[Senate Hearing 114-609]
[From the U.S. Government Publishing Office]



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

                              ----------                              


                        TUESDAY, MARCH 10, 2015

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

    The subcommittee met at 2:34 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Mark Kirk (chairman) presiding.
    Present: Senators Kirk, Murkowski, Hoeven, Boozman, Capito, 
Cassidy, Tester, Udall, Schatz, Baldwin, and Murphy.

                     DEPARTMENT OF VETERANS AFFAIRS

                     Veterans Health Administration

STATEMENT OF DR. CAROLYN M. CLANCY, M.D., INTERIM UNDER 
            SECRETARY FOR HEALTH
ACCOMPANIED BY JAMES TUCHSCHMIDT, M.D., ACTING PRINCIPAL DEPUTY UNDER 
            SECRETARY FOR HEALTH


                 opening statement of senator mark kirk


    Senator Kirk. Let me just start with a brief opener here 
and say that back in 1984, I came to my first House 
Appropriations Committee meeting. I would say that, for some of 
the staff in this room, you may be in this chair one day 30 
years from now. And it is a great honor for me to be chairing 
this subcommittee, to take care of my fellow veterans, and to 
make sure the Active Duty forces are properly housed and taken 
care of.
    And I am very excited to have testimony from Dr. Clancy and 
Dr. Tuchschmidt.
    And I will turn it over to my august ranking member, 
Senator Tester.


                    statement of senator jon tester


    Senator Tester. Well, thank you, Chairman Kirk. I look 
forward to working with you, too, and congratulations on 
assuming the chairmanship of this subcommittee. The issues that 
will come before this subcommittee are very important.
    Secretary Clancy, Dr. Tuchschmidt, thank you for appearing 
before the subcommittee and thank you for your service to our 
Nation's veterans. You are facing enormous challenges in 
restoring the credibility of the Veterans Health Administration 
(VHA) and ensuring top-notch healthcare for our veterans. And I 
assure you that I will do all that I can to assist you in your 
job and your mission.
    The scandals that rocked the VHA over the past year have 
revealed severe problems in management of the agency's 
healthcare system. As you noted in your prepared testimony, 
Secretary Clancy, to say that the VHA had a crisis on its hands 
in 2014 would be an understatement.
    Congress acted swiftly and aggressively in response to that 
crisis with passage of the Veterans Choice Act. And it is now 
up to the Department of Veterans Affairs (VA) to use the 
authorities and resources that Congress has provided to take 
the necessary steps toward correcting our course.
    In doing so, the VA must ensure both transparency and 
accountability in implementing the act and allocating those 
resources. VA must also recognize the Choice Act as a temporary 
program, a bridge to give the VA time and the resources to 
align its healthcare programs, providers, and facilities to 
meet the needs of today's and tomorrow's veterans.
    I am most interested in how the VA will address these 
urgent issues while also building its capacity to serve 
veterans in the years to come, as that capacity will need to be 
increased.
    In Montana, much of the conversation begins and ends with 
the VA's ability to address medical workforce shortages. It has 
reached a crisis level in our State. It is impacting the VA's 
ability to deliver care, and it is undermining the credibility 
of the VA. It needs to be addressed, and it needs to be 
addressed soon.
    I look forward to your thoughts on how the VHA plans to 
undertake this mission.
    With that, Mr. Chairman, once again congratulations, and I 
look forward to working with you.
    Senator Kirk. Any other members seek recognition?
    Mr. Schatz.
    Senator Schatz. Mr. Chairman, I would be happy to move 
forward with the testimony, thank you.
    Senator Kirk. Thank you.
    Proceed, guys.


            summary statement of dr. carolyn m. clancy, m.d.


    Dr. Clancy. Good afternoon, Chairman Kirk, Ranking Member 
Tester, and members of the subcommittee. Thank you for the 
opportunity to appear before you to discuss the Department of 
Veterans Affairs' Veterans Health Administration fiscal year 
2016 and 2017 medical care advance appropriations budget 
request.
    I am accompanied today by Dr. James Tuchschmidt, Acting 
Principle Deputy Under Secretary for Health.
    As Senator Tester just said, the year 2014 will likely be 
recognized as one of the most memorable in VHA's history, and 
to say that we had a crisis on our hands would be an 
understatement. We realize the significant work that lies 
ahead.
    The good news is that moving forward along with Congress, 
we have an incredible, amazing opportunity to reshape the 
future and make long-lasting valuable changes. The Department 
of VA as a whole is working to rebuild trust with veterans and 
the American people, improve service delivery, and set the 
course for long-term VA excellence in reform while delivering 
better access to care and benefits.
    This includes the Department's MyVA initiative, which 
reorients VA around veteran needs and empowers employees to 
assist them in delivering excellent customer service to improve 
the veteran experience.
    As we enter 2015, all of us in the VA healthcare system 
will be focused on the MyVA initiative, as well as VHA's own 
Blueprint for Excellence. This blueprint is aligned with the 
Department's strategic plan and supports the MyVA initiative. 
The blueprint lays out the themes and supporting strategies for 
transformation to improve the performance of VA healthcare now, 
making it not only more veteran-centered, but also veteran-
driven by putting our customers in control of their VA 
experience.
    The Blueprint for Excellence will serve as a guide in all 
of the programs I mentioned in my written statement. I am 
confident that the deep sense of mission we share will carry us 
through the next year and any challenges we might face in the 
future.
    I also just want to note that Secretary McDonald and I and 
all the senior leaders in VA envision that the future of VA 
healthcare is both that we are a provider, a top-notch 
provider, and also a health plan taking advantage of getting 
veterans care in the community when it is needed.
    VHA's fiscal year 2016 budget request will support VA's 
goals to expand access to timely, high-quality care, end 
homelessness among veterans, and continue to transform the 
Department through its MyVA initiative.
    Through the fiscal year 2016 budget, we will continue to 
develop and expand our mental health system, as well as our 
innovative and cutting-edge medical research. We are committed 
to increasing access to care for veterans, and have placed 
special emphasis on telehealth services for those in rural and 
remote locations.
    To address the growing number of women veterans, VA is 
strategically enhancing services and access for female 
veterans.
    Another high priority is ensuring that all enrolled 
veterans who require treatment for the hepatitis C virus have 
access to the necessary therapies.
    VA is also dedicated to promoting the health and wellbeing 
of caregivers. The cost of fulfilling this care and other 
obligations to our veterans grows, and we expect it will 
continue to grow for the foreseeable future.
    We know that services and benefits for veterans do not peak 
until roughly 4 decades after a conflict ends. Therefore, more 
resources will be required to ensure that VA can provide 
timely, high-quality care into the future.
    The fiscal year 2016 budget requests additional resources, 
which are critical toward providing veterans the care that they 
have earned through their service and sacrifice.
    In conclusion, VA is committed to providing the highest 
quality care, which our veterans have earned and deserve. I 
appreciate the hard work and dedication of VA employees, our 
partners from veterans service organizations (VSOs), very 
important advocates for veterans, our community stakeholders, 
and our dedicated VA volunteers. I respect the important role 
that Congress has in ensuring veterans receive quality 
healthcare and benefits that they rightly deserve.
    I look forward to continuing our strong collaboration and 
partnership with this subcommittee, our other subcommittees of 
jurisdiction, and all of your colleagues as we work together to 
continue to enhance the delivery of healthcare services to our 
Nation's veterans.
    Mr. Chairman, members of the subcommittee, this concludes 
my remarks. Thank you again for the opportunity to testify, and 
my colleague and I will be happy to respond to any questions 
from you or members of the subcommittee.
    [The statement follows:]
           Prepared Statement of Dr. Carolyn M. Clancy, M.D.
    Good morning Chairman Kirk, Ranking Member Tester, and members of 
the subcommittee. Thank you for the opportunity to appear before you to 
discuss the Department of Veterans Affairs (VA) Veterans Health 
Administration (VHA) fiscal year 2016 and 2017 medical care advance 
appropriations budget request. I am accompanied today by Dr. James 
Tuchschmidt, Acting Principal Deputy Under Secretary for Health.
    The year 2014 will likely be recognized as one of the most 
memorable in VHA's history. To say that we had a crisis on our hands 
would be an understatement. We realize the significant work that 
remains ahead. The good news is that moving forward, along with 
Congress, we have an opportunity to reshape the future and make long-
lasting valuable changes.
    The Department of Veterans Affairs as a whole is working to rebuild 
trust with veterans and the American people, improve service delivery, 
and set the course for long-term VA excellence and reform, while 
delivering better access to care and benefits. This includes the 
Department's ``MyVA'' initiative, which reorients VA around veteran 
needs and empowers employees to assist them in delivering excellent 
customer service to improve the veteran experience. As we enter 2015, 
all of us in the VA healthcare system will be focused on the ``MyVA'' 
initiative, as well as VHA's Blueprint for Excellence. The Blueprint is 
aligned with the Department's Strategic Plan and supports the ``MyVA'' 
initiative. The Blueprint lays out themes and supporting strategies for 
transformation to improve the performance of VA healthcare now--making 
it not only more veteran-centric but also veteran-driven by putting our 
customers in control of their VA experience. The Blueprint for 
Excellence will serve as a guide in all of the programs I mention 
throughout my testimony. I am confident that the deep sense of mission 
we share will carry us through the next year and any challenges we 
might face in the future.
    VHA's fiscal year 2016 budget request will support VA's goals to 
expand access to timely, high quality healthcare; end homelessness 
among veterans; and continue to transform the Department through its 
``MyVA'' initiative, which reorients VA around veteran needs and 
empowers employees, to assist them in delivering excellent customer 
service to improve the veteran experience.
    The cost of fulfilling this care and other obligations to our 
veterans grows, and we expect it will continue to grow for the 
foreseeable future. We know that services and benefits for veterans do 
not peak until roughly four decades after a conflict ends. Therefore, 
more resources will be required to ensure that VA can provide timely, 
high-quality healthcare into the future. The fiscal year 2016 budget 
requests additional resources which are critical toward providing 
veterans the care that they have earned through their service and 
sacrifice.
                        improved access to care
    VA is taking multiple steps to expand capacity at our facilities. 
The fiscal year 2016 budget request provides $60.0 billion for VA 
medical care, a 7.4 percent increase above the 2015 enacted level. In 
addition, the 2016 budget request supports implementation of the 
Veteran Access, Choice, and Accountability Act of 2014 (``Veterans 
Choice Act'') with the goal of providing timely, high-quality 
healthcare for our Nation's veterans. The Veterans Choice Act provided 
$5 billion in mandatory funding to increase veterans' access to 
healthcare by hiring more physicians and clinical staff and improving 
VA's physical infrastructure.
    As a result of the Veterans Choice Act, VA is recruiting to hire 
more than 10,000 additional medical professionals and support staff 
with funding provided in the act, and expanding our clinical trainee 
programs. The VHA National Recruitment Program (NRP) provides an in-
house team of skilled professional recruiters employing private sector 
best practices to fill the agency's most critical positions. The NRP 
has increased its targeted recruitment efforts for mission-critical 
clinical vacancies that, once filled, will improve access to care.
    In addition, the Choice Act increased the maximum award amount of 
the Education Debt Reduction Program to improve recruiting and 
retention of medical professionals. The Veterans Choice Act also 
provided $10 billion in mandatory funding through 2017 to establish a 
temporary program (the ``Veterans Choice Program'') to increase 
veterans' access to healthcare by allowing certain veterans to elect to 
receive non-VA care from eligible providers if the veterans qualify 
based on their place of residence or when VA is unable to schedule an 
appointment within the VHA's wait time goals. In order to ensure VA's 
ability to deliver high-quality healthcare to veterans, the Veterans 
Choice Act also authorized VA to procure 27 new Major Facility Leases 
nationwide. VA's leasing program provides flexibility to meet shifts in 
demographics, and the changing service needs of our veterans.
    The Veterans Choice Program may provide a measure of short-term 
relief from the pressure of escalating healthcare needs as current 
patients in the VA system elect to receive their care through this 
program. These investments, together with the fiscal year 2016 budget 
request, will provide the authorities, funding, and other tools to 
enhance services to veterans in the short-term while strengthening the 
underlying VA system to better serve veterans in the future.
    VA is committed to increasing access to care for veterans, and has 
placed special emphasis on those in rural and remote locations. 
Telehealth services are mission-critical to the future direction of VA 
care to veterans. Telehealth utilizes information and telecommunication 
technologies to provide healthcare services when the patient and 
practitioner are separated by geographical distance. The fiscal year 
2016 budget requests $1.224 billion, an increase of $126 million (11.5 
percent) for telemedicine. The number of veterans receiving care via 
VHA's telehealth services grew approximately 18 percent in fiscal year 
2014, and is anticipated to grow by approximately 28 percent in fiscal 
year 2015. VHA provided care to more than 717,000 patients via the 
three telehealth modalities: Clinical Video Telehealth, Home Telehealth 
and Store and Forward Telehealth. This amounted to more than 2,123,000 
telehealth episodes of care; 45 percent of these veterans lived in 
rural areas and may otherwise have had limited access to VA healthcare.
    We are appreciative of the Veterans Choice Act's support to improve 
access as we build capacity within the VA system to better serve those 
who rely on us for healthcare. My testimony will now discuss key 
initiatives highlighted in the President's budget request.
                           mental healthcare
    Long deployments and intense combat conditions require 
comprehensive support for the emotional and mental health needs of 
veterans and their families. Accordingly, VA continues to develop and 
expand its mental health system. VA has integrated mental health 
services into primary care in the new Patient Aligned Care Team (PACT) 
model. Providing mental healthcare within the primary care clinic 
minimizes barriers that may discourage veterans from seeking mental 
healthcare.
    VA has many entry points for mental healthcare, including 150 
medical centers, 830 Community Based Outpatient Clinics, 300 Vet 
Centers providing readjustment counseling, 80 Mobile Vet Centers, a 
national Veterans Crisis Line, VA staff on college and university 
campuses, and a variety of other outreach efforts. Operation Enduring 
Freedom/Operation Iraqi Freedom/Operation New Dawn Transition and Care 
Management Teams are located at every VA Medical Center to welcome 
returning veterans, and to provide specialized care management services 
as they transition from Department of Defense to VA.
    VA implementation of integrated mental health services in the PACT 
program has resulted in substantial increases in the number of VHA 
patients each year who receive Primary Care--Mental Health Integration 
encounters, rising from 131,589 in fiscal year 2008 to 699,454 in 
fiscal year 2014. Between 2005 and 2014, the number of veterans who 
received mental healthcare from VA grew by 71 percent. This rate of 
increase is more than 3 times that seen in the overall number of VA 
users. The increase in the number of mental health encounters or 
treatment visits, from 10.5 million in 2005 to 19.6 million in 2014, 
has been even more dramatic--an 87 percent increase. As a consequence 
of these trends, the proportion of veterans served by VA who receive 
mental health services has shifted substantially. In 2005, 19 percent 
of VA users received mental health services, and in 2013, the figure 
was 27 percent. We anticipate VA's requirement for providing mental 
healthcare will continue to grow.
    The fiscal year 2016 budget requests $7.455 billion, an increase of 
$349 million (4.9 percent) to ensure the availability of a range of 
mental health services, from treatment of common mental health 
conditions in primary care to more intensive interventions in specialty 
mental health programs for more severe and persisting mental health 
conditions. We will continue to focus on expanding and transforming 
mental health services for veterans to ensure accessible and patient-
centered care, including treatment for post-traumatic stress disorder 
(PTSD), ensuring timely access to mental healthcare, and treatment for 
military sexual trauma.
    We are committed to ensuring the safety of our veterans, especially 
when they are in crisis. Our suicide prevention program is based on 
enhancing veterans' access to high-quality mental healthcare and 
programs specifically designed to help prevent veteran suicide. Losing 
one veteran to suicide shatters an entire world. Veterans who reach out 
for help must receive that help when and where they need it in terms 
that they value.
                           hepatitis c virus
    VA places a high priority on ensuring that all enrolled veterans 
who require treatment for the Hepatitis C virus (HCV) have access to 
the necessary therapies. Chronic infection with HCV is the most common 
blood-borne infection in the world and is a major public health problem 
facing not only VHA but the United States in general. VA has 
approximately 174,000 veterans in care with HCV, making VHA the largest 
single HCV provider in the United States. The fiscal year 2016 budget 
requests $690 million to capitalize on the availability of new 
therapies to improve access to and quality of HCV care. The new drugs 
will save veterans' lives.
                  specialized care for women veterans
    The number of women veterans enrolling in VA healthcare is 
increasing, placing new demands on a VA healthcare system that 
historically treated mostly men. In fiscal year 2014, there were more 
than 2 million women veterans in the United States, accounting for more 
than 400,000 users of VA healthcare services. To address the growing 
number of women veterans who are eligible for healthcare, VA is 
strategically enhancing services and access for women veterans. The 
fiscal year 2016 budget requests $4.659 billion in total for women 
veterans healthcare, an increase of $502 million (12.1 percent).
    VA strives to be a national leader in the provision of healthcare 
for women, thereby raising the standard of care for all women. VHA 
works to ensure that timely, equitable, high-quality, comprehensive 
healthcare services for women veterans are provided in a sensitive and 
safe environment at VA facilities nationwide.
    Reproductive mental health is also an area of increasing focus. 
This area of specialty addresses the fact that reproductive health 
transitions (for example before, during, or after pregnancy or 
menopause) can increase susceptibility to or exacerbate current mental 
health conditions. One of VA's goals is to transform reproductive 
mental healthcare delivery across the VA for women veterans by 
enhancing collaborations between mental health, primary care, pharmacy 
and women's health.
    VA is stepping up to meet the needs of a growing women veteran 
population and enhancing primary care to meet their needs. We will 
continue addressing gaps and working to provide the compassionate care 
and welcoming environment our women veterans deserve.
                       caregiver support program
    VHA recognizes the crucial role that family caregivers play. They 
are partners in helping veterans as they recover from injury and 
illness, in supporting veterans in their daily lives in their 
communities, and in helping veterans remain at home. The Caregivers and 
Veterans Omnibus Health Services Act of 2010, also referred to as the 
Caregiver Law, has allowed VA to provide unprecedented support and 
services to family caregivers of eligible veterans. After the law was 
enacted, VA established a comprehensive National Caregiver Support 
Program, with a prevention and wellness focus, which includes the use 
of evidence-based training and support services for family caregivers.
    The fiscal year 2016 budget requests $555 million for total 
obligations, an increase of $73 million (15.1 percent) from 2015, of 
which $469 million is for the monthly stipends paid to designated 
primary family caregivers under VA's Program of Comprehensive 
Assistance for Family Caregivers, an increase of $58 million (14.1 
percent). The increases to the stipend obligations are due to the 
increases in the underlying hourly wages used to calculate the monthly 
stipend rates combined with the designation of additional primary 
family caregivers.
    In addition to the Program of Comprehensive Assistance for Family 
Caregivers, VA offers a variety of services and resources through the 
General Caregiver Support Services including: local Caregiver Support 
Coordinators, the National Caregiver Support Line staffed by licensed 
social workers, the VA Web site dedicated to family caregivers, as well 
as the Peer Support Mentoring Program. Additionally, VA offers a menu 
of training and provides many educational opportunities for veteran 
caregivers. VA is dedicated to promoting the health and well-being of 
caregivers who care for our Nation's veterans, through education, 
resources, support, and services.
                      ending veterans homelessness
    The administration has made the elimination of veteran homelessness 
a national priority. Between 2010 and 2014, overall veteran 
homelessness dropped by 33 percent, and we have achieved a 42 percent 
decrease in unsheltered veteran homelessness. Through unprecedented 
partnerships with Federal and local partners, we have greatly increased 
access to permanent housing, a full range of healthcare including 
primary care, specialty care, and mental healthcare; employment; and 
benefits for homeless and at risk for homeless veterans and their 
families. As a result of these investments, in fiscal year 2014 alone, 
VA provided specialized homeless services to nearly 260,000 homeless or 
at-risk veterans. Nearly 72,000 veterans and their family members were 
placed in permanent housing or were prevented from becoming homeless.
    In fiscal year 2016, VA will continue to focus on prevention and 
treatment services. The fiscal year 2016 budget request of $1.4 billion 
provides for VA homeless-related programs, including case management 
support for the Department of Housing and Urban Development (HUD)-VA 
Supportive Housing program (HUD-VASH), the Grant and Per Diem Program, 
VA justice programs, and the Supportive Services for Veteran Families 
program. Ending homelessness among veterans remains a top priority for 
VA. We are committed to achieving the goal of ending homelessness and 
we will not rest until every homeless veteran has a place to call home.
              advances in medical and prosthetic research
    The 2016 budget includes $622 million for development of innovative 
and cutting-edge medical research for veterans, their families, and the 
Nation. One example includes continuing the Million Veteran Program 
(MVP), a groundbreaking genomic medicine program, in which VA seeks to 
collect genetic samples and general health information from one million 
veterans in the next 5 years. MVP will help provide answers to many 
pressing medical questions and lead to improvements in care and 
prevention to veterans and the Nation. MVP complements the 
Administration's Precision Medicine Initiative, which seeks to improve 
treatment of disease by improving our understanding of gene-environment 
interactions and their influence on the development, progression and 
treatment of disease.
    VA supports a range of studies on post-deployment mental health 
concerns such as PTSD, depression, anxiety, substance abuse, and 
suicide. Research aims to:

  --Describe the incidence and prevalence of mental health disorders;
  --Identify their risk factors;
  --Quantify their effect on health outcomes;
  --Understand the basic mechanisms of individual disorders;
  --Identify effective treatments; and
  --Develop models of care that will deliver effective treatments more 
        quickly, widely, and reliably to veterans in need.

    The fiscal year 2016 budget request also includes funding for a new 
strategic initiative toward building a learning healthcare system that 
is responsive to new information, adapts to implement more effective 
clinical practices, and is committed to an ongoing mission of 
excellence, supported by a culture of self-reflection and continuing 
education. In addition to the direct appropriation, medical research 
will be supported through an additional $1.2 billion from VA's medical 
care program and other grants, contracts and cooperative agreements.
    As part of one of the largest integrated health systems in the 
United States, VA's research program benefits from clinical care and 
research occurring together, allowing research to be directly 
coordinated with veterans' care. Indeed, VA research is often the only 
source of Federal effort addressing important sequelae of combat and 
military occupational exposures; VA leads the national effort in areas 
ranging from neuroprosthetics to social reintegration of injured 
veterans.
                               conclusion
    In conclusion, VA is committed to providing the highest quality 
care, which our veterans have earned and deserve. I appreciate the hard 
work and dedication of VA employees, our partners from Veterans Service 
Organizations--important advocates for veterans--our community 
stakeholders, and our dedicated VA volunteers. I respect the important 
role that Congress has in ensuring veterans receive quality healthcare 
and benefits that they rightfully deserve. I look forward to continuing 
our strong collaboration and partnership with this subcommittee, our 
other committees of jurisdiction and the entire Congress as we work 
together to continue to enhance the delivery of healthcare services to 
our Nation's veterans.
    Mr. Chairman, members of the subcommittee, this concludes my 
remarks. Thank you again for the opportunity to testify. My colleague 
and I will be happy to respond to any questions from you or other 
members of the subcommittee.

                  FRONTLINES TO LIFELINES LEGISLATION

    Senator Kirk. Let me start out with the first question. The 
first question is, have you been able to review our legislation 
called Frontlines to Lifelines?
    Dr. Clancy. I have had a chance to review that, and I have 
also been----
    Senator Kirk. Let me just interrupt you there. This is 
legislation that would take the corpsmen and trained first 
responders in the medical side of the Active Duty force, to 
bring them quicker into VA.
    Go ahead.
    Dr. Clancy. Thank you. I have had a chance to review that 
and also to speak at some length with one of our colleagues 
from the Lovell facility in North Chicago, which is a facility 
that we share with the Department of Defense, and they share 
our excitement about this as well.
    We have had a similar pilot program going on in VHA for the 
past 2 to 3 years. About 15 of our facilities participated in 
this, and those facilities that participated were very 
enthusiastic about the program.
    I think most imagined that these corps-men and -women would 
be the best fit with emergency department care, and, in fact, 
many were. But about a third of those people actually ended up 
doing other things that no one had envisioned, for example, 
working with patients who have indwelling IV lines for 
chemotherapy or antibiotics who are getting care at home.
    I actually think the potential for this kind of role in the 
future is bigger than we can even imagine right now. So right 
now, we are actually working with the Office of Personnel 
Management to get these positions classified.
    For some of these individuals, this will be a very 
important entry point to the VA, and then getting educational 
benefits to go on to other kinds of career opportunities. So 
several of the people who enrolled in our program or 
participated went on to become physician assistants. One went 
to medical school. Others will, I think, actually be able to 
develop a full career within the Veterans Health Administration 
or, frankly, in other healthcare systems.

                        HINES VAMC WHISTLEBLOWER

    Senator Kirk. Let me follow up with a question about 
whistleblowers. I want to ask you about Germaine Clarno, who is 
working in the Hines VA. She is a very prominent whistleblower 
who told us about waiting lists and everything. She has had a 
lot of retribution against her by VA leadership.
    I want to ask you, is there a way that we can address the 
protection of this specific whistleblower?
    Dr. Clancy. So the Secretary, Deputy Secretary, and I, and, 
again, all of our senior leaders, have made it very, very clear 
that retaliation or poor treatment in any fashion of 
whistleblowers, whether those are official whistleblowers who 
register with the Office of Special Counsel or people who step 
forward and make their concerns heard, is completely 
unacceptable.
    I will say I just spoke with the network director for that 
network the other day, and she told me they had just had their 
labor-management forum. She thought their relationship with 
Germaine was quite good.
    You know, whistleblowers play a very, very valuable role in 
our system, in any system, bringing forth complaints. Sometimes 
we don't like hearing that news, but it is almost always 
valuable. And we take that opportunity for what it is worth.
    Senator Kirk. I would say, in my experience with Hines VA, 
it is an utterly corrupt culture there. And we are looking at 
you being a change agent there. Thank you.
    So let me go for any questions to Shelley Moore Capito, a 
new member of the subcommittee.
    Senator Capito. Thank you, Mr. Chairman. Thank you for 
letting me go to the front of the line. We have another 
committee meeting that I am going to be chairing here in about 
10 minutes, so I appreciate it. I want to thank the ranking 
member, too. I don't know if you are a party to this, but I 
will thank you for it.
    Thank you, Dr. Clancy, for coming and visiting me in my 
office yesterday. It is very, very helpful to have great 
communication, and I appreciate your efforts there.

              VA CHOICE CARD AND RURAL AREA ACCESS TO CARE

    We talked about the VA Choice Card when you were in my 
office, and we talked about some of the problems that I have 
heard anecdotally, and you acknowledged that it hasn't rolled 
out and hasn't been as used in such great numbers as the hope 
was in the beginning. For a rural area, though, it is extremely 
important.
    But what is the VA doing to make sure that patients seeking 
assistance through this hotline are not falling through the 
cracks? Somebody calls and wants to use the VA Choice Card, how 
do you follow up with that veteran?
    Dr. Clancy. A really great question. I am going to start 
and then turn to Jim, because he's been doing a very deep dive 
on this.
    I want to make it clear that we had to stand up, 
essentially, a new insurance program in about 90 days and, in 
fact, the feedback we got from many large, well-established 
insurance companies in the private sector was that they 
expected that it would take about 12 to 18 months to stand up a 
program. However, we got this implemented on time.
    Each one of our facilities has a Choice Champion to help 
veterans if the entire process doesn't go quite as seamlessly 
as it does. We have tried a variety of communication venues to 
get the word out because, after all, every single veteran 
enrolled in our system got a Choice Card in the mail. We 
finished all those mailings by the end of January, starting 
first with those who lived more than 40 miles from any of our 
facilities. And there is information online. We are working 
with the VSOs to get good information out, trying a variety of 
venues.
    And, in fact, we also have a public service ad, if you 
will, which I think has been sent to all of your offices. So 
any of you who can put that on your homepage, we would be most 
appreciative. So it is just another way for veterans to know 
about this.
    Do you want to add to that, Jim?
    Dr. Tuchschmidt. Sure. So any veteran who is in the 40-mile 
group, they don't need to go through the VA at all. They can 
automatically call the 866 number for the third-party 
administrator (TPA) and will automatically be directed to the 
right TPA for their geographic area. And they have a standing 
authorization to get the care that they need.
    For those patients who are in the 30-days group, actually, 
when we first launched this program, there were about 120,000 
of those people. We have reached out by telephone to call every 
one of them to coordinate their care with the TPA. So we have 
tried to contact them. And if we can't, we try three times, and 
we leave voicemail. And if we get the person on the phone and 
they say they want to have care through the Choice program, we 
do a warm handoff right then and there to the TPA to help them 
get their care coordinated.
    Patients who have subsequently ended up on the list are 
instructed to call the TPA, and they will work with them, if 
they choose to use the Choice program. We find a lot of 
veterans when they tell us at the time that they are making an 
appointment--oftentimes a follow-up appointment, that is the 
vast majority of them--if we can't get them an appointment, we 
book them an appointment in the VA. So there is always a 
fallback, even if it is not within 30 days, and then tell the 
veteran how they can contact TPA, provide either TriWest or 
Health Net and authorization, and the veteran can call them.
    If the veteran accepts an outside appointment, the third-
party administrator calls us so that we can cancel that 
appointment within the VA. We are in the process----

                              40-MILE RULE

    Senator Capito. I am going to stop you there very quickly 
because I only have a minute left.
    On the 40-mile limit, we had this discussion yesterday, 
living in West Virginia, 40 miles can take you 40 minutes or 
3.5 hours, depending. That is an exaggeration, but it can take 
quite a bit of time. So we were asking for some adjustments 
there in terms of driving time, or driving miles instead of 
just how the crow flies.

                           OPIOD PRESCRIPTION

    The last thing, since I am running out of time, we did talk 
about this but the opioid prescription issue within the VA. 
Many people are reliant on it. I recounted a Stan White from my 
district, who lost his son, who makes a very compelling case 
that there were some conflicting prescriptions with some 
outside use of other things, something I think that you all are 
monitoring very closely here.
    And I know it may hurt some people on the other side who 
have good, repeated use of pain killers and need that, but I 
would still encourage you to continue to look, because there is 
a high incidence of overdose within the VA population, to make 
sure that those conflicts are resolved.
    With that, I thank both of you, and I thank the chair and 
ranking member. Thank you.
    Senator Kirk. Mr. Tester.
    Senator Tester. Yes, thank you, Mr. Chairman. I will start 
with a thank you to Dr. Clancy for getting the VA Montana 
permanent director position filled. It allows me to have 
somebody that I can hold accountable, as well as you. So we 
thank you for that.

                     CHOICE ACT STAFFING ASSESSMENT

    The Choice Card required a staffing assessment of each VA 
medical facility. When will we see that assessment?
    Dr. Tuchschmidt. The Secretary signed off on it. And my 
understanding is it was being couriered over today.
    Senator Tester. Oh, we will get it today. That is good.
    It is my understanding that assessment calls for a detailed 
analysis of the VA succession planning for leadership positions 
at medical facilities, much like we had in Montana. The VA's 
proposed budget also requests a legislative change to the 
appointment and compensation system for VA medical center 
directors and network providers. I assume that is all in that 
report?
    Dr. Tuchschmidt. Yes. All of the required sections are 
there.
    Senator Tester. Okay. You have seen the report?
    Dr. Tuchschmidt. I have seen the report.
    Senator Tester. Do you think it will expedite our ability 
to get medical directors in quicker?
    Dr. Tuchschmidt. Well, I am not sure the report in and of 
itself will do that, but there, certainly, is a lot of 
information that we have gleaned out of putting the data 
together. And I think that we have clearly significant 
recruitment challenges recruiting hospital directors. And I 
think Montana has probably been a good example.
    Senator Tester. We will get into that in a minute.
    Do you think you will need any legislative changes to be 
able to do what you think is necessary to fill positions as 
quickly as possible?
    Dr. Tuchschmidt. I can't comment on that right now. We are 
looking at legislative changes that are in the queue right now.
    Senator Tester. Okay. It would be great.
    I don't know when the markup is going to be on this bill, 
Mr. Chairman.
    It would be great if you could get those legislative 
changes to us with some time to be able to visit about them.
    In recent years, Congress provided significant resources 
and additional tools to be able to address workplace shortages 
across-the-board. Unless Montana is an exception, I would say, 
we are losing ground.
    When do you think the VA will start making progress to 
address the staffing issues that are out there, whether it is 
doctors, nurses, administrative personnel, whatever it might 
be?
    Dr. Clancy. So part of the reason I know that Secretary 
McDonald and I are coming out to visit with you in Montana is 
precisely to try to figure out what other opportunities there 
might be to recruit people there.
    I think at some of our facilities, they can do a better 
job, and we are committed to helping them do a better job to do 
local market surveys, so they know when they need to up the 
salaries, for example, of nurses, depending on what local 
competition is paying.
    One of the issues that surfaced in Phoenix was that, in 
addition to the other challenges they had, they had trouble 
recruiting schedulers. There was a huge turnover because they 
were getting better jobs with other Federal departments in the 
same area.
    So it is that kind of thing. I don't think that we need 
legislative change, but I think we need better business 
processes that are more rapid in responding to that kind of 
market force.
    Senator Tester. Okay. I got that.
    Well, it will come from your end down, to be able to make 
sure that is implemented.

                             CREDENTIALING

    Mental health counselors and marriage and family therapists 
make up about 40 percent of the overall health independent 
practice workforce in the private sector. However, they make up 
less than 1 percent of the VA mental health workforce. Can you 
tell me why that is?
    Dr. Clancy. One of the issues has been our requirements. 
Credentialing is a very important function of most healthcare 
systems, and we have wanted to hire people who have the best 
skills to meet veterans' needs. And so we have wanted to hire 
graduates of programs that are accredited.
    In some States, California being one example, they graduate 
a lot of master's level people where the university is 
accredited but not the program. The good news is that a lot of 
those programs are starting to get accredited now, so I think 
that will open up a pipeline for us.
    Senator Tester. Okay, let me ask you this. When you are 
looking at hiring folks, are there policies that say that they 
aren't to be hired right out of college, that they need to have 
worked in the system, in mental health, in particular?
    Dr. Clancy. It depends on the job description. So if you 
are going to be mental health counselor, yes, then you do need 
probably post-bachelor training. Depending on other jobs, 
whether you are going to be a clerk or administrative 
assistant, it all depends on the job.
    Healthcare being----
    Senator Kirk. Doctor, if I could interrupt you, I would 
just say, I want to jump in here on credentialing and say that 
is the number one way that I found that whistleblowers are 
silenced. The VA leadership will say to a doctor, ``If you 
don't shut up, we are going to tell everybody on the 
credentialing board that you are not qualified, so you won't be 
able to be a cardiologist anywhere.'' This is a way to get 
someone who is highly qualified to be quiet.
    Dr. Clancy. I have not had specific examples of that 
brought to me, but if you know of specific examples, or 
Germaine or other people do, please, I would want to address 
them. It falls into the same category as general whistleblower 
issues that we discussed.
    Senator Tester. I would follow up and just point out, and 
this is very parochial, but I am aware of a person who went to 
VA, they had an opening in Montana. VA didn't hire them. They 
went to work in the private sector, contracted back to VA. That 
very same person, who was working for a private sector group, 
they could have hired cheaper. I just want to point that out.
    I have another round of questions. Thank you, Mr. Chairman.
    Senator Kirk. Mr. Schatz.
    Senator Schatz. Thank you, Chairman Kirk. I appreciate the 
accommodation. I have another subcommittee hearing with Senator 
Capito.

               MENTAL HEALTH PROFESSIONALS IN RURAL AREAS

    Following up on Senator Tester's question related to mental 
health services, access to mental health services remain a 
tremendous challenge, particularly in rural areas. And I 
understand you are continuing to suffer from a mental health 
professional shortfall.
    But I am wondering, of the 9,600 new hires that the VA 
plans to make, what percentage of them are going to be mental 
health clinicians? And how many of them are intended to provide 
services in the rural context?
    Dr. Tuchschmidt. I don't have those exact numbers, but I 
can get them for you.
    Dr. Clancy. I will say just generally, Senator, that the 
two areas where we are going to have the most trouble 
recruiting are mental health and primary care. A lot of that I 
think is going to reflect our need as a department, with all of 
our resources and, frankly, any other partners we can work 
with, to try to get to students and professionals very early in 
the pipeline.
    I think the help that you have given us through the Choice 
Act with the debt-reduction programs, particularly now that we 
can pay the lenders directly, it turns out to be a huge thing 
that is in the Choice Act. It will be very, very helpful. The 
Clay Hunt Act helps some more.
    But in general, if people aren't looking to get into that 
path at a critical juncture in their careers, which is 
generally going to be the last couple of years of medical 
school for doctors, we are going to have a problem.
    And you have probably seen recent reports from the 
Association of Medical Colleges about what shortages of doctors 
were, so we are going to be in tough competition with the 
private sector for both groups of professionals.

                             CREDENTIALING

    Senator Schatz. I would just add, in following up on 
Senators Kirk and Tester's line of questioning, in this space, 
that part of the problem is credentialing. And I understand you 
want psychiatrists and you want qualified mental health 
professionals, but you also want case management. You also want 
peer counseling. And you have lower thresholds for 
credentialing and you have the opportunity, at a lower price, 
to provide real mental health services. And so there is a 
tendency in any bureaucracy, not just yours, but there is a 
tendency in any bureaucracy to kind of push the work up, and 
for people of good faith to focus on credentialing and Q.M. 
where you are really comparing no service at all from getting 
somebody some help and back in the pipeline.
    Dr. Clancy. No, and we rely a lot on the two groups of 
individuals that you just mentioned, especially case managers. 
It is huge, because a growing proportion of the veterans we 
serve have multiple chronic illnesses, so they have mental 
health disorders as well as other medical problems. And 
coordinating that is a big, big challenge.
    Dr. Tuchschmidt. I would just like to add that we also have 
an array of mobile vet centers. So not only do we have our 
stationary vet centers around providing, I think, many of the 
kinds of services you are discussing, but we also have the 
mobile vet centers.
    One of the things that we are doing right now through the 
Choice legislation is looking at those to say what telehealth 
capacities do they need, what is the productivity of those, and 
the schedule for those vans.
    So we are doing a lot of work right now to look at how we 
can use that resource, particularly in rural areas, to reach 
out to veterans.

               STIGMATIZATION OF MENTAL HEALTH CHALLENGES

    Senator Schatz. I will just add, finally on this issue, you 
have the general trepidation that a lot of veterans have in 
terms of availing themselves of services at VA, but you also 
have the special challenges of the stigmatizations of mental 
health challenges. And some of this is changing generationally, 
depending on what war or conflict your veterans are coming 
from. But some of this has to go all the way down to the line 
level so that people are greeted to a welcoming environment 
when they enter VA and not made to feel like they have done 
something wrong or displayed some sort of weakness, in terms of 
wanting to avail themselves of mental health services.
    Dr. Clancy. Yes, so two points I would just make there, 
Senator. One is that many people find the vet centers, which 
are separate from, but a very vital asset for us, but they are 
separate from the main medical facilities, to be a much easier 
place to go in and share their problems.
    Many recent veterans, in particular, who don't like 
government and actually don't want to have much to do with 
government, find these centers a whole lot easier to deal with.
    The other place where I think we are making great inroads 
is integrating mental health professionals into primary care. 
As a primary care internist, I can't tell you how many times I 
have had that sensitive conversation with a patient and 
everyone agrees, we both agree, that the next step is going to 
be seeing some kind of mental health professional, except it 
doesn't happen.
    When that person is down the hall, and you can literally 
walk the veteran down and introduce them, that is what we sort 
of mean by a warm handoff. It makes a huge difference.
    So we think that voltage drop, if you will, will go down 
quite a bit.
    Senator Schatz. Thank you.
    Senator Kirk. Dr. Cassidy, a new member of the 
subcommittee.
    Senator Cassidy. Dr. Tuchschmidt, you were one of my 
resident fellows at L.A. County Hospital. May I point out, I 
have grayed far worse than you. And you are a very good 
instructor, so good to see you again, Jim.
    Dr. Clancy, thank you for the phone call yesterday. Very 
helpful. And thank you for the material you gave.

                   MENTAL HEALTH VISITS NO-SHOW RATES

    Now let me ask, we have both spoken yesterday and at the 
previous hearing regarding missed opportunities, folks who are 
no-show. And you were nice enough to give me this data from the 
Louisiana facilities. And you already have fiscal year 2015, so 
I assume that is fiscal year-to-date.
    So, actually, my gosh, Shreveport is getting worse with 
mental health for females going 23 percent missed to 26 percent 
missed, to 29 percent no-show rates, going in the wrong 
direction.
    Now the conversation we had on the phone was very helpful, 
and you used a term that I have told you I have already used 
again, that seeing something like that is diagnostic of a 
problem. You don't know the problem, but you know there is a 
problem.
    So that said, it is getting worse. What is the VA doing 
with this real-time data? This is going south, you know what 
I'm saying?
    Dr. Clancy. So the first thing that we do is we review data 
from across our system on an almost daily basis with our Deputy 
Secretary, both about how we are doing in terms of access and 
wait times, as well as what we see as inputs to problems with 
the access and wait times, and the missed opportunities rates 
is something there.
    The other thing that we are doing, in the case of your 
State, is trying to get a terrific network director in there, 
the last one having stepped down at the end of calendar year 
2014. We have an acting person in there now.
    Senator Cassidy. The network director would be over the 
entire system. But I suspect there is something particular 
about that hospital and particular about that mental health 
unit.
    Dr. Clancy. One of the things that I, in gathering this 
data for you, have become very interested in, is looking at--
the table I gave him, by the way, for his facilities has all 
veterans on one side and female veterans on the other.
    In some areas for some conditions, one of the issues for 
female patients, in general, is sometimes childcare. Some of 
our facilities have a way of dealing with that, others actually 
don't. But I think it is very important to know why it is that 
people aren't showing up.
    And I think, frankly, we have to do a better job in getting 
the word out and reminding people. Across our system, we do see 
that the missed opportunity or no-show rate for patients coming 
in for mental health visits tends to be higher than for other 
visits.
    Senator Cassidy. And increasing. I would just point that 
out.
    And knowing that you have only been on the job for a short 
period of time, this is just going in the wrong direction.
    Dr. Clancy. Yes.
    Senator Cassidy. And I encourage my colleagues, because Dr. 
Clancy was nice enough, I asked her for the granular data and 
she got it for the clinics in my State, showing the no-show 
rate. In private practice, that should just not happen. People 
are getting follow-up phone calls. And the fact that it is 
growing is not best practice. It is not standard practice.
    Secondly, we spoke yesterday. In my medical practice, I 
knew there were many that would come to see me and then 
subsequently go see the VA. I knew they had coverage, because I 
wasn't seeing them in the public hospital where I worked, but 
in my private practice.

                     THIRD PARTY INSURANCE BILLING

    So the next question is, knowing that there are those who 
have dual coverage, and that the VA is allowed to bill third-
party insurance companies in some cases, I am told that there 
is potentially $6 billion billed last year but only $2 billion 
collected.
    Knowing the generalized problems the VA has, it is easy to 
imagine that it was a failure of systems, but it could be just 
the normal sort of contract disputes between an insurance 
company and a provider.
    Any comments on that? We're leaving $4 billion on the 
table. Can we get some of that money to the taxpayer?
    Dr. Tuchschmidt. I am not sure about the amount we billed. 
We collected about, I want to say it is around $3.2 billion, is 
my recollection.
    The biggest reason that we don't collect, I think, is that 
a lot of the third-party insurance that our veterans have is 
essentially Medigap insurance. And without an explanation of 
benefits (EOB), that Medigap provider doesn't pay that claim, 
right, because there was no Medicare service.
    So we find that a lot of those claims go unpaid in our 
system.

                        NONRECURRING MAINTENANCE

    Senator Cassidy. Let me ask one more thing quickly. You 
have a supplemental appropriations, a second bite, if you will, 
which is $1.3 billion. And you know, that is a substantial 
amount of money. And it includes $247 million for nonrecurring 
maintenance (NRM).
    First question, why was this not included in the regular 
budget request for fiscal year 2016? Secondly, knowing that you 
received $5 billion in section 801 last year, some of which 
could be spent on nonrecurring facility management, how much of 
that was spent?
    Again, a lot of money, second bite, some of it seems it 
should be included in the regular budget, and there is also 
supplemental money last year. Any elaboration on that?
    Dr. Tuchschmidt. Yes, so of the $5 billion, roughly half of 
that is being spent on NRM and construction on space 
requirements. The other half is being spent on people. The 
space requirement is really frontloaded to this year, and 
people kind of more backloaded to the next year, because of the 
time it takes to recruit.
    And the amount of NRM requested in the budget, it is really 
a re-estimation of what we need to really meet our needs, 
particularly to have enough exam rooms per provider.
    Senator Cassidy. I yield back. I am over time. Thank you.
    Senator Kirk. The Senator for Connecticut.
    Senator Murphy. Thank you very much, Mr. Chairman and 
Senator Tester. It is an honor to be on this subcommittee with 
both of your leadership. Great to see both of you.

                         CHOICE ACT SECTION 802

    Dr. Clancy, you have about $10 billion through 2017 in 
mandatory money with which to implement the Veterans Choice 
programs. Is that right?
    Dr. Clancy. Yes.
    Senator Murphy. And this is in part to follow up to your 
question and answer with Senator Capito. You have seen maybe a 
slower than expected take-up thus far, but you are doing 
everything within your power right now. You are taking all of 
the necessary steps to make sure that the take-up is 
accelerated and that everyone that is eligible for this program 
is going to be able to take advantage of it. You are confident 
that you are taking those steps?
    Dr. Clancy. Yes.
    Senator Murphy. And so, let's just imagine for a moment a 
point at which having taken all of those steps, having done 
everything that you believe and collectively that we believe is 
necessary to have that program reach as many people as 
possible, you aren't then on track to expend the totality of 
that money. We have talked about just in the last half an hour 
a number of other needs within the VA, whether it be mental 
health needs, whether it be coordination services. Every single 
one of us probably has a list of capital projects that we would 
like to see undertaken.
    If perhaps the estimate that we put into the law doesn't 
actually turn out to be the case, how do we make sure that some 
of these other needs are taken care of or that you have the 
ability to take care of some of these other needs?
    Dr. Clancy. So I started this off in response to the 
chairman by saying that we felt it was important for us to 
present a budget that reflected our honest need for 
requirements, what it took to serve veterans. We have also 
requested flexibility in terms of this $10 billion of mandatory 
dollars.
    It becomes particularly acute, and we had a brief chance to 
chat about this previously, because we have two big buckets or 
opportunities to help veterans get care in the community. One 
is what we call non-VA care and does include Project ARCH and 
things like that, which comes out of our budget.
    That is discretionary, and then there is this mandatory 
pile.
    At one point, we thought many of the veterans for whom we 
are now buying care in the community with non-VA care, we would 
be doing that with Choice. That is not our experience to date.
    We have some continued process improvements to make, and I 
would also expect, just looking at the experience with the 
rollout of managed care in the private sector, that we will 
start to see a more enthusiastic uptake. I just don't know how 
steep that curve is for Choice. We know that many people who 
have long-established relationships with providers are not the 
first people to jump on-board a new option, so they are going 
to be a little slower to try something new.
    If we don't see that, that is why we are requesting 
flexibility, both to make sure that we can have a seamless 
experience for veterans, whether it is in our facilities 
through telehealth or by getting care in the community or 
addressing other underlying needs, like you just said.
    So it is a bit of juggling act. And unfortunately, our 
budget puts us in a funky position, because we have so many 
different lines to manage.
    You know, the example Secretary McDonald used was to 
imagine if you had a checking account for gas and one for food, 
and the food one is getting empty, and the price of gas drops, 
and you are hungry, right? I mean, that is actually the way we 
are trying to manage our budget right now, and that is what 
gets clunky. That was the request for flexibility.
    Senator Murphy. Well, I appreciate those comments. I think, 
as I mentioned, that our responsibility first is to make sure 
that we are building out this Choice program in a way that is 
true to the law, but I hope we would work with you to make sure 
that we don't leave this funding on the table, should we 
realize that we have the ability to reprogram it to the other 
needs that we probably can all pretty quickly agree on.
    Mr. Chairman, that is my only question. Thank you very 
much.
    Senator Kirk. The Senator for all of Alaska.

                     ALASKA AND THE CHOICE PROGRAM

    Senator Murkowski. Thank you, Mr. Chairman. Welcome to the 
subcommittee, and I'm pleased to have you back at the helm 
here, Mr. Chairman.
    I want to speak just a minute about the situation in 
Alaska. Sometimes I feel a bit like a broken record in trying 
to describe why it is so different, why it is so unique, the 
highest veteran population per capita amongst the States; 
second lowest population; facilities, very, very limited 
facilities, very disperse. We don't host a full service VA 
hospital, but we do have opportunities that we have created 
because of other Federal systems, whether it is working within 
the Indian Health Service (IHS).
    We have more patients than providers. We just simply don't 
have doctors that are taking Medicare-eligible individuals.
    So as we built out this legislation last year, quite 
honestly, it was going to be a very, very hard fit for Alaska. 
Initially, it was going to be that folks were paid on the 
Medicare rate, which, of course, in Alaska is lower than 
anything else. It would have chased everybody away. We have 
that adjusted.
    But still, we are limited to participation in the Choice 
Card program to a Medicare provider. And again, we just don't 
have the providers to go around. I am told that central office 
has reduced Alaska's VA budget for partnerships and purchased 
care about $78 million now. And because what we have done, what 
we built out over the years are all of these alternatives so 
our veterans can find some level of services, this is a problem 
for us.
    We just simply do not have facilities in these places where 
our veterans live. For so many years, the veteran was put on a 
plane to Seattle, to fill the gaps. We had some long battles in 
this subcommittee and others. Secretary Shinseki really stepped 
up and helped address how we could, again, fill in these gaps 
for services for our providers.
    And we work in partnership with our native health system. 
And by all accounts, this is working for us.
    The Choice Card, on the other hand, is untested. The 
provider needs to be willing to accept the card. Again, we have 
more patients than providers.
    I am concerned about where we are. The question, this is 
perhaps a little broader than what you have had from others, 
is, does the VA have enough flexibility to ensure that Alaska's 
veterans don't lose the gains that we have fought so hard to 
put into place? We are moving to the Choice Card, but are we 
going to see, almost by default, an erosion of the level of 
access that we have been able to build up over the years, 
utilizing other Federal partners?
    Dr. Clancy. I see absolutely no reason why we would see an 
erosion. You are right that it is early days for the Choice 
program, and we are committed to working with you.
    First, we are committed to finding any flexibility that we 
can, vis-a-vis the 40-mile rule. There is one----
    Senator Murkowski. We are already----
    Dr. Clancy. Yes.
    Senator Murkowski. All veterans in Alaska are enrolled.
    Dr. Clancy. Not relevant to Alaska, for sure.
    When you say that there has been a cut in the budget for 
purchased care, I think that what you are seeing is that, as a 
result of the Choice Act, we have consolidated a lot of the 
funding for purchased care to our central business office. But 
that doesn't necessarily mean that we are buying less purchased 
care.
    Thus far, our experience would suggest that that is not the 
case. And in fact, in the middle of our access crisis, when 
things felt particularly acute, what I learned was that some of 
the facilities in Alaska are very, very good at the 
coordination that goes on there, because they have had to be, 
and that is terrific.
    We also have spent to date about $10 million on 
partnerships with the Indian Health and Tribal Services. And I 
couldn't close this without acknowledging that Alaska has long 
been a source of inspiration for us, because of the Nuka 
clinic, which has won so many awards and really has inspired 
many of our efforts in primary care.
    Senator Murkowski. Well, I appreciate that, and I encourage 
you all to remember that we've had to think outside the box. 
We've had to be creative. And we have done it to relative 
success. So again, we would hate to see any erosion.

                  RECRUITMENT AND RETENTION IN ALASKA

    Very quickly in my remaining time, and this goes to Senator 
Tester's issue about recruitment, in many cases, the issue for 
us with VA care in Alaska has not been the wait to see a VA 
provider, but it has been this extraordinarily heavy caseload 
that our providers have, particularly in our community based 
outpatient clinics (CBOCs). And you have all heard the example 
of the CBOC there in Wasilla. You had a physician begging for 
help, begging for help, and they couldn't provide anybody to 
her. She eventually leaves.
    VA continues to make the excuse that we just can't get 
providers to Wasilla. This is the second largest community in 
the State now. It is on the road system. IHS seems to be able 
to recruit for places like Barrow, Kotzebue, Nome, all off the 
road systems.
    I can't figure out what the problem is here, and I would 
like to know, Dr. Clancy, that you are looking at this here, 
you are evaluating it, you are trying to figure out what it is 
that we are doing, because just an interim fix isn't addressing 
the needs of our veterans out there.
    Dr. Clancy. No, I hear you. And, I would say that 
recruiting and retention is probably our biggest number one 
challenge, particularly for some areas that are not well-
served.
    I did speak with your colleague Senator Tester yesterday, 
wondering if we might actually figure out working with the 
University of Washington, since it reaches out to those four 
States, including Alaska and Montana, to try to figure out if 
we can get more students into rotations that would have a focus 
on VA. So that is on my list of opportunities to explore.
    But I hear you, that we have to get more people up there.
    Senator Murkowski. We will keep pushing on that.
    Thank you, Mr. Chairman.
    Senator Kirk. The Senator for the land between Kenosha and 
Rhinelander.

                       TOMAH VAMC INVESTIGATIONS

    Senator Baldwin. And a few other places. Thank you, 
Chairman Kirk, and thank you, Ranking Member Tester.
    I would like to focus on two problems within the Veterans 
Health Administration, both nationwide and in Wisconsin, and 
ask what the VHA is doing to put solutions in place.
    It is apparent to me that the VHA lacks clear and 
appropriate system-wide policies and protocols, as well as 
suffers from inadequate oversight of individual facilities. By 
way of example, at the Tomah VA Medical Center in Wisconsin, 
current and former employees and patients have brought to my 
attention allegations of inappropriate opioid and 
benzodiazepine prescribing practices, and abusive 
administrative authority, including retaliation against 
whistleblowers.
    While the Tomah VA is currently the subject of a VA 
investigation led by you, Dr. Clancy, it is my hope that we can 
answer a few fundamental questions here today.
    In the case of your current investigation into the over-
prescription of opioids and retaliation at the Tomah VA Medical 
Center in Wisconsin, my office did bring a number of these 
concerns to the attention of the VA's central office in June of 
last year, and asked for an investigation at that time.
    However, the VA central office forwarded the letter to the 
regional VA office, VISN 12, to respond instead of looking into 
the matter on its own. Six months later, you have launched an 
investigation, full investigation.
    So why didn't the VA launch an investigation when my office 
first contacted the central office in June of last year?
    Dr. Clancy. So there were a number of investigations 
ongoing led by the network, and in retrospect and as we have 
discussed, the then-network director retired--or, he didn't 
retire; he's way too young for that--left at the end of October 
for a job in the private sector.
    What has surfaced for me is that there is less than a 
complete understanding about which issues at a network level 
are shared with central office, and that is a set of issues 
that we are working on very hard right now.
    I think the good news, and looking back at the timeline and 
going over all of this detail by detail for the past several 
years with the current acting network director, I think a lot 
of what they did was quite appropriate. There was an 
unfortunate miscommunication, or actually it was a 
communication, I will say that, and we have now clarified that 
for all of our facilities.
    When the director of the facility was told you may not 
share this inspector general's report with anyone, we have now 
clarified for all of our facility and network directors that 
those reports can be shared and should be shared, not only 
beyond the facility with the network but with the central 
office.
    Senator Baldwin. So that I can cover a little more 
territory, and I will stay around for a second round of 
questions, but to be clear, this wasn't a letter to the 
inspector general. This was a letter to the VA central office 
in June of last year.
    So what happened with that letter is rather than the 
central office responding, VISN 12, the network, responded on 
June 27, and ticked off a list of actions already taken to 
improve Tomah's prescribing practices, making it seem like 
everything was under control at Tomah, and ended by suggesting 
that I contact the chief of staff at Tomah directly if I had 
any further questions.
    It ends, ``Thank you for your inquiry and the opportunity 
to address the concerns raised by your constituent. If you have 
any additional questions, please contact David Houlihan, M.D., 
chief of staff,'' and lists the phone number.
    However, the Tomah chief of staff is at the center of a 
series of allegations regarding inappropriate prescribing 
practices and creating a culture of fear and intimidation at 
the facility.
    Do you believe that this was an appropriate response and a 
correct assessment of the situation to give a United States 
Senator?
    Dr. Clancy. With the perfect clarity that comes with 
hindsight, I would say no.
    Senator Baldwin. All right.
    Dr. Clancy. I did not see that letter. And as you said, it 
was referred to the network. I would very much hope that we 
would have a different set of actions right now.
    It has uncovered for me, in addition to the very specific 
circumstances at Tomah, some of the unique challenges of making 
sure that we have fair practices at some of our smaller 
facilities. At a larger facility, for example, Milwaukee, the 
chief of staff sees patients and has their practices reviewed. 
It is very easy to blind that just because it is a larger 
place. And by the way, he's an internist.
    At Tomah, this person is a psychiatrist. It is very, very 
difficult to actually blind their practices for the purposes of 
peer review. And, as you know, there are currently a number of 
investigations going on now, and we are not waiting, per our 
announcement yesterday and the fact that our Deputy Secretary 
is in Tomah today, yesterday and today. So that is where we 
are.
    Senator Baldwin. Will there be an opportunity for a second 
round of questions?
    Senator Kirk. I think we will go in the regular order.
    How are we doing here?
    We can give you additional time, if you like.
    Senator Baldwin. I appreciate it, then.
    At least three veterans--Thomas Patrick Baer, Jason 
Simcakoski, and Jacob Ward--who were treated at the Tomah VA 
have tragically lost their lives. Jason Simcakoski died at the 
facility.
    And I know there was a broad review involving the joint 
commission, but you are leading an investigation of the Tomah 
VA right now, which includes evaluating the treatment of 
patients. So I am asking, does your current investigation 
include an evaluation into the care that Jason Simcakoski 
received at the Tomah VA?
    Dr. Clancy. The network had led an evaluation and review of 
that, which included both people from the network--that is to 
say, outside the facility--and also involved in external review 
from our partner that we work with a lot, the quality 
improvement organization in California, Livanta. And that was 
prior to the investigation that was launched in January.
    And at this point, the inspector general is also reviewing 
that death. Their final report has not been done. I have had an 
informal conversation with them, but we are staying on top of 
that.
    Senator Baldwin. Jacob Ward also passed away of a drug 
overdose after he left the Tomah facility. However, he 
reportedly was treated with opioids when he was a patient at 
Tomah.
    I'd ask, does your current investigation include an 
evaluation of the care that Jacob Ward received while at Tomah?
    Dr. Clancy. His care and his ultimate death are being 
reviewed right now.
    Senator Baldwin. Okay. And then Thomas Patrick Baer passed 
away at the Gundersen Lutheran hospital in La Crosse, 
Wisconsin, after being transported from the facility at the 
Tomah VA. He initially sought care at the Tomah facility for a 
stroke, yet reports indicate that Tomah did not have a working 
C.T. scanner and failed to give him anticoagulants and didn't 
have an operational helicopter available to transport him 
quickly to another facility that could care for him.
    Does your current investigation include an evaluation of 
the care of Thomas Patrick Baer?
    Dr. Clancy. We have conducted a review of his care and his 
death. And his death and experiences are also currently under 
review by the Office of the Inspector General as well. In 
addition to that, as a result of our own review, we have 
identified deficiencies in care that we are addressing right 
now.
    It is a bit separate from the opioid safety issue, but 
there were clearly missed opportunities to identify the fact 
that he was probably having some of those symptoms while 
sitting in the waiting room, and in addition to the fact that 
he should have been sent to the other facility in Tomah. Their 
CAT scan was down for preventive maintenance, which happens, 
but he should have been sent to the other facility.
    Right now, we are actively exploring how it is that we 
might exploit our capabilities, both at Tomah and across the 
system, to make sure that veterans presenting with possible 
stroke could get their care by telehealth, if there is not a 
stroke team on-site, because today, if you have a stroke in 
Tomah, regardless of whether you are a veteran or not, it is 
not a great place to do it. It's much better to be in Madison, 
because they have all the capabilities there. But we have the 
capability to actually link those two.
    So that will be coming. But right now, it is under review 
by the inspector general.
    Senator Baldwin. Mr. Chairman, I have two more questions, 
if you'll indulge me. Otherwise, I can wait for a second round.
    Senator Kirk. I know this is a really important issue. I 
would like to give a chance to Mr. Boozman to eventually ask 
his questions.

                HOMELESS VETERANS REINTEGRATION PROGRAM

    Senator Boozman. Thank you, Mr. Chairman.
    Dr. Clancy, in your opening statement, you addressed 
veterans homelessness, which is, certainly, an issue that all 
of us on the committee care about and glad that you singled 
that out.
    I noticed in your testimony that you mention that HUD 
Veterans Affairs Supplemental Housing (HUD-VASH) programs that 
provide permanent housing to many veterans. Senator Tester and 
I have introduced a bill to reauthorize the Homeless Veterans 
Reintegration Program (HVRP).
    Are you supportive of reauthorizing HVRP?
    Dr. Clancy. We are supportive of anything that will help us 
with homeless veterans, for sure.
    What I can say is the one thing we have learned in terms of 
addressing this important problem, which is one of our top 
three priority goals for the Department, is that you have to 
get people in housing first, then you can address all other 
problems. So just as we have managed to work with partners in 
the Los Angeles community to dissolve a longstanding lawsuit 
and are trying to take advantage of the land there, there is 
almost no option that we wouldn't look at across the system to 
help people get into housing, and then address their other 
needs for healthcare, for employment, and so forth.
    Senator Boozman. Good, Dr. Clancy. And that brings up what 
we are trying. Part of this bill, what we are trying to do is 
that, in HUD-VASH, as the law stands now, if a veteran receives 
housing through an assistance program, they then become 
ineligible for HVRP because, technically, they are not homeless 
anymore.
    That seems crazy. That is only perpetuating the cycle of 
homelessness with many of these veterans.
    In our bill, we make a clarification of the law and allow 
veterans who are receiving housing through HUD-VASH to 
participate in a HVRP. And again, I would ask you if you would 
support that kind of change, which is a very commonsense change 
that Senator Tester and I are trying to get done.
    Dr. Clancy. We would be happy to work with you on that.
    What we know is we have made big improvements, in terms of 
homeless veterans, so that is great. But we have a long way to 
go.
    Senator Boozman. Good.
    Dr. Clancy. We have reduced the number by about a third, 
and some cities have been able to announce that for the moment 
they have solved the problem--New Orleans, Phoenix, and so 
forth. But we have to make that happen everywhere.
    Senator Boozman. I know it is an issue that everyone is 
working really hard on. Again, it doesn't seem to make sense to 
provide housing and then say, ``Well, they are not homeless 
anymore,'' and then eliminate benefits that could break the 
cycle, which we are all trying to do.

                       HEPATITUS C DRUG TREATMENT

    Let me ask you about hepatitis C. There are the new drugs 
on the market now that have up to a 97-percent cure rate. They 
truly are miracle drugs. That said, they come with a steep 
price tag. And I know that you are able to negotiate and a pill 
that normally costs $1,000, you are paying $540. That is a 
very, very good thing.
    One thing, though, that I am a little bit concerned about 
in the budget, you requested $7 million less for fiscal year 
2016, $690 million as compared to fiscal year 2015, $697 
million then. The projected advanced appropriation for fiscal 
year 2017 is $660 million. So you can see it is going down, 
which is a $30 million reduction.
    I guess the question is, why are we decreasing funding for 
hepatitis C, in the sense that we have this cure, which is very 
expensive, and in making that cure now, certainly, long term, 
are going to save the VA a tremendous amount of money as 
opposed to all the problems that we get with hepatitis, in the 
sense of liver failure and the very expensive things that come 
up in the future?
    Dr. Clancy. Sure. Just to take a quick moment to brag on 
things I had nothing personally to do with, but all of the 
science about screening for and treating people with hepatitis 
C really comes from VA, which is a really good thing.
    Some part of the change in budget may, in fact, be due to 
the fact that they are now shorter courses, these newer drugs. 
I can't overstate how important that is. The older drugs, some 
of which made you feel like you had the flu for a year, had 
very high dropout rates. So it didn't matter if the drug 
worked, because people stopped taking them. They felt awful.
    Now we have newer treatments that were employed enough to 
emerge on the market, sort of off-budget cycle, which is why we 
need to make a big investment.
    And very recently, we were able to arrange a negotiation 
with a company. I think it used to be part of Abbot AbbVie--am 
I saying that correctly?--which comes out of North Chicago, for 
a greatly reduced price per course of treatment, so we are 
giving you our best estimate.
    Some of this has to be an estimate, because it depends on 
the genotype of the virus, and so forth.
    But I think we are in good shape to cure this for many of 
the veterans who are affected. There is a little bit of 
estimation that goes on, as well, about screening newer 
veterans, in terms of how many cases----
    Senator Kirk. Dr. Clancy, if I can interrupt you a little 
bit. I understand the economics of this treatment. It's about 
$83 grand for a full course of treatment. That obviates the 
need for a liver transplant, which otherwise could cost the VA 
$300 grand.
    That is my understanding. Is that your understanding of the 
economics of the situation?
    Dr. Clancy. That would be one way to look at it, yes.
    Senator Boozman. Actually, with you getting the reduced 
prices, it is probably better than that, isn't it? I think that 
is the conventional, if you are a regular patient.
    Dr. Clancy. The newer treatment is somewhere between 20 and 
30 for a course of treatment, yes. It is just unclear how many 
veterans that will be the best fit for.
    Senator Boozman. I would just ask you to look at that. 
Again, we are dealing with a case that we truly do have a 
miracle drug. It's lots of money. As you mentioned, the side 
effects and the cure rate is just, like I said, it truly is a 
miracle drug.
    So thank you, Mr. Chairman.
    Dr. Clancy. The other point I would just make is, it is 
much easier to administer in our system. The older drugs mostly 
had to be done by specialists. Now primary care clinicians can 
do this. It is much, much easier to give out.
    Senator Kirk. Let me recognize the Senator for the greater 
Albuquerque metroplex.
    Senator Udall. Thank you, Chairman Kirk.
    And congratulations, Senator Tester, for your assumption of 
power in this subcommittee.
    I want to echo what Chairman Kirk said here. He pointed 
about the Frontlines to Lifelines Act. I am an original 
cosponsor, and I think this legislation is tremendously 
important for vets and transitioning vets. We have seen that in 
New Mexico. So I thank you for your hard work on that.
    Dr. Clancy, thank you for taking the time to be here with 
us on the VA budget. This budget, as you know, is of utmost 
importance to our Nation's veterans and to veterans in New 
Mexico, for sure.
    Last year, I submitted concerns from employees at the VA to 
the VA Office of Inspector General, and these concerns centered 
around issues of scheduling and timeliness of VA care. But 
ultimately they were about a loss of trust between the VA and 
many of our veterans, a trust that I think the VA is still 
trying to recover.
    In New Mexico, the controversy has led to the appointment 
of a new director of our VA hospital. And New Mexico veterans 
and I really appreciate this new director and his efforts. He's 
traveling the State. He's meeting directly with veterans, 
holding a series of town halls, really trying to put himself in 
a position of turning around what happened there at the VA.
    And most veterans I have spoken to believe that the care 
that they receive at the VA is second to none, if they can get 
in the door and get the care.
    And this budget, I appreciate very much, helps support 
that. This budget, however, also helps to ensure that the VA's 
care remains second to none in the future, and that 
improvements are made where care is lacking.
    For example, in your document, you talk about, and I am 
quoting here, ``VA researchers are pursuing,'' and this is an 
area I think you are very familiar with because you headed up 
the research part of the establishment for 10 years, ``VA 
researchers are pursuing a way to address Iraq and Afghanistan 
veterans' most pressing mental and physical health issues.'' 
And they include, PTSD, traumatic brain injury (TBI), traumatic 
limb loss, sensory dysfunction and loss, pain, and polytrauma.
    And the work the VA researchers do in these areas also 
benefits veterans of all ages, just like you were pointing out 
with the hepatitis C research. And we really appreciate your 
efforts in that area.

                      OPEN-AIR BURN PITS REGISTRY

    My question focuses on open-air burn pits, and veterans 
coming in contact with burn pits and then getting serious 
illnesses, respiratory illnesses and others. And it seems to 
me, in looking at all these lists and looking at the VA 
research justification, in the justification, the VA mentions 
mental health, homelessness, pain management, TBI, and a number 
of other areas, except exposure to open-air burn pits. In fact, 
the only mention of the open-air burn pits that I could find in 
the justification was that the registry has been created.
    Dr. Clancy, I am asking you if the VA is not making open-
air burn pits research a priority in this budget on par with 
other signature ailments of Iraq and Afghanistan, then just 
what is the VA planning on doing with the registry and how does 
the VA intend to research ailments caused by exposure to these 
open-air burn pits?
    Dr. Clancy. So thank you for the question. It is a topic 
that I am particularly interested in, in part because I have 
some close colleagues who have taken a great interest in this 
outside of VA.
    There has been a little bit of research done in the VA, 
some of it coming out of Northport, New York, but we have a lot 
more to learn. So I am personally quite thrilled by the brisk, 
enthusiastic response to opening this registry. It took us a 
little bit longer to get launched than we had hoped, but I want 
to say that we have tens of thousands of people enrolled right 
now.
    I think the first step that will offer us is generating 
hypotheses, what seems to be the most promising. The prior 
research I cited was a very small, well-done study, but 
actually to look at much larger numbers of individuals to see 
what their experiences have been.
    I might yield to my colleague here, who is a pulmonologist, 
if you had more to say about the burn pits. Okay.
    Senator Udall. She's covered it all, yes? She's not even an 
expert in pulmonology.
    Dr. Clancy. So I think that will be a first step, and I 
think that we are likely to learn a lot that we didn't know 
about this. And some of that I think is going to come from 
figuring out what was the exposure, really. That is a huge area 
of investigation for us, writ large, whether you are talking 
about agent orange, or the C-123 planes, or other types of 
exposures.
    We just got a report today from the Institute of Medicine 
on getting some clarifying guidance for people who were exposed 
to toxins at Camp Lejeune. I think we are going to see more and 
more of this in the future, and I think the airborne issues 
will be a big part of that.
    Senator Udall. Thank you, Dr. Clancy, for your work there. 
And do you think you need additional authorities to work with 
both public and private research institutions to share 
information in the registry and allow that research to take 
place between veterans' research and out in the private sector, 
universities and places like that?
    Dr. Clancy. I don't think we do right now. But if I should 
perceive any barriers, I will be on your doorstep to let you 
know.
    Senator Udall. Okay. Thank you very much.
    Sorry for running over a little, Chairman Kirk.

                               CHOICE ACT

    Senator Kirk. Let me start the second round here and ask 
you about the Choice Act. I understand the Department is using 
some pretty low utilization expectation numbers from veterans. 
I would ask you, do you have good third-party validation on 
those numbers? If we get it all wrong, the committee may under-
appropriate and you may not have enough money to take care of 
people as we promised in the act.
    Dr. Clancy. So just about every aspect of VA healthcare 
will be assessed by independent organizations. That was written 
into the law. And frankly, we welcome that. I think it is an 
incredible gift. And, in fact, I spoke to the Blue Ribbon 
Panel, along with Dr. Tuchschmidt, a few weeks ago, just to 
thank them in advance for all the hard work they are going to 
do.
    I am not surprised by the low utilization at this point in 
time. I think the bigger question is what happens over the next 
3 to 6 months to a year. And that we are just going to have to 
watch very closely.
    But I will tell you that we are consulting with private 
industry, who knows a lot more about the insurance business 
than we do, both with an eye toward getting help with problem-
solving right now, as well as trying to figure out what 
capabilities we need to bring in-house.
    Senator Kirk. Thank you.
    Senator Tester.
    Senator Tester. Yes. Thank you, Mr. Chairman.

                NOMINEES FOR UNDER SECRETARY FOR HEALTH

    Dr. Clancy and Dr. Tuchschmidt, one has an ``interim,'' the 
other has an ``acting'' before their name. At the VA hearing we 
had last week or 2 weeks ago, I asked the Secretary, and he 
said he was going to put some names forward. That hasn't been 
done yet.
    Has he indicated to you when he's going to put names forth, 
for you guys?
    Dr. Clancy. I heard what you heard. That is all I can say 
right now.

      RECRUITMENT OF PHYSICIAN ASSISTANTS AND NURSE PRACTITIONERS

    Senator Tester. Okay. We will follow up with him. I think 
it does speak to the problem, quite frankly.
    Can you tell me to what extent does VHA grant full practice 
authority to physician assistants and nurse practitioners?
    Dr. Clancy. Right now, our policy is that, as you know, 
there is great variation among the States, so as a Federal 
system, all of our professionals have to be licensed in a 
State. And if you are a nurse practitioner, for example, that 
comes from a State that gives a lot more latitude to nurse 
practitioners, then you have the opportunity to use that, 
depending on which facility you are in and so forth.
    Senator Tester. Are you actively recruiting nurse 
practitioners and physician assistants in those States in which 
they have that authority?
    Dr. Clancy. They can work anywhere, as long as they are 
licensed in a State. What we are looking at now is whether we 
should have a system----
    Senator Tester. So let me get to recruitment. Are you 
actively recruiting those folks?
    Dr. Clancy. Yes.
    Senator Tester. Okay, good.
    Dr. Clancy. Without question.

               REIMBURSABLE PAYMENTS TO NON-VA PROVIDERS

    Senator Tester. I am going to give an example. You tell me 
how pronounced this is in the VA.
    Kalispell Regional Medical Center in Kalispell, Montana, is 
owed more than $500,000--these are their numbers, not yours--in 
2014. That is the bad news. The good news is, 2015 payments are 
coming in just fine.
    Number one, is this an outlier? And number two, if it isn't 
an outlier, how are we taking care of this? And quite frankly, 
from a parochial standpoint, how are you dealing with Kalispell 
Regional Medical Center right now? Go ahead.
    Dr. Tuchschmidt. So we centralized under the Choice Act. We 
centralized the funds. So we track our timeliness of payments.
    Senator Tester. Yes.
    Dr. Tuchschmidt. They did deteriorate. And right now, we 
have a corrective action plan to get back on track by the end 
of April. I don't know about Kalispell, per se, but I wrote it 
down. I will go follow up on that.
    Senator Tester. Okay.
    Dr. Tuchschmidt. We do have some places where we----
    Senator Tester. How many Kalispells do you have out there?
    Dr. Tuchschmidt. That I don't know, but I can tell you that 
we had about 2,400 people, places, bills, that we owed beyond a 
year, and we are trying to catch up with those.
    Actually, most of them are disputes about whether the care 
that was rendered was authorized by us.
    Senator Tester. Yes.
    Dr. Tuchschmidt. But we are working to resolve all of those 
by the end of----
    Senator Tester. I don't need to tell you the trouble there. 
I mean, if we are talking about building partnerships, and they 
are not getting paid, it's tough to build a partnership, okay?
    Dr. Tuchschmidt. You are preaching to the choir.
    Senator Tester. Okay, all right.

             GRANTS FOR STATE EXTENDED CARE BUDGET REQUEST

    The priority list for building projects, your priority 
list, 2015 fiscal year, $409 million for projects, yet your 
request is $80 million--$80 million for a program that needs 
$400 million.
    Can you give me thoughts on why you requested $80 million, 
and whether we are doing anything more than just treading water 
when it comes to facilities? And if these numbers are wrong, 
tell me, because I am getting it from these guys, you know?
    Dr. Tuchschmidt. So I think we have our 27 leases that we 
are pursuing. Some of those are funded in prior fiscal years, 
so that we are now bringing online. So we have a significant 
need, for sure, for construction. In fact, I would think it is 
probably----
    Senator Tester. This is for extended care facilities, by 
the way, not the whole baby, just the extended care facilities, 
to be clear. I'm sorry.
    Dr. Tuchschmidt. Yes. Your $80 million number threw me off. 
I wasn't sure.
    Senator Tester. Sorry. I should have prefaced that. Keep 
going.
    Dr. Tuchschmidt. Yes. So I don't have the specifics on the 
extended care facilities, but I am happy to get that 
information to you, so that you have that.
    Senator Tester. Okay. We want the budget to match the need. 
I think that is going to be the challenge for this 
subcommittee. I am giving you flexibility in making sure that 
you have enough money to meet the needs of the veterans out 
there.
    And when it comes to extended care facilities, in 
particular, the $409 million vs. $80 million, that is less than 
one-fifth, less than 20 percent. So it is a big issue.
    Thank you, Mr. Chairman.
    Senator Kirk. The Senator for King Cove, Alaska.
    Senator Murkowski. Thank you, happy to be the Senator for 
King Cove, Alaska, Mr. Chairman.

            PATIENT-CENTERED PRIMARY CARE CONTRACT IN ALASKA

    Let me ask about the patient-centered primary care contract 
for the State. I will tell you, I was a little bit surprised to 
learn after the contract was issued that the PC3 contract 
provides and that the contractor may set the reimbursement 
rates for the care that is referred outside of the VA system. 
But as you know, we don't have managed care within the State. 
We have more patients than providers, as I mentioned, and 
providers reject managed care.
    TRICARE does not allow its contractor to set rates in the 
State. So when we learned that TRICARE was charged under its 
contract with negotiating rates in Alaska, again, it really 
gets your attention. It really surprised you there.
    So we were told that when the PC3 contract was entered 
into, my staff checked with your folks at the VA to ensure that 
the contractor was aware of the need to pay market rates there 
in the State. We were assured at the time that the contractor 
knew about that.
    But what we are beginning to get now are complaints, and I 
will acknowledge that they're sporadic complaints, but 
complaints that the providers are not getting market rates.
    We heard just recently from an anesthesia group that was 
very frustrated in working with the PC3 contract and is 
considering no longer serving our VA patients, which, of 
course, is exactly the opposite direction of where we want to 
take this.
    Is this something that the VA is monitoring?
    Dr. Tuchschmidt. So I don't know about the PC3 contract in 
Alaska provisions, per se. I wasn't really involved at the time 
the PC3 contract was constructed, but I will go look at that.
    I will tell you that I think you are raising probably one 
of the most significant issues we face, and it is not just for 
Alaska right now. I think that one of the things that we are 
doing really prompted by the Choice legislation is to ask kind 
of ourselves what is the future of purchased care in VA? What 
does that look like? What does a VA health plan look like? We 
have employed Deloitte to help us do an assessment of our 
current purchased care processes.
    And I think we have a whole smorgasbord, quite frankly, of 
options from local contracts to the spot market to sharing 
agreements, to PC3, to Choice, to Project ARCH.
    Senator Murkowski. And they can be different all over the 
country.
    Dr. Tuchschmidt. And they are different all over the 
country.
    And I think one of the things that we are going to be doing 
over the next few months is sitting down and saying, ``How do 
we reconcile all of this?'' And quite frankly, TriWest tells me 
almost on a daily basis what an awful position we have put them 
in, because they are going out to the same providers that we 
are contracting with, saying, ``Would you like a PC3 contract? 
And by the way, we have a Choice contract over here.'' And it 
is mind boggling.
    So we definitely have to resolve this. I think you've hit 
the nail on the head.
    Dr. Clancy. If I could just make one point?
    Senator Murkowski. I would ask you to look not only at 
Alaska but look across the system, because it just doesn't seem 
to be trending right here for us.
    Dr. Clancy. We would not want one-size-fits-all, right, 
because the markets are very different.
    Senator Murkowski. Right.
    Dr. Clancy. Alaska is going to be very different than 
Wisconsin, for example, or New Mexico. They are just very 
different constellations, ecosystems, if you will, of medical 
services. But at the same time, we have a lot of work to do to 
try to rationalize this because if it is illogical for us, it 
is going to be much, much harder to give veterans a seamless, 
terrific experience every time.
    Senator Murkowski. Yes, I appreciate that.

                VA AND DOD MENTAL HEALTH DRUG FORMULARY

    One last question, and, Dr. Clancy, we were trying to 
connect yesterday as I was traveling cross-country, and we 
weren't able to do it, but I think you were alerted. I had read 
the op-ed piece in the Washington Post this weekend by the 
former Vice Chief of Staff of the Army, General Chiarelli, 
suggesting that the VA's mental health drug formulary is just 
too narrow to ensure that the medications that the Department 
of Defense provides, when that individual separates and then 
moves over to the VA side, that they can be maintained after he 
leaves service.
    Now, it is my understanding that you have attempted to 
address this through regulations. General Chiarelli suggests in 
his op-ed--in fact, is pretty emphatic--that the regulations 
aren't sufficient, that they leave broad loopholes.
    Can you tell me where we are with this? Does he have valid 
concerns here?
    Dr. Clancy. So first, given his work and interest in mental 
health, traumatic brain injury, and so forth, I mean, I have 
huge respect for his contributions and building awareness of 
these issues. What I can tell you is we are working very 
closely with the Department of Defense to ensure as seamless a 
transition as we possibly can for servicemembers who are 
leaving the military and coming to VA.
    As a result, in particular, of the executive action issued 
by the President in August, focused on improving mental 
healthcare, a whole series of actions, we actually have 
directed all of our facilities and clinicians that 
servicemembers can continue their medications at least until 
they can have time to be evaluated by a clinician in VA.
    Some drugs that are good for short-term treatment may not 
be the ideal choice for longer term treatment, and it is often 
very common with the chronic use of drugs to treat different 
mental health disorders that you are going to need to make 
changes. You know, one antidepressant works for a while, but 
then it doesn't work so well and so forth.
    And we do that for other medications as well. We would be 
happy to come and give you a full brief on that.
    I think a little bit of what happened was that the 
commission that General Chiarelli was working on, which has 
just delivered its report to the Department of Defense, the 
military compensation and retirements--I can never remember the 
entire acronym--was working independently, as they very much 
wanted to, at the time when this executive action and other 
activities were in process.
    Senator Murkowski. I would be curious to know and 
understand a little bit more, because I thought, at least the 
way that the General had outlined it, it appeared that we were 
not syncing the systems. And when the systems don't line up, 
then it is the veteran and the veteran's care that suffers.
    So I don't know whether he's correct in that. We do still 
have loopholes that need to be addressed. But if you can 
provide me with a little more information on that?
    Has the Department been in contact with the General about 
his recommendations, do you know?
    Dr. Clancy. I have been trying but have not managed to 
connect with him.
    Senator Murkowski. Okay. All right.
    Dr. Clancy. He is actually part of the Blue Ribbon Panel 
that is reviewing all of these independent assessments, but 
cell phone land didn't make it possible.
    Senator Murkowski. All right. I appreciate it.
    Thank you, Mr. Chairman.
    Senator Kirk. The Senator from Wisconsin.
    Senator Baldwin. Thank you.

                TOMAH VA INVESTIGATION ON WHISTLEBLOWERS

    We have already had an opportunity to converse, Dr. Clancy, 
about concerns raised by some of the whistleblowers in the 
Tomah investigation who want to speak up but feel that they 
can't because of confusing guidance they have received by 
managers and supervisors at the Tomah VA regarding Health 
Insurance Portability and Accountability Act (HIPAA) privacy 
concerns, privacy regulations, and the so-called section 7332 
data, which I understand to be related privacy issues.
    So I would ask you to give me an update right now as to 
whether there will be updated guidance that your team of 
investigators can share. And will you ensure that once there is 
clarified and updated guidance, that everyone who wants to 
speak up and meet with and discuss and talk with your 
investigators are able to do so, because we are getting mixed 
messages even as of earlier today as to whether that updated 
HIPAA guidance has been put together?
    Dr. Clancy. I appreciate you sharing what you are hearing 
from many people. The Drug Enforcement Administration (DEA) 
went into Tomah to do an investigation. They had been there in 
the past, and apparently, I don't think that was productive or 
didn't lead to any definitive conclusions.
    But very recently they went in and there was a little bit 
of confusion, some of which was that our regional counsel was 
advising us that they didn't have the right paperwork to be 
looking at information that was sensitive at the patient level.
    I have been informed by the acting network director that 
they have resolved those issues. But since you are hearing this 
even today, we will loopback. I know that Sloan Gibson, as I 
said, is on the ground today, reinforcing for people that we 
want to hear from everyone who has concerns about this or other 
issues.
    Senator Baldwin. Right. And it was in a conversation with 
him earlier today that it sounds like they may not have 
definitively resolved those concerns, and so I am very eager to 
have that done.
    When do you expect to complete your investigation? And will 
you make the full report public at that time?
    Dr. Clancy. So we will be making at least summaries of it 
public. As you know, the investigations on the clinical side 
are protected by peer review privilege, in the same way they 
would be at any other hospital. But we will be releasing a 
summary of the results from the first phase of clinical 
investigation.
    The second phase, when it is done, we will have some kind 
of summary as well, although it too will be a protected peer 
review, mostly so that we can get at all the facts. And as our 
announcement yesterday indicated, in our work for the past few 
weeks, in terms of rolling out this new tool to make it easier, 
much, much easier for primary care clinicians to do the right 
thing, we are not waiting until all the investigations are done 
to make improvements that we can see right now. So that is 
nursing care and the urgent care part of Tomah, with respect to 
the care that Mr. Baer got and other issues there.
    It is also about safe prescribing of opiates. And the tool 
that we announced yesterday, as I think you know, was all about 
making it quite visible to clinicians in a very easy way which 
of their patients are on opiates, what kind of dose have they 
had, the urine drug testing, are they on benzodiazepines, and 
other things where there might be an adverse reaction, and so 
forth.
    It also allows them to see whether patients getting those 
narcotics from other points of care in our system.
    Senator Baldwin. I would just state for the record that 
absolute transparency is so critical here. There have been 
numerous concerns raised about unpublished reports, about lack 
of transparency in the oversight of the Tomah facility. And I 
will want to press further on that when it comes to the final 
report of this investigation.

                          OPIOIDS PRESCRIPTION

    Lastly, you have talked already a little bit about the 
VHA's review of how opioids are prescribed system-wide. Since 
this is an appropriations subcommittee hearing, I would ask, 
are those efforts prioritized in your budget request?
    Dr. Clancy. I think that that is on-going work that is 
built into our medical care budget, but I have to get back to 
you on that, in terms of how that has happened.
    This initiative was fully rolled out in February 2014, and 
we have seen system-wide decreases in the use of opioids, so 
that is good.
    But we are also seeing, when we actually have this new tool 
and look at our dashboards, that, frankly, we need to up our 
game at Tomah and across the system. And again, this new tool 
will help people do that.
    I don't know how much it is specifically identified. It is 
no different than we don't have a separate line item for, say, 
high blood pressure or diabetes. But we can, certainly, give 
you an accounting of what all this is costing, if that would 
help.
    Senator Baldwin. That, and as you do system-wide overhauls, 
as you try, and as non-VA medical systems try to roll 
significant protocol changes, those are big undertakings.
    Dr. Clancy. Yes.
    Senator Baldwin. And in many systems, it fails because 
adequate attention and emphasis isn't put on it.
    Dr. Clancy. Yes.
    Senator Baldwin. We want to make sure that you are in a 
capacity to get everyone's attention system-wide, so as we work 
on the appropriations subcommittee marks, I want to be in 
communication on that. Thank you.
    Dr. Clancy. Thank you.
    I will just say, for the record, one of the things that I 
found actually quite thrilling was, as a result of being part 
of many, many phone calls across our system, so I reach more 
than 2,000 primary care docs and facility directors, network 
directors, and really over the past few weeks to say this is 
really important, we are making progress, and it is not easy, 
because 50 to 60 percent of the veterans that we serve have 
some kind of chronic pain issue, as compared to about 30 
percent of Americans. I actually got a lot of fan emails saying 
thank you.
    And some part of that, I believe, Senator, is about these 
patients have other issues too, and we want to pay a lot of 
attention to opioid safety and making sure we are helping and 
deploying every tool in our toolbox in terms of pain management 
to help these veterans. But we don't want to miss dealing with 
their other medical issues, as well. And I am starting to hear 
that from some of our primary care docs. So I think this tool 
will be helpful.
    Senator Kirk. Let me just add my concerns to the Senator 
from Wisconsin's.
    I have been warned through my family and patients that I 
have seen, including an ex-staffer of mine, there is a growing 
method in medicine just to give the patient happy pills, which 
emphasize opioids, and get them pretty heavily addicted. We are 
very worried about that. The Tomah facility was called in the 
press the candy store.

                  GAO REPORTS VHA A HIGH-RISK PROGRAM

    Let me close with one last question. The Government 
Accountability Office (GAO) has said that VHA is a high-risk 
government program. Do you agree with that assessment by the 
GAO? Could you comment on that?
    Dr. Clancy. You know, I think by every criterion, given our 
experience in 2014, it would be hard to make a strong argument 
that we shouldn't be on their high-risk list. The one question 
I had for them, they did come and give us a heads-up, and I 
wanted to know what were the criteria for getting off the list. 
There are some high-risk lists in government programs that can 
be hard to get off of, for a variety of reasons. And they 
actually assured me that with improvements--I think they were 
blown away when we said we welcome your reports and we are 
paying far more attention to them in a systematic fashion than 
we have in the past. In fact, I was glad they were sitting 
down. I thought one of them was going to hit the floor when we 
said that.
    I think they have perceived in the past that we weren't 
necessarily attentive to their findings. And to that I would 
say, with new leadership, it's a new day.
    Senator Kirk. I will note our clerk told me about some Navy 
leaders who one time said, ``Don't give me another budget 
increase because it encourages my leadership to not make 
choices.'' As long as you are receiving steady increases, you 
are in a culture that will not make any tough choices. That may 
be the lesson here.
    Dr. Clancy. Well, what I would say is the budget that we 
have presented for fiscal year 2016----
    Senator Kirk. He corrects me that that was Admiral Mullen, 
the Chairman of the Joint Chiefs of Staff, who said that.
    Dr. Clancy. I would never disrespect any individual 
publicly. I will simply say the budget that we submitted 
represents our very best effort to reflect to you a true 
requirement, as best we see it, to meet veterans' needs.
    And I will also say that Secretary McDonald is strongly 
committed to finding all possible efficiencies. But you can't 
really get there until you kind of address the backlog of need.
    Senator Kirk. Thank you. I think we have kind of beat this 
to death.
    Senator Hoeven.
    Senator Hoeven. Thank you, Mr. Chairman.
    Senator Kirk. You get the patience award now.
    Senator Hoeven. Thank you.
    Senator Kirk. Go ahead.
    Senator Hoeven. I would like to thank both of you for 
coming today to testify. And, Dr. Clancy, to pick up on some 
things that you and I talked about earlier, thanks so much for 
the earlier conversation.

               REIMBURSEMENT FOR NON-VA NURSING HOME CARE

    The first one I want to pick up is provider or VA 
reimbursement to nursing homes. Right now, as you are aware, 
when a veteran stays in a nursing home, if the reimbursement 
comes through Medicare, the Centers for Medicare and Medicaid 
Services (CMS), then that nursing home is not required to 
comply with the small business contracting requirements. But if 
the reimbursement comes through the VA, then they are, which 
means that in many cases, a nursing home won't take VA 
reimbursement for taking care of a veteran, which denies 
veterans opportunity for care closer to home.
    So I believe that that is something we need to remedy. I 
talked to both Secretary McDonald and yourself, but I would 
like to know what you believe we can do to ensure that nursing 
homes aren't subject to that small business contracting 
requirement, so that they will accept VA reimbursement.
    Dr. Clancy. I will first acknowledge that I have not been 
burdened by a legal education and say that what I understand 
from our legal team is that we need a much stronger basis for 
provider agreements that we have used in the past than we have 
right now. And we would look forward to working with you on 
that.
    Senator Hoeven. Well, what we need to get to is, what 
authority did you have to provide reimbursement and not subject 
the nursing homes to that requirement? And does it require a 
statutory fix, in which case, I am more than happy, in fact----
    Dr. Clancy. Yes, it does require a statutory fix, and we 
will follow up with you with specific language and needs.
    Right now, our only alternative, it appears, is to use 
contracts, which, as you acknowledge, can be very, very 
difficult for some of the providers who can provide great care 
to veterans to comply with.

                     PROVIDER AGREEMENT LEGISLATION

    Senator Hoeven. I have legislations to do that. I have 
talked to Senator Isakson, who is the chairman of the Veterans' 
Affairs Committee. He's supportive. So I would like to go work 
with you on the wording and have your support and see if we 
can't pass that this year.
    Dr. Clancy. Terrific. I will come visit with my general 
counsel.
    Senator Hoeven. Thank you.

                       CHOICE ACT'S 40-MILE RULE

    The other is, on the Veterans Choice legislation, which I 
very much support and cosponsored, the challenge that I talked 
to you about earlier, and that is under the 40-mile rule, we 
have situations where we have individuals who are within 40 
miles of a CBOC, community-based outpatient clinic, but a long 
way away from a VA healthcare facility where they can get full 
services.
    So in cases where they have proximity of 40 miles or less 
to that CBOC, they can face long-distance travel to get to 
medical services that the CBOC doesn't provide, which can be a 
real problem, versus being able to get those services from a 
local provider, if they are more than 40 miles away.
    So somebody is actually disadvantaged by being within 40 
miles. They can be forced, like in our case, in our State, to 
travel in excess of 300 miles one way to get the health 
services they need rather than getting them locally when a CBOC 
doesn't provide them.
    So that is a real challenge for us, in terms of the 
Veterans Choice Act, that we need to address and would like 
your input on what you think is the best way we can accomplish 
that.
    Dr. Clancy. So we are working through an array of options 
right now. Full credit to Dr. Tuchschmidt, who is leading this. 
There are one or two minor tweaks that we could make that I 
think will help some veterans, but that is actually kind of at 
the margin.
    I think more than that, we are probably going to definitely 
need your assistance, because we are going to need some 
legislative change or amendments to make that possible.
    And I did come back after our conversation and explain to 
Jim about the great map in your office with all the pins and 
that you were illustrating the distances travelled. I get that.
    One of the challenges we have right now, and again this 
gets back to our request for flexibility, for some of the 
specific examples you gave me, the gentleman who travelled 300 
miles to get a shot, for example, not technically eligible for 
Choice right now, as the law is written, we actually could 
arrange something through our non-VA care program. Again, that 
comes out of our budget choices and mandatory separate 
allocation. That is why we are looking for a little bit of 
flexibility. But we are looking for relief on the 40 miles, 
because it has been a big problem for many, many veterans. I 
can't say we have heard from all of them, but we have heard 
from many.
    Senator Hoeven. And I think if there is statutory help or 
flexibility that we can give you there, that is what we want to 
do. Like I say, I am already working with Senator Moran of 
Kansas on legislation to do that. But it can actually be a cost 
savings for the VA because there may be cases, or I think in 
many cases, getting that procedure close to home may actually 
save the VA money, versus that veteran travelling to a 
healthcare center, getting it there, having to travel back, and 
then all the time and cost to travel and lodging, and/or him or 
her missing their work and that kind of thing.
    So there may be some work we have to do with CBO, but I 
think this is a fix that, one, serves veterans, two, can be 
cost-effective. And we need to nail down what authorities you 
have, so where can we do this administratively? And we need, 
you didn't call him an ombudsman, but a person at each of the 
VA health facilities that can actually provide these decisions 
for when individuals can get the services at a local healthcare 
provider, versus traveling to the VA facility.
    Dr. Clancy. Yes. I am not sure ombudsman is quite the right 
word. But effectively, we have a champion for the Choice 
program at each facility, so that is a good thing. And we have 
other people who deal with non-VA care.
    Ultimately, I think, we need to have a more logical way for 
veterans not to have to worry about this and to figure out that 
they are on the wrong end of the facility. ``I went to the 
wrong department. Now I need to go over here to get what I 
need.'' We need to be integrating that in a way that is logical 
and completely easy for veterans. That is where we need to get 
to.
    Senator Hoeven. And that is what we need to understand is, 
do your Choice Champions have enough flexibility to provide the 
authority to get this healthcare locally when it makes sense, 
or is there something else that is needed so that you can 
actually deliver on this?
    Dr. Clancy. That is a process that we are doing a deep dive 
on right now, to figure out how we can do this and where do we 
need legislative help, and that includes the 40 miles. So we 
will be back to you in the very, very near future.
    Senator Hoeven. Thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Kirk. Thank you.
    All right, let's wrap her up. Let me thank our witnesses 
for coming and tell you that the record will remain open until 
the close of business on Friday.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
         Questions Submitted to the Office of Inspector General
                     Department of Veterans Affairs
              Questions Submitted by Senator Tammy Baldwin
    Question. The Veterans Affairs Office of Inspector General (OIG) 
completed a report in March 2014 regarding the Tomah VA Medical Center 
in Tomah, Wisconsin. The VA OIG has conveyed that it shared the report 
with Tomah VA Medical Center leadership. My office contacted the Tomah 
VAMC on April 7, 2014, on behalf of a constituent and requested a full 
review and investigation of various concerns, including concerns about 
opioid and benzodiazepine prescribing practices at the facility. In his 
response, Mario DeSanctis, Tomah VA Medical Center Director, did not 
mention the existence of the March 2014 VA OIG Report.
    At the March 10, 2015, hearing, Dr. Clancy stated that the director 
of the facility was told not to share the report with anyone. However, 
Dr. Clancy further stated that those reports can and should be shared.
    Who told Tomah VA Medical Center leadership not to share the March 
2014 VA OIG report?
    Answer. There is some confusion about the difference between 
administrative closures and OIG final reports. In March 2014, the OIG 
administratively closed our inspection of the Tomah VAMC. The OIG did 
not tell the Tomah VAMC leadership not to share the March 2014 
administrative closure report with anyone, including the VA Central 
Office. In advance of a July 3, 2014, briefing with the Tomah VA 
Medical Center Director, Tomah VAMC Organizational Improvement Analyst, 
and Veterans Integrated Service Network (VISN 12)--VA Great Lakes 
Health Care System Quality Management Officer, an OIG physician sent 
the Tomah VAMC Director the report of administrative closure. He 
advised the Tomah VAMC Director that because the report was an internal 
document, copies should not be distributed to others. A similar 
advisement was given to the VISN 12 Network Director prior to a 
briefing on July 16, 2014. This advisement in no way was intended to 
mean that the contents could not be discussed with or shared with 
senior Veterans Health Administration (VHA) officials. The intention 
was to protect the contents from external disclosure because, as an 
administrative closure, it had not been reviewed for potential 
redactions by the OIG Release of Information Office for public release 
under the Freedom of Information Act (FOIA). This is consistent with 
the OIG's advisement to Senator Baldwin's staff at a July 22, 2014, 
briefing to submit a FOIA request to obtain the administrative closure. 
The version provided to Senator Baldwin on August 29, 2014, and 
subsequently posted on the OIG Web site on February 6, 2015, contained 
redactions by the OIG Release of Information Office pursuant to the 
Freedom of Information Act.
    We also note that advisements against external distribution of 
draft reports are routine. For example, OIG draft reports issued to VA 
officials for comment bear the following warning:

        ``This is not a final OIG report and is subject to revision. 
        Recipients of this draft report must not, under any 
        circumstances, show or release its contents for purposes other 
        than official review and comment. It must be safe guarded to 
        prevent publication or other improper disclosure of the 
        information it contains. This draft and all copies of it remain 
        the property of the OIG.''

    While the administrative closure report was not initially sent to 
VHA Central Office officials when it was sent to the Tomah VAMC and 
VISN 12 Network Directors, VHA Central Office staff were well aware of 
the allegations since April 13, 2011. The OIG Hotline sent an 
information copy of the allegations to staff in the office of the 
Deputy Under Secretary for Health for Operations and Management at VHA 
Central Office on April 13, 2011, when the OIG Hotline sent a case 
referral to the VISN 12 Network Director for review, fact-finding, and 
potential corrective action.
    The issues under review at Tomah were the frequent subject of 
discussion at regular OIG-VHA monthly meetings between the Assistant 
Inspector General for Healthcare Inspections and senior VHA Central 
Office staff, to include the VHA Chief of Staff and VHA Management 
Review Service (MRS) Director. In addition, on March 11, 2014, the 
Assistant Inspector General for Healthcare Inspections provided VHA 
Central Office senior staff with a list of open complaints that the OIG 
was working (including Tomah) and the major topic of concern 
(medication management, pain management, quality of care) to further 
their ability to take whatever action they deemed appropriate. The 
Tomah administrative closure was signed a few days later on March 14, 
2014.

    Question. Please describe the VHA's current policy for the sharing 
of OIG reports that are distributed to local VA facilities. In 
addition, please include answers to the following questions:
    Answer. The liaison office between VHA and the OIG is VHA's MRS, 
which is located in VHA Central Office. The OIG sends MRS copies of all 
draft OIG reports that deal with VHA including reports by the OIG's 
Office of Healthcare Inspections on individual facilities. We request 
that any comments to OIG draft reports from the facility or the VISN be 
routed through MRS so as to ensure that VHA Central Office is aware of 
the report. VHA will provide more detailed information on their 
internal practices directly under separate correspondence.

    Question. Are local VA facilities currently directed to make OIG 
reports available to the public?
    Answer. OIG draft reports are considered pre-decisional and as such 
include the following warning when the report is with VA officials for 
comment:

        ``This is not a final OIG report and is subject to revision. 
        Recipients of this draft report must not, under any 
        circumstances, show or release its contents for purposes other 
        than official review and comment. It must be safe guarded to 
        prevent publication or other improper disclosure of the 
        information it contains. This draft and all copies of it remain 
        the property of the OIG.''

    With regard to a final OIG report, the standard distribution list 
includes the Veterans Health Administration in VHA Central Office for 
all reports whether they are national reports or a report on a single 
facility. If it is a single facility report, the Director of that 
facility and the VISN Director who has management oversight of that 
facility are included in the distribution. Also included in the 
standard distribution list for all OIG reports are all OIG oversight 
committees and the Members of Congress who represent the facility or 
who may have constituents who use the facility. The OIG electronically 
distributes the final report to all addresses at the same time. This is 
how reports are routinely published. We also post all final reports on 
our public Web site the same day as they are issued to VA. Members of 
the public who subscribe to the OIG's email distribution program or to 
our Really Simple Syndication (RSS) feed, which automatically downloads 
new content when posted to our Web site, also receive reports at the 
same time the reports are issued.
    The Tomah Administrative Closure was not processed this way because 
it was not a final report. As stated above, the closure was provided to 
facility and VISN management prior to a conference call and a meeting 
with OIG staff. When Senator Baldwin's office contacted the OIG about a 
similar issue, we communicated to her office that the OIG had performed 
an inspection, held a teleconference briefing, and subsequently 
provided a copy of the report to that office as allowable under the 
Freedom of Information Act and the Privacy Act.
    The OIG has changed its policy regarding administrative closures in 
March 2015. As a result of a review of OIG decisionmaking practices on 
closing reviews administratively, the then-Deputy Inspector General 
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 the Release of 
Information Office. This process will ensure consistency in 
decisionmaking regarding when and how public release of related 
documents is handled.

    Question. Are local VA facilities currently directed to share OIG 
reports with Members of Congress?
    Answer. For final OIG reports, the OIG shares the report according 
to a standard distribution list that includes the OIG's oversight 
committees and Members of Congress who represent or have constituents 
who may use the facility or facilities that are the topic of the 
report.

    Question. Are local VA facilities currently directed to share OIG 
reports with congressional committees with jurisdiction over the VA?
    Answer. For final OIG reports, the OIG shares the report according 
to a standard distribution list that includes the OIG's oversight 
committees and Members of Congress who represent or have constituents 
who may use the facility or facilities that are the topic of the 
report.

                          SUBCOMMITTEE RECESS

    Senator Kirk. We will also have our next hearing on 
Tuesday, March 17.
    I close this hearing. Thanks, everybody.
    [Whereupon, at 4:12 p.m., Tuesday, March 10, the 
subcommittee was recessed, to reconvene Tuesday, March 17, at a 
time subject to the call of the Chair.]