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S. HRG. 114–611 

THE FISCAL YEAR 2017 BUDGET FOR VETERANS’ 

PROGRAMS 

HEARING 

BEFORE THE

COMMITTEE ON VETERANS’ AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

FEBRUARY 23, 2016 

Printed for the use of the Committee on Veterans’ Affairs 

( 

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

(II) 

COMMITTEE ON VETERANS’ AFFAIRS 

JOHNNY ISAKSON, Georgia, Chairman 

JERRY MORAN, Kansas 

JOHN BOOZMAN, Arkansas 

DEAN HELLER, Nevada 

BILL CASSIDY, Louisiana 

MIKE ROUNDS, South Dakota 

THOM TILLIS, North Carolina 

DAN SULLIVAN, Alaska 

RICHARD BLUMENTHAL, Connecticut, Ranking 

Member 

PATTY MURRAY, Washington 

BERNARD SANDERS, (I) Vermont 

SHERROD BROWN, Ohio 

JON TESTER, Montana 

MAZIE K. HIRONO, Hawaii 

JOE MANCHIN III, West Virginia 

TOM BOWMAN, Staff Director 

JOHN KRUSE, Democratic Staff Director 

(III) 

C O N T E N T S 

FEBRUARY 23, 2016 

SENATORS 

Page 

Isakson, Hon. Johnny, Chairman, U.S. Senator from Georgia ............................ 1 

Blumenthal, Hon. Richard, Ranking Member, U.S. Senator from Connecticut ... 2 

Rounds, Hon. Mike, U.S. Senator from South Dakota ......................................... 58 

Tester, Hon. Jon, U.S. Senator from Montana ...................................................... 60 

Moran, Hon. Jerry, U.S. Senator from Kansas ..................................................... 62 

Brown, Hon. Sherrod, U.S. Senator from Ohio ..................................................... 64 

Tillis, Hon. Thom, U.S. Senator from North Carolina .......................................... 66 

Sullivan, Hon. Dan, U.S. Senator from Alaska ..................................................... 69 

Cassidy, Hon. Bill, U.S. Senator from Louisiana .................................................. 71 

Boozman, Hon. John, U.S. Senator from Arkansas .............................................. 73 

WITNESSES 

McDonald, Hon. Robert A., Secretary, U.S. Department of Veterans Affairs; 

accompanied by Hon. David J. Shulkin, M.D., Under Secretary for Health; 

Danny Pummill, Acting Under Secretary for Benefits; Ronald E. Walters, 

Interim Under Secretary for Memorial Affairs; Hon. LaVerne Council, Assistant Secretary for Information and Technology and Chief Information 

Officer; and Ed Murray, Interim Secretary for Management and Interim 

Chief Financial Officer ......................................................................................... 3 

Prepared statement .......................................................................................... 7 

Response to prehearing questions submitted by Hon. Johnny Isakson ....... 34 

Response to posthearing questions submitted by: 

Hon. Johnny Isakson .................................................................................... 75 

Hon. Dean Heller .......................................................................................... 172 

Hon. Mike Rounds ........................................................................................ 172 

Hon. Dan Sullivan ........................................................................................ 172 

Hon. Richard Blumenthal ............................................................................ 174 

Hon. Sherrod Brown ..................................................................................... 182 

Hon. Mazie K. Hirono ................................................................................... 183 

INDEPENDENT BUDGET REPRESENTATIVES

Blake, Carl, Associate Executive Director, Government Relations, Paralyzed 

Veterans of America ............................................................................................. 234 

Prepared joint statement of IBVSOs .............................................................. 239 

Varela, Paul, Assistant National Legislative Director, Disabled American 

Veterans ................................................................................................................ 236 

Response to request arising during the hearing by Hon. Johnny Isakson .. 261 

Kelley, Ray, Director, National Legislative Service, Veterans of Foreign Wars 

of the United States ............................................................................................. 237 

OTHER VETERANS SERVICE ORGANIZATIONS

Celli, Louis J., Jr., Director, National Veterans Affairs and Rehabilitation, 

The American Legion ........................................................................................... 255 

Prepared statement .......................................................................................... 256 

(1) 

THE FISCAL YEAR 2017 BUDGET FOR 

VETERANS’ PROGRAMS 

TUESDAY, FEBRUARY 23, 2016 

U.S. SENATE, 

COMMITTEE ON VETERANS’ AFFAIRS, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:02 a.m., in room 

418, Russell Senate Office Building, Hon. Johnny Isakson, Chairman of the Committee, presiding. 

Present: Senators Isakson, Moran, Boozman, Cassidy, Rounds, 

Tillis, Sullivan, Blumenthal, Brown, Tester, Hirono, and Manchin. 

OPENING STATEMENT OF HON. JOHNNY ISAKSON, 

CHAIRMAN, U.S. SENATOR FROM GEORGIA 

Chairman ISAKSON. Welcome to the Senate Committee on Veterans’ Affairs. Thank you for being here today. Mr. Secretary, 

thank you for coming today and bringing your cast of thousands. 

You have got a lot of support here today. We have got the Secretary—big budget, big support. 

We are proud to have Secretary McDonald here today. We are 

proud to have Danny Pummill, Dr. Shulkin—great to have you 

here, and thanks for the great job you are doing—Ronald Walters, 

LaVerne Council, and Ed Murray. We appreciate all of you being 

here. With all that support, Mr. Secretary, I am sure you are going 

to do a great job. 

I will make my opening statement and then turn to Senator 

Blumenthal, and then we will go straight to your testimony. As in 

the last case, Mr. Secretary, I do not want you to feel compelled 

by our customary 5-minute standard. I want you to be able to say 

what you have to say, understanding the average attention span of 

a U.S. Senator is probably about 9 minutes. [Laughter.] 

After that, we all start blinking. Speaking for myself; that is a 

self-imposed limitation. 

Thank you very much, Mr. Secretary, for being here today. We are looking forward to discussing the $182 billion budgetary appropriation for the Veterans Administration, an 8.9-percent increase 

over the fiscal year 2016 budget. Should it be adopted, medical care 

funding would increase by $3.8 billion, or 6.3 percent. 

The Office of Information Technology, or IT, would be increased by $145 million. I am very encouraged that you have embraced a 

program to merge the non-VA programs to see to it that Choice is 

delivered correctly and appropriately and funded well. We look forward to hearing your discussion on that. 

2 

Your testimony also talks a little bit about accountability. In fact, 

I read the information. ‘‘Accountability’’ is a word that is used one 

time, but it is probably the most important thing that this Committee is really interested in. 

You and I had a great meeting at your office last week, Mr. Secretary, and I want to acknowledge publicly with the Members of 

the Committee to thank Senator Blumenthal and Senator Murray’s 

staff for the work they are doing. 

I have stated publicly—and I am doing it again right now publicly—that my goal is to see to it that by the end of March we have 

an accountability bill for the Veterans Administration employees 

that is right for the veterans and right for those employees, and 

that we look to the future to see to it, if we have problems in the 

future—which I hope we will never have them, but life is life; you 

are going to have them—that we have a defensible accountability 

system within the Department to correct a wrong and make it not 

happen again. 

We have had too many cases, most of them, if not all of them 

are pre-your service, Mr. Secretary. The Inspector General reports 

from 2 and 3 years ago that are impossible to explain, highlight 

lack of accountability and implementation that is impossible to understand. We want to put that behind us for the future and build 

a platform that is good for the employees, good for middle management, and good for the Veterans Administration, but, most importantly, good for the veterans themselves. They need to know they 

are getting quality services and quality accountability. It is very 

important that we do that. That is the most important thing that 

we can do. 

Last, you talked about reforming the appeals process. I hope you 

will address that in your remarks. That is something we have 

talked about many times, have not done, and it is something we 

rightfully need to do. I would love to know as much specifics about 

what you are going to recommend as possible. 

We are glad you are here today. We appreciate your service to 

the country. It is an honor for me to now introduce the Ranking 

Member, Senator Blumenthal. 

OPENING STATEMENT OF HON. RICHARD BLUMENTHAL, 

RANKING MEMBER, U.S. SENATOR FROM CONNECTICUT 

Senator BLUMENTHAL. Thanks, Mr. Chairman, and I want to second your remarks about the need for an accountability bill which 

is, I think, making progress with very close bipartisan cooperation 

between our staffs and ourselves. I want to thank the Secretary 

and the President for a very robust and profoundly significant 

budget. The VA is going through major changes as it looks toward 

the future and prepares for an even more challenging future so far 

as the needs of our veterans are concerned in areas of not only 

health care but also jobs, job training, and skill preparation and, 

of course, homelessness. Connecticut, I am very delighted to say, is 

at the forefront of that effort, in fact, announced just last week that 

we have ended homelessness for veterans in Connecticut. Of 

course, that is a continuing effort. It is a milestone, not a finish 

line, and we need to continue to provide permanent housing for all 

3 

of our veterans, not just a temporary or transitional forms of 

housing. 

This budget request focuses, fortunately, on a number of areas 

that I think are important, breakthrough priorities such as community health care, accountability, and the appeals process. I also 

think that in terms of our medical care, the challenges of Post 

Traumatic Stress and the research and outreach that needs to be 

done need to be given priority. 

I hope that this hearing will be an opportunity to hear from you 

about more of the details of this proposal, but I also think that the 

vision for the future is tremendously important not only this year 

but looking beyond this year, just as you would at a company like 

Proctor & Gamble—beyond this quarter, beyond this year—to think 

about what this enterprise is going to look like in 5 years, in 10 

years. Now is the time to build for the veterans who will be coming 

out of the service, and there will be more and more of them over 

the next few years as we downsize our active-duty force. 

So, I thank you for being here. I am looking forward to hearing 

from you and from the veterans service organizations that perform 

such an important and vital role in keeping us informed about veterans’ needs while making sure that all of us are held accountable. 

Thank you. 

Chairman ISAKSON. Thank you, Senator Blumenthal. 

Mr. Secretary, it is all yours. 

STATEMENT OF HON. ROBERT A. MCDONALD, SECRETARY, U.S. 

DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY 

HON. DAVID J. SHULKIN, M.D., UNDER SECRETARY FOR 

HEALTH; DANNY PUMMILL, ACTING UNDER SECRETARY FOR 

BENEFITS; RONALD E. WALTERS, INTERIM UNDER SECRETARY FOR MEMORIAL AFFAIRS; HON. LAVERNE COUNCIL, 

ASSISTANT SECRETARY FOR INFORMATION AND TECHNOLOGY AND CHIEF INFORMATION OFFICER; AND ED MURRAY, INTERIM SECRETARY FOR MANAGEMENT AND INTERIM CHIEF FINANCIAL OFFICER 

Secretary MCDONALD. Thank you, Mr. Chairman. 

Chairman Isakson, Ranking Member Blumenthal, and Members 

of the Committee, thanks for the opportunity to present the President’s 2017 budget and 2018 advance appropriations requests for 

the Department of Veterans Affairs. I have a written statement 

that I ask be submitted for the record, Mr. Chairman. 

Mr. Chairman, the President’s proposal is another strong, tangible sign of his devotion to veterans and their families. It proposes 

$182.3 billion for the Department in fiscal year 2017, which includes $78.7 billion in discretionary funding, a 4.9-percent increase 

above the 2016 enacted level, largely for health care. It includes 

$12.2 billion for care in the community and a new medical community care budget account consistent with the VA budget and Choice 

Improvement Act. It includes $103.6 billion in mandatory funding 

for veterans benefit programs and $103.9 billion in advance appropriations for our three major mandatory veterans benefit accounts. 

It supports VA’s four agency priority goals and our five MyVA 

transformational objectives to modernize VA and improve the veteran experience, improve the employee experience, improve interVerDate Mar 15 2010 19:02 May 01, 2017 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 Z:\ACTIVE\022316.TXT PAULIN
4 

nal support services, establish a culture of continuous improvement, and expand strategic partnerships. Those five transformational objectives are about growing VA into the high-performance organization veterans deserve and taxpayers expect. 

I learned over three decades in the private sector at Procter & 

Gamble what makes a high-performance organization. It takes a 

clear purpose, strong values, enduring principles, and technical 

competence. High-performance organizations depend on sound 

strategies. They thrive with passionate leaders who are willing to 

take tough decisions and make bold changes to improve. High-performance organizations require responsive systems and processes 

designed and managed in a high-performing culture. 

Well, VA has a clear purpose in our most noble mission to care 

for those who have borne the battle. We have strong core values: 

integrity, commitment, advocacy, respect, and excellence. Our strategic plan makes clear that we are a customer service organization. 

We serve veterans. 

Our 5 MyVA transformational objectives and our 12 breakthrough priorities for 2016 are about accomplishing that strategy. 

Ten of our top 16 executives are new since I became Secretary. 

They are part of a growing team of talented, enthusiastic former 

business leaders and experienced Government and health care professionals. They are making innovative changes and creating opportunities for even greater progress. 

We are making the sweeping changes necessary for VA to be a 

high-performing organization, and we will know we are getting 

there when, by design, veterans’ needs shape our systems, our processes, and our culture. 

For example, a responsive health care system for veterans 

means: veterans have 24/7 access to VA systems and know where 

to get accurate answers, whether that is their Veteran Contact 

Center or the Veterans Crisis Line; veterans calling or visiting primary care facilities and medical centers have their clinical needs 

addressed the very same day; veterans calling for new mental 

health appointments receive suicide risk assessments and immediate care, if needed; and veterans already engaged in mental 

health care who need urgent attention speak to a provider the very 

same day. 

For employees serving veterans, it means a high-performing culture where continuous improvement drives responsive, forward 

thinking and innovative change. It means training our workforce 

on advanced business techniques. It means responsive performance 

management systems that resonate with employees and encourage 

rather than discourage continuous improvement and excellence. It 

means proper employee placement, clear performance expectations, 

continuous feedback, and employees equipped with the tools to 

achieve excellence. It means executive performance ratings and bonuses that reflect actual performance and take into account relevant inputs like veteran outcomes, results of employee surveys, 

and 360-degree feedback. It means modern automated systems in 

place of antiquated, cumbersome, and costly paper processes. These 

are a few characteristics of high-performing systems, processes, 

and culture. We are advancing along these lines and many others. 

5 

We launched our cascading Leading Developing Leaders training 

last year with 450 senior field leaders. It is not a single event. It 

is a continuous enterprise-wide process of leaders teaching leaders 

teaching leaders in order to inculcate lasting change. So far, we 

have trained more than 5,000 employees. By the year’s end, we will 

have trained over 12,000 senior leaders, empowering teams to dramatically improve care and service delivery to veterans while creating better work environments for employees. 

Private sector leadership experts are developing VA teams in 

new ways with cutting-edge business skills like Lean Six Sigma 

and Human Centered Design. We are using Human Centered Design and Lean Six Sigma right now to redesign the compensation 

and pension process because veterans find it confusing and burdensome. We are looking at industry best practices and planning for 

an automatic performance management solution for general schedule employees. We can streamline that process, improve rating accuracy, and interface with OPM. All of this is focused on moving 

VA into the ranks of high-performing organizations. That goal is in 

reach, but we need your continued support to achieve it. 

I appreciate our extensive discussion at the end of January on 

our MyVA 12 breakthrough priorities for 2016. The proposed budget continues support of those priorities into 2017. It provides $65 

billion for veterans’ medical care, a 6.3-percent increase over 2016. 

It provides $66.4 billion in advance appropriations for the VA medical care programs in 2018. That is a 2.2-percent increase above the 

2017 request. It provides $7.8 billion for mental health, funds Veteran Contact Centers in the field and Veterans Crisis Line modernization. It funds telehealth access, enhances health programs 

for women veterans, and provides an incredibly effective hepatitis 

C treatment to an expected 35,000 veterans. 

To help integrate all the MyVA initiatives across the enterprise, it provides $2.6 million for the MyVA program office. To continue 

training field employees on advanced business skills and establishing high customer service standards, it increases funding for 

our Veteran Experience Office by 47 percent. 

We will continue doing all we can to squeeze as much as possible 

out of every single budget dollar. 

Our pharmacy benefits management program avoided $4.2 billion in unnecessary drug expenditures last year. We saved over 

half a billion dollars in travel spending since 2013, exceeding goals 

of the President’s campaign to cut waste. We have reduced employee award spending $150 million, and we have reduced SES bonuses 64 percent between 2011 and 2015 by rigorously linking 

awards to performance. 

Since 2011, we have saved $16.6 million using more efficient 

training and meeting methods. We are already saving $10 million 

annually under our MyVA’s five-district structure that we announced in January 2015. 

We have saved approximately $5.5 million from 2011 to 2015 by 

strengthening controls over permanent change-of-station moves. 

Now that we have implemented electronic claims processing, we 

will save millions of dollars each year in paper storage. 

We are committed to doing everything we can with everything 

we are given, but many, many important priorities for meaningful 

6 

change require substantial congressional action. There are more 

than 100 legislative proposals in the budget. Over 40 of them are 

new this year, and some are absolutely critical just to maintain our 

current ability to purchase non-VA care. 

It is critical that VA is competitive with the private sector so we 

can attract top talent. Nowhere is that more important than in 

health care. So, among other VHA personnel authority adjustments, we are proposing flexibility on the maximum 80-hour pay 

period requirement for certain medical professionals. It will help 

improve hospital operations and attract the best possible hospital 

staff who prefer more flexible schedules. We are proposing critical 

compensation reforms for network and hospital directors. 

Likewise, the Title 38 SES proposal we are working on is about 

being competitive with the private sector in recruiting and in compensation. It is not just about firing people. It is about treating VA 

career executives more like their private sector counterparts. It is 

the kind of flexibility that attracts top performers in the private 

sector as well. VA needs that flexibility, too. 

We need your help to transform and streamline VA’s care in the 

community systems and programs to best serve veterans. We need 

your help modernizing and clarifying VA’s purchase care authorities to maintain veterans’ access to timely community care everywhere in the country. We have provided Congress with detailed 

legislation addressing this challenge more than 9 months ago, and 

I have consistently identified it as a top legislative priority. Above 

all, this needs to get done in this Congress to ensure that strong 

foundation for access to community care. 

Artificial funding restrictions are unresponsive to veterans’ 

needs, so we are proposing a general transfer authority that allows 

me some measured spending flexibility to respond to the veterans’ 

emerging needs. 

The appeals process set by statute is archaic, unresponsive, and 

not serving veterans well. Last year, the Board was still adjudicating an appeal that originate 25 years ago and had been decided 

more than 27 times. The budget proposes a simplified, streamlined, 

and fair appeals process so that 5 years from now veterans have 

appeals resolved within 1 year of filing. While requiring short-term 

staffing increases to contend with the 445,000 pending appeals, legislating a simplified appeals process can save more than $139 million beginning in 2022. 

We need congressional authorization of 18 leases submitted in 

VA’s 2015 and 2016 budget request as well as authorization of 

eight major construction projects included in the fiscal year 2016 

budget. 

We need your support for six additional replacement major medical facility leases, two major construction projects, and four cemetery projects in the 2017 budget. Passing special legislation for 

VA’s West Los Angeles campus will get us positive results for veterans in that community who are most in need. 

I have outlined a few opportunities for change here. This Congress, with today’s VA’s leadership, can make these changes and 

more for all veterans and for veterans in the future. Then we can 

look back on this year as the year that we turned the corner. 

7 

I appreciate the support you have shown veterans, the Department, and the MyVA transformation. On behalf of veterans and the 

VA employees serving them every single day, thank you for this opportunity. We look forward to your questions. 

Thank you, Mr. Chairman. 

[The prepared statement of Secretary McDonald follows:] 

PREPARED STATEMENT OF HON. ROBERT A. MCDONALD, SECRETARY, U.S. DEPARTMENT OF VETERANS AFFAIRS

Good morning, Chairman Isakson, Ranking Member Blumenthal, and Distinguished Members of the Senate Veterans’ Affairs Committee. Thank you for the opportunity to present the President’s 2017 Budget and 2018 Advance Appropriations 

(AA) requests for the Department of Veterans Affairs (VA). This budget continues 

the President’s faithful support of Veterans and their families and survivors, and 

it sustains VA’s historic transformation. It will provide the funding needed to enhance services to Veterans in the short term, while strengthening the transformation of VA that will better serve Veterans in the future. 

A VISION FOR THE FUTURE

VA’s vision for the future is to be the No. 1 customer-service agency in the Federal Government. The American Customer Satisfaction Index already rates our National Cemetery Administration No. 1 with respect to customer service. In addition, 

for the sixth year in a row, VA’s Consolidated Mail Outpatient Pharmacy received 

J.D. Power’s highest customer satisfaction score among the Nation’s public and private mail-order pharmacies. These are compelling examples of excellence. We aim 

to make that so for all of VA. 

We are transforming the entire Department, not just making incremental changes 

to parts of it. We began in July 2014 by immediately reinforcing the importance of 

our inspiring mission—caring for those ‘‘who shall have borne the battle,’’ their families, and their survivors. Then, we re-emphasized our commitment to our exceptional I-CARE Values—Integrity, Commitment, Advocacy, Respect, and Excellence. 

To provide timely quality care and benefits for Veterans, everything we are doing 

is built, and must be built, on the rock-solid foundation of mission and values. 

MyVA is the catalyst making VA a world-class service provider. It is a framework 

for modernizing VA’s culture, processes, and capabilities so we put the needs, expectations, and interests of Veterans and their families first, and put Veterans in control of how, when, and where they wish to be served. 

Listening to others’ perspectives and insights has been, and remains, instrumental in shaping our transformation. We have taken advantage of an unprecedented level of outreach to the field and our stakeholders. 

In my first months as Secretary, I assessed VA and recognized that we would 

need to change fundamental aspects of every part of VA in order to rise to excellence. I shared my assessment’s results with President Obama and received his 

guidance. I discussed my findings with you and other Members of Congress—privately and during hearings. And I consulted with literally thousands of Veterans, 

VA clinicians, VA employees, and Veteran Service Organizations (VSOs) and other 

stakeholders in dozens of meetings. 

Since my July 29, 2014, confirmation, I have made 277 visits to VA field sites in 

more than 100 cities, including 47 visits to VA medical centers, 30 visits to homeless 

Veterans program sites, 16 visits to Community Based Outpatient Clinics, 15 Regional Offices, and 9 Cemeteries. I have attended 61 Veteran engagements through 

public and private partnerships and 60 stakeholder events to hear firsthand the 

problems and concerns impacting our Veterans. To recruit individuals to work for 

VA as medical professionals and in other critical fields, I have visited 50 medical 

schools, universities, and other educational institutions. This kind of outreach, partnership, and collaboration underpins our department-wide transformation to change 

VA’s culture and make the Veteran the center of everything we do. 

Progress 

Transforming an organization of this size is an enormous undertaking. It will not 

happen overnight. But we are now running the government’s second largest Department like a $166 billion Fortune 6 organization should be run. That is, balancing 

near term performance improvements while rebuilding VA’s long-term organizational health. 

Effective change often requires new leadership, and we have made broad changes. 

Of our top 16 executives, 10 are new to their positions since I became Secretary. 

8 

Our team today includes extensive executive expertise from the private sector: a 

former banking industry Chief Financial Officer and President of the USO; the 

former Chief Executive Officer of Beth Israel Medical Center in New York City and 

Morristown Medical Center in New Jersey; a former Chief Executive of Jollibee 

Foods and President of McDonald’s Europe; a former Chief Information Officer of 

Johnson & Johnson and Dell Inc.; a former partner in McKinsey & Company’s 

Transformational Change and Operations Transformation Practices; a retired partner in Accenture’s Federal Services Practice; a former Chief Customer Officer for 

the city of Philadelphia who previously spent 10 years at United Services Association of America (USAA), one of the best and foremost customer-service organizations 

in the country; a former entrepreneur and CEO of multiple technology companies; 

and a retired Disney executive who spent 2010–2011 at Walter Reed National Military Medical Center enhancing the patient experience. 

Most members of the executive leadership team are Veterans themselves. They 

have served from Vietnam to Iraq and Afghanistan, and each is here because he 

or she demonstrates a personal commitment to our mission. These fresh, diverse 

perspectives, combined with our more experienced government and health care executives, will continue to catalyze innovation and change. 

Thanks to the continuing support of Congress, VSOs, union leaders, our dedicated 

employees, states, and private industry partners, we have made tremendous headway over the past 18 months. In 2015, we made notable progress building the momentum that will begin delivering transformational changes that VA needs. 

Congress has passed key legislation—such as the Veterans Access, Choice, and 

Accountability Act and the Clay Hunt Suicide Prevention for American Veterans 

Act—that gives VA more flexibility to improve our culture and ability to execute effectively. 

Consistent with the culture of a High Performance Organization that serves Veterans and their families, we have turned VA’s structural pyramid upside down. Veterans and their families are at the top. The Office of the Secretary is at the bottom, 

supporting subordinate leaders and the workforce who are serving Veterans. This 

method of thinking and operating is a reminder to all employees and stakeholders 

that we are here to support our Veterans, not our bosses. 

While reinforcing our I-CARE Values, we are transitioning from a rules-based culture that may neglect the human dimension of service to a principles-based culture 

grounded in values, sound judgment, and the courage and opportunity ‘‘to choose 

the harder right instead of the easier wrong . . ..’’ 

We formed a MyVA Advisory Committee (MVAC) to advise us on our transformation. The MVAC is comprised of a diverse group of business leaders, medical 

professionals, experienced government executives, and Veteran advocates. The 

Chairman is retired Major General Joe Robles, former Chairman and CEO of USAA. 

The Vice Chairman is Dr. J. Michael Haynie, Air Force Veteran, Vice Chancellor 

of Syracuse University and founder of the Institute for Veteran and Military Families (IVMF). The MVAC includes executives with deep customer service and transformation expertise from organizations such as Amazon, The Cleveland Clinic, 

McKinsey & Company, Johns Hopkins, Mayo Clinic, as well as a former Surgeon 

General, a former White House doctor for three US Presidents, a university president who was a Rhodes Scholar from the Air Force Academy who currently serves 


223psVA1.eps
9 

as a reserve Air Force Lieutenant Colonel, and advocates for both the traditional 

VSOs and post-9/11 Veterans’ organizations. 

Private sector leadership experts are bringing cutting-edge business skills and developing VA teams in new ways. We are training critical pockets of our workforce 

on advanced techniques like Lean and Human Centered Design. For example, working with the University of Michigan, we have already trained more than 5,000 senior leaders across the Nation in our ‘‘Leaders Developing Leaders.’’ The Veterans 

Benefits Administration (VBA), Veterans Health Administration (VHA), and our 

Veterans Experience team collaborated using Human Centered Design and Lean 

techniques to redesign the Compensation and Pension Examination (C&P Exam) 

process because we received consistent feedback that the process—often, a Veteran’s 

first impression of the VA when separating from service—can be a confusing and 

uncomfortable experience. 

Across VA, we are encouraging different perspectives and listening to all of our 

key stakeholders, even those who are critical of VA. To benchmark and capture 

ideas and best practices along our transformation journey, we have been working 

collaboratively with world-class institutions like Procter & Gamble, USAA, Cleveland Clinic, Wegmans, Starbucks, Disney, Marriott and Ritz-Carlton, NASA, Kaiser 

Permanente, Hospital Corporation of America, Virginia Mason, DOD, and GSA, 

among others. 

VA named the Department’s first Chief Veteran Experience Officer and began 

staffing the office that will work with the field to establish customer service standards, spread best practices, and train our employees on advanced business skills. 

Rather than asking Veterans to navigate our complicated internal structure, we 

are redesigning functions and processes to fit Veteran needs in the spirit of General 

Omar Bradley’s 1947 proposition that ‘‘We are dealing with Veterans, not procedures; with their problems, not ours.’’ 

We are realigning VA to facilitate internal coordination and collaboration among 

business lines—from nine disjointed, disparate organizational boundaries and organizational structures to a single framework. That means down-sizing from 21 service networks to 18 that are aligned in five districts and defined by state boundaries, 

except in California. This realignment means opportunities for local level integration, and it promotes consistently effective customer service. Veterans from Florida 

to California, Puerto Rico to Maine, Alaska and Guam, and all parts in between, 

will see one VA. 

We have developed a multi-year plan for creating a world-class Information Technology organization, and on November 11, Veterans Day, we launched the Vets.gov 

initial capability. Developed with support from the U.S. Digital Services Team and 

informed by extensive feedback from Veterans, Vets.gov is a modern, mobile-first, 

cloud-based website that will replace numerous other websites and website logins 

with a single, easy to navigate location. The website puts Veteran needs and wishes 

first, and we will continue to add the capability that’s required to improve its accessibility and usefulness. As Vets.gov evolves, it will simplify the Veteran experience 

by re-using and making consistent Veteran information, including mailing address 

and phone number, across the agency. 

At VA, we know that serving Veterans is a collaborative exercise, so we will not 

function in a vacuum. We are operating as part of a community of care, forming 


223psVA2.eps
10 

strategic partnerships with external organizations to leverage the goodwill, resources, and expertise of valuable partners to better serve our Nation’s Veterans 

and help address a wide variety of Veteran needs, including employment, homelessness, wellness, and mental health. Partners include respected organizations like the 

YMCA, the Elks, the PenFed Foundation, LinkedIn, Coursera, Google, Walgreens, 

academic institutions, other Federal agencies, and many more. These partnerships 

reflect our commitment to re-thinking how VA does business so we can leverage the 

strengths of others who also care for Veterans. 

We have enabled 39 Community Veterans Engagement Boards, a national network designed to leverage all community assets, not just VA assets, to meet local 

Veteran needs. Sixteen more communities are in development right now. 

We have renewed and redefined working relationships with our union partners, 

and union leaders are part of the team, and have had significant input into MyVA. 

We continue to work with them to address issues and make sure our employees are 

involved often and early in every major decision. 

We are continuing to develop a robust provider network while we streamline business processe s and re-imagine how we obtain services such as billing, reimbursement credentialing, and information sharing. 

We continue to listen, learn, and grow. 

VA’S AGENCY PRIORITY GOALS

In 2015, we were guided by and made notable progress toward reaching our three 

Agency Priority Goals (APGs)—(1) Improve Veteran Access to VA Benefits and Services, (2) End Veteran Homelessness, and (3) Eliminate the Disability Backlog. These 

accomplishments toward achieving our APGs demonstrate VA’s commitment to 

using our resources effectively to improve care and benefits for Veterans. 

Access 

We expanded capacity by focusing on staffing, space, productivity, and VA Community Care. 

Access. Since discovering the access challenges in Phoenix, Arizona, we have aggressively improved access to care, not just in Phoenix but across VA as a whole. 

For instance, in the first 12 months after discovering the Phoenix appointment 

backup, from June 2014 to June 2015, we completed 7 million more appointments 

than during the same period the year prior: 2.5 million of those appointments were 

at VA; 4.5 million appointments were in the community. Altogether in FY 2015, we 

completed 56.7 million appointments, nearly 2 million more than FY 2014. More 

than 97 percent (55 million) of those 56.7 million appointments were completed 

within 30 days of the clinically indicated or Veteran’s preferred date, an increase 

of 1.4 million over FY 2014 numbers. 

Veteran access is one of the five critical priorities supporting VA health care 

transformation with far-reaching impact across VA that Under Secretary for Health, 

Dr. David J. Shulkin announced in September 2015. With the Access Stand Downs, 

VHA is empowering each facility to focus on the needs of its specific population and 

refocusing people, tools, and systems on a journey of continuous improvement toward same-day access for primary care and urgent specialty care. The immediate 

goal is that no patients with urgent appointment requests in VA clinics with the 


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most critical clinical needs, such as cardiology, urology, and mental health, are waiting more than 30 days. 

From November 9, through November 13, 2015, VHA conducted a complete review 

of all Veterans waiting for appointments—with a focus on those Veterans waiting 

for clinically important and acute services—to ensure that the wait was clinically 

appropriate as determined by the Veteran’s treatment team. This process culminated with the VHA’s first Access Stand Down on November 14th—a nationwide 

effort to ensure Veterans get the right care at the right time. 

In the first Access Stand Down, VHA reviewed nearly 55,800 of the more than 

56,000 Level One, stat, consults that were open more than 30 days (as of November 6, 2015), a herculean effort. Of those 55,800 urgent open consults reviewed, 82 

percent (45,849) were scheduled or closed by the end of that first Stand Down. 

Building on the November 14th Access Stand Down momentum and success, VHA 

is continuing to maximize accessibility to outpatient services with the coming February 27th, 2016 Access Stand Down. The February Stand Down is an opportunity 

to make another significant leap in dramatically enhancing Veterans’ access to care. 

Clinical operations will meet customer demand through resource-neutral, continuous 

improvement at the facility-level and scaling-up excellence across the enterprise. 

VetLink data is another way we are listening to Veterans. Since September 2015, 

VHA has analyzed preliminary data from VetLink, our kiosk-based software that allows us to collect real-time customer satisfaction information. In all three separate 

VetLink surveys to date—related to nearly half-a-million appointments—Veterans 

told us that about 90 percent of the time, they are either ‘‘completely satisfied’’ or 

‘‘satisfied’’ with getting the appointment when they wanted it. However, about 3 

percent of Veterans who participated in the survey were either ‘‘dissatisfied’’ or 

‘‘completely dissatisfied,’’ so we have more work to do. 

Staffing. We increased net VHA staffing. VHA hired 41,113 employees, for a net 

increase of 13,940 health care staff, a 4.7 percent increase overall. That increase included 1,337 physicians and 3,612 nurses, and we filled several critical leadership 

positions, including the Under Secretary of Health. 

Space. We activated 2.2 million square feet in FY 2015, adding to more than 1.7 

million square feet of clinical space activated in FY 2014. 

Productivity. We increased physician work Relative Value Units (RVUs) by 9 percent. VA completed more than 1.4 million extended hour completed encounters in 

primary care, mental health and specialty care in FY 2014 and more than 1.5 million in FY 2015, an increase of 5.7 percent in extended hour encounters. 

Care in the Community 

In 2015, VA obligated $10.5 billion for Care in the Community, including resources provided through the Veterans Choice Act—an increase of $2.3 billion (28 

percent) over the 2014 level—which resulted in nearly 2.4 million authorizations for 

Veterans to receive Care in the Community from December 3, 2014 through December 2, 2015. Programmatically, this included care in the community for Veterans’ dialysis, state home programs, community nursing care, Veterans home programs, 

emergency care, private medical facilities care, and care delivered at Indian health 

clinics. It also includes care under VA’s CHAMPVA program for certain dependents 

who were entitled for that care. 

Homelessness 

Veteran homelessness has continued to decline, thanks in large part to unprecedented partnerships and vital networks of collaborative relationships across the 

Federal Government, across state and local government, and with both non-profit 

and for-profit organizations. Ending and preventing Veteran homelessness is now 

becoming a reality in many communities, including: the Commonwealth of Virginia; 

the State of Connecticut; New Orleans, Louisiana, Houston, Texas; Las Vegas, Nevada; Philadelphia, Pennsylvania; Syracuse, New York; Winston-Salem, North Carolina; and Las Cruces, New Mexico. In collaboration with our Federal and local partners, we have greatly increased access to permanent housing; a full range of health 

care including primary care, specialty care, and mental health care; employment; 

and benefits for homeless and at-risk for homeless Veterans and their families. 

In FY 2015 alone, VA provided services to more than 365,000 homeless or at-risk 

Veterans in VHA’s homeless programs. Nearly 65,000 Veterans obtained permanent 

housing through VHA Homeless Programs interventions, and more than 36,000 Veterans and their family members, including 6,555 children, were prevented from becoming homeless. 

Overall Veteran homelessness dropped by 36 percent between 2010 and 2015, 

based on data collected during the annual Point-in-Time (PIT) Count conducted on 

a single night in January 2015. We saw a nearly 50 percent drop in unsheltered 

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Veteran homelessness. Since 2010, more than 360,000 Veterans and their family 

members have been permanently housed, rapidly rehoused, or prevented from falling into homelessness. 

Backlog 

VA transitioned disability compensation claims processing from a paper-intensive 

process to a fully electronic processing system; as a result, 5,000 tons of paper per 

year were eliminated. 

In FY 2015, VA decided a record-breaking 1.4 million disability compensation and 

pension (rating) claims for Veterans and their survivors—the highest in VA history 

for a single year. As of December 31, 2015, VA had driven down the disability claims 

backlog to 75,480, from a peak of over 611,000 in March 2013. 

2016–2017 VA’s Agency Priority Goals 

In a collaborative, analytic process, VA has established our four new Agency Priority Goals (APGs). In FYs 2016 and 2017, our four APGs buildupon and preserve 

progress we made in 2015. The new APGs will help accelerate transformation to 

MyVA and advance our framework for allocating resources to improve Veteran outcomes. Our new APGs are to (1) Improve Veterans Experience with VA, (2) Improve 

VA Employee Experience, (3) Improve Access to Health Care as Experienced by the 

Veteran, and (4) Improve Dependency Claims Processing. While no longer APGs, VA 

will continue to buildupon the progress it has already made related to ending Veterans’ Homelessness and eliminating the compensation rating claims backlog. 

FY 2017 BUDGET REQUEST

Our 2017 budget requests the necessary resources to allow us to serve the growing number of Veterans who selflessly served our Nation. 

The 2017 Budget requests $182.3 billion for VA—$78.7 billion in discretionary 

funding (including medical care collections) and $103.6 billion in mandatory funding 

for Veterans benefit programs. The discretionary request reflects an increase of $3.6 

billion (4.9 percent) over the 2016 enacted level. The budget also requests 2018 advance appropriations (AAs) of $66.4 billion for Medical Care and $103.9 billion for 

three mandatory accounts that support Veterans benefit payments (i.e., Compensation and Pensions, Readjustment Benefits, and Insurance and Indemnities). 

We value the support that Congress has demonstrated in providing the resources 

needed to honor our Nation’s Veterans. We are seeking your support for legislative 

proposals contained in the 2017 Budget—including many already awaiting Congressional action—to enhance our ability to provide Veterans the benefits and services 

they have earned through their service. The Budget also proposes a new General 

Transfer Authority that would allow VA to move discretionary funds across line 

items. Flexible budget authority would give VA greater ability to avoid artificial restrictions that impede our delivery of care and benefits to Veterans. 

RISING DEMAND FOR VA CARE AND BENEFITS

Veterans are demanding more services from VA than ever before. As VA becomes 

more productive, the demand for benefits and services from Veterans of all eras conVerDate Mar 15 2010 19:02 May 01, 2017 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6621 Z:\ACTIVE\022316.TXT PAULIN

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tinues to increase, and Veterans’ demand for benefits has exceeded VA’s capacity 

to meet it. 

In 2014, when the Phoenix access difficulties came to light, VA had 300,000 appointments that could not be completed within 30 days of the date the Veteran 

needed or wanted to be seen. To meet that demand, VA rallied to add capacity to 

complete 300,000 more appointments each month, or about 3.5 million additional 

appointments annually. 

Despite these extraordinary measures to increase capacity, VA was unable to absorb Veterans’ increasing demand for health care. The number of Veterans waiting 

for appointments more than 30 days rose by about 50 percent, to roughly 450,000 

between 2014 and 2015, so we are aggressively working on innovative ways to address that challenge, and VHA’s new Access Stand Downs are central to VHA’s 

healthcare transformation efforts and addressing that challenge. 

The trend of a growing demand for VA health care is fueled by more than a decade of war, Agent Orange-related disability claims, an unlimited claim appeal process, demographic shifts, increased medical issues claimed, and other factors. Additionally, survival rates among Americans who served in conflicts have increased, 

and more sophisticated methods for identifying and treating Veteran medical issues 

continue to become available. And, VA now serves a population that is older, has 

more chronic conditions, and is less able to afford care in the private sector. Workload will continue to increase as the military downsizes and Veterans regain trust 

in VA. 

In 2017, the number of Veterans receiving medical care at VA will be over 6 million. VA expects to provide more than 115 million outpatient visits in 2017, an increase of 8.4 million visits over 2016, through both VA and Care in the Community. 

Compared to FY 2009, the number of patients is projected to increase by 22 percent by FY 2017. And, as Veterans see the results of VA’s transformation, we are 

confident that the number of Veterans utilizing VA services will continue to rise. 

Currently, 11 million of the 22 million Veterans in this country are registered, enrolled, or use at least one VA benefit or service. 

Veterans’ health care and benefit requirements continue to increase decades after 

conflicts’ end, and this fact is a fundamental, long-term challenge for VA. Forty 

years after the Vietnam War ended, the number of Vietnam Era Veterans receiving 

disability compensation has not yet peaked. VA anticipates a similar trend for Gulf 

War Era Veterans, only 26 percent of whom have been awarded disability compensation. 


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Today, there are an estimated 22 million Veterans. The number of Veterans is 

projected to decline to around 15 million by 2040. However, while the absolute number may decline, an aging Veteran population requires greater care, services, and 

benefits. In 2017, 46 percent (or 9.8 million) of the 22 million Veteran population 

will be 65 years old or older, a dramatic increase since 1975 when only 7.5 percent 

(or 2.2 million) of the Veteran population was 65 years old or older. 

While the percent of the Veteran population receiving compensation was nearly 

constant at 8.5 percent for more than 40 years, over the past 15 years there has 

been a striking increase to 20 percent. The total number of service-connected disabilities for Veterans receiving compensation grew from 11.8 million in 2009 to 19.7 

million in 2015, an increase of more than 67 percent in just six years. This dramatic 

growth, combined with estimates based on historic trends, predicts an even greater 

increase in claims for more benefits as Veterans age and disabilities become more 

acute. 

The increase in Veterans receiving compensation is accompanied by a significant 

increase in the average degree of disability granted to Veterans for disability compensation. For 45 years, from 1950 to 1995, the average degree of disability held 

steady at 30 percent. But, since 2000, the average degree of disability has risen to 

49 percent. VBA’s mandatory request for 2017 is $103.6 billion, twice the amount 

spent in FY 2009. 


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As VA continues to improve access and quality of care, more Veterans will come 

to VA for more of their care. Veterans today often choose VA for care either because 

of personal preference or because of VA’s economic edge. Some 78 percent of enrolled 

Veterans at VA have other choices like Medicare, Medicaid, TRICARE, or private 

insurance. Out-of-pocket cost for Veterans at VA is often lower, and cost considerations are a key factor in Veterans’ demand for VA health care. In 2014, Veteran 

enrollees received only 34 percent of their total health care through VA, accounting 

for about $53 billion in 2014 costs. Just a one percent increase in Veteran reliance 

on VA health care will increase costs by $1.4 billion. 

PRODUCTIVITY IMPROVEMENTS AND STEWARDSHIP

The MyVA transformation will ensure VA is a sound steward of the taxpayer dollar. We are instituting operational efficiencies, cost savings, productivity improvements, and service innovations to support this and future budget requests. We are 

assessing all aspects of VA operations using a business lens and pursuing changes 

so VA will deliver care and services more efficiently and effectively at the highest 

value to Veterans and taxpayers. For instance, few realize that when it comes to 

the general operating expense of distributing over a hundred-billion dollars in benefits to over 5.3 million Veterans and survivors, VBA spends only about 3 cents on 

the dollar. By any measure, that’s an excellent return on investment. Our Reports, 

Approvals, Meetings, Measurements, and Policies (RAMMPs) process identifies practices to streamline or, in some cases, eliminate entirely. To free capacity and empower employees to identify counter-productive or wasteful activities that management can eliminate, VA leaders at all levels of the organization are using RAMMP 

to address opportunities for improvement that employees have identified. 


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To boost efficiency and employee productivity, VA is quickly moving to paperless 

claims processing from its historically manual, paper-intensive process. Modernizing 

to an electronic claims processing system has helped VBA increase claim productivity per claims processor by 25 percent since 2011 and medical issue productivity 

by 82 percent per claims processor since 2009. This significant productivity increase 

helped mitigate the effects of the 131 percent increase in workload between 2009 

and 2015, when the number of medical issues rose from 2.7 million to 6.4 million. 

VA’s shift to electronic claims processing has meant converting paper files to 

eFolders. Between 2012 and 2015, the Veterans Claims Intake Program (VCIP) 

scanned nearly 6 million claims files into Veterans’ eFolders in the Veterans Benefits Management System (VBMS). VBA has removed more than 7,000 tons of 

claims-related papers formerly undermining efficiency, hampering productivity, and 

cluttering workspace. 

In FY 2015, VBA deployed its innovative Centralized Mail Initiative to 56 regional offices (ROs) and one pension management center (PMC). Centralized Mail 

reroutes inbound compensation and pension claims-related mail directly to Claims 

and Evidence Intake Centers at document conversion services vendor sites, an innovation that improves productivity and enabled digital analysis of more than four 

million mail packets. Through Centralized Mail, VBA can more efficiently manage 

the claims workload, and prioritize and distribute claims electronically across the 

entire RO network, maximizing resources and improving processing timeliness. 

To strengthen financial management and stewardship, in FY 2015 VA launched 

its multi-year effort to replace VA’s antiquated, 30-year-old core Financial Management System (FMS) with a 21st century system that will vastly improve VA financial management accuracy and transparency. The modernization effort requires robust enterprise-wide support across the Department. In FY 2015, VA committed to 

using a shared service solution and engaged the Department of Treasury’s Office of 

Financial Innovation and Transformation (FIT) to pursue a Federal Shared Service 

Provider that leverages existing, successful investments and infrastructure across 

the government and meets our financial management system needs while supporting VA’s mission of serving Veterans. VA also stood up a Program Management 

Office, initially staffed with 5 FTE from existing resources to lead and manage the 

effort, and identified an OIT Project Manager. VA has worked to compile lessonslearned from other agencies engaged in this effort and from VA’s previous attempts 

to modernize the FTE, to ensure the effort is successful. Tasks ahead include strateVerDate Mar 15 2010 19:02 May 01, 2017 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6621 Z:\ACTIVE\022316.TXT PAULIN

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gies, roadmaps, and project plans, business process re-engineering, and engaging in 

significant change management activities. 

Recent challenges managing non-VA care program finances have demonstrated 

the great risks and immense burden of the FMS legacy system. FMS failure would 

severely impede the Department’s ability to execute its budget, pay vendors and 

Veterans, and produce accurate financial statements. 

CLOSING UNSUSTAINABLE FACILITIES

It is well-past time to close VA’s old, substandard, and underutilized facilities. 

VA’s 2016 Budget testimony last year explained that VA cannot be a sound steward 

of taxpayer resources with the asset portfolio it carries, and each year of delay 

makes the situation more costly and untenable. No sound business would carry such 

a portfolio, and Veterans and taxpayers deserve better. 

VA currently has 370 buildings that are fully vacant or less than 50 percent occupied, which are excess to our needs. These vacant buildings account for over 5.2 million square feet of unneeded space. In addition, we have 770 buildings that are underutilized, accounting for more than 6.3 million square feet that are candidates to 

be consolidated to improve utilization and lower costs. This means we have to maintain over 1,100 buildings and 11.5 million square feet of space that is unneeded or 

underutilized—taking funding from needed Veteran services. We estimate that it 

costs VA $26 million annually to maintain and operate these vacant and underutilized buildings. For example, when attempting to demolish the vacant storage facility in Bedford, Massachusetts, VA encountered environmental issues that prevented 

the demolition, forcing VA to either pay costly remediation costs to demolish a building we no longer need or maintain facilities such as this across the system. 

Bedford, Massachusetts—Vacant Storage Building, built in 1939 


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As the Veteran population has migrated, VA’s capital infrastructure has not kept 

pace. We continue to operate medical facilities where the Veteran population is 

small or shrinking. Our smallest hospitals often do not have sufficient patient volume and complexity of care requirements to maintain the clinical skills and competencies of physicians and nurses. 

ENSURING VETERANS ACCESS TO CARE

The President’s 2017 Budget will allow VA to operate the largest integrated 

health care system in the country, including nearly 1,300 VA sites of health care 

and approximately 6 million Veterans receiving care; the eleventh largest life insurance provider, covering both active duty Servicemembers and enrolled Veterans; 

compensation and pension benefit programs serving more than 5.3 million Veterans 

and survivors; education benefits to more than one million students; vocational rehabilitation and employment benefits to more than 140,000 disabled Veterans; a 

home mortgage program that will guarantee more than 429,000 new home loans; 

and the largest national cemetery system that leads the industry as a high-performing organization, with projections to inter more than 132,000 Veterans and 

family members in 2017. The 2017 Budget requests $65 billion for medical care, an increase of $3.9 billion 

(6.3 percent) over the 2016 enacted level. The increase in 2017 is driven by Veterans’ demand for VA health care as a result of demographic factors, economic assumptions, investments in access, and high priority investments for caregivers, new 

Hepatitis C treatments, and support for Veterans Health Information Systems and 

Technology Architecture (VistA) Evolution. The 2017 request supports programs to 

end and prevent Veteran homelessness, invests in strategic initiatives to improve 

the quality and accessibility of VA health care programs, continues implementation 

of the Caregivers and Veterans Omnibus Health Services Act, and provides for activation requirements for new or replacement medical facilities. The 2017 appropriations request includes an additional $1.7 billion above the enacted 2017 AA for Veterans medical care. The request assumes approximately $3.6 billion annually in 

medical collections in 2017 and 2018. For the 2018 Advance Appropriations for medical care, the current request is $66.4 billion. 

Hepatitis C Treatment 

Although the Hepatitis C virus infection (HCV) takes years to progress, it is the 

main cause of advanced liver disease in the United States. Treatment of this disease 

remains a high priority because its cure dramatically lowers patients’ risk of liver 

failure, liver cancer, and death. 

VA is the largest single provider of care in the Nation for chronic HCV, and over 

the next five years, VA will strive to provide treatment to all Veterans with HCV 

who are treatment candidates. For FY 2017, VA is requesting $1.5 billion for the 

cost of Hepatitis C drugs and clinical resources. With a budget of $1.5 billion in FY 

2017, VA expects to treat 35,000 patients with HCV. At the beginning of FY 2016, 

almost 120,000 Veterans in VA care were awaiting HCV treatment, of whom approximately 30,000 have advanced liver disease. 

VA successfully negotiated extremely favorable pricing for both of the new treatments available—Harvoni and Viekira—from two different drug manufacturers by 

stressing VA’s proven ability to deliver market share, VA’s large HCV population, 

and the long-term impact that VA’s physician residency programs can have on postresidency prescribing practices. 

During FY 2015, VA medical facilities treated more than 30,000 Veterans for HCV 

with these new drugs with remarkable success, achieving cure rates of 90 percent, 

similar to those seen in clinical trials. 

VA clinicians have rapidly adopted new, more effective therapies for HCV as they 

have become available. New therapies are costly and require well-trained clinical 

providers and support staff, presenting resource challenges for the Department. VA 

will focus resources on the sickest patients and most complex cases and continue 

to build capacity for treatment through clinician training and use of telehealth platforms. Patients with less advanced disease are being offered treatment through the 

Veterans Choice program in partnership with community HCV providers. 

Care in the Community 

VA is committed to providing Veterans access to timely, high-quality health care. 

The 2017 Budget includes $12.2 billion for Care in the Community and includes a 

new Medical Community Care budget account, consistent with the VA Budget and 

Choice Improvement Act (P.L. 114–41). Of the total that will be spent on non-VA 

care in FY 2017, $7.5 billion will be provided through a transfer of the 2017 enacted 

AA from the Medical Services account to the new budget account, and $4.7 billion 

19 

will be provided through the resources provided in the Veterans Choice Act for implementation of the Veterans Choice Program. 

The Choice Act increased VA’s in-house capacity by funding medical personnel 

growth in VA facilities and expanded eligibility for Care in the Community to ensure access to care within 30 days and to provide care closer to home for enrollees 

residing more than 40 miles from a VA facility (the 40-mile group). 

This additional capacity facilitated an increase in enrollees’ reliance on VA health 

care by more than half a percent over the level expected in FY 2015. This growth 

was the result of enrollees increasing their use of VA funded health care versus 

their use of other health care options (Medicare, Medicaid, commercial insurance, 

etc.). 

The FY 2015 growth in enrollee reliance was largely in Care in the Community, 

with the 40-mile group generating a more significant increase in care: 

• In FY 2015, enrollees’ reliance on VA health care increased by 0.7 percent overall. Reliance for the 40-mile group increased by 2.8 percent from 32.5 percent to 35.3 

percent. 

• The increase in reliance was mostly driven by growth in Care in the Community. Cost sharing levels in VA are lower than what is typically available elsewhere, 

which provides an incentive for enrollees to use VA-paid Care in the Community. 

Enrollee reliance on VA health care is expected to continue to increase in 2016 

and beyond to service the unmet demand that the Choice Act was enacted to address. 

On October 30, 2015, VA provided Congress with a plan for the consolidation and 

improvement of all purchased care programs into one New Veterans Choice Program 

(New VCP). Consistent with this report, the 2017 Budget will include legislative 

proposals to streamline and improve VA’s delivery of Community Care. 

Caregiver Support Program 

Caregivers give their time and love in countless behind-the-scenes ways. Whether 

they are helping with transportation to and from appointments, helping the Veteran 

apply for benefits, or helping with meals, bathing, clothing, medication, the spectrum of care is wide and compassion runs deep. 

The 2017 Budget requests $725 million for the National Caregivers Support Program to support nearly 36,600 caregivers, up from about 30,600 in FY 2016. Funding requirements for caregivers are driven by an increase in the eligible Veteran 

population, with caregiver enrollment increasing by an average of about 500 each 

month. 

ENDING VETERAN HOMELESSNESS

The ambitious goal of ending Veteran homelessness has galvanized the Federal 

Government and local communities to work together to solve this important National problem. Our systems are designed to help prevent homelessness whenever 

possible, and our goal is a systematic end to homelessness, meaning that there are 

no Veterans sleeping on our streets and every Veteran has access to permanent 

housing. Should Veterans become homeless or be at-risk of becoming homeless, 

there will be capacity to quickly connect them to the help they need to achieve housing stability. 

The 2017 Budget supports VA’s commitment to ending Veteran homelessness by 

emphasizing rescue for those who are homeless today and prevention for those at 

risk of homelessness. The 2017 Budget requests $1.6 billion for VA homeless-related 

programs, including case management support for the Department of Housing and 

Urban Development (HUD)-VA Supportive Housing program (HUD-VASH), the 

Grant and Per Diem Program, VA justice programs, and the Supportive Services for 

Veteran Families program. 

In FY 2015 and FY 2016, VA committed more than $1.5 billion annually to 

strengthen programs that prevent and end homelessness among Veterans. Communities that have reached the goal or are close to effectively ending homelessness rely 

heavily on VA targeted homeless resources. Communities that have a sustainment 

plan are depending on those resources to be available as they continue to tackle 

homelessness and sustain the support for Veterans who have moved into permanent 

housing, ensuring that they maintain housing stability and do not fall back into 

homelessness. 

VA will continue to advocate for its continuum of homeless services to address the 

needs associated with preventing first-time homelessness, as well as the needs of 

those who return to homelessness, and focus on the root causes associated with 

homelessness, including poverty, addiction, mental health, and disability. 

20 

Congress has an important role, as well, in ensuring adequate resources to meet 

the needs of those most vulnerable Veterans by enacting authorizations and other 

legislation to provide VA with a full complement of tools to combat homelessness— 

including legislation that is a prerequisite to carry out dramatic improvements to 

our West Los Angeles campus centered on the needs of Veterans. 

BENEFITS PROGRAMS

The 2017 Budget requests $2.8 billion and 22,171 FTE for VBA General Operating Expenses, an increase of $93.4 million (3.4 percent) over the 2016 enacted 

level. The request includes an additional 300 full-time equivalent (FTE) employees 

for non-rating claims. 

With the resources requested in the 2017 Budget, VA will provide: 

• Disability compensation and pension benefits for 5.3 million Veterans and survivors, totaling $86 billion; 

• Vocational rehabilitation and employment benefits to nearly 141 thousand disabled Veterans, totaling $1.4 billion; 

• Education benefits totaling $14 billion to more than one million Veterans and 

family members; 

• Guaranty of more than 429,000 new home loans; and 

• Life insurance coverage to 1.0 million Veterans, 2.2 million Servicemembers, 

and 2.8 million family members. 

Improving the quality and timeliness of disability claim decisions has been integral to VBA’s transformation of benefits delivery. VBA successfully streamlined a 

complex and paper-bound compensation claims process and implemented people, 

process, and technology initiatives necessary to optimize productivity and efficiency. 

In alignment with the MyVA initiative, VBA is working to further improve its operations with a focus on the customer experience. We are implementing enhancements 

to enable integration across our programs and organizational components, both inside and outside of VBA. 

VBA has processed an unprecedented number of rating claims in recent fiscal 

years (nearly 1.4 million in 2015, and more than 1 million per year for the last 6 

years). However, its success has resulted in other unmet workload demands. As 

VBA continues to receive and complete more disability rating claims, the volume of 

non-rating claims, appeals, and fiduciary field examinations increases correspondingly. 

• Non-rating claims. VA completed nearly 37 percent more non-rating work in 

2015 than 2013—and 15 percent more than 2014. The 2017 Budget requests $29.1 

million for an additional 300 non-rating claims processors to reduce the non-rating 

claims inventory and provide Veterans with more timely decisions on non-rating 

claims. 

• Appeals. Over the last 20 years, appeal rates have continued to hold steady at 

between 11 and 12 percent of completed claims. As VBA continues to receive and 

complete record-breaking numbers of disability rating claims, the volume of appeals 

correspondingly increases. As of December 31, 2015, there were more than 440,000 

benefits-related appeals pending in the Department at various stages in the multistep appeals process, which divides responsibility between VBA and the Board of 

Veterans’ Appeals (Board)—355,803 of those benefits-related appeals are in VBA’s 

jurisdiction and 85,682 are within the Board’s jurisdiction. 

Under current law, VA appeals framework is complex, ineffective, and opaque, 

and veterans wait on average 5 years for final resolution of an appeal. The 2017 

Budget supports the development of a Simplified Appeals Process to provide veterans with a simple, fair, and streamlined appeals procedure in which they would 

receive a final appeals decision within 365 days from filing of an appeal by FY 2021. 

The 2017 Budget provides funding to support over 900 FTE for the Board and proposes a legislative change that will improve an outdated and inefficient process 

which will benefit all veterans through expediency and accuracy. We look forward 

to working with Congress, Veterans, and other stakeholders to implement improvements. 

• Fiduciary program. The fiduciary program served 29 percent more beneficiaries 

in 2015 than it served in 2014. Program growth is primarily due to an increase in 

the total number of individuals receiving VA benefits and an aging population of 

beneficiaries. Additionally, in 2015 the fiduciary program changed the way it captures beneficiary population data and now reports all beneficiaries served during the 

course of the fiscal year. In 2015, fiduciary personnel conducted more than 84,000 

field examinations, and VBA anticipates field examination requirements will exceed 

97,000 in 2017. 

21 

• Housing program. The 2017 Budget includes $34 million for the VA Loan Electronic Reporting Interface (VALERI) to manage the 2.4 million VA-guaranteed loans 

for Veterans and their families. VALERI connects VA with more than 320,000 Veteran borrowers and more than 225,000 mortgage servicer contacts. VA uses the 

VALERI tool to manage and monitor efforts taken by private-sector loan servicers 

and VA staff in providing timely and appropriate loss mitigation assistance to defaulted borrowers. Without these resources, approximately 90,000 Veterans and 

their families would be in jeopardy of losing their homes each year, potentially costing the government an additional $2.8 billion per year. VALERI also supports payment of guaranty and acquisition claims. 

The Budget requests the following advance appropriations amounts for 2018: 

$90.1 billion for compensation and pensions, $13.7 billion for readjustment benefits, 

and $107.9 million for insurance and indemnities. VA will continue to closely monitor workload and monthly expenditures in these programs and will revise cost estimates as necessary in the Mid-Session Review of the 2017 Budget, to ensure the 

enacted advance appropriation levels are sufficient to address anticipated veteran 

needs throughout the year. 

THE SIMPLIFIED APPEALS INITIATIVE

The current VA appeals process is broken. The more than 80-year-old process was 

conceived in a time when medical treatment was far less frequent than it is today, 

so it is encumbered by some antiquated laws that have evolved since WWI and 

steadily accumulated in layers. 

Under current law, the VA appeals framework is complex, ineffective, confusing, 

and understandably frustrating for Veterans who wait much too long for final resolution of their appeal. The current appeals system has no defined endpoint, and 

multiple steps are set in statute. The system requires continuous evidence gathering 

and multiple re-adjudications of the very same or similar matter. A Veteran, survivor, or other appellant can submit new evidence or make new arguments at any 

time, while VA’s duty to assist requires continuous development and re-adjudication. 

Simply put, the VA appeals process is unlike other standard appeals processes 

across Federal and judicial systems. 

Fundamental legislative reform is essential to ensure that Veterans receive timely 

and quality appeals decisions, and we must begin an open, honest dialog about what 

it will take for us to provide Veterans with the timely, fair, and streamlined appeals 

decisions they deserve. To put the needs, expectations, and interests of Veterans 

and beneficiaries first—a goal on which we can all agree—the appeals process must 

be modernized. 

The 2017 Budget proposes a Simplified Appeals Process—legislation and resources 

(i.e., people, process, and technology) that would provide Veterans with a simple, 

fair, and streamlined appeals process in which they would receive a final decision 

on their appeal within one year from filing the appeal by FY 2021. 

The 2017 Budget requests $156.1 million and 922 FTE for the Board, an increase 

of $46.2 million and 242 FTE above the FY 2016 enacted level. This is a down-payment on a long-term, sustainable plan to provide the best services to Veterans. This 


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policy option also represents the best value to taxpayers (as outlined in the chart, 

Analysis of Alternatives). 

Without legislative change or significant increases in staffing, VA will face a soaring appeals inventory, and Veterans will wait even longer for a decision on their 

appeal. If Congress fails to enact VA’s proposed legislation to simplify the appeals 

process, Congress would need to provide resources for VA to sustain more than double its appeals FTE, with approximately 5,100 appeals FTE onboard. The prospect 

of such a dramatic increase, while ignoring the need for structural reform, is not 

a good result for Veterans or taxpayers. 

Simplified Appeals Process: Ramp Up and Long-Term Sustainment 

While the Simplified Appeals proposal would require FTE increases for the first 

several years to resolve the more than 440,000 currently pending appeals, by 2022, 

VA would be able to reduce appeals FTE to a sustainment level of roughly 1,030 

FTE (including 980 FTE at the Board and 50 at VBA), a level sufficient to process 

all simplified appeals in one year. Notably, such a sustainment level is 1,135 FTE 

less than the current 2016 budget requires, and is 4,070 FTE less Department-wide 

than would be required to address this workload with FTE resources alone. In addition, this reform would essentially eliminate the need for appeals FTE at VBA, allowing these resources to be redirected within VBA to other priorities. 

In 2015, the Board was still adjudicating an appeal that originated 25 years ago, 

even though the appeal had previously been decided by VA more than 27 times. 

Under the Simplified Appeals Process, most Veterans would receive a final appeals 

decision within one year of filing an appeal. Additionally, rather than trying to navigate a multi-step process that is too complex and too difficult to understand, Veterans would be afforded a transparent, single-step appeal process with only one entity responsible for processing the appeal. 


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In today’s Convoluted Appeals Process, Veterans Wait 5 Years for a Decision 

Essentially, under a simplified appeals process, as soon as a Veteran files an appeal, the case would go straight to the Board where a Judge would review the same 

record considered by the initial decisionmaker and issue a final decision within one 

year; informing the Veteran whether that initial decision was substantially correct, 

contained an error that must be corrected, or was simply wrong. If a Veteran disagrees with any or all of the final appeals decision, the Veteran always has the option of filing a new claim for the same benefit once the appeal is resolved, or may 

pursue an appeal to the Court of Appeals for Veterans Claims. 

Rapid growth in the appeals workload exacerbates this challenge. As VBA has 

produced record-setting claims-decision output over the past five years, appeals volume has grown commensurately. Between December 2012 and November 2015, the 

number of pending appeals rose by 34 percent. Under current law with no radical 

change in resources, the number of pending appeals is projected to soar by 397 percent—from 437,000 to 2.17 million (chart, Status of Appeals)—between November 2015 and FY 2027. 

VA firmly believes that justice delayed is justice denied. In the streamlined appeals process proposed in the FY 2017 President’s Budget (chart, Proposed Simplified Appeals), there would be a limited exception allowing the Board to remand 

appeals to correct duty to notify and assist errors made on the part of the Agency 

of Original Jurisdiction (AOJ) prior to issuance of the initial AOJ decision. 


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MEDICAL AND PROSTHETIC RESEARCH

The 2017 Budget continues VA’s program of groundbreaking, high standard research focused on advancing the health care needs of all Veterans. The 2017 Budget 

requests $663 million for Medical Research and supports the President’s Precision 

Medicine Initiative (PMI) to drive personalized medical treatment and the evolving 

science of Genomic Medicine—how genes affect health. In addition to the direct appropriation, Medical Research will be supported through $1.3 billion from VA’s Medical Care program and other Federal and non-Federal research grants. Total funding for Medical and Prosthetic Research will be more than $2.0 billion in 2017. 

VA research is focused on the U.S. Veteran population and allows VA to uniquely 

address scientific questions to improve Veteran health care. Most VA researchers 

are also clinicians and health care providers who treat patients. Thus, VA research 

arises from the desire to heal rather than pure scientific curiosity and yields remarkable returns. 

The First Powered Ankle-Foot Prosthesis 

For more than 90 years, VA research has produced cutting-edge medical and prosthetic breakthroughs that improve the lives of Veterans and others. The list of accomplishments includes therapies for tuberculosis following World War II, the 

implantable cardiac pacemaker, computerized axial tomography (CAT) scans, functional electrical stimulation systems that allow patients to move paralyzed limbs, 

the nicotine patch, the first successful liver transplants, the first powered ankle-foot 

prosthesis, and a vaccine for shingles. VA researchers also found that one aspirin 

a day reduces by half the rate of death and nonfatal heart attacks in patients with 

unstable angina. More recently, VA investigators tested an insulin nasal spray that 

shows great promise in warding off Alzheimer’s disease and found that prazosin (a 

well-tested generic drug used to treat high blood pressure and prostate problems) 

can help improve sleep and lessen nightmares for those with Post Traumatic Stress 

Disorder. 

Beyond VA’s support of more than 2,200 continuing research projects, VA will leverage our Million Veteran Program (MVP)—already one of the world’s largest databases of genetic information—to support several Precision Medicine Initiatives. The 

first initiative will evaluate whether using a patient’s genetic makeup to inform 

medication selection is effective in reducing complications and getting patients the 


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25 

most effective medication for them. This initiative will focus on up to 21,500 Veterans with PTSD, depression, pain, and/or substance abuse. 

VA’s Million Veteran Program Recruitment 

The second initiative will focus on additional analysis of DNA specimens already 

collected in the MVP. More than 438,000 Veteran volunteers have contributed DNA 

samples so far. Genomic analysis on these DNA specimens allows researchers to extract critical genetic information from these specimens. There are several possible 

‘‘levels’’ of genomic analyses, with increasing cost. 

Built into the design of MVP and currently funded within the VA research program is a process known as ‘‘exome chip’’ genotyping—the tip of the iceberg in 

genomic analysis. Exome Chip genotyping provides useful information, but newer 

technologies promise significantly greater information for improving treatments. VA 

proposes conducting the next level of analysis, known as ‘‘exome sequencing,’’ on up 

to 100,000 Veterans who are enrolled in MVP. This exome sequencing analyzes the 

part of the genome that codes for proteins—the large, complex molecules that perform most critical functions in the body. Sequencing efforts will begin with a focus 

on Veterans with PTSD and frequently co-occurring conditions such as depression, 

pain, and substance abuse, and expand to other chronic illnesses such as diabetes 

and heart disease, among others. This more detailed genetic analysis will provide 

greater information on the biological factors that may cause or increase the risk for 

these illnesses. 

VA’s research and development program improves the lives of Veterans and all 

Americans through health care discovery and innovation. 

OTHER PRIORITIES

Information Technology 

The 2017 Budget demonstrates VA’s commitment to using cutting-edge information technology (IT) to support transformation and ensure that the Veteran is at the 

center of everything we do. The Budget requests $4.28 billion—an increase of $145 

million (3.5 percent) from the 2016 enacted level—to help stabilize and streamline 

core processes and platforms, eliminate the information security material weakness, 

and institutionalize new capabilities to deliver improved outcomes for Veterans. The 

request includes $471 million for new efforts to develop, improve, and enhance clinical and benefits systems and processes and supports VA’s strategy to replace FMS. 

The 2017 Budget was developed through Federal IT Acquisition Reform Act 


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(FITARA) compliant processes led by the Chief Information Officer (CIO), in concert 

with the Chief Financial Officer and Chief Acquisition Officer. 

In FY 2015, the Office of Information and Technology (OIT) developed an IT Enterprise Strategy and an Enterprise Cybersecurity Strategy. These strategies support OIT’s vision to become a world-class organization that provides a seamless, unified Veteran experience through the delivery of state-of-the-art technology. OIT is 

implementing a new IT Security Strategy to improve VA’s security posture and 

eliminate the Federal Information Security Management Act/Federal Information 

System Controls Audit Manual material weakness. The 2017 Budget includes $370.1 million for information security, an increase of 

105 percent over the FY 2016 funding level. In addition, the 2017 Budget includes 

$50 million to launch a new Data Management program to use data as a strategic 

resource. Under this program, VA will inventory its data collection activities—with 

the objective of requesting data from the Veteran only once—and dispose expired 

information in a secure and timely way. These two aspects will reduce VA costs for 

data storage and support safeguards for Veterans’ information. 

National Cemetery Administration 

The National Cemetery Administration (NCA) has the solemn duty to honor Veterans and their families with final resting places in national shrines and with lasting tributes that commemorate their service and sacrifice to our Nation. The 2017 

Budget requests $286 million, an increase of $15 million (5.5 percent) to allow VA 

to provide perpetual care for more than 3.5 million gravesites and more than 8,800 

developed acres. The Budget supports NCA’s efforts to raise and realign gravesites 

and repair turf in order to maintain cemeteries as national shrines. The Budget also 

continues implementation of a Geographic Information System to enable enhanced 

accounting of remains and gravesites and enhanced gravesite location for visitors. 

The Budget positions NCA to meet Veterans’ emerging burial and memorial needs 

in the decades to come by ensuring that Veterans and their families continue to 

have convenient access to a burial option in a National, state, or tribal Veterans 

cemetery and that the service they receive is dignified, respectful, and courteous. 

VA INFRASTRUCTURE

The 2017 Budget requests $900.2 million for VA’s Major and Minor construction 

programs. The Budget invests in infrastructure projects at existing campuses that 

will lead to seismically safe facilities, ensuring that Veterans are safe when they 

seek care. The capital asset budget request demonstrates VA’s commitment to address critical Major construction projects that directly affect patient safety and seismic issues, and reflects VA’s promise to provide safe and secure facilities for Veterans. The 2017 Budget also requests funding to ensure that VA has the ability to 

provide eligible Veterans with access to burial services through new and expanded 

cemeteries, and prevent the closure to new interments in existing cemeteries. 

VA acknowledges the transformation underway in the landscape for health care 

delivery. Our future space needs may be impacted by the changes we are already 

implementing in how we deliver care for Veterans. In addition, we plan to potentially incorporate any recommendations from the Commission on Care and their impact on our changing service delivery into our long-term infrastructure strategy. 

Leasing provides flexibility and enables VA to more quickly adapt to changes in 

medical technology, workload, new programs, and demographics. VA is also looking 

to Congress for authorization of 18 leases submitted in VA’s FY 2015 and 2016 

Budget requests. The pending major medical facility lease projects will replace, expand, or create new outpatient clinics and research facilities and are critical for providing access for Veterans and enhancing our research capabilities nationwide. The 

2017 Budget includes a request to authorize six additional replacement major medical facility leases under VA’s authority in 38 U.S.C. §§ 8103 and 8104 and with the 

anticipated delegation of leasing authority from the General Services Administration. The Department is awaiting authorization of its request to expand the definition of ‘‘Medical Facilities’’ in VA’s authorizing statutes to allow VA to more easily 

partner with other Federal agencies. Another proposal that deserves attention is authorization of enhanced use lease (EUL) authority to encompass broader possibilities 

for mixed-use projects. This change would give VA more opportunities to engage the 

private sector, local governments, and community partners by allowing VA to use 

underutilized property that would benefit Veterans and VA’s mission and operations. 

Major Construction 

The 2017 Budget requests $528.1 million for Major Construction. The request includes funds to address seismic problems in facilities in Long Beach, California, and 

27 

Reno, Nevada. These projects will correct critical safety and seismic deficiencies that 

pose a risk to Veterans, VA staff, and the public. Consistent with Public Law 114– 

58, the Department must identify a non-VA entity to execute these two projects, as 

they are more than $100 million. We have identified the U.S. Army Corps of Engineers as our construction agent to execute these projects. 

We must prevent the devastation and potential loss of life that may occur because 

our facilities are vulnerable to earthquakes—such as the one that occurred in 1971 

in San Fernando, California. As shown, a 6.5-magnitude earthquake caused two 

buildings in the San Fernando Medical Center to collapse and 46 patients and staff 

to lose their lives. 

San Fernando Medical Center collapse, 1971 

These images show a known seismic deficiency at the San Francisco Medical Center—built in 1933—wherein the rebar does not extend into the ‘‘pile cap.’’ 


223psVA1971.eps
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San Fernando Medical Center collapse, 1971 

The request also includes funding for new national cemeteries in western New 

York and southern Colorado, and national cemetery expansions in Jacksonville, 

Florida and South Florida. These cemetery projects support NCA’s goal to ensure 

that eligible Veterans have access to a burial option within a reasonable distance 

from their residences. 

• The new western New York national cemetery will establish a dignified burial 

option for more than 96,000 Veterans plus eligible family members in the western 

New York region. 

• The new southern Colorado national cemetery will establish a dignified burial 

option for more than 95,000 Veterans plus eligible family members in the southern 

Colorado region. 

• The Jacksonville National Cemetery expansion will develop approximately 30 

acres of undeveloped land to provide approximately 20,200 gravesites. 

• The South Florida National Cemetery expansion will develop approximately 25 

acres of undeveloped land to provide approximately 21,750 gravesites. 

Minor Construction 

In 2017, the Budget requests $372 million for Minor Construction. The requested 

amount would provide funding for ongoing projects that renovate, expand and improve VA facilities, while increasing access for our Veterans. Examples of projects 

include enhancing women’s health programs; providing additional domiciliaries to 

further address Veterans’ homelessness; improving safety; mitigating seismic deficiencies; transforming facilities to be more Veteran-centric; enhancing patient privacy; and enhancing research capabilities. 

The Minor Construction request will also provide funding for gravesite expansion 

and columbaria projects to keep existing national cemeteries open, and will support 

NCA’s urban and rural initiatives. It will also provide funding for projects at VBA 

regional offices nationwide and will fund infrastructure repairs and enhancements 

to improve operations for the Department’s staff offices. 


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Leasing 

The 2017 Budget includes a request to authorize six replacement major medical 

facility leases located in Corpus Christi, Texas; Jacksonville, Florida; Pontiac, Michigan; Rochester, New York; Tampa, Florida; and Terre Haute, Indiana. These leases 

will allow VA to provide continued access to Veterans that are served in these locations. 

MyVA TRANSFORMATION

MyVA puts Veterans in control of how, when, and where they wish to be served. 

It is a catalyst to make VA a world-class service provider—a framework for modernizing VA’s culture, processes, and capabilities to put the needs, expectations, and interests of Veterans and their families first. A Veteran walking into any VA facility 

should have a consistent, high-quality experience. 

MyVA will buildupon existing strengths to promote an environment where VA 

employees see themselves as members of one enterprise, fortified by our diverse 

backgrounds, skills, and abilities. Moreover, every VA employee—doctor, rater, 

claims processor, custodian, or support staffer, or the Secretary of Veterans Affairs—will understand how they fit into the bigger picture of providing Veteran benefits and services. VA, of course, must also be a good steward of public resources. 

Citizens and taxpayers should expect to see efficiency in how we run our internal 

operations. 

The FY 2017 budget will make investments toward the five critical MyVA objectives: 

1. Improving the Veteran experience: At a bare minimum, every contact between 

Veterans and VA should be predictable, consistent, and easy; however, we are aiming to make each touchpoint exceptional. It begins with receptionists who are pleasant to our Veteran clients, but there is also a science to this experience. We are focusing on human-centered design, process mapping, and working with leading design firms to learn and use the technology associated with improving every interaction with clients. 

2. Improving the employee experience—so we can better serve Veterans: VA employees are the face of VA. They provide care, information, and access to earned benefits. They serve with distinction daily. We cannot make things better for Veterans 

without improving the work experience of our dedicated employees. We must train 

them. We must move from a rules/fear-based culture to a principles/values-based 

culture. I learned in the private sector that it is absolutely not a coincidence that 

the very best customer-service organizations are almost always among the best 

places to work. 

3. Improving internal support services: We will let employees and leaders focus on 

assisting Veterans, rather than worrying about ‘‘back office’’ issues. We must bring 

our IT infrastructure into the 21st century. Our scheduling system, where many of 

our issues with access to care were manifest, dates to 1985. Our Financial Management System is written in COBOL, a language I used in 1973. This is simply unacceptable. It impedes all of our efforts to best serve Veterans. 


223psVA15.eps
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4. Establishing a culture of continuous improvement: We will apply Lean strategies and other performance improvement capabilities to help employees examine 

their processes in new ways and build a culture of continuous improvement. 

5. Enhancing strategic partnerships: Expanding our partnerships will allow us to 

extend the reach of services available for Veterans and their families. We must work 

effectively with those who bring capabilities and resources to help Veterans. 

Breakthrough Priorities for CY 2016 

While we have made progress, we are still on the first leg of a multi-year journey. 

We have narrowed down our near-term focus to 12 ‘‘breakthrough priorities.’’ 

Many of these reflect issues which are not new—they have been known problems, 

in some cases, for years. We have already seen some progress in solving many of 

them. However, we still have much work to do. 

The following are our 12 priorities and the 2016 outcomes to which we aspire. We 

understand that it will be a challenge to accomplish all of these goals this year, but 

we have committed ourselves to producing results for Veterans and creating irreversible momentum to continue the transformation in future years. 

VETERAN FACING GOALS: 

1. Improve the Veteran Experience. 

• Breakthrough Outcome for 2016: 

– Strengthen the trust in VA to fulfill our country’s commitment to Veterans; 

currently measured at 47 percent, we want it to be 70 percent by year end. 

– Establish a Department-wide customer experience measurement framework 

to enable data-driven service improvements. 

– Make the Veterans Experience office fully operational. 

– Expand the network of Community Veteran Engagement Boards to more 

than 100. 

– Additionally, in order to deliver experiences to Veterans that are effective, 

easy, and in which Veterans feel valued, medical centers will ensure that they 

are fully staffed at the frontline with well-prepared employees who have been 

selected for their customer service. Functionally, this means new frontline staff 

will be assessed through a common set of customer service criteria, hired within 

30 days of selection, and provided a nationally standardized onboarding and 

training program. 

2. Increase Access to Health Care. 

• Breakthrough Outcome for 2016: 

– When Veterans call or visit primary care facilities at a VA Medical Center, 

their clinical needs will be addressed the same day. 

– When Veterans call for a new mental health appointment, they receive a suicide risk assessment and immediate care if needed. Veterans already engaged 

in mental health care identifying a need for urgent attention will speak with 

a provider the same day. 


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– Utilizing existing VistA technology, Veterans will be able to conveniently get 

medically necessary care, referrals, and information from any VA Medical Center, in addition to the facility where they typically receive their care. 

3. Improve Community Care. 

• Breakthrough Outcome for 2016: Improve the Veterans’ experience with Care 

in the Community. Following enactment of our requested legislation, by the end of 

the year: 

– VA will begin to consolidate and streamline its non-Department Provider Network and improve relationships with community providers and core partners. 

– Veterans will be able to see a community provider within 30 days of their 

referral. 

– Non-Department claims will be processed and paid within 30 days, 85 percent 

of the time. 

– Health care claims backlog will be reduced to less than 10 percent of total 

inventory. 

– Referral and authorization time will be reduced. 

4. Deliver a Unified Veteran Experience. 

• Breakthrough Outcome for 2016: 

– Vets.gov will be able to provide Veterans, their families, and caregivers with 

a single, easy-to use, and high-performing digital platform to access the VA benefits and services they have earned. 

– Vets.gov will be data-driven and designed such that the top 100 search terms 

will be available within one click from search results. The top 100 search terms 

will all be addressed within one click on the site. 

– All current content, features and forms from the current public-facing VA 

websites will be redesigned, rewritten in plain language, and migrated to 

Vets.gov, in priority order based on Veteran demand. 

– Additionally, we will have one authoritative source of customer data; eliminating the disparate streams of Administration-specific data that require Veterans to replicate inputs. 

5. Modernize our Contact Centers (Including Veterans Crisis Line). 

• Breakthrough Outcome for 2016: 

– Veterans will have a single toll free phone number to access the VA Contact 

Centers, know where to call to get their questions answered, receive prompt 

service and accurate answers, and be treated with kindness and respect. VA 

will do this by establishing the initial conditions necessary for an integrated 

system of customer contact centers. 

– By the end of this year, every Veteran in crisis will have his or her call 

promptly answered by an experienced responder at the Veterans Crisis Line. 

6. Improve the Compensation & Pension (C&P) Exam Process. 

• Breakthrough Outcome for 2016: 

– Improved Veteran satisfaction with the C&P Exam process. We have a baseline satisfaction metric in place and have established a goal for significant improvement. 

– VA will have a national rollout of initiatives to ensure the experience is 

standardized across the Nation. 

7. Develop a Simplified Appeal Process. 

• Breakthrough Outcome for 2016: 

– Subject to successful legislative action, put in place a simplified appeals process, enabling the Department to resolve 90 percent of appeals within one year 

of filing by 2021. 

– Increase current appeals production to more rapidly reduce the existing appeals inventory. 

8. Continue Progress in Reducing Veteran Homelessness. 

• Breakthrough Outcome for 2016: 

– Continue progress toward an effective end to Veteran homelessness by permanently housing or preventing homelessness for an additional 100,000 Veterans and their family members, 

32 

VA INTERNAL FACING GOALS: 

9. Improve the Employee Experience (Including Leadership Development). 

• Breakthrough Outcome for 2016: 

– Continue to improve the employee experience by developing engaged leaders 

at all levels who inspire and empower all employees to deliver a seamless, integrated, and responsive VA customer service experience. 

– More than 12,000 engaged leaders skilled in applying LDL principles, concepts, and tools will work projects and/or initiatives to make VA a more effective and efficient organization. 

– Improve VA’s employee experience by incorporating LDL principles into VA’s 

leadership and supervisor development programs and courses of instruction. 

– VA Senior Executive performance plans will include an element that targets 

how to improve employee engagement and customer service, and all VA employees will have a customer service standard in their performance plans. 

– All VA supervisors will have a customer service standard in their performance plans. 

– VA will begin moving from paper-based individual development plans to a 

new electronic version, making it easier for both supervisors and employees. 

10. Staff Critical Positions. 

• Breakthrough Outcome for 2016: 

– Achieve significantly improved critical staffing levels that balance access and 

clinical productivity, with targets of 95 percent of Medical Center Director positions filled with permanent appointments (not acting) and 90 percent of other 

critical shortages addressed—management as well as clinical. 

– Work to reduce ‘‘time to fill’’ hiring standards by 30 percent. 

11. Transformation the Office of Information & Technology (OIT). 

• Breakthrough Outcome for 2016: Achieve the following key milestones on the 

path to creating a world-class IT organization that improves the support to business 

partners and Veterans. 

– Begin measuring IT projects based on end product delivery, starting with a 

near-term goal to complete 50 percent of projects on time and on budget. 

– Stand up an account management office. 

– Develop portfolios for all Administrations. 

– Tie all supervisors’ and executives’ performance goals to strategic goals. 

– Close all current cybersecurity weaknesses. 

– Develop a holistic Veteran data management strategy. 

– Implement a quality and compliance office. 

– Deploy a transformational vendor management strategy. 

– Ensure implementation of key initiatives to improve access to care. 

– Establish one authoritative source for Veteran contact information, military 

service history, and Veteran status. 

– Finalize the Congressionally mandated DOD/VA Interoperability requirements. 

12. Transform Supply Chain. 

• Breakthrough Outcome for 2016: 

– Build an enterprise-wide integrated Medical-Surgical supply chain that 

leverages VA’s scale to drive an increase in responsiveness and a reduction in 

operating costs. More than $150 million in cost avoidance will be redirected to 

priority Veteran programs. 

We are rigorously managing each of these ‘‘breakthrough priorities’’ by instituting 

a Department level scorecard, metrics, and tracking system. Each priority has an 

accountable and responsible official and a cross-functional, cross-Department team 

in support. Each team meets every other week in person with either the Secretary 

or Deputy Secretary to discuss progress, identify roadblocks, and problem solve solutions. This is a new VA—more transparent, collaborative, and respectful; less formal 

and bureaucratic; more execution and outcome-focused; principles based, not rulesbased. 

LEGISLATIVE PRIORITIES

The Department is grateful for your continuing support of Veterans and appreciates your efforts to pass legislation enabling VA to provide Veterans with the highquality care they have earned and deserve. We have identified a number of necVerDate Mar 15 2010 19:02 May 01, 2017 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6621 Z:\ACTIVE\022316.TXT PAULIN
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essary legislative items that require action by Congress in order to best serve Veterans going forward: 

1. Improve Care in the Community: We need your help, as discussed on many occasions, to help overhaul our Care in the Community programs. VA staff and subject 

matter experts have communicated regularly with congressional staff to discuss concepts and concerns as we shape the future plan and recommendations. We believe 

that together we can accomplish legislative changes to streamline Care in the Community programs before the end of this session of Congress. 

2. Flexible Budget Authority: We need flexible budget authority to avoid artificial 

restrictions that impede our delivery of care and benefits to Veterans. Currently, 

there are more than 70 line items in VA’s budget that dedicate funds to a specific 

purpose without adequate flexibility to provide the best service to Veterans. These 

include limitations within the same general areas, such as health care funds that 

cannot be spent on health care needs. These restrictions limit VA’s ability to deliver 

Veteran care and benefits based on demand, rather than specific funding lines. The 

2017 Budget proposes language to provide VA with new authority to transfer up to 

two percent of the discretionary appropriations for fiscal year 2017 between any of 

VA’s discretionary appropriations accounts. This new authority would give VA 

greater ability to address emerging needs and overcome artificial funding restrictions on providing Veterans’ care and benefits. 

3. Support for the Purchased Health Care Streamlining and Modernization Act: 

This legislation would clarify VA’s ability to contract with providers in the community on an individual basis, outside of Federal Acquisition Regulations (FAR), without forcing providers to meet excessive compliance burdens, while maintaining essential worker protections. The proposal allows this option only when care directly 

from VA or from a non-VA provider with a FAR-based agreement in place is not 

feasibly available. Already, we have seen certain nursing homes not renew their 

agreements with VA because of the excessive compliance burdens, and as a result, 

Veterans are forced to find new nursing home facilities for residence. 

VA further requests your support for our efforts to recruit and retain the very 

best clinical professionals. These include, for example, flexibility for the Federal 

work period requirement, which is inconsistent with private sector medicine, and 

special pay authority to help VA recruit and retain the best talent possible to lead 

our hospitals and health care networks. 

4. Special Legislation for VA’s West Los Angeles Campus: VA has requested legislation to provide enhanced use leasing authority that is necessary to implement the 

Master Plan for our West Los Angeles Campus. That plan represents a significant 

and positive step for Veterans in the Greater West Los Angeles area, especially 

those who are most in need. We appreciate the Committee’s hearing in December 2015 on legislation to implement that Master Plan, and VA urges your support 

for expedited consideration of this bill to secure enactment of it in this session of 

Congress. Enactment of the legislation will allow us to move forward and get positive results for the area’s Veterans after years of debate in the community and court 

action. This bill would reflect the settlement of that litigation, and truly be a winwin for Veterans and the community. I believe this is a game-changing piece of legislation as it highlights the opportunities that are possible when VA works in partnership with the community. 

5. Overhaul the Claims Appeals Process: As mentioned earlier, VA needs legislation that sets out structural reforms that will allow VBA and the Board to provide 

Veterans with the timely, fair, and quality appeals decisions they deserve thereby 

addressing the growing inventory of appeals. 

Last, let me again remind everyone that the vast majority of VA employees are 

hard workers who do the right thing for Veterans every day. However, we need your 

assistance in supporting the cultural change we are trying to drive. We are working 

to change the culture of VA from one of rules, fear, and reprisals to one of principles, hope, and gratitude. We need all stakeholders in this transformation to embrace this cultural transformation, including Congress. In fact, I think Congress, 

above all, recognizes the policy window we have at hand and must have the courage 

to make the type of changes it is asking VA and our employees to make. Congress 

can only put Veterans first by caring for those who serve Veterans. 

Our dedicated VA employees, if given the right tools, training, and support, can 

and go out of their way to provide the best care possible to our Veterans and their 

families. 

CLOSING

VA exists to serve Veterans. We have spent the last year and a half working to 

find new and better ways to provide high quality care and administer benefits effecVerDate Mar 15 2010 19:02 May 01, 2017 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6621 Z:\ACTIVE\022316.TXT PAULIN
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tively and efficiently through responsible use of taxpayer dollars. We will continue 

to face enormous challenges, and this budget request will provide the resources 

needed to continue the transformation of this Department. 

This budget and associated legislative proposals will allow us to streamline care 

for Veterans and improve access by addressing existing gaps, develop a simplified 

appeals process, further the progress we have made to eliminate the VBA claims 

backlog and end Veteran homelessness, and improve our cyber security posture to 

protect Veteran and employee data. It will also allow us to continue implementing 

MyVA to guide overall improvements to VA’s culture, processes, and capabilities. 

I have pledged that VA will ensure that the funds Congress appropriates to VA 

will be used to improve both the quality of life for Veterans and the efficiency of 

our operations. I am proud to continue this work and recognize there is much left 

to be done. We have made great strides and are grateful for the support of Congress 

through this transformation. 

Thank you for the opportunity to appear before you today and for your continued 

steadfast support of Veterans. We look forward to your questions. 

RESPONSE TO PREHEARING QUESTIONS SUBMITTED BY HON. JOHNNY ISAKSON TO THE

U.S. DEPARTMENT OF VETERANS AFFAIRS

Question 1. Women veteran gender-specific health care increased $40.4 million between fiscal years 2016 and 2017. Please break out the amount allocated to each 

category included under gender-specific health care for fiscal year 2016 as well as 

projections for fiscal year 2017. 

Please see attached. 

Sub Categories of Women’s Gender Specific Care 

FY 2015 FY 2016 FY 2017 $ Increase 

% Increase 

Genitourinary Care ........................................................................ $155,805 $167,175 $180,943 $13,768 7 .6% 

Neoplasms ..................................................................................... $76,458 $82,550 $90,313 $7,763 8 .6% 

Osteoporosis .................................................................................. $13,330 $14,352 $15,686 $1,334 8 .5% 

Pregnancy and Childbirth ............................................................. $73,138 $82,986 $94,041 $11,055 11 .8% 

Women’s Clinics ............................................................................ $120,095 $127,953 $134,405 $6,452 4 .8% 

Subtotal ................................................................................ $438,825 $475,016 $515,387 $40,371 

Percent of Gender Specific Care Provided through non-VA care 

FY 2015 FY 2016 FY 2017 

Genitourinary Care ........................................................................ 14 % 15 % 15 % 

Neoplasms ..................................................................................... 42 % 43 % 44 % 

Osteoporosis .................................................................................. 16 % 17 % 19 % 

Pregnancy and Childbirth ............................................................. 72 % 73 % 73 % 

Women’s Clinics ............................................................................ 0 % 0 % 0 % 

Days from Birth to last service provided in VHA or non-VA care 

FY 2015 FY 2016 FY 2017 

Neonates ........................................................................................ 9.74 9.74 9.74 

Question 2. What percentage of women veteran specific care is provided at Department of Veterans Affairs (VA) facilities and what percentage is provided through 

non-VA care? Please break out each category included under gender-specific health 

care for fiscal year 2016 as well as projections for fiscal year 2017. 

Response. Below are the disbursements for the following categories of women Veteran specific care as of February 13, 2016 as well as projections for the remainder 

of FY 2016 and FY 2017. 

35 

Question 3. Please detail the total number of medical centers that have a gynecologist on staff and whether they are full-time, part-time, or contracted. Please provide a break out of facilities and their surgical complexity. 

Response. As of February 11, 2016, there are 80 health care systems with at least 

one full-time or part-time gynecologist on staff. A listing of all Inpatient and Ambulatory VHA surgery programs and their operative complexity designations is below, 

and available on the internet at the following web site http://www.va.gov/health/ 

surgery/ 

VHA Surgical Program Location 

Veterans Integrated Service 

Network (VISN) 

Operative Complexity 

Designation 

Anchorage, AK .......................... 20 Ambulatory-Basic 

Birmingham, AL ....................... 7 Complex 

Montgomery, AL ........................ 7 Standard 

Fayetteville, AR ........................ 16 Intermediate 

Little Rock, AR ......................... 16 Complex 

Phoenix, AZ .............................. 18 Complex 

Tucson, AZ ............................... 18 Complex 

Fresno, CA ................................ 21 Intermediate 

Martinez, CA ............................. 21 Ambulatory-Advanced 

Sacramento, CA ....................... 21 Complex 

Palo Alto, CA ............................ 21 Complex 

San Francisco, CA .................... 21 Complex 

Loma Linda, CA ....................... 22 Complex 

Long Beach, CA ....................... 22 Complex 

San Diego, CA .......................... 22 Complex 

West Los Angeles, CA .............. 22 Complex 

Denver, CO ............................... 19 Complex 

Grand Junction, CO .................. 19 Standard 

West Haven, CT ........................ 1 Complex 

Washington, DC ....................... 5 Complex 

Wilmington, DE ........................ 4 Intermediate 

Bay Pines, FL ........................... 8 Complex 

Cape Coral, FL ......................... 8 Ambulatory-Basic 

Gainesville, FL .......................... 8 Complex 

Jacksonville, FL ........................ 8 Ambulatory-Basic 

Lake City, FL ............................ 8 Ambulatory-Advanced 

Miami, FL ................................. 8 Complex 

Lake Baldwin, FL ..................... 8 Ambulatory-Advanced 

Tampa, FL ................................ 8 Complex 

Viera, FL ................................... 8 Ambulatory-Basic 

West Palm Beach, FL ............... 8 Intermediate 

Augusta, GA ............................. 7 Complex 

Atlanta, GA ............................... 7 Complex 

Dublin, GA ................................ 7 Standard 

Des Moines, IA ......................... 23 Intermediate 

Iowa City, IA ............................. 23 Complex 

Boise, ID ................................... 20 Intermediate 

Danville, IL ............................... 11 Ambulatory-Basic 

Chicago-Jesse Brown, IL .......... 12 Complex 

Hines, IL ................................... 12 Complex 

North Chicago, IL ..................... 12 Intermediate 

Marion, IL ................................. 15 Standard 

Evansville, IN ........................... 15 Ambulatory-Basic 


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VHA Surgical Program Location 

Veterans Integrated Service 

Network (VISN) 

Operative Complexity 

Designation 

Fort Wayne, IN .......................... 11 Standard 

Indianapolis, IN ........................ 11 Complex 

Leavenworth, KS ....................... 15 Intermediate 

Topeka, KS ............................... 15 Standard 

Wichita, KS ............................... 15 Intermediate 

Lexington, KY ........................... 9 Complex 

Louisville, KY ............................ 9 Complex 

New Orleans, LA ....................... 16 Ambulatory-Advanced 

Pineville, LA ............................. 16 Ambulatory-Advanced 

Shreveport, LA .......................... 16 Complex 

Boston-Jamaica Plain, MA ....... 1 Ambulatory-Advanced 

West Roxbury, MA .................... 1 Complex 

Baltimore, MD .......................... 5 Complex 

Togus, ME ................................ 1 Intermediate 

Ann Arbor, MI ........................... 11 Complex 

Detroit, MI ................................ 11 Complex 

Saginaw, MI ............................. 11 Ambulatory-Basic 

Iron Mountain, MI .................... 12 Ambulatory-Basic 

Minneapolis, MN ...................... 23 Complex 

St. Cloud, MN ........................... 23 Ambulatory-Basic 

Columbia, MO .......................... 15 Complex 

Kansas City, MO ...................... 15 Complex 

St. Louis, MO ........................... 15 Complex 

Biloxi, MS ................................. 16 Intermediate 

Jackson, MS ............................. 16 Complex 

Billings, MT .............................. 19 Ambulatory-Basic 

Fort Harrison, MT ..................... 19 Intermediate 

Asheville, NC ............................ 6 Complex 

Durham, NC ............................. 6 Complex 

Fayetteville, NC ........................ 6 Standard 

Salisbury, NC ........................... 6 Intermediate 

Fargo, ND ................................. 23 Intermediate 

Omaha, NE ............................... 23 Complex 

Manchester, NH ........................ 1 Ambulatory-Basic 

East Orange, NJ ....................... 3 Complex 

Albuquerque, NM ...................... 18 Complex 

Reno, NV .................................. 21 Intermediate 

Las Vegas, NV .......................... 22 Intermediate 

Albany, NY ................................ 2 Complex 

Buffalo, NY ............................... 2 Complex 

Syracuse, NY ............................ 2 Complex 

Bronx, NY ................................. 3 Complex 

Brooklyn, NY ............................. 3 Complex 

Northport, NY ........................... 3 Complex 

New York, NY ........................... 3 Complex 

Cincinnati, OH .......................... 10 Complex 

Cleveland-ASC, OH ................... 10 Ambulatory-Basic 

Cleveland, OH .......................... 10 Complex 

Columbus, OH .......................... 10 Ambulatory-Advanced 

Dayton, OH ............................... 10 Intermediate 

Muskogee, OK ........................... 16 Intermediate 

Oklahoma City, OK ................... 16 Complex 

Portland, OR ............................. 20 Complex 

Roseburg, OR ........................... 20 Ambulatory-Basic 

Erie, PA .................................... 4 Ambulatory-Advanced 

Lebanon, PA ............................. 4 Intermediate 

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VHA Surgical Program Location 

Veterans Integrated Service 

Network (VISN) 

Operative Complexity 

Designation 

Philadelphia, PA ....................... 4 Complex 

Pittsburgh, PA .......................... 4 Complex 

Wilkes-Barre, PA ...................... 4 Intermediate 

San Juan, PR ........................... 8 Complex 

Providence, RI .......................... 1 Intermediate 

Charleston, SC ......................... 7 Complex 

Columbia, SC ........................... 7 Intermediate 

Fort Meade, SD ........................ 23 Standard 

Hot Springs, SD ....................... 23 Ambulatory-Basic 

Sioux Falls, SD ......................... 23 Intermediate 

Memphis, TN ............................ 9 Complex 

Mountain Home, TN ................. 9 Intermediate 

Murfreesboro, TN ...................... 9 Ambulatory-Advanced 

Nashville, TN ............................ 9 Complex 

Houston, TX .............................. 16 Complex 

Dallas, TX ................................. 17 Complex 

Harlingen, TX ........................... 17 Ambulatory-Basic 

San Antonio, TX ....................... 17 Complex 

Temple, TX ............................... 17 Complex 

Amarillo, TX .............................. 18 Intermediate 

El Paso, TX ............................... 18 Ambulatory-Basic 

Salt Lake City, UT .................... 19 Complex 

Clarksburg, WV ........................ 4 Intermediate 

Hampton, VA ............................ 6 Intermediate 

Richmond, VA ........................... 6 Complex 

Salem, VA ................................. 6 Intermediate 

White River Junction, VT .......... 1 Intermediate 

Seattle, WA ............................... 20 Complex 

Spokane, WA ............................ 20 Standard 

Tacoma, WA ............................. 20 Ambulatory-Basic 

Green Bay, WI .......................... 12 Ambulatory-Basic 

Madison, WI ............................. 12 Complex 

Milwaukee, WI .......................... 12 Complex 

Martinsburg, WV ...................... 5 Intermediate 

Beckley, WV .............................. 6 Standard 

Huntington, WV ........................ 9 Complex 

Cheyenne, WY ........................... 19 Standard 

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FACILITY GYNECOLOGISTS RAW DATA


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Question 4. Current law allows VA to cover care for newborns of eligible women 

veterans for the first seven days after birth. Please provide a break out of the average number of days VA has covered care for newborns in fiscal years 2014, 2015, 

and 2016, and projections for fiscal year 2017. 

Response. Listed in the table below is the average number of days the VA has 

covered for newborn care since FY 2014. These averages are consistent with the 

number of days the newborn was actually hospitalized. 

FY Average Auth Days 

2014 ............................. 2.8 

2015 ............................. 3.0 

2016 ............................. 3.2 

2017 (Projected) ........... 3.4 

Question 5. In the fiscal year 2017 budget request, the Veterans Health Administration (VHA) will create the VHA Transitional Care Program Office ‘‘to develop and 

manage policies, procedures and performance metrics related to VHA transitional 

care.’’ 

A. How many full-time equivalent employees will be dedicated to this office for 

fiscal years 2017 and 2018? 

B. How much budgetary resources will be dedicated to this new office for fiscal 

years 2017 and 2018? 

C. Please detail the duties of this new office, including to whom the office will 

report. 

Response. The VHA Transitional Care Program Office is an aspirational project 

for the future. However, there is no specific resource or budget request for it at this 

time. 

Question 6. The fiscal year 2017 budget request indicates that VA overestimated by $1.8 billion the obligations for fiscal year 2015 ‘‘because the obligations did not 

have sufficient supporting documents’’ and specifies VA would continue to identify 

the appropriations account and issue corrective actions. 

A. Has VA identified the appropriations account? If so, please provide a detailed 

explanation of what caused the overestimate. 

Response. Our financial audit identified that VA appropriations were possibly overstated by $1.8 billion in obligations due to the lack of supporting documentation. 

The FY 2015 financial audit required that an adjustment be made, but the audit 

did not indicate which specific appropriation account should be adjusted. 

Most of the likely overestimate occurred due to a lack of the subsidiary system 

for Purchased Care not being directly interfaced/or reconciled to the main accounting system. Other overestimates occurred in other programs due to a lack of a robust review of obligation balances. 

B. What corrective actions has VA taken in this matter? 


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Response. VA has begun implementing a new, mandatory reconciliation process 

for FY 2016 for Purchased Care. This new reconciliation process was outlined as 

part of the Care in the Community certification process in a memorandum from the 

Acting Deputy Under Secretary for Health Operations and Management to all Network Directors. The subsidiary accounting system will be reconciled to the main accounting system on a monthly basis, and supporting documentation will be maintained to support the reconciliation process. Documentation for obligations will also 

be reviewed for reasonableness and validity as part of the reconciliation process to 

ensure the most accurate obligation balances. 

Other programs will be performing a more comprehensive review of obligations for 

FY 2016 to ensure adequate supporting documentation exists for all substantial obligation balances. 

Question 7. Please provide an update on VA’s agreement with the United States 

Army Corps of Engineers (USACE) to manage the seven major construction projects 

identified in Public Law 114–113, the Consolidated Appropriations Act of 2016, and 

VA’s plan to ensure all future new medical facilities with a cost of $100 million or 

greater are managed by USACE. 

Response. VA has established a master Inter-Agency Agreement (IAA) with the 

U.S. Army Corps of Engineers (USACE) which was signed on July 14, 2015. The 

scope of that IAA requires USACE to provide planning, acquisition, design, engineering, and construction management services and related work, including all levels of contracting, planning and project management support as defined by CFM for 

VA’s ‘‘super construction projects’’ (projects over $100 million). IAA orders can be 

issued to the USACE for Exploratory, Design, and Construction requirements. To 

date, there are seven projects that are partnered with USACE through an IAA Task 

Order, or are in the process of entering the initial task order phase. To ensure that 

all future partnered projects are effectively managed, CFM and USACE are jointly 

developing an Enterprise Program Management Plan that will provide a framework 

and consistent approach to managing these projects. A Senior Executive Review 

Group consisting of CFM and USACE participants is scheduled, and this meeting 

will allow the participants to further define the partnership and to ensure alignment of all teams in our joint effort to ensure on time, on schedule and within budget project execution. 

Question 8. The budget indicates that VA expects to fund 328 Caregiver Support 

Coordinators in 2016. Does the fiscal year 2017 budget request include an increase 

in Caregiver Support Coordinators? 

Response. Yes. The budget request does include an increase in staffing for the 

Caregiver Support Program. VA expects to fund 400 Caregiver Support Coordinators 

in FY 2017, an additional 72 positions. 

Question 9. Despite a projected decrease in the number of veterans to be served 

by the Grant and Per Diem Program, the fiscal year 2017 budget request represents 

an increase from fiscal year 2016. Is this solely based on the expected increase of 

the per diem rate, or are there other factors contributing to the increase? If so, 

please list the factors. 

Response. The FY 2017 budget request for the Grant and Per Diem (GPD) program restores program funding at the fully authorized level. Even though the demand for GPD transitional housing beds is expected to decrease over time, the program still plays a vital role in the continuum of homeless services; providing supportive services to those Veterans who would otherwise be among the unsheltered 

homeless population, and ultimately transitioning to permanent housing. GPD funded providers have not had an increase in the per diem rate since December 2013; 

therefore, per diem costs for the program are anticipated to rise overall for operational programs as the nightly cost for per diem increases in the community. 

VA and its Federal partners are promoting the use GPD to support an operational 

model of transitional housing as bridge housing. Bridge housing, is defined as transitional housing used as a short-term stay when a Veteran has been offered and accepted a permanent housing intervention (e.g., Supportive Services for Veteran 

Families (SSVF), Department of Housing and Urban Development-VA Supportive 

Housing (HUD-VASH), etc.) but is not able to immediately enter the permanent 

housing. Veterans accessing bridge housing would otherwise be street homeless; 

therefore, this model is an opportunity to provide safe, secure structured environment for these Veterans while they secure permanent housing. It is anticipated that 

the use of this model will increase the overall utilization of GPD funded projects. 

Question 10. The 2015 point-in-time count indicated a 4 percent decline in veteran 

homelessness from 2014, and a 36 percent decline since 2009. Despite this decline, 

the fiscal year 2017 budget request for programs to prevent and end veteran homelessness represents an increase between fiscal years 2015 and 2016. Please explain, 

47 

in detail, the reason for the funding increase at a time when homelessness is declining. 

Response. The fiscal year (FY) 2017 budget supports VA’s commitment to ending 

Veteran homelessness by emphasizing rescue for those who are homeless today, and 

prevention for those at risk of homelessness. The FY 2017 budget requests $1.6 billion for VA homeless-related programs, including case management support for 

HUD-VASH, GPD, and SSVF. 

The requested increase in the FY 2017 VA homeless-services budget request is 

needed to support the $60 million in HUD-VASH vouchers that were appropriated 

to HUD in FY 2016. VA was not appropriated corresponding funding for case management. It is estimated that approximately 300 additional full-time equivalent employees will be required to support the Veterans who receive these vouchers. It is 

expected that approximately 85,000 HUD-VASH vouchers will be in use by the end 

of FY 2017. The increase in the GPD program budget request for FY 2017 restores 

the program to its fully authorized level. 

The kind of progress reflected in the declining Point-in-Time estimates affirms 

that the strategies and systems that VA has implemented are working. Additionally, 

VA has made unprecedented efforts to promote the services available to Veterans 

who are homeless or might become homeless. As a result of the success of the effort 

and targeted resources, more Veterans are seeking out the VA more than ever before. Since 2010, demand for VA homeless-related services has increased by 136 percent (FY 2010: 127,070—FY 2015: 300,108 Unique Veterans accessing VHA homeless services). There has been an 8.5 percent increased demand for homeless services since this time last year (January 2015: 164,224; January 2016: 178,139). Communities that have reached the goal or are close to effectively ending homelessness 

rely heavily on VA targeted homeless resources. Communities that have developed 

a sustainment plan are dependent on those resources to remain available as they 

continue to tackle homelessness. 

Until we have an economy that benefits everyone, Veterans will still have housing 

crises and some will become homelessness. The systems we have in place will make 

sure that the experience is measured not in months or years, but in days if sustained. Therefore, VA remains focused on ensuring adequate resources that address 

the needs of Veterans who may become or are at-risk of homelessness and sustains 

the support for Veterans who have moved into permanent housing so that they 

maintain housing stability and do not fall back into homelessness. 

Question 11. The fiscal year 2017 budget request includes this legislative proposal: 

Clarify Evidentiary Threshold at Which VA is Required to Provide a Medical Examination 

This proposal seeks to amend 38 U.S.C. § 5103A(d) to clarify the evidentiary 

threshold for which VA, under its duty to assist obligation, is required to request 

a medical examination for compensation claims. This amendment would clarify section 5103A(d)(2) to require, prior to providing a medical exam, the existence of objective evidence establishing that the Veteran experienced an event, injury, or disease 

during military service. VA would still consider lay evidence as sufficient to show 

a current disability or persistent symptoms of a disability. However, except in special circumstances, objective evidence such as medical records, service records, accident reports, etc., must also be of record to trigger an exam. Benefit savings to the 

Compensation and Pensions account are estimated to be $120.1 million in 2017, 

$124.9 million in 2018, and $650.3 million over 5 years and $1.4 billion over 10 

years. 

A. Please provide the Senate Committee on Veterans’ Affairs (Committee) with a 

breakdown of the savings expected from this proposal and the underlying assumptions used to calculate the expected cost savings, such as the expected reduction in 

the number of examinations that would be provided by VA each year and the expected impact on awards of compensation. 

Response. Requiring the existence of objective evidence establishing that the Veteran experienced an event, injury, or disease during military service prior to providing a medical exam is estimated to save $120.1 million in FY 2017, $650.3 million over five years, and $1.4 billion over 10 years. 

VA estimates approximately 505,478 disability exams will be conducted in FY 

2017, and approximately 30 percent of these exams will result in denial of claimed 

conditions being associated with a Veteran’s military service. VA assumes 113,732 

exams (75 percent of denials) would no longer require a disability exam based on 

this proposal. 

48 

Cost Benefit Analysis: 

Benefit Savings (Mandatory) 

Fiscal Year 

Caseload or 

Workload Savings 

(as appropriate) ($000s) 

2017 ................................... 113,732 $120,082 

2018 ................................... 113,732 $124,875 

2019 ................................... 113,732 $129,860 

2020 ................................... 113,732 $135,044 

2021 ................................... 113,732 $140,435 

5-Year Total ................... 568,662 $650,296 

2022 ................................... 113,732 $146,041 

2023 ................................... 113,732 $151,872 

2024 ................................... 113,732 $157,935 

2025 ................................... 113,732 $164,240 

2026 ................................... 113,732 $170,798 

10-Year Total ................. 1,137,325 $1,441,182 

GOE Costs (Discretionary) 

No GOE costs are associated with this proposal 

Fiscal Year 

Caseload or 

Workload Savings 

(as appropriate) ($000s) 

2017 ................................ 0 0 

2018 ................................ 0 0 

2019 ................................ 0 0 

2020 ................................ 0 0 

2021 ................................ 0 0 

5-Year Total ............... 0 0 

2022 ................................ 0 0 

2023 ................................ 0 0 

2024 ................................ 0 0 

2025 ................................ 0 0 

2026 ................................ 0 0 

10-Year Total ............. 0 $0 

Methodology: 

Approximately 30 percent of disability exams result in denial of claimed conditions being associated with a Veteran’s military service. Compensation Service assumes 75 percent of these denials would no longer require a disability exam based 

on this proposal. 

This proposal would not result in GOE savings. VBA would increase its administrative efficiency by redirecting resources to other critical claims processing. 

Compared to the estimate provided in the FY 2016 President’s Budget, savings 

in this updated estimate have increased as a result of Section 241 of Division I, 

Title II, of P.L.113–235 (enacted December 16, 2014), which proposes to expand the 

number of sites where contract medical exams could be funded by the C&P appropriation. The estimated cost savings in the FY 2016 Budget was based on an estimated 165,000 exams completed under this authority. This revised cost savings estimate is based on 500,000 exams completed under this authority 

49 

In addition to the change in Pub. L. 113–235 regarding the number of sites authorized to utilize contract medical exams, VBA plans to absorb all contract medical 

exams previously performed under VHA contracts. VHA historically used contractors to complete exams it did not have capacity to complete through its own clinicians. Moving forward, any exams VHA does not have capacity to complete will be 

completed by VBA’s contractors. Therefore, the revised estimate of 500,000 exams 

completed under VBA’s mandatory funding authority includes approximately 

200,000 exams VHA previously planned to have contractors complete. 

VHA will continue to be the primary provider of disability exams for VA, and 

VHA clinicians will continue performing disability exams for VA at current capacity 

levels. Contract exams are only utilized when VHA exam capacity is exceeded. VA 

will maintain current protocols to ensure distribution of exam capacity that results 

in use of VHA resources before contract resources are utilized. As such, only contract exams will be reduced as a result of this proposal, and VHA funding for exams 

performed by VHA employees on a non-contract basis will not be impacted. 

Question 12. In the fiscal year 2017 budget request, VA seeks an additional 300 

staff to process non-rating claims work. 

A. How many staff are currently dedicated to non-rating work (other than appeals), how many additional staff does VA expect will be brought on board for that 

purpose during fiscal year 2016, and how many employees in total would perform 

that function in fiscal year 2017 if the budget request is adopted? 

Response. Currently, VBA has 1,219 staff assigned to perform non-rating work, 

which includes management, clerical, and direct-labor employees. This figure includes approximately 260 temporary employees who are assigned to work non-rating 

work. VBA is grateful for the authority to hire 320 FTE for non-rating work in FY 

2016, which will permit conversion of its temporary employees to permanent status 

and hiring of an additional 60 FTE. VBA requested an additional 300 FTE in its 

FY 2017 budget request, which will bring our non-rating strength to 1,579 FTE. 

B. On average, how many non-rating actions (other than appeals) are completed 

per year by individual non-rating staff, what are the performance targets for these 

employees, and how many actions per employee would you expect to be completed 

per year if funding for the additional staff is provided? 

Response. VBA does not budget FTE solely for rating or non-rating work. Production per FTE is based on all compensation and pension employees assigned to each 

regional office’s claims processing workforce. Please see the chart below for production per FTE; in FY 2016, compensation and pension FTE are prorated for four 

months to determine production per FTE. 

FTE 

Non-Rating Claim 

and Administrative 

Actions Completed 

Non-Rating 

Production 

per FTE 

FY 2014 .............................. 14,307 2,699,264 188.7 

FY 2015 .............................. 15,121 3,112,379 205.8 

FY 2016 as of Jan. 31 ....... 5,130 878,208 171.2 

VBA estimates the additional 320 non-rating employees will not substantially increase the non-rating claims output because approximately 260 of these employees 

are already performing non-rating work. The additional 60 FTE are estimated to 

complete between 9,000 and 13,000 additional non-rating claims and administrative 

actions in FY 2016. However, the number of non-rating claims completed per FTE 

will initially decrease because of the hours devoted to training new employees and 

the lower production levels of these employees due to their inexperience. In FY 2016 

and FY 2017, VBA expects non-rating claim production per FTE to decrease slightly 

from the FY 2015 average of 206 non-rating claims/actions per compensation and 

pension FTE. 

Individual employees have a production element in their performance standards 

based on their General Schedule grade level, time in position, and type of work. 

Once fully trained, these employees will complete approximately 7 to 10 actions on 

average per day. All actions lead to the completion of a claim, but some claims will 

require multiple actions to fulfill legal requirements to develop for additional evidence or provide due process notice. 

C. How many employees are currently dedicated to handling appeals at the Veterans Benefits Administration, how many additional appeals staff does the Veterans 

Benefits Administration plan to bring on board during fiscal year 2016, and how 

50 

many employees in total would perform that function in fiscal year 2017 if the budget request is adopted? 

Response. In FY 2015, VBA had an average of 916 employees dedicated to appeals 

and has increased staffing to 1,178 employees as of January 31, 2016. VBA is grateful for funding to hire 100 appeals FTE in FY 2015 and 200 appeals FTE in FY 

2016. However, additional FTE are not sufficient to address the existing or future 

workload for appeals. Under current law, VA appeals framework is complex, ineffective, and opaque, and Veterans wait on average five years for final resolution of an 

appeal. The 2017 Budget supports the development of a Simplified Appeals Process 

to provide Veterans with a simple, fair, and streamlined appeals procedure in which 

they would receive a final appeals decision within 365 days from filing of an appeal 

by FY 2021. The 2017 Budget also provides funding to support over 900 FTE for 

the Board and proposes a legislative change that will improve an outdated and inefficient process which will benefit all Veterans through expediency and accuracy. We 

look forward to working with Congress, Veterans, and other stakeholders to implement improvements. 

D. On average, how many appeal-related actions are completed per year by individual appeals staff, what are the performance targets for these employees, and how 

many appeal-related actions per employee would you expect to be completed per 

year if funding for the additional staff is provided? 

Response. The complex appeal process defined in current law involves multiple reviews of the evidence considered in the original decision as well as any new evidence 

received during the appeal. Please see the chart below for VBA’s total completed appeal actions (such as statements of the case and appeal certifications) and appeals 

productivity; in FY 2016, compensation and pension FTE are prorated for four 

months to determine production per FTE. 

VBA FTE Appeal Actions 

Completed 

Appeals 

Productivity 

FY 2015 .............................. 916 198,774 217 

FY 2016 as of Jan. 31 ....... 1178 69,084 176 

Employees processing appeals are typically VBA’s most experienced disability 

claims processors, which mitigates productivity losses. VBA expects a short-term decrease in appeals productivity as employees new to processing appeals become familiar with the entire process but will mitigate that loss by utilizing overtime to process appeals. As previously noted, productivity per FTE is based on all compensation 

and pension employees assigned to regional offices, not just FTE processing appeals. 

The performance standard for Decision Review Officers is based on type of work 

and the number of issues addressed in each decision. At minimum, employees will 

complete three appeal actions per day to achieve the fully successful level of performance. 

To increase efficiency, VBA is working closely with the Board of Veterans’ Appeals, Veterans Service Organizations, and Congress to identify legislative solutions 

to simplify the appeals process and improve the timeliness of appeal decisions. 

Question 13. The fiscal year 2017 budget request includes an increase of $46 million for the Board of Veterans’ Appeals to fund an additional 242 employees. 

A. How long is it expected to take to hire and train 242 new employees? 

Response. The Board will begin the recruitment process for the 242 additional employees immediately upon enactment of the FY 2017 budget in order to support execution of the funding by the end of the Fiscal Year. In advance of the actual job 

announcement, the Board is working with OPM on an aggressive strategic recruitment plan, to ensure successful execution. The 242 additional employees will primarily consist of staff attorneys to draft appeals decisions, with an appropriate complement of administrative support staff and some additional judges. For new attorney staff, the Board has a 6-month training curriculum to ensure thorough training 

on veterans benefits law. New judges will undergo rigorous initial training with follow-up mentoring and continuing education for both legal training and leadership 

training. Administrative staff will also undergo new employee training specific to 

their business line. 

B. What positions would be filled by those new employees? 

Response. Most of the 242 employees would be staff attorneys. Specifically, the 

goal is for 145 attorneys, 24 judges, and 73 support staff. 

51 

C. What challenges would the Board of Veterans’ Appeals face in expanding rapidly if funding for this increase in staff is approved and how would those challenges 

be handled? 

Response. Taking lessons learned from the 2013 hiring surge of 100 attorneys in 

a four month timeframe, the challenges faced would include human resources support, information technology (IT) support, training support, and office space. These 

challenges would be handled by having a strong recruitment plan in place this year, 

in advance of the budget enactment, with a tiger team of dedicated personnel to 

handle the recruitment and on-boarding. The IT needs would also be identified in 

advance, with a streamlined plan to have the necessary equipment in place in a 

timely fashion as new hires were on-boarded. The training needs would be handled 

by having a strong training plan in place, using lessons learned from the large 

training in 2013, and subsequent trainings. Finally, the office space training would 

be handled by a combination of repurposing existing space for storing paper claims 

files, and increasing telework for eligible employees. 

D. Would the Board of Veterans’ Appeals expect any short-term decrease in productivity if there is a large influx of new employees during fiscal year 2017? 

Response. Eighty-five percent of the Board’s budget is allocated to personnel costs; 

therefore, a large portion of any increase in funding will be applied to hiring to address the Board’s pending inventory of appeals. A direct and proportional correlation 

exists between the number of Board employees and decision output. It is likely that 

the Board will experience a decrease in productivity during the on-boarding and initial training period, as existing Board staff will be needed to focus on training the 

new employees as expediently as possible. While the Board may experience a slight 

dip in productivity during the initial new attorney training period, the Board anticipates that any decline will be made up once the new employees are in place and 

are fully trained. In this regard, following the FY 2013 and FY 2014 hiring surges 

during which the Board recruited and onboarded approximately 170 additional FTE, 

the Board saw a short term productivity dip during the training period, but a subsequent overall productivity increase, resulting in 55,532 dispositions in FY 2014 and 

55,713 dispositions in FY 2015. 

In 2015, each Board FTE produced approximately 86 appellate decisions. The 

Board anticipates that the number of appellate decisions per FTE may increase 

slightly with technological enhancements as the appeals process is modernized provided that resources and enterprise support are intact. However, a competing force 

against that increase is the ever changing and complex legal landscape, along with 

increased evidence-gathering and readjudication at every stage in the multi-stage 

appeals process. 

E. Please provide a break out of the non-personnel costs that would be incurred 

to bring on board those employees, such as rearranging office space, equipment, office supplies, or training materials. 

Response. As noted above, 85 percent of the Board’s budget is allocated to personnel costs. The balance of funds will allow the Board to pay for operating costs 

such as rent, security, and other administrative requirements. See chart below for 

further details. 

Board of Veterans’ Appeals 

Summary of Employment and Obligations 

(dollars in thousands) 

2015 

Actual 

2016 

2017 

Request 

Increase (+)/ 

Decrease (–) 

Budget 

Request 

Current 

Estimate 

Average Employment ............................................................. 646 669 680 922 +242 

Obligations: 

Personal Services .............................................................. 88,757 92,522 96,317 133,379 +37,062 

Travel ................................................................................ 319 415 413 422 +9 

Transportation of Things .................................................. 0 80 94 129 +35 

Rents, Communications & Utilities .................................. 8,704 8,960 9,993 13,539 +3,546 

Printing & Reproduction ................................................... 40 90 94 135 +41 

Other Services ................................................................... 5,016 5,022 5,167 7,442 +2,275 

Supplies & Materials ........................................................ 257 325 468 511 +43 

Equipment ......................................................................... 35 120 100 189 +89 

Insurance & Indemnities .................................................. 3 350 292 350 +58 

Total Obligations .......................................................... $103,131 $107,884 $112,938 $156,096 $43,158 

52 

Board of Veterans’ Appeals 

Summary of Employment and Obligations—Continued 

(dollars in thousands) 

2015 

Actual 

2016 

2017 

Request 

Increase (+)/ 

Decrease (–) 

Budget 

Request 

Current 

Estimate 

Reimbursements .................................................................... 0 0 0 0 0 

SOY Unobligated Balance (–) ............................................... (7,300) 0 (3,156) 0 +3,156 

EOY Unobligated Balance (+) .............................................. 3,349 0 0 0 0 

Transfer from Unobligated Balance (–) ............................... 0 0 102 0 –102 

Budget Authority .......................................................... $99,180 $107,884 $109,884 $156,096 $46,212 

Question 14. According to VA, the appeals process takes on average 5 years between filing the appeal and receiving a decision by the Board of Veterans’ Appeals. 

A. Of that 5-year timeframe, please provide a break out of how many days/months 

on average an appeal would be waiting for the Veterans Benefits Administration or 

the Board of Veterans’ Appeals to take a required action on it. 

B. Of that 5-year timeframe, please provide a break out of how many days/months 

on average the Veterans Benefits Administration or the Board of Veterans’ Appeals 

would be waiting for the appellant or his/her representative to take a required action regarding an appeal. 

Response. In FY 2015, the average appeals processing time from the date of filing 

a Notice of Disagreement (NOD) to a Board adjudication (including grants, denials, 

and remands for further development) was approximately 5 years (1,771 days). The 

attached SVAC Pre-Hearing Presentation captures the average processing time in 

days for each step of the multi-step appeals process, including a breakdown of VSO 

and Board time for cases completed by the Board from FY 2005 to FY 2015. The 

data include only appeals decided by the Board, not those resolved at earlier stages 

of the appeals process. 

The chart below shows what a simplified appeals process would look like, as well 

as the corresponding VBA and Board processing times by 2021, with implementation of the legislative proposals and resources requested in the 2017 President’s 

Budget for 2017 and beyond. 


223q1va14.eps
53 

Question 15. In response to questions about the fiscal year 2016 budget request, 

VA indicated that, during fiscal years 2014 and 2015, the Veterans Benefits Administration processed compensation and pension claims during overtime hours but did 

not process appeals during overtime hours. VA estimates that approximately 11 to 

12 percent of individuals receiving a decision on their claims by the regional offices 

will appeal. 

A. What percent of claims processed during overtime did the Veterans Benefits 

Administration project would generate appeals? 

Response. VBA does not separately track claims processed on overtime and anticipates the overall ratio of appeals received divided by claims completed in a year will 

continue to be approximately 11 to 12 percent, which includes claims completed during overtime. The appeals process established by current law allows Veterans to file 

appeals up to one year following VA’s notice of a final decision. As such, many decisions rendered during FY 2015 are still within their appeal period. 

B. By opting to use overtime to process claims but not a commensurate proportion 

of appeals, did the Veterans Benefits Administration project that the appeals inventory at the Veterans Benefits Administration would increase during that time? If 

so, please share those projections with the Committee. 

Response. VBA did project its appeals inventory would increase in FY 2015 by approximately 30 percent. This projection was based on a historic level of 1.4 million 

disability rating claims completed and 3.1 million non-rating claims and other administrative actions completed. VBA implemented new performance metrics for appeals output and increased staffing and to address the increase in appeals inventory. 

However, without legislative change or significant increases in staffing, VA will 

face a soaring appeals inventory, and Veterans will wait even longer for a decision 

on their appeal. If Congress fails to enact VA’s proposed legislation to simplify the 

appeals process, Congress would need to provide resources for VA to sustain more 

than double its appeals FTE, with approximately 5,100 appeals FTE onboard. The 

prospect of such a dramatic increase, while ignoring the need for structural reform, 

is not a good result for Veterans or taxpayers. 

Question 16. On January 21, our Committee held a hearing on the MyVA transformation. This initiative detailed priorities and strategies for transforming how VA 

interacts with veterans. The budget is largely silent on specifics related to spending 

and the MyVA initiative. Please provide a breakdown of the following: 

A. How much VA has spent and plans to spend on implementation of the MyVA 

initiative. 

Actual FY 2015 

Veteran Experience Stand-Up 

Veteran Experience Stand-Up Total .......................................................................................................... $10,236,182.62 

Support Services 

Support Services Total .............................................................................................................................. $4,667,037.34 

Performance Improvement 

Performance Improvement Total ............................................................................................................... $9,054,806.85 

Strategic Partnerships (Not funded with reimbursable funds) 

Strategic Partnerships ............................................................................................................................... $137,243.16 

MyVA Task Force PSO (Not funded with reimbursable funds) 

My VA Task Force PSO Total ..................................................................................................................... $10,005,171.00 

MyVA Total 

MyVA Total ................................................................................................................................................. $34,100,440.97 

These costs reflect direct costs incurred by the MY VA Task Force. Costs associated to the 12 Breakthrough Priorities are spread throughout the entire department. 

B. A specific breakdown of funding sources and any areas you have had to divert 

from other resources. 

MyVA Funding by Account 

Pro Rata Share of Reimbursements FY 15 FY 16 

VHA ...................................................... $31,297,500 $68,692,500 

VBA ...................................................... 2,434,250 5,342,750 

OIT ....................................................... 869,375 1,908,125 

54 

MyVA Funding by Account—Continued 

Pro Rata Share of Reimbursements FY 15 FY 16 

NCA ..................................................... 173,875 381,625 

Total ................................................ $34,775,000 $76,325,000 

C. How many full-time equivalents are currently being utilized in the transformation and how many VA projects will be needed. 

Question 17. The budget requests almost $4.3 billion in information technology. 

One of the breakthrough priorities for the Secretary is that VA will complete 50 percent of information technology projects on time and on budget. 

What percentage of information technology projects are completed on time and on 

budget now? 

Response. The Veteran-Focused Integration Process (VIP) replaces the Project 

Management Accountability System (PMAS) for enterprise IT management of products and services, which VA has used since 2009 to oversee its IT project delivery. 

The move from PMAS to VIP takes a generational leap forward in VA’s commitment 

to serve our Nation’s Veterans. Using PMAS criteria (which measures work product 

delivery); VA currently has a 78% on time rate for delivering increments of work 

within IT projects. 

However, the evolution to VIP greatly expands the scope and span of what VA 

will be measuring, while reducing the paperwork requirements by 88 percent. Under 

VIP, VA is re-organizing to a portfolio management construct focused on measuring 

end product delivery rather than work product delivery. The near-term (6–18 

month) goal for VIP is targeting 50 percent on-time and on-budget delivery, higher 

than the industry standard of 45 percent. 

Question 18. The budget requests an additional 703 full-time equivalents for information technology. 599 of these employees will be staffing ‘‘enterprise operations.’’ 

Can you please provide further details on these projects and the specific program 

offices where the full-time equivalents will be needed? 

Response. Enterprise Operations (EO) is a computer operations and hosting function currently funded within the VA Franchise Fund. EO has been organizationally 

aligned within OI&T Service Delivery and Engineering (SDE) for several years. This 

realignment will not change OI&T budget requirements; funds that would have 

been transferred to the Franchise Fund will be directly obligated by OI&T instead. 

EO operates or contracts for the computing infrastructure for many of VA’s software applications that directly serve Veterans, VA business lines that provide direct 

Veteran service, or internal administrative services. EO provides a full complement 

of technical solutions including service planning architecture, security services, service management, hosting, monitoring, business continuity and recovery, application 

management, and managed hosting. Most of the EO FTE that are organizationally 

aligned to SDE will be transferred to SDE for funding purposes. Operational management and functions will not be impacted. This is primarily a change from a 

Franchise Fund to the appropriated OI&T fund without a change in cost. 

The budget reflects a decision to migrate Enterprise Operations staff and data 

centers from the Franchise Fund to the IT appropriation (Net $0/0 FTE change). 

OI&T anticipates a transfer of 599 Enterprise Operations (EO) FTE from VA’s FranVerDate Mar 15 2010 19:02 May 01, 2017 Jkt 000000 PO 00000 Frm 00058 Fmt 6633 Sfmt 6621 Z:\ACTIVE\022316.TXT PAULIN

223q1va16c.eps
55 

chise Fund. This transfer was directed by VA Executive Leadership to improve efficiency and responsiveness of this critical infrastructure component. Sustainment 

was reduced by $151 million due to the transfer and moved into the staffing and 

support services account resulting in the 14% increase. 

Chairman ISAKSON. Well, thank you very much, Mr. Secretary. 

We are delighted to have you here today and appreciate your opening remarks. I will start the questioning, then we will go Republican to Democrat, after we go to the Ranking Member, all the way 

through. 

Your proposal has a unique system for senior executive employment within the Veterans Administration which would create a 

unique pay schedule and disciplinary system under Title 38. As I 

said in my opening remarks, accountability is the single most important thing we must accomplish, in my judgment, on this Committee and within the VA itself. 

Can you detail for the Committee the justification for the proposal and how you believe this solves the accountability problem at 

VA? 

Secretary MCDONALD. Yes, Mr. Chairman. As you know, we run 

a health care business. We run an organization that, if it were a 

company, would be Fortune 6 on the Fortune 500. We compete with 

health care professionals from the best health care systems in the 

country, whether they be medical centers that we are affiliated 

with like Duke Medical Center, or whether they be large health 

care companies like Mayo or Cleveland. 

We believe the best way to treat VA employees is as the health 

care professionals that they are, and the Title 38 provision would 

give us that ability. We could pay them more competitively. Right 

now, our average medical center director is paid, at best, half what 

they can earn in the private sector, and we have lost several recently. We are paying them the best we can with the SES system. 

Separately, we can also recruit and appoint people more quickly 

because Title 38 would give us direct hiring authority. We believe 

that moving to Title 38 for all SES employees in VA would be a 

big step forward and make us competitive with the private sector 

and would improve care for veterans. 

Chairman ISAKSON. In the case of disciplinary action, how does 

Title 38 differ from what is now there? 

Secretary MCDONALD. The Title 38 in the case of disciplinary action would make me the appeal authority, so people would appeal 

to me. So, it would put appellate authority within the Department 

rather than in some external organization that looks across Government. 

Chairman ISAKSON. In a hypothetical example that is really not 

so hypothetical—in the Pennsylvania case that has just been adjudicated on appeal, that would have been appealed to you and not 

to MSPB? 

Secretary MCDONALD. That is correct, sir. 

Chairman ISAKSON. Next, we talked about the 440,000 pending 

appeals at the Veterans Administration. You made a statement in 

a House Committee meeting the other day that the proposals in 

here are really a straw man for something like that. Do you have 

specific proposals in terms of that in this budget proposal that you 

are offering? 

56 

Secretary MCDONALD. Yes, sir. We have offered a specific proposal, but also, as we are talking right now, we have been meeting 

with veterans service organizations, Members of the Committee 

and other members of Congress, and are making progress in getting alignment as to what that proposal should look like. I suspect 

while the proposal we have submitted is a good one, we can make 

even further enhancements to it which could create a greater consensus moving forward. As we have discussed, we expect to have 

all that done by the end of March so we can get something done 

with this. 

Chairman ISAKSON. Are you moving away from the fully developed claim process? 

Secretary MCDONALD. No, sir. We think the fully developed claim 

is a good step on the way to a totally new appeals process. But, 

it does not fundamentally change the process to the degree that we 

think it needs change. 

Chairman ISAKSON. Using the word of the day, which is ‘‘accountability,’’ I think it is important for our veterans to have accountability in the system to make sure if they have an appeal, 

that it is justified and is heard, but make sure also that one veteran or two veterans or a handful of veterans’ appeals do not cause 

other veterans to get a slow response on an appeal that otherwise 

would not be an appeal to begin with. One of the things I have seen 

from talking with Dr. Shulkin and some of the others at the VA, 

there are a handful—and I use ‘‘handful’’ as a reference—of appeals 

that over and over and over again, over a series of years, have still 

been active and in process. Every time one of those takes place, it 

takes time away from a claim that is recently filed by a veteran 

who deserves meritorious treatment in a hasty way. 

I personally am very supportive of us finding a way to give the 

tools necessary to ensure the veteran gets accountability, but also 

have some ability to cut that off so it is not an ongoing process. 

Secretary MCDONALD. Yes, sir, you are right. As you know, 10 

to 11 percent of veterans appeal the decisions. Of those 10 to 11 

percent, it is about 2 percentage points, 2 percent of all veterans 

that, when they appeal, drive multiple appeals, and their appeals 

comprise about 45 percent of all appeals. So, you are right. About 

20 percent of veterans are creating about half of the work. That is 

an unacceptable situation and one that we should resolve to the 

benefit of all veterans. As we have committed in our 2016 end-ofyear outcomes, we would like by the end of this year to be able to 

have a process in place that eventually would lead to 1 year for a 

veteran appeal. 

Chairman ISAKSON. Just one last comment. In your prepared remarks, you said that 10 of the 16 top leaders in the VA are new 

hires that you have brought in, people from hospitals, people from 

the private sector. Dr. Shulkin and Ms. Council, are they two of 

those ten? 

Secretary MCDONALD. Yes, sir, they are. 

Chairman ISAKSON. Well, let me make a comment. If the other 

eight of those ten are doing as good a job as those two are, we are 

going to be in much better shape at the VA, because publicly I 

want to acknowledge Dr. Shulkin’s help in the meetings we have 

been having at the VA to deal with the accountability issue and 

57 

some of the other things going on. They are doing a great job, and 

I appreciate the fact that they have been very responsive to us, as 

Ms. Council has done on the IT situation as well. So, thank you 

very much. 

Secretary MCDONALD. Mr. Chairman, as you know, we have an 

IG nominee who we all think very highly of, I think the Committee 

thinks very highly of. We would love that to get passed on the Senate floor. 

Chairman ISAKSON. For the record, I am meeting individually 

with people that I think need to be met with to try and see if we 

can’t get that to a vote on the floor. We are not there yet, but we 

are making progress. 

Senator Blumenthal? 

Senator BLUMENTHAL. Thanks, Mr. Chairman. 

I want to first just mention the elephant in the room, which is 

the potential hurdles and obstacles to approval of this budget in 

the potential gridlock and paralysis in the budget process overall. 

The VA illustrates to me the urgency of putting aside partisan differences, putting aside extraneous issues, and proceeding to a 

budget regardless of what our colleagues in the House of Representatives may think about the budgeting process and regardless 

of other issues relating to the Supreme Court or any other kinds 

of challenges that we face here. I think that you have come here 

in good faith to argue for some really urgent priorities that must 

be met, and they are commendably a part of this budget. 

Earlier this year, the Hartford VARO reached out to me because 

they were informed that there were no additional hearing dates, 

travel board or teleconference dates for Hartford in the remainder 

of the fiscal year in terms of the appeals process. After my inquiry, 

the BVA additional teleconference date has been added, which I appreciate. But, I think that that experience illustrates the importance of reforming the appeals process. The VSOs have focused on 

it, and I assume you agree it should be a priority. 

Secretary MCDONALD. Yes, sir, absolutely. I also agree on the 

budget. I would tell you that this is my second budget at the VA, 

but I feel better this year than I have ever before about connecting 

our strategies with the budget, with resources, with the legislation 

required, and with the 12 priorities that we have listed for 2016. 

This is more than just a budget. This is the delivering of outcome 

for veterans. We need this budget in order to do that, but we also 

need the legislation and the other things that we have talked about 

as a group. 

Senator BLUMENTHAL. Focusing for the moment on delivery of 

services to women veterans, there is a request for $515.4 million 

for gender-specific health care for women and nearly $5.3 million 

in total care for women, which recognizes the need to consider the 

growing female veteran population in our country and provide care 

that is both welcoming, efficient, and proficient to meet their needs. 

I am still concerned that the culture of the VA and the ability 

to welcome female veterans and provide health care services to 

them in a sensitive and tailored manner may not be keeping pace 

with the number and the needs of those veterans. 

Could you please tell us how you intend to use the requested 

funding for women’s health care to address, frankly, the pervasive 

58 

feeling of many female veterans that the VA remains a male-focused culture and organization? 

Secretary MCDONALD. I am really glad you raise this, Senator 

Blumenthal. This is such an important topic to us. I really think 

this will be one of the seminal issues of transformation that we will 

be held responsible for as people look back years from now. 

As you know, since 2000, the number of women veterans seeking 

VA health care services has doubled, from 160,000 to over 447,000 

in fiscal year 2015. This is a major focus for us. 

We have enhanced care for women. We have designated women’s 

health providers at every site where women access VA health care. 

Currently, 100 percent of our medical centers and 94 percent of our 

community-based outpatient clinics have at least one designated 

women’s health provider. We need to get that to 100 percent. 

We have trained over 2,400 providers in women’s health to ensure that every woman veteran has the opportunity to receive her 

primary care from a women’s health provider. We have women veteran program managers, maternity care coordinators at every 

health care facility. We provide gynecological care, including maternity care and 7 days of newborn care, to all women veterans either 

on-site—that is through 130 health care systems—or through care 

in the community. 

This is really a very important point to us, and we have to continue to make this transition over time, because as you have said, 

it is going to continue. 

Senator BLUMENTHAL. Thank you very much. My time has expired. I have other questions that I may submit for the record, but 

thank you to you and your team for being here today. 

Thank you, Mr. Chairman. 

Chairman ISAKSON. Senator Rounds. 

HON. MIKE ROUNDS, U.S. SENATOR FROM SOUTH DAKOTA 

Senator ROUNDS. Thank you, Mr. Chairman, and let me just 

begin by saying that I have appreciated the bipartisan approach by 

both the Chairman and Ranking Member Blumenthal as we move 

through the different and challenging issues before us, including 

the budget itself. I am optimistic that this Committee will work 

very favorably in moving forward in this particular budget process. 

I have only been here a year, but I have been encouraged by the 

way this group here has worked on these issues. 

One of the major challenges that has hampered the Choice Program has been the VA’s shift of cost for care to the veterans who 

have been utilizing the Choice Program. Veterans are paying far 

more for their care under Choice than they traditionally paid under 

normal VA facility care or non-VA care, typically as a result of deductible and co-pay calculations that are different when they are 

seen in the private sector. 

As you consolidate the care in the community programs, do you 

envision veterans continuing to pay more out-of-pocket to be seen 

in the private sector? 

Secretary MCDONALD. Senator Rounds, it is a great point. We 

would like, when we consolidate care, to go to one payment system, 

one reimbursement system, so that we eliminate the complexity. 

You are right that when the Choice Act was created, veterans were 

59 

forced to pay higher co-pays to use the Choice actual service in 

order to keep the costs down of the total Choice Act. If they use 

a VA service, there is no co-pay. If they use a Choice Act, there is 

a co-pay. So, we do think that change needs to be made. 

David? 

Dr. SHULKIN. Yes, Senator, the primary difference is that the 

way the Choice legislation was written is that in Choice VA is the 

secondary payer. So, a veteran has to use their primary insurance, 

and they have to use their co-pays. 

What we have suggested in our legislative proposals is to make 

VA the primary payer and to consolidate all the care in the community. That would eliminate this disparity that veterans see today. 

Senator ROUNDS. In South Dakota, we continue to hear that 

timely provider payment under the Choice Program is a continuing 

issue. Recently, I heard from a private sector provider that has 

over $3.3 million in payments that have been outstanding for more 

than 90 days. What specific initiatives are you putting in place to 

accomplish your 2016 breakthrough priority of getting 85 percent 

of claims paid within 30 days? It looks to me like you have got 

quite a hill to climb. 

Secretary MCDONALD. First of all, please give us the name of 

that provider. We will go back and make sure they get paid. 

Second, the systemic change we need is to follow the best practices in the private sector, which is to pay the provider based on 

them providing the service, not waiting for the paper documents, 

which has been our past practice. Dr. Shulkin has put that change 

in place. We have another week or so until we actually activate it. 

But, that means providers will get payments virtually as soon as 

they provide the service. 

David? 

Dr. SHULKIN. Yesterday we delivered to the two TPAs a proposal 

for them to sign that would decouple documentation from payment 

so we can make faster payments to providers. 

Senator ROUNDS. I have heard that in my State VHA has made 

the conscious decision to shift certain health care services over to 

the Choice Program and away from VHA facilities. Yesterday, we 

saw a similar story out of Cincinnati that contained allegations of 

services being switched to Choice in the community in order to 

make hospital finances look better. 

Whether that is the case or not, how do you reconcile shifting 

services over to the Choice Program and in the process eliminating 

capability to perform those services when Choice is clearly a temporary program designed to supplement VA care and its authorization expires next year? 

Secretary MCDONALD. The most important thing in making any 

of these decisions is what is best for the veteran. Nothing else 

should be a consideration. Unfortunately—and I am not saying this 

is happening because we have to investigate the allegation you described. Unfortunately, because of the fact that we have got 70 line 

items of budget where we cannot move money from one to the 

other, you may recall last year I had to come to this Committee 

and ask for the ability to move money from the Choice budget that 

was for care in the community to the VA budget that was for care 

60 

in the community. Same purpose, but we had to ask your permission to move that money. 

What we have put in our 2017 budget proposal is a proposal to 

give us flexibility on only 2 percent of our funding so that we can 

move money between accounts—again, with the idea that we have 

got to get the best care for the veteran. 

Senator ROUNDS. Thank you. My time has expired. Thank you, 

Mr. Chairman. 

Chairman ISAKSON. Thank you, Senator Rounds. 

Senator Tester? 

HON. JON TESTER, U.S. SENATOR FROM MONTANA 

Senator TESTER. Thank you, Mr. Chairman. 

I want to go back to Title 38. Could you tell me, Mr. Secretary, 

how many medical center directors were either acting or without 

a position or director? 

Dr. SHULKIN. I would be glad to. Today, Senator, we have 34 

medical centers without a permanent medical center director. I will 

tell you, being responsible for the health care organization, there 

is no way I can assure that we are doing the best for veterans with 

34 open positions. 

Senator TESTER. How many are acting? Or does that include 

acting? 

Dr. SHULKIN. That includes acting. Those are ones that we need 

to fill. 

Senator TESTER. Can you tell me how long it takes you to recruit 

and appoint an M.D., or a P.A. or a nurse right now? 

Dr. SHULKIN. Approximately—they differ a little bit, but I am 

going to say, on average, 6 months? 

Senator TESTER. Six months? OK. Now, if we make the changes 

that you have recommended, how long would it take you to recruit 

and appoint? 

Dr. SHULKIN. Well, I think the change to Title 38 is going to help 

us get more candidates and better candidates. We have many medical centers that, frankly, have had openings for years and years 

because we do not have candidates. So, I think it is going to increase the pool. We have to—one of the Secretary’s 12 priorities is 

to streamline the hiring process, because we have to get to where 

the private sector is. We have to be able to match or beat where 

the private sector is to get the best candidates. 

Secretary MCDONALD. But, the Title 38 recruiting and hiring 

process is more streamlined than the SES process. 

Dr. SHULKIN. Yes. 

Senator TESTER. So, your hope is to get it down to what kind of 

a timeline? 

Secretary MCDONALD. I would like to break it in half. 

Senator TESTER. OK. 

Secretary MCDONALD. I think we can do it. 

Senator TESTER. OK. You put a number of legislative requests 

forward. Is it accurate to say that veterans’ access to care has been 

impeded by the legal vulnerability associated with referring veterans to traditional fee care outside the Federal Acquisition Regulations? 

61 

Dr. SHULKIN. When you say ‘‘legal,’’ the complexity of the system, 

absolutely, that is correct. 

Senator TESTER. OK. I believe we have a bill—maybe not totally 

what you want, but a bill to get that done I think has come out 

of this Committee. Is it accurate to say that the VA’s efforts to improve the quality and delivery of care have been impeded by the 

number of director vacancies? 

Dr. SHULKIN. Yes. 

Secretary MCDONALD. For sure, absolutely. 

Senator TESTER. Is it also fair to say that from a medical personnel standpoint the appeals process has not been working like it 

should? 

Secretary MCDONALD. We would agree with that. 

Senator TESTER. OK. Is it also more important to say that you 

need flexibility in your budget? 

Secretary MCDONALD. Yes, sir, we do. 

Senator TESTER. To move money around. 

In July 2014, Mr. Secretary, you were confirmed by a 97–0 nothing. Nobody in the Senate opposed you. 

Secretary MCDONALD. I am still looking for those three that did 

not vote. 

Senator TESTER. They were probably out campaigning for President. But, at any rate—— 

[Laughter.] 

Senator TESTER. I would just say this: as a Committee—and I 

would be happy to work with the Chairman so it is on a bipartisan 

basis—we need to push the leadership to get these bills to the floor 

to hold this man accountable. We cannot hold him accountable if 

his hands are tied; I really think that it is important—I mean, he 

came from the private sector. Ten of his 16 folks have come from 

the private sector. If we want the VA to work, we have got to put 

our trust there. If he screws up, he is gone. But, the fact is I trust 

the Secretary; I believe that he can get this done. I think we need 

to give him the tools to get that done. It is going to require some 

floor action on these bills with a very limited amount of time for 

floor action. 

If it would take a letter, if it would take phone calls, if it would 

take a group meeting with Senator McConnell, I would be more 

than happy to join you in that. 

The only thing I would say—and this may be parochial in nature, 

but there is an issue with travel pay right now, where the veteran 

used to get travel pay immediately when they came. Now, because 

of people thinking they were going to try to game the system, they 

go to a kiosk. Now it is a month or longer to get their travel pay. 

I am hearing a lot about this. I am not sure that it solves any of 

the problems with pay going to a kiosk because if a guy wants to 

be a crook, he will be a crook on a kiosk just as well. What it is 

doing is it is stopping some of our veterans from being able to get 

the care timely. It may be hard to believe, but a lot of these guys 

need that travel pay and they need it quick. So, if we can do something on that, I would appreciate it. 

Dr. SHULKIN. Senator, we will look into that. That is not an intentional delay, so we need to fix that. 

62 

Senator TESTER. The last thing I would say is—and I attribute 

this mostly to the third-party providers and not to the VA, which 

we have got to get this fixed. My staff just gave me a chart, and 

you can take a look at it: 53 percent of the work that we do is veterans work. It used to be a third. It is 53 percent now. That is not 

happening because things are going smoothly. I think you guys 

know that. We need to get it fixed. I think this Committee needs 

to do its job to help you fix it, and then we need to hold you accountable for that. 

Thank you, Mr. Chairman. 

Chairman ISAKSON. In reference to your comment in the beginning about meeting with Leader McConnell, for your edification 

and information, I appreciate your raising the visibility of those 

bills that we have passed out which have not gotten through the 

Congress yet. We are working on, if you will, an omnibus proposal 

that we hope to, by the end of March, have finished and acted upon 

in the House and the Senate. That is an aggressive game plan, but 

we are trying to get all that done. Sen. Tester, I will take you as 

a volunteer to be on my team, we will make sure we use you to 

help us do that—in a bipartisan way, too. 

Senator TESTER. I would be more than happy. I think that it is 

important for us to hold the agency accountable. I think it is also 

important for us to listen to the people that are at the head of it 

and make sure we give them the tools that they need to be successful and then hold them accountable. 

Thank you. 

Chairman ISAKSON. We have got to hold ourselves accountable. 

Senator TESTER. That is correct. 

Chairman ISAKSON. That may be the biggest problem of all. We 

have got to correct that. 

Senator Moran? 

HON. JERRY MORAN, U.S. SENATOR FROM KANSAS 

Senator MORAN. Mr. Chairman, thank you very much. Mr. Secretary, welcome. Thank you for the telephone conversation that we 

had recently. 

I was interested in what Senator Tester had to say about case 

work. As you and I have talked, that has been a significant fact 

in our life, more veterans with more questions, I guess, and concerns. I appreciate Senator Tester raising that issue. 

Let me talk about a couple of items that are Kansas related. The 

Choice Act provided for a new CBOC in Johnson County, KS. Johnson County is the Kansas side of the Missouri-Kansas line in Kansas City, our fastest-growing part of our State. The requirement, as 

I understand it, is for those proposed medical facility leases to be 

submitted to GSA. Then, the timeframe is seemingly extraordinarily long, like 5 years once the decision is made to begin that 

lease process. 

Is there something that we can do to help speed up this process? 

We have the same issue in Junction City. Junction City is a bedroom community of Fort Riley with lots and lots of veterans. The 

CBOC there is needing to move out of its current facility, and they 

are looking for space, which, to my knowledge, they have not found. 

63 

Could you bring me up to date on both of those. The broader question is: is there something we can do to help speed up the process? 

Secretary MCDONALD. The process does take too long. We have, 

I think—is it 16 or 18 leases right now? We are waiting—16. We 

are waiting for authorization from you all to move forward on. 

Mr. MURRAY. Eighteen. 

Secretary MCDONALD. Eighteen. So, you know, if you could authorize those, we would really appreciate it. 

Senator MORAN. In the case of at least Johnson County that I am 

talking about, it is authorized. 

Secretary MCDONALD. OK. 

Senator MORAN. Then, having been authorized, I am told it is at 

least 5 years before—— 

Secretary MCDONALD. No—well, it should not be. We have 

worked with GSA to streamline that process, but I am happy to— 

we will come over and sit down with your staff and go through a 

streamlined timeline of how long it will take. It should not take 5 

years. 

Senator MORAN. OK. Well, there are two, if we could talk about 

the one in Junction City and the one in Johnson County. 

Mr. Secretary, let me raise a topic of construction of a new hospital in Leavenworth, again, a military community. The strategic 

capital investment plan lists Leavenworth inpatient facility as 

number 13 of the VA’s priority list, but there were no funds requested in fiscal year 2017. What does that mean? What is the 

value of that 13th ranking and no funding? 

Secretary MCDONALD. Well, I think what it demonstrates, Senator, is we need more money in construction. Most of our priority 

projects are seismic projects or projects that deal with human safety. As I showed in my written testimony, we have had catastrophes 

happen because we have not been seismically ready. 

Sixty percent of our buildings are over 50 years old. We would 

love to get down through the total list, but that is going to require 

a disproportionate amount of capital to do that. 

Senator MORAN. In that circumstance, is the VA open to publicprivate partnerships, a local entity that would build the facility and 

then lease it back? Does that speed up the process and help the 

budgetary constraints? 

Secretary MCDONALD. We are. There are actually two different 

processes, both of which we are looking at. One is something we 

already have experience with called ‘‘extended use leasing.’’ This is 

a process where, for example, there is a company called Core that 

built a building on our campus in Menlo Park that we are able to 

rent from them to house homeless veterans. That is the bill I need 

passed for Los Angeles, because I cannot do that in Los Angeles 

right now, and that is where we have the majority of homeless 

veterans. 

There is another process called ‘‘public-private partnership,’’ or 

‘‘P3,’’ which we are currently exploring to move our San Francisco 

campus, which is landlocked and isolated. What we do not know 

yet is how CBO and OMB will score that and whether or not, because it is an extended use program, they will score it as if it were 

a capital project. We are looking into that. We should have an anVerDate Mar 15 2010 19:02 May 01, 2017 Jkt 000000 PO 00000 Frm 00067 Fmt 6633 Sfmt 6601 Z:\ACTIVE\022316.TXT PAULIN
64 

swer in March, and we will be back to you, because if we can do 

P3s, it will unlock a lot of capability for VA. 

Senator MORAN. Maybe we can have that conversation where we 

talk about the CBOCs as well, because I think there is an opportunity for this kind of thing to occur in Kansas. 

My final question is: how does the CBOC issue affect the consolidation, Choice, community care plan? Are CBOCs any less valuable? Is there less emphasis as a result of Choice and consolidation, 

your program? Or—— 

Secretary MCDONALD. No, I do not think so, but I think what it 

does is it speaks to something you and I have talked about before, 

which is when we improved access last year, we did 7.5 million 

more completed health care appointments, that was in large part 

because we added over 2 million square feet of new space. So, every 

time you put a building out there, it creates access, advantages 

that you did not have before. But, what we have to do is we have 

to be more choice-ful—I do not mean a pun in that word, but we 

have to be more choice-ful about where we put them so we make 

sure we are taking advantage of all of our affiliates, like Indian 

Health Service, medical school affiliates, and others, and we are 

putting those only where they are required, being good stewards of 

taxpayer money. 

Senator MORAN. I appreciate this conversation and look forward 

to having a future one. 

Secretary MCDONALD. Me, too, sir. 

Chairman ISAKSON. Senator Brown. 

HON. SHERROD BROWN, U.S. SENATOR FROM OHIO 

Senator BROWN. Thank you, Mr. Chairman. Welcome, Mr. Secretary and all of you. Thanks for your public service to our veterans and to our country, all of you. 

I want to address the very serious allegations Senator Rounds 

mentioned about Cincinnati of mismanagement of the VA medical 

center and leadership of VISN 10. You and I have talked, Mr. Secretary, a number of times for months and months about some of 

these allegations and issues—nepotism, lack of cleanliness, mismanagement, staffing shortages, and fear of whistleblower retaliation. 

First, it is about quality of care, as you have assured us, and I 

know how much you care when you took this job about that. I need 

your assurances first that while this investigation is going on and 

the issues and problems are being fixed, you will ensure that veterans receive better quality and good quality care throughout. I 

know you believe that. I just want your assurances, at the same 

time restoring faith in Cincinnati that veterans and their families 

feel compromised. I am glad that you have agreed to visit that VA 

as soon as our schedules permit both of us to go together. Thank 

you for that. 

I want to talk about whistleblower issues for a moment. For 

more than a year, a number of whistleblowers have talked to my 

Cincinnati office, talked to me personally, talked to a number of 

people in my office and others. The atmosphere is, some workers 

will say, ‘‘toxic’’ where workers fear they will be punished for doing 

their jobs well. When VA employees come forward to voice concerns 

65 

regarding improper medical care or other issues, I am concerned 

that in too many cases VA management has retaliated against 

them. 

So, I want your commitment for a couple of things, Mr. Secretary: one, that no employee in Cincinnati VA who did the right 

thing and advocated for our veterans will be retaliated against for 

their actions; and I want your commitment that if any VA employee is retaliated against for speaking up on behalf of veterans 

and patients, that you will hold those people accountable. 

Secretary MCDONALD. First of all, relative to Cincinnati, as you 

noted, Senator, the investigation is ongoing. The Cincinnati facility 

has been a five-star facility historically in VA, one of our very best. 

I have visited it a couple of times myself over the last 2 years. It 

is an important facility. It has been historically a good facility. We 

need to dig into this and find out whether or not these allegations 

are supported and then take action as quickly as possible to remediate them if they are. 

Relative to whistleblowing, you know, we were the first Department certified by the Office of Special Counsel to have done the 

training on whistleblowing. We take it very seriously. In fact, we 

ask all of our employees to give us negative feedback as well as 

positive feedback so we can change. That is why we are training 

them in things like Lean Six Sigma so they can create change 

themselves. 

We do not tolerate retaliation and will deal with it if we see it. 

We just do not tolerate it, and we work very closely with the Office 

of Special Counsel to make sure whistleblowers are protected, that 

they are given good jobs moving forward, and that people who retaliate are held accountable. 

Senator BROWN. That is what you say, and I believe you, but 

that—— 

Secretary MCDONALD. That is what I say; that is what I do. 

Senator BROWN [continuing]. Is not what some people—apparently some people in Cincinnati that work at the VA have done. So, 

I do want the commitment that, if proven, people who have retaliated against whistleblowers will be held accountable. 

Secretary MCDONALD. They will. Anybody who retaliates against 

a whistleblower will be held accountable. But, again, what we are 

describing here are allegations. 

Senator BROWN. I understand. 

Secretary MCDONALD. Let us do the investigation before we permit people—— 

Senator BROWN. That is why I said—I do not want to convict 

anybody. I did not mention names. I just said, if proven, I just 

wanted the commitment that you just gave me that—— 

Secretary MCDONALD. Yes, just know that we get a lot of whistleblower—— 

Senator BROWN. I understand. I see that. When I was a Member 

of the House, I heard it in Brecksville. I heard it in Wade Park. 

Sometimes it was accurate, sometime it was not. Thank you for 

that. 

Let me talk briefly on—one, I want to echo Secretary McDonald’s 

and Chairman Isakson’s remarks about confirming Mike Missal at 

the IG. That is really important. When Cincinnati—I wrote to the 

66 

VA about Cincinnati. Unfortunately, the letter went to Linda 

Halliday, the Deputy Inspector General, instead of the Inspector 

General. I appreciate all your comments on making that happen. 

Let me just close with a bit about staffing directly connected to 

Senator Rounds’ comments. The report recommended the veterans—the required Section 301 report on staffing recommended 61 

full-time equivalents be hired for the Cincinnati VA to properly 

meet the needs of veterans. There are reports that leadership at 

the Cincinnati VA may actually be abusing it by using it as an excuse to cut staff. 

Can you tell me about any of that specifically now at this point? 

Or is that something you need to share later once you know more? 

Secretary MCDONALD. We immediately sent the Office of Medical 

Inspection to Cincinnati. We do have a preliminary report from 

them, so we can—I am fine with updating you on that now. 

Senator BROWN. OK. 

Dr. SHULKIN. The other thing, Senator, that we did immediately 

was we removed the management authority from the VISN Director away from the Cincinnati VA to make sure that there was no 

ability to influence or to keep people from raising issues. So, we 

want this to be very transparent, and we will be glad, as soon as 

we get this final report, to review that with you. 

Senator BROWN. How long will it take for these—whatever the 

number, up to and including the number 61, if there are 40 or 60 

or 20—how long will it take to bring in and train new providers? 

Dr. SHULKIN. Well, it will depend on the type of providers that 

are there. Obviously, physicians and nurses take longer because of 

their orientation and credentialing period, then staff, front-line 

staff. So, there will be a spectrum along that line. But, the VISN 

and the medical center have been given their budget and do have 

the ability to hire the most critical positions that they need to hire 

right now. 

Senator BROWN. All right. Thank you. 

Chairman ISAKSON. Senator Brown, just so it is clear on the 

record, I consider accountability to apply two ways: employee to supervisor, but supervisor to employee as well. We have got to have 

accountability on both sides, and that is what we are pushing so 

hard for. I appreciate your comment on that. 

Senator Tillis? 

HON. THOM TILLIS, U.S. SENATOR FROM NORTH CAROLINA 

Senator TILLIS. Thank you, Mr. Chair. Thank you all for being 

here. To Secretary McDonald and the folks on the panel, thank you 

so much for the time you have invested coming to my office and 

working with me. 

I just want to emphasize what you have said that is critically important, that of the breakthrough priorities, there is very clearly 

instances where Congress sits in the critical path. If we do not take 

action to move forward on these legislative priorities, then it will 

either impede or prevent completely your ability to achieve the 

goals you have set out. I will continue to mention that and stand 

up for it. 

Ms. Council, I want to talk to you for a minute about IT. It is 

fantastic to have somebody with your professional experience in the 

67 

role that you are in, and I am glad to have you there. Can you give 

me an idea of what your instincts are telling you as you look at 

this enormous IT base? You and I have talked about application 

portfolio, which we can talk in acronyms and most people would 

think it was a second language. Can you tell me what your gut 

tells you the IT platform looks like 5 years from now versus today 

in terms of off-the-shelf solutions, integrated platforms, those sorts 

of things that I think are, at least according to the Secretary and 

others, huge enablers to what you all are trying to accomplish? 

Ms. COUNCIL. Senator Tillis, it is great to talk to you as well. I 

will not use any acronyms this time. 

As we sort of look out into the future, one of the things that has 

become very clear, not just on intuition but on fact, is that we have 

a very complex architecture and a variety of different things in our 

midst. So, figuring out how to manage those today and move off of 

them toward the future is critical. 

One of the critical areas that I think that will look very different 

in the future is how we manage and use data and how we leverage 

that data in support of the veteran. I believe we have a prime opportunity with putting in a data management function, but putting 

in something that is very different than anyone has seen at this 

point that will move us forward to have much more agility related 

to our operations, related to what the veteran will need, increasing 

our ability to be much more mobile, have mobility being used by 

the veteran and our access to information as well as our ability to 

speak and engage with them. 

I think also when we look at our infrastructure, having a much 

more solid supply chain capability, a financial system that will enable much more visibility into an environment, but also ensuring 

that we have some best of breed capabilities wrapped around our 

health care as well as in our benefits areas. 

Senator TILLIS. Well, one thing—and I want to try and get a lot 

in in the last couple of minutes, but one thing I would really like 

to see from you all over time that makes sense, not out of order 

for all the things you need to do to transform the IT operation, is 

something that would give me some sense that these duplicative or 

redundant platforms that are used out in the VISNs are consolidated when they make sense. There are very clear patterns that I 

can view when I take a look at these transition plans, and I would 

like to see that so I know we are making the organizational 

changes and the systems changes to make a lot of these things that 

are falling through the cracks and probably the root cause of a lot 

of the problems that we have. I appreciate the opportunity to 

maybe get briefed with you once you have gotten your legs there. 

I appreciate it. 

I want to go into a lightning round real quick because I want to 

try to stick to my time allotment. 

First, I just want to echo the sentiments here that we need to 

confirm the IG and do everything that I can to get the Inspector 

General there. It is a very vital role. We need somebody in a permanent position. 

Mr. McDonald, this organization chart seems to me to be an optimized state. I mean, it is a pyramid. It looks like you have got the 

right distribution, but today it seems to me like it is an obelisk. 

68 

One thing that we really have not talked about here is the organizational change, and over time, unless you have data here, I would 

like to find out what we are doing in the middle to reorganize and 

either eliminate those resources or free up the resources to provide 

care out in the communities. 

Can you give me some idea—we have not talked much about that 

track. Can you give me some idea of what that looks like? 

Secretary MCDONALD. Well, the middle is the most important 

part, as you well know, of any organization. Number 1, training. 

We are training the leadership team. That training is now cascading through the organization. Twelve thousand senior leaders 

will have been trained. We are training leadership. We are training 

process mapping. We are training Lean Six Sigma, values, mission, 

all the important things. Three days of training. 

Number 2 is structure, spans and layers. We have to reduce the 

number of spans and reduce the number of layers. 

Senator TILLIS. OK. 

Secretary MCDONALD. We talked about moving from 21 VISNs to 

18. That has already shown savings. That was in my oral testimony. But, the fact that we have so many open positions is an opportunity to reduce even more. 

So, with every open position, we really question, David and I 

question, and Sloan, whether or not we should fill it. We want to 

reduce spans, we want to reduce layers, and we can share that 

plan with you next time we—— 

Senator TILLIS. Thank you. I would like that. It is just because 

my time is short that I am cutting you off. 

Secretary MCDONALD. Yes, I see. 

Senator TILLIS. I think seeing a measurable—instinctively, this 

organization looks like it is heavy in the middle, and with that 

comes cost and complexity and breakdowns and handoffs. I would 

like to see what that transformation looks like over time, both in 

terms of its structure and in terms of the people. To your point, 

many of them may be open, so it just means you no longer have 

a need for that position. I think that would be helpful so that people understand there is an organizational transformation that is 

going on. 

My last thing, just to follow up. When a veteran calls for help— 

let us say it is a distress call for a veteran who may be worried 

that they are thinking about suicide. How are these calls tracked? 

In other words, if I get reports, as I have in North Carolina recently, that a veteran called and was told to call back, how can I 

track that down; either make sure that person has been trained 

and has not done their job, therefore they should be fired, or that 

their supervisor has not gotten them the appropriate training to 

make sure that that is never an appropriate disposition, if, in fact, 

it is happening? What I want to do is at least go in and be 

proactive and say maybe I do not have the facts straight based on 

what has been reported on the ground. But, if those facts are right, 

then I want to go after that person for doing the wrong thing for 

a vet. I would like your advice on that, either in the Committee or 

afterwards. 

69 

Secretary MCDONALD. Well, it is a very complex issue, so let me 

give you a headline, and then we will come over and talk about our 

Veterans Crisis Line. 

As you know, one of our priorities for this year is to fix the outreach to veterans and the Veterans Crisis Line. When all of us 

came, new people, to this organization, what we discovered was the 

Veterans Crisis Line, a recent IG report which was written starting 

on an investigation in May 2014, so before I was confirmed, found 

that we had a third party that we had contracted with that was 

using voicemail. Well, you do not use voicemail for a crisis line. 

We have put new leaders in place. We hired a person with experience on Philadelphia 311. They have come in. We have got new 

technology in place, new training in place. But, we have got to get 

out of the potential for a veteran being put on hold, having to call 

a different number. 

We still have some medical centers—and we are trying to discover which those are and then eradicate them—where if they call 

the medical center and there is an emergency, it says, ‘‘Please call 

this number,’’ rather than immediately shifting that call. We are 

trying to identify where those are and then shift the call automatically rather than having them call back. 

So, this is a work in progress. We are happy to brief you on it. 

It is taking us longer than we would like. Yet, it is one of our goals 

for this year, and we do need the budget to do it. 

Chairman ISAKSON. Thank you, Senator Tillis. 

Senator Sullivan? 

HON. DAN SULLIVAN, U.S. SENATOR FROM ALASKA 

Senator SULLIVAN. Thank you, Mr. Chairman. I appreciate the 

witnesses’ focus on these very important issue. Mr. Secretary, good 

to see you again. 

Dr. Shulkin, I wanted to follow up on a couple things. Dr. 

Shulkin, I sent you a letter dated January 4, 2016. This is on the 

ongoing issue. It is a bit of a minor issue in some ways, but it is 

a huge issue also. I think you and I have seen this—we have been 

talking about it for a while now, about veterans who are hounded 

by collection agencies for unpaid bills where the services were approved by the VA and now somehow our veterans are getting saddled with that. The letter had a number of—actually, pages of 

cases that last time we spoke—last time you testified, you mentioned to me to get you those specific examples. I did. Can you give 

me an update on where we are on that? This is something that I 

think we should just nip in the bud, kill. I mean, it is outrageous 

that we have vets going through that kind of stress. 

Dr. SHULKIN. I absolutely agree, and I heard this directly from 

you and from veterans when we were together in Alaska as well. 

So, this is a short-term problem and a little bit longer-term problem. Fortunately, I think we have solutions for both. 

The short-term issue, we do not want veterans put in the middle, 

and so we have established a toll-free number—I wish I had the 

number memorized, but I will get it to your office—where if a veteran lets us know about that situation, we will intervene immediately. We have done over 400 interventions in the last 3 weeks 

since we put that number up. 

70 

Senator SULLIVAN. Great. Thank you. 

Dr. SHULKIN. We want to know from all your offices because we 

want to help, and—— 

Senator SULLIVAN. Is there something legislatively we need to do 

to fix this at all? 

Dr. SHULKIN. No. 

Senator SULLIVAN. Just let them know that if that is an issue, 

they should call you guys, and you will take care of it. 

Dr. SHULKIN. What has happened is because we have had a problem in paying on time, the veteran has been put in the middle, and 

those are the ones that we want to stop. Right before you came in, 

we talked about we now actually have delivered to the TPAs yesterday the contract for them to sign that will decouple medical documentation from payment so we can get much better at making 

payments and keep these situations from happening. 

Senator SULLIVAN. OK. If you can follow up on the specific ones 

I have in that letter—— 

Dr. SHULKIN. Absolutely. 

Senator SULLIVAN [continuing]. That would be very useful. 

Dr. SHULKIN. Yes. 

Senator SULLIVAN. I wanted to next go to the issue with regard 

to the appeals process. Mr. Secretary, I noted that the budget certainly focuses on this. It is an issue that—I know, you know the 

numbers, but 400,000 veterans have appeals pending as of January 

2016; 80,000 of those are older than 5 years old; 5,000 of those are 

older than 10 years old. I put forward a bill, S. 2473, with very 

strong bipartisan support on this Committee. I will not go through 

all the elements of it, but we certainly want to work with you. I 

think my staff has been working with your staff. I think you are 

supportive of the bill. 

Could you talk a little bit about how we get our arms around this 

appeals issue? Because it does relate, of course, to the backlog 

issue, and what we do not want to have happen is alleviate the 

backlog, then have the appeals become the problem. We think 

there are some good things in the bill that a number of us have 

cosponsored, but I would like your view on that, particularly because you do seem to be focused on it in the budget. 

Secretary MCDONALD. We do think moving forward with the fully 

developed appeals process makes sense. We are supportive of that. 

But, we do not think it goes far enough to get to what we think 

is a breakthrough—one of our 12 breakthrough objectives, which is 

to be able to decide an appeal in a year. 

Senator SULLIVAN. Yes. 

Secretary MCDONALD. To do that, what we put together here in 

this budget is a plan where we add more people now in the short 

term in order to knock the backlog down as much as we can, but 

at the same time we redesign the appeal law, which is over 80 

years old, so that we can get to that point later where we deal with 

each appeal within a year. That will actually save us money. That 

will save the Government money and save taxpayers money. 

To do that, we are going to have to deal with the fact, as I said 

earlier, that there is only a small group of veterans that are gumming up the system for everyone else. Ten to 11 percent of veterans 

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peals. Some have appealed 25 times, 50 times. The majority of 

those appealing, the majority, are already receiving some form of 

compensation—maybe the wrong amount, but they are already receiving some form of disability compensation. Many of them who 

are appealing are already rated 100 percent disabled. 

So, you know, you want to get to the point where you can freeze 

the Form 9, as we call it, and cause the person to have to resubmit 

rather than having the same person appeal over and over and over 

again, recognizing that there is no recourse that we have to stop 

them from doing that. 

Senator SULLIVAN. OK. We would like to work with you. I appreciate that update and how you are laying that out more strategically. We will continue to work with your staff on S. 2473, which 

we think is—it is a pilot program. You may have seen the legislation. We think that it offers a good opportunity, similar to the pilot 

program that the VA is instituting in Alaska. 

Mr. Chairman, I will just ask, via posthearing questions for the 

record, an update on where we are on the Alaska pilot program as 

well. 

Senator SULLIVAN. Thank you, Mr. Chairman. 

Chairman ISAKSON. Senator Cassidy. 

HON. BILL CASSIDY, U.S. SENATOR FROM LOUISIANA 

Senator CASSIDY. Thank you. Mr. Secretary, thank you for being 

here. I have kind of a smattering of questions all over the place. 

What is the VA currently paying for the cost of hepatitis C treatment, for a regimen of hepatitis C treatment? 

Dr. SHULKIN. Less than we were. 

Senator CASSIDY. I got that. 

Dr. SHULKIN. Our drug pricing is proprietary, so, unfortunately, 

I cannot say exactly what it is. I will tell you that it is by far the 

best on the market. That is why it is proprietary. 

Secretary MCDONALD. We would be happy to tell you privately. 

Senator CASSIDY. OK. I was just thinking about it. If $54,000 is 

what the latest regimen costs list and you are averaging 25 to 30 

percent less, it seems like we should be able to treat more veterans 

for the $1.5 billion that we are giving if, ballpark, you are paying 

$30,000 per. It seems like we should be treating 50,000 veterans 

as opposed to 30,000 just to—— 

Secretary MCDONALD. That is exactly the idea. We had a 5-year 

plan, and we are now looking at, with lower costs, how do we compress that plan forward and get everyone treated. 

Senator CASSIDY. So, the $1.5 billion you mentioned, and I think 

35,000 plan to be treated, actually you hope that is elastic on the 

up side. 

Dr. SHULKIN. There is no doubt that is the case. Thirty-five thousand was what we submitted in the budget. We believe we can 

treat many more now. 

Senator CASSIDY. I see. Thank you. 

Second, in this new regimen of folks, you know, having a new 

pay scale, government benefits are typically more generous than 

private sector benefits. So, if you increase—and I do not know if 

that is true for executive compensation. 

Dr. SHULKIN. It is not. 

72 

Secretary MCDONALD. I would argue that. 

Senator CASSIDY. No, no. I am talking about retirement benefits. 

I am not talking about—so the retirement benefits would be roughly equivalent as well. 

Dr. SHULKIN. Yes, sir. 

Senator CASSIDY. OK. So, there is not a tail on this that is going 

to come back and bite us that would be greater than we would otherwise anticipate. 

Dr. SHULKIN. No, sir. 

Secretary MCDONALD. No, sir. 

Senator CASSIDY. OK. By the way, just to be sure, clearly when 

industry decides to downsize, a lot of middle management and top 

management also goes. But, obviously, our current civil service restricts the ability to release folks even when they are no longer 

needed. It is great for the individual. It is terrible for the taxpayer 

and, arguably, bad for the veteran. Under this new authority, if 

you downsize, if we no longer need this facility, for example, can 

you immediately release the person without having to go through 

a complicated process? 

Secretary MCDONALD. Title 38 gives us much more flexibility to 

do that. 

Senator CASSIDY. Much more flexibility. Would it be as flexible 

as the private sector or—— 

Secretary MCDONALD. Virtually as flexible as the private sector. 

I am trying to think. David? 

Dr. SHULKIN. The private sector differs. Some people have extended contracts. Other are at will. Title 38 is going to be somewhere in between. 

Senator CASSIDY. I get it. OK. 

Now, you mentioned in your testimony regarding closing unsustainable facilities, and we are actually interested in this, and we 

sent a poorly worded request and now we have a better worded request trying to figure out, you know, where these facilities are. You 

attempted to close one in Massachusetts, as you mentioned, but 

you ran into environmental issues. I think I have heard you say it 

before, but just for the record, tell me, if you have all these vacant 

and underutilized facilities, what are the three top obstacles in 

closing them, may I ask? 

Secretary MCDONALD. Number 1 would be congressional opposition, and congressional opposition born by perhaps veteran opposition. I mean, if you are a veteran and the hospital where you go 

is in a remote area and that hospital only serves five patients a 

day, it obviously is very expensive to run a hospital serving five patients a day. But, if you are one of the patients being served, you 

obviously want it to stay open. 

Senator CASSIDY. You mentioned, though, that you have 370 facilities which are either fully vacant or less than 50 percent occupied, which presumably would not have to be completely shut down 

but, rather, could be, OK, this wing we are no longer using sort of 

thing. Of those that are fully vacant, what is the obstacle to closing 

those? 

Secretary MCDONALD. Again, congressional opposition—— 

Senator CASSIDY. Even for something fully vacant? 

73 

Secretary MCDONALD. Yes, sir. Veteran opposition. Some are on 

the historic register of buildings because, remember, 60 percent of 

our buildings are over 50 years old, so we have to come up with 

an alternate use for those historic structures unless there is some 

way to obviate that law or—— 

Senator CASSIDY. Now, let me ask, that could include just boarding up and putting a fence around it, I presume? 

Secretary MCDONALD. Yes, sir. 

Senator CASSIDY. I am just saying that for the taxpayer, I mean, we are running this incredible deficit. We have got $26 million that 

is not being used for patient care, but which is basically being used 

to not mothball buildings which should be mothballed. 

Secretary MCDONALD. Yes. 

Senator CASSIDY. I would be an advocate for just putting the 

fence around it until, you know, something could be done, it could 

be sold or developed or something. 

Any other reasons? I am sorry I interrupted you. 

Secretary MCDONALD. No. Those are the primary reasons. 

Senator CASSIDY. OK. Downsizing from 50 percent use to, you 

know, closing off a wing. What is the obstacle there? 

Secretary MCDONALD. Again, it depends on the historic structure 

of the building and what it is used for. 

Dr. SHULKIN. Yes, we do close off wings in bigger buildings, but 

they still are very expensive for us to maintain. You still have to 

maintain the pipes and the heating and other types of things. So, 

what we normally refer to is the 10 or 11 million square feet that 

costs us the $25 or $26 million a year. 

I think in some cases we are being shortsighted in not putting 

in the capital investments to make the upgrades. When 50 percent 

of our buildings—or 60 percent of our buildings are more than 50 

years old, you know that we are maintaining systems that are very, 

very expensive to maintain that, using today’s technology, we 

would be able to do a much better job by investing some money 

right now. 

Senator CASSIDY. Well, typically, when they rebuild a new hospital, they tear it down because the code is so—you get grandfathered in until you break a wall, and then you have got to institute the whole code. I could see it would also be more cost-effective 

just to cut your losses. 

I yield back. Thank you. 

Chairman ISAKSON. Thank you, Senator Cassidy. 

Senator Boozman? 

HON. JOHN BOOZMAN, U.S. SENATOR FROM ARKANSAS 

Senator BOOZMAN. Thank you, Mr. Chairman. Thank you all for 

being here, and we do appreciate your hard work. Also, I very 

much appreciate the ability to get in touch with you and you all 

being very accessible. 

You mentioned several accomplishments that you all have made, 

rightfully so, and I think that is one of those that people do not 

think about, but the accessibility really is important to Members 

of Congress. 

In going along with that, you also said that the systemic problems could not be fixed overnight. Can you talk a little bit about 

74 

some of the biggest obstacles that you face in that regard? Is there 

need for additional legislation to help you in that regard? 

Secretary MCDONALD. Senator Boozman, thank you so much for 

the question, and thank you for the time we spent together. To me, 

job one of any leader is to get the right leadership team in place. 

Frankly, it has taken me too long to get 10 of the 16 leaders in 

place since I came on board. I wish the nomination and confirmation process were more quick, which we have talked about the IG 

as an example of that. 

I will tell you also, within the organization, getting new leaders 

in place is job one, and that is why we have recommended taking 

the SESs from Title 5 to Title 38. We are in the process of revamping the recruiting process as well. But, for me, that is job one. We 

have got to get the right leaders in place. 

Senator BOOZMAN. The latest decision by the Merit Systems Protection Board overturned disciplinary action. I think we have a situation now where they have overturned more than they have 

upheld. 

Secretary MCDONALD. They are batting a thousand. They have 

overturned every one. 

Senator BOOZMAN. Which, you know, is sad. You were blessed 

and worked hard and got in a situation where you headed one of 

the biggest, most respected corporations in America. When we visited, I think you pointed out that if the VA were a business, it 

would be the sixth largest in the country. 

Secretary MCDONALD. Yes, sir, that is correct. 

Senator BOOZMAN. Can you talk a little bit about how impossible 

it is to run an efficient entity where you simply do not have the 

ability to discipline people when they need to be disciplined? With 

that size, the reality is that there are going to be situations where 

people need to be disciplined, need to be held accountable. So, 

please talk to us a little bit about how we can help you in that regard to see if we can get this straight. 

Secretary MCDONALD. I will start with the last question first. We 

think the right approach is this proposal that we are all working 

on together, the White House and Congress—— 

Senator BOOZMAN. As far as legislation. 

Secretary MCDONALD [continuing]. On going from Title 5 to Title 

38 for the SES employees. As I was sharing with the Chairman— 

I think we talked about this when we were together—we have 

worked hard to connect performance with outcome. I talked in my 

testimony about how bonuses and rewards are down in the VA. We 

have a ranking of our—— 

Senator BOOZMAN. So, the old days of just handing out a check 

are over. 

Secretary MCDONALD. Over. 

Senator BOOZMAN. Good. 

Secretary MCDONALD. The ranking of our performance by performance level is, I would argue, best-in-Government and fully 

equal to best in the private sector. So, for example, the top ranking, 

one, which would be considered the most outstanding, in 2012 over 

25 percent of the people were rated that way. Today, it is around 

10 percent. The steps that we are taking are giving people a good 

knowledge of what they have to accomplish, holding them responVerDate Mar 15 2010 19:02 May 01, 2017 Jkt 000000 PO 00000 Frm 00078 Fmt 6633 Sfmt 6601 Z:\ACTIVE\022316.TXT PAULIN
75 

sible for doing that, then making the reward match that. That is 

part of the training that we are doing. This Leaders Developing 

Leaders training is all about that, accountability and responsibility. 

But, we think, again, changing the SESs from Title 5 to Title 38 

would be a big help. 

Senator BOOZMAN. Right. That is so important. 

You mentioned the VetLink program. I think about 3 percent 

were dissatisfied, which, again, that is a low number. What do we 

do about the 3 percent? How do we follow up on that? 

Secretary MCDONALD. Just in general, we are putting in place a 

standard veteran satisfaction measure across the enterprise, and 

this will be the first time ever that VA has had this, believe it or 

not. We will follow up with all the veterans who demonstrate some 

level of dissatisfaction by getting the verbatim comments and then 

acting to remediate what their verbatim comments are. That is 

what we are trying to do with VetLink, is to make sure we take 

those comments in. Then, the medical center director has got to 

react to them and make changes right on the spot. 

Senator BOOZMAN. Very good. Well, again, thank you for being 

here. 

Secretary MCDONALD. Thank you. 

Senator BOOZMAN. I appreciate your service. 

Thank you, Mr. Chairman. 

Chairman ISAKSON. Well, thank you, Senator Boozman, and 

thank you for bringing up the part about the accountability. Earlier 

in the hearing, the Secretary in his testimony addressed that subject and a number of Members have as well. I think the fact that 

you, Secretary McDonald, independently brought that up as your 

first comment—we are in a situation where you have got a toolbox 

that does not have all the tools you need in it to really run the 

agency the way you would like to and the way it should be. I commend you on the things that you have done, but let us stick to our 

goal of by the end of March getting a new toolbox and giving you 

the tools that you need to have accountability as a mechanism that 

works in the VA. 

Thank you, Senator Boozman. Thank you, Mr. Secretary. 

[The posthearing questions to Secretary McDonald follows:] 

RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. JOHNNY ISAKSON TO

U.S. DEPARTMENT OF VETERANS AFFAIRS

VETERANS HEALTH ADMINISTRATION

Question 1. The Secretary testified that the Veterans Health Administration 

(VHA) is looking to expand capacity by ‘‘focusing on staffing, space, productivity, 

and VA Community Care.’’ Specifically, he noted the Access Stand Down VHA held 

last fall to review and schedule consults that were open more than 30 days, hired 

more than 41,000 health staff, the activation of more than 2.2 million square feet 

of space, a nine percent increase in physicians’ Relative Value Units, and 2.4 million 

appointments in the community. 

A. What other improvements has VA reviewed that would increase access, such 

as night and weekend hours for certain clinics; extending the hours of the operating 

rooms to match the private sector; or increasing a physician’s panel size to also 

match the private sector? 

Response. The Department of Veterans Affairs (VA) is committed to providing 

timely access to Veterans as determined by their clinical needs. We strive for all 

Veterans to have safe, high-quality, personalized, and timely care wherever they receive their health services. VA has made progress in improving appointment availability. VA is currently completing more than one in five of its patients’ appointVerDate Mar 15 2010 19:02 May 01, 2017 Jkt 000000 PO 00000 Frm 00079 Fmt 6633 Sfmt 6621 Z:\ACTIVE\022316.TXT PAULIN
76 

ment requests on a same-day basis. Additionally, we are making strides to reduce 

the number of Veterans waiting longer than 30 days by ensuring that all clinic management teams have the processes, structure, and resources to make real-time adjustments to address the needs of their specific population. 

As part of a large-scale and immediate effort to assess the urgent health care 

needs of Veterans, VA conducted a second ‘‘Access Stand Down’’ on February 27, 

2016. The nationwide, one-day event resulted in VA reviewing the records of more 

than 80,000 Veterans to get those waiting for urgent care off wait lists. Newly released results of the Access Stand Down show that 93 percent of Veterans waiting 

for urgent care have been contacted, with many receiving earlier appointments. VA’s 

ability to meet the primary and urgent health care needs of our Veterans is a priority for us, and is why we established MyVA, which focuses all that we do around 

our Veterans. 

Nationally, VA completed more than 57.36 million appointments from March 1, 

2015, through February 29, 2016. This represents an increase of 1.6 million more 

appointments than were completed during the same time period in 2014/2015. VA 

completed 96.46 percent of appointments in February 2016 within 30 days of clinically indicated or Veteran’s preferred date. VA increased its total clinical work (direct patient care) by 10 percent over the last 2 years as measured by private sector 

standards (relative value units). This increase translates to roughly 20 million additional provider hours of care for our Veterans. VA is also working to increase clinical staff, add space, and locations in areas where demand is increasing and extending clinic hours into nights and weekends, all of which have helped increase access 

to care even as demand for services increases. 

Additionally, VHA’s new initiative, MyVA Access, represents a major shift for VA 

by putting Veterans more in control of how they receive their health care. MyVA 

Access is a declaration from VHA employees to the Veterans they care for; it is a 

call to action and the reaffirmation of the core mission to provide quality care to 

Veterans, and to offer that care as soon as possible to Veterans how and where they 

desire to receive that care. MyVA Access ensures that the entire VA health care system is engaged in the transformation of VA into a Veteran-centered service organization, incorporating aspirational goals such as same-day access to mental health 

and primary care services for Veterans when it is medically necessary. 

B. Of the more than 41,000 employees VA hired, how many of those positions are 

funded through section 801 of the Veterans Access, Choice, and Accountability Act 

of 2014? 

Response. As of March 31, 2016, VHA had approximately 10,850 new full-time 

employees (FTEs) on board that are funded by Section 801 of VACAA hires, exceeding the hiring goal of 10,682 FTE. VHA continues to track VACAA onboards for financial reporting, but new hires for VACAA ceased at the end of pay period 26 on 

January 9, 2016. 

Question 2. When VA submits the President’s request for medical care accounts, 

VA frequently revises the amount for the current fiscal year request that was appropriated in advance. The process has been referred to as VA’s ‘‘second bite of the 

apple.’’ According to testimony at the Committee’s budget hearing, the Paralyzed 

Veterans of America (PVA) indicated they questioned VA whether the requested 

level for fiscal year (FY) 2018 would be sufficient to meet their needs. According to 

PVA, in response, VA ‘‘half-heartedly admitted that they do not believe it is going 

to be sufficient either.’’ PVA indicated that, since Congress has only revised the advanced appropriation amount twice, ‘‘the track record does not lend itself to underestimating now to get it corrected later.’’ 

A. What is VA doing to ensure the advanced appropriation request VA submits 

to Congress reflects a more accurate amount going forward? 

Response. The Advance Appropriation allows VA health care to avoid the financial 

limitations of a Continuing Resolution or a lapse in funds that could lead to a shutdown of VA health care operations. Funding of the Advance Appropriation establishes an initial VA health care budget to continue operations until the full appropriation amount is enacted. The updated President’s Budget request for adjustments 

to the Advance Appropriation (the ‘‘second bite’’) is intended for the administration 

to fully evaluate the resource requirements of the VA in context of the entire Federal budget. Estimates can also vary significantly in the year between requests 

based on updates to the Enrollee Health Care Projection Model, newly authorized 

benefits, emerging requirements such as Hepatitis C drugs, recommendations for 

changes generated by the Commission on Care, and sequestration limits. 

B. In the budget justification, VA indicated that the increases from FY 2017 to 

FY 2018 are ‘‘offset by partial decreases from the 2017 levels for other programs.’’ 

77 

Please list all programs that will offset the increase for FY 2018 and detail the reasons for the decreases in those programs. 

Response. The $1.386 billion dollar 2018 Advance Appropriation increase over the 

2017 appropriation request is due to the following factors: 

• Increases in the initial 2018 estimate are offset by partial decreases from the 

2017 levels for other programs, including health care infrastructure enhancements, 

Hepatitis C treatment, and programs to end Veterans Homelessness (see below 

‘‘Programmatic Decreases, 2017 Revised Request vs. 2018 Advance Appropriation’’). 

• Care in the Community is maintained equally to the 2016 Medical Services operating budget level. 

• The 2017 level of core Medical Services FTE is sustained into 2018. The 2018 

President’s Budget will revisit the continuing costs of sustaining the new VACAA 

hires. 

• Long-Term Services and Supports increase by $607 million, driven largely by 

cost estimates provided by the Enrollee Health Care Projection Model and projected 

State Nursing Home growth. 

• CHAMPVA, Caregivers and other health care programs increase by $259 million to fund annual increases in workload. 

PROGRAMMATIC DECREASES

2017 REVISED REQUEST VS. 2018 ADVANCE APPROPRIATION

(Dollars in Thousands) 

Many of the reductions were the result of the funding level available under the 

budget agreement, with affordability across all programs being a key driver. For example, the reduction of Hepatitis C funding from fiscal year (FY) 2017 to FY 2018 

is not based on reduced demand but on affordability within VA’s Advance Appropriation request ‘‘top line’’ funding level. Estimates for these programs will be reevaluated during the 2018 budget cycle. 

Question 3. The budget justification indicates a future goal of VHA’s is to create 

a Transitional Care Program Office within VHA to concentrate management of transition care programs. 

A. Please describe in detail the duties of this office and provide an organizational 

chart of the office and where it would be placed in VHA’s organizational chart. 

Response. Care Management and Social Work Services (CM/SWS) proposes realigning the Federal Recovery Coordination Program (FRCP) back under the Transition and Care Management (TCM), CM/SWS, to integrate care coordination services 

under one leadership and create a synergy to further enhance care coordination 

services for Servicemembers and Veterans (SM/V) and their families. The Program 

Office will not only centralize care coordination services, but also support an interprofessional model of transitional care, which includes, but is not limited to, nurses, 

physicians, pharmacists, mental health clinicians, and social workers. 

VA operates a number of case management and care coordination programs that 

provide assistance to transitioning SM/V, including Transition and Care Management Services and the FRCP. These two programs assist wounded SM/V to navigate 

the recovery care continuum. 

Transition and Care Management Services leads two national programs: 


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78 

1) The VA Liaison Program consists of 43 VA Liaisons for Health Care at 21 Military Treatment Facilities (MTF) to facilitate ongoing VA health care for ill and injured Servicemembers transitioning from Department of Defense (DOD) to VA. 

Since the inception of the program, VA Liaisons for Healthcare have coordinated 

over 70,000 transitions. In FY 2015, VA Liaisons for Healthcare coordinated 11,221 

transitions; provided 22,108 professional consultations and 2,543 briefings; and ensured that Servicemembers transitioning from DOD to VA received timely access to 

care by ensuring that 100 percent of Servicemembers who wanted VA health care 

had an initial VA appointment scheduled at the VA health care facility of their 

choice; and ensured that 89 percent had appointments scheduled prior to leaving the 

MTF. 

2) The TCM Program consists of a TCM team at each VA Medical Center to provide comprehensive and specialized transition assistance and ongoing case management services to Post-9/11 Veterans as they reintegrate into their home communities and into VA health care. VA has approximately 400 TCM case managers nationwide providing case management services to almost 35,000 Veterans. In FY 

2015, 90 percent of these Veterans were contacted regarding their individualized 

care management plan, resulting in over 367,000 contacts. 

The FRCP was developed as a joint program by VA and DOD, in January 2008, 

to provide care coordination services to SM/V who were severely wounded, ill, or injured after September 11, 2001. The program utilizes Federal Recovery Coordinators 

(FRCs), either social workers or nurses funded by VA Central Office, to monitor and 

coordinate clinical services, including facilitating and coordinating medical appointments; and non-clinical services, such as providing assistance in obtaining financial 

benefits or special accommodations needed by program enrollees and their families. 

FRCs currently serve approximately 400 SM/Vs, of which 27 percent also have a VA 

Lead Coordinator (i.e., TCM Case Manager). 

Aligning the two entities providing care coordination services under one leadership would integrate the two programs and create a synergy to further enhance care 

coordination services for SM/V and their families. 

B. Please provide the Committee with the expected funding level for the office, 

the number of full-time equivalent employees (FTE) to include a break out of number of title 5 employees and number of title 38 employees. 

Response. The VHA Transitional Care Program Office is an aspirational project 

for the future, with most (if not all) of its funding needs derived from current resources. However, there is no specific resource or budget request for it at this time. 

Question 4. The number of unique patients VHA estimates will receive mental 

health care from a non-VA provider increased by 17 percent above the FY 2016 current estimated level and by 50 percent above the FY 2017 advanced appropriations. 

However, the number of unique patients is expected to decrease by 9 percent in FY 

2018. In addition, the number of unique mental health patients receiving care in 

the community shows significant increases between the FY 2017 budget’s estimated 

level and the FY 2018 advanced appropriations estimate. 

A. Please explain, in detail, the reason for the significant changes in the estimated number of unique patients accessing care in the community. 

Response. In projecting future Veteran demand for VA health care, VA uses the 

Enrollee Health Care Projection Model to account for the unique characteristics of 

the Veteran population, VA health care system, environmental factors impacting 

Veteran enrollment, and use of VA health care services. Growth in expenditure requirements to provide care to enrolled Veterans has been primarily driven by health 

care trends, the most significant of which is medical inflation. Health care trends 

are key drivers of annual cost increases for all health care providers—Medicare, 

Medicaid, commercial providers, and the VA health care system. 

In 2015, the VACAA significantly expanded access to VA health care for enrolled 

Veterans. VACAA increased VA’s in-house capacity by funding medical FTE growth 

in VA facilities, expanded eligibility for care in the community for enrollees residing 

more than 40 miles from a VA facility, and assured access to care within 30 days. 

This additional capacity facilitated an increase in current enrollees’ reliance on VA 

health care over the level expected in 2015. At the end of FY 2015, the VA Budget 

and Choice Improvement Act further expanded eligibility for care in the community 

paid for by VA. As a result, enrollee reliance is expected to continue to increase beyond what would have been expected in the pre-VACAA environment. This expected 

increase in enrollee reliance significantly increased the projected resources required 

to provide care to enrolled Veterans in 2017 over the 2017 Advanced Appropriation 

level. 

Additionally, the number of Veterans who received mental health care from VA 

has grown significantly since 2005. This rate of increase is more than 3 times greatVerDate Mar 15 2010 19:02 May 01, 2017 Jkt 000000 PO 00000 Frm 00082 Fmt 6633 Sfmt 6621 Z:\ACTIVE\022316.TXT PAULIN
79 

1 CHAMPVA: Civilian Health and Medical Program of the Department of Veterans Affairs

FMS: Financial Management System / FMP: Foreign Medical Program / CWVV: Children of Women Vietnam Veterans 

FMS: Financial Management System / FMP: Foreign Medical Program / CWVV: Children of 

Women Vietnam Veterans 

er than what is seen in the overall number of VA users and the number of mental 

health encounters or treatment visits, from 10.5 million in 2005 to 19.6 million in 

2014, has been even more dramatic—at 87 percent. As a consequence of these 

trends, the proportion of Veterans served by VA who receive mental health services 

has shifted substantially. In 2005, 19 percent of VA users received mental health 

services, and in 2013, the figure was 27 percent. We anticipate VA’s requirement 

for providing mental health care will continue to grow. The FY 2017 budget request 

ensures the availability of a range of mental health services, from treatment of common mental health conditions in primary care, to more intensive interventions in 

specialty mental health programs for more severe and persisting mental health conditions. We will continue to focus on expanding and transforming mental health 

services for Veterans to ensure accessible and patient-centered care, whether within 

a VA facility or in the community. 

B. Please provide the Committee the types of care provided, the non-VA care programs (i.e., Patient Centered Community Care, Veterans Choice Program, fee basis, 

etc.) utilized to provide care in the community, and the amount spent under each 

program. 

Response. See table below.1

Question 5. The budget justification indicates a future goal of the Readjustment 

Counseling Service (Vet Centers) is to continue to expand access for readjustment 

counseling, particularly in underserved areas. Please explain in detail VA’s plan to 


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80 

expand access, including any plans to increase the number of Mobile Vet Centers, 

and explain the need for expanding access. 

Response. The Senate Veterans’ Affairs Committee broadly defines ‘‘the purposes 

of this readjustment counseling provision is to make fully available—and to encourage and facilitate the full use of—the resources of the VA’s health-care system to 

those Vietnam-era Veterans [and now all combat and other eligible Veterans, eligible Servicemembers, and their families] who feel the need for counseling to help 

them in their readjustment to civilian life.’’ Senate Report No. 96–100 (April 27, 

1979), accompanying Pub. L. 96–22, Veterans’ Health Care Amendments of 1979. 

The House Veterans’ Affairs Committee outlines ‘within the context of readjustment counseling, each Vet Center is tasked with three major functions: outreach, 

direct service delivery, and referral.’ House Report No. 98–117, accompanying 

Pub. L. 98–160, Veterans’ Health Care Amendments of 1983. 

VA estimates that it will continue to operate the same number of ‘‘brick and mortar’’ Vet Centers in FY 2017 as it did in FY 2014. In FY 2014, the Vet Center program did request and receive VHA approval for 291 new FTE, 63 of which were specifically placed in areas with high concentrations of Active Duty Servicemembers. 

In addition, 10 new Mobile Vet Centers (MVC) were implemented, bringing the fleet 

total to 80 MVCs. 

The 80 MVC’s are a national asset and available upon request to participate and 

provide services at any event where Veterans, Servicemembers, families, and community stakeholders are present. In order to maximize the impact of the new assets, 

an overall assessment of the entire MVC fleet was conducted. The plan covered 

placement of the newly purchased MVCs and an assessment of current assets by 

having the entire MVC Fleet (70 vehicles) meet the following criteria: 

• An MVC was stationed within a 120 minute drive time to all major Active Duty 

Military Installations and Demobilization Sites. 

– Major Active Duty Military Installations refer to any base where the active 

duty servicemember population is over 10,000 and the primary function is not 

basic training or a national training site. (i.e., Great Lakes Naval Station- basic 

training location, 29 Palms Marine Air Ground Task Force Training Commandnational training location). 

– Demobilization sites are determined by DOD. In most instances, major active 

duty military installations are also demobilization sites. 

• An MVC was stationed within a 120 minute drive time to counties with a Veteran population of 5,000–25,000. 

– The additional 20 vehicles will provide outreach and services to over 180 

counties that met these criteria; Furthermore over 84% of all counties within 

the United States will have access to an MVC within a 120 minute drive time. 

• Streamlined MVCs were distributed to locations where their size could best be 

utilized given Department of Transportation regulations, weather, terrain, and road 

conditions. 

There is one exception to the criteria. Ponce, Puerto Rico received a streamlined 

MVC due to the large National Guard and Reserve Component population. While 

these individuals may receive their initial demobilization processing in the continental United States, all follow up events are done in Puerto Rico. 

The Vet Center service mission is specific, unique, and purposely designed to address the needs of individuals readjusting to civilian life after service in or in support of combat operations, including those who experienced military sexual trauma. 

Since 2014, the focus for increasing access to Vet Center services has shifted from 

opening new ‘‘brick and mortar’’ Vet Centers to providing regularly scheduled services in Vet Center Outstations, with services available 40 hours per week using a 

small number of counselors and Community Access Points (CAP), with varying levels of service delivery dependent on community demand. These sites are located 

within the communities of underserved Veteran and Servicemember populations. 

Vet Centers are staffed with an average of 7 employees and incur overhead costs. 

Service delivery through Vet Center Outstations and Community Access Points are 

the most cost efficient methods to provide readjustment counseling in areas geographically distant with smaller, although significant, client populations. These 

areas simply do not justify a full Vet Center. 

Current State: As of the beginning of FY 2016, the program is operating 19 Vet 

Center Outstations with full-time services available. The program is operating 742 

Community Access Points, with 401 sites offering services on a weekly basis, 189 

sites offering services on a twice monthly basis, and 152 sites offering services on 

a monthly basis. As utilization increases/decreases the service level is adjusted accordingly. 

81 

Ongoing Evaluation: In FY 2016, each of the 300 Vet Centers has been tasked 

with 2 evaluations: 

First, they must evaluate for appropriate service delivery levels at each of the existing Outstations/CAPs. This evaluation includes a targeted outreach plan to increase local awareness of service availability, including an advertised ‘‘Open House’’ 

and close collaboration with the local County Veteran Service Officer, local Veteran 

Service Organizations, and local Congressional office staffers. In addition, Readjustment Counseling Service, which oversees all Vet Centers, has developed and is implementing a plan to acquire broad access to professional media services for the 

overall purpose of increasing awareness and access to Vet Centers, and specifically 

targeting awareness of the local services available through Vet Center Outstations 

and CAPs. 

Second, each Vet Center has been tasked with identifying and implementing at 

least one new CAP in their catchment area this fiscal year. Funding is being made 

available for hiring additional staff at any site that does not have current staffing 

necessary to provide these services. 

Caregivers and other supports and services of PCAFC affected the perceived 

wellbeing of caregivers and their families. 

Aim 3 examined the use and value of the overall Caregiver Support Program and 

its component services to caregivers in either PCFAC or the Program of General 

Caregiver Support Services. The study design for Aim 3 was a quantitatively-driven 

mixed method design, with qualitative semi-structured interview data, enhanced by 

survey findings. Survey data will describe frequency of use of services, ratings of 

helpfulness, and differences by individual and site-level characteristics (e.g., caregiver race, Veteran health status, geographic region, etc.). Interviews were utilized 

to inform interpretation of the quantitative findings and shed light on other important aspects of caregivers’ experiences unanticipated with survey responses. 

Aim 4 complements the caregiver survey data on services used by detailing the 

full delivery costs of the Caregiver Support Program—personnel, programming (e.g., 

stipend, CHAMPVA), and supporting costs. Preliminary operational costs will be 

based on a survey of Caregiver Support Coordinators (CSCs), capturing how their 

time is allocated across the various components of the Caregiver Support Program 

which they deliver at VAMCs. 

Final results will be delivered in summer 2016 and will inform the Caregiver Support Program about its return on investment and provide information on best practices for improving its programs. Understanding the impacts of the Caregiver Support Program on caregivers, Veterans, and VHA is expected to provide the Caregiver 

Support Program with information about highest value programs and services and 

an evidence base upon which to make program and planning decisions which optimize services while continuing to meet the requirements of title I of Public Law 

111–163. 

Question 6. The budget justification for Medical Support and Compliance indicates 

funding for the Veterans Integrated Service Networks (VISN) headquarters as decreasing by $11 million from the appropriated amount for FY 2017. Recently, VA 

announced that the number of VISNs would be reduced from 21 to 18. 

A. Please provide the Committee with the number of FTE at each VISN headquarters, broken out by VISN and by general schedule or title 38 positions. 

Response. See attached. 

VISN Number of FTE General 

Schedule Positions 

Number of FTE Title 38 Positions 

1 ........................ 33 5 

2 ........................ 51 3 

4 ........................ 41 2 

5 ........................ 41 12 

6 ........................ 39 7 

7 ........................ 48 13 

8 ........................ 46 10 

9 ........................ 48 8.5 

10 ...................... 4 80.56 

12 ...................... 34 6 

15 ...................... 45 11 

16 ...................... — — 

17 ...................... 49 4 

18 ...................... 23 11 

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VISN Number of FTE General 

Schedule Positions 

Number of FTE Title 38 

Positions 

19 ...................... 40 16.25 

20 ...................... 48 11 

21 ...................... 41.5 8.2 

22 ...................... 41 8 

23 ...................... 41 11 

B. Please provide a detailed plan to reduce the number of VISNs to 18 and a justification why 18 is the appropriate number of VISNs needed. 

Response. With the goal of modifying the existing Veteran Integrated Service Network (VISN) structure to bring it in line with MyVA districts, a VHA workgroup 

comprised of Network Directors and relevant Program Office Directors explored options and models and determined that 18 is the appropriate number of VISNs. Several factors were weighed in the process, including alignment with state boundaries, 

and the number of healthcare systems within each VISN. Realignment within state 

boundaries allows for better collaboration and interaction with various political representatives, state officials, agencies, and VSOs. Realignment into 18 VISNs allows 

for a more reasonable span of control, with 6–11 health care systems in the majority 

of the VISNs, while simultaneously reducing variation in Veteran population, enrollees, users, and budget. Eighteen VISNs will allow for better collaboration, standardization, and sharing of best practices, while not increasing span of control beyond 

6–11 health care systems. 

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Question 7. The budget justification for Medical Support and Compliance indicates 

a decrease of approximately $35 million from the FY 2017 appropriated level for 

VHA Central Office (VHACO). 

A. Please provide the Committee with a detailed justification for the decrease in 

funding for VHACO. 

Response. For the past three fiscal years (FY 2013–2015), VHA has seen decreases in VHA Central Office (VHACO) actuals and has re-estimated the out year 

projections accordingly. These reductions reflect Congressional rescissions (see below 

‘‘Rescissions, FY 2013-FY 2015’’) on overall funding including rescissions to the Medical Support and Compliance (MS&C) appropriation in the provision of 2-year funding in the budget year (see below example Public Law 113–76, Section 226). Because 

of an identified need for MS&C funding at the VA medical centers (VAMCs), and 


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to help address the recent access crisis, the reductions to this appropriation were 

imposed on VHACO rather than field organizations. 

Rescissions, FY 2013-FY 2015 

(dollars in thousands) 

Fiscal 

Year Public Law (PL) PL # 

Rescission 

Amount 

2013 Consolidated and Further Continuing Appropriations Act, 2013 ............................................ 113 -6 ($2,039 ) 

2014 Consolidated Appropriations Act, 2014 ................................................................................... 113 -76 ($50,000 ) 

2015 Consolidated and Further Continuing Appropriations Act, 2015 ............................................ 113 -235 ($5,609 )

Public Law 113–76, Section 226 

SEC. 226. (a) of the funds appropriated in division E of Public Law 113–6, the following amounts which became available on October 1, 2013, are hereby rescinded 

from the following accounts in the amounts specified: 

(1) ‘‘Department of Veterans Affairs, Medical Services’’, $1,400,000,000. 

(2) ‘‘Department of Veterans Affairs, Medical Support and Compliance’’, 

$150,000,000. 

(3) ‘‘Department of Veterans Affairs, Medical Facilities’’, $250,000,000. 

(b) In addition to amounts provided elsewhere in this Act, an additional amount 

is appropriated to the following accounts in the amounts specified to remain available until September 30, 2015: 

(1) ‘‘Department of Veterans Affairs, Medical Services’’, $1,400,000,000. 

(2) ‘‘Department of Veterans Affairs, Medical Support and Compliance’’, 

$100,000,000. 

(3) ‘‘Department of Veterans Affairs, Medical Facilities’’, $250,000,000. 

In addition, the 2016 amount reflects the request for an adjustment to the Advance 

Appropriation of $69.96 million that was not approved in the final enacted appropriation. The reduction of $35 million reflected in the most current submission for 

FY 2017 continues those projections, as the FY 2015 actual was $52.6 million less 

than the previous year (see ‘‘VHA Central Office Obligations). 

B. Please provide the Committee with the number of FTE at VHACO the FY 2017 

and FY 2018 budgets would support if this budget was adopted. Please indicate the 

number of title 5 employees and the number of title 38 or hybrid-title 38 employees. 

Response. See table below. 


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1Due to enhanced data capture from VA and community providers and continued refinement 

of VA’s data systems homeless data is constantly refreshed which may cause changes in previously reported data. Updates to homeless data are reflected in monthly refreshes of VA data 

systems. 

HOMELESS VETERANS

Question 8. In the last several years, there has been significant momentum in efforts to end veteran homelessness. As the Secretary’s testimony mentioned, veteran 

homelessness has declined by 36 percent since 2009. 

A. How does the budget request help focus efforts on those who are most difficult 

to reach, in addition to those who are at risk for homelessness? 

Response. VA’s commitment to preventing and ending Veteran homelessness remains firm. VA will continue until the goal of all Veterans having permanent, sustainable housing with access to high-quality health care and other supportive services is met. VA provides a seamless continuum of services for Veterans who are 

homeless or at risk of homelessness. While significant advances have been made in 

reducing Veteran homelessness, there are sub-populations of homeless Veterans who 

are hard to reach and engage in services (i.e., chronically homeless, those with serious mental illness and justice involved). The 2017 President’s Budget includes $1.6 

billion for VA programs that prevent or end homelessness among Veterans including, funding for case management support for the nearly 80,000 existing Housing 

and Urban Development-VA Supportive Housing (HUD-VASH) vouchers, grant 

funding for community-based prevention, and rapid rehousing services provided 

through the Supportive Services for Veteran Families (SSVF) program, clinical outreach and treatment services through Health Care for Homeless Veterans (HCHV), 

service intensive transitional housing through the Grant and Per Diem (GPD) and 

prevention services to justice involved Veterans in the Veteran Justice Program 

(VJP); and employment supports. These funds are critical to ensure that once communities meet the goal of ending Veterans homelessness they will be able to sustain 

it and not jeopardize the progress to date or recreate the levels of homelessness 

among Veterans prior to the investment. 

VA has made unprecedented efforts to promote the services available to Veterans 

who are homeless or might become homeless. A continuum of services has been designed to assist every eligible homeless Veteran, as well as Veterans at risk for 

homelessness. This homeless continuum assists Veterans in acquiring safe housing, 

treatment services, clinical outreach, opportunities to return to employment, prevention and rapid re-housing, and benefits assistance. As a result of these efforts, VA 

is serving more Veterans than ever before with specialized services for Veterans 

who are homeless or at risk of homelessness. Since 2010, demand for VA homelessrelated services has increased by 136 percent. There has been a year to date, 8.4- 

percent increased demand for homeless services between January 2015 and January 2016 (January 2015: 164,224; January 2016: 178,139).1

Since 2010, more than 365,000 Veterans and their family members have been permanently housed, rapidly rehoused, or prevented from falling into homelessness as 

a result of VA’s homeless continuum of services and targeted community resources. 

In FY 2015 alone, nearly 65,000 Veterans obtained permanent housing through VA 

Homeless Programs (FY 2014: 50,730), and more than 36,000 Veterans and their 

family members were prevented from becoming homeless through the SSVF program, including 6,555 children. VA’s ability to partner HUD, the U.S. Interagency 

Council on Homelessness, other Federal agencies, state and local governments, and 

volunteer organizations all contributed to this significant accomplishment. 

VA’s programs serving homeless and at-risk Veterans, are outlined below: 

The HUD-VASH program subscribes to the principles of the ‘‘Housing First’’ 

model of care, an evidence based practice model, helps homeless individuals exit 

from homelessness, remain in stable housing, thus improving ability and motivation 

to engage in treatment strategies. This program has been successful at rapidly moving individuals into housing and then providing wrap around supportive services as 

needed. Program goals include housing stability while promoting maximum Veteran 

recovery and independence in the community for the Veteran and the Veteran’s 

family. The HUD-VASH program targets the most difficult to reach and prioritizes 

chronically homeless Veterans. In FY 2015, more than 18,200 chronically homeless 

Veterans were admitted to HUD-VASH case management services. 

SSVF is designed to rapidly re-house homeless Veteran families and prevent 

homelessness for those at imminent risk due to a housing crisis. Funds are granted 

to private, non-profit organizations and consumer cooperatives that will assist very 

low-income Veteran families by providing a range of supportive services designed to 

promote housing stability. In FY 2015, SSVF assisted nearly 99,000 Veterans and 

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their family members (over 157,400 individuals), which included over 18,200 households with children (over 34,600 children). SSVF has the unique ability to shift 

funds from the rapid re-housing of homeless Veteran families to preventing homelessness for those at-risk. This allows SSVF to adapt to changing local needs and 

emphasize prevention assistance where local communities have met the Federal 

benchmarks to end homelessness. 

The HCHV program is our primary clinical outreach program to engage the most 

difficult to reach homeless Veterans and provide street outreach to these Veterans. 

In addition, case management and HCHV Contract Residential Services ensure that 

chronically homeless Veterans, especially those with serious mental health diagnoses and/or substance use disorders, are connected to health care and other needed 

services. Veterans are placed in VA or community-based programs that provide 

quality housing and services that meet the needs of these special populations. 

The GPD program plays a vital role in the continuum of homeless services by providing supportive services to those Veterans who would otherwise be among the 

unsheltered homeless population, and ultimately transitioning them to permanent 

housing. Grants offered by the GPD program promote the development and provision of supportive housing and/or supportive services with the goal of helping homeless Veterans achieve residential stability, increase their skill levels and/or income, 

and realize greater self-determination. The GPD program has more than 650 funding projects and over 14,500 beds nationwide. During FY 2015, 15,507 Veterans 

exited GPD programs with permanent housing placements. 

The VJP and the Health Care for Re-Entry Veterans (HCRV) are designed to target Veterans who are at great risk of becoming homeless due to involvement with 

the justice system. The Veteran Justice Outreach (VJO) Specialists conduct face-toface outreach in 1,284 local jails (39 percent of the U.S. total), and staff nearly the 

entire Nation’s Veteran Treatment Courts and other Veteran-focused courts. VJO 

Specialists have served over 120,000 justice-involved Veterans since FY 2010, including 46,534 Veterans in FY 2015. 

The HCRV Specialists provide outreach to Veterans approaching release from 

State and Federal prisons. They briefly assess reentry Veterans’ probable treatment 

needs, help the Veterans plan to access responsive services upon release, and provide post-release follow-up as needed to ensure Veterans are engaged with services 

to prevent homelessness. There are currently 44 HCRV Specialist positions nationwide, almost all of which are funded through Veterans Equitable Resource Allocation. While many are based at VAMCs, but they typically serve Veterans in areas 

much larger than a VAMC catchment, often conducting outreach to prison facilities 

in at least one entire State, and sometimes an entire VISN. Nationally, HCRV Specialists served over 72,000 re-entry Veterans since FY 2007, including 15,580 in FY 

2015. 

Low Demand/Safe Havens (LDSH) are a 24-hour per day/7-days per week community-based early recovery model of supportive housing that serves hard-to-reach 

homeless Veterans with severe mental illness who have been unable to participate 

in traditional treatment and supportive services. Four LDSH sites were funded as 

pilot programs in FY 2012 as development projects under the National Center for 

Homelessness among Veterans (NCHAV) with funding support made available 

through HCHV. Outcomes of fidelity reviews conducted by NCHAV warranted expansion of the model program to include an additional 18 sites in FY 2013 for chronically homeless Veterans with concurrent mental illness and substance use 

disorders. 

Homeless and at-risk Veterans also need access to employment opportunities to 

support their housing needs, improve the quality of their lives, and assist in their 

community reintegration efforts. The Homeless Veteran Community Employment 

Services (HVCES) program is the only employment program within VHA that specifically targets homeless Veterans. In FY 2015, the number of Veterans exiting 

homeless residential programs with employment (GPD, CWT/TR, and DCHV) increased by 9 percent. Continued investment in VA’s homeless programs is needed 

to sustain the capacity to address the housing needs of Veterans and maintain the 

systems put in place to prevent homelessness. 

B. As the number declines, what is the vision for the future of VA homelessness 

programs? 

Response. VA’s vision for ending homelessness among Veterans is to continue developing a systematic approach in communities whereby any Veteran experiencing 

a housing crisis may receive the housing and services they need to end their crisis 

as quickly as possible, while preventing those who are at risk from ever falling into 

homelessness. These systems enable communities to create a multi-pronged approach addressing the varying health and social situations experienced by Veterans 

and their families. These approaches must address Veterans with an acute housing 

103 

crisis, as well as those Veterans who are at risk of homelessness; recovering from 

a chronic housing crisis; or chronic health, mental health, and substance use issues. 

VA and communities must have the systems and services in place to sustain and 

maintain access to permanent, sustainable housing, high quality health care and 

other supportive services. 

Ending Veteran homelessness does not mean that a Veteran will never again experience a housing crisis. At any given time, a Veteran may become homeless as 

a result of challenges in their lives. VA’s goal is to make these challenges rare, brief 

and non-recurring. As homelessness among Veterans declines and the needs of Veterans change, VA will shift with the changing needs of Veterans and communities 

and increase the focus on preventing those who are at risk while maintaining Veterans who are already housed. 

VA and Federal partners are pleased by the successes being realized across the 

country. As of April 15, 2016, 23 communities, the State of Connecticut, and the 

Commonwealth of Virginia have announced an effective end to Veteran homelessness. In order to remain successful, VA and communities need to be able to sustain 

the gains that have been made. 

VA’s vision is based on data collection and research. This approach provides valuable insight into the causes of Veteran homelessness, evidence based practices, and 

projecting the needs and changing demographics of Veterans. The results of these 

efforts will allow VA to continue to refine and target homeless programs to best prepare for increasing numbers of female Veterans, returning combat Veterans, as well 

as other changes in our Veteran population. 

C. What potential changes may be needed in the future to ensure the program 

size and services are appropriate for the level of need? 

Response. As VA, Federal, and community partners advance toward the goal of 

preventing and ending Veteran homelessness and the landscape of needs and services change, it is important to make certain that the housing resources and supportive services in each community are best suited to ensuring that homelessness 

among Veterans is rare, brief, and non-recurring. As the needs of homeless and atrisk Veterans evolve, VA will continue to transition its focus from ‘‘rescue’’ (i.e., outreach and support) to those seeking housing, to long-term case management of those 

trying to sustain housing and to prevention efforts. It is important to note that the 

target populations for VA homeless services are Veterans who are chronically homeless and/or have mental and physical health concerns. These Veterans require longterm, often intensive, case management and other clinical services that will prevent 

them from returning to homelessness. Therefore, once Veterans are permanently 

housed, VA will need to continue to provide the wrap around services necessary to 

ensure housing stability for the Veteran and their family. 

Through its research and data collection, VA continues to evaluate and monitor 

the needs of homeless and at-risk Veterans to ensure that those needs are being 

met. The areas where there have been large gains in ending Veteran homelessness 

have been in places that have benefited from targeted investment of resources. Conversely, areas where gains have been lost were in places where the focus shifted to 

other priorities. In order to sustain the gains and ensure that resources are allocated efficiently, VA will require flexibility in its authorization(s) to transition services at a level commensurate with the population shift (from literally homeless to 

at-risk) and geographic needs. 

In addition to the allocation of resources to meet targeted need, VA is focusing 

on three areas to enhance homeless services: programmatic transformation in the 

GPD program, adoption of Coordinated Entry Systems and the use of ‘‘By Name 

Lists’’ (BNLs), and maximum utilization of all HUD-VASH vouchers. Additionally, 

VA conducts research to inform the development of evidence-based services that 

meet the needs of various special populations. 

GPD Programmatic Transformation: The GPD Program has been VA’s primary 

transitional housing program for over twenty years. As VA has added programs to 

the homeless continuum of services, and homelessness has decreased, it is clear that 

the GPD program must be refreshed to keep pace. VA is exploring an overall program refresh to allow VA to make GPD more efficient and effective as well as responsive to Veteran needs in their respective communities. 

In addition, VA has challenged GPD grantees to assess their programs and think 

about strategies that are currently available to them address needed changes. One 

option is to ask grantees to consider if Bridge Housing could work in their community. Provided below is a copy of the guidance VA issued to GPD grantees via an 

Open Letter on March 1, 2016 (see below). 

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Coordinated Entry Systems and the use of ‘‘By Name Lists’’ (BNLs): A vital strategy in the Federal approach to ending homelessness is the adoption of Coordinated 

Entry Systems and the use of BNLs. These approaches require the ability to share 

Veteran Protected Health Information with community partners in order to develop 

a fully comprehensive BNL and ensure that all homeless Veterans are prioritized 

for services in the community. VA is working to identify and implement secure 

methods for the digital sharing and storage of Veteran information in a way that 

dually maximizes Veteran security and community-level coordination of services. 

Maximum use of HUD-VASH vouchers: VA is working internally and with its Federal partners at HUD and USICH to ensure that we maximize utilization of all 

HUD-VASH vouchers. Efforts underway within HUD-VASH include targeted allocations for Veterans on Tribal lands and in rural areas, increased use of project-based 

vouchers, as well as exploratory discussions regarding vouchers for Other Than 

Honorable Veterans. Concurrently, VA is working on several HUD-VASH accelerator projects focused on cities with low vacancy rates and a backlog of voucher 

holders seeking housing. Ensuring that Veterans have the case management support in place as they exit homelessness is a critical component of this process. Continued investment in case managers (e.g., 10,000 newly funded HUD-VASH vouchers) through funding provides Veterans with the access and quality services to successfully exit homelessness. 

Research: VA recognizes that research is critical to informing the development of 

evidenced-based services that meet the needs of various special populations (e.g., 

aging, women, Operation Enduring Freedom/Operation Iraqi Freedom/Operation 

New Dawn, the chronically homeless). VA’s National Center on Homelessness 

among Veterans is VA’s hub for homeless Veteran research. For example, the National Center on Homelessness hosted several Homeless Evidence and Research 

Synthesis (HERS) symposiums bringing together policymakers, leaders in the field 

and researchers to discuss various evidence based practices and solutions. 

The final proceeding documents from previous HERS symposiums are embedded. 

These documents highlight the presentations, discussions and suggested recommendations from the events. Opinions expressed in these papers are provided to be 

thought provoking and challenging, as national policy are developed to address the 

needs of homeless Veterans. These recommendations do not reflect the current official VA policy. 

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2Data as of March 31, 2016. Due to enhanced data capture from VA and community providers 

and continued refinement of VA’s data systems, homeless data is constantly refreshed, which 

may cause changes in previously reported data. Updates to homeless data are reflected in 

monthly refreshes of VA data systems. 

In summary, the strategies outlined above are critical to ensuring that programs 

and services match Veteran need. Evidence and data show the importance of strategically aligning housing resources in such a manner as to create a crisis response 

system that quickly resolves an individual’s or family’s homelessness by providing 

the appropriate permanent housing option along with the necessary supports. 

Achieving such alignment challenges the provider community at all levels to develop 

new approaches and refine existing programs that are cost effective and in line with 

proven best practices. 

Question 9. One of the ‘‘Breakthrough Outcomes for 2016’’ is to ‘‘continue progress 

toward an effective end to veteran homelessness by permanently housing or preventing homelessness for an additional 100,000 veterans and their family members.’’ 

A. What is the total number of veterans for whom VA intends to provide permanent housing or prevent homelessness in 2016? 

Response. In FY 2015, nearly 65,000 homeless Veterans were permanently housed 

through VA’s homeless programs. After including their family members, that number increased to over 100,000. 

Based on previous year’s performance, VA expects to permanently house or prevent from homelessness approximately 100,000 people in 2016. This number includes Veterans and their family members. Out of 100,000 people, VA projects that 

approximately 73,000 Veterans will obtain permanent housing or be prevented from 

homelessness at exit from a VA homeless program. 

B. Of this number, how many does VA intend to place in permanent housing? 

Response. VA anticipates that all of the Veterans referenced above will be permanently housed or maintained in permanent housing. Veterans could be placed in 

permanent housing from any of VHA’s homeless programs (HUD-VASH, SSVF, 

GPD, HCHV, Domiciliary Care for Homeless Veterans (DCHV), Compensated Work 

Therapy/Transitional Residence program (CWT/TR), and the justice programs). 

C. How many would be placed in transitional housing? 

Response. Transitional housing is not part of the Breakthrough Outcomes for 

2016; however, transitional housing, available through the GPD program, will remain part of VA’s continuum of homeless services. In FY 2015, 23,894 Veterans entered GPD programs, and there were 15,727 exits to permanent housing. Through 

February 2016, there have been 9,760 entries into GPD funded programs. During 

the same period, there have been 6,813 exits to permanent housing. It is anticipated 

that the use of VA transitional housing through the ‘‘bridge housing’’ model will increase the overall utilization of VA funded projects. 

D. How many would benefit from prevention services? 

Response. VHA implemented a national, health system-based universal screen for 

homelessness and risk of homelessness. The goal of this screener is to enhance the 

rapid identification of Veterans who very recently became homeless or are at imminent risk of homelessness, and to ensure that they access appropriate assistance to 

achieve housing stability. This instrument is administered by providers during Veterans’ outpatient visits at VHA facilities across the country. 

During FY 2015, 3,529,695 Veterans responded to VHA’s screener for homelessness and risk. Of those, 0.65 percent (n=23,103) screened positive for homelessness 

and 0.57 percent (n=20,230) screened positive for risk. Approximately three out of 

five Veterans who screened positive for homelessness or risk requested follow-up 

services to address their housing instability. Among Veterans who requested followup, 71.5 percent of those who screened positive for homelessness, and 65.1 percent 

of those who screened positive for risk received a follow-up service within 30 days. 

Between the first quarter of FY 2013—when screening for homelessness and risk 

began—and the fourth quarter of FY 2015, the proportion of Veterans who screened 

positive for homelessness decreased by 32.9 percent and the rate of positive screens 

for risk decreased by 57.8 percent. Of the Veterans who initially screened positive 

for either homelessness or risk and responded to a rescreen at least 6 months later, 

74.6 percent resolved their housing instability, and 92.1 percent of Veterans who reported risk of homelessness screened negative during the subsequent screen.2

E. How was this goal determined? 

Response. VA believes the goal of permanently housing or preventing homelessness for an additional 100,000 Veterans and their family members represents the 

best direct measurement of the initiative’s national impact. The specific target of 

100,000 was determined by examining the number of Veterans and family members 

142 

3Data as of March 31, 2016. Due to enhanced data capture from VA and community providers 

and continued refinement of VA’s data systems homeless data is constantly refreshed which may 

cause changes in previously reported data. Updates to homeless data are reflected in monthly 

refreshes of VA data systems. 

permanently housed or prevented from homelessness in 2015 to establish a baseline 

for this measure. In 2015, the number of Veterans and family members permanently 

housed or prevented from homelessness was approximately 118,000. Because 2015 

included several temporary ‘‘surge efforts’’ that generated large numbers of permanent housing placements that level of placements is unlikely to be repeated in 2016. 

Additionally VA’s Homeless Gap Analysis model projects the 2016 homeless Veteran 

population to drop approximately 16 percent from 2015 levels; 100,000 is therefore 

a cautiously ambitious target for 2016. 

Question 10. The written testimony indicates that, in FY 2015, VA provided services to more than 365,000 homeless or at-risk veterans through VHA homeless programs. Please list how many veterans have been served through VHA homeless programs for each fiscal year, beginning with FY 2010. 

Response. VA has made unprecedented efforts in engaging, reaching and serving 

Veterans who are homeless or might become homeless. The Secretary’s testimony 

references that in FY 2015, more than 365,000 homeless or at-risk Veterans served 

through VHA’s homeless programs. This number represents the total number of 

homeless and at-risk Veterans served in VHA and the Veterans Benefits Administration (VBA). The following chart outlines the total number of homeless and at-risk 

Veterans served by VA by fiscal year.3

Fiscal Year 

Total number of homeless and 

at-risk Veterans served by VA 

(data as of March 31, 2016) 

2015 .................. 376,619 

2014 .................. 367,798 

2013 .................. 348,825 

2012 .................. 236,942 

2011 .................. 192,702 

2010 .................. 160,927 

Question 11. What metrics are used to determine the number of those who are 

prevented from becoming homeless? 

Response. The SSVF program, VA’s primary homelessness prevention program, offers grants to non-profit organizations to not only rapidly re-house Veterans and 

their families, but directs substantial efforts to preventing homelessness. The following metric is used to determine the number of those who are prevented from becoming homeless: 

• How many at-risk Veteran families receive SSVF homeless prevention services, 

and of those served, how many maintained permanent housing upon program exit. 

The SSVF program tracks outcome measures specifically tied to preventing homelessness as it offers services specifically designed to keep at-risk Veterans and their 

families in permanent housing. Data used for this metric is acquired from the 

Homeless Management Information System (HMIS). HMIS data is input by SSVF 

grantees and community providers. 

VA’s homeless programs have always had a dual focus on housing unsheltered 

(street) homeless Veterans and increasing exits to permanent housing of sheltered 

homeless Veterans. The homeless programs’ continuum of services includes both 

prevention and treatment services to assist those Veterans who are on the streets 

or in shelters today, and prevention for those at risk of homelessness from starting 

that downward spiral. Although other VA programs may not have such a singular 

focus as SSVF, VA considers many programs along the continuum as offering and 

providing prevention services. The primary goal of HUD-VASH is to move Veterans 

and their families out of homelessness and into stable permanent housing (rescue), 

and then to provide the supports needed to sustain the Veteran and their family 

in their housing (prevention). 

VA also has several programs that provide time-limited housing to Veterans along 

with supportive services, treatment, vocational assistance, etc. These programs provide the necessary ‘‘bridge’’ between streets and permanent housing by providing 

transitional residence (rescue) and services designed to improve housing stability 

that will give Veterans the supports necessary to avoid re-experiencing homelessVerDate Mar 15 2010 19:02 May 01, 2017 Jkt 000000 PO 00000 Frm 00146 Fmt 6633 Sfmt 6621 Z:\ACTIVE\022316.TXT PAULIN
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ness (prevention). VJP prevents homelessness by providing outreach and linkage to 

VA services for Veterans at early stages of the justice system and address the community re-entry needs of incarcerated Veterans in order to reduce the impact of 

medical, psychiatric, and substance abuse problems upon community readjustment. 

HVCES program provides services to both homeless and at-risk Veterans that increase access to employment opportunities to support their housing needs, improve 

the quality of their lives, and assist in their community reintegration efforts. 

MEDICAL CARE COLLECTIONS FUND

Question 12. The budget indicates that the VHA Chief Business Office has implemented an expanded revenue enhancement plan that focuses on immediate, midterm, and long-term improvements to business processes. 

A. When was this plan implemented? 

Response. The VHA Chief Business Office has historically adapted the expanded 

revenue enhancement plan that resulted in several key initiatives leading to improvements in revenue. The broader plan has resulted in several key initiatives and 

improvements including: 

• Implementation of seven industry-modeled regional Consolidated Patient Accounting Centers (CPAC) standardizing and optimizing the billing and collections 

activity from 153 VAMCs; completed in FY 2012. • Electronic denials management • Implementation of electronic payments and remittance advices • Electronic Pharmacy claims • Establishment of a National Payer Relations Office 

B. What are the targeted improvements included in the plan? 

Response. Ongoing Key Revenue Operations initiatives include: 

• Sustain and enhance Revenue Operations • Maximize use of Payer Relations Office—conducting new or re-verifications of 

existing third party agreements. Implementation of a payer compliance tool that 

supports management oversight of insurance companies’ compliance with established agreements. • Continued work through legislative proposals to maximize revenue. Examples 

include recognizing VA as a participating provider, aligning with best practices on 

collection of health information exchange. • Optimize business process through effective use of technology and advanced 

business analytics. • Attract, develop, and retain skilled, engaged and empowered workforce. • Develop and enhance technology to standardize and automate business rules 

and create efficiency. • Implementation of Lean and Lean Six Sigma (Lean/LSS), continuous process 

improvement program. Tracking well in year 4 of a 5-year maturity model. • Planned implementation of Tiered Medication Copayment System. 

C. Is there a timeline over which the improvements will be pursued? 

D. How has this plan impacted collections? 

Response (C&D). While not all initiatives are directly tied to impact collections, 

the implementation of CPACs has resulted in substantial improvements to total collections. A 23-percent increase in total Medical Care Collection Fund (MCCF) collections was realized from FY 2012 to FY 2015. Other benefits achieved through consolidation are: 

• Standardized, consistent and stable performance leading to stronger collections 

across all VAMCs • Industry best practice internal control framework proactively prepares and positively positions CPAC for future audits 

• Deployed LEAN/LSS across the CPACs supporting employee engagement, informed decisionmaking and an organizational change management approach that 

supports the CPAC infrastructure. 

Question 13. VA is projecting an increase in Medical Care Collections Fund collections in 2016. Please explain, in detail, what factors contribute to the projected increase. 

Response. VHA utilizes the Integrated Collections Forecasting Model (ICFM) to 

estimate the 10-year collections as an input to the President’s Budget. ICFM draws 

upon numerous predictive variables and historical data sources to forecast collections. Based on the model updates at the time of budget development, ICFM projected an increase of $87.5M in the MCCF for FY 2016. These estimates were not 

further adjusted for additional policy considerations such as the impact of Veteran 

Choice Program. 

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The projected increase is due the net impact of the following: 

• A FY 2015 collections baseline of $3.451B; • Projected workload growth from FY 2014 Enrollee Health Care Projection Model 

(EHCPM) resulting in higher bill volumes; • Anticipated increases to third party reasonable charges with a stable collections 

to billing ratio 

CAREGIVERS

Question 14. The 2016–2018 ‘‘Future Goals’’ for the Caregivers Program indicate 

supporting the evaluation of program components under the Caregivers and Veterans Omnibus Health Services Act of 2010 through the Partnership Evaluation 

Center. Please explain, in detail, what aspects of the program will be evaluated, how 

they will be evaluated, and how VA will use the evaluation results to make improvements to the program. 

Response. The Caregiver Support Program National Office has partnered with 

VHA’s Health Services Research and Development Service Quality Evaluation Research Initiative to collaboratively fund the VA Caregiver Support Program 

Partnered Evaluation Center (VA-CARES), a long-term project that will use a mixed 

methods approach to provide an evaluation of short- term impacts of the Caregiver 

Support Program. The research study is organized into four Aims, described below. 

In Aim 1, VA-CARES closely examined health care utilization through an analysis 

of medical records for VA-provided and VHA purchased care, comparing health care 

utilization of Veterans whose caregivers are participating in the Program of Comprehensive Assistance for Family Caregivers (PCAFC) to healthcare utilization of a 

control group, one year prior to and up to three years following application to 

PCAFC. 

Aim 2 considers caregiver well-being. VA-CARES distributed surveys to caregivers 

to assess how training, the stipend for eligible primary family caregivers, and other 

supports and services of PCAFC affected the perceived wellbeing of caregivers and 

their families. 

Aim 3 examined the use and value of the overall Caregiver Support Program and 

its component services to caregivers in either PCFAC or the Program of General 

Caregiver Support Services. The study design for Aim 3 was a quantitatively-driven 

mixed method design, with qualitative semi-structured interview data, enhanced by 

survey findings. Survey data will describe frequency of use of services, ratings of 

helpfulness, and differences by individual and site-level characteristics (e.g., caregiver race, Veteran health status, geographic region, etc.). Interviews were utilized 

to inform interpretation of the quantitative findings and shed light on other important aspects of caregivers’ experiences unanticipated with survey responses. 

Aim 4 complements the caregiver survey data on services used by detailing the 

full delivery costs of the Caregiver Support Program—personnel, programming (e.g., 

stipend, CHAMPVA), and supporting costs. Preliminary operational costs will be 

based on a survey of Caregiver Support Coordinators (CSCs), capturing how their 

time is allocated across the various components of the Caregiver Support Program 

which they deliver at VAMCs. 

Final results will be delivered in summer 2016 and will inform the Caregiver Support Program about its return on investment and provide information on best practices for improving its programs. Understanding the impacts of the Caregiver Support Program on caregivers, Veterans, and VHA is expected to provide the Caregiver 

Support Program with information about highest value programs and services and 

an evidence base upon which to make program and planning decisions which optimize services while continuing to meet the requirements of title I of Public Law 

111–163. 

HEALTH PROFESSIONALS EDUCATIONAL ASSISTANCE PROGRAM

Question 15. Please list the top five positions for which benefits under the Health 

Professionals Educational Assistance Program, including the Education Debt Reduction Program, the Employee Incentive Scholarship Program, and the Health Professional Scholarship Program, were used in 2015 and how much funding went toward 

each position. What are the projections for 2016? 

Response. The Education Debt Reduction Program (EDRP) is a critical tool for recruiting physicians and other direct health care providers to work with VHA. VHA 

has the authority to offer education debt reduction payments for employees with 

qualifying loans for positions that are determined to be difficult for recruitment and 

retention based on local facility needs. Participants receive education debt reduction 

payments up to a maximum award amount of $120,000 over 5 years while they remain employed by VHA in a position that qualified them for the award. 

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The following table shows the top five occupations for which new awards were approved in FY 2015 and the total award amounts projected for the associated awards. 

These participants are currently serving in their first service period and will receive 

their first EDRP reimbursement in FY 2016. VHA projects to offer a minimum of 

900 additional new awards this year, primarily in the occupations designated as 

mission critical by VA: physicians, nursing, psychology, physician assistant, and 

physical therapy. 

The average award amounts and overall funding needs of the program are increasing under the new maximum award amount of $120K (or $24K per year). In 

FY 2014, VHA made approximately 650 new awards, bringing the total number of 

EDRP participants to over 2,000. In FY 2015, EDRP reimbursed those participants 

nearly $11M (participants in these years were at the pre-VACAA maximum award 

amount of $12K per year or less). VHA anticipates reimbursing the current participants nearly $23M in FY 2016, and $37M in FY 2017 based on the increase in program participants and average award amounts. 

FY 2015 

(New Awards) 

Occupation Participants Funding 

Medical Officer ............................................................ 307 $30,120,574 

Nurse ........................................................................... 210 $9,313,726 

Pharmacist .................................................................. 102 $9,447,553 

Psychologist ................................................................. 79 $6,949,085 

Physician Assistant ..................................................... 43 $3,875,563 

The Employee Incentive Scholarship Program authorizes VA to award scholarships to employees pursuing degrees or training in health care disciplines for which 

recruitment and retention of qualified personnel is difficult. Participation in the program is field-driven and dependent on the number of employees recommended by 

facilities. The following table shows the top five occupations for which new awards 

were approved and will result in a service obligation period in those occupations. 

At the time of this report, VHA is conducting its second FY 2016 Application Cycle, 

and therefore, the FY 2016 figures below reflect only the new applications submitted 

and approved through October 31, 2015. 

FY 2015 

(New Awards) 

Occupation Participants Funding 

Registered Nurse (includes NP, CNS, aNd 

CNL) .................................................................... 1,234 $22,370,753 

Licensed Practical/Vocational Nurse ........................... 11 $156,059 

Physical Therapist ....................................................... 7 $76,897 

Pharmacist .................................................................. 5 $131,096 

Social Worker ............................................................... 5 $111,064 

FY 2016 

(New Awards—through Oct 31, 2015) 

Occupation Participants Funding 

Registered Nurse (includes NP, CNS, and CNL) ......... 610 $11,202,684 

Licensed Practical/Vocational Nurse ........................... 8 $103,646 

Physical Therapist ....................................................... 8 $109,397 

Physician Assistant ..................................................... 4 $80,756 

Occupational Therapist ............................................... 3 $59,854 

Health Professionals Scholarship Program awards scholarships to VA and non-VA 

employees pursuing degrees of training in health care disciplines for which recruitment and retention of qualified personnel is difficult. Scholarship covers tuition, stipend and required fees; recipients are required to complete a service obligation at 

a VA health care facility after program completion. Health Professional Scholarship 

Program is currently accepting applications for Registered Nurses (including Nurse 

Practitioners). We anticipate that we will award 25 scholarships. 

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CONSTRUCTION AND CAPITAL ASSETS

Question 16. The budget notes that VA currently has 370 buildings that are vacant or less than 50 percent occupied, which costs VA $26 million annually to maintain and operate. Please provide a list of these buildings. 

Response. The list is attached. The list is comprised of buildings that were predominantly vacant (more than 50 percent) at the end of FY 2015. Most of the buildings are currently being used for swing space, as VA considers reuse alternatives 

or disposal options. 


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Question 17. The FY 2017 budget requests $528 million in major construction to 

fund projects in Long Beach, California, and Reno, Nevada. The US Army Corps of 

Engineers (USACE) will be the construction agent for these two projects as now required by law for any project over $100 million. Please provide the Committee an 

update on the projects that USACE is the construction agent, to include the Denver 

project. 

Response. The Department of Veterans Affairs (VA) has entered into a master 

interagency agreement with the U.S. Army Corps of Engineers (USACE) to collaborate on 14 construction projects. USACE will have the lead in the execution of design and construction on the 14 projects. USACE has provided an approach to gaining insight and validation of all VA completed work prior to assuming the lead. The 

attached addendum outlines the process and provides the status of the agreement 

for each project. 


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Question 18. The FY 2017 budget requests $30.2 million for the project in Long 

Beach, California, and states that this funding will be used for the construction of 

a Combined Heat and Power plant (CHP). Please provide details on the CHP, including a break out of the $30.2 million for the project. 

Response. The FY 2017 budget requests $30.2 million for a proposed cogeneration 

(Combined Heat and Power (CHP)) system for the VA Long Beach Medical Center. 

This Cogen system consists of a natural gas engine that generates electricity locally 

to provide supplemental electricity to the campus carrying approximately 40 percent 

of the campus load during peak demand periods and up to 90 percent during normal 

operations. This will result in significant energy cost savings, reduction in carbon 

emissions and increased reliability. Currently, all electricity is supplied by the local 

utility company, Southern California Edison. The byproduct (waste heat) from the 

engine will be captured and used to provide steam to operate the steam turbine of 

a proposed steam-driven chiller, in turn; the steam-driven chiller will provide chilled 

water for campus space cooling. A new building will be constructed to house the proposed CHP system. The proposed CHP system output capacity will be between 1 

and 3 megawatts of electrical power. The proposed CHP system will provide the following benefits: 

1. Lower energy cost by using natural gas to generate electricity locally as opposed to that from a central power station. 

2. Lower operating cost by utilizing the waste heat to produce steam. 

3. Reduce the greenhouse gas emissions normally associated with electricity and 

steam production. 

4. Improve the reliability of electric and steam services for the campus. 

The total FY 2017 amount requested is $30.2 million. Of that amount, $25.9 million is dedicated to the production of the CHP construction documents, and actual 

construction. The remaining amount, $4.3 million, is required to demolish Buildings 

128 and 133. 


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Question 19. In the hearing, Secretary McDonald mentioned VA’s efforts regarding public-private partnerships for construction projects. Please provide an update 

on VA’s efforts in this area, including an analysis of its feasibility and any legislative changes that would need to be made. 

Response. VA is assessing strategic partnerships as part of the MyVA initiative. 

Partnerships provide VA with opportunities to expand upon, and maximize the utility of, existing resources in several operational areas; including real estate. VA is 

presently evaluating potential locations in which a form of a public private partnership (P3) would be helpful. 

First, VA has been exploring a potential public private partnership in San Francisco, California. In order to address issues relating to aging infrastructure, the San 

Francisco VA Medical Center (SFVAMC) has received funding for a major seismic 

construction project, and needs several other funded projects. VA assessed the total 

life cycle of SFVAMC’s approved capital investment plan, against the discounted 

present value of potential capital P3 alternatives in the market. VA believes that 

a P3 could make financial and practical sense toward achieving VA’s mission. It 

could also enable VA to assess prospects for minimizing upfront capital funds, reducing overhead costs, focusing on healthcare outcomes, and fostering VA’s ability 

to better engage community partners, and create jobs and tax revenues for the local 

economy. 

Given the infrastructure costs and challenges at VA’s existing campus in San 

Francisco, VA has determined that a partnership could be an effective, viable opportunity. VA is working with the Office of Management and Budget to develop partnership options while continuing to support various legislative efforts. 

Second, in Omaha, Nebraska, VA has received partial funding for a major construction project but likely will not receive full funding in the near term. Concurrently, VA has been made aware of donors in the community that would like to help 

finance and then construct a needed facility, and donate that facility to VA. Therefore, VA is exploring a P3 opportunity related to the construction of a facility on 

VA land, built to Federal construction standards. It is anticipated that a P3 in this 

location could efficiently serve Veterans and taxpayers, while reducing the Government’s outlay of capital dollars. 

VA would require legislation to support both of the aforementioned P3 options and 

would need to ensure that its proposed approach is consistent with[*** ]Omaha 

would likely require authority for VA to enter into a joint agreement for construction of a new medical facility (as defined by 38 U.S.C. § 8101), with a suitable 

decisionmaking process. San Francisco would require approval to enter into a longterm partnership agreement, which could involve a lease to VA in excess of the current 20-year maximum. VA would also need to ensure the budgetary treatment of 

P3 projects were compliant with lease scoring rules under Office of Management 

and Budget Circular A–11. 

Importantly, unless and until VA obtains the required authority, and has an opportunity to solicit feedback from the market, VA will not be able to act on potential 

P3 opportunities. 

COMPENSATION AND PENSION

Question 20. The criteria for survivor compensation are outlined on page VBA– 

68 of the FY 2017 budget request and include this as one of the potential paths to 

benefits: ‘‘[T]he Veteran was a former prisoner of war who died after September 30, 

1999.’’ Please clarify whether the September 1999 cutoff was used in VA’s budget 

projections and whether it is used in determining eligibility for survivor compensation. 

Response. 38 U.S.C. § 1318 governs the criteria for survivor compensation, also 

known as Dependency and Indemnity Compensation (DIC). Section 603 of the Veterans’ Benefits Act of 2010, Public Law 111–275 (October 13, 2010) removed the 

qualifying phrase, ‘‘who died after September 30, 1999’’ from 38 U.S.C. § 1318(b)(3), 

effective October 1, 2011. Therefore, this cutoff date is not used in determining eligibility for DIC and also was not used in VA’s budget projections. This cutoff date will 

be removed from the eligibility requirements in future budget submissions. 

VETERANS BENEFITS ADMINISTRATION

Question 21. The large number of appeals pending at VA—about 440,000—is a serious concern. 

A. The Inspector General’s office recently testified that, in order to reduce the 

backlog of disability claims, VA ‘‘re-allocat[ed] staff to process only claims that affect 

the backlog while sacrificing other types of claims such as those on appeal.’’ What 

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steps is VA taking to ensure that processing appeals is a priority for the Veterans 

Benefits Administration? 

Response. VBA has received and completed record-breaking numbers of disability 

compensation rating claims in recent years, which has resulted in corresponding increases in the volume of appeals. Over the past 20 years, VA appeal rates have held 

steady between 11 and 12 percent of the total volume of completed disability rating 

claims. VBA continues to prioritize rating claims as well as place additional focus 

on appeals. VBA is grateful for the funding that allowed us to hire 100 appeals FTE 

in FY 2015 and 200 appeals FTE in FY 2016. This fiscal year, VBA increased its 

appeals workforce from 1,195 employees to over 1,490 employees as of February 2016, and has allocated $10 million in overtime funds to support the appellate 

workload. VBA’s process improvements, such as the Veterans Benefits Management 

System (VBMS) and the National Work Queue (currently being deployed) are providing increased efficiencies in the claim process, and we are also focused on 

leveraging our technology initiatives in support of modernizing the appeals process. 

In a very short period of time, the NWQ-led efficiencies have resulted in the reduction in claims pending initial development, reduction in cycle times for claims waiting for a rating decision, and an equitable distribution of claims pending award and 

authorization. However, VA will not be able to provide Veterans with timely decisions on their appeals without legislative reform to streamline and modernize the 

appeal process and additional resources to timely work the current inventory of appeals. Without congressional action to authorize a new appeal process and appropriate funding for additional appeals FTE, VA’s appeals inventory will continue to 

grow and Veterans will have to wait much longer for a resolution of their appeals. 

VA is working to streamline the appeals process, an initiative that is one of VA’s 

‘‘12 Breakthrough Priorities.’’ In addition, a legislative proposal that VA developed 

with Veterans Service Organizations and other stakeholders is currently being considered in both the House of Representatives (H.R. 5083 and H.R. 5620) and the 

Senate (draft bill—SVAC Ranking Member Blumenthal). 

VA has brought together the Nation’s leading Veteran advocacy groups for their 

input. They are our steadfast partners in improving the way we deliver services to 

Veterans. 

As a result of that collaboration, VA has put forward a new proposal that would 

provide veterans with a simple, fair, and transparent appeals process in which, with 

the appropriate resources provided by Congress in future appropriations, the vast 

majority would receive a final appeals decision within one year of filing an appeal 

by 2021. This disentanglement of process is enabled by one crucial innovation—giving veterans multiple paths to adjudicate disputes on a claim, while preserving the 

effective date that the initial claim was filed. VA’s consensus proposal was put forward as a discussion draft by Ranking Member Blumenthal and was the subject of 

the Committee’s May 24, 2016, legislative hearing. 

This legislation would modernize the veteran appeals process, better serving veterans, taxpayers, and the Nation for years to come. 

B. Some prominent lawyers from Georgia have offered to organize attorneys from 

the American College of Trial Lawyers to volunteer their services to help resolve the 

appeals backlog. Will VA commit to closely examining possible options for them to 

help alleviate the backlog of appeals? 

Response. VA is committed to looking for ways to streamline and improve the appeals process. 

The Board has worked closely with the American Legion to find a way that the 

American College of Trial Lawyers (ACTL) can assist them in representing Veterans 

who present some of the most complex issues. The Board and the American Legion 

recently signed a Memorandum of Understanding creating a framework for ACTL 

to prepare Informal Hearing Presentations (IHP or briefs) on behalf of the American 

Legion, in order to move Veteran’s appeals more quickly to the Board for appellate 

review. The Board looks forward to receiving briefs in the near future from the attorneys of the ACTL. 

Question 22. Over the past year, the Inspector General has issued at least 15 reports finding that the Veterans Benefits Administration has not been taking timely 

action to reduce or discontinue benefits when required by the law and evidence and 

as a result may disperse millions of dollars in overpayments. Please describe what 

steps VA is taking—or plans to take—to ensure that the Veterans Benefits Administration is being a good steward of taxpayer dollars. 

Response. As VBA continues to receive and complete record numbers of disability 

compensation rating claims, the result is a corresponding increase in the volumes 

of non-rating claims (to include benefit reduction cases). VBA completed 3.1 million 

non-rating actions in FY 2015, the highest production of non-rating work in 20 years 

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and 72 percent more than in FY 2011. Benefit reviews and award adjustments involving reductions in benefits are often complex, multi-step processes that include 

due-process notifications prior to making the reductions. These cases frequently involve hearing requests and submission of additional evidence, which extends the 

processing timeframe. Overpayments can result from processing actions to remove 

a spouse or child; award adjustments required as a result of a Veteran’s receipt of 

Reserve/National Guard drill pay, changes in income, and numerous other statutory 

requirements. VBA continues to work to automate and streamline its claims processes including those that relate to benefit reductions highlighted below. 

• Removal of a dependent 

– DEPENDENCY RAPID RESPONSE PILOT—All VBA call centers now have the capability to handle dependency adjustments at the point of call, such as removing a spouse due to death or divorce. 

– ONLINE DEPENDENCY CLAIMS—VBA developed the Rules-Based Processing 

System (RBPS) to automate adjustments for adding or removing dependents. 

Over 60 percent of the dependency claims filed through RBPS are now automatically processed. 

• Drill Pay Adjustments 

– By law, Veterans cannot receive VA benefits and drill pay concurrently. VBA 

is working with DOD to streamline and automate the drill pay offset process 

through an upfront agreement from National Guard and Reserve members. This 

will help reduce the impact of drill reductions and improper payments per OMB 

Circular A–123 on improper payments. 

– VBA hired employees specifically to assist with non-rating work, initially focusing on drill pay offsets. 

• Adjustments to temporary 100 percent disability evaluations 

– VBA is developing a report that will enable ROs to more easily identify and 

take timely action on cases with temporary evaluations that require review to 

determine current level of disability. Beginning in April 2016, this report will 

be distributed to ROs on a weekly basis. 

• Pension Income Adjustments 

– VA now has access to a claimant’s SSA benefit information and reviews the 

information when processing an original or supplemental claim. VA also conducts annual computer matches with SSA for the purpose of verifying claimants’ social security benefit rates to ensure that VA is counting the correct 

rates. 

Question 23. The FY 2017 budget request includes this information regarding disability claims processing: ‘‘Increased automation now enables Veterans to file 

claims, upload evidence, and check the status of their claims on-line through 

eBenefits, helping to improve accuracy and productivity.’’ (Page VBA–158) 

A. Please quantify the impact automation has had on accuracy and productivity 

to date. 

Response. please refer to response to Question 23B. 

B. Please quantify what impact improvements in automation funded by the FY 

2017 budget request are expected to have on accuracy and productivity. 

Response. VBA has reduced the number of claims pending more than 125 days 

by 86 percent, from a peak of 611,000 in March 2013 to historic lows—79,004 claims 

as of March 31, 2016. VBA’s process improvements, such as VBMS and the National 

Work Queue (NWQ), continue to provide increased efficiencies in the claims process. 

By modernizing from a paper based system to an electronic claims processing system, VBA has increased its claim productivity per claims processor by 25 percent 

since 2011 and medical issue productivity by 82 percent per claims processor since 

2009. In 2017, VBA will build on the success of the transformation initiatives described below to continue this progress. 

Veterans Benefits Management System—VBMS, as VBA’s key business transformation initiative, provides a paperless claims-processing environment and improved business processes to support timely, high-quality decisions for Veterans and 

their dependents. VBA’s shift to electronic folders in VBMS addressed the inefficiencies of the paper folders and the problems of misplaced files and records. Through 

a web-based application, multiple, geographically separated users can view the electronic folders simultaneously, thereby minimizing the need for sequential processing 

and eliminating the delays of receipt of paper folders at ROs. VBMS also provides 

automation of processes such as the receipt of evidence, movement of claims to the 

next stage, and updates to the claims status, which means more Veterans are receiving faster decisions. As of March 7, 2016, VBA completed over 4.4 million rating 

decisions and processed over 2.5 million claims end-to-end in VBMS. In FY 2017, 

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VBMS will focus on the delivery of electronic service treatment records, establishing 

one authoritative source for Veteran contact information, and collaborating with the 

Board of Veterans’ Appeals to define the appeals functionality needed both at the 

regional offices and as part of the broader appeals modernization efforts. 

During FY 2017, VBA will continue expanding the delivery of the electronic service treatment records (STRs). In FY 2017, VBMS will be incorporating the Records 

Management Center (RMC) into VBMS in order to exchange electronic records. Benefits of this implementation include the ability to process requests from field endusers without using legacy systems. Additionally, field end-users will be able to view 

status requests, eliminating significant burden on the RMC to respond to inquiries 

and the cumbersome manual work needed in order to process an RMC records request using legacy systems. 

VBMS continues to enhance STRs requests from the Department of Defense 

(DOD). In FY 2017, this will include functionality previously received from legacy 

systems that would allow VBMS to obtain military service information and treatment records from the Health Artifact and Image Solution (HAIMS). Additional enhancements with the DOD includes receiving electronic STRs prior to discharge for 

Integrated Disability Evaluation Systems (IDES) claims as well as reporting 

functionality for subscriptions from VBMS to Data Access Service (DAS). 

On FY 2016, VBMS coordinated with US Digital Services to secure a five-percent 

level of effort in each VBMS release in support of the appeals modernization efforts. 

At this time, that five-percent level of effort will continue in FY 2017 to support 

the appeals modernization integration efforts in VBMS. 

Question 24. The FY 2017 budget request (page VBA–162) includes this information regarding the Veterans Benefits Management System: 

[The Veterans Benefits Management System] has supported quicker and 

more accurate delivery of benefits to millions of Veterans and beneficiaries. 

In addition, the system has improved the overall speed, accuracy, and consistency of decisions for Veterans by providing the tools the workforce needs 

to meet growing demand and claim complexity. 

A. Please quantify the impact the Veterans Benefits Management System has had 

on the speed, accuracy, or consistency of decisions to date. 

Response. Please refer to response to Question 23 under the paragraph ‘‘Veterans 

Benefits Management System.’’ 

B. Please quantify what impact future improvements to the Veterans Benefits 

Management System are expected to have on the speed, accuracy, or consistency of 

decisions. 

Response. Ongoing positive impact to speed, accuracy, and consistency is expected 

with VBMS functionality planned for FY 2016 and FY 2017. One of VBA’s priorities 

remains the reduction of reliance on legacy systems with a specific focus on decreasing the number of times a user would need to exit VBMS to perform claims processing tasks, allowing for greater consolidated processing. 

VA will retire legacy systems when mission needs change, when a new system 

(e.g. VBMS) has taken on the capabilities of an old system, when system consolidation will improve Veteran service delivery, or when the system is no longer supported by a vendor. As VBMS continues to progress and evolve, development of 

functionality to encompass other areas of work may provide the opportunity to decommission legacy systems. 

Rating Board Automation (RBA) 2000 is one of 11 applications included in the 

Veterans Service Network (VETSNET) suite. It was previously used to complete disability rating decisions, but these capabilities are now provided by VBMS. There are 

currently no active RBA 2000 users as this application was retired on January 21, 

2016. 

While we are unable to provide a timeframe for retirement of other legacy systems, VBA expects to have identified the functionality needed to fully transition 

from the Modern Award Processing Development (MAP-D) and VETSNET awards 

applications to VBMS by December 31, 2016. Efforts are also underway toward retirement of Virtual VA and future functionality in VBMS will support those efforts 

as well. 

VBA will collaborate with the VA Office of Information and Technology to accurately address cost and savings projections for IT Appropriations and provide a response by September 30, 2016. 

Question 25. According to the FY 2017 budget request, VA is requesting $1.1 billion for ‘‘Other Services’’ for the Veterans Benefits Administration, a $219 million 

increase over the current estimate for FY 2016. (Page VBA–173) Please provide an 

itemized breakout of how those funds would be expended in FY 2017. 

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Response. The discretionary request for $1.1 billion contains contract funding of $732.8 million that directly impacts or supports the delivery of disability compensation claims; $171.6 million to support the delivery of education, vocational rehabilitation and employment, and home loan benefits; and $178.0 million to support mission requirements: 

• Contract Medical Examinations ($530.0 million) • Veterans Claims Intake Program (scanning) ($138.7 million) • Costs associated with centrally managed services to include Financial Service 

Center, Debt Management Center, National Archives and Records Administration, 

Homeland Security, and Human Capital Improvement Program ($110.1 million) • Transition Assistance Program ($106.9 million) • Support contracts to provide analytics and innovative Programmatic tools (VA 

Loan Electronic Reporting Interface, Real Estate Owned and Portfolio Servicing 

Contract (RPSC), and Appraisal Management Service (AMS)) for VA’s Home Loan 

Program to service and protect loans for Veterans ($57.0 million) • Program management and systems engineering support services for VBMS ($28.8 million) • Centralized Mail Processing System ($26.7 million) • Support contracts for strategic initiatives and solutions enabling an efficient op- erating environment ($21.9 million) • Mission support contracts for VBA’s 56 regional offices to include VR&E contract counseling, security, maintenance and repairs, GSA overtime utilities, and 

PCS related expenses ($29.3 million) • Mission support contracts for VBA central office to include studies and analyses 

to improve delivery of benefits, technical expertise for key initiatives, and maintenance and repairs ($21.4 million) • Instructional methodologies and systems that support the training and skills development of the disability compensation workforce ($8.6 million) • Coordination of business requirements to provide continued execution of VR&E 

programs and a longitudinal study and field staffing model to improve and enhance 

Veterans’ programs and benefits ($3.0 million) 

Question 26. According to the FY 2017 budget request (page VBA–192), Quality 

Review Teams completed 178,506 in-process reviews during FY 2015 and VA expects those teams to complete 240,000 in-process reviews each year during FY 2016 

and FY 2017. 

A. How many employees were dedicated to Quality Review Teams during FY 2015 

and how much in total was expended for that purpose? Response. In FY 2015, VBA obligated $71.3 million to support 771 Quality Review 

Specialists (QRSs) assigned to the Quality Review Teams (QRTs). 

B. How many employees are expected to be dedicated to Quality Review Teams 

during FY 2016 and FY 2017 and how much in total would VA expect to expend 

for that purpose during those years? 

Response. As of March 2016, VBA has 784 QRT members. The ratio of QRSs to 

claims processors will remain unchanged, resulting in consistent staffing levels for 

FY 2016 and FY 2017. VBA estimates it will obligate approximately $73.9 million 

and $76.4 million, respectively. 

C. What factors account for the expected increase in the number of in-process reviews completed during FY 2016 and FY 2017? 

Response. In 2015, the QRTs were able to complete 178,506 in-process reviews 

(IPRs) as a result of performing this task on overtime. In 2016, the QRTs will not 

be performing this task on overtime. The standard goal of required IPRs for each 

station is 10 percent of its monthly production; therefore, the anticipated number 

of IPRs for FY 2016 is 120,000. The goal for completed IPR reviews nationwide for 

FY 2016 and FY 2017 remains at 120,000 IPR reviews for each fiscal year, for a 

combined total of 240,000 IPR reviews. 

Question 27. According to the FY 2017 budget request (page VBA–203), more than 

70,000 non-rating actions were completed by the Dependency Claims contractor during FY 2015. 

A. In total, how much has VA expended on the Dependency Claims contractor and 

how much, if any, does VA plan to expend during FY 2016 and FY 2017? Response. VA spent approximately $4.8 million on the Dependency Claims contract from April 21, 2014, to January 20, 2016. VA anticipates spending approximately $2.4 million per year for FY 2016 and FY 2017. 

B. How many non-rating actions does VA expect the Dependency Claims contractor to complete during FY 2016 and during FY 2017 

Response. In FYs 2016 and 2017, VA anticipates completion of approximately 

30,000 non-rating actions per year. 

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Question 28. According to the FY 2017 budget request (page VBA–54), VA uses 

Internal Revenue Service and Social Security Administration records to verify income levels of certain beneficiaries and that process ‘‘is the most efficient and effective means VA has of verifying certain types of income, wages, interest, dividends, 

annuities, etc.’’ On the other hand, the Government Accountability Office made this 

finding in a report last year: 

VA does not use available third-party earning data to verify veterans’ selfattested employment history and income information. Without such 

verification, VA cannot adequately ensure that the eligibility standards are 

being met, which places these benefits at risk of being awarded to ineligible 

veterans. 

A. Please provide the Committee with additional information about the process 

currently used to verify beneficiary incomes and any additional options VA plans to 

explore if this budget is adopted. 

Response. Under current data sharing agreements with the Internal Revenue 

Service (IRS) and the Social Security Administration (SSA), VA utilizes an upfront 

income verification process, which allows pension management centers to verify a 

beneficiary’s reported income. This approach allows VA to maintain the integrity of 

its program, while also reducing improper payments. VA is continuing to work with 

IRS and SSA to expand this process to all pension-related benefit claims, regardless 

of the issue, and disability compensation claims based on individual unemployability. VA anticipates expansion of this process by June 2016. 

In addition, VBA is transitioning from the paper-based Income Verification Match 

(IVM) process to a semi-automated, electronic post award audit (PAA) process. In 

FY 2012, VBA temporarily suspended the release of all paper IVM worksheets to 

allow for the development and implementation of the PAA process. The PAA process 

will provide more focused reviews of VA beneficiaries receiving benefits based on 

self-reported income information to ensure continued program entitlement. VBA is 

working with VA’s Office of Information and Technology to finalize the necessary 

system requirements and anticipates implementing the PAA process by September 2016. 

Question 29. During FY 2015, how much in total did VA expend with respect to 

the Integrated Disability Evaluation System (IDES) and how many VA employees 

were dedicated to the IDES process? During FY 2016, how much in total does VA 

expect to expend with respect to IDES and how many VA employees will be dedicated to the IDES process? During FY 2017, how much in total is VA requesting 

with respect to IDES and how many VA employees would that level of funding 

support? Response. VA’s total for FY 2015 was approximately $75,777,099, which excludes 

VHA for the reasons listed below: 

Office of Policy and Planning (OPP)—During FY 2015, OPP spent approximately 

$1,177,099 which is comprised of $583,692 for a program management support contract, $573,407 in salary for 5 FTE, and $20,000 in travel costs. 

Veterans Health Administration (VHA)—VHA does not provide separate funding 

for the IDES Program. Commencing in FY 2014, funding for this program has been 

included in VHA’s Veterans Equitable Resource Allocation (VERA) model. Staffs located at the VA medical centers (VAMCs) are not solely dedicated to supporting the 

IDES process. 

Veterans Benefits Administration (VBA)—In FY 2015, VBA spent approximately 

$74.6 million for salaries and other GOE for 638 FTE dedicated to disability claims 

processing in the Integrated Disability Evaluation System (IDES). Compensation 

staff and Vocational Rehabilitation and Employment (VR&E) counselors are included in this count. Veterans filing claims through the IDES sites are captured in 

the nationwide Veteran caseload count and total compensation benefit obligations; 

therefore, mandatory funding cannot be separated for this program. 

Response. VA’s estimated total for FY 2016 is $77,387,332 which excludes VHA 

for the reason listed below: 

OPP—During FY 2016, OPP should spend approximately $1,187,332, which is 

comprised of $586,242 for a program management support contract (Final Option 

Year), $581,090 in salary for 5 FTE, and $20,000 in travel costs. 

VHA—VHA does not provide separate funding for the IDES Program. Commencing in FY 2014, funding for this program has been included in VHA’s Veterans 

Equitable Resource Allocation (VERA) model. Staffs located at the VAMCs are not 

solely dedicated to supporting the IDES process. 

VBA—During FY 2016, VBA estimates it will spend approximately $76.2 million 

to support 638 FTE dedicated to disability claims processing in IDES. 

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Response. VA’s estimated total for FY 2017 is $79,030,375, which excludes VHA 

for the reason listed below: 

OPP—During FY 2017, OPP should spend approximately $1,230,374, which is 

comprised of $600,000 for a new program management support contract if needed, 

$590,374 in salary for 5 FTE, and $40,000 in travel costs. The increase in travel 

is to fund increased site visits to the field. 

VHA—VHA does not provide separate funding for the IDES Program. Commencing in FY 2014, funding for this program has been included in VHA’s VERA 

model. Staffs located at the VAMCs are not solely dedicated to supporting the IDES 

process. 

VBA—It is expected that in FY 2017, VBA will maintain staffing at the Providence and Seattle Disability Rating Activity Sites (DRAS) at the same FY 2015/FY 

2016 levels and $77.8 million will support 638 FTE. 

Question 30. The budget notes that, in 2015, the Insurance Program contacted 

1,900 veterans per month as part of a special outreach program. Among the veterans contacted in 2015, how many obtained insurance coverage? 

Response. In FY 2015, the special outreach program contacted a total of 23,033 

Veterans (for an average of 1,919 per month). A total of 8,235 Veterans’ Group Life 

Insurance policies were issued to those Veterans contacted, i.e., 35.8 percent were 

granted insurance coverage. 

Question 31. To date, how many unique awards have been provided to an estate 

of a deceased Nehmer class member and what is the total award amount? 

Response. As of March 2016, VA has awarded $440,435,895 in monetary benefits 

to individuals or estates as survivors of deceased Nehmer beneficiaries as required 

under 38 CFR 3.816(f) to 11,991 individuals. This amount includes persons who paid 

funeral or last medical expenses on behalf of the Veteran’s estate. 

BOARD OF VETERANS’ APPEALS

Question 32. According to the FY 2017 budget request (page BVA–280), the Board 

of Veterans’ Appeals is undertaking a number of initiatives other than legislative 

reforms to attempt to improve productivity. Please quantify what level of productivity improvements those efforts are expected to produce. 

Response. 

TRANSFORMING THE APPEAL PROCESS

VA has made significant progress on its goal to eliminate its disability claims 

backlog and improve the quality of its initial decisions on claims without seeking 

significant statutory changes. VBA Transformation Plan focuses on improving personnel performance, redesigning business processes, and replacing paperbound and 

manual systems with those that are digital and automated. As outlined in VA’s appeals plan, VBA and the Board of Veterans’ Appeals (Board) can deploy similar people, process, and technology innovations in the appeal process, but those innovations 

will not provide a real solution without stakeholder support. In this regard, the appeals problem is unique, and one should not view this preliminary plan as providing 

a comprehensive solution. Absent a comprehensive solution that considers the 

unique statutory procedures that govern VA’s appellate system, VA will use its limited resources as efficiently as possible to decide appeals under the inefficient process required under existing law. 

Current law requires that VA maintain a non-linear, multi-step, open-record, administrative appeal process, with jurisdiction over various steps in the process split 

between VBA and the Board. There is no bright line distinguishing the end of VBA’s 

claim adjudication process from the beginning of the appeal process. Unlike a typical appeal process in which the appellate body reviews the same record as the initial decisionmaker, VA’s administrative appeal process has an open record. Under 

the current framework, appellants, at no cost and without limitation, may submit 

additional evidence at virtually any time during the pending appeal, regardless of 

whether the appeal is at VBA or the Board, and VBA must generally reevaluate the 

claim based upon the new evidence. This feature prolongs the amount of time that 

Veterans must wait for their appeal to be decided and commits extensive resources 

to each appeal. As a result, Veterans who receive their initial decisions from VBA 

in 125 days under the Transformation Plan will nonetheless endure an inefficient 

VA appeal process. The delays in a benefits system that delivers an initial decision 

within 125 days and an appellate decision on average in more than 1,000 days may 

outweigh any benefit to a multi-step, open-record system. Although some individual 

claimants may be able to take advantage of the current legal framework, it comes 

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at the cost of failing to provide Veterans as a whole a timely resolution on their 

appeals. 

VBA’s Transformation Plan for the initial claim process is structured for the future (more than one million claims annually, multiple complex medical issues in 

each claim, and electronic submission and processing), while the appeal process set 

out in current law is an accumulation of processes and procedures that have built 

up in stages since WWI. The legal framework of the appeal process precedes the 

all-volunteer military force, the computer revolution, and judicial review of VA’s decisions on claims. For example, the Fully Developed Claims program encourages 

claimants and representatives to build and submit claims before VA renders a decision, while the appeal process encourages them to build their claims after a decision 

by allowing subsequent submission of evidence in a piecemeal fashion. 

VA’s Appeals Transformation Plan requires integrated legislative, people, process, 

and technology initiatives designed to deliver a final agency decision for most Veterans within a year of filing by 2021. As noted above, the current VA appeals process which is set in law, is broken, and is providing Veterans a frustrating experience. It has no defined endpoint and requires continuous evidence gathering and readjudication of the same or similar matter. The present legal framework is complex, 

inefficient, ineffective, and confusing, and Veterans wait much too long for final resolution of an appeal. Currently, we face an important decision about the future of 

appeals for Veterans, taxpayers and other stakeholders. 

If Congress accepts that the current VA appeals process is broken and that the 

status quo is unacceptable for Veterans, then there is a choice to be made regarding 

how to provide Veterans with a timely appeals decision. The 2017 Budget Request 

outlined that there are essentially two options for ensuring that Veterans receive 

timely appeals decisions: (1) implement legislative change to streamline the process 

for new appeals and provide a short-term increase in funding from 2017 to 2021 to 

address the currently pending 458,000 appeals, or (2) provide significant sustained 

funding (approximately $1B per year from 2017 on) to continue applying the current 

inefficient, complex, and confusing VA appeals process. Since submission of the 2017 

Budget Request, VA participated in an appeals summit, during which representatives from a wide spectrum of stakeholder groups met with key officials from VBA 

and the Board to determine how to best reconfigure the current VA appeals process. 

The result of that summit was a new appeals framework, as encompassed in Senator Blumenthal’s draft bill examined in the Committee’s May 24 legislative hearing, which if enacted will provide Veterans with timely, fair, quality decisions. If we 

fail to act now, the magnitude of the problem will continue to compound, such that 

by the end of 2027, Veterans will be waiting on average 10 years for a decision on 

their appeal. However, VA cannot fully transform its appeal process without stakeholder support. VA intends to work with Congress and other stakeholders to pursue 

the comprehensive legislative change required to provide Veterans the timely appeals process that they deserve. 

PEOPLE INITIATIVES

VBA is grateful for funding to hire 100 appeals FTE in FY 2015 and 200 appeals 

FTE in FY 2016. In FY 2016, VBA has increased its appeals workforce to 1,495 employees as of January 2016. To maximize productivity and accuracy of appeals decisions while at the same time minimize training on VA’s complex appeals process, 

VBA hired new employees into the disability claim processing teams and moved seasoned claims processors into the appeals teams. 

In FY 2015, the Board was able to hire staff to continue supporting its mission 

to serve more Veterans and their families. Specifically, in order to both maintain 

staffing levels and increase capacity where possible, the Board hired 82 staff (including new hires and backfills for attrition), the majority of which were attorneys 

(68). 

If allocated by Congress, the Board will begin the recruitment process for the 242 

additional employees immediately upon enactment of the FY 2017 budget in order 

to support execution of the funding by the end of the fiscal year. In advance of the 

actual job announcement, the Board is working with the Office of Personnel Management on an aggressive strategic recruitment plan, to ensure successful execution. 

The 242 additional employees will primarily consist of staff attorneys to draft appeals decisions, with an appropriate complement of administrative support staff and 

some additional judges. For new attorney staff, the Board has a 6-month training 

curriculum to ensure thorough training on Veterans benefits law. New judges will 

undergo rigorous initial training with follow-up mentoring and continuing education 

for both legal training and leadership training. Administrative staff will also undergo new employee training specific to their business line. Most of the 242 employees 

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would be staff attorneys. Specifically, the goal is for 145 attorneys, 24 judges, and 

73 support staff. 

Taking lessons learned from the 2013 hiring surge of 100 attorneys in a 4-month 

timeframe, the challenges faced would include human resources support, information technology (IT) support, training support, and office space. These challenges 

would be handled by having a strong recruitment plan in place this year, in advance 

of the budget enactment, with a tiger team of dedicated personnel to handle the recruitment and on-boarding. The IT needs would also be identified in advance, with 

a streamlined plan to have the necessary equipment in place in a timely fashion 

as new hires were on-boarded. The training needs would be handled by having a 

strong training plan in place, using lessons learned from the large training in 2013, 

and subsequent trainings. Finally, the office space requirements would be handled 

by a combination of repurposing existing space for storing paper claims files, and 

increasing telework for eligible employees. 

PROCESS INITIATIVES

(a) STANDARD NOTICE OF DISAGREEMENT FORM

On March 24, 2015, VA’s final rulemaking, RIN: 2900-AO81, Standard Claims 

and Appeals Forms, became effective. This rulemaking requires claimants to initiate 

an appeal using a standard notice of disagreement (NOD) form in cases where such 

a form is provided by VA. The purpose of this standardization is to improve communications with appellants at the beginning of the appeal process and allow VBA personnel to easily identify and initiate the processing of an appeal. By using the 

standard form for initiating an appeal, VA need not undergo an inefficient interpretive exercise as to whether a given document is a NOD and can process appeals 

more expeditiously. By requiring the use of a standard NOD form, all appellants in 

the appeal process will benefit from shortened processing time and from increased 

accuracy in identifying contentions claimed. 

VA has also recently amended the NOD form to allow claimants to elect either 

de novo review or the traditional appeal process at the time the appeal is initiated. 

Appeals processing times will be reduced for those claimants who make the election 

on the form as VA will not have to wait an additional 60 days for the claimant to 

make the election to begin processing the appeal. 

(b) CENTRALIZED MAIL

In May 2014, VBA and the Board initiated a plan to integrate the Board with 

VBA’s Centralized Mail process. In June 2014, the Board formally partnered with 

VBA’s Office of Business Process Integration (OBPI) to begin implementation of 

Centralized Mail at the Board. The Board has worked very closely with OBPI, 

leveraging best practices from VBA to implement similar change management strategies by having the Board’s mailroom team jointly evaluate the current, As-Is state 

and develop the future, To-Be state to optimize efficiencies in mail processing. The 

Board is now currently piloting centralized mail with VBA, and is executing the first 

phase of this initiative. During this first phase, the Board is shipping appeals-related mail to the scanning vendor. Once scanned, the scanning vendor seamlessly 

uploads the mail to the Board’s Centralized Mail portal, from which the mail can 

be electronically processed by Board staff. 

In the second phase of the Board’s centralized mail initiative, Veterans will be 

able to send their appeals-related mail directly to a new mailing address established 

for the Board, which will be a P.O. Box affiliated with the scanning vendor. Once 

successful testing of use of the Board’s new P.O. Box has been completed and 

verified, a regulatory change to the Code of Federal Regulations will be published 

to update the Board’s mailing address. 

(c) BOARD HEARINGS

Current law entitles an appellant to an in-person hearing before the Board at its 

principal location in Washington, DC, or, more frequently, at the appellant’s local 

VBA RO. 38 U.S.C. § 7107(d) (1). The Board is also authorized to offer an appellant 

a videoconference hearing in cases where the appellant is at the RO and the Veterans Law Judge (VLJ) is in Washington, DC; however, an appellant must affirmatively choose this type of hearing. Statistically, videoconference hearings have been 

shown to have the same grant rate as in-person hearings. However, the wait times 

for in-person hearings at ROs (also known as Travel Board hearings) are much 

greater than for videoconference hearings because VLJs must travel to conduct 

hearings. 

Beginning in June 2015, the Board hosted productive meetings with members of 

Veterans Service Organization (VSO) leadership to discuss general items of interest, 

including case inventory, the hearing workload, and hearing wait times. As a result 

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of these meetings, VSO leadership agreed to take the lead on clarifying the validity 

of pending hearing requests with their clients. To facilitate the VSO initiative to 

clarify the validity of pending hearing requests with their clients, the Board provided the VSO workgroup members with hearing data, including a list of each 

VSO’s clients with a pending hearing request, average hearing wait time data by 

RO, and hearing show rate data for each RO. 

VBA’s Office of Field Operations is continuing to employ best practices for scheduling hearings. Additionally, to better align Veteran expectations with the current 

process, the workgroup has discussed implementation of moving hearing election 

from the VA Form 9 to the arrival of case at the Board and discussed discipline in 

rescheduling hearings following a no show, or repeated requests for postponement. 

Despite these efforts to increase efficiency in scheduling and conducting Board 

hearings, significant legislative reform related to Board hearings is required. Senator Blumenthal’s draft bill examined in the Committee’s May 24 legislative hearing 

provides such reform. That legislation provides that the Board will determine 

whether a Board hearing will be held either (1) at the Board’s principal location or 

(2) by picture and voice transmission at a VA facility with suitable facilities and 

equipment. Providing for these two types of Board hearings, the draft bill retains 

a Veteran’s ability to present testimony before a Veterans Law Judge, but improves 

the appeals process by providing for two types of Board hearings which may be 

scheduled and conducted much more efficiently, and at decreased cost to the taxpayer, than in-person hearings at VA facilities other than the Board’s principal location. If, after being notified of the type of hearing selected by the Board, a Veteran 

would prefer the other type of hearing; he or she may make such request, which 

will be granted by the Board. Veterans retain the ability to present testimony during a Board hearing, either in-person before a Veterans Law Judge in Washington, 

DC, or via videoconference, but the costly and inefficient in-person hearing at the 

RO (Travel Board hearing) is eliminated. 

The draft bill also improves the appeals process for Veterans who do not want a 

Board hearing. The cases of all Veterans, regardless of whether or not they have 

requested a Board hearing, must be decided in docket order, with an exception for 

cases that have been advanced on the docket. The draft bill, however, establishes 

two separate dockets; a hearing-option docket and a non-hearing option docket, and 

allows cases before the Board to be decided in regular order according to their respective place on either docket; retaining an exception for cases advanced on the 

docket. The creation of two separate dockets allows these two different types of appeals to be better managed, and will result in increased efficiency, particularly for 

those Veterans with cases on the non-hearing option docket. 

(d) ALLOCATION OF HEARING RESOURCES

To ensure that available hearing resources are being maximized for Veterans and 

other appellants across the 56 ROs, the Board thoroughly re-evaluated hearing data 

regarding utilization rates, oldest docket date cases at each RO, and individual 

hearing demand by hearing type at each RO when creating the 2016 hearing schedule. With regard to Travel Board (TB) hearings (face-to-face hearings conducted at 

the RO), the approach was to ensure that available resources were maximized for 

Veterans by assigning hearing dockets based on each RO’s historical hearing utilization rate and its pending TB hearing request volume. With regard to video teleconference hearings (conducted between the Board and the RO), the approach was 

to target ROs with the oldest pending hearing requests by focusing on those requests with a docket date that is within the Board’s docket date range at the time 

of scheduling formulation. This data-driven model will ensure that limited hearing 

resources (i.e., approximately 16,000 available hearing opportunities per year with 

65,000 Veterans currently awaiting a hearing) are being most efficiently allocated 

to address the growing volume of pending hearing requests. 

(e) CUSTOMER SERVICE IMPROVEMENTS

Consistent with the MyVA initiative of improving the Veteran experience, in 2015, 

the Board initiated a ‘‘Veteran Experience Workgroup’’ to leverage Veteran feedback 

from the Board’s ‘‘Voice of the Veteran’’ survey, and to make meaningful improvements for veterans as they navigate the appeals process. This group of employees 

from across the Board, including Judges, attorneys, administrative staff, and managers, is focused on identifying areas prime for improved customer service, including 

Contacts Experience, Hearing Experience, Decision Experience, and Appeals Process 

Experience. Through continued dialog on these critical areas, the group anticipates 

generating results-oriented solutions to improving the Veterans’ experience with the 

VA appeals process. 

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TECHNOLOGY INITIATIVES

Appeals Modernization 

The Department is leading an Appeals Modernization initiative to better serve 

Veterans and their families and provide timely and quality appeals decisions. As a 

part of this broad initiative, information technology funds have been requested to 

develop robust paperless functionality in the VA appeals process. This effort is part 

of the Board’s multi-pronged approach to leverage technology, people, process improvements, and long-needed sweeping legislative reform to most effectively serve 

Veterans and their families in the efficient processing of appeals. 

Appeals across the Department are currently processed in a hybrid environment— 

with continued reliance on paper, and multiple unsynchronized, outdated legacy systems. Manual data entry and lack of appeals-specific paperless functionality creates 

risk for the Department in workload management, as well as processing delays. 

Currently, there is minimal appeals-specific paperless functionality in the technology systems, which creates inefficiencies in end-to-end appeals processing. 

VA has seen the benefits of people, process and technology transformation at the 

claims level with increased claims decisions being issued and more Veterans being 

served—almost 1.4 million in 2015; the same rigorous, multi-pronged efforts to modernize must be applied to the appeals process. The Board is leading this Appeals 

Modernization initiative, which includes robust IT and FTE components, in order 

to mitigate risks and to provide timely service to Veterans and their families. Notably, with appeals-specific technology functionality enhancements, Veterans and their 

families will directly benefit through issuance of more appeals decisions more efficiently. In addition, the Department anticipates gaining future cost savings by being 

able to retire or ‘‘sunset’’ outdated and unsynchronized legacy systems exclusively 

used for appeals processing, such as the Veterans Appeals Control and Locator System (VACOLS), which was created in the 1980s. 

With FY 2016 IT funding enacted, the Department will be able to begin a multiphase process of enhancing appeals functionality in the paperless environment. 

These enhancements are necessary to keep pace with the transformation of benefits 

processing that has occurred on the front end (i.e., claims) of the VA benefits system. Initial key appeals-specific functionalities in the paperless environment will 

focus on seamless integration of systems, and key accountability and workability 

features. 

The Department and Board are appreciative of the attention and funding that has 

been provided to directly address the technology voids that will become increasingly 

problematic without implementation of the proper solutions. In preparation for execution of FY 2016 funds, in FY 2015, the Board performed the necessary due diligence and analysis of relevant business requirements to understand the current 

state of appeals processing and create the structure to enable delivery of technology 

capabilities in FY 2016 and beyond. In FY 2016, the United States Digital Service 

at VA (DSVA), using the approach described in detail below, will undertake the replacement of VACOLS system, created in the 1980s, and provide the Department 

with more secure and efficient processing capabilities. The new tool, called Caseflow, 

will consist of both commercial off the shelf (COTS) and custom-developed software, 

as dictated by the needs of the Department. The majority of funds in FY 2016 are 

to be allocated to contractor support that will be working with the Digital Service 

Team to design and develop required technology components. These components will 

build on the first deliverable of FY 2016, Caseflow Certification, which introduces 

automation and consistency to the process of transferring appeals from local field 

offices to the Board. The second most significant use of FY 2016 funds supports the 

planned acquisition of an eReader COTS product, a tool that will enable attorneys 

and Judges at the Board to efficiently and effectively review electronic appeals documents in a best-practice manner. 

UPDATES TO VBMS FOR APPEALS PROCESSING

Automation 

VBA’s VBMS office is working on leveraging existing VBMS infrastructure to gain 

efficiencies in processing appeals using calculator tools and rules-based automation. 

eFolder Infrastructure 

The VBMS eFolder is the electronic replacement for the legacy paper claims folder. The eFolder serves as the primary repository for all electronic documentation related to a particular Veteran. Users would access the eFolder to review all documentation relevant to a Veteran’s claim. This would include internal and external 

stakeholders such as VHA practitioners and VSO representatives. Unlike the paper 

169 

claims folder, the VBMS eFolder supports simultaneous access of multiple users to 

a single Veteran’s eFolder. 

Correspondence Component 

A key component of the new appeals system would be to leverage the new enterprise correspondence component, which is a highly customizable correspondence assembly engine that provides document design functionality and a business-rules engine that enables full automation of letter assembly. 

SWEEPING LEGISLATIVE REFORM NEEDED TO MODERNIZE THE APPEALS PROCESS

While VA is applying lessons learned from the transformative changes that allowed it to reduce the disability claims backlog, and applying people, process, and 

technology initiatives to the appeals process to gain efficiency in the way appeals 

are managed and processed, these measures will not be enough. Fundamental legislative reform is essential to ensure Veterans have a timely, fair, and quality appeals 

process. To this end, the President’s 2017 Budget proposed a simplified appeals initiative—legislation and resources—to provide most Veterans a final decision on their 

appeal within one year of filing by FY 2021. VA intended that the legislative proposals in the 2017 Budget would be the starting point for the broader conversation 

about how the Department, Congress, VSO, and other stakeholders can work together to provide Veterans with a simple, timely, transparent, and fair appeals 

process. 

VA has brought together the Nation’s leading veteran advocacy groups for their 

input. They are our steadfast partners in improving the way we deliver services to 

veterans. 

As a result of weeks of listening as a result of that collaboration, VA has put forward a new proposal that would provide veterans with a simple, fair, and transparent appeals process in which, with the appropriate resources provided by Congress in future appropriations, the vast majority would receive a final appeals decision within one year of filing an appeal by 2021. This disentanglement of process 

is enabled by one crucial innovation—giving veterans multiple paths to adjudicate 

disputes on a claim, while preserving the effective date that the initial claim was 

filed. VA’s consensus proposal was put forward as a discussion draft by Ranking 

Member Blumenthal and was the subject of the Committee’s May 24, 2016, legislative hearing. 

This simple change, along with a few others, will modernize the Veteran appeals 

process, better serving Veterans, taxpayers, and the Nation for years to come. However, since it was layer upon layer of law that got us tangled, VA will need Congress’ help to untangle it, and has been working to make this legislative change a 

reality, and soon. 

INFORMATION TECHNOLOGY

Question 33. The Secretary’s testimony at the budget hearing notes significant investment in improving and automating processes related to claims for various benefits, including compensation, pension, and education benefits. The Committee has 

heard in previous testimony about how certain changes to benefits eligibility often 

incur relatively high costs just to modify processing systems to accommodate the 

new rules. Please explain where these various benefits claims systems are in their 

overall development timeline and what future changes to eligibility will look like in 

terms of time and cost once development is complete. 

Response. The Office of Information & Technology (OI&T) has utilized the Project 

Management Accountability System (PMAS) to ensure that VA is developing quality 

products and overseeing investments responsibly. However, the process has been 

found to be overly burdensome, administratively heavy, and has inadvertently contributed to increases in project length and overall cost. 

To decrease the time to market and lower the overall cost of development, OI&T 

is pursuing several alternate efforts. First and foremost, OI&T is working closely 

with VHA, VBA, and BVA on several system modernization efforts—including the 

BVA modernization effort—that improve the business processes, application of rules, 

and the replacement of out-of-date software applications with new technology. A 

summary of these efforts is included in this response. 

OI&T is also introducing a new development process called the Veteran-focused 

Integration Process (VIP). VIP utilizes an agile approach to software development 

with one single, unified, streamlined release process to deliver high-quality, secure 

IT capabilities to our Veterans. The VIP process will be governed by the new Enterprise Portfolio Management Office (EPMO). The EPMO provides a consolidated, enterprise-wide approach to identifying, selecting, prioritizing, and successfully exeVerDate Mar 15 2010 19:02 May 01, 2017 Jkt 000000 PO 00000 Frm 00173 Fmt 6633 Sfmt 6621 Z:\ACTIVE\022316.TXT PAULIN
170 

cuting a technology portfolio of projects. It will also emphasize the accumulation of 

domain knowledge by VA resources and the appropriate allocation of those resources 

to ensure that OI&T can react more quickly and efficiently to business changes. 

Once development is complete on the current suite of Benefits products, the expectation would be that any future enhancements would be able to be done more quickly and at a lesser cost. This is owed to the fact that these are being developed with 

a Service Oriented Architecture in mind which helps ensure changes are less extensive to accommodate new eligibilities. 


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RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. DEAN HELLER TO

U.S. DEPARTMENT OF VETERANS AFFAIRS

Question 34. As you know, at the end of 2015, the Senate passed legislation to 

extend the one-year protection from foreclosure in the Servicemembers Civil Relief 

Act through 2017. 

Unfortunately, although there was support in 2012 and 2014 to ensure this oneyear protection was maintained, the House has not yet acted on this legislation, resulting in the expiration of this protection at the end of 2015. Now, servicemembers 

only receive 90 days of foreclosure protection, right in the midst of their transition 

to civilian life. 

Do you believe this one-year protection from foreclosure is beneficial to veterans 

who are transitioning to civilian life? Are you supportive of an extension of the oneyear protection from foreclosure? 

Response. The Servicemembers Civil Relief Act (SCRA) is intended to ease the 

economic and legal burdens on military personnel during their active service or at 

the conclusion of active service by postponing, suspending, or mitigating various 

types of obligations, including mortgage loans. This assistance is critically important 

as military personnel transition out of active service. VBA supports the extension 

of the one-year protection from foreclosure. 

RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. MIKE ROUNDS TO

U.S. DEPARTMENT OF VETERANS AFFAIRS

Question 35. The one-year protection from foreclosure in the Servicemembers Civil 

Relief Act expired at the end of 2015 and reverted back to 90 days. Congress acted 

in 2012 and 2014 to make certain the protection stayed at one year, and the Senate 

passed a bill to extend for two more years through 2017 but the House has not yet 

acted. Do you feel the one-year protection from foreclosure has been helpful to veterans as they re-acclimate to civilian life? Would you support an extension of the 

one-year protection from foreclosure? 

Response. The SCRA is intended to ease the economic and legal burdens on military personnel during their active service or at the conclusion of active service by 

postponing, suspending, or mitigating various types of obligations, including mortgage loans. This assistance is critically important as military personnel transition 

out of active service. VBA supports the extension of the one-year protection from 

foreclosure. 

RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. DAN SULLIVAN TO

U.S. DEPARTMENT OF VETERANS AFFAIRS

VETERANS’ CHOICE, ALASKA PILOT PROGRAM

Question 36. Secretary McDonald, please expand on what progress has been made 

on the Alaska pilot program as of March 7, 2016. 

Response. We are making progress with the Alaska Choice Pilot Program. As of 

March 7, 2016, the contract revisions have undergone legal review, and we are in 

the process of defining and gathering data points for measuring success of the pilot. 

Furthermore, the hiring of additional staff to accommodate the need of the pilot is 

currently at 75 percent complete. 

The Community Care Office developed and submitted a contract modification to 

the Denver Acquisition and Logistics Center (DALC) supporting a VA pilot in Alaska. The pilot program allows for Alaska VAMC staff to directly coordinate and 

schedule care using the TriWest network of providers. 

The DALC and VA’s Office of General Counsel (OGC) recently completed a joint 

risk assessment of the modification to remove the contactors scheduling requirement. As of March 15, 2016, the DALC is reviewing the modification document and 

will submit to OGC for final concurrence and submission to the contractor for negotiations. 

On November 2, 2015, contract modification number 13 was signed. This modification authorizes TriWest to embed staff at selected VAMCs. Embedded staffing cell 

composition consists of two Care Coordination Assistants positioned to provide nonclinical support related to authorization entry, appointing and medical documents; 

and one Operations Manager responsible for supervising embedded staff while acting as the primary liaison with on-site VA staff. 

Since implementation, TriWest and VA have embedded staff at the following locations: 

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• New Orleans, LA VAMC—January 2016 • Dallas, TX VAMC—January 2016 • Anchorage, AK VAMC—January 2016 • Harlingen, TX VAMC—February 2016; Phoenix, AZ VAMC—February 2016. 

TriWest and VA are currently coordinating additional embedded staffing sites, 

which will be implemented over the next 60 to90 days in the following locations: 

• Corpus Christi, TX Community-Based Outpatient Clinic (CBOC) • McAllen, TX CBOC • Fayetteville, AR VAMC • Jackson, MS VAMC • Gulfport, MS VAMC 

Initial feedback from VA sites that have already implemented TriWest embedded 

staff is positive because VA and TriWest are working together in a collaborative approach to improve customer service for Veterans, VA staff, and local providers. 

ACCOUNTABILITY

Question 37. Secretary McDonald, you’ve repeatedly said that in your leadership 

experience, you need to approach challenges by ‘‘changing the culture.’’ How does 

the reinstatement of directors Diana Rubens and Kimberley Graves speak to the 

larger process of changing the culture within the VA and how does it restore confidence in our veterans when it restores individuals with track records like theirs, 

to positions of leadership? How many employees have been fired within the VA 

workforce as of March 7, 2016 and how many are currently receiving disciplinary 

action? 

Response. The Department complied with an order by the Merit System Protection Board to restore Ms. Rubens and Ms. Graves as Directors in VBA’s Philadelphia and Minneapolis regional offices... The Department is demonstrably committed to improving accountability of its senior leaders within the established legal 

framework. While every outcome may not be what the Department envisions, these 

cases have not deterred our resolve to continue the reinvention of the Department’s 

corporate culture. The Department will not tolerate misconduct on the part of its 

senior leaders and we will continue to seek corrective action where warranted. 

• In calendar year 2014, VA terminated more than 1,100 employees. In calendar 

year 2015, VA terminated more than 1,980 employees. (Note: this includes removals 

and probationary terminations). As of June 28, 2016, we have 945 Probationary Terminations/Removals in calendar year 2016. • VA has terminated 3,685 employees since Secretary McDonald was confirmed 

on July 29, 2014. (Note: this includes removals and probationary terminations as of 

06/28/16). 

VA has initiated 450 disciplinary actions on any basis related to patient scheduling, 

record manipulation, appointment delays, and/or patient deaths nationwide, since 

June 3, 2014 (as reported on the June 3, 2016). 

DEBT COLLECTORS

Question 38. Dr. Shulkin, I sent you a letter dated January 4, 2016, regarding the 

issue of veterans in my state who have been hounded by collections agencies for unpaid bills. I brought this issue up the last time we met, and you committed to me 

at the field hearing in Phoenix back in December, that your office would intervene 

to make sure that doesn’t happen. You committed to me again at the hearing on 

February 23, 2016 that addressing these claims would be a priority. This letter had 

pages of cases that I haven’t gotten the answers to and there has been no communication with my state or DC staff since February. How and when do you plan on 

helping these veterans? 

Response. VA acknowledges that delayed payments and inappropriately billed 

claims are unacceptable and have caused stress for Veterans and providers alike. 

As a result of this issue, Veterans can now work directly with VA to resolve debt 

collection issues resulting from inappropriate or delayed Choice Program billing. In 

step with MyVA efforts to modernize VA’s customer-focused, Veteran-centered services capabilities, a Community Care Call Center has been set up for Veterans experiencing adverse credit reporting or debt collection resulting from inappropriately 

billed Choice Program claims. Veterans experiencing these problems can call 1–877– 

881–7618 for assistance. 

The new call center will work to resolve instances of improper Veteran billing and 

assist community care medical providers with delayed payments. VA staff is also 

trained and ready to work with the medical providers to expunge adverse credit reporting on Veterans resulting from delayed payments to providers. 

174 

VA is urging Veterans to continue working with their VA primary care team to 

obtain necessary health care services regardless of adverse credit reporting or debt 

collection activity. The new call center is the first step in addressing these issues. 

Veterans can find this number on the Veterans Choice Program website, http:// 

www.va.gov/opa/choiceact/. VA also issued a news release regarding the call center 

and including the 800 number to call. Last, posters including information on the call 

center and the 800 number will be distributed to VAMCs and CBOCs nationwide. 

VA is urging Veterans to continue working with their VA primary care team to 

obtain necessary health care services regardless of adverse credit reporting or debt 

collection activity. There should be no administrative burden that stands in the way 

of Veterans getting care. 

RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. RICHARD BLUMENTHAL

TO U.S. DEPARTMENT OF VETERANS AFFAIRS

Question 39. VA’s health care system, in particular, its research facilties, have 

historically been big draws to the best and brightest medical talent, but many clinicians are now discouraged from researching at VA because the facilities are in need 

of upgrading. The President’s request for major and minor construction is $1.025 billion, including grants for state homes and cemeteries. This is a significant decrease 

from the $1.675 billion that was requested in FY 2016. Most noticeably, the major 

construction funding request dropped from $1.444 billion in FY 2016 to $528 million 

in FY 2017. Given the sad state of VA’s aging capital infrastructure, and its particular impact on researchers who often also provide direct care to veterans, how 

do you explain what amounts to an almost 40% decrease in your request for construction funding? Please provide your views on the recommendation in the Independent Budget that VA designate at least $50 million in its construction budget 

for upgrading its research facilities. 

Response. With the FY 2017 request, VA is continuing to fund critical Major construction projects that address access, patient safety, and seismic issues in Long 

Beach, California and Reno, Nevada. The request also includes new cemetery and 

expansion projects that expand the VA’s ability to provide access to burial services 

and prevent the closure to new interments in existing cemeteries. VA is maximizing 

future flexibility by not committing to long-term solutions until the Department reviews the recommendations from the Commission on Care, expected June 2016. 

While the FY 2017 major construction funding request is less than last year, the 

request for all of VA’s capital accounts—Major, Minor, and NRM—is only 5 percent 

less than the FY 2016 enacted level. VA is focusing on fixing our existing facilities 

by completing prior year minor and non-recurring maintenance (NRM) projects, including minor construction projects that enhance VA’s research capabilities. VA is 

also exploring opportunities to engage partnerships opportunities that would reduce 

upfront capital expenses, resolve costly deferred maintenance, and provide potential 

lifecycle cost benefits. However, VA’s authority to enter into such partnerships is 

presently limited to the Leasing, Enhanced Use Lease, and Historic Reuse programs. Expanded authority could support resolution of infrastructure deficiencies for 

some of VA’s owned assets while providing an opportunity to realize net lifecycle 

savings. 

Question 40. There is potential for care in the community to top $18 billion in FY 

2018 (this was a figure derived from information contained in VA’s October 30, 2015 

report ‘‘Plan to Consolidate Programs of the Department of Veterans Affairs to Improve Acess to Care’’), which is $11 billion more than VA currently anticipates 

spending on traditional non-VA care. 

A. Please explain how VA expects to reduce spending on care in the community 

to $7.5 billion in FY 2018 without impacting access for veterans. 

Response. The FY 2018 Advance Appropriation request is an initial amount to enable VHA to begin the year if there is a continuing resolution, and VA expects to 

revisit the FY 2018 request in the FY 2018 President’s Budget. The Advance Appropriation allows VHA to avoid the functional limitations of operating under a Continuing Resolution or in the event of a government shut-down. Funding the Advance 

Appropriation allows VHA an initial budget to continue operations until the full appropriation amount is signed into law. The ‘‘second bite’’ is intended for the administration to fully evaluate the resource requirements of the VA in context of the entire 

Federal budget. 

B. Please provide an estimate of the number of veterans VA anticipates will be 

using care in the community and their estimated reliance on VA facilities and providers for receiving health care in FY 2017 and in FY18. 

175 

Response. Based on increases since FY 2010, our projections show the unique 

number of Veterans using Community Care in FY 2017 and FY 2018 to be: 

FY Projected Unique Veterans 

FY 2017 ....................... 1,974,962 

FY 2018 ....................... 2,216,217 

Question 41. One of the criticisms of the current Choice Program has been the 

need for improved coordination of care. VA recognized this in the New VCP when 

it highlighted the importance of robust care coordination tailored to each veterans’s 

unique needs. I am encouraged that VA recognizes the need to ensure veterans and 

providers have access to a customer service system to help resolve any inquiries regarding care coordination. It is critical that VA facilities have staff available to support successful implementation of these efforts. Please discuss the rationale for not 

requesting funds for additional staff to implement the enhanced coordination of care 

efforts and how you intend to support those efforts with the current staffing levels. 

Response. The FY 2018 Advance Appropriation request is an initial amount to enable VHA to begin the year if there is a continuing resolution, and VA expects to 

revisit the FY 2018 request in the FY 2018 President’s Budget. The Advance Appropriation allows VHA to avoid the functional limitations of operating under a Continuing Resolution or in the event of a government shutdown. Funding the Advance 

Appropriation allows VHA an initial budget to continue operations until the full appropriation amount is signed into law. The ‘‘second bite’’ is intended for the administration to fully evaluate the resource requirements of the VA in context of the entire 

Federal budget. 

Question 42. The Veterans Service Organizations who publish the Independent 

Budget indicated in their written testimony that the Administration’s proposal to 

simplify the VA disability claims appeals process raise many due process concerns. 

Please discuss the nature of the due process rights veterans have through 

entitlelemt to disability benefits and how the Administration’s proposal to simplify 

the appeals process would affect these rights. Also, earlier this year, VA released 

a white paper on the Veteran Appeals Experience. This white paper seemed to indicate that veterans have little awareness of what their due process rights are. What 

steps is VA taking to preserve those rights in a way that veterans can understand? 

Response. 

Veteran Appeals Experience: Voices of Veterans and their Journey in the Appeals 

System 

In January 2016, VA Center for Innovation (VACI) completed a findings report on 

the appeals process for Veterans. To better understand how Veterans experience the 

appeals process—how the process fits into the context of their lives—a group of six 

researchers spoke at length with 92 Veterans whose service spanned the periods 

from World War II, Korea, and Vietnam, to the current conflicts in Iraq and Afghanistan. 

Researchers spoke to Veterans at every stage in the appeals process, from those 

receiving their initial decision to those with final, complete results from the Board. 

Some were new to the process. Others, such as those who had just had their hearings with the Board, were years into the process. 

Human-Centered Design methods were used to understand the needs, behaviors, 

and experiences of the Veterans in the appeal process. Researchers performed qualitative ethnographic and design activities, driven by a robust and evolving set of 

questions. Using design thinking and service design practices, researchers mapped, 

visualized, and synthesized the findings, which are detailed in the full report. 

After careful review of the Veteran interviews researchers formed a narrative on 

how Veterans view the appeals process. Veterans and their families struggle to understand the process or their place in it. They have little understanding of the relationship between steps in the process and sometimes don’t even realize when they’re 

making a decision—even if it might delay their appeal for years. They don’t distinguish between Veteran Benefits Administration (VBA) and the Board; instead, they 

simply see VA. Even VSOs are occasionally viewed as part of VA. As is articulated 

in the Veteran Appeals Experience paper, Veterans do know that the VA appeal 

process is broken. Researchers found Veterans tended to see the process as adversarial, labor intensive, and filled with endless churn. 

VACI’s research identified five key themes surrounding Veterans’ needs, perceptions, and expectations in their experience with the appeals process. These insights 

176 

can guide VA in redesign of appeals and related services that can better meet the 

needs of Veterans and their families. 

The themes, outlined in greater detail in the report, are: 

1) The length and labor of the process takes a toll on Veterans’ lives. 

2) Like in the military, Veterans care deeply about the outcomes of other Vet- erans. 3) Veterans feel alone in a process they don’t understand. 

4) The appeals process feels like a fight. 

5) Veterans want to be heard. 

Overview of the VA Appeal Process 

The VA appeals process, which is set in law, is a complex, non-linear process that 

is unique from other standard appeals processes found in other judicial systems. 

The current VA appellate process has multiple steps, most of which occur at the 

agency of original jurisdiction (AOJ), such as, the VHA, VBA, or the National Cemetery Administration (NCA). If a Veteran is not satisfied with the initial AOJ determination, he or she may continue the appeal to the Board of Veterans’ Appeals 

(Board) for a final agency decision. A feature of the current VA appeals process is 

an open record that, with only narrow exceptions, allows a Veteran, Survivor, or 

other appellant to submit new evidence and/or make new arguments at most points 

in the appeals process. Additionally, the duty to assist requires VA to develop further evidence on the Veteran’s behalf and pursue new arguments and theories of 

entitlement. When new arguments are presented and evidence is added or obtained, 

VA generally must issue another decision considering the new arguments and evidence, which lengthens the timeline for final appellate resolution. 

The current VA appeals process takes too long, as there is no defined endpoint 

or timeframe; is too complex, as Veterans do not understand the process; and involves continuous evidence-gathering and re-adjudication that delays the Department in reaching a final decision. VA’s appeals process essentially contains another 

claims process, as new contentions are picked up as part of the appeal, rather than 

initiated as a new claim. 

Sweeping legislative reform, in conjunction with modernization of appeals processing technology, is needed to ensure that Veterans receive timely and quality appeals decisions. With sweeping legislative reform, VA could provide Veterans with 

a simplified appeals process under which Veterans receive a final, fair appeals decision significantly faster than the current appeals process, which has no predictable 

end and can continue for many years. Conversely, if substantial legislative reform 

does not occur, Congress will need to provide significant sustained funding for VA 

to hire additional employees to apply the current inefficient process created by existing law to the constantly growing appeals workload. 

While business process improvements/initiatives will provide some assistance in 

streamlining the current inefficient appeals process, VA will not be able to keep up 

with the growing appeals workload without a significant sustained increase in resources or sweeping fundamental legislative reform. Such fundamental legislative 

reform is reflected in H.R. 5083. This legislation replaces the current appeals process with a new framework consisting of differentiated lanes, which give Veterans 

clear options after receiving an initial decision on a claim. One lane would be for 

a quick review of the same evidence by a higher-level claims adjudicator in the AOJ; 

one lane would be for submitting additional evidence with a new claim to the AOJ; 

and one lane would be the appeals lane for seeking review by a VLJ at the Board. 

Furthermore, hearing option and non-hearing option appeals at the Board would be 

handled on separate dockets so these distinctly different types of work can be better 

managed. In order to make sure that no lane becomes a trap for any Veteran that 

misunderstands the process or experiences changed circumstances, a Veteran who 

is not fully satisfied with the result of any lane would have one year to seek further 

review while preserving an effective date for benefits based upon the original filing 

of the claim. For example, a Veteran could go straight from an initial AOJ decision 

on a claim to an appeal to the Board. If that decision were not favorable, but it 

helped the Veteran understand what evidence was needed to support the claim, 

then the Veteran would have time to submit that evidence to the AOJ in a new 

claim without fearing an effective-date penalty for choosing to go to the Board first. 

Importantly, this legislative reform protects the due process rights of Veterans by 

ensuring that Veterans are provided clear and detailed notice when a claim is decided. This new design also contains a mechanism to correct duty to assist errors 

by the AOJ. If the higher-level claims adjudicator or Board discovers an error in 

the duty to assist that occurred before the AOJ decision being reviewed, the claim 

would be returned to the AOJ for correction unless the claim could be granted in 

full. The Secretary’s duty to assist would not apply to the lane in which a Veteran 

177 

requests higher-level review by the AOJ or review on appeal to the Board. The duty 

to assist would, however, continue to apply whenever the Veteran initiated a new 

claim or supplemental claim. For Veterans who want to submit additional evidence 

following an AOJ decision on a claim, there would be two options; they could either 

submit additional evidence with a supplemental claim or file a timely appeal to the 

Board and elect the Board ‘‘hearing option lane’’ which would allow the Veteran to 

testify at a Board hearing and submit evidence at the Board hearing or within 90 

days thereafter. Alternatively, a Veteran on the hearing option docket could choose 

to submit additional evidence within 90 days of filing a notice of disagreement without requesting a Board hearing. Stakeholder support is needed to provide appellants 

this modern, efficient appeal process that is consistent with VA’s goals for the initial 

claims process. 

History of the VA Appeal Process 

The current appeals adjudication process has evolved over nearly a century from 

the WWI system originally managed by the Bureau of War Risk Insurance. During 

most of this evolution, decisions on Veterans claims were final and no court had authority to review the agency’s decisions. Veterans first received the right to seek judicial review of agency decisions on their claims in the 1988 enactment of the Veterans’ Judicial Review Act (VJRA) (Public Law 100–687). The VJRA established judicial review of VA decisions in a new court now known as the United States Court 

of Appeals for Veterans Claims (CAVC); maintained the Board as the final adjudicator within VA; abolished the $10 limit on attorneys’ fees for representing Veterans 

in certain claims; and created additional levels of judicial review in the United 

States Court of Appeals for the Federal Circuit (Federal Circuit) and the United 

States Supreme Court. 

Judicial review of VA’s decisions has had both positive and negative effects for 

VA and claimants. Judicial review has been beneficial for Veterans by providing 

them with their ‘‘day in court.’’ It has also created a forum for debating the interpretation of Veterans benefits law and the validity of VA’s regulations, resulting in a 

significant body of case law on Veterans’ benefits issues. 

However, judicial review has also significantly complicated VA’s administration of 

its benefits programs, resulting in significant delays in the initial claim and appeal 

processes. The processes that were developed in the decades after WWI were not 

designed to be compatible with judicial review. As a result, the interpretation of 

statutes and regulations that often date to WWI or WWII has led to many unexpected results that have been difficult to integrate into the decades of procedures 

that have accumulated. Specifically, the applicable law as developed primarily by 

precedential CAVC and Federal Circuit decisions is constantly increasing in complexity. As a result, Board decisions are lengthier, more complex, and require more 

time and resources to prepare than ever before. While there are a number of CAVC 

decisions that affect the timeliness of the claim and appeal processes, the most significant factor has been the CAVC’s interpretation of VA’s statutory duties to assist 

and notify, which have substantially increased the number of remands to the Board 

and VBA. 

Current Statutory Framework 

It is important to understand the current framework that has been built up in 

stages since WWI. The VA appeals process divides responsibility between VBA and 

the Board. In brief, it is not a closed or linear process. The appeal process provides 

redundant reviews of the initial decision, and the process does not move in one direction to a set conclusion. The claimant pays no fee to utilize the VA appeals process and there is no limit to the number of appeals that can be submitted. New evidence may be submitted or obtained at virtually any time and an appeal may have 

to go through multiple cycles of development and re-adjudication to be resolved. 

VBA

A claimant may initiate VA’s administrative appeal process by filing a NOD with 

VBA regarding a specific VBA decision. Section 7105(b)(1) of title 38, U.S.C., provides claimants with a one-year period, beginning on the date that VA issued the 

decision, in which to file a NOD. 

Under section 7105(d)(1), when VBA receives a NOD, it initiates a fresh review 

and undertakes any development required for additional evidence submitted with 

the appeal in an attempt to resolve the disagreement. If VBA’s further action regarding the appealed claim does not resolve the disagreement, it must issue a Statement of the Case (SOC), which must include a summary of the evidence, citation 

to pertinent laws and regulations, a discussion regarding how VBA applied the law 

to the facts of the claim, a decision on each issue in the appeal, and a summary 

178 

of the reasons for the decision on each issue. Claimants may then file a substantive 

appeal within 60 days of the date VBA issued the SOC or within one year of the 

date of VBA’s initial decision, whichever is later, which completes the formal appeal 

for certification and transfer of jurisdiction to the Board. 

VA has interpreted its authority under section 7105 as allowing claimants who 

filed an NOD to elect either a traditional appeals process or a first level of de novo 

review within VBA by a Decision Review Officer (DRO). If a claimant elects a DRO 

review, a VBA employee who processes appeals re-adjudicates the claim and issues 

a decision granting the benefits on appeal or an SOC confirming the prior decision. 

A claimant who elects a DRO review and remains dissatisfied with VA’s decision 

may still file a substantive appeal to the Board and receive another de novo review 

of the claim. 

A claimant may submit additional evidence to support an appealed claim at virtually any point in the process, regardless of whether the appeal is pending at VBA 

or the Board. If additional evidence is received after the claimant files a NOD but 

before VA issues the SOC, the evidence will be reviewed by VBA and incorporated 

into the SOC (if VBA cannot grant benefits). Evidence that an appellant identifies 

after VBA issues an SOC will result in VA issuing a supplemental SOC (SSOC). 

Each time the claimant identifies additional evidence; VBA must reconsider its decision on the appealed claim and conduct any necessary development of the claim 

under its duty to assist the claimant. If VBA’s reconsideration of the appealed claim 

does not resolve the disagreement, it will issue another SSOC. 

There is no limit to the number of times a claimant may identify additional evidence that may require VA to repeat this process. Accordingly, many appealed 

claims require several SSOCs, depending on the number of times that the claimant 

identifies additional evidence. Identification of additional evidence during the appeal 

process often results in multiple reviews and re-adjudications of an appeal before 

VBA is in a position to transfer it to the Board for its de novo review. In FY 2015, 

each additional SSOC added, on average, more than 360 days to the total appeal 

processing time. 

THE BOARD

Under 38 U.S.C. § 7104(a), VBA’s decisions are subject to one de novo review on 

appeal to the Board. In general, this right of review requires evidence to be considered by VBA in the first instance before a case can proceed to the Board. However, 

when the Board receives an appeal, it reviews the entire record on the claim and 

does not give any deference to a prior VBA decision. The Board will either issue a 

decision granting or denying the benefit, or will remand the claim back to VBA for 

additional developmental action. Approximately 60 percent of the decisions that are 

remanded to VBA are a result of additional evidence or information becoming available, or a change in circumstances that arose after the claim was certified to the 

Board. As discussed above, claimants may submit additional evidence at virtually 

any time during the process, regardless of whether the appeal is at VBA or the 

Board. This submission of additional evidence and other inherent delays in the appeal process often cause the Board to remand the claim to VBA for a new examination or a search for previously unidentified records, which causes further ‘‘churning’’ 

of the appeal. Furthermore, if the Board identifies an error in evidence gathering, 

the case must be returned to VBA to repeat the development and adjudication process before being returned to the Board. 

In July 2003, VBA created its Appeals Management Center (AMC) for the purpose 

of consolidating remands from the Board at a single office for more efficient and consistent processing. The AMC has the authority to develop additional evidence regarding remanded claims and issue new decisions. If the AMC is unable to issue 

a full grant of benefits, it will issue a supplemental SOC and recertify the appeal 

to the Board for continuation of the administrative appeal process. Currently, the 

AMC processes approximately 65 percent of the Board’s remands to VBA. VBA’s regional offices process the remaining remands, including remands in claims where 

the appellant has asked for a hearing or a private attorney represents the claimant. 

The current process (see Figures 1 and 2) provides appellants with multiple reviews in VBA and one or more at the Board depending upon the submission of new 

evidence or whether the Board determines that it is necessary to remand the matter 

to VBA. Although VA has allocated significant resources to the appeals workload, 

the multi-step, open-record appeal process set out in current law precludes the efficient delivery of benefits to all Veterans. Further, the longer an appeal takes, the 

more likely it is that the claimed disability will change, resulting in the need for 

additional medical and other evidence and further processing delays. As a result, 

179 

the length of the process is driven by how many cycles and re-adjudications are triggered. 

FIGURE 1: Illustrating the entire appeal process, including judicial review. 

** In FY 2015, each additional SSOC added, on average, more than 360 days to the total appeal processing time. 


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180 

FIGURE 2: 

Illustrating the complex administrative appeal process created by current law. 

JUDICIAL REVIEW

As noted above, claimants have had the right to judicial review of VA’s decisions 

on their claims since 1988. If an appellant is dissatisfied with a final Board decision 

on a claim, the appellant may appeal to the CAVC within 120 days of the date of 

the decision. Further, limited review is available in the Federal Circuit and Supreme Court. The 1988 legislation placed judicial review on top of the layers of procedures that had evolved since WWI. 


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181 

CLAIMS

If the Veteran disagrees with any or all of the final appeals decision, the Veteran 

always has the option of filing a claim to reopen for the same benefit once the appeal is resolved. 

Proposals for a New VA Appeals Framework 

There are three key elements that the new appeals framework would impact: VA’s 

duty to assist, submission of evidence, and effective date provisions. Over the years, 

laws have changed to add layers of process to protect the interests of Veterans. 

However, those protections are no longer serving Veterans well since these laws 

have affected the timely and efficient resolution of appeals. 

Under current statutes, Veterans have the right to submit or identify evidence 

and pursue new arguments of entitlement at virtually any point throughout the appeals process. Under its statutory duty to assist, VA is obligated to develop and 

gather the evidence for the Veteran and re-adjudicate the appeal each time. Further, current effective date statutes provide an effective date of benefits that is retroactive to the date of the filing of the initial claim, as long as a Veteran files a 

timely appeal that eventually results in an award. Therefore, the current process 

incentivizes the continual submission of new evidence. Continuous evidence-gathering and the additional duty to assist triggered by the submission of evidence delay 

a final decision and result in many cycles of re-adjudication. In many instances, the 

additional steps in the process not only add little or no value, but actually harm 

Veterans by delaying an otherwise favorable decision while additional process is 

pursued. Hence, VA’s appeal system differs from other Federal agency and judicial 

appeal processes, which limit the appeal review to evidence included in the record 

at the time of the initial decision. 

By modernizing and simplifying the appeals system, Veterans would be afforded 

a transparent appeals process with a single VA appeals owner, rather than trying 

to navigate a multi-step process that is too complex and too difficult to understand. 

VA has brought together the Nation’s leading Veteran advocacy groups for their 

input. They are our steadfast partners in improving the way we deliver services to 

Veterans. 

As a result of that collaboration, VA has put forward a new proposal that would 

provide veterans with a simple, fair, and transparent appeals process in which, with 

the appropriate resources provided by Congress in future appropriations, the vast 

majority would receive a final appeals decision within one year of filing an appeal 

by 2021. This disentanglement of process is enabled by one crucial innovation—giving veterans multiple paths to adjudicate disputes on a claim, while preserving the 

effective date that the initial claim was filed. VA’s consensus proposal was put forward as a discussion draft by Ranking Member Blumenthal and was the subject of 

the Committee’s May 24, 2016, legislative hearing. 

This legislation would modernize the Veteran appeals process, better serving veterans, taxpayers, and the Nation for years to come. And since it was layer upon 

layer of law that got us tangled, VA will need Congress’ help to untangle it, and 

has been working to make this legislative change a reality, and soon. The principles 

of this consensus proposal are as follows: 

THE NEW APPEALS FRAMEWORK PROVIDES FIVE KEY BENEFITS FOR VETERANS

I. IMPROVED COMMUNICATIONS: In order to make an informed and intelligent 

choice as to which review option is the most beneficial, Veterans will need a clear 

and detailed Decision Notice when a claim is decided. We have identified eight elements needed to draft a comprehensive notice to Veterans. 

1. Issues adjudicated 

2. Evidence considered 

3. Statutes and regulations considered 

4. Identification of findings favorable to the Veteran 

5. Findings as to which element(s) were found not to have been satisfied leading to the denial of the claim including an explanation of how the evidence was 

weighed 

6. Notice of how to obtain a copy/access to the evidence used in making the 

decision 

7. Notice of the criteria that must be satisfied to grant the claim 

8. Notice of appellate rights and all procedures available to seek further review 

II. EFFECTIVE DATE PROTECTION: The new system will protect a Veteran’s potential effective date while he or she considers the different options available. Choosing 

182 

one lane over another lane (See Choice below) does not prevent a Veteran from later 

choosing a different lane. 

III. CHOICE: The new model provides Veteran’s with three options (Lanes) after 

every VBA Decision. These Lanes are designed to allow Veterans to choose the option that best suits their particular need. 

1. A Difference of Opinion Review/Higher Level Review by the AOJ (within 

VBA) 

2. An option to submit New Evidence (within VBA) 

3. The right to Appeal to the Board of Veteran Appeals (Board) 

IV. EARLY RESOLUTION: The new approach is designed to facilitate early resolution of Appeals at the RO level—through options 1 and 2—rather than driving Appeals through a single process which leads to and through the Board. 

V. TIMELY RESOLUTION

1. The focus on early resolution and a 125 day turn-around goal within the 

two VBA lanes will dramatically reduce the time to resolution for many Appeals. 

2. The Board will provide 1) an Expedited Review docket for claimants who 

simply wish for a review on existing evidence, and 2) an Alternate Review docket which allows for hearings and the submission of new evidence. 

Question 43. The American Legion’s written testimony highlights the importance 

of the Decision Review Officers at the VA Regional Offices as one of the most efficient ways for a veteran to resolve an appeal. As VA has attempted to reduce the 

backlog of claims, many DROs have been assigned to focus on claims rather than 

appeals, reducing the number of employees available to process appeals. VA’s proposal for reforming appeals seems to remove many of the functions of the Regional 

Office from the appeals process altogether. Under VA’s proposal for a simplified appeals process, would DROs work on claims or appeals? 

Response. The new appeals framework described in H.R. 5083 sets up three 

‘‘lanes’’ or options for Veterans following an unfavorable AOJ decision. The DRO review would be eliminated in the new appeals framework; however, Veterans would 

have two options for further review of their claim at the AOJ, by either choosing 

higher level review by the AOJ or by filing a supplemental claim with new evidence. 

Veterans would have up to one year from an initial claim decision to seek local 

review of the decision by a higher-level adjudicator. No new evidence or hearings 

would be permitted at this stage and the adjudicator would have the authority to 

grant the claim based upon a difference of opinion. However, the Veteran’s representative would have the option to request an informal conference with the 

decisionmaker for the purpose of pointing out specific errors in the case. 

If during the review, the higher-level adjudicator finds a duty to assist error, and 

that error occurred prior to the AOJ decision being reviewed, the adjudicator would 

send the case back to the lower level to correct any errors found and re-adjudicate 

the claim. 

The level of the higher-level adjudicator would depend upon the complexity of the 

claim, but would be higher than that of the initial adjudicator. The Veteran could 

elect whether this adjudicator was from his or her local RO or from a different RO. 

The effective date of the initial filing of the claim would be protected if the outcome of the review is favorable to the Veteran. If the outcome of the review is unfavorable, the Veteran would have one year from the date of the higher-level review 

decision to submit new evidence with a supplemental claim or file an appeal with 

the Board. 

As an alternative to higher-level review, upon receiving a decision, Veterans 

would have up to one year to submit new evidence with a supplemental claim. The 

Veteran could also request a local hearing to submit testimony. An RO adjudicator 

would consider the new evidence and issue a new decision, while preserving the effective date associated with the initial claim. If Veterans remain dissatisfied with 

the decision, they would still have the option to appeal to the Board, seek local review by a higher-level RO adjudicator in the difference of opinion lane, or file another supplemental claim with new evidence. 

This new appeals framework allows Veterans who have received an unfavorable 

AOJ decision to make a choice regarding the most appropriate review for their situation, and provides more options than the current legal framework. 

RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. SHERROD BROWN TO

U.S. DEPARTMENT OF VETERANS AFFAIRS

Question 44. As you know a 2014 HELP Committee report revealed that eight of 

the top 10 recipients of Post-9/11 GI Bill benefits are large, publicly-traded compaVerDate Mar 15 2010 19:02 May 01, 2017 Jkt 000000 PO 00000 Frm 00186 Fmt 6633 Sfmt 6621 Z:\ACTIVE\022316.TXT PAULIN
183 

nies that operate for-profit colleges who had received 23 percent of all Post-9/11 GI 

Bill benefits ($975 million) in 2012–13. Has this changed in the intervening time 

since this report was published? For the most recent year for which data is available, how many of the top 10 recipients of Post-9/11 GI Bill benefits are for-profit 

colleges? 

Response. Based on Fiscal Year 2015 data, five of the top 10 recipients of Post9/11 GI Bill tuition and fee payments are for-profit schools. These five schools received a total of $301,679,948 in tuition and fee payments and represent over 60 

percent of the total tuition and fee payments to the top 10 recipients of the Post9/11 GI Bill. These schools also represent 10 percent of all Post-9/11 GI Bill tuition 

and fee payments in 2015. Please see the table below for the top 10 highest paid 

schools. 

Name of Institution Profit Status Total Tuition and Fees Paid 

University of Phoenix-Online Campus ................................................................... Private profit $135,107,635.20 

American Public University System ...................................................................... Private profit $55,544,751.53 

University of Maryland-University College ............................................................ Public $45,083,484.47 

Full Sail University ................................................................................................ Private profit $40,276,319.58 

Ashford University-On Line ................................................................................... Private profit $39,886,727.16 

Southern Utah University ...................................................................................... Public $38,084,999.78 

Liberty University ................................................................................................... Private non-profit $37,246,788.32 

Arizona State University-Tempe ............................................................................ Public $34,169,659.32

University of Phoenix-Southern California Campus ............................................. Private profit $30,864,515.37 

National University-San Diego .............................................................................. Private non-profit $29,959,505.74 

Data Source: 2015 CBS Report 

A. This same HELP Committee report also found that taxpayers are paying twice 

as much on average to send a veteran to a for-profit college for a year compared 

to the cost at a public college or university. Is this still the case? 

Response. Yes, with regard to tuition and fees paid to schools, VA pays twice as 

much on average to send a Veteran to a for-profit college for a year compared to 

the cost at a public college. Please see table below for the average amount paid to 

schools (for tuition and fees) per student in FY 2015. 

Type of School Tuition and 

Fees Paid 

Average per 

Student in a 

Year 

For-profit schools ............................ $2 .0B $8,254 

Public schools ................................. $1 .7B $4,362 

Data Source: 2015 CBS Report 

RESPONSE TO POSTHEARING QUESTIONS SUBMITTED BY HON. MAZIE K. HIRONO TO

U.S. DEPARTMENT OF VETERANS AFFAIRS

VETERAN HOMELESSNESS

Question 45. Current estimates from the Department of Housing and Urban Development indicate that approximately 48,000 veterans are homeless on any given 

night. Meanwhile, the National Coalition for Homeless Veterans indicates that approximately 1.4 million other veterans are at risk of homelessness. Could you elaborate on how you envision the VA’s transformation strategy will work to better collaborate with DOD to prevent further instances of homelessness among transitioning veterans? 

Response. In collaboration with DOD and the United States Interagency Council 

on Homelessness, VA VHA Homeless Programs Office and Care Management and 

Social Work Services has developed a new initiative to prevent and end homelessness among Transitioning Servicemembers. This new holistic approach to transition 

preparation includes Servicemembers planning for post-separation finances, housing, transportation, employment, and family and social support. For those Servicemembers who are determined to be at risk of homelessness, a referral will be made 

to a VA medical facility for the coordination of health care and housing services facilitated by the Transition and Care Management (TCM) team. 

Key to this initiative are the VA Liaisons for Health Care, licensed social workers 

or registered nurses, who are strategically placed in Military Treatment Facilities 

184 

(MTF) with high concentrations of ill and/or injured Servicemembers and those returning from combat. VA has 43 VA Liaisons for Healthcare stationed at 21 MTFs 

to facilitate the transfer of Servicemembers from the MTF to a VA health care facility closest to their home or most appropriate location for the specialized services 

their medical condition requires. VA Liaisons are co-located with DOD Case Managers at MTFs and provide onsite consultation and collaboration regarding VA resources and treatment options. VA Liaisons meet with Servicemembers directly to 

discuss the VA system of care and the individual’s health care needs. VA Liaisons 

provide direct access to care for transitioning Servicemembers and ensure that VA 

care is personalized, proactive, and patient-driven to meet the unique needs of each 

new Veteran. If housing needs are identified at the time of transition, VA Liaisons 

communicate this information to the receiving VAMC so ongoing services can be coordinated. The goal with each referral is for the Servicemember to leave the MTF 

registered for VA health care with a scheduled VA appointment. 

At sites without a VA Liaison for Healthcare, a VA Benefits Advisor will make 

a warm handoff to a Homeless Prevention point of contact at the VAMC who is an 

expert at identifying and accessing VA and community homeless resources. 

Question 46. It is encouraging to see that the President’s FY 2017 budget includes 

$1.6 billion for programs that will continue VA’s efforts to end veterans’ homelessness. I also appreciate the work that VA has done to reduce veterans’ homelessness 

in the last several years, whereas Veteran homelessness has declined by 36% between 2010 and 2015. What kind of impact does VA project toward lowering the rate 

of homeless veterans throughout the Nation with the requested funding level? 

Response. The kind of progress reflected in the declining Point-in-Time estimates 

affirms that the strategies and systems that VA, together with the Department of 

Housing and Urban Development and community partners, has implemented are 

working. The requested increase in the FY 2017 VA homeless-services budget request is needed to sustain its continuum of care for not only homeless and at-risk 

Veterans but for those Veterans who have obtained permanent housing yet still require supportive services in order to maintain housing stability. VA has made unprecedented efforts to promote the services available to Veterans who are homeless 

or might become homeless. As a result of the success of the effort and targeted resources, more Veterans than ever before are seeking out VA. Since 2010, demand 

for VA homeless-related services has increased by 136 percent (FY 2010: 127,070— 

FY 2015: 300,108 Unique Veterans accessing VHA homeless services). There has 

been a 7.8 percent increase in demand for homeless services since this time last 

year (January 2015: 164,224 to January 2016: 178,139). 

Communities that have reached the goal or are close to effectively ending homelessness rely heavily on VA targeted homeless resources. Communities that have developed a sustainment plan are dependent on those resources to remain available 

as they continue to tackle homelessness. The systems we have in place will make 

sure that the experience is measured not in months or years, but in days if sustained. Therefore, VA remains focused on ensuring adequate resources that address 

the needs of Veterans who may become or are at-risk of homelessness and sustain 

the supports for Veterans who have moved into permanent housing so that they 

maintain housing stability and do not fall back into homelessness. 

DOD/VA HEALTH RECORD INTEROPERABILITY

Question 47. Secretary McDonald, in your testimony you indicate that one of VA’s 

breakthrough outcomes for 2016 is to finalize congressionally mandated DOD/VA 

interoperability requirements at the Office of Information and Technology. Could 

you comment on the specific metrics that VA is using to measure interoperability? 

What is the 2016 timeline for when these requirements will be fulfilled? 

Response. Our key measure of interoperability between VA and DOD is a clinician’s ability to access all health information required to provide optimal care for 

Veterans and Servicemembers. To ensure we are exchanging this information effectively, the DOD/VA Joint Interoperability Plan (JIP) includes details regarding the 

Departments’ efforts to standardize terminology, content, exchange methods, and access to shared health information. The JIP also addresses the Departments’ efforts 

to exchange health information securely, flexibly, and in compliance with national 

standards and relevant privacy laws. Currently, JLV is used by both VA and DOD 

for a complete view of a Veteran or Servicemember’s longitudinal record. Later this 

year, JLV will also provide direct access to radiographs and other images. Imaging 

study reports are already included in JLV today. As VA continues improving our 

point-of-care health record interface with the enterprise Health Management Platform, all current capabilities of JLV will be included in the new system. 

185 

The Departments certified that we have achieved the interoperable capability required in Section 713 (b)(1) of the 2014 National Defense Authorization Act on 

April 8, 2016,—approximately 8 months ahead of the deadline. 

The summary of Interoperability Metrics and Milestones, extracted from the JIP, 

is embedded below for additional detail. 


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AUTOMATION OF BENEFITS

Question 48. In your testimony, you highlight the need to simplify the VA appeals 

process. As a result of automating burial benefits, you state that the Department 

was able to reduce the time spent processing these benefits from 190 days to 6. This 

Congress, in collaboration with VA, I introduced the Veteran Survivors’ Claims 

Processing Automation Act which passed out of this Committee last month. The bill 

would provide the Department with the authority to automate the claims process 

for dependency and indemnity compensation, survivors’ pensions, and payments of 

accrued benefits. In the context of your 2016 Breakthrough Outcomes for Appeals, 

would you be able to comment on the impact that automating these benefits would 

have on decreasing processing time, and assisting the VA in meeting its goal of completing 90 percent of appeals within one year of filing by 2021? Can you comment 


223q3VA47c36.eps
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on the budgetary impact you anticipate that streamlining programs in this manner 

would have on the VA, and the positive impacts that it would have on veterans’ 

services by improving the timeliness and quality of benefits delivery? 

Response. The overall intent of automating survivors’ benefits is to grant the benefit without the need for the survivor to submit an application. Because of the 

unique adjudication process of appeals, VBA cannot implement automation at the 

time a survivor files an appeal. Many of these appeals require a detailed analysis 

of multiple types of evidence before a decision is reached. Automation does not lend 

itself well to this type of review. Additionally, since nearly 98 percent of all pending 

VA appeals involve disability compensation benefits, the impact from automating 

survivor appeals would be minimal. 

BOARD OF VETERANS’ APPEALS CHAIRMAN NOMINATION

Question 49. Making significant progress on the veteran claims backlog is a key 

part of your 2016 breakthrough outcomes however the Board of Veterans’ Appeals 

has not had a Senate-confirmed Chairman since the departure of the late James 

Terry in 2011. Laura Eskenazi was designated by Secretary Eric Shinseki as Executive in Charge and Vice Chairman of the Board of Veterans’ Appeals (BVA), on 

June 30, 2013. Since the beginning of the 114th Congress, the Senate has not received a nomination for BVA Chairman. Are there plans to submit to the Senate 

a nominee for BVA Chairman in 2016? 

Response. VA acknowledges that leadership for the Board of Veterans’ Appeals is 

important as we move critical initiatives forward. Nomination of the Chair, Board 

of Veterans’ Appeals is a process executed by the White House, and we therefore 

defer to the White House on this matter. 

TELEHEALTH/HEPATITIS C TREATMENT

Question 50. Secretary McDonald, you note in your testimony that with its $1.5 

billion request in FY 2017, VA expects to treat 35,000 patients with Hepatitis C and 

that VA will focus resources on the sickest patients and most complex cases and 

continue to build capacity for treatment through clinician training and use of telehealth platforms. Could you elaborate on how telehealth will be expanded and how 

it will impact treatment? 

Response. VHA currently operates multiple Hepatitis C and liver Telehealth programs, both within and across VISNs. These include traditional provider-patient 

Telehealth visits, in which the patient is seen through a video link at one VAMC 

by a Hepatitis C provider at another VAMC. They also include Tele-consultation 

models using VHA’s highly successful SCAN-ECHO program, in which primary care 

physicians at a VAMC or CBOC present Hepatitis C cases to an expert team at another VAMC and receive didactic training, enabling them to become experienced 

Hepatitis C treaters. Preliminary data from VHA’s Hepatitis C SCAN-ECHO program show significant increases in patient access, decreases in travel time, and 

most importantly, cure rates similar to those achieved by experienced VHA Hepatitis C providers. 

VHA is planning and executing expansion of these programs as rapidly as possible. Expansion will use geomapping to target sites that report patient access difficulties due to geographic constraints or limitations in provider resources as well 

as relatively low proportions of Veterans treated. Expansion will involve meetings 

between the VHA National Viral Hepatitis Program Office and National Telehealth 

Program Office with clinical staff at such sites to guide deployment and implementation of Telehealth resources, recruitment of experienced Hepatitis C providers to 

deliver Hepatitis C Telehealth care, use of peer support groups for remote treatment 

of Veterans, and updating the existing national liver/Hepatitis C Telehealth guide. 

VHA will also leverage its existing provider to provider training programs, including 

its Hepatitis C SCAN-ECHO program, to buildupon existing provider capacity to 

treat Hepatitis C; the National Viral Hepatitis and Primary Care Programs are collaborating to refine a Hepatitis C curriculum for VHA primary care providers. 

Based on the data from existing programs, we anticipate that this expansion will 

improve access to Hepatitis C and liver care, particularly among Veterans residing 

in rural and highly rural areas. 

234 

Chairman ISAKSON. We have a second panel that will come forward. If the second panel will move forward? 

I appreciate your time this morning. [Pause.] 

I would like to welcome our second panel, and, again, I appreciate the Secretary staying for the second panel. We have our veterans service organizations, which are critically important to us on 

the VA Committee. We have The American Legion in town today. 

I was with them earlier this morning, and I appreciate their support for the Veterans Administration and for this Committee. 

We have: Mr. Carl Blake, the Associate Executive Director of 

Government Relations, Paralyzed Veterans of America; Paul Varela, Assistant National Legislative Director, Disabled American 

Veterans; Ray Kelley, the Director of the National Legislative Service, Veterans of Foreign Wars; and Mr. Louis Celli, Jr., National 

Director of Veterans Affairs and Rehabilitation, The American 

Legion. 

Mr. Blake, we will begin with you. 

STATEMENT OF CARL BLAKE, ASSOCIATE EXECUTIVE DIRECTOR, GOVERNMENT RELATIONS, PARALYZED VETERANS OF 

AMERICA 

Mr. BLAKE. Thank you, Mr. Chairman. On behalf of the co-authors of The Independent Budget—DAV, PVA, and VFW—I would 

like to thank you for the opportunity to testify today. You have a 

copy of our joint statement that we submitted for the record, so I 

will limit my comments primarily to the medical care section of the 

VA’s budget and to the recommendations of the IB. Let me say first and foremost that overall we believe that the 

VA’s budget is a good one. I think in many ways it mirrors the recommendations of the independent budget for this year, particularly 

when you take into account the amount of money that the VA 

projects to spend from Section 801 and Section 802 of the Choice 

Act as well. It brings the numbers up pretty close. The one exception to that would certainly be the infrastructure portion. I will 

leave the comments on that to my colleague with the VFW. 

Let me say, though, that we do have some real concerns about 

this continued escalated growth in funding in community care. This 

year, the VA introduced its new medical community care account. 

When coupled with the Choice Act, they project to spend nearly 

$12.2 billion on care in the community this year. 

It is fair to say that we understand the need to leverage community care as best as possible to expand access. The independent 

budget framework that we have already discussed with the Committee staff outlines some of our ideas in that same way, much as 

the VA’s new Veterans Choice Plan also addresses the issue. 

However, we are concerned about what is the potential for uncontrolled growth in this area. While the Congress and the Administration seem to be keenly focused on expanding access in the community, I do not think we can emphasize enough the need to devote critical resources and focus also on expanding the existing capacity of the VA and the staffing levels of the VA health care system, particularly in the areas of specialized services like spinal 

cord injury or disease. Just outsourcing the care into the community, while it might seemingly improve access, runs the risk of unVerDate Mar 15 2010 19:02 May 01, 2017 Jkt 000000 PO 00000 Frm 00238 Fmt 6633 Sfmt 6601 Z:\ACTIVE\022316.TXT PAULIN
235 

dermining the larger health care system, which many veterans, 

particularly those with catastrophic disabilities, rely upon. 

One interesting note that I’d like to point out is in the VA’s 

budget this year, they project for fiscal year 2016 to spend about 

$1.7 billion in Section 802 Choice funding. That is the community 

care portion of Choice. When we asked them about it during their 

budget briefing, they admitted that they actually project to spend 

$2.3 billion or more in Choice Act funding for community care this 

year. But, their budget does not seemingly square those two facts, 

which begs the question: where will the additional money come 

from? The obvious easy answer would be the remaining balance of 

the Choice Act. Then, that would call into question, how does that 

impact the $4.8 billion in Choice funding that they are projected to 

spend in fiscal year 2017 for community care? 

We have real concerns about how the Choice Act funding is going 

to be broken up. Certainly last year, with the massive budget 

shortfall, that caused some significant difficulties when figuring out 

how to manage the Choice Act funding line. We will be keeping a 

close eye on how that impacts care going forward. 

With these thoughts in mind, we also have some real concerns 

about the funding level for fiscal year 2017 that was approved in 

the advance appropriation in December of last year. While the IB 

recommends approximately $72.8 billion for medical care for 2017, 

that advance appropriation only included about $66.6 billion. That 

is a lot of money no matter how you look at it. But, the fact is the 

VA revised its estimate for 2017, necessarily so, we believe, to a 

much higher and much more significant level, we believe reflective 

of the actual need that they project to have for 2017. Unfortunately, we believe that we are setting up the scenario where the 

very same shortfall problems that we experienced last summer may 

rear their head again in this fiscal year, 2016, and potentially 

again in 2017 this advance appropriation level is not appropriately 

addressed. We hope this Committee will take a serious look at that 

and consider that as you put together your views and estimates. 

Last, we are concerned about the 2018 advance appropriation 

level. When we questioned the VA on what we felt like was clearly 

an insufficient level for 2018 for all of medical care, they sort of 

half-heartedly admitted that they do not believe it is going to be 

sufficient either, which is kind of befuddling to us. If you took the 

historical perspective that that is OK because it will be corrected, 

that is not a fair way to look at this. While the last 2 years Congress has adjusted the advance appropriation in many appropriate 

ways, the four previous years to that Congress did not adjust by 

a single dollar the advance appropriation for health care, particularly in medical services. The track record does not lend itself to 

underestimating now to get it corrected later. So, I certainly hope 

that the Committee will take a real look at the 2018 advance appropriation and address it so that funding is not left short when 

we get to that point 2 years from now. 

Mr. Chairman, I would like to thank you again for the opportunity to testify. I would be happy to answer any questions that 

you may have. 

Chairman ISAKSON. Thank you, Mr. Blake. 

Mr. Varela? 

236 

STATEMENT OF PAUL VARELA, ASSISTANT NATIONAL 

LEGISLATIVE DIRECTOR, DISABLED AMERICAN VETERANS 

Mr. VARELA. Good morning, Chairman Isakson and Members of 

this Committee. On behalf of the IBVSOs, we thank you for providing us with the opportunity to discuss our fiscal year 2017 budget recommendations and those proposed within VA’s budget request. Today I will focus my oral remarks on four elements: compensation (comp service); vocational rehabilitation and employment 

service (voc rehab); the Board of Veterans Appeals (the Board); and 

the simplified appeals process recommendations. 

For comp service, we recommended an increase of 1,700 full-time 

employee equivalents (FTEEs). The administration requests authorization for just 400. Given the significant backlog and workload 

affecting appeals, we believe that 1,000 of the 1,700 FTEE requested by the IBVSOs should be dedicated solely to appeals processing. Without adequate resources, appellants seeking redress of 

their VA determinations will continue to endure significant delays 

in the adjudication of their appeals. We have also recommended 

100 additional FTEE for the fiduciary program, 300 FTEE for nondisability rating activities, and 300 FTEE for call centers. VBA 

must be resourced properly to meet the needs and expectations of 

veterans, survivors, and dependents seeking VA benefits and services. 

Second, voc rehab. The IBVSOs have again recommended a staffing increase for fiscal year 2017; 158 new FTEEs are required, but 

for a second consecutive year, the administration has not requested 

a staffing level increase. Mr. Chairman, voc rehab program participation has increased steadily over the past few fiscal years to include receipt of new applications for entitlement determinations, 

which has also increased at roughly the same rate. Vocational rehabilitation counselors (VRCs), perform myriad tasks ranging from 

their daily caseload responsibilities to integrated disability evaluation system and veteran success on campus activities. VRCs have 

one of the most critical roles within VA. They ensure that ill and 

injured veterans have all the help, guidance, and resources they 

need to overcome their employment obstacles to lead to more independent and economically fulfilling lives. The IBVSOs recommended a staffing increase that would support a more appropriate 

client-to-counselor ratio throughout voc rehab so VRCs can devote 

the appropriate amount of time to each veteran in the program to 

ensure they are on a path to success. 

Third, the Board. We are pleased to see the administration’s request for 242 FTEEs. The IBVSOs fully support this request. The 

additional personnel are certainly needed given the exceedingly 

large inventory of appeals now estimated at roughly 440,000 appeals pending review at various stages in the appeals process. It 

is important to note that even if the Board is provided with this 

staffing increase and VA’s budget is appropriated on time, the impact of these new employees would not be fully realized until some 

time in 2018. Regardless of the time it will take to hire, train, and 

orient these new hires to the Board, they are desperately needed 

now. In fiscal year 2015, the Board was able to produce over 57,000 

decisions with 646 FTEEs. This averages out to be 88 decisions per 

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237 

creasing their staff size to 922, they could conceivably complete 

81,000 appeals each year. However, to end the backlog and keep 

up with incoming appeals, future staffing increases will likely be 

needed. 

Last, Mr. Chairman, the proposal regarding a simplified appeals 

process. The IBVSOs strongly object to closing the evidentiary 

record at the point of initial decision, transferring jurisdiction of an 

appeal to the Board upon receipt of a notice of disagreement, and 

eliminating an appellant’s option for a personal hearing before the 

Board. However, the IBVSOs are pleased that VA has engaged 

with us regarding their proposals, and we hope to find reasonable 

and tangible solutions to address the appeals process. 

I would like to highlight that we have put forth several recommendations to address the appeals issues, such as eliminating 

or amending the new and material evidence standard, fencing off 

decision review officers, and enacting fully-developed appeals legislation that passed in the House and was introduced here in the 

Senate. We would like to thank Senators Sullivan, Casey, Heller, 

and Tester for their support on this legislation. 

We cannot emphasize enough how important it is to move FDA 

legislation forward. FDA has the potential to provide tangible relief 

to both appellants and VA. FDA differs from VA’s proposed simplified appeals process because while it has sped up appeals processing, it is a voluntary option, tempered with critical due process 

protections currently afforded to veterans. 

Chairman Isakson and Members of this Committee, thank you 

for allowing us the opportunity to testify today, and I look forward 

to your questions. 

Chairman ISAKSON. Thank you, Mr. Varela. 

Mr. Kelley? 

STATEMENT OF RAY KELLEY, DIRECTOR, NATIONAL 

LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS 

Mr. KELLEY. Mr. Chairman, on behalf of the 1.7 million members 

of the Veterans of Foreign Wars and our Auxiliary, thank you for 

the opportunity to testify today. As a partner of the IB, the VFW 

is responsible primarily for capital infrastructure and the National 

Cemetery Administration (NCA), so I will limit my remarks to 

those two areas. 

For more than 100 years, the Government solution to provide 

health care to our military veterans has been to build, manage, and 

maintain a network of Federal hospitals around the country. Many 

of these facilities need to be replaced, others need to be expanded, 

and all of them need to be maintained. VA uses what is known as 

the ‘‘Strategic Capital Infrastructure Plan,’’ or SCIP, to manage 

and identify VA’s current and projected gaps in building access, 

utilization, condition, and safety. 

Major and minor construction, leasing, and non-recurring maintenance make up the four cornerstones of VA’s capital infrastructure, and each work together to ensure veterans have access to 

their earned health care. 

While Congress and VA need to realign the SCIP process to allow 

VA to enter into public-private partnerships, both publicly and federally, to right-size VA’s footprint, it must continue to fund the 

238 

projects that are partially funded today and begin advance planning and design on those projects that we know VA needs to fund 

in the near future. 

Currently, there are 30 major construction projects that are partially funded. To completely fund these 30 projects, VA is going to 

have to invest more than $3 billion to complete them. These 

projects need to be put on a clear path to completion. 

Out of the next five major projects on the VA’s priority list, two 

of them are seismic in nature, two of them are specialty clinics— 

one is a mental health care clinic, the other is a spinal cord injury 

center—and one is in addition to an existing facility to eliminate 

access barriers. The IB recommends that Congress appropriate $1.5 

billion for fiscal year 2017 to help close these gaps. 

Approximately 600 minor construction projects need funding. 

Congress provided additional funding through the Choice Act, and 

VA developed a spending plan that will obligate over $500 million 

to 64 minor construction projects over the next 2 years. It is important to remember these funds are supplemental to and not a replacement for the annual appropriations for minor construction. 

With that in mind, the IB is requesting $749 million for VA’s minor 

construction accounts for fiscal year 2017. 

This year, VA is requesting $52 million for fiscal year 2017 leasing needs. While VA’s request is adequate, Congress needs to authorize these leases and the leases that were brought forward last 

year in their appropriation cycle. Even though non-recurring maintenance (NRM) is not found in the construction account, NRM is 

very critical to VA’s capital infrastructure. VA is investing more 

than $800 million in NRM projects that was funded from the 

Choice Act. But, to maintain the status quo, VA’s NRM account 

needs to be funded at $1.35 billion a year. 

The administration request is just over $1 billion for fiscal year 

2017. The IB requests that the full $135 billion baseline for appropriations for this line item be appropriated so NRM backlog does 

not grow any larger. 

NCA historically asks for and properly spends what it needs, and 

the IB recommends that NCA be funded at the requested level of 

$286 million. 

VA also provides construction grants for State extended care facilities and State veterans’ cemeteries. The IB requests $200 million for extended care facility grants and $51 million for cemetery 

grants. 

Thank you again for allowing the VFW to testify before you 

today, and I look forward to any questions you or the Committee 

may have. 

Chairman ISAKSON. Thank you, Mr. Kelley. 

[The prepared joint statement of PVA, DAV, and VFW for the 

Independent Budget follows:] 

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PREPARED JOINT STATEMENT OF THE INDEPENDENT BUDGET REPRESENTATIVES


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Mr. Celli? 

STATEMENT OF LOUIS J. CELLI, JR., DIRECTOR, NATIONAL 

VETERANS AFFAIRS AND REHABILITATION, THE AMERICAN 

LEGION 

Mr. CELLI. $103 billion in mandatory spending, money that goes 

directly to veterans based on laws passed by Congress for the sole 

purpose of attempting to make them whole again. $79 billion in 

discretionary spending for things like doctors, claims processors, 

administrative staff, IT infrastructure, hospital maintenance, and 

out of that, $65 billion will be spent for health care alone. 

Chairman Isakson, Ranking Member Blumenthal, Members of 

this Committee, on behalf of National Commander Dale Barnett 

and the 10 percent of all U.S. American veterans that make up The 

American Legion, we welcome this opportunity to comment on the 

Department of Veterans Affairs’ budget. In 2014, Kaiser Permanente had an operating revenue of $56.4 

billion and a staff of 177,000 employees. Meanwhile, for about the 

same amount of money, VA ran 150 hospitals, 819 CBOCs, 300 Vet 

Centers, 131 national cemeteries, and 56 regional offices, and they 

do it with a staff of 350,000. That is double Kaiser’s staff. And unlike private-sector physicians, VA providers are not eligible for 

overtime pay, so this weekend, when VA is conducting its second 

access stand-down in an attempt to zero out backlogged appointments, VA will incur very little additional expense while serving 

veterans. I am not sure we can expect the same level of dedication 

from private-level doctors ever. 

By law, VA facilitates the largest teaching hospital in the country, conducts statutorily mandated medical research, maintains 

emergency backup infrastructure in support of our national defense 

and national emergencies, processes millions of compensation 

claims, the appeals that result from those claims, cemeteries, processes GI bill payments, VA home loan applications, and insurance 

programs, all the while providing health care to millions of veterans in 50 States and the Caribbean. This is a massive budget 

that is broken down into hundreds of accounts and thousands of 

line items. Does VA have enough money? They have too much 

money. Is it wisely spent? Are there areas where VA can save 

money? All valid questions, but the bottom line is someone has got 

to do it, and to date, no one has come up with a cheaper solution. 

In the meantime, The American Legion recognizes that VA will 

need sufficient budget authority and flexibility in order to serve our 

members and the veterans of the United States of America, and 


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1 HVAC Hearing ‘‘Restoring Trust: The View of the Acting Secretary and the Veterans Community’’—July 24, 2014 

there are certainly areas where VA can save money. As highlighted 

in the written portion of my testimony, The American Legion would 

like to draw this Committee’s attention to three areas: consolidation of outside care; ensuring adequate VA staffing; and the growing number of pending appeals. 

With the enactment of the Choice Act, Congress added yet one 

more layer to an already complicated system of eligibility and payment structures. The time is now to fix it by organizing all of these 

programs under one umbrella, with a single point of entry and a 

logical physician reimbursement system that is streamlined and 

easy for primary care teams to use. This would not only save VA 

money, but it would provide better and faster health care for veteran patients. 

VA is a service-based industry. As in all service-based industries, 

the most expensive line item is employee burden. The fastest way 

to start saving money today is to reduce employee turnover. VA 

has a terrible problem filling vacancies in their mid- and upperlevel leadership positions and an even worse record of succession 

planning. If VA is to successfully keep their positions filled, they 

must do a better job with succession planning. It is rare, if it happens at all, that a deputy is promoted to the position of a departing 

director. This practice leaves little incentive for the deputy to remain loyal to the organization and breeds resentment once the new 

director is instilled. VA has 50 percent of leadership positions filled 

by temporary fill-ins or vacant. Fifty percent. Employee turnover is 

expensive and a waste of money when it can be avoided. 

Finally, claims. Every time a claim goes into the appeals process, 

it costs money. Adjudicate the claim correctly the first time, and 

the rate of appeals will be reduced to a trickle. We address the appeals today because VA has included a request to revamp the appeals process in their budget submission. As submitted, The American Legion does not support this plan. That said, VA has been 

working closely with The American Legion and our VSO partners 

to look at ways VA can improve the timeliness and quality of the 

appeals process, and we are excited and encouraged by the 

progress that we have made early on in this discussion and with 

the openness VA has shown in seeking detailed input from VSOs 

by treating them as valued partners. 

Senators, my time before you is short today, so I will be happy 

to try to address any questions you may have following my opening 

statement. But, more importantly, we look forward to our continued work with you and your very dedicated professional staff. 

[The prepared statement of Mr. Celli follows:] 

PREPARED STATEMENT OF LOUIS J. CELLI, JR., DIRECTOR, NATIONAL VETERANS

AFFAIRS AND REHABILITATION DIVISION, THE AMERICAN LEGION

‘‘What we have done historically is that we have managed to a budget number as 

opposed to managing to requirements . . . as a result we’ve muddled along and not 

met the needs veterans deserve.’’ 

∼ VA Acting Secretary Sloan Gibson before the House Committee 

on Veterans Affairs July 24, 2014 1

When now Deputy Secretary of the Department of Veterans Affairs (VA) Sloan 

Gibson addressed this Committee nearly two years ago, he was not advocating the 

257 

2Public Law Public Law 113–146 

3Such as Project Access Received Closer to Home (ARCH), the Patient Centered Community 

Care (PCs) program and others 

budgetary planning approach he described, but speaking to the problems that long 

standing approach could cause. Drawing contrasts with the planning models he was 

familiar with in the private sector, Deputy Secretary Gibson noted the historical approach was about managing to requirements. For VA to succeed and be great, they 

need to be able to move beyond managing requirements and move toward building 

planning based on need. 

Chairman Isakson, Ranking Member Blumenthal, and Members of the Committee: On behalf of National Commander Dale Barnett and the over two million 

members of The American Legion, we welcome this opportunity to comment on the 

Federal budget, and 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 consistent 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. 

What we present here is an attempt to focus on a few particular issues and projected needs, rather than what has been the historical and problematic approach of 

presenting a budget based on a number. While the budget numbers have gone up 

for VA, indicative of the commitment that Congress has shown even in tight fiscal 

times, there has still been the tendency to set a number and manage to that limit, 

rather than projecting the need and divining numbers from that need. 

In terms of future planning, and ensuring that VA’s budget meets needs in critical 

areas, The American Legion directs the Committee’s focus to three critical areas: the 

consolidation of outside care, ensuring VA’s medical hiring needs are met, and addressing the rising backlog of appeals. 

CONSOLIDATION OF OUTSIDE CARE

When the Choice Card program was added as a temporary emergency measure 

as part of the Veterans Access, Choice and Accountability Act (VACAA) of 2014 2, The American Legion supported the program because we had seen firsthand the 

need across the country. During 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 Card program provided an immediate short term option, but 

also provided an opportunity to learn how veterans utilized the program. At the 

time, The American Legion advised gathering as much data as possible from veterans’ use of the program to make all of VA’s other existing authorities for care in 

the community 3 better in their ability to serve veterans. 

Ultimately that has led to the current transformation in VA’s community care 

programs. As directed by the Surface Transportation and Veterans Health Care 

Choice Improvement Act of 2015 (VA Budget and Choice Improvement Act) in 

July 2015, VA has developed a plan to consolidate all existing programs into a single community care program, the New Veterans Choice Program (New VCP). Generally, The American Legion supports the plan to consolidate VA’s multiple and disparate purchased care programs into one New VCP. We believe it has the potential 

to improve and expand veterans’ access to health care. Much depends, however, on 

the department’s success in working with its employees, Congress, VSOs, private 

providers, academic affiliates, and other stakeholders as the agency moves forward 

in developing and implementing the plan. 

With an eye toward budgetary matters, there are two important considerations 

revolving around this new transformation that must be implemented in future budgets: (1) VA must have the ability to spend all community care monies under the new 

framework; and (2) the additional funding required to provide for the Choice Card 

program needs to be factored into future budgets. 

During 2015, VA ran into problems with budgetary shortfalls because of the separation in funding between Choice Card care and other community care authorities. 

Because of the strong push to ensure veterans were seen as quickly as possible, VA 

quickly exhausted care in the community funding, while emergency funding for the 

Choice Card program was still available. VA was forced to seek, and was granted, 

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4 VA Pending Appointments—January 15, 2016 

5 USA Today—September 2015 6 VA Office of the Inspector General (VAOIG) Report No. 15–03063–511 ‘‘OIG Determination 

of Veterans Health Administration’s Occupational Staffing Shortages’’—September 2015 7 Ibid 

authority to move some of the $10 billion allocated to fund the Choice Card program 

over the three year pilot to cover care in the community costs. 

By now, as the transformation of care in the community moves forward to a plan 

with a single, overarching authority for this care (New VCP) the distinctions between the VACAA Choice funds and community care funding should be academic. 

While The American Legion understands there are reasons certain funding and accounts have limitations, and is not advocating for a wholesale removal of barriers 

for VA to move funding, in this instance is makes sense. Care in the community 

is care in the community, and VA must have a single stream of funding for this. 

It is important to recognize that the need for the extra funding was and is real. The VACAA provided $10 billion for treating veterans in the community through 

Choice because the need to fund that care was real. Those needs are not going away. 

As of last month, VA had over 6.1 million appointments scheduled nationwide, and 

more than 8.5% of those appointments are still waiting over 30 days for treatment.4

VA has seen their number of completed appointments jump by over 2.6 million last 

year, and throughout this they still need to authorize millions of appointments for 

outside care. 

The $10 billion from VACAA was provided as emergency funding, but in the future, we must plan for the tremendous demand on the VA system. This is a direct 

illustration of the managing to numbers versus managing to need contrast mentioned above. For future budgets, we must ensure that VA is receiving funding for 

care that adequately reflects how they must deliver that care. A robust budget for 

VA medical care is necessary, but as the past few years have shown, VA has been 

dependent on care in the community as well to provide timely care to veterans 

where they are overburdened by scheduling, staffing, or lack of adequate resources. 

This needs to be reflected in the community care budgets, not as an emergency 

measure when the problem boils over and out of control. 

ENSURING PROPER VA STAFFING

One reason VA may sometimes struggle to provide care within the Veterans 

Health Administration (VHA) is directly related to staffing. The staffing figures can 

be ugly. One in six positions nationally for some critical jobs remain vacant, and 

critical needs like psychiatric workers can see vacancy rates of 40–64%.5

To be fair, the VACAA already provided funding for 10,000 new healthcare positions, however funding new positions alone may not be the solution and there may 

be budgetary means to address some of the vacancies. Even when VA is hiring an 

additional 9% of their workforce they are losing a similar amount to attrition.6 Some 

of this could be improved with better hiring incentives and more competitive wages, 

particularly in key fields of need such as psychiatric care, physician’s assistants, 

nurses and physical therapists. 

As the Office of the Inspector General recommended, VA also bears additional responsibility in the form of the development of better staffing models and examining 

the red tape and bureaucratic burdens that stretch hiring out into a process that 

can take nine months or longer.7 Additional examination of where VA can better 

incentivize prospective applicants to decide on a career serving veterans would be 

helpful. We need to ensure VA has proper funding to get the best and brightest 

team members on their medical and psychological staffs serving veterans. 

The VA can further help improve their staffing, especially in leadership positions, 

with better succession planning for VA employees to rise to leadership levels within 

the organization. As an organization of advocates that has worked hand in hand 

with VA for decades, The American Legion notes the training programs VA had in 

place during the 1990’s were better suited to creating the next generation of leadership than the current programs in place. The VHA training programs of the 1990’s 

were specifically built to prepare administrative employees to assume mid-level 

management programs at the department level. This could include personnel, fiscal, 

medical administration, associate director training and other leadership training. 

The programs were replaced, over time, with VA’s current Leadership Development 

Programs, but feedback The American Legion has garnered from interacting with 

VHA personnel during visits from our System Worth Saving Task Force has indicated these programs are not providing the tools the employees need to be the next 

generation leaders of VA and to lead from within. Additional consideration to revamping this portion of training, and ensuring this training is properly funded, 

259 

8 VA Claims Backlog Dashboard—January 30, 2016 

9 VA Monday Morning Workload Report—February 1, 2016 

10Testimony of The American Legion—HVAC Hearing February 11, 2015 

could be a key component to reducing VA’s reliance on the complicated process of 

hiring from outside VA and ultimately reduce the number of unfilled leadership 

positions. 

THE LOOMING APPEALS CRISIS

Last year, 2015, was the year VA was supposed to ‘‘break the back of the backlog’’ 

of veterans’ claims for disability benefits. While VA has made substantial progress 

according to their public figures in reducing the number of initial claims—the 

‘‘claims backlog’’ sits at around 77,000 claims today 8 down from a peak of over 

600,000 claims in early 2013—those numbers do not reflect the waiting period for 

many veterans who have been waiting for three or more years for their appeals to 

be decided. Over that same period the number of appeals has soared to over 325,000 

from their level of 250,000 in 2013.9 VA defines ‘‘backlog’’ as any case pending over 

125 days. Every single appeal represents a veteran who has been waiting for much, 

much longer than 125 days, but those 325,000 appeals are not counted as part of 

the ‘‘backlog.’’ 

Often the fastest way to resolve an appeal is with a Decision Review Officer 

(DRO) in a Regional Office (VARO). The DROs are among the most experienced employees, and can discern aspects of a claim that a newer employee might miss, furthermore after an initial denial the veteran can be better equipped to provide information the VA noted was lacking in the initial denial. Because everything stays 

within the VARO, correspondence with the veteran and with a service officer helping that veteran is direct and many claims can be resolved more quickly through 

this process. The DRO review can be one of the best tools for speedy adjudication 

of an appeal and to reduce the appeals backlog. However, the unfortunate case recently is that DROs have not always been free to handle their appeals workload. 

The Veterans Benefits Administration (VBA) has been under a singular mission 

to reduce the backlog. To this end they have forced over four years of mandatory 

overtime, and key veteran staffers including DROs have seen their workloads adjusted to focus on the initial claims, the claims that are counted in the VA statistics 

for ‘‘backlog.’’ This can have the effect of keeping DROs from devoting full attention 

to their appeals workload, and the growing appeals backlog cannot be seen as an 

accident. 

Last year, The American Legion noted that occasional mandatory overtime in a 

short term crisis is prudent management, but four straight years is indicative of an 

organization that’s clearly understaffed. The American Legion reiterates our call for 

better study of VBA staffing models, but also notes that last year VA had proposed 

making the DRO process more robust, something we wholeheartedly support. 

‘‘DROs can often resolve appeals more rapidly than the appeal process at 

the Board of Veterans Appeals (BVA) and with greater accuracy and clarity 

than the average VA rater. Reports have indicated in some offices the 

DROs have been reassigned to other tasks as the pressure mounts to work 

on initial claims. It would be the hope of The American Legion that renewed interest in hiring and increasing the DRO force would allow DROs 

to return to their appeals duties, and help prevent a rising backlog in the 

appeals area.’’ 10

There have been many recent proposals for measures to transform appeals as the 

initial claims process was transformed by the Veterans Benefits Management System (VBMS) and the Fully Developed Claims (FDC) process. The American Legion 

is supportive of transformative thinking, clearly the system as it has existed in the 

past has many flaws and has not always served veterans with the ability to develop 

prompt and accurate decisions on disability claims. However, it is also critical to understand that there is important due process in the system to protect veterans, and 

we cannot abandon these things in the interest of simply faster decisions or more 

convenience for VA. 

Due process is important to protect veterans, especially veterans who may be 

uniquely vulnerable due to their disabilities incurred in the service of this Nation. 

It is one of the reasons the veterans’ disability claims system has been specifically 

cited as ‘‘uniquely pro-claimant’’ in the manner it serves veterans filing for beneVerDate Mar 15 2010 19:02 May 01, 2017 Jkt 000000 PO 00000 Frm 00263 Fmt 6633 Sfmt 6621 Z:\ACTIVE\022316.TXT PAULIN
260 

11See Jaquay v. Principi, 304 F.3d 1276, 1280 (Fed. Cir. 2002); Nolen v. Gober, 222 F.3d 1356, 

1361 (Fed. Cir. 2000); Hensley v. West, 212 F.3d 1255, 1262 (Fed. Cir. 2000). 

fits.11 Veterans need to depend on the ability to get a DRO review in a timely fashion, or to submit evidence in response to the VA when they are informed their claim 

is lacking proof of a key point, such as documentation of an event that happened 

in service. 

One of the best things to help address the growing appeals backlog would be to 

increase funding for DROs to fully staff all offices and to add additional full time 

employees elsewhere within the offices to get the DROs back to doing what they do 

best, reviewing appeals in a timely manner. The budget should also reflect additional funding to study proper staffing levels within the VBA, because four years 

of mandatory overtime is a warning flag that has been waving to tell us we’re not 

supplying enough staff to deal with the backlog of veterans’ claims. 

Whether it is appeals or initial claims, a backlog is a backlog, and the budget 

must reflect sufficient resources to address these claims, otherwise veterans will be 

forced to do what we have become all too familiar with—wait. 

CONCLUSION

The VA cannot afford to be run as an entity reactive to one crisis after another. 

Effectiveness stems from long term planning, and to be truly effective that long 

term planning needs to include all stakeholders. While there are other areas that 

can benefit from predicting crises before they occur and providing resources to perceived needs, these three areas represent a key start in the sort of thinking that 

must be adopted to make VA successful in the long run. 

In order to assimilate all outside care under one cohesive management authority 

VA needs the budget flexibility to utilize the Choice Card funds for community care 

as well as to see a boost to community care funding commensurate with the increased demand. The VACAA infused $10 billion in care funding because there was 

an emergency, but the demand has not gone away and future funding levels must 

reflect this as part of the plan, not a reaction to a crisis. 

There must be attention paid to 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 secure those key performers. That is the long term key to ensuring veterans get the care they need in 

a timely fashion in the system that is designed to treat their unique wounds of war. 

Four years of mandatory overtime and reassignment of DROs needs to stop if VA 

is going to prevent the growing appeals backlog from reaching disaster levels. Funding must be given to better assess the workforce within VBA and to provide the full 

time employees needed to accomplish the mission while keeping top assets like 

DROs working on the work they do best. 

Chairman ISAKSON. Thank you, Mr. Celli. Thanks to all of you 

for testifying, and thanks to your organizations for your advocacy. 

Mr. Varela and Mr. Celli, let me just get right to the point. Both 

of you commented directly on objections or concerns about reforming the appeals process and the VA’s plans on how they might do 

that. We cannot continue to do what we are doing now, which is 

have a backlog of claims at almost half a million, some 25 years 

old that continue to build up. We need your help to come up with 

a solution that you support and the VA can implement. Will you 

all commit to us to work with the Secretary to try and make such 

a recommendation? 

Mr. CELLI. We already have, and we continue to commit to working with the Secretary. We have already had several meetings now 

with Deputy Sloan Gibson. We have worked with our VSO partners, and I would like to associate myself with the comments of Mr. 

Varela and DAV as well. 

Chairman ISAKSON. Well, your comments were very timely and 

very appropriate, but being timely means we need to move forward. 

The Secretary needs some tools in his toolbox he does not have, 

and one of them is getting this whole backlog straightened out. So, 

261 

let us work toward a date at the end of March trying to come together on some kind of consolidated agreement. Would you all work 

with us on that? 

Mr. CELLI. We agree. 

Chairman ISAKSON. Mr. Varela, you commented on the fact that 

your testimony recommends 158 full-time employees in voc rehab 

and employment services, and once again this year, the VA has 

asked for none. Is that correct? 

Mr. VARELA. That is correct, Mr. Chairman. 

Chairman ISAKSON. Are you familiar with the Workforce Innovation and Opportunity Act, WIOA? 

Mr. VARELA. Yes, I am, Mr. Chairman. 

Chairman ISAKSON. Are those funds available to the VA commissioners in the various States to utilize for training for vocational 

rehabilitation? 

Mr. VARELA. I will have to take that for the record. I do not know 

that offhand. 

Chairman ISAKSON. I would suggest you check that out. When we 

did the WIOA act, we made sure to give the States the flexibility 

to do veterans training and rehabilitation as a part of that. That 

is a source of funding and personnel that could be dedicated—it 

would not add personnel to the VA, but it would add the service 

to the VA’s whole quiver. So, I would appreciate your checking on 

that and being sure. 

Mr. VARELA. I will. 

[The information referred to follows:] 

RESPONSE TO REQUEST ARISING DURING THE HEARING BY HON. JOHNNY ISAKSON TO

PAUL VARELA, ASSISTANT NATIONAL LEGISLATIVE DIRECTOR, DISABLED AMERICAN

VETERANS

Yes, WIOA funds can be used to supply vocational rehabilitation. 

However, those funds are ‘‘not’’ dedicated solely for injured and ill veterans, they 

are available to non-veterans alike, so these two groups would have to compete for 

those resources. 

The Vocational Rehabilitation and Employment (VR&E) services within the Department of Veterans Affairs are dedicated solely for the use of injured and ill veterans. 

Chairman ISAKSON. Mr. Blake, your testimony recommends $75 

million in directed funding for the Million Veteran Program (MVP) 

independent of or supplemental to the funds proposed for the medical and prosthetic research account. Could you further explain the 

recommendation for dedicated funding for the MVP genetic research program? 

Mr. BLAKE. Well, Mr. Chairman, that is a special program, a 

genomic study that the VA is doing as sort of a longitudinal study 

of all veterans for research purposes that can evaluate the wide variety of issues unique to veterans. 

I think our concern is it is a heavy lift to fund that program to 

function the way it is intended, and the VA does a good job of expending much to all of its resources already dedicated for the existing medical and prosthetic research account. Unfortunately, this 

year I think the VA is projecting to draw about $60 or $65 million 

out of its appropriations request just for MVP. That would actually 

bring the medical and prosthetic research account number back 

below what was just approved in the appropriations bill back in 

262 

December. We think it would be better served to actually direct 

funding for that program independent of the medical and prosthetic 

research line item. 

Chairman ISAKSON. Well, thank you for your testimony and for 

your organization, and I want to repeat what I said at the beginning to Mr. Varela and Mr. Celli and Mr. Kelley. Mr. Blake, this 

applies to you as well. If we can form a goal to get this appeals 

process worked out in terms of VA claims and VA’s appeals, that 

would be a major move forward, and your organizations’ support of 

doing that would be critical. We are at a point now where the Committee I think is prepared to move forward on some major legislation to resolve some of our problems. Let us not let another year 

go past by kicking the can down the road. Let us make the reforms 

necessary to get the VA straightened out. I appreciate your help in 

doing so. 

Senator Blumenthal? 

Senator BLUMENTHAL. Thanks to all of you for being here today. 

Thank you for your service. I apologize that I was not here earlier, 

but this is my fourth Committee meeting today, and one of them 

was the Armed Services Committee where we are assessing the capability of our military force in the South Pacific, an issue I know 

you feel is important as well. So, thank you to the men and women 

who serve with you, and thank you for your advocacy here. 

I want to come back to a topic that I asked the Secretary about, 

which is the capacity of our VA to deal with women’s health care, 

and although we have an all-male panel here, or maybe because we 

have an all-male panel, I want to ask how you feel the VA is doing 

judging by what you are hearing from members of your organizations. 

Mr. CELLI. If you do not mind, I will start. The American Legion 

has a program that we call ‘‘A System Worth Saving.’’ We visit VA 

hospitals around the country. One of the things that we specifically 

look at is women’s health care. Female veterans, as we all know, 

are the fastest-growing population of veterans, and while VA has 

had a very difficult time standing up women’s health care programs, lately they have come a long way. There are several new 

women’s health care clinics spread out across the country. Does 

every CBOC and every hospital have a women’s clinic? They do 

not. Do they have women’s sections? They do. Could they be improved? Yes, they can. They are moving in that direction. They 

need to make sure that they maintain the flexibility in spending 

and the funding to create that. 

Also on that, we also need to make sure we continue to keep an 

eye on child care. There are a lot of women veterans who will forgo 

their medical appointments because they do not have sufficient 

child care. VA has a program by which they can stand up some 

child care clinics within the women’s health care clinic center. We 

need to make sure those remain funded. 

Senator BLUMENTHAL. That point about women’s child care is 

very, very important. I have heard this repeatedly in Connecticut. 

We have a new facility, a new clinic in Connecticut. It is a tremendous improvement. But, the issue of child care, the issue of transportation, the issue of taking off from work, which may affect men 

263 

as well as women, but particularly so for women. I would welcome 

any other comments. 

Mr. BLAKE. Mr. Blumenthal, one of the things I would mention 

is while I obviously cannot speak from the perspective of how 

women are experiencing the VA, we appreciate that the VA has 

dedicated new additional resources, I think to the tune of about 

$40 million, for their programs. I would believe that more could 

even be done. The IB actually recommends about $90 million in 

2017 and an additional $100 million in 2018. 

I would also offer that while I think it would be unfair to say 

that there are not still some challenges in delivering health care 

to women veterans, one of the areas where we clearly see some difficulty still is in meeting the needs of women veterans who have 

catastrophic disabilities, particularly women with spinal cord injuries like our membership. 

If it is a challenge to deliver care just to women veterans, when 

you add on the aspect of complicated services and the specialized 

services program, that adds a whole new element that I do not 

think they have thought completely out of the box on yet. 

Mr. KELLEY. As quick as I can, we just commissioned a survey 

and got the results back, and we are going to be sharing those on 

Capitol Hill when our folks are here next week doing ‘‘Storm the 

Hill.’’ As a recap, women veterans who access VA are, by and large, 

pleased with it. They want better access to women health care providers. Only 40 percent of them are being provided access to a female provider if they ask for it. 

Also, it goes much further than just access to health care. You 

mentioned child care. One of the leading causes of lack of ability 

to get to health care services and also employment services that VA 

has is the lack of child care. It is a hindrance. It is leading to 

homelessness and people sleeping on other people’s couches with no 

way out. So, we need to tackle that as a larger issue. 

Also, women veterans who are over the age of 55 use VA at a 

much lower rate than the current generation of veterans, so we 

need to figure out how to do outreach to that generation of veterans to let them know that the services at VA are there for them 

as well. 

Senator BLUMENTHAL. Before we go to Mr. Varela—and I welcome your comments, too—Mr. Kelley, the survey that was done, 

is that of the VFW members or of women veterans generally? 

Mr. KELLEY. We sent it through our membership data pool, and 

we also shared it within the community for them to send out to 

their membership as well. We have active duty, Guard, Reserve, 

veterans from multiple organizations and walks of life. 

Senator BLUMENTHAL. The number that you mentioned, 40 percent, that is the number of women veterans who want to see a 

woman health care provider? Maybe you could just explain that. 

Mr. KELLEY. It is 40 percent of those who are seeking health care 

through the women’s health care clinics, 40 percent of them are 

being seen by a female provider. But, by and large, all of them 

want to be seen by a female provider. 

Senator BLUMENTHAL. But, only 40 percent are now. 

Mr. KELLEY. Yes. 

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Senator BLUMENTHAL. In addition to the other challenges that 

the VA has in recruiting more professionals, female professionals 

to deal with women’s health care issues—— 

Mr. KELLEY. Right. In VA’s defense, they are doing a great job 

of training the doctors that they have for the particular needs of 

women veterans. But, when asked, ‘‘Would you prefer to have a female doctor?’’ by and large, they want to have that as well. 

Senator BLUMENTHAL. That may be a key to involving more 

women in seeking health care through the VA system, the availability of women physicians. 

Mr. KELLEY. Absolutely. 

Senator BLUMENTHAL. Thank you. 

Mr. Varela? 

Mr. VARELA. Thank you, Senator Blumenthal. I would align our 

comments and sentiments with those of the VSO panel up here. I 

would also add that the women veterans that we hear from routinely say they do not want better care; they want comparable care. 

We do believe that the VA is moving in the right direction, but 

more can be done. 

Senator BLUMENTHAL. I would just like to finish, with the Chairman’s indulgence. I know, Mr. Blake, you said that the VA’s dollar 

amount for health care for fiscal year 2018 is lower than you would 

like to see. Is that correct? 

Mr. BLAKE. That is correct. One—— 

Senator BLUMENTHAL. But—sorry, go ahead. 

Mr. BLAKE. No, sir. You. 

Senator BLUMENTHAL. What is the number that you think it 

should be? 

Mr. BLAKE. The IB recommends for 2018, overall for medical 

care, our recommendation is about $77 billion for medical services 

alone. It is about $64 billion. One of the things I would point out, 

though—and this is a touchy subject even for our membership, but 

looking at the community care account alone—the VA projects to 

spend $12.2 billion in 2017 on all community care, that is through 

Choice and through its community care account. Yet their projection for 2018 reduces that projection by almost $3 billion. Now, I 

am not here advocating for expanding community care, but I am 

not sure how they can even square that fact. 

Senator BLUMENTHAL. Thank you very much. I think that is a 

very, very important insight. 

I want the record to show that Secretary McDonald and his team 

are here. They are listening to you. I want to thank them for remaining here. It is not always the case, as you know, that the head 

of an agency stays to hear panels afterward, but I think it is a 

mark of the expertise and experience and insight that this panel 

brings to this process that he and his team have stayed, so I want 

to thank all of them for being here, and thank you particularly for, 

again, your service to our Nation in uniform and afterward in the 

organizations that you serve now. Thank you. 

Chairman ISAKSON. Thank you, Senator Blumenthal. 

Senator Boozman? 

Senator BOOZMAN. Thank you, Mr. Chairman. I would echo the 

Ranking Member. We do appreciate your service in so many different ways to your country and your fellow veterans. 

265 

We have your written testimony and we have heard your spoken 

testimony. There are lots of issues today, lots of concerns. If you 

would just take a second to go through and have you tell me, if you 

had to summarize the top one or two things that you are really 

concerned about with this budget. That is really what we are talking about today. What is at the top of the list? What are your real 

concerns regarding the numbers that we are seeing on the budget 

as to where they are going? 

Yes, sir, Mr. Blake? 

Mr. BLAKE. Senator Boozman, I would say from PVA’s perspective, our concern is clearly what is a projected escalated growth in 

community care spending. I recognize it is a need to address access, 

but that does not improve access for PVA’s members. The fact is, 

by and large, our members do not use the existing Choice Program. 

They do not use PC3. They do not avail themselves of the community care programs because they are best served by the SCI system 

of care in VA. 

For all of this work toward expanding community care access, 

PVA’s members feel like they are maybe being left out in the cold 

in that discussion. VA is certainly committed to making sure there 

is access for our members in the SCI system of care, but there is 

certainly more than can be done. 

Senator BOOZMAN. Very good. 

Mr. KELLEY. I would like to include capital infrastructure. If you 

just look at the way the SCIP has ben put together, in between, 

it is around $60 billion in construction and infrastructure needs 

that VA would need to do under the current model to close that out 

over the next decade. That is a tremendous amount. We need to 

look at ways to afford VA the opportunity to enter into public-private partnerships, do sharing agreements with other Federal agencies, to ensure that we can reduce some of that backlog on new construction, but also get us out from underneath some of these older 

buildings that have non-recurring maintenance costs that are outrageous because they are so old. I mean, as mentioned in the first 

panel, if you are trying to maintain a building that is 90 years old, 

the non-recurring maintenance value of that is much, much higher 

than a building that is 10 years old. 

So, we need to give them the ability to do those things, so we 

need to really clearly look at where are we going with construction 

in the future and then try to align that $60 billion. What can we 

carve off of that if we have these other opportunities afforded to VA 

in the future? 

Senator BOOZMAN. Very good. 

Mr. CELLI. I think by far recruiting and retention. The independent assessment clearly highlighted some leadership deficiencies within the Department of Veterans Affairs that everybody 

recognizes needs to be fixed immediately. If you have got a skeleton 

crew working, you are not going to be able to serve veterans. If you 

have got people filling in for jobs that they are not going to be 

keeping, you have got a leadership that is unwilling to make decisions, which then goes ahead and contributes to whistleblower retaliation, people being dissatisfied with their jobs. We have got to 

get these positions filled. 

266 

I heard the Secretary and Dr. Shulkin talk a little bit about reviewing the infrastructure to find out how many of these positions 

are actually needed. We cannot make that decision. They will have 

to do that assessment. But, if they do eliminate those positions, the 

people that are filling those positions that have been pulled from 

other positions will go back. It is a ripple effect. 

We have, like I said, roughly 50 percent over the VHA landscape 

of leadership that is either in a temporary position or vacant. If 

those individuals that are filling in those leadership positions are 

just plugging the gaps so that the operation can move forward, 

their positions are now vacant. So, it is a very difficult situation 

that needs to be fixed, and it needs to be fixed immediately. 

Senator BOOZMAN. Yes, sir? 

Mr. VARELA. Thank you, Senator. If I could just comment on the 

VBA portion, which is my area of oversight within the IB, our serious concerns lie within the amount of personnel that they have requested for VBA particularly to process appeals. As we said, we 

think about 1,000 FTEEs should be dedicated to processing appeals 

only. 

I would say that we have tempered that request also not simply 

saying that we need to hire 1,700 new FTEEs for that program 

specifically, but to temper that with hiring on a temporary basis 

maybe a portion of that so that once we get the backlog managed 

and once we get the inventory managed, we may not need all of 

those people. 

Also, within VR&E, one of the most important programs with the 

VA, you take wounded, injured, and ill veterans, help them overcome their obstacles, and put them right back into the workforce. 

I mean, how does the program continue to increase each fiscal year, 

yet their staffing levels do not? That is a major concern for us. 

Senator BOOZMAN. OK. Very good. Thank you, Mr. Chairman. 

Thank you, gentlemen. 

Chairman ISAKSON. Thank you, Senator Boozman. 

Senator Blumenthal, thank you, and I want to thank the Secretary for staying. Dr. Shulkin, thank you very much for your testimony. To the VSOs: we depend very heavily on what you have to 

say and your active participation as we all work together for the 

best benefit of our veterans. Thank you for your testimony, and 

thank you for what you do. 

Remember what I said about our goal. We really want to try to 

take action by the end of March and have a consolidation of bills 

put together that give flexibility of direction and the flexibility the 

Secretary needs to have accountability within the VA; make sure 

we make a move forward on reducing the backlog of claims, not by 

cutting people’s ability to make them out, but by streamlining the 

process to make sure it is faster and more accountable to the veteran. 

Thank you all for your testimony. We stand adjourned. 

[Whereupon, at 12:03 p.m., the Committee was adjourned.] 

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