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MILITARY CONSTRUCTION, VETERANS AFFAIRS, AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2017 

THURSDAY, MARCH 3, 2016 

U.S. SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, DC. 

The subcommittee met at 10:55 a.m., in room SD–124, Dirksen 

Senate Office Building, Hon. Mark Kirk (chairman) presiding. 

Present: Senators Kirk, Murkowski, Boozman, Capito, Cassidy, 

Tester, Murray, Udall, Schatz, Baldwin, and Murphy. 

DEPARTMENT OF VETERANS AFFAIRS 

VETERANS HEALTH ADMINISTRATION

STATEMENT OF HON. DAVID J. SHULKIN, MD, UNDER SECRETARY FOR 

HEALTH 

ACCOMPANIED BY MARK YOW, CHIEF FINANCIAL OFFICER 

OPENING STATEMENT OF SENATOR MARK KIRK

Senator KIRK. The subcommittee is holding a hearing today to review the 2017 budget request. The President’s request is for $78 

billion for funding the Department of Veterans Affairs (VA), an increase of 4.9 percent. About $68 billion of that, 87 percent, is for 

veterans’ medical care. 

This subcommittee and this Congress have given all of the funding that you have requested and more. The answer to every VA 

problem is not just more money and not just give us flexibility. We 

need to talk about the VA’s culture of corruption with results and 

talk about performance. We need to talk about accountability and 

putting veterans first, not bureaucrats. 

First, a few housekeeping items. We will follow the early bird 

rule, alternating sides, majority and minority, to defer opening 

statements, and do 5-minute rounds of questions. And we will do 

a second round if needed. 

Let me now recognize my friend, the man representing the entire 

Big Sandy metroplex in Montana. 

STATEMENT OF SENATOR JON TESTER

Senator TESTER. Thank you, Mr. Chairman, and a metroplex it 

is. I want to thank all of you for being here today in front of the 

appropriations subcommittee, VA military construction (MILCON), 

and I want to thank you for your service to this country’s veterans. 
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You have difficult jobs, and I appreciate the work that you do. In 

many ways, both the Veterans Health Administration (VHA) and 

the Veterans Benefit Administration (VBA) have made some significant progress over the past year, but I am sure that you would 

agree that we have much more work to do. 

The intent of the Choice Act was to give veterans more opportunity to seek timely care in their communities, but as we all 

know, in practice it simply has not happened. Some of the fault lies 

with the VA. Some of the fault lies with us in Congress. And at 

least in my opinion, much of that fault, which we have to bear the 

responsibility for, bears with a third-party administrator, at least 

it does in the State of Montana. 

Veterans in places like Butte continue to be frustrated by the 

time and hassle it takes to schedule appointments through Choice, 

and that is directly related to the third-party administrator. Community providers in places like Billings continue to be frustrated 

by the time it takes to get authorization and reimbursement for 

care. As a result, the largest healthcare provider in my State of 

Montana will not participate in Choice, and that is because of that 

third-party administrator. 

VA employees continue to be frustrated because they have to go 

through a middleman, the third-party administrator, to connect 

veterans with the care that they need. And I have heard these frustrations directly from Montanans, and their frustration, along with 

mine, is not getting less. It is getting greater each day. 

Dr. Shulkin, we have had conversations about this. They are the 

same conversations that I have had with Secretary McDonald multiple times over the past weeks. Yes, fixing the VA, making sure 

that we provide the benefits to our veterans does require some resources, and that is what we are here today to discuss, your budget. 

But it also requires using all the tools that are available to you 

in a more effective way. If you do not have the tools that you need, 

we need to know about it because if you are not effectively using 

the tools you have because of a problem we have created, we need 

to fix it. Today I want to hear more about the budgetary needs of 

the VA, but I also want to hear about how the VA is going to make 

more effective use of the tools that you already have at your disposal. 

Again, I want to thank all of you for being here today. I look forward to this discussion. And, Mr. Chairman, I appreciate your 

work on this subcommittee. Thank you. 

Senator KIRK. I would like to welcome our witnesses. David 

Shulkin is the Under Secretary for Health. Mr. Shulkin—Dr. 

Shulkin—I will give you a chance for first testimony, and we welcome you now. 

SUMMARY STATEMENT OF HON. DR. DAVID J. SHULKIN

Dr. SHULKIN. Thank you. Good morning, Chairman Kirk, Ranking Member Tester. Thank you for this opportunity to appear before you to discuss the Veterans Health Administration’s fiscal year 

2017 and 2018 medical care appropriations budget request. I am 

accompanied today to my right by Mark Yow, who is our Chief Financial Officer. 
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Last year in 2015 it was a very big year for addressing some of 

the critical issues that we have before us in VHA. The Department 

is working hard to rebuild trust with veterans and the American 

people, improving service delivery, setting the long-term course for 

VA excellence and reform, while delivering better access to care 

and benefits. This includes the Department’s MyVA initiative, 

which reorients VA around the veterans’ needs and empowers employees to assist them in developing excellent customer service to 

improve the veteran experience. 

As we enter into 2016, all of us in the VA healthcare system will 

be focused on the MyVA initiative, as well as VHA’s Blueprint for 

Excellence. The Blueprint is aligned with the Department’s strategic plan and supports the MyVA initiative. The Blueprint for Excellence will serve as a guide in all of the programs I mentioned 

in my written testimony. I am confident that the deep sense of mission we carry through the next year and any challenges that we 

may face will be addressed by this. 

VHA’s 2017 budget request will support VA’s goals to expand access to timely, high-quality healthcare, and to continue to transform the Department through its MyVA initiatives. Through the 

fiscal year 2017 budget, we will continue to develop and expand our 

mental healthcare system with the goal to reduce veteran suicides. 

We are committed to increasing access to care for veterans and 

focus our efforts on addressing veterans who have the most significant health needs first. 

We have placed a special emphasis on telehealth services for 

those in rural and remote locations, and for areas that have a 

shortage of specific healthcare professionals, such as psychiatrists. 

This past weekend, in fact, VHA held its second system-wide access 

stand down where every medical center across the country this 

past Saturday was working hard to reduce the wait times for veterans who were waiting for care. 

To address the growing number of women veterans, VA is strategically enhancing the services and access for female veterans. Another high priority is ensuring that all enrolled veterans who require treatment for hepatitis C have access to the necessary therapies. VA is also dedicated to promoting the health and well-being 

of Caregivers. It is important to know that this budget allows us 

to continue our commitment to innovative and cutting-edge medical 

research that is focused on improving veteran health outcomes. 

I want to highlight our Million Veteran Program and research in 

precision medicine that will allow VA to remain a leader in advancing discoveries to improve healthcare for all Americans. 

The cost of fulfilling this care and other obligations to our veterans grows, and we expect it will continue to grow for the foreseeable future. We know that services and benefits for veterans do not 

peak until roughly 4 decades after a conflict ends. Therefore, more 

resources will be required to ensure that VA can provide timely, 

high-quality healthcare into the future. 

We know that we have much work to do in fixing access issues 

for veterans, and filling our critical leadership and healthcare professional openings, and ensuring our new Veterans Choice Plan 

works better for veterans than it has over the past year. I came 

to VA approximately 8 months ago from the private sector to fix 
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these problems, and I am building a leadership team that is now 

committed to doing this and implementing sustainable change. The 

fiscal year 2017 budget requests additional resources which are 

critical to providing veterans the care they have earned through 

their service and sacrifice. 

In conclusion, I appreciate the hard work and dedication of VA 

employees, our partners from veteran service organizations who are 

important advocates for veterans, our community stakeholders, and 

our dedicated VA volunteers. I respect the important role that Congress has in ensuring veterans receive quality healthcare and benefits that they rightly deserve. I look forward to continuing our 

strong collaboration and partnership with the subcommittee, and 

other committees of jurisdiction, and the entire Congress as we 

work together to continue to enhance the delivery of healthcare to 

our Nation’s veterans. 

Mr. Chairman, members of the subcommittee, this concludes my 

remarks. Thank you again for this opportunity to testify. My colleagues and I will be happy to respond to any questions from you 

and members of the subcommittee. Thank you. 

[The statement follows:] 

PREPARED STATEMENT OF HON. DAVID J. SHULKIN, M.D. 

Good morning Chairman Kirk, Ranking Member Tester, and members of the subcommittee. Thank you for the opportunity to appear before you to discuss the Department of Veterans Affairs (VA) Veterans Health Administration (VHA) fiscal 

year 2017 and fiscal year 2018 Medical Care Advance Appropriations budget request. I am accompanied today by Mark Yow, VHA’s Chief Financial Officer. 

The year 2015 was a big year in addressing some of the critical issues that we 

have before us in VHA. VA, as a whole, is working to rebuild trust with veterans 

and the American people, improve service delivery, and set the course for long-term 

VA excellence and reform. This initiative is called ‘‘MyVA.’’ As we enter 2016, all 

of us in the VA healthcare system are focused on the ‘‘MyVA’’ initiative as well as 

VHA’s Blueprint for Excellence. The Blueprint is aligned with the Department’s 

Strategic Plan and supports the ‘‘MyVA’’ initiative. The Blueprint lays out themes 

and supporting strategies for transformation to improve the performance of VA 

healthcare now—making it not only more veteran-centric, but also veteran-driven 

by putting our customers in control of their VA experience. The Blueprint for Excellence will serve as a guide in all of the programs I mention throughout my testimony. 

To ensure that we remain aligned with ‘‘MyVA’’ and the Blueprint for Excellence, 

I have five priorities that are the focus of VHA. First, we must fix the access issues 

and continue to work on reducing the wait time for veterans who need our services. 

Second, VHA must be a model for high-performance care and develop a high-performance network. Third, we must improve staff and employee morale and make VA 

a place where all of our employees feel comfortable and supported in an environment that allows them to do the best job to serve our veterans. Fourth, to ensure 

consistency of best practices and resource prioritization, we must share promising 

practices among facilities and focus on the things that we know are working best 

within VA. Finally, and most important, VHA must restore the trust and confidence 

that the American public and veterans have in the services that we provide. 

The President’s fiscal year 2017 budget request will support VA’s goals to expand 

access to timely, high-quality healthcare; sustain funding to support programs dedicated to ending homelessness among veterans; and continue to transform the Department through its ‘‘MyVA’’ initiative, which reorients VA around veteran needs 

and empowers employees to assist them by delivering excellent customer service to 

improve the veteran experience. 

The cost of fulfilling this care and other obligations to our veterans grows, and 

we expect it will continue to grow for the foreseeable future. We know that services 

and benefits for veterans do not peak until roughly four decades after a conflict 

ends. Therefore, more resources will be required to ensure that VA can provide 

timely, high-quality healthcare into the future. The fiscal year 2017 budget requests 
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additional resources, which are critical in providing veterans the care that they have 

earned through their service and sacrifice. 

IMPROVED ACCESS TO CARE

VA is taking multiple steps to expand capacity at our facilities by focusing on 

staffing, space, productivity, and VA Community Care. The fiscal year 2017 budget 

request provides $65 billion for VA medical care, a 6.3-percent increase above the 

2016 enacted level. The increase in 2017 is driven by veterans’ demand for VA 

healthcare as a result of demographic factors, economic assumptions, investments 

in access, high-priority investments for Caregivers, and new hepatitis C treatments. 

Building on momentum generated by the November 14, 2016, Stand Down, VA 

is continuing efforts to improve access to care, improve the veteran experience, and 

improve the VA employee experience by maximizing accessibility to outpatient services and initiating a second Stand Down held on February 27, 2016. We are re-focusing people, tools, and systems as we embark on a continuous improvement journey towards same day access for primary care and urgent specialty care. 

We are empowering each VA facility to focus on the needs of its specific population under the aforementioned guiding principles. Clinical operations will meet 

customer demand through resource-neutral, continuous improvements at the facility 

level and scaling-up excellence across the enterprise. 

VA has placed special emphasis on increasing access for veterans in rural and remote locations. Telehealth services are mission-critical to the future of VA care to 

veterans. Telehealth utilizes information and telecommunication technologies to provide healthcare services when the patient and practitioner are separated by geographical distance. The fiscal year 2017 budget requests $1.2 billion, an increase of 

$56 million (5.1 percent) above the 2016 enacted level for telemedicine. The number 

of veterans receiving care via VHA’s telehealth services grew approximately 5 percent in fiscal year 2015, and is anticipated to grow by approximately 6 percent in 

fiscal year 2016. In fiscal year 2015, during more than 2.1 million telehealth episodes of care, VHA provided care to more than 677,000 veterans via the three telehealth modalities (i.e., Clinical Video Telehealth, Home Telehealth and Store and 

Forward Telehealth). Forty-five percent of these veterans lived in rural areas, and 

otherwise may have had limited access to VA healthcare. 

We are appreciative of Congress’ support to improve access as we build capacity 

within the VA system to better serve veterans who rely on us for healthcare. My 

testimony will now discuss key initiatives highlighted in the President’s 2017 budget request. 

MENTAL HEALTH CARE (SUICIDE PREVENTION—A CALL TO ACTION)

Long deployments and intense combat conditions require comprehensive support 

for the emotional and mental health needs of veterans and their families. Accordingly, VA continues to develop and expand its mental health system. VA has integrated mental health services into primary care in the Patient Aligned Care Team 

model. Providing mental healthcare within the primary care clinic minimizes barriers that may discourage veterans from seeking mental healthcare. This integrated 

healthcare is not seen in other healthcare systems nationally. 

VA has many entry points for mental healthcare, including 167 medical centers, 

1,035 Community-Based Outpatient Clinics and Outpatient Services sites, 300 Vet 

Centers providing readjustment counseling, 80 Mobile Vet Centers, a national Veterans Crisis Line, VA staff on college and university campuses, and a variety of 

other outreach efforts. 

VA’s Primary Care-Mental Health Integration (PC-MHI) program, which provides 

mental healthcare as a routine component of primary care, is now established in 

98.8 percent of VHA divisions, 98.5 percent of the very large and 81.2 percent of 

large community based outpatient clinics. VHA provided over 1 million PC-MHI encounters in 2015, an increase of 8 percent from 2014 and an increase of 28 percent 

from 2013. 

The fiscal year 2017 budget requests $7.8 billion, an increase of $347 million (4.6 

percent), to ensure the availability of a range of mental health services, from treatment of common mental health conditions in primary care to more intensive interventions in specialty mental health programs for more severe and persisting mental 

health conditions. We will continue to focus on expanding and transforming mental 

health services for veterans to ensure that accessible and patient-centered care, including treatment for posttraumatic stress disorder (PTSD), ensuring timely access 

to mental healthcare, and treatment for military sexual trauma. 

On February 2, 2016, Secretary Robert McDonald and I held a groundbreaking 

event ‘‘Preventing Veteran Suicide: A Call to Action.’’ This day-long summit was at-
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tended by over 230 participants, including members of Congress, the Department 

of Defense, other Federal partners, veterans, their family members, Veterans Service Organizations, academics, and other stakeholders. The primary goal of the event 

was to develop a concrete plan of action to engage more veterans at risk for suicide 

by bringing them into VA’s system. Independent studies have shown that veterans 

who engage in VA care are at lower risk of suicide than those who do not engage 

in VA care. VA continues to develop a proactive action plan with steps to move forward with suicide-prevention efforts based on the feedback and presentations of the 

summit. 

VA is committed to ensuring the safety of our veterans, especially when they are 

in crisis. Our suicide prevention program is based on enhancing veterans’ access to 

high-quality mental healthcare and programs specifically designed to help prevent 

veteran suicide. Losing one veteran to suicide shatters an entire world. Veterans 

who reach out for help must receive that help when and where they need it and 

in terms that they value. 

HEPATITIS C VIRUS

VA places a high priority on ensuring that all enrolled veterans who require treatment for the hepatitis C virus (HCV) have access to the necessary therapies. Chronic infection with HCV is the most common blood-borne infection in the world and 

is a major public health problem facing not only veterans, but the United States in 

general. The fiscal year 2017 budget requests $1.5 billion to capitalize on the availability of new therapies to improve access to and quality of HCV care. These new 

drugs will save veterans’ lives. During fiscal year 2015, VA medical facilities treated 

over 30,000 veterans for HCV with these new drugs with remarkable success, 

achieving cure rates of 90 percent. 

CARE IN THE COMMUNITY

VA is committed to providing veterans access to timely, high-quality healthcare. The 2017 budget includes $12.3 billion for Care in the Community and includes a 

new Medical Care in the Community budget account, as mandated in the VA Budget and Choice Improvement Act (Public Law 114–41). Of the total, $7.2 billion will 

be provided through a transfer of the 2017 advance appropriations for Medical Services to the new budget account, $250 million will be provided through anticipated 

collections in the new account, and $4.8 billion will be provided through the Veterans Choice Program. The 2017 budget will support over 15.6 million visits/procedures for veterans by non-VA providers. 

On October 30, 2015, VA provided Congress with its plan for the consolidation 

and improvement of all purchased care programs into one New Veterans Choice Program (New VCP). 

In today’s complex and rapidly changing healthcare environment where VA is experiencing a steep increase in demand for care, it is essential for VA to work with 

providers in communities across the country to meet veterans’ needs. To be effective, 

these relationships must be principle-based, streamlined, and easy to navigate for 

veterans, community providers, and VA employees. 

CAREGIVER SUPPORT PROGRAM

VHA recognizes the crucial role that family caregivers play. These individuals are 

central to our mission in caring for those who have ‘‘borne the battle.’’ They are 

partners in helping veterans as they recover from injury and illness, in supporting 

veterans in their daily lives in their communities, and in helping veterans remain 

at home. VHA is dedicated to providing caregivers with the support and services 

they need. The fiscal year 2017 budget requests $725 million for the National Caregivers 

Support Program to support nearly 36,600 Caregivers, an increase of $102 million 

(16.4 percent) from fiscal year 2016, of which $629 million in 2017 will be for the 

monthly stipends paid to designated primary family caregivers under VA’s Program 

of Comprehensive Assistance for Family Caregivers, an increase of $140 million (29 

percent) from fiscal year 2016. The increases to the stipend obligations are due to 

an increase in the number of caregivers approved to participate in the Program of 

Comprehensive Assistance as well as the increases in the underlying hourly wages 

used to calculate the monthly stipend rates. 

In addition to the Program of Comprehensive Assistance for Family Caregivers, 

VA offers a variety of services and resources through the General Caregiver Support 

Program, including: local Caregiver Support Coordinators, the National Caregiver 

Support Line staffed by licensed social workers, the VA Web site dedicated to family 

caregivers, as well as the Peer Support Mentoring Program. Additionally, VA offers 
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a variety of training and provides many educational opportunities for caregivers of 

veterans. VA is dedicated to promoting the health and well-being of caregivers who 

care for our Nation’s veterans, through education, resources, support, and services. 

ENDING VETERANS HOMELESSNESS

Ending and preventing veteran homelessness is now becoming a reality in many 

communities. Between 2010 and 2015, overall veteran homelessness dropped by 36 

percent, as measured by the yearly Point-in-Time count, and we have achieved a 

nearly 50-percent decrease in unsheltered veteran homelessness. Through unprecedented partnerships with Federal and local partners, we have greatly increased access to permanent housing, a full range of healthcare including primary care, specialty care, and mental healthcare; employment; and benefits for homeless and at 

risk for homeless veterans and their families. As a result of these investments, in 

fiscal year 2015 alone, VA provided services to more than 365,000 homeless or atrisk veterans in VHA’s homeless programs. Nearly 65,000 veterans obtained permanent housing through VHA Homeless Programs interventions, and more than 

36,000 veterans and their family members, including 6,555 children, were prevented 

from becoming homeless. 

In fiscal year 2017, VA will continue to focus on prevention and treatment services. The fiscal year 2017 budget request of $1.6 billion will support programs such 

as Grant and Per Diem, Veterans Justice Outreach, Supportive Services for Veteran 

Families and case management services for the Department of Housing and Urban 

Development-VA Supportive Housing program. All of these programs will continue 

to work towards achieving a systematic end to homelessness, meaning that there 

are no veterans sleeping on our streets and every veteran has access to permanent 

housing. 

ADVANCES IN MEDICAL AND PROSTHETIC RESEARCH

For over 75 years, VA Research has produced innovative and cutting-edge medical 

and prosthetic advances that are broad and significant. VA research is focused on 

the U.S. veteran population, and allows VA research to uniquely address scientific 

questions to improve veterans healthcare. Most VA researchers are also clinicians 

and healthcare providers who treat patients. Thus, VA research arises from the desire to heal rather than pure scientific curiosity, and yields remarkable returns. 

In 2017, Medical Research will be supported through a $663 million direct appropriation, and an additional $1.2 billion from VA’s medical care program and other 

Federal and non-Federal grants. Total funding for Medical and Prosthetic Research 

will be over $1.9 billion in 2017. 

The 2017 budget submission emphasizes transformational elements emanating 

from VA research and incorporating the evolving science of Genomic Medicine—how 

genes affect health—to support Precision Medicine innovations. This budget directly 

supports the President’s initiative to invest in Precision Medicine to drive personalized medical treatment. 
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Beyond VA’s support of over 2,200 ongoing research projects, VA will leverage our 

Million Veteran Program (MVP)—already one of the world’s largest databases of genetic information—to support several Precision Medicine Initiatives. The first initiative will evaluate whether using a patient’s genetic makeup to inform medication 

selection is effective in reducing complications and getting patients the most effective medication. This initiative will focus on up to 21,500 veterans with PTSD, depression, pain, and/or substance abuse. 

The second initiative will focus on additional analysis of Deoxyribonucleic acid 

(DNA) specimens already collected in the Million Veteran Program. More than 

438,000 veteran volunteers have contributed DNA samples so far. Genomic analysis 

on these DNA specimens allows researchers to extract critical genetic information 

from these specimens. There are several possible ‘‘levels’’ of genomic analyses, with 

increasing cost. Built into the design of MVP and currently funded within VA’s research program is a process known as ‘‘exome chip’’ genotyping—the tip of the iceberg in genomic analysis. Exome chip genotyping provides useful information, but 

newer technologies promise significantly greater information for improving treatments. 

VA proposes conducting the next level of analysis, known as ‘‘exome sequencing’’ 

on up to 100,000 veterans who are enrolled in MVP. This exome sequencing analyzes the part of the genome that codes for proteins—the large, complex molecules 

that perform most critical functions in the body. Sequencing efforts will begin with 

a focus on veterans with PTSD and frequently co-occurring conditions, such as depression, pain, and substance abuse, and expand to other chronic illnesses such as 

diabetes and heart disease, among others. This more detailed genetic analysis will 

provide greater information on the biological factors that may cause or increase the 

risk for these illnesses. 

CONCLUSION

In conclusion, VA is committed to providing the highest quality care, which our 

veterans have earned and deserve. I appreciate the hard work and dedication of VA 

employees, our partners from Veterans Service Organizations—that are our important advocates for veterans—our community stakeholders, and our dedicated VA 

volunteers. I respect the important role that Congress has in ensuring that veterans 

receive the quality healthcare and benefits that they rightfully deserve. I look forward to continuing our strong collaboration and partnership with this subcommittee, our other committees of jurisdiction, and the entire Congress, as we 

work together to continue to enhance the delivery of healthcare services to our Nation’s veterans. 

Mr. Chairman, members of the subcommittee, this concludes my remarks. Thank 

you again for the opportunity to testify. My colleague and I will be happy to respond 

to any questions from you or other members of the subcommittee. 

Senator KIRK. Thank you. And, Mr. Pummill, after 30 years of 

service in the Army infantry, I will say—I want to say that you 

now should be addressed as Colonel Pummill. 

VETERANS BENEFITS ADMINISTRATION

STATEMENT OF DANNY G.I. PUMMILL (RET.), ACTING UNDER SECRETARY FOR BENEFITS 

ACCOMPANIED BY JAMIE MANKER, CHIEF FINANCIAL OFFICER 

Mr. PUMMILL. Thank you, Chairman Kirk. Chairman Kirk, 

Ranking Member Tester, and members of the subcommittee, thank 

you for the opportunity to present VBA’s 2017 budget request. I am 

accompanied today by Jamie Manker, our Chief Financial Officer. 

I am going to pose all the real tough questions to him. 

Our 2017 budget request includes $2.8 billion in discretionary 

funds and $103.6 billion in mandatory funds, reflecting the evergrowing demand for VA benefits and services. The budget also requests a 2018 advanced appropriation of $103.9 billion for VBA’s 

three mandatory appropriations, including compensation and pensions, readjustment benefits, and insurance indemnities. 
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The demand for benefits and services for veterans of all eras continues to increase and will continue to increase decades after conflicts end. For the past 15 years, the percentage of the veteran population receiving disability compensation has increased to 20 percent from 8.5 percent where it had remained steady for the past 

40 years. 

The average disability rating has also increased. For 45 years, 

the average disability rating degree of disability held steady at 30 

percent, but since 2000 that has risen to 49 percent. Despite these 

challenges, VBA has made major strides in increasing productivity 

and reducing the claims backlog. 

As a direct result of our transformation initiatives, we have reduced the pending disability claims inventory by 60 percent and 

the claims backlog by 87 percent. In making this progress, we also 

ensured that quality was not compromised. We have increased 

claim-based accuracy from 83 percent to 90 percent, and issuebased accuracy has improved to 96 percent. Veterans are waiting 

less time for decisions and benefits. The average time to decide a 

claim has improved by 90 days from fiscal year 2014, and the average age of a pending claim has improved by 188 days. 

VBA is also working to further improve services to veterans in 

alignment with the Secretary’s MyVA vision to become the number 

one customer service agency in the Federal Government. We are focused on improving veterans’ experiences in the compensation and 

examination process as one of the Secretary’s MyVA breakthrough 

priorities to help veterans better the exam process as it relates to 

their claims and enhanced procedures for exam scheduling. We are 

working on another MyVA breakthrough initiative to simplify and 

streamline the appeals process so veterans can receive their final 

decision on an appeal within 365 days from filing. 

This budget supports this simplified appeals process which also 

requires Congress’s continued support through legislative action. 

Our budget request includes funding for technology investments 

and other initiatives necessary to provide veterans, their families, 

and survivors with the benefits and services they earned and deserve. By moving to a paperless electronic claims processing system, VBA increased claim and medical issue productivity, which 

helped mitigate the effects of a 131-percent increase in workload 

between 2009 and 2015. The transformation from a paper intensive 

process to a full electronic processing system resulted in VA completing a record breaking 1.4 million disability compensation pension claims for veterans and their survivors. 

Our technological advancements will expand and enhance existing services, and will also focus on delivering key functionality that 

enables quicker, more accurate and integrated claims processing. 

As VBA continues to receive and complete more rating claims, the 

volume of appeals, non-rated claims, and fiduciary exams correspondingly increase. To address this, we are requesting an additional $29.1 million for 300 personnel to process non-rating compensation and pension claims, as well as an additional $25 million 

to help meet veterans’ expectations for more timely claim decisions. 

We appreciate the opportunity to discuss our budget request and 

look forward to working with you to identify and prioritize spending in the best interest of our veterans, their families, and sur-
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vivors, and our Nation. I welcome any questions you and the subcommittee may have. 

[The statement follows:] 

PREPARED STATEMENT OF DANNY G. I. PUMMILL

Chairman Kirk, Ranking Member Tester, and distinguished members of the Senate Appropriations Committee, Subcommittee on Military Construction, Veterans 

Affairs, and Related Agencies: Thank you for the opportunity to present the President’s 2017 budget and 2018 advance appropriations requests for the Veterans Benefits Administration (VBA). I am accompanied today by Mr. Jamie Manker, VBA’s 

Chief Financial Officer. 

SUMMARY OF 2017 BUDGET REQUEST

The President’s 2017 budget for the Department of Veterans Affairs (VA) will 

allow VA to manage the comprehensive array of integrated benefits and services 

provided for our Nation’s veterans, their families, and survivors, administered 

through our nationwide network of 56 regional offices (ROs). The 2017 budget request includes $2.8 billion in discretionary funds and $103.6 billion in mandatory 

funds for VBA. The budget also requests 2018 advance appropriations of $103.9 billion for VBA’s three mandatory appropriations: compensation and pensions, readjustment benefits, and insurance and indemnities. With the resources requested in 

the 2017 budget, VA will provide: 

—Disability compensation for 4.4 million veterans with service-connected disabilities; 

—Dependency and indemnity compensation for 405,000 veterans’ survivors; 

—Pension for 297,000 wartime veterans and almost 210,000 of their survivors; 

—Vocational rehabilitation and employment benefits paid for nearly 141,000 disabled veterans; 

—Education and training assistance for nearly 1.1 million veterans and family 

members; 

—Home loan assistance for over 2 million veterans and family members with active VA loans; 

—Fiduciary activities providing estate protection services for 224,000 VA beneficiaries unable to manage their own funds; and 

—Life insurance programs for over 6 million veterans, servicemembers, and their 

families. 

The President’s 2017 budget request also includes funding for technology investments and other initiatives necessary to timely provide veterans, their families, and 

survivors with the benefits and services they earned and deserve. 

RISING DEMAND FOR DISABILITY BENEFITS

As VBA becomes more productive through our implemented people, process, and 

technology initiatives, the demand for benefits and services from veterans of all eras 

continues to increase, exceeding our capacity to meet it. This increased demand is 

fueled by more than a decade of war, agent orange-related disability claims, a disjointed and redundant claim appeal process, demographic shifts, increased medical 

issues claimed, and other factors. In addition, VBA is providing services to an older 

veteran population with more chronic conditions. 

Veterans’ benefit requirements continue to increase decades after conflicts end, 

which is a fundamental, long-term challenge for VA. Even though the Vietnam war 

ended 40 years ago, the number of Vietnam-era veterans receiving disability compensation has not yet peaked. We anticipate a similar trend for Gulf war-era veterans, of whom only 26 percent have been awarded disability compensation. For the 

past 15 years, the percentage of the veteran population receiving disability compensation increased to 20 percent from 8.5 percent where it had remained steady 

for over 40 years. Moreover, the total number of service-connected disabilities for 

veterans receiving disability compensation grew from 11.8 million in 2009 to 19.7 

million in 2015, an increase of more than 67 percent in just 6 years. This dramatic 

growth, along with estimates based on historic trends, predicts an even greater increase in claims for more benefits as veterans’ age and disabilities become more 

acute. 
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Along with the increase in the number of veterans receiving disability compensation, there has been a significant rise in the average degree of disability compensation granted to veterans. For 45 years, from 1950 to 1995, the average degree of 

disability held steady at 30 percent. But, since 2000, the average degree of disability 

has risen to 49 percent. VBA’s mandatory request for 2017 is $103.6 billion, twice 

the amount spent in fiscal year 2009. 
12 

CLAIMS PROCESSING TRANSFORMATION

VBA underwent the largest transformation in its history by modernizing the delivery of VA benefits and services. To achieve VA’s goal of processing all claims 

within 125 days with improved accuracy, VBA aggressively implemented its transformation plan—a set of actions targeted to reorganize and retain its people, 

streamlined its processes, and deployed technology—and, as of January 31, 2016, 

VBA has achieved the following results: 

—VBA is reducing the pending disability claims inventory. 

—Peak: 884,000 claims in July 2012. 

—Now: 352,554 claims—Improvement: 60 percent. 

—Rating accuracy has improved. 

—12-month claim-based accuracy increased from 83 percent in 2011 to 90 percent—Improvement: 6 percentage points. 

—12-month issue-based accuracy increased from 95 percent in fiscal year 2013 

to 96 percent—Improvement: 1 percentage point. 

—Veterans are waiting less time for decisions and benefits. 

—The average time to decide a veteran’s disability claim was reduced from 218 

days in fiscal year 2014 to 128 days—Improvement: 90 days. 

—The average age of pending disability claims: 

—Peak: 282 days in March 2013. 

—Now: 94 days—Improvement: 188 days. 

—Despite the challenges of an increase in disability claims workload as well as 

increased complexity of workload, VBA has made major strides in increasing its 

productivity. 

—The number of claims pending over 125 days and considered part of the claims 

backlog has decreased. 

—Peak: over 611,000 claims in March 2013. 

—As of January 31, 2016: 79,106 claims—Improvement: 87 percent. 

MYVA TRANSFORMATION—MEETING VETERANS’ NEEDS

In addition to improving the quality and timeliness of disability claim decisions 

through our transformative people, processes, and technology initiatives, VBA is 

working to further improve services to veterans in alignment with the Secretary’s 

MyVA vision: to become the Number 1 customer-service agency in the Federal Government. We are putting the needs and interests of veterans and their families foremost in all that we do. 

VBA has realigned its ROs into 5 districts under the MyVA framework that simplifies internal coordination, facilitates partnering, enhances customer service, and 

allows veterans to more easily navigate VA. As the districts continue to mature, 
13 

there is increased coordination and collaboration among VA entities, veterans, community partners, and stakeholders to transform our agency into a more customercentric organization. VA has enabled 36 Community Veterans Engagement Boards, 

a national network designed to leverage all community assets, not just VA assets, 

to meet local veteran needs. VBA ROs actively participate and engage with communities and Veterans Service Organizations (VSO) to focus on identifying solutions for 

veterans in the local communities and to establish the foundation for a strong 

MyVA community. 

VA launched the Veterans Economic Communities Initiative (VECI) in May 2015 

to complement the goals of MyVA and VA’s Transition Assistance Program, promoting local collaboration, dialogue, and partnerships among organizations that 

serve transitioning servicemembers, veterans, and their families. Economic liaisons 

in each VECI community collaborate and partner with government leaders, businesses, policy experts, educational institutions, and nonprofit organizations to build 

an integrated network of support and resources and to maximize impact to improve 

outcomes for veterans and their families. We are expanding to 25 new VECI communities in early 2016, bringing the total to 50 U.S. metropolitan statistical areas. 

One of VA’s MyVA 12 breakthrough priorities is focused on improving veterans’ 

experiences in the compensation and pension examination process. We are working 

to help veterans better understand the exam process as it relates to their claims. 

We are enhancing procedures for examination scheduling to facilitate veterans’ direct involvement and providing training to ensure VA employees understand how 

their role directly impacts veterans’ experiences and perceptions of VA. 

We are also working collaboratively with our partners on the MyVA breakthrough 

priority to simplify the appeals process. Our goal is to provide veterans with a simple, fair, and streamlined appeals procedure in which they would receive a final appeals decision within 365 days from the filing of an appeal by fiscal year 2021. This 

goal would require Congress’ continued support through legislative action and additional funding. The 2017 budget supports this simplified appeals process, which is 

explained in more detail later. 

TRANSFORMATION INITIATIVES IN THE PRESIDENT’S 2017 BUDGET REQUEST

The MyVA transformation will ensure that VA is a sound steward of taxpayers’ 

dollars as a result of instituting operational efficiencies, cost savings, and service 

innovations to support this and future budget requests. Few realize that when it 

comes to the general operating expense of delivering over $100 billion in benefits 

to over 5.3 million veterans and survivors, VBA spends only 3 cents on the dollar. 

To boost efficiency and employee productivity, VBA moved to paperless claims processing from its historically manual, paper-intensive process. Modernizing to an electronic claims processing system helped VBA increase claim productivity per claims 

processor by 25 percent since 2011 and medical issue productivity by 82 percent per 

claims processor since 2009. This significant productivity increase helped mitigate 

the effects of the 131-percent increase in workload between 2009 and 2015, when 

the number of medical issues rose from 2.7 million to 6.4 million. The President’s 

2017 budget will allow VBA to continue building on the success of these initiatives. 

Veterans Claims Intake Program (VCIP).—VBA shifted to electronic claims processing by converting paper files to eFolders through VCIP, which streamlined processes for receiving digital records and data into the Veterans Benefits Management 

System (VBMS) and other VBA systems. VCIP scans paper claims, converts them 

into digital format, and extracts important data for input into electronic folders. 

VBMS has also expanded document conversion services to include centralized mail 

processing. More than 1.9 billion images have been converted from paper, and over 

99.8 percent of compensation claims are now being electronically processed in 

VBMS. In addition to supporting scanning operations and centralized mail processing, VBA’s 2017 request of $142.9 million will sustain current operations, support 

future conversion efforts, and enable the disposition of paper materials. 

Centralized Mail Initiative (CMI).—CMI consolidates inbound paper mail from 

VA’s ROs to a centralized intake site, expands VBA’s capabilities for scanning and 

conversion of claims evidence, increases electronic claims processing capabilities; 

and assists in converting 100 percent of received source materials to an electronic 

format. VBA has already deployed centralized inbound mail for all ROs. When coupled with VBA’s contract examination vehicle, this will enable VBA to improve and 

enhance the speed and consistency for requesting VA examinations. The 2017 budget request of $26.7 million provides resources to sustain operations and expand this 

initiative to include in-bound and out-bound mail for all benefits through fiscal year 

2020. 
14 

Veterans Benefits Management System (VBMS).—VBMS is a Web-based, paperless 

claims process solution complemented by improved business processes. As the cornerstone of VBA’s claims transformation strategy, VBMS serves as enabling technology to provide veterans and their dependents with timely, high-quality decisions. 

VBA’s shift to electronic folders in VBMS addressed the inefficiencies of the paper 

folders and the problems of misplaced files and records. Through a Web-based application, multiple, geographically separated users can view the electronic folders simultaneously, thereby minimizing the need for sequential processing and eliminating the delays of receipt of paper folders at ROs. VBMS also provides automation 

of processes, such as the receipt of evidence, movement of claims to the next stage, 

and updates to the claims status, which means more veterans are receiving faster 

decisions. As of January 31, 2016, VBA completed over 4.2 million rating decisions 

and processed over 2.4 million claims end-to-end in VBMS. 

Under the VBMS initiative, we will continue to reduce our reliance on legacy systems with planned improvements to the electronic folder, such as adding a unique 

identifier on VA correspondence. When veterans return information with the identifier, it will automatically upload the information in the veteran’s electronic folder. 

Both this fiscal year and in fiscal year 2017, VBMS enhancements will focus on delivering key functionality that enables quicker, more accurate, and integrated claims 

processing while laying the foundation for future, veteran-centric enterprise business capabilities. These include the delivery of electronic service treatment records, 

establishing one authoritative source for veteran contact information, and collaborating with the Board of Veterans’ Appeals (Board) to define the appeals 

functionality needed both at the ROs and as part of the broader appeals modernization efforts. The 2017 budget request for $37.4 million for VBA and $143 million 

for the Office of Information &Technology (OI&T) provides resources to sustain operations and expand future enhancements and initiatives. 

National Work Queue (NWQ).—In conjunction with VBMS, VBA is implementing 

a national workload strategy through NWQ, which will provide greater flexibility in 

management of workload and performance by enabling automated distribution of 

claims across VBA. NWQ prioritizes and distributes our claims inventory at a national level and further standardizes claims processing. NWQ will distribute claims 

electronically from a centralized queue based on RO capacity, so that veterans’ 

claims will be automatically directed across all ROs to efficiently match claim demand with available expertise and processing capacity regardless of RO jurisdiction. 

Generally, the veteran’s State of residence will continue to be the first filter for assigning claims, thereby increasing the likelihood that the RO in the veteran’s State 

of residence will process the claim. Veterans are still able to receive assistance with 

their claims by visiting their RO for personal assistance at the public contact sites, 

going online through eBenefits, and utilizing VBA’s National Call Centers. Veterans, congressional staff, and VSO representatives will continue to have access to 

claim status and information through current venues. The electronic inventory provides real-time updates, no matter where the claim is assigned for processing. The 

2017 budget request of $3.3 million provides resources to fully implement the NWQ 

to all ROs and will expand this initiative to include electronically routing non-rating 

claims (claims that in most cases do not require a rating decision but directly impact benefits, such as survivors pension, burial claims, dependency claims, income 

adjustments, and drill pay adjustments). 

NEW AGENCY PRIORITY GOAL TO IMPROVE DEPENDENCY CLAIM PROCESSING

As VA continues to improve timeliness of disability claim decisions, VA is now 

also focusing on the dependency claims that are the direct result of the dramatic 

increase in completed disability rating decisions and the growth in the number of 

veterans receiving compensation at the higher disability evaluation levels (30 percent and above). VA has established as one of its Agency Priority Goals (APGs) to 

reduce the overall inventory of dependency claims to 100,000 and improve the average days to complete (ADC) dependency claims to 125 days by the end of fiscal year 

2017. Our improvement efforts include expansion of rules-based processing, promotion of online dependency claim submission, and streamlining of policies and procedures. The new dependency claims APG represents a 56-percent improvement 

from the fiscal year 2015 baseline of 227,000 pending dependency claims, and a 43- 

percent improvement from the fiscal year 2015 ADC baseline of 221 days. 

ALL VBA BENEFIT PROGRAMS

The transition from a paper-intensive process to a fully electronic processing system resulted in VA deciding a record-breaking 1.4 million disability compensation 

and pension claims for veterans and their survivors in fiscal year 2015. VBA’s suc-
15 

cess in processing an unprecedented number of rating claims in recent fiscal years 

has also resulted in other unmet workload demands. With increases in rating claims 

receipts and completions, the volume of non-rating claims, fiduciary field examinations, and appeals increases correspondingly. To address this, VBA requests $2.8 billion for general operating expenses, an increase of $118.4 million (4.4 percent) over 

the 2016 enacted level. These resources will support 22,171 full-time equivalent 

(FTE) employees and includes an additional $29.1 million for 300 FTE to process 

non-rating compensation and pension claims. In 2015, VA completed nearly 37-percent more non-rating work than in 2013 and 15-percent more than in 2014. These 

additional FTE are needed to reduce the non-rating claims inventory and provide 

veterans with more timely decisions on non-rating claims. To ensure that all aspects 

of the claims process are improved for veterans, VBA is also requesting an additional $25 million to help meet veterans’ expectations for more timely claim decisions, for a total increase of $118.4 million over the 2016 enacted level. 

This budget will allow VBA to administer compensation and pension benefits to- taling $86 billion to over 5.3 million veterans and survivors. It will also enable VA 

to administer education benefits and vocational rehabilitation and employment benefits and services to over 1.2 million participants; guarantee more than 429,000 new 

home loans; and provide life insurance coverage to 1 million veterans, 2.2 million 

servicemembers, and 2.8 million family members. 

Insurance.—VBA’s insurance program maintains life insurance programs, giving 

financial security and peace of mind to servicemembers, veterans, and their families. In 2017, we anticipate that our insurance programs will provide $1.2 trillion 

of insurance coverage to 2.2 million servicemembers, 1 million veterans, and 2.8 million spouses and children. The 2017 budget request for $35.4 million, of which 

$879,000 is in the general operating expenses appropriation and $34.5 million is reimbursable by the Insurance funds, will support 345 FTE and provide 

servicemembers and their families with universally available life insurance, as well 

as traumatic injury protection insurance for servicemembers. 

Education.—VA’s education programs provide education and training benefits to 

eligible servicemembers, veterans, and dependents. Education programs assist them 

in their readjustment to civilian life and also help the armed forces with recruitment and retention of members. In addition, these programs enhance our Nation’s 

economic competitiveness by developing a more highly educated and productive 

workforce. Through the Post-9/11 GI Bill program, as of February 8, 2016, we have 

issued approximately $60.4 billion in benefits payments to 1,546,035 individuals and 

their educational institutions since the program’s inception in August 2009. With 

the successful automation of Post-9/11 GI Bill claims, we are currently issuing benefits to the majority of beneficiaries in an average of 7 days at 99-percent accuracy. 

The 2017 budget request is $212.4 million and 1,904 FTE to continue providing veterans, servicemembers, Reservists, and qualified family members with such educational resources. 

Vocational Rehabilitation and Employment (VR&E).—The VR&E program provides the services and assistance necessary to enable veterans with service-connected disabilities to become employable and obtain and maintain suitable employment, or, to the maximum extent feasible, achieve independence in daily living. 

VR&E services include career vocational counseling, job search assistance, and postsecondary training for service-disabled veterans. VBA seeks to enhance outreach 

and service delivery of education and vocational counseling services. Counselors 

from VR&E and Integrated Disability Evaluation System, as well as contract rehabilitation counselors will provide these counseling services through the VetSuccess 

on Campus programs at more than 94 schools. 

Our alignment with the MyVA initiatives and objectives include investments in 

the Veterans Employment Center (VEC), which provides transitioning 

servicemembers, veterans, and their families with a single authoritative Internet 

source that connects them with job opportunities, and provides tools to translate 

their military skills into plain language and build a profile that can be shared—in 

real time—with employers. Employers have made commitments to hire over a million individuals and over 2.2 million private- and public-sector jobs are listed on the 

VEC. In addition, our Transition GPS program helps separating servicemembers 

prepare for civilian life by providing benefits briefings and other transition activities. So far, VBA has provided over 45,000 benefits briefings, career technical training courses, and support for capstone events to over 550,000 attendees. (Because 

servicemembers and their family members can attend more than one briefing, this 

count does not represent unique servicemembers). As previously mentioned, VBA is 

involved in the MyVA Economic Opportunity Campaign, which involves the collaboration with public and private partners in communities across the country to help 

connect and amplify available resources and support for veterans and their families. 
16 

The VR&E program request is $331.3 million and 1,594 FTE. This funding will 

help ensure that VA continues to build pathways to meaningful career opportunities 

for veterans by bringing them together with educators and employers across U.S. 

cities and communities and leveraging unique VA and interagency programs and resources to improve economic outcomes for veterans. 

Home Loan Guaranty.—Our request of $170 million and 907 FTE for the housing 

program is funded through appropriations to credit accounts and helps eligible veterans, active duty personnel, surviving spouses, and members of the Reserve components and National Guard to purchase, retain, and adapt homes in recognition of 

their service to the nation. The 2017 budget includes $34 million for the VA Loan 

Electronic Reporting Interface (VALERI) to manage over 2 million VA-guaranteed 

loans for veterans and their families. VA uses the VALERI tool to manage and monitor efforts taken by private-sector loan servicers and VA staff in providing timely 

and appropriate loss mitigation assistance to defaulted borrowers. In addition to 

supporting the payment of guaranty and acquisition claims, it connects VA with 

more than 320,000 veteran borrowers and more than 225,000 mortgage servicer contacts. Without these resources, approximately 90,000 veterans and their families 

would be in jeopardy of losing their homes each year, potentially costing the Government an additional $2.8 billion per year. 

LEGISLATION

The 2017 President’s budget also proposes legislative actions that are necessary 

to ensure that veterans receive timely and quality delivery of benefits. Designated 

as one of our MyVA breakthrough priorities, VA proposes to streamline and modernize the appeals process. 

The current VA appeals process is broken. The more than 80-year-old process was 

conceived in a time when medical treatment was far less frequent than it is today, 

so it is encumbered by antiquated laws that have evolved since World War I and 

steadily accumulated in layers. 

Under current law, the VA appeals framework is complex, ineffective, confusing, 

and understandably frustrating for veterans who wait much too long for final resolution of their appeal. The system has no defined endpoint, and multiple steps are 

set in statute. The system requires continuous evidence gathering and multiple readjudications of the very same or similar matter. A veteran, survivor, or other appellant can submit new evidence or make new arguments at any time, while VA’s 

duty to assist requires continuous development and re-adjudication. The VA appeals 

process is unlike other standard appeals processes across Federal and judicial systems. 

Fundamental legislative reform is essential to ensure that veterans receive timely 

and quality appeal decisions, and we must begin an open, honest dialogue about 

what it will take for us to provide veterans with the timely, fair, and streamlined 

appeals decisions they deserve. To put the needs, and interests of veterans and 

beneficiaries first—a goal on which we can all agree—the appeals process must be 

modernized. 

The 2017 budget proposes a Simplified Appeals process—legislation and resources 

(i.e., people, process, and technology) —that would provide veterans with a simple, 

fair, and streamlined appeals process in which they would receive a final decision 

on their appeal within 1 year from filing the appeal by fiscal year 2021. 

Over the last 20 years, appeal rates have continued to hold steady at between 11 

and 12 percent of completed claims. As VBA received and completed record-breaking 

numbers of disability rating claims, the number of appeals correspondingly increased. Between December 2012 and November 2015, the number of pending appeals rose by 34 percent. Under current law with no radical change in resources, 

the number of pending appeals is projected to soar by 397 percent—from 437,000 

to 2.17 million—between November 2015 and fiscal year 2027. 

Without legislative change or significant increases in staffing, VA will face a soaring appeals inventory, and veterans will wait even longer for a decision on their appeal. If Congress fails to enact VA’s proposed legislation to simplify the appeals 

process, Congress would need to provide resources for VA to sustain more than double its appeals FTE, with approximately 5,100 appeals FTE onboard. The prospect 

of such a dramatic increase, while ignoring the need for structural reform, is not 

a good result for veterans or taxpayers. 

While the Simplified Appeals proposal would require FTE increases for the first 

several years to resolve the more than 440,000 currently pending appeals, by fiscal 

year 2022, VA would be able to reduce appeals FTE to a sustainment level of roughly 1,030 FTE (including 980 FTE at the Board and 50 at VBA), a level sufficient 

to process all simplified appeals in 1 year. Notably, such a sustainment level is 
17 

1,135 FTE less than the current 2016 budget requires, and is 4,070 FTE less Department-wide than would be required to address this workload with FTE resources 

alone. 

In 2015, the Board was still adjudicating an appeal that originated 25 years ago, 

even though the appeal had previously been decided by VA more than 27 times. 

Under the Simplified Appeals process, most veterans would receive a final appeals 

decision within 1 year of filing an appeal. Additionally, rather than trying to navigate a multi-step process that is too complex and too difficult to understand, veterans would be afforded a transparent, single-step appeals process with only one entity responsible for processing the appeal. Essentially, under a Simplified Appeals 

process, as soon as a veteran files an appeal, the case would go straight to the Board 

where a Judge would review the same record considered by the initial decisionmaker and issue a final decision within 1 year; the veteran would be informed 

quickly whether that initial decision was substantially correct, contained an error 

that must be corrected, or was simply wrong. There would be a limited exception 

allowing the Board to remand appeals to correct duty to notify and assist errors 

made on the part of the agency of original jurisdiction (AOJ) prior to issuance of 

the initial AOJ decision. If a veteran disagrees with any or all of the final appeals 

decision, the veteran always has the option of pursuing an appeal to the Court of 

Appeals for Veterans Claims or reopening the claim with new and material evidence. 

VA firmly believes that justice delayed is justice denied. The VA team is passionate about fixing the broken, antiquated appeals process; this is a MyVA breakthrough priority. We look forward to working with Congress, veterans, and other 

stakeholders to implement improvements to provide veterans with the timely and 

fair appeals decisions they deserve and we appreciate the collaboration and feedback 

received from our ongoing discussions with Veterans Service Organizations on modernizing the appeals process. 

CLOSING

Thank you for the opportunity to appear before you today to provide additional 

information on VBA’s 2017 budget request. We are committed to administering benefits effectively and efficiently as responsible stewards of the taxpayers’ dollars, 

while continuing to strive to improve the delivery of benefits and comprehensive information and assistance to our veterans, their families, and survivors. We are 

grateful for your continuing support and appreciate your efforts to pass legislation 

enabling VA to provide veterans with the benefits they have earned and deserve. 

This concludes my remarks. I am happy to respond to any questions from you or 

other members of the subcommittee. 

VETERAN CRISIS LINE

Senator KIRK. Let me ask the first question here. Over the weekend I met with the family of Illinois Army Specialist, Tom Young, 

who has served two tours in Iraq with the 10th Mountain Division. 

This 30-year-old father of Vivian and Maggie called your suicide 

hotline looking for help, but was sent to voicemail. Afterwards, he 

laid down on the metro tracks near the Prospect Heights train station and was killed by an oncoming train. The next morning, Tom’s 

family answered the call from the Veterans Crisis Line calling him 

back telling him that there were beds available. 

Three weeks ago, the VA inspector general released a report on 

the suicide hotline calls being sent to voicemail or answered by 

staff who are not properly trained. Just last week, Deputy Secretary Sloan Gibson said that the report was based on old data and 

that VA had taken steps months ago. Question for you. If the 

changes occurred months ago, how could Tom Young have been 

sent to voicemail just 7 months ago? 

Dr. SHULKIN. First of all, this is a terrible tragedy that happened 

to Tom Young, and should never happen, and is totally unacceptable. The inspector general report that was mentioned found that 

there was an episode of approximately a two-week period of time 
18 

in 2014 where calls went to voicemail was also unacceptable. This 

actually happened with a contractor. This was not the VA staff at 

the service line when—— 

Senator KIRK. David, let me follow up. 

Dr. SHULKIN. Yes. 

Senator KIRK. Who is responsible for the Veterans Crisis Line 

under you? I would just like a name. 

Dr. SHULKIN. Yes. His name is Matt Eitutis. 

Senator KIRK. Matt Eitutis. 

Dr. SHULKIN. E–I–T–U–T–I–S. That is a recent change that we 

put in place. After the inspector general report came out, we made 

a management change. We put this under professional business 

practices, and we are doing everything that we can. And steps have 

been taking place over the last year to update the technology, the 

staffing, the physical location. And our goal, it is one of our priorities in the Secretary’s MyVA initiative, is to make sure that these 

calls are answered by VA staff, and that they do not roll over to 

secondary contractors. 

Senator KIRK. When you say there was a contractor involved, 

who was the contractor involved? 

Dr. SHULKIN. It is—Senator Kirk, I will get you the specific 

name. It is—we use an acronym, something—I do not want to say 

the wrong name. I would probably get another company in trouble 

that have nothing to do with this, but—— 

Senator KIRK. But, David—— 

Dr. SHULKIN. Yes. 

Senator KIRK [continuing]. My staff has been trying for weeks to 

find out who was the person responsible for the Veterans Crisis 

Line. It is almost impossible to find out. 

Dr. SHULKIN. Oh, yes. You know, I know that your office had a 

name, that that person has now subsequently left. If you tell the 

time period you are looking for, Senator, we can get you a specific 

name. 

Senator KIRK. The time period that I am most interested in—— 

Dr. SHULKIN. Yes. 

Senator KIRK [continuing]. Is when my constituent called the crisis line. You know, for a veteran to admit that there is a big 

enough problem that he is contemplating a suicide, that is a huge 

decision to get on the phone with the Veterans Crisis Line. 

Dr. SHULKIN. Absolutely. 

Senator KIRK. And we are dealing with a very fragile person. In 

the case of Tom Young, he just walked in front of the train and got 

killed. 

Dr. SHULKIN. This is—as I said, there is no excuse for this. The 

Veterans Crisis Line saves lives every day. They actually have referred 11,000 veterans to emergency services, dispatched ambulances, saved lives every day. These are some of the hardest working staff in the VA. This is a tough, tough job. They do miraculous 

things. 

But the phone calls have to be answered. That is why we have 

put new management in place. We are not going to accept even a 

call—there is no voicemail today, I can assure you that. That is unacceptable. That was done by a contractor. 

Senator KIRK. Great. 
19 

Dr. SHULKIN. But absolutely, we will get you that name, but we 

are working extremely hard. This will not happen again, but these 

people are being supported the way that they need to answer those 

calls. 

[The information follows: the requested information was not 

available at the time this publication went to print.] 

Senator KIRK. One of the acting directors of mental health operations in 2014, at the time of the Office of Inspector General investigation, was Ira Katz. Was he the same Ira Katz who, according 

to CBS News, in 2008 covered up the veterans suicide rates leading 

both Senators Akaka and Murray to call for his resignation? 

Dr. SHULKIN. Senator, Dr. Katz is a psychiatrist who works out 

of our Philadelphia area. 

Senator KIRK. So you had two United States Senators at the time 

of the congressional majority calling for his resignation, and he is 

still on the job. 

Dr. SHULKIN. Dr. Katz is actively on the job. I am actually not 

aware of what the specific issues were with the Senators. So, again, 

since I am not aware of exactly what those allegations are—— 

Senator KIRK. If the Choice Act gave you the authority using the 

Secretary’s authority to fire employees, could you consider getting 

rid of Ira Katz when Senators Akaka and Murray have already 

called for him to resign? 

Dr. SHULKIN. Well, I will commit to you today that I will go back 

and look into those issues. But any time there is an allegation, it 

is our responsibility to make sure that we look into it, that we have 

an objective evaluation, but we do make our disciplinary decisions 

based upon that. 

I happen to have known Dr. Katz for about 25 years. He is a 

well-respected psychiatrist. But I absolutely will go back and make 

sure that we look into that and provide follow up. 

[The information follows: the requested information was not 

available at the time this publication went to print.] 

Senator KIRK. Thank you. 

Mr. Tester. 

Senator TESTER. Go with Tom. 

Senator KIRK. Mr. Udall. 

ACCESS TO CARE

Senator UDALL. Thank you. Thank you very much, Mr. Chairman. And, Dr. Shulkin and Mr. Pummill, thank you for taking the 

time to speak here and be with us today. Almost more than any 

other issue that we work on here in Congress, helping veterans access benefits and healthcare is one of the most important services 

my office offers to veterans. 

But it is also one of the most frustrating. As I have said here before, the majority of veterans are satisfied with the care they receive from the VA when and if they can get it. And I would just 

underline that ‘‘when and if they can get it.’’ Most veterans I have 

spoken to believe that the care you provide is second to none, and 

this budget helps support that. This budget, however, also helps to 

ensure that the VA’s care remains in place for the future and that 

improvements are made where care is lacking. 
20 

OPEN AIR BURN PITS REGISTRY

Dr. Shulkin, I am glad to see that the VA’s budget justification 

specifically supports research into exposure to airborne particulate 

matter from burn pits. The Open Air Burn Pit Registry is the result of a bill I authored. National Guardsman Master Sergeant 

Jessey Baca, and his wife, Maria, of Albuquerque were the driving 

force behind this effort. Jessey has battled cancer, bronchiolitis, 

PTSD, and numerous other ailments believed to be connected to his 

contact with toxic burn pit fumes while deployed in Iraq. 

In last year’s omnibus, I secured a provision requiring the VA 

and the Department of Defense (DOD) to share information about 

when and how servicemembers may have been exposed to airborne 

hazards and open burn pits. Does the new research called for in 

the fiscal year 2017 request include data from DOD and the Open 

Air Burn Pits Registry? 

Dr. SHULKIN. Well, first of all, thank you. Thank you for that 

bill. I think that that is very, very important for us to fulfill our 

mission to the veterans who served in Iraq and Afghanistan. As 

you know, we have 45,000 veterans who have registered into your 

registry. And we are working with DOD to do interagency cooperation exactly as you have suggested to be able to study this. 

Our research will be active this year. As you know, we worked 

with the Institute on Medicine, the National Academy of Sciences 

in the past to look at this issue. Some of those questions actually 

that were asked about the exposure and the risk hazard, there was 

not enough evidence. So we do need to continue that research, and 

that is something that we are committed to making progress on in 

our current fiscal year. 

The registry helps us considerably in being able to track these 

long-term outcomes of the veterans. So thank you, and, yes, we are 

committed to following up on that. 

APPEALS BACKLOG

Senator UDALL. Great. Thank you very much. And, Mr. Pummill, 

I am happy to see that the Albuquerque VA has made significant 

progress, the percentage of backlog claims from around 60 percent 

in 2013 to 20 percent just last month. However, more veterans are 

unhappy with the decisions on their claims, which has led to more 

appeals. What can be done to make sure the appeals process does 

not fall victim to the same backlog that we saw in initial claims 

while also guaranteeing appeals receive the due process they deserve? 

Mr. PUMMILL. Senator, that is an excellent question. Appeals is 

the number one concern for VBA right now. The Secretary has directed us to get with our constituents and figure out how to resolve 

the current appeals process. We are meeting next with the VSOs, 

the veterans service organizations, the State and county veterans 

service organizations. We are basically locking everybody in a room 

for 3 days, and the Secretary told us you do not leave the room 

until you come up with something that you can present to the Congress to change the way that we are doing appeals right now. 

The appeals process is tied up in laws. It is one of the most complicated processes that exist in the Federal Government. We are 
21 

going to need some kind of legislative change. What we need to 

present to you is something that we, the VSOs, and the veterans 

all agree that is the right thing to do so that we can offer that legislative change. 

Senator UDALL. Thank you for that answer. And I have a couple 

of other questions—I am near the end of my time here—on reform 

of the Comp and Pen exam, and also rural telehealth, which I 

think is very, very important to our vets. And I see that you are 

trying to increase investments in that area and get additional telehealth out into rural areas. So I will submit those for the record 

and yield back, Mr. Chairman. Thank you. 

Senator KIRK. Mr. Tester. 

MONTANA’S CHOICE PROGRAM WITH HEALTH NET

Senator TESTER. Thank you, Mr. Chairman. Dr. Shulkin, in my 

opening remarks, I talked about the problems veterans are having 

in Montana. Could I get your personal assurance that you will directly engage in the efforts to address the frustrations with veterans in my State with the Choice Program, specifically with 

Health Net? 

Dr. SHULKIN. Yes, Senator. In fact, we have committed to having 

a team out to Montana. That is going to be the week of March 28th 

where Dr. Yehia and his team will personally be there to meet with 

Health Net and with your staff, as well as the staff at VA to work 

this out. 

IMPROVING VETERANS ACCESS TO CARE IN THE COMMUNITY ACT

Senator TESTER. Good. I want to follow up with you, but we can 

do that offline as we move forward. 

So, while pushing to make changes, I also fully recognize that 

Congress needs to do what we need to do to allow you to do your 

job. Today with a number of my colleagues, including Senator 

Udall and Blumenthal, I am introducing legislation called the Improving Veterans Access to Care in the Community Act. This bill 

includes a number of provisions, many drafted in consultation with 

the VA and other stakeholders, that will greatly empower your efforts to deliver more timely and quality care for our veterans. 

By including provider agreement language sought by the VA, this 

legislation would ensure that you are able to provide care in the 

community for veterans in a timely manner. Would you agree with 

that? 

Dr. SHULKIN. Absolutely would agree with that. 

Senator TESTER. Okay. The VA has previously said that a failure 

to address this issue would have enormous negative impacts on 

veterans’ access to healthcare. A huge issue. 

Dr. SHULKIN. We are seeing this every day, Senator. 

Senator TESTER. So you would agree with that statement, too. 

Dr. SHULKIN. I would. 

Senator TESTER. Okay. By providing funding—spending—I am 

sorry. By providing spending flexibility across community care programs, this legislation would provide the VA with the ability it 

needs in places like Montana and other areas, by the way, to steer 

veterans to care in the manner that makes the most sense for that 

veteran. Would you agree it would do that? 
22 

Dr. SHULKIN. It absolutely will. It will help simplify the program 

for veterans, no question about it. 

Senator TESTER. Okay. And by consolidating the VA’s multiple 

community care programs, and there are many, into one single program with consistent and streamlined eligibility criteria and administrative rules, that that would reduce the confusion for veterans and VA employees alike. Is that correct? 

Dr. SHULKIN. Yes, seven programs at least into one would be 

very helpful. 

Senator TESTER. Okay, and streamlined. 

Dr. SHULKIN. Streamlined. 

Senator TESTER. Smooth. 

Dr. SHULKIN. Exactly. 

Senator TESTER. No red tape, or minimal. Let us put it that way. 

Dr. SHULKIN. Yeah. 

Senator TESTER. And it would greatly reduce administrative burdens for the community providers, too, then. 

Dr. SHULKIN. Provider agreements and the streamlined funding 

would make it easier for community providers by a huge amount, 

Senator. 

Senator TESTER. So you would anticipate that it would make it— 

this Choice Program better for the providers and, thus, entice them 

to come on board. 

Dr. SHULKIN. And I would hope your largest provider in Montana 

would consider coming back. 

Senator TESTER. Well, so do I. Together all of these things would 

assure that the VA is better able to utilize the tools at its disposal 

to better meet the healthcare needs of veterans. You would agree 

on that also. 

Dr. SHULKIN. I would. 

Senator TESTER. Okay. So we are going to be working with 

Chairman Isakson and others hopefully in this room so that we 

could get this to the President as quickly as possible. 

VBA BUDGET REQUEST

I got about a minute and a half in this round. Mr. Pummill, how 

does this budget ensure that the VBA is able to fulfill its mission 

1 year down the road, 5 years down the road, even 10 years down 

the road? 

Mr. PUMMILL. We are going to have to take the budget that you 

have provided to us, which I believe is an appropriate budget, and 

with the proper training of the people that we have on board, and 

with automation, take care of the needs of the veterans into the future. We know just from past history that 20, 30, 40 years after 

a conflict, as veterans age we get a large number of veterans coming in for increased benefits and services. 

We have to be prepared for the Iraq and Afghanistan veterans 

that come in requesting those services in the future. We just need 

to capitalize on our automation systems and our training to make 

sure we are ready for them when they come. 

MILITARY SEXUAL TRAUMA ADJUDICATION

Senator TESTER. Could you speak specifically to the progress that 

is being made, if any, and I hope there is being progress made on 
23 

this, by the way, to more properly adjudicate claims involving military sexual trauma? 

Mr. PUMMILL. Yes, we have made massive and substantial 

changes in how we do military sexual trauma (MST). We have actually trained people—there is at least one person in each RO that 

specializes in that now so that they understand that it is something that is not always right out front in somebody’s military 

records, that you have to dig and you have to find the markers that 

support that. 

Senator TESTER. Okay. To test this a little more, do you believe 

that the standards for adjudicating PTSD claims from combat trauma should be the same standards used to adjudicate PTSD from 

claims from MST? 

Mr. PUMMILL. I believe that PTSD is PTSD. It should be the 

same. 

FULLY DEVELOPED CLAIMS EXPEDITED PROCESS

Senator TESTER. Okay, thank you. Earlier this year I introduced 

legislation with Senator Sullivan and some others that would provide veterans with the option of filing a fully developed appeal that 

would be adjudicated through an expedited process. Do you support 

that? Do you think it is a step in the right direction? 

Mr. PUMMILL. I think it is a step in the right direction. That is 

one of the things that we are going to be pushing at our meeting 

next week. 

Senator TESTER. Do you think other changes need to be made? 

Mr. PUMMILL. Yes, I do. 

Senator TESTER. What are they? 

SIMPLIFY APPEALS PROCESS

Mr. PUMMILL. We have to simplify the appeal process so that 

there are not so many bites at the apple. The best example is a veteran who has been appealing for 25 years and has added 27 different variances to his claim as he goes through. That ties up the 

whole system. It is just a waste of everybody’s time. 

Senator TESTER. Do you have any statistics on claims that are 

put forth that are bogus? 

Mr. PUMMILL. Not off the top of my head. I do not know. We 

would have to get back to you on that. Frankly it is my experience, 

it is not very high. The vast majority of veterans are honest and 

forthright. They are just frustrated about how long things take. I 

do not see very much fraud, to be honest with you. 

Senator TESTER. Okay. I will wait for the second round. Thank 

you, Mr. Chairman. 

Senator KIRK. Mr. Schatz. 

TELEHEALTH AND TELEMEDICINE

Senator SCHATZ. Thank you, Mr. Chairman. Dr. Shulkin, I wanted to talk to you about telemedicine and telehealth. I know VA has 

done leading-edge work in this space. I want to—I want to ask you 

two questions. First of all, generally speaking, where do you see 

the future opportunities in telehealth and telemedicine in terms of 

serving veterans? 
24 

Dr. SHULKIN. Very briefly, Senator, VA is actually the largest 

provider of telehealth services, 2.1 million visits last year, but we 

need to be doing much more. We need to be going to mobile devices 

because that is where people are carrying their information. And 

we need to be using telehealth as a way to keep veterans at home 

and out of institutions, and having to have them travel several 

hundred miles to reach facilities. They should be able to get the 

care where they are. 

Senator SCHATZ. So we have a different problem on the Department of Health and Human Services (HHS) side. They lack some 

of the statutory authorities that you have. But I have a concern in 

terms of funding requests because it seems to me that you—and 

this is great. You expect the number of veterans receiving telehealth services to increase by 12.6 percent through 2017, but you 

have asked for a roughly 5 percent increase in funding. Now, that 

may be because this is a highly leveraged thing, but I want to— 

I want to understand that discrepancy. 

Dr. SHULKIN. Yeah. VA, because of its early adoption of telehealth because, frankly, we have needed to do this, has invested 

hundreds of millions of dollars in infrastructure that can be leveraged, and we can add to its capabilities without dollar-for-dollar investments. 

Senator SCHATZ. How did you get to the 12.6-percent target? 

Dr. SHULKIN. The 12.6-percent target was done out of our—out 

of our projections, out of our enrollment projects, and targeting specific areas that we believe that we can expand. Quite frankly, I 

think that is conservative when you see what is happening in the 

healthcare industry. We are seeing much, much larger increases 

year to year. And so, I think that that will be a conservative estimate. 

Senator SCHATZ. How much of the challenge is introducing patients to telemedicine, you know, at the front end? It seems to me 

that on the one hand for psychology, psychiatry, case management 

in terms of mental health services, there might be less—eventually 

less of a barrier to accessing services. But on the front end, it may 

just seem odd for people to utilize a device to get the services they 

need. So how are you dealing with that sort of getting the veteran 

through the threshold? 

Dr. SHULKIN. Well, you know, as you know, I have spent my career in the private sector, so coming into VA months ago this was 

one of the surprises, how many different specialties VA is using 

telehealth in. It is doing teledermatology, telepathology, teleradiology, telehepatology. I mean, all sorts of things. 

And we have studied the acceptance use of veterans, and it is sky 

high. It is in the 90s, and we are publishing on this now. So the 

acceptance really has been extraordinary because it saves a veteran 

from sometimes having to travel hundreds of miles, and they are 

getting the care that they need. 

Senator SCHATZ. Absolutely, and thank you for your good work 

in this area. You can count on me to try to support this as much 

possible. And if you can keep talking to HHS, we would really appreciate it as well. 

Dr. SHULKIN. Sure, absolutely. 
25 

ELECTRONIC HEALTH RECORD AND GAO HIGH RISK LIST

Senator SCHATZ. I want to talk to you about the electronic health 

records. I was told that the initial read-only version of the system 

would be available by the end—would be available on some sites 

in 2015 with full deployment by 2018. But last fall, GAO testified 

that you are not on track. DOD is not on track. And so, my question is, what is the new timeframe, and when do you anticipate 

being taken off the GAO’s high-risk list? 

Dr. SHULKIN. Okay. I think there are a couple of questions there. 

I think your question about the electronic medical record is about 

interoperability with the Department of Defense? 

Senator SCHATZ. Yes. 

Dr. SHULKIN. We currently have a joint viewer up and operational. In fact, 35,000 VA providers are actively using this today. 

So if you come into a VA, we are able to access through what we 

call the joint viewer DOD records. So we are currently operational, 

and would be glad to demonstrate that for you if you are open to 

that, how that is working. 

The GAO high-risk list, we were put on that list by GAO not specifically because of the electronic medical record, but many other 

issues. We, again, are meeting with GAO on a regular basis and 

actively working that list down to close all the recommendations. 

And you do not come off the GAO list very quickly. You really have 

to demonstrate that you have addressed these commitments. And 

so, we are working towards that. We hope that we are making good 

enough progress to be able to give an indication of where are towards the end of the year. 

Senator SCHATZ. Thank you. 

Senator KIRK. Mr. Boozman. 

Senator BOOZMAN. Thank you, Mr. Chairman, Ranking Member. 

Thank you all very much for being here. We appreciate your hard 

work. 

STANDARD PRODUCTIVITY MEASURES

Dr. Shulkin, I know that one of the things I have been pleased 

with that you all really are trying to do a good job regarding 

metrics, measuring things. In regard to being able to determine the 

cost associated with providing care versus buying care in the community, I know your IT infrastructure is maybe not quite as good 

as you would like for it to be. Can you talk a little bit about that 

and how you are trying to determine that, again, in a difficult environment? 

Dr. SHULKIN. Right. Thank you, Senator. We are very data rich 

at the VA. It is one of our strengths, why we have been able to 

drive improvements particularly on the clinical side. And wherever 

we can, we are trying now to use metrics that we can compare to 

the private sector because I think that is appropriate. In fact, we 

have too many metrics, so we are trying to pare it down to what 

is most important. 

The area that we struggle the most with are financial comparisons because what we do in the VA does not directly compare always—sometimes it does, but does not always directly compare to 

the private sector. So we have begun to measure relative value 
26 

units (RVUs), so we know—which is standard productivity measure 

both in the private sector and the VA, so we can tell you VA actually increased its RVU, its productivity measures, 10 percent last 

year. 

The direct financial comparisons are a challenge, so what we are 

beginning to do is to ask specific questions. What would it do for 

an eye exam in the VA healthcare system versus outside? And so, 

we are going to be making specific choices about what is better for 

veterans, what is better for taxpayers as part of the new Veterans 

Choice Plan to bring those financial considerations in place. 

And let me just ask whether our Chief Financial Officer has a 

better or more specific answer about these comparisons. 

Mr. YOW. One of the challenges we have had is we do a lot of 

things in the VA that are not comparably done in the private sector, things like homeless programs, things like the fact that we 

have a richer mental health benefit, things like if we have a richer 

long-term care benefit program than in the private sector insurance 

would have. 

So when we get asked questions like cost per RVU, it really becomes an apples and oranges comparison unless we try and drill 

down and get that further. And our systems are so old right now, 

it is very difficult for us to go through to get that granularity to 

do that. It is not for lack of wanting that we have not been able 

to do it thus far. 

HEALTHCARE FACILITIES BUDGET REQUEST

Senator BOOZMAN. Very good. Not in follow up, but another ques- tion to our chief financial officer, the VA budget requests $836 million for the activation of new and enhanced healthcare facilities. 

What are the VA’s priorities for the upgrades? How much of this 

funding will be used for new facilities versus enhancements? And 

has the VA determined where the projects will be located? 

Mr. YOW. Yes, sir, we have a list that we provided the staff, and 

we can provide that to you again, the specific projects locations. 

They are all from what we call major construction or major lease 

projects, so they are essentially new facilities more so than renovations or replacement leases. That is where we fund activations 

from. 

It primarily does two things. It does what we call non-recurring 

cost, initial outfitting, if you will, of a new facility, things like 

equipment, supplies, and so forth, to get it ready to open its doors. 

And then recurring costs for about a 2- to 3-year period as they 

prepare to open their doors and make their way into the healthcare 

projection model and get funding for them into the future. 

So, for example, if it is a recurring lease and there is no new 

staff, they would not need as much recurring funding. But if it is 

expanding or a brand new facility, we would have to hire new staff 

as well. So it varies a great deal by project. 

Senator BOOZMAN. And the average age of our infrastructure is 

what, 50? 

Dr. SHULKIN. We have about 60 percent of our facilities are 50 

years old or older. 

Senator BOOZMAN. Very much. Thank you, Mr. Chairman. Thank 

you. Thank you, guys. 
27 

Senator KIRK. Mr. Murphy. 

Senator MURPHY. Thank you very much, Mr. Chairman. Thank 

you all for your fantastic work. 

OTHER THAN DISHONORABLE DISCHARGE

You are probably aware of reports that the U.S. Army has forcibly separated over 22,000 soldiers for misconduct after they return 

from deployment in Iraq and Afghanistan that were also diagnosed 

with mental health problems or traumatic brain injury (TBI). As a 

result of this disclosure, the Army inspector general and the surgeon general are going back and doing a review of those 22,000 

cases and apparently are going to make recommendations as to 

some of them and some recommendations going forward. 

But as I understand it, the VA looks at the character of discharge to determine whether a person meets the basic eligibility requirements, and you determine whether the incidents that led to 

the discharge are found to be under conditions other than dishonorable. So you have essentially a chance to look at those conditions 

of discharge and make a determination as to whether they would 

be able to be able for benefits. 

So I do not know whether this is a question for you, Dr. Shulkin, 

or for you, Mr. Pummill, but to ask a question about what has the 

VA done in the wake of this disclosure, and pending this review 

that is happening in the Army, what can you do to perhaps remedy 

some of those 22,000 who should have not been given a discharge 

under non-medical terms? 

Mr. PUMMILL. Yes, Senator. First of all, it is a serious concern 

for the VA. We know that most of these men and women are going 

to end up homeless, that they already have one foot in a bad place, 

and this does not help. Some of the things that we—first of all, we 

cannot change the character of discharge. Only the military service 

can do that. We do contact the veterans. We advise them how to 

get to the Army Board for Correction of Military Records or the 

equivalent in the other services so they can request a change in 

their discharge and upgrading their discharge. 

We have worked with the services. The services have sent out 

letters to veterans saying, hey, if you feel that your discharge may 

have been improper because of something that happened to you in 

combat or deployment, please come back, file your paperwork. They 

are not getting a very high response rate, so we sent letters out underneath the Under Secretary of Benefits’ signature to those same 

veterans to see if maybe a letter from the VA saying, hey, go back 

to your military department, if we could help it out. 

Senator MURPHY. But let me just clarify. 

Mr. PUMMILL. Certainly. 

Senator MURPHY. My understanding is that you have the ability 

to review the circumstances of the discharge. If there is a discharge 

for misconduct, you are saying their only recourse is to go back to 

have the conditions of discharge changed. 

Dr. SHULKIN. Senator, that is our understanding that this is a 

Department of Defense decision. This is not a VA decision. And we 

are prohibited by law from treating somebody in what we call bad 

paper, a dishonorable discharge. 

Senator MURPHY. And that is your understanding as well? 
28 

Mr. PUMMILL. It is my understanding that we cannot change the 

character of the discharge, Senator, yes. 

Senator MURPHY. Okay. 

Dr. SHULKIN. One of the things that VA is doing because they 

take this very seriously, and I know this is where you are coming 

from, too. It is one of the reasons why we have worked so hard to 

develop strategic partnerships with community groups because 

when we find these veterans and they show up at VA, we are working with community groups to actually help in the treatment of 

these patients. 

Senator MURPHY. Mr. Chairman, I just want to underscore this, 

and Senator Tester has been a great leader on this. There are 

22,000 veterans out there today just since 2009—— 

Senator KIRK. Yes. 

Senator MURPHY [continuing]. Who have been discharged for 

misconduct, who prior to that discharge had a diagnosis of TBI or 

PTSD. There is an ongoing investigation as to the circumstances of 

those discharges. We as a subcommittee have to grapple with the 

fact that you have—it is not just what we know about it, right? 

Twenty-thousand brave men and women who were potentially 

wrongfully discharged for misconduct who cannot access VA services who are going to be out on the streets. So I would love to follow up with you—— 

Mr. PUMMILL. Yes. 

Senator MURPHY [continuing]. On this topic to think about ways 

in which—while this review is happening. I have asked for a moratorium on discharges for misconduct with respect to individuals 

who have been diagnosed with PTSD or TBI during this period of 

review. The Army has not looked favorably upon that request, so 

the numbers are just going to continue to mount. 

I have another question, but I will put it in for the record. 

CONNECTICUT CAMPAIGN TO END CHRONIC VETERAN HOMELESSNESS

Senator MURPHY. I just want to thank you for your work with 

Connecticut on our campaign to end chronic veteran homelessness. 

Dr. SHULKIN. Congratulations. 

Senator MURPHY. We are the first big State in the Nation to do 

that. 

Dr. SHULKIN. Yes. 

Senator MURPHY. And that is a consequence of a dramatic increase in HUD vouchers, which we desperately need to keep or we 

will slide back on that commitment. But it is also a consequence 

of your very successful integration of mental health services with 

physical help services that has allowed us to make those great 

gains. And I congratulate you on doing something in the VA that 

the private sector should be doing at a much greater rate. 

Dr. SHULKIN. What we have learned, Senator, is this is all about 

working with the community, and the Connecticut leadership coming out of the Governor and your community groups have really— 

they deserve the credit for this. And we thank you for your support. 

Senator MURPHY. Thank you very much, Mr. Chairman. 

Senator KIRK. Senator Cassidy. 
29 

Senator CASSIDY. Dr. Shulkin, you have got an impressive resume, man. I wish my resume looked like yours. 

Dr. SHULKIN. I think you are doing all right. 

Senator CASSIDY. My son does not think so, but that is a son, 

huh? We are both physicians, so as you know there is a collegiality. 

I will go around the country and visit with different—Murphy and 

I have this connection with mental health, so the mental health 

folks in the VA will come and approach me. I have learned, at least 

this is a little bit dated, but your administration is new, so I will 

ask you again to see if it has changed. 

MENTAL HEALTH NO-SHOW RATE APPOINTMENTS

There is great variability in the systems used for mental health. 

I gather there might be a place in Kansas which is really working 

well, but you go elsewhere and the doc will, say, oh, yes, if they 

miss their appointment, they are scheduled 3 weeks later. The better system is to leave some slack at the end of the day, and to 

know that there are going to be a certain percent late, but that 

some of the folks will, you know, frankly be pleased that they are 

less busy. 

To what degree do you have the ability to look at no show rates, 

average time to rescheduling, average time for new appointment, 

et cetera, and compare them against one another? If you are able 

to do that, what is the current variability between different clinics? 

Dr. SHULKIN. Excellent questions. We have a 20-percent-plus noshow rate in mental health appointments. 

Senator CASSIDY. Now, is that standard or, no, here it is three, 

and there it is 60? 

Dr. SHULKIN. There is a wide spectrum. And so, what you are describing is the situation that I found when I came in, which is that 

VA has tremendous variability in many of these clinical measures. 

And what healthcare systems that are accepting the challenge of 

being healthcare systems are doing now are decreasing that variability. They are identifying best practices and standard—— 

Senator CASSIDY. Totally get that. So that is what your expertise 

is. 

Dr. SHULKIN. Absolutely. 

BEST PRACTICES SYSTEM

Senator CASSIDY. To what degree can I go to a clinic now that 

formerly told me, oh, man, we got all kinds of no shows, and I cannot get anybody to change it, to, no, we actually have the system 

such as best practices? 

Dr. SHULKIN. The first thing that we have done already is we 

have identified these best practices. We had a call for best practices 

in the last month where we identified 250 of the best practices in 

VA, many related to access. Today we have brought in those best 

practice leaders to share and map out their best practices. Tomorrow we are bringing in the industry leaders in how to do best practice implementation to advise VA. 

We are committing towards the end of the year to have these 

best practices in place. It is exactly what we need to do, and it relates to what the GAO found that put us on the high-risk list. 
30 

Senator CASSIDY. So I know that—again, you and I both know 

this—in healthcare systems, it is data, data, data. To what degree 

can you share with each of us as regards what the institutions in 

our State are doing at this moment in time, and then the trajectory 

of how they are improving over time. 

Dr. SHULKIN. Be glad to do that. VA is actually very good at producing those metrics. We have clinical metrics, outcomes called the 

sail measurement system, which we can share with you and show 

improvement, or actually those that are not improving, and on access measures, lots of data that we can share and other process 

measures. And, in fact, we are targeting this. This is one of my five 

priorities to implement these best practices. 

FRONT LINE DISCIPLINARY ACTION

Senator CASSIDY. Now, also related to all this, again, the kind of 

conversation someone will tell me, but will not do it under oath, 

that there is at the front desk perhaps someone who is abusive to 

that patient who comes in, the veteran who perhaps is different because he has a mental health issue, and very rude. We have focused a lot on high-ranking officials within the VA and the difficulty of replacing them. What this doc tells me, I cannot get rid 

of that clerk, that that actually has to go here and then there. 

I toured a VA and asked the director, and he goes, well, there 

is a report, and we counsel, and it comes back. What I really got 

a sense of is that it would take months, maybe even a year or two, 

in order to get rid of someone who is at the front desk. Again, not 

talking about the person padding their check by everything we 

have read about in the paper, but that person right there speaking 

to that vet who is having a hard time keeping it together, and, 

therefore, acts a little strangely. 

To what degree is that true, and to what degree do the union 

contracts kind of limit the ability to discipline, replace, make it better for the veteran? I will stop there. 

Dr. SHULKIN. Well, one of the things when the Secretary came 

in, as you know he had us all sign and agree to the I Care Principles, of which respect and customer service is right there. When 

we find that people are not sharing our values, my expectation is, 

the Secretary’s expectation, is that we are going to take actions to 

remove people who are not following the VA values. 

Then you get into due process, and we have due process, and we 

need to adhere to it, and it is longer than some of us want and 

more complex. But we are not going to let somebody be disrespectful to veterans and stay in those positions. 

Senator CASSIDY. Now, let me say I have worked in a public hospital, and there are 95 percent great people struggling to make it 

work, and there is 5 percent that really—but that 5 percent becomes the face of the organization, and at times that one person 

destroys it for that patient, if you will. Believe me, I have worked 

in a hospital in Louisiana. I know that. 

You spoke of due process. Let us assume that there is someone, 

as we have described, as I have been told of. I have learned to say 

what I have been told, not what I know, but that what I have been 

told of. How long would it take for that person to be dismissed? 
31 

Dr. SHULKIN. Our expectation is that if there is a behavior that 

is not consistent with our values, they would be removed from that 

position, the veteran patient position. And then we have to assign 

them to other work, hopefully not involving direct contact with veterans, and let the due process, you know, work its way through. 

But it would not be acceptable because of bureaucracy and red tape 

to allow a person who we know is not sharing our values to continue with a direct veteran-facing position. 

Senator CASSIDY. So that person could be reassigned fairly quickly—— 

Dr. SHULKIN. Absolutely. 

Senator CASSIDY [continuing]. As in a month or a week? 

Dr. SHULKIN. Oh, no. I am talking about immediate. When somebody comes to us with a concern or allegation, it is investigated because, as you know, as you said, in a lot of these situations in my 

experience, you know, it is not always what you first hear the 

story. 

Senator CASSIDY. I get that. 

Dr. SHULKIN. So you have to get the facts. But if the facts confirm that this is a person who is not treating veterans the way that 

we believe they should be treated, then they should be removed 

from that position immediately, reassigned to something else while 

there is due process. There are certain violations that would be immediate termination, and we certainly do that as well. 

Senator CASSIDY. There is an inspector general report about a 

fellow who actually killed a patient who is still on the job, so that 

is kind of what—just to say that is high profile. But just to say it 

seems as in in theory sometimes it takes a long time. 

Dr. SHULKIN. I would like to get that specific situation from you 

and then follow up with you on that. That certainly is a circumstance that I would want to know about. 

Senator CASSIDY. Okay. I yield back. Thank you. 

Senator KIRK. Mrs. Capito. 

Senator CAPITO. Thank you, Mr. Chairman, and thank all of you. 

I apologize for not being able to hear the entire hearing, but we 

have got several going on at the same time, as Senator Murray and 

I have seen each other a couple of times today. So I appreciate 

your—and so if I repeat a little bit, please excuse me. 

CHOICE PROGRAM THIRD PARTY ADMINISTRATORS

I wanted to talk about the Choice Program. We just had some 

veterans in our office the other day. In one instance, the veteran 

had an appointment with a specialist, only to find when he called 

that office, the entire facility did not have that type of specialist. 

And it was the second call that that facility had had for that type 

of specialist. The same veteran had another instance where he had 

called Health Net Choice four times to have an appointment made 

and did not get satisfaction. We are hearing these stories all over 

the place. 

And I guess, what is being done from your perspective, and I am 

going to say are these the third-party administrators that are not 

filling the gaps? What are you all doing to hold the third-party administrators’ feet to the fire here? 
32 

Dr. SHULKIN. Okay. I should start off by saying that the Choice 

Program is not working the way that any of us want it. So I am 

aware that you are probably not the only Senator who is getting 

a lot of these issues. 

We are continually meeting with the third-party administrators, 

and not only letting them know it is our expectation that they adhere to the contract. The contract says that a routine consult needs 

to be scheduled in 5 days. An urgent consult needs to be scheduled 

in 2 days. And when they are not able to do that, we need those 

authorizations returned to the VA so we can use our community relationships to help the veteran. 

We are not only working with them, but we are throughout the 

country now trying new models of delivering care, like embedding 

their staff alongside our staff to be able to try this. So we are doing 

this in Alaska and several other sites. 

But the program is just simply not working the way that we intended it to work, and we are going to stick at this until we can 

get this working better for veterans. So we would ask if you are 

hearing specific veterans having issues, please let us know with 

their names so we can help them. 

Senator CAPITO. Okay. That I will do, and I know that it just 

seems like there is a lot of confusion. 

Dr. SHULKIN. Yes. 

Senator CAPITO. Best intentions aside, it is still, as you said. And 

I appreciate your candor there really. 

Dr. SHULKIN. One of the things that you missed, Senator, is Senator Tester had mentioned that part of this we need your help on. 

And Senator Tester and Senator Blumenthal and Udall just submitted a bill that helps us consolidate community care, simplify 

this for the veterans, simplify it for the VA. And so, this is where 

we could use your help because have identified where the program 

needs to change and what we have learned over the past year. 

That would help us a great deal. 

VETERANS TO AGRICULTURE PROJECT

Senator CAPITO. Thank you. Thank you. One of the programs 

that I have been sort of interested, it is a small program, and it 

is growing—it is in West Virginia and growing in some other 

States. And it is the West Virginia Warriors and then Veterans to 

Agriculture Project. It seems to have met with quite some success 

with some of our younger veterans. 

So I do know, Mr. Pummill, I do not know who would take this 

question. What are you doing with—in terms of encouraging veterans to transition to agriculture? Is that part of an emphasis within the VA, and how is that going? 

Mr. PUMMILL. We have expanded what we encourage veterans to 

do when they leave military service greatly under the new transition program. It used to be, you know, pretty much your only option was use the GI bill and go to college. Now we are offering a 

GI bill, agriculture, entrepreneurship where they can learn how to 

start their own business, or technical training, technical schools, 

truck driving, things like that, realizing that one size does not fit 

all. And we are trying to find the thing that best suits that individual and lead them in the transition to that 
33 

The best success we have had, like you just said, in West Virginia is working with the State and local agencies so that when we 

know where the individual, which State he or she is going back to, 

they have somebody to link up back there with what they need to 

do. 

OPIOID DEPENDENCE AND ALTERNATIVES

Senator CAPITO. Right. Good. And then lastly, Senator Baldwin 

and I have under her leadership worked on the Opioid Safety Act, 

which as a result for me was from a young man, Andrew White, 

who I believe died in his sleep, I think, as a result of a shoebox 

of prescriptions that had been filled—prescribed to him by the VA. 

What are you doing in this area now that you have more of a 

directive and I think more of an area of emphasis because of what 

we have done here? 

Dr. SHULKIN. I think as you know, and we appreciate your leadership in this, the opioid dependence crisis is really a national crisis. I was at a dinner last night with the director of the Centers 

for Disease Control and Prevention (CDC) who said this is the area 

he is most concerned about nationally. Fortunately I think VA, and 

thanks again to several of you who have taken the lead on this, has 

really understood this for several years. And we are doing really 

what the rest of the country should be doing. Our numbers are 

going down while the rest of the country is going up. 

Senator CAPITO. In terms of prescribing? 

Dr. SHULKIN. In terms of number of veterans on opioids and finding alternatives for them. So we have instituted mandatory training. We have instituted mandatory reporting into all the States 

that require the drug monitoring programs. We use a stepped management approach. We are encouraging providers with what we 

call academic detailing where we train them to use other non-medication approaches to pain management, like integrative therapies. 

We have adopted not only the CDC guidelines, but work with DOD 

on DOD–VA guidelines for opioid management. 

So we are making progress. We need to do much, much more, but 

our numbers are coming down, and I think we are headed in the 

right direction. And we are going to stick at this until we can actually get to this to the very minimum number of patients who need 

to be on opioids. 

Senator CAPITO. Thank you. 

Senator KIRK. Mrs. Murray. 

Senator MURRAY. Thank you, Mr. Chairman. 

CAREGIVERS PROGRAM

Mr. Secretary, Dr. Shulkin, I am really pleased to see that you 

are requesting a significant increase for the Caregivers Program, 

which, as you know, gives veterans more control over their own 

healthcare and supports the loved ones who sacrifice their life, 

their own time, their health, their energy to provide that care. This 

is really a personal issue for me. My mother cared for my father, 

who was a World War II veteran, after he developed MS, and I 

know the impacts to these families. 

So now as demands on the VA continues to rise, I strongly believe that the Caregivers Program is really a key to helping VA 
34 

carry out its duty to provide accessible high-quality care. And to 

make this program work, the VA is continuing to increase the 

number of Caregiver support coordinators. Considering the expected increase in Caregivers, and if we can finally pass the legislation to expand the Caregivers Program to all veterans, I am concerned we will need more. 

And my question for you today is, is the workload for individual 

Caregiver support coordinators going down, or do you need more 

staff to keep up with the demand? 

Dr. SHULKIN. Yeah, it is a great question. This is—Senator Murray, I know you are passionate on this, and I thank you for that. 

This is an area that VA is so different than the private sector in 

recognizing this and supporting Caregivers. Interestingly, the data 

is coming out now to say this is a cost-effective way to manage 

healthcare costs. 

Senator MURRAY. I am not surprised, but I am glad there is data. 

Dr. SHULKIN. Without Caregivers, these patients end up back in 

the institutions, and they do not want to be there, and it is very 

expensive to keep them there. So we are expanding this. And you 

are correct, we do need to keep up with the caseload because Caregivers need support. Elizabeth Dole, Secretary Dole, is very articulate about this, and has actually been working with us to help us 

support our Caregivers. 

So the workload is going up, but we are so pleased to be able to 

expand this program with this budget request. 

Senator MURRAY. Okay, great. Secondly, I have heard from veterans in my home State of Washington who are frustrated always 

about waiting months or even longer to get answers to questions 

about benefits and care. So I am really pleased to see that you are 

requesting significantly more funding for both the Health and Benefits Administration. That is really essential to providing good customer service. 

But I am concerned again whether that will be enough and 

whether the Department is managing its money appropriately. The 

crisis that we faced last year when the VA threatened to shut down 

the healthcare system and nearly ran out of money cannot be repeated. So the funding that we provide in 2017 and 2018 has to 

account for major increasing demands on the VA, including providing, as you know, treatment for hepatitis C, increasing demand 

for care both in the VA and in the community, and the costs associated with the VA’s new proposal to consolidate care in the community. 

FORECAST FOR BENEFITS DEMAND

So in light of all of those pressures, how do you anticipate demand for care benefits growing over the next 2 years? 

Mr. MANKER. So we—as look at the caseload, what we see is— 

in 2017 and 2018 we see an increase in the request for claims. And 

the second and third order of effective claims is as folks file claims 

that we—they go over to the Health Administration for care there. 

Senator MURRAY. So you see increasing demand. 

Mr. MANKER. We do. 

Senator MURRAY. And does this budget accommodate that? 

Mr. MANKER. I know from the VBA perspective it does, yes. 
35 

Senator MURRAY. Okay, because that is what we hear constantly 

from our constituents when we do not have enough people out 

there to process. So we are going to be looking at this closely. 

CAREGIVER TRACKING SYSTEM

Let me go back again, Secretary Shulkin, to you. The budget request actually attributes most of the increase in the Caregivers 

Program to more Caregivers receiving stipends. But as you know, 

one of the GAO recommendations for the Caregiver Program is to 

create a new IT system to administer the program and to make it 

more efficient. This system will be really essential as we come closer to expanding the Caregiver Program. I wanted to ask you, is 

there enough funding in your request for the new Caregiver Tracking System, and will it be ready on time? 

Dr. SHULKIN. Senator, that is something that I going to ask if I 

can back to you on because that is—I am going to need to work 

with counsel and the OI&T on that, and make sure that there is 

the appropriate resources to do that. And if I could, I would get 

back to you. 

Senator MURRAY. Okay. If you could answer me for the record. 

Dr. SHULKIN. Yes. 

[The information follows: the requested information was not 

available at the time this publication went to print.] 

Senator MURRAY. And that is a really important part of making 

this work effectively. 

Dr. SHULKIN. Yes. 

Senator MURRAY. So we need to have that ready, on time, and 

at capacity. 

Dr. SHULKIN. Absolutely. 

Senator MURRAY. Thank you very much, and I will submit the 

rest for my record—questions for the record. 

Senator KIRK. Now, the Senator from King Cove, Alaska. 

VA HEALTHCARE SYSTEM IN ALASKA

Senator MURKOWSKI. Thank you, Mr. Chairman. Dr. Shulkin, it 

is has been about a year since you last visited my office. I do appreciate you coming to the State last summer, but I regret to tell you 

that we have seen very little follow up on the state of the VA 

health system in Alaska. So let me tell you where I think we are 

right now in Alaska, and this is not necessarily through my eyes. 

This is through the members of the Veterans Service Organizations 

that have been flooding my office in the past several weeks. 

Before you and Secretary McDonald came to your jobs, we had 

a VA system—a healthcare system that worked up in the State. 

Our vets were seen in a timely fashion. Those that had conditions 

that could not be handled by the VA were seen in the community 

at fee-based care providers. We had good partnerships with our 

community health centers and with the native healthcare system 

to back up. 

But the vets who have been coming in, again, over these past 

weeks and when I have been up home, they are telling me that the 

current leadership team at the VA took a system that was working 

well in our State and went about dismantling it. And a couple of 
36 

illustrations here with regards to the Choice Act that did not require the VA abandon its legacy fee-based programs. VA reads it 

otherwise, and canceled fee-based appointments. These vets were 

forced to deal with the dysfunctional TriWest referral system. They 

still are. Veterans who have been forced to use the Choice Act then 

discovered that VA did not pay for their care as they had done previously. And now what we are getting—the letters that I am getting from vets are saying my bills are being sent to collection agencies when the VA does not pay. 

We do not have very deep representation with medical specialists, but specialists who were willing to take the Choice card are 

now telling me they do not want to have anything to do with the 

hassle, nothing at all. So we have got a loss there. 

We had a great and innovative director at Anchorage VA 

Healthcare System. Not there anymore. That position has still not 

been filled. There is still no full-time physician at the Wasilla 

CBOC (Community-based Outpatient Clinic). The VA is able to find 

some providers who may consider relocation, but then they pull out 

after the relocation promises that have been made by the VA recruiters are withdrawn because they never should have been made. 

And, again, we are not seeing VA senior leadership coming and 

saying we have got—we are willing to work with you. We are going 

to solve these problems. 

So the question to you, Dr. Shulkin, is how would you assess— 

I have given you my assessment and the assessment of so many 

of the veterans who are coming to my office. But how would you 

assess the state of the Alaska healthcare system for the VA in my 

State right now? What needs to be done to restore the access and 

the quality of care that our veterans had, but they no longer are 

experiencing? 

Dr. SHULKIN. Okay. Well, you have mentioned a lot, Senator, and 

so let me try to briefly just tell how I look at this. I think that you 

have identified several things. So pre-Choice I think Alaska had a 

very innovative system that was working well. 

Senator MURKOWSKI. It took a long time, but we got there. 

Dr. SHULKIN. No question about that. Choice was implemented 

and system was changed. And I think that some of the situation 

you are talking about was dated a while ago where essentially we 

were not using fee-based programs. We were not using community 

care programs, and we were only using Choice. That situation has 

now changed in Alaska where after our visits up there, we are 

working very closely with the Indian Health Service, we are working with the South Central Foundation, we are working with the 

DOD facilities there where I think that you are not seeing some of 

the problems that had existed before. 

The Choice Program still continues to be a challenge, and that 

is why we have worked closely with TriWest to actually embed 

TriWest employees in with our VA people, and there are three embedded TriWest employees today in the Anchorage facility. It still 

is somewhat problematic, and that is why we are continuing to ask 

for a contract modification so that VA can take over the scheduling 

of those patients, very similar to what you had before. And we are 

waiting for that contract modification to be approved. 
37 

So Alaska is—was a system that, frankly, was a great model for 

the country. It went through some tough times. We are trying to 

get that back. I think that part of what we are trying to do with 

this new legislation that Senator Tester has taken the lead on is 

to bring back the customer service pieces, what you had in Alaska 

back to the VA. And we know that we have a lot of work to do. 

Senator MURKOWSKI. Well, and I am sure you can appreciate the 

frustration of the many veterans who for years had struggled with 

a system that did not work, and then through the good work of cooperation and collaboration between IHS, community health centers, we kind of built this system. 

Dr. SHULKIN. Yes. 

Senator MURKOWSKI. And we were providing the care that our 

veterans deserved and expected, and we wanted to be able to provide, and it worked throughout agencies. And then we come in and 

we have got this top down approach, and we are starting all over. 

And your term ‘‘somewhat problematic’’—‘‘somewhat problematic’’—is not what I am hearing from our veterans. They are saying 

it is fouled up! It is screwed up. It is a mess. And it is unacceptable. It is unacceptable because we know how to correct it because 

we corrected it. And then you come in and you create chaos. 

So we had asked in the fiscal year 2016 approps bill that a report 

be submitted on the current status of VA healthcare in Alaska. We 

are waiting for a status of that report. You know, you suggest that 

some of the information that I have here is dated. It is not—it is 

not dated, not based on the experience of veterans who are trying 

to access their healthcare now, who are getting these bills from collection agencies now. This is not based on some things that were 

happening a year ago, 6 months ago. 

So I am—we will have Secretary McDonald here before the subcommittee, and I certainly intend to ask him what corrective actions plans you have regarding all of these issues that I have outlined. In the interim, it might be helpful certainly for you all and 

my staff to meet to have a more comprehensive conversation about 

the quality and the access because what is happening now is the— 

is the quality of care, the access to care has been compromised for 

these Alaskan veterans. And there will be no compromise. There 

cannot be no compromise for these healthcare benefits. 

And, again, I think part of the frustration that we have is we 

have come so far only to see it turned over literally within the 

course of a couple months. And you cannot pull the rug out from 

underneath those who have earned these healthcare benefits, and 

that is exactly what your system has done. 

And we thought that the visits to Alaska were going to materialize in some changes that our veterans could see, but I am pressing each and every one of them. I am saying you got to be honest 

with me because the information that we get from you is the most 

telling. And what they are telling me is it has not been fixed, it 

has not been corrected, and they are not doing enough. 

There is no compromise on what our veterans have earned, so 

know that we are going to keep working at it. And it would be 

great if we could set up some time to sit down on that. 
38 

Dr. SHULKIN. Senator, I just want to mention a few things. First 

of all, I appreciate where you are coming from. I heard it personally—— 

Senator MURKOWSKI. I know you did. 

Dr. SHULKIN [continuing]. In Fairbanks, and Anchorage, and the 

Kenai Peninsula. And these were packed houses of people saying 

exactly what you are saying. 

But I just do want to say a couple of things that I hope will be 

helpful. First of all, this was the Choice Program. This was Congress’ program that we are trying to make work, and we understand that it is not working well, and that is why we are working 

with you, and we look for your support to make the changes that 

we need to make. 

But currently, 96 percent of all appointments are scheduled within 30 days in Alaska. We have 120 outstanding consults more than 

30 days that are urgent consults. They are all out in the Choice 

Program. They are all scheduled, but that is too long, and that is 

what we are working with TriWest to fix to make sure that we can 

improve that. 

In terms of putting veterans in line with their own credit, unacceptable. We do not want that happening. We have established a 

toll free hotline now that is 1 (877) 881–7618 that veterans should 

call if they are being hounded by creditors so we can intervene on 

their behalf because we do not want them put in that position. And 

I know that is happening for people in Alaska and across the country, and we are going to—we are going to help them with that. 

Thank you. 

Senator MURKOWSKI. Well, I look forward to our sit down. Thank 

you, Mr. Chairman. 

Senator KIRK. Senator Baldwin. 

Senator BALDWIN. Thank you, Mr. Chairman. 

ADMINISTRATIVE INVESTIGATION BOARD ON MILWAUKEE DOMICILIARY

Dr. Shulkin, as a result of concerns that I reported and shared 

with the VA, the VA convened an Administrative Investigation 

Board in October of last year to review many allegations regarding 

improprieties at the Milwaukee domiciliary. One conclusion 

reached by the Administrative Investigation Board, otherwise 

known as AIB, was that the domiciliary environment was not safe 

and secure. 

An issue raised to corroborate this assertion was that the noninspection of veterans’ belongings. Veterans were found to have alcohol, box cutters, and straight razors. More alarming, during the 

time of that review, while the AIB members were there, a veteran 

tried to commit suicide. 

Mr. Chairman, I would like to insert in the record a news article 

that appeared last night on CBS 58 in Milwaukee that has to do 

with the story that I am about to tell. 

Senator KIRK. So ordered. 

Senator BALDWIN. Thank you. 

[The information follows: the requested information was not 

available at the time this publication went to print.] 
39 

Senator BALDWIN. In my view, this puts a finer point on the need 

to inspect what veterans and visitors are bringing into the domiciliary. Last year, a young veteran, a resident of the VA domiciliary 

in Milwaukee, he was recently out of a rehab program, overdosed 

on heroin, and was found dead in his room at the facility. My understanding is that he was able to bring in needles into the facility 

and potentially the drugs that caused that overdose. This is someone who came to the VA for help. 

Dr. Shulkin, I am very concerned about the whole domiciliary 

program. At my request, the inspector general’s office is reviewing 

the issues surrounding the death of this young veteran. But I think 

we need to go a step further and reassess the program to determine whether security measures nationwide are appropriate, and 

whether domiciliaries are the right place for veterans such as ones 

who have attempted suicide or who have overdosed. It seems to me 

that a facility like this has lax oversight of its resident population, 

and may not be the best place for these veterans. 

So can you speak today to the security of VA domiciliaries, and 

whether you are willing to take a hard look at the appropriateness 

of the program for veterans who may need greater supervision? 

Dr. SHULKIN. Yeah. Senator, what we are talking about is the 

best approach towards this issue that, frankly, is a national epidemic we are seeing all over the country on substance abuse. And 

veterans are a particular risk for substance abuse. 

And so, the domiciliary programs are part of our approach, and 

I do think, and I am open to taking a look at better ways of doing 

this and better ways of trying to address both treatment and prevention of substance abuse. And I wish I could tell you that we 

have found the magic bullet for this, but we need to be trying harder. 

On the issue of security, I will tell you this is a problem for hospitals everywhere. I have struggled with this throughout my career. It is simply is not possible to search every patient and every 

visitor and ensuring what they are bringing in does not contain 

drugs or paraphernalia like syringes. It just simply would not be 

effective. You would have to have essentially what amounts to 

what they do in prisons, which we do not want our facilities to be 

like that. 

So what we do is we need to set up rules about behaviors that 

we expect and what happens and consequences if you break those 

rules, being discharged from the programs. Do we need to look at 

new ways to be able to make sure these are safer places? Absolutely we need to. But I do not want to give the expectation that 

by searching people we are going to be able to prevent this completely. 

Senator BALDWIN. Okay. Just in follow up and based on your answer, there is absolutely a range of activities and procedures that 

could be put into place to increase safety and security beyond the 

search issue. I will note that I have heard that the AIB members 

who were present on site to conduct their investigation were able 

to gain access the facility with no one checking them at the door 

or even, you know, they were already wandering about. And so, 

that obviously suggests a lax set of protocols. 
40 

I would appreciate it if you can commit to reporting back to this 

subcommittee on at least an initial review of the use of these domiciliaries, and the security, and supervision levels, and safety. This 

is a big concern. 

[The information follows:] 

Context of Inquiry: Will VA commit to reviewing the domiciliary program, including the security and safety protocols and the appropriateness of participation of veterans who may require greater supervision? When can we expect the results of that 

review? [reference Dr. Shulkin’s testimony that he is ‘‘open to taking a look at better 

ways of doing this.’’ And ‘‘Do we need to look at new ways to be able to make sure 

these were safer places? Absolutely, we need to.’’] 

Response: VHA Domiciliary Care programs are safe, effective and an appropriate 

level of care for Veterans with mental health and substance use disorders when appropriately operated in conformance with national policy. VHA will continue to 

closely monitor domiciliary safety and security and look for opportunities to improve 

Veteran care. One Veteran death is too many and every effort will continue to support the medical centers in providing a safe and secure environment focused on recovery. Veterans admitted to the residential treatment programs are assessed as 

needing increased supervision and support for symptom reduction and engagement 

in recovery and for whom outpatient care has not been effective. VHA’s residential 

treatment programs provide vital services in the mental health continuum of care 

which includes general outpatient, intensive outpatient, residential and acute inpatient. VHA fully recognizes the increased risk in serving Veterans with mental 

health and substance use disorders in a residential level of care. 

At the end of fiscal year 2015, VHA operated 244 Mental Health Residential Rehabilitation Treatment Programs (MHRRTP) with 8,148 beds at 113 VA Medical 

Centers. During fiscal year 2015, there were over 37,500 admissions to domiciliary 

care with 87 percent of the Veterans admitted having a Substance Use Disorder 

(SUD) diagnosis. Over 15,000 Veterans were provided residential specialty care specifically to treat their SUD. In fiscal year 2015, there were over 2 million patient 

bed days of care provided in VHA Domiciliary programs. During this period, there 

were 13 reported Veteran overdoses resulting in four overdose deaths. The mortality 

rate for Veterans during their residential stay during fiscal year 2014 was 0.06 percent and has decreased by 56.8 percent since 2004. 

VHA is currently revising and updating the VHA MHRRTP Handbook, 1162.02. 

The revisions will include updates to safety and security policy and procedures 

based on lessons learned since the Handbook was published in 2010. VHA recently 

updated guidance clarifying expectations for contraband detection and prevention in 

Domiciliary programs. This guidance has been shared with key stakeholders and 

was recently shared with the field. Concepts discussed in the guidance document 

have been routine topics of conversation with the field through regular monthly 

calls and at the National MHRRTP Managers conference on May 3–5, 2016. A significant step forward in the safety and supervision of VHA’s residential care is the 

current development of a Nursing Model that will guide the provision of 24/7 nursing services in Domiciliary programs based on the Veteran’s needs. This collaborative effort between the Office of Nursing Service and Mental Health Services is 

currently being piloted at ten Domiciliary locations and when completed will be implemented at all locations. This initiative is expected to result in improved patient 

care and the supervision of the residential units. 

NALOXONE KITS AS A HIGH PRIORITY

Senator BALDWIN. I want to just briefly pivot to the related issue 

of over reliance on opioids, and I appreciated Senator Moore Capito 

talking about the bill we have worked jointly together named in 

honor of a marine veteran in Wisconsin, Jason Simcakoski, who 

died at a VA hospital in Tomah. 

You may recall that the inspector general report released last 

August detailing his death from mixed drug toxicity revealed that 

antidotes to overdose, like naloxone and flumazenil, were not available on the emergency crash carts that were brought to Jason’s 

room, and that a facility staff member was tasked with securing an 
41 

antidote from the urgent care clinic, and then it arrived in his room 

some 33 minutes later after he was found unresponsive. 

So I understand that the availability of naloxone and related 

antidotes are tremendously important. They can and do save lives. 

That leads me to the VA’s legislative proposal to eliminate co-pay 

requirements for naloxone kits it distributes to high-risk veterans. 

Since its implementation more than 2 years ago, they have been 

extensively distributed, and lives have been saved. 

But I also know, and you know, that the recently signed Omnibus Appropriations Bill and the Jason Simcakoski Memorial Act 

that I referred to would expand the VA’s overdose education and 

naloxone distribution program to ensure that every VA medical facility and pharmacy is equipped with opioid receptor antagonists 

such as naloxone. 

I want you to please to speak to why providing these kits free 

of charge is such a high priority. 

Dr. SHULKIN. Yes. Well, I think you have said it very well, Senator, which is that in the case of overdose, these are lifesaving 

drugs. I have personally used them, and people go from being essentially unconscious to waking up and talking to you in a matter 

of seconds. And so, if you do not take the right actions, they stop 

breathing, and obviously they can die. 

So I could not agree with you more. Having these available, 

much like years ago we did with the automatic implantable 

defibrillators that you see now in waiting rooms, and airports, and 

restaurants. VA has been distributing these kits out to community 

partners in various areas. We have been doing it by the thousands 

and successfully. I think that getting more of them out will be helpful. 

Last year we prescribed 18,000 prescriptions for naloxone. I 

think you mentioned the issue of co-pays. Fifty percent of them required a co-pay. Eight dollars is our average co-pay. So anything 

that we can do to help eliminate barriers to the use of these drugs 

I think would be important, and education is a primary target of 

ours as well. 

Senator BALDWIN. Thank you. And, Mr. Chairman and Ranking 

Member, I will submit some additional questions for the record. I 

thank you for the time. 

HEPATITIS C DRUG TREATMENT

Senator KIRK. With your indulgence, I will go with a second 

round here. Let me get you on the record about hepatitis C. Last 

year the subcommittee appropriated $1.5 billion for treatment of 

hepatitis C. We have also appropriated another $1.5 billion for advance appropriations in 2017 for the treatment of hepatitis C, 

which should be a good news story. There are dramatically different figures put out by you and the Department about how many 

new patients starts will be achieved in this fiscal year on hepatitis 

C. 

I would like to see how many do you project will be started in 

fiscal year 2016. 

Dr. SHULKIN. Yes. Well, first of all, I could not agree more. We 

thank you for your leadership in providing this to veterans. This 

is one of those miracle drugs that have come through—— 
42 

Senator KIRK. I would say this is a chance for us to have a hepatitis C free veteran population. 

Dr. SHULKIN. Yes, absolutely. 

Senator KIRK. Probably the best legacy for the President on his 

way out of office. 

Dr. SHULKIN. Well, with a 95 percent cure rate, I am not sure 

that you can do that many things this well, so thank you again for 

that support. 

Let me go over the numbers. There should not be any confusion 

about this. VA estimates, using its databases, that we have 120,000 

veterans who have hepatitis C. You can measure hepatitis C in the 

blood. We were originally given the $1.5 billion and, given our pricing for hepatitis C drugs, able to treat this year 35,000 veterans. 

However, the price of the drug has dropped. 

Senator KIRK. They have to go through a course as I remember, 

and for those 35,000 new starts—— 

Dr. SHULKIN. It’s a series of treatments, yes. 

Senator KIRK [continuing]. We would then expect a 97-percent 

success rate with the new starts. 

Dr. SHULKIN. I think—I think that is pretty good. But the reason 

why there may be some confusion, we have had additional good 

news, and that is the pricing on this drug has dropped. That means 

we are going to be able to treat more veterans this year. So instead 

of 35,000, we potentially—potentially—could treat 70,000. That 

means that if you were able to treat 70,000 veterans and you only 

have 120,000, we could actually eliminate or cure those that have 

hepatitis C today because new veterans will enter the system—— 

Senator KIRK. Right. 

Dr. SHULKIN [continuing]. In approximately 2 years. What a— 

what a great story. This would be a miracle and, frankly, a great 

thing to do for veterans. 

The reason why my staff may be using a different number than 

the 70,000 is that this is the potential. To get 70,000 veterans 

through the VA to screen them, to make sure they are appropriate 

to put them through all these treatments, that would require us 

right now given where we are in fiscal year 2016 already, we have 

treated 9,100 patients this year in fiscal year 2016, to do 2,000 

starts per week. 

We have once done that in a week in September of 2015 when 

we went through extraordinary efforts right before the budget year 

ended to get as many veterans in to spend last year’s $1.5 billion. 

But maintaining 2,000 veterans a week for the rest of the year, 

frankly is not going to be practical given our current resources. 

So what we are looking to do is to ask for some flexibility in the 

$1.5 billion, 5 percent of it, to actually increase our staffing in 

these clinics so we can bring through 2,000 veterans a week. So if 

we can actually staff up a tiny bit in these hepatology clinics, these 

hepatitis C clinics, that would be our goal in 2 years to essentially 

eliminate this from the VA system. 

It is going to take an effort operationally to catch up. Right now 

we are very comfortable that our staffing levels are doing about 

1,300 starts a week, okay? That is really our capacity given our 

current staffing that we could sustain. That would get us part way 

towards that number. It would get us, you know, in the 40- to 
43 

50,000 a year, and, frankly, we are going to do everything we can 

to treat every veteran with hepatitis C. 

OVER PRESCRIPTION OF OPIOIDS

Senator KIRK. Good. Could I divert from you to what I have noticed is what I would call a VA way of practicing medicine. This 

has happened in my own family where it seems like—you already 

described the over prescription and ways to deal with opioids. Last 

night the Senate passed the Kirk amendment that would bring the 

VA into the reporting system that we created under the legislation 

to make sure that we are going downward on over prescription. 

In my experience, the over prescription has been Xanax and 

Ambien, too much of that where you develop a real dependency. Is 

there a way that we can make sure that with psychotropic drugs 

that we are doing less and less and less of that just to get the patient out of the door? 

Dr. SHULKIN. Yeah, actually VA does have measures on this. I 

do not have the statistics off the top of my head, but we not only 

know how many patients are on benzodiazepines, but actually the 

combination between benzodiazepines and opioids. And we have 

targeted that as a high-risk sort of high-alert area. 

Senator KIRK. Just see if it is part of socialized medicine to get 

the patient quickly out the door to give them Xanax and Ambien 

in nearly unlimited quantities. I would note that Senator Baldwin 

has talked about the Tomah facility—— 

Dr. SHULKIN. Yes. 

Senator KIRK [continuing]. Which was called the candy factory 

because so much was over prescribed there. 

Dr. SHULKIN. Yes. Yes. So I think we recognize this is a challenge. That is why we are doing so much provider and mandatory 

training on this, something that I think that we are looking to 

make significant progress on. Thank you. 

Senator KIRK. Mr. Tester, any final words? 

VHA 2018 ADVANCE REQUEST

Senator TESTER. I do. Thank you, Mr. Chairman. I want to drill 

down a little bit on the numbers, particularly with the 2018 advance request. I do not see any of the annualized costs for the new 

doctors and nurses that are going to be hired with the Choice Act 

funding. Now, you are going to get another bite at the apple next 

year as far as fiscal year 2018 goes. But does this not leave a huge 

hole in your future budget? 

Dr. SHULKIN. It does. I think you are correct. There is no continued funding in fiscal year 2018 for these new hires. And I would 

also add there are some other components, such as our graduate 

medical education residents. The 5,000 residents that were granted, they also did not continue. And so, and there are actually some 

other components. But I am going to ask the expert on this to just 

clarify exactly what you are asking about, Senator. 

Senator TESTER. Yes. 

Mr. YOW. Yes, sir. We would need about $1.3 billion to continue 

the hires in fiscal year 2018. 

Senator TESTER. Yeah. 
44 

Mr. YOW. We would need about $280 million to continue leases 

that were funded with VACCA section 801 funding, and we need 

about $90 million to continue the residents that were hired under 

section 301 of VACCA. 

Senator TESTER. Okay. I got it, and I appreciate your frankness. 

$1.3 billion, $280 million, $90 million for the residency. This is 

going to leave a hell of a hole, guys. I mean, why are we putting 

an emphasis on getting healthcare providers across the system, 

urban and rural areas. We are going to be laying these folks off. 

Dr. SHULKIN. Well, the advance appropriation is to be able to 

supply us with a stable amount of money going forward, but there 

has to be a second step, as you mentioned, Senator, for us to identify what our actual needs are. Now, with the new Veterans Choice 

Program, what we are trying to understand is what those exact 

numbers are so we can come back and talk about that. 

VA AND DOD JOINT ELECTRONIC HEALTH RECORD

Senator TESTER. Okay. I gotcha, and I just want to tell you that 

from my perspective, if you need $1.3 billion for the new hires that 

we are hiring and it is not in the budget for 2018, we are not doing 

our job, I will just tell you that. I mean, it becomes a problem. And 

the worst thing that could happen, and by the way, it would hurt 

for recruitment, is hire these folks and then not keep them around. 

I want to talk about IT for a second, but we really do need to get 

that fixed if we could. 

The IT, I mean, we have included language in the omnibus requiring the VA to develop and submit to this subcommittee a detailed plan on how to replace or fix the IT. I know you do not lead 

the IT team over at VA, by the way. 

Dr. SHULKIN. No, I do not. 

Senator TESTER. But I do know that you have probably been involved in these discussions. 

Dr. SHULKIN. Yes. 

Senator TESTER. Why is it taking so long to fix this system? 

Dr. SHULKIN. That is one that I would be glad to defer to Laverne Council, who ably leads our IT Department. I have a great 

deal of confidence in her. She has gone in like you would want with 

her private sector background, and really challenged all of the assumptions that frankly have led to an underperforming part of the 

organization. And so, Laverne, I am sure when we come back to 

talk to you March 10th or 11th—I forget the specific day—would 

be glad to address that in a very clear way. 

Senator TESTER. That would be good because, I mean, I think it 

has been 10 years ago—— 

Senator KIRK. Remind him we are going to do a hearing on the 

joint records April 14th—— 

Dr. SHULKIN. Okay. 

Senator KIRK [continuing]. And would want your best possible 

details on that for the subcommittee. 

Dr. SHULKIN. Absolutely. We will be prepared. 

Senator KIRK. I have been holding back as prerogative as chairman to tell you what my IT program would be to make sure that 

we would require all narratives in the Microsoft world and all doc-
45 

uments in .jpg to make sure there was complete usability for everybody in the industry. 

Dr. SHULKIN. Okay. 

Senator KIRK. And make sure that we do not have a separate 

beltway bandit code. And when I talked about this with Secretary 

Shinseki, wanting to make sure that everything was open code 

based on the success that Motorola has had with the Android system when they made Android all open code, and got 70,000 apps 

to that system. My hope is eventually if we take 25, 27 million patients in DOD and VA with an open code system will establish the 

medical records technologies, undeniably American. And an entire 

industry will always—worldwide will be here. And that is my hope 

that we do not let an individual beltway bandit create their own 

code. 

Dr. SHULKIN. Okay. Well, thank you. Thank you for giving us a 

little insight as to what your approach is on that. Thank you. 

Senator TESTER. So when the hearing comes around, you said on 

April 14th? Is that correct? 

Senator KIRK. April 14th, right. 

Senator TESTER. April 14th, it would be great to know where we 

are as far as the status for replacing or modernizing that system. 

It would be great to know what the cost estimates are for that replacement. 

Dr. SHULKIN. Absolutely. 

Senator TESTER. So that it is. I just want to thank you all for 

being here. It is a bit of mental gymnastics for you guys, and I appreciate your professionalism, and I appreciate your honesty. And 

I look forward to working with you as I know others on this subcommittee do to making sure that we meet the needs of our veterans. Thank you. 

Dr. SHULKIN. Thank you. 

Senator KIRK. Let us—we have beat you up enough here—close. 

I want to thank our witnesses, especially my partner, Senator Tester. 

And the record will be open until the close of business next week, 

Thursday, so that members can submit questions for the record. 

SUBCOMMITTEE RECESS

Senator KIRK. The next hearing of the subcommittee will be on 

Thursday, March 10. 

Dr. SHULKIN. That is better than 1:00 a.m. 

Senator KIRK. Better than 1:00 a.m. 

Dr. SHULKIN. Yeah. Yeah. 

Senator TESTER. Thank you, Mr. Chairman. 

Dr. SHULKIN. Thank you. 

Senator KIRK. And we will stand adjourned. 

Senator TESTER. Thanks, Kirk. 

[Whereupon, at 12:34 p.m., Thursday, March 3, the subcommittee was recessed, to reconvene Thursday, March 10, at a 

time subject to the call of the Chair.]