Report to the Chairman, Committee on 

Veterans’ Affairs, House of 

Representatives 

United States Government Accountability Office

GAO 

November 2004 VA LONG-TERM 

CARE 

Oversight of Nursing 

Home Program 

Impeded by Data Gaps

GAO-05-65 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-65.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Cynthia A. 

Bascetta at (202) 512-7101. 

Highlights of GAO-05-65, a report to the 

Chairman, Committee on Veterans’ 

Affairs, House of Representatives 

November 2004

VA LONG-TERM CARE

Oversight of Nursing Home Program 

Impeded by Data Gaps 

In fiscal year 2003, VA spent 73 percent of its nursing home resources on VA 

nursing homes—almost $1.7 billion of about $2.3 billion—and the remaining 

27 percent on community and state veterans’ nursing homes. 

Half of VA’s average daily nursing home workload of 33,214 in fiscal year 

2003 was for state veterans’ nursing homes, even though this setting 

accounted for 15 percent of VA’s overall nursing home expenditures. In large 

part, this is because VA pays about one-third of the cost of care in state 

veterans’ nursing homes. Community nursing homes and VA nursing homes 

accounted for 13 and 37 percent of the workload, respectively. 

About one-third of nursing home care in VA nursing homes in fiscal year 

2003 was long-stay care (90 days or more). Long-stay services include those 

needed by veterans who cannot be cared for at home because of severe, 

chronic physical or mental impairments such as the inability to 

independently eat or the need for supervision because of dementia. The 

other two-thirds was short-stay care (less than 90 days), which includes 

services such as postacute care needed for recuperation from a stroke. VA 

lacks similar data for community and state veterans’ nursing homes. 

About one-fourth of veterans who received care in VA nursing homes in 

fiscal year 2003 were served because the Millennium Act or VA policy 

requires that VA provide or pay for nursing home care of veterans with a 

certain eligibility. All other veterans received care at VA’s discretion. VA 

lacks data on comparable eligibility status for community and state veterans’ 

nursing homes even though these settings combined accounted for 

63 percent of VA’s overall workload. Gaps in data on length of stay and 

eligibility in these two settings impede program oversight. 

Data Gaps on Length of Stay and Eligibility for VA’s Nursing Home Program, Fiscal Year 

2003 

Note: The workload measure is average daily census, which represents the total number of days of 

nursing home care divided by the number of days in the year. 

The Department of Veterans Affairs 

(VA) operates a $2.3 billion nursing 

home program that provides or 

pays for veterans’ care in three 

settings: VA nursing homes, 

community nursing homes, and 

state veterans’ nursing homes. The 

Veterans Millennium Health Care 

and Benefits Act (Millennium Act) 

of 1999 and VA policy require that 

VA provide nursing home care to 

veterans with a certain eligibility. 

The Committee has expressed a 

need for additional data to conduct 

oversight of VA’s nursing home 

program. Specifically, for all VA 

nursing home settings in fiscal year 

2003, GAO was asked to report on 

(1) VA spending to provide or pay 

for nursing home care, (2) VA 

workload provided or paid for, 

(3) the percentage of nursing home 

care that is long and short stay, and 

(4) the percentage of veterans 

receiving care required by the 

Millennium Act or VA policy. 

What GAO Recommends

To help ensure more complete data 

for program monitoring and 

congressional oversight, GAO 

recommends that VA collect data 

on veterans’ length of stay and 

eligibility for community nursing 

homes and state veterans’ nursing 

homes comparable to data VA 

collects for VA nursing homes. VA 

stated that it concurred in principle 

with GAO’s recommendations and 

will work to reduce data gaps GAO 

identified. However, VA did not 

indicate specific plans to collect 

the data GAO recommended. 
Page i GAO-05-65 VA Nursing Home Program 

Letter 1

Results in Brief 3 

Background 5 

VA Spent Almost Three-Quarters of Its Nursing Home Resources 

on Care for Veterans in VA Nursing Homes, but Expenditures 

Varied Widely by Network 7 

State Veterans’ Nursing Homes Provided Half of VA’s Overall 

Nursing Home Workload, but Networks’ Use of Nursing Home 

Care Setting Varied 10 

About One-Third of VA Nursing Home Care Is Long Stay, but VA 

Lacks Comparable Information for Other Nursing Home Settings 14 

About One-Fourth of Veterans Who Received Care in VA Nursing 

Homes Are Required to Be Served by the Millennium Act or VA 

Policy, but VA Lacks Comparable Information for Other Settings 18 

Conclusions 20 

Recommendations for Executive Action 21 

Agency Comments and Our Evaluation 21 

Appendix I Objectives, Scope, and Methodology 23 

Appendix II Changes in Percentage of Nursing Home Expenditures 

by Setting and Network, Fiscal Years 1998 and 2003 26 

Appendix III Changes in Percentage of Nursing Home Workload by 

Setting and Network, Fiscal Years 1998 and 2003 28 

Appendix IV Comments from the Department of Veterans Affairs 30 

Appendix V GAO Contact and Staff Acknowledgments 34 

GAO Contact 34 

Acknowledgments 34 

Related GAO Products 35 

Contents 
Page ii GAO-05-65 VA Nursing Home Program 

Figures 

Figure 1: Percentage of Nursing Home Expenditures by Setting, 

Fiscal Years 1998 and 2003 8 

Figure 2: Percentage of Nursing Home Expenditures by Setting and 

Network, Fiscal Year 2003 9 

Figure 3: Percentage of VA Nursing Home Workload by Setting, 

Fiscal Years 1998 and 2003 11 

Figure 4: Percentage of Nursing Home Workload by Setting and 

Network, Fiscal Year 2003 13 

Figure 5: Percentage of Long- and Short-Stay Care in VA Nursing 

Homes, Fiscal Years 1998 and 2003 15 

Figure 6: Percentage of Long- and Short-Stay Care in VA Nursing 

Homes by Network, Fiscal Year 2003 16 

Figure 7: Percentage of Veterans Receiving VA Nursing Home Care 

as Required by Millennium Act or VA’s Policy on Nursing 

Home Eligibility by Network, Fiscal Year 2003 19 

Abbreviations 

VA Department of Veterans Affairs 

VHA Veterans Health Administration 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 
Page 1 GAO-05-65 VA Nursing Home Program 

November 10, 2004 

The Honorable Christopher H. Smith 

Chairman 

Committee on Veterans’ Affairs 

House of Representatives 

Dear Mr. Chairman: 

The Department of Veterans Affairs (VA) operates a $2.3 billion nursing 

home program that provides or pays for veterans’ care in VA’s 21 health 

care networks.1

 Meeting veterans’ nursing home care needs is a key issue 

for VA because it has a large elderly veteran population, many of whom 

are in need of such care. In 2003, 38 percent of the veteran population was 

over the age of 65 compared to 12 percent for the overall population. VA 

provides or pays for veterans’ care in three nursing home settings. VA 

operates its own nursing homes and also pays for nursing home care 

under contract in non-VA nursing homes—referred to as community 

nursing homes. In addition, VA pays part of the cost of care for veterans at 

state veterans’ nursing homes and also pays a portion of the construction 

costs for some state veterans’ nursing homes. To enhance access to 

veterans needing nursing home care across VA’s health care system, an 

independent commission recommended in February 2004 that VA develop 

a strategic plan for long-term care that includes policies and strategies for 

the delivery of nursing home care.2

In November 1999, the Congress passed the Veterans Millennium Health 

Care and Benefits Act (Millennium Act),3

 which required that through 

December 31, 2003, VA provide nursing home care to those veterans with a 

 1

VA’s national health care system consists of 21 regional health care networks. These 

networks have budget and management responsibilities that include allocating budgetary 

resources for VA nursing homes. 

2

The independent commission is called the Capital Asset Realignment for Enhanced 

Services Commission. This Commission reviewed proposals by VA regarding realignment 

and allocation of capital assets, such as health care facilities, to better meet the demand for 

veterans’ health care services into the future. 

3

Pub. L. No. 106-117, 113 Stat. 1545 (1999). 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-65 VA Nursing Home Program 

service-connected disability rated at 70 percent or greater,4 those requiring 

nursing home care because of a condition related to their military service 

who do not have a service-connected disability rating of 70 percent or 

greater, and those who were admitted to VA nursing homes on or before 

the effective date of the act. Subsequent law extended these provisions 

through December 31, 2008.5 In addition, VA’s policy on nursing home 

eligibility required that networks provide nursing home care to veterans 

with 60 percent service-connected disability ratings who also meet other 

criteria.6

 For all other veterans enrolled in its system, VA’s policy on 

nursing home eligibility is to provide nursing home care in VA nursing 

homes and contract community nursing homes on a discretionary basis 

depending on available resources, with certain patients having higher 

priority, including veterans who require postacute care after a hospital 

episode. Veterans can also choose to seek care in state veterans’ nursing 

homes and if admitted, VA pays a portion of the cost to treat them. 

The Committee has expressed a need for additional data in order to 

conduct oversight of VA’s nursing home program, especially in light of the 

large elderly veteran population. These data needs have focused on the 

total amount of resources spent to deliver nursing home care in VA 

nursing homes, community nursing homes, and state veterans’ nursing 

homes and the amount of nursing home care provided with these 

resources. The Committee has also expressed a need for data on the 

percentage of veterans in VA’s nursing home program that received longand short-stay nursing home care. Long-stay care patients cannot be cared 

for at home because of severe, chronic physical or mental limitations. In 

addition, the Committee has expressed a need for data on the percentage 

of veterans in VA’s nursing home program that are required to be served 

based on the Millennium Act or VA policy. 

For all nursing home settings in VA’s program in fiscal year 2003, this 

report provides information on (1) VA spending to provide or pay for 

 4

A service-connected disability is an injury or disease that was incurred or aggravated while 

on active duty. VA classifies veterans with service-connected disabilities according to the 

extent of their disability. These classifications are expressed in terms of percentages—-for 

example, the most severely disabled such veteran would be classified as having a serviceconnected disability of 100 percent. Percentages are assigned in increments of 10 percent. 

5

The Veterans Health Care, Capital Asset, and Business Improvement Act of 2003, Pub. L. 

No. 108-170, § 106 (b), 117 Stat. 2042, 2046 extended this provision of the Millennium Act. 

6

These veterans must also be classified as unemployable or Permanent and Total Disabled 

(P&T). 
Page 3 GAO-05-65 VA Nursing Home Program 

nursing home care, (2) VA workload provided or paid for, (3) the 

percentage of nursing home care that is long and short stay, and (4) the 

percentage of veterans receiving care that are required to be served by the 

Millennium Act or VA policy. To place this information in context, we 

supplement our findings with information for fiscal year 1998.7

To perform our work, we reviewed documents and analyzed VA data on 

the amount of nursing home expenditures and workload, the percentage of 

long- and short-stay care, and the eligibility status of veterans based on the 

Millennium Act or VA’s policy on nursing home eligibility. In our 

calculation of expenditures, we included direct expenditures by VA to 

provide or pay for nursing home care plus costs to administer the program 

at the VA medical center. For this review, we measured nursing home 

workload as defined by average daily census, which reflects the average 

number of veterans receiving nursing home care on any given day during 

the course of the year. We used VA data to estimate the number of VA 

nursing home long stays, defined as 90 days or more, and short stays, 

defined as less than 90 days. To determine the eligibility status of veterans 

we used VA data to estimate veterans’ eligibility for VA nursing home care 

based on the Millennium Act or VA policy. In doing our work, we tested 

the reliability of the data and determined they were adequate for our 

purposes. For a complete description of our scope and methodology, see 

appendix I. We conducted our review from January 2003 through 

November 2004 in accordance with generally accepted government 

auditing standards. 

In fiscal year 2003, VA nursing homes accounted for almost $1.7 billion, or 

about three-quarters of the approximately $2.3 billion VA spent to provide 

or pay for veterans to receive nursing home care. In contrast, state 

veterans’ nursing homes and community nursing homes accounted for the 

remaining 27 percent or $624 million spent by VA on nursing home care. 

Since fiscal year 1998, the percentage of expenditures for VA nursing 

homes and state veterans’ nursing homes has increased while the 

percentage for community nursing homes has decreased. VA’s 21 health 

care networks vary widely in the percentage of resources spent on each 

nursing home care setting, although all networks spent a larger percentage 

of their resources on VA nursing homes. 

 7

We do not present data on eligibility for fiscal year 1998 because the Millennium Act was 

not enacted until fiscal year 2000. 

Results in Brief 
Page 4 GAO-05-65 VA Nursing Home Program 

State veterans’ nursing homes accounted for half of VA’s overall nursing 

home workload—average daily census—in fiscal year 2003, even though 

this setting accounted for only 15 percent of overall nursing home 

expenditures. In fiscal year 2003, state veterans’ nursing homes delivered 

care to 16,639 of the 33,214 veterans served on a daily basis. In contrast, 

VA used its nursing homes to provide 37 percent and paid for community 

nursing homes to provide 13 percent of its overall workload in that year. 

The percentage of workload served is higher than the percentage of 

expenditures in state veterans’ nursing homes, in part, because VA pays on 

average about one-third of the costs for care veterans receive in state 

veterans’ nursing homes, compared to the full cost in other settings. Since 

fiscal year 1998, VA’s use of nursing homes by setting has changed. The 

percentage of workload met in state veterans’ nursing homes increased, 

while the percentage of workload met in VA nursing homes and 

community nursing homes declined. Although state veterans’ nursing 

homes predominate overall, VA’s networks vary widely in the percentage 

of workload met in different nursing home settings. 

About one-third of the care VA provided in VA nursing homes was long 

stay in fiscal year 2003, but VA lacks comparable information for 

community nursing homes and state veterans’ nursing homes. Long-stay 

care (90 days or more) includes services needed by veterans who cannot 

be cared for at home because of severe, chronic physical or mental 

limitations such as the inability to independently eat or the need for 

supervision because of dementia or other conditions. About two-thirds of 

VA nursing home care was short-stay care (less than 90 days), which 

includes services such as postacute care needed for recuperation from a 

stroke or hip replacement. Since fiscal year 1998, the use of long-stay care 

in VA nursing homes has declined while the use of short-stay care has 

increased. VA does not collect and report comparable information on the 

length of stay for veterans in community nursing homes and state 

veterans’ nursing homes. 

About one-fourth of veterans who received care in VA nursing homes in 

fiscal year 2003 were required to be served by the Millennium Act or VA’s 

policy on nursing home eligibility. In contrast, about three-quarters of 

veterans in VA nursing homes received such care on a discretionary basis 

depending on available resources. VA does not collect and report 

comparable information on eligibility status for community nursing homes 

and state veterans’ nursing homes even though these settings combined 

accounted for 63 percent of VA’s overall workload. Although VA officials 

told us that medical center officials may know the eligibility status of the 

veterans they pay for in community nursing homes and state veterans’ 
Page 5 GAO-05-65 VA Nursing Home Program 

nursing homes, VA does not have the information at either the nationwide 

or the network level. 

To help ensure that VA can provide adequate program monitoring and 

planning for nursing home care and to provide a better basis for 

congressional oversight, we are recommending that VA collect data on 

veterans’ length of stay and eligibility for community nursing homes and 

state veterans’ nursing homes comparable to data VA currently collects for 

its nursing homes. 

In commenting on a draft of this report, VA stated that it concurred in 

principle with our recommendations. VA stated that it will continue its 

efforts to reduce data gaps in the community nursing home and state 

veterans home programs, but VA did not indicate specific plans to collect 

data on length of stay and eligibility for its long-term care planning 

process. Moreover, VA stated that data other than eligibility and length of 

stay, such as age and disability, are most crucial for its long-term care 

strategic planning and program oversight. We disagree with VA’s position 

that eligibility and length-of-stay data are not considered most crucial and 

are concerned about VA’s lack of specificity regarding its intent to utilize 

these data. While factors such as age and disability are generally 

recognized as important in projecting veterans’ overall need for nursing 

home care, VA needs veterans’ eligibility status and length of stay to 

determine what portion of the overall need VA will meet nationally and in 

individual communities. Eligibility data are crucial because VA needs to 

know who it is required to serve based on the Millennium Act or VA policy 

and what proportion of veterans it will serve on a discretionary basis. In 

addition, length-of-stay data are crucial because VA needs to know the 

type of nursing home care, short and long stay, that will be needed by the 

veterans it serves in each of its three nursing home settings. 

VA operates its nursing homes in 132 locations, which are located 

throughout VA’s 21 health care networks. Almost all of these nursing 

homes are attached or in close proximity to a VA medical center. 

According to VA policy, VA staff at these facilities determine whether the 

veteran has a clinical need for nursing home care based on a 

comprehensive interdisciplinary clinical assessment. The interdisciplinary 

teams determining clinical need for nursing home care could include 

personnel such as the nursing home director, a social worker, nurse, 

physical therapist, and gerontologist. The care provided to veterans at a 

VA nursing home could include a range of services, including short-term 

postacute care needed to recover from a condition such as a stroke to 

Background 
Page 6 GAO-05-65 VA Nursing Home Program 

longer-term care required by veterans who cannot be cared for at home 

because of severe, chronic physical or mental limitations. 

VA may also refer patients to receive nursing home care under contract 

from non-VA nursing homes located in the community—referred to as 

community nursing homes. In fiscal year 2003, VA purchased care from 

community nursing homes in one of two ways. VA contracted with most 

nursing homes through the local VA medical center. In addition, VA also 

contracted with some community nursing homes under its Regional 

Community Nursing Home initiative, in which nursing home chains in 

single or multiple states contract directly with VA headquarters for 

services at their nursing homes. In fiscal year 2003, VA contracted with 

1,723 nursing homes through its medical centers and with 508 more 

nursing homes under its Regional Community Nursing Home initiative.8

Veterans may also choose to seek care in state veterans’ nursing homes. In 

fiscal year 2003, 109 state veterans’ nursing homes located in 44 states and 

Puerto Rico received VA payment to provide care. VA may refer patients to 

these nursing homes for care, but does not control the admission process. 

Veterans are admitted based on eligibility criteria established by the states. 

For state veterans’ nursing homes to participate in VA’s program, however, 

VA requires that at least 75 percent of the residents be veterans in most 

cases.9

 State veterans’ nursing homes may also provide nursing home care 

to certain nonveterans, such as spouses of residents who are veterans. VA 

is authorized to pay for about two-thirds of the costs of construction of 

state veterans’ nursing homes and pays about a third of the costs per day 

to provide care to veterans in these homes.10 In fiscal year 2003, VA paid 

$56.24 per day for veterans in these state veterans’ nursing homes and 

 8

VA discontinued its Regional Community Nursing Home initiative and reverted these 

contracts to contracts through its medical centers in fiscal year 2004. 

9

If a state veterans’ home received a construction grant from VA, at least 75 percent of its 

residents must be veterans in order to participate in the VA per-diem program. If the state 

veterans’ home did not receive a construction grant from VA, VA requires that more than 

50 percent of the residents be veterans. See 38 CFR § 51.210 (d)(2003). 

10The daily amount paid per veteran in recognized state veterans’ homes is the per diem 

rate established under 38 U.S.C. §1741, for nursing home care. 
Page 7 GAO-05-65 VA Nursing Home Program 

awarded $174 million in grants to 16 states for renovations of existing 

facilities or construction of new state veterans’ homes.11

Veterans can also receive nursing home care financed by sources other 

than VA, including Medicaid and Medicare, private health or long-term 

care insurance, or self-financed.12 States design and administer Medicaid 

programs that include coverage for long-term nursing home care to assist 

with daily activities such as eating and bathing. Medicare primarily covers 

acute care health costs and therefore limits its nursing home coverage to 

short stays requiring skilled nursing home care following hospitalization. 

State Medicaid programs are the principal funders of nursing homes, 

besides patients self-financing their care. Private health insurance pays for 

about 11 percent of nursing home and home health care expenditures.13

VA nursing homes accounted for almost three-quarters of VA’s overall 

nursing home expenditures, or about $1.7 billion, in fiscal year 2003. Care 

in state veterans’ nursing homes accounted for 15 percent of nursing home 

expenditures, or about $352 million. Care in community nursing homes 

accounted for the lowest percentage of overall nursing home expenditures 

at 12 percent, or about $272 million. Overall, VA spent approximately 

$2.3 billion to provide or pay for nursing home care in VA nursing homes, 

community nursing homes, and state veterans’ nursing homes in fiscal 

year 2003. 

In contrast to fiscal year 1998, in fiscal year 2003 the percentage of 

expenditures from community nursing homes declined, whereas the 

percentage of expenditures for care in VA nursing homes and state 

 11These grants include resources for construction and renovation of state veterans’ nursing 

homes that provide services in addition to or other than nursing home care. Some state 

veterans’ nursing homes include—or consist solely of—domiciliaries, which are facilities 

for the care of veterans who do not require hospital or nursing home care but are unable to 

live independently because of medical or psychiatric disabilities. A small number of state 

veterans’ nursing homes also offer hospital care or adult day health care. 

12VA is not authorized, in most cases, to bill and collect payments from Medicare and 

Medicaid nor can VA bill other insurers for health care conditions that are related to 

military service. However, a veteran’s eligibility to participate in VA’s nursing home 

program does not prohibit a veteran from using these financing sources of nursing home 

care outside of VA’s health care system, if eligible. 

13See GAO, Long-Term Care: Aging Baby Boom Generation Will Increase Demand and 

Burden on Federal and State Budgets, GAO-02-544T (Washington, D.C.: Mar. 21, 2002). 

VA Spent Almost 

Three-Quarters of Its 

Nursing Home 

Resources on Care for 

Veterans in VA 

Nursing Homes, but 

Expenditures Varied 

Widely by Network 
Page 8 GAO-05-65 VA Nursing Home Program 

veterans’ nursing homes increased. (See fig. 1.) For example, 70 percent of 

nursing home expenditures were accounted for by VA nursing homes in 

fiscal year 1998 as compared to 73 percent in 2003. Moreover, the 

percentage of community nursing home expenditures was 17 percent in 

1998 as compared to 12 percent in 2003. During the same years, VA’s 

overall nursing home expenditures increased by about a third, growing 

from about $1.7 billion to approximately $2.3 billion. 

Figure 1: Percentage of Nursing Home Expenditures by Setting, Fiscal Years 1998 

and 2003 

The percentage of nursing home expenditures for care in each nursing 

home setting varied widely by network in fiscal year 2003. (See fig. 2.) All 

networks spent the largest percentage of their resources on VA nursing 

homes. The percentage of expenditures for VA nursing homes ranged from 

a low of 47 percent in Network 19 (Denver) to a high of 88 percent in 

Network 6 (Durham). Further, the percentage of overall nursing home 

expenditures accounted for by community and state veterans’ nursing 

homes also varied widely across the networks. For example, the 

percentage of expenditures for community nursing homes ranged from a 

low of 2 percent in Network 3 (Bronx) to a high of 28 percent in Network 

20 (Portland). 

1998 Nursing home expenditures: total $1.7 billion 2003 Nursing home expenditures: total $2.3 billion

70% 73%

13% 17% 15% 12%

VA nursing 

homes

Community

nursing homes

State veterans’

nursing homes

VA nursing 

homes

Community

nursing homes

State veterans’

nursing homes

Source: GAO analysis of VA data.
Page 9 GAO-05-65 VA Nursing Home Program 

Figure 2: Percentage of Nursing Home Expenditures by Setting and Network, 

Fiscal Year 2003 

Note: In January 2002 VA merged networks 13 and 14 to form a single network, Network 23 

(Minneapolis). A network’s total percentage may not equal 100 because of rounding. 

0 20 40 60 80 100

19 (Denver)

20 (Portland)

9 (Nashville)

23 (Minneapolis)

15 (Kansas City)

16 (Jackson)

1 (Boston)

12 (Chicago)

11 (Ann Arbor)

22 (Long Beach)

7 (Atlanta)

18 (Phoenix)

17 (Dallas)

8 (Bay Pines)

10 (Cincinnati)

3 (Bronx)

21 (San Francisco)

5 (Baltimore)

2 (Albany)

4 (Pittsburgh)

6 (Durham)

65

85

82

85

85

88

74

79

53

81

74

73

59

61

78

75

47

53

82

59

74

19

7

16

12

6

6

18

5

23

9

16

17

31

29

9

11

28

19

5

3 23

30

16

8

2

3

9

6

8

16

24

9

10

10

10

10

14

14

26

28

13

11

VA nursing homes

State veterans’ nursing homes

Community nursing homes

Source: GAO analysis of VA data.

Percentage

Network
Page 10 GAO-05-65 VA Nursing Home Program 

A comparison of how networks’ percentage of expenditures on each 

nursing home setting changed in fiscal year 2003 as compared to fiscal 

year 1998 showed that networks’ changes were consistent with the VAwide changes.14 In fiscal year 2003, the percentage of expenditures for VA 

nursing homes increased in 15 of the 21 health care networks as compared 

to fiscal year 1998. Similar to the overall trend, the percentage of 

expenditures for state veterans’ nursing homes increased in 17 of 21 

networks, whereas the percentage of expenditures for community nursing 

homes decreased in 17 of 21 networks. The largest shift in the percentage 

of expenditures for the three settings occurred in Network 19 (Denver). In 

this network, the percentage of expenditures for VA nursing homes 

declined from 75 to 47 percent because of a nursing home closure during 

this period. For more detailed information on the percent change in 

nursing home expenditures for each setting and network in fiscal years 

1998 and 2003, see appendix II. 

State veterans’ nursing homes accounted for half of VA’s overall nursing 

home workload—measured by average daily census—in fiscal year 2003, 

even though they accounted for only 15 percent of expenditures. In large 

part this is because VA pays a per-diem rate for care in state veterans’ 

nursing homes that, on average, accounts for about one-third of the cost to 

provide veterans nursing home care in this setting. The remaining 

payments made to state veterans’ nursing homes come from a number of 

other sources including Medicaid, Medicare, private health insurance, and 

patients self-financing their care. VA nursing homes provided the next 

largest percentage of nursing home workload, 37 percent in fiscal year 

2003. Community nursing homes provided 13 percent of overall nursing 

home workload. Overall, VA provided or paid for 33,214 patients to receive 

nursing home care daily in VA nursing homes, community nursing homes, 

and state veterans’ nursing homes in fiscal year 2003. 

Since fiscal year 1998, VA has increased its use of state veterans’ nursing 

homes and decreased the use of VA nursing homes and community 

nursing homes. Overall, workload in VA’s nursing home program was 

33,214 in fiscal year 2003, about 1 percent below its fiscal year 1998 

workload. The percentage of nursing home workload provided in state 

 14For the purposes of our analysis we treated networks 13 and 14 as one network in fiscal 

year 1998 to compare with Network 23 (Minneapolis) in 2003, which now includes the 

regions previously served by networks 13 and 14. 

State Veterans’ 

Nursing Homes 

Provided Half of VA’s 

Overall Nursing Home 

Workload, but 

Networks’ Use of 

Nursing Home Care 

Setting Varied 
Page 11 GAO-05-65 VA Nursing Home Program 

veterans’ nursing homes increased from 43 to 50 percent. In contrast, the 

percentage of workload provided in VA nursing homes and community 

nursing homes declined. (See fig. 3.) 

Figure 3: Percentage of VA Nursing Home Workload by Setting, Fiscal Years 1998 

and 2003 

Note: The workload measure is average daily census, which represents the total number of days of 

nursing home care provided in a year divided by the number of days in the year. 

The increase in the percentage of nursing home workload provided in 

state veterans’ nursing homes resulted from a number of factors. States, 

with the assistance of construction grants from VA, built 17 new state 

veterans’ nursing homes, increasing the number of beds available during 

this period. The increasing percentage of state veterans’ nursing home 

workload also occurred as a result of declines in workload in VA nursing 

homes and community nursing homes due to changes in VA’s use of these 

settings. In VA nursing homes, VA officials attributed some of the 

decreases in nursing home workload to an increased emphasis on 

postacute patients with short lengths of stay. Moreover, VA officials told 

us that they are providing contract community nursing home care to fewer 

veterans and paying for shorter contracts than in the past. The number of 

patients VA served in this setting declined from 28,893 to 14,032 during this 

period.15 Network officials also told us that contracts for community 

nursing home care are often now 30 days or less and are used primarily to 

 15These patient numbers are based on discharges and a single patient may be admitted 

more than once in the same fiscal year. 

1998 Nursing home workload: total 33,630 2003 Nursing home workload: total 33,214

40%

17%

 43% 50%

13%

VA nursing 37%

homes

State veterans’

nursing homes

Community

nursing homes

VA nursing 

homes

State veterans’

nursing homes

Community

nursing homes

Source: GAO analysis of VA data.
Page 12 GAO-05-65 VA Nursing Home Program 

transition veterans to nursing home care, which is paid for by other payers 

such as Medicaid. 

Although state veterans’ nursing homes predominate overall, networks 

vary widely in the percentage of workload met in different nursing home 

settings. For example, networks varied in their use of state veterans’ 

nursing homes ranging from a low of 22 percent in Network 8 (Bay Pines) 

to a high of 71 percent in Network 15 (Kansas City). (See fig. 4.) This 

variation is due, in part, to the available bed capacity of state veterans’ 

nursing homes in these networks. In 2003, Network 15 (Kansas City) had 

1,509 state veterans’ nursing home beds compared to 420 beds in Network 

8 (Bay Pines). However, wide network variation also existed in the 

percentage of networks’ workloads accounted for by VA nursing homes 

and community nursing homes. 
Page 13 GAO-05-65 VA Nursing Home Program 

Figure 4: Percentage of Nursing Home Workload by Setting and Network, Fiscal 

Year 2003 

Note: In January 2002 VA merged networks 13 and 14 to form a single network, Network 23 

(Minneapolis). A network’s total percentage may not equal 100 because of rounding. 

0 20 40 60 80 100

8 (Bay Pines)

22 (Long Beach)

6 (Durham)

5 (Baltimore)

21 (San Francisco)

17 (Dallas)

2 (Albany)

10 (Cincinnati)

18 (Phoenix)

4 (Pittsburgh)

11 (Ann Arbor)

20 (Portland)

12 (Chicago)

7 (Atlanta)

9 (Nashville)

1 (Boston)

19 (Denver)

3 (Bronx)

16 (Jackson)

23 (Minneapolis)

15 (Kansas City)

Network

Percentage

State veterans’ nursing homes

VA nursing homes

Community nursing homes

Source: GAO analysis of VA data.

22

71 19 10

69 23 8

66 25 9

60 38 2

59 22 19

57 29 14

56 26 17

56 36 8

55 33 13

53 22 25

50 39 11

46 48 5

41 40 19

37 52 11

35 55 11

30 49 21

28 56 16

27 64 9

27 64 9

25 39 36

 57 22
Page 14 GAO-05-65 VA Nursing Home Program 

Changes in networks’ delivery of nursing home care among the three 

nursing home settings were consistent with VA-wide changes between 

fiscal year 1998 and 2003. The percentage of workload provided in state 

veterans’ nursing homes increased in 19 of VA’s 21 health care networks. 

Similar to the overall trend, the percentage of workload met in community 

nursing homes declined in 17 networks and declined in 13 networks for VA 

nursing homes. The largest shift in the percentage of workload for the 

three settings occurred in Network 17 (Dallas). In this network, the 

percentage of workload for state veterans’ nursing homes increased from 0 

to 30 percent because Texas opened up four state veterans’ nursing homes 

during this period. For more detailed information on the percent change in 

nursing home workload for each setting and network in fiscal years 1998 

and 2003, see appendix III. 

About one-third of the care VA provided in VA nursing homes was long 

stay in fiscal year 2003. The use of long-stay nursing home care (90 days or 

more) includes services needed when a person has a physical or mental 

disability that cannot be cared for at home. For example, veterans needing 

long-stay care may have difficulty performing some activities of daily living 

without assistance, such as bathing, dressing, toileting, eating, and moving 

from one location to another. They may have mental impairments, such as 

Alzheimer’s disease or dementia, that necessitate supervision to avoid 

harm to themselves or others or require assistance with tasks such as 

taking medications. The remainder, or two-thirds of VA nursing home care, 

was short-stay care (less than 90 days) in this setting. VA’s use of shortstay care includes nursing home services such as postacute care required 

for recuperation from a stroke or hip replacement. VA officials also told us 

that this care could include a number of other services such as the delivery 

of complex medical services such as chemotherapy, the treatment of 

wounds such as pressure ulcers, and end-of-life care. VA’s use of shortstay care is similar to services provided by Medicare, which provides 

short-term coverage, whereas VA’s use of long-stay care is similar to 

services provided by Medicaid, which provides long-term coverage for 

nursing home care.16

Since fiscal year 1998, VA has decreased its use of long-stay care and 

increased its use of short-stay nursing home care. Specifically, the 

 16Medicare covers skilled nursing facility stays for up to 100 days (per spell of illness), 

whereas Medicaid has no length-of-stay limits. 

About One-Third of 

VA Nursing Home 

Care Is Long Stay, but 

VA Lacks Comparable 

Information for Other 

Nursing Home 

Settings 
Page 15 GAO-05-65 VA Nursing Home Program 

percentage of nursing home care that was long stay has declined from 43 

to 34 percent between fiscal years 1998 and 2003. (See fig. 5.) In contrast, 

the percentage of short stays provided in this setting increased from 57 to 

66 percent during the same period. This shift in the amount of short-stay 

care is consistent with VA’s policy on nursing home eligibility that sets a 

higher priority on serving veterans who require short-stay postacute care. 

Figure 5: Percentage of Long- and Short-Stay Care in VA Nursing Homes, Fiscal 

Years 1998 and 2003 

Note: Nursing home stays are episodes of care where veterans receive nursing home services in a 

VA nursing home. Nursing home stays do not reflect the total number of individual veterans treated in 

a VA nursing home because some veterans had multiple nursing home stays in a given fiscal year. 

Networks vary widely, however, in the percentage of VA nursing home 

care that is long stay. The percentage of long stays in VA nursing homes 

ranged from a low of 17 percent in Network 20 (Portland) to a high of 

55 percent in Network 7 (Atlanta). (See fig. 6.) Network 20 (Portland) 

officials told us that the focus of their VA nursing homes has changed from 

long-stay care to short-stay transitional and rehabilitative care and as a 

result they are serving more veterans with shorter lengths of stay. By 

contrast, Network 7 (Atlanta) officials told us that several of their nursing 

homes provide services that are consistent with long-stay nursing home 

care such as providing assistance to veterans who have difficulty 

performing some activities of daily living such as the inability to 

independently eat. 

1998 Nursing home stays: 47,074 2003 Nursing home stays: 53,075

57% 43% 66% 34%

Source: GAO analysis of VA data.

Short stay (less than 90 days)

Long stay (90 days or more)
Page 16 GAO-05-65 VA Nursing Home Program 

Figure 6: Percentage of Long- and Short-Stay Care in VA Nursing Homes by 

Network, Fiscal Year 2003 

Note: In January 2002 VA merged networks 13 and 14 to form a single network, Network 23 

(Minneapolis). 

0 20 40 60 80 100

7 (Atlanta)

3 (Bronx)

16 (Jackson)

19 (Denver)

6 (Durham)

11 (Ann Arbor)

9 (Nashville)

1 (Boston)

17 (Dallas)

4 (Pittsburgh)

12 (Chicago)

8 (Bay Pines)

2 (Albany)

10 (Cincinnati)

5 (Baltimore)

22 (Long Beach)

21 (San Francisco)

23 (Minneapolis)

18 (Phoenix)

15 (Kansas City)

20 (Portland)

61

66

46

63

67

56

45

65

61

67

58

64

79

54

62

79

56

83

76

73

39

34

54

37

33

44

55

35

39

33

42

36

21

46

38

21

44

17

24

76 24

27

Short stay (less than 90 days)

Long stay (90 days or more)

Percentage

Source: GAO analysis of VA data.

Network
Page 17 GAO-05-65 VA Nursing Home Program 

VA lacks information on the amount of long- and short-stay nursing home 

care veterans receive in community and state veterans’ nursing homes 

preventing it from strategically planning how best to use these nursing 

home settings at the national and network levels to enhance access to 

nursing home services. VA officials told us that while some of these data 

may be available at certain facilities because the facilities collect them for 

their own purposes, VA does not require state veterans’ nursing homes and 

community nursing homes to provide billing or other information that 

identifies individual veterans on which length of stay could be calculated. 

VA collects information on the payments made to community nursing 

homes and state veterans’ nursing homes, but does not collect the days of 

care a veteran receives or other individual information. VA officials told us 

that they receive and pay individual claims for some veterans in 

community nursing homes, but that in other cases VA pays for care 

provided by community nursing homes based on invoices, which 

aggregate information on the number of patients being treated by a 

nursing home. 

VA officials told us that they are in the initial planning stages of 

redesigning a payment system to collect information by individual veteran 

in community nursing homes, but that the implementation of such a 

system could take several years. Once completed, VA officials expect the 

new system to collect and report data on the total number of days 

individual veterans receive in community nursing homes. VA does not 

currently have plans to collect such data for state veterans’ nursing homes, 

but is exploring doing so. 
Page 18 GAO-05-65 VA Nursing Home Program 

In fiscal year 2003, about 26 percent of veterans who received care in VA 

nursing homes are required to be served by the Millennium Act or VA’s 

policy on nursing home eligibility. Of these veterans, about 21 percent are 

being treated under the Millennium Act because they have a serviceconnected disability rating of 70 percent or greater. The act also required 

that VA continue to treat veterans who had been receiving nursing home 

care in VA facilities at the time the law was enacted about 4 percent of 

the veterans receiving care in fiscal year 2003 fell into this category.17

Further, 1 percent of veterans in VA nursing homes are required to be 

served based solely on VA’s policy on nursing home eligibility that 

extended required coverage to veterans with a 60 percent serviceconnected disability rating who also met other criteria. 

However, the vast majority of veterans—about 74 percent in fiscal year 

2003—received VA nursing home care as a discretionary benefit based on 

available budgetary resources. VA’s policy on nursing home eligibility 

directs that for these veterans VA nursing homes admit, as a priority, 

patients who meet certain clinical and programmatic criteria: patients 

requiring nursing home care after a hospital episode, patients who VA 

determines cannot be adequately cared for in community nursing homes 

or home- and community-based care, and those patients who can be cared 

for more efficiently in VA nursing homes. 

The percentage of veterans receiving VA nursing home care as required by 

the Millennium Act or VA’s policy on nursing home eligibility varied widely 

across networks in fiscal year 2003. The percentage of veterans receiving 

this care ranged from a low of 20 percent in Network 15 (Kansas City) and 

Network 11 (Ann Arbor) to a high of 39 percent in Network 1 (Boston). 

(See fig. 7.) However, most networks were grouped closer to the lower 

range. Fifteen of VA’s 21 health care networks had percentages of 

26 percent or less. According to VA officials, the percentage of veterans 

that are required to be treated may be lower in some networks because 

networks may choose to pay for these veterans to receive care in 

community nursing homes. In contrast, some networks may prefer to treat 

these patients in VA nursing homes. For example, officials from Network 3 

(Bronx), a network with the second highest percentage at 37 percent, told 

us that they prefer to treat these types of veterans in VA nursing homes 

because they have sufficient bed capacity. 

 17This category excludes veterans who were also eligible for nursing home care based on 

their service-connected rating and other statuses. 

About One-Fourth of 

Veterans Who 

Received Care in VA 

Nursing Homes Are 

Required to Be Served 

by the Millennium Act 

or VA Policy, but VA 

Lacks Comparable 

Information for Other 

Settings 
Page 19 GAO-05-65 VA Nursing Home Program 

Figure 7: Percentage of Veterans Receiving VA Nursing Home Care as Required 

by Millennium Act or VA’s Policy on Nursing Home Eligibility by Network, Fiscal 

Year 2003 

Note: In January 2002 VA merged networks 13 and 14 to form a single network, Network 23 

(Minneapolis). 

0 20 40 60 80 100

1 (Boston)

3 (Bronx)

19 (Denver)

6 (Durham)

7 (Atlanta)

8 (Bay Pines)

4 (Pittsburgh)

16 (Jackson)

17 (Dallas)

22 (Long Beach)

12 (Chicago)

21 (San Francisco)

20 (Portland)

18 (Phoenix)

23 (Minneapolis)

2 (Albany)

9 (Nashville)

10 (Cincinnati)

5 (Baltimore)

11 (Ann Arbor)

15 (Kansas City)

Not required by Millennium Act or VA policy

Required by Millennium Act or VA policy

Percentage

Source: GAO analysis of VA data.

Network

80 20

80 20

79 21

78 

78 

22

22

78 22

78 22

78 22

76 24

76 24

75 25

74 26

74 26

74 26

74 26

72 28

69 31

66 34

66 34

61 39

63 37
Page 20 GAO-05-65 VA Nursing Home Program 

VA lacks comparable information for community nursing homes or state 

veterans’ nursing homes on the percentage of veterans that are required to 

be served based on the Millennium Act or VA’s policy on nursing home 

eligibility even though these settings combined accounted for 63 percent 

of VA’s overall nursing home workload. The lack of such data prevents VA 

from strategically planning how best to use these nursing home settings at 

the national and network levels to enhance access to nursing home 

services. VA officials told us that while some of these data on eligibility 

status may be available at certain facilities because the facilities collect 

them for their own purposes, VA does not require that this information be 

collected and reported to headquarters. VA does not collect information by 

individual on all payments made to community nursing homes and state 

veterans’ nursing homes. As a result, VA cannot match individual veterans’ 

data from their payment system with data it currently collects on eligibility 

to determine the eligibility status of all veterans receiving contract care in 

community nursing homes and state veterans’ nursing homes. VA officials 

told us this type of analysis could be done if a new information system for 

collecting contract payments is designed and implemented to collect and 

report such information. 

Gaps in nursing home data impede VA’s ability to monitor and strategically 

plan for the nursing home care VA pays for nationally and at the network 

level. The workload in state veterans’ nursing homes and community 

nursing homes has grown to 63 percent of VA’s overall nursing home 

workload. However, VA does not have data on length of stay and the 

eligibility status of veterans receiving care in these settings as it has for VA 

nursing homes. As a result, VA cannot strategically plan how best to serve 

veterans it is required to serve, including those who have a 70 percent or 

greater service-connected disability rating, or other veterans receiving 

care on a discretionary basis; nor can VA strategically plan how best to use 

the nursing home settings to provide long- and short-stay nursing home 

care nationally or in individual networks. Equally important, the lack of 

such data and assessments hampers congressional oversight of strategic 

options available to VA in its nursing home care planning and its progress 

in meeting veterans’ needs. 

Conclusions 
Page 21 GAO-05-65 VA Nursing Home Program 

To help ensure that VA can provide adequate program monitoring and 

planning for nursing home care and to improve the completeness of data 

needed for congressional oversight, we recommend that the Secretary of 

Veterans Affairs direct the Under Secretary for Health to take two actions: 

• For community nursing homes and state veterans’ nursing homes, collect 

and report data on the number of veterans who have long and short stays, 

comparable to data VA currently collects on VA nursing homes. 

• For community nursing homes and state veterans’ nursing homes, collect 

and report data on the number of veterans in these homes that VA is 

required to serve based on the requirements of the Millennium Act or VA’s 

policy on nursing home eligibility, comparable to data VA currently 

collects on VA nursing homes. 

We provided a draft of this report to VA for comment. In commenting on 

the draft, VA stated that it concurred in principle with our 

recommendations. VA stated that it will continue its efforts to reduce data 

gaps in the community nursing home and state veterans home programs, 

but VA did not indicate specific plans to collect data on length of stay and 

eligibility for its long-term care planning process. Moreover, VA stated that 

data other than eligibility and length of stay, such as age and disability, are 

most crucial for its long-term care strategic planning and program 

oversight. We disagree with VA’s position that eligibility and length-of-stay 

data are not considered most crucial and are concerned about VA’s lack of 

specificity regarding its intent to utilize these data. While factors such as 

age and disability are generally recognized as important in projecting need 

for nursing home care, VA needs data on veterans’ eligibility status and 

length of stay to determine what portion of the overall veteran need for 

nursing home care VA will meet nationally and in individual communities. 

Because VA is required to serve veterans that meet the requirements of the 

Millennium Act or VA policy, VA needs to project the number of these 

veterans seeking nursing home care from VA and determine the number of 

other veterans it will also serve on a discretionary basis after meeting this 

need. To strategically plan and provide the type of service needed in the 

future, VA must also project what proportion of veterans with different 

eligibility statuses will need short-stay or long-stay nursing home care. VA 

needs to use this information to determine if the nursing home care it 

currently pays for in VA nursing homes, contract community nursing 

homes, and state veterans’ nursing homes is appropriately located and 

provides the type of nursing home care needed by veterans. 

Recommendations for 

Executive Action 

Agency Comments 

and Our Evaluation 
Page 22 GAO-05-65 VA Nursing Home Program 

VA also noted that it is narrowing information gaps on both veterans’ 

eligibility status and length of stay for veterans in its community and state 

veterans’ nursing home programs by using data extracted from various 

sources to estimate these numbers. However, VA did not provide these 

data for our review. Given that the combined workload in these settings 

accounted for 63 percent of VA’s overall nursing home workload in fiscal 

year 2003, we believe that complete information on veterans’ eligibility 

status and length of stay for veterans in these settings is crucial for both 

strategic planning and program oversight. 

VA noted that one of our statements—that about one-fourth of veterans 

receiving nursing home care are entitled to such care under the 

requirements of the Millennium Act—could be misinterpreted to imply 

that some of these “mandatory” veterans are being displaced by veterans 

receiving discretionary care. We did not imply this relationship, nor did 

our work examine this particular issue. 

We are sending copies of this report to the Secretary of Veterans Affairs 

and appropriate congressional committees. The report is available at no 

charge on GAO’s Web site at http://www.gao.gov. We will also make copies 

available to others on request. 

If you or your staff have any questions about this report, please call me at 

(202) 512-7101. Another contact and key contributors are listed in 

appendix V. 

Sincerely yours, 

Cynthia A. Bascetta 

Director, Health Care—Veterans’ 

 Health and Benefits Issues 
Appendix I: Objectives, Scope, and 

Methodology 

Page 23 GAO-05-65 VA Nursing Home Program 

We reviewed the Department of Veterans Affairs’ (VA) nursing home 

program for fiscal year 2003 for VA nursing homes, community nursing 

homes, and state veterans’ nursing homes to determine (1) VA spending to 

provide or pay for nursing home care, (2) VA workload provided or paid 

for, (3) the percentage of nursing home care that is long and short stay, 

and (4) the percentage of veterans receiving care that are required to be 

served by the Millennium Act or VA policy. To place this information in 

context, you asked us to supplement our findings with information for 

fiscal year 1998. 

To address the first two objectives, we obtained data on nursing home 

workload and expenditures at the network level for fiscal years 1998 and 

2003 from several VA headquarters offices. VA’s Geriatrics and Extended 

Care Strategic Healthcare Group provided us workload data for VA 

nursing homes and community nursing homes, as reported in VA’s 

Automated Management Information System. This group also gave us 

workload data from monthly reports completed by state veterans’ nursing 

homes that were maintained at the VA medical centers. These data are 

used by the Geriatrics and Extended Care office to provide per diem 

grants to state veterans’ homes. The Office of the Chief Financial Officer 

for the Veterans Health Administration (VHA) provided us expenditure 

data from VA’s Cost Distribution Report for the nursing home care 

provided or paid for by VA. 

To do our analysis, we used average daily census as a measure of 

workload. Average daily census is the total number of days of nursing 

home care provided in a year divided by the number of days in the year. 

For VA nursing home expenditures, we included the direct costs used to 

provide nursing home care plus other facility costs associated with 

operating the nursing home. VA nursing home expenditures excluded 

depreciation as well as VA headquarters and network administrative costs. 

To calculate community nursing home expenditures, we included all 

contract payments made to community nursing homes plus additional 

facility expenditures required to directly support the program at the local 

VA medical center. To calculate state veterans’ home expenditures, we 

included per diem payments made to state veterans’ nursing homes plus 

additional facility expenditures required to directly support the program at 

local VA medical centers. Expenditures for state veterans’ homes did not 

include construction grants. 

To determine the percentage of long and short stays in VA nursing homes 

in fiscal years 1998 and 2003, we obtained data on length of stay from 

VHA’s Extended Care Patient Treatment Files. The Patient Treatment Files 

Appendix I: Objectives, Scope, and 

Methodology 
Appendix I: Objectives, Scope, and 

Methodology 

Page 24 GAO-05-65 VA Nursing Home Program 

include nursing home discharges for veterans who were discharged from a 

VA nursing home during a fiscal year, and current resident files for 

veterans who were not discharged by the end of a fiscal year. Using length 

of nursing home stay, we classified stays of 90 days or more as long stays 

and stays of less than 90 days as short stays. Length of stay is calculated as 

the number of days in a nursing home between the admission and 

discharge days and was given a minimum value of 1. The number of days 

absent from the nursing home, such as for a hospital stay, was subtracted 

from the length of stay. Because current residents were not discharged 

within the fiscal year, we calculated their lengths of stay by looking ahead 

into the next fiscal year. That is, we matched current residents with 

discharges in the next fiscal year to determine whether their stays were 

short or long. A current resident who was admitted on the last day of the 

fiscal year, for example, but was discharged after 90 days into the next 

fiscal year, was classified as having a long stay. If the same resident was 

discharged within 90 days of the next fiscal year, then the stay was 

classified as short. We classified nursing home stays as long for current 

residents who were not discharged in the next fiscal year. Our analysis for 

long- and short-stay care was based on nursing home stays rather than 

individual veterans because some veterans had multiple nursing home 

stays. 

To determine the percentage of veterans in VA nursing homes receiving 

care that are required to be served by the Millennium Act or VA policy, we 

obtained individual data on eligibility for veterans enrolled in VA’s health 

care system. VHA’s Office of Policy and Planning provided us these data in 

an enrollment file for fiscal year 2003. We merged these data with the 

discharge and current resident files from VHA’s Extended Care Patient 

Treatment Files in order to calculate the percentage of veterans receiving 

nursing home care that are required to be served in fiscal year 2003. Our 

analyses on eligibility are based on individual veterans rather than nursing 

home stays; because some veterans had multiple nursing home stays in a 

given year, we retained veterans’ first nursing home stay and eliminated 

other stays in that year. We used a variable from VA’s enrollment file that 

measures service-connected disability rating. In addition, we used 

variables from the file that measure whether the veteran is unemployable 

and whether the veteran is considered permanent and total disabled, 

based on disabilities not related to military service. 

We included the following categories of veterans in our calculation to 

determine the percentage of veterans receiving nursing home care 

required to be served by the Millennium Act or VA’s policy on nursing 

home eligibility: (1) veterans who had a service-connected disability rating 
Appendix I: Objectives, Scope, and 

Methodology 

Page 25 GAO-05-65 VA Nursing Home Program 

of 70 percent or more; (2) veterans who were admitted to a VA nursing 

home on or before November 30, 1999; and (3) veterans who had a serviceconnected disability rating of 60 percent and who were also unemployable 

or permanent and total disabled. We did not include in our estimate 

veterans VA is required to serve who need nursing home care because of a 

service-connected disability, but who do not have a service-connected 

disability rating of 70 percent or more. VA did not have data on these 

veterans, but a VA official estimated that this group is very small based on 

conversations with facility staff. 

To supplement our knowledge of the type of nursing home care provided 

in VA networks, we visited two networks and five nursing homes. In 

Network 5 (Baltimore) we visited Washington, D.C.; Martinsburg, West 

Virginia; and Baltimore, Maryland. In Network 23 (Minneapolis) we visited 

St. Cloud, Minnesota; and Minneapolis, Minnesota. We selected these two 

networks because they were in different geographic regions and had 

variation in the types of care offered in their facilities. Within each 

network, we chose one nursing home that provided more long-stay nursing 

home care and another that provided more short-stay care. 

We assessed the reliability of workload and expenditure data in VA’s 

nursing home program, VHA’s enrollment data file, and VHA’s Extended 

Care Patient Treatment Files in several ways. First, we performed tests of 

data elements. For example, we examined the range of values for length of 

stay to determine whether these data were complete and reasonable. 

Second, we reviewed existing information about the data elements. For 

example, we obtained and reviewed information from VHA on data 

elements we used from VHA’s Extended Care Patient Treatment Files. 

Third, we interviewed agency officials knowledgeable about the data in 

our analyses and knowledgeable about VA’s nursing home program. For 

example, we sent network-specific nursing home workload and 

expenditure data provided to us by VA headquarters to each of VA’s 21 

health care networks through electronic mail in December 2003. Network 

officials reported whether these data were accurate and indicated where 

they found discrepancies. Through discussions with VA headquarters and 

network officials we resolved the discrepancies. We determined that the 

data we used in our analyses were sufficiently reliable for the purposes of 

this report. 

We performed our review from January 2003 to November 2004 in 

accordance with generally accepted government auditing standards. 
Appendix II: Changes in Percentage of 

Nursing Home Expenditures by Setting and 

Network, Fiscal Years 1998 and 2003 

Page 26 GAO-05-65 VA Nursing Home Program 

 Fiscal year 1998 percentage of total expenditures in each 

 nursing home setting 

Network 

 Fiscal year 1998 

total expenditures VA nursing homes

Community 

nursing homes 

State veterans’ 

nursing homes

1 (Boston) $109,377,623 53 31 16

2 (Albany) 63,014,011 82 12 6

3 (Bronx) 124,045,443 76 12 12

4 (Pittsburgh) 137,687,784 73 16 11

5 (Baltimore) 40,103,045 70 20 9

6 (Durham) 81,293,363 82 15 3

7 (Atlanta) 79,392,405 60 18 23

8 (Bay Pines) 88,228,833 83 15 2

9 (Nashville) 54,466,227 58 25 16

10 (Cincinnati) 71,896,679 74 18 7

11 (Ann Arbor) 77,163,729 72 12 16

12 (Chicago) 103,315,242 65 18 17

15 (Kansas City) 62,283,391 59 18 23

16 (Jackson) 101,425,232 61 14 25

17 (Dallas) 57,124,099 82 18 0b 

18 (Phoenix) 57,216,391 74 17 9

19 (Denver) 51,508,938 75 9 16

20 (Portland) 60,569,408 59 27 14

21 (San Francisco) 77,213,692 72 21 7

22 (Long Beach) 78,414,772 73 24 3

23 (Minneapolis) 107,175,837 65 8 27

Total $1,682,916,144 70 17 13

Source: GAO analysis of VA data. 

Note: Changes in percentage of expenditures by setting may not equal the difference between fiscal 

years 2003 and 1998 totals because of rounding. 

a

Increase was less than 1 percent. 

b

Network 17 (Dallas) had no state veterans’ nursing homes in fiscal year 1998. 

c

Decrease was less than 1 percent. 

Appendix II: Changes in Percentage of 

Nursing Home Expenditures by Setting and 

Network, Fiscal Years 1998 and 2003 
Appendix II: Changes in Percentage of 

Nursing Home Expenditures by Setting and 

Network, Fiscal Years 1998 and 2003 

Page 27 GAO-05-65 VA Nursing Home Program 

Fiscal year 2003 percentage of total 

expenditures in each nursing home setting 

Change in percentage of expenditures by setting, 

fiscal year 2003 compared to fiscal year 1998 

Fiscal year 2003 

total expenditures 

VA nursing 

homes 

Community 

nursing homes

State veterans’ 

nursing homes

VA nursing 

homes

Community 

nursing homes

State veterans’ 

nursing homes

$136,122,953 65 16 19 12 -15 3

74,077,560 85 8 7 3 -4 1

152,483,201 82 2 16 6 -10 4

180,292,753 85 3 12 11 -12 1

64,659,735 85 9 6 14 -11 -3

110,469,579 88 6 6 6 -9 3

140,447,102 74 8 18 15 -10 -5

157,002,146 79 16 5 -4 a 3

63,764,289 53 24 23 -5 -2 6

97,699,712 81 9 9 7 -9 2

101,393,221 74 10 16 2 -2 a 

138,884,538 73 10 17 8 -8 a 

86,113,975 59 10 31 a -8 8

144,733,884 61 10 29 a -4 4

93,214,744 78 14 9 -4 -5 9

81,963,959 75 14 11 a -3 3

50,110,475 47 26 28 -28 17 12

87,791,970 53 28 19 -6 a 5

116,215,532 82 13 5 10 -8 -1

105,809,650 74 23 3 1 -1 c 

138,156,457 59 11 30 -6 3 3

$2,321,407,435 73 12 15 3 -6 2
Appendix III: Changes in Percentage of 

Nursing Home Workload by Setting and 

Network, Fiscal Years 1998 and 2003 

Page 28 GAO-05-65 VA Nursing Home Program 

 

Fiscal year 1998 percentage of total workload in each 

nursing home setting 

Network 

Fiscal year 1998 

total workload VA nursing homes

Community 

nursing homes 

State veterans’ 

nursing homes

1 (Boston) 2,291 27 20 53

2 (Albany) 910 58 14 28

3 (Bronx) 2,240 44 9 47

4 (Pittsburgh) 2,539 47 16 38

5 (Baltimore) 854 50 20 30

6 (Durham) 1,155 65 20 15

7 (Atlanta) 2,190 33 14 53

8 (Bay Pines) 1,358 69 23 8

9 (Nashville) 1,283 32 21 47

10 (Cincinnati) 1,274 52 20 28

11 (Ann Arbor) 1,670 39 13 49

12 (Chicago) 2,225 30 19 50

15 (Kansas City) 1,402 27 17 55

16 (Jackson) 2,910 26 13 61

17 (Dallas) 885 68 32 0c

18 (Phoenix) 945 47 18 35

19 (Denver) 1,026 38 9 54

20 (Portland) 1,196 29 24 47

21 (San Francisco) 1,269 49 21 30

22 (Long Beach) 1,071 49 36 15

23 (Minneapolis) 2,937 27 5 68

Total 33,630 40 17 43

Source: GAO analysis of VA data. 

Note: Changes in percentage of workload by setting may not equal the difference between fiscal 

years 2003 and 1998 totals because of rounding. Network totals may not add to national totals due to 

rounding. 

a

Decrease was less than 1 percent. 

b

Increase was less than 1 percent. 

c

Network 17 (Dallas) had no state veterans’ nursing homes in fiscal year 1998. 

Appendix III: Changes in Percentage of 

Nursing Home Workload by Setting and 

Network, Fiscal Years 1998 and 2003 
Appendix III: Changes in Percentage of 

Nursing Home Workload by Setting and 

Network, Fiscal Years 1998 and 2003 

Page 29 GAO-05-65 VA Nursing Home Program 

 Fiscal year 2003 percentage of total 

workload in each nursing home setting 

Change in percentage of workload by setting, 

fiscal year 2003 compared to fiscal year 1998 

Fiscal year 2003 

total workload 

VA nursing 

homes 

Community 

nursing homes

State veterans’

nursing homes

VA nursing 

homes 

Community 

nursing homes

State veterans’ 

nursing homes

2,131 29 14 57 2 -7 5

759 55 11 35 -3 -4 7

2,006 38 2 60 -6 -7 13

2,314 48 5 46 2 -11 9

695 64 9 27 13 -11 -3

1,166 64 9 27 a -11 12

2,116 36 8 56 3 -6 2

1,617 57 22 22 -12 -2 14

1,189 26 17 56 -6 -4 9

1,124 52 11 37 b -9 9

1,601 39 11 50 b -2 1

2,030 33 13 55 2 -7 4

1,714 19 10 71 -8 -7 15

2,929 25 9 66 a -4 4

1,259 49 21 30 -19 -11 30

1,028 40 19 41 -7 b 6

995 22 19 59 -15 10 5

1,384 22 25 53 -7 1 6

1,225 56 16 28 7 -5 -2

1,007 39 36 25 -10 a 10

2,926 23 8 69 -3 3 b 

33,214 37 13 50 -3 -4 7
Appendix IV: Comments from the Department 

of Veterans Affairs 

Page 30 GAO-05-65 VA Nursing Home Program 

Appendix IV: Comments from the 

Department of Veterans Affairs 
Appendix IV: Comments from the Department 

of Veterans Affairs 

Page 31 GAO-05-65 VA Nursing Home Program 
Appendix IV: Comments from the Department 

of Veterans Affairs 

Page 32 GAO-05-65 VA Nursing Home Program 
Appendix IV: Comments from the Department 

of Veterans Affairs 

Page 33 GAO-05-65 VA Nursing Home Program 
Appendix V: GAO Contact and Staff 

Acknowledgments 

Page 34 GAO-05-65 VA Nursing Home Program 

James C. Musselwhite, (202) 512-7259 

In addition to the contact named above, Cheryl A. Brand, Pamela A. 

Dooley, and Thomas A. Walke made key contributions to this report. 

Appendix V: GAO Contact and Staff 

Acknowledgments 

GAO Contact 

Acknowledgments 
Related GAO Products 

Page 35 GAO-05-65 VA Nursing Home Program 

VA Long-Term Care: More Accurate Measure of Home-Based Primary 

Care Workload Is Needed. GAO-04-913. Washington, D.C.: September 8, 

2004. 

VA Long-Term Care: Changes in Service Delivery Raise Important 

Questions. GAO-04-425T. Washington, D.C.: January 28, 2004. 

VA Long-Term Care: Veterans’ Access to Noninstitutional Care Is 

Limited by Service Gaps and Facility Restrictions. GAO-03-815T. 

Washington, D.C.: May 22, 2003. 

VA Long-Term Care: Service Gaps and Facility Restrictions Limit 

Veterans’ Access to Noninstitutional Care. GAO-03-487. Washington, D.C.: 

May 9, 2003. 

Department of Veterans Affairs: Key Management Challenges in Health 

and Disability Programs. GAO-03-756T. Washington, D.C.: May 8, 2003. 

VA Long-Term Care: The Availability of Noninstitutional Services Is 

Uneven. GAO-02-652T. Washington, D.C.: April 25, 2002. 

VA Long-Term Care: Implementation of Certain Millennium Act 

Provisions Is Incomplete, and Availability of Noninstitutional Services 

Is Uneven. GAO-02-510R. Washington, D.C.: March 29, 2002. 

VA Long-Term Care: Oversight of Community Nursing Homes Needs 

Strengthening. GAO-01-768. Washington, D.C.: July 27, 2001. 

Related GAO Products 

(290249) 
GAO’s Mission The Government Accountability Office, the audit, evaluation and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and policies; 

and provides analyses, recommendations, and other assistance to help 

Congress make informed oversight, policy, and funding decisions. GAO’s 

commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

Obtaining Copies of 

GAO Reports and 

Testimony

The fastest and easiest way to obtain copies of GAO documents at no cost 

is through GAO’s Web site (www.gao.gov). Each weekday, GAO posts 

newly released reports, testimony, and correspondence on its Web site. To 

have GAO e-mail you a list of newly posted products every afternoon, go to 

www.gao.gov and select “Subscribe to Updates.”

Order by Mail or Phone The first copy of each printed report is free. Additional copies are $2 each. 

A check or money order should be made out to the Superintendent of 

Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 

more copies mailed to a single address are discounted 25 percent. Orders 

should be sent to:

U.S. Government Accountability Office

441 G Street NW, Room LM

Washington, D.C. 20548

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Contact:

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Congressional 

Relations

Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, D.C. 20548

Public Affairs Susan Becker, Acting Manager, BeckerS@gao.gov (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548