United States Government Accountability Office

GAO Testimony 

Before the Subcommittee on Oversight 

and Investigations, Committee on 

Veterans’ Affairs, House of 

Representatives

DOD AND VA

Systematic Data Sharing 

Would Help Expedite 

Servicemembers’ Transition 

to VA Services 

Statement of Cynthia A. Bascetta 

Director, Health Care—Veterans’ 

 Health and Benefits Issues 

For Release on Delivery

Expected at 10:00 a.m. EDT 

Thursday, May 19, 2005

 

GAO-05-722T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

May 19, 2005

DOD AND VA

Systematic Data Sharing Would Help 

Expedite Servicemembers’ Transition to 

VA Services 

Highlights of GAO-05-722T, a testimony 

before the Subcommittee on Oversight 

and Investigations, Committee on

Veterans’ Affairs, House of 

Representatives 

Since the onset of Operation 

Enduring Freedom (OEF) and

Operation Iraqi Freedom (OIF), the 

Department of Defense (DOD) 

reported that more than 12,000 

servicemembers have been injured 

in combat. While many return to 

active duty, others with more 

serious injuries are likely to be

discharged from the military. To 

ensure the continuity of medical 

care and access to all other 

Department of Veterans Affairs’ 

(VA) benefits, such as vocational

rehabilitation, VA formed its 

Seamless Transition Task Force. 

In January 2005, GAO reported that 

VA had given high priority to 

OEF/OIF servicemembers, but 

faced challenges in identifying, 

locating, and following up with 

seriously injured servicemembers. 

GAO recommended that VA and 

DOD reach an agreement for VA to

obtain systematic data from DOD, 

and the departments concurred.

However, DOD raised privacy 

concerns. 

GAO was asked to review VA’s 

efforts to expedite vocational 

rehabilitation services to seriously

injured servicemembers and to 

determine the status of an 

agreement between DOD and VA to

share health data. GAO relied on its

prior work; interviewed VA and 

DOD officials; and reviewed the

Health Insurance Portability and 

Accountability Act of 1996 (HIPAA) 

and the HIPAA Privacy Rule, which

govern the sharing of individually

identifiable health data. 

While VA has taken steps to expedite services to seriously injured

servicemembers, VA does not have systematic data from DOD on seriously 

injured servicemembers who may need VA vocational rehabilitation and 

other benefits. As a result, VA has had to rely on its regional offices to 

develop informal data sharing arrangements with local military treatment 

facility (MTF) staff to identify servicemembers who may need vocational 

rehabilitation services. However, VA staff have no official data source from 

DOD from which to confirm the completeness and reliability of the data they 

obtain. Furthermore, they cannot provide reasonable assurance that some 

seriously injured servicemembers who may have benefited from vocational 

rehabilitation services have not been overlooked. Although several VA 

headquarters officials and regional office staff GAO interviewed said that 

systematic data from DOD would provide them with a way to reliably 

identify and follow up with seriously injured servicemembers, DOD and VA 

have not developed a data sharing agreement. Additionally, VA officials said 

these data would help VA plan for projected increases in the need for 

services for newly returning OEF/OIF servicemembers. VA has requested 

that DOD provide systematic data on seriously injured servicemembers who 

may need vocational rehabilitation. 

DOD and VA have been working on a data sharing agreement for over 

2 years, but have not reached an agreement. DOD and VA differ in their 

understanding of HIPAA Privacy Rule provisions that govern the sharing of 

individually identifiable health data for servicemembers currently receiving 

treatment at MTFs, and the extent to which the Privacy Rule would permit 

that exchange. DOD’s and VA’s inability to resolve these differences has 

impeded coming to an agreement on exchanging seriously injured 

servicemembers’ individually identifiable health data. Despite being unable 

to agree on an exchange of individually identifiable health data, DOD and VA 

are reviewing a draft memorandum of understanding, which the departments 

believe will move them closer to a data sharing agreement. However, GAO 

found that the draft memorandum restates many of the legal authorities 

contained in the Privacy Rule for the use and disclosure of individually 

identifiable health data. As a result, even if the memorandum of 

understanding is finalized, DOD and VA will still have to agree on what types 

of individually identifiable health data can be exchanged and when the data 

can be shared. DOD and VA generally agreed with GAO’s findings. 

www.gao.gov/cgi-bin/getrpt?GAO-05-722T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Cynthia A. 

Bascetta at (202) 512-7101. 
Mr. Chairman and Members of the Subcommittee: 

Thank you for inviting me to share our perspectives on seriously injured 

servicemembers who could benefit from services offered by the 

Department of Veterans Affairs (VA), such as vocational rehabilitation, 

disability compensation, and health care, as they transition from 

servicemember to veteran status. Since the onset of Operation Enduring 

Freedom (OEF) in October 2001 and Operation Iraqi Freedom (OIF) in 

March 2003, the Department of Defense (DOD) has reported that more 

than 12,000 servicemembers have been injured in combat. While many 

return to active duty after they are treated, others who are more seriously 

injured are likely to be discharged from their military obligations and 

return to civilian life with disabilities. To ensure the continuity of medical

care as a first priority as well as to coordinate efforts to ensure access to 

all other VA benefits, such as vocational rehabilitation, VA formed its 

Seamless Transition Task Force in August 2003. 

In January 2005, we reported that while VA has given high priority to 

providing services to OEF/OIF servicemembers, it was challenged in its 

efforts to identify, locate, and follow up with seriously injured 

servicemembers.1

 One key problem has been the lack of systematic data 

from DOD about who is seriously injured, the nature of their injuries, and 

where the servicemembers received treatment. As DOD and VA have 

worked toward a seamless transition, DOD raised concerns about privacy 

issues and the sharing of individually identifiable health data. We 

recommended that VA and DOD collaborate to reach an agreement for VA 

to have access to DOD data for seriously injured servicemembers that 

both departments agree are needed to promote recovery and return to 

work and both departments concurred. 

You asked us to testify on VA’s and DOD’s efforts to provide a seamless 

transition for seriously injured OEF/OIF servicemembers. Specifically, we 

(1) reviewed VA’s efforts to expedite vocational rehabilitation services to 

seriously injured servicemembers and (2) determined the status of an 

agreement between DOD and VA to share health data. My comments today 

highlight the findings of our earlier work on VA’s vocational rehabilitation 

 1

GAO, Vocational Rehabilitation: More VA and DOD Collaboration Needed to Expedite 

Services for Seriously Injured Servicemembers, GAO-05-167 (Washington, D.C.: Jan. 14, 

2005). 

Page 1 GAO-05-722T
services for seriously injured servicemembers returning from OEF/OIF 

and our ongoing work on DOD’s and VA’s data sharing agreement.2

Our January 2005 report on VA’s efforts to expedite vocational 

rehabilitation services to OEF/OIF servicemembers was based on 

interviews with officials at VA headquarters and at 12 of VA’s 57 regional

offices. Five of the 12 regional offices are located near the five major Army 

military treatment facilities (MTF) treating the majority of seriously 

injured OEF/OIF servicemembers during our review. We visited Walter 

Reed Army Medical Center where most seriously injured Army 

servicemembers are initially treated. To do our work on the status of 

DOD’s and VA’s data sharing agreement, we reviewed a draft

memorandum of understanding for the sharing of data between DOD and 

VA, pertinent provisions of the Health Insurance Portability and 

Accountability Act of 1996 (HIPAA) and the HIPAA Privacy Rule, which 

govern the sharing of individually identifiable health data.3

 We also spoke 

with officials responsible for the implementation of the Privacy Rule at 

DOD and VA. We discussed the information contained in this statement 

with DOD and VA officials who agreed with our findings. We did our work 

from March through May 2005 in accordance with generally accepted

government auditing standards. 

In summary, while VA has taken steps to expedite services to seriously 

injured OEF/OIF servicemembers, VA does not have systematic data from

DOD on those servicemembers who may need vocational rehabilitation 

and other benefits from VA. As a result, VA has had to rely on its regional 

offices to develop informal data sharing arrangements with local MTF staff 

to identify servicemembers who may need vocational rehabilitation 

services. However, VA staff have no official data source from DOD from

which to confirm the completeness and reliability of the data obtained 

through these informal, local arrangements. Furthermore, VA staff cannot

provide reasonable assurance that some seriously injured servicemembers 

who may have benefited from early intervention by a vocational 

rehabilitation counselor have not been overlooked. Unresolved issues 

between DOD and VA continue to delay the systematic sharing of data. To 

obtain systematic data from DOD on seriously injured OEF/OIF 

servicemembers who may need VA services, DOD and VA have been 

working on an agreement to exchange servicemembers’ health data for 

 2

See related GAO products listed at the end of this testimony. 

3

Pub. L. No. 104-191, § 264, 110 Stat. 1936, 2033-34; 45 C.F.R. § 164.500, et seq. (2004). 

Page 2 GAO-05-722T
over 2 years. DOD and VA differ in their understanding of HIPAA Privacy 

Rule provisions that govern the sharing of individually identifiable health 

data for seriously injured servicemembers receiving treatment in MTFs, 

and the extent to which the Privacy Rule would permit that exchange. 

DOD’s and VA’s inability to resolve these differences has impeded coming 

to an agreement on exchanging seriously injured servicemembers’ 

individually identifiable health data. We continue to believe that an 

agreement between DOD and VA to share health data would expedite the 

delivery of VA services to OEF/OIF servicemembers, as well as help 

ensure a seamless transition. 

Servicemembers deployed to Afghanistan and Iraq are surviving injuries 

that would have been fatal in past conflicts due, in part, to advances in 

battlefield medicine and protective equipment. However, the severity of 

their injuries can result in a lengthy transition from injured servicemember 

to veteran. Initially, most seriously injured servicemembers are brought to 

Landstuhl Regional Medical Center in Germany for treatment. From there, 

they are usually transported to major MTFs in the United States. 

According to DOD officials, once stabilized and discharged from MTFs, 

servicemembers usually relocate closer to their homes or military bases 

and are treated as outpatients. At this point, the military generally begins 

to assess whether the servicemember will be able to remain in the military, 

a process that could take months to complete. 

Background 

Faced with the need to provide benefits and services to a new generation

of veterans with disabilities, VA formed an internal task force—the 

Seamless Transition Task Force—in August 2003 to develop and 

implement policies to improve the transition of injured servicemembers 

back to civilian life. Although the task force’s initial priority was to ensure 

the continuity of medical care for injured servicemembers as they 

transitioned from military to VA health care, it also coordinated efforts to 

ensure access to all other VA benefits, including vocational rehabilitation. 

DOD has also supported transition assistance in various ways. For 

example, the VA/DOD Joint Executive Committee was established in 

February 2002 to promote collaboration between the two departments, 

including resolving obstacles to information sharing. The committee is 

chaired by the Deputy Secretary of Veterans Affairs and the Under 

Secretary of Defense for Personnel and Readiness. In addition, the Army—

in cooperation with VA—established the Disabled Soldier Support System 

in April 2004 as an advocacy group and information clearinghouse to 

clarify the services available to disabled soldiers as they transition to 

Page 3 GAO-05-722T
civilian life. In addition, DOD participated at times on VA’s Seamless 

Transition Task Force. 

Separation from the military and return to civilian life often entail the 

exchange of individually identifiable health data between DOD and VA. 

The exchange of these data must comply with the HIPAA Privacy Rule, 

which became effective April 14, 2001.4

 The Privacy Rule permits VA and 

DOD to share servicemembers’ health data under certain circumstances. 

VA has given priority consideration and assistance to seriously injured 

servicemembers returning from Afghanistan and Iraq. In a September 2003 

letter, VA asked its regional offices to coordinate with staff at MTFs in 

their areas to ascertain the identities, medical conditions, and military 

status of the seriously injured OEF/OIF servicemembers. VA specifically

instructed regional offices to focus on servicemembers whose disabilities

were definitely or likely to result in military separation. Minimally, this 

included servicemembers with injuries that had been classified as “very 

serious,” “serious,” or in a “special category.”5

 In this letter, VA instructed 

its regional offices to assign a case manager to each seriously injured 

servicemember who applied for disability compensation. In addition, VA 

noted the particular importance of early intervention for those who were 

seriously injured and emphasized that seriously injured servicemembers 

applying for vocational rehabilitation should receive the fastest possible 

service. Moreover, VA reminded vocational rehabilitation staff that they 

VA Has Taken Steps

to Expedite 

Vocational 

Rehabilitation 

Services, but Lack of 

Systematic Data from 

DOD Poses a 

Challenge 

 4

The Privacy Rule applies to covered entities and specifies how individually identifiable 

health data may be used and disclosed by covered entities. See 45 C.F.R. §§ 164.500(a), 

164.502 (2004). Covered entities are defined in the Privacy Rule as health plans, 

clearinghouses, and certain health care providers. Both the DOD health care system and 

the VA health care system are covered entities. See 45 C.F.R. § 160.103 (2004). All covered 

entities had to comply with the Privacy Rule by April 14, 2003, with the exception of small 

health plans. 

5

Army regulations classify illnesses and injuries as “very serious” when life is imminently 

endangered; as “serious” when there is a cause for immediate concern but there is no 

imminent danger to life; and as “special category” when the patient has a particular 

condition, such as loss of limb or sight, a psychiatric condition, paralysis, or a permanent 

disfigurement.

Page 4 GAO-05-722T
can initiate evaluation and counseling and, in some cases, authorize 

training before a servicemember was discharged.6

Since most seriously injured servicemembers are initially treated at major 

MTFs, VA has detailed staff to these facilities to identify and educate these 

servicemembers about VA services.7

 These staff include VA social workers 

and disability compensation benefits counselors. At Walter Reed Army 

Medical Center, where the largest number of seriously injured 

servicemembers has been treated, VA’s Washington, D.C. regional office

has since 2001 also provided a vocational rehabilitation counselor to work 

with hospitalized patients, specifically to offer and provide vocational 

counseling and evaluation. The counselor reported attempting to contact 

all patients within 48 hours of their arrival and visited them routinely 

thereafter to establish rapport. Her primary mission is to work with 

servicemembers who will need to prepare for civilian employment, 

although she told us that her early intervention efforts could also help 

servicemembers who are able to remain in the military. 

Staff at another regional office noted that they also advocate early 

intervention. These staff said that they try to contact servicemembers as 

soon as possible to establish rapport and provide vocational rehabilitation 

program information even before the servicemembers are physically ready 

to begin vocational rehabilitation. We previously reported on the 

importance of early intervention to maximize the work potential of 

individuals with disabilities. We reported, for example, that rehabilitation 

offered as close as possible to the onset of disabling impairments has the 

greatest likelihood of success.8

 6

Servicemembers can receive vocational rehabilitation services prior to separation from the

military under certain circumstances. For example, hospitalized servicemembers pending

discharge may receive all VA vocational rehabilitation benefits—such as counseling,

evaluation, and training—except for the monthly subsistence allowance. 38 U.S.C. §§ 3102, 

3104, and 3113. 

7

In our January 2005 report, we focused on five MTFs, which treated the majority of

seriously injured OEF/OIF servicemembers: Brooke Army Medical Center in Texas; Walter 

Reed Army Medical Center in Washington, D.C.; Madigan Army Medical Center in 

Washington; Eisenhower Army Medical Center in Georgia; and Darnall Army Community 

Hospital in Texas. VA also has placed staff at Evans Army Community Hospital in Colorado

and Bethesda Naval Medical Center in Maryland. 

8

GAO, Vocational Rehabilitation: VA Has Opportunities to Improve Services, but Faces

Significant Challenges, GAO-05-572T (Washington, D.C.: Apr. 20, 2005), and SSA 

Disability: Program Redesign Necessary to Encourage Return to Work, GAO/HEHS-96-62 

(Washington, D.C.: Apr. 24, 1996). 

Page 5 GAO-05-722T
Despite efforts by VA’s regional offices to identify and obtain medical 

information on seriously injured OEF/OIF servicemembers, lack of 

systematic data from DOD poses a challenge. Although VA requested in 

the spring of 2004 that DOD provide on a systematic basis personal 

identifying data, medical data, and DOD’s injury classification for seriously 

injured servicemembers, DOD and VA have not developed a data sharing 

agreement. In the absence of a data sharing agreement with DOD, VA 

cannot reliably identify all seriously injured servicemembers or know with 

certainty when they are medically stabilized, when they may be 

undergoing evaluation for a medical discharge, or when they are 

discharged from the military. As a result, VA cannot provide reasonable 

assurance that some seriously injured servicemembers who may benefit 

from vocational rehabilitation services have not been overlooked. 

In our review of 12 VA regional offices, we found that the nature of the 

local relationship between VA staff and MTF staff was a key factor in the 

completeness and reliability of the information that the MTF provided on 

seriously injured servicemembers. For example, at one location, the MTF 

staff provided VA regional office staff with the names of new patients but 

no indication of the severity of their conditions or the combat theater from

which they were returning. Another regional office reported receiving lists 

of servicemembers for whom the Army had initiated a medical separation

in addition to lists of patients with information on the severity of their 

injuries. Some regional offices were able to capitalize on long-standing 

informal relationships. For example, the VA coordinator responsible for 

identifying and monitoring the seriously injured servicemembers at one 

regional office had served as an Army nurse at the local MTF and was 

provided all pertinent information. 

VA staff at the 12 regional offices generally expressed confidence that the 

data sources they developed enabled them to identify most seriously 

injured servicemembers. However, we noted that informal data sharing 

relationships could break down with changes in personnel at either the 

MTF or the VA regional office. Several VA headquarters’ officials and 

regional office staff we interviewed said that systematic data from DOD 

would provide them with a way to reliably identify and follow up with 

seriously injured servicemembers. Additionally, VA officials said these 

data would help them plan for projected increases in services for newly 

returning OEF/OIF servicemembers.

Page 6 GAO-05-722T
After more than 2 years of discussion, DOD and VA have not developed a 

data sharing agreement. Although DOD and VA officials agree that the 

HIPAA Privacy Rule permits the exchange of individually identifiable 

health data if the individual signs a proper authorization, the departments 

have not pursued this as an alternative to a data sharing agreement. DOD 

and VA officials said the departments want to pursue options under other 

provisions of the Privacy Rule that may permit them to exchange data

without individual authorizations. However, DOD and VA differ in their 

understanding of HIPAA Privacy Rule provisions that govern the sharing 

of individually identifiable health data for servicemembers currently 

receiving treatment in MTFs without an authorization, and the extent to 

which the Privacy Rule would permit that exchange. DOD’s and VA’s 

inability to resolve these differences has impeded coming to an agreement

on exchanging servicemembers’ individually identifiable health data. 

Unresolved Issues 

Continue to Delay a 

Data Sharing 

Agreement 

Two examples help illustrate the different views of DOD and VA regarding 

the HIPAA Privacy Rule. First, the Privacy Rule permits covered entities 

that are also government agencies providing public benefits to disclose 

individually identifiable health data to each other when the programs 

serve the same or similar populations, and the disclosure is necessary to 

coordinate the covered functions of such programs or to improve 

administration and management related to the covered functions of the 

programs.9,10 VA officials have said they believe that this provision allows 

DOD to share servicemembers’ health data with VA because the 

departments serve the same or similar populations—active duty 

servicemembers who transition to veteran status. VA officials also said 

they believe that DOD and VA provide public benefits. In contrast, a DOD 

official who is responsible for implementation of the Privacy Rule does not

agree that DOD and VA serve the same or similar populations or that DOD 

provides public benefits. This official said he believes that serving the 

same or similar populations means that servicemembers have a dual 

eligibility for both DOD and VA services. Although the official said that 

while some former servicemembers are dually eligible for DOD and VA 

services, not all qualify for both services simultaneously. This official also 

said that the services that DOD provides are not public benefits because 

they are unlike the examples of public benefits programs provided in the 

 9

See 45 C.F.R § 164.512(k)(6) (2004). 

10Covered functions in general are a health plan’s or health care provider’s activities of 

providing or arranging for health care services. See 45 C.F.R. § 164.103 (2004). 

Page 7 GAO-05-722T
preamble to the Privacy Rule.11 The Privacy Rule does not define public 

benefits. 

In the second example, the Privacy Rule explicitly permits the disclosure 

of individually identifiable health data by DOD to VA upon the separation 

or discharge of a servicemember in order to determine eligibility for VA 

benefits.12 DOD views “upon the separation or discharge” as referring to 

the separation process that varies by servicemember, but which begins 

with the decision by DOD that the servicemember will separate. According 

to VA officials, the HIPAA Privacy Rule would allow DOD to share data 

sooner than the decision by DOD that the servicemember will separate. 

However, DOD is reluctant to provide individually identifiable health data

to VA until DOD is certain that a servicemember will separate from the 

military. DOD is concerned that VA’s outreach to servicemembers who are 

still on active duty could work at cross-purposes to the military’s retention 

goals. According to DOD officials, it would be premature for VA to begin 

working with servicemembers who may eventually return to active duty. 

VA contends that DOD could define the specific point of separation or 

discharge earlier in the process. In commenting on our January 2005 

report, VA said that a memorandum of understanding was then being 

negotiated that would allow VA to obtain from DOD the servicemember’s 

medical information prior to discharge from military service. VA added 

that its Office of General Counsel was confident that there are exceptions 

in the Privacy Rule that would permit military service medical information 

to be disclosed for VA benefits purposes and that it had pressed the case 

with DOD’s General Counsel. As of May 17, 2005, the memorandum of 

understanding between DOD and VA has not been finalized. 

Despite being unable to agree on an exchange of individually identifiable 

health data, DOD and VA are currently reviewing a draft memorandum of 

understanding. DOD and VA officials told us they believe that the 

memorandum of understanding will move the two departments closer to a 

data sharing agreement. However, we found that the draft memorandum of

understanding restates many of the legal authorities contained in the 

Privacy Rule for the use and disclosure of individually identifiable health 

data. For example, the draft memorandum of understanding does not 

specify that individually identifiable health data of OEF/OIF 

servicemembers shall be disclosed and restates that data will be shared 

 11See 65 Fed. Reg. 82462, 82541-42 (2000). 

12See 45 C.F.R. § 164.512(k)(1)(ii) (2004). 

Page 8 GAO-05-722T
upon separation or discharge without further defining the specific point 

during the separation or discharge process when data can be shared. As a 

result, even if the memorandum of understanding is finalized, DOD and VA 

will still not have a data sharing agreement that specifies what types of 

individually identifiable health data can be exchanged and when the data

can be shared. 

Mr. Chairman, this completes my prepared remarks. I will be pleased to 

answer any questions you or other Members of the Subcommittee may 

have at this time. 

For further information, please contact Cynthia A. Bascetta at (202) 512-

7101. Also contributing to this statement were Mary Ann Curran, Marcia 

Mann, Kevin Milne, and Janet Overton. 

Contact and 

Acknowledgments 

Page 9 GAO-05-722T
Page 10 GAO-05-722T

Related GAO Products 

Vocational Rehabilitation: VA Has Opportunities to Improve Services, 

but Faces Significant Challenges. GAO-05-572T. Washington, D.C.: 

April 20, 2005. 

VA Disability Benefits and Health Care: Providing Certain Services to 

the Seriously Injured Poses Challenges. GAO-05-444T. Washington, D.C.: 

March 17, 2005. 

Vocational Rehabilitation: More VA and DOD Collaboration Needed to 

Expedite Services for Seriously Injured Servicemembers. GAO-05-167. 

Washington, D.C.: January 14, 2005. 

Health Information: First-Year Experiences under the Federal Privacy 

Rule. GAO-04-965. Washington, D.C.: September 3, 2004. 

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