99–010

Calendar No. 536

107TH CONGRESS REPORT

2nd Session " ! SENATE 107–231

VETERANS LONG-TERM CARE AND MENTAL HEALTH

PROGRAMS ENHANCEMENT ACT OF 2002

AUGUST 1, 2002.—Ordered to be printed

Mr. ROCKEFELLER, from the Committee on Veterans’ Affairs,

submitted the following

REPORT

[To accompany S. 2043]

The Committee on Veterans’ Affairs, to which was referred the

bill S. 2043, to amend title 38, United States Code, to extend by

five years the period for the provision by the Secretary of Veterans

Affairs of noninstitutional extended care services and required

nursing home care, and for other purposes, having considered the

same, reports favorably thereon with an amendment in the nature

of a committee substitute and an amendment to the title, and recommends that the bill, as amended, do pass.

INTRODUCTION

On April 25, 2002, the Committee held a hearing to review factors underlying the lack of action by the Department of Veterans

Affairs (hereinafter, ‘‘VA’’) in implementing the long-term care provisions of the Veterans Millennium Health Care and Benefits Act

of 1999 (Public Law 106–117 (hereinafter, Millennium Act)). Those

testifying at the hearing included: Robert Roswell, MD, Under Secretary for Health, VA; Marsha E. Goodwin, RN, MSN, Acting Chief

Consultant, Geriatrics and Extended Care, and Director, Geriatrics

Program, VA; Cynthia A. Bascetta, Director, Health Care, Veterans’ Health and Benefits Issues, United States General Accounting Office (hereinafter, ‘‘GAO’’); Jim Musselwhite, Assistant Director, Health Care, GAO; Gladys Dickerson, RN, Home Based Primary Care Coordinator, Dallas VA Medical Center; Paula

Hemmings, RN, Geriatrics and Extended Care Line Manager, Vet-
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erans Integrated Service Network #2, representing the Alzheimer’s

Association; Thomas McClure, LCSW, Coordinator, VA Medical

Foster Home Program, Little Rock VA Medical Center; and Jennifer Moye, PhD, Director, Geriatric Mental Health Clinic/UPBEAT, Brockton VA Medical Center, and Associate Professor of

Psychology, Department of Psychiatry, Harvard Medical School.

Prior to this hearing, on March 21, 2002, Committee Chairman

John D. Rockefeller IV introduced S. 2043, which would extend by

five years the period for the provision by VA of noninstitutional extended care services and required nursing home care.

On September 6, 2001, Chairman Rockefeller introduced S. 1408,

with Committee Members Daniel Akaka, Paul Wellstone, Ben Nelson, and Zell Miller joining later as cosponsors. S. 1408 would

standardize the income threshold for copayments for outpatient

medications with the income threshold currently used to determine

a veteran’s inability to defray necessary expenses of care.

On October 25, 2001, Chairman Rockefeller introduced S. 1576,

which would extend for ten years the special eligibility for health

care provided to veterans who served in Southwest Asia during the

Persian Gulf War.

On March 21, 2002, Chairman Rockefeller introduced S. 2044,

which would expand and improve programs for the provision of

specialized mental health services to veterans.

On April 18, 2002, Chairman Rockefeller introduced S. 2205,

which would provide VA with permanent authority to offer veterans counseling and treatment for sexual trauma suffered during

active duty in service.

On April 23, 2002, Chairman Rockefeller introduced S. 2227,

with Senator Max Cleland joining later as a cosponsor. S. 2227

would clarify the effective date of the modification of treatment for

retirement annuity purposes of part-time service before April 7,

1986, of certain VA health-care professionals.

On April 30, 2002, Chairman Rockefeller introduced S. 2228,

which would authorize VA to operate up to 15 centers for mental

illness research, education, and clinical activities.

On May 2, 2002, the Committee held a hearing to receive testimony on the aforementioned bills, and on other measures. Those

testifying at the hearing included: Tim McClain, General Counsel,

VA; Frances M. Murphy, MD, Deputy Under Secretary for Health,

Veterans Health Administration, VA; Robert Epley, Associate Deputy Under Secretary for Policy and Program Management, Veterans Benefits Administration, VA; John Thompson, Deputy General Counsel, VA; Claude Kicklighter, Assistant Secretary for Policy and Planning/Acting Director, Office of Operations, Security

and Preparedness, VA; Vincent Barile, Deputy Under Secretary for

Management, National Cemetery Administration, VA; James

Fischl, Director, National Veterans Affairs and Rehabilitation Commission, The American Legion; Joseph A. Violante, National Legislative Director, Disabled American Veterans; David Tucker, Associate Legislative Director, Paralyzed Veterans of America; and Dennis Cullinan, Director, National Legislative Service, Veterans of

Foreign Wars.
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COMMITTEE MEETING

On June 6, 2002, the Committee met in open session to consider,

among other matters, S. 2043 with an amendment in the nature

of a substitute incorporating provisions from Section 2 of S. 1408,

S. 1576, S. 2044, Section 2 of S. 2205, S. 2227, and S. 2228, and

amendments offered by Senator Frank H. Murkowski regarding a

State Home grant of $16 million to the State of Alaska for the Pioneers’ Homes, and by Senator Patty Murray requiring VA to establish two medical outreach programs in the State of Washington.

Present were Chairman Rockefeller, Ranking Member Arlen

Specter, and Senators James M. Jeffords, Wellstone, Murray, Miller, Ben Nelson, Strom Thurmond, Murkowski, Tim Hutchinson

and Kay Bailey Hutchison. The Committee voted unanimously to

report favorably S. 2043, as amended, to the Senate.

SUMMARY OF S. 2043 AS REPORTED

S. 2043, as reported (hereinafter, ‘‘Committee bill’’) consists of

three titles, summarized below.

TITLE I—LONG-TERM CARE AND MENTAL HEALTH ENHANCEMENTS

Subtitle A—Long-term Care

Section 101 extends for five years the provision set forth in the

Millennium Act requiring that VA provide non-institutional extended care services and nursing home care services to certain veterans.

Subtitle B—Mental Health Programs

Section 111 increases from $15 million (as specified in Section

116 of Public Law 107–135) to $25 million per year funding set

aside for a program designed to expand and improve services relating to the treatment of post-traumatic stress disorder (PTSD) and

substance use disorders; requires VA to ensure that this funding is

in excess of a baseline amount; clarifies that these funds are to be

provided on an annual basis for a three-year period; and requires

the Secretary to ensure that not less than $10 million be allocated

by direct grants to programs identified by the Mental Health Strategic Health Care Group and the Committee on Care of Severely

Chronically Mentally Ill Veterans, not less than $5 million be allocated for PTSD programs, and not less than $5 million be allocated

for substance use disorder programs.

Section 112 provides permanent authority for counseling and

treatment of sexual trauma. Authority for this program is currently

scheduled to expire on December 31, 2004.

Section 113 authorizes VA to operate up to 15 centers for mental

illness research, education and clinical activities. The current authority provides for up to five such centers.

TITLE II—CONSTRUCTION AUTHORIZATION

Section 201 authorizes the following Administration-requested

construction projects: seismic corrections to Building 2 at the Palo

Alto VAMC in the amount of $14 million; seismic corrections to

Building 4 at the Palo Alto VAMC in the amount of $22 million;
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seismic corrections to the West Los Angeles VAMC in the amount

of $27 million; and seismic corrections to the San Francisco VAMC

in the amount of $31 million. In addition, the Committee bill includes a modification to a prior authorization for a nursing home

project at the Beckley, West Virginia VAMC and extends a prior

authorization for the nursing home project at the Lebanon, Pennsylvania VAMC. Section 211 changes to $9 million the monetary threshold used

for determining when a construction project will be classified as a

major construction project. Section 212 allows VA to make a grant of not more than $16 million to the State of Alaska for the purpose of expanding, remodeling or altering space in six separate Pioneers’ Homes and specifies that following such grant, the space be treated as a single

State home facility for the purposes of subchapter III of chapter 81

of title 38, United States Code.

TITLE III—GENERAL HEALTH CARE MATTERS

Subtitle A—Prescription Copayment Adjustment

Section 311 modifies the income threshold amount for prescription drug copayments by specifying that that income threshold

amount be the same as the income threshold used to determine a

veteran’s qualification for free outpatient and inpatient care.

Subtitle B—Extensions of Authorities

Section 321 provides that the effective date of the amendment

made by Section 132 of Public Law 107–135 shall be January 23,

2002, and requires that the Office of Personnel Management recompute the annuities of each covered health care professional who

retired before January 23, 2002, but after April 7, 1986.

Section 322 extends for ten years the eligibility for health care

services of veterans who served in Southwest Asia during the Persian Gulf War.

Subtitle C—Other Matters

Section 331 provides hourly-rate employees of the Veterans Canteen Service with transfer rights to title 5 positions.

Section 332 requires that VA establish a two-year pilot project on

medical care outreach at two locations in the State of Washington.

BACKGROUND AND DISCUSSION

TITLE I—LONG-TERM CARE AND MENTAL HEALTH ENHANCEMENTS

Long-Term Care Authorities

There is clearly an expanding need for long-term care in our

country, and in VA that demand is even more pressing.

Approximately 37 percent of the veteran population is 65 years

of age or older; the veteran population exceeding age 65 will grow

dramatically in the next few years. In an effort to respond to the

burgeoning need for long-term care services, Congress enacted comprehensive long-term care legislation for veterans in November

1999 as part of the Millennium Act. Section 101 of the Millennium

Act directed that VA provide nursing home care to any veteran
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who is in need of such care for a service-connected condition, or

who is more than 70 percent disabled due to a service-connected

condition. In addition, VA was directed to provide non-institutional

care, such as respite and adult day health care, to all enrolled veterans requiring such services. Within three years of the bill’s enactment, VA was required to evaluate and report to the House and

Senate Committees on Veterans’ Affairs on VA’s experience in providing services under both of these provisions, and to make recommendations on extending or making permanent these provisions.

These programs were given an expiration date of four years from

the date of enactment so that the effects on the VA health care system and its patients could be adequately studied and, if need be,

the programs modified.

A key element of the Millennium Act is a provision that requires

VA to furnish non-institutional long-term care as part of VA’s

standard benefits package. While the Millennium Act was signed

into law at the end of 1999, VA did not issue interim guidance on

new long term care benefits until October 2001—nearly two years

later. This interim guidance, VHA Directive 2001–061, required facilities either to have non-institutional long-term care services

available or to develop a plan for providing such services. In order

to assess whether facilities had made non-institutional services

universally available, Chairman Rockefeller and House Veterans’

Affairs Committee Ranking Member Lane Evans requested that

the GAO inventory non-institutional long-term care programs then

existing within VA.

At the Committee’s hearing on April 25, 2002, GAO witnesses

testified that:

. . . more than two years after enactment, VA has not completed its response to the Millennium Act . . . we have found

that several facilities reported offering at least eight of the

non-institutional long-term care services, but some offered one

non-institutional service or none at all. The results of our survey are similar to the distribution of services noted almost four

years ago by the Advisory Committee on the Future of VA

Long-Term Care.

Veterans Service Organizations shared their concerns at the

Committee’s May 2, 2002, hearing on pending legislation. Dennis

Cullinan testified that, ‘‘[t]he VFW is deeply disappointed that

these services, as provided for [in the Millennium Act] almost three

years ago, have yet to be properly implemented by VA.’’

Following the hearing, on May 17, 2002, VA issued regulations

authorizing non-institutional long-term care services. In addition to

designating non-institutional adult day care, non-institutional geriatric evaluation, and non-institutional respite care as a part of the

medical benefits package, the regulations also established copayments for extended care services.

Since Millennium Act provisions relating to both non-institutional and inpatient long term care services are due to expire next

year, Section 101 of the Committee bill would extend the expiration

dates of both long-term care authorities for an additional five

years, until December 31, 2008.
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1 E. P. Fischer, S. R. Mardner, G. R. Smith, R. R. Owen, L. Rubenstein, S. C. Hedrick, and

G. M. Curran. Quality Enhancement Research Initiative in Mental Health. Medical Care, June

2000; 38(6 Suppl. 1): 170–81. 2Department of Veterans Affairs, Veteran Data and Information. Program Statistics: FY 1999

Annual Accountability Report Statistical Appendix, September 30, 1999. 3 U.S. Department of Health and Human Services. Mental Health: A Report of the Surgeon

General. Rockville, MD: Substance Abuse and Mental Health Services Administration, Center

for Mental Health Services, National Institutes of Health, National Institute of Mental Health,

1999. 4 U.S. Department of Veterans Affairs. Special Committee on Post-Traumatic Stress Disorder.

Report to the Under Secretary for Health, 2002, pp. 6, 7, 11, and 13; and U.S. Department of

Veterans Affairs. Committee on the Care of Veterans with Serious Mental Illness. Report to the

Under Secretary for Health, 2002, pp. 4, 6, and 16.

Mental Health Enhancements

As the Committee has previously sought to improve and expand

the provision of veterans’ long-term care, so too has the Committee

worked to improve mental health services provided by VA. Historically, as many as one-third of veterans seeking care at VA have received mental health treatment, and research suggests that serious

mental illnesses affect at least one-fifth of veterans who use the VA

health care system.1 About 450,000 of the approximately 2.3 million veterans who receive compensation from VA have service-connected psychiatric and neurological disorders.2 These statistics do

not reflect problems that affect veterans alone; in 1999, the Surgeon General of the United States reported that mental disorders

account for more than 15 percent of the overall burden of disease

from all causes—slightly more than all forms of cancer.3 Major depression alone ranked second only to heart disease in impact.

Grants to Improve Specialized Mental Health Programs

From its inception, the VA health care system has been challenged to meet the special needs of veterans, such as spinal cord

injuries, injuries requiring prosthetic devices, blindness, traumatic

brain injury, homelessness, and post-traumatic stress disorders

(PTSD), as well as substance use disorders that frequently accompany these other afflictions. Over the years, VA has developed

widely-commended expertise in providing specialized services to

meet these needs. Unfortunately, these programs have been negatively affected by budget constraints, a shift in focus from inpatient

to outpatient care, and the introduction by VA of a new resource

allocation system. In 1996, Congress recognized that VA efforts to

serve more veterans with a limited budget made these costly specialized services disproportionately vulnerable to reductions, and it

took steps to protect them. The Veterans’ Health Care Eligibility

Reform Act of 1996, Public Law 104–262, required the Secretary of

Veterans Affairs to maintain VA’s capacity to treat specific special

needs of disabled veterans at then-current levels, and to report to

Congress annually on the maintenance of those specialized services.

Subsequently, internal VA advisory committees and the GAO reported that these protections did not go far enough.4 Many specialized programs particularly for substance use disorders and PTSD

were closed, reduced in size, or understaffed, offering little or no

care to veterans suffering from these seriously debilitating disorders which can result from combat experiences. VA’s own annual

capacity reports evidenced that these programs had failed to pro-
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5 U.S. Department of Veterans Affairs. Report to the Committees on Veterans’ Affairs of the

Senate and House of Representatives, as required by Public Law 104–262, 2002, pp. 11–12. 6 U.S. Department of Veterans Affairs. Program Evaluation Resources Center, VA Palo Alto,

California. Millennium Bill Implementation for Substance Abuse Programs as of July 15, 2001. 7 Ibid.

vide services to veterans at the needed levels. They also evidenced

that VA had failed to preserve equal access to such services

throughout the VA system.5

In December 2001, Congress strengthened protection of specialized services through the Department of Veterans Affairs Health

Care Programs Enhancement Act of 2002, Public Law 107–135,

which described the manner in which VA is to maintain capacity.

In addition to protecting VA’s capacity to treat veterans’ special

needs, Public Law 107–135 contained a designated $15 million in

VA funding specifically to assist medical facility efforts to improve

care for veterans with substance use disorders and PTSD. The

funds for these mental health grant programs will soon revert to

a general medical care fund.

In order to distribute these designated funds, VA sought proposals from facilities interested in expanding and improving their

substance use disorder and PTSD treatment programs. VA began

to release these funds at the end of 2001. As of March 2002, eight

of the sixteen PTSD treatment programs awarded funding were

operational, but only one-third of these had hired a full complement of authorized and funded staff.6 Of the substance use disorder programs funded through this act, 18 of 31 have not completed staffing.7

Despite a slow start, funding has resulted in new PTSD and substance use disorder treatment programs being made available to

veterans. More than 100 staff members have been hired in 18 of

VA’s 21 service networks to treat substance use disorders. Nine

new programs in Baltimore, Atlanta, San Francisco, Dayton and

elsewhere have initiated or intensified opioid substitution programs

for veterans who have not responded well to drug-free treatment

regimens. Other new programs, such as those in Tampa, Cincinnati, Columbia, Missouri and Loma Linda, California, put special emphasis on treating veterans with more complex conditions

that include PTSD and substance use disorders. Additional funding

has also enabled VA to develop better outpatient substance use disorder and PTSD treatment programs, outpatient dual-diagnosis

programs, more PTSD community clinical teams, and more residential substance use disorder rehabilitation programs.

Due to these grants, VA has made improvements. However,

many VA medical center directors have been reluctant to hire specialized substance use disorder or PTSD treatment staff when, in

fiscal year 2003, funding for these programs will be subject to a

population-based resource allocation system that would likely cause

funding to disappear. Section 111 ensures that this funding will remain ‘‘protected’’ for three more years. In addition, Section 111

would increase the total amount of funding identified specifically

for treatment of substance use disorders and PTSD from $15 million to $25 million.

Of the $25 million authorized for this program, $15 million would

be allocated to individual medical facilities responding to calls for
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8 A publication published jointly by AMVETS, Disabled American Veterans, Paralyzed Veterans of America and the Veterans of Foreign Wars to present policy positions and make budget

recommendations on programs conducted by the Department of Veterans Affairs.

proposals. The remaining $10 million would be provided as direct

grants to VA treatment facilities, based on veterans’ needs as identified by VA’s Mental Health Strategic Health Care Group and the

Committee on Care of the Severely Chronically Mentally Ill.

Veterans Service Organizations have impressed upon the Committee the need to set aside funding for specialized services, especially for PTSD and substance use disorder programs. Joseph

Violante, National Legislative Director of the Disabled American

Veterans, testified at the Committee hearing on S. 2044. During

his testimony, he noted:

As part of The Independent Budget,8 DAV has urged Congress to improve specialized mental health services, particularly programs for the treatment of post-traumatic stress disorder and substance abuse . . . The treatment and rehabilitation of veterans with mental disorders is among the highest

priorities for the Veterans Health Administration. This bill will

begin to address necessary programmatic expansion and funding needs of these important mental health programs.

Sexual Trauma Counseling

Almost a decade ago, the Committee on Veterans’ Affairs held a

hearing on the needs of the Nation’s growing numbers of women

veterans. Subsequent to that hearing, investigations revealed that

women veterans are eight times more likely to report having experienced sexual assault during service than women civilians of the

same age.

In 1992, Congress authorized VA to provide counseling to women

who had experienced sexual trauma during active service. Two

years later, recognizing that sexual trauma is not limited to

women, Congress expanded VA’s mandate to offer counseling and

treatment to victims of sexual harassment or sexual assault without regard to gender. The Millennium Act broadened VA’s responsibilities toward victims of sexual trauma further, strengthening

outreach efforts and extending the programs through December

2004.

VA has worked—internally and with the Department of Defense—to educate health care professionals about the physical and

emotional legacies of sexual trauma. Those who have endured such

trauma need counseling and appropriate treatment, both during

and following service. While we must hope that sexual violence will

be eliminated from our forces, the programs that VA has established will likely continue to be needed. Section 112 would authorize VA to continue its counseling and treatment programs for veterans who have experienced military sexual trauma beyond 2004.

The Committee on Veterans’ Affairs continues to await a VA report, mandated by the Millennium Act and due in March 2001, on

rates of sexual trauma among National Guard members and Reservists. Upon receipt of that report, the Committee will be better

equipped to decide whether authority for counseling and treatment

services to members of the Armed Forces who might have experi-
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enced sexual trauma while on active duty for training will be needed.

Mental Illness Research, Education, and Clinical Centers

In 1996, Congress authorized VA to establish five centers dedicated to mental illness research, education, and clinical activities.

These Mental Illness Research, Education, and Clinical Centers

(hereinafter, ‘‘MIRECCs’’) integrate basic and clinical research with

a training mission that allows VA to translate new findings into

improved patient care. Research undertaken within these centers

has helped to increase fundamental understanding of mental illnesses, and has given VA care givers more and better tools to treat

patients with mental disorders so they can function more easily

within their communities.

Because they have proved so effective at fostering scientific, clinical, and educational improvements in mental health care, Section

113 authorizes VA to expand the number of MIRECCs from five to

fifteen. VA researchers have already started three more centers—

expanding the number of existing programs to eight—and have

demonstrated their willingness to open more in the near future.

While the Committee bill contains no legislative initiatives to assist the National Center for PTSD, the Committee commends the

Center for its work at the forefront of research and education on

the etiology, diagnosis, and treatment of PTSD and other adverse

consequences of exposure to stress. Its consistent record of accomplishment is one reason VA has emerged as a national and world

leader in this field. National Center programs supporting VA clinicians, benefits personnel, researchers and other officials result in

improved treatment and claims adjudication for veterans. The

Committee believes that the National Center for PTSD is a unique

and valuable resource that deserves continued strong support from

VA.

TITLE II—CONSTRUCTION MATTERS

Subtitle A—Construction Authorization

Sections 201–203. Major Medical Facility Construction

VA may not obligate or expend funds on any ‘‘major medical facility project’’ unless that project has been specifically authorized

by law. A major medical facility project is one that would involve

the construction, alteration, or acquisition of a medical facility involving the total expenditure of more than $4 million.

Section 201 of the Committee bill would authorize the following

major medical facility projects: seismic corrections to Building 2 at

the Palo Alto VAMC in the amount of $14 million; seismic corrections to Building 4 at the Palo Alto VAMC in the amount of $22

million; seismic corrections to the West Los Angeles VAMC in the

amount of $27 million; and seismic corrections to the San Francisco

VAMC in the amount of $31 million.

The Committee bill also increases the amount of the authorization for a previously-authorized project at the Beckley, West Virginia VAMC. It also extends a previously-enacted authorization for

a long-term care project at the Lebanon, Pennsylvania VAMC.
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VA identifies—in accordance with 38 U.S.C. § 8107(d)(1), (2), and

(3)—the major construction projects that have the highest priority

within the Department. Utilizing guidance contained in the Office

of Management and Budget’s Circular A–11, Planning, Budgeting,

and Acquisition of Capital Assets, the VA’s Strategic Management

Council prioritized the major medical construction projects for FY

2003. The top fifteen projects, in order of priority, are:

1. Palo Alto, CA, Building 2, Seismic Corrections

2. Cleveland, OH, Ambulatory Surgery and Clinical Consolidation

3. San Francisco, CA, Building 203, Seismic Corrections

4. Anchorage, AK, VA Health Care System and Regional Office

Construction

5. West Los Angeles, CA, Building 500, Seismic Corrections

6. West Haven, CT, Ward Renovation

7. Long Beach, CA, Building 7, Seismic Corrections

8. Palo Alto, CA, Building 4, Seismic Corrections

9. Tampa, FL, Ambulatory Care Expansion

10. VISN 4 Outpatient Improvements

11. Beckley, WV, Nursing Home Construction

12. Lebanon, PA, Building 2 Renovations

13. San Diego, CA, Building 1, Seismic Corrections

14. Hines, IL, Spinal Cord Injury and Blind Rehabilitation

Construction

15. San Juan, PR, Main Building, Seismic Corrections

While the Committee bill includes authorizations for each project

requested by the Administration in the President’s Fiscal Year

2003 Budget, the Committee is concerned about the methodology

used by VA to rank projects and how that ranking relates to the

Administration’s requests for funding. The four seismic correction

projects requested by the Administration appear on various points

along VA’s priority list, namely, first, third, fifth, and eighth. Funding and authorization for other projects which appear, in some

cases, as higher priority projects is not sought by the Administration. For example, the Cleveland, Ohio ambulatory surgery and

clinical consolidation project appears as the Department’s secondhighest rated project; yet, the project does not appear in the Administration’s budget request. The Committee intends to monitor

the process closely during the next budget cycle and urges the Department to review its construction request methodology.

Subtitle B—Other Matters

Sec. 211. Increase in Threshold for Major Medical Facility

Projects

Section 211 of the Committee bill increases the threshold for

major construction projects from $4 million to $9 million. Currently, VA medical center projects with a minor improvement component of less than $4 million are funded from the Minor Construction appropriation and need not be authorized individually by Congress. However, all such projects are subjected to internal review

and approval by VA’s Strategic Management Council. The application process includes an assessment of needs; a ten-year cost-effectiveness analysis; a study of the impact on Capital Asset Realign-
11

ment for Enhanced Services activities; risk analysis; and alternative analysis of issues such as quality, access, waiting times and

increased benefits. Projects are first screened by the Capital Asset

Board in the Veterans Health Administration. They are then

prioritized and referred by the Under Secretary for Health to the

Department’s Strategic Management Council, chaired by the Department’s Deputy Secretary. Minor improvement projects include

structural changes, space utilization changes, and construction of

new or additional space.

Initially, 38 U.S.C. § 8104 made no distinction between major

and minor construction projects. In 1988, Public Law 100–322 defined major construction projects as those costing more than $2

million and required that those projects be authorized and individually appropriated by Congress. In 1993, Public Law 103–79

changed the threshold for a major project from $2 million to $3 million, and in 1996, Public Law 104–262 increased the threshold to

$4 million. Over a period of 14 years, the threshold has only increased an average of less than $150,000 per year.

The Independent Budget for Fiscal Year 2003 addressed the

issue of minor construction by noting:

. . . the $4 million limit on minor construction projects imposed by Congress continues to be a major problem. Realignment and consolidation and the CARES initiative will call for

extensive construction investments in many facilities in all

VISNs. Accordingly, the current ceiling on minor construction

projects is too low to finance the scope of many of these

projects . . . Network Directors are forced to string together a

series of minor construction projects to make the architectural

changes that are needed to realign facilities to new missions.

Project scheduling is dictated by financing gimmicks rather

than by good design and engineering principles. Facility operations are disrupted and veterans are inconvenienced by

drawn-out construction activities.

An example of the how VA ‘‘works around’’ the current minor

construction limit is the Augusta VAMC’s Spinal Cord Injury (hereinafter, ‘‘SCI’’) unit. VA needed to replace the unit because current

privacy and infrastructure (plumbing, electrical, AC and ventilation) standards were not met. A replacement unit would have cost

approximately $14 million—an amount well above the minor construction limit. Rather than pursuing approval for major construction project funding, facility and VISN management decided to remodel the current SCI unit in two phases using funding for two

minor construction projects (totaling around $7 million). The first

phase, which was a renovation of inpatient areas, was approved

and construction has begun. Another minor construction project

will be requested in fiscal year 2003 to complete the remodeling of

the outpatient areas. By doing the project in two phases, VA will

take 50 percent longer to complete the project. Additional inconvenience to veterans and disruptions during construction will result.
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Sec. 212. State Home Facilities for Furnishing Care to Veterans in the State of Alaska

Section 212, provides VA the authority to grant to the State of

Alaska up to $16 million to improve space in six existing Pioneer

Homes.

Since 1888, the Federal government has provided funding to

States to assist in the care of elderly veterans. 38 U.S.C. § 8135(a)

requires any State desiring assistance with the construction of

State home facilities to submit an application to the Secretary, certifying that the State has funding of not less than 35 percent of the

costs needed with respect to such construction and that such funding will be available by July 1 of the fiscal year in which the application is made.

The State of Alaska is one of three States that currently does not

have a State Veterans Home. However, the State does maintain a

residential housing program, known as Pioneers’ Homes, for elderly

citizens, including veterans and their spouses, in six different locations within the State.

The grant provided under this section would exempt the State

from meeting the 35 percent funding requirement and would treat

the space in the aggregate as a State home facility.

TITLE III—GENERAL HEALTH CARE MATTERS

Subtitle A—Prescription Copayment Adjustment

Sec. 311. Standardization of Income Thresholds for Copayment for Outpatient Medications and for Inability to Defray Necessary Expenses of Care

Under current law, veterans who are eligible for Medicaid, or

those who meet an income threshold established by law, are eligible to receive free health care at VA facilities. Additionally, veterans who are—or would be—eligible for a VA pension receive free

prescription drugs. However, the income threshold for pension eligibility is much lower than that set for Medicaid eligibility or the

means test established by statute for free health care.

The prescription drug copayment was initially established by

Public Law 101–508, the Omnibus Budget Reconciliation Act of

1990. The charge was $2 for each 30-day supply of medication prescribed by a VA physician. Public Law 101–508 also established the

means test for determining the ability to pay copayments for outpatient medical care. The means test considers annual income (setting a threshold at approximately $24,300) and net property worth

(setting a threshold at $80,000). Public Law 101–508 did not, however, include an income threshold for prescription drug copayments. As a consequence, all veterans, except those with a 50 percent or greater service-connected disability, were charged the $2

medication copayment prescribed for drugs to treat nonservice-connected conditions. Later, Public Law 102–568, exempted veterans

whose annual income did not exceed the maximum annual rate of

VA pension (approximately $9,500 today) from paying the prescription drug copayment.

For veterans with financial hardships, VHA Directive 2002–005,

dated January, 2002, provides authority and guidance to field fa-
13

cilities for processing waiver requests for medical care and prescription drug copayment debts.

On February 4, 2002, VA raised the prescription copayment from $2 to $7—a 350 percent increase. This increase has been particularly burdensome for lower-income veterans. To illustrate the new

financial burden imposed on those with low incomes, the Committee considered the case of a veteran who required ten prescriptions and had an income of approximately $10,000 a year. Because

of VA’s increase in the prescription drug copayment, such a veteran

must now allocate 8.4 percent of his or her annual income, rather

than 1.2 percent, on prescription medications.

Robert E. Wallace, Executive Director, Veterans of Foreign Wars,

wrote in a letter to the VA Secretary, Anthony J. Principi:

That scenario will probably result in one of two things for

our category 5 veterans: they will either stop seeking needed

medical care because the increased costs will soon ‘‘price’’ them

out of the system or we will be faced with an inordinate increase in the number of waiver requests . . . the substantial

increase of unintentional patient noncompliance will, in the

long run, invariably result in overall higher medical costs than

what would be recovered by the increased prescription copayment.

On May 2, 2002, the American Legion testified before the Committee about the need to modify the income threshold for prescription drugs.

The American Legion has heard—loud and clear—the negative reactions of veterans to the recent medication copayment

increase. . . . Clearly, the sizable percent of this increase has

presented difficulties for certain veterans, especially those with

low fixed incomes and those who are barely above the threshold for exemption—the pension rate of $9,556—as well as those

veterans who require multiple or maintenance medications.

Veterans also find the complex and arcane rules that govern

eligibility difficult to understand. Standardizing the thresholds,

as proposed, would help to simplify the copayment criteria, but

most importantly, it would assist those least able to afford the

increase in their prescription copayments.

Section 311 of the Committee bill standardizes the income

threshold limitation for prescription copayments with the income

threshold for outpatient medical care. The primary purpose for this

modification is to reduce the financial burden of the VA’s new $7

copayment imposed upon veterans in the lower income levels (between $9,500 and $24,300); however, there are administrative benefits associated with this provision as well.

The number of waivers requested by veterans has increased dramatically, as the Veterans of Foreign Wars predicted. For the first

three months of the increase, $4.7 million more in copayment

charges have been waived than during the same time period last

year. One VA medical center reported that waiver applications had

increased from only 4 in April 2001 to 48 in April 2002. Because

the Committee expects that the number of waivers requested by

veterans will be nearly eliminated by this provision, there would be

a corresponding decrease in the manpower associated with filing,

processing, and reviewing each claim.
14

Subtitle B—Extensions of Authorities

Sec. 321. Retirement Annuities for Part-Time VA Nurses

Section 321 of the Committee bill addresses an issue of fairness

in retirement annuity benefits promised to part-time VA nurses

prior to 1986. In December 2001, Congress enacted the Department

of Veterans Affairs Health Care Programs Enhancement Act of

2001, Public Law 107–135. This legislation gave VA several tools

to respond to the looming nurse crisis. In addition, it altered the

way part-time service performed by certain title 38 employees

would be considered when granting retirement credit.

Previously, the law required that title 38 employees’ part-time

service prior to April 7, 1986, be prorated when calculating retirement annuities, resulting in lower annuities for these employees.

Section 132 of Public Law 107–135 was intended to exempt all previously-retired registered nurses, physician assistants, and expanded-function dental auxiliaries from this limitation. However,

the Office of Personnel Management has interpreted this provision

to apply only to those health care professionals who retire after the

measure’s date of enactment.

Section 321 of the Committee bill would require OPM to recalculate the annuities for these retired health care professionals.

This clarification would not extend retirement benefits retroactively to the date of retirement. It would, however, ensure that

annuities are calculated fairly from now on for eligible employees

who retired between April 7, 1986, and January 23, 2002.

Sec. 322. Eligibility for Persian Gulf War Veterans

Section 322, which is drawn from S. 1576, as introduced by

Chairman Rockefeller, extends eligibility for health care to veterans who served in Southwest Asia during the Persian Gulf War.

Service members returning from the Gulf in 1991 reported a

range of unexplained illnesses that many believed might have resulted from service. Investigations by Congress, the Departments of

Defense and Veterans Affairs, and the Institute of Medicine showed

that the men and women who served in Operation Desert Storm

might have been exposed to many battlefield hazards, including

smoke from oil-well fires, pesticides, organic solvents, the drug

pyridostigmine bromide, numerous vaccinations, and sarin nerve

gas.

Success in determining whether any or all of these hazards

might be linked to specific symptoms has been limited by poor

data, a lack of research into the long-term effects of low-dose exposures, and incomplete military record keeping. In response to concerns about the health of Gulf War veterans, Congress enacted

Public Law 102–585, authorizing health examinations, tasking the

National Academy of Sciences to evaluate scientific evidence regarding potential Gulf War exposures, and establishing the Gulf

War Veterans Health Registry. In addition, Congress enacted Public Law 102–310, authorizing VA to provide health care services on

a priority basis to Gulf War veterans through December 31, 2001.

Public Law 107–135 extended this provision granting access to

health care on a priority basis through December 31, 2002.
15

More than a decade after the war, scientific research still has not

determined the causes of veterans’ symptoms, or the long-term

health consequences of Gulf War exposures. The Department of Defense recently released new estimates of the number and locations

of service personnel exposed to nerve agents. To meet the medical

needs of Gulf War veterans, now and in the future, Section 322 of

the Committee bill would extend this period for providing health

care services on a priority basis for 10 more years.

Subtitle C—Other Matters

Sec. 331. Transfer Rights for VA Canteen Workers

Section 331 of the Committee bill would provide transfer rights

for hourly rate Veterans Canteen Service (hereinafter, ‘‘VCS’’) employees to title 5 VA positions through internal competitive procedures. VCS hourly-rate employees are Federal employees hired

under authority of 38 U.S.C. § 7802. And while this authority provides many of the same benefits that title 5 federal employees

enjoy, (e.g., workers compensation, health benefits, retirement, and

veterans’ preference) there are benefits to which they are not entitled. For example, VCS hourly employees do not have the same

transfer rights to other VA positions that VCS managers have.

VCS hires through a merit system; however, VA may hire canteen workers without regard to title 5 competitive civil service procedures. As a result, VCS hourly employees applying for VA food

service positions, VA housekeeping positions, and other VA positions are not treated as internal competitive service candidates.

Their years of service are irrelevant, as they cannot easily transfer

to another job at VA without first going through civil service competitions.

In 1979, the Office of Personnel Management (hereinafter,

‘‘OPM’’) approved an interchange agreement with VA that permitted two-way movement between the two hiring authorities. VA

attempted to establish an interchange agreement for the hourly

employees in 1984, 1987 and 1998, but OPM did not approve these

proposals.

Sec. 332. Pilot Project on Medical Care Outreach for Veterans

in the State of Washington Through Outreach Clinics

Section 332 requires VA to establish a program, during fiscal

years 2003 and 2004, to provide health care services for veterans

in the State of Washington through two outreach clinics. The clinics would be located in Whatcom County, Washington and in north

central Washington, in or near Leavenworth, Washington.

Each clinic would provide basic health care services, including diagnosis and referral to other VA facilities, at least one day per

week. VA would be required, by June 1, 2004, to provide to the

Veterans Committees of the Senate and the House a report on the

program describing personnel utilized, patient workload and costs,

and making recommendations regarding the modification or expansion of the pilot project.
16

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 CBO, estimates that, compared to the CBO baseline, there

would be costs resulting from enactment of the Committee bill.

The cost estimate provided by CBO follows:

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

U.S. CONGRESS,

CONGRESSIONAL BUDGET OFFICE,

Washington, DC, June 24, 2002.

Hon. JOHN D. ROCKEFELLER IV,

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. 2043, the Veterans LongTerm Care and Mental Health Programs Enhancement Act of 2002.

If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contact is Sam Papenfuss.

Sincerely,

BARRY B. ANDERSON,

for DAN L. CRIPPEN, Director.

Enclosure.

S. 2043 Veterans Long-Term Care and Mental Health Programs

Enhancement Act of 2002 (As ordered reported by the Senate

Committee on Veterans’ Affairs on June 6, 2002)

SUMMARY

S. 2043 contains several provisions that would affect health care

provided by the Department of Veterans Affairs (VA). CBO estimates that enacting the bill would increase direct spending by $6

million in 2003, $30 million over the 2003–2007 period, and $64

million over the 2003–2012 period. Because the bill would affect direct spending, pay-as-you-go procedures would apply. In addition,

S. 2043 would modify provisions governing discretionary spending

for veterans’ health care programs, which CBO estimates would result in outlays of $28 million in 2003 and $880 million over the

2003–2007 period, assuming appropriation of the estimated

amounts.

The bill would extend for five years certain requirements that

specify how VA is to provide long-term care to veterans. S. 2043

also would increase the amount of appropriated funds spent on

mental health services and would increase the number of centers

at VA hospitals that focus on mental health research and services.

In addition, the bill would permanently extend the authority to

provide counseling and treatment for veterans who suffer from sexual trauma and establish a pilot program of outreach clinics in the

state of Washington. S. 2043 also would require retirement annuities to be recalculated for certain former VA employees.

S. 2043 also would allow more veterans to become eligible for

free prescription drugs by raising the income threshold for deter-
17

mining which veterans need to make a prescription drug copayment. Because the bill would not extend the authority to collect

prescription drug copayments, which expires on September 30,

2002, enacting this provision would have no budgetary effect over

the 2003–2007 period. The provision could increase direct spending

in fiscal year 2002, however, if the bill is enacted soon. If the bill

is enacted before the end of the fiscal year, CBO estimates that

raising the income thresholds for eligibility for free prescription

drugs could increase direct spending by no more than $9 million in

2002, and that this increase would be offset by savings of $7 million in 2003 and $2 million in 2004.

Finally, the bill would authorize appropriations for construction

projects and would raise the threshold for projects to be financed

out of the appropriation for major medical facility construction from

$4 million to $9 million. (Thus, under the bill projects costing up

to $9 million would be considered minor construction.)

S. 2043 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA)

and would impose no costs on state, local, or tribal governments.

ESTIMATED COST TO THE FEDERAL GOVERNMENT

The estimated budgetary impact of S. 2043 is shown in Table 1.

For this estimate CBO assumes that the bill will be enacted near

the beginning of fiscal year 2003, and that both the authorized and

estimated amounts will be appropriated each year. The costs of this

legislation fall within budget functions 600 (income security) and

700 (veterans benefits and services).

Table 1.—Estimated Budgetary Impact of S. 2043

[By Fiscal Year, in Millions Dollars]

2003 2004 2005 2006 2007

CHANGES IN DIRECT SPENDING

Estimated Budget Authority .................................................................................... 6 6 6 6 6

Estimated Outlays ................................................................................................... 6 6 6 6 6

CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level ................................................................................ 150 192 197 179 186

Estimated Outlays ................................................................................................... 28 208 237 213 194

a Enacting S. 2043 could also increase direct spending in fiscal year 2002 if the bill is enacted before the end of the fiscal year. In that

case, CBO estimates raising the income threshold for determining which veterans are eligible for free prescription drugs could increase direct

spending by no more than $9 million in 2002, depending on the date of enactment, but that this increase would be offset by savings of $7

million in 2003 and $2 million in 2004.

BASIS OF ESTIMATE

Direct Spending

The legislation would affect direct spending in all future years

for retirement annuities to certain former VA employees. The bill

could also affect direct spending in 2002 by allowing more veterans

to become eligible for free prescription drugs, but those potential effects are not included in Table 1 because we assume the bill will

be enacted near the beginning of fiscal year 2003 for the purposes

of this cost estimate.

Retirement Annuities for Certain Retirees with Part-time

Service. S. 2043 would require retirement annuities to be recalculated for federal retirees who performed part-time service as reg-
18

istered nurses, physician’s assistants, and certain dental technicians at VA prior to April 7, 1986. The Department of Veterans Affairs Health Care Programs Enhancement Act of 2001 (Public Law

107–135), enacted on January 23, 2002, made changes to the way

retirement benefits are determined for those workers who retired

on or after the date that legislation was enacted. That legislation

treated pre-April 7, 1986, part-time service as full-time service for

the purpose of calculating retirement annuities. S. 2043 would extend these changes to the types of workers covered by Public Law

107–135, but who retired between April 6, 1986, and January 23,

2002. Retirement benefits for these workers currently are set according to a formula that prorates all part-time service performed

in these positions. For most other federal workers, including those

covered by Public Law 107–135, part-time service performed prior

to April 7, 1986, is treated as full-time service when calculating retirement annuities. In most cases, the changes result in higher retirement benefits.

Information about retirees who would be covered by S. 2043 is

limited, but based on data provided by VA and the Office of Personnel Management, CBO estimates that about 1,500 current retirees would have their benefits increased by the bill. CBO estimates

that the new formula would increase benefits for affected retirees

by 13 percent to 22 percent, depending on how much part-time

service was performed prior to April 7, 1986. As a result, enacting

S. 2043 would increase direct spending by $6 million in 2003, $30

million over the 2003–2007 period, and $64 million over the 2003– 2012 period.

Prescription Copayments. Under current law, veterans who

are eligible for a VA pension, eligible for Medicaid, or meet a certain income threshold are eligible to receive free health care at VA

hospitals and clinics. That income threshold is currently $24,305

for a veteran with no dependents. Some veterans also can receive

free prescription drugs, but the income threshold is much lower,

currently $9,556 for a veteran with no dependents. (Both thresholds are adjusted annually for inflation.) Section 311 would raise

the income threshold for receiving free prescription drugs to the

same level needed to receive free health care and would allow all

veterans with incomes less than the annually adjusted amount to

be eligible for free prescription drugs.

Today, veterans who do not meet the income threshold for free

prescription drugs must make a copayment when they have their

prescriptions filled. VA currently collects a $7 copayment for each

outpatient prescription it fills and deposits the first $2 of this copayment into the Medical Care Collections Fund (MCCF). Under

current law, amounts deposited into the MCCF are considered to

be offsets to discretionary appropriations and spending from the

MCCF is subject to annual appropriation. The remaining $5 is deposited into the Health Services Improvement Fund (HSIF). Deposits into the HSIF are considered offsets to direct spending, and VA

may spend amounts in the HSIF without appropriation action.

That is, both the receipts and outlays of the HSIF constitute direct

spending.

Using information from VA, CBO estimates that raising the income threshold for determining which veterans make prescription
19

drug copayments would reduce copayment collections by about 35

percent. Because the authority to collect prescription drug copayments expires on September 30, 2002, the impact of providing free

prescription drugs to a larger number of veterans would only affect

fiscal year 2002 and have no budgetary effect over the 2003–2012

period.

If S. 2043 were enacted before the end of the fiscal year, CBO

estimates that collections deposited into the HSIF would decline by

no more than $23 million. Because VA has the authority to spend

the money in the HSIF without appropriation, any drop in collections would be matched by a drop in spending from the fund. Accounting for a lag in spending of HSIF deposits, we estimate that

there could be a net increase in direct spending of up to $9 million

in 2002. That increase would be offset exactly by savings of $7 million in 2003 and $2 million in 2004. Thus, enacting S. 2043 would

have no net direct spending costs or savings over the 2002–2007

period.

Spending Subject to Appropriation

Table 2 shows the estimated effects of S. 2043 on discretionary

spending for veterans’ health care programs, assuming that appropriations are provided in the authorized and estimated amounts.

Individual provisions that would affect discretionary spending are

described below.

Table 2.—Changes in Spending Subject to Appropriation for S. 2043

[By Fiscal Year, Outlays in Millions of Dollars]

2003 2004 2005 2006 2007

VETERANS’ MEDICAL CARE

Long-Term Care:

Estimated Authorization Level ............................................................. 0 166 171 177 184

Estimated Outlays ................................................................................ 0 151 169 176 182

Mental Health Care:

Estimated Authorization Level ............................................................. 23 24 26 2 2

Estimated Outlays ................................................................................ 21 24 26 4 2

Pilot Project on Medical Care Outreach:

Estimated Authorization Level ............................................................. 2 2 0 0 0

Estimated Outlays ................................................................................ 2 2 0 0 0

Subtotal for Veterans’ Medical Care:

Estimated Authorization Level ............................................................. 25 192 197 179 186

Estimated Outlays ................................................................................ 23 177 195 180 184

MAJOR CONSTRUCTION OF VETERANS MEDICAL FACILITIES

Authorization Level ........................................................................................ 109 0 0 0 0

Estimated Outlays ......................................................................................... 5 29 35 26 10

GRANTS FOR CONSTRUCTION OF EXTENDED CARE FACILITIES

Authorization Level ........................................................................................ 16 0 0 0 0

Estimated Outlays ......................................................................................... 0 2 7 7 0

TOTAL CHANGES

Estimated Authorization Level ...................................................................... 150 192 197 179 186

Estimated Outlays ......................................................................................... 28 208 237 213 194

Veterans Medical Care. Federal spending for all veterans medical

care totals more than $22 billion a year. Several sections of the bill

would affect medical care for veterans. In total, CBO estimates that

implementing these provisions would cost $23 million in 2003 and

$759 million over the 2003–2007 period.
20

Long-Term Care. Section 101 would extend a requirement in current law that VA provide nursing home care to veterans that have

a disability rating of 70 percent or greater. Under current law, this

requirement expires on December 31, 2003. This provision would

extend the requirement for five more years through December 31,

2008. Section 101 also would extend an authorization to treat noninstitutional extended care services as regular medical care. According to VA, the department currently spends about $3.5 billion

a year providing long-term care services to veterans. Of that

amount, VA spends more than $2 billion for nursing home care and

less than $0.5 billion for noninstitutional extended care.

According to VA, it currently spends about $150 million a year out of the $3.5 billion to conform with the above requirements. Accordingly, CBO estimates that requiring VA to continue these services would cost $151 million in 2004 and $678 million over the

2004–2007 period, assuming appropriation of the estimated

amounts.

Mental Health Care. Section 113 would require VA to establish

not more than 15 centers for mental illness research, education,

and clinical activities. VA can establish no more than five centers

under current law. According to VA, there are eight such centers

operating today, however. Thus, for this estimate, CBO assumes

that VA would establish seven more centers for mental illness research, education, and clinical activities to implement this provision. Based on data from VA, CBO estimates that each center

would cost about $2 million a year to operate. Assuming normal

delays in organizing new centers and appropriation of the estimated amounts, CBO estimates that establishing seven new centers would cost $12 million in 2003 and $70 million over the 2003– 2007 period. Section 111 would require VA to spend an additional $25 million

a year on mental health care over the 2003–2005 period. Under current law, VA is required to spend $15 million more each year

than what they otherwise would have spent on post-traumatic

stress disorder and substance use disorders; there is no expiration

date associated with this requirement. Under section 111, VA

would be required to spend $10 million more than specified under

current law over the 2003–2005 period, but would then not be required to spend any additional amounts after 2005. Thus, CBO estimates that implementing this section would cost $9 million in

2003, cost $29 million over the 2003–2005 period, and save $28

million over the 2006–2007 period.

Section 112 would permanently extend VA’s authority to provide

counseling and treatment for veterans who suffered sexual trauma

while a member of the armed services. Under current law, this provision expires on December 31, 2004. VA currently spends about $2

million a year providing this counseling and treatment. CBO estimates that extending this provision would cost $2 million in 2005

and $6 million over the 2005–2007 period, assuming appropriation

of the estimated amounts.

Prescription Drug Copayments. Section 311 would raise the income threshold for receiving free prescription drugs to the same

level needed to receive free health care and would allow all veterans with incomes less than the annually adjusted amount to be
21

eligible for free prescription drugs. The specifics of this proposal

were discussed above under the heading of ‘‘Direct Spending.’’ As

mentioned earlier, CBO estimates the impact of providing free prescription drugs to a larger number of veterans would have no budgetary effect over the 2003–2007 period because the authority to collect prescription drug copayments expires on September 30, 2002.

(As noted below, costs would be triggered if future legislation extends that authority.)

If S. 2043 were enacted before the end of the fiscal year, CBO

estimates that this provision would decrease spending from the

MCCF by no more than $10 million. Because spending from the

MCCF is subject to appropriation, this reduction would represent

a real cost to VA that would need to be paid for out of increased

appropriations if the level of medical care were not reduced. CBO

estimates that implementing S. 2043 could increase spending by as

much as $10 million, if the bill were enacted before October 1,

2002, assuming the availability of appropriated funds.

In addition, if the authority to collect prescription drug copayments were extended through September 30, 2007, CBO estimates

that VA would collect $634 million from prescription drug copayments in 2003 and almost $4 billion over the 2003–2007 period. If

the collection authority is extended, CBO estimates that those collections would be reduced by about 35 percent or $222 million in

2003 and about $1.4 billion over the 2003–2007 period under S.

2043.

Pilot Project on Medical Care Outreach. Section 322 would authorize VA to establish and operate two VA clinics for fiscal years

2003 and 2004 as a pilot project in the state of Washington to provide outreach on health care and services for veterans in that state.

These clinics would provide basic health care services to veterans

in areas that do not currently have VA facilities and would be open

at least one day a week. Based on information from VA, CBO estimates that each clinic would cost about $1 million a year to operate. Thus CBO estimates that implementing this provision would

cost $4 million over the 2003–2004 period, assuming appropriation

of the estimated amounts.

Major Construction of Veterans Medical Facilities. Sections

201 would authorize specific construction projects for seismic corrections along with one construction project for a long-term care facility, and would set spending limits for each project. Section 202

would authorize the appropriation of $108.5 million in 2003 for

major construction projects. Finally, section 211 would raise the

threshold for projects to be financed out of the appropriation for

major medical facility construction from $4 million to $9 million.

(Thus, under the bill projects costing up to $9 million would be considered minor construction.) CBO estimates that implementing

these provisions would cost $5 million in 2003 and $105 million

over the 2003–2007 period, assuming appropriation of the authorized amounts.

Grants for Construction of Extended Care Facilities. Section 212 would authorize up to $16 million to expand, remodel, or

alter space in six Pioneer Homes in the state of Alaska that are

dedicated to providing care for veterans. Under section 212, these

modified Pioneer Homes would be considered a state home facility
22

for the state of Alaska for the purpose of laws administered by the

Secretary of VA. CBO estimates that this provision would have no

cost in 2003 but would cost $16 million over the 2004–2007 period,

assuming appropriation of the authorized amounts.

PAY-AS-YOU-GO CONSIDERATIONS

The Balanced Budget and Emergency Deficit Control Act sets up

pay-as-you-go procedures for legislation affecting direct spending.

The net changes in outlays that are subject to pay-as-you-go procedures are shown in Table 3. For the purposes of enforcing pay-asyou-go procedures, only the effects through fiscal year 2006 are

counted.

Table 3.—Estimated Impact of S. 2043 on Direct Spending and Receipts

[By Fiscal Year, in Millions of Dollars]

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Changes in outlays .............................. 0 6 6 6 6 6 6 7 7 7 7

Changes in receipts *

* Not applicable.

INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

S. 2043 contains no intergovernmental or private-sector mandates as defined in UMRA and would impose no costs on state,

local, or tribal governments.

PREVIOUS CBO ESTIMATE

On October 29, 2001, CBO transmitted a cost estimate for S.

1408, the Veterans’ Copayment Adjustment Act, as introduced on

September 6, 2001. S. 2043 and S. 1408 would both allow more veterans to become eligible for free prescription drugs by raising the

income threshold for determining which veterans need to make a

prescription drug copayment. Because neither bill would extend the

authority to collect prescription drug copayments, which expires on

September 30, 2002, the estimated costs of this provision are limited to fiscal year 2002 for both bills. CBO’s estimate for S. 2043

does not include any costs for fiscal year 2002 because we assume

the bill will be enacted near the beginning of fiscal year 2003. Differences in the cost estimates stem primarily from different assumed enactment dates.

Estimate prepared by: Federal Costs: Sam Papenfuss and Geoffrey Gerhardt. Impact on State, Local, and Tribal Governments:

Elyse Goldman. Impact on the Private Sector: Sally S. Maxwell.

Estimate approved by: Peter H. Fontaine, 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
23

individuals and that the paperwork resulting from enactment

would be minimal.

TABULATION OF VOTES CAST IN COMMITTEE

In compliance with paragraph 7 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 June 6, 2002 meeting. On that date, the Committee, by

unanimous voice vote, ordered S. 2043, as amended, reported favorably to the Senate.

AGENCY REPORT

On May 2, 2002, the Honorable Tim McClain, General Counsel,

Department of Veterans Affairs, appeared before the Committee

and submitted testimony on, among other things, S. 1408, S. 1576,

S. 2043, S. 2044, S. 2227, and S. 2228. Excerpts from this statement are reprinted below:

STATEMENT OF TIM McCLAIN, GENERAL COUNSEL,

DEPARTMENT OF VETERANS AFFAIRS

Mr. Chairman and Members of the Committee, Thank you for

the opportunity to testify on a number of legislative items of interest to veterans.

* * * * * * *

S. 1408

This bill would increase the income threshold used to define the

group of low-income veterans who are exempted from paying the

outpatient pharmacy co-payment. The exempted group would be

expanded to include veterans who, for purposes of receiving VA

health care, are deemed unable to defray necessary expenses of

care, i.e., those with incomes below VA’s ‘‘means-test’’ threshold. A

provision of the bill would also prohibit the Secretary from increasing the pharmacy co-payment until VA begins collecting co-payments for outpatient care.

Currently, the low-income exemption applies only to those veterans whose incomes do not exceed the maximum annual rate of

pension payable under 38 U.S.C. § 1521 were they eligible for such

pension. This is a much smaller group composed of very low-income

veterans. Although VA appreciates the desire to standardize the

definition of ‘‘low-income’’ veteran for purposes of both health care

eligibility and the pharmacy co-payment exemption, VA cannot

support S. 1408. The proposal would significantly reduce muchneeded revenue upon which the Department relies to continue providing services. We also recommend deletion of the provision deferring increases in the amount of the pharmacy co-payment. VA is

already implementing new regulations pertaining to both the pharmacy co-payment and the outpatient co-payment. We estimate the PAYGO costs of S. 1408 to be $300 million dollars annually.

* * * * * * *
24

S. 1576

S. 1576 would extend through December 31, 2011, VA’s special

authority to treat Gulf War veterans for any disability, notwithstanding there is insufficient medical evidence to conclude that

such disability may be associated with such service. That authority

will expire after December 31, 2002. VA supports this proposal.

* * * * * * *

S. 2043

S. 2043 would extend by five years (through December 31, 2008)

VA’s authority to provide non-institutional extended care services

as part of the medical benefits package furnished to veterans. The

bill would also extend through December 31, 2008, mandatory eligibility for nursing home care for veterans with a service-connected

disability rated 70% or greater. Finally, S. 2043 would extend by

five years the date by which the Secretary must report to Congress

on the operation of its long-term care programs established under

the Millennium Act. VA supports S. 2043 and the continuation of

the Millennium Act non-institutional long-term care provisions.

* * * * * * *

S. 2044

S. 2044 would amend section 116 of the Millennium Act to direct

that we increase funding for specialized mental health services for

veterans. The measure directs that we expend $25 million for these

programs, but it is not clear whether it would require $25 million

for each of three successive years, or over a three-year period. The

additional $25 million must also be over and above the baseline

amount now being expended for these programs. However, it is unclear if we must expend an additional $25 million over the baseline

each year for three successive years, or only over a three-year period. Finally, the measure directs that we consider these funds to

be special-purpose funds that we must allocate outside the VERA

allocation system.

Although VA appreciates the need to ensure adequate funding

for these highly valuable and essential health-care programs, we

strongly oppose this bill. We do not believe any individual health

service should be treated differently from other essential treatment

programs for allocation of appropriated resources. We also believe

it is inappropriate to direct that we allocate funds for programs

like this outside of the VERA system.

* * * * * * *

S. 2227

S. 2227 would clarify the effective date of changes to the method

of computing retirement annuities for certain VA health-care personnel. Last January the Department of Veterans Affairs Health

Care Programs Enhancement Act of 2001 (P.L. 107–135) became

law. That bill changed the way part-time service performed before

April 7, 1986, by certain VA health-care personnel is credited for

annuity purposes. VA had recruitment and retention problems
25

based upon the prior methodology of the annuity computation for

VA nurses. These difficulties were addressed by the enactment of

section 132 of P.L. 107–135. S. 2227 would extend the benefits of

section 132 of P.L. 107–135 to individuals who retired before the

law’s enactment. The Administration opposes legislation that modifies the retirement-benefit computations for employees who are already retired.

* * * * * * *

S. 2228

This bill would provide that the Secretary may establish not

more than 15 Centers for Mental Illness Research, Education, and

Clinical Activities under 38 U.S.C. § 7320. VA has no objection to

this provision.

Additional Views of Chairman John D. Rockefeller IV

Section 212 of the Committee bill sets a precedent which is cause

for concern. The State Veterans Home program—run by the Department of Veterans Affairs—is a partnership between the states

and VA to meet the needs of veterans through the establishment

and maintenance of custodial facilities, hospitals, and nursing

homes. This partnership has existed for more than 60 years.

In order to gain access to VA funds, which total 65 percent of the

construction or renovation of existing buildings, a state must certify the availability of the remaining 35 percent. This financial

commitment allows VA’s limited resources to benefit more states

and ultimately more veterans, and it is the cornerstone of the State

Veterans Home Program.

Section 212 of the Committee bill creates an exception for the

State of Alaska and would allow the Secretary of VA to hand over

$16 million to Alaska without any corresponding State appropriation.

Every state, save Alaska, Delaware and Hawaii, have previously

enacted legislation to appropriate their share for participation in

the program. Many states have done so multiple times, so that veterans could have access to more than one facility. Currently, both

Alaska and Delaware legislatures have taken up the issue.

Most recently, the legislatures in West Virginia, Colorado, Texas,

Pennsylvania, and Idaho, have each set aside funds totaling more

than $25 million dollars. Had these States sought a route similar

to the one taken by section 212 of the Committee bill, the cost to

the Federal government would be more than $46 million. The chart

below details the funding for each State Veterans Home project.

Construction Grants for State Extended Care Facilities

[dollars in thousands]

State Home Total Cost VA Share State Appropriated Share

Alexander City, AL ................................................... 7,629 4,959 2,670

Anderson, SC ........................................................... 12,520 7,516 5,004

Anna, IL ................................................................... 4,510 2,932 1,578

Armore, OK .............................................................. 9,501 6,176 3,325

Augusta, GA ............................................................ 1,956 978 978

Augusta, ME ............................................................ 4,472 2,907 1,565
26

Construction Grants for State Extended Care Facilities—Continued

[dollars in thousands]

State Home Total Cost VA Share State Appropriated Share

Aurora, CO ............................................................... 23,843 15,498 8,345

Bangor, ME ............................................................. 10,154 6,600 3,554

Barstow, CA ............................................................ 30,500 19,825 10,675

Batavia, NY ............................................................. 15,000 8,633 6,367

Bay Minette, AL ....................................................... 10,035 6,523 3,512

Bennington, VT ........................................................ 11,960 7,006 4,954

Big Springs, TX ....................................................... 11,770 7,650 4,120

Boise, ID .................................................................. 6,795 4,292 2,503

Bonham, TX ............................................................. 11,770 7,650 4,120

Boulder City, NV ...................................................... 20,930 13,604 7,326

Bristol, RI ................................................................ 8,377 5,264 3,113

Buffalo, NY .............................................................. 3,633 2,254 1,379

Cape Girardeau, MO ............................................... 8,364 5,436 2,928

Cameron, MO .......................................................... 20,356 13,604 6,752

Caribou, ME ............................................................ 1,850 1,187 663

Charlotte Hall, MD .................................................. 33,885 20,432 13,453

Chelsea, MA ............................................................ 7,999 4,593 3,406

Chula Vista, CA ...................................................... 34,803 22,100 12,703

Claremore, OK ......................................................... 22,769 14,364 8,405

Clarksburg, WV ....................................................... 13,500 8,775 4,725

Clinton, OK .............................................................. 10,223 6,568 3,655

Collins, MS .............................................................. 9,451 6,143 3,308

Columbia Falls, MT ................................................. 1,711 1,040 671

Columbia, SC .......................................................... 1,982 687 1,295

Daytona Beach, FL .................................................. 11,646 7,764 3,882

Erie, PA ................................................................... 6,862 3,550 3,312

Fayetteville, NC ....................................................... 8,801 692 8,109

Fergus Falls, MN ..................................................... 8,000 5,200 2,800

Florence, CO ............................................................ 1,410 894 516

Floresville, TX .......................................................... 11,746 7,635 4,111

Ft. Dodge, KS .......................................................... 830 415 415

Glendive, MT ........................................................... 5,691 3,699 1,992

Grand Island, NB .................................................... 3,299 1,333 1,966

Grand Rapids, MI .................................................... 22,005 12,993 9,012

Hanson, KY .............................................................. 13,635 8,863 4,772

Hastings, MN .......................................................... 4,888 3,292 1,596

Hazard, KY .............................................................. 15,457 10,047 5,410

Hollidaysburg, PA .................................................... 26,569 16,567 10,002

Holyoke, MA ............................................................. 4,062 2,130 1,932

Homelake, CO .......................................................... 2,822 1,864 958

Hot Springs, SD ...................................................... 1,330 829 501

Humboldt, TN .......................................................... 7,538 4,900 2,638

Huntsville, AL .......................................................... 10,308 6,701 3,607

Jackson, LA ............................................................. 8,675 5,000 3,675

Jackson, MS ............................................................ 6,198 3,931 2,267

Juana Diaz, PR ........................................................ 13,667 8,884 4,783

King, WI ................................................................... 34,801 20,385 14,416

Kosciusko, MS ......................................................... 9,172 5,962 3,210

Lafayette, IN ............................................................ 12,532 6,126 6,406

Lake City, FL ........................................................... 6,739 4,376 2,363

Land O’Lakes, FL .................................................... 11,944 7,764 4,180

LaSalle, IL ............................................................... 7,200 4,643 2,557

Lawson, OK ............................................................. 38,226 24,847 13,379

Lewiston, ID ............................................................ 6,012 3,908 2,104

Lisbon, ND ............................................................... 5,381 3,498 1,883

Little Rock, AR ........................................................ 2,182 1,418 764

Luverne, MN ............................................................ 7,457 4,847 2,610

Manteno, IL ............................................................. 18,094 11,761 6,333

Marquette, MI .......................................................... 10,639 6,915 3,724

Marshalltown, IA ..................................................... 42,557 27,205 15,352

Menlo Park, NJ ........................................................ 47,284 30,058 17,226

Mexico, MO .............................................................. 8,027 5,204 2,823

Milledgeville, GA ..................................................... 12,284 6,808 5,476
27

Construction Grants for State Extended Care Facilities—Continued

[dollars in thousands]

State Home Total Cost VA Share State Appropriated Share

Minneapolis, MN ..................................................... 43,831 28,358 15,473

Monroe, LA .............................................................. 11,849 7,279 4,570

Montrose, NY ........................................................... 43,856 28,506 15,350

Murfreesboro, TN ..................................................... 5,126 3,226 1,900

Norman, OK ............................................................. 29,737 19,255 10,482

Norfolk, NB .............................................................. 16,516 10,527 5,989

Omaha, NB .............................................................. 1,913 1,243 670

Orting, WA ............................................................... 4,382 2,805 1,577

Oxford, MS ............................................................... 9,537 6,199 3,338

Paramus, NJ ............................................................ 28,677 18,251 10,426

Pembroke Pines, FL ................................................. 15,344 9,924 5,420

Philadelphia, PA ...................................................... 20,930 13,605 7,325

Phoenix, AZ ............................................................. 14,189 9,223 4,966

Pittsburgh, PA ......................................................... 27,339 17,770 9,569

Pocatello, ID ............................................................ 5,277 3,430 1,847

Quincy, IL ................................................................ 3,976 2,772 1,204

Retsil, WA ................................................................ 5,989 3,871 2,118

Rifle, CO .................................................................. 3,571 2,321 1,250

Roanoke, VA ............................................................ 17,846 9,161 8,685

Rocky Hill, CT .......................................................... 4,656 2,843 1,813

Salisbury, NC .......................................................... 3,371 2,191 1,180

Salt Lake City, UT ................................................... 6,792 4,415 2,377

St. Albans, NY ......................................................... 28,919 18,798 10,121

St. James, MO ......................................................... 27,754 16,829 10,925

Sandusky, OH .......................................................... 47,762 30,008 17,754

Scarborough, ME ..................................................... 11,226 6,858 4,368

Scotts Bluff, NB ...................................................... 4,520 2,854 1,666

Scranton, PA ........................................................... 23,143 13,477 9,666

Silver Bay, MN ........................................................ 2,481 1,613 868

South Paris, ME ...................................................... 7,619 4,953 2,666

Spring City, PA ........................................................ 17,936 11,653 6,283

Stony Brook, NY ...................................................... 25,400 16,510 8,890

Sulfur, OK ................................................................ 5,077 3,300 1,777

Talihina, OK ............................................................ 9,438 5,999 3,439

Temple, TX .............................................................. 11,770 7,650 4,120

The Dllas, OR .......................................................... 14,218 9,242 4,976

Tilton, NH ................................................................ 7,022 4,414 2,608

Truth or Consequence, NM ..................................... 5,662 3,636 2,026

Union Grove, WI ...................................................... 2,857 1,857 1,000

Vineland, NJ ............................................................ 16,432 8,663 7,769

Walsenburg, CO ...................................................... 7,741 5,404 2,337

Warrensburg, CO ..................................................... 20,960 13,624 7,336

Wilmore, KY ............................................................. 14,923 10,315 4,609

Winfield, KS ............................................................. 17,171 10,641 6,530

Yountville, CA .......................................................... 94,694 61,384 33,310

On June 6, 2002, John Johnson, President of the National Association of State Veterans Homes wrote:

We feel giving one state preference would be unjust to all

other states. We have worked long and hard with the Department of Veterans Affairs and members of both Houses to create a fair and equitable program. If any changes are made,

they should not favor one state over another, but should be

equally applied to all states and veterans. Forty-seven states

have had to use the process that has been in place, and to

waive rules and regulations for one state would be an injustice

to all other states who have followed the process.

Joseph A. Violante, National Legislative Director, Disabled

American Veterans, expressed similar reservations. In his letter of
28

June 6, 2002, Mr. Violante argued that section 212 ‘‘bypasses the

Department of Veterans Affairs State Home authority currently in

place.’’ The proponent of this provision, Senator Murkowski, made the

case that the uniqueness of Alaska mandates a different approach,

and that may well be true. Alaska has six Pioneers’ Homes, in

which the elderly reside. Of the current 500 residents, 97 are veterans. Rather than building one new home, it was argued that renovation of these existing homes would be more practical. Not only

does the statute allow for the renovation of multiple facilities, but

it actually favors these types of projects over new construction.

Through the normal course—appropriation of funds by the Alaskan

legislature, certification of the funds, and applications made to

VA—Alaska could have multiple State Veterans Homes. Each stage

of the process, including submitting a basic application, was disregarded.

Applying this type of change equally to all states would unfortunately mean a total erosion of the partnership which has made the

State Home Program a success. Allowing an exception for only one

State is unfair to all others.

CHANGES IN EXISTING LAW MADE BY THE COMMITTEE BILL, AS

REPORTED

In compliance with rule XXVI paragraph 12 of the Standing

Rules of the Senate, the following provides a print of the statute

or the part or section thereof to be amended or replaced (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):

TITLE 38, UNITED STATES CODE

* * * * * * *

§ 1701. Definitions

For the purposes of this chapter—

* * * * * * *

(10)(A) During the period beginning on øthe date of the enactment of the Veterans Millennium Health Care and Benefits Act

and ending on December 31, 2003,¿ November 30, 1999, and ending

on December 31, 2008, the term ‘‘medical services’’ includes noninstitutional extended care services.

* * * * * * *

§ 1710. Eligibility for hospital, nursing home, and domiciliary care

* * * * * * *

(e)(1)(A) ‘‘ * *

* * * * * * *
29

(3) * * *

* * * * * * *

(B) in the case of care for a veteran described in paragraph

(1)(C), after øDecember 31, 2002¿ December 31, 2012; and

* * * * * * *

§ 1710A. Required nursing home care

* * * * * * *

(c) The provisions of subsection (a) shall terminate on øDecember

31, 2003¿ December 31, 2008.

* * * * * * *

§ 1720D. Counseling and treatment for sexual trauma

(a)(1) øDuring the period through December 31, 2004, the Secretary¿ The Secretary shall operate a program under which the

Secretary provides counseling and appropriate care and services to

veterans who the Secretary determines require such counseling and

care and services to overcome psychological trauma, which in the

judgment of a mental health professional employed by the Department, resulted from a physical assault of a sexual nature, battery

of a sexual nature, or sexual harassment which occurred while the

veteran was serving on active duty.

(2) In furnishing counseling to a veteran under this subsection,

the Secretary mayø, during the period through December 31,

2004,¿ provide such counseling pursuant to a contract with a qualified mental health professional if (A) in the judgment of a mental

health professional employed by the Department, the receipt of

counseling by that veteran in facilities of the Department would be

clinically inadvisable, or (B) Department facilities are not capable

of furnishing such counseling to that veteran economically because

of geographical inaccessibility.

(b)(1) The Secretary shall give priority to the øestablishment

and¿ operation of the program to provide counseling and care and

services under subsection (a). In the case of a veteran eligible for

counseling and care and services under subsection (a), the Secretary shall ensure that the veteran is furnished counseling and

care and services under this section in a way that is coordinated

with the furnishing of such care and services under this chapter.

(2) In øestablishing a program¿ operating a program to provide

counseling under subsection (a), the Secretary shall—

* * * * * * *

§ 1722A. Copayment for medications

(a)(1) * * *

* * * * * * *

(3) Paragraph (1) does not apply—

* * * * * * *

ø(B) to a veteran whose annual income (as determined under

section 1503 of this title) does not exceed the maximum annual

rate of pension which would be payable to such veteran if such
30

veteran were eligible for pension under section 1521 of this

title.¿

(B) to a veteran whose attributable income is not greater than

the amount provided for in subsection (b) of section 1722 of this

title, as adjusted from time to time under subsection (c) of that

section.

* * * * * * *

§ 7320. Centers for mental illness research, education, and

clinical activities

* * * * * * *

(b)(1) * * *

* * * * * * *

(3) Not more than øfive centers¿ 15 centers may be designated

under this section.

* * * * * * *

§ 7802. Duties of Secretary with respect to Service

The Secretary shall—

* * * * * * *

(5) employ such persons as are necessary for the establishment, maintenance, and operation of the Service, and pay the

salaries, wages, and expenses of all such employees from the

funds of the Service. Personnel necessary for the transaction of

the business of the Service at canteens, warehouses, and storage depots shall be appointed, compensated from funds of the

Service, and removed by the Secretary without regard to the

provisions of title 5 governing appointments in the competitive

service and chapter 51 and subchapter III of chapter 53 of title

5. Those employees are subject to the provisions of title 5 relating to a preference eligible described in section 2108(3) of title

5, subchapter I of chapter 81 of title 5, and subchapter III of

chapter 83 of title 5. Employees and personnel under this

clause may be considered for appointment in Department positions in the competitive service in the same manner that Department employees in the competitive service are considered for

transfer to such positions. An employee or individual appointed

as personnel under this clause who is appointed to a Department position under the authority of the preceding sentence

shall be treated as having a career appointment in such position once such employee or individual meets the three-year requirement for career tenure (with any previous period of employment or appointment in the Service being counted toward

satisfaction of such requirement);

* * * * * * *

§ 8104. Congressional approval of certain medical facility

acquisitions

(a)(1) * * *

* * * * * * *

(3) For the purpose of this subsection:
31

(A) The term *major medical facility project’’ means a project

for the construction, alteration, or acquisition of a medical facility involving a total expenditure of more than ø$4,000,000¿

$9,000,000, but such term does not include an acquisition by

exchange.

* * * * * * *

VETERANS MILLENNIUM HEALTH CARE

AND BENEFITS ACT

* * * * * * *

TITLE I—ACCESS TO CARE

Subtitle A—Long-Term Care

SEC. 101. REQUIREMENT TO PROVIDE EXTENDED CARE

SERVICES.

* * * * * * *

(i) REPORT.—Not later than øJanuary 1, 2003,¿ January 1, 2008,

the Secretary shall submit to the Committees on Veterans’ Affairs

of the Senate and House of Representatives a report on the operation of this section (including the amendments made by this section). The Secretary shall include in the report—

* * * * * * *

SEC. 116. SPECIALIZED MENTAL HEALTH SERVICES.

* * * * * * *

(c) FUNDING.—(1) In carrying out the program described in subsection (a), the Secretary shall identify, from funds available to the

Department for medical care, an amount of not less than

ø$15,000,000¿ $25,000,000 in each of fiscal years 2003, 2004, and

2005 to be available to carry out the program and to be allocated

to facilities of the Department pursuant to subsection (d).

(2) In identifying available amounts pursuant to paragraph (1),

the Secretary shall ensure that, after the allocation of those funds

under subsection (d), the total expenditure for programs relating to

(A) the treatment of post-traumatic stress disorder, and (B) substance use disorders is not less than ø$15,000,000¿ $25,000,000 in

excess of the baseline amount.

(3)(A) For purposes of paragraph (2), the baseline amount is the

amount of the total expenditures on such programs for the most recent fiscal year for which final expenditure amounts are known, adjusted to reflect any subsequent increase in applicable costs to deliver such services in the Veterans Health Administration, as determined by the Committee on Care of Severely Chronically Mentally Ill Veterans.

(B) For purposes of this paragraph, in fiscal years 2003, 2004,

and 2005, the fiscal year utilized to determine the baseline amount

shall be fiscal year 2002.

* * * * * * *
32

(d) ALLOCATION OF FUNDS TO DEPARTMENT FACILITIES.—øThe

Secretary¿ (1) In each of fiscal years 2003, 2004, and 2005, the Secretary shall allocate funds identified pursuant to subsection (c)(1)

to individual medical facilities of the Department as the Secretary

determines appropriate based upon proposals submitted by those

facilities for the use of those funds for improvements to specialized

mental health services.

(2) In allocating funds to facilities in a fiscal year under paragraph (1), the Secretary shall ensure that—

(A) not less than $10,000,000 is allocated by direct grants to

programs that are identified by the Mental Health Strategic

Health Care Group and the Committee on Care of Severely

Chronically Mentally Ill Veterans;

(B) not less than $5,000,000 is allocated for programs on

post-traumatic stress disorder; and

(C) not less than $5,000,000 is allocated for programs on substance abuse disorder.

(3) The Secretary shall provide that the funds to be allocated

under this section during each of fiscal years 2003, 2004, and 2005

are funds for a special purpose program for which funds are not allocated through the Veterans Equitable Resource Allocation system.

* * * * * * *

VETERANS BENEFITS AND HEALTH

CARE IMPROVEMENT ACT OF 2000

* * * * * * *

TITLE II—HEALTH PROVISIONS

* * * * * * *

Subtitle D—Construction Authorization

SEC. 231. AUTHORIZATION OF MAJOR MEDICAL FACILITY PROJECTS.

(a) FISCAL YEAR 2001 PROJECTS.—The Secretary of Veterans Affairs may carry out the following major medical facility projects,

with each project to be carried out in an amount not to exceed the

amount specified for that project:

* * * * * * *

(2) Construction of a nursing home at the Department of

Veterans Affairs Medical Center, Beckley, West Virginia,

ø$9,500,000¿ $18,200,000.

* * * * * * *

SEC. 232. AUTHORIZATION OF APPROPRIATIONS.

(a) IN GENERAL.—There are authorized to be appropriated to the

Secretary of Veterans Affairs for the Construction, Major Projects,

account—
33

(1) for fiscal years 2001 and 2002, a total of ø$87,800,000¿

$96,500,000 for the projects authorized in paragraphs (1), (2),

and (3) of section 231(a);

* * * * * * *

Æ