[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]



 
U.S. DEPARTMENT OF VETERANS AFFAIRS BUDGET REQUEST FOR FISCAL YEAR 2018

=======================================================================

                                HEARING

                               before the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                        WEDNESDAY, MAY 24, 2017

                               __________

                           Serial No. 115-14

                               __________

       Printed for the use of the Committee on Veterans' Affairs
       
       
       
       
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        Available via the World Wide Web: http://www.govinfo.gov
        
        
        
        
                              _________ 

                  U.S. GOVERNMENT PUBLISHING OFFICE
                   
 29-682                     WASHINGTON : 2018            
 
 
 
        
                     COMMITTEE ON VETERANS' AFFAIRS

                   DAVID P. ROE, Tennessee, Chairman

GUS M. BILIRAKIS, Florida, Vice-     TIM WALZ, Minnesota, Ranking 
    Chairman                             Member
MIKE COFFMAN, Colorado               MARK TAKANO, California
BRAD R. WENSTRUP, Ohio               JULIA BROWNLEY, California
AMATA COLEMAN RADEWAGEN, American    ANN M. KUSTER, New Hampshire
    Samoa                            BETO O'ROURKE, Texas
MIKE BOST, Illinois                  KATHLEEN RICE, New York
BRUCE POLIQUIN, Maine                J. LUIS CORREA, California
NEAL DUNN, Florida                   KILILI SABLAN, Northern Mariana 
JODEY ARRINGTON, Texas                   Islands
JOHN RUTHERFORD, Florida             ELIZABETH ESTY, Connecticut
CLAY HIGGINS, Louisiana              SCOTT PETERS, California
JACK BERGMAN, Michigan
JIM BANKS, Indiana
JENNIFFER GONZALEZ-COLON, Puerto 
    Rico
                       Jon Towers, Staff Director
                 Ray Kelley, Democratic Staff Director

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hearing records of the Committee on Veterans' Affairs are also 
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                            C O N T E N T S

                              ----------                              

                        Wednesday, May 24, 2017

                                                                   Page

U.S. Department Of Veterans Affairs Budget Request For Fiscal 
  Year 2018......................................................     1

                           OPENING STATEMENTS

Honorable David P. Roe, Chairman.................................     1
Honorable Timothy J. Walz, Ranking Member........................     3

                               WITNESSES

The Honorable David J. Shulkin M.D., Secretary, U.S. Department 
  of Veterans Affairs............................................     5
    Prepared Statement...........................................    38

        Accompanied by:

    Edward Murray, Acting Assistant Secretary for Management and 
        Chief Financial Officer, U.S. Department of Veterans 
        Affairs
    Mark Yow, Chief Financial Officer, Veterans Health 
        Administration, U.S. Department of Veterans Affairs
    James Manker, Acting Principal Deputy Under Secretary for 
        Benefits, Veterans Benefits Administration, U.S. 
        Department of Veterans Affairs
    Matthew Sullivan, Deputy Under Secretary for Finance and 
        Planning and Chief Financial Officer, National Cemetery 
        Administration, U.S. Department of Veterans Affairs
    Rob Thomas, Acting Assistant Secretary for Information and 
        Technology, U.S. Department of Veterans Affairs

                       STATEMENTS FOR THE RECORD

The American Legion..............................................    46
Veterans Of Foreign Wars Of The United States (VFW)..............    57
Disabled American Veterans (DAV).................................    60
Paralyzed Veterans of America (PVA)..............................    62
The Indepedent Budget for FY 18 and FY 19........................    67

                        QUESTIONS FOR THE RECORD

HVAC Majority Q&A................................................    80


U.S. DEPARTMENT OF VETERANS AFFAIRS BUDGET REQUEST FOR FISCAL YEAR 2018

                              ----------                              


                        Wednesday, May 24, 2017

            Committee on Veterans' Affairs,
                    U. S. House of Representatives,
                                                   Washington, D.C.
    The Committee met, pursuant to notice, at 10:30 a.m., in 
Room 334, Cannon House Office Building, Hon. Phil Roe [Chairman 
of the Committee] presiding.
    Present: Representatives Roe, Walz, Peters, Coffman, Etsy, 
Dunn, O'Rourke, Bergman, Sablan, Bilirakis, Kuster, Poliquin, 
Brownlee, Wenstrup, Takano, Rutherford, Correa, Banks, and 
Gonzalez-Colon.

          OPENING STATEMENT OF DAVID P. ROE, CHAIRMAN

    The Chairman. Committee will come to order. Before we start 
today I have a special guest here that I would like to 
introduce. Today is Student Youth Foster Day. We have foster 
students from around the country, and if you see people wearing 
these little pins they are shadowing a Congressman today. And I 
would like Timothy Dennis. Timothy has been here before, so 
Timothy if you would stand up and be recognized. I know you are 
here somewhere. Oh, here he is, back over here. So he is going 
to be with me today.
    And these are remarkable young people, overcome a lot of 
obstacles in their lives. So when you see them, have a chance 
to stop and just say a few words, and find out what their story 
is.
    Good morning, and I thank all of you all for being here 
today to discuss the President's Fiscal Year 2018 budget 
submission for the Department of Veterans Affairs. The budget 
is not about numbers, it is about priorities. Yesterday 
afternoon the President proposed a $6.4 billion increase in the 
VA's budget, which is reflective of the high priority that this 
administration places on serving our veterans.
    I applaud that action and share the feeling that second 
perhaps only to ensuring our ongoing national security, there 
is no greater priority we have than caring for those who have 
borne the burden of our battles. This budget was released less 
than 24 hours ago.
    In the coming weeks our Subcommittees will hold hearings to 
discuss different aspects of the budget in depth. However, 
during this morning's hearing I want to discuss several 
overarching issues that I believe are key to transforming the 
Department of Veterans Affairs into a nimble 21st century 
organization that our veterans can count on when they need it 
most.
    Before we dive into the budget, Mr. Secretary, I am 
extremely proud that the accountability legislation and appeals 
reform legislation have already passed the House's congress 
with wide-spread bipartisan support, and with your support I 
might add. I am grateful to you, Mr. Secretary, and your team 
for assisting the Committee in both of these efforts, and I 
look forward to continuing to work together to secure a swift 
passage of those measures in the Senate this summer.
    Our next priority is reforming the Choice Program, and in 
doing so, consolidating VA's many care and the community 
programs under a single, streamlined Choice umbrella. The 
President's budget demonstrates that Choice reform is an 
administration priority. While the Choice Program that Congress 
created three years ago has helped hundreds of thousands of 
veterans receive care, it is not without problems to say the 
least.
    Too many veterans still have trouble getting the care they 
need when they need it. Too many community providers and VA 
employees are left confused and frustrated by overly 
bureaucratic and opaque care in the community processes and 
procedures. Looking ahead, I want a Choice Program that 
empowers veteran patients to make decisions about where, and 
when, and how to use the health care benefits they have earned 
because, as a doctor, I can tell you that empowering patients 
leads to better outcomes, better quality, and more efficient 
and effective hospitals and clinics.
    Our veteran's service organization partners rightly note, 
when given the choice to receive care in the community many 
veterans choose to remain at VA. For those veterans we must 
examine ways to increase access, improve quality, and ensure an 
appropriate alignment of supply and demand. I look forward to 
working together to reform the Choice Program in the coming 
months.
    Mr. Secretary, in recent weeks you have noted that VA has a 
high number of vacant, underutilized buildings and properties 
across the country. Using VA's limited resources to secure and 
maintain empty or largely empty buildings and campuses while so 
many VA's capital asset projects go unfunded serves no veteran 
well.
    I look forward to working with the administration to 
examine how to right size VA's physical footprint, ensure 
taxpayer dollars are spent where our veterans need them the 
most, and explore innovative ways of ensuring that VA is able 
to maintain a presence in the community.
    Underlying all of these goals from achieving faster and 
more accurate appeals determinations to enhancing VA's 
relationships with community providers to make better decisions 
about where to locate clinics and hospitals is a need to 
modernize information technology systems. I cannot state too 
strongly the need for VA to invest wisely in IT programs and 
consider commercial off-the-shelf products that can be quickly 
put to use solving VA's biggest problems.
    Finally, I want to note that at 2:00 in this very room the 
Subcommittee on Oversight and Investigations, led by my friend 
General Bergman, will conduct a hearing on VA's financial 
management. That hearing cannot come at a better time.
    While I am grateful for the support and dedication that the 
administration has shown to our veterans by requesting a multi-
billion dollar increase in VA's budget, we must continue to 
seek ways for VA to be more responsible stewards of the 
taxpayer dollars.
    As long as I am Chairman of this Committee, I can assure 
you that I will continue to advocate for the resources VA needs 
to meet our Nation's obligations to veterans. However, simply 
increasing VA's bottom line year after year often results in 
more bureaucracy but seldom results in better services for our 
veterans.
    Throwing money at a problem rarely makes it go away. And 
when it does, a solution is often temporary. It is time for the 
VA to take a hard look at how resources are allocated and make 
some tough calls about how to best serve our veterans and their 
families in a budget environment that is not infinite.
    I want to help you with that, Mr. Secretary, and look 
forward to hearing today on how this Committee can help you 
transform the VA into a high performing organization I know it 
can be and I believe our veterans deserve. Interestingly, we 
just spent about an hour talking about these very things, Mr. 
Secretary. I think pretty much what I just said we just said an 
hour ago over at the Capital.
    With that, I will yield to Ranking Member Walz and any 
opening statement he might have.

      OPENING STATEMENT OF TIMOTHY J. WALZ, RANKING MEMBER

    Mr. Walz. Well, thank you, Mr. Chairman. And thank you, Mr. 
Secretary, it is good to see you again and I really look 
forward to hearing you dive deep into this. As the Chairman 
said, we have had it for about a day and we put some long hours 
combing through it. And I think all of us understand budgets 
are far more than fiscal documents; they are a reflection of 
our values.
    And I have to say at first blush, the six percent, that we 
are certainly glad that you did not receive the fate of almost 
every other agency, and that is a good thing. It looks like 
most of the gross and medical services and community care; we 
are obviously going to have questions on how that is going to 
be delivered.
    I am concerned, though, that demand on a system could very 
well increase in funding because veterans do not live in the 
bubble we talked about. They, and their families, and neighbors 
rely on services from many other Federal agencies. My fear is 
the budget fails to account for the demand on VA care when they 
are shifted over from other agencies and other programs. This 
could be changes or elimination of ACA or the impact the 
produced budget will have on HUD-VASH Program. I am interested 
to hear today on how you interpret what is going to happen with 
that shift.
    Yesterday, the House passed a bipartisan Claims Appeal 
Modernization Improvement Act. I congratulate the Chairman and 
the entire Committee on doing that. Really important, though, 
that the Veterans Benefit Administration and the Board of 
Veterans Appeal have the resources they need to implement that. 
They are receiving some cuts over there the way we are 
interpreting this, so we want to see that.
    Information technology down $215 million. Does not give me 
confidence that the VA will have what it needs to implement 
this streamlined claim process, but I rely on your expertise to 
help us with that.
    Also, I know this is a gorilla in this room but it is going 
to have addressed. The House passed the bipartisan bill of a 
one-year COLA without a round-down provision in it and to DIC 
benefits. Congress's intent was clear yesterday, and I believe 
what was a unanimous vote did not round-down those benefits.
    Veterans see the round-down as a pretty strong repudiation 
of what they feel they have earned. While rounding down to the 
nearest dollar may seem like an insignificant cut, it is going 
to be viewed that way. So I would be interested to hear how we 
talk about that.
    I am encouraged by the increase in non-reoccurring 
maintenance that will allow VA to not only maintain its 
infrastructure but begin the process of reducing that backlog. 
We had a talk yesterday, and I appreciate your insights on 
this, Mr. Secretary, I think you are on a leading edge of how 
we deal with our buildings, our infrastructure, our excess 
buildings, and everything else. And, again, looking forward to 
hearing you talk about how that is going to work, but I think 
that is a good start.
    I have concerns on the budget proposes to fund the Veterans 
Choice Program through mandatory spending, especially in light 
of repeated quests. Again, I am going to leave that open to 
have you and hear from you today, but it appears to lay the 
foundation for Choice 2.0 and increase non-VA care without a 
plan yet that has been given to us. So it is going to look like 
there is a pot of money, mandatory spending, how is it going to 
happen. Again, you are the expert on this and you have earned 
the trust of this Committee and veterans to be able to 
implement that.
    We have heard from veteran service organizations, I am 
going to talk about that in a little bit. I hope we are going 
to work together with them as this gets implemented. I know you 
value that relationship deeply. I can say that they are 
concerned, but they are also concerned in a positive way.
    On a positive note, we are hearing from veterans back home 
about the national veteran cemeteries and what it is, we had 
this talk yesterday. We are not going to rest until everything 
is covered, but I hear nothing but positive comments about our 
veteran cemeteries. I hear nothing but positive comments about 
those people whose loved ones are buried there. And yesterday 
listening to you, Mr. Secretary, have a vision for using those 
as a resource to educate our children and our citizens. Very 
inspiring, and we want to make sure you have the resources to 
do exactly that.
    Again on the surface, the request is not bad compared to 
other agencies. We will hear from you today. Again, I hope that 
bar is higher than that, but I am concerned, but I would leave 
it with asking you today, I know you are in your lane, I know 
you are in your expertise, but, again, I would ask you to give 
us some assurances that the bleed over from the cuts in the 
other agencies are not going to change some of these bottom 
line numbers and impact on veterans. And with that, once again, 
I thank you for your time, Mr. Secretary, and look forward to 
your testimony.
    I yield back. Thank you, Chairman.
    The Chairman. Thank you, Mr. Walz.
    As I mentioned earlier, we are honored to be joined this 
morning by the Honorable Dr. David Shulkin, Secretary to the 
Department of Veterans Affairs.
    Mr. Secretary, thank you so much for being here. The 
secretary is joined at the table by Edward Murray, the Acting 
Assistant Secretary for Management and Interim Chief Financial 
Officer; Mark Yow, the Chief Financial Officer for Veterans 
Health Administration; Mr. James Manker, the Acting Principal 
Deputy Under Secretary for Benefits; Matthew Sullivan, the 
Deputy Undersecretary for Finance and Planning and the Chief 
Financial Officer for the National Cemetery Administration; and 
Rob Thomas, the Acting Assistant Secretary for Information 
Technology. Thank all of you all for being here this morning.
    Mr. Secretary, you are now recognized for as much time as 
you may consume.

       STATEMENT OF THE HONORABLE DAVID J. SHULKIN, M.D.

    Secretary Shulkin. Great. Well, thank you. And thank you 
for introducing my team. You see I brought a lot of help 
because we are expecting some good, tough questions this 
morning.
    Well, besides good morning, Chairman Roe, and Ranking 
Member Walz, and other Members of the Committee, I want to 
thank you for the opportunity to be able to spend time talking 
about the President's 2018 budget and the 2019 advanced 
appropriations.
    I also owe additional thanks to the Committee. Yesterday, 
you all had a very busy day. Seven bills passed for veterans. 
Thank you, Chairman, for your leadership on that.
    The most important to us, although they are all important, 
is the appeals modernization. And so thank you very much, 
again, for the House's leadership on that important topic.
    I also want to thank you for providing VA the full 2017 
budget from the very start of the fiscal year. It has been a 
long time since that has happened and, again, thank you for 
your support on that.
    It really speaks well of the House and of the American 
people that despite the differences that we are seeing going on 
that we can come together and uphold our common commitment to 
caring for the Nation's veterans.
    I have submitted a written statement for the record. So, 
what I want to mention is that the President's 2018 budget 
reflects his strong personal commitment to the Nation's 
veterans providing the resources necessary to continuing our 
ongoing modernization of VA. It requests $186.5 billion for our 
VA, $104 billion of that is in mandatory funding, and $82.1 
billion in discretionary funding, for a total increase of $6.4 
billion, or 3.6 percent over 2017.
    It provides $3.5 billion in mandatory funds to continue the 
Veterans Choice Program, plus a 7.1 percent increase in 
discretionary funding for the Health Administration to improve 
patient access and timeliness of care.
    This is the budget that we need to achieve my five 
priorities as Secretary. Those five priorities are to provide 
veterans greater choice; to modernize our systems; to focus our 
resources more efficiently on what matters most to veterans; to 
improve the timeliness of services in both health 
administration and in disability and appeals; and then my 
single clinical priority on reducing veteran suicides.
    We are already taking bold steps on each of these 
priorities. Last month the President signed a re-authorization 
of the VACA legislation, ensuring that veterans can continue to 
get care from community providers. The President has also 
ordered the establishment of the VA accountability office, and 
we recently removed two medical center directors and three 
other senior executive service leaders. We will simply not 
tolerate employees who act counter to the values that put our 
veterans at risk.
    We now have same-day services for primary care and mental 
health at all of our medical centers. Veterans can now access 
wait time data for their local VA facilities by using an easy, 
online tool where they can access--where they can get access, 
wait time data, service or satisfaction data, and quality data. 
No other health system in the country has this type of 
transparency.
    A few months ago the Veterans Crisis Line had a rollover 
rate to our backup centers of more than 30 percent. Today that 
rate is less than 1 percent. We have launched a new predicative 
modeling tool called REACH VET that allows VA to provide 
proactive care to veterans who are at higher risk for suicide.
    And I have also recently announced the VA will provide 
emergency mental health care to former servicemembers with 
other-than-honorable discharges at all of our medical 
facilities. Thank you in particular to Representative Coffman, 
who really enlightened me onto this problem. We know that these 
veterans are at greater risk for suicide, and we are now caring 
for them wherever we can.
    These are just a few of the efforts that are under way 
already improving the lives of veterans, but to keep moving 
forward we need your help. We need Congress to help us realign 
our capital infrastructure as the Chairman mentioned, to 
dispose of property that we can't use to support veterans that 
are already being served.
    We need Congress to fund our IT modernization to keep our 
legacy systems from failing and to increase interoperability of 
electronic health records essential to any high performing 
integrated health care system. We are now also weighing options 
for adopting a commercial off-the-shelf system as an 
alternative to our legacy systems. And I have announced that I 
will make a decision on that before July 1st.
    It makes sense to go with an off-the-shelf system, but for 
that we are going to need additional support. And by off-the-
shelf I have said that what I am really considering is either 
an outsource effort to continue VistA or look at an off-the-
shelf, but I want to get VA out of the software development 
business.
    We need Congress to authorize the overhaul of our broken 
and failing claims appeal process, and yesterday you helped us 
in a long way towards that. We need the Senate to work with us 
on that as well. We worked closely with VSOs and other 
stakeholders to draft a proposal to modernize that system. And, 
again, we are waiting for the Senate to act.
    Most of all, we need Congress to ensure the continued 
success of Choice for veterans. More veterans are opting for 
Choice than ever before. Since January 1st of this year, we 
have authorized 8.2 million community care appointments. That 
is 2.6 million more than last year, or a 46 percent increase. 
Thus far this fiscal year we have authorized 18,000 more Choice 
appointments per business day than in fiscal year 2016.
    We have charted a course for modernization and are already 
moving forward, but we need your help to keep up with the 
Choice Program's growth, maintain our momentum, and make our 
community care plan a reality for all veterans for generations 
to come.
    Thank you, and we look forward to any questions you have 
about the budget today.

    [The prepared statement of David J. Shulkin, M.D. appears 
in the Appendix]

    The Chairman. Thank you, Mr. Secretary.
    I will yield myself five minutes and start the questioning.
    How does this request for continued Choice Program funding 
fit with your plans to reform and revamp the Choice Program?
    Secretary Shulkin. Well, first of all, as I said, we are 
very pleased to see the President's budget. We think it gives 
us the resources necessary to modernize the system. Part of 
modernizing the system is learning from our experience with 
Choice over the past three years, and all of you have been very 
active in giving us feedback that while we are seeing the 
Choice Program working better than it had before, it still is 
too complex a system.
    It is filled with bureaucracy, our veterans do not 
understand it, and our staff do not understand it. So with all 
that feedback and working with our VSOs and other veterans' 
groups, we have been working on redesigning a program that we 
want to present to all of you, in approximately ten days now, 
that we believe is going to work better for veterans.
    And the basic issue is that we want to change it from being 
an administrative system. That is, based upon being 40 miles 
away from a primary care provider and an administrative system 
based on 30 days or more of wait time, to being a clinical 
system that actually meets the clinical needs of the veterans 
that we serve. We believe we have a way of doing this and we 
believe that we will do it within the budget that the President 
has proposed.
    The Chairman. And I think we will obviously hold a hearing 
on Choice, but just very briefly, would it be where you are 
looking at a, basically a panel of physicians just like you 
would have in the private sector where you could use the best 
of the private world and the public world?
    Because there is not an unlimited group of providers out 
there. I mean, we are finding shortages on the private sector. 
I was riding into the office this morning and on Satellite 
Radio I heard my hospital system in Johnson City, Tennessee, 
that hospital system advertising for nurses--
    Secretary Shulkin. Wow.
    The Chairman [continued]. --here in Washington D.C. And so 
that is a problem nationwide. And so I think we are going to 
have to marry the best of both the VA world and the private 
sector to provide the quality care that you've talked about. Is 
that something you have in mind?
    Secretary Shulkin. Yeah. When we talk about a highly 
integrated, high performance system, it is exactly what we are 
talking about, Mr. Chairman. We believe that is what veterans 
want. They want a strong VA and it is our job to make sure that 
we are providing the best services in the VA, but the VA can't 
do it alone. And that is what we learned in the 2014 wait time 
crisis--that we have to work with the private sector.
    Right now about a third of all care in the VA is being 
delivered in the private sector. We want to make sure that when 
a veteran goes outside that they are getting the best care, and 
when they stay inside the VA, two-thirds of the time, they are 
getting the best care. So it is exactly what we are aiming for.
    The Chairman. You know, we had a little--it was not an 
October surprise, but we had a little surprise about a year-
and-a-half ago, and I guess one of the things the Committee 
will want to know, both sides of the aisle, can you assure the 
Committee that the additional funding requested in this budget 
submission that VA's care in the community programs will be 
fully funded for fiscal year 2018 and 2019? Because we had a 
big shortfall if you remember.
    Secretary Shulkin. Yeah. The problem that we had about 
almost two years ago, but, you know, it sort of was coming to 
the height 18 months ago, was that we actually had enough money 
in the community care program, it is just that they were in two 
separate checking accounts. And we needed to have your 
authority to mix the money in the checking accounts.
    We had run out of money in the traditional community care 
programs but the Choice Program we had not tapped a large 
amount of that money. What we are going to be seeking from you 
and working with you on is trying to have one pot of money for 
community care for veterans. And that way we simplify the 
system and we do not repeat the mistakes of history of 
essentially not spending correctly out of two checking 
accounts.
    The Chairman. One last question, very quickly. Does this 
budget request account for the new Office of Accountability and 
Whistleblower Protection as well as a director that will 
oversee the function of this office that was recently created 
by the President's executive order?
    Secretary Shulkin. Well, ahead of schedule because this is 
such a priority for me, we have named a director and we have 
started to put this office together. So we are not waiting 
until we have to do it, we are doing it proactively. I am 
trying to--there were no new funds authorized for this, so, of 
course, my biggest intent is to make sure that this office has 
a big impact, but also trying to do it to make sure the 
taxpayers are getting the best value. So I am trying to use it 
from current resources and not try to expend additional 
resources. But we will make sure that we fund this from within 
our current budget allocation.
    The Chairman. Good. My time has expired.
    Mr. Walz, you are recognized.
    Mr. Walz. We are going to defer on our side down to Mr. 
Peters. I do that out of empathy having occupied what is 
affectionately the Walz chair for ten years. So you may go 
first and we will work this way, Mr. Peters.
    Mr. Peters. How great is that? I look forward to this every 
hearing, so. This would not happen in every Committee, by the 
way. Thank you, Mr. Ranking Member.
    Thank you, Secretary Shulkin, for coming in to see us. In 
San Diego, as you know, we have I think over 230,000 veterans 
in our county, which is a rich population, and a terrific 
resource for us. We have a lot of issues like fixing the 
appeals process, which we are really happy with the progress on 
that. Addressing some schedule issues, getting the right 
medical staff at the VA, fixing the IT system, trying to 
reconcile the Department of Defense system with the Veterans' 
system.
    I wanted to ask a question, though, about homelessness 
because San Diego, I think, has I think the fifth largest 
population of homeless people in absolute numbers, and because 
of the nature of our population, so many of them are veterans.
    And as I think I mentioned to you yesterday, I am pleased 
to see the support for vouchers going forward. We have two 
issues in San Diego, where one is: we have very, very high 
rents and so it is hard for us to get the same bang for our 
buck as other communities for the vouchers. And let me be--you 
could address that a little bit.
    But, really, the other side of this is because, you know, 
all the effects for veterans are not on this budget, and in 
particular the Housing and Urban Development budget has been 
hammered, and the proposal is really to cut a lot of the 
support for homelessness.
    So while we see generally support, maybe even a little more 
support directly in the Veterans Affairs budget, I am concerned 
we are going to be playing wack-a-mole because of what is 
happening in the HUD budget. Can you address that? And how can 
we be assured that the rug is not really going to be taken out 
from underneath veterans on homelessness?
    Secretary Shulkin. Well, thank you for raising this as an 
issue. This is extremely important for us, and this is an area 
that we know that we are doing the right thing, that we are 
making progress on. We have reduced veteran's homelessness 
since 2010 by 46 percent. Last year we had the biggest impact 
ever; a 17 percent reduction in veteran's homelessness. And we 
continue to see community after community declare an end to 
chronic veteran homelessness.
    But there are parts of the country, California in 
particular, that continue to hold the majority of the issues. 
San Diego is a big area. LA, of course, is even bigger. This 
budget for VA not only continues to allow us to make the type 
of progress we did last year, but it actually adds $605 million 
more to allow us to accelerate our progress, and we are going 
to continue to do that.
    I think you are right. Many of the things that we do in VA 
require inter-agency cooperation. HUD has been a terrific 
partner for us. And, of course, we are concerned if they are 
going to be able to continue that. While I can't speak for the 
Department of Housing and Urban Development, I have reached out 
to Secretary Carson, and I have expressed my concern, as well.
    He has assured me that he remains committed to being the 
type of partner that HUD has in the past, that he understands 
that veterans are a very important part of the community and 
important to the American people. So I expect that we will see 
that same type of commitment that we have in the past from HUD.
    Mr. Peters. Well, again, I appreciate you reaching out to 
him and, obviously, we are happy to hear that. We will need to 
hear from him, also. And I think, frankly, if the budget 
proceeds for HUD the way it is, he is going to be pretty 
constrained.
    The other off-budget thing I mentioned too is, with respect 
to IT, we really ought to coordinate with the Department of 
Defense. They got a nice boost in the proposed budget. I think 
many of us think that that is appropriate. I served on the 
Armed Services for my first two terms. But the glaring mis-
match between the two systems, you know, a young person enlists 
when they are 18 and there is no reason why they can't continue 
on with the same--in the same continuum of system all the way 
until ultimately they pass away.
    And, finally, I want to mention, on the cemeteries; Mr. 
Walz mentioned how terrific that is. I just want to thank, 
personally, your staff for that open house we did at Miramar 
National Cemetery this past weekend. We are trying to let 
people know that Rosecrans is full; obviously, that is one of 
the jewels of the system.
    We have beautiful facility at Miramar, and I want to thank 
Brad Phillips and Rex Kern of your staff for helping us 
introduce that to the veteran community in San Diego, and we 
look forward to working with you on these and other issues 
throughout the year.
    Secretary Shulkin. Thank you for all those comments. First 
of all, our cemetery does not get the recognition that it 
deserves, so thank you for doing that. And as we approach 
Memorial Day, these are terrific places that have great 
ceremonies planned to honor those who have passed away and have 
served the country. So thank you for mentioning that, and we 
will make sure that they hear your acknowledgment of their 
appreciation.
    Mr. Peters. Thanks very much. Thank you.
    The Chairman. I thank the Gentleman for yielding.
    Mr. Coffman, you are recognized for five minutes.
    Mr. Coffman. Thank you, Mr. Chairman.
    Mr. Secretary, your announcement about providing urgent 
mental health services to former servicemembers with other than 
honorable discharges, does the VA intend to use the existing 
funds to provide this care to these veterans or does VA require 
additional funding?
    Secretary Shulkin. There is an additional cost to providing 
these services to members that had not previously received 
services, and we have quantified that. But I have said that 
there is no higher priority, and so we will do this within the 
funding that the President has proposed.
    I believe that you continue to advocate for broader service 
coverage, something that I support very much. But with that, 
there will be additional costs, and we would also appreciate 
consideration of additional appropriations for those services. 
But we are not going to let the fact that there are not 
additional monies right now prevent us from offering these 
services.
    Mr. Coffman. Thank you, Mr. Secretary. Mr. Secretary, on 
the construction side, obviously there were some significant 
problems in that area as noted in the construction project in 
the State of Colorado in Aurora in the VA replacement center 
there. Tell us about your path going forward and what lessons 
have you learned from that particular project?
    Secretary Shulkin. Well, you know, I think, again, you have 
been instrumental in highlighting that this project was just 
unacceptable and the cost overruns almost unexplainable. 
Fortunately, this is a project that will be completed, thanks 
again for your support, and it appears to be on time, and there 
will be no additional funds requested to complete this project.
    But we will never again have a project like that in VA. It 
just simply is irresponsible. We have changed our processes. Of 
course, as you know, the Corps of Army Engineers is now 
involved, and we have learned in root cause analyses why that 
project was such a cost overrun.
    In this budget we are not proposing any major construction 
projects like that. I think we have to think about doing 
business differently. Health care is changing, it is no 
longer--I think the Chairman makes this point, what used to 
require large, large buildings with in-patient capacity now are 
becoming far more ambulatory in nature.
    We recently had a project in Omaha, Nebraska, that we just 
announced, which is a new model for building, which is an 
ambulatory building that is a private/public partnership, 
actually allows for donations from the community, and builds a 
different standard. So I think that is the model we are going 
to want to look at going forward to get more value for veterans 
and taxpayers.
    Mr. Coffman. Mr. Secretary, you recently stated that VA has 
identified more than 430 vacant buildings and 735 underutilized 
buildings that costs the government $25 million a year. How do 
you intend to address the issue of unused VA facilities without 
greatly impacting veterans' access to health care?
    Secretary Shulkin. Well, the facilities that are vacant and 
underutilized are not currently taking care of veterans. They 
are either vacant buildings or they are being used for non-
clinical services like storing engineering equipment or other 
types of storage facilities.
    So we believe that these 1,100 facilities could essentially 
be consolidated or eliminated and not impact veteran care at 
all. In fact, be able to use the money that we are using to 
maintain them and heat them and put that money back into 
veteran services.
    Mr. Coffman. Thank you.
    Mr. Chairman, I yield back.
    The Chairman. I thank the gentleman for yielding.
    Ms. Esty, you are recognized for five minutes.
    Ms. Esty. Thank you, Mr. Chairman. Thank you, Ranking 
Member Walz. And, again, I want to thank the Secretary and his 
team for working so hard with us. And this Committee worked 
very hard and my Subcommittee Chairman, Mr. Bost. And I think 
we have a very good bill, not perfect, but a very good bill to 
pass on to the Senate and hopefully move across the finish 
line.
    But I really do want to emphasize that we are really not 
across the finish line until this bill is implemented. The 
appeals bill needs to be implemented. And I not only need your 
commitment, but I am a little concerned looking at the budget 
that those IT funds are actually cut. We are now establishing 
if this bill gets, as we hope, signed into law, we are going to 
have a new system. We are going to have three tiers.
    So, number one, how are we going to ensure we have the IT 
resources?
    Secretary Shulkin. Yeah.
    Ms. Esty. Number two, what are we going to do about how we 
track the legacy claims? So those are the first two I would 
like your thoughts on.
    Secretary Shulkin. Yeah. So thank you for asking those 
questions.
    First of all, the appeals legislation: very, very 
important. But I want to be clear; it solves the appeals issue 
going forward. It does not address the backlog, which is 
considerable. Today it takes a veteran, if they file an appeal, 
six years before they are going to get an answer, on average. 
So I want to make sure that everyone understands what we are 
solving and what we are not. We are solving going forward, but 
we still have a backlog issue.
    On the IT issue, what I think you are seeing in this budget 
is a recognition that we do not want to continue to ask for 
more money and invest more money in fixing broken systems. We 
are not done with IT. We are going to need to come back to you 
after I announce a direction by July 1st to be able to talk to 
you about what really needs to be done in modernizing our IT 
systems.
    So this budget, the one area that I will tell you that we 
have not yet accounted for is the modernization of the IT 
system. But we did not want to continue to keep on asking for 
more money, so you are seeing a reduction in IT services and 
that is the explanation.
    Ms. Esty. Thank you. That is an important clarification for 
us to understand that you expect to come back to us and, 
obviously, we are going to need procurement and reform to 
facilitate this process. So I hope when you get to that point 
we can work together on that.
    I am concerned because I am seeing a decrease in the 
funding on the research budget for medical and prosthetic 
research. The reason I flag that is because we know as a 
factual matter that our veterans are returning home now with 
more profound injuries than in the past. The research done by 
the VA is extraordinarily important for these veterans and, 
frankly, for all Americans because that research carries 
benefits for Americans more broadly.
    How can we be assured that veterans are continuing to 
receive the kind of support they need when that research 
component is getting cut?
    Secretary Shulkin. Well, I, you know, I am in agreement 
with you that the VA is the only organization whose research 
focuses solely on improving the well-being of veterans. And the 
research that VA has done over the years has led to not only 
important advances for veterans but for all Americans. And many 
of the things that we all rely upon came out of VA research.
    So I do not intend for this budget to be any type of 
messaging that VA research is not important, not critical; that 
we do want to continue to invest in this. We are working with 
our researchers right now to seek additional extramural funding 
to work with the NIH. I have spoken to Frances Collins about 
working closer to have our research programs work together, and 
we are seeking to make sure that our research program grows. 
But this budget shows some fiscal constraint on the area of 
research, and we will make sure and keep an eye on that to make 
sure this is a strong program.
    Ms. Esty. Thank you. I think that will be particularly 
important. And you and I have discussed before with the Deborah 
Sampson Act and needing to address women veteran specific 
issues, and if that funding is cut we have some risks there.
    The last thing I want to quickly flag is we have had some 
issues in the Hartford office in Connecticut with the VR&E, 
with the Vocational Rehabilitation and Employment Services. We 
are just--there is more demand than there is ability to 
accommodate. Love to get--work with you after this, and also to 
flag this may be an issue in other districts, too. We may not 
be alone. We want our veterans to get rehabilitated, we want 
them to be employed, and that is the wrong place we should be 
looking to cut because, in fact, that is what they deserve, 
that opportunity. So thank you.
    And I yield back.
    The Chairman. I thank the gentlelady for yielding.
    Dr. Dunn, you are recognized for five minutes.
    Mr. Dunn. Thank you very much, Mr. Chairman.
    Mr. Secretary, I see the VA funding for mental health has 
increased by $473 million from 2017, and that expands inpatient 
residential outpatient treatment. Does any of that additional 
funding include money geared towards research on traumatic 
brain injury and other psychological disorders like depression?
    Secretary Shulkin. Yeah. What you have noted is an increase 
in our discretionary funding. So that is on the clinical side. 
Our research allocation is different. We have over the past 
nine years increased our research funding for TBI and other 
brain injuries by about tenfold. We now have well over a 
hundred different research projects going on, on TBI, and this 
is one of the areas of focus.
    We just came back last week from a summit in Boston called 
the Brain Trust where we focused on not only VA but other 
Federal organizations and community organizations to enhance 
the research in TBI. And one of the real calls to action was to 
develop a bio marker so that we could track progress in TBI and 
post-traumatic stress in particular.
    Mr. Dunn. Thank you, I look forward to following that with 
you. Yesterday we passed 2288 in the House, and there is strong 
bipartisan for that and in the VSOs, but there is a concern 
that the veterans who are in the current appeals process rather 
than the new appeals process will languish, perhaps not get 
the--their appeals may be slowed down because of that. Can you 
address that concern?
    Secretary Shulkin. Yeah. I do not believe that the appeals 
will slow down. We are talking about now the backlog of 
appeals?
    Mr. Dunn. Yes. Yes, sir.
    Secretary Shulkin. I do not believe--
    Mr. Dunn. Current appeals.
    Secretary Shulkin. Yeah, current appeals. I do not believe 
that they will slow down, but I do not believe that they will 
particularly speed up either.
    Mr. Dunn. So that was my next question.
    Secretary Shulkin. Yeah. Yeah.
    Mr. Dunn. And you do not--can you say if we pass this 
current budget as proposed--
    Secretary Shulkin. Yes.
    Mr. Dunn [continued]. --does that address, to some degree, 
the delays that we are looking at?
    Secretary Shulkin. No. And I do not have good news for you 
on that. I think that it would take until, I believe, 2026 to--
with the current allocation of funds to be able to work off 
that backlog, and I think that is really too long.
    But I do not have a better answer for you right now on the 
backlog. Thanks to what you have done, and if the Senate passes 
that, we will have a fix going forward. But the backlog would 
take a new injection of funding to be able to hire more lawyers 
and more support staff--
    Mr. Dunn. Maybe we could change--
    Secretary Shulkin [continued]. --to work that off.
    Mr. Dunn [continued]. --the system instead. I mean, I do 
not know. It just seems--
    Secretary Shulkin. Well, I think we really do have to look 
at that.
    Mr. Dunn. We will work with you on that. I think you have 
some great ideas. Let me squeeze in one last question here. Can 
you tell us about your future plans to update the processing 
system for the post-911 GI Bill Rights, the Educational Rights, 
and what efforts were--could you just sort of streamline that 
because that system is really bogged down?
    Secretary Shulkin. Yeah. I am going to have Mr. Manker talk 
about that.
    Mr. Manker. So thank you for that question. The long term 
solution, as we call it, for Post-9/11 and Chapter 33, we are 
processing claims--we are reaching our strategic targets now 
with respect to processing claims. We have two times during the 
year, during the spring enrollment and the fall enrollment, 
where it slows down a little, but still we are hitting claims, 
supplemental claims, within about seven to eight days. And new 
claims--
    Mr. Dunn. That has not been my experience. I would love to 
work with your office on that.
    Mr. Manker. We would be delighted.
    Mr. Dunn. I am 60 days into a claim, so--
    Mr. Manker. Okay. Okay.
    Mr. Dunn [continued]. --we want to address that.
    Mr. Manker. Absolutely.
    Mr. Dunn. I think that--on the ground it feels like it is a 
lot longer.
    Mr. Manker. Yes, sir.
    Mr. Dunn. So, with that, Mr. Chairman, I yield back. Thank 
you.
    The Chairman. I thank the gentleman for yielding.
    Mr. O'Rourke, you are recognized.
    Mr. O'Rourke. Thank you, Mr. Chairman. Mr. Secretary, thank 
you for your service, especially in the time where we first got 
to know you as undersecretary for VHA and all the changes and 
improvements that you made in that time, and your commitment to 
working with us and improving care and service delivery to 
veterans in the short time that you have been secretary. And I 
am grateful to the President for making this selection, and for 
the Senate in confirming you unanimously.
    Let me take one of the best parts of your opening 
statement, which is the fact that you were the first secretary 
that I know of that has made suicide reduction and prevention a 
top priority. And the fact that you call it out and call it by 
its name is so incredibly important for us getting from what I 
think you have officially measured as 20 veteran suicides every 
single day in this country to a number that is far lower than 
that. Many of these are preventable deaths.
    I am grateful for the fact that you are now helping other 
than honorable discharged veterans in emergency situations. But 
if, as you say, there is no higher priority, and if this really 
is something that you want to make a difference on, that is 
absolutely not going to be enough.
    Let me give you these facts by context. From 2011 through 
2015, 13,283 veterans received an other than honorable 
discharge who had within the two years prior to separation, 
post-traumatic stress disorder, traumatic brain injury, or 
certain other conditions that could be associated with 
misconduct.
    Unless they are in an emergency situation--I am going to 
kill myself, I need some help--and they go to an emergency 
room, we are not helping them now. We are not giving them the 
preventative care that is going to ensure that we don't find 
ourselves, and that they don't find themselves, and their 
families don't find them in these kind of situations.
    So I urge you to do everything you can administratively, 
and I think you can do more. And I urge my colleagues to take 
the next step to build on what Mr. Coffman has done and support 
the Honoring Our Commitment Act that I introduced with Mr. Bost 
in the House, Mr. Peters, and then in the Senate, Mr. Murphy.
    I would like to get your comments on that and whether or 
not you are committed to serving all other than honorable 
discharged veterans who need that help from our country.
    Secretary Shulkin. Well, you know, if anything, 
Congressman, you have been consistent as an advocate on mental 
health and the fact that VA can do better. And you have usually 
been right-- maybe always been right on these issues.
    So I will take you up on your ask that I re-look at 
everything that we can do administratively. I felt like it was 
important to act quickly, and I felt that I had the authority 
to take the actions that I have. But if there is more that we 
can do, we will.
    I also appreciate you recognizing that your ability to 
legislate on this is extremely important and would assure that 
we have the authorities that we need to be able to do this. 
This is critically important, and this is a matter of saving 
lives. So we take it really seriously, and appreciate you 
continuing to be such a strong advocate.
    Mr. O'Rourke. Great. So we will both commit to pursuing 
this. You, administratively. You will take it as far as you 
can, that is what I hear. We have the responsibility to 
legislate that if you cannot get all the way there on your own 
through the administration.
    Secretary Shulkin. Yes.
    Mr. O'Rourke. And so I am asking my colleagues who are here 
today to join me on this, the Chairman to make this a priority, 
and make sure that we can move forward on this.
    Two other quick points. You clarified your commitment to 
purchasing a commercial off-the-shelf software. I think a lot 
of people perked up when you said that that could be 
interpreted to mean either what I think of a commercial off-
the-shelf system, which is a commercial off-the-shelf system, 
or more Vista just programmed by somebody outside of the VA.
    I really hope that it will be the former. That you will 
pick the best system, the best practices that are used in the 
best systems in the country instead of trying to build upon 
VistA, which you have acknowledged is an ancient antiquated 
system that, you know, costs us more to maintain than in the 
value that we get out of that.
    And the other point I would make, and this may be just my 
interpretation, is you said that you did not request more in IT 
spending because you do not yet have a plan. But it seems like 
we are requesting more for Choice spending without fully 
understanding how we are going to improve the Choice system. So 
I just commit to you, and I want to work with you to make sure 
that we have the controls in place to get better outcomes for 
Choice before we spend billions more on that process.
    So thank you for that. I am out of time. So may take your 
response on both of those for record. Thank you.
    Secretary Shulkin. Thanks.
    The Chairman. General Bergman, you are recognized for five 
minutes.
    Mr. Bergman. Thank you, Mr. Chairman, and Secretary 
Shulkin. I applaud you and the VA for your statement earlier 
about your decision to get out of the software development 
business. Thank you. That shows signs that the vision has a 
future.
    You have testified several times about the Medical 
Appointment Scheduling System, MASS, which is, you know, the 
VA's long term solution to scheduling issues. The MASS contract 
was initially awarded in August of 2015, then all work was 
suspended in early 2016. It was announced that it was being 
reactivated in January as a pilot at one site. Nothing has 
happened, no task orders have been awarded. Can you give us an 
update or explain what is happening with MASS?
    Secretary Shulkin. Yeah. So the VA actually has four 
different scheduling things going on right now. Our current 
scheduling system which is based off a DOS based system that 
most of our schedulers use. We have a home-grown system being 
rolled out called VSE, for Veterans Scheduling Enhancements. 
The MASS pilot at one site as you mentioned. And then recently, 
a new bill that was passed requiring that we pilot an off-the-
shelf scheduling system, and so we just awarded that contract.
    In terms of the MASS contract, an award will be announced. 
Mark, do you remember when that is?
    Mr. Yow. Soon.
    Secretary Shulkin. Okay. So in the next couple weeks to 
proceed forward with the pilot site, and a lot of pre-work has 
been done on that. But the MASS scheduling system was awarded 
because that is the most tested off-the-shelf system that is 
available, and so that is why we are proceeding with our pilot 
site.
    Mr. Bergman. Okay. Well, you know, it does not necessarily 
seem, because we have talked about the backlogs and delays, 
that I am not feeling the aggressive nature here of moving 
forward with getting a solution. You have got--went from three 
sites to one site. This is largely fixed costs in this 
piloting. Is there any reason that we cannot in surge, if you 
will? Bottom line is we have got time we can't recover but we 
can surge assets to develop data quicker. Is that a 
possibility? What am I missing?
    Secretary Shulkin. Well, the original plan with the MASS 
program was three pilots for $57 million. I did not believe 
that that was an appropriate use of taxpayers' money. So we 
have gone back and we have narrowed that down to a much smaller 
amount of money. I believe it is now $6 million for the single 
pilot site. That will build all the interfaces that we need so 
that we can, if that is successful, then begin a much quicker 
roll-out.
    And so what we are trying to do is to make sure that we are 
not throwing money out. We want to show--we want to be able to 
demonstrate that we can build the interfaces that it works for 
our schedulers that it works for veterans. And as soon as we 
have shown that, and that is why this award will happen in the 
next two weeks, then we can surge that and accelerate it 
throughout the country.
    Mr. Bergman. Well, again, I applaud you because you took a 
$57 million number and reduced it. Good on you. Sounds like the 
timelines are moving forward. I would like to go, and we only 
got a minute here, but it is probably more of a comment than a 
question because you and I had a chance to chat a little bit 
about this yesterday. But in the military, when we are in the 
fight, we have the assets we have and we redistribute and 
redeploy them as we need, as the fronts of the fight appear.
    Regarding the appeals, what I heard--said this morning here 
was hire more lawyers. That concerns me. Don't we have enough 
folks that are currently working in the veterans affairs 
bureaucracy that you could consider, strongly consider, 
redeploying already existing assets in a short term to increase 
the rate of reduction of the backlog in the appeals process?
    Secretary Shulkin. Yeah. I am going to tell you as honestly 
as I can that I don't believe that we have done enough to 
consider what you have just asked. It has been suggested to us 
to bring back retired judges who are already trained in 
veteran's law. We have suggested that and internally that has 
not been well accepted.
    I believe that we owe you a much better answer on this. I 
think that we need to do better. I wish I knew what that was 
today. But I want to work with you, if you have ideas on how to 
do this. I think we owe you a better answer.
    Mr. Bergman. Thank you. I do. And I yield back. I know I am 
over my time. Thank you, sir.
    The Chairman. Thank you, General. And I want to apologize 
to Mr. Sablan. I am going to add five minutes to our meeting 
this afternoon to apologize. We have a meeting. But I am going 
ask that Ms. Brownley be given five minutes now and then I 
think she has to leave.
    Okay. Mr. Sablan is up then.
    Mr. Sablan. Thank you very much. Thank you. We should do 
this more often, actually. But, Mr. Secretary, thank you, 
welcome again, and thank you for your service. And I have just 
basically two questions now. On recruitment and retention of 
health care providers, all of us here are hearing of shortages 
of health care providers around the country. And as you and I 
had discussed before, in my district, there is one private 
physician and so there is a need for more health care 
providers.
    But do you believe your budget includes the resources 
necessary to successfully recruit? And after you recruit, to 
retain the health care professionals you need to provide care 
to veterans?
    Secretary Shulkin. I think we have a lot of work to do on 
recruitment, and we have a big clinical need, particularly in 
parts of the country that are rural or isolated like certainly 
where you represent, and we talked about that yesterday.
    I think our recruitment issues stem from the overall 
national health care shortage, particularly in primary care and 
mental health. They result from the bad morale and the press 
that we have been under for the past three years where people 
say, ``Why would I want to go work for VA?'' And what we are 
trying now to do is to change the dialog on that that this is 
one of the best places in the country to serve. That it is a 
truly remarkable system and people should give it a chance.
    Our hiring practices are too slow, so we lose good 
candidates when they get offers from private sector places. 
And, finally, in many situations our salaries just aren't 
competitive. So this is a multi-factorial issue that we have to 
address. I can tell you it is at the very top of our list to 
make sure that we are filling the vacancies that we need. It is 
one of the reasons why we gave full practice authority to 
advance practice nurses so that we could get other types of 
health care professionals to come into the VA. But we are 
working on this and we still have a ways to go.
    Mr. Sablan. All right. Thank you. Mr. Secretary, this has 
been brought up, discussed and just resharing, but explain it 
again so I could fully--more fully understand it. You have 
talked about the VA's plans to provide emergency health 
services to veterans who have other than honorable discharges. 
Now how does this connect to your overall suicide prevention 
strategy?
    Secretary Shulkin. When you look at one of the reasons, and 
this gets to Congresswoman Esty's point about the value of our 
research. The VA has studied the issue of suicide in a way that 
no other organization has in the country, so we know a lot 
about where the suicides are happening.
    They are happening among our older veterans in largest 
numbers. But the fastest growing groups are among younger 
veterans, and the very fastest group among women veterans. And 
when you start looking at sub-groups, those that are homeless 
and those that are other than honorably discharged who don't 
have access to the proper health care services, including 
mental health, are at extreme risk.
    So if we really want to prevent suicides we have to get to 
homeless veterans, we have to get to veterans that do not have 
health care services like other than honorably, and we have to 
begin to start understanding better the issues with women 
veterans and the younger veterans, and design our services to 
be different.
    So we took an action on other than honorably, we are 
working hard on homelessness, and we are trying to understand 
how we can do better in those other high risk populations.
    Mr. Sablan. Thank you very much.
    Mr. Chairman, I yield back.
    The Chairman. I thank the gentleman for yielding.
    Mr. Bilirakis, you are recognized.
    Mr. Bilirakis. Thank you. Thank you, Mr. Chairman, I 
appreciate it. And thank you again, Mr. Secretary. I appreciate 
it. Thanks for the round table yesterday, too, the bipartisan 
round table discussion.
    Secretary Shulkin. Thank you.
    Mr. Bilirakis. Very productive, as far as I am concerned. 
Mr. Secretary, on the Choice Act, I assume that the mental 
health services, the veterans, if they qualified for the Choice 
Act though they qualify, they have access to mental health 
services in the community; is that correct?
    Secretary Shulkin. Yes.
    Mr. Bilirakis. Okay. How about veterans who qualify for 
dental care? I know we need to expand that, but 100 percent and 
if it is combat related. Do they have access, too, under the 
Choice Act?
    Secretary Shulkin. Certainly if they meet the requirements 
in terms of currently--right now--wait times or the service is 
not offered they can use non-community care. Correct?
    Mr. Yow. They can.
    Secretary Shulkin. Yeah. We do a fair amount of that.
    Mr. Bilirakis. So they can?
    Secretary Shulkin. Yes.
    Mr. Bilirakis. All right. Very good. The other thing is, 
Mr. Secretary, on the COVER Act again.
    Secretary Shulkin. Yes.
    Mr. Bilirakis. We talked about at the round table, the 
Presidential appointees--
    Secretary Shulkin. Right.
    Mr. Bilirakis [continued]. --so that we can start.
    Secretary Shulkin. This morning my Chief of Staff and I are 
going to be identifying two candidates to recommend to the 
President to appoint to that.
    Mr. Bilirakis. Thank you. The sooner the better--
    Secretary Shulkin. Yes.
    Mr. Bilirakis [continued]. --so we can get started.
    Secretary Shulkin. Thank you. Thank you for reminding us on 
that.
    Mr. Bilirakis. This has to do with the alternative 
therapies, as you know.
    Secretary Shulkin. Absolutely. Very important.
    Mr. Bilirakis. Okay. And then I want to thank Dr. Dunn, as 
well, a fellow Floridian who brought up the Post-9/11 GI Bill 
claims in efforts to automate the certificate of eligibility. I 
have a bill that I filed, HR1994, the Vocational Education and 
Training Enhancement for Reintegration Assistance Act, called 
the Veterans' Act. Can you work with me on that? Because this 
helps address that issue. And I would like for--if you could 
review that bill and have some suggestions as well--
    Secretary Shulkin. Yeah. Absolutely.
    Mr. Bilirakis [continued]. --with regard to the post-911.
    Secretary Shulkin. Absolutely. We would be delighted to.
    Mr. Bilirakis. Thank you very much. One more question. The 
budget request maintains the IG funding as the same as fiscal 
year 2017. I continue to hear from veterans to investigate 
claims for negligence and retaliation against whistleblowers. 
Do you believe the IG has sufficient resources to investigate 
the amounts of claims they receive?
    Secretary Shulkin. Yeah. I may need some correction on 
this. I thought the IG got a substantial increase in FTEs.
    Mr. Murray. There are five this year.
    Secretary Shulkin. But--
    Mr. Murray. I hope you are right.
    Secretary Shulkin. Was there increase last year? They were 
going to hire 200 new employees, I thought.
    Mr. Murray. They got an increase last year, but--
    Secretary Shulkin. They were flat.
    Mr. Murray [continued]. --they were flat.
    Secretary Shulkin. So flat funded. It was last fiscal year 
in '17 they got an increase of--
    Mr. Murray [continued]. I don't have the amount, so--
    Secretary Shulkin [continued].--a couple hundred employees. 
So that was maintained in the President's budget, but no 
additional increase.
    Mr. Bilirakis. But no additional increase.
    Secretary Shulkin. Right. Right. Yeah.
    Mr. Bilirakis. And do you think--
    Secretary Shulkin. They are still--
    Mr. Bilirakis [continued]. And do you think that is enough 
funding for the IG office, as far as the--
    Secretary Shulkin. Yes. Yes.
    Mr. Bilirakis. --appropriation?
    Secretary Shulkin. I have met with the IG and I know that 
he is hiring up to those levels now. There was a hiring freeze 
and that delayed some of that hiring. And we are working with 
the IG actually to find additional space so that he can house 
the people when he hires them.
    Mr. Bilirakis. Okay. Very good. Thank you. I want to 
continue to work with you on that, as well.
    Secretary Shulkin. Thank you.
    Mr. Bilirakis. Thank you very much. Anyone like my time? 
Mr. Chairman, you want my time?
    Mr. Roe. No, I am fine.
    Mr. Bilirakis. Okay. All right. I yield back. Thank you.
    Mr. Roe. Ms. Kuster, you are recognized.
    Ms. Kuster. Thank you very much, Mr. Chairman. And thank 
you Secretary for being with us with your team. I want to start 
by referring to a report today in the Washington Post from the 
FDA on opioids. And just a rather astonishing fact from a 
study, after one day of opioid use six percent of people will 
still use opioids one year later. After 30 days use, 35 percent 
will still be using opioids one year later. And it is rather 
extraordinary and I wanted to follow up on the cuts in the 
research budget. Because I am grateful for you having chosen 
opioid addiction as one of your areas of most importance at 
this point. But we have a great deal to learn about pain 
management. And I know that there are cutting edge efforts 
being made in the VA, but I want to make sure that we spread 
those across the country. What can you say based upon the 
budget and any other plans that you have to reduce the use of 
opioid medication and provide for alternative pain management 
in the VA?
    Secretary Shulkin. Well, first of all those are astonishing 
statistics and very, very scary. They really reinforce the fact 
that before we prescribe these medications we really have to 
make sure that we are considering alternatives. Because a day's 
treatment with that type of statistic a year later is pretty 
scary.
    The VA, as you know, has been focusing on this prior to 
this becoming an American public health issue. We have seen a 
33 percent reduction since 2010 in the use of opioids. And in 
some areas, like in your VA, a 50 percent reduction my 
understanding is. And so we have a lot to learn. I recently 
published an article with my colleagues at VA in the Journal of 
the American Medical Association this January on what VA is 
doing. Because we believe we are--we have a lot to show and to 
teach the rest of American medicine about this multifaceted 
approach towards reducing opioid use. Yesterday you passed a 
bill in the House for prescription drug monitoring and we are 
very supportive of that and appreciate that. Because that is 
part of what we think is important.
    So we will continue to focus on this. The use of 
complementary therapies as you are showing is very, very 
important as an alternative. The DoD and VA guidelines, which 
are a stepwise approach towards pain management, are important. 
And as you mentioned, research is critical. We have reached out 
to the FDA because we want VA to be one of the leaders in 
finding a non-addictive pain medication that will really begin 
to start dramatically limiting the use of opioids.
    Ms. Kuster. Good. And we would like to work with you. And 
in particular I would like to take these new pain management 
techniques and make sure they are available in VAs all across--
    Secretary Shulkin. Yes.
    Ms. Kuster [continued]. --the country. So we will follow up 
on that. With regard to the IT funding I want to focus in with 
my colleague General Bergman's comments about the scheduling. 
In particular two items with regard to your determination of an 
effective scheduling system going forward. One is whether you 
are considering what is now widely available in the private 
sector, which is self-selecting. And, number two, any other 
methods to determine efficiency of scheduling. We have a 
dramatic problem all across the VA in missed appointments. And 
part of this is that the appointments they get are not until 
August because we have such an inefficient scheduling system. 
And so I think we really need to be focused on reducing those 
wait times by giving people the times when they can get a ride, 
when they have a family member that can get them to the VA, 
when they have access to public transportation. So is there 
anything in this--and I am very, very worried, by the way, 
about the lack of IT funding in this budget. I am more 
encouraged that you said you are going to come back. We need to 
work with you in a bipartisan way with our Appropriations 
colleagues because they may not be in the mood. You know, this 
is the budget season and you are going to come back on your 
timeframe after your decision. And they may very well say, no, 
no, we have moved onto giving massive tax cuts, we don't have 
the funds. So those two questions if you would.
    Secretary Shulkin. Yeah.
    Ms. Kuster. In six seconds.
    Secretary Shulkin. Okay. I think it is all legitimate. 
First of all, when I got to the VA we were using a system 
called recall reminders, which is we wouldn't tell the veteran 
when their appointment was. We would send them a letter in the 
mail saying here is when you should come. We are stopping that 
practice. That doesn't work. I have never seen it anywhere 
else. And veterans need to know when their appointments are and 
they need to be involved in the decision for the reasons you 
have said. Our no-show rates are far too high and that is 
really something that we are targeting to get down.
    Secondly, we do have a system of self-scheduling called 
VAR, Veterans Appointment Request, which is a self-scheduling 
system. It is now available, I think, at 104 sites, but really 
in pilot tests. And it will roll out this summer so that 
veterans can start using that in much larger numbers. And--
    Ms. Kuster. We will work with you.
    Secretary Shulkin. Yeah, thank you.
    Ms. Kuster. I need to yield back.
    Secretary Shulkin. Thank you.
    Ms. Kuster. But we will work with our colleagues to make 
sure you get the IT funding you need.
    Secretary Shulkin. Thank you very much.
    Ms. Kuster. If you make the right decision.
    Secretary Shulkin. Yes.
    Ms. Kuster. Good luck.
    Mr. Roe. Thank you, gentlelady, for yielding. Mr. Poliquin, 
you are recognized.
    Mr. Poliquin. Thank you, Mr. Chairman, very much. And thank 
you, Mr. Shulkin. Good to see you again.
    Secretary Shulkin. Thanks.
    Mr. Poliquin. Now, I know you can't have favorites. But we 
know the State of Maine is your favorite state in the union, 
and as a result, all 66,000 veterans we have in Maine's second 
district are you favorite. With that said, sir, I want to thank 
you and I appreciate very much your working with us to make 
sure the $23 million that the VA owed to two of our hospitals 
in Maine, Eastern Maine Medical Center in Bangor, my district, 
and Maine Medical in Portland, not in my district. But you have 
done a great job catching up and paying those claims. And I 
want to thank you and your terrific Chief of Staff, whose name 
I have a hard time pronouncing. Help me out with it.
    Secretary Shulkin. Vivieca.
    Mr. Poliquin. Vivieca, she is terrific.
    Secretary Shulkin. Vivieca Wright-Simpson.
    Mr. Poliquin. Who we met with yesterday.
    Secretary Shulkin. Right.
    Mr. Poliquin. Was it this morning?
    Secretary Shulkin. Yes.
    Mr. Poliquin. Yesterday morning. This morning. Yesterday.
    Secretary Shulkin. Yesterday morning.
    Mr. Poliquin. In any event, when we reported to you that we 
have another one of our hospitals--
    Secretary Shulkin. Yes.
    Mr. Poliquin [continued]. --Calais Regional Hospital way 
down east Maine--
    Secretary Shulkin. Yes.
    Mr. Poliquin [continued]. --highly rural. They just closed 
a unit because of other issues they have there. And they are 
owed a half million dollars by you folks. It's 120 days late. 
And I know you have committed to work with us on that. And you 
have, in addition to that, asked us when we hear additional 
problems with late payments, you will be on top. So thank you 
very much, Mr. Shulkin, I appreciate it.
    Secretary Shulkin. Yep.
    Mr. Poliquin. Now, we all know, because it's been discussed 
here, Mr. Chairman, that going forward as our WW2 and Korea 
veterans continue to age that the absolute number of veterans 
that we will be caring for going forward will drop. At the same 
time the budget for the VA, over the last six years, and this 
has been mentioned several times in hearings the last few 
months, in the last six years it has gone up 50 percent. So my 
concern is how do we get every possible dollar that we have 
available clinically to help our veterans if they need a knee 
replacement or they have PTSD?
    Now, let's talk a little bit about the IT system here if I 
can, Mr. Shulkin. Now, it has been said time and time again we 
have a real problem with it. We have a problem with scheduling. 
We have a problem with paying claims. We have a problem with 
sharing medical records. So the IT system doesn't work. It is 
about 30 years old. Who on your staff was there at the time 
these decisions were made?
    Secretary Shulkin. Which decision are we talking about?
    Mr. Poliquin. Well, I am looking at--
    Secretary Shulkin. Yeah.
    Mr. Poliquin. If I may.
    Secretary Shulkin. Yeah.
    Mr. Poliquin. I am looking at the whole IT system problem. 
I have a little bit of experience in the software business. You 
know, in the software business, you don't want to be in the 
software business. You want to take care of veterans.
    Secretary Shulkin. Right.
    Mr. Poliquin. I understand that and I agree with that. I 
want to know who among your senior staff, maybe some folks 
sitting at the table, who--anybody involved--
    Secretary Shulkin. Yes.
    Mr. Poliquin [continued]. --in those decisions to build an 
IT system internally that does not work. Why has it taken you 
this long to say there has got to be a better way to do it? Who 
at the VA has made that decision and are they with you today?
    Secretary Shulkin. Well, I think that this is a decision 
that has been passed down over many, many administrations and 
many secretaries. We do have with us our Acting Chief 
Information Officer, but I don't think that you can look to him 
to say that he was in the position that was accountable at the 
time.
    Mr. Poliquin. Are there any folks at the VA now, Mr. 
Secretary, who would be involved in this decision to go off 
shelf to buy a system that will work so we can save money for 
our veterans clinically and we are not in the business of 
software? Are there any folks at the VA now that will be making 
that decision that have been involved in prior decisions?
    Secretary Shulkin. I am making that decision. I have said 
that this will be a decision I will make by July 1st. And I was 
not involved.
    Mr. Poliquin. Okay. How can you assure this Committee that 
is looking to help you, Mr. Secretary, to make sure that we 
don't have this problem again? How can you assure us that won't 
happen? For example, it is very easy when you buy a software 
system off the shelf to know when it needs upgrades or maybe we 
can do a little bit of this internally, you know, what have 
you. How can you assure us this problem won't happen again?
    Secretary Shulkin. Well, let's wait until I make a decision 
on what we want to do and then let's have that discussion. 
Because I think--
    Mr. Poliquin. Because if I--
    Secretary Shulkin [continued]. --that is an important 
discussion.
    Mr. Poliquin. If I am not mistaken the 4, with a B, would 
be $4 billion per year with spending is to maintain four or 
five or six different systems that don't work.
    Secretary Shulkin. At least 70 percent is towards 
maintenance.
    Mr. Poliquin. Okay. So--
    Secretary Shulkin. So 4.2 billion.
    Mr. Poliquin. Yeah. That is a lot of money.
    Secretary Shulkin. It is a lot of money.
    Mr. Poliquin. That we could be using for knee replacements 
or what have you. Okay. In my remaining 30 seconds, and Mr. 
Chairman, Mr. Bilirakis was gentile in saying he had a minute 
and a half. Anybody want that minute? I would like that minute 
and a half. Is that possible? Darn it. Tell me, Mr. Secretary, 
what it is going to look like where our VA is seeking their 
health care when we are moving away from big medical facilities 
to more community-based systems, how is that going to look to 
our veterans when they go to look for their health care?
    Secretary Shulkin. Well, look, health care is rapidly 
changing. I think what we are seeing is over time, and you are 
seeing this outside the VA as well, a transition from 
inpatient-based care to outpatient-based care. VA is now about 
ninety percent outpatient-based care. I think over time you are 
going to see health care move to this. And we are building a 
system--this is part of our IT assessment --that increasingly 
needs to reach veterans where they are. Younger veterans, who 
as you mentioned because of the demographics, are going to be 
our core target audience as our older veterans get older, want 
care in way that is different than past generations. And we 
increasingly need to--we can't expect for them to come into our 
buildings to get that care. We have to evolve our system.
    Mr. Poliquin. And I am sure, Mr. Secretary, that your new 
IT system will include those devices.
    Mr. Roe. The gentleman's time has expired.
    MR. Poliquin. Thank you very much. You bet.
    Mr. Roe. Ms. Brownley, you are recognized.
    Ms. Brownley. Thank you, Mr. Chairman. I think I might be 
the seventh or eighth member that has asked about IT systems so 
far. So I think I am getting a picture of what your intentions 
are. And you talked about off the shelf systems or contracting 
out to support VistA by July 1st and that you are going to make 
that decision. So I am looking for not only the VistA system, 
but for scheduling systems and everything else that needs to be 
upgraded. And I, you know, continue to say that I think our 
services to veterans will only be as good as our IT services. 
And we are not going to be able to be as efficient and timely 
until we do.
    So I guess my question is, and I don't want to harp on it 
too much longer, but when will you provide sort of a 
comprehensive IT plan for all the various systems we have 
talked about in these hearings of, you know, what your 
intention is and--
    Secretary Shulkin. Yeah.
    Ms. Brownley [continued]. --your decisions are?
    Secretary Shulkin. Yeah. I have said, and all the factors 
that you are talking about, Congresswoman, are things that I am 
taking into account right now. Not only the issues related to 
how can we best serve veterans, but as we are increasingly 
getting care in the community we need to make sure that we are 
able to communicate in an interoperable way with all of our 
partners. Not only Department of Defense--
    Ms. Brownley. Yeah.
    Secretary Shulkin [continued]. --but our academic centers. 
So here are a number of considerations. I have said that by 
July 1st I will announce the decision and the direction that we 
are going. Once we do that, then we need to develop exactly 
what you are talking about, which is the comprehensive plan 
towards implementing that. And that is when we will begin 
discussions with you and not only on the cost of these systems, 
but what that plan looks like. And as you know, when you change 
directions most of your planning is in change management. How 
do you get your organization ready for this? It is not usually 
the technology piece.
    Ms. Brownley. Okay. Thank you. I appreciate our meeting 
that we had yesterday in my office. And we talked a little bit 
about IVF services to our veterans and getting that program off 
the ground. You had mentioned, you know, in my office that 
there are 40 plus veterans that are somewhere in the process to 
receive IVF services.
    So last night I was at a Paralyzed Veterans of America 
event and spoke with their National President, Al Kovak.
    Secretary Shulkin. Uh-huh.
    Ms. Brownley. And he explained to me, I was talking about 
our meeting and IVF. And he said, well, he is in San Diego and 
he said ``I have been waiting and I have not been able to find 
a fertility doctor that would be reimbursed by--
    Secretary Shulkin. Uh-huh.
    Ms. Brownley [continued]. --the VA. So he is stating that 
his time is running out. And, you know, so what he was saying 
and what you were saying--
    Secretary Shulkin. Uh-huh.
    Ms. Brownley [continued]. --to be didn't quite match up.
    Secretary Shulkin. Uh-huh.
    Ms. Brownley. And so I don't know where the problem is. If 
the problem is--
    Secretary Shulkin. Right.
    Ms. Brownley [continued]. --in, you know, third party 
providers, if it is the reimbursement rate, you know, where it 
is. But, you know, I certainly would like to be able to get 
back to--
    Secretary Shulkin. Right.
    Ms. Brownley [continued]. --the National President of PVA 
and say we have resolved this so that he has the opportunity to 
start a family.
    Secretary Shulkin. What we talked about yesterday was 
exactly this point, that in our rush to get this program up 
that we are still identifying providers to be able to do 
exactly that. I would suggest to you that you re-contact the 
National Commander and my guess is, is that he will tell you it 
has been resolved.
    Ms. Brownley. Thank you very much.
    Secretary Shulkin. Okay.
    Ms. Brownley. Thank you very much for that. And I don't 
have much time left. But a third question that I wanted to talk 
about a little bit is have--in your budget you talk about the 
number of veterans we need to serve, that we have served in, 
you know, 2017 and who will serve in 2018 and 2019. The numbers 
haven't shifted that much from 6.9 to 7 to 7.1. So I'm curious 
if the analysis that you have done has taken into account other 
provisions in the larger budget. And it is Medicaid that I want 
to address specifically. So, you know, there are a lot of 
veterans, one in ten veterans use Medicaid services. If we make 
those deep cuts in Medicaid through this budget have you 
accounted for the additional demand, if you will, from veterans 
who will need those services?
    Mr. Roe. Mr. Secretary, I am going to ask that you send 
that in writing if you would, just for time purposes. We still 
have a lot of Members--
    Secretary Shulkin. Absolutely.
    Mr. Roe [continued]. --that need to ask questions.
    Ms. Brownley. I yield back.
    Mr. Roe. Thank you.
    Secretary Shulkin. Thank you.
    Mr. Roe. Thank you for yielding. Dr. Wenstrup, you are up.
    Dr. Wenstrup. Thank you, Mr. Chairman. Thank you, Mr. 
Secretary. A pleasure to be with you again today.
    Secretary Shulkin. Thank you.
    Dr. Wenstrup. A lot of people have asked about EMR. And I 
can appreciate the decision process you have to go through. 
Because are we going to connect with DoD? Are we going to 
connect with the community? How can we do all this? One 
question I do have for you, do you--are you concerned at all 
that your decision for the best practice may be constrained by 
budget?
    Secretary Shulkin. We are going to make the best decision 
for VA and for veterans and come back and talk to you about 
whatever that decision is, if it has budget implications.
    Dr. Wenstrup. I appreciate that. Because I am interested in 
hearing--
    Secretary Shulkin. Yeah.
    Dr. Wenstrup [continued]. --you know, what dollars are 
available and what you think is actually the best way to go.
    Secretary Shulkin. Yes.
    Dr. Wenstrup. And we have to talk about that.
    Secretary Shulkin. Yes.
    Dr. Wenstrup. And I appreciate it. You held up the device 
earlier and you said this is where medicine is going. And it 
just, you know, clicked in my head, maybe our veterans all need 
some inexpensive little device that says--you talked about no 
shows that says you have an appointment tomorrow.
    Secretary Shulkin. Yeah.
    Dr. Wenstrup. And on the issue of mental health. One of the 
things that I saw at home recently, and so I just bring this 
idea as somewhat fresh and maybe it is on your radar, but there 
is a local mental health clinic on the bus line. And when you 
go there if you have a physical problem, not just a mental 
problem, that treatment is available right there that day, as 
is their pharmacy. Everything is all under one shop. And they 
not only leave, but they get blister packs of these are the 
meds you take at eight o'clock, at noon, really increasing 
compliance and presumably. And I think so far we are seeing 
better outcomes. Something to consider in the face of 
compliance if we go toward that type of system. But that being 
said, one concern I have with those other than honorably 
discharged, if they come in and they are in there for a mental 
health problem--
    Secretary Shulkin. Yeah.
    Dr. Wenstrup [continued]. --and their appendix is bursting, 
what are we doing?
    Secretary Shulkin. Yeah. First of all, VA is a big believer 
in integrated behavioral health and physical health care. We do 
a million visits a year where essentially they are delivered 
together because it takes away the stigma of behavioral health. 
So it is absolutely important. Medication compliance: VA does 
better than the private sector. One of the reasons is we allow 
our pharmacists to practice at the highest level of their 
license, and they are actually doing a terrific job.
    Dr. Wenstrup. Sure.
    Secretary Shulkin. VA pharmacists are really very--we are 
very proud of them. My grandfather was a VA pharmacist. But I 
do think that there is a lot more that we can do with this. And 
so we would like to work with you on any other ideas that you 
have.
    Dr. Wenstrup. Yeah, thank you. I appreciate it. With that I 
yield back.
    Mr. Roe. Thank you, gentleman, for yielding. Mr. Takano, 
you are recognized.
    Mr. Takano. Thank you, Mr. Chairman. Good morning, Mr. 
Secretary. You know, I am concerned about the proposal to 
terminate individual unemployability benefits at age 62 for 
veterans eligible for social security. Most of the savings in 
this budget come from this proposal, which is $3.2 billion in 
2018, and $17.9 billion over five years. Now, if a veteran was 
provided this benefit because of an inability to maintain 
gainful employment, particularly at an early age, he or she 
wouldn't have been able to pay into social security or put 
savings into a 401K or other retirement savings account. If you 
end the IU payments at age 62 for veterans like this, don't you 
risk plunging them into poverty when you shut off the IU 
payments? How are we going to deal with this?
    Secretary Shulkin. We are very sensitive to this issue. We 
have a system where we will add to our mandatory program for 
veteran's benefits over $6 billion next year alone. This is--
our growth and mandatory funding is at a considerable growth 
rate. Now our veterans deserve that and we want to honor that 
and we are honoring that by seeing the level of growth. But we 
also have a responsibility to make sure that our current 
mandatory programs are being utilized in the appropriate way. 
In this setting, which is on the employability, this benefit 
never stops. We have over 7,000 veterans above age 80 that we 
are paying--
    Mr. Takano. But the budget--
    Secretary Shulkin. Yeah.
    Mr. Takano [continued]. The proposal says that you are 
going to cap it at age 62.
    Secretary Shulkin. Right.
    Mr. Takano. This makes no sense--
    Secretary Shulkin. Right.
    Ms. Takano [continued]. --to me.
    Secretary Shulkin. Right. Currently we don't cap it. So we 
have 7,000 veterans that we pay unemployability payments for 
above age 80. And so age 62 is when veterans start getting 
access to their other benefits, like Social Security. And so 
this is a way, we think, of appropriately utilizing the 
mandatory funds of which we are increasing by six billion, but 
we are also looking at where we believe that we can make the 
program more responsible.
    Mr. Takano. Okay. I want to read you an excerpt from some 
of the responses from the VSOs over mandatory spending that you 
propose for the Choice Program. ``The VFW is very concerned 
that the administration's request to make the Veteran's Choice 
Program a permanent mandatory program could lead to the gradual 
erosion of the VA health care system.'' PVA--``We believe 
Congress must reject continued funding of this program through 
a mandatory account and place it in line with all other 
community care through the discretionary care account.'' Why 
does the budget propose to extend the current Choice Program 
with mandatory spending? That is my--what does this due to the 
discretionary cabs or does the VA eventually intend to fund all 
VA medical care and services with mandatory appropriations? 
What is the rationale here?
    Secretary Shulkin. Well, we are seeking to run the 
community care programs as a single program. We spend, and the 
budget allows for $13.4 billion to be spent in community care. 
Of that, $2.9 billion is in mandatory, but the rest is in 
discretionary.
    Mr. Takano. Do you understand the VFW's concern about 
gradual erosion? Because one of the concerns I have is the 
growth of care in the community, private sector care, their 
ability to hire advocates and their increasing--the increasing 
value of that expenditure is going to, I think, put a lot of 
downward pressure of other parts of VA health care. And I think 
that is what they are getting at though.
    Secretary Shulkin. Well--
    Mr. Takano. Are you concerned about this at all?
    Secretary Shulkin [continued]. Well, of course we're 
concerned about it. I am always concerned about unintended 
consequences and that is not our intent to see that happen. We 
are grateful that this budget includes money for the 
continuation of the Choice Fund. And remember, the last budget 
did not include that. And so this is an indication that there 
will be continued support to allow our veterans to get the care 
they need. It was split between mandatory and discretionary, 
but that is something that we believe that we can manage those 
unintended consequences--to make sure that their concerns don't 
happen.
    Mr. Takano. Well, we will obviously pursue this in the 
months to come. But I appreciate your responses.
    Secretary Shulkin. Thank you.
    Mr. Roe. Thank you, gentleman, for yielding. Mr. 
Rutherford, you are recognized for five minutes.
    Mr. Rutherford. Thank you, Mr. Chairman. Mr. Secretary, 
good to see you again. I first want to bring up the issue of 
the Inspector General's Office. And I believe in this budget 
there is actually an increase up to 120 FTE, which is a 47 FTE 
increase.
    Secretary Shulkin. Yeah.
    Mr. Rutherford. Is there any intention to renegotiate the 
AFGE contracts, you know, the master collective bargaining 
agreements?
    Secretary Shulkin. Okay. So let's just clarify about the 
IG, because--
    Mr. Rutherford. Yeah.
    Secretary Shulkin [continued]. --now we have heard two 
separate things.
    Mr. Murray. Okay. So the IG's budget in 2016 was $137 
million. It went up in 2016, I am sorry, 137. It went up to 
159,600,000 in '17 and was held flat at 159,600,000.
    Secretary Shulkin. So the increase was in '16 and '17. 
Yeah.
    Mr. Murray. And that was well over a 15 percent increase--
    Secretary Shulkin. Yeah.
    Mr. Murray [continued]. --between '16 and '17. So there--
you are correct regarding their full-time equivalence. This 
year their estimate's 773 and it goes up in '18 by 47 to 820.
    Mr. Rutherford. Right.
    Mr. Murray. So they are still ramping up.
    Secretary Shulkin. Yeah, they are ramping up.
    Mr. Rutherford. Okay.
    Secretary Shulkin. They weren't able to hire over this past 
year--
    Mr. Rutherford. All--okay.
    Secretary Shulkin [continued]. --all that they needed.
    Mr. Rutherford. Good.
    Secretary Shulkin. And then your second question was on the 
what?
    Mr. Rutherford. Renegotiation.
    Secretary Shulkin. Yeah, on the renegotiation. Our 
contracts are currently in force and we have--Mark, do you know 
the status of that? I think that we've begun the pre-
conversations, but it is not going to be an early negotiation. 
It is just going to be honoring the commitment for the contract 
that it is, but starting to begin those negotiations looking 
into the future.
    Mr. Rutherford. Okay. Because those masters were last 
negotiated in 2011, correct?
    Secretary Shulkin. Yeah. I think that they are--yeah.
    Mr. Rutherford. Okay. Okay. Let me go back to Mr. Takano's 
discussions about Choice, because you and I had a conversation 
that what I thought was very enlightening for me. Because I--it 
was an angle that I really hadn't thought about. And you talked 
about how increasing Choice actually can help change the 
culture within the VA and in fact provide better care and 
service for the veterans who are coming there. And how that 
is--I believe that was number one--
    Secretary Shulkin. Yes.
    Mr. Rutherford [continued]. --on your list of five 
principles that you really want to address.
    Secretary Shulkin. Right.
    Mr. Rutherford. Can you talk a little bit about that on how 
Choice can have that very, very positive impact--
    Secretary Shulkin. Right.
    Mr. Rutherford [continued]. --on the organization?
    Secretary Shulkin. Yeah. Look, I think it is the most 
important strategy that we will pursue. I don't know an 
industry that produces a product that isn't--that--an industry 
that or a company that is successful that isn't customer 
obsessed.
    Mr. Rutherford. Uh-huh.
    Secretary Shulkin. So you have to be completely focused on 
what your customers need. And the reason why companies are 
customer obsessed is because their customers have choice, and 
if they don't produce something that their customers want, then 
they lose their customers. And that is the issue in VA that all 
too often people have adopted an attitude that veterans don't 
have choice and that the veteran isn't treated as a customer. 
Now, fortunately the vast majority of our employees are mission 
driven and do understand that. But we have too many employees 
that frankly have taken veterans for granted. And we are going 
to stop that. And we are going to say, look, when you give 
veterans choice--if you work in the VA, it is an honor to work 
in the VA, we have a real critical mission, and you had better 
understand that these are customers and treat them as if they 
are customers. And that's the difference in culture that we are 
trying to impose.
    Ms. Rutherford. And I applaud you for that. You know, we 
also--it seems like every time we meet we talk about mental 
health. And I know what an advocate you are. It has been 
discussed here ad nauseam almost. But this is a topic that, you 
know, is near and dear to my heart. I was a--as a former 
sheriff having run a jail I saw firsthand those folks. In fact, 
I ran the largest residential mental health care facility in 
Duval County. That was the Duval County Jail sadly.
    Secretary Shulkin. Uh-huh.
    Mr. Rutherford. And to go back to the other than honorable, 
the expansion of mental health care services and others like 
Hepatitis C and some other things. Can you talk a little bit 
about how--I don't want to leave people with the impression 
that folks with dishonorable discharges are actually going to--
    Secretary Shulkin. Right.
    Mr. Rutherford [continued]. --receive this service. Can you 
talk a little bit about that?
    Secretary Shulkin. Right. Yes. There is certainly a 
difference with those that are dishonorably discharged. So they 
committed a crime or had an ethical or moral act that led to 
their discharge--
    Mr. Rutherford. Right.
    Secretary Shulkin [continued].--Versus those who were other 
than honorably discharged. And when you take a look at the 
other than honorably discharged, it often does trace back to 
some type of behavioral or emotional problem, often caused by 
their involvement in a conflict.
    Mr. Rutherford. Uh-huh.
    Secretary Shulkin. And so, you know, while that is a 
determination made by the Department of Defense, not by VA, we 
feel a responsibility at VA--
    Mr. Rutherford. Right.
    Secretary Shulkin [continued]. --to be able to care for 
those servicemembers.
    Mr. Rutherford. And ere go their discharge.
    Secretary Shulkin. Exactly.
    Mr. Rutherford. Mr. Chairman, I yield back. Thank you.
    Mr. Roe. Thank you. Mr. Correa, you are recognized.
    Mr. Correa. Mr. Chair Roe and Ranking Member Walz, thank 
you very much for the hearing. And Secretary Shulkin, welcome.
    Secretary Shulkin. Thank you.
    Mr. Correa. You know, this Committee has been doing some 
really good work lately on health care and VA's appeals 
process. Yet as I was listening to my colleagues and your 
responses, you know, I had to take a pause when we were talking 
about the appeals process and how that would affect current 
folks on the pipeline. You mentioned 2026. And then we talked 
about your words health care system going through a lot of 
rapid changes. Research budget cut. Best intentions. I don't 
want to be here in five years and say, wow, this went wrong 
with the system, these unintended consequences, we didn't 
foresee them in 2017. So my question to you, sir, can we put a 
system in place that gets input, feedback from our veterans, 
something that is real-time? So as we are implementing all of 
these systems we actually can figure were they are actually 
working or not. I don't want to be here in 2026 and say the 
backlog is still five years away from being addressed.
    Secretary Shulkin. Yeah. We are, much like I just answered 
before, to be a good, effective organization, we have to be 
customer responsive. And that means that you had better be 
getting that feedback. So we are--this is one of the changes in 
VA. We are working much more to understand the veteran 
experience and putting in real-time tools to solicit the 
feedback.
    I will tell you right now, though, that on the appeals 
process: while we very, very much hope the Senate passes a bill 
just like what you did yesterday, that will only fix it moving 
forward. I do not have an answer that would prevent us from 
being here five years from now still talking about the backlog. 
This is something we have got to put our heads together on and 
figure out a different approach to this problem.
    Mr. Correa. Or that the backlog is actually increasing five 
years from now.
    Secretary Shulkin. Well, I don't think the backlog will 
increase because of--that is, if the Senate passes the bill 
that will allow us a process to make sure that it doesn't 
increase. But we still have, in backlog, way too many claims 
and appeals. And so that is something that we still have to 
come up with a better answer on.
    Mr. Correa. Thank you very much. Second question, sir, 
Secretary, was it yesterday we had breakfast?
    Secretary Shulkin. Yes.
    Mr. Correa. Yes. We were talking about the veteran 
cemeteries and I mentioned Orange County.
    Secretary Shulkin. Yes.
    Mr. Correa. Has your staff found--
    Secretary Shulkin. Yes.
    Mr. Correa [continued]. --out any information on the 
Orange--
    Secretary Shulkin. Yes.
    Mr. Correa [continued]. --County veteran's cemetery?
    Secretary Shulkin. Yes. The staff has said, after we have 
gone back with the comments that their commitment is to have a 
cemetery within 75 miles of where a veteran resides. And that 
given where Orange County is, is that the two current national 
cemeteries in Riverside and the other location, I don't know if 
you--yeah. Go ahead.
    Mr. Sullivan. We also have a cemetery in Miramar. So 
Riverside actually encompasses all of the geographic location 
of Orange County, as does Miramar in terms of the majority of 
Orange County. We are also planning an expansion project at the 
Los Angeles National Cemetery, which will construct a 
columbaria only urban initiative cemetery there that will 
enhance access to the residents of Orange County.
    Secretary Shulkin. So--
    Mr. Correa. Mr. Secretary--
    Secretary Shulkin [continued]. So there is not a plan right 
now.
    Mr. Correa. I think we are miscommunicating somewhere and I 
would like to follow up with you in discussions here. Because 
Orange County veterans do, you know, have earned that right and 
their families to visit their deceased ones in Orange County. 
The difference is, as you know, 75 miles in a rural area is 75 
miles. Ten miles in LA Orange County is a whole lot different.
    Secretary Shulkin. Yeah.
    Mr. Correa. But I know there has been discussion. I will 
follow up with you to make sure.
    Secretary Shulkin. Okay.
    Mr. Correa. I know the governor was just out to visit a 
site in Orange County, the City of Irvine, on this specific 
issue--
    Secretary Shulkin. Okay.
    Mr. Correa [continued]. --less than two weeks ago. I 
believe there may be some funding in the State budget for 
matching or what have you. So there has been active--
    Secretary Shulkin. Okay.
    Mr. Correa [continued]. --movement in that direction. And I 
just want to make sure we are all on the page. It sounds like--
    Secretary Shulkin [continued]. Well, that's why I 
appreciate you--
    Mr. Correa. We are miscommunicating right now.
    Secretary Shulkin. Right.
    Mr. Correa. But we will get to the bottom of it.
    Secretary Shulkin. Good. Thank you.
    Mr. Correa. Thank you very much, Secretary. With that, Mr. 
Chair, I yield the remainder of my time.
    Mr. Roe. Thank you, gentleman, for yielding. Mr. Banks, you 
are recognized.
    Mr. Banks. Thank you, Mr. Chairman. And thank you, 
Secretary Shulkin, for being here with us again today. I want 
to return to a discussion that you already had with my 
colleague Representative Coffman a little bit ago. The VA's 
budget submission includes a $1.2 billion increase for funding 
for medical facilities, including activation of new medical 
facilities and non-recurring maintenance expenses. Could you 
elaborate for a moment on how you arrived at that dollar 
figure?
    Secretary Shulkin. Yeah. The NRM funds, which are where we 
see the 1.2 percent--I mean, 1.2 billion increase--are 
essentially ten million dollar projects and less. We have a 17 
billion dollar capital deficit in NRM funds. When we have gone 
out and we have said, ``What would it take to get all of our 
facilities up to speed and to where they need to be?''--it is 
17 billion. The 1.2 billion increase, we think, is a, maybe not 
enough, but a good reasonable start. And we appreciate that 
increase from where we were last year because it is going to 
make us--allow us the opportunity to prioritize those projects 
and really move forward with them. They are not major 
construction projects. These are replacing the roofs and the 
HVAC systems and the medical equipment that is necessary.
    Mr. Banks. We talked about this before, as well, with the 
VA identifying 430 vacant buildings, 735 under-utilized 
buildings, maintenance cost of $25 million a year for those 
facilities. Can you maybe help the Committee identify 
legislative remedies to help you navigate the politics--
    Secretary Shulkin. Yeah.
    Mr. Banks [continued]. --of dealing with that situation?
    Secretary Shulkin. What we are doing right now, we are 
following through on the Commission on Care Recommendations, 
which really asked us to develop a plan on what to do with our 
facilities. As you know, the Appropriations bill also requires 
that VA develop a national realignment strategy. So, we are 
coming up with essentially what we think from a business point 
of view we should be doing to best use our resources to help 
veterans. Then we are going to need to come to you and we are 
going to need to work with you to find the best legislative way 
to address supporting these under-utilized and vacant 
buildings.
    Mr. Banks. Thank you. I appreciate your attention to that. 
And thank you very much. I yield back.
    Mr. Roe. Okay. Thank you. Mr. Walz, you are recognized.
    Mr. Walz. Well, thank you. And again, thank you, Mr. 
Secretary. I am appreciative of it and I-- this holistic budget 
approach. And I would be clear, from my perspective anyway, a 
very bad budget. Looking at the VA, which is my responsibility, 
it feels a little bit like me looking at a house that is on 
fire and saying, well, the drapes are nice in it, even though 
the rest of the house is on fire. So coming back though to what 
you can control and what we have responsibility in here, I just 
wanted to make note of this. Because the OIG is very near and 
dear to my heart. The OIG, the way I understand it, was flat 
funded for fiscal year 2017 at 159.6 million. Stopping their 
three-year expansion plan, which was reflective of the growing 
and sustained demand for oversight in the VA. Their requested 
funding for fiscal year 2019 as part of that expansion plan was 
197 million, which would have allowed their staffing levels to 
get up to the number they were trying to reach for that plan. 
Is that the way you understand it?
    Secretary Shulkin. My understanding is their request for--
Mr. Missal made the request for additional FTEs in fiscal year 
'16, was granted them, and his budget in '18 allows him to be 
able to achieve those 120 FTE increase. '19, we don't have the 
budget for yet.
    Mr. Walz. Okay. So you are at this point not overly 
concerned that we are going to have the IG. We have depended in 
here on the--
    Secretary Shulkin. Yes.
    Mr. Walz [continued]. --on the IG extensively.
    Secretary Shulkin. Yes.
    Mr. Walz. Okay.
    Secretary Shulkin. Yes. I think you are going to see the 
expansion that he asked for and he can do that.
    Mr. Walz. Very good. I am going to come back to Choice 
again, because we are all going to come back to Choice again. 
You said, Mr. Secretary, that more veterans are opting for 
Choice. Are you tracking whether or not the veterans who use 
Choice would prefer the VA or not? Because I don't have to 
remind you, the VA has a choice, too. So you said you want to 
give the customer choice. Are you cutting off that choice for 
another choice? Are you tracking it to know what they are 
saying?
    Secretary Shulkin. First of all, when we give Choice, it 
really is choice. The veteran can always choose to stay in the 
VA. And, in fact, we want a system that they will choose to be 
in the VA.
    Mr. Walz. But they can stay at a later date. What I am 
saying is if we plussed up the VA side and it was equal access 
to what they are getting on the outside, would they choose the 
VA over the outside if access times were equal?
    Secretary Shulkin. Well, in fact, many, many veterans given 
the option of Choice do choose to stay in the VA system. And we 
are trying to beef up the VA system so that where we see long 
wait times or services that aren't offered, we are trying to 
build that up. But the best data that I know of on this is 
still from the VFW and the VFW survey that asked this question.
    Mr. Walz. Yeah.
    Secretary Shulkin. And by far most veterans prefer and 
choose the VA.
    Mr. Walz. I am going to segue onto that. Keep in mind, and 
again, we need to talk candidly amongst ourselves when we look 
at voc rehab being cut 4.5, we see medical research being cut, 
but we see care in the community without a plan being there 
beefed up, it is a concern. And I quote from the VFW, ``very 
concerned that the administration's request to make Choice a 
permanent mandatory program could lead to a gradual erosion of 
the VA health care system itself. What is more concerning is 
that the administration has chosen to make permanent a flawed 
program before the fix.'' That's coming from VFW. I believe I 
have got Paralyzed Veterans. ``The recommendation begs a 
question. Does this recommendation suggest Choice program as 
currently designed should continue in perpetuity?'' So those 
are the questions that are going to be out there. They're 
asking that. So none of us here, me included, has ever said we 
shouldn't use care in the community. We know and it has been 
there. I think the concern, and I would characterize it to you 
as this, it is concern because they are not sure what is 
coming. Is that fair to you? I mean, are you hearing that?
    Secretary Shulkin. Yeah. Look, VFW and all of our VSO 
partners are so incredibly important and we work with them 
always to understand their concerns and use their input. But, 
look: here is the way I look at the budget. The amount of money 
overall, 13.4 billion for community care, stays essentially 
where it is. This is not a massive transfer from funds from the 
VA into the community. This just, this funds and continues what 
we have been doing in the Choice Program. The increase in the 
budget that the President has proposed is actually increasing 
discretionary funds in the VA. This allows us to continue to 
build and strengthen the VA system.
    Mr. Walz. Let's continue to talk to them about that. I am 
going to end with an IT question. I quote from the President, 
``I will create a private White House hotline for veterans 
that's answered 24 hours a day. And no valid complaint will 
fall through the cracks if it is not answered personally.'' 
What is the phone number?
    Secretary Shulkin. Yeah. I don't have the phone number yet, 
but let me give you an update on it. I just don't have the 
phone number.
    Mr. Walz. It comes out of your budget, am I right?
    Secretary Shulkin. What?
    Mr. Walz. In my time honored Minnesota passive 
aggressiveness I ask that question. But in the real sight of 
things this is a drain on your IT budget. Is it going to happen 
or not?
    Secretary Shulkin. It is going to happen because the 
President has committed that it is going to happen. The full 
system, the full White House hotline will be up towards the end 
of the August. But we are going to be doing what I call a soft 
launch June 1st, which is that calls will be sent from the 
White House and answered as the White House hotline. But it is 
going to take us until the end of August to get a contract in 
place to be able to do this with professional call contract 
centers. But June 1st you will see a soft launch of this.
    Mr. Walz. And we will get a cost estimate by then?
    Secretary Shulkin. You will get cost--we are very conscious 
that we want to do this in a cost efficient way.
    Mr. Walz. Right. Thank you. I yield back.
    Mr. Roe. Thank you, gentleman, for yielding. Mrs. Gonzalez-
Colon, go on. You are recognized.
    Ms. Gonzalez-Colon. Thank you, Mr. Chairman. And thank you, 
Mr. Secretary, for yesterday's meeting and all your efforts.
    Secretary Shulkin. Uh-huh.
    Mr. Gonzalez-Colon. I saw the question by Mr. Banks about 
the construction funds. And I see that budget does not include 
a significant allocation for construction funds. And I see how 
and why. You just explained that. And I understand the reasons 
for that. However, there is only one VA hospital in our island, 
as you may know, and one state home. And although we got some 
satellite clinics we need to expand for better facilities for 
our veterans. What may be your thoughts on that issue for our 
island? What can we--what can be done in that matter?
    Secretary Shulkin. In terms of infrastructure improvements?
    Ms. Gonzalez-Colon. Yes.
    Secretary Shulkin. Mark, does our budget yet indicate how 
much money will be allocated to the VISN and to the facility?
    Mr. Yow. Are we talking about specifically--
    Secretary Shulkin. San Juan.
    Mr. Yow [continued]. --infrastructure?
    Secretary Shulkin. Yeah.
    Mr. Yow. I would have to go back and look at the list. But 
we have NRM projects across all of VISNs. So I imagine there 
will be some. But we can get you a specific amount.
    Ms. Gonzalez-Colon. Yeah.
    Secretary Shulkin. Yeah. If you will let us follow up with 
you on the specific projects, we would be glad to do that.
    Ms. Gonzalez-Colon. Thank you. And one of the issues is a 
mental health residential clinic. Right now we just got 30 beds 
for mental health patients. As you may know we got more than 
maybe 3,000 veterans in Puerto Rico. So it is--30 beds are not 
enough. Mostly when we attend, not only Puerto Rican veterans, 
but people coming from the US Virgin Islands. So it is more of 
an issue for us. We just saw that according to the job 
announcements issued by the VA, the salary of the specialists 
of more than 100,000 to 300,000 in the cases of, you know, 
specialists, neurologists, orthopedics, psychiatrists, and 
other people that I needed in the VA hospital. We got a 
shortage of medical specialists in the VA hospital in Puerto 
Rico. That money has been allocated in the budget to hire those 
positions in our hospital?
    Secretary Shulkin. You are talking about money to hire the 
needed positions or increased salaries?
    Ms. Gonzalez-Colon. The money to hire those positions.
    Secretary Shulkin. Yeah. I mean San Juan has a budget that 
will be negotiated with the VISN. I mean, Mark, do you know--we 
can--we would be glad to sit down with you and review with you 
the San Juan budget. But I don't think we have that information 
here, do we?
    Mr. Yow. I don't have it here. But it is largely driven by 
the amount--
    Ms. Gonzalez-Colon. We can coordinate that later on then.
    Secretary Shulkin. Yeah.
    Ms. Gonzalez-Colon. Because I need--I know that the 
shortage of those medical specialists it is a situation that is 
going worse and worse. Not only in San Juan, in satellite 
clinics and other issues. And with that I yield back my time. 
Thank you, Mr. Chairman.
    Mr. Roe. Thank you, gentlelady, for yielding. First of all 
I want to thank you all for being here today. It has been 
great. I was just looking at how many Members participated. 
There were multiple meetings across the campus today. And it 
shows you the interest in the VA. And I will now ask unanimous 
consent that all Members have five legislative days to revise 
and extend their remarks and include extraneous material. 
Without objection so ordered. And, Mr. Walz, do you have any 
closing comments?
    Mr. Walz. Well, thank you, Mr. Chairman. Mr. Secretary, 
thank you. As always, you have done nothing other than gain the 
trust of this Committee. You have done nothing except serve 
veterans. You have done nothing but come to this Committee 
since your time here with solution based problem solving in an 
honorable way. So our pledge to you is to work and do 
everything we can to make sure you have the resources and the 
authority to serve our veterans. So I thank you for that.
    Secretary Shulkin. Thank you.
    Mr. Roe. And I will associate my remarks with Mr. Walz. And 
also mention that we have had a lot of--we just got the budget 
yesterday and obviously we--it is going to take us some time, 
both sides of the aisle to go through this. So we will--
probably both sides will be submitting some questions to you 
all that we didn't have time to get to today. And we would 
appreciate as quick a turnaround as we could get.
    And just to make sure that our viewing audience and our 
VSOs and so forth and our veterans out there as we approach 
this Memorial Day understand, there is a commitment on the 
administration's part to grow--the VA and health care providers 
are growing. This budget grows the number of health care 
providers, not shrinks them. So I think that from what I have 
looked right here and from what I have seen at a preliminary 
blush it certainly does that and supports the VA's primary 
mission, which is to take care of our veterans.
    I once again want to thank all of you all. You were very 
open, Mr. Secretary, with having the whole Committee over at 
your shop yesterday. And I would like to take this opportunity 
to wish both the Committee and everyone and the veterans out 
there a happy Memorial Day.
    Secretary Shulkin. Thank you.
    Mr. Roe. This meeting is adjourned. I lost my gavel here.

    [Whereupon, at 3:35 p.m., the Subcommittee was adjourned.]




                            A P P E N D I X

                              ----------                              

         Prepared Statement of Honorable David J. Shulkin, M.D.
    Good morning, Chairman Roe, Ranking Member Walz, and Distinguished 
Members of the House Committee on Veterans' Affairs. Thank you for the 
opportunity to testify today in support of the President's 2018 Budget 
and 2019 Advance Appropriation (AA) Request and to define my priorities 
to continue the dynamic transformation within the Department of 
Veterans Affairs (VA). I am accompanied today by Edward Murray, Acting 
Assistant Secretary for Management and Acting Chief Financial Officer; 
Rob Thomas, Acting Assistant Secretary for Information and Technology 
and Acting Chief Information Officer; Mark Yow, Chief Financial Officer 
for the Veterans Health Administration; James Manker, Acting Principal 
Deputy Under Secretary for Benefits in the Veterans Benefits 
Administration; and Matthew Sullivan, Deputy Under Secretary for 
Finance and Planning for the National Cemetery Administration. I also 
want to thank Congress for providing the Department its full 2017 
budget prior to the start of the Fiscal Year - this is significant and 
has been extremely beneficial to our ability to provide services and 
care to Veterans. The 2018 budget request fulfills the President's 
strong commitment to all of our Nation's Veterans by providing the 
resources necessary for improving the care and support our Veterans 
have earned through sacrifice and service to our country.
                  Fiscal Year (FY) 2018 Budget Request
    The President's 2018 budget requests $186.5 billion for VA--$82.1 
billion in discretionary funding (including medical care collections), 
of which $66.4 billion was previously provided as the 2018 AA for 
Medical Care. The discretionary request is an increase of $4.3 billion, 
or 5.5 percent, over 2017. It will improve patient access and 
timeliness of medical care services for over 9 million enrolled 
Veterans, while improving benefits delivery for our Veterans and their 
beneficiaries. The President's 2018 budget also requests $104.3 billion 
in mandatory funding, of which $103.9 billion was previously provided, 
such as disability compensation and pensions, and for continuation of 
the Veterans Choice Program (Choice Program).
    For the 2019 AA, the budget requests $70.7 billion in discretionary 
funding for Medical Care and $107.7 billion in in 2019 mandatory 
advance appropriations for Compensation and Pensions, Readjustment 
Benefits, and Veterans Insurance and Indemnities benefits programs in 
the Veterans Benefits Administration. The budget also requests $3.5 
billion in mandatory budget authority in 2019 for the Choice Program.
    This budget request will ensure the Nation's Veterans receive high-
quality health care and timely access to benefits and services. I urge 
Congress to support and fully fund our 2018 and 2019 AA budget requests 
- these resources are critical to enabling the Department to meet the 
increasing needs of our Veterans.
                             Modernizing VA
    As you all know, I was part of the VA team for the last year and a 
half prior to being confirmed as the Secretary of Veterans Affairs. I 
came to VA during a time of crisis, when it was clear Veterans were not 
getting the timely access to high-quality health care they deserved. I 
soon discovered that years of ineffective systems and deficiencies in 
workplace culture led to these problems. I know that the organization 
has made significant progress in improving care and services to 
Veterans. But I also know that VA needs more changes to the way we do 
business for Veterans and the country as a whole, in order for all to 
say, ``That is a different organization now.'' VA needs to continue to 
fix numerous areas of the business, including access, claims and 
appeals processing, and many of our core functions, to ensure that the 
basics are done correctly. Beyond that, VA has to deliver to Veterans 
revolutionary leaps in care, benefits, and services. Congress, along 
with our VA employees, Veterans Service Organizations (VSO), and 
private industry, will play a critical role in making those 
revolutionary leaps a reality.

Focus on Execution

    Above all else, VA needs to perform its core functions well. When 
Veterans arrive at a VA facility for care, they must be treated with 
respect, see a clean and modern facility, be seen by their provider on 
time, and understand what the next steps for their care will be. 
Veterans should be able to receive clear and accurate information about 
their claims and understand where they are in the process. We must 
ensure that this is every Veteran's experience every time they interact 
with VA. Where we fall short, we will hold employees accountable, 
ensure we are good stewards of the taxpayer dollar, and ask for 
Congress's support for legislative fixes where needed.

Make Bold Change

    We know it is paramount that we increase our focus and intensify 
the efforts to improve how we execute our mission - Veterans should and 
do expect that from us. We also recognize that incremental change is 
not sufficient to achieve the additional improvements VA and Veterans 
need and demand for restoring the trust of Veterans and the American 
public.
    As I have noted, VA is a unique national resource that is worth 
saving, and I am committed to doing just that. Veterans have unique 
needs, and the services VA provides to Veterans often cannot be found 
in the private sector. The Veterans Health Administration (VHA) 
provides support to Veterans through primary care, specialty care, peer 
support, crisis lines, transportation, the Caregivers program, 
homelessness services, vocational support, behavioral health 
integration, medication support, and a VA-wide electronic medical 
record system. These services and supports are unparalleled. We also 
know that VA hospitals perform well on quality compared to non-VA 
hospitals. In a study published in the Journal of American Medical 
Association (JAMA) Internal Medicine in April, researchers compared 
hospital-level quality data on 129 VA hospitals and 4,010 non-VA 
hospitals obtained through the Centers for Medicare and Medicaid's 
website. They found VA hospitals had better outcomes than non-VA 
hospitals on six of nine patient safety indicators, and there were no 
significant differences on the other three indicators. VA hospitals 
also had better mortality and readmission rates than non-VA hospitals. 
With the continued support of Congress, VA will supplement its services 
through private-sector health care, but we realize it is not a 
replacement for the services VA provides to Veterans.
    We are already implementing bold changes in the agency. We are 
working hard to ensure employees are held accountable to the highest of 
standards and working with Congress to provide us with greater 
authority and flexibility to do that. We are also working with Congress 
on appeals reform and on a long-term solution for providing greater 
community care options. I will discuss these efforts in greater detail 
below.
                            Five Priorities
    As I prepared for my confirmation hearing earlier this year, I 
identified my top priorities to address as Secretary. These areas have 
shaped the first several months of my tenure and provide focus for our 
attention and resources, and the foundation for rebuilding trust with 
our Veterans. We will also use the budgeting process to support our 
strategy by shifting resources toward our ``foundational services'' 
that make VA unique while maintaining support to our strategic 
priorities.

Priority 1: Greater Choice for Veterans

    The Choice Program is a critical program that has increased access 
to care for millions of Veterans. Coming into this new administration, 
extending the Choice Program was one of my top priorities for quick 
action, as VA anticipated that based on Veteran program participation, 
there would be an estimated $1.1 billion in unobligated funds left on 
the original expiration date of August 7, 2017. On April 19, 2017, the 
President signed into law the Veterans Choice Program Improvement Act 
(Public Law 115-26), allowing the Choice Program to continue until the 
Veterans Choice Fund is exhausted. Without this legislation, VA would 
have been unable to use funding specifically appropriated for the 
Choice Program by Congress, so we commend Congress for passing this 
legislation swiftly and in a bipartisan manner. This legislation also 
provides VA and Congress more time to develop a long-term solution for 
community care.
    Since the start of the Choice Program, over 1.6 million Veterans 
have received care through the program. In FY 2015, VA issued more than 
380,000 authorizations to Veterans through the Choice Program. In FY 
2016, VA issued more than 2,000,000 authorizations to Veterans to 
receive care through the Choice Program, more than a fivefold increase 
in the number of authorizations from 2015 to 2016.
    Looking at early data for 2017, it is expected that Veterans will 
benefit even more this year than last year from the Choice Program. In 
the first quarter of FY 2017, we have seen a more than 30 percent 
increase from the same period in FY 2016 in terms of the number of 
Choice authorizations. In addition to increasing the number of Veterans 
accessing care through the Choice Program, VA is working to increase 
the number of community providers available through the program. In 
April 2015, the Choice Program network included approximately 200,000 
providers and facilities. As of March 2017, the Choice Program network 
has grown to over 430,000 providers and facilities, a more than 150 
percent increase during this time period.
    As these numbers demonstrate, demand for community care is high. In 
2018, VA plans to spend a total of $13.2 billion to support community 
care for Veterans. Community care will be funded by a discretionary 
appropriation of $9.4 billion for the Medical Community Care account 
($254 million above the enacted advance appropriation), plus $2.9 
billion in new mandatory budget authority for the Choice Program. This, 
combined with an estimated $626 million in carryover balances in the 
Veterans Choice Fund, provides a total of $13.2 billion in 2018 for 
community care.
    VA will continue to partner with Congress to develop a community 
care program that addresses the challenges we face in achieving our 
common goal of providing the best health care and benefits we can for 
our Veterans. We have also worked with and received crucial input from 
Veterans, community providers, VSOs, and other stakeholders in the 
past, and we will continue doing so going forward. However, we do need 
your help.
    One such area is in modernizing and consolidating community care. 
Veterans deserve better, and now is the time to get this right. We are 
committed to moving care into the community where it makes sense for 
the Veteran. The ultimate judge of our success will be our Veterans, 
and our only measure of success will be our Veterans' satisfaction. 
With your help, we can continue to improve Veterans' care in both VA 
and the community.

    Empower Veterans through Transparency of Information

    We are also increasing transparency and empowering Veterans to make 
more informed decisions about their health care through our new Access 
and Quality Tool (available at www.accesstocare.va.gov). This Tool 
allows Veterans to access the most transparent and easy to understand 
wait-time and quality-care measures across the health care industry. 
That means Veterans can quickly and easily compare access and quality 
measures across VA facilities and make informed choices about where, 
when, and how they receive their health care. Further, they will now be 
able to compare the quality of VA medical centers to local private 
sector hospitals. This Tool will take complex data and make it 
transparent to Veterans. This new Tool will continue to improve as we 
receive feedback from Veterans, employees, VSOs, Congress, and the 
media.

Priority 2: Modernizing our System

    Infrastructure Improvements and Streamlining

    In 2018, VA will focus on fixing VA's infrastructure while we 
transform our health care system to an integrated network to serve 
Veterans. This budget requests $512.4 million in Major Construction 
funding as well as $342.6 million in Minor Construction for priority 
infrastructure projects. This funding supports projects including a new 
outpatient clinic in Livermore, CA, as well as gravesite expansions in 
Sacramento, CA; Bushnell, FL; Elwood, IL; Calverton, NY; Phoenix, AZ; 
and Bridgeville, PA. VA is also requesting $953.8 million to fund more 
than 2,000 medical leases in FY 2018, an increase of $141.9 million 
over the FY 2018 AA, and $862 million for activation of new medical 
facilities. In 2018, VA is seeking Congressional authorization of 27 
major medical leases. The majority of these leases have been included 
in previous budget requests, some dating back to the FY 2015 budget 
submission. These major medical leases are vital to establish new 
points of care, expand sites of care, replace expiring leases, and 
expand VA's research capabilities.
    The 2018 budget submission includes proposed legislative requests 
that if enacted, would increase the Department's flexibility to meet 
its capital needs. These proposals include: 1) increasing from $10 
million to $20 million the dollar threshold for minor construction 
projects; 2) modifying title 38 to eliminate statutory impediments to 
acquiring joint facility projects with DoD and other Federal agencies; 
and 3) expanding VA's enhanced use lease (EUL) authority to give VA 
more opportunities to engage the private sector and local governments 
to repurpose underutilized VA property.
    The Department is also a key participant in the White House 
Infrastructure Initiative to explore additional ways to modernize and 
obtain needed upgrades to VA's real property portfolio to support our 
continued delivery of quality care and services to our Nation's 
Veterans. We are excited about the opportunity to transform the way we 
approach our infrastructure.

    Electronic Health Record Interoperability and IT Modernization

    The 2018 Budget continues VA's investment in technology to improve 
the lives of Veterans. The planned IT investments prioritize the 
development of replacements for specific mission critical legacy 
systems, as well as operations and maintenance of all VA IT 
infrastructures essential to deliver medical care and benefits to 
Veterans. The request includes $358.5 million for new development to 
replace four specific mission critical legacy systems, including the 
Financial Management System, and establish an Integrated Project Team 
to develop the requirements and acquisition strategy for a new 
enterprise health information platform. It also invests $340 million 
for information security to protect Veterans' information and improve 
VA's information networks' resilience.
    The 2018 budget submission includes a proposed legislative request 
that if enacted, would increase the Departments ability to apply agile 
program management to the dynamics of modern Information Technology 
development requirements. To do this, the Department recommends 
advancing the transfer threshold from $1 million to $3 million between 
development project lines, which equates to less than 1 percent of the 
Development account. Through the Certification process, Congress will 
maintain visibility of proposed changes.
    VA recognizes that a Veteran's complete health history is critical 
to providing seamless, high-quality, integrated care, and benefits. 
Interoperability is the foundation of this capability, by making 
relevant clinical data available at the point of care and enabling 
clinicians to provide Veterans with prompt, effective care. Today, VHA, 
the Veterans Benefits Administration (VBA), and the Department of 
Defense (DoD) share more medical information than any public or private 
health care organization in the country. We have developed and 
deployed, in close collaboration with DoD, the Joint Legacy Viewer 
(JLV). JLV is available to all clinicians in every VA facility. It is a 
web-based user interface that provides clinicians with an intuitive 
display of DoD and VA health care data on a single screen. VA and DoD 
clinicians can use JLV to access the health records of Veterans, Active 
Duty, and Reserve Servicemembers from all VA, DoD, and any third party 
community providers who participate in Health Information Exchanges 
where a patient has received care. Multiple releases of Community Care 
applications, including JLV-Community Viewer, Community Provider 
Portal, and Virtru Pro Secure Email have enhanced care coordination 
with Community Providers through multiple methods of exchanging health 
records and multiple modes of communication improving the care the 
Veteran receives and allowing Community Providers not in Health 
Information Exchanges the ability to share medical documentation.
    VA will complete the next iteration of the VistA Evolution Program, 
VistA 4, in 2018. VistA 4 will bring improvements in efficiency and 
interoperability, and will continue VistA's award-winning legacy of 
providing a safe, efficient health care platform for providers and 
Veterans. VistA Evolution funds have enabled investments in systems and 
infrastructure that support interoperability, networking and 
infrastructure sustainment, continuation of legacy systems, and efforts 
such as clinical terminology standardization. These investments are 
critical to the maintenance and deployment of the existing and future 
modernized VistA and essential to operational capability. Whether the 
path forward is to continue with VistA, shift to a commercial 
electronic health record (EHR) platform, or some combination of both, 
these investments will deliver value for Veterans and VA providers.
    We are considering all options from adopting a commercial off the 
shelf (COTS) EHR to retaining an enhanced and standardized VistA. A 
decision will be made in July 2017, when the reviews are complete and 
all the pertinent information is available. The goal is to make a 
decision that will best serve Veterans' needs.
    One critical system that will touch the delivery of all health and 
benefits is our new financial management system, which is under 
development. The 2018 budget continues modernizing our financial 
management system by transforming the Department from numerous 
stovepipe legacy systems to a proven, flexible, shared service business 
transaction environment. The budget requests $83 million in Information 
Technology funds and $61.6 million for business process re-engineering 
to support Financial Management Business Transformation (FMBT) across 
the Department.

Priority 3: Focus Resources More Efficiently

    Strengthening of Foundational Services in VA

    VA is committed to providing the best access to care for Veterans. 
To deliver the full care spectrum as defined in VA's medical benefits 
package, VA will focus on its foundational services-those areas in 
which it can excel-and build community partnerships for complementary 
services. VA developed the following guiding principles, centered on 
improving the health, well-being, and experience of Veterans receiving 
care from VA and in the community. These principles include:

      Enabling VA to provide access to high-quality care for 
Veterans, by balancing services provided by VA and the community given 
changing demands for care and resource limitations;
      Promoting operational efficiency and simplicity, while 
supporting VA's clinical care, education, and research missions; and
      Allowing facilities to meet the changing needs of 
Veterans in a flexible way.

    High-performing organizations cannot excel at every capability and 
thus must make decisions about how best to invest its resources. VA 
will therefore further define and grow its foundational services to 
excel in the provision of clinical care to Veterans.
    Investing in foundational services within the Department is not 
limited to only health care. For over a decade, VA's National Cemetery 
Administration (NCA) has achieved the highest customer satisfaction 
rating of any organization - public or private - in the country. They 
achieved this designation through the American Customer Satisfaction 
Index six consecutive times. The President's 2018 Budget recognizes the 
need to nurture and advance this unprecedented success with a request 
for $306.2 million for NCA in 2018, an increase of $20 million (7 
percent) over 2017. This request will support the 1,881 FTE needed to 
meet NCA's increasing workload and expansion of services. In 2018, NCA 
will inter approximately 133,600 Veterans and eligible family members, 
care for over 3.7 million gravesites, and maintain 9,400 acres. NCA 
will continue to memorialize Veterans by providing 366,000 headstones 
and markers, distributing 702,000 Presidential Memorial Certificates 
and expanding the Veterans Legacy program to communities across the 
country. VA is committed to investing in NCA infrastructure, 
particularly to keep existing national cemeteries open and to construct 
new cemeteries consistent with burial policies approved by Congress. In 
addition to NCA's funding, the 2018 request includes $255.9 million in 
major construction funds for six gravesite expansion projects. When all 
new cemeteries are opened, nearly 95 percent of the total Veteran 
population - about 20 million Veterans - will have access to a burial 
option in a Veterans' cemetery within 75 miles of their home.

    VA/DoD/Federal Coordination

    VA has proposed legislation to eliminate certain statutory 
impediments to VA more effectively pursuing joint projects with other 
Federal agencies, including DoD. Today, medical facilities that are not 
specifically under the jurisdiction of the Secretary require specific 
statutory authorization for optimal collaboration. I look forward to 
working with Congress to: (1) enhance our ability to coordinate with 
DoD and other Federal agencies; (2) improve the access, quality, and 
cost effectiveness of direct health care provided to Veterans, 
Servicemembers, and their beneficiaries; (3) permit joint capital asset 
planning and capital investments to design, construct, and utilize 
shared medical facilities; and (4) provide authority for VA to procure 
the use of joint medical facilities for itself and other Federal 
agencies like DoD, and to transfer funds between VA and other Federal 
agencies for such initiatives.

    Deliver on Accountability and Effective Management Practices

    Another critical area in which VA is serious about making 
significant changes relates to employee accountability. The vast 
majority of employees are dedicated to providing Veterans the care they 
have earned and deserve. It is unfortunate that certain employees have 
tarnished the reputation of VA and so many who have dedicated their 
lives to serving our Nation's Veterans. We will not tolerate employees 
who deviate from VA's I-CARE values and underlying responsibility to 
provide the best level of care and services to them. We support 
Congress' ongoing efforts to provide VA with the tools it needs to take 
timely action against employees who perform poorly or engage in 
misconduct. Where employees engage in inappropriate behavior, do not 
perform the duties of their job, are engaged in illegal activities, or 
otherwise do not meet the standards we expect of VA employees, we want 
the ability to ensure they can be promptly removed. Certain laws hamper 
our ability to optimally hold our employees accountable and remove 
those individuals that run afoul of my intent for the Department to 
function as a high-performing organization. We support legislation that 
is consistent with the following principles:

      Increase flexibility to remove, demote, or suspend VA 
employees for poor performance or misconduct;
      Provide authority to recoup bonuses of employees for poor 
performance or misconduct;
      Enable recovery of relocation expenses that occur through 
fraud or malfeasance; and
      Ensure that VA has the ability to retain high performers 
by paying them a salary that is competitive with the private sector and 
performance awards that are commensurate with other federal agencies.

    We thank the House for passing critical accountability legislation 
- but while that process continues, we are also focused on updating 
internal hiring practices. VHA is the largest health care system in the 
United States, and in an industry where there is a national shortage of 
health care providers, VHA faces competition with the commercial sector 
for scarce resources. Historically, VA has followed hiring practices 
that have proven unduly burdensome. Over the past year, VHA's business 
process improvement efforts have resulted in a more efficient hiring 
process. We were able to reduce the time it took to hire Medical Center 
Directors by 40 percent and obtained approval from the Office of 
Personnel Management (OPM) for critical position pay authority for many 
of our senior health care leaders. We recognize there is much work left 
to do. As we strive to find internal solutions, we look forward to 
working together on legislation to reform recruitment and compensation 
practices to stay competitive with the private sector and other 
employers.
    To ensure that VA's management practices are effective, I have 
announced a major initiative to improve our ability to detect and 
prevent fraud, waste, and abuse within VA. The initiative includes:

      forming a fraud, waste, and abuse advisory committee 
comprised of experts from the private sector and other government 
organizations;
      identifying cutting edge tools and technologies available 
in the private sector; and
      coordinating all fraud, waste, and abuse detection and 
reporting activities through a single office.

    With these improvements, VA has the potential to save millions of 
taxpayer dollars and more effectively serve America's Veterans. I look 
forward to updating you in the future regarding this initiative.

Priority 4: Improve Timeliness of Services

    Access to Care and Wait Times

    VA is committed to delivering timely and high quality health care 
to our Nation's Veterans. Veterans now have same-day services for 
primary care and mental health care at all VA medical centers across 
our system. I am also committed to ensuring that any Veteran who 
requires urgent care will receive timely care.
    In March 2017, 96.82 percent of appointments, 5.15 million 
appointments, were completed within 30 days of the clinically-indicated 
or veteran's-preferred date, and as of April 15, 2017, VHA has reduced 
and the Electronic Wait List from 56,271 entries to 22,383 entries, a 
60.2 percent reduction between June 2014 and April 2017. The Electronic 
Wait List reflects the total number of all patients for whom 
appointments cannot be scheduled in 90 days or less.
    In 2018, VA will expand Veteran access to medical care by 
increasing medical and clinical staff, improving its facilities, and 
expanding care provided in the community. The 2018 Budget requests a 
total of $75.2 billion in funding for Veterans' medical care, which 
includes the following:

      $69.0 billion in discretionary budget authority ($2.65 
billion above the 2018 AA enacted level of $66.4 billion and a $4.6 
billion (7.1 percent) increase over the 2017 enacted level);
      $2.9 billion in mandatory budget authority to continue 
the Veterans Choice Program; and
      $3.3 billion in medical care collections.

    The 2018 request will support nearly 315,000 medical care staff, an 
increase of over 7,000 above the 2017 level.

    Through the Choice Program, VHA and its contractors created more 
than 3.6 million authorizations for Veterans to receive care in the 
private sector from February 1, 2016 through January 31, 2017. This 
represents a 23 percent increase in authorizations when compared to the 
period February 1, 2015 through January 31, 2016. When looking at 
overall appointment data not specific to the Choice Program, the March 
15, 2017, pending appointment data set shows VA has increased the 
number of overall pending appointments ``in house'' by nearly 1.8 
million over the same data the prior year. According to the same data, 
the number of appointments scheduled greater than 30 days from the 
Veterans clinically indicated data or preferred date has decreased by 
3.9 percent (19,645) since the beginning of FY 2017.

    Accelerating Performance on Disability Claims

    Since 2013, VA has made remarkable progress toward reducing the 
backlog of disability compensation claims pending over 125 days and is 
working to use more effectively the resources provided by Congress. 
VBA's 2018 budget request of $2.8 billion allows VBA to maintain the 
improvements made in claims processing over the past several years. 
This budget supports the disability compensation benefits program for 
4.6 million Veterans and 420,000 Survivors. VBA implemented new 
professional standards for Veterans Service Representatives (VSR) on 
March 1, 2017. In May 2016, VBA implemented the National Work Queue 
(NWQ) process. This allows VBA to prioritize and quickly distribute 
disability compensation claims according to processing capacity within 
VBA's regional footprint, regardless of the Veteran's place of 
residence. The NWQ process enables VA to more effectively balance the 
workloads nationally, relative to the productive capacity at each 
regional office. This means that Veterans who live in a location where 
claims decisions take longer, VBA can appropriately adjust capacity to 
match the changes in claims volume. In FY 2017, VBA added non-rating 
related claims to the NWQ. VBA has completed nearly 1.7 million non-
rating claims from October 2016 through the end of April 2017. The 
effort to address non-rating claims has resulted in a 269,000 claim 
reduction in the dependency claims inventory since August 2015, from 
359,000 to less than 90,000.
    To continue improving disability compensation claim processing, VBA 
is currently piloting an initiative called Decision Ready Claims (DRC). 
The DRC initiative offers veterans and survivors faster claims 
decisions in which VSOs and other accredited representatives assist 
Veterans with ensuring all supporting medical evidence is included with 
the claim at the time of submission. The DRC initiative empowers 
Veterans by allowing them to receive medical examinations as early as 
possible in the claims process. This initiative also enhances 
partnerships with VSOs by improving access and capabilities to assist 
with gathering all required evidence and information to accelerate 
claims decisions. Submission of claims submitted through the DRC 
process will result in claim decisions within 30 days of submission to 
VA.

    Decisions on Appeals

    The current VA appeals process undoubtedly needs further 
improvements for our Nation's Veterans. As of April 30, 2017, VA had 
470,546 pending appeals. The average processing time for all appeals 
resolved by VA in FY 2016 was approximately 3 years. For those appeals 
that were decided by the Board of Veterans' Appeals (the Board) in FY 
2016, on average, Veterans waited at least 6 years from filing their 
Notice of Disagreement until the Board's decision was issued that year.
    The 2018 request of $155.6 million for the Board continues the 
funding level enacted for 2017, which was a 42 percent increase over 
2016. In combination with carryover resources from 2017, the requested 
funding will support a total of 1,050 FTE, an increase of 164 FTE above 
the 2017 estimate of 886 FTE. This request maintains the increased 
budgetary authority the Board received in 2017. In addition, VBA's 
request of $185 million for appeals processing maintains its current 
level of appeals FTE at 1,495. This funding level in tandem with 
sweeping legislative reform initiates a long-term strategy aimed at 
improving the timeliness of appeals for Veterans and is the best policy 
option for taxpayers.
    Without significant legislative reform to modernize the appeals 
process, Veteran wait times and the cost to taxpayers will only 
increase. Comprehensive legislative reform is necessary to replace the 
current lengthy, complex, confusing VA appeals process with a new 
process that makes sense for Veterans, their advocates, VA, and other 
stakeholders. This reform is crucial to enable VA to provide the best 
service to Veterans and is one of my top priorities.
    VA worked collaboratively with VSOs and other stakeholders to 
design this new process for Veterans who disagree with a VA decision. 
The result of that work was a legislative proposal that was introduced 
in the 114th Congress and has been reintroduced in the 115th Congress. 
The proposed process: (1) establishes multiple options for Veterans 
instead of the single option available today; (2) provides early 
resolution of disagreements and improved notice as to which option 
might be best; (3) eliminates the inefficient churning of appeals that 
is inherent in the current process; (4) features quality feedback loops 
to VBA; and (5) improves transparency by clearly defining VBA as the 
claims agency and the Board as the appeals agency in VA. This clear 
definition between VBA and the Board also provides workload 
transparency for better workload/resource projections, and efficient 
use of resources for long-term savings.
    The new process, described in the legislation currently pending, 
will provide a modernized process going forward. However, VA is also 
committed to concurrently reducing the pending inventory of legacy 
appeals. VA has worked collaboratively with stakeholders to identify 
opt-ins that would make the new process available to Veterans who would 
otherwise have an appeal in the legacy process. After assessing these 
various options, and collaborating with our partners, we have 
identified two opt-ins that we intend to implement to address the issue 
of the legacy appeals inventory.
    The legislation must be enacted now to fix this process. It has 
wide stakeholder support and the longer we wait to enact this 
legislative reform, the more appeals enter the current, broken system. 
The status quo is not acceptable for our Nation's Veterans. The new 
process will provide much needed comprehensive reform to modernize the 
VA appeals process and provide Veterans a decision on their appeal that 
is timely, transparent, and fair.

Priority 5: Suicide Prevention - Eliminating Veteran Suicide

    Every suicide is tragic, and regardless of the numbers or rates, 
one Veteran suicide is too many. Suicide prevention is VA's highest 
clinical priority, and we continue to spread the word throughout VA 
that ``Suicide Prevention is Everyone's Business.'' The 2018 Budget 
requests $8.4 billion for Veterans' mental health services, an increase 
of 6 percent above the 2017 level. It also includes $186.1 million for 
suicide prevention outreach. VA recognizes that Veterans are at an 
increased risk for suicide and implemented a national suicide 
prevention strategy to address this crisis. VA is bringing the best 
minds in the public and private sectors together to determine the next 
steps in implementing the Eliminating Veteran Suicide Initiative. VA's 
suicide prevention program is based on a public health approach that is 
ongoing, utilizing universal, selective, indicated strategies while 
recognizing that suicide prevention requires ready access to high 
quality mental health services, supplemented by programs that address 
the risk for suicide directly. VA's strategy for suicide prevention 
requires ready access to high quality mental health (and other health 
care) services supplemented by programs designed to help individuals 
and families engage in care and to address suicide prevention in high-
risk patients.
    As part of VA's commitment to put forth resources, services, and 
technology to reduce Veteran suicide, VA initiated the Recovery 
Engagement and Coordination for Health Veterans Enhanced Treatment 
(REACH VET). This new program was launched by VA in November 2016 and 
was fully implemented in February 2017. REACH VET uses a new predictive 
model in order to analyze existing data from Veterans' health records 
to identify those who are at a statistically elevated risk for suicide, 
hospitalization, illnesses, and other adverse outcomes. Not all 
Veterans who are identified have experienced suicidal ideation or 
behavior. However, REACH VET allows VA to provide support and pre-
emptive enhanced care in order to lessen the likelihood that the 
challenges these Veterans face will become a crisis.

    Other than Honorable Expansion

    We know that 14 of the 20 Veterans who on average commit suicide 
each day did not, for various reasons, receive care within VA. Our goal 
is to more effectively promote and provide care and assistance to such 
individuals to the maximum extent authorized by law. In that regard, VA 
intends to expand access to emergent mental health care for former 
Servicemembers, who separated from active duty with other than 
honorable (OTH) administrative discharges. This initiative specifically 
focuses on expanding access to former Servicemembers with OTH 
administrative discharges who are in mental health distress and may be 
at risk for suicide or other adverse behaviors. VA estimates there are 
more than 500,000 former Servicemembers with OTH administrative 
discharges. As part of this initiative, former Servicemembers with OTH 
administrative discharges who present to VA seeking mental health care 
in emergency circumstances for a condition the former Servicemember 
asserts is related to military service would be eligible for evaluation 
and treatment for their mental health condition. Such individuals may 
access the system for emergency mental health services by visiting a VA 
emergency room, outpatient clinic, Vet Center, or by calling the 
Veterans Crisis Line. Services may include: medication management/
pharmacotherapy, lab work, case management, psycho-education, and 
psychotherapy. We intend to carry this initiative out within our 
existing resources because it is the right thing to do for Veterans.

Closing

    Thank you for the opportunity to appear before you today to address 
our 2018 budget and 2019 Advance Appropriations budget requests and to 
provide you with the priorities that I am taking to ensure VA is viewed 
with pride from Veterans and beneficiaries for the services provided to 
them. I ask for your steadfast support in funding our full FY 2018 and 
FY 2019 AA budget requests and continued partnership in making bold 
changes to improve our ability to serve Veterans. I look forward to 
your questions.

                                 
                       Statements For The Record

                          THE AMERICAN LEGION
                      MATTHEW J. SHUMAN, DIRECTOR
    Chairman Roe, Ranking Member Walz, and Members of the Committee; On 
behalf of Charles E. Schmidt, the National Commander of the largest 
Veteran Service Organization in the United States of America 
representing more than 2.2 million members; we welcome this opportunity 
to comment on the federal budget and specific funding programs of the 
Department of Veterans Affairs (VA).
    The American Legion is a resolution based organization. We are 
directed and driven by the millions of active Legionnaires who have 
dedicated their money, time, and resources to the continued service of 
veterans and their families. Our positions are guided by nearly 100 
years of advocacy and resolutions that originate at the grassroots 
level of the organization - the local American Legion posts and 
veterans in every congressional district of America. The Headquarters 
staff of the Legion works daily on behalf of veterans, military 
personnel, and our communities through roughly 20 national programs and 
hundreds of outreach programs led by our posts across the country.
    As the Department of Veterans Affairs moves forward to serve the 
veterans of this nation, it is important that the Secretary have the 
tools and resources necessary to ensure that veterans served by VA 
receive the services they are entitled to in a timely, professional, 
and courteous manner - because they have earned it. During the past two 
years, VA has grown in resources and services as was necessary to 
backfill gaps in funding based on the patient population VHA is 
required to serve. The American Legion calls on this Congress to ensure 
that funding is maintained and increased as necessary to ensure the VA 
is preserved and enhanced to serve the veterans of the 21st century, 
and beyond.
    Sustainability, accountability, information technology (IT) 
integration and updates, facilities repair, construction, staff 
recruiting, and of course, health care are paramount programs that need 
to be immediately addressed and funded, and The American Legion has 
testified on the need for increased funding for each of these programs 
within the past several months alone.
                      Ensuring Proper VA Staffing
    Unfortunately, there are no easy solutions for VHA when it comes to 
effectively and efficiently recruiting and retaining staff at VA 
healthcare facilities, but that doesn't necessarily mean that throwing 
additional funding at the problem is the answer. The American Legion 
believes that access to basic health care services offered by qualified 
primary care providers should be available locally, and by a VA health 
care professional as often as possible at all times.
    While the VA's Academic Residency Program has made significant 
contributions in training VA health care professionals, upon 
graduation, many of these health care professionals choose a career 
outside the VA health care system. The VA will never be in a position 
to compete with the private sector. To this end, The American Legion 
feels strongly that VA should begin looking into establishing its own 
VA Health Professional University and begin training their medical 
health care professionals to serve as a supplement to VA's current 
medical residency program. \1\ Conceivably, medical students accepted 
into VA's Health Professional University would have their tuition paid 
in full by VA and upon graduation, the graduate would be required to 
accept an appointment at a federal health facility at a starting salary 
comparable to what a new medical graduate would be paid by VA based on 
their experience and specialty. Similar to a military service academy, 
a VA medical school will be highly selective, competitive, and well 
respected. Applicants can be nominated by their congressional 
representative, teaching staff can be sourced organically as well as 
nationally, and real estate is plentiful. This will help ensure the VA 
will have an adequate number of healthcare professionals to meet the 
growing number of veterans and their healthcare needs.
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    \1\ American Legion Resolution No. 377: Support for Veteran Quality 
of Life: (Sept. 2016)
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    The American Legion understands that filling highly skilled 
vacancies at premiere VA hospitals around the country is challenging. 
VA has a variety of creative solutions available to them without the 
need for additional legislative action. One such idea could involve the 
creation of a medical school; another would be to aggressively seek out 
public-private partnerships with all local area hospitals. VA could 
expand both footprint market penetration by renting space in existing 
hospitals where they would also be able to leverage existing resources 
and foster comprehensive partnerships with the community. Finally, VA 
could research the feasibility of incentivizing recruitment at level 3 
hospitals by orchestrating a skills sharing program that might entice 
physicians to work at level 3 facilities if they were eligible to 
engage in a program where they could train at a level 1 facility for a 
year every 5 years while requiring level 1 facility physicians to spend 
some time at level 3 facilities to share best practices. Currently, the 
medical staff is primarily detailed to temporarily fill vacancies. This 
practice fails to incentivize the detailed professional to share best 
practices and teach, merely hold down the position until it can be 
filled by a permanent hire.
                   Modernizing VA's IT Infrastructure
    ``Overhauling the health care system for Americans who answered the 
call of duty by serving in the military is a national priority. The 
country's largest integrated health care delivery system is responding 
to these challenges and aims to reestablish trust by expanding methods 
of providing care and emphasizing the concept of ``whole health'' and 
adopting a veteran-centric approach in everything we do. It will be 
necessary to reimagine the future of VHA health care delivery. 
Partnerships with federal and community health care providers may 
result in better access and broader capabilities and will require a new 
infrastructure. The future requires the use of best practices in 
science and engineering to improve the quality, safety, and consistency 
of veteran's experience, regardless of the site or type of care.'' 
David Shulkin, M.D. \2\
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    \2\ New England Journal of Medicine http://www.nejm.org/doi/full/
10.1056/NEJMp1600307
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    Department of Veterans Affairs (VA) Information Technology (IT) 
infrastructure has been an evolving technological necessity over the 
past 37 years, sometimes leading the industry, and sometimes trailing. 
The American Legion has been intrinsically involved with VA's IT 
transformation from the inception of Veterans Health Information and 
Technology Architecture (VistA) to the recent introduction of VistA-
e[volution] for medical records, as well as being a pioneer partner in 
the concept and integration of the fully electronic disability claims 
process.
    Leading the field in 1978, VA doctors developed an electronic 
solution to coordinate and catalog patients healthcare long before 
their private sector colleagues, who were slow to follow, while some 
private physicians still refuse to automate today.
    IT automation is expensive to implement and expensive to maintain, 
especially when maintaining legacy equipment. As in all digital space, 
IT infrastructure advances so quickly that most IT infrastructure is 
outdated by the time it is fully implemented, and VA's IT 
infrastructure is no different. Unfortunately, in this case, it is 
simply the cost of doing business in a technologically advancing 
society. With this in mind, companies are turning to rented cloud-based 
resources and Software as a Service (SAS) to mitigate costs. These 
services have a lower up-front investment and negate the need for 
hardware maintenance and software upgrades in many cases.
    Information Technology is inextricably intertwined into many of the 
services we take for granted, such as; telephone systems, appointment 
scheduling, procurement, building access, safety controls, and much 
more. Maintaining an up-to-date system is not a luxury, it is 
necessary, and The American Legion has found that VA's IT 
infrastructure is aged and failing our veterans.
    One of the primary complaints The American Legion receives 
regarding VA healthcare is scheduling issues. VA's inability to 
schedule the full complement of veterans' healthcare needs from one 
central location causes a multitude of delays and billing problems and 
puts veteran patients at risk when all of the members of the veteran's 
health team are unable to effectively collaborate online.
    In order for VA to safely and effectively serve veterans going 
forward they need a 21st-century data system that incorporates;

      A single lifetime Electronic Health Record system (EHR),
      One Operation Management Platform consisting of one 
resource allocation, financial, supply chain, and human resources 
system that are integrated seamlessly with the EHR,
      A single Customer Relationship Management (CRM) system

    If proprietary, the system needs to be built using open source 
code, which will allow the program to remain sustainable and enable 
future competitive Application Programming Interface (API) Framework 
that will provide seamless interoperability with internal and external 
systems.
    Once this system is developed, metrics and analytics will be 
available to all levels of leadership from decentralized locations. 
Legacy viewer and 130 different versions of VistA simultaneously 
running across the national and international VA landscape that has 
been patched together is outdated and ineffective. A veteran should be 
able to walk into any VA Medical Center (VAMC) anywhere in the country 
or abroad, and the first intake specialist to assist that veteran 
should be able to pull the patient's record up instantly. This is not 
possible today.
    Initiatives like MyHealtheVet, eBenefits, and the recently launched 
Vets.gov are all steps in the right direction, and all need to be tied 
into a single user interface system. The American Legion also supports 
extended use of public/private partnerships similar to the team 
detailed to VA from the private sector who have spent the past 18 
months building the Vets.gov portal. IT industry leaders such as 
Amazon, Google, Microsoft, and Cisco have already partnered with VA in 
a number of areas and appear willing to help at cost, below market 
cost, or even donated services, and VA needs to have the flexibility to 
maximize these relationships.
    Finally, as we struggle to keep up with the multitude of programs 
and expenditures related to VA's IT program, The American Legion is 
outraged that one of VA's first experiences with integrating cloud 
services into the VA program was mismanaged and squandered more than $2 
million in taxpayer funds. VA does not have the freedom to learn as 
they go and needs to partner with or hire experts in cloud computing 
before they engage in cloud brokerage services. A few days ago the VA 
Office of Inspector General found \3\;
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    \3\ VAOIG https://www.va.gov/oig/pubs/VAOIG-15-02189-336.pdf
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    ``OI&T spent over $2 million on a cloud brokerage service contract 
that provided limited brokerage functionality and that VA's actions did 
not ensure adequate system performance or return on investment. We 
determined total project costs exceeded $5 million and the system's 
limited brokerage service functionality prevented it from being used in 
a production environment. This capability is essential for delivery of 
cloud services. The project manager did not ensure that formal testing 
and acceptance were conducted on project deliverables.''
    These deficiencies occurred because of a lack of executive 
oversight and ineffective project management. Without enforcement of 
oversight controls, project leadership cannot ensure it will receive 
the value of contract deliverables or demonstrate an adequate return on 
investment for the project.''
    The American Legion calls on Congress to consider funding that 
enables VA to tie all of their IT programs together into a seamless 
program capable of processing claims, managing veterans' health care 
needs, integrating procurement needs so that VA leaders and Congress 
can analyze annual expenditures versus healthcare consumption, 
integrating patient communications into their profiles, and ensuring 
seamless transition between the Department of Defense and VA.
                     Consolidation of Outside Care
    When the Choice program was added as a temporary emergency measure 
as part of the Veterans Access, Choice and Accountability Act (VACAA) 
of 2014 \4\, The American Legion supported the program because we had 
witnessed firsthand the need across the country. In 2014, The American 
Legion set up a dozen Veterans Crisis Command Centers (VCCCs) in 
affected areas from Phoenix to Fayetteville and spoke to hundreds of 
veterans personally affected by the scheduling problems within VA. The 
Choice program provided an immediate short-term option, but it also 
provided an opportunity to learn how veterans utilized the program. At 
that time, The American Legion recommended gathering as much data as 
possible from veterans using the program to improve the ability of VA's 
other existing authorities for care in the community. \5\ Additionally, 
The American Legion supported the Veterans Choice Continuation Act, 
which continued the Veterans Choice Program (VCP) that was due to 
expire on August 7, 2017 by ensuring veterans within the VA healthcare 
system who are using the VCP continue to have the ability to access 
quality health care within their communities without any interruption 
of services.
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    \4\ Public Law P.L. 113-146
    \5\ Such as Project Access Received Closer to Home (ARCH), the 
Patient Centered Community Care (PCs) program and others
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    With the creation of the Choice program, Congress appropriately 
allocated $10 billion in emergency funds to provide the life support 
for the program. Now that Choice is set to expire when the funds are 
depleted, The American Legion strongly believes the next evolution of 
Choice should be the streamlining and consolidation of the community 
care programs at VA. Choice taught us that there is certainly a need 
for care in the community, which has a hefty price tag attached to it. 
The American Legion urges Congress to learn from Choice, and not end 
the funding levels that Choice brought us. We urge this critical 
committee and the entire United States Congress to continue to fund 
community care for veterans at the current levels of roughly $3.3 
Billion annually.
    This committee, the U.S. Senate, VA, and VSO's are currently 
working together to determine what the next evolution of Choice looks 
like, but the one thing we all agree on is there is certainly a need 
for community care. Choice demonstrated to the nation that there was a 
gap in care and the emergency funds that were allocated gave VA the 
resources to provide the much-needed health care. Moving forward, and 
after witnessing the sincere need for community care, The American 
Legion simply urges Congress to fund the community care programs at the 
appropriate levels, which should be no less than what is currently 
being allocated.
                       The Looming Appeals Crisis
    The American Legion currently holds power of attorney on more than 
three-quarters of a million claimants. We spend millions of dollars 
each year defending veterans through the claims and appeals process, 
and our success rate at the Board of Veterans Appeals (BVA) continues 
to hover around 80 percent.
    Although Congress is taking the appropriate actions in addressing 
the issue of future appeals, through the Veterans Appeals Improvement 
and Modernization Act of 2017, there remains roughly 500,000 legacy 
claims yet addressed. According to the VA, the average wait time to 
resolve an appeal is around 1,600 days. \6\
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    \6\ https://drive.google.com/file/d/0B70--mGYT1tJETzZGWUZKYzdGXzg/
view
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    In 2016, the VA released a study explaining what resources were 
required to address the growing legacy appeals inventory. With $50 
million, the VA projects that the last of the legacy appeal claims 
would be resolved sometime after 2026. With funding at $242 million 
dollars, the VA projected to address all legacy claims by 2022. If 
funding is not allocated to support the VA's mission to reduce legacy 
appeal claims, they estimate that over 214,000 claims will take over 
nine years to resolve. \7\
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    \7\ https://drive.google.com/file/d/0B70--mGYT1tJETzZGWUZKYzdGXzg/
view
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    The American Legion requests that Congress authorizes $242 million 
in FY 2018 -2019, and beyond, to the VA so that they may start working 
the backlog of appeals currently in the system. The projected date to 
end all backlog legacy appeals with this funding would be 2022. Any 
lesser amount of funds would drastically increase the amount of time to 
finish legacy appeals.
                    Better Care for Female Veterans
    A 2011 American Legion study revealed several areas of concern 
about VA health-care services for women. Today, VA still struggles to 
fulfill this need, even though women are the fastest-growing segment of 
the veteran population. Approximately 1.8 million female veterans make 
up 8 percent of the total veteran population, yet only 6 percent use VA 
services.
    VA needs to be prepared for a significant increase of younger 
female veterans as those who served in the War on Terror separate from 
active service. Approximately 58 percent of women returning from Iraq 
and Afghanistan are ages 20 to 29, and they require gender-specific 
expertise and care. Studies suggest post-traumatic stress disorder is 
especially prevalent among women; among veterans who used VA in 2009, 
10.2 percent of women and 7.8 percent of men were diagnosed with PTSD.
    The number of female veterans enrolled in the VA system is expected 
to expand by more than 33 percent in the next three years. Currently, 
44 percent of Iraq and Afghanistan female veterans have enrolled in the 
VA health-care system.
    VA needs to develop a comprehensive health-care program for female 
veterans that extend beyond reproductive issues. Bills like the Deborah 
Sampson Act and the Women Veterans Access to Quality Care Act are a 
step in the right direction. Provider education needs improvement. 
Furthermore, as female veterans are the sole caregivers in some 
families, services, and benefits designed to promote independent living 
for combat-injured veterans must be evaluated, and needs such as child 
care must be factored into the equation. Additionally, many female 
veterans cannot make appointments due to the lack of child-care options 
at VA medical centers. Since the 2011 survey, The American Legion has 
continued to advocate for improved delivery of timely, quality health 
care for women using VA. The American Legion is encouraged that the 
President's budget recognizes the need for additional funding in this 
critical area, and has proposed an increase of $32 million almost 9 
percent over last year's authorization levels, which combined with 
years 2009 through 2014 represents an increase in funding of nearly 240 
percent to deal with this growing segment of the veteran population.
                Military and Veteran Caregiver Services
    The struggle to care for veterans wounded in defense of this nation 
takes a terrible toll on families. In recognition of this, Congress 
passed, and President Barack Obama signed into law, the Caregivers and 
Veterans Omnibus Health Services Act of 2010. The unprecedented package 
of caregiver benefits authorized by this landmark legislation includes 
training to help to ensure patient safety, cash stipends to partially 
compensate for caregiver time and effort, caregiver health coverage if 
they have none, and guaranteed periods of respite to protect against 
burnout.
    The comprehensive package, however, is not available to most family 
members who are primary caregivers to severely ill and injured 
veterans. Congress opened the program only to caregivers of veterans 
severely ``injured,'' either physically or mentally, in the line of 
duty on or after Sept. 11, 2001. It is not open to families of severely 
disabled veterans injured before 9/11, nor is it open to post-9/11 
veterans who have severe service-connected illnesses, rather than 
injuries, which is why we call on Congress to immediately pass the 
Military and Veteran Caregiver Services Improvement Act of 2017.
    The American Legion has long advocated for expanding eligibility 
and ending the obvious inequity that Caregivers and Veterans Omnibus 
Health Services Act of 2010 created. Simply put, a veteran is a 
veteran! All veterans should receive the same level of benefits for 
equal service. As affirmed in American Legion Resolution No. 259: 
Extend Caregiver Benefits to Include Veterans Before September 11, 
2001, The American Legion supports legislation to remove the date 
September 11, 2001, from Public Law 111-163 and revise the law to 
include all veterans who otherwise meet the eligibility requirements. 
\8\
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    \8\ American Legion Resolution No. 259 (2016): Extend Caregiver 
Benefits to Include Veterans Before September 11, 2001
---------------------------------------------------------------------------
    The American Legion is optimistic that providing expanded support 
services and stipends to caregivers of veterans to all eras is not only 
possible but also budgetary feasible and the right thing to do. We urge 
this committee and the U.S. Congress to allocate the required funding 
to expand the caregiver program to all eras of conflict and veterans 
who should be in this program.
                Ensuring Quality Care to Rural Veterans
    The American Legion's System Worth Saving task force travels the 
country to evaluate VA medical facilities and ensure they are meeting 
the needs of veterans. From November 2013 to May 2014, the task force 
has been conducting site visits to VA medical facilities and town hall 
meetings to receive feedback from local veterans who utilize VA to 
receive their health care.
    The Task Force, in its 14th program year, is focusing on VA's 
accomplishments and progress over the past decade and a half, current 
issues and concerns, and VA's five-year strategic plan for several 
program areas. These areas of focus are VA's budget, staffing, 
enrollment/outreach, hospital programs (e.g. mental health, intensive 
care unit (ICU), long-term services and support, homelessness programs) 
information technology and construction programs.
    During each site visit, a town hall meeting is hosted by an 
American Legion Post. The town hall meetings have consistently 
illustrated that veterans are worried VA has turned a deaf ear to their 
concerns and is intentionally ignoring their complaints. We have seen 
firsthand where VA has closed intensive care departments, downgrading 
emergency departments to urgent care clinics, or has proposed to closed 
or reconfiguring hospital services under the guise of ``realigning 
services closer to where veterans live'', such as the reconfiguration 
proposal at the VA Black Hills Health Care System, which has served the 
veterans of Hot Springs, South, Dakota for over 100 years and we 
applaud Secretary Shulkin for halting further dismantling of this 
historic and much-needed community facility.
    The American Legion urges Congress to evaluate VA's plan in rural 
areas and to stop VA from closing hospitals and community-based 
outpatient clinics unless existing requisite community services are 
meet or exceed that VA currently provides to veterans.
                      Assisting Homeless Veterans
    The American Legion strongly believes that homeless veteran 
programs should be granted sufficient funding to provide supportive 
services such as, but not limited to: outreach, health care, 
rehabilitation, case management, personal finance planning, 
transportation, vocational counseling, employment, and education.
    Furthermore, The American Legion continues to place special 
priority on the issue of veteran homelessness. With veterans making up 
approximately 11% of our nation's total adult homeless population, 
there is plenty of reason to give this issue special attention. Along 
with various community partners, The American Legion remains committed 
to seeing VA's goal of ending veteran homelessness come to fruition. 
Our goal is to ensure that every community across America has programs 
and services in place to get homeless veterans into housing (along with 
necessary healthcare/treatment) while connecting those at-risk veterans 
with the local services and resources they need. We hope to see that 
with the expansion of assistance afforded to homeless veterans and 
their dependents, there will also be an increase in funding to support. 
We estimate that an additional $10 million annually will be sufficient 
to accomplish this goal.
                    Repair Problems in Mental Health
    During the past half-decade, VA has nearly doubled their mental 
health care staff, jumping from just over 13,500 providers in 2005 to 
over 20,000 providers in 2011. However, during that time there has been 
a massive influx of veterans into the system, with a growing need for 
psychiatric services. With over 1.5 million veterans separating from 
service in the past decade, 690,844 have not utilized VA for treatment 
or evaluation. The American Legion is deeply concerned about nearly 
700,000 veterans who are slipping through the cracks unable to access 
the health care system they have earned through their service.
    Post-traumatic stress disorder and traumatic brain injury are the 
signature wounds of today's wars. Both conditions are increasing in 
number, particularly among those who have served in Operation Iraqi 
Freedom and Operation Enduring Freedom. The President's request for a 6 
percent increase in funding will hopefully find much-needed dollars 
dedicated to this area considering that a 2011 Senate Committee on 
Veterans' Affairs survey of 319 VA mental health staff revealed that 
services for veterans coping with mental health issues and TBI lack 
considerable support. Among the findings:

      New mental health patient appointments could be scheduled 
within 14 days, according to 63 percent of respondents, but only 48.1 
percent believed veterans referred for specialty appointments for PTSD 
or substance abuse would be seen within 14 days.
      Seventy percent of providers said their sites had 
shortages of mental health space.
      Forty-six percent reported that a lack of off-hours 
appointments was a barrier to care.
      More than 26 percent reported that demand for 
Compensation and Pension (C&P) exams pulled clinicians away from direct 
care.
      Just over 50 percent reported that growth in patient 
numbers contributed to mental health staff shortages.

    VHA and, at the request of Congress, VA's Office of the Inspector 
General have studied the problem since the survey was conducted. On 
April 23, 2012, the VAOIG released the report, ``Review of Veterans' 
Access to Mental Health Care.'' It found that VHA's mental health 
performance data was neither accurate nor reliable. In VA's FY 2011 
Performance and Accountability Report, VHA grossly over-reported that 
95 percent of first-time patients received a full mental health 
evaluation within 14 days. However, it was found that VHA completed 
approximately 64 percent of new-patient appointments for treatment 
within 14 days of their desired date, but approximately 36 percent of 
appointments exceeded 14 days. VHA schedulers also were not following 
procedures outlined in VHA directives and were scheduling clinic 
appointments on the system's availability rather than the patient's 
clinical need.
    The American Legion believes VA must focus on head injuries and 
mental health without sacrificing awareness and concern for other 
conditions afflicting servicemembers and veterans. As an immediate 
priority, VA must ensure staffing levels are adequate to meet the need. 
The American Legion also urges Congress to invest in research, 
screening, diagnosis and treatment of PTSD and TBI and will continue to 
monitor VA to ensure that they remain, good stewards of the people's 
money
    Although The American Legion supports advance appropriations, we 
remain concerned accurate projections on population and utilization, 
and other challenges remain.
    One such challenge is with the procurement of medical equipment and 
Information Technology (IT) purchases. When IT within the VA was 
combined across the entire agency, it was implemented to improve 
efficiency, contracting, management, and other challenges inherent with 
three disjointed IT management teams. This has proved somewhat 
successful. However, we hear that procurement of medical equipment, and 
IT is hampered at medical facilities due to budget implementation 
failures through continuing resolutions. While a VA medical center 
director might have his/her operational funding beginning October 1 
because of advance appropriations, much needed IT or medical equipment 
might be delayed due to a continuing resolution impasse in Congress. 
This has a detrimental impact on the veteran and his/her care. 
Therefore, The American Legion recommends the IT portion of the budget 
be added to advance appropriations and help smooth those budget 
challenges. Additionally, The American Legion remains committed to 
working with the VA in any way possible to move the VA toward their 
goal of becoming a fully integrated paperless system.
                            Medical Services
    Over the past two decades, VA has dramatically transformed its 
medical care delivery system. Through The American Legion visits a 
variety of medical facilities throughout the nation during our System 
Worth Saving Task Force, we see firsthand this transformation and its 
impact on veterans in every corner of the nation.
    While the quality of care remains exemplary, veteran health care 
will be inadequate if access is hampered. Today there are over 23 
million veterans in the United States. While 8.3 million of these 
veterans are enrolled in the VA health care system, a population that 
has been relatively steady in the past decade, the costs associated 
with caring for these veterans has escalated dramatically.
    For example between FYs 2007 and 2010, VA enrollees increased from 
7.8 million to 8.3 million \9\. During the same period, inpatient 
admissions increased from 589 thousand to 662 thousand. Outpatient 
visits also increased from 62 to 80.2 billion. Correspondingly, cost to 
care for these veterans increased from $29.0 billion to $39.4 billion. 
This 36 percent increase during those two years is a trend that 
dramatically impacts the ability to care for these veterans.
---------------------------------------------------------------------------
    \9\ Source: Department of Veterans Affairs, Veterans Health 
Administration, Office of the Assistant Deputy Under Secretary for 
Health for Policy and Planning. Prepared by the National Center for 
Veterans Analysis and Statistics
---------------------------------------------------------------------------
    While FY 2010 numbers seemingly leveled off - to only 3 percent 
annual growth - will adequate funding exist to meet veteran care needs? 
If adequate funding to meet these needs isn't appropriated, VA will be 
forced to either not meet patient needs or shift money from other 
accounts to meet the need.
    Even with the opportunity for veterans from OIF/OEF to have up to 5 
years of care following their active duty period, we have not seen a 
dramatic change in overall enrollee population. Yet The American Legion 
remains concerned that the population estimates are dated and not 
reflective of the costs. If current economic woes and high unemployment 
rates \10\ for veterans remain and with the Vietnam Era Veterans 
beginning to retire and needing healthcare that may no longer be 
provided by their employers, VA medical care will become enticing for a 
veteran population that might not have utilized those services in the 
past.
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    \10\ Source: U.S. Department of Labor, Veterans' Employment & 
Training Service (2017)
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    Finally, ongoing implementation of programs such as the PL 111-163 
``Caregiver Act'' will continue to increase demands on the VA health 
care system and therefore result in an increased need for a budget that 
can adequately deal with the challenges.
    In order to meet the increased levels of demand, even assuming that 
not all eligible veterans will elect to enroll for coverage, and keep 
pace with the cost trend identified above, there must be an increase to 
account for both the influx of new patients and increased costs of 
care.
                     Medical Support and Compliance
    The Medical Support and Compliance account consist of expenses 
associated with administration, oversight, and support for the 
operation of hospitals, clinics, nursing homes, and domiciliaries. 
Although few of these activities are directly related to the personal 
care of veterans, they are essential for quality, budget management, 
and safety. Without adequate funding in these accounts, facilities will 
be unable to meet collection goals, patient safety, and quality of care 
guidelines.
    The American Legion has been critical of programs funded by this 
account. We remain concerned patient safety is addressed at every 
level. We are skeptical if patient billing is performed efficiently and 
accurately. Moreover, we are concerned that specialty advisors/
counselors to implement OIF/OEF outreach, ``Caregiver Act'' 
implementation, and other programs are properly allocated. If no need 
for such individuals exists, should the position be placed within a 
facility? Simply throwing more money at this account, increasing staff 
and systems won't resolve all these problems.
    During the previous budget, this account grew by nearly 8 percent 
to $5.31 billion. The American Legion questions the necessity for that 
rate to continue at this time.
                           Medical Facilities
    During FY 2012, VA unveiled the Strategic Capital Investment 
Planning (SCIP) program. This ten-year capital construction plan was 
designed to address VA's most critical infrastructure needs. Through 
the plan, VA estimated the ten-year costs for major and minor 
construction projects and non-recurring maintenance would total between 
$53 and $65 billion over ten years.
    The American Legion is supportive of the SCIP program which 
empowers facility managers and users to evaluate needs based on patient 
safety, utilization, and other factors. While it places the onus on 
these individuals to justify the need, these needs are more reflective 
of the actuality as observed by our members and during our visits. Yet, 
VA has taken this process and effectively neutered it through budget 
limitations thereby underfunding the accounts and delaying delivery of 
critical infrastructure.
    So while failing to meet these needs, facility managers will be 
forced to make do with existing aging facilities. While seemingly 
saving money in construction costs, the VA will be expending money 
maintaining deteriorating facilities, paying increased utility and 
operational costs, and performing piecemeal renovation of properties to 
remain below the threshold of major or minor projects.
    This is an inefficient byproduct of budgeting priorities. Yet, as 
will be noted later, the reality remains that the SCIP program is 
unlikely to be funded at levels necessary to accomplish the ten-year 
plan. Therefore, this account must be increased to meet the short-term 
needs within the existing facilities.
                      Major and Minor Construction
    After two years of study, the VA developed the Strategic Capital 
Investment Planning (SCIP) program. It is a ten-year capital 
construction plan designed to address VA's most critical infrastructure 
needs within the Veterans Health Administration, Veterans Benefits 
Administration, National Cemetery Administration, and Staff Offices.
    The SCIP planning process develops data for VA's annual budget 
requests. These infrastructure budget requests are divided into several 
VA accounts: Major Construction, Minor Construction, Non-Recurring 
Maintenance (NRM), Enhanced-Use Leasing, Sharing, and Other Investments 
and Disposal. The VA estimated costs were between $53 and $65 billion.
    The American Legion is very concerned about the lack of funding in 
the Major and Minor Construction accounts. Based on VA's SCIP plan, 
Congress underfunded these accounts. Clearly, if this underfunding 
continues VA will never fix its identified deficiencies within its ten-
year plan. Indeed, at current rates, it will take VA almost sixty years 
to address these current deficiencies.
    The American Legion also understands there is a discussion to refer 
to SCIP in the future as a ``planning document'' rather than an actual 
capital investment plan. Under this proposal, VA will still address the 
deficiencies identified by the SCIP process for future funding requests 
but rather than having an annual appropriation, SCIP will be extended 
to a five-year appropriation, similar to the appropriation process used 
by the Department of Defense as its construction model. Such a plan 
will have huge implications on VA's ability to prioritize or make 
changes as to design or project specifications of its construction 
projects. The American Legion is against this five-year appropriation 
model and recommends Congress continue funding VA's construction needs 
on an annual appropriations basis.
    The American Legion recommends Congress adopt the 10-year action 
plan created by the SCIP process. Congress must appropriate sufficient 
funds to pay for needed VA construction projects and stop underfunding 
these accounts.
                 State Veteran Home Construction Grants
    Perhaps no program facilitated by the VA has been as impacted by 
the decrease in government spending than the State Veteran Home 
Construction Grant program. This program is essential in providing 
services to a significant number of veterans throughout the country at 
a fraction of the daily costs of similar care in private or VA 
facilities. As the economy rebounds and states are pivoting towards 
resuming essential services, taking advantage of depressed construction 
costs, and meeting the needs of an aging veteran population, greater 
use of this grant program will continue. As our baby boomer population 
continues to transition into retirement, many more of these veterans 
are retiring to state veteran homes due to their excellent reputation 
for care and cost. The popularity of these retirement options will 
cause any surplus of space to become consumed. The American Legion 
encourages Congress to increase the funding level of this program.
                 National Cemetery Administration (NCA)
    No aspect of the VA is as critically acclaimed as the National 
Cemetery Administration (NCA). In the 2010 American Customer 
Satisfaction Index, the NCA achieved the highest ranking of any public 
or private organization. In addition to meeting this customer service 
level, the NCA remains the highest employer of veterans within the 
federal government and remains the model for contracting with veteran-
owned businesses.
    While NCA met their goal of having 90 percent of veterans served 
within 75 miles of their home, their aggressive strategy to improve 
upon this in the coming five years will necessitate funding increases 
for new construction. Congress must provide sufficient major 
construction appropriations to permit NCA to accomplish this goal and 
open five new cemeteries in the coming five years. Moreover, funding 
must remain to continue to expand existing cemetery facilities as the 
need arises.
    While the costs of fuel, water, and contracts have risen, the NCA 
operations budget has remained nearly flat for the past two budgets. 
Unfortunately, recent audits have shown cracks beginning to appear. Due 
predominantly to poor contract oversight, several cemeteries 
inadvertently misidentified burial locations. Although only one or two 
were willful violations of NCA protocols, the findings demonstrate a 
system about ready to burst.
    To meet the increased costs of fuel, equipment, and other resources 
as well as ever-increasing contract costs, The American Legion believes 
a small increase is necessary. In addition, we urge Congress to 
adequately fund the construction program to meet the burial needs of 
our nation's veterans.
                      State Cemetery Grant Program
    The NCA administers a program of grants to states to assist them in 
establishing or improving state-operated veterans' cemeteries through 
VA's State Cemetery Grants Program (SCGP). Established in 1978, this 
program funds nearly 100% of the costs to establish a new cemetery, or 
expand existing facilities. For the past two budgets, this program has 
been budgeted $46 million to accomplish this mission.
    New authority granted to VA funds Operation and Maintenance 
Projects at state veterans cemeteries to assist states in achieving the 
national shrine standards VA achieves within national cemeteries. 
Specifically, the new operation and maintenance grants have been 
targeted to help states meet VA's national shrine standards with 
respect to cleanliness, height, and alignment of headstones and 
markers, leveling of gravesites, and turf conditions. In addition, this 
law allowed VA to provide funding for the delivery of grants to tribal 
governments for Native American veterans. Yet we have not seen the 
allocation of funding increased to not only meet the existing needs 
under the construction and expansion level but also the needs from 
operation and maintenance and tribal nation grants. Moreover, as these 
cemeteries age, the $5 million limitations must be revoked to allow for 
better management of resources within the projects.
                    Medical and Prosthetic Research
    The American Legion believes VA research must focus on improving 
treatment for medical conditions unique to veterans. Because of the 
unique structure of VA's electronic medical records (VISTA), VA 
Research has access to a great amount of longitudinal data incomparable 
to research outside the VA system. Because of the ongoing wars of the 
past decade, several areas have emerged as ``signature wounds'' of the 
Global War on Terror, specifically Traumatic Brain Injury (TBI), 
Posttraumatic Stress Disorder (PTSD) and dealing with the effects of 
amputated limbs.
    Much media attention has focused on TBI from blast injuries common 
to Improvised Explosive Devices (IEDs) and PTSD. As a result, VA has 
devoted extensive research efforts to improve the understanding and 
treatment of these disorders. Amputee medicine has received less 
scrutiny but is no less a critical area of concern. Because of 
improvements in body armor and battlefield medicine, catastrophic 
injuries that in previous wars would have resulted in loss of life have 
led to substantial increases in the numbers of veterans who are coping 
with loss of limbs.
    As far back as 2004, statistics were emerging which indicated 
amputation rates for US troops were as much as twice that from previous 
wars. By January of 2007, news reports circulated noting the 500th 
amputee of the Iraq War. The Department of Defense response involved 
the creation of Traumatic Extremity Injury and Amputation Centers of 
Excellence, and sites such as Walter Reed have made landmark strides in 
providing the most cutting-edge treatment and technology to help 
injured service members deal with these catastrophic injuries.
    However, The American Legion remains concerned that once these 
veterans transition away from active duty status to become veteran 
members of the communities, there is a drop-off in the level of access 
to these cutting edge advancements. Ongoing care for the balance of 
their lives is delivered through the VA Health Care system, and not 
through these concentrated active duty centers.
    Many reports indicate the state of the art technology available at 
DOD sites is not available from the average VA Medical Center. With so 
much focus on ``seamless transition'' from active duty to civilian life 
for veterans, this is one critical area where VA cannot afford to lag 
beyond the advancements reaching service members at DOD sites. If a 
veteran can receive a state of the artificial art limb at the new 
Walter Reed National Military Medical Center (WRNMC) they should be 
able to receive the exact same treatment when they return home to the 
VA Medical Center in their home community, be it in Gainesville, Battle 
Creek, or Fort Harrison.
    American Legion contact with senior VA health care officials has 
concluded that while DOD concentrates their treatment in a small number 
of facilities, the VA is tasked with providing care at 152 major 
medical centers and over 1,700 total facilities throughout the 50 
states as well as in Puerto Rico, Guam, American Samoa and the 
Philippines. Yet, VA officials are adamant their budget figures are 
sufficient to ensure a veteran can and will receive the most cutting 
edge care wherever they choose to seek treatment in the system.
    The American Legion remains concerned about the ability to deliver 
this cutting edge care to our amputee veterans, as well as the ability 
of VA to fund and drive top research in areas of medicine related to 
veteran-centric disorders. There is no reason VA should not be seen at 
the world's leading source for medical research into veteran injuries 
such as amputee medicine, PTSD, and TBI.
    In FY 2011 VA received a budget of $590 million for medical and 
prosthetics research. Only because of the efforts of the House and 
Senate was this budget kept at that level during the FY 2012 and 2013 
budgets, due to significant pressure from The American Legion. Even at 
this level, The American Legion contends this budget must be increased 
and closely monitored to ensure the money is reaching the veteran at 
the local level.
                  Medical Care Collections Fund (MCCF)
    In addition to the aforementioned accounts which are directly 
appropriated, medical care cost recovery collections are included when 
formulating the funding for VHA. Over the years, this funding has been 
contentious because they often included proposals for enrollment fees, 
increased prescription rates, and other costs billed directly to 
veterans. The American Legion has always ardently fought against these 
fees and unsubstantiated increases.
    Beyond these first party fees, VHA is authorized to bill health 
care insurers for nonservice-connected care provided to veterans within 
the system. Other income collected into this account includes parking 
fees and enhanced use lease revenue. The American Legion remains 
concerned that the expiration of authority to continue enhanced use 
leases will greatly impact not only potential revenue but also delivery 
of care in these unique circumstances. We urge Congress to reauthorize 
the enhanced use lease authority with the greatest amount of 
flexibility allowable.
    In May 2011, the VA Office of Inspector General (OIG) issued a 
report auditing the collections of third party insurance collections 
within MCCF. Their audit found that ``VHA missed opportunities to 
increase MCCF by . .46 percent.'' Because of ineffective processes used 
to identify billable fee claims and systematic controls, it was 
estimated VHA lost over $110 million annually. In response to this 
audit, VHA assured they'd have processes in place to turn around this 
trend.
    Yet even if those reassurances were met, the MCCF collection would 
not meet the quarterly loss beneath the budgeted amounts. Without those 
collections, savings must be garnered elsewhere to meet these 
shortfalls, thereby causing facility administrators and VISN directors 
to make difficult choices that ultimately negatively impact veterans 
through a lack of hiring, delay of purchasing, or other savings 
methods.
    It would be unconscionable to increase this account beyond the 
previous levels that were not met. To do so without increasing co-
payments or collection methods would be counterproductive and mere 
budget gimmickry. While we recognize the need to include this in the 
budget, The American Legion cannot be part of a budget that penalizes 
the veteran for administrative failures.
            Additional Funding for State Approving Agencies
    State Approving Agencies (SAAs) are responsible for approving and 
supervising programs of education for the training of veterans, 
eligible dependents, and eligible members of the National Guard and the 
Reserves. SAAs grew out of the original GI Bill of Rights that became 
law in 1944. Though SAAs have their foundation in federal law, SAAs 
operate as part of state governments. SAAs approve programs leading to 
vocational, educational or professional objectives. These include 
vocational certificates, high school diplomas, GEDs, degrees, 
apprenticeships, on-the-job training, flight training, correspondence 
training and programs leading to required certification to practice in 
a profession.
    SAAs currently employ 250 professionals across 57 states and 
territories and are responsible for over 8,000 facilities and more than 
100,000 programs. State approving agencies serve our veterans by 
protecting the quality and integrity of the GI Bill programs. These 
unique state agencies, funded by federal contract through the VA, 
approve programs according to federal and state requirements. They 
provide oversight to make sure schools remain compliant with those 
requirements through school visits and routine renewal of approval.
    However, since 2006, SAAs have been flat funded at $19 million 
dollars, meaning they have not received an increase in funding, yet 
dealing with increased volume. There have been no needed increases to 
reflect the increasing complexity of administering the benefit and the 
rapid growth of beneficiaries driven by the Post 911 GI Bill. This, 
along with the increased cost of hiring and retaining personnel, to 
include increased health care and benefits (an average increase of 
$20,000 per professional over the past decade), has resulted in SAAs 
struggling to provide the needed service to and protection for 
veterans. As such, we urge Congress to increase the SAA allocation from 
$19 to $26 million to allow these important agencies to continue to 
provide approval and oversight of quality educational and training 
programs for our veterans.
                   Advance Appropriations for FY 2018
    The Veterans Health Administration (VHA) manages the largest 
integrated health-care system in the United States, with 152 medical 
centers, nearly 1,400 community-based outpatient clinics, community 
living centers, Vet Centers and domiciliaries serving more than 8 
million veterans every year. The American Legion believes those 
veterans should receive the best care possible.
    The needs of veterans continue to evolve, and VHA must ensure it is 
evolving to meet them. The rural veteran population is growing, and 
options such as telehealth medicine and clinical care must expand to 
better serve that population. Growing numbers of female veterans mean 
that a system that primarily provided for male enrollees must now 
evolve and adapt to meet the needs of male and female veterans, 
regardless whether they live in urban or rural areas.
    An integrated response to mental health care is necessary, as the 
rising rates of suicide and severe post-traumatic stress disorder are 
greatly impacting veterans and active-duty servicemembers alike.
    If veterans are going to receive the best possible care from VA, 
the system needs to continue to adapt to the changing demands of the 
population it serves. The concerns of rural veterans can be addressed 
through multiple measures, including expansion of the existing 
infrastructure through CBOCs and other innovative solutions, 
improvements in telehealth and telemedicine, improved staffing and 
enhancements to the travel system.
    Patient concerns and quality of care can be improved by better 
attention to VA strategic planning, concise and clear directives from 
VHA, improved hiring practices and retention, and better tracking of 
quality by VA on a national level.
    And finally, mandatory funds must be included in Advanced 
Appropriations along with full discretionary funding of all VA 
accounts. Veterans and dependents having their compensation and 
disability checks delayed because Congress refuses to pass an annual 
budget before being forced to close the federal government is 
reprehensible. Pass full advanced appropriations now.
                               Conclusion
    To assimilate all outside care under one cohesive management 
authority, all future Choice funding needs to be included in a 
consolidated community care model. The VACAA infused $10 billion in 
care funding because there was a demonstrated need, and that demand has 
not gone away. Any and all future funding levels must reflect this as 
part of the plan, not wait until VHA is in crisis.
    Greater emphasis needs to be placed on VA's hiring and incentives, 
and if additional resources are needed to secure key providers like 
psychologists and physician's assistants, then VHA must be provided 
with the funding needed to make those critical hires. That is the long-
term key to ensuring that veterans get the care they need in a timely 
fashion in the system that is designed to treat their unique wounds of 
war.
    Individuals affected by homelessness should not have to choose 
between staying with their dependents or obtaining needed resources 
from a homeless shelter. Funds must be allocated to supporting veterans 
affected by homelessness who are also caring for others.
    SAA are integral in assisting veteran in higher education. 
Additional funding to support their mission should be included in this 
budget.
    The American Legion thanks this committee for the opportunity to 
elucidate the position of the over 2.2 million veteran members of this 
organization. For additional information regarding this testimony, 
please contact Mr. Derek Fronabarger, Deputy Director of The American 
Legion Legislative Division at (202) 861-2700 or 
[email protected].

                                 
          VETERANS OF FOREIGN WARS OF THE UNITED STATES (VFW)
                       CARLOS FUENTES, DIRECTOR,
    Chairman Roe, Ranking Member Walz and members of the Committee, on 
behalf of the men and women of the Veterans of Foreign Wars of the 
United States (VFW) and its Auxiliary, thank you for the opportunity to 
present the VFW's views on the Department of Veterans Affairs' (VA) 
Fiscal Year (FY) 2018 appropriations.
    The VFW is glad to see President Trump has proposed a six percent 
increase in VA's FY 2018 discretionary budget compared to FY 2017. 
However, we feel his proposal falls short of what VA needs to keep pace 
with demand for health care and benefits. The VFW thanks the 
Administration for its commitment to community care, long-term care, 
mental health care, woman veterans and efforts to prevent and eliminate 
veteran homelessness.
    However, we are very concerned that the Administration's request to 
make the Veterans Choice Program a permanent mandatory program could 
lead to a gradual erosion of the VA health care system. What is more 
concerning is that the Administration has chosen to make permanent a 
flawed program by ending Individual Unemployability benefits for 
certain severely disabled veterans who are unable to work due to their 
service-connected disabilities and round down cost of living disability 
pay increases, a proposal which the VFW has opposed in the past and 
continues to strongly oppose.
    The Administration has also proposed a cap on the amount of tuition 
and fees that may be paid under the Post-9/11 GI Bill for programs of 
education in which a public institution of higher learning enters into 
an agreement with another entity to provide such education. Currently, 
third party training programs that contract with public schools are 
able to charge unlimited fees since public schools have no set dollar 
amount cap.
    A couple of years ago, it came to light that some contracted flight 
training programs were charging exorbitant fees, which far exceeded the 
cost of an average in-state education. The VFW supports the 
Administration's proposal to place a reasonable cap on these sorts of 
training programs.
    The continued failure of Congress to eliminate sequestration has 
forced the Administration to propose cuts to veteran benefits and cap 
GI Bill expenditures in order to expand the Choice Program under 
mandatory spending instead of including the program in its 
discretionary community care account. In testimony before the Senate 
and House Committees on Appropriations, Secretary of Veterans Affairs 
David J. Shulkin has indicated that VA would like all its community 
care money to come from one account, instead of having two separate 
accounts for the same purpose and not having the flexibility to use 
both accounts in accordance with veterans' demand for community care. 
The VFW agrees with Secretary Shulkin and urges Congress to consolidate 
VA's community care programs and to fund such programs through VA's 
discretionary appropriations account.
    Sequestration and its draconian spending caps limit our nation's 
ability to provide service members, veterans, and their families the 
care and benefits they have earned and deserve. The VFW calls on the 
committee to join our campaign to finally end sequestration and do away 
with a federal budget process based on the arbitrary budget caps, which 
significantly limit the government's ability to carry out programs that 
experience spikes in demand, such as VA health care. To the VFW, 
sequestration is the most significant readiness and national security 
threat of the 21st century, and despite almost universal congressional 
opposition to such haphazard budgeting, Congress has failed to end it.
    The VFW, in partnership with our Independent Budget (IB) co-
authors--Disabled American Veterans (DAV) and Paralyzed Veterans of 
America (PVA)--produces annual budget recommendations for each of VA's 
discretionary appropriation accounts and compares them to the 
Administration's request. PVA has submitted testimony covering Veterans 
Health Administration (VHA) appropriation accounts and DAV has covered 
the IB's recommendations for the Veterans Benefits Administration 
accounts. I will focus my remarks on VA's construction and National 
Cemetery Administration (NCA) appropriations.

    Major Construction:
    FY 2018 IB Recommendation--$1.50 billion
    FY 2018 Administration Request -- $512 million
    FY 2017 Appropriations--$528 million

    For more than a decade, the IB Veterans Service Organizations 
(IBVSOs) have warned Congress and VA that perpetual underfunding has 
allowed VA's infrastructure to erode while its capacity has swelled 
from 81 percent in 2004 to as high as 120 percent in 2010. We continue 
to believe that this need for space and chronic underfunding of medical 
services could lead VA to ration care.
    The IBVSOs are working with VA to reform its construction process 
so facilities can be delivered on time and on budget. Previous errors 
must be corrected to ensure the issues in Aurora, Colorado, never occur 
again. However, Congress and the Administration must not ignore the 
growing capital infrastructure needs of the Department's health care 
system.
    When VA asked its Veteran Integrated Service Networks (VISN) to 
evaluate what they need to improve its facilities to meet the increased 
outpatient demand, VA determined that ``improving the condition of VA's 
facilities through major construction projects (96) accounted for the 
largest resource need. \1\'' Yet the Administration's major 
construction request for VHA is 36 percent less than FY 2017 and 85 
percent less than actual expenditures in FY 2016.
---------------------------------------------------------------------------
    \1\ Department of Veterans Affairs 2018 Budget and 2019 Advance 
Appropriations Requests, Volume IV: Construction, Long Range Capital 
Plan and Appendix. Long Range Capital Plan, page 8.3-8.
---------------------------------------------------------------------------
    When asked why VA is taking a strategic pause on major construction 
for VHA when its capital infrastructure continues to age and demand 
continues to increase, VA informed the IBVSOs that it simply did not 
receive the request that it needed for major construction because of 
sequestration budget caps. Congress must not allow VA's inability to 
invest in its VHA's major construction to limit veterans' access to the 
health care they have earned and deserve by forcing veterans onto VA's 
community care programs and eliminating the choice to receive care at 
VA medical facilities.
    Currently, VA has 24 major construction projects that are partially 
funded--some of which were originally funded in FY 2004--that need a 
clear path to completion. An additional three projects are in the 
design phase. Outside of the partially funded major projects list are 
major construction projects at the top of the FY 2017 priority list 
that are seismic in nature. These projects cannot take a strategic 
pause while Congress and VA decide how to manage capital infrastructure 
long-term. VA will need to invest more than $3.5 billion to complete 
all 24 partially funded projects. Of the top five projects on the 
priority list, two are seismic deficiencies, two support the core 
mission of VA--a mental health clinic and a spinal cord injury center--
and one is an addition to an existing facility. The total cost of these 
five projects is $1.2 billion.
    The IBVSOs recommend that Congress appropriate at least $1.5 
billion for major construction in FY 2018. This amount will fund either 
the ``next phase'' or fund ``through completion'' all existing 
projects, and begin advance planning and design development on six 
major construction projects that are the highest ranked on VA's 
priority list.

    Minor Construction:
    FY 2018 IB Recommendation--$700 million
    FY 2018 Administration Request--$343 million
    FY 2017 Appropriations--$372 million

    In FY 2017, Congress appropriated $372.1 million for minor 
construction projects. Currently, approximately 600 minor construction 
projects need funding to close all current and future year gaps within 
ten years. To complete all of these current and projected projects, VA 
will need to invest between $6.7 and $8.2 billion in minor construction 
over the next decade.
    In August 2014, the President signed the Veterans Access, Choice, 
and Accountability Act of 2014 (Public Law 133-146). In this law, 
Congress provided $5 billion to increase health care access by 
increasing medical staffing levels and investing in infrastructure. VA 
has developed a spending plan that obligated $511 million for 64 minor 
construction projects over a two-year period.
    While this infusion of funds has helped, there are still hundreds 
of minor construction projects that need funding for completion. It is 
important to remember that these funds are a supplement to, not a 
replacement of, annual appropriations for minor construction projects. 
The IBVSOs recommend that Congress fund VA's minor construction account 
at $700 million in an effort to close all identified gaps within ten 
years.
Leasing
    Historically, VA has submitted capital leasing requests that meet 
the growing and changing needs of veterans. VA has again requested an 
adequate amount--$270.1 million for its FY 2018 major medical leasing 
needs. While VA has requested adequate resources, Congress must find a 
way to authorize and appropriate leasing projects in a way that 
precludes the full cost of the lease being accounted for in the first 
year. There are now 27 major medical leases awaiting congressional 
authorization, 18 of which have been waiting since FY 2016 and six from 
FY 2017 that Congress must still authorize. Delays in authorization of 
these leases have a direct impact on VA's ability to provide timely 
care to veterans in their communities. Congress must authorize these 
leases.

    National Cemetery Administration
    FY 2018 IB Recommendation--$291 million
    FY 2018 Administration Request **-- $306.2 million
    FY 2017 Appropriations **-- $286 million

    The NCA, which receives funding from eight appropriation accounts, 
has the sacred duty to provide the brave men and women who have worn 
our nation's uniform a final resting place that honors their service.
    In a strategic effort to meet the burial and access needs of our 
veterans and eligible family members, the NCA continues to expand and 
improve the national cemetery system, by adding new and/or expanded 
national cemeteries. Not surprising, due to the opening of additional 
national cemeteries, the NCA is expecting an increase in the number of 
annual veteran interments through 2016 to more than 136,000, up from 
125,180 in 2014; this number is expected to slowly decrease after an 
expected peak of 138,000 in 2022. This much needed expansion of the 
national cemetery system will help to facilitate the projected increase 
in annual veteran interments and will simultaneously increase the 
overall number of graves being maintained by the NCA to 3.7 million in 
2018 and 4 million by 2021.
    Even as the NCA continues to add veteran burial space to its 
expanding system, many existing cemeteries are exhausting their 
capacity and will no longer be able to inter casketed or cremated 
remains. That is why the VFW is glad the see the Administration's FY 
2018 budget request for the National Cemetery Administration is higher 
than what the IBVSOs have recommended and includes a seven percent 
increase from FY 2017 appropriations.
    Factors that have placed additional demand on the NCA include an 
increase in the issuance of Presidential Memorial Certificates, which 
is expected to increase from approximately 654,000 in 2013 to more than 
870,000 in 2017; the expected increase in the burial of Native 
American, Alaska Native, and Pacific Islander veterans; and the 
possible increase, thanks to local historians and other interested 
stakeholders, in requests for headstones or markers for previously 
unidentified veterans. That is why the IBVSOs are glad to see the 
Administration has requested $256 million in FY 2018 to fund six 
national cemetery expansion projects which would provide more than 
161,000 new burial spaces for veterans.
    With the above considerations in mind, The Independent Budget 
recommends $291 million for FY 2018 for the Operations & Maintenance of 
the NCA. The IBVSOs believe that this should include a minimum of $20 
million for the National Shrine Initiative. The IBVSOs laud the 
Administration for providing NCA the first increase in this important 
initiative since FY 2013.

                                 
                    DISABLED AMERICAN VETERANS (DAV)
      PAUL R. VARELA, DAV ASSISTANT NATIONAL LEGISLATIVE DIRECTOR
    Mr. Chairman and Members of the Committee:

    As one of the co-authors of The Independent Budget (IB), along with 
Veterans of Foreign Wars (VFW) and Paralyzed Veterans of America (PVA), 
DAV is pleased to present our views regarding fiscal year (FY) 2018 
funding requirements to support the Department of Veterans Affairs (VA) 
ability to process and deliver benefits to veterans, their families and 
survivors.

GENERAL OPERATING EXPENSES (GOE)

Veterans Benefits Administration $3.135 billion

    The Veterans Benefits Administration (VBA) account is comprised of 
six primary divisions. These include Compensation; Pension; Education; 
Vocational Rehabilitation and Employment (VR&E); Housing; and 
Insurance. The increases recommended for these accounts primarily 
reflect current services estimates with the impact of inflation 
accounting for most of the increase. However, the IB recommendations 
for Compensation and VR&E also reflect a significant increase in 
requested staffing to meet the rising demand for those benefits. The IB 
recommends approximately $3.135 billion overall for VBA for FY 2018, an 
increase of approximately $279 million over the enacted FY 2017 
appropriations level. The IB recommendation includes an increase of 
$183 million above current services in the Compensation account, and 
approximately $32 million above current services in the VR&E account to 
provide for approximately 2,000 new full-time equivalent employees 
(FTEE) to address rising workload.

Compensation Service Personnel 1750 New FTEEs $183 million

    VBA continues to produce record numbers of claims while maintaining 
an emphasis on quality. Over the past few years, VBA has made 
significant progress in reducing the disability compensation backlog, 
which at its peak, stood at over 600,000 claims in March 2013. Today, 
the claims backlog stands at just over 90,000 claims, a decrease of 
more than 85 percent from its peak. There has also been a troubling 
rise in the overall disability claims inventory and the amount of time 
it takes to process both claims and appeals. These increases can be 
attributed to multiple factors, including an increase in the number of 
claims and appeals being filed, the lack of adequate resources to keep 
pace with demand and the curtailing of mandatory overtime to reduce the 
claims backlog.
    In 2009, VBA issued claims decisions on 2.74 million medical 
issues; that number more than doubled to 5.76 million in FY 2016, but 
was less than FY 2015 when it issued 6.35 million decisions on medical 
issues. In March of 2013, VBA required roughly 282 days to process a 
claim. At the close of FY 2016, VBA reported that on average, it took 
123 days to process a claim; however, in FY 2015, VBA reported that it 
took, on average, 92 days to complete a claim. In FY 2015, total 
inventory stood at about 352,000 claims; today VBA has a total 
inventory close to 400,000 claims. Furthermore, VBA has an inventory of 
nearly 584,000 non-disability rating claims, for example, claims for 
changes in dependent or marital status.
    It will require a combined focus on technology and staffing levels 
to enable VBA to provide veterans and their dependents with more timely 
and accurate claims decisions. For FY 2018, the Independent Budget 
veterans service organizations IBVSOs recommend an additional 1,750 
FTEE to manage VBA's overall rising workload. Furthermore, since VBA 
stopped utilizing mandatory overtime for claims processing, the true 
need for additional personnel has become more evident. Of the overall 
increase in personnel, we recommend 1,000 FTEE be dedicated to 
processing appeals pending at VBA in an effort to eliminate the backlog 
of 380,000 appeals in VBA over the next three years. Depending on 
progress this year, further personnel increases may be necessary to 
reduce the appeals backlog at VBA. In addition, we recommend 350 FTEE 
be dedicated to addressing the growing backlog of non-rating related 
work, such as dependency claims. An additional further 300 FTEE should 
be dedicated for claims processing to address the incremental rise in 
the claims inventory and backlog and 100 FTEE dedicated to staffing the 
Fiduciary program to meet the growing needs of veterans participating 
in VA's Caregiver Support programs. This recommendation is based on a 
July 2015 VA Inspector General report on the Fiduciary program that 
found, ``.Field Examiner staffing did not keep pace with the growth in 
the beneficiary population, [and] VBA did not staff the hubs according 
to their staffing plan..''

VR&E Service Personnel 266 New FTEEs $32 million

    The Vocational Rehabilitation and Employment Service (VR&E), also 
known as the VetSuccess program, provides critical counseling and other 
adjunct services necessary to enable service disabled veterans to 
overcome barriers as they prepare for, find, and maintain gainful 
employment. VetSuccess offers services on five tracks: re-employment; 
rapid access to employment; self-employment; employment through long-
term services; and independent living.
    VR&E also operates its VetSuccess on Campus (VSOC) program at 94 
college campuses.
    Over the past few years, program participation has increased by 15 
percent overall: increasing by 7.3 percent in FY 2015, 3.8 percent in 
FY 2016, and an estimated 4 percent in FY 2017. As VBA continues to 
expand VR&E eligibility to more veterans, due to increased claims 
processing and the award of new service-connected disabilities due to 
new presumptive disabilities, we project that total program 
participation for FY 2018 will grow by at least 5 percent for total 
caseload of close to 155,000.
    Last year, Congress enacted Public Law 114-223, which authorizes 
the Secretary to use appropriated funds to ensure the ratio of veterans 
to full-time employment equivalents does not exceed 125 veterans to one 
full-time employment equivalent, a goal that VA has not met for many 
years. In July 2015, VR&E reported that its average Vocational 
Rehabilitation Counselor (VRC)-to-client ratio had risen to 1:139. 
However, in both FY 2016 and FY 2017, the Administration flat-lined the 
VR&E request for direct personnel at 1,442. In order to achieve and 
sustain a 1:125 counselor-to-client ratio in FY 2018, we estimate that 
VR&E would need 266 new FTEE, for a total workforce of 1,550 FTEE, to 
manage an active caseload and provide support services to 155,000 VR&E 
participants. At a minimum, three-quarters, of the new hires should be 
VRCs dedicated to providing direct services to veterans. This increase 
in personnel would address expected growth in VR&E claim filings and 
program participation, as well as collateral duties performed by VRCs 
outside of general case management. It is also essential that these 
increases be properly distributed throughout all of VR&E to ensure that 
VRC caseloads are equitably balanced among VA Regional Offices.

GENERAL ADMINISTRATION

Board of Veterans' Appeals $158 million

    Faced with a rising appeals backlog that could no longer be 
ignored, Congress last year authorized the Board of Veterans' Appeals 
(Board) to increase its FTEE by 242 over FY 2016 levels, bringing their 
total authorized staffing to 922 FTEE for FY 2017; however, the Board 
currently has only about 860 FTEE. For FY 2018, the IBVSOs recommend no 
additional increases in FTEE; but note, the Board must be permitted to 
hire its full complement of 922 FTEE. Further, as the number of claims 
processed annually continues to rise as a result of the increased 
capacity of VBA, the number of appeals filed annually will grow 
commensurately. In order for the Board to keep pace with this new 
incoming workload alone, not including those appeals already in the 
system, FTEE levels will have to be adjusted accordingly, though 
appeals reform legislation could alleviate some of that need in the 
future.
    The VA Appeals Improvement and Modernization Act of 2017 (H.R. 
2288), legislation that would fundamentally reform and streamline the 
overall appeals process has been introduced in the 115th Congress and 
is moving forward. This measure includes provisions that reflect 
significant efforts and the consensus of a working group formed in 
March 2016 that consisted of the IBVSOs, other VSO stakeholders, and 
leaders within VBA and the Board. Regardless of potential passage of 
this legislation the Board will continue to require resources 
commensurate with workload, especially to process legacy appeals 
remaining at the time of enactment of new appeals reform legislation. 
Further, the Board must be funded and empowered to continue pursuing IT 
modernization solutions that best meet the specific workflow needs of 
the Board, while ensuring it also supports seamless integration with 
VBMS and other IT systems used by VBA and the Court of Appeals for 
Veterans Claims.

COST OF LIVING ROUND DOWN

    The Administration's budget proposal released on May 23, 2017, 
contains a provision that would round down cost-of-living adjustments 
(COLAs) for our nation's injured and ill veterans and their families 
for a period of 10 years. DAV and our IB partners are opposed to this 
rounding down provision. Veterans and their survivors rely on their 
compensation for essential purchases such as food, transportation, 
rent, and utilities. It also enables them to maintain a marginally 
higher quality of life.
    Rounding down veterans' COLAs unfairly targets disabled veterans, 
their dependents and survivors to save the government money or offset 
the cost of other federal programs. The cumulative effect of this 
provision of law would, in essence, levy a 10-year tax on disabled 
veterans and their survivors, reducing their income each year. When 
multiplied by the number of disabled veterans and recipients of 
Dependency and Indemnity Compensation or DIC, hundreds of millions of 
dollars would be siphoned from these deserving individuals annually. 
All totaled, VA estimates, this proposed COLA round down would cost 
beneficiaries close to $2.7 billion over 10 years.

INDIVIDUAL UNEMPLOYABILITY AND SOCIAL SECURITY OFFSET

    We also note there is a new proposal included in the President's 
budget that would impact the VA's Individual Unemployability or IU 
program which allows VA to pay certain veterans disability compensation 
at the 100 percent rate, even though VA has not rated their service-
connected disabilities at the total level. Specifically, the proposal 
would terminate existing IU ratings for veterans when they reach the 
minimum retirement age for Social Security purposes, or upon enactment 
of the proposal if the veteran is already in receipt of Social Security 
retirement benefits. DAV and our IB partners oppose this proposal.
    We oppose any measure that proposes to offset the payment of any 
other federal benefit, or earned benefit entitlement by VA compensation 
payments made to service-connected disabled veterans. Benefits received 
from the VA, or based on military retirement pay and other federal 
programs have differing eligibility criteria as compared with the 
earned payments of Social Security. Reducing a benefit provided to a 
disabled veteran in receipt of IU due to receipt of a different benefit 
offered through separate federal benefit program is simply an unjust 
penalty.
    Likewise, we are opposed to limiting a compensation benefit due to 
a veteran's age. Some veterans might not have income replacement 
available-especially those who had been on IU for an extended period in 
advance of reaching retirement age.
    Mr. Chairman, thank you for the opportunity to submit testimony and 
to present our views regarding FY 2018 funding requirements to support 
the VA's ability to process and deliver benefits to veterans, their 
families and survivors. I would be happy to respond to any questions 
that you or members of the Committee may have regarding this statement 
or our recommendations.

                                 
                  PARALYZED VETERANS OF AMERICA (PVA)
    Chairman Roe, Ranking Member Walz, and members of the Committee, as 
one of the co-authors of The Independent Budget (IB), along with DAV 
and Veterans of Foreign Wars, Paralyzed Veterans of America (PVA) is 
pleased to present our views regarding the funding requirements for the 
delivery of health care for the Department of Veterans Affairs (VA) for 
FY 2018 and advance appropriations for FY 2019. On the following page, 
we have included a side-by-side comparison of funding recommendations 
previously appropriated, recommended by the Administration, and 
recommended by the IB for FY 2017 and FY 2018, as well as the advance 
appropriations for FY 2019.
    VA Accounts for FY 2018 and FY 2019 Advance Appropriations
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]   
    
    The IB's recommendations include funding for all discretionary 
programs for FY 2018 as well as advance appropriations recommendations 
for medical care accounts for FY 2019. The full budget report recently 
released by The Independent Budget addressing all aspects of 
discretionary funding for the VA can be downloaded at 
www.independentbudget.org. The FY 2018 projections are particularly 
important because previous VA Secretary Robert McDonald admitted last 
year that the VA's FY 2018 advance appropriation request was not truly 
sufficient and would need significant additional resources provided 
this year. We hope that Congress will take this defined shortfall very 
seriously and appropriately address this need. Our own FY 2018 
estimates affirm this need.
    We appreciate the fact that the Administration's budget request 
just released includes some increases in discretionary dollars for the 
Medical Care accounts. However, it is important for us to address the 
notion that VA does not need any additional resources, based on the 
expansive growth of overall VA expenses in the last 10 years. These 
ideas are not grounded in thorough analysis of demand and utilization 
of VA health care. Perhaps Congress can explain how the VA can take on 
significantly more demand for services both inside VA and in the 
community, and yet meet that demand and utilization with less resources 
(an assertion peddled by some organizations). While VA has seen 
substantial growth in its funding needs over the last decade, much of 
that is reflected in mandatory benefits to include the implementation 
of the Post-9/11 GI Bill.
    We also believe it is necessary to consider the projected 
expenditures under the Choice program authority that the previous 
Administration planned in FY 2017 and how that impacts the baseline 
that will dictate the funding needs for FY 2018. The previous 
Administration assumed as much as $5.7 billion in spending through the 
Choice program in FY 2017, on top of the Medical Services discretionary 
funding and the newly created Medical Community Care account. That 
amount was revised to approximately $2.9 billion. This means that the 
VA projected to spend more than $59.0 billion in Medical Services and 
more than $71.0 billion in overall Medical Care funding in FY 2017. 
These considerations inform the decisions of The Independent Budget to 
establish our baseline for our funding recommendations for both FY 2018 
and FY 2019.
    Earlier this year, the Administration also indicated that it 
intends to request as much as $3.5 billion in additional funding for 
the Choice program to keep it operating at least through the end of FY 
2018. That amount has since been revised to $2.9 billion for FY 2018 
and $3.5 billion for FY 2019 and beyond. However, this recommendation 
begs the question: does this recommendation suggest that the Choice 
program as currently designed should continue in perpetuity? Certainly 
no reasonable person supports that idea. We believe that Congress must 
reject continued funding of this program through a mandatory account 
and place in line with all other community care funded through the 
discretionary Community Care account established previously by in order 
to eliminate competing sources of funding for delivery of health care 
services in the community, while maintaining visibility on spending 
through the Choice program.
    For FY 2018, the IB recommends approximately $77.0 billion in total 
medical care funding. Congress previously approved only $70.0 billion 
in total medical care funding for FY 2018 (which includes an assumption 
of approximately $3.6 billion in medical care collections). The 
Administration's budget request includes a not-insignificant overall 
medical care funding recommendation of approximately $75.2 billion. 
However, we remain concerned that this level of funding will not keep 
pace with the continually increasing demand and utilization. The IB's 
recommendation also considers the approximately $1 billion VA is 
expected to have remaining in the Veterans Choice Fund and expected 
demand for care, including community care, that will not diminish or go 
away if the Choice Program expires. The Independent Budget recommends 
approximately $82.8 billion in advance appropriations for total Medical 
Care for FY 2019.
Medical Services

    For FY 2018, The Independent Budget recommends $64.5 billion for 
Medical Services. This recommendation includes:

 
 
 
 
                                          Current Services Estimate                       $60,897,313,000
                                       Increase in Patient Workload                        $1,595,242,000
                               Additional Medical Care Program Cost                        $2,001,000,000
                                     Total FY 2018 Medical Services                       $64,493,555,000
 

    The current services estimate reflects the impact of projected 
uncontrollable inflation on the cost to provide services to veterans 
currently using the system. This estimate also assumes a 1.5 percent 
increase for pay and benefits across the board for all VA employees in 
FY 2018. It was previously reported that the new Administration would 
like to consider a 1.9 percent federal pay raise.
    Our estimate of growth in patient workload is based on a projected 
increase of approximately 90,000 new unique patients. These patients 
include priority group 1*-8 veterans and covered non-veterans. We 
estimate the cost of these new unique patients to be approximately $1.4 
billion. The increase in patient workload also includes a projected 
increase of 58,000 new Operation Enduring Freedom and Operation Iraqi 
Freedom (OEF/OIF) enrollees, as well as Operation New Dawn (OND) 
veterans at a cost of approximately $242 million. The increase in 
utilization among OEF/OIF/OND veterans is supported by the average 
annual increase in new users through the third quarter of FY 2016.
    Additionally, The Independent Budget believes that there are 
medical program funding needs for VA that must be considered. Those 
costs total approximately $2.0 billion.

Long-Term Services and Supports

    The Independent Budget recommends $535 million for FY 2018. This 
recommendation reflects the fact that there was a significant increase 
in the number of veterans receiving Long Term Services and Supports 
(LTSS) in 2016. Unfortunately, due to loss of authorities-specifically 
fee-care no longer being authorized, provider agreement authority not 
yet enacted, and the inability to use Choice funds for all but skilled 
nursing care-to purchase appropriate LTSS care particularly for home 
and community-based care, we estimate an increase in the number of 
veterans using the more costly long-stay and short-stay nursing home 
care.

Prosthetics and Sensory Aids

    In order to meet the increase in demand for prosthetics, the IB 
recommends an additional $320 million. This increase in prosthetics 
funding reflects a similar increase in expenditures from FY 2016 to FY 
2017 and the expected continued growth in expenditures for FY 2018.

Women Veterans

    The Medical Services appropriation should be supplemented with $110 
million designated for women's health care programs in FY 2018. These 
funds will be used to help the VA deal with the continuing growth in 
women veterans coming to VA for care, including coverage for 
gynecological, prenatal, and obstetric care, other gender-specific 
services, and for expansion and repair of facilities hosting women's 
care to improve privacy and safety of these facilities. The new funds 
would also aid VHA in making its cultural transformation to ensure 
women veterans are made to feel welcome at VA, and provide means for VA 
to improve specialized services for preventing suicide and homelessness 
and improvements for mental health and readjustment services for women 
veterans.

Reproductive Services (to Include IVF)

    Last year, Congress authorized appropriations for the remainder of 
FY 2017 and FY 2018 to provide reproductive services, to include in 
vitro fertilization (IVF), to service-connected catastrophically 
disabled veterans whose injuries preclude their ability to conceive 
children. The VA projects that this service will impact less than 500 
veterans and their spouses in FY 2018. The VA also anticipates an 
expenditure of no more than $20 million during that period. However, 
these services are not directly funded; therefore, the IB recommends 
approximately $20 million to cover the cost of reproductive services in 
FY 2018. We are pleased to see that the Administration does retain the 
authority to provide reproductive services in its budget proposal.

Emergency Care

    Recently, the VA has received serious scrutiny for its 
interpretation of legislation dating back to 2009, which required it to 
pay for veterans who sought emergency care outside of the VA health 
care system. The Richard W. Staab v. Robert A. McDonald ruling handed 
down by the US Court of Appeals for Veterans Claims last year, places 
the financial responsibility of these emergency care claims squarely on 
the VA. Although VA continues to appeal this decision, it is not 
expected to prevail in this case leaving itself with a more than $10 
billion dollar obligation over the next 10 years. The Staab ruling is 
estimated to cost VA approximately $1.0 billion in FY 2018 and about 
$1.1 billion in FY 2019, which the IB has included in our 
recommendations. We are disappointed to see that the Administration's 
proposal continues to ignore its growing obligation to cover the cost 
of emergency care as dictated by the Staab decision.

FY 2019 Medical Services Advance Appropriations

    The Independent Budget once again offers baseline projections for 
funding through advance appropriations for the Medical Care accounts 
for FY 2019. While the enactment of advance appropriations for VA 
medical care in 2009 helped to improve the predictability of funding 
requested by the Administration and approved by Congress, we have 
become increasingly concerned that sufficient corrections have not been 
made in recent years to adjust for new, unexpected demand for care. As 
indicated previously, we have serious concerns that the previous 
Administration significantly underestimated its FY 2018 advance 
appropriations request. This trend cannot be allowed to continue, 
particularly as Congress continues to look for ways to reduce 
discretionary spending, even when those reductions cannot be justified.
    For FY 2019, The Independent Budget recommends approximately $69.5 
billion for Medical Services. Our Medical Services advance 
appropriations recommendation includes:

 
 
 
 
                                          Current Services Estimate                       $66,334,946,000
                                       Increase in Patient Workload                        $1,589,892,000
                               Additional Medical Care Program Cost                        $1,526,000,000
                                     Total FY 2019 Medical Services                       $69,450,838,000
 

    Our estimate of growth in patient workload is based on a projected 
increase of approximately 78,000 new patients. These new unique 
patients include priority group 1*-8 veterans and covered nonveterans. 
We estimate the cost of these new patients to be approximately $1.3 
billion. This recommendation also reflects an assumption that more 
veterans will be accessing the system as VA expands its capacity and 
services and we believe that reliance rates will increase as veterans 
examine their health care options as a part of the Choice program. The 
increase in patient workload also assumes a projected increase of 
62,500 new OEF/OIF and OND veterans, at a cost of approximately $272 
million.
    As previously discussed, the IBVSOs believe that there are 
additional medical program funding needs for VA. In order to meet the 
increase in demand for prosthetics, the IB recommends an additional 
$330 million. We believe that VA should invest a minimum of $120 
million as an advance appropriation in FY 2019 to expand and improve 
access to women veterans' health care programs. Our additional program 
cost recommendation includes continued investment of $20 million to 
support extension of the authority to provide reproductive services to 
the most catastrophically disabled veterans. Finally, VA's cost burden 
for paying emergency care claims dictated by the Staab ruling will 
require at least $1.1 billion in FY 2019 alone.

Medical Support and Compliance

    For Medical Support and Compliance, The Independent Budget 
recommends $6.7 billion for FY 2018. Our projected increase reflects 
growth in current services based on the impact of inflation on the FY 
2017 appropriated level. Additionally, for FY 2019 The Independent 
Budget recommends $6.8 billion for Medical Support and Compliance. We 
have concerns about the significant growth in these administrative 
account functions recommended by the Administration (nearly $300 
million in FY 2018 and an additional $300 million in FY 2019) as these 
areas have been shown to be bloated on numerous occasions in the past. 
These dollars could certainly be better spent providing direct care 
services to veterans.

Medical Facilities

    For Medical Facilities, The Independent Budget recommends $5.8 
billion for FY 2018. Our Medical Facilities recommendation includes 
$1.35 billion for Non-Recurring Maintenance (NRM). Likewise, The 
Independent Budget recommends approximately $6.6 billion for Medical 
Facilities for FY 2019. Our FY 2019 advance appropriation 
recommendation also includes $1.35 billion for NRM. We are pleased to 
see the Administration recommending real funding for this account in FY 
2018 (approximately $6.5 billion), but we are concerned that the Budget 
Request reflects the continued trend of reducing the recommendation in 
the advance appropriation year ($5.9 billion in FY 2019) in order to 
seemingly hold down discretionary projections.

Medical and Prosthetic Research

    We are very disappointed to see the major cut in funding for the 
Medical and Prosthetic Research program in the Administration's Budget 
Request-from $675 million in FY 2017 to $640 million in FY 2018. The VA 
Medical and Prosthetic Research program is widely acknowledged as a 
success on many levels, and contributes directly to improved care for 
veterans and an elevated standard of care for all Americans. We 
recommend that Congress appropriate $713 million for Medical and 
Prosthetic Research for FY 2018. Additionally, under the President's 
Precision Medicine Initiative, the IBVSOs recommend $65 million to 
enable VA to process one quarter of the MVP samples collected, for a 
total research appropriation of $778 million.
    Thank you for the opportunity to submit our views on the FY 2018 VA 
Budget Request. We would be happy to answer any questions the Committee 
may have.

                                 
                         THE INDEPENDENT BUDGET
                BUDGET RECOMMENDATIONS FOR FY18 AND FY19
                              Introduction
    For more than 30 years, the co-authors of The Independent Budget 
(IB)-Disabled American Veterans (DAV), Paralyzed Veterans of America 
(Paralyzed Veterans), and Veterans of Foreign Wars (VFW)-have presented 
our budget and policy recommendations to Congress and the 
Administration. Our recommendations are meant to inform Congress and 
the Administration of the needs of our members and all veterans and to 
offer substantive solutions to address the many health care and 
benefits challenges they face. This budget report serves as our 
benchmark for properly funding the Department of Veterans Affairs (VA) 
to ensure the delivery of timely, quality health care and accurate and 
appropriate benefits.
    The IB veterans' service organizations (IBVSOs) recognize that 
Congress and the Administration continue to face immense pressure to 
reduce federal spending. However, we believe that the ever-growing 
demand for health care and benefits services, particularly with more 
health care being provided in the community, provided by the VA 
certainly validates the continued need for sufficient funding. We 
understand that VA has fared better than most federal agencies in 
budget proposals and appropriations, but the real measure should be how 
well the funding matches the demand for veterans' benefits and 
services.
    We appreciate that Congress remains committed to doing the right 
thing and has continued to provide increases in appropriations dollars. 
However, the serious access problems in the health care system 
identified in 2014 and the continued pressure being placed on the 
claims processing system raise serious questions about the adequacy of 
resources being provided and how VA chooses to spend these resources.
    The IBVSOs are jointly releasing this stand-alone report that 
focuses solely on the budget for VA and our projections for VA's 
funding needs across all programs. This report is not meant to suggest 
that these are the absolute correct answers for funding these services. 
However, in submitting our recommendations the IBVSOs are attempting to 
produce an honest assessment of need that is not subject to the 
politics of federal budget development and negotiations that inevitably 
have led to continuous funding deficits.
    Our recommendations include funding for all discretionary programs 
for FY 18 as well as advance appropriations recommendations for medical 
care accounts for FY 19. The FY 18 projections are particularly 
important because previous VA Secretary Robert McDonald admitted last 
year that the VA's FY 18 advance appropriation request was not truly 
sufficient and would need significant additional resources provided 
this year. We hope that Congress will take this defined shortfall very 
seriously and appropriately address this need. Our own FY 18 estimates 
affirm this need.
    We hope that the House and Senate Committees on Veterans' Affairs 
as well as the Military Construction and Veterans' Affairs 
Appropriations Subcommittees will be guided by these estimates in 
making their decisions to ensure sufficient, timely, and predictable 
funding for VA.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    *The Administration's FY 17 revised budget request initially 
assumed approximately $5.7 billion in resource expenditures from the 
Choice program. More recent estimates from VA indicate about $2.9 
billion in resource expenditures from the Choice program in FY 17 
increasing the total Medical Services expenditure for FY 17, including 
Medical Care Collections, to nearly $59.2 billion.
                     Veterans Health Administration

                                               Total Medical Care
 
 
 
                             FY 18 IB Recommendations                                      $77.0 billion
                 FY 18 Revised Administration Request
                 FY 18 Enacted Advance Appropriations                                      $66.4 billion
                             Medical Care Collections                                       $3.6 billion
                                                Total                                      $70.0 billion
 
       FY 19 IB Advance Appropriations Recommendation                                      $82.8 billion
  FY 19 Administration Advance Appropriations Request
                             Medical Care Collections
                                                Total
 


    The IBVSOs have serious concerns about the FY 18 advance 
appropriations requested by the previous Admin-istration and 
subsequently approved by Congress. Last year, the former Secretary of 
Veterans Affairs openly admitted that the FY 18 advance appropriations 
request was significantly short. He also indicated that the new 
Administration and Congress would have to correct this shortfall. We 
are concerned that this new Administra-tion has not yet indicated its 
desire to correct this problem before it has catastrophic consequences 
for the VA. If the new Administration's budget request fails to 
properly address this issue, it is imperative that Congress takes 
necessary action to properly resource the VA health care system.
    We also believe it is necessary to consider the projected 
expenditures under the Choice program authority that the previous 
Administration planned in FY 17 and how that impacts the baseline that 
will dictate the fund-ing needs for FY 18. The previous Administration 
assumed as much as $5.7 billion in spending through the Choice program 
in FY 17, on top of the Medical Services discretionary funding and the 
newly created Medical Community Care account. That amount has now been 
revised to approximately $2.9 billion. This means that the VA projected 
to spend more than $59.0 billion in Medical Services and more than 
$71.0 billion in over-all Medical Care funding in FY 17. These 
considerations inform the decisions of The Independent Budget to 
establish our baseline for our funding recommendations for both FY 18 
and the advance appropriations for FY 19.
    For FY 18, the IB recommends approximately $77.0 billion in total 
medical care funding. Congress previously approved only $70.0 billion 
for this account for FY 18 (which includes an assumption of 
approximately $3.6 billion in medical care collections). The IB's 
recommendation also considers the approximately $1 billion VA is 
expected to have remaining in the Veterans Choice Fund and expected 
demand for care, including community care, that will not diminish or go 
away if the Choice Program expires.


                                                Medical Services
 
 
 
                             Appropriations for FY 18
                             FY 18 IB Recommendations                                      $64.5 billion
                 FY 18 Revised Administration Request
                             Medical Care Collections                                       $3.6 billion
                                             Subtotal
                 FY 18 Enacted Advance Appropriations                                      $54.3 billion
                             Medical Care Collections                                       $3.6 billion
                                             Subtotal                                      $57.9 billion
 

    For FY 18, The Independent Budget recommends $64.5 billion for 
Medical Services. This recommendation is a reflection of multiple 
components. These components include the following recommendations:


 
 
 
 
                                          Current Services Estimate                       $60,897,313,000
                                       Increase in Patient Workload                        $1,595,242,000
                               Additional Medical Care Program Cost                        $2,001,000,000
                                       Total FY 18 Medical Services                       $64,493,555,000
 


    The current services estimate reflects the impact of projected 
uncontrollable inflation on the cost to provide services to veterans 
currently using the system. This estimate also assumes a 1.5 percent 
increase for pay and benefits across the board for all VA employees in 
FY 18.
    Our estimate of growth in patient workload is based on a projected 
increase of approximately 90,000 new unique patients. These patients 
include priority group 1*-8 veterans and covered non-veterans. We 
estimate the cost of these new unique patients to be approximately $1.4 
billion. The increase in patient workload also includes a projected 
increase of 58,000 new Operation Enduring Freedom and Operation Iraqi 
Freedom (OEF/OIF) enrollees, as well as Operation New Dawn (OND) 
veterans at a cost of approximately $242 million. The increase in 
utilization among OEF/OIF/OND veterans is supported by the average 
annual increase in new users through the third quarter of FY 2016.
    The Independent Budget believes that there are additional projected 
medical program funding needs for VA. Those costs total approximately 
$2.0 billion. Specifically, we believe there is real funding needed to 
address the array of long-term-care issues facing VA, including the 
shortfall in institutional capacity; to provide additional centralized 
prosthetics funding (based on actual expenditures and projections from 
the VA's Prosthetics and Sensory Aids Service); funding to expand and 
improve services for women veterans; funding to support the recently 
approved authority for reproductive services, to include in vitro 
fertilization (IVF); and funding to allow VA to MEET the building costs 
for emergency care as dictated by the Staab court ruling.

Long-Term Services and Supports

    The Independent Budget recommends $535 million for FY 18. This 
recommendation reflects the fact that there was a significant increase 
in the number of veterans receiving Long Term Services and Supports 
(LTSS) in 2016. Unfortunately, due to loss of authorities-specifically 
fee-care no longer being authorized, provider agreement authority not 
yet enacted, and the inability to use Choice funds for all but skilled 
nursing care-to purchase appropriate LTSS care particularly for home- 
and community-based care, we estimate an increase in the number of 
veterans using the more costly long-stay and short-stay nursing home 
care.

Prosthetics and Sensory Aids

    In order to meet the increase in demand for prosthetics, the IB 
recommends an additional $320 million. This increase in prosthetics 
funding reflects a similar increase in expenditures from FY 2016 to FY 
17 and the expected continued growth in expenditures for FY 18.

Women Veterans

    The Medical Services appropriation should be supplemented with $110 
million designated for women's health care programs, in addition to 
those amounts already included in the FY 18 baseline. These funds would 
be used to help the Veterans Health Administration deal with the 
continuing growth in women veterans coming to VA for care, including 
coverage for gynecological, prenatal, and obstetric care, other gender-
specific services, and for expansion and repair of facilities hosting 
women's care to improve privacy and safety of these facilities. The new 
funds would also aid VHA in making its cultural transformation to 
ensure women veterans are made to feel welcome at VA, and provide means 
for VA to improve specialized services for preventing suicide and 
homelessness and improvements for mental health and readjustment 
services for women veterans.

Reproductive Services (to Include IVF)

    Last year, Congress authorized appropriations for the remainder of 
FY 17 and FY 18 to provide reproductive services, to include in vitro 
fertilization (IVF), to service-connected catastrophically disabled 
veterans whose injuries preclude their ability to conceive children. 
The VA projects that this service will impact less than 500 veterans 
and their spouses in FY 18. The VA also anticipates an expenditure of 
no more than $20 million during that period. However, these services 
are not directly funded; therefore, the IB recommends approximately $20 
million to cover the cost of reproductive services in FY 18.

Emergency Care

    Recently, the VA has received serious scrutiny for its 
interpretation of legislation dating back to 2009, which required it to 
pay for veterans who sought emergency care outside of the VA health 
care system. The Richard W. Staab v. Robert A. McDonald ruling handed 
down by the US Court of Appeals for Veterans Claims last year, places 
the financial responsibility of these emergency care claims squarely on 
the VA. Although VA continues to appeal this decision, it is not 
expected to prevail in this case leaving itself with a more than $10 
billion dollar obligation over the next 10 years. The Staab ruling is 
estimated to cost VA approximately $1.0 billion in FY 18 and about $1.1 
billion in FY 19, which the IB has included in our recommendations.

                                        Advance Appropriations for FY 19
 
 
 
      FY 19 IB Advance Appropriations Recommendations                                      $69.5 billion
  FY 19 Administration Advance Appropriations Request
                             Medical Care Collections
                                             Subtotal
 

    The Independent Budget once again offers baseline projections for 
funding through advance appropriations for the Medical Care accounts 
for FY 19. While the enactment of advance appropriations for VA medical 
care in 2009 helped to improve the predictability of funding requested 
by the Administration and approved by Congress, we have become 
increasingly concerned that sufficient corrections have not been made 
in recent years to adjust for new, unexpected demand for care. As 
indicated previously, we have serious concerns that the previous 
Administration significantly underestimated its FY 18 advance 
appropriations request. This trend cannot be allowed to continue, 
particularly as Congress continues to look for ways to reduce 
discretionary spending, even when those reductions cannot be justified.
    For FY 19, The Independent Budget recommends approximately $69.5 
billion for Medical Services. Our Medical Services level includes the 
following recommendations:


 
 
 
 
                                          Current Services Estimate                       $66,334,946,000
                                       Increase in Patient Workload                        $1,589,892,000
                               Additional Medical Care Program Cost                        $1,526,000,000
                                       Total FY 17 Medical Services                       $69,450,838,000
 

    Our estimate of growth in patient workload is based on a projected 
increase of approximately 78,000 new patients. These new unique 
patients include priority group 1*-8 veterans and covered nonveterans. 
We estimate the cost of these new patients to be approximately $1.3 
billion. This recommendation also reflects an assumption that more 
veterans will be accessing the system as VA expands its capacity and 
services and we believe that reliance rates will increase as veterans 
examine their health care options as a part of the Choice program. The 
increase in patient workload also assumes a projected increase of 
62,500 new OEF/OIF and OND veterans, at a cost of approximately $272 
million.
    Last, as previously discussed, the IBVSOs believe that there are 
additional medical program funding needs for VA. In order to meet the 
increase in demand for prosthetics, the IB recommends an additional 
$330 million, reflecting the ever-growing cost of more advanced 
prosthetics being prescribed for seriously disabled veterans. We 
believe that VA should invest a minimum of $120 million as an advance 
appropriation in FY 19 to expand and improve access to women veterans' 
health care programs. Our additional program cost recommendation 
includes continued investment of $20 million to support extension of 
the authority to provide reproductive services to the most 
catastrophically disabled veterans. Finally, VA's cost burden for 
finally paying emergency care claims dictated by the Staab ruling 
exceeds $10.0 billion over 10 years and will require at least $1.1 
billion in FY 19 alone.

                                         Medical Support and Compliance
 
 
 
                             FY 18 IB Recommendations                                     $6.658 billion
                 FY 18 Revised Administration Request
                 FY 18 Enacted Advance Appropriations                                     $6.654 billion
      FY 19 IB Advance Appropriations Recommendations                                     $6.793 billion
  FY 19 Administration Advance Appropriations Request
 

    For Medical Support and Compliance, The Independent Budget 
recommends $6.7 billion for FY 18. Our projected increase reflects 
growth in current services based on the impact of inflation on the FY 
17 appropriated level. Additionally, for FY 19 The Independent Budget 
recommends $6.8 billion for Medical Support and Compliance. This amount 
also reflects an increase in current services from the FY 18 advance 
appropriations level.

                                               Medical Facilities
 
 
 
                             FY 18 IB Recommendations                                     $5.796 billion
                 FY 18 Revised Administration Request
                 FY 18 Enacted Advance Appropriations                                     $5.435 billion
      FY 19 IB Advance Appropriations Recommendations                                     $6.563 billion
  FY 19 Administration Advance Appropriations Request
 

    For Medical Facilities, The Independent Budget recommends $5.8 
billion for FY 18, nearly $400 million more than the enacted advance 
appropriation. Our Medical Facilities recommendation includes $1.35 
billion for Non-Recurring Maintenance (NRM). The Administration's 
request over the past two budget cycles represented a wholly inadequate 
level for NRM funding, particularly in light of the actual expenditures 
that were outlined in the budget justification. While VA has actually 
spent on average approximately $1.3 billion yearly for NRM, the 
Administration has requested on average only $460 million for NRM. This 
request level is clearly insufficient. This decision means that VA is 
forced to divert funds programmed for other purposes to meet this need. 
While the VA's projected NRM expenditure for FY 18 is higher than in 
years past, it still remains insufficient.
    The Independent Budget recommends approximately $6.6 billion for 
Medical Facilities for FY 19. Our FY 19 advance appropriation 
recommendation also includes $1.35 billion for NRM. Last year the 
Administration's recommendation for NRM reflected a projection that 
would place the long-term viability of the health care system in 
serious jeopardy. This deficit must be addressed.

                                         Medical and Prosthetic Research
 
 
 
                             FY 18 IB Recommendations                                       $713 million
                              Million Veteran Program                                        $65 million
             Total IB Medical and Prosthetic Research                                       $778 million
                         FY 18 Administration Request
                    FY 17 Enacted Final Appropriation                                       $675 million
 

    The VA Medical and Prosthetic Research program is widely 
acknowledged as a success on many levels, and contributes directly to 
improved care for veterans and an elevated standard of care for all 
Americans. The research program is an important tool in VA's 
recruitment and retention of health care professionals and clinician-
scientists to serve our nation's veterans. By fostering a spirit of 
research and innovation within the
    VA medical care system, the VA research program ensures that our 
veterans are provided state-of-the-art medical care.

Investing Taxpayers' Dollars Wisely

    Despite documented success of VA investigators across many fields, 
the amount of appropriated funding for VA research since FY 2010 has 
lagged far behind annual biomedical research inflation rates, resulting 
in a net loss over these years of nearly 10 percent of the program's 
overall purchasing power. As estimated by the Department of Commerce, 
Bureau of Economic Analysis, and the National Institutes of Health, for 
VA research to maintain current service levels, the Medical and 
Prosthetic Research appropriation should be increased in FY 18 by 2.7 
percent over the FY 17 baseline simply to keep pace with inflation. 
With this in mind, The Independent Budget recommends approximately $17 
million to meet current services demands for research.
    Numerous meritorious proposals for new VA research cannot be funded 
without an infusion of additional funding for this vital program. 
Research awards decline as a function of budgetary stagnation, so VA 
may resort to terminating ongoing research projects or not funding new 
ones, and thereby lose the value of these scientists' work, as well as 
their clinical presence in VA health care. When denied research 
funding, many of them simply choose to leave the VA.

Emerging Research Needs

    In addition to covering uncontrollable inflation, the IBVSOs 
believe Congress should appropriate an additional $17 million for FY 
18, for expanding research on emerging conditions prevalent among newer 
veterans, as well as continuing VA's inquiries in chronic conditions of 
aging veterans from previous wartime periods. For example, additional 
funding will help VA support areas that remain critically underfunded, 
including:

      Post-deployment mental health concerns such as PTSD, 
depression, anxiety, and suicide in the veteran population;
      The gender-specific health care needs of the VA's growing 
population of women veterans;
      New engineering and technological methods to improve the 
lives of veterans with prosthetic systems that replace lost limbs or 
activate paralyzed nerves, muscles, and limbs;
      Studies dedicated to understanding chronic multi-symptom 
illnesses among Gulf War veterans and the long-term health effects of 
potentially hazardous substances to which they may have been exposed; 
and
      Innovative health services strategies, such as telehealth 
and self-directed care, that lead to accessible, high-quality, cost-
effective care for all veterans.

Million Veteran Program (MVP)
    The VA Research program is uniquely positioned to advance genomic 
medicine through the MVP, an effort that seeks to collect genetic 
samples and general health information from 1 million veterans over the 
next five years. When completed, the MVP will constitute one of the 
largest genetic repositories in existence, offering tremendous 
potential to study the health of veterans. To date, more than 400,000 
veterans have enrolled in MVP. The VA estimates it currently costs 
around $75 to sequence each veteran's blood sample. Under the 
President's Precision Medicine Initiative, the IBVSOs recommend $65 
million to enable VA to process one quarter of the MVP samples 
collected.
                       GENERAL OPERATING EXPENSES

                                        Veterans Benefits Administration
 
 
 
                             FY 18 IB Recommendations                                     $3.135 billion
                         FY 18 Administration Request
                   FY 17 Enacted Final Appropriations                                     $2.856 billion
 

    The Veterans Benefits Administration (VBA) account is comprised of 
six primary divisions. These include Compensation; Pension; Education; 
Vocational Rehabilitation and Employment (VR&E); Housing; and 
Insurance. The increases recommended for these accounts primarily 
reflect current services estimates with the impact of inflation 
representing the grounds for the increase. However, two of the 
subaccounts-Compensation and VR&E-also reflect a substantial increase 
in requested staffing to meet the rising demand for those benefits.
    The IB recommends approximately $3.135 billion for the VBA for FY 
18. This amount reflects an increase of approximately $279 million over 
the enacted FY 17 appropriations level. Our recommendation includes 
approximately $183 million in additional funds in the Compensation 
account above current services, and approximately $32 million more in 
the VR&E account above current services to provide for new full-time 
equivalent employees (FTEE).

Compensation Service Personnel 1750 New FTEEs $183 million

    VBA continues to produce record numbers of claims while maintaining 
an emphasis on quality; however, FY 2016 signals a troubling trend. 
Increases are taking place in total disability claims inventory, 
backlogged claims, the amount of time it takes to process a claim and 
appeals workload. These increases can be attributed to multiple factors 
such as an increase in the number of claims and appeals being filed, 
the lack of adequate resources to keep pace with demand and the 
curtailing of mandatory overtime.
    Over the past few years, VBA has made significant progress in 
reducing the disability compensation backlog, which at its peak, stood 
at over 600,000 claims in March 2013. Today, the claims backlog stands 
at roughly 96,000 claims, a decrease of nearly 85 percent from its 
peak, but an increase of roughly 10,000 claims over the previous year. 
VA defines a backlogged disability claim as one pending over 125 days.
    In 2009, VBA issued decisions on 2.74 million medical issues; that 
number more than doubled to 5.76 million in FY 2016, but was less than 
FY 2015 when it issued 6.35 million decisions on medical issues. In 
March of 2013, VBA required roughly 282 days to process a claim. At the 
close of FY 2016, VBA reported that on average, it took 123 days to 
process a claim; however, in FY 2015, VBA reported that it took, on 
average, 92 days to complete a claim.
    VBA's total disability claims inventory is also continuing to rise. 
In FY 2015, their pending claims inventory stood at about 352,000 
claims; today, VBA has a total inventory closer to 400,000 claims. This 
means that one quarter of VBA's total inventory is considered 
backlogged. Furthermore, VBA has an inventory of nearly 584,000 for 
non-disability rating claims.
    It will take a blend of technology and people to enable VBA to 
provide veterans and their dependents with more timely and accurate 
decisions. Necessary personnel increases should not be tempered against 
hopes of future technological gains. IT systems such as the Veterans 
Benefits Management System (VBMS), e-Benefits, the Stakeholder 
Enterprise Portal (SEP) and now, the National Work Queue, though 
beneficial for enabling VBA keep pace with their overall workload, the 
full effect of these systems may not be realized for years.
    Recognizing that rising workload, particularly claims for 
disability compensation, could not be addressed without additional 
personnel, Congress provided VBA with more than 1,300 FTEE between FY 
2013 and FY 17, primarily in Compensation Service. In FY 2016 alone, 
Congress authorized VBA to hire an additional 770 FTEE. The new FTEE 
were to be purposed for non-rating activities. However, taking into 
consideration VBA's total workload, including appeals, these increases 
in personnel have not been sufficient to keep pace with incoming 
workload, or to reduce the backlogs in these non-rating areas.
    VBA's previous concentrated efforts to reduce the claims backlog 
caused new backlogs in other activities including appeals. As of 
February 2017, there were close to 460,000 appeals pending, roughly 
360,000 within the jurisdiction of the VBA and the remainder within the 
jurisdiction of the Board of Veterans' Appeals. This growing appeals 
backlog is a result of VBA's former shift in focus and resources to 
process disability claims, as evidenced by the fact that Decision 
Review Officers (DRO) and Quality Review Specialists (QRS) were 
performing development and rating duties during both regular and 
overtime working hours at many VA regional offices (VARO).
    In order for VBA to produce timely and quality decisions, it will 
require sufficient resources and must modernize its appeals process. 
Appeals modernization and reform legislation that was introduced in 
114th and 115th Congress will help to significantly streamline and 
simplify appeals processing.
    For FY 18, the IBVSOs recommend an additional 1,750 FTEE. VBA will 
require this infusion of resources to manage their overall rising 
workload. Furthermore, as VBA no longer utilizes mandatory overtime for 
claims processing, true personnel needs must be addressed.
    1,000 FTEE would be dedicated to processing appeals at VBA in an 
effort to eliminate the backlog of 360,000 appeals within the next 
three years. Depending on the progress made over the next year, further 
personnel increases may still be necessary to address this appeals 
backlog.
    350 FTEE would be dedicated to address the growing backlog of non-
rating related work such as dependency claims. 300 FTEE would be 
dedicated for claims processing to address the incremental rise in the 
claims inventory and backlog.
    100 FTEE would be dedicated to the Fiduciary program to meet the 
growing needs of veterans participating in VA's Caregiver Support 
programs. This recommendation is also based on a July 2015 VA Inspector 
General report on the Fiduciary program that found, ``.Field Examiner 
staffing did not keep pace with the growth in the beneficiary 
population, [and] VBA did not staff the hubs according to their 
staffing plan..''
    Finally, as technology and work processes continue to evolve and 
change the landscape of claims and appeals processing, the IBVSOs 
believe that more accurate staffing and production models will be 
required to determine future VBA resource requirements.

VR&E Service Personnel 266 New FTEEs $32 million

    The Vocational Rehabilitation and Employment Service (VR&E), also 
known as the VetSuccess program, provides critical counseling and other 
adjunct services necessary to enable service disabled veterans to 
overcome barriers as they prepare for, find, and maintain gainful 
employment. VetSuccess offers services on five tracks: re-employment, 
rapid access to employment, self-employment, employment through long-
term services, and independent living.
    An extension for the delivery of VR&E assistance at a key 
transition point for veterans is the VetSuccess on Campus (VSOC) 
program deployed at 94 college campuses. Additional VR&E services are 
provided at 71 select military installations for active duty service 
members undergoing medical separations through the Department of 
Defense and VA's joint Integrated Disability Evaluation System (IDES). 
These additional functions of VR&E personnel are undoubtedly beneficial 
to disabled veterans; however, staffing levels throughout VR&E services 
must be commensurate with current and future demands and their global 
responsibilities.
    Over the past few years, program participation has increased by 15 
percent overall, increasing by 7.3 percent in FY 2015, 3.8 percent in 
FY 2016, and in FY 17, a 4 percent increase is estimated. In FY 17, the 
Administration failed to request adequate staffing levels to keep pace 
with anticipated demand. In fact, for both FY 2016 and FY 17, the 
Administration flat-lined the VR&E request for direct personnel at 
1,442.
    A steady growth in program participation each year, without 
commensurate requests for personnel to keep pace with increased program 
participation will leave service-connected veterans waiting longer for 
critical services. As VBA continues to expand VR&E eligibility to more 
veterans, due to increased claims processing and the award of new 
service-connected disabilities due to new presumptive disabilities, it 
is not unreasonable to foresee a rise in program participation within 
VR&E. Based on historical participation rates, the IBVSOs project that 
total program participation for FY 18 will grow by at least 5 percent 
for total caseload of close to 155,000.
    Last year, Congress recognized the need for a more balanced client-
to-counselor ratio with the enactment of Public Law 114-223, Section. 
254. This provision authorizes the Secretary to use appropriated funds 
to ensure the ratio of veterans to full-time employment equivalents 
does not exceed 125 veterans to one full-time employment equivalent.
    In July 2015, VR&E reported that its average Vocational 
Rehabilitation Counselor (VRC)-to-client ratio had risen to 1:139. 
Unless significant new funding is provided, VA would be required to 
redirect appropriated resources from other vital programs to achieve 
this ratio within VR&E. Therefore, VR&E's full funding requirements 
must be included in its budget request and not syphoned away from other 
programs to reach the 125-to-1 ratio. Even this benchmark may even be 
too high when taking into consideration the overall responsibilities of 
VRCs, such as VSOC, IDES and other outreach initiatives.
    In order to achieve and sustain a 1:125 counselor-to-client ratio 
in FY 18, we estimate that VR&E would need 266 new FTEE, for a total 
workforce of 1550 FTEE, to manage an active caseload and provide 
support services to 155,000 VR&E participants. At a minimum, three-
quarters, of the new hires should be VRCs dedicated to providing direct 
services to veterans. This increase in personnel accounts for the 
expected growth in VR&E claim filings, program participation, 
collateral duties performed outside of general case management, the 
flat-lined personnel requests for the previous two fiscal years and our 
previous 158 FTEE request for last fiscal year.
    While increased staffing levels are required to provide efficient 
and timely services to veterans utilizing VR&E services, it is also 
essential that these increases be properly distributed throughout all 
of VR&E to ensure that VRC caseloads are equitably balanced among 
VAROs, which typically experience variable caseloads. As an example, a 
January 2014 GAO Report found the Cleveland VARO's VRC ratio to be 
1:206 and in the Fargo VARO, the ratio was 1:64.

                                             General Administration
 
 
 
                             FY 18 IB Recommendations                                       $406 million
                         FY 18 Administration Request
                   FY 17 Enacted Final Appropriations                                       $345 million
 

    The General Administration account is comprised of ten primary 
divisions. These include the Office of the Secretary; the Office of the 
General Counsel; the Office of Management; the Office of Human 
Resources and Administration; the Office of Enterprise Integration; the 
Office of Operations, Security and Preparedness; the Office of Public 
Affairs; the Office of Congressional and Legislative Affairs; and the 
Office of Acquisition, Logistics, and Construction; and the Veterans 
Experience Office (VEO). This marks the first year that the VEO has 
been included in the divisions of General Administration. Additionally, 
a number of the divisions reflect changes to the structure and 
responsibilities of those divisions. For FY 18, the IB recommends 
approximately $406 million, an increase of more than $60 million over 
the FY 17 appropriated level. This increase primarily reflects an 
increase in current services based on the impact of uncontrollable 
inflation across all of the General Administration accounts. It also 
reflects the establishment of the VEO within the General Administration 
accounts.

                                           Board of Veterans' Appeals
 
 
 
                             FY 18 IB Recommendations                                       $158 million
                         FY 18 Administration Request
                   FY 17 Enacted Final Appropriations                                       $156 million
 

    Faced with a growing number of claims and resultant appeals that 
could no longer be ignored, Congress authorized the Board of Veterans' 
Appeals (Board) to increase their FTEE by 242 over FY 2016 authorized 
levels, bringing their total authorized staffing to 922 FTEE for FY 17.
    For FY 18, the IBVSOs recommend no additional increases in FTEE; 
however, the Board must be permitted to hire their full complement of 
922 FTEE. Today, the Board's total FTEE strength is close to 855 FTEE. 
Over the past few years, the Board has averaged approximately 85 appeal 
dispositions per FTEE, producing 55,532 decisions in FY 2014, 55,713 
decisions in FY 2015 and are expected to issue somewhere close to 
56,000 decisions in FY 2016. If the Board were to reach their full 
complement of 922 FTEE, at 85 appeal dispositions per FTEE, they could 
be expected to issue close to 78,000 decisions.
    As the number of claims processed annually continues to rise as a 
result of the increased capacity of VBA, the number of appeals is also 
expected to continue rising. Even with increased accuracy in rating 
board decisions, on average 10 to 12 percent of claims decisions are 
appealed. Thus, assuming VBA processes 1.5 million claims in 2018-a 
reasonable estimate considering VBA processed over 1.4 million claims 
in both FY 2014 and FY 2015-roughly 150,000 appeals would enter the 
system, with roughly half of them continuing on to the Board for 
appellate review. In order for the Board to keep pace with only this 
new incoming workload and not those appeals already in the system, 
their FTEE levels would have to be adjusted accordingly, unless 
comprehensive reforms are adopted.
    In the 114th Congress, significant appeals-reform legislation was 
introduced. The legislative language reflected significant efforts of a 
working group formed in March 2016 that consisted of the IBVSOs, other 
VSO stakeholders, and leaders within VBA and the Board. This 
legislation would have fundamentally reformed and streamlined the 
overall appeals process.
    Similar legislation has been introduced in the 115th Congress. 
Without these reforms, traditional staffing increases will be required 
to meet current and future workload requirements. As it stands today, 
to keep pace with their overall workload, the Board will need to 
continue adding new attorneys, veteran law judges, as well as 
sufficient support staff.
    Additional staffing is just one component that is needed to 
effectively manage the appeals workload. Seamless and functional IT 
systems are also critical to ensure the Board is able to issue accurate 
and timely decisions. There must be integration with the Veterans 
Benefit Management System, but also the flexibility for their Board to 
perform work functions centric and independent to the appeal process.
    Over the past few years, the Board has received resources and 
developed partnerships to modernize its IT systems, which is essential 
to improving quality and timeliness of appeal decisions. Part of this 
modernization involves replacement of the outdated legacy appeals 
tracking system, (VACOLS). In order to accomplish this modernization, 
the Board partnered with The United States Digital Service (USDS). The 
USDS is a White House tech initiative that works across the Federal 
government to enhance and improve IT services.
    The USDS team has been working on multiple integration tools, one 
of which was Caseflow Certification that became operable in April 2016. 
Caseflow Certification is an IT enhancement that automatically detects 
if certain documents have been secured before moving forward in the 
appeal process. The partnership between the USDS team must be allowed 
to reach its full maturity, so the Board can reap the rewards of their 
innovations that are designed to improve the appeals process for 
waiting appellants.
    Lastly, the USDS must be allowed to continue to operate in the non-
traditional, agile way it has pioneered at VA so that it can continue 
to pursue the best-possible approach to modernization instead of being 
locked down into an inflexible multi-year development plan that that 
cannot possibly anticipate the lessons that will be learned during 
development.
         DEPARTMENTAL ADMINISTRATION AND MISCELLANEOUS PROGRAMS

                                           Information Technology (IT)
 
 
 
                             FY 18 IB Recommendations                                     $4.362 billion
                         FY 18 Administration Request
                   FY 17 Enacted Final Appropriations                                     $4.278 billion
 

    In contrast to significant department-level IT failures, the VHA 
over more than 30 years successfully developed, tested, and implemented 
a world-class comprehensive, integrated electronic health record (EHR) 
system. The current version of this EHR system, based on the VHA's 
self-developed VistA public domain software, sets the standard for EHR 
systems in the United States and was a trailblazer for years. However, 
parts of VistA require either modernization or replacement. For 
example, one of its component parts, the outdated scheduling module, 
contributed to VA's recent access to care crisis. According to VA, this 
module is being replaced on an expedited basis.
    For FY 18, the IBVSOs recommend approximately $4.4 billion for the 
administration of the VA's IT program. This recommendation includes no 
new funding above the planned current services level. Significant 
resources have already been invested in VA's IT programs in recent 
years, and we believe proper allocation of existing resources can allow 
VA to fulfill its missions while modernizing its systems. We continue 
to call for acceleration of the VBMS, and the implementation of an 
appropriate solution for the Board of Veterans Appeals IT system.
    Additionally, it is critical to ensure that sufficient funds are 
directed at the incremental costs of implementation for the new 
Veterans Choice Program (VCP). The VA identified a series of one time 
incremental costs for IT systems in order to redesign, develop, and 
deliver systems and technology solutions for the new VCP. Those 
incremental costs range from $421 million in Phase I of the project, to 
$606 million in Phase II, and finally $851 million in Phase III. 
Without having a clear plan for when each of these Phases might 
actually take place, The Independent Budget has chosen not to 
explicitly recommend these funds in our IT funding recommendation. 
However, we believe Congress must consider these costs in an effort to 
assist the VA in implementing the new VCP.

                                     National Cemetery Administration (NCA)
 
 
 
                             FY 18 IB Recommendations                                       $291 million
                         FY 18 Administration Request
                   FY 17 Enacted Final Appropriations                                       $286 million
 

    NCA, which receives funding from eight appropriations accounts, 
administers numerous activities to meet the burial needs of our 
nation's veterans.
    In a strategic effort to meet the burial and access needs of our 
veterans and eligible family members, the NCA continues to expand and 
improve the national cemetery system, by adding new and/or expanded 
national cemeteries. Not surprising, due to the opening of additional 
national cemeteries, the NCA is expecting an increase in the number of 
annual veteran interments through 2017 to roughly 130,000, up from 
125,180 in 2014; this number is expected to slowly decrease to 126,000 
by 2020. This much need expansion of the national cemetery system will 
help to facilitate the projected increase in annual veteran interments 
and will simultaneously increase the overall number of graves being 
maintained by the NCA to 3.7 million in 2018 and 3.9 million by 2020.
    Even as the NCA continues to add veteran burial space to its 
expanding system, many existing cemeteries are exhausting their 
capacity and will no longer be able to inter casketed or cremated 
remains. In fact, as of 2016, the NCA expects four national cemeteries-
Baltimore, Maryland; Nashville, Tennessee; Danville, Virginia; and 
Alexandria, Virginia-to reach their maximum capacity and will be closed 
to first interments, though they will continue to accept second 
interments.
    In order to minimize the dual negative impacts of increasing 
interments and limited veteran burial space, the NCA needs to:

      Continue developing new national cemeteries;
      Maximize burial options within existing national 
cemeteries;
      Strongly encourage the development of state veteran 
cemeteries; and
      Increase burial options for veterans in highly rural 
areas.

    Additional areas of growth within the NCA system include:

      An increase in the issuance of Presidential Memorial 
Certificates, which is expected to increase from approximately 654,000 
in 2013 to more than 870,000 in 2017;
      The expected increase in the burial of Native American, 
Alaska Native, and Pacific Islander veterans; and
      The possible increase, thanks to local historians and 
other interested stakeholders, in requests for headstones or markers 
for previously unidentified veterans.

Budgetary Resources for NCA Programs

    With the above considerations in mind, The Independent Budget 
recommends $291 million for FY 18 for the Operations & Maintenance of 
the NCA. The IBVSOs believe that this should include a minimum of $20 
million for the National Shrine Initiative. Since FY 2013, national 
shrine funding has decreased each year. The NCA must continue to invest 
sufficient resources in the National Shrine Initiative to ensure that 
this important work is completed.

                                         Office of the Inspector General
 
 
 
                             FY 18 IB Recommendations                                       $163 million
                         FY 18 Administration Request
                   FY 17 Enacted Final Appropriations                                       $160 million
 

    The Office of Inspector General (OIG) received a significant 
infusion of new resources for FY 2016 due to the high volume of work 
that it has produced. And yet, the OIG has been under significant 
scrutiny over the past two years. We believe that the work requirements 
assigned to this office have placed it under great stress and 
potentially stretched it beyond its capacity. That being said, the 
IBVSOs believe that the office does not warrant a staffing increase at 
this time. We believe that the substantial increase that the OIG 
received in FY 2016 should allow it to expand its staffing sufficiently 
to meet the ever-growing demands on its work. With this in mind, the IB 
recommends funding based on current services for FY 18 of approximately 
$163 million.
                         C0NSTRUCTION PROGRAMS

                                               Major Construction
 
 
 
                             FY 18 IB Recommendations                                      $1.50 billion
                         FY 18 Administration Request
                   FY 17 Enacted Final Appropriations                                       $528 million
 

    Currently, VA has 24 major construction projects that are partially 
funded, some of which were originally funded in FY 2004, that need to 
be put on a clear path to completion. There are an additional 3 
projects that are in the design phase. Outside of the partially funded 
major projects list are major construction projects at the top of the 
FY 17 priority list that are seismic in nature. These projects cannot 
take a strategic pause while Congress and VA decide how to manage 
capital infrastructure long-term.
    Of those 24 partially funded projects, VA will need to invest more 
than $3.5 billion to complete them all. Of the top five projects on the 
priority list, two of them are seismic deficiencies, two are the core 
mission of VA - a mental health clinic and a spinal cord injury center 
- and one that is an addition to an existing facility. The total cost 
of these projects is $1.2 billion.
    The IBVSOs recommend that Congress appropriate at least $1.5 
billion for major construction in FY 18. This amount will fund either 
the ``next phase'' or fund ``through completion'' all existing 
projects, and begin advance planning and design development on six 
major construction projects that are the highest ranked on VA's 
priority list.

Research Infrastructure

    State-of-the-art research requires state-of-the-art technology, 
equipment, and facilities. For decades, VA construction and maintenance 
appropriations have not provided the resources VA needed to maintain, 
upgrade, or replace its aging research laboratories and associated 
facilities. The impact of funding shortages was vividly demonstrated in 
a Congressionally-mandated report that found major, system wide 
deficits in VA research infrastructure. Nearly 40 percent of the 
deficiencies found were designated ``Priority 1: Immediate needs, 
including corrective action to return components to normal service or 
operation; stop accelerated deterioration; replace items that are at or 
beyond their useful life; and/or correct life safety hazards.''
    The report cited above estimated that approximately $774 million 
would be needed to correct all deficiencies found, but only a fraction 
of that funding has been appropriated since this report was made public 
in 2012. The VA Office of Research and Development is conducting a 
follow-up study of over a dozen key research sites. This update should 
be available in mid-2016, the results of which can be used to guide VA 
and Congress in further investment in VA research infrastructure. 
Nevertheless, Congress needs to begin now to correct the most urgent of 
these known infrastructure deficiencies, especially those that concern 
life-safety hazards for VA scientists and staff, and for veterans who 
volunteer as research subjects.
    The IBVSOs believe that Congress should break this chronic 
stalemate and designate funds to improve specific VA research 
facilities in FY 17 and in subsequent years. In order to begin to 
address these known deficits, the IBVSOs recommend Congress approve at 
least $50 million for up to five major construction projects in VA 
research facilities.
    The full report discussed above is available at www.aamc.org/varpt. 
The House reports associated with this issue are House Report 109-95, 
and House Report 111-559.

                                               Minor Construction
 
 
 
                             FY 18 IB Recommendations                                       $700 million
                         FY 18 Administration Request
                   FY 17 Enacted Final Appropriations                                       $372 million
 

    In FY 17, Congress appropriated $372.1million for minor 
construction projects. Currently, there are still approximately 600 
minor construction projects that need funding to close all current and 
future year gaps within 10 years. To complete all of these current and 
projected projects, VA will need to invest between $6.7 and $8.2 
billion in minor construction over the next decade.
    In August 2014, the President signed the Veterans Access, Choice, 
and Accountability Act of 2014 (VACAA), Public Law 133-146. In this 
law, Congress provided $5 billion to increase healthcare access by 
increasing medical staffing levels and investing in infrastructure. VA 
has developed a spending plan that that obligated $511 million for 64 
minor construction projects over a two-year period.
    While this infusion of funds has helped, there are still hundreds 
of minor construction projects that need funding for completion. It is 
important to remember that these funds are a supplement to, not a 
replacement of, annual appropriations for minor construction projects. 
The IBVSOs recommend that Congress fund VA's minor construction account 
at $700 million in an effort to close all identified gaps within 10 
years.
    Leasing: Historically VA has submitted capital leasing requests 
that meet the growing and changing needs of veterans. VA has again 
requested an adequate amount, $283.7 million for its FY 17 leasing 
needs. While VA has requested adequate resources, Congress must find a 
way to authorize and appropriate leasing projects in a way that 
precludes the full cost of the lease being accounted for in the first 
year. There are currently 18 major medical leases from FY 2016 and six 
from FY2017 that Congress must still authorize. Delays in authorization 
of these leases has a direct impact on VA's ability to provide time 
care to veterans in their communities. Congress must authorize these 
leases.

                                    Grants for State Extended-Care Facilities
                                        (State Home Construction Grants)
 
 
 
                             FY 18 IB Recommendations                                       $300 million
                         FY 18 Administration Request
                   FY 17 Enacted Final Appropriations                                        $90 million
                              FY 17 IB Recommendation                                       $200 million
 

    Grants for state extend-care facilities, commonly known as state 
home construction grants, are a critical element of federal support for 
the state veterans' homes. The state home program is a very successful 
federal-state partnership in which VA and states share the cost of 
constructing and operating nursing homes and domiciliaries for 
America's veterans. State homes provide over 30,000 nursing home and 
domiciliary beds for veterans, their spouses, and gold-star parents of 
deceased veterans. Overall, state homes provide more than half of VA's 
long-term-care workload, but receive less than 15 percent of VA's long-
term-care budget. VA's basic per diem payment for skilled nursing care 
in state homes is significantly less than comparable costs for 
operating VA's own long-term-care facilities. This basic per diem paid 
to state homes covers approximately 30 percent of the cost of care, 
with states responsible for the balance, utilizing both state funding 
and other sources. On average, the daily cost of care for a veteran at 
a State Home is less than 50 percent of the cost of care at a VA long-
term-care facility.
    States construction grants help build, renovate, repair, and expand 
both nursing homes and domiciliaries, with states required to provide 
35 percent of the cost for these projects in matching funding. VA 
maintains a prioritized list of construction projects proposed by state 
homes based on specific criteria, with life and safety threats in the 
highest priority group. Only those projects that already have state 
matching funds are included in VA's Priority List Group 1 projects, 
which are eligible for funding. Those that have not yet received 
assurances of state matching funding are put on the list among Priority 
Groups 2 through 8.
    In FY 17, the estimated federal share for the 99 state home 
construction grants requests that have been submitted by states was 
almost $1.1 billion. Of that amount, the states had already secured 
their share of matching funds required to put them in the Priority 
Group List 1 for 57 projects that will require $639 million in federal 
matching funds, an increase of $89 million over FY 2016. Last year, VA 
requested only $85 million and the IBVSOs had recommended $200 million; 
Congress ultimately appropriated $90 million funding for FY 2016, which 
will barely keeps up with the increase in Priority Group 1 projects. 
With almost $1 billion in state home projects still in the pipeline, 
the IBVSOs recommend $300 million for the state home construction grant 
program for FY 17 in order to begin seriously addressing the remaining 
$550 million backlog of Priority 1 projects, as well as the $433 
million of Priority 2-8 projects soon to receive matching funding from 
the States.

                                      Grants for State Veterans Cemeteries
 
 
 
                             FY 18 IB Recommendations                                        $46 million
                         FY 18 Administration Request
                   FY 17 Enacted Final Appropriations                                        $46 million
 

    The State Cemetery Grant Program allows states to expand veteran 
burial options by raising half the funds needed to build and begin 
operation of veterans' cemeteries. The NCA provides the remaining 
funding for construction and operational funds, as well as cemetery 
design assistance. As of September 2014, there were 49 projects with 
state matching funds.
    Funding eight projects in FY 18 will provide burial options for an 
additional 148,000 veterans. To fund these projects, Congress must 
appropriate $46 million.

                                 
                        Questions For The Record

                             HVAC MAJORITY
Questions #3-10, 13-21, 23-26, 28-35, 38, 40-44, 46, 49, 51-53, 63, 64, 
    66

    Question 3: Does the Department plan to require Decision Review 
Officers (DROs) to work overtime to reduce the appeals backlog? If so, 
how long does the Department anticipate requiring DROs to work 
mandatory overtime? If not, please explain why.

    VA Response: During the first three quarters of this Fiscal Year 
(FY), regional office (RO) appeals team employees worked optional 
overtime on appeals. At the end of the third quarter, the Veterans 
Benefits Administration (VBA) Appeals Management Office (AMO) had 
expended $7.6 million in optional overtime. Combined with the increased 
focus on working the oldest appeals, RO appeals production was 
approximately 14.9 percent above the FY 2017 production target and 
approximately 26.3 percent above FY 2016 production as of the end June 
2017. However, to ensure timely delivery of benefits to Veterans during 
the last quarter, appeals team Decision Review Officers (DROs) and 
Rating Veterans Service Representatives (RVSRs) are assisting in 
reducing VBA claims backlog through 20 hours of mandatory overtime each 
month. For the same period, RO appeals team Veterans Service 
Representatives (VSRs) and employees of the AMO Appeals Resource 
Center, are working 20 hours of mandatory overtime in support of 
reducing VBA's appeals inventory. As of August 19, 2017, appeals teams 
had expended $4.3 million in mandatory OT funds. By the end of August, 
appeals DROs and RVSRs had produced over 19,000 backlog ratings and the 
ready for decision inventory had been reduced from approximately 44,000 
to 11,000. Appeals team employees will remain on mandatory overtime 
during September 2017 and focus exclusively on the oldest appeals. At 
the end of August, appeals production was approximately 16 percent over 
the FY 2017 production target and approximately 23.8 percent above FY 
2016 production. The AMO will continue to evaluate the need for 
overtime, optional or mandatory, based on implementation of appeals 
reform legislation, production trends and overtime fund availability.

    Question 4: How long does the Department plan to require Rating 
Veteran Service Representatives (RVSRs) and Rating Quality Review 
Specialists (RQRSs) to work mandatory overtime?

    VA Response: In a strategic approach targeting bottlenecks in the 
claims process, mandatory overtime is implemented in 30-day increments. 
VBA continually conducts reviews to determine if the need for mandatory 
overtime continues in any part of the claims process. The Rating 
Veteran Service Representatives (RVSRs) and Rating Quality Review 
Specialists (RQRSs) work mandatory overtime when there is a need to 
focus on claims that are ready for decision. A decision is made every 
30 days on which part of the claims process needs focus and which 
claims processors may be required to work mandatory overtime.

    Question 5: How much did VBA spend on overtime, both mandatory and 
optional, in FY 2016 and FY 2017 to date, disaggregated by month.

    VA Response: VA remains committed to meeting its goal of providing 
benefits to Veterans and their families in a timely and accurate 
manner. To continue progress on providing timely benefits, address the 
increase in the number of claims VA has received this FY to-date, and 
minimize the number of disability claims pending over 125 days, VBA 
reinstituted mandatory overtime effective March 7, 2017. VBA's claims 
processors last worked mandatory overtime from January 2015 until 
September 2015. VBA plans for the period of mandatory overtime 
beginning in March 2017 to be limited, with an extension at the 
discretion of VBA leadership. In a strategic approach targeting 
bottlenecks in the claims process, during March, VBA focused on claims 
awaiting a rating decision. Disability claims processors trained to 
rate claims-Rating Veterans Service Representatives (RVSRs) and Rating 
Quality Review Specialists (RQRS) - working 20 hours of overtime for a 
period of 30 days. RQRS continued to focus on quality reviews during 
regular hours and on rating claims during mandatory overtime. VSC 
employees not previously working mandatory overtime may potentially be 
included in the mandatory overtime requirement in the months to come, 
based on agency needs.
    VA will continue to emphasize completion of high-priority and 
special-interest claims, including claims pending over 125 days; claims 
from separating Servicemembers who are seriously injured or ill; and 
claims from Veterans who are Medal of Honor recipients, former 
prisoners of war, homeless, terminally ill, or experiencing extreme 
financial hardship.
    In FY 2016, VBA spent approximately $81 million in overtime, none 
of which was mandatory. Mandatory overtime was reinstituted effective 
March 7, 2017. As of May 2017, VBA estimates approximately $10 million 
has been spent on mandatory overtime in FY 2017 and $62 million for 
optional overtime; the enclosed spreadsheet provides an estimated 
monthly summary by business line.

    Question 6: For each month of FY16 and FY17, please provide the 
cost of mandatory overtime for claims processors.

    VA Response: The enclosed spreadsheet provides an estimated monthly 
summary by business line of the cost of mandatory overtime for claims 
processors in FY 2016 and FY 2017.

    Question 7: For each month of FY16 and FY17, please provide the 
cost of discretionary overtime for claims processors.

    VA Response: The enclosed spreadsheet provides an estimated monthly 
summary by business line of the cost of optional overtime for claims 
processors in FY 2016 and FY 2017.

    Question 8: Please explain how the Board of Veterans' Appeals will 
fund an additional 164 full-time employees without an increase in 
discretionary funding? How long does the Department anticipate it will 
take to hire and train such new employees?

    VA Response: In FY 2017, the Board of Veterans' Appeals (Board) 
received funding for an additional 242 full-time equivalent (FTE) 
employees. As the result of hiring falling short of goals, the Board 
projects to have carryover of approximately $15,609,600 from FY 2017, 
which the Board intends to utilize for personnel costs in FY 2018. By 
utilizing carryover, the Board's FY 2018 annualized FTE level is 
estimated to be 1,050, which is 164 FTEs higher than the FY 2017 
current estimate. The goal is to hire as many new employees as possible 
by the end of FY 2017. The overwhelming majority of these new employees 
will be attorneys, who will prepare draft decisions for review and 
signature by a Veterans Law Judge (VLJ). These attorneys will 
participate in a 12 week intensive training program, conducted by the 
Board's Office of Knowledge Management, referred to as ``Bootcamp.'' 
Bootcamp is followed by 12 weeks of working closely with the assigned 
VLJ(s). The Board estimates that it takes approximately six months to 
train new attorneys until they are fully productive.

    Question 9: When does the Department plan to retire the Veterans 
Appeals Control and Locator System (VACOLS)?

    VA Response: VA is developing the Caseflow suite of web 
applications to modernize and streamline appeals processing. Caseflow 
is actively replacing and deprecating specific pieces of VACOLS 
functionality as new Caseflow applications come online, and Caseflow 
will ultimately replace all appeals processing functionality currently 
performed by VACOLS. However, VACOLS cannot be fully retired until 
Caseflow replaces all core VACOLS functionalities. The development of 
Caseflow is an ongoing process that will continue at least through FY 
2018, but specific timelines for this development are not set. As is 
the practice of agency teams of the United States Digital Service, and 
common of leading private sector technology companies, the Caseflow 
team implements agile software development methods. In contrast to 
traditional waterfall software development, the team does not develop a 
comprehensive set of requirements prior to initiating development, but 
rather develops the project in two week iterations or ``sprints.'' New 
code is continually integrated into the production environment, meaning 
that improvements are made available to users as frequently as daily. 
The contents of each sprint are informed by a schedule that extends six 
months into the future and is continually revised to reflect new 
information and shifts in external factors.
    While these agile practices limit the ability to define a specific 
timeline for VACOLS deprecation, which would inevitably be subject to 
change based on variables inevitable at the intersection of government 
and software development, they offer specific advantages in the context 
that the Caseflow team operates. The team has deliberately chosen not 
to define schedules beyond six months in order to evolve requirements 
in response to: 1) availability of new research and analysis of 
improved baseline data; 2) changes in Board staffing and policy and the 
effects thereof; and 3) changes to the legal and regulatory 
environment, including the Veterans Appeals Improvement and 
Modernization Act of 2017, which the President signed into law on 
August 23, 2017.
    The team engages in a quarterly prioritization exercise in 
coordination with Board stakeholders, evaluating which of the remaining 
components of the Caseflow product should be incorporated next, or 
which of the existing components should be iterated, and how to 
allocate resources among these various potential improvements. This 
exercise establishes milestones that the team will work toward while 
planning each two week sprint. In addition to evaluating whether and to 
what extent these improvements serve the team's goal to ``empower 
employees with technology to increase timely, accurate appeals 
decisions and improve the Veteran experience,'' and to reduce the 
Board's dependency on and ultimately deprecate VACOLS, this exercise 
considers the known potential for the three external factors listed 
above to affect the requirements, utility, and longevity of the product 
as developed.

    Question 10: Please provide the date Caseflow was fully 
implemented.

    VA Response: As noted, Caseflow is being developed in an agile 
process in which new functions are added to the system as they are 
completed. The first Caseflow application, Caseflow Certification, was 
first deployed in April 2016. Other applications continue to be 
deployed as completed. To date, the applications deployed to production 
by Digital Service at VA include Caseflow Certification, eFolder 
Express, and Caseflow Dispatch. At present, the Digital Service is 
developing a tool to make the review of Veterans' claims files by Board 
attorneys and VLJs more efficient (Reader), enhancements to Caseflow 
Certification intended to improve data accuracy in the transfer of 
appeals between the VBA and the Board, and a tool to streamline the 
process by which VLJs prepare for Board hearings (Caseflow Hearing 
Prep).

    Question 13: Specifically, does the Department plan to add Appeals 
Processing and Pension Claims Processing functionality to VBMS? If so 
what is the expected timeline? If not, please explain why.

    VA Response: Functionality enabling the processing of pension 
claims in VBMS was delivered the weekend of June 9, 2017, in Release 
13.0. Additional pension letters that remain to be integrated are 
planned for the November 2017 Release 14.0.
    The eFolder in VBMS already supports appeals processing for VBA. In 
addition, the Statement of the Case (appeals decisional document) is 
being generated out of VBMS. Four major appeals-related business 
requirements artifacts have been submitted to IT. These artifacts 
define the technical solution to implement the remaining functionality 
necessary to fully support appeals processing within VBMS. The 
artifacts have either been analyzed by IT or are in the process of 
actively being analyzed. None of the four major appeals artifacts have 
been scoped for an upcoming VBMS release. The soonest they may be 
scoped is Release 15.0 in May 2018.

    Question 14: Will the Board of Veterans' Appeals new information 
technology system, Caseflow, be fully interoperable with VBMS? If not, 
please explain why

    VA Response: VBA and the Board agree that the Board's Caseflow 
system must be fully interoperable with VBMS. This includes sharing 
data between the systems. The vision is that end users would only need 
to update data in one place, with that data being seamlessly shared 
between systems. VBA is designing the new VBMS Appeals functionality to 
eliminate redundancy through the use of data sharing. Similarly, 
Digital Service is developing the Board's new system, Caseflow, to be 
fully integrated with VBMS at all appropriate touchpoints. Existing 
applications, including Caseflow Certification, Caseflow Dispatch, and 
eFolder Express are all integrated with VBMS to ensure data accuracy 
and to prevent duplication of functionality. There are multiple points 
of integration between Caseflow and VBMS, including Caseflow's ability 
to read documents from VBMS through the developed Caseflow eFolder 
Express and the in development document review software referred to as 
``Reader.'' Ensuring integration between Caseflow and VBMS wherever 
appropriate will continue to be a priority as additional Caseflow 
functionality is developed and deployed.

    Question 15: Please describe planned improvements and new 
functionally for NWQ, including the timeline for implementing such 
improvements and new functionality.

    VA Response: Future functionality for NWQ includes: 1) improvements 
to the re-work functionality planned for last quarter of FY 2017 and 
1st quarter of FY 2018, and 2) routing VBA appeals through NWQ planned 
for the last quarter of FY 2018.

    Question 16: Does the Department plan to add appeals functionality 
to NWQ? If so, what is the expected timeline? If not, please explain 
why.

    VA Response: Yes, VA plans to add appeals functionality to NWQ. The 
expected timeline is during the second half of FY 2018. While VBA 
distributes appeals pending in its jurisdiction to its regional offices 
using the NWQ, the Board does not utilize the NWQ to manage its appeals 
workload.

    Question 17: Does the Department plan to add appeals functionality 
to NWQ? If so, what is the expected timeline? If not, please explain 
why.

    VA Response: Yes, VA plans to add appeals functionality to NWQ. The 
expected timeline is during the second half of FY 2018. While VBA 
distributes appeals pending in its jurisdiction to its regional offices 
using the NWQ, the Board does not utilize the NWQ to manage its appeals 
workload.

    Question 18: Does the Department plan to add pension claims 
functionality to NWQ? If so, what is the expected timeline? If not, 
please explain why.

    VA Response: Yes, VA plans to add pension claims to NWQ. The 
expected timeline is during the second half of FY 2018.

    Question 19: Does the Department plan to add Dependency and 
Indemnity claims functionality to NWQ? If so, what is the expected 
timeline? If not, please explain why.

    VA Response: Yes, VA plans to add Dependency and Indemnity 
compensation claims to NWQ. The expected timeline is during the second 
half of FY 2018.

    Question 20: Does the Department plan to add survivor benefits 
functionality to NWQ? If so, what is the expected timeline? If not, 
please explain why.

    VA Response: Yes, VA plans to add survivor benefits claims to NWQ. 
The expected timeline is during the second half of FY 2018.

    Question 21: Does the Department plan to add fiduciary 
appointments, including scheduling initial field examinations and 
follow up field examination functionality to NWQ? If so, what is the 
expected timeline? If not, please explain why.

    VA Response: Yes, VA plans to add fiduciary appointments, including 
scheduling initial field examination and follow up field examination to 
NWQ. The expected timeline is during the 1st quarter of FY 2019.

    Question 23: The budget shows zero outlays for the Supply, Fund 
(volume I, pages 116 and 121). Please explain this.

    VA Response: For FY 2018, Supply Fund expects to obligate all 
incoming revenues therefore it shows zero net outlays. The FY 2016 
actual column reflects the actual net outlays from Treasury reports, or 
the SF 133.

    Question 24: The budget proposes $1.222 billion in FY 18 and $861 
million in FY 19 advance appropriations, from the medical services 
account, to purchase medical equipment. This includes high tech medical 
equipment (HTME) and other medical equipment. The National Acquisition 
Center's ``consolidation request for quotes'' HTME purchasing process 
is currently stalled. When does the Department anticipate resuming HTME 
purchasing through the consolidation request for quotes process?

    VA Response: The Request for Quotes was posted on June 7, 2017, 
with closing date of July 12, 2017.

    a)If such HTME purchasing does not resume, how much of the medical 
equipment budget request will be unspent?

    VA Response: The consolidated purchasing of HTME imaging equipment 
has resumed. The process is no longer on hold.

    Question 25: The budget proposes $512 million for major 
construction. Does this lower figure, as compared to FY 15 and prior 
years, represent a continuation of the Department's strategic pause in 
major construction activity to digest the Commission on Care' 
recommendations to rationalize the facilities footprint? Or does it 
represent a ``new normal'', meaning a level of major construction 
activity that should be expected to continue into the future, even 
after the Department implements the Commission on Care's facilities 
recommendations?

    VA Response: Although VA is in the process of implementing some of 
the Commission on Care (CoC) recommendations, the recommendations were 
not the basis for the FY 2018 major construction request as compared to 
previous years. For FY 2018, VA's capital programs budget emphasizes 
the non-recurring maintenance (NRM) program. As the Secretary stated, 
VA Facility Condition Assessments have identified significant critical 
infrastructure deficiencies that require remediation, including 
structural seismic, electrical distribution and mechanical systems, 
such as heating and ventilation. VA's overall FY 2018 capital programs 
request reflects VA's commitment to modernize and fix its existing 
infrastructure, by allowing additional resources to be applied to non-
recurring maintenance projects in FY 2018 to correct critical building 
and infrastructure deficiencies that are in need of repair.

    Question 26: The budget proposes $343 million for minor 
construction. This figure is lower than previous years, especially 
considering the Choice Act funds that were allocated toward minor 
construction in previous years. Is this lower figure also attributed to 
the Department's strategic pause related to the Commission on Care 
recommendations? If not, to what is this lower figure attributed?

    VA Response: For FY 2018, VA's capital programs budget emphasizes 
the non-recurring maintenance (NRM) program. Although VA is in the 
process of implementing some of the Commission on Care (CoC) 
recommendations, the recommendations were not the basis for the lower 
FY 2018 minor construction request compared to previous years. As the 
Department continues to move towards non-capital solutions to expand 
access, the decrease in minor construction allows additional resources 
to be applied to NRM projects, to correct critical building and 
infrastructure deficiencies in its existing infrastructure. Further, VA 
currently has a significant number of fully funded minor projects that 
need to be executed using available unobligated funds. This negates the 
need for a large infusion of budget authority for FY 2018 minor 
construction projects.

    Question 28: The budget proposes $862 million in activation funding 
for FY 18 and $745 million for FY 19 advance appropriations, divided 
between the medical services, medical support & compliance, and medical 
facilities accounts. Which construction projects will be activated 
using these funds?

    VA Response: The attached document provides the list of projects 
included in the activation funding for FY 2018 and for FY 2019 advance 
appropriations.

    Question 29: Please provide categories or types of work or 
functions that comprise the operating equipment maintenance and repair 
line item within the medical facilities account. To the extent 
possible, please indicate how much funding is spent on each category or 
type of work within operating equipment maintenance and repair.

    VA Response: Operating Equipment Maintenance and Repair includes 
services and other costs associated with maintenance and repair of all 
non-expendable operating equipment and furniture and fixtures, when 
performed by maintenance personnel or procured on a contractual basis. 
Maintenance and repair cost for rental equipment is also included in 
this cost center.

    Question 30: Please provide categories or types of work or 
functions that comprise the recurring maintenance and repair line items 
within the medical facilities account. To the extent possible, please 
indicate how much funding is spent on each category or type of work 
within recurring maintenance and repair.

    VA Response: Recurring Maintenance and Repair line items include 
maintenance service contracts and routine repair of facilities and 
upkeep of land. Excluded are alterations, additions, modifications or 
improvements of facilities and land.
    The enclosed chart depicts the total obligations for Operating 
Equipment Maintenance and Repair, and Recurring Maintenance and Repair 
for FYs 2016 through 2019.

    Question 31: Medical Care Collections Fund (MCCF) receipts have 
been declining modestly for the last few years, and this budget 
projects that to continue. The budget attributes the decline to 
``broader healthcare payer changes that have resulted in third-party 
payers proposing reductions to their reimbursement levels.'' Please 
further explain the decline, especially in light of the fact that 
medical care spending is increasing, and community care spending is in 
particular increasing.

    VA Response: Total MCCF collections have increased year over year 
from $2.77 billion in FY 2011 to $3.50 billion in FY 2016 despite the 
four percent decrease in the number of Veterans that VA can collect 
from during the same period. MCCF Collections for FY 2017 are projected 
at one percent to five percent above budgeted expectations. While 
health care expenditures are increasing, VA does not directly bill 
costs to Third Party payers. By law, VA is required to bill reasonable 
charges. Payers' reimbursements to VA vary based on the payer. VA has 
93 payer agreements and monitors the performance of all payers to 
include those that VA does not have an agreement with. Recently, 
changes in the healthcare landscape have caused payers to examine their 
agreements and adjust rates and reimbursement methodologies to minimize 
expenditures. Historically, many payers paid the VA 100 percent of 
charges or above market rates. During the last six months of 2016, five 
large payers have reduced their reimbursement rates or requested a 
decrease. The potential loss of the rate reduction from these five 
payers is estimated to be approximately $136 million. Additionally, VA 
has been tracking six payers identified as high risk based upon their 
high reimbursement rates. These payers may request reductions in 
reimbursement rates with 30 to 120 days notice. The estimated impact of 
these changes is approximately $60 million.
    In addition to the impact of the Third Party changes, the impact of 
the Tiered Medication Copayment System has been incorporated into the 
budget. The new copayment levels reduce the average copayment per 
script and therefore result in a lower expected First Party Pharmacy 
collection amount.

    Question 32: Proposals have been circulating within VHA to 
modernize the Medical Care Collections Funds' IT systems to increase 
the efficiency of collections. GAO did a study in 2008 and estimated 
that as much as $1.4 billion of available revenue is not collected, 
though not all of this is collectable. Please describe the ``MCCF EDI 
Transaction Application Suite Phase 1'' project that has been budgeted 
at $15 million, in greater detail. Are any other efforts underway to 
modernize the MCCF IT systems?

    VA Response: The MCCF EDI Transaction Application Suite Phase I 
project (``MCCF EDI TAS'') will provide enhancements to systems used in 
the billing of Veterans' health insurance carriers for care that is not 
related to their service-connected conditions. The Health Insurance 
Portability and Accountability Act (HIPAA) requires that care providers 
and payers exchange data using the American National Standards 
Institute (ANSI) X12 Electronic Data Interchange (EDI) transaction 
sets, which VA has implemented. The MCCF EDI TAS project will implement 
changes to the transaction set standards, as well as several 
enhancements that will increase system efficiency along the four 
primary third-party billing processes: 1) Veteran insurance data 
capture; 2) medical claims billing; 3) electronic pharmacy billing; and 
4) receivables management (collections processing). The project will 
also begin to migrate these capabilities from the legacy systems to a 
new computing platform that will be known as the MCCF EDI Transaction 
Application Suite.
    Regarding MCCF IT systems, the Veterans Health Administration (VHA) 
Office of Community Care Revenue Operations is exploring several 
opportunities to modernize systems and improve collection 
functionality. These initiatives span the full breadth of VHA's revenue 
cycle, and are being championed by ongoing transformation efforts. 
Initiatives include: improving front end systems to enhance patient 
registration functions (insurance capture, verification, self-service 
options, and authorization tracking), enhancing provider clinical 
documentation, enabling remote records access to facilitate offsite and 
consolidated coding, better integrating pharmacy and billing 
functionality within VISTA to capture and bill for national drug codes, 
and implementation of smarter denials management functions. As 
additional revenue opportunities are identified, requirements continue 
to be developed for IT systems.

    Question 33: The Balanced Budget Act of 1997 (P.L. 105-33) allows 
VA to use MCCF revenue to pay for the ``expenses of the Department for 
identification, billing, auditing and collection.'' of the MCCF. In 
other words, the law allows VA to reinvest a portion of MCCF 
collections directly into MCCF operations. VA does so to cover MCCF 
salaries and administrative expenses. Has VA considered doing so for 
MCCF IT systems modernization, especially in light of the proposed OI&T 
funding cut?

    VA Response: MCCF collections reimburse VA Medical Centers for work 
that they have already performed providing health care to Veterans. 
Estimated MCCF collections are an offset to total estimated obligations 
in the annual President's Budget submission. Any alternative use of 
these funds would decrement the funding available to VA Medical Centers 
to provide health care to Veterans.

    Question 34: How is it determined to allocate MCCF dollars to the 
Joint DoD-VA Medical Facility Demonstration Fund? How is it determined 
how many MCCF dollars are allocated for this purpose? What functions or 
tasks are the MCCF dollars used for?

    VA Response: The allocation of MCCF collections goals for the James 
A. Lovell Federal Health Care Center (FHCC) follows the same process as 
for other VAMCs. The collections target is a function of patient 
workload, billable encounters, average billed amount and collections 
rate. The MCCF collections are used to support general operations at 
the FHCC.

    Question 35: The Office of Information and Technology circulated a 
memo in April warning of expected funding cuts in development and 
sustainment in FY 18 and into the future. The memo warned the cuts 
challenge the IT Operations and Services branch's ``ability to maintain 
and operate software delivered in FY 18 and beyond.'' The memo 
restricted any further development to four categories of mission 
critical systems as well as any ongoing development project that will 
move into testing or deployment by the end of FY17, and prohibited any 
future development project for a purpose other than replacing a legacy 
system. Notwithstanding your communicated intent to request a 
supplemental appropriation for electronic health records modernization, 
please explain whether the proposed IT cuts degrade OI&T's ability to 
perform its core mission of maintaining and operating software, as the 
memo states. If so, how will the negative impact of the proposed cuts 
to be mitigated?

    VA Response: The changes in the budget request will not degrade 
OI&T's ability to perform its functions and serve Department missions. 
The April memo was a notification to OI&T organizations to be aware of 
the new direction for development projects that will concentrate 
efforts on replacing outdated applications to improve mission 
functionality and decrease organizational risk. In response to the 
President's call to improve operating efficiencies in all agencies, 
this has the further goal of challenging OI&T organizations to find 
operating efficiencies in the context of fewer new stand-alone 
applications coming online and in supporting modern, replacement 
applications including those identified in the memo.

    Question 38: Please itemize the expenses and functions that the 
proposed $7.5 million transfer of OI&T funds to the Lovell Federal 
Health Care Center account will cover.

    VA Response: OI&T contributes this funding to the James A. Lovell 
Federal Health Care Center for staffing of IT desktop support 
(salaries, travel, and training); telecommunications; software 
maintenance and licenses; hardware purchase and maintenance; IT support 
contracts for specialized technical IT services); and IT supplies.

    Question 40: The ``Customer Relationship Management (CRM) - Fix the 
Phones (FtP)'' component of the other IT systems development line item 
of the development subaccount has been zeroed out. Was the initiative 
to upgrade VA telephones and unify telecommunications systems completed 
in FY 17, or is the initiative ongoing and being funded from a 
different account in FY18? If VA proposes to fund it through a 
different account, please identify the account.

    VA Response: Customer Relationship Management (CRM) Fix the Phones, 
while appearing as zeroed out, will be funded in FY 2018 as part of CRM 
Platform Enhancements. As an integral component of VA's Enterprise 
Contact Center Modernization, the CRM Program is key to empowering and 
serving Veterans and other clients with accurate, secure on-demand 
access to information about VA's benefits and service. As a result of 
deploying CRM software to user communities and contact centers, the 
following legacy systems are planned to be replaced and retired: Health 
Resource Center's Siebel system, Veterans Crisis Line's Medora system, 
and the Corporate Waco-Indianapolis-Network-Roanoke (CWINRS) System.
    Implementation of the core CRM common application platform has and 
will continue to support VA's Contact Center Modernization effort by 
providing a highly capable call center and case management solution 
that improves work management, time management and data accuracy in 
order to improve customer service to Veterans and their families. The 
project will create a CRM common application platform to streamline 
business processes, improve call quality, increase calls per agent, 
reduce call length, reduce call wait times, improve first call 
resolution, and enhance value to the Veteran.

    Question 41: Please explain what the VHA call center modernization 
program entails, for which the budget requests $10 million from the 
medical support and compliance account. Specifically, which call 
centers are being modernized?

    VA Response: On June 1, 2017, the Veterans Experience Office (VEO) 
soft-launched the White House Veterans Complaint Hotline with the goal 
of it being fully operational by October 15, 2017. The phone number is 
(855) 948-2311 and the hotline is designed to receive, process, and 
respond to the complaints of individual Veterans in a responsive, 
timely and accountable manner.
    The President's Budget included $10 million for the initial 
estimates of the initiative. VEO now estimates the amount required in 
FY 2018 may less than budgeted. Because VEO's budget is reimbursed from 
their customers (VHA, VBA, NCA et al) they will need to determine if 
these funds should be returned or re-purposed for other Veterans 
projects under new service agreements. This initiative will provide 
Veterans, their families, caregivers and survivors access to live, 
knowledgeable agents to address their questions, concerns, and to make 
immediate warm transfers to highly skilled professionals for those 
Veterans in crisis.
    The contact center modernization effort is now being reviewed at 
the enterprise level as part of VA's modernization effort in accordance 
with the Executive Order and OMB directive.

    Question 42: The budget requests zero dollars for Medical 
Appointment Scheduling System (MASS) ``National Deployment'' 
development, and $3 million for MASS sustainment. This indicates a very 
low level of MASS contract activity will occur during FY 18, consisting 
of no new development and a minimal level of sustainment for the pilot 
that is expected to commence in FY 17. Does VA agree with that 
interpretation of what the budget request indicates? Does VA expect to 
fund MASS with any Choice Act funds in FY 18'?

    VA Response: VA concurs with this interpretation that there is no 
new development anticipated for MASS in FY 2018 and minimal sustainment 
for the pilot. The VA will continue to fund scheduling initiatives 
using Choice Act Section 801 funding until exhausted, which impacts the 
current FY 2018 budget.
    The MASS task order, which implements the MASS pilot in Columbus, 
Ohio was awarded on June 15, 2017. It is planned to take about one year 
to implement the software and an additional three months to evaluate 
the results before making a national deployment decision. This national 
deployment decision will necessarily be made with consideration of the 
just announced negotiation with Cerner. In the interim, VA is deploying 
VistA Scheduling Enhancement (VSE), a software scheduling solution that 
improves the current system, between June and October 2017.

    Question 43: The line item ``VistA Evolution'' in the development 
subaccount has been renamed ``Electronic Health Record (EHR).'' Has 
there been any change in the scope of programs, projects, of functions 
contained in this subaccount?

    VA Response: The VistA Evolution Program manages the collection of 
projects known as VistA 4. The VA is working to deliver and close out 
more than 60 projects and initiatives that make up the VistA 4 Product 
Roadmap by the end of FY 2018. For that reason, a large percentage of 
the VistA 4 development work is expected to be completed, or funded 
using FY 2017 development resources, and additional development 
resources were not requested for VistA Evolution.
    Based on the Secretary's June 5, 2017, announcement regarding VA's 
path forward for VA's EHR modernization, the above proposed investments 
will be reviewed to ensure they are in full alignment with the 
Secretary's decision.

    Question 44: Please explain the rationale and impact of the zeroing 
out of the VHA research IT support development line item. Is this 
function now being funded in a different area of the budget?

    VA Response: Development funding is concentrated on the new at-risk 
system replacement priorities [Financial Management Business 
Transformation (FMBT), Appeals, Benefits Delivery Network (BDN), 
Memorials, and Electronic Health Record (EHR)]. IT operations and 
maintenance support for existing VHA research activities will continue. 
Development program emphasis has been placed on replacing major at-risk 
applications and completion of application project work that is nearing 
completion in FY 2017.

    Question 46: The budget requests $23 million in the operations and 
maintenance subaccount for Financial Management System (FMS) 
modernization, in addition to $60 million in the development 
subaccount. Financial Management Business Transformation is still in 
its early requirements collection and planning stage, and VA has 
estimated this to continue for 18 months. Please explain what aspects 
of FMS modernization have been completed and will be in sustainment in 
FY 18.

    VA Response: OI&T contributed funds to the FMBT project in FY 2017 
to execute the necessary technical programmatic activities to 
effectively plan, develop and transition components of the VA financial 
system to the Federal Shared Service Provide platform. Key activities 
in FY 2017 include preparations for legacy interface transition, 
establishing test bed cloud connectivity and messaging integration 
middleware components. FY 2018 sustainment funds will continue OI&T 
infrastructure activities and support legacy data archival.

    Question 49: Please provide an update on the how this budget will 
implement the education provisions contained in P.L. 114-315 - ``The 
Jeff Miller and Richard Blumenthal Veterans Health Care and Benefits 
Improvement Act of 2016.''

    VA Response: VBA and OI&T are in the process of re-engineering 
education systems with a critical first step being the retirement of 
the Benefits Delivery Network (BDN), a 51-year-old COBOL-based 
mainframe system. This budget supports the elimination of the legacy 
system and consolidation of all education processing and payments into 
the Long Term Solution (LTS) and VETSNET/FAS to greatly enhance the 
education systems environment going forward.

    Question 51: What are the results of the Specially Adapted Housing 
Assistance Technology Grant Program?

    VA Response: The Specially Adapted Housing Assistive Technology 
(SAHAT) program awarded four grants in FY 2016 totaling nearly 
$800,000. The grants were awarded to public and private organizations 
for the development of new technologies relating to specially adapted 
housing for Veterans with severe disabilities. Some technologies under 
development include home automation tailored to be controlled through 
voice control, eye gaze, and tactile sensors and smart devices that can 
be configured with existing off-the-shelf home automation systems.
    The SAHAT program awarded three grants in FY 2017 totaling nearly 
$600,000 to three additional private and public organizations. The 
grants awarded in FY 2017 focus on the creation of an automated table 
to assist Veterans who spend the majority of time in bed and the 
development of an automated home recognition system using sip/puff 
sensors for use by Veterans with quadriplegia. The SAHAT grant program 
has provided an invaluable opportunity to external organizations to 
create and develop technologies that can ultimately lead to significant 
quality of life improvements for Veterans with severe disabilities.

    Question 52: Despite efforts by VBA, it appears the President's 
budget does not expect much growth for the Native American Direct Loan 
Program. What are some ways to increase use of this program?

    VA Response: VA's Native American Veteran Direct Loan program 
(NADL) was created in 1992 to provide eligible Native American Veterans 
and their spouses the opportunity to finance the construction, 
purchase, or improvement of a home on Federal trust land.
    Although significant growth is not anticipated for NADL, program 
participation has been increasing. Continued growth of this important 
program depends, in large part, on outreach to Federally-recognized 
tribes to increase awareness of this program among Native American 
stakeholders. VA's Loan Guaranty Service partners with the VA Office of 
Tribal Government Relations to provide information about the NADL 
program and actively seeks input from tribal leaders on how to improve 
delivery of this benefit. Each year, VA attends various events, and 
provides tailored training and information to tribal groups. In 
addition, VA is currently updating outreach materials for distribution 
and publication to assure continued and effective promotion of the NADL 
program.
    In order to participate in the NADL program, tribal entities must 
enter into memorandums of understanding (MOUs) with VA. There are 97 
MOUs in place, and over 1,000 closed loans have been made to Veterans 
since program inception. During FY 2016, VA closed 13 loans under this 
program.
    Given the difficulty that Native Americans can have in securing 
home loans on Federal trust lands through the conventional market, and 
the legal complexities of making loans on Federal trust lands, it is 
imperative funding remain at existing levels to ensure Native American 
Veterans are able to pursue home ownership through this earned benefit.

    Question 53: The President's FY 18 request would support 363,134 
Full-Time Equivalent (FTE) employees, an increase of 7,772 FTE over FY 
17. How many vacancies does the VA currently have? What is the current 
vacancy rate for VHA? What is the current vacancy rate for VBA? What is 
the target vacancy rate for each of these organizations?

    VA Response: As of June 30, 2017, there are 34,051 vacancies at VA. 
Through modernization efforts, VA is pursuing systems that will tell 
how many vacancies exist and whether those vacancies are critical to 
meeting the needs of Veterans. In the interim, VA has instituted a 
process to collect and report vacancies on a recurring basis and has 
established a Vacancy Report Site which gives the Administrations and 
staff offices the ability to submit and certify data about each 
vacancy.
    According to June 30, 2017, VA vacancy report, VHA has nearly 
32,000 vacancies, which is approximately 9.1 percent of total VHA FTEs. 
This is in line with VHA's nine percent target vacancy rate, which 
itself is aligned with VHA's nine percent annual turnover rate.
    VBA's vacancy rate is approximately 7.6 percent: 1,700 identified 
vacancy positions divided by the total number of positions 22,329. 
VBA's target vacancy rate is approximately 1.1 percent, as the 
remaining percentage (6.5) is comprised of positions that are mission 
essential in servicing Veterans.

    Question 63: Please provide three examples of wasteful spending 
that this budget eliminates compared to last year's budget.

    VA Response: VA strives to ensure it is a good steward of taxpayer 
dollars while providing Veterans with the care and benefits they have 
earned and deserve. Some examples of areas where VA has identified 
savings for FY 2018 compared to FY 2017's budget include the following:

      VA intends to award up to four new contracts for 
community care by the end of the first quarter of FY 2018. Under the 
terms of the Community Care Network Request for Proposals (RFP), care 
would primarily be reimbursed at a rate not to exceed the Medicare 
rate; this, and other terms of the RFP, would result in significantly 
lower costs. The estimated savings for FY 2018 would be approximately 
$705 million and $1.6 billion in FY 2019. The President's Budget 
request already accounts for this savings.
      For 2018, VBA has identified at least $5 million in 
postage savings with centralization of outbound communications to 
Veterans and in particular the outbound printing and mailing of Veteran 
correspondence. Through the Centralized Benefits Communications 
Management (CBCM) project, VBA will switch from locally printing and 
mailing veteran correspondence at VA Regional Offices, an annual 19 
million outbound letters to Veterans, to batch printing those letters 
through a Government Publishing Office vendor. This will enable VBA to 
print and mail at a reduced cost by leveraging USPS pre-sort postage 
rates and reduce paper, printer and toner costs by printing large 
volumes of letters at once. Furthermore, in the subsequent phases of 
CBCM beyond 2018, VBA will further reduce communications costs by 
enabling VBA to centrally shift some of this outbound mail to 
electronic communications such as e-mails.
      NCA is continuing to modernize business processes and 
systems to optimize efficiencies, improve accountability, and better 
serve Veterans and their families. One example is the Pre-placed Burial 
Vault Program. This program deviates from traditional cemetery 
construction practices through the use of pre-placed vaults. The 
practice results in more efficient space utilization at a cemetery 
thereby decreasing land requirements and gravesite construction costs 
by approximately 50 percent. Additionally, it has reduced annual 
maintenance costs by approximately $34,000 per acre due to decreasing 
land requirements, and will help prevent soil settlement issues which 
incur future investment to resolve. When combined with the Pre-placed 
Burial Vault Program, NCA's Waterwise Conservation Program will lead to 
significant reductions in water use, which NCA estimates could decrease 
by as much as 75 percent at some cemeteries.

    Question 64: This Committee has been told many times by VA staff 
that many simple IT fixes for GI Bill processing needs additional money 
to complete these simple tasks- such as changing the name on a form 
letter sent out by VA to GI Bill recipients if they have received an 
overpayment. Does this budget provide any prioritization for improving 
IT systems for the processing of education claims?

    VA Response: Currently, VBA and OI&T are in the process of re-
engineering education systems with a first critical step being the 
retirement of the Benefits Delivery Network (BDN), a 51-year-old COBOL-
based mainframe system, and consolidating all education processing and 
payments into the Long Term Solution (LTS) and VETSNET/FAS. This 
elimination of this critical legacy system and the resulting 
consolidation of capabilities will greatly facilitate VA's ability to 
enhance the overall education systems environment going forward. Due to 
the aggressive timeline for accomplishing this work, it is vitally 
important to not introduce additional changes or enhancements during 
this period to avoid additional complexity and risk. With that as 
context, VA has identified a few low impact changes to letters that can 
be made in the short term without compromising our larger efforts. 
These changes, which will address two related GAO recommendations, will 
be included in the next LTS maintenance release that goes into testing 
in August, with full release projected in December.

    Question 66: Please inform the Committee of the performance metrics 
for the VetSuccess on Campus (VSOC) program? Is the department 
expecting growth of this program in future years?

    VA Response: In FY 2016, the VSOC Program's 79 counselors assisted 
nearly 50,000 student Veterans at 94 campuses out of a student Veteran 
population of approximately 78,000.
    VSOC Counselors provide on campus and community outreach, 
educational and vocational counseling, vocational assessments, 
adjustment counseling, referrals to VHA, benefits coaching, and many 
other services. The most common assistance provided on campus in FY 
2016 included:

      Professional Counseling: 6.60 percent
      Education Services: 19.03 percent
      VR&E inquiry/Ch33 to Ch31: 32.19 percent
      Financial Aid/Debt Management: 9.03 percent
      Outreach Follow-up/Referral: 19.06 percent
      Medical Referral-VHA/Vet Center: 3.12 percent

    VSOC Program goals tied to VSOC Counselor performance include:

      Contacting 80 percent of new student Veterans on campus 
during their first semester of attendance;
      Contacting 95 percent of Veterans and beneficiaries who 
are utilizing VA education benefits and on academic probation to 
provide support as needed; and
      Conducting 12 campus events per VSOC location per year, 
such as VA benefits informational workshops, employment workshops, and 
new student orientations.

Questions for the Record # 22, 54, 55, 56, 59, and 60

    Question 22: Please explain why the budget for the National 
Cemetery Administration should be increased by almost 30% in FY18.

    VA Response: The National Cemetery Administration (NCA) receives 
funding from seven appropriation accounts. The FY 2018 budget request 
includes total budgetary resources of $811.3 million for NCA, a 28.9 
percent increase above FY 2017. As shown in the following chart, the 
primary increases are in the Operations and Maintenance, Major 
Construction, and Minor Construction appropriations.

 
----------------------------------------------------------------------------------------------------------------
                                                                                              FY 2017 - FY 2018
(Dollars in Millions)         FY 2017            FY 2018 Request     FY 2017-2018 Increase   Percentage Increase
----------------------------------------------------------------------------------------------------------------
      Operations and                  286.2                  306.2                   20.0                   7.0%
          Maintenance
----------------------------------------------------------------------------------------------------------------
  Major Construction                  137.0                  255.9                  118.9                  86.8%
----------------------------------------------------------------------------------------------------------------
  Minor Construction                   56.9                   98.0                   41.1                  72.2%
----------------------------------------------------------------------------------------------------------------
   Veterans Cemetery                   45.0                   45.0                      0                     0%
               Grants
----------------------------------------------------------------------------------------------------------------
Facilities Operation                    0.1                    0.1                      0                     0%
                 Fund
----------------------------------------------------------------------------------------------------------------
   National Cemetery                    1.5                    1.5                      0                     0%
            Gift Fund
----------------------------------------------------------------------------------------------------------------
    Compensation and                  102.8                  104.6                    1.8                   1.7%
     Pensions (Burial
            Benefits)
----------------------------------------------------------------------------------------------------------------
               Total                 $629.5                 $811.3                 $181.8                  28.9%
----------------------------------------------------------------------------------------------------------------

    Operations and Maintenance: The FY 2018 budget request includes 
$306.2 million for operations and maintenance, including 1,881 FTE 
(nearly 89 percent of which are in the field and approximately 75 
percent are Veterans) to meet increasing workload and burial expansion.
    The FY 2018 budget request includes $4.8 million for increased 
operations and maintenance costs at existing cemeteries. NCA expects to 
maintain over 3.7 million gravesites in FY 2018, an increase of 
approximately 88,500 gravesites over FY 2017. Approximately 134,000 
interments are anticipated for FY 2018, a slight increase over FY 2017. 
The number of developed acres to maintain is also expected to increase 
slightly from 9,272 in FY 2017 to 9,400 in FY 2018, and is expected to 
continue to increase with the opening of new cemeteries and gravesite 
expansion projects currently underway.
    The FY 2018 budget ensures national cemeteries meet or exceed the 
highest standards of appearance required by their status as national 
shrines. Specifically, the budget includes $2.5 million over the 2017 
level to maintain our national cemeteries in a manner befitting our 
Veterans service to our country, with $1.5 million to address priority 
infrastructure projects deemed critical to safety, code or operational 
needs.
    The FY 2018 budget request includes $1.5 million for continued 
implementation of the Geographic Information System (GIS) at VA 
cemeteries. This enhances accountability for remains through photo and 
geographical documentation, and improves effectiveness of burial 
operations through enhanced cemetery mapping and operational equipment. 
The request also includes $800 thousand, and nine FTE, to improve call 
center operations through enhanced staffing, training, and systems 
modernization at the National Cemetery Scheduling and Eligibility 
Office.
    The construction of new VA national cemeteries, which are based on 
burial access policies approved by the Congress in 2011 and 2013, 
including in urban and rural locations, provides new or enhanced burial 
access for Veterans and their families. Over the past few years, VA has 
opened four new cemeteries and the FY 2018 budget request includes $3.5 
million and 17 FTE for the initial operations and maintenance costs of 
three additional new cemeteries.

    Major Construction: In addition to establishing new national 
cemeteries, NCA is developing additional gravesites at existing 
cemeteries. Requested funding for these programs varies, and is based 
on projected burial workload and gravesite depletion forecasts. The FY 
2018 budget includes $255.9 million for gravesite expansion at six 
national cemeteries, and advance planning and design activities. 
Gravesite expansion projects at six national cemeteries will enable NCA 
to continue providing burial services for eligible Veterans at these 
locations. Together, these six cemeteries provide over two million 
Veterans with reasonable access to burial. Full funding in FY 2018 for 
all six expansion projects is critical due to the contracting lead time 
to complete master planning, design, and construction prior to the 
anticipated depletion of a burial option and to avoid a temporary 
closure of certain burial options at one or more of these cemeteries.

    Minor Construction: The budget request includes $98 million to 
develop additional gravesites at existing cemeteries, support urban and 
rural initiatives, acquire land, and make infrastructure improvements. 
NCA relies on minor construction funding to develop additional 
gravesites for smaller scale projects to keep existing cemeteries open. 
The funding request supports 13 cemetery expansion projects that are 
projected to deplete at least one burial option within the next few 
years. This request also invests in infrastructure projects including 
irrigation systems, renovation of historic structures, building 
maintenance, and road and curb improvements.

    Question 54: The request seeks $46.7 million to fund the operations 
of the Office of Resolution Management (ORM). The budget indicates 
discrimination was found 35 times in 2016. Who made the findings?

    VA Response: Of the 35 findings of discrimination issued in FY 
2016, 15 were decisions made by the Equal Employment Opportunity 
Commission (EEOC), and 20 were decisions made by the Department of 
Veterans Affairs, Office of Employment Discrimination Complaint 
Adjudication.

    a) How many informal discrimination complaints did employees file 
in FY 16?


    VA Response: In FY 2016, 4,908 informal EEO complaints were filed.

    b) How many formal discrimination complaints did employees file in 
FY 16?

    VA Response: In FY 2016, 2,598 formal EEO complaints were filed.

    c) What was the average cost to conduct a formal complaint in FY 
16?

    VA Response: Several studies have been done estimating the cost of 
filing an EEO complaint in the Federal government. The studies estimate 
the life cycle costs anywhere from approximately $17,000 to $60,000 
depending on the point in the process where closure is reached. For 
example, some complaints are withdrawn, or settled shortly after 
filing, others may take years to be adjudicated before the EEOC, and 
some are appealed or result in a civil action. In the latter, the cost 
of the formal complaint process is higher based on the number of 
resources involved and time devoted to the process. The ORM, through 
data science, continues to examine and assess the cost to investigate a 
formal complaint and define a more exact average for the process.

    d) What were ORM's actual costs to conduct investigations in FY 16?

    VA Response: In FY 2016, ORM reported to the EEOC that VA completed 
1,865 investigations at a cost of $12,020,263.48. This figure includes 
personnel compensation of agency and contract resources involved in the 
process as well as travel, and others supplies and materials needed to 
produce an EEO investigation.

    e) Please identify the amounts paid to contractors to conduct 
formal investigations.

    VA Response: In FY 2016, ORM reported to the EEOC that contractors 
completed 922 of the 1,865 investigations at a cost of $5,268,551.87.

    Question 55: One of the areas the committee has seen as a delay in 
providing a timely response to correspondence is with the office of the 
Executive Secretariat. What is the current staffing level for this 
office and what can be done to improve their timeliness and 
performance?

    VA Response: The Office of the Executive Secretariat is fully 
staffed at 17 FTE as of February 2017. During calendar year (CY) 2015 
and CY 2016, VA averaged 33 and 36 business days, respectively, to 
respond to Congressional letters to the Secretary. For CY 2017, VA is 
currently averaging 17 business days to respond to Congressional 
letters to the Secretary, a reduction of more than half from the prior 
year.

    Question 56: Considering the increased focus on employment law 
issues, what is the justification for reducing the FTE in the Office of 
General Counsel that covers these issues from 104 in FY 16 to 92 in FY 
18?

    VA Response: VA Office of General Counsel (OGC) FTE estimates are 
informed by workload and revised accordingly. The current estimate for 
FY 2018 is 255 FTE for employment law, which includes realignment of 
FTE from medical malpractice adjudication in FY 2017.
    In addition, enactment of the Department of Veterans Affairs 
Accountability and Whistleblower Protection Act of 2017 (the Act) is 
expected to impact employment law workload. The Act makes significant 
changes in the processes for employee discipline and resulting appeals. 
OGC employment law attorneys are now increasingly called upon for 
expedited review of proposed disciplinary charges and to advise clients 
on the differences between new authorities and traditional employee 
discipline processes. As actions taken under the Act move through 
various appeal processes, OGC attorneys will be called upon to defend 
those actions.
    In FY 2017, OGC received 25,148 new employment law matters and 
projects 27,663 for FY 2018.

    Question 59: What is the justification for the 41 new FTE that are 
being requested to staff the new Central Whistleblower Office and what 
independence and authority will these employees have to protect 
whistleblowers from possible retaliation?

    VA Response: At the time of FY 2018 Budget submission, VA was 
developing the structure, mission, and vision of the Office of 
Accountability and Whistleblower Protection (OAWP), including the 
Central Whistleblower Office, based on legislation. Executive Order 
13793, Improving Accountability and Whistleblower Protection at the 
Department of Veterans Affairs, was signed on April 27, 2017, and the 
Secretary of VA established OAWP on May 12, 2017. Prior to this, while 
whistleblower protection functions existed at VA, a Central 
Whistleblower Office did not. In FY 2017, VA began reallocating 
existing General Administration account resources to begin hiring staff 
to manage cases, investigate where required, and capture data to inform 
long-term implementation plans for this office. Based on current 
projections, the Department requires 41 FTE for this purpose.

    Question 60: Please explain how this budget supports your and 
President Trump's continued efforts to protect whistleblowers and hold 
those employees accountable who retaliate against them?

    VA Response: This budget supports implementation of Central 
Whistleblower Office (CWO) functions required by statute to promote and 
protect whistleblower rights and the President's vision as set forth in 
Executive Order 13793 Improving Accountability and Whistleblower 
Protection at the Department of Veterans Affairs. Specifically, the FY 
2018 budget request establishes a toll-free line, an accessible form to 
report complaints, supports hiring of case managers, investigators, 
experienced human resource specialists, and analytical and operational 
services. These resources will enable the CWO to directly manage, 
coordinate, and oversee whistleblower complaints; develop and deploy 
robust training; and directly investigate, or oversee, investigations 
of allegations of whistleblower retaliation.