[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]

U.S. DEPARTMENT OF VETERANS AFFAIRS BUDGET REQUEST FOR FISCAL YEAR 2018

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HEARING

before the

COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTEENTH CONGRESS

FIRST SESSION

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WEDNESDAY, MAY 24, 2017

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Serial No. 115-14

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Printed for the use of the Committee on Veterans' Affairs

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Available via the World Wide Web: http://www.govinfo.gov

_________

U.S. GOVERNMENT PUBLISHING OFFICE

29-682 WASHINGTON : 2018

COMMITTEE ON VETERANS' AFFAIRS

DAVID P. ROE, Tennessee, Chairman

GUS M. BILIRAKIS, Florida, Vice- TIM WALZ, Minnesota, Ranking
Chairman Member
MIKE COFFMAN, Colorado MARK TAKANO, California
BRAD R. WENSTRUP, Ohio JULIA BROWNLEY, California
AMATA COLEMAN RADEWAGEN, American ANN M. KUSTER, New Hampshire
Samoa BETO O'ROURKE, Texas
MIKE BOST, Illinois KATHLEEN RICE, New York
BRUCE POLIQUIN, Maine J. LUIS CORREA, California
NEAL DUNN, Florida KILILI SABLAN, Northern Mariana
JODEY ARRINGTON, Texas Islands
JOHN RUTHERFORD, Florida ELIZABETH ESTY, Connecticut
CLAY HIGGINS, Louisiana SCOTT PETERS, California
JACK BERGMAN, Michigan
JIM BANKS, Indiana
JENNIFFER GONZALEZ-COLON, Puerto
Rico
Jon Towers, Staff Director
Ray Kelley, Democratic Staff Director

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
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further refined.

C O N T E N T S

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Wednesday, May 24, 2017

Page

U.S. Department Of Veterans Affairs Budget Request For Fiscal
Year 2018...................................................... 1

OPENING STATEMENTS

Honorable David P. Roe, Chairman................................. 1
Honorable Timothy J. Walz, Ranking Member........................ 3

WITNESSES

The Honorable David J. Shulkin M.D., Secretary, U.S. Department
of Veterans Affairs............................................ 5
Prepared Statement........................................... 38

Accompanied by:

Edward Murray, Acting Assistant Secretary for Management and
Chief Financial Officer, U.S. Department of Veterans
Affairs
Mark Yow, Chief Financial Officer, Veterans Health
Administration, U.S. Department of Veterans Affairs
James Manker, Acting Principal Deputy Under Secretary for
Benefits, Veterans Benefits Administration, U.S.
Department of Veterans Affairs
Matthew Sullivan, Deputy Under Secretary for Finance and
Planning and Chief Financial Officer, National Cemetery
Administration, U.S. Department of Veterans Affairs
Rob Thomas, Acting Assistant Secretary for Information and
Technology, U.S. Department of Veterans Affairs

STATEMENTS FOR THE RECORD

The American Legion.............................................. 46
Veterans Of Foreign Wars Of The United States (VFW).............. 57
Disabled American Veterans (DAV)................................. 60
Paralyzed Veterans of America (PVA).............................. 62
The Indepedent Budget for FY 18 and FY 19........................ 67

QUESTIONS FOR THE RECORD

HVAC Majority Q&A................................................ 80

U.S. DEPARTMENT OF VETERANS AFFAIRS BUDGET REQUEST FOR FISCAL YEAR 2018

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Wednesday, May 24, 2017

Committee on Veterans' Affairs,
U. S. House of Representatives,
Washington, D.C.
The Committee met, pursuant to notice, at 10:30 a.m., in
Room 334, Cannon House Office Building, Hon. Phil Roe [Chairman
of the Committee] presiding.
Present: Representatives Roe, Walz, Peters, Coffman, Etsy,
Dunn, O'Rourke, Bergman, Sablan, Bilirakis, Kuster, Poliquin,
Brownlee, Wenstrup, Takano, Rutherford, Correa, Banks, and
Gonzalez-Colon.

OPENING STATEMENT OF DAVID P. ROE, CHAIRMAN

The Chairman. Committee will come to order. Before we start
today I have a special guest here that I would like to
introduce. Today is Student Youth Foster Day. We have foster
students from around the country, and if you see people wearing
these little pins they are shadowing a Congressman today. And I
would like Timothy Dennis. Timothy has been here before, so
Timothy if you would stand up and be recognized. I know you are
here somewhere. Oh, here he is, back over here. So he is going
to be with me today.
And these are remarkable young people, overcome a lot of
obstacles in their lives. So when you see them, have a chance
to stop and just say a few words, and find out what their story
is.
Good morning, and I thank all of you all for being here
today to discuss the President's Fiscal Year 2018 budget
submission for the Department of Veterans Affairs. The budget
is not about numbers, it is about priorities. Yesterday
afternoon the President proposed a $6.4 billion increase in the
VA's budget, which is reflective of the high priority that this
administration places on serving our veterans.
I applaud that action and share the feeling that second
perhaps only to ensuring our ongoing national security, there
is no greater priority we have than caring for those who have
borne the burden of our battles. This budget was released less
than 24 hours ago.
In the coming weeks our Subcommittees will hold hearings to
discuss different aspects of the budget in depth. However,
during this morning's hearing I want to discuss several
overarching issues that I believe are key to transforming the
Department of Veterans Affairs into a nimble 21st century
organization that our veterans can count on when they need it
most.
Before we dive into the budget, Mr. Secretary, I am
extremely proud that the accountability legislation and appeals
reform legislation have already passed the House's congress
with wide-spread bipartisan support, and with your support I
might add. I am grateful to you, Mr. Secretary, and your team
for assisting the Committee in both of these efforts, and I
look forward to continuing to work together to secure a swift
passage of those measures in the Senate this summer.
Our next priority is reforming the Choice Program, and in
doing so, consolidating VA's many care and the community
programs under a single, streamlined Choice umbrella. The
President's budget demonstrates that Choice reform is an
administration priority. While the Choice Program that Congress
created three years ago has helped hundreds of thousands of
veterans receive care, it is not without problems to say the
least.
Too many veterans still have trouble getting the care they
need when they need it. Too many community providers and VA
employees are left confused and frustrated by overly
bureaucratic and opaque care in the community processes and
procedures. Looking ahead, I want a Choice Program that
empowers veteran patients to make decisions about where, and
when, and how to use the health care benefits they have earned
because, as a doctor, I can tell you that empowering patients
leads to better outcomes, better quality, and more efficient
and effective hospitals and clinics.
Our veteran's service organization partners rightly note,
when given the choice to receive care in the community many
veterans choose to remain at VA. For those veterans we must
examine ways to increase access, improve quality, and ensure an
appropriate alignment of supply and demand. I look forward to
working together to reform the Choice Program in the coming
months.
Mr. Secretary, in recent weeks you have noted that VA has a
high number of vacant, underutilized buildings and properties
across the country. Using VA's limited resources to secure and
maintain empty or largely empty buildings and campuses while so
many VA's capital asset projects go unfunded serves no veteran
well.
I look forward to working with the administration to
examine how to right size VA's physical footprint, ensure
taxpayer dollars are spent where our veterans need them the
most, and explore innovative ways of ensuring that VA is able
to maintain a presence in the community.
Underlying all of these goals from achieving faster and
more accurate appeals determinations to enhancing VA's
relationships with community providers to make better decisions
about where to locate clinics and hospitals is a need to
modernize information technology systems. I cannot state too
strongly the need for VA to invest wisely in IT programs and
consider commercial off-the-shelf products that can be quickly
put to use solving VA's biggest problems.
Finally, I want to note that at 2:00 in this very room the
Subcommittee on Oversight and Investigations, led by my friend
General Bergman, will conduct a hearing on VA's financial
management. That hearing cannot come at a better time.
While I am grateful for the support and dedication that the
administration has shown to our veterans by requesting a multi-
billion dollar increase in VA's budget, we must continue to
seek ways for VA to be more responsible stewards of the
taxpayer dollars.
As long as I am Chairman of this Committee, I can assure
you that I will continue to advocate for the resources VA needs
to meet our Nation's obligations to veterans. However, simply
increasing VA's bottom line year after year often results in
more bureaucracy but seldom results in better services for our
veterans.
Throwing money at a problem rarely makes it go away. And
when it does, a solution is often temporary. It is time for the
VA to take a hard look at how resources are allocated and make
some tough calls about how to best serve our veterans and their
families in a budget environment that is not infinite.
I want to help you with that, Mr. Secretary, and look
forward to hearing today on how this Committee can help you
transform the VA into a high performing organization I know it
can be and I believe our veterans deserve. Interestingly, we
just spent about an hour talking about these very things, Mr.
Secretary. I think pretty much what I just said we just said an
hour ago over at the Capital.
With that, I will yield to Ranking Member Walz and any
opening statement he might have.

OPENING STATEMENT OF TIMOTHY J. WALZ, RANKING MEMBER

Mr. Walz. Well, thank you, Mr. Chairman. And thank you, Mr.
Secretary, it is good to see you again and I really look
forward to hearing you dive deep into this. As the Chairman
said, we have had it for about a day and we put some long hours
combing through it. And I think all of us understand budgets
are far more than fiscal documents; they are a reflection of
our values.
And I have to say at first blush, the six percent, that we
are certainly glad that you did not receive the fate of almost
every other agency, and that is a good thing. It looks like
most of the gross and medical services and community care; we
are obviously going to have questions on how that is going to
be delivered.
I am concerned, though, that demand on a system could very
well increase in funding because veterans do not live in the
bubble we talked about. They, and their families, and neighbors
rely on services from many other Federal agencies. My fear is
the budget fails to account for the demand on VA care when they
are shifted over from other agencies and other programs. This
could be changes or elimination of ACA or the impact the
produced budget will have on HUD-VASH Program. I am interested
to hear today on how you interpret what is going to happen with
that shift.
Yesterday, the House passed a bipartisan Claims Appeal
Modernization Improvement Act. I congratulate the Chairman and
the entire Committee on doing that. Really important, though,
that the Veterans Benefit Administration and the Board of
Veterans Appeal have the resources they need to implement that.
They are receiving some cuts over there the way we are
interpreting this, so we want to see that.
Information technology down $215 million. Does not give me
confidence that the VA will have what it needs to implement
this streamlined claim process, but I rely on your expertise to
help us with that.
Also, I know this is a gorilla in this room but it is going
to have addressed. The House passed the bipartisan bill of a
one-year COLA without a round-down provision in it and to DIC
benefits. Congress's intent was clear yesterday, and I believe
what was a unanimous vote did not round-down those benefits.
Veterans see the round-down as a pretty strong repudiation
of what they feel they have earned. While rounding down to the
nearest dollar may seem like an insignificant cut, it is going
to be viewed that way. So I would be interested to hear how we
talk about that.
I am encouraged by the increase in non-reoccurring
maintenance that will allow VA to not only maintain its
infrastructure but begin the process of reducing that backlog.
We had a talk yesterday, and I appreciate your insights on
this, Mr. Secretary, I think you are on a leading edge of how
we deal with our buildings, our infrastructure, our excess
buildings, and everything else. And, again, looking forward to
hearing you talk about how that is going to work, but I think
that is a good start.
I have concerns on the budget proposes to fund the Veterans
Choice Program through mandatory spending, especially in light
of repeated quests. Again, I am going to leave that open to
have you and hear from you today, but it appears to lay the
foundation for Choice 2.0 and increase non-VA care without a
plan yet that has been given to us. So it is going to look like
there is a pot of money, mandatory spending, how is it going to
happen. Again, you are the expert on this and you have earned
the trust of this Committee and veterans to be able to
implement that.
We have heard from veteran service organizations, I am
going to talk about that in a little bit. I hope we are going
to work together with them as this gets implemented. I know you
value that relationship deeply. I can say that they are
concerned, but they are also concerned in a positive way.
On a positive note, we are hearing from veterans back home
about the national veteran cemeteries and what it is, we had
this talk yesterday. We are not going to rest until everything
is covered, but I hear nothing but positive comments about our
veteran cemeteries. I hear nothing but positive comments about
those people whose loved ones are buried there. And yesterday
listening to you, Mr. Secretary, have a vision for using those
as a resource to educate our children and our citizens. Very
inspiring, and we want to make sure you have the resources to
do exactly that.
Again on the surface, the request is not bad compared to
other agencies. We will hear from you today. Again, I hope that
bar is higher than that, but I am concerned, but I would leave
it with asking you today, I know you are in your lane, I know
you are in your expertise, but, again, I would ask you to give
us some assurances that the bleed over from the cuts in the
other agencies are not going to change some of these bottom
line numbers and impact on veterans. And with that, once again,
I thank you for your time, Mr. Secretary, and look forward to
your testimony.
I yield back. Thank you, Chairman.
The Chairman. Thank you, Mr. Walz.
As I mentioned earlier, we are honored to be joined this
morning by the Honorable Dr. David Shulkin, Secretary to the
Department of Veterans Affairs.
Mr. Secretary, thank you so much for being here. The
secretary is joined at the table by Edward Murray, the Acting
Assistant Secretary for Management and Interim Chief Financial
Officer; Mark Yow, the Chief Financial Officer for Veterans
Health Administration; Mr. James Manker, the Acting Principal
Deputy Under Secretary for Benefits; Matthew Sullivan, the
Deputy Undersecretary for Finance and Planning and the Chief
Financial Officer for the National Cemetery Administration; and
Rob Thomas, the Acting Assistant Secretary for Information
Technology. Thank all of you all for being here this morning.
Mr. Secretary, you are now recognized for as much time as
you may consume.

STATEMENT OF THE HONORABLE DAVID J. SHULKIN, M.D.

Secretary Shulkin. Great. Well, thank you. And thank you
for introducing my team. You see I brought a lot of help
because we are expecting some good, tough questions this
morning.
Well, besides good morning, Chairman Roe, and Ranking
Member Walz, and other Members of the Committee, I want to
thank you for the opportunity to be able to spend time talking
about the President's 2018 budget and the 2019 advanced
appropriations.
I also owe additional thanks to the Committee. Yesterday,
you all had a very busy day. Seven bills passed for veterans.
Thank you, Chairman, for your leadership on that.
The most important to us, although they are all important,
is the appeals modernization. And so thank you very much,
again, for the House's leadership on that important topic.
I also want to thank you for providing VA the full 2017
budget from the very start of the fiscal year. It has been a
long time since that has happened and, again, thank you for
your support on that.
It really speaks well of the House and of the American
people that despite the differences that we are seeing going on
that we can come together and uphold our common commitment to
caring for the Nation's veterans.
I have submitted a written statement for the record. So,
what I want to mention is that the President's 2018 budget
reflects his strong personal commitment to the Nation's
veterans providing the resources necessary to continuing our
ongoing modernization of VA. It requests $186.5 billion for our
VA, $104 billion of that is in mandatory funding, and $82.1
billion in discretionary funding, for a total increase of $6.4
billion, or 3.6 percent over 2017.
It provides $3.5 billion in mandatory funds to continue the
Veterans Choice Program, plus a 7.1 percent increase in
discretionary funding for the Health Administration to improve
patient access and timeliness of care.
This is the budget that we need to achieve my five
priorities as Secretary. Those five priorities are to provide
veterans greater choice; to modernize our systems; to focus our
resources more efficiently on what matters most to veterans; to
improve the timeliness of services in both health
administration and in disability and appeals; and then my
single clinical priority on reducing veteran suicides.
We are already taking bold steps on each of these
priorities. Last month the President signed a re-authorization
of the VACA legislation, ensuring that veterans can continue to
get care from community providers. The President has also
ordered the establishment of the VA accountability office, and
we recently removed two medical center directors and three
other senior executive service leaders. We will simply not
tolerate employees who act counter to the values that put our
veterans at risk.
We now have same-day services for primary care and mental
health at all of our medical centers. Veterans can now access
wait time data for their local VA facilities by using an easy,
online tool where they can access--where they can get access,
wait time data, service or satisfaction data, and quality data.
No other health system in the country has this type of
transparency.
A few months ago the Veterans Crisis Line had a rollover
rate to our backup centers of more than 30 percent. Today that
rate is less than 1 percent. We have launched a new predicative
modeling tool called REACH VET that allows VA to provide
proactive care to veterans who are at higher risk for suicide.
And I have also recently announced the VA will provide
emergency mental health care to former servicemembers with
other-than-honorable discharges at all of our medical
facilities. Thank you in particular to Representative Coffman,
who really enlightened me onto this problem. We know that these
veterans are at greater risk for suicide, and we are now caring
for them wherever we can.
These are just a few of the efforts that are under way
already improving the lives of veterans, but to keep moving
forward we need your help. We need Congress to help us realign
our capital infrastructure as the Chairman mentioned, to
dispose of property that we can't use to support veterans that
are already being served.
We need Congress to fund our IT modernization to keep our
legacy systems from failing and to increase interoperability of
electronic health records essential to any high performing
integrated health care system. We are now also weighing options
for adopting a commercial off-the-shelf system as an
alternative to our legacy systems. And I have announced that I
will make a decision on that before July 1st.
It makes sense to go with an off-the-shelf system, but for
that we are going to need additional support. And by off-the-
shelf I have said that what I am really considering is either
an outsource effort to continue VistA or look at an off-the-
shelf, but I want to get VA out of the software development
business.
We need Congress to authorize the overhaul of our broken
and failing claims appeal process, and yesterday you helped us
in a long way towards that. We need the Senate to work with us
on that as well. We worked closely with VSOs and other
stakeholders to draft a proposal to modernize that system. And,
again, we are waiting for the Senate to act.
Most of all, we need Congress to ensure the continued
success of Choice for veterans. More veterans are opting for
Choice than ever before. Since January 1st of this year, we
have authorized 8.2 million community care appointments. That
is 2.6 million more than last year, or a 46 percent increase.
Thus far this fiscal year we have authorized 18,000 more Choice
appointments per business day than in fiscal year 2016.
We have charted a course for modernization and are already
moving forward, but we need your help to keep up with the
Choice Program's growth, maintain our momentum, and make our
community care plan a reality for all veterans for generations
to come.
Thank you, and we look forward to any questions you have
about the budget today.

[The prepared statement of David J. Shulkin, M.D. appears
in the Appendix]

The Chairman. Thank you, Mr. Secretary.
I will yield myself five minutes and start the questioning.
How does this request for continued Choice Program funding
fit with your plans to reform and revamp the Choice Program?
Secretary Shulkin. Well, first of all, as I said, we are
very pleased to see the President's budget. We think it gives
us the resources necessary to modernize the system. Part of
modernizing the system is learning from our experience with
Choice over the past three years, and all of you have been very
active in giving us feedback that while we are seeing the
Choice Program working better than it had before, it still is
too complex a system.
It is filled with bureaucracy, our veterans do not
understand it, and our staff do not understand it. So with all
that feedback and working with our VSOs and other veterans'
groups, we have been working on redesigning a program that we
want to present to all of you, in approximately ten days now,
that we believe is going to work better for veterans.
And the basic issue is that we want to change it from being
an administrative system. That is, based upon being 40 miles
away from a primary care provider and an administrative system
based on 30 days or more of wait time, to being a clinical
system that actually meets the clinical needs of the veterans
that we serve. We believe we have a way of doing this and we
believe that we will do it within the budget that the President
has proposed.
The Chairman. And I think we will obviously hold a hearing
on Choice, but just very briefly, would it be where you are
looking at a, basically a panel of physicians just like you
would have in the private sector where you could use the best
of the private world and the public world?
Because there is not an unlimited group of providers out
there. I mean, we are finding shortages on the private sector.
I was riding into the office this morning and on Satellite
Radio I heard my hospital system in Johnson City, Tennessee,
that hospital system advertising for nurses--
Secretary Shulkin. Wow.
The Chairman [continued]. --here in Washington D.C. And so
that is a problem nationwide. And so I think we are going to
have to marry the best of both the VA world and the private
sector to provide the quality care that you've talked about. Is
that something you have in mind?
Secretary Shulkin. Yeah. When we talk about a highly
integrated, high performance system, it is exactly what we are
talking about, Mr. Chairman. We believe that is what veterans
want. They want a strong VA and it is our job to make sure that
we are providing the best services in the VA, but the VA can't
do it alone. And that is what we learned in the 2014 wait time
crisis--that we have to work with the private sector.
Right now about a third of all care in the VA is being
delivered in the private sector. We want to make sure that when
a veteran goes outside that they are getting the best care, and
when they stay inside the VA, two-thirds of the time, they are
getting the best care. So it is exactly what we are aiming for.
The Chairman. You know, we had a little--it was not an
October surprise, but we had a little surprise about a year-
and-a-half ago, and I guess one of the things the Committee
will want to know, both sides of the aisle, can you assure the
Committee that the additional funding requested in this budget
submission that VA's care in the community programs will be
fully funded for fiscal year 2018 and 2019? Because we had a
big shortfall if you remember.
Secretary Shulkin. Yeah. The problem that we had about
almost two years ago, but, you know, it sort of was coming to
the height 18 months ago, was that we actually had enough money
in the community care program, it is just that they were in two
separate checking accounts. And we needed to have your
authority to mix the money in the checking accounts.
We had run out of money in the traditional community care
programs but the Choice Program we had not tapped a large
amount of that money. What we are going to be seeking from you
and working with you on is trying to have one pot of money for
community care for veterans. And that way we simplify the
system and we do not repeat the mistakes of history of
essentially not spending correctly out of two checking
accounts.
The Chairman. One last question, very quickly. Does this
budget request account for the new Office of Accountability and
Whistleblower Protection as well as a director that will
oversee the function of this office that was recently created
by the President's executive order?
Secretary Shulkin. Well, ahead of schedule because this is
such a priority for me, we have named a director and we have
started to put this office together. So we are not waiting
until we have to do it, we are doing it proactively. I am
trying to--there were no new funds authorized for this, so, of
course, my biggest intent is to make sure that this office has
a big impact, but also trying to do it to make sure the
taxpayers are getting the best value. So I am trying to use it
from current resources and not try to expend additional
resources. But we will make sure that we fund this from within
our current budget allocation.
The Chairman. Good. My time has expired.
Mr. Walz, you are recognized.
Mr. Walz. We are going to defer on our side down to Mr.
Peters. I do that out of empathy having occupied what is
affectionately the Walz chair for ten years. So you may go
first and we will work this way, Mr. Peters.
Mr. Peters. How great is that? I look forward to this every
hearing, so. This would not happen in every Committee, by the
way. Thank you, Mr. Ranking Member.
Thank you, Secretary Shulkin, for coming in to see us. In
San Diego, as you know, we have I think over 230,000 veterans
in our county, which is a rich population, and a terrific
resource for us. We have a lot of issues like fixing the
appeals process, which we are really happy with the progress on
that. Addressing some schedule issues, getting the right
medical staff at the VA, fixing the IT system, trying to
reconcile the Department of Defense system with the Veterans'
system.
I wanted to ask a question, though, about homelessness
because San Diego, I think, has I think the fifth largest
population of homeless people in absolute numbers, and because
of the nature of our population, so many of them are veterans.
And as I think I mentioned to you yesterday, I am pleased
to see the support for vouchers going forward. We have two
issues in San Diego, where one is: we have very, very high
rents and so it is hard for us to get the same bang for our
buck as other communities for the vouchers. And let me be--you
could address that a little bit.
But, really, the other side of this is because, you know,
all the effects for veterans are not on this budget, and in
particular the Housing and Urban Development budget has been
hammered, and the proposal is really to cut a lot of the
support for homelessness.
So while we see generally support, maybe even a little more
support directly in the Veterans Affairs budget, I am concerned
we are going to be playing wack-a-mole because of what is
happening in the HUD budget. Can you address that? And how can
we be assured that the rug is not really going to be taken out
from underneath veterans on homelessness?
Secretary Shulkin. Well, thank you for raising this as an
issue. This is extremely important for us, and this is an area
that we know that we are doing the right thing, that we are
making progress on. We have reduced veteran's homelessness
since 2010 by 46 percent. Last year we had the biggest impact
ever; a 17 percent reduction in veteran's homelessness. And we
continue to see community after community declare an end to
chronic veteran homelessness.
But there are parts of the country, California in
particular, that continue to hold the majority of the issues.
San Diego is a big area. LA, of course, is even bigger. This
budget for VA not only continues to allow us to make the type
of progress we did last year, but it actually adds $605 million
more to allow us to accelerate our progress, and we are going
to continue to do that.
I think you are right. Many of the things that we do in VA
require inter-agency cooperation. HUD has been a terrific
partner for us. And, of course, we are concerned if they are
going to be able to continue that. While I can't speak for the
Department of Housing and Urban Development, I have reached out
to Secretary Carson, and I have expressed my concern, as well.
He has assured me that he remains committed to being the
type of partner that HUD has in the past, that he understands
that veterans are a very important part of the community and
important to the American people. So I expect that we will see
that same type of commitment that we have in the past from HUD.
Mr. Peters. Well, again, I appreciate you reaching out to
him and, obviously, we are happy to hear that. We will need to
hear from him, also. And I think, frankly, if the budget
proceeds for HUD the way it is, he is going to be pretty
constrained.
The other off-budget thing I mentioned too is, with respect
to IT, we really ought to coordinate with the Department of
Defense. They got a nice boost in the proposed budget. I think
many of us think that that is appropriate. I served on the
Armed Services for my first two terms. But the glaring mis-
match between the two systems, you know, a young person enlists
when they are 18 and there is no reason why they can't continue
on with the same--in the same continuum of system all the way
until ultimately they pass away.
And, finally, I want to mention, on the cemeteries; Mr.
Walz mentioned how terrific that is. I just want to thank,
personally, your staff for that open house we did at Miramar
National Cemetery this past weekend. We are trying to let
people know that Rosecrans is full; obviously, that is one of
the jewels of the system.
We have beautiful facility at Miramar, and I want to thank
Brad Phillips and Rex Kern of your staff for helping us
introduce that to the veteran community in San Diego, and we
look forward to working with you on these and other issues
throughout the year.
Secretary Shulkin. Thank you for all those comments. First
of all, our cemetery does not get the recognition that it
deserves, so thank you for doing that. And as we approach
Memorial Day, these are terrific places that have great
ceremonies planned to honor those who have passed away and have
served the country. So thank you for mentioning that, and we
will make sure that they hear your acknowledgment of their
appreciation.
Mr. Peters. Thanks very much. Thank you.
The Chairman. I thank the Gentleman for yielding.
Mr. Coffman, you are recognized for five minutes.
Mr. Coffman. Thank you, Mr. Chairman.
Mr. Secretary, your announcement about providing urgent
mental health services to former servicemembers with other than
honorable discharges, does the VA intend to use the existing
funds to provide this care to these veterans or does VA require
additional funding?
Secretary Shulkin. There is an additional cost to providing
these services to members that had not previously received
services, and we have quantified that. But I have said that
there is no higher priority, and so we will do this within the
funding that the President has proposed.
I believe that you continue to advocate for broader service
coverage, something that I support very much. But with that,
there will be additional costs, and we would also appreciate
consideration of additional appropriations for those services.
But we are not going to let the fact that there are not
additional monies right now prevent us from offering these
services.
Mr. Coffman. Thank you, Mr. Secretary. Mr. Secretary, on
the construction side, obviously there were some significant
problems in that area as noted in the construction project in
the State of Colorado in Aurora in the VA replacement center
there. Tell us about your path going forward and what lessons
have you learned from that particular project?
Secretary Shulkin. Well, you know, I think, again, you have
been instrumental in highlighting that this project was just
unacceptable and the cost overruns almost unexplainable.
Fortunately, this is a project that will be completed, thanks
again for your support, and it appears to be on time, and there
will be no additional funds requested to complete this project.
But we will never again have a project like that in VA. It
just simply is irresponsible. We have changed our processes. Of
course, as you know, the Corps of Army Engineers is now
involved, and we have learned in root cause analyses why that
project was such a cost overrun.
In this budget we are not proposing any major construction
projects like that. I think we have to think about doing
business differently. Health care is changing, it is no
longer--I think the Chairman makes this point, what used to
require large, large buildings with in-patient capacity now are
becoming far more ambulatory in nature.
We recently had a project in Omaha, Nebraska, that we just
announced, which is a new model for building, which is an
ambulatory building that is a private/public partnership,
actually allows for donations from the community, and builds a
different standard. So I think that is the model we are going
to want to look at going forward to get more value for veterans
and taxpayers.
Mr. Coffman. Mr. Secretary, you recently stated that VA has
identified more than 430 vacant buildings and 735 underutilized
buildings that costs the government $25 million a year. How do
you intend to address the issue of unused VA facilities without
greatly impacting veterans' access to health care?
Secretary Shulkin. Well, the facilities that are vacant and
underutilized are not currently taking care of veterans. They
are either vacant buildings or they are being used for non-
clinical services like storing engineering equipment or other
types of storage facilities.
So we believe that these 1,100 facilities could essentially
be consolidated or eliminated and not impact veteran care at
all. In fact, be able to use the money that we are using to
maintain them and heat them and put that money back into
veteran services.
Mr. Coffman. Thank you.
Mr. Chairman, I yield back.
The Chairman. I thank the gentleman for yielding.
Ms. Esty, you are recognized for five minutes.
Ms. Esty. Thank you, Mr. Chairman. Thank you, Ranking
Member Walz. And, again, I want to thank the Secretary and his
team for working so hard with us. And this Committee worked
very hard and my Subcommittee Chairman, Mr. Bost. And I think
we have a very good bill, not perfect, but a very good bill to
pass on to the Senate and hopefully move across the finish
line.
But I really do want to emphasize that we are really not
across the finish line until this bill is implemented. The
appeals bill needs to be implemented. And I not only need your
commitment, but I am a little concerned looking at the budget
that those IT funds are actually cut. We are now establishing
if this bill gets, as we hope, signed into law, we are going to
have a new system. We are going to have three tiers.
So, number one, how are we going to ensure we have the IT
resources?
Secretary Shulkin. Yeah.
Ms. Esty. Number two, what are we going to do about how we
track the legacy claims? So those are the first two I would
like your thoughts on.
Secretary Shulkin. Yeah. So thank you for asking those
questions.
First of all, the appeals legislation: very, very
important. But I want to be clear; it solves the appeals issue
going forward. It does not address the backlog, which is
considerable. Today it takes a veteran, if they file an appeal,
six years before they are going to get an answer, on average.
So I want to make sure that everyone understands what we are
solving and what we are not. We are solving going forward, but
we still have a backlog issue.
On the IT issue, what I think you are seeing in this budget
is a recognition that we do not want to continue to ask for
more money and invest more money in fixing broken systems. We
are not done with IT. We are going to need to come back to you
after I announce a direction by July 1st to be able to talk to
you about what really needs to be done in modernizing our IT
systems.
So this budget, the one area that I will tell you that we
have not yet accounted for is the modernization of the IT
system. But we did not want to continue to keep on asking for
more money, so you are seeing a reduction in IT services and
that is the explanation.
Ms. Esty. Thank you. That is an important clarification for
us to understand that you expect to come back to us and,
obviously, we are going to need procurement and reform to
facilitate this process. So I hope when you get to that point
we can work together on that.
I am concerned because I am seeing a decrease in the
funding on the research budget for medical and prosthetic
research. The reason I flag that is because we know as a
factual matter that our veterans are returning home now with
more profound injuries than in the past. The research done by
the VA is extraordinarily important for these veterans and,
frankly, for all Americans because that research carries
benefits for Americans more broadly.
How can we be assured that veterans are continuing to
receive the kind of support they need when that research
component is getting cut?
Secretary Shulkin. Well, I, you know, I am in agreement
with you that the VA is the only organization whose research
focuses solely on improving the well-being of veterans. And the
research that VA has done over the years has led to not only
important advances for veterans but for all Americans. And many
of the things that we all rely upon came out of VA research.
So I do not intend for this budget to be any type of
messaging that VA research is not important, not critical; that
we do want to continue to invest in this. We are working with
our researchers right now to seek additional extramural funding
to work with the NIH. I have spoken to Frances Collins about
working closer to have our research programs work together, and
we are seeking to make sure that our research program grows.
But this budget shows some fiscal constraint on the area of
research, and we will make sure and keep an eye on that to make
sure this is a strong program.
Ms. Esty. Thank you. I think that will be particularly
important. And you and I have discussed before with the Deborah
Sampson Act and needing to address women veteran specific
issues, and if that funding is cut we have some risks there.
The last thing I want to quickly flag is we have had some
issues in the Hartford office in Connecticut with the VR&E,
with the Vocational Rehabilitation and Employment Services. We
are just--there is more demand than there is ability to
accommodate. Love to get--work with you after this, and also to
flag this may be an issue in other districts, too. We may not
be alone. We want our veterans to get rehabilitated, we want
them to be employed, and that is the wrong place we should be
looking to cut because, in fact, that is what they deserve,
that opportunity. So thank you.
And I yield back.
The Chairman. I thank the gentlelady for yielding.
Dr. Dunn, you are recognized for five minutes.
Mr. Dunn. Thank you very much, Mr. Chairman.
Mr. Secretary, I see the VA funding for mental health has
increased by $473 million from 2017, and that expands inpatient
residential outpatient treatment. Does any of that additional
funding include money geared towards research on traumatic
brain injury and other psychological disorders like depression?
Secretary Shulkin. Yeah. What you have noted is an increase
in our discretionary funding. So that is on the clinical side.
Our research allocation is different. We have over the past
nine years increased our research funding for TBI and other
brain injuries by about tenfold. We now have well over a
hundred different research projects going on, on TBI, and this
is one of the areas of focus.
We just came back last week from a summit in Boston called
the Brain Trust where we focused on not only VA but other
Federal organizations and community organizations to enhance
the research in TBI. And one of the real calls to action was to
develop a bio marker so that we could track progress in TBI and
post-traumatic stress in particular.
Mr. Dunn. Thank you, I look forward to following that with
you. Yesterday we passed 2288 in the House, and there is strong
bipartisan for that and in the VSOs, but there is a concern
that the veterans who are in the current appeals process rather
than the new appeals process will languish, perhaps not get
the--their appeals may be slowed down because of that. Can you
address that concern?
Secretary Shulkin. Yeah. I do not believe that the appeals
will slow down. We are talking about now the backlog of
appeals?
Mr. Dunn. Yes. Yes, sir.
Secretary Shulkin. I do not believe--
Mr. Dunn. Current appeals.
Secretary Shulkin. Yeah, current appeals. I do not believe
that they will slow down, but I do not believe that they will
particularly speed up either.
Mr. Dunn. So that was my next question.
Secretary Shulkin. Yeah. Yeah.
Mr. Dunn. And you do not--can you say if we pass this
current budget as proposed--
Secretary Shulkin. Yes.
Mr. Dunn [continued]. --does that address, to some degree,
the delays that we are looking at?
Secretary Shulkin. No. And I do not have good news for you
on that. I think that it would take until, I believe, 2026 to--
with the current allocation of funds to be able to work off
that backlog, and I think that is really too long.
But I do not have a better answer for you right now on the
backlog. Thanks to what you have done, and if the Senate passes
that, we will have a fix going forward. But the backlog would
take a new injection of funding to be able to hire more lawyers
and more support staff--
Mr. Dunn. Maybe we could change--
Secretary Shulkin [continued]. --to work that off.
Mr. Dunn [continued]. --the system instead. I mean, I do
not know. It just seems--
Secretary Shulkin. Well, I think we really do have to look
at that.
Mr. Dunn. We will work with you on that. I think you have
some great ideas. Let me squeeze in one last question here. Can
you tell us about your future plans to update the processing
system for the post-911 GI Bill Rights, the Educational Rights,
and what efforts were--could you just sort of streamline that
because that system is really bogged down?
Secretary Shulkin. Yeah. I am going to have Mr. Manker talk
about that.
Mr. Manker. So thank you for that question. The long term
solution, as we call it, for Post-9/11 and Chapter 33, we are
processing claims--we are reaching our strategic targets now
with respect to processing claims. We have two times during the
year, during the spring enrollment and the fall enrollment,
where it slows down a little, but still we are hitting claims,
supplemental claims, within about seven to eight days. And new
claims--
Mr. Dunn. That has not been my experience. I would love to
work with your office on that.
Mr. Manker. We would be delighted.
Mr. Dunn. I am 60 days into a claim, so--
Mr. Manker. Okay. Okay.
Mr. Dunn [continued]. --we want to address that.
Mr. Manker. Absolutely.
Mr. Dunn. I think that--on the ground it feels like it is a
lot longer.
Mr. Manker. Yes, sir.
Mr. Dunn. So, with that, Mr. Chairman, I yield back. Thank
you.
The Chairman. I thank the gentleman for yielding.
Mr. O'Rourke, you are recognized.
Mr. O'Rourke. Thank you, Mr. Chairman. Mr. Secretary, thank
you for your service, especially in the time where we first got
to know you as undersecretary for VHA and all the changes and
improvements that you made in that time, and your commitment to
working with us and improving care and service delivery to
veterans in the short time that you have been secretary. And I
am grateful to the President for making this selection, and for
the Senate in confirming you unanimously.
Let me take one of the best parts of your opening
statement, which is the fact that you were the first secretary
that I know of that has made suicide reduction and prevention a
top priority. And the fact that you call it out and call it by
its name is so incredibly important for us getting from what I
think you have officially measured as 20 veteran suicides every
single day in this country to a number that is far lower than
that. Many of these are preventable deaths.
I am grateful for the fact that you are now helping other
than honorable discharged veterans in emergency situations. But
if, as you say, there is no higher priority, and if this really
is something that you want to make a difference on, that is
absolutely not going to be enough.
Let me give you these facts by context. From 2011 through
2015, 13,283 veterans received an other than honorable
discharge who had within the two years prior to separation,
post-traumatic stress disorder, traumatic brain injury, or
certain other conditions that could be associated with
misconduct.
Unless they are in an emergency situation--I am going to
kill myself, I need some help--and they go to an emergency
room, we are not helping them now. We are not giving them the
preventative care that is going to ensure that we don't find
ourselves, and that they don't find themselves, and their
families don't find them in these kind of situations.
So I urge you to do everything you can administratively,
and I think you can do more. And I urge my colleagues to take
the next step to build on what Mr. Coffman has done and support
the Honoring Our Commitment Act that I introduced with Mr. Bost
in the House, Mr. Peters, and then in the Senate, Mr. Murphy.
I would like to get your comments on that and whether or
not you are committed to serving all other than honorable
discharged veterans who need that help from our country.
Secretary Shulkin. Well, you know, if anything,
Congressman, you have been consistent as an advocate on mental
health and the fact that VA can do better. And you have usually
been right-- maybe always been right on these issues.
So I will take you up on your ask that I re-look at
everything that we can do administratively. I felt like it was
important to act quickly, and I felt that I had the authority
to take the actions that I have. But if there is more that we
can do, we will.
I also appreciate you recognizing that your ability to
legislate on this is extremely important and would assure that
we have the authorities that we need to be able to do this.
This is critically important, and this is a matter of saving
lives. So we take it really seriously, and appreciate you
continuing to be such a strong advocate.
Mr. O'Rourke. Great. So we will both commit to pursuing
this. You, administratively. You will take it as far as you
can, that is what I hear. We have the responsibility to
legislate that if you cannot get all the way there on your own
through the administration.
Secretary Shulkin. Yes.
Mr. O'Rourke. And so I am asking my colleagues who are here
today to join me on this, the Chairman to make this a priority,
and make sure that we can move forward on this.
Two other quick points. You clarified your commitment to
purchasing a commercial off-the-shelf software. I think a lot
of people perked up when you said that that could be
interpreted to mean either what I think of a commercial off-
the-shelf system, which is a commercial off-the-shelf system,
or more Vista just programmed by somebody outside of the VA.
I really hope that it will be the former. That you will
pick the best system, the best practices that are used in the
best systems in the country instead of trying to build upon
VistA, which you have acknowledged is an ancient antiquated
system that, you know, costs us more to maintain than in the
value that we get out of that.
And the other point I would make, and this may be just my
interpretation, is you said that you did not request more in IT
spending because you do not yet have a plan. But it seems like
we are requesting more for Choice spending without fully
understanding how we are going to improve the Choice system. So
I just commit to you, and I want to work with you to make sure
that we have the controls in place to get better outcomes for
Choice before we spend billions more on that process.
So thank you for that. I am out of time. So may take your
response on both of those for record. Thank you.
Secretary Shulkin. Thanks.
The Chairman. General Bergman, you are recognized for five
minutes.
Mr. Bergman. Thank you, Mr. Chairman, and Secretary
Shulkin. I applaud you and the VA for your statement earlier
about your decision to get out of the software development
business. Thank you. That shows signs that the vision has a
future.
You have testified several times about the Medical
Appointment Scheduling System, MASS, which is, you know, the
VA's long term solution to scheduling issues. The MASS contract
was initially awarded in August of 2015, then all work was
suspended in early 2016. It was announced that it was being
reactivated in January as a pilot at one site. Nothing has
happened, no task orders have been awarded. Can you give us an
update or explain what is happening with MASS?
Secretary Shulkin. Yeah. So the VA actually has four
different scheduling things going on right now. Our current
scheduling system which is based off a DOS based system that
most of our schedulers use. We have a home-grown system being
rolled out called VSE, for Veterans Scheduling Enhancements.
The MASS pilot at one site as you mentioned. And then recently,
a new bill that was passed requiring that we pilot an off-the-
shelf scheduling system, and so we just awarded that contract.
In terms of the MASS contract, an award will be announced.
Mark, do you remember when that is?
Mr. Yow. Soon.
Secretary Shulkin. Okay. So in the next couple weeks to
proceed forward with the pilot site, and a lot of pre-work has
been done on that. But the MASS scheduling system was awarded
because that is the most tested off-the-shelf system that is
available, and so that is why we are proceeding with our pilot
site.
Mr. Bergman. Okay. Well, you know, it does not necessarily
seem, because we have talked about the backlogs and delays,
that I am not feeling the aggressive nature here of moving
forward with getting a solution. You have got--went from three
sites to one site. This is largely fixed costs in this
piloting. Is there any reason that we cannot in surge, if you
will? Bottom line is we have got time we can't recover but we
can surge assets to develop data quicker. Is that a
possibility? What am I missing?
Secretary Shulkin. Well, the original plan with the MASS
program was three pilots for $57 million. I did not believe
that that was an appropriate use of taxpayers' money. So we
have gone back and we have narrowed that down to a much smaller
amount of money. I believe it is now $6 million for the single
pilot site. That will build all the interfaces that we need so
that we can, if that is successful, then begin a much quicker
roll-out.
And so what we are trying to do is to make sure that we are
not throwing money out. We want to show--we want to be able to
demonstrate that we can build the interfaces that it works for
our schedulers that it works for veterans. And as soon as we
have shown that, and that is why this award will happen in the
next two weeks, then we can surge that and accelerate it
throughout the country.
Mr. Bergman. Well, again, I applaud you because you took a
$57 million number and reduced it. Good on you. Sounds like the
timelines are moving forward. I would like to go, and we only
got a minute here, but it is probably more of a comment than a
question because you and I had a chance to chat a little bit
about this yesterday. But in the military, when we are in the
fight, we have the assets we have and we redistribute and
redeploy them as we need, as the fronts of the fight appear.
Regarding the appeals, what I heard--said this morning here
was hire more lawyers. That concerns me. Don't we have enough
folks that are currently working in the veterans affairs
bureaucracy that you could consider, strongly consider,
redeploying already existing assets in a short term to increase
the rate of reduction of the backlog in the appeals process?
Secretary Shulkin. Yeah. I am going to tell you as honestly
as I can that I don't believe that we have done enough to
consider what you have just asked. It has been suggested to us
to bring back retired judges who are already trained in
veteran's law. We have suggested that and internally that has
not been well accepted.
I believe that we owe you a much better answer on this. I
think that we need to do better. I wish I knew what that was
today. But I want to work with you, if you have ideas on how to
do this. I think we owe you a better answer.
Mr. Bergman. Thank you. I do. And I yield back. I know I am
over my time. Thank you, sir.
The Chairman. Thank you, General. And I want to apologize
to Mr. Sablan. I am going to add five minutes to our meeting
this afternoon to apologize. We have a meeting. But I am going
ask that Ms. Brownley be given five minutes now and then I
think she has to leave.
Okay. Mr. Sablan is up then.
Mr. Sablan. Thank you very much. Thank you. We should do
this more often, actually. But, Mr. Secretary, thank you,
welcome again, and thank you for your service. And I have just
basically two questions now. On recruitment and retention of
health care providers, all of us here are hearing of shortages
of health care providers around the country. And as you and I
had discussed before, in my district, there is one private
physician and so there is a need for more health care
providers.
But do you believe your budget includes the resources
necessary to successfully recruit? And after you recruit, to
retain the health care professionals you need to provide care
to veterans?
Secretary Shulkin. I think we have a lot of work to do on
recruitment, and we have a big clinical need, particularly in
parts of the country that are rural or isolated like certainly
where you represent, and we talked about that yesterday.
I think our recruitment issues stem from the overall
national health care shortage, particularly in primary care and
mental health. They result from the bad morale and the press
that we have been under for the past three years where people
say, ``Why would I want to go work for VA?'' And what we are
trying now to do is to change the dialog on that that this is
one of the best places in the country to serve. That it is a
truly remarkable system and people should give it a chance.
Our hiring practices are too slow, so we lose good
candidates when they get offers from private sector places.
And, finally, in many situations our salaries just aren't
competitive. So this is a multi-factorial issue that we have to
address. I can tell you it is at the very top of our list to
make sure that we are filling the vacancies that we need. It is
one of the reasons why we gave full practice authority to
advance practice nurses so that we could get other types of
health care professionals to come into the VA. But we are
working on this and we still have a ways to go.
Mr. Sablan. All right. Thank you. Mr. Secretary, this has
been brought up, discussed and just resharing, but explain it
again so I could fully--more fully understand it. You have
talked about the VA's plans to provide emergency health
services to veterans who have other than honorable discharges.
Now how does this connect to your overall suicide prevention
strategy?
Secretary Shulkin. When you look at one of the reasons, and
this gets to Congresswoman Esty's point about the value of our
research. The VA has studied the issue of suicide in a way that
no other organization has in the country, so we know a lot
about where the suicides are happening.
They are happening among our older veterans in largest
numbers. But the fastest growing groups are among younger
veterans, and the very fastest group among women veterans. And
when you start looking at sub-groups, those that are homeless
and those that are other than honorably discharged who don't
have access to the proper health care services, including
mental health, are at extreme risk.
So if we really want to prevent suicides we have to get to
homeless veterans, we have to get to veterans that do not have
health care services like other than honorably, and we have to
begin to start understanding better the issues with women
veterans and the younger veterans, and design our services to
be different.
So we took an action on other than honorably, we are
working hard on homelessness, and we are trying to understand
how we can do better in those other high risk populations.
Mr. Sablan. Thank you very much.
Mr. Chairman, I yield back.
The Chairman. I thank the gentleman for yielding.
Mr. Bilirakis, you are recognized.
Mr. Bilirakis. Thank you. Thank you, Mr. Chairman, I
appreciate it. And thank you again, Mr. Secretary. I appreciate
it. Thanks for the round table yesterday, too, the bipartisan
round table discussion.
Secretary Shulkin. Thank you.
Mr. Bilirakis. Very productive, as far as I am concerned.
Mr. Secretary, on the Choice Act, I assume that the mental
health services, the veterans, if they qualified for the Choice
Act though they qualify, they have access to mental health
services in the community; is that correct?
Secretary Shulkin. Yes.
Mr. Bilirakis. Okay. How about veterans who qualify for
dental care? I know we need to expand that, but 100 percent and
if it is combat related. Do they have access, too, under the
Choice Act?
Secretary Shulkin. Certainly if they meet the requirements
in terms of currently--right now--wait times or the service is
not offered they can use non-community care. Correct?
Mr. Yow. They can.
Secretary Shulkin. Yeah. We do a fair amount of that.
Mr. Bilirakis. So they can?
Secretary Shulkin. Yes.
Mr. Bilirakis. All right. Very good. The other thing is,
Mr. Secretary, on the COVER Act again.
Secretary Shulkin. Yes.
Mr. Bilirakis. We talked about at the round table, the
Presidential appointees--
Secretary Shulkin. Right.
Mr. Bilirakis [continued]. --so that we can start.
Secretary Shulkin. This morning my Chief of Staff and I are
going to be identifying two candidates to recommend to the
President to appoint to that.
Mr. Bilirakis. Thank you. The sooner the better--
Secretary Shulkin. Yes.
Mr. Bilirakis [continued]. --so we can get started.
Secretary Shulkin. Thank you. Thank you for reminding us on
that.
Mr. Bilirakis. This has to do with the alternative
therapies, as you know.
Secretary Shulkin. Absolutely. Very important.
Mr. Bilirakis. Okay. And then I want to thank Dr. Dunn, as
well, a fellow Floridian who brought up the Post-9/11 GI Bill
claims in efforts to automate the certificate of eligibility. I
have a bill that I filed, HR1994, the Vocational Education and
Training Enhancement for Reintegration Assistance Act, called
the Veterans' Act. Can you work with me on that? Because this
helps address that issue. And I would like for--if you could
review that bill and have some suggestions as well--
Secretary Shulkin. Yeah. Absolutely.
Mr. Bilirakis [continued]. --with regard to the post-911.
Secretary Shulkin. Absolutely. We would be delighted to.
Mr. Bilirakis. Thank you very much. One more question. The
budget request maintains the IG funding as the same as fiscal
year 2017. I continue to hear from veterans to investigate
claims for negligence and retaliation against whistleblowers.
Do you believe the IG has sufficient resources to investigate
the amounts of claims they receive?
Secretary Shulkin. Yeah. I may need some correction on
this. I thought the IG got a substantial increase in FTEs.
Mr. Murray. There are five this year.
Secretary Shulkin. But--
Mr. Murray. I hope you are right.
Secretary Shulkin. Was there increase last year? They were
going to hire 200 new employees, I thought.
Mr. Murray. They got an increase last year, but--
Secretary Shulkin. They were flat.
Mr. Murray [continued]. --they were flat.
Secretary Shulkin. So flat funded. It was last fiscal year
in '17 they got an increase of--
Mr. Murray [continued]. I don't have the amount, so--
Secretary Shulkin [continued].--a couple hundred employees.
So that was maintained in the President's budget, but no
additional increase.
Mr. Bilirakis. But no additional increase.
Secretary Shulkin. Right. Right. Yeah.
Mr. Bilirakis. And do you think--
Secretary Shulkin. They are still--
Mr. Bilirakis [continued]. And do you think that is enough
funding for the IG office, as far as the--
Secretary Shulkin. Yes. Yes.
Mr. Bilirakis. --appropriation?
Secretary Shulkin. I have met with the IG and I know that
he is hiring up to those levels now. There was a hiring freeze
and that delayed some of that hiring. And we are working with
the IG actually to find additional space so that he can house
the people when he hires them.
Mr. Bilirakis. Okay. Very good. Thank you. I want to
continue to work with you on that, as well.
Secretary Shulkin. Thank you.
Mr. Bilirakis. Thank you very much. Anyone like my time?
Mr. Chairman, you want my time?
Mr. Roe. No, I am fine.
Mr. Bilirakis. Okay. All right. I yield back. Thank you.
Mr. Roe. Ms. Kuster, you are recognized.
Ms. Kuster. Thank you very much, Mr. Chairman. And thank
you Secretary for being with us with your team. I want to start
by referring to a report today in the Washington Post from the
FDA on opioids. And just a rather astonishing fact from a
study, after one day of opioid use six percent of people will
still use opioids one year later. After 30 days use, 35 percent
will still be using opioids one year later. And it is rather
extraordinary and I wanted to follow up on the cuts in the
research budget. Because I am grateful for you having chosen
opioid addiction as one of your areas of most importance at
this point. But we have a great deal to learn about pain
management. And I know that there are cutting edge efforts
being made in the VA, but I want to make sure that we spread
those across the country. What can you say based upon the
budget and any other plans that you have to reduce the use of
opioid medication and provide for alternative pain management
in the VA?
Secretary Shulkin. Well, first of all those are astonishing
statistics and very, very scary. They really reinforce the fact
that before we prescribe these medications we really have to
make sure that we are considering alternatives. Because a day's
treatment with that type of statistic a year later is pretty
scary.
The VA, as you know, has been focusing on this prior to
this becoming an American public health issue. We have seen a
33 percent reduction since 2010 in the use of opioids. And in
some areas, like in your VA, a 50 percent reduction my
understanding is. And so we have a lot to learn. I recently
published an article with my colleagues at VA in the Journal of
the American Medical Association this January on what VA is
doing. Because we believe we are--we have a lot to show and to
teach the rest of American medicine about this multifaceted
approach towards reducing opioid use. Yesterday you passed a
bill in the House for prescription drug monitoring and we are
very supportive of that and appreciate that. Because that is
part of what we think is important.
So we will continue to focus on this. The use of
complementary therapies as you are showing is very, very
important as an alternative. The DoD and VA guidelines, which
are a stepwise approach towards pain management, are important.
And as you mentioned, research is critical. We have reached out
to the FDA because we want VA to be one of the leaders in
finding a non-addictive pain medication that will really begin
to start dramatically limiting the use of opioids.
Ms. Kuster. Good. And we would like to work with you. And
in particular I would like to take these new pain management
techniques and make sure they are available in VAs all across--
Secretary Shulkin. Yes.
Ms. Kuster [continued]. --the country. So we will follow up
on that. With regard to the IT funding I want to focus in with
my colleague General Bergman's comments about the scheduling.
In particular two items with regard to your determination of an
effective scheduling system going forward. One is whether you
are considering what is now widely available in the private
sector, which is self-selecting. And, number two, any other
methods to determine efficiency of scheduling. We have a
dramatic problem all across the VA in missed appointments. And
part of this is that the appointments they get are not until
August because we have such an inefficient scheduling system.
And so I think we really need to be focused on reducing those
wait times by giving people the times when they can get a ride,
when they have a family member that can get them to the VA,
when they have access to public transportation. So is there
anything in this--and I am very, very worried, by the way,
about the lack of IT funding in this budget. I am more
encouraged that you said you are going to come back. We need to
work with you in a bipartisan way with our Appropriations
colleagues because they may not be in the mood. You know, this
is the budget season and you are going to come back on your
timeframe after your decision. And they may very well say, no,
no, we have moved onto giving massive tax cuts, we don't have
the funds. So those two questions if you would.
Secretary Shulkin. Yeah.
Ms. Kuster. In six seconds.
Secretary Shulkin. Okay. I think it is all legitimate.
First of all, when I got to the VA we were using a system
called recall reminders, which is we wouldn't tell the veteran
when their appointment was. We would send them a letter in the
mail saying here is when you should come. We are stopping that
practice. That doesn't work. I have never seen it anywhere
else. And veterans need to know when their appointments are and
they need to be involved in the decision for the reasons you
have said. Our no-show rates are far too high and that is
really something that we are targeting to get down.
Secondly, we do have a system of self-scheduling called
VAR, Veterans Appointment Request, which is a self-scheduling
system. It is now available, I think, at 104 sites, but really
in pilot tests. And it will roll out this summer so that
veterans can start using that in much larger numbers. And--
Ms. Kuster. We will work with you.
Secretary Shulkin. Yeah, thank you.
Ms. Kuster. I need to yield back.
Secretary Shulkin. Thank you.
Ms. Kuster. But we will work with our colleagues to make
sure you get the IT funding you need.
Secretary Shulkin. Thank you very much.
Ms. Kuster. If you make the right decision.
Secretary Shulkin. Yes.
Ms. Kuster. Good luck.
Mr. Roe. Thank you, gentlelady, for yielding. Mr. Poliquin,
you are recognized.
Mr. Poliquin. Thank you, Mr. Chairman, very much. And thank
you, Mr. Shulkin. Good to see you again.
Secretary Shulkin. Thanks.
Mr. Poliquin. Now, I know you can't have favorites. But we
know the State of Maine is your favorite state in the union,
and as a result, all 66,000 veterans we have in Maine's second
district are you favorite. With that said, sir, I want to thank
you and I appreciate very much your working with us to make
sure the $23 million that the VA owed to two of our hospitals
in Maine, Eastern Maine Medical Center in Bangor, my district,
and Maine Medical in Portland, not in my district. But you have
done a great job catching up and paying those claims. And I
want to thank you and your terrific Chief of Staff, whose name
I have a hard time pronouncing. Help me out with it.
Secretary Shulkin. Vivieca.
Mr. Poliquin. Vivieca, she is terrific.
Secretary Shulkin. Vivieca Wright-Simpson.
Mr. Poliquin. Who we met with yesterday.
Secretary Shulkin. Right.
Mr. Poliquin. Was it this morning?
Secretary Shulkin. Yes.
Mr. Poliquin. Yesterday morning. This morning. Yesterday.
Secretary Shulkin. Yesterday morning.
Mr. Poliquin. In any event, when we reported to you that we
have another one of our hospitals--
Secretary Shulkin. Yes.
Mr. Poliquin [continued]. --Calais Regional Hospital way
down east Maine--
Secretary Shulkin. Yes.
Mr. Poliquin [continued]. --highly rural. They just closed
a unit because of other issues they have there. And they are
owed a half million dollars by you folks. It's 120 days late.
And I know you have committed to work with us on that. And you
have, in addition to that, asked us when we hear additional
problems with late payments, you will be on top. So thank you
very much, Mr. Shulkin, I appreciate it.
Secretary Shulkin. Yep.
Mr. Poliquin. Now, we all know, because it's been discussed
here, Mr. Chairman, that going forward as our WW2 and Korea
veterans continue to age that the absolute number of veterans
that we will be caring for going forward will drop. At the same
time the budget for the VA, over the last six years, and this
has been mentioned several times in hearings the last few
months, in the last six years it has gone up 50 percent. So my
concern is how do we get every possible dollar that we have
available clinically to help our veterans if they need a knee
replacement or they have PTSD?
Now, let's talk a little bit about the IT system here if I
can, Mr. Shulkin. Now, it has been said time and time again we
have a real problem with it. We have a problem with scheduling.
We have a problem with paying claims. We have a problem with
sharing medical records. So the IT system doesn't work. It is
about 30 years old. Who on your staff was there at the time
these decisions were made?
Secretary Shulkin. Which decision are we talking about?
Mr. Poliquin. Well, I am looking at--
Secretary Shulkin. Yeah.
Mr. Poliquin. If I may.
Secretary Shulkin. Yeah.
Mr. Poliquin. I am looking at the whole IT system problem.
I have a little bit of experience in the software business. You
know, in the software business, you don't want to be in the
software business. You want to take care of veterans.
Secretary Shulkin. Right.
Mr. Poliquin. I understand that and I agree with that. I
want to know who among your senior staff, maybe some folks
sitting at the table, who--anybody involved--
Secretary Shulkin. Yes.
Mr. Poliquin [continued]. --in those decisions to build an
IT system internally that does not work. Why has it taken you
this long to say there has got to be a better way to do it? Who
at the VA has made that decision and are they with you today?
Secretary Shulkin. Well, I think that this is a decision
that has been passed down over many, many administrations and
many secretaries. We do have with us our Acting Chief
Information Officer, but I don't think that you can look to him
to say that he was in the position that was accountable at the
time.
Mr. Poliquin. Are there any folks at the VA now, Mr.
Secretary, who would be involved in this decision to go off
shelf to buy a system that will work so we can save money for
our veterans clinically and we are not in the business of
software? Are there any folks at the VA now that will be making
that decision that have been involved in prior decisions?
Secretary Shulkin. I am making that decision. I have said
that this will be a decision I will make by July 1st. And I was
not involved.
Mr. Poliquin. Okay. How can you assure this Committee that
is looking to help you, Mr. Secretary, to make sure that we
don't have this problem again? How can you assure us that won't
happen? For example, it is very easy when you buy a software
system off the shelf to know when it needs upgrades or maybe we
can do a little bit of this internally, you know, what have
you. How can you assure us this problem won't happen again?
Secretary Shulkin. Well, let's wait until I make a decision
on what we want to do and then let's have that discussion.
Because I think--
Mr. Poliquin. Because if I--
Secretary Shulkin [continued]. --that is an important
discussion.
Mr. Poliquin. If I am not mistaken the 4, with a B, would
be $4 billion per year with spending is to maintain four or
five or six different systems that don't work.
Secretary Shulkin. At least 70 percent is towards
maintenance.
Mr. Poliquin. Okay. So--
Secretary Shulkin. So 4.2 billion.
Mr. Poliquin. Yeah. That is a lot of money.
Secretary Shulkin. It is a lot of money.
Mr. Poliquin. That we could be using for knee replacements
or what have you. Okay. In my remaining 30 seconds, and Mr.
Chairman, Mr. Bilirakis was gentile in saying he had a minute
and a half. Anybody want that minute? I would like that minute
and a half. Is that possible? Darn it. Tell me, Mr. Secretary,
what it is going to look like where our VA is seeking their
health care when we are moving away from big medical facilities
to more community-based systems, how is that going to look to
our veterans when they go to look for their health care?
Secretary Shulkin. Well, look, health care is rapidly
changing. I think what we are seeing is over time, and you are
seeing this outside the VA as well, a transition from
inpatient-based care to outpatient-based care. VA is now about
ninety percent outpatient-based care. I think over time you are
going to see health care move to this. And we are building a
system--this is part of our IT assessment --that increasingly
needs to reach veterans where they are. Younger veterans, who
as you mentioned because of the demographics, are going to be
our core target audience as our older veterans get older, want
care in way that is different than past generations. And we
increasingly need to--we can't expect for them to come into our
buildings to get that care. We have to evolve our system.
Mr. Poliquin. And I am sure, Mr. Secretary, that your new
IT system will include those devices.
Mr. Roe. The gentleman's time has expired.
MR. Poliquin. Thank you very much. You bet.
Mr. Roe. Ms. Brownley, you are recognized.
Ms. Brownley. Thank you, Mr. Chairman. I think I might be
the seventh or eighth member that has asked about IT systems so
far. So I think I am getting a picture of what your intentions
are. And you talked about off the shelf systems or contracting
out to support VistA by July 1st and that you are going to make
that decision. So I am looking for not only the VistA system,
but for scheduling systems and everything else that needs to be
upgraded. And I, you know, continue to say that I think our
services to veterans will only be as good as our IT services.
And we are not going to be able to be as efficient and timely
until we do.
So I guess my question is, and I don't want to harp on it
too much longer, but when will you provide sort of a
comprehensive IT plan for all the various systems we have
talked about in these hearings of, you know, what your
intention is and--
Secretary Shulkin. Yeah.
Ms. Brownley [continued]. --your decisions are?
Secretary Shulkin. Yeah. I have said, and all the factors
that you are talking about, Congresswoman, are things that I am
taking into account right now. Not only the issues related to
how can we best serve veterans, but as we are increasingly
getting care in the community we need to make sure that we are
able to communicate in an interoperable way with all of our
partners. Not only Department of Defense--
Ms. Brownley. Yeah.
Secretary Shulkin [continued]. --but our academic centers.
So here are a number of considerations. I have said that by
July 1st I will announce the decision and the direction that we
are going. Once we do that, then we need to develop exactly
what you are talking about, which is the comprehensive plan
towards implementing that. And that is when we will begin
discussions with you and not only on the cost of these systems,
but what that plan looks like. And as you know, when you change
directions most of your planning is in change management. How
do you get your organization ready for this? It is not usually
the technology piece.
Ms. Brownley. Okay. Thank you. I appreciate our meeting
that we had yesterday in my office. And we talked a little bit
about IVF services to our veterans and getting that program off
the ground. You had mentioned, you know, in my office that
there are 40 plus veterans that are somewhere in the process to
receive IVF services.
So last night I was at a Paralyzed Veterans of America
event and spoke with their National President, Al Kovak.
Secretary Shulkin. Uh-huh.
Ms. Brownley. And he explained to me, I was talking about
our meeting and IVF. And he said, well, he is in San Diego and
he said ``I have been waiting and I have not been able to find
a fertility doctor that would be reimbursed by--
Secretary Shulkin. Uh-huh.
Ms. Brownley [continued]. --the VA. So he is stating that
his time is running out. And, you know, so what he was saying
and what you were saying--
Secretary Shulkin. Uh-huh.
Ms. Brownley [continued]. --to be didn't quite match up.
Secretary Shulkin. Uh-huh.
Ms. Brownley. And so I don't know where the problem is. If
the problem is--
Secretary Shulkin. Right.
Ms. Brownley [continued]. --in, you know, third party
providers, if it is the reimbursement rate, you know, where it
is. But, you know, I certainly would like to be able to get
back to--
Secretary Shulkin. Right.
Ms. Brownley [continued]. --the National President of PVA
and say we have resolved this so that he has the opportunity to
start a family.
Secretary Shulkin. What we talked about yesterday was
exactly this point, that in our rush to get this program up
that we are still identifying providers to be able to do
exactly that. I would suggest to you that you re-contact the
National Commander and my guess is, is that he will tell you it
has been resolved.
Ms. Brownley. Thank you very much.
Secretary Shulkin. Okay.
Ms. Brownley. Thank you very much for that. And I don't
have much time left. But a third question that I wanted to talk
about a little bit is have--in your budget you talk about the
number of veterans we need to serve, that we have served in,
you know, 2017 and who will serve in 2018 and 2019. The numbers
haven't shifted that much from 6.9 to 7 to 7.1. So I'm curious
if the analysis that you have done has taken into account other
provisions in the larger budget. And it is Medicaid that I want
to address specifically. So, you know, there are a lot of
veterans, one in ten veterans use Medicaid services. If we make
those deep cuts in Medicaid through this budget have you
accounted for the additional demand, if you will, from veterans
who will need those services?
Mr. Roe. Mr. Secretary, I am going to ask that you send
that in writing if you would, just for time purposes. We still
have a lot of Members--
Secretary Shulkin. Absolutely.
Mr. Roe [continued]. --that need to ask questions.
Ms. Brownley. I yield back.
Mr. Roe. Thank you.
Secretary Shulkin. Thank you.
Mr. Roe. Thank you for yielding. Dr. Wenstrup, you are up.
Dr. Wenstrup. Thank you, Mr. Chairman. Thank you, Mr.
Secretary. A pleasure to be with you again today.
Secretary Shulkin. Thank you.
Dr. Wenstrup. A lot of people have asked about EMR. And I
can appreciate the decision process you have to go through.
Because are we going to connect with DoD? Are we going to
connect with the community? How can we do all this? One
question I do have for you, do you--are you concerned at all
that your decision for the best practice may be constrained by
budget?
Secretary Shulkin. We are going to make the best decision
for VA and for veterans and come back and talk to you about
whatever that decision is, if it has budget implications.
Dr. Wenstrup. I appreciate that. Because I am interested in
hearing--
Secretary Shulkin. Yeah.
Dr. Wenstrup [continued]. --you know, what dollars are
available and what you think is actually the best way to go.
Secretary Shulkin. Yes.
Dr. Wenstrup. And we have to talk about that.
Secretary Shulkin. Yes.
Dr. Wenstrup. And I appreciate it. You held up the device
earlier and you said this is where medicine is going. And it
just, you know, clicked in my head, maybe our veterans all need
some inexpensive little device that says--you talked about no
shows that says you have an appointment tomorrow.
Secretary Shulkin. Yeah.
Dr. Wenstrup. And on the issue of mental health. One of the
things that I saw at home recently, and so I just bring this
idea as somewhat fresh and maybe it is on your radar, but there
is a local mental health clinic on the bus line. And when you
go there if you have a physical problem, not just a mental
problem, that treatment is available right there that day, as
is their pharmacy. Everything is all under one shop. And they
not only leave, but they get blister packs of these are the
meds you take at eight o'clock, at noon, really increasing
compliance and presumably. And I think so far we are seeing
better outcomes. Something to consider in the face of
compliance if we go toward that type of system. But that being
said, one concern I have with those other than honorably
discharged, if they come in and they are in there for a mental
health problem--
Secretary Shulkin. Yeah.
Dr. Wenstrup [continued]. --and their appendix is bursting,
what are we doing?
Secretary Shulkin. Yeah. First of all, VA is a big believer
in integrated behavioral health and physical health care. We do
a million visits a year where essentially they are delivered
together because it takes away the stigma of behavioral health.
So it is absolutely important. Medication compliance: VA does
better than the private sector. One of the reasons is we allow
our pharmacists to practice at the highest level of their
license, and they are actually doing a terrific job.
Dr. Wenstrup. Sure.
Secretary Shulkin. VA pharmacists are really very--we are
very proud of them. My grandfather was a VA pharmacist. But I
do think that there is a lot more that we can do with this. And
so we would like to work with you on any other ideas that you
have.
Dr. Wenstrup. Yeah, thank you. I appreciate it. With that I
yield back.
Mr. Roe. Thank you, gentleman, for yielding. Mr. Takano,
you are recognized.
Mr. Takano. Thank you, Mr. Chairman. Good morning, Mr.
Secretary. You know, I am concerned about the proposal to
terminate individual unemployability benefits at age 62 for
veterans eligible for social security. Most of the savings in
this budget come from this proposal, which is $3.2 billion in
2018, and $17.9 billion over five years. Now, if a veteran was
provided this benefit because of an inability to maintain
gainful employment, particularly at an early age, he or she
wouldn't have been able to pay into social security or put
savings into a 401K or other retirement savings account. If you
end the IU payments at age 62 for veterans like this, don't you
risk plunging them into poverty when you shut off the IU
payments? How are we going to deal with this?
Secretary Shulkin. We are very sensitive to this issue. We
have a system where we will add to our mandatory program for
veteran's benefits over $6 billion next year alone. This is--
our growth and mandatory funding is at a considerable growth
rate. Now our veterans deserve that and we want to honor that
and we are honoring that by seeing the level of growth. But we
also have a responsibility to make sure that our current
mandatory programs are being utilized in the appropriate way.
In this setting, which is on the employability, this benefit
never stops. We have over 7,000 veterans above age 80 that we
are paying--
Mr. Takano. But the budget--
Secretary Shulkin. Yeah.
Mr. Takano [continued]. The proposal says that you are
going to cap it at age 62.
Secretary Shulkin. Right.
Mr. Takano. This makes no sense--
Secretary Shulkin. Right.
Ms. Takano [continued]. --to me.
Secretary Shulkin. Right. Currently we don't cap it. So we
have 7,000 veterans that we pay unemployability payments for
above age 80. And so age 62 is when veterans start getting
access to their other benefits, like Social Security. And so
this is a way, we think, of appropriately utilizing the
mandatory funds of which we are increasing by six billion, but
we are also looking at where we believe that we can make the
program more responsible.
Mr. Takano. Okay. I want to read you an excerpt from some
of the responses from the VSOs over mandatory spending that you
propose for the Choice Program. ``The VFW is very concerned
that the administration's request to make the Veteran's Choice
Program a permanent mandatory program could lead to the gradual
erosion of the VA health care system.'' PVA--``We believe
Congress must reject continued funding of this program through
a mandatory account and place it in line with all other
community care through the discretionary care account.'' Why
does the budget propose to extend the current Choice Program
with mandatory spending? That is my--what does this due to the
discretionary cabs or does the VA eventually intend to fund all
VA medical care and services with mandatory appropriations?
What is the rationale here?
Secretary Shulkin. Well, we are seeking to run the
community care programs as a single program. We spend, and the
budget allows for $13.4 billion to be spent in community care.
Of that, $2.9 billion is in mandatory, but the rest is in
discretionary.
Mr. Takano. Do you understand the VFW's concern about
gradual erosion? Because one of the concerns I have is the
growth of care in the community, private sector care, their
ability to hire advocates and their increasing--the increasing
value of that expenditure is going to, I think, put a lot of
downward pressure of other parts of VA health care. And I think
that is what they are getting at though.
Secretary Shulkin. Well--
Mr. Takano. Are you concerned about this at all?
Secretary Shulkin [continued]. Well, of course we're
concerned about it. I am always concerned about unintended
consequences and that is not our intent to see that happen. We
are grateful that this budget includes money for the
continuation of the Choice Fund. And remember, the last budget
did not include that. And so this is an indication that there
will be continued support to allow our veterans to get the care
they need. It was split between mandatory and discretionary,
but that is something that we believe that we can manage those
unintended consequences--to make sure that their concerns don't
happen.
Mr. Takano. Well, we will obviously pursue this in the
months to come. But I appreciate your responses.
Secretary Shulkin. Thank you.
Mr. Roe. Thank you, gentleman, for yielding. Mr.
Rutherford, you are recognized for five minutes.
Mr. Rutherford. Thank you, Mr. Chairman. Mr. Secretary,
good to see you again. I first want to bring up the issue of
the Inspector General's Office. And I believe in this budget
there is actually an increase up to 120 FTE, which is a 47 FTE
increase.
Secretary Shulkin. Yeah.
Mr. Rutherford. Is there any intention to renegotiate the
AFGE contracts, you know, the master collective bargaining
agreements?
Secretary Shulkin. Okay. So let's just clarify about the
IG, because--
Mr. Rutherford. Yeah.
Secretary Shulkin [continued]. --now we have heard two
separate things.
Mr. Murray. Okay. So the IG's budget in 2016 was $137
million. It went up in 2016, I am sorry, 137. It went up to
159,600,000 in '17 and was held flat at 159,600,000.
Secretary Shulkin. So the increase was in '16 and '17.
Yeah.
Mr. Murray. And that was well over a 15 percent increase--
Secretary Shulkin. Yeah.
Mr. Murray [continued]. --between '16 and '17. So there--
you are correct regarding their full-time equivalence. This
year their estimate's 773 and it goes up in '18 by 47 to 820.
Mr. Rutherford. Right.
Mr. Murray. So they are still ramping up.
Secretary Shulkin. Yeah, they are ramping up.
Mr. Rutherford. Okay.
Secretary Shulkin. They weren't able to hire over this past
year--
Mr. Rutherford. All--okay.
Secretary Shulkin [continued]. --all that they needed.
Mr. Rutherford. Good.
Secretary Shulkin. And then your second question was on the
what?
Mr. Rutherford. Renegotiation.
Secretary Shulkin. Yeah, on the renegotiation. Our
contracts are currently in force and we have--Mark, do you know
the status of that? I think that we've begun the pre-
conversations, but it is not going to be an early negotiation.
It is just going to be honoring the commitment for the contract
that it is, but starting to begin those negotiations looking
into the future.
Mr. Rutherford. Okay. Because those masters were last
negotiated in 2011, correct?
Secretary Shulkin. Yeah. I think that they are--yeah.
Mr. Rutherford. Okay. Okay. Let me go back to Mr. Takano's
discussions about Choice, because you and I had a conversation
that what I thought was very enlightening for me. Because I--it
was an angle that I really hadn't thought about. And you talked
about how increasing Choice actually can help change the
culture within the VA and in fact provide better care and
service for the veterans who are coming there. And how that
is--I believe that was number one--
Secretary Shulkin. Yes.
Mr. Rutherford [continued]. --on your list of five
principles that you really want to address.
Secretary Shulkin. Right.
Mr. Rutherford. Can you talk a little bit about that on how
Choice can have that very, very positive impact--
Secretary Shulkin. Right.
Mr. Rutherford [continued]. --on the organization?
Secretary Shulkin. Yeah. Look, I think it is the most
important strategy that we will pursue. I don't know an
industry that produces a product that isn't--that--an industry
that or a company that is successful that isn't customer
obsessed.
Mr. Rutherford. Uh-huh.
Secretary Shulkin. So you have to be completely focused on
what your customers need. And the reason why companies are
customer obsessed is because their customers have choice, and
if they don't produce something that their customers want, then
they lose their customers. And that is the issue in VA that all
too often people have adopted an attitude that veterans don't
have choice and that the veteran isn't treated as a customer.
Now, fortunately the vast majority of our employees are mission
driven and do understand that. But we have too many employees
that frankly have taken veterans for granted. And we are going
to stop that. And we are going to say, look, when you give
veterans choice--if you work in the VA, it is an honor to work
in the VA, we have a real critical mission, and you had better
understand that these are customers and treat them as if they
are customers. And that's the difference in culture that we are
trying to impose.
Ms. Rutherford. And I applaud you for that. You know, we
also--it seems like every time we meet we talk about mental
health. And I know what an advocate you are. It has been
discussed here ad nauseam almost. But this is a topic that, you
know, is near and dear to my heart. I was a--as a former
sheriff having run a jail I saw firsthand those folks. In fact,
I ran the largest residential mental health care facility in
Duval County. That was the Duval County Jail sadly.
Secretary Shulkin. Uh-huh.
Mr. Rutherford. And to go back to the other than honorable,
the expansion of mental health care services and others like
Hepatitis C and some other things. Can you talk a little bit
about how--I don't want to leave people with the impression
that folks with dishonorable discharges are actually going to--
Secretary Shulkin. Right.
Mr. Rutherford [continued]. --receive this service. Can you
talk a little bit about that?
Secretary Shulkin. Right. Yes. There is certainly a
difference with those that are dishonorably discharged. So they
committed a crime or had an ethical or moral act that led to
their discharge--
Mr. Rutherford. Right.
Secretary Shulkin [continued].--Versus those who were other
than honorably discharged. And when you take a look at the
other than honorably discharged, it often does trace back to
some type of behavioral or emotional problem, often caused by
their involvement in a conflict.
Mr. Rutherford. Uh-huh.
Secretary Shulkin. And so, you know, while that is a
determination made by the Department of Defense, not by VA, we
feel a responsibility at VA--
Mr. Rutherford. Right.
Secretary Shulkin [continued]. --to be able to care for
those servicemembers.
Mr. Rutherford. And ere go their discharge.
Secretary Shulkin. Exactly.
Mr. Rutherford. Mr. Chairman, I yield back. Thank you.
Mr. Roe. Thank you. Mr. Correa, you are recognized.
Mr. Correa. Mr. Chair Roe and Ranking Member Walz, thank
you very much for the hearing. And Secretary Shulkin, welcome.
Secretary Shulkin. Thank you.
Mr. Correa. You know, this Committee has been doing some
really good work lately on health care and VA's appeals
process. Yet as I was listening to my colleagues and your
responses, you know, I had to take a pause when we were talking
about the appeals process and how that would affect current
folks on the pipeline. You mentioned 2026. And then we talked
about your words health care system going through a lot of
rapid changes. Research budget cut. Best intentions. I don't
want to be here in five years and say, wow, this went wrong
with the system, these unintended consequences, we didn't
foresee them in 2017. So my question to you, sir, can we put a
system in place that gets input, feedback from our veterans,
something that is real-time? So as we are implementing all of
these systems we actually can figure were they are actually
working or not. I don't want to be here in 2026 and say the
backlog is still five years away from being addressed.
Secretary Shulkin. Yeah. We are, much like I just answered
before, to be a good, effective organization, we have to be
customer responsive. And that means that you had better be
getting that feedback. So we are--this is one of the changes in
VA. We are working much more to understand the veteran
experience and putting in real-time tools to solicit the
feedback.
I will tell you right now, though, that on the appeals
process: while we very, very much hope the Senate passes a bill
just like what you did yesterday, that will only fix it moving
forward. I do not have an answer that would prevent us from
being here five years from now still talking about the backlog.
This is something we have got to put our heads together on and
figure out a different approach to this problem.
Mr. Correa. Or that the backlog is actually increasing five
years from now.
Secretary Shulkin. Well, I don't think the backlog will
increase because of--that is, if the Senate passes the bill
that will allow us a process to make sure that it doesn't
increase. But we still have, in backlog, way too many claims
and appeals. And so that is something that we still have to
come up with a better answer on.
Mr. Correa. Thank you very much. Second question, sir,
Secretary, was it yesterday we had breakfast?
Secretary Shulkin. Yes.
Mr. Correa. Yes. We were talking about the veteran
cemeteries and I mentioned Orange County.
Secretary Shulkin. Yes.
Mr. Correa. Has your staff found--
Secretary Shulkin. Yes.
Mr. Correa [continued]. --out any information on the
Orange--
Secretary Shulkin. Yes.
Mr. Correa [continued]. --County veteran's cemetery?
Secretary Shulkin. Yes. The staff has said, after we have
gone back with the comments that their commitment is to have a
cemetery within 75 miles of where a veteran resides. And that
given where Orange County is, is that the two current national
cemeteries in Riverside and the other location, I don't know if
you--yeah. Go ahead.
Mr. Sullivan. We also have a cemetery in Miramar. So
Riverside actually encompasses all of the geographic location
of Orange County, as does Miramar in terms of the majority of
Orange County. We are also planning an expansion project at the
Los Angeles National Cemetery, which will construct a
columbaria only urban initiative cemetery there that will
enhance access to the residents of Orange County.
Secretary Shulkin. So--
Mr. Correa. Mr. Secretary--
Secretary Shulkin [continued]. So there is not a plan right
now.
Mr. Correa. I think we are miscommunicating somewhere and I
would like to follow up with you in discussions here. Because
Orange County veterans do, you know, have earned that right and
their families to visit their deceased ones in Orange County.
The difference is, as you know, 75 miles in a rural area is 75
miles. Ten miles in LA Orange County is a whole lot different.
Secretary Shulkin. Yeah.
Mr. Correa. But I know there has been discussion. I will
follow up with you to make sure.
Secretary Shulkin. Okay.
Mr. Correa. I know the governor was just out to visit a
site in Orange County, the City of Irvine, on this specific
issue--
Secretary Shulkin. Okay.
Mr. Correa [continued]. --less than two weeks ago. I
believe there may be some funding in the State budget for
matching or what have you. So there has been active--
Secretary Shulkin. Okay.
Mr. Correa [continued]. --movement in that direction. And I
just want to make sure we are all on the page. It sounds like--
Secretary Shulkin [continued]. Well, that's why I
appreciate you--
Mr. Correa. We are miscommunicating right now.
Secretary Shulkin. Right.
Mr. Correa. But we will get to the bottom of it.
Secretary Shulkin. Good. Thank you.
Mr. Correa. Thank you very much, Secretary. With that, Mr.
Chair, I yield the remainder of my time.
Mr. Roe. Thank you, gentleman, for yielding. Mr. Banks, you
are recognized.
Mr. Banks. Thank you, Mr. Chairman. And thank you,
Secretary Shulkin, for being here with us again today. I want
to return to a discussion that you already had with my
colleague Representative Coffman a little bit ago. The VA's
budget submission includes a $1.2 billion increase for funding
for medical facilities, including activation of new medical
facilities and non-recurring maintenance expenses. Could you
elaborate for a moment on how you arrived at that dollar
figure?
Secretary Shulkin. Yeah. The NRM funds, which are where we
see the 1.2 percent--I mean, 1.2 billion increase--are
essentially ten million dollar projects and less. We have a 17
billion dollar capital deficit in NRM funds. When we have gone
out and we have said, ``What would it take to get all of our
facilities up to speed and to where they need to be?''--it is
17 billion. The 1.2 billion increase, we think, is a, maybe not
enough, but a good reasonable start. And we appreciate that
increase from where we were last year because it is going to
make us--allow us the opportunity to prioritize those projects
and really move forward with them. They are not major
construction projects. These are replacing the roofs and the
HVAC systems and the medical equipment that is necessary.
Mr. Banks. We talked about this before, as well, with the
VA identifying 430 vacant buildings, 735 under-utilized
buildings, maintenance cost of $25 million a year for those
facilities. Can you maybe help the Committee identify
legislative remedies to help you navigate the politics--
Secretary Shulkin. Yeah.
Mr. Banks [continued]. --of dealing with that situation?
Secretary Shulkin. What we are doing right now, we are
following through on the Commission on Care Recommendations,
which really asked us to develop a plan on what to do with our
facilities. As you know, the Appropriations bill also requires
that VA develop a national realignment strategy. So, we are
coming up with essentially what we think from a business point
of view we should be doing to best use our resources to help
veterans. Then we are going to need to come to you and we are
going to need to work with you to find the best legislative way
to address supporting these under-utilized and vacant
buildings.
Mr. Banks. Thank you. I appreciate your attention to that.
And thank you very much. I yield back.
Mr. Roe. Okay. Thank you. Mr. Walz, you are recognized.
Mr. Walz. Well, thank you. And again, thank you, Mr.
Secretary. I am appreciative of it and I-- this holistic budget
approach. And I would be clear, from my perspective anyway, a
very bad budget. Looking at the VA, which is my responsibility,
it feels a little bit like me looking at a house that is on
fire and saying, well, the drapes are nice in it, even though
the rest of the house is on fire. So coming back though to what
you can control and what we have responsibility in here, I just
wanted to make note of this. Because the OIG is very near and
dear to my heart. The OIG, the way I understand it, was flat
funded for fiscal year 2017 at 159.6 million. Stopping their
three-year expansion plan, which was reflective of the growing
and sustained demand for oversight in the VA. Their requested
funding for fiscal year 2019 as part of that expansion plan was
197 million, which would have allowed their staffing levels to
get up to the number they were trying to reach for that plan.
Is that the way you understand it?
Secretary Shulkin. My understanding is their request for--
Mr. Missal made the request for additional FTEs in fiscal year
'16, was granted them, and his budget in '18 allows him to be
able to achieve those 120 FTE increase. '19, we don't have the
budget for yet.
Mr. Walz. Okay. So you are at this point not overly
concerned that we are going to have the IG. We have depended in
here on the--
Secretary Shulkin. Yes.
Mr. Walz [continued]. --on the IG extensively.
Secretary Shulkin. Yes.
Mr. Walz. Okay.
Secretary Shulkin. Yes. I think you are going to see the
expansion that he asked for and he can do that.
Mr. Walz. Very good. I am going to come back to Choice
again, because we are all going to come back to Choice again.
You said, Mr. Secretary, that more veterans are opting for
Choice. Are you tracking whether or not the veterans who use
Choice would prefer the VA or not? Because I don't have to
remind you, the VA has a choice, too. So you said you want to
give the customer choice. Are you cutting off that choice for
another choice? Are you tracking it to know what they are
saying?
Secretary Shulkin. First of all, when we give Choice, it
really is choice. The veteran can always choose to stay in the
VA. And, in fact, we want a system that they will choose to be
in the VA.
Mr. Walz. But they can stay at a later date. What I am
saying is if we plussed up the VA side and it was equal access
to what they are getting on the outside, would they choose the
VA over the outside if access times were equal?
Secretary Shulkin. Well, in fact, many, many veterans given
the option of Choice do choose to stay in the VA system. And we
are trying to beef up the VA system so that where we see long
wait times or services that aren't offered, we are trying to
build that up. But the best data that I know of on this is
still from the VFW and the VFW survey that asked this question.
Mr. Walz. Yeah.
Secretary Shulkin. And by far most veterans prefer and
choose the VA.
Mr. Walz. I am going to segue onto that. Keep in mind, and
again, we need to talk candidly amongst ourselves when we look
at voc rehab being cut 4.5, we see medical research being cut,
but we see care in the community without a plan being there
beefed up, it is a concern. And I quote from the VFW, ``very
concerned that the administration's request to make Choice a
permanent mandatory program could lead to a gradual erosion of
the VA health care system itself. What is more concerning is
that the administration has chosen to make permanent a flawed
program before the fix.'' That's coming from VFW. I believe I
have got Paralyzed Veterans. ``The recommendation begs a
question. Does this recommendation suggest Choice program as
currently designed should continue in perpetuity?'' So those
are the questions that are going to be out there. They're
asking that. So none of us here, me included, has ever said we
shouldn't use care in the community. We know and it has been
there. I think the concern, and I would characterize it to you
as this, it is concern because they are not sure what is
coming. Is that fair to you? I mean, are you hearing that?
Secretary Shulkin. Yeah. Look, VFW and all of our VSO
partners are so incredibly important and we work with them
always to understand their concerns and use their input. But,
look: here is the way I look at the budget. The amount of money
overall, 13.4 billion for community care, stays essentially
where it is. This is not a massive transfer from funds from the
VA into the community. This just, this funds and continues what
we have been doing in the Choice Program. The increase in the
budget that the President has proposed is actually increasing
discretionary funds in the VA. This allows us to continue to
build and strengthen the VA system.
Mr. Walz. Let's continue to talk to them about that. I am
going to end with an IT question. I quote from the President,
``I will create a private White House hotline for veterans
that's answered 24 hours a day. And no valid complaint will
fall through the cracks if it is not answered personally.''
What is the phone number?
Secretary Shulkin. Yeah. I don't have the phone number yet,
but let me give you an update on it. I just don't have the
phone number.
Mr. Walz. It comes out of your budget, am I right?
Secretary Shulkin. What?
Mr. Walz. In my time honored Minnesota passive
aggressiveness I ask that question. But in the real sight of
things this is a drain on your IT budget. Is it going to happen
or not?
Secretary Shulkin. It is going to happen because the
President has committed that it is going to happen. The full
system, the full White House hotline will be up towards the end
of the August. But we are going to be doing what I call a soft
launch June 1st, which is that calls will be sent from the
White House and answered as the White House hotline. But it is
going to take us until the end of August to get a contract in
place to be able to do this with professional call contract
centers. But June 1st you will see a soft launch of this.
Mr. Walz. And we will get a cost estimate by then?
Secretary Shulkin. You will get cost--we are very conscious
that we want to do this in a cost efficient way.
Mr. Walz. Right. Thank you. I yield back.
Mr. Roe. Thank you, gentleman, for yielding. Mrs. Gonzalez-
Colon, go on. You are recognized.
Ms. Gonzalez-Colon. Thank you, Mr. Chairman. And thank you,
Mr. Secretary, for yesterday's meeting and all your efforts.
Secretary Shulkin. Uh-huh.
Mr. Gonzalez-Colon. I saw the question by Mr. Banks about
the construction funds. And I see that budget does not include
a significant allocation for construction funds. And I see how
and why. You just explained that. And I understand the reasons
for that. However, there is only one VA hospital in our island,
as you may know, and one state home. And although we got some
satellite clinics we need to expand for better facilities for
our veterans. What may be your thoughts on that issue for our
island? What can we--what can be done in that matter?
Secretary Shulkin. In terms of infrastructure improvements?
Ms. Gonzalez-Colon. Yes.
Secretary Shulkin. Mark, does our budget yet indicate how
much money will be allocated to the VISN and to the facility?
Mr. Yow. Are we talking about specifically--
Secretary Shulkin. San Juan.
Mr. Yow [continued]. --infrastructure?
Secretary Shulkin. Yeah.
Mr. Yow. I would have to go back and look at the list. But
we have NRM projects across all of VISNs. So I imagine there
will be some. But we can get you a specific amount.
Ms. Gonzalez-Colon. Yeah.
Secretary Shulkin. Yeah. If you will let us follow up with
you on the specific projects, we would be glad to do that.
Ms. Gonzalez-Colon. Thank you. And one of the issues is a
mental health residential clinic. Right now we just got 30 beds
for mental health patients. As you may know we got more than
maybe 3,000 veterans in Puerto Rico. So it is--30 beds are not
enough. Mostly when we attend, not only Puerto Rican veterans,
but people coming from the US Virgin Islands. So it is more of
an issue for us. We just saw that according to the job
announcements issued by the VA, the salary of the specialists
of more than 100,000 to 300,000 in the cases of, you know,
specialists, neurologists, orthopedics, psychiatrists, and
other people that I needed in the VA hospital. We got a
shortage of medical specialists in the VA hospital in Puerto
Rico. That money has been allocated in the budget to hire those
positions in our hospital?
Secretary Shulkin. You are talking about money to hire the
needed positions or increased salaries?
Ms. Gonzalez-Colon. The money to hire those positions.
Secretary Shulkin. Yeah. I mean San Juan has a budget that
will be negotiated with the VISN. I mean, Mark, do you know--we
can--we would be glad to sit down with you and review with you
the San Juan budget. But I don't think we have that information
here, do we?
Mr. Yow. I don't have it here. But it is largely driven by
the amount--
Ms. Gonzalez-Colon. We can coordinate that later on then.
Secretary Shulkin. Yeah.
Ms. Gonzalez-Colon. Because I need--I know that the
shortage of those medical specialists it is a situation that is
going worse and worse. Not only in San Juan, in satellite
clinics and other issues. And with that I yield back my time.
Thank you, Mr. Chairman.
Mr. Roe. Thank you, gentlelady, for yielding. First of all
I want to thank you all for being here today. It has been
great. I was just looking at how many Members participated.
There were multiple meetings across the campus today. And it
shows you the interest in the VA. And I will now ask unanimous
consent that all Members have five legislative days to revise
and extend their remarks and include extraneous material.
Without objection so ordered. And, Mr. Walz, do you have any
closing comments?
Mr. Walz. Well, thank you, Mr. Chairman. Mr. Secretary,
thank you. As always, you have done nothing other than gain the
trust of this Committee. You have done nothing except serve
veterans. You have done nothing but come to this Committee
since your time here with solution based problem solving in an
honorable way. So our pledge to you is to work and do
everything we can to make sure you have the resources and the
authority to serve our veterans. So I thank you for that.
Secretary Shulkin. Thank you.
Mr. Roe. And I will associate my remarks with Mr. Walz. And
also mention that we have had a lot of--we just got the budget
yesterday and obviously we--it is going to take us some time,
both sides of the aisle to go through this. So we will--
probably both sides will be submitting some questions to you
all that we didn't have time to get to today. And we would
appreciate as quick a turnaround as we could get.
And just to make sure that our viewing audience and our
VSOs and so forth and our veterans out there as we approach
this Memorial Day understand, there is a commitment on the
administration's part to grow--the VA and health care providers
are growing. This budget grows the number of health care
providers, not shrinks them. So I think that from what I have
looked right here and from what I have seen at a preliminary
blush it certainly does that and supports the VA's primary
mission, which is to take care of our veterans.
I once again want to thank all of you all. You were very
open, Mr. Secretary, with having the whole Committee over at
your shop yesterday. And I would like to take this opportunity
to wish both the Committee and everyone and the veterans out
there a happy Memorial Day.
Secretary Shulkin. Thank you.
Mr. Roe. This meeting is adjourned. I lost my gavel here.

[Whereupon, at 3:35 p.m., the Subcommittee was adjourned.]

A P P E N D I X

----------

Prepared Statement of Honorable David J. Shulkin, M.D.
Good morning, Chairman Roe, Ranking Member Walz, and Distinguished
Members of the House Committee on Veterans' Affairs. Thank you for the
opportunity to testify today in support of the President's 2018 Budget
and 2019 Advance Appropriation (AA) Request and to define my priorities
to continue the dynamic transformation within the Department of
Veterans Affairs (VA). I am accompanied today by Edward Murray, Acting
Assistant Secretary for Management and Acting Chief Financial Officer;
Rob Thomas, Acting Assistant Secretary for Information and Technology
and Acting Chief Information Officer; Mark Yow, Chief Financial Officer
for the Veterans Health Administration; James Manker, Acting Principal
Deputy Under Secretary for Benefits in the Veterans Benefits
Administration; and Matthew Sullivan, Deputy Under Secretary for
Finance and Planning for the National Cemetery Administration. I also
want to thank Congress for providing the Department its full 2017
budget prior to the start of the Fiscal Year - this is significant and
has been extremely beneficial to our ability to provide services and
care to Veterans. The 2018 budget request fulfills the President's
strong commitment to all of our Nation's Veterans by providing the
resources necessary for improving the care and support our Veterans
have earned through sacrifice and service to our country.
Fiscal Year (FY) 2018 Budget Request
The President's 2018 budget requests $186.5 billion for VA--$82.1
billion in discretionary funding (including medical care collections),
of which $66.4 billion was previously provided as the 2018 AA for
Medical Care. The discretionary request is an increase of $4.3 billion,
or 5.5 percent, over 2017. It will improve patient access and
timeliness of medical care services for over 9 million enrolled
Veterans, while improving benefits delivery for our Veterans and their
beneficiaries. The President's 2018 budget also requests $104.3 billion
in mandatory funding, of which $103.9 billion was previously provided,
such as disability compensation and pensions, and for continuation of
the Veterans Choice Program (Choice Program).
For the 2019 AA, the budget requests $70.7 billion in discretionary
funding for Medical Care and $107.7 billion in in 2019 mandatory
advance appropriations for Compensation and Pensions, Readjustment
Benefits, and Veterans Insurance and Indemnities benefits programs in
the Veterans Benefits Administration. The budget also requests $3.5
billion in mandatory budget authority in 2019 for the Choice Program.
This budget request will ensure the Nation's Veterans receive high-
quality health care and timely access to benefits and services. I urge
Congress to support and fully fund our 2018 and 2019 AA budget requests
- these resources are critical to enabling the Department to meet the
increasing needs of our Veterans.
Modernizing VA
As you all know, I was part of the VA team for the last year and a
half prior to being confirmed as the Secretary of Veterans Affairs. I
came to VA during a time of crisis, when it was clear Veterans were not
getting the timely access to high-quality health care they deserved. I
soon discovered that years of ineffective systems and deficiencies in
workplace culture led to these problems. I know that the organization
has made significant progress in improving care and services to
Veterans. But I also know that VA needs more changes to the way we do
business for Veterans and the country as a whole, in order for all to
say, ``That is a different organization now.'' VA needs to continue to
fix numerous areas of the business, including access, claims and
appeals processing, and many of our core functions, to ensure that the
basics are done correctly. Beyond that, VA has to deliver to Veterans
revolutionary leaps in care, benefits, and services. Congress, along
with our VA employees, Veterans Service Organizations (VSO), and
private industry, will play a critical role in making those
revolutionary leaps a reality.

Focus on Execution

Above all else, VA needs to perform its core functions well. When
Veterans arrive at a VA facility for care, they must be treated with
respect, see a clean and modern facility, be seen by their provider on
time, and understand what the next steps for their care will be.
Veterans should be able to receive clear and accurate information about
their claims and understand where they are in the process. We must
ensure that this is every Veteran's experience every time they interact
with VA. Where we fall short, we will hold employees accountable,
ensure we are good stewards of the taxpayer dollar, and ask for
Congress's support for legislative fixes where needed.

Make Bold Change

We know it is paramount that we increase our focus and intensify
the efforts to improve how we execute our mission - Veterans should and
do expect that from us. We also recognize that incremental change is
not sufficient to achieve the additional improvements VA and Veterans
need and demand for restoring the trust of Veterans and the American
public.
As I have noted, VA is a unique national resource that is worth
saving, and I am committed to doing just that. Veterans have unique
needs, and the services VA provides to Veterans often cannot be found
in the private sector. The Veterans Health Administration (VHA)
provides support to Veterans through primary care, specialty care, peer
support, crisis lines, transportation, the Caregivers program,
homelessness services, vocational support, behavioral health
integration, medication support, and a VA-wide electronic medical
record system. These services and supports are unparalleled. We also
know that VA hospitals perform well on quality compared to non-VA
hospitals. In a study published in the Journal of American Medical
Association (JAMA) Internal Medicine in April, researchers compared
hospital-level quality data on 129 VA hospitals and 4,010 non-VA
hospitals obtained through the Centers for Medicare and Medicaid's
website. They found VA hospitals had better outcomes than non-VA
hospitals on six of nine patient safety indicators, and there were no
significant differences on the other three indicators. VA hospitals
also had better mortality and readmission rates than non-VA hospitals.
With the continued support of Congress, VA will supplement its services
through private-sector health care, but we realize it is not a
replacement for the services VA provides to Veterans.
We are already implementing bold changes in the agency. We are
working hard to ensure employees are held accountable to the highest of
standards and working with Congress to provide us with greater
authority and flexibility to do that. We are also working with Congress
on appeals reform and on a long-term solution for providing greater
community care options. I will discuss these efforts in greater detail
below.
Five Priorities
As I prepared for my confirmation hearing earlier this year, I
identified my top priorities to address as Secretary. These areas have
shaped the first several months of my tenure and provide focus for our
attention and resources, and the foundation for rebuilding trust with
our Veterans. We will also use the budgeting process to support our
strategy by shifting resources toward our ``foundational services''
that make VA unique while maintaining support to our strategic
priorities.

Priority 1: Greater Choice for Veterans

The Choice Program is a critical program that has increased access
to care for millions of Veterans. Coming into this new administration,
extending the Choice Program was one of my top priorities for quick
action, as VA anticipated that based on Veteran program participation,
there would be an estimated $1.1 billion in unobligated funds left on
the original expiration date of August 7, 2017. On April 19, 2017, the
President signed into law the Veterans Choice Program Improvement Act
(Public Law 115-26), allowing the Choice Program to continue until the
Veterans Choice Fund is exhausted. Without this legislation, VA would
have been unable to use funding specifically appropriated for the
Choice Program by Congress, so we commend Congress for passing this
legislation swiftly and in a bipartisan manner. This legislation also
provides VA and Congress more time to develop a long-term solution for
community care.
Since the start of the Choice Program, over 1.6 million Veterans
have received care through the program. In FY 2015, VA issued more than
380,000 authorizations to Veterans through the Choice Program. In FY
2016, VA issued more than 2,000,000 authorizations to Veterans to
receive care through the Choice Program, more than a fivefold increase
in the number of authorizations from 2015 to 2016.
Looking at early data for 2017, it is expected that Veterans will
benefit even more this year than last year from the Choice Program. In
the first quarter of FY 2017, we have seen a more than 30 percent
increase from the same period in FY 2016 in terms of the number of
Choice authorizations. In addition to increasing the number of Veterans
accessing care through the Choice Program, VA is working to increase
the number of community providers available through the program. In
April 2015, the Choice Program network included approximately 200,000
providers and facilities. As of March 2017, the Choice Program network
has grown to over 430,000 providers and facilities, a more than 150
percent increase during this time period.
As these numbers demonstrate, demand for community care is high. In
2018, VA plans to spend a total of $13.2 billion to support community
care for Veterans. Community care will be funded by a discretionary
appropriation of $9.4 billion for the Medical Community Care account
($254 million above the enacted advance appropriation), plus $2.9
billion in new mandatory budget authority for the Choice Program. This,
combined with an estimated $626 million in carryover balances in the
Veterans Choice Fund, provides a total of $13.2 billion in 2018 for
community care.
VA will continue to partner with Congress to develop a community
care program that addresses the challenges we face in achieving our
common goal of providing the best health care and benefits we can for
our Veterans. We have also worked with and received crucial input from
Veterans, community providers, VSOs, and other stakeholders in the
past, and we will continue doing so going forward. However, we do need
your help.
One such area is in modernizing and consolidating community care.
Veterans deserve better, and now is the time to get this right. We are
committed to moving care into the community where it makes sense for
the Veteran. The ultimate judge of our success will be our Veterans,
and our only measure of success will be our Veterans' satisfaction.
With your help, we can continue to improve Veterans' care in both VA
and the community.

Empower Veterans through Transparency of Information

We are also increasing transparency and empowering Veterans to make
more informed decisions about their health care through our new Access
and Quality Tool (available at www.accesstocare.va.gov). This Tool
allows Veterans to access the most transparent and easy to understand
wait-time and quality-care measures across the health care industry.
That means Veterans can quickly and easily compare access and quality
measures across VA facilities and make informed choices about where,
when, and how they receive their health care. Further, they will now be
able to compare the quality of VA medical centers to local private
sector hospitals. This Tool will take complex data and make it
transparent to Veterans. This new Tool will continue to improve as we
receive feedback from Veterans, employees, VSOs, Congress, and the
media.

Priority 2: Modernizing our System

Infrastructure Improvements and Streamlining

In 2018, VA will focus on fixing VA's infrastructure while we
transform our health care system to an integrated network to serve
Veterans. This budget requests $512.4 million in Major Construction
funding as well as $342.6 million in Minor Construction for priority
infrastructure projects. This funding supports projects including a new
outpatient clinic in Livermore, CA, as well as gravesite expansions in
Sacramento, CA; Bushnell, FL; Elwood, IL; Calverton, NY; Phoenix, AZ;
and Bridgeville, PA. VA is also requesting $953.8 million to fund more
than 2,000 medical leases in FY 2018, an increase of $141.9 million
over the FY 2018 AA, and $862 million for activation of new medical
facilities. In 2018, VA is seeking Congressional authorization of 27
major medical leases. The majority of these leases have been included
in previous budget requests, some dating back to the FY 2015 budget
submission. These major medical leases are vital to establish new
points of care, expand sites of care, replace expiring leases, and
expand VA's research capabilities.
The 2018 budget submission includes proposed legislative requests
that if enacted, would increase the Department's flexibility to meet
its capital needs. These proposals include: 1) increasing from $10
million to $20 million the dollar threshold for minor construction
projects; 2) modifying title 38 to eliminate statutory impediments to
acquiring joint facility projects with DoD and other Federal agencies;
and 3) expanding VA's enhanced use lease (EUL) authority to give VA
more opportunities to engage the private sector and local governments
to repurpose underutilized VA property.
The Department is also a key participant in the White House
Infrastructure Initiative to explore additional ways to modernize and
obtain needed upgrades to VA's real property portfolio to support our
continued delivery of quality care and services to our Nation's
Veterans. We are excited about the opportunity to transform the way we
approach our infrastructure.

Electronic Health Record Interoperability and IT Modernization

The 2018 Budget continues VA's investment in technology to improve
the lives of Veterans. The planned IT investments prioritize the
development of replacements for specific mission critical legacy
systems, as well as operations and maintenance of all VA IT
infrastructures essential to deliver medical care and benefits to
Veterans. The request includes $358.5 million for new development to
replace four specific mission critical legacy systems, including the
Financial Management System, and establish an Integrated Project Team
to develop the requirements and acquisition strategy for a new
enterprise health information platform. It also invests $340 million
for information security to protect Veterans' information and improve
VA's information networks' resilience.
The 2018 budget submission includes a proposed legislative request
that if enacted, would increase the Departments ability to apply agile
program management to the dynamics of modern Information Technology
development requirements. To do this, the Department recommends
advancing the transfer threshold from $1 million to $3 million between
development project lines, which equates to less than 1 percent of the
Development account. Through the Certification process, Congress will
maintain visibility of proposed changes.
VA recognizes that a Veteran's complete health history is critical
to providing seamless, high-quality, integrated care, and benefits.
Interoperability is the foundation of this capability, by making
relevant clinical data available at the point of care and enabling
clinicians to provide Veterans with prompt, effective care. Today, VHA,
the Veterans Benefits Administration (VBA), and the Department of
Defense (DoD) share more medical information than any public or private
health care organization in the country. We have developed and
deployed, in close collaboration with DoD, the Joint Legacy Viewer
(JLV). JLV is available to all clinicians in every VA facility. It is a
web-based user interface that provides clinicians with an intuitive
display of DoD and VA health care data on a single screen. VA and DoD
clinicians can use JLV to access the health records of Veterans, Active
Duty, and Reserve Servicemembers from all VA, DoD, and any third party
community providers who participate in Health Information Exchanges
where a patient has received care. Multiple releases of Community Care
applications, including JLV-Community Viewer, Community Provider
Portal, and Virtru Pro Secure Email have enhanced care coordination
with Community Providers through multiple methods of exchanging health
records and multiple modes of communication improving the care the
Veteran receives and allowing Community Providers not in Health
Information Exchanges the ability to share medical documentation.
VA will complete the next iteration of the VistA Evolution Program,
VistA 4, in 2018. VistA 4 will bring improvements in efficiency and
interoperability, and will continue VistA's award-winning legacy of
providing a safe, efficient health care platform for providers and
Veterans. VistA Evolution funds have enabled investments in systems and
infrastructure that support interoperability, networking and
infrastructure sustainment, continuation of legacy systems, and efforts
such as clinical terminology standardization. These investments are
critical to the maintenance and deployment of the existing and future
modernized VistA and essential to operational capability. Whether the
path forward is to continue with VistA, shift to a commercial
electronic health record (EHR) platform, or some combination of both,
these investments will deliver value for Veterans and VA providers.
We are considering all options from adopting a commercial off the
shelf (COTS) EHR to retaining an enhanced and standardized VistA. A
decision will be made in July 2017, when the reviews are complete and
all the pertinent information is available. The goal is to make a
decision that will best serve Veterans' needs.
One critical system that will touch the delivery of all health and
benefits is our new financial management system, which is under
development. The 2018 budget continues modernizing our financial
management system by transforming the Department from numerous
stovepipe legacy systems to a proven, flexible, shared service business
transaction environment. The budget requests $83 million in Information
Technology funds and $61.6 million for business process re-engineering
to support Financial Management Business Transformation (FMBT) across
the Department.

Priority 3: Focus Resources More Efficiently

Strengthening of Foundational Services in VA

VA is committed to providing the best access to care for Veterans.
To deliver the full care spectrum as defined in VA's medical benefits
package, VA will focus on its foundational services-those areas in
which it can excel-and build community partnerships for complementary
services. VA developed the following guiding principles, centered on
improving the health, well-being, and experience of Veterans receiving
care from VA and in the community. These principles include:

Enabling VA to provide access to high-quality care for
Veterans, by balancing services provided by VA and the community given
changing demands for care and resource limitations;
Promoting operational efficiency and simplicity, while
supporting VA's clinical care, education, and research missions; and
Allowing facilities to meet the changing needs of
Veterans in a flexible way.

High-performing organizations cannot excel at every capability and
thus must make decisions about how best to invest its resources. VA
will therefore further define and grow its foundational services to
excel in the provision of clinical care to Veterans.
Investing in foundational services within the Department is not
limited to only health care. For over a decade, VA's National Cemetery
Administration (NCA) has achieved the highest customer satisfaction
rating of any organization - public or private - in the country. They
achieved this designation through the American Customer Satisfaction
Index six consecutive times. The President's 2018 Budget recognizes the
need to nurture and advance this unprecedented success with a request
for $306.2 million for NCA in 2018, an increase of $20 million (7
percent) over 2017. This request will support the 1,881 FTE needed to
meet NCA's increasing workload and expansion of services. In 2018, NCA
will inter approximately 133,600 Veterans and eligible family members,
care for over 3.7 million gravesites, and maintain 9,400 acres. NCA
will continue to memorialize Veterans by providing 366,000 headstones
and markers, distributing 702,000 Presidential Memorial Certificates
and expanding the Veterans Legacy program to communities across the
country. VA is committed to investing in NCA infrastructure,
particularly to keep existing national cemeteries open and to construct
new cemeteries consistent with burial policies approved by Congress. In
addition to NCA's funding, the 2018 request includes $255.9 million in
major construction funds for six gravesite expansion projects. When all
new cemeteries are opened, nearly 95 percent of the total Veteran
population - about 20 million Veterans - will have access to a burial
option in a Veterans' cemetery within 75 miles of their home.

VA/DoD/Federal Coordination

VA has proposed legislation to eliminate certain statutory
impediments to VA more effectively pursuing joint projects with other
Federal agencies, including DoD. Today, medical facilities that are not
specifically under the jurisdiction of the Secretary require specific
statutory authorization for optimal collaboration. I look forward to
working with Congress to: (1) enhance our ability to coordinate with
DoD and other Federal agencies; (2) improve the access, quality, and
cost effectiveness of direct health care provided to Veterans,
Servicemembers, and their beneficiaries; (3) permit joint capital asset
planning and capital investments to design, construct, and utilize
shared medical facilities; and (4) provide authority for VA to procure
the use of joint medical facilities for itself and other Federal
agencies like DoD, and to transfer funds between VA and other Federal
agencies for such initiatives.

Deliver on Accountability and Effective Management Practices

Another critical area in which VA is serious about making
significant changes relates to employee accountability. The vast
majority of employees are dedicated to providing Veterans the care they
have earned and deserve. It is unfortunate that certain employees have
tarnished the reputation of VA and so many who have dedicated their
lives to serving our Nation's Veterans. We will not tolerate employees
who deviate from VA's I-CARE values and underlying responsibility to
provide the best level of care and services to them. We support
Congress' ongoing efforts to provide VA with the tools it needs to take
timely action against employees who perform poorly or engage in
misconduct. Where employees engage in inappropriate behavior, do not
perform the duties of their job, are engaged in illegal activities, or
otherwise do not meet the standards we expect of VA employees, we want
the ability to ensure they can be promptly removed. Certain laws hamper
our ability to optimally hold our employees accountable and remove
those individuals that run afoul of my intent for the Department to
function as a high-performing organization. We support legislation that
is consistent with the following principles:

Increase flexibility to remove, demote, or suspend VA
employees for poor performance or misconduct;
Provide authority to recoup bonuses of employees for poor
performance or misconduct;
Enable recovery of relocation expenses that occur through
fraud or malfeasance; and
Ensure that VA has the ability to retain high performers
by paying them a salary that is competitive with the private sector and
performance awards that are commensurate with other federal agencies.

We thank the House for passing critical accountability legislation
- but while that process continues, we are also focused on updating
internal hiring practices. VHA is the largest health care system in the
United States, and in an industry where there is a national shortage of
health care providers, VHA faces competition with the commercial sector
for scarce resources. Historically, VA has followed hiring practices
that have proven unduly burdensome. Over the past year, VHA's business
process improvement efforts have resulted in a more efficient hiring
process. We were able to reduce the time it took to hire Medical Center
Directors by 40 percent and obtained approval from the Office of
Personnel Management (OPM) for critical position pay authority for many
of our senior health care leaders. We recognize there is much work left
to do. As we strive to find internal solutions, we look forward to
working together on legislation to reform recruitment and compensation
practices to stay competitive with the private sector and other
employers.
To ensure that VA's management practices are effective, I have
announced a major initiative to improve our ability to detect and
prevent fraud, waste, and abuse within VA. The initiative includes:

forming a fraud, waste, and abuse advisory committee
comprised of experts from the private sector and other government
organizations;
identifying cutting edge tools and technologies available
in the private sector; and
coordinating all fraud, waste, and abuse detection and
reporting activities through a single office.

With these improvements, VA has the potential to save millions of
taxpayer dollars and more effectively serve America's Veterans. I look
forward to updating you in the future regarding this initiative.

Priority 4: Improve Timeliness of Services

Access to Care and Wait Times

VA is committed to delivering timely and high quality health care
to our Nation's Veterans. Veterans now have same-day services for
primary care and mental health care at all VA medical centers across
our system. I am also committed to ensuring that any Veteran who
requires urgent care will receive timely care.
In March 2017, 96.82 percent of appointments, 5.15 million
appointments, were completed within 30 days of the clinically-indicated
or veteran's-preferred date, and as of April 15, 2017, VHA has reduced
and the Electronic Wait List from 56,271 entries to 22,383 entries, a
60.2 percent reduction between June 2014 and April 2017. The Electronic
Wait List reflects the total number of all patients for whom
appointments cannot be scheduled in 90 days or less.
In 2018, VA will expand Veteran access to medical care by
increasing medical and clinical staff, improving its facilities, and
expanding care provided in the community. The 2018 Budget requests a
total of $75.2 billion in funding for Veterans' medical care, which
includes the following:

$69.0 billion in discretionary budget authority ($2.65
billion above the 2018 AA enacted level of $66.4 billion and a $4.6
billion (7.1 percent) increase over the 2017 enacted level);
$2.9 billion in mandatory budget authority to continue
the Veterans Choice Program; and
$3.3 billion in medical care collections.

The 2018 request will support nearly 315,000 medical care staff, an
increase of over 7,000 above the 2017 level.

Through the Choice Program, VHA and its contractors created more
than 3.6 million authorizations for Veterans to receive care in the
private sector from February 1, 2016 through January 31, 2017. This
represents a 23 percent increase in authorizations when compared to the
period February 1, 2015 through January 31, 2016. When looking at
overall appointment data not specific to the Choice Program, the March
15, 2017, pending appointment data set shows VA has increased the
number of overall pending appointments ``in house'' by nearly 1.8
million over the same data the prior year. According to the same data,
the number of appointments scheduled greater than 30 days from the
Veterans clinically indicated data or preferred date has decreased by
3.9 percent (19,645) since the beginning of FY 2017.

Accelerating Performance on Disability Claims

Since 2013, VA has made remarkable progress toward reducing the
backlog of disability compensation claims pending over 125 days and is
working to use more effectively the resources provided by Congress.
VBA's 2018 budget request of $2.8 billion allows VBA to maintain the
improvements made in claims processing over the past several years.
This budget supports the disability compensation benefits program for
4.6 million Veterans and 420,000 Survivors. VBA implemented new
professional standards for Veterans Service Representatives (VSR) on
March 1, 2017. In May 2016, VBA implemented the National Work Queue
(NWQ) process. This allows VBA to prioritize and quickly distribute
disability compensation claims according to processing capacity within
VBA's regional footprint, regardless of the Veteran's place of
residence. The NWQ process enables VA to more effectively balance the
workloads nationally, relative to the productive capacity at each
regional office. This means that Veterans who live in a location where
claims decisions take longer, VBA can appropriately adjust capacity to
match the changes in claims volume. In FY 2017, VBA added non-rating
related claims to the NWQ. VBA has completed nearly 1.7 million non-
rating claims from October 2016 through the end of April 2017. The
effort to address non-rating claims has resulted in a 269,000 claim
reduction in the dependency claims inventory since August 2015, from
359,000 to less than 90,000.
To continue improving disability compensation claim processing, VBA
is currently piloting an initiative called Decision Ready Claims (DRC).
The DRC initiative offers veterans and survivors faster claims
decisions in which VSOs and other accredited representatives assist
Veterans with ensuring all supporting medical evidence is included with
the claim at the time of submission. The DRC initiative empowers
Veterans by allowing them to receive medical examinations as early as
possible in the claims process. This initiative also enhances
partnerships with VSOs by improving access and capabilities to assist
with gathering all required evidence and information to accelerate
claims decisions. Submission of claims submitted through the DRC
process will result in claim decisions within 30 days of submission to
VA.

Decisions on Appeals

The current VA appeals process undoubtedly needs further
improvements for our Nation's Veterans. As of April 30, 2017, VA had
470,546 pending appeals. The average processing time for all appeals
resolved by VA in FY 2016 was approximately 3 years. For those appeals
that were decided by the Board of Veterans' Appeals (the Board) in FY
2016, on average, Veterans waited at least 6 years from filing their
Notice of Disagreement until the Board's decision was issued that year.
The 2018 request of $155.6 million for the Board continues the
funding level enacted for 2017, which was a 42 percent increase over
2016. In combination with carryover resources from 2017, the requested
funding will support a total of 1,050 FTE, an increase of 164 FTE above
the 2017 estimate of 886 FTE. This request maintains the increased
budgetary authority the Board received in 2017. In addition, VBA's
request of $185 million for appeals processing maintains its current
level of appeals FTE at 1,495. This funding level in tandem with
sweeping legislative reform initiates a long-term strategy aimed at
improving the timeliness of appeals for Veterans and is the best policy
option for taxpayers.
Without significant legislative reform to modernize the appeals
process, Veteran wait times and the cost to taxpayers will only
increase. Comprehensive legislative reform is necessary to replace the
current lengthy, complex, confusing VA appeals process with a new
process that makes sense for Veterans, their advocates, VA, and other
stakeholders. This reform is crucial to enable VA to provide the best
service to Veterans and is one of my top priorities.
VA worked collaboratively with VSOs and other stakeholders to
design this new process for Veterans who disagree with a VA decision.
The result of that work was a legislative proposal that was introduced
in the 114th Congress and has been reintroduced in the 115th Congress.
The proposed process: (1) establishes multiple options for Veterans
instead of the single option available today; (2) provides early
resolution of disagreements and improved notice as to which option
might be best; (3) eliminates the inefficient churning of appeals that
is inherent in the current process; (4) features quality feedback loops
to VBA; and (5) improves transparency by clearly defining VBA as the
claims agency and the Board as the appeals agency in VA. This clear
definition between VBA and the Board also provides workload
transparency for better workload/resource projections, and efficient
use of resources for long-term savings.
The new process, described in the legislation currently pending,
will provide a modernized process going forward. However, VA is also
committed to concurrently reducing the pending inventory of legacy
appeals. VA has worked collaboratively with stakeholders to identify
opt-ins that would make the new process available to Veterans who would
otherwise have an appeal in the legacy process. After assessing these
various options, and collaborating with our partners, we have
identified two opt-ins that we intend to implement to address the issue
of the legacy appeals inventory.
The legislation must be enacted now to fix this process. It has
wide stakeholder support and the longer we wait to enact this
legislative reform, the more appeals enter the current, broken system.
The status quo is not acceptable for our Nation's Veterans. The new
process will provide much needed comprehensive reform to modernize the
VA appeals process and provide Veterans a decision on their appeal that
is timely, transparent, and fair.

Priority 5: Suicide Prevention - Eliminating Veteran Suicide

Every suicide is tragic, and regardless of the numbers or rates,
one Veteran suicide is too many. Suicide prevention is VA's highest
clinical priority, and we continue to spread the word throughout VA
that ``Suicide Prevention is Everyone's Business.'' The 2018 Budget
requests $8.4 billion for Veterans' mental health services, an increase
of 6 percent above the 2017 level. It also includes $186.1 million for
suicide prevention outreach. VA recognizes that Veterans are at an
increased risk for suicide and implemented a national suicide
prevention strategy to address this crisis. VA is bringing the best
minds in the public and private sectors together to determine the next
steps in implementing the Eliminating Veteran Suicide Initiative. VA's
suicide prevention program is based on a public health approach that is
ongoing, utilizing universal, selective, indicated strategies while
recognizing that suicide prevention requires ready access to high
quality mental health services, supplemented by programs that address
the risk for suicide directly. VA's strategy for suicide prevention
requires ready access to high quality mental health (and other health
care) services supplemented by programs designed to help individuals
and families engage in care and to address suicide prevention in high-
risk patients.
As part of VA's commitment to put forth resources, services, and
technology to reduce Veteran suicide, VA initiated the Recovery
Engagement and Coordination for Health Veterans Enhanced Treatment
(REACH VET). This new program was launched by VA in November 2016 and
was fully implemented in February 2017. REACH VET uses a new predictive
model in order to analyze existing data from Veterans' health records
to identify those who are at a statistically elevated risk for suicide,
hospitalization, illnesses, and other adverse outcomes. Not all
Veterans who are identified have experienced suicidal ideation or
behavior. However, REACH VET allows VA to provide support and pre-
emptive enhanced care in order to lessen the likelihood that the
challenges these Veterans face will become a crisis.

Other than Honorable Expansion

We know that 14 of the 20 Veterans who on average commit suicide
each day did not, for various reasons, receive care within VA. Our goal
is to more effectively promote and provide care and assistance to such
individuals to the maximum extent authorized by law. In that regard, VA
intends to expand access to emergent mental health care for former
Servicemembers, who separated from active duty with other than
honorable (OTH) administrative discharges. This initiative specifically
focuses on expanding access to former Servicemembers with OTH
administrative discharges who are in mental health distress and may be
at risk for suicide or other adverse behaviors. VA estimates there are
more than 500,000 former Servicemembers with OTH administrative
discharges. As part of this initiative, former Servicemembers with OTH
administrative discharges who present to VA seeking mental health care
in emergency circumstances for a condition the former Servicemember
asserts is related to military service would be eligible for evaluation
and treatment for their mental health condition. Such individuals may
access the system for emergency mental health services by visiting a VA
emergency room, outpatient clinic, Vet Center, or by calling the
Veterans Crisis Line. Services may include: medication management/
pharmacotherapy, lab work, case management, psycho-education, and
psychotherapy. We intend to carry this initiative out within our
existing resources because it is the right thing to do for Veterans.

Closing

Thank you for the opportunity to appear before you today to address
our 2018 budget and 2019 Advance Appropriations budget requests and to
provide you with the priorities that I am taking to ensure VA is viewed
with pride from Veterans and beneficiaries for the services provided to
them. I ask for your steadfast support in funding our full FY 2018 and
FY 2019 AA budget requests and continued partnership in making bold
changes to improve our ability to serve Veterans. I look forward to
your questions.

Statements For The Record

THE AMERICAN LEGION
MATTHEW J. SHUMAN, DIRECTOR
Chairman Roe, Ranking Member Walz, and Members of the Committee; On
behalf of Charles E. Schmidt, the National Commander of the largest
Veteran Service Organization in the United States of America
representing more than 2.2 million members; we welcome this opportunity
to comment on the federal budget and specific funding programs of the
Department of Veterans Affairs (VA).
The American Legion is a resolution based organization. We are
directed and driven by the millions of active Legionnaires who have
dedicated their money, time, and resources to the continued service of
veterans and their families. Our positions are guided by nearly 100
years of advocacy and resolutions that originate at the grassroots
level of the organization - the local American Legion posts and
veterans in every congressional district of America. The Headquarters
staff of the Legion works daily on behalf of veterans, military
personnel, and our communities through roughly 20 national programs and
hundreds of outreach programs led by our posts across the country.
As the Department of Veterans Affairs moves forward to serve the
veterans of this nation, it is important that the Secretary have the
tools and resources necessary to ensure that veterans served by VA
receive the services they are entitled to in a timely, professional,
and courteous manner - because they have earned it. During the past two
years, VA has grown in resources and services as was necessary to
backfill gaps in funding based on the patient population VHA is
required to serve. The American Legion calls on this Congress to ensure
that funding is maintained and increased as necessary to ensure the VA
is preserved and enhanced to serve the veterans of the 21st century,
and beyond.
Sustainability, accountability, information technology (IT)
integration and updates, facilities repair, construction, staff
recruiting, and of course, health care are paramount programs that need
to be immediately addressed and funded, and The American Legion has
testified on the need for increased funding for each of these programs
within the past several months alone.
Ensuring Proper VA Staffing
Unfortunately, there are no easy solutions for VHA when it comes to
effectively and efficiently recruiting and retaining staff at VA
healthcare facilities, but that doesn't necessarily mean that throwing
additional funding at the problem is the answer. The American Legion
believes that access to basic health care services offered by qualified
primary care providers should be available locally, and by a VA health
care professional as often as possible at all times.
While the VA's Academic Residency Program has made significant
contributions in training VA health care professionals, upon
graduation, many of these health care professionals choose a career
outside the VA health care system. The VA will never be in a position
to compete with the private sector. To this end, The American Legion
feels strongly that VA should begin looking into establishing its own
VA Health Professional University and begin training their medical
health care professionals to serve as a supplement to VA's current
medical residency program. \1\ Conceivably, medical students accepted
into VA's Health Professional University would have their tuition paid
in full by VA and upon graduation, the graduate would be required to
accept an appointment at a federal health facility at a starting salary
comparable to what a new medical graduate would be paid by VA based on
their experience and specialty. Similar to a military service academy,
a VA medical school will be highly selective, competitive, and well
respected. Applicants can be nominated by their congressional
representative, teaching staff can be sourced organically as well as
nationally, and real estate is plentiful. This will help ensure the VA
will have an adequate number of healthcare professionals to meet the
growing number of veterans and their healthcare needs.
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\1\ American Legion Resolution No. 377: Support for Veteran Quality
of Life: (Sept. 2016)
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The American Legion understands that filling highly skilled
vacancies at premiere VA hospitals around the country is challenging.
VA has a variety of creative solutions available to them without the
need for additional legislative action. One such idea could involve the
creation of a medical school; another would be to aggressively seek out
public-private partnerships with all local area hospitals. VA could
expand both footprint market penetration by renting space in existing
hospitals where they would also be able to leverage existing resources
and foster comprehensive partnerships with the community. Finally, VA
could research the feasibility of incentivizing recruitment at level 3
hospitals by orchestrating a skills sharing program that might entice
physicians to work at level 3 facilities if they were eligible to
engage in a program where they could train at a level 1 facility for a
year every 5 years while requiring level 1 facility physicians to spend
some time at level 3 facilities to share best practices. Currently, the
medical staff is primarily detailed to temporarily fill vacancies. This
practice fails to incentivize the detailed professional to share best
practices and teach, merely hold down the position until it can be
filled by a permanent hire.
Modernizing VA's IT Infrastructure
``Overhauling the health care system for Americans who answered the
call of duty by serving in the military is a national priority. The
country's largest integrated health care delivery system is responding
to these challenges and aims to reestablish trust by expanding methods
of providing care and emphasizing the concept of ``whole health'' and
adopting a veteran-centric approach in everything we do. It will be
necessary to reimagine the future of VHA health care delivery.
Partnerships with federal and community health care providers may
result in better access and broader capabilities and will require a new
infrastructure. The future requires the use of best practices in
science and engineering to improve the quality, safety, and consistency
of veteran's experience, regardless of the site or type of care.''
David Shulkin, M.D. \2\
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\2\ New England Journal of Medicine http://www.nejm.org/doi/full/
10.1056/NEJMp1600307
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Department of Veterans Affairs (VA) Information Technology (IT)
infrastructure has been an evolving technological necessity over the
past 37 years, sometimes leading the industry, and sometimes trailing.
The American Legion has been intrinsically involved with VA's IT
transformation from the inception of Veterans Health Information and
Technology Architecture (VistA) to the recent introduction of VistA-
e[volution] for medical records, as well as being a pioneer partner in
the concept and integration of the fully electronic disability claims
process.
Leading the field in 1978, VA doctors developed an electronic
solution to coordinate and catalog patients healthcare long before
their private sector colleagues, who were slow to follow, while some
private physicians still refuse to automate today.
IT automation is expensive to implement and expensive to maintain,
especially when maintaining legacy equipment. As in all digital space,
IT infrastructure advances so quickly that most IT infrastructure is
outdated by the time it is fully implemented, and VA's IT
infrastructure is no different. Unfortunately, in this case, it is
simply the cost of doing business in a technologically advancing
society. With this in mind, companies are turning to rented cloud-based
resources and Software as a Service (SAS) to mitigate costs. These
services have a lower up-front investment and negate the need for
hardware maintenance and software upgrades in many cases.
Information Technology is inextricably intertwined into many of the
services we take for granted, such as; telephone systems, appointment
scheduling, procurement, building access, safety controls, and much
more. Maintaining an up-to-date system is not a luxury, it is
necessary, and The American Legion has found that VA's IT
infrastructure is aged and failing our veterans.
One of the primary complaints The American Legion receives
regarding VA healthcare is scheduling issues. VA's inability to
schedule the full complement of veterans' healthcare needs from one
central location causes a multitude of delays and billing problems and
puts veteran patients at risk when all of the members of the veteran's
health team are unable to effectively collaborate online.
In order for VA to safely and effectively serve veterans going
forward they need a 21st-century data system that incorporates;

A single lifetime Electronic Health Record system (EHR),
One Operation Management Platform consisting of one
resource allocation, financial, supply chain, and human resources
system that are integrated seamlessly with the EHR,
A single Customer Relationship Management (CRM) system

If proprietary, the system needs to be built using open source
code, which will allow the program to remain sustainable and enable
future competitive Application Programming Interface (API) Framework
that will provide seamless interoperability with internal and external
systems.
Once this system is developed, metrics and analytics will be
available to all levels of leadership from decentralized locations.
Legacy viewer and 130 different versions of VistA simultaneously
running across the national and international VA landscape that has
been patched together is outdated and ineffective. A veteran should be
able to walk into any VA Medical Center (VAMC) anywhere in the country
or abroad, and the first intake specialist to assist that veteran
should be able to pull the patient's record up instantly. This is not
possible today.
Initiatives like MyHealtheVet, eBenefits, and the recently launched
Vets.gov are all steps in the right direction, and all need to be tied
into a single user interface system. The American Legion also supports
extended use of public/private partnerships similar to the team
detailed to VA from the private sector who have spent the past 18
months building the Vets.gov portal. IT industry leaders such as
Amazon, Google, Microsoft, and Cisco have already partnered with VA in
a number of areas and appear willing to help at cost, below market
cost, or even donated services, and VA needs to have the flexibility to
maximize these relationships.
Finally, as we struggle to keep up with the multitude of programs
and expenditures related to VA's IT program, The American Legion is
outraged that one of VA's first experiences with integrating cloud
services into the VA program was mismanaged and squandered more than $2
million in taxpayer funds. VA does not have the freedom to learn as
they go and needs to partner with or hire experts in cloud computing
before they engage in cloud brokerage services. A few days ago the VA
Office of Inspector General found \3\;
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\3\ VAOIG https://www.va.gov/oig/pubs/VAOIG-15-02189-336.pdf
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``OI&T spent over $2 million on a cloud brokerage service contract
that provided limited brokerage functionality and that VA's actions did
not ensure adequate system performance or return on investment. We
determined total project costs exceeded $5 million and the system's
limited brokerage service functionality prevented it from being used in
a production environment. This capability is essential for delivery of
cloud services. The project manager did not ensure that formal testing
and acceptance were conducted on project deliverables.''
These deficiencies occurred because of a lack of executive
oversight and ineffective project management. Without enforcement of
oversight controls, project leadership cannot ensure it will receive
the value of contract deliverables or demonstrate an adequate return on
investment for the project.''
The American Legion calls on Congress to consider funding that
enables VA to tie all of their IT programs together into a seamless
program capable of processing claims, managing veterans' health care
needs, integrating procurement needs so that VA leaders and Congress
can analyze annual expenditures versus healthcare consumption,
integrating patient communications into their profiles, and ensuring
seamless transition between the Department of Defense and VA.
Consolidation of Outside Care
When the Choice program was added as a temporary emergency measure
as part of the Veterans Access, Choice and Accountability Act (VACAA)
of 2014 \4\, The American Legion supported the program because we had
witnessed firsthand the need across the country. In 2014, The American
Legion set up a dozen Veterans Crisis Command Centers (VCCCs) in
affected areas from Phoenix to Fayetteville and spoke to hundreds of
veterans personally affected by the scheduling problems within VA. The
Choice program provided an immediate short-term option, but it also
provided an opportunity to learn how veterans utilized the program. At
that time, The American Legion recommended gathering as much data as
possible from veterans using the program to improve the ability of VA's
other existing authorities for care in the community. \5\ Additionally,
The American Legion supported the Veterans Choice Continuation Act,
which continued the Veterans Choice Program (VCP) that was due to
expire on August 7, 2017 by ensuring veterans within the VA healthcare
system who are using the VCP continue to have the ability to access
quality health care within their communities without any interruption
of services.
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\4\ Public Law P.L. 113-146
\5\ Such as Project Access Received Closer to Home (ARCH), the
Patient Centered Community Care (PCs) program and others
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With the creation of the Choice program, Congress appropriately
allocated $10 billion in emergency funds to provide the life support
for the program. Now that Choice is set to expire when the funds are
depleted, The American Legion strongly believes the next evolution of
Choice should be the streamlining and consolidation of the community
care programs at VA. Choice taught us that there is certainly a need
for care in the community, which has a hefty price tag attached to it.
The American Legion urges Congress to learn from Choice, and not end
the funding levels that Choice brought us. We urge this critical
committee and the entire United States Congress to continue to fund
community care for veterans at the current levels of roughly $3.3
Billion annually.
This committee, the U.S. Senate, VA, and VSO's are currently
working together to determine what the next evolution of Choice looks
like, but the one thing we all agree on is there is certainly a need
for community care. Choice demonstrated to the nation that there was a
gap in care and the emergency funds that were allocated gave VA the
resources to provide the much-needed health care. Moving forward, and
after witnessing the sincere need for community care, The American
Legion simply urges Congress to fund the community care programs at the
appropriate levels, which should be no less than what is currently
being allocated.
The Looming Appeals Crisis
The American Legion currently holds power of attorney on more than
three-quarters of a million claimants. We spend millions of dollars
each year defending veterans through the claims and appeals process,
and our success rate at the Board of Veterans Appeals (BVA) continues
to hover around 80 percent.
Although Congress is taking the appropriate actions in addressing
the issue of future appeals, through the Veterans Appeals Improvement
and Modernization Act of 2017, there remains roughly 500,000 legacy
claims yet addressed. According to the VA, the average wait time to
resolve an appeal is around 1,600 days. \6\
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\6\ https://drive.google.com/file/d/0B70--mGYT1tJETzZGWUZKYzdGXzg/
view
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In 2016, the VA released a study explaining what resources were
required to address the growing legacy appeals inventory. With $50
million, the VA projects that the last of the legacy appeal claims
would be resolved sometime after 2026. With funding at $242 million
dollars, the VA projected to address all legacy claims by 2022. If
funding is not allocated to support the VA's mission to reduce legacy
appeal claims, they estimate that over 214,000 claims will take over
nine years to resolve. \7\
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\7\ https://drive.google.com/file/d/0B70--mGYT1tJETzZGWUZKYzdGXzg/
view
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The American Legion requests that Congress authorizes $242 million
in FY 2018 -2019, and beyond, to the VA so that they may start working
the backlog of appeals currently in the system. The projected date to
end all backlog legacy appeals with this funding would be 2022. Any
lesser amount of funds would drastically increase the amount of time to
finish legacy appeals.
Better Care for Female Veterans
A 2011 American Legion study revealed several areas of concern
about VA health-care services for women. Today, VA still struggles to
fulfill this need, even though women are the fastest-growing segment of
the veteran population. Approximately 1.8 million female veterans make
up 8 percent of the total veteran population, yet only 6 percent use VA
services.
VA needs to be prepared for a significant increase of younger
female veterans as those who served in the War on Terror separate from
active service. Approximately 58 percent of women returning from Iraq
and Afghanistan are ages 20 to 29, and they require gender-specific
expertise and care. Studies suggest post-traumatic stress disorder is
especially prevalent among women; among veterans who used VA in 2009,
10.2 percent of women and 7.8 percent of men were diagnosed with PTSD.
The number of female veterans enrolled in the VA system is expected
to expand by more than 33 percent in the next three years. Currently,
44 percent of Iraq and Afghanistan female veterans have enrolled in the
VA health-care system.
VA needs to develop a comprehensive health-care program for female
veterans that extend beyond reproductive issues. Bills like the Deborah
Sampson Act and the Women Veterans Access to Quality Care Act are a
step in the right direction. Provider education needs improvement.
Furthermore, as female veterans are the sole caregivers in some
families, services, and benefits designed to promote independent living
for combat-injured veterans must be evaluated, and needs such as child
care must be factored into the equation. Additionally, many female
veterans cannot make appointments due to the lack of child-care options
at VA medical centers. Since the 2011 survey, The American Legion has
continued to advocate for improved delivery of timely, quality health
care for women using VA. The American Legion is encouraged that the
President's budget recognizes the need for additional funding in this
critical area, and has proposed an increase of $32 million almost 9
percent over last year's authorization levels, which combined with
years 2009 through 2014 represents an increase in funding of nearly 240
percent to deal with this growing segment of the veteran population.
Military and Veteran Caregiver Services
The struggle to care for veterans wounded in defense of this nation
takes a terrible toll on families. In recognition of this, Congress
passed, and President Barack Obama signed into law, the Caregivers and
Veterans Omnibus Health Services Act of 2010. The unprecedented package
of caregiver benefits authorized by this landmark legislation includes
training to help to ensure patient safety, cash stipends to partially
compensate for caregiver time and effort, caregiver health coverage if
they have none, and guaranteed periods of respite to protect against
burnout.
The comprehensive package, however, is not available to most family
members who are primary caregivers to severely ill and injured
veterans. Congress opened the program only to caregivers of veterans
severely ``injured,'' either physically or mentally, in the line of
duty on or after Sept. 11, 2001. It is not open to families of severely
disabled veterans injured before 9/11, nor is it open to post-9/11
veterans who have severe service-connected illnesses, rather than
injuries, which is why we call on Congress to immediately pass the
Military and Veteran Caregiver Services Improvement Act of 2017.
The American Legion has long advocated for expanding eligibility
and ending the obvious inequity that Caregivers and Veterans Omnibus
Health Services Act of 2010 created. Simply put, a veteran is a
veteran! All veterans should receive the same level of benefits for
equal service. As affirmed in American Legion Resolution No. 259:
Extend Caregiver Benefits to Include Veterans Before September 11,
2001, The American Legion supports legislation to remove the date
September 11, 2001, from Public Law 111-163 and revise the law to
include all veterans who otherwise meet the eligibility requirements.
\8\
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\8\ American Legion Resolution No. 259 (2016): Extend Caregiver
Benefits to Include Veterans Before September 11, 2001
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The American Legion is optimistic that providing expanded support
services and stipends to caregivers of veterans to all eras is not only
possible but also budgetary feasible and the right thing to do. We urge
this committee and the U.S. Congress to allocate the required funding
to expand the caregiver program to all eras of conflict and veterans
who should be in this program.
Ensuring Quality Care to Rural Veterans
The American Legion's System Worth Saving task force travels the
country to evaluate VA medical facilities and ensure they are meeting
the needs of veterans. From November 2013 to May 2014, the task force
has been conducting site visits to VA medical facilities and town hall
meetings to receive feedback from local veterans who utilize VA to
receive their health care.
The Task Force, in its 14th program year, is focusing on VA's
accomplishments and progress over the past decade and a half, current
issues and concerns, and VA's five-year strategic plan for several
program areas. These areas of focus are VA's budget, staffing,
enrollment/outreach, hospital programs (e.g. mental health, intensive
care unit (ICU), long-term services and support, homelessness programs)
information technology and construction programs.
During each site visit, a town hall meeting is hosted by an
American Legion Post. The town hall meetings have consistently
illustrated that veterans are worried VA has turned a deaf ear to their
concerns and is intentionally ignoring their complaints. We have seen
firsthand where VA has closed intensive care departments, downgrading
emergency departments to urgent care clinics, or has proposed to closed
or reconfiguring hospital services under the guise of ``realigning
services closer to where veterans live'', such as the reconfiguration
proposal at the VA Black Hills Health Care System, which has served the
veterans of Hot Springs, South, Dakota for over 100 years and we
applaud Secretary Shulkin for halting further dismantling of this
historic and much-needed community facility.
The American Legion urges Congress to evaluate VA's plan in rural
areas and to stop VA from closing hospitals and community-based
outpatient clinics unless existing requisite community services are
meet or exceed that VA currently provides to veterans.
Assisting Homeless Veterans
The American Legion strongly believes that homeless veteran
programs should be granted sufficient funding to provide supportive
services such as, but not limited to: outreach, health care,
rehabilitation, case management, personal finance planning,
transportation, vocational counseling, employment, and education.
Furthermore, The American Legion continues to place special
priority on the issue of veteran homelessness. With veterans making up
approximately 11% of our nation's total adult homeless population,
there is plenty of reason to give this issue special attention. Along
with various community partners, The American Legion remains committed
to seeing VA's goal of ending veteran homelessness come to fruition.
Our goal is to ensure that every community across America has programs
and services in place to get homeless veterans into housing (along with
necessary healthcare/treatment) while connecting those at-risk veterans
with the local services and resources they need. We hope to see that
with the expansion of assistance afforded to homeless veterans and
their dependents, there will also be an increase in funding to support.
We estimate that an additional $10 million annually will be sufficient
to accomplish this goal.
Repair Problems in Mental Health
During the past half-decade, VA has nearly doubled their mental
health care staff, jumping from just over 13,500 providers in 2005 to
over 20,000 providers in 2011. However, during that time there has been
a massive influx of veterans into the system, with a growing need for
psychiatric services. With over 1.5 million veterans separating from
service in the past decade, 690,844 have not utilized VA for treatment
or evaluation. The American Legion is deeply concerned about nearly
700,000 veterans who are slipping through the cracks unable to access
the health care system they have earned through their service.
Post-traumatic stress disorder and traumatic brain injury are the
signature wounds of today's wars. Both conditions are increasing in
number, particularly among those who have served in Operation Iraqi
Freedom and Operation Enduring Freedom. The President's request for a 6
percent increase in funding will hopefully find much-needed dollars
dedicated to this area considering that a 2011 Senate Committee on
Veterans' Affairs survey of 319 VA mental health staff revealed that
services for veterans coping with mental health issues and TBI lack
considerable support. Among the findings:

New mental health patient appointments could be scheduled
within 14 days, according to 63 percent of respondents, but only 48.1
percent believed veterans referred for specialty appointments for PTSD
or substance abuse would be seen within 14 days.
Seventy percent of providers said their sites had
shortages of mental health space.
Forty-six percent reported that a lack of off-hours
appointments was a barrier to care.
More than 26 percent reported that demand for
Compensation and Pension (C&P) exams pulled clinicians away from direct
care.
Just over 50 percent reported that growth in patient
numbers contributed to mental health staff shortages.

VHA and, at the request of Congress, VA's Office of the Inspector
General have studied the problem since the survey was conducted. On
April 23, 2012, the VAOIG released the report, ``Review of Veterans'
Access to Mental Health Care.'' It found that VHA's mental health
performance data was neither accurate nor reliable. In VA's FY 2011
Performance and Accountability Report, VHA grossly over-reported that
95 percent of first-time patients received a full mental health
evaluation within 14 days. However, it was found that VHA completed
approximately 64 percent of new-patient appointments for treatment
within 14 days of their desired date, but approximately 36 percent of
appointments exceeded 14 days. VHA schedulers also were not following
procedures outlined in VHA directives and were scheduling clinic
appointments on the system's availability rather than the patient's
clinical need.
The American Legion believes VA must focus on head injuries and
mental health without sacrificing awareness and concern for other
conditions afflicting servicemembers and veterans. As an immediate
priority, VA must ensure staffing levels are adequate to meet the need.
The American Legion also urges Congress to invest in research,
screening, diagnosis and treatment of PTSD and TBI and will continue to
monitor VA to ensure that they remain, good stewards of the people's
money
Although The American Legion supports advance appropriations, we
remain concerned accurate projections on population and utilization,
and other challenges remain.
One such challenge is with the procurement of medical equipment and
Information Technology (IT) purchases. When IT within the VA was
combined across the entire agency, it was implemented to improve
efficiency, contracting, management, and other challenges inherent with
three disjointed IT management teams. This has proved somewhat
successful. However, we hear that procurement of medical equipment, and
IT is hampered at medical facilities due to budget implementation
failures through continuing resolutions. While a VA medical center
director might have his/her operational funding beginning October 1
because of advance appropriations, much needed IT or medical equipment
might be delayed due to a continuing resolution impasse in Congress.
This has a detrimental impact on the veteran and his/her care.
Therefore, The American Legion recommends the IT portion of the budget
be added to advance appropriations and help smooth those budget
challenges. Additionally, The American Legion remains committed to
working with the VA in any way possible to move the VA toward their
goal of becoming a fully integrated paperless system.
Medical Services
Over the past two decades, VA has dramatically transformed its
medical care delivery system. Through The American Legion visits a
variety of medical facilities throughout the nation during our System
Worth Saving Task Force, we see firsthand this transformation and its
impact on veterans in every corner of the nation.
While the quality of care remains exemplary, veteran health care
will be inadequate if access is hampered. Today there are over 23
million veterans in the United States. While 8.3 million of these
veterans are enrolled in the VA health care system, a population that
has been relatively steady in the past decade, the costs associated
with caring for these veterans has escalated dramatically.
For example between FYs 2007 and 2010, VA enrollees increased from
7.8 million to 8.3 million \9\. During the same period, inpatient
admissions increased from 589 thousand to 662 thousand. Outpatient
visits also increased from 62 to 80.2 billion. Correspondingly, cost to
care for these veterans increased from $29.0 billion to $39.4 billion.
This 36 percent increase during those two years is a trend that
dramatically impacts the ability to care for these veterans.
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\9\ Source: Department of Veterans Affairs, Veterans Health
Administration, Office of the Assistant Deputy Under Secretary for
Health for Policy and Planning. Prepared by the National Center for
Veterans Analysis and Statistics
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While FY 2010 numbers seemingly leveled off - to only 3 percent
annual growth - will adequate funding exist to meet veteran care needs?
If adequate funding to meet these needs isn't appropriated, VA will be
forced to either not meet patient needs or shift money from other
accounts to meet the need.
Even with the opportunity for veterans from OIF/OEF to have up to 5
years of care following their active duty period, we have not seen a
dramatic change in overall enrollee population. Yet The American Legion
remains concerned that the population estimates are dated and not
reflective of the costs. If current economic woes and high unemployment
rates \10\ for veterans remain and with the Vietnam Era Veterans
beginning to retire and needing healthcare that may no longer be
provided by their employers, VA medical care will become enticing for a
veteran population that might not have utilized those services in the
past.
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\10\ Source: U.S. Department of Labor, Veterans' Employment &
Training Service (2017)
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Finally, ongoing implementation of programs such as the PL 111-163
``Caregiver Act'' will continue to increase demands on the VA health
care system and therefore result in an increased need for a budget that
can adequately deal with the challenges.
In order to meet the increased levels of demand, even assuming that
not all eligible veterans will elect to enroll for coverage, and keep
pace with the cost trend identified above, there must be an increase to
account for both the influx of new patients and increased costs of
care.
Medical Support and Compliance
The Medical Support and Compliance account consist of expenses
associated with administration, oversight, and support for the
operation of hospitals, clinics, nursing homes, and domiciliaries.
Although few of these activities are directly related to the personal
care of veterans, they are essential for quality, budget management,
and safety. Without adequate funding in these accounts, facilities will
be unable to meet collection goals, patient safety, and quality of care
guidelines.
The American Legion has been critical of programs funded by this
account. We remain concerned patient safety is addressed at every
level. We are skeptical if patient billing is performed efficiently and
accurately. Moreover, we are concerned that specialty advisors/
counselors to implement OIF/OEF outreach, ``Caregiver Act''
implementation, and other programs are properly allocated. If no need
for such individuals exists, should the position be placed within a
facility? Simply throwing more money at this account, increasing staff
and systems won't resolve all these problems.
During the previous budget, this account grew by nearly 8 percent
to $5.31 billion. The American Legion questions the necessity for that
rate to continue at this time.
Medical Facilities
During FY 2012, VA unveiled the Strategic Capital Investment
Planning (SCIP) program. This ten-year capital construction plan was
designed to address VA's most critical infrastructure needs. Through
the plan, VA estimated the ten-year costs for major and minor
construction projects and non-recurring maintenance would total between
$53 and $65 billion over ten years.
The American Legion is supportive of the SCIP program which
empowers facility managers and users to evaluate needs based on patient
safety, utilization, and other factors. While it places the onus on
these individuals to justify the need, these needs are more reflective
of the actuality as observed by our members and during our visits. Yet,
VA has taken this process and effectively neutered it through budget
limitations thereby underfunding the accounts and delaying delivery of
critical infrastructure.
So while failing to meet these needs, facility managers will be
forced to make do with existing aging facilities. While seemingly
saving money in construction costs, the VA will be expending money
maintaining deteriorating facilities, paying increased utility and
operational costs, and performing piecemeal renovation of properties to
remain below the threshold of major or minor projects.
This is an inefficient byproduct of budgeting priorities. Yet, as
will be noted later, the reality remains that the SCIP program is
unlikely to be funded at levels necessary to accomplish the ten-year
plan. Therefore, this account must be increased to meet the short-term
needs within the existing facilities.
Major and Minor Construction
After two years of study, the VA developed the Strategic Capital
Investment Planning (SCIP) program. It is a ten-year capital
construction plan designed to address VA's most critical infrastructure
needs within the Veterans Health Administration, Veterans Benefits
Administration, National Cemetery Administration, and Staff Offices.
The SCIP planning process develops data for VA's annual budget
requests. These infrastructure budget requests are divided into several
VA accounts: Major Construction, Minor Construction, Non-Recurring
Maintenance (NRM), Enhanced-Use Leasing, Sharing, and Other Investments
and Disposal. The VA estimated costs were between $53 and $65 billion.
The American Legion is very concerned about the lack of funding in
the Major and Minor Construction accounts. Based on VA's SCIP plan,
Congress underfunded these accounts. Clearly, if this underfunding
continues VA will never fix its identified deficiencies within its ten-
year plan. Indeed, at current rates, it will take VA almost sixty years
to address these current deficiencies.
The American Legion also understands there is a discussion to refer
to SCIP in the future as a ``planning document'' rather than an actual
capital investment plan. Under this proposal, VA will still address the
deficiencies identified by the SCIP process for future funding requests
but rather than having an annual appropriation, SCIP will be extended
to a five-year appropriation, similar to the appropriation process used
by the Department of Defense as its construction model. Such a plan
will have huge implications on VA's ability to prioritize or make
changes as to design or project specifications of its construction
projects. The American Legion is against this five-year appropriation
model and recommends Congress continue funding VA's construction needs
on an annual appropriations basis.
The American Legion recommends Congress adopt the 10-year action
plan created by the SCIP process. Congress must appropriate sufficient
funds to pay for needed VA construction projects and stop underfunding
these accounts.
State Veteran Home Construction Grants
Perhaps no program facilitated by the VA has been as impacted by
the decrease in government spending than the State Veteran Home
Construction Grant program. This program is essential in providing
services to a significant number of veterans throughout the country at
a fraction of the daily costs of similar care in private or VA
facilities. As the economy rebounds and states are pivoting towards
resuming essential services, taking advantage of depressed construction
costs, and meeting the needs of an aging veteran population, greater
use of this grant program will continue. As our baby boomer population
continues to transition into retirement, many more of these veterans
are retiring to state veteran homes due to their excellent reputation
for care and cost. The popularity of these retirement options will
cause any surplus of space to become consumed. The American Legion
encourages Congress to increase the funding level of this program.
National Cemetery Administration (NCA)
No aspect of the VA is as critically acclaimed as the National
Cemetery Administration (NCA). In the 2010 American Customer
Satisfaction Index, the NCA achieved the highest ranking of any public
or private organization. In addition to meeting this customer service
level, the NCA remains the highest employer of veterans within the
federal government and remains the model for contracting with veteran-
owned businesses.
While NCA met their goal of having 90 percent of veterans served
within 75 miles of their home, their aggressive strategy to improve
upon this in the coming five years will necessitate funding increases
for new construction. Congress must provide sufficient major
construction appropriations to permit NCA to accomplish this goal and
open five new cemeteries in the coming five years. Moreover, funding
must remain to continue to expand existing cemetery facilities as the
need arises.
While the costs of fuel, water, and contracts have risen, the NCA
operations budget has remained nearly flat for the past two budgets.
Unfortunately, recent audits have shown cracks beginning to appear. Due
predominantly to poor contract oversight, several cemeteries
inadvertently misidentified burial locations. Although only one or two
were willful violations of NCA protocols, the findings demonstrate a
system about ready to burst.
To meet the increased costs of fuel, equipment, and other resources
as well as ever-increasing contract costs, The American Legion believes
a small increase is necessary. In addition, we urge Congress to
adequately fund the construction program to meet the burial needs of
our nation's veterans.
State Cemetery Grant Program
The NCA administers a program of grants to states to assist them in
establishing or improving state-operated veterans' cemeteries through
VA's State Cemetery Grants Program (SCGP). Established in 1978, this
program funds nearly 100% of the costs to establish a new cemetery, or
expand existing facilities. For the past two budgets, this program has
been budgeted $46 million to accomplish this mission.
New authority granted to VA funds Operation and Maintenance
Projects at state veterans cemeteries to assist states in achieving the
national shrine standards VA achieves within national cemeteries.
Specifically, the new operation and maintenance grants have been
targeted to help states meet VA's national shrine standards with
respect to cleanliness, height, and alignment of headstones and
markers, leveling of gravesites, and turf conditions. In addition, this
law allowed VA to provide funding for the delivery of grants to tribal
governments for Native American veterans. Yet we have not seen the
allocation of funding increased to not only meet the existing needs
under the construction and expansion level but also the needs from
operation and maintenance and tribal nation grants. Moreover, as these
cemeteries age, the $5 million limitations must be revoked to allow for
better management of resources within the projects.
Medical and Prosthetic Research
The American Legion believes VA research must focus on improving
treatment for medical conditions unique to veterans. Because of the
unique structure of VA's electronic medical records (VISTA), VA
Research has access to a great amount of longitudinal data incomparable
to research outside the VA system. Because of the ongoing wars of the
past decade, several areas have emerged as ``signature wounds'' of the
Global War on Terror, specifically Traumatic Brain Injury (TBI),
Posttraumatic Stress Disorder (PTSD) and dealing with the effects of
amputated limbs.
Much media attention has focused on TBI from blast injuries common
to Improvised Explosive Devices (IEDs) and PTSD. As a result, VA has
devoted extensive research efforts to improve the understanding and
treatment of these disorders. Amputee medicine has received less
scrutiny but is no less a critical area of concern. Because of
improvements in body armor and battlefield medicine, catastrophic
injuries that in previous wars would have resulted in loss of life have
led to substantial increases in the numbers of veterans who are coping
with loss of limbs.
As far back as 2004, statistics were emerging which indicated
amputation rates for US troops were as much as twice that from previous
wars. By January of 2007, news reports circulated noting the 500th
amputee of the Iraq War. The Department of Defense response involved
the creation of Traumatic Extremity Injury and Amputation Centers of
Excellence, and sites such as Walter Reed have made landmark strides in
providing the most cutting-edge treatment and technology to help
injured service members deal with these catastrophic injuries.
However, The American Legion remains concerned that once these
veterans transition away from active duty status to become veteran
members of the communities, there is a drop-off in the level of access
to these cutting edge advancements. Ongoing care for the balance of
their lives is delivered through the VA Health Care system, and not
through these concentrated active duty centers.
Many reports indicate the state of the art technology available at
DOD sites is not available from the average VA Medical Center. With so
much focus on ``seamless transition'' from active duty to civilian life
for veterans, this is one critical area where VA cannot afford to lag
beyond the advancements reaching service members at DOD sites. If a
veteran can receive a state of the artificial art limb at the new
Walter Reed National Military Medical Center (WRNMC) they should be
able to receive the exact same treatment when they return home to the
VA Medical Center in their home community, be it in Gainesville, Battle
Creek, or Fort Harrison.
American Legion contact with senior VA health care officials has
concluded that while DOD concentrates their treatment in a small number
of facilities, the VA is tasked with providing care at 152 major
medical centers and over 1,700 total facilities throughout the 50
states as well as in Puerto Rico, Guam, American Samoa and the
Philippines. Yet, VA officials are adamant their budget figures are
sufficient to ensure a veteran can and will receive the most cutting
edge care wherever they choose to seek treatment in the system.
The American Legion remains concerned about the ability to deliver
this cutting edge care to our amputee veterans, as well as the ability
of VA to fund and drive top research in areas of medicine related to
veteran-centric disorders. There is no reason VA should not be seen at
the world's leading source for medical research into veteran injuries
such as amputee medicine, PTSD, and TBI.
In FY 2011 VA received a budget of $590 million for medical and
prosthetics research. Only because of the efforts of the House and
Senate was this budget kept at that level during the FY 2012 and 2013
budgets, due to significant pressure from The American Legion. Even at
this level, The American Legion contends this budget must be increased
and closely monitored to ensure the money is reaching the veteran at
the local level.
Medical Care Collections Fund (MCCF)
In addition to the aforementioned accounts which are directly
appropriated, medical care cost recovery collections are included when
formulating the funding for VHA. Over the years, this funding has been
contentious because they often included proposals for enrollment fees,
increased prescription rates, and other costs billed directly to
veterans. The American Legion has always ardently fought against these
fees and unsubstantiated increases.
Beyond these first party fees, VHA is authorized to bill health
care insurers for nonservice-connected care provided to veterans within
the system. Other income collected into this account includes parking
fees and enhanced use lease revenue. The American Legion remains
concerned that the expiration of authority to continue enhanced use
leases will greatly impact not only potential revenue but also delivery
of care in these unique circumstances. We urge Congress to reauthorize
the enhanced use lease authority with the greatest amount of
flexibility allowable.
In May 2011, the VA Office of Inspector General (OIG) issued a
report auditing the collections of third party insurance collections
within MCCF. Their audit found that ``VHA missed opportunities to
increase MCCF by . .46 percent.'' Because of ineffective processes used
to identify billable fee claims and systematic controls, it was
estimated VHA lost over $110 million annually. In response to this
audit, VHA assured they'd have processes in place to turn around this
trend.
Yet even if those reassurances were met, the MCCF collection would
not meet the quarterly loss beneath the budgeted amounts. Without those
collections, savings must be garnered elsewhere to meet these
shortfalls, thereby causing facility administrators and VISN directors
to make difficult choices that ultimately negatively impact veterans
through a lack of hiring, delay of purchasing, or other savings
methods.
It would be unconscionable to increase this account beyond the
previous levels that were not met. To do so without increasing co-
payments or collection methods would be counterproductive and mere
budget gimmickry. While we recognize the need to include this in the
budget, The American Legion cannot be part of a budget that penalizes
the veteran for administrative failures.
Additional Funding for State Approving Agencies
State Approving Agencies (SAAs) are responsible for approving and
supervising programs of education for the training of veterans,
eligible dependents, and eligible members of the National Guard and the
Reserves. SAAs grew out of the original GI Bill of Rights that became
law in 1944. Though SAAs have their foundation in federal law, SAAs
operate as part of state governments. SAAs approve programs leading to
vocational, educational or professional objectives. These include
vocational certificates, high school diplomas, GEDs, degrees,
apprenticeships, on-the-job training, flight training, correspondence
training and programs leading to required certification to practice in
a profession.
SAAs currently employ 250 professionals across 57 states and
territories and are responsible for over 8,000 facilities and more than
100,000 programs. State approving agencies serve our veterans by
protecting the quality and integrity of the GI Bill programs. These
unique state agencies, funded by federal contract through the VA,
approve programs according to federal and state requirements. They
provide oversight to make sure schools remain compliant with those
requirements through school visits and routine renewal of approval.
However, since 2006, SAAs have been flat funded at $19 million
dollars, meaning they have not received an increase in funding, yet
dealing with increased volume. There have been no needed increases to
reflect the increasing complexity of administering the benefit and the
rapid growth of beneficiaries driven by the Post 911 GI Bill. This,
along with the increased cost of hiring and retaining personnel, to
include increased health care and benefits (an average increase of
$20,000 per professional over the past decade), has resulted in SAAs
struggling to provide the needed service to and protection for
veterans. As such, we urge Congress to increase the SAA allocation from
$19 to $26 million to allow these important agencies to continue to
provide approval and oversight of quality educational and training
programs for our veterans.
Advance Appropriations for FY 2018
The Veterans Health Administration (VHA) manages the largest
integrated health-care system in the United States, with 152 medical
centers, nearly 1,400 community-based outpatient clinics, community
living centers, Vet Centers and domiciliaries serving more than 8
million veterans every year. The American Legion believes those
veterans should receive the best care possible.
The needs of veterans continue to evolve, and VHA must ensure it is
evolving to meet them. The rural veteran population is growing, and
options such as telehealth medicine and clinical care must expand to
better serve that population. Growing numbers of female veterans mean
that a system that primarily provided for male enrollees must now
evolve and adapt to meet the needs of male and female veterans,
regardless whether they live in urban or rural areas.
An integrated response to mental health care is necessary, as the
rising rates of suicide and severe post-traumatic stress disorder are
greatly impacting veterans and active-duty servicemembers alike.
If veterans are going to receive the best possible care from VA,
the system needs to continue to adapt to the changing demands of the
population it serves. The concerns of rural veterans can be addressed
through multiple measures, including expansion of the existing
infrastructure through CBOCs and other innovative solutions,
improvements in telehealth and telemedicine, improved staffing and
enhancements to the travel system.
Patient concerns and quality of care can be improved by better
attention to VA strategic planning, concise and clear directives from
VHA, improved hiring practices and retention, and better tracking of
quality by VA on a national level.
And finally, mandatory funds must be included in Advanced
Appropriations along with full discretionary funding of all VA
accounts. Veterans and dependents having their compensation and
disability checks delayed because Congress refuses to pass an annual
budget before being forced to close the federal government is
reprehensible. Pass full advanced appropriations now.
Conclusion
To assimilate all outside care under one cohesive management
authority, all future Choice funding needs to be included in a
consolidated community care model. The VACAA infused $10 billion in
care funding because there was a demonstrated need, and that demand has
not gone away. Any and all future funding levels must reflect this as
part of the plan, not wait until VHA is in crisis.
Greater emphasis needs to be placed on VA's hiring and incentives,
and if additional resources are needed to secure key providers like
psychologists and physician's assistants, then VHA must be provided
with the funding needed to make those critical hires. That is the long-
term key to ensuring that veterans get the care they need in a timely
fashion in the system that is designed to treat their unique wounds of
war.
Individuals affected by homelessness should not have to choose
between staying with their dependents or obtaining needed resources
from a homeless shelter. Funds must be allocated to supporting veterans
affected by homelessness who are also caring for others.
SAA are integral in assisting veteran in higher education.
Additional funding to support their mission should be included in this
budget.
The American Legion thanks this committee for the opportunity to
elucidate the position of the over 2.2 million veteran members of this
organization. For additional information regarding this testimony,
please contact Mr. Derek Fronabarger, Deputy Director of The American
Legion Legislative Division at (202) 861-2700 or
dfronabarger@legion.org.

VETERANS OF FOREIGN WARS OF THE UNITED STATES (VFW)
CARLOS FUENTES, DIRECTOR,
Chairman Roe, Ranking Member Walz and members of the Committee, on
behalf of the men and women of the Veterans of Foreign Wars of the
United States (VFW) and its Auxiliary, thank you for the opportunity to
present the VFW's views on the Department of Veterans Affairs' (VA)
Fiscal Year (FY) 2018 appropriations.
The VFW is glad to see President Trump has proposed a six percent
increase in VA's FY 2018 discretionary budget compared to FY 2017.
However, we feel his proposal falls short of what VA needs to keep pace
with demand for health care and benefits. The VFW thanks the
Administration for its commitment to community care, long-term care,
mental health care, woman veterans and efforts to prevent and eliminate
veteran homelessness.
However, we are very concerned that the Administration's request to
make the Veterans Choice Program a permanent mandatory program could
lead to a gradual erosion of the VA health care system. What is more
concerning is that the Administration has chosen to make permanent a
flawed program by ending Individual Unemployability benefits for
certain severely disabled veterans who are unable to work due to their
service-connected disabilities and round down cost of living disability
pay increases, a proposal which the VFW has opposed in the past and
continues to strongly oppose.
The Administration has also proposed a cap on the amount of tuition
and fees that may be paid under the Post-9/11 GI Bill for programs of
education in which a public institution of higher learning enters into
an agreement with another entity to provide such education. Currently,
third party training programs that contract with public schools are
able to charge unlimited fees since public schools have no set dollar
amount cap.
A couple of years ago, it came to light that some contracted flight
training programs were charging exorbitant fees, which far exceeded the
cost of an average in-state education. The VFW supports the
Administration's proposal to place a reasonable cap on these sorts of
training programs.
The continued failure of Congress to eliminate sequestration has
forced the Administration to propose cuts to veteran benefits and cap
GI Bill expenditures in order to expand the Choice Program under
mandatory spending instead of including the program in its
discretionary community care account. In testimony before the Senate
and House Committees on Appropriations, Secretary of Veterans Affairs
David J. Shulkin has indicated that VA would like all its community
care money to come from one account, instead of having two separate
accounts for the same purpose and not having the flexibility to use
both accounts in accordance with veterans' demand for community care.
The VFW agrees with Secretary Shulkin and urges Congress to consolidate
VA's community care programs and to fund such programs through VA's
discretionary appropriations account.
Sequestration and its draconian spending caps limit our nation's
ability to provide service members, veterans, and their families the
care and benefits they have earned and deserve. The VFW calls on the
committee to join our campaign to finally end sequestration and do away
with a federal budget process based on the arbitrary budget caps, which
significantly limit the government's ability to carry out programs that
experience spikes in demand, such as VA health care. To the VFW,
sequestration is the most significant readiness and national security
threat of the 21st century, and despite almost universal congressional
opposition to such haphazard budgeting, Congress has failed to end it.
The VFW, in partnership with our Independent Budget (IB) co-
authors--Disabled American Veterans (DAV) and Paralyzed Veterans of
America (PVA)--produces annual budget recommendations for each of VA's
discretionary appropriation accounts and compares them to the
Administration's request. PVA has submitted testimony covering Veterans
Health Administration (VHA) appropriation accounts and DAV has covered
the IB's recommendations for the Veterans Benefits Administration
accounts. I will focus my remarks on VA's construction and National
Cemetery Administration (NCA) appropriations.

Major Construction:
FY 2018 IB Recommendation--$1.50 billion
FY 2018 Administration Request -- $512 million
FY 2017 Appropriations--$528 million

For more than a decade, the IB Veterans Service Organizations
(IBVSOs) have warned Congress and VA that perpetual underfunding has
allowed VA's infrastructure to erode while its capacity has swelled
from 81 percent in 2004 to as high as 120 percent in 2010. We continue
to believe that this need for space and chronic underfunding of medical
services could lead VA to ration care.
The IBVSOs are working with VA to reform its construction process
so facilities can be delivered on time and on budget. Previous errors
must be corrected to ensure the issues in Aurora, Colorado, never occur
again. However, Congress and the Administration must not ignore the
growing capital infrastructure needs of the Department's health care
system.
When VA asked its Veteran Integrated Service Networks (VISN) to
evaluate what they need to improve its facilities to meet the increased
outpatient demand, VA determined that ``improving the condition of VA's
facilities through major construction projects (96) accounted for the
largest resource need. \1\'' Yet the Administration's major
construction request for VHA is 36 percent less than FY 2017 and 85
percent less than actual expenditures in FY 2016.
---------------------------------------------------------------------------
\1\ Department of Veterans Affairs 2018 Budget and 2019 Advance
Appropriations Requests, Volume IV: Construction, Long Range Capital
Plan and Appendix. Long Range Capital Plan, page 8.3-8.
---------------------------------------------------------------------------
When asked why VA is taking a strategic pause on major construction
for VHA when its capital infrastructure continues to age and demand
continues to increase, VA informed the IBVSOs that it simply did not
receive the request that it needed for major construction because of
sequestration budget caps. Congress must not allow VA's inability to
invest in its VHA's major construction to limit veterans' access to the
health care they have earned and deserve by forcing veterans onto VA's
community care programs and eliminating the choice to receive care at
VA medical facilities.
Currently, VA has 24 major construction projects that are partially
funded--some of which were originally funded in FY 2004--that need a
clear path to completion. An additional three projects are in the
design phase. Outside of the partially funded major projects list are
major construction projects at the top of the FY 2017 priority list
that are seismic in nature. These projects cannot take a strategic
pause while Congress and VA decide how to manage capital infrastructure
long-term. VA will need to invest more than $3.5 billion to complete
all 24 partially funded projects. Of the top five projects on the
priority list, two are seismic deficiencies, two support the core
mission of VA--a mental health clinic and a spinal cord injury center--
and one is an addition to an existing facility. The total cost of these
five projects is $1.2 billion.
The IBVSOs recommend that Congress appropriate at least $1.5
billion for major construction in FY 2018. This amount will fund either
the ``next phase'' or fund ``through completion'' all existing
projects, and begin advance planning and design development on six
major construction projects that are the highest ranked on VA's
priority list.

Minor Construction:
FY 2018 IB Recommendation--$700 million
FY 2018 Administration Request--$343 million
FY 2017 Appropriations--$372 million

In FY 2017, Congress appropriated $372.1 million for minor
construction projects. Currently, approximately 600 minor construction
projects need funding to close all current and future year gaps within
ten years. To complete all of these current and projected projects, VA
will need to invest between $6.7 and $8.2 billion in minor construction
over the next decade.
In August 2014, the President signed the Veterans Access, Choice,
and Accountability Act of 2014 (Public Law 133-146). In this law,
Congress provided $5 billion to increase health care access by
increasing medical staffing levels and investing in infrastructure. VA
has developed a spending plan that obligated $511 million for 64 minor
construction projects over a two-year period.
While this infusion of funds has helped, there are still hundreds
of minor construction projects that need funding for completion. It is
important to remember that these funds are a supplement to, not a
replacement of, annual appropriations for minor construction projects.
The IBVSOs recommend that Congress fund VA's minor construction account
at $700 million in an effort to close all identified gaps within ten
years.
Leasing
Historically, VA has submitted capital leasing requests that meet
the growing and changing needs of veterans. VA has again requested an
adequate amount--$270.1 million for its FY 2018 major medical leasing
needs. While VA has requested adequate resources, Congress must find a
way to authorize and appropriate leasing projects in a way that
precludes the full cost of the lease being accounted for in the first
year. There are now 27 major medical leases awaiting congressional
authorization, 18 of which have been waiting since FY 2016 and six from
FY 2017 that Congress must still authorize. Delays in authorization of
these leases have a direct impact on VA's ability to provide timely
care to veterans in their communities. Congress must authorize these
leases.

National Cemetery Administration
FY 2018 IB Recommendation--$291 million
FY 2018 Administration Request **-- $306.2 million
FY 2017 Appropriations **-- $286 million

The NCA, which receives funding from eight appropriation accounts,
has the sacred duty to provide the brave men and women who have worn
our nation's uniform a final resting place that honors their service.
In a strategic effort to meet the burial and access needs of our
veterans and eligible family members, the NCA continues to expand and
improve the national cemetery system, by adding new and/or expanded
national cemeteries. Not surprising, due to the opening of additional
national cemeteries, the NCA is expecting an increase in the number of
annual veteran interments through 2016 to more than 136,000, up from
125,180 in 2014; this number is expected to slowly decrease after an
expected peak of 138,000 in 2022. This much needed expansion of the
national cemetery system will help to facilitate the projected increase
in annual veteran interments and will simultaneously increase the
overall number of graves being maintained by the NCA to 3.7 million in
2018 and 4 million by 2021.
Even as the NCA continues to add veteran burial space to its
expanding system, many existing cemeteries are exhausting their
capacity and will no longer be able to inter casketed or cremated
remains. That is why the VFW is glad the see the Administration's FY
2018 budget request for the National Cemetery Administration is higher
than what the IBVSOs have recommended and includes a seven percent
increase from FY 2017 appropriations.
Factors that have placed additional demand on the NCA include an
increase in the issuance of Presidential Memorial Certificates, which
is expected to increase from approximately 654,000 in 2013 to more than
870,000 in 2017; the expected increase in the burial of Native
American, Alaska Native, and Pacific Islander veterans; and the
possible increase, thanks to local historians and other interested
stakeholders, in requests for headstones or markers for previously
unidentified veterans. That is why the IBVSOs are glad to see the
Administration has requested $256 million in FY 2018 to fund six
national cemetery expansion projects which would provide more than
161,000 new burial spaces for veterans.
With the above considerations in mind, The Independent Budget
recommends $291 million for FY 2018 for the Operations & Maintenance of
the NCA. The IBVSOs believe that this should include a minimum of $20
million for the National Shrine Initiative. The IBVSOs laud the
Administration for providing NCA the first increase in this important
initiative since FY 2013.

DISABLED AMERICAN VETERANS (DAV)
PAUL R. VARELA, DAV ASSISTANT NATIONAL LEGISLATIVE DIRECTOR
Mr. Chairman and Members of the Committee:

As one of the co-authors of The Independent Budget (IB), along with
Veterans of Foreign Wars (VFW) and Paralyzed Veterans of America (PVA),
DAV is pleased to present our views regarding fiscal year (FY) 2018
funding requirements to support the Department of Veterans Affairs (VA)
ability to process and deliver benefits to veterans, their families and
survivors.

GENERAL OPERATING EXPENSES (GOE)

Veterans Benefits Administration $3.135 billion

The Veterans Benefits Administration (VBA) account is comprised of
six primary divisions. These include Compensation; Pension; Education;
Vocational Rehabilitation and Employment (VR&E); Housing; and
Insurance. The increases recommended for these accounts primarily
reflect current services estimates with the impact of inflation
accounting for most of the increase. However, the IB recommendations
for Compensation and VR&E also reflect a significant increase in
requested staffing to meet the rising demand for those benefits. The IB
recommends approximately $3.135 billion overall for VBA for FY 2018, an
increase of approximately $279 million over the enacted FY 2017
appropriations level. The IB recommendation includes an increase of
$183 million above current services in the Compensation account, and
approximately $32 million above current services in the VR&E account to
provide for approximately 2,000 new full-time equivalent employees
(FTEE) to address rising workload.

Compensation Service Personnel 1750 New FTEEs $183 million

VBA continues to produce record numbers of claims while maintaining
an emphasis on quality. Over the past few years, VBA has made
significant progress in reducing the disability compensation backlog,
which at its peak, stood at over 600,000 claims in March 2013. Today,
the claims backlog stands at just over 90,000 claims, a decrease of
more than 85 percent from its peak. There has also been a troubling
rise in the overall disability claims inventory and the amount of time
it takes to process both claims and appeals. These increases can be
attributed to multiple factors, including an increase in the number of
claims and appeals being filed, the lack of adequate resources to keep
pace with demand and the curtailing of mandatory overtime to reduce the
claims backlog.
In 2009, VBA issued claims decisions on 2.74 million medical
issues; that number more than doubled to 5.76 million in FY 2016, but
was less than FY 2015 when it issued 6.35 million decisions on medical
issues. In March of 2013, VBA required roughly 282 days to process a
claim. At the close of FY 2016, VBA reported that on average, it took
123 days to process a claim; however, in FY 2015, VBA reported that it
took, on average, 92 days to complete a claim. In FY 2015, total
inventory stood at about 352,000 claims; today VBA has a total
inventory close to 400,000 claims. Furthermore, VBA has an inventory of
nearly 584,000 non-disability rating claims, for example, claims for
changes in dependent or marital status.
It will require a combined focus on technology and staffing levels
to enable VBA to provide veterans and their dependents with more timely
and accurate claims decisions. For FY 2018, the Independent Budget
veterans service organizations IBVSOs recommend an additional 1,750
FTEE to manage VBA's overall rising workload. Furthermore, since VBA
stopped utilizing mandatory overtime for claims processing, the true
need for additional personnel has become more evident. Of the overall
increase in personnel, we recommend 1,000 FTEE be dedicated to
processing appeals pending at VBA in an effort to eliminate the backlog
of 380,000 appeals in VBA over the next three years. Depending on
progress this year, further personnel increases may be necessary to
reduce the appeals backlog at VBA. In addition, we recommend 350 FTEE
be dedicated to addressing the growing backlog of non-rating related
work, such as dependency claims. An additional further 300 FTEE should
be dedicated for claims processing to address the incremental rise in
the claims inventory and backlog and 100 FTEE dedicated to staffing the
Fiduciary program to meet the growing needs of veterans participating
in VA's Caregiver Support programs. This recommendation is based on a
July 2015 VA Inspector General report on the Fiduciary program that
found, ``.Field Examiner staffing did not keep pace with the growth in
the beneficiary population, [and] VBA did not staff the hubs according
to their staffing plan..''

VR&E Service Personnel 266 New FTEEs $32 million

GENERAL ADMINISTRATION

Board of Veterans' Appeals $158 million

Faced with a rising appeals backlog that could no longer be
ignored, Congress last year authorized the Board of Veterans' Appeals
(Board) to increase its FTEE by 242 over FY 2016 levels, bringing their
total authorized staffing to 922 FTEE for FY 2017; however, the Board
currently has only about 860 FTEE. For FY 2018, the IBVSOs recommend no
additional increases in FTEE; but note, the Board must be permitted to
hire its full complement of 922 FTEE. Further, as the number of claims
processed annually continues to rise as a result of the increased
capacity of VBA, the number of appeals filed annually will grow
commensurately. In order for the Board to keep pace with this new
incoming workload alone, not including those appeals already in the
system, FTEE levels will have to be adjusted accordingly, though
appeals reform legislation could alleviate some of that need in the
future.
The VA Appeals Improvement and Modernization Act of 2017 (H.R.
2288), legislation that would fundamentally reform and streamline the
overall appeals process has been introduced in the 115th Congress and
is moving forward. This measure includes provisions that reflect
significant efforts and the consensus of a working group formed in
March 2016 that consisted of the IBVSOs, other VSO stakeholders, and
leaders within VBA and the Board. Regardless of potential passage of
this legislation the Board will continue to require resources
commensurate with workload, especially to process legacy appeals
remaining at the time of enactment of new appeals reform legislation.
Further, the Board must be funded and empowered to continue pursuing IT
modernization solutions that best meet the specific workflow needs of
the Board, while ensuring it also supports seamless integration with
VBMS and other IT systems used by VBA and the Court of Appeals for
Veterans Claims.

COST OF LIVING ROUND DOWN

The Administration's budget proposal released on May 23, 2017,
contains a provision that would round down cost-of-living adjustments
(COLAs) for our nation's injured and ill veterans and their families
for a period of 10 years. DAV and our IB partners are opposed to this
rounding down provision. Veterans and their survivors rely on their
compensation for essential purchases such as food, transportation,
rent, and utilities. It also enables them to maintain a marginally
higher quality of life.
Rounding down veterans' COLAs unfairly targets disabled veterans,
their dependents and survivors to save the government money or offset
the cost of other federal programs. The cumulative effect of this
provision of law would, in essence, levy a 10-year tax on disabled
veterans and their survivors, reducing their income each year. When
multiplied by the number of disabled veterans and recipients of
Dependency and Indemnity Compensation or DIC, hundreds of millions of
dollars would be siphoned from these deserving individuals annually.
All totaled, VA estimates, this proposed COLA round down would cost
beneficiaries close to $2.7 billion over 10 years.

INDIVIDUAL UNEMPLOYABILITY AND SOCIAL SECURITY OFFSET

We also note there is a new proposal included in the President's
budget that would impact the VA's Individual Unemployability or IU
program which allows VA to pay certain veterans disability compensation
at the 100 percent rate, even though VA has not rated their service-
connected disabilities at the total level. Specifically, the proposal
would terminate existing IU ratings for veterans when they reach the
minimum retirement age for Social Security purposes, or upon enactment
of the proposal if the veteran is already in receipt of Social Security
retirement benefits. DAV and our IB partners oppose this proposal.
We oppose any measure that proposes to offset the payment of any
other federal benefit, or earned benefit entitlement by VA compensation
payments made to service-connected disabled veterans. Benefits received
from the VA, or based on military retirement pay and other federal
programs have differing eligibility criteria as compared with the
earned payments of Social Security. Reducing a benefit provided to a
disabled veteran in receipt of IU due to receipt of a different benefit
offered through separate federal benefit program is simply an unjust
penalty.
Likewise, we are opposed to limiting a compensation benefit due to
a veteran's age. Some veterans might not have income replacement
available-especially those who had been on IU for an extended period in
advance of reaching retirement age.
Mr. Chairman, thank you for the opportunity to submit testimony and
to present our views regarding FY 2018 funding requirements to support
the VA's ability to process and deliver benefits to veterans, their
families and survivors. I would be happy to respond to any questions
that you or members of the Committee may have regarding this statement
or our recommendations.

PARALYZED VETERANS OF AMERICA (PVA)
Chairman Roe, Ranking Member Walz, and members of the Committee, as
one of the co-authors of The Independent Budget (IB), along with DAV
and Veterans of Foreign Wars, Paralyzed Veterans of America (PVA) is
pleased to present our views regarding the funding requirements for the
delivery of health care for the Department of Veterans Affairs (VA) for
FY 2018 and advance appropriations for FY 2019. On the following page,
we have included a side-by-side comparison of funding recommendations
previously appropriated, recommended by the Administration, and
recommended by the IB for FY 2017 and FY 2018, as well as the advance
appropriations for FY 2019.
VA Accounts for FY 2018 and FY 2019 Advance Appropriations

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

The IB's recommendations include funding for all discretionary
programs for FY 2018 as well as advance appropriations recommendations
for medical care accounts for FY 2019. The full budget report recently
released by The Independent Budget addressing all aspects of
discretionary funding for the VA can be downloaded at
www.independentbudget.org. The FY 2018 projections are particularly
important because previous VA Secretary Robert McDonald admitted last
year that the VA's FY 2018 advance appropriation request was not truly
sufficient and would need significant additional resources provided
this year. We hope that Congress will take this defined shortfall very
seriously and appropriately address this need. Our own FY 2018
estimates affirm this need.
We appreciate the fact that the Administration's budget request
just released includes some increases in discretionary dollars for the
Medical Care accounts. However, it is important for us to address the
notion that VA does not need any additional resources, based on the
expansive growth of overall VA expenses in the last 10 years. These
ideas are not grounded in thorough analysis of demand and utilization
of VA health care. Perhaps Congress can explain how the VA can take on
significantly more demand for services both inside VA and in the
community, and yet meet that demand and utilization with less resources
(an assertion peddled by some organizations). While VA has seen
substantial growth in its funding needs over the last decade, much of
that is reflected in mandatory benefits to include the implementation
of the Post-9/11 GI Bill.
We also believe it is necessary to consider the projected
expenditures under the Choice program authority that the previous
Administration planned in FY 2017 and how that impacts the baseline
that will dictate the funding needs for FY 2018. The previous
Administration assumed as much as $5.7 billion in spending through the
Choice program in FY 2017, on top of the Medical Services discretionary
funding and the newly created Medical Community Care account. That
amount was revised to approximately $2.9 billion. This means that the
VA projected to spend more than $59.0 billion in Medical Services and
more than $71.0 billion in overall Medical Care funding in FY 2017.
These considerations inform the decisions of The Independent Budget to
establish our baseline for our funding recommendations for both FY 2018
and FY 2019.
Earlier this year, the Administration also indicated that it
intends to request as much as $3.5 billion in additional funding for
the Choice program to keep it operating at least through the end of FY
2018. That amount has since been revised to $2.9 billion for FY 2018
and $3.5 billion for FY 2019 and beyond. However, this recommendation
begs the question: does this recommendation suggest that the Choice
program as currently designed should continue in perpetuity? Certainly
no reasonable person supports that idea. We believe that Congress must
reject continued funding of this program through a mandatory account
and place in line with all other community care funded through the
discretionary Community Care account established previously by in order
to eliminate competing sources of funding for delivery of health care
services in the community, while maintaining visibility on spending
through the Choice program.
For FY 2018, the IB recommends approximately $77.0 billion in total
medical care funding. Congress previously approved only $70.0 billion
in total medical care funding for FY 2018 (which includes an assumption
of approximately $3.6 billion in medical care collections). The
Administration's budget request includes a not-insignificant overall
medical care funding recommendation of approximately $75.2 billion.
However, we remain concerned that this level of funding will not keep
pace with the continually increasing demand and utilization. The IB's
recommendation also considers the approximately $1 billion VA is
expected to have remaining in the Veterans Choice Fund and expected
demand for care, including community care, that will not diminish or go
away if the Choice Program expires. The Independent Budget recommends
approximately $82.8 billion in advance appropriations for total Medical
Care for FY 2019.
Medical Services

For FY 2018, The Independent Budget recommends $64.5 billion for
Medical Services. This recommendation includes:

Current Services Estimate $60,897,313,000
Increase in Patient Workload $1,595,242,000
Additional Medical Care Program Cost $2,001,000,000
Total FY 2018 Medical Services $64,493,555,000

The current services estimate reflects the impact of projected
uncontrollable inflation on the cost to provide services to veterans
currently using the system. This estimate also assumes a 1.5 percent
increase for pay and benefits across the board for all VA employees in
FY 2018. It was previously reported that the new Administration would
like to consider a 1.9 percent federal pay raise.
Our estimate of growth in patient workload is based on a projected
increase of approximately 90,000 new unique patients. These patients
include priority group 1*-8 veterans and covered non-veterans. We
estimate the cost of these new unique patients to be approximately $1.4
billion. The increase in patient workload also includes a projected
increase of 58,000 new Operation Enduring Freedom and Operation Iraqi
Freedom (OEF/OIF) enrollees, as well as Operation New Dawn (OND)
veterans at a cost of approximately $242 million. The increase in
utilization among OEF/OIF/OND veterans is supported by the average
annual increase in new users through the third quarter of FY 2016.
Additionally, The Independent Budget believes that there are
medical program funding needs for VA that must be considered. Those
costs total approximately $2.0 billion.

Long-Term Services and Supports

The Independent Budget recommends $535 million for FY 2018. This
recommendation reflects the fact that there was a significant increase
in the number of veterans receiving Long Term Services and Supports
(LTSS) in 2016. Unfortunately, due to loss of authorities-specifically
fee-care no longer being authorized, provider agreement authority not
yet enacted, and the inability to use Choice funds for all but skilled
nursing care-to purchase appropriate LTSS care particularly for home
and community-based care, we estimate an increase in the number of
veterans using the more costly long-stay and short-stay nursing home
care.

Prosthetics and Sensory Aids

In order to meet the increase in demand for prosthetics, the IB
recommends an additional $320 million. This increase in prosthetics
funding reflects a similar increase in expenditures from FY 2016 to FY
2017 and the expected continued growth in expenditures for FY 2018.

Women Veterans

The Medical Services appropriation should be supplemented with $110
million designated for women's health care programs in FY 2018. These
funds will be used to help the VA deal with the continuing growth in
women veterans coming to VA for care, including coverage for
gynecological, prenatal, and obstetric care, other gender-specific
services, and for expansion and repair of facilities hosting women's
care to improve privacy and safety of these facilities. The new funds
would also aid VHA in making its cultural transformation to ensure
women veterans are made to feel welcome at VA, and provide means for VA
to improve specialized services for preventing suicide and homelessness
and improvements for mental health and readjustment services for women
veterans.

Reproductive Services (to Include IVF)

Last year, Congress authorized appropriations for the remainder of
FY 2017 and FY 2018 to provide reproductive services, to include in
vitro fertilization (IVF), to service-connected catastrophically
disabled veterans whose injuries preclude their ability to conceive
children. The VA projects that this service will impact less than 500
veterans and their spouses in FY 2018. The VA also anticipates an
expenditure of no more than $20 million during that period. However,
these services are not directly funded; therefore, the IB recommends
approximately $20 million to cover the cost of reproductive services in
FY 2018. We are pleased to see that the Administration does retain the
authority to provide reproductive services in its budget proposal.

Emergency Care

Recently, the VA has received serious scrutiny for its
interpretation of legislation dating back to 2009, which required it to
pay for veterans who sought emergency care outside of the VA health
care system. The Richard W. Staab v. Robert A. McDonald ruling handed
down by the US Court of Appeals for Veterans Claims last year, places
the financial responsibility of these emergency care claims squarely on
the VA. Although VA continues to appeal this decision, it is not
expected to prevail in this case leaving itself with a more than $10
billion dollar obligation over the next 10 years. The Staab ruling is
estimated to cost VA approximately $1.0 billion in FY 2018 and about
$1.1 billion in FY 2019, which the IB has included in our
recommendations. We are disappointed to see that the Administration's
proposal continues to ignore its growing obligation to cover the cost
of emergency care as dictated by the Staab decision.

FY 2019 Medical Services Advance Appropriations

The Independent Budget once again offers baseline projections for
funding through advance appropriations for the Medical Care accounts
for FY 2019. While the enactment of advance appropriations for VA
medical care in 2009 helped to improve the predictability of funding
requested by the Administration and approved by Congress, we have
become increasingly concerned that sufficient corrections have not been
made in recent years to adjust for new, unexpected demand for care. As
indicated previously, we have serious concerns that the previous
Administration significantly underestimated its FY 2018 advance
appropriations request. This trend cannot be allowed to continue,
particularly as Congress continues to look for ways to reduce
discretionary spending, even when those reductions cannot be justified.
For FY 2019, The Independent Budget recommends approximately $69.5
billion for Medical Services. Our Medical Services advance
appropriations recommendation includes:

Current Services Estimate $66,334,946,000
Increase in Patient Workload $1,589,892,000
Additional Medical Care Program Cost $1,526,000,000
Total FY 2019 Medical Services $69,450,838,000

Our estimate of growth in patient workload is based on a projected
increase of approximately 78,000 new patients. These new unique
patients include priority group 1*-8 veterans and covered nonveterans.
We estimate the cost of these new patients to be approximately $1.3
billion. This recommendation also reflects an assumption that more
veterans will be accessing the system as VA expands its capacity and
services and we believe that reliance rates will increase as veterans
examine their health care options as a part of the Choice program. The
increase in patient workload also assumes a projected increase of
62,500 new OEF/OIF and OND veterans, at a cost of approximately $272
million.
As previously discussed, the IBVSOs believe that there are
additional medical program funding needs for VA. In order to meet the
increase in demand for prosthetics, the IB recommends an additional
$330 million. We believe that VA should invest a minimum of $120
million as an advance appropriation in FY 2019 to expand and improve
access to women veterans' health care programs. Our additional program
cost recommendation includes continued investment of $20 million to
support extension of the authority to provide reproductive services to
the most catastrophically disabled veterans. Finally, VA's cost burden
for paying emergency care claims dictated by the Staab ruling will
require at least $1.1 billion in FY 2019 alone.

Medical Support and Compliance

For Medical Support and Compliance, The Independent Budget
recommends $6.7 billion for FY 2018. Our projected increase reflects
growth in current services based on the impact of inflation on the FY
2017 appropriated level. Additionally, for FY 2019 The Independent
Budget recommends $6.8 billion for Medical Support and Compliance. We
have concerns about the significant growth in these administrative
account functions recommended by the Administration (nearly $300
million in FY 2018 and an additional $300 million in FY 2019) as these
areas have been shown to be bloated on numerous occasions in the past.
These dollars could certainly be better spent providing direct care
services to veterans.

Medical Facilities

For Medical Facilities, The Independent Budget recommends $5.8
billion for FY 2018. Our Medical Facilities recommendation includes
$1.35 billion for Non-Recurring Maintenance (NRM). Likewise, The
Independent Budget recommends approximately $6.6 billion for Medical
Facilities for FY 2019. Our FY 2019 advance appropriation
recommendation also includes $1.35 billion for NRM. We are pleased to
see the Administration recommending real funding for this account in FY
2018 (approximately $6.5 billion), but we are concerned that the Budget
Request reflects the continued trend of reducing the recommendation in
the advance appropriation year ($5.9 billion in FY 2019) in order to
seemingly hold down discretionary projections.

Medical and Prosthetic Research

We are very disappointed to see the major cut in funding for the
Medical and Prosthetic Research program in the Administration's Budget
Request-from $675 million in FY 2017 to $640 million in FY 2018. The VA
Medical and Prosthetic Research program is widely acknowledged as a
success on many levels, and contributes directly to improved care for
veterans and an elevated standard of care for all Americans. We
recommend that Congress appropriate $713 million for Medical and
Prosthetic Research for FY 2018. Additionally, under the President's
Precision Medicine Initiative, the IBVSOs recommend $65 million to
enable VA to process one quarter of the MVP samples collected, for a
total research appropriation of $778 million.
Thank you for the opportunity to submit our views on the FY 2018 VA
Budget Request. We would be happy to answer any questions the Committee
may have.

THE INDEPENDENT BUDGET
BUDGET RECOMMENDATIONS FOR FY18 AND FY19
Introduction
For more than 30 years, the co-authors of The Independent Budget
(IB)-Disabled American Veterans (DAV), Paralyzed Veterans of America
(Paralyzed Veterans), and Veterans of Foreign Wars (VFW)-have presented
our budget and policy recommendations to Congress and the
Administration. Our recommendations are meant to inform Congress and
the Administration of the needs of our members and all veterans and to
offer substantive solutions to address the many health care and
benefits challenges they face. This budget report serves as our
benchmark for properly funding the Department of Veterans Affairs (VA)
to ensure the delivery of timely, quality health care and accurate and
appropriate benefits.
The IB veterans' service organizations (IBVSOs) recognize that
Congress and the Administration continue to face immense pressure to
reduce federal spending. However, we believe that the ever-growing
demand for health care and benefits services, particularly with more
health care being provided in the community, provided by the VA
certainly validates the continued need for sufficient funding. We
understand that VA has fared better than most federal agencies in
budget proposals and appropriations, but the real measure should be how
well the funding matches the demand for veterans' benefits and
services.
We appreciate that Congress remains committed to doing the right
thing and has continued to provide increases in appropriations dollars.
However, the serious access problems in the health care system
identified in 2014 and the continued pressure being placed on the
claims processing system raise serious questions about the adequacy of
resources being provided and how VA chooses to spend these resources.
The IBVSOs are jointly releasing this stand-alone report that
focuses solely on the budget for VA and our projections for VA's
funding needs across all programs. This report is not meant to suggest
that these are the absolute correct answers for funding these services.
However, in submitting our recommendations the IBVSOs are attempting to
produce an honest assessment of need that is not subject to the
politics of federal budget development and negotiations that inevitably
have led to continuous funding deficits.
Our recommendations include funding for all discretionary programs
for FY 18 as well as advance appropriations recommendations for medical
care accounts for FY 19. The FY 18 projections are particularly
important because previous VA Secretary Robert McDonald admitted last
year that the VA's FY 18 advance appropriation request was not truly
sufficient and would need significant additional resources provided
this year. We hope that Congress will take this defined shortfall very
seriously and appropriately address this need. Our own FY 18 estimates
affirm this need.
We hope that the House and Senate Committees on Veterans' Affairs
as well as the Military Construction and Veterans' Affairs
Appropriations Subcommittees will be guided by these estimates in
making their decisions to ensure sufficient, timely, and predictable
funding for VA.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

*The Administration's FY 17 revised budget request initially
assumed approximately $5.7 billion in resource expenditures from the
Choice program. More recent estimates from VA indicate about $2.9
billion in resource expenditures from the Choice program in FY 17
increasing the total Medical Services expenditure for FY 17, including
Medical Care Collections, to nearly $59.2 billion.
Veterans Health Administration

Total Medical Care

FY 18 IB Recommendations $77.0 billion
FY 18 Revised Administration Request
FY 18 Enacted Advance Appropriations $66.4 billion
Medical Care Collections $3.6 billion
Total $70.0 billion

FY 19 IB Advance Appropriations Recommendation $82.8 billion
FY 19 Administration Advance Appropriations Request
Medical Care Collections
Total

The IBVSOs have serious concerns about the FY 18 advance
appropriations requested by the previous Admin-istration and
subsequently approved by Congress. Last year, the former Secretary of
Veterans Affairs openly admitted that the FY 18 advance appropriations
request was significantly short. He also indicated that the new
Administration and Congress would have to correct this shortfall. We
are concerned that this new Administra-tion has not yet indicated its
desire to correct this problem before it has catastrophic consequences
for the VA. If the new Administration's budget request fails to
properly address this issue, it is imperative that Congress takes
necessary action to properly resource the VA health care system.
We also believe it is necessary to consider the projected
expenditures under the Choice program authority that the previous
Administration planned in FY 17 and how that impacts the baseline that
will dictate the fund-ing needs for FY 18. The previous Administration
assumed as much as $5.7 billion in spending through the Choice program
in FY 17, on top of the Medical Services discretionary funding and the
newly created Medical Community Care account. That amount has now been
revised to approximately $2.9 billion. This means that the VA projected
to spend more than $59.0 billion in Medical Services and more than
$71.0 billion in over-all Medical Care funding in FY 17. These
considerations inform the decisions of The Independent Budget to
establish our baseline for our funding recommendations for both FY 18
and the advance appropriations for FY 19.
For FY 18, the IB recommends approximately $77.0 billion in total
medical care funding. Congress previously approved only $70.0 billion
for this account for FY 18 (which includes an assumption of
approximately $3.6 billion in medical care collections). The IB's
recommendation also considers the approximately $1 billion VA is
expected to have remaining in the Veterans Choice Fund and expected
demand for care, including community care, that will not diminish or go
away if the Choice Program expires.

Medical Services

Appropriations for FY 18
FY 18 IB Recommendations $64.5 billion
FY 18 Revised Administration Request
Medical Care Collections $3.6 billion
Subtotal
FY 18 Enacted Advance Appropriations $54.3 billion
Medical Care Collections $3.6 billion
Subtotal $57.9 billion

For FY 18, The Independent Budget recommends $64.5 billion for
Medical Services. This recommendation is a reflection of multiple
components. These components include the following recommendations:

Current Services Estimate $60,897,313,000
Increase in Patient Workload $1,595,242,000
Additional Medical Care Program Cost $2,001,000,000
Total FY 18 Medical Services $64,493,555,000

The current services estimate reflects the impact of projected
uncontrollable inflation on the cost to provide services to veterans
currently using the system. This estimate also assumes a 1.5 percent
increase for pay and benefits across the board for all VA employees in
FY 18.
Our estimate of growth in patient workload is based on a projected
increase of approximately 90,000 new unique patients. These patients
include priority group 1*-8 veterans and covered non-veterans. We
estimate the cost of these new unique patients to be approximately $1.4
billion. The increase in patient workload also includes a projected
increase of 58,000 new Operation Enduring Freedom and Operation Iraqi
Freedom (OEF/OIF) enrollees, as well as Operation New Dawn (OND)
veterans at a cost of approximately $242 million. The increase in
utilization among OEF/OIF/OND veterans is supported by the average
annual increase in new users through the third quarter of FY 2016.
The Independent Budget believes that there are additional projected
medical program funding needs for VA. Those costs total approximately
$2.0 billion. Specifically, we believe there is real funding needed to
address the array of long-term-care issues facing VA, including the
shortfall in institutional capacity; to provide additional centralized
prosthetics funding (based on actual expenditures and projections from
the VA's Prosthetics and Sensory Aids Service); funding to expand and
improve services for women veterans; funding to support the recently
approved authority for reproductive services, to include in vitro
fertilization (IVF); and funding to allow VA to MEET the building costs
for emergency care as dictated by the Staab court ruling.

Long-Term Services and Supports

The Independent Budget recommends $535 million for FY 18. This
recommendation reflects the fact that there was a significant increase
in the number of veterans receiving Long Term Services and Supports
(LTSS) in 2016. Unfortunately, due to loss of authorities-specifically
fee-care no longer being authorized, provider agreement authority not
yet enacted, and the inability to use Choice funds for all but skilled
nursing care-to purchase appropriate LTSS care particularly for home-
and community-based care, we estimate an increase in the number of
veterans using the more costly long-stay and short-stay nursing home
care.

Prosthetics and Sensory Aids

In order to meet the increase in demand for prosthetics, the IB
recommends an additional $320 million. This increase in prosthetics
funding reflects a similar increase in expenditures from FY 2016 to FY
17 and the expected continued growth in expenditures for FY 18.

Women Veterans

The Medical Services appropriation should be supplemented with $110
million designated for women's health care programs, in addition to
those amounts already included in the FY 18 baseline. These funds would
be used to help the Veterans Health Administration deal with the
continuing growth in women veterans coming to VA for care, including
coverage for gynecological, prenatal, and obstetric care, other gender-
specific services, and for expansion and repair of facilities hosting
women's care to improve privacy and safety of these facilities. The new
funds would also aid VHA in making its cultural transformation to
ensure women veterans are made to feel welcome at VA, and provide means
for VA to improve specialized services for preventing suicide and
homelessness and improvements for mental health and readjustment
services for women veterans.

Reproductive Services (to Include IVF)

Last year, Congress authorized appropriations for the remainder of
FY 17 and FY 18 to provide reproductive services, to include in vitro
fertilization (IVF), to service-connected catastrophically disabled
veterans whose injuries preclude their ability to conceive children.
The VA projects that this service will impact less than 500 veterans
and their spouses in FY 18. The VA also anticipates an expenditure of
no more than $20 million during that period. However, these services
are not directly funded; therefore, the IB recommends approximately $20
million to cover the cost of reproductive services in FY 18.

Emergency Care

Recently, the VA has received serious scrutiny for its
interpretation of legislation dating back to 2009, which required it to
pay for veterans who sought emergency care outside of the VA health
care system. The Richard W. Staab v. Robert A. McDonald ruling handed
down by the US Court of Appeals for Veterans Claims last year, places
the financial responsibility of these emergency care claims squarely on
the VA. Although VA continues to appeal this decision, it is not
expected to prevail in this case leaving itself with a more than $10
billion dollar obligation over the next 10 years. The Staab ruling is
estimated to cost VA approximately $1.0 billion in FY 18 and about $1.1
billion in FY 19, which the IB has included in our recommendations.

Advance Appropriations for FY 19

FY 19 IB Advance Appropriations Recommendations $69.5 billion
FY 19 Administration Advance Appropriations Request
Medical Care Collections
Subtotal

The Independent Budget once again offers baseline projections for
funding through advance appropriations for the Medical Care accounts
for FY 19. While the enactment of advance appropriations for VA medical
care in 2009 helped to improve the predictability of funding requested
by the Administration and approved by Congress, we have become
increasingly concerned that sufficient corrections have not been made
in recent years to adjust for new, unexpected demand for care. As
indicated previously, we have serious concerns that the previous
Administration significantly underestimated its FY 18 advance
appropriations request. This trend cannot be allowed to continue,
particularly as Congress continues to look for ways to reduce
discretionary spending, even when those reductions cannot be justified.
For FY 19, The Independent Budget recommends approximately $69.5
billion for Medical Services. Our Medical Services level includes the
following recommendations:

Current Services Estimate $66,334,946,000
Increase in Patient Workload $1,589,892,000
Additional Medical Care Program Cost $1,526,000,000
Total FY 17 Medical Services $69,450,838,000

Our estimate of growth in patient workload is based on a projected
increase of approximately 78,000 new patients. These new unique
patients include priority group 1*-8 veterans and covered nonveterans.
We estimate the cost of these new patients to be approximately $1.3
billion. This recommendation also reflects an assumption that more
veterans will be accessing the system as VA expands its capacity and
services and we believe that reliance rates will increase as veterans
examine their health care options as a part of the Choice program. The
increase in patient workload also assumes a projected increase of
62,500 new OEF/OIF and OND veterans, at a cost of approximately $272
million.
Last, as previously discussed, the IBVSOs believe that there are
additional medical program funding needs for VA. In order to meet the
increase in demand for prosthetics, the IB recommends an additional
$330 million, reflecting the ever-growing cost of more advanced
prosthetics being prescribed for seriously disabled veterans. We
believe that VA should invest a minimum of $120 million as an advance
appropriation in FY 19 to expand and improve access to women veterans'
health care programs. Our additional program cost recommendation
includes continued investment of $20 million to support extension of
the authority to provide reproductive services to the most
catastrophically disabled veterans. Finally, VA's cost burden for
finally paying emergency care claims dictated by the Staab ruling
exceeds $10.0 billion over 10 years and will require at least $1.1
billion in FY 19 alone.

Medical Support and Compliance

FY 18 IB Recommendations $6.658 billion
FY 18 Revised Administration Request
FY 18 Enacted Advance Appropriations $6.654 billion
FY 19 IB Advance Appropriations Recommendations $6.793 billion
FY 19 Administration Advance Appropriations Request

For Medical Support and Compliance, The Independent Budget
recommends $6.7 billion for FY 18. Our projected increase reflects
growth in current services based on the impact of inflation on the FY
17 appropriated level. Additionally, for FY 19 The Independent Budget
recommends $6.8 billion for Medical Support and Compliance. This amount
also reflects an increase in current services from the FY 18 advance
appropriations level.

Medical Facilities

FY 18 IB Recommendations $5.796 billion
FY 18 Revised Administration Request
FY 18 Enacted Advance Appropriations $5.435 billion
FY 19 IB Advance Appropriations Recommendations $6.563 billion
FY 19 Administration Advance Appropriations Request

For Medical Facilities, The Independent Budget recommends $5.8
billion for FY 18, nearly $400 million more than the enacted advance
appropriation. Our Medical Facilities recommendation includes $1.35
billion for Non-Recurring Maintenance (NRM). The Administration's
request over the past two budget cycles represented a wholly inadequate
level for NRM funding, particularly in light of the actual expenditures
that were outlined in the budget justification. While VA has actually
spent on average approximately $1.3 billion yearly for NRM, the
Administration has requested on average only $460 million for NRM. This
request level is clearly insufficient. This decision means that VA is
forced to divert funds programmed for other purposes to meet this need.
While the VA's projected NRM expenditure for FY 18 is higher than in
years past, it still remains insufficient.
The Independent Budget recommends approximately $6.6 billion for
Medical Facilities for FY 19. Our FY 19 advance appropriation
recommendation also includes $1.35 billion for NRM. Last year the
Administration's recommendation for NRM reflected a projection that
would place the long-term viability of the health care system in
serious jeopardy. This deficit must be addressed.

Medical and Prosthetic Research

FY 18 IB Recommendations $713 million
Million Veteran Program $65 million
Total IB Medical and Prosthetic Research $778 million
FY 18 Administration Request
FY 17 Enacted Final Appropriation $675 million

The VA Medical and Prosthetic Research program is widely
acknowledged as a success on many levels, and contributes directly to
improved care for veterans and an elevated standard of care for all
Americans. The research program is an important tool in VA's
recruitment and retention of health care professionals and clinician-
scientists to serve our nation's veterans. By fostering a spirit of
research and innovation within the
VA medical care system, the VA research program ensures that our
veterans are provided state-of-the-art medical care.

Investing Taxpayers' Dollars Wisely

Despite documented success of VA investigators across many fields,
the amount of appropriated funding for VA research since FY 2010 has
lagged far behind annual biomedical research inflation rates, resulting
in a net loss over these years of nearly 10 percent of the program's
overall purchasing power. As estimated by the Department of Commerce,
Bureau of Economic Analysis, and the National Institutes of Health, for
VA research to maintain current service levels, the Medical and
Prosthetic Research appropriation should be increased in FY 18 by 2.7
percent over the FY 17 baseline simply to keep pace with inflation.
With this in mind, The Independent Budget recommends approximately $17
million to meet current services demands for research.
Numerous meritorious proposals for new VA research cannot be funded
without an infusion of additional funding for this vital program.
Research awards decline as a function of budgetary stagnation, so VA
may resort to terminating ongoing research projects or not funding new
ones, and thereby lose the value of these scientists' work, as well as
their clinical presence in VA health care. When denied research
funding, many of them simply choose to leave the VA.

Emerging Research Needs

In addition to covering uncontrollable inflation, the IBVSOs
believe Congress should appropriate an additional $17 million for FY
18, for expanding research on emerging conditions prevalent among newer
veterans, as well as continuing VA's inquiries in chronic conditions of
aging veterans from previous wartime periods. For example, additional
funding will help VA support areas that remain critically underfunded,
including:

Post-deployment mental health concerns such as PTSD,
depression, anxiety, and suicide in the veteran population;
The gender-specific health care needs of the VA's growing
population of women veterans;
New engineering and technological methods to improve the
lives of veterans with prosthetic systems that replace lost limbs or
activate paralyzed nerves, muscles, and limbs;
Studies dedicated to understanding chronic multi-symptom
illnesses among Gulf War veterans and the long-term health effects of
potentially hazardous substances to which they may have been exposed;
and
Innovative health services strategies, such as telehealth
and self-directed care, that lead to accessible, high-quality, cost-
effective care for all veterans.

Million Veteran Program (MVP)
The VA Research program is uniquely positioned to advance genomic
medicine through the MVP, an effort that seeks to collect genetic
samples and general health information from 1 million veterans over the
next five years. When completed, the MVP will constitute one of the
largest genetic repositories in existence, offering tremendous
potential to study the health of veterans. To date, more than 400,000
veterans have enrolled in MVP. The VA estimates it currently costs
around $75 to sequence each veteran's blood sample. Under the
President's Precision Medicine Initiative, the IBVSOs recommend $65
million to enable VA to process one quarter of the MVP samples
collected.
GENERAL OPERATING EXPENSES

Veterans Benefits Administration

FY 18 IB Recommendations $3.135 billion
FY 18 Administration Request
FY 17 Enacted Final Appropriations $2.856 billion

The Veterans Benefits Administration (VBA) account is comprised of
six primary divisions. These include Compensation; Pension; Education;
Vocational Rehabilitation and Employment (VR&E); Housing; and
Insurance. The increases recommended for these accounts primarily
reflect current services estimates with the impact of inflation
representing the grounds for the increase. However, two of the
subaccounts-Compensation and VR&E-also reflect a substantial increase
in requested staffing to meet the rising demand for those benefits.
The IB recommends approximately $3.135 billion for the VBA for FY
18. This amount reflects an increase of approximately $279 million over
the enacted FY 17 appropriations level. Our recommendation includes
approximately $183 million in additional funds in the Compensation
account above current services, and approximately $32 million more in
the VR&E account above current services to provide for new full-time
equivalent employees (FTEE).

Compensation Service Personnel 1750 New FTEEs $183 million

VBA continues to produce record numbers of claims while maintaining
an emphasis on quality; however, FY 2016 signals a troubling trend.
Increases are taking place in total disability claims inventory,
backlogged claims, the amount of time it takes to process a claim and
appeals workload. These increases can be attributed to multiple factors
such as an increase in the number of claims and appeals being filed,
the lack of adequate resources to keep pace with demand and the
curtailing of mandatory overtime.
Over the past few years, VBA has made significant progress in
reducing the disability compensation backlog, which at its peak, stood
at over 600,000 claims in March 2013. Today, the claims backlog stands
at roughly 96,000 claims, a decrease of nearly 85 percent from its
peak, but an increase of roughly 10,000 claims over the previous year.
VA defines a backlogged disability claim as one pending over 125 days.
In 2009, VBA issued decisions on 2.74 million medical issues; that
number more than doubled to 5.76 million in FY 2016, but was less than
FY 2015 when it issued 6.35 million decisions on medical issues. In
March of 2013, VBA required roughly 282 days to process a claim. At the
close of FY 2016, VBA reported that on average, it took 123 days to
process a claim; however, in FY 2015, VBA reported that it took, on
average, 92 days to complete a claim.
VBA's total disability claims inventory is also continuing to rise.
In FY 2015, their pending claims inventory stood at about 352,000
claims; today, VBA has a total inventory closer to 400,000 claims. This
means that one quarter of VBA's total inventory is considered
backlogged. Furthermore, VBA has an inventory of nearly 584,000 for
non-disability rating claims.
It will take a blend of technology and people to enable VBA to
provide veterans and their dependents with more timely and accurate
decisions. Necessary personnel increases should not be tempered against
hopes of future technological gains. IT systems such as the Veterans
Benefits Management System (VBMS), e-Benefits, the Stakeholder
Enterprise Portal (SEP) and now, the National Work Queue, though
beneficial for enabling VBA keep pace with their overall workload, the
full effect of these systems may not be realized for years.
Recognizing that rising workload, particularly claims for
disability compensation, could not be addressed without additional
personnel, Congress provided VBA with more than 1,300 FTEE between FY
2013 and FY 17, primarily in Compensation Service. In FY 2016 alone,
Congress authorized VBA to hire an additional 770 FTEE. The new FTEE
were to be purposed for non-rating activities. However, taking into
consideration VBA's total workload, including appeals, these increases
in personnel have not been sufficient to keep pace with incoming
workload, or to reduce the backlogs in these non-rating areas.
VBA's previous concentrated efforts to reduce the claims backlog
caused new backlogs in other activities including appeals. As of
February 2017, there were close to 460,000 appeals pending, roughly
360,000 within the jurisdiction of the VBA and the remainder within the
jurisdiction of the Board of Veterans' Appeals. This growing appeals
backlog is a result of VBA's former shift in focus and resources to
process disability claims, as evidenced by the fact that Decision
Review Officers (DRO) and Quality Review Specialists (QRS) were
performing development and rating duties during both regular and
overtime working hours at many VA regional offices (VARO).
In order for VBA to produce timely and quality decisions, it will
require sufficient resources and must modernize its appeals process.
Appeals modernization and reform legislation that was introduced in
114th and 115th Congress will help to significantly streamline and
simplify appeals processing.
For FY 18, the IBVSOs recommend an additional 1,750 FTEE. VBA will
require this infusion of resources to manage their overall rising
workload. Furthermore, as VBA no longer utilizes mandatory overtime for
claims processing, true personnel needs must be addressed.
1,000 FTEE would be dedicated to processing appeals at VBA in an
effort to eliminate the backlog of 360,000 appeals within the next
three years. Depending on the progress made over the next year, further
personnel increases may still be necessary to address this appeals
backlog.
350 FTEE would be dedicated to address the growing backlog of non-
rating related work such as dependency claims. 300 FTEE would be
dedicated for claims processing to address the incremental rise in the
claims inventory and backlog.
100 FTEE would be dedicated to the Fiduciary program to meet the
growing needs of veterans participating in VA's Caregiver Support
programs. This recommendation is also based on a July 2015 VA Inspector
General report on the Fiduciary program that found, ``.Field Examiner
staffing did not keep pace with the growth in the beneficiary
population, [and] VBA did not staff the hubs according to their
staffing plan..''
Finally, as technology and work processes continue to evolve and
change the landscape of claims and appeals processing, the IBVSOs
believe that more accurate staffing and production models will be
required to determine future VBA resource requirements.

VR&E Service Personnel 266 New FTEEs $32 million

The Vocational Rehabilitation and Employment Service (VR&E), also
known as the VetSuccess program, provides critical counseling and other
adjunct services necessary to enable service disabled veterans to
overcome barriers as they prepare for, find, and maintain gainful
employment. VetSuccess offers services on five tracks: re-employment,
rapid access to employment, self-employment, employment through long-
term services, and independent living.
An extension for the delivery of VR&E assistance at a key
transition point for veterans is the VetSuccess on Campus (VSOC)
program deployed at 94 college campuses. Additional VR&E services are
provided at 71 select military installations for active duty service
members undergoing medical separations through the Department of
Defense and VA's joint Integrated Disability Evaluation System (IDES).
These additional functions of VR&E personnel are undoubtedly beneficial
to disabled veterans; however, staffing levels throughout VR&E services
must be commensurate with current and future demands and their global
responsibilities.
Over the past few years, program participation has increased by 15
percent overall, increasing by 7.3 percent in FY 2015, 3.8 percent in
FY 2016, and in FY 17, a 4 percent increase is estimated. In FY 17, the
Administration failed to request adequate staffing levels to keep pace
with anticipated demand. In fact, for both FY 2016 and FY 17, the
Administration flat-lined the VR&E request for direct personnel at
1,442.
A steady growth in program participation each year, without
commensurate requests for personnel to keep pace with increased program
participation will leave service-connected veterans waiting longer for
critical services. As VBA continues to expand VR&E eligibility to more
veterans, due to increased claims processing and the award of new
service-connected disabilities due to new presumptive disabilities, it
is not unreasonable to foresee a rise in program participation within
VR&E. Based on historical participation rates, the IBVSOs project that
total program participation for FY 18 will grow by at least 5 percent
for total caseload of close to 155,000.
Last year, Congress recognized the need for a more balanced client-
to-counselor ratio with the enactment of Public Law 114-223, Section.
254. This provision authorizes the Secretary to use appropriated funds
to ensure the ratio of veterans to full-time employment equivalents
does not exceed 125 veterans to one full-time employment equivalent.
In July 2015, VR&E reported that its average Vocational
Rehabilitation Counselor (VRC)-to-client ratio had risen to 1:139.
Unless significant new funding is provided, VA would be required to
redirect appropriated resources from other vital programs to achieve
this ratio within VR&E. Therefore, VR&E's full funding requirements
must be included in its budget request and not syphoned away from other
programs to reach the 125-to-1 ratio. Even this benchmark may even be
too high when taking into consideration the overall responsibilities of
VRCs, such as VSOC, IDES and other outreach initiatives.
In order to achieve and sustain a 1:125 counselor-to-client ratio
in FY 18, we estimate that VR&E would need 266 new FTEE, for a total
workforce of 1550 FTEE, to manage an active caseload and provide
support services to 155,000 VR&E participants. At a minimum, three-
quarters, of the new hires should be VRCs dedicated to providing direct
services to veterans. This increase in personnel accounts for the
expected growth in VR&E claim filings, program participation,
collateral duties performed outside of general case management, the
flat-lined personnel requests for the previous two fiscal years and our
previous 158 FTEE request for last fiscal year.
While increased staffing levels are required to provide efficient
and timely services to veterans utilizing VR&E services, it is also
essential that these increases be properly distributed throughout all
of VR&E to ensure that VRC caseloads are equitably balanced among
VAROs, which typically experience variable caseloads. As an example, a
January 2014 GAO Report found the Cleveland VARO's VRC ratio to be
1:206 and in the Fargo VARO, the ratio was 1:64.

General Administration

FY 18 IB Recommendations $406 million
FY 18 Administration Request
FY 17 Enacted Final Appropriations $345 million

The General Administration account is comprised of ten primary
divisions. These include the Office of the Secretary; the Office of the
General Counsel; the Office of Management; the Office of Human
Resources and Administration; the Office of Enterprise Integration; the
Office of Operations, Security and Preparedness; the Office of Public
Affairs; the Office of Congressional and Legislative Affairs; and the
Office of Acquisition, Logistics, and Construction; and the Veterans
Experience Office (VEO). This marks the first year that the VEO has
been included in the divisions of General Administration. Additionally,
a number of the divisions reflect changes to the structure and
responsibilities of those divisions. For FY 18, the IB recommends
approximately $406 million, an increase of more than $60 million over
the FY 17 appropriated level. This increase primarily reflects an
increase in current services based on the impact of uncontrollable
inflation across all of the General Administration accounts. It also
reflects the establishment of the VEO within the General Administration
accounts.

Board of Veterans' Appeals

FY 18 IB Recommendations $158 million
FY 18 Administration Request
FY 17 Enacted Final Appropriations $156 million

Faced with a growing number of claims and resultant appeals that
could no longer be ignored, Congress authorized the Board of Veterans'
Appeals (Board) to increase their FTEE by 242 over FY 2016 authorized
levels, bringing their total authorized staffing to 922 FTEE for FY 17.
For FY 18, the IBVSOs recommend no additional increases in FTEE;
however, the Board must be permitted to hire their full complement of
922 FTEE. Today, the Board's total FTEE strength is close to 855 FTEE.
Over the past few years, the Board has averaged approximately 85 appeal
dispositions per FTEE, producing 55,532 decisions in FY 2014, 55,713
decisions in FY 2015 and are expected to issue somewhere close to
56,000 decisions in FY 2016. If the Board were to reach their full
complement of 922 FTEE, at 85 appeal dispositions per FTEE, they could
be expected to issue close to 78,000 decisions.
As the number of claims processed annually continues to rise as a
result of the increased capacity of VBA, the number of appeals is also
expected to continue rising. Even with increased accuracy in rating
board decisions, on average 10 to 12 percent of claims decisions are
appealed. Thus, assuming VBA processes 1.5 million claims in 2018-a
reasonable estimate considering VBA processed over 1.4 million claims
in both FY 2014 and FY 2015-roughly 150,000 appeals would enter the
system, with roughly half of them continuing on to the Board for
appellate review. In order for the Board to keep pace with only this
new incoming workload and not those appeals already in the system,
their FTEE levels would have to be adjusted accordingly, unless
comprehensive reforms are adopted.
In the 114th Congress, significant appeals-reform legislation was
introduced. The legislative language reflected significant efforts of a
working group formed in March 2016 that consisted of the IBVSOs, other
VSO stakeholders, and leaders within VBA and the Board. This
legislation would have fundamentally reformed and streamlined the
overall appeals process.
Similar legislation has been introduced in the 115th Congress.
Without these reforms, traditional staffing increases will be required
to meet current and future workload requirements. As it stands today,
to keep pace with their overall workload, the Board will need to
continue adding new attorneys, veteran law judges, as well as
sufficient support staff.
Additional staffing is just one component that is needed to
effectively manage the appeals workload. Seamless and functional IT
systems are also critical to ensure the Board is able to issue accurate
and timely decisions. There must be integration with the Veterans
Benefit Management System, but also the flexibility for their Board to
perform work functions centric and independent to the appeal process.
Over the past few years, the Board has received resources and
developed partnerships to modernize its IT systems, which is essential
to improving quality and timeliness of appeal decisions. Part of this
modernization involves replacement of the outdated legacy appeals
tracking system, (VACOLS). In order to accomplish this modernization,
the Board partnered with The United States Digital Service (USDS). The
USDS is a White House tech initiative that works across the Federal
government to enhance and improve IT services.
The USDS team has been working on multiple integration tools, one
of which was Caseflow Certification that became operable in April 2016.
Caseflow Certification is an IT enhancement that automatically detects
if certain documents have been secured before moving forward in the
appeal process. The partnership between the USDS team must be allowed
to reach its full maturity, so the Board can reap the rewards of their
innovations that are designed to improve the appeals process for
waiting appellants.
Lastly, the USDS must be allowed to continue to operate in the non-
traditional, agile way it has pioneered at VA so that it can continue
to pursue the best-possible approach to modernization instead of being
locked down into an inflexible multi-year development plan that that
cannot possibly anticipate the lessons that will be learned during
development.
DEPARTMENTAL ADMINISTRATION AND MISCELLANEOUS PROGRAMS

Information Technology (IT)

FY 18 IB Recommendations $4.362 billion
FY 18 Administration Request
FY 17 Enacted Final Appropriations $4.278 billion

In contrast to significant department-level IT failures, the VHA
over more than 30 years successfully developed, tested, and implemented
a world-class comprehensive, integrated electronic health record (EHR)
system. The current version of this EHR system, based on the VHA's
self-developed VistA public domain software, sets the standard for EHR
systems in the United States and was a trailblazer for years. However,
parts of VistA require either modernization or replacement. For
example, one of its component parts, the outdated scheduling module,
contributed to VA's recent access to care crisis. According to VA, this
module is being replaced on an expedited basis.
For FY 18, the IBVSOs recommend approximately $4.4 billion for the
administration of the VA's IT program. This recommendation includes no
new funding above the planned current services level. Significant
resources have already been invested in VA's IT programs in recent
years, and we believe proper allocation of existing resources can allow
VA to fulfill its missions while modernizing its systems. We continue
to call for acceleration of the VBMS, and the implementation of an
appropriate solution for the Board of Veterans Appeals IT system.
Additionally, it is critical to ensure that sufficient funds are
directed at the incremental costs of implementation for the new
Veterans Choice Program (VCP). The VA identified a series of one time
incremental costs for IT systems in order to redesign, develop, and
deliver systems and technology solutions for the new VCP. Those
incremental costs range from $421 million in Phase I of the project, to
$606 million in Phase II, and finally $851 million in Phase III.
Without having a clear plan for when each of these Phases might
actually take place, The Independent Budget has chosen not to
explicitly recommend these funds in our IT funding recommendation.
However, we believe Congress must consider these costs in an effort to
assist the VA in implementing the new VCP.

National Cemetery Administration (NCA)

FY 18 IB Recommendations $291 million
FY 18 Administration Request
FY 17 Enacted Final Appropriations $286 million

NCA, which receives funding from eight appropriations accounts,
administers numerous activities to meet the burial needs of our
nation's veterans.
In a strategic effort to meet the burial and access needs of our
veterans and eligible family members, the NCA continues to expand and
improve the national cemetery system, by adding new and/or expanded
national cemeteries. Not surprising, due to the opening of additional
national cemeteries, the NCA is expecting an increase in the number of
annual veteran interments through 2017 to roughly 130,000, up from
125,180 in 2014; this number is expected to slowly decrease to 126,000
by 2020. This much need expansion of the national cemetery system will
help to facilitate the projected increase in annual veteran interments
and will simultaneously increase the overall number of graves being
maintained by the NCA to 3.7 million in 2018 and 3.9 million by 2020.
Even as the NCA continues to add veteran burial space to its
expanding system, many existing cemeteries are exhausting their
capacity and will no longer be able to inter casketed or cremated
remains. In fact, as of 2016, the NCA expects four national cemeteries-
Baltimore, Maryland; Nashville, Tennessee; Danville, Virginia; and
Alexandria, Virginia-to reach their maximum capacity and will be closed
to first interments, though they will continue to accept second
interments.
In order to minimize the dual negative impacts of increasing
interments and limited veteran burial space, the NCA needs to:

Continue developing new national cemeteries;
Maximize burial options within existing national
cemeteries;
Strongly encourage the development of state veteran
cemeteries; and
Increase burial options for veterans in highly rural
areas.

Additional areas of growth within the NCA system include:

An increase in the issuance of Presidential Memorial
Certificates, which is expected to increase from approximately 654,000
in 2013 to more than 870,000 in 2017;
The expected increase in the burial of Native American,
Alaska Native, and Pacific Islander veterans; and
The possible increase, thanks to local historians and
other interested stakeholders, in requests for headstones or markers
for previously unidentified veterans.

Budgetary Resources for NCA Programs

With the above considerations in mind, The Independent Budget
recommends $291 million for FY 18 for the Operations & Maintenance of
the NCA. The IBVSOs believe that this should include a minimum of $20
million for the National Shrine Initiative. Since FY 2013, national
shrine funding has decreased each year. The NCA must continue to invest
sufficient resources in the National Shrine Initiative to ensure that
this important work is completed.

Office of the Inspector General

FY 18 IB Recommendations $163 million
FY 18 Administration Request
FY 17 Enacted Final Appropriations $160 million

The Office of Inspector General (OIG) received a significant
infusion of new resources for FY 2016 due to the high volume of work
that it has produced. And yet, the OIG has been under significant
scrutiny over the past two years. We believe that the work requirements
assigned to this office have placed it under great stress and
potentially stretched it beyond its capacity. That being said, the
IBVSOs believe that the office does not warrant a staffing increase at
this time. We believe that the substantial increase that the OIG
received in FY 2016 should allow it to expand its staffing sufficiently
to meet the ever-growing demands on its work. With this in mind, the IB
recommends funding based on current services for FY 18 of approximately
$163 million.
C0NSTRUCTION PROGRAMS

Major Construction

FY 18 IB Recommendations $1.50 billion
FY 18 Administration Request
FY 17 Enacted Final Appropriations $528 million

Currently, VA has 24 major construction projects that are partially
funded, some of which were originally funded in FY 2004, that need to
be put on a clear path to completion. There are an additional 3
projects that are in the design phase. Outside of the partially funded
major projects list are major construction projects at the top of the
FY 17 priority list that are seismic in nature. These projects cannot
take a strategic pause while Congress and VA decide how to manage
capital infrastructure long-term.
Of those 24 partially funded projects, VA will need to invest more
than $3.5 billion to complete them all. Of the top five projects on the
priority list, two of them are seismic deficiencies, two are the core
mission of VA - a mental health clinic and a spinal cord injury center
- and one that is an addition to an existing facility. The total cost
of these projects is $1.2 billion.
The IBVSOs recommend that Congress appropriate at least $1.5
billion for major construction in FY 18. This amount will fund either
the ``next phase'' or fund ``through completion'' all existing
projects, and begin advance planning and design development on six
major construction projects that are the highest ranked on VA's
priority list.

Research Infrastructure

State-of-the-art research requires state-of-the-art technology,
equipment, and facilities. For decades, VA construction and maintenance
appropriations have not provided the resources VA needed to maintain,
upgrade, or replace its aging research laboratories and associated
facilities. The impact of funding shortages was vividly demonstrated in
a Congressionally-mandated report that found major, system wide
deficits in VA research infrastructure. Nearly 40 percent of the
deficiencies found were designated ``Priority 1: Immediate needs,
including corrective action to return components to normal service or
operation; stop accelerated deterioration; replace items that are at or
beyond their useful life; and/or correct life safety hazards.''
The report cited above estimated that approximately $774 million
would be needed to correct all deficiencies found, but only a fraction
of that funding has been appropriated since this report was made public
in 2012. The VA Office of Research and Development is conducting a
follow-up study of over a dozen key research sites. This update should
be available in mid-2016, the results of which can be used to guide VA
and Congress in further investment in VA research infrastructure.
Nevertheless, Congress needs to begin now to correct the most urgent of
these known infrastructure deficiencies, especially those that concern
life-safety hazards for VA scientists and staff, and for veterans who
volunteer as research subjects.
The IBVSOs believe that Congress should break this chronic
stalemate and designate funds to improve specific VA research
facilities in FY 17 and in subsequent years. In order to begin to
address these known deficits, the IBVSOs recommend Congress approve at
least $50 million for up to five major construction projects in VA
research facilities.
The full report discussed above is available at www.aamc.org/varpt.
The House reports associated with this issue are House Report 109-95,
and House Report 111-559.

Minor Construction

FY 18 IB Recommendations $700 million
FY 18 Administration Request
FY 17 Enacted Final Appropriations $372 million

In FY 17, Congress appropriated $372.1million for minor
construction projects. Currently, there are still approximately 600
minor construction projects that need funding to close all current and
future year gaps within 10 years. To complete all of these current and
projected projects, VA will need to invest between $6.7 and $8.2
billion in minor construction over the next decade.
In August 2014, the President signed the Veterans Access, Choice,
and Accountability Act of 2014 (VACAA), Public Law 133-146. In this
law, Congress provided $5 billion to increase healthcare access by
increasing medical staffing levels and investing in infrastructure. VA
has developed a spending plan that that obligated $511 million for 64
minor construction projects over a two-year period.
While this infusion of funds has helped, there are still hundreds
of minor construction projects that need funding for completion. It is
important to remember that these funds are a supplement to, not a
replacement of, annual appropriations for minor construction projects.
The IBVSOs recommend that Congress fund VA's minor construction account
at $700 million in an effort to close all identified gaps within 10
years.
Leasing: Historically VA has submitted capital leasing requests
that meet the growing and changing needs of veterans. VA has again
requested an adequate amount, $283.7 million for its FY 17 leasing
needs. While VA has requested adequate resources, Congress must find a
way to authorize and appropriate leasing projects in a way that
precludes the full cost of the lease being accounted for in the first
year. There are currently 18 major medical leases from FY 2016 and six
from FY2017 that Congress must still authorize. Delays in authorization
of these leases has a direct impact on VA's ability to provide time
care to veterans in their communities. Congress must authorize these
leases.

Grants for State Extended-Care Facilities
(State Home Construction Grants)

FY 18 IB Recommendations $300 million
FY 18 Administration Request
FY 17 Enacted Final Appropriations $90 million
FY 17 IB Recommendation $200 million

Grants for state extend-care facilities, commonly known as state
home construction grants, are a critical element of federal support for
the state veterans' homes. The state home program is a very successful
federal-state partnership in which VA and states share the cost of
constructing and operating nursing homes and domiciliaries for
America's veterans. State homes provide over 30,000 nursing home and
domiciliary beds for veterans, their spouses, and gold-star parents of
deceased veterans. Overall, state homes provide more than half of VA's
long-term-care workload, but receive less than 15 percent of VA's long-
term-care budget. VA's basic per diem payment for skilled nursing care
in state homes is significantly less than comparable costs for
operating VA's own long-term-care facilities. This basic per diem paid
to state homes covers approximately 30 percent of the cost of care,
with states responsible for the balance, utilizing both state funding
and other sources. On average, the daily cost of care for a veteran at
a State Home is less than 50 percent of the cost of care at a VA long-
term-care facility.
States construction grants help build, renovate, repair, and expand
both nursing homes and domiciliaries, with states required to provide
35 percent of the cost for these projects in matching funding. VA
maintains a prioritized list of construction projects proposed by state
homes based on specific criteria, with life and safety threats in the
highest priority group. Only those projects that already have state
matching funds are included in VA's Priority List Group 1 projects,
which are eligible for funding. Those that have not yet received
assurances of state matching funding are put on the list among Priority
Groups 2 through 8.
In FY 17, the estimated federal share for the 99 state home
construction grants requests that have been submitted by states was
almost $1.1 billion. Of that amount, the states had already secured
their share of matching funds required to put them in the Priority
Group List 1 for 57 projects that will require $639 million in federal
matching funds, an increase of $89 million over FY 2016. Last year, VA
requested only $85 million and the IBVSOs had recommended $200 million;
Congress ultimately appropriated $90 million funding for FY 2016, which
will barely keeps up with the increase in Priority Group 1 projects.
With almost $1 billion in state home projects still in the pipeline,
the IBVSOs recommend $300 million for the state home construction grant
program for FY 17 in order to begin seriously addressing the remaining
$550 million backlog of Priority 1 projects, as well as the $433
million of Priority 2-8 projects soon to receive matching funding from
the States.

Grants for State Veterans Cemeteries

FY 18 IB Recommendations $46 million
FY 18 Administration Request
FY 17 Enacted Final Appropriations $46 million

The State Cemetery Grant Program allows states to expand veteran
burial options by raising half the funds needed to build and begin
operation of veterans' cemeteries. The NCA provides the remaining
funding for construction and operational funds, as well as cemetery
design assistance. As of September 2014, there were 49 projects with
state matching funds.
Funding eight projects in FY 18 will provide burial options for an
additional 148,000 veterans. To fund these projects, Congress must
appropriate $46 million.

Questions For The Record

HVAC MAJORITY
Questions #3-10, 13-21, 23-26, 28-35, 38, 40-44, 46, 49, 51-53, 63, 64,
66

Question 3: Does the Department plan to require Decision Review
Officers (DROs) to work overtime to reduce the appeals backlog? If so,
how long does the Department anticipate requiring DROs to work
mandatory overtime? If not, please explain why.

VA Response: During the first three quarters of this Fiscal Year
(FY), regional office (RO) appeals team employees worked optional
overtime on appeals. At the end of the third quarter, the Veterans
Benefits Administration (VBA) Appeals Management Office (AMO) had
expended $7.6 million in optional overtime. Combined with the increased
focus on working the oldest appeals, RO appeals production was
approximately 14.9 percent above the FY 2017 production target and
approximately 26.3 percent above FY 2016 production as of the end June
2017. However, to ensure timely delivery of benefits to Veterans during
the last quarter, appeals team Decision Review Officers (DROs) and
Rating Veterans Service Representatives (RVSRs) are assisting in
reducing VBA claims backlog through 20 hours of mandatory overtime each
month. For the same period, RO appeals team Veterans Service
Representatives (VSRs) and employees of the AMO Appeals Resource
Center, are working 20 hours of mandatory overtime in support of
reducing VBA's appeals inventory. As of August 19, 2017, appeals teams
had expended $4.3 million in mandatory OT funds. By the end of August,
appeals DROs and RVSRs had produced over 19,000 backlog ratings and the
ready for decision inventory had been reduced from approximately 44,000
to 11,000. Appeals team employees will remain on mandatory overtime
during September 2017 and focus exclusively on the oldest appeals. At
the end of August, appeals production was approximately 16 percent over
the FY 2017 production target and approximately 23.8 percent above FY
2016 production. The AMO will continue to evaluate the need for
overtime, optional or mandatory, based on implementation of appeals
reform legislation, production trends and overtime fund availability.

Question 4: How long does the Department plan to require Rating
Veteran Service Representatives (RVSRs) and Rating Quality Review
Specialists (RQRSs) to work mandatory overtime?

VA Response: In a strategic approach targeting bottlenecks in the
claims process, mandatory overtime is implemented in 30-day increments.
VBA continually conducts reviews to determine if the need for mandatory
overtime continues in any part of the claims process. The Rating
Veteran Service Representatives (RVSRs) and Rating Quality Review
Specialists (RQRSs) work mandatory overtime when there is a need to
focus on claims that are ready for decision. A decision is made every
30 days on which part of the claims process needs focus and which
claims processors may be required to work mandatory overtime.

Question 5: How much did VBA spend on overtime, both mandatory and
optional, in FY 2016 and FY 2017 to date, disaggregated by month.

VA Response: VA remains committed to meeting its goal of providing
benefits to Veterans and their families in a timely and accurate
manner. To continue progress on providing timely benefits, address the
increase in the number of claims VA has received this FY to-date, and
minimize the number of disability claims pending over 125 days, VBA
reinstituted mandatory overtime effective March 7, 2017. VBA's claims
processors last worked mandatory overtime from January 2015 until
September 2015. VBA plans for the period of mandatory overtime
beginning in March 2017 to be limited, with an extension at the
discretion of VBA leadership. In a strategic approach targeting
bottlenecks in the claims process, during March, VBA focused on claims
awaiting a rating decision. Disability claims processors trained to
rate claims-Rating Veterans Service Representatives (RVSRs) and Rating
Quality Review Specialists (RQRS) - working 20 hours of overtime for a
period of 30 days. RQRS continued to focus on quality reviews during
regular hours and on rating claims during mandatory overtime. VSC
employees not previously working mandatory overtime may potentially be
included in the mandatory overtime requirement in the months to come,
based on agency needs.
VA will continue to emphasize completion of high-priority and
special-interest claims, including claims pending over 125 days; claims
from separating Servicemembers who are seriously injured or ill; and
claims from Veterans who are Medal of Honor recipients, former
prisoners of war, homeless, terminally ill, or experiencing extreme
financial hardship.
In FY 2016, VBA spent approximately $81 million in overtime, none
of which was mandatory. Mandatory overtime was reinstituted effective
March 7, 2017. As of May 2017, VBA estimates approximately $10 million
has been spent on mandatory overtime in FY 2017 and $62 million for
optional overtime; the enclosed spreadsheet provides an estimated
monthly summary by business line.

Question 6: For each month of FY16 and FY17, please provide the
cost of mandatory overtime for claims processors.

VA Response: The enclosed spreadsheet provides an estimated monthly
summary by business line of the cost of mandatory overtime for claims
processors in FY 2016 and FY 2017.

Question 7: For each month of FY16 and FY17, please provide the
cost of discretionary overtime for claims processors.

VA Response: The enclosed spreadsheet provides an estimated monthly
summary by business line of the cost of optional overtime for claims
processors in FY 2016 and FY 2017.

Question 8: Please explain how the Board of Veterans' Appeals will
fund an additional 164 full-time employees without an increase in
discretionary funding? How long does the Department anticipate it will
take to hire and train such new employees?

VA Response: In FY 2017, the Board of Veterans' Appeals (Board)
received funding for an additional 242 full-time equivalent (FTE)
employees. As the result of hiring falling short of goals, the Board
projects to have carryover of approximately $15,609,600 from FY 2017,
which the Board intends to utilize for personnel costs in FY 2018. By
utilizing carryover, the Board's FY 2018 annualized FTE level is
estimated to be 1,050, which is 164 FTEs higher than the FY 2017
current estimate. The goal is to hire as many new employees as possible
by the end of FY 2017. The overwhelming majority of these new employees
will be attorneys, who will prepare draft decisions for review and
signature by a Veterans Law Judge (VLJ). These attorneys will
participate in a 12 week intensive training program, conducted by the
Board's Office of Knowledge Management, referred to as ``Bootcamp.''
Bootcamp is followed by 12 weeks of working closely with the assigned
VLJ(s). The Board estimates that it takes approximately six months to
train new attorneys until they are fully productive.

Question 9: When does the Department plan to retire the Veterans
Appeals Control and Locator System (VACOLS)?

VA Response: VA is developing the Caseflow suite of web
applications to modernize and streamline appeals processing. Caseflow
is actively replacing and deprecating specific pieces of VACOLS
functionality as new Caseflow applications come online, and Caseflow
will ultimately replace all appeals processing functionality currently
performed by VACOLS. However, VACOLS cannot be fully retired until
Caseflow replaces all core VACOLS functionalities. The development of
Caseflow is an ongoing process that will continue at least through FY
2018, but specific timelines for this development are not set. As is
the practice of agency teams of the United States Digital Service, and
common of leading private sector technology companies, the Caseflow
team implements agile software development methods. In contrast to
traditional waterfall software development, the team does not develop a
comprehensive set of requirements prior to initiating development, but
rather develops the project in two week iterations or ``sprints.'' New
code is continually integrated into the production environment, meaning
that improvements are made available to users as frequently as daily.
The contents of each sprint are informed by a schedule that extends six
months into the future and is continually revised to reflect new
information and shifts in external factors.
While these agile practices limit the ability to define a specific
timeline for VACOLS deprecation, which would inevitably be subject to
change based on variables inevitable at the intersection of government
and software development, they offer specific advantages in the context
that the Caseflow team operates. The team has deliberately chosen not
to define schedules beyond six months in order to evolve requirements
in response to: 1) availability of new research and analysis of
improved baseline data; 2) changes in Board staffing and policy and the
effects thereof; and 3) changes to the legal and regulatory
environment, including the Veterans Appeals Improvement and
Modernization Act of 2017, which the President signed into law on
August 23, 2017.
The team engages in a quarterly prioritization exercise in
coordination with Board stakeholders, evaluating which of the remaining
components of the Caseflow product should be incorporated next, or
which of the existing components should be iterated, and how to
allocate resources among these various potential improvements. This
exercise establishes milestones that the team will work toward while
planning each two week sprint. In addition to evaluating whether and to
what extent these improvements serve the team's goal to ``empower
employees with technology to increase timely, accurate appeals
decisions and improve the Veteran experience,'' and to reduce the
Board's dependency on and ultimately deprecate VACOLS, this exercise
considers the known potential for the three external factors listed
above to affect the requirements, utility, and longevity of the product
as developed.

Question 10: Please provide the date Caseflow was fully
implemented.

VA Response: As noted, Caseflow is being developed in an agile
process in which new functions are added to the system as they are
completed. The first Caseflow application, Caseflow Certification, was
first deployed in April 2016. Other applications continue to be
deployed as completed. To date, the applications deployed to production
by Digital Service at VA include Caseflow Certification, eFolder
Express, and Caseflow Dispatch. At present, the Digital Service is
developing a tool to make the review of Veterans' claims files by Board
attorneys and VLJs more efficient (Reader), enhancements to Caseflow
Certification intended to improve data accuracy in the transfer of
appeals between the VBA and the Board, and a tool to streamline the
process by which VLJs prepare for Board hearings (Caseflow Hearing
Prep).

Question 13: Specifically, does the Department plan to add Appeals
Processing and Pension Claims Processing functionality to VBMS? If so
what is the expected timeline? If not, please explain why.

VA Response: Functionality enabling the processing of pension
claims in VBMS was delivered the weekend of June 9, 2017, in Release
13.0. Additional pension letters that remain to be integrated are
planned for the November 2017 Release 14.0.
The eFolder in VBMS already supports appeals processing for VBA. In
addition, the Statement of the Case (appeals decisional document) is
being generated out of VBMS. Four major appeals-related business
requirements artifacts have been submitted to IT. These artifacts
define the technical solution to implement the remaining functionality
necessary to fully support appeals processing within VBMS. The
artifacts have either been analyzed by IT or are in the process of
actively being analyzed. None of the four major appeals artifacts have
been scoped for an upcoming VBMS release. The soonest they may be
scoped is Release 15.0 in May 2018.

Question 14: Will the Board of Veterans' Appeals new information
technology system, Caseflow, be fully interoperable with VBMS? If not,
please explain why

VA Response: VBA and the Board agree that the Board's Caseflow
system must be fully interoperable with VBMS. This includes sharing
data between the systems. The vision is that end users would only need
to update data in one place, with that data being seamlessly shared
between systems. VBA is designing the new VBMS Appeals functionality to
eliminate redundancy through the use of data sharing. Similarly,
Digital Service is developing the Board's new system, Caseflow, to be
fully integrated with VBMS at all appropriate touchpoints. Existing
applications, including Caseflow Certification, Caseflow Dispatch, and
eFolder Express are all integrated with VBMS to ensure data accuracy
and to prevent duplication of functionality. There are multiple points
of integration between Caseflow and VBMS, including Caseflow's ability
to read documents from VBMS through the developed Caseflow eFolder
Express and the in development document review software referred to as
``Reader.'' Ensuring integration between Caseflow and VBMS wherever
appropriate will continue to be a priority as additional Caseflow
functionality is developed and deployed.

Question 15: Please describe planned improvements and new
functionally for NWQ, including the timeline for implementing such
improvements and new functionality.

VA Response: Future functionality for NWQ includes: 1) improvements
to the re-work functionality planned for last quarter of FY 2017 and
1st quarter of FY 2018, and 2) routing VBA appeals through NWQ planned
for the last quarter of FY 2018.

Question 16: Does the Department plan to add appeals functionality
to NWQ? If so, what is the expected timeline? If not, please explain
why.

VA Response: Yes, VA plans to add appeals functionality to NWQ. The
expected timeline is during the second half of FY 2018. While VBA
distributes appeals pending in its jurisdiction to its regional offices
using the NWQ, the Board does not utilize the NWQ to manage its appeals
workload.

Question 17: Does the Department plan to add appeals functionality
to NWQ? If so, what is the expected timeline? If not, please explain
why.

Question 18: Does the Department plan to add pension claims
functionality to NWQ? If so, what is the expected timeline? If not,
please explain why.

VA Response: Yes, VA plans to add pension claims to NWQ. The
expected timeline is during the second half of FY 2018.

Question 19: Does the Department plan to add Dependency and
Indemnity claims functionality to NWQ? If so, what is the expected
timeline? If not, please explain why.

VA Response: Yes, VA plans to add Dependency and Indemnity
compensation claims to NWQ. The expected timeline is during the second
half of FY 2018.

Question 20: Does the Department plan to add survivor benefits
functionality to NWQ? If so, what is the expected timeline? If not,
please explain why.

VA Response: Yes, VA plans to add survivor benefits claims to NWQ.
The expected timeline is during the second half of FY 2018.

Question 21: Does the Department plan to add fiduciary
appointments, including scheduling initial field examinations and
follow up field examination functionality to NWQ? If so, what is the
expected timeline? If not, please explain why.

VA Response: Yes, VA plans to add fiduciary appointments, including
scheduling initial field examination and follow up field examination to
NWQ. The expected timeline is during the 1st quarter of FY 2019.

Question 23: The budget shows zero outlays for the Supply, Fund
(volume I, pages 116 and 121). Please explain this.

VA Response: For FY 2018, Supply Fund expects to obligate all
incoming revenues therefore it shows zero net outlays. The FY 2016
actual column reflects the actual net outlays from Treasury reports, or
the SF 133.

Question 24: The budget proposes $1.222 billion in FY 18 and $861
million in FY 19 advance appropriations, from the medical services
account, to purchase medical equipment. This includes high tech medical
equipment (HTME) and other medical equipment. The National Acquisition
Center's ``consolidation request for quotes'' HTME purchasing process
is currently stalled. When does the Department anticipate resuming HTME
purchasing through the consolidation request for quotes process?

VA Response: The Request for Quotes was posted on June 7, 2017,
with closing date of July 12, 2017.

a)If such HTME purchasing does not resume, how much of the medical
equipment budget request will be unspent?

VA Response: The consolidated purchasing of HTME imaging equipment
has resumed. The process is no longer on hold.

Question 25: The budget proposes $512 million for major
construction. Does this lower figure, as compared to FY 15 and prior
years, represent a continuation of the Department's strategic pause in
major construction activity to digest the Commission on Care'
recommendations to rationalize the facilities footprint? Or does it
represent a ``new normal'', meaning a level of major construction
activity that should be expected to continue into the future, even
after the Department implements the Commission on Care's facilities
recommendations?

VA Response: Although VA is in the process of implementing some of
the Commission on Care (CoC) recommendations, the recommendations were
not the basis for the FY 2018 major construction request as compared to
previous years. For FY 2018, VA's capital programs budget emphasizes
the non-recurring maintenance (NRM) program. As the Secretary stated,
VA Facility Condition Assessments have identified significant critical
infrastructure deficiencies that require remediation, including
structural seismic, electrical distribution and mechanical systems,
such as heating and ventilation. VA's overall FY 2018 capital programs
request reflects VA's commitment to modernize and fix its existing
infrastructure, by allowing additional resources to be applied to non-
recurring maintenance projects in FY 2018 to correct critical building
and infrastructure deficiencies that are in need of repair.

Question 26: The budget proposes $343 million for minor
construction. This figure is lower than previous years, especially
considering the Choice Act funds that were allocated toward minor
construction in previous years. Is this lower figure also attributed to
the Department's strategic pause related to the Commission on Care
recommendations? If not, to what is this lower figure attributed?

VA Response: For FY 2018, VA's capital programs budget emphasizes
the non-recurring maintenance (NRM) program. Although VA is in the
process of implementing some of the Commission on Care (CoC)
recommendations, the recommendations were not the basis for the lower
FY 2018 minor construction request compared to previous years. As the
Department continues to move towards non-capital solutions to expand
access, the decrease in minor construction allows additional resources
to be applied to NRM projects, to correct critical building and
infrastructure deficiencies in its existing infrastructure. Further, VA
currently has a significant number of fully funded minor projects that
need to be executed using available unobligated funds. This negates the
need for a large infusion of budget authority for FY 2018 minor
construction projects.

Question 28: The budget proposes $862 million in activation funding
for FY 18 and $745 million for FY 19 advance appropriations, divided
between the medical services, medical support & compliance, and medical
facilities accounts. Which construction projects will be activated
using these funds?

VA Response: The attached document provides the list of projects
included in the activation funding for FY 2018 and for FY 2019 advance
appropriations.

Question 29: Please provide categories or types of work or
functions that comprise the operating equipment maintenance and repair
line item within the medical facilities account. To the extent
possible, please indicate how much funding is spent on each category or
type of work within operating equipment maintenance and repair.

VA Response: Operating Equipment Maintenance and Repair includes
services and other costs associated with maintenance and repair of all
non-expendable operating equipment and furniture and fixtures, when
performed by maintenance personnel or procured on a contractual basis.
Maintenance and repair cost for rental equipment is also included in
this cost center.

Question 30: Please provide categories or types of work or
functions that comprise the recurring maintenance and repair line items
within the medical facilities account. To the extent possible, please
indicate how much funding is spent on each category or type of work
within recurring maintenance and repair.

VA Response: Recurring Maintenance and Repair line items include
maintenance service contracts and routine repair of facilities and
upkeep of land. Excluded are alterations, additions, modifications or
improvements of facilities and land.
The enclosed chart depicts the total obligations for Operating
Equipment Maintenance and Repair, and Recurring Maintenance and Repair
for FYs 2016 through 2019.

Question 31: Medical Care Collections Fund (MCCF) receipts have
been declining modestly for the last few years, and this budget
projects that to continue. The budget attributes the decline to
``broader healthcare payer changes that have resulted in third-party
payers proposing reductions to their reimbursement levels.'' Please
further explain the decline, especially in light of the fact that
medical care spending is increasing, and community care spending is in
particular increasing.

VA Response: Total MCCF collections have increased year over year
from $2.77 billion in FY 2011 to $3.50 billion in FY 2016 despite the
four percent decrease in the number of Veterans that VA can collect
from during the same period. MCCF Collections for FY 2017 are projected
at one percent to five percent above budgeted expectations. While
health care expenditures are increasing, VA does not directly bill
costs to Third Party payers. By law, VA is required to bill reasonable
charges. Payers' reimbursements to VA vary based on the payer. VA has
93 payer agreements and monitors the performance of all payers to
include those that VA does not have an agreement with. Recently,
changes in the healthcare landscape have caused payers to examine their
agreements and adjust rates and reimbursement methodologies to minimize
expenditures. Historically, many payers paid the VA 100 percent of
charges or above market rates. During the last six months of 2016, five
large payers have reduced their reimbursement rates or requested a
decrease. The potential loss of the rate reduction from these five
payers is estimated to be approximately $136 million. Additionally, VA
has been tracking six payers identified as high risk based upon their
high reimbursement rates. These payers may request reductions in
reimbursement rates with 30 to 120 days notice. The estimated impact of
these changes is approximately $60 million.
In addition to the impact of the Third Party changes, the impact of
the Tiered Medication Copayment System has been incorporated into the
budget. The new copayment levels reduce the average copayment per
script and therefore result in a lower expected First Party Pharmacy
collection amount.

Question 32: Proposals have been circulating within VHA to
modernize the Medical Care Collections Funds' IT systems to increase
the efficiency of collections. GAO did a study in 2008 and estimated
that as much as $1.4 billion of available revenue is not collected,
though not all of this is collectable. Please describe the ``MCCF EDI
Transaction Application Suite Phase 1'' project that has been budgeted
at $15 million, in greater detail. Are any other efforts underway to
modernize the MCCF IT systems?

VA Response: The MCCF EDI Transaction Application Suite Phase I
project (``MCCF EDI TAS'') will provide enhancements to systems used in
the billing of Veterans' health insurance carriers for care that is not
related to their service-connected conditions. The Health Insurance
Portability and Accountability Act (HIPAA) requires that care providers
and payers exchange data using the American National Standards
Institute (ANSI) X12 Electronic Data Interchange (EDI) transaction
sets, which VA has implemented. The MCCF EDI TAS project will implement
changes to the transaction set standards, as well as several
enhancements that will increase system efficiency along the four
primary third-party billing processes: 1) Veteran insurance data
capture; 2) medical claims billing; 3) electronic pharmacy billing; and
4) receivables management (collections processing). The project will
also begin to migrate these capabilities from the legacy systems to a
new computing platform that will be known as the MCCF EDI Transaction
Application Suite.
Regarding MCCF IT systems, the Veterans Health Administration (VHA)
Office of Community Care Revenue Operations is exploring several
opportunities to modernize systems and improve collection
functionality. These initiatives span the full breadth of VHA's revenue
cycle, and are being championed by ongoing transformation efforts.
Initiatives include: improving front end systems to enhance patient
registration functions (insurance capture, verification, self-service
options, and authorization tracking), enhancing provider clinical
documentation, enabling remote records access to facilitate offsite and
consolidated coding, better integrating pharmacy and billing
functionality within VISTA to capture and bill for national drug codes,
and implementation of smarter denials management functions. As
additional revenue opportunities are identified, requirements continue
to be developed for IT systems.

Question 33: The Balanced Budget Act of 1997 (P.L. 105-33) allows
VA to use MCCF revenue to pay for the ``expenses of the Department for
identification, billing, auditing and collection.'' of the MCCF. In
other words, the law allows VA to reinvest a portion of MCCF
collections directly into MCCF operations. VA does so to cover MCCF
salaries and administrative expenses. Has VA considered doing so for
MCCF IT systems modernization, especially in light of the proposed OI&T
funding cut?

VA Response: MCCF collections reimburse VA Medical Centers for work
that they have already performed providing health care to Veterans.
Estimated MCCF collections are an offset to total estimated obligations
in the annual President's Budget submission. Any alternative use of
these funds would decrement the funding available to VA Medical Centers
to provide health care to Veterans.

Question 34: How is it determined to allocate MCCF dollars to the
Joint DoD-VA Medical Facility Demonstration Fund? How is it determined
how many MCCF dollars are allocated for this purpose? What functions or
tasks are the MCCF dollars used for?

VA Response: The allocation of MCCF collections goals for the James
A. Lovell Federal Health Care Center (FHCC) follows the same process as
for other VAMCs. The collections target is a function of patient
workload, billable encounters, average billed amount and collections
rate. The MCCF collections are used to support general operations at
the FHCC.

Question 35: The Office of Information and Technology circulated a
memo in April warning of expected funding cuts in development and
sustainment in FY 18 and into the future. The memo warned the cuts
challenge the IT Operations and Services branch's ``ability to maintain
and operate software delivered in FY 18 and beyond.'' The memo
restricted any further development to four categories of mission
critical systems as well as any ongoing development project that will
move into testing or deployment by the end of FY17, and prohibited any
future development project for a purpose other than replacing a legacy
system. Notwithstanding your communicated intent to request a
supplemental appropriation for electronic health records modernization,
please explain whether the proposed IT cuts degrade OI&T's ability to
perform its core mission of maintaining and operating software, as the
memo states. If so, how will the negative impact of the proposed cuts
to be mitigated?

VA Response: The changes in the budget request will not degrade
OI&T's ability to perform its functions and serve Department missions.
The April memo was a notification to OI&T organizations to be aware of
the new direction for development projects that will concentrate
efforts on replacing outdated applications to improve mission
functionality and decrease organizational risk. In response to the
President's call to improve operating efficiencies in all agencies,
this has the further goal of challenging OI&T organizations to find
operating efficiencies in the context of fewer new stand-alone
applications coming online and in supporting modern, replacement
applications including those identified in the memo.

Question 38: Please itemize the expenses and functions that the
proposed $7.5 million transfer of OI&T funds to the Lovell Federal
Health Care Center account will cover.

VA Response: OI&T contributes this funding to the James A. Lovell
Federal Health Care Center for staffing of IT desktop support
(salaries, travel, and training); telecommunications; software
maintenance and licenses; hardware purchase and maintenance; IT support
contracts for specialized technical IT services); and IT supplies.

Question 40: The ``Customer Relationship Management (CRM) - Fix the
Phones (FtP)'' component of the other IT systems development line item
of the development subaccount has been zeroed out. Was the initiative
to upgrade VA telephones and unify telecommunications systems completed
in FY 17, or is the initiative ongoing and being funded from a
different account in FY18? If VA proposes to fund it through a
different account, please identify the account.

VA Response: Customer Relationship Management (CRM) Fix the Phones,
while appearing as zeroed out, will be funded in FY 2018 as part of CRM
Platform Enhancements. As an integral component of VA's Enterprise
Contact Center Modernization, the CRM Program is key to empowering and
serving Veterans and other clients with accurate, secure on-demand
access to information about VA's benefits and service. As a result of
deploying CRM software to user communities and contact centers, the
following legacy systems are planned to be replaced and retired: Health
Resource Center's Siebel system, Veterans Crisis Line's Medora system,
and the Corporate Waco-Indianapolis-Network-Roanoke (CWINRS) System.
Implementation of the core CRM common application platform has and
will continue to support VA's Contact Center Modernization effort by
providing a highly capable call center and case management solution
that improves work management, time management and data accuracy in
order to improve customer service to Veterans and their families. The
project will create a CRM common application platform to streamline
business processes, improve call quality, increase calls per agent,
reduce call length, reduce call wait times, improve first call
resolution, and enhance value to the Veteran.

Question 41: Please explain what the VHA call center modernization
program entails, for which the budget requests $10 million from the
medical support and compliance account. Specifically, which call
centers are being modernized?

VA Response: On June 1, 2017, the Veterans Experience Office (VEO)
soft-launched the White House Veterans Complaint Hotline with the goal
of it being fully operational by October 15, 2017. The phone number is
(855) 948-2311 and the hotline is designed to receive, process, and
respond to the complaints of individual Veterans in a responsive,
timely and accountable manner.
The President's Budget included $10 million for the initial
estimates of the initiative. VEO now estimates the amount required in
FY 2018 may less than budgeted. Because VEO's budget is reimbursed from
their customers (VHA, VBA, NCA et al) they will need to determine if
these funds should be returned or re-purposed for other Veterans
projects under new service agreements. This initiative will provide
Veterans, their families, caregivers and survivors access to live,
knowledgeable agents to address their questions, concerns, and to make
immediate warm transfers to highly skilled professionals for those
Veterans in crisis.
The contact center modernization effort is now being reviewed at
the enterprise level as part of VA's modernization effort in accordance
with the Executive Order and OMB directive.

Question 42: The budget requests zero dollars for Medical
Appointment Scheduling System (MASS) ``National Deployment''
development, and $3 million for MASS sustainment. This indicates a very
low level of MASS contract activity will occur during FY 18, consisting
of no new development and a minimal level of sustainment for the pilot
that is expected to commence in FY 17. Does VA agree with that
interpretation of what the budget request indicates? Does VA expect to
fund MASS with any Choice Act funds in FY 18'?

VA Response: VA concurs with this interpretation that there is no
new development anticipated for MASS in FY 2018 and minimal sustainment
for the pilot. The VA will continue to fund scheduling initiatives
using Choice Act Section 801 funding until exhausted, which impacts the
current FY 2018 budget.
The MASS task order, which implements the MASS pilot in Columbus,
Ohio was awarded on June 15, 2017. It is planned to take about one year
to implement the software and an additional three months to evaluate
the results before making a national deployment decision. This national
deployment decision will necessarily be made with consideration of the
just announced negotiation with Cerner. In the interim, VA is deploying
VistA Scheduling Enhancement (VSE), a software scheduling solution that
improves the current system, between June and October 2017.

Question 43: The line item ``VistA Evolution'' in the development
subaccount has been renamed ``Electronic Health Record (EHR).'' Has
there been any change in the scope of programs, projects, of functions
contained in this subaccount?

VA Response: The VistA Evolution Program manages the collection of
projects known as VistA 4. The VA is working to deliver and close out
more than 60 projects and initiatives that make up the VistA 4 Product
Roadmap by the end of FY 2018. For that reason, a large percentage of
the VistA 4 development work is expected to be completed, or funded
using FY 2017 development resources, and additional development
resources were not requested for VistA Evolution.
Based on the Secretary's June 5, 2017, announcement regarding VA's
path forward for VA's EHR modernization, the above proposed investments
will be reviewed to ensure they are in full alignment with the
Secretary's decision.

Question 44: Please explain the rationale and impact of the zeroing
out of the VHA research IT support development line item. Is this
function now being funded in a different area of the budget?

VA Response: Development funding is concentrated on the new at-risk
system replacement priorities [Financial Management Business
Transformation (FMBT), Appeals, Benefits Delivery Network (BDN),
Memorials, and Electronic Health Record (EHR)]. IT operations and
maintenance support for existing VHA research activities will continue.
Development program emphasis has been placed on replacing major at-risk
applications and completion of application project work that is nearing
completion in FY 2017.

Question 46: The budget requests $23 million in the operations and
maintenance subaccount for Financial Management System (FMS)
modernization, in addition to $60 million in the development
subaccount. Financial Management Business Transformation is still in
its early requirements collection and planning stage, and VA has
estimated this to continue for 18 months. Please explain what aspects
of FMS modernization have been completed and will be in sustainment in
FY 18.

VA Response: OI&T contributed funds to the FMBT project in FY 2017
to execute the necessary technical programmatic activities to
effectively plan, develop and transition components of the VA financial
system to the Federal Shared Service Provide platform. Key activities
in FY 2017 include preparations for legacy interface transition,
establishing test bed cloud connectivity and messaging integration
middleware components. FY 2018 sustainment funds will continue OI&T
infrastructure activities and support legacy data archival.

Question 49: Please provide an update on the how this budget will
implement the education provisions contained in P.L. 114-315 - ``The
Jeff Miller and Richard Blumenthal Veterans Health Care and Benefits
Improvement Act of 2016.''

VA Response: VBA and OI&T are in the process of re-engineering
education systems with a critical first step being the retirement of
the Benefits Delivery Network (BDN), a 51-year-old COBOL-based
mainframe system. This budget supports the elimination of the legacy
system and consolidation of all education processing and payments into
the Long Term Solution (LTS) and VETSNET/FAS to greatly enhance the
education systems environment going forward.

Question 51: What are the results of the Specially Adapted Housing
Assistance Technology Grant Program?

VA Response: The Specially Adapted Housing Assistive Technology
(SAHAT) program awarded four grants in FY 2016 totaling nearly
$800,000. The grants were awarded to public and private organizations
for the development of new technologies relating to specially adapted
housing for Veterans with severe disabilities. Some technologies under
development include home automation tailored to be controlled through
voice control, eye gaze, and tactile sensors and smart devices that can
be configured with existing off-the-shelf home automation systems.
The SAHAT program awarded three grants in FY 2017 totaling nearly
$600,000 to three additional private and public organizations. The
grants awarded in FY 2017 focus on the creation of an automated table
to assist Veterans who spend the majority of time in bed and the
development of an automated home recognition system using sip/puff
sensors for use by Veterans with quadriplegia. The SAHAT grant program
has provided an invaluable opportunity to external organizations to
create and develop technologies that can ultimately lead to significant
quality of life improvements for Veterans with severe disabilities.

Question 52: Despite efforts by VBA, it appears the President's
budget does not expect much growth for the Native American Direct Loan
Program. What are some ways to increase use of this program?

VA Response: VA's Native American Veteran Direct Loan program
(NADL) was created in 1992 to provide eligible Native American Veterans
and their spouses the opportunity to finance the construction,
purchase, or improvement of a home on Federal trust land.
Although significant growth is not anticipated for NADL, program
participation has been increasing. Continued growth of this important
program depends, in large part, on outreach to Federally-recognized
tribes to increase awareness of this program among Native American
stakeholders. VA's Loan Guaranty Service partners with the VA Office of
Tribal Government Relations to provide information about the NADL
program and actively seeks input from tribal leaders on how to improve
delivery of this benefit. Each year, VA attends various events, and
provides tailored training and information to tribal groups. In
addition, VA is currently updating outreach materials for distribution
and publication to assure continued and effective promotion of the NADL
program.
In order to participate in the NADL program, tribal entities must
enter into memorandums of understanding (MOUs) with VA. There are 97
MOUs in place, and over 1,000 closed loans have been made to Veterans
since program inception. During FY 2016, VA closed 13 loans under this
program.
Given the difficulty that Native Americans can have in securing
home loans on Federal trust lands through the conventional market, and
the legal complexities of making loans on Federal trust lands, it is
imperative funding remain at existing levels to ensure Native American
Veterans are able to pursue home ownership through this earned benefit.

Question 53: The President's FY 18 request would support 363,134
Full-Time Equivalent (FTE) employees, an increase of 7,772 FTE over FY
17. How many vacancies does the VA currently have? What is the current
vacancy rate for VHA? What is the current vacancy rate for VBA? What is
the target vacancy rate for each of these organizations?

VA Response: As of June 30, 2017, there are 34,051 vacancies at VA.
Through modernization efforts, VA is pursuing systems that will tell
how many vacancies exist and whether those vacancies are critical to
meeting the needs of Veterans. In the interim, VA has instituted a
process to collect and report vacancies on a recurring basis and has
established a Vacancy Report Site which gives the Administrations and
staff offices the ability to submit and certify data about each
vacancy.
According to June 30, 2017, VA vacancy report, VHA has nearly
32,000 vacancies, which is approximately 9.1 percent of total VHA FTEs.
This is in line with VHA's nine percent target vacancy rate, which
itself is aligned with VHA's nine percent annual turnover rate.
VBA's vacancy rate is approximately 7.6 percent: 1,700 identified
vacancy positions divided by the total number of positions 22,329.
VBA's target vacancy rate is approximately 1.1 percent, as the
remaining percentage (6.5) is comprised of positions that are mission
essential in servicing Veterans.

Question 63: Please provide three examples of wasteful spending
that this budget eliminates compared to last year's budget.

VA Response: VA strives to ensure it is a good steward of taxpayer
dollars while providing Veterans with the care and benefits they have
earned and deserve. Some examples of areas where VA has identified
savings for FY 2018 compared to FY 2017's budget include the following:

VA intends to award up to four new contracts for
community care by the end of the first quarter of FY 2018. Under the
terms of the Community Care Network Request for Proposals (RFP), care
would primarily be reimbursed at a rate not to exceed the Medicare
rate; this, and other terms of the RFP, would result in significantly
lower costs. The estimated savings for FY 2018 would be approximately
$705 million and $1.6 billion in FY 2019. The President's Budget
request already accounts for this savings.
For 2018, VBA has identified at least $5 million in
postage savings with centralization of outbound communications to
Veterans and in particular the outbound printing and mailing of Veteran
correspondence. Through the Centralized Benefits Communications
Management (CBCM) project, VBA will switch from locally printing and
mailing veteran correspondence at VA Regional Offices, an annual 19
million outbound letters to Veterans, to batch printing those letters
through a Government Publishing Office vendor. This will enable VBA to
print and mail at a reduced cost by leveraging USPS pre-sort postage
rates and reduce paper, printer and toner costs by printing large
volumes of letters at once. Furthermore, in the subsequent phases of
CBCM beyond 2018, VBA will further reduce communications costs by
enabling VBA to centrally shift some of this outbound mail to
electronic communications such as e-mails.
NCA is continuing to modernize business processes and
systems to optimize efficiencies, improve accountability, and better
serve Veterans and their families. One example is the Pre-placed Burial
Vault Program. This program deviates from traditional cemetery
construction practices through the use of pre-placed vaults. The
practice results in more efficient space utilization at a cemetery
thereby decreasing land requirements and gravesite construction costs
by approximately 50 percent. Additionally, it has reduced annual
maintenance costs by approximately $34,000 per acre due to decreasing
land requirements, and will help prevent soil settlement issues which
incur future investment to resolve. When combined with the Pre-placed
Burial Vault Program, NCA's Waterwise Conservation Program will lead to
significant reductions in water use, which NCA estimates could decrease
by as much as 75 percent at some cemeteries.

Question 64: This Committee has been told many times by VA staff
that many simple IT fixes for GI Bill processing needs additional money
to complete these simple tasks- such as changing the name on a form
letter sent out by VA to GI Bill recipients if they have received an
overpayment. Does this budget provide any prioritization for improving
IT systems for the processing of education claims?

VA Response: Currently, VBA and OI&T are in the process of re-
engineering education systems with a first critical step being the
retirement of the Benefits Delivery Network (BDN), a 51-year-old COBOL-
based mainframe system, and consolidating all education processing and
payments into the Long Term Solution (LTS) and VETSNET/FAS. This
elimination of this critical legacy system and the resulting
consolidation of capabilities will greatly facilitate VA's ability to
enhance the overall education systems environment going forward. Due to
the aggressive timeline for accomplishing this work, it is vitally
important to not introduce additional changes or enhancements during
this period to avoid additional complexity and risk. With that as
context, VA has identified a few low impact changes to letters that can
be made in the short term without compromising our larger efforts.
These changes, which will address two related GAO recommendations, will
be included in the next LTS maintenance release that goes into testing
in August, with full release projected in December.

Question 66: Please inform the Committee of the performance metrics
for the VetSuccess on Campus (VSOC) program? Is the department
expecting growth of this program in future years?

VA Response: In FY 2016, the VSOC Program's 79 counselors assisted
nearly 50,000 student Veterans at 94 campuses out of a student Veteran
population of approximately 78,000.
VSOC Counselors provide on campus and community outreach,
educational and vocational counseling, vocational assessments,
adjustment counseling, referrals to VHA, benefits coaching, and many
other services. The most common assistance provided on campus in FY
2016 included:

Professional Counseling: 6.60 percent
Education Services: 19.03 percent
VR&E inquiry/Ch33 to Ch31: 32.19 percent
Financial Aid/Debt Management: 9.03 percent
Outreach Follow-up/Referral: 19.06 percent
Medical Referral-VHA/Vet Center: 3.12 percent

VSOC Program goals tied to VSOC Counselor performance include:

Contacting 80 percent of new student Veterans on campus
during their first semester of attendance;
Contacting 95 percent of Veterans and beneficiaries who
are utilizing VA education benefits and on academic probation to
provide support as needed; and
Conducting 12 campus events per VSOC location per year,
such as VA benefits informational workshops, employment workshops, and
new student orientations.

Questions for the Record # 22, 54, 55, 56, 59, and 60

Question 22: Please explain why the budget for the National
Cemetery Administration should be increased by almost 30% in FY18.

VA Response: The National Cemetery Administration (NCA) receives
funding from seven appropriation accounts. The FY 2018 budget request
includes total budgetary resources of $811.3 million for NCA, a 28.9
percent increase above FY 2017. As shown in the following chart, the
primary increases are in the Operations and Maintenance, Major
Construction, and Minor Construction appropriations.

----------------------------------------------------------------------------------------------------------------
FY 2017 - FY 2018
(Dollars in Millions) FY 2017 FY 2018 Request FY 2017-2018 Increase Percentage Increase
----------------------------------------------------------------------------------------------------------------
Operations and 286.2 306.2 20.0 7.0%
Maintenance
----------------------------------------------------------------------------------------------------------------
Major Construction 137.0 255.9 118.9 86.8%
----------------------------------------------------------------------------------------------------------------
Minor Construction 56.9 98.0 41.1 72.2%
----------------------------------------------------------------------------------------------------------------
Veterans Cemetery 45.0 45.0 0 0%
Grants
----------------------------------------------------------------------------------------------------------------
Facilities Operation 0.1 0.1 0 0%
Fund
----------------------------------------------------------------------------------------------------------------
National Cemetery 1.5 1.5 0 0%
Gift Fund
----------------------------------------------------------------------------------------------------------------
Compensation and 102.8 104.6 1.8 1.7%
Pensions (Burial
Benefits)
----------------------------------------------------------------------------------------------------------------
Total $629.5 $811.3 $181.8 28.9%
----------------------------------------------------------------------------------------------------------------

Operations and Maintenance: The FY 2018 budget request includes
$306.2 million for operations and maintenance, including 1,881 FTE
(nearly 89 percent of which are in the field and approximately 75
percent are Veterans) to meet increasing workload and burial expansion.
The FY 2018 budget request includes $4.8 million for increased
operations and maintenance costs at existing cemeteries. NCA expects to
maintain over 3.7 million gravesites in FY 2018, an increase of
approximately 88,500 gravesites over FY 2017. Approximately 134,000
interments are anticipated for FY 2018, a slight increase over FY 2017.
The number of developed acres to maintain is also expected to increase
slightly from 9,272 in FY 2017 to 9,400 in FY 2018, and is expected to
continue to increase with the opening of new cemeteries and gravesite
expansion projects currently underway.
The FY 2018 budget ensures national cemeteries meet or exceed the
highest standards of appearance required by their status as national
shrines. Specifically, the budget includes $2.5 million over the 2017
level to maintain our national cemeteries in a manner befitting our
Veterans service to our country, with $1.5 million to address priority
infrastructure projects deemed critical to safety, code or operational
needs.
The FY 2018 budget request includes $1.5 million for continued
implementation of the Geographic Information System (GIS) at VA
cemeteries. This enhances accountability for remains through photo and
geographical documentation, and improves effectiveness of burial
operations through enhanced cemetery mapping and operational equipment.
The request also includes $800 thousand, and nine FTE, to improve call
center operations through enhanced staffing, training, and systems
modernization at the National Cemetery Scheduling and Eligibility
Office.
The construction of new VA national cemeteries, which are based on
burial access policies approved by the Congress in 2011 and 2013,
including in urban and rural locations, provides new or enhanced burial
access for Veterans and their families. Over the past few years, VA has
opened four new cemeteries and the FY 2018 budget request includes $3.5
million and 17 FTE for the initial operations and maintenance costs of
three additional new cemeteries.

Major Construction: In addition to establishing new national
cemeteries, NCA is developing additional gravesites at existing
cemeteries. Requested funding for these programs varies, and is based
on projected burial workload and gravesite depletion forecasts. The FY
2018 budget includes $255.9 million for gravesite expansion at six
national cemeteries, and advance planning and design activities.
Gravesite expansion projects at six national cemeteries will enable NCA
to continue providing burial services for eligible Veterans at these
locations. Together, these six cemeteries provide over two million
Veterans with reasonable access to burial. Full funding in FY 2018 for
all six expansion projects is critical due to the contracting lead time
to complete master planning, design, and construction prior to the
anticipated depletion of a burial option and to avoid a temporary
closure of certain burial options at one or more of these cemeteries.

Minor Construction: The budget request includes $98 million to
develop additional gravesites at existing cemeteries, support urban and
rural initiatives, acquire land, and make infrastructure improvements.
NCA relies on minor construction funding to develop additional
gravesites for smaller scale projects to keep existing cemeteries open.
The funding request supports 13 cemetery expansion projects that are
projected to deplete at least one burial option within the next few
years. This request also invests in infrastructure projects including
irrigation systems, renovation of historic structures, building
maintenance, and road and curb improvements.

Question 54: The request seeks $46.7 million to fund the operations
of the Office of Resolution Management (ORM). The budget indicates
discrimination was found 35 times in 2016. Who made the findings?

VA Response: Of the 35 findings of discrimination issued in FY
2016, 15 were decisions made by the Equal Employment Opportunity
Commission (EEOC), and 20 were decisions made by the Department of
Veterans Affairs, Office of Employment Discrimination Complaint
Adjudication.

a) How many informal discrimination complaints did employees file
in FY 16?

VA Response: In FY 2016, 4,908 informal EEO complaints were filed.

b) How many formal discrimination complaints did employees file in
FY 16?

VA Response: In FY 2016, 2,598 formal EEO complaints were filed.

c) What was the average cost to conduct a formal complaint in FY
16?

VA Response: Several studies have been done estimating the cost of
filing an EEO complaint in the Federal government. The studies estimate
the life cycle costs anywhere from approximately $17,000 to $60,000
depending on the point in the process where closure is reached. For
example, some complaints are withdrawn, or settled shortly after
filing, others may take years to be adjudicated before the EEOC, and
some are appealed or result in a civil action. In the latter, the cost
of the formal complaint process is higher based on the number of
resources involved and time devoted to the process. The ORM, through
data science, continues to examine and assess the cost to investigate a
formal complaint and define a more exact average for the process.

d) What were ORM's actual costs to conduct investigations in FY 16?

VA Response: In FY 2016, ORM reported to the EEOC that VA completed
1,865 investigations at a cost of $12,020,263.48. This figure includes
personnel compensation of agency and contract resources involved in the
process as well as travel, and others supplies and materials needed to
produce an EEO investigation.

e) Please identify the amounts paid to contractors to conduct
formal investigations.

VA Response: In FY 2016, ORM reported to the EEOC that contractors
completed 922 of the 1,865 investigations at a cost of $5,268,551.87.

Question 55: One of the areas the committee has seen as a delay in
providing a timely response to correspondence is with the office of the
Executive Secretariat. What is the current staffing level for this
office and what can be done to improve their timeliness and
performance?

VA Response: The Office of the Executive Secretariat is fully
staffed at 17 FTE as of February 2017. During calendar year (CY) 2015
and CY 2016, VA averaged 33 and 36 business days, respectively, to
respond to Congressional letters to the Secretary. For CY 2017, VA is
currently averaging 17 business days to respond to Congressional
letters to the Secretary, a reduction of more than half from the prior
year.

Question 56: Considering the increased focus on employment law
issues, what is the justification for reducing the FTE in the Office of
General Counsel that covers these issues from 104 in FY 16 to 92 in FY
18?

VA Response: VA Office of General Counsel (OGC) FTE estimates are
informed by workload and revised accordingly. The current estimate for
FY 2018 is 255 FTE for employment law, which includes realignment of
FTE from medical malpractice adjudication in FY 2017.
In addition, enactment of the Department of Veterans Affairs
Accountability and Whistleblower Protection Act of 2017 (the Act) is
expected to impact employment law workload. The Act makes significant
changes in the processes for employee discipline and resulting appeals.
OGC employment law attorneys are now increasingly called upon for
expedited review of proposed disciplinary charges and to advise clients
on the differences between new authorities and traditional employee
discipline processes. As actions taken under the Act move through
various appeal processes, OGC attorneys will be called upon to defend
those actions.
In FY 2017, OGC received 25,148 new employment law matters and
projects 27,663 for FY 2018.

Question 59: What is the justification for the 41 new FTE that are
being requested to staff the new Central Whistleblower Office and what
independence and authority will these employees have to protect
whistleblowers from possible retaliation?

VA Response: At the time of FY 2018 Budget submission, VA was
developing the structure, mission, and vision of the Office of
Accountability and Whistleblower Protection (OAWP), including the
Central Whistleblower Office, based on legislation. Executive Order
13793, Improving Accountability and Whistleblower Protection at the
Department of Veterans Affairs, was signed on April 27, 2017, and the
Secretary of VA established OAWP on May 12, 2017. Prior to this, while
whistleblower protection functions existed at VA, a Central
Whistleblower Office did not. In FY 2017, VA began reallocating
existing General Administration account resources to begin hiring staff
to manage cases, investigate where required, and capture data to inform
long-term implementation plans for this office. Based on current
projections, the Department requires 41 FTE for this purpose.

Question 60: Please explain how this budget supports your and
President Trump's continued efforts to protect whistleblowers and hold
those employees accountable who retaliate against them?

VA Response: This budget supports implementation of Central
Whistleblower Office (CWO) functions required by statute to promote and
protect whistleblower rights and the President's vision as set forth in
Executive Order 13793 Improving Accountability and Whistleblower
Protection at the Department of Veterans Affairs. Specifically, the FY
2018 budget request establishes a toll-free line, an accessible form to
report complaints, supports hiring of case managers, investigators,
experienced human resource specialists, and analytical and operational
services. These resources will enable the CWO to directly manage,
coordinate, and oversee whistleblower complaints; develop and deploy
robust training; and directly investigate, or oversee, investigations
of allegations of whistleblower retaliation.