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[Senate Hearing 114-270]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-270
 
        THE VETERANS CHOICE ACT_EXPLORING THE DISTANCE CRITERIA

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

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 24, 2015

                               __________

       Printed for the use of the Committee on Veterans' Affairs
       
       
       
       
       
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                     COMMITTEE ON VETERANS' AFFAIRS

                   Johnny Isakson, Georgia, Chairman
Jerry Moran, Kansas                  Richard Blumenthal, Connecticut, 
John Boozman, Arkansas                   Ranking Member
Dean Heller, Nevada                  Patty Murray, Washington
Bill Cassidy, Louisiana              Bernard Sanders, (I) Vermont
Mike Rounds, South Dakota            Sherrod Brown, Ohio
Thom Tillis, North Carolina          Jon Tester, Montana
Dan Sullivan, Alaska                 Mazie Hirono, Hawaii
                                     Joe Manchin III, West Virginia
                       Tom Bowman, Staff Director
                 John Kruse, Democratic Staff Director
                 
                 
                 
                 
                                 (II)
                                 
                                 
                                 
                 
                 
                            C O N T E N T S

                              ----------                              

                             March 24, 2015
                                SENATORS

                                                                   Page
Isakson, Hon. Johnny, Chairman, U.S. Senator from Georgia........     1
Blumenthal, Hon. Richard, Ranking Member, U.S. Senator from 
  Connecticut....................................................     2
Tillis, Hon. Thom, U.S. Senator from North Carolina..............    13
Tester, Hon. Jon, U.S. Senator from Montana......................    15
Rounds, Hon. Mike, U.S. Senator from South Dakota................    17
Moran, Hon. Jerry, U.S. Senator from Kansas......................    19
Heller, Hon. Dean, U.S. Senator from Nevada......................    21
Boozman, Hon. John, U.S. Senator from Arkansas...................    24

                               WITNESSES

Gibson, Hon. Sloan D., Deputy Secretary, U.S. Department of 
  Veterans Affairs; accompanied by James Tuchschmidt, M.D., 
  Acting Principal Deputy Under Secretary for Health.............     3
    Prepared statement...........................................     6
    Response to posthearing questions submitted by:
      Hon. Richard Blumenthal....................................    29
      Hon. Jerry Moran...........................................    32
      Hon. Mazie Hirono..........................................    38
Butler, Roscoe, Deputy Director for Health Care, The American 
  Legion.........................................................    40
    Prepared statement...........................................    41
Hegseth, Peter B., Chief Executive Officer, Concerned Veterans 
  for America....................................................    45
    Prepared statement...........................................    47
Violante, Joseph, National Legislative 
  Director, Disabled American Veterans...........................    49
    Prepared statement...........................................    50
Rausch, Bill, Political Director, Iraq and Afghanistan Veterans 
  of America.....................................................    54
    Prepared statement...........................................    56
Fuentes, Carlos, Senior Legislative Associate, Veterans of 
  Foreign Wars...................................................    58
    Prepared statement...........................................    61

                                APPENDIX

Veterans of Foreign Wars; initial report.........................    71

        THE VETERANS CHOICE ACT--EXPLORING THE DISTANCE CRITERIA

                              ----------                              

                        TUESDAY, MARCH 24, 2015

                                       U.S. Senate,
                            Committee on Veterans' Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:30 p.m., in 
room SR-418, Russell Senate Office Building, Hon. Johnny 
Isakson, Chairman of the Committee, presiding.
    Present: Senators Isakson, Moran, Boozman, Heller, Cassidy, 
Rounds, Tillis, Blumenthal, and Tester.

      OPENING STATEMENT OF HON. JOHNNY ISAKSON, CHAIRMAN, 
                   U.S. SENATOR FROM GEORGIA

    Chairman Isakson. We will call this hearing of the Senate 
Veterans' Affairs Committee together. Thanks to the Members 
that are here and thanks to our witnesses that are here.
    We are focusing today on the 40-Mile Rule. This was 
published by the notice for this hearing. I want to thank Sloan 
Gibson for being here today, and Dr. Tuchschmidt, thank you for 
coming. I also want to acknowledge the release by the Veterans 
Administration yesterday of an approach to the 40-Mile Rule in 
terms of distance to go by miles driven rather than crow-flies 
miles. It makes a lot of sense.
    What does not make a lot of sense is it took so long to 
come to that decision, but I am glad you finally did. I think 
the Committee's pressure on some of the things we talked about 
in terms of the 40-Mile Rule, in terms of the care a veteran 
needs in determining factors is something we are going to have 
to focus on. I know the care need issue is something that may 
take a statutory fix, but we are going to work with you to do 
that.
    I want to encourage you to tell Secretary McDonald that we 
acknowledged how fast the VA was able to move once they 
realized we were not going to relent, and we were going to stay 
rigid and stay committed to get the 40-Mile Rule fixed.
    There are other things we want to fix as well. The 
construction problems in Denver, we want to find out what we 
can do to make things like that not happen again. Want to see 
to it the care the veterans need is something they get. Also 
understand this: with the change in the 40-Mile Rule that you 
are proposing, which it says you are beginning to work on. I 
hope that will be a fast beginning to work on period, because 
the veterans need it.
    We understand the burn rate on the appropriated money for 
Veterans Choice will accelerate as we accelerate accessibility. 
But do not use that as an excuse not to do something. My job 
and Richard's job and the members of the Senate is to get more 
money if we need to and to find it; it is not to make excuses 
as to why we cannot do things for our veterans.
    The veterans expect us to deliver and I expect you all to 
deliver. We will do it right, we will do it right the first 
time, and we will be committed. I appreciate very much the 
Secretary's movement. We are now not talking about what we 
cannot do, but we are now talking about what we can do.
    Please understand. Do not let the burn rate be a reason you 
cannot do something. I would rather have a good problem, and 
that is the need for more money to see to it our veterans are 
being helped, than make excuses and tell a veteran who risked 
his life for us that we just cannot help him. That is just not 
right.
    With that said, I will turn it over to the Ranking Member, 
Senator Blumenthal.

  STATEMENT OF HON. RICHARD BLUMENTHAL, RANKING MEMBER, U.S. 
                    SENATOR FROM CONNECTICUT

    Senator Blumenthal. Thank you, Mr. Chairman, and thank you 
for scheduling this hearing focusing on a problem that, 
fortunately, has been greatly diminished by action from the VA. 
The rule change announced today, commendably, relies on common 
sense rather than flying crows in assessing the real life 
consequences to veterans of traveling distances to seek health 
care. The VA has responded to repeated calls--and I emphasize 
there have been repeated calls from public officials like 
myself and Chairman Isakson, the veteran service organizations, 
advocates, and the veterans themselves.
    The distance now will be measured by road mileage, not by 
some geodesic line drawn on a map. But the change in policy 
that is reflected in this decision has to be, in my view, 
applied to a variety of other areas, and focusing on VA health 
care provided outside the VA system is a very important area of 
consideration.
    There is evidence. There is real data and a factual basis 
to believe that some of the health care provided outside the VA 
system is uncoordinated, inconsistent in the way that veterans 
are advised and directed. These disconnects between the VA 
system and the outside health care system that it has an 
obligation to provide outside VA services should be provided 
seamlessly with VA services. Likewise, VA health care should be 
seamless with the Department of Defense military health care.
    So, there are disconnects now within the system that need 
to be addressed that are every bit as irrational and 
unacceptable as the 40-Mile Rule was. I hope that in this 
hearing and others, we will address those kinds of disconnects, 
inconsistencies, and other issues that need to be corrected. I 
thank the Chairman for this opportunity to speak briefly and 
look forward to your testimony. Thank you for being here.
    Chairman Isakson. As we established in our first meeting, 
we are going to have filed statements by any of our Members if 
they want to make a statement for the record. We will be glad 
to accept them, or to make one at the end of our meeting, but 
we want to go straight to our witnesses.
    Everyone knows the Honorable Sloan Gibson. Sloan is the 
Deputy Secretary to Secretary McDonald and we appreciate him 
being here. His sidekick is Dr. Tuchschmidt--is that the 
correct pronunciation--who, I understand, your job is about 
this 40-Mile Rule. Is that correct?
    Dr. Tuchschmidt. It seems so.
    Chairman Isakson. Well, we are glad that you are here. We 
want to be of service to you and we want to be of help to you. 
We want to be a seamless set of partners who make these 
solutions work for our veterans. So, I am glad that you came 
and we will accept any testimony that you have, in addition to 
what Sloan Gibson has. Sloan, it is all up to you.

       STATEMENT OF HON. SLOAN GIBSON, DEPUTY SECRETARY, 
              U.S. DEPARTMENT OF VETERANS AFFAIRS

    Mr. Gibson. Thank you, Mr. Chairman. Dr. Tuchschmidt is 
VA's interim principal Deputy Under Secretary for Health and he 
has been the lead for VHA on implementation of Choice.
    Let me start by being very clear on several points. First, 
we fully support implementing the Choice program effectively to 
provide veterans timely, quality health care while ensuring the 
best use of taxpayer resources as has been suggested here just 
very briefly.
    Second, non-VA care is critical for veterans. In 2014, we 
obligated almost $7 billion for non-VA care for veterans under 
programs other than Choice. In the first quarter of fiscal year 
2015, veterans completed almost 20 million appointments, and of 
those 20 million appointments, 3.3 million were appointments 
with non-VA providers in the community. It is about 17 percent 
of our total appointments during the first quarter. So, non-VA 
care is a fact of life in VA and it is going to continue to be 
a fact of life for us.
    Third and most importantly, we know that Choice is not 
working as well for veterans as it should work. That assessment 
is based on input from veterans, from Congress, from members, 
from non-VA care provides, from VSOs, and from our own 
employees. But it is our program and we are working hard to 
improve it. We work to quickly overcome issues as we discover 
them and to ask for your assistance in areas where we need 
help.
    Here are some of the issues that we are working on right 
now. A lot of veterans are frustrated. It has been noted the 
40-mile straight line as the crow flies criteria for 
eligibility has nothing to do with how far they actually have 
to travel. They do not understand why we measure the distance 
to the nearest VA facility even though it may not provide the 
specific care that the veteran needs.
    They do not understand why we cannot take into account the 
hardships and burdens that many face to travel to receive care. 
Or they simply just do not understand how the Choice program 
works. It is not like a health plan; it is different. And such 
confusion leads to lower use of Choice.
    That is reflected in the statistics. As of the 20th of 
March, based on the daily data that we receive from the third-
party administrators, approximately 46,000 authorizations had 
been issued for care under Choice, and 44,000 had been 
scheduled with non-VA providers.
    Here is some of what we are doing to address the problems I 
alluded to earlier. As has been mentioned, we are going to 
change the distance criteria from straight line to travel 
distance, similar to the way that we measure beneficiary travel 
payments. Our original interpretation, straight line distance, 
was made to conform with what we believed was Congress's intent 
as reflected in the conference report and as confirmed in 
meetings with Congressional staff.
    Based on feedback from veterans and members, we believe we 
need to change it. Our estimate for the impact of this change 
is that it will roughly double the number of veterans eligible 
as well as the costs associated with the 40-mile provision 
under the law, which we can talk about that further.
    Second, we want to work with Congress to find alternatives 
to measuring 40 miles to any VA medical facility regardless of 
whether the facility offers the specific care a veteran needs. 
We believe we need statutory authority and your help on this 
issue.
    We are running analyses on various options to identify 
alternatives that open the aperture to veteran eligibility for 
Choice while working within available resources and considering 
some of the longer term implications. As we have meaningful 
analysis to share in the days ahead, we will bring that to you 
for review and for discussion.
    We are also requesting your legislative assistance to 
broaden VA's flexibility in determining Choice program 
eligibility, where traveling for care may present a particular 
hardship to the veteran. To date, only 125 veterans have been 
determined eligible for Choice under the unusual or excessive 
burden due to geographical challenges provision.
    Last September, we asked that the geographical challenges 
language be amended to give the Secretary greater flexibility 
in extending Choice eligibility to veterans facing hardship or 
unusual or excessive burdens in reaching VA medical facilities. 
We believe that legislation providing that flexibility on this 
issue will enable more veterans to choose to receive care 
closer to home.
    We will continue to focus on outreach and communication 
with veterans to ensure that they understand the Choice program 
to include--we are already working to establish a recurring 
veteran survey to measure their knowledge of and experience 
with the program. We are expanding our social media engagement 
with veterans, families, and care givers about the program, 
conducting program-related town halls at VA medical facilities 
which have already begun.
    We will do a follow-on mailing to every veteran eligible 
for Choice to further clarify and explain how the program 
works. Finally, we will continue training programs for VA staff 
to help them better explain Choice to the veterans that they 
serve day in and day out inside VA facilities.
    As we work to solve veterans issues, we must also ensure 
that non-VA providers are informed about the program and how to 
best serve veterans. We know that collaborative processes with 
our third party administrators are in place, but I would 
characterize them as immature. They are not working as well as 
they need to work yet.
    Many providers are simply confused about how the Choice 
program works and that is, in many instances, not surprising 
since some of them are having to rationalize among five 
different non-VA care programs, everything from sharing 
agreements with universities to local contracts to individual 
authorizations, to PC3 to Choice. All of these are different 
channels through which--I might add ARCH to that list--channels 
through which we currently provide non-VA care to veterans that 
VA pays for.
    In many instances, these pay at different rates, and in 
almost every case, there are various authorization and payment 
mechanisms that are used to process the payments for these five 
or six different channels for non-VA care.
    We must also improve training and simplifying operations so 
that our own VA employees can best assist veterans eligible for 
the Choice program. Navigating the different types of non-VA 
care programs can be confusing and challenging for our own 
people.
    I would like to share a story from my visit last week to 
the outpatient clinic in Rochester, NY. I was there talking 
about the development of our new outpatient clinic, but we got 
into, as we always do at every medical facility I visit, a 
discussion about Choice and how it was working.
    First of all, this is an outpatient clinic that has some 
limited facilities, limited services, primarily primary care 
and mental health, and they have got quite good access numbers. 
So, when I asked about Choice, the comment was, ``Well, there 
are a lot of specialty care services that we do not offer.'' I 
said, can you explain that some more?
    The example they gave was colonoscopies. They do not do 
colonoscopies there at the outpatient clinic. They normally 
refer those colonoscopies to the VA medical facility in 
Buffalo, which is about 75 miles away. Well, it turns out that 
Buffalo is all full up. They cannot take anymore. They have 
already got a long wait list there. Basically, Buffalo sends it 
back to the outpatient clinic and says, you are going to have 
to find it elsewhere.
    Inside VA, if you do not have a clinic, an endoscopy clinic 
where you are doing colonoscopies, then you do not have a place 
to turn to to schedule it. If you cannot schedule it, then you 
cannot access the Choice program. So, what happens is in that 
case, the veteran gets referred directly to non-VA care, never 
the opportunity for Choice, because we do not offer that 
service inside the facility.
    That is part of the challenge that we have got to work 
through as an institution, reconciling these different 
alternatives, better explaining to people inside the 
organization how to make Choice available to our veterans. I 
would tell you, quite frankly, I think that is one of the 
reasons we do not see higher utilization of Choice right now. 
We will get that fixed within a matter of days.
    We will continue our outreach to VA facilities leadership 
to improve employees' understanding of Choice and to address 
lingering cultural issues that may make our staff reluctant to 
send patients into the community for care. This is not about 
our choice, it is about the veterans choice and we understand 
that.
    In April, we will be sending teams of experts, including 
staff from Health Net and TriWest to the 15 facilities in each 
of their two respective catchment areas that have long wait 
lists but low activity on Choice to do a deep dive into their 
practices to understand why we are not seeing more referrals 
into Choice. What are the business practices on the ground that 
are keeping us from seeing more activity there?
    Finally, we ask for your support to update our authorities 
to use provider agreements for purchasing non-VA medical care. 
In addition to our continuing work to improve the operation of 
Choice, this change would allow us to streamline and speed up 
how we purchase care for an individual veteran and simplify the 
burden on providers in the community.
    Mr. Chairman, we will continue to work with veterans, with 
Congress, especially with this Committee, with non-VA care 
providers, with VSOs, and our own employees to ensure the 
Choice program is working well in delivering great health care 
outcomes for veterans on a day in and day out basis. That is 
our commitment.
    We thank the Committee for the opportunity to testify and 
the opportunity to work together with you to make things better 
for all of America's veterans and we look forward to your 
questions.
    [The prepared statement of Mr. Gibson follows:]
      Prepared Statement of Hon. Sloan Gibson, Deputy Secretary, 
                  U.S. Department of Veterans Affairs
    Good afternoon, Chairman Isakson, Ranking Member Blumenthal, and 
Members of the Committee. Thank you for the opportunity to participate 
in this hearing and to discuss the Department of Veterans Affairs' (VA) 
implementation of the distance criteria in the Veterans Choice Program. 
I am accompanied today by Doctor James Tuchschmidt, Interim Principal 
Deputy Under Secretary for Health.
    The Veterans Access, Choice, and Accountability Act of 2014 (VACAA) 
is helping VA to meet the demand for Veterans health care in the short-
term. VA has put considerable focus and attention on ensuring the law 
is implemented seamlessly for Veterans, focused on creating the most 
positive experience for them. We are very appreciative of this 
temporary measure to improve access while we build capacity within the 
VA system to better serve those who rely on us for health care.
    As you are aware, the 90-day timeline to establish a new health 
plan capable of producing and distributing Veterans Choice Cards, 
determining patients' eligibility, authorizing care, coordinating care 
and managing utilization, establishing new provider agreements, 
processing complex claims, and standing up a call center was 
particularly challenging. In fact, we received overwhelming feedback 
from the marketplace about the significant challenges of meeting the 
law's aggressive timeline. Despite the timeline, VA published 
regulations and launched the Veterans Choice Program on November 5, 
2014, with a responsible, staged implementation with the goal of 
providing Veterans with the best possible care-experience, while also 
meeting our obligations to be good stewards of the Nation's tax 
dollars. By the end of January, 8.6 million Veterans Choice Cards had 
been distributed to eligible Veterans.
    The Veterans Choice Program established by section 101 of VACAA 
requires VA to expand the availability of hospital care and medical 
services for eligible Veterans through agreements with eligible non-VA 
entities and providers. It is a program unlike any other. Veterans who 
meet certain eligibility requirements are able to elect to receive care 
from eligible non-VA entities and providers through this program. What 
makes it unlike other non-VA care is the Veterans' ability to select 
from among eligible non-VA providers. Inherent in this flexibility is 
the need for VA to ensure that Veterans' health care is coordinated and 
delivered timely through seamless operations.
    As we continue to stand up the Veterans Choice Program and grow the 
number of providers delivering services to Veterans, eligible Veterans 
are continuing to receive care in the community from other existing 
non-VA programs and providers. As of March 18, 2015, 46,429 Veterans 
have received authorizations for care under the Veterans Choice 
Program, and non-VA providers have scheduled 44,461 appointments for 
care in the Program since it began in November. To put these Choice 
Program numbers in perspective, in an average month, 6.4 million 
appointments are completed in VA and 1.3 million appointments are 
completed using non-VA care programs.
                implementing the veterans choice program
    VA's goal has been, and always will be, to provide Veterans with 
timely and high-quality care with the utmost dignity, respect and 
excellence. As we have long maintained, for the Veteran who needs care 
today, VA's goal will always be to provide timely, clinically 
appropriate access to care in every case possible. However, as we have 
shared with staff for the Senate and House Committees' on Veterans 
Affairs in over 16 telephonic and in-person meetings about the 
implementation of this program that have been held between Committee 
staff and VA personnel since September 2014, users of the Choice 
Program have identified aspects of the law that are presenting 
challenges, resulting in confusion for Veterans, or not working for 
Veterans as well as they need to. We also recognize that early 
utilization of the Choice Program has not been as robust as expected. 
We have been eagerly seeking feedback on the program from all our 
stakeholders--from Veterans, Veterans Service Organizations, our 
employees, and Congress, and we are working diligently to address these 
challenges. We want to turn these challenges into opportunities to 
improve our care and services, but in some areas, we will need 
assistance from Congress and stakeholders.
Veterans Choice Program Outreach Efforts
    VA recognizes that some Veterans lack awareness or are confused by 
the Veterans Choice Program. When we initially launched the program, we 
mailed explanatory letters to over eight million Veterans. To increase 
Veterans' awareness of the program, VA will continue a comprehensive 
communications program. The Veterans Choice Program outreach efforts 
can contribute to correcting confusion about the program by building 
awareness and understanding, as well as improving public perception of 
the Veterans Choice Program as a program designed to improve Veterans' 
access to care.
    Importantly, VA has completed an outbound call campaign to those 
Veterans who were initially eligible for the Veterans Choice Program 
under the 30-day wait criterion. This outreach effort was completed to 
ensure these Veterans were aware of their eligibility for the Veterans 
Choice Program if they had not already been informed through their 
local VA medical center. All Veterans who were enrolled prior to 
August 1, 2014, and any recent Combat Veteran who enrolled after that 
date were mailed a Choice Card with an informational letter explaining 
their eligibility for the Choice Program. VA has also provided a Choice 
Program fact sheet for Veterans that can be printed locally and 
provided to the Veteran upon notification of eligibility for the Choice 
program. Additionally, VA briefed a number of external groups and 
organizations about the Choice program. These include provider groups 
as well as Veterans Service Organizations, who assist in reaching out 
to both providers and Veterans.
    To continue our outreach efforts, we recently launched a public 
service announcement for eligible Veterans, viewable at: https://
www.youtube.com/watch?v= i9nnsRlX5b8. We hope all parties will share 
the video to aid in education efforts about the Choice Program.
    In the next few weeks, we will continue our robust outreach 
strategy to help Veterans better understand their benefits under the 
Veterans Choice Program, by:

     Collaborating with VSO leadership to share newsletter 
inserts, talking points, social media content, etc. with their 
membership;
     Initiating a re-occurring survey of Veterans to gain an 
understating of their knowledge of the program (The results of this 
survey will be leveraged to identify gaps in communication and training 
among Veterans and VHA staff.);
     Developing a comprehensive social media strategy for 
Veterans and their families and caregivers;
     Placing Veteran Choice Program posters in public locations 
to increase awareness;
     Hosting town halls related to the program at the VAMCs; 
and,
     Finalizing a brochure of information that will be 
available to Veterans.
Veteran Choice Program Employee Training and Education
    We acknowledge that there are gaps in understanding the Veterans 
Choice Program and related business processes among VHA staff. This is 
leading to Veterans receiving inconsistent information and outreach 
about the program. To date, VHA has provided training through a variety 
of modalities including but not limited to, in-person training, 
webinars, virtual training, teleconference and any other means 
available. Over 25 Webinar training events have been provided on a 
variety of topics related to the Veterans Choice Program and a 
question-and-answer session has been held for each VISN and the 
facilities that fall under them. VHA is also providing specific 
training for portions of the program, for example, explanation of the 
appeal process for a grant of hardship under the Program's ``geographic 
burden section.'' All of these training opportunities are available for 
employees to download or view on the web for refresher training or if 
they were unable to attend.
    Moving forward, VA will target training for staff, tailoring the 
training needs to the type of employee delivering care to Veterans. For 
example, we will deliver additional training sessions to our clinical, 
administrative and purchased-care staff.
    In addition to schedulers, clinicians and facility management, 
``Choice Champions'' directly assist Veterans with questions about the 
Veterans Choice Program. The Choice Champion plays a key role at the 
facility level in implementing and operating the Veterans Choice 
Program. Choice Champions are specifically trained to be local subject-
matter experts on the Choice Program who can explain and advise 
Veterans, other employees, and our stakeholders on the program. There 
currently are more than 900 VHA employees from a variety of functions 
who have been named Choice Champions. Training, resources, and support 
for Choice Champions are available through the VA Pulse Choice Champion 
Community of Practice Web site as well as the VA VACAA Intranet Site. 
Ongoing monthly training calls are conducted to keep the Choice 
Champions engaged.
Refining Business Processes
    We are also focused on looking internally at the business rules and 
internal processes that govern the Choice Program. Stepping back to 
revise our own practices and focus on long-term work plans should 
create more efficient processes that will engender better and timelier 
care experiences for Veterans as well as better business relationships 
with our non-VA care partners. Managing the Choice Program effectively 
requires us to have broad visibility of data. We are refining our data 
analytics to develop more thorough management and oversight of the 
Third Party Administrators' (TPA) performance. In order to support the 
non-VA care providers that treat our Veterans, we are refining the 
oversight of payments for services provided. We are also continually 
working with the TPAs to help them develop their healthcare networks to 
support Veterans' health care needs. More broadly, following a 
legislative proposal included in the Department's Fiscal Year 2016 
President's Budget, VA requests Congressional support for updating the 
Department's authorities to use provider agreements for the purchase of 
non-VA medical care. Updating them will streamline and speed the 
business process for purchasing care for an individual Veteran when 
necessary care cannot be purchased through existing contracts or 
sharing agreements.
Eligibility for the Choice Program
    We are grateful for the transparent and close working relationship 
with Congress in implementing the Choice Program to provide Veterans 
with greater options for care. One issue that has caused much confusion 
for Veterans and stakeholders relates to the determination of a 
Veteran's eligibility based upon the distance to the nearest VA 
facility. In line with the Conference Report drafted for VACAA, VA 
implemented this provision using geodesic (straight line) distance. We 
have heard the feedback from Veterans and our stakeholders about this 
determination. This decision presents difficulty and frustration for 
some of our Veterans when this straight line test excludes Veterans who 
reside within 40 miles of a VA medical facility using a straight line 
measure but must nonetheless drive a significant distance to reach that 
facility. Additionally, this measure is not intuitive for Veterans 
because it is unlike the mileage calculations used for the beneficiary 
travel program. We are exploring options related to this provision.
    A second issue causing challenge for Veterans, is that according to 
the Choice Act, the Veteran is eligible for hospital care and medical 
services if the Veteran resides more than 40 miles from a medical 
facility of the Department, including a Community-Based Outpatient 
Clinic (CBOC), that is closest to the residence of the Veteran. This 
criterion bases eligibility on the proximity of the nearest facility, 
irrespective of the availability of the needed care at that site. VA is 
a regionalized system; so we recognize that every CBOC does not deliver 
the services needed by every Veteran. Absent a statutory change, we do 
not believe that we have the flexibility to adopt an alternative 
approach. All of these issues speak to a larger structural question--
the right balance between VA's role as a provider of care and as a 
purchaser of care. We are undertaking further careful study on this 
issue. Additionally, section 101 limits the considerations VA can take 
into account when determining if a Veteran living within 40 miles of a 
facility is eligible for the Choice Program. VA may only consider an 
``unusual or excessive burden * * * due to a geographical challenge'' 
when determining eligibility for non-VA care under this criterion. The 
Department asked in September 2014 to remove the ``geographical 
challenges'' language from VACAA in order to provide the Secretary with 
greater flexibility in providing health care for Veterans who face 
unusual or excessive burdens in reaching VA medical facilities. 
Presently, fewer than 100 Veterans have been determined eligible for 
the Choice Program because they face an unusual or excessive burden due 
to geographical challenges. While the Department is educating staff and 
Veterans about this provision, this formulation does require VA to 
adjudicate claims that are very context-specific in nature. We believe 
legislation providing greater flexibility on this issue would enable 
more Veterans to receive care closer to home.
Rationalizing All Non-VA Care Programs
    Beyond the Choice Program, VA has, for years, utilized various 
authorities and programs in order to provide care to Veterans more 
quickly and closer to home. In fact, the Department spent over $5.5 
billion on non-VA care in Fiscal Year 2014, and our partnerships with 
other health care providers enable us to deliver care to Veterans where 
and when they want it. In Fiscal Year 2014, VA completed 55.04 million 
appointments inside VA and 16.2 million appointments were completed in 
the community.
    We recognize though, that the number and different types of non-VA 
care programs and authorities are confusing to Veterans, our 
stakeholders, and our employees. Navigating these programs to determine 
the best fit for a Veteran can be challenging. The Department is 
examining our various non-VA programs to strategically view how all the 
programs fit together. We hope that this review can help us rationalize 
the ways we purchase non-VA care in order to deliver the best 
experience for the Veteran, while also efficiently using appropriated 
funds. We look forward to discussing this review and the guidance of 
the Independent Assessments conducted under section 201 and Commission 
on Care established by section 202 as they relate to VA's use of non-VA 
care.
                               conclusion
    We appreciate the authority granted by VACAA. We know that today, 
the program is not working as well for Veterans as it should, but we 
are working to overcome the challenges, and we are committed to 
providing Veterans with the best possible care-experience by 
implementing legislation effectively to deliver timely access to high-
quality care for Veterans.
    We are grateful for the transparent and close working relationship 
with Congress as we work to ensure that we are making progress in 
implementing the Choice Program. We will continue to share with the 
Committee any issues to ensure we have a common understanding of the 
implications of the Veterans Choice Program. I thank the Committee 
again for your support and assistance, and we look forward to working 
with you in making things better for all of America's Veterans.

    Chairman Isakson. Dr. Tuchschmidt, do you have anything to 
add or are you waiting to be the victim of a question or two?
    Mr. Gibson. He is going to handle all the really hard 
questions, Mr. Chairman.
    Chairman Isakson. Well, here is a hard one. In your 
testimony, you said 17.5 percent of the last quarter 
appointments in the Veterans Administration were non-VA 
appointments, right?
    Mr. Gibson. Yes, sir.
    Chairman Isakson. It is true you have the statutory 
authority to do those right now, right?
    Mr. Gibson. That is a true general statement, yes, sir.
    Chairman Isakson. And VA initiated those appointments, not 
the veteran, correct?
    Mr. Gibson. That is correct. Well----
    Chairman Isakson. Then why do you need----
    Mr. Gibson [continuing]. We initiated those appointments 
when the veteran called in for care and we were unable to 
provide the care that was needed inside the VA.
    Chairman Isakson. Then why do you need it? Why do you need 
statutory authority now if you are already giving 17.5 percent 
of the veterans coming in non-VA appointments?
    Mr. Gibson. I am going to--tough question. I am going to 
ask Jim to handle this one because he has done research into 
the specific provisions of Title 38, I am assuming, that gives 
us the authority to schedule appointments in the community.
    Chairman Isakson. Dr. Tuchschmidt.
    Dr. Tuchschmidt. Yes. I think a couple of things. I think 
one, we do not believe right now that we have the authority in 
the Choice Act, particularly as it relates to the 40-mile 
benefit, to make those decisions. So, we will need help in 
specifically, I think, addressing the geographic burden clause 
to expand the Secretary's ability to do that.
    Outside of Choice in our non-VA, normal purchase care 
environment, we have two statutory authorities that allow us to 
buy care. One of those authorities, 1703, is very specific in 
that it allows us to buy care on a episodic, infrequent basis 
where we cannot meet the specific need of a veteran.
    It is not, I am told by our general counsel, designed or 
intended to let us just go buy care for large groups of people 
or specific services. It is meant to be an infrequent solution.
    The other statutory authority that we have actually allows 
us to go buy care in pretty broad terms, but it requires us to 
essentially do FAR-based contracting, you know, to establish a 
Government contract with a provider. We do those with large 
groups, universities, large practice groups or clinics in 
areas.
    But individual providers are not going to sign a great big 
Government contract, which is part of the reason that we 
believe very strongly that we need the authority, the provider 
agreement authority that we have been talking about, so that we 
can make those individual authorizations in a much more 
effective way.
    Chairman Isakson. Well, let me tell you what we are going 
to do. I am going to get Ranking Member Blumenthal's chief of 
staff and my chief of staff in touch with you this coming week 
when the break starts, and during the 2-week break between our 
staff and your staff, we ought to be able to come up with the 
legislative language you need to authorize whatever you need.
    I think the faster we act on that, the better off. I do not 
think there is any disagreement on the Committee, is there? I 
think the faster--while we are gone, we will leave the work 
with you Sloan. When we come back, we will try to get a Senate 
Rule 14, if that is what it takes to get it on the floor and 
get it done.
    Mr. Gibson. Thank you very much.
    Chairman Isakson. Further, this is not an accusation, but a 
statement. We are where we are today because some people in the 
VA, a minority, manipulated numbers on appointments, under-
served veterans, and everything blew up. It blew up in Phoenix, 
it blew up in other places. It appears to me, if you are 
already giving non-VA care to 17.5 percent of your appointments 
that we are using an excuse--I am making a general statement 
here--as to why we are not serving the veterans under Veterans 
Choice.
    If there is a legislative impediment, let us fix it, let us 
get it done, because our intent is to see to it that veterans 
get needed services.
    Mr. Gibson. Yes.
    Chairman Isakson. Now, I am saying this as one member of 
the Senate. I am not speaking for the Committee. But if the 
financial burden to the Senate burns the money that we 
appropriate out sooner than later, that is a good problem to 
have because we are getting our veterans the care they deserve. 
We will have to find that money because we have made a promise 
to the veterans that I want to see work.
    As long as the VA is doing everything it can do to see to 
it that the veterans are not, as you said, Sloan, frustrated, 
but in fact they are pleased with the service and the 
communication they get, then I think we will all be better off.
    If Richard agrees with that, we will get our chiefs 
together with the Department. I think we can come up with that 
legislative language by the time we return in April.
    Mr. Gibson. Thank you.
    Chairman Isakson. Senator Blumenthal.
    Senator Blumenthal. Thank you, Mr. Chairman, and I do 
completely concur. I hope that we will get our staffs together 
and review not only new legislative language, but maybe 
administrative action that can be taken without legislation 
language.
    On the 40-Mile Rule, I will be very blunt. For a long time, 
folks told us, ``You need new legislation.'' We pushed back and 
said, ``No, it can be done administratively.'' And now, you 
have done it administratively. We waited a long time, and when 
I say a long time, perhaps longer than we should have and 
Congress bears some of the responsibility. But I think the more 
we can act without legislation the better off everyone will be. 
I hope that in that meeting we can look for non-legislative 
opportunities as well.
    Let me talk about just one of them. You have mentioned, Mr. 
Gibson--and I want to make clear that the critical tone to my 
remarks is not personal. It is not directed at you personally. 
Like the Chairman, I think we share here a determination, which 
I know from our private conversations as well as the public 
discussions we have had: to serve our veterans as well as 
possible.
    You have mentioned, Mr. Gibson: the Patient-Centered 
Community Care Program, known as PC3; and the project Access 
Received Closer to Home, also known as ARCH. These are what you 
have referred to as non-VA programs. The fact is, what we have 
heard, and the factual evidence confirms it, that many 
different VA facilities around the country have uneven, 
inconsistent, and different approaches in implementing these 
programs.
    There is no need for legislation to make these policies 
consistent. So, what I would like for you to tell us, not 
necessarily today, if you can today all the better, but I think 
we need a study and a comprehensive approach here to making 
sure that the referrals are as robust as possible in meeting 
the needs of veterans when better care can be provided outside 
the VA facilities.
    I am referring to it that way because I do not view it as 
non-VA care when a veteran is assigned the VA facility. The VA 
is as much responsible for that care as it is when it is done 
in a VA hospital.
    Mr. Gibson. We agree with that point precisely. It is our 
own unfortunate use of language. But it is the fundamental 
point that makes what we do different than a health plan.
    Senator Blumenthal. Right.
    Mr. Gibson. We are accountable for those health outcomes 
for veterans.
    Senator Blumenthal. So, I want to make this point as 
strongly as I can. The VA should not fear the Choice program or 
the PC3 program or the ARCH program. It is not non-VA care, it 
is not a threat to the VA. It is a different mode of serving 
the same health care needs with the best possible health care.
    I think we also want to know--maybe you can answer this 
point as well--how long are the waits for health care outside 
the VA system. In other words, when there is a referral to a 
private doctor, is there more than a 30-day wait to see that 
doctor? Because the veteran, the individual veteran in need of 
health care is no better off waiting 90 days to see a private 
doctor than 90 days to see a VA doctor at a VA hospital.
    So, I think we need to be as strong and aggressive in 
overseeing these other non-VA health care services as the VA 
directly provided services. I do not know whether you have data 
on the wait times or travel distances for what you have 
referred to as non-VA.
    Mr. Gibson. We have data around PC3. Three quick points 
here. First of all, we do have data around that. I need to make 
clear, PC3 is a relatively new program. At the time Choice was 
enacted, I do not think we had PC3 in place much more than a 
year. Correct me if I say something wrong here.
    And understand, PC3 was a radical departure from the 
historic practice inside VA. The historic practice has been 
basically 150 different medical centers, pretty much what you 
described, doing their own thing. Does not mean that there are 
bad arrangements, but it was pretty much everybody putting in 
place the support in their community that they needed to 
develop to do that.
    So, yes, we do need to reconcile those different channels. 
That was the fundamental point that I made in the opening 
statement an that related topic. The other thing, very quickly, 
you know, if you are looking for somebody to hold accountable 
for the decision on driving distance, I am the guy. I sat there 
and I tried my best to honor the intent of Congress. I am going 
to read to you from the conference report verbatim.
    ``In calculating the distance from a nearest VA medical 
facility is the conferee's expectation that VA will use 
geodesic distance or the shortest distance between two 
points.'' That is verbatim language out of the conference 
report.
    Now, I will tell you, if I had it to do over again, I would 
have ignored that. I would have ignored Congress's intent. I 
would have gone ahead and done what we thought was the right 
thing for veterans anyway, and I guarantee you, we would have 
been criticized for doing it. But at least I could have looked 
myself in the mirror and said, well, we did the right thing for 
veterans in the process.
    Senator Blumenthal. Well, I think that is a very important 
statement and it reflects the reason why I said in my remarks 
that Congress bears some of the responsibility. I appreciate 
your remarks.
    Thank you, Mr. Chairman.
    Chairman Isakson. No, we are all in this together, which is 
why each member has got a coin at their seat. I told you all at 
the first meeting we had that we were going to adopt Lieutenant 
Noah Harris, who lost his life in Iraq's IDWIC slogan, I Do 
What I Can. We are going to do what we can for veterans. You 
all keep that as a memento of our commitment.
    Senator Tillis.

       HON. THOM TILLIS, U.S. SENATOR FROM NORTH CAROLINA

    Senator Tillis. Thank you, Mr. Chair, and thank you, 
gentlemen, for being here. I want to go back to the 40-Mile 
Rule. I am brand new. I was not here last year. And it sounds 
to me like you did exactly what you were asked to do based on 
the statutes, and I, for one, appreciate it when agencies honor 
the intent of the Congress even when I disagree with it, and 
this is one where I do.
    When we fixed the 40-Mile Rule, how do we also deal at the 
same time with the reality that a VA facility may be within 
those parameters, but not able to provide the care the veteran 
needs?
    Mr. Gibson. That is today's $64 question. The reason the 
legislation got written the way it got written was because 
opening the aperture to 40 miles from where a veteran could 
receive care scored at multiples of the $10 billion. So, it was 
really a compromise to basically say, write it this way because 
that is what we could kind of back in to the $10 billion 
number; which, as I understand it from all of my conversations 
with the different Chairs at the time of the two Committees, 
was the thought process and the approach.
    That is the tough spot that we are in right now. You know, 
I am very attentive to the Chairman's comment to forget about 
how much it is going to cost, forget about what the burn rate 
is going to look like. That leads you very quickly to a 
conclusion that says, well, just make it 40 miles from 
everywhere. Yet, if you do that, it is, we believe, potentially 
multiples of the $10 billion that we have got here.
    One of the things we are doing is we are doing analysis to 
try to understand, you know, what if it is 60 miles instead of 
40 miles? Or what if there are certain procedures, such as 
routine optometry or audiology or colonoscopy or physical 
therapy, that we could open the aperture on those, but then if 
it is a more complex procedure, that maybe it is OK to travel 
100 miles.
    Senator Tillis. That is the part--I have the utmost 
confidence in Chairman Isakson and Ranking Member Blumenthal's 
staff to work with you all to figure that out. But that is the 
sort of thinking that needs to be woven into the discussion 
over the next couple of weeks because it is just practical.
    I do have a question about the cost of it that, as a 
numbers person, I am not able to get my head wrapped around. 
What is the reimbursement rate for non-VA providers? When 
someone goes through a procedure, what is the typical 
reimbursement rate for a typical procedure? Is it Medicare 
rates?
    Mr. Gibson. The short answer is Medicare.
    Senator Tillis. OK.
    Mr. Gibson. That is what it is for Choice.
    Senator Tillis. OK.
    Mr. Gibson. In PC3, rates below Medicare or up to Medicare 
can be negotiated by the administrator. In these other 
arrangements, they are oftentimes more frequently Medicare 
rates, but other higher rates may be negotiated.
    Senator Tillis. How do we, on average, allocate the cost of 
providing care in a VA facility? I mean, what is a comparable 
cost of care? If we are reimbursing the provider at, on 
average, Medicare rates, what does it typically cost? Is it 
half for a VA provider, the same for a VA provider versus a 
non-VA provider?
    Dr. Tuchschmidt. I cannot tell you by procedure, but I can 
tell you that if you look at the data from last fiscal year, 
our cost, average cost per person, totally allocated cost, 
which includes all of our facility costs and everything else, 
is just below the average cost of Medicare. It is about on par.
    Senator Tillis. OK. Well, that is the part of the math that 
I do not quite understand. I understand that you may be 
shifting to--first off, I think we all agree, nobody that I 
know on this Committee wants the privatization of veteran' 
care. We need VA hospitals. We need a place where veterans feel 
comfortable and they feel like they can get the most 
comprehensive care.
    But, I cannot understand the sort of hockey stick 
projections for added cost when it looks like it has more to do 
with where it gets disbursed and less to do with how much more 
it costs. So, as we are going through this process, can we get 
a better handle on that? Because it would seem to suggest that 
Choice is doubling or tripling the cost to provide the same 
sort of care. Yet, it is still at roughly the same 
reimbursement rates for Medicare or for what it would cost in a 
VA facility.
    Dr. Tuchschmidt. We are running a lot of those analyses now 
around the kinds of things that the Deputy talked about, and we 
are working with our actuarial from Milliman, which is probably 
one of the best in the world.
    I think the challenge or the part of that that is kind of 
above and beyond is our effort to try to understand the change 
in reliance that will happen, the cost shift that will happen 
from Medicare, Medicaid, or indemnity insurance to VA because 
somebody has--you know, it is easier to get the care through us 
and through the Choice program and it is cheaper out of pocket.
    Senator Tillis. I know my time is expired. I am going to 
stick around, maybe ask another round of questions if time 
allows. But I am just trying to get my head wrapped around 
this. There could arguably be some stranded costs, but that 
does not even make sense because if there were stranded costs, 
that means the facility is not being used; so, I wonder why 
they would be going to a non-VA provider.
    I really think we have to do a better job of normalizing 
these numbers because it is the first thing we have to do to 
make it clear that this is not a budget buster. It is a 
different way of providing more timely care.
    Mr. Gibson. Yes.
    Senator Tillis. Thank you. Thank you, Mr. Chair.
    Chairman Isakson. Thank you, Senator Tillis.
    Senator Tester.

           HON. JON TESTER, U.S. SENATOR FROM MONTANA

    Senator Tester. Thank you, Mr. Chairman. I would also echo 
what you said earlier, where the staffs of your Chairmanship 
and the Ranking Member get together and hopefully we can get it 
out of this Committee and use it to give you guys the 
flexibility you need for specific care that veterans need.
    Could you tell me what the process is, Sloan, on a veteran? 
I assume they call into the veteran facility, whether it is a 
CBOC or hospital, and ask for an appointment. What happens at 
that point in time? If they do not have a doc at the CBOC or--
just tell me how the process works.
    Mr. Gibson. I will roughly outline----
    Senator Tester. Yes.
    Mr. Gibson [continuing]. And I will ask Jim to fill in.
    Senator Tester. As briefly as you can.
    Mr. Gibson. Sure. First of all, if it is a 40-mile veteran 
that knows they are in 40 miles, they will call directly to the 
third party administrator to schedule an appointment.
    Senator Tester. OK.
    Mr. Gibson. Other veterans that are not part of that group 
would call their clinic, call their doctor's office. They would 
speak with a scheduler or with a clinician and say, I need this 
kind of care.
    Senator Tester. Right.
    Mr. Gibson. And they would work to, ``When do you need to 
be seen, when do you want to be seen?'' They would ask the 
basic questions and work them into the schedule.
    Senator Tester. OK.
    Mr. Gibson. If it could not be scheduled within 30 days, 
then they would be offered the opportunity to use Choice and go 
that way.
    Senator Tester. Then, would the VA make the appointment or 
would it be up to the veteran to make the appointment?
    Mr. Gibson. What then happens is the veteran connects 
directly with the third-party administrator and the third-party 
administrator is responsible for lining up that provider in the 
community and scheduling that appointment.
    Senator Tester. And in Montana, that third-party 
administrator is who; do you know?
    Mr. Gibson. I am pretty sure it is TriWest in that part of 
the country.
    Senator Tester. TriWest. So----
    Mr. Gibson. Is it Health Net in that part of the country?
    Dr. Tuchschmidt. I think it is Health Net.
    Senator Tester. So, Health Net would set up the appointment 
with somebody that would be fairly close?
    Mr. Gibson. Yes. There are stipulations. One of the 
advances, my view, in PC3 as well as in Choice, is that there 
are requirements built into this for the third party 
administrator around distance and timeliness of the scheduling 
process.
    Senator Tester. Well, I think--getting to Senator Tillis's 
point--part of why there would be non-VA care is there would 
not be a doctor there.
    Mr. Gibson. Correct.
    Senator Tester. Consequently, you would then connect them 
with the private sector.
    Mr. Gibson. Correct.
    Senator Tester. The question I have is, was the bill we 
passed last July, 2 years ago. What is the VA doing to make 
fundamental changes in long-term investments necessary to build 
the capacity of the VA?
    Mr. Gibson. The Choice program actually has a 3-year or $10 
billion sunset.
    Senator Tester. OK. But still----
    Mr. Gibson. The question is a great question. Congress, I 
believe, very appropriately, also authorized $5 billion that we 
are investing almost entirely in both facilities and in staff. 
So, in virtually every facility investment we are making direct 
investments that enhance our ability to provide access to care.
    Senator Tester. So, the question is, have you determined--
do you have a short- and a long-term plan on where the facility 
shortfalls are? I mean, we have had different folks in from the 
VA that talked about this--and how you are going to get folks, 
in my case, into rural America, doctors in particular?
    Dr. Tuchschmidt. We do have a plan. We took the $5 billion, 
roughly half of that is for space, half of that is for people, 
roughly 10,650 people. The funding for the people part of that 
is slightly skewed toward next year because it takes a year to 
recruit a doctor, and the rest of it this year.
    So far we have obligated about $77 million for salary 
support for the new people that we have hired around the 
country.
    Senator Tester. The issue for me is that we have got two 
problems in Montana, which may be the same in Arkansas or 
anywhere, where we do not have enough docs. We have got some 
nurse shortages, but docs are the big deal. Yet, if you did 
hire enough docs, you would not have the space. It is a chicken 
and egg thing. How are you guys doing this?
    I mean, I can give you Missoula as a prime example. They do 
not have the space. I can say the same thing in other areas of 
Montana, that they do not have the space. You can hire the 
docs; they would have no place to work. So, how are you going 
to solve--how do you solve this? By the way, I am not saying 
this to point fingers at anybody. I mean, it is kind of in your 
lap so you have got to tell me how you are going to do it.
    Mr. Gibson. No, no, no. The other reason that some of the 
spending, the staff spending is skewed to 2016 is because we 
have to get some of the space issues corrected.
    Senator Tester. OK.
    Mr. Gibson. So, this was really a process, and I do not 
know--I cannot tell you offhand what we have allocated into 
Montana, both on space and on staff, but basically, we worked 
down through this thing all across the entire system to be able 
to allocate the workforce.
    Senator Tester. The bigger issue, Sloan, and it is the 
bigger issue is that do you have a plan? That is the bigger 
issue. Do you have a plan for facilities and do you have a plan 
for docs so that the facilities and the docs match up when you 
bring them on?
    Dr. Tuchschmidt. We do. So, we have a plan for the space 
that was front-loaded and the space and the people money all 
actually went to the places with the largest waiting lists for 
primary care or specialty care or mental health. You already 
know, some of the challenges are not just VA. I mean, shortages 
are in the country in general.
    Senator Tester. No, no. It is inside and outside. You are 
right.
    Dr. Tuchschmidt. Yeah.
    Senator Tester. OK. I have got some other questions for the 
record that are more specific to Montana. Thank you, guys, for 
your service, and I would be remiss if I did not say, almost 
without exception, the veterans that I talk to like the health 
care they get once they get through the doors of VA.
    Mr. Gibson. Thank you.
    Chairman Isakson. Thank you, Senator Tester.
    Senator Rounds.

        HON. MIKE ROUNDS, U.S. SENATOR FROM SOUTH DAKOTA

    Senator Rounds. Thank you, Mr. Chairman, and I do 
appreciate the approach that you and the Ranking Member are 
taking in asking that we move forward in an appropriate fashion 
to address the issues.
    Mr. Gibson and company, we want you to succeed. We want 
this to work. And I sense the frustration that you have with 
regard to the 40-Mile Rule, the definitions that are found 
within statute, and the expectations of you in order to make 
this thing work. I am just curious if it would be appropriate, 
should we actually look at modifying the statutory guidelines 
that are found within the legislation to begin with, to change 
it so that you do not have that issue in the future and that 
the 40 miles is not going to be audited, written up, and 
challenged again in the future.
    It may be something that we may want to look at. In South 
Dakota right now, we have got--you know, we have the East River 
and West River and we divide our State up that way, which 
everybody in our part of the country knows it that way. If you 
look at East River, SD, we have got 34,000 veterans, 250 of 
which have actually exercised their Choice option and made an 
appointment with a non-VA provider.
    Out of 19,330 veterans in West River, 61 veterans have used 
the Choice program. I think there probably needs to be some 
additional outreach to these folks. We are a pretty good sized 
State. But one thing comes to mind and that is, if there are 
real challenges in terms of getting these other physicians to 
actually participate in the programs, you have got a real 
challenge with having five different VA programs that you are 
trying to manage on this.
    Is there something we can do in terms of providing 
statutory authority so you can maybe cut through some of the 
red tape? Is it necessary to have five different programs right 
now? Would there be a better way to do this so you can simplify 
contracting so that it is easier not just on the Department, 
but on the providers and institutions that you are expecting to 
step up?
    Mr. Gibson. There has to be a simpler way.
    Senator Rounds. Do you need statutory changes to do that?
    Mr. Gibson. The honest answer is I do not know yet. We know 
we need contractual changes. We have got--the longer term 
contracts that are locally negotiated; the PC3 contract, which 
we actually modified to slip Choice up underneath it. I think 
we are going to have to reconcile those two things, and those 
are going to be contracting actions----
    Senator Rounds. Would it not just make--excuse the term, 
but would it not be just a whole lot easier for everybody to 
take a little common sense into this thing here and just decide 
that we are going to have a single rate out there that we can 
negotiate with docs and work it through, or at least to provide 
you with the ability to do that?
    Mr. Gibson. I think the answer is an unqualified yes. 
Medicare provides for some differences, particularly in rural 
areas or in particular States, and I think we want to 
accommodate that because of the challenges attracting providers 
into those particular locations.
    Senator Rounds. It most certainly would simplify rates for 
the providers because if they are providing Medicare services 
now, if they have got a system set up to follow that rate-
making process or those reimbursement rates, at least it would 
make it easier on them to have the same type of an approach 
with the VA.
    Would you check? Could I ask that you find out what you 
would need to be able to make that sort of a change and bring 
it back to the Committee?
    Mr. Gibson. I will tell you, on further reflection, if we 
were going to come up with a single way to do this, a single 
program and a single approach, unquestionably yes; we would 
have to have legislative authority because Choice is one of 
those five or six channels. ARCH is one of those five or six 
channels. Both of those were specifically legislated. And then 
we have got contract actions to work through on the others.
    Senator Rounds. You have got an issue where you have got a 
bureaucracy, which is pretty overwhelming, and part of it is 
because you are doing multiple programs. Let us simplify it.
    Mr. Gibson. Yes, we agree.
    Senator Rounds. Let us get it down to where the dollars are 
actually going back down to the providers.
    Mr. Gibson. We agree.
    Senator Rounds. If we can cut through a whole bunch of 
programs, simplify it, make one program out of it, save the 
dollars and actually put them back in, you may not have the 
burn rate that you have right now on the veterans that you are 
serving.
    Mr. Gibson. We agree.
    Dr. Tuchschmidt. If I could add, one of the things that we 
are doing is working with a large consulting firm. We have 
asked them to bring their commercial side in, which does really 
nothing but help health plans get set up to run, to help us and 
they are doing an evaluation right now. I think when that 
evaluation is done, what we want to do is get people together 
and have a conversation about what the future of the VA 
purchase care programs look like.
    Senator Rounds. So, my understanding is that you would be 
able to at least look and find out what it would take to be 
able to simplify both reimbursement and contracting processes 
that are there?
    Mr. Gibson. Yes.
    Senator Rounds. OK. Bring it back in and let us look at it?
    Mr. Gibson. Yes.
    Senator Rounds. Thank you. Mr. Chairman, thank you.
    Chairman Isakson. Senator Rounds, thank you.
    Senator Moran.

           HON. JERRY MORAN, U.S. SENATOR FROM KANSAS

    Senator Moran. Mr. Chairman, thank you. Mr. Secretary, 
Doctor, thank you for being here. I want to make just a couple 
of comments and then try to get to questions as quickly as I 
can. I want to rehash the authority of the Department, and I do 
this not for having an argument about whether you have the 
authority to fix the 40-mile arena or not, but to set the stage 
for you to assure me that there is no intention toward 
preventing full and all-encompassing care for veterans under 
the Choice Act at the Department of Veterans Affairs.
    The reason I describe this is because of some skepticism I 
have about that. You quoted, Mr. Deputy Secretary, the report 
language was talking about the so-called ``as the crow flies'' 
measure and you analyzed that and determined that this is what 
Congress intended.
    Let me read to you the language about the issue that I have 
been most vocal about which is the inability or the 
unwillingness of the VA to provide care to a veteran who lives 
within the 40 miles, but cannot get the care that he or she 
needs because there is a VA facility there, even though that VA 
facility does not provide the service the veteran needs.
    Here is what the language says in the Choice Act. ``The 
conferees do not intend the 40-mile eligibility criteria 
included in this section to preclude veterans who reside closer 
than 40 miles from a VA facility from accessing care through 
non-VA providers, particularly if the VA facility the veteran 
resides near provides limited services.''
    Then it goes on to make certain that you know you have the 
authority. The report language intends to notify the VA that 
you have the authority to utilize Title 38. Title 38 authorizes 
the VA to contract with non-Department facilities--I am quoting 
the title--facilities and providers to furnish hospital or 
medical services to eligible veterans when the VA is not 
capable of providing economical care because of geographical 
inaccessibility or due to an inability to furnish such care or 
services required.
    Title 38 of the VA facility to enter into a contract 
agreement with non-VA health care entities to secure health 
care services that are either unavailable or cost-effective at 
the VA facility. The report language, again, makes clear that 
there is nothing in the law that says you cannot utilize Title 
38 as described in those two sections.
    So, you use the report language initially to tell us that 
``as the crow flies'' is the way it had to be, but then decided 
there was a way to solve that problem. The report language, in 
my view, gives the opposite conclusion. You ought to be able to 
reach the conclusion that you can use the Choice Act.
    Again, I do not want to get involved in the legal battles. 
You will tell me your lawyers say you cannot do that. The point 
I want to make, and it comes from a conversation I had with the 
Secretary back in September, in which we were talking about the 
Choice Act. My question to the Secretary was, Do you have 
everything you need to implement this and to solve the problem?
    The Secretary's response--this is the hearing of September 
9, 2014--let us look at it through the lens of the veteran. 
Does it make sense for the veteran to get a cortisone shot 
closer to home? You know, what makes sense? And one of the 
things we are asking is to give the Secretary that flexibility 
in technical changes to the Care bill.
    We then passed the technical changes in which the Secretary 
indicated that if we did that, he would have the full authority 
to implement the 40 miles as he thought was in the best 
interest of the veteran. In fact, he said, I think it is just 
simply putting in a phrase. It would be very simple-handed and 
we have been working that with the Committee's staff.
    The reason I raise this topic is that what I would like to 
feel certain about is that you fix the ``as the crow flies'' 
issues, we pass legislation that fixes the issue of whether or 
not the services are available within the 40 miles, the 
definition of a facility within 40 miles.
    Is there anything else, any other features of the law or 
any resource arguments you are then going to make that will 
prohibit the VA from fully implementing this legislation, the 
Choice Act, in a way that benefits the veterans that are 
intended and need the care?
    The background that I outlined is, again, not to have a 
legal discussion about who is right or who is wrong about what 
the VA can do, but what has been suggested to me, my sense is, 
the VA has found reasons not to implement this legislation in a 
way that benefits the veterans. I am worried that we fix this, 
you fix the crow fly, the Chairman and the Ranking Member, and 
we come up with legislation language to fix the facility issue.
    Is there going to be something else? Are we just going to 
be chasing the VA one day at a time for another reason that you 
cannot implement the bill?
    Mr. Gibson. I see I have 9 seconds for my response.
    Senator Moran. The answer would be no and will fit within 
the nine seconds.
    Mr. Gibson. As I have said, VA is committed to making this 
work and we are going to do what we need to do to make it work. 
There are reasons why the legislation was written the way it 
was written. In the case of the 40 miles driving versus 
distance, because it sits in the conference report, that is the 
reason why I think I have some flexibility and why I could have 
ignored that, even though that reflects what I believe to be 
the intent of Congress.
    I do not have that flexibility as it relates to 40 miles 
from the care. In the bill text, a veteran is an eligible 
veteran for purposes of this section if the veteran resides 
more than 40 miles from the facility--from the medical facility 
of the Department, including a community-based outpatient 
clinic that is closest to the residence of the veteran. That is 
in the bill text.
    I do not have latitude to disregard that. That is the law. 
So, that is exactly what we implemented. No, I do not believe I 
have the discretion to decide something different about 40 
miles from a facility where they can get the care. That is 
where I have said before that we need help, and I want to do 
that in a thoughtful way and I am delighted to have the 
opportunity to work with the Majority and the Minority staff 
over the next several weeks to try to come up with sensible 
approaches that are veteran-centered to make that happen.
    Senator Moran. My question, Mr. Secretary, is there 
something else that will then arise, once this issue is fixed, 
that then causes the implementation of this bill to be 
burdensome?
    Mr. Gibson. I have already asked, in my opening statement, 
for additional support and additional changes. So, they are 
included in my opening statement.
    Senator Moran. My time is expired. Mr. Chairman, thank you.
    Chairman Isakson. Thank you, Senator Moran. I think this 
meeting is a crossroads for us and a good crossroads. I think 
the leadership you all exemplified since the last hearing we 
had ,to try to embrace the concerns we had versus obfuscating 
them shows, that you want to move in the right direction.
    I think what is being asked by Senator Moran is a bona fide 
question. We are here to help. Sometimes you are going to have 
to tell us where you need the help, which you did in terms of 
the statutory language. But there is also self-initiated help 
which we expect you to do to find those things that will make 
this Choice Act work for the veterans. I think that is what you 
were referring to; am I not right?
    Senator Moran. True.
    Mr. Gibson. I would tell you, Mr. Chairman, that we did 
that consistently as we worked to implement the Act in the 
first place. You know, Dr. Tuchschmidt--how many visits did you 
have with staff? Congressional staff, 20 visits?
    Dr. Tuchschmidt. Probably more.
    Mr. Gibson. Basically, once a week Jim was over here 
visiting face to face with staff having routine conversations, 
asking questions, getting clarification, providing updates in 
order for them to understand consistently. I will give you an 
example.
    The law basically says that the veteran who gets his care 
outside of VA under Choice has to make his co-pay at the time 
care is delivered. Well, you know what? That is not the way we 
work non-VA care. So, you think veterans are going to want to 
use that instead of using non-VA? They are going to say, no, 
no, I do not want Choice. I want to go over here and do this 
other thing because I do not want to make my co-pay on the 
front-end.
    We found a way administratively around that, to interpret 
that, because we knew that was going to be a point of friction 
for veterans. We do that routinely day in and day out. But 
there are some things we cannot work around.
    Chairman Isakson. And that is a good thing. Thank you.
    Mr. Gibson. Yes, sir.
    Chairman Isakson. Senator Heller.

           HON. DEAN HELLER, U.S. SENATOR FROM NEVADA

    Senator Heller. Mr. Chairman, thank you. I thank you and 
the Ranking Member for your ideas. I think we have accomplished 
a lot in this hearing today, and your efforts during the recess 
to help with this flexibility issue for care at non-VA 
facilities, I think, will go a long way. I want to thank the 
witnesses. Thank you for your service. Thanks for spending time 
with us today so that we can resolve some of these questions, 
important questions, such as what Senator Moran raises.
    I want to talk a little bit about Nevada for a minute 
because, Mr. Chairman, this 40-Mile Rule means a lot to the 
veterans in my State. We have 300,000 veterans in the State of 
Nevada. If you look at the size of the State, it is 110,000 
square miles. If you wanted to take a look at the State, it 
really is an urban State. 85 percent of the population in 
Nevada lives in 5,000 square miles.
    So, between Las Vegas, Reno, and Carson City, 85 percent of 
the population. The other 105,000 square miles, has veterans 
spotted around. I have got a map here and I would be happy to 
share it with the Committee, with you, Mr. Chairman, the 
Ranking Member, perhaps yourself, Mr. Secretary, talking about 
how far and how much travel these veterans have to overcome.
    One city is 7 hours round trip. They have got to go all the 
way to Salt Lake City, which is not Reno, it is in the other 
direction. The same in another city called Elko; it is a 6-hour 
round trip. We have to have 4\1/2\ hours to drive into Reno. 
So, you can see the implementation of a bill like this and the 
impact that it has on the veterans in my State.
    Here is a question that I do raise: I mentioned we have 
300,000 veterans in the State of Nevada, but only roughly about 
1 percent of them have received the Choice card. It is a small 
number. Can you tell me why it is so difficult, if there are 
difficulties, as to why only 1 percent of the veterans in 
Nevada would choose a Choice card or the program?
    Mr. Gibson. Well, there is a big difference between how 
many veterans receive the Choice card and how many have chosen 
to use it. We mailed out 8.6 million Choice cards--if somebody 
can do the arithmetic--out of 22 million veterans across the 
country. The legislation stipulated who was eligible for 
consideration under Choice and that is who got the cards.
    Senator Heller. Six million veterans?
    Mr. Gibson. 8.6 million veterans have received Choice 
cards.
    Senator Heller. OK.
    Mr. Gibson. We started mailing them and we did in a tiered 
fashion. We began on November 5. Those in the 40-mile group got 
them first. Those waiting more than 30 days for care got them 
second. Then everybody else came out in waves. We were sending 
out more than a quarter of a million cards every day. The last 
of those were received in late January, about 60 days ago.
    Senator Heller. Can you tell me how many of those veterans 
have made appointments?
    Mr. Gibson. As I mentioned in the opening statement, there 
have been----
    Senator Heller. Sorry.
    Mr. Gibson. It is OK.--46,000 authorizations issued and 
44,000 appointments made with providers in the community. You 
see, I am breaking the habit of calling it non-VA care. I 
listen.
    Senator Heller. I want to share a letter with you from a 
veteran out of Carson City. He spent 25 years in the Marines. 
And he expressed some concerns about the implementation of the 
Choice Act. If I can read a portion of that letter to you?
    He says, I received my veterans Choice card only to realize 
after attempting to use it the Government had again inserted 
itself between myself and my medical care. I do not get to see 
a doctor of my choice. I have to call each time I need an 
appointment, which means I am not assured that I would see the 
same doctor each time, merely the first doctor that is 
available. The current program does me no good.
    Is this what we wanted in the Choice Act? Or is there a----
    Mr. Gibson. I will tell you what you have described is not 
at all what we want. First of all, the veteran under Choice has 
the flexibility to choose his doctor. So, if the veteran went 
to see Dr. Smith for that first appointment, I would expect 
that automatically the third party administrator would schedule 
with Dr. Smith again, and if they did not, the veteran would 
say, I want to go see Dr. Smith again; I need another 
appointment.
    The other provision under Choice is that veterans are 
authorized for 60 days. So, the authorization for a particular 
purpose, for a particular medical purpose, extends for a 60-day 
period of time. So, there can be multiple authorizations or 
multiple appointments scheduled under that single 
authorization.
    So, that is not at all--but the other point I would make 
very quickly is, this is a key distinction in terms of the 
Choice not being a health plan. It is not like--people are 
familiar with how a health plan works. You get, I got my Blue 
Cross/Blue Shield card in my pocket. I just show up at a 
doctor's office and I hand over the card. That is not how 
Choice works.
    Senator Heller. OK, OK. One quick question. I apologize. My 
staff gave you the heads up on Pahrump, a small rural town in 
Nevada. I talked to the Secretary about it. It was a month ago 
today. He said, in a month, I will be making a grand 
announcement on that clinic in Pahrump. Do you want to make a 
grand announcement today?
    Mr. Gibson. I do not have a grand announcement to make on 
Pahrump, but I will get some folks scurrying to get some 
information for you, the latest information on Pahrump.
    Senator Heller. You have been very patient.
    Mr. Gibson. Yes, sir.
    Senator Heller. Mr. Chairman, thank you.
    Chairman Isakson. On that point, I should have given credit 
earlier, but I think the VA announced on Monday the first of 
the 27 approved clinics in the veterans Choice bill, which is 
the one in Lafayette, LA. Is that not correct?
    Mr. Gibson. I have been up to my ears in that particular 
facility. I have been to Lafayette in the last 2 weeks. I am 
proud to tell you, yes, we did.
    Chairman Isakson. So, that is the first step. We have got 
26 more to go, but that is a good sign.
    Senator Heller. Let us get you up to your ears in Pahrump. 
How is that? [Laughter.]
    Mr. Gibson. I do not know if I like the sound of that.

         HON. JOHN BOOZMAN, U.S. SENATOR FROM ARKANSAS

    Senator Boozman. Thank you, Mr. Chairman, and thank you all 
for being here. We do appreciate your hard work. Tell me a 
little bit about, you know, one of the concerns that we have 
all had on the forefront is veterans that are having problems 
with mental illness, having difficulties for various reasons.
    A veteran that lives out beyond the 40 miles, can you kind 
of walk through how he gets care if he is not able to do that? 
But the thing I am really concerned about is if they--if a 
mental health care provider locally sees him and gets him on a 
medication and then he comes back, it is not on the formulary, 
are there any provisions?
    Are we doing anything to try to prevent those kind of 
problems? As you know, in a matter of weeks you could kind of 
get somebody stabilized, get them used to something, then he 
comes back in a very fragile condition, and all of a sudden 
somebody is saying, we do not carry that. Then you have got 
real problems.
    Mr. Gibson. I am going to let our clinician here answer 
that question.
    Dr. Tuchschmidt. So, our mental health providers should be 
able--we have routine formulary exception procedures. They 
should be able to do a formulary exception. I think most of 
them probably would until they got to know that patient and 
then would make decisions about whether to continue or change 
that medication.
    So, I think there are procedures in place and I cannot say 
that everything works perfectly every time in a system this 
size, but I would hope that that is what would happen.
    Senator Boozman. I would really encourage--you know, as we 
visit with families that have gone through this, that seems to 
be kind of a common denominator in the sense of the transition 
from DOD where the formularies are different.
    Mr. Gibson. We have done some very specific work associated 
with the transition from DOD and promulgated very clear 
guidance about maintaining continuity of medication, 
particularly for mental health treatment during that transition 
period. I am not going to remember the number, but we spend 
hundreds of millions of dollars every year on prescription 
medications that are not in our formulary for exactly the 
circumstance that you are describing.
    Senator Boozman. I appreciate that. It is something that 
you might consider, again, we are not talking about great 
numbers. I mean, you know, we are not talking about the 
equivalence of diabetes, hypertension, things like this. These 
are pretty specific individuals, but it is such a big deal.
    You might consider then--and I appreciate you working hard 
on the DOD issue. Something you might consider is maybe perhaps 
putting out a similar thing, because the numbers are so small, 
it really should not affect, with this 40-Mile Rule, and then 
we will not see problems associated with that.
    Dr. Tuchschmidt. I think the guidance we put out actually 
is generic guidance, but it was prompted by the DOD issue.
    Mr. Gibson. We will go back and look.
    Senator Boozman. Good. Thank you. Thank you, Mr. Chairman.
    Chairman Isakson. Thank you, Senator Boozman.
    One comment I would make. You know, what you all really 
ought to do is you ought to send a memo to each of the Senate 
offices. A hundred of us have veteran full-time coordinators in 
our office. I am sure you do, John. I do. They ought to be a 
regular recipient of any advisory VA puts out on veterans 
Choice because that is one of the best places to get the 
information. I do not know if you do that or not. It just 
occurred to me. It would certainly be helpful to our office. 
You might just try and do that.
    Mr. Gibson. Yes, Senator. If not already doing it, we will 
do that.
    Chairman Isakson. Senator Tillis, did you have an 
additional question?
    Senator Tillis. Yes, I did. Just, I want to go back again 
to some of the math. But before I do that, Senator Tester 
prompted me to reflect on a conversation we had with the 
Secretary in Chairman Isakson's office a month or so ago. We 
were talking about the kind of peaks that we have for care 
right now. He was suggesting that a significant amount of our 
veterans or VA facilities are providing care to veterans of the 
Vietnam War, I believe, and that if you look historically there 
have been these peaks and valleys in terms of the demand.
    When we are talking about long-range planning for 
facilities, are we looking at how we kind of cut through a line 
there that, you know, will not necessarily satisfy the peak 
demand and that is why we will have the relationships like non-
VA providers or Choice. But is that very much weighing into the 
long-term strategy? That is one area.
    Then, in areas where we have needs that may be of a unique 
nature, rather than building out a VA capability, we are 
looking at this sort of scope of practice that maybe is never 
appropriate for a VA hospital because of the need to keep the 
facilities and the skillsets current. Is that weighing into the 
long-term thinking?
    Mr. Gibson. I think on both cases the answer is yes, 
clearly.
    Senator Tillis. Now, the question I had, again just going 
back to the math, you were saying that 17 percent, I guess, of 
the population is being provided care from a non-VA provider.
    Mr. Gibson. 17 percent of the appointments. On average, we 
run between 1-1\1/2\ million appointments in the community each 
month.
    Senator Tillis. OK. How much of that, if we get the Choice 
right, how much of that would migrate to--will that be a 
constant or will that migrate more toward the Choice 
population? Are they very different scenarios?
    Mr. Gibson. I think my expectation has been that what we 
would see would be an increase in the number of appointments 
completed in the community and that Choice would be a very 
meaningful component of that.
    Senator Tillis. OK.
    Mr. Gibson. That is sort of the expectation.
    Senator Tillis. Now, the other question again, I am just 
trying to get the math right and it may not be a proper 
connection, but I think you mentioned something to the effect 
of somewhere around $7 billion provided in non-VA care. What 
period of time?
    Mr. Gibson. It was in 1 year.
    Senator Tillis. In 1 year, $7 billion?
    Mr. Gibson. It was $6.6 to be precise.
    Senator Tillis. And that was 17 percent of the 
appointments?
    Mr. Gibson. 17 percent of the appointments.
    Senator Tillis. OK. Again, I hear these estimates on Choice 
and for some reason the math does not seem to add up. If 17 
percent of the appointments went to Choice, why would it seem 
like there is a disproportionately higher number? Am I reading 
those numbers wrong?
    Mr. Gibson. 17 percent went to care in the community.
    Senator Tillis. OK.
    Mr. Gibson. In fiscal year 2014, none of that was Choice 
because the law did not----
    Senator Tillis. No, I understand that. It is just when I 
have seen some of the estimates for the--because some of the 
people that were concerned about the 40-Mile Rule were saying 
this is how we kind of create a cap on the potential cost just 
to manage exactly what this was going to cost. I was trying to 
get some way to crosswalk how that care is being provided by 
non-VA providers outside of the Choice plan.
    I am still at a loss for seeing how some of the estimates 
and the math works for the downstream potential cost for care 
that we need to provide, whether it is a non-VA provider, a VA 
facility, or through the Choice plan. I would really be 
interested. When we get to the long-term solution, we figure 
out to what extent Choice plays a role.
    I am just trying to get a better estimate of numbers, 
because to me, it seems like we may have over-estimated the net 
incremental cost to have Choice as a part of the safety valve 
to provide veterans care.
    Mr. Gibson. Part of the challenge that I think we had and I 
think the Congressional Budget Office had on the front end, was 
not--we were going someplace we had never gone before in many 
respects, and the point that Jim made earlier about what 
happens with optionality when veterans have a chance to access 
care at a lower cost with lower co-pays.
    For example, 70 percent of our veterans use VA for 
prescriptions because it is cheaper than getting their 
prescriptions filled elsewhere. It is the highest category of 
utilization for VA, more than inpatient, more than outpatient, 
more than other categories, and it is because it is financially 
advantageous.
    So, once we move this way, part of what we have to look at 
is two-thirds of our veterans are over 65. They are Medicare 
eligible and they are already getting half of their care 
outside of VA. We were talking earlier about continuity of care 
issues and how do you manage veteran health. That is already a 
big challenge.
    Senator Tillis. That explains the delta between some 21 
million veterans and 9 million of them using----
    Mr. Gibson. Yes.
    Senator Tillis [continuing]. The system.
    Mr. Gibson. Yes.
    Dr. Tuchschmidt. If you look at our patient population 
today, 81 percent of them have some form of insurance other 
than VA. Two-thirds have Medicare. So, I think the caution is, 
if the out-of-pocket costs are different, lower in the VA, and 
the transactional costs are lower because you are not driving 
someplace, and VA will pay for it, what is--and that is the big 
question we are asking: what percentage of that care will shift 
from some other payer to VA?
    In the end, it might actually be cost-neutral across the 
board for the Federal Government if the shift is from Medicare 
to VA. But there clearly is a difference in terms of where that 
care is going to get paid.
    Senator Tillis. Mr. Chair, thank you for your indulgence. I 
only have one other question and it has to do with long-range 
planning. I am from North Carolina. We have got a veterans 
population that exceeds the population of some of our States, 
which is approaching 900,000 on a path to a million.
    And 51 percent of our population lives in urban areas, but 
we are spread out over almost 600 miles from the coast to 
mountains. As you are looking at long-term planning, are you 
looking--I sat next to a medical geographer on a flight from 
Reagan National to Chapel Hill. He works in a research center 
in Chapel Hill.
    Are you spending time trying to get ahead of the curve in 
terms of your long-range planning to try to identify these care 
deserts that exist, that become the stories that Senator Heller 
or somebody else will talk about as part of your long-term 
planning? Are we getting to that level of sophistication for 
long-term planning?
    Mr. Gibson. I am going to start and you jump in here. We 
have a capital planning process we call SCIP (Strategic Capital 
Investment Planning Process Directive 0011), which uses a 10-
year planning horizon. We are looking at demographic trends out 
that length of time. So, we are trying, in fact, to anticipate 
that. But part of the challenge is--and I am not throwing any 
stones here at all, but we have a massive capital deficit in 
terms of being able to keep up.
    Part of our challenge is, we see the number of veterans 
that are using VA for care. It may grow by 1.5 percent a year, 
roughly. But you go to Fayetteville, NC, and last year, it was 
up--I am going from memory here--6 percent, either 6 or 7 
percent at Fayetteville.
    In Wilmington, NC, where I was about a month ago, 14 
percent year-over-year growth and you need patients accessing 
care. And we are not fleet of foot. We do not make adjustments 
quickly. We have to rely on multi-year funding streams. So, 
that presents a challenge and, quite frankly, we get behind and 
we do not catch up.
    Senator Tillis. Thank you, Mr. Chairman.
    Chairman Isakson. In fairness to our second panel, I am 
going to go ahead. Senator Blumenthal has a quick comment to 
make and then I want to get right to our second panel. But good 
questions, Senator Tillis. I appreciate it.
    Senator Blumenthal.
    Senator Blumenthal. Just to complete the questions on the 
17 percent, that is 17 percent of all appointments----
    Mr. Gibson. Correct.
    Senator Blumenthal [continuing]. Are with community 
providers?
    Mr. Gibson. Correct.
    Senator Blumenthal. Can you give us the number of that 
which is under the Choice?
    Mr. Gibson. Correct.
    Senator Blumenthal. That is post-Choice?
    Mr. Gibson. No, no, no, no. That is total----
    Senator Blumenthal. Pre-Choice?
    Mr. Gibson. Well, the number that I gave you was from the 
first quarter, first fiscal quarter of 2015. So, it was 
October, November, December. We started Choice on the 5th of 
November, but the number of appointments completed during 
October, November, and December for Choice would be minuscule. 
So, you are looking at----
    Senator Blumenthal. We will see a different--do you have 
more recent data as to what that 17 percent--the equivalent of 
that 17 percent would be for the next quarter?
    Mr. Gibson. I do not have that data, and the reason I do 
not have that data regarding completed appointments in the 
community is the information lags.
    Senator Blumenthal. How long does it lag?
    Mr. Gibson. 30 days, 45 days, sometimes even longer.
    Senator Blumenthal. When will you have some trend data for 
us?
    Chairman Isakson. Probably the end of the fiscal year. 
[Laughter.]
    Dr. Tuchschmidt. We have--I mean, we have month over month 
data about how many appointments we are scheduling through our 
normal purchase care process.
    Mr. Gibson. In other words, purchasing care in the 
community.
    Dr. Tuchschmidt. The non-VA care, which is PC3.
    Senator Blumenthal. Contracts or----
    Mr. Gibson. Long-term contracts or individual arrangements 
and individual authorizations.
    Senator Blumenthal. My understanding--I know that ARCH may 
have been authorized by statute, but what about PC3? There are 
contracts with Health Net Federal Services and TriWest to carry 
out the PC3 program that were concluded in September 2013. It 
was not really started until May 2014.
    Mr. Gibson. Correct.
    Senator Blumenthal. Was there a statute that authorized 
PC3? I do not know of any.
    Mr. Gibson. I do not think so.
    Dr. Tuchschmidt. There is a contractual----
    Senator Blumenthal. My understanding is that there was a 
statute for ARCH, Public Law 110-387.
    Mr. Gibson. Correct.
    Senator Blumenthal. I guess what I am suggesting here is 
that there needs to be an effort to rationalize all of these 
community-providing health care services because right now, it 
is a little bit like Secretary McDonald noticed while still at 
Proctor & Gamble--they were making the same detergent and 
packaging it in five different types of packages and five 
different marketing programs and advertising budgets for 
different regions.
    I mean, coming into that situation, you would say, my 
goodness, we are really----
    Mr. Gibson. We are in violent agreement with you.
    Senator Blumenthal. Maybe as part of----
    Mr. Gibson. We understand we need to do that. There are 
tens of thousands of providers out there across the country 
that are operating under existing contracts or agreements 
providing care to veterans. So, part of what we have to make 
sure we do as we work these changes is we do not break things 
that are delivering care to our veterans currently.
    So, that is why we agree with you completely, but what we 
have got to do is do this in a form and fashion so that we do 
not disrupt care.
    Senator Blumenthal. Right. And I am completely in 
agreement. I am hoping that beginning, during the recess, I do 
not know that we can complete it during the recess, but I am 
going to be committing kind of my own, not just our staffs, to 
try to develop a framework for some more rational and common 
sense framework here.
    And I want to emphasize two concepts, common sense and 
choice. The veteran ought to have choices. And the rule ought 
to be one of common sense, as you have applied now on the 40-
Mile Rule. Thank you.
    Mr. Gibson. Yes, sir.
    Chairman Isakson. Secretary, thank you. Dr. Tuchschmidt, 
thank you very much for your service. We appreciate your time.
                                 ______
                                 
Response to Posthearing Questions Submitted by Hon. Richard Blumenthal 
                 to U.S. Department of Veterans Affairs
    Question 1.  Provider Agreements
    Deputy Secretary Gibson's testimony mentioned the need for 
legislation to allow the Department of Veterans Affairs (VA) to engage 
with private providers by establishing provider agreements rather than 
relying only on currently available Federal contracting authorities. 
Utilizing provider agreements rather than Federal contracts would 
hopefully encourage independent private practitioners to establish a 
relationship with local VA facilities and to see veterans as a part of 
their practice. I plan to follow up on the commitment made at the 
hearing to work with VA on developing the legislation necessary to 
address this change, and respectfully request your response to the 
following questions.
    a. What have been the primary complaints that VA has heard from 
private providers about why they are reluctant to contract with VA?
    Response. VA approved care in the community is used to augment VA 
provided health care in order to meet clinical demand as well as to 
address wait times for providing medical services. When hospital care 
or medical services are required the need is usually immediate. In such 
cases, demand may be for infrequent use, or the required care would not 
be at a volume sufficient for a private provider to support a formal 
contract. In the preceding instances it is counterintuitive to the 
overall scope and delivery of health care to potentially postpone the 
delivery of health care in order to negotiate and award a formal 
contract with an individual provider to supply the necessary health 
care.
    VA is under contract with Health Net and Tri-West to build health 
care provider networks across the country. As the contractors work to 
build these networks common complaints from private providers that 
represent barriers to their participation include; reimbursement, 
administrative requirements that direct the return of medical 
documentation, prescription fulfillment and coordination of care. 
Specific examples of these factors include: lower than Medicare rates 
for reimbursement, although some negotiated rates may be higher. 
Reluctance would be on the part of provider who does not want to join 
the existing Contracts given the lower rates, approval for care process 
and prescription fulfillment requirements and lack of autonomy in 
directing patient care.
    Provider agreements provide more opportunities to offer services 
for Veterans from their local providers when care is urgent, a contract 
does not already exist and time does not allow one to be developed. 
Provider agreements may serve to furnish vital and often life-
sustaining medical services, potentially broadening the spectrum of 
care available to the geographical displaced Veteran population in the 
rural and highly rural areas. VA has put forward a proposal that would 
ensure that it is able to provide local care to Veterans in a timely 
and responsible manner, while including explicit protections for 
procurement integrity, provider qualifications, and price 
reasonableness.

    b. What steps will VA take to ensure that it maintains the same 
level of oversight of patient care as it would for patient care that is 
provided within VA rather than purchased from the community?
    Response. VHA works to ensure that all purchased care from the 
community have oversight of quality related to certain standards 
including but not limited to provider credentialing, access to care/
timeliness, patient safety, and patient satisfaction.
    For care purchased outside of the national contracts (primarily 
Health Net and TriWest), the Non-VA Care Medical Care Coordination 
(NVCC) model is VHA's system of business and clinical processes which 
standardize front-end business procedures, improve patient care 
coordination and support future state solutions within its Non-VA 
Medical Care programs.
    Under the NVCC program model, non-VA medical care providers are 
instructed to send VHA the supporting clinical documentation within 14 
days of completion of date of service/visit. Once the referring VHA 
medical facility receives the supporting clinical documentation for the 
care provided, it is then uploaded into the Veteran's electronic health 
record. The uploaded supporting clinical documentation is then linked 
to a consult, alerting the Veteran's VHA provider and care management 
team that the documentation is uploaded and available to review. This 
process ensures the non-VA provider's clinical documentation is 
reviewed and that any additional follow up care that is needed or 
requested by the non-VA provider is addressed by the VA provider.
    NVCC staff monitors and reviews open consults to ensure the non-VA 
provider has submitted the supporting clinical documentation. If the 
documentation is not submitted, the NVCC staff will follow up with the 
non-VA provider and work to retrieve the non-VA clinical documentation.
    To increase governance and oversight of quality and patient safety 
in the field for VA Care in the Community, the Patient-Centered 
Community Care Program (PC3) has adopted a multi-committee structure. 
There are two collaborative committees, one focused on Quality 
Oversight and Safety, and the other is focused on Patient Quality and 
Safety; which have been established by each PC3 contractor to cover all 
the regions under their purview.
    The PC3 regional contractors were required to establish a Joint 
Quality Oversight and Safety Committee that includes clinical staff 
from both contractors as well as select VA clinical staff within each 
region. This Committee reviews and evaluates areas such as:

     Complaints, grievances, and results from patient 
satisfaction surveys;
     Appointment timeliness;
     Medical documentation return;
     Provider listings, to include network provider 
recruitments, re-credentialing, and terminations;
     Commute time;
     Summary reports of patient quality and safety trends that 
are submitted by the VHA/Network Patient Quality and Safety Peer Review 
Sub-committee; and
     Refer as necessary items to the Contracting Officer 
Representative for presentation to the appropriate Regional Steering 
Committee.

    The Joint VHA/Network Patient Quality and Safety Peer Review Sub-
committee is a contractor-led group, comprised of Clinical Lead Health 
System Specialist, Contracting Officer, Medical Director, Medical 
Management Clinician, and Chief Medical Management Officer, focused 
primarily on the review of patient clinical safety events, recommending 
contractual remedies, and providing summary reports to the Joint 
Quality Oversight and Safety Committee. The subcommittee is responsible 
for:

     Reviewing patient clinical safety events;
     Reviewing issues of physician standards of practice;
     Making recommendations to the Contractor for contractual 
remedies with summary reporting to the Joint Quality Oversight and 
Safety Committee;
     Reviewing data related to health care safety and quality;
     Evaluating issues identified through tracking and 
trending;
     Defining, measuring, analyzing, improving and/or 
controlling identified issues;
     Performing peer reviews of Veteran health care delivery; 
and
     Recommending corrective actions within the context of the 
respective health plan contract with the provider in collaboration with 
the Contracting Officer to ensure the actions are within the scope of 
the PC3 contract.

    c. How does VA currently engage directly with providers about 
policies relating to how VA purchases care from the community and how 
would VA communicate any changes to existing policy with private 
providers?
    Response. When it is determined that VA is unable to provide 
medical services requested by the Veteran's VA provider, VA coordinates 
the medical care with the Veteran's preferred non-VA providers through 
telephonic communication. The coordination consists of scheduling the 
appointment for the Veteran and advising the non-VA provider of the 
specific care required, VA reimbursement, and the supporting clinical 
documentation required and ends when it has been confirmed that Veteran 
completed their appointment. During this coordination, VA will give the 
non-VA provider's office contact information, should additional 
questions arise after the referral.
    During this initial contact with the non-VA provider's office, NVCC 
will advise the provider of specific care required and other pertinent 
information related to the claim processing for reimbursement. The 
initial contact for referral to a non-VA provider office is completed 
through many different avenues and communication methods. The varying 
communication methods greatly depend on the working relationship 
developed between the local referring VA facility and the non-VA 
provider; many of these relationships have been developed over years in 
the pursuit of quality care for our Veterans.
    When a Veteran has been authorized care under the PC3 Contracts or 
the Choice Program, the NVCC staff will work with contractor to ensure 
all information needed to provide the care is available. VA also works 
with the contractor to ensure the providers, caring for our Veterans, 
adhere to the terms and conditions of the contract requirements.
    VA strives to provide the highest quality care for our Veteran, and 
VA can only be successful in doing this by keeping open lines of 
communications with non-VA providers during the treatment of its 
Veteran patients. NVCC will stay in contact as needed with the non-VA 
provider's office until the episode of care has been completed, thus 
ensuring the Veteran's medical needs are addressed.
    VA also ensures that communication is available to providers and 
Veterans. One avenue of such communication is the VA Web site, http://
www.va.gov/PURCHASEDCARE. The Web site provides information for non-VA 
medical care providers on the submission of claims and other pertinent 
information for their offices and also contains many references for 
Veterans, including how to request non-VA medical care. The Web site 
provides a link where non-VA medical providers can subscribe to a 
distribution list that emails monthly information specific to 
conducting business with VA. The Web site also provides a link to 
historical messages if any have been missed by a provider. 
Additionally, VA facilities have pamphlets and brochures that also 
describe non-VA medical care options.

    Question 2.  Geographic Challenges
    Deputy Secretary Gibson's testimony included a request to alter the 
current eligibility criteria for the Veterans Choice Program to include 
veterans who face any unusual or excessive burden to accessing a 
medical facility rather than an unusual or excessive burden that is due 
to a geographical challenge.
    a. How would VA anticipate determining the unusual or excessive 
burdens if not by wait time or geography?
    Response. On May 22, 2015, Public Law 114-19 (H.R. 2496), the 
Construction Authorization and Choice Improvement Act, was signed into 
law. This provides VA with the authority to expand eligibility for the 
Veterans Choice Program based on unusual or excessive burden in 
traveling to a VA medical facility. VA appreciates this expanded 
authority which will allow those Veterans who live less than 40 miles 
from a VA medical facility but may face unusual or excessive challenges 
in travel to be eligible. This authority allows VA to consider factors 
such as geography, weather, traffic, or medical conditions to determine 
eligibility for the Veterans Choice Program as any other residence-
based eligibility criteria.

    b. How does VA expect that such a change to the eligibility 
criteria for the Veterans Choice Program would impact utilization of 
other non-VA care options, such as PC3 or Project ARCH?
    Response. VHA recently released a memorandum to VHA staff providing 
mandatory requirements outlining the hierarchy of purchasing Veteran 
Community Care. The memorandum directs that when VA or other Federal 
agencies, to include DOD, Indian Health Service (IHS), or Tribal 
organizations, are unable to provide the care within VHA's timeliness 
standard, then the Veteran must be referred to a non-VA provider under 
the Veterans Choice Program (VCP). On the other hand, if a referring VA 
facility can schedule that service within VHA's timeliness standard, 
the Veteran is not eligible for VCP, specifically, or for non-VA 
medical care in the community in general. When a Veteran is not 
eligible for VCP or the medical services are not covered by VCP (e.g., 
non-skilled home nursing care, durable medical equipment (DME), 
including eyeglasses, non-urgent/non-emergent medications, compensation 
and pension (C&P) examinations, or unscheduled emergency non-VA care), 
VA may then utilize other non-VA care options such as PC3 or Project 
ARCH. Project ARCH is a limited, special project which is intended to 
improve access to eligible Veterans to receive medical services closer 
to home and is only available in five (5) VISNs. When a Veteran is 
eligible for VCP but declines to participate in the program, then VA 
may also utilize other non-VA care options such as PC3 or Project ARCH 
to ensure timely care.
    Under the new hierarchy of purchasing Veteran Community Care, 
utilization of other non-VA care programs may be reduced. This 
potential reduction is attributed to the expanded number of Veterans 
being provided care under VCP. However, there is a possibility that 
Veterans with private third-party insurance will be more reluctant to 
seek care under VCP to avoid any potential out-of-pocket expenses, and 
those Veterans will either choose to wait for an appointment in a VA 
facility or request referral through other non-VA care programs 
available to them.
                                 ______
                                 
  Response to Posthearing Questions Submitted by Hon. Jerry Moran to 
                  U.S. Department of Veterans Affairs
    Question 3.  Provide the current utilization data and analysis of 
non-VA care under the Choice Act, specifically explaining or 
categorizing the health care services, procedures, and treatments that 
are being administered to veterans by non-VA providers and where 
geographically said health care is being provided.
    Response. The data in the attached chart reflects utilization rates 
for only February 2015. As of April 11, 2015, there were 43,971 total 
authorizations under the Choice Act.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Question 4.  What is the dollar amount that the VA has expended on 
non-VA care under the Choice Act?
    Response. Choice Act obligations and expenditures as of March 31, 
2015, are displayed in the following table:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Question 5.  What is the dollar amount that the VA anticipates will 
be expended on non-VA care under the Choice Act as a result of the VA's 
new interpretation of 40-mile criteria as calculated by driving 
distance?
    Response. If all newly eligible Veterans participate in the Choice 
Program, VA estimates an increase in expenditures of $2.4 billion in FY 
2015 and a total increase in expenditures over three years of $7.6 
billion. If less than 100% of newly eligible Veterans participate, VA 
anticipates a total increase in expenditures over three years ranging 
from $921 million to $6.2 billion.

    Question 6.  Please confirm that the Congressional Budget Office 
(CBO) scored the Choice Act at $10 billion considering the 40-mile 
criteria as calculated by driving distance.
    Response. VHA does not have the Congressional Budget Office's 
scoring documents regarding the 40-mile criteria as calculated by 
driving distance.

    Question 7.  Please confirm that under the calculation of geodesic 
distance for the Choice Act, approximately 300,000 veterans would be 
eligible for the Choice program. If this is inaccurate, please explain 
the variance.
    Response. Yes, approximately 300,000 veterans were eligible for the 
Choice Program based on residence when VA used a geodesic measure of 
distance to determine eligibility. VA adopted a driving distance 
measure on April 24, 2015, when it published a second Interim Final 
rule.

    Question 8.  Please confirm that under the calculation of driving 
distance for the Choice Act, approximately 600,000 veterans would be 
eligible for the Choice program. If this is inaccurate, please explain 
the variance.
    Response. Yes, VA estimates that approximately 600,000 veterans are 
eligible for the Choice Program based on residence under the new 
driving distance measure adopted on April 24, 2015.

    Question 9.  In a December 11, 2014 meeting with Senate Moran, in 
response to the Senator's request for cost analysis to permit veterans' 
access to non-VA care when a VA facility within 40 miles of a veterans 
is not capable of offering the care sought by the veteran, the Deputy 
Secretary Gibson referred to VA's internal analysis and cost estimate 
of approximately $30 billion to offer non-VA care to veterans who live 
within 40 miles of level 1 and 2 VA medical facilities. This seems 
consistent with the December 4, 2014 response letter that mentioned 
automatic referral for veterans within 40 miles of VA medical 
facilities could possibly cost tens of billions in non-VA care. Please 
furnish a copy of the analysis and cost estimate the Deputy Secretary 
referenced in the December letter and meeting. Also, were level 3 VA 
medical facilities, such as CBOCs, assessed as part of this cost 
estimate and analysis?
    Response. As you may be aware, VA originally provided data to the 
Congressional Budget Office when they were scoring the Veterans Access, 
Choice, and Accountability Act of 2014. We partnered with our actuarial 
firm, Milliman, to do a similar assessment that provides a range of the 
potential impact. Performing the specific analyses that you have 
requested would require complex assessments at the individual patient 
level, and VA does not house all the data elements required to conduct 
these detailed analyses.
    The analysis discussed in this response was addressed in the 
December 2014 meeting with Senator Moran. Subsequent to that analysis, 
VA produced additional analyses on potential impacts of changes to the 
40-mile eligibility rules which incorporated different assumptions 
which resulted in different cost estimates.
    There are several factors that must be considered when modeling the 
financial implications of a policy that would cover all services at VA 
expense that could not be provided within 40 miles of a Veterans 
residence. There have been other analyses done using existing data, and 
this response attempts to summarize the factors inhibiting detailed 
analysis, while providing synthesis of the information VA does have. 
Much of the analysis required to determine the financial implications 
of a policy that would cover all services at VA expense that could not 
be provided within 40 miles of a Veteran's residence turn upon enrollee 
behaviors that may change as a result of such a policy shift.
    First, some Veterans currently using VA, who reside more than 40 
miles from the services they need, would opt to receive care in the 
private sector instead of at a VA facility. We lack historical 
experience to confidently predict how often and to what degree Veterans 
would elect to receive care outside of VA. Many factors will influence 
the decisions Veterans make regarding where they chose to receive care. 
We believe the most important of these include the Veteran's existing 
relationships with their clinicians, the nature of the services the 
Veteran needs, and the availability of services in the private sector. 
Modeling the last factor becomes even more complex because in VA's 
experience, these services may not be available more timely in the 
community than within VA.
    Second, there is the degree to which Veterans rely upon VA as their 
health care provider of choice. VA estimates 81 percent of enrolled 
Veterans have some other form of insurance, whether it be Medicare, 
Medicaid, TRICARE, or private health insurance. As a result, enrollees 
only get approximately 37 percent of their total health care needs 
covered by VA. Enrollee reliance on VA varies significantly across the 
country, from a low of approximately 14 percent to a high of 
approximately 60 percent. Additionally, there are significant 
differences in the copayments between VA, Medicare, and private health 
insurance that must be considered when estimating the transactional 
costs to the Veteran. A logical assumption is that if Veterans could 
receive all their care at VA expense and at a lower personal cost, 
there will be an increase in reliance on VA services acquired in the 
private sector. Consequently, our methodology attempted to estimate the 
economic impact of this shift in reliance.
    Finally, VA believes it likely that Veterans not currently enrolled 
in VA would find such a new benefit very attractive for the reasons 
stated above. Presently, VA does not have the historical experience to 
model the level of increased enrollment that might be stimulated by 
such a change in policy.
    Turning from the factors impacting use of VA services, another 
concern is the availability of services at VA facilities and the 
location of Veterans relative to those services. In an effort to 
estimate the economic impact of such a policy, VA assumed that most 
specialty care was only available at Level 1 and Level 2 facilities. 
However, some Level 3 facilities do have limited specialty services, 
while not all specialty care is available at all Level 2 facilities. 
The net result is that this approach probably underestimates the true 
economic impact to VA. That is, in most places more complex specialty 
care is only available at Level 1 facilities or even, at times, on a 
more regional basis, such as transplant services.
    In FY 2015, approximately 3.3 million enrollees (35%) lived more 
than 40 miles from a Level 1 or Level 2 VA center. At their current 
level of reliance (approximately 37 percent), these enrollees represent 
$15.5 billion in VA health care expenditures for services that are 
potentially available in private sector.\1\
---------------------------------------------------------------------------
    \1\ Note: This analysis considered all health care services that 
are available for purchase in the private sector and excluded services 
unique to VA (mental health residential rehabilitation, spinal cord 
injury, etc.). Dental services were excluded because of the limited 
eligibility criteria, and Long Term Services and Supports were excluded 
because they are not included in Title 38.
---------------------------------------------------------------------------
    We do not have data on private sector market capabilities and some 
service may not be available in all communities. Again, it is worth 
noting that a majority of these Veterans have other forms of insurance 
and receive care outside VA, the majority under Medicare. Under the 
expanded eligibility criteria, these enrollees could choose to shift 
more of their care to VA but receive it in the private sector.
    In the absence of historical experience to estimate the expected 
level of patient reliance on the VA for care, VA has provided cost 
estimates at two levels of increased reliance to provide an order of 
magnitude of the potential change. The following table summarizes the 
potential additional costs should these enrollees increase their 
reliance from the current level of 37 percent to 70 percent or 100 
percent; the analysis also assumes that all of this additional care 
will be delivered by private sector providers at VA expense. This 
analysis does not consider any stimulated interest in enrolling in VA 
to take advantage of this new benefit.
    In accordance with our current authorities, we assumed that VA 
could purchase these services in the private sector at either (1) 
Medicare rates or (2) at VA's current cost of purchasing care. Note 
that VA often must pay higher than Medicare rates to secure needed 
services in some geographic locations and the VA Fee Unit Costs 
estimates use our actual purchased care experience.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    ** VA Unit Costs-Projected VA unit costs from the 2014 Model (BY13)
    MEDICARE Unit Costs-100% Medicare allowable unit costs
    VA Fee Unit Costs-Based on preliminary analysis of 2013 VA fee care 
unit costs at 105% and 185% of Medicare Allowable for Inpatient and 
Ambulatory Care Services, respectively.

    Lacking specific data on how Veteran preference might change, we 
had to make certain assumptions about the shift in reliance. Using the 
VA Enrollee Health Care Projection Model, Milliman estimates the total 
medical expenditures for the population of Veterans enrolled in VA 
based on demographic and diagnostic information, using VA data and 
actuarial data sets available to them. They then model the reliance on 
VA to assign a share of that total cost to VA care. For this analysis, 
we used those total cost estimates.
    While the lowest estimate might be based on the $15.5 billion VA 
currently spends to provide care to this population, we firmly believe 
limiting this benefit to some level of historical services would not be 
operationally possible. With these very large limitations, a more 
reasonable estimate would be somewhere between $25.3 billion and $46.1 
billion annually, depending on one's assumptions about the shift in 
reliance and ability to cap costs at the Medicare allowable rates.
    Furthermore, to implement such a policy, VA would have to reduce 
the significant investment in staff and infrastructure associated with 
providing the $15.5 billion in care in order to move care to the 
private sector under such a policy. To the extent that VA could not 
contain costs from its own national infrastructure and operations, 
total costs of the policy would be even higher.
    Finally, this analysis does not consider any stimulated interest in 
enrolling in VA to take advantage of this new benefit. It also does not 
take into account any second order impact on the efficiency of existing 
operations at VA medical centers, our educational and research 
programs, nor our emergency preparedness missions.

    Question 10.  Under Choice Act, is the referral process and 
veterans' choice to access non-VA care determined by a veteran and a VA 
medical facility and/or a third-party provider (TriWest/Health Net)?
    Response. Under the Veterans Choice Program, eligible Veterans may 
request non-VA care through the Third Party Administrator (TPA). The 
TPA only schedules care under Choice when an eligible Veteran has 
contacted them to request care under Choice.

    Question 11.  Does the VA calculate and analyze cost for automatic 
referral in the same manner as a cost analysis that factors the 
capabilities of VA medical facilities within 40 miles of a veteran's 
home and the veteran's choice (VA or non-VA)? Please explain the VA's 
methodology and factors in its cost analysis to permit veterans' access 
to non-VA care when a VA facility within 40 miles of a veteran is not 
capable of offering the care sought by the veteran.
    Response. Veterans eligible under the 40 mile criteria may contact 
the applicable Third Party Administrator (TPA) to schedule care in the 
community under the Veterans Choice Program. When these Veterans are 
scheduled for care, they are eligible for a 60-day episode of care. 
During that time, the community provider will bill the applicable TPA 
in accordance with their agreement. VA will then reimburse the TPA in 
accordance with the contractual rates or Medicare rates if the provider 
is providing care under a non-network agreement. VA tracks and trends 
the billing and paid data related to this population of Veterans to 
ascertain usage and average cost of care
    When a Veteran is identified as eligible for the Choice Program as 
a result of VA wait times, they are informed of their eligibility and 
their responsibilities related to accessing care from the Program. If 
the Veteran chooses to opt in and receive care, they contact the 
applicable TPA to schedule their appointment. Similar to the 40 mile 
eligibility, these Veterans are eligible for a 60 day episode of care 
and the TPA pays the community provider and bills VA accordingly. VA 
then tracks and trends the billing and paid data related to this 
population of Veterans to ascertain usage and average cost of care.

    Question 12.  In VA's potential assessment and cost analysis 
factoring capabilities at VA facilities, how does the VA- a.) Forecast 
the services that each veteran might require; b.) Determine whether the 
VA facility within 40 miles of where each veteran lives is capable of 
offering the service(s) they require; and c.) Whether each veteran 
chooses to pursue VA care from another VA facility that does offer such 
service(s) or they choose to seek non-VA care? Please explain.
    Response. The Department of Veterans Affairs (VA) uses the VA 
Enrollee Health Care Projection Model (Model) to project enrollment, 
utilization, and expenditures for the enrolled Veteran population for 
83 categories of health care services for 20 years into the future. The 
Model uses actuarial methods and approaches consistent with those 
employed by the Nation's insurers and public providers, such as 
Medicare and Medicaid.
    First, VA uses the Model to determine how many Veterans will be 
enrolled each year and their age, priority level, and geographic 
location. Next, VA uses the Model to project the total health care 
services needed by those enrollees and then estimates the portion of 
that care that those enrollees will demand from VA. Finally, total 
health care expenditures are developed by multiplying the expected VA 
utilization by the anticipated cost per service.
    Projections are supported by over 15 years of extensive research 
and analyses of the Veteran enrollee population and drivers of demand 
for VA health care, including:

     Enrollee age, gender, income, travel distance to VA 
facilities, and geographic migration patterns
     Significant morbidity of the enrolled Veteran population, 
particularly for mental health services
     Increases in prevalence of service-connected conditions 
and changes in enrollee income levels. These are associated with 
transitions between enrollment priorities.
     Economic conditions
     Enrollee reliance on VA health care versus the other 
health care options available to them, i.e., Medicare, Medicaid, 
TRICARE, and commercial insurance
     Unique health care utilization patterns of Operation 
Enduring Freedom/ Operation Iraqi Freedom/Operation New Dawn (OEF/OIF/
OND), female, and new enrollees
     New policies, regulations, and legislation, such as the 
OEF/OIF/OND combat enrollment eligibility period
     VA health care initiatives and a continually evolving VA 
health care system, e.g., quality and efficiency initiatives
     Changes in health care practice and technology such as new 
diagnostics, drugs, and treatments

    Finally, where a Veteran receives care is based on clinical needs, 
the availability of services within VA, and the Veteran's preferences. 
VHA has developed a model to help with the coordination of non-VA 
medical care; the Non-VA Medical Care Coordination (NVCC) model is a 
system of business processes which standardize front-end business 
processes, improve patient care coordination, and support future state 
solutions within Non-VA Medical Care Programs VHA-wide.
    In the NVCC model, the Veteran is notified of the approval of non-
VA medical care and contacted to identify availability, preferences, 
and needs. Once this information has been obtained, the non-VA medical 
care provider is contacted by NVCC staff to schedule an appointment for 
the Veteran. The appointment is then captured in the Veterans Health 
Information Systems and Technology Architecture (VistA). The Veteran 
and non-VA medical care provider are sent the authorization and the 
appropriate release of information form(s), to ensure the medical 
records are received by VA for continuation of care.

    Question 13.  Please explain the VA's limitations in utilizing 
other VA statutory authorities, such as Title 38, to offer veterans the 
choice to access non-VA care when a VA medical facility within 40 miles 
of a veteran is not capable of offering the care sought by the veteran?
    Response. When a VA facility is unable to provide medical care to a 
Veteran, there are several statutes VA can use to assist in meeting the 
Veteran's health care needs. However, these authorities have 
limitations for authorizing and reimbursing for non-VA medical care, 
which are based on a Veteran's enrollment and eligibility status to 
receive VA health care. The authorities are 38 U.S.C. 1703 (Contracts 
for hospital care and medical services in non-Department facilities), 
38 U.S.C. 1725 (Reimbursement for emergency treatment), 38 U.S.C. 1728 
(Reimbursement of certain medical expenses), 38 U.S.C. 8111 (Sharing of 
Department of Veterans Affairs and Department of Defense health-care 
resources), and 38 U.S.C. 8153 (Sharing of health-care resources).
    More broadly, on May 1, 2015, VA sent to the Congress an 
Administration legislative proposal entitled the ``Department of 
Veterans Affairs Purchased Health Care Streamlining and Modernization 
Act.'' This bill would make critical improvements to the Department's 
authorities to purchase non-VA medical care--specifically, to 
streamline and speed the business process for purchasing care for 
Veterans when necessary care cannot be purchased through contracts or 
sharing agreements. We urge your consideration of this bill, which will 
provide VA the appropriate legal foundation on which to reform its 
purchased care program. This proposal would ensure that VA is able to 
provide local care to Veterans in a timely and responsible manner, 
while including explicit protections for procurement integrity, 
provider qualifications, and price reasonableness. And that is critical 
for Veterans' access to health care.
                                 ______
                                 
  Response to Posthearing Questions Submitted by Hon. Mazie Hirono to 
                  U.S. Department of Veterans Affairs

    Question 14.  Homeless veterans & the Choice Card Program

    While a majority of the focus of this hearing has been on veterans 
whose residential addresses are outside distance requirements in 
current law, could you give an example on how homeless veterans who 
don't have a residential address are treated under the Choice Card 
program?
    Response. VA cannot calculate the distance between the nearest VA 
facility and a Veteran's place of residence without a residential 
address. Accordingly, under VA's implementing regulations, a 
residential address is required to be eligible under the residence 
criteria. Therefore, homeless Veterans without a residential address on 
file are not eligible based on the residence criteria. However, they 
are eligible to be seen through the Choice Program if they experience a 
wait time greater than 30 days for an appointment at their local VAMC.

Question 15.  VA's Communication Efforts

    One of the biggest issues is that there are still veterans that 
aren't aware of the Choice Card and how it works and some have received 
conflicting information from VA staff. What is VA doing to improve its 
communication strategy on the Choice program and train employees 
specifically on the process for veterans to appeal VA decisions denying 
eligibility under the Choice Program?
    Response. To increase Veterans' awareness of the Program, VA will 
continue a comprehensive communications program and outreach efforts to 
correct confusion about the program, as well as improve public 
perception of the Veterans Choice Program.
    VA has completed an outbound call campaign to those Veterans who 
were initially eligible for the Veterans Choice Program based on VA's 
inability to provide an appointment within the wait time goals of VHA. 
This outreach effort was completed to ensure these Veterans were aware 
of their eligibility for the Veterans Choice Program if they had not 
already been informed through their local VA medical center. All 
Veterans who were enrolled prior to August 1, 2014, and any recent 
Combat Veteran who enrolled after that date were mailed a Choice Card 
with an informational letter explaining their eligibility for the 
Choice Program. VA has also provided a Choice Program fact sheet for 
Veterans that can be printed locally and provided to the Veteran upon 
notification of eligibility for the Choice Program. Additionally, VA 
briefed a number of external groups and organizations about the Choice 
Program. These include provider groups as well as Veterans Service 
Organizations (VSO), who assist in reaching out to both providers and 
Veterans.
    To continue our outreach efforts, we recently launched a public 
service announcement for eligible Veterans, viewable at: https://
www.youtube.com/watch?v= i9nnsRlX5b8. We hope all parties will share 
the video to aid in education efforts about the Choice Program.
    Moving forward, VA will target training for staff, tailoring the 
training needs to the type of employee delivering care to Veterans. For 
example, we will deliver additional training sessions to our clinical, 
administrative and purchased-care staff.
    In addition to schedulers, clinicians and facility management, 
``Choice Champions'' directly assist Veterans with questions about the 
Veterans Choice Program. The Choice Champion plays a key role at the 
facility level in implementing and operating the Veterans Choice 
Program. Choice Champions are specifically trained to be local subject-
matter experts on the Choice Program who can explain and advise 
Veterans, other employees, and our stakeholders on the program. There 
currently are more than 900 VHA employees from a variety of functions 
who have been named Choice Champions. Training, resources, and support 
for Choice Champions are available through the VA Pulse Choice Champion 
Community of Practice Web site as well as the VA VACAA Intranet Site. 
Ongoing monthly training calls are conducted to keep the Choice 
Champions engaged.
    When we initially launched the Veterans Choice Program, we mailed 
explanatory letters to over eight million Veterans, with their Choice 
Cards. This month, we are planning to send a mailer regarding the 
Veterans Choice Program to the same group of Veterans. The mailer 
assists Veterans in determining if they are eligible for the Veterans 
Choice Program and provides guidance on how to confirm their 
eligibility and schedule their next appointment. We will continue to 
focus on outreach and communicating with Veterans to ensure they 
understand the Choice Program, to include: establishing a reoccurring 
Veterans survey to measure their knowledge of the program; 
strengthening and expanding our social media strategy for Veterans, 
families, and caregivers; and, conducting program-related town halls at 
VAMCs.
    In the next few weeks, we will continue our robust outreach 
strategy to help Veterans better understand their benefits under the 
Veterans Choice Program, by:

     Collaborating with VSO leadership to share newsletter 
inserts, talking points, social media content, etc. with their 
membership;
     Initiating a re-occurring survey of Veterans to gain an 
understating of their knowledge of the program (The results of this 
survey will be leveraged to identify gaps in communication and training 
among Veterans and VHA staff.);
     Developing a comprehensive social media strategy for 
Veterans and their families and caregivers;
     Placing Veteran Choice Program posters in public locations 
to increase awareness;
     Hosting town halls related to the program at the VAMCs; 
and,
     Finalizing a brochure of information that will be 
available to Veterans.

    Chairman Isakson. We will go immediately to our second 
panel. So, would the panelists please come forward?
    We would like to welcome all of our panelists for the 
second panel and I am going to move quickly so we can be sure 
and get everybody's testimony in before votes start on the 
floor of the Senate.
    In order of appearance, first we will have Roscoe Butler, 
the Deputy Director for Health Care for the American Legion; 
Peter Hegseth, Chief Executive Officer at Concerned Veterans 
for America; Joseph Violante--is that the correct 
pronunciation?
    Mr. Violante. Yes, it is.
    Chairman Isakson [continuing], National Legislative 
Director for Disabled Veterans of America; Mr. Bill Rausch, 
Political Director for Iraq and Afghanistan Veterans of 
America; and an alumni of this Committee, Carlos Fuentes--
Carlos, welcome back--Senior Legislative Advisor to the 
Veterans of Foreign Wars. We are glad to have all of you here. 
We will start with Mr. Butler. Please try to keep your remarks 
within 5 minutes.

 STATEMENT OF ROSCOE BUTLER, DEPUTY DIRECTOR FOR HEALTH CARE, 
                      THE AMERICAN LEGION

    Mr. Butler. Good afternoon, Chairman Isakson, Ranking 
Member Blumenthal, and distinguished Members of the Committee. 
On behalf of our National Commander, Michael Helm, and the 2.3 
million members of the American Legion, we thank you for this 
opportunity to testify regarding considerable possible changes 
to the distance criteria as well as attempting to gain an 
understanding of the issues veterans are facing first-hand.
    Ultimately, all of the stakeholders exploring the 
implementation of the Veterans Access, Choice, and 
Accountability Act want the same thing, for veterans to be able 
to receive timely care without undue burden. Getting those 
veterans to the care they need is everyone's focus. If I were a 
veteran living in the Chesapeake Bay area of Virginia, I would 
face obstacles to reaching a treatment facility that straight-
line distances on a map cannot show.
    Veterans living on the eastern shore of Virginia live 
approximately 60 road miles from the Hampton VA facility and a 
direct line is only 24 miles. However, veterans need to travel 
over the Chesapeake Bay Bridge and tunnels which costs veterans 
$24 round trip and $26 if they do not have an E-Z Pass.
    The problem is not unique in Virginia. In a 2012 report on 
rural health care for veterans, the American Legion noted, 
Veterans who reside on Martha's Vineyard have to take a 45-
minute boat ride to the mainland, followed by a 25-mile drive 
to the CBOC located in Hyannis, MA, to receive care, and if the 
care needed is not provided, the veteran must drive another 80 
miles to the medical center in Providence, RI.
    Today, VA has announced that they will take regulatory 
action to fix part of this problem. Rather than using the ``as 
the crow flies'' standard, they will now consider actual road 
miles traveled. This is a good start. It is a common sense 
solution to getting access to veterans and the American Legion 
is glad the VA is stepping up and taking action to get this 
done.
    But there are more common sense solutions that could be 
implemented. Sometimes the problem revolves around what 
treatments are available close to the veterans. The American 
Legion had veterans tell us, in the Yakima, WA, region, that 
they are being told they must travel over 2 hours to obtain 
audiology services at a VA facility when there are facilities 
right there in town that could provide the same service and 
without waiting 90 days or more because of over-burdened 
facilities.
    The purpose of the Choice card program was to supplement VA 
care by enabling veterans who were finding obstacles to getting 
care within the VA system, whether by time or distance, to get 
care either closer to home or faster than the VA could provide.
    Denying veterans access to care closer to home because 
there is a VA facility that does not offer the service they 
need seems to be a problem of following the letter of the law 
rather than the spirit of the law. If veterans are struggling 
to gain access to care, get them access to care. Common sense 
needs to prevail.
    Right now, these deniers are only creating ill will in the 
veterans community. If the Choice card program is currently 
under-utilized, as Secretary McDonald states, then there should 
be no obstacle interpreting this law in the veterans' favor. 
Before the VA looks to respond to re-purpose those funds 
elsewhere, they should explore all options to make sure the 
veterans who struggle to get care are better served.
    The American Legion believes some common sense reform could 
help make this program effective, delivering care to veterans 
in need. VA has already looked at the 40-mile straight line 
rule and realized it was not helpful in determining how 
difficult it was to get veterans to care they need.
    Now Congress should look at the facility definition to make 
sure a facility only counts as being close to a veteran if it 
actually provides the treatment the veterans need. VA must 
communicate clearly and effectively with the veterans, make 
sure the message for every vision is the same message coming 
out of central office.
    This program came about to help bridge the gap where VA 
struggles to deliver care. Whether because of distance or 
volume of veterans, with a few simple tweaks it could be quite 
effective in doing so.
    Thank you again, Chairman and Ranking Member Blumenthal, 
for turning the Committee's attention to getting this right. I 
appreciate the opportunity to share The American Legion views 
and look forward to any questions you may have.
    [The prepared statement of Mr. Butler follows:]
 Prepared Statement of Roscoe Butler, Deputy Director for Health Care, 
   Veterans Affairs and Rehabilitation Division, The American Legion
    Chairman Isakson, Ranking Member Blumenthal and distinguished 
Members of the Committee, on behalf of Commander Helm and the 2.3 
million members of The American Legion, we thank you and your 
colleagues for conducting this hearing and considering possible changes 
to the distance criteria as well attempting to gain an understanding of 
the issues veterans are facing first-hand. Ultimately, all of the 
stakeholders exploring the implementation of the Veterans Access, 
Choice and Accountability Act want the same thing--for veterans to be 
able to receive timely care without undue burden. Getting those 
veterans to the care they need is everyone's focus.
    The American Legion supported the passage of the ``Veterans Access, 
Choice, and Accountability Act (VACAA) of 2014'' bill that was signed 
into law on August 7, 2014 as Public Law 113-146; as a means of 
addressing revelations that veterans struggled to receive access to 
care within the Department of Veterans Affairs (VA) system. The 
American Legion believes all veterans need to be able to depend on 
equal access to care \1\ and that veterans should not be punished for 
living in a rural area, or even an area with a high volume of veterans 
where demands on the healthcare system make timely appointments 
difficult to schedule.
---------------------------------------------------------------------------
    \1\ Resolution No. 160 ``Veterans Receive the Same Level of 
Benefits''--AUG 2014
---------------------------------------------------------------------------
    When The American Legion reached out to veterans recently to 
determine the level of success the veterans were having accessing the 
VA Choice Card program, we received the following response from a 
female veteran in Virginia:

        I am a 90% disabled Air Force veteran. Last November the VA set 
        me up an appointment to see a physiologist at the end of 
        January, but told me to call this 1-800 number and I could get 
        an appointment in my home town within 30 days. I called. I was 
        told someone would call me back. No one did. I called 3 times 
        in December. First they told me that I had permission for 
        physical therapy. I said, ``This isn't physical therapy.'' The 
        lady told me she would get back to me. They never did. I called 
        one last time the first full week in January and spoke to a man 
        named John. He told me he would put a rush on this. The VA 
        called me on February 6th to set me up an appointment. My 
        appointment was January 20th and I had already been seen. I 
        asked to speak to a supervisor. I explained what happened and 
        her response was, ``Well, it happens.''

    Secretary of Veterans Affairs Bob McDonald recently noted that the 
Choice Card program was being underutilized, with only 27,000 veterans 
having made appointments since the program rolled out in November.\2\ 
At the time, VA stated a desire to be able to ``repurpose'' portions of 
the $10 billion in allocated funds to other programs within VA. The 
American Legion believes it is premature and short sighted to 
reallocate those monies so early into the implementation of this 
program. The Choice Card program was implemented to ensure veterans who 
struggle to receive care have improved access to care. A better 
solution would be to examine the current flaws in the implementation of 
the system, and see if there are ways it could be enhanced to improve 
access to care.
---------------------------------------------------------------------------
    \2\ Federal Eye ``Far fewer veterans use choice card and private 
health than expected, VA says'' The Washington Post February 13, 2015
---------------------------------------------------------------------------
    The American Legion believes improving the implementation of the 
Choice Card program for rural veterans and veterans not located close 
to a VA facility requires addressing three critical concerns:

    1. Revision of the current ``as the crow flies'' standard for 
measuring distance
    2. Reevaluating the current policy that does not take into account 
whether the VA facility within 40 miles offers the treatment the 
veteran needs
    3. Ensuring that the appeals process is clearly communicated to 
veterans who question whether their denial of eligibility for the 
Choice Card program is appropriate
              revising the ``as the crow flies'' standard:
    Despite the best of intentions, veterans are being denied 
enrollment into the Veterans Choice Program, due in part to how the 
bill specified the mileage calculation using ``geodesic'' or ``as-the-
crow-flies'' to determine if a veteran lives more than 40 miles from VA 
care. Under VA's interim final rule \3\ VA calculates the distance 
between a veteran's residence and the nearest VA medical facility using 
a straight-line distance, rather than the actual driving distance. The 
American Legion believes this straight-line calculation is appropriate 
for calculating the distance for airline travel or as the ``crow 
flies,'' but to use this method of calculation for determining the 
distance for driving from a veteran's home to a VA medical facility is 
problematic and does not accurately take into account real driving 
conditions. As a result, veterans who would otherwise be eligible if 
real driving distances were considered are being denied enrollment into 
the Veterans Choice Program.
---------------------------------------------------------------------------
    \3\ 38 CFR Sec. 17.1510(e)
---------------------------------------------------------------------------
    For many veterans they have to travel across mountains, bridges, 
highways, and water to access care at a VA medical facility. Veterans 
who reside on Martha's Vineyard for an example, have to take a 45 
minute boat ride to the mainland followed by a 25 mile drive to the 
CBOC located in Hyannis, Massachusetts to receive care and if the care 
needed is not provided veteran's must drive another 80 miles to the 
medical center in Providence, Rhode Island.\4\
---------------------------------------------------------------------------
    \4\ 2012 System Worth Saving Report on Rural Health Care: http://
www.legion.org/sites/legion.org/files/legion/publications/sws-rural-
healthcare-report-2012-web.pdf
---------------------------------------------------------------------------
    Veterans living on the Eastern Shore of Virginia live approximately 
60 road miles from the Hampton VA facility and a direct line is only 24 
miles. However, veterans need to travel over the Chesapeake Bay Bridge 
and Tunnel which costs veterans $24 round trip. A member of The 
American Legion from the Chesapeake region recently expressed their 
frustration with the situation they face in that region:

        While the Pocomoke CBOC is a well run and professional VA 
        medical facility, the problem that exists for the shore veteran 
        is that the Pocomoke CBOC is under the Baltimore Veterans 
        Administration [sic]. That means any in-depth medical treatment 
        or special testing etc. that a shore veteran requires results 
        in additional travel to Baltimore or Cambridge, MD. Just last 
        week one of our combat veterans at Post 56 was denied a local 
        medical appointment because he lived within this 40 mile radius 
        of the Hampton VA. The fact is that he lives 50.2 miles away 
        from the Hampton VA and he doesn't own a hang glider to make 
        that appointment.

    The 40 mile rule is misleading because of the geographic challenges 
that veterans who live in rural and/or highly rural areas face 
regarding accessing VA health care. Approximately 41 percent or 3.4 
million veterans live in rural and/or highly rural communities with the 
majority living in southern or central portions of the country.\5\ The 
American Legion discovered that one of three veterans who are enrolled 
in the VA resides in a rural and or/highly rural area of the country 
and that number is expected to rise as more servicemembers transition 
out of the service. Veterans living in rural areas of the country are 
faced with many challenges to include the lack of primary and specialty 
health care services and treatments as well as increased time and 
distance that veteran's experiences in traveling to VA health care 
facilities.\6\
---------------------------------------------------------------------------
    \5\ Ibid
    \6\ Ibid
---------------------------------------------------------------------------
    Veterans in these rural communities are concerned that the ``as the 
crow flies'' standard doesn't recognize the challenges involved in 
actually traveling the road miles to reach a facility. The American 
Legion believes the current interpretation of the distance standard 
should be modified to reflect actual distances traveled, as well as 
other intervening factors such as the high tolls faced in some regions. 
This provision was meant to improve access for veterans in rural 
regions who had difficulties accessing VA care. To be truly within the 
intent of the legislation, the rulemaking needs to reflect an attempt 
to overcome the challenges rural veterans face when trying to access 
that care.
 reevaluating the policy regarding treatments offered at va facilities:
    The American Legion's National Commander Michael D. Helm stated 
before the Senate and House Veterans' Affairs Committees that one of 
the biggest challenges he has seen with the implementation of the 
Veterans Choice Card Program is the confusion over VA's definition of a 
VA medical facility. VA regulations defines a ``VA medical facility'' 
as a VA hospital, a VA community-based outpatient clinic (CBOC), or a 
VA health care center, with no consideration as to whether the VA 
medical facility can provide the health care or services the veteran 
requires. In many cases, veterans are being referred from a CBOC to the 
parent VA medical center which can be over 150 miles without taking 
into account travel times and road conditions. This can significantly 
impact veterans the ability to maintain their appointments, which 
directly impacts VA's appointment cancellation and no-show rates.
    Commander Helm related stories of veterans in Kansas being sent 
over 270 miles to a hospital for treatment because they were close to a 
CBOC, but the CBOC didn't offer the treatment they needed, he called 
the practice ``crazy.''
    The American Legion queried our network of over 3,000 accredited 
service officers to hear their accounts of veterans accessing the 
Choice Card program. As service officers, they are the first line of 
contact for many veterans when they run into problems at VA, so 
collecting information from this web of contacts is helpful for 
determining the pulse of how veterans are really faring when 
interacting with VA, whether in the claims and benefits system or the 
healthcare system.
    In Washington State many of the local veterans cannot get the 
service they need at their CBOC so they need to travel over 170 miles 
to the parent facility in Spokane. One veteran The American Legion 
spoke to stated ``I have an appointment that was scheduled on May 5, 
2015, so I called the number on the choice card to see if I can get an 
appointment sooner and received a call nine days later.''
    One service officer attended a Town Hall in Yakima, WA and related 
the following:

        The audience was veterans in their late 80``s and early 90's 
        all the questions were about the wait to get appointment to fix 
        their hearing aids. Some said they have been waiting for over 
        90 days for an appointment and when they got the choice card 
        they were still waiting 90 days for an appointment to get the 
        hearing aide fixed. I know there are other facilities that do 
        hearing tests and give hearing aids beside the contract 
        facility that VA is using in the Walla Walla catchment area. 
        These veterans are driving over two hours one way for hearing 
        aids or appointment which they can get in the community if VA 
        would look into it.

    The purpose of the Choice Card program was to supplement VA care by 
enabling veterans who were finding obstacles to getting care within the 
VA system, whether by time or distance, to get care either closer to 
home or faster than the VA could provide. Denying veterans access to 
care closer to home because there's a VA facility that doesn't offer 
the services they need seems to be a problem of following the letter of 
the law rather than the spirit of the law. If veterans are struggling 
to gain access to care--get them access to care. Common sense needs to 
prevail. Right now, these denials are only creating ill will in the 
veterans' community.
    If the Choice Card program is currently underutilized as Secretary 
McDonald states, then there should be no obstacle to interpreting this 
law in the veterans' favor. Before VA looks to repurpose those funds 
elsewhere, they should explore all options to make sure the veterans 
who struggle to get care are being served.
 ensuring veterans have a clear path to appeal denials of eligibility:
    When a veteran is determined to be ineligible for the Choice Card 
program, there are questions regarding the proper avenue of appeal. The 
American Legion contacted VA Central Office (VACO) regarding the 
appeals process and were informed there is an appeals process the 
veteran is informed of when they are notified of a formal denial of 
eligibility. A veteran has a right to request that VA reconsider their 
decision.\7\ In accordance with VA's regulation, an individual who 
disagrees with the initial decision denying the claim in whole or in 
part may obtain reconsideration by submitting a reconsideration request 
in writing to the Director of the healthcare facility of jurisdiction 
within one year of the date of the initial decision. The 
reconsideration decision will be made by the immediate supervisor of 
the initial VA decisionmaker. The request must state why it is 
concluded that the decision is in error and must include any new and 
relevant information not previously considered. Any request for 
reconsideration that does not identify the reason for the dispute will 
be returned to the sender without further consideration. The request 
for reconsideration may include a request for a meeting with the 
immediate supervisor of the initial VA decisionmaker, the claimant, and 
the claimant's representative (if the claimant wishes to have a 
representative present). Such a meeting shall only be for the purpose 
of discussing the issues and shall not include formal procedures (e.g., 
presentation, cross-examination of witnesses, etc.). The meeting will 
be taped and transcribed by VA if requested by the claimant and a copy 
of the transcription shall be provided to the claimant. After reviewing 
the matter, the immediate supervisor of the initial VA decisionmaker 
shall issue a written decision that affirms, reverses, or modifies the 
initial decision.
---------------------------------------------------------------------------
    \7\ 38 CFR 17.133
---------------------------------------------------------------------------
    In communication with VACO the appeals process was clearly defined. 
Whether the process is being clearly explained or implemented in the 
field is still in question.
    A service officer in New York explained:

        I have had numerous veterans contact me at my office or speak 
        to me at various meetings regarding their denial of eligibility 
        for using their Choice Card. To the best of my knowledge none 
        of them have been offered an opportunity to appeal the denial. 
        We have 5,253 Veterans in Otsego County, NY. Additionally, I 
        know of no one in our county that has been approved to use 
        their Choice Card.

    A service officer from Alabama responded by stating many of the 
issues raised by the veterans he spoke to were in regards to the denial 
of services. In each of those discussions there has been no mention of 
an appeal process or the ability to appeal.
    The information The American Legion has at this time is still 
anecdotal, and requires additional research to make a more definitive 
decision as to whether the process is working as intended in the field. 
Right now, there are too many questions to determine whether VA is, or 
is not, explaining the process as intended. The American Legion 
continues to conduct field visits to VA medical facilities across the 
country, and questions regarding the implementation and effectiveness 
of the appeals process are now a standard part of the field research 
conducted by staff of The American Legion.
    At this time, there is a process in place, but it is important to 
ensure implementation of the process is happening consistently and that 
the process is being clearly explained to veterans in the field. The 
American Legion is committed to ensuring that this is the case through 
careful consideration during field research and site visits.
                               conclusion
    The American Legion still strongly believes the VA is the best 
method for delivering care to veterans, however we also recognize there 
are constraints VA must overcome, such as geography and workload that 
sometimes make this difficult. The Choice Card program, like many 
authorities extended to VA to address areas where they are falling 
short of meeting veterans needs, has great potential to ensure veterans 
get seen in a timely manner, and without undue travel requirements. In 
time, when we study the implementation of the Choice Card program 
before its authority expires, data on how the program was used can be 
helpful in determining where VA must expand to meet veterans' needs, 
and where there are still gaps in service.
    However, the program cannot be implemented by half measures, and 
with one hand seemingly tied behind its back. To be effective, The 
American Legion believes the Choice Card program needs to be 
implemented in a manner consistent with the spirit in which it was 
passed--as a tool to ensure veterans get the care they need, when and 
where they need it. To do this, The American Legion urges VA to adopt 
rule changes that eliminate the straight-line ``as the crow flies'' 
rule, to make common sense corrections that interpret ``facility'' to 
mean a facility that actually has the treatment the veteran needs 
available, and to develop a simple but effective means for veterans to 
resolve their ineligibility questions. If VA cannot or will not make 
these changes of their own volition to serve the veterans who need 
these changes, The American Legion urges Congress to amend the laws to 
make things right.

    The American Legion thanks this Committee for their diligence and 
commitment to examining this critical issue facing veterans as they 
struggle to access care across the country. Questions concerning this 
testimony can be directed to The American Legion Legislative Division 
(202) 861-2700, or wgoldstein@legion.org.

    Chairman Isakson. Thank you, Mr. Butler. You are going to 
get the Blumenthal award for the best use of common sense. That 
term has been used a lot today and I think it is exactly true. 
If we apply common sense to these problems, we could solve them 
all. Thank you for your testimony.
    Mr. Hegseth.

    STATEMENT OF PETER B. HEGSETH, CHIEF EXECUTIVE OFFICER, 
                 CONCERNED VETERANS FOR AMERICA

    Mr. Hegseth. Chairman Isakson, Ranking Member Blumenthal, 
Members of the Committee, thank you for this opportunity. Last 
year's reform law established a temporary Choice card program 
that we are discussing here today. The law was not a silver 
bullet, but it was a good first step. The Choice card, as we 
all know, extends the possibility for private care for veterans 
who wait more than 30 days or live more than 40 miles from the 
VA facility.
    But ask any veteran and they will tell you, Rather than 
choice and better access, the Choice card process is confusing, 
frustrating, and still unacceptably long. There are currently 
millions of so-called Choice cards in the pockets of veterans 
yet there is still very little choice.
    Understanding the closed-door give and take the conference 
committee undertook with consideration for CBO scoring, the 
primary problem has still been VA's execution of the law, 
specifically their commitment to restricting the use of the 
Choice program to those within 40 miles of any VA facility even 
if that facility does not provide the care that is needed.
    VA has chosen to execute the law quite strictly, drawing 
40-mile circles, crow or no crow, around every single VA 
facility choking out Choice in the process. A 100-percent-
disabled veteran from rural California recently contacted our 
organization. His story illustrates the point.
    He lives ten miles from a CBOC. However, that clinic cannot 
provide the care that he needs, ranging from an eye doctor to 
podiatry. For these services, he still travels over 100 miles 
to get his care. Common sense and good faith would tell us that 
he should qualify for the Choice program, but he does not.
    Now, when he calls the information line and waits on hold, 
he is inexplicably told he does not qualify. Finally, because 
there is no clear cut appeal process, he has no recourse for 
appeal. He waits. He is stuck. No explanation, no customer 
service, no common sense, no appeal.
    Instead, a VA-scheduling gatekeeper tells him what he gets, 
when he gets it, and where he will get it. He has a Choice 
card, but he has no choice. For him, absolutely nothing has 
changed. His story is the norm. Every day VA gatekeepers tell 
thousands of veterans that live more than 40 miles away from 
where they actually receive care that they do not have a 
choice.
    Now, technically, VA's implementation is in line with the 
parameters of the law, as we have heard. Something our 
organization, CVA, warned about when the reform law was first 
passed. Without clearer implementation guidelines, we believed 
VA would execute the rules in their favor, undermining the 
intent of the law.
    Bureaucracies reflexively serve their own self-interests, 
and in the case of the Choice card, that is exactly what VA has 
done. Now, only 26,000 veterans have yet to use the program, 
26,000 veterans. Why such under-utilization? According to Helen 
Tierney, Assistant Secretary for Management at VA, the VA has, 
``a strong indication that private care is not veterans' 
preferred choice,'' and that, ``veterans would prefer to remain 
in the VA for their care.''
    Ms. Tierney, a 2014 appointee with little previous health 
care or veterans experience, offered no supporting evidence for 
these sweeping assertions. Of course, the opposite is true. 
Veterans want Choice. A recent VFW survey found that 80 percent 
of their members who should qualify for the Choice program were 
not afforded that choice when they called.
    Almost all of their 2,500 respondents were interested in 
getting private care. Our nationwide polling shows the exact 
same desire. 90 percent of veterans want a choice or a private 
option; 77 percent want that choice even if they have to pay 
more out of pocket for it.
    The Department's incentive is to keep veterans inside the 
VA hospitals regardless of the needs of the veteran. The Choice 
program did not fundamentally shift VA's misaligned incentives. 
It merely nipped at the margins of a self-serving system.
    VA remains VA-centric, rather than veteran-centric. That is 
why, in our recently released, Fixing Veterans Health Care task 
force report, which we are happy to share with everyone on the 
Committee, we propose to truly put the veteran at the center of 
their own health care choice option through the Veterans 
Independence Act.

    [The task force report can be found on the World Wide Web 
at http://cv4a.org/wp-content/uploads/2016/01/Fixing-Veterans-
Healthcare.pdf)]

    In our proposal, the veteran is empowered to truly choose 
the health care products that serve them best. No more 
gatekeepers. Senator Tillis, 40 miles, 500 miles, or 2 miles, 
the veteran has the choice. Central planning is a very 
difficult task no matter how smart those charged with doing it. 
When a veteran chooses, it makes that complication much 
simpler.
    Our plan builds a premium support mechanism, the same one 
that VA employees have, that would allow eligible veterans to 
make the best health care choices for them. How ironic is it 
that VA employees have health care choices, but not veterans? 
Or, for that matter, Senators here today have health care 
choices, but veterans do not.
    Veterans chose to serve. Why can they not choose their 
health care? This hearing is about a card and our report is 
about transforming the VA to provide real choice which can be 
done in a cost-effective way, which we dug into in the report. 
That concept is long past due. The 21st century health care 
delivery model demands choice.
    I hope you will review our bipartisan report which I submit 
for the record (see URL above) humbly. Our report was authored 
by Republican Senator Bill Frist, Democratic Congressman Jim 
Marshall, former VHA Director Mike Kussman, and health care 
expert Avik Roy. We believe it deserves stand-alone 
consideration.
    In closing, the Choice card could be a good first step for 
choice for veterans, provided VA is held accountable to deliver 
it. Until then, the Choice cards millions of veterans have in 
their pocket are barely worth the card stock paper they are 
printed on.
    Thank you for this opportunity and I welcome your 
questions.
    [The prepared statement of Mr. Hegseth follows:]
             Prepared Statement of Peter B. Hegseth, CEO, 
                     Concerned Veterans for America
    Chairman Isakson, Ranking Member Blumenthal, and Members of the 
Senate Veterans' Affairs Committee, thank you for the opportunity to be 
here today and testify on this important topic.
    My name is Pete Hegseth and I am the CEO for Concerned Veterans for 
America, an organization of veterans and military families dedicated to 
fighting for our Nation's veterans; specifically--today--by pushing for 
reforms to the way healthcare is delivered to America's veterans.
    Our organization represents a growing number of veterans and 
military families who refuse to accept the broken status quo. For too 
long, promises have been made, and too few have been kept. 
Implementation of the Choice Card is a perfect example. There are 
currently millions of so-called choice cards in the hands of America's 
veterans; but rest assured--for a myriad of reasons--there is still 
little choice. Hence, today's hearing.
    In August of last year, President Obama signed the Veterans Access, 
Choice and Accountability Act that established a temporary ``choice 
card'' program. We understood then, and fully recognize now, that the 
law was never designed to be a panacea. It was a first step. But rather 
than take that step, the VA has stumbled. Worse, it's barely tried to 
walk--undermining the intent of the choice law through what we believe 
has been confusing and disingenuous implementation.
    No need today to re-litigate the litany of VA scandals over the 
past year--and much longer. As you know, many of those revealed 
scandals had to do with access and appointment scheduling practices 
that masked real, egregious, and in many places criminal wait times for 
America's veterans.
    The Veterans Access, Choice and Accountability Act--specifically 
the Choice Card--was intended to address this access problem, extending 
the possibility of private care to veterans who wait more than 30 days 
for an appointment and/or reside more than 40 miles from a VA 
facility--including a Community Based Outpatient Clinic (CBOC). But ask 
any veteran here, in my organization, or across the country, and 
they'll tell you that, rather than access and appointments getting 
easier--the process is confusing, frustrating, and still unacceptably 
long.
    The primary implementation impediment has been VA's interpretation 
of the law; specifically their decision to restrict the use of the 
Choice program to those within 40 miles of a VA facility, even if that 
facility does not offer the care needed. The law states that veterans 
are eligible if they reside ``more than 40 miles from the medical 
facility of the Department, including a community-based outpatient 
clinic [CBOC], that is closest to their residence.'' VA has taken this 
quite literally--drawing 40 mile, ``as-the-crow-flies'' circles around 
every single VA facility, thereby chocking out choice.
    But, as we all know, many CBOC and small VA facilities do not offer 
a full range of medical coverage. As such, it is often the case that 
veterans are denied the use of the Choice Card because they are less 
than 40 miles from a CBOC, despite the fact that they are unable to 
receive the care they need from that facility. Instead, they still must 
drive hundreds of miles to receive care--even though, if the Choice 
Card was used properly, they could get it in their local community.
    This is illustrated well by a recent call my organization received 
from a 100% disabled veteran from rural California. This veteran lives 
less than 10 miles away from a CBOC, which he often utilizes. However, 
that clinic is unable to provide some of the more substantial health 
care services he requires--ranging the eye-doctor to podiatry. For 
these services, he still travels well beyond 40 miles--often over 100 
miles one way.
    Common sense--and good faith--would tell us that he should qualify 
for the choice program. But he does not. When he calls the Choice 
Program information line, after waiting on hold, he is repeatedly told 
he doesn't qualify. Finally, because there is no clear-cut appeal 
process--he has no recourse for appeal. So, he gave up--and still drive 
long distances and waits too long.
    No explanation. No customer service. No common sense. No appeal. 
Instead, the VA scheduling gatekeeper tell him what he gets, where he 
gets it, and when he gets it. He has a Choice Card, but no choice. 
Nothing has really changed.
    His story is powerful because it's the norm. It's powerful because 
it's the same as hundreds of thousands of other veterans in America. 
They thought they had choice because they know they live more than 40 
miles away from where they actually receive care--but VA's ``choice 
gatekeepers'' on the other end of the phone line determine otherwise.
    Technically, VA's implementation is in line with the letter of the 
law--something CVA warned about when the reform law was first passed. 
Without strict guidelines, we believed VA would bend the rules in their 
favor--which is exactly what has happen. As a result, VA has undermined 
the clear intent of the law. They have met the technical requirements 
of the law while fundamentally undermining the spirit and intent of the 
law. As I said, lots of choice card--but no choice.
    Moreover, VA's attempts to strip--excuse me, reprogram--funding 
away from the Choice Program have come almost immediately. Why? 
Because, as VA has pointed out, only 26,000 veterans have yet to use 
the program. Why such underutilization? According to Helen Tierney--
assistant secretary for management at VA--they have ``a strong 
indication that this [private care] is not veterans' preferred choice'' 
and they ``would prefer to remain in the VA'' for their care. Ms. 
Tierney--a 2014 appointee with little previous health-care or veterans' 
experience--offered no supporting evidence for these sweeping 
assertions.
    The opposite is true--veterans want to use the program, because 
they want choice. A recent VFW survey on the Choice Program found that 
80 percent of their members who should qualify for choice said they 
were not afforded the choice to receive non-VA care. Almost all of 
their 2,500 respondents were interested in getting private care. Our 
nationwide polling of veterans also shows the exact same desire. 
Veterans want health care choices--in fact, 90% do. 77% want options 
outside the VA system--even if they have to pay more out of pocket.
    So, while individual veterans want choice, the powerful VA 
bureaucracy does not. Rather than implement Choice Program reforms 
diligently, VA has delayed implementation and erected technical 
barriers to private choice. As a result, few veterans have been able to 
yet exercise that choice, which is when VA publicly claims veterans 
actually don't want choice. Finally, under the guise of ``doing what 
veterans want,'' VA leadership is now attempting to strip the funding--
and we know what that means. Using classic bureaucratic tactics, VA is 
attempting to write its own self-fulfilling prophecy in order to keep 
veterans inside the system.
    History tells us that no bureaucracy can be trusted to reform 
itself. Only strenuous oversight of the current law by codifying 
reasonable and common-sense distance and time parameters--and further 
reforms that expand choice by truly empowering veterans to choose--will 
ensure that veterans get what they crave.
    In a larger context, we see these problems as part of misaligned 
incentives and priorities at VA. The choice program did not 
fundamentally shift these incentives; it merely worked around the edges 
of a system that has much deeper problems. The Department's incentive 
is to funnel veterans toward VA hospitals, regardless of the needs of 
the veteran. VA is VA centric, rather than veteran centric. The 
interests of VA are not necessarily the same as the interests of 
veterans.
    This is why, in our recently released the Fixing the Veterans 
Health Care task force report, we proposed to put the veteran at the 
center of their own health care choices through the Veterans 
Independence Act. In our proposal, the veteran is empowered to choose 
the health care products that serve them best. Our plan would build a 
premium support mechanism--the same one VA employees have--that would 
allow eligible veterans to make their choices in health care. How 
ironic is it that VA employees have health care choices, but not 
veterans? Or, for that matter, Senators here today have health care 
choices--but veterans do not?
    Our idea is simple, and long overdue: allow the healthcare dollars 
to follow the veteran while recognizing what VHA does best--and 
liberating it to do those things. I hope you will all take a look at 
our bipartisan report, which I will submit for the record.
    The Veterans Access, Choice and Accountability Act remains a good 
first step toward real choices for veterans--provided VA is held 
accountable to deliver real choice. And that starts with codifying what 
40 miles really means, and for that matter, what really constitutes a 
30 day wait. Until then, the choice cards millions of veterans have 
won't be worth the government paper it was printed on.

    Thank you for the opportunity to testify on this important issue, 
and I look forward to working with this Committee to advance real 
choice for our veterans. I welcome any questions. Thank you.

    Chairman Isakson. Mr. Violante.

 STATEMENT OF JOSEPH VIOLANTE, NATIONAL LEGISLATIVE DIRECTOR, 
                   DISABLED AMERICAN VETERANS

    Mr. Violante. Chairman Isakson, Ranking Member Blumenthal, 
Members of the Committee, on behalf of DAV and our 1.2 million 
members, all of whom were wounded, injured, made ill from their 
wartime service, I am pleased to discuss the distance criteria 
contained in the Veterans Access, Choice, and Accountability 
Act.
    The law established two primary access standards for the 
Choice program: Waiting longer than 30 days or traveling more 
than 40 miles. However, due to cost considerations, Congress 
wrote the 40-mile standard in a way that was more restrictive 
than common sense would dictate.
    The 40 miles is measured to the nearest VA medical facility 
in a straight line from point to point, or as the crow flies. 
In addition, the measurement is made from the veteran's 
residence to the nearest VA medical facility even if that 
facility cannot provide the service required.
    DAV believes that 40 miles must be measured as humans 
travel, not as crows fly. Typically, that would be done by 
measuring road mileage, though an argument could be made that 
driving time ought to be considered as well. DAV is pleased VA 
has decided to revise its policy.
    Mr. Chairman, it also makes no sense to measure the 
distance to a facility that is unable to provide the needed 
service. That must also be changed. Even with these changes, 
the 40-mile standard for the program is not a panacea for VA's 
access problems. For some disabled veterans, five miles might 
be too long to travel for primary care, particularly if that 
veteran has severe disabilities. On the other hand, for some 
veterans having to travel 100 or more miles might not be too 
far to receive highly specialized care.
    The most important access standard must always remain what 
is clinically appropriate for each veteran. Mr. Chairman, DAV 
supports these common sense changes only within the broader 
context of how this temporary program was structured.
    First, Congress established a separate mandatory funding 
source to ensure VA would not have to make a choice between 
providing care to veterans at VA or through the Choice program. 
Congress and VA must ensure that funding for non-VA health 
care, however that program is reformed, remains separate from 
funding for the VA health care system.
    Another principle central to our support is coordination of 
care, which is vital to the quality of veterans' care. VA's use 
of third party administrator networks helps to assure medical 
records are returned to VA there are quality control on 
clinical providers, and neither veterans nor VA are improperly 
charged or billed for services.
    Finally, and most importantly, the law included a new 
resource to rebuild VA's capacity to provide timely health 
care. A systemic lack of resources has prevented VA from hiring 
enough medical and clinical professionals or to maintain usable 
treatment space to meet the demand for care by veterans. 
Congress must assure adequate funding for both VA and non-VA 
health care programs.
    Mr. Chairman, it is still far too early to make any 
judgment about whether this new Choice program will function as 
intended, whether it has enough or too much funding, whether it 
will improve access for veterans, or, more important, whether 
it will improve health care outcomes for veterans.
    That is why Congress required the creation of a commission 
on care to study how best to deliver health care to veterans. 
Unfortunately, the law allows the commission only 90 days to 
produce an interim report, and then only 90 additional days to 
submit its final report. That is not enough time for the newly-
constituted commission to examine the issues and come to 
agreement on specific recommendations that would change how 
health care would be delivered to millions of veterans over the 
next two decades.
    We strongly recommend that the commission be provided at 
least 18 months to complete its work and that any interim 
report be required no sooner than 12 months from its first 
meeting. Mr. Chairman, we would also expect that permanent 
changes to the VA system would not be considered until after 
this Congressionally-mandated commission has completed its work 
and allowed other stakeholders to engage in a debate worthy of 
the men and women who served.
    Mr. Chairman, that concludes DAV's testimony. I would be 
happy to answer any questions.
    [The prepared statement of Mr. Violante follows:]
    Prepared Statement of Joseph A. Violante, National Legislative 
                  Director, Disabled American Veterans
    Chairman Isakson, Ranking Member Blumenthal, and Members of the 
Committee: On behalf of the DAV and our 1.2 million members, all of 
whom were wounded, injured or made ill from their wartime service, I am 
pleased to appear before the Committee today to discuss issues raised 
with the implementation of the distance criteria contained in the 
Veterans Access, Choice and Accountability Act of 2014 (VACAA), Public 
Law 113-146.
    As you know, the waiting list scandals of last year and the health 
care access crisis that were uncovered led to the creation of a new, 
temporary ``Choice'' program for certain veterans who were being 
required to wait too long or travel too far to receive timely care at a 
Department of Veterans Affairs (VA) medical facility. The bill 
established two primary access standards to determine when and which 
veterans would be authorized to use the new Choice program: those who 
wait longer than 30 days or travel more than 40 miles, the latter of 
which is the particular focus of today's hearing. Unfortunately, due to 
cost and scoring implications, the 40-mile standard was crafted, 
interpreted and implemented in a way that was more restrictive than 
logic and commonsense might dictate.
    First, the determination of whether a veteran resides more than 40 
miles from the nearest VA medical facility is based on a geodesic 
measurement, essentially the distance in a straight line from point-to-
point, or ``as the crow flies.'' Second, the measurement is taken from 
the veteran's residence to the nearest VA medical facility--even if 
that clinic or medical center cannot provide the service required. As 
has been acknowledged by the law's primary sponsors, these more 
restrictive standards for measuring 40 miles were driven by a need to 
address high cost estimates by the Congressional Budget Office (CBO). 
As a result, the final version of the law that contained these 
restrictive conditions received a lower CBO score than earlier 
estimates. VA has indicated that approximately 500,000 veterans qualify 
under that 40-mile standard. However, with the law now being 
implemented, many observers believe these restrictive conditions are 
not logical or equitable for determining which veterans are eligible to 
participate in this temporary, three-year Choice program. We agree.
    DAV believes that the standard of 40 miles from a veteran's 
residence to the nearest VA health care facility must be measured as 
humans travel, not as crows fly. Typically, that measurement would be 
made in road mileage, similar to VA's Beneficiary Travel program; 
although an argument could be made that driving time ought to be 
considered as well. DAV would support amending Public Law 113-146 so 
that distances are measured using door-to-door driving, not geodesic, 
distances.
    Further, it makes no sense to measure the distance to a facility 
that is unable to provide the needed service. DAV would support 
amending the law to reflect that the nearest VA facility must be one 
that can actually provide the service. We would note that VA's making 
such determinations, though equitable, may not be easy. Whether VA has 
the capability to quickly and accurately determine exactly which 
services are available, and where and when, may require some 
significant upgrades to IT systems and changes in business processes. 
As Congress considers how to make such a change to the Choice program, 
it is imperative that the VA's logistical capabilities be carefully 
considered before establishing implementation timeframes to avoid 
creating expectations among wounded, ill and injured veterans that VA 
might not be able to meet.
    It is important to point out that even with these changes, the 40-
mile standard for the Choice program is not a panacea to solve VA's 
access problems. For some veterans five miles might be too far to 
travel for primary care, particularly if they have severe physical or 
mental disabilities. On the other hand, for some veterans having to 
travel one hundred or more miles might not be too far away to receive 
highly specialized care. Rural people, including veterans, travel 
longer distances than suburban or urban people to gain access to all 
kinds of services, including health services, because they do not have 
the same options as people who live in urban or suburban locations. 
Moreover, when it comes to urgent or emergency care, rigid access 
standards such as 30 days or 40 miles could actually be an impediment 
to receiving timely access to care. In general, the most important 
access standard must always remain what is clinically appropriate for 
each individual veteran.
    Mr. Chairman, while DAV supports these commonsense changes to the 
definition of 40 miles, we do so only in the broader context of how 
this temporary Choice program was structured. In establishing the 
Choice program, Congress also established a separate and mandatory 
funding source to ensure that VA would not be forced to make a choice 
between providing care to veterans who choose to receive their care at 
VA and those who access care through the non-VA Choice program. One of 
the primary reasons that VA's purchased care program has been 
unsuccessful in meeting all veterans' needs is the fact that it does 
not have a separate, mandated funding stream. Going forward, Congress 
and VA must ensure that funding for non-VA health care, however that 
program may be reformed, remains separate from funding for the VA 
direct care system.
    Another principle central to our support for the temporary Choice 
program is coordination, which is vital to the quality of veterans' 
care. VA's use of third-party administrator (TPA) networks helps to 
assure that medical records are returned to VA, that there are quality 
controls on clinical providers and that neither VA nor veterans are 
improperly charged or billed for services. VA's use of the TPA 
structure displays many similarities to VA's Patient Centered Community 
Care (PCCC) program. Through PCCC, VA obtains standardized health care 
quality measurements, required documentation of care, cost-avoidance 
with fixed rates for services across the board, guaranteed access to 
care, and enhanced tracking and reporting of VA expenditures. While the 
use of TPAs for non-VA care does not guarantee that coordination of 
care will produce the same outcomes as an integrated VA health care 
system, it remains an important component of how non-VA care should be 
provided in the future.
    Most important, while the VACAA established a temporary Choice 
program to address an immediate need for expanded access, it also 
included a significant infusion of new resources to rebuild VA's 
capacity to provide timely health care. As we have testified to this 
Committee and others, the underlying reason for VA's access crisis last 
year was a long-term, systemic lack of resources to employ enough 
physicians, nurses and other clinical professionals, along with a lack 
of usable treatment space to meet the demand for care. Regardless of 
how both VA and non-VA care health care programs are reformed in the 
future, until adequate--and separate--funding is available for both, 
veterans will continue to experience unacceptable access barriers.
    While the scandal that enveloped VA last year certainly involved 
mismanagement in Phoenix and at other VA sites, we have no doubt that 
that underlying cause was the mismatch of VA funding and veterans' 
health care demand, a situation that is not new. In fact, it was widely 
discussed and publicly reported to Congress in May 2003 by the 
President's Task Force to Improve Health Care for our Nation's 
Veterans. The task force examined VA chronic funding shortages in the 
wake of inadequate budgets and growing waiting lists, which then 
resulted in a Secretary-level decision to suspend additional 
enrollments by nonservice-connected veterans. At that time, 236,000 
enrolled veterans were waiting more than six months, without any 
defined appointments--a much higher number than during last year's 
crisis. The Administration and Congress failed to address the heart of 
the mismatch or to end the cutoff of enrollment. That mismatch 
continues today. In response, the Administration and Congress made only 
marginal improvements in VA funding to address the heart of the 
mismatch and the cutoff of enrollment eligibility for millions of 
veterans. We believe, and the task force predicted this possibility, 
benign neglect led directly to the 2014 crisis that captured the 
attention of the press, the American people and the Congress. We must 
not allow history to repeat itself.
    Mr. Chairman, over the past decade, DAV, as a partner in The 
Independent Budget (IB), has recommended billions of dollars to support 
VA health care that Congress never appropriated. Over that period, we 
have presented testimony to this Committee and others detailing 
shortfalls in VA's medical care and infrastructure needs. In fact in 
the prior ten budgets, the amount of funding for medical care requested 
by the Administration and ultimately provided to VA by Congress was 
more than $7.8 billion less than what we recommended. Only over the 
past five budgets, the IB recommended $4 billion more than VA requested 
and that Congress approved. For this year, FY 2015, the IB recommended 
over $2 billion more than VA requested.
    The other major contributor to VA's access crisis is the lack of 
physical space to examine and treat veterans in need of care. Over the 
past decade, the amount of funding requested by VA for major and minor 
construction, and the final amount appropriated by Congress, have been 
more than $9 billion less than what the IB estimated was needed to 
allow VA sufficient space to deliver timely, high-quality care. Over 
the past five years alone, that shortfall was more than $6.6 billion, 
and for this year the VA budget request is more than $2.5 billion less 
than the IB recommendation. In fact, the sum of those missing billions 
ironically almost equals what Congress appropriated in Public Law 113-
146 ($17.6 billion).
    Mr. Chairman, in order for us to know where we are and where we 
should be going, we believe it is important to know how we got here. 
Over the past three decades and more, Congress has enacted several 
significant eligibility reform statutes, including Public Laws 97-72 
(1981); 104-262 (1996) and 106-117 (1999). Each of these acts generally 
expanded eligibility for VA health care services, making entry into the 
VA system easier for veterans and, while in, providing them ever more 
health services. In particular, the 1996 eligibility reform act caused 
the most significant change in VA operations, because it was 
accompanied by a massive expansion of veteran enrollments and a 
concomitant establishment of hundreds of freestanding VA community-
based outpatient clinics (CBOC). Millions of veterans responded by 
enrolling in VA health care. It should also be remembered that in the 
years following enactment of the 1996 act VA suffered through three 
consecutive years of flat-line budgets for health care, leading to the 
access problems reported by the task force in 2003.
    By comparison, the VACAA was designed to respond primarily to VA's 
access-to-care crisis that exploded into public view early last year. 
The act provided significant new authority and emergency mandatory 
funding to enable veterans who were on unconscionable waiting lists 
another avenue to access care. The act also provided VA with $5 billion 
to hire more health care staff, and to improve and expand VA health 
care facilities. In addition to the questions about how to define 40 
miles for purposes of the Choice feature, VA has had difficulty in 
meeting the act's aggressive implementation schedule and requirements.
    As mandated, VA has issued Choice cards to nine million enrollees, 
including to me personally and most of my DAV colleagues. I believe it 
is fair to state that in VA's effort to meet tight deadlines 
established in the law for issuing these cards to veterans, VA did not 
adequately prepare its staff across the system to deal with the 
response from veterans and the medical community, creating enormous 
confusion, both within the VA itself, among private providers, and 
throughout the veteran population. That is certainly one contributing 
factor for the apparently low number of authorizations that have been 
issued to veterans to use their cards in seeking private care.
    It is still far too early to make any judgments about whether this 
new Choice program will function as Congress intended, whether it has 
enough or too much funding, if it will improve access for veterans, and 
most important, if it will improve health outcomes. Notably, the law 
does not require, nor has VA put in place, both qualitative and 
quantitative metrics that will transparently allow for such 
evaluations. Congress must continue its oversight to address critical 
questions about access, coordination, and quality of care to veterans 
who participate in the Choice program, compared to those who use other 
VA and non-VA health care programs. It would be reckless to make 
permanent, systemic changes without sufficient data, evidence and 
analysis.
    The VACAA requires the creation of a ``Commission on Care'' to 
study and make recommendations for long-term improvements for VA to 
best deliver timely and high-quality health care over the next two 
decades. Specifically, the law requires that members of this Commission 
be appointed not later than one year after the date of enactment, no 
later than August 7, 2015. The President, Majority and Minority Leaders 
of the Senate, Speaker and Minority Leader of the House, will each 
appoint three members of the Commission, with the President designating 
the Chairman. As of today, no appointments have been made. The first 
meeting of the Commission would take place not later than 15 days after 
eight members have been appointed but the law then only allows the 
Commission 90 days to produce an interim report with both findings and 
recommendations for legislative or administrative actions, and then 
only 90 additional days to submit its final report.
    In our view, 90 days is not sufficient time for a newly constituted 
Commission of 15 individuals--each with his or her own unique 
background, experience and understanding of the current VA health care 
system--to comprehensively examine all the issues involved, conduct and 
review sufficient research and analysis, and discuss, debate and come 
to agreement on specific findings and recommendations that could change 
how health care would be delivered to millions of veterans over the 
next twenty years. In addition, the Commission is required to evaluate 
the results of an independent assessment of the VA health care system 
now being undertaken by a private sector entity or entities. That 
independent assessment has dozens of very specific and complicated 
questions that must be addressed, but it does not have a specific 
deadline for producing a final report. As such, it would be 
impracticable to expect that the Commission could offer any independent 
assessment of that report without sufficient time to review it, and it 
may not even be available until after the Commission's reporting 
deadline. Based on our best judgment, we would strongly recommend that 
the Commission be provided at least 18 months to complete its work, and 
that any interim report be required no sooner than 12 months from its 
first meeting. In addition, we urge you to ensure that the Commission 
receives all the resources it needs to arrive at findings and 
recommendations that are based on independent analysis and judgment.
    Once these changes are made to provide sufficient time and 
resources for the Commission to properly complete its work, we urge 
that all parties expeditiously appoint the members of the Commission so 
that it can begin. We would hope that in making appointments, the 
interests and perspectives of veterans remain most prominent in the 
work of the Commission, including highlighting the needs of wounded, 
injured and ill wartime veterans. While we certainly understand the 
need to consider all points of view, including those of the private 
sector, it is imperative that financial considerations never take 
precedence over the quality and safety of health care provided to 
wounded, injured and ill veterans. Therefore, we urge Congress and the 
Administration to give serious consideration to appointing veterans who 
have firsthand knowledge of and experience with the VA health care 
system.
    We strongly urge that Congress and the Administration allow the 
Commission process to work by refraining from taking any permanent 
actions, whether through legislation or regulation, on matters being 
considered by the Commission. Since enactment of the VACAA, continued 
discussion has occurred in Congress, in the Administration, among 
veterans and by the public about how best to strengthen and reform the 
VA health care system. Also, some ideas have emerged that would 
radically reorganize or even dismantle the VA and eventually privatize 
all of veterans health care. We would certainly hope that these and 
other permanent changes would not be considered until after this 
Commission has had sufficient opportunity to determine how best to 
deliver health care to veterans for the next two decades, submitted its 
recommendations, and then allowed other stakeholders and Congress to 
engage in a debate worthy of the men and women who served, and in 
particular to protect the health of veterans wounded, injured and ill 
due to their military service.
    We strongly believe that the VA health care system has been the 
centerpiece of how our Nation delivers health care to America's 
wounded, injured and ill veterans, and must remain so. Without a robust 
and high-functioning VA, we would be concerned that millions of 
veterans who need, or who will need, VA's specialized services for 
spinal cord injury, amputations, blindness, mental health, long-term 
services and supports, and other needs, may end up with little recourse 
but to fend for themselves in the private sector. Without a critical 
mass to sustain VA health care, the impact on VA's statutory academic 
and research missions would be difficult to project, but their goals 
and past record of success would unquestionably be diminished. That 
would be a tragic loss not only to veterans, but to all Americans who 
have benefited from VA's many health science discoveries and medical 
advances.
    Mr. Chairman, we have long held that no wounded, injured or ill 
veteran should be required to wait too long or travel too far to access 
the health care they have earned through their service and sacrifice. 
The needs of service-connected disabled veterans were not a part of the 
debate when Congress crafted this law. Any adjustment to this act must 
ensure that the needs of service-disabled veterans are met, 
particularly given their reliance on specialized VA services.
    Because VA health care cannot be available at all times and in all 
geographic locations, there will always be a need for non-VA health 
care programs. Our shared goal must be to ensure that those programs 
function as seamlessly and efficiently together with a robust, safe, 
efficient, high-quality VA health system that provides the best health 
outcomes for the men and women who served and sacrificed for our 
Nation.

    Mr. Chairman, this concludes DAV's testimony. I would be pleased to 
address questions from you or other Members of the Committee.

    Chairman Isakson. Thank you very much. Mr. Rausch.

         STATEMENT OF BILL RAUSCH, POLITICAL DIRECTOR, 
            IRAQ AND AFGHANISTAN VETERANS OF AMERICA

    Mr. Rausch. Chairman Isakson, Ranking Member Blumenthal, 
distinguished Members of the Committee, on behalf of Iraq and 
Afghanistan Veterans of America, and our nearly 400,000 members 
and supporters, thank you for the opportunity to share our 
views with you today on a hearing examining the distance 
criteria in the Veterans Access, Choice, and Accountability Act 
of 2014.
    IAVA was an early supporter of and partner with this 
Committee on crafting the Choice Act last year as it became 
apparent that the VA could not fulfill its obligation to 
provide timely access and quality care to the veterans under 
its charge.
    While we fully support the VA and want to see it properly 
resourced, we also believe that no veteran should have to wait 
to receive the care they need and deserve. I came here today 
fully prepared to make two recommendations regarding the 
distance criteria in the Choice Act, as my written testimony 
reflects.
    But as you know, the VA announced this morning that it will 
change the calculation used to determine the distance between a 
veteran's residence and the nearest VA medical facility from a 
straight line distance to driving distance. IAVA strongly 
supports this announcement and we applaud the Secretary for 
having a strong pulse on what veterans are thinking and 
experiencing at the ground level.
    While today's announcement is welcomed, initial 
implementation is exposing an important aspect of the Choice 
program that, based on our members' feedback, also needs 
addressing. We urge this Committee to amend the law to allow 
the VA to measure the distance from the nearest VA medical 
facility that offers the specific treatment or care the veteran 
requires rather than the current 40-mile restriction measured 
by the VA from any facility.
    Currently, the nearest VA medical facility or CBOC may not 
offer the care the veteran needs. Based on a recent poll of our 
members focused on distance eligibility requirements, only 9 
percent have used the program, while 25 percent stated they 
tried to utilize the program, but were denied access.
    From those who were denied access, over half were turned 
away because of distance issues. One example includes a member 
who travels an hour and a half to a VA medical facility for 
urology appointments. This veteran tried to use the Choice 
program to see a urologist in their home town but was denied 
because they lived 40 miles--excuse me--within 40 miles of a VA 
clinic that does not have a urology department.
    Another member told us, ``Because there is a CBOC in my 
area, I was denied. The clinic does not provide any service or 
treatment I need for my primary service-connected disability. 
The nearest medical center in my network is 153 miles away.''
    Now, we are encouraged by the commitments made earlier 
today by the Chairman and Ranking Member and their staff to 
work with the VA and IAVA stands ready to commit and support as 
needed.
    On a related topic, our members report there is confusion 
and a lack of consistent and reliable information being 
provided by VA schedulers concerning the Choice program. In 
recognition of this, we urge the VA to aggressively educate 
their staff to ensure veterans are consistently being informed 
of the Choice program.
    Additionally, efforts need to continue to--excuse me. 
Additionally, efforts need to continue in educating the veteran 
population or members of the program in its eligibility 
requirements. Given its infancy, we believe this is a shared 
responsibility amongst all stakeholders. We cannot lose sight 
of the fact that everyone represented here today should be 
focused on the same goal: doing what is best for our Nation's 
veterans.
    Reforming the distance requirement and ensuring that 
veterans have all the information needed regarding the Choice 
program takes positive steps to meeting this obligation.
    Mr. Chairman, we look forward to working with the 
Secretary, our VSO partners, and this Committee to provide the 
best access and quality of care for all veterans. Thank you 
again for allowing IAVA to be part of this hearing and for 
considering our views and recommendations regarding how to 
improve the Veterans Access, Choice, and Accountability Act of 
2014.
    [The prepared statement of Mr. Rausch follows:]
    Prepared Statement of Bill Rausch, Political Director, Iraq and 
                    Afghanistan Veterans of America

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    Chairman Isakson. Mr. Fuentes.

  STATEMENT OF CARLOS FUENTES, SENIOR LEGISLATIVE ASSOCIATE, 
                    VETERANS OF FOREIGN WARS

    Mr. Fuentes. Chairman Isakson, Ranking Member Blumenthal, 
and Members of the Committee, on behalf of the men and women of 
the VFW and our auxiliaries, I thank you for the opportunity to 
present our views on the Veterans Choice program. Last year, 
this Committee's hard work, with the support of the VFW, led to 
the enactment of the comprehensive and bipartisan Veterans 
Access, Choice, and Accountability Act of 2014.
    This important law commissioned a new veterans Choice 
program which now offers veterans the opportunity to receive 
non-VA care in their communities if VA health care is 
inaccessible. The Choice Act required VA to implement the 
veterans Choice program by November 5th, 2014, meaning VA and 
its partners had 90 days to establish a new veterans health 
care infrastructure, a timeline that most health care experts 
recognize as implausible.
    As a result, the VFW knew that there would be 
implementation challenges that would need to be addressed. In 
an effort to mitigate problems and to gauge veteran 
experiences, the VFW has continued to publicize our national 
Veterans Help Line, 1-800-VFW-1899, and our VA Watch Web site 
where veterans can learn about the Veterans Choice program and 
seek assistance.
    The VFW has also commissioned direct surveys to evaluate 
the experiences and determine if veterans are being served by 
this important program. Based on more than 2,500 survey 
responses and direct feedback from our members, the VFW 
compiled a report analyzing the Veterans Choice program. Our 
initial report includes six specific recommendations to improve 
the delivery of health care for veterans, as well as detailed 
analysis of participation, wait time standard, geographical 
eligibility, and non-VA care issues that must be addressed to 
ensure this important program succeeds in increasing access to 
health care for America's veterans.
    Given the focus of today's hearing, I will limit my remarks 
to what our members believe is the program's biggest flaw: 
Geographic eligibility. Under the Veterans Choice program, 
geographic eligibility is defined in several ways, including 
residing more than 40 miles from the closest VA medical 
facility, which includes community-based outpatient clinics.
    Eligibility for the program has been based on geodesic 
distance, or straight line distance. However, the use of 
straight line distance to calculate geographic burden is not 
aligned with the realities of traveling to a VA medical 
facility. Our members have vehemently opposed the use of 
straight line distance and want it to change.
    The VFW is glad to see our members' concern and advocacy 
have yielded results. We applaud VA for changing the way it 
calculates distance from straight line distance to driving 
distance. This is a step in ensuring that eligibility for non-
VA care is veteran-centric.
    Another common concern we hear from our members is that 
their local CBOCs are unable to provide them the care that they 
need, so VA requires them to travel more than 40 miles to other 
VA facilities.
    One veteran who receives his care at the Jackson, TN, CBOC 
tells us he can no longer make the more than 160-mile trip to 
the Memphis VA medical center for his neurology appointments 
and would prefer to visit a non-VA neurologist closer to home. 
Unfortunately, he is not eligible for the Veterans Choice 
program. However, VA does have the authority to provide this 
veteran and others like him non-VA care options.
    VA must properly utilize all its non-VA authorities and 
programs to ensure veterans are afforded the opportunity to 
obtain care closer to home if VA care is not readily available, 
especially when veterans face an urgent medical need that could 
be more quickly addressed through non-VA care.
    The VFW's report also found that veterans want the ability 
to make health care decisions that are best suited to their 
particular circumstances. Nearly all of the 850 survey 
participants who believe they were eligible for the Choice 
program but were not given the opportunity to participate 
indicated that they were interested in non-VA care options. 
Yet, half of them elected to stay with VA care when given the 
option despite facing access challenges.
    This indicates that private sector care is not always the 
best option for veterans. Many of them acknowledge that the 
care they receive from VA cannot be easily replicated in the 
private sector, especially when the care they receive is 
veteran-centric and not available in the private sector such as 
spinal cord injury disorder, polytrauma treatment and services, 
and specialized mental health care.
    As this Committee considers changes to the distance 
criteria for non-VA care eligibility, we urge you to consider 
the long-term sustainability of the VA health care system and 
its purchased care model. The VFW has found that veterans are 
generally satisfied with the care they receive from VA and 
believe the VA health care system must be preserved.
    It is vital that the VA health care system of the future be 
able to expand capacity when needed, share space and services 
with its community and interagency partners when it can, and 
purchase care when it must to effectively provide timely and 
high quality health care for generations to come.
    Mr. Chairman, this concludes my testimony. I am prepared to 
answer any questions you or the Committee Members may have.
    [The prepared statement of Mr. Fuentes follows:]
  Prepared Statement of Carlos Fuentes, Senior Legislative Associate, 
 National Legislative Service, Veterans of Foreign Wars of The United 
                                 States
                                 
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    Chairman Isakson. Thanks to each of you. A question. I 
think it was Mr. Hegseth who talked about the execution of the 
VA in your comments, and I think that Sloan deserves credit as 
well as the Secretary for the execution, because a week ago, 
all of you wrote your testimony thinking you were coming here 
to try to make a case for the 40-Mile Rule change. Now you have 
all, we have all been caught because VA executed.
    I want to acknowledge that, Sloan. We appreciate that. 
Hopefully, that will be the same result with our first hearing 
when we come back after the break, because after you all 
contact my chief of staff and Richard's chief of staff and we 
work with VA, hopefully we will get the care that you need item 
worked out so that veterans do have access to the care they 
need and the 40-Mile Rule as well. I congratulate the VA on 
what they did and thank all of you on your input.
    My only comment is this: do not let your enthusiasm nor 
your appreciation for the changes made dim your communication 
or your energy in working with the VA. The VA needs your 
support. We need your help in communicating Veterans Choice 
issues to your members.
    I have told a lot of VSOs the following: when I ran my 
company for years, I used to hire mystery shoppers. Those were 
people who posed as customers that I sent as my agents to find 
out if my people were providing the quality services they ought 
to.
    You should be the mystery shoppers for the VA. You should 
be the ones telling the VA the good stories and telling the VA 
the bad stories; or not bad stories, but the difficult stories. 
Give them the best information they can have to make the best 
decision they can.
    I know sometimes you cannot please anybody no matter what 
the situation. But good communication between the VSOs and 
their members and the VA and good communication between the VA 
and the VSOs to be the megaphone to get this information out 
will be of tremendous help. I encourage all of you to work and 
consider that a part of your role. With that said, I will turn 
to Richard Blumenthal.
    Senator Blumenthal. Thank you and let me second the 
Chairman's remarks, that you came here thinking you would 
testify against a rule which now, fortunately, has been 
eliminated. But I think your points about the importance of 
Choice are absolutely right.
    Let me ask Mr. Hegseth, what do you envision that specific 
changes in the current system would enable greater choice?
    Mr. Hegseth. I think there is an expectation from many 
veterans who are receiving a Choice card that they are 
receiving an insurance card. The VA has a big perception 
problem on their hands. There is talk of a Choice card and of 
Choice. In reality, the strict parameters, some for costs, some 
for other reasons, do not allow veterans to exercise that 
choice.
    So, even though things were done in good faith in 
conference committee, in this Committee, and throughout the VA, 
in many places the veteran does not see that, does not 
experience that. The veteran believes, whether they are waiting 
more than--if they live more than 40 miles away, that this is 
something that they now have as an opportunity.
    We did not talk about the time requirement. It is not just 
30 days. VA's implementation has been 30 days of what is 
deemed, ``medically necessary'' by the VA. That is, again, 
another opaque standard that the veteran does not understand 
from when they attempted to schedule an appointment and when 
they have not been seen for 30 days, but they are still told 
they cannot wait. So, I think----
    Senator Blumenthal. I think this is the point that both 
Senator Moran and I and others here have made regarding not 
just waiting 30 days for treatment. It is whether treatment is 
available at that particular facility, which maybe is a change 
that has to be made.
    But what we see is under-utilization of the Choice program, 
and maybe I can ask you and others whether you have on-the-
ground perceptions as to what the reasons are that veterans 
simply are not using the Choice program.
    Mr. Fuentes. Senator, the VFW has been very involved in the 
implementation process and I thank you for the suggestion, Mr. 
Chairman, and you as well, Mr. Ranking Member. We have been 
that partner ensuring VA's implementation of the Choice program 
is aligned with veteran perceptions.
    Our report found that there are certain parameters that do 
not necessarily align. One of those that my colleague here 
alluded to is the clinically indicated date. When VA, for 
example, says--or when my provider says I have to be seen 
within 60 days, if I can only receive an appointment at VA at 
75 days, I am not eligible for the Veterans Choice program.
    We feel that if I cannot receive an appointment within 60 
days, I should be able to receive that appointment within the 
private sector if I choose to. But if I choose to wait those 75 
days, then I can do so. Right now I would have to wait 90 days 
in order to receive that option.
    There are other issues that need to be addressed in terms 
of participation, but, you know, I would like to say that VA 
has been very receptive to any issues that we have identified, 
and we have been working hard with TriWest and Health Net to 
identify solutions. So, I do want to thank Dr. Tuchschmidt for 
allowing us to participate in the discussion.
    Senator Blumenthal. Mr. Rausch.
    Mr. Rausch. Senator, just to echo on that, I mean, I think 
we would all agree that this program is in its infancy and so, 
any insight that we can provide from our members is anecdotal, 
at best. Even the law's commissioned report has not been 
published. In fact, I would suggest that if you spoke to the 
individuals in that report, like many of us have, they are also 
looking for additional data out there. So, I would make that 
point initially.
    But also, just the inconsistency of the program. It is a 
new program, it is a large program. We have a staff member, an 
Iraq War veteran, who called up and was not told about the 
opportunity to utilize the Choice program, or as we have other 
individuals, members, who have been informed. So, there is a 
lot of inconsistency.
    But to the Chairman's point, you know, we view this--and 
there was a military phrase that I used to embrace and many of 
us know--one team, one fight. This is too big for any of us to 
pawn it off on another entity, which is why in my remarks I 
said that we believe that all of us, all stakeholders really 
have to get out there, inform our members, and do the due 
diligence.
    I think I have called the phone number myself probably five 
or six dozen times to do that fishing to make sure that the due 
diligence is being done. But the bottom line is, you know, the 
program is in its infancy. Thank you.
    Senator Blumenthal. Thank you.
    Chairman Isakson. Senator Tillis.
    Senator Tillis. Thank you, Mr. Chair. Mr. Hegseth and Mr. 
Fuentes, you all made reference to something I would like to 
drill down on a little bit. We have had several Veterans' 
Affairs Committee meetings. We have had VSOs speak. And it runs 
the gamut from we want Choice to we want to make absolutely 
certain that our first choice for being in a VA facility is 
held.
    Mr. Hegseth, I think you said that there was a survey where 
some 90 percent of those surveyed wanted Choice. Mr. Fuentes, I 
believe that you said that among, I guess, the membership of 
your VSO, that some 50 percent would prefer care in a VA 
facility.
    When we get this right, we look at the long-range plan. How 
do we get to the right balance and how do we also--there seems 
to be some inconsistency amongst the VSOs which may be the 
unique needs of the members of those VSOs. But how do we get to 
a sort of holistic view of what is the best approach for the 
future for health care for the VA, including the significant 
presence of the brick-and-mortar VA hospitals and clinics, but 
then private choice options? Start with you, Mr. Hegseth.
    Mr. Hegseth. I would say we oftentimes hear--and it is true 
in many cases--when veterans get inside the VA, they like the 
care they get. If that is indeed the case, then veterans 
facilities should not be scared or averse to Choice, because 
veterans given quality access will stay at VA facilities.
    The poll that I referenced is something we did as part of 
our task force to inform our thinking on the subject. What do 
veterans--everyone talks about what veterans want. What do 
veterans really want? Because we can do surveys that have 
preferences based on our memberships, we did a nationwide poll 
of veterans that was bulletproof on sort of representative of 
services and age and genders. Over 90 percent want Choice; 89 
percent want private choice; 77 percent want Choice, even if 
they have to pay a little bit more out of pocket on co-pays up 
front. They just want the option to access outside care if they 
cannot get it from a VA facility.
    We talk about a Choice card and choice implies you can 
actually make the decision. There is a gatekeeper making the 
decision for you based on criteria you cannot see, which is 
not, in fact, real choice. There is a way to do it in a 
fiscally responsible way so veterans are able to make that 
choice for themselves as opposed to someone telling them what 
is best for them.
    Senator Tillis. Thank you.
    Mr. Fuentes.
    Mr. Fuentes. Senator, we consistently hear from veterans 
that they are satisfied with the care that they receive, and I 
just want to expand a bit on that 50 percent. So, that is 50 
percent of the veterans who face an access challenge. These are 
veterans that have to wait longer than 30 days or travel more 
than 40 miles and they still choose VA health care.
    That is because they recognize that the care they receive 
at VA is not easily replicated in the private sector. I will 
give you an example. In Elko, NV, a veteran that contacted us 
said she was interested in seeing her options in the private 
sector.
    But, when she was referred to private sector providers in 
Elko, she found that none of them were viable options because 
she wanted to receive face-to-face mental health care, as she 
was receiving telehealth from VA through Salt Lake. But there 
were no available private sector mental health providers in the 
community that would be able to see her.
    I think, overall VA must remain the guarantor and 
coordinator of care for veterans. That is because VA leads the 
health care industry in many respects. One of them is providing 
a holistic approach to medicine and providing a continuum of 
care that you cannot find in the private sector.
    What it does need to do is better assess where it needs to 
increase capacity, and there are certain instances where it 
will never need to increase capacity because of seasonal or 
temporary spikes in demand. For example, when veterans travel 
down south during the winter VA is going to have to rely on 
non-VA care in those instances. It will not need to increase 
capacity.
    But, VA needs to better assess its future needs and be able 
to determine where the demand is and where it needs to increase 
capacity.
    Senator Tillis. Thank you. And in the interest of time, I 
will just submit follow-up questions. I should have started by 
thanking you all for your past service and continued service 
for our veterans. I look forward to having more discussion.
    Congratulations. Because I think a part of your work, along 
with some good leadership from the VA, is leading to a good 
outcome for the 40-Mile Rule. Now let us go tackle all the 
other things we need to get done. Thank you. Thank you, Mr. 
Chair.
    Chairman Isakson. Thank you, Senator.
    Senator Moran.
    Senator Moran. Mr. Chairman, thank you very much. 
Gentlemen, thank you very much for your testimony. Thank you 
for your service to our country. I appreciate what you are 
saying. We have focused on ``as the crow flies'' and we are 
pleased that the Department has reached a solution that 
corrects that problem. We focused a lot of attention on the 
facility and it does not provide the service that a veteran 
needs.
    It caused me to think. I was reading an email from a 
veteran just now and the answer that they received from the VA, 
``You do not qualify because there is a CBOC. Even though it is 
only open 1 day a week, you still do not qualify,'' which 
caused me to try to determine in the Act, is the word facility 
defined. Maybe the VA could define what a facility is.
    We had staff at a meeting in which they were told because a 
mobile van of the VA goes through the area, that would qualify 
as a facility. Therefore, veterans within that 40 miles of 
where the van drove would not qualify. But the list is longer 
than that.
    We focused really on these two. You have mentioned the 
number of times veterans call, they get the card, or a veteran 
who did not get a card wants to know how to get the card. Do 
they qualify? You call and no one can tell you what to do if 
they tell you they do not qualify. We have tried to get health 
care providers to be qualified by the VA to provide the 
services. That is a challenge.
    The early co-payment, the Secretary talked about that. I am 
pleased to see that they are correcting that, where the veteran 
had to pay the co-payment up front. That is a problem. My point 
is, there is a long series of issues that create a circumstance 
in which a veteran may just shrug their shoulders, throw up 
their hands, become angry, be done and fed up with the program.
    What I wanted to ask you is, what do you make of the budget 
recommendation in the President's budget that says, In the 
coming months, the Administration will submit legislation to 
reallocate a portion of the Veterans Choice program funding to 
support essential investments in the VA system priorities?
    If we have all these problems where we do not yet know what 
is going on, we have not solved many of the problems that the 
veteran faces in accessing the care, why would a decision be 
made that we ought to reallocate money in advance of figuring 
out what all the problems are and how many veterans are 
ultimately going to be interested in using the Choice card? 
What is going on that somebody would reach the conclusion, Let 
us take some money out now because we have different 
priorities?
    Mr. Hegseth. I--go ahead.
    Mr. Butler. I would say from The American Legion 
perspective, in our testimony we said before the VA looks at 
re-purposing any money, they need to make sure that the VA 
Choice program is working the way it was intended. You are 
right; they are right. There are a lot of barriers and 
obstacles to overcome, but working together with Members of 
Congress and the VSOs is the option to ensure that all of the 
barriers are eliminated.
    Then once you work through all the barriers, then you can 
evaluate the effectiveness of the program. I will close in 
saying that, you know, VA has a number of authorities that 
allows VA to contract outside the VA. And you need to take into 
account all of those existing authorities and they need to work 
hand in hand and together.
    You cannot just use one authority. Oftentimes when you say 
you are not eligible for the Choice card, then what about 17.03 
authority and so forth. You have to take all of those things 
into account to make sure that everything that Congress has 
provided to VA is working hand in hand to ensure that the 
health care needs of veterans are being met.
    Mr. Hegseth. I think we would say it is a reflection of 
priorities and incentives. There is a priority for the VA--
there are other priorities for the VA system and they want 
flexibility in transferring those funds. There is also 
incentive for the VA to keep the funds inside the existing 
system.
    What is frustrating for us as I mentioned, 26,000 veterans 
have used the program, and I may have this number not 
completely correct. But about 500,000 have attempted to call in 
and use the program, and the reason is the parameters are 
opaque. Very few veterans can actually use it. Then VA turns 
around and says, See, veterans do not want it. Because they are 
not able to get in the gate because the gatekeeper did not let 
them in.
    Then, when they say that they do not want it by the 
gatekeeper not letting them in, well, we can just de-fund the 
program, and that is where temporary programs go to die. I am 
not impugning the motives of any individual here from the VA. I 
am saying the institutional bureaucracy has a different set of 
incentives than a veteran does who wants care rapidly and does 
not, in that moment, quite care if it is from a VA facility or 
a private facility.
    Senator Moran. Mr. Rausch--I am sorry. Mr. Violante.
    Mr. Violante. Senator, short answer to your question is, 
DAV thinks it is too early now to de-program that money. We 
would like to see how this program is going to work out, 
especially with the changes that are being made and that we 
have talked about. So, it is too early in its infancy.
    Senator Moran. Thank you.
    Mr. Rausch.
    Mr. Rausch. Senator, just briefly, I do not think anyone is 
saying that veterans do not like it. I think, again, we all 
believe it is too early to tell and that is not an area that we 
have heard each other say or the VA say. As far as the 
flexibility piece, I think we were all in this room when the 
Secretary mentioned the checking account with the gas versus 
the food. It is a very interesting analogy.
    As we understand it, we support the flexibility piece for 
the 71 line items. In theory, that would potentially provide 
the opportunity to move money into the Choice program, 
potentially.
    Again, we believe that it is way too early to tell and we 
want to make sure that the data that is not being collected 
gets collected and that we can actually have a better 
understanding of who is using it and why they are using it. 
But, I do not think anyone is saying that people do not like 
it. It is way too early to tell.
    Senator Moran. Thank you.
    Mr. Fuentes. I would just like to add that yes, it is too 
soon. Right now, there is a large gap between the number of 
veterans who are eligible for the Choice program and the amount 
of veterans who are actually receiving appointments through the 
program. Before you consider changing or moving around any 
money, we have to address that gap, and there are a lot of 
different ways to do it.
    One of those is to provide detailed training to the local 
level VA staff that interact with the veterans every day, the 
schedulers, because they are the linchpin, if you will, into 
veterans participating in the program. What we hear now is that 
when veterans call and they have an appointment beyond 30 days, 
many of those schedulers are not aware of the program or, say 
it has not been implemented yet or give another type of 
response that should not be.
    Senator Moran. Thank you all very much.
    Chairman Isakson. Thanks to the Members. Let me ask the VA 
if you will do something, Sloan and Dr. Tuchschmidt. Obviously, 
in the next couple of weeks, hopefully not any longer than 
that, you will have all the parameters done on the 40-Mile Rule 
and the change that is going to take place.
    I think each one of these VSOs and our Committee need to 
know how you are going to notify those veterans who have been 
turned down in the past would be eligible, now that the policy 
has changed. I do not know if you have a record of those turn-
downs.
    Mr. Gibson. We are actually already generating a list of 
those veterans whose availability will be changed and we intend 
to communicate directly to each and every one of them.
    Chairman Isakson. That is the right answer. Thank you very 
much.
    Thanks to all of you for your service to the country. We 
finished exactly when the votes were called. That is pretty 
good.
    [Whereupon, at 4:31 p.m., the hearing was adjourned.]

                            A P P E N D I X

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    VFW Attachment--Initial Report on Veterans Choice Implementation
    
    
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