Veterans' Medical Care Funding: FY1995-FY2004
Released: 2005-01-14T00:00:00

Appendix 1. Revenue Accounts That Constitute the Medical Care Collections Fund (MCCF) for FY2004

Pharmacy Co-payments (formerly collected in theHealth Services Improvement Fund -- HSIF). In FY2002, Congresscreated a new fund (Health Services Improvement Fund) to collect increases inpharmacy copayments (from $2 to $7 for a 30-day supply of outpatient medication)that went into effect on February 4, 2002. The Consolidated AppropriationsResolution, 2003 ( P.L.108-7 ) granted VA the authority to consolidate the HSIF withMCCF and granted permanent authority to recover copayments for outpatientmedications.

Long-Term Care Co-payment Account (formerlythe Veterans' Extended Care Revolving Fund). The MillenniumHealth Care and Benefits Act ( P.L.106-117 ) provided VA authority to collectlong-term care copayments. These out-of- pocket payments include per diemamounts and copayments from certain veteran patients receiving extended careservices. These funds are used to provide extended care services, which accordingto the Administration's budget documents, are defined as geriatric evaluation, nursinghome care, domiciliary services, respite care, adult day health care, and othernoninstitutional alternatives to nursing home care. (29)

Compensated Work Therapy Program (formerlythe Special Therapeutic and Rehabilitation Activities Fund). Theprogram was created by the Veterans' Omnibus Health Care Act of 1976 ( P.L.94-581 ) to provide rehabilitative services to certain veteran beneficiaries receivingmedical care and treatment from VA. Funds collected in this program are derivedfrom goods and services produced and sold by patients and members in VA healthcare facilities.

Compensation and Pension Living ExpensesProgram (formerly the Medical Facilities Revolving Fund). Theprogram was established by the Veterans' Benefits Act of 1992 ( P.L.102-568 ). Underthis program, veterans who do not have either a spouse or child may have theirmonthly pension reduced to $90 after the third month a veteran is admitted for nursing home care. The difference between the veteran's pension and the $90 is usedfor the operation of the VA medical facility.

Parking Program (formerly the Parking RevolvingFund). The program provides funds for construction and acquisitionof parking garages at VA medical facilities. VA collects fees for use of these parkingfacilities. The Consolidated Appropriations Act, 2004 authorized collections fromthe Parking Program to be deposited in MCCF and be used for medical services. Funds for construction or alterations of parking facilities will now be included underthe construction major projects and construction minor projects accounts. (30)

Sale of Assets (formerly the Nursing HomeRevolving Fund). This fund provides for construction, alteration,and acquisition (including site acquisition) of nursing home facilities as provided forin appropriation acts. Collections to this revolving fund are realized from the transferon any interest in real property that is owned by VA and has an estimated value inexcess of $50,000. No budget authority is required for this revolving fund, and fundsare available without fiscal year limitation.

Appendix 2. VHA's New Account Structure

Medical Services. Provides fundsfor treatment of veterans and eligible beneficiaries in VA medical centers, nursinghomes, outpatient clinic facilities, and contract hospitals. Hospital and outpatientcare is also provided by the private sector for certain dependents and survivors ofveterans under the Civilian Health and Medical Program of VA (CHAMPVA). Funds are also used to train medical residents, interns, and other professional,paramedical and administrative personnel in health science fields to support VA'smedical programs. Overhead costs associated with medical and prosthetic researchis also funded by this account.

Medical Administration. Providesfunds for the management and administration of VA's health care system. Funds areused for the costs associated with the operation of VA medical centers, otherfacilities, VHA headquarters, costs of Veterans Integrated Service Network (VISN)offices, billing and coding activities, and procurement. (31)

Medical Facilities. Provides fundsfor the operation and maintenance of VHA's infrastructure. Funds are used for costsassociated with utilities, engineering, capital planning, leases, laundry, food services,groundskeeping, garbage disposal, facility repair, and selling and buying of property.

Medical and Prosthetic Research. Provides funds for medical, rehabilitative, and health services research. The medicaland prosthetic research program is an intermural program. In addition to funds fromthis appropriation, reimbursements from the Department of Defense (DOD), grantsfrom the National Institutes of Health (NIH), and private sources supports VAresearches. Medical research supports basic and clinical studies that advancesknowledge so that efficient, and rational interventions can be made to prevent, carefor, or alleviate disease. The prosthetic research program is involved in thedevelopment of prosthetic, orthopedic and sensory aids to improve the lives ofdisabled veterans. The health services research program focuses on improving theoutcome effectiveness and cost-efficiency of health care delivery for the populationof veterans. Overhead costs associated with medical and prosthetic research are alsofunded by the medical services account.

Appendix 3. VHA's Appropriation for Capital Investments

Medical Administration. Providesfunds for costs associated with operation of medical centers, other facilities and VHAheadquarters as well as VISN offices. It also funds all the medical informationtechnology, including patient records, computer equipment and softwaredevelopment, which are considered capital assets by VA.

Medical Facilities. Provides fundsfor the operation and maintenance of VHA's infrastructure. Funds are used for costsassociated with utilities, engineering, capital planning, leases, laundry, food services,groundskeeping, garbage disposal, facility repair, and selling and buying of property.

Construction Major. Providesfunds for capital projects costing $7 million or more that are intended to design,build, alter, extend or improve a VHA facility. As part of VA's budget process,Congress reviews, approves, and funds major construction on a project by projectbasis. Typical major construction projects are replacements of hospital buildings,addition of large ambulatory care centers, and new hospitals or nursing homes.

Construction Minor Projects. Provides funds for capital projects costing $500,000 or more and less than $7 millionthat are intended to design, build, alter, extend or improve a VHA facility. Minorconstruction projects are approved at the Veterans Integrated Service Network(VISN) level.

Grants for Construction of State Extended CareFacilities. Provides grants to states for construction or acquisitionof state home facilities, including funds to remodel, modify or alter existing buildingsused for furnishing domiciliary, nursing home or hospital care to veterans. A grantmay not exceed 65% of the total cost of the project.

Appendix 4. Priority Groups and Their Eligibility Criteria