[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
LEGISLATIVE HEARING
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HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
OF THE
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
WEDNESDAY, JUNE 11, 2025
__________
Serial No. 119-25
__________
Printed for the use of the Committee on Veterans' Affairs
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via http://govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
61-123 WASHINGTON : 2025
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COMMITTEE ON VETERANS' AFFAIRS
MIKE BOST, Illinois, Chairman
AUMUA AMATA COLEMAN RADEWAGEN, MARK TAKANO, California, Ranking
American Samoa, Vice-Chairwoman Member
JACK BERGMAN, Michigan JULIA BROWNLEY, California
NANCY MACE, South Carolina CHRIS PAPPAS, New Hampshire
MARIANNETTE MILLER-MEEKS, Iowa SHEILA CHERFILUS-MCCORMICK,
GREGORY F. MURPHY, North Carolina Florida
DERRICK VAN ORDEN, Wisconsin MORGAN MCGARVEY, Kentucky
MORGAN LUTTRELL, Texas DELIA RAMIREZ, Illinois
JUAN CISCOMANI, Arizona NIKKI BUDZINSKI, Illinois
KEITH SELF, Texas TIMOTHY M. KENNEDY, New York
JEN KIGGANS, Virginia MAXINE DEXTER, Oregon
ABE HAMADEH, Arizona HERB CONAWAY, New Jersey
KIMBERLYN KING-HINDS, Northern KELLY MORRISON, Minnesota
Mariana Islands
TOM BARRETT, Michigan
Jon Clark, Staff Director
Matt Reel, Democratic Staff Director
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
JEN KIGGANS, Virginia, Chairwoman
AUMUA AMATA COLEMAN RADEWAGEN, DELIA RAMIREZ, Illinois, Ranking
American Samoa Member
JUAN CISCOMANI, Arizona TIMOTHY M. KENNEDY, New York
KEITH SELF, Texas HERB CONAWAY, New Jersey
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Veterans' Affairs are also
published in electronic form. The printed hearing record remains the
official version. Because electronic submissions are used to prepare
both printed and electronic versions of the hearing record, the process
of converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
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WEDNESDAY, JUNE 11, 2025
Page
OPENING STATEMENTS
The Honorable Jen Kiggans, Chairwoman............................ 1
The Honorable Delia Ramirez, Ranking Member...................... 2
WITNESSES
Panel I
Ms. Cherri Waters, Acting Deputy Chief Information Officer,
Executive Director, Health Portfolio, Product Delivery
Services, Office of Information and Technology, U.S. Department
of Veterans Affairs............................................ 4
Accompanied by:
Ms. Laura Duke, Chief Financial Officer, Veterans Health
Administration, U.S. Department of Veterans Affairs
Dr. Toni Phillips, Chief Nurse Informatics Officer,
Electronic Health Record Management Information Office,
U.S. Department of Veterans Affairs
Dr. Jennifer McDonald, Director, Community Care Division, Office
of Audits and Evaluations, Office of the Inspector General,
U.S. Department of Veterans Affairs............................ 6
Panel II
Mr. Cole T. Lyle, Director of the Veterans Affairs &
Rehabilitation (VA&R) Division, The American Legion............ 14
Mr. Cody Carbone, Chief Executive Officer, The Digital Chamber... 16
Dr. Edward O'Bryan, MD, MBA, CPE, Chief, Veterans and Corrections
ICCE, Associate Professor of Medicine, Medical University of
South Carolina................................................. 17
APPENDIX
Prepared Statements Of Witnesses
Ms. Cherri Waters Prepared Statement............................. 29
Dr. Jennifer McDonald Prepared Statement......................... 52
Mr. Cole T. Lyle Prepared Statement.............................. 57
Mr. Cody Carbone Prepared Statement.............................. 70
Dr. Edward O'Bryan, MD, MBA, CPE Prepared Statement.............. 82
Statements For The Record
The Honorable Ken Calvert, U.S. House of Representatives, (CA-41)
Prepared Statement............................................. 87
The Honorable Scott Franklin, U.S. House of Representatives, (FL-
18) Prepared Statement......................................... 88
Concerned Veterans for America Prepared Statement................ 89
LEGISLATIVE HEARING
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WEDNESDAY, JUNE 11, 2025
Subcommittee on Oversight and
Investigations,
Committee on Veterans' Affairs,
U.S. House of Representatives,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:15 p.m., in
room 360, Cannon House Office Building, Hon. Jen Kiggans
[chairwoman of the subcommittee] presiding.
Present: Representatives Kiggans, Radewagen, Ciscomani,
Self, Ramirez, Kennedy, and Conaway.
OPENING STATEMENT OF JEN KIGGANS, CHAIRWOMAN
Ms. Kiggans. Good afternoon. Thank you to our witnesses for
being here today. Without objection, the chair may declare a
recess at any time.
I would also like to welcome the members present from the
Subcommittee on Technology Modernization--I think they are on
their way--and the other members who have sponsored bills on
today's agenda who will be joining us today who are, hopefully,
on their way as well.
Today's hearing is about coordinating with other
individuals who also care deeply about how veterans are treated
and who represent organizations with expertise on the proposed
legislation on the agenda this afternoon.
We will use the feedback and ideas they share with us to
make informed policy decisions to improve the delivery of
services at the U.S. Department of Veterans Affairs (VA).
We have nine important legislative proposals to consider
here today. It is important to note that not all of the
proposals will move forward in the legislative process. The
valuable insight provided by these members, stakeholders, and
agencies is fundamental to the work of the subcommittee.
During today's legislative hearing we will examine a
variety of bills, including bills that impact the VA's systems
in technology, acquisition, pay, and accountability. The agenda
includes H.R. 984, sponsored by Representative Van Orden, which
would direct the VA Secretary to cancel agreements with debt
collectors to collect debt from veterans if the VA determines
the debt was due to an error.
The Veterans Scam Fraud Evasion Act of 2025, sponsored by
Representative Calvert, would codify an office at the VA that
is needed to fight against scammers targeting veterans.
H.R. 3185 the Personnel Integrity in Veterans Affairs Act
of 2025, sponsored by Representative Franklin, would provide
oversight bodies with the tools to complete their
investigations into misconduct and improve the Federal
workforce by requiring the VA to make note in their personnel
file if they resign under investigation.
The bill sponsored by Representative Gray, which would
prohibit the VA from collecting copays after 2 years if the
delay in collection is due to a VA failure in timely
processing.
H.R. 3482, the Veterans Community Care Scheduling
Improvement Act, sponsored by Representative Barrett, would
establish a program for the VA employees to directly schedule
health care appointments for veterans receiving community care.
H.R. 3455, the Veteran Affairs Distributed Ledger
Innovation Act of 2025, sponsored by Representative Mace, would
direct the VA to conduct a study on the use of distributed
ledger technology to modernize the claims process.
H.R. 3483, Forcing Real Accountability for Unlawful
Distributions, or the FRAUD Act of 2025, sponsored by
Representative Barrett, would direct the VA to implement an
information technology (IT) system to detect fraud, waste, and
abuse and payment processing for community care payment
submissions.
A discussion draft of legislation to improve the VA
Electronic Health Record Modernization (EHRM) program, and
last, my legislation H.R. 3494, the VA Hospital Inventory
Management System Authorization Act, which would authorize the
VA to purchase or develop and modernize inventory management
system for hospitals. Inventory modernization is an important
step forward to more effectively manage the crucial medical
equipment and other assets providers need to deliver first
class health care to our Nation's veterans.
I am eager to hear more from our members and witnesses
about these bills, and I want to thank our witnesses again for
being here today. I look forward to our discussion.
I now recognize Ranking Member Ramirez for her opening
remarks.
OPENING STATEMENT OF DELIA RAMIREZ, RANKING MEMBER
Ms. Ramirez. Thank you, Chair Kiggans.
I want to first start by thanking our witnesses that are
here today, Dr. Phillips, Ms. Duke, Ms. Waters, and Ms.
McDonald. Thank you for being with us today.
When I first joined this committee a couple of years ago, I
hoped to find common ground with my more conservative
colleagues because we were united by a shared belief that it is
our responsibility to serve those who sacrifice so much for our
country, our diverse veterans. I have to admit that I continue
to be disappointed as I witness the erosion of the spirit of
bipartisanship in our committee.
While I am committed to work on today's bills on
advancement and modernization of the VA, I cannot help but
point out that contrary to the traditions of this committee, we
are discussing eight Republican-led bills and only one
Democratic-led bill. In the past, for every two bills from the
majority we considered a bill from the minority, so you can
understand my disappointment that while we are, in fact, going
to discuss modernization of the VA, we omitted and disregarded
Democratic legislation on the subject that could bring even a
greater level of transparency and accountability to the VA. Let
me give you a couple of examples. Congressman Kennedy's VA
Funding and Workforce Protection Act, which would reinstate
veterans have been illegally terminated from the VA and exempt
them from the hiring freezes.
Or Dr. Conaway's VA Data Act, which addresses serious
privacy concerns veterans have shared with us and would prevent
Department of Government Efficiency (DOGE) from accessing
veterans' personnel information from the VA systems.
I hope I have the chance to discuss the bills that I plan
to introduce over the next few months, which would include a
bill to restore collective bargaining rights for VA employees
and a bill that would bring much needed transparency to VA's
relationship with special government employees.
While I am disappointed at the ratio of Republican to
Democratic bills that is so low in this hearing, I am proud of
the single Democratic-led bill on today's agenda, Congressman
Gray's Stop Troubling Retroactive Invoices for Veterans
Expenses (STRIVE) Act. The bill would prohibit the VA from
collecting co-pays from veterans in specific situations when
the billed care is more than 2 years old, or the debt incurred
by the veteran is due to the department's fault and exceeds
$2,000.
This bill would protect veterans by ensuring that they are
not on the hook for surprise medical bills due to dysfunction
or error in VA systems. It is a common sense step to shield
veterans from avoidable financial burdens.
Today we will also be considering bills on modernization
efforts within the department, and that is a timely and crucial
conversation. If I am being honest with you from my
perspective, we cannot successfully realize modernization
without the infrastructure needed to actually support it and
implement it.
For example, Secretary Collins has announced his plans to
accelerate the electronic health record modernization--we call
it the EHRM program--to 13 sites next year and 26 the following
year. At the same time there is a doubling of the sites, there
is a reduction in the EHRM integration office staff, about 10
percent of whom took the deferred resignation program.
Chair Kiggans' H.R. 3494 seeks to initiate a pilot program
to test adequacy of a centralized supply chain solution at one
VA Medical Center, but the VA has tried four previous times to
realize its supply chain solution without identifying what
critical infrastructure was needed for previous pilots to
succeed. I got to tell you, I am concerned we are bound to
repeat the same mistake from the past.
Congressman Franklin's Personnel Integrity in Veteran
Affairs Act would require investigative bodies, like the Office
of Inspector General (OIG) and the Office of Accountability and
Whistleblower Protection, to continue investigating employees
even after they have left the department.
While no investigation should conclude without a proper
resolution, the legislation does not acknowledge that limited
resources could impede these investigations.
As we consider modernization, I just want to echo my
colleagues on the Technology Modernization Subcommittee, who
have pointed out that we must pursue a balance of investments
in technology with equivalent investments in staffing and
resources when we are rolling out these modern solutions
because without investing in all of these three areas-
modernization, staffing, and resources-VA will not be able to
implement the modernizations our veterans desperately need.
This administration is doing the opposite, openly
undermining the VA, proposing major reorganization, and engaged
in reductions in force. Their efforts weaken the very internal
infrastructure of the VA that the modernization depends on. It
is almost as if privatization is the end game.
Deconstruct infrastructure, create new systems and
protocols that rely on infrastructure, and complain that there
is no infrastructure to support the changes and then have a
seemingly novel idea: outsource the service.
As we consider today's legislation, we need to keep in mind
that we cannot have honest discussions about modernization
without getting honest about the internal infrastructure needed
to provide our veterans with the quality, comprehensive, and
accessible services.
Chair Kiggans, I hope we can make the changes needed before
we advance these bills to the full committee. With that, I
yield back.
Ms. Kiggans. Thank you, Ranking Member Ramirez.
Before hearing their testimony, I will introduce the
witnesses on today's first panel. Representing the Department
of Veteran Affairs we have Ms. Cherri Waters, acting Deputy
Chief Information Officer (DCIO) and Executive Director of the
Health Portfolio Product Delivery Services in the Office of
Information and Technology. Ms. Waters is accompanied by Ms.
Laura Duke, the Chief Financial Officer of the Veteran Health
Administration and Dr. Toni Phillips, Chief Nurse Informatics
Officer of the Electronic Health Record Management Information
Office.
Also for on our first panel, representing the office of the
Inspector General, Dr. Jennifer McDonald, Director of the
Community Care Division, Office of Audits and Evaluations and
Office of the Inspector General.
We will now swear in our witnesses. If you could, please
stand and raise your right hand? Do you solemnly swear that the
testimony you are about to provide is the truth, the whole
truth, and nothing but the truth?
Thank you. You may be seated.
[Witnesses sworn.]
Ms. Kiggans. Let the record reflect that all witnesses
answered in the affirmative.
Ms. Waters, we will start with you. You are now recognized
for 5 minutes to provide your testimony on behalf of the
Department of Veteran Affairs.
STATEMENT OF CHERRI WATERS
Ms. Waters. Good afternoon, Chairwoman Kiggans, Chairman
Barrett, Ranking Member Ramirez, Ranking Member Budzinski, and
members of the subcommittees. Thank you for inviting us here
today to present our views on several bills that would affect
the Department of Veterans Affairs' programs and services.
Joining me today are Ms. Laura Duke, Chief Financial Officer
for Veterans Health Administration (VHA) and Dr. Toni Phillips,
Chief Nurse Informatics Officer for the EHRM Implementation
Office.
While VA's views on all the bills are detailed in my
written testimony, including areas of concern and support, I
would like to highlight some of the bills in my opening
remarks. First, VA supports, subject to amendments and
availability of appropriations, the Forcing Real Accountability
for Unlawful Distributions Fraud Act of 2025. VA strongly
supports using the franchise fund, and we estimate that the
savings from preventing overpayments will more than cover the
technologies and services to fully recover all the costs.
However, as written we believe the bill would not cover
those claims at highest risk for fraud or overpayment. VA would
welcome the opportunity to discuss several technical
improvements to the bill that could provide VA enhanced
authority to combat fraud, waste, and abuse.
VA supports the intent of the Veterans Community Care
Scheduling Improvement Act, subject to amendments and
availability of appropriation. VA fully agrees that it can and
should improve the patient scheduling experience.
However, we are concerned that specific legislation on this
topic could constrain our ability to address veterans' needs
and emerging issues. This bill seems to duplicate some of the
work previously done as part of VA's 2022 integrated product
team, as well as other efforts, including those to implement
the Cleland-Dole Act.
VA is already working to develop a self-service scheduling
platform and does not require additional authorities. Rather,
the challenges facing VA are both technical and process-based,
and VA recommends a human-centered-based design study that
would address both technical and non-technical elements of the
issue.
VA also welcomes the effort to modernize VA's current
inventory management systems and improve overall efficiency in
supply chain management. We therefore support the VA Hospital
Inventory Management System Authorization Act, subject to some
amendments and the availability of appropriations.
Last, VA also supports the intent of modernizing VA's
Electronic Health Record System, subject to amendments and the
availability of appropriations. Regarding Section 3, VA
acknowledges the importance of the EHRM as a critical priority
for VA but also believe there is an opportunity for VA and the
committee to collaborate to address technical concerns in this
section.
Likewise, VA looks forward to working with the committee to
address technical concerns in Sections 4, 6 and 7. VA agrees
with the intent of Section 5 to protect veterans personal and
protected information and welcomes the opportunity to work with
the committee to ensure this section effectively addresses that
concern.
VA further agrees with the importance of reporting
requirements contained in Sections 8 through 16 and welcomes
the opportunity to work with the committee to ensure that VA
can develop the information and address the committee's
concerns.
Chairwoman Kiggans, Chairman Barrett, this concludes my
statement. We appreciate the congressional intent embodied in
the bills on today's agenda and welcome the opportunity to work
closely with Congress on these important issues. My colleagues
and I are prepared to respond to any questions that you or
other members of the subcommittees may have.
[The Prepared Statement Of Cherri Waters Appears In The
Appendix]
Ms. Kiggans. Thank you, Ms. Waters. The written statement
of Ms. Waters will be entered into the hearing record.
Dr. McDonald, you are now recognized for 5 minutes to
provide your testimony on behalf of the VA Office of the
Inspector General.
STATEMENT OF JENNIFER MCDONALD
Dr. McDonald. Chairwoman Kiggans, Ranking Member Ramirez,
and members of the subcommittees, thank you for the opportunity
to testify on the independent oversight conducted by the OIG on
VHA's pause in its program integrity tool, which relates to
H.R. 3483.
Our testimony on this tool was requested by the
subcommittee because the FRAUD Act of 2025 requires VA to
analyze community care claims using an IT system to detect
overpayments and other fraud, waste, and abuse. This is
something that the program integrity tool did previously in a
limited capacity.
The program integrity tool is a repository that
consolidates data from multiple VA community care programs
after a claim has been paid by VA. For revenue operations, VHA
uses data from the tool to determine if veterans or their
private insurance companies should be billed for care that is
not service-connected.
To support VHA's fraud and waste detection and mitigation
efforts, data from the tool can be used to identify duplicate
claim payments or indicators of potential fraud, such as
payments to the same provider in different locations on the
same day.
VA paused operations of the program integrity tool in
February 2023 after becoming aware of ongoing issues with its
data base logic and unreliable data. The pause was intended to
allow VHA time to evaluate the tool's processes, data, and its
underlying IT system to determine the causes of any data errors
and identify improvement opportunities.
In July 2024, we issued a management advisory memorandum to
VA leaders highlighting the major impacts of the tool's pause
on VHA's revenue collection processes and on identifying fraud,
waste, and abuse related to community care claims. In response
to this work, VA officials stated that they had resumed using
data from the program integrity tool for revenue collection for
claims but were still considering the path forward for the
tool's oversight functions, including audit and compliance
efforts.
While the tool was offline, VHA had limited ability to
collect revenue of more than 660 million dollars from veteran's
co-payments or from private health insurers. This may
negatively affect veterans because they could receive co-
payments for bills that are well over a year old.
The pause also affects the resources needed to address the
significant billing backlog. VHA staff have been reviewing tens
of millions of community care claims to determine which were
billable for veteran co-payments or to private insurers. VHA
will need to make certain that revenue operations staff has
sufficient resources and processes through timely review and
bill the full backlog of community care claims.
Currently, the program integrity tool is still not being
fully used for the prevention, detection, and mitigation of
fraud, waste, and abuse for paid community care claims. It is
vital that the Office of Integrity and Compliance also have the
needed resources to perform timely fraud, waste, and abuse
examinations of community care claims to ensure the proper use
of taxpayer dollars.
In addition to the FRAUD Act, many of the other bills under
consideration require VA to develop or improve its IT systems.
IT modernization has consistently been a major management
challenge for the VA. Our work has identified extensive
breakdowns with upgrading or replacing key systems, as well as
significant cost overruns.
The OIG remains vigilant in overseeing all significant IT
initiatives to identify all risks to veterans, their families,
and survivors. To do this, Inspector General (IG) staff monitor
programs and operations for breakdowns in processes, for
noncompliance with mandates, for failures to provide timely and
quality healthcare, and for deficiencies in the delivery of
benefits and services to veterans.
We will continue to advance accountability by conducting
effective oversight into how VA plans, implements, and
remediates identified weaknesses in its system modernization
efforts.
This concludes my statement, and I am happy to answer any
questions you may have.
[The Prepared Statement Of Jennifer McDonald Appears In The
Appendix]
Ms. Kiggans. Thank you, Dr. McDonald. The written statement
of Dr. McDonald will be entered into the hearing record.
We will now turn to questions, and I yield myself 5
minutes. The Chair just reminds our witnesses to speak directly
into the microphones when answering your questions so we can
hear or listening members can hear.
Ms. Waters, how would a modern inventory system at the VA
hospitals help improve VA oversight of its inventory
collection?
Ms. Waters. Thank you very much for that question. We
believe that the modern inventory system will help us with
oversight of having access to view all inventory across the
entire enterprise in a single unified view and help make sure
that we are in front of any challenges with inventory and
supplies and most efficiently using resources across the VA.
Ms. Kiggans. How big of a problem is it right now that you
do not have this oversight in place?
Ms. Waters. As I think you are well aware, we do have
multiple inventory systems in place at this time. We do have
three systems that are running, one of which has many instances
and so that does lead to disparity and difficulty with
collection of information.
It is important to note that replacing the system is part
of our supply chain modernization, and it is an effort that is
under way at the VA at this time. We are fully confident that
we can implement this system for inventory and asset management
across the enterprise.
Ms. Kiggans. Great, thank you. Then again, Ms. Waters, what
standards will the VA use to implement this advanced technology
if it becomes available for hospitals? You talked about there
are different systems right now. Will they be integrated into
one and will there be other changes?
Ms. Waters. Correct. We will have, at the end of this
initiative we will have a single system that is providing asset
and inventory management across the enterprise. We have built a
dynamic set of requirements to define what needs to be
contained in that system, and we are currently working on
procurement processes to move forward with that process.
Ms. Kiggans. Great. Who would be trained on how to use this
new system if it were to be implemented?
Ms. Waters. Anyone that would be required to use the system
will receive the needed training. Obviously, part of our goal
is to make the system designed in a real human-centric way so
that the ease of use minimizes training needs, et cetera, but
anyone that needs to interact with the system will receive
appropriate training.
Ms. Kiggans. Great. That is great to hear. Also, we have
had conversations just with different veterans, especially ones
who are older adults who are often victims of scammers and are
targeted by scammers through phone calls, emails, texts, and
letters in the mail.
One of the bills addresses this type of fraud in the new
information technology system. How would this type of system
help our older veterans protect themselves from fraud?
Ms. Waters. That is obviously related to the Veterans Scam
and Fraud Evasion (VSAFE) bill that is proposed, and we fully
support any efforts to help protect the veterans from being
succumbed to scams of any sort. It is important to note the VA
has had a VSAFE officer in place since 2023, and therefore, we
recommend that the bill clearly establish that VSAFE officer
position in the Veterans Experience Office to ensure that
incumbent can do everything they can to help these veterans.
Ms. Kiggans. How does VSAFE currently collaborate with
other efforts within the Federal Government to prevent fraud
and scams?
Ms. Waters. Unfortunately, that is not a subject I have
detailed information on but I am happy to take that question
for the record and get additional information.
Ms. Kiggans. Just curious if it will work with other
existing systems to provide the best just protection for our
veterans.
Last question for Ms. Waters, you know, we have been
pushing for good leadership and improved processes at the VA
since I have been on this subcommittee, so how is the VA making
sure these performance plans keep political appointees
accountable?
Ms. Waters. Thank you for that question. Obviously, one of
the focuses that we have overall is accountability in the
organization and so I know that there have been changes that
have been put into place for performance plans. We are always
focused on accountability.
Ms. Kiggans. Great.
Then one last question for Dr. McDonald, are you aware of
investigations conducted by OIG where an individual retired,
resigned, or transferred to another Federal agency while under
investigation by the VA?
Dr. McDonald. In terms of that being related to H.R. 3185,
I think that some of my OIG colleagues are working with your
subcommittee staff on our knowledge around and our views
related to that bill, so I would rather have them speak on that
because I am not knowledgeable about that. I think we should
let them discuss that with your staff.
Ms. Kiggans. That is fine. Real quick, in accordance with
committee rule 5E, I ask unanimous consent that Representative
Barrett from Michigan be permitted to participate in today's
subcommittee hearing. Without objection, so ordered.
Just one last question, from an oversight perspective would
it be beneficial for a Federal agency to know if an applicant
has been under prior investigation at a separate Federal
agency? Dr. McDonald.
Dr. McDonald. From an oversight perspective any information
we have would be helpful to our ongoing audits. Generally, our
audits are related to programmatic oversight more than specific
individuals.
Ms. Kiggans. Great, thank you.
I will now yield 5 minutes to the ranking member for her
questions.
Ms. Ramirez. Thank you, Chairman. As I mentioned earlier,
our agenda today contained several bills which would authorize
the VA to move forward with modernization efforts like the VA
scheduling supply chain management and fraud, waste, and abuse
detection. Modernization of the systems is absolutely critical,
however, doing so without compromising the continuum of care
for veterans requires thorough and careful investigation of the
root problems and the potential implementation challenges.
Dr. McDonald, how important is adequate staffing, clear
internal processes, and assessments of previous failures when
the VA moves to implement technologies like the electronic
health record and the centralized supply chain solution?
Dr. McDonald. Sure. Our work in different areas has found
that resources, clear processes, and assessments of both
failures and successes is important in implementing any updated
technology.
For an example, as you mentioned in your opening statement,
VA has started and stopped multiple times modernization efforts
for its supply chain and inventory management because the
department had not fully assessed its needs.
As another example, our work in EHRM has identified that a
lack of a full deployment schedule and full cost estimates up
front resulted in implementation delays and challenges.
Our perspective is that in general VA needs to make sure
they assess full needs upfront, develop processes and guidance,
provide training, and then also assess the effectiveness of any
modernization efforts after they are implemented.
Ms. Ramirez. Thank you, Ms. McDonald. I agree with that. I
appreciate that.
Dr. Phillips and Ms. Waters, can you commit to providing
the committee with data regarding the number of staff that
touched the modernization efforts we are discussing today, for
example, EHRM, supply chain, scheduling, and fraud and waste
and abuse monitoring, who have taken the Deferred Resignation
Program (DRP), who have resigned or otherwise left the VA since
January 20th, 2025?
Ms. Waters. Yes, Ranking Member. We commit to taking that
question for the record and providing that information.
Ms. Ramirez. Thank you so much. I know that I asked that
also of Dr. Phillips, just for the record?
Dr. Phillips. Yes. We can take that back. We are working
with our leadership on that and certainly we will provide that
information.
Ms. Ramirez. Thank you, Dr. Phillips. It is critical our
committee has updated numbers regarding the staffing of the
service lines before deploying new systems, so I appreciate
that.
Ms. Waters, I want to come back to you. Has the VA
performed an assessment of previous failures of the supply
chain modernization program, like the Defense Medical Logistic
Standard Support (DMLSS) and the latest solicitation last year,
to ensure future efforts will not be subject to the same
pitfalls?
Ms. Waters. Thank you for that question. We actually have
performed an assessment of previous challenges that have
happened, and as we have briefed the subcommittee on
previously, one of the things that we are doing in the supply
chain modernization effort at this point is doing a very
disciplined, incremental approach to ensure that we do not
suffer to the large program failures that have been seen in the
past.
Ms. Ramirez. Can you commit to providing some more of that
information to our committee before you move forward with the
supply chain modernization program?
Ms. Waters. Yes. We can do that.
Ms. Ramirez. Thank you. Let me ask you one last follow-up
question here. Do you feel that you have addressed the
challenges that if we had moved forward with this pilot to
restart the effort of H.R. 3494 and what it calls for, that it
would be resolved?
Ms. Waters. I do think--again, we are approaching it in a
very disciplined, incremental fashion to ensure that we do not
have those challenges.
Ms. Ramirez. Got it. I know I only have a minute so let me
try to move through my questions quicker. Your testimony
highlights challenges the VA may face in implementing Rep.
Franklin's personnel integrity bill due to new programs being
implemented by U.S. Office of Personnel Management (OPM). How
would Secretary Collins and pending reorganization plans impact
the modernization efforts and vision in these bills today?
Ms. Waters. I cannot speak directly to that question on the
plans. As you know, the secretary has been very clear that he
is working on a plan and that he will come back and brief once
the plan has been finalized.
Ms. Ramirez. Okay. Thank you, Ms. Waters, and that is
actually what I am concerned about. We are waiting for these
plans and what this reorganization will do and the impact while
we are talking about implementing modernization. I just want it
for the record that this is very clear.
This is not directed at anyone in particular here, but I
would be remiss if I did not share my concerns with H.R. 3185,
the Personnel Integrity in Veterans Affairs Act. I hope we can
work with Rep. Kiggans and Rep. Franklin to help make this bill
better.
I would also like to ask the VA, will you commit to
providing technical assistance on these bills before our markup
June 26th? Would you commit to provide technical assistance?
Ms. Waters. Thank you for that question. We absolutely will
commit to working and collaborating with the committee.
Ms. Ramirez. Thank you. With that, I yield back, Chairman.
Ms. Kiggans. The chair now recognizes Mr. Barrett for 5
minutes.
Mr. Barrett. Thank you, Madam Chair, appreciate it. Thank
you for your willingness to allow me to participate in today's
hearing.
Panelists, thank you. I wanted to speak with you about a
bill that I introduced, the FRAUD Act, which is before us
today, which would require the VA to acquire an IT system to
improve the department's ability to detect fraud or waste or
overcharging or overbilling in the community care program or in
care that is done outside the VA.
I wanted to start with Ms. Duke for a moment. VA's
testimony on the FRAUD Act stated that the savings generated
from preventing overpayments would quote, ``more than pay for
the technology and services,'' end quote. I was very excited to
see that. I think we should get, like, a refund for introducing
the bill.
With that being the case, can you explain how the VA came
to that conclusion? Is it a little bit of perhaps self-
awareness about the process right now and how you, kind of,
reached that conclusion?
Ms. Duke. I believe that that is based on comparing our
experience to private sector standards of recoupment because we
would intend to pursue such a system through our revolving
funds. The idea would be that the revenue generated would
ultimately pay for the investment.
Mr. Barrett. Yes. Okay. No. That is very encouraging and I
appreciate that. I also know that the bill does not include any
authorities for monetary penalties or fines or things of that
sort in a penalized fashion against providers who submit
fraudulent claims. Is that an authority that the VA would like
but does not have presently?
I guess it was my thought in drafting the bill the way we
did that that would fall under more of a, like, enforcement
agency and less on the VA.
Ms. Duke. I would say the challenge is that a lot of times
we are not well-equipped to identify the intent that is
necessary to constitute fraud.
Mr. Barrett. Okay.
Ms. Duke. What such a system would do is help us identify
where there are overpayments to focus recoupment attempts. I
think we would defer to the Department of Justice or others to
investigate fraud.
Mr. Barrett. Okay. No, I appreciate that.
Then, Dr. McDonald, could you just walk me through
basically how many community care claims does VA process for
payment on an annual basis? If you have any examples of fraud
or waste that you have identified and what department we would
need to look for as the most problematic likelihood of risk?
Dr. McDonald. Sure. I am just opening my binder here. It is
going to vary year to year but, for example, for the 1-year
period where the program integrity tool--and this is just this
1 year because I have it in front of me--was down, the
community care number of claims that were processed so they
were not able to be run through the program integrity tool for
co-payments was about 40 million and the dollar amount attached
to that was about $28.6 billion.
Mr. Barrett. $28.6 billion in total community care, not
suspected fraud, correct?
Dr. McDonald. Correct.
Mr. Barrett. Yes. Okay. Then do you have any ballpark
figure of fraud or do you have any examples for us of things
that went through the system until a more manual process was
done to determine that they were fraudulent?
Dr. McDonald. Things that our investigators look for when
they are looking for fraud is they look to see if there are
duplicate payments to providers for the same service. They will
look to see if providers are providing services to different
veterans or in different locations in the same day.
They would have, before the program integrity tool went
offline, used data from the tool to do that. When it was
offline they were able to use the actual claim payment data to
keep doing that.
Mr. Barrett. Okay, thank you. I know we have seen examples
of Medicaid fraud by providers in, you know, certainly that is
done mostly at the community level, whereas the VA is so
predominantly within the VA facilities and then the community
care augments that.
Knowing examples of just even Medicaid fraud that is taking
place and other fraudulent billing and other things of that
sort, I think it really does drive home the point of things
that we need to be mindful of and recognizing.
I also think that the deterrent effect would, hopefully,
also make itself worthwhile so that if a provider knows that
there is this, you know, watchdog agency or, you know, a system
that would, kind of, analyze and accrue risk factors, that that
would hopefully deter the likelihood of those events from
happening.
Appreciate the testimony today and look forward to working
with you in pursuit of getting this bill done and across the
finish line, so thank you.
Madam Chair, I yield back.
Ms. Kiggans. Thank you. In accordance with committee rule 5
(e), I ask unanimous consent that Representative Gray from
California be permitted to participate in today's subcommittee
hearing. Without objection, so ordered.
The Chair now recognizes Mr. Gray for 5 minutes.
Mr. Gray. Thank you, Chair Kiggans and Ranking Member
Ramirez for allowing me to join you this afternoon to speak
about my bill. I would also like to thank the committee's
Ranking Member, Congressman Takano, for co-sponsoring my
legislation.
My bill H.R. 3812, The STRIVE Act, would prohibit the VA
from collecting co-pays from veterans in situations where the
collection delay is due to the fault of the department. This
includes a pause in collections, IT system failure, or an
employee administrative error.
This bill also provides the Secretary with the authority to
enter into co-pay waivers on behalf of the veteran. As you may
know, under current law veterans are required to individually
initiate a request for a waiver. That leaves the burden in the
hands of the veteran.
This bill rightfully places that burden on the government.
No veteran should pay the cost of administrative failures or
face unexpected costs when receiving care. That is why this
bill would protect veterans from paying co-pays that are billed
for care that is over 2 years old or exceeds 2,000 dollars,
including debts incurred following the pause of pharmacy co-
pays with the EHRM program, the COVID co-pay relief
expirations, and other IT system failures. Our Nation has a
responsibility to eliminate the barriers that stand in between
veterans and their care.
Dr. McDonald, from your role at the Office of the Inspector
General, how often have you seen the IT system failures and
administrative errors resulting in delayed co-pays and other
financial burdens for veterans?
Dr. McDonald. We have seen this in our oversight work. For
example, one of the places where we have seen this is when the
program integrity tool was down there was a delay in billing
veterans for co-payments for non-service-connected care, and it
was down from February 2023 through August 2024.
It is also our understanding that right now revenue
operations is still working through the backlog of those
claims, so some veterans could still experience a delay in when
they receive a bill for a co-payment.
Then the amount of the co-payments they receive will vary
depending on the services provided and their disability rating
and income when they receive those bills.
Mr. Gray. Thank you.
Ms. Waters, as I mentioned, our introduced text places the
burden of entering into debt waivers on the Federal Government.
Do you believe this would improve consistency and fairness for
veterans impacted by the departmental errors?
Ms. Waters. I am going to defer that question to Ms. Duke.
Ms. Duke. Yes, thank you. We agree that there is a greater
opportunity for consistency and more forward-leaning in
protecting our veterans. I think, again, our concerns with the
legislation included in the testimony get at making sure that
the legislation is consistent and we are able to equally
address veterans' needs without opening the door to perverse
incentives under the policy.
Mr. Gray. Thank you.
Ms. Waters, how many veterans are impacted by these delayed
co-pays from internal failures and errors like the Program
Integrity Tool (PIT) pause and the EHRM pharmacy co-pay issue?
Or, Ms. Duke, do you want to take that?
Ms. Duke. Yes, I will take that one. We do not know the
full number until we have fully ingested all of the data from
the PIT pause because one of the things that we are working our
way through is whether or not the veterans who received care
are liable for co-payments or whether they are exempt.
Mr. Gray. I have been showing data that suggest over 85,000
veterans were impacted with the PIT pause.
Ms. Duke. That sounds consistent with what we have seen.
Mr. Gray. Okay, thank you.
To me, this data further emphasizes the need for this
critical legislation. Veterans should not face barriers to care
they have rightfully earned. At a time when the Administration
seems focused on fraud and abuse, reckless cuts often make the
bureaucratic process even worse.
This bill is an example where the burden is placed on the
Federal Government to make veterans' lives easier. That really
should be the gold standard, in my opinion, for reform. I look
forward to continuing this conversation with the Department of
Veteran Affairs to ensure this legislation addresses both the
agency and veteran needs.
With that, I yield back.
Ms. Kiggans. Thank you very much.
With that, the first panel of witnesses is now excused and
I would like to invite the second panel of witnesses to come
forward.
Thank you and welcome to our second panel. We will hear
today from the following witnesses: Mr. Cole Lyle, the Director
of the Veterans Affairs and Rehabilitation Division in
Washington, DC. Office of the American Legion; and Mr. Cody
Carbone, the Director of Government Relations at the Digital
Chamber; and Mr. Edward O'Bryan of the Medical University of
South Carolina (MUSC).
I would now like to welcome you all and also ask you to
stand and please raise your right hand. Do you solemnly swear
the testimony you are about to provide is the truth, the whole
truth, and nothing but the truth?
[Witnesses sworn]
Ms. Kiggans. Thank you. You may be seated, and let the
record reflect that all witnesses have answered in the
affirmative. Thank you all for your attendance and testimony
this afternoon.
Mr. Lyle, you are now recognized for 5 minutes to deliver
your testimony on behalf of the American Legion.
STATEMENT OF COLE LYLE
Mr. Lyle. Well, thank you, Chairwoman Kiggans, Ranking
Member Ramirez, and distinguished members of the Subcommittee.
On behalf of National Commander James LaCoursiere, Jr. and the
more than 1.5 million dues-paying members of the American
Legion, thank you for the opportunity to testify today on
pending legislation.
It is an honor to represent an organization that for over
100 years has stood as a voice for America's veterans, guided
by grassroots resolutions passed at the local post level and
elevated through our national convention.
Today the American Legion supports nearly all the bills
under consideration because they reflect a bipartisan
commitment to strengthening accountability, improving access,
and safeguarding the dignity of those who have worn the
uniform. First, we strongly support H.R. 984, which provides
equitable relief to veterans harmed by administrative errors.
With the implementation of the Sergeant First Class Heath
Robinson Honoring our Promise to Address Comprehensive Toxics
(PACT) Act and record volume of claims submitted, the risk of
human error has grown.
Veterans should not bear the financial and psychological
burden for mistakes beyond their control. The American Legion
in 2024 alone facilitated nearly $25 million in debt relief. We
know first-hand the impacts these errors can have.
We also support H.R. 1663, the Veterans Scam and Fraud
Evasion, or VSAFE Act. Veterans are 40 percent more likely to
be targeted by financial scams and many fall victim due to
unique vulnerabilities tied to military service. Creating a
dedicated fraud officer at VA is not only overdue, it is
essential. Veterans deserve the same protections afforded to
consumers in the private sector.
On accountability, the Legion backs H.R. 3185, which
ensures that VA employees under investigation for misconduct
cannot simply retire or transfer without consequences. This
legislation rightly balances due process with the need to
maintain trust in the VA workforce. We must hold ourselves to
the same standards of honor and integrity we expect from those
we serve.
We also commend efforts to modernize and streamline access
to care. H.R.s 3482 and 3494 address longstanding problems with
community care scheduling and inventory management, problems
that continue to delay care and waste taxpayer dollars. These
bills harness smart technology to serve veterans more
efficiently and safely.
While we support these bills, uniform training for VA
staff, particularly for scheduling, will prove vital to ensure
successful and effective implementation across the enterprise.
The Legion would also recommend VA schedulers have the ability
to provide veterans with an apples-to-apples comparison of wait
times and conversations with the individual veteran.
With regard to electronic health records, the American
Legion supports the draft legislation to modernize the VA's
EHRM system. The past 2 decades of failed attempt and
fragmented leadership have cost time, money, and trust. Many of
this bill's provisions, including the establishment of a
baseline for standardized clinical workflows, develop clearly
defining leadership roles, and securing personal data will go a
long way toward program sustainability and successful
deployment at future sites.
Finally, we support legislation that prohibits co-pay
collections from veterans when the delay is the VA's fault.
With recent extended pauses to VA collection of co-pays and
EHRM pharmaceuticals and the program integrity tool, many
veterans are receiving delayed bills in the thousands of
dollars which creates financial hardship on those with fixed
incomes.
Veterans should not receive a bill years after receiving
care due to internal system delays or administrative error.
Chairwoman Kiggans, Ranking Member Ramirez, our veterans do
not ask for special treatment. They only ask for the care and
benefits they earned delivered with competence, integrity, and
compassion. The bills under discussion today move us closer to
that standard.
The American Legion is proud to support these efforts.
Thanks to this subcommittee for its advocacy on behalf of our
Nation's veterans, and I look forward to answering your
questions.
[The Prepared Statement Of Cole Lyle Appears In The
Appendix]
Ms. Kiggans. Thank you, Mr. Lyle. The written statement of
Mr. Lyle will be entered into the hearing record.
In accordance with committee rule 5 (e), I ask unanimous
consent that Representative Mace from South Carolina be
permitted to participate in today's subcommittee hearing.
Without objection, so ordered.
Mr. Carbone, you are now recognized for 5 minutes to
deliver your testimony on behalf of the digital chamber.
STATEMENT OF CODY CARBONE
Mr. Carbone. Chairwoman Kiggans, Ranking Member Ramirez,
and distinguished members of the subcommittee, thank you for
the opportunity to testify before you this afternoon. My name
is Cody Carbone, and I proudly serve as the Chief Executive
Officer (CEO) of the Digital Chamber.
The Digital Chamber is a non-profit trade organization
committed to promoting blockchain adoption. We envision a fair
and inclusive digital ecosystem where everyone has the
opportunity to participate.
I am here today on behalf of our membership representing
over 200 companies across the globe. We sincerely appreciate
the subcommittee's interest in harnessing emerging technologies
to enhance the services provided to those who have served our
Nation.
Congresswoman Nancy Mace has introduced H.R. 3455, the
Veterans Affairs Distributed Ledger Innovation Act of 2025,
directing the U.S. Department of Veterans Affairs to study how
blockchain technology can revolutionize the delivery of
veterans' benefits and services. Her efforts highlight
bipartisan recognition that outdated 20th century systems are
failing our veterans and that modern tools like blockchain must
be explored.
Modernization cannot wait. Blockchain has the potential to
transform the VA. The VA possesses a commendable history of
innovation, ranging from the pioneering implementation of
electronic medical records to recent advancements in cloud
computing and artificial intelligence.
However, many of the legacy systems that once placed the VA
at the cutting edge are now straining under 21st century
demands, leading to slowing claims, fragmenting health records,
and leaving veterans to navigate a maze of paper and outdated
portals.
The VA provides critical benefits and care to a community
of nearly 17 million U.S. military veterans, along with their
families and survivors. Ensuring that these veterans receive
efficient, transparent, and reliable services must be a
national priority. We stand at a moment when the digital
revolution can be utilized in the service of those who served
us.
What is blockchain? Blockchain is not a buzzword or a
speculative asset. It is infrastructure, a digital ledger that
can secure records, automate trust, and facilitate coordination
across silos without requiring central gatekeepers.
In practice, that means a veteran does not have to submit
the same paperwork three times to three different agencies.
Their medical records are available where and when they need
them without compromising privacy. Benefits are paid on time
with audit trails that prevent fraud and ensure accountability.
Credentials, discharge documents, and proof of service can
be cryptographically verified in seconds. This is not theory.
These are real world applications already working in financial
services, health care, global supply chains, and even some
government settings. What is missing is the commitment to apply
these tools where they are most needed.
While blockchain presents solutions, it is crucial to note
that blockchain is not a cure-all. Implementing innovation
requires careful planning. The Digital Chamber and industry
partners are ready to assist and share expertise as the VA and
Congress explore these applications.
H.R. 3455 is a prudent first step in identifying high value
opportunities and addressing any associated risks with the
deployment of blockchain technology at the VA. It is a
necessary step toward ensuring the VA's technology matches its
mission, to care for those who have borne the battle.
In conclusion, Chairwoman, I would like to express my
gratitude to you and the subcommittee for your exemplary
leadership in examining emerging technologies related to
veteran services and opportunities to reduce government waste.
I am appreciative of the opportunity to provide testimony
today on this significant matter. I am prepared to respond to
any questions or inquiries and to continue collaborating with
you and the subcommittee in an effort to improve the systems
that support our veterans. Thank you.
[The Prepared Statement Of Cody Carbone Appears In The
Appendix]
Ms. Kiggans. Thank you, Mr. Carbone. The written statement
of Mr. Carbone will be entered into the hearing record.
Dr. O'Bryan, you are now recognized for 5 minutes to
deliver your testimony on behalf of the Medical University of
South Carolina.
STATEMENT OF EDWARD O'BRYAN
Dr. O'Bryan. Thank you for having me. Thank you to the
committee and thank you to the veterans and dependents.
My name is Dr. Edward O'Bryan. I am an associate professor
of medicine at the Medical University of South Carolina. Prior
to this role, I had the privilege of serving as an attending
physician for 6 years at the Ralph H. Johnson VA Medical
Center, also in Charleston, South Carolina, where I also
completed some residency training.
This hearing is deeply personal to me. The Ralph H. Johnson
VA Medical Center is named in honor of a Marine who gave his
life from Vietnam to save my uncle, Lieutenant Clebe McClary,
also a proud Marine. My grandfather and father also served the
United States Marine Corps. The bond I feel with the veteran
community is not only professional, it is personal.
Over the past 15 years, I have worked at the intersection
of VA and academic medicine, and I have seen first-hand how
critical it is to maintain strong, stable, and streamlined
relationships between VA medical centers and their academic
affiliates. The partnerships between the VA and institutions
like MUSC are essential for delivering the best possible care
to our Nation's veterans.
The bills under consideration today would enhance those
connections and ensure that veterans receive timely, high-
quality care, whether within the VA or in the community
setting, specifically to H.R. 3482. This bill creates a direct
digital scheduling link between the VA and community providers.
I have seen the benefits of this model first-hand.
By incorporating MUSC's specialists directly into the VA
scheduling platform we have drastically reduced delays in
consults and increased transparency for both patients and care
teams.
Allowing VA staff to view and book community appointments
will empower schedulers, reduce wait times, and improve
outcomes. Our VA system, including Congresswoman Mace's
district, has shown excellent results, as highlighted below.
We have built a strong academic affiliation with the Ralph
H. Johnson VA. We started utilizing the External Provider
Scheduling (EPS) system roughly January 2024, but it really
ramped up only within the last 6 months. As of May 2025, we
scheduled a total of 1,863 appointments utilizing the EPS
system. Of those, 34 percent have been scheduled appointments
at our system at MUSC.
The Ralph H. Johnson VA Center currently utilizes the EPS
to schedule directly into 26 sub-specialties at MUSC in real
time. I will not go through all the specialties, but the
highlights are the majority of the specialties are orthopedics,
hematology, oncology, a lot of specialties you might consider.
Data shows for the Charleston veterans who are eligible for
and elect to utilize community care, scheduling the community
care appointment through EPS reduces veteran wait time by an
average of 8.8 days. On average, this wait time is reduced by
33 percent for all sites using EPS for community care within
our area scheduling versus traditional community care
scheduling, which involves calling and faxing.
In my time at MUSC and the Ralph H. Johnson VA Medical
Center I cared for thousands of veterans, and the VA
collaborates well with local academic affiliates. Veterans
receive coordinated, specialist-driven, high quality, timely
care. These legislative proposals all share a commitment to
that mission: modernization, accountability, integrity, and
faster access to care.
Thank you for the opportunity to advocate for these
important reforms, and I stand ready to assist the committee or
answer any questions as well.
[The Prepared Statement Of Edward O'Bryan Appears In The
Appendix]
Ms. Kiggans. Thank you, Dr. O'Bryan. The written statement
of Dr. O'Bryan will be entered into the hearing record.
We will now proceed to questioning, and I recognize myself
for 5 minutes.
Mr. Lyle, what is a recent example of a more sophisticated
and complex scam toward veterans that the American Legion is
aware of?
Mr. Lyle. Thank you, Chairwoman Kiggans. I could take that
for the record and get back with a specific case or two. I will
say that the Federal Trade Commission (FTC) has noted a recent
uptick in identity theft and other forms of financial crimes in
the military and veteran communities.
I will also just note that for the Consumer Sentinel
Network Data Book in the most recent report released this year,
the military community lost 25 percent more by scammers for
year 2024 than the year before, totaling up to a 584 million
dollar loss.
Ms. Kiggans. Do you hear from your members that they are
actually receiving information from the VA about how to prevent
or protect themselves from this type of fraud and the
prevention efforts that the VA has in place? Are they receiving
that information?
Mr. Lyle. I will have to take that for the record.
Ms. Kiggans. I am just curious if they are at least aware
of some of the efforts. Could you explain the Legion's position
on what improved accountability measures at the VA would do for
veterans' trust?
Mr. Lyle. I think, generally speaking, we want a VA that is
accountable to the veterans that they serve. I think the legion
has historically supported multiple efforts to increase
accountability at the VA. There have been many instances.
Again, I can follow up and provide specific cases where
Legionnaires across the country have experienced issues with VA
providers who were then transferred to another facility or they
were given another appointment with another VA provider because
of those issues. I can follow up with some specifics.
Ms. Kiggans. Is there anything that the American Legion
specifically is doing for veterans to prevent them from being
victims of frauds? Or do you refer them to a certain
organization if they come to you with these problems?
Mr. Lyle. We have several thousand veteran service officers
across the country who routinely interact with veterans on the
ground at the local post level to help them identify resources,
obviously, to help prevent the fraud before it happens in the
first place, identify scams, but then also, again, if they fall
victim to one of these scams work with the VA to provide relief
for that or debt waivers for veterans.
Ms. Kiggans. Does the VA have a reporting system or a data
base that you can report to the Department of Veteran Affairs
so that they can be on the lookout for these potential scams
that may be affecting other localities as well?
Mr. Lyle. I know the VA routinely puts out information for
veterans, you know, in multiple different ways. I am not aware
of a specific data base but I can take that for the record as
well.
Ms. Kiggans. That would be another good idea for us to
think about but thank you. Then last question for Mr. Lyle,
does it concern you that the OIG has characterized the VA's
national ordering system as unsustainable? How does this
contribute to waste, fraud, and abuse at the VA?
Mr. Lyle. I believe you are referring to H.R. 3494 with the
OIG complaints. There have been multiple instances,
particularly in I think the Medical Center in Houston, across
the country of waste and abuse in the supply chain.
I think this bill in particular one of the reasons we
support it is, as the VA noted, I think the savings that the VA
would garner based on the implementation of this bill to
prevent that level of waste and abuse in the supply chain
system would not only benefit taxpayers but veterans themselves
because oftentimes you see some of these supply chain issues
can lead to delayed surgeries or care.
Ms. Kiggans. I agree.
Let us see. I will now yield 5 minutes to the ranking
member for her questions.
Ms. Ramirez. Thank you, Chairwoman. I am thankful to the
witnesses that are here with us today and even more thankful
Representative Gray was able to join us today as he is the
sponsor of the only one Democratic bill on today's agenda and
one that seeks to alleviate unnecessary financial burdens that
may serve as a barrier to veterans' health care access.
Dr. O'Bryan, I have a question for you. Your testimony
highlights research to this point. How might waiving co-pays in
certain situations increase health care utilization for
vulnerable populations?
Dr. O'Bryan. Thank you for the question. I have seen first-
hand a lot of patients not fill prescriptions because of co-pay
concerns, you know, not seek care, not seek specialist care and
so that is a real issue, you know.
Then the whole concept of co-pay, obviously, was put forth
kind of to decrease utilization back in the day, you know?
The second aspect was to have other people have skin in the
game, right? My concept is I think the veterans already have
skin in the game by serving so the more we can do to get rid of
the co-pays for the veterans the better.
Ms. Ramirez. I agree with that. Thank you, Dr. O'Bryan.
Mr. Lyle, thank you for joining us today again as our (VSO)
Veterans Service Organization representative. I was happy to
see the American Legion support H.R. 3812. What impact would
the passage of the STRIVE Act and the reduction of delayed co-
payments have for the Legion's membership?
Mr. Lyle. Well, thank you, Ranking Member Ramirez. I
appreciate the question. The American Legion has multiple
overseas departments that we have conducted system-wide saving
visits, regional office action review visits of different
sites, identify best practices, talk about the biggest
challenges so they do not become systemic issues.
I think the ability to provide care in those remote areas
would be strengthened by provisions in this particular bill,
particularly considering that in some areas in Puerto Rico, for
example, the staffing for VA providers at those facilities have
decreased by, I think, 40 percent after those incidents. I
think it could help significantly for delivery of care.
Ms. Ramirez. Thank you, Mr. Lyle. I have another follow-up
question for you. The discussion draft to modernize the
electronic health record before us maintains language that
prevents the inappropriate use or monetization of veterans'
protected health information or we say PHI cause we love
acronyms and personalized identified information.
My question to you is how important is it that this
language remain in this bill? Could you elaborate on the
significance of protecting veteran data and its implications
for the American Legion's membership?
Mr. Lyle. Absolutely. Thank you again, Ranking Member
Ramirez. We just had a conversation about the increased
likelihood of veterans to be taken advantage of by scams.
Obviously, the increased or the not protecting veteran data
increases the likelihood that their personally identifiable
information, particularly in health care, could get misused and
negatively impact not only their health care and benefits
delivery but their psychological care and stress that they
would undergo from their data being sold to third parties.
Ms. Ramirez. Yes. No, thank you for that. I just want to
note before I ask a couple more questions, I agree with you. It
is extremely important that as we move forward with
modernization efforts that we ensure that we are protecting all
of the information of our veterans, especially in this instance
when, to your point, you are constantly victims of a number of
scams and frauds and especially some of our senior veterans who
are experiencing this on a regular basis. Thank you for that.
Dr. O'Bryan, I want to come back to you. I was impressed to
see the work that the VA and the Medical University of South
Carolina have performed in decreasing scheduling wait times
utilizing the external provider scheduling system. One of the
challenges we have heard with some of the EPS sites is the
awareness and engagement aspect with community providers.
How many MUSC, Medical University of South Carolina,
providers are engaged in sharing their schedules with VA?
Dr. O'Bryan. Prior to this May there was about a hundred,
but we added 300 so now there is about 410 or 15 currently.
Ms. Ramirez. Four hundred and what?
Dr. O'Bryan. About 415 providers currently.
Ms. Ramirez. Got it. One last follow-up question for you.
How might the department improve their outreach efforts into
the community care provider network to ensure success in the
scheduling tool?
Dr. O'Bryan. That is a great question. The fact that I am,
kind of, in charge of this veteran's aspect and was unaware of
it, yes, is interesting. I think maybe even having a liaison to
go at least to these large academic centers, right, in these
states where most of the doctors are concentrated and at least
provide awareness there to start makes sense to me.
Ms. Ramirez. Thank you, Dr. O'Bryan.
Chairwoman, I yield back.
Ms. Kiggans. The chair now gives 5 minutes to Mr. Barrett
for questions.
Mr. Barrett. Thank you, Madam Chair.
To the panelists, thank you for being here today. I wanted
to discuss with you the bill that I introduced, the Veterans
Community Care Scheduling Improvement Act. This would really, I
hope, benefit veterans on the community care side who are
looking to schedule appointments in a timely manner.
I have the privilege of chairing the Subcommittee on
Technology and Modernization. We heard testimony about this and
how it is inconsistent throughout the VA and that it is not
widely rolled out in as many VA hospitals as we would like,
leading to inefficiencies with how veterans will schedule care
that they are required.
Sometimes that will be most timely and efficient within the
VA network, other times it will be more timely and efficient
outside. It might be closer to home and whatnot through the
community care program.
Dr. O'Bryan, I wanted to start with you for a moment. You
mentioned in your testimony that EPS cut down veteran wait
times by 9 days in the area that you serve. Can you tell us how
that has worked and what the kind of success is attributed to?
Dr. O'Bryan. Sure. I think the first I will say avenue of
success is when we have a really great system or team at the VA
themselves who we work directly with, who I used to work with
in the emergency department, actually, a group of nurses who
are aware of the amount of providers that we have at MUSC.
As we have added providers to the system there is more
opportunity to schedule veterans geographically and/or by
specialists within our system.
Mr. Barrett. Yes. I know that this is a two-way street
where the VA has the scheduling ability. They have systems that
will allow them to see the availability on the provider side
outside of the VA, and there has to be some reciprocal sharing
of information that way.
Did you find that process to be difficult at all for, you
know, for your organizations you were trying to get this done?
Dr. O'Bryan. I would say the new process that I am familiar
with is a million times better than the old way of fax
machines. We were physically taking paperwork back and forth
before.
Mr. Barrett. Okay, thank you. Then based on what you have
seen, do you believe the VA should be required to track how
much time and money is saved with tools like EPS?
Dr. O'Bryan. Yes.
Mr. Barrett. Okay. Would setting performance goals help
hold the department accountable in your opinion?
Dr. O'Bryan. I think so.
Mr. Barrett. Okay, very good. Thank you.
Mr. Lyle, appreciate you being here. I am a life member of
the American Legion. Invite you out to Howell sometime in my
district. We have a great post there and we would love to have
you some time as a guest. Thank you for the American Legion's
support of this bill.
Do you believe veterans would get faster care if VA
schedules and not just the contractors that set these
appointments have the tools to book appointments directly with
outside providers?
Mr. Lyle. Yes is the short answer to that question.
Scheduling since the Mission Act has been one of the main
challenges of implementing community care, obviously, at the
VA. In this bill particularly, the American Legion was
encouraged to see that the secretary could utilize an already
existing contract and we are aware of the EPS contract while I
have been employed that has been very successful, as I pointed
to in the opening statement.
I think the implementation just requires increasing
communication with new areas to ensure that providers are
trained to be able to use the system. Very encouraging data and
results from that program, and I think it helps eliminate one
of the main issues with the community care program.
Mr. Barrett. Yes. I had a referral myself for a audiology
appointment at the VA not long ago, and a provider, a vendor
called because it got basically outsourced from the VA and they
asked me my availability. I gave them some times. Of course, I
travel back and forth here to Washington most weeks and I had
dates that I was not available back home.
I gave them those dates I was not available, and they
called me back, I do not know, the next day and scheduled me an
appointment on a date I was not going to be in Michigan. That
necessitated me to then call into the call line and, you know,
clogging up the phone lines for somebody else that also wants
to call in and schedule something inefficiently.
I told them my situation and they said, ``Oh, well, we
could not accommodate your scheduling request so our process we
follow is we just give you the next available appointment.'' I
was, like, well the next available appointment on a day I am
600 miles from home does not actually accommodate the needs
that I have.
It is not about, you know, scheduling me the next
available. It is finding the time that works for me. It was a
very inefficient methodology that, kind of, you know, in a
personal sense exposed some of this. I was able to see, and I
am hopeful through doing this bill and the follow through with
that that it will help, you know, prevent that inefficiency
from becoming problematic for the veterans.
With that, I am out of time, and Madam Chair, I yield back
and appreciate the ability to ask questions today.
Ms. Kiggans. Thank you.
The chair now recognizes Ms. Mace for 5 minutes.
Ms. Mace. Thank you, Madam Chair, for allowing me to waive
onto this hearing today.
I want to thank you to our witnesses who are appearing
before our Veterans Affairs Subcommittee.
Distributed technology like blockchain has the potential to
create an unchangeable, auditable trail of interactions
allowing VA systems to verify claims more efficiently, reduce
duplicate records, and track services and payments with
precision. If leveraged properly, this could mean faster and
more accurate decisions and reduced costs.
My bill H.R. 3455, the Veterans Affairs Distributed Ledger
Technology Innovation Act, would direct the secretary of
Veterans Affairs to study how distributed ledger technology
like blockchain could improve the veterans' claims adjudication
process and help prevent waste, fraud, and abuse in the
administration of veterans' benefits.
We owe it to our vets to process their claims quickly and
efficiently. We also owe it to our citizens to ensure their
money is spent wisely. This bill would examine how leveraging
distributed ledger technologies such as blockchain could help
us meet both of these objectives.
I want to extend a special thank you to the Medical
University of South Carolina's Dr. O'Bryan for being here
today. MUSC's work in South Carolina has a tremendous impact on
our veterans and on our State.
MUSC is one of the premier academic and health care
institutions in the country and continues to set the bar for
patient care, research, and training. I appreciate your work at
the Ralph H. Johnson Medical VA Center. I have family who have
been treated there for years, and they do a fine job of
protecting our veterans.
I will readily admit, even as the daughter of a veteran, I
do not always know what programs are available to my family
members and so we do have some work to do.
My first question is going to go to Mr. Carbone today. Why
should Congress consider distributed ledger technology for
modernizing veteran services? How does it compare to the legacy
systems that are in play today?
Mr. Carbone. Thank you for the question, Congresswoman, and
thank you for your leadership on this bill. I think you said it
best. Veterans deserve our best and the legacy systems,
frankly, just have not met the moment. We have seen that with
some of the delays in some of the GI Bill processing benefits.
Ms. Mace. Yes.
Mr. Carbone. Right now, legacy systems are siloed. They are
fragile, and they are unable to scale with the modernization
that the VA needs. What blockchain can do is cut down on some
of those silos and maybe cut down some of those central points
of failure. It puts everything on a unified shared ledger that
is transparent and auditable, and I think it will really help
automate the processes we have today.
Ms. Mace. What about fraud and abuse? How can we use
blockchain to reduce the amount of fraud and abuse?
Mr. Carbone. Well, that is one of the beauties of
blockchain. It is immutable and it is transparent and so it is
almost impossible to have fraud on there. Those different
instances of fraud or abuse will be checked immediately and
there will be multiple people who have access to the
distributed ledger to understand where they are coming from to
cut those immediately.
Ms. Mace. Explain to those who may not be familiar with
blockchain technology, how is it impossible?
Mr. Carbone. When there is a input to the distributed
ledger that goes in every single node or computer that has
access to the technology and sees that that input has been made
so it is and auditable and transparent.
At the same time, if there is any other additional input or
if there are any falsified records, every single person who has
access to the network would have to confirm that that input is
legit.
If you have, you know, the only way to really tamper with
the blockchain or to submit some kind of fraudulent claim is if
every single person who has access to the network and everyone
who has oversight across the VA decides that that was
inaccurate input.
Ms. Mace. Okay, great.
Then I have a question for Dr. O'Bryan. Can you speak to
some of the innovative ways MUSC is improving care for our
veterans in South Carolina?
Dr. O'Bryan. Oh, sure. I would say one big one is we are
building--we have a comprehensive cancer center and we are
expanding the geography of our cancer center throughout the
State to be within the geographic radius of where our veterans
are needed. I think that is one of the big ones.
Ms. Mace. Great. I have 1 minute left, so I am going to ask
a question, same question of all three of you. If there was one
thing that you could do today for our veterans, just one thing,
could be small, could be big, but what is the one thing you
would do?
Dr. O'Bryan, you are first. It is not a trick question. One
thing.
Dr. O'Bryan. I might in trouble for this. I would probably
give the world's greatest insurance.
Ms. Mace. Mr. Lyle.
Mr. Lyle. The American Legion testified in our legislative
priorities that we would like to see VA's approach to suicide
prevention change and not just be through the lens of mental
health because suicide is not always just a mental health
problem. It is usually a conglomeration of different issues, so
big picture change how we look at suicide and adjust programs
accordingly.
Ms. Mace. Mr. Carbone.
Mr. Carbone. Pass modernization legislation to ensure that
benefits are paid out within seconds and minutes, and not days,
weeks, and months.
Ms. Mace. Or years. Thank you, Madam Chair, and I yield
back.
Ms. Kiggans. Thank you very much.
Thank you to all of our witnesses for attending this
hearing and providing testimony to improve several of these
bills. I appreciate the comments and suggestions from both the
first and second panels.
As I said previously, our work on the subcommittee relies
on dialog and consultation with experts who have immediate
insight into how these legislative fixes will impact veterans'
lives.
Thank you to our colleagues from the Technology and
Modernization Subcommittee for their great work in improving
the digital infrastructure at VA.
Finally, thank you to the members who waived on for this
legislative hearing to speak about their bills and the
importance of getting things right for veterans. I look forward
to further discussions on how we may continue to improve the
proposals that we received testimony on today.
With that, I yield to the Ranking Member for her closing
statement.
Ms. Ramirez. Thank you, Chair Kiggans.
I want to thank all of the witnesses that were here in both
first and second panel. All the testimoneys today, especially
VA's point in that this committee needs more conversations on
these bills before they are ready for advancement.
These programs from the electronic health record and supply
chain to appointment scheduling and fraud, waste, and abuse
detection are too critical to VA's operations and our veterans'
quality of care for us to rush forward with incomplete plans.
We as a committee of jurisdiction must sit down with
stakeholders and make the necessary changes to ensure each one
of these bills is ready for the VA to implement soundly and as
effectively as possible.
I hope we can find time to have these conversations before
the markup before we mark up this legislation, and I do
appreciate the follow up that I will be getting from the VA on
a number of items that I requested in the first panel.
With that, Chair, I yield back.
Ms. Kiggans. Thank you again to our witnesses for being
here today. I ask unanimous consent that all members shall have
5 legislative days in which to revise and extend their remarks
and include any extraneous material. Hearing no objections, so
ordered.
This hearing is now adjourned.
[Whereupon, at 3:38 p.m., the subcommittee was adjourned.]
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A P P E N D I X
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Prepared Statements of Witnesses
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Prepared Statement of Cherri Waters
[[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Prepared Statement of Jennifer McDonald
Chairwoman Kiggans, Ranking Member Ramirez, and members of the
Subcommittee, thank you for the opportunity to testify on the
independent oversight conducted by the Office of Inspector General
(OIG) on the pause taken by the Veterans Health Administration (VHA) in
using its Program Integrity Tool, which relates to one of the bills
before you. Our testimony was requested by the subcommittee on this
tool because the ``FRAUD Act of 2025'' requires VA ``to use an
information technology (IT) system to detect fraud, waste, and abuse''
within community care claims, and the Program Integrity Tool has
previously served this function in a limited capacity. The OIG's work
has outlined the significant hindrances the Program Integrity Tool's
pause has had on VHA's revenue collection processes and on the
detection and mitigation of fraud and waste related to the delivery of
community care.
Many of the bills under consideration also require VA to develop or
improve IT systems. IT modernization has consistently been a major
management challenge for VA. The OIG has repeatedly conducted audits,
reviews, and inspections that identify deficiencies in how VA plans,
implements, and remediates identified weaknesses in these efforts. This
statement, therefore, also touches on the OIG's oversight of many VA
critical systems and modernization initiatives.
BACKGROUND
The Program Integrity Tool is a system that consolidates data from
multiple VA community care programs. It is a repository of post-payment
claims. For revenue operations, VHA uses the data to determine if
veterans or their private insurance companies should be billed for care
that is not connected to injuries or conditions related to their
military service.\1\ To support VHA's fraud and waste detection and
mitigation efforts, data from the tool can be used to identify
duplicate claim payments or indicators of potential fraud, such as
payments to providers across different community care programs in
different locations on the same day.
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\1\ Under 38 U.S.C. Sec. 1729, the United States has a right to
recover from third parties the cost of medical care and treatment
furnished by the United States. In addition, 38 C.F.R. Sec. 17.101,
the Collection or Recovery by VA for Medical Care or Services Provided
or Furnished to a Veteran for a Non-Service Connected Disability,
provides for recovery from private insurance by VA for medical care
that was unrelated to veterans' military service. VA is not able to
recover the cost of medical care for veterans who do not have private
health insurance.
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As detailed in this statement, VHA's Office of Integrity and
Compliance, in collaboration with VA's Office of Information and
Technology, paused operations of the Program Integrity Tool in February
2023, after becoming aware of ongoing issues with its data base logic
and unreliable data. The pause was intended to allow VHA time to
evaluate the tool's processes, data, documentation, and underlying
information technology system architecture, and to determine the cause
of any data errors and identify improvement opportunities.
In July 2024, the OIG issued a management advisory memorandum to
the under secretary for health to highlight the major impacts of the
tool's pause on VHA's revenue collection processes, as well as on
identifying fraud and waste related to community healthcare claims.\2\
The memorandum provided VHA with information necessary to address the
identified concerns. In its response, VA officials stated they had
resumed using data from the Program Integrity Tool for revenue
collection for community care claims but were still considering the
path forward for the tool's oversight functions, including audit and
compliance efforts. The information that follows highlights
deficiencies identified with the tool's data integrity and accuracy and
the impact of the pause on both VHA and the OIG's oversight work.
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\2\ VA OIG, The Pause of the Program Integrity Tool Is Impeding
Community Care Revenue Collections and Related Oversight Operations,
July 16, 2024. The OIG issues management advisory memoranda when
exigent circumstances or areas of concern are identified by OIG hotline
allegations or during its oversight work, particularly when immediate
action by VA can help reduce further risk of harm to veterans or
significant financial losses.
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Community Care Provider Management
Through the Veterans Community Care Program, VHA buys care from
local providers for veterans through network contracts managed by two
third-party administrators (TPAs). These TPAs develop and administer
the network of community healthcare providers. TPAs are also
responsible for paying those providers and then seeking reimbursement
from VHA. When services are unavailable or insufficient to meet the
needs of veterans through the network, however, VA medical facilities
may directly establish veteran care agreements with area clinicians. VA
also has Veteran Family Member Programs, for which VA shares the cost
of certain community healthcare services for eligible family members.
Finally, VHA's HealthShare Referral Manager generates referrals and
forwards authorizations to community providers. The related claims and
referral data from these systems flow into the Program Integrity Tool.
Typically, a community care provider submits a claim through the
TPAs or VHA's electronic system or by paper after care is provided. The
claim is then either paid for by TPAs for network providers (who are
then reimbursed by VA) or by VA for facility direct care agreements.
Once the claims are paid, VA then bills any copayment to the veteran,
or the veteran's private health insurer if the care is unrelated to a
service-connected condition.\3\
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\3\ VHA will not charge a copayment for treating health conditions
that are related to military service, catastrophic disabilities, or
other specified factors.
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Several VA offices are involved in the payment for community care
and collections from veterans and their insurers:
VHA's Office of Integrated Veteran Care coordinates
veterans' access to community care services by developing and
overseeing contracts for veterans' healthcare services and payments to
TPAs.
VHA's Revenue Operations Division (within the Office of
Finance) bills and collects from veterans and private insurers for
copayment and coinsurance obligations through a centralized process
that requires data from the Program Integrity Tool. Staff from VHA's
Consolidated Patient Account Centers perform the billing and revenue
collection operations for non-service-connected treatment using data
from the tool.
VHA's Office of Integrity and Compliance is the business
owner of the Program Integrity Tool and uses its data for the
prevention, detection, and mitigation of fraud, waste, and abuse.
VA's Office of Information and Technology is responsible
for developing, approving, and implementing system security baseline
configurations for all VA data platforms and systems. Its staff oversee
all data integrity issues and updates to the Program Integrity Tool,
including a product manager that oversees the tool's day-to-day
operations.
Those offices' data, which relate to community care claims,
referrals, and the family member program, flow into the Program
Integrity Tool from six different source systems:
Community care claims processing engages three payment systems:
1. The Plexis Claims Manager for older community care program
claims
2. The Community Care Reimbursement System for more recent
community care network claims
3. The Electronic Claims Adjudication Management System for
direct veteran care agreement claims
Referrals use a single system:
4. The VHA HealthShare Referral Manager moves data for
community care referrals into the Program Integrity Tool.\4\
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\4\ VA uses the HealthShare Referral Manager to generate referrals
and forward authorizations to community providers.
Veteran Family Member Programs' paid claims data flow to the tool
---------------------------------------------------------------------------
from two systems:
5. The Customer Experience Manager
6. Claims Processing and Eligibility, a legacy system that
processes older claims
The Program Integrity Tool then feeds all these data to VA's
Corporate Data Warehouse, from which VHA's Revenue Operations Division
can access the data to use for veteran and private insurer billing. The
tool also provides information for the Office of Integrity and
Compliance's oversight efforts.
PROGRAM INTEGRITY TOOL DEFECTS
The Program Integrity Tool went offline on February 21, 2023, to
address identified issues, including (1) claims being entered
inaccurately, (2) a defective code that added outpatient data to
inpatient claims, and (3) duplicate claims. VHA had detected some of
these issues as early as January 2022.\5\
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\5\ The former VHA Office of Community Care's Division of Program
Integrity was responsible for the Program Integrity Tool in January
2022 and discovered the problems. This responsibility was transferred
to the Office of Integrity and Compliance in November 2022, following
the establishment of VHA's Office of Integrated Veteran Care, and then
moved permanently to VHA's Office of Integrity and Compliance in March
2023.
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Officials from VHA's Office of Integrity and Compliance
collaborated with the Office of Information and Technology to assess
problems, resolve them, and develop system improvements. During the
pause, the Program Integrity Tool could not be used for billing
veterans and private insurers or to assist in the prevention,
detection, and mitigation of fraud, waste, and abuse.
In addition, in November 2023, the Office of Information and
Technology completed a review of the Program Integrity Tool and
identified 18 defects in total, including eight high-priority issues
and one critical issue with the Veteran Family Member Programs' claims
data overwriting other claims data. For example, multiple claims were
assigned the same claim identifier when each claim should have had a
unique identifier. At that time, VHA reported it had begun upgrading
the tool's servers, corrected the defective line of code associated
with inpatient claims, and identified solutions for duplicate claims.
In July 2024, the OIG issued the management advisory memorandum
that highlighted the major impacts of the tool's pause on VHA's revenue
collection processes and oversight of community care claims.
Also in July 2024, VHA officials told the OIG that they had brought
the Program Integrity Tool back online on a limited basis for only
revenue collection operations for community care claims.
The OIG had reported in 2022 on VHA's challenges billing private
insurers for community care.\6\ Because a fully functioning Program
Integrity Tool was necessary for VHA to satisfy the intent of the open
recommendations from that report, the OIG paused its regular quarterly
follow up (conducted on all recommendations from its oversight reports)
while the tool was offline. In late 2024, OIG staff resumed follow up
on these open recommendations and VHA has been providing status updates
on their efforts to ensure the Program Integrity Tool is fully
operational. Recommendations 2 and 3 are still open that relate to (2)
strengthening system controls to ensure complete and accurate claims
information is transferred between applicable tools, systems, and
patient files and (3) assessing whether there is sufficient staffing to
process the anticipated volume of claims to be billed to veterans'
private health insurers and make needed adjustments. The impacts of the
pause and unresolved issues have been significant, as detailed in the
following sections.
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\6\ VA OIG, VHA Continues to Face Challenges with Billing Private
Insurers for Community Care, May 24, 2022.
The Pause Precluded Revenue Operations from Timely Billing for
---------------------------------------------------------------------------
Community Care
Because VHA Revenue Operations use the tool's information to bill
veterans and private insurers for copayments for community care, they
had not been billed between February 2023 and July 2024, when VA
resumed some functionality. During the period of the OIG's review, the
Program Integrity Tool pause affected VHA's ability to collect
potential revenue from veterans and private insurers for approximately
40 million community care network and veteran care agreement program
claims that VHA paid to care providers.\7\
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\7\ The OIG review of paid community care claim data from VA's
Corporate Data Warehouse was conducted from February 1 2023, through
January 31, 2024, for veteran care agreements, and from February 2,
2023, through February 1, 2024, for community care network claims.
Additional community care claims would have been paid between March and
July 2024 and are not included in the estimate. It is important to note
that the actual payment of claims to providers has not been affected by
the pause because, as mentioned earlier, the Program Integrity Tool
receives claims following care provider payments. It does affect VA's
revenue collection.
---------------------------------------------------------------------------
As the Program Integrity Tool returns to full functionality,
Revenue Operations will have to resolve the backlog of paid claims to
identify and bill veterans for copayments. VHA has acknowledged this
may negatively affect veterans because they could receive copayment
bills that are over a year old. Revenue Operations leaders told the OIG
that they are working with VHA and the VA Office of General Counsel to
implement a regulatory change allowing VA to apply for debt waivers on
behalf of veterans when debts are accrued due to the fault of the
agency. If approved, this regulatory change would help VA to avoid
unnecessarily burdening veterans with substantial debts that accrued
due to a faulty VA tool.
The OIG applied VHA's established collection-to-billing ratio for
medical care collections to estimate the proportion of claims that
would have been billable to insurance. This ratio approximates the
average amount VHA will collect for each dollar billed to private
insurers. The OIG estimated that the Program Integrity Tool's pause has
resulted in approximately $665.5 million in Revenue Operations
collections that had not been recovered from February 1, 2023, through
February 1, 2024. Since VHA has resumed using the tool, Revenue
Operations must handle these older claims in addition to working on the
new claims they will receive. Many of these delayed claims may exceed
the deadlines for insurance companies to be required to reimburse VHA,
further limiting VA's ability to make up the lost revenue.
The Pause Hindered the Prevention, Detection, and Mitigation of Fraud,
Waste, and Abuse
According to VHA Office of Integrity and Compliance officials,
their oversight efforts for community care programs and for Veteran
Family Member Programs' claims have been impeded by the Program
Integrity Tool's pause. As for detecting healthcare provider fraud,
waste, and abuse, the pause resulted in a halt to generating real-time
views of behavioral indicators and patterns or to running data and
reports to support investigations, research, and remediation. Although
the Office of Integrity and Compliance said it had access to an
archived version of the tool containing data before February 2023, VHA
staff do not recommend using it due to errors related to the incorrect
sequencing of data. Thus, VHA has been limited in its ability to
support the investigation of ongoing fraud allegations and referrals.
This means the Office of Integrity and Compliance will have a backlog
of data to review for fraud, waste, and abuse detection, OIG referral,
and mitigation efforts when the tool resumes operations that support
oversight. The OIG understands VHA is still taking steps to bring the
oversight functions back online or to replace the tool.
OTHER OIG OVERSIGHT OF VA SYSTEMS AND MODERNIZATION EFFORTS
Issues with the Program Integrity Tool are symptomatic of the
larger concern with VA's continued challenges with implementing complex
modernization efforts. As our report on VA's major management
challenges has stated, VA is undertaking massive efforts to upgrade or
replace systems that are estimated to cost tens of billions of dollars
and are interdependent--making implementation both costly and complex.
The OIG encourages innovation and recommends enhancements to VA's
infrastructure and systems through practical findings and
recommendations. VA relies on countless systems to meet the needs of
patients safely and promptly, to provide benefits and services to
eligible recipients, and to support the strong stewardship of taxpayer
dollars. Information system failures have contributed to breakdowns in
a number of critical VA functions, including the new electronic health
record system, financial reporting, disability benefit claims
processing, and supply chain management, as well as appointment
management, community care prescription requests, and personnel
suitability adjudications. The OIG has identified extensive breakdowns
with upgrading or replacing these key systems and failures in strong
stewardship of taxpayer dollars.\8\
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\8\ The following is a sample of the many recent VA OIG reports on
VA systems and modernization efforts: VA OIG, VBA's Special Monthly
Compensation Calculator in the Veterans Benefits Management System for
Rating Did Not Always Produce Accurate Results, May 29, 2025; VA OIG,
Community Care Network Outpatient Claim Payments Mostly Followed
Contract Rates and Timelines, but VA Overpaid for Dental Services,
February 20, 2025; VA OIG, Improved Oversight Is Needed to Correct
VISN-Identified Deficiencies in Medical Facilities' Supply Chain
Management, September 12, 2024; VA OIG, Lessons Learned for Improving
the Integrated Financial and Acquisition Management System's
Acquisition Module Deployment, July 10, 2024; VA OIG, Ineffective Use
and Oversight of Medical/Surgical Prime Vendor Program Led to Increased
Spending, June 11, 2024; VA OIG, Improvements Needed for VBA's Claims
Automation Project, September 25, 2023; VA OIG, Additional Actions
Needed to Fully Implement and Assess the Impact of the Patient Referral
Coordination Initiative, October 27, 2022.
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VA's process deficiencies have typically included inadequate
planning and requirements development, insufficient stakeholder
engagement, failures to promptly fix known issues, and program
management or coordination lapses. The results have been long delays,
cost overruns, low user acceptance, and gaps in functionalities that
make it more difficult for VA personnel to do their jobs. The OIG
understands the complexity of these efforts and acknowledges the great
lengths staff go to every day to develop work-arounds as needed. Below
are a few examples of the OIG's oversight of VA modernization efforts.
The OIG has continued its work on the Electronic Health Record
Modernization (EHRM) program. The EHRM is probably the largest contract
in VA history and critical to continued patient safety and care. Since
April 2020, the OIG has released 22 oversight publications on VA's
rollout of its electronic health record system that identified critical
missteps and lack of remediation.\9\ In several reports, the OIG
highlighted a variety of barriers to implementation, including patient
harm and safety concerns; pharmacy and medication management issues;
inadequate cost estimates; an unreliable implementation schedule;
difficulties with the patient appointment scheduling system; and
reporting, training, and decision-making deficiencies. OIG reports also
stressed the need for VA to make certain that the system is stable and
can handle future growth without the kind of outages and service
degradations previously experienced. OIG teams will also continue to
monitor system improvements in areas such as supply chain management
and appointment scheduling, with a keen focus on patient care and
safety, VA staff's ability to efficiently do their jobs, and making the
most effective use of taxpayer dollars.
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\9\ All other OIG reports may be found on the website at All
Reports.
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Furthermore, the OIG has issued numerous reports in recent years
that have identified deficiencies with inventory management of supplies
and equipment, in part due to VA's continued reliance on various
outdated systems. VA still uses more than 60 disparate systems to
manage its supply chains, which include billions of dollars in medical
supplies and equipment inventory. VA's medical facilities have long
experienced barriers to accurately tracking inventory, purchasing,
distribution, storage, and other supply chain functions, leading to
operational breakdowns and the need for workarounds that sometimes lack
compliance with VA policies and procedures. Recent attempts to
modernize its antiquated system have been unsuccessful as VA continues
to try to address these longstanding supply chain concerns.
CONCLUSION
The OIG routinely scrutinizes the effectiveness of the leadership
and quality management of VA operations that makes the most efficient
use of taxpayer dollars. In a department the size of VA, with the
Nation's largest integrated public healthcare system, an aging
infrastructure, and massive IT initiatives, the OIG must remain
vigilant to all risks to veterans, their families, and survivors. This
requires the use of sophisticated data analytics and modeling; being
responsive to hotline contacts and other allegations of misconduct; and
rigorous and continuous independent oversight. OIG staff monitor
programs and operations for breakdowns in processes; noncompliance with
mandates; failures to provide quality health care; and deficiencies in
the delivery of benefits and services. In addition, the OIG advances
accountability by conducting an expansive range of administrative and
criminal investigations that include fraud, waste, and abuse of
authority.
OIG oversight has spotlighted VA's IT system modernization efforts
that have had persistent issues, typically including weaknesses in
planning, failures to promptly fix known issues, and program management
or coordination deficiencies. The problems identified with the Program
Integrity Tool are a perfect example of this. While the tool was
offline, VHA had limited ability to collect hundreds of millions of
dollars of revenue from veterans' copayments or from private health
insurers. VHA staff must grapple with a backlog of tens of millions of
these community care claims that must be processed. Additionally, the
Program Integrity Tool is still not being fully utilized for the
prevention, detection, and mitigation of fraud, waste, and abuse for
community care claims paid.
VHA will need to ensure that Revenue Operations has sufficient
resources and processes to timely bill the backlog of community care
claims now that the revenue operations to bill veterans and private
insurers have been said to be resumed. It is also vital that the Office
of Integrity and Compliance be ensured resources to perform timely
fraud, waste, and abuse examinations of the backlog of community
claims, to ensure the most efficient use of taxpayer dollars.
Madam Chair, this concludes my statement. I would be happy to
answer any questions you or members of the subcommittee may have.
Prepared Statement of Cole Lyle
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Prepared Statement of Cody Carbone
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Prepared Statement of Edward O'Bryan
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Statements for the Record
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Prepared Statement of Ken Calvert
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Prepared Statement of Scott Franklin
I'm honored to again introduce legislation to hold bad actors at
the Department of Veterans Affairs accountable for misconduct,
including sexual harassment. My bill, H.R. 3185, the Personnel
Integrity in Veterans Affairs Act, would prohibit VA employees from
evading accountability by simply resigning, retiring or transferring to
avoid an investigation.
As a 26-year Navy veteran, former member of this Committee and
current member of the House Appropriations Subcommittee on Military
Construction and Veterans Affairs, I understand the importance of a
strong and effective VA. That strength depends on holding every
employee to the highest standards. Unfortunately, reports dating back a
decade, along with recent whistleblower complaints, have exposed
persistent issues with accountability and transparency within the
Department.
In 2016, this Committee found that 96 percent of reviewed VA
settlements failed to include proposed disciplinary actions in an
employee's permanent record. More recently, in 2023, a whistleblower
testified that senior VA leaders engaged in misconduct--including
sexual harassment--without facing accountability.
This is deeply troubling and undermines the integrity of the
Department. A change in culture is long overdue. My bill is needed to
ensure investigations are completed, even if an employee departs before
the process is complete. It also requires a permanent record of such
investigations be included in the employee's official personnel file.
Misconduct has no place in the Federal Government, especially not
within the Department of Veterans Affairs. Our veterans deserve a VA
that enforces accountability at every level. There must be no loophole
that allows individuals to avoid consequences.
This Committee passed the bill by voice vote last year. I again ask
you to support this important measure to strengthen the VA. I was
pleased to receive technical support from the VA on this bill, as they
welcome the opportunity to strengthen their employee process as well. I
thank the Committee for holding this hearing and look forward to
working together to ensure the Department of Veterans Affairs serves
our veterans with the excellence and accountability they deserve.
Prepared Statement of Concerned Veterans for America
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