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



 
     MILITARY CONSTRUCTION, VETERANS AFFAIRS AND RELATED AGENCIES 
                    APPROPRIATIONS FISCAL YEAR 2018

                              ----------                              


                         THURSDAY, MAY 11, 2017
                         

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:30 a.m. in room SD-124, Dirksen 
Senate Office Building, Hon. Jerry Moran (chairman) presiding.
    Present: Senators Moran, Hoeven, Collins, Boozman, Rubio, 
Schatz, Tester, Udall, Baldwin, and Murphy.

                     DEPARTMENT OF VETERANS AFFAIRS

STATEMENT OF HON. DAVID J. SHULKIN, MD, SECRETARY


                opening statement of senator jerry moran


    Senator Moran. Welcome to our fifth subcommittee hearing of 
2017. The subcommittee will come to order and thank you all for 
being here today as we discuss the future of community care 
within the Department of Veterans Affairs.
    I am really glad to have this hearing today. I am glad to 
have our two witnesses with us. Choice is a topic of great 
interest to me and to many members of Congress and I regret 
that in my view because of antics of yesterday we were unable 
to have these two witnesses and other, including a number of 
veteran service organization representatives, testify before 
the authorizing committee. But we have a good opportunity to 
proceed with this topic which the Secretary has well prepared 
today.
    We have had hearings before in this subcommittee. I 
mentioned this is our fifth. This one, of course, is on Choice, 
but we have had hearings regarding appropriations related to 
the programs at the VA in regard to suicide and telehealth, but 
Mr. Secretary, no VA program works without the trust of our 
veterans in the VA. And in my view, in fact, you have indicated 
that and I appreciate the statements that I have read that you 
have made.
    Trust requires accountability. One of the surprising things 
to me in the past is that there were those at the Department of 
Veterans Affairs who testify that they had all the tools they 
needed in regard to accountability at the VA and I am pleased 
to see that you see that differently. You have expressed that 
desire, and I am grateful for that, and we want to know in a 
broader sense in this hearing or otherwise what tools and 
authorities you need.
    Today legislation is being introduced. The chairman of the 
authorizing committee, Senator Isakson, and the Ranking Member, 
Senator Tester, I, and Senator Rubio, but also Senators 
Baldwin, McCain, Nelson, and Sheehan are introducing the 
Department of Veterans Affairs Accountability and Whistleblower 
Protection Act. And in my view, that is a significant 
development. We will work hard to see that it becomes law with 
your help, Mr. Secretary.
    Choice has a long history. It goes back to 2014. And the 
challenges, difficulties, and perhaps crisis that was exhibited 
in a number of VA facilities across the country in regard to 
waiting lists and false waiting lists prompted, in my view, 
Congress to act to create a program with more opportunities for 
veterans to be cared for in the community and the effort was 
there to address the lack of personnel at the VA by providing 
more outside care and to reduce the waiting times for veterans 
across the country.
    And while I think Choice was an important program, is an 
important program within the VA, in too many instances it did 
not work well. And we are here to find out how we can be 
helpful in making certain that whatever occurs in the future in 
regard to programs for veterans within the community are ones 
that work well and meet the needs of veterans across the 
country--rural, urban, and suburban.
    There is a consensus that the VA should consolidate 
community care programs under one account not only to reduce 
the confusion for veterans and community providers, but to 
simplify the system for VA employees as well. Last year, this 
subcommittee created the Medicaid--excuse me--the Medical 
Community Care account as a way to identify how much the 
Department is spending in discretionary dollars on outside 
care, but having this separate account also defines how much is 
being spent in-house as well. The Veterans Choice Program is 
not currently included in this line.
    Consolidating Choice and other authorities in the VA 
community care account will provide budget transparency and a 
more streamlined approach. So it is an area in which we as 
appropriators I think can help bring accountability to the 
Choice Program and give us a clearer picture of how taxpayer 
dollars are being spent and how veterans are being cared for.
    We are here today at this point in time--your efforts to 
testify in front of the authorizing committee yesterday I think 
is an indication that you would recognize this newest 
secretary, but we are at a crossroads. You arrive at a time in 
which Choice Community Programs need significant and dramatic 
thorough attention and improvement. The Choice Program has been 
temporarily extended, presumably until about January based upon 
the funding levels that are available. And that gives Congress 
and the Department time to work together to determine the 
future of VA healthcare and what is in the best interest of our 
veterans--healthcare that is designed to serve veterans and not 
serve the VA.
    So, Mr. Secretary, my questions in a broad sense are what 
are your plans and what resources are necessary for you to 
complete those plans? And what legislation is required to be 
able to implement those plans?
    I and at least three other members of this subcommittee 
wear two hats. In this setting, we are appropriators charged 
with prioritizing the funding for your Department, and in the 
other setting, as authorizers to provider the legislative 
authority that you need--that you believe you need and that 
Congress agrees to provide. I hope you will take the 
opportunity this morning to talk about those needs, the 
constraints you have financially, and I think in that regard 
you may tell us something that is very significant in regard to 
the dollars that you think will be required to meet your goals, 
as well as the constraints that you have statutorily.
    Mr. Secretary, you were kind enough to meet with me 
yesterday. I want to compliment you and express my gratitude 
for that. In my time in the United States Senate, the hour that 
we spent together yesterday is the most useful conversation I 
have had with the leadership of the VA in the six and a half 
years that I have been in the Senate. And I am very grateful 
for that conversation and the beginning of a solid relationship 
with you and the Department. Your openness here today can be 
very helpful to all of us, and I welcome that as we try to 
figure out how to truly reform the VA to benefit those it is 
intended to serve.
    [The information follows:]
               Prepared Statement of Senator Jerry Moran
    Welcome to our fifth subcommittee hearing of 2017. The subcommittee 
will come to order. Good morning. Thank you all for being here today as 
we discuss the future of community care within the Department of 
Veterans Affairs. I'm really glad to have this hearing today. I'm glad 
to have our two witnesses with us. Choice is a topic of great interest 
to me and to many members of congress. And I regret, in my view, 
because of the antics of yesterday we were unable to have these two 
witnesses and others, including a number of Veteran Service 
Organizations, testify before the authorizing committee. But, we have a 
good opportunity to proceed with this topic, which the secretary has 
prepared today.
    We've had hearings before in this subcommittee--I mentioned this is 
our fifth--this one, of course, is on Choice, but we've had hearings 
regarding appropriations related to the programs at the VA in regard to 
suicide and telehealth. But, Mr. Secretary, no VA program works without 
the trust of our veterans in the VA . . . In fact, you've indicated 
that and I appreciate the statements that I've read that you made--
trust requires accountability. One of the surprising things to me in 
the past is that there were those at the Department of Veterans Affairs 
who testified that they had all the tools they needed in regard to 
accountability at the VA, and I'm pleased to see that you see that 
differently.
    You have expressed that desire and I'm grateful for that, and we 
want to know in a broader sense--in this hearing or otherwise--what 
tools and authorities you need. Today, legislation is being introduced. 
The chairman of the authorizing committee, Senator Isakson, and the 
ranking member, Senator Tester, I and Senator Rubio, but also Senators 
Baldwin, McCain, Nelson and Shaheen are introducing the Department of 
Veterans Affairs Accountability and Whistleblower Protection Act. And 
in my view, that's a significant development and we'll work hard to see 
that it becomes law, with your help, Mr. Secretary.
    Choice has a long history, it goes back to 2014, and the 
challenges, difficulties and perhaps crisis that was exhibited at a 
number of VA facilities across the country in regard to waiting lists 
and false waiting lists prompted, in my view, Congress to act to create 
a program with more opportunities for veterans to be cared for in the 
community. And the effort was there to address a lack of personnel at 
the VA to provide more outside care and to reduce the waiting times of 
veterans across the country.
    While I think Choice is an important program within the VA, in too 
many instances it did not work well. And we're here to find out how we 
can be helpful in making certain that whatever occurs in the future in 
regard to programs for veterans within the community are ones that work 
well and meet the needs of veterans across the country--rural, urban 
and suburban.
    There is a consensus that the VA should consolidate community care 
programs under one account. Not only to reduce the confusion for 
veterans and community providers, but to simplify the system for VA 
employees as well. Last year, this subcommittee created the Medical 
Community Care account as a way to identify how much the Department is 
spending in discretionary dollars on outside care, but having this 
separate account also defines how much is being spent in-house as well. 
The Veterans Choice Program is not currently included in this line.
    Consolidating Choice and other authorities in a VA community care 
account will provide budget transparency and a more streamlined 
approach. So, it's an area in which we as appropriators I think can 
help bring accountability to the Choice Program and give us a clearer 
picture of how taxpayer dollars are being spent and how veterans are 
being cared for.
    We are here today at this point in time--your efforts to testify in 
front of the authorizing committee I think is an indication that you 
would recognize this--we're at a crossroads. You arrive at a time in 
which Choice community programs need significant, dramatic, thorough 
attention and improvement. The Choice Program has been temporarily 
extended presumably until about January based upon the funding levels 
that are available. And that gives Congress and the Department time to 
work together to determine the future of VA healthcare and what is in 
the best interest of our veterans--healthcare that is designed to serve 
veterans and not serve the VA.
    So, Mr. Secretary, my questions in a broad sense are, what are your 
plans? What resources are necessary for you to complete those plans? 
And what legislation is required to be able to implement those plans?
    I and at least three other members of this subcommittee wear two 
hats--in this setting, we're appropriators charged with prioritizing 
the funding of your Department and the other setting as authorizers to 
provide legislative authority that you believe you need and that 
Congress agrees to provide. I hope you'll take the opportunity this 
morning to talk about the needs and constraints you have financially. 
And, I think in that regard you may tell us that it's significant in 
regard to the dollars that you think will be required to meet your 
goals, as well as the constraints you have statutorily.
    Mr. Secretary, you were kind enough to meet with me yesterday. I 
want to compliment you and express my gratitude for that. In my time in 
the United States Senate, the hour you spent with me yesterday was the 
most useful conversation I've had with the leadership of the VA. I'm 
very grateful for that conversation, and the beginning of a solid 
conversation with you and the Department. Your openness here today can 
be very helpful to all of us, and I welcome that as we try to figure 
out how to truly reform the VA to benefit those it is intended to 
serve.

    Senator Moran. I would turn to the Ranking Member for his 
opening statement.

               OPENING STATEMENT OF SENATOR BRIAN SCHATZ

    Senator Schatz. Thank you, Mr. Chairman, and thank you to 
Secretary Shulkin and Dr. Yehia for appearing before this 
subcommittee to discuss the future of Choice and the future of 
VA's Community Care Program.
    In the interest of time, I will submit my more extensive 
comments into the record, but I would like to make a couple of 
points. The first is on access.
    The Choice Program has expanded care to many veterans who 
otherwise would not have had it, but I think we can all agree 
that the program has had its rough spots and that it has 
confused and frustrated veterans and providers alike.
    Dr. Shulkin, I would like to hear from you not only about 
how VA will restructure and streamline Choice, but how it will 
integrate into a more modern VA. Community care is an important 
tool, but it will never replace VA's ability to meet the unique 
needs of our veterans through its network of medical 
facilities, clinics, and state of the art telehealth 
facilities.
    The second point is about cost. Whatever program secedes 
Choice, it has to be developed in a fiscally responsible 
manner. Today, Choice is paid for through direct spending and 
all other community care is paid for with discretionary 
spending. This has created execution problems for both programs 
and both of you. The obvious solution is to collapse all 
funding into a single source, but if that single source is 
discretionary funding, we have a very serious problem.
    The VA spends in between $10 and $12 billion total on 
providing healthcare through Choice and care in the community, 
but about $3 billion of that is funded with direct spending. We 
do not budget for it on the discretionary side. Unfortunately, 
Congress continues to operate under strict budget caps that 
limit non-defense spending to an arbitrary level. Already 
annual increases in VA healthcare are squeezing other agencies, 
including other veteran's programs. Adding the Choice Program 
cost to the mix would bust the current caps.
    We need to address this issue now, especially as Congress 
moves to develop a long-term Choice 2.0 bill that the Chairman 
mentioned. I hope my colleagues on this subcommittee will 
approach this with the urgency that it demands.
    Again, thank you, Secretary Shulkin and Dr. Yehia, for 
coming here today. I look forward to the testimony.
    Senator Moran. I thank the Senator from Hawaii and I would 
like to introduce our panel. The Honorable David J. Shulkin, 
MD, is the Secretary of the Department of Veterans Affairs and 
he is accompanied by Dr. Yehia, MD--excuse me--Deputy Director. 
I got your name correctly and could not pronounce the word 
deputy--Deputy under Secretary for Health and Community Care at 
the Department of Veterans Affairs.
    The subcommittee welcomes you both and we recognize the 
Secretary.

               SUMMARY STATEMENT OF HON. DAVID J. SHULKIN

    Dr. Shulkin. Good morning, Mr. Chairman. Thank you for your 
comments. I too found our time together very useful and thank 
you for your membership. And Ranking Member Schatz, thanks for 
your comments. I agree with you about the fiscal responsibility 
issues that we have to address. Senator Murphy, Senator 
Baldwin, good morning.
    I really appreciate the opportunity to spend some time with 
the committee talking about the Veterans Choice Program. I 
think it is very critical.
    My overarching concern is that veterans have access to high 
quality care when they need it, regardless of whether that is 
in the VA facility or in the community. And our goal is to 
deliver a program that is easy to understand, simple to 
administer, and meets veteran's needs. We have made some recent 
progress, but in my view, we are not moving fast enough. 
Incremental change just is not going to work and now is the 
time to modernize the VA because it is the right thing to do 
for our veterans.
    Mr. Chairman, let me first thank you for helping enact the 
Veterans Choice Improvement Act. Thanks to the bill's sponsors, 
and Senator Tester being one of them, but other committee 
cosponsors, and Senator McCain, we were able to get this bill 
through. The Choice Improvement Act removed the expiration date 
for Veterans Choice and it enabled us to be able to spend the 
full $10 billion that originally Congress had authorized for 
community care. It also allowed VA to be the primary 
coordinator of benefits that enabled a better exchange of 
information between VA and community providers and took the 
veterans out of the middle of these payment issues.
    These improvements will drive increases in veterans 
receiving community care and reduce the administrative burdens 
for veterans, community providers, and VA staff. We are already 
seeing increased demand as veterans opt for Choice more now 
than ever before. We have issued 35 percent more authorizations 
for Choice in the first quarter of fiscal year of 2017 as 
compared to the first quarter in 2016. Thus far in fiscal year 
2017, we have approximately 18,000 more Choice authorized 
appointments per business day than in fiscal year 2016, but we 
have a lot more work to do and we need your help in modernizing 
and consolidating community care. Now is the time to get this 
right for our veterans.
    A redesigned community care program will not only improve 
access and provide convenience for veterans, but it can 
transform how VA delivers care even within the VA. A new 
redesigned consolidated community care program must have 
several key components.
    First, a new system must focus on clinical need and quality 
of care, not on wait times and geography. A new system should 
not rely on administrative roles and bureaucracy, but allow 
providers and veterans to make decisions. A new system not only 
allows veterans to seek care in the community when VA does not 
offer the service, but it also offers choice when quality of 
care is below community standards. A new system must also make 
it easier for veterans to access urgent care clinics to ensure 
that when they have urgent needs they can be addressed when and 
where it is convenient for them.
    A new program must maintain a high performing integrated 
network that includes VA, Federal partners such as the 
Department of Defense, academic affiliates, and community 
providers. We need to ensure that VA is partnering with the 
best providers across the country in order to take the best 
care of our veterans. A new program must assist in care 
coordination for those veterans using multiple providers. We 
need to ensure that veterans do not experience gaps in care 
between VA and community providers. And finally, a new program 
must apply industry standards for quality, patient 
satisfaction, payment models, and healthcare outcomes. By doing 
so, veterans can make informed decisions about their care and 
VA will have the tools to compete within communities.
    Where VA excels, we want to make sure that we strengthen 
the services and programs further to allow VA to continue that 
excellence. Veterans need VA. For that reason, community care 
access must be guided by principles based on clinical need and 
quality. VA needs the support of Congress to level the playing 
field with industry by making it easier to modernize 
infrastructure, leverage IT technologies, hire the best talent, 
and operation more efficiently. We want to work with Congress 
to develop this needed legislation. We need to do it by the end 
of this fiscal year to ensure that we can implement regulatory 
and other changes necessary to implement the new vision.
    With your help, we will chart a bold new direction for VA 
that increases access to community care and modernizes VA. We 
must also ensure we have a new system that is financially 
sustainable. It is simply unrealistic to expect our funding to 
continue growing at a rate it has over the past decade. I want 
to be clear. I am committed to strengthening the VA system and 
will not support efforts to privatize this much needed and 
essential system.
    Veterans will be the ultimate judge of our success. With 
your help, we can continue to improve veterans care in both VA 
and in the community. This new system is being designed and 
developed for better results in veteran's experience. We 
anticipate working with you and our VSO partners to further 
define this approach.
    Thank you and I look forward to any questions that you may 
have.
    [The statement follows:]
            Prepared Statement of Hon. Dr. David J. Shulkin
    Good morning, Chairman Moran, Ranking Member Schatz, and 
distinguished Members of the Subcommittee. Thank you for the 
opportunity to discuss the Department of Veterans Affairs (VA) 
Community Care Program, including the Veterans Choice Program, which 
allows for Veterans to access the care they need and deserve. I am 
accompanied today by Dr. Baligh Yehia, Deputy Under Secretary for 
Health for Community Care in the Veterans Health Administration (VHA).
                   veterans choice program extension
    We are extremely grateful for the recent efforts of Congress that 
resulted in the enactment of the ``Veterans Choice Program Improvement 
Act,'' which removed the expiration date for the Veterans Choice 
Program and allows the Department to use the full $10 billion 
originally allocated to care for Veterans in the community. It also 
made VA the primary coordinator of benefits and allowed for better 
health information exchange between VA and community providers. These 
changes will lead to more Veterans getting community care and will 
reduce the administrative burdens of using the program for Veterans, 
community providers and Federal partners, and VA staff. While progress 
has been made, there is still more work to be done to serve our 
nation's Veterans.
                      future of va community care
    VA needs a different approach to ensure we can fully care for 
Veterans. We need your help in modernizing and consolidating community 
care. Veterans deserve better, and now is the time to get this right. 
We believe that a redesigned community care program will not only 
improve access and provider greater convenience for Veterans, but will 
also transform how VA delivers care within our facilities.
    This redesigned program must have several key elements. First, we 
need to move from a system where eligibility for community care is 
based on wait times and geography to one focused on clinical need and 
quality of care. This will give Veterans real choice in getting the 
care they need and ensure it is of the highest quality. At a minimum, 
where VA does not offer a service, Veterans will have the choice to 
receive care in their communities. Second, we need to make it easier 
for Veterans to access urgent care when they need it. This will ensure 
that Veterans will always have a choice and pathway to get their urgent 
needs addressed. Third, the new program must maintain a high performing 
integrated network that includes VA, Federal partners, academic 
affiliates, and community providers. We need to ensure that VA is 
partnering with the best providers across the country to take care of 
our nation's Veterans. Fourth, it must assist in coordination of care 
for Veterans served by multiple providers. Finally, we must apply 
industry standards for quality, patient satisfaction, payment models, 
healthcare outcomes, and exchange of health information. By doing so, 
Veterans can make informed decisions about their care and VA can have 
the tools to better compete within communities.
    We believe redesigning community care will result in a strong VA 
that can meet the special needs of our Veteran population. Where VA 
excels, we want to make sure that the tools exist to continue 
performing well in those areas. Veterans need the VA and for that 
reason, community care access must be guided by principles based on 
clinical need and quality. VA needs the support of Congress to level 
the playing field with industry by making it easier to modernize our 
infrastructure, leverage IT technologies, hire the best talent, and 
operate more like the private sector. A good example is management of 
our real property and infrastructure portfolio, where numerous barriers 
prevent VA from being agile in response to Veterans healthcare needs in 
different geographic areas. We want to work with Congress to discuss 
the best ways to bring common sense to this area.
    VA also needs tools to improve our recruitment, hiring and 
retention of the best professionals to serve our Veterans. These tools 
could include improvements to hiring and pay authorities to better 
address vacancies in our medical center and VISN director positions, to 
help at least in part address disparities with the private sector. As a 
final example, there is Federal law that requires VA facilities to have 
a smoking area. We all know the impact on health from smoking, and 
smoking cessation is the most immediate and dramatic step a Veteran, or 
anyone, can take to improve their health. VA strongly supports H.R. 
1662 which would repeal this requirement. Action in these areas will 
make VA more modern, and be an enabler for our dedicated workforce to 
be more effective in their service to Veterans.
    In order to improve care for our Veterans, we want to work with 
Congress to develop needed legislation for the future of VA community 
care. This legislation would have to be enacted by the end of the 
fiscal year to ensure that VA has sufficient time to proceed with 
regulations and other changes needed to implement the new vision. If we 
can accomplish this together, we would set VA on a bold new direction 
to not only increase access to community care but also transform the VA 
itself. We are committed to moving care into the community where it 
makes sense for the Veteran. Finally, I want to make sure that everyone 
understands that making better use of community care must be done in a 
fiscally responsible way. We cannot continue to grow our funding in the 
same way we have done over this past decade. And, I want to be clear 
that I am committed to strengthening the VA system and will not support 
efforts to privatize this much needed and essential system. The 
ultimate judge of our success will be our Veterans. With your help, we 
can continue to improve Veteran's care, in both VA and the community.
    Thank you and we look forward to your questions.

    Senator Moran. Mr. Secretary, thank you very much.
    My understanding is that in your testimony and our 
conversation that the goal is to create a criteria about access 
to healthcare by veterans and that access also includes a 
quality component. Your goal, as you state, is how do we get 
veterans the best care possible I assume in the most timely 
fashion needed as a requirement of their medical care. And that 
makes sense to me, but I would like to hear a little bit more 
about how you would consider in your plan distance. And 
distance could be time limits as well.
    It is 40 miles and 30 days has been the defining feature of 
Choice, but if the quality care is available in the VA but yet 
a veteran still lives miles or hours from that care, how do you 
account for the care for that veteran?
    Dr. Shulkin. Well, certainly distance has to be part of the 
equation, but under our current system of Choice, veterans that 
live within 40 miles of a primary care provider do not get the 
ability to access the Choice Program in the way that they 
should. And we want to essentially design a system that works 
for all veterans, no matter where they live. So if you are 
going to do that, you are going to prioritize clinical need and 
you are going to allow the doctor and the veteran to be more 
involved in making the decision.
    If a veteran does not drive, they are going to need access 
to community care if they do not have any way of getting to a 
VA, even if they live ten miles away from a VA. So we actually 
want to design a system that works for the veterans and not 
based upon administrative or bureaucratic rules.
    Senator Moran. So who would make that decision within the 
VA? You talk about the physician and the provider and the 
veteran. So the veteran who lives 200 miles from the VA 
hospital, the Dole Hospital in Wichita, the VA in Wichita 
provides the service and it is high quality and a veteran who 
lives close by would be admitted to that program and receive 
that care and treatment at the VA, but instead the veteran 
lives in my hometown of Hays and has more than two hours of a 
drive to get to Wichita. How does that veteran learn what his 
options--his or her options--are?
    Dr. Shulkin. We are looking to design a system that 
actually already works pretty well in the private sector. The 
way that these decisions are made all across America today are 
in the exam rooms between doctors and patients. And we do not 
want to put a third party in the middle of that. We believe 
that doctors and patients should be making these decisions. So 
let us go through a few examples.
    If the service is not offered by the VA, then the veteran 
needs to get that care in the community. If the service is a 
simple service like getting a lab test or an x-ray or a flu 
shot, we do not believe that the veterans should have to travel 
a long distance to be able to get that. They could get that in 
the community. If the service is not performing at the standard 
in the community, at the quality level in the community, we 
believe the veterans should have the choice to get the care in 
the community.
    But where the VA is providing a good quality service and 
the VA could meet the timeliness and the quality standards 
available, we do believe that is the purpose of the VA and that 
the veteran and the doctor would most likely come to the 
conclusion that the best place for the veteran is at the VA.
    Senator Moran. Dr. Yehia, you talk about a clinical needs 
decision tree in evaluating what care stays within the VA and 
what care goes outside the VA, so the question here is one of 
eligibility. Who is eligible to have what care delivered 
outside the VA? And if you would put some meat on those bones, 
that would be great.
    Dr. Yehia. Sure. Really, it goes back to the veteran and 
the provider relationship. Healthcare is local and healthcare 
is about relationship, so we want to empower the veteran and 
their provider to make the most informed decisions. We will be 
able to help them by being transparent about what we think 
those guiding principles are based on availability of service, 
access to quality of care, and also feasibility, which takes 
into account distance and geography and how simple the service 
is.
    So I think by allowing them to know exactly what are the 
guiding principles or ideas to use, both to the patient and the 
doctor, they can come up to make the right decision that works 
best for that patient.
    Senator Moran. I appreciate both of your responses to my 
questions. I think this is one of the most difficult issues as 
we look at community care is eligibility and how we define that 
is a significant factor in whether or not community care is 
going to work and whether or not veterans are going to--we are 
going to achieve our goal of having veterans access the care 
that they need in a timely, quality fashion.
    Senator from Hawaii.
    Senator Schatz. Thank you, Mr. Chairman.
    Following up on the quality measures, can you flesh out 
what those quality measures are going to be and after you are 
finished explaining that, I have a concern that has to do with 
communicating to the individual veteran sort of what part of 
the labyrinth they are in because even if this makes perfect 
clinical sense and is a best practice that has been adopted 
across the private sector, it will be new. The distance 
requirement is now well established. People feel comfortable 
with it. And I get that it is somewhat arbitrary and there is a 
better way to do it, but you are going to have to explain this 
to the veteran's community in such a way that it does not feel 
like less and does not feel increasingly confusing. So if you 
could talk to the quality measures first and then how you are 
going to go about explaining this so that it does not cause 
additional confusion.
    Dr. Shulkin. Right. Well, these are excellent points and 
any successful program is going to have to take into account 
exactly what you have asked us about.
    We have done a lot of listening to our veterans. Probably 
Dr. Yehia and I have traveled around the country in town halls 
and in other places to listen. And we know that even though we 
were clear about 40 miles and 30 days, we designed a system 
that was overly burdensome, complex, and that veterans did not 
like. So I hope you would agree staying with the status quo is 
not where we want to go. So together, we need to design a 
system that is easy to understand, easy to use, and meets their 
needs.
    The way that we are planning on doing that is by actually 
allowing patients and doctors to be much more involved in 
making these decisions and taking the roles and the third 
parties out of the way. So some of this we are not going to be 
as rigid. We are going to allow people to make decisions as 
human beings, make decisions based on particular circumstances.
    As Dr. Yehia said, we are going to have some guiding 
principles. But we are going to essentially go back to what we 
know has always worked--doctors and patients having discussions 
about how they can best help each other.
    Senator Schatz. But the challenge in any closed healthcare 
system, right?
    Dr. Shulkin. Yes.
    Senator Schatz. Actually, in any healthcare system is the 
tension between the doctor-patient relation, the clinician-
patient relationship, and what kind of care can be ordered at 
what cost, and then somebody trying to figure out how all of 
this adds up. So I guess my question is how does that change, 
which makes sense at the healthcare level, at the human level, 
impact our appropriations needs and our planning for the next 
several fiscal years?
    Dr. Shulkin. Well, I think that, first of all, we do 
already know that the best model out there is to get the 
administrators out of the way and let these be clinical 
decisions, so we are going to work towards that. We are also 
going to add some new patient protections in there so that we 
are going to allow veterans an opportunity where there are 
those tensions and it may not turn out that the right decision 
was made for the veteran, that they now have an ability to seek 
an appeal to that process. So we actually want to build in a 
safety net for our veterans to make sure that we are doing the 
right thing.
    In terms of the resources necessary and what we need, I 
think your opening comments, Senator, were very appropriate. We 
understand that there are limits to the amount of resources 
that we can and should be asking for. And we do seek this 
redesigned system to meet veteran's needs better and to have an 
easier to use system by taking our resources, putting them more 
into clinical care and less into administrative care. And we 
will do this within the President's budget. We will not be 
seeking additional funding beyond what the President has 
proposed to be able to implement this program.
    Senator Schatz. Is it fair to say though that the cost is--
that you do have some sort of upside risk, right, in terms of 
the costs you incur? Because you are establishing a standard 
that is almost exclusively clinical in nature and so the bean 
counters cannot tell you what is and is not allowed and where 
care can be provided?
    And I guess what I am saying, I am not trying to tell you 
not to do this.
    Dr. Shulkin. Yes.
    Senator Schatz. I am just saying that I have this concern 
that you are going to come back and say that turns out to have 
costed more than----
    Dr. Shulkin. Right.
    Senator Schatz [continuing]. Than we had anticipated. And I 
would rather fund it on the front end.
    Dr. Shulkin. Right.
    Senator Schatz. So that we are not in this hand-to-mouth 
situation.
    Dr. Shulkin. I appreciate that. Part of the responsibility 
of running this system is to be fiscally responsible to 
taxpayers and we are trying to own that accountability. Our 
risk associated with costs and increased resource needs, and we 
have seen this historically in the VA, that VA has not as 
proactively asked for the need--the financial resources that it 
has needed.
    Our risk is not associated, in our opinion, with the change 
in this model by giving veterans more choice. Our risk is 
associated with the growing complexity and age of our veteran 
population and the growing reliance that we are seeing, 
veterans choosing to come to VA more. And we are seeing that. 
So our models of projection into future years show the risk on 
the use of the VA system by veterans and the complexity of 
their care, not on these changes in the Choice model.
    Senator Schatz. So it is mostly more veterans and more 
elderly veterans?
    Dr. Shulkin. Yes. That is right.
    Senator Schatz. Thank you.
    Senator Moran. Senator Tester.
    Senator Tester. Thank you, Mr. Chairman, Ranking Member, 
and thank you guys for being here.
    I do not really know where to start, so we will just start. 
Do you have an assessment on the productivity on the VA 
hospitals across the country, which ones are good, which ones 
are mediocre, which ones are bad?
    Dr. Shulkin. Productivity usually refers to the efficiency.
    Senator Tester. Yeah.
    Dr. Shulkin. But we have measures on efficiency----
    Senator Tester. Okay.
    Dr. Shulkin [continuing]. On service levels, and quality.
    Senator Tester. So you know which ones bear some watching 
right now today?
    Dr. Shulkin. Absolutely.
    Senator Tester. And what are you doing about that? Are you 
getting them staffed up? What are you doing?
    Dr. Shulkin. Well, first of all, we are requiring action 
plans from the ones that are performing at low levels.
    Senator Tester. Okay. Right. Okay.
    Dr. Shulkin. We are sending teams and special attention to 
those that we consider on the critical watch list.
    Senator Tester. Okay. To build those back up to get them to 
top performing?
    Dr. Shulkin. Yes.
    Senator Tester. So we talked on the phone the other day and 
I just kind of want to go over this because one of the things 
that I am very, very concerned about is that a lot of these 
places that do not perform quality care, at least from my 
perspective, are because of staffing shortages. That is my 
opinion. I could be wrong on that, but that is my opinion.
    And I think that if we walk in and say to a veteran, ``You 
are not getting quality care, so we are going to ship you to 
the private sector,'' without addressing those challenges that 
those healthcare facilities have, that would be a huge mistake 
long term and it will, in fact, privatize the VA over a number 
of years. Would you agree with that?
    Dr. Shulkin. I would agree with that.
    Senator Tester. Okay. So it is not your intention to just 
say, ``Look, you are an underperforming facility, so we are 
going to pump you into the private sector,'' without dealing 
with those facilities in a very proactive manner, getting them 
up to snuff?
    Dr. Shulkin. My pure intent is to build the VA system to be 
providing the very best quality care. And that means staffing 
them at the appropriate level and modernizing the system. In 
the meantime, while we do that, I do not want veterans feeding 
stuff in a system that is not meeting their needs.
    Senator Tester. Got you. All right, I got you.
    Dr. Shulkin. Yeah.
    Senator Tester. And so the other question I have as one of 
my concerns is that, as I have told you before and I think you 
know, that folks get through the door like the VA healthcare, 
at least in Montana. I can say that. I can also tell you that 
if we do not deal with the staffing shortages in Montana in a 
very proactive way, they are not going to feel that way into 
the future. But I can also tell you that putting them in the 
private sector without a market assessment on what that private 
sector can do in that community is going to be a huge problem 
for the VA because you are taking responsibility for that 
civilian care now.
    And so the question is do you guys have a market 
assessment? Do you plan on doing a market assessment? Where is 
it at in the process?
    Dr. Shulkin. Yeah. I am going to have Dr. Yehia talk about 
that, because we do, but I just want to reinforce why I think 
you are on target here.
    Senator Tester. Yes.
    Dr. Shulkin. We have seen with the Choice Program that 
simply sending veterans out into the community is not always 
the answer, that the wait times are often longer in the 
community, and sometimes the quality is not necessarily there. 
That is why part of our plan is to develop what we call a high-
performance network of community providers that are meeting our 
stands. But why don't you talk about the market assessment?
    Dr. Yehia. Sure. Absolutely, we are engaging in market 
assessments now. We are at the stage of piloting it in three 
locations, but the idea is to do it across all the markets in 
the United States because we need to know over the coming years 
what is the demand for healthcare, what can we produce, and 
what does a community offer that we could potentially buy. And 
those market assessments will then feed a lot of important 
information. How do we design the right networks? How do we 
look at our infrastructure? How do we develop our staffing 
needs. So it is critical that they occur and that is what we 
are doing.
    Senator Tester. Okay. It looks to me like if you are--I 
mean, there is a lot of markets, man. I mean, it is--and when 
are we talking about putting this into play?
    Dr. Shulkin. So one of the issues is that probably about 15 
years ago we created what you now know as VISN, the Veteran 
Integrated Network Services.
    Senator Tester. Yes. Right. No, I got you.
    Dr. Shulkin. And so part of the issue is the reason why 
they were created, healthcare has changed a lot in the last 15 
years.
    Senator Tester. Yeah.
    Dr. Shulkin. The role of the VISN in the future needs to be 
that market assessment coordinator and they need to take on 
that role. The reason why we are starting with three pilots is 
to teach them how to do it.
    Senator Tester. I got you.
    Dr. Shulkin. We are using external resources to help us.
    Senator Tester. I have got you.
    Dr. Shulkin. Yeah.
    Senator Tester. But I think the market assessment is going 
to be critical as to what is going on. And the other thing I 
would just like to say, and you know I appreciate the work both 
of you do and I mean that, but unless you have a market 
assessment, what I just heard you say, Baligh, is that if they 
are offering a good care in the community you are just going to 
take them right out of the VA right away. Is that what you 
meant to say?
    Dr. Yehia. No. The market assessments will help us figure 
out what we are doing well and what is available in the 
community. At the end of the day, it is always up to the 
veteran.
    Senator Tester. Okay.
    Dr. Yehia. So they get to choose if they want to go in the 
community or not.
    Senator Tester. All right. So that brings me to another 
point. If the doctor and the patient disagree, what then? An 
appeal?
    Dr. Yehia. That is right. We want to ensure that there is 
patient protections. We probably think 98 percent of the time, 
99 percent of the time, they are going to reach agreement. When 
I see patients and talking about them, they are looking for 
their doctor's opinion, but if there is a point of 
disagreement, it would be elevated to another clinical 
individual in the medical center.
    Senator Tester. And that does not complicate the situation?
    Dr. Yehia. I do not think so. I think the vast majority of 
the times there are going to be concurrence between the patient 
and the doctor.
    Senator Tester. Okay. Well, I just--and I want to thank the 
Chairman for having this meeting and I want to thank you guys 
for being here. It is too bad we did not have the hearing 
yesterday on the VA Committee, but we are going to try to make 
that happen hopefully next time. But the VA definitely has its 
issues, but I--and I know you are in a tough spot, Mr. 
Secretary, because the President has said we will just give 
everybody a card and let them go where they want.
    First of all, the cost of that to the budget would be 
incredible, number one. Number two, as I said before, the 
veterans I have talked to like the VA. There are a few 
exceptions, but they like it. They like the people that are 
there. The guy who used to cut my hair, and unfortunately, he 
passed away, he used to tell me every time he cut my hair how 
the VA has saved his life, okay. So you have got some good 
people on the ground and you have got a good outfit. We need to 
build it and make sure because it is always going to be the 
backstop. And if we are starting to use community care, then 
you become responsible for that bad hospital in Havre, Montana. 
I do not want to point that out there--great hospital, okay. 
But the truth is every time there is a civilian facility and a 
veteran has a bad experience, it is your fault.
    Dr. Shulkin. Yeah. Right.
    Senator Tester. And I think you have less control over 
that. That is not to say that we do not need to use that 
community care facilities because I think they can be an 
incredible asset to the VA. So thank you.
    Senator Moran. I am glad you were able to find another 
barber.
    Senator Tester. I am not--well, no, she does a great job. I 
do not want to end up with a mohawk or wearing your style of 
hair.
    Senator Moran. Oh, a path I should never go down.
    We have a vote that is ongoing that has commenced. I am 
going to call on the Ranking Member who has other committee 
assignments this morning in banking and Senator Schatz will ask 
questions. Then we are going to recess momentarily while we go 
vote.
    Dr. Shulkin. Sure.
    Senator Moran. We will be back.
    Senator Schatz. Thank you, Mr. Chairman. I will be as quick 
as possible.
    Dr. Shulkin, Secretary Shulkin, can you talk about 
telehealth and how you see its future, both clinically and 
fiscally?
    Dr. Shulkin. Yes. Telehealth, as many people may not know, 
the VA is the largest user of telehealth. Over $1 billion a 
year goes into telehealth. It is absolutely a necessity for us 
to be able to fulfill our mission of providing care to veterans 
where we do not have facility or they live distances that are 
just not practical for them to get to a facility. And so we are 
all in in telehealth and we are trying to expand the use of 
technology. I actually practice telehealth from Washington, 
D.C. to patients that I see in Grants Pass, Oregon where there 
are not many primary care doctors.
    So what we are trying now to do is to actually use the 
technology so that we not only can do it from a VA facility to 
another VA facility, but that we can do it, use telehealth from 
a VA provider to a veteran in their home, on their mobile 
device, or wherever they are. For that, we have been working 
with the Department of Justice to try to clarify the roles that 
we can use our Federal licensing abilities to do that, but I 
believe that is essential for us to clarify that to be able to 
get more help to veterans.
    Senator Schatz. And I assume you will let this committee 
and the Veteran's Committee know if there is anything you need 
in terms of statutory authorization or resources to continue 
your good progress.
    Dr. Shulkin. Well, there are some bills, my understanding 
are, before Congress. I think Senator Ernst and Senator Herona 
are sponsors of them. I believe that is important legislation 
to proceed with.
    Senator Schatz. And then my final question in the interest 
of time, going into Fiscal 2017 the VA had $4.5 billion left 
for Choice and $7.5 billion for traditional care in the 
community. Your forecast for 2017 showed an uptick in veterans 
choosing Choice and a drop in veterans using care in the 
community, but community care is up--is almost, yeah, it is 15 
percent over plan in the first quarter, so how are we going to 
do better on your projections?
    Dr. Shulkin. Well, it actually works out right. This is a 
nice balance. This has been a deliberate management strategy 
which is to utilize the resources that the American taxpayers 
have given us to help veterans get care in the community. So 
Choice is up about 20 percent and our community care is down 
around 7 percent. And when you balance the two together, we are 
right on plan.
    The reason why we are seeking your help in future 
legislation to have the ability to have flexible use of the 
funds, because we do not like spending out of two different 
checkbooks. It is very, very hard when you are talking in the 
billions of dollars to balance your checkbooks exactly right. 
We are right on plan right now, but in the future, we would 
like one checking account.
    Senator Schatz. Thank you.
    Senator Moran. Senator, thank you very much.
    The Committee will stand in recess until the sound of the 
gavel.

    [Whereupon, at 11:07 a.m., the hearing was in recess.]

    [Whereupon, at 11:22 a.m., the hearing was resumed.]

    Senator Moran. To order.
    When you had the conversation with my two colleagues 
earlier about community care, what providers will be eligible? 
What is the criteria before which a provider could provide care 
to veterans?
    Dr. Shulkin. Right now we have a pretty large network, 
almost 600,000 providers throughout the country that have been 
developed. And so they will be the initial network that is 
developed. But we are seeking to develop what is called a high 
performance network, which is to develop standards for access, 
for satisfaction measures, and for performance and quality 
measures that would create essentially a preferred network to 
care for veterans.
    Senator Moran. Currently, the Choice Act requires the VA to 
pay Medicare rates.
    Dr. Shulkin. With a few exceptions in rural areas.
    Senator Moran. And that is something I would like to know. 
You told me something I did not know. What is the--what kind of 
exceptions?
    Dr. Shulkin. I think it is how many people need to live 
within a certain square mileage to be outside the Medicare 
rules?
    Dr. Yehia. Yeah. It is based on if they are an academic 
teaching hospital and if they live in a highly rural area. And 
then we have the special provisions for the State of Alaska and 
Maryland. We like those provisions, but we want to be able to 
move from the traditional Medicare fee for service to more 
contemporary payment models like value-based payments. And 
those are restricted under the Choice Act today that as we work 
together to development a new program allowing us to have all 
the tools that the private sector has to purchase value-based 
care.
    Senator Moran. Those rates in those certain rural areas 
like Alaska, are they higher than Medicare?
    Dr. Shulkin. Generally, yes.
    Senator Moran. Yeah. Okay. And so you would not expect this 
legislation to include--your preference would be this 
legislation not include the requirement that Medicare rates be 
paid.
    Dr. Shulkin. I think that we would like to see the ability 
to use these value-based principles. I think Medicare is a good 
starting place for many of the providers, but we want to be 
able to reward those providers that are performing better.
    Senator Moran. One of the problems with Choice today and 
that many veterans experience and many providers experience is, 
so the provider is approved. The veteran sees that physician, 
and then that physician needs--believes that the veteran, the 
patient, needs additional tests, x-ray, laboratory. And that 
has resulted in the veteran in most instances having to go back 
and get authorization for laboratory work or an x-ray 
recommended by the physician that the VA has referred the 
veteran to. One more step, more complication, and I assume 
there is a much better way of handling that circumstance than 
the way we do today.
    Dr. Shulkin. Yes. And one of the advantages of both Dr. 
Yehia and I still seeing patients is that we experience that 
and do not believe that is the right way that we should be 
handling it. So we have moved towards and already have taken 
steps towards this, to do what is called bundling of services.
    So you know if you are going to do a hip replacement that 
you are going to need physical therapy and you are going to 
need x-rays and you are going to be able to need the equipment, 
you know, to help the patient at home so that you bundle those 
services together so authorizations are not required.
    Senator Moran. What is your ability to provide mental 
health services broadly across the country in rural and 
particularly urban core center of city areas?
    Dr. Shulkin. Well, there is no other health system anywhere 
in this country that approaches the comprehensive nature of 
behavioral health that the VA does. So we are doing more than 
anybody else. We are providing well over 50 percent of our 
veterans are receiving and have a diagnosis related to a 
behavioral health issue so that we have integrated it into the 
way that we deliver regular care.
    In rural areas in the country where we have difficult time 
recruiting mental health professionals as does the private 
sector, we are using telemental health. And we are providing 
about 350,000 visits a year using telemental health, and that 
is growing. We have just established five national telehealth 
centers where we can recruit mental health professionals--they 
tend to be in more urban areas--to help support those rural 
parts of the country.
    Senator Moran. You indicated to Senator Schatz in response 
to one of his question or maybe he put these words and you 
agreed, which was that increasing cost associated with 
healthcare or related to demographics, number of veterans, 
aging veterans, and yet you indicated earlier that you expect 
to be able to--your request will be to fund this program within 
the fiscal year 2018 President's budget request. And 
incidentally, to my colleagues, we will have a June hearing, 
Mr. Secretary, in which we will ask you back to talk about the 
fiscal year 2018 budget and the appropriations process, in 
particular, but how do you do that?
    Dr. Shulkin. Well, first of all, as you know, we only have 
this skinny budget now, but the President did request a 6.6 
percent increase in our budget. So we are very grateful that 
the President has recognized the resources that we need to be 
able to continue to improving care for veterans. But I do 
believe that we are now embarking upon addressing some of the 
inefficiencies in the system. And ask we aggressively move 
towards modernizing the system, we have got to streamline the 
amount that we put into administrative overhead and we have to 
fix some of the deficiencies because asking for and receiving a 
6.6 percent increase year after year is just not sustainable 
and is not the right thing for the country.
    So we are taking it upon ourselves to develop a system, and 
part of this is why we believe we need a high performance 
network, so that we can reward those that are doing care better 
and more efficiently is so that we are not coming back and 
asking for these types of increases.
    Senator Moran. Senator from Florida.
    Senator Rubio. Thank you, Mr. Chairman. Thank you both for 
being here.
    Mr. Secretary, one of the hallmarks of the early days of 
your leadership have been the need for accountability. And as 
you are, I am sure aware, earlier, about an hour and a half ago 
or so, I along with Senator Tester, Senator Isakson, the 
Chairman, and others have filed a Department of Veterans 
Affairs Accountability and Whistleblower Protection Act of 
2017. And let me state at the outset that the purpose of this 
law is not simply to punish people. It is also in the best 
interests of the vast and overwhelming majority of the men and 
women of the Veteran's Administration who do an excellent job.
    And one of the ways in which we recognize the great job 
they do is by ensuring that the people who either supervise 
them or work alongside them that are not performing and, or 
worse, involved in misconduct, do not remain in place and 
impede their ability to serve. The bottom line is we want to 
give you the tools to hire and reward good employees who are 
doing a good job, but also the tools to remove, demote, or 
suspend employees in an expedited manner who are not fulfilling 
their commitment to our nation.
    One of the issues that has been debated in the last few 
days and I wanted to get your opinion on it is the burden of 
proof. As you know, under current law the evidentiary standard 
for someone for poor performance is substantial, basically 
substantial evidence, the degree of relevant evidence that a 
reasonable person considering the record as a whole might 
accept as adequate to support a conclusion, even though other 
reasonable persons might disagree. That is the substantial 
proof burden of proof that exists today for poor performance.
    For misconduct, it is higher. For misconduct, the current 
law says that you need a preponderance of the evidence. And it 
is defined as the degree of relevant evidence that a reasonable 
person, considering the record as a whole, would accept as 
sufficient to find that a contested fact is more likely to be 
true than untrue. Some people have said that is a 50 percent 
standard; substantial is 30 percent. I do not know if those 
numbers are really there.
    Our law, as you know, that we have filed, makes them both 
substantial. It keeps the current law and performance, but it 
lowers the substantial misconduct under the theory that 
misconduct is a lot easier to identify and a lot easier to meet 
quickly that standard, and not to mention some of the cases.
    So I would ask two questions. Number one is in your view 
what is the appropriate approach? Is it to leave as is or to 
raise the standard on--lower the standard on misconduct, but 
raise it on performance; and second, if in fact your belief is 
that they should both be the substantial evidence model. If you 
have any example as to how the current standard, for example, 
on misconduct has been an impediment to accountability and 
being able to function in your new role.
    Dr. Shulkin. Great. Well, Senator Rubio, first of all, 
thank you for recognizing that the vast amount of our employees 
are doing terrific and heroic work and are serving this 
country's veterans and we should be proud of them and the work 
that they are doing.
    We are talking here about a very, very small number of 
employees who have deviated and drifted away from the ethical 
and the responsibilities that they took on to serve our 
country's veterans and no longer should have the privilege of 
serving in our system.
    In those cases, I wish it was not true. I wish today I 
could tell you I had the tools to do the right thing to be able 
to remove those employees. I do not. So, unfortunately, I need 
a new set of tools if I am going to be held accountable for 
turning this system around and doing what we all want to do to 
serve veterans. So I thank you for introducing this bill. I 
think it is necessary.
    In response to your questions which are highly legal and 
technical--I only went to medical school, not to law school--I 
can tell you that I need substantial evidence in both of those 
cases in performance and misconduct. That if we move towards a 
different standard than substantial, it will be harder for me 
to do the right thing and to serve the system the way that it 
needs to be led.
    So substantial evidence, it is not my understanding it is 
mathematical. It is my understanding that it allows the Court 
to interpret the rulings in a way that is deferential to the 
Secretary, to the business. It takes the--we have to prove that 
it is in the agency's interest to be able to make a 
disciplinary action where if we went to a predominant standard 
that would be mathematical. You would have to show that 51 
percent of the evidence is in favor of a disciplinary action 
and that would be a much longer process. It would delay our 
decisions from even where they are today. So I believe we need 
the substantial evidence.
    Senator Rubio. If I may, Mr. Chairman. I know I am out of 
time, but it would be very brief. In your time at the Veteran's 
Administration, have you ever seen or do you have any evidence 
of any instance in which supervisors or anyone in the agency 
has targeted individuals for dismissal because we just do not 
like them and we are going to make something up in order to get 
rid of them?
    Dr. Shulkin. Well, we have seen cases of documented 
whistleblower retaliation and we are not going to accept that 
among our supervisors. We will protect our whistleblowers and 
so I think that is an important part of also what you are 
introducing. But I want people to understand. I am not seeking 
this and I do not support your legislation so that we can willy 
nilly fire employees or allow supervisors to abuse employees. 
This allows due process. I believe it is very important that 
our employees have due process, the right to predecisional 
appeals, the right to be represented by the union or their 
attorneys. But in the cases that, frankly, we need to make the 
changes in management or other changes, today I just do not 
have that ability to do it.
    Senator Moran. Senator Baldwin.
    Senator Baldwin. Thank you, Mr. Chairman.
    Secretary Shulkin, I saw your profile piece in the New York 
Times this week and a story within it really caught my 
attention. When you asked for a summit on veteran suicide, you 
were told by staff that it would take at least 10 months to 
pull it together and you pushed back on your staff and said, 
``You need to do it in one month.'' The Times story notes, and 
I quote from it, ``When his staff members pushed back, he 
pulled out a calendar and began quietly tapping, then showed 
them that during the delay nearly 6,000 veterans would kill 
themselves and they got it done in a month.''
    I think I speak for my fellow committee members when I saw 
that it is that sense of urgency that we admire and that sense 
of urgency that we expect and demand also from the VA in 
general. The same sense of urgency is one that I want to talk 
to you about with regard to the scheduling delays with the 
Choice Program and specifically with the third-party 
administrator, Health Net.
    As you know, I recently wrote you about Health Net's 
constant delays, their mistakes, and their outright failures. I 
asked you to transfer the responsibility for scheduling 
appointments from Wisconsin veterans from Health Net to the 
local VA medical centers who have told me that they have the 
capacity to schedule these appointments, and you denied that 
request. But I wanted to today give you some examples of why I 
asked for the removal of Health Net from the scheduling 
process.
    Ten months. That is the amount of time it took a female 
veteran to get a mammogram scheduled through Health Net. From 
September 2015 to June 2016, a veteran waited for a mammogram. 
This includes an intervention from my office on her behalf to 
get this scheduled utilizing an escalation telephone number 
provided by Health Net. That escalation line has since been 
disconnected.
    Just this week I heard from a veteran who is authorized to 
use the Choice Program to see an orthopedic surgeon in March. 
Health Net received the authorization from the VA, but never 
contacted the veteran. When the veteran contacted Health Net, 
they informed her that the authorization was expired, so the 
veteran was kicked back to the VA and she has still not seen an 
orthopedic surgeon.
    Another veteran with a 100 percent service connected 
disability wrote to me and said, ``I have been referred to the 
VA Choice Program four times. One time worked perfectly. That 
is good news. The other three were nightmares.'' Health Net 
told him that he would receive a call back in five days to 
schedule his appointment. They never called back, so he called 
them. Health Net told that veteran they would call back with 
his appointment. They never did. That happened four times. When 
Health Net did finally set up the appointment, it was with the 
wrong doctor three times.
    These Health Net failures are harming our veterans. They 
are getting in the way of the care that our veterans have 
earned and they are giving the VA a bad name because very few 
people differentiate between Health Net and the VA.
    I met with all three of Wisconsin's VA medical center 
directors to just a few weeks ago and each one of them told me 
that they have the capacity to schedule these appointments at 
their facilities directly. Given all of this, I would like to 
hear why you denied my request to remove Health Net from 
scheduling appointments in Wisconsin and I urge you to 
reconsider that decision.
    Dr. Shulkin. Okay. I have reconsidered. No. Thank you for 
your sense of urgency on this. You are absolutely right and 
those stories are horrific and I wish I could tell you that 
they were rare. So I think you are right on this.
    We entered into a contract where essentially we outsourced 
this customer service and we have learned the hard way that 
good businesses do not do that. In our new system, we are going 
to release a new RFP for contractors that will be released in 
June. You will see that we are asking to bring that back to VA 
exactly like what you are talking about. So we are talking 
about managing a current contract during a remaining period of 
time until we issue our new RFP.
    We will move forward. We have piloted exactly what you are 
saying with very, very good results in many locations around 
the country. And the reconsideration, we will move forward with 
the pilot in Madison. I wish we could do----
    Senator Baldwin. What about all of----
    Dr. Shulkin. What is that?
    Senator Baldwin [continuing]. All of Wisconsin.
    Dr. Shulkin. I wish that we could do all of them. We have 
contract issues with our contractor because we signed a 
contract with a process that outsourced this. They have been 
willing to work on pilots with us, so right now I can tell you 
we are working towards that in Madison. The new program will 
have it all back in.
    And I think you are absolutely right. I do share your 
urgency on this. We are seeing improvements. We are seeing less 
of these stories than we did before, but any of these stories 
are unacceptable.
    Senator Baldwin. Okay. Mr. Chairman, I see my time has run 
out. I do have questions I will submit also for the record.
    Senator Moran. Thank you very much and thank you for 
expressing the concern on behalf of those experiencing Health 
Net problems. Our provider is TriWest and our circumstances are 
different, better. And I would encourage the Secretary and the 
Department to do everything they can to solve this problem as 
described by the senator from Wisconsin.
    Senator from Arkansas.
    Senator Boozman. Thank you, Mr. Chairman, and thank you for 
convening this very important hearing. We appreciate you guys. 
We appreciate all of your hard work. I know that you are 
working hard.
    And I just recently came off kind of a tour through a lot 
of rural Arkansas, and was talking a lot about the Choice 
Program. And the good news is, for the most part people are 
starting to embrace that and really having a positive 
experience.
    On the other hand and sadly, I wish we could talk more 
about those positive experiences because there are bunch of 
them out there, and again, the system is working that way. But 
there are problems that we are having. And one of the things 
that we had was that the 40 mile 30 day rule, it continues to 
cause a little bit of frustration and confusion and often time 
it penalizes the veteran. And certainly I know that that is not 
your intent.
    In recent weeks, we have received several casework requests 
where the veterans who were previously in Choice eligible under 
the 40 mile rule, had used the service, have been notified and 
basically said, you are not in it because they were--I think 
one instance was 39.8 miles. And so, we have email 
correspondence between the VA and affected veterans brusquely 
telling the veterans that they should have never been eligible 
because they live 39.8 versus 40 miles from a VA facility, two-
tenths of a mile. Worse yet, the VA did not have the courtesy 
to proactively notify the affected veterans that they no longer 
rated Choice eligibility. And so the frustration when they 
later sought treatment and provider coverage. So that really--
things like that really are a problem.
    I know that you have to have--well, you do not have to 
have, we have elected to have the 40 mile guidance, but I do 
think it is that we need to really provide some common sense. 
And hopefully we can work with--our VA employees who are 
working so hard and doing a great job of taking care of 
veterans. On the other hand, there is a little bit of a culture 
when we get into these kind of things, the regulatory 
atmosphere, where certainly they could do a better job and 
treat veterans in a little bit better manner.
    Dr. Shulkin. Right. I think you are making really good 
points, Senator. Remember, the law was implemented with a 40 
mile requirement, so it is a very rules based system. And I 
have been on record as saying that is not the type of system 
that I think meets veteran's needs. So we would like to work 
with you and come back with a new legislation that would 
replace the 40 mile rule and the 30 day wait time with a more 
clinically based system that would allow the flexibility that 
exactly you are talking about.
    Senator Boozman. And it would be interesting to look and 
exactly see the administrative cost----
    Dr. Shulkin. Yes.
    Senator Boozman [continuing]. That we are going through 
with some of these things that I doubt that there is a great 
cost savings.
    In January, you were kind enough to brief me about your 
team's effort to transform the VA revenue collection to include 
third party insurance payments. You are about to begin a series 
of 120 day sprints or mini pilots. Can you provide us with an 
update as to how those efforts are going?
    Dr. Yehia. Absolutely. Our focus is to make sure we are 
most efficient and most people do not know this. We collect 
about $3.5 billion worth of revenue every year that goes right 
back to service veterans. I think we have opportunities there 
to increase that number. And so one of our pilots is in your 
state, Senator, Arkansas, working on three main areas of 
insurance capture, which we do not do a great job of, medical 
documentation, and then also coding. I would love to kind of 
have a follow up conversation with you and let you know about 
some of the work that has started in those medical centers and 
are already starting to produce some results.
    Senator Boozman. As we examine the future of community care 
for veterans, are there plans to integrate these efforts into a 
broader community care program? So, very definitely?
    Dr. Yehia. Absolutely.
    Senator Boozman. Good. That is great. Are there any down 
sides to doing that?
    Dr. Yehia. I do not think so. I think we need to become 
more efficient and function more like the private sector does. 
This is a little bit of the bread and butter of most clinics 
and hospitals of being able to collect and process insurance 
and collect from health plans. And we need to be able to 
develop those muscles and flex them and be able to get those 
revenues so we can better take care of veterans.
    Senator Boozman. Yeah. No. No. I agree. It seems like, that 
we are leaving millions of dollars on the table that you could 
redirect and deal with some of the urgent problems that you 
have.
    Thank you, Mr. Chairman.
    Senator Moran. Thank you, Senator.
    Senator from North Dakota.
    Senator Hoeven. Thank you, Mr. Chairman, and thanks for 
holding this important hearing. And to all three of you, thanks 
for the work you do.
    Secretary Shulkin, I think the fact that you are a medical 
doctor is a real strength that you bring to this job and----
    Dr. Shulkin. They did not agree, I guess.
    Senator Hoeven. I am not sure what that is all about. But 
not only, you know, your experience administratively, but--
yeah. I will try a different one.
    Senator Moran. You are just high maintenance.
    Senator Hoeven. I guess so. We will try it again.
    Dr. Shulkin. Thank you.
    Senator Hoeven. The experience you bring as a physician is 
important as well as the experience you have at VA 
administratively. Just two areas that I want to touch on. One, 
Senator Boozman was talking about, and that is in rural areas 
the 30 day 40 mile rule creates problems and gets some 
nonsensical outcomes based on where you have facilities, both 
your healthcare facilities and your CBOCs.
    You are aware of this. We have talked about it, but your 
discretion and your empowerment of your staff to make good 
decisions rather than technical decisions.
    Dr. Shulkin. Right.
    Senator Hoeven. And it follows in the footsteps of the non-
VA care model.
    Dr. Shulkin. Yes.
    Senator Hoeven. You are doing that in North Dakota. You 
have been tremendously helpful. It has made a big difference 
not only in terms of getting appointments and getting our vets 
in to get their healthcare, but also in making sure that 
community providers get paid timely. And so I want to again 
thank you for the pilot program we have in North Dakota, the 
Veteran's Care Coordination Initiative. It is working very well 
and it is a testament to you are willing to engage and empower 
your people.
    Along that line, we need to do more for long-term care of 
veterans, both institutional long-term care, our nursing home 
care, and home-based care. Now this is incredibly important. I 
know you know we have been working on it, but we need your 
help. And in a nutshell, of course, if somebody goes into a 
nursing home, sometimes they take Medicaid reimbursement, that 
nursing home. Sometimes it takes Medicare reimbursement. But if 
they take VA reimbursement, they have a different and 
additional set of standards.
    This needs to change. This needs to be fixed. And we need 
your help to do it. Now, if we cannot do it administratively, 
then the bipartisan bill that I have with Senator Manchin, we 
did pass through the VA Committee last session of Congress, but 
we are back--because we did not get it passed across the Floor 
and across the House, we are back doing it again. And so I am 
asking for your advice, your thoughts, and your help in moving 
that bill because when a veteran goes into a--you know, 
something like 10 to 15 percent of our nursing homes across the 
country will take VA reimbursement.
    Now they all take Medicare. They all take Medicaid. But if 
they want to take VA, they have got to go through a whole 
different set of standards. Now, that is not fair to our 
veterans and we need to do something about it. How do we get 
this done?
    Dr. Shulkin. Well, first of all, I would like to work with 
you on this. I think you are right. We just announced two weeks 
ago something very, very similar. Our building standards for VA 
where we would give grants to states were so over the top and 
created an additional 30 percent cost factor on the states and 
building their facilities. And they actually cut down on the 
number of veterans that we could serve because of these 
increased costs. So I suspended all of the Federal requirements 
and now we are going to use the state requirements across the 
country in a very, very similar way. So I would like to work 
with you on this piece and see if we can get to a result that 
makes sense.
    Senator Hoeven. Well, and so I need a point person from you 
or somebody. We have got long-term care on board.
    Dr. Shulkin. Yeah.
    Senator Hoeven. You know, this is all about making sure 
that veterans--it is really the mirror of what we are doing on 
the healthcare side. We are doing the same thing on the long-
term care side. Making sure that our veterans can, you know, 
get care and long-term care in the community, either a nursing 
home or homebased care. And so I need a point person. I need 
something from you to help to work with my crew to drive this 
to completion.
    Dr. Shulkin. Well, let's not only do that, but let's set a 
time limit. When do you want to do this by, Senator?
    Senator Hoeven. Well, I would like to get it passed through 
this session of the Congress.
    Dr. Shulkin. Okay. Me too.
    Senator Hoeven. I mean, ideally this year.
    Dr. Shulkin. All right. Okay. Yes, absolutely, absolutely. 
So we will reach out to you and get a direct point contact and 
this will be something that we will work with you on because I 
think it is the right thing to do.
    Senator Hoeven. Well, thank you, Secretary, and I agree. I 
think it goes to what you are--I believe you are doing, and 
that is getting things done. We have got a lot to do, a lot 
more to do. We recognize that.
    Dr. Shulkin. Right.
    Senator Hoeven. But you are working to get things done and 
I really appreciate it.
    Dr. Shulkin. Absolutely. Thank you.
    Senator Hoeven. Thank you.
    Senator Moran. Senator, thank you very much.
    We are going to bring this hearing to a conclusion. Before 
I do that, let me ask you, Secretary Shulkin, last week you 
testified in front of our counterparts, House Mil Con VA 
Subcommittee regarding mandatory funding. And your testimony 
indicated that you were supporting mandatory funding. Mandatory 
funding is certainly included in the Choice Act, but that was 
considered an emergency. And I just want to know if you 
misspoke or there was intention that you believe that the new 
program will be mandatory funding versus discretionary funding.
    Dr. Shulkin. Well, I think it is going to be a combination 
of both. I think we are going to need to have some funding on 
the mandatory side which essentially allows us to continue what 
we have known as the Choice funding, as well as using the 
discretionary funds for community care. What we are going to be 
seeking and working with you with is to ask whether we can have 
flexibility between those two funds to allow us not to be 
operating out of two different sets of rules. We want all of 
this money combined to be able to help veterans get care in the 
community.
    Senator Moran. I should not have asked that question 
because it gave time for the senator from New Mexico to arrive.
    Senator Udall. You always love it, Mr. Chairman, when I 
arrive. I know because we----
    Senator Moran. We are glad you are here.
    Senator Udall [continuing]. Work on so many things 
together, so thank you. And I apologize for keeping you, Mr. 
Secretary.
    Dr. Shulkin. No problem.
    Senator Udall. But I had some things I wanted to cover 
here. Just I will try to be brief.
    It is really good to see you again and congratulations on 
your confirmation earlier this year. I believe you are the only 
Cabinet member to be confirmed unanimously and that is a 
significant accomplishment in our current political 
environment, wouldn't you say, Mr. Chairman?
    Senator Moran. Absolutely.
    Senator Udall. But it is not surprising since you led the 
Veteran's Health Administration under President Obama. You have 
continued to demonstrate your commitment to veterans and to 
ensuring they receive quality healthcare and I really, really 
thank you for that service.
    My first question relates to your testimony to our sister 
subcommittee on the House side last week on the realignment of 
VA facilities. I voted to authorize the Choice Program and I 
have worked with my colleagues on the subcommittee to make many 
essential improvements, but I absolutely did not vote to 
privatize the VA and I do not think many other senators did 
either. But, frankly, it is troubling to me and to many 
veterans in New Mexico who heard talk of realignment and 
closing VA facilities in a conversation about veterans seeking 
care in the private sector.
    The Veterans Choice Program is one thing, but we do not 
want to force veterans into the private sector where in many 
cases private health providers do not have the experience 
treating veteran's specialized cases like chemical exposure, 
traumatic brain injury, and PTSD. This concern is not just 
speculation. In fact, a GAL report published just last week 
found that the VA does not adequately work with local veteran 
communities when they shut down a facility or relocate 
services. Specifically, GAL found that and I quote here, ``The 
VA has not consistently followed best practices for effectively 
engaging stakeholders in facility consolidation efforts,'' and 
``The VA's efforts to align facilities with veteran's needs 
were challenged.''
    So, Secretary Shulkin, would you please clarify what you 
meant by realignment and how you plan to improve the VA's 
community engagement and specifically related to the 431 vacant 
buildings and 735 underutilized buildings you cited last week?
    Dr. Shulkin. Yeah. Thank you for asking that question. And 
I think that you have stated it well, what a reasonable 
position here is.
    If you take a look at my testimony that I gave last week, 
the testimony, I believe, is accurate. The way it was reported, 
unfortunately, was not exactly accurate. This is--the intent 
here is to dispose of resources or buildings that are not 
helping veterans today, that are sitting vacant or unutilized, 
not to eliminate or close facilities that are taking care of 
veterans.
    So let me just share with you. We have 449 buildings today 
from the Revolutionary War and the Civil War. We have 591 
buildings today from World War I. Of the ones in the 
Revolutionary and Civil War, I do not know which is worse, that 
we have 449 buildings or that 96 of them are vacant. I was 
talking about the 96 that are vacant. Of the World War I 
buildings, we have 141 that are vacant.
    I do not want to continue to spend taxpayer money, which is 
$25 million a year, maintaining buildings that are vacant or 
underutilized, particularly ones of that age, when I could be 
using that money to support the capital needs of buildings and 
facilities that are helping veterans. I have no interest in 
privatizing the VA. I am interested in using our resources to 
help veterans.
    Senator Udall. Secretary Shulkin, is there a public list of 
these facilities so that communities and their elected 
representatives can understand what may or may not be closed as 
part of this realignment?
    Dr. Shulkin. Yes, there is.
    Senator Udall. And you have made that available to us?
    Dr. Shulkin. I would be glad to make that available to you.
    Senator Udall. Okay. And you would make it available to the 
committee.
    Dr. Shulkin. Yes.
    Senator Udall. It will be available for members to see.
    Dr. Shulkin. Absolutely.
    Senator Udall. Let me see here if there is a--I think I am 
going to submit these for the record.
    Dr. Shulkin. Thank you.
    Senator Udall. The Chairman has been very generous here to 
allow me to go near the end here and really appreciate it, Mr. 
Chairman, and thank you very much again for your service.
    Dr. Shulkin. Thank you. Thank you, sir.
    Senator Moran. We are glad to have you and appreciate your 
questions.
    I am ready to conclude this hearing. Mr. Secretary, I do 
want to bring to your attention a letter that the four here in 
the House and Senate received from the Inspector General 
yesterday. It was a letter to Dr. Ali on conditions at the 
District of Columbia VA Medical Center. OIG issued a report on 
April 12th. They are now reminding us again yesterday of 
serious conditions, according to the IG report, at that 
hospital. And I want to make certain that you and the VA are 
taking the steps necessary to correct those problems. And what 
I hope you would assure me is those steps have already been 
taken.
    Dr. Shulkin. Yes, Mr. Chairman, and I appreciate the change 
to comment on this.
    We do appreciate the IG's work and their continued 
vigilance to make sure that our facilities are up to the 
standards and providing the best quality care. And so we work 
closely when the IG issues these reports to us. We had people 
on site there yesterday from the Central Office.
    I would say two things. First of all, what they observed 
yesterday was actually a process that works. When we identified 
that there was any safety concerns to a patient, we simply 
stopped the procedure and corrected the situation so that there 
has not been in any of these Inspector General concerns any 
evidence of harm ever to a veteran.
    Secondly, the letter that was issued to you did not have 
fully accurate information. We have written back to the IG to 
share our perspective so that what we are trying to do is to do 
exactly what you are saying, which is to make sure that we are 
on top of these issues, monitoring it. We have no safety 
concerns today about patients being cared for there. We do 
believe that it is a high quality environment, but we will be 
vigilant and we will work with the IG to make sure that we are 
addressing the needs as appropriate.
    Senator Moran. Senator Collins, because I asked one more 
question, I recognize you.
    Senator Collins. Thank you, Mr. Chairman. I am so grateful 
that you did. I had three hearings this morning and I know how 
frustrating it is when a member comes in just as you are about 
to adjourn, but this is so important that I did want to get 
here.
    Both of our witnesses, it is great to see you again. And 
each of them accompanied me last year to my hometown of 
Caribou, Maine, to observe the ARCH Program firsthand. And I 
want to first express my appreciation once again. We have 
talked about it since then, but the appreciation of the 
veterans and the healthcare providers who really were so 
grateful that you drove the 250 miles from the Togus Medical 
Center, the VA Hospital in Augusta, to Caribou so that you 
would have a sense of the driving difficulties often faced by 
veterans in northern Maine.
    You also kept your word in ensuring that veterans who 
participated in the ARCH Program maintained the same seamless 
community care even after that particular program expired, and 
I am grateful for that.
    As Congress and your Department work to reform and 
consolidate VA's community care authorities, will you pledge to 
continue to ensure that veterans in northern Maine experience 
another seamless transition and continue to enjoy the 
convenient and efficient and cost effective community care that 
they are receiving now, Dr. Shulkin.
    Dr. Shulkin. I am going to let Dr. Yehia answer.
    Senator Collins. Dr. Yehia.
    Dr. Yehia. Yeah, absolutely. ARCH has really been a 
learning lesson for us. And our pilots that we have today in 
the Choice Program in North Dakota and Alaska are modeled after 
ARCH. What ARCH got right and we want to make sure is right in 
the new program is the importance of relationships. Veterans 
have a consistent point of contact. They know where and when to 
go. And the VA is involved with their community provider to 
make sure that it is a seamless connection. And so we actually 
look to take that model in Maine and in other parts of the 
country and use it as the standard bearer for the new program 
of how we coordinate care.
    Senator Collins. That is exactly what I had hoped you would 
do once you saw how effective it was and I know the Chairman is 
a big supporter of this program as well. And it really--that is 
the goal we should all have and I appreciate the fact that you 
are replicating it because we felt here is a model that is 
working. Let's bring it to other remote or rural areas.
    I want to bring up another issue that has been a problem in 
Maine, and that is the prompt payment of VA claims. And it 
continues to be a problem not only in my state, but in others 
as well. For smaller rural providers, it really can mean the 
difference between whether they are going to be able to keep 
practicing or not, but it is not just our smaller providers 
that have experienced a problem.
    And the Eastern Maine Medical Center, as you know, has been 
working, and Doctor, you have worked very closely with us on 
this. It has been working with our office and with yours to try 
to resolve a huge backlog of some 2,000 claims. And I know that 
there are different views on why the backlog is so big, but 
nevertheless, there is a backlog. I think all of us could agree 
with that. And my worry is that we really need prompt payment 
in order for the Choice Program to work well.
    So what can be done to speed along the process of resolving 
disputed claims and to pay those that are not disputed more 
rapidly so that providers are not stuck?
    Dr. Yehia. Yeah. Making sure that we are good partners for 
our community providers is critical because we will never be 
able to build the high performing network that we want if we 
are not good business partners for our community providers.
    I have had the chance to have personal phone calls with the 
CEO of Maine and other facilities and it has been great to work 
with them. And we have made a lot of progress. We have actually 
paid them more just this time this year than the entire last 
fiscal year. We still have a little of a ways to go, but I feel 
like we are making good progress there.
    We could use your help, Senator. Part of the challenge is 
that we have multiple programs, each with different rules and 
authorities. And I think as we work towards a new modernized 
community care program, having a criteria that is easy to 
understand, not only for the veteran, but for the 
administrators and the community providers, will go a long way. 
Most of the claims that we end up denying are because of care 
that was not approved or did not follow the rules of some 
program. It should be easier than that and so we want to work 
with you to streamline those efforts.
    Senator Collins. I am certainly happy to work with you and 
I appreciate the efforts you are making. I hope they will 
continue. I also think you need to look at your IT systems and 
that there is still an awful lot of paper claims that are filed 
and that is not the case in Medicare, for example. And I think 
that slows the process. I know that requires money, and but I 
think the onerous paper system is part of the problem as well.
    And I can see I am getting the hook understandably from the 
Chairman who has been extraordinarily patient. I truly thank 
you, Mr. Chairman, because I have had a Help Committee markup, 
the Intelligence Committee has been meeting, and yet this is so 
important that I really wanted to get here. So thank you for 
asking that final question.
    Senator Moran. Senator Collins, thank you very much for 
joining us. I should not give you many compliments because 
someone else might arrive in the time that I am complimentary 
of you, but I very much appreciate your interest in these 
issues, and particularly the ones you raised in your questions. 
I am the author of the legislation that created ARCH back in my 
House days and we are glad to hear Dr. Yehia say that it has 
made a difference in providing a role model.
    And payment claims, the payments of claims, is so critical 
in those small towns who are--those hospitals are hanging on by 
a thread and cash flow is an issue for them every month. So I 
appreciate what you had to say and I appreciate your continued 
diligence on behalf of the veterans of Maine, not New 
Hampshire.
    And I would also indicate that I would expect a couple of 
things. I would expect that once we get through the budgetary 
process, this subcommittee probably will look at IT issues and 
the Secretary is pursuing a decision in that regard. So maybe 
we can get some of the questions that you have in regard to 
improving our IT. Also, the passage of the Vet Improvement Act 
that extended the Choice Program removes the third party 
provider from the payment process. And again, our hope is that 
that has a significant consequence.
    Dr. Shulkin. Yes.
    Senator Moran. In the timeliness of those providers being 
paid. And I do not know the timeframe in which that will take 
effect. I assume that it is not implemented yet or is there----
    Dr. Shulkin. Yeah. Now.
    Senator Moran [continuing]. Now?
    Dr. Shulkin. Yeah.
    Senator Moran. So the third party provider is not involved 
in the----
    Dr. Shulkin. Well, the VA will be the initial provider of 
the payment, so it takes the veteran out of the middle.
    Senator Moran [continuing]. Great. It would be interesting 
to confirm that that is a time saving change. And I assume we 
will have evidence of that in part from the hospital and 
providers that call me.
    Dr. Yehia. Yeah. We know it is saving time. Yeah. The 
community providers before had to bill the other health 
insurance, then bill us, so there was a two-step process. Now 
they only have to do one step. They bill the Veterans Choice 
Program.
    Senator Moran. And that is in effect today?
    Dr. Yehia. Yes, sir.
    Dr. Shulkin. Yeah.
    Senator Moran. Great. Now, I thank our witnesses for being 
here today. We will continue to work along the lines that we 
discussed today. We have a great opportunity, I think, to make 
a significant difference. And again, I appreciate the 
conversations that I had with you yesterday. I appreciate your 
time today. This subcommittee looks forward to working closely 
to find the right solutions.

                     ADDITIONAL COMMITTEE QUESTIONS

    For members of the subcommittee, any questions you have for 
the record should be turned into the subcommittee staff no 
later than Thursday, May 18th.
              Questions Submitted to Hon. David J. Shulkin
           Question Submitted by Senator Shelley Moore Capito
    Question. As you look at modernization, what are the scope of 
services that you feel should always remain available within the VA 
system?
    Answer. VA is committed to providing the best access to care for 
Veterans. To deliver the full care spectrum as defined in VA's medical 
benefits package, VA will focus on its foundational services--those 
areas in which it can excel--and build community partnerships for 
complementary services.
    VA Delivered Foundational Health Services are: (1) those services 
that provide management of military-related conditions/disorders AND 
there is limited expertise and/or access to that care in the national 
market; OR, (2) those services that manage and coordinate the overall 
health of Veterans across their lifespan.
    For example, service-related conditions like traumatic brain 
injuries (TBI), polytrauma care, posttraumatic stress disorders, blind 
rehabilitation, and prosthetics are areas where VA care is critical. 
Decisions on foundational services will vary from market to market 
based on Veteran needs and what is available in the community, but 
integrated primary care and mental health is another area where VA 
often provides services that are best in class. Providing these 
foundational and critically needed services for Veterans distinguishes 
VA from the private sector and is one of the many reasons for investing 
in VA direct healthcare.
    VA will continue to assure that the full array of statutory VA 
healthcare services are made available to all enrolled Veterans. No 
aspect of the definition of implementation of ``VA Foundational 
Services'' will reduce the scope of services made available through a 
high performing integrated network.
                                 ______
                                 
               Question Submitted by Senator Thad Cochran
    Question. While the VA has had great success deploying telehealth 
in some areas, challenges remain. In many states, academic medical 
centers have stood up outstanding telehealth programs. The University 
of Mississippi Medical Center in Jackson is a leading example. These 
academic medical centers serve as partners with the VA in many ways, 
often even being co-located with VA medical centers. How can Choice and 
other purchased care programs take advantage of these existing 
telehealth programs based at academic medical centers to reach more 
veterans, especially in rural areas?
    Answer. VA is a leader in the area of telehealth. On August 3, 
2017, VA announced it is initiating a national rollout of VA Video 
Connect, a software application that will enable VA providers to use 
video telehealth from anywhere to anywhere.
    The VA Office of Community Care (OCC) has used telemental health 
services in some locations, and we continue to explore opportunities to 
utilize telehealth through our agreements with academic medical centers 
and through our contractors, TriWest and Health Net. There are 
challenges in providing access to the technology required to enable 
telehealth services, and we continue to look for new ways to provide 
these services through local academic medical centers.
    The Office of Telehealth Services provided data on the number of 
Veterans served through telehealth encounters at the G.V. (Sonny) 
Montgomery VA Medical Center in Jackson, Mississippi, from October 2016 
thru mid-August 2017. During that period, over 4,000 Veterans accessed 
VA care through more than 7,600 telehealth encounters. All of these 
telehealth services were provided by VA staff. Currently, there are no 
telehealth collaborations with the University of Mississippi Medical 
Center at Jackson.
                                 ______
                                 
                Questions Submitted by Senator Tom Udall
    Question. My office has worked with veterans and families that have 
experienced significant gaps in access to essential care for substance 
abuse issues. Access to mental health services at the Raymond G. Murphy 
Veterans Affairs Medical Center in Albuquerque is increasingly 
difficult for many New Mexico veterans.
    According to your letter to me dated April 25, 2017, out of the 80 
beds in the Albuquerque VA Hospital allocated for in-patient treatment 
for mental health and substance abuse, one quarter of the beds are 
vacant due to staffing shortages. And despite approximately twenty open 
beds, veterans have to wait on average 56 days for Substance Abuse, 
Trauma, and Rehabilitation Residence.
    Time is critical when connecting veterans to mental health 
treatment options, for treatment of substance use issues, homelessness, 
or suicidal thoughts. But, many veterans prefer to wait to receive care 
in the VA rather than use community services. There is often a stigma 
going to a substance abuse treatment program, and there are concerns 
that outside providers won't understand the issues that are specific to 
veterans. Furthermore, the GAO reports--in some cases--veterans have to 
wait up to 81 days before receiving treatment through the Choice 
Program.
    In your opinion, are veterans better served by increasing the 
capacity and the number of providers inside the VA--rather than sending 
them outside where care might be further delayed or the services might 
be inadequate to meet the veteran's needs?
    Answer. VA's goal is to provide timely, high-quality access to care 
for Veterans when and where they need it. VA needs a different approach 
to ensure we can fully care for Veterans. We need your help in 
modernizing and consolidating community care. We believe that a 
redesigned community care program will not only improve access and 
provider greater convenience for Veterans, but it will also transform 
how VA delivers care within our facilities.
    With regard to ``concerns that outside providers won't understand 
the issues that are specific to veterans,'' VA understands this 
potential obstacle and has ensured that free training is available to 
community providers. Free training and continuing education are 
available to community providers via the national program, ``Training 
Finder Real-time Affiliate Integrated Network'' (TRAIN). The Military 
Culture portion of the training focuses on Core Competencies for 
Healthcare Professionals and includes four modules: Self-Assessment/
Intro to Military Ethos; Military Organization and Roles; Stressors and 
Resources; and Treatment, Resources, and Tools.
    Question. Over the past two weeks, we have heard from the VA about 
your priorities for telehealth and telemedicine for fiscal year 2018--
including the ability to assist treating mental health issues. One 
thing came up in testimony last week in relation to broadband. The 
Federal Universal Service Fund has not made broadband universally 
available.
    Many veterans living in rural areas do not have access to broadband 
to be able to utilize the VA's newest efforts for Home Telehealth. And 
I know there's a reluctance in terms of stepping outside your agency. 
But if we had a national effort to put that broadband into all these 
rural areas, it would really make a difference in terms of the VA's 
vision.
    I'd urge you--as Cabinet Secretary--to be at the table when the 
president puts together his infrastructure package. Can you commit to 
advocating that it's absolutely essential to fill these holes so that 
we can get telehealth out into the rural areas of America?
    Answer. The telehealth is mission-critical to the future of VA 
healthcare. VA looks forward to advancing telehealth capabilities to 
enhance its capacity to provide clinical services by hiring more 
providers in major metropolitan areas to serve Veterans in rural and 
underserved areas; to increase Veterans' access to care from home or a 
VA community clinic; and to increase the quality of VA care by 
leveraging VA's national roster of experts in rare or complex 
conditions.
                                 ______
                                 
              Questions Submitted by Senator Tammy Baldwin
    Question. Secretary Shulkin--you previously indicated in a House 
MilConVA hearing that the VA selected a commercial vendor for the 
Medical Appointment Scheduling System or MASS and a pilot location was 
proceeding. Are you aware the task order to begin the pilot project was 
never ordered? If so, when will that task order to begin the project 
will be ordered and when will the commercial solution roll out system-
wide?
    Answer. The Medical Appointment Scheduling System (MASS) task 
order, which implements the MASS pilot in Columbus, Ohio was awarded on 
June 15, 2017. It is planned to take about 1 year to implement the 
software and an additional 3 months to evaluate the results before 
making a national deployment decision. That national deployment 
decision will necessarily be made with consideration of the just 
announced negotiation with Cerner. In the interim, VA is deploying 
VistA Scheduling Enhancement (VSE), a software scheduling solution that 
improves the current system, between June and October 2017.
    Question. Secretary Shulkin--I recently heard from a veteran who 
was referred to the Choice Program for a colonoscopy. It took 3 months 
for his colonoscopy to be scheduled. Veterans should not be waiting 3 
months for colon cancer screenings when an in home test is readily 
available.
    In 2016, the United States Preventive Services Task Force (USPSTF) 
identified several seven strategies to increase colorectal cancer 
screening, designating them as A-rated. An A-rating signifies with high 
certainty that the net benefit of these screening strategies is 
substantial when compared to potential drawbacks.
    New strategies have subsequently been adopted by the National 
Committee for Quality Assurance's Healthcare Effectiveness Data and 
Information Set (HEDIS), measures used by more than 90 percent of 
America's health plans to measure performance on important dimensions 
of care and service. For example, Tricare provides coverage for each 
one of the major strategies included in the USPSTF and HEDIS. The 
enrollees of the VA deserve, at a minimum, the same treatment that all 
military personnel eligible for Tricare enjoy.
    In home tests like Cologuard are approved by FDA, Medicare, 
Medicare Advantage, Medicare Advantage Star Ratings and Tricare. 
However, VA declined to offer Cologuard to veterans because their 
delivery methodology involves sending the test directly to the veteran. 
I have an extremely hard time accepting this reasoning when the VA is 
unable to get a veteran a colonoscopy screening appointment in 3 months 
and then denies a simple solution that can be sent directly to a 
veteran. This saves a veteran a trip to a healthcare facility, yields 
better outcomes and reduces costs to the system.
    If this test is good enough for our active military, why not our 
veterans? If you are not aware of this, can I get your commitment to 
re-evaluate this decision?
    Answer. The United States Preventive Services Task Force (USPSTF) 
recommendations were very carefully reviewed by the Veterans Health 
Administration subject matter expert panel that made recommendations 
for colorectal cancer screening. In their 2016 JAMA publication, the 
USPSTF gave colorectal cancer screening for 50-75 year old individuals 
a grade A recommendation, though they did not give any specific tests a 
graded recommendation. Per this publication, ``the USPSTF found no 
head-to-head studies demonstrating that any of the screening strategies 
it considered are more effective than others, although the tests have 
varying levels of evidence supporting their effectiveness, as well as 
different strengths and limitations.'' The USPSTF stated that 
``Multitargeted stool DNA testing (FIT-DNA) is an emerging screening 
strategy that combines a [fecal immunochemical test] FIT with testing 
for altered DNA biomarkers in cells shed into the stool. Multitargeted 
stool DNA testing has increased single-test sensitivity for detecting 
colorectal cancer compared with FIT alone. The harms of stool-based 
testing primarily result from adverse events associated with follow-up 
colonoscopy of positive findings. The specificity of FIT-DNA is lower 
than that of FIT alone, which means it has a higher number of false-
positive results and higher likelihood of follow-up colonoscopy and the 
risk of experiencing an associated adverse event per screening test. 
There are no empirical data on the appropriate longitudinal follow-up 
for an abnormal FIT-DNA test result followed by a negative colonoscopy; 
there is potential for overly-intensive surveillance due to clinician 
and patient concerns about the implications of the genetic component of 
the test.'' Results from the associated decision-model estimates of the 
benefits, harms, and burden of various colorectal cancer screening 
strategies screened show that FIT-DNA every 3 years results in fewer 
life-years gained compared to annual FIT or colonoscopy (226 life-years 
gained per 1,000 screened with FIT-DNA vs. 244 and 270 with FIT and 
colonoscopy, respectively). The USPSTF further stated that the lack of 
empirical evidence on appropriate follow-up of abnormal results 
``[makes] it difficult to accurately understand the overall balance of 
benefits and harms of this screening test.''
    VA currently offers the option of home screening tests for 
colorectal cancer screening and has for many years. These home 
screening tests are available without delay to Veterans who choose this 
option based on a shared, decisionmaking conversation with their 
healthcare team. VA is very proud of the high rate of colorectal cancer 
screening in our population with these various screening options. A 
recent publication found that 82.3 percent of Veterans insured through 
the VA, TRICARE or other military insurance iwere up-to-date with 
colorectal cancer screening, compared to 80.2 percent of those with 
Medicare coverage, 74.5 percent among those with private coverage, and 
60.1 percent of those with Medicaid coverage (May et al. Dig Dis Sci 
2017;62:1923-1932).
    After considering the available evidence and the above-mentioned 
USPSTF document, the VA expert panel did not recommend Cologuard 
because they felt that the scientific information supporting its use is 
not as mature as that which is available for other colorectal cancer 
screening modalities, including colonoscopy, flexible sigmoidoscopy and 
fecal occult blood testing. The VA colorectal cancer screening 
recommendations are periodically reassessed and are updated, as needed. 
Despite the lack of a formal recommendation from VA, individual VA 
healthcare providers may request tests that they deem are medically 
indicated for individual Veterans. These requests are reviewed locally.
    Question. Secretary Shulkin--during our conversation at the hearing 
on Thursday, May 11, you noted that you while you could not grant my 
full request to remove Health Net from scheduling appointments in 
Wisconsin, you would move forward with a scheduling pilot at the 
Madison VAMC. As of Monday, May 15, Health Net informed me that they 
had received no such request for a contract modification for a Madison 
VAMC scheduling pilot that you mentioned. Can you please provide 
details about this expansion of a scheduling pilot program at the 
Madison VAMC--when will it begin and how will this process change from 
what veterans currently experience in the scheduling process. In 
addition, if you are able to make this contract modification with 
Madison VAMC, why not also include the Tomah VAMC and the Milwaukee 
VAMC?
    Answer. VA is actively engaged in the development of a contract 
modification for the care coordination (scheduling) model with 
HealthNet. As that work continues, we are working closely with Madison 
and Iron Mountain to prepare for implementation of the process changes.

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                      Site                                 Site Assessment              Clinical Assessment           Training              Go Live
--------------------------------------------------------------------------------------------------------------------------------------------------------
Madison                                          Conducted virtually by VA Office      Week of June 26, 2017   Week of July 24, 2017         Mid-August
Wisconsin                                        of Community Care Staff
 
Iron Mountain,                                   Conducted virtually by VA Office
Michigan                                         of Community Care Staff                       End of August        September, 2017     September, 2017
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    The care coordination model enables VA staff to work 
directly with the Veteran to schedule an appointment within the 
VA or with a network provider in the community. The VA staff 
are familiar with the providers and Veterans in their area. 
They are aware of the type of specialty care available within 
the community and can schedule care much more efficiently than 
the contractor. Once the appointment is scheduled, VA staff 
upload the referral information to the contractor portal, and 
the contractor in turn provides the referral information to the 
community provider. When the appointment has been completed, 
the medical documentation is submitted to the VA medical center 
from the community provider for access by the VA referring 
provider.
    Community care staff at the VA have scheduled appointments 
for Veterans under our traditional community care program for 
several years. These interactions enabled them to build strong 
working relationships with the providers in their community and 
with their Veterans. In the care coordination model, VA staff 
leverage these relationships to schedule Veteran appointments 
more quickly and efficiently. As this model is deployed at each 
site, the VA Office of Community Care implementation team 
identifies lessons learned and incorporates strong practices 
from these sites into the model, and this knowledge is applied 
at the next location.
    The VA Office of Community Care has made implementation at 
the Madison, Wisconsin VA Medical Center (VAMC) a priority. As 
a tertiary care facility, the Madison VAMC serves as a 
catchment for the Tomah and Milwaukee VAMCs. Implementation of 
the model in Madison will provide them with processing 
efficiencies and opportunity to renew and strengthen 
relationships with their community providers. This will 
positively affect appointing capability for Veterans who travel 
to Madison from other locations within the Veterans Integrated 
Service Network. The VA Office of Community Care will continue 
to move forward with the roll out of the care coordination 
model at additional locations in the new fiscal year.

                          SUBCOMMITTEE RECESS

    Senator Moran. The hearing is adjourned.
    [Whereupon, at 12:11 p.m., Thursday, May 11, the hearing 
was concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]