. Inspector General confirmed that
    because of poor recordkeeping in Oakland, veterans did not
    receive benefits to which they may have been entitled. How many
    veterans is not known, because thousands of records were
    missing when inspectors arrived. The V.A. declined CBS News'
    repeated interview request, but it did admit to widespread
    problems in the handling of claims, but blamed that on the
    transition from a mail basis to the new electronic system. The
    V.A. said in a statement, `Electronic claims processing
    transformed mail management for compensation claims greatly
    minimizing any risk of delays due to loss and misplaced mail.'
    ''
        Now, there have been several whistleblowers, of course, out
    of Oakland. And in this report that CBS presented February
    25th, there was one individual who said that the V.A. took the
    files, put them--told them to put them in a file and stuff them
    away.
        There were 13,000 veterans begging for help. When this
    employee raised her concerns, she said she was taken off the
    project, and then this past summer, they found a cart of these
    same claims, and they were ignored again.
        Can you explain this to me? Is this accurate or not? And
    what is taking place with the Oakland V.A. office in the
    backlog?
        Ms. Hickey. So I don't know what station Mr. Paul Harvey
    used to talk about. But there is a much bigger rest of the
    story that I would love to be able to present to you.
        First of all, the 13,184 pieces of paper they found were
    duplicate copies of an informal claim. It isn't even a real
    claim yet. It is a duplicate copy of an informal claim. They
    were in an old process that used to be done in VBA long before
    I got here. They used to make copies of things to keep track of
    them.
        And so those were the 13,184 pieces of paper put in the
    drawer. At the same time, those same 13,184 veterans came in
    with their formal original claim. We worked those all as they
    were coming in. They were not set aside.
        Those 13,000 copies were sitting in a drawer. The originals
    were being worked by the employees, the hardworking employees
    in the Oakland Regional Office, or as you well know, because we
    have talked about this, many other hardworking employees across
    the nation who we brokered out, or sent out that work. So no,
    no veteran was waiting on those 13,184 while they were sitting
    in a drawer. That was a copy.
        Second thing I would share with you is we did not misplace
    any of those 13,184. They were in that drawer. We brought in--
    we actually, by the way, discovered, because I sent in a help
    team to help Oakland. And when we found them, the employee did
    exactly the right thing; raise the issue and said, ``There are
    13,184 in there. We need to do something.''
        They told us about it. I called the I.G. and said, ``Full
    transparency. I want you to get in there and make sure what is
    going on with those 13,184,'' and they did.
        We set up special teams that took every one of those copies
    against the original file that we work--we had already worked.
    And we matched every single one twice, a full 100 percent
    review of every single one against those copies of those
    informal claims to make sure we had it right.
        At the end of the day, we completed those two complete
    looks last September, on the 5th of September, and we found in
    the process of reviewing, there were about 403 to be exact,
    where we said, ``You know what, we probably could have made a
    better decision on those 403 claims than we did when we worked
    them.''
        And so we made some adjustments. All of them are complete.
    None were missing. No malfeasance in that whole effort. No
    intention to hide anything. We just had those 13,000 copies
    over there.
        That practice has been discontinued. That practice was not
    a practice by the new director who was out there, who is doing
    a terrific job. And today, Oakland, by the way, backlog is down
    70 percent from when we were visiting when it was so bad in
    that same 2012-2013 time frame. They are doing much better.
    Their quality is up substantially. All the investments you
    helped us do to make them better are seeing good fruit.
        Ms. Lee. I appreciate that. But then maybe you need to call
    CBS and clarify this, because this report is all over the
    place. Also, in it, it indicates that the V.A., the Inspector
    General, mind you, confirmed that because of poor
    recordkeeping, and Oakland veterans did not receive benefits to
    which they had been entitled, and this is the I.G. quote. So
    you need to clarify that I think, because if in fact that is
    not the case, you know, we need to know that. The I.G. needs to
    know that.
        Ms. Hickey. I think the I.G. has worked very hard on this.
    And I really appreciate their effort. They are looking at lots
    of things with us right now. And I think their point is well
    taken.
        As you well know, we weren't doing a very good records-
    keeping job during that whole time where we were not in great
    shape in Oakland. I think that is exactly what they are
    pointing out to us, and the fact that we had a drawer of copies
    is still inappropriate, and not good recordkeeping.
        We have resolved that. We have fixed that. So I think in
    this case, the I.G. was right. We shouldn't have had those
    copies just sitting out there in a drawer somewhere. We should
    have properly disposed of them when we were complete with the
    claim.
        Ms. Lee. So do we know how many veterans should have been--
    should have received their benefits that did not receive their
    benefits?
        Ms. Hickey. Of the 13,184, all of them got their claims
    worked as we received them. When we did the reviews, we found
    about 400 where we went, ``You know, we could have made a
    better decision there.'' But that is the 400 I am talking
    about.
        Ms. Lee. Okay.
        Ms. Hickey. They had received a decision already, and they
    had received benefits already. We were able to up their
    benefits.
        Ms. Lee. Okay. Thank you, Mr. Chairman.
        Mr. Dent. Mr. Fortenberry.
        Mr. Fortenberry. Thank you, Mr. Chairman. Mr. Secretary,
    good morning. Welcome. Thank you all for your testimony this
    morning. I think it should point out, in light of all of the
    challenges and difficulties you are facing, Nebraska, by
    certain measures, has had one of the best outcomes for service
    to veterans, particularly in terms of the measure of process,
    time for processing claims.
        I think we were one of the states that actually took on
    additional caseloads when other systems were under such severe
    stress. So I am proud of that. It doesn't diminish, though, the
    need obviously to continue to work aggressively across the
    nation. But to the degree that we have served as a valuable
    template, service delivery, we are happy to be in that
    position.
        Mr. Secretary, I really do appreciate your freshness of
    approach, and your creative commitment to trying to rethink
    some of the architecture in order to get us all to the goal
    that we share; the highest and best quality of care for our
    veterans.

                        ENHANCED STRATEGIC PARTNERSHIPS

        In that regard, I want to bring up a specific example from
    home. Omaha has a difficulty with our hospital, as you are
    quite aware. Over the years, based upon a priority list, which
    is not necessarily the list of funding priorities, but is
    listed as a priority, which is to me, a peculiarity.
    Nonetheless, it has floated from 30 down now to 10, 19, all
    over the place.
        The broader point being to--maybe that is based on
    analytics, maybe that is based on more subjective criteria. I
    just don't know. The broader point, though, is enhanced
    strategic partnerships are the way forward. It is the model for
    the 21st century of veterans care.
        If, as you are--have been invited, and as I know you are
    working to commit to coming to Omaha when you do, you will be
    warmly received by creative community partners who are ready
    and capable to think about, again, an enhanced strategy that
    looks at a new model by which we can build out a potential new
    facility, if that is what is necessarily decided upon, as long
    as we have the flexibility for creative financing, or using
    existing structures that could be rehabilitated, or partnering
    with the excellent medical facilities through the University of
    Nebraska Medical Center, a great medical center, another five
    facilities that are already there.
        A quick anecdote, I have had the American Legion of
    Veterans of Foreign Wars in my office this week. And the
    committee has heard me talk about something, and you have as
    well, called ``Veteran Certified Facility.''
        And what I think this does is give us the ability to carry
    forward this important legacy of having the V.A. in charge of
    veterans health care, but maybe embedding that within other
    systems, as long as we have oversight authority over us, so
    that the quality of care is delivered. But it gets us out of
    this problem of putting money under the mattress for years,
    sometimes decades at a time, in order to build out a facility,
    because we simply have been doing it that way for the last 100
    years.
        The next 100 years, though, we can take that money that we
    do have, leverage it in strategic partnerships, and assure the
    veteran is getting the highest possible care, still while being
    under our authority. That is the new model and the way forward.
    I willingly commit our community to be your model template in
    this regard. I think--I don't think that is an overextension of
    the desires of the community that I represent.
        But I would like to work with you, whether it means new
    legislative authority, or exercising the current authorities
    you have, or creating and enhancing those strategic
    partnerships, and labeling something like a veterans certified
    facility. I would like you to respond to that, please.
        Mr. McDonald. Well, we agree with your comments. In fact,
    of the five objectives of MyVA, I think maybe perhaps one of
    the biggest ideas, other than being veteran-centric, is
    strategic partnerships. We are working very hard to establish
    strategic partnerships.
        And when I say that, I include the community. And I would
    just point to the example of we have a problem with
    homelessness. We are trying to drive down homelessness to zero,
    virtual homelessness of veterans to zero by the end of this
    calendar year. Yet, we have had a lawsuit going on in Los
    Angeles for 4 years that stopped us from doing what we needed
    to do to use 380 acres that we had there for homeless veterans.
        I got involved through a friend in Omaha. I found out who
    the law--who was behind the lawsuit.
        We brought the community together, including the mayor and
    everyone else, and members of Congress. And we have come up
    with a solution and a memorandum of understanding, and a plan
    forward to eliminate homelessness. So, I want to do the same
    thing in Omaha.
        Mr. Fortenberry. Perfect, Mr. Secretary, we need to get out
    of this trap of this priority list, which has, again, a model
    submitted a long time ago, but is not enhancing the opportunity
    to leverage the strategic partners and actually give the
    service that veterans need and in a quicker fashion.
        We have got to eliminate this construct, because we are
    just carrying forward--as Sam Farr was saying earlier--we carry
    forward in time legacy systems--in Appropriations, somebody
    gets trapped into whether or not we are going to plus up the
    same system or cut it back, rather than creating new
    architecture that actually makes sense in terms of service
    delivery.
        Does that mean my time is up? I didn't realize I talked
    that long.
        Thank you, Mr. Chairman.
        Mr. Dent. Thank you, and you did.
        At this time I would like to recognize the gentleman from
    Ohio, Mr. Joyce.
        Mr. Joyce. Thank you, Mr. Chairman. You had just answered
    some of the questions I had and while I was listening to this
    discourse of other questions that were asked, I would like to
    follow up on the distinguished gentleman from Florida, Mr.
    Rooney's question about bringing your extensive business
    experience to the Department of Veterans Affairs.
        What can Congress do to help you?
        Mr. McDonald. I think the biggest thing Congress could do
    is provide me the flexibility a business leader has to get the
    job done. Let's agree on what the task is. And then let's have
    the flexibility to get it done.
        Budget line items, where money can't be moved in a free
    market economy. You know, arguably, the V.A. is the largest
    business in government. We are the second largest department in
    government. We are the largest health care system in
    government. At one time--and this goes back to the
    congressman's recent comment--many of the things that we do are
    archaic versus today. Today, veterans have choice. They never
    had choice before. Yet, our laws and our budgetary processes
    are all about an inflexible system, an inside system.
        So, no criticism here. I just think we need to move forward
    and move toward the end game, which is going to be strategic
    partnerships. It is going to be a combination inside V.A. care
    and outside care. But we have to have the budget to do that. We
    have to have the flexibility to do that. And all of us focus on
    the task of providing the care to veterans.
        Mr. Joyce. I appreciate that and following up on his
    questions, too, it would seem to me from my visits that we have
    legacy systems that are putting band-aids on a system from the
    1970s.
        Would it make more sense to start a system that is 2017 and
    start working towards that one and eventually discard the
    legacy system? Wouldn't there be some cost benefit to that?
        Mr. McDonald. One--that is a great point. One of the things
    that we are doing--and this is particularly through the health
    system--as you have heard from Alison's comments about the
    benefits, she and her team have done a great job bringing this,
    modernizing this, digitizing this, and getting this going.
        Admittedly, we have more work to do yet, but we are on the
    way.

                            BLUEPRINT FOR EXCELLENCE

        In the health care system, we have got some more
    fundamental work to do. Under Alison, under Carolyn's
    leadership, we put together something called the Blueprint for
    Excellence, which is a 10-strategy plan of returning the health
    care system to preeminence in the country. That plan talks
    about strategic partnerships. It talks about a hybrid system.
    That is the vision that we have.
        As we continue to work, we will get more and more concrete
    on what that vision looks like. And I think that your point is
    exactly right. Rather than trying to take an operating room
    which needs to be 50 percent bigger, and trying to do that,
    maybe we go to an operating room in a university that we have
    an affiliation with. We have got great affiliations with the
    best medical schools in the country.
        So, there is a lot that can be done. And we are going to be
    making that vision more and more concrete over time.
        Mr. Joyce. And I wish we would continue to discuss the ways
    we can help you get to where you need to go. Because it is
    important, and Madam Under Secretary, you brought up where you
    had a strong Irish voice--keep it up.

                                VETERANS COURTS

        I know the frustration as a D.A. of 25 years, then you get
    to Washington, D.C. and it operates completely different and
    you wonder where you are sometimes. But there are ways to
    streamline the process, and it seems, we're in trouble because
    of the antiquated system and that is just not acceptable. And
    the other thing--you had answered it in the last question too--
    as D.A.s, and I know with friends who are doing the same thing,
    I tell you it breaks your heart when you have to exercise
    prosecutorial discretion because veterans do something so they
    can get put in a place where they receive three squares and a
    roof over their head.
        It is wrong and I know you have many programs to address
    that. But whatever we can do to make sure not one veteran is
    homeless, please be loud, be clear, and let us get that help to
    you.
        Mr. McDonald. You are absolutely right. Incarceration for a
    veteran is a ticket to homelessness. And so, veterans courts--
    it was mentioned earlier in one of the members' testimony--
    veterans courts are a great way to deal with this. We are big
    advocates of veterans courts, we support veterans courts.
        I spoke at the Harvard Business--Harvard Law School about
    veterans courts. And we want to do everything we can to put
    veterans courts in place in every state. Because if we keep
    veterans out of jail, we will keep them out of being homeless.
    It is a great point.
        Mr. Joyce. Thank you very much for your time here today.
        I yield back.
        Mr. Dent. Thank you for respecting the time on that.
        That ends round one of the questioning; we will move into
    round two.

                         V.A. AND DOD INTEROPERABILITY

        I want to try to conclude this hearing by lunchtime, by
    noon, again. So, Mr. Secretary, following up on Mr. Bishop's
    comments, and also Chairman Rogers about the interoperability
    to help work through the records.
        Obviously you haven't been here for the frustrating
    experience of watching DOD and V.A. develop a single integrated
    health record then spend years and hundreds of millions of
    dollars on it, only to throw in the towel and go down two
    separate tracks.
        DOD will soon award a contract for a new electronic health
    record. The V.A. is working to modernize its existing VistA
    health records. Both departments are sort of committed to
    making their records interoperable with the private riders that
    both active service members and veterans use.
        I also want you to know that members of the House
    Appropriations Committee--we are strongly in favor of the
    integrated health record. And we are determined that the two
    records be interoperable. Just want to--again, hear your
    assurances that this is going to happen.
        And, moreover, I want to talk a little bit about the money
    side of this. Congress provided $344 million for the V.A.,
    electronic health record for fiscal year 2015. And despite all
    the increases elsewhere in the budget, you are requesting $111
    million less than for 2016.
        You indicate that less funding is required because the
    transition from moving from a single to two interoperable
    records took longer than anticipated leaving carryover 2015
    funds. And that less 2016 funding better aligns with program
    requirements and workload capacity. The Committee certainly
    does not want to provide you with funding that you cannot use,
    but what does that say about your progress in modernizing
    VistA?
        Will you still meet your deadline of reaching final
    operating capacity for VistA evolution by 2018?
        Mr. McDonald. We are totally committed to maintain and
    making modern and useful our electronic health record. This has
    become even more important than it was before, because, as
    Steph alluded to earlier, we now have private sector doctors
    using our record.
        I went to the American Medical Association Convention last
    summer in Dallas. And I talked a lot about how do I get every
    doctor in this country using our health record.
        Our record is open source, which means it is free. Our
    record is crowd-sourced innovation, which means if a doctor
    uses our record and has an idea to improve it, we want that
    idea.
        I think there is a real opportunity here to make our
    records the world class record it can be. And so it needs to go
    forward to the private sector doctor and then go backward in
    DOD. So the interoperability is actually essential in both
    directions.
        Mr. Warren. Sir, to your question about the reduction in
    the 2016 request:
        It did take us longer when we moved from how we were doing
    a single record to how we are going to go forward, recognizing
    the sharing of information with third-party providers. So
    instead of asking for dollars in 2016 that we could not spend,
    we felt it was more appropriate to basically work off of the
    funds we carried over in 2014; the resources we received in
    2015. And that is why there was a reduction in 2016.
        We are still on track to make the interoperability
    commitments. In fact, that sharing of information, and again,
    Janus is just one piece of it--on track to meet that. And you
    will see a robust request for 2017 and 2018, as we pick back up
    the effort, again, work through the transition of reduction in
    2016 because we could not spend those resources. And in 2017
    you will see a robust request coming in.
        Mr. Dent. Thank you.

                           SUICIDE AND MENTAL ILLNESS

        Mr. Secretary, the recent Academy Award given to the
    documentary profiling the V.A. crisis hotline brought a fresh
    public spotlight on the tragic problem of suicide and mental
    illness and behavioral health among veterans that the V.A. has
    been battling for many years. In response to the problem over
    the years, the V.A. has increased its number of mental health
    practitioners, incorporated mental health services into primary
    care to reduce stigma, conducted research on effective
    treatments for service-related mental health issues and
    supported numerous outreach and prevention campaigns.
        Can you tell us what additional steps the V.A. plans to
    take to battle suicide and serious mental illness within the
    veteran population? I know that you plan to hire more than
    2,100 mental health staff through the Choice Act funding by the
    end of 2016, as an example.
        Mr. McDonald. The Clay Hunt Act was also helpful, and we
    are very thankful to members of Congress for the Clay Hunt Act.
    Because, as Carolyn said earlier, being able to repay student
    loans is an incentive to get more mental health professionals.
    And that allowed for a $30,000 repayment of student loans. It
    also allowed for more residencies, as I recall. And residencies
    becomes an issue.
        Medical schools will tell you, they can produce more
    graduates. But without the residencies, it doesn't help. So,
    that is very helpful.
        To me, the biggest thing we have got to do is outreach. We
    have got to find the veterans who are, for whatever reason,
    resistant to seeking that care. And I am very hopeful that with
    the ``American Sniper,'' being such a successful movie and with
    our Academy Award that we won for our ``dial 1'' documentary,
    that this is going to create more visibility in the general
    public and help Americans realize that if they see someone--a
    veteran who may need help, to let somebody know about it.
        We have a toll-free number that can be called, and we want
    to increase our outreach, both from veterans and from the
    general public and from family members, so that we can get in
    touch with these individuals, because we know if we get them
    into our system, that we can effectively treat them.
        Dr. Clancy. So one other point I would just make, Mr.
    Chairman, we take every suicide very, very seriously and almost
    personally, and in fact, we do what we call a behavioral health
    autopsy. That is to say, each case gets a very in-depth review,
    and the team has put together a database.
        What they are doing now is trying to identify how we might
    use all of the data from our electronic health records and
    other sources to identify those at highest risk and target the
    outreach that the secretary just mentioned.
        We think that there are going to be some early signals that
    we can be able to do that. It is a very, very difficult
    challenge but one that we are not letting up on.

                                   CHOICE ACT

        Mr. Dent. Very, very quickly--just quickly back to the
    Choice Act, Mr. Secretary, you are no doubt aware of the
    initial report on the Choice program the VFW organization
    released yesterday.
        The group surveyed their membership to judge how many
    qualified and were able to use Choice, although the VFW report
    acknowledges that the V.A. didn't have much time to get the
    program running, that the V.A. has been working hard to improve
    it. The results of that they reported were disappointing.
        VFW says that only 20 percent of veterans who live more
    than 40 miles from the nearest facility or who had to wait more
    than 30 days for an appointment were offered the Choice option.
        Almost all those surveyed who were not offered Choice said
    they were interested in obtaining non-V.A. care.
        Don't the VFW findings contradict your statements that not
    many veterans seem to be interested in using Choice to obtain
    non-V.A. care? My sense is many are very interested, just
    simply not eligible.
        Mr. McDonald. No, as I said, we would like to do more with
    the Choice program, and we want to make sure every eligible
    veteran is able to take advantage of it.
        I appreciate the VFW running that research. We sent out
    cards starting in November. The last cards went out in January.
    That research started in December, so--and was completed
    recently.
        So it is going to take time, but we are redoubling our
    efforts, as I said earlier, to make sure every veteran knows of
    their qualifications for the Choice program and every veteran
    can take advantage of it.
        We appreciate the VFW running the research.
        Mr. Dent. Thank you.
        At this time, I yield to Mr. Bishop.
        Mr. Bishop. Thank you very much, Mr. Chairman.
        I want to turn to some parochial issues.

                         GAS TO ELECTRICITY CONVERSION

        I have heard that some V.A. hospitals are looking at
    converting their energy supply to gas from electricity and
    understand that the Atlanta V.A. is studying a possible
    conversion.
        Apparently, any type of conversion could cost a significant
    amount of money in capital cost. What is the thought process
    and analysis of this decision?
        Mr. McDonald. I am not aware of that specific situation,
    Ranking Member Bishop, but I know from my private sector
    experience, I have converted different plants from natural gas
    to electricity and back and forth, or use co-generation. So I
    am assuming that the study would have to show a rate of return
    on that investment if we are going to make the capital
    investment.
        I can assure you that, as the Secretary, I would not make
    that investment if there weren't an acceptable rate of return
    from the American people. But we will have to dig into that
    specific example.
        Thank you.
        Mr. Bishop. Thank you.

                 MARTIN ARMY COMMUNITY HOSPITAL AND V.A. CLINIC

        During our last conversation, you mentioned that there has
    been 18,000 square feet of space at Martin Army Community
    Hospital that would be allocated for a V.A. clinic. There was
    to be an initial allocation, as I understand it, of 10,000
    square feet followed by 8,000 square feet a month later.
        As you know, this is something that I have been asking for
    years, a co-location with DOD and V.A. clinics. Can you provide
    me an update as to the status of the transition?
        Mr. McDonald. That is as much as I know is what you just
    said. We are in the process of making transition.
        And again, I think this is a good example of another
    strategic partnership, and that is a partnership with DOD. And
    we appreciate your comments and the fact that you have been
    looking for this.
        Caroline, I don't know if you have an update beyond that.
        Dr. Clancy. I understand that it is all on track, and there
    will be sort of a grand opening in May, but you better believe
    we will be letting you know about that.
        Mr. Bishop. Thank you. Thank you. Thank you.

                 V.A. CLINIC SELECTION, NORTH COLUMBUS, GEORGIA

        Finally, we talked at length about the selection of a V.A.
    clinic in North Columbus, Georgia and the questions of the
    process utilizing the selection of the site.
        Have you been able to find out anything in regard to the
    property selection there, and if it is truly the best location
    that will service the veterans in the Columbus, Georgia,--
    Alabama and surrounding areas?
        Mr. McDonald. We did look into that. After we talked, we
    did look into that process. And frankly, I think that we could
    have done a better job involving your staff and you in that
    process of selecting that location.
        The location is selected. We do think it is a good
    location, and if we were to change the location, my
    understanding is it would significantly delay us.
        And as a result, we think it is best to move forward, but
    we do think that the process could have been improved of
    including your staff and you in the process of that.
        Mr. Bishop. It is my understanding that there is no public
    transportation that will go to that site and that there are
    very few veterans that actually live in that area, that the
    central city location would provide much greater access with
    public transportation and that there are facilities there that
    are already constructed as a part of the Columbus regional
    medical complex.
        So I am trying to understand how they came to the
    conclusion that that was the best location.
        Dr. Clancy. I believe that transportation is going to be
    arranged for those veterans who would need transportation
    from--particularly if they are at that other complex and need
    to get out to our facility.
        I believe that there was a problem with putting this
    facility downtown, but I will follow up with you on that.
        Mr. Bishop. Yes. Yes, I don't know what the problem was,
    other than that the specifications when they put the request
    for a proposal out excluded that particular geography where
    there was a tremendous medical complex in existence that had
    excess space.
        It was already wired for all kinds of emergency
    transportation, for specialty services and the like.
        Mr. Dent. I recognize Mr. Jolly.
        Mr. Jolly. Thank you, Mr. Chairman.

                        VACANT FACILITIES AND OBSTACLES

        I just have one question I didn't get to last time. Mr.
    Secretary, you made a very reasonable argument and request
    regarding vacant facilities and one of the ways we could be
    helpful would be to remove the obstacles that stand in your way
    of closing facilities.
        What are those obstacles on the congressional side? Are
    they merely political? Are they statutory? Are they tied to
    funding?
        Mr. McDonald. I will have to get back to you on the
    details. My understanding is they are generally political,
    and--
        Mr. Jolly. I don't know who would stand by that one
    facility that you sent a picture of. I think you should able to
    close that one, right?
        Mr. McDonald. Yes. That--that garage?
        We obviously picked that picture on purpose.
        Helen, do you have any--what do we need help on here? Is it
    statutory or--thank you for asking.
        Ms. Tierney. Sir, it is a combination of different things.
        We do have facilities such as that one that is designated
    as a historical facility, which, once that happens, we are not
    able to move forward.
        And then it is a lot of political concern when we look to
    close a facility, so we need something like a BRAC process that
    would be fair, that a board would evaluate our facilities, and
    Congress would agree with those closures based on their
    ranking.
        Mr. Jolly. But do you have the authority to close vacant
    facilities? Let's stick with vacant facilities, not reducing
    the footprint of maybe existing facilities.
        And I ask just because if it is political, then the
    category of vacant facilities, I think would be the low-hanging
    fruit with the least amount of political opposition.
        Do you have the legal authority to close vacant facilities?
        Ms. Tierney. So each case tends to be a little bit
    different. Sometimes that facility is on a complex, and we
    don't have enough construction money to tear it down.
        An option when we start to do that process, one of the
    historical organizations gets involved--so yes, we would
    probably need an agreement that everybody was going to agree to
    close certain facilities.
        Mr. Jolly. Thank you.
        Mr. Dent. Can we submit for the record what your
    authorities are? That would be very helpful.

        [Clerk's note: The requested material was not provided by
    publication deadline.]

        I recognize Mr. Fortenberry.
        Mr. Fortenberry. This was related to the line of
    questioning I wanted to undertake.
        But first of all, let me make a quick recommendation, if
    there is some viable mechanism whereby you can creatively
    dispose of excess inventory and capacity working with
    communities, do not call it BRAC. [Laughter.]
        Don't do that, because this is a positive thing. We are
    trying to make you more efficient and effective, not close
    stuff in communities, and that means transitioning this vacant
    property, underutilized property.
        By the way, the V.A. clinic in Lincoln, Nebraska, where I
    live, has a similar dilemma, a very old, stately facility that
    needs to be preserved--enhanced and preserved, and there is
    development agreements that have tried to be worked, and it is
    completely stuck.
        And meanwhile, what is happening? The V.A. is carrying
    excess capacity, taking money away from your primary mission,
    the community is not being as well served, because there are
    other development opportunities there, and we are losing the
    opportunity to rehabilitate and preserve historic structures.
        So, I will think of--I will come up with an acronym if you
    want, but don't say BRAC.
        Ms. Tierney. Sorry. We have a legislative request that we
    have submitted to give us enhanced use lease authority. Right
    now, our authority was limited to only supportive housing for
    homeless veterans. We would like to extend that back to the
    authority we used to have so we could bring in a broader range
    of people to use those beautiful historic facilities.
        Mr. Fortenberry. Well, perhaps, Mr. Secretary, this is the
    heart of the problem that we have all been talking around with
    our lofty ideals and strategic partnerships. The mechanism for
    this--one of them, anyway, to create a financing mechanism--
    could be this enhanced leasing authority, where private bill
    would lease back, or however you want to structure it.
        You said it--``We used to have the authority.'' You no
    longer do. What happened?
        Mr. McDonald. I think part of it was around the issues in
    Los Angeles that I mentioned earlier. The Los Angeles campus
    had a rental car facility, a laundry facility, and a whole
    bunch of other things. And as a result of that, the enhanced
    use lease authority got restricted. I think we are beyond that
    now. We have solved the problem in Los Angeles. This would be
    helpful.
        The other thing that would be helpful--and we have done a
    lot of study on this--is, with the strategic partnerships, we
    also have the ability to create mechanisms where we could
    receive funds from private sector to help veterans. And we have
    looked at that authority, as well.
        Mr. Fortenberry. Well, I think what would be helpful--and
    you alluded to this earlier--is if we can quantify what you
    need in terms--across multiple platforms, what we have talked
    about, in terms of enhanced authority that is going to give us
    creative opportunity to have the private sector either
    contribute, or be involved in the financing. So, we could just
    get going here. There is no reason for all of this holdup. It
    is just that we are carrying legacy infrastructure of previous
    ideas as to how to do things. Not a condemnation of the past.
    We had to do it that way. But we don't have to do it that way
    going forward.
        So, I think as an outcome here--tangible outcome--can you
    get back to us with the list after the evaluation is done, what
    specific legislative authorities you need? Or if it is a matter
    of just cross-agency communication, as we talked about with the
    OMB----
        Mr. McDonald. Right.
        Mr. Fortenberry [continuing]. Who has some stress regarding
    enhanced leases or private bill with private build leased-
    backed arrangements--that would be very helpful.
        Mr. McDonald. We will do that.
        Mr. Fortenberry. If you could do that quickly, that would
    be----
        Mr. McDonald. We will do that. We will do it very soon.
        Mr. Fortenberry. All right. Thank you, Mr. Secretary.
        Mr. Dent. Thank you. That concludes the second round.
        But before we depart, I want to ask one quick question and
    then will submit the balance of my questions for the record.
        Mr. Secretary, your predecessor set goals of ending the
    disabilities claims backlog of defining backlog as taking
    longer than 125 days per claim. And achieving a 98 percent
    accuracy in completing claims by 2015.
        Your budget document states that you will meet the
    timeliness standard--outside observers are a little more
    skeptical. It appears that trend in backlog reduction has
    declined in the last 8 months.
        Your budget documents are silent about whether you will be
    able to meet the 98 percent accuracy goal by the end of the
    year. Why has that goal proved more elusive to you and what
    steps, like training, are necessary for you to achieve your
    quality goal?
        Mr. McDonald. On that particular goal, we have done a deep
    dive on the statistics of that goal. And statistically, it is
    virtually impossible to achieve it. Statistically, if you have
    two probabilities--let's say one is .5 percent, the other is .5
    percent--together, they are .25 percent. If you add another
    one, you know--and the probabability keeps going down the more
    elements you add.
        We did a deep dive on this, and there are so many elements
    to achieving a perfect claim resolution that it would be
    impossible to get to 98 percent.
        Allison, any detail you want to add?
        Ms. Hickey. The only thing else I would add is that I have
    met now repeatedly with commercial industry experts and chief
    claims officers from across the nation who do similar work. And
    when I describe to them the level of quality we have already
    attained, and then I say to them, ``How would you get
    further?'', they say to me, the return on investment would be
    so huge to get further that they actually believe--and when I
    asked them about their numbers, I am actually ahead of most of
    them in terms of the quality that they do. They didn't say just
    have a process on the back side for which--a working appeals
    process with good law around it--have a process on the back
    side for which you address those points of disagreement.
        I think it is important to also note there is no
    correlation today between quality and appeal. We have done that
    study and that analysis. In fact, some of our best stations had
    the highest number of appeals.
        So, what I would tell you is that we are really optimizing
    the system right now at that 96 percent medical issue quality.
    Which, by the way, is a 5.5 million issues we have done this
    year, and will go up again next year. So, we are actually doing
    pretty well against that at the individual medical issue level.
        We have--and I thank you for the resources--significantly
    improved our training programs, our challenge programs. And we
    even have sort of remediation now--programs which you assisted
    us with. We also have consistency studies we are doing every
    day. We have quality review team people in the regional office
    who are providing just in time assessment of errors.
        We have almost seven or eight layers of quality assurance
    now that I would actually say probably supersedes what even
    industry does in this area.
        Mr. Dent. Thank you for that.
        This concludes our hearing. I want to thank all of you
    today--the secretary and staff for appearing here.
        And this hearing is adjourned.

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                                              Thursday, March 19, 2015.

       OVERSIGHT HEARING--DEPARTMENT OF VETERANS AFFAIRS, OFFICE OF THE
                               INSPECTOR GENERAL

                                   WITNESSES

    MR. RICHARD J. GRIFFIN, DEPUTY INSPECTOR GENERAL, DEPARTMENT OF
        VETERANS AFFAIRS
    DR. JOHN D. DAIGH, JR., CPA, ASSISTANT INSPECTOR GENERAL FOR HEALTHCARE
        INSPECTION, DEPARTMENT OF VETERANS AFFAIRS
        Mr. Dent [presiding]. We will bring this meeting to order.
    Good morning.
        We would like to welcome Mr. Richard Griffin, the deputy
    inspector general for the Veterans Administration, to discuss
    his office's oversight efforts at the Veterans Administration.
        This is probably one of the most active periods in recent
    memory for your office, Mr. Griffin, with your audits of
    whistleblower allegations and the wait list scandal reports
    that you are required to make to Congress by the Choice Act.
    You have also had to respond to recent charges that your office
    has fallen a little bit short on transparency by failing to
    release some investigative reports.
        Members of the subcommittee will no doubt have many
    questions about the many areas of your oversight, and we
    understand that you have a previous engagement that requires
    you to leave at 11:30 this morning, and we will do our best to
    honor that. But with all the issues, from the wait list scandal
    to the construction challenges issue at Denver and so many
    other issues, I look forward to just getting right into this
    testimony.
        At this time I would like to ask our ranking member, Mr.
    Bishop, if he has any opening remarks that he would like to
    make?

                    Ranking Member Bishop Opening Statement

        Mr. Bishop. Thank you very much, Mr. Chairman, for
    yielding.
        I believe that the inspector general plays a vital role in
    ensuring the programs that are implemented actually work and
    that the funding is spent wisely. The I.G. last year, I think,
    was tasked with the difficult work of investigating the scandal
    in Phoenix, about which we were all appalled.
        In response to this investigation, which uncovered numerous
    issues, Congress moved forward on historic legislation,
    including the Veterans Choice Act, that would improve access to
    health care for veterans across the nation, which was signed
    into law in August. While this is an essential first step in
    addressing the systemic issues that are facing the Department
    of Veterans Affairs, there is still a lot of work to be done.
        And as we move forward, it is critical that the inspector
    general have the necessary resources to conduct aggressive
    oversight to ensure that veterans are able to receive the
    health care that they need when they need it. It is vital that
    we change the culture that has been so infested within the V.A.
    and to make sure that it doesn't resurface.
        No matter what steps the V.A. takes to address the
    challenges that it faces, it will not be able to move forward
    if we don't have proper oversight. So I commend you for the
    work that has been done over the last several months, but there
    is a lot yet to be done to repair the trust that has really
    been broken with our veterans and with the American people for
    the veterans--the V.A. system.
        So I look forward, Mr. Chairman and members of the
    subcommittee, to working with the department to eliminate the
    issues that are raised by the I.G.
        And I thank you, and I will yield back.
        Mr. Dent. Thank you.
        So, Mr. Griffin, your full statement will be entered into
    the record. Please introduce Mr. Daigh, who is with you at the
    witness table, and please summarize your testimony for us. And
    I know we are going to be interrupted by votes at some point,
    so we are going to try to move along as quickly as we can.
        Mr. Griffin. Thank you.
        Mr. Chairman, Ranking Member Bishop, and Members of the
    Subcommittee, thank you for the opportunity to discuss the work
    of the V.A. Office of Inspector General.
        In fiscal year 2014, our office issued 310 reports, we
    closed 880 investigations, we made 539 arrests, and we
    identified $2.3 billion in monetary benefits for a return on
    investment of $22 for every dollar in I.G. funding. In the
    first 5 months of fiscal year 2015 alone, the I.G. has
    recovered in fines, penalties, restitution, and civil
    judgments, actual money returned to the U.S. government
    equivalent to 91 percent of our enacted appropriations.
        Recoveries since fiscal year 2011 are even more remarkable,
    with $3.1 billion in recoveries, which represents actual cash
    recoveries of $5.50 for every dollar spent on the I.G.'s
    operations.
        In the past 6 years we have issued more than 1,700 reports,
    made more than 3,000 arrests, and provided testimony at 69
    congressional hearings. We conducted 400 briefings for Members
    of Congress and staff and responded to more than 1,300 written
    requests from various members of the House and the Senate.
        This level of productivity and information-sharing with
    Congress is among the very highest in the I.G. community.
    During the past 6 years, our work has been recognized by the
    Council of Inspector General for Integrity and Efficiency with
    25 awards for excellence.
        The national attention sparked by reporting on waiting
    times and patient deaths at the Phoenix Health Care System has
    resulted in a dramatic increase in the number of contacts to
    the OIG hotline.
        In fiscal year 2014 the OIG hotline received nearly 40,000
    contacts, a 45 percent increase over fiscal year 2013. We saw a
    similar increase in the number of inquiries from the Members of
    Congress, with over 200, reflecting a 38 percent increase in
    congressional requests. We expect that these upward trends will
    continue.
        Recent attention to opioid prescription practices at the
    Tomah VAMC has generated interest in the OIG's practice of
    administrative closures. Let me be clear that our work at Tomah
    was painstaking and comprehensive.
        OIG physicians reviewed the clinical practice of providers
    to include quality assurance data and patient medical charts.
    We contacted the V.A. Police, the Drug Enforcement Agency, the
    Tomah and Milwaukee Municipal Police, to determine if there was
    evidence of narcotic abuse at the Tomah VAMC. OIG investigators
    were involved in an attempt to find appropriate or illegal
    behavior on the part of providers or patients.
        Current and former Tomah pharmacists were interviewed. OIG
    staff reviewed the e-mails and other files from 17 employees at
    the Tomah VAMC.
        At the end of a 2.5-year review we concluded that narcotic-
    prescribing practices of some Tomah staff were at the outer
    boundary of acceptable narcotic prescribing, and we were unable
    to find evidence that illegal activity was occurring. While the
    decision was made to close the review without a public report,
    we did, in fact, brief the Tomah and the network director who
    oversees Tomah, along with VHA central office personnel.
        In January of this year I directed a review of
    administrative closures for fiscal year 2014 to determine
    whether any adjustments were to be made to our internal
    policies. We found that 42 percent of the administrative
    closures were not substantiated, 54 percent were closed because
    when we arrived, the facility had already taken sufficient
    action that resolved the issues, and 4 percent involved tort
    claims.
        I also directed a review of our decision-making practices
    on closing reviews administratively and instituted a new policy
    requiring coordination of administrative closures within the
    immediate Office of the Inspector General, the Office of the
    Counselor to the Inspector General, and our Release of
    Information Office. This process will ensure consistency in
    decision-making regarding when and how public release of
    related documents is handled.
        This week we began publishing administrative closure
    reports on the OIG Web site. Additional reports will be
    published pursuant to the Freedom of Information Act as we
    complete the process of reviewing and redacting sensitive
    information.
        For fiscal year 2015 the OIG is funded at $126.4 million.
    The President's budget proposed $126.7 million for fiscal year
    2016, a three-tenths of 1 percent increase, which will require
    a reduction of 10 full-time employees.
        Without additional resources, we cannot meet the demands of
    increased congressional and other hotline contacts. It will be
    practically impossible to maintain our schedule for cyclical
    inspections of V.A. medical centers, outpatient clinics, VBA
    regional offices, and other national reviews.
        Our investigative staff is also stretched to the breaking
    point by the rise in threats and assaults, fiduciary fraud,
    drug diversion, identity theft, and service-disabled veteran-
    owned small business fraud. We believe an increase of $15
    million over the fiscal year 2015 enacted level will enable us
    to surpass our performance in terms of productivity, quality,
    and timeliness, and help meet the unprecedented increase in our
    workload.
        Mr. Chairman, we appreciate the committee's continued
    interest and support, which has included the addition of $5
    million above the President's request during the last 2 fiscal
    years.
        This concludes our statement, and we would be happy to
    answer any questions you or any other Member may have.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                              WAITING LIST SCANDAL

        Mr. Dent. Thank you, Mr. Griffin.
        And I will get to the Tomah issue in a moment, but I just
    wanted to first start with the waiting list scandal.
        Your office was obviously thrust into the epicenter of the
    wait list scandal last year. Your testimony indicates that you
    have undertaken 98 audits responding to allegations of
    scheduling manipulation and that so far you have referred 44
    audits to the department's Office of Accountability Review for
    administrative action. You are still working at the other 54
    sites.
        Should we conclude from the 44 completed audits that
    scheduling manipulation was endemic to all the hospitals you
    visited? And are the violations you identified matters of
    breaking the law or administrative malfeasance, and has the
    Department of Justice been willing to take any of these cases
    you have identified?
        Mr. Griffin. I can't tell you as I sit here if 100 percent
    of the facilities were manipulating wait times, but I can tell
    you it was certainly widespread throughout the system. We have
    presented these cases to the U.S. Attorney's Office; 33 of the
    cases that were presented have been declined for prosecution,
    with the suggestion that they be referred to the department for
    administrative action, which is, of course, what we would do
    anyway.
        We have eight that are still pending with DOJ and, of
    course, you know, each individual U.S. Attorney's Office has
    their own caseload and their own decision matrix as to what
    they accept for prosecution and what they don't, but certainly
    any time that we had evidence of criminality we presented these
    cases.
        Mr. Dent. There are conflicting media reports in the wake
    of President Obama's visit to the Phoenix hospital. One of the
    whistleblowers said that progress was being made and that
    terrific strides had been made in on-time appointments; another
    one of the whistleblowers dismissed any notion of progress and
    said that the V.A. was still gaming the system of appointment
    delays.
        What conclusions have you made about the pace of the
    progress from your most recent audits?
        Mr. Griffin. We issued an interim report on Phoenix urology
    issues within the last 30 days. It is something that came to
    our attention when we were in Phoenix initially. We had to set
    it aside because we wanted to get the waiting times report out
    the door.
        We found some 750 veterans that were waiting for urology
    care for extended periods of time that appeared to be
    unaccounted for in the system.
        So there are issues. It took a long time for the system,
    system-wide, to get into the state that we found it in, and I
    think it is going to take a long time to get it all
    straightened out.

                            OMI AND OIG DIFFERENCES

        Mr. Dent. And I would like to also just follow up on the
    last comment on Phoenix. After the Phoenix wait list scandal
    the V.A. took steps to reorganize and strengthen the Veterans
    Health Administration's Office of Medical Inspector, OMI,
    including creating an audit capacity for that office.
        What does the OMI do that is different from the OIG? Do the
    two groups often have the same cases?
        Mr. Griffin. We have a statutory requirement to oversee the
    work of the OMI, so we would never do duplicate work because we
    would tell them--if they were going to initiate something we
    already were working. They are in regular contact with Dr.
    Daigh's office. It is not unlike our relationship with GAO. If
    we are doing an audit on a certain subject it would make no
    sense, so----
        Mr. Dent. So it is not redundant?
        Mr. Griffin. Previously, as a medical inspector, they were
    the under secretary's early warning mechanism. If there was
    something that he wanted them to go look at before it became a
    national crisis, he could dispatch his medical inspectors prior
    to it coming to anybody's attention, just based on one of his
    directors hopefully saying, ``I think we need someone to come
    out and take a look at this.'' The audit aspect is a new twist
    for them.

                                  TOMAH ISSUE

        Mr. Dent. I would like to quickly move to the Tomah issue,
    if we could. Your office has obviously been investigating the
    Tomah, Wisconsin V.A. hospital case of over-prescription of
    opioid drugs, which gained a lot of national attention. And
    your office has faced some criticism for concluding that
    doctors' prescription policies were within the scope of
    practice.
        Last week the department released its preliminary clinical
    findings on Tomah and reported that the V.A. team found unsafe
    clinical practices at Tomah in such areas as pain management
    and psychiatric care. The department also noted that the Tomah
    hospital had double the national average in the simultaneous
    use of benzodiazepines and opioids, a practice which is
    discouraged by official V.A. policy. These findings seem to
    indicate a significant problem.
        I guess the question is, why did the I.G. conclude that
    prescribing behavior was in the scope of practice, or you said
    they perhaps pushed an outer boundary?
        And then finally your office also had received some
    negative publicity recently. It was a USA Today story on March
    the 8th related to the Tomah case because you administratively
    closed the case without publicly releasing the report and
    response.
        You talked about it in your testimony, but on Tuesday you
    established a new policy that administrative closures would be
    decided centrally. Out of the 140 reports that have not been
    released, you have released five with sensitive information
    redacted and your staff is reviewing the other 135.

                    NEW CENTRAL POLICY ON RELEASING REPORTS

        Can you tell us what the new central policy would be on
    releasing those reports? Are reports, even those with
    confidential information and unsubstantiated allegations, being
    released with appropriate redaction? Is there no standard
    policy government-wide for I.G.s to follow about the
    circumstances in which I.G.s must release the reports from
    their investigations and their audits?
        I kind of gave you three issues there: Tomah, the most
    recent issue of the disclosure of the reports, and a standard
    for I.G.s generally.
        Mr. Griffin. Regarding the recent publication by Dr.
    Clancy, our work there covered a point in time from 2011 to
    2013, and during that time we looked at the specific patients
    and the specific medical records that were in play at that
    time. We are back in Tomah now looking at some of the new
    allegations involving new patients, and we have another
    investigation ongoing there. For it to be misunderstood that a
    current review somehow has application to the work that Dr.
    Daigh's team did isn't exactly the way it should be described.
        Your second question on administrative closures.
        I can tell you that other I.G.s do administrative closures
    and that based on the numbers that I mentioned to you--we have
    40,000 hotline requests, most of them with multiple issues they
    want us to look at. If we start looking at something and we are
    10 percent into the review and we realize this is a dry well,
    it would make no sense for us to use our limited resources to
    pursue something when we have been convinced early on that it
    is either unsubstantiated or because perhaps the whistleblower
    or the person who raised the issue raised it through the chain
    of command--sometimes that happens, too--and it was taken to
    heart locally and fixes were put in place prior to our team
    even getting there.
        For us to continue to do work and issue an extensive report
    with the additional requirements on our personnel and cost and
    efficiency would be a poor utilization of our resources. In the
    past we administratively closed such reviews.
        Frankly, we are doing these now because of some
    misunderstanding as to whether we were hiding something.
    Anybody that reads these as they come out--and I think we have
    got 13 out this week--will see that if you were in our position
    you would make the same decision.
        Mr. Dent. Thank you, and I would like to yield this time to
    our distinguished ranking member, Mr. Bishop?
        Mr. Bishop. Thank you, Mr. Chairman.
        Ms. Lee has got some exigencies, and so I am going to, if
    the chair would allow me to yield to Ms. Lee and let her go
    ahead of me out of turn?
        Ms. Lee. Thank you very much. I want to thank the gentleman
    for yielding.

                          UNPROCESSED INFORMAL CLAIMS

        We have the Budget Committee coming up, and I really
    appreciate being able to ask you these questions.
        So thank you, Mr. Bishop, very much.
        Good morning. Good to see you.
        And first, let me just thank you for responding to report
    language that this committee placed--I think it was the year
    before last with regard to the Oakland Regional Office. We
    indicated that there had been 13,000--over 13,000 unprocessed
    informal claims, and Under Secretary Hickey, in her testimony,
    indicated that these were actually duplicate claims, but that
    that still was unacceptable.
        There was some recommendations based on the report that you
    gave us that we presented back to you that I believe it was Ms.
    Boor--Julianna Boor--worked with us on. And let me just--there
    are three recommendations, and I wanted to get a sense of what
    you think needs to happen next.
        We recommended that the Oakland V.A. Regional Office
    director complete and take appropriate action on the remaining,
    I think it was 537 informal claims; secondly, that the Oakland
    regional director implement a plan to provide training to staff
    on proper procedures for a process in informal claims and
    assess the effectiveness of the training; thirdly, that the
    Oakland V.A. Regional Office director implement a plan to
    ensure oversight of those staff assigned to process the
    informal claims.
        I think you know that Oakland has been one of the worst,
    and you have made a lot of progress, so I want to thank you for
    that. But also, getting to 2015 goal of no disability claim
    being more than 125 days old, I can't for the life of me figure
    out how that is going to happen, given what is taking place and
    what has taken place in processing in Oakland.
        So are you going to continue to investigate, continue to
    monitor? How do we make sure that we reach the goal of 2015?
        Mr. Griffin. I think that was a stretch goal when it was
    articulated. I think there has been extreme emphasis placed on
    processing claims, and a lot of other collateral duties that
    VBA has have fallen by the wayside.
        And we were in a meeting about this subject and the answer
    was, ``We don't have enough staff.''
        And I said, ``Well, we are making millions of dollars in
    improper payments that could be used to hire staff and get
    adequately staffed so things can be done right.'' I came away
    from the meeting believing that there was going to be a request
    for that.
        They are up against it, there is no question. The increase
    in demand since 9/11 for the post-9/11 veterans has them and
    VHA drowning in demand. And as you know, they have been under a
    fair amount of pressure to try and get this backlog cleaned up.
        I would applaud their effort, but I am afraid that in part
    what has happened is some of the backlog is getting moved
    around and not getting resolved. Some of it is going to----
        Ms. Lee. That is what we are seeing there.
        Mr. Griffin [continuing]. It is going to wind up at the
    Board of Veterans Appeals or it is going to be temporarily
    taken off the table, which was part of another initiative they
    have on the 2-year-old claims, but then it has to come back to
    be finalized later on.
        So there are a lot of issues. You are right, Oakland was
    not one of their high achievers.
        Ms. Lee. One of the lowest----
        Mr. Griffin. Exactly. But thanks to some funding we got
    through this committee a few years ago, we created that
    inspection program. And we get to every regional office once
    every 3 years so we can look at the more difficult claims and
    see if they are doing them correctly or not, or are they making
    improper payments, and so on.
        So we know they had problems with Oakland. With the 13,000
    you alluded to, as you know, they didn't even have sufficient
    records as to be able to go back after the fact and confirm
    that they fixed those 13,000, so more work needs to be done, no
    question.
        Ms. Lee. Okay. So is there a plan to go back to determine
    if those 13,000 were fixed? And then do you think that the goal
    of the claims being no more than 125 days old by 2015 can be
    attained or not?
        Mr. Griffin. I don't believe that will happen, but we all
    hope it could happen. But, like I said, I think it is a stretch
    goal.
        Ms. Lee. Okay.
        Well, Mr. Chairman, I would hope we could figure out a way
    to help make sure that goal is achievable since that is the
    goal, because these veterans deserve better that what is taking
    place now.
        So thank you very much.
        Mr. Griffin. Thank you.
        Mr. Dent. Thank you, Ms. Lee, and thank you for your
    service on the Budget Committee. I know you are a little busy
    today. Hope you got a little sleep.
        At this time I would like to recognize Mr. Jolly for 5
    minutes?
        Mr. Jolly. Thank you, Mr. Chairman.
        And, Mr. Griffin, Dr. Daigh, thank you for being here.
        We are coming off one of the worst scandals of the last few
    years within the V.A., where your office uncovered widespread
    abuse, manipulation of wait lists. You are the independent
    inspector.
        This is the Appropriations Committee, though, not the
    Authorizing Committee. The President's budget proposes overall
    an increase of around 7 percent for the department, but for
    your department and the inspector general's department only 0.3
    percent.
        Your testimony says that you will have to reduce your
    personnel by 10 full-time employees under the President's
    proposed budget. Is that correct?
        Mr. Griffin. Yes, that is correct.
        Mr. Jolly. Last year you issued 310 reports, 888--or 880
    investigations, 70-something arrests, recovered $2.3 billion.
    You were responsible for, frankly, uncovering some of the
    greatest concerns of the American people. And the President's
    budget proposal requires you to cut staff if enacted at this
    level. Is that correct?
        Mr. Griffin. That is correct.
        Mr. Jolly. In your oral testimony you reference if it was
    up to you you would be requesting an additional $15 million?
        Mr. Griffin. That is correct.
        Mr. Jolly. And what would that enable you to do? If at $126
    million you are laying off 10 people, then at $141 what does
    that do for your operations?
        Mr. Griffin. Thank you.
        We have got a 45 percent increase in hotlines. We have got
    an intake unit that processes those. But when there are serious
    violations that need to be either investigated or need a
    medical review by Dr. Daigh's staff or need an audit, the
    intake unit farms those out to the people that hit the street
    and do the actual work.
        So what we would do is we would hire 75 additional
    personnel. Some of them would be in the intake unit, but some
    of them would work for Dr. Daigh, some would work in our
    criminal investigative unit, and some in the audit staff.
        It would also allow us to not have to lose the 10 that you
    have already described.
        Mr. Jolly. And I would point this out to the committee. You
    know, I asked the secretary when he appeared before us what the
    President's budget proposal included for OIG, and I am not sure
    we got a clear answer that day, and I am not sure if it was
    obfuscation or perhaps he just didn't know.

                                   CHOICE ACT

        Is there an issue related to anything in the Choice Act? In
    past testimony, as I have seen over the past several weeks from
    the department, both on the Hill and publicly, there has been
    reference to the fact that perhaps your office did receive
    additional money sometime towards the end of last year that
    justifies this increase?
        Mr. Jolly. Justifies this lack of increase.
        Mr. Griffin. Thanks to this committee, we have received $5
    million above the President's budget the last 2 years. The way
    the omnibus worked out last year, it was like ships passing in
    the night as far as the pass-back from OMB and the
    appropriation for 2015 occurring.
        I believe that somebody saw that $5 million and concluded
    that, well, they already got their $5 million in 2015. But we
    used that $5 million to add staff to try and put our finger in
    the dike to stay afloat here. And based on the growth in
    demands, 45 percent growth, we already had to stop doing some
    of the cyclical reviews that we think are very important so we
    are not just showing up at hospitals when somebody pulls the
    fire alarm. You need to have a routine inspection process.
        So there was a memo that came out from the Office of
    Management saying that there may be either a supplemental or--a
    reapportionment of some of the Choice Act money. Now, my
    reading of what the reaction has been to that idea suggests
    that that wasn't going to happen, but I felt compelled, if
    there was going to be a supplemental, based on us having to
    lose people, to make a serious and sincere request for
    additional staffing because we are going under.
        Mr. Jolly. So to be very clear, your position is that
    nothing that has occurred, from the omnibus to the Choice Act,
    any additional resources, there is nothing that has alleviated
    your need for additional money? This would be a real cut.
        Mr. Griffin. Absolutely.
        Mr. Jolly. If this President's budget is enacted at this
    level, this is a real cut of 10 employees to your office?
        Mr. Griffin. That is right. And we could use twice as much
    as that, but I don't want to be greedy. I am serious. There are
    other I.G.s that have 1,600 FTE and we have 650.
        Mr. Jolly. Thank you.
        Mr. Griffin. And we are the second-largest agency in the
    government.
        Mr. Jolly. Thank you very much.
        Mr. Chairman, thank you.
        Mr. Dent. Thank you.
        I would like to, at this time recognize the distinguished
    ranking member, Mr. Bishop?
        Mr. Bishop. Thank you very much, Mr. Chairman.

                                 CLAIMS BACKLOG

        Let me go back to your budget document for a moment to try
    to follow up on an earlier statement that you made about the
    backlog. I think an OIG review found that the VBA's 2013
    special initiative to expeditiously complete disability claims
    pending more than 2 years was not effective, and the
    initiatives allow use of additional ratings to process claims
    while awaiting receipt of requested supporting evidence was
    less effective in quickly providing benefits to veterans than
    were the existing rating procedures.
        And you said although the complete provisional claims still
    required a subsequent final rating decision, they were omitted
    from the VBA's inventory of pending cases, understating VBA's
    total workload and its progress in eliminating the claims
    backlog. So basically, what I would like to get clarification
    on is whether or not when you take--when you eliminated the
    pending cases, did that increase the--did that distort the
    number of claims that were still unresolved and still pending?
        Mr. Griffin. Yes, it did. I mean, they took those
    provisional ratings off the table even when there might have
    been one or two of the several claims that had been filed that
    had not yet been completed, and they weren't included in the
    count.

                                 BUDGET REQUEST

        Mr. Bishop. Which is really troubling to us, because, you
    know, we are really, really struggling to get a handle and to
    hold the agency accountable on the numbers. It just seems like
    the numbers are ambulatory, they just move all over the place.
        And we have to have some real metrics so that we can track
    and we can hold the agency accountable so we can exercise our
    oversight duties.
        Let me ask you something about your budget request now. You
    mentioned that the return on investment was five-to-one, I
    think, in your testimony, in terms of recovery.
        The budget document seemed to suggest it was three-to-one,
    so that was--that kind of jumped out at me. But I find it
    interesting that the funding level is flat, because you
    actually do provide a return on investment of significantly
    more than has to be expended.
        Can you explain the different ways that the money is
    recovered and how it should be invested back into V.A.? And if
    it were reinvested and you are generating that kind of return,
    why is it that you are not able to utilize that for additional
    FTEs in order to carry out your responsibilities?
        Because, I mean, you are definitely a great asset to the
    taxpayer and to the agency. You are conserving resources and
    recovering resources.
        Mr. Griffin. Thank you, Mr. Bishop. I don't know where the
    three-to-one number comes from. Is that in the department's
    documents?
        Mr. Bishop. Yes. It is in the budget----
        Mr. Griffin. In fiscal year 2014 our return on investment,
    which is a number that all I.Gs use, was 22-to-1, and that
    number reflects monetary benefits, money that could have been
    put to better use. It is mostly money that is identified in our
    audits that was either improperly spent or wasted.
        The recoveries result from our----
        Mr. Bishop. I think it was the recoveries that were three-
    to-one.
        Mr. Griffin. Recoveries for the last 5 years were five-to-
    one, and that was on criminal cases, that is when there is a
    quitam filed and the government recovers monies that were
    wrongfully obtained by private sector contractors.
        Now, some of that money, to the extent that we can
    demonstrate that V.A. procured a certain dollar value in drugs
    that were wrongly identified or were off-market labeling or
    what have you, V.A., once we can demonstrate through our work,
    ``This is the amount of this drug V.A. purchased,'' then V.A.
    gets their share of the penalty money.
        A lot of our fines and recoveries are in criminal cases.
    That money goes to the U.S. government--mostly to the U.S.
    Treasury, sometimes to asset forfeiture funds. But at the end
    of the day, it is all money returned to the same U.S.
    government on behalf of the taxpayers.
        Mr. Bishop. I guess my question is you are struggling for a
    lack of resources. You don't have enough FTEs. You are
    generating significant recoveries.
        Do you have the flexibility, or does the Secretary have the
    flexibility, to utilize some of these recovery resources to
    supplement your FTEs, or do you need to come to us for
    additional authorities to do that?
        Mr. Griffin. I think that due to the independence of the
    I.Gs, you don't want to give the impression that we are
    beholden to the secretary to provide our funds. So that is why
    there is a separate line item in the budget. And when we don't
    get what we request, there is a narrative portion that we are
    supposed to tell the Congress, ``This is how much we asked for
    and this is how much we were given.''
        Mr. Bishop. So from the recoveries, though, does it come
    back to you or does it go back to the department?
        Mr. Griffin. No. No. It is for the good of the whole, but
    not to the I.G.
        Mr. Bishop. The whole department of the----
        Mr. Griffin. No. Some goes to V.A., some goes to the
    Treasury Department.
        Mr. Bishop. Thank you, Mr. Chairman.
        Mr. Dent. Thanks.
        Before I recognize Mr. Rooney I just want to say we are in
    votes. I think there are about 9 minutes left in the vote.

                                 IDENTITY THEFT

        We will have Mr. Rooney proceed and then when he is
    finished we will recess briefly. It is only two votes, so we
    will vote on the two then come right back.
        So with that, I would like to recognize Mr. Rooney, for 5
    minutes?
        Mr. Rooney. Thank you, Mr. Chairman.
        My question is pretty brief and kind of specific to
    Florida, but I think it might reflect a larger issue which
    deals with patients at V.A.s and identity theft. We had an
    issue down in Tampa recently, at the James Haley V.A. Hospital
    where this guy, Willie Streater, was a contractor, and he was
    in charge of shredding some documents.
        Well, he didn't shred them, he sold them and the people
    that bought them, I guess, had filed fraudulent tax claims and
    got over $1 million for that. But it is not just that, it is
    benefits, it is being able to open lines of credit, health care
    fraud, all the things that we know are associated with identity
    theft.
        And so I guess my questions are, why do we still use Social
    Security numbers with regard to patients at the V.A.? Number
    two, would electronic records help this issue? And finally, why
    do we outsource with the V.A. the way that we do, especially
    when there is opportunity for people with felony criminal
    records to be, you know, employed by our taxpayer dollars?
        Mr. Griffin. Identity theft is a huge problem. In the last
    3 or 4 years it has been a growing area for our criminal
    investigative staff.
        We have sent alerts to the department about the seriousness
    of this issue, and in the case that you referred to, how easy
    it is for somebody to gain access to a sufficient amount of
    information to be able to file a fraudulent tax return.
        Frankly, Florida, unfortunately, is one of the leading
    areas where people have really made a career out of identity
    theft and the tax business. We have participated in task forces
    with the IRS and others to try to combat this. And as I said,
    we tried to alert the department on how critical it is that
    they guard this personal identity information.
        Certainly if it is electronic you won't have to worry about
    somebody getting access in the case you referred to for
    shredding purposes, but it doesn't preclude somebody who has
    access to that electronic data to also do things with it,
    because each account that you can provide the person with on
    the outside has got a dollar value that would be shocking, and
    it is a really serious problem.
        And then when the actual veteran tries to apply for his
    benefits the IRS says, ``Well, no. You already got your
    refund.''
        ``Well, no I didn't,'' and that can take a long time for
    all of that to get resolved.
        Mr. Rooney. What are your thoughts on the whole Social
    Security number issue, as opposed to using some other kind of
    identifying----
        Mr. Griffin. I think it would be a good idea not to use
    them. When we have to use them in order to identify medical
    records for our work, typically we will just get the last four
    digits of the Social Security number along with the name and we
    feel confident that we have got the right person and the right
    record.
        But clearly the Social Security number is one of the key
    numbers that the identity theft people like to get.
        Mr. Rooney. Thank you, Mr. Chairman. Yield back.
        Mr. Dent. Mrs. Roby, I was going to suggest maybe we go
    vote now, unless you want--do you have quick questions? Maybe
    we can do them quickly, or we can vote and come back.
        Let's go ahead. I recognize you for 5 minutes. Then we can
    run downstairs----

                              V.A. WHISTLEBLOWERS

        Mrs. Roby. Thank you for being here today. Certainly
    timely.
        I brought a visual aid--the front page of the Montgomery
    Advertiser--telling the story two individuals who were
    whistleblowers at the Central Alabama V.A.
        These two individuals couldn't take it anymore. They had to
    come forward. We protected their identities.
        If it weren't for these two individuals, we would not know
    even a fraction of what we know of the gross malfeasance that
    has been taking place at Central Alabama V.A.
        For those of you in the room that aren't familiar,
    everything from thousands of unread x-rays to a V.A. employee
    taking a veteran to a crack house. My office would not have
    been able to expose this culture and what is happening to our
    veterans in Alabama but for these courageous individuals who
    have stepped forward knowing that--in that particular
    environment--retaliation is a very real thing. Because of their
    frustration they finally exposed themselves because of what has
    been happening to our veterans.
        There was a second report today--news report today that
    demonstrates that this is happening all over the country with
    V.A. employees who consider themselves whistleblowers, that
    they, too, are being retaliated against. There are 120 active
    investigations into allegations of retaliation at the V.A., and
    so I would want you, as you are here to defend your budget
    request, to--this is my opportunity to hold you accountable as
    to what you are doing as it relates to these very problematic
    and disturbing instances where at the end of the day the people
    who are suffering the most are our veterans.
        And if we can't get it right by them in this country, I am
    not really sure what we can get right. So I would just ask you
    today to address this--why this is happening and why these
    individuals are not being protected properly.
        Mr. Griffin. I agree with you that our veterans deserve the
    best. I mentioned in my oral testimony that our contacts with
    our hotline are up 45 percent. We received 13,000 more contacts
    last year than the previous year.
        We are very pleased to hear from whistleblowers. Dr.
    Daigh's team has been doing work down in Central Alabama. Our
    criminal investigative team continues to have open work in
    Central Alabama.
        I don't know how much Dr. Daigh can talk about the
    specifics of what he is looking at down there, but we are
    responding to these things and we do take our job very
    seriously. And it is a tsunami of work, and we are trying to
    get through it as quickly as we can.
        David, I don't know if there is anything you can----
        Dr. Daigh. No, I would be glad to comment.
        I think that without whistleblowers government can't
    function correctly, so we are absolutely on the same page
    there. And I think that we need a mechanism for whistleblowers
    to come forward to lay out their allegations in as clear a
    fashion as possible. And then we need to be able to go look at
    those allegations as factually as we can, so that we have clear
    allegations and we have clear facts to either support or refute
    them.
        And I think sometimes--and then we need a management at
    V.A. that, when presented with facts, will aggressively
    respond.
        Mrs. Roby. Can I interrupt you for a second? It would be
    great if we could package it up that nicely.
        Dr. Daigh. Right.
        Mrs. Roby. But the way that this happened is the director
    at CAVHCS lied to me and then I went seeking information. And
    these two courageous individuals told me the truth, and now
    they have been subject to an investigation for telling their
    member of Congress the truth.
        So it wasn't like they came forward and said, ``I would
    like to sit down and talk to somebody about what is going on at
    Central Alabama.'' They read a news article where the director
    there lied to me and couldn't sit back and just take it.
        And so I hear what you are saying. It would be great if it
    was that simple, but it is not.
        Dr. Daigh. So in real life what happens--when we get
    allegations and we think that people in V.A. are lying, that
    management is not doing what they are supposed to be doing or
    not handling things correctly, then I walk down the hall and I
    talk to the head of investigations. And then the criminal
    investigation unit will go and address those issues, to the
    extent to determine whether we can put forward or collect the
    data required to make the case we need to make.
        So we are not shy about switching quickly between an
    allegation in my office, an allegation that would best be
    handled by audit, or an allegation that would best be handled
    by the investigators. That happens all the time.
        Typically, what happens if the investigators start down the
    road and there is some health care aspect to it then they are
    the leaders. I append either a physician or a nurse or social
    worker, depending on what is required to support their
    understanding of the data, and often reading the medical chart
    or interpreting some of the hospital data requires someone who
    does that for a living. And we work together as a team.
        Mrs. Roby. I am making my chairman nervous because the red
    light is flashing and the time has run out on our votes, but I
    just want a real commitment from you guys that you are
    committed to ensuring that these individuals, not just at
    Central Alabama but all over the country, that we take this
    very seriously and do all that we can through your office and
    others to ensure that this is not being covered up, that these
    individuals are recognized for their courage.
        Mr. Griffin. Could I just say that we do work very closely
    with the Office of Special Counsel that has statutory authority
    for whistleblowers, and I believe the director is gone, isn't
    he?
        Mrs. Roby. Yes, he is.
        Thank you.
        Sorry, Mr. Chairman.
        Mr. Dent. No. They were important questions.
        With zero on the clock 217 members have not yet voted, so
    what we will do is we will recess this meeting to the call of
    the chair, but I suspect we will just be back within 10
    minutes, and respectful of your time, as well.
        So thank you. This meeting is in recess to the call of the
    chair.
        [Recess.]
        Mr. Dent. We would like to bring to order this recessed
    meeting of the Subcommittee on Military Construction and V.A.
    We are going to move into our second round of questions right
    now.

                           STANDARDIZED AUDIT REPORTS

        And I know we have to be respectful of your time, Mr.
    Griffin, but I just wanted to start off with Tomah, once again,
    and one question I asked didn't get a chance to answer. Is
    there no standard policy for a government--for government-
    wide--a standard wide policy for I.G.s to follow about the
    circumstances in which I.G.s must release the reports from
    their investigations and audits?
        Mr. Griffin. I believe it is pretty standardized on audit
    reports. Our audit reports get sent to the Hill and sent to the
    department at the same time, simultaneously, electronically.
        If we have a restricted report, which means that there
    would be Privacy Act issues in the report, we post the title of
    the report, and if we get three requests from the public for
    that report we will then redact it and post the redacted
    version on our Web site. Other IGs do administrative closures
    just like we do, and it is a question of if it is a dry well,
    let's not waste our resources on it.
        Mr. Dent. Got it.
        I would like to now move on to the ongoing I.G. review at
    the Philadelphia Regional Office. We understand that your
    office has been doing a review during the past 6 months at the
    Philadelphia Regional Office and that so many allegations have
    been raised by office employees that you won't be able to
    investigate each allegation individually. Press reports
    indicate that the concerns being raised include mismanagement,
    retaliation, wasted government resources, and lack of
    accountability for certain managers.
        I realize the report is not yet completed, but can you give
    us a sense of the scope of the problems in Philly, and how does
    that office rank relative to other regional offices? Are these
    problems that you see throughout the country? Is Philadelphia
    responding to the allegations with staff changes and procedural
    fixes?
        Mr. Griffin. They have put new leadership in Philadelphia.
    Frankly, we completed our draft report within the past week on
    Philadelphia. It was a project that just kept growing. Every
    time we went back there, more issues were put on our plate.
        If you had a checklist of possible problem areas in
    different locations in VBA regional offices, you could have
    checked just about every one of them that came to our attention
    in Philly as far as misplaced mail, unprocessed claims. There
    were issues in the Veterans Service Center, they have got an
    insurance center up there, they have got two call centers. We
    had issues in all of those locations.
        So it is a major project to get it back on track where it
    needs to be. I am sure we will have many, many recommendations
    in the report.
        Typically, we ask for a response from the department within
    2 weeks on a report like that so, you know, it should be out
    soon, I guess that is the principal message here.
        And as far as how it might compare to other facilities, it
    is very bad. And there are a number of whistleblowers involved
    there, there are a number of accusations against management
    there, and that is why it has taken several months to try and
    get through it all.
        Mr. Dent. Thank you.
        I would like to quickly move over to the contract review of
    the Denver hospital. The inspector general has an Office of
    Contract Review. Does this office have a regular role in
    reviewing V.A. construction documents, and has that office been
    involved in the controversy about the contract for the Denver
    V.A. Hospital?
        Has your office done programmatic reviews of the Denver
    construction project during its long history? And if so, what
    systematic problems has the Denver experience revealed about
    the V.A. construction process?
        And just a point of clarification for the members, I think
    you should all be aware by now, but the total cost, according
    to Sloan Gibson, over the Denver V.A. Hospital is at $1.73
    billion, and that is leaving an unfunded amount of about $830
    million, which is just eye-popping, and I know the authorizers
    are extremely upset about this.
        But it is a very serious matter and we are watching this
    issue very, very closely, as--from the appropriations side
    because of this colossal problem that, you know, has been
    dumped on our lap and we are being asked to resolve.
        Mr. Griffin. I would share with you that our audit staff
    had received a congressional request over a year ago to look at
    Denver. They started scoping the project and doing some
    preliminary work and then we discovered that a law suit had
    been filed in court by the contractor over payment issues.
        It is similar to tort claims being filed by family members
    who think that their loved one got improper medical care in a
    V.A. facility. Once a tort claim gets filed it becomes a matter
    for the Justice Department and the legal system to make the
    call on whether or not the tort claim is righteous, which would
    cause us to shut down a review of our health care staff on the
    same subject, because at that point it is in the courts.
        We are capable of doing a review of hospital construction.
    We are going to launch a review. I had a request the other day
    from Chairman Miller of House Veterans Affairs on the same
    subject.
        Most of the problems seem to be when you get into change
    orders and lack of oversight as the project is rolling out. And
    something else we want to look at, the previous secretary had
    created a V.A. Construction Review Council a couple years ago,
    which apparently didn't succeed in Denver. But we want to look
    and see what has that Construction Review Council done, and
    what is their charter, and does it have the right expertise in
    engineering and construction and what have you to do what they
    were set out to do?
        Personally in V.A. they have got three levels of hospitals.
    There are large ones that have the most sophisticated staff and
    can handle the most difficult procedures; there are medium-
    sized; and then there are small ones that are the least
    complex.
        Most of the hospitals are very old, but when you
    successfully build one somewhere and you decide we need one in
    Orlando, or we need one in Aurora, Colorado, or we need one in
    New Orleans, which are where we have activities right now, and
    you have got the plans for one that came in on time and on
    budget, let's not reinvent the wheel if it is a similar area
    that you are trying to service.
        So we are going to look into that. It won't help any with
    the end game on the cost in Denver, but we want to find out why
    it happened.
        Mr. Dent. Well, thank you. We want you to stay on top of
    that because this project at $1.73 billion is more than five
    times the facility's original estimate of $328 million. I have
    never seen a construction disaster of this proportion.

                           OFFICE OF CONTRACT REVIEW

        I know the ranking member has concerns as well. And so with
    that, I would like to recognize the ranking member for 5
    minutes.
        Mr. Bishop. Thank you very much.
        I know that your office has a role of counsel, and I.G. has
    a contract compliance role. Is that a before-the-fact or only
    an after-the-fact role? Does that particular counselor in your
    office actually oversee the negotiation of the contract to make
    sure the parameters are appropriate, or is it only an after-
    action review at the end of the day?
        I am concerned about that, to find out whether or not and
    to what extent your office knew about what was happening in
    Denver and how early it was known? I understand that this is
    under investigation and may be involved in litigation, and
    there may be some limits of what you can and can't say. But
    from the procedural perspective and our oversight, I would like
    to have some idea of how early your agency or your counsel was
    able to get involved in these kinds of things, because as I
    understand it, this contract was very unusual in that they
    were--they said for X number of dollars this contractor agreed
    to build to whatever specifications that V.A. wanted.
        And apparently that was fine until the change orders
    started to come in. I am trying to understand how there was
    such a tremendous gap, why it took so long for somebody to
    recognize that the expected expenditures and the ultimate needs
    were going to be--there was going to be such a big gap.
        Mr. Griffin. My Counselor's group is the Office of Contract
    Review. You asked about that group and their responsibilities.
        Our audit staff was the group that was going to look at
    Denver until the case wound up in court. We were not involved
    in the planning. That is a program function of the department.
        The Office of Contract Review does pre-award audits when
    things are going to be placed on the federal supply schedule.
    The government, being the huge purchaser that it is, is
    supposed to get most-favored-customer pricing.
        When somebody wants to sell the government aspirin or
    whatever the higher-cost drug might be, we want to make sure
    that V.A. is getting a competitive price. So they will do a
    pre-award to make sure that the contracting officer, who
    actually works for V.A. is getting advice from our staff and
    make sure that they take that advice, and ask the right
    questions, and get the best price.
        On the other end, there is a post-award review, where if
    the vendor tells us or tells V.A., ``We will sell this pill for
    a dollar apiece to you because you are the V.A. and you are a
    big buyer,'' and we find out later on they are selling it to
    Walmart for less money----
        Mr. Bishop. I am particularly interested in this
    construction, though.
        Mr. Griffin. We are going to look at that in the future. We
    were not involved in the planning of that facility and when we
    tried to initiate a review it was already in court. We will be
    looking at it in the future.
        Mr. Bishop. You couldn't look at it if it is in court?
        Mr. Griffin. The judge would decide.
        Mr. Bishop. I understand the judge would decide, but I am
    saying if it is in court, but you still should have the
    opportunity to be able to review the documents and the status
    of the case and have access to the court records, shouldn't
    you?
        Mr. Griffin. Well, we can get access and we will, but while
    it is being adjudicated in court our decision wouldn't trump
    the judge's decision.
        Mr. Bishop. I understand that, but I am just saying for
    purposes of planning and for purposes of understanding what
    took place, and to be able to intercede at the earliest
    possible moment to stop it from reoccurring in another
    instance--in another similar instance--it seems to me that the
    sooner you can get access to that information, whether it is in
    court or under investigation, whatever, the better it will be
    for the department.
        Mr. Griffin. I don't disagree. Unfortunately, this is not
    an isolated incident, as you know.
        Mr. Dent. I thank the ranking member.
        At this time I would like to recognize Mr. Joyce for 5
    minutes.
        Mr. Joyce. I thank you, Mr. Chairman.
        I thank you both for being here.
        I would like to follow up on the ranking member's comments,
    though, I think it would be critically important to have some
    understanding of what took place there so that you can advise
    and counsel that it doesn't occur again in the initial startups
    of any of these buildings or things that you have going up
    within the Department of Veterans Affairs. And I don't take it
    lightly, because I spent 25 years as a D.A. before I got here,
    so it is one of those things where I really view your position
    as the most important at the V.A. to make sure these types of
    things don't happen.
        The things that happened in the V.A.--I want to go back
    to--and I understand the chairman may have asked some of these
    questions before, and unfortunately I am on three committees
    and all three had hearings this morning, so I apologize if I am
    touching into something you already went on. But I noticed that
    you launched 98 other investigations into manipulations at the
    fallout from the Phoenix center, and that your testimony notes
    44 of those have been referred to the V.A. Office of
    Accountability Review to address the management issues.
        The other 54 sites are still under investigation. Could you
    share with this committee what type of conduct or mismanagement
    led to the 44 referrals to the V.A. Office of Accountability
    Review so far?
        Mr. Griffin. There has been a range of different
    methodologies involved in creating fictitious access time
    lists, et cetera, and some of them were potentially criminal,
    some of them didn't rise to the level, in the view of the U.S.
    Attorney's Office, to be prosecuted as criminal, and when that
    happens we turn them over to the Office of Accountability
    Review.
        Mr. Joyce. Why not the local authorities? A theft is a
    theft.
        Mr. Griffin. Well, you have to prove criminal intent in
    every instance, and in some instances there were schedulers who
    would take a call, veteran says, ``I need an appointment
    because I have got this issue or that issue,'' scheduler would
    book it, the next available appointment that they had open at
    that facility, and if it was 120 days from now they would say
    to the veteran, ``Well, Mr. Veteran, can you come in on July
    15th? That is our next available appointment.''
        So you are given an option of one date 120 days from now.
    You trust that that is the first available date so you say,
    ``Well, yes, I guess I will take it.''
        Well, when that gets scored as your desired date, that is
    not really what you wanted. You would like to come in tomorrow,
    but when it gets scored that way, now you are down in the
    lowest level of the appointment chain, and for some of the
    schedulers they didn't know any different. They thought,
    ``Well, this is the next appointment I have. I can't create
    something out of nothing. If we don't have the staff here to
    get this veteran in sooner,''--some didn't realize it was wrong
    because it was the only thing they ever knew.
        They didn't realize the bigger picture that if the Congress
    was not aware of the existence of these waiting times and the
    demand, which has been recognized now--I know Mr. Jolly co-
    sponsored one of the bills on this--you wouldn't have got that
    $16 billion in the pipeline to try and hire more staff and
    create a choice card and everything else. I mean, that is the
    fallacy of it.
        We reported for 10 years on waiting times deficiencies, and
    it only caught fire in the past year.
        Mr. Joyce. But somewhere in the chain of command people
    were manipulating data, correct?
        Mr. Griffin. That is right.
        Mr. Joyce. Okay. And so the person manipulating that data
    in order to get a bonus, that is not a theft to you?
        Mr. Griffin. The performance appraisals in VHA, as you may
    know from your time there, might have 100 elements that people
    are rated on, one of which might be access to care. In many
    facilities--they are not the same elements. Someone might say,
    ``These are the five biggest challenges we have this year in
    our network or in our medical center,'' so the director says,
    ``I am going to go after these five things this year.'' Access
    might not be near the top of his list.
        Don't misunderstand. It is outrageous. It is outrageous
    when the principal deputy Under Secretary in VHA sends a letter
    to the whole system and says, ``Stop cooking the books,'' and
    says to the leadership out there, ``This is how they are doing
    it. This is how you can catch it.'' They institute a policy to
    require certification that their numbers are legitimate, and a
    short time later they kill the requirement.
        It is outrageous. Believe me, I am with you. And I would
    like every case we investigate to be prosecuted, but I can't
    control that.
        Mr. Joyce. Well, I think it is ludicrous they have bonuses
    in place where they can manipulate things to actually get the
    bonus. People should get paid to do a day's work.
        Mr. Griffin. Absolutely.
        Mr. Joyce. And if you don't do the day's work to the best
    of your God-given ability you should be fired.
        Mr. Griffin. Absolutely.
        Mr. Joyce. I see I am out of time, Mr. Chairman, but I will
    come back later. Thank you.
        Mr. Dent. Thank you.
        Mr. Jolly.

                              OPIATE PRESCRIPTIONS

        Mr. Jolly. Thank you, Mr. Chairman. Just a couple quick
    questions.
        You have studied the opiate prescription issue at length
    several times over the course of the years. What is your
    system-wide assessment, or your findings, perhaps, from
    previous reports? I mean, it can't simply be the one location.
        Mr. Griffin. Right. Dr. Daigh's team published a national
    review last May; it identified a half a dozen different problem
    areas from bad mixing of different drugs and what have you. And
    we also published nine other individual reports on opioid use.
        I would ask David to speak to the national findings.
        Dr. Daigh. So in the timeframe of 2012, which is the data
    that we were able to look at everybody in V.A. who received
    opioids, there were a couple of problems that stood out. The
    percentage of veterans who were on chronic opioids who also
    have substance use disorder--that is, they are addicted to
    narcotics of one sort or another--is in the range of 10 or 12
    percent. The percent of veterans who, in the same category,
    have significant mental illness is in the range of 40 percent.
        So you have a group of patients that have a very complex
    chronic disease burden that are very difficult to take care of.
        Notwithstanding that, there is a guideline that has been
    put out by DOD and V.A., that talks about the proper use of
    narcotics in patients who are taking chronic opioids, and the
    bottom line is that V.A. providers were not following, really
    with astounding figures, the advice of the guideline.
        So, for example, you are supposed to get a urine drug
    screen at certain intervals. Wasn't occurring.
        You are supposed to not give refills--early refills under
    certain circumstances. That was also not occurring.
        So everywhere we have looked across the system we have seen
    that as a major problem.
        Mr. Jolly. What triggers a site-specific review for your
    office?
        Dr. Daigh. At current time, last year we got 2,400
    complaints of health care issues that came to my group. That
    works out to be something like 10 a workday, plus. So we look
    at those.
        A portion of those I don't have the manpower to address so
    I send a letter to the director of the VISN, usually above the
    facility, and say, ``Please respond to these allegations,''
    having removed the person who made the allegation, trying to
    get by the whistleblower issues. We pick about 60 or 70 cases--
    that is about the workload I have--and we go and look at those.
        It is a combination of if everybody is out looking at
    Phoenix, I have to send some out. If people are in the office
    and we have the workload then we go out and look at them.
        So essentially, it is an allegation either from our doing a
    CAP and serving employees and hearing that there are problems
    with narcotic use--we would then trigger a hotline.
        Mr. Jolly. So you are responding, basically, that if you
    can see site-specific allegations or concerns, and obviously if
    you see a cluster of them, that is where. Shifting gears real
    quickly, and I have raised the issue with the Secretary.

                            INACCURATE DEATH NOTICE

        I have only been in office for a year, and at least four
    times now I have had a constituent come in with a letter from
    the V.A. expressing their regret at the veteran's passing, but
    the veteran is actually fully alive. It is very disruptive to
    their benefits. We work it, and about 2 months later they get a
    letter saying, ``We have reviewed your file and determined you
    are, in fact, alive.''
        It is, as you can imagine, disruptive for benefits and so
    forth.
        The secretary has indicated it is something he is working
    on. He has kind of put it on Social Security.
        Has your office ever looked at this? I mean, I realize it
    is not a crushing issue in everything else you are dealing
    with, but have you had any exposure to this or looked at this?
        Mr. Griffin. We are aware of the anecdotal type stories
    that you have mentioned, and I don't know what to attribute----
        Mr. Jolly. Okay. That is fine. And it is just a curiosity.
        Mr. Griffin [continuing]. Different kind of review or
    anything.
        Mr. Jolly. I appreciate the Secretary's affirmation that he
    is looking into it.
        Mr. Chairman, no further questions. The only thing I would
    say on the record is I would hope our subcommittee can find a
    way to improve on the President's request for OIG.
        In this year, in this time window, to give our stamp of
    approval to a budget for the OIG that requires a reduction of
    10 full-time employees is an issue of great concern. If
    anything, I think we need to be looking at how to improve the
    resources and personnel to provide the investigations and
    oversight into the V.A.
        So I appreciate it. Thank you.
        Mr. Dent. I appreciate the member's comments, and we are
    going to do our best on that front.
        Now I recognize Mr. Fortenberry for 5 minutes.
        Mr. Fortenberry. Thank you, Mr. Chairman.
        Good morning, gentlemen.

                              BROKERING OUT CLAIMS

        Nebraska has one of the highest V.A. rated systems, and we
    are proud of that. But an ancillary problem to the larger
    problem of claims processing and patient management load is
    that Nebraska has taken on work from other states. Now, I think
    they have gladly done that and absorbed that with the capacity
    we have, but we can't get in a situation that starts--where
    that starts to create backlogs for ourselves.
        We have been informed by several groups that that appears
    to be the case. Are you aware of this dynamic?
        Mr. Griffin. We are aware and we have done an audit on the
    process of brokering out claims. I am from the Heartland
    myself.
        Mr. Fortenberry. Well, no wonder you talk so plainly and
    give straightforward answers. Thank you.
        Mr. Griffin. People out there in some of those offices out
    there would just seem to be able to get the job done. It is
    cost of living, maybe it is better management----
        Mr. Fortenberry. Good clean living----
        Mr. Griffin. Exactly. But we did a review of this policy
    that VBA had of shipping around these claim forms, and
    naturally, if you are the person who owns the claim that is 2
    years old you are happy to ship it off to somebody else.
        If you are on the receiving end, frequently there is a
    reason why it is 2 years old. It wasn't a ground ball, or it
    wasn't something that somebody could grab hold of and quickly
    dispose of and, and resolve the issue.
        We found that the brokered claims that we looked at--and I
    would be pleased to send a copy of that review up to you so you
    can have the information in it, actually extended the time
    period to get the things done----
        Mr. Fortenberry. Oh, is that right?
        Mr. Griffin [continuing]. As opposed to----
        Mr. Fortenberry. Further complicated the situation?
        Mr. Griffin. Yes.
        Mr. Fortenberry. Well, that is another ripple effect of the
    initial core problem, so appreciate your awareness of that.
        Mr. Griffin. And frankly, when everything is electronic--it
    is still a work in progress--it will even be easier to
    electronically transfer a claim to a more productive office,
    which conceptually might not be a bad idea, but maybe you need
    twice as many people in your office in Nebraska and then you
    can do more workload.

                          CENSORSHIP OF V.A. CHAPLAINS

        Mr. Fortenberry. I want to turn to a second issue. There
    are several court cases where--involving V.A. chaplains who
    were censored and prohibited from applying the tenets of their
    beliefs. I don't have the latest information on that, but
    apparently in 2013 several were forced out of the chaplain
    training program.
        Is this something that you investigate to ensure that the
    V.A. is not acting out of discord or confusion or against legal
    precedent?
        Mr. Griffin. I can tell you we have not investigated that
    to date. If there is more information that you would like to
    provide to my staff we will be happy to look into it.
        Mr. Fortenberry. My own information is a bit limited, but
    apparently these--this is some--there is a manifestation of
    some real problem here. But if you would be willing to receive
    additional information as we get it, that would be helpful.
        Mr. Griffin. Please do.
        Mr. Fortenberry. Thank you, Mr. Chair.
        Mr. Dent. Thank you. And if there are other, further
    questions from any of the members----
        Mr. Joyce. Yes.
        Mr. Dent. And before you do, I was going to ask just one
    question----
        Mr. Joyce. Sure.
        Mr. Dent. If it is okay with the ranking member, I would
    just ask--recognize Mr. Joyce briefly afterwards.

                    LEGIONNAIRES DISEASE IN V.A. FACILITIES

        So with that, I just wanted to ask my other question, Mr.
    Griffin, on Legionnaires' disease in V.A. facilities. Your
    office was very active in exposing the Legionnaires' disease
    patient care problems in some Pennsylvania facilities. In
    response, the V.A. is using a total of $167 million in the 2015
    and 2016 Choice Act funding to make infrastructure changes to
    prevent the recurrence of the Legionnaires' situation.
        Do you think the V.A. plans are sufficient to address this
    problem?
        Mr. Griffin. We did do the specific review in Pittsburgh.
    We also did a national review.
        I am going to ask David to respond to that. It is not
    unique to V.A. facilities, and there is actually a higher
    percentage of these problems in the Northeast than there is in
    other parts of the country. But David could speak more
    eloquently to the problem.
        Dr. Daigh. Legionella is in everyone's groundwater, so
    depending on the exact species of Legionella that is in the
    groundwater where you reside then everyone is at some risk for
    it. It is a national problem. V.A. does have a national attempt
    to deal with this problem.
        I am not aware of exactly the program you are talking about
    that would--that you are speaking of for $167 million. I don't
    know exactly what they are doing.
        But clearly there does need to be an effort to try to
    ensure that the water going into hospitals does not contain
    pathogens like Legionella. So I haven't looked at that--I don't
    know what that buys, is what I am trying to say, in order to
    answer your question directly.
        Mr. Dent. Thank you.
        Does the ranking member have any additional questions?
        Okay. Then we will recognize Mr. Joyce, and then that will
    end the hearing.

                            PHOENIX RECOMMENDATIONS

        Mr. Joyce. Thank you, Mr. Chairman.
        In your testimony you referred to 24 recommendations that
    the V.A. made to implement immediate and substantive changes in
    response to rampant fraud in the scheduling system. As of March
    2nd this year, 18 recommendations are still open.
        What development have you seen in implementing those 18
    remaining recommendations?
        Mr. Griffin. You are referring to the Phoenix
    recommendations----
        Mr. Joyce. Correct.
        Mr. Griffin [continuing]. Right?
        I would like to give you all 18 for the record, if I may,
    because I don't have all 18 of them on the tip of my tongue.
        Mr. Joyce. Sure.
        Mr. Griffin. One of the principal recommendations was to
    finally, after many years of abortive attempts to create a
    viable scheduling system, that the V.A. get that system in
    place that can be remotely audited. So if someone in a facility
    is playing games with the numbers, that could be detected
    remotely by somebody in the main V.A. in the I.T. world or in
    VHA.
        I know that they put out some requests for proposals on how
    they might do that. There are some off-the-shelf applications;
    they are being reviewed.
        I think from the standpoint of being able to demonstrate a
    serious requirement being addressed, that would be one of them.
        The old system, if a person wanted or if a doctor wanted to
    see the veteran in 6 months, software wouldn't allow them to
    schedule it immediately because it was too far out, which is
    part of the answer, frankly, on some of these paper wait lists.
    In order to keep track of those to insert them when you were
    within the window of being able to put them into the system,
    they maintained separate lists instead of the electronic wait
    list, which wasn't capable of handling that information.
        So certainly one of the key recommendations was on
    accountability, and that is a work in progress.
        I don't know, David, if anything comes to mind.
        Dr. Daigh. There were a number of ethics issues and
    adjustments they were going to make in terms of how they train
    their workforce, and there is also the issue of notifying and
    reviewing the cases we identified where harm had occurred--both
    of deaths and harm that we had heard. And I don't know exactly
    where they are on notification for those cases, but that would
    be part of what we could provide back to you in follow-up.
        Mr. Joyce. Do you feel that it is part of a
    decentralization? I heard you say that you want to find
    something where you can remotely check to make sure that the
    numbers are not being manipulated, and this occurred as a fault
    of V.A. sort of being decentralized while at these different
    establishments and it would be better if we had it under a
    central unit.
        Mr. Griffin. As President Reagan once say--said, ``Trust
    but verify.''
        Mr. Joyce. Yes. Absolutely.
        Mr. Griffin. I think to have the capability to monitor
    remotely what is going on would certainly put a little strength
    in the system. I do believe that because this went on so long
    that people just get blase about it, they didn't think about
    it.
        Over 10 years we did 20 reports on this. We testified 19
    times before the Congress. And finally it got traction, thanks
    to some aggressive oversight from the Hill.
        When you have the second or third-highest person in VHA
    sending out a directive saying, ``Knock it off,'' and making a
    requirement for certification and then very quickly it is
    removed, it went to the highest levels, and it certainly
    existed at the director level in some facilities. I am not
    saying everybody, but it was accepted practice.
        And it might have been--I mean, if a director said, ``We
    don't have enough doctors to do these things in 30 days,'' and
    then the requirement got cut to 14 days, well, if you can't get
    them done in 30 days you are not going to get them done in 14
    days.
        I referred to a stretch goal, you want people to stretch
    and do the best they can, but if it is unrealistic, people in
    the field might be saying, ``What are they thinking about? We
    are drowning in veteran demand and we don't have the resources
    to deal with it.''
        So there needed to be some honesty and say, ``Look, we
    either need twice as much money to do fee basis work, or we
    need this number of clinicians.'' But if you don't have
    staffing standards, it is hard to determine what the number of
    clinicians is that you need, so we have been beating that drum
    also.
        Mr. Joyce. It is just astounding, don't you agree, that
    there are no red flags or bells and whistles that were set off
    that would have caught this very early in the stages? As you
    say, it went up the chain of command, and the quick rescission
    of that must have made everyone think that this is okay, this
    is standard----
        Mr. Griffin. It was a failure in leadership at multiple
    levels.
        Mr. Joyce. Well, you know, just briefly, what we can do to
    help you to that effect, please let us know. Because I think
    everyone here is committed to make sure that it doesn't ever
    happen again, or we clean up the system that is in place.
        And secondly, you know, I know there are a lot of young
    prosecutors, ladies and gentlemen, in city and county offices
    who also have veterans in their jurisdiction and would be glad
    to help you and assist you. I know the Department of Justice is
    very busy, and that the U.S. Attorney's Offices are busy, but
    theft is theft, and so any way we could help you or they could
    help you let us know.
        Mr. Griffin. We want to do quality and timely work, and at
    the current inflow of requests that we get, we can't do it. And
    it disturbs me greatly.
        And as I said earlier, we have a 38 percent increase in
    requests from the Congress. If you send me a request I don't
    want to take a year or 8 months or whatever to do it; I would
    like to turn it around in 90 days possibly--quicker if
    possible.
        But when these things--when you get any of these things
    like Phoenix--Phoenix consumed half of our staff for the better
    part of a year. This Philadelphia review just kept growing and
    growing and growing.
        And we want to be part of the solution, and in order to do
    that you have to be able to do things timely, make solid
    recommendations that everybody understands, get the department
    to acknowledge, ``Yes, we admit we have a problem,'' and make
    them describe the solution, and then we follow up until it
    happens. That is what we want to do.
        Mr. Joyce. Thank you very much. Good luck.
        Mr. Dent. Well, thank you. This concludes our hearing.
        I have several more questions I am going to submit for the
    record, and hopefully you can get back to us on those two
    questions, which I think you already partially addressed.
        So with that, I want to thank everybody for your attendance
    today.
        Appreciate your presence today, Mr. Griffin and Dr. Daigh.
    At this time, this meeting of the subcommittee is
    adjourned.

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