[Senate Hearing 118-419]
[From the U.S. Government Publishing Office]
S. Hrg. 118-419
PROVIDING FOR VETERANS: ADDRESSING
CURRENT AND FUTURE VA BUDGET CHALLENGES
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON VETERANS' AFFAIRS
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 18, 2024
__________
Printed for the use of the Committee on Veterans' Affairs
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
56-889 PDF WASHINGTON : 2025
SENATE COMMITTEE ON VETERANS' AFFAIRS
Jon Tester, Montana, Chairman
Patty Murray, Washington Jerry Moran, Kansas, Ranking
Bernard Sanders, Vermont Member
Sherrod Brown, Ohio John Boozman, Arkansas
Richard Blumenthal, Connecticut Bill Cassidy, Louisiana
Mazie K. Hirono, Hawaii Mike Rounds, South Dakota
Joe Manchin III, West Virginia Thom Tillis, North Carolina
Kyrsten Sinema, Arizona Dan Sullivan, Alaska
Margaret Wood Hassan, New Hampshire Marsha Blackburn, Tennessee
Angus S. King, Jr., Maine Kevin Cramer, North Dakota
Tommy Tuberville, Alabama
Tony McClain, Staff Director
David Shearman, Republican Staff Director
C O N T E N T S
----------
September 18, 2024
SENATORS
Page
Hon. Jon Tester, Chairman, U.S. Senator from Montana............. 1
Hon. Jerry Moran, Ranking Member, U.S. Senator from Kansas....... 2
Hon. Richard Blumenthal, U.S. Senator from Connecticut........... 10
Hon. Margaret Wood Hassan, U.S. Senator from New Hampshire....... 10
Hon. Marsha Blackburn, U.S. Senator from Tennessee............... 12
Hon. Tommy Tuberville, U.S. Senator from Alabama................. 14
Hon. Mazie K. Hirono, U.S. Senator from Hawaii................... 16
Hon. John Boozman, U.S. Senator from Arkansas.................... 18
Hon. Bill Cassidy, U.S. Senator from Louisiana................... 20
Hon. Sherrod Brown, U.S. Senator from Ohio....................... 22
Hon. Dan Sullivan, U.S. Senator from Alaska...................... 24
Hon. Angus S. King, Jr., U.S. Senator from Maine................. 27
Hon. Kevin Cramer, U.S. Senator from North Dakota................ 28
WITNESSES
Hon. Shereef M. Elnahal, MD, Under Secretary for Health,
Department of Veterans Affairs................................. 3
Hon. Joshua D. Jacobs, Under Secretary for Benefits, Department
of Veterans Affairs............................................ 5
APPENDIX
Prepared Statement
Joint statement of Hon. Shereef M. Elnahal and Hon. Joshua D.
Jacobs......................................................... 39
Submission for the Record
Statement of Michael J. Missal, Inspector General, Department of
Veterans Affairs............................................... 49
Questions for the Record
Department of Veterans Affairs responses to questions submitted
by:
Hon. Bill Cassidy.............................................. 65
Hon. Angus S. King, Jr......................................... 68
Hon. Jerry Moran............................................... 69
Hon. Thom Tillis...............................................72, 74
PROVIDING FOR VETERANS:
ADDRESSING CURRENT AND FUTURE
VA BUDGET CHALLENGES
----------
WEDNESDAY, SEPTEMBER 18, 2024
U.S. Senate,
Committee on Veterans' Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 3 p.m., in Room
SR-418, Russell Senate Office Building, Hon. Jon Tester,
Chairman of the Committee, presiding.
Present: Senators Tester, Brown, Blumenthal, Hirono,
Hassan, King, Moran, Boozman, Cassidy, Sullivan, Blackburn,
Cramer, and Tuberville.
OPENING STATEMENT OF HON. JON TESTER,
CHAIRMAN, U.S. SENATOR FROM MONTANA
Chairman Tester. I want to call this hearing to order.
Today we are going to discuss a matter that is urgent. It is
providing additional funding to the Veterans Benefits
Administration so it can deliver benefit payments to its
veterans and their families on time.
So the question is how did we get to this point? Simply
put, VA is providing more disability benefits to more veterans
than ever before. From my perspective, that is a part of living
up to the promises of war. It is a good thing. I am aware of
the letters from my colleagues that are blasting the VA for
moving too quickly to provide benefits under the PACT Act. But
the message I have heard from the veterans in my treasured
State of Montana and across the country has been very clear.
These folks have approached us at events in our states. They
have written letters and emails, and they have gone out of
their way to express gratitude to Congress and the VA, and to
let us know these benefits are having lifesaving effects.
Many of them, particularly the Vietnam era veterans, waited
decades for these benefits. It is shocking to me that some are
now telling them that they should have to wait longer because
the price tag was too steep. Look, we knew addressing long-
ignored issues like toxic exposure is going to cost a few
bucks, but it is the right thing to do.
Over the past 2 years, VA has approved nearly 1.2 million
PACT Act claims and more than 335,000 veterans have enrolled in
VA health care, thanks to the PACT Act. Like I have always
said, if people up here have a problem addressing the true cost
of war they should not send these folks to war to begin with.
Today I am hopeful the Senate is finally going to act on
this supplemental funding. It is not the time for partisan
politics--that typically has not been the case on this
Committee--or for misleading rhetoric about a manufactured
crisis. It is time to act, to ensure that 7 million veterans
and their families are not left wondering whether they will
receive their benefit checks in 13 days, because it runs out
September 20th.
With that said, we need to have a serious conversation
about how the VA can better account for emerging trends in its
budget, potential disruptions of care, where benefits are in no
one's interest. And I have a lot of questions about the fiscal
year 2025 shortfall within the Veteran Health Administration,
particularly about what is driving these unexpected costs. And
as we look toward providing sufficient longer-term funding for
the Department, I am working in a bipartisan, bicameral way to
ensure that we are requiring more transparency and reporting
from the VA on budget projections and execution.
As we head down the road, I hope the colleagues on this
Committee will work constructively, as always have, to ensure
the Department has the resources it needs to take care of those
have borne the battle. That is, after all, why this Committee
exists.
With that, Senator Moran, I will turn it over to you.
OPENING STATEMENT OF HON. JERRY MORAN,
RANKING MEMBER, U.S. SENATOR FROM KANSAS
Senator Moran. Chairman Tester, thank you. I asked for this
hearing. Thank you for agreeing to that request. And I would
expect my colleagues, and probably your colleagues, to join us.
Chairman Tester. Yes, they will.
Senator Moran. I do not know that I need to have a
conversation about providing benefits. We are for that. When
veterans are entitled to benefits we want them to receive them.
But here is what troubles me is the lack of budgeting
accountability, knowing the facts in time to make better
decisions. And what is really troublesome to me is the lateness
in which this issue arose. And I will explore, in my questions
with the two of you, the nature of what transpired that led us,
in my view, for Congress to be unaware. And the reality is that
whatever the reason for the need for additional authority, we
were not told. We were not told until after the Appropriations
Subcommittee marked up its bill. In fact, we were told the next
day. And we were not told by OMB that this was coming. And no
reason to tell us, I suppose, is my theory, when we are trying
to figure out the allocation between domestic spending and
defense spending.
So my complaint today is really with the level of trust and
respect that I would hope we have from the Department of
Veterans Affairs. I know the leadership and many people who
work there. You all do a really good job of communicating with
me on an ongoing basis. But if you do that on things unlike
this significant shortfall, I am troubled on why you would not
call and inform us about the problems that are arising so that
we can make the decisions at the appropriate time and avoid
this--I mean, this is important. What happens today and
tomorrow on this issue in the Senate matters in whether
veterans and their families receive benefits on time.
And Congress could have handled this in a different way,
but it seems to me that the VA and the OMB, they failed to just
pay the respects to the U.S. Senate, and to Members of the U.S.
Senate and this Committee that they know.
And so my complaint is the nature of lack of notice and
knowledge, and it seems to me--I hate it when newspaper editors
put motives behind my actions. They do not know what really
went on, and maybe I will learn. But it seems to me the motives
were to have Congress make decisions before we had the facts.
That is wrong, and I expected something different from the
people I know and work with at the Department of Veterans
Affairs. Thank you.
Chairman Tester. Well, hopefully you will be able to
address some of those questions in your opening statements, and
not all of them.
I want to thank the witnesses for being here today. It is
not the first time that Dr. Elnahal and Josh Jacobs have been
in front of this Committee. Dr. Elnahal is the Under Secretary
for Health. Josh Jacobs is the Under Secretary for Benefits at
the Department of Veterans Affairs.
You will each get 5 minutes. Know that your entire written
statement will be a part of the record.
And with that, Dr. Elnahal, you get to start.
STATEMENT OF HON. SHEREEF M. ELNAHAL, MD, UNDER SEC-
RETARY FOR HEALTH, DEPARTMENT OF VETERANS AF-
FAIRS
Dr. Elnahal. Thank you, Mr. Chairman, Mr. Ranking Member,
and Members of the Committee.
At VA we are on a mission to provide more care to more
veterans than ever before. And since the historic expansion of
benefits under the PACT Act, our commitment has been to enroll
as many veterans as we can into VA care, because we know it is
the best and most affordable care for veterans.
On March 5th we made new groups of veterans eligible for VA
health care years earlier than required by the law, including
every veteran deployed to a Post-9/11 mission, regardless of
their condition or service-connection. Any toxic-exposed
veteran, exposed at home or abroad, now also qualifies for
direct enrollment. We have held thousands of outreach events
across the country over 2 years to meet veterans where they
are.
At our VetFest event this year in Fayetteville, North
Carolina, we met Vietnam veteran Danny Cox. Years ago, Danny's
service did not qualify him for VA health care, and he did not
have high expectations. So he was, quote, ``over the moon'' to
learn that thanks to the PACT Act he was now eligible to
enroll. He told us that not only does he appreciate that his
health care team knows veterans but that this will help his
family also financially. He now tells every veteran he knows to
get care at the VA.
We have enrolled veterans like Danny at historic levels.
Since President Biden signed the PACT Act, 740,000 veterans
have enrolled in VA health care, 33 percent more than the
equivalent period prior to the PACT Act. Further, 900,000
veterans saw their priority group increased, reducing their
out-of-pocket costs and in many cases allowing them more care
options like long-term care and dental care.
We are also delivering more appointments to veterans than
ever before. We are on track to exceed last year's record and
deliver over 130 million appointments this fiscal year between
our direct care system and the community. And we are exceeding
previous records in pharmacy and prosthetics with 5 percent
more prescriptions and 10 percent more prosthetics delivered
this year than last.
To prepare for this record-breaking delivery of much-needed
care to veterans, we embarked on a historic hiring effort in
2023. Despite industry-wide headwinds in recruitment and
retention, last year our workforce grew at rates not seen in 15
years. That includes increases in critical occupations, most
notably physicians, nurses, medical support assistants, food
service workers, housekeeping aides, and more. Hiring more than
60,000 health care workers was the right decision to ensure
that we had the capacity to meet the needs of veterans.
We also placed an emphasis on improving clinical
productivity, holding a series of what we called access sprints
earlier this year. Over just a couple of months, our teams
across the Nation made it easier and faster for veterans to
access VA care by offering night and weekend clinics, by
increasing the number of veterans scheduled into daily clinics,
and more. We continue to see the impact today with wait times
in the direct care system down for both primary care and mental
health new patient appointments.
Further, we are leveraging every modality of care to open
VA's doors wider for veterans. Since the start of the pandemic
we have seen telehealth episodes triple, utilization of
clinical resource hubs, home-based primary care, and e-consults
all show rapid increases, even just over last year. And I am
happy to report now that all of our VSNs have access to tele-
emergency care services for veterans.
Across all of our efforts we have prioritized veteran
feedback about their care, and of course care quality and
outcomes. Earlier this month we were proud to announced that VA
hospitals outperformed non-VA in CMS's star ratings for quality
and patient safety for the second year in a row, and for
patient satisfaction, for the ninth consecutive quarter in a
row. Most importantly, we continue to see improvements in
veteran trust, which reached an all-time high of 92 percent of
veterans telling us that they trust us for their outpatient
care.
As we have communicated throughout the year, we continue to
exceed even the most aggressive expectations for care growth
delivered this year. That is growth in services to veterans,
along with factors such as rising costs for pharmaceuticals and
prosthetics, and continued year-over-year growth in the need
for community care referrals, which has resulted in the need in
totality for additional funds.
We have requested an anomaly of $12 billion for the
potential medical care shortfall going into FY 2025. Without
these resources, VA will be forced to make difficult cuts, most
notably to outreach, care coordination, and more. This funding
is necessary to continue to deliver more care to veterans than
ever before and maintain our achievements in quality, access,
and all-time high veteran trust.
Chairman Tester, Ranking Member Moran, Members of the
Committee, thank you again for the opportunity to appear before
you today.
[The joint prepared statement of Dr. Elnahal and Mr. Jacobs
appears on page 39 of the Appendix.]
Chairman Tester. Thank you, Dr. Elnahal. Josh Jacobs, you
are up.
STATEMENT OF HON. JOSHUA D. JACOBS, UNDER SECRETARY
FOR BENEFITS, DEPARTMENT OF VETERANS AFFAIRS
Mr. Jacobs. Good afternoon Chairman Tester, Ranking Member
Moran, and Members of the Committee. Thank you for the
opportunity to appear before you today.
As you know, VA is currently delivering more benefits to
more veterans and survivors than ever before, which is largely
a result of the historic Sergeant First Class Heath Robinson
PACT Act, as well as our unprecedented efforts to reach out to
veterans, family members, and survivors proactively and connect
them to their earned benefits.
Veterans like Oscar, a former active duty Army and Colorado
Air National Guard veteran who served two tours in Iraq. A few
years ago, Oscar received the devastating news that he had
advanced cancer. He submitted his claim for what he already
knew was a terminal condition so he could ensure the family he
loved was taken care of after he passed away. But since his
claim was submitted and decided before PACT Act became law,
Oscar's claim was denied.
When President Biden signed the PACT Act into law in August
2022, Oscar's county Veteran Service Officer in Colorado, Chad
Ferris, immediately gave him a call and walked him through the
steps to reapply for his claim. Tragically, Oscar passed before
learning that he had been granted a 100 percent service-
connection for his cancer. But thanks to Chad's persistence and
the provisions in the PACT Act, Oscar's surviving spouse and
four children became entitled to benefits in his name.
Thanks to the generous resources and authorities provided
by Congress, we utilized the authority provided by the PACT Act
to make all presumptives effective the day the bill was signed
into law rather than spreading implementation over several
years. We also began processing all PACT claims on January 1,
2023, instead of waiting 18 to 24 months for the completion of
the rulemaking process, as is typically standard. We make these
decisions so that millions of veterans who were subjected to
toxic exposures while fighting for our country could receive
the benefits they earned as quickly as possible.
In the 2 years since the PACT Act was signed into law, VA
has delivered over 1.2 million PACT Act benefits, equating to
more than $7 billion, to veterans and survivors. In FY 2023,
veterans and survivors submitted 39 percent more claims
applications than 2022, an all-time record.
Today, more veterans and their families are receiving
earned benefits than ever before. In this fiscal year alone, VA
has already granted more than 1.1 million benefits, over half
of which are PACT Act-related, delivering $154 billion in
benefits to veterans and survivors, another all-time record.
And it is not just PACT Act claims that have led to this
increase. Thanks to the largest, most aggressive outreach
campaign in VA history, veterans, family members, and survivors
are applying for a variety of benefits at higher numbers than
ever before. To give you an idea of our efforts, since January
1, 2023, we have held almost 18,000 events that included PACT
Act briefings, with over 1.8 million direct engagements with
veterans or their family members. This includes processing
applications for education benefits, insurance, home loans, and
more.
When a veteran applies for benefits, our goal is to work
with them to gather the necessary evidence to get to yes. And
with this approach, we have granted benefits for 65 percent of
claims and 75 percent of PACT Act-related claims, a sharp
increase from previous years.
Despite setting aggressive projections at the beginning of
the year, the record-setting benefits delivered to veterans
have exceeded our expectations and resulted in the need for an
additional $2.883 billion in FY 2024 funding for mandatory
benefits payments. This is money that goes straight into the
pockets of veterans and their survivors.
These funding estimates are conservative to ensure
sufficient funding is available to get through the fiscal year
and deliver on the promise to provide veterans their earned
benefits on time, especially as VA continues to break records
in benefits and health care delivery. Any funding shortfall of
even $1 would prevent VA from processing its September pay
file, and as a result delay benefit payments to approximately 7
million veterans and survivors.
We are committed to being transparent with Congress as well
as veterans and their families on this issue. We were not
willing to take the risk of potential delays in payments that
veterans and their families have earned and deserved, which is
why we elevated this risk as soon as we validated the potential
need and why we are making changes to future budget projections
so we do not find ourselves in this situation again.
Our commitment remains steadfast. We are focused on
delivering more benefits to more veterans and survivors more
quickly than ever before.
Thank you for your continued support. I appreciate the
opportunity to appear before you today and look forward to
continuing to work with you to improve veteran outcomes, and I
am ready to answer any questions you or other Members of the
Committee may have.
Chairman Tester. Yes, thank you, Josh, and there will be
plenty of questions, and I want to thank you both for your
testimony.
Look, in my tenure on this Committee this is not the first
time VA has asked for additional funding. In this instance, the
VA has, as you have already pointed out, Josh, and you too, Dr.
Elnahal, had a very successful outreach around the PACT Act. It
has prompted greater numbers of veterans, survivors, and
beneficiaries to apply and to get those benefits.
So the question is twofold, Mr. Jacobs. Number one, how did
we end up here, and could you explain the timeline that the
Ranking Member brought up in his opening statement, and why the
timeline was what it was.
Mr. Jacobs. Senator, thanks very much for that question.
The reason we find ourselves in this situation is frankly our
workforce has overdelivered on what were already aggressive
projections. For the last year we have delivered more benefits
to more veterans than at any other time in our history. Last
year we delivered nearly 2 million claims decisions. We set
projections that we would deliver 2.2 million claims
projections. And in the spring, when the Secretary testified
before Congress about our budget we were on track, looking at
our projections and our actuals.
What happened is, in July, as part of what we call the mid-
session review, a statutorily mandated process, we updated our
projections based on the most recent experience, and we
identified that there was potential for us to actually deliver
2.5 million claims decisions. So, as we updated those
projections, we then had to work to verify and validate that
the assumptions we were making were, in fact, possible. And as
soon as we did that we communicated the risk and that potential
need to Congress.
Chairman Tester. Okay. What percentage of the requested
mandatory funding is administrative or overhead expenses, and I
would guess that the remainder would go to straight to the
veterans. Correct?
Mr. Jacobs. Mr. Chairman, none of the funding that we have
requested is administrative. The entirety of the funding is
going to support the delivery of care and benefits.
Chairman Tester. Okay. Thank you. You talked about it a
little bit but I want you to talk about it a little more. Tell
me what is the impact on veterans and their survivors if
Congress does not do what we need to do, and get the $2.883
billion out and then ultimately address the issue in next
year's budget.
Mr. Jacobs. The risk of not receiving these funds by the
20th is that the funds would be delayed in terms of their
delivery to veterans. Over many years, we have developed----
Chairman Tester. So talk about that delay. Are we talking a
delay of week or 2 weeks, or are we talking--how long?
Mr. Jacobs. Well, the majority of the funds that we provide
are delivered through direct deposit, so 98 percent of our
compensation and pension funds are delivered that way. We do
have the ability to compress that timeline. The challenge is it
increases the risk that something breaks in the process. But we
can move that up, and working closely with Treasury find ways
to compress it.
The real risk is that 2 percent of veterans and survivors,
140,000, the most vulnerable of our customers, many living in
rural areas, more health conditions, older, would have a delay
of up to 2 weeks.
Chairman Tester. Okay. And don't think I don't want to pick
on you too, Dr. Elnahal, but this is another question for Mr.
Jacobs. What new budgeting processes have you implemented since
discovering the shortfall to capture the costs related to the
PACT Act, so that you can more accurately account for what the
needs are out there, so we are not going to be here next
September?
Mr. Jacobs. Yes. We have updated our outyear projections
for 2025 and 2026. One of the main lessons here is we cannot
underestimate the ability of our workforce to overdeliver.
We are also working to increase the average rate at which
disability, the average disability rating, increases. For the
last several years we have seen an average increase in the
disability rating of 1 percent. What we are seeing is it is
actually increasing at a faster rate, at 2 percent. So we are
updating those projections to make sure that we account for the
total cost increase, and then we are going to continue to work
to refine that.
We have also worked to more frequently provide reports to
Congress, to this Committee, to ensure that we are sharing with
you monthly comparisons of actuals to projections, to make sure
that we have got transparency and close lines of
communications.
Chairman Tester. I think you have already answered this
one, but I am going to ask it anyway. Do you have all the tools
you need to be able to address, authorities and resources you
need to be able to address the issue?
Mr. Jacobs. Yes, sir.
Chairman Tester. Okay. Thank you. Ranking Member Moran.
Senator Moran. Thank you, Mr. Chairman. Mr. Jacobs, I
understand you are the one who is responsible for briefing OMB
monthly on mandatory spending for veteran benefits. At what
monthly briefing did you inform OMB of this issue? And how long
after did you inform Congress?
Mr. Jacobs. Senator, our Chief Financial Officer is engaged
in those briefings, but what happened is in June, as part of
the midsession review, we identified this need. We then
elevated it, once we were able to verify the concerns and the
assumptions here, and then communicate it to Congress.
Senator Moran. Let me ask it this way. Are you telling me
that the decision to notify Congress when you did--let me put
what I think the facts are. You just indicated that OMB was
notified in June. The MilCon-VA Appropriations Subcommittee did
not mark up a bill until July. And why did the VA wait until
the day after that markup to start formally notifying Congress?
Mr. Jacobs. Senator, we had to work through a process of
verifying and validating that our assumptions were right. So my
recollection is this all happened toward the end of June, and
we had a series of meetings with OMB to verify that the
assumptions we were making, in terms of the updated
projections, were sound, so a red team analysis, if you will.
We had to work through that process and balance the need to
ensure both timely reporting but also accuracy.
Senator Moran. No thought within the Department's
leadership that in the period of time between June and July
that it might be useful to let Congress know that maybe
something is happening, before we make our decision about how
we allocate spending between domestic spending and military
defense spending?
Mr. Jacobs. Senator, I want to personally apologize for not
calling you myself, as you referenced in your opening
statement. One of my lessons here and one of our lessons is we
will provide earlier communications. I will also say we did not
have a high level of confidence that we were working to get
independent verification that the estimate was, in fact, real
and the needs were verified.
Senator Moran. I appreciate the suggestion that there be
additional communication, but let me also point out that
Secretary McDonough responded to a letter from Chairman Tester
and me on this topic in May, and I quote the letter. ``We have
the nationwide staffing totals we need to deliver the services
to our Nation's veterans.''
In addition to that, the Secretary's testimony has always
been that we seem to be doing fine, and if we need any
additional help we will let Congress know. And what I have seen
in the press, that has been the explanation. Well, we told
Congress that we might need their help, so we do not feel like
we were not disclosing appropriately.
But it does seem to me that the lack of certainty with
you--you claim that you did not know for certain about the
amount of money, but you knew that something was happening, and
in both the letter and in testimony the indication would be
Congress would be informed. And it has a lot of consequences as
we do our appropriations process. And as I said, we only know
this after we mark up MilCon-VA.
Let me move on a bit. Mr. Jacobs, one of the documents that
the VA shared regarding the shortfall indicates a projected
additional need next fiscal year of approximately $22 billion.
Is that accurate?
Mr. Jacobs. I believe it is in that range, $20 billion or
so. Correct.
Senator Moran. And, let me, because we have not had the
chance to talk about this issue in a hearing, and I do not
think we have been in this room for months, I want to talk
about the bonuses. Both of you used the authority, your
authority, to award bonuses ranging up to $100,000 for 182 VA
senior executives in the VA Central Office. A total of $10.8
million in CSI payments were spent this way. Is this
appropriate? Are you satisfied with the decision that you made?
Is there any admission that it is a mistake or it is just that
Congress caused an uproar and it did not look good and you
tried to alter the circumstances that you created?
Mr. Jacobs. Senator, we made a mistake, as an organization,
and I made the mistake personally in the way that we handled
the CSI payments to senior executives in Central Office. And as
we identified and reported with the Inspector General, once we
confirmed the mistake we communicated to you, to this
Committee. We began the process of recoupment, and we have, to
date, recouped 93 percent of the bonuses, or the CSI payments,
and we are in the process of getting the remainder.
But what I will tell you is I am mindful that trust is a
key priority for us, and that if we do not have trust we are
not going to encourage veterans to access their earned
benefits. So to the extent my actions and the Department's
actions imperil that trust, I want to apologize and take
ownership for that and make sure that we never repeat that
mistake again.
Senator Moran. Trust is important, and communication is a
significant component of the capability of having trust. And I
would encourage you, again, the Secretary and both of you are
very kind in the number of times in which you call and give me
information. You just referenced one of them. But it seems to
me that when the billions of dollars that we had in shortfall
appeared, that this circumstance was worthy of that same kind
of notification so that we could make decisions. And not just
me and not this Committee but the appropriations process and
the leadership of the House and Senate. Thank you.
HON. RICHARD BLUMENTHAL,
U.S. SENATOR FROM CONNECTICUT
Senator Blumenthal [presiding]. I am substituting for
Chairman Tester.
Senator Moran. You are doing a very fine job. I like this.
Senator Blumenthal. Well, don't reach any hasty judgments.
With your guidance I am sure I will. Senator Hassan.
HON. MARGARET WOOD HASSAN,
U.S. SENATOR FROM NEW HAMPSHIRE
Senator Hassan. Thank you, Senator Blumenthal. My thanks to
the Chairman and Ranking Member Moran for this hearing. Look,
the VA does essential work to provide care and benefits to our
veterans including through the PACT Act. But I join my
colleagues in being very concerned about the budget shortfall
caused by the VA's miscalculations, and so are the Granite
Staters who have reached out to my office.
As I discussed at a recent roundtable with veterans in New
Hampshire, while I am pleased that the VA has provided services
and benefits to many PACT Act veterans, it is unacceptable that
the veterans benefits are now at risk due to the VA's inability
to properly plan for that very influx of PACT Act veterans. The
VA has to do better. We have to do better.
Mr. Jacobs, I wanted to start just by following up on your
answer to Chairman Tester's question about what are you doing
to make sure that this kind of budget miscalculation does not
happen in the future. You said, if I heard your answer
completely, essentially that you made some mistakes with
projections, you know, how fast and well the workforce could
work, but also some other projections. But what, in the
processing moving forward, are you changing so that this does
not happen again?
Mr. Jacobs. I think that the largest driver in the process
are the inputs and the assumptions. And it is also going to be
the frequency with which we report out, to make sure that we
are transparent.
In the springtime, what we identified is that our spend
plan was nearly on track with our projections. And so we were
maybe half a percent off for both the education and the comp
accounts. And so we will continue to do that and make sure that
as we update our projections we can communicate transparently
and with vigor.
Senator Hassan. And I think from what you are hearing from
the Ranking Member, and I assume you will hear from others,
with communication as frequently as you can with us, even when
you are not quite sure what the actual information is going to
turn out to be.
Dr. Elnahal, I want to turn to you and health care. As the
VA has provided health care to more PACT Act veterans, the
Department is living up to its mission of caring for those who
have served. That care, though, is not confined to 1 year or
one budget cycle. It is a lifelong commitment that our country
has rightly made to our veterans.
The veterans now covered through the PACT Act are going to
receive care through the VA for decades to come. So what is the
VA doing to ensure that it accurately projects the level of
resources, including funding, that is necessary to provide
health care for our veterans in the long term?
Dr. Elnahal. Thank you for the question, Senator. The main
driver, as my colleague mentioned, for our need for additional
funds is greater care delivery than ever before to more
veterans than we anticipated, both enrolling and having their
priority groups increased because of the hard work that VBA
employees have done to grant more service-connection.
And so our efforts to improve our predictive models for our
budget needs are going to take better into account three main
factors. The first is our unprecedented outreach. Historically,
VA has not necessarily been present in communities where
veterans are, at nearly the frequency where we are now. And I
hope to be able to make sure that we project the results of
that, which is more veterans finding out about their earned
benefits and health care opportunities and enrolling with us.
The second is the combined policy effects of the MISSION
Act, which has allowed more veterans to get care in the
community to meet their needs across the country, and also the
PACT Act, because of the dynamic I mentioned around priority
group increases, which confer new health care opportunities to
veterans in long-term care, dental care, and other services.
Now this, I think, was an underappreciated factor in our
projections, and we will make sure that we take them into
account into the future.
But the combination of policy and unprecedented outreach,
Senator, we have to take those better into account as we
project future budget needs.
Senator Hassan. Right. And just to be clear, when I am
meeting with my veterans, a lot of them still do not feel like
they get great outreach, and a lot of veterans still tell me
they were not fully aware of the range of benefits or health
care available to them. So you guys are really going to need to
kind of think through the ripple effect here, right, and the
compounding effect, which is a good thing that we should be
hoping will happen. But what are really looking for is
processes that will capture that, right?
Dr. Elnahal. Yes.
Senator Hassan. I may follow up a little bit more on that,
but I just wanted to close with adding my concerns about the
improper issuing of bonuses. The VA Inspector General's Office
found that the awarding of almost $11 million to Central Office
executives within the VA, the VBA, your respective offices,
were inconsistent with both the PACT Act and the VA policy. So
this was not just a mistake. You have got the Inspector
General's Office saying you guys just did not follow the law
and follow the policy.
I know that you have worked to recoup the bonuses, but with
the Chair's permission I would like you both just to talk a
little bit more about how you can explain your role in and
responsibility for the improper issuing of these bonuses, and
how do you plan to ensure that it does not happen again. Mr.
Jacobs.
Mr. Jacobs. Senator, we had a number of process
shortcomings, so we did not have the right level of lawyers to
review. There were concerns that were raised within our HR
function that did not get elevated. So we have to improve who
is involved in the decision-making process. We also have to
ensure that we have the right level of independence so that
there are no conflicts of interest. Part of that process is to
ensure that all CSI payments in the future that go to
executives are delegated to only be approved by the Secretary.
Senator Hassan. Dr. Elnahal.
Dr. Elnahal. Senator, to just add to that, my ownership of
my personal mistakes, mistakes made within our health care
system on this, they simply will not happen again because my
attention will be on implementing all of the IG's
recommendations.
And finally, I think one of the biggest gaps was not
bringing this proposed set of incentives forward to our broader
governance process so that our General Counsel's Office, our
Human Resources Office, senior leadership, and other really
important stakeholders could have weighed in. In my case, we
issued incentives to many more executives than I had originally
anticipated. All of this would have been caught if we had put
the proposal through our governance, and it will not happen
again, Senator.
Senator Hassan. Well, that is good to hear. Just be aware
that other offices at the VA did not take this opportunity to
give bonuses to senior executives because I think they
understood that was not the intention of the bonus system.
Thank you, Mr. Chair.
Senator Blumenthal. Thanks, Senator Hassan. I would be next
but I am going to defer to my colleagues who are here. Senator
Blackburn.
HON. MARSHA BLACKBURN,
U.S. SENATOR FROM TENNESSEE
Senator Blackburn. Thank you so much, and thank you all for
coming back to visit with us. I think you know we are all
concerned about the shortfall, and hopefully we get legislation
over here this week from the House that is going to patch that.
I have listened to your answers, and honestly, I do not
see--there is a lot that just does not seem to add up. How you
could not have seen this coming is perplexing. So talk to me
for just a minute about the added transparency and what you are
going to do to improve that annual budget process. You were
saying you were looking at $20 billion more in benefits. I
think that is right, Mr. Jacobs.
And Senator Sullivan has proposed a bill, and I am co-
sponsoring this, that would require you to provide regular in-
person budget reports to Congress, because your numbers have
been so far off, and your expectations have been so far off. So
I would love to hear from each of you on that.
Mr. Jacobs. Senator, I would be happy to increase
transparency and communication. We previously provided
quarterly spend rates. Right now we have increased that to
monthly, and I would be happy to do that in person. The
approximately $3 billion that we have requested in mandatory
funding is a little less than a week's worth of payments that
we provide to veterans and their families. So in terms of where
the projections were relative to the total amount, relatively
small but obviously a large dollar amount.
In terms of the process improvements, we are making certain
adjustments to our inputs and the assumptions. I discussed that
a little bit earlier about the total number of vets served and
the average rate of increased disability compensation. And then
as we do that we will continue to communicate with this
Committee and others in Congress to make sure we are----
Senator Blackburn. Okay. Let me ask you this. Was the
communication gap that caused this shortfall, was it between
the veterans and the case worker, the case worker and your
offices? Where did your numbers fall--how did you get so far
off track? And I know you have said, well, we have done more
outreach, well, we have done this, well, we decided to change
how the PACT Act was going to be implemented. But there should
have been some form of communication that said we have got a
hiccup in the system and we need to fix this. And to have come
before us and not brought it forward and then immediately,
after say, hey, we have got a problem, it looks very
suspicious.
Our job is to make certain that veterans get what benefits
they are entitled to.
Mr. Jacobs. Senator, as we were monitoring our spend plan
and comparing the actuals versus the projections, what we
identified in the second and third quarter is that we were
actually quite close, and in fact our spend rate for
compensation and pension was actually under the projections.
What transpired and changed in that June/July timeframe is
we updated our projections. So based on new analysis we
identified the potential risk for the need of additional
mandatory funding. And the challenge----
Senator Blackburn. So you do not do this on an ongoing,
rolling basis. You periodically do updates. So do you need
different technology?
Mr. Jacobs. No, Senator. I think what we have to do is just
continue to maintain frequency.
Senator Blackburn. Okay. All right. Dr. Elnahal?
Dr. Elnahal. Senator, absolutely. So we made very explicit
policy decisions, including accelerating eligibility for many
more categories of veterans as of March 5th of this year. Fifty
thousand veterans have since enrolled from that authority
alone, on top of three-quarters of a million veterans since the
PACT Act was signed.
We should have been more communicative. I will definitely
concede that to you, and we will work on that. We have been
monitoring budget execution, as we normally do, every single
month. The main driver of this is delivering more care to
veterans than ever before. And we stand by our decision to open
the doors into the health care system for more veterans, but I
pledge to you that we will be as transparent as possible as we
move forward, and we do think this is a good investment for
future veteran care into the next fiscal year.
Senator Blackburn. Okay. Let me ask you one quick thing
about the CSI bonuses, because I think this was astounding that
bonuses of up to $100,000 were being given. Were any of these
individuals that got bonuses working remote, part-time, or were
all of them in-person 5 days a week?
Dr. Elnahal. So we have a policy for our headquarters,
Senator, where folks have to come in 5 days per pay period,
which is 2 weeks, so about 5 days every 10.
Senator Blackburn. So they are able to work remote, part-
time, and they are going to get $100,000 bonus, and we have a
budget shortfall that we cannot take care of the veterans and
provide them the benefits they have earned.
Dr. Elnahal. Senator, listen, I concede that we made
mistakes on this. As soon as we discovered, especially in my
case----
Senator Blackburn. My time has expired. I am going to send
it back to the Chairman.
Senator Blumenthal. Thank you, Senator. Senator Tuberville.
HON. TOMMY TUBERVILLE,
U.S. SENATOR FROM ALABAMA
Senator Tuberville. Thank you, Mr. Chairman. Thanks for
being here today, both of you. Very important. You know, our
VA, especially in my state we have so many veterans that we do
it the right way. We give the best possible care, biggest
health care system in the world. I get more complaints about
this than probably anything that I do, but we have just got to
make sure taxpayer dollars are spent in the right way, but we
want to take care of our veterans.
First of all, bonuses. Mr. Jacobs, are these for doctors or
administrators, these bonuses?
Mr. Jacobs. The majority of the CSI payments that have been
paid out by the Department are going to frontline workers, and
that ranges from environmental technicians who are keeping the
hospitals clean to HR staff. The CSI payments that were
provided inappropriately were done to leadership in Central
Office.
Senator Tuberville. Is this merit based or seniority?
Mr. Jacobs. So the requirements under the law are that they
are positions that are in high demand and short supply, and the
jobs that are relative to their specific position and critical
skill.
Senator Tuberville. You know, we talked about projections.
How often are your projections internally verified? I mean, do
you internally go back, have people checking? How often does
that happen?
Mr. Jacobs. It is several times a year. We work to update
our projections. We have two teams, one in the Office of Field
Operations, one in our what we call the PA&I, Performance,
Analysis, and Integrity team. They run different models and
they work against one another to verify the projections and to
stress test it. We then do that again, as we did most recently
in June, where we worked to update the projections versus
actuals, based on the new real-time data that we have
identified.
Senator Tuberville. As much money as we are talking about
here, do we use any outside accounting or entities to go
through these projections at all, or is it just all in-house?
Mr. Jacobs. I believe it is in-house. I would have to
double-check and make sure that I am not unaware of any
additional outside review for the VBA process.
Senator Tuberville. All right. Mr. Elnahal, 2025, I think
my staff was briefed that we are going to have a $22.6 billion
shortfall. Is that correct?
Dr. Elnahal. It is about a $12 billion potential shortfall
into fiscal year 2025 for medical care.
Senator Tuberville. Yes, 425, we projected that for the
year 2025, or is that what you are talking about?
Dr. Elnahal. For fiscal year 2025, yes, Senator.
Senator Tuberville. Okay. Mr. Elnahal, since the PACT Act,
the VA has announced that they have hired more personnel than
ever before, and at the same time community care referrals,
especially in my state, have continued to go up. Health care
providers in the Gulf Coast VA health care system have told me
and my staff that they are overwhelmed with patients and they
are having to heavily lean on community care, which the VA
claims is a leading cause of the VHA's budget problems in the
first place.
How can we be confident the VA's long-term hiring strategy,
given the increase in hiring, should mean less community care?
I mean, to me that is an oxymoron there.
Dr. Elnahal. Well, Senator, we need this $12 billion to
grow both direct care and community care, and we are up 10
percent in established patient appointments, nearly 7 percent
in new patient appointments.
Senator Tuberville. So we are hiring more people, right? We
are hiring more people.
Dr. Elnahal. That is right. So we are delivering more care
in the direct care system, Senator. At the same time, we are
also at about a 14.5 percent growth rate in the community care
budget. So the $12 billion will support growth in both
accounts, direct care and community care, for veterans, and
also help us pay for increasing costs for pharmaceuticals and
prosthetics that veterans need.
Senator Tuberville. Yes. And with this PACT Act we were
hoping this would happen, people would come and take advantage
of this.
Dr. Elnahal. Yes.
Senator Tuberville. So what is the VA's plan to prioritize
health care worker hirings, especially in mental health?
Dr. Elnahal. Well, Senator, even during this fiscal year,
which has been a tighter picture than recent years, we have
told our medical centers to strategically hire especially in
mental health, but where veterans need it, clinical care the
most. So as a result we have actually grown by just over 2
percent this fiscal year, even though our original goal, in
terms of maintaining our all-time high veteran trust, quality
and patient safety outcomes, we thought we could achieve that
goal with level staff.
But our medical centers did the right thing and hired
anyway because that is what they felt we needed, and they have
been delivering on it with more productivity and more care to
veterans. So the additional money will allow us to grow further
by an additional 5,000 employees, to be able to meet even
further needs.
Senator Tuberville. So since the PACT Act the last 2 years
have we seen more people come for help with mental health?
Dr. Elnahal. Yes, Senator. The mental health demand is
significantly up, 15 percent more new patient appointments in
mental health this year than last year. And we also have
increases in all categories of mental health, including
telehealth episodes of care.
Senator Tuberville. I hope we are looking at the new
avenues of mental health, helping mental health. There are some
things that hopefully we get in the next budget that we can
help doctors with it, or really helping PTSD. I know for a fact
that they have helped in the VA in Arkansas. A friend of mine
runs the VA there that has really helped. It is going to cost
money, which everything does, especially in health care.
Thank you very much. Thank you, Mr. Chairman.
Senator Blumenthal. Senator Hirono.
HON. MAZIE K. HIRONO,
U.S. SENATOR FROM HAWAII
Senator Hirono. Thank you, Mr. Chairman. So I realized that
we are going to need, that Congress will need to provide you
with close to $3 billion just to get us through, what, this
current fiscal year?
Dr. Elnahal. Yes, Senator.
Senator Hirono. And then you are going to need another
close to $12 billion for fiscal year 2025. So yes, you have
been asked questions about how your budgeting process and your
ability to accurately determine what the fiscal needs are. So
do you have the--this is for both of you--do you have the tools
that you need to accurately project your funding needs, and
whether that projection could come to us earlier in the year
than this kind of--I view a $3 billion request right now, which
we have to do, I believe, in the Senate tomorrow or today, you
just cannot keep doing it this way.
So do you have the tools that you need? Do you have the
people with the ability to make this assessment? Do you have
whatever other tools that you need to make better predictions?
Dr. Elnahal. Senator, from a VBA perspective I believe we
do have the tools. I think one of the key lessons learned is
that we should not underestimate our workforce. They
overdelivered on what we thought were already aggressive
projections. So we are increasing the total number of veterans
we anticipate being able to serve.
Senator Hirono. Excuse me. What do you mean by ``they
overperformed''?
Dr. Elnahal. So at the beginning of this fiscal year we
projected that we would be able to deliver 2.2 million claims
decisions, which was about 200,000 greater than we were able to
do in the previous fiscal year. And we have already surpassed
2.4 million, and we are on track to complete 2.5 million claims
decisions. So we are delivering more benefits to more veterans
than at any other time in our history.
Senator Hirono. So in terms of your claims decisions you
have gotten a lot better?
Dr. Elnahal. Yes, Senator.
Senator Hirono. That is good.
Dr. Elnahal. And Senator, if I can just add, I recognize I
am a temporary steward of this role. I am not going to be here
forever. One of the things I want to impart on this
organization is to take the right lessons from this experience.
We could have stopped the outreach. We could have slowed down
the claims processing or stopped claims processing to meet
those targets. But we chose not to because we wanted to keep
our foot on the gas, and as soon as we realized it, to make
sure we are delivering as many benefits to as many veterans as
possible.
Senator Hirono. Yes. I commend you for making your claims
process, that decision-making process and your review process
much more expeditious, because that has been one of the
complaints from veterans, that it takes forever for different
decisions to be made that would impact them. So you got that
part going, but now you need to better estimate whatever it is
that you need so that we are not left with having to provide
really substantial amounts.
Now one of the other things that I--and you are improving
on that. That is what you are telling me.
So for Dr. Elnahal, I think I heard you say that VA has not
been present where the veterans are. I heard you say that. So
do you have a map or some kind of a population data as to where
all your veterans live? Because that is how I interpret what
you mean by VA is not where the veterans are. So this system
such as we need more CBOCs, for example, so that the health
care can be provided where they live. Is that what you are
talking about?
Dr. Elnahal. I was referring to our outreach efforts,
Senator. The fact that we have done thousands of outreach
events in communities alongside our colleagues in the Veterans
Benefits Administration, to help make veterans aware of their
earned benefits and health care opportunities has led to
750,000 veterans enrolling since the PACT Act was signed, and
900,000 veterans being upgraded in their health care coverage
so that they can qualify for new services like dental care and
long-term care.
Senator Hirono. I think that is another aspect of what
needed to happen is your outreach efforts, because there are a
lot of veterans, particularly I would say, not necessarily the
World War II or the Vietnam veterans, although there are issues
there, you know, for them to understand what the programmatic
support is. But at the same time, I would say we need to
distribute a better place where they can go to have their
health care needs met, which means, in my view, CBOCs.
I am a big supporter of CBOCs going where the veterans are,
so do you have a plan for distributing the health care
capabilities to where the veterans are?
Dr. Elnahal. Yes, Senator. One of the main drivers that
compelled us to come to Congress to ask for $12 billion in
additional funding was our ability to actually activate new
clinical space in some of the fastest growing areas in the
country that need a presence closer to them.
On top of that, we have a lot more programming, Senator,
that is growing significantly, that brings our VA teams into
veteran homes and communities. So we have home-based primary
care, we have a lot more telehealth happening, 15 percent
growth year over year, and we are really trying to, with
programs like the Close to Me program for cancer therapy, bring
our complex cancer infusion teams closer to rural communities
and veterans who live in more remote areas, to bring that care
closer to them.
Senator Hirono. Thank you. I commend you for all of those
efforts, but obviously you need to better assess what your
resource needs are so we can be on the same page.
Thank you, Mr. Chairman.
Senator Blumenthal. Senator Boozman.
HON. JOHN BOOZMAN,
U.S. SENATOR FROM ARKANSAS
Senator Boozman. Thank you, Mr. Chairman. I want to thank
both of you for being here today. As elected officials, we
require consistent and forthright communications to ensure the
VA receives the resources required to fully serve veterans in
our communities. Anything short of that risks us in situations
like we are in today, where Congress must make a significant
budget shortfall on extremely short notice.
At the VA's budget request hearing in May, I raised my
concerns about the decrease in the veterans' health care
request and asked what risks the VA's budget would open. I
appreciated the work that the VA has done but remain concerned
that a shortfall of this size was not anticipated. So we
unfortunately now find ourselves in a situation where veterans
benefits are at risk.
I have had the pleasure of serving on the Appropriations
Committee Subcommittee for MilCon-VA, being the lead Republican
on that right now, which funds the VA's yearly budget, along
with this Committee. Of note, the VA's announcement of the
shortfall came shortly after that Committee agreed on topline
funding and marking up that particular spending.
Now it is interesting. In my comments, as we were passing
that bill, I explicitly said that I was very concerned about
the numbers. Senator Collins, in her statement, she said that
she was very concerned about the numbers.
I guess my question is why was my staff more aware of this
than your staff and you? Mr. Jacobs.
Mr. Jacobs. Senator, in the spring, around the time that
the Secretary was testifying, we were closely monitoring our
spend plan and comparing our obligations to our projections.
And we were pretty much on track. We were quite close. So while
we were close, we were monitoring it. We did not have reason to
believe that we would need additional funding.
What happened is in June we engaged in the midsession
review, as part of that statutorily mandated process, to
reconsider and review with OMB our numbers. And while we did
that we updated the projections to include real-time data and
our experience to inform how we thought the rest of the fiscal
year would proceed.
What we identified in that June timeframe was the potential
need for additional mandatory dollars in order to ensure that
we could provide all veterans and survivors----
Senator Boozman. No, I understand, but again, as we were
doing the mark up for that bill, as was testified to here, my
staff and the majority staff were very concerned that the
numbers just did not add up, okay. They did not need a June
whatever. They just knew, because they follow those accounts
very closely, that what you were asking, it did not compute. It
did not make sense.
And were not off a billion dollars. You were not off a
little bit of money. You were off a tremendous amount of money,
okay. So that is the situation that we find ourselves in. And
then literally, you know, the day after we did our
appropriations, you come out rectifying it, and that is not a
good look.
How do you believe OMB's understanding of funding needed
for the VA compares to the VA's understanding of required
funding? Because OMB has got their ideas. You have got yours.
What is the delta? Do you all agree?
Mr. Jacobs. Yes, we agree on the total needs for mandatory
funding.
Senator Boozman. Okay. How much do you assess that the
accuracy of the VA's budget formulas contributed to the
shortfall?
Mr. Jacobs. I think we have a number of lessons learned
from our budget forecasting. One is we need to increase the
total number of veterans we project we can deliver benefits to,
because our workforce has been delivering at a very high rate.
Second is we need to better incorporate the increase in the
average disability rating. Historically, it has increased about
1 percent per year. What we are seeing more recently is a 2
percent increase. So we need to take those factors into
consideration.
And three, we need to improve our process, so that includes
monthly reporting to your Committee, to the authorizing
Committees, to make sure that we are continuing to communicate
as we know in real time, even if we have not yet fully verified
the potential need.
Senator Boozman. Okay. So if you had done that we would not
have this problem now, with not being a billion dollars off or
$2 billion, but many billions of dollars off. That would have
prevented the situation that we are in now.
Mr. Jacobs. Senator, I think we would still find ourselves
in a similar situation, absent the forecasting assumption
changes. What we are finding right now is that the actual spend
is below plan. We are maintaining the request as still merited
because we need to be conservative in the mandatory spend. If
we are even one dollar short, we will be delayed in our ability
to deliver timely benefits to veterans and survivors.
Senator Boozman. So how much more are you asking?
Mr. Jacobs. We are asking for what we requested originally.
Senator Boozman. And how much more is that than you really
think you need----
Mr. Jacobs. Right now----
Senator Boozman [continuing]. According to your projection.
Mr. Jacobs. Right now we anticipate, we are about 0.9
percent under plan, but we are still going through the end of
the fiscal year, and our workforce, historically in September,
really puts on the gas and moves forward very high.
Senator Boozman. Okay. Thank you all very much. Thank you.
Senator Blumenthal. Senator Cassidy.
HON. BILL CASSIDY,
U.S. SENATOR FROM LOUISIANA
Senator Cassidy. Thank you. Dr. Elnahal, thank you again
for that phone call yesterday. I appreciate that. I understand
you spoke to my staff. I appreciate that. Thank you.
Mr. Jacobs, it is my understanding that the VA has hired
10,000 employees, additional employees, to implement the PACT
Act.
Mr. Jacobs. Senator, we have grown by 35 percent over the
last 2 years. That is about 10,000 employees, yes, sir. It is
PACT Act but also other benefits, as well, that are associated.
Senator Cassidy. That is a lot of employees, a lot of
employees. Others are doing more with less, using AI and
computing. It seems like we are doing less with more. And I say
that not to be pejorative----
Mr. Jacobs. Yep.
Senator Cassidy [continuing]. But that is just a trend, and
it does not seem like it is working here.
How many of those employees work remotely, what percent?
Mr. Jacobs. Senator, our workforce in the regional offices
come into the office 2 days per pay period.
Senator Cassidy. The pay period is----
Mr. Jacobs [continuing]. Is 2 weeks.
Senator Cassidy. So they could come in on a Monday and then
they could come in two Fridays later.
Mr. Jacobs. At a minimum.
Senator Cassidy. Now is there any coordination? Okay, we
have a team working on this project. You are all going to show
up on Monday, and we are going to go over as a group exercise
what we need to do, or do people just pick the day they come
in?
Mr. Jacobs. There is coordination across different business
lines in regional offices to coordinate that. But what I will
say is the work that is conducted, particularly by the claims
processors, is very individual. It is heads down, working
through issues. And what we have found is----
Senator Cassidy. How does the VA monitor productivity?
Mr. Jacobs. We have performance standards that we apply to
all of our employees, that they have to hit those standards
before in production and quality, so we can determine whether
our employees are meeting their production. And what we have
seen over the last few years is they are delivering more
benefits to more veterans than at any other time in our
history.
Senator Cassidy. Now, of course, it is partly the fact that
they have more benefits to bestow. I am not sure that I will
accept that that is a measure of productivity.
Mr. Jacobs. We have measured productivity in terms of
claims decision per employee. It has increased over the last
couple of years. This year is a little different because we
have so many new employees.
But to your earlier point, I do think, as you think about
people, process, technology, the majority of our production
output is people based. It is our existing workforce. It is the
new employees. And until recently it has been a reliance on
mandatory overtime. We have not received as much lift from
process improvements and technology.
We are in the process of implementing what we call
automated decision support. We are increasingly leveraging
technology. And that is the future, where had the most
potential, so that we can give our employees more tools to
deliver more benefits, more timely, accurately, and equitably.
And I think as we look to the future we will have the
opportunity to do a whole lot more for veterans as a result.
Senator Cassidy. Who is developing that automated decision
support system?
Mr. Jacobs. It is a vendor. I believe it is IBM, but I
would have to verify that.
Senator Cassidy. And when is it to be delivered? I mean, is
this kind of like in some agencies where whenever they finish
it, it is finished, or is this something where you have a hard
and fast, this shall be completed by this date?
Mr. Jacobs. We have very clear project milestones. We have
automated hundreds of diagnostic codes, and we are working in a
process to verify, validate, and graduate those. So we have
certain regional offices that have been in the process of
testing the implementation, providing direct feedback. That is
being used to improve it. Then we move it to another regional
office or a set of regional offices where they then continue to
refine it and then deploy it nationwide. So I would be happy to
follow up with your or your staff to walk through that
milestone schedule.
Senator Cassidy. That would be good. The EHR effort has
obviously not gone well, and so the question is where on the
spectrum will it be in terms of actually being developed.
This also suggests to me that it is ideal, from what I
understand, a large language model can do. So is this
conventional decision to support, or will this be a large
language model looking at patterns and saying we all need to
review them but these are the ones which need particular review
and these are the ones which seem routine, that sort of
decision support?
Mr. Jacobs. What we are utilizing right now is optical
character recognition. So it is enabling our employees to see
the evidence that they need.
Senator Cassidy. Now OCR, I think, merely takes a PDF and
it makes it into a digital format. That is still using the
human in order to make a decision. It is not using the computer
to aid that decision.
Mr. Jacobs. Correct. We are working to optimize and enable
computers to do what they do best while still preserving the
human element where it is needed and required.
Senator Cassidy. So I am still losing it a little bit.
Mr. Jacobs. Yep.
Senator Cassidy. Again, AI, large language model, is
touted, it appears it can look at a pattern and make a decision
that otherwise perhaps an employee would have to.
Mr. Jacobs. Yes.
Senator Cassidy. So that is different than optical
character recognition.
Mr. Jacobs. Correct.
Senator Cassidy. So if all you are doing is OCR, I am very
discouraged.
Mr. Jacobs. Well, this is a multiphase process. We are
utilizing elements of AI to improve the way that we enable our
employees to look at what we call the manual. This is the
guidance for how we adjudicate claims. It often changes on a
regular basis. And it is the basis for the decisions that we
make.
We are still relatively early here. There is a significant
amount of case law that we have to navigate. We also have to
employ trust, because one of the things that we have realized
through previous deployments of technology is that if our
employees do not trust it or if they think it is going to come
for their jobs, they are going to find workarounds. So we are
in an incremental process of utilizing technology so that we do
not disrupt it, we do not have delivery breakages, and that we
can continue to optimize the ROI for this.
Senator Cassidy. We have hired 10,000, we have got billions
of overruns, and we are still way behind? I have got to tell
you, you need some change, and it is going to be limited by
people who say, ``Wait a second. They may come for my job?''
Mr. Jacobs. Yes.
Senator Cassidy. I mean, the veteran is not being served.
It is not about the person's job. It is about the damn veteran.
Mr. Jacobs. Yes.
Senator Cassidy. I am sorry to be frustrated.
Mr. Jacobs. Yes. Senator, we are delivering more benefits
to more veterans than at any other time in our history. So to
put this in perspective, a decade ago, when the backlog was at
its peak of 611,000, the backlog was 70 percent of our total
inventory. Today it is 25 percent of the inventory. The average
claim 10 years ago took 378 days to process. Today it is taking
152.
Senator Cassidy. What I do not know is if that claim is
being just whisked through or if it is truly being processed.
If you never actually--oh, just click, click, click, click--it
can go through without an appropriate process. And I think I
have kind of made my point.
But we should be doing what others are doing in terms of
better serve the veteran. We should not be saying, wait a
second, people may think we are coming for their jobs so we are
not going to do it after all. That is discouraging.
I am sorry to be a downer. I yield back.
Senator Blumenthal. Senator Brown.
HON. SHERROD BROWN,
U.S. SENATOR FROM OHIO
Senator Brown. Thank you. I do not think you are a downer,
Senator Cassidy. You do good things, so thank you for that.
And I take a different viewpoint. I take one perhaps a bit
of celebration about the effectiveness of the PACT Act and what
you all have done. I understand the oversight we need to do at
the VA, but I also understand you recognize something when it
really matters. So Senator Blumenthal, thank you, Senator
Moran, thank you, Mr. Ranking Member.
I am proud of the fact that more veterans than ever are
getting benefits they have earned. The PACT Act is named after
an Ohio veteran. I know his widow. I know his daughter. I know
his mother-in-law. And what we have been able to do
collectively, both parties in this body, this Committee
especially--Senator Moran, I thank you, I thank Chair Tester,
and Dick, I thank the work you do--is pretty remarkable.
Thirty-two thousand veterans. And remember, we passed that bill
I believe in August, September 2022. Some people said it was
too expensive. Those same people never seem to think it is too
expensive to send people to war. It is only too expensive to
take care of them when they come home. So they lost that
argument when they said, ``Stop, don't do it.'' But you think
of the success, and the millions of veterans in the country who
have gotten coverage and care, 32, 33, 34,000 in my state.
And in so many ways the PACT Act is a victim of its own
success, because of this increase in veterans. I do not think
any of us probably predicted it would take hold that quickly.
It came on January 2023. This is about 18 months later, give or
take, and look at its success already.
Delaying the funding, not passing this bill would have
terrible consequences. Delaying the funding would postpone
benefit payments, including disability payments, GI Bill
payments, benefits. These are payments that veterans and
caregivers and survivors count on. If those checks do not come
on time, many of these families who have already sacrificed--
you know all this. I mean, those families that have sacrificed,
we will not show our appreciation for their sacrifice, and that
is why this is so, so important.
Senators Murray and Collins and Tester and Boozman, and
Senator Moran and I introduced the Veteran Supplemental
Appropriations Act. It should have already passed. We pushed
Congress, starting nearly 2 months ago, so veterans and
families would not have to worry about how they are going to
make a house payment, a car payment, or feed their families.
But better late than never. We know what the House did last
night. A lot of politics played on the House floor, but in the
end reason prevailed and they passed it by a voice vote.
So one question. Ohio, as you may know, each of our 88
counties has its own Veteran Service Office, some as small as
two people. Franklin County I think has 50 or 60 people whose
job it is, funded in large part by the county, whose job it is
to take care of any veteran issues that they confront. They
have told me many of the veterans who receive compensation and
pension benefits, this is their only or their primary source of
income. So millions of these veterans could be forced to go
even a month or two without any income, and veterans should not
have to pay that price.
If we do not get this done by the 20th, talk through that.
Is there anything the VA can do to ensure that veterans receive
those critical payments? Either of you, if you could answer
that.
Mr. Jacobs. Senator, it is our hope that Congress will take
action. We were encouraged by the House action last night and
confident that the Senate will follow suit. If it turns out
that we are not able to secure the funding by the 20th, we will
work to communicate with veterans to ensure that they have
letters to relay to their financial institutions, to their
schools, to anyone that they may need to make a payment to, so
that they understand that the payment could be delayed by up to
2 weeks, in the case of those veterans who are receiving paper
checks.
Senator Brown. Thank you.
Senator Blumenthal. Thanks, Senator Brown. Senator
Sullivan.
HON. DAN SULLIVAN,
U.S. SENATOR FROM ALASKA
Senator Sullivan. Thank you, Mr. Chairman. Gentlemen, I am
concerned about what has happened, you know, the processes in
which we find ourselves again--this has happened a number of
times--to have a $3 billion shortfall on 6 weeks' notice, or we
are going to jeopardize other benefits. I think it is a failure
on leadership, and to be honest, I am disappointed the
Secretary was not here. You guys are doing a good job answering
the questions.
But when something of this magnitude happens, and it is not
the first time it happens, and some of the concerns are based
on a recent OIG Biden administration inspector general report
over at the House Veterans Affairs Committee, I think it is
really incumbent upon the Secretary to be here, answering
questions. But I guess that did not happen today, so I
appreciate you two being here.
Let me read a little bit from this OIG report that just
came out recently. Mr. Chairman, I think it is already in the
record but I would like to submit it for the record. This is
the September 10th Inspector General for the Veterans Affairs
report.
Senator Blumenthal. Without objection.
[The OIG report referred to appears on page 49 of the
Appendix.]
Senator Sullivan. They said, quote, ``The OIG staff
routinely finds breakdowns in processes, infrastructure,
governance, leadership, and other failings that erode the
foundations of elements of accountability at the VA. These
breakdowns impede the VA's efforts to make certain that
patients receive timely, high-quality health care and that
veterans and other eligible beneficiaries are afforded the
compensation and services they earned.''
Have any of you read this?
Dr. Elnahal. Yes, Senator.
Senator Sullivan. What do you think of that statement?
Dr. Elnahal. I think the OIG helps us improve every single
day, and it is incumbent upon us to implement all of their
recommendations in the health care system to make our services
in health care more reliable.
I will say, Senator, that I am proud of our overall
outcomes, on average, when it comes to veteran trust, an all-
time high of 92 percent for outpatient care, beating the
private sector for the ninth consecutive quarter in a row for
inpatient care. But there are definitely areas where we need to
improve, and it is one of the most important parts of my job to
implement IG recommendations.
Senator Sullivan. Let me go to the issue of accountability,
because I think they talk a lot about leadership and
accountability. They talk about the need for a sustained effort
to change the culture at the VA, where leadership management
officials are often not held accountable. And that his, again,
the OIG.
I recently introduced legislation called the Pro Vets Act.
I already have 14 co-sponsors, 5 of which are Members of this
Committee. One of the things it says is, it goes into the issue
of accountability, by building on quarterly report requirements
that were included in the House bill last night, by requiring
an in-person briefing from the Secretary on these
accountability requirements. Would the VA be okay with that--
that is leadership. That is accountability--coming before this
Committee. That is what I am trying to get done right now, as
we speak.
I think just throwing $3 billion right now, ``Hey,
Congress, you have got 3 days for $3 billion,'' without any
accountability reforms kind of misses the point. Would you be
okay with that, quarterly from the Secretary on accountability?
You are supposed to be doing it anyway.
Dr. Elnahal. Senator, obviously we will review that bill
and closely work with you and offer technical assistance.
Senator Sullivan. Let me do another one, which is if there
is a VA shortfall outside regular order--this is in my bill--
then the staff responsible for the budget, in both OMB and VA,
would not qualify for a bonus. Would you be okay with that one?
Dr. Elnahal. Pending legislation, Senator, we will look at
it and make sure we offer technical assistance on it.
Senator Sullivan. So I am trying to get at this issue, Mr.
Under Secretary, the VA gave out $11 million in improper
bonuses in May of this year. Are you familiar with that?
Dr. Elnahal. Yes, Senator, and there were mistakes across
the agency. I made personal mistakes in not understanding
exactly how many awards were ultimately approved.
Senator Sullivan. Was anyone held accountable or fired or
relieved of duty? You mentioned the private sector. If a
private sector company came out with $11 million in improper
bonuses to employees and then came to their board of director,
which is what we are, your board of directors, saying, ``Oops,
we need $3 billion more,'' those people would be fired. Was
anyone held accountable for $11 million in improper bonuses
coming out of the VA? Anybody?
Dr. Elnahal. We concurred with the IG's recommendation to
evaluate for possible discipline----
Senator Sullivan. You are not answering my question. Was
anyone held responsible for the $11 million of improper bonuses
paid out by the VA?
Dr. Elnahal. The Office of Accountability and Whistleblower
Protection will help us with that question, Senator, once they
complete their analysis.
Senator Sullivan. So right now the answer is no.
Dr. Elnahal. Not yet, Senator. We have to wait for that.
Senator Sullivan. Okay. This is why--look, I have more
veterans per capita. I work with the VA all the time. But this
is why some veterans, and even on this, right, were scrambling,
$3 billion, or veterans are not going to get their benefits.
Well, we do not want that to happen. We will work through this.
But there should be accountability. Don't you guys agree? I
know you are spinning this as, hey, this is a great victory. It
is not a great victory. Come on. We are scrambling at the end
of the Congress here to get $3 billion, or my constituents will
not get their VA benefits. That is not a great victory. So I
wish you would quit spinning it that way.
It is a failure in leadership and management, and do you
not think if we are going to do $3 billion again--I forgot what
the Denver hospital was, Senator King and we all worked on that
one, if you remember, last minute we had to fund this hospital,
$3 billion I think it was--that there should be accountability
standards when we are doing this. I think we are becoming numb
to this, and I do not think that is a good thing for this
Committee in terms of oversight.
So should there be any additional accountability measures
as we work to quickly scramble for $3 billion to make sure
veterans in Connecticut and Maine and Alaska do not get cutoff
here in the next couple of weeks? Should there be? Would you
guys entertain them, take a look at my bill?
Mr. Jacobs. Senator, we would be happy to take a look at
your bill and follow up with you and your staff to talk about
it once we have had a chance to review it.
Senator Sullivan. Okay. I have some questions for the
record, Mr. Chairman, but I appreciate that. Thank you,
gentlemen.
Senator Blumenthal. Thank you. I am going to ask a couple
of questions and then call on Senator King, or if you want to
go ahead, Senator.
I would just like to make the point, about these bonuses.
Is it not a fact that almost all the improperly paid or
allegedly improperly paid bonuses have been recovered, clawed
back?
Mr. Jacobs. Senator, we are at about 93 percent of the
bonus amounts being returned back to the VA.
Senator Blumenthal. And nobody likes shortfalls. We all
want projections to be accurate. But the PACT Act really is a
success story, in my view. And part of it is on us. I have been
going around the State of Connecticut. At every veterans group
I address, every time I am talking to a veteran, even in
unrelated groups, ``Any veterans here? Raise your hand. Go sign
up for the PACT Act, if you have not done it.'' That is what I
say today. That is what I say to groups. It could be Rotary
Clubs or anybody else. I have been trying to get the word out.
Because my fear has been that our veterans would not take
advantage of this program.
So I regret there is a shortfall and that we are, to use
Senator Sullivan's word, scrambling, but hopefully, if we act
in time, nobody is going to be hurt. Is that correct?
Mr. Jacobs. That is correct, Senator.
Senator Blumenthal. Thank you. Let me ask you. I am very
curious. Do you have percentages, or can you give us kind of a
factual picture of what kinds of illnesses or conditions have
been most common among the ones covered by the PACT Act? In
other words, is it cancer? If so, what types of cancer? I have
known people who were suffering from cancer who are taking
advantage of it, but I would be interested to know what are the
conditions most commonly covered?
Mr. Jacobs. Senator, it has predominantly been respiratory
issues and certain cancers. I would be happy to follow up and
provide the details. We also have had significant number of
Vietnam veterans with hypertension who have applied for and
received PACT Act benefits.
And one of the other great benefits of this law is that it
has encouraged other veterans who are not eligible for the PACT
Act to come out and either give VA a shot for the first time or
try it again. I was in Maine last summer, up in Caribou, and I
met a Vietnam veteran who had never engaged with the VA. And we
were at a Claims Clinic out in the local community, having a
Maine breakfast, and he connected with a DAV officer and filed
his claim for the first time, because he kept hearing that VA
wants to serve you. So he came with one of his buddies, and it
is encouraging more veterans to come out.
One of the main challenges we experience, as we engage with
the community, is that there is a lack of understanding about
what benefits are available. There is a lack of understanding
about potential eligibility. And for many veterans there is a
lack of trust that we have to work to overcome.
Senator Blumenthal. And I think that point is so important.
I cannot tell you the number of veterans I encounter who say,
``I don't think I'm going to go to the VA.'' But then once they
actually go our West Haven facility and they get some care
there, they are amazed, and they go back again and again. And I
think that is really an important feature. It happened during
COVID, as well, when veterans went for tests or other kinds of
care. The more we can draw veterans into those VA facilities.
I can tell you, the quality of care in the VA in West Haven
and Newington is absolutely excellent. And I am proud of the
fact that this program has, in part, succeeded in getting more
involved.
And I will just make this last point. It is going to the
respiratory issue. It is not like we had a track record here
that we could predict, oh, there are going to be X number of
veterans with respiratory conditions, there will be X number
with hypertension, there will be X number with pancreatic
cancer, or whatever. So we were working in uncharted territory.
Senator Moran's point about timely reporting is in no way
contradicted by this point, but it is one that I would like to
emphasize.
And with that let me turn to Senator King.
HON. ANGUS S. KING, JR.,
U.S. SENATOR FROM MAINE
Senator King. Thank you. I would like to point out that Mr.
Jacobs was in Maine at my invitation to meet with L.L. Bean to
talk about how to deliver quality service. And we had a long
meeting with the officials at L.L. Bean, who are sort of the
gold standard for customer service. And then he gained a lot of
street cred in Maine by driving to Caribou. Freeport, Maine, is
about halfway between Caribou and New York City. We are a very
tall state. So I want to thank him for that visit.
Senator Blumenthal. When you said driving Caribou I thought
you meant he was driving a herd of caribou.
[Laughter.]
Senator King. Driving the Caribou. I apologize for being
late. If the VA IT system can figure out how to schedule Senate
hearings so we do not have three at the same time I would
appreciate that. And I do not want to replow a lot of ground.
I gather that this shortfall is a result of greater than
expected take-up of PACT Act benefits. Is that correct?
Mr. Jacobs. Yes, sir. In large part both compensation and
pension as well as higher utilization and growth in the
education area.
Senator King. So, in a sense, and I know Senator Sullivan
would disagree, but this is a result of success, which is good
outreach and good invitation to veterans to take advantage of a
new program. Is that correct?
Mr. Jacobs. I believe so. It has been historic levels of
outreach and historic levels of benefits delivery by the more
than 34,000 VBA employees.
Senator King. Which created a greater demand on the budget
than was anticipated when the budget was adopted a year ago.
Mr. Jacobs. Yes, Senator.
Senator King. Okay. That is the good news. The bad news is
when did you know when this was coming and when did you let us
know?
Mr. Jacobs. We identified the potential need for an
additional approximately $3 billion in mandatory funds in
around June, when we went through the midsession review. At
that time we were comparing our projection versus the actuals,
and we updated the claims model, which identified the potential
need for additional funds.
At the beginning of the year we estimated we were going to
complete about 2.2 million claims decisions, which was 200,000
more than the previous year, which is an all-time record. What
we found out in June was we anticipated, based on those new
projections, to complete about 2.5 million, and we are on track
to do that by the end of the month.
Senator King. So that extra 300,000 claims generated the
additional demand for the funds.
Mr. Jacobs. In large part. It is also the growth in the
total number and complexity of the C&P exams and some of the
additional growth in the education space.
Senator King. So you knew in June you had a problem. When
did we know?
Mr. Jacobs. I believe it was July. And what happened in the
intervening days is we had to work to verify that our
projections were sound, that we were not ringing the bell
unnecessarily, and that we had confidence that if we were going
to raise this issue it would be based on sound analysis. So
once we had done that we communicated the request.
But as we discussed, looking back I should have picked up
the phone and said, ``Hey, we're working through this and want
to give you a heads up.'' So that is one of my lessons that I
am going to take from this and promise to do better.
Senator King. Thank you. Thank you, Mr. Chairman.
Senator Moran [presiding]. Thank you. Senator Cramer.
HON. KEVIN CRAMER,
U.S. SENATOR FROM NORTH DAKOTA
Senator Cramer. Thank you. He surprised me with his voice.
He is not the Chairman, but I am glad to see you sitting there,
Jerry. Thank you, Senator.
So following up on Senator King's question, and I gather a
similar line of questioning, and I appreciate the opportunity
of Senator Moran and the Chairman for having this hearing, like
Senator King I do not want to plow old ground so I am just
going to add on to his, and jump over, Secretary Elnahal, to
the red team report and the issue of community care. Because it
seems to be that at a time when demand is higher than you can
provide for, and that the MISSION Act provided for more
community care, easier access to community care, it seems like
a mandate for better access to community care in big,
rectangular states in the middle of the North American
continent, like Senator Moran and I represent, where there is a
lot of distance between veterans, a lot of critical access
hospitals which provide the excellent service, and, in fact, if
they had a little larger, you know, patient load might even
save some critical access hospitals.
The VHA seems to be very resistant, still, to access to
community care. In fact, I am going to go to the report and
just highlight a couple of things in the red team report. On
page 10 it states that the top three reasons for a veteran
seeking care in a community are drive time, 50 percent say
drive time; 30 percent say the services that they need are not
available; and then 5 percent say wait times. So the top three
are drive time, availability of services, and wait time. And to
me that paints a pretty clear picture of evidence that there
are not enough VA providers at facilities to treat veterans
where they live or to deliver the type of specialized care that
they need.
So to me reports like this highlight more of a commitment
to the bureaucratic institution than to the access to care by
the veteran. Can you explain why there has been such a
resistance by the VA to allowing more community care, easier?
Dr. Elnahal. Well, Senator, I agree with you that the
Community Care Network is absolutely essential to provide
timely access to care, especially for rural veterans and
especially for specific categories of care like long-term care.
And over the last several years we have grown at very high
rates in the community care account. This year so far we are up
14.5 percent on community care referrals compared to last year.
Part of our request for supplemental funding is to support what
the current budget projects, which is only 12 percent growth.
We think we need to grow by another 16.5 percent.
And what I have emphasized to all of our medical centers is
that when a veteran qualifies for community care under the
MISSION Act it is our obligation to offer that option.
We also have to offer VA options, in my view, and put the
veteran in the driver's seat to make the final decision when
veterans qualify for both.
Senator Cramer. So you just used the term ``when a veteran
qualifies.''
Dr. Elnahal. Yes.
Senator Cramer. And that is one of the things that concerns
me a little bit, because the bureaucracy of all types, it is
one of the ways they can manipulate is by not qualifying them.
And the benefit of the doubt, in my mind, it has always
frustrated me that the default or the benefit of the doubt
never goes to the veteran, say in a challenged situation.
So I think what I hear you saying is if the Committee and
if the Congress provides you better resources perhaps the first
thing we could look for are services that already exist in a
lot of these communities and make it easier for the veteran to
get that care there rather than build a bigger VA bureaucracy.
Because it should be about access to care, period, across the
board, veterans and non-veterans, and I think that the dynamism
of that patient load and the capacity of a lot of the community
access hospitals and other things, you know, it could be
winners all the way around.
So my pitch is please let's look first at existing capacity
and infrastructure before we build out a bigger bureaucracy.
Dr. Elnahal. We have to make the right decision, Senator,
for every veteran, and if that right decision means a community
care provider that is closer, more convenient for them and can
get them that care quicker, we have to elect to do that. And
the veteran, in my view, has to be in the driver's seat for
those decisions.
Senator Cramer. I totally agree, and I can hardly wait to
tell all my veterans that is going to be the new world order.
Thank you.
Senator Moran. Senator Cramer, thank you, and I smiled at
Dr. Elnahal because he and I have this conversation on such a
frequent basis. And I again would remind, based upon what you
said, and I would remind veterans and the VA that one of the
categories by which you qualify for community care is when it
is in the best medical interest of the veteran, determined not
by the VA but determined by the veteran and his or her health
care provider.
So when you talk about the bureaucracy, a determination of
best medical care, best medical interest, is something that is
certainly available to a veteran and certainly ought to be
recognized by the VA.
That is not the topic of the hearing. And I leaned over to
Senator Blumenthal because he said something that I was going
to follow up on. We have, in many instances, used this hearing
as an opportunity to commend and congratulate the success of
the PACT Act. And I certainly do not have any reason not to do
that. In fact, I have every reason to commend and congratulate
the success by you and the people you call that are within the
VA who are so qualified and capable of bringing veterans into
the benefits of the PACT Act.
But my point is that that is not necessarily the purpose of
this hearing. It is fine. But I do not want us to get off
track, because I still believe that process matters, and a
success is a great thing, but we have our work to do in regard
to how we fund, so we can continue to have success in the PACT
Act.
I want to ask just a couple of more questions and make sure
that I am not missing something in the answers that you gave
me. One of the things that, I do not know which one of you
said, but it was something like we chose not to meet the
targets--was that you, Mr. Jacobs? When talking about the
targets within the PACT Act we knew we were going to exceed
those targets, but we decided to proceed anyway. Am I saying
something that you said, or Dr. Elnahal?
Mr. Jacobs. Are you referring to the phased implementation
of the PACT Act?
Senator Moran. Yes, I am.
Mr. Jacobs. Yes, sir.
Senator Moran. This is not a criticism.
Mr. Jacobs. Yes, yes.
Senator Moran. I am not trying to trick you in any way. It
is not a criticism.
Mr. Jacobs. Yep.
Senator Moran. But that is the kind of thing that suggests
to me that when you are making that decision it is a point in
time in which it would have been useful to notify Congress,
``Hey, we're there. We're doing well.'' And yes, we,
intentionally--one of my concerns about the PACT Act, when we
originated this effort, was the ability of the VA to meet the
needs of veterans when so many veterans were already in line,
waiting for benefits and services. And we put those provisions
in there, and I would not be one who spends time saying we
should slow things down. If a veteran needs care, I want the VA
to provide that care.
So not a criticism. Just a suggestion that that is a
reminder. You knew something was happening, and I do not want
to keep beating this, but that was a suggestion that you be
picking up the phone or sending a letter or testifying in a
hearing that we are moving forward faster than what the PACT
Act anticipated.
Mr. Jacobs. Senator, I believe we made that announcement at
the time of the law's enactment, and it was based on an
analysis that we concluded. We identified we had the authority
to accelerate. And, in fact, since the law's implementation we
have had about 340,000 veterans who now are getting PACT
benefits that would not have been eligible, 60,000 of whom have
cancer.
And as we made that analysis it was not only about
delivering these earned benefits more quickly, but it was also
the potential inefficiencies that we would have experienced by
some of the processing challenges.
So we thought that this was in the best interest of the
veteran and also more operationally focused.
Senator Moran. My only point then, Mr. Jacobs, would be
that you made that decision at the time of the enactment, the
signing into law of the PACT Act, and then did not tell us how
that was proceeding, and yet you waited until you crossed the
T's and dotted the I's on the estimates before telling us the
day after the hearing.
Mr. Jacobs. Yep.
Senator Moran. I have made my point. I am just trying to
point out that--I made my point.
Let me ask this. I want to make certain that I understand.
While I have been complaining that we did not receive notice,
and perhaps that sounds personal that I did not receive
notice--to my knowledge neither did the Chairman or the Ranking
Member and Chairman in the House or the Appropriations
Committee. But let me ask that question. Did anybody within the
Administration, the VA, or OMB notify anyone in Congress, the
leadership of the Senate or House? Am I missing something? I
want to make sure that I am complaining about this Committee
not being notified, or the Appropriations Committee that I
serve on not being notified, but maybe somebody was. And do you
know anybody that that would be?
Dr. Elnahal. On the health care side, Senator, we have been
tracking budget execution very closely, and just on our side we
did make the decision, in full disclosure, to accelerate health
care eligibility on March 5th to many cohorts of veterans that
would have otherwise qualified every 2 years, leading up to
2032.
So we made that decision. Right after that decision, the
Secretary testified in the budget hearings. He did mention that
the budget was tight on the health care side, and that we would
be monitoring it very closely leading into the summer, and if
we ultimately needed more funding to support all the additional
vets and the upgraded vets on their priority groups that we
would come to Congress.
So what I can tell you is that when we identified that
need, and we knew in order to maintain the outcomes and not see
access get worse, veteran trust get worse, as of July we knew
we needed to actually grow our workforce and we knew we needed
to support more community care, we came forward. But that is
always a month-by-month assessment that we make.
Senator King. We want to know who did you notify, and when.
Dr. Elnahal. I am talking about the notification to all
four Committees in July that we made out of the health care----
Senator Moran. And was anybody in Congress notified before
the July notice to the Committees that you just mentioned, the
four?
Dr. Elnahal. Not to my knowledge, Senator.
Senator Moran. No one indicated this to Senator Schumer or
to Chairman Murray?
Dr. Elnahal. Not to my knowledge.
Senator Moran. And----
Dr. Elnahal. Not to my knowledge, but what I would be happy
to do is go back and confirm, just to make sure. I do not have
all the dates, and I just want to make sure we give you an
accurate answer.
Senator Moran. Thank you very much. And then a similar
question. Were there conversations within the VA, the
Administration, or OMB about not notifying Congress? Did
anybody make that suggestion or request to the VA? And are you
aware of any conversation that took place that was suggested by
OMB or other Administration officials to the VA, let's delay
notifying Congress?
Dr. Elnahal. Senator, the Secretary was very clear that
once we had an understanding that this was a real concern that
we had an imperative to notify as quickly as we could. He made
that very clear.
Senator Moran. I suppose perhaps there is an interest in
why the answers to these questions matter to me. I would assume
that notifying us the day after we mark up our MilCon-VA bill,
and perhaps that is evident, it would have been useful
information for the Committee in appropriations. But I also
worry about this debate that we have on an ongoing, annual
basis, about what is considered domestic spending and what is
considered defense spending. And without that information, or
if someone had the information and others did not, it was not a
fair conclusion about how to divide--in broad terms, Democrats
want to spend more money on domestic issues, and Republicans
want to spend more money on defense. I further admit that there
is a lot of confusion now in this kind of definition. There is
no clear cut to what I am saying.
But when we make the decision about what is defense and
what is domestic, veteran spending is always something that can
be one or the other. And I am trying to find out whether
someone is playing a game with Congress to make a different
outcome than the one that we made.
Dr. Elnahal. I know, Senator, that in the President's
budget we have requested, for multiple years, having actually a
third budget category for VA medical care so that it would not
necessarily be entering the debates on the non-defense
discretionary side. And so I know that Congress has considered
that before. We still think it is a good idea, so that veteran
medical care funding is not taking away from other really
important agencies that serve the American people. I still
think that is a good idea so that we do not allow for some of
these other debates to interfere with what veterans need. So I
just wanted to make that point.
Senator Moran. But neither one of you, or anybody that you
have talked to, is aware of that conversation taking place with
direction or suggestions as here how we can tip the scales one
way or the other in regard to what decision the leadership of
Congress, the leadership of the Senate and the House is going
to make?
Dr. Elnahal. No, again, not to my knowledge, Senator. And
we are requesting VHA supplemental funding in the form of the
Toxic Exposure Fund because we believe that all of that funding
will be needed to serve veterans with exposure to toxic
substances. That is a very important requirement for the TEF
account, and we believe all of it would be used for veterans
with toxic exposure.
Senator Moran. Thank you. Mr. Jacobs, anything?
Mr. Jacobs. No, sir.
Senator Moran. You have the same answer?
Mr. Jacobs. Same. I am not aware of it.
Senator Moran. Thank you. Senator King, I am told you are
going to close out the hearing. I do not know whether I am
supposed to yield to you.
Senator King. Well, that is always a good thing to do.
Senator Moran. I yield to you.
Senator King [presiding]. I appreciate it. I appreciate
your questions. First, I want to associate myself with the
question that Senator Cramer was asking, although I want to
disassociate myself from the word ``bureaucracy.'' The people
that I know that work in the CBOCs and the veterans hospital at
Togus I do not consider, if there is any pejorative tone to the
word ``bureaucracy,'' they are not it. They are dedicated to
the veterans of Maine. So I just wanted to be sure I mentioned
that.
I want to thank you all for being here today. This is an
important conversation, and I hope that the Senate will join me
in acting quickly to ensure that we deliver these resources
hopefully within the next 24 hours to avoid negative impacts as
well as the anxiety that is out there today on our veterans and
their beneficiaries.
We will keep the record open for a week.
Senator Moran. Mr. Chairman?
Senator King. Yes.
Senator Moran. May I add one comment?
Senator King. Please.
Senator Moran. It will be in agreement with you?
Senator King. Always.
Senator Moran. I too, Senator King, have asked my
colleagues, Republicans and Democrats, to be supportive of
reaching a conclusion today or tomorrow in regard to the
additional funding necessary.
Senator King. Thank you.
Senator Moran. And I want to make certain that that
happens, and my expectation is that it will happen tomorrow.
Senator King. Thank you. This hearing is adjourned. Thank
you.
[Whereupon, at 4:41 p.m., the hearing was adjourned.]
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