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[Senate Report 111-288]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 559
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-288

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A BILL TO EXTEND THE TEMPORARY AUTHORITY FOR THE PERFORMANCE OF MEDICAL 
 DISABILITY EXAMINATIONS BY CONTRACT PHYSICIANS FOR THE DEPARTMENT OF 
                            VETERANS AFFAIRS

                                _______
                                

               September 2, 2010.--Ordered to be printed

  Filed, under authority of the order of the Senate of August 5, 2010

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 3609]

    The Committee on Veterans' Affairs (hereinafter, ``the 
Committee''), to which was referred the bill (S. 3609), to 
extend the temporary authority for the performance of medical 
disability examinations by contract providers for the 
Department of Veterans Affairs (hereinafter, ``VA''), having 
considered the same, reports favorably thereon, and recommends 
that the bill do pass without amendment.

                              Introduction

    On July 19, 2010, Committee Chairman Daniel K. Akaka 
introduced S. 3609, to extend the temporary authority for the 
performance of medical disability examinations by contract 
providers for VA.

                           Committee Meeting

    The Committee met in open session on August 5, 2010, to 
consider, among other legislation, S. 3609. The Committee 
voted, without dissent, to report favorably S. 3609.

                     Summary of S. 3609 as Reported

    S. 3609 as reported (hereinafter, ``the Committee bill'') 
would extend the temporary authority for the performance of 
medical disability examinations by contract providers for VA.

                       Background and Discussion

    In order to determine the type and severity of disabilities 
of veterans filing for VA compensation or pension benefits, VA 
often requires thorough medical disability examinations. 
Because these examinations form the basis of disability 
ratings, their accurate and timely completion is essential. In 
recent years, the demand for medical disability examinations 
has increased beyond the number of requests that the current 
in-house system was designed to accommodate. This rise in 
demand is due to an increase in the complexity of disability 
claims, an increase in the number of disabilities claimed by 
veterans, and changes in eligibility requirements for 
disability benefits.
    Background. In 1996, in Public Law 104-275, the Veterans' 
Benefits Improvements Act of 1996, VA was authorized to carry 
out a pilot program of contract disability examinations through 
ten VA regional offices using amounts available for payment of 
compensation and pensions. During the initial pilot program, 
one contractor performed all contract examinations at the ten 
selected regional offices.
    The pilot was deemed a success, with general satisfaction 
reported from all stakeholders. According to the VA Claims 
Processing Task Force's 2001 report to the Secretary of 
Veterans Affairs: ``The quality of [contract] examinations has 
been reported to exceed a 99 percent adequacy rate, and the 
Task Force found high approval from Regional Office employees. 
Reported medical examination timeliness was within contract 
compliance with positive feedback in customer service 
surveys.''
    Subsequently, in 2003, in Public Law 108-183, the Veterans 
Benefits Act of 2003, VA was given additional, time-limited 
authority to contract for disability examinations using other 
appropriated funds. That initial authority was extended until 
December 31, 2010, by Public Law 110-389, the Veterans' 
Benefits Improvement Act of 2008. VA continues to report high 
demand for compensation and pension examinations and 
satisfaction with the contracted examinations.
    Committee Bill. The Committee bill would extend VA's 
authority, through December 31, 2012, to use appropriated funds 
for the purpose of contracting with non-VA providers to conduct 
disability examinations. The examinations would be conducted 
pursuant to contracts entered into and administered by the 
Under Secretary for Benefits. The Committee notes that the 
authority to contract for disability examinations through the 
ten regional offices, using amounts available for payment of 
compensation and pension, is an ongoing authority with no time 
limitation.

                      Committee Bill Cost Estimate

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate, the Committee, based on 
information supplied by the CBO, estimates that enactment of 
the Committee bill would, relative to current law, increase 
discretionary spending by $58 million over the 2011-2013 
period, assuming appropriation of the necessary amounts. 
Enacting S. 3609 would not affect direct spending or revenues. 
S. 3609 contains no intergovernmental and private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The cost estimate provided by CBO, setting forth a detailed 
breakdown of costs, follows:

                               Congressional Budget Office,
                                   Washington, DC, August 12, 2010.
Hon. Daniel K. Akaka,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 3609, a bill to 
extend the temporary authority for the performance of medical 
disability examinations by contract physicians for the 
Department of Veterans Affairs.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dwayne M. 
Wright.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                          Director.

  Enclosure.

S. 3609--A bill to extend the temporary authority for the performance 
        of medical disability examinations by contract physicians for 
        the Department of Veterans Affairs

    S. 3609 would extend by two years the authority for the 
Department of Veterans Affairs (VA) to use contract physicians 
to perform medical disability examinations. Under current law, 
that authority expires on December 31, 2010. Based on 
information from VA, CBO estimates that, in 2010, VA will use 
the current authority to have about 36,000 exams completed by 
contract physicians at a cost of about $800 per exam. CBO 
further estimates that if the authority is extended for two 
years, VA would use contract physicians to complete about 
72,000 additional examinations.
    In the absence of such authority, VA physicians who would 
otherwise be providing other types of health care to veterans 
will perform the exams, at no additional cost to VA. Thus, CBO 
estimates that implementing S. 3609 would cost $58 million over 
the 2011-2013 period, assuming appropriation of the necessary 
amounts. Enacting S. 3609 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    S. 3609 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Dwayne M. 
Wright. The estimate was approved by Theresa Gullo, Deputy 
Assistant Director for Budget Analysis.

                      Regulatory Impact Statement

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee on Veterans' 
Affairs has made an evaluation of the regulatory impact that 
would be incurred in carrying out the Committee bill. The 
Committee finds that the Committee bill would not entail any 
regulation of individuals or businesses or result in any impact 
on the personal privacy of any individuals and that the 
paperwork resulting from enactment would be minimal.

                 Tabulation of Votes Cast in Committee

    In compliance with paragraph 7(b) of rule XXVI of the 
Standing Rules of the Senate, the following is a tabulation of 
votes cast in person or by proxy by members of the Committee on 
Veterans' Affairs at its August 5, 2010, meeting. On that date, 
the Committee, by voice vote, without objection, ordered to 
report S. 3609, a bill to extend the temporary authority for 
the performance of medical disability examinations by contract 
providers for the Department of Veterans Affairs.

                             Agency Report

    On August 6, 2010, the Secretary of Veterans Affairs 
submitted the views of the Department on S. 3609--a bill to 
extend VA's authority to contract for medical disability 
examinations. Below are excerpts from the Secretary's letter:

                         The Secretary of Veterans Affairs,
                                    Washington, DC, August 6, 2010.
Hon. Daniel K. Akaka,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman: This is in response to your request for 
the views of the Department of Veterans Affairs (VA) on section 
3609, 111th Congress, a bill to extend the temporary authority 
for the performance of medical disability examinations by 
contract physicians for VA. VA supports this bill, which is 
virtually identical to section 104 of VA's legislative proposal 
for Fiscal Year 2011 as provided to Congress on May 26, 2010.
    Section 704(a) of the Veterans Benefits Act of 2003, Public 
Law 108-183, authorizes VA to provide for the conduct of VA 
compensation and pension examinations by persons other than VA 
employees, by using appropriated funds other than mandatory 
funds, appropriated for the payment of compensation and pension 
benefits. In accordance with section 704(b) of that act, VA 
exercises this authority pursuant to contracts with private 
entities. However, under section 704(c), as amended by section 
105 of the Veterans' Benefits Improvement Act of 2008, Public 
Law 110-389, this authority will expire on December 31, 2010.
    This bill would extend to December 31, 2012, VA's authority 
to contract for compensation and pension examinations. 
Extending this authority is essential to VA's objective of 
ensuring the timely adjudication of disability claims and would 
allow the Veterans Health Administration to focus its resources 
on providing needed health care to Veterans. The demand for 
medical disability examinations has increased, largely due to 
an increase in the complexity of disability claims, an increase 
in the number of disabilities for which Veterans claim 
benefits, and changes in eligibility requirements for 
disability benefits. Extending the authority to provide 
examinations to Veterans through non-VA medical providers would 
improve patient care and accelerate benefit delivery.
    We anticipate no benefit costs or savings because this 
flexibility impacts only the timeliness of rating decisions. As 
this provision would only extend VA's current authority to 
effectively utilize supplemental and other discretionary 
appropriated funds as available for examinations, we estimate 
that enactment of this bill would have no significant financial 
impact.
    The Office of Management and Budget has advised that there 
is no objection to the submission of this report from the 
standpoint of the Administration's program.
            Sincerely,
Eric K. Shinseki.

           *       *       *       *       *       *       *

                        Changes in Existing Law

    In compliance with paragraph 12 of Rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman).

                     VETERANS BENEFITS ACT OF 2003

(Public Law 108-183; 38 U.S.C. 5101 note)

           *       *       *       *       *       *       *

TITLE VII. OTHER MATTERS

           *       *       *       *       *       *       *

SEC. 704. TEMPORARY AUTHORITY FOR PERFORMANCE OF MEDICAL DISABILITIES 
                    EXAMINATIONS BY CONTRACT PHYSICIANS.

    (a) * * *
    (b) * * *
    (c) Expiration.--The authority in subsection (a) shall 
expire on [December 31, 2010] December 31, 2012. No examination 
may be carried out under the authority provided in that 
subsection after that date.
    (d) * * *

           *       *       *       *       *       *       *

                                  
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