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

         MILITARY CONSTRUCTION, VETERANS AFFAIRS, AND RELATED AGENCIES
                      APPROPRIATIONS FOR FISCAL YEAR 2017

                                  ----------

                            THURSDAY, MARCH 10, 2016

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 11:05 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Mark Kirk (chairman) presiding.
        Present: Senators Kirk, Murkowski, Hoeven, Collins,
    Boozman, Capito, Cassidy, Tester, Udall, Schatz, and Baldwin.

                         DEPARTMENT OF VETERANS AFFAIRS

    STATEMENT OF HON. ROBERT A. MCDONALD, SECRETARY
    ACCOMPANIED BY:
            HON. DAVID J. SHULKIN, M.D., UNDER SECRETARY FOR HEALTH,
                VETERANS HEALTH ADMINISTRATION
            DANNY G.I. PUMMILL, ACTING UNDER SECRETARY FOR BENEFITS,
                VETERANS BENEFITS ADMINISTRATION

                     OPENING STATEMENT OF SENATOR MARK KIRK

        Senator Kirk. The subcommittee will come to order. Good
    morning. This is the subcommittee's second hearing on the
    fiscal year 2017 and fiscal year 2018 advance budget request.
        The President has requested over $78 billion in
    discretionary funding for the Department of Veterans Affairs
    (VA), an increase of 4.9 percent. This year, there was a
    request for $104 billion in advance mandatory benefits funding.
        This subcommittee of this Congress has given you everything
    you wanted, and more. The answer to every VA problem is not
    ``give us more money, give us more flexibility.'' We need to
    fix the VA's corrupt culture and all too often poor
    performance.
        We also need to talk about accountability and veterans
    first and not bureaucrats.
        Mr. Secretary, I understand that you will be visiting
    Illinois next week while in Chicago. I hope you will notice the
    difference in the culture at a facility that combines the
    military's healthcare standards with veterans' care.
        I want to recognize my friend, the Senator from the Big
    Sandy metroplex in Montana, Mr. Tester.

                        STATEMENT OF SENATOR JON TESTER

        Senator Tester. Thank you, Chairman Kirk. Thank you for
    holding this hearing on the VA's budget.
        Secretary McDonald, it is great to have you here today,
    with your team. Thank you for your service to the veterans of
    this country.
        Last week, we heard testimony from Dr. Shulkin and Mr.
    Pummill about VA and the Veterans Benefits Administration's
    (VBA) budget request. I look forward to continuing that
    discussion today.
        As you know, one of my top concerns continues to be the
    long wait times for veterans trying to get the healthcare
    through the Choice program. You and I, Mr. Secretary, have had
    numerous discussions about the failures of the Choice program
    in my home State. Some of the fault lies with the VA, some lies
    with Congress. As I said last week, a lot of lies with the
    third-party administrator in Montana. What they have done and
    what they are doing is completely unacceptable.
        I know time is tight today, so I am not going to rehash the
    litany of complaints that I receive on a daily basis from
    frustrated veterans. I know these issues are not isolated to
    Montana. They are in other States, including Senator Collins'
    State of Maine.
        I do not have to tell you the frustrations are growing up
    here. I know you hear them. I know you share them. The bottom
    line is the Choice program is broken. We need to fix it, and we
    need to fix it as soon as possible.
        That is why I introduced legislation last week that will
    fix the issues we are having with Choice. Moving forward, it
    will put in place a less complex and confusing framework for
    Care in the Community. That will reduce administrative burdens
    both for community providers and for the VA, and connect
    veterans to the care they need in a more timely manner, and
    more streamlined.
        Earlier this week, I met with Chairman Isakson, who is
    chairman of the Senate Veterans' Affairs Committee on this
    issue. We share the same goals and we share the same concerns.
    We are now committed to finding a bipartisan solution to
    address these problems in a comprehensive manner.
        Mr. Secretary, I hope we can enlist your effort in that
    regard. When all is said and done, we have to get it right. Our
    veterans deserve nothing less.
        With regard to your budget request, as I see it, there are
    some very good things in it, but there are also some things
    that need further explanation.
        Failure to account for sustained costs of doctors and
    nurses that we have hired with Choice Act funds is one. The
    overall reduction in capital budget is yet another.
        I look forward to addressing these issues and other issues
    with you today and in the weeks ahead. Again, I want to thank
    you for your service. Thank you for being here today.
        Thank you, Mr. Chairman.
        Senator Kirk. Thank you.
        I want to welcome our witnesses. Secretary McDonald is a
    graduate of West Point and the Secretary of Veterans Affairs.
    He is accompanied by Dr. David Shulkin, the Under Secretary for
    Health, and Mr. Danny Pummill, the Acting Under Secretary for
    Benefits. I welcome you both back to the subcommittee. Welcome,
    gentlemen.

                  SUMMARY STATEMENT OF HON. ROBERT A. MCDONALD

        Secretary McDonald. Chairman Kirk, Ranking Member Tester,
    members of the subcommittee, thanks for the opportunity to
    present the President's 2017 budget and 2018 advance
    appropriations request for the Department of Veterans Affairs.
    I have submitted a written statement for the record.
        The President's 2017 budget proposal is another tangible
    sign of his devotion to veterans and their families. It
    proposes $182.3 billion for the department in fiscal year 2017,
    which includes $78.7 billion in discretionary funding, a 4.9-
    percent increase above the 2016 enacted level, largely for
    healthcare. It includes $65 billion for medical care, a 6.3-
    percent increase of $3.9 billion over 2016's enacted level. It
    includes $12.2 billion for Care in the Community and the new
    Medical Community Care budget account to increase transparency
    on VA spending for non-VA care, as required in the VA budget
    and Choice Improvement Act. It provides $66.4 billion in
    advance appropriations for VA medical care programs in 2018, a
    2.1 percent increase above the 2017 request. It provides $7.8
    billion for mental health. It funds veteran contact centers,
    and it funds veteran crisis line modernization.
        This proposal provides $1.5 billion for effective hepatitis
    C treatments for at least 35,000 veterans, but perhaps
    significantly more depending upon the pricing of the drugs.
        It provides $1.2 billion for telehealth access, $725
    million for veteran caregivers, and $515 million for health
    programs for women veterans.
        The proposal includes $103.6 billion in mandatory funding
    for veteran benefit programs in 2017 and $103.9 billion in
    advance appropriations for our three major mandatory Veteran
    Benefits Accounts.
        It requests $2.8 billion for the Veterans Benefits
    Administration, including support for an additional 300 staff
    to reduce the nonrating claim inventory and provide veterans
    with more timely decisions on nonrating claims.
        And it includes $156.1 million for the Board of Veterans
    Appeals, an increase of 42 percent over the 2016 level. This is
    a down payment on a long-term, sustainable plan to eliminate
    the appeals backlog.
        The budget supports the VA's four agency priority goals. It
    supports our five MyVA transformational objectives to improve
    the veteran experience, to improve the employee experience, to
    improve internal support services, to establish a culture of
    continuous improvement, and to expand strategic partnerships.
        It provides $2.6 million for the MyVA program office to
    help integrate MyVA initiatives across the enterprise, and
    $72.6 million for the Veterans Experience Office, so we can
    continue establishing high customer service standards.
        And it supports our 12 breakthrough priorities for 2016 and
    fiscal year 2017. These are critical investments, if we are
    serious about transforming VA into the high-performing
    organization veterans deserve and taxpayers expect.
        Over 3 decades in the private sector, I learned first-hand
    what it takes to be a high-performance organization, and that
    goal is within our reach. We already have a clear purpose and
    strong values and strong strategies. We have a growing team of
    talented business and healthcare professionals making
    innovative changes. Ten of our top 16 executives are new since
    I became Secretary, and we are building responsive systems and
    processes shaped by design to meet veterans' needs.
        For veterans, that means they have 24/7 access to VA
    systems and know where to get answers. Veterans calling or
    visiting primary care facilities at a medical center have
    clinical needs addressed the same day. Veterans engaged in
    mental healthcare needing urgent attention speak to a provider
    the same day. And veterans calling for a new mental health
    appointment receive suicide risk assessments and immediate
    care, if needed.
        For employees serving veterans, it means training on
    advanced business techniques that drive responsive and
    innovative change. It means clear performance expectations,
    continuous feedback, and performance management systems that
    encourage continuous improvement and excellence.
        It means that executive performance ratings and bonuses
    reflect actual performance and relevant inputs like veteran
    outcomes, employee surveys, and 360-degree feedback. And it
    means modern, automated systems in place of antiquated and
    costly paper processes.
        We are advancing along all of these lines and many others.
    Growing a high-performing culture is what our Leaders
    Developing Leaders (LDL) program is all about. Leaders
    Developing Leaders is a continuous, enterprise-wide process to
    instill lasting change.
        We launched LDL last November with 450 senior field
    leaders, and we have trained more than 5,000 leaders so far. We
    met again last week to build on growing momentum and share best
    practices that we will leverage across the VA. By year's end,
    we will have over 12,000 senior leaders empowering more and
    more teams to dramatically improve care and service delivery to
    veterans.
        Private sector experts are teaching cutting-edge business
    skills like Lean Six Sigma and Human Centered Design. Human
    Centered Design and Lean are helping leaders reshape the
    compensation and pension exam that veterans find burdensome.
        We are planning to automate performance management to
    streamline the process and improve rating accuracy. And we are
    finding new ways to provide higher quality care and benefits
    more efficiently.
        Our pharmacy benefits management program avoided $4.2
    billion in unnecessary drug expenditures last year. We have
    saved over $500 million in travel spending since 2013,
    exceeding goals of the President's campaign to cut waste.
        We have reduced employee award spending $150 million, and
    Senior Executive Service (SES) bonuses 64 percent between 2011
    and 2015 by rigorously linking awards to performance.
        Since 2011, we have saved $16.6 million using more
    efficient training and meeting methods. We have already saved
    $10 million a year under the MyVA five district structure that
    we announced in January 2015.
        We saved approximately $5.5 million from 2011 to 2015 by
    strengthening controls over permanent change of station moves.
    And we will save millions each year in paper storage since we
    implemented electronic claims processing.
        So we are committed to doing everything we can for veterans
    with everything we are given.
        But more than 100 legislative proposals for meaningful
    change require congressional action. Over 40 are new this year,
    some absolutely critical to maintaining our ability to purchase
    non-VA care.
        To best serve veterans, we need your help streamlining VA's
    Care in the Community systems and programs. We have to
    modernize and clarify VA's purchase care authorities to
    preserve the veterans' access to timely community care
    everywhere in the country.
        Above all, this needs to be done in this Congress. I have
    consistently identified it as a top legislative priority. We
    provided detailed legislation addressing this challenge over 9
    months ago. Members of this Committee and others in Congress
    have introduced legislation to address these issues. Now we
    look forward to working with you to ensure we get this right.
        The budget proposes a simplified, streamlined, and fair
    appeals process, so that in 5 years, veterans could have
    appeals resolved within 1 year of filing. The statutory appeals
    process is archaic and unresponsive, not serving veterans well.
    Last year, the board was still adjudicating an appeal that
    originated 25 years ago and had been decided more than 27
    times.
        Legislating a simplified process can save over $139 million
    annually beginning in 2022.
        We compete with the private sector for talent, especially
    in healthcare, so we are proposing flexibility on the 80-hour
    pay period maximum for certain medical professionals and
    critical compensation reforms for network and hospital
    directors.
        Likewise, we are looking at how we can treat our career
    executives more like their private sector counterparts, and we
    are working with our stakeholders to shape a plan that best
    serves veterans.
        The budget proposes appropriations language for general
    transfer authority that allows me some measured spending
    flexibility to respond to veterans' emerging needs.
        We need congressional authorization for 18 leases submitted
    in the VA's 2015 fiscal year and 2016 budget request. We need
    authorization for eight major construction projects included in
    VA's 2016 fiscal year request. And we need support for the six
    additional replacement major medical facility leases in the
    2017 budget. And passing special legislation for VA's West Los
    Angeles campus will get positive results for veterans there who
    are most in need.
        This Congress with today's VA leadership team can make
    these changes and more. And it is all for veterans. Then we can
    look back on this year as the year that we turned the corner.
        I appreciate this opportunity and the support you have
    shown veterans, the department, and the MyVA transformation,
    and I look forward to answering your questions.
        Thank you, Mr. Chairman.
        [The statement follows:]
                 Prepared Statement of Hon. Robert A. McDonald
        Good morning, Chairman Kirk, Ranking Member Tester, and
    distinguished members of the Senate Appropriations Subcommittee on
    Military Construction and Veterans Affairs. Thank you for the
    opportunity to present the President's 2017 budget and 2018 advance
    appropriations (AA) requests for the Department of Veterans Affairs
    (VA). This budget continues the President's faithful support of
    veterans and their families and survivors, and it sustains VA's
    historic transformation. It will provide the funding needed to enhance
    services to veterans in the short term, while strengthening the
    transformation of VA that will better serve veterans in the future.
                            a vision for the future
        VA's vision for the future is to be the No. 1 customer-service
    agency in the Federal Government. The American Customer Satisfaction
    Index already rates our National Cemetery Administration No. 1 with
    respect to customer service. In addition, for the sixth year in a row,
    VA's Consolidated Mail Outpatient Pharmacy received J.D. Power's
    highest customer satisfaction score among the Nation's public and
    private mail-order pharmacies. These are compelling examples of
    excellence. We aim to make that so for all of VA.
        We are transforming the entire Department, not just making
    incremental changes to parts of it. We began in July 2014 by
    immediately reinforcing the importance of our inspiring mission--caring
    for those ``who shall have borne the battle,'' their families, and
    their survivors. Then, we re-emphasized our commitment to our
    exceptional I-CARE Values--Integrity, Commitment, Advocacy, Respect,
    and Excellence. To provide timely quality care and benefits for
    veterans, everything we are doing is built, and must be built, on the
    rock-solid foundation of mission and values.
        MyVA is the catalyst making VA a world-class service provider. It
    is a framework for modernizing VA's culture, processes, and
    capabilities so we put the needs, expectations, and interests of
    veterans and their families first, and put veterans in control of how,
    when, and where they wish to be served.
        Listening to others' perspectives and insights has been, and
    remains, instrumental in shaping our transformation. We have taken
    advantage of an unprecedented level of outreach to the field and our
    stakeholders. In my first months as Secretary, I assessed VA and
    recognized that we would need to change fundamental aspects of every
    part of VA in order to rise to excellence. I shared my assessment's
    results with President Obama and received his guidance. I discussed my
    findings with you and other Members of Congress--privately and during
    hearings. And I consulted with literally thousands of veterans, VA
    clinicians, VA employees, and Veteran Service Organizations (VSOs) and
    other stakeholders in dozens of meetings.
        Since my July 29, 2014, confirmation, I have made 277 visits to VA
    field sites in more than 100 cities, including 47 visits to VA Medical
    Centers, 30 visits to homeless veterans program sites, 16 visits to
    Community Based Outpatient Clinics, 15 Regional Offices, and 9
    Cemeteries. I have attended 61 veteran engagements through public and
    private partnerships and 60 stakeholder events to hear firsthand the
    problems and concerns impacting our veterans. To recruit individuals to
    work for VA as medical professionals and in other critical fields, I
    have visited 50 medical schools, universities, and other educational
    institutions. This kind of outreach, partnership, and collaboration
    underpins our department-wide transformation to change VA's culture and
    make the veteran the center of everything we do.
    Progress
        Transforming an organization of VA's size is an enormous
    undertaking. It will not happen overnight. But we are now running the
    Government's second largest Department like a $166 billion Fortune 6
    organization should be run. That is, balancing near term performance
    improvements while rebuilding VA's long-term organizational health.
        Effective change often requires new leadership, and we have made
    broad changes. Of our top 16 executives, 10 are new to their positions
    since I became Secretary. Our team today includes extensive executive
    expertise from the private sector: a former banking industry Chief
    Financial Officer and President of the USO; the former Chief Executive
    Officer of Beth Israel Medical Center in New York City and Morristown
    Medical Center in New Jersey; a former Chief Executive of Jollibee
    Foods and President of McDonald's Europe; a former Chief Information
    Officer of Johnson & Johnson and Dell Inc.; a former partner in
    McKinsey & Company's Transformational Change and Operations
    Transformation Practices; a retired partner in Accenture's Federal
    Services Practice; a former Chief Customer Officer for the City of
    Philadelphia who previously spent 10 years at United Services
    Association of America (USAA), one of the best and foremost customer-
    service organizations in the country; a former entrepreneur and CEO of
    multiple technology companies; and a retired Disney executive who spent
    2010-2011 at Walter Reed National Military Medical Center enhancing the
    patient experience.
        Most members of the executive leadership team are veterans
    themselves. They have served from Vietnam to Iraq and Afghanistan, and
    each is here because he or she demonstrates a personal commitment to
    our mission. These fresh, diverse perspectives, combined with our more
    experienced government and healthcare executives, will continue to
    catalyze innovation and change.
        Thanks to the continuing support of Congress, VSOs, union leaders,
    our dedicated employees, states, and private industry partners, we have
    made tremendous headway over the past 18 months. In 2015, we made
    notable progress building the momentum that will begin delivering
    transformational changes that VA needs.
        Congress has passed key legislation--such as the Veterans Access,
    Choice, and Accountability Act and the Clay Hunt Suicide Prevention for
    American Veterans Act--that gives VA more flexibility to improve our
    culture and ability to execute effectively.
        Consistent with the culture of a High Performance Organization that
    serves veterans and their families, we have turned VA's structural
    pyramid upside down. Veterans and their families are at the top. The
    Office of the Secretary is at the bottom, supporting subordinate
    leaders and the workforce who are serving veterans. This method of
    thinking and operating is a reminder to all employees and stakeholders
    that we are here to support our veterans, not our bosses.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        While reinforcing our I-CARE Values, we are transitioning from a
    rules-based culture that may neglect the human dimension of service to
    a principles-based culture grounded in values, sound judgment, and the
    courage and opportunity ``to choose the harder right instead of the
    easier wrong. . . .''
        We formed a MyVA Advisory Committee (MVAC) to advise us on our
    transformation. The MVAC is comprised of a diverse group of business
    leaders, medical professionals, experienced government executives, and
    veteran advocates. The Chairman is retired Major General Joe Robles,
    former Chairman and CEO of USAA. The Vice Chairman is Dr. J. Michael
    Haynie, Air Force veteran, Vice Chancellor of Syracuse University and
    founder of the Institute for Veteran and Military Families (IVMF). The
    MVAC includes executives with deep customer service and transformation
    expertise from organizations such as Amazon, The Cleveland Clinic,
    McKinsey & Company, Johns Hopkins, Mayo Clinic, as well as a former
    Surgeon General, a former White House doctor for three US Presidents, a
    university president who was a Rhodes Scholar from the Air Force
    Academy who currently serves as a reserve Air Force Lieutenant Colonel,
    and advocates for both the traditional VSOs and post-9/11 veterans'
    organizations.
        Private sector leadership experts are bringing cutting-edge
    business skills and developing VA teams in new ways. We are training
    critical pockets of our workforce on advanced techniques like Lean and
    Human Centered Design. For example, working with the University of
    Michigan, we have already trained more than 5,000 senior leaders across
    the Nation in our ``Leaders Developing Leaders.'' The Veterans Benefits
    Administration (VBA), Veterans Health Administration (VHA), and our
    Veterans Experience team collaborated using Human Centered Design and
    Lean techniques to redesign the Compensation and Pension Examination
    (C&P Exam) process because we received consistent feedback that the
    process--often, a veteran's first impression of the VA when separating
    from service--can be a confusing and uncomfortable experience.
        Across VA, we are encouraging different perspectives and listening
    to all of our key stakeholders, even those who are critical of VA. To
    benchmark and capture ideas and best practices along our transformation
    journey, we have been working collaboratively with world-class
    institutions like Procter & Gamble, USAA, Cleveland Clinic, Wegmans,
    Starbucks, Disney, Marriott and Ritz-Carlton, NASA, Kaiser Permanente,
    Hospital Corporation of America, Virginia Mason, DOD, and GSA, among
    others.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        VA named the Department's first Chief Veteran Experience Officer
    and began staffing the office that will work with the field to
    establish customer service standards, spread best practices, and train
    our employees on advanced business skills.
        Rather than asking veterans to navigate our complicated internal
    structure, we are redesigning functions and processes to fit veteran
    needs in the spirit of General Omar Bradley's 1947 proposition that
    ``We are dealing with veterans, not procedures; with their problems,
    not ours.''
        We are realigning VA to facilitate internal coordination and
    collaboration among business lines--from nine disjointed, disparate
    organizational boundaries and organizational structures to a single
    framework. That means down-sizing from 21 service networks to 18 that
    are aligned in five districts and defined by State boundaries, except
    in California. This realignment means opportunities for local level
    integration, and it promotes consistently effective customer service.
    Veterans from Florida to California, Puerto Rico to Maine, Alaska and
    Guam, and all parts in between, will see one VA.
        We have developed a multi-year plan for creating a world-class
    Information Technology organization, and on November 11, Veterans Day,
    we launched the Vets.gov initial capability. Developed with support
    from the U.S. Digital Services Team and informed by extensive feedback
    from veterans, Vets.gov is a modern, mobile-first, cloud-based website
    that will replace numerous other websites and website logins with a
    single, easy to navigate location. The website puts veteran needs and
    wishes first, and we will continue to add the capability that's
    required to improve its accessibility and usefulness. As Vets.gov
    evolves, it will simplify the veteran experience by re-using and making
    consistent veteran information, including mailing address and phone
    number, across the agency.
        At VA, we know that serving veterans is a collaborative exercise,
    so we will not function in a vacuum. We are operating as part of a
    community of care, forming strategic partnerships with external
    organizations to leverage the goodwill, resources, and expertise of
    valuable partners to better serve our Nation's veterans and help
    address a wide variety of veteran needs, including employment,
    homelessness, wellness, and mental health. Partners include respected
    organizations like the YMCA, the Elks, the PenFed Foundation, LinkedIn,
    Coursera, Google, Walgreens, academic institutions, other Federal
    agencies, and many more. These partnerships reflect our commitment to
    re-thinking how VA does business so we can leverage the strengths of
    others who also care for veterans.
        We have enabled 39 Community Veterans Engagement Boards, a national
    network designed to leverage all community assets, not just VA assets,
    to meet local veteran needs. Sixteen more communities are in
    development right now.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        We have renewed and redefined working relationships with our union
    partners, and union leaders are part of the team, and have had
    significant input into MyVA. We continue to work with them to address
    issues and make sure our employees are involved often and early in
    every major decision.
        We are continuing to develop a robust provider network while we
    streamline business processes and re-imagine how we obtain services
    such as billing, reimbursement credentialing, and information sharing.
        We continue to listen, learn, and grow.
                           va's agency priority goals
        In 2015, we were guided by and made notable progress toward
    reaching our three Agency Priority Goals (APGs)--(1) Improve Veteran
    Access to VA Benefits and Services, (2) End Veteran Homelessness, and
    (3) Eliminate the Disability Claims Backlog. These accomplishments
    toward achieving our APGs demonstrate VA's commitment to using our
    resources effectively to improve care and benefits for veterans.
    Access
        We expanded capacity by focusing on staffing, space, productivity,
    and VA Community Care.
        Since discovering the access challenges in Phoenix, Arizona, we
    have aggressively improved access to care, not just in Phoenix but
    across VA as a whole. For instance, in the first 12 months after
    discovering the Phoenix appointment problem, from June 2014 to June
    2015, we completed 7 million more appointments than during the same
    period the year prior: 2.5 million of those appointments were at VA;
    4.5 million appointments were in the community. Altogether in fiscal
    year 2015, we completed 56.7 million appointments, nearly 2 million
    more than in fiscal year 2014. More than 97 percent (55 million) of
    those 56.7 million appointments were completed within 30 days of the
    clinically indicated or veteran's preferred date, an increase of 1.4
    million over the fiscal year 2014 numbers.
        Veteran access is one of the five critical priorities supporting VA
    healthcare transformation with far-reaching impact across VA that Under
    Secretary for Health, Dr. David J. Shulkin announced in September 2015.
    With the Access Stand Downs, VHA is empowering each facility to focus
    on the needs of its specific population and refocusing people, tools,
    and systems on a journey of continuous improvement towards same-day
    access for primary care and urgent specialty care. The immediate goal
    is that no patients with urgent appointment requests in VA clinics with
    the most critical clinical needs, such as cardiology, urology, and
    mental health, are waiting more than 30 days.
        From November 9, through November 13, 2015, VHA conducted a
    complete review of all veterans waiting for appointments--with a focus
    on those veterans waiting for clinically important and acute services--
    to ensure that the wait was clinically appropriate as determined by the
    veteran's treatment team. This process culminated with the VHA's first-
    ever Access Stand Down on November 14. The Stand Down was a nationwide
    effort to ensure veterans get the right care at the right time.
        In the first Access Stand Down, VHA reviewed nearly 55,800 of the
    more than 56,000 urgent consults that remained open more than 30 days
    (as of November 6, 2015), a herculean effort. Of those 55,800 urgent
    open consults reviewed, 82 percent (45,849) were scheduled or closed by
    the end of that first Stand Down.
        Building on the November 14th Access Stand Down momentum and
    success, VHA continued to maximize accessibility to outpatient services
    with the February 27th, 2016 Access Stand Down. The February Stand Down
    provided an opportunity to make another significant leap in
    dramatically enhancing veterans' access to care. Clinical operations
    will meet customer demand through resource-neutral, continuous
    improvement at the facility-level and scaling-up excellence across the
    enterprise.
        VetLink data is another way we are listening to veterans. Since
    September 2015, VHA has analyzed preliminary data from VetLink, our
    kiosk-based software that allows us to collect real-time customer
    satisfaction information. In all three separate VetLink surveys to
    date--related to nearly half-a-million appointments--veterans told us
    that about 90 percent of the time, they are either ``completely
    satisfied'' or ``satisfied'' with getting the appointment when they
    wanted it. However, about 3 percent of veterans who participated in the
    survey were either ``dissatisfied'' or ``completely dissatisfied,'' so
    we have more work to do.
        Staffing. We increased net VHA staffing. In fiscal year 2015, VHA
    hired 41,113 employees, for a net increase of 13,940 healthcare staff,
    a 4.7 percent increase overall. That increase included 1,337 physicians
    and 3,612 nurses, and we filled several critical leadership positions,
    including the Under Secretary of Health.
        Space. We activated an additional 2.2 million square feet of
    clinical space in fiscal year 2015, adding to the more than 1.7 million
    square feet of clinical space activated in fiscal year 2014.
        Productivity. We increased physician work Relative Value Units
    (RVUs) by 9 percent from fiscal year 2014 to fiscal year 2015. VA
    completed more than 1.4 million extended hour completed encounters in
    primary care, mental health and specialty care in fiscal year 2014 and
    more than 1.5 million in fiscal year 2015, an increase of 5.7 percent
    in extended hour encounters.
                Care in the Community
        In 2015, VA obligated $10.5 billion for Veterans Care in the
    Community, including resources provided through the Veterans Choice
    Act--an increase of $2.3 billion (28 percent) over the 2014 level--
    which resulted in nearly 2.4 million authorizations for veterans to
    receive Care in the Community from December 3, 2014 through December 2,
    2015. Programmatically, this included care in the community for
    veterans' dialysis, state home programs, community nursing care,
    veterans home programs, emergency care, private medical facilities
    care, and care delivered at Indian health clinics. It also includes
    care under VA's CHAMPVA program for certain dependents entitled to that
    care.
    Homelessness
        Veteran homelessness has continued to decline, thanks in large part
    to unprecedented partnerships and vital networks of collaborative
    relationships across the Federal Government, across State and local
    government, and with both non-profit and for-profit organizations.
    Ending and preventing veteran homelessness is now becoming a reality in
    many communities, including: the Commonwealth of Virginia; the State of
    Connecticut; New Orleans, Louisiana; Houston, Texas; Las Vegas, Nevada;
    Philadelphia, Pennsylvania; Syracuse, New York; Winston-Salem, North
    Carolina; and Las Cruces, New Mexico. In collaboration with our 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.
        In fiscal year 2015 alone, VA provided services to more than
    365,000 homeless or at-risk veterans in VHA's homeless programs. Nearly
    65,000 veterans obtained permanent housing through VHA Homeless
    Programs interventions, and more than 36,000 veterans and their family
    members, including 6,555 children, were prevented from becoming
    homeless.
        Overall veteran homelessness dropped by 36 percent between 2010 and
    2015, based on data collected during the annual Point-in-Time (PIT)
    Count conducted on a single night in January 2015. We saw a nearly 50
    percent drop in unsheltered veteran homelessness. Since 2010, more than
    360,000 veterans and their family members have been permanently housed,
    rapidly rehoused, or prevented from falling into homelessness.
    Disability Claims Backlog
        VA transitioned disability compensation claims processing from a
    paper-intensive process to a fully electronic processing system; as a
    result, 5,000 tons of paper per year were eliminated.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        In fiscal year 2015, VA decided a record-breaking 1.4 million
    disability compensation and pension (rating) claims for veterans and
    their survivors--the highest in VA history for a single year. As of
    December 31, 2015, VA had driven down the disability claims backlog to
    75,480, from a peak of over 611,000 in March 2013.
    2016-2017 VA's Agency Priority Goals
        In a collaborative, analytical process, VA has established our four
    new Agency Priority Goals (APGs). In fiscal years 2016 and 2017, our
    four APGs build upon and preserve progress we made in 2015. The new
    APGs will help accelerate the MyVA transformation and advance our
    framework for allocating resources to improve veteran outcomes. Our new
    APGs are to (1) Improve Veterans Experience with VA, (2) Improve VA
    Employee Experience, (3) Improve Access to Health Care as Experienced
    by the veteran, and (4) Improve Dependency Claims Processing. While no
    longer APGs, VA will continue to build upon the progress it has already
    made related to increasing access to care and services, ending
    Veterans' Homelessness and eliminating the compensation rating claims
    backlog.
                        fiscal year 2017 budget request
        Our 2017 budget requests the necessary resources to allow us to
    serve the growing number of veterans who selflessly served our Nation.
        The 2017 budget requests $182.3 billion for VA--$78.7 billion in
    discretionary funding (including medical care collections) and $103.6
    billion in mandatory funding for veterans benefit programs. The
    discretionary request reflects an increase of $3.6 billion (4.9
    percent) over the 2016 enacted level. The budget also requests 2018
    advance appropriations (AAs) of $66.4 billion for Medical Care and
    $103.9 billion for three mandatory accounts that support veterans
    benefit payments (i.e., Compensation and Pensions, Readjustment
    Benefits, and Insurance and Indemnities).
        We value the support that Congress has demonstrated in providing
    the resources needed to honor our Nation's veterans. We are seeking
    your support for legislative proposals contained in the 2017 budget--
    including many already awaiting congressional action--to enhance our
    ability to provide veterans the benefits and services they have earned
    through their service. The budget also proposes appropriations language
    to provide a new General Transfer Authority that would allow VA to move
    discretionary funds across line items. Flexible budget authority would
    give VA greater ability to avoid artificial restrictions that impede
    our delivery of care and benefits to veterans.
                     rising demand for va care and benefits
        Veterans are demanding more services from VA than ever before. As
    VA becomes more productive, the demand for benefits and services from
    veterans of all eras continues to increase, and veterans' demand for
    benefits has exceeded VA's capacity to meet it.
        In 2014, when the Phoenix access difficulties came to light, VA had
    300,000 appointments that could not be completed within 30 days of the
    date the veteran needed or wanted to be seen. To meet that demand, VA
    rallied to add capacity to complete 300,000 more appointments each
    month, or about 3.5 million additional appointments annually.
        Despite these extraordinary measures to increase capacity, VA was
    unable to absorb veterans' increasing demand for healthcare. The number
    of veterans waiting for appointments more than 30 days rose by about 50
    percent, to roughly 450,000 between 2014 and 2015, so we are
    aggressively working on innovative ways to address that challenge, and
    VHA's new Access Stand Downs are central to VHA's healthcare
    transformation efforts and addressing that challenge.
        The trend of a growing demand for VA healthcare is fueled by more
    than a decade of war, Agent Orange-related disability claims, an
    unlimited claim appeal process, demographic shifts, increased medical
    issues claimed, and other factors. Additionally, 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. And, VA now serves a population
    that is older, has more chronic conditions, and is less able to afford
    care in the private sector. Workload will continue to increase as the
    military downsizes and veterans regain trust in VA.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        In 2017, the number of veterans receiving medical care at VA will
    be over 6 million. VA expects to provide more than 115 million
    outpatient visits in 2017, an increase of 8.4 million visits over 2016,
    through both VA and Care in the Community.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Compared to fiscal year 2009, the number of patients is projected
    to increase by 22 percent by fiscal year 2017. And, as veterans see the
    results of VA's transformation, we are confident that the number of
    veterans utilizing VA services will continue to rise. Currently, 11
    million of the 22 million veterans in this country are registered,
    enrolled, or use at least one VA benefit or service.
        Veterans' healthcare and benefit requirements continue to increase
    decades after conflicts end, and this fact is a fundamental, long-term
    challenge for VA. Forty years after the Vietnam war ended, the number
    of Vietnam era veterans receiving disability compensation has not yet
    peaked. VA anticipates a similar trend for Gulf war era veterans, only
    26 percent of whom have been awarded disability compensation.
        Today, there are an estimated 22 million veterans. The number of
    veterans is projected to decline to around 15 million by 2040. However,
    while the absolute number may decline, an aging veteran population
    requires greater care, services, and benefits. In 2017, 46 percent (or
    9.8 million) of the 22 million veteran population will be 65 years old
    or older, a dramatic increase since 1975, when only 7.5 percent (or 2.2
    million) of the veteran population was 65 years old or older.
        While the percent of the veteran population receiving compensation
    was nearly constant at 8.5 percent for more than 40 years, over the
    past 15 years there has been a striking increase to 20 percent. The
    total number of service-connected disabilities for veterans receiving
    compensation grew from 11.8 million in 2009 to 19.7 million in 2015, an
    increase of more than 67 percent in just 6 years. This dramatic growth,
    combined with estimates based on historic trends, predicts an even
    greater increase in claims for more benefits as veterans age and
    disabilities become more acute.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The increase in veterans receiving compensation is accompanied by a
    significant increase in the average degree of disability granted to
    veterans for disability compensation. For 45 years, from 1950 to 1995,
    the average degree of disability held steady at 30 percent. But, since
    2000, the average degree of disability has risen to 49 percent. VBA's
    mandatory request for 2017 is $103.6 billion, twice the amount spent in
    fiscal year 2009.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        As VA continues to improve access and quality of care, more
    veterans will come to VA for more of their care. Veterans today often
    choose VA for care either because of personal preference or because of
    VA's economic edge. Some 78 percent of enrolled veterans at VA have
    other choices like Medicare, Medicaid, Tricare, or private insurance.
    Out-of-pocket cost for veterans at VA is often lower, and cost
    considerations are a key factor in veterans' demand for VA healthcare.
    In 2014, veteran enrollees received only 34 percent of their total
    healthcare through VA, accounting for about $53 billion in 2014 costs.
    Just a 1 percent increase in veteran reliance on VA healthcare will
    increase costs by $1.4 billion.
                   productivity improvements and stewardship
        The MyVA transformation will ensure VA is a sound steward of the
    taxpayer dollar. We are instituting operational efficiencies, cost
    savings, productivity improvements, and service innovations to support
    this and future budget requests. We are assessing all aspects of VA
    operations using a business lens and pursuing changes so VA will
    deliver care and services more efficiently and effectively at the
    highest value to veterans and taxpayers. For instance, few realize that
    when it comes to the general operating expense of distributing over a
    hundred-billion dollars in benefits to over 5.3 million veterans and
    survivors, VBA spends only about 3 cents on the dollar. By any measure,
    that's an excellent return on investment. Our Reports, Approvals,
    Meetings, Measurements, and Policies (RAMMPs) process identifies
    practices to streamline or, in some cases, eliminate entirely. To free
    capacity and empower employees to identify counter-productive or
    wasteful activities that management can eliminate, VA leaders at all
    levels of the organization are using RAMMP to address opportunities for
    improvement that employees have identified.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        To boost efficiency and employee productivity, VA is quickly moving
    to paperless claims processing from its historically manual, paper-
    intensive process. Modernizing to an electronic claims processing
    system has helped VBA increase claim productivity per claims processor
    by 25 percent since 2011 and medical issue productivity by 82 percent
    per claims processor since 2009. This significant productivity increase
    helped mitigate the effects of the 131 percent increase in workload
    between 2009 and 2015, when the number of medical issues rose from 2.7
    million to 6.4 million. VA's shift to electronic claims processing has
    meant converting paper files to eFolders. Between 2012 and 2015, the
    Veterans Claims Intake Program (VCIP) scanned nearly 6 million claims
    files into veterans' eFolders in the Veterans Benefits Management
    System (VBMS). VBA has removed more than 7,000 tons of claims-related
    papers formerly undermining efficiency, hampering productivity, and
    cluttering workspace.
        In fiscal year 2015, VBA deployed its innovative Centralized Mail
    Initiative to 56 regional offices (ROs) and one pension management
    center (PMC). Centralized Mail reroutes inbound compensation and
    pension claims-related mail directly to Claims and Evidence Intake
    Centers at document conversion services vendor sites, an innovation
    that improves productivity and enabled digital analysis of more than
    four million mail packets. Through Centralized Mail, VBA can more
    efficiently manage the claims workload, and prioritize and distribute
    claims electronically across the entire RO network, maximizing
    resources and improving processing timeliness.
        To strengthen financial management and stewardship, in fiscal year
    2015 VA launched its multi-year effort to replace VA's antiquated, 30-
    year-old core Financial Management System (FMS) with a 21st century
    system that will vastly improve VA financial management accuracy and
    transparency. The modernization effort requires robust enterprise-wide
    support across the Department. In fiscal year 2015, VA committed to
    using a shared service solution and engaged the Department of
    Treasury's Office of Financial Innovation and Transformation (FIT) to
    pursue a Federal Shared Service Provider that leverages existing,
    successful investments and infrastructure across the government and
    meets our financial management system needs while supporting VA's
    mission of serving veterans. VA also stood up a Program Management
    Office, initially staffed with 5 FTE from existing resources to lead
    and manage the effort, and identified an OIT Project Manager. VA has
    worked to compile lessons-learned from other agencies engaged in this
    effort and from VA's previous attempts to modernize the FMS, to ensure
    the effort is successful. Tasks ahead include strategies, roadmaps, and
    project plans, business process re-engineering, and engaging in
    significant change management activities.
        Recent challenges managing non-VA care program finances have
    demonstrated the great risks and immense burden of the FMS legacy
    system. FMS failure would severely impede the Department's ability to
    execute its budget, pay vendors and veterans, and produce accurate
    financial statements.
                        closing unsustainable facilities
        It is well-past time to close VA's old, substandard, and
    underutilized facilities. VA's 2016 budget testimony last year
    explained that VA cannot be a sound steward of taxpayer resources with
    the asset portfolio it carries, and each year of delay makes the
    situation more costly and untenable. No sound business would carry such
    a portfolio, and veterans and taxpayers deserve better.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        VA currently has 370 buildings that are fully vacant or less than
    50 percent occupied, which are in excess to our needs. These vacant
    buildings account for over 5.2 million square feet of unneeded space.
    In addition, we have 770 buildings that are underutilized, accounting
    for more than 6.3 million square feet that are candidates to be
    consolidated to improve utilization and lower costs. This means we have
    to maintain over 1,100 buildings and 11.5 million square feet of space
    that is unneeded or underutilized--taking funding from needed veteran
    services. We estimate that it costs VA $26 million annually to maintain
    and operate these vacant and underutilized buildings. For example, when
    attempting to demolish the vacant storage facility in Bedford,
    Massachusetts, VA encountered environmental issues that prevented the
    demolition, forcing VA to either pay costly remediation costs to
    demolish a building we no longer need or maintain facilities such as
    this across the system.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        As the veteran population has migrated, VA's capital infrastructure
    has not kept pace. We continue to operate medical facilities where the
    veteran population is small or shrinking. Our smallest hospitals often
    do not have sufficient patient volume and complexity of care
    requirements to maintain the clinical skills and competencies of
    physicians and nurses.
                        ensuring veterans access to care
        The President's 2017 budget will allow VA to operate the largest
    integrated healthcare system in the country, including nearly 1,300 VA
    sites of healthcare and approximately 6 million veterans receiving
    care; the eleventh largest life insurance provider, covering both
    active duty servicemembers and enrolled veterans; compensation and
    pension benefit programs serving more than 5.3 million veterans and
    survivors; education benefits to more than one million students;
    vocational rehabilitation and employment benefits to more than 140,000
    disabled veterans; a home mortgage program that will guarantee more
    than 429,000 new home loans; and the largest national cemetery system
    that leads the industry as a high-performing organization, with
    projections to inter more than 132,000 veterans and family members in
    2017.
        The 2017 budget requests $65 billion for medical care, an increase
    of $3.9 billion (6.3 percent) over the 2016 enacted level. The increase
    in 2017 is driven by veterans' demand for VA healthcare as a result of
    demographic factors, economic assumptions, investments in access, and
    high priority investments for caregivers, new Hepatitis C treatments,
    and support for Veterans Care in the Community. The 2017 request
    supports programs to end and prevent veteran homelessness, invests in
    strategic initiatives to improve the quality and accessibility of VA
    healthcare programs, continues implementation of the Caregivers and
    Veterans Omnibus Health Services Act, and provides for activation
    requirements for new or replacement medical facilities. The 2017
    appropriations request includes an additional $1.7 billion above the
    enacted 2017 AA for veterans medical care. The request assumes
    approximately $3.6 billion annually in medical collections in 2017 and
    2018. For the 2018 Advance Appropriations for medical care, the current
    request is $66.4 billion.
    Hepatitis C Treatment
        Although the Hepatitis C virus infection (HCV) takes years to
    progress, it is the main cause of advanced liver disease in the United
    States. Treatment of this disease remains a high priority because its
    cure dramatically lowers patients' risk of liver failure, liver cancer,
    and death.
        VA is the largest single provider of care in the Nation for chronic
    HCV, and over the next 5 years, VA will strive to provide treatment to
    all veterans with HCV who are treatment candidates. For fiscal year
    2017, VA is requesting $1.5 billion for the cost of Hepatitis C drugs
    and clinical resources. With a budget of $1.5 billion in fiscal year
    2017, VA expects to treat at least 35,000 patients with HCV; the actual
    number of patients treated will depend on the cost to VA of Hepatitis C
    drugs. At the beginning of fiscal year 2016, almost 120,000 veterans in
    VA care were awaiting HCV treatment, of whom approximately 30,000 have
    advanced liver disease.
        VA successfully negotiated extremely favorable pricing for both of
    the new treatments available--Harvoni and Viekira--from two different
    drug manufacturers by stressing VA's proven ability to deliver market
    share, VA's large HCV population, and the long-term impact that VA's
    physician residency programs can have on post-residency prescribing
    practices.
        During fiscal year 2015, VA medical facilities treated more than
    30,000 veterans for HCV with these new drugs with remarkable success,
    achieving cure rates of 90 percent, similar to those seen in clinical
    trials.
        VA clinicians have rapidly adopted new, more effective therapies
    for HCV as they have become available. New therapies are costly and
    require well-trained clinical providers and support staff, presenting
    resource challenges for the Department. VA will focus resources on the
    sickest patients and most complex cases and continue to build capacity
    for treatment through clinician training and use of telehealth
    platforms. Patients with less advanced disease are being offered
    treatment through the Veterans Choice program in partnership with
    community HCV providers.
    Care in the Community
        VA is committed to providing veterans access to timely, high-
    quality healthcare. The 2017 budget includes $12.2 billion for Care in
    the Community and includes a new Medical Community Care budget account,
    consistent with the VA Budget and Choice Improvement Act (Public Law
    114-41). Of the total that will be spent on non-VA care in fiscal year
    2017, $7.5 billion will be provided through a transfer of the 2017
    enacted AA from the Medical Services account to the new budget account,
    and $4.7 billion will be provided through the resources provided in the
    Veterans Choice Act for implementation of the Veterans Choice Program.
        The Choice Act increased VA's in-house capacity by funding medical
    personnel growth in VA facilities and expanded eligibility for Care in
    the Community to ensure access to care within 30 days and to provide
    care closer to home for enrollees residing more than 40 miles from a VA
    facility (the 40-mile group).
        This additional capacity facilitated an increase in enrollees'
    reliance on VA healthcare by more than half a percent over the level
    expected in fiscal year 2015. This growth was the result of enrollees
    increasing their use of VA funded healthcare versus their use of other
    healthcare options (Medicare, Medicaid, commercial insurance, etc.).
        The fiscal year 2015 growth in enrollee reliance was largely in
    Care in the Community, with the 40-mile group generating a more
    significant increase in care:

      --In fiscal year 2015, enrollees' reliance on VA healthcare increased
            by 0.7 percent overall. Reliance for the 40-mile group
            increased by 2.8 percentage points from 32.5 percent to 35.3
            percent.
      --The increase in reliance was mostly driven by growth in Care in the
            Community. Cost sharing levels in VA are lower than what is
            typically available elsewhere, which provides an incentive for
            enrollees to use VA-paid Care in the Community.

        Enrollee reliance on VA healthcare is expected to continue to
    increase in 2016 and beyond to service the unmet demand that the Choice
    Act was enacted to address.
        On October 30, 2015, VA provided Congress with a plan for the
    consolidation and improvement of all purchased care programs into one
    New Veterans Choice Program (New VCP). Consistent with this report, the
    2017 budget includes legislative proposals to streamline and improve
    VA's delivery of Community Care.
    Caregiver Support Program
        Caregivers give their time and love in countless behind-the-scenes
    ways. Whether they are helping with transportation to and from
    appointments, helping the veteran apply for benefits, or helping with
    meals, bathing, clothing, medication, the spectrum of care is wide and
    compassion runs deep.
        The 2017 budget requests $725 million for the National Caregivers
    Support Program to support nearly 36,600 caregivers, up from about
    30,600 in fiscal year 2016. Funding requirements for caregivers are
    driven by an increase in the eligible veteran population, with
    caregiver enrollment increasing by an average of about 500 each month.
                          ending veteran homelessness
        The ambitious goal of ending veteran homelessness has galvanized
    the Federal Government and local communities to work together to solve
    this important National problem. Our systems are designed to help
    prevent homelessness whenever possible, and our goal is a systematic
    end to homelessness, meaning that there are no veterans sleeping on our
    streets and every veteran has access to permanent housing. Should
    veterans become homeless or be at-risk of becoming homeless, there will
    be capacity to quickly connect them to the help they need to achieve
    housing stability.
        The 2017 budget supports VA's commitment to ending veteran
    homelessness by emphasizing rescue for those who are homeless today and
    prevention for those at risk of homelessness. The 2017 budget requests
    $1.6 billion for VA homeless-related programs, including case
    management support for the Department of Housing and Urban Development
    (HUD)-VA Supportive Housing program (HUD-VASH), the Grant and Per Diem
    Program, VA justice programs, and the Supportive Services for Veteran
    Families program.
        In fiscal year 2015 and fiscal year 2016, VA committed more than
    $1.5 billion annually to strengthen programs that prevent and end
    homelessness among veterans. Communities that have reached the goal or
    are close to effectively ending homelessness rely heavily on VA
    targeted homeless resources. Communities that have a sustainment plan
    are depending on those resources to be available as they continue to
    tackle homelessness and sustain the support for veterans who have moved
    into permanent housing, ensuring that they maintain housing stability
    and do not fall back into homelessness.
        VA will continue to advocate for its continuum of homeless services
    to address the needs associated with preventing first-time
    homelessness, as well as the needs of those who return to homelessness,
    and focus on the root causes associated with homelessness, including
    poverty, addiction, mental health, and disability.
        Congress has an important role, as well, in ensuring adequate
    resources to meet the needs of those most vulnerable veterans by
    enacting authorizations and other legislation to provide VA with a full
    complement of tools to combat homelessness--including legislation that
    is a prerequisite to carry out dramatic improvements to our West Los
    Angeles campus centered on the needs of veterans.
                               benefits programs
        The 2017 budget requests $2.8 billion and 22,171 FTE for VBA
    General Operating Expenses, an increase of $93.4 million (3.4 percent)
    over the 2016 enacted level. The request includes an additional 300
    full-time equivalent (FTE) employees for non-rating claims.

        With the resources requested in the 2017 budget, VA will provide:

      --Disability compensation and pension benefits for 5.3 million
            veterans and survivors, totaling $86 billion;
      --Vocational rehabilitation and employment benefits to nearly 141
            thousand disabled veterans, totaling $1.4 billion;
      --Education benefits totaling $14 billion to more than one million
            veterans and family members;
      --Guaranty of more than 429,000 new home loans; and
      --Life insurance coverage to 1.0 million veterans, 2.2 million
            servicemembers, and 2.8 million family members.

        Improving the quality and timeliness of disability claim decisions
    has been integral to VBA's transformation of benefits delivery. VBA
    successfully streamlined a complex and paper-bound compensation claims
    process and implemented people, process, and technology initiatives
    necessary to optimize productivity and efficiency. In alignment with
    the MyVA transformation, VBA is working to further improve its
    operations with a focus on the customer experience. We are implementing
    enhancements to enable integration across our programs and
    organizational components, both inside and outside of VBA.
        VBA has processed an unprecedented number of rating claims in
    recent fiscal years (nearly 1.4 million in 2015, and more than 1
    million per year for the last 6 years). However, its success has
    resulted in other unmet workload demands. As VBA continues to receive
    and complete more disability rating claims, the volume of non-rating
    claims, appeals, and fiduciary field examinations increases
    correspondingly.

      --Non-rating claims. VA completed nearly 37 percent more non-rating
            work in 2015 than 2013--and 15 percent more than 2014. The 2017
            budget requests $29.1 million for an additional 300 non-rating
            claims processors to reduce the non-rating claims inventory and
            provide veterans with more timely decisions on non-rating
            claims.
      --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, the volume of appeals
            correspondingly increases. As of December 31, 2015, there were
            more than 440,000 benefits-related appeals pending in the
            Department at various stages in the multi-step appeals process,
            which divides responsibility between VBA and the Board of
            Veterans' Appeals (Board)--355,803 of those benefits-related
            appeals are in VBA's jurisdiction and 85,682 are within the
            Board's jurisdiction.
          Under current law, VA appeals framework is complex, ineffective,
            and opaque, and veterans wait on average 5 years for final
            resolution of an appeal. The 2017 budget supports the
            development of a Simplified Appeals Process to provide veterans
            with a simple, fair, and streamlined appeals procedure in which
            they would receive a final appeals decision within 365 days
            from filing of an appeal by fiscal year 2021. The 2017 budget
            provides funding to support over 900 FTE for the Board and
            proposes a legislative change that will improve an outdated and
            inefficient process which will benefit all veterans through
            expediency and accuracy. We look forward to working with
            Congress, veterans, and other stakeholders to implement
            improvements.
      --Fiduciary program. The fiduciary program served 29 percent more
            beneficiaries in 2015 than it served in 2014. Program growth is
            primarily due to an increase in the total number of individuals
            receiving VA benefits and an aging population of beneficiaries.
            Additionally, in 2015 the fiduciary program changed the way it
            captures beneficiary population data and now reports all
            beneficiaries served during the course of the fiscal year. In
            2015, fiduciary personnel conducted more than 84,000 field
            examinations, and VBA anticipates field examination
            requirements will exceed 97,000 in 2017.
      --Housing program. The 2017 budget includes $34 million for the VA
            Loan Electronic Reporting Interface (VALERI) to manage the 2.4
            million VA-guaranteed loans for veterans and their families.
            VALERI connects VA with more than 320,000 veteran borrowers and
            more than 225,000 mortgage servicer contacts. VA uses the
            VALERI tool to manage and monitor efforts taken by private-
            sector loan servicers and VA staff in providing timely and
            appropriate loss mitigation assistance to defaulted borrowers.
            Without these resources, approximately 90,000 veterans and
            their families would be in jeopardy of losing their homes each
            year, potentially costing the Government an additional $2.8
            billion per year. VALERI also supports payment of guaranty and
            acquisition claims.

        The budget requests the following advance appropriations amounts
    for 2018: $90.1 billion for compensation and pensions, $13.7 billion
    for readjustment benefits, and $107.9 million for insurance and
    indemnities. VA will continue to closely monitor workload and monthly
    expenditures in these programs and will revise cost estimates as
    necessary in the Mid-Session Review of the 2017 budget, to ensure the
    enacted advance appropriation levels are sufficient to address
    anticipated veteran needs throughout the year.
                       the simplified appeals initiative
        The current VA appeals process is broken. The more than 80-year-old
    process was conceived in a time when medical treatment was far less
    frequent than it is today, so it is encumbered by some antiquated laws
    that have evolved since WWI and steadily accumulated in layers.
        Under current law, the VA appeals framework is complex,
    ineffective, confusing, and understandably frustrating for veterans who
    wait much too long for final resolution of their appeal. The current
    appeals system has no defined endpoint, and multiple steps are set in
    statute. The system requires continuous evidence gathering and multiple
    re-adjudications of the very same or similar matter. A veteran,
    survivor, or other appellant can submit new evidence or make new
    arguments at any time, while VA's duty to assist requires continuous
    development and re-adjudication. Simply put, the VA appeals process is
    unlike other standard appeals processes across Federal and judicial
    systems.
        Fundamental legislative reform is essential to ensure that veterans
    receive timely and quality appeals decisions, and we must begin an
    open, honest dialogue about what it will take for us to provide
    veterans with the timely, fair, and streamlined appeals decisions they
    deserve. To put the needs, expectations, and interests of veterans and
    beneficiaries first--a goal on which we can all agree--the appeals
    process must be modernized.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The 2017 budget proposes a Simplified Appeals Process--legislation
    and resources (i.e., people, process, and technology) that would
    provide veterans with a simple, fair, and streamlined appeals process
    in which they would receive a final decision on their appeal within 1
    year from filing the appeal by fiscal year 2021.
        The 2017 budget requests $156.1 million and 922 FTE for the Board,
    an increase of $46.2 million and 242 FTE above the fiscal year 2016
    enacted level. This is a down-payment on a long-term, sustainable plan
    to provide the best services to veterans. This policy option also
    represents the best value to taxpayers (as outlined in the chart,
    Analysis of Alternatives).

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Without legislative change or significant increases in staffing, VA
    will face a soaring appeals inventory, and veterans will wait even
    longer for a decision on their appeal. If Congress fails to enact VA's
    proposed legislation to simplify the appeals process, Congress would
    need to provide resources for VA to sustain more than double its
    appeals FTE, with approximately 5,100 appeals FTE onboard. The prospect
    of such a dramatic increase, while ignoring the need for structural
    reform, is not a good result for veterans or taxpayers.
        While the Simplified Appeals proposal would require FTE increases
    for the first several years to resolve the more than 440,000 currently
    pending appeals, by 2022, VA would be able to reduce appeals FTE to a
    sustainment level of roughly 1,030 FTE (including 980 FTE at the Board
    and 50 at VBA), a level sufficient to process all simplified appeals in
    1 year. Notably, such a sustainment level is 1,135 FTE less than the
    current 2016 budget requires, and is 4,070 FTE less Department-wide
    than would be required to address this workload with FTE resources
    alone. In addition, this reform would essentially eliminate the need
    for appeals FTE at VBA, allowing these resources to be redirected
    within VBA to other priorities.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        In 2015, the Board was still adjudicating an appeal that originated
    25 years ago, even though the appeal had previously been decided by VA
    more than 27 times. Under the Simplified Appeals Process, most veterans
    would receive a final appeals decision within 1 year of filing an
    appeal. Additionally, rather than trying to navigate a multi-step
    process that is too complex and too difficult to understand, veterans
    would be afforded a transparent, single-step appeal process with only
    one entity responsible for processing the appeal. Essentially, under a
    simplified appeals process, as soon as a veteran files an appeal, the
    case would go straight to the Board where a Judge would review the same
    record considered by the initial decision-maker and issue a final
    decision within 1 year; informing the veteran whether that initial
    decision was substantially correct, contained an error that must be
    corrected, or was simply wrong. If a veteran disagrees with any or all
    of the final appeals decision, the veteran always has the option of
    filing a new claim for the same benefit once the appeal is resolved, or
    may pursue an appeal to the Court of Appeals for Veterans Claims.
        Rapid growth in the appeals workload exacerbates this challenge. As
    VBA has produced record-setting claims-decision output over the past 5
    years, appeals volume has grown commensurately. Between December 2012
    and November 2015, the number of pending appeals rose by 34 percent.
    Under current law with no radical change in resources, the number of
    pending appeals is projected to soar by 397 percent--from 437,000 to
    2.17 million (chart, Status of Appeals)--between November 2015 and
    fiscal year 2027.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        VA firmly believes that justice delayed is justice denied. In the
    streamlined appeals process proposed in the fiscal year 2017
    President's budget (chart, Proposed Simplified Appeals), there would be
    a limited exception allowing the Board to remand appeals to correct
    duty to notify and assist errors made on the part of the Agency of
    Original Jurisdiction (AOJ) prior to issuance of the initial AOJ
    decision.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                        medical and prosthetic research
        The 2017 budget continues VA's program of groundbreaking, high
    standard research focused on advancing the healthcare needs of all
    veterans. The 2017 budget requests $663 million for Medical Research
    and supports the President's Precision Medicine Initiative (PMI) to
    drive personalized medical treatment and the evolving science of
    Genomic Medicine--how genes affect health. In addition to the direct
    appropriation, Medical Research will be supported through $1.3 billion
    from VA's Medical Care program and other Federal and non-Federal
    research grants. Total funding for Medical and Prosthetic Research will
    be more than $2.0 billion in 2017.
        VA research is focused on the U.S. veteran population and allows VA
    to uniquely address scientific questions to improve veteran healthcare.
    Most VA researchers are also clinicians and healthcare providers who
    treat patients. Thus, VA research arises from the desire to heal rather
    than pure scientific curiosity and yields remarkable returns.
        For more than 90 years, VA research has produced cutting-edge
    medical and prosthetic breakthroughs that improve the lives of veterans
    and others. The list of accomplishments includes therapies for
    tuberculosis following World War II, the implantable cardiac pacemaker,
    computerized axial tomography (CAT) scans, functional electrical
    stimulation systems that allow patients to move paralyzed limbs, the
    nicotine patch, the first successful liver transplants, the first
    powered ankle-foot prosthesis, and a vaccine for shingles. VA
    researchers also found that one aspirin a day reduces by half the rate
    of death and nonfatal heart attacks in patients with unstable angina.
    More recently, VA investigators tested an insulin nasal spray that
    shows great promise in warding off Alzheimer's disease and found that
    prazosin (a well-tested generic drug used to treat high blood pressure
    and prostate problems) can help improve sleep and lessen nightmares for
    those with post-traumatic stress disorder.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Beyond VA's support of more than 2,200 continuing research
    projects, VA will leverage our Million Veteran Program (MVP)--already
    one of the world's largest databases of genetic information--to support
    several Precision Medicine Initiatives. The first initiative will
    evaluate whether using a patient's genetic makeup to inform medication
    selection is effective in reducing complications and getting patients
    the most effective medication for them. This initiative will focus on
    up to 21,500 veterans with PTSD, depression, pain, and/or substance
    abuse.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The second initiative will focus on additional analysis of DNA
    specimens already collected in the MVP. More than 438,000 veteran
    volunteers have contributed DNA samples so far. Genomic analysis on
    these DNA specimens allows researchers to extract critical genetic
    information from these specimens. There are several possible ``levels''
    of genomic analyses, with increasing cost.
        Built into the design of MVP and currently funded within the VA
    research program is a process known as ``exome chip'' genotyping--the
    tip of the iceberg in genomic analysis. Exome Chip genotyping provides
    useful information, but newer technologies promise significantly
    greater information for improving treatments. VA proposes conducting
    the next level of analysis, known as ``exome sequencing,'' on up to
    100,000 veterans who are enrolled in MVP. This exome sequencing
    analyzes the part of the genome that codes for proteins--the large,
    complex molecules that perform most critical functions in the body.
    Sequencing efforts will begin with a focus on veterans with PTSD and
    frequently co-occurring conditions such as depression, pain, and
    substance abuse, and expand to other chronic illnesses such as diabetes
    and heart disease, among others. This more detailed genetic analysis
    will provide greater information on the biological factors that may
    cause or increase the risk for these illnesses.
        VA's research and development program improves the lives of
    veterans and all Americans through healthcare discovery and innovation.
                                other priorities
    Information Technology
        The 2017 budget demonstrates VA's commitment to using cutting-edge
    information technology (IT) to support transformation and ensure that
    the veteran is at the center of everything we do. The budget requests
    $4.28 billion--an increase of $145 million (3.5 percent) from the 2016
    enacted level--to help stabilize and streamline core processes and
    platforms, eliminate the information security material weakness, and
    institutionalize new capabilities to deliver improved outcomes for
    veterans. The request includes $471 million for new efforts to develop,
    improve, and enhance clinical and benefits systems and processes and
    supports VA's strategy to replace FMS. The 2017 budget was developed
    through Federal IT Acquisition Reform Act (FITARA) compliant processes
    led by the Chief Information Officer (CIO), in concert with the Chief
    Financial Officer and Chief Acquisition Officer.
        In fiscal year 2015, the Office of Information and Technology (OIT)
    developed an IT Enterprise Strategy and an Enterprise Cybersecurity
    Strategy. These strategies support OIT's vision to become a world-class
    organization that provides a seamless, unified veteran experience
    through the delivery of state-of-the-art technology. OIT is
    implementing a new IT Security Strategy to improve VA's security
    posture and eliminate the Federal Information Security Management Act/
    Federal Information System Controls Audit Manual material weakness.
        The 2017 budget includes $370.1 million for information security,
    an increase of 105 percent over the fiscal year 2016 funding level. In
    addition, the 2017 budget includes $50 million to launch a new Data
    Management program to use data as a strategic resource. Under this
    program, VA will inventory its data collection activities--with the
    objective of requesting data from the veteran only once--and dispose
    expired information in a secure and timely way. These two aspects will
    reduce VA costs for data storage and support safeguards for veterans'
    information.
    National Cemetery Administration
        The National Cemetery Administration (NCA) has the solemn duty to
    honor veterans and their families with final resting places in national
    shrines and with lasting tributes that commemorate their service and
    sacrifice to our Nation. The 2017 budget requests $286 million, an
    increase of $15 million (5.5 percent) to allow VA to provide perpetual
    care for more than 3.5 million gravesites and more than 8,800 developed
    acres. The budget supports NCA's efforts to raise and realign
    gravesites and repair turf in order to maintain cemeteries as national
    shrines. The budget also continues implementation of a Geographic
    Information System to enable enhanced accounting of remains and
    gravesites and enhanced gravesite location for visitors. The budget
    positions NCA to meet veterans' emerging burial and memorial needs in
    the decades to come by ensuring that veterans and their families
    continue to have convenient access to a burial option in a National,
    State, or Tribal veterans cemetery and that the service they receive is
    dignified, respectful, and courteous.
                               va infrastructure
        The 2017 budget requests $900.2 million for VA's Major and Minor
    construction programs. The budget invests in infrastructure projects at
    existing campuses that will lead to seismically safe facilities,
    ensuring that veterans are safe when they seek care. The capital asset
    budget request 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 and secure facilities
    for veterans. The 2017 budget also requests funding to ensure that VA
    has the ability to provide eligible veterans with access to burial
    services through new and expanded cemeteries, and prevent the closure
    to new interments in existing cemeteries.
        VA acknowledges the transformation underway in the landscape for
    healthcare delivery. Our future space needs may be impacted by the
    changes we are already implementing in how we deliver care for
    veterans. In addition, we plan to potentially incorporate any
    recommendations from the Commission on Care and their impact on our
    changing service delivery into our long-term infrastructure strategy.
        Leasing provides flexibility and enables VA to more quickly adapt
    to changes in medical technology, workload, new programs, and
    demographics. VA is also looking to Congress for authorization of 18
    leases submitted in VA's fiscal year 2015 and 2016 budget requests. The
    pending major medical facility lease projects will replace, expand, or
    create new outpatient clinics and research facilities and are critical
    for providing access for veterans and enhancing our research
    capabilities nationwide. The 2017 budget includes a request to
    authorize six additional replacement major medical facility leases
    under VA's authority in 38 U.S.C. Sec. Sec. 8103 and 8104 and with the
    anticipated delegation of leasing authority from the General Services
    Administration. The Department is awaiting authorization of its request
    to expand the definition of ``Medical Facilities'' in VA's authorizing
    statutes to allow VA to more easily partner with other Federal
    agencies. Another proposal that deserves attention is authorization of
    enhanced use lease (EUL) authority to encompass broader possibilities
    for mixed-use projects. This change would give VA more opportunities to
    engage the private sector, local governments, and community partners by
    allowing VA to use underutilized property that would benefit veterans
    and VA's mission and operations.
    Major Construction
        The 2017 budget requests $528.1 million for Major Construction. The
    request includes funds to address seismic problems in facilities in
    Long Beach, California, and Reno, Nevada. These projects will correct
    critical safety and seismic deficiencies that pose a risk to veterans,
    VA staff, and the public. Consistent with Public Law 114-58, the
    Department must identify a non-VA entity to execute these two projects,
    as they are more than $100 million. We have identified the U.S. Army
    Corps of Engineers as our construction agent to execute these projects.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        We must prevent the devastation and potential loss of life that may
    occur because our facilities are vulnerable to earthquakes--such as the
    one that occurred in 1971 in San Fernando, California. As shown, 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.
        These images show a known seismic deficiency at the San Francisco
    Medical Center--built in 1933--wherein the rebar does not extend into
    the ``pile cap.''

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The request also includes funding for new national cemeteries in
    western New York and southern Colorado, and national cemetery
    expansions in Jacksonville, Florida and South Florida. These cemetery
    projects support NCA's goal to ensure that eligible veterans have
    access to a burial option within a reasonable distance from their
    residences.

      --The new western New York national cemetery will establish a
            dignified burial option for more than 96,000 veterans plus
            eligible family members in the western New York region.
      --The new southern Colorado national cemetery will establish a
            dignified burial option for more than 95,000 veterans plus
            eligible family members in the southern Colorado region.
      --The Jacksonville National Cemetery expansion will develop
            approximately 30 acres of undeveloped land to provide
            approximately 20,200 gravesites.
      --The South Florida National Cemetery expansion will develop
            approximately 25 acres of undeveloped land to provide
            approximately 21,750 gravesites.
    Minor Construction
        In 2017, the budget requests $372 million for Minor Construction.
    The requested amount would provide funding for ongoing projects that
    renovate, expand and improve VA facilities, while increasing access for
    our veterans. Examples of projects include enhancing women's health
    programs; providing additional domiciliaries to further address
    veterans' homelessness; improving safety; mitigating seismic
    deficiencies; transforming facilities to be more veteran-centric;
    enhancing patient privacy; and enhancing research capabilities.
        The Minor Construction request will also provide funding for
    gravesite expansion and columbaria projects to keep existing national
    cemeteries open, and will support NCA's urban and rural initiatives. It
    will also provide funding for projects at VBA regional offices
    nationwide and will fund infrastructure repairs and enhancements to
    improve operations for the Department's staff offices.
    Leasing
        The 2017 budget includes a request to authorize six replacement
    major medical facility leases located in Corpus Christi, Texas;
    Jacksonville, Florida; Pontiac, Michigan; Rochester, New York; Tampa,
    Florida; and Terre Haute, Indiana. These leases will allow VA to
    provide continued access to veterans that are served in these
    locations.
                              myva transformation

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        MyVA puts veterans in control of how, when, and where they wish to
    be served. It is a catalyst to make VA a world-class service provider--
    a framework for modernizing VA's culture, processes, and capabilities
    to put the needs, expectations, and interests of veterans and their
    families first. A veteran walking into any VA facility should have a
    consistent, high-quality experience.
        MyVA will build upon existing strengths to promote an environment
    where VA employees see themselves as members of one enterprise,
    fortified by our diverse backgrounds, skills, and abilities. Moreover,
    every VA employee--doctor, rater, claims processor, custodian, or
    support staffer, or the Secretary of Veterans Affairs--will understand
    how they fit into the bigger picture of providing veteran benefits and
    services. VA, of course, must also be a good steward of public
    resources. Citizens and taxpayers should expect to see efficiency in
    how we run our internal operations.
        The fiscal year 2017 budget will make investments toward the five
    critical MyVA objectives:

        1.  Improving the veteran experience: At a bare minimum, every
    contact between veterans and VA should be predictable, consistent, and
    easy; however, we are aiming to make each touchpoint exceptional. It
    begins with receptionists who are pleasant to our veteran clients, but
    there is also a science to this experience. We are focusing on human-
    centered design, process mapping, and working with leading design firms
    to learn and use the technology associated with improving every
    interaction with clients.
        2.  Improving the employee experience--so we can better serve
    veterans: VA employees are the face of VA. They provide care,
    information, and access to earned benefits. They serve with distinction
    daily. We cannot make things better for veterans without improving the
    work experience of our dedicated employees. We must train them. We must
    move from a rules/fear-based culture to a principles/values-based
    culture. I learned in the private sector that it is absolutely not a
    coincidence that the very best customer-service organizations are
    almost always among the best places to work.
        3.  Improving internal support services: We will let employees and
    leaders focus on assisting veterans, rather than worrying about ``back
    office'' issues. We must bring our IT infrastructure into the 21st
    century. Our scheduling system, where many of our issues with access to
    care were manifest, dates to 1985. Our Financial Management System is
    written in COBOL, a language I used in 1973. This is simply
    unacceptable. It impedes all of our efforts to best serve veterans.
        4.  Establishing a culture of continuous improvement: We will apply
    Lean strategies and other performance improvement capabilities to help
    employees examine their processes in new ways and build a culture of
    continuous improvement.
        5.  Enhancing strategic partnerships: Expanding our partnerships
    will allow us to extend the reach of services available for veterans
    and their families. We must work effectively with those who bring
    capabilities and resources to help veterans.
    Breakthrough Priorities for CY 2016
        While we have made progress, we are still on the first leg of a
    multi-year journey. We have narrowed down our near-term focus to 12
    ``breakthrough priorities.''
        Many of these reflect issues which are not new--they have been
    known problems, in some cases, for years. We have already seen some
    progress in solving many of them. However, we still have much work to
    do.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The following are our 12 priorities and the 2016 outcomes to which
    we aspire. We understand that it will be a challenge to accomplish all
    of these goals this year, but we have committed ourselves to producing
    results for veterans and creating irreversible momentum to continue the
    transformation in future years.
    Veteran Facing Goals
         1.  Improve the Veteran Experience.
          -- Breakthrough Outcome for 2016:
            -- Strengthen the trust in VA to fulfill our country's
                commitment to veterans; currently measured at 47 percent,
                we want it to be 70 percent by year end.
            -- Establish a Department-wide customer experience measurement
                framework to enable data-driven service improvements.
            -- Make the Veterans Experience office fully operational.
            -- Expand the network of Community Veteran Engagement Boards to
                more than 100.
            -- Additionally, in order to deliver experiences to veterans
                that are effective, easy, and in which veterans feel
                valued, medical centers will ensure that they are fully
                staffed at the frontline with well-prepared employees who
                have been selected for their customer service.
                Functionally, this means new frontline staff will be
                assessed through a common set of customer service criteria,
                hired within 30 days of selection, and provided a
                nationally standardized onboarding and training program.
         2.  Increase Access to Health Care.
          -- Breakthrough Outcome for 2016:
            -- When veterans call or visit primary care facilities at a VA
                Medical Center, their clinical needs will be addressed the
                same day.
            -- When veterans call for a new mental health appointment, they
                receive a suicide risk assessment and immediate care if
                needed. Veterans already engaged in mental healthcare
                identifying a need for urgent attention will speak with a
                provider the same day.
            -- Utilizing existing VistA technology, veterans will be able
                to conveniently get medically necessary care, referrals,
                and information from any VA Medical Center, in addition to
                the facility where they typically receive their care.
         3.  Improve Community Care.
          -- Breakthrough Outcome for 2016: Improve the veterans'
            experience with Care in the Community. Following enactment of
            our requested legislation, by the end of the year:
            -- VA will begin to consolidate and streamline its non-
                Department Provider Network and improve relationships with
                community providers and core partners.
            -- Veterans will be able to see a community provider within 30
                days of their referral.
            -- Non-Department claims will be processed and paid within 30
                days, 85 percent of the time.
            -- Healthcare claims backlog will be reduced to less than 10
                percent of total inventory.
            -- Referral and authorization time will be reduced.
         4.  Deliver a Unified Veteran Experience.
          -- Breakthrough Outcome for 2016:
            -- Vets.gov will be able to provide veterans, their families,
                and caregivers with a single, easy-to use, and high-
                performing digital platform to access the VA benefits and
                services they have earned.
            -- Vets.gov will be data-driven and designed such that the top
                100 search terms will be available within one click from
                search results. The top 100 search terms will all be
                addressed within one click on the site.
            -- All current content, features and forms from the current
                public-facing VA websites will be redesigned, rewritten in
                plain language, and migrated to Vets.gov, in priority order
                based on veteran demand.
            -- Additionally, we will have one authoritative source of
                customer data; eliminating the disparate streams of
                Administration-specific data that require veterans to
                replicate inputs.
         5.  Modernize our Contact Centers (Including Veterans Crisis
    Line).
          -- Breakthrough Outcome for 2016:
            -- Veterans will have a single toll free phone number to access
                the VA Contact Centers, know where to call to get their
                questions answered, receive prompt service and accurate
                answers, and be treated with kindness and respect. VA will
                do this by establishing the initial conditions necessary
                for an integrated system of customer contact centers.
            -- By the end of this year, every veteran in crisis will have
                his or her call promptly answered by an experienced
                responder at the Veterans Crisis Line.
        6. Improve the Compensation & Pension (C&P) Exam Process.
          -- Breakthrough Outcome for 2016:
            -- Improved veteran satisfaction with the C&P Exam process. We
                have a baseline satisfaction metric in place and have
                established a goal for significant improvement.
            -- VA will have a national rollout of initiatives to ensure the
                experience is standardized across the Nation.
         7.  Develop a Simplified Appeal Process.
          -- Breakthrough Outcome for 2016:
            -- Subject to successful legislative action, put in place a
                simplified appeals process, enabling the Department to
                resolve 90 percent of appeals within 1 year of filing by
                2021.
            -- Increase current appeals production to more rapidly reduce
                the existing appeals inventory.
         8.  Continue Progress in Reducing Veteran Homelessness.
          -- Breakthrough Outcome for 2016:
            -- Continue progress toward an effective end to veteran
                homelessness by permanently housing or preventing
                homelessness for an additional 100,000 veterans and their
                family members.
    VA Internal Facing Goals
         9.  Improve the Employee Experience (Including Leadership
    Development).
          -- Breakthrough Outcome for 2016:
            -- Continue to improve the employee experience by developing
                engaged leaders at all levels who inspire and empower all
                employees to deliver a seamless, integrated, and responsive
                VA customer service experience.
            -- More than 12,000 engaged leaders skilled in applying LDL
                principles, concepts, and tools will work projects and/or
                initiatives to make VA a more effective and efficient
                organization.
            -- Improve VA's employee experience by incorporating LDL
                principles into VA's leadership and supervisor development
                programs and courses of instruction.
            -- VA Senior Executive performance plans will include an
                element that targets how to improve employee engagement and
                customer service, and all VA employees will have a customer
                service standard in their performance plans.
            -- All VA supervisors will have a customer service standard in
                their performance plans.
            -- VA will begin moving from paper-based individual development
                plans to a new electronic version, making it easier for
                both supervisors and employees.
        10.  Staff Critical Positions.
          -- Breakthrough Outcome for 2016:
            -- Achieve significantly improved critical staffing levels that
                balance access and clinical productivity, with targets of
                95 percent of Medical Center Director positions filled with
                permanent appointments (not acting) and 90 percent of other
                critical shortages addressed--management as well as
                clinical.
            -- Work to reduce ``time to fill'' hiring standards by 30
                percent.
        11.  Transformation the Office of Information & Technology (OIT).
          -- Breakthrough Outcome for 2016: Achieve the following key
            milestones on the path to creating a world-class IT
            organization that improves the support to business partners and
            veterans.
            -- Begin measuring IT projects based on end product delivery,
                starting with a near-term goal to complete 50 percent of
                projects on time and on budget.
            -- Stand up an account management office.
            -- Develop portfolios for all Administrations.
            -- Tie all supervisors' and executives' performance goals to
                strategic goals.
            -- Close all current cybersecurity weaknesses.
            -- Develop a holistic veteran data management strategy.
            -- Implement a quality and compliance office.
            -- Deploy a transformational vendor management strategy.
            -- Ensure implementation of key initiatives to improve access
                to care.
            -- Establish one authoritative source for veteran contact
                information, military service history, and veteran status.
            -- Finalize the Congressionally mandated DOD-VA
                Interoperability requirements.
        12.  Transform Supply Chain.
          -- Breakthrough Outcome for 2016:
            -- Build an enterprise-wide integrated Medical-Surgical supply
                chain that leverages VA's scale to drive an increase in
                responsiveness and a reduction in operating costs. More
                than $150 million in cost avoidance will be redirected to
                priority veteran programs.

        We are rigorously managing each of these ``breakthrough
    priorities'' by instituting a Department level scorecard, metrics, and
    tracking system. Each priority has an accountable and responsible
    official and a cross-functional, cross-Department team in support. Each
    team meets every other week in person with either the Secretary or
    Deputy Secretary to discuss progress, identify roadblocks, and problem
    solve solutions. This is a new VA--more transparent, collaborative, and
    respectful; less formal and bureaucratic; more execution and outcome-
    focused; principles based, not rules-based.
                             legislative priorities
        The Department is grateful for your continuing support of veterans
    and appreciates your efforts to pass legislation enabling VA to provide
    veterans with the high-quality care they have earned and deserve. We
    have identified a number of necessary legislative items that require
    action by Congress in order to best serve veterans going forward:

        1.  Improve Care in the Community: We need your help, as discussed
    on many occasions, to help overhaul our Care in the Community programs.
    VA staff and subject matter experts have communicated regularly with
    congressional staff to discuss concepts and concerns as we shape the
    future plan and recommendations. We believe that together we can
    accomplish legislative changes to streamline Care in the Community
    programs before the end of this session of Congress.
        2.  Flexible Budget Authority: We need flexible budget authority to
    avoid artificial restrictions that impede our delivery of care and
    benefits to veterans. Currently, there are more than 70 line items in
    VA's budget that dedicate funds to a specific purpose without adequate
    flexibility to provide the best service to veterans. These include
    limitations within the same general areas, such as healthcare funds
    that cannot be spent on healthcare needs. These restrictions limit VA's
    ability to deliver veteran care and benefits based on demand, rather
    than specific funding lines. The 2017 b`udget proposes appropriations
    language to provide VA with new authority to transfer up to 2 percent
    of the discretionary appropriations for fiscal year 2017 between any of
    VA's discretionary appropriations accounts, excluding Medical Care.
    This new authority would give VA greater ability to address emerging
    needs and overcome artificial funding restrictions on providing
    veterans' care and benefits.
        3.  Support for the Purchased Health Care Streamlining and
    Modernization Act: This legislation would clarify VA's ability to
    contract with providers in the community on an individual basis,
    outside of Federal Acquisition Regulations (FAR), without forcing
    providers to meet excessive compliance burdens, while maintaining
    essential worker protections. The proposal allows this option only when
    care directly from VA or from a non-VA provider with a FAR-based
    agreement in place is not feasibly available. Already, we have seen
    certain nursing homes not renew their agreements with VA because of the
    excessive compliance burdens, and as a result, veterans are forced to
    find new nursing home facilities for residence.
             VA further requests your support for our efforts to recruit
    and retain the very best clinical professionals. These include, for
    example, flexibility for the Federal work period requirement, which is
    inconsistent with private sector medicine, and special pay authority to
    help VA recruit and retain the best talent possible to lead our
    hospitals and healthcare networks.
        4.  Special Legislation for VA's West Los Angeles Campus: VA has
    requested legislation to provide enhanced use leasing authority that is
    necessary to implement the Master Plan for our West Los Angeles Campus.
    That plan represents a significant and positive step for veterans in
    the Greater West Los Angeles area, especially those who are most in
    need. We appreciate the Committee's hearing in December 2015 on
    legislation to implement that Master Plan, and VA urges your support
    for expedited consideration of this bill to secure enactment of it in
    this session of Congress. Enactment of the legislation will allow us to
    move forward and get positive results for the area's veterans after
    years of debate in the community and court action. This bill would
    reflect the settlement of that litigation, and truly be a win-win for
    veterans and the community. I believe this is a game-changing piece of
    legislation as it highlights the opportunities that are possible when
    VA works in partnership with the community.
        5.  Overhaul the Claims Appeals Process: As mentioned earlier, VA
    needs legislation that sets out structural reforms that will allow VBA
    and the Board to provide veterans with the timely, fair, and quality
    appeals decisions they deserve thereby addressing the growing inventory
    of appeals.

        Lastly, let me again remind everyone that the vast majority of VA
    employees are hard workers who do the right thing for veterans every
    day. However, we need your assistance in supporting the cultural change
    we are trying to drive. We are working to change the culture of VA from
    one of rules, fear, and reprisals to one of principles, hope, and
    gratitude. We need all stakeholders in this transformation to embrace
    this cultural transformation, including Congress. In fact, I think
    Congress, above all, recognizes the policy window we have at hand and
    must have the courage to make the type of changes it is asking VA and
    our employees to make. Congress can only put veterans first by caring
    for those who serve veterans.
        Our dedicated VA employees, if given the right tools, training, and
    support, can and go out of their way to provide the best care possible
    to our veterans and their families.
                                    closing
        VA exists to serve veterans. We have spent the last year and a half
    working to find new and better ways to provide high quality care and
    administer benefits effectively and efficiently through responsible use
    of taxpayer dollars. We will continue to face enormous challenges, and
    this budget request will provide the resources needed to continue the
    transformation of this Department.
        This budget and associated legislative proposals will allow us to
    streamline care for veterans and improve access by addressing existing
    gaps, develop a simplified appeals process, further the progress we
    have made to eliminate the VBA claims backlog and end veteran
    homelessness, and improve our cyber security posture to protect veteran
    and employee data. It will also allow us to continue implementing MyVA
    to guide overall improvements to VA's culture, processes, and
    capabilities.
        I have pledged that VA will 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. I am proud to continue
    this work and recognize there is much left to be done. We have made
    great strides and are grateful for the support of Congress through this
    transformation.
        Thank you for the opportunity to appear before you today and for
    your continued steadfast support of veterans. We look forward to your
    questions.

                HINES VAMC SCHEDULING MANIPULATION INVESTIGATION

        Senator Kirk. Let me start the questions here, and say, Mr.
    Secretary, Ms. Germaine Clarno is a social worker at the VA
    hospital in Hines, Illinois. She has been calling for the VA to
    fix failures at the hospital for years.
        I introduced you to Germaine in Chicago in January of 2015
    and again in my office on April 21, so you know her. It was 11
    months after I asked your predecessor, General Shinseki, to
    investigate the allegations of Ms. Clarno at the Veterans
    Hospital in Hines similar to the scandal at the Phoenix VA, all
    to acquire bonuses and promotions.
        This is why I called for the resignation of Joan Ricard,
    the person who led the Hines VA, and then she retired.
        Fourteen months after my call to General Shinseki on July
    20, 2015, your chief of staff, Rob Nabors, concluded that the
    Inspector General investigation had ``thoroughly addressed the
    concerns of the complainant Germaine Clarno'' as summary number
    one. In response, both Germaine and the Office of Special
    Counsel (OSC) asked for the full Inspector General
    investigation report. That was 7 months ago.
        Summary number two of the Inspector General investigation
    on Hines' scheduling manipulation also came from the Inspector
    General on September 8. And in response, 2 weeks ago, the OSC
    wrote President Obama on the Hines investigation that the
    report was ``incomplete'' and ``not responsive,'' did not
    respond to the whistleblower's concerns raised and ``did not
    meet the statutory requirements,'' and was, ``not responsive to
    the serious allegations of significant wait times and delays in
    the veterans' access at Hines.'' It also said, ``it
    demonstrated hostility'' toward Ms. Clarno apparently for
    having spoken publicly, as well as an attempt to minimize her
    allegations.
        Again, summary number three was released, but not a report
    with the VA's instructions for change.
        Secretary McDonald, the VA-MilCon section of the funding
    bill of the omnibus did require all ``work products'' to be
    transmitted to the Appropriations Committee. I would ask you if
    you have brought this full report, and I would like you to
    bring the full report to the subcommittee as required by law,
    which would really help Ms. Baldwin on the candy factory at
    Tomah to get the complete Inspector General report, as required
    by law. I have also discussed this with our ranking member, Mr.
    Tester.
        Secretary McDonald. Mr. Chairman, we want all of the
    Inspector General reports to be released. In fact, as you
    properly pointed out, I have met with Ms. Clarno on numerous
    occasions. We appreciate her coming forward and describing what
    was wrong at Hines.
        As you properly pointed out, these investigations occurred
    in the middle of 2014 before I was confirmed. The President has
    nominated a new Inspector General, and we would like the Senate
    to immediately confirm that new Inspector General, Mike Missal,
    because we have a lot of work to do with the Inspector General
    to get these reports out.
        Also, in the letter that you referenced from the Inspector
    General, if you read the next paragraph, the Inspector General
    says that she is optimistic that this new Inspector General
    will conduct more thorough investigations in a more appropriate
    and comprehensive direction for the Department.
        Our Deputy Secretary is digging into all of these issues
    and sorting out the differences in opinion between the
    Inspector General report and between the Office of Special
    Counsel. We are working with both parties to do that. As soon
    as we are done doing that, we will get back to [you]
    immediately.
        But again, I just want to say we appreciate Ms. Clarno
    pointing these things out.
        Senator Kirk. She is sitting right behind you there.
        Let's keep going. Mr. Tester.
        Senator Tester. Thank you.

                         INSPECTOR GENERAL CONFIRMATION

        Just very quickly, Secretary McDonald, what you are saying
    is that if Mike Missal can get confirmed, you could get that
    information to us quicker?
        Secretary McDonald. Yes, sir. I think we have been short-
    staffed at the Inspector General since the Inspector General
    retired.
        Senator Tester. So it is important. I believe he is cleared
    on our side and so if, Mr. Chairman, if you and the other
    members of this subcommittee can make that plea to your caucus
    to take off the hold so we can get him confirmed, it could make
    a big difference.
        I think it is important we get this report. I think we need
    to get the good information on this report and get it as soon
    as possible, so I support the chairman's efforts here, but you
    guys need the tools to be able to do that. So please help.

                    BETTER CARE IN THE COMMUNITY LEGISLATION

        As I said in my opening, I am working on a bipartisan piece
    of legislation, a number of issues including provider
    agreements, spending flexibility that will allow you to provide
    better care in the community in a timely manner.
        Can I get a commitment from you, Mr. Secretary, that you
    will help get this bill across the finish line, particularly
    with the VA Committee?
        Secretary McDonald. Yes, sir. I believe we are doing that
    Tuesday.
        Senator Tester. Would you agree that if we do not get that
    bill done, that it could have a dramatic impact or continue the
    kind of impacts we are having on veterans right now with
    Choice?
        Secretary McDonald. Yes, sir. One of the reasons our
    service is so bad with a third-party administrator, like Health
    Net, is resolved in this bill.
        Senator Tester. Okay, good. That is good. Thank you for
    that.

                           2018 ADVANCE APPROPRIATION

        Last week, when Dr. Shulkin was here, we questioned him
    about a gaping hole in the fiscal year 2018 advance
    appropriations for medical care. You are going to get a second
    bite at this apple, but this is going to be a big bite.
        My understanding is the VA's future costs for all hires
    under the Choice Act is $1.3 billion and the future costs for
    leases and activation is about $318 million. None of these
    costs have been built into that 2018 advance request. Is that
    correct?
        Secretary McDonald. Yes, sir.
        Senator Tester. Okay. So on top of that, between the Choice
    Act funds and discretionary appropriations, I think you are
    planning on spending about $12 billion on Care in the Community
    in fiscal year 2017. Your head is nodding, so I assume that is
    correct.
        But in 2018, the advance appropriations request for Care in
    the Community is about $9.4 billion. I hope you can track these
    numbers. You know them. That is almost a $3 billion reduction,
    and Choice funding will probably be exhausted by then. How are
    you going to make up the difference?
        Secretary McDonald. I think, again, you mentioned the
    second bite idea, but I think the issue here, Senator Tester,
    is we have to know what we are actually going to provide before
    we can cost it out. That is why Tuesday's hearing with the
    authorizing committee is so important, because if we can deal
    with your bill, your consolidation bill, consolidation of Care
    in the Community from the seven different methods to one, we
    will know exactly how to cost it out.
        But as you know, there are choices within that bill, there
    are choices available, so we are waiting to see what the
    authorizers authorize. Then we will know exactly what the cost
    will be.
        Senator Tester. So you know, and I think you probably know
    this, the nondefense discretionary cap is going to be $3
    billion lower than it is this year, so we are going to get a
    double whammy off this thing, if you know what I mean.
        So we look forward to making sure we do not have a
    shortfall in your monies.

                           SES EXECUTIVES TO TITLE 38

        Mr. Secretary, you put forth a proposal that would allow
    the VA to move all of its senior executives to title 38. Can
    you explain how this move will impact the accountability at
    your Department?
        Secretary McDonald. The idea of moving our Senior Executive
    Service staff to title 38 was to help us recruit, because we
    would have direct hiring authority. It was to help us pay more
    competitively. Most of our medical center directors make less
    than 50 percent of what they can get from the private sector,
    because they are Readjustment Counseling Service (RCS)
    employees.
        It would also have the appeal authority for disciplinary
    actions within the Department, so I would be the appellate
    authority rather than the Merit Systems Protection Board
    (MSPB).
        In working within the executive branch, we have come to the
    point of view that that is appropriate for medical people in
    the Veterans Health Administration (VHA), but there is some
    pause whether or not we should apply that it people in the
    [Veterans] Benefits Administration.
        Senator Tester. Would it make a difference in
    accountability?
        Secretary McDonald. We are coming up with a proposal, which
    we will share with you on Tuesday, that would make a difference
    in accountability, yes, sir.

                      SIMPLIFIED APPEALS PROCESS PROPOSAL

        Senator Tester. Okay. You put forth a proposal, very
    quickly, on the appeals process.
        Secretary McDonald. Yes, we have.
        Senator Tester. Have you contacted the Veterans Service
    Organizations (VSOs) on that proposal?
        Secretary McDonald. We have had people locked in the room
    this week, including Veterans Service Organizations, AHF
    members, working on the proposal.
        Senator Tester. So you cannot tell me whether they support
    it or not at this point in time?
        Secretary McDonald. I think it is safe to say that they
    support most of the elements in the proposal. I think the most
    difficult element in that proposal is freezing the form 9,
    which would cause a veteran to reapply.
        Senator Tester. All right. Thank you.
        Thank you, Mr. Chairman.
        Senator Kirk. Ms. Collins.
        Senator Collins. Thank you, Mr. Chairman.

                         ACCESS RECEIVED CLOSER TO HOME

        Mr. Secretary, welcome. We have discussed many times the
    ARCH (Access Received Closer to Home) program, which exists in
    northern Maine, which is one of the five pilot sites across the
    country. This program, as you well know, allows veterans in
    rural areas to receive exceptionally high-quality care close to
    home, close to their families, and when they need it.
        It has a 90 percent patient satisfaction rate. And
    according to the VA's own figures, the average cost per veteran
    in Maine using the ARCH program is less than the average cost
    for the VHA direct care.
        This is a program that has been very well-received. It has
    been extremely well-operated. And it contrasts sharply with the
    experience that Maine veterans have had with the Choice program
    where fewer than 50 percent of eligible Choice program patients
    in Maine have received the appointments they need when they
    need it. And the contractor chosen by the VA, Health Net, has
    performed very poorly in my State.
        Given the huge success of the ARCH program and how happy
    our veterans are with it, and how cost effective it is, I do
    not understand the resistance of the VA to preserving the
    program.
        I hear all of this discussion of folding ARCH into the
    Choice program. To me, ARCH ought to be the model for the
    Choice program. ARCH is working, working well. The Choice
    program is not working well.
        So will you consider extending the ARCH program in its
    current form, so that we are not taking a program that is
    working well and breaking it by folding it into a program that
    is not working well?
        Secretary McDonald. Senator Collins, the new program that
    we are talking about, taking the seven different ways of
    achieving care in the community, including ARCH, and
    consolidating them into one is not consolidating them into the
    old Choice program. It is creating a whole new program that
    takes the benefits, the things we learned from the ARCH pilot,
    and folds them into a wholly new program that provides care in
    the community in one way with one reimbursement rate.
        So I think we should look at the bill Senator Tester has
    authored and others in our authorization committee have all
    have authored as a wholly new program that will take everything
    we have learned from Choice and from ARCH and actually
    consolidate it in a new program that will make things easier
    for veterans and make things easier for our employees.
        David, would you like to comment?
        Dr. Shulkin. Senator Collins, I think you are accurate. The
    ARCH program predated Choice. It has worked extremely well.
        As you know, it is a relatively small number of veterans. I
    think in the State of Maine, it is about 1,400 veterans. It is
    pretty small.
        So that idea of expanding the ARCH program to be this
    consolidated program is one that we have looked at. But the
    cost of that would be extraordinary because, as you know, ARCH
    was meant to get veterans access in rural areas, in areas where
    there are provider shortages. So we tend to have a
    reimbursement rate for providers that would be really
    unsustainable for the rest of the country.
        So we are trying to preserve what has worked in ARCH in
    this new Veterans Choice program.
        Senator Collins. Well, let me just point out that the
    hospital, Cary Medical Center, that is administering the ARCH
    program is paid at Medicare reimbursement rates. And according
    to the VA's own figures, the average cost per veteran in Maine
    using ARCH is $2,708.70--a pretty precise number--which is less
    than the VHA direct care.
        So my concern is that you are going to cause disruption in
    a program that has been cost-effective and has worked very
    well. That is what I am really worried about.
        I just cannot overstate how satisfied the veterans are with
    this program.
        My time has expired, and I know we have a vote. I have an
    important question on the opioid problem and the prescriptions
    that are prescribed by the VA. The risk of death by accidental
    overdose among patients at the VA facilities is nearly twice
    that of nonveterans, so I would ask to submit that question and
    others for the record.
        Thank you.
        Senator Kirk. I think since we have a vote that has just
    been called, we will take a short recess.
        [Recess.]
        Senator Murkowski [presiding]. At this time, I will turn to
    Senator Hoeven.

                        VETERANS CHOICE IMPROVEMENT ACT

        Senator Hoeven. Thank you, Madam Chairman.
        Mr. Secretary, good to have you here.
        We need to improve the Veterans Choice Act. That is why I
    have worked with Senator Burr and others to introduce the
    Veterans Choice Improvement Act. We are looking to combine that
    with the work that the VA Committee has already done, which
    includes legislation that I have crafted relative to long-term
    care and in-home care, combine that with healthcare.
        We are looking to bring all this together and move it as
    soon as we can. You and I have talked about this.
        Secretary McDonald. Yes, we have.
        Senator Hoeven. But this provides the important flexibility
    so that you can not only provide quality institutional care
    within the VA for veterans that want to access that, but also
    so that we make the Veterans Choice Act work.
        We have a big problem with these third-party service
    providers, like Health Net, that are not providing quality
    service, and that is giving Veterans Choice a bad name.
        So we have an opportunity here to make this thing work, but
    we have to figure out how to do it. This legislation empowers
    you to do that.

                      CHOICE THIRD PARTY SERVICE PROVIDERS

        So what I would like you to respond to is how you intend to
    handle these third-party service providers.
        Secretary McDonald. Over time, I think what we need to do,
    and this is why a change in legislation is so important, is
    change the contractual relationship with third-party service
    providers.
        I think we can't outsource customer service. In my opinion,
    that was the big mistake with the original Choice Act. We
    basically just outsourced customer service to the third-party
    providers. So the third-party provider, we would literally just
    give the veteran a phone number to call. That is just not
    right.
        I mean, we are in the customer service business. Our vision
    is to be the best customer service organization in government.
    We should not be outsourcing customer service.
        We have to change that relationship. That is part of what
    the new law, that we are very appreciative for, would do.
        David.
        Dr. Shulkin. Senator, the other thing I would say is, as
    you know, the Choice program, we had to bring it from
    conception to start in 90 days, so it was a very short time
    period. What we have been doing since then is we have been
    meeting with private industry, mostly the managed care industry
    and the outsourced industry, and getting the very best
    practices and the very best thoughts so that we can develop a
    request for proposal (RFP) when we go out under the new
    Veterans Choice program to have a much better program that is
    really state-of-the-art.
        Senator Hoeven. Then one of the keys is that this
    legislation will also give you the ability to provide that
    service directly. In other words, the VA itself work with
    veterans to go to private healthcare providers. I think that is
    a very important piece.
        For example, in our State, with the Fargo VA Health Care
    Center, which serves all of North Dakota and most of Minnesota,
    they have a very good reputation for providing quality care.
    You have a director there, Lavonne Liversage, who has people in
    her customer service area that can work with private healthcare
    providers, and she is willing to do that. Thank you for
    committing to come out and help us set that up.
        So, one, are you willing to let us set up that kind of
    approach to show that it works? I think you have already done
    it in Alaska, in Montana. We need to be able to do it.
        Then will you keep that option, which we allow you to do
    under the legislation? So if you want to go bid for a service
    provider and not work for somebody, well, that may be okay, but
    we can also do it directly so we can ensure that our veterans
    get that access to quality care, whether it is at the VA or
    through a private healthcare provider.
        Secretary McDonald. Senator, that is exactly what we want
    to do. We envision an optimized network of great providers all
    across the country, so that the issues that Senator Murkowski,
    for example, has raised in Alaska, where the Choice program cut
    out the Alaska Native Health system, we can get them back in,
    because they are great providers, they are great partners of
    us, and we would like to be able to develop that optimized
    system rather than only having one entrance door for the
    veterans, which is ``call this phone number.''
        So that is exactly what we have in mind. We appreciate your
    advocacy for it.
        Senator Hoeven. Than the other piece, if you would touch on
    for a minute, is we have worked to include legislation that
    enables nursing homes and other providers of long-term care,
    including in-home care, the ability to get provider status in a
    way that works for them without a lot of red tape and
    bureaucratic complications.

                            LONG-TERM AND HOME CARE

        Are you willing to support that and help us institute that?
    That is going to give veterans long-term care and in-home care
    in their communities. They can still go to the veteran center
    in their State if they want, but it gives them that access to
    care in the community, long-term care.
        Secretary McDonald. We are very much appreciative for you
    introducing that bill. We need these provider agreements. Right
    now, we have providers around the country who are refusing to
    do business with us because of the Federal Acquisition Rules,
    and the cost, the red tape that that adds to their operation.
    These small businesses can't afford that. We have, in some
    cases, where they are literally threatening to throw our
    veterans out of their homes because they do not want to do this
    red tape.
        So this bill would give us the ability to continue to do
    business with them and lessen the Federal Acquisition Rules red
    tape for them.
        Senator Hoeven. Thank you, Mr. Secretary.
        And, Dr. Shulkin, thank you as well. I appreciate it.
        Senator Murkowski. Thank you, Senator Hoeven.
        Senator Cassidy.

             VA HEALTHCARE STAFFING PRODUCTIVITY TO PRIVATE SECTOR

        Senator Cassidy. Dr. Shulkin and I had a conversation the
    other day regarding best practices, productivity, mental
    health. But again, kind of continuing on the theme that I speak
    to colleagues, physician colleagues, who work in VAs around the
    country, I am told by some that they may see two patients an
    hour.
        So I mentioned your staffing, some of your budget for
    staffing, and their productivity is far less than private
    practice. Now, that is important, because obviously the doc
    is--but I am sure it is true for the nurse practitioner (NP)
    and physician assistant (PA), et cetera.
        So first question is, to what degree is the physician
    productivity, the PA, the NP productivity, less than the
    private sector, both on an average per doc and then
    collectively across the system?
        And then I guess the next step would be, as we are talking
    about staffing, it seems like the better step would be to first
    get your systems down so that the physician is seeing 20 or 30
    patients a day instead of 14 patients a day, which I gather it
    is sometimes even less than that.
        So I will toss that out.
        Secretary McDonald. Senator Cassidy, we measure
    productivity, and we track it very closely. We use the common
    industry practice of relative value units (RVUs). Our
    productivity is up roughly 9 percent to 10 percent over the
    last year.
        I would argue that the reason, on an absolute level, we may
    seem more less productive is, one, our patients have much more
    complex situations.
        Senator Cassidy. Now can I challenge you a little bit on
    that?
        Secretary McDonald. Surely.
        Senator Cassidy. Because you are going to have in the mix
    the follow-up. I used to see very complex patients and so for
    one I would have booked out a 45-minute or even an hour visit,
    but it would later come back as a 5-minute visit or even my
    nurse walking in, giving the results, and me making sure there
    are no questions. So that we I could see four patients in an
    hour, five patients in an hour.
        Some I am going to challenge you little bit, because they
    are not very complex every single time.
        Secretary McDonald. I agree. They are not very complex
    every single time.
        Also, our providers work on a team basis in order to do a
    lot of alternative therapies that you would not see in the
    private sector.
        For example, if our primary care physician and our mental
    health professional discover the person has posttraumatic
    stress, they may then work with them to get them into
    acupuncture or yoga or some----
        Senator Cassidy. But that can only be--this limited time,
    so I am sorry to interrupt.
        That can only be 5 percent or even 10 percent of your
    patients. Most of it is going to be straightforward diabetes,
    hypertension, cholesterol check, lab check.
        Secretary McDonald. Well, when I look over the productivity
    numbers, this is what I see.
        David practices, so maybe he has a different point of view.
        Dr. Shulkin. Yes, Senator Cassidy. First of all, we do
    measure on RVUs. The Secretary is correct.
        We have increased productivity 10 percent over the past 2
    years. But now I have some greater insights into what you are
    talking about, since I now have begun to practice as an
    internist in the VA.
        I get 30 minutes for a follow-up, an hour for new patient.
    What you see when you practice in the VA is we are doing a much
    more comprehensive approach toward preventative care, screening
    for depression, screening for opioid abuse, substance abuse.
        So the care that we are delivering in the VA is one of the
    reasons why we have such better quality metrics than in the
    private sector.
        Senator Cassidy. So can I ask?
        Dr. Shulkin. Yes.
        Senator Cassidy. So again, just going to my field, which
    was managing ascites, for example, sometimes I would see them
    every 2 to 3 weeks, just to counsel on whether they are on a
    sodium restriction, checking creatinine, et cetera.
        If I got 30 minutes for every visit every 2 weeks, that
    would just gobble up my schedule.
        Dr. Shulkin. Right.

                          VA PATIENT SCHEDULING SYSTEM

        Senator Cassidy. So is it automatic, because in your GUI,
    by example, graphical user interface, it has a 30-minute block
    for everybody. So no matter the complexity, is it possible to
    make three patients each 10 minutes or is every single patient
    30 minutes?
        Dr. Shulkin. Our scheduling system is pretty fixed.
        Senator Cassidy. So that, I have to tell you, I used to do
    a pretty good job of preventive health, so I will not concede
    that you must be so wasteful with time in order to accomplish
    everything. Would you agree with that?
        Dr. Shulkin. I agree, and I do think it is worth us looking
    at that, having a brief visit.
        Senator Cassidy. I have to imagine that you could increase
    the productivity of your physicians dramatically in both number
    of patients per physician as well as--we do not need to hire
    more, by golly, we now have it, just by kind of allowing
    somebody to say this is really just a follow-up to make sure
    they are taking their fluid pills.
        Dr. Shulkin. I think we are looking at all of these things
    since access is our top priority. So you are identifying
    something that absolutely is worth looking at.
        I think the Secretary is also correct. What most of our VA
    doctors are saying to us is, give us some additional team-based
    help. Give us the RNs, the pharmacists, the social workers to
    be able to use our time more productively, to be able to get
    patients through faster. So it is going to be multifactorial.
        I can assure you, we are laser-focused on increasing access
    and productivity right now, and we are going to take your
    comments back about seeing whether we can adjust for some brief
    visits as well, because I agree with you. There are many
    patients who come back for simple reasons.
        Senator Cassidy. Okay. I yield back. Thank you.
        Senator Murkowski. Thank you, Senator Cassidy.
        I am now going to turn to Senator Baldwin, and I am going
    to pop out and go vote. I am sure we have other members who are
    coming back, so you may get more than 5 minutes.
        Senator Baldwin. [Presiding.] Oh, terrific. I hope everyone
    is as pleased as I am about that opportunity.
        Secretary McDonald. We are.

                  JASON SIMCAKOSKI MEMORIAL OPIOID SAFETY ACT

        Senator Baldwin. Especially since I want to start with a
    thank you, Mr. Secretary. I very much appreciate your support
    for the legislation that I drafted, along with Senator Capito.
        I know you are well-familiar with the Jason Simcakoski
    Memorial Opioid Safety Act that passed out of the Veterans'
    Affairs Committee late last year. I will also note that the
    chairman of this subcommittee, Ranking Member Tester, Senator
    Murray, are also cosponsors of the bill.
        We hope that this bill will pass the Senate and become law
    in short order, and I hope that we can count on you for your
    continued support and advocacy, Mr. Secretary, to help us move
    this across the finish line.
        Secretary McDonald. For sure. I believe that we have a
    leading role to play in American medicine in showing the way
    forward on reducing opioid use and also in preventing suicide.
        Senator Baldwin. I appreciate that very much.
        I want to turn your attention to an issue that has recently
    been subject of many media accounts in my State.
        When I am not the only person here, I will ask unanimous
    consent to add a number of articles for the record, or maybe I
    can just----
        Secretary McDonald. I think you are the chairwoman right
    now.
        Senator Baldwin. I am in charge, so I ask unanimous consent
    to enter several news articles in the record. We will hold the
    record open so somebody can object if they would like, but I
    doubt it.

        [The information follows: the requested information was not
    available at the time this publication went to print.]

           SOCIAL SECURITY NUMBERS AS IDENTIFIER TO VETERANS' RECORDS

        Senator Baldwin. Anyways, quite seriously, these articles
    detail an incident that occurred last year in Wisconsin when a
    VBA employee sent to VSOs at the Wisconsin Department of
    Veterans Affairs a spreadsheet that identified 638 veterans
    whose claims had been recently closed.
        Mr. Secretary, because the spreadsheet contained veterans'
    names and Social Security numbers, it was encrypted before
    transmission.
        I apologize [that I] am going to get into the weeds here,
    because I really want to make sure that the facts of what
    happened become a part of this record.
        Thereafter, one of the VSOs who received the spreadsheet
    from the VA forwarded that email to a number of State and
    county VSOs so that they could reach out and offer assistance
    to the veterans listed. Because the recipients were not
    affiliated with the VA and did not have VA email addresses to
    which encrypted emails could be sent, the VSO's message was
    sent unencrypted.
        In addition, although the VA security tools and procedures
    generally prevent the emailing of personally identifiable
    information without encryption, this transmission was
    nevertheless successful because the content did not meet the
    criteria that would have otherwise prevented transmission.
        One recipient included a veteran who is not a VSO or a
    representative of any of those listed individuals. That
    individual and his representative alerted the Wisconsin
    Department of Veterans Affairs, the media, and my office
    concerning the problem.
        Mr. Secretary, we can certainly have quite a back-and-forth
    about whether the VA bears some responsibility for what
    happened, but what I would like to see is the VA discontinue
    using Social Security numbers to identify individuals in all
    information systems. Until that is done, veterans will be at
    risk for identity theft and fraud.
        I am going to ask you, Mr. Secretary, what your thoughts
    are on this proposition.
        Secretary McDonald. I would have to take a closer look at
    it, but I can tell you that we take the disclosure of personal
    information very, very seriously, even to the point that we
    always fault on the side of the veteran. So this is a very
    unfortunate circumstance.
        I know there was an issue with our software that if the
    numbers were strung together without the hyphens, and you and I
    are both getting into the weeds on this, that it could go out,
    even though it is a Social Security number.
        Senator Baldwin. Right.
        Secretary McDonald. I know we have taken immediate steps to
    fix that, but going all the way to using some other mechanism
    other than Social Security numbers to identify an individual, I
    would have to get back to you on that.

        [The information follows:]

          [From Channel3000.com, WISC-TV, News 3, Madison, Wisconsin]

    _______________________________________________________________________

                               (By Adam Schrager)

        MADISON, Wis.--The Social Security numbers of Wisconsin veterans
    are being sent via email without encryption despite numerous Federal
    laws and U.S. Department of Veterans Affairs regulations requiring
    personally identifiable information be password-protected.
        It partly explains how a random Wisconsin veteran received an
    unsolicited email on April 1 with the Social Security numbers and
    disability claim information of hundreds of Wisconsin veterans. Since
    the Vietnam War, veterans' file numbers or disability claim numbers
    have been their Social Security numbers.
        ``I got up, was working at the computer and had an email from the
    Department of Veterans Affairs in Wisconsin. Not knowing what it was, I
    opened up the attachment and I panicked,'' the veteran said. ``It was
    nine-digit numbers. There were no hyphens. It wasn't like 111-11-111.
    It was nine numbers straight.''
        A Wisconsin Department of Veterans Affairs spokesperson said the
    software program, Ironport, which is used by the Federal VA,
    intentionally does not flag nine-digit numbers without dashes because
    of the concern that there would be too ``many false positives.'' She
    said nine-digit number sequences where dashes are used would require
    the person sending the email to encrypt it before it could be sent or
    to remove the nine-digit number sequence with the dashes.
        The veteran who received the email immediately notified the
    Wisconsin Department of Veterans Affairs of its error. He forwarded it,
    with the attachment, to his advocate, a retired colonel who used to
    work for the WDVA. Together, they notified numerous elected officials
    and the Federal VA about what had happened.
        ``There is absolutely no reason in the world for me to have this
    information,'' he said. ``We were told it was an error. We should not
    have received that.''
        The veteran and his advocate sent an email to the WDVA a week after
    the privacy breach stating they would assure the department that they
    ``(had) not forwarded this very confidential information.'' Kim
    Michalowski, who was in charge of the WDVA office that sent the email,
    thanked them in a follow-up email for their ``assurances.''
        However, any good will between the parties soured when the WDVA,
    and subsequently the Wisconsin Attorney General's Office, demanded the
    veteran and his advocate destroy all records associated with the
    privacy breach. The veteran responded in an email obtained by News 3
    that multiple groups were investigating the matter and he wanted to
    know if he was being asked to ``destroy evidence.''
        His answer came less than a month later when he and his advocate
    were sued in Dane County Circuit Court, in an effort to compel them to
    destroy all evidence of the email and the attachment. The veteran and
    his advocate sought legal counsel, paid to completely scrub their
    computers and were forced to sign an affidavit that they had no record
    any more of the email and its attachment before the lawsuit was
    subsequently dismissed.
        ``We were told we had to clean them off the computer, off all
    servers, off the cloud. My God, how do I do that? I can barely turn on
    a computer,'' said the veteran, who is remaining unidentified because
    he is fearful of further retaliation. ``I believe the process needs to
    be rectified. We have very dedicated veterans out there who need to
    have their privacy, their security, respected, and when this kind of
    information is released unsolicited, that's a travesty.''
        Nine days after the email was sent, WDVA Secretary John Scocos sent
    a note to the 637 veterans whose names and file numbers were in the
    attachment offering credit monitoring for a year and said the incident
    was a ``one-time disclosure to one unauthorized individual, who is a
    Veteran.'' However, less than a week after that, the department's own
    investigator determined that the data report inappropriately sent on
    April 1 had also been sent to ``unaccredited recipients.''
        ``The email filter, on the U.S. Department of Veterans Affairs
    computer network, which typically alerts the sender to this type of
    disclosure did not block the sensitive data in this instance,'' WDVA
    Communications Director Carla Vigue wrote in a statement emailed to
    News 3. ``When we contacted the USDVA Network Security Operations
    Center regarding this occurrence, they were already aware of the
    problem of certain emails making it past the filter.''
        News 3 has learned the April 1 incident is not an isolated one. On
    at least three other occasions (June 1, 2014, Oct. 1, 2014 and Dec. 1,
    2014), the same data report was also sent unredacted to ``unaccredited
    recipients,'' or as defined by the VA, people who are not trained to
    view such personally identifiable information. In fact, the
    administrator doing the internal investigation is himself
    ``unaccredited,'' according to USDVA documents, and thus, not supposed
    to look at personally identifiable information of Wisconsin veterans
    such as the material erroneously sent.
        Combined, the four data reports contained the disability claim
    numbers of nearly 2,000 Wisconsin veterans. An open records request to
    learn who received the emails from June 1, 2014-April 1, 2015, has not
    been answered by the WDVA.
        ``The WDVA has tightened protocols regarding privacy to safeguard
    sensitive information,'' Vigue wrote. ``We no longer share the report
    in question.''
        The internal investigation recommended Michalowski and his
    subordinate, Colin Overstreet, who actually sent the email, be
    suspended for one day. Both have since left their positions at the
    WDVA. Neither Michalowski nor Overstreet agreed to comment on what
    happened.
        Multiple requests for an on-camera interview with Scocos were
    denied. An on-camera interview with his deputy, Kathy Marschman, was
    canceled less than two hours before it was scheduled. In a meeting to
    discuss an interview, Marschman said protecting the personally
    identifiable information of Wisconsin veterans was one of the
    department's top priorities, but a review of the department's 2015-16
    strategic plan does not mention that.

        Secretary McDonald. Danny, do you have any?
        Mr. Pummill. The only thing I would add, Senator, is that
    when the list was sent out unencrypted, we should not have
    relied just on the computer software to catch the serial number
    sequences of the Social Security numbers and stop it. The
    individual should not have sent out an unencrypted list to
    anybody with Social Security numbers on it.
        We put extra emphasis on that. We check it constantly now,
    and we reiterate to everybody that it is personal
    responsibility. You do not rely on software. Under no
    circumstances do you send a Social Security number unencrypted.
        But we are looking at other ways of modifying it. As you
    know, the VA claim number is actually the Social Security
    number of the individual, and we are trying to find an
    alternate way of doing that.
        Senator Baldwin. I hope to work with you in that process.
    Other major governmental agencies have made the change from
    using Social Security numbers as identification numbers to
    alternatives. I understand the scope of that undertaking with
    agencies as large as the VA.
        But I just want you to know that we are drafting
    legislation and seeking your technical assistance. We are
    getting that technical assistance, and I hope that we can be
    partners in this effort as we move forward.
        Secretary McDonald. May I say, Senator, that one of the
    things we are undertaking right now is we do not have a single
    data backbone within VA, so if you are a veteran and you want
    to change your address, you have to do it in about eight
    different places, nine different places. One of the things we
    have taken on with our new Chief Information Officer (CIO),
    LaVerne Council, who is sitting behind me, is creating that
    single data backbone.
        That would be a great opportunity to move away from Social
    Security numbers, because we could put some other kind of
    identifier there, and it would simplify everything.
        Senator Baldwin. Well, I am all for seizing opportunity, so
    I look forward to continuing to work together on that.
        As temporary chair of the subcommittee, I would be happy to
    now recognize my colleague, Tom Udall, for questions.
        Senator Udall. Thank you very much, Senator Baldwin.
        Secretary McDonald, it is so good to see you here, and
    accompanied by Dr. Shulkin and Mr. Pummill. Thank you, all of
    you, for your service to the country and to our veterans. There
    could not be a more important task that we undertake.
        I fully respect the fact that you took this assignment, Mr.
    Secretary, at a difficult time during great publicity around a
    serious scandal. Working with Congress and additional
    resources, I think you have made some good progress, including
    yesterday's announcement that the VA is now able to fund care
    for all veterans with hepatitis C. That is a very, very welcome
    development there.
        We are going to have to keep that up to regain and maintain
    the trust of America's veterans, and I know that you all are
    committed to that.
        I was pleased to meet with you 2 weeks ago and talk about
    some of the issues with VA care in New Mexico.
        I am also glad to see that the VA budget justification
    specifically supports research and exposure to airborne
    particulate matter from burn pits. I look forward to an update
    on this research as it moves forward on how we can ensure
    veterans get the treatment they need for such exposure.
        The hearing today is important to discuss ways to improve
    the department and its services for veterans. The subcommittee,
    as you know, funds your agency and we ensure that this
    essential care is ready to support more veterans and, in
    particular, the new veterans who are coming home from
    Afghanistan and Iraq. We need to make sure that there is a
    seamless transition there.

                        RECRUITMENT OF VA MEDICAL STAFF

        Now, my first question, as you know, access is essential
    and can be particularly difficult in rural areas like New
    Mexico, partially due to problems with retaining practitioners.
    How does this budget aim to recruit talented medical staff in
    VA facilities? And what can be done, in your opinion, to either
    incentivize or streamline the process to hire new doctors and
    nurses?
        Secretary McDonald. Senator Udall, as you and I have talked
    before, having the providers in place is hugely important. I
    have been to over two dozen medical schools myself recruiting,
    and we have hired over 1,400 doctors since I have been
    Secretary.
        Nevertheless, I think we have a shortage of medical schools
    in this country and one of the things I think also, VA has a
    shortage of osteopathic doctors, which is a lost opportunity.
        So I would like David to talk about this. We are
    increasing, ramping up, our recruiting of osteopathic doctors
    and all kinds of doctors nationally in order to recruit them
    and get them to particularly operate in rural areas. We know
    that osteopathic doctors are more willing to live in rural
    areas. They are also more primary care than specialty, which is
    exactly what we need.
        Senator Udall. Dr. Shulkin, please proceed.
        Dr. Shulkin. Yes, thank you.
        I think the Secretary is right. We are looking to explore
    all avenues. The osteopathic physicians are certainly one
    avenue that we are really working hard at, making those
    relationships.
        We have added new residency affiliations with osteopathic
    medical schools, and we are looking to enhance those
    relationships. We now have about 300 osteopathic trainees in
    the VA healthcare system, and we are looking to expand that.
        In addition, because of your support through the Veterans
    Access, Choice and Accountability Act (VACAA) legislation, we
    have been able to expand residencies desperately needed for
    American medicine. When they have a great experience in the VA,
    they tend to want to stay in the VA healthcare system. So we
    are working on that.
        We are using educational debt reduction programs to help
    young physicians come in and stay in the VA. That is an
    incentive.
        And we are looking at our compensation pay tables to make
    sure that we are adjusting the pay, particularly for physicians
    that we have a very difficult time recruiting in rural areas.
        But any help that you could provide us, any ideas that you
    have that we are not exploring, particularly with primary care
    and mental health in rural areas, we really could use
    additional help.
        Senator Udall. I was very excited to hear that you all are
    working with medical schools and standing up medical schools
    and additional residencies, which really make a difference.
        As I have told you, we have a new osteopathic school that
    is about ready to get going in southern New Mexico that we hope
    you will work with.

                INSPECTOR GENERAL MISSAL NOMINATION FOR APPROVAL

        I want to shift over here to the Inspector General, because
    you have asked, and Senator Tester has said, and other others
    on the subcommittee have said, how important the Inspector
    General is. I would echo what the others have said.
        We have to approve your Inspector General. Nothing pushes
    that idea more than the fact of what happened as you were
    coming in.
        I worked in New Mexico, I had many people approaching me
    and saying there are problems going on, there are scheduling
    problems, there is this, there is that. We did not have the
    expertise to deal with it, but we were able to take the
    information, work with the complainants, get them into the
    Inspector General, and then have the Inspector General work
    with them and do a report to you. So I think we need to find a
    way.
        I would call on everybody to remove those holds and put the
    Inspector General in place for the Veterans Administration.
        How do we strengthen employee trust in the VA Office of
    Inspector General (OIG) operation?
        Secretary McDonald. One of the things we have done is
    through our Leaders Developing Leaders program, which I
    discussed earlier, we have taken our top 450 leaders offsite.
    We have done 3 days of training. Part of that training is in
    values and, importantly, in the values of the Inspector General
    and the role the Inspector General plays.
        We have also tried to partner with the Inspector General,
    so we are working together. So we are helping the Inspector
    General identify trouble spots, because during the time of
    change, like we are having with the transformation, the MyVA
    transformation, that can create challenges for us. So we want
    the Inspector General to be vigilant on where those challenges
    are.
        But just for an example, we have had over 110
    investigations just on scheduling alone. Of those 110-plus,
    only 77 have been completed. Of those 77, we have had roughly
    10 sites that have been discovered problematic, and 28
    individuals that we have had disciplinary action against.
        So it shows you the enormity of what we are talking about
    and also the fact that we are not done yet. We still have a lot
    of work to do.

                 ALBUQUERQUE VAMC MEDICAL INVESTIGATION REPORT

        Senator Udall. Secretary McDonald, just one more brief
    question. I understand that you recently signed off on a
    medical investigator report pertaining to the Albuquerque VA
    medical center. Can you provide the details of the three
    recommendations contained in the report? And when will you be
    able to share that report with me and release it publicly?
        Secretary McDonald. I think David has the report, Senator.
        Dr. Shulkin. This is concerning allegations with the
    appropriate use of using psychological testing, particularly
    for traumatic brain injuries. We have seen the initial draft
    report.
        We will be able to get you a specific date that it will be
    able to be released to you and make sure that we do that. In
    fact, I think we may be able to get you a redacted report even
    sooner than its official release date. We will be glad to do
    that.
        I will tell you that when I have reviewed the report, I am
    comfortable with the findings in terms of what was
    substantiated and what was not substantiated, so that we do not
    feel at VA that we need to take immediate action right now for
    patient safety, or else we would be taking that action.

        [The information follows: the requested information was not
    available at the time this publication went to print.]

        Senator Udall. Great. Thank you, Dr. Shulkin, very much.
        I will submit my additional questions for the record,
    because my time has expired. One is on 3-D printing and the
    other is on Comp and Pen, which I think you all have discussed
    very thoroughly here.
        I yield back, Mr. Chairman.
        Senator Kirk [presiding]. Thank you, Mr. Udall.

                           HINES VAMC WAIT TIMES DATA

        I requested all documents the VA had about wait time abuse
    at Hines VA. Did you bring those documents?
        Secretary McDonald. I do not have them with me, Senator,
    but we will get them to you.
        David may have them.
        Dr. Shulkin. Senator, I apologize. I did not see a specific
    request from you, but I do have the current wait times data at
    Hines VA that I will be glad to leave with you and share with
    you.
        Senator Kirk. Thank you.

                   HINES VAMC INSPECTOR GENERAL INVESTIGATION

        As I mentioned earlier, the Office of Special Counsel wrote
    to the President in defense of Germaine Clarno, that the
    Inspector General investigation was ``incomplete'' and ``failed
    to address the whistleblower's legitimate concern about access
    to care for mental health patients at Hines.''
        Let me tell you what this means in real life. My
    constituent Army specialist Tom Young served twice in Iraq with
    the 10th Mountain Division. At Hines, he asked for help with
    his posttraumatic stress disorder (PTSD). Two times, Hines
    turned Tom away because he was ``not suicidal.''
        After a suicide attempt, Tom went back to Hines, and they
    did not have room for him. Tom laid down on the Metra tracks in
    Prospect Heights on July 20, 2015.
        Two days after Tom killed himself, your own Office of
    Accountability Review said no additional investigation is
    required of Germaine's complaints that were addressed by the
    Inspector General. The Chief of Staff agreed.
        Another constituent of mine, Army veteran Michael Swan
    waited over a year to see a neurologist and a year to see an
    endocrinologist. Even worse, doctors gave him a clear
    colonoscopy report showing no polyps. He then went to a
    civilian doctor later, and the doctor found 130 polyps.
        The VA is saying that Germaine is wrong about Hines wait
    times in the mental health department, yet the Office of
    Special Counsel has criticized the Inspector General, saying it
    was ``willfully ignorant about the allegations.''
        Do you still stand by your Office of Accountability Review
    report on this matter?
        Secretary McDonald. First, I think it is important to say
    that any veteran suicide is unacceptable. We all take it deeply
    personally, all of us, myself, yourself, being veterans.
        So that is one of the reasons we held the suicide
    prevention summit that we held in February, to see what more we
    can do, what more can all us do as a community in order to
    eliminate the possibility of any veteran committing a suicide.
        It was March 8, just a couple days ago, where we put out a
    press release of the steps we are going to take in order to
    increase our suicide prevention program. It is incredibly
    important.
        Relative to mental health at Hines, the average wait time
    is 4.3 days. If that differs from what Germaine thinks it is, I
    would love to talk with her again.
        As I told you, we have our Office of Medical Inspector at
    Hines now, trying to reconcile the difference between the
    Inspector General reports and what the Office of Special
    Counsel found. Our Deputy Secretary is digging deeply into
    this. We will contact Germaine to get more information.

        [The information follows: the requested information was not
    available at the time this publication went to print.]

        Senator Kirk. Thank you.
        Secretary McDonald. Yes, sir.

                        VETERANS CRISIS LINE CONTRACTOR

        Senator Kirk. Let me follow up with Dr. David Shulkin.
        You were here last week and testified about the veterans'
    crisis line putting new people in charge. I wanted to get the
    name of the contractor who was handling that voicemail that
    dealt with my constituent. Do you have the name of that
    contractor?
        Dr. Shulkin. I do. Link2Health, with the number two,
    Link2Health.
        Senator Kirk. Link2Health. Are they still working on the
    veterans' crisis line?
        Dr. Shulkin. Yes, they are a backup contractor.
        Senator Kirk. And since they have messed up Tom's call, why
    are they still hired?
        Dr. Shulkin. Well, after the issue was discovered with the
    voicemails, we went back to them and we put in new stringent
    requirements as part of the contract, and they have been
    adhering to that. There is no voicemail being used today.
        Senator Kirk. Good. Thank you.
        Ms. Murkowski.

                            CHOICE PROGRAM IN ALASKA

        Senator Murkowski. Thank you, Chairman.
        Secretary, I think this is the first time that we have seen
    one another since you visited us in Alaska. I appreciate your
    willingness to be there in Wasilla at an open mike. I think you
    got it unfiltered from our veterans.
        You had some time since that visit to kind of process not
    only what Alaska veterans have said, but obviously veterans
    around the country.
        Dr. Shulkin was here before the subcommittee last week. We
    had an exchange back and forth about the failings of the Choice
    program in Alaska.
        Kind of the short sum of it was that Alaska VA healthcare
    system had long been resistant to sending patients to community
    facilities. They viewed that a better alternative was to send a
    vet all the way down south to Seattle rather than just using
    the services there at the Fairbanks Memorial.
        Your predecessor, Secretary Shinseki, worked with us. We
    really thought we were on the road to that model VA health
    system. Then the Phoenix incident comes around.
        Now, our veterans are saying very clearly, very loudly, our
    VA health system in Alaska is a mess. I referred to it last
    week as chaotic.
        Without exception--without exception--the veterans who are
    talking to me say we need to ditch Choice, we need to go back
    to what we had built where VA have identified community
    providers, wrote referrals, paid the bills. It was a system
    that worked.
        So I am concerned with the various proposals out there that
    we are seeing that ``consolidate community care.'' We do not
    want to participate in a national consolidated program. Those
    are all the buzzwords that just do not work for us.
        We need a program that is like what we had, which is
    custom-developed for the fact that we are noncontiguous; we are
    highly rural; we have a mismatch between demand for providers,
    which is very, very high, and the supply of providers, which
    is, unfortunately, terribly low; and because our medical
    community is really self-sustained within the State.
        So we do not want to be part of this consolidated national
    program. It scares me to death.
        Given what you heard in Alaska, given the conversations
    that we have with Dr. Shulkin, how can we do this? How can we
    draw outside the lines, because that is what we have to do with
    Alaska? That is what we have to do, I think you know--a way we
    can figure out this integrated system of VA health system that
    works for Alaska.
        I do not expect you to have the full answer in 2 minutes,
    but we need to have a better understanding as to where we are.
        Secretary McDonald. Believe it or not, I do have an answer,
    because as we put this program together, consolidated care,
    this network of great providers, it is with the learnings from
    Alaska as part of it.
        We need to have in that network the Alaska Native Health
    System. We need to return to all the things we had before
    Choice. The problem with Choice was it created--it was well-
    intentioned----
        Senator Murkowski. It was non-Choice.
        Secretary McDonald. It was non-Choice. It created a single
    entry point call to a third-party administrator where you had
    the veteran given a phone number. And I know that does not
    work. I mean, I was in Alaska. I went up to Point Hope to watch
    how the Alaskan health system worked.
        We need to get back to where we were in Alaska. This bill
    will do to that or we are not advocating it. So that certainly
    is our intention.
        Senator Murkowski. Well, okay. You are saying that this
    bill gets us there. I need to know that we are all in agreement
    as to where there is, because your words are good. I think you
    recognize it and you see. But again, part of the frustration
    that our veterans have right now is that they saw how we had
    corrected a system that had failed our vets for years.
        We built it, and then it was disassembled literally in a
    matter of months. So what I need to hear from you is that you
    agree that where we were before Choice came on is where we can
    get back to, and that is the direction that you want to take a.
        Secretary McDonald. That is certainly the direction I want
    to take it, and I am going to make sure that is built into any
    bill, because I thought the Alaska system, and it worked. It
    was Choice. It did provide choice.
        David, do you want to say anything?
        Dr. Shulkin. I think, very specifically, we want to bring
    back the customer service piece. The Alaska VA staff had a
    great relationship with Alaska providers, the Southcentral
    Foundation, as well as the Indian Health Service, and other
    Federal programs up there.
        We also had a great relationship with our veterans, and we
    want that back.
        Senator Murkowski. You know that you do not have it now.
        Dr. Shulkin. No, we are working hard to repair all the
    damage that happened up there, and there has been a done a lot
    of damage. There is no question. Both the Secretary and I heard
    this personally when we were up there.

                   VA HEALTHCARE OPERATIONAL ISSUES IN ALASKA

        Senator Murkowski. Let me ask about that then, just with
    regard to the day-to-day operations, because I think this
    really goes a long way to improving that relationship, to
    rebuilding that credibility.
        We are sitting with a situation where, once again, we do
    not have a permanent director. We have not had one since Susan
    Yeager left. I personally think it was a tragedy that we could
    not keep her. I do not think I have met the director of the
    Northwest network.
        We are having a difficult time with provider attrition. We
    are still having serious issues with provider recruitment.
        Again, it is not that we can't figure this out. The Alaska
    Native Health Care System has figured it out. They seem to be
    up to keeping folks. VA cannot keeping folks. I do not
    understand why.
        On a month-to-month basis, we do not know how well or how
    poorly our community-based outpatient clinics (CBOCs) are
    operating. We have a revolving door of providers there. We have
    low morale. We have fear of retaliation.
        So I hear what you are saying about what we have to do, but
    you have a whole series of strikes against you right now that
    are going to make it hard to ensure that that veteran feels
    like, okay, we are back on the right track.
        At a minimum, it seems to me that we have to have some kind
    of framework for measuring the performance of what is going on.
    I do not know on a month-to-month basis whether our local VA
    system is improving or whether it has just entirely collapsed.
        So is that something that you are considering and trying to
    put in place as you are looking at the bigger picture of how we
    get back to where we once were?
        Dr. Shulkin. Senator, I do not think that we have the time
    to go into the very specifics now. I will say that your
    assessment of the local VA situation is probably somewhat
    different than mine. We do have a lot of metrics. We have an
    excellent acting director, Linda Boyle, there. I would love to
    have you spend some time with her.
        Senator Murkowski. I know Linda well.
        Dr. Shulkin. Right. We have a search going on. We will name
    a permanent director in the very near future.
        I have been there. The care at the VA is truly excellent.
    We have statistics we will be glad to show you.
        The problem is our reputation has been hurt incredibly, and
    you are hearing it from the veterans because the Choice program
    has not worked. That is what we are working very, very hard
    right now to repair with TriWest. They have been working very
    hard with us to do that.
        But we need these legislative fixes to fix the program once
    and for all.
        So we will reach out to your staff and sit down and review
    those statistics with you. We have a lot of data on Alaska.
        Senator Murkowski. Well, I appreciate the statistics. But I
    also know that when I am sitting on an airplane with a veteran,
    he is not talking statistics. He is talking about his care. He
    is talking about how he was treated. He is talking about what
    it meant for him to basically feel like there was no response.
        So I appreciate statistics. I know that we have to be
    paying attention to that. But I need to make sure that we have
    providers that we can recruit and we can retain. I need to make
    sure that we have a level of responsiveness that is more than
    just scheduling an appointment. It is one thing to say, yes, I
    got an appointment. It is another thing to get the care that
    our veterans have clearly earned.
        So know that we need to stay very closely engaged with
    this, and we certainly intend to do that.
        Secretary McDonald. Senator, I would like to send over our
    team working on this new bill and make sure that we are
    aligned, that this will include the Alaska Native Health System
    and all the needs that we were able to address with the
    previous system.
        Senator Murkowski. I would look forward to sitting down
    with your folks. I appreciate that.
        Thank you, Mr. Chairman.
        Senator Kirk. I would like to ask Secretary McDonald for
    you, when you come to Chicago, to meet with Germaine and the
    Hines staff. I would like you to commit to that.
        Secretary McDonald. I have not been to Hines yet. I would
    like to go.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Kirk. Thank you.
        I think with that, we will thank our witnesses and thank my
    partner, Senator Tester.
        The hearing record will remain open until the close of next
    week. Members may submit questions at any time they want, until
    that time.
        [The following questions were not asked at the hearing, but
    were submitted to the Department of response subsequent to the
    hearing:]
                 Questions Submitted to Hon. Robert A. McDonald
                 Questions Submitted by Senator Mitch McConnell
        Question. I am very concerned about the recent reports of
    dysfunction and wrongdoing at the Cincinnati VA Medical Center,
    particularly as a number of my constituents rely on this facility for
    medical care. I understand the former VISN 10 Director recently
    resigned and the former Director of the Cincinnati facility has been
    removed. Are either of these individuals receiving benefits or
    salaries? What steps is the VA undertaking to correct the failures of
    leadership at this facility to ensure veterans are receiving the
    quality care they were promised and deserve?
        Answer. The previous Director of the Cincinnati VA Medical Center
    (VAMC), Linda D. Smith, retired December 2, 2014, and she receives
    retirement benefits commensurate with her service. John Gennaro became
    Director of the Cincinnati VAMC in July 2015, but he recently accepted
    an assignment to another facility as Director. Mr. Gennaro was not
    implicated in any allegation of wrong doing, and he currently receives
    a salary and benefits as appropriate to his new position. The current
    interim Director of the Cincinnati VAMC, Glenn Costie, is not
    implicated in any allegation of wrong doing.
        The former Director of Veterans Integrated Service Network 10, Jack
    Hetrick, retired February 24, 2016, and receives retirement benefits
    commensurate with his service.
        To ensure quality care for our Veterans through our leadership
    means sustainable accountability in them and our supervisors. We will
    recognize what is going well and provide coaching and re-training where
    improvements are necessary. We will train our leaders to lead and our
    employees to exceed expectations and if not take corrective action when
    it's warranted and supported by evidence.

        Question. Please provide an updated timeline for the design and
    construction phases of the Louisville VAMC--and ultimately for the
    facility's completion. This project was announced in 2006, and
    Kentucky's veterans have had to wait for too long to begin receiving
    care at this new facility.

        [Clerk's Note: The Department was unable to submit a response to
    this question.]

        Question. In June 2014, the VA Office of Inspector General (OIG)
    was directed to conduct investigations of more than 100 VA medical
    facilities regarding potential scheduling manipulation practices,
    including at Kentucky's Fort Knox and DuPont VA facilities. What is
    that status of the OIG investigations of these facilities, and when
    will they be completed? I would ask that you please share any available
    information with my office regarding the investigation findings at
    these Kentucky facilities.
        Answer. VA's OIG Report on Kentucky facilities was released, and
    summaries are provided below. VA's OIG did not find evidence to
    substantiate the allegations.

    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Louisville KY-2014-2890-DS-53..........  No intentional manipulation
                                              substantiated.

    ------------------------------------------------------------------------
    Louisville KY-2014-2890-DS-56..........  No intentional manipulation
                                              substantiated.

    ------------------------------------------------------------------------

        Question. As the VA continues with reform efforts to improve and
    expedite healthcare for our Nation's veterans, does the agency need any
    additional authority from Congress to remove bad actors from the VA?
        Answer. On March 23, 2016, the Secretary of Veterans Affairs
    submitted a legislative proposal to Congress entitled, ``Department of
    Veterans Affairs Accountability Enhancement Act.'' This legislation
    would provide VA with the authority it needs to recruit, compensate,
    appraise, and, when necessary, discipline career healthcare executives
    to ensure that VA can operate as a values-based, high performance
    organization.

        Question. Mental health issues remain a significant concern for
    many veterans. Are there any additional resources or authorities that
    the VA needs from Congress in order to provide effective treatment and
    care to veterans with mental health issues?
        Answer. With the current resources and authorities, VA continues to
    be the largest integrated healthcare system in the United States, with
    numerous reports validating the quality of mental healthcare services.
    This is the result of a long history of research, academic
    affiliations, and a deep commitment to training and recruitment. For
    example, Psychiatric Services, a peer-reviewed journal of the American
    Psychiatric Association, has published a report comparing the quality
    of mental healthcare provided by VA to Veterans with a comparable
    population in the private sector. According to the study, ``in every
    case, VA performance was superior to that of the private sector by more
    than 30 percent. Compared with individuals in private plans, Veterans
    with schizophrenia or major depression were more than twice as likely
    to receive appropriate initial medication treatment, and Veterans with
    depression were more than twice as likely to receive appropriate long-
    term treatment.'' \1\
    ---------------------------------------------------------------------------
        \1\ The Quality of Medication Treatment for Mental Disorders in the
    Department of Veterans Affairs and in Private-Sector Plans, Katherine
    E. Watkins, Brad Smith, Ayse Akincigil, Melony E. Sorbero, Susan
    Paddock, Abigail Woodroffe, Cecilia Huang, Stephen Crystal, and Harold
    Alan Pincus Psychiatric Services 2016 67:4, 391-396.
    ---------------------------------------------------------------------------
        Additional resources and authorities are needed from Congress in
    order to maintain this leadership and to provide effective treatment
    and care to Veterans with mental health problems. Among other
    priorities, VA needs to explore all potential resources for recruiting
    and retaining high caliber mental health providers, including the
    availability of education debt reduction programs (EDRP). Most
    recently, through the Clay Hunt Suicide Prevention for American
    Veterans Act, new EDRP efforts have focused on psychiatry, but no
    additional funding was provided. Further, such incentives need to be
    broadened to other clinical specialties in short supply including
    psychologists. Funding EDRPs is a partnership between VA Central Office
    and local VA healthcare facilities.
        The delivery of effective mental health treatment and care is best
    managed within a predictable funding strategy matched to the evolving
    needs of Veterans. Legislative requirements without additional
    appropriations not only limit VA's ability to act upon new mandates but
    also limit VA's ability to focus on/implement solutions in response to
    other key priorities. The Clay Hunt Act, as an example, did not provide
    additional appropriations while imposing multi-million dollar,
    multiyear obligations which could only be met by diverting funding from
    other important projects including suicide prevention projects.
        VA recognizes that to be effective in reducing Veteran suicide, VA
    must continue to develop Federal and community strategic collaborations
    that reach deep into all Veteran communities. To support this effort,
    VA stood up the Office of Suicide Prevention. The VA Suicide Prevention
    Office will create new inter-agency and public- private collaborations
    in order to reach each of our Nation's 22 million Veterans.
        VA recognizes Congress as an important partner in preventing
    suicides. This partnership will be supported by reoccurring
    congressional briefings on the Office of Suicide Prevention's plans of
    action. Congress' feedback as well as working with their local
    districts across the Nation will be crucial to this effort.
        VA practitioners report that they value being able to employ the
    full spectrum of their clinical skills and using interventions that are
    evidence based while practicing in VA. This requires an on-going
    requirement to train staff on emerging practices and create teams of
    providers to allow everyone to work within the scope of their unique
    area of competence. Over recent years, the addition of Peer Specialists
    has brought an additional resource to the healthcare team, has helped
    to combat any stigma associated with asking for mental healthcare, and
    has provided the opportunity to reach Veterans and Servicemembers (for
    example, Active Duty members seeking care after Military Sexual Trauma)
    who may otherwise go untreated.
        Ongoing training and education of VA mental health practitioners
    and Peer Specialists contributes to staff retention and helps to ensure
    that Veterans have access to state of the art mental healthcare.

        Question. It has been brought to my attention that some VA
    healthcare facilities lack the capability to provide care that meets
    the specific medical needs of female veterans. With this in mind, what
    efforts is the VA taking to ensure that all of its healthcare
    facilities are fully equipped to provide care to female veterans? What
    plans are being made in this regard for the new Louisville VA Medical
    Center?

        [Clerk's Note: The Department was unable to submit a response to
    this question.]

        Question. Many Kentucky veterans have expressed concerns that as
    the VA continues its efforts to reduce the agency's backlog of pending
    claims that there is now a growing backlog of claims appeals. What
    efforts is the VA taking to continue reducing the claims backlog while
    also ensuring that veterans' appeals are processed in a timely fashion?
    Does the VA need any additional authority from Congress to assist with
    the reduction in either of these backlogs?
        Answer. The Veterans Benefits Administration (VBA) has reduced the
    number of disability compensation claims pending more than 125 days by
    87 percent, from a peak of 611,000 in March 2013 to a historic low of
    79,004 claims, as of March 31, 2016. VBA's process and enhanced
    technology improvements, such as the Veterans Benefits Management
    System (VBMS) and the National Work Queue (NWQ), continue to provide
    increased efficiencies in the electronic claims process. By modernizing
    to an electronic claims processing system, VBA has increased claim
    productivity per claims processor by 25 percent since 2011 and medical
    issue productivity by 82 percent per claims processor since 2009. To
    continue this progress in 2017, VBA will build on the success of its
    transformation initiatives to further streamline and modernize the
    claims process with enhanced automation through VBMS, electronic
    workload management through NWQ, centralized mail, and the Veterans
    Claims Intake Program, which aims to further streamline and modernize
    the claims process.
        With VBA's completion of record-breaking numbers of disability
    rating claims in recent years, a concomitant increase in the volume of
    appeals resulted. While VBA continues to prioritize rating claims, it
    is also placing additional focus on appeals. VBA is grateful for the
    funding that allowed us to hire 100 appeals full-time equivalents (FTE)
    in fiscal year 2015 and 200 appeals FTEs in fiscal year 2016. As of
    February 2016, VBA has increased its appeals workforce from 1,195
    employees to over 1,490 employees and allocated $10 million in overtime
    funds to support the appellate workload. In addition, we are leveraging
    our technology initiatives in support of modernizing the appeals
    process. However, VA will not be able to provide Veterans with timely
    decisions on their appeals without legislative reform to streamline and
    modernize the current appeal system. In the President's budget for
    fiscal year 2017, VA requested resources to lower the pending inventory
    of appeals and proposed legislation to simplify the appeals process. VA
    is working closely with Veterans Service Organizations, other Veteran
    stakeholders, and Congressional staff to develop legislative proposals
    that would achieve our shared goal of timely and high quality appeal
    decisions.

        Question. In the summer of 2016, the Army is scheduled to begin
    construction of a new medical facility to replace the Ireland Army
    Community Hospital (IACH) at Fort Knox, Kentucky. Does the VA have a
    plan to replace the Fort Knox VA facility currently located at IACH to
    ensure area veterans see no disruption in care currently provided at
    this facility?
        Answer. This new VA Clinic is necessary as a result of the Army's
    plans to build a new healthcare facility to replace the existing
    Ireland Army Community Hospital (IRACH). Currently, VA occupies space,
    via a sharing agreement, within the existing IRACH. However, VA will be
    unable to co-locate services within the Army's new healthcare facility
    because DoD and VA are not allowed to share appropriated funds for
    joint facility projects. In order to continue to provide healthcare to
    Veterans, VA seeks to obtain a permit from the Army and then build a
    separate clinic adjacent to the new Army healthcare facility. VA
    contemplates that the VA Clinic will be physically connected to the new
    Army health facility, through a covered walkway or other structure, and
    offer primary care and mental health services to Veterans in the Fort
    Knox area.
        Current law does not allow for detailed planning/design,
    construction, or leasing of shared medical facilities that are not
    specifically under the jurisdiction of the Secretary, or for
    appropriated funds to be transferred to, or retained from, DoD or other
    Federal agencies for use in joint capital projects with VA. VA has
    proposed legislation (described in VA's fiscal year 2016 and fiscal
    year 2017 budget submissions and developed in consultation with DoD)
    that would provide for the inherent authority to do more detailed
    planning and design, leasing, and construction of joint facilities in
    an integrated manner. However, such legislation has not been enacted.
    Accordingly, VA lacks the authority to permit capital investment for
    shared medical facilities.
        Earlier this year, VA began negotiating a permit with the Army to
    provide VA with the necessary access to the Army's land for
    construction and occupancy. The permit is for four acres in order to
    accommodate the building footprint and necessary parking. The Army has
    taken the lead on drafting the permit. A design-build contract was
    awarded to the United States Army Corps of Engineers (USACOE) for the
    construction of the VA CBOC in September 2016. An Architectural-
    Engineer (A/E) firm is drafting the final request for proposal (RFP) to
    be completed by March 2017.

        Question. Substance abuse disorders, particularly opioids, continue
    to be a challenge for many veterans. What steps are being taken by the
    VA to improve education, monitoring and treatment of addiction? Does
    the VA need any additional authority from Congress to better coordinate
    care for veterans with substance abuse issues?
        Answer. Providing additional funding to expand recruitment
    incentives, such as loan repayment for psychiatrists and other mental
    health providers, would be helpful in attracting and retaining
    addiction treatment providers in what is currently a highly competitive
    market in many locations.
        Currently, VA is engaged in multiple efforts to improve education,
    identification and monitoring for substance use disorder (SUD) in
    patients, including those Veterans with chronic pain. VA has been
    working to expand access to evidence-based pharmacological and
    psychosocial addiction treatment services. This includes national
    training initiatives in evidence-based psychotherapies, such as
    cognitive behavioral therapy for substance use, motivational
    interviewing, and motivational enhancement therapy, which have been
    shown to effectively treat substance use disorders. VA, in concert with
    the 2011 Institute of Medicine (IOM) Report, Pain in America, and the
    National Pain Strategy from the Department of Health and Human Services
    (HHS), published in 2016, has recognized that improved competency in
    pain treatment across our health systems will lead to less reliance on
    opioid therapy, less exposure to the potential harms of opioid therapy,
    and better patient outcomes. To support these goals, VA and the
    Department of Defense (DoD) have developed the Joint Pain Education
    Program for primary care providers, a 31 module, evidence-based,
    comprehensive pain management curriculum that includes training in the
    appropriate screening for SUD in Veterans with chronic pain, and
    training in the safe use of opioids, including SUD monitoring.
        VA, as part of its Opioid Safety Initiative (OSI), has created
    multiple tools and processes to help clinicians identify SUD in
    Veterans being treated for chronic pain before and during treatment
    with opioid analgesics, to monitor their clinical outcomes, and ensure
    referral to appropriate treatment to reduce risk of activating SUD, or
    to manage SUD when it is co-morbid with chronic pain. Such tools and
    procedures include:
      --The Opioid Therapy Risk Report (OTRR), which provides detailed
            metrics on all the risks and strategies for managing risk for
            Veterans prescribed long-term opioid therapy for pain. The OTRR
            metrics are available in the clinic on the electronic medical
            record to support providers' efforts to monitor and manage
            risks when caring for patients with chronic pain who are
            prescribed long-term opioids.
      --VA developed predictive model-based clinician decision support
            tools which are available nationally. The Stratification Tool
            for Opioid Risk Mitigation tracks patients receiving opioid
            analgesics or with opioid use disorders, estimates risk of
            overdose or other adverse events, flags prior non-fatal
            overdose and suicide-related events, identifies personal risk
            factors, and suggests and tracks use of patient-tailored risk
            mitigation strategies and non-pharmacological pain treatments.
            Suggestions include a variety of guideline recommended
            strategies, including avoidance of high dose prescribing and
            risky medication combinations; timely follow-up; medication
            reconciliation; side-effect management; screening for substance
            use; ensuring mental health assessment and addiction treatment
            when needed; and use of physical therapy, Integrative Health,
            and behavioral therapies. It additionally provides information
            about patients' care providers and appointments to facilitate
            care coordination. The tool can be used to improve the safety
            of care for individual patients, or on a population level to
            facilitate systematic application of specific risk mitigation
            strategies to patients with the greatest risk of overdose or
            suicide-related events.
        The OSI Toolkit, developed and maintained by an interdisciplinary
    expert pain task force provides evidence-based guidance and trainings
    to help clinicians manage pain and opioids safely, including clinical
    guidance on safe medication tapering.
        Additionally, VA has been working to expand access to medication-
    assisted treatment (MAT) for opioid use disorders since fiscal year
    2000. VA efforts have included specific funding for hiring Addiction
    Medicine specialists to expand MAT access in under-served areas,
    clinical mentorship programs to support newly trained buprenorphine
    prescribers, a technical assistance program consisting of monthly
    webinars and email consultation, and on-going management monitoring,
    attention, and action planning regarding meeting needs for MAT
    services. As a result, VA has substantially expanded access to MAT from
    just under 12,000 patients (27 percent of those diagnosed with opioid
    use disorders (OUD)) in fiscal year 2010 to over 20,000 patients (30
    percent of those diagnosed with OUD) in fiscal year 2015. In the fourth
    quarter of fiscal year 2015, 35.4 percent of OUD patients received MAT
    (methadone, buprenorphine or injectable naltrexone). Prioritization of
    expansion of MAT services is encouraged by inclusion of MAT access
    measures on leadership performance plans and as part of VA's
    Psychotropic Drug Safety Initiative. VA continues to work to expand MAT
    access in locations with lower capacity or barriers to access to
    services (e.g. rurality), including through innovative models such as
    group practice visits and telemental health models.
        The Ryan Haight Online Pharmacy Consumer Protection Act generally
    requires that VA telehealth providers must have at least one in-person
    medical evaluation prior to prescribing controlled substances via
    telemedicine.
        This can be a problem when VA telehealth providers are not located
    close to the Veteran or when the Veteran's provider retires and another
    provider needs to begin furnishing care to the patient. We believe that
    the Drug Enforcement Administration could assist VA with this issue
    through the regulatory process; however, Congress could also assist by
    granting VA telehealth providers special authority to prescribe
    controlled substances without having conducted a prior in-person
    medical evaluation.
        We note that on July 22, 2016, the President signed into law the
    Comprehensive Addiction and Recovery Act of 2016 (Public Law 114-198),
    which authorizes a range of measures intended to combat opioid
    addiction and overdoses. We are working to implement the provisions of
    this law affecting VA. For example, the law requires all practitioners
    (including VA) to certify certain information when registering to
    prescribe controlled substances; VA must establish guidance that each
    provider must use the Opioid Therapy Risk Report tool before initiating
    opioid therapy to treat a patient; VA must require all employees
    responsible for prescribing opioids to receive education and training
    on pain management and safe prescribing practices; and Each VA medical
    facility director must identify and designate a pain management team of
    healthcare professionals. We will alert the Committees if we identify
    any legislative changes that are needed as a result of these new
    authorities.
                                     ______

                Questions Submitted by Senator Susan M. Collins
                dysfunctional continuum of care--choice program
        Question. I have heard from veterans, veteran services
    organizations, and VA officials that the Choice Program's continuum of
    care process is broken and dysfunctional.
        Last month, the entire Maine congressional delegation sent you a
    letter regarding the VA's incredibly flawed administration of the
    Choice Program in our State. According to the Department's own data,
    fewer than 50 percent of eligible Choice Program patients in Maine have
    received the appointments they need and have requested. The contractor
    chosen by the VA, Heath Net, has performed poorly. The process to
    correct many of the issues with Choice may take years. In the meantime,
    there are veterans in rural communities waiting to receive access to
    desperately needed care.
        Can you provide an assurance regarding when these veterans can
    expect to receive the appointments they need?
        Answer. VA is continuing to examine how VCP interacts with other VA
    health programs, including the delivery of direct care. In addition, VA
    is evaluating how it will adapt to a rapidly changing healthcare
    environment and how it will interact with other health providers and
    insurers. VA anticipates improving the delivery of community care
    through incremental improvements as outlined in the October 30, 2015,
    Plan to Consolidate Community Care Programs, building on certain
    provisions of the existing VCP. Implementation of these improvements
    requires balancing care provided at VA facilities and in the community,
    and addressing increasing healthcare costs. VA is committed to
    improving Veteran's health outcomes and experience, as well as
    maximizing the quality, efficiency, and sustainability of VA's health
    programs.
        Relevant to Maine Veterans, the ARCH program expired on August 7,
    2016. Veterans who participated in the ARCH program will continue to
    receive care under VCP and will be eligible for same services that ARCH
    offered. Veterans who did not previously participate in the ARCH must
    meet the Choice eligibility criteria (living 40 miles away from a VA
    facility with a full time primary care physician or a VA facility is
    not able to provide needed care within the wait time goals of the
    Department (30 days)). VCP should work to expand the availability of
    hospital care and medical services for eligible Veterans. We continue
    to work with our VCP contractor in Maine, HealthNet, to recruit more
    eligible VCP providers to improve VCP and help us ensure that all
    Veterans in Maine have access to care. VA has also begun using VCP
    Provider Agreements in Maine to improve our ability to get our Veterans
    timely appointments with eligible community care providers.
        Effective care coordination is critical to enabling a Veteran-
    centric care experience and supporting positive health outcomes through
    clear continuity of care and appropriate care and disease management.
    Under VA's ``Plan to Consolidate Community Care Programs,'' VA would
    define a clear process for transfer of medical documentation between VA
    and community providers when Veterans are referred into the community.
    VA would also establish objectives, roles, and processes for care
    coordination to enable a smooth Veteran experience across VA and
    community providers. The care coordination process would be centered on
    Veterans' relationships with their PCP. The PCP and supporting
    coordinator staff, whether at a VA facility or in the community, would
    assist Veterans with basic care coordination and patient navigation
    regarding scheduling appointments and seeking appropriate follow-up
    care. Veterans receiving care from community PCPs that do not have the
    capacity or capability to provide required coordination would be able
    to rely on VA for those services. For Veterans requiring more robust
    care coordination, regardless of whether they see a VA or community
    PCP, VA would provide programs for care and disease management and case
    management, as appropriate. This model would integrate with and utilize
    established and evolving care coordination models at VA, such as the
    Patient Aligned.
            va participation in prescription drug monitoring program
        Question. Prescription opioid and heroin abuse has reached epidemic
    proportions in our communities. A recent study estimated that nearly
    one million veterans are taking prescription opioids and more than half
    use them ``chronically'' or beyond 90 days. Although these
    prescriptions may be necessary to a patient's care, another study noted
    that the risk of death by accidental overdose among patients at
    Veterans Administration facilities is nearly twice that of the non-
    veteran population.
        Prescription drug monitoring programs, or ``PDMPs,'' are one of the
    most important tools available to confront and prevent prescription
    opioid abuse. These State systems can give doctors crucial information
    about a patient's prescription drug history, particularly when patients
    are receiving care both inside and outside of the VA system. VA
    healthcare providers have the authority to share information with State
    PDMPs, but they are not required to do so, and participation varies
    widely across the country. For example, in Maine the VA Health Care
    System reports to and queries the State PDMP, but this was a long time
    coming and is not the practice in all States.
        Has the VA considered establishing standards for PDMP use among
    prescribers and pharmacies in the VA system?
        Answer. Prescription opioid and heroin abuse has reached epidemic
    proportions in our communities. A recent study estimated that nearly
    one million veterans are taking prescription opioids and more than half
    use them ``chronically'' or beyond 90 days. Although these
    prescriptions may be necessary to a patient's care, another study noted
    that the risk of death by accidental overdose among patients at
    Veterans Administration facilities is nearly twice that of the non-
    veteran population.
        Prescription drug monitoring programs, or ``PDMPs,'' are one of the
    most important tools available to confront and prevent prescription
    opioid abuse. These State systems can give doctors crucial information
    about a patient's prescription drug history, particularly when patients
    are receiving care both inside and outside of the VA system. VA
    healthcare providers have the authority to share information with State
    PDMPs, but they are not required to do so, and participation varies
    widely across the country. For example, in Maine the VA Health Care
    System reports to and queries the State PDMP, but this was a long time
    coming and is not the practice in all States.

        Question. Has the VA considered establishing standards for PDMP use
    among prescribers and pharmacies in the VA system?
        Answer. The Veterans Health Administration (VHA) is developing a
    policy, VHA Directive, Querying State Prescription Drug Monitoring
    Programs, which will govern the querying of State PDMPs by VA
    providers. The policy will establish a minimum standard for querying
    PDMPs and ensure compliance with applicable Federal and State laws. It
    is anticipated that this policy will be published in mid-fiscal year
    2017.
        In addition, VA's Virtual Lifetime Electronic Record Health program
    continues to actively partner with the eHealth Exchange to encourage
    PDMPs to move towards the use of national standards for the exchange of
    opioid prescription information. As PDMPs adopt these national
    standards, it will enable a bi-directional exchange of information,
    improving access by VA and non-VA clinicians nationwide to prescription
    history for their patients in order to make the most appropriate and
    safe treatment decisions.
                                     ______

                  Questions Submitted by Senator Tammy Baldwin
           use of social security numbers as identifiers for veterans
        Question. Mr. Secretary, I would like to see VA discontinue using
    social security numbers to identify individuals in all VA information
    systems. Until that is done, veterans will be at risk for identity
    theft and fraud. What are your thoughts on this proposition? Is the VA
    currently working to discontinue the use of social security numbers to
    identify individuals? If not, why not? If the absence of a single data
    backbone at VA is a barrier to achieving the discontinuation of social
    security numbers, please provide a status update on the Department's
    efforts to create a single data backbone and what additional resources
    are needed to fully bring it online.
        Answer. VA's primary uses of Social Security Numbers (SSNs) are to:
    (1) locate Veterans and their dependents to ensure correct
    identification associated with the delivery of benefits and services,
    and (2) identify employees for employment-related record keeping. As
    mistaken identity in the delivery of healthcare can result in
    catastrophic and tragic outcomes, VA must ensure 100 percent accuracy
    in patient identification. Until such time when a comprehensive and
    equally accurate means to do this is established and implemented, the
    use of SSNs remains the single best means of ensuring patient
    identification. In addition, SSNs must be used if required by law or
    regulation, for purposes such as:
      --Background investigations;
      --Security checks for validation purposes, such as computer matching
            of records between government agencies; and
      --Support of unique identification.
        VA currently relies on the SSN to ensure that the correct records
    are obtained and utilized to determine eligibility for VA benefits such
    as compensation, disability, education, and rehabilitation. VA is
    required by law (38 U.S.C. 5103A) to request evidence from third
    parties on behalf of Veterans to support their claims. In these
    requests for evidence, VA must sufficiently identify the party for whom
    it is seeking information. Many entities holding Veterans' records,
    including the Department of Defense (DoD), other government agencies,
    and private parties, continue to utilize SSNs as a primary identifier.
    As such, VA will face substantial challenges in obtaining records from
    these entities on behalf of Veterans if precluded from identifying
    Veterans by their SSNs. This will negatively impact Veterans by
    delaying the time required to process their claims and possibly even
    preventing VA from obtaining the records needed to establish Veterans'
    eligibility to benefits.
        VA's success rate in matching records with other Federal and non-
    Federal organizations is over 85 percent when the SSN is available
    compared to 20 percent when the SSN is not used. VA providers will not
    have access to important outside care information and could order
    redundant tests, slow decisionmaking, or make incorrect and even
    harmful decisions when such data is unavailable. VA also participates
    in Health Information Exchanges with DoD, Walgreens, Kaiser Permanente,
    etc., and without the use of the SSN to positively identify the
    Veteran, critical health information will not be available leading to
    poor healthcare decisions and slower treatment.
        Elimination of SSN use is not solely a function of information
    technology (IT). The business processes used by the Veterans Health
    Administration (VHA), Veterans Benefits Administration, and other VA
    offices require a complete overhaul in how they establish absolute
    identity verification inside VA and most importantly outside of VA. IT
    solutions to eliminate SSN use can only occur after the integrated and
    comprehensive review of the prevalence and inter-connectedness of SSN
    use is complete.
    SSN Reduction Effort
        VA recognizes the growing threat posed by identity theft and the
    impact on Veterans, dependents and employees. In 2009, VA created and
    implemented the enterprise-wide Social Security Number Reduction (SSNR)
    effort, in response to the Office of Management and Budget Memorandum
    07-16, ``Safeguarding Against and Responding to the Breach of
    Personally Identifiable Information (May 2007). The key goal of the
    SSNR is to reduce or eliminate the unnecessary collection and use of
    SSNs as the Department's primary identifier, while maintaining the 100
    percent requirement for proper Veteran-Patient identification. For
    example:
      --VHA eliminated the use of SSNs on appointment letter correspondence
            and the Veterans Health Identification card.
      --VBA is currently evaluating the elimination of SSNs from
            correspondence.
      --The National Cemetery Administration has reviewed and reevaluated
            all of its forms requiring SSNs.
      --VA/DoD health information exchange Joint Legacy Viewer is using the
            Integration Control Number (ICN), Electronic Data Interchange
            Personal Identifier and other demographics for trait matching
            while phasing out use of the SSN.
      --VHA is utilizing a SSNR tool to collect VHA's SSN holdings data but
            it has limitations due to outdated technology. The Office of
            Information & Technology (OIT) is currently developing a new
            SSNR tool for VA wide use which is expected to be completed by
            September 2017.
    Master Veteran Index System
        As VA works to migrate away from the use of SSNs as the sole means
    of Veteran identification, OIT is collaborating with the Veterans
    Relationship Management Initiative to create the Master Veteran Index
    (MVI) system and require MVI integration for every VA system. MVI
    serves as the authoritative identity service within VA. MVI assigns an
    ICN, a unique identifier, for each Veteran. The ICN is a sequentially
    assigned, non-intelligent number that, in itself, does not provide any
    protected sensitive information about the Veteran-patient. The ICN is a
    means to accurately and securely track the individual and confirm their
    identification. ICNs conform to the American Society for Testing and
    Materials International standard for a universal healthcare identifier.
    MVI now has information on over 26 million Veterans and beneficiaries
    who have applied for healthcare. While additional work remains to fully
    extricate SSNs from Veteran identification, including re-engineered
    business processes and legacy system upgrades, programs like MVI have
    made significant progress towards the goal of SSN reduction.
    Conclusion
        VA has made considerable progress in implementing the SSN reduction
    initiative since the Office of Management and Budget's mandate in 2007.
    VA continues ongoing activities to either eliminate or reduce the use
    of SSN's with the goal to replace the SSN with an alternative primary
    identifier. The timeframe to implement an alternate primary identifier
    would be contingent upon laws, business needs, technology upgrades, and
    funding.
                     disposition of final reports on tomah
        Question. Mr. Secretary, I want to emphasize to you my belief that
    the Office of Accountability Review's investigation of accusations of
    widespread retaliation against whistleblowers and the culture of fear
    at the Tomah VA Medical Center must be made publically available so
    that veterans, VA employees and the American public are assured that
    the Department has uncovered and addressed the troubling events at the
    Tomah VA and related issues nationwide. The same goes for the outside
    clinical review, which is being done in follow-up to the Agency's
    initial review of the incidents at Tomah.
        I have previously discussed this issue with other members of the VA
    leadership team. I want to reiterate its importance to you as I did
    with the Deputy yesterday.
        When will VA make public its findings on these matters? I would
    like to know the timeline of VA's plan for transparency on:
      --The OAR investigation of accusations of widespread retaliation
            against whistleblowers and the culture of fear at the Tomah
            VAMC and
      --The outside clinical review.
        Answer. As of June 10, 2016, litigation is pending for one of the
    subjects of the Administrative Investigation Board (AIB). Consequently,
    we are currently unable to release the AIB Report.
                                 choice program
        Question. Mr. Secretary, in early February, I wrote to VA
    expressing my frustration with the Choice Program. Recently, there has
    been an alarming increase in the number of complaints from my
    constituents about their interactions with HealthNet, the 3rd Party
    Administrator for the area in which my constituents receive their
    healthcare services. For example, a veteran recently shared with me
    that after months of delay at VA, he was referred to the Choice Program
    and scheduled for surgery at a non-VA hospital. When he called to
    confirm the surgery with the hospital, it had no record of him or a
    surgery being scheduled for him. A month later he received the surgery
    at a different hospital. It is not uncommon for a veteran to call me
    after spending many frustrating hours on the phone trying to get an
    appointment scheduled.
        What is the Department doing to address these problems and improve
    the administration of and veteran experience with Choice?
        Answer. The purpose of the Veterans Choice Program (VCP) was to
    improve access to care for Veterans by allowing them to seek care in
    the community if they were eligible based on certain criteria specified
    in statute.
        Since the implementation of VCP on November 5, 2014, a number of
    amendments to the law and to VA's regulations have further expanded the
    number of Veterans eligible for VCP.
        VA recognizes there have been and continue to be challenges
    implementing VCP. We are identifying those challenges, implementing
    immediate fixes where we can, and building long-term solutions, as
    needed. VA's overarching plan for community care is to consolidate
    programs and simplify eligibility criteria and processes. VA is
    continuing to examine how VCP interacts with other VA health programs,
    including the delivery of direct care. In addition, VA is evaluating
    how it will adapt to a rapidly changing healthcare environment and how
    it will interact with other health providers and insurers. VA
    anticipates improving the delivery of community care through
    incremental improvements as outlined in the October 30, 2015, Plan to
    Consolidate Community Care Programs, building on certain provisions of
    the existing VCP. Implementation of these improvements requires
    balancing care provided at VA facilities and in the community, and
    addressing increasing healthcare costs. VA is committed to improving
    Veteran's health outcomes and experience, as well as maximizing the
    quality, efficiency, and sustainability of VA's health programs. While
    VA can implement some of the provisions from the Plan within the
    constraints of the current budget, there are certain provisions that
    require legislation. The Plan identified key legislative changes needed
    to consolidate the community care programs and standardize Veteran
    eligibility for community care. While some legislation has been
    proposed, none has been passed into law as of October 2016. Without the
    legislation identified in the Plan, full consolidation cannot be
    achieved.
        Among other improvements, the Veterans Health Administration (VHA)
    simplified the scheduling procedures and published a Deputy Under
    Secretary for Health for Operations and Management memorandum on June
    9, 2015, which revised procedures to require providers to write a
    return-to-clinic order and schedulers to enter the date contained in
    that order as the clinically indicated date (CID). This new process
    keeps future appointment decisionmaking with the provider and patient,
    rather than the scheduler. Associated training was provided to
    schedulers at that time. Additionally, VHA uses the ``scheduling
    trigger tool'' database to identify and notify facility leadership of
    scheduling irregularities. Of note, a root cause of scheduling errors
    is the highly manual, 30-year old scheduling software. VistA Scheduling
    Enhancement (VSE) has been deployed to about 30 clinics at 5 sites and
    is planned for national deployment starting in February 2017. VHA
    anticipates this new scheduling software will reduce the number of
    scheduling errors.
        Several initiatives are planned for VHA's ``Summer of Scheduling,''
    including:
      --National Rollout of VSE: The rollout of VSE will be achieved
            through a train the trainer or ``Super User'' approach,
            developing local experts to train others. The rollout began in
            May 2016 and is planned for national deployment starting in
            February 2017, with ongoing associated training.
      --Hire Right, Hire Fast: This project's goal is to ensure that every
            facility has the right number of Medical Support Assistants
            (MSA), with the right skills, who can provide the right
            experience for Veterans.
      --Own the Moment: VA knows that every interaction between an employee
            and a Veteran matters. This project reinforces the importance
            of serving with a focus on principles and values, empowering VA
            employees to pursue what's right for the Veteran when
            procedures serve to limit services.
      --Standardized MSA Onboarding/Training: New MSA onboarding would
            include a two-week training program that draws its curriculum
            from scheduling rules for technical training, customer
            experience training, and medical center policies. The
            onboarding will provide a mentor for all new MSAs and use the
            VSE ``Super Users'' model. Deployment will follow the national
            rollout of VSE.
           va graduate medical education (gme) expansion and staffing
        Question. The 2014 VA reform law was a comprehensive response to
    system-wide barriers to veterans' access to care. The law's Choice
    Program is an important step to remove those barriers through non-VA
    care, but it is no substitute for increasing the internal provider
    capacity of the VA. The VA reform law included a provision I authored
    to increase by 1,500 over 5 years the number of graduate medical
    education residency positions. Can you please provide me an update on
    VA's plans for ensuring that the goal of 1,500 positions is met?
        I note in your testimony that in fiscal year 2015, VHA hired 41,113
    employees, for a net increase of 13,940 healthcare staff. What did you
    do to bring all those people on board? Can you also please briefly
    discuss the Department's efforts to attract qualified physicians to VA
    to care for our veterans? I know that in Tomah, VA increased the pay
    available for hard-to-fill positions.
        Answer. To help reach the goal of up to 1,500 new residency
    positions, VA is conducting outreach and providing consultative
    services, and strategic and targeted funding to assist VA facilities
    and academic affiliates when addressing the complex and time intensive
    process of GME residency expansion. VHA has authorized more than 372
    new GME positions during the first 2 years of the 5 year program. In
    addition:
      --The accreditation process for each new GME residency program can
            take up to 3 years and is managed by our affiliated partners
            (the program sponsors).
      --Once a program is accredited, incremental expansion to full
            capacity takes 3 to 4 additional years.
      --Since VA residency positions are rotational and complementary to
            other clinical experiences, each full-time VA position is
            occupied by three to four unique medical residents; thus, the
            affiliated academic program sponsor must secure additional
            support for the remaining portion of the residency training
            outside of VA, and this support may be limited by existing
            Medicare program ``caps.''
        VA encourages all stakeholders, including Members of Congress
    working with community stakeholders, to use this unique opportunity to
    help Veterans improve access to care by identifying potential new
    affiliates, while VA facilities expand their existing VA GME programs
    or create new ones.
                                female veterans
        Question. Your request includes $372 million for Minor Construction
    and would provide funding for ongoing projects that renovate, expand
    and improve VA facilities, while increasing access for our veterans. My
    understanding is one emphasis for this funding will be projects that
    enhance women's health programs. Can you please describe these
    projects?
        I met with several veterans groups recently who were concerned with
    the lack of women healthcare professionals at VA. I support hiring more
    female healthcare professionals for the growing population of women
    veterans using VA primary care and mental healthcare clinics. Many
    women prefer receiving healthcare services from female providers. My
    understanding is that since 2003, women veterans' healthcare usage at
    VA facilities has increased by more than 100 percent. What is the
    Department doing to bring more female healthcare professionals to VA?
        Answer. Approximately 98 percent of Women's Health providers are
    women. VHA's NRP is available to provide recruitment support for
    Women's Health providers (Primary Care and Obstetrics/Gynecology).
    Also, there is no longer a prohibition on specifically targeting female
    PCPs to consider women's health careers in VHA through recruitment
    marketing/advertising.
        In addition to hiring, VHA is focused on training to enhance skills
    of its workforce to provide care for women Veterans. VHA has provided
    training to nearly 2500 primary and emergency room providers through a
    2\1/2\-day intensive review of gender specific women's healthcare that
    includes training hands-on training for breast and pelvic examination.
    The majority of providers trained are women. One hundred percent of
    Medical Centers and 90 percent of Community Based Outpatient Centers
    have Designated Women's Health Providers.
        VA provides a full range of services to women Veterans, including
    comprehensive primary care, gynecology care, maternity care, specialty
    care, and mental health services. VA has focused on improvement of its
    facilities to meet the needs of the growing numbers of women Veterans
    we serve.
        In order to review facilities in terms of accommodations for women
    Veterans, including required privacy and security, VHA has adopted
    Environment of Care (EoC) standards. These standards are now
    incorporated into a tablet-based EoC survey that is conducted monthly.
    The Women Veteran Program Manager is a member of the team conducting
    this survey monthly. All deficiencies detected must have a remediation
    plan attached, and the correction of these is tracked electronically.
    The EoC data is rolled up to the facility and the Veterans Integrated
    Services Network (VISN) monthly, and is the responsibility of the VISN
    Capital Asset Manager.
        When there is a need for remodeling or construction to enhance the
    facilities, the VISN submits plans through the Strategic Capital
    Investment Planning (SCIP) process. The SCIP Board reviews and
    prioritizes the requests, and projects that include the needs of women
    Veterans are given additional points in the prioritization. The VHA
    Office of Women's Health Services subject matter expert support for
    reviews related to women's needs within the SCIP process. This allows
    for input on the specific facility needs for accommodations for women
    Veterans.
        VA is proud of high quality healthcare for women Veterans. VA is on
    the forefront of information technology for women's health and is
    redesigning its electronic medical record to track breast and
    reproductive healthcare. Many women Veterans entering the VA system are
    of child-bearing age. VA provides full gynecological care, including
    maternity care, and 7 days of newborn care for all women Veterans
    either on-site or through Care in the Community, paid VA. VA is
    implementing a policy that requires maternity care coordinators at all
    VA medical centers that stay in contact with women during their
    pregnancies to support and coordinate their care.
        Quality measures show that women Veterans using VA healthcare are
    more likely to receive breast cancer and cervical cancer screening than
    women in private sector healthcare. VA also tracks quality of care by
    gender and, unlike other healthcare systems, has been able to reduce
    and eliminate gender disparities in important aspects of health
    screening, prevention, and chronic disease management. Some of our
    national accomplishments include the following:
      --VA completed two mobile applications for Women's Health, Caring for
            Women Veterans and Pre-Conception Care, that are available for
            providers in the community to download when caring for women
            Veteran patients.
      --Maternity Care Coordination Telephone Care Program provided care
            coordination services to over 2000 unique pregnant Veterans,
            over 20 percent of whom resided in rural zip codes.
      --Breast Care Registry to enhance care coordination of breast cancer
            screening and treatment for women Veterans.
      --Women Veterans Call Center (WVCC), created to contact women
            Veterans to inform them about eligible services. As of February
            2016, WVCC received 30,399 incoming calls and made 522,038
            outbound calls, successfully reaching 278,238 women Veterans.
      --An enhanced provision of care to women Veterans by focusing on the
            goal of developing Designated Women's Health Providers (DWHP)
            at every site where women access VA. One hundred percent of VA
            medical centers and 90 percent of VA community based outpatient
            clinics have DWHPs
      --The training of nearly 2,500 providers in women's health and
            continued training of additional providers to ensure that every
            woman Veteran has the opportunity to receive her primary care
            from a DWHP.
      --Pursuant to Veterans Access, Choice, and Accountability Act,
            expanding the eligibility for Veterans in need of mental
            healthcare due to military sexual trauma (MST) experiences of
            sexual assault or sexual harassment that occurred during their
            military service. All MST-related healthcare is provided
            without copayment requirements.
        VA is enhancing facilities, training healthcare staff, and
    improving access to services to meet the current and future healthcare
    needs of women Veterans.
    exempting copayment requirements for naloxone rescue kits and education
        Question. Please explain why the Department believes it is so
    critical to veteran patient safety to eliminate copayments for naloxone
    kits and related education.
        Answer. Patients who are told by their medical providers that they
    are at high-risk for drug overdose often still do not believe that
    overdose will happen to them. During efforts to implement the Overdose
    Education and Naloxone Kit program nationally in VA, numerous
    healthcare providers have reported that patients who are considered at
    high-risk for drug overdose have refused the naloxone kits because they
    do not believe they will need it and therefore, they are unwilling to
    pay the co-pay for the medication. We greatly appreciate Congress'
    enactment of provisions eliminating copayment requirements for
    medication and education and counseling for opioid antagonists in
    section 915 of the Comprehensive Addiction and Recovery Act of 2016
    (Public Law 114-198), and we are working to implement these changes as
    quickly as possible.

                              SUBCOMMITTEE RECESS

        Senator Kirk. The next meeting of the subcommittee will be
    on Thursday, April 7.
        We will stand adjourned. Thank you, Mr. Secretary.
        [Whereupon, at 12:20 p.m., Thursday, March 10, the
    subcommittee was recessed, to reconvene Thursday, April 7, at a
    time subject to the call of the Chair.]