VA Nursing Homes: Reporting More Complete Data on Workload and Expenditures Could Enhance Oversight
Published: 2013-12-20T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In fiscal year 2012, about $4.9 billion of VAs $54 billion health care services budget was spent on nursing home care. To inform Congress of its budgeting priorities, VA prepares a budget justification, which is reviewed by OMB, that includes data on nursing home workload and expenditures in the three settings. VA also collects data on length of stay (long- and short-stay) and resident characteristics, including eligibility status, as VA is required to pay for mandatory veterans nursing home care and may pay for discretionary care as resources permit. These data are important for Congress to understand how funding is allocated for long- and short-stay care and for residents in each setting.
GAO was asked to examine VAs nursing home program. Among other things, GAO examined (1) VAs nursing home workload in each setting, by length of stay and resident characteristics; and (2) VAs expenditures for nursing home care in each setting, by length of stay and resident characteristics. GAO analyzed VA nursing home workload and expenditure data, including fiscal year 2012, by setting, length of stay, and resident characteristics; and interviewed VA officials.
section_title: What GAO Found
paragraphs: In fiscal year 2012, the Department of Veterans Affairs' (VA) nursing home workload--the average number of veterans receiving nursing home care per day--was 36,250 across all of the three nursing home settings in which VA provided or paid for veterans' nursing home care. The three settings include Community Living Centers (CLCs), which are VA-owned and operated; community nursing homes with which VA contracts to provide care for veterans; and state veterans' nursing homes, which are owned and operated by states. Over half (53 percent) of this workload was provided in state veterans' nursing homes, 28 percent in CLCs, and 19 percent in community nursing homes. Nearly 90 percent of total workload was long-stay (91 days or more for residents with chronic conditions), and at least 75 percent of care provided in each of VA's three settings was long-stay. In addition, 62 percent of VA's total workload was provided to discretionary veterans (those veterans without certain levels of service-connected disabilities).
In fiscal year 2012, VA spent $3.5 billion (71 percent) of its total nursing home expenditures on care provided in CLCs, 16 percent in state veterans' nursing homes and 13 percent in community nursing homes. Seventy-five percent of total spending was for long-stay care, and at least 70 percent of spending in each setting was for long-stay care. About half of total VA spending was for discretionary veterans.
GAO found that VA does not provide nursing home workload and expenditure data by length of stay and resident characteristics in its budget justification, although the Office of Management and Budget (OMB) encourages agencies to provide such information to the maximum extent possible to justify staffing and other requirements and improve congressional decision making. As a result, VA does not provide complete information, which could hinder Congress' budgeting and oversight of VA's nursing home staffing and resource requirements.
section_title: What GAO Recommends
paragraphs: To enhance congressional oversight of VA's nursing home program, GAO recommends that VA supplement data currently included in its budget justification with workload and expenditures by length of stay and resident characteristics. VA concurred with GAO's recommendation and stated it will provide these data upon release of its fiscal year 2015 budget.

section_title: Letter
paragraphs: The Department of Veterans Affairs (VA) operates one of the largest  health care delivery systems in the nation. In fiscal year 2012, VA served  more than 6.3 million individuals through 21 health care networks at a  total cost of nearly $54 billion. Of this, about $6.3 billion was spent on  long-term care, including institutional long-term care provided in nursing  homes, and noninstitutional long-term care provided in community  settings. Most of VA’s spending on long-term care was for nursing home  care, which accounted for about 9 percent of total VA health care  spending in fiscal year 2012. Nursing home care and long-term care  overall are particularly important to VA, in part, because the proportion of  the veteran population 65 and older—a vulnerable population that is the  primary user of such care—is much larger than the proportion of  individuals 65 and older in the general population. In fiscal year 2011, just  over 40 percent of the veteran population was age 65 or older, compared   In addition, long-term care  to about 13 percent of the general population.services are necessary for some younger veterans.
VA’s nursing home program provides or pays for care in three settings.  VA provides nursing home care in VA-owned and operated nursing  homes known as Community Living Centers (CLC). VA also pays for care  provided to veterans in community nursing homes, with which VA  contracts to provide care to veterans. In addition, VA pays for all or part of  the cost of care for veterans in state veterans’ nursing homes, which are  owned and operated by states. VA’s nursing home care is broadly  defined by length of stay—long- and short-stay care. Long-stay care,  which lasts for 91 days or more, is provided to residents who cannot be  cared for at home because of severe chronic physical or mental  limitations. Short-stay care, which lasts 90 days or less, includes more  resource-intensive services, such as postacute care needed for residents  recuperating from a stroke or hip replacement.
A service-connected disability is an injury or disease that was incurred or aggravated  while on active duty. VA classifies veterans with service-connected disabilities according  to the extent of their disability. These classifications are expressed in terms of  percentages—for example, the most severely disabled veteran would be rated as having a  service-connected disability of 100 percent. Percentages are assigned in increments of   10 percent.
We previously found that VA did not collect data on veterans’ eligibility  status and length of stay for all three nursing home settings. Specifically,  in 2004, we found that VA lacked such data for community nursing homes  and state veterans’ nursing homes, and concluded that gaps in VA data  impeded VA’s oversight of its nursing home program. In addition, in  2006, we found that VA did not compile information on key characteristics  of nursing home residents—including age and eligibility status—and that  VA needed this information to plan for nursing home care. We  recommended that VA collect and report on these measures to improve  on the completeness of data needed for VA’s oversight. VA implemented  these recommendations and now has such data for planning and  budgetary purposes.
In this report, we use the term expenditures to refer to obligations, which VA reports in  its budget justification. Obligations refer to a definite commitment creating a legal liability  to make payments immediately or in the future. An obligation is incurred, for example,  when an agency awards a contract to a private entity. encourages agencies to provide information on workload and unit costs,  such as per diem expenditures, in budget justifications to the maximum  extent possible to justify staffing and other requirements. OMB states in  guidance to agencies that providing more detailed information on federal  programs and spending can improve congressional decision making. As  a result, VA nursing home workload and expenditure data are important  to Congress in providing oversight of budgeting and health care services,  and understanding how the budget they approve is allocated for nursing  home care by length of stay, mandatory and discretionary veterans, and  age. In recent years, we have identified weaknesses regarding VA’s  inclusion and presentation of health care information in its budget  justification, including nursing home care, and made recommendations to  improve the information included and how it is presented.
You asked us to conduct a review of VA’s nursing home care provided in  the three settings to better understand differences in spending and the  type of care provided in each setting. In this report we examine: (1) the  factors considered in deciding the nursing home setting in which veterans  receive care; (2) VA’s nursing home workload in each setting, by length of  stay and resident characteristics; and (3) VA’s expenditures for nursing  home care in each setting, by length of stay and resident characteristics.
To examine the factors considered in deciding the nursing home setting in  which veterans receive VA care, we interviewed officials in the Veterans   Office of Geriatrics and Extended Care,  Health Administration’s (VHA)which oversees CLCs and the community nursing home program, and  officials from VHA’s Chief Business Office, which has financial oversight  of the state veterans’ nursing home program, including oversight of  veterans’ eligibility for VA-funded nursing home care, and the amount  paid by VA for these veterans. We discussed with these officials how the  nursing home settings differ in terms of their organizational structure and  the types of services typically offered at each setting. We also discussed  VA’s process for referring veterans for nursing home care, and the factors  considered in deciding which nursing home setting will be used to provide  care for eligible veterans. We reviewed relevant laws, regulations, and VA  policies and procedures regarding the provision of nursing home care to  veterans in CLCs, community nursing homes, and state veterans’ nursing  homes.
To examine nursing home workload in each of VA’s three nursing home  settings, we analyzed data provided by VA on average daily census for  fiscal years 2010–2012, the most recent data available at the time of our  analysis, at the national level for each setting, and for each of the   21 networks. We analyzed average daily census by length of stay (short  and long stays) and by resident characteristics—age and eligibility  status—at the national level and for each of the 21 networks. We also  assessed the extent to which VA reported nursing home workload data in  its budget justification to Congress to the maximum extent possible to  justify staffing and other requirements, as encouraged by OMB. In  addition, we interviewed VA officials from the Office of Analytics and  Business Intelligence, which is responsible for program analysis and  reporting.
To examine VA expenditures for nursing home care, we analyzed  expenditure data provided by VA for each of the three nursing home  settings from fiscal years 2010–2012, the most recent data available at  the time of our analysis, at the national level and for each of the 21  networks. We analyzed expenditure data by length of stay and resident characteristics at the national level and for each of the 21 networks. We  also assessed the extent to which VA reported nursing home expenditure  data in its budget justification to Congress to the maximum extent  possible to justify staffing and other requirements.officials noted above, we interviewed officials from VHA’s Office of  Finance, which is responsible, in part, for developing VA budget  estimates.
To assess the reliability of VA’s workload and expenditure data we took  several steps. We compared the data to the data contained in VA’s  annual budget justification. We also reviewed available documentation  on the underlying data systems that VA used to generate the data.  Additionally, we discussed with VA officials the methodology used to  generate the data, and the comparability of the data across the three  nursing home settings. We also conducted internal checks for logic and  consistency of the data by comparing workload and expenditure data  (broken out by length of stay and resident characteristics in each setting)  to total workload and expenditures in each setting. We discussed and  resolved any discrepancies we found with VA officials. We found the data  reliable for the purposes of our engagement.
We conducted this performance audit from May 2013 to December 2013  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: Nationwide, VA provides or pays for veterans’ nursing home care in three  settings: CLCs, community nursing homes, and state veterans’ nursing  homes.the cost of care that is covered for eligible veterans.
These settings vary in terms of their characteristics, as well as  VA provides nursing home care to veterans in 134 CLCs nationwide.  CLCs are typically within or in close proximity to VA medical centers. VA  requires CLCs to meet The Joint Commission’s long-term care  standards. veterans in CLCs, while discretionary veterans may be required to pay a  copayment depending on their income or other factors.
See Veterans Health Administration Handbook 1142.01, Criteria and Standards for VA  Community Living Centers (Aug. 13, 2008). The Joint Commission is an independent  organization that accredits and certifies health care organizations and programs in the  United States.
Medicare is the federal health insurance program for people age 65 and older,  individuals under age 65 with certain disabilities, and individuals diagnosed with end-stage  renal disease. Medicaid is a federal-state program that provides health care coverage to  certain categories of low-income individuals. pays for the full cost of care for mandatory veterans, while discretionary  veterans may be subject to a similar copayment as in CLCs depending on  their income or other factors. However, VA is generally restricted by law  from paying for more than 6 months of care for discretionary veterans.
These veterans must therefore have other sources of payment, and,  according to VA officials, most long-stay residents may enroll in Medicaid,  have private long-term care insurance, or pay for care through out-of- pocket spending.
VA also pays for all or part of veterans’ care in 140 state veterans’  nursing homes nationwide. For state veterans’ nursing homes, VA pays at  least a portion of the cost of providing nursing home care for eligible  veterans in these homes, but does not control the admission process.  Veterans are admitted based on eligibility criteria as established by state  requirements. For state veterans’ nursing homes to participate in VA’s  program, however, VA generally requires that at least 75 percent of the   In addition, VA requires state veterans’ nursing  residents be veterans. homes to be certified by VA annually, and ensures compliance with its  standards through surveys and audits. Each fiscal year, VA establishes  the per diem rates paid to state veterans’ nursing homes for care  provided to veterans. For mandatory veterans, VA pays a higher per diem   For discretionary  that covers the full cost of care, including medications.veterans, VA pays the lesser of the basic per diem established by VA or  one-half of the total daily cost of care.nursing homes, there is no restriction on the number of days for which VA  may pay for care for discretionary veterans in state veterans’ nursing  homes. As part of VA’s support and oversight of state veterans’ nursing  homes, VA medical centers of jurisdiction process and approve per diem  reimbursements for the state veterans’ nursing homes located in their  geographic areas. In addition to paying some or all of the cost of  providing nursing home care to veterans, VA supports state veterans’  nursing homes by awarding grants to states for construction or renovation  of facilities. These grants are awarded following VA’s review and approval  of proposals submitted by state officials. In addition to per diem payments  and construction grants from VA, state veterans’ nursing homes may  receive payments from a number of different sources, including Medicare  and Medicaid.
While veterans of all ages may need VA nursing home care, the need for  such care increases with age because elderly veterans are more likely to  have functional or cognitive limitations that indicate a need for nursing  home care. in 2014 and decline thereafter (see fig. 1). However, the percentage of  elderly veterans is expected to remain relatively unchanged due to a  decline in the overall veteran population. Although the need for VA  nursing home care remains, for over a decade VA has highlighted the  potential benefits of providing veterans with alternative options for long- term care—specifically, less costly home and community-based care—in  an effort to lessen the need for more costly nursing home care. For  example, in its 2014 budget justification, VA proposed legislation that  would authorize VA to pay for care in VA-approved medical foster homes  for veterans who would otherwise need nursing home care.
Functional limitations are physical problems that limit a person’s ability to perform  routine daily activities, such as eating, bathing, dressing, paying bills, and preparing  meals. Cognitive limitations are losses in mental acuity that may also restrict a person’s  ability to perform such activities. Institutionalization in a nursing home is more common at  older ages—in 2010, about 1 in 8 people age 85 or older resided in institutions, compared  with 1 percent of people ages 65 to 74. See Congressional Budget Office: Rising Demand  for Long-Term Services and Supports for Elderly People (Washington D.C.: June 2013).
section_title: Decisions Regarding Which Nursing Home Setting Is Used to Provide Care Are Decentralized, and Vary Based on Multiple Factors
paragraphs: Decisions about the nursing home setting in which a veteran will receive  care are decentralized to the local level because of several factors,  including variability in the choice of available settings, the nursing home  care services available, and admissions policies at each type of setting. In  addition, veterans’ nursing home service needs, eligibility status, and  preferences about the location of care are considered in deciding the  setting to choose.
subsections: section_title: Decision Making Is Decentralized Due to Variation in Several Factors, Including Availability of Nursing Home Settings, Services, and Admissions Policies at Local Level
paragraphs: VA program officials told us that the decisions as to which nursing home  setting would be used are decentralized to the local level because they  are dependent upon several factors including the type of setting available  in each community, and availability varies considerably across locations.  For example, veterans in need of nursing home care in Augusta, Maine  who wish to stay within about a 50-mile radius may have the option of  receiving care from several settings including 1 CLC, 12 community  nursing homes and 2 state veterans’ nursing homes, assuming availability  of beds and resources. However, veterans in Saginaw, Michigan wishing  to stay within a similar radius may have the option of receiving care from  1 CLC and 3 community nursing homes, depending on the availability of  beds and resources, since the only 2 state veterans’ nursing homes are  over 100 miles away.
In addition, VA officials told us that decisions about which setting is used  are based upon veterans’ specific nursing home service needs, and  settings varied in the type of specific services offered. For example,  officials told us that in certain geographic areas CLCs provide certain  services that are not available in the community, such as dementia care,  behavioral health services, and care for ventilator-dependent residents. In  other areas, however, officials told us that these specialized services  might not be available in a CLC and instead might be available at a  community nursing home. When an individual medical center has more  than one CLC in its service area, each CLC may offer a unique set of  services. Therefore, according to officials, the availability of different types  of services in each nursing home setting depends largely on location.
VA officials further told us that admissions policies are generally the same  for all CLCs, but may vary for community nursing homes and state  veterans’ nursing homes. CLCs are required to provide care based on  agency-wide policies; therefore, eligibility criteria and admissions policies  are generally uniform across the country. An interdisciplinary team— including personnel such as a registered nurse, social worker, recreation  therapist, medical provider, dietitian, and any other discipline(s) directly  involved in the care of the resident—at the VA medical center of  jurisdiction determines whether the veteran has a clinical need for nursing  home care. This determination is to be based on a comprehensive clinical  assessment of medical, nursing and therapy needs; level of functional  impairment; cognitive status; rehabilitation needs; and special emphasis  care needs, such as spinal cord injury or end-of-life care. Each CLC is  required to use a standardized instrument that is used by all Centers for  Medicare & Medicaid Services-certified nursing homes for assessment,  treatment planning, and documentation and evaluation of care and  services. Three key factors are considered at the time of admission:   (1) the specific services to be provided; (2) whether the stay is short or  long; and (3) the setting to which the resident will be discharged.
Admissions policies are generally standardized for community nursing  homes, but may vary for state veterans’ nursing homes based on state  requirements. Community nursing homes are required to be certified for  participation in the Medicare and Medicaid programs, and use the same  standardized instrument for assessment, evaluation and treatment  planning as CLCs. VA officials told us that community nursing homes are  required to accept all eligible veterans referred by VA, subject to  availability of beds and required resources. State veterans’ nursing  homes are not required to provide VA with documentation of their  admissions policies. Since these homes are state-owned and operated  entities they are subject to admissions and eligibility criteria that vary from  state to state. For example, for admission, state veterans’ nursing homes  in Alabama require the veteran to have 90 days of service, at least one  day of which was wartime service. In contrast, state veterans’ nursing  homes in New York require the veteran to have only 30 days of active  service, while homes in Florida do not require any wartime service.
section_title: Veterans’ Eligibility Status and Location Preferences Also Determine the Type of Setting Used
paragraphs: In addition to the type of available settings, the nursing home care  services available, and admissions policies at each type of setting, VA  officials told us that veterans’ eligibility status, and preferences about  remaining close to home and family or willingness to travel to a nursing  home setting were important considerations. For example, a discretionary  veteran with a preference for staying close to home might be a candidate  for admission to a community nursing home or a state veterans’ nursing  home if a CLC was too far away. However, officials told us that because  of the veteran’s discretionary status, he or she would be informed of VA’s  restriction of coverage to only the first 180 days of care in the community  nursing home, and staff would assist the veteran in obtaining Medicaid  coverage. The veteran’s eligibility status would be less important if  admission was made to the state veterans’ home since the restriction on  length of coverage would not apply to this setting. However, officials  emphasized that these considerations were made within the context of  the availability of specific settings, specific services, and eligibility criteria  and admissions policies across locations. Given the variability in these  factors, veterans in two different communities with the same service  needs, eligibility status and preferences might be admitted to different  settings.
section_title: State Veterans’ Nursing Homes Provided Care for over Half of VA’s Total Nursing Home Workload, and Workload in All Three Settings Was Mostly Long Stay
paragraphs: Of the three VA nursing home settings, state veterans’ nursing homes  provided care for just over half of VA’s nursing home workload in fiscal  year 2012. VA’s total nursing home workload was primarily long stay that  year. Most of the nursing home care that VA provided or paid for in fiscal  year 2012 was for discretionary veterans and for residents ages 65 to   84 years old. In addition, veterans’ eligibility status and age varied by  setting.
subsections: section_title: State Veterans’ Nursing Homes Provided Care for over Half of VA’s Nursing Home Workload in Fiscal Year 2012
paragraphs: State veterans’ nursing homes accounted for 53 percent of the  workload—measured by average daily census—for which VA provided or  paid for care in fiscal year 2012. CLCs provided care for 28 percent of the  total workload, and community nursing homes provided care for   19 percent of the workload. (See fig. 2.) In fiscal year 2012, the most  recent year for which data were available, state veterans’ nursing homes  provided care to an average of 19,355 residents per day, out of the total  average daily workload of 36,250 residents for whom VA provided or paid  for nursing home care. This and other workload patterns we examined  have been consistent in recent years based on VA data for fiscal years  2010-2012.
At the network level, the proportion of nursing home workload in each  setting varied widely by network, particularly the range of workload in  state veterans’ nursing homes compared to the other settings. For  example, state veterans’ nursing homes comprised 74 percent of total VA  nursing home workload in Veterans Integrated Service Network (VISN) 16  (South Central VA Health Care Network), compared to 20 percent of the  nursing home workload in VISN 21 (Sierra Pacific Network). (See app. I  for more information on nursing home workload by network and setting.)
section_title: Workload in All Three Nursing Home Settings Was Primarily Long Stay
paragraphs: Overall, long-stay care accounted for nearly 90 percent of VA’s total  nursing home workload in fiscal year 2012 (31,750 of the 36,250  residents for whom VA provided or paid for care each day), and long-stay  care accounted for at least three-quarters of all workload in each of VA’s  three nursing home settings. (See fig. 3.) Of the three settings, state  veterans’ nursing homes had the largest proportion of long-stay workload  (97 percent) compared to community nursing homes (80 percent) and  VA’s CLCs (76 percent). These patterns were consistent from fiscal year  2010 through fiscal year 2012. VA officials told us that they examine  workload data by length of stay for planning purposes, but do not make  these data available publicly.
For all of the networks, the majority of workload was long-stay. The  proportion of long-stay workload ranged from 80 percent to 95 percent,  with the lowest proportion of long-stay workload in VISN 18 (VA  Southwest Health Care Network), VISN 21 (Sierra Pacific Network), and  VISN 22 (Desert Pacific Healthcare Network), and the highest proportion  of long-stay workload in VISN 3 (VA New York/New Jersey Veterans  Healthcare Network). (See app. II for information on workload by network  and length of stay.)
VA officials said that they thought long-stay care (measured by average  daily census) accounted for a high proportion of CLC workload because  CLCs provide a number of long-stay programs for veterans who are  unable to access certain nursing home services in other settings. For  example, according to VA officials, some CLCs offer specialized long-stay  programs for residents with dementia or spinal cord injuries, and may also  serve residents with mental or behavioral health conditions who are not  eligible for nursing home care in other settings.
section_title: Discretionary Veterans and Veterans Age 65 to 84 Accounted for Most of VA’s Nursing Home Workload
paragraphs: Nearly two-thirds (62 percent) of VA’s nursing home care in fiscal year  2012 was provided to discretionary veterans, while just over one-third   (35 percent) was provided to mandatory veterans. When examined by  age group, nursing home residents 65 through 84 years of age comprised  a larger proportion of the workload than other age groups, amounting to   45 percent of VA’s nursing home workload. Residents age 85 and older  amounted to 37 percent, and those under 65 years of age amounted to  16 percent. (See fig. 4.)
At the network level, workload by resident characteristics generally  mirrored overall patterns. Workload for most networks was largely  discretionary, with discretionary care comprising at least half of the  workload in 20 of VA’s 21 networks. Discretionary workload ranged from  40 percent of total workload in VISN 21 (Sierra Pacific Network) to   69 percent of total workload in VISN 7 (VA Southeast Network) and VISN  3 (VA New York/New Jersey Veterans Healthcare Network). (See app. III  for information on workload by network and eligibility status.) In addition,  residents 65 through 84 years of age comprised similar proportions of  workload in each network. Specifically, the proportion of workload for  residents 65 through 84 years of age ranged from 42 percent in VISN 1  (VA New England Healthcare System), VISN 3 (VA New York/New  Jersey Veterans Healthcare Network), VISN 15 (VA Heartland Network),  and VISN 21 (Sierra Pacific Network) to 50 percent in VISN 6 (VA Mid- Atlantic Health Care Network) and VISN 11 (Veterans in Partnership).  (See app. IV for information on workload by network and resident age.)
section_title: Veterans’ Eligibility Status and Age Varied by Setting
paragraphs: The proportion of nursing home workload by veterans’ eligibility status— mandatory veterans compared to discretionary veterans—varied widely  by setting. State veterans’ nursing homes provided the highest proportion  of discretionary care compared to the other nursing home settings—  84 percent of workload in state veterans’ nursing homes was for care  provided on a discretionary basis, compared to 48 percent of workload in  CLCs and just 18 percent in community nursing homes. Conversely,  community nursing homes provided the highest proportion of mandatory  care (82 percent of workload), followed by CLCs (52 percent) and state  veterans’ nursing homes (9 percent). (See table 1.)
The proportion of workload by age group also varied among the three  settings. Of the three settings, state veterans’ nursing homes had the  highest proportion of workload for veterans age 85 and older. State  veterans’ nursing homes also had the smallest proportion of workload for  residents under age 65, who constituted less than a tenth of the workload.  CLCs and community nursing homes had about the same proportions of  workload for each age group, and in contrast to state veterans’ nursing  homes, they had higher proportions of workload for residents under age  65 (27 and 24 percent of workload, respectively, compared to 8 percent).
These patterns indicate that the characteristics of resident populations  varied distinctly across settings. A higher proportion of workload in state  veterans’ nursing homes was for discretionary and older veterans than in  the other two settings. In addition, while workload in CLCs and community  nursing homes had a similar age distribution of residents, community  nursing homes had a higher proportion of workload for mandatory  veterans than CLCs.
VA officials told us that, at the national level, they rely on workload data  for planning and budgeting purposes, especially to ensure that there are  adequate resources to serve mandatory veterans. Officials said that  reviewing the mix of mandatory versus discretionary veterans is  particularly important since VA is required to serve the needs of  mandatory veterans. VA officials told us that age data are also becoming  important because VA now has a cohort of younger residents, and VA  needs to be attuned to these population changes to ensure the required  services are available. However, VA does not currently publish data on  nursing home workload disaggregated by length of stay and resident  characteristics in its budget justification. As a result, VA is not providing  workload data on nursing home care provided or paid for to the maximum  extent possible as encouraged by OMB guidance to justify staffing and  other requirements. Congressional stakeholders therefore have  incomplete information on the type of workload (long-stay or short-stay)  being provided in each nursing home setting, as well as how settings  differ in eligibility status and age of residents they serve. The lack of such  information could hinder congressional budgeting and program decision  making and oversight regarding VA’s staffing and resource requirements  for providing nursing home care.
section_title: Most of VA’s Nursing Home Spending Was for CLCs and Most Spending in All Three Settings Was for Long-Stay Care
paragraphs: Just under three-quarters of VA’s total nursing home expenditures in  fiscal year 2012 were for care provided in CLCs. In addition, per diem  expenditures in CLCs—i.e., the average daily cost per resident—were  significantly higher than the per diem expenditures in community nursing  homes and state veterans’ nursing homes. Over half of VA’s nursing  home spending was for discretionary care and nearly half of spending  was for veterans age 65 to 84. However, spending by eligibility status and  age cohort varied by VA nursing home setting.
subsections: section_title: Nearly Three-Quarters of Total Spending Was for CLCs and CLC Per Diem Expenditures Were Considerably Higher than Per Diem Expenditures in Other Settings
paragraphs: In fiscal year 2012, VA spent more for care provided in CLCs than in the  other two settings combined. Seventy-one percent ($3.5 billion) of VA’s  total expenditures was spent on care provided in CLCs (see fig. 5),  although CLCs accounted for 28 percent of the total workload.  Conversely, VA spent 16 percent (about $800 million) for nursing home  care in state veterans’ nursing homes, although state veterans’ nursing  homes accounted for 53 percent of VA’s nursing home workload. The  share of VA expenditures in each setting and other expenditure patterns  we examine below remained relatively unchanged between fiscal years  2010-2012.
Similar to workload, the proportion of VA nursing home expenditures  accounted for by each setting varied widely by network. For example,  nearly 90 percent of VA’s expenditures in VISN 5 (VA Capitol Health Care  Network) were for care provided in CLCs, whereas in VISN 19 (Rocky  Mountain Network) just 48 percent of expenditures were for care provided  in CLCs. (See app. V for more information on nursing home expenditures  by network and setting.)
In addition to CLCs accounting for most of VA’s total nursing home  expenditures, the per diem expenditure in CLCs was considerably higher  than that for community nursing homes and state veterans’ nursing  homes, as also reported in VA’s annual budget justification. Specifically,  while the per diem expenditure across all settings in fiscal year 2012 was  $370, the per diem expenditure in CLCs was nearly 4 times higher than  for community nursing homes, and about 8 times higher than for state  veterans’ nursing homes—$953 compared to $244 and $113,  respectively. (See table 2.) We also found that the per diem expenditure  for CLCs was substantially higher than the per diem expenditure for  community nursing homes and state veterans’ nursing homes, regardless  of the resident’s length of stay. Although the short-stay per diem  expenditure in CLCs ($1,167) was substantially more than the per diem  expenditure for long stays ($884), both were considerably higher than the  per diem expenditures for community nursing homes and state veterans’  nursing homes.
VA officials told us that they have not done any studies comparing the  reasons for differences in per diem expenditures across settings because  such expenditures are not comparable. However, VA officials provided us  with a breakdown of the various components of total and per diem  expenditures in CLCs. (See table 3.) VA officials indicated that “core”  CLC expenditures, which account for about 40 percent of total CLC per  diem expenditures, would be comparable to the care that VA pays for in  community nursing homes and state veterans’ nursing homes. In addition  to these core expenditures, VA’s expenditures for CLCs in fiscal year  2012 included direct care expenditures for physicians and other medical  personnel staffing, indirect care expenditures for education and research,  and overhead expenditures related to VA national programs, among  others. In particular, VA officials noted that CLCs are often located in or  within close proximity to a VA medical center, and that the facility  expenditures alone for CLCs are generally higher than those of  community nursing homes and state veterans’ nursing homes, which are  generally stand-alone facilities. In fiscal year 2012, for example, the per  diem expenditure for CLC facility costs alone was $234, roughly  comparable to the entire per diem that VA paid for veterans to receive  care in community nursing homes that year. VA officials also told us that  while the amount of nursing staff in community nursing homes is similar to  that of CLCs, the skill level may not be as high. For example, CLCs may  hire more licensed and registered nurses due to the needs of the  residents in CLCs. VA officials also told us that expenditures for  emergency medical care would not be included in the community nursing  home per diem expenditures, but that these expenditures are included for  CLC residents. In addition, while the cost of routine medications is  covered under the community nursing home per diem, any high-cost  medications are not, although they are accounted for in the overall  expenditures for operating the community nursing home program.  Officials also noted that per diem expenditures for state veterans’ nursing  homes only represent a portion of the total expenditures for care, with the  remainder being paid for by the state and the veteran.
section_title: VA Spent More in All Three Settings on Long-Stay Care than Short-Stay Care
paragraphs: The majority of VA’s spending for nursing home care in fiscal year 2012— $3.7 billion, or 75 percent—was on long-stay care. Long-stay care  accounted for most of VA’s expenditures in each nursing home setting,  and accounted for all but a small percentage of spending in state  veterans’ nursing homes. (See fig. 6.) Although VA officials said they  examine data on nursing home spending by length of stay for planning  and budgeting purposes, VA does not include such data in its budget  justification.
Similarly, at the network level, the majority of expenditures for all  networks were for long-stay care. The proportion of expenditures for long- stay care ranged from 62 percent for VISN 18 (VA Southwest Health Care  Network) to 90 percent for VISN 3 (VA New York/New Jersey Veterans  Healthcare Network). (See app. VI for information on expenditures by  network and length of stay.)
section_title: Over Half of VA’s Nursing Home Spending Was for Discretionary Care and Just Under Half Was for Veterans Age 65 to 84
paragraphs: Overall, discretionary care accounted for just over half (52 percent or   $2.5 billion) of all VA nursing home spending—a slightly lower proportion  than workload, of which discretionary care comprised 62 percent. Just  under half (47 percent or $2.3 billion) was spent on care for residents   age 65 to 84. About one-quarter was spent on residents under age 65  and about the same percent for residents age 85 and over. (See fig. 7.)
At the network level, total expenditures by eligibility status varied by  network, with the proportion of spending for discretionary care ranging  from 37 percent in VISN 6 (VA Mid-Atlantic Health Care Network) to   61 percent in VISN 15 (VA Heartland Network) and VISN 23 (VA Midwest  Health Care Network). (See app. VII for information on expenditures by  network and eligibility status.) Spending by age group did not vary as  substantially between networks, however. Specifically, the proportion of  spending for residents 65 through 84 ranged from 45 percent in VISN 1  (VA New England Healthcare System), VISN 15 (VA Heartland Network),  and VISN 19 (Rocky Mountain Network), to 51 percent in VISN 6 (VA  Mid-Atlantic Health Care Network). (See app. VIII for information on  expenditures by network and resident age.)
section_title: Spending by Veterans’ Eligibility Status and Age Varied across Settings
paragraphs: Similar to workload, spending for discretionary care varied widely by  setting, with state veterans’ nursing homes having the highest proportion  of their total spending (84 percent) for discretionary care compared to the  other two settings (50 percent in CLCs and 18 percent in community  nursing homes). (See table 4.) Also, state veterans’ nursing homes had  the highest proportion (46 percent) of their total spending for residents  age 85 and older, and the lowest proportion (8 percent) on residents  under age 65. CLCs and community nursing homes had similar  proportions of their total spending on care for residents in each age  group.
Similar to workload data, VA program officials told us that they rely on  expenditure data by length of stay and resident characteristics for  planning and budgeting purposes. This type of analysis is important given  the significant differences in short- and long-stay per diem expenditures,  particularly for CLCs, as well as differences in per diems that VA pays for  mandatory and discretionary veterans in state veterans’ nursing homes.  In addition, according to officials, expenditure data on community nursing  homes are especially important from a program perspective since VA  looks at unit costs to help in rate negotiations. However, VA does not  currently include expenditure data disaggregated by length of stay and  resident characteristics in its budget justification, and therefore does not  provide information on unit costs to the maximum extent possible as  encouraged by OMB to justify staffing and other requirements. As a  result, congressional stakeholders have incomplete information on the  budget that is approved for VA nursing home care, including the  proportion of expenditures that is allocated for long-stay and short-stay  care, as well as expenditures by resident characteristics. The lack of such  information could hinder congressional budgeting and program oversight  regarding VA’s staffing and resource requirements for providing nursing  home care.
section_title: Conclusions
paragraphs: VA now has key data on workload and expenditures for its three nursing  home settings that were lacking in the past, and VA officials told us that  they use these data for budgeting and planning purposes. Our analysis of  these data show that the nursing home care that VA provides or pays for  is primarily for long-stay care of 90 days or more for residents with  chronic physical and mental limitations across all three nursing home  settings, rather than short-stay care for residents with postacute care  needs. Most of VA’s nursing home workload is for discretionary care,  rather than mandatory care, and more care is provided for residents 65 to  84 years of age than for other age groups, though these patterns vary by  setting. As VA determines budget estimates and plans for future care  needs, these data provide a foundation for understanding the type of care  provided, the characteristics of the residents receiving it, and differences  among the three settings.
We believe that having and using the key workload and expenditure data  that we analyzed in this report provides VA with more complete data to  better inform its budget estimates and conduct program oversight than in  the past. VA is to be commended for collecting and using the information  to improve its decision making. However, VA only includes data on total  nursing home workload, total expenditures, and per diem expenditures by  the three nursing home settings in its budget justification and does not  include workload or expenditures disaggregated by length of stay or  resident characteristics to the maximum extent possible to justify staffing  and other requirements. As a result, Congress does not have complete  nursing home data on workload and expenditures by the three settings.  The lack of such information could hinder congressional decision making  and oversight of budgeting of VA nursing home care staffing and resource  needs for care, which accounts for a significant portion of VA’s health  care budget and serves a vulnerable population.
section_title: Recommendation for Executive Action
paragraphs: To provide more complete data for Congress, we recommend that the  Secretary of Veterans Affairs supplement nursing home workload and  expenditure data currently included in VA’s budget justification with the  following information:
Average daily census by length of stay and resident characteristics,  including veterans’ eligibility status and age.
Total expenditures and per diem expenditures by length of stay and  resident characteristics, including veterans’ eligibility status and age.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to VA for comment. In its written  comments—reproduced in appendix IX—VA concurred with our  recommendation and stated that it will provide supplemental data on both  nursing home workload and expenditures by length of stay and resident  characteristics upon release of its fiscal year 2015 budget. VA stated that  it would provide data for state veterans’ nursing homes to the extent the  data are available.
We are sending copies of this report to the Secretary of Veterans Affairs,  and appropriate congressional committees. In addition, the report will be  available at no charge on the GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  Vijay D’Souza at (202) 512-7114, or dsouzav@gao.gov. Contact points  for our Offices of Congressional Relations and Public Affairs are on the  last page of this report. GAO staff who made major contributions to this  report are listed in appendix X.
section_title: Appendix I: Percentage of Nursing Home Workload by Network and Setting, Fiscal Year 2012
section_title: Appendix II: Percentage of Nursing Home Workload by Network and Length of Stay, Fiscal Year 2012
section_title: Appendix III: Percentage of Nursing Home Workload by Network and Eligibility Status, Fiscal Year 2012
section_title: Appendix IV: Percentage of Nursing Home Workload by Network and Resident Age, Fiscal Year 2012
section_title: Appendix V: Percentage of Nursing Home Expenditures by Network and Setting, Fiscal Year 2012
section_title: Appendix VI: Percentage of Nursing Home Expenditures by Network and Length of Stay, Fiscal Year 2012
section_title: Appendix VII: Percentage of Nursing Home Expenditures by Network and Eligibility Status, Fiscal Year 2012
section_title: Appendix VIII: Percentage of Nursing Home Expenditures by Network and Resident Age, Fiscal Year 2012
section_title: Appendix IX: Comments from the Department of Veterans Affairs
section_title: Appendix X: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, James C. Musselwhite, Assistant  Director; Iola D’Souza; Linda Galib; Drew Long; and Hemi Tewarson  made key contributions to this report.
section_title: Related GAO Products
paragraphs: Veterans’ Health Care Budget: Improvements Made, but Additional  Actions Needed to Address Problems Related to Estimates Supporting  President’s Request, GAO-13-715 (Washington, D.C.: Aug. 8, 2013).
Veterans’ Health Care: Improvements Needed to Ensure That Budget  Estimates Are Reliable and That Spending for Facility Maintenance Is  Consistent with Priorities, GAO-13-220 (Washington, D.C.: Feb. 22,  2013).
Veterans’ Health Care Budget: Better Labeling of Services and More  Detailed Information Could Improve the Congressional Budget  Justification, GAO-12-908 (Washington, D.C.: Sept. 18, 2012).
Veterans’ Health Care Budget Estimate: Changes Were Made in  Developing the President’s Budget Request for Fiscal Years 2012 and  2013, GAO-11-622 (Washington, D.C.: Jun. 14, 2011).
Veterans’ Health Care: VA Uses a Projection Model to Develop Most of  Its Health Care Budget Estimate to Inform the President’s Budget  Request, GAO-11-205 (Washington, D.C.: Jan. 31, 2011).
VA Health Care: Long-Term Care Strategic Planning and Budgeting Need  Improvement, GAO-09-145 (Washington, D.C.: Jan. 23, 2009).
VA Long-Term Care: Data Gaps Impede Strategic Planning for and  Oversight of State Veterans’ Nursing Homes, GAO-06-264 (Washington,  D.C.: March 31, 2006).
VA Long-Term Care: Trends and Planning Challenges in Providing  Nursing Home Care to Veterans, GAO-06-333T (Washington, D.C.:   Jan. 9, 2006).
VA Long-Term Care: Oversight of Nursing Home Program Impeded by  Data Gaps, GAO-05-65 (Washington, D.C.: Nov. 10, 2004).