The Department of Veterans Affairs (VA) provides a range of benefits and services to veterans who meet certain eligibility rules; these benefits include medical care, disability compensation and pensions, education, vocational rehabilitation and employment services, assistance to homeless veterans, home loan guarantees, administration of life insurance as well as traumatic injury protection insurance for servicemembers, and death benefits that cover burial expenses. The VA carries out its programs nationwide through three administrations and the Board of Veterans Appeals (BVA). The Veterans Benefits Administration (VBA) is responsible for, among other things, providing compensation, pensions, and education assistance. The National Cemetery Administration (NCA) is responsible for maintaining national veterans' cemeteries; providing grants to states for establishing, expanding, or improving state veterans' cemeteries; and providing headstones and markers for the graves of eligible persons, among other things. The Veterans Health Administration (VHA) is responsible for health care services and medical and prosthetic research programs. The VHA is primarily a direct service provider of primary care, specialized care, and related medical and social support services to veterans through the nation's largest integrated health care system. The VHA is also a provider of health care education and training for physician residents and other health care trainees. In general, eligibility for VA health care is based on previous military service, presence of service-connected disabilities, and/or other factors. Veterans generally must enroll in the VA health care system to receive medical care. Once enrolled, veterans are assigned to one of eight categories (see Table A -1 ). It should be noted that in any given year, not all enrolled veterans obtain their health care services from VA. While some veterans may rely solely on VA for their care, others may receive the majority of their health care services from other sources, such as Medicare, Medicaid, private health insurance, and the military health system (TRICARE). VA-enrolled veterans do not pay premiums or enrollment fees to receive care from the VA; however, they may incur out-of-pocket costs for VA care related to conditions that are not service-connected. This report focuses on appropriations for VHA. It begins with a brief overview of the VA's budget as a whole for FY2012 and the President's request for FY2013. It then presents a brief overview of VHA's budget formulation, a description of the accounts that fund the VHA, and a summary of the FY2012 VHA budget. The report ends with a section discussing recent legislative developments pertaining to the FY2013 VHA budget. In order to understand annual appropriations for the Veterans Health Administration (VHA), it is essential to understand the role of advance appropriations. In 2009, Congress enacted the Veterans Health Care Budget Reform and Transparency Act of 2009 ( P.L. 111-81 ) authorizing advance appropriations for three of the four accounts that comprise VHA: medical services, medical support and compliance, and medical facilities. The fourth account, the medical and prosthetic research account, is not funded with an advance appropriation. P.L. 111-81 also required the Department of Veterans Affairs to submit a request for advance appropriations for VHA with its budget request each year. Congress first provided advance appropriations for the three VHA accounts in the FY2010 appropriations cycle. The Consolidated Appropriations Act, 2010 ( P.L. 111-117 ) provided advance appropriations for FY2011; the Department of Defense and Full-Year Continuing Appropriations Act, 2011 ( P.L. 112-10 ) provided advance appropriations for FY2012; the Consolidated Appropriations Act, 2012 ( P.L. 112-74 ), enacted into law on December 23, 2011, provided advance appropriations for FY2013; and the Consolidated and Further Continuing Appropriations Act, 2013 ( P.L. 113-6 ), enacted into law on March 26, 2013, provided advance appropriations for FY2014. Under current budget scoring guidelines, new budget authority for an advance appropriation is scored in the fiscal year in which the funds become available for obligation. Therefore, throughout the funding tables of this report, advance appropriations numbers are shown under the label "memorandum" and in the corresponding fiscal year column. For example, advance appropriations for FY2013 authorized by the Consolidated Appropriations Act, 2012 ( P.L. 112-74 ), are shown under a separate memorandum and in the FY2013 column. However, it should be noted that budget authority for FY2013 refers to the budget authority authorized in P.L. 112-74 and augmented by supplemental funding provided by the Disaster Relief Appropriations Act, 2013 ( P.L. 113-2 ) and by additional funding provided by Division E of the Consolidated and Further Continuing Appropriations Act, 2013 ( P.L. 113-6 ) that included funding for the medical and prosthetic research account (the account that is not funded as advance appropriations). Funding shown for FY2013 does not include advance appropriations provided in FY2013 by P.L. 113-6 for use in FY2014. The VA budget includes both mandatory and discretionary funding. Mandatory accounts fund disability compensation, pensions, vocational rehabilitation and employment, education, life insurance, housing, and burial benefits (such as graveliners, outer burial receptacles, and headstones), among other benefits and services. Discretionary accounts fund medical care, medical research, construction programs, information technology, and general operating expenses, among other things. Figure 1 provides a breakdown of FY2012 budget allocations for both mandatory and discretionary programs. In FY2012, the total VA budget authority was approximately $122.2 billion; discretionary budget authority accounted for about 48% ($58.5 billion) of the total, with about 88% ($51.2 billion) of this discretionary funding going toward supporting VA health care programs, including medical and prosthetic research. The VA's mandatory budget authority accounted for about 52% ($63.8 billion) of the total VA budget authority, with about 80% ($51.2 billion) of this mandatory funding going toward disability compensation and pension programs. Figure 2 provides a breakdown of the FY2013 President's budget request for both mandatory and discretionary programs (also see Table 3 ). For FY2013, the Administration requested approximately $135.6 billion. This includes approximately $61 billion in discretionary funding and nearly $74.6 billion in mandatory funding. Similar to most federal agencies, the VA begins formulating its budget request approximately 10 months before the President submits the budget to Congress, generally in early February. VHA's budget request to Congress begins with the formulations of the budget based on the Enrollee Health Care Projection Model (EHCPM). The model estimates the amount of budgetary resources VHA will need to meet the expected demand for most of the health care services it provides. The EHCPM's estimates are based on three basic components: the projected number of veterans who will be enrolled in VA health care, the projected utilization of VA's health care services—that is, the quantity of health care services enrollees are expected to use—and the projected unit cost of providing these services. Each component is subject to a number of adjustments to account for the characteristics of VA health care and the veterans who access VA's health care services. The EHCPM makes projections three or four years into the future. Each year, VHA updates the EHCPM estimates to "incorporate the most recent data on health care utilization rates, actual program experience, and other factors, such as economic trends in unemployment and inflation." For instance, in 2011, VHA used data from FY2010 to develop its health care budget estimate for the FY2013 request, including the advance appropriations request for FY2014. As noted previously, VHA is funded through four appropriations accounts. These are supplemented by other sources of revenue. Although the appropriations account structure has been subject to change from year to year, the appropriation accounts used to support the VHA traditionally include medical care, medical and prosthetic research, and medical administration. Congress also appropriates funds for construction of medical facilities through a larger appropriations account for construction for all VA facilities. In FY2004, "to provide better oversight and [to] receive a more accurate accounting of funds," Congress changed the VHA's appropriations structure. Specifically, the Department of Veterans Affairs and Housing and Urban Development and Independent Agencies Appropriations Act, 2004 ( P.L. 108-199 , H.Rept. 108-401 ), funded VHA through four accounts: (1) medical services, (2) medical administration (currently known as medical support and compliance), (3) medical facilities, and (4) medical and prosthetic research. Brief descriptions of these accounts are provided below. The medical services account covers expenses for furnishing inpatient and outpatient care and treatment of veterans and certain dependents, including care and treatment in non-VA facilities; outpatient care on a fee basis; medical supplies and equipment; salaries and expenses of employees hired under Title 38, United States Code (U.S.C. ); cost of hospital food service operations; aid to state veterans' homes; and assistance and support services for family caregivers of veterans authorized by the Caregivers and Veterans Omnibus Health Services Act of 2010 ( P.L. 111-163 ). For FY2013, the President's budget request proposed the transfer of funding for biomedical engineering services from the medical facilities account to this account. The Consolidated and Further Continuing Appropriations Act, 2013 ( P.L. 113-6 ) approved this transfer. This account provides for expenses related to the management, security, and administration of the VA health care system through the operation of VA medical centers, and other medical facilities such as community-based outpatient clinics (CBOCs) and Vet Centers.