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[Senate Report 111-41]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 101
111th Congress                                                   Report
                                 SENATE
 1st Session                                                     111-41

======================================================================

 
    VETERANS' HEALTH CARE BUDGET REFORM AND TRANSPARENCY ACT OF 2009

                                _______
                                

                  July 8, 2009.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 423]

    The Committee on Veterans' Affairs (hereinafter, 
``Committee''), to which was referred the bill (S.423), to 
amend title 38, United States Code, to authorize advance 
appropriations for certain medical care accounts of the 
Department of Veterans Affairs by providing two-fiscal year 
budget authority, and for other purposes, having considered the 
same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                              Introduction

    On February 12, 2009, Committee Chairman Daniel K. Akaka 
introduced S.423, a bill to authorize, beginning in fiscal year 
2011, advance appropriations for certain medical care accounts 
of the Department of Veterans Affairs by providing two-fiscal 
year budget authority, and for other purposes. Committee 
Ranking Minority Member Richard Burr is an original cosponsor 
of S.423, as are Senators Olympia J. Snowe, Tim Johnson, John 
D. Rockefeller IV, Bernard Sanders, Jon Tester, Mark Begich, 
Jeff Bingaman, Barbara Boxer, Russell D. Feingold, Mary L. 
Landrieu, Frank R. Lautenberg, Robert Menendez, Lisa Murkowski, 
Debbie Stabenow, John Thune, David Vitter, and Charles E. 
Schumer. Senators James M. Inhofe, Blanche L. Lincoln, Ron 
Wyden, Arlen Specter, Johnny Isakson, John Ensign, Tom Coburn, 
John F. Kerry, Jeff Sessions, Max Baucus, Roland W. Burris, 
Saxby Chambliss, Kay R. Hagan, Barbara A. Mikulski, Bob Corker, 
Mark Udall, Patrick J. Leahy, Susan M. Collins, Patty Murray, 
Claire McCaskill, Robert F. Bennett, Joseph I. Lieberman, 
Sherrod Brown, Benjamin E. Nelson, Amy Klobuchar, Chuck 
Grassley, Sam Brownback, Richard Durbin, Michael F. Bennet, 
Mike Johanns, Jack Reed, Sheldon Whitehouse, Robert P. Casey, 
Jr., Mel Martinez, and Kirsten E. Gillibrand are also 
cosponsors of S.423.

                           Committee Hearing

    On April 22, 2009, the Committee held a hearing on 
legislation pending before the Committee. Among the measures on 
which the Committee received testimony was S.423. Testimony on 
S.423, among other bills, was offered by: Gerald M. Cross, 
M.D., Principal Deputy Under Secretary for Health, Department 
of Veterans Affairs; Adrian Atizado, Assistant National 
Legislative Director, Disabled American Veterans; Ammie 
Hilsabeck, RN, Oscar G. Johnson VA Medical Center, representing 
American Federation of Government Employees; and Blake Ortner, 
Senior Associate Legislative Director, Paralyzed Veterans of 
America.

                           Committee Meeting

    On May 21, 2009, the Committee met in open session to 
consider legislation pending before the Committee. Among the 
measures so considered was S.423. The Committee voted without 
dissent to report favorably S.423 to the Senate.

               Summary of the Committee Bill as Reported

    S.423, as reported, (hereinafter, ``the Committee bill'') 
would authorize, beginning in fiscal year 2011, advance 
appropriations for certain medical care accounts of the 
Department of Veterans Affairs by providing two-fiscal year 
budget authority, and for other purposes.

Sec. 1. Short Title

    Section 1 would designate the short title of the Committee 
Bill as ``Veterans Health Care Budget Reform and Transparency 
Act of 2009''.

Sec. 2. Findings

    Section 2 would outline the findings of the Congress. These 
include that, for 19 of the past 22 fiscal years, funds have 
not been appropriated to VA on time, causing serious 
difficulties for VA in planning and providing health care to 
veterans. Further, that these difficulties endanger VA's 
ability to provide timely and quality care, and that they 
disrupt VA's ability to plan which programs and services can be 
funded from year to year. The Congress also finds that 
providing sufficient, timely and predictable funding would help 
VA plan and manage their health care system more effectively, 
thus improving their ability to meet the health care needs of 
veterans.

Sec. 3. Two-Fiscal Year Budget Authority for Certain Medical Care 
        Accounts of the Department of Veterans Affairs

    Section 3 would authorize, beginning in fiscal year 2011, 
advance appropriations for certain medical care accounts of the 
Department of Veterans Affairs by providing two-fiscal year 
budget authority.

Sec. 4. Comptroller General of the United States Study on Adequacy and 
        Accuracy of Baseline Model Projections of the Department of 
        Veterans Affairs for Health Care Expenditures

    Section 4 would provide enhanced oversight of the VA health 
care budget process by requiring the Comptroller General to 
conduct a study of the adequacy and accuracy of baseline model 
projections for VA health care expenditures with respect to the 
fiscal year involved and the subsequent four fiscal years.

                       Background and Discussion

Section 2. Findings

    For more than two decades, the VA health care system has 
been plagued by consistently late and, at times, inadequate 
budgets. Final VA appropriations have not been enacted prior to 
the start of the fiscal year in 19 of the past 22 years, and 
requests for supplemental appropriations for VA health care 
have increased in frequency during recent years. Over the past 
7 years, final VA appropriations were late approximately 3 
months on average.
    Furthermore, over the past decade, as the number of veteran 
enrollees and users rose dramatically, funding requests for VA 
health care often lagged behind the resource requirements that 
VA itself identified. In 2004, the Secretary of Veterans 
Affairs stated that his appropriation budget request for health 
care was reduced by $1.2 billion during the OMB review process; 
Congress restored that funding during the appropriation 
process. In 2005, the new Secretary informed Congress that VA's 
funding request presented to the Committee earlier in the year 
was no longer adequate, and that $2 billion in additional 
funding was required for fiscal year 2006, and $975 million in 
supplemental funding was required for fiscal year 2005; 
Congress provided those additional appropriations.
    Faced with late and, at times, inadequate budgets so often 
in the past, VA has had to find ways to reduce demand or ration 
care to veterans, such as curtailing enrollment of Priority 8 
veterans or limiting access to services through increased 
waiting times. Furthermore, late arriving budgets have often 
delayed the hiring of new medical personnel or procurement of 
new equipment or supplies. While there has been some impact on 
the timeliness and overall quality of VA care from these 
financial and management difficulties in the past, there is a 
serious concern that continued funding problems could 
significantly weaken the quality of veterans' health care. 
Providing sufficient, timely and predictable funding to the VA 
health care system would mitigate these dangers and allow VA 
administrators and directors to more efficiently and 
effectively provide medical care to veterans.
    The findings section concludes with the finding that the 
most viable means by which to provide sufficient, timely, and 
predictable health care funding for veterans health care is 
through advanced appropriations and the assignment of a new 
oversight role to the Government Accountability Office (GAO) 
that will ensure the integrity of VA's budget preparation and 
presentation process.

Section 3. Two-Fiscal Year Budget Authority for Certain Medical Care 
        Accounts of the Department of Veterans Affairs

            Section 3(a). Two-Fiscal Year Budget Authority
    Section 3(a) would amend chapter 1 of title 38, United 
States Code by creating a 2-year fiscal budget authority for 
certain medical care accounts.
    Background. The Committee notes that there have been and 
continue to be a number of other Federal programs that receive 
advance appropriations. As stated in the President's Fiscal 
Year 2010 Budget Appendix, in fiscal year 2009, programs 
receiving advance appropriations include the Employment and 
Training Administration, Job Corps, Education for the 
Disadvantaged, School Improvement, Children and Family Services 
(Head Start), Special Education, Adult Education, Postal 
Service, Tenant-based Rental Assistance, Project-based Rental 
Assistance, and the Corporation for Public Broadcasting.
    At the Committee's April 22, 2009 hearing, Mr. Blake Ortner 
of Paralyzed Veterans of America testified that:

        Historically, advance appropriations have been used to 
        make a program function more effectively, better align 
        with funding cycles of program recipients, or provide 
        insulation from annual partisan political maneuvering. 
        By moving to advance appropriations, veterans' health 
        care programs will accrue all three of these benefits.

    Mr. Adrian Atizado of the Disabled American Veterans stated 
that:

        * * * not knowing when or at what level VA will receive 
        funding from year to year--or whether Congress would 
        approve or oppose the Administration's proposals--
        hinders the ability of VA officials to efficiently plan 
        and responsibly manage VA health care. Broken financing 
        causes unnecessary delays and backlogs in the system: 
        hiring key staff is put off, or just not done, while 
        injuries like PTSD or Traumatic Brain Injury are too 
        often not diagnosed or treated in a timely manner.

    Dr. Gerald Cross, Principal Deputy Under Secretary for 
Health, testified on behalf of the Department in support of 
S.423 at the April 22, 2009 hearing, and stated that:

        * * * the President emphasized that care for Veterans 
        should never be hindered by budget delays and expressed 
        support for advanced funding for Veterans' medical 
        care. We believe that advanced funding will ensure that 
        sufficient resources are available from the first day 
        of the fiscal year so that the health care needs of 
        Veterans can be provided on a timely basis.

    The Committee Bill has been endorsed by The Partnership for 
Veterans Health Care Budget Reform, an organization made up of 
nine major veterans service organizations; The Independent 
Budget; The Military Coalition, an organization of 35 veterans 
and military service organizations; and the American Federation 
for Government Employees, which represents 600,000 government 
employees, including tens of thousands who work for VA. Advance 
appropriations for veterans' health care programs have also 
been endorsed by a coalition of more than two dozen former VA 
senior leaders, including one former Secretary, two former 
Deputy Secretaries, four former Under Secretaries for Health, 
three former Deputy Under Secretaries for Health, eight former 
VISN Directors, and seven former Medical Center Directors.
    Advance appropriations for veterans' medical care will 
provide a number of advantages over the regular appropriations 
process. Having an approved appropriations bill in place a year 
or more before the fiscal year begins will eliminate the 
negative consequences that arise from continuing resolutions, 
particularly when funding would have been frozen at the prior 
year's level. When continuing resolutions have been enacted, 
VA's medical centers and outpatient clinics have been prevented 
from increasing the number of health care personnel required to 
provide care even when there were increases in workload. With 
advance appropriations, VA will have sufficient lead time to 
plan on the appropriate composition of its medical personnel, 
procure needed equipment, and negotiate new leases and 
contracts so that they are in place on the first day of the 
fiscal year.
    The Committee expects that advance appropriations will 
allow VA officials to better plan and manage the Department's 
resources, resulting in more efficient use of appropriated 
dollars and more timely and accurate reporting to Congress of 
how such funds have been and will be utilized. The Committee 
also expects that VA will be able to ensure that the medical 
system has qualified doctors, nurses, and other health care 
personnel when and where they are needed.
    The Committee notes that veterans' health care programs, 
like other Federal programs that receive advance 
appropriations, must still submit and justify budget requests 
every year; that Congress will retain all its prerogatives for 
determining budget and appropriation levels for VA medical 
care; that Congress will retain all of its powers to determine 
veterans' health care benefits and services; that Congress will 
retain all of its ability to restrict or rescind funding, when 
appropriate; and that VA health care will remain subject to the 
full range of oversight activities performed by Congress.
    Committee Bill. Section 3 would amend chapter 1 of title 38 
to add a new section--Section 113A. Two-fiscal year budget 
authority for certain medical care accounts--which would 
authorize, beginning in fiscal year 2011, advance 
appropriations for the three medical care accounts of the 
Department of Veterans Affairs by providing two-fiscal year 
budget authority. The advance appropriations would be made for 
fiscal year 2011 and for each year that follows in which VA is 
provided funding in an appropriations bill. The three medical 
accounts that will receive appropriations are Medical Services, 
Medical Support and Compliance, and Medical Facilities.

Section 4. Comptroller General of the United States Study on Adequacy 
        and Accuracy of Baseline Model Projections of the Department of 
        Veterans Affairs for Health Care Expenditures

    Background. Over the past decade, disagreements in Congress 
and with the Administration over funding levels for VA health 
care programs have frequently led to inadequate and late-
arriving budgets. As noted above, in both 2004 and 2005 VA 
itself admitted that the budget requests presented to Congress 
were inadequate to meet the needs of veterans who were expected 
to seek care at VA medical facilities. Over the past decade, 
the Committee has routinely recommended significant increases 
above VA's budget requests, and the final enacted appropriation 
levels for veterans' health care programs have, in many cases, 
reflected those recommendations.
    VA recognized the limitations in its budget forecasting 
capabilities almost 10 years ago, particularly as enrollment 
rose rapidly between 2000 and 2004. During that time, VA 
developed and deployed a new budget forecasting methodology, 
which today is known as the Enrollee Health Care Projection 
Model (hereinafter referred to as the ``Model''). The Model is 
an actuarial model developed in cooperation with Milliman, 
Inc., a leading private sector actuarial firm. The Model is 
comprised of three sub-models: one for projected enrollment of 
veterans, one for anticipated utilization rates, and one for 
unit costs for health care services. The Model combines these 
three sub-models and then makes a series of adjustments to 
account for additional demographic factors and trends to arrive 
at a projected total resource requirement for the three VA 
medical care accounts combined.
    Although the model itself is a data-driven assessment of 
the resource needs of the VA health care system, that resource 
need has not always been communicated to Congress in a 
transparent manner. In a September 2006 Report to Congress, GAO 
found that VA's budget request was constricted by ``* * * 
guidance published by OMB that outlined the President's budget 
priorities * * *.'' This ``guidance'' set targets for the level 
of resources that VA could anticipate OMB approving based upon 
prior year budgets, not based upon the Model's estimates of 
projected costs. GAO further reported that:

        VA officials stated that differences between projected 
        costs and anticipated resources in budget requests for 
        those years were addressed in two ways: (1) cost-saving 
        policy proposals and (2) management efficiency savings.

    Congress rejected the cost-saving policy proposals in each 
of the years they were proposed, even though the 
Administration's budget requests assumed Congress would enact 
them. With Congress's rejection of these proposals, sufficient 
appropriations were required to make up the difference in what 
the Model suggested was the VA health care system's resource 
need and the target set by OMB. Furthermore, in a February 2006 
report, GAO found that VA lacked a methodology for making 
``management efficiency'' assumptions and, therefore, was 
unable to provide support for those estimates. The combined 
effect of assuming Congressional enactment of cost-saving 
proposals and relying on cost savings from unspecified 
management efficiencies rendered the true resource needs of the 
system, as estimated by the Model, more difficult to determine.
    In addition, cost savings from policy proposals thought 
achievable by the Administration itself also turned out to be 
problematic. In a September 2006 Report to Congress reviewing 
the budget shortfalls of 2005, GAO found that although:

        * * * VA used an actuarial model to project demand and 
        costs for about 86 percent of its medical programs 
        budget estimate for fiscal years 2005 and 2006 * * *. 
        Unrealistic assumptions, errors in estimation, and 
        insufficient data were key factors in VA's budget 
        formulation process that contributed to the requests 
        for additional funding for fiscal years 2005 and 2006.

    GAO found that VA unrealistically estimated how quickly VA 
could execute a proposal to reduce its long-term care bed 
capacity, and that it erred in estimating savings derived from 
this proposal. Finally, GAO faulted VA for having insufficient 
data to accurately forecast the number of unique users of the 
health care system, such as recently returning Iraq and 
Afghanistan veterans. These errors, coupled with those noted 
above, hastened the call by Congress and veterans' advocates 
for greater transparency in VA's budget submissions.
    The Committee believes that if the Model's output and 
forecasts, along with other data VA uses to forecast its 
resource needs, had been available for Congress to review 
during those years, it would have been apparent that prior 
budget requests were built upon unrealistic assumptions about 
policy proposals and savings. Furthermore, had there been an 
independent, expert review of the Model and its forecasts, the 
``errors in estimation'' and ``insufficient data'' identified 
by GAO could have been discovered before the budget and 
appropriations process had been completed.
    The Committee has reviewed the Model and despite some of 
its inherent weaknesses, finds it to be the most accurate 
methodology available today for estimating VA's medical care 
budget requirements. A 2008 Rand Corporation report 
commissioned by VA to study the Enrollee Health Care Projection 
Model (referred to as ``EHCPM'' by Rand) concluded that, ``* * 
* the EHCPM is likely to be valid for short-term budget 
planning * * * [and] * * * represents a substantial improvement 
over the budgeting methodologies used by the VA in the past * * 
*.''
    Rand provided a number of suggestions on how to improve the 
Model's validity and accuracy, particularly in how VA forecasts 
unmet demand caused by constraints resulting from VA's current 
infrastructure. The Committee expects that VA will review the 
Rand recommendations, implement those which it adjudges to be 
improvements, and report to Congress on how these changes will 
increase accuracy in its budget forecasting.
    The Committee notes that the Model is constructed of 
current and past data about veterans enrollment, utilization 
rates and health care costs, combined with expert assumptions 
about how those factors will change in the future under a 
current policy environment. In essence, the Model establishes a 
baseline for VA's future resource requirements; proposed 
changes in VA health care rules, regulations or laws, whether 
by the Administration or Congress, will require adjustments to 
those estimates.
    The Committee believes that the best way to ensure that 
Congress can accurately measure the effect of proposed policy 
changes by VA, and thereby provide more accurate appropriations 
levels to meet VA's resource requirements, is by allowing 
Congress to view the Model's data and estimates. The Committee 
recognizes that the Model relies in part upon proprietary 
information owned by Milliman and does not seek to impinge upon 
Milliman's intellectual property. The intent of the Committee 
is to provide transparencyto the data, assumptions, and 
estimates that are the inputs and outputs of the Model, not to 
unnecessarily expose proprietary elements of the Model. Given the 
complexity of the Model, the Committee believes that a certain level of 
actuarial expertise is required to assess the integrity of the Model 
process, and that GAO is the most appropriate Federal agency to 
undertake this role by virtue of its existing accounting, budget, and 
health care policy expertise, as well as its overall mission.
    Committee Bill. Section 4(a) of the Committee bill, in a 
freestanding provision, would require the Comptroller General 
of the United States, the head of GAO, to conduct a study of 
the adequacy and accuracy of the budget projections made by the 
Enrollee Health Care Projection Model and any other model or 
methodology used to measure health care expenditures of VA. The 
study would cover the five fiscal years included in each budget 
submission; however, the focus is intended to be upon the 
fiscal year for which the advance appropriation would be made. 
The study is intended to provide the basis for the reports 
required by section 4(b) of the Committee bill.
    In requiring GAO to study VA's Model, the Committee's 
intent is to provide an independent and expert review of the 
Model that would be useful in identifying ways to improve the 
accuracy of VA's budget estimates. Because the Model estimates 
approximately 90% of the resource requirements that make up 
VA's three medical care accounts, GAO would also review the 
other models or methodologies used to estimate the remaining 
10%, which include the Civilian Health and Medical Program of 
VA, long-term care, Vet Centers, and the State Veterans Home 
per diem program.
    Committee Bill. Section 4(b) of the Committee bill, in a 
freestanding provision, would set out a requirement for GAO to 
submit reports no later than the date of each year in 2011, 
2012, and 2013 on which the President submits the budget 
request for the following fiscal year. GAO would be required to 
submit such reports to both the appropriate committees of 
Congress--Budget, Appropriations, and Veterans Affairs--and the 
Secretary of Veterans Affairs.
    Each report would be required to include a statement of 
whether the amount requested in the President's budget for VA's 
health care expenditures in each fiscal year is consistent with 
what GAO estimates would be required based upon what the Model 
projects. The Committee expects that each report will include a 
detailed explanation for how GAO arrived at its estimates, 
along with any additional recommendations to improve the 
process.
    The study and reports required in Section 4 are intended to 
provide Congress with new tools and information to more 
accurately estimate appropriation levels that are sufficient to 
meet the health care needs of veterans, during the timeframe in 
which budget and appropriations decisions are made by Congress. 
The reports would provide Congress with an assessment of 
whether the Model's resource requirement estimates have been 
transmitted accurately in VA's budget request, and help 
Congress understand how those estimates have been impacted by 
policy proposals contained in, or assumed within, the budget 
submission. These GAO reports are intended to provide an 
assessment of the integrity of the process, as well as to 
provide an independent analysis of how the process could be 
improved.
    The Committee expects that GAO have timely access to VA's 
Model process, including how data is gathered and transmitted, 
how assumptions are made, how the Model is run, and how the 
Model's outputs are presented to Congress in the budget 
submission. The Committee anticipates that GAO would require 
access to the Model and VA's budget preparation process 
throughout each of the study years so their reports could be 
provide concurrently with the budget submission to Congress.
    The Committee bill also requires that the GAO's reports be 
made available to the public at the same time they are 
transmitted to Congress. Transparency in the development of 
VA's health care budget will allow veterans, veterans' 
organizations, and the general public to have greater 
confidence that sufficient funding is being provided to meet 
the health care needs of veterans. With this additional 
transparency, the Committee anticipates that veterans' 
organizations and other interested parties will be able to 
undertake independent reviews of the VA health care budget 
formulation process to aid Congress' deliberations.

                             Cost Estimate

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate, the Committee based on 
information supplied by the CBO, estimates that enactment of 
the Committee bill would, relative to current law, cost $175 
billion over the 2010-2014 period, assuming appropriation of 
the necessary amounts. Enacting the bill would not affect 
direct spending or revenues. Enactment of the Committee bill 
would not affect receipts and would not affect the budget of 
state, local or tribal governments.
    The cost estimate provided by CBO, setting forth a detailed 
breakdown of costs, follows:

                               Congressional Budget Office,
                                     Washington, DC, June 17, 2009.
Hon. Daniel K. Akaka,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S.423, the Veterans 
Health Care Budget Reform and Transparency Act of 2009.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sunita 
D'Monte.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                          Director.

  Enclosure

S.423, Veterans Health Care Budget Reform and Transparency Act of 2009

    Summary: S.423 would authorize appropriations for certain 
programs within the Department of Veterans Affairs (VA). CBO 
estimates that implementing the bill would cost $175 billion 
over the 2010-2014 period, assuming appropriation of the 
necessary amounts. Enacting the bill would not affect direct 
spending or revenues.
    S.423 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S.423 is shown in the following table. The 
costs of this legislation fall within budget function 700 
(veterans benefits and services).
    Basis of estimate: For this estimate, CBO assumes that the 
specified and estimated authorizations will be appropriated 
near the start of each fiscal year beginning with 2011, and 
that outlays will follow historical patterns for similar and 
existing programs.

----------------------------------------------------------------------------------------------------------------
                                                            By fiscal year, in millions of dollars--
                                               -----------------------------------------------------------------
                                                   2010       2011       2012       2013       2014    2010-2014
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Medical Services
  Estimated Authorization Level...............          0     34,715     35,333     35,925     36,727    142,700
  Estimated Outlays...........................          0     30,548     34,529     35,595     36,429    137,101
Medical Facilities
  Estimated Authorization Level...............          0      5,198      5,258      5,316      5,398     21,170
  Estimated Outlays...........................          0      4,025      4,773      5,095      5,322     19,215
Medical Support and Compliance
  Estimated Authorization Level...............          0      4,760      4,864      4,972      5,107     19,703
  Estimated Outlays...........................          0      4,231      4,781      4,925      5,066     19,003

    Total Changes
      Estimated Authorization Level...........          0     44,673     45,455     46,213     47,232    183,573
      Estimated Outlays.......................          0     38,804     44,083     45,615     46,817    175,319
----------------------------------------------------------------------------------------------------------------

    S.423 would authorize appropriations for three specific 
budget accounts:

     Medical Services,
     Medical Facilities, and
     Medical Support and Compliance.

    Under current law, appropriations for those budget accounts 
are provided each year. Starting in 2011 for each account 
listed above, the bill would authorize appropriations for that 
fiscal year as well as advance appropriations for the following 
fiscal year. CBO estimates that implementing the bill would 
cost $175 billion over the 2010-2014 period, assuming 
appropriation of the necessary amounts.
    CBO's estimates of the authorization of appropriations 
required under the bill are the same as projections for the 
2011-2014 period in the most recent CBO baseline, completed in 
March 2009. Those amounts are derived from the 2009 
appropriated level for each account and adjusted for 
anticipated inflation. CBO expects that those amounts would be 
sufficient to provide services at the current level. However, 
if VA were to significantly expand its health care programs--
for example, to include certain veterans with higher incomes 
who are currently ineligible--additional funding would be 
required.
    Intergovernmental and private-sector impact: S.423 contains 

no intergovernmental or private-sector mandates as defined in 
UMRA and would not affect the budgets of state, local, or 
tribal governments.
    Previous CBO estimate: On June 16, 2009, CBO transmitted a 
cost estimate for H.R.1016, the Veterans Health Care Budget 
Reform and Transparency Act of 2009, as ordered reported by the 
House Committee on Veterans' Affairs on June 10, 2009. The 
bills are similar, but H.R. 1016 would authorize appropriations 
for two additional budget accounts and CBO estimated it would 
cost almost $187 billion over the 2010-2014 period, assuming 
appropriation of the necessary amounts.
    Estimate prepared by: Federal Costs: Sunita D'Monte; Impact 
on State, Local, and Tribal Governments: Lisa Ramirez-Branum; 
Impact on the Private Sector: Elizabeth Bass.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                           Regulatory Impact

    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 S.423 would not entail any regulation of 
individuals or businesses or result in any impact on the 
personal privacy of any individuals and that the paperwork 
resulting from enactment would be minimal.

                 Tabulation of Votes Cast in Committee

    In compliance with paragraph 7 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 May 21, 2009, meeting. On that date, 
the Committee considered and ordered reported S.423, a bill to 
amend title 38, United States Code, to authorize advance 
appropriations for certain medical care accounts of the 
Department of Veterans Affairs by providing two-fiscal year 
budget authority, and for other purposes. The Committee bill 
was agreed to by a vote of 14 to 0.

----------------------------------------------------------------------------------------------------------------
                Yeas                                 Senator                                 Nays
----------------------------------------------------------------------------------------------------------------
                      X (by proxy)   Mr. Rockefeller
                                 X   Mrs. Murray
                      X (by proxy)   Mr. Sanders
                                 X   Mr. Brown
                                 X   Mr. Webb
                                 X   Mr. Tester
                                 X   Mr. Begich
                                 X   Mr. Burris
                      X (by proxy)   Mr. Specter
                                 X   Mr. Burr
                                 X   Mr. Isakson
                      X (by proxy)   Mr. Wicker
                                 X   Mr. Johanns
                                     Mr. Graham
                                 X   Mr. Akaka, Chairman
----------------------------------------------------------------------------------------------------------------
                                14   TALLY                                                                    0
----------------------------------------------------------------------------------------------------------------

                             Agency Report

    On April 22, 2009, Gerald M, Cross, MD, Principal Deputy 
Under Secretary for Health, Department of Veterans Affairs, 
appeared before the Committee and submitted testimony on 
various bills, including S.423. Excerpts of the testimony are 
reprinted below:

    STATEMENT OF GERALD M. CROSS, MD, FAAFP, PRINCIPAL DEPUTY UNDER 
          SECRETARY FOR HEALTH, DEPARTMENT OF VETERANS AFFAIRS

    S.423 would authorize advance appropriations for certain 
medical accounts of the Department by providing two-fiscal year 
budget authority. Mr. Chairman, we know that Congress and the 
Administration share the same objective--to ensure VA delivers 
timely, accessible, and high-quality care that Veterans expect 
and deserve. On April 9, 2009, the President emphasized that 
care for Veterans should never be hindered by budget delays and 
expressed support for advanced funding for Veterans' medical 
care. We believe that advanced funding will ensure that 
sufficient resources are available from the first day of the 
fiscal year so that the health care needs of Veterans can be 
provided on a timely basis. We look forward to working with 
Congress to make advanced funding for VA health care a reality.
                        Changes in Existing Law

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

                      TITLE 38. VETERANS' BENEFITS

                       PART I. GENERAL PROVISIONS

                           CHAPTER 1. GENERAL

SEC.

101. DEFINITIONS.

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113. TREATMENT OF CERTAIN PROGRAMS UNDER SEQUESTRATION PROCEDURES.

113A. TWO-FISCAL YEAR BUDGET AUTHORITY FOR CERTAIN MEDICAL CARE 
                    ACCOUNTS.

114. MULTIYEAR PROCUREMENT.

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                           CHAPTER 1. GENERAL

SEC. 101. DEFINITIONS

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SEC. 113A. TWO-FISCAL YEAR BUDGET AUTHORITY FOR CERTAIN MEDICAL CARE 
                    ACCOUNTS

    (a) In General.--Beginning with fiscal year 2011, new 
discretionary budget authority provided in an appropriations 
Act for the appropriations accounts of the Department specified 
in subsection (b) shall be made available for the fiscal year 
involved, and shall include new discretionary budget authority 
for such appropriations accounts that first become available 
for the first fiscal year after such fiscal year.
    (b) Medical Care Accounts.--The medical care accounts of 
the Department specified in this subsection are the medical 
care accounts of the Veterans Health Administration as follows:
          (1) Medical Services.
          (2) Medical Support and Compliance.
          (3) Medical Facilities.

SEC. 114. MULTIYEAR PROCUREMENT

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