The Department of Veterans Affairs (VA) provides a range of benefits and services to veterans who meet certain eligibility criteria. These benefits and services include, among other things, hospital and 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 department carries out its programs nationwide through three administrations and the Board of Veterans Appeals (BVA). The Veterans Health Administration (VHA) is responsible for health care services and medical and prosthetic research programs. 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 BVA reviews all appeals made by veterans or their representatives for entitlement to veterans' benefits, including claims for service connection, increased disability ratings, pensions, insurance benefits, and educational benefits, among other things. This report provides a preliminary analysis of the President's budget request for FY2013 for the programs administered by the VA. The information provided in this report is based on the President's budget proposal provided to Congress on February 13, 2012. The report begins with a brief introduction to the department's budget. Next, it provides funding levels requested by the President for FY2013 for VA health related programs. This is followed by a discussion of funding levels requested for mandatory programs and administration, including programs such as construction of VA facilities and information technology. This not an exhaustive discussion of VA's budget request for FY2013. To provide some context to the discussion that follows, this section briefly introduces the various accounts that fund the department. The VA's budget is composed of both mandatory and discretionary spending accounts. Mandatory funding supports disability compensation, pension benefits, education, vocational rehabilitation, life insurance, and burial benefits, among other benefits and services. Discretionary funding supports a broad array of benefits and services with a majority of funding going toward providing medical care to veterans. According to the President's budget documents, in FY2012 the total VA budget authority was approximately $127.0 billion. The FY2013 budget request for the VA is for approximately $140.3 billion in budget authority. The VA's health care program is funded through multiple appropriations accounts that are supplemented by other sources of revenue. The appropriation accounts used to support VA health care programs include (1) medical services, (2) medical administration (currently known as medical support and compliance), (3) medical facilities, and (4) medical and prosthetic research. In addition to the direct appropriations accounts mentioned above, the Consolidated Omnibus Budget Reconciliation Act of 1985 ( P.L. 99-272 ), enacted into law in 1986, gave the VA the authority to bill some veterans and most health care insurers for non-service-connected care provided to veterans enrolled in the VA health care system to help defray the cost of delivering medical services to veterans. The Balanced Budget Act of 1997 ( P.L. 105-33 ) gave the VA the authority to retain these funds in the Medical Care Collections Fund (MCCF). The funds deposited into the MCCF would be available for medical services for veterans. These collected funds do not have to be spent in any particular fiscal year and are available until expended. In 2009, Congress passed the Veterans Health Care Budget Reform and Transparency Act of 2009 ( P.L. 111-81 ) that authorized advance appropriations for three of the four accounts that comprise the VHA: medical services, medical support and compliance, and medical facilities. The medical and prosthetic research account is not funded as an advance appropriation, but is funded through the regular appropriations process. The medical services account funds health care services provided to eligible veterans and beneficiaries in VA's medical centers, outpatient clinic facilities, contract hospitals, state homes, and outpatient programs on a fee basis. The medical support and compliance account funds management and administration of the VA health care system, including financial management. The medical facilities account includes funds for the operation and maintenance of the VA health care system's capital infrastructure (excluding construction), such as costs associated with utilities, facility repair, laundry services, and groundskeeping. The Veterans Health Administration (VHA) operates the nation's largest integrated direct health care delivery system. Although Medicare, Medicaid, and the Children's Health Insurance Program (CHIP) are also publicly funded programs, most health care services under these programs are delivered by private providers in private facilities. In contrast, the VA health care system could be categorized as a veteran-specific national health care system, in the sense that the federal government owns the medical facilities and employs the health care providers. The VA's health care system is organized into 21 geographically defined Veterans Integrated Service Networks (VISNs). Although policies and guidelines are developed at VA headquarters to be applied throughout the VA health care system, management authority for basic decision making and budgetary responsibilities are delegated to the VISNs. As of FY2012, VHA operates 152 hospitals (medical centers), 133 nursing homes, 824 community-based outpatient clinics (CBOCs), 6 independent outpatient clinics, and 300 Readjustment Counseling Centers (Vet Centers). In 2009, VA began a pilot Mobile Vet Center (MVC) program to improve access to services for veterans in rural areas, and the Department has deployed 70 MVCs to date. VHA also operates 10 mobile outpatient clinics. VHA provides most health care services to eligible veterans through its integrated network of facilities. However, current law authorizes VHA to pay for non-VA providers: (1) when a clinical service cannot be provided at a VA medical center (VAMC); (2) when VA health care facilities are geographic inaccessibility to the veteran; or (3) in emergencies when delays could lead to life threatening situations. These are generally referred to as Fee Basis Care services. Fee Basis Care may include dental services, outpatient care, inpatient care, emergency care, and medical transportation. Pre-authorized inpatient services include non-emergency and emergency care. Inpatient and outpatient care are also provided in the private sector to eligible dependents of veterans under the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA). The VHA also provides grants for construction of state-owned nursing homes and domiciliary facilities and collaborates with the Department of Defense (DOD) in sharing health care resources and services. Apart from providing direct patient care to veterans, VHA's other statutory missions are to conduct medical research, serve as a contingency backup to the DOD medical system during a national security emergency, provide support to the National Disaster Medical System and the Department of Health and Human Services as necessary, and train health care professionals to provide an adequate supply of health personnel for the VA and the nation. In FY2012, approximately 8.7 million of the 22.1 million living veterans in the nation were enrolled in the VA health care system. It is estimated that in FY2013 there will be approximately 8.8 million veterans enrolled in the system. Of the total number of enrolled veterans in FY2012, VA anticipated treating approximately 5.6 million unique veteran patients. For FY2013, VHA estimates that it will treat about 5.7 million unique veteran patients or 2.0% over the FY2012 estimate. Included within this estimate are 610,416 Operation Enduring Freedom, Operation Iraqi Freedom, and Operation New Dawn (OEF/OIF/OND) veteran patients (9.7% of the total patient population) who VA anticipates treating in FY2013. The VHA also estimates that outpatient visits will increase from 87.7 million in FY2012 to 91.1 million in FY2013, an increase of 3.3 million, or 3.8 %. It also anticipates an increase in inpatients treated from 919,487 in FY2012 to 936,201 in FY2013, an increase of 16,714, or 1.8%. The VA's annual appropriations for the medical services, medical support and compliance, and medical facilities accounts, include advance appropriations that become available one fiscal year after the fiscal year for which the appropriations act was enacted. Therefore, funding levels for FY2013 for these three accounts were provided by the Consolidated Appropriations Act 2012 ( P.L. 112-74 ). However, in any given year the Administration could request additional funding for the upcoming fiscal year and Congress could revise these amounts through the annual appropriations process. For FY2013, the President's budget is requesting $41.5 billion for the medical services account. This amount is $165 million over the FY2013 advance appropriated amount of $41.4 billion. According to the VA, this increase reflects the increased costs of the implementation of the Caregivers and Veterans Omnibus Health Services Act ( P.L. 111-163 ) and the Agent Orange and Amyotrophic Lateral Sclerosis (ALS) presumptions established by the VA. , For the medical support and compliance, and the medical facilities accounts, the President's FY2013 budget is proposing the same amount as the advance appropriated amount of $5.7 billion and $5.4 billion, respectively (see Table 1 ). The President's budget is requesting approximately $583 million for the medical and prosthetic research account, an increase of $1.7 million, or 0.3%, above the FY2012 enacted amount of $581 million. VHA's major research priorities in FY2013 will include, among others, mental health, Gulf War veterans' illnesses and exposures, prosthetics, traumatic brain injury (TBI), spinal cord injury, women veterans, and a special initiative on researching pain.