    [Senate Hearing 115-464]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 115-464

                        THE FISCAL YEAR 2019 BUDGET FOR
                               VETERANS' PROGRAMS

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

                                    HEARING

                                   BEFORE THE

                         COMMITTEE ON VETERANS' AFFAIRS
                              UNITED STATES SENATE

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 MARCH 21, 2018

                                   __________

           Printed for the use of the Committee on Veterans' Affairs

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

             Available via the World Wide Web: http://www.fdsys.gov

                                 _________

                    U.S. GOVERNMENT PUBLISHING OFFICE

    30-359 PDF                WASHINGTON : 2019

                         COMMITTEE ON VETERANS' AFFAIRS

                       Johnny Isakson, Georgia, Chairman

    Jerry Moran, Kansas                  Jon Tester, Montana, Ranking
    John Boozman, Arkansas                   Member
    Dean Heller, Nevada                  Patty Murray, Washington
    Bill Cassidy, Louisiana              Bernard Sanders, (I) Vermont
    Mike Rounds, South Dakota            Sherrod Brown, Ohio
    Thom Tillis, North Carolina          Richard Blumenthal, Connecticut
    Dan Sullivan, Alaska                 Mazie K. Hirono, Hawaii
                                         Joe Manchin III, West Virginia

                        Robert J. Henke, Staff Director
                    Tony McClain, Democratic Staff Director

                          Majority Professional Staff
                                   Adam Reece
                                 Gretchan Blum
                                Leslie Campbell
                                Patrick McGuigan
                                Maureen O'Neill
                                 David Shearman
                                Jillian Workman

                          Minority Professional Staff
                                Dahlia Melendrez
                                Cassandra Byerly
                                    Jon Coen
                                  Steve Colley
                                   Simon Coon
                               Michelle Dominguez
                                   Amy Smith

                                C O N T E N T S

                                  ----------

                                 March 21, 2018
                                    SENATORS

                                                                       Page
    Isakson, Hon. Johnny, Chairman, U.S. Senator from Georgia........     1
    Tester, Hon. Jon, Ranking Member, U.S. Senator from Montana......    12
    Moran, Hon. Jerry, U.S. Senator from Kansas......................    15
    Murray, Hon. Patty, U.S. Senator from Washington.................    17
    Cassidy, Hon. Bill, U.S. Senator from Louisiana..................    21
    Sanders, Hon. Bernard, U.S. Senator from Vermont.................    24
    Rounds, Hon. Mike, U.S. Senator from South Dakota................    27
    Brown, Hon. Sherrod, U.S. Senator from Ohio......................    29
    Boozman, Hon. John, U.S. Senator from Arkansas...................    32
    Manchin, Hon. Joe, III, U.S. Senator from West Virginia..........    43

                                   WITNESSES

    Hon. Shulkin, David J., M.D., Secretary, U.S. Department of
      Veterans Affairs; accompanied by Hon. Jon Rychalski, Assistant
      Secretary for Finance and Chief Financial Officer; Mark Yow,
      Deputy Under Secretary for Finance, Chief Financial Officer,
      Veterans Health Administration (VHA); James Manker, Acting
      Principal Deputy Under Secretary for Benefits, Veterans
      Benefits Administration (VBA); Matthew Sullivan, Chief
      Financial Officer, National Cemetery Administration (NCA); and
      Richard Chandler, Deputy Assistant Secretary for Information
      Technology Resource Management, Office of Information and
      Technology.....................................................     2
        Prepared statement...........................................     4
        Response to request arising during the hearing by Hon. Patty
          Murray.....................................................    20
        Response to posthearing questions submitted by:
          Hon. Johnny Isakson........................................    46
          Hon. Dan Sullivan..........................................    63

                       Independent Budget Representatives

    Fuentes, Carlos, National Legislative Director, Veterans of
      Foreign Wars of the United States; accompanied by Sarah Dean,
      Associate Legislative Director, Paralyzed Veterans of America;
      and LeRoy Acosta, Assistant National Service Director, Disabled
      American Veterans..............................................    33
        Prepared statement...........................................    34

                                    APPENDIX

    Thompson, Jan, President, American Defenders of Bataan and
      Corregidor Memorial Society (ADBC-MS); prepared statement......    65

               THE FISCAL YEAR 2019 BUDGET FOR VETERANS' PROGRAMS

                                  ----------

                           WEDNESDAY, MARCH 21, 2018

                                           U.S. Senate,
                                Committee on Veterans' Affairs,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 2 p.m., in room
    418, Russell Senate Office Building, Hon. Johnny Isakson,
    Chairman of the Committee, presiding.
        Present: Senators Isakson, Moran, Boozman, Heller, Cassidy,
    Rounds, Tester, Murray, Sanders, Brown, Blumenthal, and
    Manchin.

          OPENING STATEMENT OF HON. JOHNNY ISAKSON, CHAIRMAN,
                       U.S. SENATOR FROM GEORGIA

        Chairman Isakson. I call this meeting of the Senate
    Veterans' Affairs Committee to order. I thank our Ranking
    Member for being here. Hopefully, the other Members that are
    coming will be here shortly.
        Particularly, I want to thank the Secretary for being here
    today. We have had a busy month and a half at the VA. I want to
    thank everybody on the Committee and everybody at the VA for
    their cooperation as we work toward trying to get in the
    omnibus, which I do not think we did, but to solve a lot of
    problems, which I think we did solve, which will be solved
    shortly after we come back, I hope, because we need to continue
    to give support to the VA as an agency that we have in the
    past.
        Mr. Secretary, we are glad you are here, and we stand ready
    to help you in any way that we can.
        In keeping with what I said, I am going to introduce you in
    just a second. I'd like you to introduce your partners in crime
    who are with you, then make your statement. After which we will
    do questions. After that, Mr. Fuentes will testify on behalf of
    the IBVSOs, as is our custom, and then we will take questions
    for Mr. Fuentes and company. So, if that is suitable to
    everybody--is Mr. Fuentes here. I saw him somewhere. Is he here
    yet? [Pause.]
        Not yet. OK. Well, I hope I am not going too fast, but----
        Secretary Shulkin, will you introduce your cohorts and then
    make your statement please.

       STATEMENT OF HON. DAVID J. SHULKIN, M.D., SECRETARY, U.S.
        DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY HON. JON
        RYCHALSKI, ASSISTANT SECRETARY FOR MANAGEMENT AND CHIEF
        FINANCIAL OFFICER; MARK YOW, DEPUTY UNDER SECRETARY FOR
       FINANCE, CHIEF FINANCIAL OFFICER FOR THE VETERANS HEALTH
      ADMINISTRATION; JAMES MANKER, ACTING PRINCIPAL DEPUTY UNDER
        SECRETARY FOR BENEFITS; MATTHEW SULLIVAN, DEPUTY UNDER
     SECRETARY FOR FINANCE AND PLANNING FOR THE NATIONAL CEMETERY
        ADMINISTRATION; AND RICHARD CHANDLER, DEPUTY ASSISTANT
     SECRETARY FOR RESOURCE MANAGEMENT, OFFICE OF INFORMATION AND
                               TECHNOLOGY

        Secretary Shulkin. I would be glad to, Chairman Isakson and
    Senator Moran. First of all, it did not surprise me you did not
    cancel the hearing today, because I know nothing is going to
    stop you when it comes to helping veterans, and today is an
    important hearing. Veterans come first, absolutely.
        Let me just introduce my team. As you can see I need a lot
    of help to understand this budget. To my left is our Assistant
    Secretary for Finance, our Chief Financial Officer, Jon
    Rychalski. Matt Sullivan is our Chief Financial Officer for the
    National Cemetery Administration. Richard Chandler is our
    Deputy Assistant Secretary for Information Technology, Resource
    Management. Jamie Manker is our Acting Principal Deputy Under
    Secretary for Benefits, Veterans Benefits Administration, and
    Mark Yow is our Deputy Under Secretary for Finance, our CFO for
    the Veterans Health Administration. Hopefully they will be of
    help in answering some of the questions that you may have
    today.
        The budget that President Trump has presented for 2019 and
    the 2020 advanced appropriation is a strong budget and it
    reflects the President's commitment to veterans and their
    families. It provides the resources necessary for VA to
    continue to modernize and to respond to the changing needs of
    veterans, including investing in foundational services, greater
    access to care, effective management practices, and modernizing
    our infrastructure and legacy systems.
        The President's 2019 budget requests $198.6 billion for the
    Department, $88.9 billion in discretionary funding, and $109.7
    billion in mandatory funding. The discretionary budget
    represents an increase of $6.8 billion, or 8.3 percent over the
    2018 request. This reflects an additional $2.4 billion in
    discretionary funding that is now available because of the
    recent budget cap compromise that was reached.
        VA thanks the Congress for this additional funding made
    through the 2019 budget cap deal. These additional resources
    enable VA to address our outstanding infrastructure needs while
    funding veterans' health care, including the care veterans
    receive under our community care partners under the new CARE
    legislative proposal. Our capital request is $3.4 billion, or a
    20 percent increase over 2018, and ensures we can fix our
    highest priority infrastructure needs.
        By requesting all these necessary resources for our
    Community Care Program in our discretionary budget, we hope to
    prevent the need to request further funding increases and
    lapses in veterans' care because the funds may be in the wrong
    checkbook, something I am sure we will talk about later today.
        The budget includes $8.6 billion for veterans' mental
    health services, an increase of $468 million, or a 5.8 percent
    increase above the current level. This increase will enable
    about 162,000 more outpatient mental health visits, and it also
    directs $190 million for suicide prevention outreach. It
    provides emergency mental health services to members who were
    administratively discharged in other-than-honorable category.
        Further, the budget enables us to effectively implement the
    President's January 9 Executive Order that supports
    transitioning military members with mental health services
    during that first critical year as veterans.
        We have also targeted women's health, one of our fastest-
    growing populations in VA, by adding $29 million more to the
    fiscal year 2019 budget, an increase of 6 percent over 2018.
    The budget provides $1.1 billion in major construction, as well
    as $707 million in minor construction.
        I am proud that the 2019 request for infrastructure is the
    largest in the last 5 years. That will allow us to address VA's
    modernization, renovation, and aging infrastructure concerns.
        In information technology, the budget allows us to innovate
    operationally and includes an increase of $129 million above
    the budget from 2018 to enhance the veteran experience.
        Another major project made possible by this budget is the
    financial management business transformation, our financial
    management system, that, as you know, is a very old system, and
    this will allow us to have an off-the-shelf modern system.
        The budget also supports our new Electronic Health Record
    Modernization program to significantly enhance the coordination
    of care for veterans who receive care not only from VA but also
    the Department of Defense and our community partners. The
    budget includes $1.2 billion to advance the single accurate
    lifetime electronic health record. It also makes important
    investments in benefits. For example, we are going to hire an
    additional 605 personnel for the Appeals Management Office, an
    increase of 40 percent, to implement reforms, and an additional
    225 people in the fiduciary field examination role to ensure
    protection for the most vulnerable veterans.
        The budget also reflects our efforts to reform business
    practices intended to do what is right for our veterans and
    allows us to continue our transformation of VA.
        But our responsibilities do not end with simply asking for
    more resources to support veterans. Along with that request for
    resources comes the obligation to promote fiscal
    responsibility. It is my belief that by focusing on the well-
    being and enhanced functioning of veterans, conducting
    administrative reviews of disability compensation payment
    rates, and extending application of the Stop Fraud, Waste, and
    Abuse initiative to benefits, we will make benefits more
    equitable for all veterans and wisely use taxpayer resources.
        Advances in treatment and medical technologies have
    significantly reduced the impact of certain disabilities in the
    lives of many veterans, and our goal is to get veterans better,
    decrease their need for compensation, and to do that we have to
    modernize the rating system.
        I want to thank this Committee for their efforts to build
    an improved integrated network for veterans, community
    providers, and VA employees. We call these reforms the Veterans
    Coordinated Access and Rewarding Experiences, or Veterans CARE.
    CARE is meant to simplify eligibility requirements, streamline
    clinical and administrative processes, build a high-performing
    network, and implement new care coordination support for
    veterans. It is a full spectrum of care for veterans that
    capitalizes on foundational services and delivers on world-
    class services.
        As Secretary of VA, my job is to build a modern, adaptable,
    sustainable VA for a changing world. More importantly, my job
    is to ensure the VA's care, benefits, systems, and policies are
    stronger in the future. The President's budget supports our
    mission at VA. In the coming years, these priorities will help
    VA maintain our commitment to our Nation's veterans.
        Mr. Chairman, I look forward to working with you and the
    entire Committee on doing what is right for veterans, and I
    look forward to any questions today.
        [The prepared statement of Secretary Shulkin follows:]
         Prepared Statement of Hon. David J. Shulkin, M.D., Secretary,
                      U.S. Department of Veterans Affairs
        Good afternoon Chairman Isakson, Ranking Member Tester and
    distinguished Members of the Committee. Thank you for the opportunity
    to testify today in support of the President's Fiscal Year (FY) 2019
    Budget, including the FY 2020 Advance Appropriation (AA) request. I am
    accompanied today by Jon Rychalski, Assistant Secretary for Management
    and Chief Financial Officer; Mark Yow, Chief Financial Officer for the
    Veterans Health Administration (VHA); James Manker, Acting Principal
    Deputy Under Secretary for Benefits; Matthew Sullivan, Deputy Under
    Secretary for Finance and Planning for the National Cemetery
    Administration (NCA), and Richard Chandler, Deputy Assistant Secretary
    for Resource Management, Office of Information and Technology. I also
    want to thank Congress for making 2017 a legislative success for
    Veterans. With the unwavering support and leadership of our VA
    committees, Congress supported and passed groundbreaking legislation on
    Department of Veterans Affairs (VA) accountability, appeals reform, the
    Forever GI Bill, Veterans Choice improvements, personnel improvements,
    and extended Choice funding twice. We have important work left to do,
    but I am confident we are moving in the right direction. The 2019
    budget request fulfills the President's strong commitment to all of our
    Nation's Veterans by providing the resources necessary to improve the
    care and support our Veterans have earned through sacrifice and service
    to our country.
                      fiscal year (fy) 2019 budget request
        The President's FY 2019 Budget requests $198.6 billion for VA--
    $88.9 billion in discretionary funding (including medical care
    collections), of which $76.5 billion is requested as the FY 2019 AA for
    Medical Care including collections. The $76.5 billion is comprised of
    $74.1 billion previously requested (including collections), and an
    annual appropriation adjustment of $500 million for Medical Services
    for community care and $1.9 billion for the Veterans Choice Fund. In
    total, the discretionary request is an increase of $6.8 billion, or 8.3
    percent, over the President's FY 2018 Budget request. It will sustain
    the progress we have made and provide additional resources to improve
    patient access and timeliness of medical care services for the
    approximately 9 million enrolled Veterans eligible for VA health care,
    while improving benefits delivery for our Veterans and their
    beneficiaries. The President's FY 2019 budget also requests $109.7
    billion in mandatory funding, of which $107.7 billion was previously
    requested, for programs such as disability compensation and pensions.
        For the FY 2020 AA, the budget requests $79.1 billion in
    discretionary funding including collections for Medical Care and $121.3
    billion in mandatory advance appropriations for Compensation and
    Pensions, Readjustment Benefits, and Veterans Insurance and Indemnities
    benefits programs in the Veterans Benefits Administration (VBA).
        This is a strong budget request that fulfills the President's
    commitment to Veterans by ensuring the Nation's Veterans receive high-
    quality health care and timely access to benefits and services while
    concurrently improving efficiency and fiscal responsibility. I urge
    Congress to support and fully fund our FY 2019 and FY 2020 AA budget
    requests--these resources are critical to enabling the Department to
    meet the increasing needs of our Veterans and successfully execute my
    top five priorities: 1) Focus Resources; 2) Modernize VA Systems and
    Services; 3) Improve Timeliness; 4) Suicide Prevention; and 5) Provide
    Greater Choice.
        I want to emphasize that the FY 2019 Budget is not a ``business as
    usual'' VA Budget. We have critically assessed and prioritized our
    needs and aggressively pursued internal offsets, modernization reforms,
    and other efficiencies to provide Veterans the quality care they have
    earned while serving as a responsible fiscal steward. I greatly
    appreciate Congress' ongoing support for VA, as demonstrated by
    consistent support for our legislative priorities and consistently
    generous enacted appropriations. On behalf of the entire VA and the
    many Veterans we serve, I thank you for your unflagging commitment to
    our mission. I take very seriously my obligation to you, the American
    taxpayer and the Veterans who served our country so well. That
    commitment is represented in this budget request in which I have worked
    to bend the cost curve through targeted spending and significant
    reforms in an attempt to ensure that the VA remains sustainable for
    years to come.
    Priority 1: Focus Resources
        The FY 2019 Budget includes $ 76.5 billion for Medical Care,
    including collections, $4.2 billion above the FY 2018 Budget and $79.1
    billion for the FY 2020 AA. I am committed to ensuring Veterans get
    high quality, timely and convenient access to care that is affordable
    for future generations. As a result, I am implementing reforms that
    will prioritize our foundational services while redirecting to the
    private sector those services that they can do more effectively and
    efficiently. These foundational services are those that are most
    related to service-connected disabilities and unique to the skills and
    mission of VHA.
        Foundational Services include these mission-driven services, such
    as:

         Primary Care, including Women's Health;
         Urgent Care;
         Mental Health Care;
         Geriatrics and Extended Care;
         Rehabilitation (e.g., Spinal cord, brain injury/
    polytrauma, prosthesis/orthoses, blind rehab);
         Post Deployment Health Care; and
         War-Related Illness and Injury Study Centers functions.

        VA facility and Veterans Integrated Service Network (VISN) leaders
    are being asked to assess additional, community options for other
    health services that are important to Veterans, yet may be as
    effectively or more conveniently delivered by community providers.
    Local VA leaders have been advised to consider accessibility of VA
    facilities and convenience factors (like weekend hours), as they
    develop recommendations for access to community providers for Veterans
    in their service areas. Let me be clear, however, that this is not the
    onset of privatizing VA.
        While the focus on foundational services will be a significant
    change to the way VA provides health care, VA will continue to ensure
    that the full array of statutory VA health care services are made
    available to all enrolled Veterans. VA will also continue to offer
    services that are essential components of Veteran care and assistance,
    such as assistance for homeless Veterans, Veterans Resource Centers,
    the Veterans Crisis Line/Suicide Prevention, Mental Health Intensive
    Case Management, treatment for Military Sexual Trauma, and substance
    abuse programs.
        Investing in foundational services within the Department is not
    limited to health care. For over a decade, 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 FY
    2019 Budget enables the continuation of this unprecedented success with
    a request for $315.8 million for NCA in FY 2019, an increase of $9.6
    million (3 percent) over the FY 2018 request. This request will support
    the 1,941 Full-Time Equivalent (FTE) employees needed to meet NCA's
    increasing workload and expansion of services. In FY 2019, NCA will
    inter over 134,000 Veterans and eligible family members and care for
    over 3.8 million gravesites. NCA will continue to memorialize Veterans
    by providing 364,850 headstones and markers, distributing 677,500
    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 FY
    2019 request includes $117.2 million in major construction funds for
    three gravesite expansion projects. Upon completion of these expansion
    projects, and the opening of new cemeteries, nearly 95 percent of the
    total Veteran--about 20 million Veterans--will have access to a burial
    option in a national or grant-funded state Veterans' cemetery within 75
    miles of their home.
        In order to provide Veterans and taxpayers the greatest value for
    each dollar, the Budget also proposes certain changes to the way in
    which we spend those resources. For example, our FY 2019 request
    proposes to merge the Medical Community Care appropriation with the
    Medical Services appropriation, as was the practice prior to FY 2017.
    The separate appropriation for Community Care has restricted our
    Medical Center Directors as they manage their budgets and make
    decisions about whether the care can be provided in their facility or
    must be purchased from community providers. This is a dynamic
    situation, as our staff must adjust to hiring and departures,
    emergencies such as the recent hurricanes, and other unanticipated
    changes in the health care environment throughout the year. This change
    will maximize our ability to focus even more resources on the services
    Veterans most need.
        To further ensure that our entire budget request is focused serving
    Veterans, VA has implemented an initiative to detect and prevent fraud,
    waste, and abuse (STOP FWA). In support of this initiative, VA (1)
    established the VA Prevention of Fraud, Waste, and Abuse Advisory
    Committee, which will provide VA insight into best practices utilized
    in the private and public sector; (2) is partnering with Centers for
    Medicare & Medicaid Services (CMS) to replicate their investigation
    process and utilize their data to identify medical providers with
    performance issues; and (3) is working with the Department of the
    Treasury to perform a deep dive to move VA's Community Care Program
    closer to the industry best practices.
        In 2019, VA will take steps to achieve mandatory savings of
    approximately $30 billion over the next 10 years, beginning in FY 2021.
    Due to advancements in treatment and medical technologies, there has
    been a decrease in the impacts of certain disabilities on the lives of
    many Veterans.
    Priority 2: Modernizing VA Systems and Services
        Focusing resources will only take us so far--we need to modernize
    our VA systems and services, so the Department can continue to provide
    high quality, efficient care and services, and keep up with the latest
    technology and standards of care. Key modernization reform proposals
    included in the FY 2019 Budget Request are Electronic Health Record
    Modernization (EHRM), Financial Management Business Transformation,
    modernizing our legacy systems, and infrastructure improvements.
                Electronic Health Record Modernization
        The Budget invests $1.2 billion in EHRM. The health and safety of
    our Veterans is one of our highest national priorities. On June 5,
    2017, I announced my decision to adopt the same electronic health
    record (EHR) system as the Department of Defense (DOD). This
    transformation is about improving VA services and significantly
    enhancing the coordination of care for Veterans who receive medical
    care not only from VA, but DOD and our community partners. We have a
    tremendous opportunity for the future with EHRM to build transparency
    with Veterans and their care providers, expand the use of data, and
    increase our ability to communicate and collaborate with DOD and
    community care providers. In addition to improving patient care, a
    single, seamless EHR system will result in a more efficient use of VA
    resources, particularly as it relates to health care providers. Given
    the magnitude of this transformation and the significant long-term
    costs and complex contracting needs, we are requesting a single
    separate account for this effort.
        This new EHR system will enable VA to keep pace with the
    improvements in health information technology and cyber security which
    the current system, VistA, is unable to do. Moreover, the acquisition
    of the same solution as DOD, along with the added support of joint
    interagency governance and support from national EHR leadership
    including VA partners in industry, government, academic affiliates, and
    integrated health care organizations, will enable VA to meaningfully
    advance the goal of providing a single longitudinal patient record that
    will capture all of a Servicemember's active duty and Veteran health
    care experiences. It will enable seamless care between the Departments
    without the current manual and electronic exchange and reconciliation
    of data between two separate systems. To that end, I have insisted on
    high levels of interoperability and data accessibility with our
    commercial health partners in addition to the interoperability with
    DOD. Collectively, this will result in better service to our Veterans
    because transitioning Servicemembers will have their medical records at
    VA. VA is committed to providing the best possible care to Veterans,
    while also remaining committed to supporting Veterans' choices to seek
    care from private providers via our continued investment in the
    Community Care program.
                Legacy Systems Modernization
        The FY 2019 Budget continues VA's investment in technology to
    improve the lives of Veterans. The planned Information Technology (IT)
    investments prioritize the development of replacements for specific
    mission critical legacy systems, as well as operations and maintenance
    of all VA IT infrastructure essential to deliver medical care and
    benefits to Veterans. The request includes $381 million for development
    to replace specific mission critical legacy systems, such as the
    Benefits Delivery Network and the Burial Operations Support System.
    Investments in IT will also support efforts and initiatives that are
    directly Veteran-facing, such as mental health applications to support
    suicide prevention, modifications of multiple programs to accommodate
    special requirements of the community care program, Veteran self-
    service applications (Navigator concept), education claims processing
    integration consolidation, and benefit claim appeals modernization. The
    Budget also invests $398 million for information security to protect
    Veterans' information.
        The FY 2019 Budget request would increase the Department's ability
    to apply agile program management to the dynamics of modern IT
    development requirements. To do this, the Department proposes
    increasing 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.
                Financial Management Business Transformation
        Another critical system that will touch the delivery of all health
    and benefits is our new financial management system, which is under
    development. The FY 2019 budget requests $72.8 million in IT funds and
    $48.8 million in fair share reimbursable funding from the
    Administrations for business process re-engineering to support
    Financial Management Business Transformation across the Department.
    These resources support the continued modernization of our financial
    management system by transforming the Department from numerous
    stovepipe legacy systems to a proven, flexible, shared service business
    transaction environment. Even though the U.S. Department of Agriculture
    (USDA) is not moving forward as VA's Federal Shared Service Provider,
    VA continues to work with USDA to ensure a smooth transition. VA's
    Office of Finance continues to manage the program and the
    implementation is on schedule and within budget.
                Infrastructure Improvements and Streamlining
        In FY 2019, VA will focus on improving its infrastructure while we
    transform our health care system to an integrated network to serve
    Veterans. This budget requests $1.1 billion in Major Construction
    funding, as well as $706.9 million in Minor Construction for priority
    infrastructure projects. This funding supports projects including the
    St. Louis, Missouri, Jefferson Barracks Medical Facility Improvements
    and Cemetery Expansion project; the Canandaigua, New York, Construction
    and Renovation project; the Dallas, Texas, Spinal Cord Injury project;
    and national cemetery expansions in Rittman, Ohio; Mims, Florida; and
    Holly, Michigan. VA is also requesting $964 million to fund more than
    2,100 medical leases in FY 2019 and $672.1 million for activation of
    new medical facilities.
        VA appreciates the support of Congress and is grateful for the
    passage of the VA Choice and Quality Employment Act of 2017 (Public Law
    (P.L.), 115-46), which included authorization for 28 major medical
    leases, some of which had been pending authorization for approximately
    3 years. The leases will establish new points of care, expand sites of
    care, replace expiring leases, and expand VA's research capabilities.
    In FY 2019, VA is seeking Congressional authorization of four new
    outpatient clinic leases to expand services currently offered at
    existing clinics. The requested leases would be located in the
    vicinities of Lawrence, Indiana; Plano, Texas; Baton Rouge, Louisiana;
    and Beaumont, Texas.
        The FY 2019 Budget includes a new initiative to address VA's
    highest priority facilities in need of seismic repairs and upgrades.
    VA's major construction request includes $400 million that will be
    dedicated to correct critical seismic issues that currently threaten
    the safety of Veterans and VA staff at VA facilities. The seismic
    program would fund newly identified unfunded, existing, and partially-
    funded seismic projects within VA's major, minor, and non-recurring
    maintenance programs.
        VA's FY 2019 Budget includes proposed legislative requests,
    consistent with the Veteran Coordinated Access & Rewarding Experiences
    Act draft bill that VA submitted last fall, which, 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 joint facility projects with DOD
    and other Federal agencies; and 3) expanding VA's enhanced use lease
    authority to give VA more opportunities to engage the private sector
    and local governments to repurpose underutilized VA property.
        To maximize resources for Veterans, VA repurposed or disposed of
    131 of 430 vacant or mostly vacant buildings since June 2017. VA is on
    track to meet the goal that I set in June 2017 for VA to initiate
    disposal or reuse actions for all 430 buildings by June 2019.
        The Department is also a participant in the White House
    Infrastructure Initiative, which is exploring additional ways to
    modernize VA's real property assets, and support our continued delivery
    of quality care and services to our Nation's Veterans. The proposed
    Infrastructure Initiative includes flexibilities for VA to leverage
    existing assets to continue its efforts to reduce the number of vacant
    buildings in its inventory; tools to leverage VA assets for the
    construction of needed new facilities to serve Veterans; and an
    increase to VA's existing medical facility leasing threshold, which
    would streamline our leasing process so VA can more quickly and
    efficiently deliver facilities to provide care and services to
    Veterans.
                Accountability and Effective Management Practices
        Another critical system VA is significantly improving 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 some employees have tarnished the reputation of VA
    while so many have dedicated their lives to serving our Nation's
    Veterans. We will not tolerate employees who deviate from VA's I-CARE
    (Integrity, Commitment, Advocacy, Respect, and Excellence) values and
    underlying responsibility to provide the best level of care and
    services to them. Last May, VA established the Office of Accountability
    and Whistleblower Protection. Between June 1, 2017, and December 31,
    2017, VA removed more than 900 staff (not including probationary
    terminations) and placed more than 250 staff on suspensions of 14 days
    or greater. We thank Congress for passing the Department of Veterans
    Affairs Accountability and Whistleblower Protection Act of 2017 (P.L.
    115-41), so that new accountability rules for VA are now the law of the
    land.
        We are also focused on improving our unduly burdensome internal
    hiring practices. In the face of a national shortage of health care
    providers, VHA faces competition with the commercial sector for scarce
    resources. Over the past year, we reduced the time it took to hire
    Medical Center Directors by 40 percent and obtained approval from the
    Office of Personnel Management for critical position pay authority for
    many of our senior health care leaders. But there is much work left to
    do. I will need Congress' help with legislation to reform recruitment
    and compensation practices allowing VA to stay competitive with the
    private sector and other employers.
    Priority 3: Improve Timeliness
                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 access to same-day services
    for primary care and mental health care at the more than 1,000 all VA
    clinics across our system. I am also committed to ensuring that any
    Veteran who requires urgent care will receive timely care.
        In 2017, 81.5 percent of nearly 6 million outpatient appointments
    for new patients were completed within 30 days of the day the Veteran
    first requested the appointment (``create date''), whereas 97.3 percent
    of nearly 50.2 million established appointments were completed within
    30 days of the date requested by the patient (``patient-indicated
    date''). VHA has reduced the Electronic Wait List from 56,271 entries
    to 20,829 entries, a 63.0 percent reduction between June 2014 and
    December 2017. The Electronic Wait List reflects the total number of
    all patients for whom appointments cannot be scheduled in 90 days or
    less. During FY 2018 and FY 2019, VA will continue to focus its efforts
    to reduce wait times for new patient appointments, with a particular
    emphasis on primary care, mental health, and medical and surgical
    specialties.
        In FY 2019, 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 FY 2019 Budget requests a
    total of $76.5 billion in funding for Veterans' medical care in
    discretionary budget authority, including collections. The FY 2019
    request will support nearly 315,688 medical care FTE, an increase of
    over 5,792 above the 2018 level.
        VA is implementing a VISN-level Gap Coverage plan that will enable
    facilities to request gap coverage providers in areas that are
    struggling with staffing shortages. It is a seamless electronic request
    that allows VISNs to focus resources where they are most needed
    according to supply and demand. Telehealth will be the principal form
    of coverage in this initiative, which is budget neutral.
        NCA has begun phase one expansion of the weekend burial pilot
    program, which provides Veterans and family members with increased
    access to burials at select national cemeteries. During phase one, NCA
    will offer cremation-only weekend burials at six cemeteries. The FY
    2019 Budget will support phase two of the pilot by expanding the
    weekend program to an additional five cemeteries.
                Accelerating Processing of Disability Claims
        Since 2013, VA has made remarkable progress toward reducing the
    backlog of disability compensation claims pending over 125 days. VBA's
    FY 2019 budget request of $2.9 billion would allow VBA to maintain the
    improvements made in claims processing over the past several years.
    This budget prioritizes more timely review of 1.3 million rating claims
    and 187,000 higher level reviews to decrease the amount of time
    Veterans wait for a resolution. It also prioritizes fiduciary care for
    vulnerable beneficiaries to ensure protection for VA's most vulnerable
    veterans who are unable to manage their VA benefits. This budget
    supports the disability compensation benefits program for 4.5 million
    Veterans and 600,000 survivors.
        To continue improving disability compensation claims processing,
    VBA has implemented an initiative called Decision Ready Claims (DRC).
    The DRC initiative offers Veterans, Servicemembers, and survivors
    faster supplemental claims decisions through a partnership with
    Veterans Service Organizations (VSO) and other accredited
    representatives to assist applicants with ensuring all supporting
    evidence is included with the claim at the time of submission, enabling
    the claim to be decided within 30 days of submission to VA. In FY 2019,
    VBA plans to complete 25 percent, or nearly 300,000 disability
    compensation claims, under the more timely DRC initiative.
                Decisions on Appeals
        In August 2017, the President signed into law the Veterans Appeals
    Improvement and Modernization Act of 2017 (P.L. 115-55), which
    represents the most significant statutory change to affect VA claims
    and appeals in decades and provides much-needed reform. VA is in the
    process of implementing the new claims and appeals system by
    promulgating regulations, establishing procedures, hiring and training
    personnel, and developing IT systems. By February 2019, all requests
    for review of VA decisions will be processed under the new law, which
    will provide a more efficient claims and appeals process for Veterans,
    with opportunities for early resolution of disagreements with VA
    decisions.
        The FY 2019 request of $174.8 million for the Board of Veterans'
    Appeals (the Board) is $19.2 million above the FY 2018 Budget and will
    sustain the 1,025 FTE who will adjudicate and process legacy appeals
    while implementing the Appeals Improvement and Modernization Act. The
    Board is currently on pace to produce over 81,000 decisions, a historic
    level of production.
        In addition, VBA is also undertaking a similar, multi-pronged
    approach to modernize its appeals process through legislative reform,
    increased resources, technology, process improvements, and increased
    efficiencies. The requested $74 million for appeals processing
    increases VBA's appeals FTEs by 605, more than 40 percent above 2018.
        This increase comes after VBA realigned its administrative appeals
    program under the Appeals Management Office (AMO) in January 2017, as
    part of an effort to streamline and improve performance in legacy
    appeals processing. The improved focus and accountability resulting
    from this realignment helped increase VBA appeals production by 24
    percent, decrease its appeals inventory by 10 percent, and increase its
    appeals resolutions by 10 percent, resolving over 124,000 appeals
    during FY 2017.
        In FY 2019, the Appeals Modernization project will achieve the
    benefit of using Caseflow Certification, which is a commercially
    developed system that will help reduce errors and delays caused by
    disjointed manual processing, and improve the Veteran experience by
    enabling transparency of appeals processing and ultimately facilitating
    the delivery of more timely appeals decisions.
    Priority 4: Suicide Prevention
        Suicide prevention is VA's highest clinical priority, and Veteran
    suicide is a national health crisis. On average, 20 Veterans die by
    suicide every day--this is unacceptable. The integration of Mental
    Health program offices and their alignment with the suicide prevention
    team and the Veterans Crisis Line is being implemented to further
    enhance VA's ability to effectively meet the needs of the most
    vulnerable Veterans. The FY 2019 Budget Request increases resources to
    standardize suicide screening and risk assessments and expands options
    for safe and effective treatment for Veterans struggling with Post
    Traumatic Stress Disorder and suicide.
        The FY 2019 Budget requests $8.6 billion for Veterans' mental
    health services, an increase of 5.8 percent above the 2018 current
    estimate. It also includes $190 million for suicide prevention
    outreach. VA recognizes that Veterans are at an increased risk for
    suicide, and we have 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 Ending 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, starting far earlier in the trajectory that leads to a
    Veteran taking his or her own life. VA cannot do this alone; 70 percent
    of Veterans who die by suicide are not actively engaged in VA health
    care. Veteran suicide is a national issue and can only be ended through
    a nationwide community-level approach that begins to solve the upstream
    risks Veterans face, such as loss of belonging, meaningful employment,
    and engagement with family, friends, and community.
                Executive Order to Improve Mental Health Resources
        On January 9, 2018, President Trump signed an Executive Order
    (13822) titled, ``Supporting Our Veterans During Their Transition From
    Uniformed Service to Civilian Life.'' This Executive Order directs DOD,
    VA, and the Department of Homeland Security to develop a Joint Action
    Plan that describes concrete actions to provide access to mental health
    treatment and suicide prevention resources for transitioning uniformed
    Servicemembers in the year following their discharge, separation, or
    retirement.
        VA encourages all transitioning Servicemembers and Veterans to
    contact their local VA medical facility or Vet Center to learn about
    what VHA mental health care services may be available.
                REACH VET Initiative
        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) program. This program finishes its first year of full
    implementation in February 2018 and has identified more than 30,000 at
    risk Veterans to date. REACH VET uses a new predictive model 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, so that VHA providers can review
    and enhance care and talk to these Veterans about their needs. REACH
    VET was expanded to provide risk information about suicide and opioids,
    as well as clinical decision support to Veterans Crisis Line responders
    and is being further expanded to provide this important risk
    information to frontline VHA providers. REACH VET is limited to
    Veterans engaged in our health care system and is risk-focused, so
    while it is critically important to those Veterans it touches, it is
    not enough to bring down Veteran suicide rates. We will continue to
    take bold action aimed at ending all Veteran suicide, not just for
    those engaged with our system.
                Other than Honorable Initiative
        We know that 14 of the 20 Veterans who, on average, died by suicide
    each day in 2014 did not, for various reasons, receive care within VA
    in 2013 or 2014. Our goal is to more effectively promote and provide
    care and assistance to such individuals to the maximum extent
    authorized by law. To that end, beginning on July 5, 2017, VA promoted
    access to care for emergent mental health care to the more than 500,000
    former Servicemembers who separated from active duty with other than
    honorable (OTH) administrative discharges. This initiative specifically
    focuses on providing 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. As part of this
    initiative, former Servicemembers with OTH administrative discharges
    who present to VA seeking emergency mental health care for a condition
    related to military service would be eligible for evaluation and
    treatment for their mental health condition. Such individuals may
    access the VA 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 assessment, medication
    management/pharmacotherapy, lab work, case management, psycho-
    education, and psychotherapy. As of December 30, 2017, VHA had received
    3,241 requests for health care services under this program. In
    addition, in FY 2017, Readjustment Counseling Services through Vet
    Centers provided services to 1,130 Veterans with ``Other than
    Honorable'' administrative discharges and provided 9,889 readjustment
    counseling visits.
    Priority 5: Greater Choice for Veterans
        Veterans deserve greater access, choice, and control over their
    health care. VA is committed to ensuring Veterans can make decisions
    that work best for themselves and their families. Our current system of
    providing care for Veterans outside of VA requires that Veterans and
    community providers navigate a complex and confusing bureaucracy. VA is
    committed to building an improved, integrated network for Veterans,
    community providers, and VA employees; we call these reforms Veteran
    Coordinated Access & Rewarding Experiences, or Veteran CARE.
        Veteran CARE would clarify and simplify eligibility requirements,
    build a high performing network, streamline clinical and administrative
    processes, and implement new care coordination support for Veterans.
    Veteran CARE would improve Veterans' experience and access to health
    care, building on the best features of existing community care
    programs. This new program would complement and support VA's internal
    capacity for the direct delivery of care with an emphasis on
    foundations services. The CARE reforms would provide VA with new tools
    to compete with the private sector on quality and accessibility.
        Demand for community care remains high. The Veterans Choice Program
    comprised approximately 62 percent of all VA community care completed
    appointments in FY 2017. We thank Congress for the combined $4.2
    billion provided in Calendar Year 2017 to continue the Choice Program
    while discussions continue regarding the future of VA community care.
    Based on historical trends, current Choice funding may last until the
    end of May 2018, depending on program utilization. VA has partnered
    with Veterans, community providers, VSOs, and other stakeholders to
    understand their needs and incorporate crucial input into the concept
    for a consolidated VA community care program. Currently, VA is working
    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. The time to act is
    now, and we need your help.
        In FY 2019, the Budget reflects $14.2 billion in total obligations
    to support community care for Veterans. This includes an additional
    $2.4 billion in discretionary funding that is now available as a result
    of the recently enacted legislation to raise discretionary spending
    caps. Of this amount, $1.9 billion replaces the mandatory funding that
    was originally requested in FY 2018 to be carried over into FY 2019.
    This funding will be used to continue the Choice Program for a portion
    of FY 2019 until VA is able to fully implement the Veteran CARE
    program. The remaining $500 million will support VA's traditional
    community care program in FY 2019. The Administration would also
    support using discretionary funding provided in FY 2018 in the cap deal
    to ensure that the Choice Program can continue to operate for the
    remainder of FY 2018.
        Finally, the Budget transitions VA to recording community care
    obligations on the date of payment, rather than the date of
    authorization. This change in the timing of obligations results in a
    one-time adjustment of $1.8 billion, which would support a total 2019
    program level of $14.2 billion for community care needs.
                                forever gi bill
        In addition to expanding choice in health care, the Harry W.
    Colmery Veterans Educational Assistance Act of 2017 or the Forever GI
    Bill contains 34 new provisions, the vast majority of which will
    enhance or expand education benefits for Veterans, Servicemembers,
    Families and Survivors. Most notably, this new law removes the 15-year
    time limitation for Veterans who transitioned out of the military after
    January 1, 2013, to use their Post-9/11 GI Bill benefits. This law also
    restores benefits to Veterans who were impacted by school closures
    since 2015, expands benefits for certain Reservists, surviving
    dependents, Purple Heart recipients, and provides many other
    improvements. Thirteen of the 34 provisions were effective on the date
    of enactment, while the remaining provisions have future effective
    dates ranging from January 1, 2018, to August 1, 2022.
                                    closing
        Thank you for the opportunity to appear before you today to address
    our FY 2019 budget and FY 2020 AA budget requests. These resources will
    honor the President's commitment to Veterans by continuing to enable
    the high quality care and benefits our Veterans have earned. They will
    support my efforts to achieve my top priorities while ensuring that VA
    is a source of pride for Veterans, beneficiaries, employees, and
    taxpayers. I ask for your steadfast support in funding our full FY 2019
    and FY 2020 AA budget requests and continued partnership in making bold
    changes to improve our ability to serve Veterans. I look forward to
    your questions.

        Chairman Isakson. Thank you very much, Mr. Secretary. I
    want to ask one question, then we will go straight to the other
    Members; that question is, in the event the appropriators do
    not appropriate, or we fall short on the money we are going to
    need before the fiscal year is over to meet the demands of care
    in the community and the other things we have done, are you
    making plans for what other resources we are going to use to
    meet those demands?
        Secretary Shulkin. Yes. As you know, Mr. Chairman, we have
    faced this situation before. As of March 16 we have $1.1
    billion left in the Choice fund that is unobligated. At a run
    rate of about $370 million a month, we will get to probably the
    first week in June before we start running out of money in the
    Choice Program. At that point we will rely upon our traditional
    community care funds, which is approximately $800 million a
    month.
        We will put in place a prioritization system to make sure
    the veterans that need the care the most are going to get that
    care in the community as well as in VA. It is not ideal. As you
    know, all of us share the goal of making sure that veterans are
    getting the care they want. We prefer that we find a funding
    mechanism for Choice to get us through the rest of the fiscal
    year.
        Chairman Isakson. Yes. I think it is important that we
    prioritize so we meet the needs of the vets and deliver the
    services they are expecting from us.
        Secretary Shulkin. Absolutely.
        Chairman Isakson. Senator Tester.

      OPENING STATEMENT OF HON. JON TESTER, RANKING MEMBER, U.S.
                          SENATOR FROM MONTANA

        Senator Tester. Thank you, Chairman. As we have said, I
    want to thank you for being here today, and Mr. Secretary and
    your staff, thank you for the meeting yesterday morning.
        The budget proposes to spend about $1 billion more on
    community care this year than last year, and either you or Mr.
    Rychalski can talk about this $14.2 billion, fiscal year 2019,
    $13.02 billion in fiscal year 2018. Is that correct?
        Secretary Shulkin. Yes.
        Senator Tester. OK. Overall request for medical care is
    $76.54 billion, is lower than this year's estimate, which is
    $77.4, almost a billion dollars less. Is that correct?
        Secretary Shulkin. I am going to refer this to Mark Yow.
    Mark has a way of explaining this that I think will make sense
    to you.
        Mr. Yow. Senator, as we talked about last year, when you
    look at only the appropriation you are only getting part of the
    picture.
        Senator Tester. Yes.
        Mr. Yow. There are some other moving parts here--carryover,
    obligated balances to bring forward. We also have a reduced
    requirement for hepatitis C this year, about $600 million less
    than we had last year. So, it is difficult to compare just the
    appropriation alone and see the difference.
        When we look at total obligations, we believe our medical
    services appropriation is going to increase slightly less than
    1 percent this year compared to last year, when we look at all
    funding sources.
        Senator Tester. The figures that I gave you are from the
    budget book. What you are saying is that there are carryover
    dollars that are going to make up the difference?
        Mr. Yow. There are a number of funding sources that are
    available. We have an obligated balance from the prior year----
        Senator Tester. I know, but just tell me. You all tell me
    that--because your budget is $1 billion less----
        Mr. Yow. Yes, sir.
        Senator Tester [continuing]. And I just want----
        Mr. Yow. When I look at medical services----
        Senator Tester. Yes.
        Mr. Yow. The President's budget requested that VA combine
    medical services and medical community care together in the
    budget going forward. When I back out the component that would
    be medical community care, the residual amount of funding for
    medical services actually increases by almost 1 percent
    compared to last year.
        Senator Tester. Is it true that we--the recent budget deal
    provided an additional $4 billion for existing facilities? You
    do not need to answer it. It is true. The information that we
    got from the VA, Secretary Shulkin, from your staff, is that
    you are going to spend half of that on Choice funding.
        Secretary Shulkin. Yes. That right now is the proposal,
    which is to spend about half on infrastructure and half on
    Choice.
        Senator Tester. All right. We have had this conversation
    almost every time we have been in here, which is that you said
    multiple times you are not in favor of privatization. We have
    heard from every VSO except one that they do not want to see
    privatization. Yet, boy, I see privatization written all over
    this budget. And I have got to tell you, I never served so this
    is not about me.
        Secretary Shulkin. Yes.
        Senator Tester. We have created a lot of veterans that are
    dependent on the VA, and I can tell you, from my perspective,
    if we privatize this beast the veterans will be up in arms, and
    should be up in arms. I just want to make sure--the budget is
    about priorities and I do not see the VA being the priority. I
    see community care being the priority in this budget. Tell me I
    am wrong and tell me why.
        Secretary Shulkin. I do think that this is a budget that
    balances the priorities. There is, as I mentioned in my opening
    statement, more investment in infrastructure in VA's fiscal
    year 2019 budget than there has been in the last 5 years. We
    are desperately trying to hire where we have vacancies and to
    make sure that we fill these vacancies and improve the way that
    the services are delivered in VA, but we are not willing to let
    our veterans wait for care.
        Senator Tester. I got it.
        Secretary Shulkin. Therefore, we are using the community
    where we need to----
        Senator Tester. I got it.
        Secretary Shulkin [continuing]. And I think over the last
    couple of years we have made good progress by balancing working
    with the private sector and trying to strengthen the VA.
        Senator Tester. Yes. Well, I will just tell you, and I
    cannot speak for everybody sitting around this table, but in
    Montana they are doing their damndest to privatize the VA. They
    are using telehealth and pushing people out the door, for basic
    appointments; not for dealing with mental health and all the
    stuff we have talked about on this Committee, which is very
    valuable. They are using it for primary appointments because
    they have got no docs.
        Then, I look at this budget much closer and I would have
    absolutely brought this up with you yesterday if I had had the
    numbers I have today.
        Secretary Shulkin. Yes.
        Senator Tester. Let me go to a different area. About 8
    months ago you stood with me in Montana--and thank you for
    being there--and announced VA would be issuing new regulations
    to help rural communities build State nursing homes for
    veterans----
        Secretary Shulkin. Yes.
        Senator Tester [continuing]. In a more timely fashion. When
    will those be released?
        Secretary Shulkin. Well, I absolutely am committed to
    redoing the regulations to help rural facilities get greater
    funding. We do need to rewrite those regulations.
        Senator Tester. Yes.
        Secretary Shulkin. We are in the process of doing that
    right now. They will be rewritten and implemented in 2019,
    calendar year 2019.
        Senator Tester. That is a ways off. We are in 2018 now.
        Secretary Shulkin. Yes, it takes us, unfortunately 6 to 9
    months to complete the rulemaking process.
        Senator Tester. OK. As you know by now, the recently
    released omnibus had some pretty major money in it for
    construction of State veterans homes.
        Secretary Shulkin. Yes.
        Senator Tester. I fought hard to make sure this was the
    case. We need your fiscal year 2018 construction grant priority
    list. It is yet to be published by the Department, and I would
    love to see that list. When do you think we can see that list?
        Secretary Shulkin. I think we do have that list available.
    We would be glad to share that with you.
        Senator Tester. I am going to be really parochial right
    now.
        Secretary Shulkin. Yes.
        Senator Tester. Is Butte on that list?
        Secretary Shulkin. Butte would be 57th on that list. If we
    do not----
        Senator Tester. Where is the funding----
        Secretary Shulkin. Current funding levels will not get to
    57. It usually gets us to project 13 or 14 on the State
    Veterans Home Construction Grant Priority List.
        Senator Tester. Even with the omnibus money?
        Secretary Shulkin. Oh. I thought you were talking about
    State veterans homes.
        Senator Tester. Yes, I am.
        Secretary Shulkin. Yes. Yes. Well, as you know, we have, in
    2019, $156 million for that. This year, about $80 or $90
    million. So that is why I agree with you, that the rural States
    were never going to be funded, and I know that was your
    intention to help the rural States. That is why I have created
    this new reg that will prioritize a certain amount of funding
    for rural States.
        Senator Tester. OK. That was not the answer I wanted to
    hear but I am out of time. Thank you.
        Chairman Isakson. Just to make sure I understand, Mr. Yow,
    would you answer a question for me?
        Mr. Yow. Sure.
        Chairman Isakson. When Senator Tester asked the question he
    asked about funding, and made a comment it looked like you were
    having a lot of money roll--take a lot of money and you roll it
    over from the previous year to pay for it next year? Are you
    all now accruing your expenses at the time they are ordered,
    not when they are actually provided? Meaning you are accruing
    more expenses than you actually are realizing? Is that the
    reason you have more money to roll forward?
        Mr. Yow. That is part of it, sir. Yes, sir. You also
    remember last year, before we got the Choice funds, we had set
    aside some funds that we were going to ask to transfer into
    community care. When we eventually got the additional Choice
    funds, those funds were returned but they were not able to be
    executed by the field in the time that we had left last year
    when that was all resolved in August. So, that was about $800
    million or so of that.
        Chairman Isakson. Thank you very much.
        Mr. Yow. Yes, sir.
        Chairman Isakson. Mr. Moran.

               HON. JERRY MORAN, U.S. SENATOR FROM KANSAS

        Senator Moran. Mr. Chairman, thank you very much. The
    fiscal year 2018 appropriation bill in the omnibus plusses up
    State veterans' homes by $100 million or more. It is a
    significant increase, so I hope it is helpful.
        Mr. Secretary, the original Choice bill--we will have a
    chance to have a conversation in our appropriations process----
        Secretary Shulkin. Yes.
        Senator Moran [continuing]. But I have two questions I am
    going to try to get in, in the short time that I have. The
    Choice bill that was passed in 2014, that legislation included
    a clause that allowed veterans to receive care through Choice
    based upon, quote, ``unusual and excessive burden.''
        Secretary Shulkin. Yes.
        Senator Moran. We had a conversation during your
    confirmation hearing on this topic because we were then told
    that there were six criteria by which that was limited. It had
    to meet one of those six criteria to be considered excessive.
    And you were kind enough--I quote you--``I can give you good
    news on that. Those were meant to be examples, those six.''
        Secretary Shulkin. Right.
        Senator Moran. ``I think the field took them literally,
    that these were the only five conditions.''--I am not sure how
    we got to five. ``So we have now gone out nationally and
    clarified that, to give the flexibility that you need.''
        I responded, even with your commitment in hand and on the
    record, I am reminded that, quote, ``In many instances in which
    the VA assures us they have solved the problem, you get out to
    Kansas and nobody knows of the change.''
        Just recently, March 6, one of my veteran staff workers
    attended a VA Eastern Kansas town hall meeting where the
    community care supervisor for the region and the medical center
    director explained the Choice Program and how eligibility works
    to veterans in the audience. They explained the 40-mile, 30-day
    criteria. Then they proceeded to discuss a whole new set of
    criteria that we had never heard of called medical hardship,
    which is to be used when a veteran has health conditions that
    prevent them from being able to travel.
        Then they talked about the unusual excessive burden. They
    told the veterans in attendance that that was limited to only
    six conditions, and that at each month those six conditions
    changed, based upon guidance sent out by the VA.
        So, we have gone from six conditions that are examples to
    six conditions that are for real, and six conditions that
    change on a monthly basis. Where are we on excessive burden?
        Secretary Shulkin. Well, I think your interpretation, that
    you and I discussed at the time of confirmation, is the right
    one, which is that we want there to be the flexibility that
    when a veteran has an unusual and excessive burden that they be
    able to access the Choice Program, and we want that to be. You
    cannot describe every situation that is going to happen, so we
    do not want that to be limited to a list. We want there to be
    clinical and administrative judgment in that. If the field is
    still not getting that message, we will make sure that we go
    out and clarify that again.
        But we did. Dr. Yehia, at the time that we met with you,
    went out and spoke to all of our network directors shortly
    after our conversation, to make sure they understood that.
        So, I am disappointed that people are still using rigid
    lists when they should be using the best judgment for the
    veteran.
        Senator Moran. I would add a couple of things. One, the
    idea that the six items change on a monthly basis is even more
    concerning.
        Secretary Shulkin. Right.
        Senator Moran. That is a whole new aspect that we have
    never talked about, and this issue, incidentally, is one that
    Senator Tester pushed to be included in the Choice
    Reauthorization Bill that we are still attempting to get
    passed.
        Secretary Shulkin. Right.
        Senator Moran. So, this issue does not go away, even after
    we pass legislation. I want to make certain that, in the case
    of the new bill, it is a discussion between the VA physician
    and a patient, a veteran, in which this can be utilized, and I
    need to make certain that we are not back to the six criteria
    as the only way that that excessive burden can be utilized.
        Secretary Shulkin. I am fully supportive of your approach
    here.
        Senator Moran. Thank you.
        Maybe this is a question for Assistant Secretary Rychalski.
    I want to hear, in your time that you have been there, how are
    we doing on the ability to estimate the dollars needed? We have
    had this problem, particularly with Choice, but it is not
    simply limited to Choice, in which the burn rate is apparently
    impossible or very difficult to know what it is.
        And I heard the Secretary indicate where he is. I heard
    what Mr. Yow said. Have you got procedures in place that we now
    are more able to rely on? Again, I will admit that you have
    only been there a few months.
        Mr. Rychalski. Right.
        Senator Moran. Do we have the system in place in which we
    can rely upon the estimates of the VA to know when those
    dollars are going to be required, and that we avoid what the
    Secretary talked about, limitations, changing criteria on who
    is eligible to Choice by prioritization?
        Mr. Rychalski. I would say, in my experience, the short
    answer is no, we do not have the procedures in place, but I
    think we are working in that direction. And, I would liken this
    to my experience with the military health system in the early
    days of TRICARE, where we had substantial fluctuations. I think
    the key here is on one hand we need some experience under our
    belt to get a sense of patient demand, cyclical fluctuations,
    and contracting issues.
        I think the VA, before I asked them, asked for authorities
    that will help tremendously. By that I mean we talked about the
    timing of obligation that frees up funding, consolidating the
    Community Care Programs into one, making it discretionary. All
    of those things, from a practical standpoint, provide
    flexibility to manage the highs and lows, and then as time
    passes and the program stabilizes, what we found in the
    military health system is you get a better sense of how much
    money is needed and when that money is needed.
        Another thing that we are looking at, that we used to use
    in the Military Health System, is the actual cash
    disbursements, which tells you how much cash you need on hand.
    It is not the obligation. It is actually paying the check.
        So, there are a number of things in the works, and I think
    over the next, you know, 6, 12, 18 months, we will have a much
    better predictive capability. I know VA is working very hard on
    it. But, it is just sort of deja vu for me, from what I
    experienced with the Military Health System some years ago. I
    think they are on the right track, though, based on my
    experience and the things that I would recommend, that worked
    for the Military Health System.
        Senator Moran. It is one of my concerns that we do not
    necessarily take into account things that are already--have not
    yet been expended but are obligated.
        Mr. Rychalski. Right.
        Senator Moran. Thank you, Mr. Chairman.
        Chairman Isakson. Thank you, Senator Moran.
        Senator Murray.

            HON. PATTY MURRAY, U.S. SENATOR FROM WASHINGTON

        Senator Murray. Thank you very much. Mr. Chairman and
    Ranking Member Tester. I especially want to thank both of you
    for your dedication to passing the caregivers legislation and
    getting it out of this Committee. I am committed to getting
    this done, as I know you are, and I really appreciate it. We
    have talked a lot about how important this program is. It makes
    a difference for veterans and their families. We heard, in the
    last few weeks, from the VSOs, that it is a critical priority
    for them. So, thank you.
        Mr. Secretary, I just have to say to you I am disappointed
    again to see the Department is requesting significant cuts to
    this program compared to previous projections. I am going to
    continue to do my part here to make sure those funds are there
    for those families that need them.
        With that, Mr. Secretary, I want to follow up on Senator
    Tester, because I am concerned the Department is proposing to
    combine the medical services and the medical community care
    accounts. I, too, share significant concerns that this is going
    to lead to diverting funds from the VA health system that
    desperately needs it in order to send our veterans out to
    private markets.
        So, let me ask you, what specific restrictions and
    reporting requirements does the Department recommend to provide
    transparency, first of all, and make sure that the VA system
    itself is not raided?
        Secretary Shulkin. Well, we have talked about that. We very
    much appreciate your oversight role in this and we understand
    very much the sentiments of the Committee, and I share those
    sentiments. So, we are going to be committed to transparency in
    how we spend the money, in terms of individual decisions about
    what money gets invested in the VA, what money goes out into
    the community. We would propose doing that on a monthly basis
    and being able to share that with you.
        Senator Murray. But a proposal--are there strict
    requirements on transparency that we will see?
        Secretary Shulkin. Sharing with you the allocation of where
    the money is actually being spent.
        Senator Murray. And what specific restrictions can we see
    so that we know that it will not be misspent?
        Secretary Shulkin. Well, it is not a matter, necessarily, I
    think, not of misspending but it is a matter of--that this is
    not a----
        Secretary Murray. Respending.
        Secretary Shulkin. Right. Right. So, if you have some
    suggestions about how you would like to see us do that, our
    commitment is to being transparent about this. This is not--
    while I understand the concern, this is not an attempt to raid
    money from the VA to privatize. This is an attempt to make the
    best decisions.
        Secretary Murray. Well, all of us would feel better----
        Secretary Shulkin. Yes.
        Secretary Murray [continuing]. If we saw specific
    recommendations and restrictions, that are written in from the
    Department that it gives us that assurance.
        Secretary Shulkin. OK. Well, Mr. Rychalski has a
    suggestion.
        Mr. Rychalski. Right. Just a couple of suggestions. One
    would be, as a practical matter, as a management tactic, it is
    better for us if we have the consolidation. It is less about,
    in my mind, privatization as much as it is to promote
    efficiency in our ability to manage the program.
        So, I have a couple of observations. One is we are also
    proposing that all the funds become discretionary, which I
    think gives you more control over the discretionary resources.
    The other thing I would say is that we can provide a spending
    plan, we can provide monthly reporting, we can provide
    reporting in advance of, things like that. We will have the
    same level of visibility.
        Senator Murray. If you use the word ``will'' instead of
    ``can.''
        Mr. Rychalski. We absolutely will.
        Secretary Shulkin. Yes.
        Mr. Rychalski [continuing]. To your preferences; we can do
    all of those things.
        Senator Murray. OK.
        Secretary Shulkin. We will do all those things.
        Senator Murray. OK. In my home State of Washington, we have
    a very serious need for more resources and better oversight, in
    addition to significant construction and maintenance needs,
    clinics that need to be relocated. The latest count of veterans
    experiencing homelessness is increasing----
        Secretary Shulkin. Yes.
        Senator Murray [continuing]. And increasingly troubling,
    the Walla-Walla hospital, which is critical to veterans in that
    part of my State, just received a one-star quality rating. You
    have promised that the Department will take steps to address
    both the needs of homeless veterans and make the needed
    improvements at Walla-Walla. I want to ask what specific
    resources and personnel the VA is sending to address that.
        Secretary Shulkin. Yes. Well, first of all, we are very
    concerned about the uptick in homeless veterans. The two
    largest areas that saw the increase geographically were Seattle
    and Los Angeles. In both cases, affordable housing is the
    limitation. We have worked with HUD to make sure that more
    vouchers are available and that we are pushing the limit on how
    much we can raise the value of those vouchers to be able to get
    housing. But, there is a shortage of affordable housing in
    Seattle, which I am sure you are aware of because it is a very
    popular place to live and to, you know, be part of that
    community.
        We continue to look for ways to address, particularly in
    Seattle and Los Angeles, new approaches, and we are working----
        Senator Murray. Can you get me the specifics on that----
        Secretary Shulkin. Yes.
        Senator Murray [continuing]. And answer the question on
    Walla-Walla?
        Secretary Shulkin. Yes. Yes. In Walla-Walla, a one-star
    facility, we have identified specific management accountability
    strategies to work with one-star hospitals now, and we are
    requiring action plans that show how the hospitals will achieve
    improvements; they are on a very defined time limit to show
    results. We are providing extra resources and teams to low
    performing VA health care facilities to help them improve.
        Senator Murray. OK. Will you get back to my office,
    specifically the resources and personnel you are going to have
    to address that. I just have a few seconds, but I was really
    concerned to see your budget asks for a large decrease in the
    Office of Inspector General. I know how important that role is.
    I know you, yourself, were the subject of investigation. I have
    really grave concerns about under-resourcing an office that
    really plays a vital role in our oversight of the VA, on behalf
    of our Nation's veterans. And I want to know why this budget
    does not provide the OIG with the full funding that they need?
        Secretary Shulkin. Yes. Listen, we are supportive of the
    role of the Office of Inspector General (OIG) as well. In fact,
    this budget actually does provide them with the required
    resources. Jon, will you explain why it looks like it does not?
        Mr. Rychalski. If you look at our budget request from 2018
    to 2019, it actually goes up over 7 percent, so the Inspector
    General's Office, in fact, is receiving an increase. They had
    some carryover money from a previous year, so they hired above
    their budget level, and they sort of established that level as
    the new baseline, which is not technically correct. I mean----
        Senator Murray. Yes. My understanding is you are losing
    about 30 staff in the OIG office.
        Mr. Rychalski. I am not familiar with that circumstance, I
    would have to verify that.
        Secretary Shulkin. Let us get back to you. That is not our
    understanding. Our understanding is that OIG over-hired and
    that they do have the staffing they need.
        Senator Murray. Well, your budget asks for a decrease,
    including the carryover funding, so we have a misconception of
    reading there.
        Secretary Shulkin. OK.
        Mr. Rychalski. Well, I think, historically, for 2 years OIG
    under-executed their budget. I would be curious to talk with
    OIG to find out if they have executed their full budget, or are
    over their budget, and have to eliminate positions.
        Senator Murray. Thank you.
        Secretary Shulkin. Thank you.

        [The information requested during the hearing follows:]

                           U.S. Department of Veterans Affairs,
                                   Office of Inspector General,
                                         Washington, DC, April 3, 2018.
    Hon. Patty Murray,
    Committee on Veterans' Affairs
    U.S. Senate, Washington, DC.

        Dear Senator Murray: Your question regarding the VA Office of
    Inspector General's (OIG) budget for fiscal year (FY) 2019 was referred
    to the OIG for a response. We appreciate your interest and are grateful
    for your support.
        The budget request for the OIG FY 2019 of $172 million will not be
    sufficient for the OIG to fully meet its mission of effective oversight
    of the programs and operations of VA. While that amount would represent
    an increase over the OIG's funding of $164 million for FY 2018, it
    falls short of even the OIG's actual FY 2018 operating budget of $179.9
    million (which includes $15.9 million of carryover due to a late hiring
    cycle that was out of synch with the budget cycle).
        There will not be a carryover of that size for FY 2019 as those
    funds will have been expended primarily on new hires to conduct our
    oversight work. In addition, we are now funding our Office of Contract
    Review approximately $5 million that was previously paid by VA through
    a reimbursable agreement, and there are other increased costs in FY
    2019. Consequently, a FY 2019 appropriation of $172 million would
    likely require a decrease of about 28 OIG staff. This would inevitably
    result in a curtailment of some of our oversight activities at a time
    when VA is experiencing growth, including large and complex projects
    such as VA's new electronic health records initiative, improving VA's
    financial systems, enhancing and consolidating VA's IT systems, and
    expansion of community care programs. The OIG will need additional
    funds to not only conduct oversight of these costly programs, but also
    to expand our investigations of other high-risk VA programs, such as
    construction, procurement, education benefits, and the delivery of
    timely and quality healthcare. The VA OIG's staffing is among the
    smallest ratio of oversight staff to agency staff across the Inspector
    General community. Moreover, the OIG budget represents less than .1
    percent of VA's overall budget, which again is less than a significant
    number of OIGs at other cabinet level agencies. A FY 2019 appropriation
    of $172 million will undermine progress achieved to ``right size'' the
    OIG oversight capacity to match the growth and demands of VA's new
    initiatives.
        We will provide a copy of this letter to Chairman Isakson and
    request that it be made part of the hearing record.
        Again, thank you for interest and support of the OIG.
                Sincerely,
                                             Michael J. Missal,
                                                     Inspector General.
                                     ______

        Chairman Isakson. Thank you, Senator Murray. Just pause for
    1 second. We welcome you, Mr. Rychalski. We are glad to have
    you on board. This is, I think, your first meeting since you
    have come on board. We are glad to have you.
        Mr. Rychalski. Thank you. It is a pleasure to be here.
        Chairman Isakson. Mr. Yow, I am sorry this is your last
    meeting, I think. You are retiring. Is that not correct?
        Mr. Yow. Lord willing, yes, sir. [Laughter.]
        I sure hope so.
        Chairman Isakson. We may come draft you, so stay close. You
    have done a great job for the VA and we appreciate it very,
    very much.
        Senator Cassidy.

             HON. BILL CASSIDY, U.S. SENATOR FROM LOUISIANA

        Senator Cassidy. Hey, Dr. Shulkin, again. Thank you for all
    your good work. I am strongly supportive of that which you are
    attempting to do.
        I am going to speak now as a physician who has worked in
    the transplant field; we had this conversation a little bit a
    day or so ago. I am concerned regarding the access by veterans
    to transplantation services, as well as, frankly, the quality
    of transplant service that they are having access to. The
    importance, just for those who may not be familiar with
    transplant services, if you get transplanted you have a higher
    quality-of-life, you are more likely to live longer, and it
    costs the taxpayer less money.
        There are problems, though. Let me just use the example of
    kidney transplantation. If you are transplanted at a VA
    facility, you have a lower rate of survival relative to being
    transplanted outside the VA. The VA transplant system, I am
    sure related to this, have a lower volume. Will you give me my
    first chart please?

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Cassidy. I mention volume because, as we both know,
    the higher the volume the more likely someone survives. This is
    over a 2-year period. Here is where the VA, where somebody from
    New Orleans would be referred to for transplant. Over 2 years
    these have 40, whereas Ochsner, which is in the city, has 276.
    More volume, better outcomes, clearly established.
        Second, aside from worse outcomes, or as an example, worse
    outcomes, there is a 20 percent higher rate of organ graft
    failure if you get it within the VA, as opposed to the non-VA.
        Now the VA has submitted testimony.
        I am sorry. I should also mention that VA patients have a
    longer wait time, with a lower rate of referral. Can you show
    chart two, please? So, if this is somebody with private
    insurance, this is the rate of referral, and of somebody within
    the VA, that is their rate of referral. There is also a problem
    relative to vets not getting referred for transplantation. I
    will note that the studies say that if the veteran has private
    insurance along with VA coverage, they have a rate of referral
    that looks like this, not like that.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Cassidy. Then, I think that is where I come up with
    my third chart--I have messed up my assistant--and that is the
    one which shows that if you do get transplanted with the VA,
    you have a higher risk of the transplanted organ failing.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        We just have got problems. Now, we have submitted an
    amendment that would allow the veteran to get transplanted,
    with referral, at a center closer to their home, where they
    could get, say, if they are in New Orleans, a better-quality
    transplant. The VA has submitted testimony, not yet heard, but
    opposing my amendment, allowing veterans to seek care at a
    higher-volume, higher-quality facility. We have actually
    requested a briefing from the VA, on February 7, as to why they
    would oppose this, and, frankly, we have not heard back from
    the VA. We have asked them and we have still not heard back. We
    are pinging, pinging, and not hearing back.
        So, we have got a problem. When you first--I think the
    first meeting I heard you speak at, as the deputy secretary,
    you said the VA should be about the veteran, not about the
    bureaucracy. Frankly, we are not allowing veterans to stay
    close to home and have a higher-quality, more-likely-to-live
    experience. How do we defend that if the veteran is a priority?
    Your thoughts.
        Secretary Shulkin. First of all, Senator Cassidy, I greatly
    respect not only your expertise, but exactly the position that
    you are taking, which is our job to do the best thing for the
    veteran. And if your data is correct, you and I are going to be
    working together on this thing.
        Senator Cassidy. Now this is all peer reviewed from the
    academic literature, and I have the whole stack here in my
    notebook.
        Secretary Shulkin. What I would like to do is exchange
    information, as you may have some information that I do not
    have. The information that I have, which is--and I brought the
    same thing for you--is a thorough review of the literature that
    has taken a look at information that shows that there really
    are no outcome differences between VA and non-VA patient in
    terms of survival.
        Senator Cassidy. The only subgroup that was true for was
    African Americans, but if you take all-comers, not just African
    Americans----
        Secretary Shulkin. Yes.
        Senator Cassidy [continuing]. There was a statistically
    significant difference.
        Secretary Shulkin. OK. Well, again, we are probably looking
    at some different studies. I think we can quickly get to the
    right data analysis. The studies that I have do show the
    concerns that you expressed about a delay in access to organs,
    wait times; so that is a concern.
        I would be glad to work with you. We want to get to the
    right answer. We want veterans to get the highest quality care;
    no doubt about that.
        Senator Cassidy. Now we had asked for a briefing from VA
    Transplant Services 6 weeks ago and still have not heard back.
    Is that correct?
        Secretary Shulkin. Well, this is the first I have heard of
    it, but I can assure you we are going to get that for you; and
    if I need to come to that directly, I will. We do have--I have
    from them their fiscal year, quarter 1, 2018 transplant report
    with all their volumes and outcomes. So, I think together we
    can get to the best solution here.
        Senator Cassidy. Sounds great.
        Secretary Shulkin. Thank you.
        Senator Cassidy. I thank you. I yield back.
        Chairman Isakson. Thank you, Dr. Cassidy.
        Senator Sanders.

             HON. BERNIE SANDERS, U.S. SENATOR FROM VERMONT

        Senator Sanders. Thank you, Mr. Chairman. Thank you,
    Secretary Shulkin and others for being with us today.
        Just three issues that I wanted to touch on. It is no great
    secret that there is a war going on within the administration
    and within the Congress about the future of the VA. The
    veterans' organizations are very strong, and Senator Tester
    made this point, that what they want to see is a VA
    strengthened, not weakened, not dismembered. Yet, we have very
    powerful political forces in this country, Koch brothers and
    others, who really want to privatize the VA, and they have some
    support in the U.S. Congress.
        Let me be as clear as I can be. I will do everything that I
    can to stand with the veterans' organizations and millions of
    veterans who want to improve the VA and not privatize it.
        My experience in Vermont is not dissimilar to Senator
    Tester's in Montana, that Choice is causing a whole lot of
    problems for our veterans, through bureaucracy, inadequate
    payments, so forth and so on. So, I intend to do everything I
    can to oppose the privatization of the VA, and hope that you
    will work with us on that, because that is what the veterans
    want, not a political debate. I think maybe we might want to
    support the veterans for whom the VA is supposed to be working.
    All right? That is issue number 1.
        Number 2, you have got 35,000 unfilled positions. How do we
    provide quality care in a timely manner to veterans if you have
    so many vacancies? And I understand it is a national issue.
        Secretary Shulkin. Yes.
        Senator Sanders. We do not have enough doctors in this
    country. We do not have enough nurses in this country, which is
    pathetic unto itself. But, what is the VA doing right now to
    make sure that we are filling those vacancies in a timely
    manner?
        Secretary Shulkin. Well, last year we made progress. We had
    a net gain of about 8,700 employees. This year our budget calls
    for a net gain of about 5,792 staff. So, what we are trying to
    do is to streamline our hiring processes. OPM just gave us 15
    more categories that we can do direct hiring in, which improves
    the process. We are doing more hiring fairs. We are working
    hard to improve----
        Senator Sanders. OK. So, filling those vacancies----
        Secretary Shulkin. Filling the vacancies is----
        Senator Sanders [continuing]. Is a major priority.
        Secretary Shulkin [continuing]. Is a priority.
        Senator Sanders. All right. Second issue. Included in the
    Bipartisan Budget Act of 2018 is the commitment that $2 billion
    in fiscal year 2018 and $2 billion in fiscal year 2019 will be
    used to, quote, ``rebuild and improve VA hospitals and
    clinics,'' end of quote.
        Secretary Shulkin. Yes.
        Senator Sanders. Instead, the Administration--I gather, you
    guys--are proposing to use more than half of that $4 billion
    negotiated for VA infrastructure to fund the existing Choice
    Program. If we put money into infrastructure to rebuild
    crumbling buildings in the VA, why are you taking money out of
    that and putting that into the Choice Program?
        Secretary Shulkin. Well, as you know, we share your concern
    that the VA infrastructure has been undercapitalized. We
    estimate it is a $50 billion capital----
        Senator Sanders. That is why we put $4 billion into it.
        Secretary Shulkin. I get it. I get it. That is why the 2019
    budget includes more money for major/minor construction than
    for 5 years, and the----
        Senator Sanders. I know. I was part of that 5-year program.
        Secretary Shulkin. OK. Absolutely. So, our concern is that,
    as the Chairman indicated in his opening remarks, that we do
    not today have enough funding--we know this--to get through the
    Choice and the Community Care programs. We have tried to make a
    reasoned decision about the best way to use resources. So,
    ultimately this is up to you.
        Senator Sanders. All right. It is up to us.
        Secretary Shulkin. It is.
        Senator Sanders. I mean, you can come here and we can argue
    about funding for Choice. That is a good debate. But we put $4
    billion into infrastructure and I intend to do everything I can
    to see that money goes into infrastructure.
        Furthermore, as I understand it, this year VA is requesting
    to combine medical community care and medical services
    accounts----
        Secretary Shulkin. Yes.
        Senator Sanders [continuing]. And you have further
    requested to divert discretionary funding intended for other VA
    purposes to provide additional funding to the Choice Program.
        Look, if we want to argue about the Choice Program--you
    have needs. Come and ask for the Choice Programs. But I resent
    taking money meant to go into the VA going into the Choice
    Program.
        All right. The last point that I want to make is--I am
    being parochial, as well.
        Secretary Shulkin. Yes.
        Senator Sanders. You and I have chatted. We are all
    parochial. We all have our own State needs and that is what it
    is about.
        Secretary Shulkin. Yes.
        Senator Sanders. Vermont is the only major medical center
    in the country not to have a dental clinic. You and I have
    chatted about that.
        Secretary Shulkin. Yes.
        Senator Sanders. Can you give me some assurances that we
    will end that unfortunate distinction?
        Secretary Shulkin. I received your letter and right now I
    am working with the dental office to try to address it. I
    certainly would like to. I cannot tell you that I have a
    solution for you, but I am going to get one for you in 2 weeks.
        Senator Sanders. I hope you can find us a solution.
        Secretary Shulkin. Yes.
        Senator Sanders. We like to be unique but not in that
    sense.
        Secretary Shulkin. Yes. Got it.
        Senator Sanders. We also have a situation, as I mentioned
    to you, that the Burlington Lakeside Clinic--the problem is too
    many veterans are coming in. They like the quality care that
    they are getting, yet we do not have the staff to accommodate
    them, and we want to expand that. Can you give me some
    assurances that that will happen?
        Secretary Shulkin. I do not have that detail for you yet,
    Senator. I just do not.
        Senator Sanders. Then let us talk about it.
        All right. Let me just conclude on this thing. We all know
    that you are under a lot of political pressure. We read about
    that once or twice in the papers. And there are differences of
    opinion regarding Choice. Let us have that debate. But let us
    not take money that we have fought for, to go into the VA, and
    see that taken into the Choice Program. Some of my friends want
    money for the Choice Program. Come up and argue with the
    veterans' organizations and tell them why you want it. But when
    we put money into the VA, we expect it to stay in the VA. Thank
    you.
        Chairman Isakson. Senator Rounds.

            HON. MIKE ROUNDS, U.S. SENATOR FROM SOUTH DAKOTA

        Senator Rounds. Thank you, Mr. Chairman, and I appreciate
    Senator Sanders' concern with regard to the funding and where
    it goes, where it should be spent. I also have to say, Mr.
    Chairman, I have appreciated the ability to work with you and
    everything you have done to try to find consensus on this
    Committee with regarding to some of the similar issues that
    Senator Sanders has raised, in particular, the issue of Choice.
        I was not here when Choice was created, but I understand
    the reason why it was created. Correct me if I am wrong, but it
    appears to me Choice was designed to help veterans be able to
    access services that were taking more than 30 days to get at VA
    facility, and for veterans who live more than 40 miles away
    from a VA facility. I am not sure whether or not either one of
    those two circumstances have improved to the point where we
    have either fewer people that live closer than 40 miles to a VA
    facility, and I am not sure yet that we have seen clear
    evidence that people are waiting less than 30 days to get an
    appointment. If they have, and if we have that eliminated, then
    clearly Choice should be costing us less money, not more.
        On the other hand, it seems to me that if the cost of
    Choice is greater than what we are estimating, it is because
    veterans are deciding, on a case-by-case basis, that they are
    better served by moving into a community-based location, as
    opposed to a VA facility, not that they may not prefer, in many
    cases, to use the VA services directly.
        In my State of South Dakota, if you talk to folks in the
    Sioux Falls area, they think the Sioux Falls facility is doing
    a great thing. They are very disturbed with the fact that Hot
    Springs right now is not receiving the appropriate attention it
    should as an existing VA facility.
        My question to you, sir, if you take a look at Choice right
    now, and the fact that the people who have been providing
    services to those veterans are having a terrible time getting
    paid, and in many cases it is not a matter of not providing the
    services but it is a matter of a bureaucracy, which is having a
    very tough time agreeing to make the appropriate payments. Is
    the reason why Choice is discouraging to some people because
    they are not happy with that physician who provided the
    services or the facility that provided the services, or is it
    because those same physicians have not been getting paid by the
    VA because of a bureaucracy which simply does not have the
    tools available to make the decision in a timely manner?
        Secretary Shulkin. Yes. Senator, I think you described all
    the problems correctly, which is that the Choice Program, well
    intentioned, was set up to be administratively complex. It was
    difficult for veterans to understand how to access it. It has
    been difficult to administer it. It is why we are proposing to
    take away seven different ways to pay for the same thing and to
    put it into a single set of rules and policies so that people
    can understand it, make it easier to use, and easier to pay the
    providers.
        As you know, coming from a provider background, I strongly
    believe people deserve to get paid when they deliver a service,
    and we have failed many of our providers in terms of that. We
    are making very good progress in correcting some of that now.
        So, we want to make this easier for veterans to access
    private sector services when they need it, when it is the best
    thing for them, and we want them to be able to access VA
    services when they choose and when it is easier and better for
    them to access it. That is what we are trying to build.
        Senator Rounds. I think you started working on the
    Community Care Program.
        Secretary Shulkin. Yes.
        Senator Rounds. And, you really want the Community Care
    Program to work, but would not it be fair to say that some of
    those same physicians, who you are going to be trying to
    contract with, right now are having a very difficult time being
    paid for past services already rendered? Are you going to have
    a tough time getting them convinced that the VA is going to be
    able to have a system in place to pay them appropriately? What
    are you doing about it?
        Secretary Shulkin. Well, I acknowledge that we have been
    slow and unfair to many of the providers, so we have developed
    rapid response teams to deal with those that we owe the most
    money to and those that are in high-priority areas,
    particularly rural areas. We are trying to re-establish some of
    the trust that has been lost. It is a priority for us.
        Senator Rounds. I think you are on the right track when you
    are trying to contract in advance with different organizations
    to provide those services for those veterans. I hope we can
    come to a consensus, among all of us on this Committee, that it
    still allows that veteran the ability to make the decision
    about where they want to receive their service and let them
    financially make the decision that we adhere to.
        I do not want to sit here in Washington, DC, and tell them
    what a great job the VA is doing when back home they are
    walking with their feet and going someplace else simply because
    of the availability of the services closer to home, or perhaps,
    in some cases, because, truly, as Senator Cassidy has
    suggested, they feel that there may be better services at an
    outside facility.
        I want the VA to feel--I want the VA to be able to promote
    themselves as being a center of excellence for a lot of the
    services that veterans cannot get anyplace else.
        Secretary Shulkin. Yes.
        Senator Rounds. I most certainly hope that we are on the
    same track----
        Secretary Shulkin. Yes.
        Senator Rounds [continuing]. In making sure that this is
    focused on the veteran and not on the VA.
        Secretary Shulkin. You know, Senator, I think what you are
    describing is something that I hope all of us can believe in.
    How could you argue against wanting veterans to have choice and
    the best type of care?
        I think what you are hearing from some other Members of the
    Committee are that VA, for decades, has been put in an inferior
    position, by being undercapitalized, by having bureaucratic
    rules on how to hire. So, if we can make this a more modern
    system to allow VA to be able to have the type of services we
    want, and the private sector to be available to veterans, I
    think that is the best system possible, because then the
    veteran has the choice.
        So, I think while it is difficult, and maybe I make nobody
    happy with this answer, we are trying to balance an investment
    in VA to make it a stronger system at the same time that we are
    trying to make sure that we are not keeping veterans in a
    system that is not working for them.
        Senator Rounds. Not at the cost of a veteran.
        Secretary Shulkin. Right.
        Senator Rounds. Thank you.
        Secretary Shulkin. Yes.
        Senator Rounds. Thank you, Mr. Chairman.
        Chairman Isakson. Thank you, Senator Rounds. I am going to
    continue the--we have not even called the vote, right, so I am
    going to keep going as long as I can. The next up in the
    batter's box, a baseball fan himself, Senator Brown.

               HON. SHERROD BROWN, U.S. SENATOR FROM OHIO

        Senator Brown. Thank you, Mr. Chairman. Mr. Secretary,
    welcome, and to all of you. Thanks for serving us and serving
    veterans. Before these hearings typically I call around to
    veterans hospitals, Vet Centers in Ohio and Cleveland,
    Columbus, Cincinnati, and Chillicothe and talk to directors. I
    talk to veteran service organizations, as Senator Sanders said,
    VSOs and commanders around my State, and we hear from national
    commanders in hearings. Ohio is one of the, I believe, two
    dozen States that has Veteran Service Commissions in each of
    our 88 counties, and I talk to a number of them.
        I echo the concerns that Senators Tester, Murray, and
    Sanders said. None of them--almost none of them likes the idea
    of this move toward privatization. I understand the pressure
    you are under, the accelerated pressure you are under. We hope
    that you continue to understand that veterans in this country
    do not want to see a rush toward privatization, political
    antics notwithstanding, political challenges here
    notwithstanding.
        First, thank you for the $29 million--I will be local, as
    Bernie said a minute ago--$29 million commitment to the Ohio
    Western Reserve Cemetery. Thank you for that.
        I want to talk to you about housing and about homelessness,
    as Senator Murray did. Through better policy, increased Federal
    funding we made progress. HUD's January 2017, however, point in
    time count showed 40,000 veterans still homeless. It has
    increased nationally. My question, sir, were you consulted
    before HUD decided to not ask for the additional HUD-VASH
    vouchers to meet this need in 2019 fiscal year? Did you push
    back? Do you believe the rest of VA's homelessness programs are
    enough to address the growing need?
        Secretary Shulkin. Yes. My understanding of what HUD has
    done is they have committed to keeping the same amount of
    vouchers in the system, not decreasing them, that they rotate.
    When somebody stops using a HUD voucher they have committed to
    keeping those active. So, it is actually the same number of
    vouchers that have been out there. Secretary Carson and I----
        Senator Brown. But you did not ask Carson to come up with
    additional vouchers.
        Secretary Shulkin. No. No, but Secretary Carson and I have
    talked about what we need to do to begin to start making
    additional progress, and certainly additional HUD-VASH vouchers
    would be helpful, from my point of view, but he has a lot of
    things that he is balancing in his own system. I wanted to make
    sure that there was not any decrement in commitment from HUD,
    and they have committed to the program, because it has been a
    very successful program.
        Senator Brown. Well, one of the things he is balancing is--
    and I am going to ask him about this in Banking Committee
    tomorrow--is a whole lot of family involvement, expenditure of
    money that does not go to housing. When I was just at the
    Neighborhood Housing Services in Cleveland this week. One out
    of four homes, families in Cuyahoga County, Ohio's second-
    largest right-on-the-edge counties, one out of four live in
    housing where more than half their income goes to housing.
    While this is not a HUD hearing, I understand, but what has
    happened----
        Secretary Shulkin. No, right.
        Senator Brown [continuing]. With HUD in budget cuts and
    blaming it on the budget deficit after tax cuts and then, you
    know, you, representing veterans, have to pay for part of that.
    I mean, I know that there is a better budget for veterans----
        Secretary Shulkin. Right.
        Senator Brown [continuing]. Than there is housing, but it
    certainly washes on you. I am hopeful you will use your cabinet
    meetings and discussions with Secretary Carson----
        Secretary Shulkin. Yes.
        Senator Brown [continuing]. To push for more vouchers. OK.
    Thank you for that.
        I want to talk about that day you and I were sitting next
    to each other on the runway for 3 hours in an airplane, which I
    will always smile about. We discussed a lot of things. We had a
    lot of time. One of them was Agent Orange presumptive
    eligibility----
        Secretary Shulkin. Yes.
        Senator Brown [continuing]. Categories, and I hear--I think
    we all hear often from veterans affected by toxic exposure. I
    have about five questions that I--it is too--we do not have
    enough time to go through all of them.
        Secretary Shulkin. Yes.
        Senator Brown. Let me just read the four questions. Let me
    read the questions. We will get them to you and I hope you can
    give us a good, specific answer in writing.
        First, when will you make a determination regarding Agency
    Orange presumptive conditions, including bladder cancer,
    hypothyroidism, and Parkinson's-like symptoms? I know the VA
    has done a good job at adding to those names, those illnesses,
    but they are obviously a continued challenge.
        Second, what steps has VA taken to follow congressional
    intent and provide benefits for Blue Water Navy veterans?
    Third, my understanding is a diagnosis for constrictive
    bronchiolitis is somewhat invasive. How do you make sure that
    veterans are being tested for that?
        Last, how does--and you could answer this one now--how does
    the fiscal year budget keep faith with our servicemembers and
    veterans who have been placed in harm's way and exposed to
    toxic chemicals? As we add more of those and more of them come
    forward, how does our budget deal with that?
        Secretary Shulkin. OK. I will try to do this very briefly.
    The issue of the Agent Orange presumptions is a very important
    topic. We have been studying this for a long time. As you know,
    we recently got the National Academy of Medicine study back,
    which reflects data updated through 2014. I have transmitted my
    recommendations to the Office of Management and Budget. I did
    that by November 1. We are in the process right now of going
    through this data. In fact, we met with them on Monday. They
    have asked for some additional data, to be able to work through
    the process and be able to get financial estimates for this. We
    are committed to working with OMB to get this resolved in the
    very near future.
        The Blue Water Navy, I have already said, I think our
    veterans have waited too long for this. I very much respect
    your position on this. I would like to try to find a way where
    we can resolve that issue for them, rather than make them
    continue to wait. I do not believe that there will be
    scientific data that will direct us in this, to give us a clear
    answer, like we do have on Agent Orange presumptives. The Blue
    Water Navy, those epidemiologic studies just are not available,
    from everything I can see. So, we are going to have to sit down
    and do what we think is right for these veterans.
        The bronchiolitis, I am going to have to get back to you
    further on the diagnostic conditions on that. I know how to
    diagnose bronchiolitis, but I suspect your question involves
    more in terms of a military exposure.
        And we continue--wherever we find scientific data, on your
    last question, where there is an association between an
    environmental exposure and service, wherever there is data,
    that is our job then to honor that commitment to our veterans,
    and we continue to do that. That is why we are studying burn
    pits and Gulf War veterans, and we continue to update our
    Vietnam veteran epidemiologic studies and continue to add as we
    find those scientific associations are there.
        Senator Brown. Thank you, Mr. Chairman. I think I speak for
    many on this Committee to hope that a year from now we see
    Secretary Shulkin sitting in that chair.
        Chairman Isakson. Well, I pretty openly stated that on many
    occasions in the last 2 weeks. He has done a great job and
    veterans have a champion working for them every day as we work
    through the problems we run into in swamps from time to time.
        I am going to go to Senator Boozman and then to Senator
    Manchin, and we will be finished with the Members, if everybody
    will take it within their time.
        Senator Boozman.

             HON. JOHN BOOZMAN, U.S. SENATOR FROM ARKANSAS

        Senator Boozman. Thank you, Mr. Chairman, and thank you,
    Mr. Secretary, for being here. We do appreciate your hard work
    and your team's hard work.
        In your testimony you stated that suicide prevention is the
    VA's highest clinical priority.
        Secretary Shulkin. Yes.
        Senator Boozman. You are requesting $8.6 billion for
    veteran mental health services, a 5.8 percent increase over
    last year. We are all aware of the staggering statistics, that
    no matter how much we seem to invest we simply still are
    talking about the 20 veterans that are committing suicide every
    day----
        Secretary Shulkin. Yes.
        Senator Boozman [continuing]. Which is a problem. We also
    know that only six of those are part of the VA system. In last
    year's budget, mental health funding supported treatment to
    nearly 1.7 million veterans and allowed you to hire 1,103
    mental health providers and 31 peer support specialists. Again,
    those are of great benefit to veterans within the VA system,
    but it leaves out the largest group, these veterans that are
    committing suicide that are not part of the system, which are
    so difficult.
        You talked about this in your testimony; you talked about
    the VA cannot do this alone.
        Secretary Shulkin. Yes.
        Senator Boozman. Seventy percent of veterans who die by
    suicide are not actively engaged in VA health care. You talked
    about President Trump's Executive order----
        Secretary Shulkin. Yes.
        Senator Boozman [continuing]. Directing DOD, VA, DHS to
    develop a joint action plan to establish concrete actions,
    again, to address this problem. So, $190 million more for
    veteran suicide prevention outreach, that is a great thing.
        I guess the question is, what type of outreach--what are we
    going to do with that? What type--how is this funding going to
    affect the veterans that are----
        Secretary Shulkin. Yes.
        Senator Boozman [continuing]. Outside of the reach of the
    VA?
        Secretary Shulkin. I think the best model that we are
    trying to replicate is what we did in homelessness, which is
    that we need the entire community's involvement in this. A week
    ago we had a mayor's challenge of eight cities who stood up and
    said we are going to bring a team to Washington from those
    eight cities, and commit ourselves to suicide prevention
    training with the Federal Government, SAMHSA, as well as VA and
    others in Federal Government. So, we are reaching out to
    communities.
        We have a social media outreach called #BeThere or
    BeThereForVeterans.com. Tom Hanks is our national spokesperson
    where we are trying to get the words out to communities,
    churches, not-for-profit groups, where there are veterans in
    need, to reach out to them and find them resources to help. We
    have 130 community veteran experience boards, where we bring
    together groups in the community to focus on suicide as well as
    other issues for veterans.
        So, this model of reaching out for help that the VA cannot
    do it alone I think is very powerful. I think it will have an
    impact on the 14 veterans a day that are not getting their care
    in VA. Of course, we want anybody who needs help to reach out
    to us through our Veterans Crisis Line or to come in to any of
    our facilities.
        Senator Boozman. You mentioned the hashtag VA. Are you
    developing any other things to make it easier for a veteran to
    connect, either with the VA or outside?
        Secretary Shulkin. Yes. Yes, we do. We are adding to our
    app store, you know, apps where people can connect. We now do
    texting through our Veterans Crisis Line. Of course, adding
    another 200 responders to the Veterans Crisis Line and the fact
    that we now answer the phone on a regular basis I think adds to
    that capability. Every one of our VA facilities has signed a
    Suicide Prevention Pledge, which commits the leadership team to
    doing more in terms of outreach.
        Look, this is a tough problem, and we need other people's
    ideas. We are working with technology companies about
    innovative ways to do this. But, we are open to other ideas
    because we just have to do more.
        Senator Boozman. Good. Well, we appreciate you elevating it
    to the level that you have, deservedly so, and I look forward
    to working with you.
        Secretary Shulkin. Thank you.
        Senator Boozman. I yield back, Mr. Chairman.
        Chairman Isakson. Thank you, Senator Boozman, and I want to
    publicly apologize to Mr. Fuentes, who was to testify in the
    second panel for the VSOs, but we are going to run out of time
    after Senator Manchin has his time, says his piece.
        So, I am, without objection, submitting the testimony of
    Mr. Fuentes for the record. Then, Senator Tester and I will
    meet him at an appropriate time in the next 2 weeks to
    personally go over the testimony with him together. Right, Jon?
        Senator Tester. Yes.

                   Independent Budget Representatives

      STATEMENT OF CARLOS FUENTES, NATIONAL LEGISLATIVE DIRECTOR,
     VETERANS OF FOREIGN WARS OF THE UNITED STATES; ACCOMPANIED BY
    SARAH DEAN, ASSOCIATE LEGISLATIVE DIRECTOR, PARALYZED VETERANS
       OF AMERICA; AND LeROY ACOSTA, ASSISTANT NATIONAL SERVICE
                  DIRECTOR, DISABLED AMERICAN VETERANS

        [The prepared statement of Mr. Fuentes follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Joint Statement of the Co-Authors of The Independent Budget:

                           disabled american veterans
                         paralyzed veterans of america
                            veterans of foreign wars
        Chairman Isakson, Ranking Member Tester, and Members of the
    Committee, On behalf of the co-authors of The Independent Budget (IB)--
    DAV (Disabled American Veterans), Paralyzed Veterans of America (PVA),
    and Veterans of Foreign Wars (VFW)--we are pleased to present the views
    of the IB organizations regarding the funding requirements for the
    Department of Veterans Affairs (VA) for fiscal year (FY) 2019,
    including advance appropriations for FY 2020.
        The IB's recommendations include funding for all discretionary
    programs for FY 2019 as well as advance appropriations recommendations
    for medical care accounts for FY 2020. The full budget report recently
    released by the IB addressing all aspects of discretionary funding for
    the VA can be downloaded at www. independentbudget.org. However, the
    current FY 2018 funding for VA medical care programs is particularly
    concerning because previous VA Secretary Robert McDonald admitted last
    year that the VA's FY 2018 advance appropriation request was not
    sufficient and would need significant additional resources provided
    this year.
        This insufficient level is reflected in the ``Continuing
    Appropriations Act, 2018 and Supplemental Appropriations for Disaster
    Relief Requirements Act, 2017'' as approved and amended by Congress.
    VA's medical care programs are currently funded at $71.7 billion and in
    light of the Administration's revised request of $74.7 billion for FY
    2018, submitted last year, VA has been forced to operate under a $3
    billion shortfall for nearly half this fiscal year despite increased
    demands on the system.
        The IB veterans service organizations (IBVSO) believe that the FY
    2019 VA revised budget request for VA medical programs and construction
    is similarly insufficient to meet the health care needs of ill and
    injured veterans, their families and survivors.
        The Administration's revised budget request for medical programs
    includes $74.1 billion in total discretionary spending and $1.9 billion
    in mandatory spending for FY 2019. Considering the additional $1.9
    billion that the Administration requests to replenish the Choice Act
    funds in addition to the $14.2 billion Congress has already
    appropriated under emergency designation since 2014,\1\ the total
    projected expenditure from VA for medical programs in FY 2019 is
    approximately $76 billion. The IBVSOs recommend $82.6 billion in total
    medical care funding for the VA. For FY 2020, the Administration is
    requesting $79.1 billion for medical care programs and the IB
    recommends $84.5 billion.
    ---------------------------------------------------------------------------
        \1\ $10 billion under Public Law 113-146 enacted August 7, 2014,
    $2.1 billion added August 12, 2017 under Public Law 115-46, and
    December 22, 2017 under Public Law 115-96.
    ---------------------------------------------------------------------------
        The IBVSOs share growing concerns about the massive growth in
    expenditures in community care spending in FY 2019, which includes $8.4
    billion in community care, $1.9 billion and any remaining Choice Act
    funds. We understand the need for leveraging community care to expand
    access to health care for many veterans, as discussed in the IB
    framework, but we are troubled by the virtually uncontrolled growth in
    this area of VA health care spending.
        Congress and the Administration must be sure to devote critical
    resources to expand capacity and increase staffing of the VA health
    care system, particularly for specialized services such as spinal cord
    injury or disease, blind rehabilitation, polytrauma care, mental health
    care, and to address the added health care reliance of veterans on the
    VA attributed by the Department from the Choice Act. The integrated and
    holistic nature of VA health care cannot simply be punted into the
    private sector. Simply outsourcing more care to the community without
    the same accountability of health outcomes, quality of care, and
    treatment efficacy could yield higher costs to the tax payer and will
    ultimately undermine the larger health care system on which so many
    veterans with the most catastrophic disabilities must rely.
        The Bipartisan Budget Act of 2018 (BBA) significantly raised the
    defense and non-defense discretionary spending caps in FY 2018 and FY
    2019, and the President has signed these new caps into law. In light of
    the BBA, the Administration modified its FY 2019 budget request to
    account for these new cap levels.
                                medical services
        For FY 2019, the IB recommends $53.7 billion for Medical Services.
    This recommendation includes:

            Current Services Estimate....................... $50,794,232,000
            Increase in Patient Workload....................  $1,636,092,000
            Additional Medical Care Program Costs...........  $1,230,951,000
                        --------------------------------------------------------
                        ____________________________________________________
              Total FY 2019 Medical Community Care.......... $53,661,275,000
                        ========================================================
                        ____________________________________________________

        The IBVSOs believe that significant attention must be placed on
    ensuring adequate resources are provided through the Medical Services
    account to ensure timely delivery of high quality health care. The
    budget shortfall this fiscal year is emblematic of the insufficient
    funding that has plagued, and may continue to plague, the VA health
    care system going forward. In FY 2018 (and subsequent fiscal years),
    the problem will be compounded as the VA will be shedding funds from
    its traditional Medical Services account to push more care into the
    community. With these thoughts in mind, for FY 2019, the IB recommends
    $53.7 billion for Medical Services.
        Additionally, we believe the Administration's advance appropriation
    request for Medical Services in FY 2020--$48.5 billion--is woefully
    inadequate to meet even today's demand for VA health care services. The
    Administration appears to ignore its responsibility to request a budget
    that meets its requirements particularly for VA medical care. In light
    of recent history of Congress advance appropriating based on VA's
    initial advance appropriation request, the request for FY 2020 is an
    unacceptable proposition. For FY 2020, the IBVSOs recommend Congress
    appropriate $54.7 billion as an advance appropriation for Medical
    Services.
        Our recommendations for Medical Services reflect the estimated
    impact of uncontrollable inflation on the cost to provide services to
    veterans currently using the system. We also assume a 1.1 percent
    increase for pay and benefits across the board for all VA employees in
    FY 2019, as well as 1.2 percent in the advance appropriation
    recommendation for FY 2020.
        Our medical programs funding recommendation for FY 2019 is adjusted
    in the baseline for funding within the Medical Services account based
    on VA's revised request for FY 2018. The Independent Budget believes
    this adjustment is necessary in light of the nearly $3 billion
    shortfall that the VA health care system is currently experiencing. If
    the baseline from FY 2018 is not adjusted to better reflect the true
    demand for services, we believe VA will once again face a shortfall
    this fiscal year and the next, while forcing veterans who choose VA for
    care to unnecessarily wait to receive such care.
    Additional Medical Care Program Costs:
        The Independent Budget report on funding for FY 2017 and FY 2018,
    delivered to Congress on February 9, 2016, also includes a number of
    key recommendations targeted at specific medical program funding needs
    for VA. We believe additional funding is needed to address the array of
    long-term-care issues facing VA, including the shortfall in
    institutional capacity; critical resources to address the continually
    increasing demand for life-saving Hepatitis C treatments; 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;
    and new funding necessary to improve the growing Comprehensive Family
    Caregiver program.
                Long-Term Services & Supports
        The Independent Budget recommends a modest increase of $82 million
    for FY 2019. This recommendation reflects a significant demand for
    veterans in need of Long-Term Services and Supports (LTSS) in 2017
    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. This increase in funding also reflects a
    rebalancing of available resources toward home- and community-based
    care, which will likely yield a commensurate decrease in institutional
    spending as is being achieved by states with their rebalancing of
    spending initiatives.
                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 2017 to FY
    2018 and the expected continued growth in expenditures for FY 2019.
                Women Veterans
        The Medical Services appropriation should be supplemented with $500
    million designated for women's health care programs, in addition to
    those amounts already included in the FY 2018 baseline. These funds
    would allow the Veterans Health Administration (VHA) to hire and train
    an additional 1,000 women's health providers to meet increasing demand
    for health services based on the significant growth in the number of
    women veterans coming to VA for care.
        Additional funds are needed to expand and repair VA facilities to
    meet environment of care standards and address identified privacy and
    safety issues for women patients. The new funds would also aid VHA in
    continuing its initiative for agency-wide cultural transformation to
    ensure women veterans are recognized for their military service and
    made to feel welcome at VA. Finally, additional resources are needed to
    evaluate and improve mental health and readjustment services for
    catastrophically injured or ill women veterans and wartime service-
    disabled women veterans, as well as targeted efforts to address higher
    suicide rates and homelessness among this population.
                Reproductive Services (to Include IVF)
        Congress authorized appropriations for the remainder of FY 2018 and
    FY 2019 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 2019. 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 2019.
                Emergency Care
        VA has issued regulations to begin paying for veterans who sought
    emergency care outside of the VA health care system based on the
    Richard W. Staab v. Robert A. McDonald ruling by the U.S. Court of
    Appeals for Veterans Claims.
        The requested $298 million increase in funding reflects the amounts
    VA has estimated it will need to dispose of pending and future claims.
    VA has indicated it will not retroactively pay benefits for such claims
    that were finally denied before April 8, 2016, the date of the Staab
    decision, and will only apply the new interpretation to claims pending
    on or after April 8, 2016.
                Extending Eligibility for Comprehensive Caregiver Supports
        Included in this year's IB budget recommendation is funding
    necessary to implement eligibility expansion of VA's comprehensive
    caregiver support program to severely injured veterans of all eras.
    Funding level is based on the Congressional Budget Office estimate for
    preparing the program, including increased staffing and IT needs, and
    the beginning of the first phase as reflected in our $11 million FY
    2019 recommendation.
                             medical community care
        For Medical Community Care, the IB recommends $14.8 billion for FY
    2019 and $15 billion for FY 2020.

            Current Services Estimate....................... $14,534,613,000
            Increase in Patient Workload....................    $235,009,000
                        --------------------------------------------------------
                        ____________________________________________________
              Total FY 2019 Medical Community Care.......... $14,752,153,000
                        ========================================================
                        ____________________________________________________

        Our recommended increase includes the growth in current services to
    include current obligations under the Choice program. The Choice
    program is a temporary mandatory program funded under emergency
    designation and is outside the annual budget process that governs
    discretionary spending. VA received an infusion of $2.1 billion in
    August 2017 and another $2.1 billion in December 2017 after it notified
    Congress program resources could be depleted. While increasing access
    to community care, the Choice program has in turn increased veterans'
    reliance on VA medical care.
        We also believe funding VA programs for community care with a
    discretionary and mandatory account creates unnecessary waste and
    inefficiency. The Independent Budget has advocated for moving all
    funding authorities for the Choice program (and other community care
    programs) into the discretionary accounts of the VA managed under the
    Medical and Community Care account.
                         medical support and compliance
        For Medical Support and Compliance, The Independent Budget
    recommends $6.8 billion in FY 2019. Our projected increase reflects
    growth in current services based on the impact of inflation on the FY
    2018 appropriated level. Additionally, for FY 2020 The Independent
    Budget recommends $7.4 billion for Medical Support and Compliance. This
    amount also reflects an increase in current services from the FY 2019
    advance appropriation level.
                               medical facilities
        For Medical Facilities, The Independent Budget recommends $7.3
    billion for FY 2019, which includes $1.2 billion for Non-Recurring
    Maintenance (NRM). The NRM program is VA's primary means of addressing
    its most pressing infrastructure needs as identified by Facility
    Condition Assessments (FCA). These assessments are performed at each
    facility every three years, and highlight a building's most pressing
    and mission critical repair and maintenance needs. VA's request for FY
    2019 includes $1.4 billion for NRM funding assumes an investment of
    $1.9 billion in FY 2018. While the Department has actually spent on
    average approximately $1 billion yearly for NRM, we are concerned its
    FY 2019 request includes diverting funds programmed for other
    purposes--$210.7 million from Medical Support and Compliance and $39.3
    million from the Medical Services/Medical Community Care accounts.
        For FY 2020, the IB recommends approximately $7.5 billion for
    Medical Facilities. 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 in light of its $627 million request for FY 2020.
                        medical and prosthetic research
        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.
        For VA research to maintain current service levels, the Medical and
    Prosthetic Research appropriation should be increased in FY 2019 to go
    beyond simply keeping pace with inflation. It must also make up for how
    long the continuing resolution funding level for FY 2018 has been in
    effect. 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
        IBVSOs believe Congress should expand 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;
         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;
         innovative health services strategies, such as telehealth
    and self-directed care, that lead to accessible, high-quality, cost-
    effective care for all veterans; and
         leverage the only known integrated and comprehensive
    caregiver support program in the U.S. to help inform policymakers and
    other health systems looking to support informal caregivers.
    Million Veteran Program
        The VA Research program is uniquely positioned to advance genomic
    medicine through the ``Million Veteran Program'' (MVP), an effort that
    seeks to collect genetic samples and general health information from
    one 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 620,000 veterans have enrolled in MVP, far exceeding the
    enrollment numbers of any single VA study or research program in the
    past, and it is in fact one of the largest research cohorts of its kind
    in the world. The VA estimates it currently costs around $75 to
    sequence each veteran's blood sample.
        Accordingly, the IBVSOs recommend $65 million to enable VA to begin
    processing the MVP samples collected. Congress must begin a targeted
    investment to go beyond basic, surface-level genetic information and
    perform deeper sequencing to begin reaping the benefits of this
    program.
                             construction programs
    Major Construction
        Each year VA outlines its current and future major construction
    needs in its annual Strategic Capital Investment Planning (SCIP)
    process. In its FY 2018 budget submission, VA projected it would take
    between $55 billion and $67 billion to close all current and projected
    gaps in access, utilization, and safety including activation costs.
    Currently, VA has 21 active major construction projects, which have
    been partially funded or funded through completion.
        In its FY 2018 Budget Request, VA requested and Congress intends to
    appropriate a significant reduction in funding for major construction
    projects--between $410 million and $512 million. While these funds
    would allow VA to begin construction on key projects, many other
    previously funded sites still lack the funding for completion. One of
    these projects was originally funded in FY 2007, while others were
    funded more than five years ago but no funds have been spent on the
    projects to date. Of the 21 projects on VA's partially funded VHA
    construction list, eight are seismic in nature. Seismic projects are
    critical to ensuring VA's facilities do not risk the lives of veterans
    during an earthquake or other seismic events.
        It is time for the projects that have been in limbo for years or
    that present a safety risk to veterans and employees to be put on a
    course to completion within the next five years. To accomplish this
    goal, the IBVSOs recommend that Congress appropriate $1.73 billion for
    FY 2017 to 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.
        The IBVSOs also recommend, as outlined in its Framework for
    Veterans Health Care Reform, that VA realign its SCIP process to
    include public-private partnerships and sharing agreements for all
    major construction projects to ensure future major construction needs
    are met in the most financially sound manner.
    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 average age of VA's research facilities is more than 50
    years old, and those conditions are substandard for state-of-the-art
    research.
        The IBVSOs believe that Congress must ensure VA has the resource it
    needs to continue world class research that improves the lives of
    veterans and helps recruit high-quality health care professionals to
    work at VA. To do so, Congress must designate funds to improve specific
    VA research facilities in FY 2019 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.
    Minor Construction
        In FY 2018, VA requested $372 million for minor construction
    projects. Currently, approximately 900 minor construction projects need
    funding to close all current and future year gaps within the next 10
    years. To complete all of these current and projected projects, VA will
    need to invest between $6.7 and $8.2 billion over the next decade.
        To ensure that VA funding keeps pace with all current and future
    minor construction needs, the IBVSOs recommend that Congress
    appropriate an additional $761 million for minor construction projects.
    It is important to invest heavily in minor construction because these
    are the types of projects that can be completed faster than other
    capital infrastructure projects and have a more immediate impact on
    services for veterans.
    State Veterans Home Construction Grants
        Grants for state extended-care facilities, commonly known as state
    home construction grants, are a critical element of Federal support for
    the state veterans' homes. The state veterans' 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 more than 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 22 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.
        State 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 7.
        With almost $1 billion in state home projects still in the
    pipeline, The Independent Budget recommends $200 million for the state
    home construction grant program to address a portion of the projects
    expected to be on the FY 2019 VA Priority Group 1 List when it is
    released this year.
    Grants for State Veterans Cemeteries
        The State Cemetery Grant Program allows states to expand veteran
    burial options by raising half the funds needed to build and begin
    operation of state veterans cemeteries. NCA provides the remaining
    funding for construction and operational funds, as well as cemetery
    design assistance. Funding additional projects in FY 2019 in tribal,
    rural and urban areas will provide burial options for more veterans and
    complement VA's system of national cemeteries. To fund these projects,
    Congress must appropriate $51 million.
                        office of information technology
        We are pleased to hear Secretary of Veterans Affairs David
    Shulkin's decision to have the Department adopt the same electronic
    health care record (EHR) system as the Department of Defense (DOD),
    putting an end to the saga of not being able to efficiently integrate
    military treatment records into a veteran's treatment plan. This plan
    will greatly improve the delivery of care to ill and injured veterans,
    and ensure truly integrated care as servicemembers transition from DOD
    to VA care.
        While improvements to information technology (IT) systems are an
    important part of VA's mission, the cost of doing so cannot come at the
    expense of health care veterans have earned. We call on Congress to
    balance the needs of an improved VA with the need to ensure high
    quality health care is provided to all eligible veterans. In VA's
    fiscal year (FY) 2019 budget request, VA states it will transfer $782
    million from its FY 2018 medical care and Office of IT appropriations
    to its EHR modernization program. We support an integrated VA/DOD EHR,
    but we do not endorse taking critical funds away from health care to
    pay for it.
        We call on Congress to allocate the nearly $800 million VA needs in
    FY 2018 for EHR modernization from the additional fiscal year 2018
    discretionary non-defense appropriations included in the recent
    bipartisan budget deal. Doing so would ensure VA can begin its work to
    provide a truly seamless transition for our servicemembers and our
    veterans.
                        general operating expenses (goe)
        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 modest increases in
    requested staffing to meet the rising demand for those benefits and
    backlogs of pending workload.
        The IB recommends approximately $3.104 billion for the VBA for FY
    2019, an increase of approximately $194 million over the estimated FY
    2018 appropriations level. Our recommendation includes approximately
    $92 million in additional funds in the Compensation account above
    current services, and approximately $18 million more in the VR&E
    account above current services to provide for new full-time equivalent
    employees (FTEE).
    Compensation Service Personnel
        In recent years VBA has made significant progress in reducing the
    claims backlog, which was over 610,000 claims in March 2013. Today, the
    claims backlog is roughly 79,000 claims, a decrease of 87 percent from
    its peak, and a decrease of about 18,000 claims compared to the one
    year prior. VA defines a backlogged disability claim as one pending
    over 125 days. Overall, the total pending claims workload decreased
    from about 390,000 in January 2017 to just over 320,000 claims today, a
    decrease of 18 percent in the past year. During that time, the average
    days to complete a claim dropped from 119 days last year to 103 days
    this January.
        However, the trends on accuracy have gone the other direction. In
    January 2015, the 12-month issue-level accuracy was approximately 96
    percent; today it is down to about 94.5 percent, though it has leveled
    off over the past 8 months. The 12-month claim-based accuracy
    measurement has dropped from approximately 91 percent in January 2015
    to less than 85 percent today. While it is critical to continue
    reducing the backlog and the time it takes to complete a claim, VBA
    must refocus on completing claims accurately the first time.
        In addition, VBA has a backlog of non-rating related claims, such
    as for dependency status changes, that must also be addressed in a
    timely manner. While continued advancements in the functionality of e-
    Benefits and other IT systems have been allowed veterans and their
    representatives directly make dependency changes more quickly, this
    non-rating related workload is too often given low priority status in
    Regional Offices. VBA must provide the resources and attention
    necessary to consistently complete this work in a timely manner.
        It is also critical that VBA have sufficient funding for IT
    development and maintenance. In particular, VBA must devote additional
    resources to stakeholder IT enhancements in order to allow VSOs to more
    efficiently submit and review claims they represent. This will not only
    provide better service to veterans, it will also reduce some of the
    burden and workload that would otherwise fall on VBA personnel.
        Another major driver of VBA workload is appeals processing. There
    were approximately 470,000 pending appeals of claims decisions at
    various stages between VBA and the Board of Veterans Appeals (Board),
    with approximately 350,000 requiring further processing at VBA Regional
    Offices.
        Last year, Congress approved the Veteran Appeals Improvement and
    Modernization Act (P.L. 115-55) in order to help streamline the appeals
    process and provide better, timelier decisions for veterans. In
    November, VBA began early implementation of the law through the Rapid
    Appeals Modernization Program (RAMP) pilot that invites veterans with
    pending appeals to opt into the new system through the either a the
    Higher Level Review or Supplemental Claim option. RAMP may have the
    effect of redirecting some workload from the Board back to VBA, however
    once implemented, the new law will also eliminate many of the current
    appeal processes that take place at the AOJ, such as Statements of
    Case, and Form 9 Certification.
        Over the past several years, VA has requested, and Congress has
    provided, additional funding to increase staffing at VBA to address the
    claims backlog. However, there have not been commensurate increases in
    funding to address the backlog of appeals pending inside VBA.
        For FY 2019, the IBVSOs recommend an additional 900 FTEE for VBA.
    Of those, 500 should be allocated to the Compensation Service to
    address the pending and future appeals workload; another 350 should be
    allocated to address the growing backlog of non-rating related work
    such as dependency claims; and 50 should be allocated to the Fiduciary
    program to address increased workload in recent years, particularly
    related to veterans participating in VA's Caregiver Support programs. A
    July 2015 VA Inspector General report on the Fiduciary program found
    that, ``. . . 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. . . .'' Last year the IBVSOs
    recommended 100 additional FTEE to address this problem, however, since
    VBA reallocated an additional 51 FTEE to the Fiduciary program this
    year, the IBVSOs have reduced our recommendation to 50 new FTEE for FY
    2019.
        Finally, as the Veterans Appeals Improvement and Modernization Act
    of 2017 continues to be fully implemented, including RAMP, VBA must
    develop more accurate workload, production and staffing models in order
    to accurately forecast future VBA resource requirements.
    VR&E Service Personnel
        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
    servicemembers undergoing medical separations through the Department of
    Defense and VA's joint Integrated Disability Evaluation System (IDES).
        Over the past four years, program participation has increased by an
    estimated 16.8 percent, while VR&E staffing has risen just 1.8 percent.
    VA projects program participation will increase another 3.1 percent in
    FY 2019, and it is critical that sufficient resources are provided not
    only to meet this rising workload, but also to expand capacity to meet
    the full, unconstrained demand for VR&E services.
        In 2016, Congress enacted legislation (P.L. 114-223) that included
    a provision recognizing the need to provide a sufficient client-to-
    counselor ratio to appropriately align veteran demand for VR&E
    services. Section 254 of that law authorizes the Secretary to use
    appropriated funds to ensure the ratio of veterans to Vocational
    Rehabilitation Counselors (VRC) does not exceed 125 veterans to one
    full-time employment equivalent. Unfortunately, for the past three
    years, VA has requested no new personnel for VR&E to reach this ratio.
        In order to achieve the 1:125 counselor-to-client ratio established
    by Congress, the IBVSOs estimate that VR&E will need another 143 FTEE
    in FY 2019 for a total workforce of 1,585, to manage an active caseload
    and provide support services to almost 150,000 VR&E participants. At a
    minimum, three-quarters, of the new hires should be VRCs dedicated to
    providing direct services to veterans.
                             general administration
        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 2019, the IB recommends
    approximately $355 million, an increase of more than $25 million over
    the FY 2018 estimated level. This increase primarily reflects an
    increase in current services based on the impact of uncontrollable
    inflation across all of the General Administration accounts.
                           board of veterans' appeals
        With the enactment of the Veterans Appeals Improvement and
    Modernization Act (P.L. 115-55), the Board in 2018 will be developing
    and implementing the new appeals system scheduled to begin in
    February 2019. Once fully implemented, the Board will operate five
    separate dockets concurrently, which will require new training and new
    IT functionality to manage this workload. The Board has presented its
    implementation plans to Congress and must adhere to the timelines laid
    out in order to finalize new regulations and prepare its workforce. In
    addition, sufficient IT resources must be provided to the Board to
    complete development of new workload management tools.
        Once the new appeals system is stood up in 2019, overall workload
    coming into the Board is expected to begin leveling off, or perhaps
    begin to decrease, as veterans take advantage of the expanded options
    to resolve appeals at the AOJ level. Thus, it is too early to project
    whether the Board will require more or less resources in its future
    state.
        For FY 2018, the Board is projecting that it will produce 81,000
    decisions, the highest total in the Board's history, though there will
    still remain a significant backlog of appeals in the pipeline to the
    Board. VA's budget submission for FY 2018 requested funding to increase
    FTEE levels to 1,050, continuing staffing increases in recent years to
    expand capacity and allow the Board to address both the backlog of
    legacy appeals and the transition to the new appeals system.
        For FY 2019, the IBVSOs do not recommend any additional staffing
    increases at the Board; however, it is critical that the Board complete
    the hiring and training of new personnel as rapidly as possible.
    Further, it will be critical for VA and Congress to carefully and
    regularly monitor workload, timeliness, quality and other metrics to
    ensure that the Board is and remains appropriately staffed in the
    future.
                        national cemetery administration
        The National Cemetery Administration (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 offer all veterans burial options within
    75 miles of their home, the NCA continues to expand and improve the
    national cemetery system, by adding new and/or expanded national
    cemeteries. Due to a continued increase in demand for burial space
    which is not expected to peak until 2022, NCA must continue to expand
    national cemeteries and provide more burial options for veterans. 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.
        The IBVSO strongly believe that VA national cemeteries must honor
    the service of our veterans and fully supports NCA's National Shrine
    initiative which ensure our Nation's veterans having a final resting
    place deserving of their sacrifice to our Nation. The IBVSOs also
    support NCA's Veterans Legacy Program, which helps educate America's
    youth of the history of national cemeteries and the veterans they
    honor.
        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.

        With the above considerations in mind, The Independent Budget
    recommends $311 million for FY 2019 for the Operations & Maintenance of
    the NCA.
                      administration legislative proposals
    Medical Foster Homes
        The Independent Budget supports the proposal to include in VA's
    medical benefits package the authority to pay for care only in VA-
    approved Medical Foster Homes and specifically for veterans for whom VA
    is currently required to provide more costly nursing home care. VA
    estimates cost reductions that will increase annually from $12 million
    up to nearly $90 million over five-years if Congress enacts this
    proposal.
    Treatment of Other Health Insurance
        The Independent Budget opposes the proposal to end the current
    practice of offsetting a veteran's copayment debt with reimbursements
    it receives from that veteran's health plan. This will shift the cost
    of over $50 million of care annually from the Federal Government on to
    the backs of ill and injured veterans.
        The IB also opposes the proposal to impose punitive enforcement to
    make veterans pay over $8 million annually of the care they receive
    from VA if the veteran fails to provide third-party health plan
    coverage information and any other information necessary to VA for
    billing and collecting from the third-party payer.
    Clarify Evidentiary Threshold for Ordering VA Examinations
        VA seeks to amend 38 U.S.C. Sec. 5103A(d)(2) to clarify the
    evidentiary threshold at which VA, under its duty to assist obligation
    in Sec. 5103A, is required to request a medical examination for
    compensation claims. The Independent Budget oppose this proposal which
    would raise the threshold for obtaining medical evidence and make it
    more difficult to receive favorable claims decisions. While this
    proposal estimates it would save the Federal Government over $900
    million in ten years, it does not reflect the amount of rightful
    compensation that would be lost to veterans nor does it contemplate the
    additional resources necessary to resolve an increase of appeals on
    claim denials.
    Elimination of Payment of Benefits to the Estates of Deceased Nehmer
            Class Members and to the Survivors of Certain Class Members
        VA seeks to amend 38 U.S.C. Sec. 1116 to eliminate payment of
    benefits to the estates of deceased Nehmer class members and to
    survivors of certain class members when such benefits are the result of
    presumptions of service connection established pursuant to Sec. 1116
    for diseases associated with exposure to Agent Orange and certain other
    herbicide agents. This proposed legislation would deny veterans'
    families benefits that would have otherwise been due to their deceased
    veteran family member as a result of exposure to these toxic chemicals
    while in service. The Independent Budget opposes any such legislation.
    Clarify Chemicals at Issue for Purposes of Presumptive Service
            Connection for Veterans Serving in the Republic of Vietnam
        VA seeks to amend 38 U.S.C. Sec. 1116 to define the harmful
    chemicals, specifically Tetrachlorodibenzo-p-dioxin (TCDD), used in
    herbicides by claiming those were only used in Vietnam. Herbicides with
    TCDD were used outside of Vietnam and suggesting otherwise appears to
    be an attempt to save money at the expense of disabled veterans. The
    Independent Budget strongly opposes this proposal to limit disability
    benefits based on the location of herbicide exposure.
    Amendment of Policy to Eliminate Pay Cap for Registered Nurses
        The Independent Budget supports VA's proposal to eliminate the pay
    cap for registered nurses to ensure it is able to hire and retain high-
    quality nurses.
    Legal Services for Homeless Veterans
        Legal issues are often a significant barrier to homeless
    reintegration. The Independent Budget supports the proposal to
    authorize VA to enter into agreements with entities to provide legal
    services to veterans who are homeless or at risk of becoming homeless.
    Modernizing VA: Anywhere to Everywhere VA Telehealth
        The Independent Budget supports the proposal to clarify that VA
    health care professionals have authority to practice telemedicine
    across state lines, regardless of where the veteran is located. Doing
    so would ensure veterans no longer have to travel long distances to
    receive telemedicine.
    Extend the Authority for Operations of the Manila VA Regional Office
        The Independent Budget supports extending VA's authority to operate
    the Manila VA Regional Office.
    Spousal and Dependent Inscriptions on Veteran Headstones and Markers
        The Independent Budget supports VA's proposal to inscribe veterans'
    headstones, upon request, to honor their spouses or dependent children.

        Mr. Chairman, thank you for the opportunity to submit testimony and
    to present our views regarding FY 2019 and FY 2020 advance funding
    requirements to support VA's ability to deliver benefits and services
    to veterans, their families and survivors. We would be happy to respond
    to any questions that you or Members of the Committee may have.

        Chairman Isakson. Thank you for your patience, Mr. Fuentes.
    We appreciate it very much and we appreciate the VSOs very
    much.
        Senator Manchin.

         HON. JOE MANCHIN III, U.S. SENATOR FROM WEST VIRGINIA

        Senator Manchin. Thank you, Mr. Chairman, and thank you,
    Dr. Shulkin. I wish you and your staff well, and I do support
    you.
        Secretary Shulkin. Thank you.
        Senator Manchin. With that being said, everyone here,
    Democrat and Republican, wants to do the best for the veterans.
    It is the only organization that keeps us bipartisan.
        Secretary Shulkin. Yes.
        Senator Manchin. It truly is, and I think that everybody is
    well intended here.
        With that, have you all done a survey with veterans, all
    the different veteran organization groups on them supporting
    either the veterans system that we have, the delivery of health
    care that we have, or privatizing it?
        Secretary Shulkin. Yes. Yes. The survey--first of all, we
    now do what many good businesses do. We do a just-in-time
    survey----
        Senator Manchin. Right.
        Secretary Shulkin [continuing]. On the day of service, to
    find out if there are problems or not, so we are learning real
    time.
        Senator Manchin. We have taken out the satisfaction with
    handing out opiates, though, have we not?
        Secretary Shulkin. We have. Yes, thank you for pushing on
    that issue.
        Our survey that we track the closest is whether veterans
    trust the VA. That is essentially our Dow Jones Industrial
    Index that we follow. We went from a 46 percent trust rate in
    2014, to now 70 percent. We need to do better than that, but we
    are showing that we are improving direction.
        The Veterans of Foreign Wars, actually, just did a survey,
    which I am sure Mr. Fuentes was going to talk about. It showed
    that 87 percent of their membership wants to get their care in
    the VA and are feeling good about it.
        Senator Manchin. But, what you are saying there is exactly
    correct, because I have talked to everyone in West Virginia VA
    offices, my four hospitals, and all my clinics, and every--I
    have not had a veteran saying, ``I wish I could go,'' because
    they can if they want. We can make arrangements for them. I
    just want to make sure we do not get thrown into this big
    bucket of one-size-fits-all and everything gets changed and the
    people who are----
        Secretary Shulkin. Right.
        Senator Manchin [continuing]. Really understanding the
    veterans best are the ones that should be giving the service.
        With that, you announced--you had an announcement held in
    the D.C. VA medical center last week.
        Secretary Shulkin. Yes.
        Senator Manchin. And you said the Veteran Integrated
    Service Network, which we refer to as VISNs, 1, 5, and 22 would
    be coming under the leadership of one individual.
        Secretary Shulkin. Right.
        Senator Manchin. The person is also going to be leading the
    charge on changing all the VISNs nationwide. The thing is, I am
    thrown in with Los Angeles.
        Secretary Shulkin. Yes.
        Senator Manchin. West Virginia is being thrown in with Los
    Angeles. I am saying if Los Angeles has got a problem and I
    have got a problem, I could be in real trouble.
        And that leads me to the autoclave. Do you remember the
    Clarksburg VA situation we had?
        Secretary Shulkin. Of course.
        Senator Manchin. OK. And you all--I understand we have a
    temporary, mobile autoclave there.
        Secretary Shulkin. Yes.
        Senator Manchin. It will be up and running in 2 weeks. We
    do not have any idea when a permanent autoclave is going to be
    there. We have had nothing, they said because of money problems
    with VISNs that they are just not sure. And we need to, Mr.
    Secretary----
        Secretary Shulkin. OK.
        Senator Manchin [continuing]. Just for the sake of the
    patients, for the sake of that hospital, have to have something
    permanently done there on a timely basis.
        That leads me to another story. As you remember, on Super
    Bowl Sunday, I had a conversation with Dr. Clancy about the
    fact that a senior executive, who had----
        Secretary Shulkin. Yes.
        Senator Manchin [continuing]. Not performed adequately at a
    hospital in Oregon was being transferred to Huntington, WV.
        Secretary Shulkin. Yes.
        Senator Manchin. I am grateful that she took my call, and I
    will tell you, she acted promptly. I am so appreciative. So, he
    never got to----
        Secretary Shulkin. I forgot she was watching the Super
    Bowl, knowing Dr. Clancy.
        Senator Manchin. He never got to West Virginia----
        Secretary Shulkin. Yes.
        Senator Manchin [continuing]. Which I am very grateful. I
    should have probably never had to make that call, and how that
    person would get----
        Secretary Shulkin. Right.
        Senator Manchin [continuing]. This assumed promotion after
    they had messed up. So, I received calls from veterans. They
    were very grateful. But, they are scared now. Is anybody
    watching, and how is your----
        Secretary Shulkin. Yes.
        Senator Manchin [continuing]. How does that work, and where
    did that person end up?
        Secretary Shulkin. Right. Right. First of all, we know that
    if you make a call it is important to you, so we always take
    that seriously, and we very much----
        Senator Manchin. And I know we all feel the same way.
        Secretary Shulkin. Absolutely. So, of course, we respected
    your opinion on this.
        This individual, that was leaving from Oregon, actually was
    getting a demotion. He was going from a medical center
    director, demoted down one position----
        Senator Manchin. Well, he was coming to West Virginia. We
    thought that was a promotion.
        Secretary Shulkin. I can understand that. But, he had
    agreed that he would take a lesser position in order to be
    mentored and appropriately supervised so that hopefully he
    could continue to contribute to the mission of VA. When he
    chose not to--when we had a discussion and he ended up not
    going to West Virginia, he is now working in a service delivery
    part of VA, I think it is food services, somewhere in the
    Midwest, at a level below where he was serving before.
        Senator Manchin. I know you also have more flexibility on
    sometimes just eliminating people who have not been able to get
    up to the par of service----
        Secretary Shulkin. Yes.
        Senator Manchin [continuing]. The delivery service for our
    VA.
        Secretary Shulkin. Right.
        Senator Manchin. When do you get to that? When do you
    determine----
        Secretary Shulkin. Yes.
        Senator Manchin [continuing]. This person is not going to
    get to the level that you need?
        Secretary Shulkin. Right. In our determination here, this
    was just simply a position where he was not----
        Senator Manchin. Over his head?
        Secretary Shulkin. Yes. I think that is a good way to say
    it. But, there was not an allegation of wrongdoing or any type
    of concern about his behavior. This was simply, I think you
    said it well----
        Senator Manchin. Yes.
        Secretary Shulkin [continuing]. May be a little bit over
    his head at that point.
        Senator Manchin. Sure. I want to thank all of you. I just
    would hope, on the autoclave--I am making one more pitch--we
    just----
        Secretary Shulkin. We have got it.
        Senator Manchin [continuing]. Please.
        Secretary Shulkin. Thank you.
        Senator Manchin. Thank you, sir.
        Chairman Isakson. Thank you all for your testimony. Mr.
    Fuentes, again, I apologize for the break in our session, but
    thank you for being here.
        Dr. Shulkin, thank you.
        Secretary Shulkin. Thank you.
        Chairman Isakson. The record will be kept open for 7 days
    for comments anybody wants to submit for the record. With that
    being said, we stand adjourned.
        [Whereupon, at 3:07 p.m., the Committee was adjourned.]
     Response to Posthearing Questions Submitted by Hon. Johnny Isakson to
      Hon. David J. Shulkin, M.D., Secretary, U.S. Department of Veterans
                                    Affairs
        Question 1. The fiscal year (FY) 2019 budget request for Vocational
    Rehabilitation and Employment discretionary appropriations shows a
    reduction of $59.3 million in ``Other Services'' and attributes this
    change to more favorable pricing in the Transition Assistance Program
    (TAP) contract.
        a. Please provide specific information on the total dollar amount
    of that contract; the number of individuals and services provided under
    that contract; and how dollars, individuals, and services under this
    contract have changed from FY 2017 to the expected FY 2019
    requirements.
        Response. VA's TAP contract was competitively awarded to Booz Allen
    Hamilton in September 2017 and is funded at a level that provides VA
    benefits briefings and assistance to 100 percent of Servicemembers who
    are transitioning from active duty service. The total value for the 9-
    month base year and four, 12-month options is $230,963,330. The duties
    under the contract remain the same from fiscal year (FY) 2017 and
    include the following requirements to support over 250K transitioning
    Servicemembers (TSM), their families, and caregivers achieve their
    personal post-military goals: provide Benefit Advisors to 300+ military
    installations worldwide to deliver the VA Benefits I and II briefings,
    which are offered as 4- and 2-hour courses of instruction; educate
    transitioning Servicemembers on the wide-array of VA benefits,
    services, and support tools, including (but not limited to) health
    care, education, Vocational Rehabilitation & Employment, compensation,
    life insurance, home loans, as well as an orientation to online
    benefits portals such as eBenefits and MyHealtheVet including
    facilitated healthcare registration, one-on-one assistance, warm hand-
    off to VA Healthcare for those at risk for homelessness or in crisis;
    and provide support to Military Commanders conducting Capstone events
    to ensure TSMs are ready for the military to civilian transition. For
    those TSMs who are unable to attend the in-person six-hour classroom
    session, the contract supports development of VA virtual modules housed
    on DOD's Joint Knowledge Online portal. In addition, the new award
    supports full execution of the Military Life Cycle (MLC) training,
    which embeds transition planning and preparation for meeting career-
    readiness standards throughout a Servicemember's military career.
        VRE's FY 2018 Total TAP funding level was $111 million, but based
    off prior years of execution (see below), the FY 2019 request was
    reduced to $63.3 million, a reduction of $47.5 million, and is now
    included in VBA's Office of Transition and Economic Development. The
    Veterans Opportunity to Work (VOW) to Hire Heroes Act of 2011 required
    VA and the Department of Defense (DOD) to collaborate on Military
    Lifecycle (MLC) training. This portion of TAP funding was not part of
    the prior contract as VA and DOD were not prepared to execute. In FY
    2019, VA will begin executing the MLC portion of TAP. As a need is
    identified, these funds will be resourced internally in the year of
    execution and requested in future budget submissions.

        b. Please also provide any other changes in personnel and services
    outside of the TAP contract that have also contributed to the $59.3
    million reduction in the appropriations request.
        Response. No other changes in personnel and services outside of the
    TAP contract are attributed to the overall $59.3 million decrease for
    VR&E in the FY 2019 Budget request.

        Question 2. The Department of Veterans Affairs (VA) testimony
    submitted for the hearing highlights VA's participation in the White
    House Infrastructure Initiative to explore ways to modernize and obtain
    upgrades to VA's real property portfolio. Please provide additional
    details on the proposed Infrastructure Initiative specific to VA.
        Response. VA supports the White House Infrastructure Initiative as
    it will provide authorities needed for VA to help modernize its real
    property portfolio and make much needed capital improvements to
    Veterans facilities. The specific details of the authorities are
    explained below.
    Authority to Retain Proceeds from Sales of Properties:
        Under current law, VA has limited authority to retain the proceeds
    from sales of its properties and cannot exchange its existing
    facilities for the construction of new facilities. Under current law
    United States Code (U.S.C.) 38, section 8118, the Secretary may
    transfer real property under the jurisdiction or control of the
    Secretary to another department or agency of the United States, to a
    state, or to any public or private entity, including an Indian tribe.
    The authority is limited as related proceeds need to first be re-
    appropriated and can only be used for other disposal activities, minor
    medical construction, and historic properties. This authority has been
    in place since 2004 and expires in December 2018, but due to the
    various constraints it has never been utilized by the Department.
        Authorizing expanded authority for VA to retain proceeds from sales
    of its properties and exchange its existing facilities or land for new
    construction would provide VA flexibility to better fulfill its
    mission, including making much needed capital improvements for new
    construction and renovations and for funding lease or service costs in
    a facility. Authorizing the retained funds to remain available until
    expended would allow VA to make these investments without the need for
    further authorization and appropriation.
    Exchange Property for Construction of New Facilities:
        Under current law, VA cannot exchange its existing facilities for
    the construction of new facilities. This hinders VA's ability to
    provide upgraded infrastructure for our Nation's Veterans. Authorizing
    VA to exchange its existing owned land and facilities for construction
    of new Federal facilities, provided VA identifies such facilities as a
    long-term capital requirement in its annual budget submission, would
    provide VA additional flexibility to construct new facilities for our
    Nation's Veterans.
    Pilot for VA to Exchange Land or Facilities for Lease of Space:
        Currently, VA cannot exchange its existing land or facilities for a
    lease of space in a private facility to be built on former VA land.
    This hinders the VA's ability to provide upgraded infrastructure for
    our Nation's Veterans. Creating a pilot program for up to five projects
    would allow VA to exchange existing VA land or facilities for a lease
    of space in a private facility to be built on the former VA land would
    provide additional flexibility to better meet the needs of our Nation's
    Veterans. Under this pilot, VA-occupied space would be built to the
    same commercial standards as the remainder of the facility. The space
    could be in a stand-alone building or part of another building.
        The terms of the lease arrangements executed under the pilot
    authority would include, but not be limited, to the following:

         VA would get the value of the exchanged facility in rent
    credits or rent credit plus services equal to the value of the
    exchange.
         The private sector financing (construction financing or
    loan) could not be based on the full faith and credit of the U.S.
    Government or guaranteed U.S. Government tenancy.
         The lease term, after credits, would be a maximum of 7
    years. Any future lease or lease extension after the initial term also
    would be limited to 7 years.
         The lease and service rates during the credit timeframe
    and any subsequent lease term would be at market or less.
         The explicit dollar amount of termination (e.g. one year
    of rent payments) would be required to be included in the agreement,
    and VA would budget rent and termination in accordance with Office of
    Management and Budget (OMB) Circular A-11.
         The lease would be structured to assure that VA had exit
    privileges and that VA would have an exclusive right, but not the
    obligation, to renew or extend the term of the lease.
    Increase Lease Authorization Levels:
        Current law requires VA to obtain congressional authorization for
    any lease above $1 million in annual rent. This differs from the
    General Services Administration (GSA) prospectus threshold which
    currently carries a threshold of $3.095 million and is reevaluated
    periodically. These differing thresholds require VA to seek
    authorization for more leases. Increasing the authorization threshold
    for VA major medical leases (38 U.S.C. 8104) from the current threshold
    of $1 million in annual rent to the current GSA prospectus threshold of
    $3.095 million and updating it periodically would reduce the number of
    VA authorization requests and keep VA in sync with GSA, whose
    delegation of authority VA uses to execute these medical leases. This
    would streamline VA's lease process, which could shorten the initial
    approval timeline and increase speed to market for all VA Major Leases.

        Question 3. The FY 2018 omnibus appropriations bill includes $685
    million for state veterans home construction grants, a significant
    increase over the $90 million request. The Committee has not yet
    received the FY 2018 state veterans home construction grant priority
    list. Please provide the FY 2018 priority list as well as an estimate
    of the number of projects that will be completed with the additional
    funding provided in FY18.
        Response. VA plans on funding the projects ranked from 1-52 in the
    funding order column on the far right of the priority list. Attached is
    the signed list.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Question 4. The Federal Acquisition Regulation states that if at
    all possible, orders of $3,500 or less (micro-purchases), should be
    distributed equitably among qualified suppliers that offer reasonable
    prices. Please provide VA's methodology for determining whether a
    supplier is deemed qualified and its prices are considered reasonable.
        Response. VA purchases including micro-purchases are governed by
    the FAR. Federal Acquisition Regulation (FAR 48 CFR 1), Part 13--titled
    ``Simplified Acquisition Procedures and Public Law 115-91 contain
    regulations that must be followed when making purchases. Specifically,
    Simplified Acquisition Procedures (SAP)--Methods prescribed in FAR Part
    13.3 for purchasing goods or services. SAPs are designed for relatively
    simple Government requirements, and their use is subject to designated
    micro-purchase thresholds in FAR.
        If the purchase will be made via a Government Purchase Card (GPC)
    the cardholder will refer to VA Financial Policy Volume XVI, Chapter 1B
    which deals with purchases under the micro-purchase threshold when
    using a GPC. In that chapter the cardholder will be directed to follow
    the FAR and the Simplified Acquisition Procedures.
        In addition to telling cardholders to follow the FAR, Chapter 1B
    also states ``To ensure that VA receives the best possible pricing for
    goods and services, prior to selecting a vendor, every effort should be
    made to locate the items on a Government-wide or Departmental contract.
    Open market orders are used as a last resort when a cardholder is
    unable to satisfy requirements for supplies and services using an
    existing government contract.''

        Question 5. Although there are two years left on the contract, the
    Committee understands VA is moving forward with a new national broker
    contract, expected to be awarded by the end of FY 2018. Please provide
    answers to the following:

        Response. To clarify VA's forecasted award date, VA forecasts award
    by end of Calendar Year 2018, not end of FY 2018.
        a. What are the training requirements and basic certifications that
    companies and their leasing staff must have/maintain, prior to and
    after award?
        Response. VA is continuing the process of market research to
    determine the training and certification requirements companies and
    their leasing staff will need prior to and after award. VA is using
    market research to draft the requirements documents prior to entering
    the solicitation portion of the acquisition process. All training and
    certifications requirements that companies and their leasing staff must
    have and maintain prior to and after award will be provided in the
    solicitation, which will be posted to FBO.gov during the procurement
    process for vendors to respond.

        b. What, if any, prior completed work with the Federal Government
    must a company show to be considered a qualified vendor?
        Response. VA is continuing the process of market research to
    determine any requirements for a company to show prior completed work
    with the Federal Government. VA is using market research to draft the
    requirements documents prior to entering the solicitation portion of
    the acquisition process. The final requirements will be stated in the
    solicitation, which will be posted to FBO.gov during the procurement
    process for vendors to respond.

        c. How do you conduct market research to ensure that a best value
    competition takes place?
        Response. VA conducts market research using techniques described in
    Federal Acquisition Regulations and VA Acquisition Regulations to
    inform VA's acquisition strategy. VA posted a Sources Sought notice on
    FBO.gov for vendors to respond by February 21, 2018, and conducted an
    Industry Day on February 15, 2018. Additionally, VA continues to
    conduct market research through researching Vendor Information Pages
    database for Service Disabled Veteran Owned Small Business or Veteran
    Owned Small Business concerns, as well as researching through
    Government and commercial information resources to continue to define
    requirements and promote competition.

        Question 6. VA's testimony submitted for the hearing indicates VA
    is implementing a Veterans Integrated Service Network (VISN) level gap
    coverage plan that will enable facilities to request gap coverage
    providers in areas that are struggling with staffing shortages. Please
    provide the following information:

        a. The process that will be used to request additional resources.
        Response. The'' Gap Coverage'' VISN initiative is a partnership
    with V-IMPACT (Virtual Integrated Multi-Site Patient Aligned Care
    Team), a tele-primary care hub and spoke model catering specifically to
    filling vacancies within a VISN, as well as the tele-mental health
    hubs, Clinical Pharmacy Services, and the Interim Staffing Program. A
    LEAF (LIGHT, ELECTRONIC, ACTION, FRAMEWORK) request portal has been
    developed by the Gap Coverage team, streamlining the process to request
    staffing coverage in primary care, mental health, and clinical
    pharmacy. The Symphony platform has added capabilities to allow VISN
    leaders to easily identify the location of clinical staffing capacity
    as well as where the demand is located.

        b. The approval process for those requests and a breakdown of the
    offices and individuals with oversight over the gap coverage plan.
        Response. VISN executive leadership will be responsible for
    designating staff to process and coordinate these requests with
    relevant service lines in their VISN. VISN leadership teams may
    identify staffing using the tools identified above, and currently in
    pilot use.

        c. The types of resources expected to be provided in addition to
    telehealth services such as temporary staff, additional funding, etc.
        Response. The tools above will be made available to VISNs
    requesting additional resources. Eight V-IMPACT Hubs (funded by the
    Office of Rural Health (ORH)) serving seven VISNs are currently
    operational in the Veterans Health Administration (VHA). In order to
    sustain and grow these eight hubs for FY 2019, the V-IMPACT Office has
    requested $35.1 Million from ORH. To optimally cover vacancies across
    the enterprise, VHA would benefit from VISN-level hub expansion. We
    have identified six additional VISNs that are prepared to implement V-
    IMPACT Hubs in FY 2019, if additional funding is identified.

        Question 7. The budget request indicates that an additional 5,500
    HUD-VASH vouchers would be available to veterans in late 2017 or early
    2018. How does the budget request for case management ensure a
    sufficient number of case managers to support the number of active
    vouchers?
        Response. HUD awarded 5,211 additional Department of Housing and
    Urban Development-VA Supportive Housing (HUD-VASH) vouchers in
    April 2018 from FY 2017 HUD appropriations provided for this purpose.
    VA is working with HUD to allocate another $540 million in HUD funding
    for new HUD-VASH vouchers, estimated to be 5,000 new vouchers, by
    September 30, 2018 from FY 2018 HUD funds appropriated for HUD-VASH.
    This would increase the total number of HUD-VASH vouchers awarded since
    2008 to approximately 98,000.
        VA is committed to providing case management support for all HUD-
    VASH vouchers awarded by HUD and is currently reviewing the budget
    needs to support case management services for these additional
    vouchers. The HUD-VASH program will make a request for any additional
    funding in future budgets, should it be needed, to support case
    management services for these additional vouchers.

        Question 8. The FY 2019 revised request for the Program of
    Comprehensive Assistance for Family Caregivers is nearly $180 million
    less than the advance appropriation request. What factors contributed
    to the revised request?
        Response. The FY 2019 revised request reflects an updated budget
    estimate to more accurately reflect the funding needs for FY 2019 and
    beyond. The original estimates that were provided for FY 2019 were
    based on assumptions in FY 2015 that are no longer accurate. The
    estimates derived from the assumptions that Veterans would continue to
    apply for the Program of Comprehensive Assistance for Family Caregivers
    (PCAFC) at the same rate of previous years, new admissions and
    discharges would continue at the same rate, and Veterans would remain
    in the same tier levels; however, this is not the case. The percentage
    of Veterans and caregivers applying and being approved for PCAFC
    decreased from 24 percent growth in FY 2015 to 3 percent growth in FY
    2016. Also, the number of Veterans in tier level 3 decreased 10 percent
    in FY 2016. These two factors caused the reduction of total monthly
    stipend payments. Caregiver Support Program partnered with the Office
    of Community Care to make changes to the current model. The changes
    were accounted for in the new estimates and a new trend line was
    established.
        The updated estimates also exclude the costs of care in the
    community and more accurately reflect the funding needs for VA services
    in current FY 2018 and the 5-year projection.

        Question 9. The budget request for the Veterans Benefit
    Administration includes a request for an additional 605 full-time
    equivalent (FTE) employees to assist with processing appeals and
    reducing the notice of disagreement inventory to less than 7,000.
        a. How was the number of additional FTEs determined?
        Response. The 605 FTE was based upon modeling that indicated a need
    for additional FTE to both reduce the legacy claims and appeals
    inventory and allow for timely processing of the new appeals system.

        b. By what date does VBA expect to meet this goal of reducing the
    notice of disagreement inventory?
        Response. There are several variables that could affect the legacy
    inventory and a timeline concerning when it will be reduced. Early
    estimates generated with assumptions and Rapid Appeals Modernization
    Program data indicate a reduction of the legacy inventory over the next
    3 to 5 years with the addition of the 605 FTE in FY 2019. Once the new
    legislation is implemented, the Appeals Management Office (AMO) will
    have more complete workload data, allowing AMO to more accurately track
    the reduction timeline of the legacy inventory.

        Question 10. The budget request projects that the Board of
    Veterans' Appeals' appeals inventory will increase by 31 percent by the
    end of 2019. Please explain how this request will support the Board in
    continuing to reduce its appeals inventory while also implementing the
    new system under the Appeals Improvement and Modernization Act.
        Response. The Board's pending inventory is contingent upon the rate
    of certification of appeals by Veterans Benefits Administration (VBA)
    to the Board, as well as the Board's productivity. With VBA requesting
    an additional 605 FTE in its 2019 budget, the Board expects an increase
    in its legacy inventory in FY 2019. The Board continually monitors
    workload projections and requirements and adjusts its resource
    requirements as necessary. While the Board projected to end 2018 with
    165,660 pending appeals, it is pleased to report that through March 31,
    2018, the Board's inventory was 157,656, which is 4,078 appeals below
    its projected inventory level of 161,734 for March. VBA's RAMP effort,
    allowing Veterans to withdraw their legacy appeal in order to opt into
    the new framework, will also decrease the number of appeals from the
    legacy process.
        The Board has experienced tremendous growth over the last 3 years
    and the 2019 President's Budget request of $174,748,000 would represent
    a 76-percent increase in budget authority from 2015 levels. The Board
    hired over 300 employees in FY 2017, with plans to hire another 150 new
    employees in FY 2018. With the Board currently behind on its hiring
    targets in 2018, it projects to continue its upward hiring into 2019.
    The Board plans to continue to monitor its workload measures very
    closely and develop appropriate resource requirements presented to OMB
    and Congress as it has done in the past.

        Question 11. The budget request for the Office of Mental Health and
    Suicide Prevention lists a number of goals for the 2018-2020 period.
    The goals include increasing mental health hiring, expanding
    collaborative partnerships with the private sector, and reducing
    negative perceptions of seeking mental health care.

        a. Please describe in detail how VA plans to achieve each of the
    goals for the 2018-2020 period.
        b. Please provide the funding resources needed, aggregated by
    fiscal year, to achieve these goals.

        VA Response:

    Goal 1: Reduce and eliminate death by suicide among Veterans through a
                        public health approach across communities, by
                        promoting health and well-being, and by providing
                        ready access to high quality mental health care.

        VA's comprehensive approach to suicide prevention is organized
    according to a public health prevention framework consistent with that
    developed by the National Academy of Medicine, which sorts prevention
    strategies into three levels:

        1) Universal strategies to reach all Veterans in the U.S.
        2) Selective strategies are intended for some Veterans that fall
    into subgroups that may be at increased risk for suicidal behaviors
    (e.g. women Veterans, Veterans living in rural areas, Veterans with
    substance use challenges, Veterans who have recently transitioned from
    military service).
        3) Indicated strategies are designed for the relatively few
    individual Veterans identified as having a high risk for suicidal
    behaviors, including someone who has made a suicide attempt.
        To achieve this goal for the 2018-2020 period, specific key
    activities over the next 2 years related to each of the three levels of
    prevention strategies are outlined below.

    ----------------------------------------------------------------------------------------------------------------
                      ALL                                   SOME                                 FEW
    ----------------------------------------------------------------------------------------------------------------
    Caring contact programs for             Universal screening and assessment   Veterans Crisis Line (VCL)
     transitioning Veterans                  for suicide risk
    ----------------------------------------------------------------------------------------------------------------
    Universal lethal means education and    Transition readiness assessment and  Suicide Prevention Coordinators at
     training                                warm handoffs for care               every VA facility
    ----------------------------------------------------------------------------------------------------------------
    Broad messaging campaigns to increase   #BeThere Peer Support Call and       Use of predictive modeling to
     awareness of mental health services     Outreach                             identify and reach out to Veterans
     and to reduce stigma                                                         at highest risk (REACH-VET)
    ----------------------------------------------------------------------------------------------------------------
    Education materials for all community   Training for a broad range of        Further predictive modeling efforts
     members on recognizing and responding   community health care providers on   across DOD/VA
     to signs of distress                    suicide assessment, prevention,
                                             and intervention
    ----------------------------------------------------------------------------------------------------------------
    Promote the establishment of Whole      Build and expand partnerships for    Clinical Practice Guidelines
     Health ``clinics'' that will provide    access to mental health services
     services for any Veteran who wishes     throughout the community
     to participate
    ----------------------------------------------------------------------------------------------------------------
    Promote responsible media reporting     Mental health hiring initiative      Safety planning training and
     about suicide                                                                standardization
    ----------------------------------------------------------------------------------------------------------------
    #BeThere prevention initiative and      Gatekeeper training for              Distribute gun locks or Naloxone
     public awareness and education          intermediaries who may be able to    nasal spray kits at VA facilities
     campaigns                               identify Veterans at high-risk
                                             (S.A.V.E.)
    ----------------------------------------------------------------------------------------------------------------
    Cross-sector partnerships to involve        Provide immediate and easy access to evidence-base mental health
     peers, family members, and the           services, promote a recovery model of mental health care, incorporate
     community (e.g., Johnson & Johnson,        families into Veterans' care (consistent with law), and implement
     Department of Defense, Department of                             Measurement Based Care
     Homeland Security, and various
     Veteran Service Organizations)
    ----------------------------------------------------------------------------------------------------------------
                        Build community partnerships to support and expand efforts for all levels
    ----------------------------------------------------------------------------------------------------------------
                                     Incorporate program evaluation into all efforts
    ----------------------------------------------------------------------------------------------------------------
                            Implement a National Strategy for Suicide Prevention for Veterans
    ----------------------------------------------------------------------------------------------------------------
                           Support and expand Mayor's Challenge program\1\ in all three areas
    ----------------------------------------------------------------------------------------------------------------
        Create and disseminate resources, tool kits, and technical support for local VA facilities and regions to
                      develop, implement, and evaluate a comprehensive suicide prevention strategy
    ----------------------------------------------------------------------------------------------------------------
         Lead efforts to set, promote and support a national research agenda for suicide prevention for Veterans
    ----------------------------------------------------------------------------------------------------------------
    \1\ The Mayor's challenge is a collaborative effort between Substance Abuse Mental Health Services
      Administration and VA to engage cities (mayors, government staff, and community partners) to establish and
      implement a strategic plan for the elimination of suicide in their city.

        Approximate annual expenditure, which the VHA Office of Mental
    Health and Suicide Prevention will support within its budget, is
    $34.5,000,000.

    Goal 2: Advance predictive analytics through intergovernmental and non-
                        VA partnerships to expand this groundbreaking
                        approach to addressing Veteran self-harm.

        VA will engage in multiple predictive analytics projects. First, VA
    has a partnership with Johnson & Johnson (J&J) to advance suicide
    prevention efforts, among other things, and one of the major projects
    in this partnership will be work in predictive modeling. VA and J&J
    will explore other sources of data that might meaningfully contribute
    to the fit and performance of the models predicting risk of suicidal
    behaviors and allow incorporation of predictive modeling with
    partnering healthcare systems. Second, a work group with
    representatives from both DOD and VA are developing a collaborative
    approach to predictive analytics as part of Executive Order 13822. DOD
    and VA are enhancing data streams and infrastructure to support
    advanced analytics in identifying risk of adverse outcomes associated
    with service transition. In addition, the REACH VET initiative will
    continue to address needs of those Veterans at highest statistical risk
    and predictive risk information will be used more broadly in assessing
    Veterans needs through expansion of risk based dashboards to support
    clinical decisionmaking.
        Approximate annual expenditure is $5,000,000, which the VHA Office
    of Mental Health and Suicide Prevention will support within its budget.

    Goal 3: Open a third VCL location to meet increase demands for crisis
                        intervention services.

        VCL is continuing to expand to meet the needs of Veterans and
    Servicemembers in crisis, including full implementation of the
    automatic transfer function that directly connects Veterans who call
    their local VA Medical Center (VAMC) to VCL by pressing a single digit
    (7) during the initial automated phone greeting. More than 78 percent
    of all Community Based Outpatient Clinics also offer this feature, with
    additional sites planned. In January 2018, VCL opened a third call
    center on the campus of the Eastern Kansas Health Care System in
    Topeka, Kansas. As of August 2018, the Topeka call center has 50
    trained responders. Funding of $28.5 million was allocated in FY 2018
    to cover the opening and funding is included in the FY 2019 Budget
    request to sustain its operations.

    Goal 4: Increase Veterans' access to care through increased mental
                        health staff hiring and expansion of telehealth
                        services.

        VHA Workforce Management and Consulting in partnership with the
    Office of Mental Health and Suicide Prevention have established the
    Mental Health Hiring Initiative upon the request of former VA Secretary
    David Shulkin. The Initiative seeks to add 1,000 net new providers in
    Mental Health by the end of December 2018.
         Additional providers will ensure VAMCs continue to meet
    access expectations for crises, engagement into care, and sustained
    treatment.
         Facilities with mental health staffing lower than the
    recommended minimum and that also have poor access, quality, and
    satisfaction performance are receiving additional Human Resources
    support and planning.
         Additional Educational Debt Repayment Program funding has
    been made available through existing resources.
         Telemental Health Services continue to expand through VA
    video connect and tele Hub Services.
         Tele Services continue to expand, providing rural veterans
    increased access and convenience.

    Funds are being allocated within current facility budgets.

    Goal 5: Promote the development of skills in VA providers to diagnose
                        and assess Posttraumatic Stress Disorder (PTSD) by
                        developing a computer-based training using
                        simulated virtual patient technology that will
                        allow clinicians to practice and receive
                        customizable feedback on giving CAPS-5 to a
                        lifelike virtual patient.

        The Clinician-Administered PTSD Scale (CAPS), developed at the
    National Center for PTSD more than 20 years ago, is the gold standard
    interview for diagnosing PTSD. CAPS training has traditionally relied
    on face-to-face instruction followed by practice cases with
    supervision. Live training is time intensive and demand has surpassed
    what is feasible to deliver in person, particularly since a 2013
    revision to the CAPS to align with revised diagnostic criteria by the
    American Psychiatric Association. Technology offers a more flexible,
    scalable, solution that is less expensive in the long term. In FY 2017
    the National Center created an online course to describe requirements
    for administering and scoring the CAPS-5, but the course does not help
    clinicians practice the CAPS in order to become proficient. In 2018,
    the Center plans to develop an additional CAPS-5 course that uses
    cutting-edge Responsive Virtual Human Technology to create an online
    virtual interview environment. The new course will allow clinicians to
    verbally administer the CAPS to a virtual patient who will respond
    naturalistically (like an actual patient). A virtual coach will give
    feedback during the administration, and feedback will be provided at
    the end specifying whether the learner is proficient or needs further
    practice. In FY 2018, the Center budgeted $1.5 million to build the
    course with a virtual male combat Veteran patient. In FY 2019, the
    Center is planning to add a second virtual patient, a woman Veteran who
    has experienced military sexual trauma, for a cost of $1.2 million.
    Over the next 3 years, there will be ongoing maintenance and
    enhancement costs of approximately $400,000 per year, which the Center
    will support from its recurring budget.

    Goal 6: Continue expansion of Brain Bank activities and promote
                        research to enhance the assessment and treatment of
                        PTSD through the identification of biomarkers and
                        novel treatment strategies.

        VA's National Posttraumatic Stress Disorder Brain Bank (PTSD Brain
    Bank) was formally established in 2014, thanks in part to Congressional
    support led by U.S. Senator Patrick Leahy (D-VT). It is the first and
    only facility of its kind devoted exclusively to PTSD and consists of a
    consortium of five VA medical centers as well as the Uniformed Services
    University of Health Sciences.
        The PTSD Brain Bank currently has 168 brains, including 56 PTSD
    brains, and has received commitments of more than 100 additional brains
    by the end of 2018. Donors can be either Veterans or non-Veterans.
    Because of the importance of acquiring suitable comparison tissue, the
    PTSD Brain Bank also collects tissue from donors who had no psychiatric
    illness during their lifetimes, or who suffered from a non-PTSD
    disorder such as depression.
        Donations of tissue to the PTSD Brain Bank can occur in two ways.
    In many cases, consent for donation is obtained from next-of-kin
    shortly after their loved one dies. Other tissue comes from individuals
    who enroll in advance and personally consent to have their brain tissue
    go to the PTSD Brain Bank after death (called antemortem donors). The
    advantage of acquiring commitments from antemortem donors is that
    detailed data can be collected on their medical and psychological
    histories while they are alive.
        The National Center for PTSD will continue to acquire more brain
    tissue for the Brain Bank. Acquisition of post-mortem tissue will be
    through arrangements with medical examiner networks, organ donation
    facilities, and the Duke Autopsy Program. The Center will also continue
    to recruit potential donors through strategic partnerships with
    longitudinal research registries and with organizations that support
    the Center's mission. Additionally, the Center will continue to invest
    in research staff and facilities to allow multimodal analyses of brain
    tissue. Toward the broader goal of identifying biomarkers and novel
    treatment strategies, the Center will continue to provide salary
    support for investigators engaged in this work (e.g., imaging,
    genetics, treatment development, clinical trials) and facilitate
    collaboration between investigators within and beyond the National
    Center. The Brain Bank receives a recurring budget of $1.5 million per
    year; this budget is supplemented when additional funds become
    available. Other research efforts are supported through the Center's
    recurring budget; high priority projects and infrastructure are further
    supported as additional funds become available.

    Goal 7: Expand collaborative partnerships with the private sector to
                        enhance and complement VA's efforts to improve
                        Veterans' mental health and reduce Veteran suicide.

        As a key component of our strategy to prevent Veteran suicide
    across the all, some, and few domains, VA is developing a national
    network of public and private partnerships aimed at Veterans both
    inside and outside VA's system to inform them about mental health
    resources and care that are available to them through VA and community
    resources. These partnerships allow each party to continue to provide
    services to Veterans under its own respective authority, but each
    agrees to do so in a manner that effectively complements the
    contemporaneous or coordinated delivery of each party's services,
    thereby maximizing outcomes for Veterans and their families.
        VA Suicide Prevention, program within the Office of Mental Health
    and Suicide Prevention, currently has 20 public private partnerships
    across the following sectors: Veterans Service Organizations (VSO),
    Federal Agencies, Employers, Health care Organizations (including those
    providing physical, mental health and substance abuse care), Lethal
    Means Education and Suicide Prevention, Communication and Media,
    Technology and Innovation, and Broad Sector Engagement. Over the next 2
    years, VA suicide prevention will continue to expand its public private
    partnerships portfolio in alignment with of our strategic priorities.
        Approximate annual funding is $1,500,000 to cover VA overhead and
    other costs associated with the implementation of these agreements, as
    they do not include an exchange of funds. VHA Office of Mental Health
    and Suicide Prevention will support this effort within its budget.

    Goal 8: Continue outreach efforts to increase awareness of mental
                        health services and resources, reduce negative
                        perceptions about seeking mental health care and
                        improve mental health literacy among Veterans and
                        their families and friends.

        As the largest integrated health care system in the country, VA is
    committed to providing timely access to high-quality, recovery-oriented
    mental health care that anticipates and responds to Veterans' needs,
    such as treatment for PTSD, substance use disorders, depression, and
    suicidal ideation. Recovery empowers the Veteran to take charge of his
    or her treatment and live a full and meaningful life. Encouraging more
    Veterans to seek mental health treatment by providing accurate
    information about the evidence-based care that VA provides is a primary
    goal of VA's mental health education and outreach efforts. VA's mental
    health communication materials are strategically developed and refined
    using best practices and lessons learned and are then distributed
    nationally via event and conference attendance, website and webpages,
    social media platforms, television, and radio to directly confront and
    combat common misperceptions and inaccurate information about mental
    health and suicide in this country and eliminate the stigma many
    Veterans associate with these topics and with seeking mental health
    care.
        Specific programs to increase awareness of mental health services
    and resources used to reduce negative perceptions about seeking mental
    health care and improve mental health literacy among Veterans and their
    families and friends are outlined in the table in the response to Goal
    1 above. Specifically, these include 1) outbound calls to transitioning
    servicemembers to provide information on access to peer support, VA
    mental health care, eligibility for health care and for VA benefits,
    lists of local and national resources, and names and contact
    information for immediate needs; 2) a broad communications campaign
    targeting all servicemembers, Veterans and family members with key
    messages about access to mental health care; and 3) a broad
    communications strategy to change attitudes and behaviors about suicide
    prevention, reduce the stigma associated with seeking help, and
    increase knowledge of important protective factors that reduce risk;
    and 4) active promotion of responsible media reporting on mental health
    and suicide-related issues.
        For example, VA's award-winning Make the Connection national
    outreach program was specifically developed to reduce negative
    perceptions about seeking mental health care and improve mental health
    literacy among Veterans and their families and friends. VA will
    continue this campaign to increase awareness of mental health services
    and resources. Specific activities include: developing and maintaining
    existing relationships with VSOs, Community Based Organizations, and,
    other government departments and agencies who have supported the
    campaign and distributed messaging; executing online advertising
    employing keyword, display banner, social media and video
    advertisements; producing and distributing public service
    announcements; and, promoting Veterans' stories of resilience and
    recovery across a variety of platforms.
        VA's communication/outreach work on this topic encourages more
    Veterans to reconsider their attitudes and beliefs about mental health
    and seeking mental health care and to consider VA as the best resource
    to contact should a mental health issue arise. VA is dedicated to
    increasing the number of Veterans who receive mental health care,
    preventing Veteran suicide, and ensuring every Veteran who needs
    assistance with a mental health challenge or crisis is aware of and
    educated about VA's programs and resources.
        Approximate annual expenditure is $7.5 million, which the VHA
    Office of Mental Health and Suicide Prevention will support within its
    budget.

        Question 12. The budget request for FY 2019 proposes to merge the
    Medical Services Appropriations Account with the Medical Community Care
    Appropriations Account. The proposal suggests that having two accounts
    hampers Medical Center Directors from properly managing their budgets
    and, therefore, make decisions of where to provide care when there are
    temporary personnel shortages. However, the Medical Community Care
    Appropriations Account was created to ensure a dedicated funding stream
    for community care and provide Congress with better oversight of the
    funds spent on care provided inside and outside VA.
        a. Should Congress merge the two accounts, what oversight processes
    are in place to ensure funding intended for community care is actually
    spent on community care?
        Response. The accounting structure to capture and identify care
    purchased from the community will remain in place to enable VA to
    identify and report separately on the costs of VA-provided care and for
    care from community providers and Federal partners. For example, the
    following tables, which were included in the revised FY 2019
    Congressional Justification volume, display the detail available which
    mirrors the detail currently reported for the separate Community Care
    appropriation.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        VA is proposing to establish a community care funding model that
    mirrors the successful model currently used for VA's Consolidated Mail
    Outpatient Pharmacies (CMOP). Under this model, each VAMC and the
    Deputy Undersecretary for Health for Community Care (DUSHCC) would
    determine an estimated amount of funding for community care at the
    beginning of the fiscal year, and the VAMC would preposition those
    funds with the DUSHCC to manage the purchase of and payment for care
    purchased by VA from community providers. During the course of the
    year, each VAMC and the DUSHCC would monitor the initial funding amount
    and make appropriate adjustments based on changes in actual demand as
    the fiscal year progresses.
        Oversight of VA Medical Care budget execution will occur at all
    leadership levels, culminating at the Monthly Management Review chaired
    by the Deputy Secretary. VA would also be able to provide execution
    reports, similar to the reports currently provided for Choice funding,
    to Congress if desired, to monitor the relative funding of care
    provided in VAMCs and purchased from community providers.
        Merging the Medical Services and Medical Community Care accounts,
    together with using a CMOP-like funding model for community care, would
    enhance each VAMC's ability to rapidly address the dynamic nature of
    health care management. These changes would enable VA field staff to
    respond rapidly and effectively to unanticipated changes in the health
    care environment throughout the year and will maximize VA's ability to
    focus our resources on the services Veterans most need. In short,
    rather than creating a potential incentive to determine where care is
    delivered based on funds available in the two separate appropriations,
    this proposal allows each VAMC Director to determine where they can
    effectively enhance the capability of their facilities with the
    confidence that funds will be available to accomplish that goal.

        b. What processes are currently in place to help VA Medical Center
    Directors better manage their budgets?
        Response. VHA instituted the Veterans Equitable Resource Allocation
    (VERA) Model in April 1997 to allocate funds to VISNs. VERA ensures
    that the allocation of funds is equitably distributed based on Veterans
    who use VA's health system rather than simply being based on historic
    funding patterns. The implementation of VERA aided in the
    transformation of VA's health care system from individual medical
    centers and clinics focused primarily on inpatient care to a fully
    integrated system with expanded primary and ambulatory care capability.
    VERA has been, and will continue to be, a critical component of VA's
    success in implementing the mission and vision of VHA.
        The VERA Model gives each network a ``tailored'' allocation price
    that reflects the unique characteristics of each network. For example,
    network funding is based on a combination of the number of patients,
    adjustments for regional variances in labor and contract costs, high
    cost patients, education support, research support and equipment. While
    VERA has significantly improved the allocation of the Veterans' health
    care budget, VHA will continue to review and examine the VERA
    Allocation Model to assure its continued relevance and to identify
    needed improvements.
        Since VERA was introduced in 1997, there have been nine external
    assessments of VERA. These independent reviews validated that the VERA
    methodology is meeting its objectives and the original intent of
    Congress under Public Law 104-204. The process for refining the VERA
    methodology can be internally generated by VA users of the VERA system
    or externally generated by outside VERA evaluators.
        The three reports below are used by VHA Office of Finance as part
    of the financial metrics routinely used to ensure sound financial
    performance.

         VHA Directive 1733, The Financial Quality Assurance
    Reviews, establishes the requirements for performing and conducting the
    finance quality assurance program, performing self-assessment reviews,
    and evaluating the quality of work within finance operations and
    related activities. These self-assessments are submitted to the VHA
    Office of the Chief Financial Officer (CFO) for compilation and data
    analysis.
         The financial indicators were developed to provide a means
    of evaluating performance and promoting improvements in financial
    management within VHA. This is a monthly report that includes
    indicators for potential issues that alerts leadership at medical
    centers to review.
         The Expenditure Pace Report is a VHA CFO established
    report identifying open obligations that have been identified as
    requiring action based on criteria established by the VHA CFO Finance
    staff. Medical center staffs review the information and must provide a
    justification for obligations remaining open or they are closed by the
    VHA CFO staff.

        In addition, VHA Office of Finance uses many formal and ad hoc
    reports based on the needs identified by financial statement audits,
    data analysis, investigations, improper payment reviews, external
    requests, and cost accounting audits. Below is a sampling of additional
    reports and audits routinely used within the VHA Office of Finance.

         Fund Availability Reports are monthly reports prepared by
    the VHA Office of Budget staff to identify available funds at each VAMC
    and identify obligations rates to highlight any anomalies.
         Operational Plans are prepared by each VISN identifying
    their spending plan by category and month for the year. VISNs are
    required to account for actual obligation-to-plan differences greater
    than 3 percent each month with results tracked by VHA senior leaders.
         The Medical Center Allocation System was established to
    standardize the methodology for distributing VISN-level VERA Model
    funds to medical centers within each VISN. We require VISNs to document
    and substantiate any differences with the system proposed allocations
    and identify any expected outcome changes.
         Financial Statement Audit and Office of Inspector
    Corrective Action Plans--When reviews identify deficiencies, VAMCs are
    required to provide corrective action plans on a regular basis until
    corrections are completed.
         Improper Payments Review requires that VAMCs provide
    samples of payment documents that are reviewed. Once the review and
    analysis are completed, VAMCs are required to prepare and implement
    corrective action plans to improve the payment processes.
         The Managerial Cost Accounting Office oversees audits on a
    regular basis that identify areas where costs are outliers compared to
    other facilities. They work with the VAMC until costing errors are
    corrected.

        Oversight of VAMC budget execution will continue to occur at all
    leadership levels, culminating at the Monthly Management Review chaired
    by the Deputy Secretary. VA would continue to provide periodic
    execution reports, similar to the reports currently provided for Choice
    funding, to Congress if desired, to monitor the relative funding of
    care provided in VAMCs and purchased from community providers.

        c. If Congress does not merge the two accounts, what other options
    could VA employ to more effectively manage the two accounts?
        Response. VA uses an actuarial model, the Enrollee Health Care
    Projection Model (EHCPM), to develop health care requirements for
    Veterans. EHCPM develops estimates for both community care and care
    provided in VAMCs. VA will continue to include separate estimates for
    community care funded within the Medical Services appropriation in the
    President's Budget request. VA will also continue to discretely account
    for community care obligations using the same underlying accounting
    structure currently in place for the separate Medical Community Care
    appropriation. VA is submitting a legislative proposal to allow VA to
    use a model similar to that used for the Consolidated Mail Outpatient
    Pharmacy program, where the funds will initially reside with each VAMC,
    but will be provided by the VAMC to the DUHUCC to manage during the
    year. Based on the demand for community care and the ability of the
    VAMC to provide more care in house at lower cost, the amount provided
    can be rapidly adjusted to meet changes in each VAMC's ability to
    provide care in-house.
        As stated earlier, oversight of VA Medical Care budget execution
    will occur at all leadership levels, culminating at the Monthly
    Management Review chaired by the Deputy Secretary. VA would also be
    able to provide periodic execution reports, similar to the reports
    currently provided for Choice funding, to Congress if desired, to
    monitor the relative funding of care provided in VAMCs and purchased
    from community providers.

        Question 13. The budget request for FY 2019 and the advance
    appropriation request for FY 2020 for the Medical Support and
    Compliance Appropriations Account support a total FTE of 51,097 for
    both fiscal years. This appropriations account provides funding for the
    Veterans Health Administration (VHA) Central Office; VA medical
    centers, VISN headquarters, and other activities.
        a. Please provide the total FTE for VHA Central Office; the VA
    medical centers; VISN and other field activities; and VHA National
    Consolidated Activities.
        b. For each total above, please break the totals out by General
    Schedule grade or Title 38 employees.
        Response. See the following table ``Employment Summary, Medical
    Support & Compliance, FTE by Grade, FY 2017-FY 2020.'' FY 2018-FY 2020
    assumes similar relationship as found in the FY 2017 actuals.
                Employment Summary, Medical Support & Compliance
                         FTE by Grade, FY 2017-FY 2020

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Question 14. According to the budget request, VA providers have
    difficulty in querying state Prescription Drug Monitoring Programs
    (PDMP) databases and incorporating PDMP data into a veteran's
    electronic health record. To improve the ability to check and integrate
    data from the PDMPs, VA will need to utilize technology based
    solutions.
        a. How much funding resources does VA estimate will be needed to
    make these improvements?
        Response. The first 2 years of implementing a VA Enterprise Wide
    Interface between VA's EHR (CPRS) and the State PDMPs is estimated to
    cost just over $9 million, and the first 8 years are estimated to cost
    just over $33 million. These estimates are for all of VA (Enterprise
    Wide Cost), largely due to software licensing fees (priced currently at
    around $37.50 per VA staff member query user per year).

        b. Please describe in detail the VA's plan to improve VA provider's
    interaction with PDMPs.
        Response. The multi-program office, enterprise wide endeavor to
    implement a VA Enterprise Wide Interface between VA's EHR (CPRS) and
    the State PDMPs, if approved for funding, will serve to more readily
    provide State PDMP query information within VA's EHR in real time, and
    at the point of care, for prescribing VA health care providers and
    their allied health staff and clinical delegates.
        Similar endeavors with non-VA health care organizations have led to
    dramatic increases in prescriber queries, as well as dramatic decreases
    in opioid prescriptions, as evidenced by the February 2017 report by
    the Centers For Disease Control regarding the PDMP Electronic Health
    Records Integration and Interoperability Expansion program. Moreover,
    there are a handful of private vendors that have emerged as top
    candidates for collaborating with VA for the creation and maintenance
    of such an interface, and VA Office of Information and Technology
    (OI&T) is aware of these possible vendors so that they can commission a
    very high yield and successful competitive solicitation and bid process
    for a contracted vendor (or sole source award at their discretion),
    should this project be approved for funding and resourcing
    consideration.
        Section 134 of the Mission Act will support the implementation of a
    VA Enterprise Wide Interface, as this act considers any licensed VA
    health care provider or their delegate within VA to be an authorized
    recipient or user for the purpose of querying and receiving data from
    the national network of State-based prescription drug monitoring
    programs, to support the safe and effective prescribing of controlled
    substances to covered patients. This Act further prohibits States
    (notwithstanding any general or specific provision of law, rule, or
    State regulation) from restricting access or sanctioning the licenses
    of licensed VA health care providers or their delegates when accessing
    that State's prescription drug monitoring programs.
        In summary, the Mission Act (notwithstanding any superseding law,
    rule or regulation) allows for Federal Supremacy and Team Based health
    care delivery with respect to the querying of a national network of
    State-based prescription drug monitoring programs, and the current
    marketplace supports the pursuit of a VA Enterprise Wide Interface, as
    at least one private non-VA software vendor has developed an electronic
    gateway that connects or will connect 48 State-based prescription drug
    monitoring programs as of July 2018.

        c. What factors will VA utilize to determine whether a commercial-
    off-the-shelf product could be used to improve the interaction with the
    PDMPs?
        Response. There are a few private vendors who have emerged as quite
    proficient in this realm of building interfaces between Health care
    Institution EHRs and the State PDMPs. The group convened by VA that is
    working on the National Service Request for a VA Enterprise-wide
    interface has made some pricing inquiries with one or more of these
    vendors to assist with budget forecasting for VA and for our colleagues
    in OI&T, but they have otherwise purposefully kept their distance from
    interacting more meaningfully with any particular vendor. VA sincerely
    hopes (with approval and funding for implementation) that a fair and
    unbiased solicitation could ensue to develop the VA Enterprise-wide
    interface with a contract awarded vendor (vs. a sole source
    solicitation if VA OI&T's contracting teams felt this was in VA's best
    interests and could legitimately justify such an action). To that end,
    VA has not met/discussed project-related thoughts and ideas with any
    one particular vendor or another, to avoid creating an unfair level of
    competition for any future projects that VA OI&T would send for
    solicitation.
                                     ______

      Response to Posthearing Questions Submitted by Hon. Dan Sullivan to
      Hon. David J. Shulkin, M.D., Secretary, U.S. Department of Veterans
                                    Affairs
        Question 15. Future of Community Care in Alaska: Sec. Shulkin, now
    that the VA is moving from a 2 region model (Triwest/HealthNet) toward
    the CARE concept and a 4 region model, it is my understanding that the
    Community Care (CC) office received successful bids for Regions 1-3,
    but not for Region 4--which includes Alaska. Please provide an update
    on what happened during that bid, some of the contributing factors for
    why it failed and what the VA is planning to do moving forward.
        Response. VA determined it was not in the best interest of the
    Government to make an award in CCN Region 4. Unfortunately, VA cannot
    release the specific details of what happened or contributing factors
    due to the sensitive nature of the acquisition process. The updated
    draft solicitation for CCN Region 4 was posted to FedBizOpps on Friday,
    May 25. Alaska is not included in CCN Region 4. VA understands the
    unique challenges of Alaska and is taking this opportunity to explore
    all possible options for providing community care to these Veterans.

        Question 16. Tribal Sharing Agreements: When you became Secretary,
    you promised early and thorough engagement with our Alaska Native
    healthcare partners to work out some of your differences in serving
    these rural Veterans. I understand there has been some turnover and
    that there are critical vacancies that still need to be filled, but,
    can you tell me who you currently have leading on this important issue,
    if they are able to make commitments on your behalf and what progress
    has been made on the VA's end to come to an agreement with all parties?
        Response. VA has established and continued partnerships with Alaska
    Tribal Health Programs (THPs) through signed reimbursement agreements.
    Under these agreements, VA reimburses Alaska THPs for Direct Care
    Services provided to eligible American Indian (AI)/Alaska Native (AN)
    Veterans and non-Native Veterans. In early 2017, VA and the Alaska THPs
    renewed these agreements through June 30, 2019, and VA would like to
    renew them again, if renewal is agreeable to the Alaska Tribal Health
    Programs, in the future.

                                A P P E N D I X

                                  ----------

    Prepared Statement of Ms. Jan Thompson,* President, American Defenders
                   of Bataan and Corregidor Memorial Society
    ---------------------------------------------------------------------------
        * Daughter of PhM2c Robert E. Thompson USN, USS Canopus (AS-9),
    Bilibid, Fukuoka 3B, & Mukden, POW# 2011 http://dg-adbc.org/
    ---------------------------------------------------------------------------
                       american prisoners of war of japan
                     protecting the history of world war ii

        Chairman Isakson, Ranking Member Tester, and Members of the Senate
    Veterans' Affairs Committee, Thank you for allowing us to present the
    unique concerns of veterans of World War II's Pacific Theater to
    Congress. The American Defenders of Bataan and Corregidor Memorial
    Society (ADBC-MS) represents surviving POWs of Japan, their families,
    and descendants, as well as scholars, researchers, and archivists. Our
    goal is to preserve the history of the American POW experience in the
    Pacific and to teach future generations of the POWs' sacrifice,
    courage, determination, and faith--the American spirit.
        Today, I want to speak to you about how integral the American POW
    history with Japan is to our greater understanding of how we need to
    care for and remember all our veterans. These veterans had the highest
    rate of post-conflict hospitalizations and psychiatric disorders of any
    generation. Their traumas have had multi-generational consequences.
    Their history of perseverance and patriotism speaks to the need for the
    civic remembrance of our country's veterans.
                                  our history
        April 9th will mark the 76th anniversary of the Bataan Death March.
    By March 1942, Imperial Japanese Armed Forces had destroyed the U.S.
    Asiatic Fleet and the U.S. Far East Air Force. On May 6, 1942, all the
    Philippines fell. These were the greatest military setbacks in American
    history and all happened in Asia where Imperial Japan started WWII for
    the United States.
        On December 7, 1941, Imperial Japan attacked not only Pearl Harbor
    but also the Philippine Islands, Guam, Wake Island, Howland Island,
    Midway, Malaya, Singapore, Thailand, Hong Kong and Shanghai. Three days
    later, Guam became the first American territory to fall to Japan.
    Although the aim of the December 7th surprise attack on Hawaii's Pearl
    Harbor was to destroy the U.S. Pacific Fleet in its homeport and to
    discourage U.S. action in Asia, the other strikes served as preludes to
    full-scale invasions and military occupation.
        Only in the Philippines did combined U.S.-Filipino units mount a
    prolonged resistance to Imperial Japan's invasion. They held out for
    five months. On April 9, 1942, approximately 10,000 Americans and
    70,000 Filipinos became POWs with the surrender of the Bataan
    Peninsula. April 9th also marked the beginning the 65-mile Bataan Death
    March. Thousands died and hundreds have never been accounted for from
    the March and its immediate aftermath.
        By June 1942, most of the estimated 27,000 Americans ultimately
    held as military POWs of Imperial Japan had been surrendered. If
    Filipino soldiers, who were released before the end of 1942, and
    American civilians in Japan and throughout the Pacific are also
    counted, this number is closer to 36,000. By the War's end, 40 percent
    or over 12,000 Americans had died in squalid POW camps, in the fetid
    holds of ``Hell ships,'' or as slave laborers for Japanese
    corporations.
        Surviving as a POW of Japan was the beginning of new battles: that
    of acceptance into society and living with then-nameless mental and
    physical ailments. In the first six years after the war, deaths of
    American POWs of Japan were more than twice those of the comparably-
    aged white male population. These deaths were disproportionally due to
    tuberculosis, suicides, accidents, and cirrhosis. In contrast, 1.5
    percent of Americans in Nazi POW camps died (as noted above this number
    was 40 percent as POWs of Japan) and in the first six years after
    liberation Nazi POW camp survivors deaths were one-third of those who
    survived Japanese POW camps.
                     meet the special needs of all veterans
        As the representative of veterans with the highest rate of post-
    conflict hospitalizations and psychiatric disorders, we encourage
    Congress to fight for adequate medical care, disability benefits,
    housing, and job training. We are especially supportive of the DAV's
    efforts to expand access to the VA's Program of Comprehensive
    Assistance for Family Caregivers (PCAFC) to severely disabled veterans.
        And we applaud the Senate Veterans' Affairs Committee for approving
    S. 2193, the Caring for Our Veterans Act of 2017 that extends caregiver
    benefits, which includes provisions to improve and phase in expanded
    eligibility for the VA's Comprehensive Program for family caregivers.
    We also recognize Chairman Roe for his leadership in the House to
    address this inequity and encourage him to introduce companion
    legislation.
        The VA's current rule of granting benefits only to families of
    veterans injured on or after September 11, 2001 is plainly dismissive
    of members of our Greatest Generation, those veterans of WWII.
    Surviving POWs of Japan know well that their caregivers--their
    families--were instrumental in their reintegration into their
    communities and their ability to achieve the highest levels of recovery
    and quality of life. Family caregivers are critical members of every
    veteran's health care. The American POWs of Japan and their families
    know intimately the difficulty of re-incorporation into civil society
    with little support as well as the toll PTSD and war-related illnesses
    takes on the entire family.
        My members would welcome opportunities to discuss with you their
    caregiving experiences so that Senators and Members of Congress can
    better understand the importance of expanding caregiver assistance to
    all generations of veterans.
         progress toward remembrance, reconciliation, and preservation
        An important aspect of showing respect and acceptance to returning
    servicemen and women is to ensure that they are not forgotten. This is
    the primary mission of the ADBC-MS. To this end, we have had a number
    of significant achievements in the last decade.
        In 2009, the Government of Japan, through its then-Ambassador to
    the U.S. Ichiro Fujisaki, and again in 2010, through its then-Foreign
    Minister Katsuya Okada, issued an official apology to the American POWs
    of Japan. These Cabinet-approved apologies, first established as a
    Cabinet Decision on February 6, 2009, were unprecedented. Never before
    had the Japanese Government apologized for a specific war crime, nor
    had it done so directly to the victims.
        The Japanese Government in 2010 initiated the ``Japan/POW
    Friendship Program'' that sponsors trips for American former POWs to
    visit Japan and return to the places of their imprisonment and slave
    labor. Thus far, there have been nine trips, one each in the fall of
    2010, 2011, 2012, 2013, 2014, and two in 2015, one in 2016 and 2017. In
    2016, due to the advanced age of surviving POWs, only widows and
    children participated in the program. In all, 46 former POWs, all in
    their late-80s or 90s, as well as nine widows and five children have
    made the trip to Japan. A number of the caregiver companions to the
    POWs were wives, children, and grandchildren.
        In 2017, one POW was able to participate in the trip: Henry
    Chamberlain, 95, of Washington state. He was an Army surgical
    technician in the field hospitals on Bataan. He witnessed many
    atrocities including the Japanese shelling of the hospitals and the
    gang rape of an American volunteer nurse by Japanese troops. He served
    as a medic in POW camps in the Philippines, but was sent to Japan in
    1944 to mine lead and zinc. His trip to Japan in 2017 included an
    emotional visit to the site of the mine in Sendai owned by Mitsubishi
    Materials Corporation (MMC) where he was their slave laborer. He
    graciously and tearfully accepted their apology.
        The year 2015, the 70th anniversary of the end of World War II, was
    particularly significant. Our last National Commander, the late Dr.
    Lester Tenney, was invited to witness Prime Minister Shinzo Abe's
    address to a joint meeting of Congress and to join at his celebratory
    gala dinner at the Smithsonian, where the Prime Minister offered his
    personal apology. Significantly, that day, April 29th, was also the
    reinstated birthday holiday of the wartime Emperor Hirohito. Later that
    year, Dr. Tenney was a guest of President Barack Obama at the White
    House's annual Veterans Day breakfast.
        On July 19, 2015, the Mitsubishi Materials Corporation (MMC) became
    the first, and only, Japanese company to officially apologize to those
    American POWs who were used as slave laborers to maintain war
    production. The historic apology was offered to those who were forced
    to work in four mines operated by Mitsubishi Mining, Inc., the
    predecessor company of MMC. This apology was followed by a $50,000 one-
    time donation to the National American Defenders of Bataan & Corregidor
    (ADBC) Museum, Education & Research Center in Wellsburg, West Virginia.
        The leaders of both Japan and the United States acknowledged the
    American POWs and their contribution to the steady relationship between
    two countries in their war anniversary speeches. In his September 2nd
    VJ day statement, President Obama echoed President Harry Truman and
    remembered ``those who endured unimaginable suffering as prisoners of
    war.'' Japanese Prime Minister Shinzo Abe in his war anniversary
    statement on August 14th recognized ``the former POWs who experienced
    unbearable sufferings caused by the Japanese military.''
        On May 27, 2016, President Barack Obama journeyed to Hiroshima, the
    site of the first atomic bombing, to become the first American
    president to mourn the dead and grieve with the living. There, the
    President was photographed embracing a survivor who had dedicated the
    greater part of his life to discovering the identities and honoring the
    memory of twelve American POWs who perished in Hiroshima.
        In November 2016, another former POW of Japan, Airman Dan Crowley
    of Connecticut was a guest at President Obama's Veterans Day breakfast.
    On December 28th, the ADBC-MS vice president Nancy Kragh and I were
    guests of the President to witness Prime Minister Abe's condolences at
    Pearl Harbor.
        As you can see, the American POWs of Japan are recognized as
    integral to the history of America's war in the Pacific.
                          to remember all our veterans
        The 115th U.S. Congress and the new Administration, however, appear
    to have forgotten this legacy. The ADBC-MS was dismayed last year when
    none of the 75th anniversaries of historic battles at the beginning of
    World War II was officially recognized by the whole of Congress.
    Surprisingly, December 7, 1941, ``a date that will live in infamy,''
    has not been commemorated with a Congressional resolution for decades.
    Nor have the April 9, 1942, Fall of Bataan and the start of the
    infamous Bataan Death March been remembered. This was the largest
    surrender in U.S. military history.
        Our effort last year to have resolutions pass in the House and
    Senate commemorating April 9th, H. Res. 261 and S. Res 168, which is
    National Prisoner of War Remembrance Day as well as the 75th
    anniversary of the start of the Bataan Death March found little support
    in Congress, and no resolutions were adopted. This was a curious
    oversight in a year that saw the award of the Congressional Gold Medal
    to Filipino veterans of World War II for their service and sacrifice.
    The majority of the 85,000 soldiers on the Death March were Filipino,
    all under the command of American officers.
        Part of this amnesia may be from the loss of the language of the
    War. My organization has found itself campaigning to protect the words
    that uniquely describe the POW experience with Imperial Japan. Too
    often, we find the word ``death'' removed from the historic
    designations of the Bataan ``Death'' March and the Thai-Burma ``Death''
    Railway. There is also no other label for ``Hell ships''--unmarked
    boats that held POWs in lower holds with little food, water,
    ventilation, or sanitation--other than ``Hell ship.'' The majority of
    American POWs died on these ships or from their sinking. For Allied
    POWs the number of deaths on the ``Hell ships'' was second to those who
    perished building the Thai-Burma Death Railway. These vessels of
    inhumanity were far removed from being troop transports and should
    never be dignified as such.
        This battle over language is not a theoretical problem. Over the
    course of this past year, my organization has had a prolonged and
    painful dialog regarding a memorial stone we want to install at the
    National Memorial Cemetery of the Pacific in Hawaii. This tablet is to
    explain that the 20 graves of 20 unknowns each at the Cemetery are for
    the 400 POWs killed aboard the Hell ship Enoura Maru that was bombed on
    January 9, 1945 in Takao Harbor, Formosa by American planes off the USS
    Hornet. Their remains had been retrieved in 1946 and moved to Hawaii.
        Cemetery administrators objected to the use of ``Hell ship.'' They
    felt it might offend some tourists. We were astonished that a term used
    since the Revolutionary War to describe vessels that held prisoners of
    war would be so easily dismissed. Fortunately, Under Secretary for
    Memorial Affairs of the Department of Veterans Affairs Randy Reeves
    agreed with us. My Congressman, Mike Bost, who is chair of the
    Veterans' Affairs Subcommittee on Disability Assistance and Memorial
    Affairs, encouraged his decision.
        Thus, we thank both Under Secretary Reeves and Congressman Bost for
    their help. The memorial stone will identify the Enoura Maru as a
    ``Hell ship'' and the POWs as ``human cargo.'' We hope that both men
    will be able to join us in August for the dedication ceremony in
    Hawaii.
                      success should encourage more action
        The benefits of Japan's long-awaited acts of contrition have been
    immeasurable for former POWs and their families. The visitation program
    is a great success. It has given the participating veterans a peace of
    mind and their families a connection to their fathers' challenges. For
    the Japanese people touched by these visits there is a new perspective
    on the War.
        But we are concerned for the future. There is no formal agreement
    between the U.S. and Japan to continue the visitation program, and
    Japan's Foreign Ministry must request annually a line-item in the
    budget for it. We know that despite the tens of millions of dollars
    being expended by Japan on ``Takehashi'' exchange programs in the
    United States, the funds for the POW Friendship exchanges have been
    slashed.
        This is profoundly shortsighted. And it is something that should
    worry Members of Congress. History does not end when the last witness
    dies. The proliferation of distorted history in Japan is cause enough
    to encourage greater work of historical preservation. An active,
    ongoing program of remembrance and education is what will guarantee
    that Japan does not fall into moral complacency.
        For the POW families, it is clear that a POW's captivity is not
    merely an individual trauma--the pain has spanned several generations.
    The wives, children, and siblings of those who died suffered
    irreparable loss. The families of those who survived suffered from the
    long-term physical and mental health problems caused by the former
    POW's years in cruel captivity. New research has found that trauma
    changes one's DNA, which is then passed on to the victim's progeny.
                         concerns with moving backwards
        To our dismay, there appears to be backtracking in Japan regarding
    the American POWs history. It was not until February 2016 that the 2014
    biographical film Unbroken about American Olympian and aviator Louis
    Zamperini's ordeal as a POW was shown in Japan. It was preceded by a
    venomous campaign of misinformation and slander denouncing the scenes
    of abuse and torture as untrue. In contrast, surviving POWs believed
    the film did not show the full depravity and squalor of their
    imprisonment.
        We are concerned by the 2015 designation of the sites of Japan's
    ``Meiji Industrial Revolution: Iron and Steel, Shipbuilding and Coal
    Mining'' on the UNESCO World Industrial Heritage list. In five of these
    eight new World Heritage areas there were 26 POW camps that provided
    slave labor to Japan's industrial giants including, Mitsui, Mitsubishi,
    Sumitomo, Aso Group, Ube Industries, Tokai Carbon, Nippon Coke &
    Engineering, Nippon Steel & Sumitomo Metal Corporation, Furukawa
    Company Group, and Denka. This was not noted in the application nor
    given mention today.
        Japan stated on July 4, 2015, that it ``is prepared to take
    measures that allow an understanding that there were a large number of
    Koreans and others [emphasis added] who were brought against their will
    and forced to work under harsh conditions in the 1940s at some of the
    sites.'' However, we do not know how the Japanese government interprets
    ``others,'' and U.S. Government officials have not asked. Frankly, we
    have not seen any effort toward including the history of the 13,000
    Allied and American POWs held at the UNESCO-designated sites.
        Many of the 60 companies that requested and acquired POW slave
    laborers during the War still exist and are members of Japanese
    consortia--headed by JR East and JR Central--that want to participate
    in high-speed rail and other infrastructure projects in the United
    States. Neither has acknowledged or apologized for their use of POW
    slave labor. By contrast, their French (SNCF) and German (Siemens)
    competitors have been held accountable for their behavior during WWII.
        It is also unsettling that no one has objected to the selection of
    Osaka as the host city for the G20 leaders' summit in 2019 and of
    Fukuoka as the venue for the meeting of G20 finance ministers and
    central bank Governors. The Japanese government is also promoting Osaka
    to the Bureau of International Expositions to be the site for Expo
    2025. These internationally forward-focused events contrast sharply
    with the parochial, anachronistic views of the city's leaders.
        Over the past three years, the mayors of Osaka have distinguished
    themselves as outspoken deniers of Pacific War history--even
    threatening to end the sister city relationship with San Francisco over
    the American city's refusal to accept the Osaka mayors' false and
    pernicious construction of war history.
        The G20 is composed of Argentina, Australia, Brazil, Britain,
    Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico,
    Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United
    States and the European Union. Over half of the member states had
    nationals who were forced into becoming sex slaves to Imperial Japan's
    Armed Forces. Nearly every G20 country had nationals who were held,
    abused, and died as POWs of Japan having fought as Allies against
    Japan.
        Osaka and Fukuoka were areas of the greatest number of slave labor
    camps using American and Allied POWs in mines, factories, mills, and on
    docks, many of which have become UNESCO World Industrial Heritage
    sites. It was at Fukuoka prefecture's Port of Moji where most of the
    POWs arrived in Japan. Fukuoka's international airport was originally
    an Imperial Army airfield (Mushiroda Airfield) built by British, Dutch,
    and American POWs. In Fukuoka, eight American aviators were vivisected
    at the local university. Hours after the Emperor declared the war over,
    seventeen Americans were beheaded on the slopes of the city's Mt.
    Abura.
        Today, no G20 country would plan an international conference in
    Warsaw or Gdansk given Poland's new revisionist Holocaust law. The same
    should be true for Osaka. We object to American participation in any
    conference or Expo held by a city that publicly and willfully embraces
    a discredited and dishonest historical narrative. That the Japanese
    government, in the midst of Osaka's controversy with San Francisco,
    would select such a city is both arrogant and indecent.
                              what we ask congress
        We ask Congress to encourage the Government of Japan to hold to its
    promises and responsibilities by preserving, expanding, and enhancing
    its reconciliation program toward its former American prisoners. We
    want to see the trips to Japan continued. We want Japan's Ministry of
    Foreign Affairs to publicize the program, its participants, and its
    achievements. We want to see a commitment to remembrance. We believe
    that both countries will be stronger the more we examine our shared
    history.
        We ask Congress to encourage Japan to turn its POW visitation
    program into a permanent Fund supported by Japanese government and
    industry. This ``Future Fund,'' not subject to Ministry of Finance
    yearly review, would support research, documentation, reconciliation
    programs, and people-to-people exchanges regarding Japan's history of
    forced and slave labor during WWII. Part of Fund's educational
    programming would be the creation of visual remembrances of this
    history through museums, memorials, exhibitions, film, and
    installations. Most important, the Fund would support project among all
    the arts from poetry, literature, music, dance, and drama to painting,
    drawing, film, and sculpture to tell the story to the next generation.
        We ask Congress to ask and to legislate that the U.S. State
    Department represents the interests of American veterans with Japan. It
    is only the U.S. Government that can persuade Japan to continue the
    visitation program, to create a Future Fund, and to ensure that the
    Sites of Japan's Meiji Industrial Revolution include the dark history
    of POW slave labor.
        We ask Congress to press the Japanese government to create a
    memorial at the Port of Moji, where most of the ``Hell ships'' docked
    and unloaded their sick and dying human cargo. The dock already
    features a monument to the Japanese soldiers who departed for war from
    this port. Nowhere in Moji's historic district is there mention of the
    captive men and looted riches off-loaded onto its docks. This must
    change.
                            congressional gold medal
        Most important, we ask Congress to approve an accurate and
    inclusive Congressional gold medal for the American POWs of Japan. It
    is long overdue. Over the past few years, there have been Congressional
    gold medals given to groups that included American POWs of Japan. Eight
    members of the Doolittle Raiders were POWs, at least one Nisei member
    of the Military Intelligence Service was a POW, and nearly all the
    officers of the Filipino troops who were awarded Congressional Gold
    Medals were American. Seventy-seven years after the start of the War in
    the Pacific, it is time to recognize all those who the fought the
    impossible and endured the unimaginable in the war against tyranny in
    the Pacific. Moreover, as I have described above, the Gold Medal would
    also recognize that we are the only American wartime group to have
    negotiated our own reconciliation with the enemy.
                             high price of freedom
        The American POWs of Japan and their families paid a high price for
    the freedoms we cherish. In return for their sacrifices and service,
    they ask that their government keep its moral obligation to them. They
    do not want their history ignored or exploited. What they want most is
    to have their government stand by them to ensure they will be
    remembered, that our allies respect them, and that their American
    history be preserved accurately for future generations.
        The torment of the American POWs of Japan is not just another facet
    of war history. Nor is it simply another saga of WWII suffering. It is
    a history of resilience, survival, and the human spirit, good and bad.
    And it has become an example of a path toward reconciliation and
    justice between Japan and its former victims.
        We ask Congress for support and to help our veterans in their
    unique quest for justice and remembrance. It should not be forgotten
    that our robust and successful alliance is as much a product of mutual
    interests as of blood, steel and, as Japanese Prime Minister Shinzo Abe
    said in his 2015 address to Congress, of tolerance. Today's alliance
    between Japan and the United States rests on how well we honor the
    memory of those who liberated Japan and its occupied territories.
        In the United States this history is being forgotten, and in Japan
    it is being revised. We cannot let this happen, on either side of the
    Pacific.
        It is a sacred trust of both Congress and Department of Veterans
    Affairs to continue to fight for its WWII veterans and to defend their
    history.

        Thank you for this opportunity to address your committee.