VA NURSING 

HOMES

Reporting More 

Complete Data on 

Workload and 

Expenditures Could 

Enhance Oversight

Report to the Ranking Member, 

Committee on Veterans’ Affairs, House 

of Representatives

December 2013

GAO-14-89

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-89, a report to the 

Ranking Member, Committee on Veterans’ 

Affairs, House of Representatives

December 2013

VA NURSING HOMES

Reporting More Complete Data on Workload and 

Expenditures Could Enhance Oversight

Why GAO Did This Study

In fiscal year 2012, about $4.9 billion of 

VA’s $54 billion health care services 

budget was spent on nursing home 

care. To inform Congress of its 

budgeting priorities, VA prepares a 

budget justification, which is reviewed 

by OMB, that includes data on nursing 

home workload and expenditures in 

the three settings. VA also collects 

data on length of stay (long- and shortstay) and resident characteristics, 

including eligibility status, as VA is 

required to pay for mandatory 

veterans’ nursing home care and may 

pay for discretionary care as resources 

permit. These data are important for 

Congress to understand how funding is 

allocated for long- and short-stay care 

and for residents in each setting.

GAO was asked to examine VA’s 

nursing home program. Among other 

things, GAO examined (1) VA’s 

nursing home workload in each setting, 

by length of stay and resident 

characteristics; and (2) VA’s 

expenditures for nursing home care in 

each setting, by length of stay and 

resident characteristics. GAO analyzed 

VA nursing home workload and 

expenditure data, including fiscal year 

2012, by setting, length of stay, and 

resident characteristics; and 

interviewed VA officials.

What GAO Recommends

To enhance congressional oversight of 

VA’s nursing home program, GAO 

recommends that VA supplement data 

currently included in its budget 

justification with workload and 

expenditures by length of stay and 

resident characteristics. VA concurred 

with GAO’s recommendation and 

stated it will provide these data upon 

release of its fiscal year 2015 budget.

What GAO Found

In fiscal year 2012, the Department of Veterans Affairs’ (VA) nursing home 

workload—the average number of veterans receiving nursing home care per 

day—was 36,250 across all of the three nursing home settings in which VA 

provided or paid for veterans’ nursing home care. The three settings include 

Community Living Centers (CLCs), which are VA-owned and operated; 

community nursing homes with which VA contracts to provide care for veterans; 

and state veterans’ nursing homes, which are owned and operated by states. 

Over half (53 percent) of this workload was provided in state veterans’ nursing 

homes, 28 percent in CLCs, and 19 percent in community nursing homes. Nearly 

90 percent of total workload was long-stay (91 days or more for residents with 

chronic conditions), and at least 75 percent of care provided in each of VA’s 

three settings was long-stay. In addition, 62 percent of VA’s total workload was 

provided to discretionary veterans (those veterans without certain levels of 

service-connected disabilities).

In fiscal year 2012, VA spent $3.5 billion (71 percent) of its total nursing home 

expenditures on care provided in CLCs, 16 percent in state veterans’ nursing 

homes and 13 percent in community nursing homes. Seventy-five percent of total 

spending was for long-stay care, and at least 70 percent of spending in each 

setting was for long-stay care. About half of total VA spending was for 

discretionary veterans.

Percentage of VA Nursing Home Workload and Expenditures for Long-Stay Care, by Setting, 

Fiscal Year 2012

GAO found that VA does not provide nursing home workload and 

expenditure data by length of stay and resident characteristics in its 

budget justification, although the Office of Management and Budget 

(OMB) encourages agencies to provide such information to the maximum 

extent possible to justify staffing and other requirements and improve 

congressional decision making. As a result, VA does not provide 

complete information, which could hinder Congress’ budgeting and 

oversight of VA’s nursing home staffing and resource requirements.

View GAO-14-89. For more information, 

contact Vijay D’Souza at (202) 512-7114 or 

dsouzav@gao.gov.
Page i GAO-14-89 Veterans Affairs Nursing Homes

Letter 1 

Background 7

Decisions Regarding Which Nursing Home Setting Is Used to 

Provide Care Are Decentralized, and Vary Based on Multiple 

Factors 10

State Veterans’ Nursing Homes Provided Care for over Half of 

VA’s Total Nursing Home Workload, and Workload in All Three 

Settings Was Mostly Long Stay 13

Most of VA’s Nursing Home Spending Was for CLCs and Most 

Spending in All Three Settings Was for Long-Stay Care 19

Conclusions 27

Recommendation for Executive Action 27

Agency Comments and Our Evaluation 28

Appendix I Percentage of Nursing Home Workload by Network and Setting, 

Fiscal Year 2012 29

Appendix II Percentage of Nursing Home Workload by Network and Length 

of Stay, Fiscal Year 2012 30

Appendix III Percentage of Nursing Home Workload by Network and Eligibility 

Status, Fiscal Year 2012 31

Appendix IV Percentage of Nursing Home Workload by Network and Resident 

Age, Fiscal Year 2012 32

Appendix V Percentage of Nursing Home Expenditures by Network and 

Setting, Fiscal Year 2012 33

Appendix VI Percentage of Nursing Home Expenditures by Network and 

Length of Stay, Fiscal Year 2012 34

Contents
Page ii GAO-14-89 Veterans Affairs Nursing Homes

Appendix VII Percentage of Nursing Home Expenditures by Network and 

Eligibility Status, Fiscal Year 2012 35

Appendix VIII Percentage of Nursing Home Expenditures by Network and 

Resident Age, Fiscal Year 2012 36

Appendix IX Comments from the Department of Veterans Affairs 37

Appendix X GAO Contact and Staff Acknowledgments 39

Related GAO Products 40

Tables

Table 1: Percentage of VA Nursing Home Workload, by Setting 

and Resident Characteristics, Fiscal Year 2012 18

Table 2: Per Diem Expenditures, by Setting and Length of Stay, 

Fiscal Year 2012 21

Table 3: Composition of VA Community Living Center (CLC) 

Expenditures, Fiscal Year 2012 23

Table 4: Percentage of VA Nursing Home Expenditures by 

Resident Characteristics and Setting, Fiscal Year 2012 26

Figures

Figure 1: U.S. Veteran Population Projections, Fiscal Years 2010-

2030 10

Figure 2: Percentage of VA Nursing Home Workload by Setting, 

Fiscal Year 2012 14

Figure 3: Percentage of VA Nursing Home Workload by Long-Stay 

and Short-Stay Care, Fiscal Year 2012 15

Figure 4: Percentage of VA Nursing Home Workload by Eligibility 

Status and Age, Fiscal Year 2012 17
Page iii GAO-14-89 Veterans Affairs Nursing Homes

Figure 5: Percentage of VA Total Nursing Home Expenditures by 

Setting, Fiscal Year 2012 20

Figure 6: Percentage of VA Nursing Home Expenditures by 

Setting and Length of Stay, Fiscal Year 2012 24

Figure 7: Percentage of VA Nursing Home Expenditures by 

Eligibility Status and Age, Fiscal Year 2012 25

Abbreviations

CLC Community Living Center

OMB Office of Management and Budget

VA Department of Veterans Affairs

VHA Veterans Health Administration

VISN Veterans Integrated Service Network

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Page 1 GAO-14-89 Veterans Affairs Nursing Homes

441 G St. N.W.

Washington, DC 20548

December 20, 2013

The Honorable Michael H. Michaud

Ranking Member

Committee on Veterans’ Affairs

House of Representatives

Dear Mr. Michaud:

The Department of Veterans Affairs (VA) operates one of the largest 

health care delivery systems in the nation. In fiscal year 2012, VA served 

more than 6.3 million individuals through 21 health care networks at a 

total cost of nearly $54 billion.1 Of this, about $6.3 billion was spent on 

long-term care, including institutional long-term care provided in nursing 

homes, and noninstitutional long-term care provided in community 

settings. Most of VA’s spending on long-term care was for nursing home 

care, which accounted for about 9 percent of total VA health care 

spending in fiscal year 2012.2 Nursing home care and long-term care 

overall are particularly important to VA, in part, because the proportion of 

the veteran population 65 and older—a vulnerable population that is the 

primary user of such care—is much larger than the proportion of 

individuals 65 and older in the general population. In fiscal year 2011, just 

over 40 percent of the veteran population was age 65 or older, compared 

to about 13 percent of the general population.3

 

1

VA’s national health care system consists of regional health care networks known as 

Veterans Integrated Service Networks (VISN). These networks have budget and 

management responsibilities that include allocating budgetary resources for and 

managing their VA nursing home care programs.

In addition, long-term care 

services are necessary for some younger veterans.

2

The proportion of VA long-term care resources spent on nursing homes—over 

75 percent—is similar to that spent for nursing home care more generally. The 

Congressional Budget Office estimated that, of the $191 billion spent on long-term care 

services in 2011, about $134 billion (70 percent) was spent on institutional care provided 

in skilled nursing facilities and nursing homes. See Congressional Budget Office: Rising 

Demand for Long-Term Services and Supports for Elderly People (Washington D.C.: June 

2013). 

3

See VA National Center for Veterans Analysis and Statistics, Projected Veterans 

Population 2010 to 2040, and U.S. Census Bureau, 2011 American Community Survey 

1-year estimates. 
 

Page 2 GAO-14-89 Veterans Affairs Nursing Homes

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

VA provides nursing home care in VA-owned and operated nursing 

homes known as Community Living Centers (CLC). VA also pays for care 

provided to veterans in community nursing homes, with which VA 

contracts to provide care to veterans. In addition, VA pays for all or part of 

the cost of care for veterans in state veterans’ nursing homes, which are 

owned and operated by states.4

VA provides nursing home services to veterans depending, in part, on 

their eligibility status—that is, whether the veteran is receiving care on a 

mandatory or discretionary basis. VA is required by law to provide nursing 

home care for two categories of veterans, known as mandatory veterans: 

(1) veterans who need nursing home care because of a serviceconnected disability,

VA’s nursing home care is broadly 

defined by length of stay—long- and short-stay care. Long-stay care, 

which lasts for 91 days or more, is provided to residents who cannot be 

cared for at home because of severe chronic physical or mental 

limitations. Short-stay care, which lasts 90 days or less, includes more 

resource-intensive services, such as postacute care needed for residents 

recuperating from a stroke or hip replacement.

5 i.e., a condition related to their military service; and 

(2) veterans who need nursing home care and who also have a serviceconnected disability rated at 70 percent or greater.6 Additionally, VA may 

provide nursing home care to eligible veterans on a discretionary basis as 

capacity and resources permit.7

 

4

In addition to paying for all or some of the cost of care for eligible veterans, VA is 

generally authorized to pay up to 65 percent of the costs of construction of state veterans’ 

nursing homes.

5

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

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

to the extent of their disability. These classifications are expressed in terms of 

percentages—for example, the most severely disabled veteran would be rated as having a 

service-connected disability of 100 percent. Percentages are assigned in increments of 

10 percent.

6

See 38 U.S.C. § 1710A (a), (d). Unless reauthorized by Congress, this provision will 

terminate on December 31, 2013. VA officials also informed us that mandatory veterans 

also include veterans who have a service-connected disability rating of total disability 

based on individual unemployability. Although this group is not listed specifically in 

legislation, VA officials told us that these veterans are, by definition, included in the 

categories of veterans for whom VA is required by law to pay the full cost of nursing home 

care.

7

See 38 U.S.C. § 1710 (a). 
 

Page 3 GAO-14-89 Veterans Affairs Nursing Homes

We previously found that VA did not collect data on veterans’ eligibility 

status and length of stay for all three nursing home settings. Specifically, 

in 2004, we found that VA lacked such data for community nursing homes 

and state veterans’ nursing homes, and concluded that gaps in VA data 

impeded VA’s oversight of its nursing home program.8 In addition, in 

2006, we found that VA did not compile information on key characteristics 

of nursing home residents—including age and eligibility status—and that 

VA needed this information to plan for nursing home care.9

Nursing home care is funded as part of VA’s overall annual appropriation 

for health care services, and VA makes available resources for nursing 

home care in the context of competing demands for health services 

based on the fixed amount of appropriated funds. Although VA is required 

to provide nursing home care for mandatory veterans, it has considerable 

control over the amount the agency allocates for discretionary nursing 

home care. VA prepares an annual budget justification for Congress in 

support of the President’s budget request. The budget justification 

provides Congress with information on what VA plans to achieve with the 

resources requested for nursing home care and other health care 

services. In its budget justification, VA reports on workload and 

expenditures for nursing home care and other health care services. For 

nursing home workload, VA reports average daily census (the average 

number of veterans in nursing home beds on any given day of the year) in 

each nursing home setting. VA reports expenditures in terms of total 

expenditures and per diem expenditures (average daily expenditures per 

resident) in each nursing home setting.

We 

recommended that VA collect and report on these measures to improve 

on the completeness of data needed for VA’s oversight. VA implemented 

these recommendations and now has such data for planning and 

budgetary purposes.

10

 

8

GAO, VA Long-Term Care: Oversight of Nursing Home Program Impeded by Data Gaps, 

VA’s budget justification is 

reviewed by the Office of Management and Budget (OMB), which 

GAO-05-65 (Washington, D.C.: Nov.10, 2004).

9

VA Long-Term Care: Data Gaps Impede Strategic Planning for and Oversight of State 

Veterans’ Nursing Homes, GAO-06-264 (Washington, D.C.: Mar.31, 2006).

10In this report, we use the term expenditures to refer to obligations, which VA reports in 

its budget justification. Obligations refer to a definite commitment creating a legal liability 

to make payments immediately or in the future. An obligation is incurred, for example, 

when an agency awards a contract to a private entity. 
 

Page 4 GAO-14-89 Veterans Affairs Nursing Homes

encourages agencies to provide information on workload and unit costs, 

such as per diem expenditures, in budget justifications to the maximum 

extent possible to justify staffing and other requirements.11 OMB states in 

guidance to agencies that providing more detailed information on federal 

programs and spending can improve congressional decision making.12 As 

a result, VA nursing home workload and expenditure data are important 

to Congress in providing oversight of budgeting and health care services, 

and understanding how the budget they approve is allocated for nursing 

home care by length of stay, mandatory and discretionary veterans, and 

age. In recent years, we have identified weaknesses regarding VA’s 

inclusion and presentation of health care information in its budget 

justification, including nursing home care, and made recommendations to 

improve the information included and how it is presented.13

You asked us to conduct a review of VA’s nursing home care provided in 

the three settings to better understand differences in spending and the 

type of care provided in each setting. In this report we examine: (1) the 

factors considered in deciding the nursing home setting in which veterans 

receive care; (2) VA’s nursing home workload in each setting, by length of 

stay and resident characteristics; and (3) VA’s expenditures for nursing 

home care in each setting, by length of stay and resident characteristics.

To examine the factors considered in deciding the nursing home setting in 

which veterans receive VA care, we interviewed officials in the Veterans 

Health Administration’s (VHA)14

 

11OMB Circular A-11, Section 51, Basic Justification Materials (Washington, D.C.: Jul. 26, 

2013). 

Office of Geriatrics and Extended Care, 

which oversees CLCs and the community nursing home program, and 

officials from VHA’s Chief Business Office, which has financial oversight 

of the state veterans’ nursing home program, including oversight of 

veterans’ eligibility for VA-funded nursing home care, and the amount 

12OMB Circular A-11, Section 200, Overview of the Federal Performance Framework

(Washington, D.C.: Jul. 26, 2013).

13See GAO, VA Health Care: Long-Term Care Strategic Planning and Budgeting Need 

Improvement, GAO-09-145 (Washington, D.C.: Jan. 23, 2009); and GAO, Veterans’ 

Health Care Budget: Improvements Made, but Additional Actions Needed to Address 

Problems Related to Estimates Supporting President’s Request, GAO-13-715

(Washington, D.C.: Aug. 8, 2013).

14VHA administers VA’s health care system.
 

Page 5 GAO-14-89 Veterans Affairs Nursing Homes

paid by VA for these veterans. We discussed with these officials how the 

nursing home settings differ in terms of their organizational structure and 

the types of services typically offered at each setting. We also discussed 

VA’s process for referring veterans for nursing home care, and the factors 

considered in deciding which nursing home setting will be used to provide 

care for eligible veterans. We reviewed relevant laws, regulations, and VA 

policies and procedures regarding the provision of nursing home care to 

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

homes.

To examine nursing home workload in each of VA’s three nursing home 

settings, we analyzed data provided by VA on average daily census for 

fiscal years 2010–2012, the most recent data available at the time of our 

analysis, at the national level for each setting, and for each of the 

21 networks.15 We analyzed average daily census by length of stay (short 

and long stays) and by resident characteristics—age and eligibility 

status—at the national level and for each of the 21 networks.16 We also 

assessed the extent to which VA reported nursing home workload data in 

its budget justification to Congress to the maximum extent possible to 

justify staffing and other requirements, as encouraged by OMB.17

To examine VA expenditures for nursing home care, we analyzed 

expenditure data provided by VA for each of the three nursing home 

settings from fiscal years 2010–2012, the most recent data available at 

the time of our analysis, at the national level and for each of the 21 

networks.

In 

addition, we interviewed VA officials from the Office of Analytics and 

Business Intelligence, which is responsible for program analysis and 

reporting.

18

 

15We use average daily census as our workload measure in this report because it is the 

workload measure that VA uses in its budget justification when reporting on nursing home 

care.

 We analyzed expenditure data by length of stay and resident 

16Data on certain resident characteristics were missing for a small percentage of workload 

data for state veterans’ nursing homes in fiscal year 2012—specifically, 7 percent of data 

on eligibility status, and 3 percent of data on age, were missing for state veterans’ nursing 

homes. Across all settings combined, this resulted in eligibility status missing for 

4 percent, and age missing for 2 percent, of the workload data for fiscal year 2012.

17OMB Circular A-11, Section 51, Basic Justification Materials.

18Our analysis showed that workload and expenditure trends were generally consistent 

over the 3-year period, therefore, we focused our review on fiscal year 2012 data.
 

Page 6 GAO-14-89 Veterans Affairs Nursing Homes

characteristics at the national level and for each of the 21 networks.19 We 

also assessed the extent to which VA reported nursing home expenditure 

data in its budget justification to Congress to the maximum extent 

possible to justify staffing and other requirements.20

To assess the reliability of VA’s workload and expenditure data we took 

several steps. We compared the data to the data contained in VA’s 

annual budget justification.

In addition to the 

officials noted above, we interviewed officials from VHA’s Office of 

Finance, which is responsible, in part, for developing VA budget 

estimates.

21

We conducted this performance audit from May 2013 to December 2013 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

We also reviewed available documentation 

on the underlying data systems that VA used to generate the data. 

Additionally, we discussed with VA officials the methodology used to 

generate the data, and the comparability of the data across the three 

nursing home settings. We also conducted internal checks for logic and 

consistency of the data by comparing workload and expenditure data 

(broken out by length of stay and resident characteristics in each setting) 

to total workload and expenditures in each setting. We discussed and 

resolved any discrepancies we found with VA officials. We found the data 

reliable for the purposes of our engagement.

 

19Similar to workload data, data on certain resident characteristics were missing for a 

small percentage of expenditure data for state veterans’ nursing homes in fiscal year 

2012—specifically, 6 percent of data on eligibility status, and 3 percent of data on age, 

were missing for state veterans’ nursing homes. Across all settings combined, this 

resulted in eligibility status missing for 1 percent, and age missing for less than 1 percent, 

of the expenditure data for fiscal year 2012.

20OMB Circular A-11, Section 51, Basic Justification Materials.

21The proportions of workload accounted for by each nursing home setting are generally 

consistent with the workload data that VA publishes in its annual budget justification.
 

Page 7 GAO-14-89 Veterans Affairs Nursing Homes

Nationwide, VA provides or pays for veterans’ nursing home care in three 

settings: CLCs, community nursing homes, and state veterans’ nursing 

homes.22

VA provides nursing home care to veterans in 134 CLCs nationwide. 

CLCs are typically within or in close proximity to VA medical centers. VA 

requires CLCs to meet The Joint Commission’s long-term care 

standards.

These settings vary in terms of their characteristics, as well as 

the cost of care that is covered for eligible veterans.

23

In addition, VA contracts with approximately 2,500 community nursing 

homes to provide nursing home care to veterans. To participate in VA’s 

nursing home program, community nursing homes generally must meet 

certain VA standards, including being state licensed and certified to 

participate in Medicare or Medicaid,

VA covers the full cost of care provided to mandatory 

veterans in CLCs, while discretionary veterans may be required to pay a 

copayment depending on their income or other factors.

24 and meet VA’s own minimum care 

standards. VA also requires VA health care facilities to evaluate 

community nursing homes prior to contract award, and annually at 

renewal to ensure they are compliant with state and federal requirements, 

and are continuing to provide veterans an acceptable standard of care. 

VA pays community nursing homes per diem rates that are tiered based 

on the intensity of resources required to provide care.25

 

22Most veterans do not receive their nursing home care from the VA program but instead 

receive it from other providers. For veterans who do not receive their nursing home care 

from the VA program, care is financed by programs such as Medicaid, Medicare, private 

health or long-term care insurance, or out-of-pocket spending by the residents.

The homes may 

not bill any other payer for nursing home care provided to veterans. VA 

23See Veterans Health Administration Handbook 1142.01, Criteria and Standards for VA 

Community Living Centers (Aug. 13, 2008). The Joint Commission is an independent 

organization that accredits and certifies health care organizations and programs in the 

United States.

24Medicare is the federal health insurance program for people age 65 and older, 

individuals under age 65 with certain disabilities, and individuals diagnosed with end-stage 

renal disease. Medicaid is a federal-state program that provides health care coverage to 

certain categories of low-income individuals.

25VA generally determines its per diem rates to community nursing homes in part by using 

Resource Utilization Groups to classify residents based on their treatment needs and the 

resources needed to provide that care. The eight groups used by VA include residents 

who are clinically complex, with behavioral and cognitive performance issues, and those 

with reduced physical functioning. 

Background
 

Page 8 GAO-14-89 Veterans Affairs Nursing Homes

pays for the full cost of care for mandatory veterans, while discretionary 

veterans may be subject to a similar copayment as in CLCs depending on 

their income or other factors. However, VA is generally restricted by law 

from paying for more than 6 months of care for discretionary veterans.26

VA also pays for all or part of veterans’ care in 140 state veterans’ 

nursing homes nationwide. For state veterans’ nursing homes, VA pays at 

least a portion of the cost of providing nursing home care for eligible 

veterans in these homes, but does not control the admission process. 

Veterans are admitted based on eligibility criteria as established by state 

requirements. For state veterans’ nursing homes to participate in VA’s 

program, however, VA generally requires that at least 75 percent of the 

residents be veterans.

These veterans must therefore have other sources of payment, and, 

according to VA officials, most long-stay residents may enroll in Medicaid, 

have private long-term care insurance, or pay for care through out-ofpocket spending.

27 In addition, VA requires state veterans’ nursing 

homes to be certified by VA annually, and ensures compliance with its 

standards through surveys and audits.28 Each fiscal year, VA establishes 

the per diem rates paid to state veterans’ nursing homes for care 

provided to veterans. For mandatory veterans, VA pays a higher per diem 

that covers the full cost of care, including medications.29

 

26Nursing home care can be extended beyond the 6 months in certain limited 

circumstances, such as for a period up to 45 days when the need for care continues to 

exist and the veteran’s eligibility for a public assistance program has been temporarily 

delayed. See 38 U.S.C. § 1720, 38 C.F.R. § 17.60.

For discretionary 

veterans, VA pays the lesser of the basic per diem established by VA or 

27The percentage of the facility residents eligible for care in state veterans’ nursing homes 

must be at least 75 percent veterans; however, if the facility was constructed or renovated 

solely with non-VA funds the veteran percentage need only be more than 50 percent.

28About two-thirds of state veterans’ nursing homes participating in VA’s nursing home 

program are also Medicare- or Medicaid-certified. 

29VA is required by law to enter into either contracts or provider agreements with state 

veterans’ nursing homes to pay for mandatory veterans’ care. Under contract, VA pays 

state veterans’ nursing homes either a negotiated rate or, upon request by homes that 

were serving veterans as of August 2012, a rate based on reimbursement levels in effect 

at that time. Under provider agreements, VA pays state veterans’ nursing homes using a 

formula identified in federal regulations that reflects prevailing rates payable in the homes’ 

respective geographic locations. See 38 C.F.R. § 51.41.
 

Page 9 GAO-14-89 Veterans Affairs Nursing Homes

one-half of the total daily cost of care.30

While veterans of all ages may need VA nursing home care, the need for 

such care increases with age because elderly veterans are more likely to 

have functional or cognitive limitations that indicate a need for nursing 

home care.

However, unlike community 

nursing homes, there is no restriction on the number of days for which VA 

may pay for care for discretionary veterans in state veterans’ nursing 

homes. As part of VA’s support and oversight of state veterans’ nursing 

homes, VA medical centers of jurisdiction process and approve per diem 

reimbursements for the state veterans’ nursing homes located in their 

geographic areas. In addition to paying some or all of the cost of 

providing nursing home care to veterans, VA supports state veterans’ 

nursing homes by awarding grants to states for construction or renovation 

of facilities. These grants are awarded following VA’s review and approval 

of proposals submitted by state officials. In addition to per diem payments 

and construction grants from VA, state veterans’ nursing homes may 

receive payments from a number of different sources, including Medicare 

and Medicaid.

31

 

30See 38 C.F.R. § 51.40. Federal regulations define the basic per diem as the lesser of (i) 

half of the cost of care for each day the veteran is in the facility or (ii) the basic per diem 

rate for the fiscal year established by VA.

The overall number of elderly veterans is projected to peak 

in 2014 and decline thereafter (see fig. 1). However, the percentage of 

elderly veterans is expected to remain relatively unchanged due to a 

decline in the overall veteran population. Although the need for VA 

nursing home care remains, for over a decade VA has highlighted the 

potential benefits of providing veterans with alternative options for longterm care—specifically, less costly home and community-based care—in 

an effort to lessen the need for more costly nursing home care. For 

example, in its 2014 budget justification, VA proposed legislation that 

would authorize VA to pay for care in VA-approved medical foster homes 

for veterans who would otherwise need nursing home care.

31Functional limitations are physical problems that limit a person’s ability to perform 

routine daily activities, such as eating, bathing, dressing, paying bills, and preparing 

meals. Cognitive limitations are losses in mental acuity that may also restrict a person’s 

ability to perform such activities. Institutionalization in a nursing home is more common at 

older ages—in 2010, about 1 in 8 people age 85 or older resided in institutions, compared 

with 1 percent of people ages 65 to 74. See Congressional Budget Office: Rising Demand 

for Long-Term Services and Supports for Elderly People (Washington D.C.: June 2013).
 

Page 10 GAO-14-89 Veterans Affairs Nursing Homes

Figure 1: U.S. Veteran Population Projections, Fiscal Years 2010-2030

Note: This figure includes data on all veterans 65 and older, regardless of whether they receive health 

care from VA or non-VA providers.

Decisions about the nursing home setting in which a veteran will receive 

care are decentralized to the local level because of several factors, 

including variability in the choice of available settings, the nursing home 

care services available, and admissions policies at each type of setting. In 

addition, veterans’ nursing home service needs, eligibility status, and 

preferences about the location of care are considered in deciding the 

setting to choose.

Decisions Regarding 

Which Nursing Home 

Setting Is Used to 

Provide Care Are 

Decentralized, and 

Vary Based on 

Multiple Factors
 

Page 11 GAO-14-89 Veterans Affairs Nursing Homes

VA program officials told us that the decisions as to which nursing home 

setting would be used are decentralized to the local level because they 

are dependent upon several factors including the type of setting available 

in each community, and availability varies considerably across locations. 

For example, veterans in need of nursing home care in Augusta, Maine 

who wish to stay within about a 50-mile radius may have the option of 

receiving care from several settings including 1 CLC, 12 community 

nursing homes and 2 state veterans’ nursing homes, assuming availability 

of beds and resources. However, veterans in Saginaw, Michigan wishing 

to stay within a similar radius may have the option of receiving care from 

1 CLC and 3 community nursing homes, depending on the availability of 

beds and resources, since the only 2 state veterans’ nursing homes are 

over 100 miles away.

In addition, VA officials told us that decisions about which setting is used 

are based upon veterans’ specific nursing home service needs, and 

settings varied in the type of specific services offered. For example, 

officials told us that in certain geographic areas CLCs provide certain 

services that are not available in the community, such as dementia care, 

behavioral health services, and care for ventilator-dependent residents. In 

other areas, however, officials told us that these specialized services 

might not be available in a CLC and instead might be available at a 

community nursing home. When an individual medical center has more 

than one CLC in its service area, each CLC may offer a unique set of 

services. Therefore, according to officials, the availability of different types 

of services in each nursing home setting depends largely on location.

VA officials further told us that admissions policies are generally the same 

for all CLCs, but may vary for community nursing homes and state 

veterans’ nursing homes. CLCs are required to provide care based on 

agency-wide policies; therefore, eligibility criteria and admissions policies 

are generally uniform across the country. An interdisciplinary team—

including personnel such as a registered nurse, social worker, recreation 

therapist, medical provider, dietitian, and any other discipline(s) directly 

involved in the care of the resident—at the VA medical center of 

jurisdiction determines whether the veteran has a clinical need for nursing 

home care. This determination is to be based on a comprehensive clinical 

assessment of medical, nursing and therapy needs; level of functional 

impairment; cognitive status; rehabilitation needs; and special emphasis 

care needs, such as spinal cord injury or end-of-life care. Each CLC is 

required to use a standardized instrument that is used by all Centers for 

Medicare & Medicaid Services-certified nursing homes for assessment, 

treatment planning, and documentation and evaluation of care and 

Decision Making Is 

Decentralized Due to 

Variation in Several 

Factors, Including 

Availability of Nursing 

Home Settings, Services, 

and Admissions Policies at 

Local Level
 

Page 12 GAO-14-89 Veterans Affairs Nursing Homes

services. Three key factors are considered at the time of admission: 

(1) the specific services to be provided; (2) whether the stay is short or 

long; and (3) the setting to which the resident will be discharged.

Admissions policies are generally standardized for community nursing 

homes, but may vary for state veterans’ nursing homes based on state 

requirements. Community nursing homes are required to be certified for 

participation in the Medicare and Medicaid programs, and use the same 

standardized instrument for assessment, evaluation and treatment 

planning as CLCs. VA officials told us that community nursing homes are 

required to accept all eligible veterans referred by VA, subject to 

availability of beds and required resources. State veterans’ nursing 

homes are not required to provide VA with documentation of their 

admissions policies. Since these homes are state-owned and operated 

entities they are subject to admissions and eligibility criteria that vary from 

state to state. For example, for admission, state veterans’ nursing homes 

in Alabama require the veteran to have 90 days of service, at least one 

day of which was wartime service. In contrast, state veterans’ nursing 

homes in New York require the veteran to have only 30 days of active 

service, while homes in Florida do not require any wartime service.

In addition to the type of available settings, the nursing home care 

services available, and admissions policies at each type of setting, VA 

officials told us that veterans’ eligibility status, and preferences about 

remaining close to home and family or willingness to travel to a nursing 

home setting were important considerations. For example, a discretionary 

veteran with a preference for staying close to home might be a candidate 

for admission to a community nursing home or a state veterans’ nursing 

home if a CLC was too far away. However, officials told us that because 

of the veteran’s discretionary status, he or she would be informed of VA’s 

restriction of coverage to only the first 180 days of care in the community 

nursing home, and staff would assist the veteran in obtaining Medicaid 

coverage. The veteran’s eligibility status would be less important if 

admission was made to the state veterans’ home since the restriction on 

length of coverage would not apply to this setting. However, officials 

emphasized that these considerations were made within the context of 

the availability of specific settings, specific services, and eligibility criteria 

and admissions policies across locations. Given the variability in these 

factors, veterans in two different communities with the same service 

needs, eligibility status and preferences might be admitted to different 

settings.

Veterans’ Eligibility Status 

and Location Preferences 

Also Determine the Type 

of Setting Used
 

Page 13 GAO-14-89 Veterans Affairs Nursing Homes

Of the three VA nursing home settings, state veterans’ nursing homes 

provided care for just over half of VA’s nursing home workload in fiscal 

year 2012. VA’s total nursing home workload was primarily long stay that 

year. Most of the nursing home care that VA provided or paid for in fiscal 

year 2012 was for discretionary veterans and for residents ages 65 to 

84 years old. In addition, veterans’ eligibility status and age varied by 

setting.

State veterans’ nursing homes accounted for 53 percent of the 

workload—measured by average daily census—for which VA provided or 

paid for care in fiscal year 2012. CLCs provided care for 28 percent of the 

total workload, and community nursing homes provided care for 

19 percent of the workload. (See fig. 2.) In fiscal year 2012, the most 

recent year for which data were available, state veterans’ nursing homes 

provided care to an average of 19,355 residents per day, out of the total 

average daily workload of 36,250 residents for whom VA provided or paid 

for nursing home care. This and other workload patterns we examined 

have been consistent in recent years based on VA data for fiscal years 

2010-2012.32

 

32As a result, we focus our workload analysis in this report on fiscal year 2012.

State Veterans’ 

Nursing Homes 

Provided Care for 

over Half of VA’s Total 

Nursing Home 

Workload, and 

Workload in All Three 

Settings Was Mostly 

Long Stay

State Veterans’ Nursing 

Homes Provided Care for 

over Half of VA’s Nursing 

Home Workload in Fiscal 

Year 2012
 

Page 14 GAO-14-89 Veterans Affairs Nursing Homes

Figure 2: Percentage of VA Nursing Home Workload by Setting, Fiscal Year 2012

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

veterans residing in a nursing home on any given day of the year. Average daily census is calculated 

by dividing the total number of days of nursing home care provided in a year by the number of days in 

the year. In fiscal year 2012, the average daily census was 36,250 nursing home residents—9,991 in 

VA Community Living Centers, 6,904 in community nursing homes, and 19,355 in state veterans’ 

nursing homes.

At the network level, the proportion of nursing home workload in each 

setting varied widely by network, particularly the range of workload in 

state veterans’ nursing homes compared to the other settings. For 

example, state veterans’ nursing homes comprised 74 percent of total VA 

nursing home workload in Veterans Integrated Service Network (VISN) 16 

(South Central VA Health Care Network), compared to 20 percent of the 

nursing home workload in VISN 21 (Sierra Pacific Network). (See app. I 

for more information on nursing home workload by network and setting.)

Overall, long-stay care accounted for nearly 90 percent of VA’s total 

nursing home workload in fiscal year 2012 (31,750 of the 36,250 

residents for whom VA provided or paid for care each day), and long-stay 

care accounted for at least three-quarters of all workload in each of VA’s 

three nursing home settings. (See fig. 3.) Of the three settings, state 

veterans’ nursing homes had the largest proportion of long-stay workload 

(97 percent) compared to community nursing homes (80 percent) and 

VA’s CLCs (76 percent). These patterns were consistent from fiscal year 

Workload in All Three 

Nursing Home Settings 

Was Primarily Long Stay
 

Page 15 GAO-14-89 Veterans Affairs Nursing Homes

2010 through fiscal year 2012. VA officials told us that they examine 

workload data by length of stay for planning purposes, but do not make 

these data available publicly.

Figure 3: Percentage of VA Nursing Home Workload by Long-Stay and Short-Stay 

Care, Fiscal Year 2012

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

veterans residing in a nursing home on any given day of the year. Average daily census is calculated 

by dividing the total number of days of nursing home care provided in a year by the number of days in 

the year. In fiscal year 2012, the total average daily census was 36,250 nursing home residents—

9,991 in VA Community Living Centers, 6,904 in community nursing homes, and 19,355 in state 

veterans’ nursing homes.

For all of the networks, the majority of workload was long-stay. The 

proportion of long-stay workload ranged from 80 percent to 95 percent, 

with the lowest proportion of long-stay workload in VISN 18 (VA 

Southwest Health Care Network), VISN 21 (Sierra Pacific Network), and 

VISN 22 (Desert Pacific Healthcare Network), and the highest proportion 

of long-stay workload in VISN 3 (VA New York/New Jersey Veterans 
 

Page 16 GAO-14-89 Veterans Affairs Nursing Homes

Healthcare Network). (See app. II for information on workload by network 

and length of stay.)

VA officials said that they thought long-stay care (measured by average 

daily census) accounted for a high proportion of CLC workload because 

CLCs provide a number of long-stay programs for veterans who are 

unable to access certain nursing home services in other settings. For 

example, according to VA officials, some CLCs offer specialized long-stay 

programs for residents with dementia or spinal cord injuries, and may also 

serve residents with mental or behavioral health conditions who are not 

eligible for nursing home care in other settings.

Nearly two-thirds (62 percent) of VA’s nursing home care in fiscal year 

2012 was provided to discretionary veterans, while just over one-third 

(35 percent) was provided to mandatory veterans. When examined by 

age group, nursing home residents 65 through 84 years of age comprised 

a larger proportion of the workload than other age groups, amounting to 

45 percent of VA’s nursing home workload. Residents age 85 and older 

amounted to 37 percent, and those under 65 years of age amounted to 

16 percent. (See fig. 4.)

Discretionary Veterans 

and Veterans Age 65 to 84 

Accounted for Most of VA’s 

Nursing Home Workload
 

Page 17 GAO-14-89 Veterans Affairs Nursing Homes

Figure 4: Percentage of VA Nursing Home Workload by Eligibility Status and Age, Fiscal Year 2012

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

veterans residing in a nursing home on any given day of the year. Average daily census is calculated 

by dividing the total number of days of nursing home care provided in a year by the number of days in 

the year.

At the network level, workload by resident characteristics generally 

mirrored overall patterns. Workload for most networks was largely 

discretionary, with discretionary care comprising at least half of the 

workload in 20 of VA’s 21 networks. Discretionary workload ranged from 

40 percent of total workload in VISN 21 (Sierra Pacific Network) to 

69 percent of total workload in VISN 7 (VA Southeast Network) and VISN 

3 (VA New York/New Jersey Veterans Healthcare Network). (See app. III 

for information on workload by network and eligibility status.) In addition, 

residents 65 through 84 years of age comprised similar proportions of 

workload in each network. Specifically, the proportion of workload for 

residents 65 through 84 years of age ranged from 42 percent in VISN 1 

(VA New England Healthcare System), VISN 3 (VA New York/New 

Jersey Veterans Healthcare Network), VISN 15 (VA Heartland Network), 

and VISN 21 (Sierra Pacific Network) to 50 percent in VISN 6 (VA MidAtlantic Health Care Network) and VISN 11 (Veterans in Partnership). 

(See app. IV for information on workload by network and resident age.)
 

Page 18 GAO-14-89 Veterans Affairs Nursing Homes

The proportion of nursing home workload by veterans’ eligibility status—

mandatory veterans compared to discretionary veterans—varied widely 

by setting. State veterans’ nursing homes provided the highest proportion 

of discretionary care compared to the other nursing home settings— 

84 percent of workload in state veterans’ nursing homes was for care 

provided on a discretionary basis, compared to 48 percent of workload in 

CLCs and just 18 percent in community nursing homes. Conversely, 

community nursing homes provided the highest proportion of mandatory 

care (82 percent of workload), followed by CLCs (52 percent) and state 

veterans’ nursing homes (9 percent). (See table 1.)

Table 1: Percentage of VA Nursing Home Workload, by Setting and Resident 

Characteristics, Fiscal Year 2012

Percentage of VA nursing home workload

Resident characteristics

VA Community 

Living Centers

Community 

nursing homes

State veterans’

nursing homes

Eligibility 

status 

Discretionary 48 18 84

Mandatory 52 82 9 

Total 100 100 93a

Age Under 65 27 24 8 

65-84 49 46 43

85 and older 24 30 46

Total 100 100 97b

Source: GAO analysis of Department of Veterans Affairs (VA) data.

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

veterans residing in a nursing home on any given day of the year. Average daily census is calculated 

by dividing the total number of days of nursing home care provided in a year by the number of days in 

the year.

a

Total percentage for veterans’ eligibility status in state veterans’ nursing homes does not add up to 

100 because 7 percent of data on eligibility status are missing for this setting.

b

Total percentage for veterans’ age in state veterans’ nursing homes does not add up to 100 because 

3 percent of data on age are missing for this setting.

The proportion of workload by age group also varied among the three 

settings. Of the three settings, state veterans’ nursing homes had the 

highest proportion of workload for veterans age 85 and older. State 

veterans’ nursing homes also had the smallest proportion of workload for 

residents under age 65, who constituted less than a tenth of the workload. 

CLCs and community nursing homes had about the same proportions of 

workload for each age group, and in contrast to state veterans’ nursing 

homes, they had higher proportions of workload for residents under age 

65 (27 and 24 percent of workload, respectively, compared to 8 percent).

Veterans’ Eligibility Status 

and Age Varied by Setting
 

Page 19 GAO-14-89 Veterans Affairs Nursing Homes

These patterns indicate that the characteristics of resident populations 

varied distinctly across settings. A higher proportion of workload in state 

veterans’ nursing homes was for discretionary and older veterans than in 

the other two settings. In addition, while workload in CLCs and community 

nursing homes had a similar age distribution of residents, community 

nursing homes had a higher proportion of workload for mandatory 

veterans than CLCs.

VA officials told us that, at the national level, they rely on workload data 

for planning and budgeting purposes, especially to ensure that there are 

adequate resources to serve mandatory veterans. Officials said that 

reviewing the mix of mandatory versus discretionary veterans is 

particularly important since VA is required to serve the needs of 

mandatory veterans. VA officials told us that age data are also becoming 

important because VA now has a cohort of younger residents, and VA 

needs to be attuned to these population changes to ensure the required 

services are available. However, VA does not currently publish data on 

nursing home workload disaggregated by length of stay and resident 

characteristics in its budget justification. As a result, VA is not providing 

workload data on nursing home care provided or paid for to the maximum 

extent possible as encouraged by OMB guidance to justify staffing and 

other requirements. Congressional stakeholders therefore have 

incomplete information on the type of workload (long-stay or short-stay)

being provided in each nursing home setting, as well as how settings 

differ in eligibility status and age of residents they serve. The lack of such 

information could hinder congressional budgeting and program decision 

making and oversight regarding VA’s staffing and resource requirements 

for providing nursing home care.

Just under three-quarters of VA’s total nursing home expenditures in 

fiscal year 2012 were for care provided in CLCs. In addition, per diem 

expenditures in CLCs—i.e., the average daily cost per resident—were 

significantly higher than the per diem expenditures in community nursing 

homes and state veterans’ nursing homes. Over half of VA’s nursing 

home spending was for discretionary care and nearly half of spending 

was for veterans age 65 to 84. However, spending by eligibility status and 

age cohort varied by VA nursing home setting.

Most of VA’s Nursing 

Home Spending Was 

for CLCs and Most 

Spending in All Three 

Settings Was for 

Long-Stay Care
 

Page 20 GAO-14-89 Veterans Affairs Nursing Homes

In fiscal year 2012, VA spent more for care provided in CLCs than in the 

other two settings combined. Seventy-one percent ($3.5 billion) of VA’s 

total expenditures was spent on care provided in CLCs (see fig. 5), 

although CLCs accounted for 28 percent of the total workload. 

Conversely, VA spent 16 percent (about $800 million) for nursing home 

care in state veterans’ nursing homes, although state veterans’ nursing 

homes accounted for 53 percent of VA’s nursing home workload. The 

share of VA expenditures in each setting and other expenditure patterns 

we examine below remained relatively unchanged between fiscal years 

2010-2012.33

Figure 5: Percentage of VA Total Nursing Home Expenditures by Setting, Fiscal 

Year 2012

Similar to workload, the proportion of VA nursing home expenditures 

accounted for by each setting varied widely by network. For example, 

nearly 90 percent of VA’s expenditures in VISN 5 (VA Capitol Health Care 

Network) were for care provided in CLCs, whereas in VISN 19 (Rocky 

Mountain Network) just 48 percent of expenditures were for care provided 

in CLCs. (See app. V for more information on nursing home expenditures 

by network and setting.)

 

33As a result, we focus our expenditure analysis in this report on fiscal year 2012. 

Nearly Three-Quarters of 

Total Spending Was for 

CLCs and CLC Per Diem 

Expenditures Were 

Considerably Higher than 

Per Diem Expenditures in 

Other Settings
 

Page 21 GAO-14-89 Veterans Affairs Nursing Homes

In addition to CLCs accounting for most of VA’s total nursing home 

expenditures, the per diem expenditure in CLCs was considerably higher 

than that for community nursing homes and state veterans’ nursing 

homes, as also reported in VA’s annual budget justification. Specifically, 

while the per diem expenditure across all settings in fiscal year 2012 was 

$370, the per diem expenditure in CLCs was nearly 4 times higher than 

for community nursing homes, and about 8 times higher than for state 

veterans’ nursing homes—$953 compared to $244 and $113, 

respectively.34

Table 2: Per Diem Expenditures, by Setting and Length of Stay, Fiscal Year 2012

(See table 2.) We also found that the per diem expenditure 

for CLCs was substantially higher than the per diem expenditure for 

community nursing homes and state veterans’ nursing homes, regardless 

of the resident’s length of stay. Although the short-stay per diem 

expenditure in CLCs ($1,167) was substantially more than the per diem 

expenditure for long stays ($884), both were considerably higher than the 

per diem expenditures for community nursing homes and state veterans’ 

nursing homes.

Nursing home setting All stays Short stays Long stays

VA Community Living Centers $953 $1,167 $884

Community nursing homes 244 265 239

State veterans’ nursing homesa 113 113 113

All settings $370 $732 $318

Source: GAO analysis of Department of Veterans Affairs (VA) data.

Note: The per diem expenditure is the average expenditure per resident per day (total expenditures 

divided by the total days of care).

a

VA pays state veterans’ nursing homes a per diem that is generally about one-third the total cost of 

care, and VA data show that state veterans’ nursing homes overwhelmingly serve discretionary 

veterans. VA pays the same per diem for short- and long-stay care in state veterans’ nursing homes, 

although it pays a higher per diem for mandatory veterans.

 

34The average per diem that VA paid through its community nursing home program was 

generally similar to the average national per diem for nursing home care purchased in a 

community setting. The national average per diem for a semi-private room (which is what 

VA officials told us that VA covers for veterans admitted to community nursing homes) in 

2012 was $222. See MetLife Mature Market Institute, “Market Survey of Long-Term Care 

Costs: The 2012 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day 

Services, and Home Care Costs” (New York, NY; November 2012).
 

Page 22 GAO-14-89 Veterans Affairs Nursing Homes

VA officials told us that they have not done any studies comparing the 

reasons for differences in per diem expenditures across settings because 

such expenditures are not comparable. However, VA officials provided us 

with a breakdown of the various components of total and per diem 

expenditures in CLCs. (See table 3.) VA officials indicated that “core” 

CLC expenditures, which account for about 40 percent of total CLC per 

diem expenditures, would be comparable to the care that VA pays for in 

community nursing homes and state veterans’ nursing homes. In addition 

to these core expenditures, VA’s expenditures for CLCs in fiscal year 

2012 included direct care expenditures for physicians and other medical 

personnel staffing, indirect care expenditures for education and research, 

and overhead expenditures related to VA national programs, among 

others. In particular, VA officials noted that CLCs are often located in or 

within close proximity to a VA medical center, and that the facility 

expenditures alone for CLCs are generally higher than those of 

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

generally stand-alone facilities. In fiscal year 2012, for example, the per 

diem expenditure for CLC facility costs alone was $234, roughly 

comparable to the entire per diem that VA paid for veterans to receive 

care in community nursing homes that year. VA officials also told us that 

while the amount of nursing staff in community nursing homes is similar to 

that of CLCs, the skill level may not be as high. For example, CLCs may 

hire more licensed and registered nurses due to the needs of the 

residents in CLCs. VA officials also told us that expenditures for 

emergency medical care would not be included in the community nursing 

home per diem expenditures, but that these expenditures are included for 

CLC residents. In addition, while the cost of routine medications is 

covered under the community nursing home per diem, any high-cost 

medications are not, although they are accounted for in the overall 

expenditures for operating the community nursing home program. 

Officials also noted that per diem expenditures for state veterans’ nursing 

homes only represent a portion of the total expenditures for care, with the 

remainder being paid for by the state and the veteran.
 

Page 23 GAO-14-89 Veterans Affairs Nursing Homes

Table 3: Composition of VA Community Living Center (CLC) Expenditures, Fiscal 

Year 2012

Cost category

Total 

expenditures

($ millions)

Per diem 

expenditures ($)

Direct care Core CLCa $1,363 $373

Physician 91 25

Physician extenderb 27 7 

Social worker/Psychologist 36 10

CLC rehabilitation services 36 10

Outpatient clinic use 88 24

Pharmacy 174 48

Prosthetics 23 6 

Indirect care Education 6 2 

Research 19 5 

Administrative 277 76

Facilitiesc 854 234

Overhead Capital obligations 398 109

National overhead 95 26

Total—all cost categories $3,486d $953d

Source: Department of Veterans Affairs (VA).

a

Includes services such as nursing, food delivery, hospice, and respiratory therapy.

b

Includes nurse practitioners and physician assistants.

c

Includes indirect costs that are not attributable to specific patient care, such as rent, operating and 

maintenance costs for buildings, equipment, and utilities.

d

Totals for all cost categories do not equal the sum of each of the categories due to rounding.

The majority of VA’s spending for nursing home care in fiscal year 2012—

$3.7 billion, or 75 percent—was on long-stay care. Long-stay care 

accounted for most of VA’s expenditures in each nursing home setting, 

and accounted for all but a small percentage of spending in state 

veterans’ nursing homes. (See fig. 6.) Although VA officials said they 

examine data on nursing home spending by length of stay for planning 

and budgeting purposes, VA does not include such data in its budget 

justification.

VA Spent More in All Three 

Settings on Long-Stay 

Care than Short-Stay Care
 

Page 24 GAO-14-89 Veterans Affairs Nursing Homes

Figure 6: Percentage of VA Nursing Home Expenditures by Setting and Length of 

Stay, Fiscal Year 2012

Similarly, at the network level, the majority of expenditures for all 

networks were for long-stay care. The proportion of expenditures for longstay care ranged from 62 percent for VISN 18 (VA Southwest Health Care 

Network) to 90 percent for VISN 3 (VA New York/New Jersey Veterans 

Healthcare Network). (See app. VI for information on expenditures by 

network and length of stay.)

Overall, discretionary care accounted for just over half (52 percent or 

$2.5 billion) of all VA nursing home spending—a slightly lower proportion 

than workload, of which discretionary care comprised 62 percent. Just 

under half (47 percent or $2.3 billion) was spent on care for residents 

age 65 to 84. About one-quarter was spent on residents under age 65 

and about the same percent for residents age 85 and over. (See fig. 7.)

Over Half of VA’s Nursing 

Home Spending Was for 

Discretionary Care and 

Just Under Half Was for 

Veterans Age 65 to 84
 

Page 25 GAO-14-89 Veterans Affairs Nursing Homes

Figure 7: Percentage of VA Nursing Home Expenditures by Eligibility Status and Age, Fiscal Year 2012

Note: Percentages may not add up to 100 due to rounding.

At the network level, total expenditures by eligibility status varied by 

network, with the proportion of spending for discretionary care ranging 

from 37 percent in VISN 6 (VA Mid-Atlantic Health Care Network) to 

61 percent in VISN 15 (VA Heartland Network) and VISN 23 (VA Midwest 

Health Care Network). (See app. VII for information on expenditures by 

network and eligibility status.) Spending by age group did not vary as 

substantially between networks, however. Specifically, the proportion of 

spending for residents 65 through 84 ranged from 45 percent in VISN 1 

(VA New England Healthcare System), VISN 15 (VA Heartland Network), 

and VISN 19 (Rocky Mountain Network), to 51 percent in VISN 6 (VA 

Mid-Atlantic Health Care Network). (See app. VIII for information on 

expenditures by network and resident age.)

Similar to workload, spending for discretionary care varied widely by 

setting, with state veterans’ nursing homes having the highest proportion 

of their total spending (84 percent) for discretionary care compared to the 

other two settings (50 percent in CLCs and 18 percent in community 

nursing homes). (See table 4.) Also, state veterans’ nursing homes had 

Spending by Veterans’

Eligibility Status and Age 

Varied across Settings
 

Page 26 GAO-14-89 Veterans Affairs Nursing Homes

the highest proportion (46 percent) of their total spending for residents 

age 85 and older, and the lowest proportion (8 percent) on residents 

under age 65. CLCs and community nursing homes had similar 

proportions of their total spending on care for residents in each age 

group.

Table 4: Percentage of VA Nursing Home Expenditures by Resident Characteristics 

and Setting, Fiscal Year 2012

Percentage of VA nursing home expenditures

Resident characteristics

VA Community 

Living Centers

Community 

nursing homes

State veterans’ 

nursing homes

Eligibility 

status 

Discretionary 50 18 84

Mandatory 50 82 9 

Total 100 100 93a

Age Under 65 29 25 8 

65-84 49 46 43

85 and older 22 29 46

Total 100 100 97b

Source: GAO analysis of Department of Veterans Affairs (VA) data.

a

Total percentage for spending by veterans’ eligibility status in state veterans’ nursing homes does 

not add up to 100 because 6 percent of data on eligibility status are missing for this setting, and 

because of rounding.

b

Total percentage for spending by veterans’ age in state veterans’ nursing homes does not add up to 

100 because 3 percent of data on age are missing for this setting.

Similar to workload data, VA program officials told us that they rely on 

expenditure data by length of stay and resident characteristics for 

planning and budgeting purposes. This type of analysis is important given 

the significant differences in short- and long-stay per diem expenditures, 

particularly for CLCs, as well as differences in per diems that VA pays for 

mandatory and discretionary veterans in state veterans’ nursing homes. 

In addition, according to officials, expenditure data on community nursing 

homes are especially important from a program perspective since VA 

looks at unit costs to help in rate negotiations. However, VA does not 

currently include expenditure data disaggregated by length of stay and 

resident characteristics in its budget justification, and therefore does not 

provide information on unit costs to the maximum extent possible as 

encouraged by OMB to justify staffing and other requirements. As a 

result, congressional stakeholders have incomplete information on the 

budget that is approved for VA nursing home care, including the 

proportion of expenditures that is allocated for long-stay and short-stay 

care, as well as expenditures by resident characteristics. The lack of such 
 

Page 27 GAO-14-89 Veterans Affairs Nursing Homes

information could hinder congressional budgeting and program oversight 

regarding VA’s staffing and resource requirements for providing nursing 

home care.

VA now has key data on workload and expenditures for its three nursing 

home settings that were lacking in the past, and VA officials told us that 

they use these data for budgeting and planning purposes. Our analysis of 

these data show that the nursing home care that VA provides or pays for 

is primarily for long-stay care of 90 days or more for residents with 

chronic physical and mental limitations across all three nursing home 

settings, rather than short-stay care for residents with postacute care 

needs. Most of VA’s nursing home workload is for discretionary care, 

rather than mandatory care, and more care is provided for residents 65 to 

84 years of age than for other age groups, though these patterns vary by 

setting. As VA determines budget estimates and plans for future care 

needs, these data provide a foundation for understanding the type of care 

provided, the characteristics of the residents receiving it, and differences 

among the three settings.

We believe that having and using the key workload and expenditure data 

that we analyzed in this report provides VA with more complete data to 

better inform its budget estimates and conduct program oversight than in 

the past. VA is to be commended for collecting and using the information 

to improve its decision making. However, VA only includes data on total 

nursing home workload, total expenditures, and per diem expenditures by 

the three nursing home settings in its budget justification and does not 

include workload or expenditures disaggregated by length of stay or 

resident characteristics to the maximum extent possible to justify staffing 

and other requirements. As a result, Congress does not have complete 

nursing home data on workload and expenditures by the three settings. 

The lack of such information could hinder congressional decision making 

and oversight of budgeting of VA nursing home care staffing and resource 

needs for care, which accounts for a significant portion of VA’s health 

care budget and serves a vulnerable population.

To provide more complete data for Congress, we recommend that the 

Secretary of Veterans Affairs supplement nursing home workload and 

expenditure data currently included in VA’s budget justification with the 

following information:

Conclusions

Recommendation for 

Executive Action
 

Page 28 GAO-14-89 Veterans Affairs Nursing Homes

• Average daily census by length of stay and resident characteristics, 

including veterans’ eligibility status and age.

• Total expenditures and per diem expenditures by length of stay and 

resident characteristics, including veterans’ eligibility status and age.

We provided a draft of this report to VA for comment. In its written 

comments—reproduced in appendix IX—VA concurred with our 

recommendation and stated that it will provide supplemental data on both 

nursing home workload and expenditures by length of stay and resident 

characteristics upon release of its fiscal year 2015 budget. VA stated that 

it would provide data for state veterans’ nursing homes to the extent the 

data are available.

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

and appropriate congressional committees. In addition, the report will be 

available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

Vijay D’Souza at (202) 512-7114, or dsouzav@gao.gov. Contact points 

for our Offices of Congressional Relations and Public Affairs are on the 

last page of this report. GAO staff who made major contributions to this

report are listed in appendix X.

Sincerely yours,

Vijay A. D’Souza

Acting Director, Health Care

Agency Comments 

and Our Evaluation
Appendix I: Percentage of Nursing Home 

Workload by Network and Setting, Fiscal Year 

2012

Page 29 GAO-14-89 Veterans Affairs Nursing Homes

Notes: The workload measure is the average daily census, which represents the average number of 

veterans residing in a nursing home on any given day of the year. Average daily census is calculated 

by dividing the total number of days of nursing home care provided in a year by the number of days in 

the year. Percentage totals for each VISN may not equal 100 due to rounding.

Appendix I: Percentage of Nursing Home 

Workload by Network and Setting, Fiscal 

Year 2012
Appendix II: Percentage of Nursing Home 

Workload by Network and Length of Stay, 

Fiscal Year 2012

Page 30 GAO-14-89 Veterans Affairs Nursing Homes

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

veterans residing in a nursing home on any given day of the year. Average daily census is calculated 

by dividing the total number of days of nursing home care provided in a year by the number of days in 

the year.

Appendix II: Percentage of Nursing Home 

Workload by Network and Length of Stay, 

Fiscal Year 2012
Appendix III: Percentage of Nursing Home 

Workload by Network and Eligibility Status, 

Fiscal Year 2012

Page 31 GAO-14-89 Veterans Affairs Nursing Homes

Notes: The workload measure is the average daily census, which represents the average number of 

veterans residing in a nursing home on any given day of the year. Average daily census is calculated 

by dividing the total number of days of nursing home care provided in a year by the number of days in 

the year. Percentage totals for each VISN may not equal 100 due to rounding.

Appendix III: Percentage of Nursing Home 

Workload by Network and Eligibility Status, 

Fiscal Year 2012
Appendix IV: Percentage of Nursing Home 

Workload by Network and Resident Age, Fiscal 

Year 2012

Page 32 GAO-14-89 Veterans Affairs Nursing Homes

Notes: The workload measure is the average daily census, which represents the average number of 

veterans residing in a nursing home on any given day of the year. Average daily census is calculated 

by dividing the total number of days of nursing home care provided in a year by the number of days in 

the year. Percentage totals for each VISN may not equal 100 due to rounding.

Appendix IV: Percentage of Nursing Home 

Workload by Network and Resident Age, 

Fiscal Year 2012
Appendix V: Percentage of Nursing Home 

Expenditures by Network and Setting, Fiscal 

Year 2012

Page 33 GAO-14-89 Veterans Affairs Nursing Homes

Note: Percentage totals for each VISN may not equal 100 due to rounding.

Appendix V: Percentage of Nursing Home 

Expenditures by Network and Setting, Fiscal 

Year 2012
Appendix VI: Percentage of Nursing Home 

Expenditures by Network and Length of Stay, 

Fiscal Year 2012

Page 34 GAO-14-89 Veterans Affairs Nursing Homes

Appendix VI: Percentage of Nursing Home 

Expenditures by Network and Length of Stay, 

Fiscal Year 2012
Appendix VII: Percentage of Nursing Home 

Expenditures by Network and Eligibility Status, 

Fiscal Year 2012

Page 35 GAO-14-89 Veterans Affairs Nursing Homes

Note: Percentage totals for each VISN may not equal 100 due to rounding.

Appendix VII: Percentage of Nursing Home 

Expenditures by Network and Eligibility 

Status, Fiscal Year 2012
Appendix VIII: Percentage of Nursing Home 

Expenditures by Network and Resident Age, 

Fiscal Year 2012

Page 36 GAO-14-89 Veterans Affairs Nursing Homes

Note: Percentage totals for each VISN may not equal 100 due to rounding.

Appendix VIII: Percentage of Nursing Home 

Expenditures by Network and Resident Age, 

Fiscal Year 2012
Appendix IX: Comments from the Department 

of Veterans Affairs

Page 37 GAO-14-89 Veterans Affairs Nursing Homes

Appendix IX: Comments from the 

Department of Veterans Affairs
Appendix IX: Comments from the Department 

of Veterans Affairs

Page 38 GAO-14-89 Veterans Affairs Nursing Homes
Appendix X: GAO Contact and Staff 

Acknowledgments

Page 39 GAO-14-89 Veterans Affairs Nursing Homes

Vijay D’Souza, Acting Director, Health Care, (202) 512-7114, 

dsouzav@gao.gov

In addition to the contact named above, James C. Musselwhite, Assistant 

Director; Iola D’Souza; Linda Galib; Drew Long; and Hemi Tewarson 

made key contributions to this report.

Appendix X: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments
Related GAO Products

Page 40 GAO-14-89 Veterans Affairs Nursing Homes

Veterans’ Health Care Budget: Improvements Made, but Additional 

Actions Needed to Address Problems Related to Estimates Supporting 

President’s Request, GAO-13-715 (Washington, D.C.: Aug. 8, 2013).

Veterans’ Health Care: Improvements Needed to Ensure That Budget 

Estimates Are Reliable and That Spending for Facility Maintenance Is 

Consistent with Priorities, GAO-13-220 (Washington, D.C.: Feb. 22, 

2013).

Veterans’ Health Care Budget: Better Labeling of Services and More 

Detailed Information Could Improve the Congressional Budget 

Justification, GAO-12-908 (Washington, D.C.: Sept. 18, 2012).

Veterans’ Health Care Budget Estimate: Changes Were Made in 

Developing the President’s Budget Request for Fiscal Years 2012 and 

2013, GAO-11-622 (Washington, D.C.: Jun. 14, 2011).

Veterans’ Health Care: VA Uses a Projection Model to Develop Most of 

Its Health Care Budget Estimate to Inform the President’s Budget 

Request, GAO-11-205 (Washington, D.C.: Jan. 31, 2011).

VA Health Care: Long-Term Care Strategic Planning and Budgeting Need 

Improvement, GAO-09-145 (Washington, D.C.: Jan. 23, 2009).

VA Long-Term Care: Data Gaps Impede Strategic Planning for and 

Oversight of State Veterans’ Nursing Homes, GAO-06-264 (Washington, 

D.C.: March 31, 2006).

VA Long-Term Care: Trends and Planning Challenges in Providing 

Nursing Home Care to Veterans, GAO-06-333T (Washington, D.C.: 

Jan. 9, 2006).

VA Long-Term Care: Oversight of Nursing Home Program Impeded by 

Data Gaps, GAO-05-65 (Washington, D.C.: Nov. 10, 2004).

Related GAO Products

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