[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.]