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104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    104-443
_______________________________________________________________________

 
AUTHORIZING MAJOR MEDICAL FACILITY PROJECTS AND MAJOR MEDICAL FACILITY 
LEASES FOR THE DEPARTMENT OF VETERANS AFFAIRS FOR FISCAL YEAR 1996, AND 
                           FOR OTHER PURPOSES

_______________________________________________________________________


 December 22, 1995.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______


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

                              R E P O R T

                        [To accompany H.R. 2814]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Veterans' Affairs, to whom was referred the 
bill (H.R. 2814) to authorize major medical facility projects 
and major medical facility leases for the Department of 
Veterans Affairs for fiscal year 1996, and for other purposes, 
having considered the same, report favorably thereon without 
amendment, by unanimous voice vote, and recommend the bill do 
pass.

                              Introduction

    On February 24, 1995, the Committee received testimony on 
the fiscal year 1996 Department of Veterans Affairs (VA) 
budget, including major construction plans. Those testifying 
included the Honorable Jesse Brown, Secretary of Veterans 
Affairs, who was accompanied by Deputy Secretary Hershel Gober; 
Under Secretary for Health Kenneth W. Kizer, M.D.; Under 
Secretary for Benefits R.J. Vogel; National Cemetery System 
Director Jerry W. Bowen; Assistant Secretary for Management D. 
Mark Catlett; and General Counsel Mary Lou Keener. Also 
testifying were Mr. James Magill, Legislative Director of the 
Veterans of Foreign Wars; Mr. Russell Mank, Legislative 
Director of the Paralyzed Veterans of America; Mr. Richard 
Schultz, Legislative Director of the Disabled American 
Veterans; Mr. Noel Woosley, National Service Director of 
AMVETS; Mr. Larry Rhea, Deputy Director of Legislative Affairs 
of the Non Commissioned Officers Association; and Mr. Carroll 
Williams, Director, Veterans Affairs and Rehabilitation of The 
American Legion.
    On April 6, 1995, the Subcommittee on Hospitals and Health 
Care heard testimony on the Veterans Health Administration 
Reorganization proposal. Testifying were Assistant Secretary 
for Health Kenneth Kizer, M.D.; Mr. William Schuler, President 
and CEO of the Portsmouth Regional Hospital, representing 
Columbia/HCA; Dr. Daniel H. Winship, Dean of the Stritch School 
of Medicine at Loyola University of Chicago and representing 
the Association of American Medical Colleges, Dr. Samuel 
Spagnolo, President of the National Association of VA 
Physicians and Dentists; Ms. Lynna Smith, President of the 
Nurses Organization of the VA; Mr. Louis Jasmine, National 
President of the National Federation of Federal Employees; Mr. 
David Gorman, Deputy National Legislative Director of the 
Disabled American Veterans; and Mr. Terry Grandison, Associate 
Legislative Director of the Paralyzed Veterans of America.
    The full Committee met on December 21, 1995 and ordered 
H.R. 2814 reported favorably to the House by unanimous voice 
vote.

                      Summary of the Reported Bill

    H.R. 2814 would:

                  Title I--Construction Authorization

    1. Authorize the following projects:

(a) construction of an outpatient clinic in Brevard County, 
        Florida;
(b) construction of an outpatient clinic at Travis Air Force 
        Base in Fairfield, California;
(c) renovation of nursing home facilities at the Department of 
        Veterans Affairs medical center in Lebanon, 
        Pennsylvania;
(d) environmental improvements at the Department of Veterans 
        Affairs medical center in Marion, Illinois;
(e) replacement of psychiatric beds at the Department of 
        Veterans Affairs medical center in Marion, Indiana;
(f) renovation of psychiatric beds at the Department of 
        Veterans Affairs medical center in Perry Point, 
        Maryland;
(g) environmental enhancement at the Department of Veterans 
        Affairs medical center in Salisbury, North Carolina;
(h) construction of an ambulatory care addition at the 
        Department of Veterans Affairs medical center in 
        Temple, Texas;
(i) construction of an ambulatory care addition at the 
        Department of Veterans Affairs medical center in 
        Tucson, Arizona;
(j) seismic corrections at the Department of Veterans Affairs 
        medical center in Palo Alto, California; and
(k) seismic corrections at the Department of Veterans Affairs 
        medical center in Long Beach, California.

2. Authorize major medical facility leases of a satellite 
        outpatient clinic in Fort Myers, Florida and a National 
        Footwear Center in New York, New York.
3. Authorize $28 million of already-appropriated funds for 
        construction of an ambulatory care addition at the 
        Department of Veterans Affairs medical center in 
        Boston, Massachusetts.
4. Direct a report by the Secretary of Veterans Affairs on the 
        health care needs of veterans in East Central Florida.

         Title II--Strategic Planning for Health Care Resources

1. Require the Secretary of Veterans Affairs to report to 
        Congress on the long-range health planning of the 
        Department.
2. Expand the scope of information provided in the description 
        of proposed construction projects.
3. Repeal subsection (b) of Section 301 of P.L. 102-405.
4. Make technical changes in statutory terminology.
5. Remove statutory requirements that the Veterans Health 
        Administration be organized along certain clinical 
        specialties.

                       Background and Discussion

                      Major Construction Projects

    Section 101 of this legislation authorizes major 
construction projects for fiscal year 1996.
    The Committee has authorized $9 million for the renovation 
of several medical and surgical nursing units at the Lebanon 
(PA) VAMC. The renovation will provide for proper handicapped 
accessibility and patient privacy. It will also address the 
concerns of the increasing female veteran population at the 
facility by increasing privacy and updating the bathing and 
toilet facilities. Environmental conditions will also be 
improved by upgrading the facility's building infrastructure 
system.
    The $11.5 million authorized by the Committee for the 
Marion (IL) VAMC will go towards complete renovation of four 
medical and surgical wards and the intensive care unit in 
Building 1 of the facility. Improvements to be made include 
patient privacy, patient environment, fire, life safety, 
handicapped accessibility and utility system corrections. 
Currently, congregate toilets and baths are used by patients in 
the nine- and four-bed rooms. These facilities will be 
eliminated and replaced with single and semi-private rooms with 
baths.
    The Committee has authorized $17.3 million for the 
construction of a new 100-bed inpatient psychiatric building to 
replace the three current buildings at the Marion (IN) VAMC. 
The new facility will conform to current health care standards 
and will meet all applicable patient privacy, handicapped 
accessibility and space planning criteria. Because the original 
buildings are of significant historical value, renovation was 
prohibited.
    The Committee's authorization of $15.1 million to Perry 
Point (MD) VAMC will go towards patient privacy issues and VA 
space planning criteria. Specifically, this project will 
eliminate congregate bathing facilities, change the location of 
nursing stations, meet handicapped accessibility requirements, 
provide additional support space on wards, upgrade 
infrastructure systems and replace the elevators.
    The Committee has authorized $17.2 million at the Salisbury 
(NC) VAMC in order to renovate and modernize the facility. 
Currently, less than 10 percent of the building's existing 
nursing units have private toilets. This renovation will 
provide private and semi-private rooms with baths in order to 
allow privacy for patients, including the increasing female 
veteran population. The funding will also go towards making the 
facility handicapped-accessible and to upgrade indoor air 
quality.
    The Committee has authorized $9.8 million for an ambulatory 
care addition at the Temple (TX) VAMC because the current 
outpatient area was designed for 78,000 annual visits; however, 
the workload for FY 1993 alone was over 150,000. Additionally, 
space restraints require outpatient functions to be performed 
throughout the hospital and patients to travel long distances 
for clinic care.
    The Committee has authorized $35.5 million for an 
ambulatory care addition at the Tucson (AZ) VAMC to expand 
essential outpatient services and to resolve space deficiencies 
which impact quality of care and staff efficiency. The addition 
will provide over 90,000 square feet of new clinic and 
laboratory space for workload projections of 189,000 outpatient 
visits by the year 2005.
    $36.8 million has been authorized to correct seismic 
deficiencies at the Palo Alto (CA) VAMC. Work will be done to 
replace the concrete roof, shore up the structural steel, 
adjust the partition, provide asbestos abatement, reinstall 
insulating materials and replace the ceiling and floor 
finishes. The heating system will also be replaced.
    The Committee has authorized $20.2 million for seismic 
corrections at the Long Beach (CA) VAMC. The seismic upgrades 
include the addition of new shear walls, thickening of existing 
shear walls and enlarging of the existing columns beneath the 
existing shear walls. The funding will also go towards fire 
protections, ADA specifications and the correction mechanical 
and electrical code deficiencies. The buildings to receive 
these improvements are over 50 years old and are in serious 
need of seismic reinforcement.
    Finally, the Committee has authorized already-appropriated 
funds for the construction of an ambulatory care addition at 
the Boston (MA) VAMC. A three-story facility, connected to the 
main hospital building, will be constructed to expand and 
improve ambulatory care services. Also, an additional 170 
parking spaces will be provided for outpatient parking.
    In addition to the above projects, H.R. 2814 would 
authorize up to $25 million for construction of an outpatient 
clinic in Brevard County, FL and up to $25 million for 
construction of an outpatient clinic at Travis Air Force Base, 
in Fairfield, CA. With respect to these two projects, the 
reported bill calls for the Secretary of Veterans Affairs to 
determine the needed scope of each of these clinics, and limits 
the Secretary's authority to obligate any funds for either 
project until the Secretary makes the required determination 
and certifies to the Committees on Veterans Affairs the amounts 
actually required (based on that determination) for each of the 
projects.

                       Construction Authorization

    H.R. 2814 would authorize some $279 million in funding for 
major medical construction projects at 13 VA facilities. The 
projects selected constitute a package, all of which were 
either proposed by the Administration or address areas which VA 
has deemed a high priority. In authorizing these projects, the 
Committee has developed a balanced list, comprising projects to 
expand VA's ambulatory care capacity, to strengthen seismically 
vulnerable buildings, and to bring a number of aging facilities 
up to acceptable patient-privacy standards. In authorizing 
these projects, the Committee recognizes the many other 
facilities with similar construction needs, and the importance 
of refining VA's planning processes to review and address those 
needs on a priority basis.

                          East Central Florida

    The Committee attaches a high priority to meeting the needs 
of veterans in Florida, a state which has experienced and will 
likely continue to experience an increase in its veteran 
population. While Florida has seen a growth in VA's service-
delivery capacity, efforts to meet the needs of the veterans in 
east central Florida remain in some limbo.
    Last year Congress appropriated construction funds to 
convert the former Orlando Naval Training Center Hospital 
(which was transferred to the Department of Veterans Affairs) 
into a nursing home. VA currently operates an outpatient clinic 
at that facility, but has not begun construction of the nursing 
home care unit. Congress last year also appropriated $17.2 
million for design of a 470-bed medical center and 120-bed 
nursing home in Brevard County, Florida. That project, 
developed and proposed by the Department of Veterans Affairs, 
called for 230 psychiatric beds, 60 intermediate care beds, and 
an ambulatory care clinic, as well as a number of surgical and 
internal medicine beds. The Conference Report on the fiscal 
year 1996 VA/HUD appropriations bill, however, called for 
allotting that design money, along with $7.8 million in new 
funds, for design and construction of a comprehensive 
outpatient clinic in Brevard County. The Committee believes 
that $25 million may exceed the construction costs VA will 
incur for this clinic; thus, section 101(b) of the bill limits 
the Secretary's authority to obligate these funds to the amount 
the Secretary determines is actually needed for this clinic. 
While having provided for veterans' outpatient needs, the 
conference report makes no provision for meeting inpatient care 
needs that were to have been addressed by the Brevard project. 
The lack of long-term psychiatric beds in the State of Florida, 
for example, makes imperative an examination of how the medical 
needs of veterans in east central Florida can appropriately be 
met.
    In light of this recent Congressional action, the Committee 
believes that a reassessment of the health care needs of 
veterans in east central Florida is needed. Section 104 of the 
bill would require the Secretary to report to the committees on 
these veterans' needs. It would specifically require the 
Secretary to include in that report his views on how those 
needs could best be met through available appropriations 
(discussed above), to include that fraction of the monies 
appropriated for a clinic in Brevard County which may not be 
needed for construction of a comprehensive clinic. The 
Secretary's analysis should also include a re-examination, in 
light of changed circumstances, of the Secretary's plans for 
the former Orlando Naval Training Center Hospital.

              Strategic Planning for Health Care Resources

    Section 201 of the reported bill requires the VA to develop 
a five-year strategic plan for its health care system which 
specifically addresses the integration of planning efforts 
starting at the grass roots or local level, coordinated within 
a prescribed geographic network, and then formulated into a 
national plan. The plan is to be updated on an annual basis and 
is required to be submitted no later than January 31st of each 
year.
    The VA strategic plan required by the bill must address 
such factors as population trends, resource distribution, cost 
of patient care, capacity of non-Federal providers within 
prescribed geographic networks, the missions of each facility 
with the network, and specifically, the distribution of 
specialized services on a network and national level.
    Because of the unique needs of veterans, specialized 
services to treat and rehabilitate veterans with disabilities 
including spinal cord dysfunction, blindness, amputations, and 
mental illness are core programs, vital to the overall mission 
of the Department of Veterans Affairs. VA's core 
beneficiaries--service-connected disabled and medically 
indigent veterans--have a need for these services that cannot 
be easily or effectively met in the private sector. The 
Committee believes that planning for these services, although 
important at the geographic network level, must be part of a 
national VA strategic plan because of their cost and 
complexity.
    With the understanding that the Veterans Health 
Administration has undertaken countless planning exercises over 
the years, the Committee views coordination and integration of 
the planning process as essential to effective execution of a 
strategic plan. The plan would be required to lay out how 
coordination will occur within and among networks. It should 
also delineate the mix of services VA will provide, such as 
services provided in-house and through contract, and the market 
penetration or the percentage of veterans it expects to serve. 
As part of this effort, the VA should develop goals to increase 
its efforts to address the needs of service-connected veterans.
    In calling for the assignment of mission statements or 
changes to current missions, the Committee views this effort as 
part of the continuing shift to managed care to ensure that 
veterans health care is cost-effective and mirrors those 
practice patterns of the private sector that seek to promote 
quality care. There is also a broad consensus that effective 
planning and delineation of facility missions will speed the 
realignment process to reduce duplication of services and 
contribute to the more equitable distribution of resources. The 
Committee is very supportive of the efforts of the Under 
Secretary for Health as he implements his ``Vision for 
Change,'' and views the strategic planning requirement of the 
bill as parallel and complementary to the efforts of the 
Department. It is inherent that local health care facilities 
and networks have the authority and responsibility to operate 
programs in ways that meet veterans' needs.
    With the understanding that the veteran population is 
undergoing significant change both as it ages and declines in 
absolute numbers, the planning efforts of the Department must 
begin to address this phenomenon. The plan should also take 
account of changing practice patterns, including increased 
reliance on ambulatory care and also take account of the 
decreasing need for large inventories of hospital beds and even 
hospitals themselves. It is with this understanding that the 
Committee believes that strategic planning efforts must 
consider alternatives to ``bricks and mortar'' and rely more on 
such cost-effective, non-institutional alternatives to care 
delivery such as the Department's efforts to establish points 
of access in approximately 180 locations nationwide.
    The Committee has expressed its concern on numerous 
occasions with VA's inability to provide for greater equity of 
access for veterans on a nationwide basis. VA's reports show 
greater availability and accessibility to care for veterans in 
so-called ``Rust Belt'' states than for those veterans residing 
in ``Sun Belt'' states. In an effort to correct this disparity, 
the bill would require the Department to specifically compare 
expenditures of resources to patients by network. The plan 
should also address how the mix of professionals and use of 
various classes of health care professionals affects the cost 
and quality of care delivered to veterans. The plan should also 
address how resources will be redistributed to move toward 
relative parity for veterans nationwide. The Committee 
understands the achievement of this particular goal may require 
time and the incremental shifting of resources currently tied 
to the operation of facilities and personnel.
    Within the changing environment of health care, the excess 
capacity of non-Federal providers has taken on greater 
significance in the provision of cost-effective services and is 
a factor to be considered within the overall VA strategic plan. 
Other factors such as the increased use of contract care, 
opportunities for ``sharing'' arrangements, competition among 
health providers, and the desire of veterans to obtain health 
services within their local community, also merit continued 
assessment and consideration by VA and should be addressed in 
their strategic planning efforts.
    Consistent with the position reflected in this provision, 
the Committee, in its report on the authorization of major 
medical construction projects for fiscal year 1995, to 
accompany H.R. 4425, highlighted the importance of bringing 
services to the veteran to the maximum extent possible. In that 
connection, the Committee cited the important role that small-
scale community-based clinics can play in serving communities 
remote from VA facilities but with significant veteran 
populations. The report cited Dothan, Alabama as a case in 
point, with more than 38,500 veterans residing within a 50-mile 
radius, and with veterans having to travel over 100 miles to 
receive care at the nearest VA facility. While the Committee 
encouraged the Secretary ``to take a long look'' at 
establishing community-based clinics in Dothan and similar 
communities, it is regrettable that that need has not been met 
at Dothan. The Committee's review of the circumstances at 
Dothan strongly reflect a need for a community-based clinic and 
an active interest in the community and on the part of VA 
officials in developing a means of primary care access in 
Dothan. The Committee believes that the Tuscaloosa and 
Montgomery VA Medical Centers could work together to develop 
such a clinic, and directs the Secretary to establish this 
needed clinic.

                  Construction Project Prioritization

    The Committee's responsibility to authorize major medical 
construction projects and major medical leases makes it 
important that the Committee have objective tools with which to 
distinguish among the many competing VA construction projects 
awaiting authorization and funding. Tight budgets further 
heighten the Committee's need for reliable data regarding the 
relative need and priority of VA construction projects. The 
Committee is cognizant of the VA's longstanding efforts to 
refine a prioritization methodology aimed at providing an 
objective scoring system. Section 201 would provide for a 
compilation of, and reporting on, those projects which 
constitute, by category, the Department's current top 20 major 
medical construction projects. The measure calls for an annual 
report on the relative ranking of each project, compiled by 
category, and for each project, a description of the specific 
factors that account for the particular rank of each listed 
project. To assist the Committee and assure integrity to the 
process, the report is also to include a detailed explanation 
for any change in the rank and score of a project from one 
report to the next.
    The annual authorization process requires the Committee to 
examine in detail VA's construction proposals and other pending 
projects. The information called for in this report, as well as 
the more detailed rationale for VA's construction proposals 
required by section 202 of the bill, will assist the Committee 
in both its authorization and oversight roles.

                Construction Authorization Requirements

    Under current law, adopted in Public Law 102-405, a project 
for construction, alteration, or acquisition of a medical 
facility involving a total expenditure of more than $3 million 
constitutes a ``major'' project, requiring congressional 
authorization.
    The minor construction account provides a flexible source 
of funding--not subject to the authorization requirement--for 
projects which are not major in scope. That account has become 
increasingly important in helping VA move from an inpatient-
care-focused system to one which relies more heavily on 
ambulatory care, in keeping with the health care delivery model 
in the community. Many VA facilities have recognized the need 
to convert underutilized or closed hospital wards into 
additional clinic capacity. In many instances, such projects 
cannot be carried out with minor construction funds because of 
the $3 million limit. While the major construction account 
continues to be critical to support ambulatory care additions, 
for example, the imposition of an authorization requirement for 
a ``minor'' project under $5 million to convert ward space into 
additional outpatient treatment capacity can be a cumbersome, 
time-consuming requirement. VA's experience with prior 
increases in the minor construction threshold, would suggest 
that an across-the-board increase above $3 million would tend 
to encourage many projects coming in at the higher level. But 
there is merit to increasing the threshold for projects focused 
solely on renovating space to increase ambulatory care 
capacity, an area which merits a high priority for commitment 
of construction funds. Section 203(a) would effect that change 
in the authorization requirement.
    In adopting a construction authorization requirement, the 
Congress in Public Law 102-405 also made provision for 
``grandfathering'' projects for which funds were appropriated 
before the date of enactment. Since the law's enactment, 
Congress has appropriated additional funds for several 
``grandfathered'' projects. Sufficient time has elapsed, 
however, to permit earlier-funded projects to win additional 
needed funding without the requirement for specific 
authorization. As such, there remains no justification for 
excepting projects, which may no longer merit priority, from 
congressional authorization and the review associated with the 
authorization process. Section 203(b) would thus repeal the 
``grandfathering'' provision effective for fiscal year 1997 
funding.
    While seeking to refine its role in the authorization of 
construction projects, the Committee believes that its 
oversight role into the construction planning process should 
not confine its scope to project authorization. In that regard, 
the Committee anticipates that VA construction planning will 
necessarily change with the reorganization of the Veterans 
Health Administration and with implementation of the strategic 
planning process established under section 201. The Committee 
believes, however, that it can conduct more effective oversight 
through an additional measure that would review potentially 
large projects before the Department expends substantial sums 
in conceptual development. VA has long drawn on an advance 
planning fund to provide ``seed money'' to conduct preliminary 
development of future construction projects. The advance 
planning fund permits VA to do the complex developmental work 
including definition of specific requirements, development of 
alternative conceptual approaches for correcting perceived 
deficiencies, and (after selection of an appropriate concept) 
preliminary design drawings. The Committee does not seek to 
upset this process or to inject an authorization requirement 
into advance planning. Section 203(c) would, however, provide a 
role for targeted Committee review by requiring the Secretary 
to notify the committees of any proposed obligation in excess 
of $500,000 of Advance Planning Funds for project.

       Veterans Health Administration Headquarters Reorganization

    With the submission in March 1995 of its proposed ``Vision 
for Change'' of the Veterans Health Administration, VA's Under 
Secretary for Health proposed a plan to reorganize both VA 
field facilities into ``networks'' (and replace the 
administrative layer of VHA Regional Offices), as well as to 
streamline VHA's ``headquarters'' office.
    The Department submitted draft legislation on June 22, 
1995, which, in pertinent part, would ``facilitat[e] the 
reorganization of VHA's headquarters.'' VA's transmittal 
letter, in citing the need for such legislation, stated that 
the ``current centralized management model for VHA, which is in 
part required by statute, impedes the system's ability to adapt 
to the rapidly changing health-care environment.'' The VA's 
draft legislation would eliminate statutory requirements 
identifying required specified clinical service positions in 
the Office of the Under Secretary. The changes VA proposed were 
characterized as necessary to provide organizational 
flexibility.
    Section 205 proposes many of the changes VA sought in its 
draft bill. While generally providing the Under Secretary the 
breadth of flexibility he requested, the reported bill adds 
language to ensure that that Office is sufficiently staffed to 
provide expertise the Committee believes is needed. Thus the 
reported bill provides that the Under Secretary ensure that 
that Office is staffed so as to provide appropriate expertise 
in clinical care disciplines generally as well as in the 
unique, specialized VA programs such as blind rehabilitation, 
prosthetics, spinal cord dysfunction, mental illness, and 
geriatrics and long-term care. This requirement would not be 
met, in the absence of staff dedicated to these program areas, 
by ad hoc arrangements such as the use of field consultants or 
field clinician work-groups.

                      Section-By-Section Analysis

    Section 101(a) would authorize construction of 13 major 
medical facility projects.
    Section 101(b) would limit the VA's authority to obligate 
funds for construction of outpatient clinics authorized in 
subsection (a). Funds could not be obligated with respect to 
either project (1) until the Secretary determines and certifies 
with respect to the project the amount actually required to 
construct a clinic of such scope as to meet the needs of 
veterans who would reasonably be expected to obtain care at 
such clinic, and (2) in an amount in excess of the amount 
certified to be needed.
    Section 102 would authorize VA to enter into two major 
medical facility leases.
    Section 103(a) would authorize $250.9 million for projects 
authorized in section 101; $28 million for construction of a 
project at the Boston, MA VA Medical Center, as authorized in 
Public Law 103-452; and $2.79 million for the leases authorized 
in section 102.
    Section 103(b) would provide that the major construction 
projects provided for in title I could only be carried out 
using funds appropriated for fiscal year 1996 or a prior fiscal 
year.
    Section 104(a) would require the Secretary to report to the 
Veterans Affairs Committees not later than March 1, 1996, on 
the health care needs of veterans in east central Florida, and 
to include in that report the Secretary's views as to the best 
means of meeting such needs (and particularly their needs for 
psychiatric and long-term care) using the unobligated amounts 
appropriated for fiscal years 1995 and 1996 to meet such 
veterans' needs.
    Section 104(b) would limit the Secretary's authority to 
obligate funds, other than for working drawings, for the 
conversion of the former Orlando Naval Training Center Hospital 
in Orlando, Florida to a nursing home care unit until 15 days 
after the date on which the report required in section 104(a) 
is submitted.
    Section 201 would amend section 8107 of title 38, United 
States Code, to eliminate the requirement that the Department 
provide an annual report on the Department's five-year medical 
facility construction plans, and substitute a broader report 
requirement on long-range health planning. The required report 
is to include (1) a five-year strategic plan for provision of 
care (including provision of services for the specialized 
treatment and rehabilitative needs of disabled veterans) 
through networks of VA medical facilities operating within 
prescribed geographic service delivery areas; (2) a description 
of how such networks will coordinate their planning efforts; 
and (3) a profile of each network.
    Such network profile is to identify (1) the mission of each 
medical facility, or proposed facility; (2) any planned change 
in any facility's mission and the rationale for the change; (3) 
data regarding the population of veterans served by the network 
and anticipated changes both in demographics and in health-care 
needs; (4) pertinent data by which to assess the progress made 
toward achieving relative equivalency in the availability of 
services per patient in each network; (5) opportunities for 
providing veterans services through contract arrangements; and 
(6) five-year construction plans for facilities in each 
network.
    The report required by section 8107, as amended, is also to 
include information with respect to each VA medical care 
facility regarding progress toward instituting identified, 
planned mission changes; implementing managed care; and 
establishing new services to provide veterans alternatives to 
institutional care.
    Section 201 would also amend section 8107 to require an 
annual report showing (1) the 20 most highly ranked madjor 
medical construction projects by category of project) and the 
relative rank and priority score for each; (2) a description of 
the specific factors that account for the project's ranking in 
relation to other projects within the same category; and (3) a 
description of the reasons for any change in the ranking from 
the last report.
    Section 202 would amend section 8104(b) to require 
specified additional information to be included in the 
prospectus for each proposed medical facility construction 
project.
    Section 203(a) would expand the definition of the term 
``major medical facility project'' in section 8104(a) of title 
38 in the case of a project principally devoted to altering a 
medical facility to provide additional space for providing 
ambulatory care, to mean a project involving a total 
expenditure of more than $5 million.
    Section 203(b) would, effective with fiscal year 1997 
appropriations, repeal a ``grandfather clause'' established in 
section 301(b) of Public Law 102-405.
    Section 203(c) would require VA to provide the Committees 
on Veterans Affairs notice before it may obligate funds from 
the Advance Planning Fund in excess of $500,000, in the case of 
any one project, toward design or development of any major 
medical facility project.
    Section 204 would make technical changes in nomenclature in 
sections 8101 and 8109 of title 38, regarding elements of the 
construction process.
    Section 205(a) would delete the statutory requirement in 
section 7305 of title 38 that the Veterans Health 
Administration include specified clinical services, and would 
substitute language calling for an Office of the Under 
Secretary for Health and such professional and auxiliary 
services as the Secretary deems necessary; the provision would 
require the Under Secretary to ensure that there is included in 
the Office of the Under Secretary appropriate staff expertise, 
including expertise in generally specified specialized medical 
programs and appropriate clinical care disciplines.
    Section 205(b) would eliminate several of the provisions of 
section 7306 of title 38 which require that the Office of the 
Under Secretary include certain specified positions.

                           Oversight Findings

    No oversight findings have been submitted to the Committee 
by the Committee on Government Reform and Oversight.

               Congressional Budget Office Cost Estimate

    The following letter was received from the Congressional 
Budget Office concerning the cost of the reported bill:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, December 22, 1995.
Hon. Bob Stump,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office (CBO) 
has reviewed H.R. 2814, a bill to authorize major medical 
facility projects and major medical facility leases for the 
Department of Veterans Affairs for fiscal year 1996, and for 
other purposes, as ordered reported by the House Committee on 
Veterans' Affairs on December 20, 1995.
    The bill would not affect direct spending or receipts and 
thus would not be subject to pay-as-you go procedures under 
section 252 of the Balanced Budget and Emergency Deficit 
Control Act of 1995. The bill would not affect the budgets of 
state or local governments.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                           June E. O'Neill,
                                                          Director.
    Enclosure:

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

    1. Bill number: H.R. 2814.
    2. Bill title: A bill to major medical facility projects 
and major medical facility leases for the Department of 
Veterans Affairs for fiscal year 1996, and for other purposes.
    3. Bill status: As ordered reported by the House Committee 
on Veterans' Affairs on December 20, 1995.
    4. Bill purpose: The bill would authorize 12 major 
construction projects and two major facility leases. It would 
also authorize appropriations for these projects and leases. 
There are several additional provisions that would not have a 
significant budgetary impact.
    5. Estimated cost to the federal government:

    The following table summarizes the budgetary impact of H.R. 
2814, which would depend upon subsequent appropriations action.

                                                                                                                
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                              1995     1996     1997     1998     1999     2000 
----------------------------------------------------------------------------------------------------------------
                                                                                                                
                                    SPENDING SUBJECT TO APPROPRIATIONS ACTION                                   
Spending Under Current Law:                                                                                     
  Budget authority 1......................................      354        0        0        0        0        0
  Estimated outlays.......................................      541      423      385      317      232      155
Proposed Changes:                                                                                               
  Authorization level 2...................................        0      282        0        0        0        0
  Estimated outlays.......................................        0       13       37       52       54       49
Spending Under H.R. 2814:                                                                                       
  Authorization level \1\ \2\.............................      354      282        0        0        0        0
  Estimated outlays.......................................      541      436      422      369      286      204
----------------------------------------------------------------------------------------------------------------
1 The 1995 figure is the amount already appropriated.                                                           
2 Amount for fiscal year 1996 is an authorization subject to appropriations action.                             


    6. Basis of estimate: The estimate assumes enactment of the 
bill by February 1, 1996, and appropriation of the amounts 
authorized in the bill. The bill would authorize the 
appropriation of $279 million for 13 major construction 
projects and almost $3 million for two major leases. CBO used 
historical spending rates for VA major construction projects to 
estimate outlays.
    7. Pay-as-you-go considerations: The bill would not affect 
direct spending or receipts, it would have no pay-as-you-go 
implications.
    8. Estimated cost to state and local governments: None.
    9. Estimate comparison: None.
    10. Previous CBO estimate: None.
    11. Estimate prepared by: Michael Groarke.
    12. Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                     Inflationary Impact Statement

    The enactment of the reported bill would have no 
inflationary impact.

                  Applicability to Legislative Branch

    The reported bill would not be applicable to the 
legislative branch under the Congressional Accountability Act, 
Public Law 104-1, because it would apply only to certain 
Department of Veterans Affairs programs and facilities.

                     Statement of Federal Mandates

    The reported bill would not establish a federal mandate 
under the Unfunded Mandates Reform Act, Public Law 104-
4.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italics, existing law in which no change is proposed 
is shown in roman):

                      TITLE 38, UNITED STATES CODE

          * * * * * * *

             PART V--BOARDS, ADMINISTRATIONS, AND SERVICES

          * * * * * * *

 CHAPTER 73--VETERANS HEALTH ADMINISTRATION--ORGANIZATION AND FUNCTIONS

          * * * * * * *

                       Subchapter I--Organization

          * * * * * * *

Sec. 7305. Divisions of Veterans Health Administration

  [The Veterans Health Administration shall include the 
following:
          [(1) The Office of the Under Secretary for Health.
          [(2) A Medical Service.
          [(3) A Dental Service.
          [(4) A Podiatric Service.
          [(5) An Optometric Service.
          [(6) A Nursing Service.
          [(7) Such other professional and auxiliary services 
        as the Secretary may find to be necessary to carry out 
        the functions of the Administration.]
  (a) The Veterans Health Administration shall include the 
Office of the Under Secretary for Health and such professional 
and auxiliary services as the Secretary may find to be 
necessary to carry out the functions of the Administration.
  (b) In organizing, and appointing persons to positions in, 
the Office, the Under Secretary shall ensure that the Office is 
staffed so as to provide the Under Secretary with appropriate 
expertise, including expertise in--
          (1) unique programs operated by the Administration to 
        provide for the specialized treatment and 
        rehabilitation of disabled veterans (including blind 
        rehabilitation, spinal cord dysfunction, mental 
        illness, and geriatrics and long-term care); and
          (2) appropriate clinical care disciplines.

Sec. 7306. Office of the Under Secretary for Health

  (a) The Office of the Under Secretary for Health shall 
consist of the following:
          (1) The Deputy Under Secretary for Health, who shall 
        be the principal assistant of the Under Secretary for 
        Health and who shall be a qualified doctor of medicine.
          (2) The Associate Deputy Under Secretary for Health, 
        who shall be an assistant to the Under Secretary for 
        Health and the Deputy Under Secretary for Health [and 
        who shall be a qualified doctor of medicine].
          (3) Not to exceed eight Assistant Under Secretaries 
        for Health.
          (4) Such Medical Directors as may be appointed to 
        suit the needs of the Department, who shall be either a 
        qualified doctor of medicine or a qualified doctor of 
        dental surgery or dental medicine.
          [(5) A Director of Nursing Service, who shall be a 
        qualified registered nurse and who shall be responsible 
        to the Under Secretary for Health for the operation of 
        the Nursing Service.
          [(6) A Director of Pharmacy Service, a Director of 
        Dietetic Service, a Director of Podiatric Service, and 
        a Director of Optometric Service, who shall be 
        responsible to the Under Secretary for Health for the 
        operation of their respective Services.
          [(7) Such directors of such other professional or 
        auxiliary services as may be appointed to suit the 
        needs of the Department, who shall be responsible to 
        the Under Secretary for Health for the operation of 
        their respective services.]
          [(8)] (5) The Director of the National Center for 
        Preventive Health, who shall be responsible to the 
        Under Secretary for Health for the operation of the 
        Center.
          [(9)] (6) Such other personnel as may be authorized 
        by this chapter.
  (b) Of the Assistant Under Secretaries for Health appointed 
under [subsection (a)(3)--
          [(1) not more than two may be] subsection (a)(3), not 
        more than two may be persons qualified in the 
        administration of health services who are not doctors 
        of medicine, dental surgery, or dental medicines[;].
          [(2) one shall be a qualified doctor of dental 
        surgery or dental medicine who shall be directly 
        responsible to the Under Secretary for Health for the 
        operation of the Dental Service; and
          [(3) one shall be a qualified physician trained in, 
        or having suitable extensive experience in, geriatrics 
        who shall be responsible to the Under Secretary for 
        Health for evaluating all research, educational, and 
        clinical health-care programs carried out in the 
        Administration in the field of geriatrics and who shall 
        serve as the principal advisor to the Under Secretary 
        for Health with respect to such programs.]
          * * * * * * *

            PART VI--ACQUISITION AND DISPOSITION OF PROPERTY

          * * * * * * *

   CHAPTER 81--ACQUISITION AND OPERATION OF HOSPITAL AND DOMICILIARY 
    FACILITIES; PROCUREMENT AND SUPPLY; ENHANCED-USE LEASES OF REAL 
                                PROPERTY

          * * * * * * *

     Subchapter I--Acquisition and Operation of Medical Facilities

Sec. 8101. Definitions

  For the purposes of this subchapter:
  (1) The term ``alter'', with respect to a medical facility, 
means to repair, remodel, improve, or extend such medical 
facility.
  (2) The terms ``construct'' and ``alter'', with respect to a 
medical facility, include such engineering, architectural, 
legal, fiscal, and economic investigations and studies and such 
surveys, designs, plans, [working drawings] construction 
documents, specifications, procedures, and other similar 
actions as are necessary for the construction or alteration, as 
the case may be, of such medical facility and as are carried 
out after the completion of the advanced planning (including 
the development of project requirements and [preliminary plans] 
design development) for such facility.
          * * * * * * *

Sec. 8104. Congressional approval of certain medical facility 
                    acquisitions

  (a)(1) * * *
          * * * * * * *
  (3) For the purpose of this subsection:
          (A) The term ``major medical facility project'' means 
        a project for the construction, alteration, or 
        acquisition of a medical facility involving a total 
        expenditure of more than $3,000,000, but such term does 
        not include an acquisition by exchange, and, in the 
        case of a project which is principally for the 
        alteration of a medical facility to provide additional 
        space for provision of ambulatory care, such term means 
        a project involving a total expenditure of more than 
        $5,000,000.
          * * * * * * *
  (b) In the event that the President or the Secretary proposes 
to the Congress the funding of any construction, alteration, 
lease, or other acquisition to which subsection (a) of this 
section is applicable, the Secretary shall submit to each 
committee, on the same day, a prospectus of the proposed 
medical facility. Such prospectus [shall include--] shall 
include the following:
          (1) [a] A detailed description of the medical 
        facility to be constructed, altered, leased, or 
        otherwise acquired under this subchapter, including a 
        description of the location of such facility and, in 
        the case of a prospectus proposing the construction of 
        a new or replacement medical facility, a description of 
        the consideration that was given to acquiring an 
        existing facility by lease or purchase and to the 
        sharing of health-care resources with the Department of 
        Defense under section 8111 of this title[;].
          (2) [an] An estimate of the cost to the United States 
        of the construction, alteration, lease, or other 
        acquisition of such facility (including site costs, if 
        applicable)[; and].
          (3) [an] An estimate of the cost to the United States 
        of the equipment required for the operation of such 
        facility.
          (4) Demographic data applicable to the project, 
        including information on projected changes in the 
        population of veterans to be served by the project over 
        a five-year period and a ten-year period.
          (5) Current and projected workload and utilization 
        data.
          (6) Current and projected operating costs of the 
        facility, to include both recurring and non-recurring 
        costs.
          (7) The priority score assigned to the project under 
        the Department's prioritization methodology and, if the 
        project is being proposed for funding ahead of a 
        project with a higher score, a specific explanation of 
        the factors other than the priority that were 
        considered and the basis on which the project is 
        proposed for funding ahead of projects with higher 
        priority scores.
          (8) A listing of each alternative to construction of 
        the facility that has been considered.
          * * * * * * *
  (f) The Secretary may not obligate funds in an amount in 
excess of $500,000 from the Advance Planning Fund of the 
Department toward design or development of a major medical 
facility project until--
          (1) the Secretary submits to the committees a report 
        on the proposed obligation; and
          (2) a period of 30 days has passed after the date on 
        which the report is received by the committees.
          * * * * * * *

Sec. 8107. Operational and construction plans for medical facilities

  [(a)(1) In order to promote effective planning for the 
orderly construction, replacement, and alteration of medical 
facilities in accordance with the comparative urgency of the 
need for the services to be provided by such facilities, the 
Secretary, after considering the analysis and recommendations 
of the Under Secretary for Health, shall submit to each 
committee an annual report on the construction, replacement, 
alteration, and operation of medical facilities.
  [(2) Each such report shall contain--
          [(A) a five-year strategic plan for the operation and 
        construction of medical facilities--
                  [(i) setting forth--
                          [(I) the mission of each existing or 
                        proposed medical facility;
                          [(II) any planned change in such 
                        mission; and
                          [(III) the operational steps needed 
                        to achieve the facility's mission and 
                        the dates by which such steps are 
                        planned to be completed; and
                  [(ii) a five-year plan, based on the factors 
                set out in subclause (i) of this clause, for 
                construction, replacement, or alteration 
                projects for each such facility;
          [(B) a list, in order of priority, of not less than 
        10 hospitals that, in the judgment of the Secretary, 
        after considering the analysis and recommendations of 
        the Under Secretary for Health are most in need of 
        construction or replacement; and
          [(C) general plans (including projects costs, site 
        location, and, if appropriate, necessary land 
        acquisition) for each medical facility for which 
        construction, replacement, or alteration is planned 
        under clause (A)(ii) of this paragraph.
  [(3) The report under this subsection shall be submitted not 
later than June 30 of each year.]
  (a) In order to promote effective planning for the efficient 
provision of care to eligible veterans, the Secretary, based on 
the analysis and recommendations of the Under Secretary for 
Health, shall submit to each committee, not later than January 
31 of each year, a report regarding long-range health planning 
of the Department.
  (b) Each report under subsection (a) shall include the 
following:
          (1) A five-year strategic plan for the provision of 
        care under chapter 17 of this title to eligible 
        veterans through coordinated networks of medical 
        facilities operating within prescribed geographic 
        service-delivery areas, such plan to include provision 
        of services for the specialized treatment and 
        rehabilitative needs of disabled veterans (including 
        veterans with spinal cord dysfunction, blindness, 
        amputations, and mental illness) through distinct 
        programs or facilities of the Department dedicated to 
        the specialized needs of those veterans.
          (2) A description of how planning for the networks 
        will be coordinated.
          (3) A profile regarding each such network of medical 
        facilities which identifies--
                  (A) the mission of each existing or proposed 
                medical facility in the network;
                  (B) any planned change in the mission for any 
                such facility and the rationale for such 
                planned change;
                  (C) the population of veterans to be served 
                by the network and anticipated changes over a 
                five-year period and a ten-year period, 
                respectively, in that population and in the 
                health-care needs of that population;
                  (D) information relevant to assessing 
                progress toward the goal of achieving relative 
                equivalency in the level of resources per 
                patient distributed to each network, such 
                information to include the plans for and 
                progress toward lowering the cost of care-
                delivery in the network (by means such as 
                changes in the mix in the network of 
                physicians, nurses, physician assistants, and 
                advance practice nurses);
                  (E) the capacity of non-Federal facilities in 
                the network to provide acute, long-term, and 
                specialized treatment and rehabilitative 
                services (described in section 7305 of this 
                title), and determinations regarding the extent 
                to which services to be provided in each 
                service-delivery area and each facility in such 
                area should be provided directly through 
                facilities of the Department or through 
                contract or other arrangements, including 
                arrangements authorized under sections 8111 and 
                8153 of this title; and
                  (F) a five-year plan for construction, 
                replacement, or alteration projects in support 
                of the approved mission of each facility in the 
                network and a description of how those projects 
                will improve access to care, or quality of 
                care, for patients served in the network.
          (4) A status report for each facility on progress 
        toward--
                  (A) instituting planned mission changes 
                identified under paragraph (3)(B);
                  (B) implementing principles of managed care 
                of eligible veterans; and
                  (C) developing and instituting cost-effective 
                alternatives to provision of institutional 
                care.
  [(b)] (c) The Secretary shall submit to each committee not 
later than January 31 of each year a report showing the 
location, space, cost, and status of each medical facility (1) 
the construction, alteration, lease, or other acquisition of 
which has been approved under section 8104(a) of this title, 
and (2) which was uncompleted as of the date of the last 
preceding report made under this subsection.
  (d)(1) The Secretary shall submit to each committee, not 
later than January 31 of each year, a report showing the 
current priorities of the Department for proposed major medical 
construction projects. Each such report shall identify the 20 
projects, from within all the projects in the Department's 
inventory of proposed projects, that have the highest priority 
and, for those 20 projects, the relative priority and rank 
scoring of each such project. The 20 projects shall be 
compiled, and their relative rankings shall be shown, by 
category of project (including the categories of ambulatory 
care projects, nursing home care projects, and such other 
categories as the Secretary determines).
  (2) The Secretary shall include in each report, for each 
project listed, a description of the specific factors that 
account for the relative ranking of that project in relation to 
other projects within the same category.
  (3) In a case in which the relative ranking of a proposed 
project has changed since the last report under this subsection 
was submitted, the Secretary shall also include in the report a 
description of the reasons for the change in the ranking, 
including an explanation of any change in the scoring of the 
project under the Department's scoring system for proposed 
major medical construction projects.
          * * * * * * *
                              ----------                              


    SECTION 301 OF THE VETERANS' MEDICAL PROGRAMS AMENDMENTS OF 1992

SEC. 301. AUTHORIZATION REQUIREMENT FOR CONSTRUCTION OF NEW MEDICAL 
                    FACILITIES.

  (a) * * *
  [(b) Applicability.--The amendments made by subsection (a) 
shall not apply with respect to any project for which funds 
were appropriated before the date of the enactment of this 
Act.]
          * * * * * * *

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