[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.]