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

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

                                  ----------

                            TUESDAY, APRIL 21, 2015

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

        The subcommittee met at 2:31 p.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Mark Kirk (chairman) presiding.
        Present: Senators Kirk, Murkowski, Hoeven, Collins,
    Boozman, Capito, Cassidy, Tester, Murray, Reed, Udall, Schatz,
    Baldwin, Murphy, and Mikulski.

                         DEPARTMENT OF VETERANS AFFAIRS

    STATEMENT OF HON. ROBERT A. McDONALD, SECRETARY
    ACCOMPANIED BY:

            STEPHEN WARREN, CIO, OFFICE OF INFORMATION AND TECHNOLOGY
            DR. CAROLYN M. CLANCY, INTERIM UNDER SECRETARY FOR HEALTH,
                VETERANS HEALTH ADMINISTRATION
            DANNY PUMMILL, PRINCIPAL DEPUTY UNDER SECRETARY FOR BENEFITS,
                VETERANS BENEFITS ADMINISTRATION

                     OPENING STATEMENT OF SENATOR MARK KIRK

        Senator Kirk. Let's begin.
        Tom Fuller, who you know about, was a Vietnam veteran in
    the Marines, and presented himself to the Hines VA with chest
    pains, went to see Dr. Dieter, who was the head of cardiology
    at Hines, and Dieter did not want him to be in his win/loss
    record, referred him to the floor, and there Tom expired of a
    heart attack.
        I want to make sure that kind of thing never happens to our
    veterans, that we have confident, strong, administration of our
    people. Mr. Secretary, I have raised this issue with you
    multiple times.
        Behind that is the story of Lisa Nee, who is a
    cardiologist, as she witnessed this whole thing and thought it
    was an outright malpractice happening in this case.
        I know you have a 10 minute opener, Mr. Secretary.
        Senator Kirk. Senator Tester.

                        STATEMENT OF SENATOR JON TESTER

        Senator Tester. Thank you, Mr. Chairman. I have a pretty
    brief opening statement, and then we will get after it. I just
    want to thank Chairman Kirk for his leadership on this
    subcommittee, and I want to welcome Secretary McDonald, Dr.
    Clancy, and Mr. Pummill, and thank you for your work as you
    appear before this subcommittee, and your commitment to this
    Nation's veterans.
        Mr. Secretary, it is good to see you again. Thank you for
    coming to Montana. It was a great trip, very informative, and I
    hope you feel the same way.
        Moving forward, I hope that we can work closely together to
    address some of the concerns and issues raised during our trip,
    and some of the issues that will be raised today.
        I have been impressed by your leadership, Mr. Secretary,
    your candor, your willingness to accept accountability and
    confront tough issues. I do not have to tell you, the
    Department of Veterans Affairs (VA) is an agency that is under
    siege every day. You experience that every day. We have seen
    several scandals that have shaken the confidence of the VA,
    have created mistrust for some of our veterans, and have
    created mistrust with some of our public.
        Restoring that trust is one of your chief tasks, and I know
    you know that, but a lot of that responsibility also falls on
    our shoulders. It is critical that we provide you with the
    tools you need to get the job done.
        I firmly believe that we need to hold accountable those who
    have abused their authority for personal gain, but also I
    believe that we need to appropriately recognize and applaud the
    dedication of the vast majority of VA employees who come to
    work every single day with the singular goal of helping every
    veteran whose lives they touch.
        Dedicating all our time to pummeling--no pun intended--the
    VA for past failures is not a recipe for reform or success, and
    our veterans deserve more than that. At the end of the day, we
    are in this together, and by law and fully supported by
    Congress, American veterans are entitled to a healthcare system
    and benefits program that is far superior to any comparable
    government or private sector benefits, and for very good
    reason.
        The VA model of providing direct healthcare and benefits to
    our Nation's veterans is something our veterans have come to
    rely on. It is something that Congress has enshrined in law.
        We each have a responsibility here to sustain this model of
    service. The VA must reform and improve its delivery of
    services to veterans, and Congress needs to step up and fulfill
    the responsibility to fully fund the VA's model of service that
    veterans have come to expect and demand.
        I want to thank you again, Mr. Secretary, Dr. Clancy, Mr.
    Pummill, for being before this subcommittee. I look forward to
    your testimony. Thank you, Mr. Chairman.

                  SUMMARY STATEMENT OF HON. ROBERT A. MCDONALD

        Secretary McDonald. Chairman Kirk, Ranking Member Tester,
    and members of the subcommittee, thanks for the opportunity to
    discuss VA's 2016 and 2017 advance appropriations requests and
    budget.
        We appreciate your steadfast support for veterans and the
    assistance of veteran service organizations (VSOs).
        As VA moves from a serious crisis, we have a critical
    opportunity. We intend to take full advantage of it, to make VA
    a model agency and customer experience comparable to the best
    private sector businesses.
        Currently, 11 million of 22 million veterans are
    registered, enrolled, or use at least one VA benefit or
    service. The cost of fulfilling our obligations grows over time
    because veterans' demands for services and benefits continue to
    increase.
        In 2014, 40 years after the war ended, 22 percent of
    Vietnam veterans were receiving service connected disability
    benefits. We expect that percentage to continue to increase.
    From 1960 to the year 2000, the percentage of veterans
    receiving VA compensation was about 8.5 percent, but in the
    last 14 years, that has more than doubled, to 19 percent.
        In 2009, the Veterans Benefits Administration (VBA)
    completed about 987,000 claims. In fiscal year 2017, we project
    we will complete over 1.4 million claims, a 47-percent
    increase.
        There has been a huge growth in the number of medical
    issues in claims, 2.7 million in 2009, and a projected 5.9
    million in 2017. That is a 115-percent increase over just 8
    years.
        From 1950 to 1995, the average degree of disability amongst
    veterans was 30 percent. Since 2000, the average degree of
    disability has risen to 47.7 percent. While the total number of
    veterans is declining, the number of those seeking care and
    benefits is increasing due to more than a decade of war, agent
    orange related claims, an unlimited claims appeal process,
    increased claims issues, far greater survival rates of the
    wounded, and more sophisticated medical treatments.
        It is important to understand why. The most important
    consideration is an aging veteran population. Forty years ago,
    2.2 million veterans were 65 years old or older. That is 7.5
    percent of the population. In 2017, we expect 9.8 million will
    be 65 years or older. That is 46 percent. We now serve an older
    population with a greater demand for care, more chronic
    conditions, and less able to afford private sector care.
        As veterans see positive changes at VA and as the military
    downsizes, those choosing VA will continue to rise. We are
    listening hard to what veterans, Congress, employees, and VSOs
    tell us, driving us to a historic Department-wide
    transformation, changing VA's culture, making veterans the
    center of everything we do.
        We call it MyVA. MyVA focuses on five objectives to
    revolutionize culture and focus on veterans' outcomes rather
    than internal metrics.
        First, improving the veteran experience so that every
    veteran has a seamless, integrated and responsive customer
    service experience every single time.
        Second, improving employee experience by eliminating
    barriers to customer service and focusing on our people and our
    culture to better serve veterans.
        Third, improving our internal support services.
        Fourth, establishing a culture of continuous improvement to
    identify and correct problems and replicate solutions at all
    facilities.
        Last, fifth, enhancing strategic partnerships. We cannot do
    this by ourselves. Strategic partnerships become critical.
        Reorganizing the Department geographically is a first step
    in achieving this goal. In the past, VA had nine disjointed
    geographic organization structures. Our new organization
    framework has one national structure with five districts
    aligning VA's organizational boundaries. Veterans will see one
    VA rather than multiple disconnected organizations.
        Last, MyVA is about ensuring sound stewardship of taxpayer
    dollars, will integrate management improvement systems to
    ensure operational efficiency. We need congressional help. VA
    cannot be a sound steward of resources with our current
    portfolio of assets. No business would carry such a portfolio.
        It is time to close old substandard and under utilized
    facilities, 900 VA facilities are over 90 years old. More than
    1,300 are over 70 years old. VA currently has 336 buildings
    vacant or less than 50 percent occupied. That is 10.5 million
    square feet of empty space costing about $24 million annually.
        We could use these funds to hire roughly 200 registered
    nurses for a year, pay for 144,000 primary care visits of
    veterans, or support 41,900 days of nursing home care for
    veterans. Please help us do the right thing.
        MyVA reforms will take time, but in the long term, they
    will enable us to better provide veterans earned benefits and
    earned services.
        Our 2016 VA budget request allows us to continue
    transforming under MyVA. It requests $168.8 billion, $73.5
    billion in discretionary funds, and $95.3 billion in mandatory
    funds, a discretionary request increase of $5.2 billion above
    the 2015 enacted level, to continue serving the growing number
    of veterans seeking care and benefits.
        The resources required in the 2016 budget request are in
    addition to those Congress provided in the Veterans Choice Act.
    We do not know how many veterans will ultimately use the act
    for non-VA care, what we call community care, or how much it
    will cost, our estimates range from $4 billion on the low end
    to $13 billion on the high end.
        We do know that our recent decision to change the
    definition of the 40 mile provision of the act from straight
    line to road distance will approximately double the number of
    veterans eligible for care under the act.
        As Deputy Secretary Sloan Gibson testified last week, we
    proposed funding the increased cost of our new Denver Hospital
    by requesting funds from the Choice Act. The Denver project has
    a long history. While poor VA project and contract management
    contributed to problems, decisions made years ago brought us to
    this point.
        In my opinion, the significant increase in the cost of the
    Denver project results from four factors: first, not locking
    down design early in the process. Second, some design aspects
    that added costs. Third, increases to construction costs in the
    Denver market while we had not effectively negotiated a firm
    target price, and fourth, premiums paid to contractors for
    perceived risk due to problems with the project.
        We have learned from these past mistakes and are taking
    meaningful corrective actions to improve performance. Among
    those actions are requiring major medical construction projects
    to achieve at least 35 percent design prior to publishing costs
    and schedule information or requesting funds.
        Second, implementing a deliberate requirements control
    process, any significant changes in project scope or costs will
    be approved by me prior to submission to Congress.
        Third, institutionalizing a project review board similar to
    what the Corps of Engineers District Offices use.
        Fourth, conducting pre-construction reviews of major
    projects, and fifth, integrating medical equipment planners
    into the construction project teams from concept through
    activation.
        Those measures will help us in the future but they will not
    finish Denver. After analysis by the Corps of Engineers, we
    informed the subcommittee that the total estimated cost of the
    facility will be $1.73 billion, an authorization increase of
    $930 million, and additional funding of $830 million.
        We believe requesting funds from the Choice Act is the best
    approach among the difficult choices before us. Now we must
    work with this subcommittee and others to secure the funding.
        Last, if the President's budget request is cut by the $1.4
    billion proposed by your colleagues in the House, those
    reductions would have these effects: it would cut veterans'
    medical care by $690 million, the equivalent of over 70,000
    fewer veterans receiving VA medical care compared to the
    President's request.
        It would eliminate the funding for four major construction
    projects. This cut would reduce VA's ability to provide
    additional outpatient services and will impact the following
    projects: the planned rehab therapy building in St. Louis,
    Missouri; the initial phase of the Alameda, California
    outpatient clinic; construction of the long sought after French
    Camp, California community-based outpatient clinic (CBOC); the
    replacement 155-bed community living center in Perry Point,
    Maryland.
        It would also eliminate funding for cemetery expansion
    projects in St. Louis, Portland, Riverside, and Pensacola, and
    a new columbarium in Alameda, reducing our ability to provide
    burial honors for as many as 18,000 veterans and eligible
    family members annually.
        The impact of these cuts to veterans' care and benefits is
    unacceptable to me, and I know it is unacceptable to members of
    Congress.
        Mr. Chairman, ranking member, members of the subcommittee,
    thanks again for your support for veterans and for working on
    these budget requests. We look forward to your questions. Thank
    you, Chairman.
        [The statement follows:]
                 Prepared Statement of Hon. Robert A. McDonald
        Chairman Kirk, Ranking Member Tester, Distinguished Members of the
    Senate Appropriations Subcommittee on Military Construction and
    Veterans Affairs:

        Thank you for the opportunity to present the President's 2016
    budget and 2017 advance appropriations (AA) requests for the Department
    of Veterans Affairs (VA). This budget continues the President's
    staunch, unwavering support for veterans, their families, and
    survivors. We value the support to VA that Congress has demonstrated in
    providing the resources and legislative authorities needed to honor our
    Nation's veterans.
        This is a critical moment for VA. We are emerging from one of the
    most serious crises the Department has ever experienced. But with this
    crisis, VA also has before it perhaps the greatest opportunity in its
    history to enhance care for veterans and build a more efficient and
    effective system. We are listening hard to what veterans, Congress,
    employees, Veterans Service Organizations (VSOs), and other
    stakeholders are telling us. Since my nomination on June 30, 2014, I
    have made more than 100 visits to VA field sites--including 31 visits
    to VA Medical Centers, nine visits to VA Community-Based Outpatient
    Clinics and 10 visits to Homeless Veteran program sites. I participated
    in the Los Angeles Point-in-Time Homeless Veterans count. I've made six
    visits to VA Regional Offices and six visits to VA cemeteries. I have
    witnessed first-hand the operations at VA polytrauma centers, a
    veterans community living center, a hospice, an insurance center, and a
    domiciliary. I have attended 29 veteran engagements through
    partnerships and 25 stakeholder events. I have also visited 16 medical
    schools and universities to recruit newly minted clinical professionals
    for VA's healthcare system. All of these visits are influencing the way
    VA is moving forward. We are implementing an historic department-wide
    transformation, changing VA's culture, and making the veteran the
    center of everything we do. We aspire to make the VA a model agency
    that is held up as an example for other Government agencies to follow
    with respect to customer experience and stewardship of the taxpayer's
    resources. We strive to be comparable to the very best private sector
    businesses, with efficient and effective operations.
        The President's 2016 budget will allow VA to operate the largest
    integrated healthcare system in the country, including over 1,900 VA
    points of healthcare and approximately 9.4 million veterans enrolled to
    receive care; the tenth largest life insurance provider, covering both
    active duty servicemembers and enrolled veterans; a compensation and
    pension benefits program serving over 5.2 million veterans and
    survivors; an education assistance program serving 1.2 million
    students; a home mortgage program with a portfolio of over 2 million
    active loans guaranteed by VA; and the largest national cemetery system
    that leads the Nation as a high-performing organization, with
    projections to inter 129,200 veterans and family members in 2016. VA's
    2016 budget request is essential to begin to address the resource
    requirements necessary to move VA into the future, address the crisis
    we are in, and meet our obligation to provide timely, quality
    healthcare and services to veterans.
        The 2016 budget for VA requests $168.8 billion--$73.5 billion in
    discretionary funds, including medical care collections, and $95.3
    billion in mandatory funds for veterans benefits programs. The
    discretionary request reflects an increase of $5.2 billion (7.5
    percent) above the 2015 enacted level. The budget also requests a 2017
    AA for Medical Care of $63.3 billion and a first-time AA request of
    $104.0 billion for three mandatory accounts that support veterans'
    benefit payments (i.e., Compensation and Pensions, Readjustment
    Benefits, and Insurance and Indemnities). These investments, together
    with the 2016 budget, will provide authorities, funding, and other
    tools to enhance service to veterans in the short term while
    strengthening the underlying VA system to better serve veterans in the
    future. However, more resources in certain areas will be required to
    ensure that the VA system can provide timely, high-quality healthcare
    into the future. In the coming months, the administration will submit
    legislation to allow the VA Secretary to reallocate a portion of
    Veterans Choice Program funding to best meet veteran's needs. This will
    allow the Secretary to make essential investments in VA system
    priorities in a fiscally responsible, budget-neutral manner.
                 myva--driving reforms and improving efficiency
        In order to transform VA into an organization of which veterans,
    employees, and Americans can be proud, we are beginning with a
    commitment to critically assess ourselves. Transformation must start
    with organizational reforms to better unify the Department's efforts on
    behalf of veterans. These reforms will take time, but will center
    around the ICARE values and provide veterans the services and benefits
    they have earned and deserve.
        The goal of MyVA is to reorient the Department around the needs of
    veterans. MyVA will create a VA that eliminates barriers to putting
    customers first; measures success by the outcomes to veterans as
    opposed to our internal processes; and integrates across programs and
    organizations to optimize productivity and efficiency. MyVA focuses on
    five major themes:

      --Improving the veteran experience
      --Improving the employee experience, and achieving ``people
            excellence'' so we can better serve veterans
      --Establishing a culture of continuous improvement
      --Improving our internal support services
      --Enhancing strategic partnerships

        The overarching principle is our focus on the veteran experience.
    We want every veteran to have a seamless, integrated, and responsive
    customer service experience every time. We are taking the first step
    towards better integration of the Department by moving from nine
    separate regional maps to one. This realignment will align VA's
    disparate organizational boundaries into a single framework, easing
    internal coordination and collaboration between business lines, and
    allowing VA to provide customer service training and capabilities
    across the agency. This will make the department more seamless to
    veterans, who will begin to perceive their interactions with one VA,
    rather than individual organizations. The new organizational framework
    will have five geographically-named districts, which we worked with
    Veteran Service Organizations to name: North Atlantic, Southeast,
    Midwest, Continental, and Pacific.
        MyVA will empower employees with the tools they need to better
    serve veterans, and will revolutionize VA's culture by emphasizing
    continuous improvement, setting conditions at the local level for
    issues to be raised, addressed, and solutions replicated across as many
    facilities as needed to achieve enterprise level results.
        MyVA is also about ensuring that VA is a sound steward of the
    taxpayer dollar. By improving our internal support services, we will
    ensure that our processes support VA employees serving veterans and
    that we effectively balance exceptional veteran-centric service with
    operational efficiency. We are using a business lens to assess all
    aspects of VA operations and will pursue changes to allow VA to deliver
    care and services more efficiently and effectively while delivering the
    highest value to veterans and taxpayers. By exploring opportunities to
    enhance Strategic Partnerships, we will ensure the best and most
    effective organizations--public, private, non-profits, and volunteer--
    work with VA to best serve veterans.
        In addition, we are creating a new Digital Services Team, comprised
    of the country's best developers, designers, and digital product
    managers, who will work across VA to design and deploy world-class
    digital services for America's veterans. Our digital services experts
    will help the Department achieve the MyVA vision through improved
    electronic access to VA services that works across veterans' computers,
    tablets, kiosks, and mobile devices.
        We anticipate this will be the largest department-wide
    transformation in VA's history. It will be the product of ideas and
    insights shared by veterans, employees, members of Congress, VSOs, and
    other stakeholders.

                     Before: VA's Nine Organizational Maps
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                     After: A Single, Coordinated Framework

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                        closing unsustainable facilities
        VA cannot be a sound steward of the taxpayer's resources with the
    asset portfolio it is carrying. No business would carry such a
    portfolio--and our veterans deserve better. It is time to close VA's
    old, substandard, and underutilized facilities. Of 5,565 VA medical
    facilities--which include hospitals, clinics, warehouses, and other
    assets that support medical operations--more than 900 facilities are
    over 90 years old, and more than 1,300 facilities are over 70 years
    old. Overall, 60 percent of VA facilities are more than 50 years old.

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        We need to move forward with closing locations that are not
    economically sustainable and old, outdated buildings that are
    challenging to maintain and provide little or no value to our
    customers. VA currently has 336 buildings that are vacant or less than
    50 percent occupied, which are excess to our needs. This means we have
    to maintain over 10.5 million square feet of unneeded space--taking
    funding from needed veteran services. For example, we estimate that it
    costs VA $24 million annually to maintain and operate vacant and
    underutilized buildings. These funds could be better used to hire
    roughly 200 Registered Nurses for 1 year; pay for 144,000 veteran
    primary care visits; provide veterans 13,500 bed days of inpatient
    care; or support 41,900 days of nursing home care for veterans in
    Community Living Centers. The President's 2016 budget includes two
    legislative proposals that would aid VA in disposing of these
    unnecessary assets. The first is the Government-wide Civilian Property
    Realignment Act, which would enable Federal agencies to pursue
    consolidation and disposals in a streamlined way. The second proposal
    would authorize VA to pursue Enhanced-Use Lease (EUL) agreements beyond
    the currently authorized purpose of creating ``supportive housing'' as
    defined in 38 U.S.C. Sec. 8161(3). Our existing EUL authority does not
    allow VA to enter into a wide range of innovative agreements that could
    benefit veterans.
        VA faces many obstacles to rightsizing our capital asset portfolio.
    For example, under an Enhanced Use Lease project, VA's selected third-
    party developer sought to demolish the vacant building shown below in
    order to provide land for the development of housing for homeless
    veterans. The state historic preservation office did not support the
    developer's plan to demolish the building, so in the interest of time
    and funding, the developer decided to forego demolishing the building.
    This action forced VA to incur the costs to mothball and maintain this
    unneeded building and limited the amount of land that was available to
    redevelop to provide housing for veterans. I have met with National
    Historic Building advocates to discuss repurposing the buildings we
    close, and look forward to a spirited, positive dialogue on this issue.

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       Photo: Minneapolis, Minnesota vacant building, quartermaster gas
                            station, built in 1932.

        As the veteran population has migrated, VA's capital infrastructure
    has not kept pace. We continue to operate medical facilities in legacy
    locations, in places where the veteran population is small or
    shrinking. We do this at the expense of creating new access and right-
    sized capacity for larger numbers of veterans in the locations where
    the veteran population is growing. For example, in one hospital with an
    operating capacity of ten medical beds, the average daily patient
    census is five patients or less. At this facility, VA is required to
    maintain adequate infrastructure such as lab, x-ray, and other support
    in place continuously, regardless of the facility's low utilization
    rate. The cost per patient to maintain a small operation such as this
    one is higher than the cost in some of our large, highly complex
    facilities. Additionally, the patient volume and complexity of care
    make it difficult, if not impossible, for physicians and nurses to
    maintain clinical skills and competencies. This example is not an
    anomaly--there are many others in VA.
        VA needs to better align its healthcare facilities to meet today's
    healthcare delivery models, which are shifting away from long inpatient
    stays to greater outpatient care. We also need to modernize our
    facilities to ensure they provide ready access to women, who now
    comprise 11 percent of all veterans and 20 percent of our military.
    Where hospitals no longer make sense, due to a declining veteran
    population or demographic shifts, VA must look for ways to partner with
    local hospitals and healthcare systems to serve veterans. Much of
    healthcare today is about creating partnerships and interdependencies
    to better serve patients and to contain costs. VA must be part of that.
        We know that it is difficult for Members of Congress to contemplate
    the closing of a facility in their own district, even when that
    facility is underutilized and wasteful. Yet, given the current and
    future demands on the VA system, we cannot afford to waste scarce
    resources on an inefficient system. We would like to work with Members
    of Congress to do the harder right, rather than the easier wrong. We
    ask for your help to realign our medical facilities to best serve our
    veterans and shed facilities that are not economically viable and no
    longer provide value.
                   veterans' demand for services and benefits
        We know that veterans' demand for services and benefits continues
    to rise for decades after conflicts end. And we know that the veteran
    population is aging. In 2017, 9.8 million, or 46 percent of the 21.1
    million veteran population will be age 65 or older. This compares with
    2.2 million, or 7.5 percent, in 1975. veterans' care often occurs many
    years after they served in uniform, so this is a long-term issue for
    VA. Just since 2002, the number of veterans receiving outpatient
    services has grown by more than 76 percent.

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        Fueled by more than a decade of war, Agent Orange-related
    disability compensation claims, a complex, non-linear claims appeal
    process, demographic shifts, increased medical claims issues, and other
    factors, veterans' demand for services and benefits has exceeded VA's
    capacity to meet it. VA has worked with the Ad Council on a pro bono
    advertising campaign to encourage more veterans to sign up for their
    benefits, but we are reluctant to launch the campaign at a time when
    our capacity is stretched to its limit.

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        We must ensure that demand for services and benefits does not
    outstrip our capacity to provide them. VA must build the capacity now
    to meet future demand. We look forward to working with you to identify
    and prioritize spending to best serve the interests of veterans and our
    Nation.
          the veterans access, choice, and accountability act of 2014
        The funding provided in the Veterans Access, Choice, and
    Accountability Act of 2014 (Veterans Choice Act) was an important step
    in moving VA on the path to improved access to care for veterans. VA
    greatly appreciates these additional resources provided by the
    Congress--$15 billion to allow veterans additional access to healthcare
    within the community and address current access and capacity shortfalls
    that are inherent within VA. While it is clear that purchased care
    plays an important role, it should not be seen as a replacement for a
    strong and vital veterans' healthcare system.
        The emergency resources provided in the Veterans Choice Act are not
    permanent, but are being used to address the current access crisis, but
    do not fully address VA's longstanding capital infrastructure
    requirements. Because VA has limited experience with the new Veterans
    Choice Program, it is difficult to predict veterans' use of the
    program, or its interaction with the medical care base budget. Our
    current estimates of the total healthcare costs for the Choice Program
    range from a low of $3.8 billion to a maximum of $20.4 billion over the
    3-year program.

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    Data source: VA Office of the General Counsel, Economic Impact Analysis
        for RIN 2900-AP24, ``Expanded Access to Non-VA Care through the
                           Veterans Choice Program''

        The variance is the result of significant uncertainty surrounding
    eligible veterans' participation and utilization of non-VA medical
    services. Two categories of veterans are eligible to participate--those
    living outside the Act's 40-mile distance, which as of April 24, 2015
    will be refined to reflect driving distance (fastest) from the nearest
    VA facility including CBOCs, or when we cannot provide care within 30
    days of the clinically indicated date or preferred date of the veteran.
    Each eligible veteran must make his or her own decision about care in
    the community. For example, a veteran may prefer to be seen at the VA
    by his or her regular doctor, even though there is a waiting period,
    rather than see a new private sector physician in a shorter time
    period. Also, wait times may be high in the community for specialty
    appointments, and veterans may elect to receive their specialty care
    from VA.
                        ensuring veterans access to care
        Veterans are demanding more services from VA than ever before. The
    number of veterans who are seeking VA medical care continues to grow
    steadily. Compared to fiscal year 2009, the number of patients is
    projected to increase by 20 percent by fiscal year 2016. We now serve a
    population that is older, with more chronic conditions, and less able
    to afford care in the private sector. And, as veterans see the results
    of the positive changes we are making, we are confident that the number
    of veterans utilizing VA services will rise. Currently, 11 million of
    the 22 million veterans in this country are registered, enrolled, or
    use at least one VA benefit or service. Our 2016 budget requests the
    necessary resources to allow us to serve the growing number of veterans
    who selflessly served our Nation.
        In 2016, the number of veterans enrolled in VA medical care will be
    nearly 9.4 million, an increase of 1.6 percent from 2015. Also, VA
    expects to provide more than 101 million outpatient visits in 2016, an
    increase of 2.8 million visits from 2015. Workload will continue to
    rise as the military downsizes and veterans regain trust in the VA. In
    addition, survival rates among Americans who served in conflicts have
    increased, and more sophisticated methods for identifying and treating
    veteran medical issues continue to become available.
        The 2016 budget requests $60.0 billion for medical care, an
    increase of $4.2 billion (7.4 percent) over the 2015 enacted level. The
    increase in 2016 is driven by veterans' demand for VA healthcare as a
    result of demographic factors, and economic assumptions, investments in
    access; and high priority investments for Caregivers, new Hepatitis C
    treatments, and support for Veterans Health Information Systems and
    Technology Architecture (VistA) Evolution. The 2016 request supports
    programs to end veteran homelessness; continue implementation of the
    Caregivers and Veterans Omnibus Health Services Act; provide for
    activation requirements for new or replacement medical facilities; and
    invest in strategic initiatives to improve the quality and
    accessibility of VA healthcare programs. The 2016 appropriations
    request includes an additional $1.3 billion above the enacted 2016 AA
    for veterans medical care. This is the first year VA will be seeking
    additional funding in all three medical care accounts that are funded
    by advance appropriations. The request includes approximately $3.3
    billion annually in medical collections in 2016 and 2017.
        For the 2017 advance appropriations for medical care, the current
    request is $63.3 billion. This request reflects great uncertainty
    surrounding the impact of the Veterans Choice Act on VA operations in
    2017. This estimate will be revised as VA gains greater experience with
    implementation of the Veterans Choice Act.
                          ending veteran homelessness
        As President Obama has said, too many of those who once wore our
    Nation's uniform now sleep in our Nation's streets. The administration
    has made the elimination of veteran homelessness a national priority.
    In 2009, we set an ambitious plan to end veteran homelessness by the
    end of 2015. We have made substantial progress toward this goal--as of
    January 2014, overall veteran homelessness is down 33 percent since
    2010, 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, more than 260,000 homeless or at-risk veterans
    (including formerly homeless veterans) received VA specialized
    services.
        In 2016, VA will continue to focus on prevention and treatment
    services. The budget requests $1.4 billion for VA homeless-related
    programs, including case management support for the HUD-VASH voucher
    program, the Grant and Per Diem Program, the Supportive Services for
    Veteran Families program, and VA justice programs. The 2016 budget
    supports VA's plan to help end veteran homelessness by emphasizing
    rescue for those who are homeless today, and prevention for those at
    risk of homelessness.
                        medical and prosthetic research

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        VA has a legacy of innovation and cutting-edge research that is as
    broad and historically significant as it is profound--and often
    unrecognized. Few are aware that VA research developed the cardiac
    pacemaker, the first successful liver transplant, the nicotine patch,
    and the world's most advanced prosthetics--including VA's revolutionary
    ``Braingate'' breakthrough that makes it possible for totally paralyzed
    patients to control robotic arms using only their thoughts.
        VA research also has led to major breakthroughs and advances in
    medical science and care--Post-traumatic Stress Disorder, or PTSD, and
    Traumatic Brain Injury, or TBI, being only two of many. In 2016,
    Medical Research will be supported through a $621.8 million direct
    appropriation, and an additional $1.2 billion from VA's medical care
    program and grants. Total funding for Medical and Prosthetic Research
    will be over $1.8 billion in 2016.
        The 2016 budget includes a $10.2 million strategic initiative to
    support improvements in VA medical care through research focused on a
    ``Learning Health Care System.'' A learning healthcare system is one
    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. Through five interlocking research streams--measurement
    science, operations research, point-of-care research, provider
    behavior, and randomized program implementation--this initiative
    proposes to broaden existing research by systematically capturing,
    assessing, and translating the lessons from each care experience into
    improved methods of delivering care to veterans.
     continuing the transformation of the veterans benefits administration
        Improving quality and reducing the length of time it takes to
    process disability compensation claims is integral to our mission of
    providing the care and benefits that veterans have earned and deserve
    in a timely, accurate, and compassionate manner. The disability rating
    claims workload continues to increase, due to the reduction in military
    forces, servicemembers returning from wars, and the aging of the
    veteran population. Also, the complexity of the workload continues to
    grow because veterans are claiming greater numbers of disabling
    conditions and the nature of disabilities--such as PTSD, combat
    injuries, diabetes and related conditions, and environmental diseases--
    is becoming increasingly complex.

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        Despite these challenges, VBA has decreased the disability claims
    backlog by more than 70 percent as of April 15, 2015 , since its peak
    in March 2013 (from 611,000 to 182,000), and we are on track to meet
    the President's goal to eliminate the disability claims backlog by
    processing all claims in 125 days by the end of 2015. VBA's success in
    reducing the backlog has occurred, in part, because of its strong
    reliance on mandatory overtime by claims processors. However, this
    strategy is unsustainable. It strains employee-management relations and
    is inconsistent with our goal to improve the employee experience so
    they can be empowered to better serve veterans. We must right size
    VBA's workforce and more effectively manage the use of management
    practices such as the use of mandatory overtime and continue progress
    toward eliminating the disability claims backlog.

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        We are taking the lessons learned in eliminating the disability
    claims backlog and applying them to transform business processes
    supporting the fiduciary program, the delivery of non-rating benefits,
    and the appellate workload.
        For 2016, VA requests $2.7 billion for VBA for general operating
    expenses, an increase of $165.8 million (6.6 percent) over the 2015
    enacted level. These resources will support 21,871 Full-Time Equivalent
    (FTE) employees and allow VA to administer disability compensation and
    pension benefits totaling $83.1 billion to over 5.2 million veterans
    and survivors; education benefits and vocational rehabilitation and
    employment benefits and services to nearly 1.3 million participants; VA
    guaranty of more than 431,000 new home loans; and life insurance
    coverage to 1.1 million veterans, 2.3 million servicemembers, and 3.1
    million family members.
        As VBA continues to receive and complete more disability rating
    claims, the volume of appeals, non-rating claims, and fiduciary field
    examinations increases correspondingly.

      --Appeals. Over the last 20 years, appeal rates have continued to
            hold steady at between 11 and 12 percent of completed claims.
            As VBA continues to receive and complete record-breaking
            numbers of disability rating claims in recent years (1.3
            million claims completed in 2014), the volume of appeals
            increases concomitantly. VBA currently has approximately
            290,000 pending appeals.
      --Non-rating claims. VBA's success in completing rating decisions has
            driven an increase in non-rating claims. In 2015, VBA expects
            to receive 2.9 million non-rating claims and review actions, an
            increase of 7.4 percent over 2014 (2.7 million) and 12.5
            percent over 2013 (2.4 million).
      --Fiduciary program. In 2014, VA's fiduciary program protected more
            than 173,000 beneficiaries, which is a 42 percent increase in
            the number of beneficiaries from 2011 (122,000). Primary
            drivers of the growth in this program are the increase in the
            total number of beneficiaries receiving VA benefits and an
            aging beneficiary population. In 2014, fiduciary personnel
            conducted over 86,000 field examinations, and VBA anticipates
            field examination requirements to exceed 117,000 in 2016.

        To ensure all aspects of the claims process are improved for
    veterans, VBA is requesting additional claims processors and field
    examiners. VBA is requesting $85 million to fund 200 appeals
    processors, 320 non-rating claims processors, 85 fiduciary field
    examiners, and 165 support personnel (including 13 FTE for the National
    Work Queue (NWQ), for a total of 770 additional FTE. VBA employees--
    over 50 percent of whom are veterans--are leading advocates for
    veterans, servicemembers, their families, and survivors and are key to
    our success. With the additional 770 employees, VA will provide
    veterans with more timely decisions on their appeals and non-rating
    claims, and conduct thousands more vital fiduciary home visits.
        VBA is able to accommodate additional staff within existing space
    requirements by efforts underway to digitalize veterans claims folders,
    building on success to date. One example is the VBA office in Winston-
    Salem, North Carolina, which is shown below before and after VBA
    digitized veterans' paper records.

         Winston-Salem Regional Office: Before and After Transformation

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                                  Spring 2012

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                                   Fall 2013

        The VBA request includes $140.8 million for continued investment in
    the Veterans Claims Intake Program (VCIP), which converts paper claims
    into an electronic format and enables the electronic transfer of
    medical and personnel records. This electronic transfer is critical to
    creating the necessary digital environment that supports end-to-end
    electronic claims processing for each stage of the claims lifecycle. As
    of December 2014, over 28,000 users of the Veterans Benefits Management
    System (VBMS) could access over one billion electronic images converted
    from paper.
        The Budget request for the 2017 advance appropriations for the
    Compensation and Pensions appropriation is $87.1 billion; the
    Readjustment Benefits advance appropriation request is $16.7 billion;
    and the Veterans Insurance and Indemnities advance appropriation is
    $91.9 million. These amounts reflect the current estimates for the
    resources that would be necessary to continue these benefit programs in
    2017, and will be revised as necessary in the mid-session review of the
    2016 Budget, as VA monitors workload and monthly expenditures.
               enhanced focus on information technology solutions
        Funding for IT infrastructure and services is at the heart of VA's
    mission, because IT affects every aspect of VA's ability to serve
    veterans by providing easily accessible, quality healthcare and
    benefits. To offer a view of the scope of VA's IT dependency, VA IT
    systems support operations at every VA location, with over a million
    devices on the network. VA's current challenges present a unique
    opportunity to employ innovative Information Technology (IT) solutions
    to accelerate changes that will better serve veterans. Veterans and
    their families of all ages are increasingly more comfortable using
    leading-edge technology to communicate and access healthcare and
    benefits. Our IT challenge is to safely and securely deliver veterans
    that leading-edge experience--fluid mobile solutions, creative apps,
    and user-friendly websites that rival the best in technology outside
    VA.
        The $4.1 billion request represents an increase of $230 million (6
    percent) above the 2015 enacted level. The request consists of $505
    million for development of new IT products; $2.5 billion for
    sustainment, $892 million for more than 7,615 staff and administrative
    support, and $223 million for related support services. The request
    will sustain our infrastructure while making necessary investments in
    IT support for critical business processes, such as streamlining
    benefits processing, enhancing and modernizing VA's electronic health
    record, enhancing data security, and achieving health data
    interoperability with the Department of Defense.
        The 2016 request funds key development projects for veterans'
    access ($192 million), disability claims backlog elimination ($105
    million), and VistA Evolution ($82 million). The request of $2.5
    billion for IT sustainment will fund the replacement of the oldest
    hardware that has fallen beyond its useful lifespan; the development of
    registries to track homeless veterans; communications systems,
    wireless, and mobile solutions; software license procurement; and
    information security.
                        investing in va's infrastructure
        The 2016 budget requests $1.6 billion for VA's major and minor
    construction programs, an increase of $493 million (47 percent) above
    the 2015 enacted level. Providing access to care and ensuring that
    veterans are safe when they are in a VA facility, drive our capital
    requirements. The capital asset budget demonstrates VA's commitment to
    address critical major construction projects that directly affect
    patient safety and seismic issues, and reflects VA's promise to provide
    safe, secure, sustainable, and accessible facilities for veterans. The
    request enables VA to invest in our facilities to fulfill VA's mission
    to deliver timely and high quality care and services to our veterans.
    The request also reflects the current fiscal climate and the great
    challenges VA faces in order to close the gaps identified in our
    Strategic Capital Investment Planning (SCIP) process.
    Major Construction
        VA acknowledges the challenges we have experienced in building the
    Denver Replacement Medical Center facility in Aurora, Colorado. We are
    committed to doing what is right for the veterans in Denver and
    completing this major construction project without further delay. VA is
    dedicated to getting the project back on track in the most effective
    and cost efficient manner possible.
        The 2016 budget requests $1.144 billion for major construction, an
    increase of $582 million from the 2015 enacted level. The request
    provides funding for nine on-going VHA major medical facility projects.
    Correction of seismic deficiencies is a primary focus of our 2016 Major
    construction request. The request includes funds to address seismic
    problems in facilities in America Lake, Washington; and in San
    Francisco, West Los Angeles, and Long Beach, California. These projects
    will correct critical safety and seismic deficiencies that pose a risk
    to veterans, VA staff, and the public. The photograph below shows a
    known seismic deficiency at the San Francisco Medical Center--built in
    1933--wherein the rebar does not extend into the ``pile cap.''

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        We must prevent the devastation and potential loss of life that
    occurs because our facilities are vulnerable to earthquakes--such as
    occurred in 1971 in San Fernando, California. As shown below, a 6.5-
    magnitude earthquake caused two buildings in the San Fernando Medical
    Center to collapse and 46 patients and staff to lose their lives.

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        The Major construction request also includes funds for medical
    facility improvements and cemetery expansion project in St. Louis,
    Missouri (Jefferson Barracks); new medical facility project in
    Louisville, Kentucky; construction of a new outpatient clinic and a
    columbarium in Alameda, California; realignment and closure of the
    Livermore Campus in Livermore, California; and construction of a
    replacement Community Living Center in Perry Point, Maryland. New,
    replacement, and renovated medical space will provide additional
    capacity to treat veterans through more efficient configurations, with
    the implementation of Patient-Aligned Care Teams, and the establishment
    of multi-exam rooms per provider--similar to the private sector. Once
    the projects are completed, veterans will be served in modern and safe
    facilities.
        The major request also includes funding for four cemetery gravesite
    expansion projects at: Puerto Rico National Cemetery; Willamette
    National Cemetery in Portland, Oregon; Riverside National Cemetery in
    Riverside, California; and Barrancas National Cemetery in Pensacola,
    Florida. These projects offer VA the ability to provide access to
    burial services through new and expanded cemeteries and prevent the
    closure to new interments in existing cemeteries.
    Minor Construction
        In 2016, the minor construction request is $406.2 million. The
    requested amount would provide funding for ongoing and newly identified
    projects that renovate, expand and improve VA facilities, while
    increasing access for our veterans. VA continues to focus on a balance
    between continuing to fund minor construction projects that can be
    implemented quickly to maintain and repair our aging infrastructure,
    while using major construction funding to address life-threatening
    safety and seismic issues that currently exist at multiple VA medical
    facilities.
    Leasing
        The 2016 budget includes a request to authorize 18 major medical
    facility leases under VA's authority at 38 U.S.C. Sec. Sec. 8103 and
    8104, to provide access to veterans and enhance our research
    capabilities nationwide. The proposed major medical facility lease
    projects are to replace, expand, or create new outpatient clinics and
    research facilities. The request includes resubmission of five leases
    that were originally submitted in 2015, but have not yet been
    authorized.
        Additionally, since the inception of the EUL program codified at 38
    U.S.C. Sec. Sec. 8161-8169, VA has entered into approximately 100 EUL
    projects, leveraging approximately 5.8 million square feet and over
    1,000 acres of excess property to repurpose in support of veterans, VA,
    and local communities across the country. VA needs the support of
    Congress for our proposed amendments to expand our current EUL
    authority beyond supportive housing projects so we can better leverage
    our excess space for veterans. In addition, this proposed enhancement
    would allow VA to monetize unneeded assets to raise capital to address
    needed investments in VA's system.
                                  legislation
        In addition to presenting VA's resource requirements, the 2016
    President's budget proposes legislative action that will benefit
    veterans. VA's most critical legislative request is for a significant
    update to VA's authorities for purchase of non-VA healthcare. The
    administration is proposing a streamlined process for purchasing
    healthcare needed for veterans in those circumstances where it cannot
    be purchased through existing contracts or sharing agreements. The
    proposal takes care to preserve important features and protections
    found in traditional contract vehicles. Current law is simply not
    adequate to support the continued level of access to healthcare we need
    to secure for our veterans. We look forward to detailed engagement with
    the subcommittee and your staff.
        Other important proposals include adjustment for VHA personnel
    authorities, one of which will greatly help in having employee
    scheduling flexibility that will both make hospital operations more
    efficient, and help attract the most qualified medical professionals to
    work for VA, especially for critical round-the-clock operations. VA in
    this budget also again proposes changes in disability claims processes,
    an area where reform is greatly needed, for the benefit of all veterans
    who are frustrated with the time it takes to resolve claims and
    appeals. We are open to all ideas from the subcommittee and from VSO's
    to modernize this process, and make it work for veterans. Our increased
    manpower and great strides in automation are helping, but these cannot
    replace statutory changes to modernize the process.
        As mentioned earlier, VA will propose a measure that would allow a
    portion of the Veterans Choice Act funds to be used for essential
    operational requirements. In addition, the legislative proposals would
    allow for better coordination of care when a veteran also receives
    other care at a non-VA hospital, by streamlining the exchange of
    patient information. Additionally, we propose allowing the CHAMPVA to
    cover children up to age 26, to make that program consistent with
    benefits conferred under the Affordable Care Act.
        To continue our priority to end veteran homelessness, VA proposes
    increased flexibility in the Grant and Per Diem program to focus on the
    transition to permanent housing. Also among our proposals is a measure
    that would allow VA to speed payment of Dependency and Indemnity
    Compensation and other benefits to surviving spouses by eliminating the
    need for a formal claim when there already is sufficient evidence for
    VA to act. We are proposing legislation to eliminate the requirement
    for quarterly conference reporting. This requirement has impacted
    essential VA training and has taken a massive staff effort to produce
    the mandated reports. Since the beginning of fiscal year 2013, VA has
    spent $2.4 million to prepare these reports. These resources are better
    spent providing healthcare and benefits to veterans. We greatly
    appreciate consideration of these and other legislative proposals
    included in the 2016 budget and look forward to working with the
    Congress to enact them.
                                    closing
        Veterans are VA's sole reason for existence and our number one
    priority. In today's challenging fiscal and economic environment, we
    must be diligent stewards of every dollar and apply them wisely to
    ensure that veterans--our clients--receive timely access to the highest
    quality benefits and services we can provide and which they earned
    through their sacrifice and service to our Nation.
        We also acknowledge the responsibility, accountability, and
    importance of showing measurable returns on that investment. You have
    my pledge that VA will do everything possible to ensure that the funds
    Congress appropriates to VA will be used to improve both the quality of
    life for veterans and the efficiency of our operations. We are proud to
    be part of this VA team and feel privileged to be here serving veterans
    at this key time in history. The work we do continues and grows for
    decades after the end of America's conflicts. Thank you for the
    opportunity to appear before you today and for your steadfast support
    of veterans.

                       DENVER MAJOR CONSTRUCTION PROJECT

        Senator Kirk. Thank you, Mr. Secretary. On Denver, I would
    ask unanimous consent if I can put in a statement that Cory
    Gardner gave us on this issue.
        [The statement follows:]

                   Prepared Statement of Senator Cory Gardner
        Chairman Kirk and Ranking Member Tester, I'd like to thank you for
    holding this hearing and for giving me the opportunity to express my
    concern over the U.S. Department of Veterans Affairs (VA) management of
    the Denver Replacement hospital. In addition, I'd like to state my full
    support for the completion of the hospital, which will serve hundreds
    of thousands of veterans in Colorado and the Rocky Mountain Region. To
    that end, I urge the subcommittee to include funding for the
    construction of the Denver Replacement hospital in the upcoming
    appropriations legislation.
        The VA has a history of failing Colorado veterans, and this
    mismanagement of the construction of the Denver Replacement hospital is
    just the latest unfortunate example. The VA's failed management of the
    construction of the Denver Replacement hospital has resulted in the
    facility being nearly $1 billion over budget and months behind
    schedule. For this reason, I've joined with Congressman Mike Coffman to
    introduce the ``VA Construction, Accountability, and Reform Act'' in
    the House and the Senate.
        The purpose of this legislation is to complete the Denver
    Replacement hospital and hold those officials responsible for its delay
    accountable. Three key provisions in the legislation will accomplish
    these goals.
        First, the legislation transfers management of all medical
    construction projects from the VA to the Army Corps of Engineers. Since
    the Corps has experience with major construction projects, this
    provision ensures that the Denver Replacement hospital will be
    completed without further delays and cost overruns. And going forward,
    removing the VA from the construction business will help ensure future
    VA hospitals avoid similar mismanagement.
        Second, the legislation seeks to offset the existing cost overruns
    of the facility by stopping staff bonuses at the VA and using the money
    saved to cover the additional cost of the Denver Replacement hospital.
        Thirdly, the legislation requires the Comptroller General of the
    United States to review the Secretary of the VA's management of the
    replacement hospital and determine if misconduct or criminal activity
    by VA employees may have contributed to the significant cost overruns
    of the replacement facility. This review would establish when senior
    officials at the VA should have known the replacement facility was
    likely to incur cost overruns, and what the justification was for the
    Secretary of the VA to withhold information relating to such
    significant cost overruns from Congress.
        Through these provisions, I believe this legislation will provide
    accountability of taxpayer dollars, complete the construction of the
    Denver Replacement hospital, and ensure that our veterans never again
    have to wait for care while the VA fails to complete a construction
    project.

        Senator Kirk. With that $1.73 billion, Denver Hospital will
    take up so much money, funding for MILCON for our missile
    defense for 7.9 years, it would also take up 4 years of MILCON
    for Special Operations. That is an awful big hit.
        I would add to your list of things that were done wrong in
    Denver is you did not have the Army Corps of Engineers
    overseeing the construction of the facility. I want to make
    sure that by June 1 you have already done that.
        Secretary McDonald. Mr. Chairman, we have already done that
    as of today. The Corps of Engineers is active on the ground, we
    are working with them in concert, and we continue to want to
    use the Corps of Engineers on other major projects.
        May I make a statement, Mr. Chairman? This is not really a
    hospital. This is a medical complex. This is what the complex
    looks like, and as you can see, it is many buildings. It is not
    just one building. It is very close to University of Colorado
    Medical School, who is a partner of ours.
        This is a major undertaking of many buildings, just not one
    hospital. I just wanted to be clear on that, sir.
        Senator Kirk. I would say that your proposal has been to
    take $1 billion from the Choice Act to sink into this thing,
    and that would eliminate about 20 percent of the Care Act
    money. The promise we have already made to America's veterans,
    we do not want to welsh on that promise because of the
    mismanagement of the Denver facility. We need to have the
    people involved with this fired and no longer a part of the
    payroll.
        Secretary McDonald. The gentleman that was in charge of
    construction at VA is no longer with us. We conducted an
    administrative investigation----
        Senator Kirk. By ``no longer with us,'' it means you let
    him quietly retire, he is still collecting from the taxpayer.
        Secretary McDonald. He retired. He chose to retire the day
    after the interview that he had, and to the best of my
    knowledge, both in the private sector and in the public sector,
    it is impossible to call back a retirement unless malfeasance
    is proven, and the investigation is ongoing.
        Senator Kirk. We had evidence of a whistleblower who sent
    an e-mail very early on and said this project is likely to go
    $500 million over budget, and that whistleblower was fired by
    VA because of that e-mail.
        I want to make sure this continued process of nailing
    whistleblowers is wiped out in the VA. How would we have that
    happen?
        Secretary McDonald. I am not familiar with the situation
    you are describing, but I would love to be able to get more
    information on that and follow up.
        We have been working with the Office of Special Counsel to
    make sure that all of the whistleblowers who have been
    retaliated against----
        Senator Kirk. Let me just get it for the record, the person
    that you were talking about was Glenn Haggstrom?
        Secretary McDonald. Yes, sir.
        Senator Kirk. The person who sent the e-mail saying we
    would go $500 million over budget was a Adelino R. Gorospe, and
    that person was let go, and turned out to be exactly correct on
    all the warnings to VA on that subject.
        Secretary McDonald. As I said, we have said within the
    organization it is unacceptable to retaliate against anyone who
    is criticizing our operation. In fact, we believe that we want
    employees to help us improve our operation, and the only way
    that can happen is if they are critical.
        We have worked with the Special Counsel to get certified in
    our activities around whistleblowers. We have reinstituted
    several whistleblowers to new jobs. We celebrated with a
    national award some of our whistleblowers, one in particular
    from Phoenix, and we are committed to make sure whistleblowers
    are not retaliated against. It is just unacceptable.
        Senator Kirk. I want to make sure we do not wipe out the
    Choice Act money for the overrun in Denver, that we stand by
    our veterans there.
        Secretary McDonald. We just do not know how much of the
    Care money will be used, the Choice money will be used, and how
    quickly.
        Senator Kirk. Mr. Secretary, I understand if we just wrap
    up the Denver situation, it would cost $3 million a month to
    maintain that. Do you understand that to be true?
        Secretary McDonald. I am not familiar with that figure. We
    do not have that figure, but we will check on it.
        Senator Kirk. Let me go to Mr. Tester.
        Senator Tester. Thank you, Mr. Chairman. It goes without
    saying the chairman, myself, and everybody on this subcommittee
    knows how important this subcommittee is to our veterans in the
    country and how we need to do a job together.

                              HOUSE COMMITTEE MARK

        With that being said, I would note that the House
    subcommittee mark came in about $1.4 billion, as you pointed
    out, below your request. They achieved this largely by freezing
    the major construction level, fiscal year 2015 levels,
    including a number of other funding cuts.
        In the past, there have been a lot of folks on this side of
    the dais that have criticized the VA for not being frank about
    what you need for money. A lot of criticism was warranted and
    it led to funding shortfalls and subsequently had to be
    addressed through numerous legislation, such as the Choice Act.
        Now, a lot of the folks who demanded more results from you
    are the same folks who refused to give you the flexibility and
    the resources you needed to achieve the results that our
    veterans need when they come to see you.
        Is it fair to say that the House subcommittee mark is
    inadequate?
        Secretary McDonald. It is inadequate. It will cost veterans
    to suffer.
        As I said in the House subcommittee hearing on the budget,
    we put in this budget knowing that it was going to be very
    tight versus the demand that we faced, and in addition to the
    budget itself, we wanted flexibility to be able to move money
    from line item to line item because as I said to the chairman,
    we cannot predict whether veterans are going to go for
    community care with the Choice Act or whether they are going to
    go with VA care.
        Because of the way the budget is formed, I do not have the
    flexibility to move money where the veteran goes.
        Senator Tester. Is it also fair to say that due to Vietnam
    veterans getting older, you are getting a lot more demand on
    your facilities, and if that is true, can you tell me what that
    $1.4 billion spending cut would mean to the veterans and to
    their families?
        Secretary McDonald. The $1.4 billion spending cut basically
    means less veterans are going to get care. The medical care has
    been cut by $690 million, which is the equivalent of 70,000
    fewer veterans receiving VA medical care.
        Senator Tester. As you see demand go up, you are not going
    to be able to come close to----
        Secretary McDonald. We will not have the money to care for
    them.

                             VA RECRUITMENT EFFORT

        Senator Tester. Okay. Hiring. We have discussed this
    several times. We have given some increased funding and
    enhanced mechanisms to address workforce shortage in the VA. It
    looks as if it is static at best. We could be losing ground. It
    seems we are battling on two fronts, not only attracting new
    physicians and medical personnel, but keeping the ones we
    already have.
        The VA needs the authority and resources to hire good,
    competent personnel and let them do their jobs, and then hold
    them accountable for the outcomes.
        I am worried that the cascading negative press about the
    VA, its personnel, and the care it provides is crushing the
    Department's ability to address workforce needs that we have in
    Montana and I assume elsewhere in this country.
        This is not to excuse any of the wrongdoing or to dismiss
    any of the legitimate allegations of misconduct, but a lot of
    folks around here are quick to go after a headline at the
    expense of hard-working men and women who actually are doing
    their jobs, working with the veterans, even if it means less
    pay and longer hours.
        My question to you as the head man, to what extent has this
    impacted your ability to recruit to the VA?
        Secretary McDonald. Senator Tester, as you know, I have
    been to over a dozen medical schools and I have talked to
    candidates to become nurses and doctors at the VA. The constant
    haranguing on things that have gone wrong months ago, years
    ago, has affected the public perception of the VA, and it makes
    our recruiting job that more difficult.
        We have increased the salary bands of our doctors. We are
    looking at competitive pay of other providers within our
    system. We have hired more doctors. We currently have hired
    over 800 more doctors, over 2,000 more nurses, and we have
    opened new facilities. We open about 17 new facilities a year.
        But the demand, as you have suggested, has increased. We
    have gone from roughly 4 million outpatient patients to nearly
    6 million. That demand is going to increase as we continue to
    improve the system and improve our customer service.
        We have not even seen the full effect of the Iraq and
    Afghanistan wars yet and the veterans who have fought in those
    wars. We have to build the capability today to be ready for 5
    years, 10 years, 20 years from now. That is what our plan does.
        Senator Tester. We will talk more about those capabilities
    next round.
        Senator Kirk. Let me add on to that, I understand that
    Glenn Haggstrom, who you said was responsible for the debacle
    in Denver, got a $60,000 bonus according to Senator Gardner. I
    would say if we are giving totally incompetent people big
    bonuses like that, how can we ever take care of our veterans.
        Secretary McDonald. I believe that bonus was for 2013 or
    before, and not recently. As I said, we have the administrative
    investigation going on, and as we get to the bottom of this, we
    will figure out what the appropriate action is.
        Senator Kirk. Mr. Boozman.
        Senator Boozman. Thank you, Mr. Chairman. I agree with the
    Senator from Montana, the vast majority of the VA personnel are
    doing a great job and working very, very hard.
        I think the thing that really shows that is how few have
    actually accessed the program that we are trying to stand up so
    they do not have to travel. Many of them are traveling even
    though they can stay home.
        It is hard, and I understand the argument, and certainly I
    am going to bring up an issue that was before your time, and
    yet it is hard in the sense that people are losing faith,
    Congress is losing faith.

                LITTLE ROCK, ARKANSAS SOLAR PANEL SYSTEM PROJECT

        We have an issue in Little Rock. Congressman Hill has been
    looking into this very vigorously, where we had a situation in
    February 2012, the VA received an $8 million grant to build an
    1.8 megawatt solar panel system at the Veterans Hospital. In
    August 2012, the VA approved a parking deck project, which was
    located at the same place as the solar panels. In January 2013,
    construction on the solar panels began on the same location as
    the planned parking garage.
        VA officials were aware of the conflict at the time. In
    August 2013, the solar panel construction was completed. In
    April 2015, the VA dismantled some to build the parking lot,
    and it is still not clear as to how much it is going to cost to
    put them back, and whether or not they were able to function in
    the grid to begin with.
        I guess what I would like, we have these things going on,
    what are the safeguards that we have? How are you dealing with
    this kind of stuff?
        Secretary McDonald. I mentioned some of the changes we have
    made to the process of construction in my comments. I also
    mentioned that we have changed the leader. We have a new leader
    named Greg Giddens. He has experience across many sectors of
    government and has done this before. I also happen to be an
    engineer. My certification is in engineering training. I
    studied engineering at West Point. Our Deputy Secretary is a
    former CFO of a bank, very bright, intelligent guy.
        We are digging into this in the strongest possible way, and
    I would just simply say that this is not going to happen. That
    happened in 2012. I appreciate you bringing it up. This is not
    going to happen in the future. It just is not going to happen.
        What we are doing is we are having design committees, we
    are having outside people review our processes. We are using
    the Corps of Engineers. We are using the best practices that
    are available in industry today in order to make our system
    better.
        Senator Boozman. I think one thing that we have to be very
    careful of, that process started then, and yet I do not know
    how forthcoming VA was in admitting that the process was there.
    Even now, when you ask how much is it going to cost to
    reinstall, we get terms like procurement-sensitive, something
    like that. That is not appropriate.
        Secretary McDonald. I agree. We are trying to be more
    transparent and more communicative than ever before. I would
    hope that since I became Secretary, you have seen an increase
    in my presence.
        Senator Boozman. Yes, and I appreciate that.
        Secretary McDonald. And an increase in our transparency as
    a Department. I still every day do catch instances where I wish
    we were more transparent and better about customer service.

                             PROVIDER REIMBURSEMENT

        Senator Boozman. The other thing I would like to mention,
    and I want to compliment you in this regard, we had a group get
    together in Little Rock to discuss reimbursement to providers
    that have provided outside care. You will have situations that
    arise in the VA where because of emergencies or now with this
    40-mile rule, the VA owes money.
        It appears that the VA owes lots of people in Arkansas a
    lot of money and has not been very forthcoming in paying those
    bills. That is a real concern really for a couple of reasons in
    the sense that it is another thing that makes it a trust issue
    that we talk about.
        The other problem is if you do not pay your bills, they are
    going to quit dealing with you. That is the greatest thing, and
    that really is going to affect quality of care.
        Can you quickly mention that?
        Secretary McDonald. I will, and maybe ask Carolyn to
    comment. I talked about our five strategies from MyVA. One of
    them I talked about was improving our internal support
    services, and going to a shared services model, where we
    centralize the bill paying so that is all that people do, and
    that is something we are in the process of doing. We are not
    done yet. We still have more work to do. That will dramatically
    improve the rates at which people get paid. Carolyn.
        Dr. Clancy. Yes. I would just add that we are tracking this
    rates of payments and hold old the claims on a weekly basis. I
    am pleased to say VISN 16, which had been struggling for a
    while, and that is what Arkansas is a part of, is actually
    improving faster than other networks, but we will keep a very
    close eye on it.
        As you said, Senator, if you do not pay your bills, people
    are going to say gee, I would love to help you but I have to
    pay, and that is not going to work.
        Senator Boozman. Again, your people were very helpful and
    did a good job in Arkansas. Thank you, Mr. Chairman.
        Secretary McDonald. Thank you, sir.
        Senator Kirk. Mr. Udall.
        Senator Udall. Thank you very much, Mr. Chairman. Let me
    along with the rest of the members echo your new aggressive
    leadership and what you are doing in terms of veterans. I
    really respect the team that you brought in, and this more
    business like approach to what is an incredibly important issue
    for veterans in my State and across the country.
        Let me thank you, too, for the constructive dialogue we
    have been able to have moving the VA forward as you near the
    end of your first year as Secretary.
        As we discussed during last week's visit, New Mexico's key
    issues can be narrowed down to ensuring veterans have access to
    care. Too often veterans are prevented from receiving the care
    they deserve because of barriers to access. Starting with
    disability claims, many veterans are not able to have their
    claim adjudicated in a timely manner.

                           NEW MEXICO CLAIMS BACKLOG

        In New Mexico, progress to reduce the backlog has
    stagnated, and that is the chart I have behind me here. I think
    I have showed you that before, where we have come down
    dramatically, we have made good progress, but it is stagnated.
        I am hopeful we can get the resources to make progress in
    reducing the backlog once again, and where it is stagnated,
    started in a downward turn.

                                 ACCESS TO CARE

        With regard to scheduling and the scheduling issue, last
    summer showed we had a lot of work to do to ensure that
    veterans are seen on time and the scheduling system was not
    being utilized in a fraudulent manner.
        As I mentioned, I asked the VA OIG to look into this
    matter, and I am awaiting their findings. Furthermore, for
    rural veterans in New Mexico and across the country, we need to
    do more to find creative solutions to the recruitment and
    retention problem facing the medical community in rural
    clinics. This is not something that is solely a VA problem, but
    I believe it is an area that VA can take a leadership role to
    address.
        Based on the budget requirements and the VHA's experience,
    which would be the best way--this has been mentioned by several
    questioners here and in some of your answers--which would be
    the best way to improve access to quality care, an expanded fee
    for service program, or a program which aims to recruit and
    retain rural physicians and nurses at rural CBOCs and which
    helps to expand telehealth? Which would be the most cost
    effective way for the American taxpayer? I know you have given
    this a lot of thought.
        Secretary McDonald. Sir, I think we need to do both. We
    envision a system in the future which is a combination of VA
    care and community care working together in a network to make
    sure our veterans get the care they want.
        I would like to briefly comment on your chart.
        Senator Udall. Please.

                                 CLAIMS BACKLOG

        Secretary McDonald. I think if you backed the time period
    up, you will see a more dramatic decline in the claims backlog,
    and also go back a couple of years.
        I also think the reason it leveled out was we had 660
    additional head count in the Choice Act for Veterans Benefits
    Administration because we had been working mandatory overtime
    in the Veterans Benefits Administration to drive this backlog
    down to zero.
        As I was going around doing town halls amongst the people
    in Veterans Benefits Administration, I was seeing, not
    surprisingly, increasing conflict between labor and management.
    Mandatory overtime is not the way to run a business. That 660
    people were stripped out of the Choice Act before it was
    passed. You did not give us, ``you'' Congress, did not give us
    those people.
        We took off mandatory overtime hoping we could continue to
    drive it down. That straight line is when we took off mandatory
    overtime. It did not work. We had to put it back on. We are
    still doing mandatory overtime, which we have been doing now
    for several years, which is not a good idea.
        We have more people in the 2016 budget that we need in
    order to get the backlog down. We are going to get to zero by
    the end of the year, but we need those people.
        Also, I think there are a couple of months that are not on
    your chart. Danny, could you update us on that?
        Mr. Pummill. Yes. First of all, great charts, your numbers
    are dead on. You did a really good job on it, or your staff.
        Secretary McDonald. We should say we publish our numbers
    every two weeks, so we want to be transparent and we want you
    to know what our numbers are.
        Senator Udall. We appreciate that.
        Mr. Pummill. As we went back into mandatory overtime, we
    started pushing again. You see these dark oranges, that is your
    number pending. That has now come down.
        Because that has come down, as of right now in April, you
    are down to 47 percent on the backlog, 3,500 claims pending,
    and 1,500 of those claims in the backlog, you will see the
    continued downward slope that you saw earlier in your chart for
    the next 3 months at a huge drop off this summer, because
    pretty soon every claim we are going to be working is going to
    be in the backlog, but that will not be just for your State,
    that will be for the entire Nation. We should have zero backlog
    this year.

                                   TELEHEALTH

        Secretary McDonald. Maybe I can ask Carolyn to comment on
    telehealth, because this is a really important strategy for us.
        Senator Udall. I have run out of time, if you could very
    briefly, Carolyn.
        Dr. Clancy. I would just simply say that New Mexico is
    really a model with Dr. Arroyo at the University of New Mexico
    working closely with us.
        This is a matter of if the veteran cannot come to the
    medical center, then we can use telehealth to bring that
    expertise to the clinicians working out in the rural
    communities. It has worked phenomenally and we are actually
    using it in other parts of the system as well.
        Senator Udall. Thank you very much. Dr. Arroyo, he is
    pretty amazing. Thank you. Thank you, Mr. Chairman. Thank you
    for your courtesy.
        Senator Kirk. Mrs. Capito.
        Senator Capito. Thank you, Mr. Chairman. I want to thank
    the Secretary and others for being here today. It is nice to
    see you again.

                          GREENBRIER OUTPATIENT CLINIC

        I would really like to thank you and the VA for the
    flexibility and the willingness to work on the 40-mile rule. We
    talked about it. As you know, in a State like mine, West
    Virginia, 40 miles as the crow flies could be hours in a car
    sometimes. Making this change really helps veterans across the
    country, and certainly in my State. Thank you.
        I know you are aware of this issue. I think we talked about
    it. It is in Greenbrier County. There is an outpatient clinic
    there. It has been closed three times for, I believe, mold in
    the facility, some unhealthy conditions in the facility because
    of air quality. I think I read that the Bluefield Mobile Unit
    is going to be serving the 2,400 veterans in that area.
        I was wondering if you had--I know this is very specific--
    if you had any other alternatives, are you going to replace
    that facility, what your plans are for that.
        Secretary McDonald. I would like Carolyn to comment about
    the specifics. I would simply like to reiterate what I said.
    Our facilities are too old. HVAC systems need to be replaced
    about every 25 years. I talked to you about facilities that are
    over 100 years old, 90 years old. This is unacceptable. We have
    to decide which facilities to close. I talked about that. Which
    facilities to refurbish so we do not have these chronic
    problems.
        We cannot do that with a budget that has been marked down
    $1.4 billion by the House and the major construction part has
    been gutted by almost half.
        Dr. Clancy. I would say that we are hopeful for the moment
    that we may actually be able to resolve these air quality
    issues. I also want to point out that in terms of 40 miles from
    that CBOC is not part of the calculation any more, so that
    should offer more flexibility to the extent there are community
    providers.
        The mobile unit, those are the plans we have right now.
    This will remain high on our agenda.

                             CIVILIAN BRAC PROPOSAL

        Senator Capito. Thank you. It is definitely a problem. I
    would just briefly ask you, and this was my last question, in
    case I run out of time, since you were on it, on the facilities
    you mentioned excess properties, 336 buildings are empty. You
    said you need help with that.
        How do we help you with that? It is not just budgetary. Is
    it statutory?
        Secretary McDonald. The President has put forward what I
    would call a ``civilian BRAC.'' In other words, the idea to
    take our facilities and have an up or down vote across the
    Federal Government. I just think that is a brilliant idea. We
    have to become more efficient.
        I would suggest that it be passed and that we go at it.

                                  MYVA REGIONS

        Senator Capito. Okay. Let me ask you this. You mentioned
    these are the MyVA regions. Dr. Clancy mentioned VISNs. This is
    VA 101 for me. Are the VISNs gone?
        Secretary McDonald. What we have done is we have started a
    process where we are aligning the VISNs with those regions, and
    in doing that, we are taking a new look at the VISNs and seeing
    if there is an opportunity to reduce the number of VISNs.
        The issue that we have right now, and this is a huge issue
    that reflects the actions we are taking in accountability, 91
    percent of our medical centers have either a new medical center
    director or a new leadership team member.
        We are really weak on leadership right now. We have new
    leaders in place. What I do not want to do is increase the
    spans of control so much that we take immature leaders or
    leaders with less experience and put them under more pressure.
        What we are looking at right now is a modest reduction in
    the VISNs and an attempt to more align the VISNs to State
    boundaries.
        Senator Capito. I noticed in our State of West Virginia, we
    are in the same MyVA. We are in three different VISNs, which
    makes no sense----
        Secretary McDonald. That is one of the things we want to
    fix.

                             CLARKSBURG VA FACILITY

        Senator Capito. For a small State like ours. Again, the
    leadership issue. At the Clarksburg VA in Clarksburg, West
    Virginia, it has unfortunately lagged behind as one of the top
    people who have had the biggest wait times, and it just had a
    leadership change at that VA. Are you seeing anything yet? Too
    early to tell? Do you have anything to report there from
    Clarksburg?
        Dr. Clancy. I would be happy to follow up with you on that.
    I want to make a point for you and all of your colleagues, that
    we are tracking the excess and quality issues on an almost
    daily basis. I would be delighted to follow up, Senator.

        [The requested information was not available.]

        Senator Capito. Thank you for that.
        Secretary McDonald. In fact, we would be happy to invite
    any of you to come to our daily stand up that we do, where
    every morning we review the data and take action.
        Senator Capito. All right. Thanks so much. Thank you.
        Senator Kirk. Mr. Schatz.

               VA/DOD ELECTRONIC HEALTH RECORDS INTEROPERABILITY

        Senator Schatz. Thank you, Mr. Chairman. I know VA is
    working with the Department of Defense (DOD) so that the two
    can share servicemembers' medical records electronically, but
    progress, as you know, has been slow. The Government
    Accountability Office (GAO) specifically cited the lack of
    progress as an issue when it added VA to its 2015 high risk
    list.
        According to GAO, ``The two departments have engaged in a
    series of initiatives intended to achieve electronic health
    record interoperability but accomplishment of this goal has
    been continuously delayed and has yet to be realized. The
    ongoing lack of electronic health records' interoperability
    limits VA clinicians' ability to readily access information
    from DOD records,'' and so on.
        What kind of progress are you going to be making and when
    can we expect for you to be off the GAO high risk list?
        Secretary McDonald. First of all, when I met with the head
    of GAO, I asked to be put on that list. We run the largest
    healthcare system in the country, and with the crises that have
    occurred, I thought it was appropriate that we are on the list.
    I think the transparency and visibility is important to
    improvement.
        Second, we have made a lot of progress on the electronic
    health record. Also, I would like to offer to members of the
    subcommittee that we would be happy to come to your offices and
    demonstrate the interoperability of the DOD and VA record. I
    think once you see it, you will become much more conversant in
    the progress that has been made. Steph.
        Mr. Warren. Thank you, Mr. Secretary.
        Senator Schatz. Very briefly, if you do not mind.
        Mr. Warren. Yes, sir. From an interoperability standpoint,
    we have been hitting on three levels. The first one is moving
    the data within the existing systems, and we share more data
    than any healthcare system in the Nation or in the world.
        Our future is how do we get all the data in a single view,
    and that is the demonstration that the Secretary offered, where
    today you now can see all the VA data for any medical center
    and DOD data as well as third party provider data in the same
    screen. The data has been normalized, the providers can look at
    it and they can actually make decisions based upon a continuum
    of time in terms of that data.
        Senator Schatz. What remains to be done?
        Mr. Warren. The two next things that need to happen is the
    viewer that chose that data is just for viewing, we are not
    able to actually go in and change the data. That is the next
    generation.
        Senator Schatz. Is that a big technological or database
    breakthrough?
        Mr. Warren. It is two part. The first part is making sure
    there are common standards. Working with ONC, the Office of
    National Coordinator, to come up with national standards where
    there are no national standards. We work with DOD to put those
    standards in place.
        Senator Schatz. Clinical standards or database?
        Mr. Warren. Data standards, so we actually have
    interoperability, we are using the same units, the same
    definitions. A lot of effort over the next couple of years to
    make sure the right standards are in place, and then we need to
    go through and convert the data to meet the standards, and then
    the second piece is to make sure the tools are there that shows
    the data at the same time, and we can start changing the data
    at either end.
        Senator Schatz. What is the timeframe for all this?
        Mr. Warren. The enterprise health management platform, we
    are----
        Senator Kirk. Let me step in here and deliver a threat that
    I have been saying to DOD, if they insist on having different
    standards, we will go with just the VA standards, that will
    force the two bureaucracies to agree on a common standard, and
    it will be a VA standard.
        Secretary McDonald. Thank you.
        Mr. Warren. Thank you for that, sir. A lot of strong work.
    If I can bring a third party in, the Office of National
    Coordinator does the standards for third party and private
    providers, and with the Access to Care Act, with more care
    going outside, it is not just the VA and DOD sharing, but how
    do we get the private providers in the same standard so their
    data can come in and be part of that continuum of care.
        Senator Schatz. Start to finish--obviously, you will be
    able to use some of this work as you are moving along, but what
    is your total to completion?
        Mr. Warren. The enterprise health management platform will
    be at 33 sites by the end of the calendar year as a demo,
    again, next generation, and then we will be adding capability
    on over the next 3 years until we phase out what we have today.

                            ALOHA VET CENTER, HAWAII

        Senator Schatz. Thank you. Mr. Secretary, I want to ask
    very quickly about the ALOHA Vet Center on the Island of Oahu.
    Oahu has 70 percent of the State's population. I have talked to
    you a couple of times about it. This will double the
    availability of clinical services for about 1.2 million people
    and tens of thousands of veterans in the City and County of
    Honolulu. Can you give me an update?
        Dr. Clancy. This is going through the planning process
    right now. We expect it will be advertised late fall of this
    calendar year, and then the award will probably happen in the
    first quarter of fiscal year 2018. It is going to take time,
    but we are very, very excited about the access opportunities.
        Senator Schatz. You said it would advertise this year and
    the award will go out in 2018? Did you mean to say 2016?
        Dr. Clancy. No. The actual final award and construction
    will happen in the first quarter of fiscal year 2018, and the
    construction will be complete in the last part of 2020.
        Senator Schatz. Okay. My time has expired. I would like to
    understand why you go 2 years from advertising of the award to
    construction. Thank you, Mr. Chairman.

                            40-MILE DRIVING DISTANCE

        Senator Kirk. My favorite Senator from Maine.
        Senator Collins. Thank you very much, Mr. Chairman. Mr.
    Secretary, I, too, want to thank you for working with many of
    us on the 40-mile rule to change it from as the crow flies to
    actual driving distance. Like Senator Capito, I represent a
    State where as the crow flies and the driving distance are two
    very different things.
        The VA still does not consider whether or not the type of
    care that the veteran needs is available at a VA facility that
    is within that 40-mile limit.
        For example, in Western Maine, there is a VA Mobile Unit in
    Bingham, Maine that operates only 2 days a week. We are glad to
    have it. Obviously, it is nowhere near a full-fledged facility
    that can provide and meet the needs of our veterans.
        That means veterans in Jackman, Maine could go to a
    hospital, a local hospital that is 35 miles away, still a
    distance, but much, much closer than going to the VA Hospital
    for care, or they could go to the local community health center
    right there in Jackman to get care, if the 40 miles were
    considered to be measured in terms of whether the service is
    actually available.
        The service obviously is not available at a 2 day a week
    mobile clinic. It is available at the community health center
    and at a hospital that is 35 miles away.
        These are not options available to our veterans in this
    area due to the interpretation of the 40-mile rule. Are you
    giving any thought to being more flexible in that area as well?
        Secretary McDonald. We are in the process of analyzing it
    and working with Members of Congress on what we discover. First
    of all, the idea that whether or not you can get care from your
    local facility is actually written into the law, so it is not
    an interpretation. That was the way the law was written. If you
    would like it changed, you need to change the law.
        Secondly, our initial calculation suggests that if we were
    to make that change, the minimum increase would be about $10
    billion a year, not over the 3-year period of the Choice Act,
    but a year, and it could be as high as $40 billion a year, if
    we opened up that capability or that aperture for veterans.
        We are in the process of looking at this, and what we want
    to do is come back to you with the boundaries on what we
    discovered and what our assumptions were, and have the
    discussion if that is a law change you would like to make.
        Senator Collins. There may be some sort of middle ground
    here because in the case I gave you where the facility is not
    even a CBOC, it is a mobile unit that is open only 2 days a
    week, it just does not seem like a reasonable interpretation.
        Secretary McDonald. There is a middle ground point that we
    can take which is to in a sense change the geographic burden to
    give the Secretary more flexibility to allow people with a
    geographic burden of some kind to use the community care, and
    we are also working on that, and we will come back to you with
    the definition of that and how many people that will affect.

                             PROVIDER REIMBURSEMENT

        Senator Collins. Thank you. I also want to associate myself
    with the comments of the Senator from Arkansas about slow
    payment to physicians and hospitals. This is a problem in my
    State as well.
        The problem is that if the VA ultimately denies the claim,
    the hospital has missed the deadline for filing a claim for
    reimbursement to a secondary insurer such as Medicare. What
    happens is the healthcare provider ends up not getting paid at
    all.
        I really hope that some energy will be put on this problem.
        Secretary McDonald. As I said, it is one of our most
    important strategies. We simply have to get it right.

                                 ADULT DAY CARE

        Senator Collins. Thank you. Finally, in the 10 seconds I
    have left, the VA in consultation with the National Association
    of State Veterans Homes began working on regulations that would
    govern adult day care, so there could be respite care for our
    veterans who are living at home but may be suffering from
    Alzheimer's or other dementias. That has been in process since
    October of 2008, far precedes you.
        That is more than 6 years ago. For the record, since I am
    now out of time, I would ask you to give me an update. This
    would make such a difference to so many of our veterans and
    their family members, and it also would reduce nursing home
    costs and costs of the State veterans homes.
        I really think this is something that should be finalized
    and should not have taken 6 years and still be pending.
        Secretary McDonald. We agree, and we will get back to you.

        [The requested information was not available.]

        Senator Collins. Thank you very much, Mr. Secretary.
        Senator Kirk. Senator Baldwin.

                           TOMAH VA MEDICAL FACILITY

        Senator Baldwin. Thank you, Mr. Chairman, and ranking
    member for this hearing today. Secretary McDonald, you noted in
    your testimony that the VA is really at a crossroads, and you
    struggle with significant challenges, including internal
    management controls, as well as the delivery of safe,
    appropriate care.
        We have talked a number of times as I have with Dr. Clancy
    about how these two failures have had really tragic results at
    a particular medical hospital in Wisconsin, the Tomah VA
    medical facility.
        I look forward to working with the members of this
    subcommittee on a number of steps we can take, including
    legislation and programmatic initiatives to correct these
    failures, to improve the quality of care that our veterans have
    earned.
        Dr. Clancy, your clinical investigation into the Tomah VA,
    you have initial interim findings, and I know it is ongoing,
    but with regard to opioids prescribing, you found that Tomah
    was almost double the national average when it comes to rates
    of prescribing opioids and benzodiazepines concurrently, which
    is an unsafe practice that the VA's own clinical practice
    guidelines for opioid therapy warns against.
        Jason Simcakoski is a Marine who was one of the patients
    prescribed both of these drugs and tragically passed away at
    the Tomah VA.
        I want to start with asking you if you believe the VA has
    adequately managed the implementation of the clinical practice
    guidelines for opioid therapy at local VA medical centers.
        Dr. Clancy. I would say we made a good start and we have
    far more to go and that is what we are doing right now. The
    initial approach which predates both of us was to start at the
    network level and then go down to the facility, and as we have
    had a chance to brief you and your colleagues, this is now
    getting down to the individual clinician level, because we can
    do a much, much better job.
        The irony, of course, is at that facility, Tomah, veterans
    are less likely to be on narcotics than in the network or the
    national average, but if they are on them, they are getting
    very high doses, and far more likely to be on benzodiazepines.
        We are also looking at how we can start to bring this down
    to the individual patient level, and I think of that in two
    ways. One is that as you would expect, the initial efforts to
    reduce the use of opioids probably were most successful with
    those veterans struggling the least, and what we have now is a
    group of veterans with the most challenges with chronic pain
    and other complications.
        The second is I think we desperately need to figure out
    what is the risk point at which someone transitions from taking
    narcotics sometimes, say for low back pain as an example. Is it
    a month, is it a couple of months? Where is that point where
    the risk level goes way up. I think that is where pain
    management intervention is most likely to be successful.
        We are going to have to start to customize this much
    further, which is the whole point of the academic detailing
    initiative that has now been mandated and will be required for
    full implementation by the end of June.
        Senator Baldwin. I want to follow up on two points you just
    raised. One of the real problems at Tomah was obvious dangerous
    prescribing practices were considered within the bounds of
    acceptable care.
        Question one is do you believe the current VA prescribing
    guidelines, which were last updated in 2010, are due for an
    update, and the second question, and it may have to wait until
    a second round, relates to driving these down to the patient
    level and involving patients and their families more actively
    in treatment protocols.
        Dr. Clancy. Two quick responses, given time, and I am happy
    to follow up with more. First, the guideline which was
    developed jointly by the Department of Defense and VA will be
    updated this year. They are going to be starting that process
    this fall. We know on average practice guidelines need to be
    updated about every 5 years, absent some kind of new
    breakthrough evidence. That is the first thing.
        The second thing is we actually now require that all
    patients on narcotics actually sign an informed consent, and
    that is part of their medical record every year.
        I would say that is a down payment on the kind of
    conversation you just referenced, and again, I am happy to
    follow up further.

        [The requested information was not available.]

        Senator Baldwin. Thank you.
        Senator Kirk. I would like to recognize our august vice
    chairwoman, Senator Mikulski.
        Senator Mikulski. Thank you for calling me august. I feel
    like I have come in like a gust of air.
        First of all, Mr. Chairman and Senator Tester, I would
    really like to congratulate you on the work you have been doing
    in VA MILCON, as you have been proceeding with due diligence,
    you have had the usual sense of bipartisan that has been
    characteristic of this subcommittee, and both of you have been
    fighting like hell for our veterans. As the vice chair of the
    full committee, I really want to thank you for the job, and
    will do what I can to get you a juicy allocation.
        I would like to first of all say hello to Secretary
    McDonald and to his team here. I am going to engage in a bit of
    a Maryland question. First of all, Mr. McDonald, thank you for
    the job you have been doing, but you have a big job, and I
    think you are finding that under every rock is another rock.

                     IG REPORT ON VA HEALTHCARE IN MARYLAND

        We found the same thing in Maryland. I asked the Inspector
    General of the VA to investigate claims that have come to my
    attention in my constituent area program, allegations that
    somebody had mouth cancer and was not properly tube fed,
    somebody who did not get mental health appointments and later
    committed suicide.
        It was not me to finger point but to pinpoint, and the
    Inspector General came back with findings. Some are deeply
    troubling, that the facilities in Maryland did not follow the
    outpatient feeding policy, that they needed to comply with
    policies related to basic protocols on mental health services.
        What the Inspector General did was come out with nine
    specific recommendations. Rather than taking the time of the
    subcommittee to read them, you know them, I have the report
    here now, could you comment on it, and could I have your
    commitment that you will do everything you can to follow up on
    the Inspector General's recommendations?
        Secretary McDonald. Yes, ma'am. I am a big fan of the
    Inspector General and the work the Inspector General does. When
    I was confirmed, I had about 100 IG investigations pending. I
    think we are down to something less than 70 now. They are still
    coming out, and most of them date to a year to 2 years ago. We
    take them very seriously because they are an opportunity to
    improve, and we remediate every single finding they come up
    with, and we will certainly do that in the case of those in
    Maryland.
        Senator Mikulski. Did you want to say something, Dr.
    Clancy?
        Dr. Clancy. No, I would just add to exactly what the
    Secretary said, we will follow up on this very closely.
        Senator Mikulski. Are you familiar with this?
        Dr. Clancy. Yes.
        Senator Mikulski. Some of it is kind of surprising. First
    of all, I really do appreciate it and look forward to staying
    in touch on the follow up of the recommendations. They are not
    only for Maryland, but they are also for the rest of the
    country, like home feeding tube protocols, mental health
    response time protocols.

                  PERRY POINT MARYLAND COMMUNITY LIVING CENTER

        The other is the question related to Choice and the
    implementation of Choice, and I have been an advocate of that.
    Have you all covered that in the questions?
        Secretary McDonald. Yes, ma'am, but go ahead and ask and we
    will fire away as quickly as we can. We also covered the
    replacement of a 155-bed community living center in Perry
    Point, Maryland, that has been stripped out of the House
    budget.
        Senator Mikulski. You are replacing Perry Point?
        Secretary McDonald. Yes, ma'am. We had in our 2016 budget
    money to replace the 155-bed community living center in Perry
    Point, and that was stripped out of the House markup.
        Senator Mikulski. Mr. Chairman, Mr. Vice Chair, I would
    like to talk with you about this. This is a facility that is
    really oriented to mental health, and it takes care of veterans
    with significant mental health challenges as well as
    Alzheimer's. Some parts of that building are pre-World War I. I
    would ask the subcommittee to come up, if the staff would, just
    to validate the need and necessity for the MILCON request. I
    think it is a compelling need, and we will talk about it.
        Secretary McDonald. We do, too.

                             CHOICE IMPLEMENTATION

        Senator Mikulski. On the Choice card, I understand--it is a
    program I supported to shrink the waiting list. I understand of
    the 8.5 million veterans that have been issued Choice cards,
    less than 1 percent have been authorized care at non-VA
    facilities. Could you give us the status of the Choice program?
    Is it working the way we hoped? If it is not, is it
    bureaucratic delay? What is the issue here?
        This was meant to be an opportunity for veterans. My
    Mountain County veterans, they are far away. The Eastern Shore,
    nine counties.
        Secretary McDonald. First, let me start, Senator, with the
    thought that community care is important to the future of VA.
    Currently today, even before the Choice Act, about 20 percent
    of our appointments are community care, meaning outside the VA.
    This is very important to us.
        In the Choice Act, it has not yet worked the way we thought
    it would. We have not had the number of veterans go outside the
    VA system and use community care. What we have done is
    redefined the 40 miles, how you measure the 40 miles, it is
    driving distance now. We think that will double the number of
    veterans using the Choice card. We think that is a big
    improvement.
        We are also looking at other improvements. We are doing
    marketing. We are doing websites. We have a public service ad.
    We are writing letters to veterans, making sure they understand
    the system because many of the cards went out over the
    holidays, and admittedly, a lot of people do not look at their
    mail over the holidays. Marketing was necessary.
        We are looking at everything we can to maximize the impact
    of the Choice Act.
        Senator Mikulski. Thank you. My time is up. I would just
    say to my colleagues the Choice Act does offer an opportunity,
    and perhaps you could use the 535 members of Congress
    throughout town halls and so on, newsletters, to help
    facilitate that. We hear the complaints. We would like to be
    able to at least share with them an opportunity.
        Secretary McDonald. That is a great idea.
        Senator Mikulski. Not political, nothing political, but
    really about this opportunity, particularly for the primary
    care that this could provide.
        Secretary McDonald. We would love to join you in writing
    letters. We would also love to put a link on your website to
    the Choice Care website, anything we can do to increase
    communication. We would love to work with you on that.
        Senator Mikulski. I think that would be fantastic.
        Secretary McDonald. All members.
        Senator Mikulski. Thank you very much, Mr. Chairman, for
    letting me come in.
        Senator Kirk. Dr. Cassidy.

                             HEPATITIS C TREATMENT

        Senator Cassidy. Dr. Clancy, Mr. McDonald. A friend of
    mine--I am a liver doctor. A friend of mine tells me that in
    the VA, the budget for treating Hepatitis C has already been
    exhausted, that currently the only folks that can access the
    medicine used to clear Hep C are those with cirrhosis.
        I suppose if you have cirrhosis, that is great. Really, you
    want to catch it before it gets to cirrhosis because once you
    have cirrhosis, you have a lifetime risk of cancer, that sort
    of thing.
        First, any comments on that, and then I have a follow up.
        Secretary McDonald. As you are aware, Dr. Cassidy, Senator
    Cassidy, the treatment for Hepatitis C is very expensive, in
    the private sector it is roughly $1,000.
        Senator Cassidy. A pill?
        Secretary McDonald. A pill. We get it for about $650 a
    pill, so our treatment is cheaper, and arguably, we have the
    best protocols of any medical system. We do want to use it, but
    it has become a huge proportion of our budget.
        As a result of that, we have asked for incremental money in
    the supplemental appropriation for Hepatitis C specifically,
    because I think it is a moral and ethical issue that we have
    the treatment, we know what to do, and we have patients that
    need it, because our population disproportionately has
    Hepatitis C, and we cannot use it.
        Carolyn.
        Dr. Clancy. We are doing a far better job than the private
    sector in terms of screening and identifying veterans who have
    Hepatitis C and actually getting them identified and so forth.
    We have cure rates that is almost twice as high as the private
    sector.
        Senator Cassidy. It cannot be twice as high because it is
    about 90 percent in the private sector.
        Dr. Clancy. I mean the proportion of eligible veterans that
    have been cured. Sorry, I used the wrong terminology.
        Senator Cassidy. Let me ask just a follow up because I am
    going to learn here. The fellow told me listen, what we are
    told is send someone out to get the prescription from an
    outside provider, which would trigger the Choice Act fund of
    money, once they have the Rx, they can get their follow up in
    the VA.
        I guess you alluded to this in an earlier part of your
    testimony. If the pot of money for the Choice Act is not being
    used for pharmaceuticals, we cannot say listen, no one is
    treating Hepatitis C in this community except the VA doc's and
    they have room in their slot, so let them access the
    pharmaceutical portion of the money. Is that correct? I am
    asking. I do not know.
        Secretary McDonald. Your point is correct, the
    inflexibility of moving money causes us to try to do different
    things with different pots of money. By sending someone out, we
    can use the Choice Care money and get them treated, whereas if
    they were internal, given our budget issues in pharmacy, we may
    not be able to treat them.
        Senator Cassidy. The pharmaceutical portion of the
    patient's care is also under the Choice Act, it is not just the
    doctor's visit, the surgery, whatever, it is also the
    pharmaceuticals?
        Dr. Clancy. What we are thinking through, and no final
    decisions have been made, although our doctors have very, very
    strong opinions because they have built up a tremendous
    capacity and expertise, is we would refer eligible veterans to
    a community provider but they would come back and get the
    medications from us, which we think would be best for veterans
    and the taxpayers. It would be what we pay.
        Senator Cassidy. Getting back to your protocol, if you have
    a good protocol on whom to treat and whom not to treat, as a
    doc, I would not like that kind of discoordinated, well, we are
    going to send you out here because that is how we access this
    pool of money, but you are going to be followed up here because
    we have the better protocol for management.
        Really, the decision regarding management is critical at
    its outset, if you will. Should we treat this person. Is there
    no way around that?
        Dr. Clancy. What we are trying to do is actually get as
    many veterans access to this life saving curative treatment as
    possible. This probably would not be the ideal design.
        It would have some payoff, I think, of expanding the
    capacity in the private sector to take care of other patients
    with Hepatitis C, but it would require a lot of very close
    coordination back and forth between VA doc's and doc's in the
    community, and it would not work everywhere.
        Senator Cassidy. There is no way for the VA doc to access
    that Choice account for pharmaceuticals. It almost seems like
    we are trying to really Gerry rig----
        Dr. Clancy. Right now, that is not the case, and it gets
    back to the Secretary's point about inflexibility of budgets.
        Senator Cassidy. I have another question but I am out of
    time. I yield back.
        Senator Kirk. Let me add on, with the drug, we would not
    need a liver transplant. As I have heard, it is about $1,000 a
    pill. A liver transplant is about 300 grand. If we can avoid
    300 grand by curing a veteran, then we are going to have much
    better outcomes.
        Secretary McDonald. Mr. Chairman, we agree.
        Senator Cassidy. If I may say, speaking now as a liver
    doctor, there are four stages with cirrhosis, the stage before,
    transplant is the fourth stage. You really want to catch it in
    that third stage. The third stage slides into the fourth.
        If there is any way to expand coverage, and I am going
    over, and I thank you for your indulgence.
        Senator Mikulski. Mr. Chairman, speaking as vice chair
    here----
        Senator Kirk. Yes.
        Senator Mikulski. First of all, there is a medical reason
    of staying with one place. In other words, the VA is your
    medical home. It seems sending them out is because of your
    inability to have flexibility and money.
        Here is what I am suggesting to my leadership here. I would
    like to hear what is it that you need from us to give you the
    flexibility to do that, and number two, what are the
    impediments to do that? Do we have to go to authorizing, could
    we do language here, could we do something?
        You are in a medical home, you actually get these pills at
    a cheaper price because you can buy in bulk.
        Secretary McDonald. Correct.
        Senator Mikulski. Now there seems to be just bureaucratic
    rigidity maybe based on our law or something. With your
    capacity and with the concurrence of Senator Cochran, I would
    like to talk with you about this. I think, Dr. Cassidy, you
    have identified an excellent point here.
        Senator Kirk. Mr. Secretary, you look like you----
        Secretary McDonald. This is an important issue for Hep C
    because we are putting our doctors in the position of making
    decisions about somebody's life or death, whether they go to
    community care or our care.
        This is an important issue for the subcommittee in general
    because once we decided the Choice program, we are allowing the
    veteran to choose where they go. I do not have the ability to
    move money from VA care to Choice care or from Choice care to
    VA care, yet we have introduced the invisible hand of Adam
    Smith, allowing the veteran to choose, and I do not have the
    ability to move money to care for him.
        My biggest nightmare is that somebody goes for care and I
    have the money in the wrong pocket. You would not run a
    business this way.
        Senator Mikulski. Can you help us?
        Secretary McDonald. Yes, ma'am. I would love to.
        Senator Mikulski. I would like you to communicate with the
    chair and the ranking member who will then work with the
    leadership.
        Secretary McDonald. We have talked with both of them and
    they are both supportive.
        Senator Tester. I think Senator Cassidy brought up a great
    point and you have hit it right on the head. I think the
    challenge is going to be we are the problem. Congress is the
    problem on this. The challenge is going to be Congress pointing
    fingers at the Secretary saying you did not promote the Choice
    Act enough, and unless we keep that money in there, you will
    not promote that.
        The truth is I think he needs the flexibility to transfer
    in both directions, depending on where the veteran demand is.
        Senator Kirk. Senator Murphy.
        Senator Murphy. Thank you very much, Mr. Chairman. Thank
    you to all of you for taking so much time with us today.
        We have probably exhausted the subject of the
    implementation of the Choice program, but let me just add
    another wrinkle for you from our experience in Connecticut for
    you to ponder as you are thinking about how to implement this
    in a way that works.
        I agree with Senator Tester, I may have a question on this.
    You certainly are going to have to prove that you have extended
    the reach of the Choice program to everyone that deserves to be
    under its umbrella before you are going to get the ability to
    transfer money.

                               40-MILE DRIVE RULE

        Let me add another way in which that may happen to your
    laundry list. When the rule was 40 miles as the crow flies, it
    was largely meaningless in the State of Connecticut, small
    State, one VA.
        When it moved to 40 miles by way of car travel, that
    helped, but it ignored one reality in Connecticut, which is
    probably not exclusive to Connecticut, I would bet it plays out
    in places like Chicago and Los Angeles, which is that often the
    40-mile car ride brings you into New York City, which is a
    route that veterans from many parts of Connecticut are not
    going to make and frankly should not make.
        Because they are technically 40 miles away from a New York
    VA facility, they do not get access to VA Choice in their home
    town because they technically could get in their car and wait
    in traffic for 3 hours to try to get into Manhattan, Queens, or
    the Bronx.
        I know this is tough to solve, because what you are
    essentially trying to figure out is adding the ways in which
    people commute to the very basic numbers that you have assigned
    based on mileage.
        Is this something you are thinking about in terms of how
    you make sure that you are bringing as many people into the
    program as possible?
        Secretary McDonald. Yes, Senator Murphy. We are looking at
    something called the ``geographic burden statement'' in the
    Choice Act, and allowing the Secretary to have the flexibility
    to determine that geographic burden. That would solve the
    problem that you are describing.
        We are working with the interpretation that currently
    exists. We are looking to reinterpret it, and we are going to
    work with you on that.
        Senator Murphy. Okay, good. Thank you very much. West
    Haven, our facility, first of all, it has been a really great
    facility for veterans in Connecticut, notwithstanding the wait
    times, backlogs, accounting scandals in other VAs. We have been
    able to get veterans in pretty much on time to West Haven. They
    have done a really phenomenal job there.
        It is an old facility. It has an HVAC system that badly
    needs to be replaced. It still has ward style bedding in many
    parts of the hospital, absolutely no parking, which is a big
    deal in Connecticut.
        Secretary McDonald. It is a big deal everywhere.

                  CHOICE FUNDING FOR NON-RECURRING MAINTENANCE

        Senator Murphy. Big deal everywhere. If you do not get the
    ability to transfer dollars to the extent they are not used in
    VA Choice, where else do you go for these kinds of capital
    dollars? You are just going to have projects that simply are
    not going to get done, and dollars that are going to go unused,
    potentially, if you do not get this transfer authority.
        Secretary McDonald. That is exactly right. We have about
    70-plus line items that money is not moveable from one to the
    other. As we talked about the House markup on the construction
    bill, virtually cut in half, eliminating many of the projects
    that are very important to us.
        We do not have an alternative. It is ironic to me that
    Congress passes the laws telling us what benefits we need to
    execute to give the veterans. We are all for that, but if we do
    not get the money to do it, I cannot make the two match.
        When I look back at what happened in 2014 to the VA, before
    I became Secretary, I would say it was a total mismatch of
    demand versus supply. You would not run a business that way.
    The way the agency has been run is working to a budget, not
    working to requirements, not working on what customer needs
    are. I am going to change the Department. I am going to get us
    much more focused on veteran needs, but I need the wherewithal
    to do that. I cannot print the money myself.
        There is a choice for Congress. The choice is decide some
    different benefit profile for the veteran or provide the money
    that is needed for the benefit profile you have already
    approved.
        Senator Murphy. Hallelujah. A long question, I will save it
    for the second round or for the record. Thank you, Mr.
    Chairman.
        Senator Kirk. Senator Tester.
        Senator Tester. Just very quickly because I have to go. I
    have several questions for the record on billing, partnerships
    for mental health, and for Missoula CBOC. The whole committee
    does not need to hear this, but I thank you for your service,
    and we will look forward to the response to those. Thank you.
        Senator Kirk. The Senator for all of King's Cove.

                  CHOICE FULLY INTEGRATED REIMBURSEMENT SYSTEM

        Senator Murkowski. Thank you, Mr. Chairman. Secretary,
    welcome to the subcommittee, Dr. Clancy. I appreciated the
    opportunity that we had to visit last week as you kind of
    walked us through some of the changes.
        I was so appreciative that you took the time to visit with
    Katherine Gottlieb, who not only is an Alaska leader, but truly
    a national leader in innovation and working between systems,
    Federal systems, whether it is IHS and VA, but to really
    provide for an innovative level of care.
        I am excited about this proposal. Mr. Chairman, ranking
    member, and to our august vice chair--she did not hear that--I
    do think at some point in time it would be wonderfully
    instructive for this subcommittee and those of us who are
    focused on the VA healthcare benefits for our veterans around
    the country to understand the very, very innovative models that
    we are utilizing in Alaska, where given large spaces and
    limited facilities, we are figuring out a partnering through
    systems, working through the IHS, working through our community
    health centers.
        It is providing a level of service to our veterans that is
    immediate. We are breaking down some silos, and working with
    the Secretary here.
        I think we can look to some models that may work in rural
    parts of our country that will provide the benefits that our
    veterans have so honorably earned, but in a way that is good
    care, good care. We call it ``care closer to home.''
        I do not know about you, but when I am on the road, I am
    always sicker when I am away from home. If I can get back home
    where you have family and with our Native people and their
    Native foods being in a place that is comfortable.
        It is something I would like to talk to the subcommittee
    about further and let you know what we are doing.
        In that vein, Secretary, and Dr. Clancy, you can also jump
    in on this, we do have this partnering that is going on. I
    think the range of choices is good, but I also recognize that
    we are still offering range of choices within systems that
    still have their structure. I worry about moving of records and
    sharing of data, and really making sure that these separate
    rules within these differing programs do not cause more
    confusion, and thus limit our veterans in terms of their
    abilities to access these.
        Either Dr. Clancy or Secretary McDonald, can you give me
    any greater assurance as to how we are coming along with a more
    fully integrated system with this very unique model that we are
    seeing playing out in Alaska?
        Secretary McDonald. We have a lot of work to do together to
    get a single model that is integrated. Let me give you one
    example. We have five different ways that a veteran can get
    care in the community. Of those five different ways, each one
    has a different reimbursement profile.
        When Senator Tester and I were in Montana and he organized
    a town hall meeting of providers, doctors, hospital systems,
    and so forth, everybody there wanted ARCH. They loved ARCH as a
    system. Well, ARCH pays Medicare Plus. Choice, PC3 paid
    Medicare, Medicare Minus. Everybody loves ARCH but they do not
    love the others.
        To get to the right integrated system, we need to get all
    the providers on board. To get all the providers on board, we
    need to go to one integrated reimbursement system, one
    integrated system, and we are going to put that together and
    come to you, and hopefully get that passed, so that we can have
    no question to get the providers on board and the veterans have
    a place to go outside VA.
        Senator Murkowski. The sooner that can be done, I think it
    is to the veteran's benefit.
        Secretary McDonald. Absolutely.
        Dr. Clancy. The one point I would just add, it is working
    well, our sharing arrangements with the Tribal Health Services.
    Alaska is probably the most enthusiastic proponent and user of
    those agreements. We are thrilled about that, about $10 million
    from VA has gone to those services.

                           MYVA REGIONAL REALIGNMENT

        Senator Murkowski. I appreciate that. Know that we want to
    work with you. I will just make one comment. We had an
    opportunity to sit down and talk about this regional
    realignment. I have to tell you, I am concerned. As I look at
    these divisions, it seems that we are getting bigger.
        It looks like the territory that Alaska is in is almost
    identical to what the 9th Circuit U.S. Court of Appeals looks
    like. We have been fighting to break that up for a long time.
        I am just sending the head's up to you that I am concerned
    that when you have one region that is covering thousands of
    miles, three different time zones, the concern that the
    regional offices will be able to provide for that level of care
    that our veterans expect, I am sending out the signals.
        I have several different questions that I would like to
    ask. We have talked a little bit about how we are focusing on
    reducing the backlog, and I know it is always about numbers,
    but at the end of the day for the veteran, they want to know
    have you heard me, have you sat with me, what kind of care have
    you provided me.
        I know my case workers in my offices back in Alaska work
    hard, and we are not pushing them to close out constituent
    cases, boom, boom, boom, and we are assessing you on that
    level.
        Sometimes it is hard, but when we have one great success
    with our veterans, it makes our staff feel better, like they
    have really provided a service. I am concerned as we focus on
    we have to reduce the numbers, we are forgetting the customer
    service.
        As we forget the customer service, we are forgetting not
    only the satisfaction to the veteran, but the satisfaction to
    the VA employee, who gets great personal satisfaction in
    knowing that they have provided a level of care. They fixed a
    vet's problem today.
        If they cannot feel they are doing that, if they feel they
    are just processing numbers, the difficulty in recruiting and
    retention is going to continue, which means our backlog is
    going to continue.
        You are nodding because I know you agree.
        Secretary McDonald. We agree with you entirely. This is why
    we are all doing this. It is not because of the stock options
    you get from the Government. We are doing this because of the
    inspirational mission that we have of caring for those who have
    protected us.
        Senator Murkowski. We cannot lose sight of that.
        Secretary McDonald. We cannot lose sight of that. It is
    more than numbers. It is the picture of the gentleman behind
    you. It is exactly the reason I gave out my cell phone number
    during the first national press conference in September, and I
    take calls every single day from veterans, and I listen to
    them. You have to keep that visceral empathy of what we are
    trying to do. It is all very personal.
        Senator Murkowski. Thank you for your dedication. Thank
    you, Mr. Chairman.
        Senator Kirk. Senator Hoeven.

                  VETERANS ACCESS TO EXTENDED CARE LEGISLATION

        Senator Hoeven. Thank you, Mr. Chairman. Also, Secretary,
    thank you for being here today, appreciate it. I have visited
    with you before about legislation that I put forward, the
    Veterans Access to Extended Care.
        It is all about making sure that we can encourage nursing
    homes to take VA reimbursement for veterans by eliminating the
    small business contracting requirements they are currently
    under when they take VA reimbursement, but they do not have to
    deal with when they take Medicare reimbursement.
        That is a burden that really makes no sense for them, and
    they even have to undergo separate inspections, so there is a
    lot of red tape, a lot of compliance issues. Many nursing homes
    will not take that reimbursement.
        I would just ask you to comment if you would on how you can
    help advance that legislation so we can get it put in place.
        Secretary McDonald. We are very much in favor of it, so we
    would like to talk to everyone who is going to vote and make
    sure they vote in favor. We think that is the way to go.
        We have to focus on veteran outcomes, veteran customer
    experiences, and there is just so much red tape that is getting
    in the way of it. In a sense, our people are trying to work in
    a system where they are prisoners of the system rather than
    working on meeting veterans' needs. We are very much in favor
    of the legislation you have described and we want to work with
    you on it.
        Senator Hoeven. Thank you, Mr. Secretary. That is very
    helpful. In fact, recently at a roundtable in my State, many
    nursing homes were represented there, and they said if we could
    get this passed, they would then look at taking VA
    reimbursement. I think it would be very helpful. I appreciate
    your willingness to help.

                 VETERANS ACCESS TO COMMUNITY CARE LEGISLATION

        The second question I have for you is it is similar but it
    goes to the healthcare/medical care from local providers. You
    have touched on it here in a number of your responses.
        I am a co-sponsor and others on the bill, it is similar, it
    is the Veterans Access to Community Care, and you have touched
    on that and some of the cost factors, but essentially the idea
    is to get veterans' care closer to home, when they have to go a
    long distance to a health center. They may have a CBOC.
        For example, in my State, we have one VA health center. It
    is a very good health center. It covers North Dakota and most
    of Western Minnesota. They do a good job. It is a long way,
    800-mile round trip from places like Williston, which I think
    is the fastest growing community under 50,000 in the country
    now, maybe over 50,000. I do not know. When they cannot get
    that service at a CBOC, we have real geographical issues here.
        Your thoughts on what we can do to address it in a way that
    serves our veterans and then makes sense in terms of dollars
    and sense, to affordability.
        Secretary McDonald. I think job one is to really execute
    the redefinition of the 40-mile limit, and do that as quickly
    as possible so we can really determine how many people will
    want to use community care.
        We really do not know today how many people want to use
    community care. We know the redefinition of the 40-mile limit
    will virtually double the number of veterans who will take
    advantage of it. That is what we think. We need to find that
    out.
        Second, I want to redefine or reinterpret the geographic
    burden so that we have more flexibility, I have more
    flexibility to provide the ability for people to call it a
    geographic burden and go to community care.
        The third thing we are looking at, which we talked about
    earlier, is whether or not we look at whether we define it as a
    VA facility that provide that service or a VA facility that
    does not. Opening up that aperture could potentially be
    extremely costly, as I said earlier. It could be $10 billion a
    year to $40 billion a year. Of course, the whole Choice Act,
    this part of it was $10 billion over 3 years.
        That is a conversation we will have to have. We need the
    numbers. We need some experience to be able to develop that
    algorithm.
        Senator Hoeven. I think that is really an important area,
    to figure out how to do this. Again, if they are within 40
    miles of a VA health center, then that 40-mile rule works
    pretty well. If you have these really long geographic distances
    where they have a CBOC, it is a real problem because there is a
    big difference. If they have to have open heart surgery, sure,
    maybe that trip, I understand, and so do they.
        There are a lot of situations where there are these
    services in between what a CBOC can provide and what a VA
    health center can provide, where it actually would be cost
    effective for the VA, too, because that veteran may have to
    travel one day, get the service the second day, travel the
    third day, and you are going to pay for both the travel and the
    accommodations as well as the service.
        In the case of a very senior person, think about the burden
    of the travel. For a younger person who is working, they are
    not taking 3 days off work. It is not only about figuring out
    how to do this for the veteran, but I think it can be cost-
    effective for the VA, too, if we do it as you say, figure out
    the numbers and figure out how to do it. There is a difference
    between carte blanche and doing it in a way that makes sense.
        Thanks for your help in this, and I look forward to working
    with you on it.
        Senator Kirk. Senator Murray.
        Senator Murray. Thank you very much, Mr. Chairman. Mr.
    Secretary, good to see you again. Last year, I introduced
    legislation to expand the caregiver support services the VA
    offers and to make the full program available to veterans of
    all eras.
        I am going to be reintroducing that legislation tomorrow.
    Senator Collins is my co-sponsor on that, and I want to work
    with you to make sure we strengthen the program and make sure
    it has the resources it needs to take on an additional
    workload.
        I really was happy to see the Department requested a
    significant increase in funding for that program, and I have
    also asked for additional resources for the Department to hire
    more caregiver support coordinators.
        I wanted to ask you today, do you know how many more
    caregiver support coordinators you think you will need over the
    next 2 years to support the current needs, and to take care of
    new veteran eras coming into this program.
        Secretary McDonald. Senator Murray, I do not know exactly,
    but I do know we are very supportive of the legislation you
    have written. We think pre-9/11 caregivers should get the same
    benefits post-9/11 get.
        I have spent a lot of time with caregivers myself. They are
    the unsung heroes of our Nation. Many of them have to give up
    their jobs, and many of them have to purposely not take on work
    and not take on income because then they would fall out of the
    program.
        It is a real conundrum for them, and it is life changing
    for families. We have to do this. We are eager to take it on
    and we are eager to hire the people we need.
        I have been to several college campuses. There are people
    who want to join the VA to do this job. They are really eager
    to join.
        Senator Murray. Good. If you could let us know what you
    think you are going to need over the next 2 years, that would
    be really helpful.
        Secretary McDonald. We will.

                     SPOKANE, WASHINGTON VA MEDICAL CENTER

        Senator Murray. I think it is absolutely vital, so thank
    you. I also wanted to ask you about the Spokane VA Medical
    Center. As you are very aware, the emergency room at the
    Spokane Medical Center has dramatically cut back its operations
    because of staffing problems.
        The medical center has repeatedly pushed back the date to
    resume full time operations, and now I am being told it is not
    going to be until next fall.
        The Spokane VA has also recently asked for its surgical
    complexity rating to be downgraded, and I am really concerned
    about that request and the potential impact on the access to
    care for our veterans in that region.
        Last year, I asked Secretary Shinseki and Under Secretary
    Petzel whether there were any plans to reduce programs and
    services at the Spokane Medical Center, and they assured me
    there were not. Yet, we now see this facility being downgraded.
        The medical center is not getting the job done, so I want
    to know what you are going to do to restore emergency services
    and surgical care for the veterans that rely on the Spokane VA.
        Dr. Clancy. One of the big challenges that we have had,
    Senator, and we have discussed this previously, is actually
    recruiting top-notch----
        Senator Murray. I have been hearing that for 10 years.
        Dr. Clancy. Yes. I am meeting with the College of Emergency
    Physicians either next week or the week after that, and the
    American Legion also has some ideas about how we might work
    with some of the hospitals, and we have also raised the
    available salaries that can be paid to people there.
    Ultimately, if we cannot recruit top-notch talent, I think we
    are going to need to explore some kind of partnership between
    the Spokane facility and local hospitals vis-a-vis emergency
    care.
        Senator Murray. This has been ongoing forever and it is not
    being resolved, and it is a huge issue for our Spokane
    veterans. I want to talk with you again, Mr. Secretary. We have
    to get this resolved however we do it.
        Secretary McDonald. While I know it has been going on
    forever, and we accept full responsibility for it, I have been
    to over a dozen medical schools recruiting doctors. I have been
    to the osteopathic convention recruiting doctors.
        We are the canary in the coal mine. We are seeing the
    problem that exists in American medicine. We need more primary
    care doctors. We need more doctors who will live in rural
    areas. We need more mental health professionals. We are working
    extremely hard to do that, to find them, identify them, and
    convince them, and give them a monetary incentive to locate
    there.
        We are going to continue to work very hard until we get
    that Spokane facility up and running.

                   WOMEN VETERANS ACCESS TO QUALITY CARE ACT

        Senator Murray. I really appreciate it. One other question,
    I just have a few seconds left. Right now, the Veterans Affairs
    Committee is holding a hearing on VA services for women
    veterans. I want to stress how critically important it is for
    the VA to prepare now to meet the needs of a growing population
    of women veterans.
        I was really pleased to work with Senator Heller to
    introduce the Women Veterans Access to Quality Care Act this
    year. That legislation is going to go a long way to helping the
    VA provide safe, private healthcare for women.
        VA already has a serious backlog in construction, but as
    the number of women veterans increase and as they age, there is
    going to be a need for more space dedicated to gender specific
    care.
        I wanted to ask you what the VA is going to do to meet the
    treatment space for women veterans over the next 10 years.
        Secretary McDonald. Some of our budget that was cut
    dramatically in the House markup was slated for women's
    clinics. We are installing women's clinics in our facilities.
    We are hiring the gynecologists and other specialties that we
    need in order to staff those clinics.
        To us, this is critically important. Eleven percent of
    veterans today are women. It is going to go up to 20 percent by
    2017 or so. We have to get this done.
        Many of our buildings, as I said earlier, are over 70 years
    old, some of them----
        Senator Murray. They do not have private space for women.
        Secretary McDonald. And they have single gender bathrooms.
    We have to get this fixed. That is why our construction budget
    was as high as it was.
        Senator Murray. Mr. Chairman, I am out of time. I will
    submit the rest of my questions, but I really appreciate that
    and I want to keep working with you on this.
        Senator Kirk. Without objection.

                       DENVER MAJOR CONSTRUCTION PROJECT

        Mr. Secretary, let me talk about the hippopotamus in the
    room, about Denver. You guys asked for $5 billion to come from
    the Choice Act to help fix Denver. Where do we go from there in
    your view?
        Secretary McDonald. Where do we go in terms of?
        Senator Kirk. What is your instinct for Denver?
        Secretary McDonald. Our instinct for Denver is to finish
    constructing the medical complex. We would use----
        Senator Kirk. I would say finish constructing the medical
    complex under the supervision of the Army Corps of Engineers.
        Secretary McDonald. Yes, they are already on the project.
    They would complete the project with us. We plan to use the
    Army Corps of Engineers in the future for major construction
    projects.
        Senator Kirk. I will make it simple for you, my position is
    Cory Gardner's position, to make sure that you work very
    closely with Senator Gardner. Thank you.
        Secretary McDonald. We agree.
        Senator Kirk. Thank you.
        Secretary McDonald. In fact, the Deputy Secretary was out
    in Denver yesterday and has been there, I think, seven times
    since he has come into position.
        Senator Kirk. Senator Baldwin.
        Senator Baldwin. Thank you, Mr. Chairman. Hopefully, three
    questions I can get in for this second round. I should follow
    up for the record also.

                         TOMAH, WISCONSIN FIELD HEARING

        Dr. Clancy, you were at the field hearing in Tomah,
    Wisconsin, on March 30. I am a member of the Senate Homeland
    Security Committee that jointly held that with the House
    Veterans Affairs Committee.
        We heard incredibly powerful testimony from family members
    of veterans who had lost their lives at the Tomah facility or
    after care there, as well as whistleblowers.
        Now several months into this investigation, even at that
    hearing where we were hearing of more deaths that were
    unexplained that we had not heard before: in fact, I sent you
    another letter today, not based on testimony at that hearing
    but somebody who came up to me after the hearing and said, ``my
    husband was treated there'' and I have concerns related to all
    those that you have been hearing testimony about.
        I just want to stress how important it is to have the
    investigation be sufficiently expanded to review those deaths,
    and I want your assurances that to the degree we can follow up
    on everyone that has been reported during the conduct of your
    investigation, that you will follow the evidence where it
    leads.
        Dr. Clancy. You have my full commitment; absolutely.
        Senator Baldwin. I appreciate that.
        Senator Kirk. If the Senator would yield, let me just add I
    would associate my comments with Senator Baldwin, because a lot
    of Illinois veterans would use the Tomah facility. We want to
    make sure we fix the candy store, it was called.
        Senator Baldwin. Candyland.
        Senator Kirk. Candyland; yes.
        Senator Baldwin. On the issue of proper treatment for pain,
    Secretary McDonald, not only do we have to crack down on
    inappropriate use of opioids and benzodiazepines, we have to
    increase the alternatives to narcotics for pain management.
    Veterans are calling for alternatives and complementary
    medicines, and treatments, pain treatment.
        We are here in the appropriations committee. I want to ask
    you how the VA budget request supports the expansion of
    complementary and alternative medicine and wellness programs
    that would help veterans dealing with acute and chronic pain.

                   ALTERNATIVE MEDICINE AND WELLNESS PROGRAMS

        Secretary McDonald. As we look at VA opioid use, which as
    Dr. Clancy said, we track quite closely, it is moving down. The
    reason it is moving down is I think we are the largest user of
    alternative approaches in the country.
        We have had tremendous success with acupuncture, with yoga,
    with electronic stimulation, and we want to continue that.
    Anything we can do to provide a different approach than opioid
    use, we want to do.
        As I have been touring all of our facilities, I think I
    have visited about 125 so far, I am always inspired by those
    people who are teaching yoga. In one location not too long ago,
    there was an art instructor that was helping use art as a way
    to allow people to become themselves again without opioid use.
        Equine therapy, we now use equine therapy in places like
    New Bedford, Massachusetts. These have been proven to be
    successful. Any data-based way we can prove a successful
    program, we want to do.
        Dr. Clancy. I would just add, Senator, that we are doing a
    lot of research in this area, trying again to understand which
    veterans and what characteristics will predict a better
    response to alternatives to narcotics, because that is very,
    very critical.
        I think it gets back to the notion of an informed
    conversation between a clinician and a veteran, family, and so
    forth.
        Senator Baldwin. One final question. We were just talking
    about the health workforce at the VA. One of the things that I
    have certainly observed in rural medicine, for example, is if
    you received your training there, perhaps if you were born and
    raised in a rural environment, you are likely to make a
    commitment in your career to remaining there.

                 GRADUATE MEDICAL EDUCATION RESIDENCE POSITIONS

        I think the same is very much true with regard to the VA.
    In the VA reform law that was passed last year, I authored a
    provision that was ultimately included that would increase by
    1,500 over 5 years the number of GME residency positions.
        It is my understanding that in this first year of
    implementation, 204 new resident positions were added. I would
    like briefly for you to give me a status update on the
    program's implementation.
        Dr. Clancy. Senator, first, thank you for those additional
    residency slots, because I think that is something that will
    keep paying dividends in terms of capacity. We did not actually
    think we could start residency positions until a year from this
    July because of the slow ramp-up. However, what we did was go
    to our existing partners and ask whether you have additional
    spaces, and that is where we got the 204 slots.
        We do not know what the uptake has been, so for example,
    every year for the national match, it is kind of like the
    Dating Game, right, primary care slots tend to go unused, so we
    can get you a report on the 204. Match day was just a few weeks
    ago.
        One of the other areas, to get back to your point about
    rural care, that we are working on, is trying to figure out how
    we work with facilities and communities, who would desperately
    like to do what you just described, but may not have the
    infrastructure, how do we do that to make sure we can get them
    the faculty support they need so the residents who are trained
    there get the proper education and so forth.
        It is a very exciting opportunity, so thank you for that.
        Secretary McDonald. We are also pursuing osteopathic
    doctors, DOs. Osteopathic doctors tend to be more family or
    primary care physicians. They also tend to locate in rural
    areas because that is where the medical school is.
        Today, less than 1 percent of our doctors in VA are DOs, so
    we are seeing if there is a way we can get more DOs. I spoke at
    their convention in order to get more people to locate in rural
    areas.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Kirk. I think we have pretty much beat this to
    death now. Let me call us to a close, and we will keep the
    record open until Tuesday, April 28, so members may have a
    chance to put in questions for the record.
        [The following questions were not asked at the hearing but
    were submitted to the Department for response subsequent to the
    hearing:]
                 Question Submitted to Hon. Robert A. McDonald
                    Question Submitted by Senator Mark Kirk
                                   choice act
        Question. Your budget request included an interesting statement
    ``VA is hearing directly from veterans and their representatives that
    they would prefer to get their care in VA facilities from the medical
    professionals they know and with whom they have relationships.'' You
    also claimed the Choice Act will likely be underutilized and want to
    transfer money out of the program for other VA needs, which we find
    curious given the program is just getting started.
        What data and facts are you using as the basis for these
    statements?
        Answer. As of April 11, 2015, there were 43,971 authorizations for
    choice and 37,648 appointments scheduled. The Department of Veterans
    Affairs recognizes that early utilization of the Choice Program has not
    been as robust as expected. Based on input from all of our
    stakeholders--from veterans, Veterans Service Organizations, our
    employees, and Congress, we know that many veterans are frustrated with
    the Choice Program and these frustrations and confusion are leading to
    lower use of Choice. However, we have been eagerly seeking feedback on
    the program from these stakeholders and we are working diligently to
    address any challenges that may be contributing to the low utilization.
                                     ______

                   Questions Submitted by Senator Jon Tester
                               building capacity
        Question. In this budget, the VA assumes a cost shift of $452
    million next fiscal year from the discretionary VHA program for non-VA
    care to the new Choice Act program. However, it's becoming clear that
    the utilization of the Choice Program isn't as high as expected, at
    least not at this point. Meanwhile, VA's traditional non-VA care
    programs are seeing higher utilization rates than at this same time
    last year. With no flexibility to move Choice Act funds and given the
    VA's assumptions in this proposed budget, are we setting up the VHA for
    a shortfall should the current utilization rates hold?
        Answer. We continue to closely monitor usage of the Choice Program
    and non-VA care and will provide additional information when we submit
    our letter on the sufficiency of funds in the three medical care
    advance appropriations for fiscal year 2016, as required by the
    Veterans Health Care Budget Reform and Transparency Act of 2009.
                             agency collaborations
        Question. I know that a number of VSOs have urged the VA to work
    more closely with other agencies in the delivery of care. One example
    is stronger partnerships with the Department of Health and Human
    Services to expand mental health services through community mental
    health centers. Can you speak more to this concept and how it could
    expand the reach of mental health services for veterans and their
    families?
        Answer. Through the Interagency Task Force (ITF) on Service Member
    and Veterans Mental Health and several specific initiatives such as the
    Cross-Agency Priority Goal on Service Members and Veterans Mental
    Health (CAP Goal), VA has worked closely with the Department of Health
    and Human Services as well as the Department of Defense on a number of
    mental health efforts over the past several years. For example, VA
    mental health experts have participated in Policy Academies conducted
    by the Substance Abuse and Mental Health Services Administration, at
    which State-level plans are developed for community mental health
    programs to improve services for veterans and their families. VA and
    DOD also jointly developed a comprehensive curriculum on military
    cultural competence that is available online and provides free
    continuing education credits to healthcare providers across the
    Government and in the community (i.e. to non-government providers who
    may serve servicemembers, veterans and family members as a portion of
    their patient population). Efforts are underway to more broadly
    disseminate this course and other resources to community mental health
    providers.
                                  vet centers
        Question. What is the VA's long-term strategy for mobile vet
    centers?
        Answer. VHA's Readjustment Counseling Service (RCS) is currently
    authorized a fleet of 80 Mobile Vet Centers (MVC) that are designed to
    extend the reach of Vet Center services by bringing focused outreach,
    direct service provision, and referral services to communities that do
    not meet the requirements for a ``brick and mortar'' Vet Center, but
    where there are veterans, servicemembers, and families in need of
    services. In many instances, these communities are distant from
    existing services and are considered rural or highly rural.
        Each MVC includes confidential counseling space for direct service
    provision as well as a state-of-the-art satellite communications
    package that includes fully encrypted tele-conferencing equipment,
    access to all VA systems, and connectivity to emergency response
    systems. Vet Center staff members regularly collaborate with VA
    partners to create a single VA Footprint at events to ensure access to
    all available VA services and benefits. The placement of these vehicles
    is designed to cover a national network of designated Veterans Service
    Areas (VSA) that collectively covers every county in the continental
    United States, Hawaii, and Puerto Rico.
        MVC staff, in collaboration with local and Regional RCS Leadership,
    will develop and implement a focused access plan to ensure veterans,
    servicemembers, and their families within their VSA have access to Vet
    Center and other VA services.
        Each access plan will be considered a living document to be
    reviewed and updated on a biannual basis to ensure it is consistent
    with the needs of the veteran and servicemember population within the
    VSA. These plans will take into account the RCS goal of increasing MVC
    participation in events by 15 percent over the previous fiscal year.
                                     ______

                    Questions Submitted by Senator Tom Udall
                             general accountability
        Question. New Mexico's VA Hospital is within the same region as
    Phoenix, and experienced some of the same scheduling abuses. I want to
    make sure that headquarters does not forget about the issues in New
    Mexico as well. I have worked closely with the Inspector General's
    office to refer many very serious complaints and support his
    investigation. Given the unacceptable nature of recent VA problems, I'm
    glad we have new leadership at the VA, both in Washington and in New
    Mexico. Will you give me your commitment to work to restore a culture
    of high standards and accountability at the VA including in New Mexico?
        Answer. Yes. VA's goal continues to be strengthening its culture of
    accountability and putting renewed focus on employee-led, veteran-
    centric change. Improvements in workforce culture, with a focus on
    ICARE values (integrity, commitment, advocacy, respect, and
    excellence), will allow VA to address issues as they arise, rather than
    necessitating employee termination following repeated and/or pervasive
    poor behavior.
                             polytrauma and travel
        Question. The VHA's budget mentions that TBI and polytrauma are
    major concerns for veterans who served in Iraq and Afghanistan. I
    couldn't agree more. However, I am concerned about the large distances
    many veterans, especially those in the west, have to travel to visit a
    polytrauma rehabilitation center or a polytrauma network site. These
    facilities offer advance care for our veterans, and unfortunately, for
    New Mexicans, the closest sites are far away in neighboring States. Can
    you tell me what the VHA's plan are for expanding access to polytrauma
    care, and what it would cost to increase the coverage in the western
    United States?
        Answer. To improve access to specialized rehabilitation care for
    Veterans with TBI and Polytrauma who live in the western United States,
    VHA has expanded the Polytrauma System of Care, increased utilization
    of telehealth, and engaged community providers to partner in healthcare
    delivery for veterans. VHA deployed a network of 2 Polytrauma
    Rehabilitation Centers, 5 Polytrauma Network Sites, and 12 Polytrauma
    Support Clinic Teams to provide comprehensive TBI rehabilitation
    services in the western United States. Additionally, 18 Polytrauma
    Points of Contact sites offer a more limited range of TBI services with
    specialized providers.
        In fiscal year 2014, VA facilities in Veterans Integrated Service
    Networks (VISN) 18 22 provided care for 12,721 veterans with TBI and
    completed 40,895 visits. This represents approximately 24 percent of
    the TBI rehabilitation workload reported nationally. Overall, the TBI
    rehabilitation workload reported in VISNs 18 22 is in line with the
    distribution of programming assets through the Polytrauma System of
    Care.
        At the same time, VA pursues new opportunities to improve access to
    specialized rehabilitation care for veterans with TBI and Polytrauma.
    These include:

      --Expanding medical rehabilitation services: VA added two Polytrauma
            Support Clinic Teams in Nevada and Montana and hired new staff
            to augment existing programs. For example, the El Paso VA added
            three new providers with dedicated time in polytrauma/TBI care.
            Overall, the number of rehabilitation specialists working in
            VISNs 18--22 grew by 7.5 percent in fiscal year 2014 from
            fiscal year 2013.

        While deploying additional rehabilitation assets continues to be
    one of the avenues for improving coverage, VA has to balance this with
    the rather low demand for services across large geographical areas.
        Leveraging technology, specifically telehealth: This provides an
    effective means of reaching more patients in remote areas. TBI and
    Polytrauma telehealth services reached 57 percent more patients in
    fiscal year 2014 than in fiscal year 2013. VA is working to bypass some
    of the existing difficulties with the quality of broadband in rural
    areas by leveraging new technologies such as the newly released ``CVT
    Patient Tablet,'' which facilitates broadband videoconferencing between
    the veteran's home and the provider, who may be located in a different
    State or VISN.
        Partnering with community providers to deliver healthcare services:
    While VA has used fee-based care successfully in the past, the new
    processes developed as a result of the Choice Act provide clarity and
    facility to these partnerships. VA is also reaching out to community
    partners to provide education and training using VA-developed materials
    with the goal of supporting continuity of services. The cost of
    expanding medical rehabilitation services in VISNs 18-22 could include
    increased staffing at the 18 Polytrauma Point of Contact sites that do
    not have fully staffed TBI/Polytrauma teams. To fund additional TBI/
    Polytrauma teams at these sites would cost approximately $550,000 per
    year (salary dollars for 3.5 staff per site), for a total of $9,900,000
    annually. The cost of increasing telehealth services and community
    partnerships is more difficult to calculate at this time as technology
    evolves and community partnerships mature.
        VA continues to work to increase access to specialized TBI and
    Polytrauma care by leveraging assets, technology, and community
    partners and balancing those with veterans' needs in communities across
    the western United States.
                                   choice act
        Question. One concern I have heard about the veterans choice act is
    that the VHA cannot guarantee that the veteran will receive the same
    quality of care that they would at a veterans hospital or clinic. How
    is the VHA working to ensure that veterans receive quality care when
    they make use of outside medical care as authorized in the veteran's
    choice act?
        Answer. VHA works to maintain quality oversight of all purchased
    care from the community related to certain standards, including, but
    not limited to, credentialing, access to care/timeliness, patient
    safety, and patient satisfaction. For example, to increase governance
    and oversight of quality and patient safety in the field for VA Care in
    the Community, the Choice Program has adopted a multi-committee
    structure focusing on Quality Oversight and Safety and Patient Quality
    and Safety.
                                  rural health
        Question. Based on the budget requirements and the VHA's
    experience, which would be the best way to improve access to quality
    care. An expanded fee for service program, or a program which aims to
    recruit and retain rural physicians and nurses at rural CBOCs and which
    helps to expand telehealth And which would be most cost-effective for
    the American taxpayer?
        Answer. VA is committed to delivering timely and high quality
    healthcare to our Nation's veterans, and the ultimate goal is to align
    our capacity with the veterans' needs and preferences. Therefore, the
    most valuable measures we use to understand an individual's ability to
    access our system are the perceptions and opinions of our veteran
    patients. This requires balancing our fee for service program,
    recruiting and retaining the best medical professionals, and using
    innovative technologies such as telehealth to increase access to care
    for veterans.
                               federal it reform
        Question. Describe the role of the Veterans Health Administration's
    Chief Information Officer (CIO) in the development and oversight of the
    IT budget for the Veterans Health Administration. How is the CIO
    involved in the decision to make an IT investment, determine its scope,
    oversee its contract, and oversee continued operation and maintenance?
        Answer. The VHA CIO prepares annual IT resources budget requests
    that are approved by the Undersecretary for Health and then through the
    Information Technology Leadership Board (ITLB), before being presented
    to the Secretary. The VA ITLB is the body that recommends the annual
    budget request to the Secretary. As such, with advice from staff, the
    VA CIO works with VHA IT personnel to determine project scope and
    subsequent contractual efforts needed to undertake development efforts
    to provide needed technological solutions to our business partners in
    the Department (VHA, the other Administrations, and Staff Offices). The
    VA CIO plays a key role in developing the annual budget submission, as
    well as being the single point of authority for IT in VA, is the sole
    individual for overseeing continued operation and maintenance of
    deployed IT capability in the Department.

        Question. Describe the existing authorities, organizational
    structure, and reporting relationship of the Chief Information Officer.
    Note and explain any variance from that prescribed in the newly-enacted
    Federal Information Technology and Acquisition Reform Act of 2014
    (FITARA, Public Law 113-291) for the above.
        Answer. There is no variance between the requirements set forth in
    the Act and the activities that the VA CIO has been performing,
    subsequent to 2009's consolidation of IT into a centralized account.
    The VA CIO is the sole authority for all matters related to IT in VA
    and reports directly to the Secretary for Veterans Affairs (SecVA).

        VA's CIO:

      --Approves agency's IT budget requests
      --Certifies that IT investments adequately implement incremental
            development
      --Confirms that all requested IT positions meet ongoing requirements
      --Reviews and approves VA's contracts and funds reprogramming
            requests for IT
      --Directs IT capital planning and investment review process and
            certifies the accuracy and risks associated with the
            investments
      --Administers the development of an integrated IT infrastructure
      --Promotes efficient and effective design and operation of
            information resource management processes

        Question. According to the Office of Personnel Management, 46
    percent of the more than 80,000 Federal IT workers are 50 years of age
    or older, and more than 10 percent are 60 or older. Just 4 percent of
    the Federal IT workforce is under 30 years of age. Does the Veterans
    Health Administration have such demographic imbalances? How is it
    addressing them?
        Answer. The Office of Information and Technology (OI&T) within the
    Department of Veterans Affairs (VA) reflects similar percentages. The
    attached table displays the following statistics. OI&T has a total
    employee population of 7,916, which includes all IT workers and those
    that provide support to the IT workforce. OI&T has 145 (1.8 percent of
    the total) employees under age 30; 1,290 (16.3 percent) employees
    between ages 30 and 39; 2,314 (29.2 percent) employees between ages 40
    and 49; 3,087 (39.0 percent) employees between ages 50 and 59; and
    1,080 (13.6 percent) employees over age 60. Percentages for IT
    employees (those with occupational specialty 2210) are very similar and
    near identical to the entire population of OI&T.
        We are refreshing our existing Human Capital Management (HCM)
    Strategic Plan to specifically address this topic. We are analyzing
    existing trends within industry as well as the rest of the Federal
    Government. We are leveraging our existing contracted consultants to
    gain insight on how the entire Federal Government is going to address
    this changing workforce. For example, OI&T is examining phased
    retirement, an initiative that for which the Office of Personnel
    Management (OPM) issued a final rule last year. If implemented,
    employees who are eligible for retirement would continue to work part
    time while drawing a portion of their retirement. This program could
    aid OI&T succession planning efforts.

                                                                              TABLE
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     IT Employees in occupational specialty
                              Age Demographic                                  Total OI&T Workforce: 7,916             2210 (Computer Specialist): 6,661
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Under 30..........................................................                        145 ( 1.8 percent)                         118 ( 1.8 percent)
    30-39.............................................................                       1290 (16.3 percent)                        1107 (16.7 percent)
    40-49.............................................................                       2314 (29.2 percent)                        1962 (29.5 percent)
    50-59.............................................................                       3087 (39.0 percent)                        2571 (38.6 percent)
    Over 60...........................................................                       1080 (13.6 percent)                         903 (13.6 percent)
    --------------------------------------------------------------------------------------------------------------------------------------------------------

        [For further information, see the VA document ``Office of
    Information and Technology: Human Capital Strategic Plan 2014-2022.'']

        Question. How much of the Veterans Health Administration's budget
    goes to Demonstration, Modernization, and Enhancement of IT systems as
    opposed to supporting existing and ongoing programs and infrastructure?
    How has this changed in the last 5 years?
        Answer. As mentioned in the opening remarks, all VHA IT
    expenditures are funded by the central IT Appropriation, which is
    administered by the Office of Information Technology (OIT). The Office
    of Information Technology Development, Modernization, and Enhancement
    (DME) and Operation and Maintenance (OM) budget for the 5 years from
    fiscal year 2012 through fiscal year 2016 is in the table below:

                                                          TABLE
    ----------------------------------------------------------------------------------------------------------------
                                                                                                         Fiscal Year
                  (Dollars in Million)               Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year      2016
                                                         2012         2013         2014         2015       Request
    ----------------------------------------------------------------------------------------------------------------
    Total DME......................................     $580.358     $517.921     $495.291     $548.335     $504.743
    Total OM.......................................   $1,616.018   $1,834.523   $2,181.653   $2,316.009   $2,512.863
    ----------------------------------------------------------------------------------------------------------------

        Question. What are the 10 highest priority IT investment projects
    that are under development in the Veterans Health Administration? Of
    these, which ones are being developed using an ``agile'' or incremental
    approach, such as delivering working functionality in smaller
    increments and completing initial deployment to end-users in short, 6-
    month timeframes?
        Answer. VA develops hundreds of IT projects under several
    categories (such as Access to Health Care, Eliminating the Backlog,
    Eliminating Veteran Homelessness, and Information Security, to name a
    few). Each Administration and business function within VA has its
    respective priorities in support of the overall VA mission. The list
    provided below represents VA's priorities in IT development across a
    broad range of Department goals.
        Health: Vista Evolution (including Pharmacy, Laboratory, Medical
    Appointment Scheduling System, and Enterprise Health Management
    Platform (eHMP)), Mental Health, Surgery, Bar Code, Enrollment Customer
    Enhancements, Purchased Care, Medical Care Collection Funds, Genomic
    Informatics System for Integrative Science (GenISIS), Virtual Lifetime
    Electronic Record (VLER), Mobile Applications
        Benefits: VBMS, eBenefits, Customer Relationship Management
        Memorial and Corporate Products: HRIS/HR Smart, PIV Enhancements,
    VATAS Enhancements, Memorial and Benefits Management System (MBMS)
        Over the past several years, VA has become a leader among
    Government agencies in implementing agile development. In fact, the
    U.S. Government Accountability Office (GAO) Report 14-361 indicated
    that VA was the only agency to implement agile development methodology
    fully. PMAS is the disciplined, data-driven approach VA utilizes to
    support on-time delivery of IT capabilities. VA is developing each of
    the projects in this list using an agile development approach.

        Question. To ensure that steady state investments continue to meet
    agency needs, OMB has a longstanding policy for agencies to annually
    review, evaluate, and report on their legacy IT infrastructure through
    Operational Assessments. What Operational Assessments have you
    conducted and what were the results?
        Answer. VA's OIT Service Delivery and Engineering (SDE) office has
    conducted an annual Operational Analysis (OA) based on OMB criteria for
    its major steady-state investments, which are Medical IT Support,
    Benefits IT Support, and Enterprise IT Support. These investments have
    performed within acceptable variances, or higher than performance
    metric thresholds. Notably, the average availability of major systems
    has consistently been above 99 percent.

        Question. What are the 10 oldest IT systems or infrastructures in
    the Veterans Health Administration? How old are they? Would it be cost-
    effective to replace them with newer IT investments?
        Answer. The table below describes 18 VA systems that leverage
    legacy technology (i.e., common business-oriented language (COBOL)
    software or mainframe hardware) and are potential candidates for
    replacement. While the VA does not track the exact deployment date for
    legacy systems, many of the listed systems have been active for 25
    years or more. Over the last year, VA has been developing a
    comprehensive divesture process that will be utilized to assess system
    value based on a variety of technical and business criteria to
    determine if legacy systems should be divested or maintained.
    Implementation of this process is anticipated to begin in fiscal year
    2016.
        Veterans Health Information Systems and Technology Architecture
    (VistA) is a system containing over 100 individual component
    applications (Pharmacy, Lab, Imagining, etc.) with unique instances at
    data centers across the Nation. VistA includes the Computerized Patient
    Records System (CPRS). VA is placing special emphasis on developing and
    deploying a modern version (VistA Evolution) to replace and upgrade
    VistA.

                                                          Table
    ----------------------------------------------------------------------------------------------------------------
                                                                                    Parent
                 VASI Id                System Acronym        System Name        Organization        Organization
    ----------------------------------------------------------------------------------------------------------------
    1277............................  FMS...............  Financial           OM................  Office of Finance
                                                           Management System.

    1174............................  DSS...............  Decision Support    OM................  Office of Finance
                                                           System.

    1423............................  MPCR..............  Monthly Program     OM................  Office of Finance
                                                           Cost Report.

    1160............................  CCS...............  Credit Card System  OM................  Office of Finance

    1712............................  VETSNET...........  Veteran Service     VBA...............  Veterans Benefits
                                                           Network.                                Administration

    1352............................  IPS...............  Insurance Payment   VBA...............  Veterans Benefits
                                                           System.                                 Administration

    1053............................  BIRLS.............  Beneficiary         VBA...............  Office of the
                                                           Identification                          Deputy Under
                                                           Record Locator                          Secretary for
                                                           System.                                 Disability
                                                                                                   Assistance

    1094............................  CH 1606...........  Chapter 1606--      VBA...............  Veterans Benefits
                                                           Montgomery GI                           Administration
                                                           Bill Selected
                                                           Reserve--Benefits
                                                           Payment System.

    1196............................  ESS...............  Enterprise Self     VBA...............  Veterans Benefits
                                                           Service.                                Administration

    1145............................  COVERS............  Control of          VBA...............  Veterans Benefits
                                                           Veterans Records                        Administration
                                                           System.

    1099............................  CH 30.............  Chapter 30--        VBA...............  Veterans Benefits
                                                           Montgomery GI                           Administration
                                                           Bill Active Duty
                                                           Benefits.

    1102............................  CH 31.............  Chapter 31--        VBA...............  Veterans Benefits
                                                           Vocational                              Administration
                                                           Rehabilitation
                                                           and Counsel.

    1973............................  VistA.............  Veterans Health     VHA...............  Veterans Health
                                                           Information                             Administration
                                                           Systems and
                                                           Technology
                                                           Architecture.

    1830............................  PAID..............  VistA--Personnel    VHA...............  VHA Office of the
                                                           and Accounting                          Principal Deputy
                                                           Integrated Data.                        Under Secretary
                                                                                                   for Health

    1126............................  CNH...............  Community Nursing   VHA...............  VHA Office Patient
                                                           Home.                                   Care Services

    1085............................  FEE...............  Central Fee System  VHA...............  VHA Chief Business
                                                                                                   Office

    1909............................  DM2...............  Debt Management     VHA...............  Veterans Health
                                                           System.                                 Administration

    1056............................  BDN...............  Benefits Delivery   VBA...............  Office of the
                                                           Network.                                Deputy Under
                                                                                                   Secretary for
                                                                                                   Disability
                                                                                                   Assistance
    ----------------------------------------------------------------------------------------------------------------

        Question. How does the Veterans Health Administration's IT
    governance process allow for the Veterans Health Administration to
    terminate or ``off ramp'' IT investments that are critically over
    budget, over schedule, or failing to meet performance goals? Similarly,
    how does the Veterans Health Administration's IT governance process
    allow for the Veterans Health Administration to replace or ``on-ramp''
    new solutions after terminating a failing IT investment?
        Answer. Although IT governance is led by the Office of Information
    and Technology (OI&T), VHA recognizes the need for complementary VHA IT
    governance to inform OI&T and to allow for proper investment oversight
    by the customer/consumer. As such, VHA has recently revamped the VHA IT
    decisionmaking process in support of VHA governance. It was recognized
    that a high level of management, structure, and compliance is necessary
    to carry out a successful business and/or IT program. Because better
    management, awareness, and decision-making required a portfolio/
    capability construct that is comprehensive, decisionmaking is now based
    on a comparative review of IT investment alignments against VHA's
    strategy and objectives--such as those endorsed in VHA's Blueprint for
    Excellence.
        Likewise to support this governance approach, VHA established an
    investment review board whose responsibilities include regular program
    reviews with a focus on performance and business outcomes.
    Additionally, the governance process empowers capability management
    boards (CMB), comprised of key VHA leaders and field clinicians, to
    prioritize programs, using business criteria, for IT investment
    funding. These boards also provide a business council to review funded
    IT programs and make sure they are meeting their requirements,
    executing properly, and doing so within the approved schedule. Finally,
    the VHA IT governance process provides the forum for discussion to
    occur with OI&T and VHA for ceasing poorly performing projects and
    replacing them with other ``in the queue'' VHA IT priority needs.
        OIT has implemented the Program Management Accountability System,
    or PMAS, to monitor the progress of projects. Project efforts are
    divided into increments, each of which delivers specified functionality
    to OIT's business partners in 6 months or less. PMAS ensures the
    readiness of increments to be successful through its milestone review
    process and the performance of increments to deliver on time and on
    budget through its risk management process. If a project misses three
    on-time increment deliveries it must submit to a Closure Review
    ensuring that if projects fail, they do ``fail fast,'' reducing the
    drain on IT resources. If a project is closed out, resources then
    become available to reassign. VA OIT prioritizes requirements that do
    not otherwise have funding (``unfunded requirements,'' or UFRs). The
    prioritization is conducted within the context of the IT governance
    process--that is, the prioritization that is developed is approved
    through the IT Leadership Board and the Deputy Secretary for VA.
    Resources that become available are assigned to UFRs in order of their
    prioritization, which will ``on ramp'' new projects. One of the
    requirements for an effort to be considered in the UFR prioritization
    process is that it is ready to execute if funding becomes available.

        Question. What IT projects has the Veterans Health Administration
    decommissioned in the last year? What are the Veterans Health
    Administration's plans to decommission IT projects this year?
        Answer. VA is developing a divestiture process that will be used to
    formally guide divesture decisions and actions moving forward and is
    continuing to strengthen governance in place to be effective. Systems
    recently decommissioned are listed below.
        During fiscal year 2015/2016 the following systems/applications are
    being considered for retirement.

        1. Titus Toolbar
        2. Existing AV system
        3. Region 1 Remedy Help Desk system
        4. Region 3 Remedy Help Desk system
        5. Region 4 Serena Help Desk system
        6. Tuscaloosa Remedy Help Desk system
        7. NCA Remedy
        8. FSC System Center Service Manager

                                                          Table
    ----------------------------------------------------------------------------------------------------------------
                                                                                    Parent
                 VASI Id                System Acronym        System Name        Organization        Organization
    ----------------------------------------------------------------------------------------------------------------
    1141............................  CMIS..............  Construction        OALC..............  Office of
                                                           Management                              Construction and
                                                           Information                             Facilities
                                                           System.                                 Management

    1959............................  VBRS..............  Veterans Benefits   VBA...............  Veterans Benefits
                                                           Reference System.                       Administration

    1362............................  INP...............  International       VBA...............  Veterans Benefits
                                                           Payments.                               Administration

    1708............................  VCC...............  Veteran Call        VBA...............  Veterans Benefits
                                                           Center.                                 Administration

    1389............................  LACAS.............  License and         VBA...............  Veterans Benefits
                                                           Certification                           Administration
                                                           Approval System.

      ..............................  SMART.............  SMART               OI&T..............  Office of
                                                           Certification and                       Information and
                                                           Accreditation                           Technology
                                                           Tool.

    1104............................  FET...............  Chapter 33--Front   VBA...............  Veterans Benefits
                                                           End Tool.                               Administration

    1130............................  CAPRI.............  Compensation and    VHA...............  Veterans Health
                                                           Pension Record                          Administration
                                                           Interchange.

    1605............................  SCIDO.............  Spinal Cord Injury  VHA...............  Veterans Health
                                                           and Discorders                          Administration
                                                           Outcomes.
    ----------------------------------------------------------------------------------------------------------------

        Question. The newly-enacted Federal Information Technology and
    Acquisition Reform Act of 2014 (FITARA, Public Law 113-291) directs
    CIOs to conduct annual reviews of their IT portfolio. Please describe
    the Veterans Health Administration's efforts to identify and reduce
    wasteful, low-value or duplicative information technology (IT)
    investments as part of these portfolio reviews.
        Answer. Each year, OIT conducts a zero-based build of its IT
    portfolio as it builds the IT budget request. By its nature, by
    building from the ``bottom up'' each year, all items in the IT
    portfolio are assessed regarding their support of OITs requirement to
    provide VA business elements with the technological tools needed for
    their success. Demand for IT solutions exceeds the resources available,
    so OIT's budget build necessarily (a) focuses on the highest priority
    items first, and (b) works to maximize the efficiency of all elements
    in the IT portfolio. Put another way, maximizing the efficiency means
    working to eliminate redundant, wasteful, and low value efforts so that
    the IT portfolio, as a whole, provides the best utilization of scarce
    resources. This ``zero-based'' build is reviewed through the IT
    governance process where all of OIT's VA stakeholders (VHA, VBA, NCA,
    and staff offices) are represented and can weigh in on the budget
    build. The VA CIO chairs the IT Leadership Board that runs the IT
    governance process that reviews the IT budget. As VA is unique in the
    Federal Government in having a separate appropriation that funds all of
    OIT, the IT governance process allows the CIO to review the entire IT
    portfolio annually as a result of building the IT budget request. Once
    an appropriation is received, review of execution occurs. While this
    isn't an annual process but rather an ongoing one, it nonetheless also
    works to identify development efforts that are not performing as
    intended. Those resources are recaptured and then applied to other
    projects within the constraints of enacted appropriation law.

        Question. In 2011, the Office of Management and Budget (OMB) issued
    a ``Cloud First'' policy that required agency Chief Information
    Officers to implement a cloud-based service whenever there was a
    secure, reliable, and cost-effective option. How many of the Veterans
    Health Administration's IT investments are cloud-based services
    (Infrastructure as a Service, Platform as a Service, Software as a
    Service, etc.)? What percentage of the Veterans Health Administration's
    overall IT investments are cloud-based services? How has this changed
    since 2011?
        Answer. Every hosting decision considered cloud computing as an
    option for deployment. It is estimated that 15 of over 200 Veterans
    Health Administration's IT investments involve some proportion of
    cloud-based services (Infrastructure as a Service, Platform as a
    Service, Software as a Service, etc.). About 5 percent of the Veterans
    Health Administration's overall IT investments involve some cloud-based
    services. The percentage has roughly tripled since 2011.

        Question. VA CIO Stephen Warren testified to Congress in November
    2014 that the VA was directing an additional $60 million to its
    information security efforts in fiscal year 2015. How is the Veterans
    Health Administration leveraging its internal information security
    resources to protect against breaches or leaks that could disclose
    sensitive and personally identifiable information? Does the Veterans
    Health Administration currently use digital rights management or other
    content-concentric tools to protect such information?
        Answer. VA's Continuous Readiness in Information Security Program
    (CRISP) is the Department's guiding initiative designed to foster a
    security-conscious culture and establishing a stronger information
    security posture across the enterprise. As has been recognized by the
    Office of Inspector General (OIG), VA has used CRISP to make
    significant progress towards addressing findings of material weakness
    in recent years. VA recently established a dedicated CRISP Program
    Management Office, which allows VA to allocate full-time staff members
    to maintaining an effective risk-based security program and preparing
    for annual OIG audits.
        CRISP represents a cultural change that is necessary for VA to
    achieve adequate protection of veteran and other sensitive information.
    Thus, its success is largely determined by the entire community of VA
    employees, business partners, and contractors adhering to security
    policies to preserve the trusted relationship that VA has with
    veterans. CRISP program success includes, among others, the following:

      --Annual mandatory information security training is VA-wide for all
            employees and contractors and is strictly monitored and
            enforced.
      --VA is performing onsite information security compliance validation
            across the enterprise.
      --VA has initiated a project to identify unauthorized software on the
            VA network and remove, update, or replace the software as
            appropriate.
      --Scanning of all known devices for outdated software patches,
            removal of software strictly prohibited by VA is being enforced
            with additional resources that were allocated to the CRISP
            Program.

        In addition, VA utilizes a ``defense in depth'' approach to
    protecting its information from internal and external risks. This
    approach includes administrative, technical, and physical security
    controls, which are implemented throughout VA systems. If one control
    fails, others are designed to provide protection so that VA data is not
    placed at risk. VA has also implemented a continuous monitoring
    capability that allows VA to automatically monitor its systems for
    threats and vulnerabilities.
        VA has implemented rights management software (RMS) to protect
    veteran information. VA also provides users with the capability to use
    their PIV cards to sign and encrypt emails and documents.
        VA does not use digital rights management or other content-
    concentric tools. However, VA has implemented rights management
    software (RMS) which allows information and documents to be protected
    and controlled, including an inability to be forwarded, printed, or
    saved. VA also provides users with the capability to digitally control
    content through the use of PIV cards to sign and encrypt emails and
    documents.

                              SUBCOMMITTEE RECESS

        Senator Kirk. I call it adjourned.
        [Whereupon, at 4:20 p.m., Tuesday, April 21, the
    subcommittee was recessed, to reconvene at a time subject to
    the call of the Chair.]