[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
       
       
       
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                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.