[House Report 111-171]
[From the U.S. Government Publishing Office]


111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    111-171

======================================================================



 
    VETERANS HEALTH CARE BUDGET REFORM AND TRANSPARENCY ACT OF 2009

                                _______
                                

 June 19, 2009.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Filner, from the Committee on Veterans' Affairs, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 1016]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Veterans' Affairs, to whom was referred the 
bill (H.R. 1016) to amend title 38, United States Code, to 
provide advance appropriations authority for certain medical 
care accounts of the Department of Veterans Affairs, and for 
other purposes, having considered the same, report favorably 
thereon with amendments and recommend that the bill as amended 
do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................     3
Background and Need for Legislation..............................     4
Hearings.........................................................     9
Committee Consideration..........................................     9
Committee Votes..................................................    10
Committee Oversight Findings.....................................    14
Statement of General Performance Goals and Objectives............    14
New Budget Authority, Entitlement Authority, and Tax Expenditures    14
Earmarks and Tax and Tariff Benefits.............................    14
Committee Cost Estimate..........................................    14
Congressional Budget Office Cost Estimate........................    14
Federal Mandates Statement.......................................    16
Advisory Committee Statement.....................................    16
Constitutional Authority Statement...............................    16
Applicability to Legislative Branch..............................    16
Section-by-Section Analysis of the Legislation...................    16
Changes in Existing Law Made by the Bill as Reported.............    17
Additional Views.................................................    20

                               Amendment

  The amendments are as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Veterans Health Care Budget Reform and 
Transparency Act of 2009''.

SEC. 2. SENSE OF CONGRESS.

  It is the sense of Congress that the provision of health care 
services to veterans could be more effectively and efficiently planned 
and managed if funding was provided for the management and provision of 
such services in the form of advance appropriations.

SEC. 3. PRESIDENTS' BUDGET SUBMISSIONS.

  Section 1105(a) of title 31, United States Code, is amended by adding 
at the end the following new paragraph:
          ``(36) information on estimates of appropriations for the 
        fiscal year following the fiscal year for which the budget is 
        submitted for the following accounts of the Department of 
        Veterans Affairs:
                  ``(A) Medical Services.
                  ``(B) Medical Support and Compliance.
                  ``(C) Medical Facilities.
                  ``(D) Information Technology Systems.
                  ``(E) Medical and Prosthetic Research.''.

SEC. 4. ADVANCE APPROPRIATIONS FOR CERTAIN ACCOUNTS OF THE DEPARTMENT 
                    OF VETERANS AFFAIRS.

  (a) Advance Appropriations for Certain Accounts.--
          (1) In general.--Chapter 1 of title 38, United States Code, 
        is amended by inserting after section 116 the following new 
        section:

``Sec. 117. Advance appropriations for certain accounts

  ``(a) In General.--For each fiscal year, beginning with fiscal year 
2011, discretionary new budget authority provided in an appropriations 
Act for the appropriations accounts of the Department specified in 
subsection (c) shall--
          ``(1) be made available for that fiscal year; and
          ``(2) include, for each such appropriations account, advance 
        discretionary new budget authority that first becomes available 
        for the first fiscal year after the budget year.
  ``(b) Estimates Required.--The Secretary shall include in documents 
submitted to Congress in support of the President's budget submitted 
pursuant to section 1105 of title 31, United States Code, detailed 
estimates of the funds necessary for the accounts of the Department 
specified in subsection (c) or the fiscal year following the fiscal 
year for which the budget is submitted.
  ``(c) Accounts Specified.--The accounts specified in this subsection 
are the following accounts of the Department of Veterans Affairs:
          ``(1) Medical Services.
          ``(2) Medical Support and Compliance.
          ``(3) Medical Facilities.
          ``(4) Information Technology Systems.
          ``(5) Medical and Prosthetic Research.
  ``(d) Annual Report.--Not later than July 31 of each year, the 
Secretary shall submit to Congress an annual report on the sufficiency 
of the Department's resources for the next fiscal year beginning after 
the date of the submittal of the report for the provision of medical 
care. Such report shall also include estimates of the workload and 
demand data for that fiscal year.''.
          (2) Clerical amendment.--The table of sections at the 
        beginning of such chapter is amended by inserting after the 
        item relating to section 113 the following new line:

``117. Advance appropriations for certain accounts.''.

SEC. 5. COMPTROLLER GENERAL STUDY ON ADEQUACY AND ACCURACY OF BASELINE 
                    MODEL PROJECTIONS OF THE DEPARTMENT OF VETERANS 
                    AFFAIRS FOR HEALTH CARE EXPENDITURES.

  (a) Study of Adequacy and Accuracy of Base Line Model Projections.--
The Comptroller General shall conduct a study of the adequacy and 
accuracy of the budget projections made by the Enrollee Health Care 
Projection Model (in this section referred to as the ``Model''), its 
equivalent, or other methodologies utilized for the purpose of 
estimating and projecting health care expenditures of the Department of 
Veterans Affairs with respect to the fiscal year involved and the 
subsequent four fiscal years.
  (b) Reports.--
          (1) In general.--Not later than the date of each year in 
        2011, 2012, and 2013, on which the President submits the budget 
        request for the next fiscal year under section 1105 of title 
        31, United States Code, the Comptroller General shall submit to 
        the appropriate committees of Congress and to the Secretary of 
        Veterans Affairs a report.
          (2) Elements.--Each report under this paragraph shall 
        include, for the fiscal year concerning the year for which the 
        budget is submitted, the following:
                  (A) A statement whether the amount requested in the 
                budget of the President for expenditures of the 
                Department for health care in such fiscal year is 
                consistent with anticipated expenditures of the 
                Department for health care in such fiscal year as 
                determined utilizing the Model.
                  (B) The basis for such statement.
                  (C) Such additional information as the Comptroller 
                General determines appropriate.
          (3) Availability to the public.--Each report submitted under 
        this subsection shall be made available to the public by the 
        Comptroller General.
          (4) Appropriate committees of congress defined.--In this 
        subsection, the term ``appropriate committees of Congress'' 
        means--
                  (A) the Committees on Veterans' Affairs, 
                Appropriations, and the Budget of the Senate; and
                  (B) the Committees on Veterans' Affairs, 
                Appropriations, and the Budget of the House of 
                Representatives.

SEC. 6. REPORT TO CONGRESS.

  Not later than 90 days after the date of the enactment of this Act, 
the Secretary of Veterans Affairs, shall submit to the Committees on 
Veterans' Affairs, Appropriations, and the Budget of the Senate and 
House of Representatives a report on the requirements of this Act and 
the amendments made by this Act. Such report shall include--
          (1) the Secretary's plans for improving the capability of the 
        Department of Veterans Affairs to better and more accurately 
        estimate future health care costs and demands; and
          (2) a description of impediments, statutory or otherwise, to 
        providing future year estimates and advance appropriations for 
        the Medical Services, Medical Support and Compliance, Medical 
        Facilities, Information Technology Systems, and Medical and 
        Prosthetic Research accounts of the Department.

  Amend the title so as to read:

    A bill to amend title 38, United States Code, to provide 
advance appropriations authority for certain accounts of the 
Department of Veterans Affairs, and for other purposes.

                          Purpose and Summary

    H.R. 1016 was introduced on February 12, 2009, by 
Representative Bob Filner of California, Chairman of the 
Committee on Veterans' Affairs. This legislation would provide 
advance appropriations authority for certain Department of 
Veterans Affairs (VA) accounts. H.R. 1016, as amended, would 
require the Administration and the VA to provide budget 
estimates in support of advance appropriations. H.R. 1016 would 
require the Government Accountability Office to study the 
adequacy and accuracy of the VA's health care projection model 
and would require the VA to provide an initial report to 
Congress regarding any impediments to providing future year 
estimates and the VA's plans to improve its capability to 
better and more accurately estimate future health care costs 
and demands as well as an annual report to Congress regarding 
the sufficiency of resources in the upcoming fiscal year for 
the provision of health care services for veterans.

                  Background and Need for Legislation

    The VA, through the Veterans Health Administration (VHA), 
operates the largest integrated direct health care system in 
the nation.\1\ The VA health care system is also the largest 
Federal health care program funded through discretionary 
spending.\2\ The President requested, for FY 2010, $44.5 
billion in appropriations for VA medical care. For comparison 
purposes, the Administration requested $3.6 billion for the 
Indian Health Service which is also a discretionary program. 
The largest Federal health care program, Medicare, which is 
funded with mandatory spending, was provided $450 billion in 
budget authority in the FY 2010 budget resolution. For FY 2010, 
the Administration requested a total VA budget of $109 billion 
comprised of $53 billion in discretionary funding and $56 
billion in mandatory funding.
---------------------------------------------------------------------------
    \1\CRS Report ``Veterans' Medical Care: FY 2009 Appropriations'' 
October 24, 2008, RL34598.
    \2\Federal spending is generally characterized as discretionary or 
mandatory. According to the CRS ``[d]iscretionary spending is 
controlled through the appropriations process. Appropriations 
legislation is considered each fiscal year and provides funding for 
numerous programs such as national defense, education, and homeland 
security. Direct spending, alternately, is provided for in legislation 
outside of appropriations acts. Direct spending programs are typically 
established in permanent law and continue in effect until such time as 
revised or terminated by another law.'' CRS Report ``The Budget 
Resolution and Spending Legislation'' June 9, 2009, R40472.
---------------------------------------------------------------------------
    The Congressional Research Service (CRS) describes the 
appropriations process generally:
          An appropriations act is a law passed by Congress 
        that provides federal agencies legal authority to incur 
        obligations and the Treasury Department authority to 
        make payments for designated purposes. The power of 
        appropriation derives from the Constitution, which in 
        Article I, Section 9, provides that ``[n]o money shall 
        be drawn from the Treasury but in consequence of 
        appropriations made by law.'' The power to appropriate 
        is exclusively a legislative power; it functions as a 
        limitation on the executive branch. An agency may not 
        spend more than the amount appropriated to it, and it 
        may use available funds only for the purposes and 
        according to the conditions provided by Congress.
          The Constitution does not require annual 
        appropriations, but since the First Congress the 
        practice has been to make appropriations for a single 
        fiscal year. Appropriations must be used (obligated) in 
        the fiscal year for which they are provided, unless the 
        law provides that they shall be available for a longer 
        period of time. All provisions in an appropriations 
        act, such as limitations on the use of funds, expire at 
        the end of the fiscal year, unless the language of the 
        act extends their period of effectiveness.\3\
---------------------------------------------------------------------------
    \3\CRS Report ``Introduction to the Federal Budget Process'' 
November 20, 2008, 98-721.
---------------------------------------------------------------------------
    Currently, VA medical care funding is provided through 
three appropriations accounts in annual appropriations 
measures: Medical Services, Medical Support and Compliance 
(formerly the Medical Administration account), and Medical 
Facilities. Prior to Public Law 108-199 (118 Stat. 3), the 
Consolidated Appropriations Act of 2004, medical care was 
funded through a Medical Care account.\4\ The VHA is funded 
through these three accounts and the Medical and Prosthetic 
Research account. In addition, the Information Technology 
Systems account provides funding for VHA information technology 
systems.
---------------------------------------------------------------------------
    \4\The Conference Report accompanying H.R. 2673 (H.Rept. 108-401) 
stated that ``the conferees have agreed to fund VHA through a new 
account structure comprised of four accounts: medical services, medical 
administration, medical facilities, and medical and prosthetic 
research.''
---------------------------------------------------------------------------
    The VA budget has been in place at the start of the fiscal 
year only four times in the last 20 years (fiscal years 1989, 
1995, 1997, and 2009).\5\ Veterans' groups have grown 
increasingly alarmed over the years at the impact this delay 
may be having upon the provision of health care for veterans 
and the ability of the VA to properly plan and manage its 
resources. The FY 2010 Independent Budget stated that:
---------------------------------------------------------------------------
    \5\CRS Report ``Advance Appropriations for Veterans'' Health Care: 
Issues and Options for Congress'' April 28, 2008, R40489
---------------------------------------------------------------------------
          Although significant strides have been made to 
        increase the level of VA health-care funding during the 
        past several years, the inability of Congress and the 
        Administration to agree upon and enact veterans' 
        health-care appropriations legislation on time 
        continues to hamper and threaten VA health care. When 
        VA does not receive its funding in a timely manner, it 
        is forced to ration health care. Much-needed medical 
        staff cannot be hired, medical equipment cannot be 
        procured, waiting times for veterans increase, and the 
        quality of care suffers.
          Only through a comprehensive reform of the budget and 
        appropriations process, such as advance appropriations, 
        will Congress be able to ensure the long-term viability 
        and quality of VA's health-care system.\6\
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    \6\The Independent Budget for the Department of Veterans Affairs 
for Fiscal Year 2010 (annual budget request co-authored by AMVETS, 
Disabled American Veterans, Paralyzed Veterans of America, and Veterans 
of Foreign Wars), at 43.
---------------------------------------------------------------------------
    In a statement submitted for the record at the April 29, 
2009 hearing, a coalition of former VA officials wrote:
          We know well the challenge of managing the Nation's 
        largest integrated health care delivery system when, 
        year after year, we did not know what level of funding 
        we would receive or when it would arrive. Having been 
        granted the privilege of serving on the front lines of 
        health care for America's veterans has given us close-
        up perspective of the agonizing results of uncertain 
        budgets and continuing resolutions and the anxieties 
        they inflict upon the delivery of health care. Among 
        the recurring problems: drug and medical equipment 
        purchases are stalled; hiring of health care 
        professionals and other staff are delayed or deferred; 
        repairs and replacement work to fix and modernize 
        facilities are put on hold; and veterans medical 
        appointments are pushed back.
          [.]
          We urge the Committee and Congress to use your 
        authority to adopt this simple budgeting tool to help 
        ensure that VA has the resources to continue meeting 
        the health care needs of veterans. We urge you to pass, 
        and the President to sign, legislation to provide 
        advance appropriations for veterans' health care.\7\
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    \7\Statement of Coalition of Former VA Officials (comprised of the 
following former VA officials: Anthony J. Principi, Secretary (2001-
2004); Hershel W. Gober, Deputy Secretary (1993-2001); Gordon H. 
Mansfield, Deputy Secretary (2005-2008); Kenneth Kizer, MD, MPH, Under 
Secretary for Health (1994-1999); Thomas L. Garthwaite, MD, Under 
Secretary for Health (1999-2002); Robert H. Roswell, MD, Under 
Secretary for Health (2002-2004); Jonathan B. Perlin, MD, PHD, Under 
Secretary for Health (2004-2006); Frances M. Murphy, MD, MPH, Deputy 
Under Secretary for Health; Laura J. Miller, MPA, MPH, Deputy Under 
Secretary for Health; C. Wayne Hawkins, Deputy Under Secretary for 
Health; J. Arthur Klein, Director of Budget and Forecasting Service, 
VHA; Kenneth J. Clark, VISN 22 Director (CA, NV); Larry Deal, VISN 7 
Director (AL, GA, SC); James J. Farsetta, FACHE, VISN 3 Director (NJ, 
NYC); Dennis M. Lewis, FACHE, VISN 20 Director (WA, OR, ID, AK); Robert 
E. Lynch, MD, VISN 16 Director (AR, LA, MS, OK); Fred Malphurs, VISN 2 
Director (NY); James J. Nocks, MD, MSHA, VISN 5 Director (DC, MD, WV); 
Clyde Parkis, FACHE, VISN 10 Director (OH); James W. Dudley, VA Medical 
Center Director, Richmond, VA; John R. Fears, VA Medical Center 
Director, Phoenix, AZ; Joseph M. Manley, VA Medical Center Director, 
Spokane, WA; Robert A. Perreault, VA Medical Center Director, 
Charleston, SC; Wayne C. Tippets, MHA, VA Medical Center Director, 
Boise, ID; and Timothy B. Williams, VA Medical Center Director, 
Seattle, WA).
---------------------------------------------------------------------------
    In order to advocate for changing the manner in which the 
VA health care budget is provided, nine veterans' groups formed 
The Partnership for Veterans Health Care Budget Reform. These 
nine groups include The American Legion, AMVETS, Blinded 
Veterans Association, Disabled American Veterans, Jewish War 
Veterans, Military Order of the Purple Heart, Paralyzed 
Veterans of America, Veterans of Foreign Wars, and Vietnam 
Veterans of America. According to the Partnership's website,\8\ 
these groups ``have all urged Congress for more than a decade 
to reform the system of funding VA health care so that it is 
sufficient, timely and predictable. This reform is necessary to 
ensuring that today's and tomorrow's veterans always have 
access to the quality medical care they need, have earned, and 
deserve.'' The Partnership's stated goal is to ensure that VA 
medical care is provided with ``sufficient, timely, and 
predictable funding.''\9\
---------------------------------------------------------------------------
    \8\http://fundingforvets.org/about.html
    \9\Testimony of Carl Blake, National Legislative Director, 
Paralyzed Veterans of America, April 29, 2009. Blake stated: ``The 
Veterans Health Care Budget Reform and Transparency Act would ensure 
that the goals of the Partnership--sufficient, timely, and predictable 
funding--are met. Historically, advance appropriations have been used 
to make a program function more effectively, better align with funding 
cycles of program recipients, or provide insulation from annual 
partisan political maneuvering. By moving to advance appropriations, 
veterans' health care programs would accrue all three of these 
benefits.''
---------------------------------------------------------------------------
    Veterans' groups have argued that providing VA medical care 
funding through advance appropriations would better enable the 
VA to plan in that it would know what levels of funding are in 
place at the beginning of the fiscal year. The Congressional 
Research Service describes advance appropriations in the 
following manner:
          An advance appropriation means appropriation of new 
        budget authority that becomes available one or more 
        fiscal years beyond the fiscal year for which the 
        appropriations act was passed (that is beyond the 
        budget year). For example, if the following language 
        appeared in an appropriations act for FY2010, it would 
        provide an advance appropriation for FY2011: ``For 
        medical services, $30,854,000,000 to become available 
        on October 1, 2010 (the start of the FY2011).'' Under 
        the current scoring guidelines, new budget authority 
        for an advance appropriation is scored in the fiscal 
        year in which the funds become available for 
        obligation. In this example, you would record the 
        budget authority in FY2011. [Footnote omitted].\10\
---------------------------------------------------------------------------
    \10\CRS Report ``Advance Appropriations for Veterans' Health Care: 
Issues and Options for Congress'' April 28, 2008, R40489
---------------------------------------------------------------------------
    The VA forecasts health care demand and costs through its 
Enrollee Health Care Projection Model.
          The Enrollee Health Care Projection Model, or VA 
        Model, is a comprehensive enrollment, utilization, and 
        expenditure projection model. It was originally 
        developed in 1998 in partnership with Milliman, Inc., 
        the largest actuarial firm in the country. Through the 
        past 11 years of periodic updates and continuous 
        refinement, VA and Milliman have developed a strong 
        partnership that has resulted in a powerful modeling 
        tool. VA guides the overall development of the VA Model 
        and ensures that it meets the needs of stakeholders. VA 
        program staff provide expertise on the unique needs of 
        Veterans, patterns of practice in the VA health-care 
        system, and how the system is expected to evolve over 
        the next 20 years. Milliman brings specialized 
        expertise, access to extensive amounts of health-care 
        utilization data VA, and excellent research to the 
        overall modeling effort.\11\
---------------------------------------------------------------------------
    \11\Statement of the Honorable Eric K. Shinseki, Secretary, 
Department of Veterans Affairs, hearing on Funding the U.S. Department 
of Veterans Affairs of the Future, Committee on Veterans' Affairs, 
April 29, 2009.
---------------------------------------------------------------------------
    The RAND Corporation conducted a study on the VA's EHCPM 
and published a report entitled ``Review and Evaluation of the 
VA Enrollee Health Care Projection Model.''\12\ Katherine M. 
Harris, the study's director, testified at the April 29, 2009, 
hearing that:
---------------------------------------------------------------------------
    \12\RAND Center for Military Health Policy Research, 2008.
---------------------------------------------------------------------------
          The RAND evaluation found that the EHCPM supports 
        VA's short-term budget planning and monitoring in a 
        stable policy and practice environment. The model 
        identifies factors that drive specific types of 
        spending or spending for specific types of enrollees 
        and can adjust those factors as needed. Model results 
        can also help the VA to develop more informed 
        strategies for managing expenditures. In addition, the 
        current model allows the VA to monitor budget execution 
        and performance relative to pre-established benchmarks. 
        Assuming there are no short-term ``shocks'' to the 
        system, only the accuracy and timeliness of VA data 
        systems--not the model's structure--limit the EHCPM's 
        utility for short-term budget planning and monitoring.
          However, for longer-term strategic planning and 
        policy analysis, the model could yield misleading 
        results because the model structure does not account 
        for two things: key drivers of future demand for VA 
        care and the costs of delivering it. Using the model to 
        inform scenarios beyond the current policy and 
        budgetary environment requires information about a wide 
        range of factors, including the VA's future cost 
        structure, how rapidly the VA can expand its capacity 
        to meet demand, factors driving enrollment, and the 
        relationships among enrollee health status, VA 
        treatment capacity, and enrollees' preferences for 
        treatment in VA facilities versus other facilities. In 
        many cases, required information does not exist or was 
        not available to model developers. In the absence of 
        such information, model forecasts rely on a number of 
        unrealistic assumptions. Thus, substantial 
        modifications to model subcomponents and enhancements 
        of supporting data inputs would likely be required 
        before the EHCPM could effectively support longer-range 
        planning.
    Veterans' groups have also commented favorably on the VA 
model. Carl Blake, National Legislative Director of the 
Paralyzed Veterans of America, testifying on behalf of the 
Partnership stated that ``[t]he final results produced by the 
Model provide the most comprehensive, robust and accurate 
estimate of what it will cost VA in future years to provide 
current services authorized in law to the veterans expected to 
seek those services.''
    As introduced, H.R. 1016 included the three VA medical care 
accounts for advance appropriations. At the April 29, 2009, 
Committee hearing, CRS testified regarding a possible concern 
with limiting advance appropriations to these three accounts:
          Another issue that may arise would be how funding for 
        VHA information technology programs including its 
        electronic medical records system relate to funding the 
        rest of the VHA under an advance appropriation. 
        Beginning in 2005, VA consolidated all information 
        technology (IT) functions throughout the VA and brought 
        them under control of the VA Chief Information Officer 
        (CIO). As a result of this reorganization, VHA's health 
        IT budget was brought under central control. Currently, 
        all IT programs within the VA are funded under the 
        Information Technology account. Therefore, providing an 
        advance appropriation for some VHA accounts and funding 
        IT accounts under a regular appropriation act could 
        create a situation whereby, for example, VHA could not 
        purchase computer software although it has procured 
        medical equipment that needs software. Another example 
        would be the difficulty of procuring the IT 
        infrastructure to support the opening of a new 
        community-based outpatient clinic (CBOC).\13\
---------------------------------------------------------------------------
    \13\Statement of Sidath Viranga Panangala, Analyst in Veterans 
Policy, CRS, Library of Congress, hearing on Funding the U.S. 
Department of Veterans Affairs of the Future, Committee on Veterans' 
Affairs, April 29, 2009.
---------------------------------------------------------------------------
    To address this concern, an amendment was offered by 
Representative Steve Buyer of Indiana, the Ranking Member, and 
agreed to by the Committee to include the Information 
Technology Systems and the Medical and Prosthetic Research 
accounts.
    As amended, H.R. 1016 creates a framework to support the 
provision of advance appropriations by requiring the President 
to submit budget estimates; VA to provide Congress with details 
behind the estimates, and an annual report due no later than 
July 31 of each year that would enable the VA to inform 
Congress as to whether or not it has sufficient resources to 
provide the expected level of health care services for the 
fiscal year beginning 61 days later on October 1.
    The Committee believes the July report is an important 
component of the advance appropriations framework in that it 
can guard against the VA facing a budget shortfall, as it 
experienced in 2005. The date was chosen to fall after the 
Administration's Mid-Session Review while still providing 
Congress with a window within which to act to provide 
additional resources if needed.
    The Committee looks forward to receiving the initial report 
from the VA, due within 90 days of enactment, concerning the 
Secretary's plans to improve the capability of the VA to better 
and more accurately estimate future health care costs and 
demands and describing any impediments, statutory or otherwise, 
to providing future year estimates and advance appropriations. 
The Committee intends the VA to highlight any difficulties it 
faces, especially of a statutory nature, in meeting its 
requirements under H.R. 1016. The Committee has long taken an 
interest in the VA's health care forecasting activities and 
plans to work closely with the VA to better improve the 
Department's ability to forecast future health care demand and 
costs.

                                Hearings

    On April 29, 2009, the Committee on Veterans' Affairs held 
a hearing entitled ``Funding the U.S. Department of Veterans 
Affairs of the Future.'' The following witnesses testified: 
Joseph A. Violante, National Legislative Director, Disabled 
American Veterans, on behalf of the Partnership for Veterans 
Health Care Budget Reform; Steve Robertson, Director, National 
Legislative Commission, The American Legion, on behalf of the 
Partnership for Veterans Health Care Budget Reform; Carl Blake, 
National Legislative Director, Paralyzed Veterans of America, 
on behalf of the Partnership for Veterans Health Care Budget 
Reform; Katherine M. Harris, Ph.D., Study Director, Review and 
Evaluation of the VA Enrollee Projection Model, RAND 
Corporation; Sidath Viranga Panangala, Analyst in Veterans 
Policy, Congressional Research Service, Library of Congress; 
Jessica Banthin, Ph.D., Director of Modeling and Simulation, 
Center for Financing, Access and Cost Trends, Agency for 
Healthcare Research and Quality, U.S. Department of Health and 
Human Services; Randall B. Williamson, Director, Health Care, 
U.S. Government Accountability Office, accompanied by Susan J. 
Irving, Director, Federal Budget Analysis, Strategic Issues, 
U.S. Government Accountability Office; and, The Honorable Eric 
K. Shinseki, Secretary, U.S. Department of Veterans Affairs, 
accompanied by Patricia Vandenberg MHA, BSN, Assistant Deputy 
Under Secretary for Health for Policy and Planning, Veterans 
Health Administration, U.S. Department of Veterans Affairs. 
Submitted for the record was a statement made in support of 
advance appropriations by a Coalition of Former VA Officials.

                        Committee Consideration

    On June 10, 2009, the full Committee met in an open markup 
session, a quorum being present, and ordered H.R. 1016, as 
amended, reported favorably to the House of Representatives by 
voice vote. During consideration of the bill, the following 
amendments were considered:
    An amendment offered by Mr. Buyer of Indiana adding the 
Information Technology Systems and Medical and Prosthetic 
Research accounts was agreed to by a record vote.
    A substitute amendment to the amendment in the nature of a 
substitute offered by Mr. Buyer of Indiana that would create an 
Advanced Quarter Appropriations Fund of $15 billion was not 
agreed to by voice vote.
    An amendment offered by Mr. Buyer of Indiana requiring an 
additional report on implementation was withdrawn.
    An amendment in the nature of a substitute offered by Mr. 
Filner of California was agreed to by voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report the legislation and amendments thereto. 
A substitute amendment to the amendment in the nature of a 
substitute offered by Mr. Buyer of Indiana that would create an 
Advanced Quarter Appropriations Fund of $15 billion was not 
agreed to by voice vote. An amendment in the nature of a 
substitute offered by Mr. Filner of California was agreed to by 
voice vote.
    An amendment by Mr. Buyer of Indiana adding the Information 
Technology Systems and Medical and Prosthetic Research accounts 
was agreed to by a record vote of 17 yeas and 8 nays. The names 
of Members voting for and against follow:


    Final passage of H.R. 1016, as amended, was agreed to by a 
record vote of 21 yeas and 0 nays:


                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are reflected in the descriptive portions 
of this report.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                  Earmarks and Tax and Tariff Benefits

    H.R. 1016 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(d), 9(e), or 9(f) of rule XXI of the Rules of the 
House of Representatives.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate on H.R. 
1016 prepared by the Director of the Congressional Budget 
Office pursuant to section 402 of the Congressional Budget Act 
of 1974.

               Congressional Budget Office Cost Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
for H.R. 1016 provided by the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 16, 2009.
Hon. Bob Filner,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1016, the Veterans 
Health Care Budget Reform and Transparency Act of 2009.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sunita 
D'Monte.
            Sincerely,
                                    Douglas W. Elmendorf, Director.
    Enclosure.

H.R. 1016--Veterans Health Care Budget Reform and Transparency Act of 
        2009

    Summary: H.R. 1016 would authorize appropriations for 
certain programs within the Department of Veterans Affairs 
(VA). CBO estimates that implementing the bill would cost 
almost $187 billion over the 2010-2014 period, assuming 
appropriation of the necessary amounts. Enacting the bill would 
not affect direct spending or revenues.
    H.R. 1016 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 1016 is shown in the following table. 
The costs of this legislation fall within budget function 700 
(veterans benefits and services).
    Basis of estimate: For this estimate, CBO assumes that the 
specified and estimated authorizations will be appropriated 
near the start of each fiscal year beginning with 2011, and 
that outlays will follow historical patterns for similar and 
existing programs.

----------------------------------------------------------------------------------------------------------------
                                    By fiscal year, in millions of dollars.--
-----------------------------------------------------------------------------------------------------------------
                                                   2010       2011       2012       2013       2014    2010 2014
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Medical Services:
    Estimated Authorization Level.............          0     34,715     35,333     35,925     36,727    142,700
    Estimated Outlays.........................          0     30,548     34,529     35,595     36,429    137,101
Medical Facilities:
    Estimated Authorization Level.............          0      5,198      5,258      5,316      5,398     21,170
    Estimated Outlays.........................          0      4,025      4,773      5,095      5,322     19,215
Medical Support and Compliance:
    Estimated Authorization Level.............          0      4,760      4,864      4,972      5,107     19,703
    Estimated Outlays.........................          0      4,231      4,781      4,925      5,066     19,003
Information Technology Systems:
    Estimated Authorization Level.............          0      2,572      2,601      2,630      2,670     10,473
Estimated Outlays                                       0      1,929      2,465      2,621      2,659      9,674
Medical and Prosthetic Research:
    Estimated Authorization Level.............          0        532        539        547        557      2,175
    Estimated Outlays.........................          0        335        478        538        552      1,903
Total Changes:
    Estimated Authorization Level.............          0     47,777     48,595     49,390     50,459    196,221
    Estimated Outlays.........................          0     41,068     47,026     48,774     50,028    186,896
----------------------------------------------------------------------------------------------------------------

    H.R. 1016 would authorize appropriations for five specific 
budget accounts:
     Medical Services,
     Medical Facilities,
     Medical Support and Compliance,
     Information technology Systems, and
     Medical and Prosthetic Research.
    Under current law, appropriations for those budget accounts 
are provided each year. Starting in 2011 for each account 
listed above, the bill would authorize appropriations for that 
fiscal year as well as advance appropriations for the following 
fiscal year. CBO estimates that implementing the bill would 
cost almost $187 billion over the 2010-2014 period, assuming 
appropriation of the necessary amounts.
    CBO's estimate of the authorization of appropriations 
required under the bill are the same as projections for the 
2011-2014 period in the most recent CBO baseline, completed in 
March 2009. Those amounts are derived from the 2009 
appropriated level for each account and adjusted for 
anticipated inflation. CBO expects that those amounts would be 
sufficient to provide services at the current level. However, 
if VA were to significantly expand its health care programs--
for example, to include certain veterans with higher incomes 
who are currently ineligible--additional funding would be 
required.
    Intergovernmental and private-sector impact: H.R. 1016 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal Costs: Sunita D'Monte; Impact 
on State, Local, and Tribal Governments: Lisa Ramirez-Branum; 
Impact on the Private Sector: Elizabeth Bass.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates regarding H.R. 1016 prepared by the Director of the 
Congressional Budget Office pursuant to section 423 of the 
Unfunded Mandates Reform Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act would be created by H.R. 
1016.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for H.R. 1016 is provided by Article 
I, section 8 of the Constitution of the United States.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section provides the short title of H.R. 1016 as the 
``Veterans Health Care Budget Reform and Transparency Act of 
2009.''

Section 2. Sense of Congress

    This section would state that it is the sense of Congress 
that the provision of health care services to veterans could be 
more effectively and efficiently planned and managed if funding 
was provided in the form of advance appropriations.

Section 3. Presidents' budget submissions

    This section amends section 1105 of title 31, United States 
Code, to require the President to submit information on 
estimates of appropriations for the fiscal year following the 
fiscal year for which the budget is submitted for the Medical 
Services, Medical Support and Compliance, Medical Facilities, 
Information Technology Systems, and Medical and Prosthetic 
Research accounts of the VA.

Section 4. Advance appropriations for certain accounts of the 
        Department of Veterans Affairs

    This section amends title 38, United States Code, to add a 
new section providing authority for the provision of advance 
appropriations for the Medical Services, Medical Support and 
Compliance, Medical Facilities, Information Technology Systems, 
and Medical and Prosthetic Research accounts of the VA.
    This new section would require the VA to provide additional 
detailed budget estimates in support of advance appropriations 
for certain VA accounts in the annual information it provides 
to Congress in support of the VA's budget request.
    This new section would require a report, not later than 
July 31 of each year, to be submitted annually to Congress on 
the sufficiency of the VA's resources for the fiscal year 
beginning after the date of the submission of the report for 
the provision of medical care and include estimates of workload 
and demand data for that fiscal year.

Section 5. Comptroller General Study on adequacy and accuracy of 
        baseline model projections of the Department of Veterans 
        Affairs for health care expenditures

    This section would require a report from the Government 
Accountability Office in 2011, 2012, and 2013 as to whether the 
amount requested in the President's budget submission is 
consistent with the anticipated expenditures of the VA for 
health care referenced to the amount projected to be necessary 
by the VA's Enrollee Health Care Projection model.

Section 6. Report to Congress

    This section would require the VA to submit a report within 
90 days of enactment to the Senate and House of Representatives 
Committees on Veterans' Affairs, Appropriations, and the Budget 
detailing the VA's plans for improving its capability to more 
accurately estimate future health care costs and demands and 
describe any impediments, statutory or otherwise, to providing 
future year estimates for the Medical Services, Medical Support 
and Compliance, Medical Facilities, Information Technology 
Systems, and Medical and Prosthetic Research accounts of the 
VA.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

TITLE 31, UNITED STATES CODE

           *       *       *       *       *       *       *


SUBTITLE II--THE BUDGET PROCESS

           *       *       *       *       *       *       *


CHAPTER 11--THE BUDGET AND FISCAL, BUDGET, AND PROGRAM INFORMATION

           *       *       *       *       *       *       *


Sec. 1105. Budget contents and submission to Congress

  (a) On or after the first Monday in January but not later 
than the first Monday in February of each year, the President 
shall submit a budget of the United States Government for the 
following fiscal year. Each budget shall include a budget 
message and summary and supporting information. The President 
shall include in each budget the following:
          (1) * * *

           *       *       *       *       *       *       *

          (36) information on estimates of appropriations for 
        the fiscal year following the fiscal year for which the 
        budget is submitted for the following accounts of the 
        Department of Veterans Affairs:
                  (A) Medical Services.
                  (B) Medical Support and Compliance.
                  (C) Medical Facilities.
                  (D) Information Technology Systems.
                  (E) Medical and Prosthetic Research.

           *       *       *       *       *       *       *

                              ----------                              


TITLE 38, UNITED STATES CODE

           *       *       *       *       *       *       *


PART I--GENERAL PROVISIONS

           *       *       *       *       *       *       *


                           CHAPTER 1--GENERAL

Sec.
101. Definitions.
     * * * * * * *
117. Advance appropriations for certain accounts.

           *       *       *       *       *       *       *


Sec. 117. Advance appropriations for certain accounts

  (a) In General.--For each fiscal year, beginning with fiscal 
year 2011, discretionary new budget authority provided in an 
appropriations Act for the appropriations accounts of the 
Department specified in subsection (c) shall--
          (1) be made available for that fiscal year; and
          (2) include, for each such appropriations account, 
        advance discretionary new budget authority that first 
        becomes available for the first fiscal year after the 
        budget year.
  (b) Estimates Required.--The Secretary shall include in 
documents submitted to Congress in support of the President's 
budget submitted pursuant to section 1105 of title 31, United 
States Code, detailed estimates of the funds necessary for the 
accounts of the Department specified in subsection (c) for the 
fiscal year following the fiscal year for which the budget is 
submitted.
  (c) Accounts Specified.--The accounts specified in this 
subsection are the following accounts of the Department of 
Veterans Affairs:
          (1) Medical Services.
          (2) Medical Support and Compliance.
          (3) Medical Facilities.
          (4) Information Technology Systems.
          (5) Medical and Prosthetic Research.
  (d) Annual Report.--Not later than July 31 of each year, the 
Secretary shall submit to Congress an annual report on the 
sufficiency of the Department's resources for the next fiscal 
year beginning after the date of the submittal of the report 
for the provision of medical care. Such report shall also 
include estimates of the workload and demand data for that 
fiscal year.

                            ADDITIONAL VIEWS

    In my view, it is premature for the House of 
Representatives to consider H.R. 1016, as amended.
    The Committee on Veterans' Affairs did not hold a 
legislative hearing on the bill and the Administration has not 
provided its official views on the bill, although it has stated 
its support for the concept of advance appropriations. The 
failure to follow regular order and the unnecessary haste with 
which this bill is being advanced means that it will need 
additional changes later, if the House passes the bill in its 
present form.
    H.R. 1016 was not considered by the Subcommittee on Health, 
to which it was referred. At the Committee markup, I offered an 
amendment that was adopted to include the information 
technology, and medical and prosthetic research accounts of the 
Department of Veterans Affairs (VA) among those covered by 
advance appropriations. I offered the amendment because both 
the Congressional Research Service (CRS) and the Secretary of 
Veterans Affairs, the Honorable Eric Shinseki, raised concerns 
at the April 29, 2009, Committee hearing on ``Funding the U.S. 
Department of Veterans Affairs of the Future,'' that 
information technology should be included in advance 
appropriations legislation because of its close relationship to 
the provision of medical care. In a report dated April 28, 
2009, CRS also discussed potential problems if medical and 
prosthetic research were not included in such legislation.\1\ 
While I am pleased that these accounts are now included in the 
bill, a legislative hearing by the subcommittee with 
jurisdiction over the bill would have allowed the issue to be 
more fully considered at the appropriate stage of the 
legislative process.
---------------------------------------------------------------------------
    \1\Congressional Research Service Report (2009). ``Advance 
Appropriations for Veterans' Health Care: Issues and Options for 
Congress.'' April 28, 2009, RL40489, p. 13.
---------------------------------------------------------------------------
    Also, at the oversight hearing on the future funding of the 
VA, the Government Accountability Office (GAO) expressed 
reservations about its possible role in advance appropriations. 
Subsequently, in its written response of June 17, 2009, to one 
of my hearing questions, GAO made a strong statement which 
leads me to believe that section 5 of the amended bill (section 
4 of the bill as introduced) is not workable to the extent that 
it requires GAO to obtain budgetary information from the VA 
before the department makes its fiscal year budget request. GAO 
stated:
          ``. . . we do question whether GAO could conduct the 
        required studies due at or before the date the 
        President's budget request is submitted to Congress 
        because of challenges in obtaining, evaluating, and 
        reporting on the relevant budgetary and technical 
        information. Section 4 contemplates that information 
        regarding the President's requests for VA health care 
        funding would be available to GAO as they are 
        developed. While GAO has a broad statutory right of 
        access to agency records under section 716(a) of title 
        31, United States Code, executive agencies have 
        consistently resisted making detailed information about 
        the development of the President's budget available to 
        GAO (footnote omitted). In light of the extensive 
        negotiations typically required to resolve requests for 
        this type of information, as well as the need for 
        timely information for congressional deliberations on 
        VA funding, GAO believes that a requirement like that 
        contained in section 4 is inadvisable.''
    VA's official views on this issue are currently unknown, 
but it is my belief that any administration would likely find 
this process objectionable. I believe that it has not been 
adequately considered and that it should have been addressed 
before H.R. 1016, as amended, is reported to the House.

                                  
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