[Congressional Record Volume 148, Number 72 (Wednesday, June 5, 2002)]
[Senate]
[Pages S5048-S5049]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CORZINE (for himself and Mrs. Clinton):
  S. 2583. A bill to amend title 38, United States Code, to require the 
Secretary of Veterans Affairs in the management of health care services 
for veterans to place certain low-income veterans in a higher health-
care priority category; to the Committee on Veterans' Affairs.
  Mr. CORZINE. Mr. President, I rise today along with Senator Hillary 
Rodham Clinton to change the way the Veteran's Administration defines 
low-income veterans by taking into account variations in the cost of 
living in different parts of the country. The Corzine-Clinton 
legislation would make the Veteran's Equitable Resource Allocation just 
that: Equitable.
  More specifically, this bill would replace the national income 
threshold for consideration in Priority Group 5, currently $24,000 for 
all parts of the country, with regional thresholds defined by the 
Department of Housing and Urban Development. This simple but far-
reaching proposal would help low income veterans across the country 
afford quality health care and ensure that Veterans Integrated Service 
Networks or VISNs receive adequate funding to care for their distinct 
veterans populations.
  Our Nation's veterans have made great sacrifices in defense of 
American freedom and values, and we owe them a tremendous debt of 
gratitude. The United States Congress must ensure that all American 
veterans, veterans who have sweated in the trenches to defend liberty, 
have access to quality health care.
  In 1997, Congress implemented the Veterans Equitable Resource 
Allocation system, or VERA, to distribute medical care funding provided 
by the VA. The funding formula was established to better take into 
account the costs associated with various veteran populations. 
Unfortunately, the VERA formula that was created fails to take into 
account regional differences in the cost of living, a significant 
metric in determining veteran healthcare costs. This oversight in the 
VERA formula dangerously shortchanges veterans living in regions with 
high costs of living and elevated health expenses.
  To allocate money to the Veterans' Integrated Service Networks, 
VISNs, VERA divides veterans into seven priority groups. Veterans who 
have no service-connected disability and whose incomes fall below 
$24,000 are considered low income and placed in Priority Group 5, while 
veterans whose incomes exceed this national threshold and qualify for 
no other special priorities are placed in Priority Group 7c.
  Using a national threshold for determining eligibility as a low-
income veteran puts veterans living in high cost areas at a decided 
disadvantage. In New Jersey, HUD's fiscal year 2002 standards for 
classification as ``low-income'' exceed $24,000 per year in every 
single county. And some areas exceed the VA baseline by more than 50 
percent. Similarly, HUD's ``low-income'' classification for New York 
City is set at $35,150 and for Nassau and Suffolk Counties, at $40,150.
  As a result, regions that have a high cost of living, like VISN 3, 
which encompasses substantial portions of New Jersey and New York, tend 
to have a reduced population of Priority Group 5 veterans and an 
inflated population of Priority Group 7c veterans.
  The fundamental inequity of the VERA formula is apparent when you 
consider that VERA allocations do not take into account the number of 
veterans classified in Priority Group 7c. With the costs associated 
with veterans in Priority Group 7c not considered as part of the VERA 
allocation, and with high cost of living areas possessing inflated 
populations of Priority Group 7c vets, high cost regions must provide 
care to thousands of veterans without adequate funding.
  This additional financial burden on VISNs with large populations of 
veterans in Priority Group 7c has had a tremendous impact on VISN 3. 
Since FY 1996, VISN 3 has experienced a decline in revenue of 10 
percent. As a result of the tremendous shortfall in the VISN 3 budget, 
the VA cannot move forward with plans to open clinics in various 
locations, including prospective clinics in Monmouth and Passaic 
Counties. Consequently, veterans in VISN 3 are forced to wait for 
unreasonably long periods to receive medical care and travel long 
distances to existing clinics.
  Furthermore, miscategorizing which vets qualify as Priority Group 5 
unjustifiably reduces access to medical care for thousands of veterans. 
Under existing rules, veterans placed in Priority Group 7c must provide 
a copayment to receive medical care at a VA medical facility; Veterans 
placed in Priority Group 5 receive medical care free of charge. Under 
the existing framework, low-income vets in high cost areas are often 
inappropriately placed in Priority Group 7c, and are forced to provide 
a copayment.
  Recent studies by both the Rand Institute and the General Accounting 
Office identify this flaw in the VERA formula and recommend a 
geographic means test like the one provided in our legislation to 
improve the allocation of resources under VERA. Such a test would 
ensure that the VERA formula allocation better reflects the true costs 
of VA healthcare in the various VISNs in the United States.
  Our legislation would make a simple adjustment to the VERA formula to 
account for variations in the cost of living in different regions. The 
bill would help veterans in high cost areas afford VA health care and 
guarantee that VISNs across the country receive

[[Page S5049]]

adequate compensation for the care they provide.
  I hope my colleagues will join Senator Clinton and me in supporting 
this important bill, and I ask unanimous consent that the text of the 
legislation be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2583

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. DEPARTMENT OF VETERANS AFFAIRS HEALTH CARE 
                   PRIORITY FOR CERTAIN LOW-INCOME VETERANS BASED 
                   UPON REGIONAL INCOME THRESHOLDS.

       (a) Change in Priority Category.--Section 1705(a) of title 
     38, United States Code, is amended--
       (1) in paragraph (5)--
       (A) by inserting ``(A) who are'' after ``Veterans'';
       (B) by inserting ``and'' after ``through (4)''; and
       (C) by inserting before the period at the end the 
     following: ``, or (B) who are described in section 1710(a)(3) 
     of this title and are eligible for treatment as a low-income 
     family under section 3(b) of the United States Housing Act of 
     1937 (42 U.S.C. 1437a(b)) for the area in which such veterans 
     reside, regardless of whether such veterans are treated as 
     single person families under paragraph (3)(A) of such section 
     3(b) or as families under paragraph (3)(B) of such section 
     3(b)'';
       (2) by striking paragraph (7); and
       (3) by redesignating paragraph (8) as paragraph (7) and in 
     that paragraph by striking ``paragraph (7)'' and inserting 
     ``paragraph (5)(B)''.
       (b) Conforming Amendment.--Section 1710(f)(4) of such title 
     is amended by striking ``section 1705(a)(7)'' and inserting 
     ``section 1705(a)(5)(B)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on October 2, 2002.

  Mrs. CLINTON. Mr. President, I rise today, along with Senator 
Corzine, to introduce legislation to remedy the gross disparity in the 
distribution of Federal dollars to provide health care services to our 
nation's veterans around the country.
  The source of the gap is a formula that does not sufficiently take 
into account the needs of all facilities, effectively unfairly 
penalizing states in the Northeast and Midwest. And New York has lost 
tens of millions of dollars as a result. The bill we're introducing 
today would provide increased funding for networks in high-cost of 
living areas, like New York and New Jersey, and help low-income 
veterans afford quality health care.
  In 1997, to repair geographic inequities in the distribution of VA 
allocations, the Federal government put in place the Veterans Equitable 
Resource Allocation, VERA, system. As I noted in a letter I sent to VA 
Secretary Anthony Principi on this issue in March, the VERA formula was 
intended to better meet the needs of the large number of veterans who 
flocked to the South. As a General Accounting Office, GAO, report 
released in February 2002 makes clear, however, the 6-year-old formula 
has resulted in disparities and cutbacks in health services for 
veterans in the Northeast and Midwest. Veterans' hospitals in these 
regions lost a staggering $921 million.
  The VERA formula is flawed for a number of reasons. First, the 
formula, which is based on the number of veterans, does not take into 
account the differences in various patient health care needs within 
different networks. As the GAO report states, the formula ``excludes 
about one-fifth of VA's workload in determining each network's 
allocation.'' These are veterans who do not have service-related 
disabilities and whose incomes fall within a low-priority range, called 
``Priority 7''.
  Although this group is considered a low-priority, these individuals 
represent a growing percentage of the veteran population who seek care 
at VA facilities. From fiscal year 1996 through fiscal year 2001, the 
number of veterans with incomes within this range increased from 4 
percent to 22 percent of the total caseload. However, the formula has 
not been adjusted to reflect the dramatic increase in these ``Priority 
7'' cases, leaving many networks without the resources to meet the 
growing demand.
  Further, the formula does not accurately reflect the higher cost of 
medical care in the Northeast. Because VA hospitals in New York City, 
and Nassau and Suffolk counties are situated in a high cost of living 
area, they tend to have an inflated number of Priority Group 7 
veterans. VA health networks in high cost regions provide care to 
thousands of veterans without sufficient funding to do so. 
Additionally, taking into account the regional cost of living would 
relieve many Priority 7 veterans of the burden of making a copayment.
  Finally, the number of veterans treated nationally over the last 
several years rose 47 percent, with all VA networks contributing to 
that increase. As I noted to Secretary Principi, a rise in patient 
caseloads spread across the health network should dictate an equitable 
distribution of funding. The GAO's recommendations can be reduced to 
one simple goal: ``comparable resources for comparable workloads.'' Any 
delay in fixing this formula, the GAO stated, means that approximately 
$200 million in veterans' health funding annually would be allocated 
unjustly.
  One of my State's newspapers, the Poughkeepsie Journal, reported that 
Secretary Principi agreed with the GAO's assessment of the formula but 
wanted to conduct another study of hospital workloads and patient needs 
before taking action. I strongly believe sufficient time has already 
been devoted to studying this issue. I urge Secretary Principi to take 
specific actions now to carry out the recommendations outlined in the 
GAO's report.
  The courageous service and sacrifice of our Nation's veterans in 
defense of our nation and our democratic values should never be 
forgotten. Fulfilling our promise to provide for their health care 
needs is an important part of the enduring bond that we share. I urge 
my colleagues to support our legislation to remedy this unfair formula 
so that all of our nation's veterans have access to the health services 
they deserve.
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